Case Digest (A.C. No. 6289)
Case Digest: Julian Malonso vs. Atty. Pete Principe
Facts:
In the case of *Julian Malonso vs. Atty. Pete Principe*, A.C. No. 6289, decided on December 16, 2004, the complainant, Julian Malonso, filed a disbarment complaint against Atty. Pete Principe before the Integrated Bar of the Philippines (IBP) on June 6, 2001. Malonso alleged that Atty. Principe entered his appearance as counsel in expropriation proceedings initiated by the National Power Corporation (NAPOCOR) without his authorization. Malonso contended that Atty. Principe claimed an attorney's fee of 40% based on the selling price of his land and filed a motion to intervene, asserting co-ownership of Malonso's property.In response, Atty. Principe claimed his law firm was hired by Samahan ng mga Dadaanan at Maapektuhan ng NAPOCOR, Inc. (SANDAMA), of which Malonso was a member, to negotiate just compensation for landowners affected by the expropriation. A contract dated April 1, 1997, formalized the engagement, outlining the s
Case Digest (A.C. No. 6289)
Facts:
- Overview of the Case
- Complainant Julian Malonso filed a disbarment complaint against Atty. Pete Principe.
- The complaint alleged that Atty. Principe improperly entered his appearance as counsel for Malonso in expropriation proceedings initiated by the National Power Corporation (NAPOCOR).
- It was further alleged that Principe, after representing Malonso without proper authority, claimed a 40% contingent fee from the selling price of Malonso’s land and later moved to assert co-ownership over the property.
- Engagement and Contract of Legal Services
- A Contract of Legal Services, executed on April 1, 1997, was entered into between SANDAMA (Samahan ng mga Dadaanan at Maapektuhan ng NAPOCOR, Inc.) and Principe’s law firm (Principe Villano Villacorta and Clemente Law Offices).
- The contract provided that the firm’s legal services—including negotiation, legal documentation, and court attendance—would be compensated on a contingent basis by a fee not to exceed 40% of the selling price.
- No acceptance, appearance, or liaison fees were provided; the fee was solely contingent upon the outcomes of negotiations with NAPOCOR.
- Dispute Over Authorization and Special Power of Attorney
- Respondent Atty. Principe defended his representation by asserting that his services were engaged by SANDAMA, through its President Danilo Elfa, and that his legal actions were authorized under the contract.
- A special power of attorney executed by Malonso on November 27, 1997, in favor of Danilo Elfa was cited as authorization for Elfa to negotiate on Malonso’s behalf.
- Complainant contested the validity and timing of the power of attorney, claiming he had previously retained Atty. Benjamin Mendoza for representation, thereby disputing Elfa’s authority and, by extension, Principe’s subsequent actions.
- Procedural Developments in the Expropriation Proceedings
- The expropriation proceedings against several lot owners, including Malonso, were initiated by NPC in early 1997.
- A sequence of procedural filings by Atty. Principe was noted:
- Filing an Ex-Parte Motion to separate legal fees on January 18, 2000.
- Filing a Notice of Entry of Appearance (January 28, 2000) and subsequent motions claiming his role as legal counsel for Malonso.
- Filing a Notice of Attorney’s Lien and a Notice of Adverse Claim to assert a 40% interest in the properties being expropriated.
- Filing a Motion for Leave to Intervene in the expropriation proceedings alleging co-ownership of the property, which further complicated the procedural posture of the case.
- A collective response from affected lot owners, including a letter dated February 12, 2000, indicated that they had not authorized Elfa to engage Principe’s services.
- Findings and IBP Resolution
- The Investigating Commissioner found that Atty. Principe misrepresented his authority by presenting himself as the legal counsel of not only SANDAMA but also of individual lot owners such as Malonso.
- His actions were deemed to violate several rules of professional conduct—specifically Canon 3 (Rule 3.01), Canon 10 (Rule 10.01), and Rule 12.04—by engaging in misconduct and causing undue delays in the expropriation negotiations.
- The IBP Board of Governors, in Resolution No. XVI-2003-241 dated October 25, 2003, recommended disciplinary action by suspending Atty. Principe from the practice of law for one (1) year.
- Respondent later contested the validity of the resolution, alleging that the IBP’s procedure did not comply with the requirements set forth in Rule 139-B of the Rules of Court.
- Allegations of Procedural Irregularities
- Atty. Principe argued that the IBP continued the investigation beyond the three-month period allowed under Rule 139-B without securing an extension from the Supreme Court.
- He further contended that the IBP Board’s resolution was procured through a mere consensus rather than a formal voting process with the requisite quorum, thus violating procedural rules.
- The underlying claim was that the disciplinary proceedings were motivated by animus and personal ambition, particularly in light of his purported intent to run for IBP National President.
Issues:
- Authorization and Representation
- Whether Atty. Principe was properly authorized to represent Julian Malonso and other lot owners in the expropriation proceedings, given the contested special power of attorney and the existence of a prior legal representation by Atty. Benjamin Mendoza.
- Whether the contract between SANDAMA and Principe’s law firm extended the authority to represent individual lot owners.
- Validity of the Attorney’s Fee Claim
- Whether the claim for a 40% contingent fee from the selling price of the property is valid and enforceable under the terms of the contract and in light of professional conduct rules.
- Whether the mechanisms used by Principe (such as filing motions for separate legal fees and adverse claims) were proper means to secure his fee.
- Procedural Due Process in IBP Disciplinary Proceedings
- Whether the IBP Board of Governors complied with the prescribed procedures under Rule 139-B, specifically the three-month investigation period and the necessity of a formal voting process with a quorum.
- Whether the failure to secure a proper vote and reliance on consensus renders Resolution No. XVI-2003-241 void.
- Remedial Measures and the Lawyer’s Right to Compensation
- Whether Atty. Principe’s actions, while potentially improper in representation, were motivated by his right to secure attorney’s fees for services rendered.
- Whether an independent action for fee recovery would have been more appropriate than the interventions and motions filed in the expropriation proceedings.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)