Distinction of Attoryney's fee and Acceptance fee

A.C. No. 10912. January 9, 2016
PAULINA T. YU, Complainant vs. ATTY. BERLIN R. DELA CRUZ

There is a distinction between attorney’s fee and acceptance fee. It is well-settled that attorney’s fee is understood both in its ordinary and extraordinary concept. In its ordinary sense, attorney’s fee refers to the reasonable compensation paid to a lawyer by his client for legal services rendered. Meanwhile, in its extraordinary concept, attorney’s fee is awarded by the court to the successful litigant to be paid by the losing party as indemnity for damages. On the other hand, acceptance fee refers to the charge imposed by the lawyer for merely accepting the case. This is because once the lawyer agrees to represent a client, he is precluded from handling cases of the opposing party based on the prohibition on conflict of interest. Thus, this incurs an opportunity cost by merely accepting the case of the client which is therefore indemnified by the payment of acceptance fee. Since the acceptance fee only seeks to compensate the lawyer for the lost opportunity, it is not measured by the nature and extent of the legal services rendered.

What law was enacted today?

PROCLAMATION No. 1081

September 21, 1979 

 PROCLAIMING A STATE OF MARTIAL LAW IN THE PHILIPPINES

Yu Vs.Atty Dela Cruz

A.C. No. 10912. January 9, 2016

PAULINA T. YU, Complainant vs. ATTY. BERLIN R. DELA CRUZ

It appears from the records that respondent lawyer agreed to represent Paulina T. Yu (complainant) in several cases after having received various amounts as acceptance fees. While the lawyer-client relationship was subsisting, respondent lawyer borrowed pieces of jewelry from complainant and pledged the same with the Citystate Savings Bank, Inc. for the amount of P29,945.50, as shown in the Promissory Note with Deed of Pledge. Respondent lawyer appropriated the proceeds of the pledge to his personal use. In order to facilitate the redemption of the said jewelry, respondent lawyer issued to complainant, Citystate Savings Bank Check. Upon presentment, however, complainant was shocked to learn that the check was dishonored for the reason, “Account Closed.” Complainant immediately notified respondent lawyer of the dishonor of the check.

Complainant demanded for the refund of the acceptance fees received by respondent lawyer prior to the “abandonment” of the cases and the payment of the value of the jewelry, but to no avail.

For his failure to heed the repeated demands, a criminal case for violation of Batas Pambansa Blg. 22 was filed with the Office of the City Prosecutor against him.

A verified complaint was filed with the IBP Commission on Bar Discipline (IBP-CBD), where complainant prayed for the disbarment of respondent lawyer on account of grave misconduct, conduct unbecoming of a lawyer and commission of acts in violation of the lawyer’s oath. The IBP-CBD required respondent lawyer to submit his answer to the complaint. Despite having been duly served with a copy of the complaint and the order to file his answer, as shown in a certification issued by the Post Master of the Las Piñas Central Post Office, respondent still failed to file an answer.

Issue: WON respondent violated CPR?

Held:

The complaint stemmed from the use by respondent lawyer of his client’s property. He had, indeed, come into possession of valuable pieces of jewelry which he presented as security in a contract of pledge. Complainant voluntarily and willingly delivered her jewelry worth P135,000.00 to respondent lawyer who meant to borrow it and pawn it thereafter. This act alone shows respondent lawyer’s blatant disregard of Rule 16.04. Complainant’s acquiescence to the “pawning” of her jewelry becomes immaterial considering that the CPR is clear in that lawyers are proscribed from borrowing money or property from clients, unless the latter’s interests are fully protected by the nature of the case or by independent advice. Here, respondent lawyer’s act of borrowing does not constitute an exception. Respondent lawyer used his client’s jewelry in order to obtain, and then appropriate for himself, the proceeds from the pledge. In so doing, he had abused the trust and confidence reposed upon him by his client. That he might have intended to subsequently pay his client the value of the jewelry is inconsequential. What deserves detestation was the very act of his exercising influence and persuasion over his client in order to gain undue benefits from the latter’s property. The Court has repeatedly emphasized that the relationship between a lawyer and his client is one imbued with trust and confidence. And as true as any natural tendency goes, this “trust and confidence” is prone to abuse. The rule against borrowing of money by a lawyer from his client is intended to prevent the lawyer from taking advantage of his influence over his client. The rule presumes that the client is disadvantaged by the lawyer’s ability to use all the legal maneuverings to renege on his obligation. Suffice it to say, the borrowing of money or property from a client outside the limits laid down in the CPR is an unethical act that warrants sanction.

The Court does not harbor any doubt in favor of respondent lawyer. Obviously, his unfulfilled promise to facilitate the redemption of the jewelry and his act of issuing a worthless check constitute grave violations of the CPR and the lawyer’s oath. These shortcomings on his part have seriously breached the highly fiduciary relationship between lawyers and clients. Specifically, his act of issuing worthless checks patently violated Rule 1.01 of Canon 1 of the CPR which requires that “[a] lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.” This indicates a lawyer’s unfitness for the trust and confidence reposed on him, shows such lack of personal honesty and good moral character as to render him unworthy of public confidence, and constitutes a ground for disciplinary action, and thus seriously and irreparably tarnishes the image of the profession. Such conduct, while already off-putting when attributed to an ordinary person, is much more abhorrent when exhibited by a member of the Bar. In this case, respondent lawyer turned his back from the promise that he once made upon admission to the Bar. As “vanguards of the law and the legal system, lawyers must at all times conduct themselves, especially in their dealings with their clients and the public at large, with honesty and integrity in a manner beyond reproach.”

Pitcher Vs. Atty. Gagate

A.C. No. 9532               October 8, 2013

MARIA CRISTINA ZABALJAUREGUI PITCHER, Complainant, 
vs.
ATTY. RUSTICO B. GAGATE, Respondent.

Complainant claimed to be the legal wife of David B. Pitcher (David), a British national who passed away on June 18, 2004. Prior to his death, David was engaged in business in the Philippines and owned, among others, 40% of the shareholdings in Consulting Edge, Inc. (Consulting Edge), a domestic corporation. In order to settle the affairs of her deceased husband, complainant engaged the services of respondent.

Complainant and respondent met with Katherine Moscoso Bantegui (Bantegui), a major stockholder of Consulting Edge, in order to discuss the settlement of David’s interest in the company. They agreed to another meeting which was, however, postponed by Bantegui. Suspecting that the latter was merely stalling for time in order to hide something, respondent insisted that the appointment proceed as scheduled.

Eventually, the parties agreed to meet at the company premises. However, prior to the scheduled meeting, complainant was prevailed upon by respondent to put a paper seal on the door of the said premises, assuring her that the same was legal.

On the scheduled meeting, Bantegui expressed disappointment over the actions of complainant and respondent, which impelled her to just leave the matter for the court to settle. She then asked them to leave, locked the office and refused to give them a duplicate key.

However, respondent, without the consent of Bantegui, caused the change in the lock of the Consulting Edge office door, which prevented the employees thereof from entering and carrying on the operations of the company. This prompted Bantegui to file before the Prosecutor’s Office a complaint for grave coercion against complainant and respondent. In turn, respondent advised complainant that criminal and civil cases should be initiated against Bantegui for the recovery of David's personal records/business interests in Consulting Edge.

Due to the foregoing, respondent advised complainant to go into hiding until he had filed the necessary motions in court. Eventually, however, respondent abandoned the grave coercion case and stopped communicating with complainant. Failing to reach respondent despite diligent efforts, complainant filed the instant administrative case before the Integrated Bar of the Philippines (IBP).

Issue: WON respondent neglected his duties?

Held:

The Court has repeatedly emphasized that the relationship between a lawyer and his client is one imbued with utmost trust and confidence. In this regard, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the required degree of diligence in handling their affairs. For his part, the lawyer is expected to maintain at all times a high standard of legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its importance and whether he accepts it for a fee or for free. To this end, he is enjoined to employ only fair and honest means to attain lawful objectives. These principles are embodied in Canon 17, Rule 18.03 of Canon 18, and Rule 19.01 of Canon 19 of the Code which respectively state:

CANON 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.

CANON 18 – A lawyer shall serve his client with competence and diligence.

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.

CANON 19 – A lawyer shall represent his client with zeal within the bounds of the law.

Rule 19.01 – A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case or proceeding.

Keeping with the foregoing rules, the Court finds that respondent failed to exercise the required diligence in handling complainant’s cause since he: first, failed to represent her competently and diligently by acting and proffering professional advice beyond the proper bounds of law; and, second, abandoned his client’s cause while the grave coercion case against them was pending.
In addition, it must be pointed out that respondent failed to file his answer to the complaint despite due notice. This demonstrates not only his lack of responsibility but also his lack of interest in clearing his name, which, as case law directs, is constitutive of an implied admission of the charges leveled against him.

Several cases show that lawyers who have been held liable for gross negligence for infractions similar to those committed by respondent were suspended from the practice of law for a period of two years. In Jinon v. Jiz, a lawyer who neglected his client's case, misappropriated the client's funds and disobeyed the IBP’s directives to submit his pleadings and attend the hearings was suspended from the practice of law for two years. In Small v. Banares, the Court meted a similar penalty against a lawyer who failed to render any legal service even after receiving money from the complainant; to return the money and documents he received despite demand; to update his client on the status of her case and respond to her requests for information; and to file an answer and attend the mandatory conference before the IBP. Also, in Villanueva v. Gonzales, a lawyer who neglected complainant’s cause; refused to immediately account for his client’s money and to return the documents received; failed to update his client on the status of her case and to respond to her requests for information; and failed to submit his answer and to attend the mandatory conference before the IBP was suspended from the practice of law for two years. However, the Court observes that, in the present case, complainant was subjected to a graver injury as she was prosecuted for the crime of grave coercion largely due to the improper and erroneous advice of respondent. Were it not for respondent’s imprudent counseling, not to mention his act of abandoning his client during the proceedings, complainant would not have unduly suffered the harbors of a criminal prosecution. Thus, considering the superior degree of the prejudice caused to complainant, the Court finds it apt to impose against respondent a higher penalty of suspension from the practice of law for a period of three years as recommended by the OBC.

Mumar vs. Atty Flores

A.C. No. 5426 April 3, 2007

CHITA PANTOJA-MUMAR, Complainant, - versus - ATTY. JANUARIO C. FLORES, Respondent.

The instant administrative case stemmed from the complaint filed by Chita Pantoja-Mumar charging respondent Atty.Januario C. Flores with fraud, misrepresentation, deceit, falsification of document, breach of duty and violation of his oath as a lawyer.

Complainant is one of the compulsory heirs of the late Jose Pantoja, Sr. It appears that respondent had prepared an Extrajudicial Partition with Absolute Sale for her and 11 other co-heirs covering a three-hectare property in Pangdan, Cambanay,Danao City. The deed was executed in favor of the spouses Filomena and Edilberto Perez, who were later able to secure a torrens title over the property under their names.

In the verified Complaint, complainant alleged that respondent had prepared the Extrajudicial Partition with Absolute Sale dated December 29, 1987, but averred that the transaction did not push through, and the deed was not notarized.

The Investigating Commissioner found that while the validity of the Deed of Extrajudicial Settlement with Sale is yet to be resolved in the civil case, the acts and omissions of respondent as notary public have been duly established. According to the Investigating Commissioner:

1.      The document, although already signed by some of the co-heirs/co-owners on or before December 29, 1987, was not finalized because the transaction was not pursued; however, the date of notarization was indicated therein to be December 29, 1987;

2.      Respondent notarized the document on or after June 13, 1988, without the authority and/or in the absence of some of the supposed signatories;

3.      Respondent did not see one of the co-heirs, Maximina Pantoja, actually affix her thumbmark to the document; and

4.      Respondent notarized the document even if Complainant, also a co-heir, did not sign it.

The Investigating Commissioner pointed out that these acts and omissions were established through respondents own admission that he notarized the document even if Maximina Pantoja did not affix her thumbmark in his presence, and that complainant did not appear before him to sign the deed. The Investigating Commissioner also considered respondents testimony in Civil Case No. DNA-574. Citing Gonzales v. Ramos, Commissioner Herbosa recommended that the notarial commission of respondent be revoked; and that he be disqualified from reappointment as notary public for a period of two years and suspended from the practice of law for six (6) months.

Issue: WON respondent violated the Notarial law and his lawyer’s oath?

Held:

It cannot be overemphasized that notarization of documents is not an empty, meaningless or routinary act. It is invested with substantive public interest, such that only those who are qualified or authorized may act as notaries public. It is through the act of notarization that a private document is converted into a public one, making it admissible in evidence without need of preliminary proof of authenticity and due execution. Indeed, a notarial document is by law entitled to full faith and credit upon its face, and for this reason, notaries public must observe utmost care in complying with the elementary formalities in the performance of their duties. Otherwise, the confidence of the public in the integrity of this form of conveyance would be undermined. Hence, a notary public should not notarize a document unless the persons who signed the same are the very same persons who executed and personally appeared before him to attest to the contents and truth of what are stated therein. A notary public is duty-bound to require the person executing a document to be personally present, to swear before him that he is that person and ask the latter if he has voluntarily and freely executed the same.

Thus, in notarizing the Deed of Absolute Sale without ascertaining that all the vendors-signatories thereto were the very same persons who executed it and personally appeared before him to attest to the contents and truth of what are stated therein, respondent undermined the confidence of the public on notarial documents; he thereby breached Canon 1 of the Code of Professional Responsibility which requires lawyers to uphold the Constitution, obey the laws of the land and promote respect for the law and legal processes, and Rule 1.01 thereof, which proscribes lawyers from engaging in unlawful, dishonest, immoral or deceitful conduct.

It must be stressed that disbarment is the most severe form of disciplinary sanction, and, as such, the power to disbar must always be exercised with great caution for only the most imperative reasons, and in clear cases of misconduct affecting the standing and moral character of the lawyer as an officer of the court and a member of the bar. Accordingly, disbarment should not be decreed where any punishment less severe such as a reprimand, suspension, or fine would accomplish the end desired. Considering that this is the respondents first administrative offense, the Court modifies the IBPs recommendation of a two-year suspension from the practice of law to one year.