In Cueto v. Jimenez, Jr., the Supreme Court of the Philippines addressed the ethical responsibilities of lawyers in handling fee disputes with clients. The Court ruled that while lawyers have the right to receive just compensation, resorting to criminal charges to collect fees, especially when a significant portion has already been paid, constitutes a violation of the Code of Professional Responsibility. This decision underscores the importance of maintaining the dignity of the legal profession and prioritizing fairness and candor in dealings with clients, even when compensation is at issue. It emphasizes that legal action should be a last resort, reserved for instances of genuine injustice, imposition, or fraud.

The Notary’s Fee and a Dishonored Check: Justice or Overreach?

The case originated from a complaint filed by Engr. Alex B. Cueto against Atty. Jose Jimenez, Jr. Cueto engaged Jimenez as a notary public for a Construction Agreement involving a property owned by Jimenez’s son. Following the notarization, a dispute arose over the notarial fee. Jimenez demanded P50,000, which Cueto found surprisingly high. Cueto paid P30,000 in cash and issued a check for the remaining P20,000. When Cueto requested that Jimenez hold off on depositing the check due to insufficient funds—related to his son’s failure to compensate him—Jimenez deposited the check, leading to its dishonor. Subsequently, Jimenez filed a case against Cueto for violating BP 22, the Bouncing Checks Law.

This action by Jimenez prompted Cueto to file an administrative complaint against him, alleging violations of the Code of Professional Responsibility and Canons of Professional Ethics. Cueto argued that Jimenez improperly used the criminal case to coerce the payment of the remaining notarial fee. The Integrated Bar of the Philippines (IBP) investigated the matter and found Jimenez guilty of violating Canon 20, Rule 20.4 of the Code of Professional Responsibility. This rule emphasizes that lawyers should avoid controversies with clients regarding compensation and should only resort to judicial action to prevent imposition, injustice, or fraud. The IBP recommended that Jimenez be reprimanded.

The Supreme Court reviewed the IBP’s findings. While it acknowledged the common practice of basing notarial fees on a percentage of the contract price—in this case, 1% of a P5,000,000 agreement—it focused on the propriety of filing a criminal case to recover the unpaid balance. The Court highlighted the principles enshrined in Canon 20, Rule 20.4 of the Code of Professional Responsibility and Canon 14 of the Canons of Professional Ethics, which both advocate for avoiding fee-related conflicts and resorting to lawsuits only when necessary to prevent serious injustice.

Canon 20, Rule 20.4 of the Code of Professional Responsibility mandates that “[a] lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.”

The Court emphasized that in this instance, there was no evidence of imposition, injustice, or fraud that warranted the criminal action. Cueto had already paid a substantial portion of the fee, and the dispute seemed more related to the son’s failure to pay Cueto for his construction services. The Supreme Court reiterated the high standards of ethical conduct expected of lawyers. They stated that a lawyer’s duty includes upholding the integrity and dignity of the legal profession by faithfully serving society, the bar, the courts, and their clients, considering remuneration as a secondary concern.

The Court’s decision serves as a reminder that the legal profession is imbued with public service and that lawyers must conduct themselves with candor, fairness, and loyalty in all dealings. It reinforces that while lawyers are entitled to fair compensation, they must pursue it in a manner that does not compromise the integrity of the profession. The filing of a criminal case under these circumstances was viewed as an overreach and an inappropriate method of resolving a fee dispute. Ultimately, the Supreme Court severely reprimanded Atty. Jose Jimenez, Jr. for violating Canon 20, Rule 20.4 of the Code of Professional Responsibility.

FAQs

What was the key issue in this case?	The central issue was whether a lawyer acted unethically by filing a criminal case against a client to collect an unpaid balance of notarial fees.
What did the Supreme Court decide?	The Supreme Court held that filing a criminal case to collect the fee balance was improper and violated the Code of Professional Responsibility, leading to the lawyer being reprimanded.
What is Canon 20, Rule 20.4 of the Code of Professional Responsibility?	This canon requires lawyers to avoid controversies with clients over compensation and to resort to judicial action only to prevent imposition, injustice, or fraud.
Why did the Court find the lawyer’s actions unethical?	The Court found that there was no evidence of imposition, injustice, or fraud that justified the criminal action, especially since a significant portion of the fee had already been paid.
What does the case say about a lawyer’s duty?	The case emphasizes that lawyers must uphold the integrity of the legal profession and prioritize their duties to society, the bar, the courts, and their clients, viewing remuneration as a secondary concern.
Is it always wrong for a lawyer to sue a client for fees?	No, lawyers can pursue judicial action to recover fees, but only when necessary to prevent imposition, injustice, or fraud.
What should lawyers do when facing fee disputes?	Lawyers should attempt to resolve disputes amicably and avoid actions that undermine the dignity of the profession, resorting to lawsuits only as a last resort.
What was the basis of the original fee?	The respondent based it on 1% of the Construction Agreement contract price, which is acceptable but it must be agreed on with the other party.

This case reinforces the ethical standards expected of lawyers in the Philippines, particularly in managing fee disputes. It serves as a reminder of the importance of upholding the dignity of the legal profession and prioritizing fair and candid dealings with clients. By setting a clear boundary against using criminal charges as a means of fee collection, the Supreme Court protects both the integrity of the legal system and the interests of clients.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Alex B. Cueto vs. Atty. Jose B. Jimenez, Jr., A.C. No. 5798, January 20, 2005