Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

A.C. No. 6281               September 26, 2011

VALENTIN C. MIRANDA, Complainant,
vs.
ATTY. MACARIO D. CARPIO, Respondent.

DECISION

PERALTA, J.:

This is a disbarment case against Atty. Macario D. Carpio filed by Valentin C. Miranda.1

The facts, as culled from the records, are as follows:

Complainant Valentin C. Miranda is one of the owners of a parcel of land consisting of 1,890 square meters located at Barangay
Lupang Uno, Las Piñas, Metro Manila. In 1994, complainant initiated Land Registration Commission (LRC) Case No. M-226 for the
registration of the aforesaid property. The case was filed before the Regional Trial Court of Las Piñas City, Branch 275. During the
course of the proceedings, complainant engaged the services of respondent Atty. Carpio as counsel in the said case when his
original counsel, Atty. Samuel Marquez, figured in a vehicular accident.

In complainant's Affidavit,2 complainant and respondent agreed that complainant was to pay respondent Twenty Thousand Pesos
(PhP20,000.00) as acceptance fee and Two Thousand Pesos (PhP2,000.00) as appearance fee. Complainant paid respondent the
amounts due him, as evidenced by receipts duly signed by the latter. During the last hearing of the case, respondent demanded the
additional amount of Ten Thousand Pesos (PhP10,000.00) for the preparation of a memorandum, which he said would further
strengthen complainant's position in the case, plus twenty percent (20%) of the total area of the subject property as additional fees
for his services.

Complainant did not accede to respondent's demand for it was contrary to their agreement. Moreover, complainant co-owned the
subject property with his siblings, and he could not have agreed to the amount being demanded by respondent without the
knowledge and approval of his co-heirs. As a result of complainant's refusal to satisfy respondent's demands, the latter became
furious and their relationship became sore.

On January 12, 1998, a Decision was rendered in LRC Case No. M-226, granting the petition for registration, which Decision was
declared final and executory in an Order dated June 5, 1998. On March 24, 2000, the Land Registration Authority (LRA) sent
complainant a copy of the letter addressed to the Register of Deeds (RD) of Las Piñas City, which transmitted the decree of
registration and the original and owner's duplicate of the title of the property.

On April 3, 2000, complainant went to the RD to get the owner's duplicate of the Original Certificate of Title (OCT) bearing No. 0-94.
He was surprised to discover that the same had already been claimed by and released to respondent on March 29, 2000. On May 4,
2000, complainant talked to respondent on the phone and asked him to turn over the owner's duplicate of the OCT, which he had
claimed without complainant's knowledge, consent and authority. Respondent insisted that complainant first pay him the
PhP10,000.00 and the 20% share in the property equivalent to 378 square meters, in exchange for which, respondent would deliver
the owner's duplicate of the OCT. Once again, complainant refused the demand, for not having been agreed upon.

In a letter3 dated May 24, 2000, complainant reiterated his demand for the return of the owner's duplicate of the OCT. On June 11,
2000, complainant made the same demand on respondent over the telephone. Respondent reiterated his previous demand and
angrily told complainant to comply, and threatened to have the OCT cancelled if the latter refused to pay him.

On June 26, 2000, complainant learned that on April 6, 2000, respondent registered an adverse claim on the subject OCT wherein
he claimed that the agreement on the payment of his legal services was 20% of the property and/or actual market value. To date,
respondent has not returned the owner's duplicate of OCT No. 0-94 to complainant and his co-heirs despite repeated demands to
effect the same.

In seeking the disbarment or the imposition of the appropriate penalty upon respondent, complainant invokes the following
provisions of the Code of Professional Responsibility:
Canon 20. A lawyer shall charge only fair and reasonable fees.

Canon 16. A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.

Canon 16.03. A lawyer shall deliver the funds and properties of his client when due or upon demand. x x x

In defense of his actions, respondent relied on his alleged retaining lien over the owner's duplicate of OCT No. 0-94. Respondent
admitted that he did not turn over to complainant the owner's duplicate of OCT No. 0-94 because of complainant's refusal,
notwithstanding repeated demands, to complete payment of his agreed professional fee consisting of 20% of the total area of the
property covered by the title, i.e., 378 square meters out of 1,890 square meters, or its equivalent market value at the rate of
PhP7,000.00 per square meter, thus, yielding a sum of PhP2,646,000.00 for the entire 378-square-meter portion and that he was
ready and willing to turn over the owner's duplicate of OCT No. 0-94, should complainant pay him completely the aforesaid
professional fee.

Respondent admitted the receipt of the amount of PhP32,000.00, however, he alleged that the amount earlier paid to him will be
deducted from the 20% of the current value of the subject lot. He alleged that the agreement was not reduced into writing, because
the parties believed each other based on their mutual trust. He denied that he demanded the payment of PhP10,000.00 for the
preparation of a memorandum, since he considered the same unnecessary.

In addition to the alleged agreement between him and complainant for the payment of the 20% professional fees, respondent
invoked the principle of "quantum meruit" to justify the amount being demanded by him.

In its Report and Recommendation4 dated June 9, 2005, the Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-
CBD) recommended that respondent be suspended from the practice of law for a period of six (6) months for unjustly withholding
from complainant the owner's duplicate of OCT No. 0-94 in the exercise of his so-called attorney's lien. In Resolution No. XVII-2005-
173,5 dated December 17, 2005, the IBP Board of Governors adopted and approved the Report and Recommendation of the IBP-
CBD.

Respondent filed a motion for reconsideration of the resolution of the IBP Board of Governors adopting the report and
recommendation of the IBP-CBD. Pending the resolution of his motion for reconsideration, respondent filed a petition for
review6 with this Court. The Court, in a Resolution7 dated August 16, 2006, directed that the case be remanded to the IBP for proper
disposition, pursuant to this Court's resolution in Noriel J. Ramientas v. Atty. Jocelyn P. Reyala.8

In Notice of Resolution No. XVIII-2008-672, dated December 11, 2008, the IBP Board of Governors affirmed Resolution No. XVII-
2005-173, dated December 17, 2005, with modification that respondent is ordered to return the complainant's owner's duplicate of
OCT No. 0-94 within fifteen days from receipt of notice. Hence, the present petition.

The Court sustains the resolution of the IBP Board of Governors, which affirmed with modification the findings and
recommendations of the IBP-CBD. Respondent's claim for his unpaid professional fees that would legally give him the right to retain
the property of his client until he receives what is allegedly due him has been paid has no basis and, thus, is invalid.

Section 37, Rule 138 of the Rules of Court specifically provides:

Section 37. Attorney’s liens. – An attorney shall have a lien upon the funds, documents and papers 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 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 over such judgments and executions as his client would have to enforce his lien and secure the
payment of his just fees and disbursements.

An attorney's retaining lien is fully recognized if the presence of the following elements concur: (1) lawyer-client relationship; (2)
lawful possession of the client's funds, documents and papers; and (3) unsatisfied claim for attorney's fees.9 Further, the attorney's
retaining lien is a general lien for the balance of the account between the attorney and his client, and applies to the documents and
funds of the client which may come into the attorney's possession in the course of his employment. 10

In the present case, complainant claims that there is no such agreement for the payment of professional fee consisting of 20% of the
total area of the subject property and submits that their agreement was only for the payment of the acceptance fee and the
appearance fees.

As correctly found by the IBP-CBD, there was no proof of any agreement between the complainant and the respondent that the
latter is entitled to an additional professional fee consisting of 20% of the total area covered by OCT No. 0-94. The agreement
between the parties only shows that respondent will be paid the acceptance fee and the appearance fees, which the respondent has
duly received. Clearly, there is no unsatisfied claim for attorney's fees that would entitle respondent to retain his client's property.
Hence, respondent could not validly withhold the title of his client absence a clear and justifiable claim.

Respondent's unjustified act of holding on to complainant's title with the obvious aim of forcing complainant to agree to the amount
of attorney's fees sought is an alarming abuse by respondent of the exercise of an attorney's retaining lien, which by no means is an
absolute right, and cannot at all justify inordinate delay in the delivery of money and property to his client when due or upon
demand.11

Atty. Carpio failed to live up to his duties as a lawyer by unlawfully withholding and failing to deliver the title of the complainant,
despite repeated demands, in the guise of an alleged entitlement to additional professional fees. He has breached Rule 1.01 of
Canon 1 and Rule 16.03 of Canon 16 of the Code of Professional Responsibility, which read:

CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT
FOR LAW AND LEGAL PROCESS.

Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO
HIS POSSESSION.

Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand.  However, he shall have a lien
1âwphi1

over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice
promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his
client as provided for in the Rules of Court.

Further, in collecting from complainant exorbitant fees, respondent violated Canon 20 of the Code of Professional Responsibility,
which mandates that "a lawyer shall charge only fair and reasonable fees." It is highly improper for a lawyer to impose additional
professional fees upon his client which were never mentioned nor agreed upon at the time of the engagement of his services. At the
outset, respondent should have informed the complainant of all the fees or possible fees that he would charge before handling the
case and not towards the near conclusion of the case. This is essential in order for the complainant to determine if he has the
financial capacity to pay respondent before engaging his services.

Respondent's further submission that he is entitled to the payment of additional professional fees on the basis of the principle
of quantum meruit has no merit. "Quantum meruit, meaning `as much as he deserved' is used as a basis for determining the
lawyer's professional fees in the absence of a contract but recoverable by him from his client." 12 The principle of quantum
meruit applies if a lawyer is employed without a price agreed upon for his services. In such a case, he would be entitled to receive
what he merits for his services, as much as he has earned.13 In the present case, the parties had already entered into an agreement
as to the attorney's fees of the respondent, and thus, the principle of quantum meruit does not fully find application because the
respondent is already compensated by such agreement.

The Court notes that respondent did not inform complainant that he will be the one to secure the owner's duplicate of the OCT from
the RD and failed to immediately inform complainant that the title was already in his possession. Complainant, on April 3, 2000,
went to the RD of Las Piñas City to get the owner's duplicate of OCT No. 0-94, only to be surprised that the said title had already
been claimed by, and released to, respondent on March 29, 2000. A lawyer must conduct himself, especially in his dealings with his
clients, with integrity in a manner that is beyond reproach. His relationship with his clients should be characterized by the highest
degree of good faith and fairness. 14 By keeping secret with the client his acquisition of the title, respondent was not fair in his dealing
with his client. Respondent could have easily informed the complainant immediately of his receipt of the owner's duplicate of the
OCT on March 29, 2000, in order to save his client the time and effort in going to the RD to get the title.

Respondent's inexcusable act of withholding the property belonging to his client and imposing unwarranted fees in exchange for the
release of said title deserve the imposition of disciplinary sanction. Hence, the ruling of the IBP Board of Governors, adopting and
approving with modification the report and recommendation of the IBP-CBD that respondent be suspended from the practice of law
for a period of six (6) months and that respondent be ordered to return the complainant's owner's duplicate of OCT No. 0-94 is
hereby affirmed. However, the fifteen-day period from notice given to respondent within which to return the title should be modified
and, instead, respondent should return the same immediately upon receipt of the Court's decision.

WHEREFORE, Atty. Macario D. Carpio is SUSPENDED from the practice of law for a period of six (6) months, effective upon
receipt of this Decision. He is ordered to RETURN to the complainant the owner's duplicate of OCT No. 0-94 immediately upon
receipt of this decision. He is WARNED that a repetition of the same or similar act shall be dealt with more severely.

Let a copy of this Decision be furnished to the Office of the Bar Confidant, to be appended to the personal record of Atty. Macario D.
Carpio as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for circulation to all
courts in the country for their information and guidance.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice