G.R. No. A.C. No. 9119 March 12, 2018
Eugenio E. Cortez, Complainant vs. Atty. Hernando P. Cortes, Respondent

FACTS

Complainant Eugenio E. Cortez engaged the services of his relative, Atty. Hernando P. Cortes, to prosecute an illegal dismissal case. Complainant alleged a handshake agreement for a 12% contingency fee. The case was decided in his favor, with the Court of Appeals affirming an award of ₱1,100,000.00, payable via three checks. When the first check matured, Atty. Cortes assisted in opening a joint bank account to deposit it. Later, when complainant attempted to withdraw the funds, Atty. Cortes intervened at the bank, demanding 50% of the total award as his fee, leading to a confrontation.
Atty. Cortes denied the 12% agreement, claiming he accepted the case only on a fifty-fifty sharing basis due to the geographical inconvenience. He asserted that the check distribution was pre-agreed, with the first check to be split, the second to go entirely to complainant, and the third to himself. He justified his bank intervention as a response to complainant’s alleged “base ingratitude” and to protect his asserted lien over the award.

ISSUE

Whether Atty. Cortes is guilty of professional misconduct warranting disciplinary action.

RULING

Yes, Atty. Cortes is guilty of misconduct. The Supreme Court affirmed the IBP’s finding but modified the penalty. While contingent fee arrangements are valid, they require an express contract. Here, no written agreement existed. The Court emphasized that in labor cases, Article 111 of the Labor Code limits attorney’s fees to 10% of the amount recovered, rendering any claim to 50% patently excessive and unconscionable. Atty. Cortes’s actions—facilitating a joint account and aggressively demanding half the award at the bank—demonstrated a failure to maintain the trust and confidence inherent in the lawyer-client relationship, violating Canon 20 of the Code of Professional Responsibility.
The Court, however, considered mitigating factors, including the absence of a written contract from which the complainant also benefited and the fact that Atty. Cortes ultimately secured a favorable judgment. Consequently, the six-month suspension recommended by the IBP was reduced to three months. Atty. Cortes was also ordered to return any amount received in excess of the allowable attorney’s fees, which the Court deemed to be 12% based on the complainant’s own allegation, rather than the Labor Code’s 10%, as this was more favorable to the respondent.