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Republic of the Philippines SUPREME COURT Manila second division G.R. No. 90983 September 27, 1991 RA"MUN#O A. ARMO$!T, petitioner vs. COURT O APPEALS, %U#GE GENARO C. G!NES, Pre&'(')* %+(*e o, -r.)/0 11$!, Re*'o).2 Tr'.2 Co+rt, 'r&t %+('/'.2 Re*'o), S.) er).)(o, L. U)'o), .)( -ENGSON COMMERC!AL -U!L#!NG, !NC., Respondents. LAW !RM O

SARM!ENTO, J.: Before the Court is Atty. Raymundo Armovit's claim for attorney's fees against the private respondent.virtualawlibrary virtual law library t appears that Atty. Armovit was engaged as counsel for the private respondent in a complaint to have an e!tra"udicial foreclosure of certain properties by the #overnment $ervice nsurance $ystem declared null and void% that the parties allegedly agreed that the private respondent shall pay P1&'(((.(( as initial compensation and twenty percent in contingent fees% that after trial' the defunct Court of )irst nstance rendered "udgment annulling foreclosure and ordering the #overnment $ervice nsurance $ystem to restructure the private respondent's loan% that thereafter' the $ystem appealed% the on appeal' the Court of Appeals affirmed the decision of lower court% and that the Appellate Court's "udgment has since attained finality.virtualawlibrary virtual law library t also appears that when Atty. Armovit sought e!ecution with the court a quo' he was informed by Romualdo Bengson president of the respondent corporation' that the firm has retained the services of Atty. Pacifico *adao. +e was also informed that the company would pay him the agreed compensation and that Atty. *adao's fees were covered by a separate agreement. ,he private respondent' however' later ignored his billings and over the phone' directed him allegedly not to ta-e part in the e!ecution proceedings. )orthwith' he sought the entry of an attorney's lien in the records of the case. ,he lower court allegedly refused to ma-e the entry and on the contrary issued an order ordering the Philippine .ational Ban- to /release to the custody of Mr. Romualdo ). Beng0on and1or Atty Pacifico *adao/ 1 the sum of P2'34('(((.(( 5ordered by the Court of Appeals as rentals payable by the #overnment $ervice nsurance $ystem6.virtualawlibrary virtual law library Atty. Armovit then moved' apparently for the hearing of hi motion to recogni0e attorney's lien' and thereafter' the trial court. issued an order in the tenor as follows7 8hen this case was called for hearing on the petition to record attorney's charging lien' Attys. Armovit and Aglipay appeared for the petitioners.virtualawlibrary virtual law library Atty. Armovit informed the Court that they are withdrawing the petition considering that they are in the process of amicably settling their differences with the plaintiff' which manifestation was confirmed by Atty. *adao as well as the plaintiffs' Romualdo Bengson and Brenda Bengson' who are present today.virtualawlibrary virtual law library n view of this development' the petition to record attorney charging lien' the same being in order and not contrary to law' moral and public policy' as prayed for by Attys.

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Armovit and Aglipay' it hereby withdrawn. ,he parties' therefore are hereby directed to co ply faithfully with their respective obligations.virtualawlibrary virtual law library $9 9R:;R;:.
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+owever' upon the turnover of the money to the private respondent' Mrs. Brenda Bengson 5wife of Romualdo Beng0on delivered to Atty. Armovit the sum of P<(('(((.(( only. Armovit protested and demanded the amount of P&&2'(((.( twenty percent of P2'34('(((.((6' for which Mrs. Beng0on made assurances that he will be paid the balance.virtualawlibrary virtual law library 9n .ovember =' 1>??' however' Atty. Armovit received a order emanating from the trial court in the tenor as follows7 :uring the hearing on the petition to record attorney's charge lien on 9ctober 11' 1>??' Attys. Armovit and Aglipay withdrew their petition to record attorney's charging lien' which was duly approve petition to recordby the Court' after which the Court directed the parties to comp faithfully with their respective obligations.virtualawlibrary virtual law library n compliance with the 9rder of this Court' the plaintiff submitted a pleading denominated as compliance alleging that petition 5Atty. Armovit6 has already received from the plaintiff the sum P<(('(((.((' Philippine Currency' as and by way of attorney's fees 8ith the receipt by the petitioner from the plaintiff of this amount' the latter has faithfully complied with its obligation.virtualawlibrary virtual law library 8+;R;)9R;' the 9rder of this Court dated 9ctober 11' 1>?? approving the withdrawal of the petition to record attorney's charging lien' on motion of the petitioner' is now final.virtualawlibrary virtual law library $9 9R:;R;:.
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Reconsideration having been denied' Atty. Armovit went the Court of Appeals on a petition for certiorari and prohibition.virtualawlibrary virtual law library 9n August 2&' 1>?>' the Court of Appeals 3 rendered "udgment dismissing the petition. Reconsideration having been li-ewise denied by the Appellate Court' Atty. Armovit instituted the instant appeal.virtualawlibrary virtual law library $hortly thereafter' we re@uired the private respondent comment.virtualawlibrary virtual law library ,he private respondent did not materially traverse Atty. Armorvit's chronicle of events but added7 that the private respondent hired the petitioner after the #overnment $ervice nsurance $ystem had answered and that it was Atty. Ben"am Bernardino who prepared the complaint% that for his appearances' Atty. Armovit was paid a total of P1(?'(((.((' not to mention /beach resort accommodations/% 4 that Atty. Armovit did not inform the private respondent that the court had rendered "udgment which they would have appealed% that they lost an appeal on account of Atty. Armovit's indiscretion% that the forthwith engaged the services of another lawyer' Atty. *adao% and that it was the latter who prepared the brief in the Court Appeals 5on #$ $'s appeal6.virtualawlibrary virtual law library ,he private respondent also alleged that it opposed Atty. Armovit's effort to record his attorney's lien on grounds of allege nullity of the retainer agreement' Atty. Armovit's negligence and because of e!cessive fees demanded.virtualawlibrary virtual law library

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,he private respondent also insisted that the retainer agreement was signed by only one of seven directors' and it could no bind the corporation. Atty. Armovit' in any event' had also been allegedly more than sufficiently compensated.virtualawlibrary virtual law library ,he private respondent alleged that Atty. Armovit had bee paid P<(('(((.(( A an amount approved by the court' and an amount he accepted and for which he is allegedly estoppel from claiming a higher amount. ,he order of the court has the effect of res judicata' the private respondent claimed' as well as a compromise agreement which is immediately e!ecutory.virtualawlibrary virtual law library ,he disposition of the Court of Appeals was that since the receipt evidencing payment to Atty. Armovit of the sum P<(('(((.(( /was without any @ualification as 'advance' 'partial' or 'incomplete''/ 5 the intention of the parties was that was full payment. ,he Appellate Court also noted Atty. Armorvit's withdrawal of his motion to record attorney's lien and figured that Atty. Armovit was satisfied with the payment P<(('((('((.virtualawlibrary virtual law library ,he only issue is whether or not Atty. Armovit is entitled to the sum of P2&2'(((.(( more' in addition to the sum P<(('(((.(( already paid him by the private respondent.,here is no @uestion that the parties had agreed on a compensation as follows7 a6 P1&'(((.(( by way of acceptance and study fee' payable within five 5&6 days from date% virtual law library b6 2(B contingent fee computed on the value to be recovered b favorable "udgment in the cases% and virtual law library c6 the e!ecution and signing of a final retainer agreement complete with all necessary details. 7 virtual law library 58hile the parties' agreement spea-s of /a final retain agreement/ 8 to be e!ecuted later' it does not appear that the parties did enter into a /final/ agreement thereafter.6 virtual law library ,he private respondent's version however is that while it may be true that the agreed compensation was twenty percent of all recoveries' the parties later agreed on a compromise sum approved allegedly by the trial court' per its 9rder of 9ctober 11' 1>??.virtualawlibrary virtual law library ,he Court is inclined to believe that Atty. Armovit never agreed on the compromise sum of P<(('(((.((. t is true that he did agree to withdraw his motion to annotate attorney's lien' but because the parties were /in the process of amicably settling their differences/ 9 and not because Atty. Armovit had agreed to accept a lower amount as full payment. ,here is nothing' on top of that' Atty. Armovit's manifestation that would suggest that he was accepting the sum of P<(('((.(( as agreed final payment' other than the fact that an agreement was supposedly certain. 8e @uote7 A,,*. ARM9C ,7 virtual law library *our +onor' we would li-e to manifest in Court that we served notice to the counsel of the plaintiff' Bengson Commercial Building' a copy of the petition to record attorney's charging lien' and together with the president of the corporation' Mr. Romualdo Bengson' and his wife' Mrs. Brenda Bengson' we have discussed the problem and we all agreed upon is an earnest one at this time' this representation is withdrawing his petition to record charging lien.virtualawlibrary virtual law library A,,*. *A:A97 virtual law library .o ob"ection' *our +onor' because we have to agree with Atty. Armovit. am in full accord with this. 10

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,here is nothing there that would indicate Atty. Armovit's willingness to accept' in fact' a lower figure in consideration of his withdrawal of his re@uest to enter attorney's lien. 8hat the Court ta-es his statement to mean is that he was withdrawing his re@uest on the certainty that the private respondent would pay him the money' presumably' under more becoming circumstances.virtualawlibrary virtual law library ,he Court does not therefore see how the private respondent can hold Atty. Armovit to have been in estoppel.virtualawlibrary virtual law library ,he fact that Atty. Armovit did not' after all' accept the sum of P<(('(((.(( as final compensation is indeed indicated by the behavior of the private respondent' through Mrs. Romualdo Bengson' when she assured Atty. Armovit that the balance was forthcoming. 11 According to Mrs. Bengson' she wished the rest of the Bengsons to witness the final payment and when the occasion was present' wished for a postponement on account of /All $aints :ay./ 12 virtual law library ,he parties never therefore amended their original agreement' and what appears to the Court is a clear effort on the part of a client' with the apparent approval of the trial court' to renege on a valid agreement with its lawyer.virtualawlibrary virtual law library ,he Court believes that the trial court' in accepting the private respondent's /compliance/ as a final payment of Atty. Armovit's fees' was guilty of a grave abuse of discretion. ,he private respondent had nothing with which to comply' and the parties' as manifested by Atty. Armovit' were /in the process DmerelyE of amicably settling their differences./ 13 virtual law library t is apparent furthermore that the trial "udge himself was out to deny Atty. Armovit the agreed compensation. n his order of 9ctober =' 1>??' he commanded7 ,he P.B is hereby ordered and directed to release to the custody of Mr. Romualdo ). Bengson and 1or Atty. Pacifico *adao' counsel for the plaintiff' the sum of ,wo Million $even +undred $i!ty ,housand Pesos 5P2'34('(((.((6' Philippine Currency for the satisfaction of the rentals of the Bengson Building against the #$ $. 13 virtual law library in spite of the fact that Atty. Armovit had remained the private respondent's counsel of record. t is fundamental that unless a lawyer has been validly discharged' his authority to act for his client continues and should be recogni0ed by the court. 14 virtual law library ,he fact that the receipt evidencing payment by the private respondent of the amount of P<(('(((.(( /was without any @ualification as 'advance' or 'partial' or 'incomplete''/ 15 as the Court of Appeals noted and the Court of Appeals too- to mean /full payment/' will not wea-en Atty. Armovit's demand for the balance. ,here is nothing in the receipt that will suggest that will suggest that it was full payment either' and the fact that Atty. Armovit accepted it does not mean that he was satisfied that it was final payment. ,he fact of the matter is that the private respondent had assured him that the balance was forthcoming.virtualawlibrary virtual law library ,he private respondent can not "ustifiably downplay Atty. Armovit as negligent 5for failing to appeal6 or his demand for fees e!cessive 5that he had been paid enough6. Atty. Armovit' after all' succeeded in obtaining a favorable decision for his client' an although his prayer for various damages were denied' he secceeded in obtaining a substantial award 5P1'>(('((.(( in unpaid rentals6 for his client. 9n appeal' the Court of Appeals sustained his theory. t should be noted that the private respondent had in fact stood to lose substantial properties on foreclosure A Atty. Armovit not only restored to the private respondent its foreclosured properties' he succeeded in having the private respondent's loans restructed and the #overnment $ervice nsurance $ystem pay rentals. .o client can as- a better result from a lawyer.virtualawlibrary virtual law library 9bviously' the private respondent's effort to downgrade Atty. Armovit's performance is a wild' if not cheap' shot of a client out to evade its obligations to its lawyer. ,he fact that Atty. Armovit may have

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been paid substantially 5in initial fees6 while the case was dragging is no "ustification for denying him the full amount under their agreement. t has been held that initial fees and fees paid in the progress of litigation are independent of the contingent fees. 17 virtual law library ,hat the retainer agreement was never approved by the board of the corporation is also a poor e!cuse because the fact of the matter is that the private respondent did deliver to Atty. Armovit the sum of P<(('(((.(( in partial payment' and the private respondent can not now deny him the balance bay alleging lac- of authority of the Bengson spouses.virtualawlibrary virtual law library Contingent fees are valid in this "urisdiction. 18 t is true that attorney's fees must at all times be reasonable% 19 however' we do not find Atty. Armovit's claim for /twenty percent of all recoveries/ to be unreasonable. n the case of Aro v. Naawa, 20 decided in 1>4>' this Court awarded the agreed fees amid the efforts of the client to deny him fees by terminating his services. n parallel vein' we are upholding Atty. Armovit's claim for P2&2'(((.(( more A pursuant to the contingent fee agreement A amid the private respondent's own endeavours to evade its obligations.virtualawlibrary virtual law library $everal times' we have come down hard on erring practitioners. 8e will not however be slow either' in coming to the rescue of aggrieved brotherAlawyers in protecting the integrity of the bar from unscrupulous litigants.virtualawlibrary virtual law library 8+;R;)9R;' premises considered' the petition is #RA.,;:. ,he private respondent is 9R:;R;: to pay the petitioner the sum of P2&2'(((.((. Costs against the private respondent.virtualawlibrary virtual law library , $ $9 9R:;R;:.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.

Endnotes: 1 Rollo, 13. virtual law library 2 Id., 129. virtual law library 3 Id., 130. virtual law library 4 Kalalo, Felipe, JL: Pronove, Ricar o an !ictor, Lui", JJ., concurrin#. virtual law library $ Rollo, Id., 19%. virtual law library % Id., 1$%. virtual law library & Id., 2'. virtual law library ' Id. 9 Id., 129. virtual law library 10 Id., 192(193. virtual law library 11 Id., 1$. virtual law library 12 Id. virtual law library

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13 Id., 129. virtual law library 14 Id., 13. virtual law library 1$ )n Re: *ence"lao Laureta, +arc, 12, 19'&, 14' -.R/ 3'20 1livare" v. Leola, 9& P,il. 2$3 219$$3. virtual law library 1% Rollo, Id., 1$%. virtual law library 1& 4ila o v. 5avi , '4 P,il. $%9 219493. virtual law library 1' .anla" v. .ourt o6 /ppeal", 7o.(&&%91, /u#u"t ', 19'', 1%4 -.R/ 1%00 5irector o6 Lan " v. /baba, 7o. L(2%09%, February 2&, 19&9, '' -.R/ $13. virtual law library 19 .)!)L .158, art. 220'. virtual law library 20 7o. L(241%3, /pril 2', 19%9, 2& -.R/ 1090. )n t,i" ca"e, t,e .ourt al"o ,el t,at certiorari i" proper.