Halili v CIR (136 SCRA 112)

Facts:

The cases involve disputes regarding claims for overtime of more than five hundred bus drivers and conductors of Halili Transit. Litigation initially commenced with the filing of a complaint for overtime with the CIR. The disputes were eventually settled when the contending parties reached an Agreement where the Administratrix would transfer to the employees the title to a tract of land in Caloocan, Rizal. The parcel of land was eventually registered in the name of the Union.

The Union, through Atty. Benjamin C. Pineda, filed an urgent motion with the Ministry of Labor and Employment (MOLE) requesting for authority to sell and dispose of the property. Union President Amado Lopez, in a letter, informed J.C. Espinas and Associates that the general membership of the said Union had authorized a 20% contingent fee for the law firm based on whatever amount would be awarded the Union.

Atty. Jose C. Espinas, (the original counsel) established the award of 897 workers' claim. When Atty. Pineda appeared for the Union in these cases, still an associate of the law firm, his appearance carried the firm name B.C. Pineda and Associates," giving the impression that he was the principal lawyer in these cases.

Atty. Pineda joined the law firm of Atty. Espinas in 1965 when these cases were pending resolution. He always held office in the firm's place at Puyat Building, except in 1966 to 1967 when he transferred to the Lakas ng Manggagawa Offices. During this one-year stint at the latter office, Atty. Pineda continued handling the case with the arrangement that he would report the developments to the Espinas firm. When he rejoined the law firm in 1968, he continued working on these cases and using the Puyat Building office as his address in the pleadings.

When Atty. Pineda rejoined the Espinas firm in 1968, he did not reveal to his partners (he was made the most senior partner) that he had a retainer's contract. He stayed with the law firm until 1974 and still did not divulge the 1967 retainer's contract. Only the officers of the Union knew of the contract.

The alleged retainer's contract between Atty. Pineda and the Union appears anomalous and even illegal as well as unethical considering that-

1. The contract was executed only between Atty. Pineda and the officers of the Union chosen by about 125 members only. It was not a contract with the general membership.

2. The contingent fee of 30% for those who were still working with Halili Transit and the 45% fee for those who were no longer working worked to the prejudice of the latter group who should and were entitled to more benefits. Thus, too, when the alleged retainer's contract was executed in 1967, the Halili Transit had already stopped operations in Metro Manila. By then, Atty. Pineda knew that all the workers would be out of work which would mean that the 45% contingent fee would apply to all.

3. The contract which retroactively took effect on January 1, 1966, was executed when Atty. Espinas was still handling the appeal of Halili Transit in the main case before the Supreme Court.

4. When Atty. Pineda filed his motion for approval of his attorney's lien with Arbiter Valenzuela on February 8, 1983, he did not attach the retainer's contract.

5. The retainer's contract was not even notarized.

A prospective buyer, the Manila Memorial Park Cemetery, Inc. objected in view of PD 1529 which requires no less than an order from a court of competent jurisdiction as authority to sell property in trust.

Atty. Pineda, without authority from the Supreme Court but relying on the earlier authority given him by the Ministry of Labor, filed another urgent motion, praying that the Union be authorized to sell the lot. The sale was finally consummated, resulting in the execution of an escrow agreement.

When Atty. Jose C. Espinas (herein movant and alleged original counsel for the Union) learned of the sale and apportionment of the proceeds from past Union president Amado Lopez, he requested Labor Arbiter Raymundo Valenzuela to allow him to look into the records of the case. The latter, however, told him that the records of the case were missing. Thereupon, Atty. Espinas requested Director Pascual Reyes of the NLRC to locate the records.

Issue:

a.Whether or not Atty. Pineda and Arbiter Valenzuela should be held in contempt.

b. Whether or not Atty. Pineda should be disbarred.

Held:

a. YES. Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to bring the authority and administration of the law into disrespect or to interfere with or prejudice parties litigant or their witnesses during litigation.

The power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the enforcement of judgments, orders, and mandates of the court, and consequently, to the due administration of justice.

In the Slade Perkins case, "the exercise of the power to punish contempt has a twofold aspect, namely (1) the proper punishment of the guilty party for his disrespect to the court or its order; and (2) to compel his performance of some act or duty required of him by the court which he refuses to perform. Due to this twofold aspect of the exercise of the power to punish them, contempts are classified as civil or criminal.

A civil contempt is the failure to do something ordered to be done by a court or a judge for the benefit of the opposing party therein.

A criminal contempt, is conduct directed against the authority and dignity of a court or of a judge, as in unlawfully assailing or discrediting the authority or dignity of the court or judge, or in doing a duly forbidden act.

b. YES. Under Section 27 of Rule 138 of the Revised Rules of Court which provides:

Sec. 27. Attorneys removed or suspended by Supreme Court on what grounds.—A member of the bar may be removed or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a willful disobedience of any lawful order of a superior court, or for corrupt or willfully appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice.

The Court may suspend or disbar a lawyer for any conduct on his part showing his unfitness for the confidence and trust which characterize the attorney and client relations, and the practice of law before the courts, or showing such a lack of personal honesty or of good moral character as to render him unworthy of public confidence.

In the case, the expeditious manner by which Arbiter Valenzuela granted Atty. Pineda's motion for such authority to sell the property make the entire transaction dubious and irregular.

Significantly Atty. Pineda's act of filing a motion praying for authority to sell was by itself an admission on his part that he did not possess the authority to sell the property. He could not and did not even wait for valid authority but instead previously obtained the same from the labor arbiter whom he knew was not empowered to so authorize.

The 45% attorney's lien on the award of those union members who were no longer working and the 30% lien on the benefits of those who were still working as provided for in the alleged retainer's contract are also very exorbitant and unconscionable.

*Atty. Pineda is found guilty of indirect contempt of court for which he is sentenced to imprisonment and directed to show cause why he should not be disbarred.