LEGAL ETHICS Canon 20: ATTORNEYS FEES Prepared by: Michael Joseph Nogoy, JD 1 CASE No.

127 Canon 20 Attorneys Fees A lawyer shall charge only fair and reasonable fees. Rules of Court: Rule 138, Sections 24 and 32 Section 24 Compensation of attorneys; agreement as to fees An attorney shall be entitled to have and recover from his clients no more than a 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. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable and unreasonable. Section 32 Compensation for attorneys de oficio Subject to availability of funds as may be provided by law the co urt may, in its discretion, order an attorney employed as counsel de oficio to be compensated in such sum as the court may fix in accordance with Section 24 of this rule. Whenever such compensation is allowed, it shall not be less than thirty pesos (P30) in any case, nor more than the following amounts: (1) Fifty pesos (P50) in light felonies; (2) One hundred pesos (P100) in less grave felonies; (3) Two hundred pesos (P200) in grave felonies other than capital offenses; (4) Five hundred pesos (P500) in capital offenses. [G.R. No. 86100-03 January 23, 1990] METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. THE HONORABLE COURT OF APPEALS and ARTURO ALAFRIZ and ASSOCIATES, respondent. PONENTE: REGALADO, J.: NATURE: Review on certiorari annul the decision of Court of Appeals ordering Metrobank to pay Arturo Alafriz and Associates P936,000.00 as attorneys fees on the basis of quantum meruit. PROCEDURAL FACTS: Arturo A. Alafriz and Associates (AAA) handled the civil cases of Metrobank from March 1974 to September 1983. o All the cases were declaration of nullity of certain deeds of sale, with damages.

ANTECEDENT FACTS: Celedonio Javier bought 7 parcels of land owned by Eustaquio Alejandro, et al., with a total area of about 10 hectares. o Properties were mortgaged by Javier with Metrobank to secure a loan obligation of one Felix Angelo Bautista and/or International Hotel Corporation. o Javier defaulted. Metrobank foreclosed the properties. o Alejandro, on the other hand, alleging deceit, fraud and misrepresentation committed against him by Javier in the sale of the parcels of land, brought suits against Javier et al., and included Metrobank as defendant therein. o AAAs services were already acquired here. While the case was pending, Metrobank sold the properties to its sister company, Service Leasing Corporation on March 23, 1983 for the purported price of P600,000.00. SLC, on the other hand, sold the property to another company and the cycle went on. o Metrobank, no longer the possessor of the properties, moved for substitution of party on July 28, 1983. o AAA had no knowledge about this. AAA only knew when Metrobank filed its motion. Thus, they filed on August 16, 1983 a verified motion to enter in the records of the aforesaid civil cases its charging lien, pursuant to Section 37, Rule 138 of the Rules of Court, equivalent to twenty-five percent (25%) of the actual and current market values of the litigated properties as its attorney's fees. o This was granted by the TC because of Metrobanks failure to appear. o The Alejandro case was subsequently dismissed as well. On May 28,1984, AAA filed a motion to fix its attorney's fees, based on quantum meruit, which motion precipitated an exchange of arguments between the parties. (dismissal of the Alejandro case, etc.) o Metrobank: paid in full. o AAA: P50,000.00 given by Metrobank could not be considered as full payment but merely a cash advance o Negotiations up to P600,000.00 were even made to evade court litigation but to no avail. CA: Affirmed RTC (sub bullet 3, bullet 2 of AF) ISSUE: Whether or not the legal fees charged by AAA are reasonable. HELD: NO. RATIO DECIDENDI: On the matter of attorney's liens Section 37, Rule 138 provides: . . . 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, from and after the time

when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements. Consequent to such provision, a charging lien, to be enforceable as security for the payment of attorney's fees, requires as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney in favor of his client. A lawyer may enforce his right to fees by filing the necessary petition as an incident in the main action in which his services were rendered when something is due his client in the action from which the fee is to be paid. . In the case at bar, the civil cases below were dismissed upon the initiative of 8 the plaintiffs "in view of the frill satisfaction of their claims." The dismissal order neither provided for any money judgment nor made any monetary award to any litigant, much less in favor of petitioner who was a defendant therein. This being so, private respondent's supposed charging lien is, under our rule, without any legal basis. It is flawed by the fact that there is nothing to generate it and to which it can attach in the same manner as an ordinary lien arises and attaches to real or personal property.

NOTES: Quantum meruit means as much as the lawyer deserves or such amount which his services merit. It is essential for the proper operation of the principle that there is an acceptance of the benefits by one sought to be charged for the services rendered under circumstances as reasonably to notify him that the lawyer performing the task is expecting to be paid compensation therefor. The doctrine of quantum meruit is a device to prevent undue enrichment based on equitable postulate that it is unjust for a person to retain benefit without paying for it. (Agpalo, R. (2010). LEGAL AND JUDICIAL ETHICS. QC: Rex Printing Company, Inc.)

RULING: CA Ruling is REVERSED and SET ASIDE.

LEGAL ETHICS Canon 20: ATTORNEYS FEES Prepared by: Michael Joseph Nogoy, JD 1 CASE No. 128 Canon 20 Attorneys Fees A lawyer shall charge only fair and reasonable fees. Rules of Court: Rule 138, Sections 24 and 32 Section 24 Compensation of attorneys; agreement as to fees An attorney shall be entitled to have and recover from his clients no more than a 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. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable and unreasonable. Section 32 Compensation for attorneys de oficio Subject to availability of funds as may be provided by law the court may, in its discretion, order an attorney employed as counsel de oficio to be compensated in such sum as the court may fix in accordance with Section 24 of this rule. Whenever such compensation is allowed, it shall not be less than thirty pesos (P30) in any case, nor more than the following amounts: (1) Fifty pesos (P50) in light felonies; (2) One hundred pesos (P100) in less grave felonies; (3) Two hundred pesos (P200) in grave felonies other than capital offenses; (4) Five hundred pesos (P500) in capital offenses. [G.R. No. 124074. January 27, 1997] RESEARCH and SERVICES REALTY, INC., petitioner, vs. COURT OF APPEALS and MANUEL S. FONACIER, JR., respondent. PONENTE: DAVIDE, JR., J.: NATURE: Review on certiorari questions the propriety of the award for, and the reasonableness of the amount of, attorney's fees granted in favor of the Atty. Fonacier. FACTS: On 3 November 1969, RSRI entered into a Joint Venture Agreement (JVA) with Jose, Fidel, and Antonia Carreon. Under this: o RSRI undertook to develop, subdivide, administer, and promote the sale of the parcels of land owned by the Carreons.

The proceeds of the sale of the lots were to be paid to PNB for the landowner's mortgage obligation, and o the net profits to be shared by the contracting parties on a 50-50 basis. On 4 April 1983, the Carreons and Patricio C. Sarile instituted before the RTC of Makati City an action against RSRI for rescission of the JVA. Their prayer: o writ of preliminary injunction be issued to enjoin RSRI from selling the lots subject of the agreement and that after hearing, o the writ be made permanent; o the agreement be rescinded; o and the petitioner be ordered to pay the PNB the stipulated 15% per annum of the outstanding obligation and to pay the plaintiffs attorney's fees, exemplary damages, expenses of litigation, and costs of suit. RSRIs Answer (prepared by Atty. Reyes) prayed: o denial of the writ of preliminary injunction, o the dismissal of the complaint, and o payment in its favor of: P10 million by way of actual damages; P5 million by way of return to the petitioner of the amount advanced to the Carreons, payments to the PNB, and cost of the work on the subdivision; P100,000.00 by way of exemplary damages; any and all damages up to the amount of P4,638,420.00 which the petitioner may suffer under the terms of its Performance Bond in favor of the National Housing Authority; P50,000.00 as attorney's fees; and costs of suit. On 9 April 1985, the petitioner engaged the services of private respondent Atty. Manuel S. Fonacier, Jr., where he represented RSRI in the Carreon case. While the case was pending, without the knowledge of Fonacier, RSRI entered into a MOA with Filstream. Under this MOA: o RSRI assigned its rights and obligations under the JVA in favor of Filstream for a consideration of P28 million, payable within twenty-four months. On 31 March 1993, RSRI terminated the legal services of the Atty. Fonacier. Discovering the existence of the MOA, Fonacier filed in the Carreon case an Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien praying, among other things, that the petitioner be ordered to pay him the sum of P700,000.00 as his contingent fee in the case. o RTC: P600,000.00 based on quantum meruit o CA: Affirmed RTC.

ISSUE: Whether or not Atty. Fornacier deserves such payment/the legal fees charged is reasonable.

HELD: NO. RATIO DECIDENDI: RSRI's more important argument in support of the first error is CA's misquotation of the provision in the retainer contract regarding attorney's fees on contingent basis, which RSRI had stressed in its motion for reconsideration. RSRI maintains that under the contract, attorney's fees on contingent basis could only be awarded in collection cases, and Civil Case No. 612 is not a collection case. Hence, CA erred in affirming the award on that basis, while the trial court was correct in applying the principle of quantum meruit. P600,000.00 attorney's fees, whether on contingent basis or quantum meruit, is excessive and unreasonable. Atty. Fonaciers contribution was merely to ask for suspension or postponement of proceedings, nothing more. His services were already terminated immediately. RULING: CA Ruling is REVERSED and SET ASIDE.

NOTES: Quantum meruit means as much as the lawyer deserves or such amount which his services merit. It is essential for the proper operation of the principle that there is an acceptance of the benefits by one sought to be charged for the services rendered under circumstances as reasonably to notify him that the lawyer performing the task is expecting to be paid compensation therefor. The doctrine of quantum meruit is a device to prevent undue enrichment based on equitable postulate that it is unjust for a person to retain benefit without paying for it. (Agpalo, R. (2010). LEGAL AND JUDICIAL ETHICS. QC: Rex Printing Company, Inc.)