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.
xxx

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 over the funds and may apply so much thereof as may be
1âwphi1

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."12The 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

WE CONCUR:

ROBERTO A. ABAD
Associate Justice

JOSE PORTUGAL PEREZ* JOSE CATRAL MENDOZA

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice