Legal Ethics Cases 20 - 22

7/30/2019 Legal Ethics Cases 20 - 22

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-40424 June 30, 1980

R. MARINO CORPUS, petitioner,vs.COURT OF APPEALS and JUAN T. DAVID, respondents

MAKASIAR,J.:

This is a petition for review on certiorari of the decision of the Court ofAppeals promulgated on February 14, 1975 in CA-G.R. No. 40583-R, affirmingthe decision of the court of Instance of Manila, Branch V. dated september 4,1967, in Civil Case no. 61802 entitled "Juan T. David,plaintiff, versus R.Mariano Corpus, defendant', for the recovery of attorneys fees forprofessional services rendered by the plaintiff, private respondent herein, to

defendant, petitioner herein.

A

Having been close friends, aside from being membres Civil Liberties Union,petitioner Corpus intimately calls respondent David by his nickname"Juaning" and the latter addresses the former simply as "Marino".

The factual setting of this case is stated in the decision of the lower court,thus:

It appears that in March, 1958, the defendant wascharged administratively by several employee of theCentral Bank Export Department of which the

defendant is the director. The defendant wasrepresented by Atty. Rosauro Alvarez. Pending theinvestigation and effective March 18, 1958, hedefendant was suspended from office. After theinvestigating committee found the administrativecharges to be without merit, and subsequentlyrecommended the immediate reinstatement of thedefendant, the then Governor of Central Bank, MiguelCuaderno, Sr., recommended that the defendant beconsidered resigned as on the ground that he had lostconfidence in him. The Monetary Board, by aresolution of July 20, 1959, declared the defendant asresigned as of the date of suspension.

On August 18, 1959, the defendant, thru Atty. Alvarez,

filed the Court of First Instance of Manila a petition forcertiorari, mandamus and quo warranto withpreliminary mandatory injuction and damages againstMiguel Cuaderno, Sr., the Central Bank and MarioMarcos who was appointed to the position of thedefendant, said case having been docketed as CivilCase No. 41226 and assigned to Branch VII presidedover by Judge Gregorio T. Lantin. On September 7,1959, the respondent filed a motion to dismiss thepetition, alleging among other grounds, the failure ofthe defendant to exhaust, available administrativeremedies (Exh. X). On September 25, 1959, thedefendant, thru Atty. Alvarez, filed his opposition tothe said motion. On March 17, 1960, during the courseof the presentation of the evidence for the petition for

a writ of preliminary mandatory injunction, Atty.Alvarez manifested that the defendant wasabandoning his prayer for a writ of preliminarymandatory injunction and asked for a ruling on themotion to dismiss. On June 14, 1960, Judge Lantindismissed Civil Case No. 41226 for failure to exhaustshe administrative remedies available to the hereindefendant.

On June 24, 1960, Atty. Alverez received a copy of theorder of dismissal It was at this state that the plaintiffentered into the case under circumstances aboutwhich the parties herein have given divergent versions

According to the plaintiff, six or seven days prior to theexpiration of the period for appeal from the order ofdismissal, he chanced to meet the late Rafael Corpus,father of the defendant, at the Taza de Oro coffeeshop. After they talked about the defendant's havinglost his case before Judge Lantin, and knowing that theplaintiff and the defendant were both members of theCivil Liberties Union, Rafael Corpus requested theplaintiff to go over the case and further said that hewould send his son, the herein defendant, to theplaintiff to find out what could be done about the caseThe defendant called up the plaintiff the followingmorning for an appointment, and the plaintiff agreedto am him in the latter's office. At said conference, thedefendant requested the plaintiff to handle the casebecause Atty. Alvarez had already been disenchantedand wanted to give up the case. Although at firstreluctant to handle the case, the plaintiff finally agreedon condition that he and Atty. Alverez wouldcollaborate in the case.

The defendant's version of how the plaintiff came intothe case is as follows:

After the order of dismissal issued by Judge Lantin waspublished in the newspapers, the plaintiff sought aconference with the defendant at Taza de Oro, but thedefendant told him that he would rather meet theplaintiff at the Swiss Inn. Even before the case wasdismissed the plaintiff had shown interest in the sameby being present during the hearings of said case in thesala of Judge Lantin When the plaintiff and thedefendant met at the Swiss Inn, the plaintiff handedthe defendant a memorandum prepared by him onhow he can secure the reversal of the order ofdismissal by means of a formula stated in saidmemorandum. During the said occasion the plaintiffscribbled some notes on a paper napkin (Exhibit 19).On June 28, 1960, the defendant wrote the plaintiff,sending with it a copy of the order of Judge Lantin

dated June 14, 1960 (Exhibit S Inasmuch as said letter,Exhibit S already mentions the 'memorandum' of theplaintiff, the defendant contends that it was not six orseven days prior to the expiration of the period ofappeal (which should be on or about July 2 or 3, 1960)but on a date even earlier than June 28, 1960 that theplaintiff and the defendant met together to discuss thelatter's case.

Laying aside for the moment the true circumstancesunder which the plaintiff started renderingprofessional services to the defendant, the undisputedevidence shows that on July 7, 1960, the plaintiff fileda motion for reconsideration of the order of dismissal


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under the joint signatures of the plaintiff and Atty.Alverez (Exhibit B). The plaintiff argued the said motionduring the hearing thereof On August 8, 1960, he file a13-page 'Memorandum of Authorities in support ofsaid motion for reconsideration (Exhibit C). A 3-pagesupplemental memorandum of authorities was filed bythe plaintiff on September 6, 1960 (Exhibit D)

On November 15, 1960, Judge Lantin denied themotion for reconsideration. On November 19, 1960,the plaintiff perfected the appeal from the order ofdismissal dated June 14, 1960. For purposes of saidappeal the plaintiff prepared a 232-page brief andsubmitted the same before the Supreme Court inBaguio City on April 20, 1961. The plaintiff was the onewho orally argued the case before the Supreme Court.In connection with the trip to Baguio for the said oralargument, the plaintiff used his car hich broke downand necessitated extensive repairs paid for by theplaintiff himself.

On March 30, 1962, the Supreme Court promulgatedits decision reversing the order of dismissal andremanding the case for further proceedings. On April18, 1962, after the promulgation of the decision of theSupreme Court reversing the dismissal of the case thedefendant wrote the plaintiff the following letter,Exhibit 'Q'. .

x x x x x x x x x

Dear Juaning

Will you please accept the attached checkin theamount of TWO THOUSAND P2,000.00) PESOS for legalservices in the handling of L-17860 recently decided bythe Court? I wish I could give more but as yu know wewere banking on a SC decision reinstating me and

reimburse my backstage I had been wanting to offersome token of my appreciation of your legal fight for

and in my behalf, and it was only last week that I

received something on account of a pending claim.

Looking forward to a continuation of the case in thelower court, I remain

Sincerely yours, Illegible

x x x x x x x x x

In a reply letter dated April 25, 1962, the plaintiffreturned the check, explaining said act as follows:

April 25, 1962

My dear Marino:

Yesterday, I received your letter of April 18th with itsenclosure. I wished thank you for your kind thoughts,however,please don't take offense if I have to returnthe check. I will explain.

When I decided to render professional services in your

case, I was motivated by the value to me of the very

intimate relations which you and I have enjoyedduring

the past many years. It was nor primarily, for aprofessional fee.

Although we were not fortunate to have obtained adecision in your case which should have put an end toit. I feel that we have reason to be jubilant over theoutcome, because, the final favorable outcome of the

case seems certain irrespective of the length of time

required to terminate the same.

Your appreciation of the efforts I have invested in your

case is enough compensation therefor, however, when

you shall have obtained a decision which would have

finally resolved the case in your favor, remembering me

then will make me happy. In the meantime, you willmake me happier by just keeping the check.

Sincerely yours,

JUANING

x x x x x x x x x

When the case was remanded for further proceedings

before Judge Lantin, the evidence for the defendant

was presented by Atty. 'Alvarez with the plaintiff

cooperating in the same-'On June 24, 1963, Judge

Lantin rendered his decision in favor of the defendant

declaring illegalthe resolution of the Monetary Boardof July 20, 1959, and ordering the defendant'sreinstatement and the payment of his back salaries and

allowances - The respondents in said Civil Case No.41226 filed a motion for reconsideration which wasopposed by the herein plaintiff. The said decision wasappealed by the respondents, as well as by the herein

defendant with respect to the award of P5, 000. 00

attorney's feed The plaintiff prepared two briefs for

submission to the Court of Appeals one as appellee(Exhibit H) and the other as appellant (Exhibit H-1). The

Court of Appeal however, certified the case to the

Supreme Court in 1964.

On March 31, 1965, the Supreme Court rendered a

decision affirming the judgment of the Court of first

Instance of Manila.

On April 19, 1965 the plaintiffs law office made a

formal de command upon the defendant for collection

of 50% of the amount recovered by the defendant as

back salaries and other emoluments from the Central

Bank (Exhibit N). This letter was written after the

defendant failed to appear at an appointment with the

plaintiff so that they could go together to the CentralBank to claim the possession of the office to which the

defendant was reinstated and after a confrontation in

the office of the plaintiff wherein the plaintiff was

remanding 50% of the back salaries and other

emoluments amounting to P203,000.00 recoverable by

the defendant. The defendant demurred to this

demand inasmuch as he had plenty of outstanding

obligations and that his tax liability for said back

salaries was around P90,000.00, and that he expected

to net only around P10,000.00 after deducting all

expenses and taxes.

On the same date, April 19,1965 the plaintiff wrote theGovernor for of Central Bank requesting that the


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amount representing the sack salaries of thedefendant be made out in two one in favor of thedefendant and the other representing the professionalfees equivalent to 50% of the said back salaries beingclaimed by the plaintiff (Exhibit 8). F to obtain the relieffrom the Governor of Central Bank, the plaintiffinstituted this action before this Court on July 20, 1965(Emphasis supplied).

As therein defendant, herein petitioner Marino Corpus filed in August 5,1965 an answer with counter-claim. On August 30, 1965, private respondentAtty. Juan T. David, plaintiff therein, filed a reply with answer to thecounterclaim of petitioner.

After due trial, the lower court rendered judgment on September 4, 1967,the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered, orderingthe defendant to pay plaintiff the sum of P30,000.00 inthe concept of professional fees, and to pay the costs(pp. 112-113, CA Record on Appeal p. 54, rec.)

After receipt on September 7, 1967 of a copy of the aforequoted judgment,petitioner Marino Corpus, defendant therein, filed on October 7, 1967 anotice of appeal from said judgment to the Court of Appeals. In his appeal,he alleged that the lower court erred:

1. In not holding that the plaintiff's professionalservices were offered and rendered gratuitously;

2. Assuming that plaintiff is entitled to compensation in holding that he was entitled to attorney's fees inthe amount of P30,000.00 when at most he would beentitled to only P2,500.00;

3. In not dismissing plaintiff's complaint; and

4. In not awarding damages and attorney's fees to thedefendant (p. 2, CA Decision, p. 26, rec.)

Likewise, private respondent Atty. Juan T. David, plaintiff therein, appealedto the Court of Appeals on October 9, 1967 assigning one error, to wit:

The lower court erred in ordering the defendant to paythe plaintiff only the sum of P30,000.00 in the conceptof attorney's fees (p. 1, CA Decision, p. 25, rec.).

On February 14, 1975, respondent Court of Appeals promulgated its decisionaffirming in toto the decision of the lower court, with costs against petitionerMarino Corpus (Annex A, Petition for Certiorari, p. 25, rec.)

Hence, the instant petition for review on certiorari, petitioner contendingthat the respondent Court of Appeals erred in finding that petitioneraccepted private respondent's services "with the understanding of both thathe (private respondent) was to be compensated" in money; and that the feeof private respondent was contingent (pp. 3 & 5, Petition for Certiorari, pp.17 & 19, rec.).

On October 1, 1975, the case was deemed submitted for decision (p. 177,rec.), after the parties filed their respective memoranda.

B

On January 31, 1978, private respondent Atty. Juan T. David filed a petitionto remand the case to the court a quofor execution of the latter's decision inCivil Case No. 61802, dated September 4, 1967, alleging that said decision isalready deemed affirmed pursuant to Section 11(2), Article X of the NewConstitution by reason of the failure of this Tribunal to decide the case within18 months. Then on July 7, 1978, another petition to remand the case to thelower court to execution was filed by herein private respondent.

Subsequently, private respondent Atty. Juan T. David filed with The court aquo a motion dated September 13, 1978 for the issuance of a writ ofexecution of the lower court's decision in the aforesaid civil case, alsoinvoking Section 11 (2), Article X of the 1973 Constitution. In an order datedSeptember 19, 1978, the lower court, through Judge Jose H. Tecson, directedthe issuance of a writ of execution. The writ of execution was issued onOctober 2, 1978 and a notice of garnishment was also issued n October 13,1978 to garnish the bank deposits of herein petitioner Marino Corpus in theCommercial Bank and Trust Company, Makati Branch.

It appears that on October 13, 1978, herein petitioner filed a motion forreconsideration of the September 19, 1978 order. Private respondent Atty.Juan T. David filed on October 19, 1978 an opposition to said motion andherein petitioner filed a reply on October 30, 1978. The lower court deniedsaid motion for reconsideration in its over dated November 7, 1978.

It appears also that in a letter dated October 18, 1978, herein petitionerMarino Corpus requested this Court to inquire into what appears to be anirregularity in the issuance of the aforesaid garnishment notice to theCommercial Bank and Trust Company, by virtue of which his bank depositswere garnished and he was prevented from making withdrawals from hisbank account.

In OUR resolution of November 3, 1978, WE required private respondentAtty. Juan T. David and the Commercial Bank and Trust Company tocomment on petitioner's letter, and for the bank to explain why it did nothonor petitioner's withdrawals from his bank deposits when no garnishmentorder has been issued by the Supreme Court. This Court further inquiredfrom the lower court whether it has issued any garnishment order during thependency of the present case.

On November 27, 1978, the Commercial Bank and Trust Company filed itscomment which was noted in the Court's resolution of December 4, 1978. Insaid resolution, the Court also required Judge Jose H. Tecson to comply withthe resolution of November 3, 1978, inquiring as to whether he had issuedany garnishment order, and to explain why a writ of execution was issueddespite the pendency of the present case before the Supreme Court.

Further, WE required private respondent Atty. Juan T. David Lo explain hisfailure to file his comment, and to file the same as directed by the resolutionof the Court dated November 3, 1978. Private respondent's compliance cameon December 13, 1978, requesting to be excused from the filing of hiscomment because herein petitioner's letter was unverified. Judge Tecson'scompliance was filed on December 15, 1978, to which herein petitionerreplied on January 11, 1979.

In OUR resolution dated January 3, 1979, WE set aside the order of JudgeJose H. Tecson dated September 19, 1978, the writ of execution as well asthe notice of garnishment, and required private respondent Atty. Juan T.David to show cause why he should not be cited for contempt for his failureto file his comment as directed by the resolution of the Court datedDecember 4, 1978, and for filing a motion for execution knowing that thecase is pending appeal and review before this Court Likewise, the Courtrequired Judge Jose H. Tecson to show cause why he should not be cited forcontempt for issuing an order directing the issuance of a writ of executionand for issuing such writ despite the pendency of the present case in theSupreme Court.


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On January 12, 1979, Judge Jose H. Tecson filed his compliance explanationas directed by the aforesaid resolution of January 3, 1979, while privaterespondent Atty. Juan T. David filed on January 30, 19 79 his compliance andmotion for reconsideration after the Court has granted him an extension oftime to file his compliance.

Private respondent Atty. Juan T. David filed on February 28, 1979, a petitionpraying that the merits of his compliance be resolved by the Court en banc.

Subsequently, on March 26, 1979, another petition was filed by hereinprivate respondent asking the Chief

Justice and the members of the First Division to inhibit themselves fromparticipating in the determination of the merits of his compliance and for itsmerits to be resolved by the Court en banc.

C

The main thrust of this petition for review is whether or not privaterespondent Atty. Juan T. David is entitled to attorney's fees.

Petitioner Marino Corpus contends that respondent David is not entitled toattorney's fees because there was no contract to that effect. On the other

hand, respondent David contends that the absence of a formal contract forthe payment of the attorney's fees will not negate the payment thereofbecause the contract may be express or implied, and there was an impliedunderstanding between the petitioner and private respondent that theformer will pay the latter attorney's fees when a final decision shall havebeen rendered in favor of the petitioner reinstating him to -his formerposition in the Central Bank and paying his back salaries.

I

WE find respondent David's position meritorious. While there was expressagreement between petitioner Corpus and respondent David as regardsattorney's fees, the facts of the case support the position of respondentDavid that there was at least an implied agreement for the payment ofattorney's fees.

Petitioner's act of giving the check for P2,000.00 through his aforestatedApril 18, 1962 letter to respondent David indicates petitioner's commitmentto pay the former attorney's fees, which is stressed by expressing that "I wishI could give more but as you know we were banking on a SC decisionreinstating me and reimbursing my back salaries This last sentimentconstitutes a promise to pay more upon his reinstatement and payment ofhis back salaries. Petitioner ended his letter that he was "looking forward toa continuation of the case in the lower court, ... to which the certiorari-mandamus-quo warranto case was remanded by the Supreme Court forfurther proceedings.

Moreover, respondent David's letter-reply of April 25, 1962 confirms thepromise of petitioner Corpus to pay attorney's fees upon his reinstatementand payment of back salaries. Said reply states that respondent David

decided to be his counsel in the case because of the value to him of theirintimate relationship over the years and "not, primarily, for a professionalfee." It is patent then, that respondent David agreed to render professionalservices to petitioner Corpus secondarily for a professional fee. This isstressed by the last paragraph of said reply which states that "however,when you shall have obtained a decision which would have finally resolvedthe case in your favor, remembering me then will make me happy. In themeantime, you will make me happier by just keeping the check." Thereafter,respondent David continued to render legal services to petitioner Corpus, incollaboration with Atty. Alverez until he and Atty. Alvarez secured thedecision directing petitioner's reinstatement with back salaries, which legalservices were undisputedly accepted by, and benefited petitioner.

Moreover, there is no reason to doubt respondent David's assertion that DonRafael Corpus, the late father of petitioner Corpus, requested respondent tohelp his son, whose suit for reinstatement was dismissed by the lower court;that pursuant to such request, respondent conferred in his office withpetitioner, who requested respondent to handle the case as his lawyer, Atty.Alvarez, was already disenchanted and wanted to give up the case; and thatrespondent agreed on the case. It would have been unethical for respondentto even offer his services when petitioner had a competent counsel in theperson of Atty. Alvarez, who has been teaching political, constitutional and

administrative law for over twenty years.

Likewise, it appears that after the Supreme Court affirmed on March 31,1965 the order of the lower court reinstating petitioner Corpus with backsalaries and awarding attorney's fees of P5,000.00, respondent David made awritten demand on April 19, 1965 upon petitioner Corpus for the payment ofhis attorney's fees in an amount equivalent to 50% of what was paid as backsalaries (Exh. N p. 75, Folder of Exhibits, Civil Case No. 61802). PetitionerCorpus, in his reply dated May 7, 1965 to the aforesaid written demand,while disagreeing as to the amount of attorney's fees demanded, did notcategorically deny the right of respondent David to attorney's fees but on thecontrary gave the latter the amount of P2,500.00, which is one-half () of thecourt-awarded attorney's fees of P5,000.00, thus impliedly admitting theright of respondent David to attorney's fees (Exh. K, p. 57, Folder of Exhibits,Civil Case No. 61802).

It is further shown by the records that in the motion filed on March 5, 1975by petitioner Corpus before the Court of Appeals for the reconsideration ofits decision the order of the lower court granting P30,000.00 attorney's fee'sto respondent David, he admitted that he was the first to acknowledge thatrespondent David was entitled to tion for legal services rendered when hesent the chock for P2,000.00 in his letter of April 18, 1962, and he is still tocompensate the respondent but only to the extent of P10,000.00 (p. 44,rec.). This admission serves only to further emphasize the fact that petitionerCorpus was aware all the time that he was liable to pay attorney's fees torespondent David which is therefore inconsistent with his position that theservices of respondent David were gratuitous, which did not entitle saidrespondent to compensation.

It may be advanced that respondent David may be faulted for not reducing

the agreement for attorney's fees with petitioner Corpus in writing.However, this should be viewed from their special relationship. It appearsthat both have been friends for several years and were co-members of theCivil Liberties Union. In addition, respondent David and petitioner's father,the late Rafael Corpus, were also close friends. Thus, the absence of anexpress contract for attorney's fees between respondent David andpetitioner Corpus is no argument against the payment of attorney's fees,considering their close relationship which signifies mutual trust andconfidence between them.

II

Moreover, the payment of attorney's fees to respondent David may also bejustified by virtue of the innominate contract offacio ut des (I do and yougive which is based on the principle that "no one shall unjustly enrich himselfat the expense of another." innominate contracts have been elevated to acodal provision in the New Civil Code by providing under Article 1307 thatsuch contracts shall be regulated by the stipulations of the parties, by thegeneral provisions or principles of obligations and contracts, by the rulesgoverning the most analogous nominate contracts, and by the customs ofthe people. The rationale of this article was stated in the 1903 case of Perezvs. Pomar (2 Phil. 982). In that case, the Court sustained the claim of plaintiffPerez for payment of services rendered against defendant Pomar despite theabsence of an express contract to that effect, thus:

It does not appear that any written contract wasentered into between the parties for the employmentof the plaintiff as interpreter, or that any otherinnominate contract was entered into but


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whethertheplaintiffsservicesweresolicitedorwhethertheywereoffered to the defendant for his assistance,inasmuch as these services were accepted and madeuse of by the latter, we must consider that there was atacit and mutual consent as to the rendition of theservices. This gives rise to the obligation upon theperson benefited by the services to makecompensation therefor, since the bilateral obligation torender service as interpreter, on the one hand, and on

the other to pay for the service rendered, is therebyincurred. (Arts. 1088, 1089, and 1262 of the CivilCode).

x x x x x x x x x

... Whether the service was solicited or offered, thefact remains that Perez rendered to Pomar services asinterpreter. As it does not appear that he did thisgratuitously, the duty is imposed upon the defendant,he having accepted the benefit of the service, to pay ajust compensation therefor, by virtue of theinnominate contract of facio ut des implicitlyestablished.

x x x x x x x x x

... because it is a well-known principle of law that noone should permitted to enrich himself to the damageof another" (emphasis supplied; see also Tolentino,Civil Code of the Philippines, p. 388, Vol. IV 119621,citing Estate of Reguera vs. Tandra 81 Phil. 404 [1948];Arroyo vs. Azur 76 Phil. 493119461; and Perez vs.Pomar. 2 Phil. 682 [1903]).

WE reiterated this rule in Pacific Merchandising Corp. vs. ConsolacionInsurance & Surety Co., Inc. (73 SCRA 564 [1976]) citing the case ofPerez v.Pomar, supra thus:

Where one has rendered services to another, andthese services are accepted by the latter, in theabsence of proof that the service was renderedgratuitously, it is but just that he should pay areasonable remuneration thereforbecause 'it is a well-known principle of law, that no one should bepermitted to enrich himself to the damage of another(emphasis supplied).

Likewise, under American law, the same rule obtains (7 CJS 1079; FL Still &Co. v. Powell, 114 So 375).

III

There was no contract for contingent fee between Corpus and respondentDavid. Contingent fees depend on an express contract therefor. Thus, "anattorney is not entitled to a percentage of the amount recovered by his clientin the absence of an express contract to that effect" (7 C.J.S. 1063 citingThurston v. Travelers Ins. Co., 258 N.W. 66, 128 Neb. 141).

Where services were rendered without any agreementwhatever as to the amount or terms of compensation,the attorney is not acting under a contract for acontingent fee, and a letter by the attorney to theclient stating that a certain sum would be a reasonableamount to charge for his services and adding that arate of not less than five percent nor more than tenwould be reasonable and customary does not convert

the original agreement into a contract for a contingentfee (7 C.J.S. 1063 citing Fleming v. Phinizy 134 S.E.814).

While there was no express contract between the parties for the payment ofattorney's fees, the fact remains that respondent David rendered legalservices to petitioner Corpus and therefore as aforestated, is entitled tocompensation under the innominate contract of facio lit des And such being

the case, respondent David is entitled to a reasonable compensation.

IV

In determining a reasonable fee to be paid to respondent David ascompensation for his services, on a quantum meruit basis, it is proper toconsider all the facts and circumstances obtaining in this case particularly thefollowing:

The extent of the services rendered by respondent David should beconsidered together with the extent of the services of Petitioner's othercounsel, Atty. Rosauro Alvarez, It is undisputed that Atty. Rosauro Alvarezhad rendered legal services as principal counsel for more shall six (6) yearswhile respondent David has rendered legal services as collaborating counselfor almost four (4) years. It appears that Atty. Alvarez started to render legalservices after the administrative case was filed on March 7, 1958 againstpetitioner Corpus. He represented petitioner Corpus in the hearing of saidcase which was conducted from May 5, 1958 to October 8, 1958, involving 56sessions, and this resulted in the complete exoneration by the InvestigatingCommittee of all the charges against the petitioner. It appears further thatafter the Monetary Board, in its resolution of July 20, 1959, declaredpetitioner Corpus as being considered resigned from the service, Atty.Alvarez instituted on August 18, 1958 Civil Case No. 41126 in the Court ofFirst Instance of Manila for the setting aside of the aforestated resolutionand for the reinstatement of petitioner Corpus. Atty. Alvarez activelyparticipated in the proceedings.

On the other hand, respondent David entered his appearance as counsel forpetitioner Corpus sometime after the dismissal on June 14, 1960 of theaforesaid civil case. From the time he entered his appearance, both he and

Atty. Alvarez rendered legal services to petitioner Corpus in connection withthe appeals of the aforementioned civil case to the Court of Appeals and tothe Supreme Court. The records disclose that in connection with the appealfrom the June 14, 1960 order of dismissal, respondent David prepared andsigned pleadings although the same were made for and on behalf of Atty.Alvarez and himself And it is not far-fetched to conclude that all appearanceswere made by both counsels considering that Atty. Alverez was the principalcounsel and respondent David was the collaborating counsel. Thus, when thecase was called for oral argument on April 20, 1961 before the SupremeCourt, respondent David and Atty. Alverez appeared for petitioner Corpusalthough it was David who orally argued the case.

When the Supreme Court, in its decision of March 30, 1962, remanded thecase to the lower court for further it was Atty. Alverez who conducted thepresentation of evidence while respondent David assisted him The records

also review that respondent David prepared and signed for Atty. Alverez andhimself. certain pleadings, including a memorandum. Moreover, after thelower court rendered judgment on June 2 4, 1963 ordering the reinstatemenand payment of back salaries to petitioner Corpus and awarding himP5,000.00 by way of attorney's fees, both petitioner Corpus and therespondents in said case appealed the judgment. At that stage, respondentDavid again prepared and signed for Atty. Alvarez and himself, the necessarypleadings, including two appeal briefs. And in addition, he made oralarguments in the hearings of motions filed in the lower court before therecords of the case were forwarded to the appellate court. Furthermore,while it appears that it was Atty. Alvarez who laid down the basic theory andfoundation of the case of petitioner Corpus in the administrative case andlater in the civil case, respondent David also advanced legal propositions.Petitioner Corpus contends that said legal propositions were invariablyrejected by the courts. This is, however, of no moment because the fact


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remains that respondent David faithfully rendered legal services for thesuccess of petitioner's case.

The benefits secured for petitioner Corpus may also be considered inascertaining what should be the compensation of respondent David. Itcannot be denied that both Atty. Alvarez and respondent David wereinstrumental in obtaining substantial benefits for petitioner Corpus whichconsisted primarily of his reinstatement, recovery of back salaries and the

vindication of his honor and reputation. But, note should also be taken of thefact that respondent David came at the crucial stage when the case ofpetitioner Corpus was dismissed by the lower court.

Atty. Rosauro Alvarez admittedly was paid by petitioner Corpus the sum ofP20,000.00 or at most P22,500.00 (T.s.n., Jan. 11, 1967, pp. 34-35; T.s.n., Feb.10, 1967, pp. 48-49). On the other hand, petitioner Corpus, after WEsuggested on August 15, 1975 that they settle the case amicably has, in hisSeptember 15, 1975 pleading filed before this Court (p. 166, rec.), manifestedhis willingness to pay P10,000.00 for the services of respondent David.However, respondent David has not manifested his intention to accept theoffer.

In his complaint in the instant case, he asked for P75,000.00 as his attorney'sfees. The records reveal that petitioner Corpus actually received only

P150,158.50 as back salaries and emoluments after deducting taxes as wellas retirement and life insurance premiums due to the GSIS. The amount thusclaimed by respondent David represents 50% of the amount actuallyreceived by petitioner Corpus. The lower court, however, awarded onlyP30,000.00 and it was affirmed by the Court of Appeals.

Considering the aforestated circumstances, WE are of the opinion that thereasonable compensation of respondent David should be P20,000.00.

V

WE find private respondent Juan T. David and Judge Jose H. Tecson, PresidingJudge of the Court of First Instance of Manila, Branch V, guilty of contempt ofcourt.

Respondent David filed on or about September 13, 1978 a motion with thecourt a quo for the issuance of a writ of execution to enforce its decision inCivil Case No 61802, subject of the present petition, knowing fully well that itwas then still pending appeal before this Court. In addition, no certificationthat the aforesaid decision is already deemed affirmed had as yet beenissued by the Chief Justice pursuant to Section 11, paragraph 2, Article X ofthe New Constitution; because respondent David's petitions filed with theSupreme Court on January 31, 1978 and on July 7, 1978 to remand the caseto the trial court for execution and for the issuance of such certification hadnot yet been acted upon as the same were still pending consideration by thisCourt. In fact, this Court has not as of this time made any pronouncement onthe aforesaid provision of the New Constitution.

This act of respondent David constitutes disrespect to, as well as disregard

of, the authority of this Court as the final arbiter of all cases duly appealed toit, especially constitutional questions. It must be emphasized that as amember of the Philippine Bar he is required "to observe and maintain therespect due to the court of justice and judicial officers" (Section 20 (b), 138 ofthe Revised Rules of Court). Likewise, Canon 1 of. the Canons of ProfessionalEthic expressly provide that: "It is the duty of the lawyer to maintain towardsthe Courts a respectful attitude, not for the sake of the temporary incumbentof the judgement office, but for the maintenance of its supremeimportance." And this Court had stressed that "the duty of an attorney to thecourts 'can only be maintained by rendering no service involving anydisrespect to the judicial office which he is bound to uphold'" (Rheem of thePhilippines v. Ferrer, 20 SCRA 441, 444 [1967] citing the case of Lualhati v.Albert, 67 Phil. 86, 92 [1932]).

Moreover, this Court takes judicial notice of the fact that herein respondentDavid, in the previous case of Integrated Construction Services, Inc. andEngineering Construction, Inc. v. Relova (65 SCRA 638 [1975]), had sentletters addressed to the then Chief Justice Querube C. Makalintal and later tothe late Chief Justice Fred Ruiz Castro, requesting for the issuance ofcertification on the basis of the aforementioned provision of the NewConstitution which were not given due consideration. And knowing this,respondent David should have been more prudent and cautious in g with thecourt a quo any motion for execution.

Furthermore, there was even a taint of arrogance and defiance on the part ofrespondent David in not filing his comment to the letter- complaint datedOctober 18, 1978 of petitioner Corpus, as required by this Court in itsNovember 3, 1978 and December 4,1978 resolutions which were dulyreceived by him, and instead, he sent on December 13, 1978 a letterrequesting to be excused from the filing of his comment on the lame excusethat petitioner's letter-complaint was not verified.

On the part of Judge Jose H. Tecson, his presumptuous and precipitate act ofgranting the motion for execution of dent David likewise constitutesdisrespect to, as well as of, the authority of this Court because he know for athat the case was still pending apply as the had not yet been remanded to itand that no certification has been issued by this Court. As a judicial officer,Judge Tecson is charged with the knowledge of the fact that this Court hasyet to make a definite pronouncement on Section 11, paragraph 2, Article Xof the New Constitution. Judge Tecson should know that only the SupremeCourt can authoritatively interpret Section 11 (2) of Article X of the 1973Constitution. Yet, Judge Tecson assumed the role of the Highest Court of theLand. He should be reminded of what Justice Laurel speaking for the Court,has said in People v. Vera (65 Phil 56, 82 [1937]):

A becoming modesty of inferior courts demandsconscious realization of the position that they occupyin the interrelation and operation of the integratedjudged system of the nation.

It may also be added that the improvident act of respondent David in firingthe motion for execution and the precipitate act of Judge Tecson in issuing

the writ of execution are intriguing as they invite suspicion that there wasconnivance between the two. Respondent David would seem to imply thathis claim for attorney's fees should be given preference over the other camsnow pending in this Court. Certainly, such should not be the case becausethere are cases which by their nature require immediate or preferentialattention by this Tribunal like habeas corpus cases, labor cases and c casesinvolving death sentence, let alone cases involving properties and propertyrights of poor litigants pending decision or resolution long before the NewConstitution of 1973. Nobility and exempt forbearance were expected ofAtty. David, who is old and experienced in the practice of the legalprofession, from which he has derived a great measure. of economic well-being and independence

Consequently, the filing of the motion for immediate tion and the issuance ofthe writ of execution constitute a defiance and usurpation of the jurisdictionof the Supreme Court. As a disciplinary measure for the preservation andvindication of the dignity of this Supreme Tribunal respondent Atty. Juan T.David should be REPRIMANDED for his precipitate action of filing a motionfor execution as well as Judge Jose H. Tecson for his improvident issuance ofa writ of execution while the case is pending appeal before the SupremeCourt, and a repetition of said acts would be dealt with more severely.

WHEREFORE, PETITIONER R. MARINO CORPUS IS HEREBY DIRECTED TO PAYRESPONDENT ATTY. JUAN T. DAVID THE SUM OF TWENTY THOUSAND(P20,000.00) PESOS AS ATTORNEY'S FEES.

RESPONDENT ATTY. JUAN T. DAVID AND JUDGE JOSE H. TECSON OF THECOURT OF FIRST INSTANCE OF MANILA, BRANCH V, ARE HEREBY DECLAREDGUILTY OF CONTEMPT AND ARE HEREBY REPRIMANDED, WITH A WARNING


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THAT REPETITION TION OF THE SAME OR SIMILAR ACTS WILL BE DEALT WITHMORE SEVERELY.

COSTS AGAINST PETITIONER.

SO ORDERED.

Teehankee (Chairman), Fernandez and Melencio-Herrera, JJ., concur.

De Castro, J., concurs in the result.

Guerrero, J., is on leave.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

A.C. No. 528 October 11, 1967

ANGEL ALBANO, complainant,vs.ATTY. PERPETUA COLOMA, respondent.

FERNANDO,J.:

This proceeding for disbarment was filed by complainant Angel Albanoagainst respondent Perpetua Coloma, a member of the Philippine Bar. In aletter dated June 20, 1962 addressed to this Court, complainant alleged thatduring the Japanese occupation his mother, Delfina Aquino, and he retainedthe services of respondent as counsel for them as plaintiffs in Civil Case No.4147 of the Court of First Instance of Ilocos Norte. After which came theaccusation that after liberation and long after the courts had beenreorganized, respondent failed to expedite the hearing and termination of

the case, as a result of which they had themselves represented by anotherlawyer. This notwithstanding, it was claimed that respondent intervened inthe case to collect her attorney's fees. It was then alleged that during thehearing they were surprised when respondent presented in exhibit adocument showing that they as well as their co-plaintiffs in the casepromised to pay her a contingent fee of 33- /3% of whatever could berecovered whether in land or damages. A copy of such document wasattached to the letter. The more serious charge was that the signaturetherein appearing, purportedly that of the complainant, and the writing afterthe name of his mother were not made by them. It was further stated thatthe Honorable Delfin B. Flores, then Judge of the Court of First Instance ofIlocos Norte, submitted the document in question to the National Bureau ofInvestigation (hereinafter referred to as NBI) together with samples of hisgenuine signature. A copy of the finding of the NBI was attached, theconclusion being that the questioned signature "is NOT in the hand of theperson whose sample signatures were received."

Complainant stated that being a poor man, he could hardly pay for theservices of a lawyer to assist him in the disbarment proceedings. He addedthe information that respondent Coloma "is a very influential woman in theprovince of Ilocos Norte" as she was then a member of the provincial board.The prayer was for the "kind and generous help regarding this matter inorder that Atty. Perpetua Coloma may be made to stand before the bar ofjustice and disbarred from the practice of her profession as a lawyer."

In a resolution dated July 20, 1962, this Court required respondent PerpetuaColoma to answer the complaint. The answer came in September 4, 1962.There was a specific denial of the allegation that the complainant was "avictim of injustice," respondent alleging that the same was "untrue,unfounded and imaginary." While admitting that her services were

contracted by complainant and his mother and their co-plaintiffs, in CivilCase No. 4147, she stated that there was a contingent fee of one-third (/3)of whatever land and damages could be obtained for the plaintiffs. Shedenied that she did nothing to expedite the hearing and termination of suchcivil case as the record would show that she filed "more than twenty (20)papers and pleadings, went to trial for several days and with the assistanceof her sister, Atty. Oliva D. Coloma, obtained a favorable judgment in theCourt of First Instance for the petitioner and his co-plaintiffs and filed withthe Honorable Court of Appeals a thirty-five (35) page brief, finished after

careful, conscientious and exhaustive study and preparation." She attached acopy of the favorable decision rendered by Judge Simeon Ramos ofNovember 10, 1948;1 the decision of the Court of Appeals promulgated onOctober 13, 1950, confirming the above favorable decision, which waspenned by the then Justice Gutierrez David;2 and the dismissal of a petitionfor certiorarito review such decision in the resolution of this Court of January10, 1951.3 Then came a reference to a decision by the Court of Appeals in CAG.R. No. 10563-R, the complainant as one of the plaintiffs having appealedfrom an order of the lower court, sustaining her lien upon the judgment aswell as "her share of one-third (/3) of the lands adjudicated" whichaccording to the lower court however would require that the proper actionbe filed. In the opinion of the Court of Appeals penned by Justice Sanchez,now a member of this Court, an evaluation of her service was made thus:

"Appellee served as plaintiffs' counsel for a period of about seven years. The

record shows that she was diligent in her work. That she had renderedvaluable services cannot be doubted. In fact, the final decision favorable toplaintiffs is almost wholly the result of her efforts. Literally, she gambled onthe success or failure of the litigation. She was a member of the Bar since1940. Gauged by the familiar rule that an attorney shall be entitled to havereasonable compensation for his services, with a view to the importance ofthe subject matter of the controversy, the extent of the services rendered,and the professional standing of the attorney, . . ., we feel, as did the trialcourt, that appellee is entitled to one-third of all the lands and damagesrecoverable by plaintiffs under the judgment of the Court below."

She likewise denied that she could have been removed for her failure tocomply with her obligations as counsel as she served "faithfully, efficiently,continuously and to the best of her knowledge and capacity." Her dismissalthen, according to her, "was made without cause and without the consent of

herein respondent and only on June 18, 1951, when the undersigned hadalready won the case for them in the Court of First Instance and in the Courtof Appeals." In view of the failure of the new lawyers retained to be at timesavailable in the Court of First Instance of Ilocos Norte and as pleadings byopposing counsel were still sent to her and out of loyalty to her formerclients she continued "to render professional legal services to complainantand his mother." Then came the allegation "that after the case was won inthe trial court and in the Court of Appeals, complainant and his co-plaintiffsstopped seeing the undersigned and even disowned their contract with herin the trial of [her] petition to record attorney's lien which was granted bythe trial court and affirmed by the Court of Appeals." Copies of the decisionsof the trial court and the Court of Appeals, were submitted together with theanswer.4 She characterized as "false and unjust" the averment ofcomplainant "that the latter and his mother did not sign Annex 'A' becausethey really signed the instrument in the presence of attesting witnesses whotestified to and confirmed the signing of the same, which fact (of signing) wa

found and confirmed by the trial court after and affirmed by the Court ofAppeals, . . . ."

Then came the denial of the allegation of complainant that due to theseriousness of the charge, Judge Delfin B. Flores submitted the allegedfalsified document to the NBI for examination, the truth being that it wascomplainant who did so. She likewise "specifically denies the authenticityand veracity of the alleged findings of the National Bureau of Investigation onAnnex 'A' because the signatures therein are genuine and have been foundto be so by the trial and appellate courts after hearing the testimony of theinstrumental witnesses and comparing the signatures in Annex 'A' withsignatures admitted to be genuine by the complainant as well as upon theaffirmation of complainant's sister and a co-plaintiff in Civil Case No. 4147."She then referred to a rule which she considered well-settled in this


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jurisdiction that a question of whether or not a given document is genuinefalls within the general knowledge and competence of a judge who mayinquire into its authenticity, the testimony of instrumental witnessessufficing, without the court being bound even by real experts. Nor could sheagree that the complainant was a poor man and could hardly afford theservices of a lawyer because thru her efforts, he and his co-plaintiffs werericher "by about P100,000.00 (P85,000.00 in realty and P15,000.00 in cash asdamages) by winning Civil Case No. 4147 for them" notwithstanding, whichingratitude had been her reward. Respondent also denied the insinuation

that she was using her influence as a board member. She stated that from1944 to 1951, when she rendered her services for complainant, she was inprivate life, not having been elected to the provincial board until 1959.

She concluded by saying that "during her practice of law for more thantwenty (20) years [she] has strictly adhered to the ethics of the professionand has always been guided by the principles of justice, fairness and respectfor individual rights and that as a public official, [she] has never used herinfluence to corrupt public servants or ordinary citizens, and all the people ofIlocos Norte well know that complainant has no sense of justice, no integrityto preserve, no honor to treasure and no future to build. On the other hand,the people of said province have faithfully supported [her] in her aspirations,first as councilor and then as board member with overwhelming majorities.Said support speaks of vindication and means full faith and credit to [her]integrity, ability and honesty." She further submitted as affirmative defenses

the cause of action being barred by (1) prior judgment and (2) by the statuteof limitations. She prayed for the dismissal of the complaint against her.

The matter was referred to the Solicitor General for investigation, report andrecommendation in a resolution of this Court dated September 7, 1962. OnSeptember 12, 1967, the report and recommendation of the SolicitorGeneral was submitted. He asked "that this case be dismissed." We grantsuch a plea.

In his report, the Solicitor General noted that in the investigation conductedon his behalf by the provincial fiscal of Ilocos Norte, "only the complainantappeared."5 No evidence was introduced by him other than the NBI report onthe alleged falsified signatures. He manifested that all his evidence could befound in the records of Civil Case No. 4147 of the Court of Fi rst Instance ofIlocos Norte.6 Respondent on her part, according to the Solicitor General,

"merely filed a manifestation to the effect that the contract for attorney'sfees in question had already been declared genuine and authentic by theCourt of First Instance of Ilocos Norte, the Court of Appeals, and thisHonorable Court, in their respective decisions, copies of which were attachedto her answer; that said Contract was signed by petitioner and theinstrumental witnesses thereto in her presence; and that she was submittingthe case on the annexes to her answer and the transcript of the trial of theproceedings on the recording of her attorney's lien in Civil Case No. 4147. . .."7

The facts as found by the Solicitor General in so far as the services ofrespondent as counsel for the complainant and his mother were concernedreveal the utmost diligence and conscientiousness on her part. What she saidin her answer was sustained in all respects.

The express finding was then made by the Solicitor General that the questionof the genuineness and due execution to pay respondent her attorney's fees"had already been litigated by the parties in the course of the proceedingsfor the recording and enforcement of the attorney's lien of respondent inCivil Case No. 4147 of the Court of First Instance of Ilocos Norte; that theplaintiffs in said case (one of whom is the complainant in this case) deniedthe genuineness and due execution of said agreement Exh. 'A'; that they hadfull opportunity to present evidence in support of their said contention; thatafter hearing, the trial court found said document to be genuine (pp. 43-48,rec.); and that on appeal to the Court of Appeals, said court likewise foundsaid document genuine . . ."8

On this point an extended excerpt from the decision of the Court of Appeals,the opinion being penned as noted by Justice Sanchez, was quoted. Thus:

1. Exhibit A, the written contract of professional services, showsthat appellee, as plaintiffs' attorney, is entitled to one-third of allthe lands and damages which may be awarded plaintiffs;otherwise, if the case is lost, then appellee is not entitled tocompensation.

That Exhibit A was duly executed is a proven fact. A witness tothat document, namely, Sergio Manuel, testified that the cross

after the name of Delfina Aquino was placed by her and that thesignature of Angel Albano, one of the plaintiffs, is the genuinesignature of the said Angel Albano. It is true that on the witnessstand Delfina Aquino denied that she placed a cross after thetypewritten words "Delfina Aquino" in Exhibit A, and that AngelAlbano likewise denied his signature therein. Suffice it to say thatthis negative testimony will not prevail over the positivetestimony of appellee and her witness aforesaid. People vs.Bueno, 41 Phil. 447, 452; People vs. Ferrer, 44 O.G., No. 1, pp. 112115.

Further, appellee's evidence on this point is not limited merely toExhibit A. The record shows that previous thereto, there was averbal agreement regarding said attorney's fee's. On this point,appellee finds corroboration in the testimony of Rosario Lagasca,a blood relation of plaintiff and Silvina Guillermo.

Plaintiffs' evidence that in 1955 appellee undertook to take up thecase of plaintiffs for a stipulated contingent fee of P2,000.00 doesnot merit serious consideration. It does not seem probable thatappellee would take the case on a win-or-lose basis, i.e., for thesum of P2,000.00 in case the litigation is won and nothing in caseof loss, because at that time P2,000.00 was worth only a fewgantas of rice. No lawyer in his right mind would accept such amiserable fee.

The following testimony of Felicidad Albano, one of the plaintiffs,given in an obviously unguarded moment, stripped plaintiffsnaked of the pretense that there was no such contract for one-third share as fees:

"Q Did you not authorize your brother, AngelAlbano, or your mother, to give one-third (1/3) of allthe properties and damages?

"A We authorized them." Tr., p. 8, Galapon.

The court below, therefore, is correct in declaring that, afterweighing and considering the evidence of both parties, Exhibit A isgenuine. (pp. 61- 62, rec.)9

The Solicitor General thus concluded that the finding of the Court of FirstInstance of Ilocos Norte, and of the Court of Appeals that the questioneddocument "is genuine, is now res judicata and bars complainant Angel

Albano (one of the plaintiffs in Civil Case No. 4147) from raising said questionanew in these disbarment proceedings. As repeatedly held, the fundamentalprinciple ofres judicata applied to all cases and proceedings, in whateverform they may be (Brillantes vs. Castro, L-9223, June 30, 1956, 99 Phil. 497;60 C.J.S. 31, 267), and a party can not escape the bar of a judgment againsthim in a new suit on the same cause of action by varying the form of hisaction or adopting a different method of presenting his cage (Wensel v.Surigao Consolidated Mining Inc., 57 O.G. 6958; Vda. de Padilla vs. Paterno,G.R. No. L-8748, Dec. 26, 1961; 50 C. J., S. 98)."10

It was noted further that there was no oral testimony as to the allegedfalsification, except the report of the NBI, lacking in persuasive force in that itfailed to state the reason or basis for its conclusion. The observation of theSolicitor General here made is both pertinent and relevant: "The mereconclusion in the aforesaid NBI report that the signature of complainant


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Angel Albano on the document Exh. A was not written in the same hand thatwrote the genuine specimens of his signature, without any reason or reasonssupporting it, is, therefore, of little or no value in evidence and consequently,it cannot support the present charge of falsification against respondent,apart from the fact that, as already stated, it is inadmissible on the ground ofestoppel by judgment."11 On the reasonableness of the contingent feecollected by respondent, the Solicitor General adopted the same view foundin the decision of the Court of Appeals, already referred to being part ofrespondent's answer, that such indeed was the case.

The Solicitor General could thus rightfully assert that if there was anyoneguilty of bad faith in this case "it is complainant and his co-plaintiffs in CivilCase No. 4147 who, after benefiting from the valuable services of respondentin said case, tried to renege on their agreement for the payment of thelatter's contingent attorney's fees by dismissing her as their counsel after shehad already won for them said case in the trial court and the Court ofAppeals, and later, by attempting to impugn the authenticity andgenuineness of their written agreement for the payment of attorney's fees, .. . ."12

He was of the opinion then that even if for purposes of said case the findingsin judicial cases could not be considered binding "it is safe to conclude, froma review of the evidence in said court proceedings taken together with theevidence before us in this case, that respondent may be exoneratedherein."13 With such a conclusion of the Solicitor General, this Court, torepeat, is in full agreement.

Counsel, any counsel, who is worthy of his hire, is entitled to be fullyrecompensed for his services. With his capital consisting solely of his brainsand with his skill, acquired at tremendous cost not only in money but in theexpenditure of time and energy, he is entitled to the protection of anyjudicial tribunal against any attempt on the part of a client to escapepayment of his fees. It is indeed ironic if after putting forth the best that is inhim to secure justice for the party he represents, he himself would not gethis due. Such an eventuality this Court is determined to avoid. It views withdisapproval any and every effort of those benefited by counsel's services todeprive him of his hard-earned honorarium. Such an attitude deservescondemnation.

There is this additional point to consider. As Cardozo aptly observed:"Reputation [in the legal profession] is a plant of tender growth, and i tsbloom, once lost, is not easily restored."14 This Court, certainly is not averseto having such a risk minimized. Where, as in this case, the good name ofcounsel was traduced by an accusation made in reckless disregard of thetruth, an action prompted by base ingratitude, the severest censure is calledfor.

Certainly, this is not to say that if a case were presented showingnonfeasance or malfeasance on the part of a lawyer, appropriate disciplinaryaction would not be taken. This is not such a case however. Respondent, ashas been so clearly shown, was in no wise culpable; there is no occasion forthe corrective power of this Court coming into play.

WHEREFORE, the charge against respondent Perpetua Coloma, member ofthe Philippine Bar, is hereby dismissed.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar and Angeles, JJ., concur.Concepcion, C.J. and Bengzon, J.P., are on leave.Sanchez and Castro, JJ., took no part.

SECOND DIVISION

[G.R. No. 120592. March 14, 1997]

TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT,petitioner, vsNATIONAL LABOR RELATIONS COMMISSION and EMMANUELNOEL A. CRUZ, respondents.

D E C I S I O N

REGALADO,J.:

Petitioner Traders Royal Bank Employees Union and privaterespondent Atty. Emmanuel Noel A. Cruz, head of the E.N.A. Cruz andAssociates law firm, entered into a retainer agreement on February 26, 1987whereby the former obligated itself to pay the latter a monthly retainer feeof P3,000.00 in consideration of the law firms undertaking to render theservices enumerated in their contract.[1]Parenthetically, said retaineagreement was terminated by the union on April 4, 1990.[2]

During the existence of that agreement, petitioner union referred toprivate respondent the claims of its members for holiday, mid-year and yearend bonuses against their employer, Traders Royal Bank (TRB). After the

appropriate complaint was filed by private respondent, the case was certifiedby the Secretary of Labor to the National Labor Relations Commission (NLRCon March 24, 1987 and docketed as NLRC-NCR Certified Case No. 0466.[3]

On September 2, 1988, the NLRC rendered a decision in the foregoingcase in favor of the employees, awarding them holiday pay differential, midyear bonus differential, and year-end bonus differential.[4]The NLRC, actingon a motion for the issuance of a writ of execution filed by privaterespondent as counsel for petitioner union, raffled the case to Labor ArbiteOswald Lorenzo.[5]

However, pending the hearing of the application for the writ oexecution, TRB challenged the decision of the NLRC before the SupremeCourt. The Court, in i ts decision promulgated on August 301990,[6]modified the decision of the NLRC by deleting the award of mid-yearand year-end bonus differentials while affirming the award of holiday pay

differential.

[7]

The bank voluntarily complied with such final judgment and

determined the holiday pay differential to be in the amounof P175,794.32. Petitioner never contested the amount thus found byTRB.[8]The latter duly paid its concerned employees their respectiveentitlement in said sum through their payroll.[9]

After private respondent received the above decision of the SupremeCourt on September 18, 1990,[10]he notified the petitioner union, the TRBmanagement and the NLRC of his right to exercise and enforce his attorneys

lien over the award of holiday pay differential through a letter dated Octobe8, 1990.[11]

Thereafter, on July 2, 1991, private respondent filed a motion beforeLabor Arbiter Lorenzo for the determination of his attorneys fees, praying

that ten percent (10%) of the total award for holiday pay differentia

computed by TRB at P175,794.32, or the amount of P17,579.43, be declaredas his attorneys fees, and that petitioner union be ordered to pay and remi

said amount to him.[12]

The TRB management manifested before the labor arbiter that theydid not wish to oppose or comment on private respondents motion as the

claim was directed against the union,[13]while petitioner union filed acomment and opposition to said motion on July 15, 1991.[14]Afteconsidering the position of the parties, the labor arbiter issued an order[15]onNovember 26, 1991 granting the motion of private respondent, as follows:

WHEREFORE, premises considered, it is hereby ordered that the TRADERSROYAL BANK EMPLOYEES UNION with offices at Kanlaon Towers, RoxasBoulevard is hereby ordered (sic) to pay without delay the attorneys fees

due the movant law firm, E.N.A. CRUZ and ASSOCIATES the amount
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of P17,574.43 or ten (10%) per cent of the P175,794.32 awarded by theSupreme Court to the members of the former.

This constrained petitioner to file an appeal with the NLRC on December 27,1991, seeking a reversal of that order.[16]

On October 19, 1994, the First Division of the NLRC promulgated aresolution affirming the order of the labor arbiter.[17]The motion forreconsideration filed by petitioner was denied by the NLRC in a resolutiondated May 23, 1995,[18]hence the petition at bar.

Petitioner maintains that the NLRC committed grave abuse ofdiscretion amounting to lack of jurisdiction in upholding the award ofattorneys fees in the amount ofP17,574.43, or ten percent (10%) ofthe P175,794.32 granted as holiday pay differential to its members, inviolation of the retainer agreement; and that the challenged resolution of theNLRC is null and void,[19]for the reasons hereunder stated.

Although petitioner union concedes that the NLRC has jurisdiction todecide claims for attorneys fees, it contends that the award for attorneys

fees should have been incorporated in the main case and not after theSupreme Court had already reviewed and passed upon the decision of theNLRC. Since the claim for attorneys fees by private respondent was neithertaken up nor approved by the Supreme Court, no attorneys fees should have

been allowed by the NLRC.

Thus, petitioner posits that the NLRC acted without jurisdiction inmaking the award of attorneys fees, as said act constituted a modification of

a final and executory judgment of the Supreme Court which did not awardattorneys fees. It then cited decisions of the Court declaring that a decisionwhich has become final and executory can no longer be altered or modifiedeven by the court which rendered the same.

On the other hand, private respondent maintains that his motion todetermine attorneys fees was just an incident of the main case wherepetitioner was awarded its money claims. The grant of attorneys fees wasthe consequence of his exercise of his attorneys lien. Such lien resultedfrom and corresponds to the services he rendered in the action wherein thefavorable judgment was obtained. To include the award of the attorneysfees in the main case presupposes that the fees will be paid by TRB to theadverse party. All that the non-inclusion of attorneys fees in the award

means is that the Supreme Court did not order TRB to pay the opposing partyattorneys fees in the concept of damages. He is not therefore precludedfrom filing his motion to have his own professional fees adjudicated.

In view of the substance of the arguments submitted by petitioner andprivate respondent on this score, it appears necessary to explain andconsequently clarify the nature of the attorneys fees subject of this petition,

in order to dissipate the apparent confusion between and the conflictingviews of the parties.

There are two commonly accepted concepts of attorneys fees, the so-called ordinary and extraordinary.[20]In its ordinary concept, an attorneysfee is the reasonable compensation paid to a lawyer by his client for the legalservices he has rendered to the latter. The basis of this compensation is thefact of his employment by and his agreement with the client.

In its extraordinary concept, an attorneys fee is an indemnity fordamages ordered by the court to be paid by the losing party in alitigation. The basis of this is any of the cases provided by law where suchaward can be made, such as those authorized in Article 2208, Civil Code,and is payable not to the lawyer but to the client, unless they have agreedthat the award shall pertain to the lawyer as additional compensation or aspart thereof.

It is the first type of attorneys fees which private respondent

demanded before the labor arbiter. Also, the present controversy stems frompetitioners apparent misperception that the NLRC has jurisdiction over

claims for attorneys fees only before its judgment is reviewed and ruled

upon by the Supreme Court, and that thereafter the former may no longerentertain claims for attorneys fees.

It will be noted that no claim for attorneys fees was filed by private

respondent before the NLRC when it acted on the money claims opetitioner, nor before the Supreme Court when it reviewed the decision othe NLRC. It was only after the High Tribunal modified the judgment of theNLRC awarding the differentials that private respondent filed his claim beforethe NLRC for a percentage thereof as attorneys fees.

It would obviously have been impossible, if not improper, for the NLRCin the first instance and for the Supreme Court thereafter to make an award

for attorneys fees when no claim therefor was pending before them. Courtgenerally rule only on issues and claims presented to them foadjudication. Accordingly, when the labor arbiter ordered the payment oattorneys fees, he did not in any way modify the judgment of the Supreme

Court.

As an adjunctive episode of the action for the recovery of bonusdifferentials in NLRC-NCR Certified Case No. 0466, private respondentpresent claim for attorneys fees may be filed before the NLRC even though

or, better stated, especially after its earlier decision had been reviewed andpartially affirmed. It is well settled that a claim for attorneys fees may beasserted either in the very action in which the services of a lawyer had beenrendered or in a separate action.[21]

With respect to the first situation, the remedy for recoveringattorneys fees as an incident of the main action may be availed of only when

something is due to the client.[22]

Attorneys fees cannot be determined untiafter the main litigation has been decided and the subject of the recovery isat the disposition of the court. The issue over attorneys fees only ariseswhen something has been recovered from which the fee is to be paid.[23]

While a claim for attorneys fees may be filed before the judgment i

rendered, the determination as to the propriety of the fees or as to theamount thereof will have to be held in abeyance until the main case fromwhich the lawyers claim for attorneys fees may arise has become

final. Otherwise, the determination to be made by the courts will bepremature.[24]Of course, a petition for attorneys fees may be filed beforethe judgment in favor of the client is satisfied or the proceeds thereodelivered to the client.[25]

It is apparent from the foregoing discussion that a lawyer has twooptions as to when to file his claim for professional fees. Hence, private

respondent was well within his rights when he made his claim and waited fothe finality of the judgment for holiday pay differential, instead of filing iahead of the awards complete resolution. To declare that a lawyer may filea claim for fees in the same action only before the judgment is reviewed by ahigher tribunal would deprive him of his aforestated options and rendeineffective the foregoing pronouncements of this Court.

Assailing the rulings of the labor arbiter and the NLRC, petitioneunion insists that it is not guilty of unjust enrichment because all attorneys

fees due to private respondent were covered by the retainer fee of P3,000.00which it has been regularly paying to private respondent under their retaineagreement. To be entitled to the additional attorneys fees as provided inPart D (Special Billings) of the agreement, it avers that there must be aseparate mutual agreement between the union and the law firm prior to theperformance of the additional services by the latter. Since there was noagreement as to the payment of the additional attorneys fees, then it i

considered waived.

En contra, private respondent contends that a retainer fee is not theattorneys fees contemplated for and commensurate to the services he

rendered to petitioner. He asserts that although there was no expressagreement as to the amount of his fees for services rendered in the case forecovery of differential pay, Article 111 of the Labor Code supplants thisomission by providing for an award of ten percent (10%) of a moneyjudgment in a labor case as attorneys fees.

It is elementary that an attorney is entitled to have and receive a jusand reasonable compensation for services performed at the special instanceand request of his client. As long as the lawyer was in good faith andhonestly trying to represent and serve the interests of the client, he shouldhave a reasonable compensation for such services.[26]It will thus beappropriate, at this juncture, to determine if private respondent is entitled to
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an additional remuneration under the retainer agreement[27]entered into byhim and petitioner.

The parties subscribed therein to the following stipulations:

x xx

The Law Firm shall handle cases and extend legal services

under the parameters of the following terms and conditions:

A. GENERAL SERVICES

1. Assurance that an Associate of the Law Firm shallbe designated and be available on a day-to-daybasis depending on the Unions needs;

2. Legal consultation, advice and render opinion onany actual and/or anticipatory situationconfronting any matter within the clients

normal course of business;

3. Proper documentation and notarization of any orall transactions entered into by the Union in its

day-to-day course of business;

4. Review all contracts, deeds, agreements or anyother legal document to which the union is aparty signatory thereto but prepared or causedto be prepared by any other third party;

5. Represent the Union in any case wherein theUnion is a party litigant in any court of law orquasi-judicial body subject to certain fees asqualified hereinafter;

6. Lia(i)se with and/or follow-up any pendingapplication or any papers with any governmentagency and/or any private institution which isdirectly related to any legal matter referred tothe Law Firm.

B. SPECIAL LEGAL SERVICES

1. Documentation of any contract and other legalinstrument/documents arising and/or requiredby your Union which do not fall under thecategory of its ordinary course of businessactivity but requires a special, exhaustive ordetailed study and preparation;

2. Conduct or undertake researches and/or studieson special projects of the Union;

3. Render active and actual participation orassistance in conference table negotiations with

TRB management or any other third person(s),juridical or natural, wherein the presence ofcounsel is not for mere consultation except CBAnegotiations which shall be subject to a specificagreement (pursuant to PD 1391 and in relationto BP 130 & 227);

4. Preparation of Position Paper(s), Memoranda orany other pleading for and in behalf of theUnion;

5. Prosecution or defense of any case instituted byor against the Union; and,

6. Represent any member of the Union in anyproceeding provided that the particular membermust give his/her assent and that prior consentbe granted by the principal officers. Further, themember must conform to the rules and policiesof the Law Firm.

C. FEE STRUCTURE

In consideration of our commitment to render the servicesenumerated above when required or necessary, your Union shallpay a monthly retainer fee of THREE THOUSAND PESOS (PHP3,000.00), payable in advance on or before the fifth day of everymonth.

An Appearance Fee which shall be negotiable on a case-to-casebasis.

Any and all Attorneys Fees collected from the adverse party by

virtue of a successful litigation shall belong exclusively to the LawFirm.

It is further understood that the foregoing shall be withoutprejudice to our claim for reimbursement of all out-of-pocketexpenses covering filing fees, transportation, publication costs,expenses covering reproduction or authentication of documentsrelated to any matter referred to the Law Firm or that whichredound to the benefit of the Union.

D. SPECIAL BILLINGS

In the event that the Union avails of the services duly enumeratedin Title B, the Union shall pay the Law Firm an amount mutuallyagreed upon PRIOR to the performance of such services. The sumagreed upon shall be based on actual time and effort spent by thecounsel in relation to the importance and magnitude of thematter referred to by the Union. However, charges may

be WAIVED by the Law Firm if it finds that time and effortsexpended on the particular services are inconsequential but suchright of waiver is duly reserved for the Law Firm.

x xx

The provisions of the above contract are clear and need no furtherinterpretation; all that is required to be done in the instant controversy is itsapplication. The P3,000.00 which petitioner pays monthly to privaterespondent does not cover the services the latter actually rendered beforethe labor arbiter and the NLRC in behalf of the former. As stipulated in Part Cof the agreement, the monthly fee is intended merely as a consideration fothe law firms commitment to render the services enumerated in Part A

(General Services) and Part B (Special Legal Services) of the retaineragreement.

The difference between a compensation for a commitment to rendelegal services and a remuneration for legal services actually rendered canbetter be appreciated with a discussion of the two kinds of retainer fees aclient may pay his lawyer. These are a general retainer, or a retaining fee,and a special retainer.[28]

A general retainer, or retaining fee, is the fee paid to a lawyer tosecure his future services as general counsel for any ordinary legal problemthat may arise in the routinary business of the client and referred to him forlegal action. The future services of the lawyer are secured and committed tothe retaining client. For this, the client pays the lawyer a fixed retainer feewhich could be monthly or otherwise, depending upon theiarrangement. The fees are paid whether or not there are cases referred tothe lawyer. The reason for the remuneration is that the lawyer is deprived o
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the opportunity of rendering services for a fee to the opposing party or otherparties. In fine, it is a compensation for lost opportunities.

A special retainer is a fee for a specific case handled or special servicerendered by the lawyer for a client. A client may have several casesdemanding special or individual attention. If for every case there is aseparate and independent contract for attorneys fees, each fee is

considered a special retainer.

As to the first kind of fee, the Court has had the occasion to expoundon its concept in Hilado vs. David[29] in this wise:

There is in legal practice what is called a retaining fee, the purpose ofwhich stems from the realization that the attorney is disabled from acting ascounsel for the other side after he has given professional advice to theopposite party, even if he should decline to perform the contemplatedservices on behalf of the latter. It is to prevent undue hardship on theattorney resulting from the rigid observance of the rule that a separate andindependent fee for consultation and advice was conceived andauthorized. A retaining fee is a preliminary fee given to an attorney orcounsel to insure and secure his future services, and induce him to act for theclient. It is intended to remunerate counsel for being deprived, by beingretained by one party, of the opportunity of rendering services to the otherand of receiving pay from him, and the payment of such fee, in the absence ofan express understanding to the contrary, is neither made nor received in

payment of the services contemplated; its payment has no relation to the

obligation of the client to pay his attorney for the services for which he has

retained him to perform. (Emphasis supplied).

Evidently, the P3,000.00 monthly fee provided in the retaineragreement between the union and the law firm refers to a general retainer,or a retaining fee, as said monthly fee covers only the law firms pledge, or as

expressly stated therein, its commitment to render the legal services

enumerated. The fee is not payment for private respondents execution orperformance of the services listed in the contract, subject to some particularqualifications or permutations stated there.

Generally speaking, where the employment of an attorney is under anexpress valid contract fixing the compensation for the attorney, suchcontract is conclusive as to the amount of compensation.[30]We cannot,

however, apply the foregoing rule in the instant petition and treat the fixedfee of P3,000.00

Legal Ethics Cases 20 - 22

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