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G.R.No.183385

TodayisFriday,August19,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
THIRDDIVISION
G.R.No.183385February13,2009
EVANGELINAMASMUD(assubstitutecomplainantforALEXANDERJ.MASMUD),Petitioner,
vs.
NATIONALLABORRELATIONSCOMMISSION(FirstDivision)andATTY.ROLANDOB.GO,JR.,
Respondents.
RESOLUTION
NACHURA,J.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated October 31, 2007 and the
ResolutiondatedJune6,2008oftheCourtofAppeals(CA)inCAG.R.SPNo.96279.
Thefactsofthecaseareasfollows:
OnJuly9,2003,EvangelinaMasmuds(Evangelina)husband,thelateAlexanderJ.Masmud(Alexander),fileda
complaint3 against First Victory Shipping Services and Angelakos (Hellas) S.A. for nonpayment of permanent
disability benefits, medical expenses, sickness allowance, moral and exemplary damages, and attorneys fees.
AlexanderengagedtheservicesofAtty.RolandoB.Go,Jr.(Atty.Go)ashiscounsel.
In consideration of Atty. Gos legal services, Alexander agreed to pay attorneys fees on a contingent basis, as
follows:twentypercent(20%)oftotalmonetaryclaimsassettledorpaidandanadditionaltenpercent(10%)in
caseofappeal.Itwaslikewiseagreedthatanyawardofattorneysfeesshallpertaintorespondentslawfirmas
compensation.
OnNovember21,2003,theLaborArbiter(LA)renderedaDecisiongrantingthemonetaryclaimsofAlexander.
Thedispositiveportionofthedecision,asquotedintheCADecision,reads:
WHEREFORE, foregoing considered, judgment is rendered finding the [First Victory Shipping Services and
Angelakos(Hellas)S.A.]jointlyandseverallyliabletopay[Alexanders]totalpermanentdisabilitybenefitsinthe
amountofUS$60,000.00andhissicknessallowanceofUS$2,348.00,bothinPhilippinecurrencyattheprevailing
rate of exchange at the time of payment and to pay further the amount of P200,000.00 as moral damages,
P100,000.00 as exemplary damages and attorneys fees equivalent to ten percent (10%) of the total monetary
award.
[Alexanders]claimforpaymentofmedicalexpensesisdismissedforlackofbasis.
SOORDERED.4
Alexanders employer filed an appeal before the National Labor Relations Commission (NLRC). During the
pendencyoftheproceedingsbeforetheNLRC,Alexanderdied.Afterexplainingthetermsofthelawyersfeesto
Evangelina,Atty.Gocausedhersubstitutionascomplainant.OnApril30,2004,theNLRCrenderedaDecision
dismissing the appeal of Alexanders employer. The employer subsequently filed a motion for reconsideration.
TheNLRCdeniedthesameinanOrderdatedOctober26,2004.
On appeal before the CA, the decision of the LA was affirmed with modification. The award of moral and
exemplary damages was deleted.5 Alexanders employers filed a petition for certiorari6 before this Court. On
February6,2006,theCourtissuedaResolutiondismissingthecaseforlackofmerit.
Eventually,thedecisionoftheNLRCbecamefinalandexecutory.Atty.GomovedfortheexecutionoftheNLRC
decision, which was later granted by the LA. The surety bond of the employer was garnished. Upon motion of
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Atty.Go,thesuretycompanydeliveredtotheNLRCCashier,throughtheNLRCSheriff,thecheckamountingto
P3,454,079.20.Thereafter,Atty.GomovedforthereleaseofthesaidamounttoEvangelina.
OnJanuary10,2005,theLAdirectedtheNLRCCashiertoreleasetheamountofP3,454,079.20toEvangelina.
Outofthesaidamount,EvangelinapaidAtty.GothesumofP680,000.00.
Dissatisfied,Atty.GofiledamotiontorecordandenforcetheattorneyslienallegingthatEvangelinarenegedon
theircontingentfeeagreement.EvangelinapaidonlytheamountofP680,000.00,equivalentto20%oftheaward
asattorneysfees,thus,leavingabalanceof10%,plustheawardpertainingtothecounselasattorneysfees.
In response to the motion filed by Atty. Go, Evangelina filed a comment with motion to release the amount
depositedwiththeNLRCCashier.Inhercomment,EvangelinamanifestedthatAtty.Gosclaimforattorneysfees
of40%ofthetotalmonetaryawardwasnullandvoidbasedonArticle111oftheLaborCode.
OnFebruary14,2005,theLAissuedanOrder7grantingAtty.Gosmotion,thefalloofwhichreads:
WHEREFORE,premisesconsidered,andfurtherconsideringthesubstitutecomplainantsinitialpaymentof20%
tomovantcounselofthemonetaryclaimsaspaid,letthebalanceorunpaidtwenty(20%)percentofattorneys
feesduemovantcounsel(ortheamountofP839,587.39)berecordedaslienuponallthemoniesthatmaystill
bepaidtosubstitutecomplainantEvangelinaMasmud.
Accordingly,theNLRCCashierisdirectedtopaymovantcounseltheamountofP677,589.96 which is currently
depositedthereintopartiallysatisfythelien.
SOORDERED.8
EvangelinaquestionedtheFebruary14,2005OrderoftheLAbeforetheNLRC.OnJanuary31,2006,theNLRC
issuedaResolution9dismissingtheappealforlackofmerit.
EvangelinathenelevatedthecasetotheCAviaapetitionforcertiorari.10OnOctober31,2007,theCArendered
aDecision11partiallygrantingthepetition.Thedispositiveportionofthedecisionreads:
WHEREFORE,thepetitionisPARTIALLYGRANTED.TheResolutionsdatedJanuary31,2006andJuly18,2006
areherebyAFFIRMEDwithMODIFICATIONinthattheAttorneysfeesofrespondentAtty.RolandoB.Go,Jr.is
declaredfullycompensatedbytheamountofP1,347,950.11thathehasalreadyreceived.
SOORDERED.12
Evangelinafiledamotionforreconsideration.However,onJune6,2008,theCAissuedaResolution13denying
themotionforreconsiderationforlackofmerit.
Hence,theinstantpetition.
Evangelinapresentedthisissue,viz.:
THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR OF LAW IN ITS
DECISION DATED 31 OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008 INSOFAR AS IT
UPHOLDS RESPONDENT LAWYERS CLAIM OF FORTY PERCENT (40%) OF THE MONETARY
AWARDINALABORCASEASATTORNEYSFEES.14
In effect, petitioner seeks affirmance of her conviction that the legal compensation of a lawyer in a labor
proceedingshouldbebasedonArticle111oftheLaborCode.
There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable
compensationpaidtoalawyerbyhisclientforthelegalservicesrenderedtothelatter.Ontheotherhand,inits
extraordinaryconcept,attorney'sfeesmaybeawardedbythecourtasindemnityfordamagestobepaidbythe
losing party to the prevailing party,15 such that, in any of the cases provided by law where such award can be
made,e.g.,thoseauthorizedinArticle2208oftheCivilCode,theamountispayablenottothelawyerbuttothe
client,unlesstheyhaveagreedthattheawardshallpertaintothelawyerasadditionalcompensationoraspart
thereof.16
Here,weapplytheordinaryconceptofattorneysfees,orthecompensationthatAtty.Goisentitledtoreceivefor
representingEvangelina,insubstitutionofherhusband,beforethelabortribunalsandbeforethecourt.
EvangelinamaintainsthatArticle111oftheLaborCodeisthelawthatshouldgovernAtty.Goscompensationas
hercounselandassiduouslyopposestheiragreedretainercontract.
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Article111ofthesaidCodeprovides:
ART.111.Attorney'sfees.(a)Incasesofunlawfulwithholdingofwagestheculpablepartymaybeassessed
attorney'sfeesequivalenttotenpercentoftheamountofthewagesrecovered.
1 a v v p h i1 .z w +

Contrary to Evangelinas proposition, Article 111 of the Labor Code deals with the extraordinary concept of
attorneysfees.Itregulatestheamountrecoverableasattorney'sfeesinthenatureofdamagessustainedbyand
awardedtotheprevailingparty.Itmaynotbeusedasthestandardinfixingtheamountpayabletothelawyerby
hisclientforthelegalservicesherendered.17
In this regard, Section 24, Rule 138 of the Rules of Court should be observed in determining Atty. Gos
compensation.ThesaidRuleprovides:
SEC.24.Compensationofattorney'sagreementastofees.Anattorneyshallbeentitledtohaveandrecover
from his client 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.Nocourtshallbeboundbytheopinionofattorneysasexpertwitnessesastothepropercompensation,
butmaydisregardsuchtestimonyandbaseitsconclusiononitsownprofessionalknowledge.Awrittencontract
for services shall control the amount to be paid therefor unless found by the court to be unconscionable or
unreasonable.18
TheretainercontractbetweenAtty.GoandEvangelinaprovidesforacontingentfee.Thecontractshallcontrolin
thedeterminationoftheamounttobepaid,unlessfoundbythecourttobeunconscionableorunreasonable.19
Attorney's fees are unconscionable if they affront one's sense of justice, decency or reasonableness.20 The
decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract will not
preclude recovery. It merely justifies the fixing by the court of a reasonable compensation for the lawyer's
services.21
The criteria found in the Code of Professional Responsibility are also to be considered in assessing the proper
amountofcompensationthatalawyershouldreceive. Canon20,Rule20.01ofthesaidCodeprovides:
1 a v v p h 1 .z w +

CANON20ALAWYERSHALLCHARGEONLYFAIRANDREASONABLEFEES.
Rule20.01.Alawyershallbeguidedbythefollowingfactorsindetermininghisfees:
(a)Thetimespentandtheextentoftheservicesrenderedorrequired
(b)Thenoveltyanddifficultyofthequestioninvolved
(c)Theimportanceofthesubjectmatter
(d)Theskilldemanded
(e)Theprobabilityoflosingotheremploymentasaresultofacceptanceoftheprofferedcase
(f)ThecustomarychargesforsimilarservicesandthescheduleoffeesoftheIBPChaptertowhichhe
belongs
(g)Theamountinvolvedinthecontroversyandthebenefitsresultingtotheclientfromtheservice
(h)Thecontingencyorcertaintyofcompensation
(i)Thecharacteroftheemployment,whetheroccasionalorestablishedand
(j)Theprofessionalstandingofthelawyer.
Contingentfeecontractsaresubjecttothesupervisionandclosescrutinyofthecourtinorderthatclientsmaybe
protected from unjust charges.22 The amount of contingent fees agreed upon by the parties is subject to the
stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher
compensationisallowedascontingentfeesbecauseoftheriskthatthelawyermaygetnothingifthesuitfails.23
TheCourtfindsnothingillegalinthecontingentfeecontractbetweenAtty.GoandEvangelinashusband.TheCA
committed no error of law when it awarded the attorneys fees of Atty. Go and allowed him to receive an
equivalentof39%ofthemonetaryaward.
Theissueofthereasonablenessofattorney'sfeesisaquestionoffact.Wellsettledistherulethatconclusions
andfindingsoffactoftheCAareentitledtogreatweightonappealandwillnotbedisturbedexceptforstrongand
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cogentreasonswhichareabsentinthecaseatbench.ThefindingsoftheCA,whicharesupportedbysubstantial
evidence,arealmostbeyondthepowerofreviewbytheSupremeCourt.24
Considering that Atty. Go successfully represented his client, it is only proper that he should receive adequate
compensationforhisefforts.Evenasweagreewiththereductionoftheawardofattorney'sfeesbytheCA,the
fact that a lawyer plays a vital role in the administration of justice emphasizes the need to secure to him his
honorarium lawfully earned as a means to preserve the decorum and respectability of the legal profession. A
lawyerisasmuchentitledtojudicialprotectionagainstinjusticeorimpositionoffraudonthepartofhisclientas
theclientisagainstabuseonthepartofhiscounsel.Thedutyofthecourtisnotalonetoensurethatalawyer
actsinaproperandlawfulmanner,butalsotoseethatalawyerispaidhisjustfees.Withhiscapitalconsistingof
hisbrainsandwithhisskillacquiredattremendouscostnotonlyinmoneybutinexpenditureoftimeandenergy,
he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape
paymentofhisjustcompensation.Itwouldbeironicifafterputtingforththebestinhimtosecurejusticeforhis
client,hehimselfwouldnotgethisdue.25
WHEREFORE,inviewoftheforegoing,theDecisiondatedOctober31,2007andtheResolutiondatedJune6,
2008oftheCourtofAppealsinCAG.R.SPNo.96279areherebyAFFIRMED.
SOORDERED.
ANTONIOEDUARDOB.NACHURA
AssociateJustice
WECONCUR:
CONSUELOYNARESSANTIAGO
AssociateJustice
Chairperson
MA.ALICIAAUSTRIAMARTINEZ
AssociateJustice

MINITAV.CHICONAZARIO
AssociateJustice

DIOSDADOM.PERALTA
AssociateJustice
ATTESTATION
IattestthattheconclusionsintheaboveResolutionwerereachedinconsultationbeforethecasewasassigned
tothewriteroftheopinionoftheCourtsDivision.
CONSUELOYNARESSANTIAGO
AssociateJustice
Chairperson,ThirdDivision
CERTIFICATION
PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairperson'sAttestation,Icertifythatthe
conclusionsintheaboveResolutionhadbeenreachedinconsultationbeforethecasewasassignedtothewriter
oftheopinionoftheCourtsDivision.
REYNATOS.PUNO
ChiefJustice

Footnotes
1RULESOFCOURT,Rule45.
2PennedbyAssociateJusticePortiaAlioHormachuelos,withAssociateJusticesLucasP.Bersaminand

EstelaM.PerlasBernabe,concurringrollo,pp.1628.
3Entitled,"AlexanderJ.Masmud,substitutedbyEvangelinaR.Masmudv.FirstVictoryShippingServices

andAngelakos(Hellas)S.A.,"anddocketedasNLRCNCRCaseNo.(M)0307172800.
4Rollo,p.18.
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5ThecasewasdocketedasCAG.R.SPNo.88009.
6RULESOFCOURT,Rule65.
7PennedbyLaborArbiterCresencioG.Ramos,Jr.rollo,pp.4043.
8Id.at43.
9Rollo,pp.3137.
10RULESOFCOURT,Rule65.
11Supranote2.
12Rollo,p.27.
13Id.at2930.
14Id.at8.
15Bachv.OngkikoKalawManhit&AcordaLawOffices,G.R.No.160334,September11,2006,501SCRA

419,426.
16TradersRoyalBankEmployeesUnionIndependentv.NLRC,336Phil.705,712(1997).
17TradersRoyalBankEmployeesUnionIndependentv.NLRC,336Phil.705,724(1997).
18Emphasissupplied.
19Rayosv.Hernandez,G.R.No.169079,February12,2007,515SCRA517,530531.
20Roxasv.DeZuzuarregui,Jr.,G.R.Nos.152072&152104,January31,2006,481SCRA258,279.
21Rayosv.Hernandez,G.R.No.169079,February12,2007,515SCRA517,530.
22Id.at529.
23Sesbreov.CourtofAppeals,314Phil.884,893(1995).
24ThefollowingaretheexceptionstotherulethatthefindingsoffactsoftheCAaredeemedconclusive:

(1)Whentheconclusionisafindinggroundedentirelyonspeculation,surmisesandconjectures
(2)Whentheinferencemadeismanifestlymistaken,absurdorimpossible
(3)Wherethereisagraveabuseofdiscretion
(4)Whenthejudgmentisbasedonamisapprehensionoffacts
(5)Whenthefindingsoffactareconflicting
(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the
sameiscontrarytotheadmissionsofbothappellantandappellee
(7)Whenthefindingsarecontrarytothoseofthetrialcourt
(8)Whenthefindingsoffactareconclusionswithoutcitationofspecificevidenceonwhichtheyare
based
(9)Whenthefactssetforthinthepetitionaswellasinthepetitionersmainandreplybriefsarenot
disputedbytherespondentsand
(10) When the findings of fact of the Court of Appeals are premised on the supposed absence of
evidenceandcontradictedbytheevidenceonrecord.(AklanCollege,Inc.v.PerpetuoEnero,Arlyn
Castigador,NuenaSermonandJocelynZolina,G.R.No.178309,January27,2009.)
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25Bachv.OngkikoKalawManhit&AcordaLawOffices,G.R.No.160334,September11,2006,501SCRA

419,434.
TheLawphilProjectArellanoLawFoundation

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