FIRST
DIVISION
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GUENTER BACH,
Petitioner, - versus
- ONGKIKO KALAW MANHIT & ACORDA LAW
OFFICES, Respondent. |
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G.R. No. 160334 Present: PANGANIBAN, C.J. Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO,
SR., and CHICO-NAZARIO,
JJ. Promulgated: |
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CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to reverse the Decision[1]
dated
The facts as culled from the records of the
case are as follows:
On
(a)
seven and one-half (7 ½ % ) of all cash recoveries, including damages, interests,
attorney’s fees and costs; as well as
(b) five percent (5 %) of the market value of all properties awarded to [the petitioner] by the court or obtained through the compromise agreement, valued at the time of recovery.[2]
However,
on P1,000,000.00
plus 2% interest for every month of delay in payment, based on the provision
for termination of services stated in their Fee Agreement, thus:
(C) Interest for late payment
All fees mentioned herein are payable within seven (7) days from receipt of our statement of account. It is understood that all late payments shall be subject to interest payment at the rate of 2 % per month of delay, a fraction of a month being considered as one month, counted from the date the fees shall fall due, without need of prior demand.
x x x x
(F) Termination Clause
It is understood that you may terminate our services at any time. In such an event, we shall be entitled to collect fees for legal services already performed and results obtained based on quantum meruit.”[4]
On
On P1,000,000.00 on
all the titles of the spouses Bach’s personal and real properties enumerated in
the notice of charging lien.
On
Despite
respondent’s demands for his legal fees, petitioner failed and refused to pay. Thus, respondent filed a Complaint[8]
for a sum of money also before the RTC of Makati,
Branch 148, docketed as Civil Case No. 99-514. Respondent prayed for the payment of the
following: P1,000,000.00 as the latter’s lawful fees for services
rendered in Civil Case No. 95-224, plus 2% interest from date of final demand
until paid; P250,000.00 as exemplary damages; P200,000.00
representing billable time spent in prosecuting the case, plus another P150,000.00
for any appeal taken; and P50,000.00 as litigation expenses and the cost
of suit.
Within
the period for filing an Answer, petitioner filed a Motion[9] to
dismiss on the ground that respondent’s claim had already been paid, waived,
abandoned or otherwise extinguished. Petitioner
contended that prior to respondent’s withdrawal as counsel in Civil Case No.
95-224, petitioner had already paid respondent’s services in the total amount
of P200,000.00. On
On
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant and the latter is hereby ordered to pay the following:
1.
The amount of P750,000.00 as plaintiff’s lawful
fees for services rendered under Civil Case No. 95-224, plus interest at the
rate of 2% per month from the date of demand until paid;
2.
P700,000.00 representing billable time which was
spent in prosecuting this case;
3.
P50,000.00 as and litigation expenses, and
4. Costs of suit.[12]
Not
satisfied, petitioner appealed to the Court of Appeals, which modified the RTC Decision,
thus:
WHEREFORE, Based on the foregoing
premises, the instant appeal is PARTLY GRANTED and the appealed P700,000.00
representing billable time allegedly spent in the prosecution of the case a quo is hereby DELETED. All other
aspects of the appealed DECISION are UPHELD.[13]
Hence,
this Petition filed by petitioner Guenter Bach
raising the following issues to wit:
WHETHER OR NOT UNDER
THE CONCEPT OF QUANTUM MERUIT, THE AMOUNT OF P750,000.00 AS FEES FOR SERVICES
RENDERED WITH INTEREST PEGGED AT 2% A MONTH FROM DATE OF DEMAND UNTIL FULLY PAID
IS REASONABLE
WHETHER OR NOT THERE
IS LEGAL BASIS TO AWARD P50,000.00 AS AND FOR LITIGATION EXPENSES AND
COSTS OF SUIT.[14]
On the
first issue, petitioner contends that the P750,000.00 awarded to the
respondent by way of quantum meruit, with interest of 2% a month from date of demand
until fully paid, is excessive, unreasonable and confiscatory. Thus, petitioner prays for reduction of the
same.
Both the Court of Appeals and the
trial court approved the attorney’s fees in the total amounts of P750,000.00
plus 2 % interest for the services
rendered by respondent in Civil Case No. 95-224. In this regard, the rule is that the issue of
the reasonableness of attorney’s fees based on quantum meruit is a question of fact, and
well-settled is the rule that conclusions and findings of fact by the lower
courts are entitled to great weight on appeal and will not be disturbed except
for strong and cogent reasons. The
findings of the Court of Appeals by itself, which are supported by substantial
evidence, are almost beyond the power of review by the Supreme Court.[15] Thus, in the exercise of the Supreme Court’s
power of review the findings of facts of the Court of Appeals are conclusive and
binding on the Supreme Court. There are,
however, recognized exceptions to this rule, namely: (1) when the findings are
grounded entirely on speculation, surmises or conjectures; (2) when the
inference made is manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making the
findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellee
and the appellant; (7) when the findings are contrary to the trial court; (8)
when the findings are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as
in the petitioner’s main and reply briefs are not disputed by the respondent;
(10) when the findings of facts are premised on the supposed absence of
evidence and contradicted by the evidence on record; and (11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which if properly considered, would justify a different conclusion.[16] Exceptions (4) and (11) are present in the
case at bar, and so this Court shall make its own determination of the facts
relevant for the resolution of the case.
Ordinarily, therefore, we would have
remanded this case for further reception of evidence as to the extent and value
of the services rendered by 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 respondent.
There are two concepts of attorney’s
fees. In the ordinary sense, attorney’s
fees represent the reasonable compensation paid to a lawyer by his client for
the legal services rendered to the latter. On the other hand, in its extraordinary
concept, attorney’s fees may be awarded by the court as indemnity for damages
to be paid by the losing party to the prevailing party.[17]
The issue in this case concerns
attorney’s fees in the ordinary concept. Generally, the amount of attorney’s
fees due is that stipulated in the retainer agreement which is conclusive as to
the amount of the lawyer’s compensation. In the absence thereof, the amount of
attorney’s fees is fixed on the basis of quantum
meruit, i.e., the reasonable worth of the
attorney’s services. Courts may
ascertain also if the attorney’s fees are found to be excessive, what is
reasonable under the circumstances.[18] In no case, however, must a lawyer be allowed
to recover more than what is reasonable, pursuant to Section 24, Rule 138 of
the Rules of Court, which provides:
SEC. 24. Compensation of attorney’s fees; agreement as to fees.- An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject - matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. (Underscoring supplied.)
We have identified the circumstances
to be considered in determining the reasonableness of a claim for attorney’s
fees as follows: (1) the amount and character of the service rendered; (2)
labor, time, and trouble involved; (3) the nature and importance of the
litigation or business in which the services were rendered; (4) the
responsibility imposed; (5) the amount of money or the value of the property
affected by the controversy or involved in the employment; (6) the skill and
experience called for in the performance of the services; (7) the professional
character and social standing of the attorney; (8) the results secured; and (9)
whether the fee is absolute or contingent, it being recognized that an attorney
may properly charge a much larger fee when it is contingent than when it is not.[19]
Rule 20.1, Canon 20 of the Code of
Professional Responsibility enumerates the following factors which should guide
a lawyer in determining his fees:
(a) the time spent and 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 the acceptance of the proffered case;
(f) the customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs;
(g) the amount involved in the controversy and the benefits resulting to the client from the service;
(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.
In determining a reasonable fee to be
paid to respondent as compensation for their services on quantum meruit, based on the factors abovequoted, it is proper to consider all the facts and
circumstances obtaining in this case.
It is undisputed that respondent firm
had rendered services as counsel for the petitioners in Civil Case No. 95-244. The services rendered consist of the
following:
1.
Respondent was able to annotate a notice[20]
of lis pendens on the
property of Spouses Bach in
2.
Respondent was likewise able to annotate a notice[21]
of lis pendens on
the property of Spouses Bach in
3. Further, respondent annotated a notice[22]
of lis pendens on
the property of Spouses Bach in Dasmarinas,
4.
Additionally, respondent annotated a notice[23]
of lis pendens on
the property of Spouses Bach in Tanza,
5.
Respondent also worked on the annotation of the notice[24]
of lis pendens on
the property of Spouses Bach in
6.
Respondent worked on the annotation of a notice of lis pendens on the property of Spouses Bach
in Dasmariñas,
7.
Respondent annotated a notice[25]
of lis pendens on
the property of Spouses Bach situated in
8.
Respondent filed the Petition[26]
for Declaration of Nullity of Marriage and Dissolution of the Conjugal
Partnership of Gains of petitioner with his wife;
9.
Respondent prepared an affidavit[27]
in favor of petitioner attesting to the fact of petitioner’s marriage and their
properties acquired during his marriage with Luzviminda
Bach:
10.
Respondent prepared an ex parte motion[28]
to declare petitioner’s wife to have waived her right to file answer for
failure to file the same within the period granted by law and to direct the
public prosecutor to determine whether or not a collusion exist;
11.
Respondent prepared a Petition[29]
for appointment of a receiver and to compel petitioner’s wife to render an
accounting;
12.
Other services included the filling of several oppositions[30]
to certain motions filed by petitioner’s wife;
13.
Respondent filed a motion[31]
to set the case for preliminary investigation;
14.
Respondent filed an ex parte motion[32]
to declare petitioner’s wife in default;
15.
Respondent submitted a supplemental comment[33]
on the motion for leave to withdraw funds from Certificate of Participation
filed by petitioner’s wife;
16.
Respondent filed a manifestation and motion[34]
praying the court to direct petitioner’s wife to designate her lead counsel in
the case;
17.
Respondent prepared a Reply[35]
to comments on opposition of petitioner;
18.
Respondent was able to secure an Order[36]
from the said court freezing the United Coconut Planters Bank (UCPB) account in
the name of petitioner’s wife, Luzviminda Bach,
containing about P6,500,000.00, representing the balance of the proceeds
from the sale of their conjugal property in Pasig
City;
19.
Respondent represented petitioner in numerous hearings in Civil Case No.
95-224, evidenced by the signatures of the lawyers of respondent Law Firm in
the minutes dated 25 April 1995, 27 April, 1995, 14 June 1995, 27 June 1995, 1
August 1995, 11 August 1995, 22 September 1995,10 October 1995, 17 October
1995, 1 December 1995, 7 December 1995, 29 March 1996 and 16 January 1997;[37]
20.
Conducted several preliminary and post litigation conferences in the
proceedings for preliminary injunction leading to the freezing of the bank
account of the parties; and
21.
Prepared and sent out numerous letters to third parties and entities to
protect the interest of petitioner and notices to petitioner updating him of
the status of the case and the courses of action taken by respondent Law Firm.[38]
In sum, the services rendered by the respondent
as enumerated above and as admitted[39]
by Atty. Mario Ongkiko during the ex parte
hearing, consist of annotating notice of lis pendens on the conjugal properties of
petitioner and his wife; filing the Petition for Declaration of Nullity of
Marriage; preparing and filing various pleadings and documents relevant to the
case; obtaining a freeze order of petitioner’s funds in the UCPB; attending
hearings in Civil Case No. 05-224, and sending notices to petitioner updating
the latter of the status of the case. Nothing
in Civil Case No. 95-224 so far appears complicated and no extra ordinary skill
was needed for lawyers of respondent Law Firm to accomplish what they had done
in the case before they withdrew their appearance. We do not find herein a situation so
intricate that demands more than a careful scrutiny of the legal matters
involved. These are simply the normal
duties of a lawyer that he is bound by law to render to his clients with utmost
fidelity for which his client must not be burdened to pay an extra price. It bears stressing that at the time
respondent firm withdrew their appearance due to policy differences with
petitioner, the case was still in its initial stage.
Guided by the above yardstick and so
much of the pertinent data as are extant in the records of this case and in the
exercise of our sound discretion, we hold that the amount of P500,000.00
is a reasonable and fair compensation for the legal services rendered by respondent to the petitioner.
The imposition of legal interest on
the amount payable to private respondent as attorney’s fees is unwarranted. Even as we agree that parties can freely
stipulate on the terms of payment, still the imposition of interest in the
payment of attorney’s fees is not justified. In the case of Cortes v. Court of Appeals,[40] we ruled that Article 2209[41]
of the Civil Code does not even justify the imposition of legal interest on the
payment of attorney’s fees as it is a provision of law governing ordinary
obligations and contracts. It deleted
the 6% interest imposed by the appellate court on the payment of attorney’s
fees. It ratiocinated by citing Mambulao Lumber Co. v. Philippine National Bank,[42] thus:
Contracts for attorney’s services in this jurisdiction stands upon an
entirely different footing from contracts for the payment of compensation for
any other services. x x x [A]n attorney is not entitled
in the absence of express contract to recover more than a reasonable
compensation for his services; and even when an express contract is made, the
court can ignore it and limit the recovery to reasonable compensation if the
amount of the stipulated fee is found by the court to be unreasonable. This is
a very different rule from that announced in section 1091 of the Civil Code
with reference to the obligation of contracts in general, where it is said that
such obligation has the force of law between the contracting parties. Had the
plaintiff herein made an express contract to pay his attorney an uncontingent fee of P2,115.25 for the services to be
rendered in reducing the note here in suit to judgment, it would not have been
enforced against him had he seen fit to oppose it, as such a fee is obviously
far greater than is necessary to remunerate the attorney for the work involved
and is therefore unreasonable. In order to enable the court to ignore an
express contract for attorney’s fees, it is necessary to show, as in other contracts, that it is contrary
to morality or public policy (Art.1255, Civil Code). It is enough that it
is unreasonable or unconscionable. (Emphases
supplied.)
We have held that lawyering
is not a moneymaking venture and lawyers are not merchants.[43] 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 governmental interference,
is impressed with a public interest, for which it is subject to State
regulation.[44]
A lawyer is not merely the defender of his
client’s cause and a trustee of his client’s cause of action and assets; he is
also, and first and foremost, an officer of the court and participates in the
fundamental function of administering justice in society.[45] It follows that a lawyer’s compensation for
professional services rendered are subject to the supervision of the court, not
just to guarantee that the fees he charges and receives remain reasonable and
commensurate with the services rendered, but also to maintain the dignity and
integrity of the legal profession to which he belongs. Upon taking his
attorney’s oath as an officer of the court, a lawyer submits himself to the
authority of the courts to regulate his right to charge professional fees.[46]
Though we reduced the award of
attorney’s fees and disallowed the imposition of interest thereon, the fact
that an attorney plays a vital role in the administration of justice
underscores the need to secure to him his honorarium lawfully earned as a means
to preserve the decorum and respectability of the legal profession. A lawyer is as much entitled to judicial
protection against injustice, imposition of fraud on the part of his client as
the client against abuse on the part of his counsel. The duty of the court is not alone to see
that a lawyer acts in a proper and lawful manner; it is also its duty to see
that a lawyer is paid his just fees. With
his capital consisting only of his brains and with his skill acquired at
tremendous cost not only in money but in expenditure of time and energy, he is
entitled to the protection of any
judicial tribunal against any attempt on the part of his client to escape
payment of his just compensation. It
would be ironic if after putting forth the best in him to secure justice for
his client, he himself would not get his due.[47]
Thus,
the Court of Appeals did not err in awarding expenses of litigation. Article
2208, paragraphs 2, 5 and 11, of the Civil Code, authorize the recovery of such fees "(2)
When the defendant's act or omission has compelled the plaintiff to litigate x x x or to incur expenses to
protect his interest; x x x
(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just and demandable claim; x x x and (11) In any other case
where the court deems it just and equitable that attorney's fees and expenses
of litigation should be recovered." Considering the fact that respondent was drawn
into this litigation by petitioner to protect and defend their interest and taking
into account the services already rendered by respondent to petitioner, the sum
of P30,000.00 as expenses of
litigation and cost of suit would be
reasonable under the premises.
WHEREFORE, the
Decision appealed from is AFFIRMED WITH
MODIFICATIONS to the effect that the attorney’s fees awarded to respondent
is REDUCED to P500,000.00,
the legal interest of 2% on the amount due to respondent is DELETED, and the award of litigation
expenses is REDUCED to P30,000.00.
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
Chief Justice
Chairperson
Associate Justice Associate Justice
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ROMEO J.
CALLEJO, SR. Associate Justice |
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Pursuant to Article VIII,
Section 13 of the Constitution, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
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ARTEMIO V.
PANGANIBAN Chief Justice |
[1] Penned by Associate Justice Elvi John S. Asuncion with Associate Justices Godardo A. Jacinto and Lucas P. Bersamin, concurring; rollo, pp. 16-22.
[2] Records, Vol. I, p. 11.
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13] Rollo, pp. 21-22.
[14]
[15] Pimentel v. Court of Appeals, 366 Phil. 494, 501 (1999), citing Atlantic Gulf and Pacific Company of Manila, Inc. v. Court of Appeals, 317 Phil. 707, 713 (1995).
[16] Langkaan Realty Development, Inc v. United Coconut Planters Bank, G.R. No. 139437, 8 December 2000, 347 SCRA 542, 549; Nokom v. National Labor Relations Commission, 390 Phil. 1228, 1242-1243 (2000); Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phils.), Inc., 364 Phil. 541, 546-547 (1999); Sta. Maria v. Court of Appeals, 349 Phil. 275, 282-283 (1998).
[17] Traders Royal Bank Employees Union-Independent v. National Labor Relations Commission, 336 Phil. 705, 717 (1997).
[18] Sesbreno v. Court of Appeals, 314 Phil. 884, 894 (1995).
[19] Research and Services Realty, Inc. v. Court of Appeals, 334 Phil. 652, 668 (1997).
[20] Records, Vol. 2, pp. 344-345.
[21]
[22]
[23]
[24]
[25]
[26]
[27]
[28]
[29]
[30]
[31]
[32]
[33]
[34]
[35]
[36] Records, Vol. 2, p. 301.
[37]
[38]
[39] TSN,
[40] 443 Phil. 42, 54 (2003).
[41] Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum.
[42] 130 Phil. 366, 381-382 (1968).
[43] Canon 1, Canons of Professional Ethics.
[44] Metropolitan
Bank & Trust Company v. Court of Appeals, 181 SCRA 367, 377, citing Canlas v. Court of Appeals, G.R. No. L-77691,
[45] Pineda
v. Atty. De Jesus, G.R. No. 155224,
[46] Sumaoang v. Judge, RTC, Br. XXXI, Guimba, Nueva Ecija, G.R. No. 78173, 26 October 1992, 215 SCRA 136, 143.
[47] Agpalo, LEGAL ETHICS (4th Ed., 1989), pp. 302-303.