FIRST DIVISION

NPC DRIVERS AND MECHANICS ASSOCIATION (NPC DAMA), represented by Its President ROGER S. SAN JUAN, SR., NPC EMPLOYEES & WORKERS UNION (NEWU) – NORTHERN LUZON REGIONAL CENTER, represented by its Regional President JIMMY D. SALMAN, in their own individual capacities and in behalf of the members of the associations and all affected officers and employees of National Power Corporation (NPC), ZOL D. MEDINA, NARCISO M. MAGANTE, VICENTE B. CIRIO, JR., NECITAS B. CAMAMA, in their individual capacities as employees of National Power Corporation, Petitioners, - versus- THE NATIONAL POWER CORPORATION (NPC), NATIONAL POWER BOARD OF DIRECTORS (NPB), JOSE ISIDRO N. CAMACHO as Chairman of the National Power Board of Directors (NPB), ROLANDO S. QUILALA, as President – Officer-in-charge/CEO of National Power Corporation and Member of National Power Board, and VINCENT S. PEREZ, JR., EMILIA T. BONCODIN, MARIUS P. CORPUS, RUBEN S. REINOSO, JR., GREGORY L. DOMINGO and NIEVES L. OSORIO, Respondents.

G.R. No. 156208 Present: YNARES-SANTIAGO, J. Chairperson, AUSTRIA-MARTINEZ, AZCUNA,* TINGA,^* and CHICO-NAZARIO, JJ. Promulgated: September 17, 2008

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R E S O L U T I O N

CHICO-NAZARIO, J.:

For our resolution are several incidents in the above-entitled case that arose and were submitted to us after the promulgation of our Decision[1] on 26 September 2006.

The factual antecedents of the case at bar are briefly recounted below:

Petitioners originally filed before us the present special civil action for Injunction to enjoin respondents from implementing National Power Board (NPB) Resolutions No. 2002-124 and No. 2002-125, both dated 18 November 2002, directing, among other things, the termination of all employees of the National Power Corporation (NPC) on 31 January 2003 in line with the restructuring of the NPC.

The assailed NPB Resolutions were issued in compliance with the provisions of Republic Act No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001” (EPIRA Law), which took effect on 26 June 2001. The EPIRA Law provided a framework for the restructuring of the electric power industry, including the privatization of the assets of the NPC and its transition to the desired competitive structure.

Pursuant to the EPIRA Law, a new NPB was constituted, composed of the Secretary of Finance as Chairman, with the Secretary of Energy, the Secretary of Budget and Management, the Secretary of Agriculture, the Director-General of the National Economic and Development Authority, the Secretary of Environment and Natural Resources, the Secretary of Interior and Local Government, the Secretary of the Department of Trade and Industry, and the President of the NPC as members.

Also in accordance with the EPIRA Law, the Department of Energy (DOE) created the Energy Restructuring Steering Committee (Restructuring Committee) to manage the privatization and restructuring of the NPC, the National Transmission Corporation (TRANSCO), and the Power Sector Assets and Liabilities Management Corporation (PSALM). The Restructuring Committee proposed a new NPC Table of Organization to serve as the overall organizational framework for the realigned functions of the NPC mandated under the EPIRA Law, which was approved by the NPB in NPB Resolution No. 2002-53 dated 11 April 2002.

After reviewing the proposed 2002 NPC Restructuring Plan and assisting in the implementation of its Phase I (Realignment), the Restructuring Committee recommended to the NPB the adoption of measures pertaining to the separation and hiring of NPC personnel. The NPB agreed in the recommendation of the Restructuring Committee and found the need to accordingly amend or refine its Restructuring Plan. The NPB passed NPB Resolution No. 2002-124 on 18 November 2002, providing for the Guidelines on the Separation Program of the NPC and the Selection and Placement of Personnel in the NPC Table of Organization. Under said Resolution, all NPC personnel shall be legally terminated on 31 January 2003, and shall be entitled to separation benefits. The NPB approved on the same day NPB Resolution No. 2002-125, constituting a Transition Team to manage and implement the Separation Program of NPC.

Petitioners, then employed by the NPC, opposed NPB Resolutions No. 2002-124 and No. 2002-125 on the ground that these were not passed by a majority of the NPB. Only three NPB members were actually present during the 18 November 2002 meeting and personally signed the Resolutions in question. Four other NPB members merely sent their representatives or alternates to attend the said meeting, who signed the assailed Resolutions on their behalf.

In their Petition before us, petitioners prayed for the following:

1. A TEMPORARY RESTRAINING ORDER (TRO) to be issued immediately ex parte upon the filing of this petition enjoining, prohibiting and restraining respondents from implementing the questioned [NPB] Resolutions and, thus, maintain and pressure the status quo pending resolution of the prayer for issuance of a writ of preliminary injunction;

2. Upon notice and hearing, a writ of preliminary injunction be issued enjoining, prohibiting and restraining respondents from implementing the questioned [NPB] Resolutions pending the final resolution and decision of the present petition[; and]

3. After hearing on the merits[,] to grant the petition and declare the writ of preliminary injunction perpetual and permanent.

Other reliefs and remedies as may be just and equitable are also prayed for.[2]

We did not issue a TRO or a preliminary injunction, the NPC proceeded with the termination of the employment of petitioners on 31 January 2003 pursuant to the assailed Resolutions.

In our Decision dated 26 September 2006, we sustained the position of the petitioners. We found that there was undue delegation of what was already a delegated power by certain NPB members when they sent their representatives to attend board meetings, and pass and sign board resolutions. The Court reasoned that:

In enumerating under Section 48 those who shall compose the National Power Board of Directors, the legislature has vested upon these persons the power to exercise their judgment and discretion in running the affairs of the NPC. Discretion may be defined as “the act or the liberty to decide according to the principles of justice and one’s ideas of what is right and proper under the circumstances, without willfulness or favor.[”] Discretion, when applied to public functionaries, means a power or right conferred upon them by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. It is to be presumed that in naming the respective department heads as members of the board of directors, the legislature chose these secretaries of the various executive departments on the basis of their personal qualifications and acumen which made them eligible to occupy their present positions as department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the fulfillment of such responsibility.

There is no question that the enactment of the assailed Resolutions involves the exercise of discretion and not merely a ministerial act that could be validly performed by a delegate, thus, the rule enunciated in the case of Binamira v. Garrucho is relevant in the present controversy, to wit:

An officer to whom a discretion is entrusted cannot delegate it to another, the presumption being that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and unless the power to substitute another in his place has been given to him, he cannot delegate his duties to another.

In those cases in which the proper execution of the office requires, on the part of the officer, the exercise of judgment or discretion, the presumption is that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and, unless power to substitute another in his place has been given to him, he cannot delegate his duties to another.

x x x x

In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124 and No. 2002-125, it is the representatives of the secretaries of the different executive departments and not the secretaries themselves who exercised judgment in passing the assailed Resolution, as shown by the fact that it is the signatures of the respective representatives that are affixed to the questioned Resolutions. This, to our mind, violates the duty imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the corporate powers of the NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the said Resolutions must not be considered in determining whether or not the necessary number of votes was garnered in order that the assailed Resolutions may be validly enacted. Hence, there being only three valid votes cast out of the nine board members, namely those of [Department of Energy] Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal effect.[3]

Hence, we ultimately decreed –

WHEREFORE, premises considered, National Power Board Resolutions No. 2002-124 and No. 2002-125 are hereby declared VOID and WITHOUT LEGAL EFFECT. The Petition for Injunction is hereby GRANTED and respondents are hereby [ENJOINED] from implementing said NPB Resolutions No. 2002-124 and No. 2002-125.[4]

Respondent NPC filed a Motion for Reconsideration (Of Decision dated 26 September 2006),[5] which we denied with finality in a Resolution[6] dated 24 January 2007. Respondent NPC subsequently filed a Motion for Leave to File 2^nd Motion for Reconsideration (Of Decision dated 26 September 2006) with Motion to Refer Case En Consulta to the Court En Banc,[7] attaching thereto its Second Motion for Reconsideration.[8] However, in a Resolution[9] dated 4 June 2007, we denied both motions of respondent NPC.

Several more pleadings were filed following the promulgation of our Decision of 26 September 2006.

Petitioners filed a Motion for Clarification and/or Amplification,[10] with the following averments:

3. It appears that the assailed NPB resolutions were implemented by respondents after this petition was filed and pending resolution thereof effected, among others, the reorganization of the National Power Corporation (NPC), and termination of all NPC personnel as of January 31, 2003;

4. As this Honorable Court has ruled in its Decision that [NPB] Resolutions No. 2002-124 and No. 2002-125 are VOID and WITHOUT LEGAL EFFECT, it is petitioners’ considered position that its logical implications/consequences are, as follows:

1. The reorganization of NPC is null and void, which means that NPC must revert to its organizational structure prior to the implementation of [NPB] Resolution Nos. 2002-124 and 2002-125 (status quo ante);

2. The termination of all NPC personnel on January 31, 2003 is void and illegal, which entitles them to reinstatement to their previous positions and payment of back wages and other benefits and wage adjustments reckoned from January 31, 2003 until their actual reinstatement.

5. This motion is being made in order to clarify and/or amplify the Decision in this case as to its logical and necessary implications/consequences when the same will be eventually executed.

Petitioners, thus, pray that we clarify and/or amplify our Decision of 26 September 2006 by confirming their afore-quoted position as regards their reinstatement and payment of backwages/salaries, etc., as the logical and necessary implications/consequences of the said Decision rendered in their favor.

Shortly thereafter, counsels for petitioner, namely, Atty. Cornelio P. Aldon (Atty. Aldon) of the Cornelio P. Aldon Law Office and Atty. Victoriano V. Orocio (Atty. Orocio) of V.V. Orocio and Associates Law Offices, filed, on their own behalf, a Motion for Approval of Charging (Attorney’s) Lien.[11] Their Motion alleged that on 7 December 2002, a Mr. Zol D. Medina (Medina), in his own individual capacity and on behalf of all similarly affected/situated NPC personnel, entered into a legal retainer agreement with Atty. Aldon and Atty. Orocio for the urgent and immediate filing with the Supreme Court of a petition for injunction with prayer for TRO and/or preliminary injunction, in order to enjoin the implementation of NPB Resolutions No. 2002-124 and No. 2002-125. The agreement contains the following terms and conditions:

1. No Acceptance Fee;

2. Miscellaneous/out-of-pocket expenses in the amount of P25,000.00;

3. Twenty Five Percent (25%) of whatever amounts/monies are recovered in favor of said NPC personnel contingent on the success of the case.[12]

Pursuant to the foregoing agreement, Atty. Aldon and Atty. Orocio filed before us, on behalf of petitioners, the instant Petition for Injunction, Reply to the respondents’ Comment, and petitioners’ Memorandum. With the promulgation of our Decision dated 26 September 2006 enjoining the implementation of NPB Resolutions No. 2002-124 and No. 2002-125, and issuance of our Resolution dated 24 January 2007 denying with finality respondents’ Motion for Reconsideration, Atty. Aldon and Atty. Orocio assert their right to attorney’s fees and pray that we issue a resolution to the following effect:

1. Declaring that movants (Atty. Cornelio P. Aldon and Atty. Victoriano V. Orocio) are entitled to charge and collect the aforementioned attorney’s fees of Twenty Five Percent (25%) of the amounts/monies recovered in favor of all personnel of the National Power Corporation who were terminated effective as of January 31, 2003 pursuant to [NPB] Resolutions Nos. 2002-124 and 2002-125;

2. Directing the entry into the records of the instant case the aforementioned attorney’s fee.

Other remedies just and equitable under the premises are also prayed for.[13]

Atty. Aldon and Atty. Orocio sent copies of their Notice of Attorney’s Lien dated 11 April 2007 to Medina,[14] the Office of the Solicitor General (OSG),[15] and the Clerk of Court of the Supreme Court Third Division.[16]

Atty. Aldon and Atty. Orocio would later follow up by filing an Ex Parte Manifestation and Motion seeking the favorable resolution of their pending Motion for Clarification and/or Amplification and Motion for Approval of Charging (Attorney’s) Lien.

In the meantime, pleadings were filed by some of the petitioners, by themselves or by counsels other than Atty. Aldon and Atty. Orocio, to wit:

(1) A Manifestation[17] was filed by petitioners Jimmy D. Salman (Salman),[18] Vicente B. Cirio, Jr., and Necitas B. Gama, on their behalf and on behalf of the NPC employees they represent, alleging that in a letter[19] dated 10 April 2007, they already terminated the services of Atty. Aldon; and in a letter[20] dated 19 April 2007, they directed Atty. Orocio to refrain from acting as their lawyer for they never authorized him or his law firm to represent them in the present case. Consequently, they requested that all Court notices and processes in this case be forwarded and sent instead to the persons and address indicated in the Manifestation. In a Resolution[21] dated 8 October 2007, we noted the Manifestation of Salman, et al., and granted their prayer that they be sent Court notices and processes regarding this case;

(2) A Request for the Issuance of an Entry of Judgment[22] to implement our 26 September 2006 Decision was filed by Atty. Casan B. Macabanding (Atty. Macabanding), as collaborating counsel for petitioners, which we granted in our Resolution dated 4 June 2007. However, taking into account the filing of the succeeding pleadings, the entry of judgment has not been made;

(3) A Request for the Issuance of an Entry of Final Judgment[23] was filed by Atty. Ariel V. Villanueva (Atty. Villanueva), as collaborating counsel for the petitioners, in view of the finality of our Decision dated 26 September 2006; and

(4) A Manifestation and Motion[24] filed by Atty. Macabanding for the petitioners, praying that judgment already be entered in the case in accordance with our Resolution of 4 June 2007, since all the new pleadings filed by the parties were meant only to delay the proceedings.

Also submitted to us and made part of the records of the Petition at bar are the following:

(1) Copies of the letters written by Eriberto P. dela Peña and other NPC employees dismissed by virtue of NPB Resolutions No. 2002-124 and No. 2002-125, addressed to NPC President Cyril C. del Carr (Del Carr),[25] seeking their reinstatement; to Salman,[26] asking for unity and reconciliation; and to Vice President Noli De Castro[27] and Pampanga Governor Reverend Father Eduardo Panlilio,[28] calling attention to their plight and requesting assistance in the immediate resolution of their case;

(2) A copy of the letter[29] dated 14 January 2008 written by Atty. Reynaldo A. Vitorillo (Atty. Vitorillo), as counsel for Porfirio C. Batalia, Jr., Victor B. Racaza, Jr., Fred B. Sadlucap, Allan J. Baguio, Sagrado D. Galacio, Valentin C. Bacalso, Reynaldo W. Hinaloc, Scribner D. Tamiroy, Teodolfo Sabejon, Rudy Lopez, Nestor Paderanga, Loreto Areliano, Jr., Casino Roa, Servillano B. Payusan, and other regular employees of NPC who were dismissed pursuant to NPB Resolutions No. 2002-124 and No. 2002-125, addressed to NPC President Del Callar. According to Atty. Vitorillo, following the promulgation of our Decision dated 26 September 2006 declaring said NPB Resolutions null and void, “a fortiori, and by operation of law, our clients deserve forthwith reinstatement with full backwages”; and

(3) A letter[30] dated 3 March 2008 written by Yolanda M. Hernandez addressed to Justice Consuelo Ynares-Santiago imploring for help in attaining a final judgment in the instant case, which we noted in a Resolution dated 10 March 2008.

The two incidents which we will principally address in this Resolution are the Motion for Clarification and/or Amplification filed by petitioners and a Motion for Approval of Charging (Attorney’s) Lien filed by Atty. Aldon and Atty. Orocio.

Motion for Clarification and/or Amplification

We stress that neither the EPIRA Law mandating the reorganization of the NPC nor NPB Resolution No. 2002-53 approving the new NPC Table of Organization was made subject of the instant Petition; and, resultantly, neither was affected by the injunction we granted in our Decision dated 26 September 2006.

Our 26 September 2006 Decision declared void and without legal effect NPB Resolutions No. 2002-124 and No. 2002-125. Hence, we granted the Petition at bar and enjoined the implementation of these two NPB Resolutions. To recall, NPB Resolution No. 2002-124 approved the Guidelines on the Separation Program of the NPC and the Selection and Placement of Personnel in the NPC Table of Organization. It terminated the employment of all NPC personnel on 31 January 2003, and provided for their separation benefits. NPB Resolution No. 2002-125 constituted a Transition Team to implement the Separation Program of the NPC.

Simply put, the NPC can still pursue its reorganization in accordance with its new Table of Organization; but it cannot implement the same by terminating petitioners’ employment on 31 January 2003 pursuant to NPB Resolutions No. 2002-124 and No. 2002-125, which were passed with fatal defects. To validly implement the reorganization of NPC, the NPB is not precluded by our Decision of 26 September 2006 from passing another resolution, in accord with law and jurisprudence, approving a new separation program for its employees.

We, however, have to sustain petitioners’ position in their Motion for Clarification and/or Amplification that our declaration of nullity of NPB Resolutions No. 2002-124 and No. 2002-125 and our injunction on the implementation of the same logically and necessarily meant that the termination of the employment of petitioners on 31 January 2003 was illegal.

As a general rule, being illegally dismissed from service, petitioners are entitled to reinstatement to their former positions or to equal positions. Nonetheless, we must consider the fact that absent a TRO and/or a preliminary injunction, the NPC was still able to proceed with its reorganization prior to the promulgation of our Decision on 26 September 2006. We cannot simply ignore the effects of such reorganization which has been implemented and in place for over five years now and issue, as the petitioners pray for, a status quo ante order. We refer by way of analogy to the effect of a decision adjudging an executive or a legislative act void:

The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order or a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its being to all intents and purposes a mere scrap of paper. As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.” It is understandable why it should be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, - with respect to particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a resolution in Araneta v. Hill [93 Phil. 1002 (1953)] and the decision in Manila Motor Co., Inc. v. Flores [99 Phil. 738 (1956)]. An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co. [G.R. No. L-21114, 28 November 1967, 21 SCRA 1095].[31]

Since we cannot discount the impossibility of petitioners’ reinstatement, as their former positions or any equivalent positions may no longer be available after the reorganization, petitioners may be accordingly awarded separation pay in lieu of reinstatement, based on a validly approved separation program of the NPC.[32]

Petitioners are further entitled to backwages together with wage adjustments and all other benefits which they would have received if they had not been illegally terminated from employment, from 31 January 2003 until they are actually reinstated or paid their separation pay.

We also take note that petitioners have already received separation benefits under NPB Resolutions No. 2002-124 and No. 2002-125. The amount thereof shall then be taken into account and offset against the amount they are entitled to receive as backwages and separation pay (in lieu of reinstatement) under a validly approved separation program of the NPC.

Motion for Approval of Charging (Attorney’s) Lien

Atty. Aldon and Atty. Orocio move for the approval of their charging lien pursuant to the provisions of Section 37, Rule 138[33] of the Rules of Court and their legal retainer agreement.[34]

A charging or special lien is an attorney's specific lien for compensation on the fund or judgment which he has recovered by means of his professional services for his client in a particular case. Such charging lien covers only the services rendered by an attorney in the action in which the judgment was obtained and takes effect after the attorney shall have caused a statement of his claim of such lien to be entered into the records of the particular action with written notice thereof to his client and to the adverse party. It presupposes that the attorney has secured a favorable money judgment for his client and grants the attorney "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." Called upon at all times to exert utmost zeal with unstinted fidelity in upholding his client's cause and subject to appropriate disciplinary action if he should fail to live up to such exacting standard, the attorney in return is given the assurance through his liens - retaining and charging - that the collection of his lawful fees and disbursements is not rendered difficult, if not altogether thwarted, by an unappreciative client. He is thereby given an effective hold on his client to assure payment of his services in keeping with his dignity as an officer of the court.[35]

In the case before us, Atty. Aldon and Atty. Orocio represented all the NPC employees terminated from employment by virtue of NPB Resolutions No. 2002-124 and No. 2002-125 as petitioners in what they referred to as a class suit, with nary a resistance from any of the petitioners. They were petitioners’ counsels-of-record from the time the Petition for Injunction was instituted until we rendered our Decision on 26 September 2006, granting the Petition and enjoining the implementation of the challenged NPB Resolutions. Again, by virtue of the efforts of Atty. Aldon and Atty. Orocio who filed the Motion for Clarification and/or Amplification on behalf of petitioners, we have recognized herein petitioners’ rights to backwages and reinstatement or separation pay (in lieu of reintstatement). Evidently, Atty. Aldon and Atty. Orocio faithfully accomplished their duty to promote and protect their clients’ rights.

It was only after the promulgation of our Decision dated 26 September 2006 granting the Petition, and during the pendency of the Motion for Clarification and/or Amplification filed by Atty. Aldon and Atty. Orocio on behalf of petitioners, that Salman, et al., filed a Manifestation before us on 2 May 2007, to which they attached their letter dated 10 April 2007 to Atty. Aldon terminating his services; and another letter dated 19 April 2007 to Atty. Orocio, directing him to refrain from acting as their lawyer. The timing alone of the Manifestation and letters of Salman, et al., is already highly suspicious and divulges the obvious motive of Salman, et al., to evade their obligation to pay Atty. Aldon and Atty. Orocio their attorney’s fees for the legal services they had rendered and which resulted in a ruling by this Court favorable to petitioners.

During the same period, several other pleadings were filed and letters submitted to us by “collaborating counsels” for petitioners who never previously appeared or participated in this case.

It was these apparent attempts of several petitioners to suddenly end and/or denounce their attorney-client relationship with Atty. Aldon and Atty. Orocio which prompted the latter two to send Notices of Attorney’s Liens dated 11 April 2007 to the parties and to file before us on 12 April 2007 their Motion for Approval of Charging (Attorney’s) Lien, to protect their right to collect their attorney’s fees.

A client cannot, in the absence of the lawyer’s fault, consent or waiver, deprive the lawyer of his just fees already earned. While a client has the right to discharge his lawyer at any time, dismiss or settle his action or even waive the whole of his interest in favor of the adverse party, he cannot by taking any such step deprive the lawyer of what is justly due him as attorney’s fees unless the lawyer, by his action, waives or forfeits his right thereto.[36]

We have in the past disapproved of any and every effort of clients benefited by counsel’s services to deprive them of their hard-earned honorarium and condemned such attitude. Lawyers are as much entitled to judicial protection against injustice on the part of their clients as the clients are against abuses on the part of counsel. The duty of the court is not only to see that lawyers act in a proper and lawful manner, but also to see that lawyers are paid their just and lawful fees. Thus, in J.K. Mercado and Sons Agricultural Enterprises, Inc. v. De Vera,[37] citing Albano v. Coloma,[38] we stressed:

While, indeed, the practice of law is not a business venture, a lawyer, nevertheless, is entitled to be duly compensated for professional services rendered. So, also, he must be protected against clients who wrongly refuse to give him his just due. In Albano vs. Coloma, this Court has said:

“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.”[39]

We take note that according to their legal retainer agreement, Atty. Aldon and Atty. Orocio received no acceptance fee when they took on petitioners’ case. The only other amount that they were to receive by virtue of said agreement was the P25,000.00 out-of-pocket expense. Their attorney’s fees thereunder were absolutely contingent on their winning the case, which they, in fact, did.

The allegation of Salman, et al., that the contingency on which Atty. Aldon may collect his attorney’s fees was the granting of the TRO deserves scant consideration in light of the clear and simple wording of the legal retainer agreement that the said fees were “contingent on the success of the case.” Even though Atty. Aldon and Atty. Orocio failed to secure the provisional remedy of a TRO, they were able to win for petitioners a perpetual injunction against the implementation of NPB Resolutions No. 2002-124 and No. 2001-125. Atty. Aldon and Atty. Orocio may have lost the battle (for the TRO), but they ultimately won the war (for the injunction) for petitioners. Equally without merit was the assertion of Salman, et al., that they never authorized Atty. Orocio to appear as their counsel. Both Atty. Aldon and Atty. Orocio signed the legal retainer agreement. Atty. Orocio appeared as co-counsel of Atty. Aldon upon the filing of the Memorandum for petitioners. And even though Atty. Orocio did not sign the other pleadings for petitioners previous to their Memorandum, it did not discount the possibility that he still rendered legal services to petitioners for the prosecution of their case other than the preparation and filing of the pleadings, such as the conduct of the necessary research and other legwork. Finally, Atty. Aldon and Atty. Orocio jointly filed their Motion for Approval of Charging (Attorney’s) Lien, which only shows that Atty. Aldon himself recognizes the equal participation of Atty. Orocio in the present case as co-counsel of petitioners.

While we duly recognize the right of Atty. Aldon and Atty. Orocio to a charging lien on the amounts recoverable by petitioners pursuant to our 26 September 2006 Decision, nevertheless, we deem it proper to reduce the same. Under Section 24, Rule 138 of the Rules of Court, a written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. The amounts which petitioners may recover as the logical and necessary consequence of our Decision of 26 September 2006, i.e., backwages and separation pay (in lieu of reinstatement), are essentially the same awards which we grant to illegally dismissed employees in the private sector. In such cases, our Labor Code explicitly limits attorney’s fees to a maximum of 10% of the recovered amount.[40] Considering by analogy the said limit on attorney’s fees in this case of illegal dismissal of petitioners by respondent NPC, a government-owned and controlled corporation; plus the facts that petitioners have suffered deprivation of their means of livelihood for the last five years; and the fact that this case was originally filed before us, without any judicial or administrative proceedings below; as well as the fundamental ethical principle that the practice of law is a profession and not a commercial enterprise,[41] we approve in favor of Atty. Aldon and Atty. Orocio a charging lien of 10% (instead of 25%) on the amounts recoverable by petitioners from NPC pursuant to our Decision dated 26 September 2006.

We leave the computation of the actual amounts due the petitioners and the enforcement of payment thereof by execution to the proper forum in appropriate proceedings, for this Court is not a trier of facts. It is not equipped to receive evidence and determine the truth of the factual allegations of the parties on this matter.[42] But even prior to the determination of the exact amounts to be paid to petitioners by respondent NPC pursuant to our Decision dated 26 September 2006, we may already allow herein the recording of the charging lien of Atty. Aldon and Atty. Orocio to establish their right to 10% of such awards.[43]

With the recording of their charging lien, Atty. Aldon and Atty. Orocio shall have the same right and power over such judgments and executions as their clients, petitioners, would have, to enforce their lien and secure the payment of their attorney’s fees.[44] The lien shall attach to the proceeds of the judgment and the client who receives the same, without paying his attorney who was responsible for its recovery, shall hold said proceeds in trust for his lawyer to the extent of the value of the lawyer’s recorded lien. After the charging lien has attached, the attorney is, to the extent of said lien, to be regarded as an equitable assignee of the judgment or funds produced by his efforts.[45] And the judgment debtor who, in disregard of the charging lien, satisfies the judgment debt without reserving so much thereof as may be sufficient to pay the attorney’s fees and advances may be held liable for the full value of the lien, which may be enforced by execution.[46]

IN VIEW OF THE FOREGOING, we hereby RESOLVE to:

(1) PARTIALLY GRANT the Motion for Clarification and/or Amplification of petitioners by affirming that, as a logical and necessary consequence of our Decision dated 26 September 2006 declaring null and without effect NPB Resolutions No. 2002-124 and No. 2002-125 and enjoining the implementation of the same, petitioners have the right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program; plus backwages, wage adjustments, and other benefits accruing from 31 January 2003 to the date of their reinstatement or payment of separation pay; but deducting therefrom the amount of separation benefits which they previously received under the null NPB Resolutions;

(2) PARTIALLY GRANT the Motion for Approval of Charging (Attorney’s) Lien of Atty. Aldon and Atty. Orocio and ORDER the entry in the records of this case of their ten percent (10%) charging lien on the amounts recoverable by petitioners from respondent NPC by virtue of our Decision dated 26 September 2006; and

(3) ORDER that Entry of Judgment be finally made in due course in the case at bar.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

MA. ALICIA AUSTRIA-MARTINEZ ADOLFO S. AZCUNA

Associate Justice Associate Justice

DANTE O. TINGA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Resolution were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

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* Justices Adolfo S. Azcuna and Dante O. Tinga were designated to sit as additional members replacing Justices Antonio Eduardo B. Nachura and Ruben T. Reyes per Raffle dated 8 September 2008.

[1] Penned by Associate Justice Minita V. Chico-Nazario with then Chief Justice Artemio V. Panganiban and Associate Justices Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez, and Romeo J. Callejo, Sr., concurring; rollo, pp. 296-308.

[2] Rollo, pp. 19-20.

[3] Id. at 305-307.

[4] Id. at 307.

[5] Id. at 310-324.

[6] Id. at 330.

[7] Id. at 339-352.

[8] Id. at 353-377.

[9] Id. at 397-398.

[10] Id. at 334-337.

[11] Id. at 380-386.

[12] Annex “A” of the Motion, id. at 387-388.

[13] Id. at 385.

[14] Annex “B” of the Motion, id. at 389-390.

[15] Annex “C” of the Motion, id. at 391-392.

[16] Annex “D” of the Motion, id. at 393-394.

[17] Id. at 403-404.

[18] Regional President of NPC Employees and Workers Union (NEWU)-Northern Luzon Regional Center.

[19] Annex “A” of the Manifestation, rollo, p. 405.

[20] Annex “B” of the Manifestation, id. at 406.

[21] Id. at 496-A.

[22] Id. at 338.

[23] Id. at 495-496.

[24] Id. at 508-509.

[25] Dated 18 October 2007, id. at 411-413.

[26] Dated 27 October 2007, id. at 414-415.

[27] Dated 17 November 2007, id. at 416-423.

[28] Dated 7 October 2007, id. at 424-428; and dated 7 November 2007, id. at 429.

[29] Id. at 498-499.

[30] Id. at 507-A.

[31] De Agbayani v. Philippine National Bank, 148 Phil. 443, 447-448 (1971).

[32] See Caliguia v. National Labor Relations Commission, 332 Phil. 128, 142 (1996).

[33] Rule 138, 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.

[34] In which it was agreed among other terms and conditions that Atty. Aldon and Atty. Orocio shall be entitled to 25% of whatever amounts/monies were recovered in favor of the NPC personnel, contingent on the success of the case, supra note 12.

[35] Ampil v. Hon. Agrava, 145 Phil. 297, 307-308 (1970).

[36] Ruben E. Agpalo, Legal Ethics (6^th ed. 1997), p. 306, citing Aro v. Nañawa, 137 Phil. 745, 761 (1969); Rustia v. CFI of Batangas, 44 Phil. 62, 65 (1922); Cabildo v. Navarro, 153 Phil. 310, 314 (1973); Valencia v. Jimenez, 11 Phil. 492, 496 (1908); Recto v. Harden, 100 Phil. 427, 446 (1956).

[37] 375 Phil. 766, 772 (1999).

[38] 128 Phil. 433, 442 (1967).

[39] Toledo v. Kallos, A.M. No. RTJ-05-1900, 28 January 2005, 449 SCRA 446, 456; Bach v. Ongkiko Manhit & Acorda Law Offices, G.R. No. 160334, 11 September 2006, 501 SCRA 419, 433-434.

[40] Article 111 of the Labor Code 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 wages recovered.

x x x x

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of the wages, attorney’s fees, which exceed ten percent of the amount of wages recovered.

[41] Canlas v. Court of Appeals, G.R. No. L-77691, 8 August 1988, 164 SCRA 160, 174; Licudan v. Court of Appeals, G.R. No. 91958, 24 January 1991, 193 SCRA 293, 302.

[42] Ang Bagong Bayani-OFW Labor Party v. Commission on Elections, 412 Phil. 308, 31 (2001).

[43] See Palanca v. Pecson, 94 Phil. 419, 423 (1954).

[44] Rule 137, Section 38.

[45] See Bacolod Murcia Milling Co., Inc. v. Henares, 107 Phil. 560, 567-568 (1960).

[46] Ruben E. Agpalo, Legal Ethics (6^th ed. 1997), p. 306, citing Calalang v. De Borja, 160 Phil. 1040, 1045-1046 (1975).