Canon 20 Full Cases

Republic of the Philippines

SUPREME COURT Manila THIRD DIVISION

G.R. No. 117438 June 8, 1995 RAUL SESBREÑO, petitioner, vs.

HON, COURT OF APPEALS, and PATRICIA GIAN, SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGO BACAYO, BRIGIDO COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO and EMILIO RETUBADO, respondents. ROMERO, J .:  Of interest to all law practitioners is the issue at bench, namely, whether the × Court of Appeals had the authority to reduce the amount of attorney's fees awarded to petitione r × Atty. Raul H. Sesbreño, notwithstanding the contract for professional services signed by private respondents. The antecedent facts of the case follow. Fifty-two employees sued the × Province of Cebu and then × Espina for reinstatement and backwages. 1 Herein petitioner, Raul H. Sesbreño, replaced the employees' former counsel Atty. Catalino Pacquiao.

Thirty-two of the fifty-two employees signed two documents whereby the former agreed to pay petitioner 30% as attorney's fees and 20% as expenses to be taken from their back salaries. On September 12, 1974, the trial court rendered a decision ordering the × Province of Cebu to reinstate the petitioning employees and pay them back salaries. Said decision became final and executory after it was affirmedin affirmed in toto by toto by the the× Court of Appeals and the petition to review the appellate decision, denied by this × Court in 1978. 2  A compromise compromise agreement agreement was entered entered into by the the parties below below in April April 1979 whereby the former employees waived their right to reinstatement among others. Likewise, pursuant to said compromise agreement, the×Province of Cebu released P2,300,000.00 to the petitioning employees through petitioner as "Partial Satisfaction of Judgment." The amount represented back salaries, terminal leave pay and gratuity pay due to the employees.

Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations before the trial court asserting that they agreed to pay petitioner 40% to be taken only from their back salaries.

The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him. On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave, gratuity pay and retirement benefits and 20% as expenses, or a total of 60% of all monies paid to the employees. Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified the award after noting that petitioner's attorney's lien was inadvertently placed as 60% when it should have been only 50%. The dispositive portion of the order reads: WHEREFORE, in view of all the foregoing the order of this × Court fixing 60% as attorney's fee[s] of  of ×Atty. Sesbreño should be 50% of all monies which the petitioners (Suico, et al.) may receive from the Provincial Government. Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the× Court of Appeals claiming additional fees for legal services before the × Court, reimbursement for expenses and a clear statement that the fee be likewise taken from retirement pay awarded to his clients. Unfortunately, the respondent appellate court did not agree with him as the generous award was further reduced. 4 The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control and deemed the award of 20% of the back salaries awarded to private respondents as a fair, equitable and reasonable amount of attorney's fee. The decretal portion of the decision reads: WHEREFORE, the questioned order is MODIFIED. The attorney's fees due × Atty. Raul Sesbreño is fixed at an amount equivalent to 20% of all back salaries which the× Province of Cebu has awarded to herein 10 petitioners.  5 Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to his clients as contingent fees should be upheld for being consistent with prevailing case law and the contract of professional services between the parties. He adds that since private respondents did not appeal, they are not entitled to affirmative relief other than that granted in the regional trial court. We find no reversible error in the decision of the × Court of Appeals and vote to deny the petition. Respondent court found that the contract of professional services entered into by the parties 6 authorized petitioner to take a total of 50% from the employees' back salaries only . The trial court, however, fixed the lawyer's fee on the basis of all monies to be awarded to private respondents.

Fifty per cent of all monies which private respondents may receive from the provincial government, according to the× Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professional services. 7 After considering the facts and the nature of the case, as well as the length of time and effort exerted by petitioner, respondent court reduced the amount of attorney's fees due him.

Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations before the trial court asserting that they agreed to pay petitioner 40% to be taken only from their back salaries.

The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him. On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave, gratuity pay and retirement benefits and 20% as expenses, or a total of 60% of all monies paid to the employees. Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified the award after noting that petitioner's attorney's lien was inadvertently placed as 60% when it should have been only 50%. The dispositive portion of the order reads: WHEREFORE, in view of all the foregoing the order of this × Court fixing 60% as attorney's fee[s] of  of ×Atty. Sesbreño should be 50% of all monies which the petitioners (Suico, et al.) may receive from the Provincial Government. Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the× Court of Appeals claiming additional fees for legal services before the × Court, reimbursement for expenses and a clear statement that the fee be likewise taken from retirement pay awarded to his clients. Unfortunately, the respondent appellate court did not agree with him as the generous award was further reduced. 4 The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control and deemed the award of 20% of the back salaries awarded to private respondents as a fair, equitable and reasonable amount of attorney's fee. The decretal portion of the decision reads: WHEREFORE, the questioned order is MODIFIED. The attorney's fees due × Atty. Raul Sesbreño is fixed at an amount equivalent to 20% of all back salaries which the× Province of Cebu has awarded to herein 10 petitioners.  5 Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to his clients as contingent fees should be upheld for being consistent with prevailing case law and the contract of professional services between the parties. He adds that since private respondents did not appeal, they are not entitled to affirmative relief other than that granted in the regional trial court. We find no reversible error in the decision of the × Court of Appeals and vote to deny the petition. Respondent court found that the contract of professional services entered into by the parties 6 authorized petitioner to take a total of 50% from the employees' back salaries only . The trial court, however, fixed the lawyer's fee on the basis of all monies to be awarded to private respondents.

Fifty per cent of all monies which private respondents may receive from the provincial government, according to the× Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professional services. 7 After considering the facts and the nature of the case, as well as the length of time and effort exerted by petitioner, respondent court reduced the amount of attorney's fees due him.

It is a settled rule that what a lawyer may charge and receive as attorney's fees is always subject to  judicial control. control. 8 A lawyer is primarily an officer of the court charged with the duty of assisting the court in administering impartial justice between the parties. When he takes his oath, he submits himself to the authority of the court and subjects his professional fees to judicial control. 9

 As stated stated by the× Court in the case of Sumaong v. Judge: Judge : 10  A lawyer lawyer is not merely merely the defende defenderr of his client's client's cause and a trustee of his his client in respect of the client's cause of action and assets; he is also, and first and foremost, an officer of the court and participates in the fundamental function of administering  justice in society. society. It follows that a lawyer's lawyer's compensation compensation for professional professional services rendered are subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which he belongs. Upon taking his attorney 's oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to professional fees. 11 In the case at bench, the parties entered into a contingent fee contract. The Agreement provides: WE, the undersigned petitioners in the case of POLICRONIO BELACHO, ET AL., VS. RENE ESPINA ET AL.,  hereby agree to pay pa y× Atty. Sesbreño, our lawyer, the following to be taken from our back salaries: 30% as attorney's fees 20% as expenses That we enter into agreement in order to be paid our back salaries as early as possible and so that we may be reinstated as early as possible.  A stipulation stipulation on a lawyer's compensat compensation ion in a written contract contract for professional professional services ordinarily ordinarily controls the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable unconscionable. 12  A contingent contingent fee arrangement arrangement is valid in this jurisdiction jurisdiction 13 and is generally recognized as valid and

binding but must be laid down in an express contract. 14 The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher compensation is allowed allowed as contingent fees i n consideration of the risk that the lawyer may get nothing if the suit f ails.

Contingent fee contracts are under the supervision and close scrutiny of the court in order that clients may be protected from unjust charges. 15 Its validity depends in large measure on the reasonableness of the stipulated fees under the circumstances of each case. 16

When the courts find that the stipulated amount is excessive or the contract is unreasonable or unconscionable, or found to have been marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy demands that said contract be disregarded to protect the client from unreasonable exaction. 17 Stipulated attorney's fees are unconscionable whenever the amount is by far so disproportionate compared to the value of the services rendered as to amount to fraud perpetrated upon the client.

This means to say that the amount of the fee contracted for, standing alone and unexplained would be sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been perpetrated on him. 18 The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not however, preclude recovery. It merely justifies the court's fixing a reasonable amount for the lawyer's services. Courts may always ascertain, if the attorney's fees are found to be excessive, what is reasonable under the circumstances. Quantum meruit , meaning "as much as he deserves," is used as the basis for determining the lawyer's professional fees in the absence of a contract. Factors such as the time spent and extent of services rendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proffered case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation; character of employment; and professional standing of the lawyer, are considered in determining his fees. 19 There is nothing irregular about the respondent court's finding that the 50% fee of petitioner is unconscionable As aptly put by the court: It effectively deprives the appellees of a meaningful victory of the suit they have passionately pursued. Balancing the allocation of the monetary award, 50% of all monies to the lawyer and the other 50% to be allocated among all his 52 clients, is too lop-sided in favor of the lawyer. The ratio makes the practice of law a commercial venture, rather than a noble profession. . . . Also, the 52 employees who are the plaintiffs in the aforementioned civil case were dismissed from employment, their means of livelihood. All 52 hired claimantappellant as counsel so that they could be reinstated and their source of income restored. It would, verily be ironic if the counsel whom they had hired to help would appropriate for himself 50% or even 60% of the total amount collectible by these employees. Here is an instance where the courts should intervene. 20 Considering the nature of the case, which is a labor case, the amount recovered and petitioner's participation in the case, an award of 50% of back salaries of his 52 clients indeed strikes us as excessive. Under the circumstances, a fee of 20% of back salaries would be a fair settlement in this case. In any event, this award pertains only to the ten private respondents herein. Petitioner has already been compensated in the amount of 50% of all monies received, by the rest of his clients in the case below. WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision  AFFIRMED.  AFFIRME D. SO ORDERED. Melo, Vitug and Francisco, JJ., concur. Feliciano, J., is on leave. Footnotes

1 Policronio Belacho, et al. v. Gov. Rene Espina, et al., Civil Case No. R-11204, Court of First Instance, Branch VI, Cebu City. 2 G.R. No. L-49076, November 22, 1978 cited i n× Province of Cebu v. Torres, G.R. No. L-76950, December 15, 1988, 168 SCRA 493. 3 Jose Suico, Emilio Retubado, Patricio Gian, Sotero Branzuela, Andres Ypil, Santiago Bacayo, Brigido Cohitmingao, Victorino Dinoy, Guillermo Montejo and Timoteo Montejo. 4 Decision dated January 31, 1994, in CA G.R. CV No. 26226, penned by Justice Buenaventura J. Guerrero and concurred in by Justices Cezar D. Francisco and Manuel C. Herrerra; Rollo, p. 34. 5 Rollo, p. 40. 6 Rollo, p. 38, citing Exhibits "F" and "G". 7 Rollo, pp. 38-39. 8 Roldan v. CA, G.R. No. 97006, February 9, 1993, 218 SCRA 713; Ramos v. Bidin, G.R. No. L-53650 & 55460, May 28, 1988, 161 SCRA 561; Mambulao Lumber v. PNB, G.R. No. 22973, January 30, 1968; Gorospe v. Gochangco, 106 Phil. 425. 9 Cruz v. CIR, G.R. No. L-18277, August 31, 1963, 8 SCRA 826. 10 G.R. No. 78173, October 26, 1993, 215 SCRA 136 citing Ramos v. Bidin, supra and Gorospe v. Gochangco, supra. 11 Ibid ., at pp. 143-144. 12 Rule 138, Section 24, Revised Rules of Court; Francisco v. Matias, G.R. No. 16349, January 31, 1964, 10 SCRA 89; Lopez v. Pan American Airways, G.R. No. L-22415, March 30, 1966, 16 SCRA 431. 13 Armovit v. CA, G.R. No. 90983, September 27, 1991, 202 SCRA 16. 14 Corpus v. CA, G.R. No. L-40424, June 30, 1980, 98 SCRA 424. 15 Canons of Professional Ethics, Section 13, adopted by th e×  Association in 1917 and in 1946; Dir. of Lands v. Ababa, G.R. No. L-26092, February 27, 1979, 88 SCRA 513; Integrated Construction Services v. Relova, G.R. No. L-36424, July 31, 1975, 65 SCRA 638; Ulanday v. MRR, 45 Phil. 540. 16 Amalgamated Laborers Association v. CIR, G.R. No. L-23467, March 27, 1968, 22 SCRA 1266; Recto v. Harden, 100 Phil. 427. 17 Ulanday v. MRR, supra; Felices v. Madrilejos, 51 Phil. 24; Jayme v. Bualan, 58 Phil. 422; Gorospe v. Gochangco, supra. 18 High Point Casket Co. v. Wheelers, 19 A.L.R. 391, cited in ANNOTATIONS ON LEGAL ETHICS 244 (1st ed., 1983). 19 Code of Professional Responsibility, Canon 20, Rule 20.1 promulgated June 21, 1988. 20 Rollo, pp. 38-39.

Republic of the Philippines

SUPREME COURT Manila EN BANC

A.M. No. 1625 February 12, 1990 ANGEL L. BAUTISTA, complainant, vs.

ATTY. RAMON A. GONZALES, respondent. RESOLUTION

PER CURIAM: In a verified complaint filed by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was charged with malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by

this× Court to answer the charges against him, respondent filed on June 19, 1976 a motion for a bill of particulars asking this× Court to order complainant to amend his complaint by making his charges more definite. In a resolution dated June 28, 1976, the × Court granted respondent's motion and required complainant to file an amended complaint. On July 15, 1976, complainant submitted an amended complaint for disbarment, alleging that respondent committed the following acts:

× Ads By softonic1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for a contingent fee of fifty percent (50%) of the value of the property in litigation. 2. Acting as counsel for the ×Fortunados in Civil Case No. Q-15143, wherein Eusebio Lopez, Jr. is one of the defendants and, without said case being terminated, acting as counsel for Eusebio Lopez, Jr. in Civil Case No. Q-15490; 3. Transferring to himself one-half of the properties of the× Fortunados , which properties are the subject of the litigati on in Civil Case No. Q-15143, while the case was still pending; 4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971 for the development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered by TCT No. T-1929, claiming that he acquired fifty percent (50%) interest thereof as attorney's fees from the × Fortunados , while knowing fully well that the said property was already sold at a public auction on June 30, 1971, by the × Sheriff of Lanao del× Norte and registered with the × Register of Deeds of Iligan City; 5. Submitting to the × Court of First Instance of × City falsified documents purporting to be true copies of "Addendum to the× Agreement dated August 30, 1971" and submitting the same document to the Fiscal's Office of × City, in connection with the complaint for estafa filed by respondent against complainant designated as I.S. No. 7512936; 6. Committing acts of treachery and disloyalty to complainant who was his client; 7. Harassing the complainant by filing several complaints without legal basis before the ×Court of First Instance and the Fiscal's Office of Quezon City; 8. Deliberately misleading the× Court of First Instance and the Fiscal's Office by making false assertion of facts i n his pleadings; 9. Filing petitions "cleverly prepared (so) that while he does not intentionally tell a he, he does not tell the truth either."

Respondent filed an answer on September 29, 1976 and an amended answer on November 18, 1976, denying the accusations against him. Complainant filed a reply to respondent's answer on December 29, 1976 and on March 24, 1977 respondent filed a rejoinder.

× Ads By softonicIn a resolution dated March 16, 1983, the × Court referred the case to the × Office of the Solicitor General for investigation, report and recommendation. In the investigation conducted by the× General, complainant presented himself as a witness and submitted Exhibits "A" to "PP", while respondent appeared both as witness and counsel and submitted Exhibits "1" to "11". The parties were required to submit their respective memoranda. On May 16, 1988 respondent filed a motion to dismiss the complaint against him, claiming that the long delay in the resolution of the complaint against him constitutes a violation of his constitutional right to due process and speedy disposition of cases. Upon order of the × Court, the Solicitor General filed a comment to the motion to dismiss on August 8, 1988, explaining that the delay in the investigation of the case was due to the numerous requests for postponement of scheduled hearings filed by both parties and the motions for extension of time to file their respective memoranda." [Comment of the Solicitor General, p. 2; Record, p. 365]. Respondent filed a reply to the × General's comment on October 26, 1988. In a resolution dated January 16, 1989 the × Court required the Solicitor General to submit his report and recommendation within thirty (30) days from notice. On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A. Gonzales be suspended for six (6) months. The Solicitor General found that respondent committed the following acts of misconduct: a. transferring to himself one-half of the properties of his clients during the pendency of the case where the properties were involved; b. concealing from complainant the fact that the property subject of their land development agreement had already been sold at a public auction prior to the execution of said agreement; and c. misleading the court by submitting alleged true copies of a document where two signatories who had not signed the original (or even the xerox copy) were made to appear as having fixed their signatures [Report and Recommendation of the Solicitor General, pp. 17-18; Rollo, pp. 403-404]. Respondent then filed on April 14, 1989 a motion to refer the case to the Integrated Bar of the Philippines (IBP) for investigation and disposition pursuant to Rule 139-B of the Revised Rules of Court. Respondent manifested that he intends to submit more evidence before the IBP. Finally, on November 27, 1989, respondent filed a supplemental motion to refer this case to the IBP, containing additional arguments to bolster his contentions in his previous pleadings. I. Preliminarily, the Court will dispose of the procedural issue raised by respondent. It is respondent's contention that the preliminary investigation conducted by the Solicitor General was limited to the determination of whether or not there is sufficient ground to proceed with the case and that under Rule 139 the Solicitor General still has to file an administrative complaint against him. Respondent claims that the case should be referred to the IBP since Section 20 of Rule 139-B provides that:

This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled DISBARMENT OR SUSPENSION OF ATTORNEYS. All cases pending investigation by the Office of the Solicitor General shall be transferred to the Integrated Bar of the Philippines Board of Governors for investigation and disposition as provided in this Rule except those cases where the investigation has been substantially completed. The above contention of respondent is untenable. In the first place, contrary to respondent's claim, reference to the IBP of complaints against lawyers is not mandatory upon the Court [Zaldivar v. Sandiganbayan, G.R. Nos. 79690-707; Zaldivar v. Gonzales, G.R. No. 80578, October 7, 1988]. Reference of complaints to the IBP is not an exclusive procedure under the terms of Rule 139-B of the Revised Rules of Court [Ibid ]. Under Sections 13 and 14 of Rule 139-B, the Supreme Court may conduct disciplinary proceedings without the intervention of the IBP by referring cases for investigation to the Solicitor General or to any officer of the Supreme Court or judge of a lower court. In such a case, the report and recommendation of the investigating official shall be reviewed directly by the Supreme Court. The Court shall base its final action on the case on the report and recommendation submitted by the investigating official and the evidence presented by the parties during the investigation. Secondly, there is no need to refer the case to the IBP since at the time of the effectivity of Rule 139B [June 1, 1988] the investigation conducted by the Office of the Solicitor General had been substantially completed. Section 20 of Rule 139-B provides that only pending cases, the investigation of which has not been substantially completed by the Office of the Solicitor General, shall be transferred to the IBP. In this case the investigation by the Solicitor General was terminated even before the effectivity of Rule 139-B. Respondent himself admitted in his motion to dismiss that the Solicitor General terminated the investigation on November 26, 1986, the date when respondent submitted his reply memorandum [Motion to Dismiss, p. 1; Record, p. 353]. Thirdly, there is no need for further investigation since the Office of the Solicitor General already made a thorough and comprehensive investigation of the case. To refer the case to the IBP, as prayed for by the respondent, will result not only in duplication of the proceedings conducted by the Solicitor General but also to further delay in the disposition of the present case which has lasted for more than thirteen (13) years. Respondent's assertion that he still has some evidence to present does not warrant the referral of the case to the IBP. Considering that in the investigation conducted by the Solicitor General respondent was given ample opportunity to present evidence, his failure to adduce additional evidence is entirely his own fault. There was therefore no denial of procedural due process. The record shows that respondent appeared as witness for himself and presented no less than eleven (11) documents to support his contentions. He was also allowed to cross-examine the complainant who appeared as a witness against him. II. The Court will now address the substantive issue of whether or not respondent committed the acts of misconduct alleged by complainant Bautista.  After a careful review of the record of the case and the report and recommendation of the Solicitor General, the Court finds that respondent committed acts of misconduct which warrant the exercise by this Court of its disciplinary power.

The record shows that respondent prepared a document entitled "Transfer of Rights" which was signed by the Fortunados on August 31, 1971. The document assigned to respondent one-half (1/2) of the properties of the Fortunados covered by TCT No. T-1929, with an area of 239.650 sq. mm., and TCT No. T-3041, with an area of 72.907 sq. m., for and in consideration of his legal services to the latter. At the time the document was executed, respondent knew that the abovementioned properties were the subject of a civil case [Civil Case No. Q-15143] pending before the Court of First Instance of Quezon City since he was acting as counsel for the Fortunados in said case [See Annex "B" of Original Complaint, p. 12; Rollo, p. 16]. In executing the document transferring one-half (1/2) of the subject properties to himself, respondent violated the law expressly prohibiting a lawyer from acquiring his client's property or interest involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil Code]. This Court has held that the purchase by a lawyer of his client's property or interest in litigation is a breach of professional ethics and constitutes malpractice [Hernandez v. Villanueva, 40 Phil. 774 (1920); Go Beltran v. Fernandez, 70 Phil. 248 (1940)]. However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that "[t]he lawyer should not purchase any interests in the subject matter of the litigation which he is conducting," does not appear anymore in the new Code of Professional Responsibility. He therefore concludes that while a purchase by a lawyer of property in litigation is void under Art. 1491 of the Civil Code, such purchase is no longer a ground for disciplinary action under the new Code of Professional Responsibility. This contention is without merit. The very first Canon of the new Code states that "a lawyer shall uphold the Constitution, obey the laws of the land and promote respect for law and legal process " (Emphasis supplied), Moreover, Rule 138, Sec. 3 of the Revised Rules of Court requires every lawyer to take an oath to 44 obey the laws [of the Republic of the Philippines] as well as the legal orders of the duly constituted authorities therein." And for any violation of this oath, a lawyer may be suspended or disbarred by the Supreme Court [Rule 138, Sec. 27, Revised Rules of Court]. All of these underscore the role of the lawyer as the vanguard of our legal system. The transgression of any provision of law by a lawyer is a repulsive and reprehensible act which the Court will not countenance. In the instant case, respondent, having violated Art. 1491 of the Civil Code, must be held accountable both to his client and to society. Parenthetically, it should be noted that the persons mentioned in Art. 1491 of the Civil Code are prohibited from purchasing the property mentioned therein because of their existing trust relationship with the latter. A lawyer is disqualified from acquiring by purchase the property and rights in litigation because of his fiduciary relationship with such property and rights, as well as with the client. And it cannot be claimed that the new Code of Professional Responsibility has failed to emphasize the nature and consequences of such relationship. Canon 17 states that "a lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him." On the other hand, Canon 16 provides that "a lawyer shall hold in trust all moneys and properties of his client that may come into his possession." Hence, notwithstanding the absence of a specific provision on the matter in the new Code, the Court, considering the abovequoted provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the prevailing jurisprudence, holds that the purchase by a lawyer of his client's property in litigation constitutes a breach of professional ethics for which a disciplinary action may be brought against him. Respondent's next contention that the transfer of the properties was not really implemented, because the land development agreement on which the transfer depended was later rescinded, is untenable. Nowhere is it provided in the Transfer of Rights that the assignment of the properties of the Fortunados to respondent was subject to the implementation of the land development agreement. The last paragraph of the Transfer of Rights provides that:

... for and in consideration of the legal services of ATTY. RAMON A. GONZALES, Filipino, married to Lilia Yusay, and a resident of 23 Sunrise Hill, New Manila, Quezon City, rendered to our entire satisfaction, we hereby, by these presents, do transfer and convey to the said  ATTY. RAMON A. GONZALES, his heirs, successor, and assigns, one-half (1/2) of our rights and interests in the abovedescribed property, together with all the improvements found therein [Annex D of the Complaint, Record, p. 28; Emphasis supplied]. It is clear from the foregoing that the parties intended the transfer of the properties to respondent to be absolute and unconditional, and irrespective of whether or not the land development agreement was implemented.  Another misconduct committed by respondent was his failure to disclose to complainant, at the time the land development agreement was entered into, that the land covered by TCT No. T-1929 had already been sold at a public auction. The land development agreement was executed on August 31, 1977 while the public auction was held on June 30, 1971. Respondent denies that complainant was his former client, claiming that his appearance for the complainant in an anti-graft case filed by the latter against a certain Gilbert Teodoro was upon the request of complainant and was understood to be only provisional. Respondent claims that since complainant was not his client, he had no duty to warn complainant of the fact that the land involved in their land development agreement had been sold at a public auction. Moreover, the sale was duly annotated at the back of TCT No. T-1929 and this, respondent argues, serves as constructive notice to complainant so that there was no concealment on his part. The above contentions are unmeritorious. Even assuming that the certificate of sale was annotated at the back of TCT No. T-1929, the fact remains that respondent failed to inform the complainant of the sale of the land to Samauna during the negotiations for the land development agreement. In so doing, respondent failed to live up to the rigorous standards of ethics of the law profession which place a premium on honesty and condemn duplicitous conduct. The fact that complainant was not a former client of respondent does not exempt respondent from his duty to inform complainant of an important fact pertaining to the land which is subject of their negotiation. Since he was a party to the land development agreement, respondent should have warned the complainant of the sale of the land at a public auction so that the latter could make a proper assessment of the viability of the project they were jointly undertaking. This Court has held that a lawyer should observe honesty and fairness even in his private dealings and failure to do so is a ground for disciplinary action against him [Custodio v. Esto, Adm. Case No. 1113, February 22, 1978, 81 SCRA 517]. Complainant also charges respondent with submitting to the court falsified documents purporting to be true copies of an addendum to the land development agreement. Based on evidence submitted by the parties, the Solicitor General found that in the document filed by respondent with the Court of First Instance of Quezon City, the signatories to the addendum to the land development agreement namely, Ramon A. Gonzales, Alfaro T. Fortunado, Editha T. Fortunado, Nestor T. Fortunado, and Angel L. Bautista —were made to appear as having signed the original document on December 9, 1972, as indicated by the letters (SGD.) before each of their names. However, it was only respondent Alfaro Fortunado and complainant who signed the original and duplicate original (Exh. 2) and the two other parties, Edith Fortunado and Nestor Fortunado, never did. Even respondent himself admitted that Edith and Nestor Fortunado only signed the xerox copy (Exh. 2-A) after respondent wrote them on May 24, 1973, asking them to sign the said  xerox copy attached to the letter and to send it back to him after signing [Rejoinder to Complainant's Reply, pp. 4-6; Rollo, pp. 327-329]. Moreover, respondent acknowledged that Edith and Nestor Fortunado

had merely agreed by phone to sign, but had not actually signed, the alleged true copy of the addendum as of May 23, 1973 [Respondent's Supplemental Motion to Refer this Case to the Integrated Bar of the Philippines, p. 16]. Thus, when respondent submitted the alleged true copy of the addendum on May 23, 1973 as Annex "A" of his Manifestation filed with the Court of First Instance of Quezon City, he knowingly misled the Court into believing that the original addendum was signed by Edith Fortunado and Nestor Fortunado. Such conduct constitutes willful disregard of his solemn duty as a lawyer to act at all times in a manner consistent with the truth. A lawyer should never seek to mislead the court by an artifice or false statement of fact or law [Section 20 (d), Rule 138, Revised Rules of Court; Canon 22, Canons of Professional Ethics; Canon 10, Rule 10.01, Code of Professional Responsibility].  Anent the first charge of complainant, the Solicitor General found that no impropriety was committed by respondent in entering into a contingent fee contract with the Fortunados [Report and Recommendation, p. 8; Record, p. 394]. The Court, however, finds that the agreement between the respondent and the Fortunados, which provides in part that: We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all expenses, for the suit, including court fees.  Alfaro T. Fortun ado [signed ] Editha T. Fortun ado [signed ] Nestor T. Fortun ado [signed ] C O N F O R M E Ramon  A. Gonzal es

[signed ] [Annex A to the Complaint, Record, p. 4]. is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly agree with a client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a lawyer may in good faith, advance the expenses of litigation, the same should be subject to reimbursement. The agreement between respondent and the Fortunados, however, does not provide for reimbursement to respondent of litigation expenses paid by him. An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous [JBP Holding Corp. v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense in consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures Patents Co., et al., 255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanctions. The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for Eusebio Lopez, Jr. in Civil Case No. Q-15490 while acting as counsel for the Fortunados against the same Eusebio Lopez, Jr. in Civil Case No. Q-15143. The Court, after considering the record, agrees with the Solicitor General's findings on the matter. The evidence presented by respondent shows that his acceptance of Civil Case No. Q-15490 was with the knowledge and consent of the Fortunados. The affidavit executed by the Fortunados on June 23, 1976 clearly states that they gave their consent when respondent accepted the case of Eusebio Lopez, Jr. [Affidavit of Fortunados, dated June 23, 1976; Rollo, p. 198]. One of the recognized exceptions to the rule against representation of conflicting interests is where the clients knowingly consent to the dual representation after full disclosure of the facts by counsel [Canon 6, Canons of Professional Ethics; Canon 15, Rule 15.03, Code of Professional Responsibility]. Complainant also claims that respondent filed several complaints against him before the Court of First Instance and the Fiscal's Office of Quezon City for the sole purpose of harassing him. The record shows that at the time of the Solicitor General's investigation of this case, Civil Case No. Q-18060 was still pending before the Court of First Instance of Quezon City, while the complaints for libel (I.S. No. 76-5912) and perjury (I.S. No. 5913) were already dismissed by the City Fiscal for insufficiency of evidence and lack of interest, respectively [Report and Recommendation, pp. 16-17; Rollo, pp. 402-403]. The Solicitor General found no basis for holding that the complaints for libel and perjury were used by respondent to harass complainant. As to Civil Case No. Q-18060, considering that it was still pending resolution, the Solicitor General made no finding on complainants claim that it was a mere ploy by respondent to harass him. The determination of the validity of the complaint in Civil Case No. Q-18060 was left to the Court of First Instance of Quezon City where the case was pending resolution. The Court agrees with the above findings of the Solicitor General, and accordingly holds that there is no basis for holding that the respondent's sole purpose in filing the aforementioned cases was to harass complainant. Grounds 6, 8 and 9 alleged in the complaint need not be discussed separately since the above discussion on the other grounds sufficiently cover these remaining grounds.

The Court finds clearly established in this case that on four counts the respondent violated the law and the rules governing the conduct of a member of the legal profession. Sworn to assist in the administration of justice and to uphold the rule of law, he has "miserably failed to live up to the standards expected of a member of the Bar." [Artiaga v. Villanueva, Adm. Matter No. 1892, July 29, 1988, 163 SCRA 638, 647]. The Court agrees with the Solicitor General that, considering the nature of the offenses committed by respondent and the facts and circumstances of the case, respondent lawyer should be suspended from the practice of law for a period of six (6) months. WHEREFORE, finding that respondent Attorney Ramon A. Gonzales committed serious misconduct, the Court Resolved to SUSPEND respondent from the practice of law for SIX (6) months effective from the date of his receipt of this Resolution. Let copies of this Resolution be circulated to all courts of the country for their information and guidance, and spread in the personal record of Atty. Gonzales. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes, JJ., concur. Gutierrez, Jr., Sarmiento, Griño-Aquino, Medialdea, Regalado, JJ., took no part. Republic of the Philippines

SUPREME COURT Manila

SECOND DIVISION

G.R. No. 180892

April 7, 2009

UST FACULTY UNION,  Petitioner, vs.

UNIVERSITY OF SANTO TOMAS, REV. FR. ROLANDO DE LA ROSA, REV. FR. RODELIO ALIGAN, DOMINGO LEGASPI, and MERCEDES HINAYON,  Respondents. DECISION

VELASCO, JR., J .:  The Case

× Ads By softonicThis Petition for × Review on Certiorari under Rule 45 seeks the reversal of the June 14, 2007 Decision1 and November 26, 2007 Resolution 2 of the× Court of Appeals (CA) in CA-G.R. SP No. 92236. The CA Decision affirmed the November 28, 2003 3 and July 29, 2005 4 Resolutions of the× Division of the National Labor Relations Commission (NLRC) in NLRC CA No. 037320-03. These Resolutions, in turn, affirmed the August 15, 2003 Decision of Labor Arbiter Edgardo M. Madriaga in NLRC NCR Case No. 10-06255-96. Entitled University of Santo Tomas Faculty Union v. University of Santo Tomas, Rev. Fr. Rolando De La Rosa, Rev. Fr. Rodelio Aligan, Domingo Legaspi, and×Hinayon, these decisions and resolutions were all in favor of respondents that were found not guilty of Unfair Labor Practice (ULP).

The Facts On September 21, 1996, the × University of Santo Tomas Faculty Union (USTFU) wrote a lette r 5 to all its members informing them of a General Assembly (GA) that was to be held on October 5, 1996. The letter contained an agenda for the GA which included an election of officers. The then incumbent president of the USTFU was × Atty. Eduardo J. Mariño, Jr. On October 2, 1996, Fr. Rodel Aligan, O.P., Secretary General of the UST, issued a Memorandum 6 allowing the request of the × Clubs of the university to hold a convocation on October 4, 1996. Members of the faculties of the university attended the convocation, including members of the USTFU, without the participation of the members of the UST administration. Also during the convocation, an election for the officers of the USTFU was conducted by a group called the× Alliance. Upon learning that the convocation was intended to be an election, members of the USTFU walked out. Meanwhile, an election was conducted among those present, and × Gamilla and other faculty members (Gamilla Group) were elected as the president and officers, respectively, of the union. Such election was communicated to the UST administration in a letter dated October 4, 1996.7 Thus, there were two (2) groups claiming to be the USTFU: the × Group and the group led by× Atty. Mariño, Jr. (Mariño Group). On October 8, 1996, the × Group filed a complaint for ULP against the UST with the × Branch of the NLRC, docketed as NLRC NCR Case No. 10-06255-96. It also filed on October 11, 1996 a complaint with the× Office of the Med-Arbiter of the× Department of Labor and Employment (DOLE), praying for the nullification of the election of the ×Group as officers of the USTFU. The complaint was docketed as Case No. NCR-OD-M-9610-016 and entitled UST Faulty Union, Gil Y. Gamilla, Corazon Qui, et al., v. Eduardo J. Mariño, Jr., Ma. Melvyn Alamis, Norma Collantes, et al. On December 3, 1996, a Collective Bargaining Agreement8 (CBA) was entered into by the× Group and the UST. The CBA superseded an existing CBA entered into by the UST and USTFU which was intended for the period of June 1, 1993 to May 31, 1998 . 9

× Ads By softonicOn January 27, 1997, Gamilla, accompanied by the barangay captain in the area, Dupont E. Aseron, and Justino Cardenas, Chief Security Officer of the UST, padlocked the office of the USTFU. Afterwards, an armed security guard of the UST was posted in front of the USTFU office. On February 11, 1997, the med-arbiter issued a Resolution, declaring the election of the× Gamilla group as null and void and ordering that this group cease and desist from performing the duties and responsibilities of USTFU officers. This Resolution was appealed to the × Director of the Bureau of Labor Relations (BLR), docketed as BLR Case No. A-8-49-97 and entitled UST Faulty Union, Gil Y. Gamilla, Corazon Qui, et al. v. Med-Arbiter Tomas F. Falconitin of the National Capital Region, Department of × Labor and Employment (DOLE), Eduardo J. Mariño, Jr., et al. Later, the director issued a Resolution dated August 15, 1997 affirming the × Resolution of the med-arbiter. His Resolution was then appealed to this × Court which rendered its November 16, 1999 Decision10 in G.R. No. 131235 upholding the ruling of the BLR. Thus, on January 21, 2000, USTFU filed a Manifestation 11 with the Arbitration Branch of the NLRC in NLRC Case No. 10-06255-96, informing it of the Decision of the Court. Thereafter, on August 15,

2003, the Arbitration Branch of the NLRC issued a Decision 12 dismissing the complaint for lack of merit. The complaint was dismissed on the ground that USTFU failed to establish with clear and convincing evidence that indeed UST was guilty of ULP. The acts of UST which USTFU complained of as ULP were the following: (1) allegedly calling for a convocation of faculty members which turned out to be an election of officers for the faculty union; (2) subsequently dealing with the Gamilla Group in establishing a new CBA; and (3) the assistance to the Gamilla Group in padlocking the USTFU office. In his Decision, the labor arbiter explained that the alleged Memorandum dated October 2, 1996 merely granted the request of faculty m embers to hold such convocation. Moreover, by USTFU’s own admission, no member of the UST administration attended or participated in the convocation.  As to the CBA, the labor arbiter ruled that when the new CBA was entered into, (1) the Gamilla Group presented more than sufficient evidence to establish that they had been duly elected as officers of the USTFU; and (2) the ruling of the med-arbiter that the election of the Gamilla Group was null and void was not yet final and executory. Thus, UST was justified in dealing with and entering into a CBA with the Gamilla Group, including helping the Gamilla Group in securing the USTFU office. The USTFU appealed the labor arbiter’s Decision to the Third Division of the NLRC which rendered a Resolution dated November 28, 2003 affirming the Decision of the labor arbiter. USTFU’s Motion for Reconsideration of the NLRC’s November 28, 2003 Resolution was denied in a Resolution dated July 29, 2005. The case was then elevated to the CA which rendered the assailed Decision affirming the Resolutions of the NLRC. The CA also denied the Motion for Reconsideration of USTFU in the assailed resolution. Hence, we have this petition. The Issues 1. The Honorable Court of Appeals committed serious and reversible error when it dismissed the Petition for Certiorari in CA-G.R. SP No. 92236 and sustained the National Labor Relations Commission’s ruling that the herein respondents are not guilty of Unfair Labor Practice despite abundance of evidence showing that Unfair Labor Practices were indeed committed. 2. The Honorable Court of Appeals committed serious and reversible error when it manifestly overlooked relevant facts not disputed by the parties which, if properly considered, would  justify a different conclusion and in rendering a judgment that is based on a misapprehension of facts.13 The Court’s Ruling The petition must be denied. UST Is Not Guilty of ULP

Petitioner claims that given the factual circumstances attendant to the instant case, the labor arbiter, NLRC, and CA should have found that UST is guilty of ULP. Petitioner enumerates the acts constituting ULP as follows: (1) Atty. Domingo Legaspi, the legal counsel for the UST, conducted a faculty meeting in his office, supplying derogatory information about the Mariño Group; (2) respondents provided the Gamilla Group with the facilities and forum to conduct elections, in the guise of a convocation; and (3) respondents transacted business with the Gamilla Group such as the processing of educational and hospital benefits, deducting USTFU dues from the faculty members without turning over the dues to the Mariño Group, and entering into a CBA with them.  Additionally, petitioner claims that the CA, NLRC, and labor arbiter ignored vital pieces of evidence. These were the Affidavit dated January 21, 2000 of Edgar Yu, the Certification dated January 27, 1997 of Alexander Sibug, and the picture of a security guard posted outside the USTFU office purportedly to "prevent entry into and exit from the union office." The concept of ULP is contained in Article 247 of the Labor Code which states:  Article 247. Concept of unfair labor practice and procedure for prosecution thereof. ––Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. (Emphasis supplied.) Notably, petitioner claims that respondents violated paragraphs (a) and (d) of Art. 248 of the Code which provide:  Article 248. Unfair labor practices of employers. ––It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce employees in the exercise of their r ight to self-organization; xxxx (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters. The general principle is that one who makes an allegation has the burden of proving it. While there are exceptions to this general rule, in the case of ULP, the alleging party has the burden of proving such ULP. Thus, we ruled in De Paul/King Philip Customs Tailor v. NLRC that "a party alleging a critical fact must support his allegation with substantial evidence. Any decision based on unsubstantiated allegation cannot stand as it will offend due process. " 14 While in the more recent and more apt case of Standard Chartered Bank Employees Union (NUBE) v. Confesor, this Court enunciated: In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion .15 (Emphasis supplied.)

In other words, whether the employee or employer alleges that the other party committed ULP, it is the burden of the alleging party to prove such allegation with substantial evidence. Such principle finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions .16 Given the above rulings of this Court, we shall now examine the acts of respondents which allegedly constitute ULP. With regard to the alleged derogatory remarks of Atty. Legaspi, the three tribunals correctly ruled that there was no evidence to support such allegation. The alleged evidence to support petitioner’s claim, the Affidavit dated January 21, 2000 of Yu, is unacceptable. In the Affidavit it is stated that: "6. That in the said meeting, Atty. Legaspi gave the participants information that are derogatory to the officers of the UST Faculty Union."17 It may be observed that the information allegedly provided during the meeting as "derogatory" is a conclusion of law and not of fact. What may be derogatory to Yu may not be punishable under the law. There was, therefore, no fact that was established by the Affidavit. Hence, petitioner failed to present evidence in support of its claim that respondents committed ULP through alleged remarks of  Atty. Legaspi.  As to the convocation, petitioner avers that: "Indeed, Respondents, under the guise of a faculty convocation, ordered the suspension of classes and required the faculty members to attend the supposed faculty convocation which was to be held at the Education Auditorium of the University of Santo Tomas."18 An examination of the Memorandum dated October 2, 1996 19 would, however, rebut such allegation. It stated: MEMORANDUM TO THE DEANS, REGENTS, PRINCIPALS  AND HEADS OF DEPARTMENTS Re: Convocation of Faculty Club  As per request of the Faculty Clubs of the different Faculties, Colleges, Schools and Institutes in the University through their Presidents, we are allowing them to hold a convocation on Friday, October 4, 1996 at 9:00 in the morning to 12:00 noon at the Education Auditorium. The officers and members of said faculty clubs are, therefore, excused from their classes on Friday from 9:00 to 12:00 noon to allow them to attend. Regular classes shall resume at 1:00 in the afternoon. Please be guided accordingly. Thank you. FR. RODEL ALIGAN, O.P. (Sgd.) Secretary General In no way can the contents of this memorandum be interpreted to mean that faculty members were required to attend the convocation. Not one coercive term was used in the memorandum to show that the faculty club members were compelled to attend such convocation. And the phrase "we are allowing them to hold a convocation" negates any idea that the UST would participate in the proceedings.

Moreover, the CA ruled properly: More importantly, USTFU itself even admitted that during the October [4], 1996 convocation/election, not a single University Official was present. And the Faculty Convocation was held without the overt participation of any UST Administrator or Official.20 In other words, the Memorandum dated October 2, 1996 does not support a claim that UST organized the convocation in connivance with the Gamilla Group.  Anent UST’s dealing with the Gamilla Group, including the processing of faculty members’ educational and hospitalization benefits, the labor arbiter ruled that: Neither are We persuaded by complainant’s stand that respondents’ acquiescence to bargain with USTFU, through Gamilla’s group, constitutes unfair labor practice. x x x Such conduct alone, uncorroborated by other overt acts leading to the commission of ULP, does not conclusively show and establish the commission of such unlawful acts.21 The fact of the matter is, the Gamilla Group represented itself to respondents as the duly elected officials of the USTFU.22 As such, respondents were bound to deal with them.  Art. 248(g) of the Labor Code provides that:  ART. 248. Unfair labor practices of employers. ––It shall be unlawful for an employer to commit any of the following unfair labor practice: xxxx (g) To violate the duty to bargain collectively as prescribed by this Code. Correlatively, Art. 250(a) of the Code provides:  ART. 250. Procedure in collective bargaining. ––The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice; Moreover, Art. 252 of the Code defines the duty to bargain collectively as:  ART. 252. Meaning of duty to bargain collectively. ––The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. (Emphasis ours.) In the instant case, until our Decision in G.R. No. 131235 that the Gamilla Group was not validly elected into office, there was no reason to believe that the members of the Gamilla Group were not the validly elected officers and directors of USTFU. To reiterate, the Gamilla Group submitted a

Letter dated October 4, 1996 whereby it informed Fr. Rolando De La Rosa that its members were the newly elected officers and directors of USTFU. In the Letter, every officer allegedly elected was identified with the Letter signed by the alleged newly elected Secretary General and President, Ma. Lourdes Medina and Gamilla, respectively. More important though is the fact that the records are bereft of any evidence to show that the Mariño Group informed the UST of their objections to the election of the Gamilla Group. In fact, there is even no evidence to show that the scheduled elections on October 5, 1996 that was supposed to be presided over by the Mariño Group ever pushed through. Instead, petitioner filed a complaint with the med-arbiter on October 11, 1996 praying for the nullification of the election of the Gamilla Group. lavvphil.zw+

 As such, there was no reason not to recognize the Gamilla Group as the new officers and directors of USTFU. And as stated in the above-quoted provisions of the Labor Code, the UST was obligated to deal with the USTFU, as the recognized representative of the bargaining unit, through the Gamilla Group. UST’s failure to negotiate with the USTFU would have constituted ULP. It is not the duty or obligation of respondents to inquire into the validity of the election of the Gamilla Group. Such issue is properly an intra-union controversy subject to the jurisdiction of the med-arbiter of the DOLE. Respondents could not have been expected to stop dealing with the Gamilla Group on the mere accusation of the Mariño Group that the former was not validly elected into office. The subsequent ruling of this Court in G.R. No. 131235 that the Gamilla Group was not validly elected into office cannot support petitioner’s allegation of ULP. Had respondents dealt with the Gamilla Group after our ruling in G.R. No. 131235 had become final and executory, it would have been a different story. As the CA ruled correctly, until the validity of the election of the Gamilla Group is resolved with finality, respondents could not be faulted for negotiating with said group. Petitioner further alleges that respondents are guilty of ULP when on January 27, 1997, "Justino Cardenas, Detachment Commander of the security agency contracted by the UST to provide security services to the university, led a group of persons, including Dr. Gil Gamilla, who padlocked the door leading to the USTFU."23Petitioner claims that "Gamilla who was and is still being favored by the employer, had no right whatsoever to padlock the union office. And, yet the Administrators of the University of Santo Tomas aided him in performing an unlawful act." Petitioner adds that an armed security guard was posted at the USTFU office in order to prevent the Mariño Group from performing its duties.24 To support such contention, petitioner provides as evidence a Certification dated January 27, 1997 25 of Sibug, a messenger of the USTFU, and a photograph 26 of a security guard standing before the USTFU office. These pieces of evidence fail to support petitioner’s conclusions.  As to the padlocking of the USTFU office, it must be emphasized that based on the Certification of Sibug, Cardenas was merely present, with Brgy. Captain Aseron of Brgy. 470, Zone 46, at the padlocking of the USTFU office. The Certification also stated that Sibug himself also padlocked the USTFU office and that he was neither harassed nor coerced by the padlocking group. Clearly, Cardenas’ mere presence cannot be equated to a positive act of "aiding" the Gamilla Group in securing the USTFU office. With regard to the photograph, while it evidences that there was indeed a guard posted at the USTFU office, such cannot be used to claim that the guard prevented the Mariño Group from performing its duties.

Petitioner again failed to present evidence to support its contention that UST committed acts amounting to ULP. In any event, it bears stressing that at the time of these events, the legitimacy of the Gamilla Group as the valid officers and directors of the USTFU was already submitted to the med-arbiter and no decision had yet been reached on the matter. Having been shown evidence to support the legitimacy of the Gamilla Group with no counter-evidence from the Mariño Group, UST had to recognize the Gamilla Group and negotiate with it. Thus, the acts of UST in support of the USTFU as the legitimate representative of the bargaining unit, albeit through the Gamilla Group, cannot be considered as ULP. Finally, petitioner claims that "despite the ruling of this Honorable Court, the University of Santo Tomas still entertains the interlopers whose claim to the leadership of the USTFU has been rejected by the [DOLE] and the Highest Tribunal. "27 Petitioner, however, fails to enumerate such objectionable actions of the UST. Again, petitioner fails to present substantial evidence in support of its claim. 1avvphi1

In sum, petitioner makes several allegations that UST committed ULP. The onus probandi falls on the shoulders of petitioner to establish or substantiate such claims by the requisite quantum of evidence. In labor cases as in other administrative proceedings, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required. In the petition at bar, petitioner miserably failed to adduce substantial evidence as basis for the grant of relief. WHEREFORE, the petition is hereby DENIED. The June 14, 2007 Decision and November 26, 2007 Resolution of the CA in CA-G.R. SP No. 92236 are hereby AFFIRMED. No costs. SO ORDERED.

PRESBITERO J. VELASCO, JR.  Associate Justice WE CONCUR:

LEONARDO A. QUISUMBING  Associate Justice Chairperson

CONCHITA CARPIO MORALES

DANTE O. TINGA

 Associate Justice

 Associate Justice

ARTURO D. BRION  Associate Justice  A T T E S T A T I O N I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING  Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO Chief Justice

Footnotes 1

Rollo, pp. 42-50. Penned by Associate Justice Normandie B. Pizarro and concurred in by  Associate Justices Edgardo P. Cruz and Hakim S. Abdulwahid. 2 Id. at 52-53. 3 Id. at 85-94. 4 Id. at 95-96. 5 Id. at 109. 6 Id. at 110. 7 Id. at 111-112. 8 Id. at 173-210. 9 Id. at 108. 10 Id. at 146-172. 318 SCRA 185. 11 Id. at 144-145. 12 Id. at 212-225. 13 Id. at 24. 14 G.R. No. 129824, March 10, 1999, 304 SCRA 448, 459. 15 G.R. No. 114974, June 16, 2004, 432 SCRA 308, 323. 16 Labor Code, Art. 247. 17 Rollo, p. 211. 18 Id. at 25. 19 Supra note 6. 20 Rollo, p. 48. 21 Id. at 222. 22 Id. at 111-112. 23 Id. at 21. 24 Id. at 31. 25 Id. at 135. 26 Id. at 136. 27 Id. at 35-36. Republic of the Philippines

SUPREME COURT Manila

SECOND DIVISION

G.R. No. 155224 August 23, 2006

VINSON B. PINEDA, Petitioner, vs.

ATTY. CLODUALDO C. DE JESUS, ATTY. CARLOS AMBROSIO and ATTY. EMMANUEL MARIANO,Respondents. DECISION

CORONA, J .: The subject of this petition for review is the April 30, 2002 decision 1 of the × Court of Appeals in CAG.R. CV No. 68080 which modified the orde r 2 of the Regional Trial Court (RTC) of Pasig City, Branch 151, in JDRC Case No. 2568 entitled Ma. Aurora D. Pineda v. Vinson B. Pineda. The facts follow.

× Ads By softonicOn April 6, 1993, Aurora Pineda filed an action for declaration of nullity of marriage against petitioner × Pineda in the RTC of Pasig City, Branch 151, docketed as JDRC Case No. 2568. Petitioner was represented by respondents × Attys. Clodualdo de Jesus, Carlos Ambrosio and× Mariano. During the pendency of the case,× Aurora proposed a settlement to petitioner regarding her visitation rights over their minor child and the separation of their properties. The proposal was accepted by petitioner and both parties subsequently filed a motion for approval of their agreement. This was approved by the trial court. On November 25, 1998, the marriage between petitioner and× Pineda was declared null and void. Throughout the proceedings, respondent counsels were well-compensated.3 They, including their relatives and friends, even availed of free products and treatments from petitioner’s dermatology clinic. This notwithstanding, they billed petitioner additional  legal fees amounting to P16.5 million4 which the latter, however, refused to pay. Instead, petitioner issued them several checks totaling P1.12 million5 as "full payment for settlement."6 Still not satisfied, respondents filed in the same trial cour t7 a motion for payment of lawyers’ fees for  P50 million.8 On April 14, 2000, the trial court ordered petitioner to pay P5 million t o× Atty. de Jesus, P2 million to× Atty. Ambrosio and P2 million to× Atty. Mariano. On appeal, the× Court of Appeals reduced the amount as follows: P1 million to × Atty. de Jesus, P500,000 to× Atty. Ambrosio and P500,000 to × Atty. Mariano. The motion for reconsideration was denied. Hence, this recourse. The issues raised in this petition are: (1) whether the Pasig RTC, Branch 151 had jurisdiction over the claim for additional legal fees and (2) whether respondents were entitled to additional legal fees.

First , a lawyer may enforce his right to his fees by filing the necessary petition as an incident of the main action in which his services were rendered or in an independent suit against his client. The former is preferable to avoid multiplicity of suits.9 The Pasig RTC, Branch 151, where the case for the declaration of nullity of marriage was filed, had  jurisdiction over the motion for the payment of legal fees. Respondents sought to collect P50 million which was equivalent to 10% of the value of the properties awarded to petitioner in that case. Clearly, what respondents were demanding was additional payment for legal services rendered in the same case. Second , the professional engagement between petitioner and respondents was governed by the principle of quantum meruit  which means "as much as the lawyer deserves. "10 The recovery of attorney’s fees on this basis is permitted, as in this case, where there is no express agreement for the payment of attorney’s fees. Basically, it is a legal mechanism which prevents an unscrupulous client from running away with the fruits of the legal services of counsel without paying for it. In the same vein, it avoids unjust enrichment on the part of the lawyer himself. Further, Rule 20.4 of the × Code of Professional Responsibility advises lawyers to avoid controversies with clients concerning their compensation and to resort to judicial action only to prevent imposition, injustice or fraud. Suits to collect fees should be avoided and should be filed only when circumstances force lawyers to resort to it.11 In the case at bar, respondents’ motion for payment of their lawyers’ fees was not meant to collect what was justly due them; the fact was, they had already been adequately paid. Demanding P50 million on top of the generous sums and perks already given to them was an act of unconscionable greed which is shocking to this Court.

× Ads By softonic As lawyers, respondents should be reminded that they are members of an honorable profession, the primary vision of which is justice. It is respondents’ despicable behavior which gives lawyering a bad name in the minds of some people. The vernacular has a word for it: nagsasamantala. The practice of law is a decent profession and not a money-making trade. Compensation should be but a mere incident .12 Respondents’ claim for additional legal fees was not justified. They could not charge petitioner a fee based on percentage, absent an express agreement to that effect. The payments to them in cash, checks, free products and services from petitioner’s business — all of which were not denied by respondents — more than sufficed for the work they did. The "full payment for settlement " 13 should have discharged petitioner’s obligation to them. The power of this × Court to reduce or even delete the award of attorneys’ fees cannot be denied. Lawyers are officers of the× Court and they participate in the fundamental function of administering  justice.14 When they took their oath, they submitted themselves to the authority of the ×Court and subjected their professional fees to judicial control. 15

WHEREFORE, the petition is hereby PARTIALLY GRANTED. The decision of the× Court of  Appeals dated April 30, 2002 in CA –G.R. CV No. 68080 is hereby MODIFIED. The award of additional attorney’s fees in favor of respondents is hereby DELETED. SO ORDERED.

RENATO C. CORONA  Associate Justice WE CONCUR:

REYNATO S. PUNO  Associate Justice Chairperson

ANGELINA SANDOVAL-GUTIERREZ, ADOLFO S. AZCUNA  Associate Justice Associate Justice

CANCIO C. GARCIA  Associate Justice  A T T E S T A T I O N I attest that the conclusions in the above × Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO  Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the × Constitution , and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opin ion of the Court’s Division.

ARTEMIO V. PANGANIBAN Chief Justice

Footnotes

1

Penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices Ruben T. Reyes (now Presiding Justice of the Court of Appeals) and Renato C. Dacudao of the Eighth Division of the Court of Appeals, rollo, pp. 48-57. 2 Penned by Acting Presiding Judge Rodolfo R. Bonifacio of the Regional Trial Court of Pasig City, Branch 151, rollo, pp. 99-102. 3 Monthly fees and other expenses which respondents claimed to be incidental to the case approximatedP5,853,058.75, rollo, p. 16. 4 P12.5 million to Atty. de Jesus; P2 million to Atty. Ambrosio and P2 million to Atty. Mariano. 5 Payments in check: a.) To Atty. de Jesus P500,000 on December 18, 1998 P500,000 on January 25, 1999 b.) To Atty. Mariano P30,000 on December 20, 1998 c.) To Atty. Ambrosio P20,000 on December 11, 1998 P30,000 on December 18, 1998 P20,000 on December 22, 1998

P20,000 on January 4, 1999 6 Per summary of fees prepared by petitioner and which was not disputed by respondents. 7 RTC of Pasig, Branch 151. 8 Representing 10% of the value of the properties granted to petitioner in the case f or declaration of nullity of marriage. 9  Agpalo, Legal and Judicial Ethics, Seventh Edition (2002), Rex Bookst ore, Inc., p. 410, citing Palanca v. Pecson, 94 Phil. 419 (1954). 10 Id., p. 395. 11 Id., p. 408, citing the Comments of IBP Committee that drafted the Code, p. 112. 12 Malecdan v. Pekas, A.C. No. 5830, 26 January 2004, 421 SCRA 7. 13 In the amount of P1.2 million. 14 Sesbreno v. Court of Appeals, 314 Phil. 884 (1995), citing Sumaoang v. Judge, RTC, Br. XXXI, Guimba, Nueva Ecija, G.R. No. 78173, 26 October 1992, 215 SCRA 136. 15 Taganas v. National Labor Relations Commission , G.R. No. 118746, 7 September 1995, 248 SCRA 133.

Republic of the Philippines

SUPREME COURT Manila EN BANC

G.R. No. 152072

July 12, 2007

ROMEO G. ROXAS and SANTIAGO N. PASTOR,  Petitioners, vs.

ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R. DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES,  Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 152104

× Ads By softonicANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R. DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES, Petitioners, vs.

THE NATIONAL HOUSING AUTHORITY, JOSE B. H. PEDROSA, ROMEO G. ROXAS and SANTIAGO N. PASTOR, Respondents. RESOLUTION PER CURIAM: 

Self-approbation, pride and self-esteem should not erode and dim the luster and dignity of this× Court. Against overweening bluster and superciliousness, nay, lordly claim, this × Court must stand steadfast, unmoved and uncompromising in upholding what is right and proper. In such posture, the mandate of affording every man the equal protection of the law cannot dwindle. Strict adherence to ethical conduct and righteousness without veering away from responsibility will foster an impregnable respect, deference and even reverence to this × Court’s decisions and pronouncements.

In a Resolution1 dated 26 September 2006, the Court En Banc ordered × Atty. Romeo G. Roxas to explain in writing why he should not be held in contempt of court and subjected to disciplinary action when he, in a letter 2dated 13 September 2006 addressed to Associate Justice Minita V. ChicoNazario with copies thereof furnished the × Justice and all the other × Justices, intimated that Justice Nazario decided G.R. No. 152072 and No. 152104 on considerations other than the pure merits of the case, and called the Supreme Court a "dispenser of injustice." The letter of × Atty. Roxas reads in part:  As an officer of the court, I am shocked beyond my senses to realize that such a wrongful and unjust decision has been rendered with you no less as the ponente. This terrible decision will go down in the annals of jurisprudence as an egregious example of how the Supreme Court, supposedly the last vanguard and bulwark of justice is itself made, wittingly or unwittingly, as a party to the wrongdoing by giving official and judicial sanction and conformity to the unjust claims of the Zuzuarreguis. W e cannot fathom how such a decision could have been arrived at except through considerations other than the pure merits of the case. Every law student reading through the case can see clearly how a brother lawyer in the profession had been so short-changed by, ironically, the most sacred and highest institution in the administration and dispensation of justice. xxxx This is an unjust and unfair decision, to say the least. x x x We cry out in disbelief that such an impossible decision could spring forth from the Supreme Court, the ultimate administrator and last bulwark of justice. As it stands, instead of being an administrator of justice, the Supreme Court is ironically a dispenser of injustice. Under the circumstances, we hope you will forgive us in expressing our sentiment in this manner as we are utterly frustrated and dismayed by the elementary injustice being foisted upon us by the× Court, no less. Given the facts of the case, we will never understand what moved the Honorable Justice to decide as she did and what forces and influences caused her to reason out her decision in such an unfair and unjust manner as to compromise the reputation, integrity and dignity itself of the Supreme Court, as a venerable institution of justice.  As lawyers, we are officers of the× Court so that, while we are being underservedly pained by the seething injustice of the decision, we will submit to the authority of × Court of the Land, even as our reverence for it has been irreversibly eroded, thanks to your Honor’s Judgment. xxxx  As for Your Honor, sleep well if you still can. In the end, those we address as × Justice in this earthly life will [be] judged by the × Dispenser of Justice – where only the merits of × Honor ’s life will be relevant and material and where technicalities can shield no one from his or her wrongdoings. Good day to you, Madame Justice! The decision referred to in the letter i s the Court’s decision 3 in these consolidated cases where× Attys. Roxas and Santiago N. Pastor were ordered to return, among others, to × Antonio de Zuzuarregui, Jr., et al. the amount ofP17,073,224.84.

× Ads By softonicRoxas and× Pastor filed their Motion for Reconsideration 4 on 8 March 2006 which they followed with an Executive Summar y5the day after. In a resolution dated 22 March 2006, the× Courtnoted the Executive Summary and deferred action on the ×Motion for Reconsideration.6 On 27 March 2006, the × Court denied with finality the × Motion for Reconsideration as the basic issues have already been passed upon and there being no substantial argument to warrant the modification of the× Court’s decision.7 On 30 March 2006, Roxas and Pastor filed a Motion for Leave to File Supplemental Motion for Reconsideration, together with the Supplemental Motion for Reconsideration . 8 The following day, they filed a Motion for Leave to File Motion to Set the Case for Oral Argument, together with the Motion to Set the Case for Oral Argument (on the Motion for Reconsideration and the Supplement thereto).9 In a Manifestation dated 3 April 2006, Roxas and Pastor asked that a typographical error appearing in the affidavits of service attached to the motions be corrected and that the Motion to Set Case for Oral Argument be granted .10 On 7 April 2006, Antonio de Zuzuarregui, Jr., et al., filed a Motion for Leave to File Comment on/Opposition to Motion for Reconsideration.11 On 7 June 2006, Roxas and Pastor filed an Urgent and Compelling Motion for Reconsideration (with Motion to Refer the Case to the En Banc) .12 On 7 June 2006, the Office of then Chief Justice Artemio V. Panganiban received from Roxas a letter (with enclosures)13 dated 6 June 2006 which contained, inter alia, the following: This is an unjust and unfair decision, to say the least. x x x We cry out in disbelief that such an impossible decision could spring forth from the Supreme Court, the ultimate administrator and last bulwark of justice. As it stands, instead of being an administrative of justice, the Supreme Court will ironically be a dispenser of injustice. Under the circumstances, we cannot avoid to suspect the bias and partiality of the ponente of the case who we surmise must have been moved by considerations, other than noble. In this regard, Mr. Chief Justice, we implore Your Honor, as steward of the Highest Court of the land, to take appropriate steps to forthwith correct this anomalous decision by first, referring the case to the Supreme Court En Banc, and then, after allowing us the opportunity to be heard orally En Banc and after judiciously considering our "Urgent and Compelling Motion for Reconsideration", thereafter reversing the decision of this Honorable Court’s First Division. Finally, in order to cleanse the Supreme Court of the blot caused by this case, we most ardently implore upon Your Honor to immediately direct the conduct of an investigation of how such an impossible decision was rendered at all and to sanction the perpetrators thereon.  As the Chief Justice, we have faith in you, Sir, to rectify a grievous wrong inflicted upon a member of the Bar and to restore the good image and reputation of the Court by causing the High Court to reverse such an inconceivable decision that is unfair, unjust and illegal, being an [impairment] of the obligation of contracts and against the principle of estoppel. Said letter was indorsed to the Clerk of Court of the First Division for its inclusion in the agenda. 14

On 12 July 2006, the Court resolved to (a) Note Without Action (1) the motion of petitioners Roxas and Pastor for leave to file supplemental motion for reconsideration of the decision dated January 31, 2006; (2) the aforesaid supplemental motion for reconsideration; and (3) respondents Zuzuarreguis’ motion for leave of court to file comment/opposition to motion for reconsideration, said motion for reconsideration having been denied with finality in the resolution of 27 March 2006; (b) Deny for lack of merit said petitioners’ (1) motion for leave to file motion to set case for oral argument; and (2) motion to set the case for oral argument [on the motion for reconsideration and the supplement thereto]; (c) Note petitioners’ manifestation regarding the correction of typographical error in the affidavit of service of their motion for leave to file motion to set case for oral argument and said motion to set case for oral arguments; (d) Deny the urgent and compelling second motion for reconsideration of petitioners Romeo G. Roxas and Santiago N. Pastor of the decision dated 31 January 2006 [with motion to refer the case to the Court En Banc], considering that a second motion for reconsideration is a prohibited pleading under Sec. 2, Rule 52, in relation to Sec. 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended; (e) Deny said petitioners’ motion to refer the cases to the Court En Banc, the latter not being an appellate court to which decisions or resolutions of the Divisions may be appealed, pursuant to SC Circular 2-89 dated 7 February 1989, as amended by the resolution of 18 November 1993; and (f) Note the First Indorsement dated 9 June 2006 of the Hon. Chief Justice Artemio V. Panganiban referring for inclusion in the agenda the thereto attached letter [with enclosures] of Atty. Romeo G. Roxas, relative to these cases .15 On 13 September 2006, on motion by the Zuzuarreguis for the issuance of entry of judgment, the Court ordered that entry of judgment in these cases be made in due course .16 On 14 September 2006, Roxas and Pastor filed an Urgent Motion for Clarification of Judgment . 17 On even date, the letter subject of this contempt proceeding dated 13 September 2006 was received by Justice Nazario with copies thereof furnished the Chief Justice and all the other Associate Justices . 18 On 18 September 2006, Roxas and Pastor filed a Motion to Withdraw said motion and instead prayed that their Urgent and Compelling Motion for Clarification of Judgment dated 15 September 2006 be admitted.19 On 20 September 2006, the Court, treating petitioners Roxas and Pastor’s Urgent Motion for Clarification of Judgment as a second motion for reconsideration, denied the same for lack of merit. We also noted without action the motion to withdraw said motion for clarification with intention to refile the same with the necessary corrections, and referred to the Court En Banc the letter dated 13 September 2006.20 In a resolution dated 26 September 2006, this Court ordered Atty. Roxas to explain in writing why he should not be held in contempt of court and subjected to disciplinary action on account of the letter he sent to Justice Nazario with copies thereof furnished the Chief Justice and all the other Associate Justices. On 22 November 2006, the Court noted without action petitioner Roxas and Pastor’s Urgent and Compelling Motion for Clarification of Judgment in light of the denial of their Urgent Motion for Clarification of Judgment on 20 September 2006 which the Court treated as a second motion for reconsideration.21 On 16 November 2006, by way of compliance with the 26 September 2006 resolution, Atty. Roxas submitted his written explanation. His letter stated: With all due respect to this Honorable Court, and beyond my personal grievances, I submit that the ruling in the subject consolidated cases may not have met the standards or adhered to the basic

characteristics of fair and just decision, such as objectivity, neutrality and conformity to the laws and the constitution. x x x xxxx  Aside from the fact that the aforesaid ruling appears to be seriously flawed, it also casts grave aspersions on my personal and professional integrity and honor as a lawyer, officer of the court and advocate of justice. xxxx These implications, Your Honors, which I find hard to accept, have caused me severe anxiety, distress and depredation and have impelled me to exercise my right to express a legitimate grievance or articulate a bona fide and fair criticism of this Honorable Court’s ruling. While certain statements, averments and/or declarations in my 13 September 2006 letter may have been strongly-worded and construed by this Honorable Court as tending to ascribe aspersions on the person of the Honorable Associate Justice Minita V. Chico-Nazario, may I assure Your Honors that no such ascription was ever intended by the undersigned. Quite notably, despite my aggrieved sentiments and exasperated state, I chose to ventilate my criticisms of the assailed ruling in a very discreet and private manner. Accordingly, instead of resorting to public criticism through media exposure, I chose to write a personal letter confined to the hallowed halls of the highest tribunal of the land and within the bounds of decency and propriety. This was done in good faith with no intention whatsoever to offend any member, much less tarnish the image of this Honorable Court. Nonetheless, it is with humble heart and a repentant soul that I express my sincerest apologies not only to the individual members of this Honorable Court but also to the Supreme Court as a revered institution and ultimate dispenser of justice.  As earlier explained, I was merely exercising my right to express a legitimate grievance or articulate a bona fide and fair criticism of this Honorable Court’s ruling. If the nature of my criticism/comment or the manner in which it was carried out was perceived to have transgressed the permissible parameters of free speech and expression, I am willing to submit myself to the sound and judicious discretion of this Honorable Court. x x x  After reviewing the records of these cases, We firmly stand by our decision which Atty. Roxas described to be unjust, unfair and impossible, and arrived at through considerations other than the pure merits of the case. Atty. Roxas’s insistence that said decision did not meet the standards or adhered to the basic characteristics of fair and just decision, such as objectivity, neutrality and conformity to the laws and the Constitution, is simply without basis. The fact that the decision was not in his favor does not mean that the same was contrary to our laws and was not rendered in a fair and impartial manner. In one case,22 we had this to say when a lawyer challenged the integrity not only of the Court of  Appeals but also of this Court by claiming that the courts knowingly rendered an unjust judgment: We note with wonder and amazement the brazen effrontery of respondent in assuming that his personal knowledge of the law and his concept of justice are superior to that of both the Supreme Court and the Court of Appeals. His pretense cannot but tend to erode the people's faith in the

integrity of the courts of justice and in the administration of justice. He repeatedly invoked his supposed quest for law and justice as justification for his contemptuous statements without realizing that, in seeking both abstract elusive terms, he is merely pursuing his own personal concept of law and justice. He seems not to comprehend that what to him may be lawful or just may not be so in the minds of others. He could not accept that what to him may appear to be right or correct may be wrong or erroneous from the viewpoint of another. x x x. It is to be noted that prior to his letter dated 13 September 2006, Atty. Roxas wrote then Chief Justice Artemio V. Panganiban asking for an immediate investigation of "how such an impossible decision was rendered at all and to sanction the perpetrators thereon." It is to be stressed that then Chief Justice Panganiban was a member of the Division who concurred in the ponencia written by Justice Nazario. The former and the other three members 23 of the Division did not find anything illegal, unjust or unfair about the decision; otherwise, they would have registered their dissents. There was none. The decision was arrived at after a thorough deliberation of the members of the Court.  Atty. Roxas faulted the Supreme Court when "(o)ur two Motions for Reconsiderations were unceremoniously denied via Minute Resolutions without addressing at all the merits of our very solid arguments. We cannot help but observe the High Court’s resort to technicalities (that a second motion for reconsideration is a prohibited pleading) if only for it to avoid meeting the merits and arguments directly." It is settled that the Court is not duty-bound to render signed Decisions all the time. It has ample discretion to formulate Decisions and/or minute Resolutions, provided a legal basis i s given, depending on its evaluation of a case.24 In the case before us, after going over the motion for reconsideration filed by Roxas and Pastor, we did not find any substantial argument that would merit the modification of our decision and that would require an extended resolution since the basic issues had already been passed upon. In his letter subject of this contempt proceeding, Atty. Roxas accused Justice Nazario of deciding the case through "considerations other than the pure merits of the case." He averred that "we will never understand what moved the Honorable Justice to decide as she did and what forces and influences caused her to reason out her decision in such an unfair and unjust manner as to compromise the reputation, integrity and dignity itself of the Supreme Court, as a venerable institution of justice." He then ended by mocking her when he said "sleep well if you still can" and that her "earthly life will [be]  judged by the Supreme Dispenser of Justice where only the merits of Your Honor’s life will be relevant and material and where technicalities can shield no one from his or her wrongdoings."  As to the Court, supposedly the last vanguard and bulwark of justice, he likewise accuses it of making itself, wittingly or unwittingly, a party to the wrongdoing by giving official and judicial sanction and conformity to the unjust claims of the adverse party. He added: "This is an unjust and unfair decision, to say the least. x x x We cry out in disbelief that such an impossible decision could spring forth from the Supreme Court, the ultimate administrator and last bulwark of justice. As it stands, instead of being an administrator of justice, the Supreme Court is ironically a dispenser of injustice." In his letter of explanation, Atty. Roxas extended apologies to Justice Nazario, to the other members of the High Court and to the High Court itself as a revered institution and ultimate dispenser of  justice. He said he was merely exercising his right to express a legitimate grievance or articulate a bona fide and fair criticism of the Honorable Court’s ruling. He explained that his criticism of the assailed ruling was done in good faith with no intention whatsoever to offend any member, much less tarnish the image of the Court. Instead of resorting to public criticism through media exposure,

he chose to ventilate his criticism in a very discreet and private manner by writing a personal letter confined to the hallowed halls of the Court and within bounds of decency and propriety. We find the explanations of Atty. Roxas unsatisfactory. The accusation against Justice Nazario is clearly without basis. The attack on the person of Justice Nazario has caused her pain and embarrassment. His letter is full of contemptuous remarks tending to degrade the dignity of the Court and erode public confidence that should be accorded it. To prevent liability from attaching on account of his letter, he invokes his rights to free speech and privacy of communication. The invocation of these rights will not, however, free him from liability. As already stated, his letter contained defamatory statements that impaired public confidence in the integrity of the judiciary. The making of contemptuous statements directed against the Court is not an exercise of free speech; rather, it is an abuse of such right. Unwarranted attacks on the dignity of the courts cannot be disguised as free speech, for the exercise of said right cannot be used to impair the independence and efficiency of courts or public respect therefor and confidence therein . 25 Free expression must not be used as a vehicle to satisfy o ne’s irrational obsession to demean, ridicule, degrade and even destroy this Court and its magistrates .26 This Court does not curtail the right of a lawyer, or any person for that matter, to be critical of courts and judges as long as they are made in properly respectful terms and through legitimate channels. This Court in In re: Almacen27 said: Moreover, every citizen has the right to comment upon and criticize the actuations of public officers. This right is not diminished by the fact that the criticism is aimed at a judicial authority, or that is it articulated by a lawyer. Such right is especially recognized where the criticism concerns a concluded litigation, because then the court’s actuation are thrown open to public consumption. x x x xxxx Courts and judges are not sacrosanct. They should and expect critical evaluation of their performance. For like the executive and the legislative branches, the judiciary is rooted in the soil of democratic society, nourished by the periodic appraisal of the citizen whom it is expected to serve. Well-recognized therefore is the right of a lawyer, both as an officer of the court and as a citizen, to criticize in properly respectful terms and through legitimate channels the acts of courts and judges. x xx xxxx Hence, as a citizen and as officer of the court, a lawyer is expected not only to exercise the right, but also to consider it his duty to avail of such right. No law may abridge this right. Nor is he professionally answerable for a scrutiny into the official conduct of the judges, which would not expose him to legal animadversion as a citizen. xxxx But it is the cardinal condition of all such criticism that it shall be bona fide and shall not spill over the walls of decency and propriety. A wide chasm exists between fair criticism, on the one hand, and abuse and slander of courts and the judges thereof, on the other. Intemperate and unfair criticism is a gross violation of the duty of respect to courts. It is such a misconduct that subjects a lawyer to disciplinary action.

In the case at bar, we find the statements made by Atty. Roxas to have been made mala fides and exceeded the boundaries of decency and propriety. By his unfair and unfounded accusation against Justice Nazario, and his mocking of the Court for allegedly being part of a wrongdoing and being a dispenser of injustice, he abused his liberty of speech. In In re: Wenceslao Laureta,28 cited in United BF Homeowners v. Sandoval-Gutierrez ,29 we ruled: To allow litigants to go beyond the Court’s resolution and claim that the members acted "with deliberate bad faith" and rendered an "unjust resolution" in disregard or violation of the duty of their high office to act upon their own independent consideration and judgment of the matter at hand would be to destroy the authenticity, integrity and conclusiveness of such collegiate acts and resolutions and to disregard utterly the presumption of regular performance of official duty. To allow such collateral attack would destroy the separation of powers and undermine the role of the Supreme Court as the final arbiter of all justiciable disputes.  x x x x  In resume, we find that respondent Ilustre has transcended the permissible bounds of fair comment and criticism to the detriment of the orderly administration of justice in her letters addressed to the individual Justices quoted in the show-cause Resolution of this court en banc , particularly the under lined portions thereof; in the language of the charges she filed before the Tanodbayan quoted and underscored in the same Resolution; in her statements, conduct, acts and charges against the Supreme Court and/or the official actions of the justices concerned and her ascription of improper motives to them; and in her unjustified outburst that she can no longer expect justice from this Court. The fact that said letters are not technically considered pleadings, nor the fact that they were submitted after the main petition had been finally resolved does not detract from the gravity of the contempt committed. The constitutional right of freedom of speech or right to privacy cannot be used as a shield for contemptuous acts against the Court.  Atty. Roxas likewise cannot hide under the mantle of the right to privacy. It must be disclosed that prior to his letter addressed to Justice Nazario, Atty. Roxas first wrote then Chief Justice Panganiban asking for an investigation as to how the assailed decision was rendered and to sanction the perpetrators. The accusations contained therein are similar to those in his letter to Justice Nazario. The fact that his letters were merely addressed to the Justices of this Court and were not disseminated to the media is of no moment. Letters addressed to individual Justices, in connection with the performance of their judicial functions, become part of the judicial record and are a matter of concern for the entire court.30 As can be gathered from the records, the letter to then Chief Justice Panganiban was merely noted and no show-cause order was issued in the hope that Atty. Roxas would stop his assault on the Court. However, since Atty. Roxas persisted in attacking the Court via his second letter, it behooved the Court to order him to explain why he should not be held in contempt of court and subjected to disciplinary action. Under the circumstances, we find Atty. Romeo G. Roxas guilty of indirect contempt of court under Section 3, Rule 71 of the 1997 Rules of Civil Procedure, as amended. Said section reads: Section 3. Indirect contempt to be punished after charge and hearing.  – After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt: xxxx

d. Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice; x x x. xxxx Section 7, Rule 71 of the 1997 Rules of Civil Procedure, as amended, provides the penalty for indirect contempt as follows: Sec. 7. Punishment for indirect contempt. – If the respondent is adjudged guilty of indirect contempt committed against a Regional Trial Court or a court of equivalent or higher rank, he may be punished by a fine not exceeding thirty thousand pesos or imprisonment not exceeding six (6) months or both. x x x. The disrespect caused to the Court by Atty. Roxas merits a fine of P30,000.00 with a warning that a repetition of a similar act will warrant a more severe penalty. With his contemptuous and defamatory statements, Atty. Roxas likewise violated Canon 11 of the Code of Professional Responsibility, particularly Canons 11.03 and 11.04.  These provisions read: 1avvphi1

CANON 11 -- A LAWYER SHALL OBSERVE AND MAINTAIN THE RESPECT DUE TO THE COURTS AND TO JUDICIAL OFFICERS AND SHOULD INSIST ON SIMILAR CONDUCT BY OTHERS xxxx Rule 11.03. – A lawyer shall abstain from scandalous, offensive and menacing language or behavior before the Courts. Rule 11.04. – A lawyer shall not attribute to a Judge motives not supported by the record or have no materiality to the case. It is the duty of a lawyer as an officer of the court to uphold the dignity and authority of the courts and to promote confidence in the fair administration of justice and in the Supreme Court as the last bulwark of justice and democracy.31 Respect for the courts guarantees the stability of the judicial institution. Without such guarantee, the institution would be resting on a very shaky foundation.32 When confronted with actions and statements, from lawyers and non-lawyers alike, that tend to promote distrust and undermine public confidence in the judiciary, this Court will not hesitate to wield its inherent power to cite any person in contempt. In so doing, it preserves its honor and dignity and safeguards the morals and ethics of the legal profession . 33 WHEREFORE, premises considered, Atty. Romeo G. Roxas is found GUILTY of indirect contempt of court. He is hereby FINED the amount of P30,000.00 to be paid within ten (10) days from receipt of this Resolution and WARNED that a repetition of a similar act will warrant a more severe penalty. Let a copy of this Resolution be attached to Atty. Roxas’ personal record in the Office of the Bar Confidant and copies thereof be furnished the Integrated Bar of the Philippines. SO ORDERED.

REYNATO S. PUNO Chief Justice

LEONARDO A. QUISUMBING

CONSUELO YNARES-SANTIAGO

 Associate Justice

 Associate Justice

On Leave

ANTONIO T. CARPIO

ANGELINA SANDOVAL-GUTIERREZ*

 Associate Justice

 Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ

RENATO C. CORONA

 Associate Justice

 Associate Justice

CONCHITA CARPIO MORALES

ADOLFO S. AZCUNA

 Associate Justice

 Associate Justice

DANTE O. TINGA

MINITA V. CHICO-NAZARIO

 Associate Justice

 Associate Justice

CANCIO C. GARCIA

PRESBITERO J. VELASCO, JR.

 Associate Justice

 Associate Justice

ANTONIO EDUARDO B. NACHURA  Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO Chief Justice

Footnotes *

 On leave. Rollo, of G.R. No. 152072, pp. 813-814. 2 Id. at 807-812. 3 The antecedents are stated in the decision promulgated on 31 January 2006. Rollo, Vol. 2, pp. 417-438. 4 Id. at 445-492. 5 Id. at 439-444. 6 Id. at 493. 7 Id. at 495. 8 Id. at 496-524. 9 Id. at 519-555. 10 Id. at 556-566. 11 Id. at 567-569. 12 Id. at 571-689. 13 Id. at 691-755. 14 Id. at 690. 15 Id. at 756-757. 16 Id. at 762-C. 17 Id. at 764-774. 18 Id. at 807-812. 19 Id. at 775-804. 1

20

Id. at 805. Id. at 823. 22 Montecillo v. Gica, G.R. No. 30380, 21 October 1974, 60 SCRA 234, 246. 23  Associate Justices Consuelo Ynares-S antiago, Ma. Alicia Austria-Martinez and Romeo J. C allejo, Sr. (now retired). 24 In Re: Wenceslao Laureta, 12 March 1987, 148 SCRA 382, 417. 25 In re: Published Alleged Threats Against Members of the Court in the Plunder Case Hurled by Atty. Leonard de Vera,  A.M. No. 01-12-03-SC, 29 July 2002, 385 SCRA 285, 291. 26 Re: Letter Dated 21 February 2005 of Atty. Noel S. Sorreda, A.M. No. 05-3-04-SC, 22 July 2005, 464 SCRA 32, 45. 27 G.R. No. 27654, 18 February 1970, 31 SCRA 562, 576-580. 28 Supra note 24 at 420-421. 29  A.M. No. CA-99-30, 29 September 1999, 315 SCRA 423, 435- 436. 30 Mercado v. Security Bank Corporation, G.R. No. 160445, 16 February 2006, 482 SCRA 501, 516. 31 In re: Published Alleged Threats Against Members of the Court in the Plunder Case Hurled by Atty. Leonard de Vera, supra note 25 at 292. 32 Mercado v. Security Bank Corporation, G.R. No. 160445, 16 February 2006, 482 SCRA 501, 519-519 citing Salcedo v. Hernandez, 61 Phil. 724. 33 In re: Wenceslao Laureta, supra note 24 at 403. 21

Republic of the Philippines

SUPREME COURT Manila

SECOND DIVISION

G.R. No. 169298

July 9, 2008

LAW FIRM OF TUNGOL & TIBAYAN,  Petitioner, vs.

COURT OF APPEALS and SPOUSES RENATO M. INGCO & MA. LUISA S. INGCO, Respondents. DECISION

QUISUMBING, J .: 

× Ads By softonicThis petition for review assails the Decision1 dated March 17, 2005 of the × Court of  Appeals in CA-G.R. SP No. 85540, denying, among others, the prayer of petitioner × Firm of Tungol & Tibayan for a greater sum of contingent attorney’s fees. Said Decision had reversed and set aside the April 30, 2004 Resolution 2 of the× Office of the President, granting the law firm additional attorney’s fees. The facts are as follows: Private respondents Renato M. Ingco and Ma. Luisa S. Ingco hired the services of petitioner law firm to enforce delivery of a land title covering a 300-square meter lot in Tivoli Royale Subdivision, Quezon City. Atty. Abelardo M. Tibayan, a partner in said law firm, specified in a letter to respondent× Ingco that the graduated attorney’s fees the firm would charge would depend on the circumstances of the case. This agreement was embodied in × Atty. Tibayan’s "Case Referral and  Acceptance Confirmation,"3 (hereinafter referred to as contract) dated November 9, 1998. In behalf of the × Ingcos, the law firm filed a Complaint4 against Villa Crista Monte Realty and Development Corporation, Inc. (Villa Crista) before the × Housing and Land Use Regulatory Board (HLURB). The complaint alleged that the × Ingcos had paid the contract price of P5.1 million for the

lot, but× Crista did not deliver the title to the × Ingcos and refused to execute the final deed of sale in their favor.  After a series of negotiations,× Crista entered into a compromise agreement5 with the× Ingcos to refundP4,845,000 with interest, and in case of breach, P200,000 liquidated damages. The HLURB approved the compromise and rendered a judgment upon compromise on December 21, 1999. Despite the compromise agreement, however ,× Crista did not pay the× Ingcos. This prompted the HLURB to issue a writ of execution,6ordering the ex-officio sheriff of the Regional Trial Court (RTC) to execute the judgment. The writ required × Cristato refund to the spouses Ingco P5,081,856; to pay them P200,000 liquidated damages; and to seize, garnish or levy any property o f × Crista to satisfy the judgment. The ex-officio sheriff levied and auctioned ten lots belonging to Villa Crista .7 The spouses bought three of the ten lots at a bid price of P7,193,505.56, which includes the P5.1 million contract price for the 300- square meter lot,P1,350,000 attorney’s fees and other expenses. The sheriff issued final deeds of sale8 to the× Ingcos after Villa Crista failed to redeem the three lots within the redemption period. Thereafter, in a Letter 9 dated August 2, 2001, the × Ingcos terminated the law firm’s services. They alleged that they had already paid the law firm P1.5 million in attorney’s fees. In a Lette r 10 dated  August 8, 2001, petitioner’s Atty. Danilo N. Tungol wrote the × Ingcos and expressed his surprise at the termination of their firm’s services since, to their knowledge, the spouses were satisfied with its services. Atty. Tungol contended that the spouses terminated the law firm’s services because they merely wanted to escape paying the firm. Atty. Tibayan also wrote the Ingcos a similar letter .11

× Ads By softonicThe law firm eventually also filed with the HLURB a Motion and ×Statement of Claim for  Attorney’s Lien12 on August 20, 2001, and a Motion to × Enforce the Attorney’s Lien13 on November 12, 2001. Both motions sought to recover 25% of the excess of the existing prevailing selling price or fair market value of the three levied lots over the total bid price and expenses ofP7,193,505.56 .14 It also filed a damage suit15 against its former clients before the RTC.  According to the law firm, the spouses Ingco still owed attorney’s fees of  P4,506,500 on top of the advance payment of P1.5 million. It asserted that as agreed upon in their contract, the law firm shall be entitled to additional attorney’s fees equivalent to 25% of the excess of the pric e value of the three lots over the total bid price and expenses in case Villa Crista fails to redeem the three lots the spouses bought in the auction sale. Since the lots were not redeemed, the property was consolidated in the name of the spouses. The addi tional attorney’s fees, according to the law firm, were due because of the additional benefit derived by the spouses since the three lots which Villa Crista failed to redeem were worth more than the bid price and expenses the spouses paid.  Allegedly, the three lots measuring 1,378 square meters, were worth P17,000 per square meter or P23,426,000. Petitioner also claimed that after the consolidation of the titles, it allegedly prepared a motion for titling of the property in the name of the Ingcos, but the latter allegedly took all original copies of the final deeds and subsequently terminated its services. The Ingcos opposed16 the aforementioned motions, contending that it terminated the services of the firm because it demanded P70,000 for notarial fees. They explained that the three lots would cost only P7,500 and notP17,000 per square meter, as claimed by the firm.

In an Order 17 dated December 10, 2001, HLURB Arbiter Rowena C. Balasolla, granted the Motion and Statement of Claim for Attorney’s Lien and ordered the annotation of the said attorney’s lien on Transfer Certificates of Title (TCT) Nos. 162238, 162319 and 162350. The spouses Ingco sought reconsideration of the order but its motion for reconsideration was denied. In an Order 18 dated May 6, 2003, HLURB Arbiter Balasolla also granted the firm’s Motion to Enforce Attorney’s Lien, and ordered the spouses jointly and severally, to pay the firm  P4,506,500. The HLURB Board,19 on appeal, reversed the arbiter’s order. In a Decision 20 dated October 8, 2003, the HLURB Board declared that a realized gain of P23,426,000 was premature; that the payment of P1.5 million was more than sufficient and reasonable compensation; and that the firm was not entitled to an additional compensation ofP4,506,500. The firm appealed to the Office of the President. In a Resolution dated April 30, 2004, the Office of the President set aside the HLURB’s decision and affirmed the arbiter’s order. It also denied the spouses’ motion for reconsideration.21 On March 17, 2005, the HLURB Regional Director Jesse A. Obligacion issued a writ of execution,22 ordering the Ingcos to pay the firm P4,506,500. On appeal, the Court of Appeals reversed and set aside the Resolution of the Office of the President. The appellate court ruled, WHEREFORE, premises considered, the petition for review with prayer for injunction is GRANTED  . The Resolution and Order dated April 30, 2004 and July 9, 2004, respectively, of the Office of the President in O.P. Case No. 03-J-620 are hereby REVERSED   and SET ASIDE   and the decision dated October 8, 2003 of the HLURB Board of Commissioners is REINSTATED  . The HLURB arbiter concerned is hereby permanently ENJOINED   from executing or implementing the orders dated December 10, 2001 and May 6, 2003.

SO ORDERED.23 Petitioner’s motion for reconsideration with motion for inhibition 24 was denied. Hence, this petition via Rule 45 of the Rules of Court. Petitioner law firm contends that the appellate court committed the following errors: I. THE ACT OF RESPONDENT COURT IN INTERPRETING AND MAKING ITS OWN CONSTRUCTION OF THE CLEAR AND UNAMBIGUOUS TERMS OF THE CONTRACT BETWEEN PETITIONER AND PRIVATE RESPONDENT IS NOT IN ACCORD WITH LAW  AND APPLICABLE DECISIONS OF THE SUPREME COURT. II. [THE] ASSAILED DECISION [,] SOLELY BASED ON RESPONDENT COURT’S INTERPRETA[T]ION AND OWN CONSTRUCTION OF THE CONTRACT, WHICH WAS NEVER RAISED AS AN ISSUE, AMOUNTS TO DEPRIVATION OF PETITIONER’S FUNDAMENTAL RIGHT TO DUE PROCESS.

III. THE REFUSAL OF THE HONORABLE JUSTICES OF RESPONDENT COURT TO VOLUNTAR[IL]Y INHIBIT THEMSELVES DESPITE [THE] JUSTIFICATIONS PETITIONER RAISED, IS NOT IN ACCORD WITH SECTION 1, RULE 137 OF THE REVISED RULES OF COURT AND DEPARTS FROM THE ACCEPTED AND NORMAL COURSE OF JUDICIAL DISPOSITIONS.25 Simply, the issues for our resolution are: (1) Did the Court of Appeals commit reversible error when it interpreted the allegedly unambiguous terms of the contract? (2) Did the Court of Appeals justices err in refusing to inhibit themselves from the case? Invoking Article 137026 of the Civil Code and citing jurisprudence, petitioner argues that the Court of  Appeals erred in interpreting a clear and unambiguous contract. It insists that a clearly worded contract leaves no doubt on the intention of the parties, and requires no interpretation but only literal application. It points out that the appellate court and respondents did not even say that the terms of the contract are unclear and ambiguous.27  According to the law firm, the Court of Appeals erred when it concluded that since the subject of the contract was only the lot worth P5.1 million, and it was only the delivery of title or refund of its value which petitioner committed to enforce, these should be the only basis for attorney’s fees. Petitioner counters that the contract contained no wording to that effect and the parties had no such intention for otherwise, the contract would have been so worded. Petitioner insists that it is not the province of the courts to amend a contract by construction, nor to make a new contract for the parties, interject material stipulations, nor even to read into the contract words which it did not contain .28 The law firm likewise stressed that the compromise, judgment, execution, levy, sale and finally, consolidation of ownership in favor of private respondents constitute a series of events which petitioner persistently aimed at and worked on. The identification of the three lots was the result of its continuous and tedious search and verifications of the numerous properties of the erring developer, which were traced by petitioner. According to the law firm, after the levy, the developer even attempted to defeat the sale of the three lots by submitting affidavits of adverse claims, but the law firm thwarted the attempt. Petitioner avers there was no truth to the claims of the Ingcos that it was not through the law firm’s efforts that the three lots were recovere d because those were acquired through the execution sale. To entertain such premise, says petitioner, would allegedly render nugatory every contract for legal services, and then every counsel, despite his efforts, would not deserve his fees every time execution sale became necessary to enforce judgment .29 In their comment,30 the Ingcos explain that they were in disbelief when petitioner charged them P70,000 as notarization fee for the final deeds. They had the same deeds notarized by another lawyer for only P900. Further, the law firm would not let them borrow the case files such that their relationship turned sour, prompting them to terminate the services of the firm. They deny gaining any extra material benefit from the auction of the three lots and stress that they even doubt whether any benefit would accrue to them, considering the numerous claims annotated on the titles. The spouses add that the Court of Appeals did not interpret the contract, but applied its literal meaning to the facts of the case in accord with law and jurisprudence.  At this juncture, as to the interpretation of contracts, we invite attention to Article 1370, paragraph 1 of the Civil Code which states that: "If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former."

Moreover, as we recently held:  A court’s purpose in examining a contract is to interpret the intent of the contracting pa rties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence . 31 The Court of Appeals, in this case before us, faced a situation where there were opposing interpretations of the parties as to the meaning and application of the disputed contract. To the extent here relevant, we find that the contract reads as follows: Dear Mr. Ingco: We hereby accept the legal referral you made and confirm our decision and commitment to make legal and/or extrajudicial representations for and in your behalf. In its professional capacity, the firm shall enforce delivery of title covering a lot you purchased at P5,100,000.00 or refund of said amount plus interest, in your favor, by Villa Crista Monte Realty and Development Corporation, Inc. and/or Crisencio Tio. xxxx 2. In case the firm succeeds to recover upon mere sending of a demand letter, it shall be entitled to five (5%) per cent of the value of property protected/recovered, amount of claim collected or the total interests (including gains) which actually inure to your benefit, as a result of filing of the case,w h i c h e v e r i s h i g h e r   , as its attorney’s fee; xxxx 5. In case recovery/collection is made by virtue of a final judgment, the firm shall be entitled to an attorney’s fee equivalent to TWENTY FIVE (25%) per cent based on that mentioned above (No. 2) [;] xxxx Should you find the foregoing in order, kindly signify your conformity and sign the space herein provided. Thank you very much for your trust. Very truly yours, (SIGNED)

ABELARDO M. TIBAYAN For the Firm32 In our own perusal of the contract, we find that the contract did not provide for any other basis for the computation of attorney’s fees other than the value of the property protected/recovered, amount of

claim collected, or the total interests including gains which actually inured to the client ’s benefit. Proceeds from levy or garnishment was not mentioned. The contract itself, did not include a situation where the buyer-client recovers from levy of real properties. The contract is silent in this regard. If the intention of the parties was to provide for an automatic application of the contract on levy proceeds, both parties could have easily agreed on it. From the phraseology of its contract with the spouses Ingco, petitioner had only two alternative objectives as their legal tasks, (1) delivery of title or (2) refund of the purchase price. Items 2 and 5 of the contract envisioned two scenarios: (1) when the law firm recovers by mere demand letter; and (2) when the collection is through final judgment. In case of collection effected through a final judgment, the firm shall be entitled to an attorney’s fee equivalent to 25% of what actually inures to the benefit of the Ingcos, whichever is higher among (a) the value of property protected or recovered; (b) the amount of claim collected; or (c) the total interests inuring to the Ingco’s benefit including gains. The 25% attorney’s fees must be based on what was actually realized and received by the Ingcos. Of the three serially enumerated, only the value of the property sold, bought and recovered actually inured to the benefit of the Ingcos. At this point, however, no money had yet been collected, nor had any interests and gains been verified and realized. We are in agreement with the appellate court that what the law firm delivered to its clients was the refund of the amount claimed plus interest, stated in the compromise agreement with Villa Crista, not the title to the lot and more so, not the three lots purchased by the spouses at the execution sale. In our view, the law firm had been adequately paid its lawyer’s fees and is no longer entitled to additional fees on top of the P1.5 million it had received. In fact, the 25% attorney’s fees based on the value of the lot, which is P5.1 million, multiplied by 25%, will only amount to P1,275,000. Thus, the firm had a bonus of P225,000, since they received P1,500,000 from the clients. We note that the Ingcos acquired the three lots as the highest bidder at the execution sale, since no one else bid higher. On this point, it can be said that the lots had been acquired not through the recovery efforts of the law firm. Had other persons bidded a higher price, the matter of the three lots would be entirely impertinent here. It is stretching the firm’s contractual rights to say that the three lots acquired in the auction by the Ingcos’ was thru the law firm’s contractual services. The law firm appears to have extended the following services to the Ingcos: (1) sent three demand letters33 to the developer; (2) filed a complaint34 against the latter on March 29, 1999; (3) appeared for the Ingcos during the July 29, 1999 pre-trial before the HLURB arbiter ;35 (4) filed the joint motion to approve compromise agreement36between the parties dated October 21, 1999; and (5) attended four preliminary conferences, three of which were reset, and only one called. It took three months from pre-trial to the signing of the compromise agreement on October 1, 1999. There were no longdrawn trials. It was respondent Renato Ingco who actually negotiated in person with the developer. There is no positive evidence shown that the law firm battled for its clients against Villa Crista during the negotiation stage.  As we have ruled previously, courts can fix reasonable compensation which lawyers should receive for their professional services.37 Nothing precludes the appellate courts from reducing the award when it is deemed unconscionable or excessive.38 Further, here we note that when the auction sale of the three lots was made, the attorney-client relationship between petitioner and respondents no longer existed.39 Thus, we cannot include in the attorney’s fees the 25% of the excess of the market value of the lots over the P7,193,505.56 paid by the Ingcos in acquiring them. 1avvphi1

Incidentally, while the spouses Ingco might have not raised the issue of the interpretation of contract in the trial court, it cannot be said also that the Court of Appeals deprived petitioner its right to be heard when it passed upon the issue. When it interpreted the agreement, the Court of Appeals merely sought to ascertain the meaning attached to the words used in the written contract,40 undoubtedly to resolve the opposing contentions of the parties themselves. On the last issue regarding the inhibition of the justices of the appellate court, aside from being moot and academic, we find that the issue had been adequately addressed by the appellate court. While bias and partiality are recognized as valid reasons for the voluntary inhibition of a judge under Rule 137, Section 1, par. 2,41 of the Rules of Court, mere suspicion that a judge is partial is not enough.  As long as the judge’s opinions were formed in the course of judicial proceedings based on the evidence presented, and on the conduct of the parties as observed by the magistrate in court, such opinions – even if later found to be erroneous  – will not prove personal bias or prejudice on the part of the judge. In this case, the law firm has failed to present concrete proof that any or all members of the Court of Appeals’ Second Division had a personal interest in the case, or that their opin ions on the case have stemmed from an extrajudicial source. We find no sufficient basis or reason to doubt their fairness and ability to decide this case with the "cold neutrality of an impartial judge."  As the appellate court pointed out, the present case has already been decided. A motion for inhibition can no longer be granted if a decision has already been rendered and the justice or judge sought to be disqualified had duly participated and cast his or her vote without any objection from any source. Clearly, a litigant cannot be permitted to speculate upon the action of the court and to raise objections only after an unfavorable decision has already been rendered . 42

WHEREFORE, the instant petition is DENIED. The Decision dated March 17, 2005 of the Court of  Appeals in CA-G.R. SP No. 85540, entitled "Spouses Renato M. Ingco and Ma. Luisa S. Ingco v. Law Firm of Tungol and Tibayan," is AFFIRMED. Costs against petitioner.

SO ORDERED. LEONARDO A. QUISUMBING  Associate Justice WE CONCUR:

CONCHITA CARPIO MORALES  Associate Justice

DANTE O. TINGA

PRESBITERO J. VELASCO, JR.

 Associate Justice

 Associate Justice

ARTURO D. BRION  Associate Justice  A T T E S T A T I O N I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING  Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Divi sion.

REYNATO S. PUNO Chief Justice

Footnotes

1

Rollo, pp. 70-82. Penned by Associate Justice Rosalinda Asuncion-Vicente, with Associate Justices Godardo A. Jacinto and Bienvenido L. Reyes concurring. 2 Id. at 271-277. 3 Id. at 122-123. 4 Id. at 279-293. Dated March 29, 1999. 5 Id. at 322-323, 326-327. 6 Id. at 328-330. 7 Id. at 331-334. 8 Id. at 339-344. 9 Id. at 130. 10 Id. at 131-132. 11 Id. at 133-134. 12 Id. at 345-352. 13 Id. at 374-382. 14 Covered by Transfer Certificates of Title Nos. N-162238, N-162319 and N-162350 of the Registry of Deeds of Quezon City. 15 Rollo, pp. 565-576. 16 Id. at 353-357. 17 Id. at 136-141. 18 Id. at 387-393. 19 Through Commissioner Teresita A. Desierto and Ex-Officio Commissioners Jose C. Calida of DOJ and Fortunato R.  Abrenilla of NEDA. 20 Rollo, pp. 394-400. 21 Id. at 278. 22 Id. at 429-431. 23 Id. at 81-82. 24 Id. at 409-425. 25 Id. at 21-22. 26  ART. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. 27 Petrophil Corporation v. Court of Appeals, G.R. No. 122796, December 10, 2001, 371 SCRA 702, 708; Sea-Land Service, Inc. v. Court of Appeals, G.R. No. 126212, March 2, 2000, 327 SCRA 135, 143; Heirs of Juan San Andres v. Rodriguez, G.R. No. 135634, May 31, 2000, 332 SCRA 769, 783. 28 Rollo, p. 28. 29 Id. at 32-33. 30 Id. at 435-466. 31  Abad v. Goldloop Properties, Inc. , G.R. No. 168108, April 13, 2007, 521 SCRA 131, 144. 32 Rollo, pp. 122-123. 33 Id. at 467-469. 34 Id. at 470-484. 35 Id. at 488. 36 Id. at 491-492. 37 Traders Royal Bank Employees Union-Independent v. NLRC , G.R. No. 120592, March 14, 1997, 269 SCRA 733, 750. 38 Brahm Industries, Inc. v. NLRC , G.R. No. 118853, October 16, 1997, 280 SCRA 828, 839. 39 See Rilloraza, Africa, De Ocampo and Africa v. Eastern Telecommunications Phils., Inc ., G.R. No. 104600, July 2, 1999, 309 SCRA 566, 575.