LEPE: CANONS 20-24FEES, CONFIDENTIALITY & WITHDRAWAL OF SERVICES

ATTORNEYS FEESCANON 20

A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES

THINGS TO REMEMBER:Compensation of a lawyer should be a mere incident of the practice of law, the primary purpose of which is to render public service.

He has the right to have and recover from his client a fair and reasonable compensation for his services, except in cases where he has agreed to render service gratuitously or has been appointed counsel de oficio.

THINGS TO REMEMBER:Being primarily an officer of the court charged with the duty of assisting the court render impartial justice, what a lawyer may collect as his fees is always subject to judicial control.He should avoid controversies with clients concerning compensation; he should resort to law suits with clients only to prevent injustice, imposition or fraud.

Requisites for the right to attorneys fees to accrue:

Existence of attorney-client relationship

Rendition by the lawyer of services to the client

A contract of professional services may either be oral or in writing; A written retainer has distinct advantages over an oral contract

Two concepts of Attorneys fees:Ordinary- it is the reasonable compensation paid to the lawyer for the legal services he had rendered in favor of his client.

The basis of this compensation is the fact of employment by the client.

Two concepts of Attorneys fees:Extraordinary an indemnity for damages ordered by the court to be paid by the losing party to the prevailing party in litigation.

The basis of this is any of the cases authorized by law and is payable not to the lawyer but to the client unless there is an agreement that the award shall pertain to the lawyer as an additional compensation or as part thereof.

Rule 20.01 - A lawyer shall be guided by the following factors in determining his fees:

(a) the time spent and the extent of the service rendered or required; (b) the novelty and difficulty of the questions involved; (c) The importance of the subject matter; (d) The skill demanded; (e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) The contingency or certainty of compensation; (i) The character of the employment, whether occasional or established; and (j) The professional standing of the lawyer

Compensation to which a lawyer is entitled to depending on his capacity:

Counsel de parte- he is entitled to the reasonable attorneys fees agreed upon, or in the absence thereof on quantum basis.

Counsel de officio- the counsel may not demand from the accused attorneys fees even if he wins the case. He may however, collect from the government funds, if available based on the amount fixed by the court.

Amicus Curiae- not entitled to attorneys fees

Quantum Meruitas much as the lawyer deserves or such amount as his service merit

Instances of recovery of attorneys fees on the basis of Quantum Meruit:

There is no express contract for payment of attorneys fees agreed upon between the lawyer and the client;

When although there is a formal contract for attorneys fees, the fee stipulated are found unconscionable;

When the contract for attorneys fees is void due to purely formal defects of execution;

When, for justifiable cause, the lawyer was not able to finish the case;

When the lawyer and the client disregard the contract for fees; and

When the client dismissed his counsel before the termination of the case.

Instances of recovery of attorneys fees on the basis of Quantum Meruit:

Guides for determining attorneys fees on the basis of Quantum Meruit:Time spent and extent of the services rendered or requiredImportance of subject matterNovelty and difficulty of questions involvedSkill demanded of a lawyer

Attorneys fee as damages: General Rule: Attorneys fees as damages are not recoverable because it is not the fact of winning that ipso facto justifies the award but the attendance of any of the special circumstances.

Instances when Attorneys fees may be recovered as damages:There is an agreement;Exemplary damages are awarded;Defendants action or omission in gross bad faith compelled plaintiff to litigate;In criminal cases of malicious prosecution;Action is clearly unfounded and is so untenable that it amounts to gross bad faith;

Instances when Attorneys fees may be recovered as damages:Actions for support;Cases for recovery of wages;Actions for indemnity under workmens compensation and employees liability laws;Separate civil action arising from a crime;At least double costs are awarded;The court deems it just and equitable;When a special law so authorizes

To entitle a party to recover attorneys fees as an item of damages, he must: Show that the case falls under any of the exceptions that may warrant the award;

Have employed and, in the case of a public litigant, must show his right to employ a private counsel as well.

It is well settled that the award of attorneys fees in favor of the prevailing part in a case is essentially discretionary with the trial court.

Two concepts of Retainer:

Act of a client which he engages the services of an attorney to render legal advice or to defend or prosecute his cause to court;

Fee which a client pays to the attorney

Kinds of retainer agreement:General retainer the fee paid to the lawyer to secure his future services as general counsel for any ordinary legal problem that may arise in the ordinary business of the client and referred to him for legal action.Its purpose is to prevent undue hardship on the part of the attorney resulting from the rigid observance of the rule forbidding representation of conflicting interests.

Specific retainer fee for a specific case or service rendered by the lawyer for the client.

Kinds of payment that may be stipulated upon:Fixed or absolute fee- which is payable regardless of the result of the case

A fixed fee payable per appearanceA fixed fee computed upon the number of hours spentA fixed fee based on pieceworkCombination of any of the above

Kinds of payment that may be stipulated upon:Contingent fee- that is conditioned on the securing of a favorable judgment and recovery of money or property and the amount of which may be on a percentage basis.

Champertous contract

one where the lawyer stipulates with his client in the prosecution of the case that he will bear all of the expenses for the recovery of things or property being claimed by the client, and the latter agrees to pay the former a portion of the thing or property recovered as compensation.

Contingent ContractChampertous ContractContingent fee is payable in cashPayable in kind ONLYLawyers do not undertake to pay all expenses of litigationLawyers undertake to pay all expenses of litigationValid Void

Situations when counsel cannot recover full amount despite a written contract for attorneys fees:Services were not performed, as when the counsel withdrew before the case in finished, except when withdrawal is justified;

Justified dismissal of the attorney;

Stipulated attorneys fees are unconscionable;

Situations when counsel cannot recover full amount despite a written contract for attorneys fees:Stipulated attorneys fees are in excess of what is expressly fixed by law; under the Labor Code, attorneys fees cannot exceed 10%;

When the lawyer is guilty of fraud or bad faith toward his client in the matter of employment;

Counsels services were worthless because of his negligence;

Situations when counsel cannot recover full amount despite a written contract for attorneys fees:Contract of employment is illegal;

Serving adverse interest, unless he acted with the consent of both parties.

DOY MERCANTILE INC. vs. AMA COMPUTER COLLEGE and Ernesto RioverosGR. No. 155311, Tinga, J.

HELD: The petition has no merit. It is not accurate for petitioner to state that the Court of Appeals did not take into account the time spent and the extent of the services rendered by Atty. Gabriel Jr. Petitioners contention that the appellate court should also have taken into account the importance of the subject matter in controversy and the professional standing of counsel in determining the latters fees is untenable. Although Rule 138 of the Rules of Court and Rule 20.01 of the Code of Professional Responsibility list several other factors in setting such fees, these are mere guides in ascertaining the real value of the lawyers service. Courts are not bound to consider all these factors in fixing attorneys fees. While a lawyer should charge only fair and reasonable fees, no hard and fast rule maybe set in the determination of what a reasonable fee is, or what is not. That must be established from the facts in each case. As the Court of Appeals is the final adjudicator of facts, this Court is bound by the formers findings on the propriety of the amount of attorneys fees.

Rule 20.02

- A lawyer shall, in case of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed.

The referral of a client by a lawyer to another lawyer does not entitle the former to a commission or to a portion of the attorneys fees. It is only when, in addition to the referral, he performs legal service or assumes responsibility in the case that he will be entitled to a fee

Amalgamated Laborers Assn. vs. Court of Industrial RelationsG.R. No. L-23467, SANCHEZ,J.:

Held: Petitioners, on the other hand, contend that the verbal agreement entered into by the union and its officers thru its President Javier and said two lawyers, Atty. Carbonell and Atty. Fernandez, is that the 30% attorneys' fees, shall be divided equally ("share and share alike") amongst Atty. Carbonell, Atty. Fernandez and Felisberto Javier, the union president.

We strike down the alleged oral agreement that the union president should share in the attorneys' fees. Canon 34 of Legal Ethics condemns this arrangement in terms clear and explicit. It says: "No division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility." The union president is not the attorney for the laborers. He may seek compensation only as such president. An agreement whereby a union president is allowed to share in attorneys' fees is immoral. Such a contract we emphatically reject. It cannot be justified.

Rule 20.03 - A lawyer shall not, without the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client.

GENERAL RULE: A lawyer should receive compensation for his services in a case only from his client and not from other person.

EXCEPTION: A lawyer may receive compensation from a person other than his client when the latter has full knowledge and approval thereof (Rule 138, Section 20 e)

Vicente Diaz vs. Ruperto KapunanG.R. No. B045049Malcolm, J.

HELD: Yes. There is this principle that whatever a lawyer receives from the opposite party in the service of his client belongs to the client. Thus, the money received from the judgment creditor by the lawyer of the judgement debtor as consideration for the lwayers desisting from participating in the execution sale of the debtors property is owned by and must be turnover to the client.

Rule 20.04

- A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

GENERAL RULE:A lawyer should avoid the filing of any case against a client for the enforcement of attorneys fees.

Exceptions:To prevent imposition;To prevent injustice; andTo prevent fraud

Effect of nullity of contract on the right to attorneys fees:

If the nullification is due to the ILLEGALITY OF ITS OBJECT the lawyer is precluded from recovering, and

If the nullity is due to a FORMAL DEFECT or because the court has found the AMOUNT to be UNCONSCIONABLE. The lawyer may recover for any services rendered based on quantum meruit

When and where may a claim of fees asserted?The very action in which the services in question have been rendered, OR

In a separate civil action

Instances when an independent civil action to recover attorneys fees is necessary:

Main action is dismissed or nothing is awardedCourt has decided that it has no jurisdiction over the action or has already lost itPerson iable for attorneys fees is not a party to the min actionCourt reserved to the lawyer the right to file a separate civil suit for recovery of attorneys fees

Instances when an independent civil action to recover attorneys fees is necessary:

Services for which the lawyer seeks payment are not connected with the subject litigation and;

Judgment debtor has fully paid all of the judgment proceeds to the judgment creditor and the lawyer has not taken any legal step to have his fees paid directly to him from the judgment proceeds

Alex B. Cueto vs. Atty. Jose B. Jimenez Jr.A.C. No. 5798, Corona, J.

HELD: The Court agreed with the IBP that respondents conduct in filing a criminal case for violation of BP 22 against complainant was highly improper. Canon 20, Rule 20.4 of the Code of Professional Responsibility mandates that a lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud." Likewise, in Canon 14 of the Canons of Professional Ethics it states that, "controversies with clients concerning compensation are to be avoided by the lawyer so far as shall be compatible with his self-respect and with his right to receive reasonable recompense for his service; and lawsuits with the clients should be resorted to only to prevent injustice, imposition or fraud.

There was clearly no imposition, injustice or fraud obtaining in this case to justify the legal action taken by respondent. As borne out by the records, complainant Cueto had already paid more than half of respondents fee. To resort to a suit to recover the balance reveals a certain kind of shameful conduct and inconsiderate behavior that clearly undermines the tenet embodied in Canon 15 of the Code of Professional Responsibility. He should always remind himself that the legal profession is imbued with public service. Remuneration is a mere incident. Although we acknowledge that every lawyer must be paid what is due to him, he must never resort to judicial action to recover his fees, in a manner that detracts from the dignity of the profession.

Bar QuestionsThe contract of attorneys fees entered into by Atty. Quintos and his client, Susan, stipulates that if a judgment is rendered in her favor, he gets 60% of the property recovered as contingent fee. In turn, he will assume payment of all expenses of the litigation.Is the agreement valid? May Atty. Quintos and Susan increase the amount of the contingent fee to 80%? (Bar Examinations 2006)

For services to be rendered by Atty. Delmonico as counsel for Wag Yu in a case involving 5,000 square meters (sq.m.) of land, the two agreed on a success fee of P50,000 plus 500 sq.m. of the land.The trial court rendered judgment in favor of Wag Yu which became final and executory. After receiving P50,000, Atty. Delmonico demanded the transfer to him of the promised 500 sq.m. Instead of complying, Wag Yu filed an administrative complaint charging Atty. Delmonico with violation of the Code of Professional Responsibility and Article 1491(5) of the Civil Code for demanding the delivery of a portion of the land subject of litigation.Is Atty. Delmonico liable under the Code of Professional Responsibility and the Civil Code? Explain (Bar Examinations 2010)

Farida engaged the services of Atty. Garudo to represent her in a complaint for damages. The two agreed that all expenses incurred in connection with the case would first be shouldered by Atty. Garudo and he would be paid for his legal services and reimbursed for all expenses which he had advanced out of whatever Farida may receive upon the termination of the case. What kind of contract is this? (Bar Examinations 2010)

DUTY OF CONFIDENTIALITYCANON 21

A LAWYER SHALL PRESERVE THE CONFIDENCE AND SECRETS OF HIS CLIENT EVEN AFTER THE ATTORNEY-CLIENT RELATION IS TERMINATED.

Rule 21.01 A lawyer shall not reveal the confidences or secrets of his client, except:

When authorized by the client after acquainting him of the consequences of the disclosure;

When required by law;

When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.

Confidence Refers to the information protected by the attorney-client privilege (Report of IBP Committee, p. 117). (A)n attorney, cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment; nor can an attorneys secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any fact the knowledge of which has been acquired in such capacity (Rule 130, Section 21[b], Rules of Court).

Secret refers to other information gained in the professional relationship that the client has requested to be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client (Report of the IBP Committee, p. 117). It is one of the express duties of a lawyer to maintain inviolate the confidences and at every peril to himself, to preserve the secrets of his client xxx (Rule 138, Section 20, Rules of Court; People vs. Sy Juco, 64 Phil 667).

Requisites of Privileged Communication:

There exists an attorney and client relationship or a kind of consultancy relationship with a prospective client. That is, legal advice is what is sought. This includes persons appointed as counsel de officio;

Requisites of Privileged Communication:The communication was made by the client to the lawyer in the course of the lawyers professional employment; and

The communication must be intended to be confidential (Uy Chico vs. Union Life Assurance Society, 29 Phil 163 [1915])

Preservation of Clients Confidences and Secrets

The Rules of Court makes it one of the duties of the lawyer to maintain inviolate the confidences and at every peril to himself, preserve the secrets of his client (Rule 138, Section 20[e], Rules of Court).

Preservation of Clients Confidences and SecretsExceptions are enumerated in Rule 21.01. There may be the exception also when the client himself or in case of his death, his heir or legal representative relieved the lawyer of his duty (Baldwin vs. Commissioner of Internal, Revenue, 125 F 2d 812, 141, ALR 548).

Preservation of Clients Confidences and SecretsIf the advice sought from the lawyer is not legal advice but something else like an accounting advice, business or personal assistance, the privilege does not attach to a communication disclosed for such purpose (Rosacia vs. Bulalacao, 248 SCRA 664).

Rationale of the CanonEncourage and inspire clients to tell all about the facts of their cases. Unless the clients are so assured that what they disclose to their lawyers will not be matters which they consider unfavourable to them such that the edited facts presented will be distorted and the legal advice proffered thereon will become misleading and inaccurate. Trial may even be conducted along false lines or theories and this will open the lawyer to damaging surprises which may be too late to correct. Surprises could be avoided if the clients could candidly tell all without suppression of facts from the start.

Canon Applies To Confidences And Secrets Of Prospective ClientsFormerly, in order that a communication to an attorney shall be privileged, the relationship of attorney and client must exist at the time the communication is made. Under this Canon, communication made by a prospective client is covered. The confidential communication must be made to the lawyer or in his professional capacity (In re: Hamilton, 24 Phil. 100 [1913]; Jones vs. Harding, 9 Phil. 279 [1907]); Uy Chico vs. Union Life Insurance Co., 29 Phil. 163 [1915]); Report of IBP Committee, p. 117)

Mode of CommunicationThe communication may be verbal, written or through any other means (State vs. Dawson, 90 Mo. 149, 1 SW 827).

Generally, the attorney-client privilege covers:Lawyer;Client; andThird persons who by reason of their work have acquired information about the case being handles such as:Attorneys secretary, stenographer, and clerk;Intercepter, messengers and agents transmitting communication; andAn accountant, scientist, physician, designer, who has been hired for effective consultation (Section 24[b], Rule 130, Rules of Court).

Note: Payment of a retainer fee is not essential before an attorney can be required to safeguard a prospective clients secret acquired by the attorney during the course of consultation with the prospective client, even if the attorney did not accept the employment.

Test: Whether the communications are made to an attorney with a view of obtaining from him professional assistance or advice regardless of whether there is a pending or merely impending litigation or any litigation (Denver Tramway Co. vs. Owens, 20 Colo. 107, 26 Pac. 848).

Regala v. Sandiganbayan (262 SCRA 122)

At issue is whether, as a condition precedent for the exclusion of the attorneys from an ill-gotten wealth case as party defendants, the said attorneys may becompelled to disclose the identity of their client and submit documents substantiating the lawyer-client relationship, among others, without violating the attorney-client privilege.

It was held that although as a general rule, a lawyer may not invoke the privilege and refuse to divulge the name or identity of the client, an exception would be when there is a strong probability that revealing the clients name would implicate the said client in the very activity for which he sought the lawyers advice.

It was also held that the privilege may likewise be invoked when client identity disclosure would expose the client to civil liability.

Rule 23 Section 2 of the Rules of Court, which rule is made applicable to all modes of discovery, provides for the scope of examination, to wit:

Unless otherwise ordered by the court x x x the deponent may be examined regarding any matter, not privileged x x x

Hence, any communication obtained under an attorney-client relation is not covered by the rules on modes of discovery for being privileged. This is of significance since the testimonies and evidences perpetuated through most of the forms of discoveries, such as depositions and interrogatories, are considered admissible in evidence and may be used in any action involving the same subject matter subsequently brought (Section 6, Rule 24, Rules of Court). Thus, the client is afforded protection from being forced to divulge confidential information not just in cases presently pending but in future cases that may arise out of the same subject matter.

Further, the express exception to privileged matters from the coverage of modes of discovery saves the attorney and his client, as case parties, from the consequences of refusal to comply with modes of discovery. These may range from judicial compulsion to comply with the modes of discovery, pay the proponent the reasonable expenses incurred in obtaining the order to comply with the mode of discovery, citation for contempt of court, dismissal of actions, judgment by default, and even to arrest. (Section 1-6, Rule 29, Rules of Court)

The limits of, and exceptions to, the privilege are as follows :When the lawyer is authorized by the client after the latter is acquainted of the consequences of the disclosure. (Canon 21.01, Canon 21, Code of Professional Responsibility)

When the disclosure of the privileged communication is required by law. (Canon 21.01, Canon 21, Code of Professional Responsibility)

The limits of, and exceptions to, the privilege are as follows :When the disclosure by the attorney is necessary to collect his fees or defend himself, his employees or his associates or by judicial action. (Section 1-6, Rule 29, Rules of Court)

Communications voluntarily made to an attorney after he has refused to accept employment. (58 Am. Jur. 267)

Where only abstract and general legal opinions are sought and obtained on general questions of law. (58 Am. Jur. 274)

The limits of, and exceptions to, the privilege are as follows :If the privileged communication is for an unlawful purpose. (People vs. Alstin, 57 Mich. 69, 23 N.Y. 594)

If the communication is made in the presence of third persons not agents of the attorney, the communication is not privileged as to said third persons. (Sharon vs. Sharon, 79 Cal 633, 22 Pac. 26)

Implied waiver of the privilege

Hilado vs. David (84 Phil. 56)If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view of obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established.

Tumbagahan vs. Court of Appeals (165 SCRA 485)The withdrawal as counsel of a client or the dismissal by the client of his counsel must be in a formal petition filed in the case. Attorney-client relationship does not terminate formally until there is withdrawal made of record. Unless properly relieved, counsel is responsible for the conduct of the case.

Rule 21.02 - A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto.

A lawyer, who acquired information from a client in the course of his legal employment, is prohibited from making use of such information, whether it is privileged or not, to the (a) disadvantage of his client, (b)to the lawyers own advantage, or (c) to the advantage of a third person.

Exception: If the client with full knowledge of the circumstances consents to the use thereof. However, as an exception to the exception in matters of unprivileged information, the lawyer may be judicially compelled to make a disclosure even if the client objects. Also under the exceptions mentioned in Rule 21.01.

If the lawyer makes the prohibited disclosure that is, the revelation does not fall under any of the exception he will be subjected to disciplinary action for breach of trust (Section 20[e], Rule 138, Rules of Court; Bautista vs. Barrios, 9 SCRA 695).

Uy vs. Gonzales (A.C. No. 5280 [30 March 2004])

The records reveal that the relationship between complainant and respondent stemmed from a personal transaction or dealings between them rather than the practice of law by respondent. Respondent dealt with complainant only because he redeemed a property which complainant had earlier purchased from his (complainants) son. It is not refuted that respondent paid complainant P340,000.00 and gave him ample time to produce its title and execute the Deed of Redemption. However, despite the period given to him, complainant failed to fulfill his end of the bargain because of the alleged loss of the title which he had admitted to respondent as having prematurely transferred to his children, thus prompting respondent to offer his assistance so as to secure the issuance of a new title to the property, in lieu of the lost one, with complainant assuming the expenses therefor.

Rule 21.03

- A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any similar purpose.

A lawyer shall not give information from his files to an outside agency seeking information for auditing, statistical, bookkeeping, accounting, data processing or any similar purpose.

Exception: If client gives his written consent.

People vs. Sy Juco (64 Phil. 667)

It is clear that the court could not and can not order the opening of the art metal filing cabinet in question because, it having been proven that it belongs to the appellant attorney and that in it he keeps the records and documents of his clients, to do so would be in violation of his right as such attorney, since it would be tantamount to compelling him to disclose or divulge facts or things belonging to his clients, which should be kept secret, unless she is authorized by them to make such disclosure, it being a duty imposed by law upon an attorney to strictly preserve the secrets or communications made to him. Such an act would constitute a qualified violation of Section 383, No. 4, and of Section 31 of Act No. 190, which read as follows:

People vs. Sy Juco (64 Phil. 667)

An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment; nor can an attorney's secretary stenographer, or clerk be examined, without the consent of client and his employer, concerning any fact, the knowledge of which has been acquired in such capacity. (Section 383, No. 4, Act No. 190.)

People vs. Sy Juco (64 Phil. 667)

A lawyer must strictly maintain inviolate the confidence and preserve the secrets of his client. He shall not be permitted in any court without the consent of his client, given in open court, to testify to any facts imparted to him by his client in professional consultation, or for the purpose of obtaining advice upon legal matters. (Section 31, Act No. 190.)

Rule 21.04- A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless prohibited by the client.

Rule 21.05- A lawyer shall adopt such measures as may be required to prevent those whose services are utilized by him, from disclosing or using confidences or secrets of the client.

Professional employment of a law firm is equivalent to retainer of the members thereof even though only one partner is consulted. When one partner tells another about the details of the case, it is not considered as disclosure to third persons because members of a law firm are considered as one entity. (Agpalo)The clients secrets which clerical aids of lawyers learn of in the performance of their services are covered by privileged communication. It is the duty of lawyer to ensure that this is being followed. The prohibition against a lawyer from divulging the confidences and secrets of his clients will become futile exercise if his clerical aids are given liberty to do what is prohibited of the lawyer.

The lawyer should give proper training / briefing to employees The lawyer may ask that his assistant, clerk sign an agreement of confidentialityA lawyer should learn to speak or act pertaining his cases in a discreet manner Adopt other measures to achieve confidence of client to lawyer

Rule 21.06

- A lawyer shall avoid indiscreet conversation about a clients affairs even with members of his family.

A lawyer must not only preserve the confidences and secrets of his clients in his law office but also outside including his home. He should avoid committing calculated indiscretion, that is, accidental revelation of secrets obtained in his professional employment. Reckless or imprudent disclosure of the affairs of his clients may jeopardize them. Not every member of the lawyers family has the proper orientation and training for keeping clients confidences and secrets. (Agpalo)

Rule 21.07

- A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interests.

Rule 15.01- A lawyer, in conferring with a prospective client, shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so, shall forthwith inform the prospective client.

Rule 14.03- A lawyer may refuse to accept representation of an indigent client if:

he is not in a position to carry out the work effectively or competently;

he labors under a conflict of interests between him and the prospective client or between a present client and the prospective client.

This rule clarifies that privilege communication applies even to prospective clients. Moreover, the prohibition applies even if the prospective client did not thereafter actually engage the lawyer. By the consultation, the lawyer already learned of the secrets of prospective client. It is not fair if he will not be bound by the rule on privileged communication in respect of matters disclosed to him by a prospective client. This rule, of course, is subject to exception of representation of conflicting interests. (Agpalo)

Bar QuestionSix months ago, Atty. Z was consulted by A about a four-door apartment in Manila left by her deceased parents. A complained that her two siblings, B and C, who were occupying two units of the apartment, were collecting the rentals from the other two units and refusing to give her any part thereof. Atty Z advised A to first seek the intervention of her relatives and told her that, if this failed, he would take legal action as A asked him to do. Today, September 22, 2002, B asks Atty Z to defend him in a suit brought by A against him (B) and C through another counsel.Should Atty. Z accept the case? Why? (2%)Should Atty Z tell B that A consulted him earlier about the same case? Why? (3%)

ANSWER

Atty. Z should not accept the case. When A consulted him about her complaint against B and C, a lawyer-client relationship was created between A and Atty. Z. Atty Z cannot subsequently represent B against A in a matter he was consulted about. This constitutes conflict of Iinterest. It does not matter if Atty. Z is not handling the case for A.

Rule 21.07 of the Code of Professional Responsibility provides that a lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interests. In this case, he has to reveal to B that he had been consulted by A on the case that B if offering to retain his services, in order to avoid possible conflict of interest.

CANON 22

WITHDRAWAL OF SERVICES FOR GOOD CAUSES

FACTORS DETERMINATIVE OF ENGAGING IN THE PRACTICE OF LAW

Habituality, implies customary or habituality holding one self as a lawyer.Compensation, implies that one must have presented himself to be in the active practice and that his professional services are available to the public for compensation as a source of livelihood or in consideration of his services.Application of law, legal principle, practice or procedure which calls for the legal knowledge, training and experience.Attorney client relationship.

NATURE AND RELATION; ATTORNEY CLIENT RELATIONSHIP

Strictly personal

Highly confidential

Fiduciary

TERMINATION OF ATTORNEY CLIENT RELATIONSHIP

When the lawyer withdraw his services.When the client discharges the lawyer.Other causes:Death of lawyerDeath of clientAppointment or election of the lawyer to a government position which prohibits private practice of law.Full termination of the case.

TERMINATION OF ATTORNEY CLIENT RELATIONSHIP

Other causes: (cont.)Disbarment or suspension of the lawyer from the practice of law.Intervening incapacity or incompetence of the client during pendency of the case.Declaration of presumptive death of the lawyer.Conviction of a crime and imprisonment of the lawyer.

INSTANCES WHEN A COUNSEL CAN WITHDRAW HIS SERVICES

Canon 22. A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances.

22.01a lawyer may withdraw his services in any of the following cases:when the client pursues an illegal or immoral course of conduct in connection with the matter he is handling.when the client insists that the lawyer pursue conduct violative of these canon and rules.

INSTANCES WHEN A COUNSEL CAN WITHDRAW HIS SERVICES

22.01a lawyer(cont.)when his inability to work with co counsel will not promote the best interest of the client.when the mental or physician condition of the lawyer renders it difficult for him to carry out the employment effectively.when the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement.when thelawyer is elected or appointed to a public office andother similar cases.

Obando v. Figueras (2000)F:Eduardos counsel, Atty. Yuseco filed a Motion to Dismiss against Obandos petition to nullify sale of a land. This motion was granted. Obando now alleges that trial court should not have acted on the motion filed by Atty. Yuseco because he no longer represented Eduardo, et al. The Court held that the trial court could act on the motion filed by Atty. Yuseco.

Obando v. Figueras (2000)H:Representation continues until the court dispenses with the services of counsel in accordance with Section 26, Rule 138 of the Rules of Court. Counsel may be validly substituted only if the following requisites are complied with: (1) New counsel files a written application for substitution; (2) The clients written consent is obtained; (3) The written consent of the lawyer to be substituted is secured, if it can still be; if the written consent can no longer be obtained, the application for substitution must carry proof that notice of the motion has been served on the attorney to be substituted in the manner required by the Rules.

Obando v. Figueras (2000)Court is convinced that Eduardo did not dismiss Atty. Yuseco. In fact, Eduardo manifested that he had been tricked by Petitioner Obando into signing the aforesaid Compromise Agreement. In any case, at the discretion of the court, an attorney who has already been dismissed by the client is allowed to intervene in a case in order to protect the clients rights. In the present case, had there been any irregularity, it should have been raised by Eduardo, not by Obando. Eduardo had no reason to complain, the Motion to Dismiss was not prejudicial but beneficial to him.

Laput v. Remotigue (1962)H:The solicitor general found that before respondents filed their appearance, the client had already filed with the court a pleading discharging the complainant. The fact that complainant was not able to get a copy was not the fault of respondents. Also, it was found that Mrs. Barrera dismissed complainant as lawyer because she no longer trusted him because she found out that some checks were sent to the complainant instead of her and that several withdrawals were made by complainant in her account without her permission.

Laput v. Remotigue (1962)There is no irregularity in the appearance of respondents as counsel. Complainants withdrawal and his filing of a motion for the payment of his attorneys fees estop him from now complaining that the appearance of respondent Patlinghug is unprofessional. As for the respondents, they only entered their appearance after Mrs. Barrera had dispensed of the complainants services and after the petitioner had voluntarily withdrawn.

CASES WHEN LAWYER MAY WITHDRAWThe enumeration is not exclusive.Client pursuing an illegal or immoral course of conduct.-if a client insists upon an unjust or immoral course in the conduct of his case, the lawyer may withdraw on due notice to the client and shall allow him time to engage another lawyer to protect his interest. A lawyer who assists a client in a dishonest scheme or who connives in violating the law commits an act which justifies disciplinary action against the lawyer.

CASES WHEN LAWYER MAY WITHDRAWClients insistence that lawyer pursues acts violative of the canons and rules. -a lawyer should use his best efforts to restrain and to prevent his clients from doing those things which the lawyer himself ought not to do, particularly with reference to their conduct towards the courts. Judicial officers and witnesses. If a client persists in such wrongdoing, the lawyer should terminate their relation.

CASES WHEN LAWYER MAY WITHDRAWInability of lawyer to work with co-counsel.-if the client has two or more retained lawyers to represent him and the lawyers could not get along in the handling of the case. Such as when each counsel takes diametrically opposing stance and strategy on substantial matters and which in harmony is detrimental to the case, the lawyer whose opinion is not sustained by the client may withdraw. Whenever there are two or more lawyers engaged by a client, ordinarily, there is an arrangement forged among them as to who will be the lead counsel. In case of differences of opinions, the lead counsels opinion prevails.

CASES WHEN LAWYER MAY WITHDRAWMental and physical inability of counsel to handle case effectively. -if after the services of counsel had been engaged by a client and later he became mentally or physically incapable to carry out effectively his employment as lawyer due to sickness or some other kinds of disability, the rules allow him to withdraw from the case. If the disability is just temporary, the lawyer is not obliged to withdraw if during that period, postponement is still possible and allowable. Insanity of the attorney terminates the relation of attorney and client.

CASES WHEN LAWYER MAY WITHDRAWClients deliberate failure to pay attorneys fees agreed upon. -the failure of client to pay the lawyers fee must be deliberate to justify the latters withdrawal from the case. The right of a lawyer to demand payment for his services depends on the fact of employment. He cannot recover compensation from one who did not employ nor authorize his employment, however valuable the results of his services may have been to such person. An attorney, however, is not also justified in withdrawing from a case because his client refuses to consent to an increase in attorneys fees. While the legal profession is not a business and should be pursued mainly for its own sake and not for the money, the lawyer like all other human beings has a right to a livelihood.

CASES WHEN LAWYER MAY WITHDRAWElection or appointment of lawyer to public office. -when a lawyer is elected or appointed to a public office which under the law is incompatible to law practice, his existing relationship as lawyer to his client automatically terminates. Thus, a lawyer who is appointed as a judge or justice ceases to be in practice by operation of law. The same rule applies to a lawyer who is appointed as fiscal who upon his qualification simultaneously ceases as counsel for his client. Hence, notice to him after his qualification is not notice to client. It is the duty of the lawyer to inform the court, if he is appointed to a position which prohibits practice of law. The court does not take judicial notice of the lawyers election or appointment to a public position.

CASES WHEN LAWYER MAY WITHDRAWElection or appointment of lawyer to public office. (cont.)If the lawyer is appointed to a public position which allows concurrent practice of law, he should use his sound discretion whether to withdraw or not in his cases. He must be reminded however that under the rules he should not advance his interest or allow the same to interfere with his public duties.

CASES WHEN LAWYER MAY WITHDRAWOther similar cases. - other situations which are analogous to the above enumerated cases maybe used as grounds for the withdrawal of the services of a lawyer. Where the client conducts himself in a manner which tend to degrade his attorney, the latter may withdraw from the case, when it is apparent that he may be called as witness on substantial matters, when the clients attempts to support his case with subornation of witnesses , when the client refuses to extend cooperation, when client stops having contact with him who thereby is left without the usual means which are indispensable in the proper defense of his clients cause, when he is dis authorized to file a brief by clients parents. Consequently, the lawyer who renders services to a client with the devotion and zeal required by the rules, who is not being paid for his services as agreed upon, may withdraw from the case.

Montano v. IBP (2001)F:Atty. Dealca and Montano agreed that 50% attorneys fees shall be paid upon case acceptance and the other half upon its termination. Despite agreement, Atty. Dealca asked for payment of balance during the course of case. Upon failure to give balance of P3,500, Dealca withdrew appearance as counsel. The Court found that Dealca had not withdrawn for good cause.

Montano v. IBP (2001)H:A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances; a lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud. Atty. Dealcas withdrawal was unjustified as complaint did not deliberately fail to pay him the attorneys fees. In fact, complainant exerted honest efforts to fulfill his obligation. Respondents contemptuous conduct does not speak well of a member of the bar considering that the amount owing to him was only P3,500.00.

Domingo v. Aquino (1971)F: Atty. Unson, the estates counsel, denied having received notice and copy of CFI judgment rendering a favorable decision to Aquinos money claim. The estates new administrator wants to file motion for reconsideration and prays that copy of CFI decision be given to her counsel and not to Atty. Unson, former special administrators counsel. The court held that Atty. Unson was the estates counsel and that notice of judgment had been duly served.

Domingo v. Aquino (1971)H:Party in the subject case was the intestate estate of the deceased Luis C. Domingo, Sr. and that Atty. Unson represented the estate as counsel in the said case. The fact that Luis Domingo Jr was administrator when legal services of Unson was availed of does not make Unson the counsel for Luis Domingo Jr. Thus, notwithstanding Luis removal as administrator, Atty. Unson continued to represent the estate as counsel in the appellate court. He continued to be authorized to represent the estate as its counsel, until the new administrator should terminate his services which she never did. The court was never informed of change in counsel or party-administrator.

Domingo v. Aquino (1971)NOTE:The lawyer must file a written motion with an express consent of his client and the court shall determine whether he ought to be allowed to retire.

Nevertheless, lawyer may also retire anytime from an action or special proceeding without the consent of his client should the court on notice to the client and attorney and on hearing determine that he ought to be allowed to retire.

Domingo v. Aquino (1971)NOTE: (cont.)The lawyer has no right to presume that his petition for withdrawal will be granted by the court, until his withdrawal shall have been approved, the lawyer remains counsel at record who is expected by his client as well as by the court to do what the interest of his client require. The relation of attorney client relationship is strictly personal and highly confidential and fiduciary, necessity and public interest require that it be so.

DISCHARGE OF THE ATTORNEY BY THE CLIENT

The client has the right to terminate at any time with or without just cause the attorney client relationship. Note however, it is important to determine if it is with just cause or without, is to determine compensation. The following should be considered:

DISCHARGE OF THE ATTORNEY BY THE CLIENT

WITH JUST CAUSELawyer is not necessarily deprived of his right to be paid for his services. He may only be deprived of such right if the cause for his dismissal constitutes in itself a sufficient legal obstacle to the recovery.

DISCHARGE OF THE ATTORNEY BY THE CLIENTWITHOUT JUST CAUSEIf there is no express written agreement, reasonable value of his services up to the date of his dismissal.If there is a written agreement and the fee stipulated is reasonable and absolute, full payment.And the fee stipulated is contingent.If dismissed before conclusion of the action, reasonable value of his services.If contingency occurs or client prevents its occurrence, full amount

NOTE: The lawyer should question his discharge, otherwise he will only be allowed to recover on quantum meruit basis (as much as the lawyer deserves)- Canon 20

BAR QUESTIONCite at least five valid reasons under any of which a lawyer maybe allowed to withdraw from a case even without her clients consent.

ANSWERwhen the client pursues an illegal or immoral course of conduct in connection with the matter he is handling.when the client insists that the lawyer pursue conduct violative of these canon and rules.when his inability to work with co counsel will not promote the best interest of the client.when the mental or physician condition of the lawyer renders it difficult for him to carry out the employment effectively.when the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement.when the lawyer is elected or appointed to a public office.

BAR QUESTIONWinnie retained the services of atty. Derecho to file a collection case against Carmen. Winnie paid Atty. Derecho a sizeable retainers fee which the latter accepted. Later, in the process of determining the amount of debt to be collected from Carmen, Atty. Derecho noticed that of the total claim of 8.5 million, certain invoices covering 3.5 million appeared to be irregular. Winnie while admitting the irregularity assures her lawyer that there would be no problem as Carmen was by nature negligent in keeping her records and would not notice the mistake anyway. Atty. Derecho tried to convince Winnie to exclude the amount of 3.5 million but Winnie refused. As a consequence atty. Derecho terminated their relationship and withdraw from the case. Was atty. Derecho right in terminating their relationship and withdrawing from the case? How about the fact that he had already accepted a sizeable retainers fee from his client? Discuss fully.

ANSWERAtty. Derecho was right in terminating the lawyer client relationship and withdrawing from the case. Rule 22.01 of the Code of Professional Responsibility provides that a lawyer may withdraw his services when the client pursues an illegal immoral course of conduct in connection with the matter he is handling, or when the client insists that the lawyer pursue conduct violative of the canons and rules. Rule 15.07 provides that a lawyer shall impress upon his client compliance with the laws and the principles of fairness. While he owes his client warm zeal, it should always be within the bounds of the law. The fact that atty. Derecho had already accepted a sizeable retainers fee should make no difference on his decision to withdraw. Moreover, he may retain the fees he has already received, his withdrawal being justified .

BAR QUESTION

May an attorney refuse to handle a losing case? Support your answer.

ANSWERIn civil cases, a lawyer may refuse to handle a losing case. In all probability, a losing case is one which has no basis or cause of action. Under the attorneys oath the code of Professional Responsibility and the Rules of Court, it is the duty of a lawyer not to promote or sue any groundless, false or unlawful suit, or give aid or consent to the same. The same is true in criminal cases, except when a lawyer is called upon to defend a person guilty of an offense. In such a case, a lawyer may not refuse to defend a person merely because he perceives him to be guilty. That matter is within the province of the judge. The client is presumed innocent until otherwise proven. It is the counsels duty to see to it that his client is accorded due process, that his rights are respected and that only the proper penalties are meted out should he be convicted.

BAR QUESTION

Atty. A objects to the collaboration of Atty. B as proposed by client C in a pending case. How would A,B and C handle the situation?

ANSWERA can offer to withdraw his service. Rule 22.01 paragraph C of the CPR allows a lawyer to withdraw his services if his inability to work with co counsel will not promote the best interest of his client. Here, by objecting to the collaboration of atty. B, atty. A foresees his inability to work with the former. A may withdraw to give his client a free hand in protecting his interest.B should refuse to accept the case. Otherwise, he may be encroaching on the professional employment of another lawyer. A lawyer should decline association as colleague if it is objectionable to the original counsel, but if the lawyer first retained is relieved, another may come into the case.C the client must choose only one of the lawyers. If he wants atty. B as his lawyer, he should formally terminate the services of A, so B can formally enter his appearance in the case.

BAR QUESTIONHarold secured the services of atty. Jarencio to collect from various debtors. Accordingly, atty. Jarencio filed collection cases against the debtors of Harold and in fact obtained favorable judgments in some. Atty. Jarencio demanded from Harold his attorneys fees pursuant to their agreement but Harold refused. When one of the defendants paid his indebtedness of 20,000.00 through atty. Jarencio, the latter refused to turn over the money to Harold, instead Atty. Jarencio applied the amount to his attorneys fees having in mind the provisions of the Civil Code on legal compensation or set off to justify his act. Was atty. Jarencio correct in refusing to turn over to his client the amount he collected? Discuss fully.

ANSWERA lawyer has a retaining lien which entitled him to retain possession of a clients document, money or other property which come into the hands of the attorney professionally, until the general balance due him for professional services is paid. Under Rule 138, section 37 of the Rules of Court, the attorney cannot be compelled to surrender the documents in his possession without prior proof that his fees have been duly satisfied. However, atty. Jarencio here cannot appropriate the sum of 20,000.00. if there is a dispute between him and Harold as to the amount of the fees that he can collect, what he should do if Harold disputes the amount of the fees he is entitled, he must file an action for the recovery of his fee or record a charging lien so that the court can fix the amount to which he is entitled.

BAR QUESTIONAtty. As former client B is deceased. A new client C proposes to engage the legal services of Atty. A against the heirs of deceased client B, has atty. A absolute right to accept the engagement since client B is no longer his client? Decide.

ANSWERThe right of Atty. A to accept the engagement of client C is qualified by his obligation to avoid conflict of interest arising from his relation to the deceased client B. atty. A has received information and confidences from client B which atty. A is prohibited from utilizing against the heirs of the deceased client. The obligation to hold in confidence communications and information received from client B is not terminated by the death of the client.

Rule 22.02

A lawyer who withdraws or is discharge shall, subject to a retainer lien, immediately turn over all papers and property to which the client is entitled, and shall cooperate with his successor in the orderly transfer of the matter, including information necessary for the proper handling of the matter.

Duty of a Discharged Lawyer or One Who Withdraws. The lawyer who discharged by his client or who withdrew from a case must, (a) immediately turn over all papers and property to which the client is entitled, and (b) shall cooperate with the succeeding lawyer in the orderly transfer of the case.The turnover of all the papers and property is subject to the lawyers retainer lien.

Attorneys lien Protected Under the Rules of the Court.- Attorneys lien are provided and protected by the Rules of Court-Section 37. Attorneys Lien. An attorney shall have a lien upon the funds, documents, and appears of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money and executions issued in the pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused, a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party: and he shall have the same right and power such judgment and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements (Rule 138, RRC).The first portion covers what is ordinarily referred to as retaining lien; while the second portion refers to the charging lien.

Courts must Respect and Protect the Attorneys Lien. The court in the exercise of their exclusive and supervisory authority over attorneys as officers of the court, are bound to respect and protect attorneys lien (Ulanday vs. Manila Railroad Co., 45 Phil. 540) which, in the words of the Chief Justice of Marshall, is necessary to preserve the decorum and respectability of the profession. So, it has been held that the papers are improperly taken away from the custody of an attorney, lien is not lost thereby (Dicas vs. Stockley, 7 Car. & P., 587; note 31 Am. De., 549); and an attorney from whom papers, which he has a right to hold to secure payment for his services, have been taken by an order and decree of the court, thereby swelling the funds for the payment of the creditors of the client, is entitled to the payment of the funds realized from the sale of the clients property, the debts for which the papers were held.

Rule 22.02 Applies only to Retaining Lien.

- The Rules applies only to retaining lien. It cannot apply to a charging lien which arises only after counsel shall have secured a favorable money judgment for the client. The Rule contemplates of a lawyer who withdrew from the case or is discharged without finishing the case.

Concept of Retaining Lien

A retaining lien and may not be actively enforced. It amounts to a mere right to retain the papers as against the client until the lawyer is fully paid (5 Am. Jur. 392).

Concept of Charging LienThis is the equitable right of the attorney to have the fees due him for the services in a particular suit secured by the judgment or recovery in such suit (7 C. J. s. 1142). The object of tis lien is to protect the claim or the fruits of the lawyers labor (Myers vs. miller, 117 ALR 977).Charging lien may be exercised on all judgments for the payment of money and executions issued in pursuance of such judgments which the attorney had secured for his client in litigations.

Metropolitan Bank & Trust Company vs. Court of Appeals181 SCRA 367

Held: Consequent to such provision, a charging lien, to be enforceable as security for the payment of attorneys fees, requires a condition sine quo non a judgment for money an execution in pursuant to such judgment secured in the main action by the attorney in favor of his client. A lawyer may enforce his right to fees by filing the necessary petition as an incident in the main action in which his services were rendered when something is due his client in the action from which the fee is to be paid.

In Caina, et. al. vs. Victoriano, et. al., the Court had the occasion to rule that the lien of respondent is not of a nature which attaches to the property in litigation but is at most a personal claim enforceable by a writ of execution. In Ampil vs, Juliano-Agrava, et. al., the Court once again declared that a charging lien presupposes that the attorney has secured a favorable money judgment for his client. xxx Further, in Director of Lands vs. Ababa, et. al., we held that (a) charging lien under Section 37, Rule 138 of the Revised Rules of Court is limited only to money judgments and not to judgments for the annulment of a contract or for delivery of real property as in the instant case.Nonetheless, it bears mention at this juncture that an enforceable charging lien, duly recorded, is within the jurisdiction of the court trying the main case and this jurisdiction subsists until the lien is settled. Xxx

Basic Difference of Charging and Retaining LiensA charging lien does not rest upon possession as in the case of the retaining lien but upon the equity of an attorney to be paid his fees out of the judgment which he has obtained (Tuler vs. Superior Court, 23 ALR [NS] 1045).Unlike a charging lien, a retaining lien is dependent upon possession and does not attach to anything not in the attorneys hands. It subsists only as long as the attorney has possession and does not attach to anything not in the attorneys hands. It subsists only as long as the attorney has possession (Rustia vs. Abeto, 40 O. G. 32, 77).

Requisites of a Retaining LienIn order that the exercise of a retaining lien may be valid, it is not enough that there exist a client-lawyer relationship, that the claims for attorneys fees are not satisfied and that the claims for attorneys fees are not satisfied and that counsel is in possession of the subject papers, documents and funds. It is still required that his possession be lawful. Otherwise the lawyer cannot exercise his righto retaining lien.

Retaining Lien Expires when Possession EndsThe general or retaining lien of an attorney is dependent upon possession and does not attach to anything not in the attorneys hands. It should be distinguished from the special and charging lien provided for in the last part of section 33 of No. 127 of the Rules of Court which was created to save the attorneys rights were he had been unable to get possession. The retaining lien, therefore, exists only so long as the attorney retains possession of the subject matter and expires when the possession ends. The retaining lien is only a passive right and cannot be actively enforced. It amounts to a mere right to retain the papers as against the client, until the attorney is fully paid.

Requisites of Charging LienExistence of a client-lawyer relationship;Favorable judgment secured by the counsel for his client which judgment is a money judgment;Nothing into the records of the case through the filing of an appropriate motion of the statement of the lawyers claim for attorneys fees with copies furnished to the client and adverse party (Rule 138, Sec. 37, RRC; Director of Lands vs. Ababa, 88 SCRA 515).

Effects and Importance of Noting of Charging LienOnce the lawyers charging lien is entered upon the records of the case, the lawyers fee is protected. It prevents the dishonest client from depriving the counsel of his fees.Moreover, an attorney who has caused a statement of his lien to be entered upon the records of a case wherein his client is involved need not file a separate suit to determine the amount of his claims had been filed (Palanca vs. Pecson, 94 Phil. 419).

May a Charging Lien be Entered into the Records even before a Judgment is Rendered?

The answer is in the affirmative. However, it can be enforced only after the judgment is secured in favor of the client (Palanca vs. Pecson, 50 O. G. 1585; 94 Phil. 423)

Against whom can a Lien be Enforced?

A charging lien which is enforceable by writ of execution, may be enforced against the attorneys client or against the judgment debtor.

May a Lawyer Exercise a charging Lien on the Land of His Client?Although he has successfully prosecuted an action to establish the clients title thereto, he cannot have a lien on the land. There is no money judgment on which it can arise (See MBTC Co. vs. CA, 181 SCRA 375). N. B. However, there can be an exception as when the lawyer and client have entered into an agreement authorizing it.

In the MBTC case (supra), the Supreme Court also said- In fact, the same source from which private respondent culled the American cases it cited expressly declares that in the absence of a statute or of special agreement providing otherwise, the general rule is that an attorney has no lien on the land of his client, notwithstanding an attorney has, with respect to the land in question, successfully prosecuted a suit to establish the title of his client thereto, recovered title or possession in a suit prosecuted by such client, or defended successfully such clients right and title against as unjust claim or an unwarranted attack. as is the situation in the case at bar. This is an inescapable recognition that a contrary rule obtains in other jurisdictions thereby resulting in doctrinal rulings of converse or modulated import.

Duties of a Discharged Lawyer or One Who Withdraws:

Immediately turn-over all papers and property to which the client is entitled; and

To cooperate with his successor in the orderly transfer of the case.

Conditions for Substitution of Counsel (1997 BAR EXAM)Written request for such substitution;

Written consent of the client; and

Written consent of the attorney to be substituted or in the absence thereof, proof of service of notice of said motion to the attorney to be substituted.

Comparative Distinctions between Retaining and Charging Lien

Retaining LienCharging LienNaturePassive Lien. It cannot be actively enforced. It is a general lien.Active Lien. It can be enforced by execution (Rule 138, Sec. 37, last sentence). It is a special lien.BasisLawful possession of papers, documents, property belonging to the client.Securing of a favorable money judgment for the client.CoverageCovers only papers, documents and property in the lawful possession of the attorney by reason of his professional employment. Covers all judgments for the payment of money and executions issued in pursuance of such judgments. (Note: It cannot be attach to judgments for delivery of real estate or for annulment of contract [Director of Lands vs. Aldaba, 88 SCRA 515]). EffectivityAs soon as the attorney gets possession of the papers, documents or property.As soon as the claim for attorneys fees had been entered into the records of the case rules 138. Ibid.). NoticeClient need not be notified to make it effective.Client and adverse party must be notified to make it effective. (Rule 138, ibid.).ApplicabilityMay be exercised before judgment or execution, or irregardless thereof. Generally, it is exercisable only when the attorney had already secured a favorable judgment for his client.

BAR QUESTIONState the rule on (a) the right of the client to dismiss his lawyer and (b) the prerogative of a lawyer to withdraw as counsel.

ANSWERA client has the right to dismiss his lawyer at any time, with or without just cause. The existence or non-existence of just cause is material only for determining the right of the lawyer to compensation for services rendered. The clients right to terminate the lawyers services springs from strictly personal and highly confidential nature of relationship between the lawyer and the client. Once the client loses confidence in his lawyer, he has the right to dismiss him.

ANSWEROn the other hand, the lawyer does not have an unqualified right to withdraw as counsel. As an officer of the court, he may not withdraw or be permitted to withdraw as counsel if such withdraw will work injustice to a client or frustrate the ends of justice. A lawyer may withdraw anytime with his clients written consent. Without such consent, he may withdraw his service only for a good cause and upon notice appropriate in the circumstances. (Canon 22, Code of Professional Responsibility).

BAR QUESTIONM has a pending case for collection of a sum of money. He is not satisfied with his lawyer N, who, almost always, goes to court evidently unprepared. He wants you to promptly take over the case. You agree to handle the case. What steps must you take to formalize the engagement?

ANSWERI will ask M to first terminate or secure the withdrawal of n as his counsel. If Ns services are terminated, I can subsequently enter my appearance as the new counsel of M. if he agrees to withdraw simultaneously with my appearance.

I will prepare a Substitution of Attorney to be filed in court, containing the written conformities of M and N.

BAR QUESTIONPlaintiff was represented by Atty. A. Without Atty. A having filed a withdrawal, Atty. B filed an Appearance Manifestation on July 17, 1984 and thereafter all pleadings and court orders were furnished by Atty. B. The decision in the case was served first on Atty. A, and one month later on Atty. B. For purposed of computing appeal period, which date of receipt would be controlling- that on Atty. A or Atty. B?

ANSWERThe controlling date would be the receipt of the decision by the new lawyer because of the circumstance that all previous orders and pleadings were already served on the new lawyer although there was no specific withdrawal by the original counsel. (See Dolores de Mesa Abad vs. Cesar de Mesa Topacio, G. r. No. L-42225, July 9, 1985)

BAR QUESTIONAtty. Gs contract with his client stipulated payment of twenty percent of the claim plus 5% for the representation and miscellaneous expenses. Counsel filed the complaint for damages had defendants declared in default and secured writ of attachments. Later he was dismissed by his client for delay in the delivery of the checks representing the garnished amount. Is he entitled to the full amount of the stipulated fees?

ANSWERNo. Nothing in this case so appears complicated and no extraordinary skill is needed for the attorney to accomplish what he had done in the case before he was terminated. There was no way of determining at that point how much the petitioners would recover or whether they would even recover anything. On the basis of quantum meruit the counsel is entitled to only PhP 10,000.00 instead of the amount PhP 319, 500.00. (See Borcena vs. Intermediate Appellate Court 147 SCRA 111)

THANK YOU!

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