PALE CASES March 3

Adm. Case No.
5530 January 28, 2013
SPOUSES ARCING AND CRESING BAUTISTA, EDAY RAGADIO and FRANCING GALGALAN, Complainants,
vs.
ATTY. ARTURO CEFRA, Respondent.
DECISION
BRION, J.:
Before us is a complaint for disbarment filed by spouses Arcing and Cresing Bautista, Eday Regadio1 and Francing Galgalan
(complainants) against Atty. Arturo Cefra for violating Canon 18 of the Code of Professional Responsibility and Rules 138 and 139 of
the Rules of Court.
The Facts
The complainants were the defendants in Civil Case No. U-6504 an action for quieting of title, recovery of possession and damages
filed in the Regional Trial Court (RTC), Branch 45, Urdaneta City, Pangasinan.2 The complainants engaged the services of Atty. Cefra to
represent them in the proceedings. According to the complainants, they lost in Civil Case No. U-6504 because of Atty. Cefra’s
negligence in performing his duties as their counsel. First, Atty. Cefra only presented testimonial evidence and disregarded two (2)
orders of the RTC directing him to submit a formal offer of documentary exhibits. Second, Atty. Cefra belatedly submitted the formal
offer of documentary exhibits after the complainants had been declared to have waived their right to make a submission. Third, Atty.
Cefra did not file a motion or appeal and neither did he file any other remedial pleading to contest the RTC’s decision rendered against
them.
The Court ordered Atty. Cefra to comment on the complaint. Despite the extensions of time given by the Court, Atty. Cefra did not file
any comment. He did not also comply with the Court’s Minute Resolutions,3 dated December 14, 2005 and March 22, 2006, directing
him to pay a ₱2,000.00 fine and to submit the required comment.
On July 16, 2008, we held Atty. Cefra in contempt of court, ordering his detention for five (5) days. We also reiterated the order for Atty.
Cefra to pay a ₱2,000.00 fine and to submit a comment on the complaint.4
On August 4, 2008, Atty. Cefra filed his Comment,5 denying the allegations in the complaint. He claimed that the complainants
misunderstood the RTC’s decision:
2. That Respondent denies the allegation in Paragraphs (sic) 7 of the complaint that defendants miserably lost the case
because the Decision itself confirmed and affirmed our stand that defendants do not contest the ownership of x x x Serlito
Evangelista x x x.
3. That it was defendants (sic) failure to fully understand the Decision which led to the filing of this administrative case and
which subsequent events have proven that in the implementation of the Writ of Execution the land owned by the defendants
covered by Transfer Certificates of Titles were not affected.6
In a Minute Resolution7 dated September 24, 2008, we referred the case to the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation/decision.
The Report and Recommendation of the IBP
On June 11, 2009, the Investigating Commissioner8 recommended the dismissal of the complaint. The Investigating Commissioner
opined:
The administrative complaint failed to show sufficient evidence to warrant disciplinary action against respondent. Complainants filed this
complaint because they believed that they lost their case, however, their claim over their properties was not affected by the Decision of
the court.9
In Resolution No. XIX-2010-285 dated April 16, 2010, the IBP Board of Governors reversed the findings of the Investigating
Commissioner. The IBP Board of Governors found Atty. Cefra negligent in handling the complainants’ case and unanimously approved
his suspension from the practice of law for six (6) months.
Atty. Cefra filed a motion for reconsideration. On January 14, 2012, in Resolution No. XX-2012-24, the IBP Board of Governors partially
granted Atty. Cefra’s motion in this wise:
RESOLVED to PARTIALLY GRANT Respondent’s Motion for Reconsideration and unanimously MODIFY Resolution No. XIX-2010-285
dated April 16, 2010 Suspending Atty. Arturo B. Cefra from the practice of law for six (6) months to REPRIMANDED considering that the
failure was not material to the case and that complainants were not prejudice. [emphasis supplied]
The Court’s Ruling
Except for the recommended penalty, we agree with the IBP Board of Governors that Atty. Cefra has been guilty of negligence in
handling the complainants’ case. His actuations in the present administrative case also reveal his lack of diligence in performing his
duties as an officer of the Court.
The Code of Professional Responsibility mandates that "a lawyer shall serve his client with competence and diligence."10
It further states that "a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render
him liable."11 In addition, a lawyer has the corresponding duty to "keep the client informed of the status of his case."12
In Jardin v. Villar, Jr.,13 the Court held:
Every case a lawyer accepts deserves his full attention, diligence, skill and competence, regardless of its importance and whether he
accepts it for a fee or free. Certainly, a member of the Bar who is worth his title cannot afford to practice the profession in a
lackadaisical fashion. A lawyer’s lethargy from the perspective of the Canons is both unprofessional and unethical.
Atty. Cefra failed to live up to these standards. Interestingly, he did not deny the complainants’ allegations and impliedly admitted his
actions in the proceedings in Civil Case No. U-6504.
The records further substantiate clear acts of negligence on Atty. Cefra’s part in handling the complainants’ case.
First, Atty. Cefra failed to submit a formal offer of documentary evidence within the period given by the RTC. Atty. Cefra
submitted a formal offer of documentary evidence five (5) months after the RTC’s first order directing him to make a formal
offer. The formal offer of evidence was only made after the complainants had been declared by the RTC to have waived their
right to submit a formal offer of documentary evidence.
Second, Atty. Cefra failed to comply with the two (2) orders of the RTC directing him to submit a formal offer of documentary
evidence. He made no effort to submit the required formal offer of documentary evidence within the prescribed period. Neither
did he give his reasons, within the required period, on why he could not make the required formal offer of documentary
evidence. In fact, Atty. Cefra’s belated explanation for this omission was only done in a motion for reconsideration (with motion
to admit the formal offer of documentary evidence) that he subsequently filed, which motion the RTC denied for lack of merit.
Third, Atty. Cefra failed to file an appropriate motion or appeal, or avail of any remedial measure to contest the RTC’s decision.
His claim that the complainants had not been prejudiced by the RTC’s decision is incorrect. The dispositive portion of the
RTC’s decision clearly adjudged the complainants liable to pay ₱30,000.00 moral damages.14 Considering the pecuniary
consequence of the RTC’s decision to his clients, Atty. Cefra should have filed a motion for reconsideration before the RTC or
appealed the RTC’s decision with the Court of Appeals, or he should have at least immediately explained to his clients his
reasons for not taking remedial action. The failure to avail of available remedial measures apparently prejudiced his clients. As
matter now stands, the complainants’ liability under the RTC’s decision is already final and executory.
Fourth, Atty. Cefra’s allegations in his Comment show his failure to effectively communicate with the complainants. As Atty.
Cefra puts it, the administrative complaint was the result of the complainants’ failure to fully understand the RTC’s decision. In
other words, he admits that the present case would have been averted had he exerted reasonable efforts to inform the
complainants of the legal implications of the RTC’s decision and to explain to them the material developments in the case.
We significantly note that even before this Court, Atty. Cefra’s conduct was less than what is expected of an officer of the Court. He was
held in contempt for his cavalier and indifferent attitude in complying with the Court’s directives.
In sum, the above actuations showing Atty. Cefra’s lack of diligence and inattention to his duties as a lawyer warrant disciplinary
sanction. We have repeatedly held that "[t]he practice of law is a privilege bestowed by the State on those who show that they possess
the legal qualifications for it.
Lawyers are expected to maintain at all times a high standard of legal proficiency and morality, including honesty, integrity and fair
dealing. They must perform their fourfold duty to society, the legal profession, the courts and their clients, in accordance with the values
and norms of the legal profession as embodied in the Code of Professional Responsibility.15
Under the circumstances, the IBP Board of Governors’ recommended penalty of simple reprimand is not commensurate with the gravity
of Atty. Cefra’s infractions. As the complainants incurred pecuniary damage by reason of Atty. Cefra’s negligence, a suspension of one
(1) year from the practice of law is in order.16
WHEREFORE, premises considered, we find Atty. Arturo Cefra guilty of negligence, in violation of Rules 18.03 and 18.04 of the Code of
Professional Responsibility. He is hereby SUSPENDED from the practice of law for one (1) year and STERNLY WARNED that a
repetition of the same or similar offense will be dealt with more severely.
Let a copy of this Decision be furnished to the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the
Court Administrator for circulation to all the courts.
SO ORDERED.
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.C. No. 7766 August 5, 2014
JOSE ALLAN TAN, Complainant,

vs.
PEDRO S. DIAMANTE, Respondent.
DECISION
PER CURIAM:
For the Court's resolution is an administrative Complaint1 for disbarment dated February 1, 2008 filed by complainant Jose Allan Tan
(complainant) against respondent Pedro S. Diamante (respondent), charging him of violating the Code of Professional Responsibility
(CPR) and the lawyer’s oath for fabricating and using a spurious court order, and for failing to keep his client informed of the status of
the case.
The Facts
On April 2, 2003, complainant, claiming to be a recognized illegitimate son of the late Luis Tan, secured the services of respondent in
order to pursue a case for partition of property against the heirs of the late spouses Luis and Natividad Valencia-Tan.2 After accepting
the engagement, respondent filed the corresponding complaint3 before the Regional Trial Court of Bacolod City, Branch 46 (RTC),
docketed as Civil Case No. 03-11947. The complaint was eventually dismissed by the RTC in an Order4 dated July 25, 2007 for lack of
cause of action and insufficiency of evidence.5 While respondent was notified of such dismissal as early as August 14,
2007,6 complainant learned of the same only on August 24, 2007 when he visited the former’s office.7 On such occasion, respondent
allegedly asked for the amount of ₱10,000.00 for the payment of appeal fees and other costs, but since complainant could not produce
the said amount at that time, respondent, instead, asked and was given the amount of ₱500.00 purportedly as payment of the
reservation fee for the filing of a notice of appeal before the RTC.8 On September 12, 2007, Tan handed the amount of ₱10,000.00 to
respondent, who on even date, filed a notice of appeal9 before the RTC.10
In an Order11 dated September 18, 2007, the RTC dismissed complainant’s appeal for having been filed beyond the reglementary
period provided for by law. Respondent, however, did not disclose such fact and, instead, showed complainant an Order12 dated
November 9, 2007 purportedly issued by the RTC (November 9, 2007 Order) directing the submission of the results of a DNA testing to
prove his filiation to the late Luis Tan, within 15 days from receipt of the notice. Considering the technical requirements for such kind of
testing, complainant proceeded to the RTC and requested for an extension of the deadline for its submission. It was then that he
discovered that the November 9, 2007 Order was spurious, as certified by the RTC’s Clerk of Court.13 Complainant also found out that,
contrary to the representations of respondent, his appeal had long been dismissed.14 Aggrieved, he filed the instant administrative
complaint for disbarment against respondent.
In his Comments/Compliance15 dated September 4, 2009, respondent alleged that it was complainant’s failure to timely produce the
amount of 1,400.00 to pay for the appeal fees that resulted in the late filing of his appeal. According to him, he informed complainant of
the lapse of the reglementary period to appeal, but the latter insisted in pursuing the same. He also claimed to have assisted
complainant "not for money or malice" but being a desperate litigant, he was blamed for the court’s unfavorable decision.16
The IBP’s Report and Recommendation
In a Report and Recommendation17 dated September 21, 2010, the Integrated Bar of the Philippines (IBP) Investigating Commissioner
found respondent administratively liable, and accordingly recommended that the penalty of suspension for a period of one (1) year be
meted out against him.18
The Investigating Commissioner found complainant’s imputations against respondent to be well-founded, observing that instead of
meeting complainant’s allegations squarely, particularly, the issue of the nondisclosure of the dismissal of the partition case, respondent
sidestepped and delved on arguments that hardly had an effect on the issues at hand.19
Moreover, the Investigating Commissioner did not find credence in respondent’s accusation that the spurious November 9, 2007 Order
originated from complainant, ratiocinating that it was respondent who was motivated to fabricate the same to cover up his lapses that
brought about the dismissal of complainant’s appeal and make it appear that there is still an available relief left for Tan.20
In a Resolution dated April 16, 2013, the IBP Board of Governors unanimously adopted and approved the aforesaid report and
recommendation.21
The Issue Before the Court
The essential issue in this case is whether or not respondent should be held administratively liable for violating the CPR.
After a judicious perusal of the records, the Court concurs with the IBP’s findings, subject to the modification of the recommended
penalty to be imposed upon respondent.
Under Rule 18.04, Canon 18 of the CPR, it is the lawyer’s duty to keep his client constantly updated on the developments of his case
as it is crucial in maintaining the latter’s confidence, to wit:
CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to client’s
request for information.
As an officer of the court, it is the duty of an attorney to inform his client of whatever important information he may have acquired
affecting his client’s case. He should notify his client of any adverse decision to enable his client to decide whether to seek an appellate
review thereof. Keeping the client informed of the developments of the case will minimize misunderstanding and loss of trust and
confidence in the attorney. The lawyer should not leave the client in the dark on how the lawyer is defending the client’s interests.22 In
this connection, the lawyer must constantly keep in mind that his actions, omissions, or nonfeasance would be binding upon his client.
Concomitantly, the lawyer is expected to be acquainted with the rudiments of law and legal procedure, and a client who deals with him
has the right to expect not just a good amount of professional learning and competence but also a whole-hearted fealty to the client’s
cause.23
In the case at bar, records reveal that as of August 14, 2007, respondent already knew of the dismissal of complainant’s partition case
before the RTC. Despite this fact, he never bothered to inform complainant of such dismissal as the latter only knew of the same on
August 24, 2007 when he visited the former’s office. To add insult to injury, respondent was inexcusably negligent in filing complainant’s
appeal only on September 12, 2007, or way beyond the reglementary period therefor, thus resulting in its outright dismissal. Clearly,
respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly possess and exercise in such
matters of professional employment.24
Worse, respondent attempted to conceal the dismissal of complainant’s appeal by fabricating the November 9, 2007 Order which
purportedly required a DNA testing to make it appear that complainant’s appeal had been given due course, when in truth, the same
had long been denied. In so doing, respondent engaged in an unlawful, dishonest, and deceitful conduct that caused undue prejudice
and unnecessary expenses on the part of complainant. Accordingly, respondent clearly violated Rule 1.01, Canon 1 of the CPR, which
provides:
CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes.
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
As officers of the court, lawyers are bound to maintain not only a high standard of legal proficiency, but also of morality, honesty,
integrity, and fair dealing,25 failing in which whether in his personal or private capacity, he becomes unworthy to continue his practice of
law.26 A lawyer’s inexcusable neglect to serve his client’s interests with utmost diligence and competence as well as his engaging in
unlawful, dishonest, and deceitful conduct in order to conceal such neglect should never be countenanced, and thus, administratively
sanctioned.
In view of the foregoing, respondent’s conduct of employing a crooked and deceitful scheme to keep complainant in the dark and
conceal his case’s true status through the use of a falsified court order evidently constitutes Gross Misconduct.27 His acts should not
just be deemed as unacceptable practices that are disgraceful and dishonorable; they reveal a basic moral flaw that makes him unfit to
practice law.28 In this regard, the Court’s pronouncement in Sebastian v. Calis29 is instructive, viz.:
Deception and other fraudulent acts by a lawyer are disgraceful and dishonorable. They reveal moral flaws in a lawyer.1âwphi1 They
are unacceptable practices. A lawyer’s relationship with others should be characterized by the highest degree of good faith, fairness
and candor. This is the essence of the lawyer’s oath. The lawyer’s oath is not mere facile words, drift and hollow, but a sacred trust that
must be upheld and keep inviolable. The nature of the office of an attorney requires that he should be a person of good moral character.
This requisite is not only a condition precedent to the admission to the practice of law, its continued possession is also essential for
remaining in the practice of law. We have sternly warned that any gross misconduct of a lawyer, whether in his professional or private
capacity, puts his moral character in serious doubt as a member of the Bar, and renders him unfit to continue in the practice of
law.30 (Emphases and underscoring supplied)
Jurisprudence reveals that in analogous cases where lawyers failed to inform their clients of the status of their respective cases, the
Court suspended them for a period of six (6) months. In Mejares v. Romana,31 the Court suspended the lawyer for the same period for
his failure to timely and adequately inform his clients of the dismissal of their petition. In the same vein, in Penilla v. Alcid, Jr.,32 the same
penalty was imposed on the lawyer who consistently failed to update his client of the status of his cases, notwithstanding several follow-
ups.
However, in cases where lawyers engaged in unlawful, dishonest, and deceitful conduct by falsifying documents, the Court found them
guilty of Gross Misconduct and disbarred them. In Brennisen v. Contawi,33 the Court disbarred the lawyer who falsified a special power
of attorney in order to mortgage and sell his client’s property. Also, in Embido v. Pe,34 the penalty of disbarment was meted out against
the lawyer who falsified an in existent court decision for a fee.
As already discussed, respondent committed acts of falsification in order to misrepresent to his client, i.e., complainant, that he still had
an available remedy in his case, when in reality, his case had long been dismissed for failure to timely file an appeal, thus, causing
undue prejudice to the latter. To the Court, respondent’s acts are so reprehensible, and his violations of the CPR are so flagrant,
exhibiting his moral unfitness and inability to discharge his duties as a member of the bar. His actions erode rather than enhance the
public perception of the legal profession. Therefore, in view of the totality of his violations, as well as the damage and prejudice caused
to his client, respondent deserves the ultimate punishment of disbarment.
WHEREFORE, respondent Pedro S. Diamante is hereby DISBARRED for Gross Misconduct and violations of Rule 1.01, Canon 1, and
Rule 18.04, Canon 18 of the Code of Professional Responsibility, and his name is ordered STRICKEN OFF from the roll of attorneys.
Let a copy of this Decision be attached to respondent Pedro S. Diamante's record in this Court. Further, let copies of this Decision be
furnished to the Integrated Bar of the Philippines and the Office of the Court Administrator, which is directed to circulate them to all the
courts in the country for their information and guidance.
SO ORDERED.
ROLANDO VIRAY, Complainant, v. ATTY. EUGENIO T. SANICAS, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a verified Complaint for Disbarment/Gross Immoral Conduct1 filed with this Court on September 18, 2006 by complainant
Rolando Viray (complainant) against respondent Atty. Eugenio T. Sanicas (respondent).
Factual Antecedents
Complainant alleges that he engaged the services of respondent relative to a labor case2 he filed against Ester Lopez and Teodoro
Lopez III (spouses Lopez). On February 26, 2001, the Labor Arbiter ruled in favor of complainant and disposed of the case as
follows:ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents Ester Lopez and Teodoro Lopez III to pay
complainant Rolando Viray of the following, to wit:
1. Backwages……………….……..P146,726.67
2. Separation Pay………………….…24,000.00
3. Service Incentive Leave Pay……….1,538.46
4. Attorney’s Fees………………...….17,226.51
or a total amount of One Hundred Eighty Nine Thousand Four Hundred Ninety One Pesos & 64/100 (P189,491.60) [sic] to be deposited
with the Cashier of this Office, within ten (10) days from receipt hereof.
All other claims are hereby denied for lack of merit.
SO ORDERED.3
Subsequently, an Alias Writ of Execution4 was issued relative to aforesaid decision. During the implementation of said writ, however,
complainant discovered that respondent had already collected the total amount of P95,000.00 from spouses Lopez. Respondent
received said amount in the following manner:ChanRoblesVirtualawlibrary
Date Voucher No. Amount Purpose

02/05/2004 7802 P 20,000.00 Attorney’s fees
02/13/2004 7833 10,000.00 Partial payment for judgment
Total Amount: P 95,000.00
Complainant also discovered that respondent misrepresented to spouses Lopez that he is authorized to receive payments on his
behalf, when in truth and in fact he is not. Consequently, complainant made several verbal demands to the respondent to remit to him
the amount of P95,000.00, less his attorney’s fees of P20,000.00. But respondent did not budge. Thus, complainant lodged a
complaint before the Office of the Punong Barangay of Brgy. Felisa, Bacolod City. Respondent, however, ignored the summons to
attend a conference before the barangay to resolve the issues.
In his Comment,5 respondent admits that he received P95,000.00 from spouses Lopez on installments, but denies that he was not
authorized to accept it. He explains that complainant agreed to pay him additional attorney’s fees equivalent to 25% of the total
monetary award, on top of the attorney’s fees that may be awarded by the labor tribunal, and to refund all expenses respondent
incurred relative to the case. Thus, from the total award of P189,491.60, the sum of P17,226.57 representing respondent’s professional
fees has to be deducted, leaving a balance of P172,275.13.6 Then from said amount, complainant proposed that he will get
P100,000.00 and the balance of P72,275.13 shall belong to respondent as and for his additional 25% attorney’s fees and
reimbursement for all expenses he incurred while handling the case. However, after receiving the amount of P95,000.00 and deducting
therefrom the amounts of P20,000.007 attorney’s fees, P17,000.00 earlier given to complainant, and P2,000.00 paid to the sheriff, what
was left to respondent was only P56,000.00. Respondent whines that this amount is way below the promised 25% attorney’s fees and
refund of expenses in the total amount of P72,275.13.
Respondent asserts that, in any event, complainant will still be receiving a sum greater than what he expects to receive. He avers that
complainant is still entitled to receive from spouses Lopez the sum of P93,491.60. Adding the P17,000.00 respondent previously
remitted to complainant, the latter will get a total amount of P110,491.60. This amount, according to respondent, exceeds the amount
of P100,000.00 complainant agreed to and expected to receive.
IBP’s Report and Recommendation
On February 26, 2007,8 we referred this case to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation. On January 31, 2011, the Investigating Commissioner issued his Report and Recommendation9 with the following
recommendation:
In view of the foregoing, it is respectfully recommended that the respondent be meted the penalty of two (2) years suspension.
Respondent is also ordered to return, in restitution all the amounts in his possession which are due to complainant, less his rightful
attorney’s fees.10
On October 28, 2011, the IBP Board of Governors adopted Resolution No. XX-2011-139,11 which approved the Report and
Recommendation of the Investigating Commissioner suspending respondent from the practice of law for two years, but with the
modification that respondent should restitute the sum of P85,500.0012 to the complainant.
Issue
The essential issue in this case is whether the respondent is guilty of gross misconduct for his failure to promptly account to his client
the funds received in the course of his professional engagement and return the same upon demand.
“The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing with the moneys entrusted to
lawyers because of their fiduciary relationship.”13 Specifically, Rule 16.01 of the Code imposes upon the lawyer the duty to “account for
all money or property collected or received for or from the client.” Rule 16.03 thereof, on the other hand, mandates that “[a] lawyer shall
deliver the funds x x x of his client when due or upon demand.”
In this case, respondent on nine separate occasions from February 5, 2004 to April 30, 2004 received payments for attorney’s fees and
partial payments for monetary awards on behalf of complainant from spouses Lopez. But despite the number of times over close to
three months he had been receiving payment, respondent neither informed the complainant of such fact nor rendered an accounting
thereon. It was only when an Alias Writ of Execution was issued and being implemented when complainant discovered that spouses
Lopez had already given respondent the total amount of P95,000.00 as partial payment for the monetary awards granted to him by the
labor tribunal.
To make matters worse, respondent withheld and refused to deliver to the complainant said amount, which he merely received on
behalf of his client, even after demand. Complainant brought the matter before the barangay, but respondent simply ignored the same.
Such failure and inordinate refusal on the part of the respondent to render an accounting and return the money after demand raises the
presumption that he converted it to his own use.14 His unjustified withholding of the funds also warrants the imposition of disciplinary
action against him.15cralawred
Respondent justifies his action by asserting that complainant authorized him to receive payment. He implies that he is also authorized
to apply the sum of money he received from spouses Lopez to his additional 25% attorney’s fees and reimbursement for all expenses
he incurred for the case, in the total amount of P72,275.13. However, after deducting from the amount of P95,000.00 the amounts of
P20,000.00, P17,000.00, and P2,000.00, what was left to respondent, to his dismay was only P56,000.00.
The Court is not impressed. As aptly observed by the Investigating Commissioner, other than his self-serving statements, there is
nothing in the records which would support respondent’s claim that he was authorized to receive the payments. Neither is there proof
that complainant agreed to pay him additional 25% attorney’s fees and reimburse him for all expenses he allegedly incurred in
connection with the case. Respondent did not present any document, retainer’s agreement, or itemized breakdown of the amount to be
reimbursed to support his claim. In any event, even assuming that respondent was authorized to receive payments, the same does not
exempt him from his duty of promptly informing his client of the amounts he received in the course of his professional employment.
“The fiduciary nature of the relationship between counsel and client imposes on a lawyer the duty to account for the money or property
collected or received for or from the client. He is obliged to render a prompt accounting of all the property and money he has collected
for his client.” 16 “The fact that a lawyer has a lien for his attorney’s fees on the money in his hands collected for his client does not
relieve him from the obligation to make a prompt accounting.”17 Moreover, a lawyer has no right “to unilaterally appropriate his client’s
money for himself by the mere fact alone that the client owes him attorney’s fees.”18cralawred
In sum, “[r]espondent’s failure to immediately account for and return the money when due and upon demand violated the trust reposed
in him, demonstrated his lack of integrity and moral soundness, and warrants the imposition of disciplinary action.”19cralawred
The Penalty
“The penalty for gross misconduct consisting in the failure or refusal despite demand of a lawyer to account for and to return money or
property belonging to a client has been suspension from the practice of law for two years.”20 Thus, the IBP Board of Governors did not
err in recommending the imposable penalty. Considering, however, that this is respondent’s first offense and he is already a
nonagenarian,21the Court, in the exercise of its compassionate judicial discretion, finds that a penalty of one year suspension is
sufficient.
WHEREFORE, the Court finds respondent Atty. Eugenio T. Sanicas GUILTY of gross misconduct and accordingly SUSPENDS him
from the practice of law for one (1) year upon the finality of this Resolution, with a warning that a repetition of the same or similar act or
offense shall be dealt with more severely.
Atty. Sanicas is ordered to return to complainant, within 90 days from finality of this Resolution, the net amount of P85,500.00 with
interest at the rate of 6% per annum from finality of this Resolution until the full amount is returned. Failure to comply with the foregoing
directive will warrant the imposition of a more severe penalty.
Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Sanicas’ record as a member of the Bar.
SO ORDERED.cralawlaw library
EN BANC
[ A.C. No. 9532, October 08, 2013 ]
MARIA CRISTINA ZABALJAUREGUI PITCHER, COMPLAINANT, VS. ATTY. RUSTICO B. GAGATE, RESPONDENT.
DECISION
PERLAS-BERNABE, J.:
For the Court's resolution is an administrative complaint[1] filed by Maria Cristina Zabaljauregui Pitcher (complainant) against Atty.
Rustico B. Gagate (respondent), charging him for gross ignorance of the law and unethical practice of law.
The Facts
Complainant claimed to be the legal wife of David B. Pitcher (David),[2] a British national who passed away on June 18, 2004.[3] Prior to
his death, David was engaged in business in the Philippines and owned, among others, 40% of the shareholdings in Consulting Edge,
Inc.[4] (Consulting Edge), a domestic corporation. In order to settle the affairs of her deceased husband, complainant engaged the
services of respondent.[5]
On June 22, 2004, complainant and respondent met with Katherine Moscoso Bantegui (Bantegui),[6] a major stockholder of Consulting
Edge,[7] in order to discuss the settlement of David's interest in the company.[8] They agreed to another meeting which was, however,
postponed by Bantegui. Suspecting that the latter was merely stalling for time in order to hide something, respondent insisted that the
appointment proceed as scheduled.[9]
Eventually, the parties agreed to meet at the company premises on June 28, 2004. However, prior to the scheduled meeting,
complainant was prevailed upon by respondent to put a paper seal on the door of the said premises, assuring her that the same was
legal.[10]
On the scheduled meeting, Bantegui expressed disappointment over the actions of complainant and respondent, which impelled her to
just leave the matter for the court to settle. She then asked them to leave, locked the office and refused to give them a duplicate key. [11]
Subsequently, however, respondent, without the consent of Bantegui, caused the change in the lock of the Consulting Edge office door,
[12]
which prevented the employees thereof from entering and carrying on the operations of the company. This prompted Bantegui to file
before the Office of the City Prosecutor of Makati (Prosecutor's Office) a complaint for grave coercion against complainant and
respondent.[13] In turn, respondent advised complainant that criminal and civil cases should be initiated against Bantegui for the
recovery of David's personal records/business interests in Consulting Edge.[14] Thus, on January 17, 2005, the two entered into a
Memorandum of Agreement,[15] whereby respondent undertook the filing of the cases against Bantegui, for which complainant paid the
amount of P150,000.00 as acceptance fee and committed herself to pay respondent P1,000.00 for every court hearing.[16]
On November 18, 2004, the Prosecutor's Office issued a Resolution[17] dated October 13, 2004, finding probable cause to charge
complainant and respondent for grave coercion. The corresponding Information was filed before the Metropolitan Trial Court of Makati
City, Branch 63, docketed as Criminal Case No. 337985 (grave coercion case), and, as a matter of course, warrants of arrest were
issued against them.[18] Due to the foregoing, respondent advised complainant to go into hiding until he had filed the necessary motions
in court. Eventually, however, respondent abandoned the grave coercion case and stopped communicating with complainant.[19] Failing
to reach respondent despite diligent efforts,[20] complainant filed the instant administrative case before the Integrated Bar of the
Philippines (IBP) - Commission on Bar Discipline (CBD), docketed as CBD Case No. 06-1689.
Despite a directive[21] from the IBP-CBD, respondent failed to file his answer to the complaint. The case was set for mandatory
conference on November 24, 2006,[22] which was reset twice,[23] on January 12, 2007 and February 2, 2007, due to the absence of
respondent. The last notice sent to respondent, however, was returned unserved for the reason "moved out."[24] In view thereof,
Investigating Commissioner Tranquil S. Salvador III declared the mandatory conference terminated and required the parties to submit
their position papers, supporting documents and affidavits.[25]
The IBP's Report and Recommendation
On March 18, 2009, Investigating Commissioner Pedro A. Magpayo, Jr. (Commissioner Magpayo) issued a Report and
Recommendation,[26] observing that respondent failed to safeguard complainant's legitimate interest and abandoned her in the grave
coercion case. Commissioner Magpayo pointed out that Bantegui is not legally obliged to honor complainant as subrogee of David
because complainant has yet to establish her kinship with David and, consequently, her interest in Consulting Edge.[27] Hence, the
actions taken by respondent, such as the placing of paper seal on the door of the company premises and the changing of its lock, were
all uncalled for. Worse, when faced with the counter legal measures to his actions, he abandoned his client's cause.[28] Commissioner
Magpayo found that respondent's acts evinced a lack of adequate preparation and mastery of the applicable laws on his part, in
violation of Canon 5[29] of the Code of Professional Responsibity (Code), warranting his suspension from the practice of law for a period
of six months.[30]
The IBP Board of Governors adopted and approved the aforementioned Report and Recommendation in Resolution No. XX-2011-261
dated November 19, 2011 (November 19, 2011 Resolution), finding the same to be fully supported by the evidence on record and the
applicable laws and rules.[31]
In a Resolution[32] dated October 8, 2012, the Court noted the Notice of the IBP's November 19, 2011 Resolution, and referred the case
to the Office of the Bar Confidant (OBC) for evaluation, report and recommendation.[33]
The OBC's Report and Recommendation

On February 11, 2013, the OBC submitted a Report and Recommendation[34] dated February 6, 2013, concluding that respondent
grossly neglected his duties to his client and failed to safeguard the latter's rights and interests in wanton disregard of his duties as a
lawyer.[35] It deemed that the six-month suspension from the practice of law as suggested by the IBP was an insufficient penalty and, in
lieu thereof, recommended that respondent be suspended for three years.[36] Likewise, it ordered respondent to return the P150,000.00
he received from complainant as acceptance fee.[37]
The Court's Ruling
After a careful perusal of the records, the Court concurs with and adopts the findings and conclusions of the OBC.
The Court has repeatedly emphasized that the relationship between a lawyer and his client is one imbued with utmost trust and
confidence. In this regard, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. For his part, the lawyer is expected to maintain at all times a high standard of legal
proficiency, and to devote his full attention, skill, and competence to the case, regardless of its importance and whether he accepts it for
a fee or for free.[38] To this end, he is enjoined to employ only fair and honest means to attain lawful objectives.[39] These principles are
embodied in Canon 17, Rule 18.03 of Canon 18, and Rule 19.01 of Canon 19 of the Code which respectively state:
CANON 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.
CANON 18 A lawyer shall serve his client with competence and diligence.
xxxx
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.
xxxx
CANON 19 A lawyer shall represent his client with zeal within the bounds of the law.
Rule 19.01 A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present,
participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case or proceeding.
xxxx
Keeping with the foregoing rules, the Court finds that respondent failed to exercise the required diligence in handling complainant's
cause since he: first, failed to represent her competently and diligently by acting and proffering professional advice beyond the proper
bounds of law; and, second, abandoned his client's cause while the grave coercion case against them was pending.
Anent the first infraction, it bears emphasis that complainant's right over the properties of her deceased husband, David, has yet to be
sufficiently established. As such, the high-handed action taken by respondent to enforce complainant's claim of ownership over the
latter's interest in Consulting Edge i.e., causing the change of the office door lock which thereby prevented the free ingress and egress
of the employees of the said company was highly improper. Verily, a person cannot take the law into his own hands, regardless of the
merits of his theory. In the same light, respondent's act of advising complainant to go into hiding in order to evade arrest in the criminal
case can hardly be maintained as proper legal advice since the same constitutes transgression of the ordinary processes of law. By
virtue of the foregoing, respondent clearly violated his duty to his client to use peaceful and lawful methods in seeking justice,[40] in
violation of Rule 19.01, Canon 19 of the Code as above-quoted. To note further, since such courses of action were not only improper
but also erroneous, respondent equally failed to serve his client with competence and diligence in violation of Canon 18 of the Code. In
the same regard, he also remained unmindful of his client's trust in him in particular, her trust that respondent would only provide her
with the proper legal advice in pursuing her interests thereby violating Canon 17 of the Code.
With respect to the second infraction, records definitively bear out that respondent completely abandoned complainant during the
pendency of the grave coercion case against them; this notwithstanding petitioner's efforts to reach him as well as his purported receipt
of the P150,000.00 acceptance fee. It is hornbook principle that a lawyer's duty of competence and diligence includes not merely
reviewing the cases entrusted to his care or giving sound legal advice, but also consists of properly representing the client before any
court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, prosecuting the handled
cases with reasonable dispatch, and urging their termination even without prodding from the client or the court.[41] Hence, considering
respondent's gross and inexcusable neglect by leaving his client totally unrepresented in a criminal case, it cannot be doubted that he
violated Canon 17, Rule 18.03 of Canon 18, and Rule 19.01 of Canon 19 of the Code.
In addition, it must be pointed out that respondent failed to file his answer to the complaint despite due notice. This demonstrates not
only his lack of responsibility but also his lack of interest in clearing his name, which, as case law directs, is constitutive of an implied
admission of the charges leveled against him.[42] In fine, respondent should be held administratively liable for his infractions as herein
discussed. That said, the Court now proceeds to determine the appropriate penalty to be imposed against respondent.
Several cases show that lawyers who have been held liable for gross negligence for infractions similar to those committed of
respondent were suspended from the practice of law for a period of two years. In Jinon v. Jiz,[43] a lawyer who neglected his client's
case, misappropriated the client's funds and disobeyed the IBP's directives to submit his pleadings and attend the hearings was
suspended from the practice of law for two years. In Small v. Banares,[44] the Court meted a similar penalty against a lawyer who failed
to render any legal service even after receiving money from the complainant; to return the money and documents he received despite
demand; to update his client on the status of her case and respond to her requests for information; and to file an answer and attend the
mandatory conference before the IBP. Also, in Villanueva v. Gonzales,[45] a lawyer who neglected complainant's cause; refused to
immediately account for his client's money and to return the documents received; failed to update his client on the status of her case
and to respond to her requests for information; and failed to submit his answer and to attend the mandatory conference before the IBP
was suspended from the practice of law for two years. However, the Court observes that, in the present case, complainant was
subjected to a graver injury as she was prosecuted for the crime of grave coercion largely due to the improper and erroneous advice of
respondent. Were it not for respondent's imprudent counseling, not to mention his act of abandoning his client during the proceedings,
complainant would not have unduly suffered the harbors of a criminal prosecution. Thus, considering the superior degree of the
prejudice caused to complainant, the Court finds it apt to impose against respondent a higher penalty of suspension from the practice of
law for a period of three years as recommended by the OBC.
In the same light, the Court sustains the OBC's recommendation for the return of the P150,000.00 acceptance fee received by
respondent from complainant since the same is intrinsically linked to his professional engagement. While the Court has previously held
that disciplinary proceedings should only revolve around the determination of the respondent-lawyers's administrative and not his civil
liability,[46] it must be clarified that this rule remains applicable only to claimed liabilities which are purely civil in nature - for instance,
when the claim involves moneys received by the lawyer from his client in a transaction separate and distinct and not instrinsically linked
to his professional engagement (such as the acceptance fee in this case). Hence, considering further that the fact of respondent's
receipt of the P150,000.00 acceptance fee from complainant remains undisputed,[47] the Court finds the return of the said fee, as
recommended by the OBC, to be in order:
WHEREFORE, respondent Atty. Rustico B. Gagate is found guilty Gfviolating Canon 17, Rule 18.03 of Canon 18, and Rule 19.01 of
Canon 19 of the Code of Professional Responsibility. Accordingly, he is hereby SUSPENDED from the practice of law for a period of
three (3) years, effective upon the finality of this Decision, with a stem warning that a repetition of the same or similar acts will be dealt
with more severely.
Further, respondent is ORDERED to return to complainant Maria Cristina Zabaljauregui Pitcher the P150,000.00 acceptance fee he
received from the latter within ninety (90) days from the finality of this Decision. Failure to comply with the foregoing directive will
warrant the imposition of a more severe penalty.
Let a copy of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court
Administrator for circulation to all the courts.
SO ORDERED.
FIRST DIVISION
MA. LUISA HADJULA, A.C. No. 6711
Complainant, Present:
PUNO, C.J., Chairperson,

*
SANDOVAL-GUTIERREZ,
CORONA,
- versus - AZCUNA, and
GARCIA, JJ.
Promulgated:
ATTY. ROCELES F. MADIANDA, July 3, 2007
Respondent.
x------------------------------------------------------------------------------------x
DECISION
GARCIA, J.:
Under consideration is Resolution No. XVI-2004-472 of the Board of Governors, Integrated Bar of the Philippines (IBP), relative to the
complaint for disbarment filed by herein complainant Ma. Luisa Hadjula against respondent Atty. Roceles F. Madianda.
The case started when, in an AFFIDAVIT-COMPLAINT[1] bearing date September 7, 2002 and filed with the IBP Commission on Bar
Discipline, complainant charged Atty. Roceles F. Madianda with violation of Article 209 [2] of the Revised Penal Code and Canon Nos.
15.02 and 21.02 of the Code of Professional Responsibility.
In said affidavit-complaint, complainant alleged that she and respondent used to be friends as they both worked at the Bureau of Fire
Protection (BFP) whereat respondent was the Chief Legal Officer while she was the Chief Nurse of the Medical, Dental and Nursing
Services. Complainant claimed that, sometime in 1998, she approached respondent for some legal advice. Complainant further alleged
that, in the course of their conversation which was supposed to be kept confidential, she disclosed personal secrets and produced
copies of a marriage contract, a birth certificate and a baptismal certificate, only to be informed later by the respondent that she
(respondent) would refer the matter to a lawyer friend. It was malicious, so complainant states, of respondent to have refused handling
her case only after she had already heard her secrets.
Continuing, complainant averred that her friendship with respondent soured after her filing, in the later part of 2000, of criminal and
disciplinary actions against the latter. What, per complainants account, precipitated the filing was when respondent, then a member of
the BFP promotion board, demanded a cellular phone in exchange for the complainants promotion.
According to complainant, respondent, in retaliation to the filing of the aforesaid actions, filed a COUNTER COMPLAINT [3] with the
Ombudsman charging her (complainant) with violation of Section 3(a) of Republic Act No. 3019,[4] falsification of public documents and
immorality, the last two charges being based on the disclosures complainant earlier made to respondent. And also on the basis of the
same disclosures, complainant further stated, a disciplinary case was also instituted against her before the Professional Regulation
Commission.
Complainant seeks the suspension and/or disbarment of respondent for the latters act of disclosing personal secrets and confidential
information she revealed in the course of seeking respondents legal advice.
In an order dated October 2, 2002, the IBP Commission on Bar Discipline required respondent to file her answer to the complaint.
In her answer, styled as COUNTER-AFFIDAVIT, [5] respondent denied giving legal advice to the complainant and dismissed any
suggestion about the existence of a lawyer-client relationship between them. Respondent also stated the observation that the supposed
confidential data and sensitive documents adverted to are in fact matters of common knowledge in the BFP. The relevant portions of the
answer read:
5. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-
COMPLAINT for reason that she never WAS MY CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP
that ever existed ever since and that never obtained any legal advice from me regarding her PERSONAL
PROBLEMS or PERSONAL SECRETS. She likewise never delivered to me legal documents much more told me
some confidential information or secrets. That is because I never entertain LEGAL QUERIES or CONSULTATION
regarding PERSONAL MATTERS since I know as a LAWYER of the Bureau of Fire Protection that I am not allowed
to privately practice law and it might also result to CONFLICT OF INTEREST. As a matter of fact, whenever there will
be PERSONAL MATTERS referred to me, I just referred them to private law practitioners and never entertain the
same, NOR listen to their stories or examine or accept any document.
9. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-
COMPLAINT, the truth of the matter is that her ILLICIT RELATIONSHIP and her illegal and unlawful activities are
known in the Bureau of Fire Protection since she also filed CHILD SUPPORT case against her lover where she has a
child .
Moreover, the alleged DOCUMENTS she purportedly have shown to me sometime in 1998, are all part of
public records .
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case just to get even with me or to force
me to settle and withdraw the CASES I FILED AGAINST HER since she knows that she will certainly be DISMISSED
FROM SERVICE, REMOVED FROM THE PRC ROLL and CRIMINALLY CONVICTED of her ILLICIT, IMMORAL,
ILLEGAL and UNLAWFUL ACTS.
On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar Discipline came out with a Report and
Recommendation, stating that the information related by complainant to the respondent is protected under the attorney-client privilege
communication. Prescinding from this postulate, the Investigating Commissioner found the respondent to have violated legal ethics
when she[revealed] information given to her during a legal consultation, and accordingly recommended that respondent be
reprimanded therefor, thus:
WHEREFORE, premises considered, it is respectfully recommended that respondent Atty. Roceles Madianda be
reprimanded for revealing the secrets of the complainant.
On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472 reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution
as Annex A; and , finding the recommendation fully supported by the evidence on record and the applicable laws and
rules, and considering the actuation of revealing information given to respondent during a legal consultation, Atty.
Roceles Madianda is hereby REPRIMANDED.
We AGREE with the recommendation and the premises holding it together.
As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what she considered
personal secrets and sensitive documents for the purpose of obtaining legal advice and assistance. The moment complainant
approached the then receptive respondent to seek legal advice, a veritable lawyer-client relationship evolved between the two. Such
relationship imposes upon the lawyer certain restrictions circumscribed by the ethics of the profession. Among the burdens of the
relationship is that which enjoins the lawyer, respondent in this instance, to keep inviolate confidential information acquired or revealed
during legal consultations. The fact that one is, at the end of the day, not inclined to handle the clients case is hardly of consequence.
Of little moment, too, is the fact that no formal professional engagement follows the consultation. Nor will it make any difference that no
contract whatsoever was executed by the parties to memorialize the relationship. As we said in Burbe v. Magulta,[6] -
A lawyer-client relationship was established from the very first moment complainant asked respondent for
legal advise regarding the formers business. To constitute professional employment, it is not essential that the client
employed the attorney professionally on any previous occasion.
It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney
consulted did not afterward handle the case for which his service had been sought.
It a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining
professional advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the
professional employments is established.
Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the
lawyer and the complainant or the non-payment of the formers fees.
Dean Wigmore lists the essential factors to establish the existence of the attorney-client privilege communication, viz:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently
protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived.[7]
With the view we take of this case, respondent indeed breached his duty of preserving the confidence of a client. As found by the IBP
Investigating Commissioner, the documents shown and the information revealed in confidence to the respondent in the course of the
legal consultation in question, were used as bases in the criminal and administrative complaints lodged against the complainant.
The purpose of the rule of confidentiality is actually to protect the client from possible breach of confidence as a result of a consultation
with a lawyer.
The seriousness of the respondents offense notwithstanding, the Court feels that there is room for compassion, absent compelling
evidence that the respondent acted with ill-will. Without meaning to condone the error of respondents ways, what at bottom is before
the Court is two former friends becoming bitter enemies and filing charges and counter-charges against each other using whatever
convenient tools and data were readily available. Unfortunately, the personal information respondent gathered from her conversation
with complainant became handy in her quest to even the score. At the end of the day, it appears clear to us that respondent was
actuated by the urge to retaliate without perhaps realizing that, in the process of giving vent to a negative sentiment, she was violating
the rule on confidentiality.
IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is hereby REPRIMANDED and admonished to be circumspect in her
handling of information acquired as a result of a lawyer-client relationship. She is also STERNLY WARNED against a repetition of the
same or similar act complained of.
SO ORDERED.
RE: VERIFIED COMPLAINT OF TOMAS S. MERDEGIA AGAINST HON. VICENTE S.E. VELOSO, ASSOCIATE JUSTICE OF THE
COURT OF APPEALS, RELATIVE TO CA G.R. SP No. 119461.
[A.C. No. 10300]
RE: RESOLUTION DATED OCTOBER 8, 2013 IN OCA IPI No. 12–205–CA–J AGAINST ATTY. HOMOBONO ADAZA II.
RESOLUTION
BRION, J.:
On October 8, 2013, we issued a Resolution1 dismissing the administrative complaint of Tomas S. Merdegia against Court of Appeals
Associate Justice Vicente S.E. Veloso. In this same Resolution, we also directed Atty. Homobono Adaza II, Merdegia’s counsel, to show
cause why he should not be cited for contempt.
After considering Atty. Adaza’s explanation,2 we find his account insufficient, and find him guilty of indirect contempt.
According to Atty. Adaza, he should not be punished for indirect contempt as he was merely performing his duty as Merdegia’s counsel
when he assisted him in preparing the administrative complaint against Justice Veloso. Atty. Adaza asserted that both he and his client
observed Justice Veloso’s partiality during the oral arguments, but instead of immediately filing an administrative complaint against him,
he counseled Merdegia to first file a Motion to Inhibit Justice Veloso from the case. However, upon finding that Justice Veloso refused to
inhibit himself, Merdegia repeated his request to file an administrative complaint against Justice Veloso, to which Atty. Adaza acceded.
Thus, Atty. Adaza pleaded that he should not be faulted for assisting his client, especially when he also believes in the merits of his
client’s case.
Atty. Adaza’s explanation, read together with the totality of the facts of the case, fails to convince us of his innocence from the contempt
charge.
As Atty. Adaza himself admitted, he prepared the administrative complaint after Justice Veloso refused to inhibit himself from a case he
was handling. The complaint and the motion for inhibition were both based on the same main cause: the alleged partiality of Justice
Veloso during the oral arguments of Merdegia’s case. The resolution dismissing the motion for inhibition should have disposed
of the issue of Justice Veloso’s bias. While we do not discount the fact that it was Justice Veloso who penned the resolution denying
the motion for inhibition, we note that he was allowed to do this under the 2009 Internal Rules of the Court of
Appeals.3Had Merdegia and Atty. Adaza doubted the legality of this resolution, the proper remedy would have been to file a
petition for certiorari assailing the order denying the motion for inhibition. The settled rule is that administrative complaints
against justices cannot and should not substitute for appeal and other judicial remedies against an assailed decision or ruling.4
While a lawyer has a duty to represent his client with zeal, he must do so within the bounds provided by law.5 He is also duty–bound to
impress upon his client the propriety of the legal action the latter wants to undertake, and to encourage compliance with the law and
legal processes.6
A reading of Merdegia’s administrative complaint7 shows an apparent failure to understand that cases are not always decided in one’s
favor, and that an allegation of bias must stem from an extrajudicial source other than those attendant to the merits and the
developments in the case.8 In this light, we cannot but attribute to Atty. Adaza the failure to impress upon his client the features of our
adversarial system, the substance of the law on ethics and respect for the judicial system, and his own failure to heed what his duties
as a professional and as an officer of the Court demand of him in acting for his client before our courts.
To be sure, deciding administrative cases against erring judges is not an easy task. We have to strike a balance between the need for
accountability and integrity in the Judiciary, on the one hand, with the need to protect the independence and efficiency of the Judiciary
from vindictive and enterprising litigants, on the other. Courts should not be made to bow down to the wiles of litigants who bully judges
into inhibiting from cases or deciding cases in their favor, but neither should we shut our doors from litigants brave enough to call out
the corrupt practices of people who decide the outcome of their cases. Indeed, litigants who feel unjustly injured by malicious and
corrupt acts of erring judges and officials should not be punished for filing administrative cases against them; neither should these
litigants be unjustly deterred from doing so by a wrong signal from this Court that they would be made to explain why they should not be
cited for contempt when the complaints they filed prove to be without sufficient cause.
What tipped the balance against Atty. Adaza, in this case, is the totality of the facts of the case that, when read together with the
administrative complaint he prepared, shows that his complaint is merely an attempt to malign the administration of justice. We note
Atty. Adaza’s penchant for filing motions for inhibition throughout the case: first, against Judge Ma. Theresa Dolores C. Gomez
Estoesta of the Regional Trial Court of Manila, who issued an order unfavorable to his client; and second, against all the justices of the
Court of Appeals division hearing his appeal, for alleged bias during the oral arguments on his case. These indicators, taken together
with the baseless administrative complaint against Justice Veloso after he penned an order adverse to Atty. Adaza’s client, disclose that
there was more to the administrative complaint than the report of legitimate grievances against members of the Judiciary.
In Re: Verified Complaint of Engr. Oscar L. Ongjoco, etc.,9 we cited a litigant in indirect contempt of court for his predisposition to
indiscriminately file administrative complaints against members of the Judiciary. We held that this conduct degrades the judicial office,
interferes with the due performance of their work for the Judiciary, and thus constitutes indirect contempt of court. Applying this principle
to the present case, we hold that Atty. Adaza’s acts constitute an improper conduct that tends to degrade the administration of justice,
and is thus punishable for indirect contempt under Section 3(d), Rule 71 of the Rules of Court.
As a final note, Atty. Adaza’s contemptuous conduct may also be subject to disciplinary sanction as a member of the bar.10 If we do not
now proceed at all against Atty. Adaza to discipline him, we are prevented from doing so by our concern for his due process rights. Our
Resolution of October 8, 2013 only asked him to show cause why he should not be cited in contempt, and not why he should not be
administratively penalized. To our mind, imposing a disciplinary sanction against Atty. Adaza through a contempt proceeding violates
the basic tenets of due process as a disciplinary action is independent and separate from a proceeding for contempt. A person charged
of an offense, whether in an administrative or criminal proceeding, must be informed of the nature of the charge against him, and given
ample opportunity to explain his side.11cralawred
While the two proceedings can proceed simultaneously with each other,12 a contempt proceeding cannot substitute for a disciplinary
proceeding for erring lawyers,13 and vice versa. There can be no substitution between the two proceedings, as contempt proceedings
against lawyers, as officers of the Court, are different in nature and purpose from the discipline of lawyers as legal professionals. The
two proceedings spring from two different powers of the Court.
The Court, in exercising its power of contempt, exercises an implied and inherent power granted to courts in general.14 Its existence is
essential to the preservation of order in judicial proceedings; to the enforcement of judgments, orders and mandates of courts; and,
consequently, in the administration of justice;15 thus, it may be instituted against any person guilty of acts that constitute contempt of
court.16Further, jurisprudence describes a contempt proceeding as penal and summary in nature; hence, legal principles applicable to
criminal proceedings also apply to contempt proceedings. A judgment dismissing the charge of contempt, for instance, may no longer
be appealed in the same manner that the prohibition against double jeopardy bars the appeal of an accused’s acquittal.17
In contrast, a disciplinary proceeding against an erring lawyer is sui generis in nature; it is neither purely civil nor purely criminal. Unlike
a criminal prosecution, a disciplinary proceeding is not intended to inflict punishment, but to determine whether a lawyer is still fit to be
allowed the privilege of practicing law. It involves an investigation by the Court of the conduct of its officers, and has, for its primary
objective, public interest.18 Thus, unlike a contempt proceeding, the acquittal of the lawyer from a disciplinary proceeding cannot bar an
interested party from seeking reconsideration of the ruling. Neither does the imposition of a penalty for contempt operate as res
judicata to a subsequent charge for unprofessional conduct.19
Contempt proceedings and disciplinary actions are also governed by different procedures. Contempt of court is governed by the
procedures under Rule 71 of the Rules of Court, whereas disciplinary actions in the practice of law are governed by Rules 138 and 139
thereof.20
IN THESE LIGHTS, the Court finds Atty. Homobomo Adaza II GUILTY OF INDIRECT CONTEMPT for filing a frivolous suit against
Court of Appeals Associate Justice Vicente S.E. Veloso, and hereby sentences him to pay, within the period of fifteen days from the
promulgation of this judgment, a fine of P5,000.00. The respondent is also WARNED that further similar misbehavior on his part may be
a ground for the institution of disciplinary proceedings against him.
SO ORDERED.
FIRST DIVISION
GENEROSO SALIGUMBA, G.R. No. 143365
ERNESTO SALIGUMBA, and
HEIRS OF SPOUSES VALERIA Present:
SALIGUMBA AND ELISEO
SALIGUMBA, SR., PUNO, C.J., Chairperson,
Petitioners, CARPIO,
CORONA,
AZCUNA, and
TINGA,* JJ.
- versus -
MONICA PALANOG, Promulgated:
Respondent. December 4, 2008
x--------------------------------------------------x
DECISION
CARPIO, J.:
The Case
This is a petition for review of the Decision dated 24 May 2000 of the Regional Trial Court, Branch 5, Kalibo, Aklan (RTC-Branch 5) in
Civil Case No. 5288 for Revival of Judgment. The case is an offshoot of the action for Quieting of Title with Damages in Civil Case No.
2570.
The Facts
Monica Palanog, assisted by her husband Avelino Palanog (spouses Palanogs), filed a complaint dated 28 February 1977 for Quieting
of Title with Damages against defendants, spouses Valeria Saligumba and Eliseo Saligumba, Sr. (spouses Saligumbas), before the
Regional Trial Court, Branch 3, Kalibo, Aklan (RTC-Branch 3). The case was docketed as Civil Case No. 2570. In the complaint,
spouses Palanogsalleged that they have been in actual, open, adverse and continuous possession as owners for more than 50 years
of a parcel of land located in Solido, Nabas, Aklan. The spouses Saligumbas allegedly prevented them from entering and residing on
the subject premises and had destroyed the barbed wires enclosing the land. Spouses Palanogs prayed that they be declared the true
and rightful owners of the land in question.
When the case was called for pre-trial on 22 September 1977, Atty. Edilberto Miralles (Atty. Miralles), counsel for spouses Saligumbas,
verbally moved for the appointment of a commissioner to delimit the land in question. Rizalino Go, Deputy Sheriff of Aklan, was
appointed commissioner and was directed to submit his report and sketch within 30 days.[1] Present during the delimitation were
spouses Palanogs, spouses Saligumbas, and Ernesto Saligumba, son of spouses Saligumbas.[2]
After submission of the Commissioners Report, spouses Palanogs, upon motion, were granted 10 days to amend their complaint to
conform with the items mentioned in the report.[3]
Thereafter, trial on the merits ensued. At the hearing on 1 June 1984, only the counsel for spouses Palanogs appeared. The trial court
issued an order resetting the hearing to 15 August 1984 and likewise directed spouses Saligumbas to secure the services of another
counsel who should be ready on that date.[4] The order sent to Eliseo Saligumba, Sr. was returned to the court unserved with the
notation PartyDeceased while the order sent to defendant Valeria Saligumba was returned with the notation Party in Manila.[5]
At the hearing on 15 August 1984, spouses Palanogs direct examination was suspended and the continuation of the hearing was set
on 25 October 1984. The trial court stated that Atty. Miralles, who had not withdrawn as counsel for spouses Saligumbas despite his
appointment as Municipal Circuit Trial Court judge, would be held responsible for the case of spouses Saligumbas until he formally
withdrew as counsel. The trial court reminded Atty. Miralles to secure the consent of spouses Saligumbas for his withdrawal.[6] A copy of
this order was sent to Valeria Saligumba but the same was returned unserved with the notation Party in Manila.[7]
The hearing set on 25 October 1984 was reset to 25 January 1985 and the trial court directed that a copy of this order be sent
to Eliseo Saligumba, Jr. at COA, PNB, Manila.[8]
The presentation of evidence for spouses Palanogs resumed on 25 January 1985 despite the motion of Atty. Miralles for postponement
on the ground that his client was sick. The exhibits were admitted and plaintiffs spouses Palanogs rested their case. Reception of
evidence for the defendants spouses Saligumbas was scheduled on 3, 4, and 5 June 1985.[9]
On 3 June 1985, only spouses Palanogs and counsel appeared. Upon motion of the spouses Palanogs, spouses Saligumbas were
deemed to have waived the presentation of their evidence.
On 3 August 1987, after a lapse of more than two years, the trial court considered the case submitted for decision.
On 7 August 1987, RTC-Branch 3 rendered a judgment in Civil Case No. 2570 declaring spouses Palanogs the lawful owners of the
subject land and ordering spouses Saligumbas, their agents, representatives and all persons acting in privity with them to vacate the
premises and restore possession to spouses Palanogs.

The trial court, in a separate Order dated 7 August 1987, directed that a copy of the courts decision be furnished plaintiff
Monica Palanog and defendant Valeria Saligumba.
Thereafter, a motion for the issuance of a writ of execution of the said decision was filed but the trial court, in its Order dated 8 May
1997, ruled that since more than five years had elapsed after the date of its finality, the decision could no longer be executed by mere
motion.
Thus, on 9 May 1997, Monica Palanog (respondent), now a widow, filed a Complaint seeking to revive and enforce the Decision
dated 7 August 1987 in Civil Case No. 2570 which she claimed has not been barred by the statute of limitations.
She impleaded petitioners Generoso Saligumba and Ernesto Saligumba, the heirs and children of the spouses Saligumbas, as
defendants. The case was docketed as Civil Case No. 5288 before the RTC-Branch 5.
Petitioner Generoso Saligumba, for himself and in representation of his brother Ernesto who was out of the country working as a
seaman, engaged the services of the Public Attorneys Office, Kalibo, Aklanwhich filed a motion for time to allow them to file a
responsive pleading. Petitioner Generoso Saligumba filed his Answer[10] alleging that: (1) respondent had no cause of action; (2) the
spouses Saligumbasdied while Civil Case No. 2570 was pending and no order of substitution was issued and hence, the trial was null
and void; and (3) the court did not acquire jurisdiction over the heirs of the spouses Saligumbasand therefore, the judgment was not
binding on them.
Meanwhile, on 19 December 1997, the trial court granted respondents motion to implead additional defendants
namely, Eliseo Saligumba, Jr. and Eduardo Saligumba, who are also the heirs and children of spouses Saligumbas.[11] They were,
however, declared in default on 1 October 1999 for failure to file any responsive pleading.[12]
The Trial Courts Ruling
On 24 May 2000, the RTC-Branch 5 rendered a decision in favor of respondent ordering the revival of judgment in Civil Case No. 2570.
The trial court ruled that the non-substitution of the deceased spouses did not have any legal significance. The land subject of Civil
Case No. 2570 was the exclusive property of defendant Valeria Saligumba who inherited the same from her deceased parents. The
death of her husband, Eliseo Saligumba, Sr., did not change the complexion of the ownership of the property that would require his
substitution. The spouses Saligumbas children, who are the petitioners in this case, had no right to the property while
Valeria Saligumba was still alive. The trial court further found that when defendant Valeria Saligumba died, her lawyer, Atty. Miralles, did
not inform the court of the death of his client. The trial court thus ruled that the non-substitution of the deceased defendant was solely
due to the negligence of counsel. Moreover, petitioner Ernesto Saligumba could not feign ignorance of Civil CaseNo. 2570 as he was
present during the delimitation of the subject land. The trial court likewise held that the decision in Civil Case No. 2570 could not be the
subject of a collateral attack. There must be a direct action for the annulment of the said decision.
Petitioners elevated the matter directly to this Court. Hence, the present petition.
The Courts Ruling
The instant case is an action for revival of judgment and the judgment sought to be revived in this case is the decision in the action for
quieting of title with damages in Civil Case No. 2570. This is not one for annulment of judgment.
An action for revival of judgment is no more than a procedural means of securing the execution of a previous judgment which has
become dormant after the passage of five years without it being executed upon motion of the prevailing party. It is not intended to re-
open any issue affecting the merits of the judgment debtors case nor the propriety or correctness of the first judgment.[13] An action for
revival of judgment is a new and independent action, different and distinct from either the recovery of property case or the reconstitution
case, wherein the cause of action is the decision itself and not the merits of the action upon which the judgment sought to be enforced
is rendered.[14] Revival of judgment is premised on the assumption that the decision to be revived, either by motion or by independent
action, is already final and executory.[15]
The RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570 had been rendered final and executory by the lapse of time
with no motion for reconsideration nor appeal having been filed. While it may be true that the judgment in Civil Case No. 2570 may be
revived and its execution may be had, the issue now before us is whether or not execution of judgment can be issued against
petitioners who claim that they are not bound by the RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570.
Petitioners contend that the RTC-Branch 3 Decision of 7 August 1987 in Civil Case No. 2570 is null and void since there was no proper
substitution of the deceased spouses Saligumbas despite the trial courts knowledge that the deceased spouses Saligumbas were no
longer represented by counsel. They argue that they were deprived of due process and justice was not duly served on them.
Petitioners argue that the trial court even acknowledged the fact of death of spouses Saligumbas but justified the validity of the decision
rendered in that case despite lack of substitution because of the negligence or fault of their counsel. Petitioners contend that the duty of
counsel for the deceased spouses Saligumbas to inform the court of the death of his clients and to furnish the name and address of the
executor, administrator, heir or legal representative of the decedent under Rule 3 presupposes adequate or active representation by
counsel. However, the relation of attorney and client was already terminated by the appointment of counsel on record, Atty. Miralles, as
Municipal Circuit Trial Court judge even before the deaths of the spouses Saligumbas were known. Petitioners invoke the Order of 1
June 1984directing the spouses Saligumbas to secure the services of another lawyer to replace Atty. Miralles. The registered mail
containing that order was returned to the trial court with the notation that EliseoSaligumba, Sr. was deceased. Petitioners thus question
the decision in Civil Case No. 2570 as being void and of no legal effect because their parents were not duly represented by counsel of
record. Petitioners further argue that they have never taken part in the proceedings in Civil Case No. 2570 nor did they voluntarily
appear or participate in the case. It is unfair to bind them in a decision rendered against their deceased parents. Therefore, being a void
judgment, it has no legal nor binding effect on petitioners.
Civil Case No. 2570 is an action for quieting of title with damages which is an action involving real property. It is an action that survives
pursuant to Section 1, Rule 87[16] as the claim is not extinguished by the death of a party. And when a party dies in an action that
survives, Section 17 of Rule 3 of the Revised Rules of Court[17] provides for the procedure, thus:
Section 17. Death of Party. - After a party dies and the claim is not thereby extinguished, the court shall order, upon
proper notice, the legal representative of the deceased to appear and to be substituted for the deceased, within a
period of thirty (30) days, or within such time as may be granted. If the legal representative fails to appear within said
time, the court may order the opposing party to procure the appointment of a legal representative of the deceased
within a time to be specified by the court, and the representative shall immediately appear for and on behalf of the
interest of the deceased. The court charges involved in procuring such appointment, if defrayed by the opposing
party, may be recovered as costs. The heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator and the court may appoint guardian ad litem for the
minor heirs. (Emphasis supplied)
Under the express terms of Section 17, in case of death of a party, and upon proper notice, it is the duty of the court to order the legal
representative or heir of the deceased to appear for the deceased. In the instant case, it is true that the trial court, after receiving
an informal notice of death by the mere notation in the envelopes, failed to order the appearance of the legal representative or heir of
the deceased. There was no court order for deceaseds legal representative or heir to appear, nor did any such legal representative ever
appear in court to be substituted for the deceased. Neither did the respondent ever procure the appointment of such legal
representative, nor did the heirs ever ask to be substituted.
It appears that Eliseo Saligumba, Sr. died on 18 February 1984 while Valeria Saligumba died on 2 February 1985. No motion for the
substitution of the spouses was filed nor an order issued for the substitution of the deceased spouses Saligumbas in Civil Case No.
2570. Atty. Miralles and petitioner Eliseo Saligumba, Jr., despite notices sent to them to appear, never confirmed the death
of Eliseo Saligumba, Sr. and Valeria Saligumba. The record is bereft of any evidence proving the death of the spouses, except the mere
notations in the envelopes enclosing the trial courts orders which were returned unserved.
Section 17 is explicit that the duty of the court to order the legal representative or heir to appear arises only upon proper notice. The
notation Party-Deceased on the unserved notices could not be the proper notice contemplated by the rule. As the trial court could not
be expected to know or take judicial notice of the death of a party without the proper manifestation from counsel, the trial court was well
within its jurisdiction to proceed as it did with the case. Moreover, there is no showing that the courts proceedings were tainted with
irregularities.[18]
Likewise, the plaintiff or his attorney or representative could not be expected to know of the death of the defendant if the attorney for the
deceased defendant did not notify the plaintiff or his attorney of such death as required by the rules.[19] The judge cannot be blamed for
sending copies of the orders and notices to defendants spouses in the absence of proof of death or manifestation to that effect from
counsel.[20]
Section 16, Rule 3 of the Revised Rules of Court likewise expressly provides:
SEC. 16. Duty of attorney upon death, incapacity or incompetency of party. - Whenever a party to a pending case
dies, becomes incapacitated or incompetent, it shall be the duty of his attorney to inform the court promptly of such
death, incapacity or incompetency, and to give the name and residence of his executor, administrator, guardian or
other legal representative.
It is the duty of counsel for the deceased to inform the court of the death of his client. The failure of counsel to comply with his duty
under Section 16 to
inform the court of the death of his client and the non-substitution of such party will not invalidate the proceedings and the judgment
thereon if the action survives the death of such party. The decision rendered shall bind the partys successor-in-interest.[21]
The rules operate on the presumption that the attorney for the deceased party is in a better position than the attorney for the adverse
party to know about the death of his client and to inform the court of the name and address of his legal representative.[22]
Atty. Miralles continued to represent the deceased spouses even after the latters demise. Acting on their behalf, Atty. Miralles even
asked for postponement of the hearings and did not even confirm the death of his clients nor his appointment as Municipal Circuit Trial
Court judge. These clearly negate petitioners contention that Atty. Miralles ceased to be spouses Saligumbas counsel.
Atty. Miralles still remained the counsel of the spouses Saligumbas despite the alleged appointment as judge. Records show that when
Civil Case No. 2570 was called for trial on 25 October 1984, Atty. Miralles appeared and moved for a postponement. The 25 October
1984 Order reads:

ORDER
Upon petition of Judge Miralles who is still the counsel on record of this case and who is held responsible for anything
that will happen in this case, postpone the hearing of this case to JANUARY 25, 1985 AT 8:30 in the morning. x x x[23]
The trial court issued an Order dated 1 June 1984 directing the defendants to secure the services of another counsel. This order was
sent to Eliseo Saligumba, Sr. by registered mail but the same was returned with the notation Party-Deceased while the notice to
Valeria Saligumba was returned with the notation Party in Manila.[24] Eliseo Saligumba, Sr. died on 18 February 1984. When
Atty. Miralles appeared in court on 25 October 1984, he did not affirm nor inform the court of the death of his client. There was no formal
substitution. The trial court issued an order resetting the hearing to 25 January 1985 and directed that a copy of the order be furnished
petitioner Eliseo Saligumba, Jr. at COA, PNB, Manila by registered mail.[25] When the case was called on 25 January 1985,
Atty. Miralles sought for another postponement on the ground that his client was sick and under medical treatment in Manila.[26] Again,
there was no manifestation from counsel about the death of Eliseo Saligumba, Sr. The trial court issued an Order dated 25 January
1985 setting the reception of evidence for the defendants on 3, 4, and 5 June 1985. A copy of this order was sent to Eliseo Saligumba,
Jr. by registered mail. Nonetheless, as the trial court in Civil Case No. 5288 declared, the non-substitution of Eliseo Saligumba, Sr. did
not have any legal significance as the land subject of Civil Case No. 2570 was the exclusive property of Valeria Saligumba who
inherited it from her deceased parents.
This notwithstanding, when Valeria Saligumba died on 2 February 1985, Atty. Miralles again did not inform the trial court of the death of
Valeria Saligumba. There was no formal substitution nor submission of proof of death of Valeria Saligumba. Atty. Miralles was remiss in
his duty under Section 16, Rule 3 of the Revised Rules of Court. The counsel of record is obligated to protect his clients interest until he
is released from his professional relationship with his client. For its part, the court could recognize no other representation on behalf of
the client except such counsel of record until a formal substitution of attorney is effected.[27]
An attorney must make an application to the court to withdraw as counsel, for the relation does not terminate formally until there is a
withdrawal of record; at least, so far as the opposite party is concerned, the relation otherwise continues until the end of the litigation.
[28]
Unless properly relieved, the counsel is responsible for the conduct of the case.[29] 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 require. He
must still appear on the date of hearing for the attorney-client relation does not terminate formally until there is a withdrawal of record.[30]
Petitioners should have questioned immediately the validity of the proceedings absent any formal substitution. Yet, despite the courts
alleged lack of jurisdiction over the persons of petitioners, petitioners never bothered to challenge the same, and in fact allowed the
proceedings to go on until the trial court rendered its decision. There was no motion for reconsideration, appeal or even an action to
annul the judgment in Civil Case No. 2570. Petitioners themselves could not feign ignorance of the case since during the pendency of
Civil Case No. 2570, petitioner Ernesto Saligumba, son of the deceased spouses, was among the persons present during the
delimitation of the land in question before the Commissioner held on 5 November 1977. [31] Petitioner Eliseo Saligumba, Jr. was likewise
furnished a copy of the trial courts orders and notices. It was only the Answer filed by petitioner Generoso Saligumba in Civil Case No.
5288 that confirmed the dates when the spouses Saligumbas died and named the latters children. Consequently, Atty. Miralles was
responsible for the conduct of the case since he had not been properly relieved as counsel of record. His acts bind his clients and the
latters successors-in-interest.
In the present case for revival of judgment, the other petitioners have not shown much interest in the case.
Petitioners Eliseo Saligumba, Jr. and Eduardo Saligumba were declared in default for failure to file their answer. Petitioner
Ernesto Saligumba was out of the country working as a seaman. Only petitioner Generoso Saligumba filed an Answer to the complaint.
The petition filed in this Court was signed only by petitioner Generoso Saligumba as someone signed on behalf of petitioner
Ernesto Saligumba without the latters authority to do so.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 24 May 2000 of the Regional Trial Court, Branch
5, Kalibo, Aklan in Civil Case No. 5288. Costs against petitioners.

SO ORDERED.
G.R. No. 179892-93 January 30, 2009
ATTY. VICTORIANO V. OROCIO, Petitioner,

vs.
EDMUND P. ANGULUAN, LORNA T. DY and NATIONAL POWER CORPORATION, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside the Resolution2 dated 31
October 2006, Decision3 dated 29 January 2007, and Resolution4 dated 27 September 2007, of the Court of Appeals in CA-G.R. SP
Nos. 95786 and 95946.
The facts culled from the records are as follows:
On 26 September 1978, the National Power Corporation Board of Directors (NAPOCOR Board), pursuant to its specific power and duty
to fix the compensation, allowance and benefits of the NAPOCOR employees under Section 6(c) of Republic Act No. 6395, as
amended, passed Resolution No. 78-119 approving the grant of a monthly welfare allowance equivalent to 10% of an employee’s basic
pay to all NAPOCOR employees effective 1 October 1978.5Pursuant thereto, the NAPOCOR Welfare Plan Committee, renamed and
reconstituted later on as the NAPOCOR Welfare Fund Board of Trustees (NAPOCOR-WFBT), issued and promulgated a charter for the
NAPOCOR Welfare Fund which includes the following provisions:
ARTICLE VII
TERMINATION/AMENDMENT OF THE PLAN
"Section 1. Termination/Amendment of the Plan – The Board of Directors may amend, revise, repeal any or all of the provisions herein
contained and/or terminate the Plan, subject to the pertinent provisions of the Trust Agreement.
Section 2. Payment of Member’s share – In the event of termination of the Plan, the balance to the credit of each member and the
General Reserve for Employee Benefits shall be paid to the members in full. The accumulated amount in the General Reserve for
Employee Benefits shall be distributed among the members in the proportion to the amount outstanding to their credit as of the time of
termination.6
The NAPOCOR Board subsequently passed Resolution No. 82-172 fixing a NAPOCOR employee’s contribution to the NAPOCOR
Welfare Fund in a sum equivalent to 5% of his basic pay.7
Almost two decades thereafter, on 8 June 2001, Congress passed Republic Act No. 9136, otherwise known as the Electric Power
Industry Reform Act (EPIRA). EPIRA directed the restructuring of the power industry which includes the reorganization of NAPOCOR.
Following the directive of EPIRA, the NAPOCOR Board passed Resolution No. 2003-43 on 26 March 2003 abolishing the NAPOCOR
Welfare Fund Department and other departments, and dissolving the NAPOCOR Welfare Fund upon the effectivity of EPIRA on 26
June 2001.8 Consequently, some of the employees in the NAPOCOR Welfare Fund Department and in other departments (who were
also members of the NAPOCOR Welfare Fund) resigned, retired or separated from service. Thereafter, the liquidation and dissolution
process for the NAPOCOR Welfare Fund commenced.
On 11 May 2004, the NAPOCOR-WFBT, with authority from the Commission on Audit, approved Resolution No. 2004-001 authorizing
the release of ₱184 million (which represented 40% of the liquid assets of NAPOCOR Welfare Fund in the total amount of ₱462 million
as of 16 April 2004) for distribution to the NAPOCOR Welfare Fund members who resigned, retired, or separated upon the effectivity of
EPIRA on 26 June 2001 (EPIRA separated members).9
Pursuant to Resolution No. 2004-001, herein respondent Edmund P. Anguluan (Anguluan), as Ex-Officio Chairman of NAPOCOR-
WFBT, issued a memorandum on 17 May 2004 to implement the release of ₱184 million only to the EPIRA separated members to the
exclusion of the NAPOCOR employees (who were also members of the NAPOCOR Welfare Fund) who have resigned, retired, or
separated prior to the effectivity of EPIRA (non-EPIRA separated members).10
This prompted Mrs. Perla A. Segovia (Segovia), former Vice-President of Human Resources and Administration and former Ex-
Officio Chairman of the NAPOCOR-WFBT, in behalf of the 559 non-EPIRA separated members and in her own personal capacity, to
write a letter to Mr. Rogelio M. Murga, then NAPOCOR President, demanding their equal shares in the remaining assets of the
NAPOCOR Welfare Fund and access to information and records thereof.11
On 13 July 2004, there being no action or response on her letter, Segovia, together with Mrs. Emma C. Baysic (Baysic), former
President of the NAPOCOR Employees Association and former member of the NAPOCOR-WFBT, in their personal capacities and on
behalf of the 559 non-EPIRA separated members, filed with the Quezon City Regional Trial Court (RTC), Branch 217, a Petition
for Mandamus, Accounting and Liquidation with a Prayer for the Issuance of Temporary Restraining Order and Injunction against
respondents NAPOCOR, the NAPOCOR Board, Anguluan (as NAPOCOR Vice-President, Human Resources, Administration and
Finance Department) and Lorna T. Dy (as NAPOCOR Senior Department Manager on Finance).12 The Petition was docketed as Civil
Case No. Q04-53121.
Segovia, Baysic and the 559 non-EPIRA separated members were represented in Civil Case No. Q04-53121 by petitioner Atty.
Victoriano V. Orocio under a "Legal Retainer Agreement"13 dated 1 September 2004, pertinent portions of which are reproduced below:
SUBJECT: Petition for Mandamus with Damages Temporary Restraining Order/Injunction, etc. with the Court "NPC RETIREES versus
NPC, NP Board of Directors, et. al. before the RTC Quezon City for the payment/settlement of their claims for NPC Welfare Fund (P462
Million assets and other assets liquid or non-liquid).
Dear Ms. Segovia and Ms. Baysic:
In connection with the above-stated subject, hereunder are our terms and conditions, to wit:
1. No acceptance fee;
2. All costs of litigation ([filing] and docket fees, etc.), miscellaneous and out-of-pocket expenses the prosecution of said action
shall be for the account of the clients;
3. No appearance/meeting fee;
4. Contingency or success fees of fifteen percent (15%) of whatever amounts/value of assets (liquid and/or non-liquid) are
recovered;
5. This Retainer Agreement serves as Legal Authority for the Law Firm to receive and/or collect its contingency/success fee
without further demand.
On 22 February 2006, the parties in the above-mentioned case, duly assisted by their respective counsels, executed a Compromise
Agreement14 whereby they agreed to amicably settle their dispute under the following terms and conditions:
COMPROMISE AGREEMENT
xxxx
WHEREAS, the parties have agreed to settle the instant case amicably.
PREMISES CONSIDERED, the parties herein have agreed as follows:
1. Both the NPC EPIRA separated members (those members of the Welfare Fund affected by the EPIRA law and
ceased to be members of the Welfare Fund anytime from June 26, 2001 [effectivity of the EPIRA LAW] to March 1,
2003 [implementation of the EPIRA law and date of abolition of the Welfare Fund]) and NPC non-EPIRA separated
members (those who ceased to be members of the Fund prior to June 26, 2001) are entitled to "Earnings Differential"
of the NPC Welfare Fund;
2. "Corrected Earnings Differential" refers to a benefit which is a result of re-computation of Member’s Equity
Contributions and Earnings using the correct rates of return vis-à-vis what was used when they were separated.
Period covered by the discrepancy is from 1989 to 2003. Hence, affected are WF members separated anytime within
the period 1989 to 2003;
xxxx
4. The Corrected Earnings Differential of all affected WF separated members shall earn 6% legal interest per annum computed
from the separation of the members from service up to March 31, 2006 for all the non-EPIRA separated members and May 31,
2006 for the EPIRA separated members;
5. As of March 2006, the estimated Corrected Earnings Differential for the non-EPIRA separated members is ₱119.196
Million while for the EPIRA separated members is ₱173.589 Million or a total of ₱292.785 Million, inclusive of the 6%
legal interest;
6. In conformity with the Retainer Agreement dated September 1, 2004 between Mrs. Perla A. Segovia, Mrs. Emma Y.
Baysic and Atty. Victoriano V. Orocio; and Irrevocable Special Power of Attorney dated July 20, 2005 executed by Mrs.
Perla A. Segovia and Mrs. Emma Y. Baysic in favor of Atty. Victoriano V. Orocio, counsel for petitioners, (copies
attached as Annexes "A" and "B" respectively), 15% attorney’s fees shall be deducted from the corresponding
Corrected Earnings Differential of those non-EPIRA separated members who have already executed the
corresponding Special Power of Attorney/Written Authority for the deduction/payment of said attorney’s fees, and
shall be paid to V.V. Orocio and Associates Law Office, represented by Atty. Victoriano V. Orocio, as compensation for
his legal services as counsel for the non-EPIRA separated members subject to deduction of applicable taxes;
xxxx
15. The parties herein shall exert their best effort in order that the terms and conditions of this agreement are implemented and
complied with in the spirit of fairness, transparency and equity;
16. This Agreement is not contrary to law, good customs, public order or public policy and is voluntarily entered into by the
parties of their own free will.15
The parties filed with the RTC the very next day, 23 February 2006, a Joint Motion before the RTC for the approval of their Compromise
Agreement.16 The RTC rendered a Decision on 3 April 2006 granting the parties’ Joint Motion and approving the said Compromise
Agreement.17
On 10 April 2006, petitioner filed with the RTC a Motion for Approval of Charging (Attorney’s) Lien. Petitioner asked the RTC to issue an
order declaring him entitled to collect an amount equivalent to 15% of the monies due the non-EPIRA separated members as his
attorney’s fees in conformity with the Compromise Agreement.18 In an Order dated 15 May 2006, the RTC granted petitioner’s motion
and decreed that he is entitled to collect the amount so demanded.19
On 20 June 2006, petitioner filed with the RTC a Motion for the Issuance of a Writ of Execution of the RTC Order dated 15 May
2006.20 Respondents opposed the motion on the ground that there was no stipulation in the Compromise Agreement to the effect that
petitioner is entitled to collect an amount equivalent to 15% of the monies due the non-EPIRA separated members. Respondents
contended that the amount of ₱119,196,000.00 due the non-EPIRA separated members under the compromise agreement was a mere
estimate and, as such, cannot be validly used by petitioner as basis for his claim of 15% attorney’s fees.21
The RTC issued an Order on 25 July 2006 granting petitioner’s Motion22 and, accordingly, a Writ of Execution of the RTC Order dated
15 May 2006 was issued on 26 July 2006. Pursuant to the said Writ of Execution, RTC Branch Sheriff Reynaldo B. Madoloria (Sheriff
Madoloria) issued a Notice of Garnishment to Ms. Aurora Arenas (Arenas), Assistant Vice-President and Business Manager of the
Philippine National Bank (PNB)-NAPOCOR Extension Office, Diliman, Quezon City, and to Mr. Emmanuel C. Mendoza (Mendoza), Unit
Head of the Landbank of the Philippines-NAPOCOR Extension Office, Diliman, Quezon City.23
Respondents filed a Motion for Reconsideration of the RTC Order dated 25 July 2006.24
On 12 August 2006, Sheriff Madoloria served to Arenas an "Order for Delivery of Money."25
Respondents Anguluan and Dy filed before the Court of Appeals on 22 August 2006 a Petition for Certiorari under Rule 65 of the Rules
of Court, docketed as CA-G.R. SP No. 95786, assailing the RTC Order dated 25 July 2006 and praying that a temporary restraining
order and/or a writ of preliminary injunction be issued enjoining the implementation of the said RTC order.26 Respondent NAPOCOR
filed with the Court of Appeals on the same date another Petition for Certiorari under Rule 65 of the Rules of Court, docketed as CA-
G.R. SP No. 95946, also challenging the RTC Order dated 25 July 2006 and praying that it be set aside and a temporary restraining
order and/or a writ of preliminary injunction be issued prohibiting the RTC from enforcing the said order and the corresponding writ of
execution and notice of garnishment.27 Subsequently, respondent NAPOCOR filed a Motion to Consolidate CA-G.R. SP No. 95946 with
CA-G.R. SP No. 95786 which was granted by the appellate court.28
On 31 October 2006, the Court of Appeals issued a Resolution granting respondents’ application for a TRO and writ of preliminary
injunction. It enjoined the RTC from implementing its Order dated 25 July 2006 and the corresponding writ of execution and notice of
garnishment during the pendency of CA-G.R. SP No. 95946 and No. 95786. Petitioner filed a motion for reconsideration of the said
resolution.29
On 29 January 2007, the Court of Appeals promulgated its Decision annulling and setting aside: (1) the RTC Order dated 25 July 2006;
(2) the corresponding Writ of Execution dated 26 July 2006; (3) the Notice of Garnishment dated 28 July 2006; and (4) Order for
Delivery of Money dated 10 August 2006. It also held that petitioner was entitled only to an amount of ₱1,000,000.00 as attorney’s fees
on the basis of quantum meruit.
The Court of Appeals held that the amount of ₱17,794,572.70 sought to be collected by petitioner as attorney’s fees, equivalent to 15%
of the ₱119,196,000.00 estimated corrected earnings differential for non-EPIRA separated members, was excessive based on the
following reasons: (1) the corrected earnings differential in the amount of ₱119,196,000.00 due the non-EPIRA separated members was
a mere estimate and was hypothetical. Thus, petitioner was unjustified in using said amount as basis for his 15% attorney’s
fees; (2) there was hardly any work by petitioner since (a) the compromise agreement was reached without trial or hearing on the
merits; (b) there was no issue regarding the release and distribution of the NAPOCOR Welfare Fund to the non-EPIRA separated
members as the enactment of EPIRA, not the efforts of petitioner, made such distribution possible; (c) there was no issue on how much
each non-EPIRA separated members would receive because the amount of their respective contribution was duly recorded by the
respondents; (d) respondents have already distributed the corrected earnings differential to some non-EPIRA separated members, and
have given petitioner his corresponding partial attorney’s fees amounting to ₱3,512,007.32; (e) most of the non-EPIRA separated
members have not yet received their share under the compromise agreement but petitioner, who was merely their agent, was already
given partial payment as attorney’s fees; (f) the amount of ₱17,794,572.70 represents "only less than one fourth partial release of the
NAPOCOR Welfare Fund which means that the equivalent of three-fourths more would be demanded [by petitioner] in the
future;" and (3) the money claim of the non-EPIRA separated members was settled through a compromise agreement and not won by
petitioner in a trial on the merits.
The Court of Appeals determined that petitioner was entitled only to an amount of ₱1,000,000.00 as attorney’s fees on the basis
of quantum meruit. However, since petitioner already received ₱3,512,007.32 from respondents as partial payment of his supposed
15% attorney’s fees, it ruled that such amount was more than sufficient and petitioner was not entitled to claim anymore the additional
amount of ₱14,282,565.38. The fallo of the Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the assailed July 25, 2006 Order, the July 26, 2006 Writ of Execution, the July 28, 2006 Notice of
Garnishment, and the August 10, 2006 Order of Delivery of Money are hereby ANNULLED and SET ASIDE, and a new one is
ordered, CAPPING at ₱3,512,007.32, the amount manifested to have already been received from the welfare fund as attorneys fees,
as the maximum amount that may be billed or collected as attorneys fees from the whole welfare fund – which amount is NOTED to
have already exceeded what this court had fixed at ₱1,000,000.00 as the reasonable amount, on quantum meruit, that may be
collected as attorneys’ fees, pursuant to the guidelines codified in Rule 20.01, Canon 20 of the Code of Professional Responsibility.30
Petitioner filed a motion for reconsideration of the aforementioned Decision but this was denied by the Court of Appeals in its Resolution
dated 27 September 2007.31
Hence, petitioner brought the instant petition before us assigning the following errors:
I.
THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS EDMUND P. ANGULUAN, LORNA T. DY AND NATIONAL
POWER CORPORATION (NPC) ARE ENTITLED TO [PRELIMINARY] INJUNCTION AS THEY HAVE MATERIAL AND SUBSTANTIAL
RIGHTS, WHICH ARE CLEAR AND UNMISTAKABLE, i.e. RIGHTS OF BEING CLIENTS TO QUESTION THE REASONABLENESS
OF THE ATTORNEY’S FEES OF A LAWYER. THIS ALLEGED RIGHT IS NON-EXISTENT AND IN FACT FABRICATED
CONSIDERING THAT THE RESPONDENTS ARE NOT THE CLIENTS AT ALL OF PETITIONER, ATTY. VICTORIANO V. OROCIO;
II.
THE COURT OF APPEALS ERRED IN RULING THAT THE FIFTEEN PERCENT (15%) CONTINGENCY/SUCCESS FEE OF
PETITIONER VICTORIANO V. OROCIO IS UNCONSCIONABLE AND UNREASONABLE DESPITE THE UNDISPUTED FACT THAT
THE SAID ATTORNEY’S FEES IS AMONG THE TERMS AND CONDITIONS OF A JUDICIALLY APPROVED COMPROMISE
AGREEMENT AND COURT ORDER APPROVING HIS CHARGING LIEN, WHICH AGREEMENT AND ORDER HAVE ALREADY
BECOME FINAL AND EXECUTORY.32
In his first assigned error, petitioner assails the Resolution dated 31 October 2006 of the Court of Appeals granting respondents’
application for a writ of preliminary injunction.lawphil.net He claims that the Court of Appeals issued a writ of preliminary injunction in
favor of respondents because petitioner allegedly violated respondents’ material and substantial right as petitioner’s clients to pay only
reasonable attorney’s fees. Petitioner asserts that none of the respondents is his client in the present case; that even respondents
themselves have not alleged or claimed that they are his clients; that the amount of attorney’s fees he claimed was chargeable on a
portion of the NAPOCOR Welfare Fund due his clients, the non-EPIRA separated employees; that if anyone would be injured by his
claim of attorney’s fees, it would be his clients, the non-EPIRA separated employees, and not respondents; that none of his clients has
questioned or complained about the amount of attorney’s fees he is claiming; that respondents are not the real parties-in-interest and at
most are merely nominal parties-in-interest; that as mere nominal parties-in-interest, respondents are not entitled to a writ of preliminary
injunction under the Rules of Court; and that the requisites for the proper issuance of a writ of preliminary injunction are lacking in the
instant case.33
In its Resolution dated 31 October 2006, the Court of Appeals granted respondents’ application for a writ of preliminary injunction based
on the following reasons:
This Court finds that [herein respondents] have prima facie established [their] compliance with strict requirements for issuance of a writ
of preliminary injunction in this case. Under the leading case of Valencia vs. Court of Appeals, 352 SCRA 72 (2001), the requisites of
preliminary injunction are as follows: (a) the invasion of the right of [herein respondents] is material and substantial; (b) the right of
[herein respondents] is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious
irreparable damage to [herein respondents].
The right of [herein respondents] alleged to have been invaded is that a client has the right to pay only a reasonable amount
of attorney’s fees and only for services actually rendered – which is clearly and unmistakably available to all clients. What [herein
respondents] are claiming is a material and substantial right. This Court finds that [herein respondents] have prima facie established an
urgent and paramount necessity for the issuance of the writ of preliminary injunction prayed for, to avoid irreparable injury to [herein
respondents]. x x x.
As can be gleaned from the foregoing, the basis of the Court of Appeals in granting the writ was petitioner’s alleged violation or invasion
of respondents’ right, as petitioner’s clients, to pay only a reasonable amount of attorney’s fees to, and only for services actually
rendered by, petitioner.
The Court of Appeals is clearly mistaken.
It should be made clear that petitioner is the counsel for the non-EPIRA separated members in the latter’s quest to claim their shares in
the NAPOCOR Welfare Fund. Petitioner was never hired or employed by respondents as their counsel in the cases at bar.
Respondents themselves do not claim or allege that they are clients of petitioner. In fact, petitioner is representing the non-EPIRA
separated members, the opposing party to the respondents in the present cases.
Further, the amount of attorney’s fees being claimed by petitioner is chargeable to the ₱119,196,000.00 corrected earnings differential
of his clients, the non-EPIRA separated members. Respondents have actually partially distributed such amount to some non-EPIRA
separated members pursuant to the Compromise Agreement. In other words, the non-EPIRA separated members are the lawful
owners/beneficiaries of the amount from which petitioner’s attorney’s fees had been and shall be taken.
Hence, if anyone would be injured by petitioner’s claim for attorney’s fees, it would be his clients, the non-EPIRA separated members,
and not respondents. It appears, however, that none of the non-EPIRA separated members has questioned or complained about
petitioner’s claim for attorney’s fees.
A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party
or a court, agency or a person to refrain from a particular act or acts.34 A writ of preliminary injunction is a provisional remedy, an
adjunct to a main suit, as well as a preservative remedy issued to preserve the status quo of the things subject of the action or the
relations between the parties during the pendency of the suit.35For a writ of preliminary injunction to issue, the applicant is tasked to
establish and convincingly show the following: (1) a right in esse or a clear and unmistakable right to be protected; (2) a violation of that
right; and (3) there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage.36
A clear legal right means one clearly founded on or granted by law or is enforceable as a matter of law.37 The existence of a right
violated is a prerequisite to the granting of a writ of preliminary injunction.38 A writ of preliminary injunction will not issue to protect a right
not in esse and which may never arise.39 It may be issued only if the applicant has clearly shown an actual existing right that should be
protected during the pendency of the principal action.40 In the absence of a clear legal right, or when the applicant’s right or title is
doubtful or disputed, preliminary injunction is not proper.41
It is evident from the foregoing that respondents do not have a clear right or right in esse to pay only a reasonable amount of attorney’s
fees to the petitioner because such right belongs solely to petitioner’s clients, the non-EPIRA separated members. There can be no
violation of a right which does not exist in the first place. Also, there was no necessity for the writ of preliminary injunction since the non-
EPIRA separated members do not claim any damage or injury caused by the execution of the RTC Order dated 15 May 2006. Even
assuming that respondents would probably suffer damages as administrators or custodians of the NAPOCOR Welfare Fund if the writ
of preliminary injunction was not granted, our ruling would still be the same. We have held that the possibility of irreparable damage
without proof of an actual existing right is not a ground for the issuance of a writ of preliminary injunction.42Given these considerations,
we hold that the issuance by the Court of Appeals of a writ of preliminary injunction in favor of respondents in its Resolution, dated 31
October 2006, was improper.lawphil.net
With regard to his second assigned error, petitioner maintained that his claim for attorney’s fees equivalent to 15% of the
₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA separated members was not unreasonable or
unconscionable because such amount was expressly agreed upon in the Compromise Agreement between the non-EPIRA separated
members and respondents. The Compromise Agreement was submitted to the RTC for approval through the joint motion of the non-
EPIRA separated members and respondents, and the RTC had rendered a final and executory decision approving the same. By virtue
of res judicata, the Court of Appeals cannot alter or change the terms of the Compromise Agreement by prohibiting petitioner from
collecting his stipulated amount of attorney’s fees.43
Petitioner also avers that the amount of ₱17,794,572.70, which is equivalent to 15% of the ₱119,196,000.00 estimated corrected
earnings differential due the non-EPIRA separated members from the NAPOCOR Welfare Fund is already the total, not partial, amount
he is claiming as attorney’s fees; that the ₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA separated
members from the NAPOCOR Welfare Fund is not hypothetical, such amount having been actually computed and fixed by respondents
themselves without the participation of petitioner and his clients, the non-EPIRA separated members; that he did a lot of legal work and
utilized his legal skills on discovery procedures to force respondents to enter into the Compromise Agreement with the non-EPIRA
separated members; that the passage of EPIRA merely paved the way for the distribution of the remaining assets of the NAPOCOR
Welfare Fund; that if not for his legal work and skills, the non-EPIRA separated members would not have received their lawful shares in
the remaining assets of the NAPOCOR Welfare Fund; and that his claim for 15% attorney’s fees is supported by jurisprudence.44
An attorney’s fee, in its ordinary concept, refers to the reasonable compensation paid to a lawyer for the legal services he has rendered
to a client.45 The client and his lawyer may enter into a written contract whereby the latter would be paid attorney’s fees only if the suit
or litigation ends favorably to the client. This is called a contingency fee contract. The amount of attorney’s fees in this contract may be
on a percentage basis, and a much higher compensation is allowed in consideration of the risk that the lawyer may get nothing if the
suit fails.46 In the case at bar, the non-EPIRA separated members and petitioner voluntarily entered into a contingency fee contract
whereby petitioner did not receive any acceptance fee or appearance/meeting fee. The non-EPIRA separated members expressly
agreed to pay petitioner "contingency or success fees of fifteen percent (15%) of whatever amount/value of assets (liquid and/or non-
liquid)" recovered; and authorized petitioner’s law firm "to receive and/or collect its contingency/success fee without further demand."
Contingent fee contracts are permitted in this jurisdiction because they redound to the benefit of the poor client and the lawyer
"especially in cases where the client has meritorious cause of action, but no means with which to pay for legal services unless he can,
with the sanction of law, make a contract for a contingent fee to be paid out of the proceeds of litigation. Oftentimes, the contingent fee
arrangement is the only means by which the poor clients can have their rights vindicated and upheld." Further, such contracts are
sanctioned by Canon 13 of the Canons of Professional Ethics.47
However, in cases where contingent fees are sanctioned by law, the same should be reasonable under all the circumstances of the
case, and should always be subject to the supervision of a court, as to its reasonableness, such that under Canon 20 of the Code of
Professional Responsibility, a lawyer is tasked to charge only fair and reasonable fees.48
A stipulation on a lawyer’s compensation in a written contract for professional services ordinarily controls the amount of fees that the
contracting lawyer may be allowed, unless the court finds such stipulated amount to be unreasonable or unconscionable. If the
stipulated amount for attorney’s fees is excessive, the contract may be disregarded even if the client expressed their conformity
thereto.49 Attorney’s fees are unconscionable if they affront one’s sense of justice, decency or reasonableness, or if they are so
disproportionate to the value of the services rendered. In such a case, courts are empowered to reduce the attorney’s fee or fix a
reasonable amount thereof taking into consideration the surrounding circumstances and the established parameters.50
The principle of quantum meruit (as much as he deserves) may be a basis for determining the reasonable amount of attorney’s
fees. Quantum meruit is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain
benefit without paying for it. It is applicable even if there was a formal written contract for attorney’s fees as long as the agreed fee was
found by the court to be unconscionable. In fixing a reasonable compensation for the services rendered by a lawyer on the basis
of quantum meruit, factors such as the time spent, and extent of services rendered; novelty and difficulty of the questions involved;
importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proferred
case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of
compensation; character of employment; and professional standing of the lawyer, may be considered.51
It appears that the non-EPIRA separated members chose petitioner as their counsel because the latter, as former member of the
NAPOCOR-WFBT for two terms or four years, is familiar and knowledgeable on the operation of the NAPOCOR Welfare Fund.52 Yet,
according to the contingency fee contract agreement between petitioner and the non-EPIRA separated members, petitioner received no
acceptance fee and appearance/meeting fee when he took on the non-EPIRA separated members’ case. Petitioner’s attorney’s fees
were absolutely dependent on the success of non-EPIRA separated members’ claim on the NAPOCOR Welfare Fund. Despite these
circumstances, petitioner worked diligently in advocating the claims of the non-EPIRA separated members against respondents as
shown by the following: (1) petitioner took pains in verifying the identity and claim of each of the 559 non-EPIRA separated members on
the NAPOCOR Welfare Fund; (2) petitioner prepared and filed a well-researched and well-argued petition with the RTC for the claims of
the non-EPIRA separated members;53 (3) he prepared and presented several witnesses and numerous pertinent documents before the
RTC in support of their application for the issuance of a temporary restraining order and/or writ of preliminary injunction against
respondents’ plan to exclude the non-EPIRA separated members from receiving their shares in the NAPOCOR Welfare Fund; (4) he
participated, as non-EPIRA separated members’ counsel, in the conduct of several hearings regarding the said application for the
issuance of temporary restraining order and/or writ of preliminary injunction;54 (5) he obtained a temporary restraining order and a writ of
preliminary injunction from the RTC which enjoined/prohibited respondents from excluding the non-EPIRA separated members from
their shares in the NAPOCOR Welfare Fund;55 (6) he held numerous conferences with the non-EPIRA separated members wherein he
apprised the latter of the status of their claims and his legal strategies pertinent thereto;56 and (7) he exerted utmost efforts which
eventually led to the execution of the Compromise Agreement between the non-EPIRA separated members and respondents.
By reason of petitioner’s dedication and persistence as can be gleaned above, respondents finally agreed to settle amicably with the
non-EPIRA separated members as regards the latter’s claim for shares in the NAPOCOR Welfare Fund by virtue of the Compromise
Agreement.
Undoubtedly, were it not for petitioner’s vigilance and zeal, respondents would not have executed the Compromise Agreement with the
non-EPIRA separated members. Hence, it is fair to conclude that petitioner was entitled to a reasonably high compensation.
However, petitioner’s attorney’s fees in the amount of ₱17,794,572.70 or equivalent to 15% of the ₱ 119,196,000.00 corrected earnings
differential of the non-EPIRA separated members should be equitably reduced.
In NPC Drivers and Mechanics Association (NPC DAMA) v. The National Power Corporation (NPC),57 we awarded separation pay in
lieu of reinstatement plus backwages to several NPC employees because they were illegally dismissed by the NPC. The NPC
employees were represented by a certain Atty. Cornelio P. Aldon (Atty. Aldon) and Atty. Victoriano V. Orocio, (the petitioner in the instant
cases) under a legal retainer agreement which provides: (1) no acceptance fee; (2) miscellaneous/out of pocket expenses in the
amount of ₱25,000.00; and (3) twenty-five percent (25%) of whatever amounts/monies are recovered in favor of said NPC personnel
contingent on the success of the case. Atty. Aldon and Atty. Orocio filed a Motion for Approval of Charging (Attorney’s) Lien pursuant to
the legal retainer agreement. Although we granted the said motion, we reduced the amount of attorney’s fees which was chargeable on
the monies recoverable by the NPC employees from 25% to 10% because:
While we duly recognize the right of Atty. Aldon and Atty. Orocio to a charging lien on the amounts recoverable by petitioners pursuant
to our 26 September 2006 Decision, nevertheless, we deem it proper to reduce the same. Under Section 24, Rule 138 of the Rules of
Court, a written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or
unreasonable. The amounts which petitioners may recover as the logical and necessary consequence of our Decision of 26 September
2006, i.e., backwages and separation pay (in lieu of reinstatement), are essentially the same awards which we grant to illegally
dismissed employees in the private sector. In such cases, our Labor Code explicitly limits attorney’s fees to a maximum of 10% of the
recovered amount. Considering by analogy the said limit on attorney’s fees in this case of illegal dismissal of petitioners by respondent
NPC, a government-owned and controlled corporation; plus the facts that petitioners have suffered deprivation of their means of
livelihood for the last five years; and the fact that this case was originally filed before us, without any judicial or administrative
proceedings below; as well as the fundamental ethical principle that the practice of law is a profession and not a commercial enterprise,
we approve in favor of Atty. Aldon and Atty. Orocio a charging lien of 10% (instead of 25%) on the amounts recoverable by petitioners
from NPC pursuant to our Decision dated 26 September 2006.
The abovementioned case may be reasonably applied by analogy in the instant case since they have substantially similar
circumstances. In the case before us, although the non-EPIRA separated members were not illegally dismissed, they were,
nevertheless, separated from work by reason of EPIRA. In addition, the non-EPIRA separated members had a legal retainer
agreement/contingency fee contract with petitioner as their counsel.
It should also be emphasized that the practice of law is a profession not a moneymaking venture. A lawyer is not merely the defender of
his client’s cause and a trustee of his client’s cause of action and assets; he is also, and first and foremost, an officer of the court and
participates in the fundamental function of administering justice in society. It follows that a lawyer’s compensation for professional
services rendered is subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain
reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which
he belongs. Upon taking his attorney’s oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate
his right to charge professional fees.58
Thus, taking into account the foregoing circumstances and recognized principles, the 15% attorney’s fees of petitioner should
be reduced to 10%. As such, petitioner is entitled to collect only, as attorney’s fees, an amount equivalent to 10% of
the ₱119,196,000.00 or ₱11,919,600.00.
We note, however, that the compromise agreement was partially implemented in the first week of April 2006 with the payment of
₱23,416,000.00 to some non-EPIRA separated members.59 Petitioner admitted having already received an amount of ₱3,512,007.32 as
his attorney’s fees on the said partial payment of ₱23,416,000.00.60 Accordingly, the amount of ₱3,512,007.32 received by petitioner as
attorney’s fees should be deducted from the fixed 10% attorney’s fees or the amount of ₱11,919,600.00. Per computation, petitioner is
entitled to recover the amount of ₱8,407,592.68 as attorney’s fees.
WHEREFORE, premises considered, the Resolution of the Court of Appeals dated 31 October 2006 in CA-G.R. SP Nos. 95786 and
95946 granting the issuance of a writ of preliminary injunction is hereby ANNULLED and SET ASIDE. The Decision and Resolution,
dated 29 January 2007 and 27 September 2007, respectively, of the Court of Appeals in CA-G.R. SP Nos. 95786 and 95946 are
hereby AFFIRMED with the MODIFICATION that petitioner is entitled to recover attorney’s fees in the amount of ₱8,407,592.68 on the
corrected earnings differential of the non-EPIRA separated members. No costs.
SO ORDERED.
Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
A.C. No. 9091 December 11, 2013
CONCHITA A. BALTAZAR, ROLANDO SAN PEDRO, ALICIA EULALIO-RAMOS, SOLEDAD A. FAJARDO AND ENCARNACION A.
FERNANDEZ, Complainants,
vs.
ATTY. JUAN B. BAÑEZ, Respondent.
RESOLUTION
SERENO, CJ.:
Complainants are the owners of three parcels of land located in Dinalupihan, Bataan.1 n 4 September 2002, they entered into an
agreement, they stood to be paid ₱35,000.000 for all the lots that would be sold in the subdivision.2For that purpose, they executed a
Pecial Power of Attorney authorizing Fevidal to enter into all agreements concerning the parcels of land and to sign those agreements
on their behalf.3
Fevidal did not update complainants about the status of the subdivision project and failed to accout for the titles to the subdivided
land.4 Complainants also found that he had sold a number of parcels to third parties, but that he did not turn the proceeds over to them.
Neither were complainants invited to the ceremonial opening of the subdivision project.5
Thus, on 23 August 2005, they revoked the Special Power of Attorney they had previously executed in his favor.6
Complainants subsequently agreed to settle with Fevidal for the amount of ₱10,000,000, but the latter again failed to pay them.7
Complainants engaged the professional services of respondent for the purpose of assisting them in the preparation of a settlement
agreement.8
Instead of drafting a written settlement, respondent encouraged them to institute actions against Fevidal in order to recover their
properties. Complainants then signed a contract of legal services,9 in which it was agreed that they would not pay acceptance and
appearance fees to respondent, but that the docket fees would instead be shared by the parties. Under the contract, complainants
would pay respondent 50% of whatever would be recovered of the properties. In preparation for the filing of an action against Fevidal,
respondent prepared and notarized an Affidavit of Adverse Claim, seeking to annotate the claim of complainants to at least 195 titles in
the possession of Fevidal.10
A certain Luzviminda Andrade (Andrade) was tasked to submit the Affidavit of Adverse Claim to the Register of Deeds of Bataan.11
The costs for the annotation of the adverse claim were paid by respondent. Unknown to him, the adverse claim was held in abeyance,
because Fevidal got wind of it and convinced complainants to agree to another settlement.12
Meanwhile, on behalf of complainants, and after sending Fevidal a demand letter dated 10 July 2006, respondent filed a complaint for
annulment, cancellation and revalidation of titles, and damages against Fevidal before the Regional Trial Court (RTC) of Bataan on 13
October 2006.13
Complainants found it hard to wait for the outcome of the action. Thus, they terminated the services of respondent on 8 June 2007,
withdrew their complaint against Fevidal on 9 June 2007, and finalized their amicable settlement with him on 5 July 2007.14
Respondent filed a Manifestation and Opposition15 dated 20 July 2007 before the RTC, alleging that the termination of his services and
withdrawal of the complaint had been done with the intent of defrauding counsel. On the same date, he filed a Motion for Recording of
Attorney’s Charging Lien in the Records of the Above-Captioned Cases.16
When the RTC granted the withdrawal of the complaint,17 he filed a Manifestation and Motion for Reconsideration.18
After an exchange of pleadings between respondent and Fevidal, with the latter denying the former’s allegation of
collusion,19 complainants sought the suspension/disbarment of respondent through a Complaint20 filed before the Integrated Bar of the
Philippines (IBP) on 14 November 2007. Complainants alleged that they were uneducated and underprivileged, and could not taste the
fruits of their properties because the disposition thereof was "now clothed with legal problems" brought about by respondent.21
In their complaint, they alleged that respondent had violated Canons 1.01,22 1.03,23 1.04,24 12.02,25 15.05,26 18.04,27and 20.0428 of the
Code of Professional Responsibility. On 14 August 2008, the IBP Commission on Bar Discipline adopted and approved the Report and
Recommendation29 of the investigating commissioner. It suspended respondent from the practice of law for a period of one year for
entering into a champertous agreement.30
On 26 June 2011, it denied his motion for reconsideration. On 26 November 2012, this Court noted the Indorsement of the IBP
Commission on Bar Discipline, as well as respondent’s second motion for reconsideration. We find that respondent did not violate any
of the canons cited by complainants. In fact, we have reason to believe that complainants only filed the instant complaint against him at
the prodding of Fevidal.
Respondent cannot be faulted for advising complainants to file an action against Fevidal to recover their properties, instead of agreeing
to a settlement of ₱10,000,000 – a measly amount compared to that in the original agreement, under which Fevidal undertook to pay
complainants the amount of ₱35,000,000. Lawyers have a sworn duty and responsibility to protect the interest of any prospective client
and pursue the ends of justice.31
Any lawyer worth his salt would advise complainants against the abuses of Fevidal under the circumstances, and we cannot
countenance an administrative complaint against a lawyer only because he performed a duty imposed on him by his oath. The claim of
complainants that they were not informed of the status of the case is more appropriately laid at their door rather than at that of
respondent. He was never informed that they had held in abeyance the filing of the adverse claim. Neither was he informed of the
brewing amicable settlement between complainants and Fevidal. We also find it very hard to believe that while complainants received
various amounts as loans from respondent from August 2006 to June 2007,32 they could not spare even a few minutes to ask about the
status of the case. We shall discuss this more below. As regards the claim that respondent refused to "patch up" with Fevidal despite
the pleas of complainants, we note the latter’s Sinumpaang Salaysay dated 24 September 2007, in which they admitted that they could
not convince Fevidal to meet with respondent to agree to a settlement.33
Finally, complainants apparently refer to the motion of respondent for the recording of his attorney’s charging lien as the "legal problem"
preventing them from enjoying the fruits of their property. Section 26, Rule 138 of the Rules of Court allows an attorney to intervene in a
case to protect his rights concerning the payment of his compensation. According to the discretion of the court, the attorney shall have a
lien upon all judgments for the payment of money rendered in a case in which his services have been retained by the client. We
recently upheld the right of counsel to intervene in proceedings for the recording of their charging lien. In Malvar v. KFPI,34 we granted
counsel’s motion to intervene in the case after petitioner therein terminated his services without justifiable cause. Furthermore, after
finding that petitioner and respondent had colluded in order to deprive counsel of his fees, we ordered the parties to jointly and
severally pay counsel the stipulated contingent fees. Thus, the determination of whether respondent is entitled to the charging lien is
based on the discretion of the court before which the lien is presented. The compensation of lawyers for professional services rendered
is subject to the supervision of the court, not only to guarantee that the fees they charge remain reasonable and commensurate with the
services they have actually rendered, but to maintain the dignity and integrity of the legal profession as well.35
In any case, an attorney is entitled to be paid reasonable compensation for his services.36
That he had pursued its payment in the appropriate venue does not make him liable for disciplinary action.1âwphi1Notwithstanding the
foregoing, respondent is not without fault. Indeed, we find that the contract for legal services he has executed with complainants is in
the nature of a champertous contract – an agreement whereby an attorney undertakes to pay the expenses of the proceedings to
enforce the client’s rights in exchange for some bargain to have a part of the thing in dispute.37
Such contracts are contrary to public policy38 and are thus void or inexistent.39
They are also contrary to Canon 16.04 of the Code of Professional Responsibility, which states that lawyers shall not lend money to a
client, except when in the interest of justice, they have to advance necessary expenses in a legal matter they are handling for the client.
A reading of the contract for legal services40 shows that respondent agreed to pay for at least half of the expense for the docket fees.
He also paid for the whole amount needed for the recording of complainants’ adverse claim. While lawyers may advance the necessary
expenses in a legal matter they are handling in order to safeguard their client’s rights, it is imperative that the advances be subject to
reimbrusement.41 The purpose is to avoid a situation in which a lawyer acquires a personal stake in the clients cause. Regrettably,
nowhere in the contract for legal services is it stated that the expenses of litigation advanced by respondents shall be subject to
reimbursement by complainants.
In addition, respondent gave various amounts as cash advances (bali), gasoline and transportation allowance to them for the duration
of their attorney-client relationship. In fact, he admits that the cash advances were in the nature of personal loans that he extended to
complainants.42
Clearly, respondent lost sight of his responsibility as a lawyer in balancing the clients interests with the ethical standards of his
profession. Considering the surrounding circumstances in this case, an admonition shall suffice to remind him that however dire the
needs of the clients, a lawyer must always avoid any appearance of impropriety to preserve the integrity of the profession.
WHEREFORE, Attorney Juan B. Bañez, Jr. is hereby ADMONISHED for advancing the litigation expenses in a legal matter her handled
for a client without providing for terms of reimbursement and lending money to his client, in violation of Canon 16.04 of the Code of
Professional Responsibility. He us sternly warned that a repetition of the same or similar act would be dealt with more severly.
Let a copy of this Resolution be attached to the personal record of Atty. Bañez, Jr.
SO ORDERED.

PALE CASES March 3

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Adm. Case No.

5530 January 28, 2013

The Report and Recommendation of the IBP

The Court’s Ruling

In Jardin v. Villar, Jr.,13 the Court held:

Republic of the Philippines

A.C. No. 7766 August 5, 2014

JOSE ALLAN TAN, Complainant,

The Issue Before the Court

The Court’s Ruling

ROLANDO VIRAY, Complainant, v. ATTY. EUGENIO T. SANICAS, Respondent.

DEL CASTILLO, J.:

All other claims are hereby denied for lack of merit.

Date Voucher No. Amount Purpose

IBP’s Report and Recommendation

The Court’s Ruling

[ A.C. No. 9532, October 08, 2013 ]

The IBP's Report and Recommendation

The OBC's Report and Recommendation

The Court's Ruling

MA. LUISA HADJULA, A.C. No. 6711

PUNO, C.J., Chairperson,

- versus - AZCUNA, and

ATTY. ROCELES F. MADIANDA, July 3, 2007

15.02 and 21.02 of the Code of Professional Responsibility.

information she revealed in the course of seeking respondents legal advice.

reprimanded therefor, thus:

We AGREE with the recommendation and the premises holding it together.

the rule on confidentiality.

[A.C. No. 10300]

GENEROSO SALIGUMBA, G.R. No. 143365

ERNESTO SALIGUMBA, and

HEIRS OF SPOUSES VALERIA Present:

SALIGUMBA AND ELISEO

SALIGUMBA, SR., PUNO, C.J., Chairperson,

Respondent. December 4, 2008

and rightful owners of the land in question.

conform with the items mentioned in the report.[3]

to Eliseo Saligumba, Jr. at COA, PNB, Manila.[8]

deemed to have waived the presentation of their evidence.

premises and restore possession to spouses Palanogs.

Monica Palanog and defendant Valeria Saligumba.

The Trial Courts Ruling

The Courts Ruling

action, is already final and executory.[15]

judgment, it has no legal nor binding effect on petitioners.

representative, nor did the heirs ever ask to be substituted.

1984 Order reads:

inherited it from her deceased parents.

Ernesto Saligumba without the latters authority to do so.

5, Kalibo, Aklan in Civil Case No. 5288. Costs against petitioners.

G.R. No. 179892-93 January 30, 2009

ATTY. VICTORIANO V. OROCIO, Petitioner,

The facts culled from the records are as follows:

Dear Ms. Segovia and Ms. Baysic:

PREMISES CONSIDERED, the parties herein have agreed as follows:

The Court of Appeals is clearly mistaken.

Republic of the Philippines

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