Considering the manifestation of plaintiff, Aurelio Licudan and Alfredo (sic) Licudan
that they have entered freely and voluntarily in the said contract of professional
services, let the same be annotated at the back of TCT 818 of the Register of
Deeds of Quezon City, upon payment of the required legal fees. (CA Decision, pp.
7-8; Rollo, pp. 36-37)
The Contract for Professional Services dated August 30, 1979 differs from the
earlier contractual provisions in that it entitled the respondent lawyer to one-third
(1/3) of the subject property or 90.5 square meters and provided for usufructuary
rights over the entire lot in question in favor of the respondent lawyer's son,
Teodoro M. Domalanta, Jr. for an agreed consideration. (Annex "J" of the Petition;
Rollo, p. 59)
On July 25, 1985, the respondent lawyer filed a motion ex parte to amend the
Order dated September 19, 1979 so as to conform with an additional professional
fee covering 31 square meters more of the lot for services rendered in Civil Case
No. Q-28655 as evidenced by a Deed of Absolute Sale dated May 1, 1983
executed by Aurelio Licudan in favor of the respondent lawyer.
On September 6, 1985, the trial court ordered the respondent lawyer to submit a
subdivision plan in conformity with his attorney's fees contract under which one-
third (1/3) of the property or 90.5 square meters was alloted to him.
On September 23, 1985, the respondent lawyer filed a motion for reconsideration
praying for the amendment of the Order dated September 19, 1979 to conform with
the Deed of Absolute Sale dated May 1, 1983 which was executed after the
annotation of the original attorney's lien of 90.5 square meters.
On September 30, 1985, the trial court denied the motion on the ground that the
respondent lawyer cannot collect attorney's fees for other cases in the action for
partition.
On October 4, 1985, the respondent lawyer filed a second motion for
reconsideration of the Order dated September 6, 1985 explaining that what he
sought to be included in the Order dated September 19, 1979 is the additional
attorney's fees for handling the redemption case which was but a mere offshoot of
the partition case and further manifesting that the additional 31 square meters as
compensation for the redemption case must be merged with the 90.5 square
meters for the partition case to enable the said respondent lawyer to comply with
the Order dated September 6,1985 which directed him to submit a subdivision plan
as required.
On October 21, 1985, the trial court issued the second Order being assailed in this
petition. The said Order reads:
Acting on the "Second Motion for Reconsideration" filed by Atty. Teodoro
Domalanta and finding the same to be justified, let an attorney's lien be annotated
in the title of the property for 31 square meters as attorney's fees of said Atty.
Teodoro Domalanta in addition to the original 90.5 square meters. (CA Decision, p.
8; Rollo, p. 37)
On August 22, 1986, more than ten (10) months after the Orders of September 6,
1985 and October 21, 1985 had become final and executory, the petitioners as
substituted heirs of the respondent lawyers' deceased clients filed a motion to set
aside orders on the ground that the award of professional fees covering 121.5
square meters of the 271.5 square meter lot is unconscionable and excessive.
After the respondent lawyer filed his Opposition to the above petitioners' motion,
the lower court, on August 29, 1986, finding that the petitioners as substituted
plaintiffs are not in full agreement with the respondent lawyer's claim for attorney's
fees, set aside its Orders dated September 6, 1985 and October 21, 1985.
On September 16, 1986, the respondent lawyer filed a motion for reconsideration
stressing the fact that the payment of the professional services was pursuant to a
contract which could no longer be disturbed or set aside because it has already
been implemented and had since then become final. This motion was denied on
October 3, 1986.
On November 15, 1986, the respondent lawyer filed a motion to set aside the
orders dated August 29, 1986 and October 3, 1986 reiterating his position that the
Orders of September 6, 1985 and October 21, 1985 have become final and are
already implemented. The respondent lawyer further asked for the modification of
the October 21, 1985 Order to reflect 60.32 square meters instead of 31 square
meters only since the stipulation in the Additional Contract for Professional
Services entitled him to 60.32 square meters.
LICUDAN vs CA
The practice of law is a profession rather than trade. Courts must guard against the
charging of unconscionable and excessive fees by lawyers for their services when
engaged as counsel. Whether or not the award of attorney's fees in this case is
reasonable, being in the nature of contingent fees, is the principal issue.
This petition for review on certiorari assails:
1) The Decision of the public respondent dated September 12, 1989 which
dismissed the petitioners' appeal thereby upholding the reasonableness of the
respondent lawyer's lien as attorney's fees over the properties of his clients; and
2) The Resolution of the public respondent dated January 30, 1990 which
denied the petitioners' motion for reconsideration.
The grounds relied upon by the petitioners are as follows:
The respondent Court, in upholding the entitlement of private respondent-attorney
on the attorney's fees he claimed, decided the question in a manner not in accord
with law or with the applicable decisions of this Honorable Tribunal.
The respondent Court, in refusing to review and determine the propriety,
reasonableness and validity of the attorney's fees claimed by the private
respondent-attorney, departed from the usual course of judicial proceedings.
The respondent Court, in failing to declare the attorney's fees claimed by the
private respondent-attorney as unconscionable, excessive, unreasonable, immoral
and unethical, decided the question in a way not in accord with law and with
applicable decisions of this Honorable Tribunal. (Petition, pp. 12-13; Rollo, pp. 16-
17)
The following are the antecedent facts pertinent to the case at bar:
The respondent lawyer was retained as counsel by his brother-in-law and sister,
the now deceased petitioners' parents, spouses Aurelio and Felicidad Licudan. His
services as counsel pertained to two related civil cases docketed as Civil Case No.
Q-12254 for partition and Civil Case No. Q-28655 for a sum of money in connection
with the redemption of the property subject matter of the two cases covered by
Transfer Certificate of Title No. 818 of the Register of Deeds of Quezon City. In
both cases, the respondent lawyer obtained a judgment in favor of his clients.
On August 13,1979, the respondent lawyer filed a Petition for Attorney's Lien with
Notification to his Clients which substantially alleged that his clients executed two
written contracts for professional services in his favor which provided that:
a) The undersigned counsel is entitled to own 97.5 square meters of the
plaintiff's share of the lot in question.
b) The undersigned counsel shall have a usufructuary right for a period of
ten (10) years of plaintiffs' share of the lot in question.
c) And that all damages accruing to plaintiffs to be paid by the defendant is
for the undersigned counsel.(Annex "H" of the Petition, Rollo, p. 54)
On September 19, 1979, the trial court handling Civil Case No. Q-12254 ordered
the annotation at the back of TCT No. 818 of the Register of Deeds of Quezon City
of the respondent lawyer's Contract for Professional Services dated August 30,
1979 signed by petitioner Wilfredo Licudan and Aurelio Licudan on his own behalf
and on behalf of his daughter, petitioner Cristina Licudan-Campos. The said trial
court's Order, being one of two Orders being essentially challenged in this petition,
is reproduced below:
Before the court for consideration is a Petition for Attorney's Lien filed by Atty.
Teodoro D. Domalanta, counsel for the plaintiff, praying that his attorney's fees be
annotated as a lien at the back of Transfer Certificate of Title No. 818 of the
Register of Deeds of Quezon City, subject matter of this case.
For the protection of the plaintiffs, the court required the plaintiff Aurelio Licudan as
well as his son to appear this morning. Plaintiff Aurelio Licudan together with his
son Wilfredo Licudan, who appears to be intelligent and in fact he speaks (the)
English language well, appeared. Both Aurelio and Wilfredo Licudan manifested
that they have freely and voluntarily signed the Contract for Professional Services,
dated August 30, 1979 and notarized before Notary Public Amado Garrovillas as
Doc. No. 32, Page 8, Book No. XIX, Series of 1979.
Page 1
 After the petitioners' Opposition to the said motion was filed, the
The case having been resolved and title having been issued to petitioner, adverse
claimant waited for petitioner to comply with ha obligation under the document
executed by him on June 10, 1961 by delivering the one-half () portion of the DIRECTOR OF LANDS vs. ABABA
said parcels of land.
MAKASIAR, J.:
Petitioner refused to comply with his obligation and instead offered to sell the whole
parcels of land covered by TCT No. 31841 to petitioner-spouses Juan Larrazabal This is an appeal from the order of the Court of First Instance of Cebu dated March
and Marta C. de Larrazabal. Upon being informed of the intention of the petitioner, 19, 1966 denying the petition for the cancellation of an adverse claim registered by
adverse t claimant immediately took stops to protect his interest by filing with the the adverse claimant on the transfer certificate of title of the petitioners.
trial court a motion to annotate Ins attorney's lien on TCT No. 31841 on June 10,
1965 and by notifying the prospective buyers of his claim over the one-half portion The adverse claimant, Atty. Alberto B. Fernandez was retained as counsel by
of the parcels of land. petitioner, Maximo Abarquez, in Civil Case No. R-6573 of the Court of First
Instance of Cebu, entitled "Maximo Abarquez vs. Agripina Abarquez", for the
Realizing later that the motion to annotate attorney's lien was a wrong remedy, as it annulment of a contract of sale with right of repurchase and for the recovery of the
was not within the purview of Section 37, rule 138 of the Revised Rule of Court, but land which was the subject matter thereof. The Court of First Instance of Cebu
before the same was by the trial court, adverse t by an affidavit of adverse claim on rendered a decision on May 29, 1961 adverse to the petitioner and so he appealed
July 19, 1965 with the Register of Deeds of Cebu (p. 14, ROA; p. 13, rec.). By to the Court of Appeals.
virtue of the petition of mid affidavit the adverse claim for one-half () of the lots
Litigating as a pauper in the lower court and engaging the services of his lawyer on
covered by the June 10, 1961 document was annotated on TCT No. 31841.
a contingent basis, petitioner, liable to compensate his lawyer whom he also
retained for his appeal executed a document on June 10, 1961 in the Cebuano-
Notwithstanding the annotation of the adverse claim, petitioner-spouse Maximo
Visayan dialect whereby he obliged himself to give to his lawyer one-half (1/2) of
Abarquez and Anastacia Cabigas conveyed by deed of absolute sale on July 29,
whatever he might recover from Lots 5600 and 5602 should the appeal prosper.
1965 two-thirds (2/3) of the lands covered by TCT No. 31841 to petitioner-spouses
The contents of the document as translated are as follows:
Juan Larrazabal and Marta C. de Larrazabal. When the new transfer certificate of
title No. 32996 was issued, the annotation of adverse claim on TCT No. 31841
AGREEMENT
necessarily had to appear on the new transfer certificate of title. This adverse claim
on TCT No. 32996 became the subject of cancellation proceedings filed by herein
KNOW ALL MEN BY THESE PRESENTS:
petitioner-spouses on March 7, 1966 with the Court of First Instance of Cebu (p. 2
ROA; p. 13, rec.). The adverse claimant, Atty. Alberto B. Fernandez, filed his
That I, MAXIMO ABARQUEZ, Plaintiff in Case No. R-6573 of the Court of First
opposition to the petition for cancellation on March 18, 1966 (p. 20, ROA; p. 13
Instance of Cebu, make known through this agreement that for the services
rec.). The trial court resolved the issue on March 19, 1966, when it declared that:
rendered by Atty. Alberto B. Fernandez who is my lawyer in this case, if the appeal
is won up to the Supreme Court, I Promise and will guarantee that I win give to said
...the petition to cancel the adverse claim should be denied. The admission by the
lawyer one-half (1/2) of what I may recover from the estate of my father in Lots No.
petitioners that the lawyers (Attys. Fernandez and Batiguin) are entitled to only
5600 and 5602 which are located at Bulacao Pardo, City of Cebu. That with respect
one-third of the lot described in Transfer Certificate of Title No. 32966 is the best
to any money which may be adjudged to me from Agripina Abarquez, except
proof of the authority to maintain said adverse claim (p. 57, ROA; p. 13, rec.).
'Attorney's Fees', the same shall pertain to me and not to said lawyer.
Petitioner-spouses decided to appeal the order of dismissal to this Court and
IN WITNESS WHEREOF, I have caused my right thumb. mark to be affixed hereto
correspondingly filed the notice of appeal on April 1, 1966 with the trial court. On
this 10th of June, 1961, at the City of Cebu.
April 2, 1966, petitioner-spouses filed the appeal bond and subsequently filed the
record on appeal on April 6, 1966. The records of the case were forwarded to this
THUMBMARK
Court through the Land Registration Commission of Manila and were received by
MAXIMO ABARQUEZ
this Court on May 5, 1966.
(p. 5, Petitioner-Appellant's Brief, p. 26, rec.)
Counsel for the petitioner-spouses filed the printed record on appeal on July 12,
1966. Required to file the appellants' brief, counsel filed one on August 29, 1966
The real Property sought to be recovered in Civil Case No. R6573 was actually the
while that of the appellee was filed on October 1, 1966 after having been granted
share of the petitioner in Lots 5600 and 5602, which were part of the estate of his
an extension to file his brief.
deceased parents and which were partitioned the heirs which included petitioner
Maximo Abarquez and his elder sister Agripina Abarquez, the defendant in said civil
The case was submitted for decision on December 1, 1966. Counsel for the
case.
petitioners filed a motion to expunge appellees' brief on December 8, 1966 for
having been filed beyond the reglementary period, but the same was denied by this
This partition was made pursuant to a project of partition approved by the Court
Court in a resolution dated February 13, 1967.
which provided am other that Lots Nos. 5600 and 5602 were to be divided into
three equal Parts, one third of which shall be given to Maximo Abarquez. However,
The pivotal issue to be resolved in the instant case is the validity or nullity of the
Agripina Abarquez the share of her brother stating that the latter executed an
registration of the adverse claim of Atty. Fernandez, resolution of which in turn
instrument of pacto de retro prior to the partition conveying to her any or all rights in
hinges on the question of whether or not the contract for a contingent fee, basis of
the estate of their parents. Petitioner discovered later that the claim of his sister
the interest of Atty. Fernandez, is prohibited by the Article 1491 of the New Civil
over his share was based on an instrument he was believe all along to be a mere
Code and Canon 13 of the Canons of Professional Ethics.
acknowledgment of the receipt of P700.00 which his sister gave to him as a
consideration for g care of their father during the latter's illness and never an
Petitioners contend that a contract for a contingent fee violates Article 1491
instrument of pacto de retro. Hence, he instituted an action to annul the alleged
because it involves an assignment of a property subject of litigation. That article
instrument of pacto de retro.
provides:
The Court of Appeals in a decision promulgated on August 27, 1963 reversed the
Article 1491. The following persons cannot acquire by purchase even at a
decision of the lower court and annulled the dead of pacto de retro. Appellee
public or judicial auction, either in person or through the petition of another.
Agripina Abarquez filed a motion for reconsideration but the same was denied in a
resolution dated January 7, 1964 (p. 66, Record on Appeal; p. 13, Rec.) and the
xxx xxx xxx
judgment became final and executory on January 22,1964.
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
Subsequently, Transfer Certificate of Title No. 31841 was issued on May 19,1965 in
and other o and employees connected with the administration of justice, the
the name of Maximo Abarquez, married to Anastacia Cabigas, over his adjudged
property and rights in litigation or levied upon an execution before the court within
share in Lots Nos. 5600 and 5602 containing an area of 4,085 square meters (p.
whose jurisdiction or territory they exercise their respective functions; this
110, ROA; p. 13, rec.). These parcels of land later by the subject matter of the
prohibition includes the act of acquiring by assignment and shall apply to lawyers,
adverse claim filed by the claimant.
Page 2
Por no dor lugar a recelos de ninguna clase, admite el Codigo (en el apartado
penutimo del art. 1.459) algunos casos en que, por excepcion, no se aplica el
pricipio prohibitivo de que venimos hablando. Tales son los de que se trate de
acciones hereditarias entre coheredero, de cesion en pago de creditos, o de
garantia de los bienes que posean los funcionarios de justicia.
Algunos autores (Goyena, Manresa, Valverde) creen que en la prohibicion del art.
1.459 esta comprendido el pacto de quota litis (o sea el convenio por el cual se
concede al Abogado o Procurador, para el caso de obtener sentencia favorable
una parte alicuota de la cosa o cantidad que se litiga), porque dicho pacto supone
la venta o cesion de una parte de la cosa o drecho que es objecto del litigio. Pero
Mucius Scaevola oberva, conrazon, que en el repetido pacto no hay propiamente
caso de compraventa ni de cesion de derechos, y bastan para estimario nulo otros
preceptos del Codigo como los relativos a la ilicitud de la causa (Castan, Derecho
Civil Espol, Tomo 4, pp. 68-69, [9a ed., 1956], emphasis supplied).
The Supreme Court of Spain, in its sentencia of 12 November 1917, has ruled that
Article 1459 of the Spanish Civil Code (Article 1491 of our Civil Code) does not
apply to a contract for a contingent fee because it is not contrary to morals or to
law, holding that:
... que no es susceptible de aplicarse el precepto contenido en el num. 5 del art.
1.459 a un contrato en el que se restrigen los honorarios de un Abogado a un tanto
por ciento de lo que se obtuviera en el litigio, cosa no repudiada por la moral ni por
la ley (Tolentino, Civil Code of the Philippines, p. 35, Vol. V [1959]; Castan, supra;
Manresa, supra).
In the Philippines, among the Filipino commentators, only Justice Capistrano
ventured to state his view on the said issue, thus:
The incapacity to purchase or acquire by assignment, which the law also extends
to lawyers with t to the property and rights which may be the object of any litigation
in which they may take part by virtue of their profession, also covers contracts for
professional services quota litis. Such contracts, however, have been declared
valid by the Supreme Court" (Capistrano, Civil Code of the Philippines, p. 44, Vol.
IV [1951]).
Dr. Tolentino merely restated the views of Castan and Manresa as well as the state
of jurisprudence in Spain, as follows:
Attorneys-at-lawSome writers, like Goyena, Manresa and Valverde believe that
this article covers quota litis agreements, under which a lawyer is to be given an
aliquot part of the property or amount in litigation if he should win the case for his
client. Scaevola and Castan, however, believe that such a contract does not involve
a sale or assignment of right but it may be void under other articles of the Code,
such as those referring to illicit cause- On the other hand the Spanish Supreme
Court has held that this article is not applicable to a contract which limits the fees of
a lawyer to a certain percentage of what may be recovered in litigation, as this is
not contrary to moral or to law. (Tolentino, Civil Code of the Philippines, p. 35, Vol.
V [1959]; Castan, supra, Emphasis supplied).
Petitioners her contend that a contract for a contingent fee violates the Canons of
Professional Ethics. this is likewise without merit This posture of petitioners
overlooked Canon 13 of the Canons which expressly contingent fees by way of
exception to Canon 10 upon which petitioners relied. For while Canon 10 prohibits
a lawyer from purchasing ...any interest in the subject matter of the litigation which
he is conducting", Canon 13, on the other hand, allowed a reasonable contingent
fee contract, thus: "A contract for a con. tangent fee where sanctioned by law,
should be reasonable under all the circumstances of the ca including the risk and
uncertainty of the compensation, but should always be subject to the supervision of
a court, as to its reasonableness." As pointed out by an authority on Legal Ethics:
Every lawyer is intensely interested in the successful outcome of his case, not only
as affecting his reputation, but also his compensation. Canon 13 specifically
permits the lawyer to contract for a con tangent fee which of itself, negatives the
thought that the Canons preclude the lawyer's having a stake in his litigation. As
pointed out by Professor Cheatham on page 170 n. of his Case Book, there is an
inescapable conflict of interest between lawyer and client in the matter of fees. Nor
despite some statements to the con in Committee opinions, is it believed that,
particularly in view of Canon 13, Canon 10 precludes in every case an arrangement
to make the lawyer's fee payable only out of the results of the litigation. The
distinction is between buying an interest in the litigation as a speculation which
Canon 10 condemns and agreeing, in a case which the lawyer undertakes primarily
in his professional capacity, to accept his compensation contingent on the outcome
(Drinker, Henry S Legal Ethics, p. 99, [1953], Emphasis supplied).
with respect to the property and rights which may be the object of any litigation in
which they may take part by virtue of their profession (Emphasis supplied).
This contention is without merit. Article 1491 prohibits only the sale or assignment
between the lawyer and his client, of property which is the subject of litigation. As
WE have already stated. "The prohibition in said article a only to applies stated: "
The prohibition in said article applies only to a sale or assignment to the lawyer by
his client of the property which is the subject of litigation. In other words, for the
prohibition to operate, the sale or t of the property must take place during the
pendency of the litigation involving the property" (Rosario Vda. de Laig vs. Court of
Appeals, et al., L-26882, November 21, 1978).
Likewise, under American Law, the prohibition does not apply to "cases where after
completion of litigation the lawyer accepts on account of his fee, an interest the
assets realized by the litigation" (Drinker, Henry S., Legal Ethics, p. 100 [1953],
citing App. A, 280; N.Y. Ciu 714). "There is a clear distraction between such cases
and one in which the lawyer speculates on the outcome of the matter in which he is
employed" (Drinker, supra, p. 100 citing A.B.A. Op. 279).
A contract for a contingent fee is not covered by Article 1491 because the tranfer or
assignment of the property in litigation takes effect only after the finality of a
favorable judgment. In the instant case, the attorney's fees of Atty. Fernandez,
consisting of one-half (1/2) of whatever Maximo Abarquez might recover from his
share in the lots in question, is contingent upon the success of the appeal. Hence,
the payment of the attorney's fees, that is, the transfer or assignment of one-half
(1/2) of the property in litigation will take place only if the appeal prospers.
Therefore, the tranfer actually takes effect after the finality of a favorable judgment
rendered on appeal and not during the pendency of the litigation involving the
property in question. Consequently, the contract for a contingent fee is not covered
by Article 1491.
While Spanish civilists differ in their views on the above issue whether or not a
contingent fee contract (quota litis agreement) is covered by Article 1491 with
Manresa advancing that it is covered, thus:
Se ha discutido si en la incapacidad de Ion Procumdam y Abogados asta o el pecto
de quota litis. Consiste este, como es sabido, en la estipulacion de que el Abogado
o el Procurador ban de hacer suyos una parte alicuota de In cona que se li m la
son es favorable. Con es te concepto a la vista, es para nosortros que el articulo
que comentamos no menciona ese pacto; pero como la incapacidad de los
Abogados y Procuradores se extinede al acto de adquirir por cesion; y la
efectividad del pacto de quota litis implica necesariamente una cesion, estimamos
que con solo el num. 5 del articulo 1459 podria con exito la nulidad de ese pacto
tradicionalmente considerado como ilicito.
xxx xxx xxx
Debe tenerse tambien en cuenta, respecto del ultimo parrafo del articulo 1459, la
sentencia del Tribunal Supreme de 25 Enero de 1902, que delcara que si bien el
procurador no puede adquirir para si los bienes, en cuanto a los cuales tiene
incapacidad, puede adquirirlos para otra persona en quien no concurra
incapacidad alguna (Manresa, Comentarios al Codigo Civil Espaol, Tomo X, p.
110 [4a ed., 1931] emphasis supplied).
Castan, maintaining that it is not covered, opines thus;
C. Prohibiciones impuestas a las personas encargadas, mas o menos
directamente, de la administracion de justicia.El mismo art. 1,459 del Codigo
civil prohibe a los Magistrados, Jueces, individuos del Minesterio fiscal, Secretarios
de Tribunales y Juzgados y Oficiales de Justicia adquirir por compra (aunque sea
en subasta publica o judicial, por si ni por persona alguna intermedia). 'Los bienes
y derechos que estuviesen en litigio ante el Tribunal en cuya jurisdicion on teritorio
ejercieran sus respectivas funciones, extendiendo se esta prohibicion al acto de
adquirir por cesion', y siendo tambien extensiva ' Alos Abogados y Procuradores
respecto a los bienes y derecho que fueran objeto del un litigio en que intervengan
pos su profession y oficio.'
El fundamento de esta prohibicion es clarismo. No solo se tratadice Manresa
de quitar la ocasion al fraude; persiguese, ademas, el proposito de rodear a las
personas que intervienen en la administracion de justicia de todos los prestigios
que necesitan para ejercer su ministerio, librando los de toda sospecha, que,
aunque fuere infundada, redundaria en descredito de la institucion.
Page 3
amply protect him. As held in the case of Grey vs. Insular Lumber Co., supra, citing
the case of Ulanday vs. Manila Railroad Co., supra:
Where it is shown that the contract for a contingent fee was obtained by any undue
influence of the attorney over the client, or by any fraud or imposition, or that the
compensation is so clearly excessive as to amount to extortion, the court win in a
proper case protect the aggrieved party.
In the present case, there is no iota of proof to show that Atty. Fernandez had
exerted any undue influence or had Perpetrated fraud on, or had in any manner
taken advantage of his client, Maximo Abarquez. And, the compensation of one-
half of the lots in question is not excessive nor unconscionable considering the
contingent nature of the attorney's fees.
With these considerations, WE find that the contract for a contingent fee in question
is not violative of the Canons of Professional Ethics. Consequently, both under the
provisions of Article 1491 and Canons 10 and 13 of the Canons of Profession
Ethics, a contract for a contingent fee is valid
In resolving now the issue of the validity or nullity for the registration of the adverse
claim, Section 110 of the Land Registration Act (Act 496) should be considered.
Under d section, an adverse claim may be registered only by..
Whoever claims any part or interest in registered land adverse to the registered
owner, arising subsequent to the date of the o registration ... if no other provision is
made in this Act for registering the same ...
The contract for a contingent fee, being valid, vested in Atty Fernandez an interest
or right over the lots in question to the extent of one-half thereof. Said interest
became vested in Atty. Fernandez after the case was won on appeal because only
then did the assignment of the one-half () portion of the lots in question became
effective and binding. So that when he filed his affidavit of adverse claim his
interest was already an existing one. There was therefore a valid interest in the lots
to be registered in favor of Atty. Fernandez adverse to Mo Abarquez.
Moreover, the interest or claim of Atty. Fernandez in the lots in question arose long
after the original petition which took place many years ago. And, there is no other
provision of the Land Registration Act under which the interest or claim may be
registered except as an adverse claim under Section 110 thereof. The interest or
claim cannot be registered as an attorney's charging lien. The lower court was
correct in denying the motion to annotate the attomey's lien. A charging lien under
Section 37, Rule 138 of the Revised Rules of Court is limited only to money
judgments and not to judgments for the annulment of a contract or for delivery of
real property as in the instant case. Said Section provides that:
Section 37. An attorney shall have a lien upon the funds, documents and
papers of his client which have lawfully come into his oppossession and may retain
the same until his lawful fees and disbursements have been paid, and may apply
such funds to the satisfaction thereof. He shall also have a lien to the same extent
upon all judgments, for the payment of money, and executions issued in pursuance
of such judgments, which he has secured in a litigation of his client ... (emphasis
supplied).
Therefore, as an interest in registered land, the only adequate remedy open to Atty.
Fernandez is to register such interest as an adverse claim. Consequently, there
being a substantial compliance with Section 110 of Act 496, the registration of the
adverse claim is held to be valid. Being valid, its registration should not be
cancelled because as WE have already stated, "it is only when such claim is found
unmeritorious that the registration thereof may be cancelled" (Paz Ty Sin Tei vs.
Jose Lee Dy Piao 103 Phil. 867 [1958]).
The one-half () interest of Atty. Fernandez in the lots in question should therefore
be respected. Indeed, he has a better right than petitioner-spouses, Juan
Larrazabal and Marta C. de Larrazabal. They purchased their two-thirds (2/3)
interest in the lots in question with the knowledge of the adverse claim of Atty.
Fernandez. The adverse claim was annotated on the old transfer certificate of title
and was later annotated on the new transfer certificate of title issued to them. As
held by this Court:
The annotation of an adverse claim is a measure designed to protect the interest of
a person over a piece of real property where the registration of such interest or
right is not otherwise provided for by the Land Registration Act, and serves as a
notice and warning to third parties dealing with said property that someone is
claiming an interest on the same or a better right than the registered owner thereof
These Canons of Professional Ethics have already received "judicial recognition by
being cited and applied by the Supreme Court of the Philippines in its opinion"
Malcolm, Legal and Judicial Ethics, p. 9 [1949]). And they have likewise been
considered sources of Legal Ethics. More importantly, the American Bar
Association, through Chairman Howe of the Ethics Committee, opined that "The
Canons of Professional Ethics are legislative expressions of professional opinion
ABA Op. 37 [1912])" [See footnote 25, Drinker, Legal Ethics, p. 27]. Therefore, the
Canons have some binding effect
Likewise, it must be noted that this Court has already recognized this type of a
contract as early as the case of Ulanday vs. Manila Railroad Co. (45 PhiL 540
[1923]), where WE held that "contingent fees are not prohibited in the Philippines,
and since impliedly sanctioned by law 'Should be under the supervision of the court
in order that clients may be protected from unjust charges' (Canons of Profession 1
Ethics)". The same doctrine was subsequently reiterated in Grey vs. Insular
Lumber Co. (97 PhiL 833 [1955]) and Recto vs. Harden (100 PhiL 427 [1956]).
In the 1967 case of Albano vs. Ramos (20 SCRA 171 [19671), the attorney was
allowed to recover in a separate action her attomey's fee of one-third (1/3) of the
lands and damages recovered as stipulated in the contingent fee contract. And this
Court in the recent case of Rosario Vda de Laig vs. Court of Appeals, et al. (supra),
which involved a contingent fee of one-half () of the property in question, held
than ,contingent fees are recognized in this i jurisdiction (Canon 13 of the Canons
of Professional Ethics adopted by the Philippine Bar association in 1917 [Appendix
B, Revised Rules of Court)), which contingent fees may be a portion of the property
in litigation."
Contracts of this nature are permitted because they redound to the benefit of the
poor client and the lawyer "especially in cases where the client has meritorious
cause of action, but no means with which to pay for legal services unless he can,
with the sanction of law, make a contract for a contingent fee to be paid out of the
proceeds of the litigation" (Francisco, Legal Ethics, p. 294 [1949], citing Lipscomb
vs. Adams 91 S.W. 1046, 1048 [1949]). Oftentimes, contingent fees are the only
means by which the poor and helpless can redress for injuries sustained and have
their rights vindicated. Thus:
The reason for allowing compensation for professional services based on
contingent fees is that if a person could not secure counsel by a promise of large
fees in case of success, to be derived from the subject matter of the suit, it would
often place the poor in such a condition as to amount to a practical denial of justice.
It not infrequently happens that person are injured through the negligence or willful
misconduct of others, but by reason of poverty are unable to employ counsel to
assert their rights. In such event their only means of redress lies in gratuitous
service, which is rarely given, or in their ability to find some one who will conduct
the case for a contingent fee. That relations of this king are often abused by
speculative attorneys or that suits of this character are turned into a sort of
commercial traffic by the lawyer, does not destroy the beneficial result to one who
is so poor to employ counsel (id, at p. 293, citing Warvelle, Legal Ethics, p. 92,
Emphasis supplied).
Justice George Malcolm, writing on contingent fees, also stated that:
... the system of contingent compensation has the merit of affording to certain
classes of persons the opportunity to procure the prosecution of their claims which
otherwise would be beyond their means. In many cases in the United States and
the Philippines, the contingent fee is socially necessary (Malcolm, Legal and
Judicial Ethics, p. 55 [1949], emphasis supplied).
Stressing further the importance of contingent fees, Professor Max Radin of the
University of California, said that:
The contingent fee certainly increases the possibility that vexatious and unfounded
suits will be brought. On the other hand, it makes possible the enforcement of
legitimate claims which otherwise would be abandoned because of the poverty of
the claimants. Of these two possibilities, the social advantage seems clearly on the
side of the contingent fee. It may in fact be added by way of reply to the first
objection that vexations and unfounded suits have been brought by men who could
and did pay substantial attorney's fees for that purpose (Radin, Contingent Fees in
California, 28 Cal. L. Rev. 587, 589 [1940], emphasis supplied).
Finally, a contingent fee contract is always subject to the supervision of the courts
with respect to the stipulated amount and may be reduced or nullified. So that in
the event that there is any undue influence or fraud in the execution of the contract
or that the fee is excessive, the client is not without remedy because the court will
Page 4
P6,000.00 for all appearances in court at P200.00 per day; that inasmuch as there
was a written contract for attorney's fees, submitted contract should prevail; that
the estate was worth around P246,329.25 only; that appellee had all the time to
investigate but did not the value of the property under litigation, and to
question the inadequacy of his foes under the contract; that the value of the estate
did not warrant the payment of fees greater than that stipulated in the
contract.1wph1.t
Consequently, she requested the court to approve the attorney's fees as
determined in the said contract and to note the unpaid balance of P15,000.00 as a
lien upon the estate.
Motion pendente-lite. On February 10, 1959, Francis filed another motion
praying that, without prejudice his aforesaid petition to fix his fees, Aurea Matias be
ordered to make immediate payment of the sum of P15,000.00. Appellant
interposed seasonable objection thereto.
Hearing. During the hearing of these motions, the trial judge made the following
observations:
The Court has read very carefully the answer of Atty. Orense (for Aurea Matias)
and it gets the impression that his theory is that the amount of P15,000 which still
remains unpaid is even excessive and exhorbitant. If that be the case, it appears
that the question now before the Court is: Should it order the payment of the sum of
P15,000 without further proof ? Atty. Orense is disputing the reasonablenes of that
amount; naturally enough, the other party has the right to prove that the amount is
not only inadequate but that he is entitled to more for the value of his services.
In other words, the issue now is: What is the reasonable amount of attorney's fees
of the petitioner for the services he has rendered?
Thereafter, he denied appellee's motion for immediate payment of the unpaid
portion (P15,000) until proof shall have been adduced of the reasonable value of
his professional services on the basis of quantum meruit.
So, in deciding the main petition in view of the testimonial and documentary
evidence, it brushed aside, as immaterial, the alleged misrepresentation in the
making of the written contract, since "reasonable amount" had become the real
issue.
Resolution fixing fee. In determining the amount of compensation, the Cavite
court said particular attention and made a detailed account of "the extent of the
services rendered" by petitioning counsel; "the importance of the subject matter of
the controversy;" his "professional standing."
And in line with its various considerations, the said court declared in its resolution
of September 24, 1959, that "in the light of its own professional knowledge,
considering the skill, labor and time devoted by the movant to the case, he
(Francisco) is entitled to 25% of the current market value of the estate of the
deceased" which value it fixed at P1,236,993.46.
Disagreeing with such resolution, Aurea Matias appealed directly to this Court.
Appellant's theses. In her brief, Aurea Matias strongly urges the following
propositions: (a) the attorney's fees should have been fixed according to the
contract not on the basis of quantum meruit; (b) assuming that the fees could
be fixed on quantum meruit, the basis should be the assessed value not the
current market value; (c) assuming further that the current market value should be
the basis, the appraisal made by the Bureau of Internal Revenue should have been
adopted; (d) the attorney's fees are chargeable only against appellant, not
against the estate; (e) to award 25% of the gross estate to this a attorney would be
unreasonable, even unconscionable; (f) there were no special reasons to direct
execution pending appeal.
All the above propositions except the last2 will her in be duly considered.
Discussion. On the strength of Rules 26 and 27 of the Rules of Court, appellant
disputes the validity of the hearing in the lower court of appellee's motion to fix, and
pay a portion of his counsel fees.
It appears that the will of Gabina Raquel, who died without forced heirs,
bequeathed the greatest part of the estate to appellant, and the rest to Santos
(Sanchez, Jr. vs. Court of Appeals, 69 SCRA 332 [1976]; Paz Ty Sin Tei vs. Jose
Le Dy Piao supra).
Having purchased the property with the knowledge of the adverse claim, they are
therefore in bad faith. Consequently, they are estopped from questioning the
validity of the adverse claim.
WHEREFORE, THE DECISION OF THE LOWER COURT DENYING THE
PETITION FOR THE CANCELLATION OF THE ADVERSE CLAIM SHOULD BE,
AS IT IS HEREBY AFFIRMED, WITH COSTS AGAINST PETITIONER-
APPELLANTS JUAN LARRAZABAL AND MARTA C. DE LARRAZABAL.
SO ORDERED.
FRANCISCO vs. MATIAS
BENGZON, C.J.:
Statement Aurea Matias has appealed from the resolution of the Cavite court of
first instance fixing the professional fees of Atty. Vicente J. Francisco at 25% of the
current market value of the estate left by the deceased Gabina Raquel. The
relevant facts are these:
Materials facts. In May, 1952, she filed in this expediente, thru Atty. R. N.
Agbunag, a petition for the probate of the will of said Gabina Raquel. The petition
was in due time, opposed by Basilia Salud, first cousin of Gabina on the
grounds that: (1) the will was not signed by the deceased; (2) it was not executed in
accordance with law; (3) Gabina had been the victim of undue influence and fraud;
and (4) the deceased had no mental capacity to make a testament.
On July 16,1952, said Aurea Matias named as executrix in the will engaged
the services of Atty. Vicente Francisco, who, with the assistance of Atty. Agbunag
and of Attorneys Alberto J. Francisco and J. Gonzales Orense, personally handled
the case before three different judges successively.
The written contract for services signed on the date above-mentioned by both Atty.
Francisco and Aurea Matias reads as follows:
RECEIPT
RECIBI de la Srta. Aurea Matias la cantidad de cinco mil (P5,000.00) pesos
acuenta de los honorarios convenidos de veinte mil (P20,000.00) pesos, bajo las
siguientes condiciones: si se gana el asunto la seorita Aurea Matias me pagara el
saldo de quince mil (P15,000.00) pesos y que cada dia de vista en que yo
comparezca me pagara doscientos pesos. Mis servicios se limitan a la legalizacion
del testamento de la difunta Da. Gabina Raquel.
After more than thirty hearings and thirty-two scheduled hearings which started
in August 1952,1 and continued on until November 1955 Judge Primitivo L.
Gonzales rendered in February, 1956, a decision denying the probate of the
will. However, on appeal to this Court, Aurea Matias obtained a reversal of the
judgment, the authenticity and due execution of the will having been upheld (June
1958). Her brief as appellant here 284 printed pages was prepared and
signed by Atty. Vicente Francisco, although in the name of the four lawyers.
Petition for fees. After the decision of this Court had become final, said attorney
filed on October 7, 1958, in Cavite court, in this testate proceeding, a motion to fix
his attorney's fees on the basis of quantum merit. He alleged, among other things,
that the Supreme Court had approved the probate of the will of Gabina Raquel, that
had agreed to receive a contingent fee of P15,000.00 under his erroneous belief,
due to misrepresentation of Aurea Matias that Gabina Raquel had left properties
worth only P167,000.00 that he learned, after the decision of the Supreme Court
that the said properties actually amounted much more than that sum; and that,
consequently, he was not bound by his agreement to receive a contingent fee
P15,000.00 only. Atty. Francisco prayed that his compensation be fixed at 30% of
the market value of the estate.
Objections. Resisting this motion, Aurea Matias averred that appellee was only
one of the four attorneys engaged by her to secure that probate of the will; that she
had written contract for attorney's fees as above describe that Francisco had
already received the amount of P5,000.00 on July 16, 1952, plus a total sum of
Page 5
Adverse to appellant's contention is the fact that during the hearing on June 27,
1959, after having mulled over the pleadings and listened to oral argument of both
parties the presiding judge defined in open court (a definition which appellant's
counsel acceded), the issue between parties as, "the reasonable amount of
Attorney Francisco fees for the services he has rendered."
Her counsel's assent to the above definition has placed Aurea in a situation where
she could not equitably insist upon the amount fixed in the written contract.
Appellant's disavowal of the fee stipulated therein resulted in a repudiation of the
contractual compensation.
At this juncture, it may be added: it is very probable, that Atty. Francisco had been
actually led to believe that the estate was worth P167,000.00 only; because given
his experience and prestige, he would not have undertaken the task of probating a
will involving over one million pesos7 for P15,000.00 only and contingent at
that.8 Aurea was advised by Simeon del Rosario before going to engage the
services of Francisco that the latter charged high fees. p. 401, Record on
Appeal.
In the circumstances, we are constrained to hold that the trial judge did not err in
determining the attorney's fees on the basis of quantum meruit in disregard of the
written contract.
Assessed value or market value. With an array of decided cases, appellant
argues that in special proceedings, testate or intestate, the value in the inventories
submitted by the administrator or executor is considered as the correct value of the
estate binding upon all parties, and well the court, in the proper management
and administration of such estate.
Then she point's out that in Reyes vs. De la Cruz,9 a contract providing for
compensation of attorney's fees in the amount of 5% of whatever may be
adjudicated to the client, was held to refer only to the assessed value of properties
adjudicated and not to their market value.
Refuting this argument, appellee aptly denies analogy between the Reyes decision
(supra) and the instant case, because the former merely called for interpretation of
the written contract of services;10 whereas, the question here at issue is the value
of appellee's professional services on the basis of quantum meruit.
This Court must, therefore, determine how much the services of appellee are really
worth. And we cannot refuse to take a realistic approach in the performance of the
work. Inquiry into the real value of the estate (its true value) becomes imperative.
We note that in Sison vs. Suntal, supra, we fixed the counsel's fees for services
rendered in opposing a will on the basis of the market value of the estate.
Market value. Both parties have submitted for examination, two valuations of
the estate. To show that its marked value does not exceed P264,329.25, appellant
presented the appraisal for tax purposes of the estate of the deceased by Internal
Revenue Examiner Florencio M. Alfonso (Exhibit 3-A); in addition to certificates of
the assessed value of such properties in several municipalities of Cavite.
Appellee per contra, substantiated his valuation of the estate at P1,236,993 with
official statements of the provincial assessors, and deeds of sale of neighboring
realty or of lands similarly situated. And to rebut the certificate Exhibit 3-A, appellee
introduced Exhibit "M", an affidavit of Jose Araas, former Commissioner of
Internal Revenue showing the defect in the methods employed by the Internal
Revenue examiners in appraising the inheritance left by deceased taxpayers.
After examining the evidence presented by both sides, we find no important reason
to overrule the opinion the trial judge that the current market value is that reflected
in the estimate of the provincial assessors, whose judgment, by reason of their
official work and wide experience in such particular line deserves great weight and
reliability. Besides, holding court sessions in Cavite City and possessing
background information, the trial judge occupied a better position to estimate
landed property prices. Furthermore, we cannot discount the fact that the
assessment of real properties for tax purposes (the principal element taken into
account when the Revenue Examine made his appraisal) is of little use in a judicial
inquiry as to the market value of the land. Lastly the appraisal made by the
Revenue Examiners turned out to be unreliable according to Commissioner of the
Internal Revenue Araas (Exhibit M).
Matias, Rafael Matias (her brothers) and to Victorina Salud, Santiago Salud and
Policarpio Salud.
Appellant urges here that as notice of the motion had been given neither to her
brothers nor to the Saluds, the hearings and the resolution produced no valid and
binding effect.
According to the record, at the hearing of October 25, 1958, appellant's counsel
called the attention of the lower court to this lack of notice; and during the hearing
on June 27, 1959, said counsel again objected on the same ground. Acting upon
such objection, the court ruled that the other legatees should also be notified, and
accordingly directs that notice be given. In the subsequent hearings which took
place on July 13, 1959, and other days of that monthly legatee Rafael Matias was
present; and appellant's counsel no longer voiced any manifestations or objections.
In the resolution now on appeal before this Court, the defect urged by appellant is
not discussed. Probably, the other legatees were notified, as ordered.
Anyway, as this particular issue affects appellant's proposition (d) [services not
chargeable to estate] both may for convenience, be jointly taken up.
It is appellee's contention on these related points that the attorney's fees for
probating the will, constituted a proper charge against the estate,3 and that a
motion to fix such fees should be served, on the executor or administrator of the
estate; it being unnecessary to notify the legatees, for the reason that until the
project of partition is approved and their portions adjudicated to the legatees, the
estate, as well as the heirs and legatees, are legally represented by the executor or
administrator. Appellee then concludes that service on appellant as the executrix of
the said will, sufficiently complied with the procedural rules on the matter Aurea
Matias having engaged the services of the appellee in her capacity as executrix of
the will.
Matias denies having engaged Francisco as executrix. This denial can not prevail
as against the following circumstances:
1. Atty. Francisco said he contracted with her as the executrix. The will (shown to
him) designated her as such; 2. She later asked to be noted in the estate
proceedings, the amount of P15,000.00 (Francisco's fees) as a lien upon the estate
(p. 103, R.A.); 3. In her motion ex-parte of July 20, 1959, she petitioned for
authority to pay from the estate, the sum of P2,000.00 as part of the retainer of Atty.
Francisco; 4. She included in her statement of accounts4 as executrix, Francisco's
attorney's fees in the amount of P11,000.00; and 5. The statement of assets and
liabilities of the estate filed by her with the lower court on January 10, 1959, listed
appellee's fees in the amount of P15,000.00 as an item of estate liability.
Appellant's inconsistent course of action thus meets the judge's eye. Whereas in
invoking procedural rules, she denies representative capacity as executrix, she
has, as executrix, caused this claim to be recorded as a lien upon the estate.
Whereas she denied liability of the estate for Francisco's fees, she has charged the
estate for the attorney fees paid by her to him.
On the other hand, if service of the motion upon her does not bind the other
legatees as she claims because she does not represent them, the question
arises, why does she speak for them by insisting on the point?
Finally, it appears that when the lack of notice was called to the attention of the
court, service was ordered. Thereafter, hearings were resumed, without any further
objection. So, it may be assumed at this level that service was accordingly
made; specially because no motion to reconsider was filed in the court below
which was best fitted to verify compliance with its notification orders.
Quantum meruit. Proposition (b) addresses itself the main question: What
should be the basis of appellee's fees: the contract or quantum meruit?
Generally speaking, where the employment of an attorney is under an express
valid contract5 fixing the compensation for the attorney, such contract is conclusive
as the amount of compensation.6
Atty. Francisco assails the written contract, because appellant misrepresented the
real value of Gabina's inheritance. Appellant, on the other hand, maintains that the
contract should govern, and that if courts could interfere with the stipulated fee, the
objective should be to reduce amount.
Page 6
probate. Appellants brief consisted of 285 printed pages. The reversal of the
appealed decision proved the effectiveness of Francisco's appellate advocacy.
Attempting to minimize the importance to the estate of legal services in securing
approval of the will, appellant points out that will or no will, the estate remains. The
argument, however plausible, overlooks the significance of the will. It is the desire,
the command of the owner of the estate as to how his inheritance shall be
distributed. In upholding the will and working for its approval, the attorney was
simply serving such departed owner of the estate and so in effect serving the
estate.
As already explained, had the will been disapproved, this appellant and the other
legatees would have gotten nothing out of the estate. It is fair to make them pay.
"Yes, they are liable, but not the estate" appellant may reply. Such distinction does
not seem equitable. Anyway, as stated, service was rendered to the estate.
Professional standing of counsel. The professional standing of appellee has
been amply attested to by the late Senator Claro M. Recto and the former
Secretary of Justice Jose P. Bengzon. Appellee has been shown to have practiced
law since his admission to the bar in 1914, either alone or in association with other
equally prominent lawyers; to have figured in several precedent-laying
controversies decided by this Court; to have annotated or written commentaries on
practically every branch of the law; to have published and edited for 23 years, the
Lawyers Journal; to have founded a law school; to have actively participated in
various political and civic organizations, to have been elected to the Philippine
Senate, obtaining the highest number of votes among all the senatorial candidates
the election held in the year 1945, etc.
There, is no doubt, he belongs in the front line of the legal profession. In trial work,
there are few who match his mental acumen and resourcefulness.
Conclusion. Taking into account all the variables of proceeding in the light of our
several pronouncements on matter of contingent lawyer's fees, we feel that modify
the appealed resolution and awarding 12.5% of the market value to the herein
appellee would accomplish substantial justice. This figure represents a
compromise, some members having voted for a bigger amount,15 while other
voted for less. The Suntay and the Harden cases were a specially mentioned, since
they belonged to the million-peso class. This award sets a higher ratio than the
first, because the latter involved over three million pesos and cause Atty. Francisco
rendered much greater services this estate. For one thing he handled tedious trial
work which lasted for about four years and for another, the fee was contingent.
The Harden ratio (20%) was not applied because attorney and client had entered
therein into valid written contract.16
Several circumstances account for this drastic reduction among them: (a) 25% of
P1,236,993.46 equals P309,248.36; but Atty. Francisco expressed willingness to
receive P100,000.00 only, in his letter of September 15, 1958 (Record on Appeal,
p. 132); (b) although admittedly the leading legal counsel, he got the assistance of
three other attorneys; (c) believing the estate amounted to P167,000.00 he agreed
to receive P15,000.00 as contingent fee, i.e. 9% only; and (d) he has already
received a total of P11,000.00.
Judgment. WHEREFORE, modified as herein indicated, the appealed decision
is affirmed. No costs in this instance.
FERNANDEZ vs. HON. BELLO
LABRADOR, J.:
Petition for certiorari with injunction filed by Atty. Manuel L. Fernandez to annul two
orders dated June 16 and July 29, 1958, of the Court of First Instance of
Pangasinan, Hon. Eloy B. Bello, presiding. The first order reprimands petitioner for
his improper conduct as counsel in Special Proceedings No. 3931, entitled
"Guardianship of the Minors Federico and Pedro both surnamed Perreyras,
Timotea Perreyras, petitioner-guardian," orders him to return to the guardian within
15 days the sum of P200.00 collected by him, and causes a copy of the order to be
sent to the Supreme Court for corresponding disciplinary action on the petitioner
(Annex J). The second order denies petitioner's motion for reconsideration and
warns him not to use improper terms in his pleadings. (Annex L.)
The circumstances leading to the issuance of the above orders may be briefly
stated as follows: Timotea Perreyras, through Atty. Manuel L. Fernandez as her
counsel, instituted Special Proceedings No. 3931, for her appointment as guardian
At any rate, we may take judicial note of the general information that the market
value of real property in the provinces is usually three or more times the assessed
valuation thereof.11
Percentage of fees. Citing Section 22, Rule 127 of the Rules of Court which
says that "an attorney shall be entitled to have and recover from his client no more
than a reasonable compensation for his services", appellant denounces as
unreasonable and unconscionable the 25% given to Atty. Francisco as counsel
fees.
This Supreme Court has held the following as the guidelines to be observed in
determining the compensation of an attorney: (a) the amount and character of the
services rendered; (b) the labor, time and trouble involved; (c) the nature and
importance of the litigation or business in which the services were rendered; (d) the
responsibility imposed; (e) the amount of money or the value of the property
affected by the controversy, or involved in the employment; (f) the skill and
experience called for in the performance of the services; (g) the professional
character and standing of the attorney; (h) the results secured; (i) and whether or
not the fee is absolute or contingent,12 it being a recognized rule that an attorney
may properly charge a much larger fee when it is to be contingent than when it is
not. (Moran, Comments on the Rules of Court, Vol. III [1957 Ed.], pp. 644, 645,
citing Haussermann vs. Rahmeyer, 12 Phil. 350; and others.)
The Court has likewise held that:
The allowance of counsel fees in probate proceedings rests largely in the sound
discretion of the court (probate) which should not be interfered with except for
manifest abuse; but it may be modified by the reviewing court, when the fee
allowed is inadequate or excessive. (Quintillan vs. Degala, 50 Off. Gaz. 5305.)
By the way, in this Quintillan case, a thirty-percent (30%) or thirty-three percent
(33%) contingent fee in opposing a will was held not to be excessive or
unreasonable.
Importance of the subject matter. Appellee's service were engaged to secure
the probate of the will of Gabina Raquel. Upon the allowance of the will rested the
appellants right to the bulk of an estate, worth more than one million pesos. Had
the will been disallowed, appellant and the other legatees named in the will would
have received nothing. The whole estate would have passed to the oppositor
Basilia Salud, who is the first cousin of the deceased Gabina Raquel to the
exclusion of appellant and the other legatees named in the will, Aurea Matias,
whose father is a first cousin of the deceased, stands five degree removed from
Gabina Raquel, whereas Basilia Salud only four degrees removed from her; and
under our rules on succession13 in case of intestate or legal succession, relative
nearer in degree excludes the more remote ones and considering also, that in the
collateral line, the right of representation holds only where nephews and nieces
survive with brothers and sisters of the deceased.14 Note incidentally, that the will
favored Aurea because the latter lived with, and rendered services to, her aunt
Gabina for more than 32 years.
Nature and extent of the services rendered. The probate of the will, confronted
Aurea's counsel with question of fact and questions of law. Counsel had to prove
that the said will was valid, duly executed in accordance with law. In view of the
various grounds of the opposition the probate of the will, Atty. Francisco had to
make wide and extensive research in the field of handwriting, medicine and
chemistry not to mention the interviewing of prospective witnesses.
Indeed, the legal services rendered in the lower court were expectably quite
exacting. The trial alone covered most a period of four years. The preparation and
presentation of evidence called for strenuous work. Thirty-one documents were
presented as evidence for the proponent of the will. The transcript of the
stenographic notes consisted of more than a thousand pages. Numberless motions
were filed. After the closing of the evidence, a memorandum had to be filed to
answer the oppositor's motion to reject the will. And then, despite the extensive
study, research, and preparation of the evidence, and notwithstanding the skill and
experience of Atty. Francisco, the Cavite court denied the probate of the will.
The adverse judgment was appealed to this Court. There was additional labor to be
performed, because there was a greater responsibility to discharge. To secure a
reversal of judgment was doubly hard. Counsel had to demonstrate the errors of
fact and law committed by the lower court in its decision and to persuade the
appellate court to reverse overcoming the presumption in favor of a judicial
pronouncement. This Court was actually convinced the will was admitted to
Page 7

The court below found petitioner guilty of contempt court on two grounds, the first is
that he instituted the guardianship proceedings for the sole purpose of facilitating
payment to him of the debts of the wards. The facts do not, however, bear out this
finding. Before the guardianship proceedings were instituted, the wards were
indebted in the sum of P200.00 to Ricardo Perreyras and Maximiano Umagay,
and as the wards had no money with which to pay the debt, the only way to settle it
is by selling the nipa land. But the land could not have been sold by the minors
without intervention of a guardian. So the petitioner must have believed that
guardianship proceedings was the proper remedy. The judges of the court below,
from whom Judge Bello took over, must have been satisfied that the procedure
taken by the petitioner was more beneficial to the wards when they appointed a
guardian and approved the sale of the land. As there is no evidence of bad faith on
the part of petitioner, the finding on this point of the court below should be reversed.
However, the finding of the court that the purchase price of the land is P1,000 was
in custodia legis and could not be taken and used in payment of debts without its
previous authority is correct. As a lawyer the petitioner is charged with the
knowledge that the property and effects of the wards are under the control and
supervision of the court, and that they could not be and expended without the
latter's permission, more especially so when the money taken was to pay the debt
of the father of the wards. The reprimand is, therefore, fully justified. But the order
for the refund of the P200.00 and the closing of the guardianship proceedings after
such return, would deprive petitioner of the fees that he was entitled to receive from
the father of the guardian and the wards, for services rendered in a civil case,
which services are admitted to have been due from their father. While the
reprimand is in order for petitioner's mistake, the mistake is no sufficient ground for
the non-payment of the fees he lawfully earned and which his client could not pay
before his death. The duty of courts is not alone to see that lawyers act in a proper
and lawful manner; it is also their duty to see that lawyers are paid their just and
lawful fees. Certainly the court can not deny them that right; there is no law that
authorizes them to do so.
In his answer before this Court respondent judge justifies his order for the return of
the P200.00 on the ground that petitioner is "below average standard of a lawyer."
The opinion of a judge as to the capacity of a lawyer is not the basis of the right to
a lawyer's fee. It is the contract between the lawyer and client and the nature of the
services rendered. Petitioner claims that he won a civil case for his client, the
deceased father of the guardian and the wards. That P200.00 is the amount of the
fee of petitioner is admitted by the guardian. We find that the court's order directing
petitioner to return the P200.00, and in effect denying him the right to collect the
same, is not justified, to say the least. This portion of the final order is hereby
modified in the sense that the return of the P200.00 is without prejudice to
petitioner's right to demand payment for the services rendered the deceased out of
the proceeds of the property left by him (deceased).
In this Court the judge below desires that portions of petitioner's motion for
reconsideration be stricken out for employing strong language. We believe the said
strong language must have been impelled by the same language used by the judge
below in characterizing the act of the petitioner as "anomalous and unbecoming"
and in charging petitioner of obtaining his fee "through maneuvers of documents
from the guardian-petitioner." If any one is to blame for the language used by the
petitioner, it is the judge himself who has made insulting remarks in his orders,
which must have provoked petitioner, and the judge below has nothing to blame but
himself. If a judge desires not to be insulted he should start using temperate
language himself; he who sows the wind will reap a storm.
Wherefore, the orders are modified as above indicated. Without costs.
DALISAY vs. MARASIGAN
FRANCISCO, J.:
The petitioner Intestate Estate of Amado B. Dalisay, represented by Special
Administratrix Preciosa D. Tirol filed a complaint for unlawful detainer, docketed as
Civil Case No. 768-F-93, before Branch 3 of the Municipal Trial Court in Cities
(MTCC), Davao City against private respondent Lourdes Oppus. The said
complaint alleged, among others, the following:
Private respondent leased, on a monthly basis, a portion of lot located at C.M.
Recto Avenue, Davao City belonging to petitioner.[1] On March 1, 1993, petitioner
gave private respondent one (1) month advanced notice of the termination of the
lease on April 1, 1993, and demanded that the latter vacate the leased premises on
or before the said date.[2] Notwithstanding the said notice, private respondent
over the persons and properties of her brothers, the minors Federico and Pedro
Perreyras. Upon her appointment and upon her qualifying as such, she petitioned
the court for authority to sell a nipa land owned in common with the wards for the
purpose of paying outstanding obligations to Maximiano Umagay. The request
was granted by Judge Villamor, and on August 24, 1951, a deed of sale, prepared
and notarized by Atty. Manuel L. Fernandez, was executed by the guardian in favor
of Maximiano Umagay for the sum of P1,000. This sale was approved by Judge
Pasicolan on December 17, 1952 (Annex C).
The nipa land sold by the guardian had previously been sold with right to
repurchase to Ricardo Perreyras and Maximiano Umagay by Florentino
Perreyras, father (now deceased) of the guardian and the wards. The interest in the
land of Ricardo Perreyras and Maximiano Umagay were, in turn, sold for P200.00
to Atty. Manuel L. Fernandez. Of the purchase price of P1,000, P200.00 was paid
to Atty. Manuel L. Fernandez, redemption price of the nipa land and as assignee of
the credit in favor of Maximiano Umagay and Ricardo Perreyras. The other
P200.00 was given to said attorney, in payment of his legal fees for services
rendered by him as counsel of the father of the wards in a civil case. However, the
record does not show that these payments were authorized by the court.
On January 21, 1958, Judge Eloy Bello, who took over the court from Judge
Pasicolan, issued an order requiring Timotea Perreyras to show cause why she
should not be punished for contempt for failing to account for the property and
money of the wards. After hearing the guardian Timotea Perreyras, the court issued
another order date January 20, 1958, exonerating her of the contempt charges,
disapproving all payments made by her, including that made to Atty. Manuel L.
Fernandez, and requiring Attys. Manuel L. Fernandez and Braulio Fernandez to
show cause why they should not be suspended from the practice of law and
declared in contempt of court. In the same order, the court charged said attorneys
of having abused their relationship with the guardian and having taken money from
her without previous approval of the court (Annex D). Atty. Braulio Fernandez
submitted a written explanation, and the court, considering it satisfactory,
exonerated him of the preferred charges. On January 30, 1958, the court again
issued another order directing Atty. Manuel L. Fernandez to submit in ten days a
written answer to the charges stated in the order of January 27, 1958 (Annex G).
On February 1, 1958, he submitted an explanation (Annex H.), admitting receipt of
the sum of P400.00 from the guardian, but alleging that when he received the
amount he was no longer the attorney of the guardian as their relation had
terminated when the guardian secured the services of Atty. Braulio Fernandez; that
he acted in good faith and the guardianship proceedings were instituted by him
only to help the minors the action being less expensive than an intestate
proceeding, and that he was paid only P50.00 for his services to the guardian. So
he asked that the charges be dismissed and that the guardian be warned not to
make unjustifiable complaints against him.
On February 10, 1953, Timotea Perreyras and Maximiano Umagay were
summoned to appear for further examination on the proceeds of the sale of the
nipa land. After hearing their testimonies, the court on June 16, 1958, found Atty.
Manuel L. Fernandez guilty of contempt of court because he had taken the amount
of P400.00 from the proceeds of the sale without previous approval from the court.
The court also found the conduct of counsel to be anomalous for the reason that he
instituted the guardianship proceedings only to enable him to collect unpaid
attorney's fees due him from the father of the wards (Annex J). This is the first
order sought to be annulled in this appeal. The second order is that denying the
motion for reconsideration of respondent attorney.
It is claimed by petitioner in this appeal that the proceedings conducted in the court
below are irregular because no formal charge was filed against him. There is no
merit in this contention. The court motu proprio preferred the charges in its order
dated January 20, 1958, and in another order dated January 27, 1958, the
petitioner was duly advised thereof and was given an opportunity to file a written
answer thereto. It has been held in the following case that there has been sufficient
compliance with the requirements of law:
The institution of charges by the prosecuting officer is not necessary to hold person
guilty of civil or criminal contempt amenable to trial and punishment by the court. All
that the law requires is that there be a charge in writing duly filed in court and an
opportunity to the person charged to be heard by himself or counsel. The charge
may be made by the fiscal, by the judge, or even by a private person. The above
requirements were complied with by the filing of the order on September 30, and
the giving of full opportunity to the respondent to appear and defendant himself.
The contention that a formal information filed by a prosecuting officer is necessary
to begin proceedings must be overruled. (People vs. B. M. Venturanza, et al.,
defendants, Jose Y. Torres, appellant, 98 Phil., 211; 52 Off. Gaz. [2] 769.).
Page 8
x x x The petitioner (private respondent in this case) does not object to the
dismissal of the civil case but nonetheless wants her counterclaim therein to
subsist. Impossible. A person cannot eat his cake and have it at the same time. If
the civil case is dismissed, so also is the counterclaim filed therein.[18]
ACCORDINGLY, the instant petition for certiorari is granted and the assailed
decision of the RTC dated March 8,1994 is modified to exclude the award of
attorney's fees in favor of private respondent.
SO ORDERED.
AMALGAMATED LABORERS' ASSOCIATION vs. CIR
SANCHEZ, J.:
Controversy over attorneys' fees for legal services rendered in CIR Case No.
70-ULP-Cebu.
The background facts are as follows:
On May 30, 1956, Florentino Arceo and 47 others together with their union,
Amalgamated Laborers' Association, and/or Felisberto Javier, general president of
said union, lodged a complaint 1 in the Court of Industrial Relations (CIR), for unfair
labor practices specified in Sec. 4(a) 1, 2, 3 and 4 of the Industrial Peace Act. Made
respondents were their former employer, Binalbagan Sugar Central Company, Inc.
(Biscom), Rafael Jalandoni, its president and general manager; Gonzalo Guillen, its
chief engineer and general factory superintendent; and Fraternal Labor
Organization and/or Roberto Poli, its president.
Failing in their attempts to dismiss the complaint (motions to dismiss dated
June 30, 1956 and July 6, 1956), 2 respondents Biscom, Jalandoni, and Guillen, on
July 9, 1957, answered and counterclaimed. Respondents Fraternal Labor Union
and Poli also filed their answer dated July 12, 1957.
With the issues joined, the case on the merits was heard before a trial
commissioner.
At the hearings, only ten of the forty-eight complainant laborers appeared
and testified. Two of these ten were permanent (regular) employees of respondent
company; the remaining eight were seasonal workers. The regular employees were
Arsenio Reyes and Fidel Magtubo. Seasonal workers were Catalino Bangoy, Juan
Fernandez, Jose Garlitos, Dionisio Pido, Santiago Talagtag, Dominador Tangente,
Felimon Villaluna and Brigido Casas.
On November 13, 1962, CIR, thru Associate Judge Arsenio I. Martinez,
rendered judgment, which provides, inter alia, that the two regular employees
(Reyes and Magtubo) be reinstated "to their former positions, without loss of
seniority and other benefits which should have accrued to them had they not been
illegally dismissed, with full back wages from the time of their said dismissals up to
the time of their actual reinstatements, minus what they have earned elsewhere in
the meantime" and that the eight seasonal workers "be readmitted to their positions
as seasonal workers of respondent company (Biscom), with back wages as
seasonal workers from the time they were not rehired at the start of the 1955-1956
milling season on October 1, 1955 up to the time they are actually reinstated, less
the amount earned elsewhere during the period of their lay-off."
Respondents Biscom, Jalandoni and Guillen appealed direct to this Court. 3
On March 28, 1963, this Court dismissed the appeal, without costs. Ground:
Petitioners therein did not seek reconsideration of CIR's decision of November 13,
1962. The judgment became final.
Upon the ten complainants' motion to name an official computer to determine
the actual money due them, CIR, on June 4, 1963, directed the Chief Examiner of
its Examining Division to go to the premises of Biscom and compute the back
wages due the ten complainants.
On August 9, 1963, the Chief Examiner reported that the total net back
wages due the ten complainants were P79,755.22. Biscom and the complainants
moved for reconsideration: Biscom on August 17, 1963; complainants on
September 24, 1963.
In the interim, Atty. Leonardo C. Fernandez (a respondent herein) filed on
July 15, 1963 in the same case CIR Case No. 70-ULP-Cebu a "Notice of
Attorney's Lien." He alleged therein that he had been the attorney of record for the
continued in possession of the said premises, thereby prompting petitioner to
institute the abovementioned case for unlawful detainer.[3]
In refuting petitioner's allegations, private respondent claimed, among others, that
she had not received a single letter of demand to vacate from the petitioner, and
that the latter had in fact continued to collect rentals from her up to March 10,1993.
[4] Thus, private respondent raised as one of her affirmative defenses, the lack of
jurisdiction of the MTCC to take cognizance of the case for failure of the petitioner
to comply with the condition precedent of furnishing the lessee with a prior demand
to vacate.[5] By way of counterclaim, private respondent invoked her right as a
builder in good faith with respect to the improvements that she had introduced on
the said leased premises, and likewise claimed moral damages in the sum of
P10,000.00 and attorney's fees also in the same amount.[6]
During pre-trial, both parties stipulated that the petitioner, through its counsel,
notified private respondent of the termination of the contract of lease and
demanded that the latter vacate the leased premises. The said notice was sent via
registered mail on March 11,1993 but was not effectively delivered to nor received
by the private respondent. Hence, one of the legal issues delineated by the MTCC
for resolution was:
2. Whether or not the failure of the defendant to receive the notice to terminate the
lease contract and the demand to vacate the leased premises contained in that
letter sent through the mails under Registered Letter No. 027, dated March
11,1993, is a jurisdictional defect in connection with the filing of this complaint in
court thereby divesting this court (sic) the jurisdiction to try, hear and decide this
case;[7]
Resolving the aforementioned issue in the affirmative, the MTCC dismissed the
said case for lack of jurisdiction, and awarded in favor of the private respondent the
amounts of P5,000.00 as moral damages and P5,000.00 as attorney's fees.[8]
Aggrieved, the petitioner appealed to the Regional Trial Court (RTC) which affirmed
the dismissal of the case below holding that in a lease on a month to month basis,
a notice of termination of the lease is a condition precedent for the filling of an
unlawful detainer case and non-compliance therewith divests the trial court of
jurisdiction over the said case. The RTC sustained the award of attorney's fees in
favor of the private respondent but deleted the award of moral damages ruling that
the same cannot be granted in the absence of bad faith in the filing of a case.[9]
Petitioner comes before us through the instant petition for certiorari raising a sole
question of law, that is, whether or not the RTC had jurisdiction to award attorney's
fees after affirming the dismissal of the case by the MTCC for lack of jurisdiction to
try, hear and decide the case. Petitioner asseverates that as the MTCC and the
RTC had no jurisdiction over the principal action for unlawful detainer, then it had
no jurisdiction over the compulsory counterclaim of attorney's fees either.[10] The
petition is meritorious.
A counterclaim is compulsory where: (1) it arises out of, or is necessarily connected
with, the transaction or occurrence that is the subject matter of the opposing party's
claim; (2) it does not require the presence of third parties of whom the court cannot
acquire jurisdiction; and, (3) the trial court has jurisdiction to entertain the claim.[11]
Tested by these requirements, private respondent's claim for attorney's fees is
indubitably in the nature of a compulsory counterclaim.[12]
And We have consistently held that a compulsory counterclaim cannot remain
pending for independent adjudication by the court.[13] In the case of Metals
Engineering Resources Corp. v. Court of Appeals,[14] we elaborated in this wise:
x x x a compulsory counterclaim is auxiliary to the proceeding in the original suit
and derives its jurisdictional support therefrom, inasmuch as it arises out of or is
necessarily connected with the transaction or occurrence that is the subject matter
of the complaint. It follows that if the court does not have jurisdiction to entertain the
main action of the case and dismisses the same, then the compulsory
counterclaim, being ancilliary to the main action, must likewise be dismissed since
no jurisdiction remained for any grant of relief under the counterclaim.[15]
The aforementioned doctrine is in consonance with the primary objective of a
counterclaim which is to avoid and prevent circuity of action by allowing the entire
controversy between the parties to be litigated and finally determined in one action,
wherever this can be done with justice to all parties concerned.[16]
Furthermore, there is no denying the fact that it was private respondent herself who
caused the dismissal of her counterclaim for not only did she fail to object to, but
she actually moved for the dismissal of the complaint.[17] In the words of Justice
Abad Santos,
Page 9
P19,938.81 representing attorneys' fees and deducting therefrom all legal fees
incident to such deposit.
Petitioners herein, Atty. Carbonell, Amalgamated Laborers' Association, and
the ten employees, appealed from the June 25, 1964 resolution of CIR, direct to
this Court.
1. Petitioners press upon this Court the view that CIR is bereft of authority to
adjudicate contractual disputes over attorneys' fees. Their reasons: (1) a dispute
arising from contracts for attorneys' fees is not a labor dispute and is not one
among the cases ruled to be within CIR's authority; and (2) to consider such a
dispute to be a mere incident to a case over which CIR may validly assume
jurisdiction is to disregard the special and limited nature of said court's jurisdiction.
These arguments are devoid of merit.
The present controversy over attorneys' fees is but an epilogue or a tail-end
feature of the main case, CIR No. 70-ULP-Cebu, which undoubtedly is within CIR's
jurisdiction. And, it has been held that "once the Court of Industrial Relations has
acquired jurisdiction over a case under the law of its creation, it retains that
jurisdiction until the case is completely decided, including all the incidents related
thereto." 5 Expressive of the rule on this point is this
4. It is well settled that:
A grant of jurisdiction implies the necessary and usual incidental powers
essential to effectuate it, and every regularly constituted court has power to do all
things reasonably necessary for the administration of justice within the scope of its
jurisdiction, and for the enforcement of its judgments and mandates, even though
the court may thus be called upon to decide matters which would not be within its
cognizance as original causes of action.
While a court may be expressly granted the incidental powers necessary to
effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive
legislation, implies the necessary and usual incidental powers essential to
effectuate it (In re Stinger's Estate, 201 P. 693), and, subject to existing laws and
constitutional provisions, every regularly constituted court has power to do all
things that are reasonably necessary for the administration of justice within the
scope of its jurisdiction, and for the enforcement of its judgments and mandates. So
demands, matters, or questions ancillary or incidental to, or growing out of, the
main action, and coming within the above principles, may be taken cognizance of
by the court and determined, since such jurisdiction is in aid of its authority over the
principal matter, even though the Court may thus be, called on to consider and
decide matters, which as original causes of action, would not be within its
cognizance (Bartholomew vs. Shipe, 251 S.W. 1031), (21 C.J.S. pp. 136-138.)
Thus, in Gomez vs. North Camarines Lumber Co., L-11945, August 18,
1958, and Serrano vs. Serrano, L-19562, May 23, 1964, we held that the court
having jurisdiction over the main cause of action, may grant the relief incidental
thereto, even if they would otherwise, be outside its competence. 6
To direct that the present dispute be lodged in another court as petitioners
advocate would only result in multiplicity of suits, 7 a situation abhorred by the
rules. Thus it is, that usually the application to fix the attorneys' fees is made before
the court which renders the judgment. 8 And, it has been observed that "[a]n
approved procedure, where a charging lien has attached to a judgment or where
money has been paid into court, is for the attorney to file an intervening petition and
have the amount and extent of his lien judicially determined." 9 Appropriately to be
recalled at this point, is the recent ruling in Martinez vs. Union de Maquinistas,
1967A Phild. 142, 144, January 30, 1967, where, speaking thru Mr. Justice Arsenio
P. Dizon, explicit pronouncement was made by this Court that: "We are of the
opinion that since the Court of Industrial Relations obviously had jurisdiction over
the main cases, ... it likewise had full jurisdiction to consider and decide all matters
collateral thereto, such as claims for attorney's fees made by the members of the
bar who appeared therein." 10
2. The parties herein join hands in one point - the ten (10) successful
complainants in C.I.R Case No. 70-ULP-Cebu should pay as attorneys' fees 30%
of the amount adjudicated by the court in the latter's favor (P79,755.22).
They are at odds, however, on how to split the fees.
Respondent Atty. Fernandez claims twenty-five per cent (25%) of the 30%
attorneys' fees. He explains that upon the plea of Arsenio Reyes, union president
and one of the 10 successful complainants, he had to reduce his fees to 25% since
laborers in CIR Case No. 70-ULP-Cebu "since the inception of the preliminary
hearings of said case up to the Supreme Court on appeal, as chief counsel
thereof"; that he "had actually rendered legal services to the laborers who are
subject of this present litigation [CIR Case No. 70-ULP-Cebu] since the year 1956,
more or less"; that the laborers "have voluntarily agreed to give [him], representing
his attorney's fees on contingent basis such amounts equivalent to 25% thereof
which agreement is evidenced by a Note"; and that the 25% attorney's fee so
contracted is "reasonable and proper taking into consideration the length of
services he rendered and the nature of the work actually performed by him."
On September 25, 1963, Atty. Fernandez filed an "Amended Notice of
Attorney's Lien," which in part reads:
3. That the laborers, subject of this present litigation, sometime on February 3,
1956, had initially voluntarily agreed to give Undersigned Counsel herein,
representing his Attorney's fees on contingent basis, such amounts as equivalent to
Thirty Per Cent (30%) of whatever money claims that may be adjudicated by this
Honorable Court, copy of said Agreement, in the local Visayan dialect and a
translation of the same in the English language are hereto attached as annexes "A"
"A-1" hereof;
4. That subsequently thereafter, when the above-entitled Case was already
decided in their favor, Arsenio Reyes, in behalf of his co-laborers who are also
Complainants in this Case begged from the Undersigned Counsel herein that he
reduce his attorney's fees to Twenty-Five Per Cent (25%) only for the reason that
they have to share and satisfy also Atty. Jose Ur. Carbonell in the equivalent
amount of Five Per Cent (5%) although the latter's actual services rendered was so
insignificant thereof;
5. That because of the pleadings of said Arsenio Reyes, who is the President of
said Union, the Undersigned Counsel herein finally agreed and consented that his
attorney's fees be reduced to only Twenty-Five Per Cent (25%) instead of Thirty
Per Cent (30%) as originally agreed upon in 1956.
On October 7, 1963, Atty. Jose Ur. Carbonell (a petitioner herein) filed in
court a document labelled "Discharge" informing CIR of the discharge, release and
dismissal thru a union board resolution (attached thereto as Annex A thereof)
of Atty. Leonardo C. Fernandez as one of the lawyers of the complainants in
CIR Case No. 70-ULP-Cebu, effective February 28, 1963.
On October 14, 1963, Atty. Fernandez replied. He averred that the grounds
for his discharge specified in the board resolution were "malicious and motivated by
greed and ungratefulness" and that the unjustifiable discharge did not affect the
already stipulated contract for attorneys' fees.
On March 19, 1964, CIR Judge Arsenio I. Martinez resolved Biscom's and
complainants' motions for resonsideration objecting to the Chief Examiner's Report
and also respondent Fernandez' Amended Notice of Attorney's Lien. Judge
Martinez' order reads in part:
(b) Respondent company is further directed to deposit the amount
representing 25% of P79,755.22 with the Cashier of this Court, as attorney's fees;
xxx xxx xxx
(d) The amount representing attorney's fees to be deposited by the
respondent company is hereby awarded and granted to Atty. Leonardo C.
Fernandez, and he may collect the same from the Cashier of the Court upon the
finality of this order, subject to existing auditing procedures; ....
Biscom complied with the order of deposit. 4
On April 10, 1964, Atty. Carbonell moved to reconsider the March 19, 1964
order with respect to the award of attorneys' fees. Amongst his grounds are that
CIR has no jurisdiction to determine the matter in question, and that the award of
25% as attorneys' fees to Atty. Fernandez is excessive, unfair and illegal. This
motion was denied on April 28, 1964 by CIR en banc.
On June 9, 1964, a motion for reconsideration of the April 28, 1964 resolution
was filed by Atty. Carbonell. This was amplified by a similar motion filed on June 11,
1964.
On June 25, 1964, two things happened: First. CIR en banc denied the
motion of June 11, 1964. Second. On Atty. Fernandez' motion, Judge Martinez
authorized the Cashier of the court to disburse to Fernandez the amount of
Page 10
judgment in CIR Case No. 70-ULP-Cebu is to benefit the complaint laborers who
were unjustifiedly dismissed from the service. While it is true that laborers should
not be allowed to develop that atavistic proclivity to bite the hands that fed them,
still lawyers should not be permitted to get a lion's share of the benefits due by
reason of a worker's labor. What is to be paid to the laborers is not windfall but a
product of the sweat of their brow. Contracts for legal services between laborer and
attorney should then be zealously scrutinized to the end that a fair share of the
benefits be not denied the former.
5. An examination of the record of the case will readily show that an award of
twenty-five per cent (25%) attorneys' fees reasonably compensates the whole of
the legal services rendered in CIR Case No. 70-ULP-Cebu. This fee must be
shared by petitioner Atty. Carbonell and respondent Atty. Fernandez. For, after all,
they are the counsel of record of the complainants. Respondent Atty. Fernandez
cannot deny this fact. The pleadings filed even at the early stages of the
proceedings reveal the existence of an association between said attorneys. The
pleadings were filed under the name of "Fernandez & Carbonell." This imports a
common effort of the two. It cannot be denied though that most of those pleadings
up to judgment were signed for Fernandez & Carbonell by respondent Fernandez.
We note that a break-up in the professional tie-up between Attorneys
Fernandez and Carbonell began when petitioner Atty. Carbonell, on November 26,
1962, complained to CIR that respondent Atty. Fernandez "failed to communicate
with him nor to inform him about the incidents of this case." He there requested that
he be furnished "separately copies of the decision of the court and other pleadings
and subsequent orders as well as motions in connection with the case."
Subsequent pleadings filed in the case unmistakably show the widening rift
in their professional relationship. Thus, on May 23, 1963, a "Motion to Name and
Authorize Official Computer" was filed with CIR. On the same day, a "Motion to
Issue Writ of Execution" was also registered in the same court. Although filed under
the name of "Carbonell & Fernandez," these pleadings were signed solely by
petitioner Atty. Carbonell.
On September 16, 1963, an "Opposition to respondent Biscom's Motion for
Reconsideration" was filed by petitioner Atty. Carbonell. On September 24, 1963,
he filed a "Motion for Clarification" of the November 13, 1962 judgment of CIR
regarding the basic pay of Arsenio Reyes and Fidel Magtubo. On September 24,
1963, he also filed a "Motion to Reconsider Report of Chief Examiner." These, and
other pleadings that were filed later were signed solely by petitioner Atty. Carbonell,
not in the name of "Carbonell & Fernandez." While it was correctly observed by
CIR that a good portion of the court battle was fought by respondent Atty.
Fernandez, yet CIR cannot close its eyes to the legal services also rendered by
Atty. Carbonell. For, important and numerous, too, were his services. And, they are
not negligible. The conclusion is inevitable that petitioner Atty. Carbonell must have
a share in the twenty-five per cent (25%) attorneys' fees awarded herein. As to how
much, this is a function pertaining to CIR.
6. We note that CIR's cashier was authorized on June 25, 1964 to disburse
to Atty. Leonardo C. Fernandez the sum of P19,938.81 which is 25% of the amount
recovered. In the event payment actually was made, he should be required to
return whatever is in excess of the amount to which he is entitled in line with the
opinion expressed herein. 15
IN VIEW OF THE FOREGOING, the award of twenty five per cent (25%)
attorneys' fees solely to respondent Atty. Fernandez contained in CIR's order of
March 19, 1964 and affirmed by said court's en banc resolutions of April 28, 1964
and June 25, 1964, is hereby set aside; and the case is hereby remanded to the
Court of Industrial Relations with instructions to conduct a hearing on, and
determine, the respective shares of Attorney Leonardo C. Fernandez and Attorney
Jose Ur. Carbonell in the amount of P19,938.81 herein awarded as attorneys' fees
or both. No costs. So ordered.
RETUYA vs GORDUIZ
AQUINO, J:
This disbarment case is linked to Administrative Case No. 1431-MJ which was filed
by Ana F. Retuya against Municipal Judge Paulo A. Equipilag of Maasin, Leyte and
which was decided on July 16, 1979 (Retuya vs. Equipilag). The facts of that case,
which also gave rise to this disbarment case, are as follows:
Ana F. Retuya, a widow with four minor children, filed a claim for workmen's
compensation against Eastern Shipping Lines, Inc., the employer of her husband
who died in 1968. In a decision dated December 4, 1970 the Workmen's
"they have to share and satisfy also Atty. Jose Ur. Carbonell in the equivalent
amount of Five Per Cent (5%)." Atty. Fernandez exhibited a contract purportedly
dated February 3, 1956 before the 48 employees have even filed their
complaint in CIR. The stipulated fee is 30% of whatever amount the ten might
recover. Strange enough, this contract was signed only by 8 of the 10 winning
claimants. What happened to the others? Why did not the union intervene in the
signing of this contract? Petitioners dispute said contract. They say that Atty.
Fernandez required the ten to sign the contract only after the receipt of the
decision.
Petitioners, on the other hand, contend that the verbal agreement entered
into by the union and its officers thru its President Javier and said two lawyers, Atty.
Carbonell and Atty. Fernandez, is that the 30% attorneys' fees, shall be divided
equally ("share and share alike") amongst Atty. Carbonell, Atty. Fernandez and
Felisberto Javier, the union president.
After hearing, CIR Associate Judge Arsenio I. Martinez awarded 25%
attorneys' fees to respondent Atty. Fernandez. CIR noted that "the active conduct
and prosecution of the above-entitled case was done by Atty. Fernandez up to the
appeal in the Supreme Court," and that petitioner Atty. Carbonell manifested that
"Atty. Leonardo C. Fernandez was the counsel mainly responsible for the conduct
of the case." It noted, too, that petitioner Atty. Carbonell did not file any notice of
Attorney's Lien.
3. We strike down the alleged oral agreement that the union president should
share in the attorneys' fees. Canon 34 of Legal Ethics condemns this arrangement
in terms clear and explicit. It says: "No division of fees for legal services is proper,
except with another lawyer, based upon a division of service or responsibility." The
union president is not the attorney for the laborers. He may seek compensation
only as such president. An agreement whereby a union president is allowed to
share in attorneys' fees is immoral. Such a contract we emphatically reject. It
cannot be justified.
4. A contingent fee contract specifying the percentage of recovery an
attorney is to receive in a suit "should be reasonable under all the circumstances of
the case, including the risk and uncertainty of the compensation, but should always
be subject to the supervision of a court, as to its reasonableness." 11
Lately, we said: 12
The principle that courts should reduce stipulated attorney's fees whenever it
is found under the circumstances of the case that the same is unreasonable, is now
deeply rooted in this jurisdiction....
xxx xxx xxx
Since then this Court has invariably fixed counsel fees on a quantum meruit
basis whenever the fees stipulated appear excessive, unconscionable, or
unreasonable, because a lawyer is primarily a court officer charged with the duty of
assisting the court in administering impartial justice between the parties, and
hence, the fees should be subject to judicial control. Nor should it be ignored that
sound public policy demands that courts disregard stipulations for counsel fees,
whenever they appear to be a source of speculative profit at the expense of the
debtor or mortgagor. See, Gorospe, et al. v. Gochangco, L-12735, October 30,
1959. And it is not material that the present action is between the debtor and the
creditor, and not between attorney and client. As courts have power to fix the fee as
between attorney and client, it must necessarily have the right to say whether a
stipulation like this, inserted in a mortgage contract, is valid. Bachrach v. Golingco,
39 Phil. 138.
In the instant case, the stipulated 30% attorneys' fee is excessive and
unconscionable. With the exception of Arsenio Reyes who receives a monthly
salary of P175, the other successful complainants were mere wage earners paid a
daily rate of P4.20 to P5.00. 13 Considering the long period of time that they were
illegally and arbitrarily deprived of their just pay, these laborers looked up to the
favorable money judgment as a serum to their pitiful economic malaise. A thirty per
cent (30%) slice therefrom immensely dilutes the palliative ingredient of this judicial
antidote.
The ten complainants involved herein are mere laborers. It is not far-fetched
to assume that they have not reached an educational attainment comparable to
that of petitioner Carbonell or respondent Fernandez who, on the other hand, are
lawyers. Because of the inequality of the situation between laborers and lawyers,
courts should go slow in awarding huge sums by way of attorneys' fees based
solely on contracts. 14 For, as in the present case, the real objective of the CIR
Page 11
demanded a bigger amount.He lodged a complaint for estafa against her and was
arrests She had to post bail in the sum of one thousand pesos. As already stated
above, the estafa case was later dismissed when Ana paid Gorduiz sum of five
hundred pesos.
In his testimony before the investigating fiscal and this Court's legal officer,
respondent Gorduiz denied that he demanded as attorney's fees an amount higher
than three hundred pesos. He explained that he filed the estafa cam because after
Ana had received payment of the award, she did not turn over to him the attorney's
fees of three hundred pesos in spite of her promises to pay the same and his
demands for payment (Exh. 7 and 8).
Gorduiz declared that Ana filed the disbarment case against him in order that she
could evade the payment of his attorney's fees in the other cases which he had
handled for her. It was also possible that someone who had a score to settle with
Gorduiz had instigated the filing of this case against him.
He further declared that he filed the estafa case because he thought that Ana had
absconded when she stayed in Cebu City for a long time (23-24 tsn, June 26,
1979). He claimed that he spent one hundred pesos of his own money in gathering
evidence which was presented in the workmen's compensation case. He had also
advanced around two hundred pesos to cover the expenses in the other cases
which he had handled for Ana.
After reflecting on the conflicting contentions of the parties, the Court finds that
there is justification for suspending the respondent.
Respondent acted precipitately in filing a criminal action against his client for the
supposed misappropriation of his attomey's fees. It is not altogether clear that his
client had swindled him and, therefore, there is some basis for concluding that,
contrary to his lawyer's oath, he had filed a suit against her and had harassed and
embarrassed her.
Paragraph 14 of the Canons of Legal Ethics prescribes that "controversies with
clients concerning compensation are to be avoided by the lawyer so far as shall be
compatible with his self- respect and with his right to receive reasonable
recompense for his services; and lawsuits with clients should be resorted to only to
prevent injustice, imposition or fraud."
WHEREFORE, the respondent is from the practice of law for a period of six months
counted from notice of this decision. A copy of this decision should be attached to
his record in the Bar Confidant's office.
SO ORDERED.
ALDAMIZ vs JUDGE OF CFI
MORAN, C.J.:
This is a petition for certiorari filed by Gavino Aldamiz, administrator of the testate
of the deceased Santiago Rementeria y Aldamizcogeascoa, to set aside the order
of the Court of First Instance of Mindoro issued in the said testate estate
proceedings, fixing the amount of fees for respondent Juan L. Luna, as attorney for
said administrator.
The facts material to the issues raised in the petition are as follows:
Santiago Rementeria y Aldamizcogeascoa, the decedent was a Spaniard and
member of the commercial partnership "Aldamiz y Rementeria." The other
members were the brothers, Gavino and Jose, surnamed Aldamiz. Santiago
Rementeria died in Spain in 1937, and probate proceeding No. 705 was instituted
in the same year in the Court of First Instance of Mindoro by Gavino Aldamiz
represented by Atty. Juan L. Luna. Gavino Aldamiz was appointed administrator
and as such was represented by respondent Atty. Juan Luna up to January 21,
1947, when the order complained for was issued. In that order it is said that "said
attorney is the one who instituted this testate proceeding ten years ago and has
from its incipiency to the present stage of the proceedings actively intervened in the
same."lawphi1.net
On January 15, 1947, After ten years from the date of his appointment, Gavino
Aldamiz, as administrator, through his attorney, Juan L. Luna, submitted his
accounts for the years 1944, 1945 and 1946 and also a project of partition with a
view to closing the proceedings. On said date, the court approved the accounts by
refused to approve the project of partition unless all debts including attorney's fees
be first paid. In the project of partition, it was expressly stated that attorney's fees,
Compensation Unit at Tacloban City awarded to Ana the sum of P8,792.10
consisting of (a) P6,000 as compensation benefits, (b) P2,292.10 for medical and
hospitalization expenses, (c) P200 as burial expenses and (d) P300 as attorney's
fees of Atty. Iego Gorduiz (Case No. 9728).
The employer appealed. During the pendency of the appeal, the employer
proposed to compromise the claim by paying P4,396.05 or only one-half of the total
award. Ana accepted the proposal and directed that the amount be remitted to
Fiscal Mamerto Daclan through the Philippine National Bank's branch at Maasin,
Southern Leyte.
The employer paid the reduced award on November 16, 1972. Ana sent to the
employer the receipt and release signed by her with a covering letter dated
December 19, 1972 wherein she explained that her lawyer, Gorduiz, did not sign
the joint motion to dismiss the claim because he wanted twenty percent of the
award as his attorney's fees. She was willing to give him ten percent.
After she had cashed the check for P4,396.05, she was not able to contact Gorduiz
and pay his fee. Then, unexpectedly, in February, 1973, she was served with a
warrant of arrest issued in Criminal Case No. R-2362 of the municipal court of
Maasin. To avoid detention, she had to post bail in the sum of one thousand pesos.
It turned out that on January 12, 1973 Atty. Gorduiz executed an affidavit stating
that Ana had misappropriated his attorney's fees amounting to three hundred pesos
and that he had demanded payment of the amount from her but, she refused to
make payment and. instead, she went to Cebu and starved there for a long time.
On the basis of that affidavit, the acting chief of police filed against Ana a complaint
for estafa in the municipal court of Maasin. After posting bail, she filed a motion to
quash wherein she explained that she did not pay the fees of Atty. Gorduiz because
he was demanding one-third of the award: that when she did not accede to his
demand, he lowered his claim to eight hundred pesos, and that she bargained for
six hundred fifty pesos but he refused to accept that amount. Ana averred that the
estafa case was filed just to harass her.
Judge Paulo A. Equipilag denied the motion to quash. He granted the motion of
Atty. Gorduiz requiring Ana to produce a copy of the decision awarding her
workmen's compensation for her husband's death.
The estafa case was not tried. Atty. Erasmo M. Diola, as lawyer of Ana, offered to
Atty. Gorduiz the sum of five hundred pesos as settlement of the case. The offer
was accepted.
On November 22, 1973, the acting child of police filed a motion to dismiss the case
on the basis of the affidavit of Atty. Gorduiz ex. executed on that date stating that
the prosecution witnesses had allegedly become hostile and that he was no longer
interested in further prosecuting the case. Also, on that day, Judge Equipilag
dismissed the case.
In spite of the dismissal of the estafa case Ana F. Retuya felt aggrieved by the
proceedings therein. In a complaint dated July 24, 1974 but filed in this Court on
October 30, 1974, she asked for the disbarment or suspension of Atty. Gorduiz and
Judge Equipilag. The disbarment case against Gorduiz was referred to the Solicitor
General.
The case against Judge Equipilag was investigated by the Judge of the Court of
First Instance of Southern Leyte.
This Court found that there was no justification for suspending respondent Judge.
However, he was admonished to be more prudent and circumspect in the
discharge of his duties so as to obviate the suspicion that, for an ulterior motive, he
wall in cahoots with the offended party in a criminal case for the purpose of using
the strong arm of the law that the accused in an oppressive and vindictive manner.
The Solicitor General asked the provincial fiscal of Southern Leyte to investigate
the case against Gorduiz. The fiscal in her report of July 8, 1975 recommended the
of the case.
The Solicitor General disagreeing with that recommendation, filed in this Court
against Gorduiz a complaint wherein he prayed that Gorduiz be suspended for six
months because the latter, in filing the estafa case, had promoted a groundless suit
against his client.
Ana F. Retuya testified before the investigation Fiscal that in December, 1972 she
was willing to pay Gorduiz six hundred fifty pesos as his attorney's few but he
Page 12
G.R. No. 47106, 40 Off. Gaz. [8th Supp.], 132.) 1 If the judgment is rendered
against the administrator and he pays, he may include the fees so paid in his
account to the court. (Uy Tioco vs. Imperial, 53 Phil., 802.) The attorney also may,
instead of bringing such an action, file a [petition in the testate or intestate
proceeding "asking that the court, after notice to all persons interested, allow his
claim and direct the administrator to pay it as an expense of administration."
(Emphasis ours.) (Escueta vs. Sy Juilliong, 5 Phil., 405.)
In the instance case, as above stated, no written petition for the payment of
attorney's fees has ever been filed by the respondent attorney and the interested
parties had not been previously notified thereof nor of the hearing held by the court.
Consequently, the order issued by the respondent court on January 21, 1947, and
all subsequent orders implementing it, are null and void, as having been issued an
excess of jurisdiction.
We also hold that the order of execution issued on April 19,1948, is null and void,
not only because it was intended to implement the order of January 21, 1947,
which in itself was null and void, but because a writ of execution is not the proper
procedure allowed by the Rules of the Court for the payment of debts and
expenses of administration. The proper procedure is for the court to order the sale
of personal estate or the sale of mortgaged of real property of the deceased and all
debts or expenses of administration should be paid out of the proceeds of the sale
or mortgage. The order for the sale or mortgage should be issued upon motion of
the administrator and with the written notice to all the heirs, legatees and devisees
residing in the Philippines, according to Rule 89, section 3, and Rule 90, section 2.
And when sale or mortgage of real estate is to be made, the regulations contained
in Rule 90, section 7, should be complied with.
Execution may issue only where the devisees, legatees or heirs have entered into
possession of their respective portions in the estate prior to settlement and
payment of the debts and expenses of administration and it is later ascertained that
there are such debts and expenses to be paid, in which case "the court having
jurisdiction of the estate may, by order for that purpose, after hearing, settle the
amount of their several liabilities, and order how much and in what manner each
person shall contribute, and may issue execution if circumstances require" (Rule
89, section 6; see also Rule 74, section 4; Emphasis ours). And this is not the
instant case.
It is alleged by respondent that petitioner is guilty of laches. True that petitioner
failed to appeal from the order of January 21, 1947, within the time provided by the
Rules and the instant petition for certiorari was filed one (1) year, four (4) months
and fourteen (14) days after petitioner had received a copy of said order. And we
have held in Prifeta vs. David, 40 Off. Gaz., 14th Supp., p. 152, 2 that orders
issued without previous notice to parties will be deemed cured if said parties fail to
appeal within time provided by the rules and their appeal is lost due to their own
negligence. But here, aside from petitioner, there are interested parties who have
never been notified of the order complained of, and as to them, said order has not
become final and executory . And with respect to petitioner, he has not lost his
appeal through his own negligence. When he received the notice of the order of the
Court fixing respondent's fees in the amount of P28,000, he immediately wrote his
lawyer a letter asking for a substantial reduction and extension of time to pay. The
lawyer answered advising him to file his motion for reconsideration within thirty
days, but he received his lawyer's letter after said period had expired. And
petitioner had no other attorney to advice him except respondent who was his
adversary on the matter now in dispute. After receiving said letter, he again sought
equitable compromise with respondent attorney and later paid him P5,000, and
respondent then told him that he would be satisfied with whatever additional
amount petitioner might desire to pay him. And petitioner would perhaps have
taken no action were it not because without previous notice to him, the respondent
attorney asked authority from the court to sell two parcels of land totalling 13
hectares, for the payment of said professional fees and later, on July 26, 1947,
respondent attorney, again without previous notice to petitioner, filed a motion for
execution for the same purpose. Both motions were, however, abandoned. But a
second motion for execution was filed by respondent without petitioner's
knowledge, which was granted by the Court on April 19, 1948. Respondent Sheriff
levied on two parcels of land belonging to the partnership "Aldamiz y Rementeria"
with a total area of 357 hectares and assessed at P182,360 and the sale was
announced by the sheriff for July 20, 1948. Two motions for consideration were
filed by petitioner, one on June 16,1948, and the other on June 28, 1948, asking
that the order of January 21, 1947, and the order of execution of April 19,1948 be
set aside, but both motions were denied and the last order of denial is dated July
1,1948. The petition in the instant case was filed on July 17, 1948. We hold that
under the circumstances, particularly the fiduciary relation between petitioner and
respondent attorney, the former is not guilty of laches.
debts and incidental expenses would be proportionately paid by the beneficiaries
after the closure of the testate proceedings, but the court refused to sanction this
clause of the project. It is for this reason that right then and there, Attorney Luna, to
comply with the wishes of the court, without previously preparing and filing a written
petition to have his professional fees fixed, and without previous notice to all the
interested parties, submitted evidence of his services and professional standing so
that the court might fix the amount of his compensation and the administrator may
make payment thereof. This failure to file a written claim and to notify the interested
parties thereof was not due to bad faith or fraudulent purpose but to an honest
belief on the part of the respondent attorney that such requirements were not
necessary under the circumstance.
In this connection, it must be stated, in justice to Attorney Luna, that during the ten
years he served as attorney for the administrator and during the 25 years as legal
consultants to Santiago Rementeria, Gavino Aldamiz and Jose Aldamiz individually
and as commercial partnership under the firm name "Aldamiz y Rementeria," he
never took the trouble of charging them for his professional services, thus showing
disinterested and extreme liberality on his part due to friendship and other personal
considerations toward his clients. And it is to be observed further that even after ten
years of active work in the testate proceedings, when he wanted to close the same
and it was then time for him to demand payment for his services, he showed no
interest in demanding preferring to leave the matter to the future negotiation or
understanding with the interested parties. And when the amount of his fees was
fixed by the court and Gavino Aldamiz asked him for a substantial reduction, he
answered that it was not he who had fixed the amount but the court, and advised
his client to file a motion for reconsideration, with the assurance that he would offer
no objection to any reduction in amount and to any extension of the time for paying
what might be granted by the court. And again, when Gavino Aldamiz paid him
P5,000 on account, respondent attorney told him that he would be satisfied with
any additional amount that Gavino might later desire to pay him. Only subsequent
occurrences which proved distasteful to the parties, led them to take steps which
culminated in the filing of the instant civil action.
At the time respondent's evidence was submitted to the court, the interested parties
who were residing in the Philippines were Gavino Aldamiz and his brother Jose
Aldamiz. The others were then residing in Spain. No written claim had ever been
filed for respondent's fees, and the interested parties had not been notified thereof
nor of the hearing, not even Gavino Aldamiz who did not know when he was called
to testify that he would testify in connection with respondent's fees. The Court, after
considering the whole evidence presented, issued its order of January 21, 1947,
awarding respondent Attorney Luna, in payment of his professional services, an
aggregate sum of P28,000 in the following manner:
1. For the institution, preparation of the pleadings in the voluminous
probate case, allowance of the will, project of partition and the final closing of this
proceeding, P15,000;
2. For the registration of a parcel of land of seventy-eight hectares in favor
of the testate, P5,000;
3. For three naturalization cases at the rate of P1,000 each, P3,000;
and
4. For services rendered in the deduction of inheritance tax from P28,000
to P433.40 P5,000.
The Court ordered payment of these amounts within thirty days. Petitioner Gavino
Aldamiz received copy of this order on February 21,1948. Out of the total amount
of P28,000, petitioner was able to pay P5,000 only, and upon his failure to pay the
balance of P23,000 after several demands made upon him by respondent attorney,
the latter on April 17, 1948, filed an ex-parte motion for execution which was
granted by the respondent Court on April 19,1948. Pursuant to the order of
execution on two parcels of land belonging, not to the testate estate of Santiago
Rementeria y Aldamizcogeascoa, but to the commercial partnership "Aldamiz y
Rementeria" with a total area of three hundred fifty seven(357) hectares, more or
less, assessed at one hundred eighty-two thousand, three hundred and sixty pesos
(P182,360), which was sold at a public auction on July 20,1948, in favor of
respondent attorney for only twenty thousand pesos(P20,000). This sale was made
after preliminary injunction had been issued by this court in the instant case.
We believe and so hold that the order of the respondent court issued on January
21,1948, fixing the amount of respondent attorney's fees is null and void. The
correct procedure for the collection of attorney's fees, is for the counsel to request
the administrator to make payment and file an actin against him in his personal
capacity and not as an administrator should he fail to pay (Palileo vs. Mendoza,
Page 13
On May 27, 1972, respondent Lucina Samonte and Trinidad Samonte brought an
action before the Court of First Instance of Rizal (now RTC) docketed as Case No.
C-2442, for the annulment of the final judgment rendered by the trial court in Cavite
in Case No. TM-223, alleging the following matters: that they did not authorize
anyone including Atty. Danilo Pine to file an answer in their behalf as defendants in
Case No. TM 223, and that the filing of the petition for certiorari with the Court of
Appeals to annul the writ of execution in the same case was without their
knowledge and participation.
Petitioners' motion to dismiss the action was denied by the CFI of Rizal. Thus, the
instant petition was filed.
The issue to be resolved in this case is whether or not the Court of First Instance of
Rizal (now RTC) committed grave abuse of discretion or acted without jurisdiction
in denying the petitioners' motion to dismiss the action for annulment of the final
and executory judgment rendered by the CFI of Cavite.
The applicable law is Republic Act No. 296, as amended, otherwise known as "The
Judiciary Act of 1948," which was the law in force when the disputed action for
annulment was filed on May 27, 1972 in the CFI of Rizal. This is based on the
principle that the facts alleged in the complaint and the law in force at the time of
commencement of action determine the jurisdiction of a court (Lum Bing v. Ibanez
92 Phil. 799; Rodriguez v. Pecson, 92 Phil. 172; Salao v. Crisostomo, No. L-29146,
August 5, 1985, 138 SCRA 17; Tolentino v. Social Security Commission No. L-
28870, September 6, 1985, 138 SCRA 428; Philippine Overseas Drilling, etc. v.
Minister of Labor, G.R. No. 55703, November 27, 1986, 146 SCRA 79).
Section 44(a) of the Revised Judiciary Act of 1948 then vested original jurisdiction
in the Courts of First Instance over all civil actions in which the subject of the
litigation is not capable of pecuniary estimation and an action for the annulment of
a judgment and an order of a court of justice belongs to this category (Vda. de
Ursua v. Pelayo, 107 Phil. 622). A court of first instance or a branch thereof has the
authority and the jurisdiction as provided for by law to annul a final and executory
judgment rendered by another court of first instance or by another branch of the
same court. This was the ruling laid down in the cases of (Dulap v. Court of
Appeals, No. L-28306, December 18, 1971, 42 SCRA 537; Gianan v. Imperial, No.
L-37963, February 28, 1974, 55 SCRA 755 and Francisco v. Aquino, Nos. L-33235-
36, July 29, 1976, 72 SCRA 149 which overturned the contrary rulings in Mas v.
Dumara-og No. L-16252, September 29,1964,12 SCRA 34; J.M. Tuason & Co. v.
Torres, et al., No. L-24717, December 4, 1967, 21 SCRA 1169; and Sterling
Investment Corporation, et al. v. Ruiz, etc. et al., No. L-30694, October 31, 1969,
30 SCRA 318). Thus, in an action to annul a final judgment or order, the choice of
which court the action should be filed is not left to the parties; by legal mandate the
action should be filed with the Court of First Instance. The question is in what place
(with what particular court of first instance) the action should be commenced and
tried (Dulap, supra). The issue therefore to be resolved in the instant case is not
one of jurisdiction but of venue-whether it was properly laid in the Court of First
Instance of Rizal for the annulment of the judgment rendered by the CFI of Cavite.
Section 2, Rule 4 of the Rules of the Court fixes the venue in Courts of First
Instance, as follows:
SEC. 2. Venue in Court of First Instance (a) Real actions. Actions affecting
title to, or for recovery of possession, or for partition or condemnation of, or
foreclosure of mortgage on, real property, shall be commenced and tried in the
province where the property or any part thereof lies.
(b) Personal actions. All other actions may be commenced and tried where the
defendant or any of the defendants besides or may be found, or where the plaintiff
or any of the plaintiffs resides, at the election of the plaintiff.
xxx xxx xxx
The complaint filed by respondent with the CFI of Rizal for the annulment of
judgment states that they reside at Caloocan City and that petitioners, as
defendants, reside at Cavite (p. 48, Rollo). Since the action for annulment of
judgment is a personal one, the venue of the action in this case should be either
CFI of Caloocan or CFI of Cavite at the election of the plaintiff. Clearly, venue was
improperly laid in the CFI of Rizal and respondent judge should have dismissed the
action for annulment of judgment on the ground of improper venue.
It is significant to state at this point that although the prevailing rule before B. P. 129
was that courts of first instance and their branches have jurisdiction to annul each
other's final judgments and orders as ruled in Dulap and subsequent cases,
fundamental principles still dictate that the better policy, as a matter of comity or
Respondents maintain that the case for the petitioner is one of pure technicality,
premised upon a supposed failure of the respondent attorney to follow a supposed
procedure. It is said that the amount of P28,000 fixed and allowed by the
respondent court as professional fees of the respondent attorney is not
unconscionable or unreasonable because the entire estate was worth P315,112
and now it is worth about half a million pesos because of many improvements
existing thereon. It appears, however, that due to lack of notice upon the interested
parties mistakes have been committed by but the court which could have been
avoided. For instance, the court awarded fees for services rendered not to the
estate but to the other persons, such as the supposed services in connection with
the petitions for naturalization filed in behalf of Gavino Aldamiz and Jose Aldamiz
and the application for registration of a parcel of land of 78 hectares filed not in
favor of the testate estate but of the partnership "Aldamiz y Rementeria." These
services evidently could not be charged against the estate of Santiago Rementeria.
And furthermore, due to lack of preparation on the part of respondent attorney, it
appears that while he was testifying to his professional services he was apparently
not sure of being able to recite them all for at the end of his testimony he said: "Son
los servicios que me acuerdo ahora. . . ." Had he been afforded ample time to
recollect the nature and details of his long and continuos services, considering his
high professional standing as recited by the respondent court in its disputed order
and the increased value of the estate then, perhaps, a more reasonable
compensation would have been fixed, or at least, the court could have rendered a
decision with full knowledge of all the facts and with justice to all the parties
concerned.
For all the foregoing, the order of the respondent court of January 21,1947, and all
the subsequent orders implementing it, particularly the order of execution issued by
the court on April 19, 1948, and the sale made by the sheriff on July 20,1948, in
favor of respondent attorney, are null and void and are hereby set aside, with costs
against respondents. It is so ordered.
TOPIC: WITHDRAWAL OF LAWYERS SERVICES
MERCADO vs UBAY
MEDIALDEA, J.:
This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of
Court with a prayer for the issuance of a writ of preliminary injunction. Petitioners
seek to enjoin and restrain respondent judge from further proceeding with Civil
Case No.
C-2442 in the Court of First Instance of Rizal (now Regional Trial Court) on the
ground of lack of jurisdiction to annul a final and executory judgment rendered by
the Court of First Instance of Cavite (now Regional Trial Court) in Civil Case No.
TM-223.
The antecedent facts are as follows:
On May 18, 1966, petitioners filed an action for partition with the Court of First
Instance of Cavite, Branch I, docketed as Civil Case No. TM-223, against Antonio,
Ely and respondents Lucina and Trinidad, all surnamed Samonte and who are
brothers and sisters.
On June 27, 1966, the defendants were served with a copy of the complaint and
summons thru their co-defendant Antonio Samonte who acknowledged receipt
thereof.
On July 11, 1966, all the defendants in the above-numbered case, thru counsel,
Atty. Danilo Pine, filed their answer to the complaint. Later, on January 4,1967, the
said defendants, thru the same counsel, filed their amended answer.
On July 31, 1970, the Court of First Instance of Cavite (now RTC) rendered
judgment in favor of the petitioners and against all the defendants in the civil case,
including private respondents. Since no appeal was made by any of the defendants
from the decision of the trial court, the same became final and executory and the
court issued the corresponding writ of execution.
However, before the writ could be carried out by the provincial sheriff, all the
defendants, thru the same counsel, Atty. Danilo Pine, filed a petition for certiorari
and mandamus with the Court of Appeals seeking to annul the writ of execution
issued by the trial court in Cavite in Case No. TM-223. On July 9, 1971, the Court
of Appeals dismissed the petition for lack of merit.
Page 14

SO ORDERED.
ALBANO vs COLOMA
FERNANDO, J.:
This proceeding for disbarment was filed by complainant Angel Albano against
respondent Perpetua Coloma, a member of the Philippine Bar. In a letter dated
June 20, 1962 addressed to this Court, complainant alleged that during the
Japanese occupation his mother, Delfina Aquino, and he retained the services of
respondent as counsel for them as plaintiffs in Civil Case No. 4147 of the Court of
First Instance of Ilocos Norte. After which came the accusation that after liberation
and long after the courts had been reorganized, respondent failed to expedite the
hearing and termination of the case, as a result of which they had themselves
represented by another lawyer. This notwithstanding, it was claimed that
respondent intervened in the case to collect her attorney's fees. It was then alleged
that during the hearing they were surprised when respondent presented in exhibit a
document showing that they as well as their co-plaintiffs in the case promised to
pay her a contingent fee of 33-/3% of whatever could be recovered whether in
land or damages. A copy of such document was attached to the letter. The more
serious charge was that the signature therein appearing, purportedly that of the
complainant, and the writing after the name of his mother were not made by them.
It was further stated that the Honorable Delfin B. Flores, then Judge of the Court of
First Instance of Ilocos Norte, submitted the document in question to the National
Bureau of Investigation (hereinafter referred to as NBI) together with samples of his
genuine signature. A copy of the finding of the NBI was attached, the conclusion
being that the questioned signature "is NOT in the hand of the person whose
sample signatures were received."
Complainant stated that being a poor man, he could hardly pay for the services of a
lawyer to assist him in the disbarment proceedings. He added the information that
respondent Coloma "is a very influential woman in the province of Ilocos Norte" as
she was then a member of the provincial board. The prayer was for the "kind and
generous help regarding this matter in order that Atty. Perpetua Coloma may be
made to stand before the bar of justice and disbarred from the practice of her
profession as a lawyer."
In a resolution dated July 20, 1962, this Court required respondent Perpetua
Coloma to answer the complaint. The answer came in September 4, 1962. There
was a specific denial of the allegation that the complainant was "a victim of
injustice," respondent alleging that the same was "untrue, unfounded and
imaginary." While admitting that her services were contracted by complainant and
his mother and their co-plaintiffs, in Civil Case No. 4147, she stated that there was
a contingent fee of one-third (/3) of whatever land and damages could be obtained
for the plaintiffs. She denied that she did nothing to expedite the hearing and
termination of such civil case as the record would show that she filed "more than
twenty (20) papers and pleadings, went to trial for several days and with the
assistance of her sister, Atty. Oliva D. Coloma, obtained a favorable judgment in the
Court of First Instance for the petitioner and his co-plaintiffs and filed with the
Honorable Court of Appeals a thirty-five (35) page brief, finished after careful,
conscientious and exhaustive study and preparation." She attached a copy of the
favorable decision rendered by Judge Simeon Ramos of November 10, 1948;1 the
decision of the Court of Appeals promulgated on October 13, 1950, confirming the
above favorable decision, which was penned by the then Justice Gutierrez David;2
and the dismissal of a petition for certiorari to review such decision in the resolution
of this Court of January 10, 1951.3 Then came a reference to a decision by the
Court of Appeals in CA-G.R. No. 10563-R, the complainant as one of the plaintiffs
having appealed from an order of the lower court, sustaining her lien upon the
judgment as well as "her share of one-third (/3) of the lands adjudicated" which
according to the lower court however would require that the proper action be filed.
In the opinion of the Court of Appeals penned by Justice Sanchez, now a member
of this Court, an evaluation of her service was made thus:
"Appellee served as plaintiffs' counsel for a period of about seven years. The
record shows that she was diligent in her work. That she had rendered valuable
services cannot be doubted. In fact, the final decision favorable to plaintiffs is
almost wholly the result of her efforts. Literally, she gambled on the success or
failure of the litigation. She was a member of the Bar since 1940. Gauged by the
familiar rule that an attorney shall be entitled to have reasonable compensation for
his services, with a view to the importance of the subject matter of the controversy,
the extent of the services rendered, and the professional standing of the
attorney, . . ., we feel, as did the trial court, that appellee is entitled to one-third of
courteous interaction between courts of first instance and the branches thereof, is
for the annulment cases to be tried by the same court or branch which heard the
main action sought to be annulled (Gianan v. Imperial, supra).itc-asl Moreover,
despite the re-examination by this Court of the old ruling in Mas v. Dumara-og,
supra, recent decisions still uphold its rationale that pursuant to judicial stability, the
doctrine of non-interference should be regarded as highly important in the
administration of justice whereby the judgment of a court of competent jurisdiction
may not be opened, modified or vacated by any court of concurrent jurisdiction
(Ngo Bun Tiong v. Sayo, No. L-45825, June 30, 1988, 163 SCRA 237; Republic v.
Reyes, Nos.
L-30263-65, October 30, 1987; Parco v. Court of Appeals, No. L-33152, January
30, 1982, 111 SCRA 262).
While the foregoing discussion may no longer find any application at this time with
the effectivity of Batas Pambansa, Blg. 129, enacted on August 10, 1981, which
transferred the jurisdiction over actions for annulment of judgment to the Court of
Appeals, it was deemed necessary if only to bring light and settle the existing
confusion and chaos among judges of the different courts of first instance and their
branches concerning the application of the old laws on jurisdiction and venue over
this kind of action. Probably, this confusion was the underlying reason of the
Legislature behind the transfer of jurisdiction over annulment of judgments from the
trial courts to the Court of Appeals under B.P. 129.
Even if We were to disregard, for the sake of argument, the issue on jurisdiction of
and venue in the Court of First Instance of Rizal in the annulment suit, We found,
upon perusal of the records, that no sufficient grounds exist to justify the annulment
of the final judgment of the Cavite court. Certain requisites must be established
before a judgment can be the subject of an action for annulment. A judgment can
be annulled only on two grounds: (a) the judgment is void for want of jurisdiction or
for lack of due process of law, or (b) it has been obtained by fraud (Santiago v.
Ceniza, No. L-17322, June 30, 1962, 5 SCRA 494).
None of the aforementioned grounds was shown to exist to support the annulment
action. The contention of private respondents that they were not served with
summons in Case No. TM-223 in the Cavite court is untenable. In their
memorandum filed with this Court, they admit that they were served with summons
thru their co-defendant Antonio Samonte who acknowledged receipt thereof. The
receipt of summons is shown by the return submitted by the sheriff to the Court of
First Instance of Cavite. Apart from the presumption that the sheriff had regularly
performed his functions, records amply show that all the defendants, including
private respondents had filed their answer in Case No. TM-223 thru counsel, Atty.
Danilo Pine. And when final judgment had been rendered by the CFI of Cavite
against respondents and a writ of execution issued by the trial court, the private
respondents, thru the same counsel, Atty. Pine even instituted a petition for
certiorari and mandamus to enjoin the execution of the judgment of the Cavite
court. Respondents now allege that they have not authorized Atty. Danilo Pine to
appear in their behalf as defendants in Case No. TM-223 or to file the petition for
certiorari with the appellate court. Such allegation is devoid of merit.
An attorney is presumed to be properly authorized to represent any cause in which
he appears, and no written power of attorney is required to authorize him to appear
in court for his client (Sec. 21, Rule 138, Rules of Court). The fact that private
respondents had not personally appeared in the hearings of Case TM-223 in the
trial court is immaterial. The filing of the answer by and appearance of Atty. Danilo
Pine in their behalf are sufficient to give private respondents standing in court. It is
hard to believe that a counsel who has no personal interest in the case would fight
for and defend a case with persistence and vigor if he had not been authorized or
employed by the party concerned. It is obvious that since the appellate court had
decided adversely against private respondents in their petition for certiorari, the
latter filed the annulment suit for a second chance at preventing petitioners from
enforcing the decision rendered by the Cavite court in favor of the latter.
It is an important fundamental principle in Our judicial system that every litigation
must come to an end. Access to the courts is guaranteed. But there must be a limit
thereto. Once a litigant's rights have been adjudicated in a valid final judgment of a
competent court, he should not be granted an unbridled license to come back for
another try. The prevailing party should not be harassed by subsequent suits. For, if
endless litigations were to be encouraged, unscrupulous litigants will multiply in
number to the detriment of the administration of justice (Ngo Bun Tiong v. Sayo,
supra; Pacquing v. Court of Appeals, G.R. 52498, July 19, 1982, 115 SCRA 117).
ACCORDINGLY, the petition is GRANTED and the respondent judge of the Court
of First Instance of Rizal (now Regional Trial Court) is ORDERED to dismiss Civil
Case No. C-2442. The temporary restraining order issued by this Court is hereby
made permanent.
Page 15
case on the annexes to her answer and the transcript of the trial of the proceedings
on the recording of her attorney's lien in Civil Case No. 4147. . . ."7
The facts as found by the Solicitor General in so far as the services of respondent
as counsel for the complainant and his mother were concerned reveal the utmost
diligence and conscientiousness on her part. What she said in her answer was
sustained in all respects.
The express finding was then made by the Solicitor General that the question of the
genuineness and due execution to pay respondent her attorney's fees "had already
been litigated by the parties in the course of the proceedings for the recording and
enforcement of the attorney's lien of respondent in Civil Case No. 4147 of the Court
of First Instance of Ilocos Norte; that the plaintiffs in said case (one of whom is the
complainant in this case) denied the genuineness and due execution of said
agreement Exh. 'A'; that they had full opportunity to present evidence in support of
their said contention; that after hearing, the trial court found said document to be
genuine (pp. 43-48, rec.); and that on appeal to the Court of Appeals, said court
likewise found said document genuine . . ."8
On this point an extended excerpt from the decision of the Court of Appeals, the
opinion being penned as noted by Justice Sanchez, was quoted. Thus:
1. Exhibit A, the written contract of professional services, shows that
appellee, as plaintiffs' attorney, is entitled to one-third of all the lands and damages
which may be awarded plaintiffs; otherwise, if the case is lost, then appellee is not
entitled to compensation.
That Exhibit A was duly executed is a proven fact. A witness to that document,
namely, Sergio Manuel, testified that the cross after the name of Delfina Aquino
was placed by her and that the signature of Angel Albano, one of the plaintiffs, is
the genuine signature of the said Angel Albano. It is true that on the witness stand
Delfina Aquino denied that she placed a cross after the typewritten words "Delfina
Aquino" in Exhibit A, and that Angel Albano likewise denied his signature therein.
Suffice it to say that this negative testimony will not prevail over the positive
testimony of appellee and her witness aforesaid. People vs. Bueno, 41 Phil. 447,
452; People vs. Ferrer, 44 O.G., No. 1, pp. 112, 115.
Further, appellee's evidence on this point is not limited merely to Exhibit A. The
record shows that previous thereto, there was a verbal agreement regarding said
attorney's fee's. On this point, appellee finds corroboration in the testimony of
Rosario Lagasca, a blood relation of plaintiff and Silvina Guillermo.
Plaintiffs' evidence that in 1955 appellee undertook to take up the case of plaintiffs
for a stipulated contingent fee of P2,000.00 does not merit serious consideration. It
does not seem probable that appellee would take the case on a win-or-lose basis,
i.e., for the sum of P2,000.00 in case the litigation is won and nothing in case of
loss, because at that time P2,000.00 was worth only a few gantas of rice. No
lawyer in his right mind would accept such a miserable fee.
The following testimony of Felicidad Albano, one of the plaintiffs, given in an
obviously unguarded moment, stripped plaintiffs naked of the pretense that there
was no such contract for one-third share as fees:
"Q Did you not authorize your brother, Angel Albano, or your mother, to give
one-third (1/3) of all the properties and damages?
"A We authorized them." Tr., p. 8, Galapon.
The court below, therefore, is correct in declaring that, after weighing and
considering the evidence of both parties, Exhibit A is genuine. (pp. 61- 62, rec.)9
The Solicitor General thus concluded that the finding of the Court of First Instance
of Ilocos Norte, and of the Court of Appeals that the questioned document "is
genuine, is now res judicata and bars complainant Angel Albano (one of the
plaintiffs in Civil Case No. 4147) from raising said question anew in these
disbarment proceedings. As repeatedly held, the fundamental principle of res
judicata applied to all cases and proceedings, in whatever form they may be
(Brillantes vs. Castro, L-9223, June 30, 1956, 99 Phil. 497; 60 C.J.S. 31, 267), and
a party can not escape the bar of a judgment against him in a new suit on the same
cause of action by varying the form of his action or adopting a different method of
presenting his cage (Wensel v. Surigao Consolidated Mining Inc., 57 O.G. 6958;
Vda. de Padilla vs. Paterno, G.R. No. L-8748, Dec. 26, 1961; 50 C. J., S. 98)."10
It was noted further that there was no oral testimony as to the alleged falsification,
except the report of the NBI, lacking in persuasive force in that it failed to state the
all the lands and damages recoverable by plaintiffs under the judgment of the Court
below."
She likewise denied that she could have been removed for her failure to comply
with her obligations as counsel as she served "faithfully, efficiently, continuously
and to the best of her knowledge and capacity." Her dismissal then, according to
her, "was made without cause and without the consent of herein respondent and
only on June 18, 1951, when the undersigned had already won the case for them in
the Court of First Instance and in the Court of Appeals." In view of the failure of the
new lawyers retained to be at times available in the Court of First Instance of Ilocos
Norte and as pleadings by opposing counsel were still sent to her and out of loyalty
to her former clients she continued "to render professional legal services to
complainant and his mother." Then came the allegation "that after the case was
won in the trial court and in the Court of Appeals, complainant and his co-plaintiffs
stopped seeing the undersigned and even disowned their contract with her in the
trial of [her] petition to record attorney's lien which was granted by the trial court
and affirmed by the Court of Appeals." Copies of the decisions of the trial court and
the Court of Appeals, were submitted together with the answer.4 She characterized
as "false and unjust" the averment of complainant "that the latter and his mother
did not sign Annex 'A' because they really signed the instrument in the presence of
attesting witnesses who testified to and confirmed the signing of the same, which
fact (of signing) was found and confirmed by the trial court after and affirmed by the
Court of Appeals, . . . ."
Then came the denial of the allegation of complainant that due to the seriousness
of the charge, Judge Delfin B. Flores submitted the alleged falsified document to
the NBI for examination, the truth being that it was complainant who did so. She
likewise "specifically denies the authenticity and veracity of the alleged findings of
the National Bureau of Investigation on Annex 'A' because the signatures therein
are genuine and have been found to be so by the trial and appellate courts after
hearing the testimony of the instrumental witnesses and comparing the signatures
in Annex 'A' with signatures admitted to be genuine by the complainant as well as
upon the affirmation of complainant's sister and a co-plaintiff in Civil Case No.
4147." She then referred to a rule which she considered well-settled in this
jurisdiction that a question of whether or not a given document is genuine falls
within the general knowledge and competence of a judge who may inquire into its
authenticity, the testimony of instrumental witnesses sufficing, without the court
being bound even by real experts. Nor could she agree that the complainant was a
poor man and could hardly afford the services of a lawyer because thru her efforts,
he and his co-plaintiffs were richer "by about P100,000.00 (P85,000.00 in realty
and P15,000.00 in cash as damages) by winning Civil Case No. 4147 for them"
notwithstanding, which ingratitude had been her reward. Respondent also denied
the insinuation that she was using her influence as a board member. She stated
that from 1944 to 1951, when she rendered her services for complainant, she was
in private life, not having been elected to the provincial board until 1959.
She concluded by saying that "during her practice of law for more than twenty (20)
years [she] has strictly adhered to the ethics of the profession and has always been
guided by the principles of justice, fairness and respect for individual rights and that
as a public official, [she] has never used her influence to corrupt public servants or
ordinary citizens, and all the people of Ilocos Norte well know that complainant has
no sense of justice, no integrity to preserve, no honor to treasure and no future to
build. On the other hand, the people of said province have faithfully supported [her]
in her aspirations, first as councilor and then as board member with overwhelming
majorities. Said support speaks of vindication and means full faith and credit to
[her] integrity, ability and honesty." She further submitted as affirmative defenses
the cause of action being barred by (1) prior judgment and (2) by the statute of
limitations. She prayed for the dismissal of the complaint against her.
The matter was referred to the Solicitor General for investigation, report and
recommendation in a resolution of this Court dated September 7, 1962. On
September 12, 1967, the report and recommendation of the Solicitor General was
submitted. He asked "that this case be dismissed." We grant such a plea.
In his report, the Solicitor General noted that in the investigation conducted on his
behalf by the provincial fiscal of Ilocos Norte, "only the complainant appeared."5 No
evidence was introduced by him other than the NBI report on the alleged falsified
signatures. He manifested that all his evidence could be found in the records of
Civil Case No. 4147 of the Court of First Instance of Ilocos Norte.6 Respondent on
her part, according to the Solicitor General, "merely filed a manifestation to the
effect that the contract for attorney's fees in question had already been declared
genuine and authentic by the Court of First Instance of Ilocos Norte, the Court of
Appeals, and this Honorable Court, in their respective decisions, copies of which
were attached to her answer; that said Contract was signed by petitioner and the
instrumental witnesses thereto in her presence; and that she was submitting the
Page 16
Counsel, any counsel, who is worthy of his hire, is entitled to be fully recompensed
for his services. With his capital consisting solely of his brains and with his skill,
acquired at tremendous cost not only in money but in the expenditure of time and
energy, he is entitled to the protection of any judicial tribunal against any attempt on
the part of a client to escape payment of his fees. It is indeed ironic if after putting
forth the best that is in him to secure justice for the party he represents, he himself
would not get his due. Such an eventuality this Court is determined to avoid. It
views with disapproval any and every effort of those benefited by counsel's
services to deprive him of his hard-earned honorarium. Such an attitude deserves
condemnation.
There is this additional point to consider. As Cardozo aptly observed: "Reputation
[in the legal profession] is a plant of tender growth, and its bloom, once lost, is not
easily restored."14 This Court, certainly is not averse to having such a risk
minimized. Where, as in this case, the good name of counsel was traduced by an
accusation made in reckless disregard of the truth, an action prompted by base
ingratitude, the severest censure is called for.
Certainly, this is not to say that if a case were presented showing nonfeasance or
malfeasance on the part of a lawyer, appropriate disciplinary action would not be
taken. This is not such a case however. Respondent, as has been so clearly
shown, was in no wise culpable; there is no occasion for the corrective power of
this Court coming into play.
WHEREFORE, the charge against respondent Perpetua Coloma, member of the
Philippine Bar, is hereby dismissed.
reason or basis for its conclusion. The observation of the Solicitor General here
made is both pertinent and relevant: "The mere conclusion in the aforesaid NBI
report that the signature of complainant Angel Albano on the document Exh. A was
not written in the same hand that wrote the genuine specimens of his signature,
without any reason or reasons supporting it, is, therefore, of little or no value in
evidence and consequently, it cannot support the present charge of falsification
against respondent, apart from the fact that, as already stated, it is inadmissible on
the ground of estoppel by judgment."11 On the reasonableness of the contingent
fee collected by respondent, the Solicitor General adopted the same view found in
the decision of the Court of Appeals, already referred to being part of respondent's
answer, that such indeed was the case.
The Solicitor General could thus rightfully assert that if there was anyone guilty of
bad faith in this case "it is complainant and his co-plaintiffs in Civil Case No. 4147
who, after benefiting from the valuable services of respondent in said case, tried to
renege on their agreement for the payment of the latter's contingent attorney's fees
by dismissing her as their counsel after she had already won for them said case in
the trial court and the Court of Appeals, and later, by attempting to impugn the
authenticity and genuineness of their written agreement for the payment of
attorney's fees, . . . ."12
He was of the opinion then that even if for purposes of said case the findings in
judicial cases could not be considered binding "it is safe to conclude, from a review
of the evidence in said court proceedings taken together with the evidence before
us in this case, that respondent may be exonerated herein."13 With such a
conclusion of the Solicitor General, this Court, to repeat, is in full agreement.
Page 17