VII. Nature and Creation of Attorney-Client Relationship

1. TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN and EDUARDO U. ESCUETA,petitioners,vs.THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and RAUL S. ROCO,respondents.Facts:The matters raised herein are an offshoot of the institution of the Complaint on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines, through the Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-gotten wealth, which includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al."Among the defendants named in the case are herein petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul S. Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as the ACCRA Law Firm). ACCRA Law Firm performed legal services for its clients, which included, among others, the organization and acquisition of business associations and/or organizations, with the correlative and incidental services where its members acted as incorporators, or simply, as stockholders. More specifically, in the performance of these services, the members of the law firm delivered to its client documents which substantiate the client's equity holdings,i.e., stock certificates endorsed in blank representing the shares registered in the client's name, and a blank deed of trust or assignment covering said shares. In the course of their dealings with their clients, the members of the law firm acquire information relative to the assets of clients as well as their personal and business circumstances.Respondent PCGG set the following conditions precedent for the exclusion of petitioners, namely: (a) the disclosure of the identity of its clients; (b) submission of documents substantiating the lawyer-client relationship; and (c) the submission of the deeds of assignments petitioners executed in favor of its client covering their respectiveshareholdings.Issue: May the petitioners invoke the attorney- client privilege in refusing to diclose the identity of their clients?Held: Yes.As a matter of public policy, a client's identity should not be shrouded in mystery.Under this premise, the general rule in our jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of this client.The reasons advanced for the general rule are well established.First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood.Second, the privilege begins to exist only after the attorney-client relationship has been established. The attorney-client privilege does not attach until there is a client.Third, the privilege generally pertains to thesubject matterof the relationship.Finally, due process considerations require that the opposing party should, as a general rule, know his adversary. "A party suing or sued is entitled to know who his opponent is."He cannot be obliged to grope in the dark against unknown forces.Notwithstanding these considerations, the general rule is however qualified by some important exceptions.1) Client identity is privileged where a strong probability exists that revealing the client's name would implicate that client in the very activity for which he sought the lawyer's advice.2) Where disclosure would open the client to civil liability; his identity is privileged.3) Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client's name is privileged.Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client's name itself has an independent significance, such that disclosure would then reveal client confidences.The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to establish said client's connection with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject matter or the substance (without which there would be not attorney-client relationship).The link between the alleged criminal offense and the legal advice or legal service sought was duly establishes in the case at bar, by no less than the PCGG itself. The key lies in the three specific conditions laid down by the PCGG which constitutes petitioners' ticket to non-prosecution should they accede thereto:(a) the disclosure of the identity of its clients;(b) submission of documents substantiating the lawyer-client relationship; and(c) the submission of the deeds of assignment petitioners executed in favor of their clients covering their respective shareholdings.From these conditions, particularly the third, we can readily deduce that the clients indeed consulted the petitioners, in their capacity as lawyers, regarding the financial and corporate structure, framework and set-up of the corporations in question. In turn, petitioners gave their professional advice in the form of, among others, the aforementioned deeds of assignment covering their client's shareholdings.There is no question that the preparation of the aforestated documents was part and parcel of petitioners' legal service to their clients. More important, it constituted an integral part of their duties as lawyers. Petitioners, therefore, have a legitimate fear that identifying their clients would implicate them in the very activity for which legal advice had been sought,i.e., the alleged accumulation of ill-gotten wealth in the aforementioned corporations.Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the words of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a . . . crime."2. In Re Sycip

FACTSTwo separate Petitions were filed before this Court 1) by the surviving partners of Atty. Alexander Sycip, who died on May 5, 1975, and 2) by the surviving partners of Atty. Herminio Ozaeta, who died on February 14, 1976, praying that they be allowed to continue using, in the names of their firms, the names of partners who had passed away. In the Court's Resolution of September 2, 1976, both Petitions were ordered consolidated.

Petitioners base their petitions on the following arguments:

1. Under the law, a partnership is not prohibited from continuing its business under a firm name which includes the name of a deceased partner; in fact, Article 1840 of the Civil Code explicitly sanctions the practice;

2. In regulating other professions, such as accountancy and engineering, the legislature has authorized the adoption of firm names without any restriction as to the use, in such firm name, of the name of a deceased partner;

3. The Canons of Professional Ethics are not transgressed by the continued use of the name of a deceased partner in the firm name of a law partnership;

4. There is no possibility of imposition or deception because the deaths of their respective deceased partners were well-publicized in all newspapers of general circulation for several days; the stationeries now being used by them carry new letterheads indicating the years when their respective deceased partners were connected with the firm; petitioners will notify all leading national and international law directories of the fact of their respective deceased partners' deaths.

5. No local custom prohibits the continued use of a deceased partner's name in a professional firm's name; there is no custom or usage in the Philippines, or at least in the Greater Manila Area, which recognizes that the name of a law firm necessarily Identifies the individual members of the firm.

6. The continued use of a deceased partner's name in the firm name of law partnerships has been consistently allowed by U.S. Courts and is an accepted practice in the legal profession of most countries in the world.

ISSUEWON it is unethical for the law firms to continue using the name a deceased partner.

HELDYES. This is not the first time that this issue has reached the Supreme Court. In the past, the Court has ordered against the practice of including a deceased partner's name in a firm name. The court said in view of the personal and confidential nature of the relations between attorney and client, and the high standards demanded in the canons of professional ethics, no practice should be allowed which even in a remote degree could give rise to the possibility of deception.

The court gave various reasons why such a practice should not be allowed. First, Article 1840 of the Civil Code may not be applied. The article cannot be applied. It primarily deals with the exemption from liability in cases of a dissolved partnership, of the individual property of the deceased partner for debts contracted by the person or partnership which continues the business using the partnership name or the name of the deceased partner as part thereof. Also, Article 1840 treats more of a commercial partnership with a good will to protect rather than of a professional partnership.

Second, a partnership for the practice of law cannot be likened to partnerships formed by other professionals or for business. A partnership for the practice of law is not a legal entity. It is a mere relationship or association for a particular purpose. It is not a partnership formed for the purpose of carrying on trade or business or of holding property." Thus, it has been stated that "the use of a nom de plume, assumed or trade name in law practice is improper. The usual reason given for different standards of conduct being applicable to the practice of law from those pertaining to business is that the law is a profession.

Third, petitioners cannot rely on Canon 33 of the Canons of Professional Ethics of the American Bar Association" in support of their petitions. It is true that Canon 33 does not consider as unethical the continued use of the name of a deceased or former partner in the firm name of a law partnership when such a practice is permissible by local custom but the Canon warns that care should be taken that no imposition or deception is practiced through this use. It must be conceded that in the Philippines, no local custom permits or allows the continued use of a deceased or former partner's name in the firm names of law partnerships. Firm names, under our custom, Identify the more active and/or more senior members or partners of the law firm.

The possibility of deception upon the public, real or consequential, where the name of a deceased partner continues to be used cannot be ruled out. A person in search of legal counsel might be guided by the familiar ring of a distinguished name appearing in a firm title.

ACCORDINGLY, the petitions filed herein are denied and petitioners advised to drop the names "SYCIP" and "OZAETA" from their respective firm names. Those names may, however, be included in the listing of individuals who have been partners in their firms indicating the years during which they served as such.

3. Daroy vs Legaspi

Facts: The evidence shows that the complainants hired the respondent in May, 1962 to represent them in the intestate proceeding for the settlement of the estate of the spouses complainants were adjudged as one of the six groups of heirs of the late Gonzaga spouses.the respondent signed as counsel for the complainants, agreed that the coconut land left by the decedents would be divided into six equal parts, that the administrator be authorized to sell the land, and that, after payment of the obligations of the estate, the net proceeds would be distributed among the six groups of heirs. The land was sold. Fermina Legaspi-Daroy came to know of the sale only when the respondent wrote a note that the same can be withdrawn but he later countermanded and directed them to go cagayan de oro, it turned out that respondent already recieved the amount of 4,000 from the sheriff Before the disbarment complaint was filed several demands were made upon the respondent to pay to the complainants the amount which he had misappropriated. He repeatedly broke his promises to make payment. As complainants' patience was already exhausted, they filed their complaint for disbarment According to respondent's version, the complainants "refused consistently to receive" the said balance from him because they wanted the full amount of P4,000. He said that he had already paid to them the sum of P2,000 and that only the sum of P476 was left in his custody. The petitioner denied such allegations.

Issue : Whether or not Atty. Legaspi be disbarred

Held: We find respondent Legaspi guilty of deceit, malpractice and professional misconduct for having misappropriated the funds of his clients. His manufactured defenses, his lack of candor and his repeated failure to appear at the investigation conducted by the City Fiscal of Iligan and at the hearings scheduled by this Court, thus causing this proceeding to drag on for a long time, demonstrate his unworthiness to remain as a member of the noble profession of law. A lawyer, under his oath, pledges himself not to delay any man for money or malice and is bound to conduct himself with all good fidelity to his clients. He is obligated to report promptly the money of his clients that has come into his possession. He should not commingle it with his private property or use it for his personal purposes without his client's consent. He should maintain a reputation for honesty and fidelity to private trust.Money collected by a lawyer in pursuance of a judgment in favor of his clients is held in trust and must be immediately turned over to them.A lawyer may be disbarred for any deceit, malpractice or other gross misconduct in his office as attorney or for any violation of the lawyer's oath The conversion of funds entrusted to an attorney is a gross violation of general morality as well as professional ethics. It impairs public confidence in the legal profession, "It deserves severe punishment"

4. Hilado vs david

Facts: Blandina Gamboa Hilado brought an action against Selim Jacob Assad to annul the sale of several houses and lot executed during the Japanese occupation by Mrs. Hilado's now deceased husband.Attorneys Ohnick, Velilla and Balonkita filed an answer on behalf of the defendant Assad.Attorneys Delgado, Dizon, Flores and Rodrigo registered counsel for the plaintiff. Attorney Francisco entered his appearance as attorney of record for the defendant in substitution for Attorney Ohnick, Velilla and Balonkita who had withdrawn from the case.Attorney Dizon, in the name of his firm, wrote Attorney Francisco urging him to discontinue representing the defendants on the ground that their client had consulted with him about her case, on which occasion, it was alleged, "she turned over the papers" to Attorney Francisco, and the latter sent her a written opinion. Evidenced by a letter in the name of Francisco and from the letter he stated that from the documents submitted of the opinion that your action against Mr. Assad will not ordinarily prosper.

Issue: Whether or not Atty. Francisco should be disqualified to represent the defendant.

Held: Yes,Attorney Francisco's law firm mailed to the plaintiff a written opinion over his signature on the merits of her case; that this opinion was reached on the basis of papers she had submitted at his office; that Mrs. Hilado's purpose in submitting those papers was to secure Attorney Francisco's professional services. Granting the facts to be no more than these, we agree with petitioner's counsel that the relation of attorney and client between Attorney Francisco and Mrs. Hilado ensued.In order to constitute the relation (of attorney and client) a professional one and not merely one of principal and agent, the attorneys must be employed either to give advice upon a legal point, to prosecute or defend an action in court of justice, or to prepare and draft, in legal form such papers as deeds, bills, contracts and the like. To constitute professional employment it is not essential that the client should have employed the attorney professionally on any previous occasion.It is not necessary that any retainer should have been paid, promised, or charged for; neither is it material that the attorney consulted did not afterward undertake the case about which the consultation was had. If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established

5. Stone v. Bank of commerce

Facts: The bill in this case was filed in 1897 by the Bank of Commerce, a citizen and resident of the City of Louisville, in the State of Kentucky,.The bill sought to perpetually enjoin the defendants from assessing the franchise or property of the complainant in any other manner than under that act.The complainant alleges in its bill that early in the year 1894, a demand was made on the part of the defendant the City of Louisville, based upon the act of 1892 and the ordinance adopted in pursuance thereof, for the payment of a license tax equal to four percent of its gross receipts into the sinking fund of the city. The banks denied their liability to pay any tax other than that provided in the Hewitt Act, and hence arose the differences between the city and the banks.from the embarrassment occasioned by their refusal to pay said license fee, the banks, with two or three exceptions, were willing to enter into an arrangement whereby they would pay a part of the amount demanded of them and lend the sinking fund the balance thereof, to be repaid, with interest at four percentum per annum, if it was finally decided and adjudged that the banks were not liable to pay said license fees."The agreement set forth in the statement of facts between the City of Louisville, the sinking fund commissioners of that city, represented by the city attorney.

Issue: Whether or not the agreement is binding.

Held: The agreement set forth in the statement of facts between the City of Louisville, the sinking fund commissioners of that city, represented by the city attorney, and the various banks of that city acting by their attorneys, was not a valid agreement within the power of an attorney at law to make. An attorney, in his capacity merely as such, has no power to make any agreement for his client before a suit has been commenced or before he has been retained to commence one, and if, under such circumstances, he assumes to act for his principal, it must be as agent, and his actual authority must appear. An equitable estoppel which would prevent the state from exercising its power to alter the rate of taxation in this case should be based upon the clearest equity, and the payment of the money under the circumstances of this case, not exceeding the amount really legally due for taxes, although disputed at the time, does not work such an equitable estoppel as to prevent the assertion of the otherwise legal rights of the city.

6. MERCEDES R. VDA. DE GUERRERO, complainant, vs.ATTY. HAROLD M. HERNANDO, respondent.

SYNOPSIS:Respondent was charged with misconduct or malpractice and with having committed misrepresentation as to exhibition of residence certificate. On the malpractice charge respondent, in an action for partition against complainant, impleaded certain persons in the case as plaintiffs although, allegedly, he was not authorized to do so. Respondent explained, however, he did so at the behest of their uncle who assured the former that said persons were interested in the subject matter of the action and that four of them had executed a special power of attorney designating the uncle as their representative. On the misrepresentation charge, respondent allegedly indicated in the jurat of a tenancy contract, as the residence certificate of an affiant, the residence certificate corresponding to another person. Respondent explained that the erroneous entry was a purely harmless, clerical or typographical error.

The Supreme Court dismissed the malpractice charge, but severely censured respondent for the falsehood which he had committed as regards to the jurat and at the same time barred or disqualified him from acting as a notary public for a period of one year.

FACTS:

This disbarment case was filed against Atty. Harold M. Hernando of Sarrat Ilocos Norte by Mercedes Hernando Reyes Vda. de Guerrero of Laoag City, a septuagenarian, who described herself as a poor, defenseless and helpless widow.

Malpractice charge. In behalf of eleven plaintiffs, Atty. Hernando filed in the CFI of Ilocos Norte a complaint for partition against Mrs. Guerrero. After the complaint was filed, seven of the plaintiffs impleaded in that case ( who are Mrs. Guerrero's cousins) filed manifestations in court, expressing their surprise because they were included as plaintiffs although they never authorized Atty. Hernando to represent them (Civil Case No. 3717-II, Ilocos Norte CFI, Mateo H. Reyes, et al vs. Mercedes R. Vda. de Guerrero). By reason of those manifestations, Mrs. Guerrero charged Atty. Hernando with misconduct or malpractice.

To refute the charge, Atty. Hernando explained that he was engaged by Mateo H. Reyes to file the complaint for partition; that Mateo directed him to include as co-plaintiffs the aforenamed persons, who are his nephew and nieces and who were interested in the subject-matter of the action; that Mateo told him that the special power of attorney of his other nieces had already been mailed and he would receive it in due course, and that after the said persons revoked the power of attorney and manifested that they were disinclined to appear as plaintiffs, he (Atty. Hernando) amended the complaint by dropping them as plaintiffs and impleading them as defendants.

The Solicitor General recommended the dismissal of the malpractice charge.

Misrepresentation as to exhibition of residence certificate. Mrs. Guerrero also charged respondent Hernando with having indicated in the jurat of a tenancy contract, as the residence certificate of Tranquilino Bernardo, the residence certificate corresponding to Antonio Raymundo. That contract was presented in evidence in the aforecited partition case.

Respondent's defense is that he asked Bernardo to produce his residence certificate; that Mateo H. Reyes interposed that he had Bernardo's residence certificate but he was not able to bring it at that time; that a week later Mateo met Atty. Hernando in front of the post office and, on that occasion, he copied the number and date appearing in Bernardo's residence certificate, and that according to the records of the internal revenue office the duplicate of said residence certificate was issued to Raymundo and the original to Bernardo.

Atty. Hernando in his answer claimed that the erroneous entry regarding the number of Bernardo's residence certificate was a "purely harmless" "clerical or topographical" (should be typographical) error which did not concern Mrs. Guerrero and which did not affect the integrity of the document.

ISSUE:

WHETHER OR NOT ATTY. HERNANDO IS GUILTY OF MISCONDUCT.

HELD:

1. On Malpractice charge- NO. Respondent was not guilty of any professional misconduct in including as plaintiffs the said persons who, by the way, had not joined Mrs. Guerrero in filing the disbarment complaint herein.. Credence can be given to his profession of good faith in including them as plaintiffs. Moreover, in a partition action all the co-owners should be joined as parties.

2. On Making it Appear in Jurat that Affiant Exhibited a Residence Certificate When in Fact did not do so.- YES. We find Atty. Hernando guilty of misconduct as a notary in making it appear in the jurat of a tenancy contract that affiant Tranquilino Bernardo exhibited to him a residence certificate when in fact he did not do so. Such misrepresentation is unquestionably censurable and justifies disciplinary action against the respondent as a member of the bar and as a notary public. The respondent violated the mandate in his attorney's oath to "obey the laws" and "do no falsehood."

Considering the irregularity committed by the respondent, we hold that he deserves a severe censure and that he should be suspended from acting as notary public for one year.

WHEREFORE, the charge of malpractice against respondent Harold M. Hernando is dismissed but he is severely censured for the falsehood which he had committed and at the same time he is barred or disqualified from acting as a notary public for a period of one year counted from notice of the entry of judgment in this case. He is warned that a more drastic punishment would be imposed on a repetition of the same anomaly.

7. William Uy vs. Atty. Fermin Gonzales

A.C. No. 5280

March 30, 2004

Ponente: Austria-Martinez, J.

Facts: Complainant purchased a parcel of land in Pangasinan from respondents (now deceased) son. Instead of registering the deed of sale, he executed a deed of voluntary land transfer to his children. Later, respondent sought to redeem the property, and gave complainant time to acquire to locate said the title for the land. After which, he demanded the delivery of the title, but the complainant only gave him photocopies of the title, that the same was transferred the title to his children, which was then misplaced and cannot be located despite efforts to locate the same. Respondent then offered to help complainant pro bono to prepare for a petition for lost title to be shouldered by complainant. When complainant failed to give funds for the filing of the said petition to respondent, the latter submitted a complaint against the former to a prosecutor for estafa through falsification of public documents. He stated therein that complainant lied about the age and place of residence of his children, that they were actually minors who live in Manila, and not in Pangasinan, and such representation was done to qualify the said children as farmer/beneficiaries, under the Land Reform Program, aside from the supporting documents falsified by complainant to acquire such title. Complainant countered, and instituted an administrative case against respondent for violation of confidentiality of their attorney-client relationship. When the case was referred to IBP, the latter received a letter from complainant, represented by Atty. Augusto Macam, that he lost interest in pursuing the complaint and requesting the same to be dismissed. IBP, however, continued, and recommended respondents suspension from practice of law for 6 months.

Issue: Does an attorney-client relationship exist between the parties in this case?

Ruling: No. It is true that, for public welfare, no investigation shall be interrupted or terminated by reason of the desistance, settlement, compromise, restitution, withdrawal of the charges, or failure of the complainant to prosecute the same since suspension or disbarment is not a civil action where no private interest is involved and no redress for grievance is afforded. And, as a rule, an attorney-client relationship is said to exist when a lawyer voluntarily permits or acquiesces with the consultation of a person, who in respect to a business or trouble of any kind, consults a lawyer with a view of obtaining professional advice or assistance. However, when personal dealings rather than practice of law is the root of the relationship, no attorney-client relationship exists. Hence, no confidentiality is violated.

In the case at bar, respondent dealt with complainant only because he redeemed a property which complainant had earlier purchased from his son. Since the complainant failed to fulfill his end of the bargain because of the alleged loss of title, it prompted respondent to offer his assistance to secure a new title. Evidently, the facts alleged in the complaint for estafa filed by respondent against complainant were obtained by respondent due to his personal dealings with complainant. Respondents immediate objective was to secure the title of the property that complainant had earlier bought from his son. Clearly, there was no attorney-client relationship between respondent and complainant. The preparation and the proposed filing of the petition was only incidental to their personal transaction. The suspension by IBP is reversed and set aside.

8. Rilloraza, Africa, De Ocampo, and Africa vs. Eastern Telecommunications Phils., Inc.

G.R. No. 104600

July 2, 1999

Ponente: Pardo, J.

Facts: On August 28, 1987, respondent was represented by law firm San Juan, Africa, Gonzales and San Agustin (SAGA), to which the latter filed a complaint for recovery of revenue shares against PLDT. Atty. Francisco Rilloraza, a partner of SAGA, appeared for respondent. When respondent rested its case, it paid SAGA P100,000.00. Almost a month later, SAGA was dissolved, and four of the junior partners therein formed the law firm Rilloraza, Africa, De Ocampo & Africa, the petitioners, which took over respondents case. The latter signed a retainer agreement with petitioners on October 1, 1987, which allows 15% attorneys fees to be collected of the property acquired or liability saved when judicial action becomes necessary to effect collection. Atty. Rilloraza continued representing the case on behalf of petitioners. Later, however, respondent wrote petitioners that the former was terminating their retainer contract on June 30, 1988. This prompted petitioners to file with the trial court a notice of attorneys lien, along with the statement that there were negotiations for compromise between respondent and PLDT. Respondent and PLDTs negotiations resulted with an amount of approximately P125 million plus P50 million. The trial court denied the enforcement of attorneys lien worth approximately P26 million (15% attorneys fees in their retainer agreement). Petitioners filed a notice of appeal with the trial court, which was also denied. Petitioners then filed a petition for certiorari with the Supreme Court, which the latter remanded to the Court of Appeals (CA). CA affirmed the trial courts decision. Hence, petitioners filed this petition for review.

Issue: Are petitioners entitled to recover approximately P26 million attorneys fees for handling the case for its client, respondent, though its services was terminated midstream and the client directly compromised the case with the adverse party?

Ruling: Yes. However, there is no merit in awarding the amount that the petitioners are claiming. Whether there is an agreement or not, the courts shall fix a reasonable compensation which lawyers may receive for their professional services. A lawyer has the right to be paid for the legal services he has extended to his client, which compensation must be reasonable. A lawyer would be entitled to receive what he merits for his services. Otherwise stated, the amount must be determined on a quantum meruit (as much as he deserved) basis. In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, which requires a full-blown trial, the elements to be considered are generally (1) the importance of the subject matter in controversy, (2) the extent of services rendered, and (3) the professional standing of the lawyer.

In the case at bar, the retainer agreement has been terminated. Furthermore, the attorney-client relationship between petitioners and respondent no longer existed during its culmination by amicable settlement. Evidently, approximately P26 million of attorneys fees is unconscionable.

Petitioners also contend that they are entitled to a charging lien under Rule 138 Section 37 of Rules of Court. However, the Court finds that for a charging lien to be enforceable as security for the payment of attorney's fees requires as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney in favor of his client. A charging lien presupposes that the attorney has secured a favorable money judgment for his client. From the facts of the case it would seem that petitioners had no hand in the settlement that occurred, nor did it ever obtain a favorable judgment for respondent. The petition is granted, reverses the decision of CA, and remands the case to trial court for determination of attorneys fees to which petitioners are entitled.

Other note/s: When a client employs the services of a law firm, he does not employ the services of the lawyer who is assigned to personally handle the case. Rather, he employs the entire law firm. Atty. Rilloza represented respondent as lawyer of SAGA (when the case was instituted), and when the latter was dissolved, as lawyer of the law firm of petitioners.

9. Government of the Philippine Islands vs. J.O. Wagner, et al.

G.R. No. L-30641

December 18, 1929

Ponente: Malcolm, J.

Facts: Respondents J.O. Wagner, Catherine Wagner, and J.J. Murphy purchased a property owned by petitioner in Baguio, and built improvements therein. The Wagners executed a written power-of-attorney authorizing Murphy to act on behalf of them, as owners of the said property. Later, however, they also sent a cablegram to Wilbur Wilson and his counsel that the latter is authorized to take all legal means protect their interest over said property. When petitioner sought to rescind the contract, the case was brought to court, with the service of notice sent to Murphy, for himself as owner of an undivided interest over the said property and for the Wagners by virtue of the power-of-attorney that the latter executed. Murphy sought the services of Atty. Walter for the case. The trial court ruled in favor or respondents. On appeal, the appellate court remanded the case to the trial court to determine the amount which petitioner should refund the respondents. When the case was returned to the trial court, the jurisdiction of the trial court was impugned by Wilbur Wilson and his counsel. The trial court overruled said objection, but permitted Wilson and his counsel to intervene to elucidate their position.

Issue: Does Murphy, along with Atty. Walter, have the right to represent himself and the Wagners in protecting their interests in the said property against the petitioner?

Ruling: Yes. A person who is made an attorney-in-fact, with the same power and authority to deal with the property which the principals might or could have had if personally present, may adopt the usual legal means to accomplish the object, including acceptance of service and engaging of counsel to preserve the ownership and possession of the principals property.

In the case at bar, Murphy had the right to represent his interest in the land in dispute. He also had the right under the power of attorney to represent the Wagners. The intention of the parties, which, as in all written instruments should prevail, was to give Murphy the same power and authority to deal with the property which the Wagners might or could have had if personally present. The usual legal means were adopted to accomplish the object. The most effective way by which Murphy could preserve the ownership and possession of his principal's property was by accepting service and by defending the rights of the absent owners in the courts. Every act of Murphy was taken for the benefit of the Wagners. Atty. Mueller handled the case for the defendants as ably and conscientiously as any attorney could have done. The cablegram constitutes a very slight basis on which to claim a revocation by the principals of the power of attorney. Moreover, to set everything aside which has taken place would prove of no benefit to the parties. The intervention is disallowed. Judgment appealed from is affirmed.

10. ORBIT TRANSPORTATION COMPANY, petitioner, vs.WORKMEN'S COMPENSATION COMMISSION and MELECIO CRESPO in behalf of minor ROSALINE CRESPO, respondents.

FACTS:

The Court administers a reprimand to counsels for petitioner for not having pleaded and instead having suppressed from their statement of the case and of the questions of law involved in the petition material facts found in the respondent commission's decision sought to be appealed from, which show the petition's lack of merit.

On June 13, 1974, Messrs. Sergio D. Vendero and Renerio R. Bartonico as counsel for petitioner filed the petition at bar for review of respondent Workmen's Compensation Commission's decision and resolution directing petitioner to pay respondent-claimant (as grandchild-dependent of the deceased driver-employee) inter alia the principal sum of P4,360.00 as compensation and burial expenses.

Upon consideration of the allegations of the petition and verifying the ratio decidendi of respondent commission's decision about which the petition was silent, the court found that material facts bearing on the petition's lack of merit had been suppressed.

In denying the petition for lack of merit, the Court accordingly in its resolution required counsel to show cause why they "should not be disciplinary dealt with for suppressing from (their) statement of the case and questions of law involved in the petition the material facts found in the Workmen's Compensation Commission's decision 'that the amount of P5,000.00 claimed to be the compensation for the death of Ramon Crespo by the respondent (herein petitioner) is the proceeds of the insurance procured by the deceased with premiums paid from the daily income of the late Ramon Crespo' and that the claim was an uncontroverted claim with the apparent intent of misleading the Court as to the merits of the petition.'"

Counsel promptly filed their "explanation and apology" on July 11, 1974. They pleaded haste and time pressure (as indeed they filed the petition at bar within the original ten-day reglementary period) and "begged forgiveness and promised to be more cautious and discreet in so filing a pleading with this Honorable Court or with any court, body or commission for that matter."

They further sought to explain that "(T)hat matter of Payment of P5,000.00 being 'the proceeds of the insurance procured by the deceased with premiums paid from the daily income of the late Ramon Crespo' and the failure to controvert the claim were never touched and argued against in said petition because first, a copy of the decision was already attached to the petition forming part thereof; secondly, if the petition were given due course, the entire records of the case would be elevated to the Honorable court for evaluation; ...."

ISSUE:

Whether or not Attys. Vendero and Bartonico, counsels of petitioner, are subject to disciplinary sanction.

HELD:

YES.

While the Court is disposed under the circumstances to be lenient and to dispose of the grave transgressions of counsel with a reprimand and warning, the Court deems this a timely occasion to remind counsel in particular and practitioners in general that time-pressure provides no justification for the suppression of material and vital facts which bear on the merit or lack of merit of a petition.

The Court has time and again stressed that members of the bar owe fidelity to the courts as well as to their clients and that they must show faithful adherence to the provisions of Rule 7, section 5 that "the signature of an attorney constitutes a certificate by him that he has read the pleading and that to the best of his knowledge, information and belief, there is good ground to support it; and that it is not interposed for delay" with the admonition therein that "for a willful violation of this rule an attorney may be subjected to disciplinary action."

The cooperation of litigants and their attorneys is required so that needless clogging of the court dockets with unmeritorious cases may be avoided leaving the courts free to devote their time and attention to meritorious and truly contentious cases. In this, the attorney plays a major role of advising his client to refrain from seeking further appellate review and action in plainly untenable cases.

Counsel's proffered excuse for their suppression of the material facts that the receipt signed by the deceased employee's heirs was in payment of the deceased's insurance (not compensation) and that respondent was entitled to the compensation award as the claim was uncontroverted, to wit, that a copy of respondent commission's decision was attached to the petition, manifestly violates the requirement of Rule 43, section 2 2 that "the petition shall contain a concise statement of the issues involved and the ground relied on for the petition ..." and that "the question raised must be distinctly set forth in the petition."

ACCORDINGLY, the Court administers a reprimand to Attys. Sergio D. Vendero and Renerio R. Bartonico with the warning that a repetition of the same or other violations of their attorney's oath will be severely dealth with. Let copies of this resolution be entered in their personal record and furnished the Integrated Bar of the Philippines.

11. ADELINO H. LEDESMA, petitioner, vs.HON. RAFAEL C. CLIMACO, Presiding Judge of the Court of First Instance of Negros Occidental, Branch I, Silay City, respondent.

FACTS:

Petitioner, on October 13, 1964, was appointed Election Registrar for the Municipality of Cadiz, Province of Negros Occidental. Then and there, he commenced to discharge its duties. As he was counsel de parte for one of the accused in a case pending in the sala of respondent Judge, he filed a motion to withdraw as such. Not only did respondent Judge deny such motion, but he also appointed him counsel de oficio for the two defendants. Subsequently, on November 3, 1964, petitioner filed an urgent motion to be allowed to withdraw as counsel de oficio, premised on the policy of the Commission on Elections to require full time service as well as on the volume or pressure of work of petitioner, which could prevent him from handling adequately the defense. Respondent Judge, in the challenged order of November 6, 1964, denied said motion. A motion for reconsideration having proved futile, hence this certiorari proceeding.

The denial by respondent Judge of such a plea, notwithstanding the conformity of the defendants, was due "its principal effect [being] to delay this case."

ISSUE:

WHETHER OR NOT THE ORDER OF RESPONDENT JUDGE IN DENYING THE MOTION OF THE PETITIONER AMOUNTS TO GRAVE ABUSE OF DISCRETION.

HELD:

NO. The Supreme Court held that It cannot be plausibly asserted that such failure to allow withdrawal of de oficio counsel could ordinarily be characterized as a grave abuse of discretion correctible by certiorari.

1. There was no incompatibility between the duty of petitioner to the accused and to the court and the performance of his task as an election registrar of the Commission on Elections and that the ends of justice "would be served by allowing and requiring Mr. Ledesma to continue as counsel de oficio, since the prosecution has already rested its case." 2. Petitioner was less than duly mindful of his obligation as counsel de oficio. He ought to have known that membership in the bar is a privilege burdened with conditions. It could be that for some lawyers, especially the neophytes in the profession, being appointed counsel de oficio is an irksome chore.

Those enrolled in its ranks are called upon to aid in the performance of one of the basic purposes of the State, the administration of justice. To avoid any frustration thereof, especially in the case of an indigent defendant, a lawyer may be required to act as counsel de oficio. The fact that his services are rendered without remuneration should not occasion a diminution in his zeal. Rather the contrary. This is not, of course, to ignore that other pressing matters do compete for his attention. After all, he has his practice to attend to. That circumstance possesses a high degree of relevance since a lawyer has to live; certainly he cannot afford either to neglect his paying cases. Nonetheless, what is incumbent upon him as counsel de oficio must be fulfilled." Thus is made manifest the indispensable role of a member of the Bar in the defense of an accused. Such a consideration could have sufficed for petitioner not being allowed to withdraw as counsel de oficio. For he did betray by his moves his lack of enthusiasm for the task entrusted to him, to put matters mildly. He did point though to his responsibility as an election registrar. Assuming his good faith, no such excuse could be availed now. There is not likely at present, and in the immediate future, an exorbitant demand on his time. It may likewise be assumed, considering what has been set forth above, that petitioner would exert himself sufficiently to perform his task as defense counsel with competence, if not with zeal, if only to erase doubts as to his fitness to remain a member of the profession in good standing.

The admonition is ever timely for those enrolled in the ranks of legal practitioners that there are times, and this is one of them, when duty to court and to client takes precedence over the promptings of self-interest.

WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner.

12. The People of the Philippines vs. George Daeng

Facts:

The defendants-appellants George Daeng, Conrado Bautista, Gerardo Abubin and Rolando Castillo were indicted for the crime of murder before the Circuit Criminal Court holding sessions in Pasig, Rizal.

All four defendants pleaded not guilty to the charge. Shortly before the trial was adjourned for another date, the trial judge addressed the following words to the defendant: I understand that you are confused and you are not ready to plead guilty to the crime charged but the court is, however, giving you today and tonight up to 8:00 o'clock in the morning tomorrow to make a soul search, concentrate and ask your heart, mind and body as to the consequence of your act because under Art. 160 of the Revised Penal Code, by virtue of the crime that you have committed, the Court has no alternative except to impose the death penalty which is the maximum penalty provided for by Art. 248 of the Revised Penal Code...

The defendants, assisted by counselde oficio, withdrew their former plea of "not guilty" and substituted that of "guilty." Allowing the change of pleas, the trial judge forthwith dictated and promulgated his decision in open court. All the four defendants were sentenced to death.

Issue: Whether or not the trial court were able to explain to the four appellants the full import and meaning of their plea of guilty.

Held: NO. The SC said that the judge's curt speech to the defendants, instructing them "to make a soul search, concentrate and ask their heart, mind and body as to the consequence of their act," falls far below the exacting standard of care with which a plea of guilty must be regarded by a trial court. The counselde oficioand the Solicitor General are one in observing that the trial court should not have rendered the decision appealed from without requiring the presentation of evidence despite the accused's plea of guilty. Indeed, as correctly pointed out by both counsels, the SC has repeatedly stressed the importance and advisability of taking evidence, in capital cases, notwithstanding the affirmative plea of the accused, for the purpose of determining his guilt and the degree of his culpability, to the end that such evidence will dispel all doubt that the accused misunderstood the nature and effects of his plea. The record of the present case does not show that the trial court directed any question to any of the accused regarding the circumstances attending the commission of the grave crime of which he is charged.

The decisiona quois set aside, and this case is hereby remanded to the court of origin for a new arraignment of the defendants George Daeng, Conrado Bautista, Gerardo Abuhin and Rolando Castillo, and for further proceedings in accordance with law and consistently with the views herein expressed.

Note:

The SC caution all courts against the frequent appointment of the same attorney as counselde oficio, for two basic reasons:first, it is unfair to the attorney concerned, considering the burden of his regular practice that he should be saddled with too manyde officiocases; and,second, the compensation provided for by section 32 of Rule 138 of the Rules of Court (a fixed fee of P500 in capital offense) might be considered by some lawyers as a regular source of income, something which the Rule does not envision. In every case, the accused stands to suffer because the overburdened counsel would have too little time to spare for hisde officiocases, and also would be inordinately eager to finish such cases in order to collect his fees within the earliest possible time.13. Gonzales vs. Chavez

Facts:

Petitioner Ramon Gonzales, as citizen taxpayer, filed a petition as a suit under Section 12, Rule 3 of the Rules of Court on the ground that the subject matters involved are common and general interest to all Filipino citizens and taxpayers as they pertain to the enforcement of a public duty and the prevention of unlawful expenditure of public funds.

The Solicitor General is the counsel for the Republic and the PCGG in 33 cases before the SC, 109 cases in the Sandiganbayan, 1 case in the NLRC and 1 in the MTC or a total of 144 cases. The SolGen withdrew as counsel in said cases through a pleading entitled Withdrawal of Appearance with Reservation.

As result of such withdrawal, the PCGG hired 40 private lawyers, 19 of whom are trial lawyers. They would receive a monthly compensation of at least P10,000.00 plus appearance fee of P1,700.00 in actual trial and/or P500.00 if trial is postponed.

Petitioner contends that since the Solicitor General's withdrawal of appearance was made without any reason, it implied that it was "within the absolute discretion" of said public official. Section 1 of Presidential Decree No. 478 and Section 35 of the Administrative Code of 1987, however, mandatorily require the Solicitor General to stand in the place of, and act for the Republic and the PCGG in court. Therefore, the Solicitor General has "no discretion to reject by withdrawing" as counsel for said entities.

Moreover, petitioner avers that the Solicitor General cannot withdraw his appearance "with reservation" nor can he file his "comment/observation on the incident/matters" after such withdrawal because by ceasing to appear as counsel, he loses his standing in court. Unless a case involves the constitutionality of a treaty, law, ordinance or executive order for which Rule 3 Section 23 of the Rules of Courtmandates his appearance, the Solicitor General is not authorized to appear therein after his withdrawal as counsel inasmuch as he himself is not a party-litigant.

The PCGG, through Commissioner Maximo A. Maceren and lawyer Eliseo B. Alampay, asserts in its comment that the scope of its authority under Executive Orders Nos. 1, 2 and 14 is broad enough to include the authority to engage the services of private lawyers, if necessary, for the fulfillment of its mandate. While such authority is not expressly stated in said executive orders, "it must be deemed necessarily implied in and subsumed under the expressly enumerated powers of the Commission."

In arguing that the instant petition should be dismissed, the OSG contends that this case has become moot and academic as this very Court had resolved to allow the withdrawal of appearance of the Solicitor General in all the cases pending before it "with reservation, conformably with PD No. 478, Executive Order No. 292. The Sandiganbayan had also resolved that "the appearance of the Solicitor General is deemed withdrawn to be substituted by the PCGG's legal panel." The OSG maintains further that the instant petition does not present a case and controversy as the petitioner himself does not even have a "court standing" and a "litigable interest." All the petitioner seeks is an "advisory opinion."

In his reply to the comments of the PCGG and the OSG, the petitioner insists that although as between the Solicitor General and the PCGG, this case may have been rendered moot and academic, as between him on the one hand and the Solicitor General and the PCGG on the other hand, a "real controversy" still exists and the issues raised herein have not ceased to exist either. Moreover, a judgment of prohibition andmandamuswould have a "practical legal effect and can be enforced."

Issues:

1. Whether or not the Solicitor General neglected his public duty by withdrawing as a counsel for the Republic of the Philippines and the Presidential Commission on Good Governance (PCGG) in cases he had filed in Court;

2. Whether or not the PCGG acted without or in excess of jurisdiction in hiring private lawyers as a result of the withdrawal of the appearance.

Held:

1. Yes. Being a public officer, the Solicitor General is "invested with some portion of the sovereign functions of the government, to be exercised by him for the benefit of the public."Another role of the Solicitor General is an officer of the Court, in which case he is called upon "to share in the task and responsibility of dispensing justice and resolving disputes;" therefore, he may be enjoined in the same manner that a special prosecutor was sought enjoined by this Court from committing any act which may tend to "obstruct, pervert or impede and degrade the administration of justice."

In the case at bar, the reason advanced by the Solicitor General for his motion to withdraw his appearance as lawyer for the PCGG is that he has been, more than once embarrassed in court and thereby made "a laughing stock in his professionalism." Examples are when the OSG lawyers betrayed ignorance in open court of certain moves taken by the PCGG, such as the lifting of a sequestration of an asset or when it was under the impression that an asset had mysteriously disappeared only to be informed that "a PCGG Commissioner had earlier by resolution authorized the disposition of said asset."

Although the OSG can, with reason, withdraw its representation even if it has already entered its appearance. The Solicitor General, as the officially-mandated lawyer of the government, is not empowered to take a similar step on the basis of a petty reason like embarrassment, as that to which the individual lawyers assigned to appear for their office were subjected. Had they not been too preoccupied with their personal feelings, they could have checked themselves in time. For a sense of professional responsibility and proper decorum would dictate that they distinguish between theinstitutionwhich, from the very beginning, had been constituted as the law office of the Government and theindividualsthrough whom its powers and duties are exercised. No emotions, of whatever kind and degree, should be allowed to becloud their high sense of duty and commitment to country and people.2. Yes. If the SC would allow such action to remain unchallenged, this could signal well the laying down of the novel and unprecedented doctrine that the representation by the Solicitor General of the Government enunciated by law is, after all, not mandatory but merely directory. Worse, that this option may be exercised on less than meritorious grounds; not on substance but on whimsy, depending on the all too human frailties of the lawyers in the OSG assigned to a particular case.

The SC is firmly convinced that, considering the spirit and the letter of the law, there can be no other logical interpretation of Sec. 35 of the Administrative Code than that it is, indeed, mandatory upon the OSG to "represent the Government of the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation or matter requiring the services of a lawyer."

There need be no proof adduced that the petitioner has a personal interest in the case, as his petition is anchored on the right of the people, through the PCGG and the Republic, to be represented in court by the public officer duly authorized by law. The requirement of personal interest is satisfied by the mere fact that the petitioner is a citizen and hence, part of the public which possesses the right.

The petition for a writ ofmandamusis hereby granted. The Solicitor General is directed to immediately re-enter his appearance in the cases wherein he had filed a motion to withdraw appearance and the PCGG shall terminate the services of the lawyers it had employed but not before paying them the reasonable fees due them in accordance with rules and regulations of the Commission on Audit.

14. Pedro Oparel, Sr. vs. Atty. Dominador Abaria

Facts:

Pedro Oparel, Sr. who identified himself as pauper in his complaint filed an administrative case against respondent Dominador Abaria, a member of the Philippine Bar. The charge was that the respondent whose services were retained to assist complainant recover damages from his employer for injuries suffered, acted dishonestly. Apparently, a settlement was reached, complainant having been made to sign a receipt in the sum of P500.00 for his claim, out of which was deducted P55.00 as attorney's fees, when the truth, according to the complaint, was that respondent did receive the much larger amount of P5,000.00.

In a resolution, the respondent in his answer alleged that the complaint was "irresponsible, baseless and should not merit even the scantiest consideration" of the Court and that the complainant was asking only for P200.00, he was able to secure a settlement from the employer in the sum of P500.00, admitting that he was given as fees the aforesaid amount of P55.00. He accounted for the alleged sum of P5,000.00 by stating that P3,500 was spent by the employer for plaintiff's operation and medical bills, another P1,000.00 given to complainant's family during his confinement in the hospital, and then the P500.00 received in cash by way of additional settlement. He prayed that the complaint be dismissed.

Later on, the complainant manifested that he was no longer interested in pushing through his complaint against respondent. In his affidavit of desistance, he admitted that the administrative charge arose out of a misunderstanding between him and respondent. The Solicitor General agreed with such a recommendation and prayed that the case be dismissed.

Held: The SC said that while it appears that under the circumstances no case lies against respondent Dominador Abaria, it is not amiss to impress on members of the Bar that the utmost care be taken to minimize occasions for any misunderstanding between them and their clients. The relationship being one of confidence, there is ever present the need for the latter being adequately and fully informed of the mode and manner in which their interest is defended. They should not be left in the dark. They are entitled to the fullest disclosure of why certain steps are taken and why certain matters are either included or excluded from the documents they are made to sign. It is only thus that their faith in counsel may remain unimpaired.

In the case, the client happens to be poor and unlettered, seeking to enforce what he considers his just demands against an employer, it is even more imperative that matters be explained to him with all precision and clarity. More than that, no effort should be spared for him to get fully what he is entitled to under the law. The same zeal should characterize a lawyer's efforts as when he is defending the rights of property. As it is, there is even the fear that a lawyer works harder when he appears for men of substance. To show how unfounded is such a suspicion, he must exert his utmost, whoever be his client.

More specifically, he should not invite loss of trust by inadvertence or even by a failure to use the simplest and most understandable language in communicating matters. For he may lend himself to the suspicion that he is lacking in candor and may be taking undue advantage of his client for his own profit and advantage in any dealing with the adverse party. At any rate, with complainant having been satisfied with the explanation of respondent, he could not be justly charged of being recreant to his trust for personal gain. The dismissal of this case is therefore warranted.

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