LAWYERS

VALENCIA V. CABANTING April 26, 1991

Facts:
• In 1933, petitioner Paulino Valencia and his wife Romana allegedly bout a parcel of land, where
they built their residential house from a certain Serapia Raymundo, an heir of Pedro Raymundo, the
original owner of the parcel of land.

• However, they failed to register the sale or secure a transfer certificate of title in their names.

• Then, a conference was held in the house of Atty. Jovellanos to settle the dispute between Serapia
and the Sps. Valencia.

• As a result, Serapia was willing to relinquish her ownership if the Valencias could show
documents evidencing ownership.

• Paulino presented a deed of sale written in Ilocano. Serapia claimed that the deed covered a
different property. Thus, the parties were not able to settle their differences.

• Assisted by Atty. Cabanting, Serapia filed a complaint against Paulino for the recovery of
possession with damages.

• The Valencias, on the other hand, engaged the services of Atty. Antiniw, who advised them to
present a notarized deed of sale instead of the document in Ilocano.

 For the amount of P200 paid by Paulino to Atty. Antiniw, the latter paid a person who would
forge the signature of the alleged vendor.

• The Pangasinan CFI favored Serapia.

• While the petition was of appeal, Serapia sold 40 sq. m. to Atty. Jovellanos and the remaining
was also sold to her counsel, Atty. Cabanting.

ISSUE: WON Atty. Cabanting purchased the subject property in violation of Art. 1491, NCC.

HELD: YES!
• Art. 1491, NCC, prohibiting the sale to counsel concerned, applies only while the litigation is
pending.

o A thing is said to be in litigation not only if it there is some contest or litigation over it in
court, but also from the moment that it becomes to the judicial action of the judge.

• In the case at bar, while it is true that Atty. Cabanting purchased the lot after finality of judgment,
there was still a certiorari proceeding.

o In certiora ri proceedings, the appellate court may either grant or dismiss the petition.

o Thus, it is not safe to conclude, for purposes under Art. 1491, NCC, that litigation has
terminated when the judgment of the trial court become final while certiorari connected
therewith is still in progress.
 • Thus, the purchase of the property by Atty. Cabanting in this case constitutes malpractice in
violation of Art. 1491, NCC and the Canons of Professional Ethics.

 The sale in favor of Atty. Jovellanos does not constitute malpractice. There was no attorney-client
relationship bet. Serapia and Atty. Jovellanos – the latter did not take part as counsel in the Civil Case.

 Atty. Antiniw committed falsification of a deed of sale.

LAWYERS

DEL ROSARIO V. MILLADO

Facts:

• One Eladio Tibursio, now deceased, claimed title to a tract of land of about 430 ha. in Diliman,
Quezon City.

• That said parts of land were the object of two ejectment cases of the City Court of Quezon City
against La Paz Mesina Vda. De Pascual, one of the heirs of the said deceased.

• One of the two ejectment cases was filed by herein petitioner Florentino del Rosario, and the
other one was by Leonor Sta. Clara.

• Before the institution of the said cases, one Conrado Baluyot, who claimed to be another heir of
Eladio Tibursio, offered to allow respondent to construct a house on part of said land, in
consideration of his professional services in defense of the claim of the Tiburcio’s.

o That should Atty. Millado succeed in securing a decision favorable to the Tiburcio’s, he
could buy the land on which his house was built by paying the current value thereof.

• Meanwhile, Mrs. Pascual, who occupied another lot in the same block, knew that Atty. Millado
was in possession of lots 4 and 5 and had constructed thereon a house by agreement with Baluyot.

• Mrs. Pacual, who claimed interest in the whole Block E-102, asked Atty. Millado to be her
counsel in said ejectment cases.

o After filing the answer of Mrs. Pascual, as defendant in the said 2 cases, Atty. Millado
ceased to be her counsel therein.

ISSUE: WON Atty. Millado violated Art. 1491 of the Civil Code.

HELD: NO.

• The provisions of the Civil Code and of the Canons of Legal Ethics prohibit the purchase by
lawyers of any interest in the subject matter of the litigation in which they participated by reason
of their profession.

• However, in this case, petitioner has not established a violation of such injunction.
• The records show that respondent’s alleged interest in said lots was acquired before he intervened
as counsel for Mrs. Pascual in the ejectment cases against her.

• Moreover, said interest of Atty. Millado is not necessarily inconsistent with that oof his
aforementioned client.
LAWYERS

DE LAIG V. CA

Facts:

• Petre Galero obtained from the Bureau of Lands a Homestead Patent covering 219, 949 sq. m. of
land located at Labo, Camarines Norte.
• On June 25, 1940, Galero sold the land to a Mario Escuta for P300.
• Escuta also sold the same land to Florencio Caramoan.

• Through a proper court action, Petre Galero with Atty. Benito Laig, the deceased husband of
herein petitioner Rosarion Vda. De Laig as counsel, recovered the subject land after the court was
convinced that the alienation violated Sec. 118 of the Public Land Act.

• Later on, a deed of sale was executed by Galero as vendo in favor of Atty. Benito Laig as vendee.

• Galero sold to Atty. Laig the subject land with its improvements for P1,600 plus Atty.’s fees due
to Atty. De Laig for his legal services as counsel for Galero.

ISSUE: WON the sale between Galero and Atty. De Laig was made in violation of Art. 1491, CC.

HELD: NO.

• The property in question was no longer the subject of litigation.

• The sale was made after the reconveyance case has been decided and which decision has become
final.
LAWYERS

FABILLO V. IAC

• Juliana Fabillo, in her last will and testament dated Aug. 16, 1957, bequeathed to her brother,
Florencio, a house and lot in San Salvador, Palo, Leyte and to his husband Gregorio D. Brioso a piece of
land in Pugahanay, Palo, Leyte.
• After Justina’s death, Florencio filed a petition for the probate of said will.
• Florencio sought the assistance of Atty. Alfredo M. Murillo in recovering the San Salvador property.
• Florencio and Murillo entered into a contract, stipulating therein that Murillo shall represent Florencio
in the conclusion of the two cases, and in consideration of Murillo’s legal services, he shall be paid, in
case of success 40% of what he may acquire from the favorable judgment.
o In case that the properties are sold, mortgaged or leased, Murillo shall be entitled to 40% of
the purchase price, proceeds of the mortgage, or rentals, respectively.
• Pursuant to the said contract, Murillo filed a civil case against Gregorio D. Brioso to recover the San
Salvador property. However, the case was terminated when the parties entered into a compromise
agreement declaring Florencio as the lawful owner of not only the San Salvador property but also of the
parcel of land located at Pugahanay.
• As a result, Murillo proceeded to implement the contract of services between him and Florencio by
taking possession and exercising rights of ownership over 40% of said properties.
• In 1966, Florencio claimed exclusive right of ownership over the two properties and refused to give to
Murillo his share of the properties.
• Murillo filed in the CFI a complaint for ownership of the parcel of land.

ISSUE: WON THE CONTRACT OF SERVICES VIOLATED THE PROVISION OF ART. 1491, NCC.

HELD: NO! The contract of services did not violate Art. 1491, NCC.

• The said prohibition applies only if the sale or assignment of the property takes place during the
pendency of the litigation involving the client’s property.
• Thus, the contract between the a lawyer and a client stipulating a contingent fee is not covered by said
prohibition under Art. 1491(5), CC because the payment of said fee is not made during the pendency of
the litigation but only after the judgment was rendered final.
• As long as the lawyer did not exert undue influence on his client, that no fraud is committed or
implication applied, or that the compensation is clearly not excessive as to amount to extortion, a contract
for contingent fee is valid and enforceable.

• However, the Court disagrees that the contingent fee stipulated by the partiesis 40% of the properties
subject of the litigation.
o A careful scrutiny of the contract shows that the parties intended 40% of the value of the
properties as Murillo’s contingent fee.
o This is borne out by the stipulation that “in case of success of any or both cases,” Murillo
shall be paid “the sum equivalent to 40% of whatever benefit” Fasbillo would derive from
favorable judgments.
• Moreover, the herein contract was vague with respect to a situation wherein the properties are neither
sold, mortgaged nor leased because Murillo is allowed “to have the option of occupying or leasing to any
interested party 40% of the house and lot”.
o Had the parties intended that Murillo should be the lawful owner of 40% of the properties, it would
have been stipulated in the contract considering that the Fabillos would part with actual portions of
their properties and cede the same to Murillo.
• The ambiguity of said provision should be resolved against Murillo as it was him pwho drafted the
contract.
o This is in consonance with the rule of interpretation that, in construing a contract of
professional services between a lawyer and a client, a construction as would be more favorable to the
client should be adopted even if it would prejudice the lawyer.