LEGAL PROFESSION

TOPIC: AUHTORITY TO APPEAR, AUTHORITY TO BIND CLIENTS, COMPENSATION, ATTYS LIEN

SALONGA VS. COURT OF APPEALS Any act performed by a lawyer within the scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of petitioners' counsel may result in the rendition of an unfavorable judgment against them. Ponente: Justice PANGANIBAN, 1997 FACTS: Private Respondent Izon, as President of Paul Geneve Corporation, agreed into a joint venture enterprise with Petitioner Salonga, as owner of Solid Intertain; and that is, both companies will form a new corporation. This joint venture will then provide leasehold holding rights of the property in Makati from the former to the latter. Documents were prepared for the joint venture. Private respondent signed the document, and it was then delivered to petitioner for his signature. However, the said documents were not signed by the petitioner. With the memorandum of agreement still unsigned, not notarized, and in the possession of petitioner, the latter transferred all his equipments to the said property in Makati. Club Ibiza was thus opened and made operational on the leased premises in question under Solid Intertain Corporation. Private Respondent was totally left out. Private Respondent filed a complaint to Respondent RTC for specific performance with temporary restraining order and preliminary injunction with prayer for damages against herein petitioners to enforce a memorandum of agreement that was supposedly perfected between the parties. A TRO was then served to petitioner which they referred to their counsel, Atty. Garlitos. Only the private respondents appeared on the hearing for Injunction. Private respondent sought to cite petitioner for contempt on grounds that the latter disobeyed the temporary restraining order. Petitioners again failed to appear on the second hearing for the motion for writ of preliminary injunction. The court then acted, on the private respondents motion and it was granted a few days after. Despite two motions for extension, petitioner failed to answer the court.

Due to failure of petitioner to file an answer, private respondent submitted a third ex parte motion to declare petitioner, as defendant in Default which the court favorably acted. A month after, RTC rendered a decision, holding the petitioner in default, in favor of the private respondent. A few more months after, Petitioner Salonga was adjudged guilty of civil contempt. In defense, petitioner raised before the Respondent Court of Appeals the following arguments: (a) Fraud on the part of the petitioners counsel Petitioner alleged that his counsel Atty. Garlitos acted fraudulently in handling the Civil Case based on the following observations of the petitioner on his counsel: i. Very late arrival on the first hearing on preliminary injunction ii. Failure to appear on the second hearing on preliminary injunction iii. Failure to appear on the motion for dissolution of injunction iv. Failure to file an answer within the period required by the Rules of Court v. Failure to appear on petitioners motion of reconsideration vi. Failure to appear on a hearing in which private respondents counsel successfully obtained a denial of the aforementioned motion. Petitioner contend that there is extrinsic fraud when a party was prevented from having presented all of his case to the court as when the lawyer connives at his defeat or corruptly sells out his client's interests (b) He was deprived of his basic rights to due process Petitioners motion was denied. ISSUES: W/N The judgment of the lower court should be annulled on grounds of extrinsic fraud and denial of due process. DECISION: The court denied the motion of the petitioner, and in affirmed the decision of the lower courts. On Annulment of Judgment There are only 2 grounds in annulment of judgment: (a) Void for want of jurisdiction or lack of due process of law (b) If it has been obtain by fraud No Extrinsic Fraud

Contrary to the petitioners contention, the Court notes that the previously enumerated negligent acts attributed to petitioner's former counsel Garlitos were in no way shown or alleged to have been caused by private respondents. Atty. Garlitos neither connived nor sold out to the latter. Negligence of Counsel Binds Client The court held that Any act performed by a lawyer within the scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of petitioners' counsel may result in the rendition of an unfavorable judgment against them. Exceptions to the foregoing have been recognized by the Court in cases where reckless or gross negligence of counsel deprives the client of due process of law, or when its application "results in the outright deprivation of one's property through a technicality." None of these exceptions has been sufficiently shown in the present case. Counsels Negligence Simple or Gross? The court held that counsel Garlitos was merely guilty of simple negligence. Although his failure to file a timely answer had led to a judgment by default against his clients, his efforts at defending their cause were palpably real, albeit bereft of zeal. No Denial of Due Process The court held that due process was never denied for petitioners Salonga and Solid Intertain Corporation because the trial court had given them a reasonable opportunity to be heard and present their side in all the proceedings before it. The records reveal that the judgment by default was rendered by the trial court in faithful compliance with Rule 18 of the Rules of Court and the constitutional guaranty of due process. Petitioner Guilty of Indirect Contempt? The Court upheld the decision of the Court of Appeals, in which, it correctly ruled that "(in) indirect contempt proceedings such as in the case at bar, a mere motion to that effect will suffice for the (trial court) to acquire jurisdiction." For after all, Section 3 of the Rules of Court requires merely that "a charge in writing has been filed, and an opportunity given to the accused to be heard by himself or counsel" before one guilty of indirect contempt may be punished therefore.