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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, respondents.

Bautista, Picazo, Buyco, Tan & Fider for petitioner.

Arturo A. Alafriz & Associates for and in their own behalf.

REGALADO, J.:

This petition for review on certiorari impugns the decision of the Court of Appeals in
CA-G.R. Nos. 08265-08268 1affirming the order of Branch 168, Regional Trial Court,
National Capital Judicial Region, in Civil Cases Nos. 19123-28, 19136 and 19144,
fixing attorney's fees and directing herein petitioner Metropolitan Bank and Trust
Company (Metrobank, for brevity), as defendant in said civil cases, to pay its
attorneys, herein private respondent Arturo Alafriz and Associates, movant therein,
the amount of P936,000.00 as attorney's fees on a quantum meruit basis.

The records show that from March, 1974 to September, 1983, private respondent
handled the above-mentioned civil cases before the then Court of First Instance of
Pasig (Branches I, II, VI, X, XIII, XIX, XX AND XXIV) in behalf of petitioner. 2 The civil
cases were all for the declaration of nullity of certain deeds of sale, with damages.

The antecedental facts 3 which spawned the filing of said actions are undisputed
and are hereinunder set forth as found by the trial court and adopted substantially
in the decision of respondent court. A certain Celedonio Javier bought seven (7)
parcels of land owned by Eustaquio Alejandro, et al., with a total area of about ten
(10) hectares. These properties were thereafter mortgaged by Javier with the
petitioner to secure a loan obligation of one Felix Angelo Bautista and/or
International Hotel Corporation. The obligors having defaulted, petitioner foreclosed
the mortgages after which certificates of sale were issued by the provincial sheriff in
its favor as purchaser thereof Subsequently, Alejandro, 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 petitioner as defendant therein.

It was during the pendency of these suits that these parcels of land were sold by
petitioner to its sister corporation, Service Leasing Corporation on March 23, 1983
for the purported price of P600,000.00. On the same day, the properties were resold
by the latter to Herby Commercial and Construction Corporation for the purported
price of P2,500,000.00. Three months later, or on June 7, 1983, Herby mortgaged
the same properties with Banco de Oro for P9,200,000.00. The lower court found
that private respondent, did not have knowledge of these transfers and
transactions.

As a consequence of the transfer of said parcels of land to Service Leasing


Corporation, petitioner filed an urgent motion for substitution of party on July 28,
1983. Private respondent, on its part, 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.
Despite due notice, petitioner failed to appear and oppose said motion, as a result
of which the lower court granted the same and ordered the, Register of Deeds of
Rizal to annotate the attorney's liens on the certificates of title of the parcels of
land.

Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid civil cases, which had
been consolidated and were pending before the Regional Trial Court of Pasig, filed a
motion to dismiss their complaints therein, which motion the lower court granted
with prejudice in its order dated September 5, 1983. On December 29, 1983, the
same court ordered the Register of Deeds to annotate the attorney's liens of private
respondent on the derivative titles which cancelled Transfer Certificates of Title Nos.
453093 to 453099 of the original seven (7) parcels of land hereinbefore adverted to.

On May 28,1984, private respondent filed a motion to fix its attorney's fees, based
on quantum meruit, which motion precipitated an exchange of arguments between
the parties. On May 30, 1984, petitioner manifested that it had fully paid private
respondent; the latter, in turn, countered that the amount of P50,000.00 given by
petitioner could not be considered as full payment but merely a cash advance,
including the amount of P14,000.00 paid to it on December 15, 1980. It further
appears that private respondent attempted to arrange a compromise with petitioner
in order to avoid suit, offering a compromise amount of P600,000.00 but the
negotiations were unsuccessful.

Finally, on October 15,1984, the court a quo issued the order assailed on appeal
before respondent court, granting payment of attorney's fees to private respondent,
under the following dispositive portion:

PREMISES CONSIDERED, the motion is hereby granted and the Metropolitan Bank
and Trust Company (METROBANK) and Herby Commercial and Construction
Corporation 4 are hereby ordered to pay the movant Arturo Alafriz and Associates
the amount of P936,000.00 as its proper, just and reasonable attorney's fees in
these cases. 5

On appeal, respondent court affirmed the order of the trial court in its decision
promulgated on February 11, 1988. A motion for reconsideration, dated March 3,
1988, was filed by petitioner but the same was denied in a resolution promulgated
on November 19, 1988, hence the present recourse.
The issues raised and submitted for determination in the present petition may be
formulated thus: (1) whether or not private respondent is entitled to the
enforcement of its charging lien for payment of its attorney's fees; (2) whether or
not a separate civil suit is necessary for the enforcement of such lien and (3)
whether or not private respondent is entitled to twenty-five (25%) of the actual and
current market values of the litigated properties on a quantum meruit basis.

On the first issue, petitioner avers that private respondent has no enforceable
attorney's charging lien in the civil cases before the court below because the
dismissal of the complaints therein were not, in the words of Section 37, Rule 138,
judgments for the payment of money or executions issued in pursuance of such
judgments. 6

We agree with petitioner.

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. 7

In the case at bar, the civil cases below were dismissed upon the initiative of the
plaintiffs "in view of the frill satisfaction of their claims." 8 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.

In point is Morente vs. Firmalino, 9 cited by petitioner in support of its position. In


that case, movant-appellant attorney sought the payment of his fees from his client
who was the defendant in a complaint for injunction which was dismissed by the
trial court after the approval of an agreement entered into by the litigants. This
Court held:

. . . The defendant having suffered no actual damage by virtue of the issuance of a


preliminary injunction, it follows that no sum can be awarded the defendant for
damages. It becomes apparent, too, that no amount having been awarded the
defendant, herein appellant's lien could not be enforced. The appellant, could, by
appropriate action, collect his fees as attorney.

Private respondent would nevertheless insist that the lien attaches to the "proceeds
of a judgment of whatever nature," 10 relying on the case of Bacolod-Murcia Milling
Co. Inc. vs. Henares 11 and some American cases holding that the lien attaches to
the judgment recovered by an attorney and the proceeds in whatever form they
may be. 12

The contention is without merit just as its reliance is misplaced. It is true that there
are some American cases holding that the lien attaches even to properties in
litigation. However, the statutory rules on which they are based and the factual
situations involved therein are neither explained nor may it be said that they are of
continuing validity as to be applicable in this jurisdiction. It cannot be gainsaid that
legal concepts of foreign origin undergo a number of variegations or nuances upon
adoption by other jurisdictions, especially those with variant legal systems.

In fact, the same source from which private respondent culled the American cases it
cited expressly declares that "in the absence of a statute or of a special agreement
providing otherwise, the general rule is that an attorney has no lien on the land of
his client, notwithstanding such attorney has, with respect to the land in question,
successfully prosecuted a suit to establish the title of his client thereto, recovered
title or possession in a suit prosecuted by such client, or defended successfully such
client's right and title against an unjust claim or an unwarranted attack," 13 as is
the situation in the case at bar. This is an inescapable recognition that a contrary
rule obtains in other jurisdictions thereby resulting in doctrinal rulings of converse or
modulated import.

To repeat, since in our jurisdiction the applicable rule provides that a charging lien
attaches only to judgments for money and executions in pursuance of such
judgment, then it must be taken in haec verba. The language of the law is clear and
unequivocal and, therefore, it must be taken to mean exactly what it says, barring
any necessity for elaborate interpretation. 14

Notably, the interpretation, literal as it may appear to be, is not without support in
Philippine case law despite the dearth of cases on all fours with the present case.
In Caina et al. vs. Victoriano, et al., 15 the Court had the occasion to rule that "the
lien of respondent is not of a nature which attaches to the property in litigation but
is at most a personal claim enforceable by a writ of execution." In Ampil vs. Juliano-
Agrava, et al., 16 the Court once again declared that a charging lien "presupposes
that the attorney has secured a favorable money judgment for his client . . ."
Further, in Director of Lands vs. Ababa, et al., 17 we held that "(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."

Even in the Bacolod-Murcia Milling case, which we previously noted as cited by


private respondent, there was an express declaration that "in this jurisdiction, the
lien does not attach to the property in litigation."

Indeed, an attorney may acquire a lien for his compensation upon money due his
client from the adverse party in any action or proceeding in which the attorney is
employed, but such lien does not extend to land which is the subject matter of the
litigation. 18 More specifically, an attorney merely defeating recovery against his
client as a defendant is not entitled to a lien on the property involved in litigation for
fees and the court has no power to fix the fee of an attorney defending the client's
title to property already in the client's
possession. 19

While a client cannot defeat an attorney's right to his charging lien by dismissing
the case, terminating the services of his counsel, waiving his cause or interest in
favor of the adverse party or compromising his action, 20this rule cannot find
application here as the termination of the cases below was not at the instance of
private respondent's client but of the opposing party.

The resolution of the second issue is accordingly subsumed in the preceding


discussion which amply demonstrates that private respondent is not entitled to the
enforcement of its charging lien.

Nonetheless, it bears mention at this juncture that an enforceable charging lien,


duly recorded, is within the jurisdiction of the court trying the main case and this
jurisdiction subsists until the lien is settled. 21 There is certainly no valid reason
why the trial court cannot pass upon a petition to determine attorney's fees if the
rule against multiplicity of suits is to be activated. 22 These decisional rules,
however, apply only where the charging lien is valid and enforceable under the
rules.

On the last issue, the Court refrains from resolving the same so as not to preempt or
interfere with the authority and adjudicative facility of the proper court to hear and
decide the controversy in a proper proceeding which may be brought by private
respondent.

A petition for recovery of attorney's fees, either as a separate civil suit or as an


incident in the main action, has to be prosecuted and the allegations therein
established as any other money claim. The persons who are entitled to or who must
pay attorney's fees have the right to be heard upon the question of their propriety
or amount. 23Hence, the obvious necessity of a hearing is beyond cavil.

Besides, in fixing a reasonable compensation for the services rendered by a lawyer


on the basis of quantum meruit, the elements to be considered are generally (1) the
importance of the subject matter in controversy, (2) the extent of the services
rendered, and (3) the professional standing of the lawyer. 24 These are aside from
the several other considerations laid down by this Court in a number of decisions as
pointed out by respondent court. 25 A determination of all these factors would
indispensably require nothing less than a full-blown trial where private respondent
can adduce evidence to establish its right to lawful attorney's fees and for petitioner
to oppose or refute the same.

Nothing in this decision should, however, be misconstrued as imposing an


unnecessary burden on private respondent in collecting the fees to which it may
rightfully be entitled. But, as in the exercise of any other right conferred by law, the
proper legal remedy should be availed of and the procedural rules duly observed to
forestall and obviate the possibility of abuse or prejudice, or what may be
misunderstood to be such, often to the undeserved discredit of the legal profession.

Law advocacy, it has been stressed, is not capital that yields profits. The returns it
births are simple rewards for a job done or service rendered. It is a calling that,
unlike mercantile pursuits which enjoy a greater deal of freedom from government
interference, is impressed with public interest, for which it is subject to State
regulation. 26

ACCORDINGLY, the instant petition for review is hereby GRANTED and the decision
of respondent Court of Appeals of February 11, 1988 affirming the order of the trial
court is hereby REVERSED and SET ASIDE, without prejudice to such appropriate
proceedings as may be brought by private respondent to establish its right to
attorney's fees and the amount thereof.

SO ORDERED.

A.C. No. 528 October 11, 1967

ANGEL ALBANO, complainant,


vs.
ATTY. PERPETUA COLOMA, respondent.

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 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
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
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.

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.

G.R. No. L-40424 June 30, 1980

R. MARINO CORPUS, petitioner,


vs.
COURT OF APPEALS and JUAN T. DAVID, respondents

MAKASIAR, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals
promulgated on February 14, 1975 in CA-G.R. No. 40583-R, affirming the decision of
the court of Instance of Manila, Branch V. dated september 4, 1967, in Civil Case no.
61802 entitled "Juan T. David,plaintiff, versus R. Mariano Corpus, defendant', for the
recovery of attorneys fees for professional services rendered by the plaintiff, private
respondent herein, to defendant, petitioner herein.

Having been close friends, aside from being membres Civil Liberties Union,
petitioner Corpus intimately calls respondent David by his nickname "Juaning" and
the latter addresses the former simply as "Marino".

The factual setting of this case is stated in the decision of the lower court, thus:

It appears that in March, 1958, the defendant was charged administratively by


several employee of the Central Bank Export Department of which the defendant is
the director. The defendant was represented by Atty. Rosauro Alvarez. Pending the
investigation and effective March 18, 1958, he defendant was suspended from
office. After the investigating committee found the administrative charges to be
without merit, and subsequently recommended the immediate reinstatement of the
defendant, the then Governor of Central Bank, Miguel Cuaderno, Sr., recommended
that the defendant be considered resigned as on the ground that he had lost
confidence in him. The Monetary Board, by a resolution of July 20, 1959, declared
the defendant as resigned as of the date of suspension.

On August 18, 1959, the defendant, thru Atty. Alvarez, filed the Court of First
Instance of Manila a petition for certiorari, mandamus and quo warranto with
preliminary mandatory injuction and damages against Miguel Cuaderno, Sr., the
Central Bank and Mario Marcos who was appointed to the position of the defendant,
said case having been docketed as Civil Case No. 41226 and assigned to Branch VII
presided over by Judge Gregorio T. Lantin. On September 7, 1959, the respondent
filed a motion to dismiss the petition, alleging among other grounds, the failure of
the defendant to exhaust, available administrative remedies (Exh. X). On
September 25, 1959, the defendant, thru Atty. Alvarez, filed his opposition to the
said motion. On March 17, 1960, during the course of the presentation of the
evidence for the petition for a writ of preliminary mandatory injunction, Atty. Alvarez
manifested that the defendant was abandoning his prayer for a writ of preliminary
mandatory injunction and asked for a ruling on the motion to dismiss. On June 14,
1960, Judge Lantin dismissed Civil Case No. 41226 for failure to exhaust she
administrative remedies available to the herein defendant.

On June 24, 1960, Atty. Alverez received a copy of the order of dismissal It was at
this state that the plaintiff entered into the case under circumstances about which
the parties herein have given divergent versions.
According to the plaintiff, six or seven days prior to the expiration of the period for
appeal from the order of dismissal, he chanced to meet the late Rafael Corpus,
father of the defendant, at the Taza de Oro coffee shop. After they talked about the
defendant's having lost his case before Judge Lantin, and knowing that the plaintiff
and the defendant were both members of the Civil Liberties Union, Rafael Corpus
requested the plaintiff to go over the case and further said that he would send his
son, the herein defendant, to the plaintiff to find out what could be done about the
case. The defendant called up the plaintiff the following morning for an
appointment, and the plaintiff agreed to am him in the latter's office. At said
conference, the defendant requested the plaintiff to handle the case because Atty.
Alvarez had already been disenchanted and wanted to give up the case. Although at
first reluctant to handle the case, the plaintiff finally agreed on condition that he
and Atty. Alverez would collaborate in the case.

The defendant's version of how the plaintiff came into the case is as follows:

After the order of dismissal issued by Judge Lantin was published in the newspapers,
the plaintiff sought a conference with the defendant at Taza de Oro, but the
defendant told him that he would rather meet the plaintiff at the Swiss Inn. Even
before the case was dismissed the plaintiff had shown interest in the same by being
present during the hearings of said case in the sala of Judge Lantin When the
plaintiff and the defendant met at the Swiss Inn, the plaintiff handed the defendant
a memorandum prepared by him on how he can secure the reversal of the order of
dismissal by means of a formula stated in said memorandum. During the said
occasion the plaintiff scribbled some notes on a paper napkin (Exhibit 19). On June
28, 1960, the defendant wrote the plaintiff, sending with it a copy of the order of
Judge Lantin dated June 14, 1960 (Exhibit S Inasmuch as said letter, Exhibit S
already mentions the 'memorandum' of the plaintiff, the defendant contends that it
was not six or seven days prior to the expiration of the period of appeal (which
should be on or about July 2 or 3, 1960) but on a date even earlier than June 28,
1960 that the plaintiff and the defendant met together to discuss the latter's case.

Laying aside for the moment the true circumstances under which the plaintiff
started rendering professional services to the defendant, the undisputed evidence
shows that on July 7, 1960, the plaintiff filed a motion for reconsideration of the
order of dismissal under the joint signatures of the plaintiff and Atty. Alverez (Exhibit
B). The plaintiff argued the said motion during the hearing thereof On August 8,
1960, he file a 13-page 'Memorandum of Authorities in support of said motion for
reconsideration (Exhibit C). A 3-page supplemental memorandum of authorities was
filed by the plaintiff on September 6, 1960 (Exhibit D)

On November 15, 1960, Judge Lantin denied the motion for reconsideration. On
November 19, 1960, the plaintiff perfected the appeal from the order of dismissal
dated June 14, 1960. For purposes of said appeal the plaintiff prepared a 232-page
brief and submitted the same before the Supreme Court in Baguio City on April 20,
1961. The plaintiff was the one who orally argued the case before the Supreme
Court. In connection with the trip to Baguio for the said oral argument, the plaintiff
used his car hich broke down and necessitated extensive repairs paid for by the
plaintiff himself.

On March 30, 1962, the Supreme Court promulgated its decision reversing the order
of dismissal and remanding the case for further proceedings. On April 18, 1962,
after the promulgation of the decision of the Supreme Court reversing the dismissal
of the case the defendant wrote the plaintiff the following letter, Exhibit 'Q'. .

xxxxxxxxx

Dear Juaning

Will you please accept the attached check in the amount of TWO THOUSAND
P2,000.00) PESOS for legal services in the handling of L-17860 recently decided by
the Court? I wish I could give more but as yu know we were banking on a SC
decision reinstating me and reimburse my backstage I had been wanting to offer
some token of my appreciation of your legal fight for and in my behalf, and it was
only last week that I received something on account of a pending claim.

Looking forward to a continuation of the case in the lower court, I remain

Sincerely yours, Illegible

xxxxxxxxx

In a reply letter dated April 25, 1962, the plaintiff returned the check, explaining
said act as follows:

April 25, 1962

My dear Marino:

Yesterday, I received your letter of April 18th with its enclosure. I wished thank you
for your kind thoughts, however, please don't take offense if I have to return the
check. I will explain.

When I decided to render professional services in your case, I was motivated by the
value to me of the very intimate relations which you and I have enjoyed during the
past many years. It was nor primarily, for a professional fee.

Although we were not fortunate to have obtained a decision in your case which
should have put an end to it. I feel that we have reason to be jubilant over the
outcome, because, the final favorable outcome of the case seems
certain irrespective of the length of time required to terminate the same.
Your appreciation of the efforts I have invested in your case is enough compensation
therefor, however, when you shall have obtained a decision which would have
finally resolved the case in your favor, remembering me then will make me
happy. In the meantime, you will make me happier by just keeping the check.

Sincerely yours,

JUANING

xxxxxxxxx

When the case was remanded for further proceedings before Judge Lantin, the
evidence for the defendant was presented by Atty. 'Alvarez with the plaintiff
cooperating in the same-'On June 24, 1963, Judge Lantin rendered his decision in
favor of the defendant declaring illegal the resolution of the Monetary Board of July
20, 1959, and ordering the defendant's reinstatement and the payment of his back
salaries and allowances - The respondents in said Civil Case No. 41226 filed a
motion for reconsideration which was opposed by the herein plaintiff. The said
decision was appealed by the respondents, as well as by the herein defendant with
respect to the award of P5, 000. 00 attorney's feed The plaintiff prepared two briefs
for submission to the Court of Appeals one as appellee (Exhibit H) and the other as
appellant (Exhibit H-1). The Court of Appeal however, certified the case to the
Supreme Court in 1964.

On March 31, 1965, the Supreme Court rendered a decision affirming the judgment
of the Court of first Instance of Manila.

On April 19, 1965 the plaintiffs law office made a formal de command upon the
defendant for collection of 50% of the amount recovered by the defendant as back
salaries and other emoluments from the Central Bank (Exhibit N). This letter was
written after the defendant failed to appear at an appointment with the plaintiff so
that they could go together to the Central Bank to claim the possession of the office
to which the defendant was reinstated and after a confrontation in the office of the
plaintiff wherein the plaintiff was remanding 50% of the back salaries and other
emoluments amounting to P203,000.00 recoverable by the defendant. The
defendant demurred to this demand inasmuch as he had plenty of outstanding
obligations and that his tax liability for said back salaries was around P90,000.00,
and that he expected to net only around P10,000.00 after deducting all expenses
and taxes.

On the same date, April 19,1965 the plaintiff wrote the Governor for of Central Bank
requesting that the amount representing the sack salaries of the defendant be
made out in two one in favor of the defendant and the other representing the
professional fees equivalent to 50% of the said back salaries being claimed by the
plaintiff (Exhibit 8). F to obtain the relief from the Governor of Central Bank, the
plaintiff instituted this action before this Court on July 20, 1965 (Emphasis supplied).
As therein defendant, herein petitioner Marino Corpus filed in August 5, 1965 an
answer with counter-claim. On August 30, 1965, private respondent Atty. Juan T.
David, plaintiff therein, filed a reply with answer to the counterclaim of petitioner.

After due trial, the lower court rendered judgment on September 4, 1967, the
dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered, ordering the defendant to pay plaintiff


the sum of P30,000.00 in the concept of professional fees, and to pay the costs (pp.
112-113, CA Record on Appeal p. 54, rec.)

After receipt on September 7, 1967 of a copy of the aforequoted judgment,


petitioner Marino Corpus, defendant therein, filed on October 7, 1967 a notice of
appeal from said judgment to the Court of Appeals. In his appeal, he alleged that
the lower court erred:

1. In not holding that the plaintiff's professional services were offered and rendered
gratuitously;

2. Assuming that plaintiff is entitled to compensation in holding that he was


entitled to attorney's fees in the amount of P30,000.00 when at most he would be
entitled to only P2,500.00;

3. In not dismissing plaintiff's complaint; and

4. In not awarding damages and attorney's fees to the defendant (p. 2, CA Decision,
p. 26, rec.)

Likewise, private respondent Atty. Juan T. David, plaintiff therein, appealed to the
Court of Appeals on October 9, 1967 assigning one error, to wit:

The lower court erred in ordering the defendant to pay the plaintiff only the sum of
P30,000.00 in the concept of attorney's fees (p. 1, CA Decision, p. 25, rec.).

On February 14, 1975, respondent Court of Appeals promulgated its decision


affirming in toto the decision of the lower court, with costs against petitioner Marino
Corpus (Annex A, Petition for Certiorari, p. 25, rec.)

Hence, the instant petition for review on certiorari, petitioner contending that the
respondent Court of Appeals erred in finding that petitioner accepted private
respondent's services "with the understanding of both that he (private respondent)
was to be compensated" in money; and that the fee of private respondent was
contingent (pp. 3 & 5, Petition for Certiorari, pp. 17 & 19, rec.).

On October 1, 1975, the case was deemed submitted for decision (p. 177, rec.),
after the parties filed their respective memoranda.

B
On January 31, 1978, private respondent Atty. Juan T. David filed a petition to
remand the case to the court a quo for execution of the latter's decision in Civil
Case No. 61802, dated September 4, 1967, alleging that said decision is already
deemed affirmed pursuant to Section 11(2), Article X of the New Constitution by
reason of the failure of this Tribunal to decide the case within 18 months. Then on
July 7, 1978, another petition to remand the case to the lower court to execution
was filed by herein private respondent.

Subsequently, private respondent Atty. Juan T. David filed with The court a quo a
motion dated September 13, 1978 for the issuance of a writ of execution of the
lower court's decision in the aforesaid civil case, also invoking Section 11 (2), Article
X of the 1973 Constitution. In an order dated September 19, 1978, the lower court,
through Judge Jose H. Tecson, directed the issuance of a writ of execution. The writ
of execution was issued on October 2, 1978 and a notice of garnishment was also
issued n October 13, 1978 to garnish the bank deposits of herein petitioner Marino
Corpus in the Commercial Bank and Trust Company, Makati Branch.

It appears that on October 13, 1978, herein petitioner filed a motion for
reconsideration of the September 19, 1978 order. Private respondent Atty. Juan T.
David filed on October 19, 1978 an opposition to said motion and herein petitioner
filed a reply on October 30, 1978. The lower court denied said motion for
reconsideration in its over dated November 7, 1978.

It appears also that in a letter dated October 18, 1978, herein petitioner Marino
Corpus requested this Court to inquire into what appears to be an irregularity in the
issuance of the aforesaid garnishment notice to the Commercial Bank and Trust
Company, by virtue of which his bank deposits were garnished and he was
prevented from making withdrawals from his bank account.

In OUR resolution of November 3, 1978, WE required private respondent Atty. Juan T.


David and the Commercial Bank and Trust Company to comment on petitioner's
letter, and for the bank to explain why it did not honor petitioner's withdrawals from
his bank deposits when no garnishment order has been issued by the Supreme
Court. This Court further inquired from the lower court whether it has issued any
garnishment order during the pendency of the present case.

On November 27, 1978, the Commercial Bank and Trust Company filed its comment
which was noted in the Court's resolution of December 4, 1978. In said resolution,
the Court also required Judge Jose H. Tecson to comply with the resolution of
November 3, 1978, inquiring as to whether he had issued any garnishment order,
and to explain why a writ of execution was issued despite the pendency of the
present case before the Supreme Court.

Further, WE required private respondent Atty. Juan T. David Lo explain his failure to
file his comment, and to file the same as directed by the resolution of the Court
dated November 3, 1978. Private respondent's compliance came on December 13,
1978, requesting to be excused from the filing of his comment because herein
petitioner's letter was unverified. Judge Tecson's compliance was filed on December
15, 1978, to which herein petitioner replied on January 11, 1979.

In OUR resolution dated January 3, 1979, WE set aside the order of Judge Jose H.
Tecson dated September 19, 1978, the writ of execution as well as the notice of
garnishment, and required private respondent Atty. Juan T. David to show cause why
he should not be cited for contempt for his failure to file his comment as directed by
the resolution of the Court dated December 4, 1978, and for filing a motion for
execution knowing that the case is pending appeal and review before this Court
Likewise, the Court required Judge Jose H. Tecson to show cause why he should not
be cited for contempt for issuing an order directing the issuance of a writ of
execution and for issuing such writ despite the pendency of the present case in the
Supreme Court.

On January 12, 1979, Judge Jose H. Tecson filed his compliance explanation as
directed by the aforesaid resolution of January 3, 1979, while private respondent
Atty. Juan T. David filed on January 30, 19 79 his compliance and motion for
reconsideration after the Court has granted him an extension of time to file his
compliance.

Private respondent Atty. Juan T. David filed on February 28, 1979, a petition praying
that the merits of his compliance be resolved by the Court en banc. Subsequently,
on March 26, 1979, another petition was filed by herein private respondent asking
the Chief

Justice and the members of the First Division to inhibit themselves from
participating in the determination of the merits of his compliance and for its merits
to be resolved by the Court en banc.

The main thrust of this petition for review is whether or not private respondent Atty.
Juan T. David is entitled to attorney's fees.

Petitioner Marino Corpus contends that respondent David is not entitled to


attorney's fees because there was no contract to that effect. On the other hand,
respondent David contends that the absence of a formal contract for the payment
of the attorney's fees will not negate the payment thereof because the contract
may be express or implied, and there was an implied understanding between the
petitioner and private respondent that the former will pay the latter attorney's fees
when a final decision shall have been rendered in favor of the petitioner reinstating
him to -his former position in the Central Bank and paying his back salaries.

I
WE find respondent David's position meritorious. While there was express
agreement between petitioner Corpus and respondent David as regards attorney's
fees, the facts of the case support the position of respondent David that there was
at least an implied agreement for the payment of attorney's fees.

Petitioner's act of giving the check for P2,000.00 through his aforestated April 18,
1962 letter to respondent David indicates petitioner's commitment to pay the
former attorney's fees, which is stressed by expressing that "I wish I could give
more but as you know we were banking on a SC decision reinstating me and
reimbursing my back salaries This last sentiment constitutes a promise to pay more
upon his reinstatement and payment of his back salaries. Petitioner ended his letter
that he was "looking forward to a continuation of the case in the lower court, ... to
which the certiorari-mandamus-quo warranto case was remanded by the Supreme
Court for further proceedings.

Moreover, respondent David's letter-reply of April 25, 1962 confirms the promise of
petitioner Corpus to pay attorney's fees upon his reinstatement and payment of
back salaries. Said reply states that respondent David decided to be his counsel in
the case because of the value to him of their intimate relationship over the years
and "not, primarily, for a professional fee." It is patent then, that respondent David
agreed to render professional services to petitioner Corpus secondarily for a
professional fee. This is stressed by the last paragraph of said reply which states
that "however, when you shall have obtained a decision which would have finally
resolved the case in your favor, remembering me then will make me happy. In the
meantime, you will make me happier by just keeping the check." Thereafter,
respondent David continued to render legal services to petitioner Corpus, in
collaboration with Atty. Alverez until he and Atty. Alvarez secured the decision
directing petitioner's reinstatement with back salaries, which legal services were
undisputedly accepted by, and benefited petitioner.

Moreover, there is no reason to doubt respondent David's assertion that Don Rafael
Corpus, the late father of petitioner Corpus, requested respondent to help his son,
whose suit for reinstatement was dismissed by the lower court; that pursuant to
such request, respondent conferred in his office with petitioner, who requested
respondent to handle the case as his lawyer, Atty. Alvarez, was already
disenchanted and wanted to give up the case; and that respondent agreed on the
case. It would have been unethical for respondent to even offer his services when
petitioner had a competent counsel in the person of Atty. Alvarez, who has been
teaching political, constitutional and administrative law for over twenty years.

Likewise, it appears that after the Supreme Court affirmed on March 31, 1965 the
order of the lower court reinstating petitioner Corpus with back salaries and
awarding attorney's fees of P5,000.00, respondent David made a written demand on
April 19, 1965 upon petitioner Corpus for the payment of his attorney's fees in an
amount equivalent to 50% of what was paid as back salaries (Exh. N p. 75, Folder of
Exhibits, Civil Case No. 61802). Petitioner Corpus, in his reply dated May 7, 1965 to
the aforesaid written demand, while disagreeing as to the amount of attorney's fees
demanded, did not categorically deny the right of respondent David to attorney's
fees but on the contrary gave the latter the amount of P2,500.00, which is one-half
() of the court-awarded attorney's fees of P5,000.00, thus impliedly admitting the
right of respondent David to attorney's fees (Exh. K, p. 57, Folder of Exhibits, Civil
Case No. 61802).

It is further shown by the records that in the motion filed on March 5, 1975 by
petitioner Corpus before the Court of Appeals for the reconsideration of its decision
the order of the lower court granting P30,000.00 attorney's fee's to respondent
David, he admitted that he was the first to acknowledge that respondent David was
entitled to tion for legal services rendered when he sent the chock for P2,000.00 in
his letter of April 18, 1962, and he is still to compensate the respondent but only to
the extent of P10,000.00 (p. 44, rec.). This admission serves only to further
emphasize the fact that petitioner Corpus was aware all the time that he was liable
to pay attorney's fees to respondent David which is therefore inconsistent with his
position that the services of respondent David were gratuitous, which did not entitle
said respondent to compensation.

It may be advanced that respondent David may be faulted for not reducing the
agreement for attorney's fees with petitioner Corpus in writing. However, this
should be viewed from their special relationship. It appears that both have been
friends for several years and were co-members of the Civil Liberties Union. In
addition, respondent David and petitioner's father, the late Rafael Corpus, were also
close friends. Thus, the absence of an express contract for attorney's fees between
respondent David and petitioner Corpus is no argument against the payment of
attorney's fees, considering their close relationship which signifies mutual trust and
confidence between them.

II

Moreover, the payment of attorney's fees to respondent David may also be justified
by virtue of the innominate contract of facio ut des (I do and you give which is
based on the principle that "no one shall unjustly enrich himself at the expense of
another." innominate contracts have been elevated to a codal provision in the New
Civil Code by providing under Article 1307 that such contracts shall be regulated by
the stipulations of the parties, by the general provisions or principles of obligations
and contracts, by the rules governing the most analogous nominate contracts, and
by the customs of the people. The rationale of this article was stated in the 1903
case of Perez vs. Pomar (2 Phil. 982). In that case, the Court sustained the claim of
plaintiff Perez for payment of services rendered against defendant Pomar despite
the absence of an express contract to that effect, thus:
It does not appear that any written contract was entered into between the parties
for the employment of the plaintiff as interpreter, or that any other innominate
contract was entered into but
whethertheplaintiffsservicesweresolicitedorwhethertheywereoffered to the
defendant for his assistance, inasmuch as these services were accepted and made
use of by the latter, we must consider that there was a tacit and mutual consent as
to the rendition of the services. This gives rise to the obligation upon the person
benefited by the services to make compensation therefor, since the bilateral
obligation to render service as interpreter, on the one hand, and on the other to pay
for the service rendered, is thereby incurred. (Arts. 1088, 1089, and 1262 of the
Civil Code).

xxxxxxxxx

... Whether the service was solicited or offered, the fact remains that Perez rendered
to Pomar services as interpreter. As it does not appear that he did this gratuitously,
the duty is imposed upon the defendant, he having accepted the benefit of the
service, to pay a just compensation therefor, by virtue of the innominate contract of
facio ut des implicitly established.

xxxxxxxxx

... because it is a well-known principle of law that no one should permitted to enrich
himself to the damage of another" (emphasis supplied; see also Tolentino, Civil
Code of the Philippines, p. 388, Vol. IV 119621, citing Estate of Reguera vs. Tandra
81 Phil. 404 [1948]; Arroyo vs. Azur 76 Phil. 493119461; and Perez vs. Pomar. 2 Phil.
682 [1903]).

WE reiterated this rule in Pacific Merchandising Corp. vs. Consolacion Insurance &
Surety Co., Inc. (73 SCRA 564 [1976]) citing the case of Perez v. Pomar, supra thus:

Where one has rendered services to another, and these services are accepted by
the latter, in the absence of proof that the service was rendered gratuitously, it is
but just that he should pay a reasonable remuneration therefor because 'it is a well-
known principle of law, that no one should be permitted to enrich himself to the
damage of another (emphasis supplied).

Likewise, under American law, the same rule obtains (7 CJS 1079; FL Still & Co. v.
Powell, 114 So 375).

III

There was no contract for contingent fee between Corpus and respondent David.
Contingent fees depend on an express contract therefor. Thus, "an attorney is not
entitled to a percentage of the amount recovered by his client in the absence of an
express contract to that effect" (7 C.J.S. 1063 citing Thurston v. Travelers Ins. Co.,
258 N.W. 66, 128 Neb. 141).
Where services were rendered without any agreement whatever as to the amount
or terms of compensation, the attorney is not acting under a contract for a
contingent fee, and a letter by the attorney to the client stating that a certain sum
would be a reasonable amount to charge for his services and adding that a rate of
not less than five percent nor more than ten would be reasonable and customary
does not convert the original agreement into a contract for a contingent fee (7 C.J.S.
1063 citing Fleming v. Phinizy 134 S.E. 814).

While there was no express contract between the parties for the payment of
attorney's fees, the fact remains that respondent David rendered legal services to
petitioner Corpus and therefore as aforestated, is entitled to compensation under
the innominate contract of facio lit des And such being the case, respondent David
is entitled to a reasonable compensation.

IV

In determining a reasonable fee to be paid to respondent David as compensation for


his services, on a quantum meruit basis, it is proper to consider all the facts and
circumstances obtaining in this case particularly the following:

The extent of the services rendered by respondent David should be considered


together with the extent of the services of Petitioner's other counsel, Atty. Rosauro
Alvarez, It is undisputed that Atty. Rosauro Alvarez had rendered legal services as
principal counsel for more shall six (6) years while respondent David has rendered
legal services as collaborating counsel for almost four (4) years. It appears that Atty.
Alvarez started to render legal services after the administrative case was filed on
March 7, 1958 against petitioner Corpus. He represented petitioner Corpus in the
hearing of said case which was conducted from May 5, 1958 to October 8, 1958,
involving 56 sessions, and this resulted in the complete exoneration by the
Investigating Committee of all the charges against the petitioner. It appears further
that after the Monetary Board, in its resolution of July 20, 1959, declared petitioner
Corpus as being considered resigned from the service, Atty. Alvarez instituted on
August 18, 1958 Civil Case No. 41126 in the Court of First Instance of Manila for the
setting aside of the aforestated resolution and for the reinstatement of petitioner
Corpus. Atty. Alvarez actively participated in the proceedings.

On the other hand, respondent David entered his appearance as counsel for
petitioner Corpus sometime after the dismissal on June 14, 1960 of the aforesaid
civil case. From the time he entered his appearance, both he and Atty. Alvarez
rendered legal services to petitioner Corpus in connection with the appeals of the
aforementioned civil case to the Court of Appeals and to the Supreme Court. The
records disclose that in connection with the appeal from the June 14, 1960 order of
dismissal, respondent David prepared and signed pleadings although the same were
made for and on behalf of Atty. Alvarez and himself And it is not far-fetched to
conclude that all appearances were made by both counsels considering that Atty.
Alverez was the principal counsel and respondent David was the collaborating
counsel. Thus, when the case was called for oral argument on April 20, 1961 before
the Supreme Court, respondent David and Atty. Alverez appeared for petitioner
Corpus although it was David who orally argued the case.

When the Supreme Court, in its decision of March 30, 1962, remanded the case to
the lower court for further it was Atty. Alverez who conducted the presentation of
evidence while respondent David assisted him The records also review that
respondent David prepared and signed for Atty. Alverez and himself. certain
pleadings, including a memorandum. Moreover, after the lower court rendered
judgment on June 2 4, 1963 ordering the reinstatement and payment of back
salaries to petitioner Corpus and awarding him P5,000.00 by way of attorney's fees,
both petitioner Corpus and the respondents in said case appealed the judgment. At
that stage, respondent David again prepared and signed for Atty. Alvarez and
himself, the necessary pleadings, including two appeal briefs. And in addition, he
made oral arguments in the hearings of motions filed in the lower court before the
records of the case were forwarded to the appellate court. Furthermore, while it
appears that it was Atty. Alvarez who laid down the basic theory and foundation of
the case of petitioner Corpus in the administrative case and later in the civil case,
respondent David also advanced legal propositions. Petitioner Corpus contends that
said legal propositions were invariably rejected by the courts. This is, however, of no
moment because the fact remains that respondent David faithfully rendered legal
services for the success of petitioner's case.

The benefits secured for petitioner Corpus may also be considered in ascertaining
what should be the compensation of respondent David. It cannot be denied that
both Atty. Alvarez and respondent David were instrumental in obtaining substantial
benefits for petitioner Corpus which consisted primarily of his reinstatement,
recovery of back salaries and the vindication of his honor and reputation. But, note
should also be taken of the fact that respondent David came at the crucial stage
when the case of petitioner Corpus was dismissed by the lower court.

Atty. Rosauro Alvarez admittedly was paid by petitioner Corpus the sum of
P20,000.00 or at most P22,500.00 (T.s.n., Jan. 11, 1967, pp. 34-35; T.s.n., Feb. 10,
1967, pp. 48-49). On the other hand, petitioner Corpus, after WE suggested on
August 15, 1975 that they settle the case amicably has, in his September 15, 1975
pleading filed before this Court (p. 166, rec.), manifested his willingness to pay
P10,000.00 for the services of respondent David. However, respondent David has
not manifested his intention to accept the offer.

In his complaint in the instant case, he asked for P75,000.00 as his attorney's fees.
The records reveal that petitioner Corpus actually received only P150,158.50 as
back salaries and emoluments after deducting taxes as well as retirement and life
insurance premiums due to the GSIS. The amount thus claimed by respondent
David represents 50% of the amount actually received by petitioner Corpus. The
lower court, however, awarded only P30,000.00 and it was affirmed by the Court of
Appeals.

Considering the aforestated circumstances, WE are of the opinion that the


reasonable compensation of respondent David should be P20,000.00.

WE find private respondent Juan T. David and Judge Jose H. Tecson, Presiding Judge
of the Court of First Instance of Manila, Branch V, guilty of contempt of court.

Respondent David filed on or about September 13, 1978 a motion with the court a
quo for the issuance of a writ of execution to enforce its decision in Civil Case No
61802, subject of the present petition, knowing fully well that it was then still
pending appeal before this Court. In addition, no certification that the aforesaid
decision is already deemed affirmed had as yet been issued by the Chief Justice
pursuant to Section 11, paragraph 2, Article X of the New Constitution; because
respondent David's petitions filed with the Supreme Court on January 31, 1978 and
on July 7, 1978 to remand the case to the trial court for execution and for the
issuance of such certification had not yet been acted upon as the same were still
pending consideration by this Court. In fact, this Court has not as of this time made
any pronouncement on the aforesaid provision of the New Constitution.

This act of respondent David constitutes disrespect to, as well as disregard of, the
authority of this Court as the final arbiter of all cases duly appealed to it, especially
constitutional questions. It must be emphasized that as a member of the Philippine
Bar he is required "to observe and maintain the respect due to the court of justice
and judicial officers" (Section 20 (b), 138 of the Revised Rules of Court). Likewise,
Canon 1 of. the Canons of Professional Ethic expressly provide that: "It is the duty of
the lawyer to maintain towards the Courts a respectful attitude, not for the sake of
the temporary incumbent of the judgement office, but for the maintenance of its
supreme importance." And this Court had stressed that "the duty of an attorney to
the courts 'can only be maintained by rendering no service involving any disrespect
to the judicial office which he is bound to uphold'" (Rheem of the Philippines v.
Ferrer, 20 SCRA 441, 444 [1967] citing the case of Lualhati v. Albert, 67 Phil. 86, 92
[1932]).

Moreover, this Court takes judicial notice of the fact that herein respondent David,
in the previous case of Integrated Construction Services, Inc. and Engineering
Construction, Inc. v. Relova (65 SCRA 638 [1975]), had sent letters addressed to the
then Chief Justice Querube C. Makalintal and later to the late Chief Justice Fred Ruiz
Castro, requesting for the issuance of certification on the basis of the
aforementioned provision of the New Constitution which were not given due
consideration. And knowing this, respondent David should have been more prudent
and cautious in g with the court a quo any motion for execution.
Furthermore, there was even a taint of arrogance and defiance on the part of
respondent David in not filing his comment to the letter- complaint dated October
18, 1978 of petitioner Corpus, as required by this Court in its November 3, 1978 and
December 4,1978 resolutions which were duly received by him, and instead, he sent
on December 13, 1978 a letter requesting to be excused from the filing of his
comment on the lame excuse that petitioner's letter-complaint was not verified.

On the part of Judge Jose H. Tecson, his presumptuous and precipitate act of
granting the motion for execution of dent David likewise constitutes disrespect to,
as well as of, the authority of this Court because he know for a that the case was
still pending apply as the had not yet been remanded to it and that no certification
has been issued by this Court. As a judicial officer, Judge Tecson is charged with the
knowledge of the fact that this Court has yet to make a definite pronouncement on
Section 11, paragraph 2, Article X of the New Constitution. Judge Tecson should
know that only the Supreme Court can authoritatively interpret Section 11 (2) of
Article X of the 1973 Constitution. Yet, Judge Tecson assumed the role of the Highest
Court of the Land. He should be reminded of what Justice Laurel speaking for the
Court, has said in People v. Vera (65 Phil 56, 82 [1937]):

A becoming modesty of inferior courts demands conscious realization of the position


that they occupy in the interrelation and operation of the integrated judged system
of the nation.

It may also be added that the improvident act of respondent David in firing the
motion for execution and the precipitate act of Judge Tecson in issuing the writ of
execution are intriguing as they invite suspicion that there was connivance between
the two. Respondent David would seem to imply that his claim for attorney's fees
should be given preference over the other cams now pending in this Court.
Certainly, such should not be the case because there are cases which by their
nature require immediate or preferential attention by this Tribunal like habeas
corpus cases, labor cases and c cases involving death sentence, let alone cases
involving properties and property rights of poor litigants pending decision or
resolution long before the New Constitution of 1973. Nobility and exempt
forbearance were expected of Atty. David, who is old and experienced in the
practice of the legal profession, from which he has derived a great measure. of
economic well-being and independence

Consequently, the filing of the motion for immediate tion and the issuance of the
writ of execution constitute a defiance and usurpation of the jurisdiction of the
Supreme Court. As a disciplinary measure for the preservation and vindication of
the dignity of this Supreme Tribunal respondent Atty. Juan T. David should be
REPRIMANDED for his precipitate action of filing a motion for execution as well as
Judge Jose H. Tecson for his improvident issuance of a writ of execution while the
case is pending appeal before the Supreme Court, and a repetition of said acts
would be dealt with more severely.
WHEREFORE, PETITIONER R. MARINO CORPUS IS HEREBY DIRECTED TO PAY
RESPONDENT ATTY. JUAN T. DAVID THE SUM OF TWENTY THOUSAND (P20,000.00)
PESOS AS ATTORNEY'S FEES.

RESPONDENT ATTY. JUAN T. DAVID AND JUDGE JOSE H. TECSON OF THE COURT OF
FIRST INSTANCE OF MANILA, BRANCH V, ARE HEREBY DECLARED GUILTY OF
CONTEMPT AND ARE HEREBY REPRIMANDED, WITH A WARNING THAT REPETITION
TION OF THE SAME OR SIMILAR ACTS WILL BE DEALT WITH MORE SEVERELY.

COSTS AGAINST PETITIONER.

SO ORDERED.

A.C. No. 492 September 5, 1967

OLEGARIA BLANZA and MARIA PASION, complainants,


vs.
ATTY. AGUSTIN ARCANGEL, respondent.

BENGZON, J.P., J.:

Complainants Olegaria Blanza and Maria Pasion ask this Court to take disciplinary
action against respondent Atty. Agustin Arcangel for professional non-feasance.
They complain that way back in April, 1955, respondent volunteered to help them in
their respective pension claims in connection with the deaths of their husbands,
both P.C. soldiers, and for this purpose, they handed over to him the pertinent
documents and also affixed their signatures on blank papers. But subsequently,
they noticed that since then, respondent had lost interest in the progress of their
claims and when they finally asked for the return of their papers six years later,
respondent refused to surrender them.

Respondent answered these accusations before Fiscal Raa to whom this case was
referred by the Solicitor General for investigation, report and recommendation. He
admitted having received the documents from complainants but explainer that it
was for photostating purposes only. His failure to immediately return them, he said,
was due to complainants' refusal to hand him the money to pay for the photostating
costs which prevented him from withdrawing said documents from the photostat
service. Anyway, he had already advanced the expenses himself and turned over,
on December 13, 1961, the documents, their respective photostats and the
photostat service receipt to the fiscal.

Finding respondent's explanation satisfactory and considering that he charged


complainants nothing for his services, Fiscal Raa recommended the former's
exoneration, or at most, that he be reprimanded only. The Solicitor General,
however, feels that respondent deserves at least a severe reprimand considering (1)
his failure to attend to complainants' pension claims for six years; (2) his failure to
immediately return the documents despite repeated demands upon him, and (3) his
failure to return to complainant Pasion, allegedly, all of her documents.

At the hearing of the case before this Court on October 21, 1963, only respondent,
thru counsel, appeared. In lieu of oral arguments, therefore, respondent submitted
his memorandum, annexing therewith an affidavit executed by Olegaria Blanza
asking for the dismissal of the administrative case.1

Respondent first submits that he was not obliged to follow up complainants' pension
claims since there was no agreement for his compensation as their counsel.
Respondent, however, overlooks the fact that he volunteered his professional
services and thus was not legally entitled to recover fees.2 But having established
the attorney-client relationship voluntarily, he was bound to attend to complainants'
claims with all due diligence.

Nevertheless, We find the evidence adduced insufficient to warrant the taking of


disciplinary action against respondent attorney. There is no clear preponderance of
evidence substantiating the accusations against him.3

Respondent's explanation for the delay in filing the claims and in returning the
documents has not been controverted by complainants. On the contrary, they
admitted4 that respondent asked them to shoulder the photostating expenses but
they did not give him any money therefor. Moreover, the documents and their
photostats were actually returned by respondent during the fiscal's investigation
with him paying for the photostating costs himself. And the condition of the
photostats themselves they appear to have been in existence for quite some
time5 supports respondent's allegation that they remained in possession of the
photostat service for the failure of the owners (respondents and/or complainants),
to withdraw the same upon payment of the corresponding costs. Hence,
complainants themselves are partly to blame for the delay in filing their respective
claims.1awphl.nt

As for the alleged failure of respondent to return all her documents to complainant
Pasion, the former denies this. Fiscal Raa made no findings on the matter. The
affidavit of Mrs. Blanza pardoning respondent cannot prejudice complainant Pasion
because res inter alios acta alteri nocere non debet. Still, there is equiponderance of
evidence which must necessarily redound to respondent's benefit. Complainant
Pasion had another opportunity to substantiate her charges in the hearing set for
October 21, 1963 but she let it go. Neither she nor her counsel of record appeared.

But while We are constrained to dismiss the charges against respondent for being
legally insufficient, yet We cannot but counsel against his actuations as a member
of the bar. A lawyer has a more dynamic and positive role in the community than
merely complying with the minimal technicalities of the statute. As a man of law, he
is necessarily a leader of the community, looked up to as a model citizen. His
conduct must, perforce, be par excellence, especially so when, as in this case,
he volunteers his professional services. Respondent here has not lived up to that
ideal standard. It was unnecessary to have complainants wait, and hope, for six long
years on their pension claims. Upon their refusal to co-operate, respondent should
have forthwith terminated their professional relationship instead of keeping them
hanging indefinitely. And altho We voted that he not be reprimanded, in a legal
sense, let this be a reminder to Atty. Arcangel of what the high standards of his
chosen profession require of him.

Accordingly, the case against respondent is dismissed. So ordered.

G.R. No. 109219 March 11, 1994

SUSANITA E. MENDOZA-PARKER, petitioner,


vs.
COURT OF APPEALS, RODOLFO TAN NG and TERESITA S. RIOSA, respondents.

Susanita E. Mendoza-Parker for and in her own behalf.

Nardo M. De Guzman, Sr. for private respondents.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
to modify the decision of the Court of Appeals in CA G.R. No. 28140 and its
resolution denying petitioner's motion for reconsideration.

We affirm the decision of the Court of Appeals and deny the petition.

On December 18, 1989, private respondents Tan Ng and Teresita S. Riosa,


represented by Atty. Efren Barangan, filed with the Regional Trial Court, Branch 20,
Quezon City, an action for collection of a sum of money with foreclosure of real
estate mortgage against Demetrio G. Alcaras and Julieta Alcaras (Civil Case No. Q-
89-4287).

On July 29, 1990, while the case was still at the pretrial stage, Atty. Barangan
withdrew his appearance and petitioner took over the case as substitute counsel.

On January 19, 1991, petitioner filed a motion for summary judgment, which was
granted and judgment was rendered on May 23, 1991 in favor of private
respondents. The trial court also awarded private respondents the amount of
P10,000.00 as attorney's fees (Rollo, p. 102).
Thereafter, the defendants filed a petition for relief from judgment. While said case
was still pending, petitioner filed a motion to withdraw her appearance with a
prayer for the payment of her attorney's fees, stating that she demanded from
private respondents the amount of P73,199.75 as her contingent fees, which was
equivalent to 15 percent of the total monetary award granted by the trial court.
Private respondents refused to pay the fees demanded by petitioner, offering to pay
her P20,000.00 as attorney's fees and P300.00 as appearance fees or the same
amount payable to their former counsel, Atty. Barangan.

The trial court, in its Order dated December 9, 1991, approved petitioner's motion
(Rollo, pp. 52-54) and on December 23, 1991, directed private respondents to
deposit the amount of P73,119.75 as attorney's fees (Rollo, p. 55).Private
respondents filed a motion for reconsideration of the Order of the trial court dated
December 9, 1991 with regard to the amount of attorney's fees awarded. The trial
court denied the motion for reconsideration (Rollo, p. 57). Petitioner then filed a
motion to cite private respondents in contempt of court for their failure to obey the
Orders dated December 9 and 23, 1991.

Subsequently, private respondents questioned the two orders of the trial court
before the Court of Appeals in CA-G.R. No. 281407, which modified the amount of
attorney's fees awarded to petitioner by the trial court and fixed the same at
P30,000.00 in addition to the award of P10,000.00 in the summary judgment.
Petitioner's motion for reconsideration was denied.

Hence, this appeal.

II

Petitioner assails as erroneous the giving of due course under Rule 65 of the Revised
Rules of Court by the Court of Appeals to the petition of private respondents,
claiming that an appeal under Rule 45 of the same Rules would have been the
proper remedy (Rollo, pp. 17-29). It is the stance of petitioner that if the appeal was
made under Rule 45, the entire record of the case would have been elevated "for
the appreciation of evidence on the reasonableness of the attorney's fees" (Rollo, p.
21).

The petition entertained by the Court of Appeals was filed by private respondents to
set aside the orders of the trial court dated December 9 and 23, 1991, which
ordered them to pay petitioner the amount of P73,199.76 as attorney's fees. The
said orders were issued after the summary judgment, which was secured by
petitioner as counsel for private respondents had become final.

An appeal from a summary judgment is governed by Circular No. 2-90 (superseding


Rule 41) while a review of an order of the trial court issued after the rendition of the
summary judgment is governed by Rule 65.
Under the Judiciary Act of 1948, the jurisdiction of the Court of Appeals was limited
to the issuance of the special writs under Rule 65 which are "in aid of its appellate
jurisdiction." Similarly thereto, the Supreme Court held that the Court of Appeals
had no jurisdiction to issue the special writs after the finality of the judgment of the
trial court. The reason for this is that said jurisdiction was based on the existence of
a right of appeal to the appellate court from the judgment of the trial court on the
merits in the main case (J.M. Tuason & Co., Inc. v. Jaramillo, 9 SCRA 189 [1963]; Vda.
de Albar v. Carandang, 6 SCRA 211 [1962]. However, under Section 9(1) of the
Judiciary Reorganization Act of 1980, the jurisdiction of the Court of Appeals to issue
the special writs was expanded to include special writs "whether or not in aid of its
appellate jurisdiction" (Quiason, Philippine Courts and Their Jurisdictions, 1993 ed.,
p. 545).

Private respondents could not have questioned the two orders of the trial court
before the Court of Appeals through a Rule 45 petition as suggested by petitioner
(Rollo, p. 19). This remedy is available only in appeals from the decisions of the
Court of Appeals to the Supreme Court.

Petitioner confused a final order on the merits of the main case, which is the one
appealable to the Court of Appeals and a final order regarding an incident thereof,
which is not appealable at all and can be reviewed only by a special civil action
under Rule 65. A judgment on the merits is one rendered after a determination of
which party is in the right and must prevail (Santos v. Intermediate Appellate Court,
145 SCRA 238 [1986]; De Ocampo v. Republic, 9 SCRA 440 [1963]).

Petitioner misread our ruling in Quirino v. Gorospe, 160 SCRA 787 (1988) to the
effect that the remedy from an order of the probate court fixing the attorney's fees
claimed by a lawyer against the estate is by an ordinary appeal (Rollo, p.
20). Quirino involved the settlement of an estate, a special proceeding where
multiple appeals are allowed (B.P. Blg. 129, Chapter IV, Sec. 39; Echaus v. Court of
Appeals, 187 SCRA 672 [1990]; BA Finance Corporation v. Court of Appeals, 178
SCRA 589 [1989]).

Section 19(b) of the Judiciary Reorganization Act of 1980 provides:

In appeals in special proceedings in accordance with Rule 109 of the Rules of Court
and other cases wherein multiple appeals are allowed, the period of appeal shall be
thirty (30) days, a record on appeal being required.

Likewise under Section 1(e) of Rule 109 of the Revised Rules of Court, an interested
party may appeal from an order of the Regional Trial Court where such order
"[c]onstitutes, in proceedings relating to the settlement of the estate of a deceased
person,. . . a final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the appointment of a special
administrator."
In Quirino, the order fixing the award of attorney's fees was issued before the final
settlement of the estate and should have been appealed by the heirs opposing the
award under Rule 41 (the rule then applicable).

In the case at bench, the order questioned by private respondent was issued during
the execution stage of the foreclosure proceedings. Clearly, the remedy of ordinary
appeal under Circular No. 2-90 was no longer available.

Having disposed of the procedural aspect of the petition, we now address the
question of whether the Court of Appeals can interfere with the orders of the trial
court, fixing the attorney's fees awarded to a lawyer for legal services rendered to
the client (Rollo, pp. 22-35).

The Court of Appeals did not sustain the finding of the trial court that there was an
agreement between petitioner and her clients regarding the amount of attorney's
fees to be paid for her legal services. We agree with the Court of Appeals that
neither the partial payment of the attorney's fees by private respondents in the
amount of P3,500.00 nor the sending by petitioner of her demand letter was
sufficient to establish that the parties had arrived at an agreement as to the amount
of her fees.

The Court of Appeals, in the exercise of its jurisdiction to review the decisions of
lower courts fixing the attorney's fees, can and did determine whether the
attorney's fees fixed by said courts are reasonable under the circumstances
(Borcena v. Intermediate Appellate Court, 147 SCRA 111 [1987]).

After taking into consideration the various factors to guide the courts in fixing the
attorney's fees, an appellate court can reduce the attorney's fees stipulated by the
parties in a contract for professional services or awarded by a lower court, to levels
which it deems reasonable (Ramos v. Court of Appeals, 63 SCRA 331 [1975];
Verzosa v. Baytan, 107 Phil. 1010 [1960]; Bachrach v. Golingco, 39 Phil. 130 [1918]).

In the absence of an agreement as to the amount of the attorney's fees, the courts
are authorized to determine the amount to be paid to an attorney as reasonable
compensation for his professional services (Lorenzo v. Court of Appeals, 189 SCRA
260 [1990]; Lacson v. Reyes, 182 SCRA 729 [1990]).

Even where the parties have agreed as to the amount of the fees, the courts have
the power to disregard the contract if the amount fixed is unreasonable (Bachrach v.
Golingco, 39 Phil. 138 [1918]; Canon 20, Code of Professional Responsibility).

A lawyer, being an officer of the court, is placed under judicial control with regard to
the reasonableness of the amount of the attorney's fees demanded by him from his
client (Licudan v. Court of Appeals, 193 SCRA 293 [1991]; Ramos v. Bidin, 161 SCRA
561 [1988]).
The determination of the attorney's fees depends on various factors like: the
amount and character of the services rendered; the responsibility imposed; the
amount of money or the value of the property involved in the controversy; the skill
and experience called for in the performance of the services; the professional
standing of the attorney; the results secured; and whether or not the payment of
the fees is contingent or absolute (Mambulao Lumber Co. v. Philippine National
Bank, 22 SCRA 359 [1968]).

In the case at bench, petitioner took over the case after the termination of the pre-
trial and the pleadings she filed consisted only of a motion for summary judgment
and an opposition to the motion for reconsideration filed by the defendants in Civil
Case No. Q-89-4287. There was no full-blown trial held, for the defendants in said
civil case admitted their indebtedness. The only issue left to be determined was the
manner of payment. Hence, there was no need to exert any unusual effort or special
skill in its preparation. Under the circumstances, we find the amount granted by the
trial court excessive and the award granted by the Court of Appeals reasonable.

WHEREFORE, the petition is DENIED.

[A.C. No. 1437. April 25, 1989.]

HILARIA TANHUECO, Complainant, v. JUSTINIANO G. DE DUMO, Respondent.

[A.C. No. 1683. April 25, 1989]

HILARIA TANHUECO, Complainant, v. JUSTINIANO G. DE DUMO, Respondent.

SYLLABUS

1. LEGAL ETHICS; ATTORNEY-CLIENT RELATIONSHIP; DEALING WITH TRUST


PROPERTY; FAILURE OF THE LAWYER TO ACCOUNT, CONSTITUTES PROFESSIONAL
MISCONDUCT. Moneys collected by an attorney on a judgment rendered in favor
of his client, constitute trust funds and must be immediately paid over to the client.
Canon 11 of the Canons of Professional Ethics then in force, provides as follows: "11.
Dealing with trust property. The lawyer should refrain from any action whereby for
his personal benefit or gain he abuses or takes advantage of the confidence reposed
in him by his client. Money of the client or collected for the client or other trust
property coming into the possession of the lawyer should be reported and
accounted for promptly and should not under any circumstances be commingled
with his own or be used by him." When respondent withheld and refused to deliver
the money received by him for his client, the deceased complainant Hilaria
Tanhueco, he breached the trust reposed upon him. The claim of the respondent
that complainant had failed to pay his attorneys fees, is not an excuse for
respondents failure to deliver any amount to the complainant. It is of course true
that under Section 37 of Rule 138 of the Revised Rules of Court, an attorney has
"a lien upon the funds, documents and papers of his client which have lawfully
come into his possession 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, 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." The fact that a lawyer has a lien for fees on moneys in his hands
collected for his client, does not relieve him from his duty promptly to account for
the moneys received; his failure to do so constitutes professional misconduct.

2. ID.; ID.; ID.; NATURE THEREOF. The relationship of attorney and client has
always been rightly regarded as one of special trust and confidence. An attorney
must exercise the utmost good faith and fairness in all his relationships vis-a-vis his
client. Respondent fell far short of this standard when he failed to render an
accounting for the amount actually received by him and when he refused to turn
over any portion of such amount received by him on behalf of his client upon the
pretext that his attorneys fees had not all been paid. Respondent had in fact placed
his private and personal interest above that of his client. Respondents act
constitutes a breach of his lawyers oath.

3. ID.; ATTORNEYS; CONTINGENT FEE; NOT PER SE PROHIBITED. In this


jurisdiction, contingent fees are not per se prohibited by law. But when it is shown
that a contract for a contingent fee was obtained by undue influence exercised by
the attorney upon his client or by any fraud or imposition, or that the compensation
is clearly excessive, the Court must and will protect the aggrieved party.

4. ID.; ID.; ID.; WHEN GROSSLY EXCESSIVE, QUANTUM MERUIT BASIS, PROPER.
The contingent fee here claimed was, under the facts obtaining in this case, grossly
excessive and unconscionable. Such a fee structure, when considered in conjunction
with the circumstances of this case, also shows that an unfair advantage was taken
of the client and legal fraud and imposition perpetrated upon her. The complainant
was an old and sickly woman and, in respondents own words, "penniless." She was
at the time she filed her complaint in 1976, already seventy-six (76) years old. In
her circumstances, and given her understandable desire to realize upon debts owed
to her before death overtook her, she would easily succumb to the demands of
respondent attorney regarding his attorneys fees. It must be stressed that the mere
fact that an agreement had been reached between attorney and client fixing the
amount of the attorneys fees, does not insulate such agreement from review and
modification by the Court where the fees clearly appear to be excessive or
unreasonable. This Court has power to guard a client, especially an aged and
necessitous client, against such a contract. We hold that on a quantum meruit basis,
no circumstances of special difficulty attending the collection cases having been
shown by respondent, respondent attorneys fees should be reduced from sixty
percent (60%) to fifteen percent (16%) of the total amount (including attorneys
fees stipulated as chargeable to the debtors) collected by him on behalf of his
client.

RESOLUTION

PER CURIAM:

On 24 February 1975, complainant Hilaria Tanhueco filed before the Court a Petition
for Disbarment (docketed as Administrative Case No. 1437) against respondent
Justiniano G. de Dumo for having violated the Canons of Professional Ethics by his
(a) refusal to remit to her money collected by him from debtors of the complainant;
and (b) refusal to return documents entrusted to him as counsel of complainant in
certain collection cases.

In his Answer and Counter-Petition 1 filed on 3 April 1975, respondent denied the
charges. Complainant filed a Rejoinder [should be Reply] to Answer with Counter-
Petition, on 18 April 1975. By a Resolution 2 dated 16 June 1975, the Court referred
this case to the Solicitor General for investigation, report and recommendation.

A year later, on 25 June 1976, one Jose Florencio N. Tanhueco, claiming to be the
nephew and representative of the complainant, addressed a sworn letter complaint
to Mrs. Imelda R. Marcos against the respondent for (a) refusal to remit the money
collected by respondent from debtors of complainants aunt, Mrs. Hilaria Tanhueco
Vda. de David; (b) refusal to return documents entrusted to him in his capacity as
counsel in certain cases; and (c) abandonment of cases in respect of which his
professional services had been engaged. On 24 August 1976, the letter complaint
was forwarded by the then Public Information Assistance Staff, Department of Public
Information, to this Court for appropriate action (and docketed as Administrative
Case No. 1683). After respondent had filed his Answer, the Court, by a Resolution 3
dated 9 December 1976, referred this case to then Acting Judicial Consultant
Ricardo C. Puno for study, report and recommendation.

Since Administrative Case No. 1683 and Administrative Case No. 1437 involved the
same parties and the same subject matter, Hon. Ricardo C. Puno referred the former
case to the Office of the Solicitor General for consolidation with the latter one.

The Office of the Solicitor General held two (2) hearings, one on 3 December 1975
and another on 18 April 1988. In the first hearing, respondent de Dumo was absent
although he had been notified thereof. At the end of the first hearing, continuation
of the hearing of the case was set for 14 January 1976. The records show that the
second hearing took place on 18 April 1988 but do not indicate the reason for the
12-year interregnum. By then, complainant Tanhueco had died. There was no
appearance at the second hearing by complainant Jose Florencio Tanhueco but
respondent de Dumo was then present.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

The report of the Solicitor General, dated June 15, 1988 in Administrative Case No.
1437 summarized the evidence for the complainant in the following
manner:jgc:chanrobles.com.ph

"EVIDENCE FOR COMPLAINANT

Complainant Hilaria Tanhueco testified that she secured the legal services of
respondent to collect indebtedness from her different debtors. Although she offered
to execute a document evidencing their lawyer client relationship, respondent told
her that it was not necessary. She nonetheless offered to give him 15% of what he
may be able to collect from the debtors (pp. 4-7. tsn, Dec. 3, 1975).

Complainant also declared that respondent borrowed from her P2,000.00,


P1,300.00, and P3,000.00 on three separate occasions, but she could not remember
when she gave those amounts. Respondent did not pay those loans (pp. 89, tsn, Id.)

She confirmed that respondent filed cases against her debtors and that one of
them, Constancia Maosca, paid P12,500.00 to Respondent. Informed of such
payment by Maosca herself, complainant confronted respondent but the later
denied having received payment from any of her debtors. Complainant then brought
the matter to the attention of Malacaang which referred her to Camp Crame.
Notwithstanding subsequent demands of complainant for the money, respondent
had refused to give her the amount (pp. 11-15, tsn, Id.)."cralaw virtua1aw library

The Solicitor General then summed up the evidence for the respondent in the
following terms:jgc:chanrobles.com.ph

"EVIDENCE FOR RESPONDENT

Respondent Atty. Justiniano G. de Dumo testified that complainant indeed secured


his legal services to collect from her debtors, with the agreement that he gets 50%
of what he may be able to collect. He thus filed collection cases against Tipace,
Maosca, Morena, Jr., and others, and was able to obtain favorable judgment in the
cases against Maosca, Tipace and Leonila Mendoza. The initial payments made by
these judgment-debtors were all given to complainant. With respect to Maosca,
respondent obtained a judgment for P19,000.00 although the debt was only
P12,000.00 (pp. 3-9, tsn, April 18, 1988).

Respondent also declared that complainant, who was then already old and sickly,
was influenced by her debtors, who were also her friends, into distrusting him.
Ultimately, because complainant filed a complaint against him with Malacaang
which referred the matter to Camp Crame, he terminated his relationship with
complainant and demanded his attorneys fees equivalent to 50% of what he had
collected. Complainant refused to pay him, hence, he did not also turn over to her
the P12,000.00 initial payment of Maosca, which he considered, or applied, as part
payment of his attorneys fee (pp. 9-19, tsn, Id.). Respondent estimated his
attorneys fee due from complainant in the amount of P17,000.00 (p. 20, tsn, Id.)

Respondent denied having borrowed the amounts of P2,000.00, P1,300.00,


P3,000.00 and P1,000.00, pointing out that complainant did not even have money
to pay him so that he handled the cases for her on contingent basis (p. 17, tsn, id.)
He also denied having received documentary evidence from complainant. What
evidence he had were all gathered by him on his initiative (pp. 4-7, tsn, id.)."cralaw
virtua1aw library

The Solicitor General then set out the following:jgc:chanrobles.com.ph

"FINDINGS

There is in the case at bar clear admissions by both complainant and respondent of
an attorney-client relationship between them, specifically in the collection of debts
owing complainant. Respondent also admitted, in his answer to the complaint and in
his testimony, having received P12,000.00 from judgment-debtor Constancia
Maosca, without turning over the amount to his client, complainant herein, and
applying it instead as part of his attorneys fees. It has been held that the money
collected by a lawyer in pursuance of a judgment in favor of his client is held in trust
(Aya v. Bigonia, 67 Phil. 8; Daroy v. Legaspi, 65 SCRA 304), and that the attorney
should promptly account for all funds and property received or held by him for the
clients benefit (Daroy v. Legaspi, supra; In re Bamberger, 49 Phil. 962). The
circumstance that an attorney has a lien for his attorneys fees on the money in his
hands collected for his client does not relieve him from the obligation to make a
prompt accounting (Doming[o] v. Doming[o], G.R. No. 30573, Oct. 29, 1971; Daroy
v. Legaspi, supra). Undoubtedly, respondents failure to account for the P12,000.00,
representing payment of the judgment debt of Maosca constitutes unprofessional
conduct and subjects him to disciplinary action. Nonetheless, it has likewise been
recognized that a lawyer is as much entitled to judicial protection against injustice,
imposition or fraud on the part of his client; and that the attorney is entitled to be
paid his just fees. The attorney should be protected against any attempt on the part
of his client to escape payment of his just compensation (Fernandez v. Bello, 107
Phil. 1140; Albano v. Coloma, G.R. Adm. Case No. 528, Oct. 11, 1967). This
countervailing rule mitigates the actions of Respondent.chanrobles law library : red

As regards the charges that respondent received documents evidencing the debts
to complainant and had refused to return them to the latter, and that respondent
also borrowed some amounts from her there [is] no competent, conclusive evidence
to support them. Before, such allegations have no factual basis." (Italics supplied)

The Solicitor General then recommended that:jgc:chanrobles.com.ph

"For failure to turn over the amount of P12,000.00 to the complainant, and applying
it as his attorneys fees, respondent Atty. Justiniano G. de Dumo be severely
reprimanded and admonished that repetition of the same or similar offense will be
dealt with in severely."cralaw virtua1aw library

We find the findings of fact of the Solicitor General supported by the evidence of
record. We are, however, unable to accept his recommendation.

Moneys collected by an attorney on a judgment rendered in favor of his client,


constitute trust funds and must be immediately paid over to the client. 4 Canon 11
of the Canons of Professional Ethics 5 then in force, provides as
follows:jgc:chanrobles.com.ph

"11. Dealing with trust property.

The lawyer should refrain from any action whereby for his personal benefit or gain
he abuses or takes advantage of the confidence reposed in him by his client.

Money of the client or collected for the client or other trust property coming into the
possession of the lawyer should be reported and accounted for promptly and should
not under any circumstances be commingled with his own or be used by him."
(Italics supplied)

When respondent withheld and refused to deliver the money received by him for his
client, the deceased complainant Hilaria Tanhueco, he breached the trust reposed
upon him. The claim of the respondent that complainant had failed to pay his
attorneys fees, is not an excuse for respondents failure to deliver any amount to
the complainant. 6 It is of course true that under Section 37 of Rule 138 of the
Revised Rules of Court, an attorney has

"a lien upon the funds, documents and papers of his client which have lawfully
come into his possession 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, 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."cralaw virtua1aw library

The fact that a lawyer has a lien for fees on moneys in his hands collected for his
client, does not relieve him from his duty promptly to account for the moneys
received; his failure to do so constitutes professional misconduct. 7

In the present case, what respondent could have properly done was to make an
accounting with his client, the complainant, deduct his attorneys fees due in
respect of the amount actually collected by him, and turn over the remaining
balance to the complainant. The Court notes that the services of respondent de
Dumo were engaged by the complainant on a number of cases and that these were
on differing stages of completion. Respondent was not entitled to hold on to the
entire amount of P12,000.00 collected by him until all his fees for the other cases
had also been paid and received by him. There was not enough evidence in the
record to show how much money, if any, respondent had in fact previously (i.e.,
other than the P12,000.00 from Maosca) collected for and turned over to
complainant (thereby waiving his lien thereon) without deducting therefrom his
claimed contingent fees in respect of such collections.chanrobles law library : red

The relationship of attorney and client has always been rightly regarded as one of
special trust and confidence. An attorney must exercise the utmost good faith and
fairness in all his relationships vis-a-vis his client. Respondent fell far short of this
standard when he failed to render an accounting for the amount actually received
by him and when he refused to turn over any portion of such amount received by
him on behalf of his client upon the pretext that his attorneys fees had not all been
paid. Respondent had in fact placed his private and personal interest above that of
his client. Respondents act constitutes a breach of his lawyers oath and a mere
reprimand is not an adequate sanction.

There is another aspect to this case which the Court cannot gloss over. Respondent
claimed that he charged complainant, his client, a contingent fee of fifty percent
(50%) of the amount collected by him, plus interest and whatever attorneys fees
may be awarded by the trial court chargeable to the other party. In this jurisdiction,
contingent fees are not per se prohibited by law. 8 But when it is shown that a
contract for a contingent fee was obtained by undue influence exercised by the
attorney upon his client or by any fraud or imposition, or that the compensation is
clearly excessive, the Court must and will protect the aggrieved party. 9

From the Answer of respondent de Dumo, it appears that in three (3) collection
cases filed by him for the complainant and which were decided in favor of the
complainant, the awards totalled P31,390.00. Respondent asserted that he was
entitled to attorneys fees amounting to P18,840.00 out of the aggregate total of
P31,390.00:jgc:chanrobles.com.ph

"7. That the understanding between Hilaria Tanhueco and me was a fifty-fifty on
collected principal and interests. The lawyer has the right to charge attorneys fees
to the other party-defendant and that Hilaria Tanhueco shall not interfere nor be
included in the computation.

That of the cases filed, the following made payments:chanrob1es virtual 1aw library

a.Hilaria Tanhueco v. Constancia Maosca

Amount Collectible (principal) P12,000.00

Interest added from May 1972

to Nov/73 at 1% a month P 2,280.00

Attorneys fees charged to the

defendant and not to be included

in the computation P 4,720.00

TOTAL and Amount specified in P19,000.00

the Compromise Agreement and

Subject of the Decision.


b.Hilaria Tanhueco v. Melchor Tipace Et. Al.

Principal amount collectible P7,100.00

Interest at 1% per month

starting June/71 to Sept./74 2,840.00

Attorneys fees charged to

the defendant and not

included in the computation 1,450.00

TOTAL P11,390.00"

c.Hilaria Tanhueco v. Estimo

Principal Amount collectible P1,000.00

SUMMATION OF THE THREE CASES FILED AND AMOUNTS RECEIVABLE BY THE


UNDERSIGNED INCLUDING ATTORNEYS FEES:chanrob1es virtual 1aw library

MAOSCA CASE:chanrob1es virtual 1aw library

Attorneys fees to be paid by

Maosca and not to be included

in the computation P 4,840.00

Fifty per cent on the

principal amount collectible

plus interests P 7,080.00

TOTAL AMOUNT RECEIVABLE P11,920.00

TIPACES CASE:chanrob1es virtual 1aw library

Attorneys fees to be paid

by Tipace and not to be included


in the computation P 1,450.00

Fifty per cent on the principal

amount collectible from Tipace plus

interests 4,970.00

TOTAL AMOUNT RECEIVABLE P 6,420.00

8. The total amount which I ought to receive as attorneys fees under paragraph
seven, sub-paragraph a, b and c is:chanrob1es virtual 1aw library

P11,920.00

6,420.00

500.00

P18,840.00 TOTAL" 10

We note that respondent attorney claimed as his contingent fee the following.

1) fifty percent (50%) of the sum of principal and interest collectible from different
debtors; and

2) attorneys fees charged to the defendant (presumably under promissory notes or


written agreements) and "not to be included in the computation."cralaw virtua1aw
library

Under this scheme, respondent was actually collecting as attorneys fees sixty
percent (60%) or more than half of the total amount due from defendant debtors;
indeed, he was appropriating for himself more than what he was, according to him,
to turn over to his client.chanrobles law library : red

We believe and so hold that the contingent fee here claimed was, under the facts
obtaining in this case, grossly excessive and unconscionable. 11 Such a fee
structure, when considered in conjunction with the circumstances of this case, also
shows that an unfair advantage was taken of the client and legal fraud and
imposition perpetrated upon her.

The complainant was an old and sickly woman and, in respondents own words,
"penniless." She was at the time she filed her complaint in 1976, already seventy-
six (76) years old. In her circumstances, and given her understandable desire to
realize upon debts owed to her before death overtook her, she would easily
succumb to the demands of respondent attorney regarding his attorneys fees. It
must be stressed that the mere fact that an agreement had been reached between
attorney and client fixing the amount of the attorneys fees, does not insulate such
agreement from review and modification by the Court where the fees clearly appear
to be excessive or unreasonable. In Mambulao Lumber Company v. Philippine
National Bank, Et Al., 12 this Court stressed:jgc:chanrobles.com.ph

"The principle that courts should reduce stipulated attorneys fees whenever it is
found under the circumstances of the case that the same is unreasonable, is now
deeply rooted in this jurisdiction to entertain any serious objection to it. Thus, this
Court has explained:chanrob1es virtual 1aw library

But the principle that it may be lawfully stipulated that the legal expenses involved
in the collection of a debt shall be defrayed by the debtor does not imply that such
stipulations must be enforced in accordance with the terms, no matter how injurious
or oppressive they may be. The lawful purpose to be accomplished by such a
stipulation is to permit the creditor to receive the amount due him under his
contract without a deduction of the expenses caused by the delinquency of the
debtor. It should not be permitted for him to convert such a stipulation into a source
of speculative profit at the expense of the debtor.

x x x

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, supra). And it is not material that
the present action is 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, supra).

x x x" 13

This Court has power to guard a client, 14 especially an aged and necessitous client,
15 against such a contract. We hold that on a quantum meruit basis, no
circumstances of special difficulty attending the collection cases having been shown
by respondent, respondent attorneys fees should be reduced from sixty percent
(60%) to fifteen percent (16%) of the total amount (including attorneys fees
stipulated as chargeable to the debtors) collected by him on behalf of his client.

With respect to charges of refusal to return documents entrusted to respondent


lawyer and abandonment of cases in which his services had been engaged, we
accept the findings of the Solicitor General that the evidence of record is not
sufficient to prove these allegations.

WHEREFORE, the Court Resolved that:chanrob1es virtual 1aw library

1. respondent is guilty of violation of the attorneys oath and of serious professional


misconduct and shall be SUSPENDED from the practice of law for six (6) months and
WARNED that repetition of the same or similar offense will be more severely dealt
with;

2. the attorneys fees that respondent is entitled to in respect of the collection cases
here involved shall be an amount equivalent to fifteen percent (15%) of the total
amount collected by respondent from the debtors in those cases;

3. respondent shall return forthwith to the estate of complainant Hilaria Tanhueco,


the P12,000.00 respondent received on behalf of his client less attorneys fees due
to him in respect of that amount (P12,000.00 less fifteen percent [15%] thereof) or a
net amount of P10,200.00; and

4. respondent shall return to the estate of complainant Hilaria Tanhueco any


documents and papers received by him from the deceased complainant in
connection with the collection cases for which he was retained. If he has in fact
made any other collections from deceased complainants debtors, he shall promptly
account therefor to complainants estate and shall be entitled to receive in respect
thereof the fifteen percent (15%) attorneys fees provided for herein.

Let a copy of this Resolution be furnished each to the Bar Confidant and spread on
the personal record of respondent attorney, and to the Integrated Bar of the
Philippines.

Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,


Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and
Regalado, JJ., concur.

A.C. No. 5534 January 17, 2005


JAYNE Y. YU, complainant,
vs.
RENATO LAZARO BONDAL, respondent.

DECISION

CARPIO MORALES, J.:

Atty. Renato Lazaro Bondal (respondent) stands charged in a complaint1 filed by


Jayne Y. Yu (complainant) for gross negligence and violation of Canon 162 and Rule
16.033 of the Code of Professional Responsibility arising from his alleged failure to
attend to the five cases she referred to him and to return, despite demand, the
amount of P51,716.54 she has paid him.

By complainants allegation, the following spawned the filing of the present


administrative complaint:

On March 30, 2000, she engaged the services of respondent as counsel in the
following cases: (1) "Jayne Yu. v. Swire Realty and Development Corp," for
Rescission with Damages filed before the Housing and Land Use Regulatory Board,
(2) I.S. No. 00-22089-90, "Jayne Yu v. Lourdes Fresnoza Boon," for Estafa, (3) I.S. No.
2000-G-22087-88, "Jayne Yu v. Julie Teh," for violation of Batas Pambansa Blg. 22,
(4) I.S. No. 2000-D-11826, "Jayne Yu v. Mona Lisa San Juan" for violation of Batas
Pambansa Blg. 22, and (5) I.S. No. 2000-D-11827, "Jayne Yu v. Elizabeth Chan
Ong," also for violation of Batas Pambansa Blg. 22.4

In the Retainer Agreement5 dated March 30, 2000, complainant agreed to pay
respondent the amount of P200,000.00 as Acceptance Fee for the five cases, with
an Appearance Fee of P1,500.00 pesos per hearing; and in the event that damages
are recovered, she would pay respondent 10% thereof as success fee.

Complainant later issued two checks, BPI Family Bank No. 94944 and BPI Family
Bank No. 94968, dated February 20, 2001 and April 5, 2001 in the amount
of P30,000.00 and P21,716.54, respectively.6

Despite receipt of above-said amounts, respondent failed to file a case against


Swire Realty and Development Corp;7 due to respondents negligence, the case for
estafa against Lourdes Fresnoza Boon was dismissed by the Office of the City
Prosecutor of Makati City and was not timely appealed to the Department of
Justice;8respondent negligently failed to inform complainant, before she left for
abroad, to leave the necessary documents for purposes of the preliminary
investigation of the case filed against Julie Teh before the Office of the City
Prosecutor of Makati City, which case was eventually dismissed by Resolution dated
August 14, 2000;9 and respondent compelled her to settle the two cases for
violation of B.P. Blg. 22 against Mona Lisa San Juan and Elizabeth Chan Ong under
unfair and unreasonable terms.101a\^/phi1.net
Respondent thus demanded from respondent, by letter11 of June 14, 2001, for the
return of all the records she had entrusted him bearing on the subject cases.

Through complainants counsel (Chavez Laureta and Associates Law Office) which
sent a letter12 to respondent, she reiterated her demand for the return of the
records of the cases.

Respondent did return but only the records bearing on the estafa case against
Lourdes Fresnoza Boon and the B.P. Blg. 22 case against Mona Lisa San Juan.

Complainant through counsel thus demanded, by letter13 of August 8, 2001, the


return of the rest of the files, particularly that dealing with Swire Realty and
Development Corporation and Julie Teh. In the same letter, complainant also
demanded the refund of the amounts covered by the above-said two BPI Family
Bank Checks amounting to P51,716.54, they being intended to represent payment
of filing fees for the case against Swire Realty and Development Corporation which
respondent failed to file.

As respondent failed and continues to refuse to comply with complainants valid


demands in evident bad faith and to her prejudice, she filed the present complaint
charging him with flagrant violation of Canon 16 and Canon 16.03 of the Code of
Professional Responsibility.

By Resolution14 of February 4, 2002, this Court directed respondent to file his


Comment. Respondent, through his counsel, the Escobido and Pulgar Law Offices,
filed a motion for extension for thirty days or up to April 9, 2002, which was granted
by Resolution of May 27, 2002. No copy was, however, furnished respondents
counsel.15

As respondent failed to file his Comment on the present complaint, this Court, by
Resolution of July 21, 2003, considered the filing of respondents comment deemed
waived and allowed complainant to present her evidence before the Office of the
Bar Confidant.16

At the hearing before the Officer of the Bar Confidant, complainant echoed her
allegations in the complaint.

As to the other cases referred by complainant to respondent, complainant testified


that the case against Julie Enriquez-Teh was dismissed because respondent failed to
present the original checks subject of the case;17 that the estafa case against Ms.
Lourdes Boon was dismissed and was never appealed;18 and that she was prodded
by respondent to settle the two cases for B.P. Blg. 22 even if she was not satisfied
with the terms thereof, respondent having assured her that he would waive his 10%
"success fee" in the case against Swire Development.19

And complainant submitted the following documentary evidence: (1) Retainer


Agreement between her and Atty. Renato Lazaro Bondal;20 (2) BPI Family Bank
Check No. 94944 dated February 20, 2001 for P30,000.00 payable to cash;21 (3) BPI
Family Bank Check No. 94968 dated April 5, 2001 for P21,716.54 payable to
cash;22 (4) Resolution of the City Prosecutor of Makati dated August 18, 2000 on a
case between Jayne Yu and Lourdes Fresnoza Boon;23 (5) Resolution of the City
Prosecutor of Makati on a case between her and Julie Enriquez-Teh;24 (5) her letter
to respondent dated June 14, 2001 requesting the return of pertinent records of the
cases referred to him;25 (6) letter of Francisco I. Chavez to respondent dated July
18, 2001 reiterating the request for the return of the records and an accounting of
the amount of P51,716.54;26 (7) letter of Francisco I. Chavez to respondent dated
August 8, 2001 confirming the receipt of two folders relative to the cases she filed
against Lourdes Fresnoza Boon and Mona Lisa San Juan, requesting Atty. Bondal to
return the files bearing on Swire Realty and Development Corporation and Julie Teh,
and demanding the refund of the amount of P51,716.54.27

The Office of the Bar Confidant, by Report and Recommendation,28 recommends


the dismissal of the complaint for failure of complainant to substantiate it.

From the records of the case, it is culled that except for the case against Swire
Development Corporation, the other 4 cases referred by complainant to respondent
were filed in court but were dismissed or terminated for causes not attributable to
respondent.

The case for estafa against Lourdes Fresnoza Boon in I.S. No. 00-22089-90 was
dismissed by the Makati Prosecutors Office by Resolution dated August 18, 2000
due to lack of probable cause and, in any event, the issues raised therein were in
the nature of intra-corporate disputes which are properly cognizable by another
forum, viz:

After careful examination and evaluation of the evidence adduced both by complain
ant and respondent, undersigned Investigating Prosecutor finds no probable cause t
o hold respondent for the offense charged of Estafa. Apparently, there was no deceit
and/or unfaithfulness or abuse of confidence employed by respondent when
complainant agreed to invest her money in the restaurant business under the name
and style of La Gondola, Inc. which is owned by respondent. xxx In the present case,
though, complainant alleged that respondent immediately upon receipt of the
P4,800,000.00 representing her investment in the restaurant business, executed
earlier in favor of Philippine Commercial and International Bank whereby La Gondola
assumed the loans and credit accommodations obtained by Lucre Export/Import
Inc., using the funds of La Gondola, Inc.; respondent being the President and
majority owner of the latter corporation. However, outside of the mere allegation of
complainant that respondent allegedly assumed the loans and credit
accommodations extended to the other company using the funds of La Gondola,
Inc., no concrete and real evidence were presented and/or proven to this effect by
complainant. xxx
Moreover, it is apparent that the issues being raised by complainant appears to be
intra-corporate disputes which could be very well settled in another
forum.29 (Underscoring supplied)

Notably, a similar complaint for the same offense, docketed as I.S. No. 99-H-2780,
had been previously filed by complainant against Ms. Boon which case was
dismissed for insufficiency of evidence.30 As thus observed by the Office of the Bar
Confidant, the filing of an appeal from the prosecutors resolution would have been
inutile since the facts and issues raised in the estafa case had already been twice
passed upon by the Office of the City Prosecutor, hence, it would likely be
dismissed.31

No fault or negligence can also be attributed to respondent in the dismissal of I.S.


No. 2000-G-22087-88 against Julie Teh. By Resolution of August 14, 2000 of the
Makati Prosecutors Office, it is clear that it was dismissed, in the main, on the
ground that the offense charged did not actually exist and complainant failed to
appear and present the original checks, viz:

After a careful evaluation of the evidence on record, the undersigned recommends


for the dismissal of the present complaints on the following grounds:

1. Despite reasonable opportunity given to her, complainant failed to appear and


present the original copies of the subject checks and other documents attached to
the complaint.

2. The subject checks were presented after the 90-day period hence there is no
more presumption of knowledge of the insufficiency of funds. Accordingly, the
burden is shifted upon the complainant to prove that at the time the checks were
issued, the drawer knew that he had insufficient funds. There is no allegation much
less proof to that effect. The result is that the element of knowledge of insufficiency
of funds or credit is not present, therefore the crime does not exist.32

On the alleged failure of respondent to appear during the hearing of I.S. No. 2000-G-
22087-88 and his failure to present the original of the checks subject thereof, they
being then in the possession of complainant who was abroad at that time:33 Such
failure to present the original of the checks cannot solely be attributed to
respondent, for she herself was guilty of neglect.34

As for the alleged compulsion in the settlement of her two complaints for violation
of B.P. Blg. 22 in accordance with the terms dictated by the therein respondents
Mona Lisa San Juan and Elizabeth Chan Ong, upon the promise of respondent that
he would waive the 10% success fee in the complaint to be filed against Swire
Development: Assuming the truthfulness of her allegation that respondent
compelled her to settle, what the terms were as alleged to have been dictated by
Ms. San Juan and Ms. Chan Ong, and the manner and/or extent of prejudice she
suffered, complainant did not establish. Moreover, she failed to show that the
promise by respondent that he would waive the 10% success fee was for the
purpose of defrauding her or of such nature as to constitute undue influence,
thereby depriving her of reasonable freedom of choice.

Subsequent to the amicable settlement, it appears that complainant never raised


any objection to the terms of the compromise. As an accepted rule, when a client,
upon becoming aware of the compromise and the judgment thereon, fails to
promptly repudiate the action of his attorney, he will not afterwards be heard to
complain about it.35

As for complainants claim that the amount of P51,716.54, which was the only
amount on record that complainant paid for respondents legal services, was
intended for the filing fees in the complaint against Swire Development Corporation,
the same was not substantiated as in fact the retainer agreement does not so
confirm.

We would like to thank you for retaining our law firm in the handling and
representation of your
case. In regard tothe five cases you referred to us, our aggregate Acceptance fee is
P200,000 Pesos with an Appearance fee ofP1,500.00 Pesos per hearing. As regards
the damages to be recovered, we will get 10% thereof by way of Success
Fee.36 (Underscoring supplied)

If, admittedly, the only payment given to complainant by respondent is the amount
of P51,716.54, then complainant still owes respondent more, as respondent
rendered his legal services in 4 out of the 5 cases. An acceptance fee is not a
contingent fee, but is an absolute fee arrangement which entitles a lawyer to get
paid for his efforts regardless of the outcome of the litigation. That complainant was
dissatisfied with the outcome of the four cases does not render void the above
retainer agreement for respondent appears to have represented the interest of
complainant. Litigants need to be reminded that lawyers are not demi-gods or
"magicians" who can always win their cases for their clients no matter the utter lack
of merit of the same or how passionate the litigants may feel about their
cause.371awphi1.nt

In sum, this Court finds well taken the finding of the Office of the Bar Confidant that
complainant failed to establish the guilt of respondent by clear, convincing and
satisfactory proof. The charges against him must thus be dismissed.38

However, since respondent had been advised by complainant through counsel


Chavez Laureta and Associates, by letter of July 18, 2001, that she intended to
terminate his services, as of said date, he was obliged, under Rule 22.02 of the
Code of Professional Responsibility, viz:

Rule 22.02 A lawyer who withdraws or is discharged shall, subject to a retainer


lien, immediately turn over all papers and property to which the client is entitled,
and shall cooperate with his successor in the orderly transfer of the matter,
including all information necessary for the proper handling of the matter,

to immediately turn over all papers and property which complainant entrusted to his
successor.

WHEREFORE, the complaint is hereby DISMISSED. Respondent is, however, hereby


directed to RETURN all the records in his possession relative to the cases he
handled for complainant.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.

VALENTIN C. MIRANDA, A. C. No. 6281

Complainant, Present:

PERALTA, J., Acting Chairperson,

ABAD,

PEREZ,*

- versus- MENDOZA, and

PERLAS-BERNABE, JJ.

Promulgated:

September 26, 2011

ATTY. MACARIO D. CARPIO,

Respondent.

x---------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:
This is a disbarment case against Atty. Macario D. Carpio filed by Valentin C.
Miranda.[1]

The facts, as culled from the records, are as follows:

Complainant Valentin C. Miranda is one of the owners of a parcel of land consisting


of 1,890 square meters located at Barangay Lupang Uno, Las Pias, Metro Manila. In
1994, complainant initiated Land Registration Commission (LRC) Case No. M-226 for
the registration of the aforesaid property. The case was filed before
the Regional Trial Court ofLas Pias City, Branch 275. During the course of the
proceedings, complainant engaged the services of respondent Atty. Carpio as
counsel in the said case when his original counsel, Atty. Samuel Marquez, figured in
a vehicular accident.

In complainant's Affidavit,[2] complainant and respondent agreed that complainant


was to pay respondent Twenty Thousand Pesos (PhP20,000.00) as acceptance fee
and Two Thousand Pesos (PhP2,000.00) as appearance fee. Complainant paid
respondent the amounts due him, as evidenced by receipts duly signed by the
latter. During the last hearing of the case, respondent demanded the additional
amount of Ten Thousand Pesos (PhP10,000.00) for the preparation of a
memorandum, which he said would further strengthen complainant's position in the
case, plus twenty percent (20%) of the total area of the subject property as
additional fees for his services.

Complainant did not accede to respondent's demand for it was contrary to their
agreement. Moreover, complainant co-owned the subject property with his siblings,
and he could not have agreed to the amount being demanded by respondent
without the knowledge and approval of his co-heirs. As a result of complainant's
refusal to satisfy respondent's demands, the latter became furious and their
relationship became sore.

On January 12, 1998, a Decision was rendered in LRC Case No. M-226, granting the
petition for registration, which Decision was declared final and executory in an
Order datedJune 5, 1998. On March 24, 2000, the Land Registration Authority (LRA)
sent complainant a copy of the letter addressed to the Register of Deeds (RD) of Las
Pias City, which transmitted the decree of registration and the original and owner's
duplicate of the title of the property.

On April 3, 2000, complainant went to the RD to get the owner's duplicate of the
Original Certificate of Title (OCT) bearing No. 0-94. He was surprised to discover that
the same had already been claimed by and released to respondent on March 29,
2000. On May 4, 2000, complainant talked to respondent on the phone and asked
him to turn over the owner's duplicate of the OCT, which he had claimed without
complainant's knowledge, consent and authority. Respondent insisted that
complainant first pay him the PhP10,000.00 and the 20% share in the property
equivalent to 378 square meters, in exchange for which, respondent would deliver
the owner's duplicate of the OCT. Once again, complainant refused the demand, for
not having been agreed upon.

In a letter[3] dated May 24, 2000, complainant reiterated his demand for the return
of the owner's duplicate of the OCT. On June 11, 2000, complainant made the same
demand on respondent over the telephone. Respondent reiterated his previous
demand and angrily told complainant to comply, and threatened to have the OCT
cancelled if the latter refused to pay him.

On June 26, 2000, complainant learned that on April 6, 2000, respondent registered
an adverse claim on the subject OCT wherein he claimed that the agreement on the
payment of his legal services was 20% of the property and/or actual market
value. To date, respondent has not returned the owner's duplicate of OCT No. 0-94
to complainant and his co-heirs despite repeated demands to effect the same.

In seeking the disbarment or the imposition of the appropriate penalty upon


respondent, complainant invokes the following provisions of the Code of
Professional Responsibility:

Canon 20. A lawyer shall charge only fair and reasonable fees.

Canon 16. A lawyer shall hold in trust all moneys and properties of his client that
may come into his possession.

Canon 16.03. A lawyer shall deliver the funds and properties of his client when due
or upon demand. x x x

In defense of his actions, respondent relied on his alleged retaining lien over the
owner's duplicate of OCT No. 0-94. Respondent admitted that he did not turn over to
complainant the owner's duplicate of OCT No. 0-94 because of complainant's
refusal, notwithstanding repeated demands, to complete payment of his agreed
professional fee consisting of 20% of the total area of the property covered by the
title, i.e., 378 square meters out of 1,890 square meters, or its equivalent market
value at the rate of PhP7,000.00 per square meter, thus, yielding a sum of
PhP2,646,000.00 for the entire 378-square-meter portion and that he was ready and
willing to turn over the owner's duplicate of OCT No. 0-94, should complainant pay
him completely the aforesaid professional fee.
Respondent admitted the receipt of the amount of PhP32,000.00, however, he
alleged that the amount earlier paid to him will be deducted from the 20% of the
current value of the subject lot. He alleged that the agreement was not reduced into
writing, because the parties believed each other based on their mutual trust. He
denied that he demanded the payment of PhP10,000.00 for the preparation of a
memorandum, since he considered the same unnecessary.

In addition to the alleged agreement between him and complainant for the payment
of the 20% professional fees, respondent invoked the principle of quantum meruit to
justify the amount being demanded by him.

In its Report and Recommendation[4] dated June 9, 2005, the Integrated Bar of the
Philippines-Commission on Bar Discipline (IBP-CBD) recommended that respondent
be suspended from the practice of law for a period of six (6) months for unjustly
withholding from complainant the owner's duplicate of OCT No. 0-94 in the exercise
of his so-called attorney's lien. In Resolution No. XVII-2005-173,[5] dated December
17, 2005, the IBP Board of Governors adopted and approved the Report and
Recommendation of the IBP-CBD.

Respondent filed a motion for reconsideration of the resolution of the IBP Board of
Governors adopting the report and recommendation of the IBP-CBD. Pending the
resolution of his motion for reconsideration, respondent filed a petition for
review[6] with this Court. The Court, in a Resolution[7] dated August 16, 2006,
directed that the case be remanded to the IBP for proper disposition, pursuant to
this Court's resolution in Noriel J. Ramientas v. Atty. Jocelyn P. Reyala.[8]

In Notice of Resolution No. XVIII-2008-672, dated December 11, 2008, the IBP Board
of Governors affirmed Resolution No. XVII-2005-173, dated December 17, 2005, with
modification that respondent is ordered to return the complainant's owner's
duplicate of OCT No. 0-94 within fifteen days from receipt of notice. Hence, the
present petition.

The Court sustains the resolution of the IBP Board of Governors, which affirmed with
modification the findings and recommendations of the IBP-CBD. Respondent's claim
for his unpaid professional fees that would legally give him the right to retain the
property of his client until he receives what is allegedly due him has been paid has
no basis and, thus, is invalid.
Section 37, Rule 138 of the Rules of Court specifically provides:

Section 37. Attorneys liens. An attorney shall have a lien upon the funds, documents
and papers of his client, which have lawfully come into his possession 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, 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.

An attorney's retaining lien is fully recognized if the presence of the following


elements concur: (1) lawyer-client relationship; (2) lawful possession of the client's
funds, documents and papers; and (3) unsatisfied claim for attorney's fees.
[9] Further, the attorney's retaining lien is a general lien for the balance of the
account between the attorney and his client, and applies to the documents and
funds of the client which may come into the attorney's possession in the course of
his employment.[10]

In the present case, complainant claims that there is no such agreement for the
payment of professional fee consisting of 20% of the total area of the subject
property and submits that their agreement was only for the payment of the
acceptance fee and the appearance fees.

As correctly found by the IBP-CBD, there was no proof of any agreement between
the complainant and the respondent that the latter is entitled to an additional
professional fee consisting of 20% of the total area covered by OCT No. 0-94. The
agreement between the parties only shows that respondent will be paid the
acceptance fee and the appearance fees, which the respondent has duly
received. Clearly, there is no unsatisfied claim for attorney's fees that would entitle
respondent to retain his client's property. Hence, respondent could not validly
withhold the title of his client absence a clear and justifiable claim.
Respondent's unjustified act of holding on to complainant's title with the obvious
aim of forcing complainant to agree to the amount of attorney's fees sought is an
alarming abuse by respondent of the exercise of an attorney's retaining lien, which
by no means is an absolute right, and cannot at all justify inordinate delay in the
delivery of money andproperty to his client when due or upon demand.[11]

Atty. Carpio failed to live up to his duties as a lawyer by unlawfully withholding and
failing to deliver the title of the complainant, despite repeated demands, in the
guise of an alleged entitlement to additional professional fees. He has breached
Rule 1.01 of Canon 1 and Rule 16.03 of Canon 16 of the Code of Professional
Responsibility, which read:

CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE
LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESS.

Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct.

CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS
CLIENT THAT MAY COME INTO HIS POSSESSION.

Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or
upon demand. However, he shall have a lien over the funds and may apply so much
thereof as may be necessary to satisfy his lawful fees and disbursements, giving
notice promptly thereafter to his client. He shall also have a lien to the same extent
on all judgments and executions he has secured for his client as provided for in the
Rules of Court.

Further, in collecting from complainant exorbitant fees, respondent violated Canon


20 of the Code of Professional Responsibility, which mandates that a lawyer shall
charge only fair and reasonable fees. It is highly improper for a lawyer to impose
additional professional fees upon his client which were never mentioned nor agreed
upon at the time of the engagement of his services. At the outset, respondent
should have informed the complainant of all the fees or possible fees that he would
charge before handling the case and not towards the near conclusion of the
case. This is essential in order for the complainant to determine if he has the
financial capacity to pay respondent before engaging his services.

Respondent's further submission that he is entitled to the payment of additional


professional fees on the basis of the principle of quantum meruit has no
merit. "Quantum meruit, meaning `as much as he deserved' is used as a basis for
determining the lawyer's professional fees in the absence of a contract but
recoverable by him from his client."[12] The principle of quantum meruit applies if a
lawyer is employed without a price agreed upon for his services. In such a case, he
would be entitled to receive what he merits for his services, as much as he has
earned.[13] In the present case, the parties had already entered into an agreement
as to the attorney's fees of the respondent, and thus, the principle of quantum
meruit does not fully find application because the respondent is already
compensated by such agreement.

The Court notes that respondent did not inform complainant that he will be the one
to secure the owner's duplicate of the OCT from the RD and failed to immediately
inform complainant that the title was already in his possession. Complainant, on
April 3, 2000, went to the RD of Las Pias City to get the owner's duplicate of OCT No.
0-94, only to be surprised that the said title had already been claimed by, and
released to, respondent on March 29, 2000. A lawyer must conduct himself,
especially in his dealings with his clients, with integrity in a manner that is beyond
reproach. His relationship with his clients should be characterized by the highest
degree of good faith and fairness.[14] By keeping secret with the client his
acquisition of the title, respondent was not fair in his dealing with his
client. Respondent could have easily informed the complainant immediately of his
receipt of the owner's duplicate of the OCT on March 29, 2000, in order to save his
client the time and effort in going to the RD to get the title.

Respondent's inexcusable act of withholding the property belonging to his client and
imposing unwarranted fees in exchange for the release of said title deserve the
imposition of disciplinary sanction. Hence, the ruling of the IBP Board of Governors,
adopting and approving with modification the report and recommendation of the
IBP-CBD that respondent be suspended from the practice of law for a period of six
(6) months and that respondent be ordered to return the complainant's owner's
duplicate of OCT No. 0-94 is hereby affirmed. However, the fifteen-day period from
notice given to respondent within which to return the title should be modified and,
instead, respondent should return the same immediately upon receipt of the Court's
decision.
WHEREFORE, Atty. Macario D. Carpio is SUSPENDED from the practice of law for a
period of six (6) months, effective upon receipt of this Decision. He is ordered
toRETURN to the complainant the owner's duplicate of OCT No. 0-94 immediately
upon receipt of this decision. He is WARNED that a repetition of the same or similar
act shall be dealt with more severely.

Let a copy of this Decision be furnished to the Office of the Bar Confidant, to be
appended to the personal record of Atty. Macario D. Carpio as a member of the Bar;
the Integrated Bar of the Philippines; and the Office of the Court Administrator for
circulation to all courts in the country for their information and guidance.

SO ORDERED.

G.R. No. 73886 January 31, 1989

JOHN C. QUIRANTE and DANTE CRUZ, petitioners,


vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT, MANUEL C. CASASOLA, and
ESTRELLITA C. CASASOLA, respondents.

Quirante & Associates Law Office for petitioners.

R.S. Bernaldo & Associates for private respondents.

REGALADO, J.:

This appeal by certiorari seeks to set aside the judgment' 1 of the former
Intermediate Appellate Court promulgated on November 6, 1985 in AC-G.R. No. SP-
03640, 2 which found the petition for certiorari therein meritorious, thus:

Firstly, there is still pending in the Supreme Court a petition which may or may
not ultimately result in the granting to the Isasola (sic) family of the total amount of
damages given by the respondent Judge. Hence the award of damages confirmed in
the two assailed Orders may be premature. Secondly, assuming that the grant of
damages to the family is eventually ratified, the alleged confirmation of attorney's
fees will not and should not adversely affect the non-signatories thereto.

WHEREFORE, in view of the grave abuse of discretion (amounting to lack of


jurisdiction) committed by the respondent Judge, We hereby SET ASIDE his
questioned orders of March 20, 1984 and May 25, 1984. The restraining order
previously issued is made permanent. 3
The challenged decision of respondent court succinctly sets out the factual origin of
this case as follows:

... Dr. Indalecio Casasola (father of respondents) had a contract with a building
contractor named Norman GUERRERO. The Philippine American General Insurance
Co. Inc. (PHILAMGEN, for short) acted as bondsman for GUERRERO. In view of
GUERRERO'S failure to perform his part of the contract within the period specified,
Dr. Indalecio Casasola, thru his counsel, Atty. John Quirante, sued both GUERRERO
and PHILAMGEN before the Court of first Instance of Manila, now the Regional Trial
Court (RTC) of Manila for damages, with PHILAMGEN filing a cross-claim against
GUERRERO for indemnification. The RTC rendered a decision dated October 16,
1981. ... 4

In said decision, the trial court ruled in favor of the plaintiff by rescinding the
contract; ordering GUERRERO and PHILAMGEN to pay the plaintiff actual damages in
the amount of P129,430.00, moral damages in the amount of P50,000.00,
exemplary damages in the amount of P40,000.00 and attorney's fees in the amount
of P30,000.00; ordering Guerrero alone to pay liquidated damages of P300.00 a day
from December 15, 1978 to July 16, 1979; and ordering PHILAMGEN to pay the
plaintiff the amount of the surety bond equivalent to P120,000.00. 5 A motion for
reconsideration filed by PHILAMGEN was denied by the trial court on November 4,
1982. 6

Not satisfied with the decision of the trial court, PHILAMGEN filed a notice of appeal
but the same was not given due course because it was allegedly filed out of time.
The trial court thereafter issued a writ of execution. 7

A petition was filed in AC-G.R. No. 00202 with the Intermediate Appellate Court for
the quashal of the writ of execution and to compel the trial court to give due course
to the appeal. The petition was dismissed on May 4, 1983 8 so the case was
elevated to this Court in G.R. No. 64334. 9 In the meantime, on November 16, 1981,
Dr. Casasola died leaving his widow and several children as survivors. 10

On June 18, 1983, herein petitioner Quirante filed a motion in the trial court for the
confirmation of his attorney's fees. According to him, there was an oral agreement
between him and the late Dr. Casasola with regard to his attorney's fees, which
agreement was allegedly confirmed in writing by the widow, Asuncion Vda. de
Casasola, and the two daughters of the deceased, namely Mely C. Garcia and
Virginia C. Nazareno. Petitioner avers that pursuant to said agreement, the
attorney's fees would be computed as follows:

A. In case of recovery of the P120,000.00 surety bond, the attorney's fees of the
undersigned counsel (Atty. Quirante) shall be P30,000.00.
B. In case the Honorable Court awards damages in excess of the P120,000.00 bond,
it shall be divided equally between the Heirs of I. Casasola, Atty. John C. Quirante
and Atty. Dante Cruz.

The trial court granted the motion for confirmation in an order dated March 20,
1984, despite an opposition thereto. It also denied the motion for reconsideration of
the order of confirmation in its second order dated May 25, 1984. 11

These are the two orders which are assailed in this case.

Well settled is the rule that counsel's claim for attorney's fees may be asserted
either in the very action in which the services in question have been rendered, or in
a separate action. If the first alternative is chosen, the Court may pass upon said
claim, even if its amount were less than the minimum prescribed by law for the
jurisdiction of said court, upon the theory that the right to recover attorney's fees is
but an incident of the case in which the services of counsel have been
rendered ." 12 It also rests on the assumption that the court trying the case is to a
certain degree already familiar with the nature and extent of the lawyer's services.
The rule against multiplicity of suits will in effect be subserved. 13

What is being claimed here as attorney's fees by petitioners is, however, different
from attorney's fees as an item of damages provided for under Article 2208 of the
Civil Code, wherein the award is made in favor of the litigant, not of his counsel, and
the litigant, not his counsel, is the judgment creditor who may enforce the judgment
for attorney's fees by execution. 14 Here, the petitioner's claims are based on an
alleged contract for professional services, with them as the creditors and the private
respondents as the debtors.

In filing the motion for confirmation of attorney's fees, petitioners chose to assert
their claims in the same action. This is also a proper remedy under our
jurisprudence. Nevertheless, we agree with the respondent court that the
confirmation of attorney's fees is premature. As it correctly pointed out, the petition
for review on certiorari filed by PHILAMGEN in this Court (G.R. No. 64834) "may or
may not ultimately result in the granting to the Isasola (sic) family of the total
amount of damages" awarded by the trial court. This especially true in the light of
subsequent developments in G.R. No. 64334. In a decision promulgated on May 21,
1987, the Court rendered judgment setting aside the decision of May 4, 1983 of the
Intermediate Appellate Court in AC-G.R. No. 00202 and ordering the respondent
Regional Trial Court of Manila to certify the appeal of PHILAMGEN from said trial
court's decision in Civil Case No. 122920 to the Court of Appeal. Said decision of the
Court became final and executory on June 25, 1987.

Since the main case from which the petitioner's claims for their fees may arise has
not yet become final, the determination of the propriety of said fees and the amount
thereof should be held in abeyance. This procedure gains added validity in the light
of the rule that the remedy for recovering attorney's fees as an incident of the main
action may be availed of only when something is due to the client. Thus, it was
ruled that:

... an attorney's fee cannot be determined until after the main litigation has been
decided and the subject of recovery is at the disposition of the court. The issue over
attorney's fee only arises when something has been recovered from which the fee is
to be paid. 15

It is further observed that the supposed contract alleged by petitioners as the basis
for their fees provides that the recovery of the amounts claimed is subject to certain
contingencies. It is subject to the condition that the fee shall be P30,000.00 in case
of recovery of the P120,000.00 surety bond, plus an additional amount in case the
award is in excess of said P120,000.00 bond, on the sharing basis hereinbefore
stated.

With regard to the effect of the alleged confirmation of the attorney's fees by some
of the heirs of the deceased. We are of the considered view that the orderly
administration of justice dictates that such issue be likewise determined by the
court a quo inasmuch as it also necessarily involves the same contingencies in
determining the propriety and assessing the extent of recovery of attorney's fees by
both petitioners herein. The court below will be in a better position, after the entire
case shall have been adjudicated, inclusive of any liability of PHILAMGEN and the
respective participations of the heirs of Dr. Casasola in the award, to determine with
evidentiary support such matters like the basis for the entitlement in the fees of
petitioner Dante Cruz and as to whether the agreement allegedly entered into with
the late Dr. Casasola would be binding on all his heirs, as contended by petitioner
Quirante.

We, therefore, take exception to and reject that portion of the decision of the
respondent court which holds that the alleged confirmation to attorney's fees should
not adversely affect the non-signatories thereto, since it is also premised on the
eventual grant of damages to the Casasola family, hence the same objection of
prematurity obtains and such a holding may be pre-emptive of factual and
evidentiary matters that may be presented for consideration by the trial court.

WHEREFORE, with the foregoing observation, the decision of the respondent court
subject of the present recourse is hereby AFFIRMED.

SO ORDERED.

G.R. No. 120592 March 14, 1997

TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION and EMMANUEL NOEL A.
CRUZ, respondents.
REGALADO, J.:

Petitioner Traders Royal Bank Employees Union and private respondent Atty.
Emmanuel Noel A. Cruz, head of the E.N.A. Cruz and Associates law firm, entered
into a retainer agreement on February 26, 1987 whereby the former obligated itself
to pay the latter a monthly retainer fee of P3,000.00 in consideration of the law
firm's undertaking to render the services enumerated in their
contract. 1 Parenthetically, said retainer agreement was terminated by the union on
April 4, 1990. 2

During the existence of that agreement, petitioner union referred to private


respondent the claims of its members for holiday, mid-year and year-end bonuses
against their employer, Traders Royal Bank (TRB). After the appropriate complaint
was filed by private respondent, the case was certified by the Secretary of Labor to
the National Labor Relations Commission (NLRC) on March 24, 1987 and docketed
as NLRC-NCR Certified Case No. 0466. 3

On September 2, 1988, the NLRC rendered a decision in the foregoing case in favor
of the employees, awarding them holiday pay differential, mid-year bonus
differential, and year-end bonus differential. 4 The NLRC, acting on a motion for the
issuance of a writ of execution filed by private respondent as counsel for petitioner
union, raffled the case to Labor Arbiter Oswald Lorenzo. 5

However, pending the hearing of the application for the writ of execution, TRB
challenged the decision of the NLRC before the Supreme Court. The Court, in its
decision promulgated on August 30, 1990, 6 modified the decision of the NLRC by
deleting the award of mid-year and year-end bonus differentials while affirming the
award of holiday pay differential. 7

The bank voluntarily complied with such final judgment and determined the holiday
pay differential to be in the amount of P175,794.32. Petitioner never contested the
amount thus found by TRB. 8 The latter duly paid its concerned employees their
respective entitlement in said sum through their payroll. 9

After private respondent received the above decision of the Supreme Court on
September 18, 1990, 10 he notified the petitioner union, the TRB management and
the NLRC of his right to exercise and enforce his attorney's lien over the award of
holiday pay differential through a letter dated October 8, 1990. 11

Thereafter, on July 2, 1991, private respondent filed a motion before Labor Arbiter
Lorenzo for the determination of his attorney's fees, praying that ten percent (10%)
of the total award for holiday pay differential computed by TRB at P175,794.32, or
the amount of P17,579.43, be declared as his attorney's fees, and that petitioner
union be ordered to pay and remit said amount to him. 12
The TRB management manifested before the labor arbiter that they did not wish to
oppose or comment on private respondent's motion as the claim was directed
against the union, 13 while petitioner union filed a comment and opposition to said
motion on July 15, 1991. 14 After considering the position of the parties, the labor
arbiter issued an order 15 on November 26, 1991 granting the motion of private
respondent, as follows:

WHEREFORE, premises considered, it is hereby ordered that the TRADERS ROYAL


BANK EMPLOYEES UNION with offices at Kanlaon Towers, Roxas Boulevard is hereby
ordered (sic) to pay without delay the attorney's fees due the movant law firm,
E.N.A. CRUZ and ASSOCIATES the amount of P17,574.43 or ten (10%) per cent of
the P175,794.32 awarded by the Supreme Court to the members of the former.

This constrained petitioner to file an appeal with the NLRC on December 27, 1991,
seeking a reversal of that order. 16

On October 19, 1994, the First Division of the NLRC promulgated a resolution
affirming the order of the labor arbiter. 17 The motion for reconsideration filed by
petitioner was denied by the NLRC in a resolution dated May 23, 1995, 18hence the
petition at bar.

Petitioner maintains that the NLRC committed grave abuse of discretion amounting
to lack of jurisdiction in upholding the award of attorney's fees in the amount of
P17,574.43, or ten percent (10%) of the P175,794.32 granted as holiday pay
differential to its members, in violation of the retainer agreement; and that the
challenged resolution of the NLRC is null and void, 19 for the reasons hereunder
stated.

Although petitioner union concedes that the NLRC has jurisdiction to decide claims
for attorney's fees, it contends that the award for attorney's fees should have been
incorporated in the main case and not after the Supreme Court had already
reviewed and passed upon the decision of the NLRC. Since the claim for attorney's
fees by private respondent was neither taken up nor approved by the Supreme
Court, no attorney's fees should have been allowed by the NLRC.

Thus, petitioner posits that the NLRC acted without jurisdiction in making the award
of attorney's fees, as said act constituted a modification of a final and executory
judgment of the Supreme Court which did not award attorney's fees. It then cited
decisions of the Court declaring that a decision which has become final and
executory can no longer be altered or modified even by the court which rendered
the same.

On the other hand, private respondent maintains that his motion to determine
attorney's fees was just an incident of the main case where petitioner was awarded
its money claims. The grant of attorney's fees was the consequence of his exercise
of his attorney's lien. Such lien resulted from and corresponds to the services he
rendered in the action wherein the favorable judgment was obtained. To include the
award of the attorney's fees in the main case presupposes that the fees will be paid
by TRB to the adverse party. All that the non-inclusion of attorney's fees in the
award means is that the Supreme Court did not order TRB to pay the opposing party
attorney's fees in the concept of damages. He is not therefore precluded from filing
his motion to have his own professional fees adjudicated.

In view of the substance of the arguments submitted by petitioner and private


respondent on this score, it appears necessary to explain and consequently clarify
the nature of the attorney's fees subject of this petition, in order to dissipate the
apparent confusion between and the conflicting views of the parties.

There are two commonly accepted concepts of attorney's fees, the so-called
ordinary and extraordinary. 20 In its ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer by his client for the legal services he has
rendered to the latter. The basis of this compensation is the fact of his employment
by and his agreement with the client.

In its extraordinary concept, an attorney's fee is an indemnity for damages ordered


by the court to be paid by the losing party in a litigation. The basis of this is any of
the cases provided by law where such award can be made, such as those authorized
in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless
they have agreed that the award shall pertain to the lawyer as additional
compensation or as part thereof.

It is the first type of attorney's fees which private respondent demanded before the
labor arbiter. Also, the present controversy stems from petitioner's apparent
misperception that the NLRC has jurisdiction over claims for attorney's fees only
before its judgment is reviewed and ruled upon by the Supreme Court, and that
thereafter the former may no longer entertain claims for attorney's fees.

It will be noted that no claim for attorney's fees was filed by private respondent
before the NLRC when it acted on the money claims of petitioner, nor before the
Supreme Court when it reviewed the decision of the NLRC. It was only after the High
Tribunal modified the judgment of the NLRC awarding the differentials that private
respondent filed his claim before the NLRC for a percentage thereof as attorney's
fees.

It would obviously have been impossible, if not improper, for the NLRC in the first
instance and for the Supreme Court thereafter to make an award for attorney's fees
when no claim therefor was pending before them. Courts generally rule only on
issues and claims presented to them for adjudication. Accordingly, when the labor
arbiter ordered the payment of attorney's fees, he did not in any way modify the
judgment of the Supreme Court.
As an adjunctive episode of the action for the recovery of bonus differentials in
NLRC-NCR Certified Case No. 0466, private respondent's present claim for attorney's
fees may be filed before the NLRC even though or, better stated, especially after its
earlier decision had been reviewed and partially affirmed. It is well settled that a
claim for attorney's fees may be asserted either in the very action in which the
services of a lawyer had been rendered or in a separate action. 21

With respect to the first situation, the remedy for recovering attorney's fees as an
incident of the main action may be availed of only when something is due to the
client. 22 Attorney's fees cannot be determined until after the main litigation has
been decided and the subject of the recovery is at the disposition of the court. The
issue over attorney's fees only arises when something has been recovered from
which the fee is to be paid. 23

While a claim for attorney's fees may be filed before the judgment is rendered, the
determination as to the propriety of the fees or as to the amount thereof will have
to be held in abeyance until the main case from which the lawyer's claim for
attorney's fees may arise has become final. Otherwise, the determination to be
made by the courts will be premature. 24 Of course, a petition for attorney's fees
may be filed before the judgment in favor of the client is satisfied or the proceeds
thereof delivered to the client. 25

It is apparent from the foregoing discussion that a lawyer has two options as to
when to file his claim for professional fees. Hence, private respondent was well
within his rights when he made his claim and waited for the finality of the judgment
for holiday pay differential, instead of filing it ahead of the award's complete
resolution. To declare that a lawyer may file a claim for fees in the same action only
before the judgment is reviewed by a higher tribunal would deprive him of his
aforestated options and render ineffective the foregoing pronouncements of this
Court.

Assailing the rulings of the labor arbiter and the NLRC, petitioner union insists that it
is not guilty of unjust enrichment because all attorney's fees due to private
respondent were covered by the retainer fee of P3,000.00 which it has been
regularly paying to private respondent under their retainer agreement. To be
entitled to the additional attorney's fees as provided in Part D (Special Billings) of
the agreement, it avers that there must be a separate mutual agreement between
the union and the law firm prior to the performance of the additional services by the
latter. Since there was no agreement as to the payment of the additional attorney's
fees, then it is considered waived.

En contra, private respondent contends that a retainer fee is not the attorney's fees
contemplated for and commensurate to the services he rendered to petitioner. He
asserts that although there was no express agreement as to the amount of his fees
for services rendered in the case for recovery of differential pay, Article 111 of the
Labor Code supplants this omission by providing for an award of ten percent (10%)
of a money judgment in a labor case as attorney's fees.

It is elementary that an attorney is entitled to have and receive a just and


reasonable compensation for services performed at the special instance and
request of his client. As long as the lawyer was in good faith and honestly trying to
represent and serve the interests of the client, he should have a reasonable
compensation for such services. 26 It will thus be appropriate, at this juncture, to
determine if private respondent is entitled to an additional remuneration under the
retainer agreement 27 entered into by him and petitioner.

The parties subscribed therein to the following stipulations:

xxx xxx xxx

The Law Firm shall handle cases and extend legal services under the parameters of
the following terms and conditions:

A. GENERAL SERVICES

1. Assurance that an Associate of the Law Firm shall be designated and be available
on a day-to-day basis depending on the Union's needs;

2. Legal consultation, advice and render opinion on any actual and/or anticipatory
situation confronting any matter within the client's normal course of business;

3. Proper documentation and notarization of any or all transactions entered into by


the Union in its day-to-day course of business;

4. Review all contracts, deeds, agreements or any other legal document to which
the union is a party signatory thereto but prepared or caused to be prepared by any
other third party;

5. Represent the Union in any case wherein the Union is a party litigant in any court
of law or quasi-judicial body subject to certain fees as qualified hereinafter;

6. Lia(i)se with and/or follow-up any pending application or any papers with any
government agency and/or any private institution which is directly related to any
legal matter referred to the Law Firm.

B. SPECIAL LEGAL SERVICES

1. Documentation of any contract and other legal instrument/documents arising


and/or required by your Union which do not fall under the category of its ordinary
course of business activity but requires a special, exhaustive or detailed study and
preparation;

2. Conduct or undertake researches and/or studies on special projects of the Union;


3. Render active and actual participation or assistance in conference table
negotiations with TRB management or any other third person(s), juridical or natural,
wherein the presence of counsel is not for mere consultation except CBA
negotiations which shall be subject to a specific agreement (pursuant to PD 1391
and in relation to BP 130 & 227);

4. Preparation of Position Paper(s), Memoranda or any other pleading for and in


behalf of the Union;

5. Prosecution or defense of any case instituted by or against the Union; and,

6. Represent any member of the Union in any proceeding provided that the
particular member must give his/her assent and that prior consent be granted by
the principal officers. Further, the member must conform to the rules and policies of
the Law Firm.

C. FEE STRUCTURE

In consideration of our commitment to render the services enumerated above when


required or necessary, your Union shall pay a monthly retainer fee of THREE
THOUSAND PESOS (PHP 3,000.00), payable in advance on or before the fifth day of
every month.

An Appearance Fee which shall be negotiable on a case-to-case basis.

Any and all Attorney's Fees collected from the adverse party by virtue of a
successful litigation shall belong exclusively to the Law Firm.

It is further understood that the foregoing shall be without prejudice to our claim for
reimbursement of all out-of-pocket expenses covering filing fees, transportation,
publication costs, expenses covering reproduction or authentication of documents
related to any matter referred to the Law Firm or that which redound to the benefit
of the Union.

D. SPECIAL BILLINGS

In the event that the Union avails of the services duly enumerated in Title B, the
Union shall pay the Law Firm an amount mutually agreed upon PRIOR to the
performance of such services. The sum agreed upon shall be based on actual time
and effort spent by the counsel in relation to the importance and magnitude of the
matter referred to by the Union. However, charges may be WAIVED by the Law Firm
if it finds that time and efforts expended on the particular services are
inconsequential but such right of waiver is duly reserved for the Law Firm.

xxx xxx xxx

The provisions of the above contract are clear and need no further interpretation; all
that is required to be done in the instant controversy is its application. The
P3,000.00 which petitioner pays monthly to private respondent does not cover the
services the latter actually rendered before the labor arbiter and the NLRC in behalf
of the former. As stipulated in Part C of the agreement, the monthly fee is intended
merely as a consideration for the law firm's commitment to render the services
enumerated in Part A (General Services) and Part B (Special Legal Services) of the
retainer agreement.

The difference between a compensation for a commitment to render legal services


and a remuneration for legal services actually rendered can better be appreciated
with a discussion of the two kinds of retainer fees a client may pay his lawyer. These
are a general retainer, or a retaining fee, and a special
retainer. 28

A general retainer, or retaining fee, is the fee paid to a lawyer to secure his future
services as general counsel for any ordinary legal problem that may arise in the
routinary business of the client and referred to him for legal action. The future
services of the lawyer are secured and committed to the retaining client. For this,
the client pays the lawyer a fixed retainer fee which could be monthly or otherwise,
depending upon their arrangement. The fees are paid whether or not there are
cases referred to the lawyer. The reason for the remuneration is that the lawyer is
deprived of the opportunity of rendering services for a fee to the opposing party or
other parties. In fine, it is a compensation for lost opportunities.

A special retainer is a fee for a specific case handled or special service rendered by
the lawyer for a client. A client may have several cases demanding special or
individual attention. If for every case there is a separate and independent contract
for attorney's fees, each fee is considered a special retainer.

As to the first kind of fee, the Court has had the occasion to expound on its concept
in Hilado vs. David 29 in this wise:

There is in legal practice what is called a "retaining fee," the purpose of which
stems from the realization that the attorney is disabled from acting as counsel for
the other side after he has given professional advice to the opposite party, even if
he should decline to perform the contemplated services on behalf of the latter. It is
to prevent undue hardship on the attorney resulting from the rigid observance of
the rule that a separate and independent fee for consultation and advice was
conceived and authorized. "A retaining fee is a preliminary fee given to an attorney
or counsel to insure and secure his future services, and induce him to act for the
client. It is intended to remunerate counsel for being deprived, by being retained by
one party, of the opportunity of rendering services to the other and of receiving pay
from him, and the payment of such fee, in the absence of an express understanding
to the contrary, is neither made nor received in payment of the services
contemplated; its payment has no relation to the obligation of the client to pay his
attorney for the services for which he has retained him to perform." (Emphasis
supplied).

Evidently, the P3,000.00 monthly fee provided in the retainer agreement between
the union and the law firm refers to a general retainer, or a retaining fee, as said
monthly fee covers only the law firm's pledge, or as expressly stated therein, its
"commitment to render the legal services enumerated." The fee is not payment for
private respondent's execution or performance of the services listed in the contract,
subject to some particular qualifications or permutations stated there.

Generally speaking, where the employment of an attorney is under an express valid


contract fixing the compensation for the attorney, such contract is conclusive as to
the amount of compensation. 30 We cannot, however, apply the foregoing rule in
the instant petition and treat the fixed fee of P3,000.00 as full and sufficient
consideration for private respondent's services, as petitioner would have it.

We have already shown that the P3,000.00 is independent and different from the
compensation which private respondent should receive in payment for his services.
While petitioner and private respondent were able to fix a fee for the latter's
promise to extend services, they were not able to come into agreement as to the
law firm's actual performance of services in favor of the union. Hence, the retainer
agreement cannot control the measure of remuneration for private respondent's
services.

We, therefore, cannot favorably consider the suggestion of petitioner that private
respondent had already waived his right to charge additional fees because of their
failure to come to an agreement as to its payment.

Firstly, there is no showing that private respondent unequivocally opted to waive


the additional charges in consonance with Part D of the agreement. Secondly, the
prompt actions taken by private respondent, i.e., serving notice of charging lien and
filing of motion to determine attorney's fees, belie any intention on his part to
renounce his right to compensation for prosecuting the labor case instituted by the
union. And, lastly, to adopt such theory of petitioner may frustrate private
respondent's right to attorney's fees, as the former may simply and unreasonably
refuse to enter into any special agreement with the latter and conveniently claim
later that the law firm had relinquished its right because of the absence of the
same.

The fact that petitioner and private respondent failed to reach a meeting of the
minds with regard to the payment of professional fees for special services will not
absolve the former of civil liability for the corresponding remuneration therefor in
favor of the latter.

Obligations do not emanate only from contracts. 31 One of the sources of extra-
contractual obligations found in our Civil Code is the quasi-contract premised on the
Roman maxim that nemo cum alterius detrimento locupletari protest. As embodied
in our law, 32 certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly enriched or
benefited at the expense of another.

A quasi-contract between the parties in the case at bar arose from private
respondent's lawful, voluntary and unilateral prosecution of petitioner's cause
without awaiting the latter's consent and approval. Petitioner cannot deny that it did
benefit from private respondent's efforts as the law firm was able to obtain an
award of holiday pay differential in favor of the union. It cannot even hide behind
the cloak of the monthly retainer of P3,000.00 paid to private respondent because,
as demonstrated earlier, private respondent's actual rendition of legal services is
not compensable merely by said amount.

Private respondent is entitled to an additional remuneration for pursuing legal


action in the interest of petitioner before the labor arbiter and the NLRC, on top of
the P3,000.00 retainer fee he received monthly from petitioner. The law firm's
services are decidedly worth more than such basic fee in the retainer agreement.
Thus, in Part C thereof on "Fee Structure," it is even provided that all attorney's fees
collected from the adverse party by virtue of a successful litigation shall belong
exclusively to private respondent, aside from petitioner's liability for appearance
fees and reimbursement of the items of costs and expenses enumerated therein.

A quasi-contract is based on the presumed will or intent of the obligor dictated by


equity and by the principles of absolute justice. Some of these principles are: (1) It
is presumed that a person agrees to that which will benefit him; (2) Nobody wants
to enrich himself unjustly at the expense of another; and (3) We must do unto
others what we want them to do unto us under the same circumstances. 33

As early as 1903, we allowed the payment of reasonable professional fees to an


interpreter, notwithstanding the lack of understanding with his client as to his
remuneration, on the basis of quasi-contract. 34 Hence, it is not necessary that the
parties agree on a definite fee for the special services rendered by private
respondent in order that petitioner may be obligated to pay compensation to the
former. Equity and fair play dictate that petitioner should pay the same after it
accepted, availed itself of, and benefited from private respondent's services.

We are not unaware of the old ruling that a person who had no knowledge of, nor
consented to, or protested against the lawyer's representation may not be held
liable for attorney's fees even though he benefited from the lawyer's
services. 35 But this doctrine may not be applied in the present case as petitioner
did not object to private respondent's appearance before the NLRC in the case for
differentials.

Viewed from another aspect, since it is claimed that petitioner obtained


respondent's legal services and assistance regarding its claims against the bank,
only they did not enter into a special contract regarding the compensation therefor,
there is at least the innominate contract of facio ut des (I do that you may
give). 36 This rule of law, likewise founded on the principle against unjust
enrichment, would also warrant payment for the services of private respondent
which proved beneficial to petitioner's members. In any case, whether there is an
agreement or not, the courts can fix a reasonable compensation which lawyers
should receive for their professional services. 37 However, the value of private
respondent's legal services should not be established on the basis of Article 111 of
the Labor Code alone. Said article provides:

Art. 111. Attorney's fees. (a) In cases of unlawful withholding of wages the
culpable party may be assessed attorney's fees equivalent to ten percent of the
amount of the wages recovered.

xxx xxx xxx

The implementing provision 38 of the foregoing article further states:

Sec. 11. Attorney's fees. Attorney's fees in any judicial or administrative


proceedings for the recovery of wages shall not exceed 10% of the amount
awarded. The fees may be deducted from the total amount due the winning party.

In the first place, the fees mentioned here are the extraordinary attorney's fees
recoverable as indemnity for damages sustained by and payable to the prevailing
part. In the second place, the ten percent (10%) attorney's fees provided for in
Article 111 of the Labor Code and Section 11, Rule VIII, Book III of the Implementing
Rules is the maximum of the award that may thus be granted. 39 Article 111 thus
fixes only the limit on the amount of attorney's fees the victorious party may
recover in any judicial or administrative proceedings and it does not even prevent
the NLRC from fixing an amount lower than the ten percent (10%) ceiling prescribed
by the article when circumstances warrant it. 40

The measure of compensation for private respondent's services as against his client
should properly be addressed by the rule of quantum meruit long adopted in this
jurisdiction. Quantum meruit, meaning "as much as he deserves," is used as the
basis for determining the lawyer's professional fees in the absence of a
contract, 41but recoverable by him from his client.

Where a lawyer is employed without a price for his services being agreed upon, the
courts shall fix the amount on quantum meruit basis. In such a case, he would be
entitled to receive what he merits for his services. 42

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 was
expecting to be paid compensation therefor. The doctrine of quantum meruit is a
device to prevent undue enrichment based on the equitable postulate that it is
unjust for a person to retain benefit without paying for it. 43

Over the years and through numerous decisions, this Court has laid down guidelines
in ascertaining the real worth of a lawyer's services. These factors are now codified
in Rule 20.01, Canon 20 of the Code of Professional Responsibility and should be
considered in fixing a reasonable compensation for services rendered by a lawyer
on the basis of quantum meruit. These are: (a) the time spent and the extent of
services rendered or required; (b) the novelty and difficulty of the questions
involved; (c) the importance of the subject matter; (d) the skill demanded; (e) the
probability of losing other employment as a result of acceptance of the proffered
case; (f) the customary charges for similar services and the schedule of fees of the
IBP chapter to which the lawyer belongs; (g) the amount involved in the controversy
and the benefits resulting to the client from the services; (h) the contingency or
certainty of compensation; (i) the character of the employment, whether occasional
or established; and (j) the professional standing of the lawyer.

Here, then, is the flaw we find in the award for attorney's fees in favor of private
respondent. Instead of adopting the above guidelines, the labor arbiter forthwith but
erroneously set the amount of attorney's fees on the basis of Article 111 of the
Labor Code. He completely relied on the operation of Article 111 when he fixed the
amount of attorney's fees at P17,574.43. 44 Observe the conclusion stated in his
order. 45

xxx xxx xxx

FIRST. Art. 111 of the Labor Code, as amended, clearly declares movant's right to a
ten (10%) per cent of the award due its client. In addition, this right to ten (10%) per
cent attorney's fees is supplemented by Sec. 111, Rule VIII, Book III of the Omnibus
Rules Implementing the Labor Code, as amended.

xxx xxx xxx

As already stated, Article 111 of the Labor Code regulates the amount recoverable
as attorney's fees in the nature of damages sustained by and awarded to
the prevailing party. It may not be used therefore, as the lone standard in fixing the
exact amount payable to the lawyer by his client for the legal services he rendered.
Also, while it limits the maximum allowable amount of attorney's fees, it does not
direct the instantaneous and automatic award of attorney's fees in such maximum
limit.

It, therefore, behooves the adjudicator in questions and circumstances similar to


those in the case at bar, involving a conflict between lawyer and client, to observe
the above guidelines in cases calling for the operation of the principles of quasi-
contract and quantum meruit, and to conduct a hearing for the proper
determination of attorney's fees. The criteria found in the Code of Professional
Responsibility are to be considered, and not disregarded, in assessing the proper
amount. Here, the records do not reveal that the parties were duly heard by the
labor arbiter on the matter and for the resolution of private respondent's fees.

It is axiomatic that the reasonableness of attorney's fees is a question of


fact. 46 Ordinarily, therefore, we would have remanded this case for further
reception of evidence as to the extent and value of the services rendered by private
respondent to petitioner. However, so as not to needlessly prolong the resolution of
a comparatively simple controversy, we deem it just and equitable to fix in the
present recourse a reasonable amount of attorney's fees in favor of private
respondent. For that purpose, we have duly taken into account the accepted
guidelines therefor and so much of the pertinent data as are extant in the records of
this case which are assistive in that regard. On such premises and in the exercise of
our sound discretion, we hold that the amount of P10,000.00 is a reasonable and
fair compensation for the legal services rendered by private respondent to
petitioner before the labor arbiter and the NLRC.

WHEREFORE, the impugned resolution of respondent National Labor Relations


Commission affirming the order of the labor arbiter is MODIFIED, and petitioner is
hereby ORDERED to pay the amount of TEN THOUSAND PESOS (P10,000.00) as
attorney's fees to private respondent for the latter's legal services rendered to the
former.

SO ORDERED.