PROBLEM AREA IN LEGAL ETHICS

Attorneys Fees and Compensation for Legal Services

Submitted to: Atty. Rodel V. Capule Submitted by: De Rivera, Ana Hendrika Fulgado, Nathaniel Pascua, Jettner

2nd Semester, A ! 2"#$%2"#& ntroduction

T'ere is ( )ommon s(yin* t'(t money is the root cause of all evil, but money is +ery ne)ess(ry (nd indis,ens(b-e be)(use .it'out it t'e e)onomies o/ (-- n(tions in t'e .or-d .i-- )ert(in-y )o--(,se0 (nd t'(t in)-udes t'e -e*(- ,ro/ession 1 Ho.e+er, i/ t'e -e*(,ro/ession is to 'onor its res,onsibi-ities to ,ub-i) ser+i)e, it is essenti(- t'(t t'e so)iety, .'i)' it ser+es, s'ou-d not +ie. t'e ,ro/ession(- (bi-ities o/ -(.yers (s re,resentin* (+(ri)ious (nd ,ure-y ,erson(- e//orts to obt(in .e(-t' Inste(d, t'e *o(- o/ t'e ,ro/ession s'ou-d be to im,(rt to (-- se*ments o/ so)iety t'e underst(ndin* t'(t -(.yers (re ,rim(ri-y de+oted to ,ub-i) ser+i)e (nd to t'e ,ursu(n)e o/ 1usti)e (nd (re (--o.ed )om,ens(tion )ommensur(te .it' ,ro/ession(- e//orts
2

2'i-e doin* my ,(rt o/ t'is rese(r)' ,(,er, one o/ my )ousins (s3ed me Is it true that attorneys fees are paid by the losing party? And I 4ui)3-y re,-ied, 5Well, not necessarily, only if its awarded by the court as damages And 'e s(id, Oh, I think I read it somewhere before, maybe it pertained to another country 6 T'(t e+enin*, I de)ided to rese(r)' ( bit more (bout t'e (ttorney7s /ees in ot'er )ountries (nd true enou*', my )ousin .(s ri*'t: In t'e 8nited St(tes, t'e *ener(- ru-e 9)(--ed t'e merican !ule6: is t'(t e()' ,(rty ,(ys on-y t'eir o.n (ttorney;s /ees, re*(rd-ess o/ .'et'er t'ey .in or -ose T'is (--o.s ,eo,-e to brin* )(ses (nd -(.suits .it'out t'e /e(r o/ in)urrin* e<)essi+e )osts i/ t'ey -ose t'e )(se un-ess t'e -(. ,ro+ides /or e<)e,tions As in t'e re)ent pple v" #amsung ,(tent )(se, A,,-e is )-(imin* reimbursement o/ bi--ions o/ do--(rs t'ey s,ent on (ttorney7s /ees /rom S(msun* )-(imin* t'(t '(d t'e -(tter res,e)ted t'eir br(nd0 t'ey .ou-dn7t '(+e /i-ed ( suit (*(inst t'em (nd 'ired t'e ser+i)es o/ t'eir -(.yers In )ontr(st, in En*-(nd (nd ot'er )ountries, t'e -osin* side is o/ten re4uired to ,(y t'e ot'er side;s (ttorney;s /ees (/ter -osin* ( tri(- $ Here in t'e P'i-i,,ines, t'ere (re t.o m(in )on)e,ts re*(rdin* (ttorney7s /ees0 n(me-y:
1. 2.

Ordin(ry0 (nd E<tr(ordin(ry

In its ordin(ry )on)e,t, (n (ttorney7s /ee is t'e re(son(b-e )om,ens(tion ,(id to ( -(.yer /or t'e -e*(- ser+i)es 'e '(s rendered to ( )-ient T'e b(sis o/ t'is )om,ens(tion is t'e /()t o/ em,-oyment by t'e )-ient In its e<tr(ordin(ry )on)e,t, (n (ttorney7s /ee is (n indemnity /or d(m(*es ordered by t'e )ourt to be ,(id by t'e -osin* ,(rty to t'e ,re+(i-in* ,(rty in -iti*(tion T'e b(sis o/ t'is is (ny o/ t'e )(ses (ut'ori=ed by -(. (nd is ,(y(b-e not to t'e -(.yer but to t'e )-ient > un-ess t'ey '(+e (*reed t'(t t'e (.(rd s'(-- ,ert(in to t'e -(.yer (s (ddition()om,ens(tion or (s ,(rt t'ereo/ $ypes of the lawyers fees paid to attorneys are varied, among these are%
1. Flat !ee Attorney7s ?ees (nd L(. Pr()ti)e, #st Edition, Ri)(rdo B Terue-, 2""@ 8ni+ersity o/ A-(b(m( S)'oo- o/ L(. Ao- 2 Arti)-e @ 'tt,:BB... no-o )omB-e*(-%en)y)-o,edi(B(ttorney%/ees%does%-osin*%side%$"$$C 'tm-

# 2 $ 2

%( ,re)ise )'(r*e /or ,er/ormin* one de/ined -e*(- 1ob 2. Hourly !ee %)ommon-y bi--ed ())ordin* to t'e time ( ,(rti)u-(r m(tter t(3es to )om,-ete 3. Contingent !ee %/ee ,(id out o/ t'e re)o+ery ( )-ient re)ei+es on t'e )(se 4. Percentage !ee %it is .'en ( -(.yer is ,(id ( s,e)i/i) ,er)ent(*e o/ t'e +(-ue o/ t'e est(te 5. Retainer %it is t'e ()t o/ t'e )-ient by .'i)' 'e em,-oys (n (ttorney to m(n(*e /or 'im ( )(use to .'i)' 'e is ( ,(rty, or ot'er.ise to (d+ise 'im (s )ounse- 9eit'er *ener(- or s,e)i(-: 6. Acceptance !ee %/ee )'(r*ed by (n (ttorney si*ni/yin* 'is (*reement to '(nd-e t'e ,(rti)u-(r )(se or en*(*ement to t'e ,(rti)u-(r )-ient see3in* 'is -e*(- ser+i)es %t'is is se,(r(te (nd inde,endent /rom t'e tot(-ity o/ t'e (ttorney7s /ees /or ser+i)es to be ()tu(--y rendered in t'e )ondu)t o/ t'e -iti*(tion 7. "o#ili$ation e%penses %(mount o/ money de,osited .it' t'e (ttorney to be used /or tr(+e-, tr(ns,ort(tion (nd (--ied e<,enses to *o to ( ,(rti)u-(r *o+ernment o//i)e /or t'e ,ur,ose o/ se)urin* do)uments (nd ot'er ,(,ers t'(t s'(-- be uti-i=ed in t'e )ondu)t o/ (n ())e,ted -iti*(tion or (n ())e,ted undert(3in* to be done /or ( ,(rti)u-(r )-ient

Pertinent Provisions o! the &a' C(non 2" o/ t'e Code o/ Pro/ession(- Res,onsibi-ity ,ro+ides t'(t: lawyer shall charge only fair and reasonable fees" T'ere is, 'o.e+er, no '(rd (nd /(st ru-e .'i)' .i-- ser+e (s *uide in determinin* .'(t is or .'(t is not ( re(son(b-e /ee T'(t must be determined /rom t'e /()ts o/ e()' )(se T'e ,o.er to determine t'e re(son(b-eness or t'e un)ons)ion(b-e )'(r()ter o/ ( -(.yer7s /ee is ( m(tter /(--in* .it'in t'e re*u-(tory ,rero*(ti+e o/ t'e Court &

In (ddition to t'e (/orementioned C(non, Ru-e #$D Se)tion 2& o/ t'e Ru-es o/ Court (-so ,ro+ide t'(t: n attorney shall be entitled to have and recover from his clients no more than a & $
!oldan vs" &ourt of ppeals, G R No @C""E, ?ebru(ry @, #@@$

reasonable compensation for his services, with a view to the importance of the sub'ect matter of the controversy, the e(tent of the services rendered, and the professional standing of the attorney" It is (-so ,ro+ided t'(t t'e )ourt is not bound by t'e o,inion o/ (ttorneys (s e<,ert .itnesses (s to ,ro,er )om,ens(tion (nd t'(t .ritten )ontr()t s'(-- )ontro- t'e (mount ,(id un-ess /ound by t'e )ourt to be un)ons)ion(b-e or re(son(b-e (rder o! Pre!erence in the Deter)ination o! Attorney*s Fees
1.

Contr()t 9(*reement by -(.yer F )-ient:

2 5)uantum *eruit6 9(s mu)' (s 'e deser+es: $ Court 9Attorney7s /ees (s G(m(*es: Contract !or &egal +ervices T'ere must be ( ,rior (*reement .it' t'e )-ient be/ore t'e )ommen)ement o/ (ny .or30 t'is s'ou-d (,,-y to ne. )(ses bot' /rom ne. (nd o-d )-ients T'e (*reement must in)-ude (n estim(te o/ t'e ,ossib-e (nd ,rob(b-e tot(- )ost o/ t'e )(se or .or3 T'ere (re t.o m(in (d+(nt(*es o/ ( .ritten )ontr()t, n(me-y: t'(t it is )on)-usi+e (s to t'e (mount o/ )om,ens(tion (nd in )(se o/ un1usti/ied dismiss(- o/ (n (ttorney, 'e s'(-be entit-ed to re)o+er /rom t'e )-ient /u-- )om,ens(tion sti,u-(ted in t'e )ontr()t H T'e -(.yer, (t t'e e(r-iest o,,ortunity, must dis)uss t'e m(tter o/ /ees .it' t'e )-ient (/ter t'e o+er(-- ,re-imin(ry )on/eren)e bet.een t'em on (-- /()ets o/ t'e -iti*(tion 2'en t'ere is (n e<,ress )ontr()t ,ro+idin* /or t'e (ttorney7s /ees, it s'(-- be /o--o.ed Ho.e+er, t'ere (re )ert(in situ(tions .'en t'e -(.yer )(nnot re)o+er t'e /u-- (mount des,ite t'e e<isten)e o/ ( .ritten )ontr()t, n(me-y: # 2'en t'e ser+i)es )(--ed /or .ere not ,er/ormed (s .'en t'e -(.yer .it'dre. be/ore t'e )(se .(s /inis'ed0 'e s'(-- be entit-ed but on-y (s to re(son(b-e /ees 2 2'en t'ere is ( 1usti/ied dismiss(- o/ t'e (ttorney, t'e )ontr()t .i-- be nu--i/ied (nd ,(yment .i-- be on t'e b(sis o/ +uantum meruit6 on-y A )ontr(ry sti,u-(tion .i-- be in+(-id $ 2'en t'e sti,u-(ted (ttorney7s /ees (re un)ons)ion(b-e i e 'um(n )ons)ien)e & 2'en t'e sti,u-(ted (ttorney7s /ees (re in e<)ess o/ .'(t is e<,ress-y ,ro+ided by -(. H &
Re,ub-i) A)t No E$E

.'en it is

dis,ro,ortion(te )om,(red to t'e +(-ue o/ ser+i)es rendered (nd is re+o-tin* to

2'en t'e -(.yer is *ui-ty o/ /r(ud or b(d /(it' to.(rd 'is )-ient in t'e m(tter o/ 'is em,-oyment

E C D

2'en t'e )ounse-7s ser+i)es (re .ort'-ess be)(use o/ 'is ne*-i*en)e 2'en )ontr()t is i--e*(-, (*(inst mor(-s or ,ub-i) ,o-i)y Ser+in* (d+erse interest un-ess -(.yer ,ro+es t'(t it .(s .it' t'e )onsent o/ bot' ,(rties

Right to Co)pensation 'ithout a Contract In t'e (bsen)e o/ (n e<,ress )ontr()t I/or (ttorney7s /eeJ, ,(yment o/ (ttorney7s /ees m(y be 1usti/ied by +irtue o/ t'e innomin(te )ontr()t o/ facio ut des ,I do and you give:, .'i)' is b(sed on t'e ,rin)i,-e t'(t no one shall enrich himself at the e(pense of anotherE ,asis o! Attorney*s Fees !ule -."./" A -(.yer s'(-- be *uided by t'e /o--o.in* /()tors in determinin* 'is /ees:
1.

T'e time s,ent (nd t'e e<tent o/ t'e ser+i)es rendered or re4uired0 T'e no+e-ty (nd di//i)u-ty o/ t'e 4uestions in+o-+ed0 T'e im,ort(n)e o/ t'e sub1e)t m(tter0 T'e s3i-- dem(nded0 T'e ,rob(bi-ity o/ -osin* ot'er em,-oyment (s ( resu-t o/ ())e,t(n)e o/ t'e ,ro//ered )(se0 T'e )ustom(ry )'(r*es /or simi-(r ser+i)es (nd t'e s)'edu-e o/ /ees o/ t'e IBP )'(,ter to .'i)' 'e be-on*s0 T'e (mount in+o-+ed in t'e )ontro+ersy (nd t'e bene/its resu-tin* to t'e )-ient /rom t'e ser+i)es0 T'e )ontin*en)y o/ )ert(inty o/ )om,ens(tion0 T'e )'(r()ter o/ t'e em,-oyment, .'et'er o))(sion(- or est(b-is'ed0 (nd T'e ,ro/ession(- st(ndin* o/ t'e -(.yer

2 $ & H

D @ #"

Aside /rom t'ose ,ro+ided under Ru-e 2" "#, t'e (mount )'(r*ed by t'e -(.yer is b(sed on m(ny ,remises (nd /()tors .'i)' in)-ude e<,erien)e, re,ut(tion, s,e)i(-i=(tion, (d+(n)e studies (nd e)onomi) or m(r3et )onditions in t'e (re( o/ t'e -(.yer7s ,r()ti)e -uantu) "eruit 9as much as he deserves:

E H

Cor,u= + CA, G R No L%&"&2&, Kune $", #@D"

T'is is t'e b(sis o/ determinin* t'e -(.yer7s ,ro/ession(- /ees in t'e (bsen)e o/ ( )ontr()t, but re)o+er(b-e by 'im /rom t'e )-ient He s'(-- be entit-ed to re)ei+e .'(t 'e merits /or 'is ser+i)es It is (ut'ori=ed .'ere: ( T'ere is no e<,ress )ontr()t /or (ttorney7s /ees (*reed u,on bet.een t'e -(.yer (nd t'e )-ient0 b 2'en (-t'ou*' t'ere is ( /orm(- )ontr()t o/ (ttorney7s /ees, t'e sti,u-(ted /ees (re /ound un)ons)ion(b-e or unre(son(b-e by t'e )ourt0 ) 2'en t'e )ontr()t /or (ttorney7s /ees is +oid due to ,ure-y /orm(- m(tters or de/e)ts o/ e<e)ution0 d e / 2'en t'e )ounse-, /or 1usti/i(b-e )(use, .(s not (b-e to /inis' t'e )(se to its )on)-usion0 2'en -(.yer (nd )-ient disre*(rd t'e )ontr()t o/ (ttorney7s /ees 2'en t'ere is ( )ontr()t but no sti,u-(tion (s to (ttorney7s /ees .uides in Deter)ining Attorney*s Fees in Quantum Meruit ,asis ( /i)e spent and e%tent o! the services rendered A -(.yer is 1usti/ied in /i<in* 'i*'er /ees .'en t'e )(se is so )om,-i)(ted (nd re4uires more time (nd e//orts to /inis' it b Novelty and di!!iculty o! 0uestions nvolved 2'en t'e 4uestions in ( )(se (re no+e- (nd di//i)u-t, *re(ter e//orts, dee,er study (nd rese(r)', (re bound to burn t'e -(.yer7s time (nd st(min( )onsiderin* t'(t t'ere (re no -o)(- ,re)edents to re-y u,on ) )portance o! +u#1ect "atter T'e more im,ort(nt t'e sub1e)t m(tter or t'e bi**er +(-ue o/ t'e interest or ,ro,erty in -iti*(tion, t'e 'i*'er is t'e (ttorney7s /ee d +kill de)anded o! the &a'yer T'e tot(-ity o/ t'e -(.yer7s e<,erien)e ,ro+ides 'im t'e s3i-- (nd )om,eten)e (dmired in -(.yers Attorney*s Fees as Da)ages Gener(- Ru-e: Attorney7s /ees (s d(m(*es (re not re)o+er(b-e An (d+erse de)ision does not ipso facto E

1usti/y t'eir (.(rd in /(+or o/ t'e .innin* ,(rty E<)e,tions: Attorney7s /ees in t'e )on)e,t o/ d(m(*es m(y be (.(rded in (ny o/ t'e /o--o.in* )ir)umst(n)es:
1. 2. 3. 4. 5. 6. 7. 8. 9.

.'en t'ere is no (*reement0 .'en e<em,-(ry d(m(*es (re (.(rded0 .'en de/end(nt7s ()tion or omission )om,e--ed ,-(inti// to -iti*(te0 in )rimin(- )(ses o/ m(-i)ious ,rose)ution0 .'en t'e ()tion is )-e(r-y un/ounded0 .'en de/end(nt ()ted in *ross (nd e+ident b(d /(it'0 in ()tions /or su,,ort0 in )(ses o/ re)o+ery o/ .(*es0 in ()tions /or indemnity under .or3men7s )om,ens(tion (nd em,-oyee7s -i(bi-ity -(.s0

10. 11.

in ( se,(r(te )i+i- ()tion (risin* /rom ( )rime0 .'en (t -e(st doub-e )osts (re (.(rded 9)osts o/ suit does not in)-ude (ttorney7s /ees:0

12. 13.

.'en t'e )ourt deems it 1ust (nd e4uit(b-e0 (nd.'en ( s,e)i(- -(. so (ut'ori=e

Contingent Fee A )ontin*ent /ee )ontr()t is one .'i)' sti,u-(tes t'(t t'e -(.yer .i-- be ,(id /or 'is -e*(ser+i)es on-y i/ t'e suit or -iti*(tion ends /(+or(b-y to t'e )-ient C Art #&@# o/ t'e Ci+i- Code ,ro'ibits t'e s(-e or (ssi*nment bet.een t'e -(.yer (nd 'is )-ient, o/ ,ro,erty .'i)' is t'e sub1e)t o/ -iti*(tion D Ho.e+er, 5A )ontr()t /or ( )ontin*ent /ee is not )o+ered by Art #&@# be)(use t'e tr(ns/er or (ssi*nment o/ t'e ,ro,erty must t(3e ,-()e durin* t'e ,enden)y o/ t'e -iti*(tion (nd t(3es e//e)t on-y (/ter t'e /in(-ity o/ ( /(+or(b-e 1ud*ment !ule -.".-"
C D

lawyer shall, in cases of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed" 2'en t.o or more -(.yers re,resentin* )ommon )-ients '(+e ( ,ro/ession(- bre(3%u, durin* t'e ,enden)y o/ t'e )(se, t'eir (ttorney7s /ees s'(-- be s'(red in (mounts to be determined by t'e )ourt @ !ule -.".0" lawyer shall not, with the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client" T'e on-y e<)e,tion .'ereby ( -(.yer m(y re)ei+e re-(ti+e )om,ens(tion /rom ( ,erson ot'er t'(n 'is )-ient is .'en t'e -(tter '(s /u-- 3no.-ed*e (nd (,,ro+(- t'ereo/ #" 2n!orce)ent o! Attorney*s Fees Ru-e 2" "& lawyer should avoid the filing of any case against clients for the enforcement of his attorneys fees e(cept to prevent%
a. b. c.

imposition in'unction fraud

T'e -(.yer m(y /i-e 1udi)i(- ()tions to re)o+er (ttorney7s /ees in eit'er o/ t.o .(ys: t'rou*' (n (,,ro,ri(te motion or ,etition (s (n in)ident in t'e m(in ()tion .'ere 'e rendered -e*(- ser+i)es0 or ( se,(r(te )i+i- ()tion /or )o--e)tion o/ (ttorney7s /ees An inde,endent )i+i- ()tion to re)o+er (ttorney7s /ees is ne)ess(ry .'ere:
1. 2.

T'e m(in ()tion is dismissed or not'in* is (.(rded0 T'e )ourt '(s de)ided t'(t it '(s no 1urisdi)tion o+er t'e ()tion or '(s (-re(dy -ost it0

3. 4.

T'e ,erson -i(b-e /or (ttorney7s /ees is not ( ,(rty to t'e m(in ()tion0 T'e )ourt reser+ed to t'e -(.yer t'e ri*'t to /i-e ( se,(r(te )i+i- suit /or re)o+ery o/ (ttorney7s /ees0

5. @ #"

T'e sub1e)t ser+i)es (re not )onne)ted .it' t'e sub1e)t -iti*(tion0 (nd

6.

T'e 1ud*ment debtor '(s /u--y ,(id t'e 1ud*ment )reditor (nd t'e -(.yer '(s not t(3en (ny -e*(- ste, to '(+e 'is /ees ,(id dire)t-y to 'im /rom t'e 1ud*ment ,ro)eeds

Co)pensation to 'hich &a'yer is 2ntitled Depending on His Capacity

1.

&ounsel de 1arte > He is entit-ed to ( re(son(b-e (ttorney7s /ees (*reed u,on or in t'e (bsen)e t'ereo/, on 54u(ntum meruit6 b(sis

2.

&ounsel de Officio > T'e )ounse- m(y not dem(nd /rom t'e ())used (ttorney7s /ees e+en i/ 'e .ins t'e )(se He m(y 'o.e+er )o--e)t /rom t'e *o+ernment /unds i/ (+(i-(b-e b(sed on t'e (mount /i<ed by t'e )ourt

3.

micus &uriae > He is not entit-ed to (ttorney7s /ees

$he law prohibits the charging of attorneys fees in the following circumstances%
1. 52'en

t'e e<e)utor or (dministr(tor is (n (ttorney, 'e s'(-- not )'(r*e (*(inst t'e

est(te (ny ,ro/ession(- /ees /or -e*(- ser+i)es rendered by 'im 611
2.

5No (ttorney7s /ees, ne*oti(tion /ees or simi-(r )'(r*es o/ (ny 3ind (risin* /rom (ny )o--e)ti+e b(r*(inin* ne*oti(tions or )on)-usions o/ ( )o--e)ti+e (*reement s'(-- be im,osed on (ny member o/ t'e )ontr()tin* union Any )ontr()t, (*reement or (rr(n*ements o/ (ny sort to t'e )ontr(ry s'(-- be nu-- (nd +oid 1260 (nd

3.

No (ttorney ,ursuin* or in )'(r*e o/ t'e ,re,(r(tion o/ /i-in* o/ (ny )-(im /or bene/it under t'e ,ro+isions o/ t'e L(bor Code o/ t'e P'i-i,,ines re-(ti+e to Em,-oyees7 Com,ens(tion s'(-- dem(nd or )'(r*e /or 'is ser+i)e (ny /ee, (nd (ny sti,u-(tion to t'e )ontr(ry s'(-- be nu-- (nd +oid 13

Counsels not entitled to !ees

1. 2. 3.

Counse- de o//i)io un-ess )ourt orders )om,ens(tion14 PAO -(.yers )(nnot )o--e)t /rom -iti*(nts0 Lo)(- e-e)ti+e o//i)i(-s (,,e(rin* in ( ,ro+in)i(-B)ityBmuni)i,(- tribun(-s or (dministr(ti+e (*en)ies o/ ,ro+in)eB)ityBmuni)i,(-ity o/ .'i)' 'e is (n e-e)ti+e o//i)i(-

## #2 #$ #&

Recent Supreme Court decisions involving Attorneys Fees: ,alta$ar v. Atty. ,a3e$ Jr., 4 A.C. No. 5657 4 77 Dec 8679 Facts Com,-(in(nts (re t'e o.ners o/ t'ree ,(r)e-s o/ -(nd -o)(ted in Gin(-u,i'(n, B(t((n On & Se,tember 2""2, t'ey entered into (n (*reement .it' Gerry R ?e+id(- 9?e+id(-:, ( subdi+ision de+e-o,er In t'(t (*reement, t'ey stood to be ,(id P$H,""",""" /or (-- t'e -ots t'(t .ou-d be so-d in t'e subdi+ision ?or t'(t ,ur,ose, t'ey e<e)uted ( S,e)i(- Po.er o/ Attorney (ut'ori=in* ?e+id(- to enter into (-- (*reements )on)ernin* t'e ,(r)e-s o/ -(nd (nd to si*n t'ose (*reements on t'eir be'(-/

#"

?e+id(- did not u,d(te )om,-(in(nts (bout t'e st(tus o/ t'e subdi+ision ,ro1e)t (nd /(i-ed to ())ount /or t'e tit-es to t'e subdi+ided -(nd Com,-(in(nts (-so /ound t'(t 'e '(d so-d ( number o/ ,(r)e-s to t'ird ,(rties, but t'(t 'e did not tum t'e ,ro)eeds o+er to t'em T'us, on 2$ Au*ust 2""H, t'ey re+o3ed t'e S,e)i(- Po.er o/ Attorney t'ey '(d ,re+ious-y e<e)uted in 'is /(+or Com,-(in(nts subse4uent-y (*reed to sett-e .it' ?e+id(- /or t'e (mount o/ #",""",""", but t'e -(tter (*(in /(i-ed to ,(y t'em Com,-(in(nts en*(*ed t'e ,ro/ession(- ser+i)es o/ res,ondent /or t'e ,ur,ose o/ (ssistin* t'em in t'e ,re,(r(tion o/ ( sett-ement (*reement Inste(d o/ dr(/tin* ( .ritten sett-ement, res,ondent en)our(*ed t'em to institute ()tions (*(inst ?e+id(- in order to re)o+er t'eir ,ro,erties Com,-(in(nts t'en si*ned ( )ontr()t o/ -e*(- ser+i)es, in .'i)' it .(s (*reed t'(t t'ey .ou-d not ,(y ())e,t(n)e (nd (,,e(r(n)e /ees to res,ondent, but t'(t t'e do)3et /ees .ou-d inste(d be s'(red by t'e ,(rties 8nder t'e )ontr()t, )om,-(in(nts .ou-d ,(y res,ondent H"L o/ .'(te+er .ou-d be re)o+ered o/ t'e ,ro,erties Me(n.'i-e, on be'(-/ o/ )om,-(in(nts, (nd (/ter sendin* ?e+id(-( dem(nd -etter, res,ondent /i-ed ( )om,-(int /or (nnu-ment, )(n)e--(tion (nd re+(-id(tion o/ tit-es, (nd d(m(*es (*(inst ?e+id(- be/ore t'e Re*ion(- Tri(- Court 9RTC: o/ B(t((n Com,-(in(nts /ound it '(rd to .(it /or t'e out)ome o/ t'e ()tion T'us, t'ey termin(ted t'e ser+i)es o/ res,ondent on D Kune 2""C, .it'dre. t'eir )om,-(int (*(inst ?e+id(- on @ Kune 2""C, (nd /in(-i=ed t'eir (mi)(b-e sett-ement .it' 'im on H Ku-y 2""C Res,ondent /i-ed ( M(ni/est(tion (nd O,,osition t'e RTC, (--e*in* t'(t t'e termin(tion o/ 'is ser+i)es (nd .it'dr(.(- o/ t'e )om,-(int '(d been done .it' t'e intent o/ de/r(udin* )ounse- On t'e s(me d(te, 'e /i-ed ( Motion /or Re)ordin* o/ Attorney7s C'(r*in* Lien in t'e Re)ords o/ t'e Abo+e%C(,tioned C(ses Ruling Res,ondent )(nnot be /(u-ted /or (d+isin* )om,-(in(nts to /i-e (n ()tion (*(inst ?e+id(to re)o+er t'eir ,ro,erties, inste(d o/ (*reein* to ( sett-ement o/ #",""",""" > ( me(s-y (mount )om,(red to t'(t in t'e ori*in(- (*reement, under .'i)' ?e+id(- undertoo3 to ,(y )om,-(in(nts t'e (mount o/ $H,""",""" L(.yers '(+e ( s.orn duty (nd res,onsibi-ity to ,rote)t t'e interest o/ (ny ,ros,e)ti+e )-ient (nd ,ursue t'e ends o/ 1usti)e Any -(.yer .ort' 'is s(-t .ou-d (d+ise )om,-(in(nts (*(inst t'e (buses o/ ?e+id(- under t'e )ir)umst(n)es, (nd .e )(nnot )ounten(n)e (n (dministr(ti+e )om,-(int (*(inst ( -(.yer on-y be)(use 'e ,er/ormed ( duty im,osed on 'im by 'is o(t' T'e )-(im o/ )om,-(in(nts t'(t t'ey .ere not in/ormed o/ t'e st(tus o/ t'e )(se is more (,,ro,ri(te-y -(id (t t'eir door r(t'er t'(n (t t'(t o/ res,ondent He .(s ne+er in/ormed t'(t t'ey '(d 'e-d in (bey(n)e t'e /i-in* o/ t'e (d+erse )-(im Neit'er .(s 'e in/ormed o/ t'e bre.in* (mi)(b-e sett-ement bet.een )om,-(in(nts (nd ?e+id(- 2e (-so /ind it +ery '(rd to ##

be-ie+e t'(t .'i-e )om,-(in(nts re)ei+ed +(rious (mounts (s -o(ns /rom res,ondent /rom Au*ust 2""E to Kune 2""C, t'ey )ou-d not s,(re e+en ( /e. minutes to (s3 (bout t'e st(tus o/ t'e )(se Not'ithstanding the !oregoing, respondent is not 'ithout !ault. ndeed, 'e !ind that the contract !or legal services he has e%ecuted 'ith co)plainants is in the nature o! a cha)pertous contract : an agree)ent 'here#y an attorney undertakes to pay the e%penses o! the proceedings to en!orce the client*s rights in e%change !or so)e #argain to have a part o! the thing in dispute. +uch contracts are contrary to pu#lic policy and are thus void or ine%istent. /hey are also contrary to Canon 7;.6< o! the Code o! Pro!essional Responsi#ility, 'hich states that la'yers shall not lend )oney to a client, e%cept 'hen in the interest o! 1ustice, they have to advance necessary e%penses in a legal )atter they are handling !or the client. A re(din* o/ t'e )ontr()t /or -e*(- ser+i)es s'o.s t'(t res,ondent (*reed to ,(y /or (t -e(st '(-/ o/ t'e e<,ense /or t'e do)3et /ees He (-so ,(id /or t'e .'o-e (mount needed /or t'e re)ordin* o/ )om,-(in(nts7 (d+erse )-(im =hile la'yers )ay advance the necessary e%penses in a legal )atter they are handling in order to sa!eguard their client*s rights, it is i)perative that the advances #e su#1ect to rei)#urse)ent. /he purpose is to avoid a situation in 'hich a la'yer ac0uires a personal stake in the client>s cause. Regretta#ly, no'here in the contract !or legal services is it stated that the e%penses o! litigation advanced #y respondent shall #e su#1ect to rei)#urse)ent #y co)plainants. n addition, respondent gave various a)ounts as cash advances ?#ali@, gasoline and transportation allo'ance to the) !or the duration o! their attorneyA client relationship. n !act, he ad)its that the cash advances 'ere in the nature o! personal loans that he e%tended to co)plainants. Clearly, respondent lost sight o! his responsi#ility as a la'yer in #alancing the client>s interests 'ith the ethical standards o! his pro!ession. Considering the surrounding circu)stances in this case, an ad)onition shall su!!ice to re)ind hi) that ho'ever dire the needs o! the clients, a la'yer )ust al'ays avoid any appearance o! i)propriety to preserve the integrity o! the pro!ession. 2HERE?ORE, Attorney Ku(n B B(ne=, Kr is 'ereby AGMONISHEG /or (d+(n)in* t'e -iti*(tion e<,enses in ( -e*(- m(tter 'e '(nd-ed /or ( )-ient .it'out ,ro+idin* /or terms o/ reimbursement (nd -endin* money to 'is )-ient, in +io-(tion o/ C(non #E "& o/ t'e Code o/ Pro/ession(- Res,onsibi-ity He is stern-y .(rned t'(t ( re,etition o/ t'e s(me or ( simi-(r ()t .ou-d be de(-t .it' more se+ere-y

#2

"iranda v. Carpio 4 A. C. No. ;8B7 4 +epte)#er 8;, 8677 $his is a disbarment case against tty" *acario 2" &arpio filed by 3alentin &" *iranda" Facts Com,-(in(nt A(-entin C Mir(nd( is one o/ t'e o.ners o/ ( ,(r)e- o/ -(nd In #@@&, )om,-(in(nt initi(ted L(nd Re*istr(tion Commission /or t'e re*istr(tion o/ t'e (/ores(id ,ro,erty Gurin* t'e )ourse o/ t'e ,ro)eedin*s, )om,-(in(nt en*(*ed t'e ser+i)es o/ res,ondent Atty C(r,io (s )ounse- in t'e s(id )(se .'en 'is ori*in(- )ounse-, Atty S(mue- M(r4ue=, /i*ured in ( +e'i)u-(r ())ident In )om,-(in(nt;s A//id(+it, )om,-(in(nt (nd res,ondent (*reed t'(t )om,-(in(nt .(s to ,(y res,ondent T.enty T'ous(nd Pesos 9P'P2",""" "": (s ())e,t(n)e /ee (nd T.o T'ous(nd Pesos 9P'P2,""" "": (s (,,e(r(n)e /ee Com,-(in(nt ,(id res,ondent t'e (mounts due 'im, (s e+iden)ed by re)ei,ts du-y si*ned by t'e -(tter Gurin* t'e -(st 'e(rin* o/ t'e )(se, res,ondent dem(nded t'e (ddition(- (mount o/ Ten T'ous(nd Pesos 9P'P#",""" "": /or t'e ,re,(r(tion o/ ( memor(ndum, .'i)' 'e s(id .ou-d /urt'er stren*t'en )om,-(in(nt;s ,osition in t'e )(se, ,-us t.enty ,er)ent 92"L: o/ t'e tot(- (re( o/ t'e sub1e)t ,ro,erty (s (ddition(- /ees /or 'is ser+i)es Com,-(in(nt did not ())ede to res,ondent;s dem(nd /or it .(s )ontr(ry to t'eir (*reement As ( resu-t o/ )om,-(in(nt;s re/us(- to s(tis/y res,ondent;s dem(nds, t'e -(tter be)(me /urious (nd t'eir re-(tions'i, be)(me sore On K(nu(ry #2, #@@D, ( Ge)ision .(s rendered *r(ntin* t'e ,etition /or re*istr(tion, .'i)' Ge)ision .(s de)-(red /in(- (nd e<e)utory T'e L(nd Re*istr(tion Aut'ority 9LRA: sent )om,-(in(nt ( )o,y o/ t'e -etter (ddressed to t'e Re*ister o/ Geeds 9RG: o/ L(s PiM(s City, .'i)' tr(nsmitted t'e de)ree o/ re*istr(tion (nd t'e ori*in(- (nd o.ner;s #$

du,-i)(te o/ t'e tit-e o/ t'e ,ro,erty On A,ri- $, 2""", )om,-(in(nt .ent to t'e RG to *et t'e o.ner;s du,-i)(te o/ t'e Ori*in(Certi/i)(te o/ Tit-e 9OCT: be(rin* No "%@& He .(s sur,rised to dis)o+er t'(t t'e s(me '(d (-re(dy been )-(imed by (nd re-e(sed to res,ondent on M(r)' 2@, 2""" On M(y &, 2""", )om,-(in(nt t(-3ed to res,ondent on t'e ,'one (nd (s3ed 'im to turn o+er t'e o.ner;s du,-i)(te o/ t'e OCT, .'i)' 'e '(d )-(imed .it'out )om,-(in(nt;s 3no.-ed*e, )onsent (nd (ut'ority Res,ondent insisted t'(t )om,-(in(nt /irst ,(y 'im t'e P'P#",""" "" (nd t'e 2"L s'(re in t'e ,ro,erty e4ui+(-ent to $CD s4u(re meters, in e<)'(n*e /or .'i)', res,ondent .ou-d de-i+er t'e o.ner;s du,-i)(te o/ t'e OCT On)e (*(in, )om,-(in(nt re/used t'e dem(nd, /or not '(+in* been (*reed u,on Res,ondent (dmitted t'e re)ei,t o/ t'e (mount o/ P'P$2,""" "", 'o.e+er, 'e (--e*ed t'(t t'e (mount e(r-ier ,(id to 'im .i-- be dedu)ted /rom t'e 2"L o/ t'e )urrent +(-ue o/ t'e sub1e)t -ot He (--e*ed t'(t t'e (*reement .(s not redu)ed into .ritin*, be)(use t'e ,(rties be-ie+ed e()' ot'er b(sed on t'eir mutu(- trust He denied t'(t 'e dem(nded t'e ,(yment o/ P'P#",""" "" /or t'e ,re,(r(tion o/ ( memor(ndum, sin)e 'e )onsidered t'e s(me unne)ess(ry In (ddition to t'e (--e*ed (*reement bet.een 'im (nd )om,-(in(nt /or t'e ,(yment o/ t'e 2"L ,ro/ession(- /ees, res,ondent in+o3ed t'e ,rin)i,-e o/ 54u(ntum meruit6 to 1usti/y t'e (mount bein* dem(nded by 'im Ruling I T'e Court sust(ins t'e reso-ution o/ t'e IBP Bo(rd o/ Go+ernors, .'i)' (//irmed .it' modi/i)(tion t'e /indin*s (nd re)ommend(tions o/ t'e IBP%CBG Res,ondent;s )-(im /or 'is un,(id ,ro/ession(- /ees t'(t .ou-d -e*(--y *i+e 'im t'e ri*'t to ret(in t'e ,ro,erty o/ 'is )-ient unti- 'e re)ei+es .'(t is (--e*ed-y due 'im '(s been ,(id '(s no b(sis (nd, t'us, is in+(-id An attorney>s retaining lien is !ully recogni$ed i! the presence o! the !ollo'ing ele)ents concurC ?7@ la'yerAclient relationshipD ?8@ la'!ul possession o! the client>s !unds, docu)ents and papersD and ?9@ unsatis!ied clai) !or attorney>s !ees. Further, the attorney>s retaining lien is a general lien !or the #alance o! the account #et'een the attorney and his client, and applies to the docu)ents and !unds o! the client 'hich )ay co)e into the attorney>s possession in the course o! his e)ploy)ent. In t'e ,resent )(se, )om,-(in(nt )-(ims t'(t t'ere is no su)' (*reement /or t'e ,(yment o/ ,ro/ession(- /ee )onsistin* o/ 2"L o/ t'e tot(- (re( o/ t'e sub1e)t ,ro,erty (nd submits t'(t t'eir (*reement .(s on-y /or t'e ,(yment o/ t'e ())e,t(n)e /ee (nd t'e (,,e(r(n)e /ees As )orre)t-y /ound by t'e IBP%CBG, t'ere .(s no ,roo/ o/ (ny (*reement bet.een t'e )om,-(in(nt (nd t'e res,ondent t'(t t'e -(tter is entit-ed to (n (ddition(- ,ro/ession(- /ee #&

)onsistin* o/ 2"L o/ t'e tot(- (re( )o+ered by OCT No "%@& T'e (*reement bet.een t'e ,(rties on-y s'o.s t'(t res,ondent .i-- be ,(id t'e ())e,t(n)e /ee (nd t'e (,,e(r(n)e /ees, .'i)' t'e res,ondent '(s du-y re)ei+ed C-e(r-y, t'ere is no uns(tis/ied )-(im /or (ttorney;s /ees t'(t .ou-d entit-e res,ondent to ret(in 'is )-ient;s ,ro,erty Hen)e, res,ondent )ou-d not +(-id-y .it''o-d t'e tit-e o/ 'is )-ient (bsen)e ( )-e(r (nd 1usti/i(b-e )-(im Atty C(r,io /(i-ed to -i+e u, to 'is duties (s ( -(.yer by un-(./u--y .it''o-din* (nd /(i-in* to de-i+er t'e tit-e o/ t'e )om,-(in(nt, des,ite re,e(ted dem(nds, in t'e *uise o/ (n (--e*ed entit-ement to (ddition(- ,ro/ession(- /ees He '(s bre()'ed Ru-e # "# o/ C(non # (nd Ru-e #E "$ o/ C(non #E o/ t'e Code o/ Pro/ession(- Res,onsibi-ity II ?urt'er, in )o--e)tin* /rom )om,-(in(nt e<orbit(nt /ees, res,ondent +io-(ted C(non 2" o/ t'e Code o/ Pro/ession(- Res,onsibi-ity, .'i)' m(nd(tes t'(t 5( -(.yer s'(-- )'(r*e on-y /(ir (nd re(son(b-e /ees 6 It is 'i*'-y im,ro,er /or ( -(.yer to im,ose (ddition(,ro/ession(- /ees u,on 'is )-ient .'i)' .ere ne+er mentioned nor (*reed u,on (t t'e time o/ t'e en*(*ement o/ 'is ser+i)es At t'e outset, res,ondent s'ou-d '(+e in/ormed t'e )om,-(in(nt o/ (-- t'e /ees or ,ossib-e /ees t'(t 'e .ou-d )'(r*e be/ore '(nd-in* t'e )(se (nd not to.(rds t'e ne(r )on)-usion o/ t'e )(se T'is is essenti(- in order /or t'e )om,-(in(nt to determine i/ 'e '(s t'e /in(n)i(- )(,()ity to ,(y res,ondent be/ore en*(*in* 'is ser+i)es III Res,ondent;s /urt'er submission t'(t 'e is entit-ed to t'e ,(yment o/ (ddition(,ro/ession(- /ees on t'e b(sis o/ t'e ,rin)i,-e o/ 4u(ntum meruit '(s no merit NOu(ntum meruit, me(nin* P(s mu)' (s 'e deser+ed; is used (s ( b(sis /or determinin* t'e -(.yer;s ,ro/ession(- /ees in t'e (bsen)e o/ ( )ontr()t but re)o+er(b-e by 'im /rom 'is )-ient N T'e ,rin)i,-e o/ 4u(ntum meruit (,,-ies i/ ( -(.yer is em,-oyed .it'out ( ,ri)e (*reed u,on /or 'is ser+i)es In su)' ( )(se, 'e .ou-d be entit-ed to re)ei+e .'(t 'e merits /or 'is ser+i)es, (s mu)' (s 'e '(s e(rned In t'e ,resent )(se, t'e ,(rties '(d (-re(dy entered into (n (*reement (s to t'e (ttorney;s /ees o/ t'e res,ondent, (nd t'us, t'e ,rin)i,-e o/ 4u(ntum meruit does not /u--y /ind (,,-i)(tion be)(use t'e res,ondent is (-re(dy )om,ens(ted by su)' (*reement =H2R2F(R2, Atty. "acario D. Carpio is +E+P2ND2D !ro) the practice o! la' /or ( ,eriod o/ si< 9E: mont's, e//e)ti+e u,on re)ei,t o/ t'is Ge)ision He is ordered to RET8RN to t'e )om,-(in(nt t'e o.ner;s du,-i)(te o/ OCT No "%@& immedi(te-y u,on re)ei,t o/ t'is de)ision He is 2ARNEG t'(t ( re,etition o/ t'e s(me or simi-(r ()t s'(-be de(-t .it' more se+ere-y

#H

Cerdan v. .o)e$ 4 A.C. No. 57F< 4 "arch 75, 8678 4efore the &ourt is the undated !esolution of the 4oard of 5overnors of the Integrated 4ar of the 1hilippines ,I416 finding tty" &arlo 5ome7 , tty" 5ome76 liable for violating &anon /8 of the &ode of 1rofessional !esponsibility and recommending that he be suspended from the practice of law for si( ,86 months" Facts T'e )(se stemmed /rom t'e (//id(+it%)om,-(int o/ Auror( G Cerd(n 9)om,-(in(nt:, /i-ed be/ore t'e Committee on B(r Gis)i,-ine o/ t'e IBP on A,ri- #E, 2""C T'e )om,-(int (--e*ed t'(t )om,-(in(nt (nd .ido.er Ben1(min Ru/ino 9Ru/ino: -i+ed to*et'er (s 'usb(nd (nd .i/e0 t'(t durin* t'eir )o'(bit(tion, t'ey ,ur)'(sed se+er(- re(- ,ro,erties0 t'(t t'ey m(int(ined s(+in*s ())ounts (-- o/ .'i)' .ere in t'e n(me o/ Ru/ino0 t'(t .'en Ru/ino died on Ge)ember 2D, 2""&, )om,-(in(nt sou*'t t'e -e*(- (d+i)e o/ Atty Gome= (s to .'(t to do .it' t'e ,ro,erties -e/t by Ru/ino0 (nd t'(t s'e ,(id Atty Gome= (ttorney7s /ees in t'e (mount o/ P#H2,""" "" but on-y t'e (mount o/ P#"",""" "" .(s re/-e)ted in t'e re)ei,t Com,-(in(nt )-(imed t'(t s'e (ut'ori=ed Atty Gome=, t'ru ( s,e)i(- ,o.er o/ (ttorney 9SPA:, to: sett-e Ru/ino7s s(+in*s ())ount0 t'(t t'e ori*in(- (*reement o/ ( H"%H" s'(rin* bet.een )om,-(in(nt (nd t'e )'i-dren o/ Ru/ino .(s re,-()ed by t'e Com,romise A*reement entered into by Atty Gome=, .'erein t'e 'eirs o/ Ru/ino *ot E"L o/ t'e s'(re .'i-e s'e on-y re)ei+ed &"L0 t'(t Atty Gome= in)-uded in t'e Com,romise A*reement t'e s(+in*s ())ount in ?CB%N(rr( Br(n)' .'en t'e s)o,e o/ t'e SPA .(s on-y t'e ())ount in ?CB% Oue=on br(n)'0 t'(t Atty Gome= too3 'er b(n3 boo3 /or t'e ?CB ())ount in N(rr( Br(n)' )ont(inin* de,osits in t'e (mount o/ more or -ess P#EH,""" "" (nd ne+er returned it to 'er0 (nd t'(t Atty Gome= .it'dre. /rom 'er ?CB ())ounts (nd t'ere(/ter *(+e t'e (mount o/ P2@",""" "" (nd uttered, 5ITO NA LAHAT ANG PERA MO AT ANG SA AQIN NAQ8HA QO NA 6 In 'is Ans.er, Atty Gome= (dmitted t'(t Ru/ino en*(*ed 'is -e*(- ser+i)es in +(rious )(ses He, 'o.e+er, denied t'e ())us(tions st(ted in t'e )om,-(int%(//id(+it /i-ed by )om,-(in(nt

Ruling #E

T'e Court (*rees .it' t'e /indin*s o/ t'e IBP In t'e )(se (t ben)', Atty Gome= /(i-ed to obser+e t'e utmost *ood /(it', -oy(-ty, )(ndor, (nd /ide-ity re4uired o/ (n (ttorney in 'is de(-in*s .it' )om,-(in(nt Atty Gome= e<)eeded 'is (ut'ority .'en 'e entered into ( )om,romise (*reement .it' re*(rd to t'e ?CB ())ount in Oue=on Br(n)', .'ere 'e (*reed t'(t )om,-(in(nt s'(-- re)ei+e &" ,er)ent o/ t'e ,ro)eeds .'i-e t'e 'eirs o/ Ru/ino s'(-- *et t'e E" ,er)ent, .'i)' .(s )ontr(ry to t'e ori*in(- (*reement o/ H"%H" s'(rin* Atty Gome= -i3e.ise ()ted beyond t'e s)o,e o/ t'e SPA .'en 'e in)-uded in t'e )om,romise (*reement t'e ?CB ())ount in N(rr( br(n)' .'en it .(s issued on-y .it' res,e)t to t'e ?CB ())ount, Oue=on br(n)' Moreo+er, Atty Gome= entered into ( )om,romise (*reement .it' res,e)t to t'e ot'er ,ro,erties o/ Ru/ino .it'out (ut'ority /rom )om,-(in(nt ?urt'ermore, Atty Gome= /(i-ed to ())ount /or t'e money 'e re)ei+ed /or )om,-(in(nt (s ( resu-t o/ t'e )om,romise (*reement 2orse, 'e remitted t'e (mount o/ 2@",""" "" on-y, (n (mount subst(nti(--y -ess t'(n t'e s'(re o/ )om,-(in(nt Re)ords re+e(- t'(t )om,-(in(nt7s s'(re /rom t'e ?CB s(+in*s ())ounts (mounted to &&2,H&C DD but on-y P2@",""" "" .(s remitted by Atty Gome= (/ter dedu)tin* 'is s'(re /his Court 'ill not tolerate such acts. Atty. .o)e$ has no right to unilaterally retain his la'yer*s lien. Having o#tained the !unds in the course o! his pro!essional e)ploy)ent, Atty. .o)e$ had the o#ligation to account and deliver such !unds to his client 'hen they #eca)e due, or upon de)and. "oreover, there 'as no agree)ent #et'een hi) and co)plainant that he could deduct there!ro) his clai)ed attorney*s !ees. T'e /idu)i(ry n(ture o/ t'e re-(tions'i, bet.een )ounse- (nd )-ient im,oses on ( -(.yer t'e duty to ())ount /or t'e money or ,ro,erty )o--e)ted or re)ei+ed /or or /rom t'e )-ient He is ob-i*ed to render ( ,rom,t ())ountin* o/ (-- t'e ,ro,erty (nd money 'e '(s )o--e)ted /or 'is )-ient 2HERE?ORE, res,ondent Atty C(r-o Gome= is 'ereby de)-(red G8ILT! o/ +io-(tion o/ C(non #E o/ t'e Code o/ Pro/ession(- Res,onsibi-ity (nd is S8SPENGEG /rom t'e ,r()ti)e o/ -(. /or ( ,eriod o/ one 9#: ye(r e//e)ti+e u,on re)ei,t o/ t'is Reso-ution, .it' ( 2ARNING t'(t ( re,etition o/ t'e s(me or simi-(r ()ts .i-- be de(-t .it' se+ere-y

#C

"as)ud v. N&RC G .o Jr., 4 ..R. No. 7B99BF 4 Fe#ruary 79 8665 4efore the &ourt is a petition for review on certiorari assailing the 2ecision of the &ourt of ppeals Facts On Ku-y @, 2""$, E+(n*e-in( M(smud7s 9E+(n*e-in(: 'usb(nd, t'e -(te A-e<(nder K M(smud 9A-e<(nder:, /i-ed ( )om,-(int (*(inst ?irst Ai)tory S'i,,in* Ser+i)es (nd An*e-(3os 9He--(s: S A /or non%,(yment o/ ,erm(nent dis(bi-ity bene/its, medi)(e<,enses, si)3ness (--o.(n)e, mor(- (nd e<em,-(ry d(m(*es, (nd (ttorney7s /ees A-e<(nder en*(*ed t'e ser+i)es o/ Atty Ro-(ndo B Go, Kr 9Atty Go: (s 'is )ounseIn )onsider(tion o/ Atty Go7s -e*(- ser+i)es, A-e<(nder (*reed to ,(y (ttorney7s /ees on ( )ontin*ent b(sis, (s /o--o.s: t.enty ,er)ent 92"L: o/ tot(- monet(ry )-(ims (s sett-ed or ,(id (nd (n (ddition(- ten ,er)ent 9#"L: in )(se o/ (,,e(- It .(s -i3e.ise (*reed t'(t (ny (.(rd o/ (ttorney7s /ees s'(-- ,ert(in to res,ondent7s -(. /irm (s )om,ens(tion On No+ember 2#, 2""$, t'e L(bor Arbiter 9LA: rendered ( Ge)ision *r(ntin* t'e monet(ry )-(ims o/ A-e<(nder A-e<(nder7s em,-oyer /i-ed (n (,,e(- be/ore t'e N(tion(- L(bor Re-(tions Commission 9NLRC: Gurin* t'e ,enden)y o/ t'e ,ro)eedin*s be/ore t'e NLRC, A-e<(nder died A/ter e<,-(inin* t'e terms o/ t'e -(.yer7s /ees to E+(n*e-in(, Atty Go )(used 'er substitution (s )om,-(in(nt On A,ri- $", 2""&, t'e NLRC rendered ( Ge)ision dismissin* t'e (,,e(- o/ A-e<(nder7s em,-oyer T'e em,-oyer subse4uent-y /i-ed ( motion /or re)onsider(tion T'e NLRC denied t'e s(me On (,,e(- be/ore t'e CA, t'e de)ision o/ t'e LA .(s (//irmed .it' modi/i)(tion T'e (.(rd o/ mor(- (nd e<em,-(ry d(m(*es .(s de-eted E+entu(--y, t'e de)ision o/ t'e NLRC be)(me /in(- (nd e<e)utory Atty Go mo+ed /or t'e e<e)ution o/ t'e NLRC de)ision, .'i)' .(s -(ter *r(nted by t'e LA T'e surety bond o/ t'e em,-oyer .(s *(rnis'ed 8,on motion o/ Atty Go, t'e surety )om,(ny de-i+ered to t'e NLRC C(s'ier, t'rou*' t'e NLRC S'eri//, t'e )'e)3 (mountin* to P$,&H&,"C@ 2" T'ere(/ter, Atty Go mo+ed /or t'e re-e(se o/ t'e s(id (mount to E+(n*e-in( Out o/ t'e s(id (mount, E+(n*e-in( ,(id Atty Go t'e sum o/ PED",""" "" Giss(tis/ied, Atty Go /i-ed ( motion to re)ord (nd en/or)e t'e (ttorney7s -ien (--e*in* t'(t E+(n*e-in( rene*ed on t'eir )ontin*ent /ee (*reement E+(n*e-in( ,(id on-y t'e (mount o/ PED",""" "", e4ui+(-ent to 2"L o/ t'e (.(rd (s (ttorney7s /ees, t'us, -e(+in* ( b(-(n)e o/ #"L, ,-us t'e (.(rd ,ert(inin* to t'e )ounse- (s (ttorney7s /ees In res,onse to t'e motion /i-ed by Atty Go, E+(n*e-in( /i-ed ( )omment .it' motion to re-e(se t'e (mount de,osited .it' t'e NLRC C(s'ier In 'er )omment, E+(n*e-in( m(ni/ested t'(t Atty Go7s )-(im /or (ttorney7s /ees o/ &"L o/ t'e tot(- monet(ry (.(rd .(s nu-- (nd +oid b(sed on Arti)-e ### o/ t'e L(bor Code #D

Ruling /here are t'o concepts o! attorney>s !ees. n the ordinary sense, attorney>s !ees represent the reasona#le co)pensation paid to a la'yer #y his client !or the legal services rendered to the latter. (n the other hand, in its e%traordinary concept, attorney>s !ees )ay #e a'arded #y the court as inde)nity !or da)ages to #e paid #y the losing party to the prevailing party, such that, in any o! the cases provided #y la' 'here such a'ard can #e )ade, e.g., those authori$ed in Article 886B o! the Civil Code, the a)ount is paya#le not to the la'yer #ut to the client, unless they have agreed that the a'ard shall pertain to the la'yer as additional co)pensation or as part thereo!. Here, .e (,,-y t'e ordin(ry )on)e,t o/ (ttorney7s /ees, or t'e )om,ens(tion t'(t Atty Go is entit-ed to re)ei+e /or re,resentin* E+(n*e-in(, in substitution o/ 'er 'usb(nd, be/ore t'e -(bor tribun(-s (nd be/ore t'e )ourt 9vangelina maintains that rticle /// of the :abor &ode is the law that should govern tty" 5os compensation as her counsel and assiduously opposes their agreed retainer contract" Arti)-e ### o/ t'e s(id Code ,ro+ides: !$" ///" ttorney;s fees" < ,a6 In cases of unlawful withholding of wages the culpable party may be assessed attorney;s fees e+uivalent to ten percent of the amount of the wages recovered" Contrary to 2vangelina*s proposition, Article 777 o! the &a#or Code deals 'ith the e%traordinary concept o! attorney*s !ees. t regulates the a)ount recovera#le as attorney>s !ees in the nature o! da)ages sustained #y and a'arded to the prevailing party. t )ay not #e used as the standard in !i%ing the a)ount paya#le to the la'yer #y his client !or the legal services he rendered. In t'is re*(rd, Se)tion 2&, Ru-e #$D o/ t'e Ru-es o/ Court s'ou-d be obser+ed in determinin* Atty Go7s )om,ens(tion T'e s(id Ru-e ,ro+ides: #9&" -=" &ompensation of attorney;s> agreement as to fees" < n attorney shall be

entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the sub'ect matter of the controversy, the e(tent of the services rendered, and the professional standing of the attorney" ?o court shall be bound by the opinion of attorneys as e(pert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge" written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable" /he retainer contract #et'een Atty. .o and 2vangelina provides !or a contingent #@

!ee. /he contract shall control in the deter)ination o! the a)ount to #e paid, unless !ound #y the court to #e unconsciona#le or unreasona#le. Attorney>s !ees are unconsciona#le i! they a!!ront one>s sense o! 1ustice, decency or reasona#leness. /he decree o! unconsciona#ility or unreasona#leness o! a stipulated a)ount in a contingent !ee contract 'ill not preclude recovery. t )erely 1usti!ies the !i%ing #y the court o! a reasona#le co)pensation !or the la'yer>s services.

T'e )riteri( /ound in t'e Code o/ Pro/ession(- Res,onsibi-ity (re (-so to be )onsidered in (ssessin* t'e ,ro,er (mount o/ )om,ens(tion t'(t ( -(.yer s'ou-d re)ei+e C(non 2", Ru-e 2" "# o/ t'e s(id Code ,ro+ides: & ?O? -. < B99#" !ule -."./" < his fees% ,a6 $he time spent and the e(tent of the services rendered or re+uired> ,b6 $he novelty and difficulty of the +uestion involved> ,c6 $he importance of the sub'ect matter> ,d6 $he skill demanded> ,e6 $he probability of losing other employment as a result of acceptance of the proffered case> ,f6 $he customary charges for similar services and the schedule of fees of the I41 &hapter to which he belongs> ,g6 $he amount involved in the controversy and the benefits resulting to the client from the service> ,h6 $he contingency or certainty of compensation> ,i6 $he character of the employment, whether occasional or established> and ,'6 $he professional standing of the lawyer" Contingent !ee contracts are su#1ect to the supervision and close scrutiny o! the court in order that clients )ay #e protected !ro) un1ust charges. /he a)ount o! contingent !ees agreed upon #y the parties is su#1ect to the stipulation that counsel 2" lawyer shall be guided by the following factors in determining : W@9! #A :: &A !59 O?:@ B I! ?2 !9 #O? 4:9

'ill #e paid !or his legal services only i! the suit or litigation prospers. A )uch higher co)pensation is allo'ed as contingent !ees #ecause o! the risk that the la'yer )ay get nothing i! the suit !ails. /he Court !inds nothing illegal in the contingent !ee contract #et'een Atty. .o and 2vangelina*s hus#and. /he CA co))itted no error o! la' 'hen it a'arded the attorney*s !ees o! Atty. .o and allo'ed hi) to receive an e0uivalent o! 95H o! the )onetary a'ard. Considerin* t'(t Atty Go su))ess/u--y re,resented 'is )-ient, it is on-y ,ro,er t'(t 'e s'ou-d re)ei+e (de4u(te )om,ens(tion /or 'is e//orts E+en (s .e (*ree .it' t'e redu)tion o/ t'e (.(rd o/ (ttorney;s /ees by t'e CA, t'e /()t t'(t ( -(.yer ,-(ys ( +it(ro-e in t'e (dministr(tion o/ 1usti)e em,'(si=es t'e need to se)ure to 'im 'is 'onor(rium -(./u--y e(rned (s ( me(ns to ,reser+e t'e de)orum (nd res,e)t(bi-ity o/ t'e -e*(,ro/ession A -(.yer is (s mu)' entit-ed to 1udi)i(- ,rote)tion (*(inst in1usti)e or im,osition o/ /r(ud on t'e ,(rt o/ 'is )-ient (s t'e )-ient is (*(inst (buse on t'e ,(rt o/ 'is )ounse- T'e duty o/ t'e )ourt is not (-one to ensure t'(t ( -(.yer ()ts in ( ,ro,er (nd -(./u- m(nner, but (-so to see t'(t ( -(.yer is ,(id 'is 1ust /ees 2it' 'is )(,it()onsistin* o/ 'is br(ins (nd .it' 'is s3i-- ()4uired (t tremendous )ost not on-y in money but in e<,enditure o/ time (nd ener*y, 'e is entit-ed to t'e ,rote)tion o/ (ny 1udi)i(tribun(- (*(inst (ny (ttem,t on t'e ,(rt o/ 'is )-ient to es)(,e ,(yment o/ 'is 1ust )om,ens(tion It .ou-d be ironi) i/ (/ter ,uttin* /ort' t'e best in 'im to se)ure 1usti)e /or 'is )-ient, 'e 'imse-/ .ou-d not *et 'is due 2HERE?ORE, in +ie. o/ t'e /ore*oin*, t'e Ge)ision d(ted O)tober $#, 2""C (nd t'e Reso-ution d(ted Kune E, 2""D o/ t'e Court o/ A,,e(-s in CA%G R SP No @E2C@ (re 'ereby A??IRMEG SO ORGEREG

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