Case Digest Ethics 6

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Aro vs Nañawa

Facts:
 Atty. Regino Aro was engaged by Luis and Pablo Magtibay for the prosecution of their claim, as heirs, in the estate of their deceased uncle Lucio
Magtibay, consisting of properties that were in the possession of Aurelia Martinez, spouses Gregorio and Maria Mendoza and spouses Maximo and
Rosario Porto. The agreement was to entrust the prosecution of the claim on a contingent basis. Aro filed a petition to litigate as pauper and a
complaint in the CFI of Laguna. The defendants in interposed a motion to dismiss
 Plaintiffs and Aro were invited to Sta. Maria, Laguna for an extrajudicial settlement. Plaintiffs were given notice of this invitation in their given
address in Calauag, to come to Aro's office in Candelaria to go to Sta. Maria, Laguna. Aro waited for plaintiffs, but due to their failure to come, the
latter sent a telegram to Ex-Mayor Cordova, a spokesperson to defendants, notifying him they're not being able to go.
 On October 28, 1964, Aro received a copy of the order dated October 24, 1964. To his surprise, we also received a second motion to dismiss, together
with an extrajudicial settlement, dated October 23, 1964, at Sta. Cruz, Laguna, and signed by plaintiffs and Aurelia Martinez. It was allegedly had
been made to appear that plaintiffs were adjudicated 1/4 share in the properties of the spouses and 3/4 share of Aurelia Martinez, but making it
appear also that said plaintiffs waived their share in favor of Aurelia Martinez. Because of this, Aro alleges that he was deprived of his contingent
fees.
 Aro filed by registered mail, on November 4, 1964, his opposition to the second motion to dismiss; and filed an action to set aside the deed of
extrajudicial partition and waiver, and to record the attorney's lien.
 On November 21, 1964, because of the inquiries made by Judge Arsenio Nañawa to Aro as to whether there is a Philippine precedent
 which directs the protection by the court of the rights of any of its officers against any collusion perpetrated by the parties in a case to defraud an
attorney of his compensation agreed upon.
 Unfortunately, Aro could only find American jurisprudence for his support. Judge Nañawa had opined that the claim for and the fixing of the
attorney's fees should be done in a separate action. In favor of private respondents here, Nañawa dismissed the case and refused to give Aro any kind
of immediate protection on his rights
 Aro claims that by the terms of their engagement, plaintiffs had expressly ceded to him 1/2 later verbally reduced to 1/3] of whatever share they
would get from the estate, and defendants had full knowledge thereof. Later, Aro tries to make out a case of certiorari for grave abuse of discretion
on the part of Judge Nañawa in dismissing the case with respect to his alleged attorney's fees, as well as a case of mandamus to order the latter to
resolve his opposition and counter-motion to fix the compensation he should be paid. He cites American authorities in that courts had always
intervened to protect attorneys against collusive agreements or fraudulent settlements entered into by the parties in a case to cheat attorneys out of
their costs or of their fees.
Issue: WON Aro's interests over his attorney's fees must be paid when his clients colluded with the adverse party to evade payment.(YES)
Ruling:
 "a client may, at anytime, dismiss his attorney or substitute another in his place", (Sec. 26, Rule 138) but it must be emphasized that the same
provision, which is an incorporation of Republic Act 636 into the Rules of Court, also provides that "if the contract between client and attorney had
been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client full compensation
..." In the case at bar, by entering into the compromise agreement in question and even inserting therein a prayer to the court to dismiss their case
filed by petitioner, (see footnote 6, ante) petitioner's clients impliedly dismissed him. (Rustia vs. the Court, etc., supra.)
 Such implied dismissal appears to Us to have been made without justifiable cause, none is urged anywhere in the record, and so, the above-quoted
provision of Section 26, Rule 138 applies here. The terms of the compromise in question, as spelled out in Annex A of Annex I of the petition,
indicate clearly that Aurelia Martinez, the defendant aunt in-law of petitioner's clients, acknowledged that the rights of said clients were practically
as alleged by petitioner in the complaint he filed for them. In other words, through the services of petitioner, his clients secured, in effect, a
recognition, which had been previously denied by their aunt-in-law, that they were entitled to a ¼ share in the estate left by their uncle. We hold that
under these circumstances, and since it appears that said clients have no other means to pay petitioner, since they instituted their case as paupers,
and that their aunt-in-law was aware of the terms of their contract of professional services with petitioner', said clients had no right to waive the
portion of their such acknowledged rights in favor of their opponent to the extent that such waiver would prejudice the stipulated contingent interest
of their lawyer and their aunt-in-law had no right to accept such waiver unqualified.
 Under Art 19 of the Civil Code: Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
 Under the circumstance extant in the record, it is clear that the compromise agreement in question falls short of the moral requirements of this quoted
article of the Civil Code. If for this reason alone, it should not be allowed to prejudice the rights of petitioner. Accordingly, as all of these
circumstances were presented to respondent judge before he issued the challenged order of dismissal and all the parties were heard thereon, it was
incumbent upon His Honor, in equity and to avoid multiplicity of suits, particularly, because the amount claimed by petitioner is only P1,000.00, to
have directly passed upon petitioner's claim, and not having done so, it would appear that the court a quo abused its discretion gravely enough to
warrant the writ of certiorari herein prayed for in so far as the questioned orders prejudiced petitioner's right to the fees for the professional services
which appear to have been creditably rendered by him. Respondents allege that the judgment of dismissal in question is already final because no
appeal was taken therefrom, but since We hold that the same was rendered with enough grave abuse of discretion to warrant the certiorari prayed
for, such alleged finality could not have materialized; obviously, petitioner could not have appealed, not being a party in the case.
 IN VIEW OF THE FOREGOING, the orders of the respondent court dated November 21, 1964 and January 9, 1965 in Civil Case No. SC-525 are
hereby set aside in so far as they prejudice the payment of petitioner's claim of attorney's fees in the form of either one-third of the ¼ share
acknowledged as his clients in the compromise in question or P1,000.00, which should constitute as a lien on the said share, in spite of the waiver
thereof in favor of respondent Aurelia Martinez. It is unnecessary to consider the petition for mandamus. Costs against, private respondents.

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