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Bautista vs Gonzales [A.M. No. 1625. February 12, 1990]

16 Oct

[Per Curiam]

FACTS:

In a verified complaint filed by Angel L. Bautista, respondent Ramon A. Gonzales was charged with malpractice, deceit, gross misconduct and violation of lawyer’s oath. Required by this Court to answer the charges against him, respondent filed a motion for a bill of particulars asking this Court to order complainant to amend his complaint by making his charges more definite. In a resolution the Court granted respondent’s motion and required complainant to file an amended complaint. Complainant submitted an amended complaint for disbarment, alleging that respondent committed the following acts:

1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for a contingent fee of fifty percent (50%) of the value of the property in litigation.

x x x

4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971 for the development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered by TCT No. T-1929, claiming that he acquired fifty percent (50%) interest thereof as attorney’s fees from the Fortunados, while knowing fully well that the said property was already sold at a public auction on June 30, 1971, by the Provincial Sheriff of Lanao del Norte and registered with the Register of Deeds of Iligan City;

x x x

Pertinent to No. 4 above, the contract, in No. 1 above, reads:

We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all expenses, for the suit, including court fees.

ISSUE:

Whether or not respondent committed serious misconduct involving a champertous contract.

HELD:

YES. Respondent was suspended from practice of law for six (6) months.

RATIO:

The Court finds that the agreement between the respondent and the Fortunados contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly agree with a client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a lawyer may in good faith, advance the expenses of litigation, the same should be subject to reimbursement. The agreement between respondent and the Fortunados, however, does not provide for reimbursement to respondent of litigation expenses paid by him. An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client’s rights is champertous [citation omitted]. Such agreements are against public policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense in consideration of some bargain to have part of the thing in dispute [citation omitted]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanctions.

 
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Posted by on October 16, 2012 in Case Digests, Legal Ethics

 

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