AC 6289; (December, 2004) (Digest)
G.R. No. 6289, December 16, 2004
Julian Malonso, complainant, vs. Atty. Pete Principe, respondent.
FACTS
Complainant Julian Malonso filed a disbarment complaint against Atty. Pete Principe. Malonso alleged that Atty. Principe, without his authority, entered his appearance as counsel in the expropriation case filed by the National Power Corporation (NPC) against Malonso and other landowners. After this unauthorized representation, Atty. Principe claimed forty percent (40%) of the selling price of Malonso’s land as attorney’s fees and even filed a motion to intervene, asserting a co-ownership interest in the property.
Atty. Principe defended his actions by presenting a Contract of Legal Services dated April 1, 1997, executed between his law firm and SANDAMA, an organization of affected landowners, represented by its President, Danilo Elfa. The contract stipulated a contingent fee of 40% of the selling price negotiated with NPC. He further presented a Special Power of Attorney (SPA) executed by Malonso in favor of Elfa on November 27, 1997, authorizing Elfa to negotiate the sale and represent him. Atty. Principe argued that as a SANDAMA member, Malonso was bound by the organization’s contract.
ISSUE
Whether or not Atty. Principe is administratively liable for representing Malonso without authority and for claiming excessive attorney’s fees.
RULING
Yes, Atty. Principe is administratively liable. The Supreme Court found that the SPA executed by Malonso in favor of Elfa was dated November 27, 1997, which was over seven months after the Contract of Legal Services between SANDAMA and Atty. Principe’s firm was signed on April 1, 1997. Consequently, at the time the legal services contract was executed, Elfa had no authority from Malonso to engage Atty. Principe’s services. An agency cannot be created by implication and must be founded on the principal’s consent. Therefore, Atty. Principe’s representation of Malonso based on the pre-dated SANDAMA contract was without lawful authority.
Furthermore, the Court found the 40% contingent fee to be excessive and unconscionable. The legal services rendered were not exceptionally difficult, and the claim was made after a settlement had already been approved by the NPC board, with Malonso being represented by his own counsel, Atty. Benjamin Mendoza. A lawyer is entitled to reasonable compensation, but the 40% fee under these circumstances constituted unjust enrichment. Atty. Principe’s act of filing a motion to intervene to claim co-ownership was a misuse of court processes to pressure Malonso into paying the fee. These acts violated the lawyer’s duties of candor and fairness. The Court suspended Atty. Principe from the practice of law for one year.