FIRST DIVISION

[A.C. No. 9091. December 11, 2013.]

CONCHITA A. BALTAZAR, ROLANDO SAN PEDRO, ALICIA EULALIO-

RAMOS, SOLEDAD A. FAJARDO AND ENCARNACION A. FERNANDEZ ,
complainants, vs . ATTY. JUAN B. BAÑEZ, JR. , respondent.

RESOLUTION

SERENO , C.J : p

Complainants are the owners of three parcels of land located in Dinalupihan, Bataan.
1 On 4 September 2002, they entered into an agreement with Gerry R. Fevidal (Fevidal), a
subdivision developer. In that agreement, they stood to be paid P35,000,000 for all the lots
that would be sold in the subdivision. 2 For that purpose; they executed a Special Power of
Attorney authorizing Fevidal to enter into all agreements concerning the parcels of land
and to sign those agreements on their behalf. 3
Fevidal did not update complainants about the status of the subdivision project and
failed to account for the titles to the subdivided land. 4 Complainants also found that he
had sold a number of parcels to third parties, but that he did not turn the proceeds over to
them. Neither were complainants invited to the ceremonial opening of the subdivision
project. 5 Thus, on 23 August 2005, they revoked the Special Power of Attorney they had
previously executed in his favor. 6
Complainants subsequently agreed to settle with Fevidal for the amount of
P10,000,000, but the latter again failed to pay them. 7 Complainants engaged the
professional services of respondent for the purpose of assisting them in the preparation
of a settlement agreement. 8 Instead of drafting a written settlement, respondent
encouraged them to institute actions against Fevidal in order to recover their properties.
Complainants then signed a contract of legal services, 9 in which it was agreed that
they would not pay acceptance and appearance fees to respondent, but that the docket
fees would instead be shared by the parties. Under the contract, complainants would pay
respondent 50% of whatever would be recovered of the properties.
In preparation for the ling of an action against Fevidal, respondent prepared and
notarized an A davit of Adverse Claim, seeking to annotate the claim of complainants to
at least 195 titles in the possession of Fevidal. 1 0 A certain Luzviminda Andrade (Andrade)
was tasked to submit the A davit of Adverse Claim to the Register of Deeds of Bataan. 1 1
The costs for the annotation of the adverse claim were paid by respondent. Unknown to
him, the adverse claim was held in abeyance, because Fevidal got wind of it and convinced
complainants to agree to another settlement. 1 2 DTSIEc

Meanwhile, on behalf of complainants, and after sending Fevidal a demand letter

dated 10 July 2006, respondent led a complaint for annulment, cancellation and
revalidation of titles, and damages against Fevidal before the Regional Trial Court (RTC) of
Bataan on 13 October 2006. 1 3

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 Complainants found it hard to wait for the outcome of the action. Thus, they
terminated the services of respondent on 8 June 2007, withdrew their complaint against
Fevidal on 9 June 2007, and finalized their amicable settlement with him on 5 July 2007. 1 4
Respondent led a Manifestation and Opposition 1 5 dated 20 July 2007 before the
RTC, alleging that the termination of his services and withdrawal of the complaint had been
done with the intent of defrauding counsel. On the same date, he led a Motion for
Recording of Attorney's Charging Lien in the Records of the Above-Captioned Cases. 1 6
When the RTC granted the withdrawal of the complaint, 1 7 he led a Manifestation and
Motion for Reconsideration. 1 8
After an exchange of pleadings between respondent and Fevidal, with the latter
denying the former's allegation of collusion, 1 9 complainants sought the
suspension/disbarment of respondent through a Complaint 2 0 led before the Integrated
Bar of the Philippines (IBP) on 14 November 2007. Complainants alleged that they were
uneducated and underprivileged, and could not taste the fruits of their properties because
the disposition thereof was "now clothed with legal problems" brought about by
respondent. 2 1 In their complaint, they alleged that respondent had violated Canons 1.01,
2 2 1.03, 2 3 1.04, 2 4 12.02, 2 5 15.05, 2 6 18.04, 2 7 and 20.04 2 8 of the Code of Professional
Responsibility.
On 14 August 2008, the IBP Commission on Bar Discipline adopted and approved
the Report and Recommendation 2 9 of the investigating commissioner. It suspended
respondent from the practice of law for a period of one year for entering into a
champertous agreement. 3 0 On 26 June 2011, it denied his motion for reconsideration. aSIDCT

On 26 November 2012, this Court noted the Indorsement of the IBP Commission on
Bar Discipline, as well as respondent's second motion for reconsideration.
We nd that respondent did not violate any of the canons cited by complainants. In
fact, we have reason to believe that complainants only led the instant complaint against
him at the prodding of Fevidal.
Respondent cannot be faulted for advising complainants to le an action against
Fevidal to recover their properties, instead of agreeing to a settlement of P10,000,000 — a
measly amount compared to that in the original agreement, under which Fevidal undertook
to pay complainants the amount of P35,000,000. Lawyers have a sworn duty and
responsibility to protect the interest of any prospective client and pursue the ends of
justice. 3 1 Any lawyer worth his salt would advise complainants against the abuses of
Fevidal under the circumstances, and we cannot countenance an administrative complaint
against a lawyer only because he performed a duty imposed on him by his oath.
The claim of complainants that they were not informed of the status of the case is
more appropriately laid at their door rather than at that of respondent. He was never
informed that they had held in abeyance the ling of the adverse claim. Neither was he
informed of the brewing amicable settlement between complainants and Fevidal. We also
nd it very hard to believe that while complainants received various amounts as loans from
respondent from August 2006 to June 2007, 3 2 they could not spare even a few minutes to
ask about the status of the case. We shall discuss this more below.
As regards the claim that respondent refused to "patch up" with Fevidal despite the
pleas of complainants, we note the latter's Sinumpaang Salaysay dated 24 September
2007, in which they admitted that they could not convince Fevidal to meet with respondent
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 to agree to a settlement. 3 3
Finally, complainants apparently refer to the motion of respondent for the recording
of his attorney's charging lien as the "legal problem" preventing them from enjoying the
fruits of their property.
Section 26, Rule 138 of the Rules of Court allows an attorney to intervene in a case
to protect his rights concerning the payment of his compensation. According to the
discretion of the court, the attorney shall have a lien upon all judgments for the payment of
money rendered in a case in which his services have been retained by the client. SEAHID

We recently upheld the right of counsel to intervene in proceedings for the recording
of their charging lien. In Malvar v. KFPI, 3 4 we granted counsel's motion to intervene in the
case after petitioner therein terminated his services without justi able cause. Furthermore,
after nding that petitioner and respondent had colluded in order to deprive counsel of his
fees, we ordered the parties to jointly and severally pay counsel the stipulated contingent
fees.
Thus, the determination of whether respondent is entitled to the charging lien is
based on the discretion of the court before which the lien is presented. The compensation
of lawyers for professional services rendered is subject to the supervision of the court, not
only to guarantee that the fees they charge remain reasonable and commensurate with the
services they have actually rendered, but to maintain the dignity and integrity of the legal
profession as well. 3 5 In any case, an attorney is entitled to be paid reasonable
compensation for his services. 3 6 That he had pursued its payment in the appropriate
venue does not make him liable for disciplinary action.
Notwithstanding the foregoing, respondent is not without fault. Indeed, we nd that
the contract for legal services he has executed with complainants is in the nature of a
champertous contract — an agreement whereby an attorney undertakes to pay the
expenses of the proceedings to enforce the client's rights in exchange for some bargain to
have a part of the thing in dispute. 3 7 Such contracts are contrary to public policy 3 8 and
are thus void or inexistent. 3 9 They are also contrary to Canon 16.04 of the Code of
Professional Responsibility, which states that lawyers shall not lend money to a client,
except when in the interest of justice, they have to advance necessary expenses in a legal
matter they are handling for the client.
A reading of the contract for legal services 4 0 shows that respondent agreed to pay
for at least half of the expense for the docket fees. He also paid for the whole amount
needed for the recording of complainants' adverse claim.
While lawyers may advance the necessary expenses in a legal matter they are
handling in order to safeguard their client's rights, it is imperative that the advances be
subject to reimbursement. 4 1 The purpose is to avoid a situation in which a lawyer acquires
a personal stake in the client's cause. Regrettably, nowhere in the contract for legal
services is it stated that the expenses of litigation advanced by respondent shall be
subject to reimbursement by complainants.
In addition, respondent gave various amounts as cash advances (bali), gasoline and
transportation allowance to them for the duration of their attorney-client relationship. In
fact, he admits that the cash advances were in the nature of personal loans that he
extended to complainants. 4 2 IEaCDH

Clearly, respondent lost sight of his responsibility as a lawyer in balancing the

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 client's interests with the ethical standards of his profession. Considering the surrounding
circumstances in this case, an admonition shall su ce to remind him that however dire the
needs of the clients, a lawyer must always avoid any appearance of impropriety to
preserve the integrity of the profession.
WHEREFORE, Attorney Juan B. Bañez, Jr. is hereby ADMONISHED for advancing
the litigation expenses in a legal matter he handled for a client without providing for terms
of reimbursement and lending money to his client, in violation of Canon 16.04 of the Code
of Professional Responsibility. He is sternly warned that a repetition of the same or a
similar act would be dealt with more severely.
Let a copy of this Resolution be attached to the personal record of Attorney Bañez,
Jr.
SO ORDERED.
Leonardo-de Castro, Bersamin, Villarama, Jr. and Reyes, JJ., concur.

Footnotes
1.Rollo (Vol. I), pp. 3-4.

2.Id. at 5-6.
3.Id. at 6-7.
4.Rollo, (Vol. II), p. 127.

5.Id.
6.Id. at 126.

7.Id. at 263.
8.Rollo (Vol. I), p. 7.

9.Id. at 25.
10.Rollo (Vol. II), pp. 102-105.
11.Id. at 7-8.

12.Id. at 264.
13.Id. at 8-9.

14.Rollo (Vol. I), pp. 11-13.

15.Rollo (Vol. II), pp. 187-191.

16.Id. at 197-203.
17.Id. at 209.
18.Id. at 212-222.

19.Id. at 237-238.
20.Rollo (Vol. I), pp. 1-18.
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 21.Id. at 2.
22.A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
23.A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or
delay any man's cause.
24.A lawyer shall encourage his clients to avoid, end or settle a controversy if it will admit of a
fair settlement.
25.A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse Court
processes.
26.A lawyer when advising his client, shall give a candid and honest opinion on the merits and
probable results of the client's case, neither overstating nor understating the prospects of
the case.
27.A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to client's request for information.
28.A lawyer shall avoid controversies with clients concerning his compensation and shall resort
to judicial action only to prevent imposition, injustice or fraud.
29.Rollo (Vol. IV), pp. 2-12.
30.Id. at 1.

31.Manzano v. Soriano, A.C. No. 8051, 7 April 2009, 584 SCRA 1.

32.Rollo (Vol. II), pp. 90-101.

33.Id. at 264.
34.G.R. No. 183952, 9 September 2013.

35.Municipality of Tiwi v. Betito, G.R. No. 171873, 9 July 2010, 624 SCRA 623.
36.RULES OF COURT, Rule 138, Sec. 24.

37.Bautista v. Gonzales, 261 Phil. 266, 281 (1990).

38.Id.
39.CIVIL CODE, Art. 1409 (1).

40.KAMI, na nakalagda sa ilalim nito ay hinihirang ang tanggapan ng BAÑEZ, BAÑEZ &
ASSOCIATES upang siyang humawak sa lahat ng kaso na aming isasampa laban kay
Gerry R. Fevidal at iba pang kasama nito, hinggil sa mga parsela ng lupa na
matatagpuan sa Bo. Pinulot, Hermosa, Bataan, na paw[a]ng pag-aari ni Dominador
Alejo, ayon sa mga sumusunod na alituntunin:
 1. Na kami ay hindi magbabayad ng acceptance fee;
 2. Na kami ay hindi magbabayad ng appearance fee tuwing may hearing;
 3. Na paghahatian namin ng aming abogado ang magagastos bilang docket fee o
bayad sa husgado sa pagsasampa ng kaso;
 4. Na aming babayaran ang aming nasabing abogado ng katumbas ng 50% ng
anumang marerecover o mababawi namin sa mga ari-ariang nakasaad sa Extrajudicial
Settlement of Estate na isinagawa noong Abril 12, 1986, gaya ng mga sumusunod: [1]
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 TCT No. T-18653 [79,885 sq.m.]; [2] TCT No. T-21447 [80,555 sq.m.] at [3] 38847 [35,380
sq.m.], at ito ay matapos bawasin ang 10% ng anumang marerecover bilang parte ni
Luzviminda Andrade;
 5. Ang anumang bayarin sa buwis para sa nasabing mga parsela ng lupa ay aming
sasagutin.
41.Supra note 38.

42.Rollo (Vol. IV), p. 33.

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