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FIRST DIVISION
CONCHITA A. BALTAZAR,
ROLANDO SAN PEDRO, ALICIA
EULALIO-RAMOS, SOLEDAD A.
FAJARDO AND ENCARNACION A.
FERNANDEZ,
Complainants,
- versus -
ATTY. JUAN B. BANEZ, JR.,
Respondent.
A.C. No. 9091
Present:
SERENO, CJ, Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
REYES,JJ
Promulgated:
DEC 11 2013
x--------------------------------------------------x
RESOLUTION
SERENO, CJ:
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 F evidal 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 tum the proceeds over to them. Neither were
complainants invited to the ceremonial opening of the subdivision project.
5
1
Rollo (Vol. I), pp. 3-4.
2
Id. at 5-6.
3
Id.at6-7.
4
Rollo, (Vol. II), p. 127.
5
Id.
(
Resolution 2 A.C. No. 9091

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 10,000,000, 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 filing of an action against Fevidal, respondent
prepared and notarized an Affidavit of Adverse Claim, seeking to annotate
the claim of complainants to at least 195 titles in the possession of Fevidal.
10

A certain Luzviminda Andrade (Andrade) was tasked to submit the Affidavit
of Adverse Claim to the Register of Deeds of Bataan.
11
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.
12

Meanwhile, on behalf of complainants, and after sending Fevidal a
demand letter dated 10 J uly 2006, respondent filed 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.
13

Complainants found it hard to wait for the outcome of the action.
Thus, they terminated the services of respondent on 8 J une 2007, withdrew
their complaint against Fevidal on 9 J une 2007, and finalized their amicable
settlement with him on 5 J uly 2007.
14

Respondent filed a Manifestation and Opposition
15
dated 20 J uly 2007
before the RTC, alleging that the termination of his services and withdrawal
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.

Resolution 3 A.C. No. 9091

of the complaint had been done with the intent of defrauding counsel. On the
same date, he filed a Motion for Recording of Attorneys Charging Lien in
the Records of the Above-Captioned Cases.
16
When the RTC granted the
withdrawal of the complaint,
17
he filed a Manifestation and Motion for
Reconsideration.
18

After an exchange of pleadings between respondent and Fevidal, with
the latter denying the formers allegation of collusion,
19
complainants sought
the suspension/disbarment of respondent through a Complaint
20
filed 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.
21
In
their complaint, they alleged that respondent had violated Canons 1.01,
22

1.03,
23
1.04,
24
12.02,
25
15.05,
26
18.04,
27
and 20.04
28
of the Code of
Professional Responsibility.
On 14 August 2008, the IBP Commission on Bar Discipline adopted
and approved the Report and Recommendation
29
of the investigating
commissioner. It suspended respondent from the practice of law for a period
of one year for entering into a champertous agreement.
30
On 26 J une 2011, it
denied his motion for reconsideration.
On 26 November 2012, this Court noted the Indorsement of the IBP
Commission on Bar Discipline, as well as respondents second motion for
reconsideration.
We find that respondent did not violate any of the canons cited by
complainants. In fact, we have reason to believe that complainants only filed
the instant complaint against him at the prodding of Fevidal.
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.
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
mans 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 clients 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 clients 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.

Resolution 4 A.C. No. 9091

Respondent cannot be faulted for advising complainants to file an
action against Fevidal to recover their properties, instead of agreeing to a
settlement of 10,000,000 a measly amount compared to that in the
original agreement, under which Fevidal undertook to pay complainants the
amount of 35,000,000. Lawyers have a sworn duty and responsibility to
protect the interest of any prospective client and pursue the ends of justice.
31

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 filing
of the adverse claim. Neither was he informed of the brewing amicable
settlement between complainants and Fevidal. We also find it very hard to
believe that while complainants received various amounts as loans from
respondent from August 2006 to J une 2007,
32
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 latters Sinumpaang
Salaysay dated 24 September 2007, in which they admitted that they could
not convince Fevidal to meet with respondent to agree to a settlement.
33

Finally, complainants apparently refer to the motion of respondent for
the recording of his attorneys 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.
We recently upheld the right of counsel to intervene in proceedings
for the recording of their charging lien. In Malvar v. KFPI,
34
we granted
counsels motion to intervene in the case after petitioner therein terminated
his services without justifiable cause. Furthermore, after finding that
petitioner and respondent had colluded in order to deprive counsel of his
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.

Resolution 5 A.C. No. 9091

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.
35
In any case, an attorney is entitled to be paid reasonable
compensation for his services.
36
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 find 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 clients rights in exchange for some bargain to have a part of the
thing in dispute.
37
Such contracts are contrary to public policy
38
and are thus
void or inexistent.
39
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
40
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 clients rights, it is imperative
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 and tanggapan ng BAEZ, BAEZ & 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] 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.

Resolutiori 6 A.C. No. 9091
that the advances be subject to reimbursement.
41
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.
42
Clearly, respondent lost sight of his responsibility as a lawyer in
balancing the client's interests with the ethical standards of his profession.
Considering the surrounding circumstances in this case, an admonition shall
suffice 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. Banez, 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 Bafiez, Jr.
SO ORDERED.
41
Supra note 3 8.
42
Rollo (Vo.I. IV), p. 33.
MARIA LOURDES P.A. SERENO
Chief Justice, Chairperson
Resolution
WE CONCUR:
7

TERESITA J. LEONARDO-DE CASTRO
Associate Justice
IENVENIDO L. REYES
Associate Justice
A.C. No. 9091