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Termination of engagement by the client, C3S54 CPRA

Section 54, Canon III

SECTION 54. Termination of engagement by the client. – The lawyer-client engagement may be terminated by the client at any time upon loss of trust and confidence.
The termination of the engagement shall not relieve the client from full payment of all professional fees due to the lawyer. If the engagement has been reduced to writing, the lawyer shall be entitled to recover from the client the full compensation stipulated, unless found by the court, tribunal or other government agency to be unconscionable or unreasonable under Canon III, Section 41 of the CPRA.
For the payment of the compensation, the lawyer shall have a charging lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in the case where the lawyer’s services had been retained by the client. (2023 Code of Professional Responsibility and Accountability or CPRA)

1. Termination of engagement by the client

a. Client’ right to terminate engagement

Under this section, clients are allowed to terminate the lawyer-client engagement “at any time upon loss of trust and confidence.”

b. Client’s duty to pay for legal fees

While the client may terminate the engagement any time, this does “not relieve the client from full payment of all professional fees due to the lawyer.”

1) If in writing

If there is a written engagement, lawyers are “entitled to recover from the client the full compensation stipulated.”

a) Exception

The rule on lawyers being entitled to recover full compensation as stipulated in writing is subject to this exception:

• Unless found by the court, tribunal or other government agency to be unconscionable or unreasonable under Canon III, Section 41 of the CPRA.

See related:

Fair and reasonable fees, C3S41 CPRA

c. Charging lien

To ensure payment of the legal fees, lawyers have a “charging lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in the case where the lawyer’s services had been retained by the client.”

The above-mentioned attorney’s lien refers to a charging lien, as opposed to a retaining lien.

[A]ttorney’s lien [specifically a charging lien] attaches on all money judgments and on the subsequent execution thereof which the lawyer secured in advocating the cause of his client in a litigation, provided that (1) the lawyer caused the registration of his lien on the records of the court; and (2) the lawyer caused a written notice to such effect to be delivered to his client and to the adverse party. Logically, it would, be absurd to charge or enforce a lien without judgment or resolution of the case as there is absence of basis for the determination of the legal fees. (Dominguez v. Bank of Commerce, G.R. No. 225207, September 29, 2021, Per Hernando, J.)

As a security for his fees, Rule 138, Section 37 of the Rules of Court grants an attorney an equitable right to a charging lien over money judgments he has secured in litigation for his client. For the lien to be enforceable, the attorney must have caused: (1) a statement of his claim to be entered in the record of the case while the court has jurisdiction over the case and before the full satisfaction of the judgment; and (2) a written notice of his claim to be delivered to his client and to the adverse party. (Navarez v. Abrogar III, G.R. No. 191641, September 2, 2015, Per Brion)

Bacolod Murcia Milling Company, Inc. v. Henares, En Banc, G.R. No. L-13505, March 30, 1960, Per Reyes, J.B.L., J.:

• When Ricardo Nolan filed his notice of lawyer’s lien on July 7, 1953, such lien properly attached to the judgment for the payment of money and to all executions that might thereafter be issued in pursuance of such judgment, in accordance with Section 33, Rule 127, above-cited. Nolan filed notice of his lien long before the sale of the mortgaged properties on July 16, 1954, and even before the writ of execution was issued on November 13, 1953. The court, therefore, properly acquired jurisdiction to take cognizance of the claim for attorney’s fees, since an attorney’s lien takes legal effect from and after the time the attorney’s lien takes legal effect from and after the time the attorney concerned caused notice of said lien to be entered in the record, and served on his client and the adverse party… The operative fact that determines the birth of the lien, it is clear, is the time at which the lawyer caused a statement of his claim to be entered in the record, and not any other. That the amount of the attorney’s lien was, at the time, unliquidated, does not militate against this conclusion, as it has been held that it is not necessary to the existence of the lien that the amount due the attorney should be liquidated, although the exact amount of the claim should be determined before the lien can be enforced…

• When, on July 16, 1954, the sale at public auction was made and the judgment legally satisfied, Nolan could not have lost his right to enforce the lien which he had upon the judgment, since he had filed notice of the lien as far back as July 7, 1953. It was this notice which conferred on the court the jurisdiction to determine the lien. Nolan’s subsequent petition on September 8, 1954 was but an incident in the enforcement of the lien and should not be made the determinative factor on the question of jurisdiction. Nor did the sale of the property at public auction extinguish the lien; for, while in this jurisdiction the lien does not attach to the property in litigation, it is obvious that it should attach to the proceeds of the judgment for the payment of money, otherwise, the lien would be meaningless and of no substance. A judgment for money is only as valuable as the amount that could be realized therefrom; and to speak of a lien on the judgment without including therein its proceeds, at least in pecuniary terms, is to lose perspective in the differentation of substance and form.

• Moreover, the nature of a charging lien argues that it should attach to the proceeds of a judgment.

• It is well to note that the lien in the present case is not sought to be enforced as against the debtor but against the attorney’s client, who received the proceeds of the judgment. There is no reason why it should not be enforced against said client, since the lien should attach to the proceeds of the judgment and he received the same without paying his attorney who was responsible for its recovery. The client, upon receiving satisfaction without paying his lawyer, held the proceeds for the judgment in trust for his lawyer to the extent of the value of his recorded lien, because after the charging lien has attached, the attorney is, to the extent of said lien, to be regarded as and equitable assignee of the judgment or funds produced by his efforts.

• Hence, the attorney can enforce his lien in the case, for anyway, the trial court acquired jurisdiction over the matter of the lien when it attached upon the filing of notice of lawyer’s lien on July 7, 1953, and until the same is settled, the court should be deemed to have retained jurisdiction. The tendency of the cases is to have the attorney’s fees determined and enforced in the same action where the services were rendered, to avoid multiplicity of suits… In a case similar to the one at bar…, judgment was entered for plaintiff for a sum of money. In compliance with the judgment, defendant issued a check in favor of plaintiff and gave this check to the attorney. The lawyer presented a motion with the trial court asking that the defendant be ordered to issue two checks, one, for the plaintiff, and another, for his fees. The court determined the lawyer’s fees and ordered the defendant therein to issue two checks as prayed for by the attorney. On appeal, this Court remanded the case to the trial court for the determination of the lawyer’s fees and to give an opportunity for the plaintiff therein or his representative to appear and contest the amount claimed, as in the first instance, plaintiff was not represented. The remand to the trial court to determine the lawyer’s fees even after the judgment had been satisfied, could only mean that the court did not thereby lose jurisdiction to entertain the petition to enforce the lien.

• Moreover, to hold in the instant case that the lien was extinguished in the premises is to put a premium and an undue emphasis on tendencies which are better curbed than encouraged. It would practically require that an attorney, having secured a judgment for his client for the payment of money, should not only file his notice of lawyer’s lien and have the right thereto determined but also apply to the court for execution of the judgment in order to anticipate a possible duplicity on the part of said client, thereby subordinating his clients’ interest to his own. This is conduct which, by ethical considerations, should be viewed askance; much less, therefore, should it, by legal compulsion, be given encouragement.

Vda de Caiña v. Victoriano, En Banc, G.R. No. L-12905, February 26, 1959, Pre Bautista Angelo, J.:

• In the instant case, the lien which respondent attorney tried to enforce for the satisfaction of his professional fee is charging in the sense that his purpose is to make of record his claim in order that it may be considered in the execution of the judgment that may be rendered in the case, and this he has already done. Thus, he had already caused a statement of his claim to be entered in the record of the ejectment case and that is all what the rule requires of him to do. Certainly, he cannot go any further, such as what he led the trial court to do, that is, to have his lien annotated on the back of the title of petitioners which is beyond the province of the court. The lien of respondent is not of a nature which attaches to the property in litigation but is at most a personal claim enforceable by a writ of execution.

1) The 2 kinds of attorney’s lien

An attorney’s lien is of two kinds: one is called retaining alien and the other charging lien. The retaining lien is the right of the attorney to retain the funds, documents, and papers of his client which have lawfully come into his possession until his lawful fees and disbursements have been paid and to apply such funds to the satisfaction thereof. The charging lien is the right which the attorney has upon all judgments for the payment of money, and executions issued in pursuance of said judgments, which he has secured in litigation of his client… Under this rule, this lien, whether retaining or charging, takes legal effect only from and after, but not before, notice of said lien has been entered in the record and served on the adverse party… (Vda de Caiña v. Victoriano, En Banc, G.R. No. L-12905, February 26, 1959, Pre Bautista Angelo, J.)

See related:

Enforcement of attorney’s lien, C3S47 CPRA

References

Canon III, 2023 Code of Professional Responsibility

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