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SPOUSES MAMERTO and ADELIA*TIMADO, Petitioners - The trial court subsequently ordered the consolidation of

vs. the reformation of instruments and the indirect contempt

RURAL BANK OF SAN JOSE, INC., TEDDY MONASTERIO, in cases, and the dismissal of the second and third petitions
his capacity as its President/Manager, and ATTY. AVELINO for indirect contempt.
SALES, Respondents
-The RTC dismissed the complaint for reformation of
FACTS: instruments and petition for indirect contempt filed by the
Petition for review on certiorari assailing the March 30, petitioners and ordered the Clerk of Court to issue a writ
2012 decision of the Court of Appeals (CA) that affirmed of possession in favor of the respondents. It also awarded
with modification the October 31, 2006 Regional Trial damages as follows:
Court (RTC) joint decision in Civil Case No. IR-2974 and
Special Civil Action No. IR-3187. The CA decision affirmed I. In Civil Case No. IR-2974 – against plaintiffs spouses
the RTC's decision dismissing the complaint for Mamerto Timado and Delia Timado and in favor of
reformation of instruments and the petition for indirect defendants Rural Bank of San Jose, Inc., and Teddy
contempt filed by spouses Mamerto and Delia Timado Monasterio, in his capacity as its manager, to wit:
(petitioners) against Rural Bank of San Jose, Inc. (Rural 1. Dismissing the amended complaint;
Bank) and Teddy Monasterio, in his capacity as Rural 2. On defendants’ counterclaim, condemning plaintiff
Bank’s Manager (collectively as respondents), and spouses:
awarded them exemplary damages, attorney’s fees, and a. To pay defendant Teddy Monasterio the amount of
costs of litigation.|| ₱500,000.00 as moral damages, and P300,000.00 as
FACTS: exemplary damages;
- On August 15, 1994, the petitioners obtained a loan from b. To pay defendants Rural Bank of San Jose, Inc. and
Rural Bank amounting to ₱178,000.00. As security for the Teddy Monasterio the amount of ₱50,000.00 for legal
loan, they executed a real estate mortgage over a parcel counsel’s acceptance fee and ₱1,500.00 per appearance of
of land and a chattel mortgage. counsel; and,
c. To pay defendants Rural Bank of San Jose, Inc., and
The petitioners eventually failed to pay their loan Teddy Monasterio other expenses of litigation and/or cost
amortizations. Consequently, the bank informed the of suit.1âwphi1
petitioners of its intention to foreclose the real estate and II. In Spec. Civil Action No. IR-3187 – against petitioners
chattel mortgages to cover the unpaid balance. spouses Mamerto Timado and Delia Timado and in favor
of respondents Rural Bank of San Jose, Inc., Teddy
The petitioners filed a complaint for reformation of Monasterio, and Atty. Avelino V. Sales, Jr., to wit:
instruments against the respondents before the RTC. 1. Dismissing the petition;
2. Condemning petitioners spouses Mamerto Timado and
- Rural Bank proceeded with the extrajudicial foreclosure Delia Timado:
of the real estate mortgage and sold the property at a 1. To pay respondent Teddy Monasterio the amount of
public auction where it emerged as the highest bidder. The ₱200,000.00 as moral damages and ₱50,000.00 as
petitioners failed to redeem the property. exemplary damages; and,
2. To pay respondents Rural Bank of San Jose, Inc., and
- The petitioners filed a petition for indirect contempt with Teddy Monasterio the amount of ₱50,000.00 for the
damages against the respondents, alleging that the latter services of counsel
had pre-empted judicial authority by foreclosing the
mortgages and selling the properties at a public auction - On appeal, the CA affirmed with modification the RTC
during the pendency of the reformation of instruments decision. CA deleted the award of moral damages for lack
case. of legal justification and reduced the amount of exemplary
damages awarded in Civil Case No. IR-2974 to
- While the reformation of instruments and indirect ₱100,000.00.
contempt cases were pending, Rural Bank filed an ex-parte
petition for issuance of writ of possession over the subject ISSUE/S: Whether the award of attorney’s fees is
property. Because of this, the petitioners filed their third supported by the factual and legal premises in the text of
petition for indirect contempt. the RTC decision. - YES.
DOCTRINES | HELD: The law is clear that in the absence of DOLORES SILVA Vda. DE FAJARDO, complainant, vs. Atty.
stipulation, attorney’s fees may be awarded as actual or REXIE EFREN A. BUGARING, respondent.
compensatory damages under any of the circumstances
provided for in Article 2208 of the Civil Code. FACTS: Lawyers must be completely truthful, more so
when they plead their own causes against former clients.
RULING: The general rule is that attorney’s fees cannot be In the present case, the lawyer misrepresented facts in his
recovered as part of damages because of the policy that claim for attorneys fees; hence, he must be sanctioned.
no premium should be placed on the right to litigate. They This case involves one for disbarment instituted by
are not to be awarded every time a party wins a suit. The complainant Dolores Silva for untruthful statements made
power of the court to award attorney’s fees under Article by Atty. Rexie Efren Bugaring in allegedly trying to obtain
2208 demands factual, legal, and equitable justification. from complainant the amount of P3,532,170 in attorneys
Even when a claimant is compelled to litigate with third fees.
persons or to incur expenses to protect his rights, still
attorney’s fees may not be awarded where no sufficient Complainant along with her co-heirs was having legal
showing of bad faith could be reflected in a party’s disputes against the Cruz family over certain parcels of
persistence in a case other than an erroneous conviction land (Lot 2434 and 2454) located in Sta. Rosa, Laguna,
of the righteousness of his cause. which was inherited from Jose and Buenaventura Silva.
The Cruz family was then represented by Atty. Ricardo
The award of attorney’s fees to the winning party lies Dantes, who recommended the services of Atty. Bugaring
within the discretion of the court, taking into account the to complainant herein. Complainant, not knowing it was
circumstances of each case. This means that such an improper and unethical for lawyers of the same firm to
award should have factual, legal, and equitable basis, not handle conflicting interests, accepted the
founded on pure speculation and conjecture. In addition, recommendation to engage the services of Atty. Bugaring.
the court should state the reason for the award of Atty. Bugaring then assisted complainant with their
attorney’s fees in the body of the decision. Its unheralded problems with tenants of the concerned lots, as well as
appearance in the dispositive portion, as a rule, is not with the disputes between them and their co-heirs against
allowed. the Cruz family. The legal battle with the Cruz family
eventually led to the filing of the case Alicia Cruz et. al., v
The petitioners' filing of unfounded actions forced the Dolores Fajardo et. al. with the RTC (hereinafter the
respondents to litigate to protect their interests. Mother Case). For all these disputes, Atty. Bugaring
represented complainant and her co-heirs. He was treated
For these reasons, we find the award of attorney's fees with utmost accommodation and courtesy by
proper under Article 2208(4)28 of the Civil Code, but we complainant, even having the driver of complainants pick
modify the amount to ₱l00,000.00 which would be just him up and drive him back to his home/residence after
and reasonable under the circumstances. every hearing. An appearance fee of P1,000 was also
given, whether hearings were postponed or not.
March 30, 2012 decision of the Court of Appeals in CA-G.R. At this point, complainant had always asked Atty. Bugaring
CV No. 89866 is AFFIRMED with the MODIFICATION as of his professional fees, to which Atty. Bugaring
follows: the award of exemplary damages is deleted and would respond, “Huwag niyo na alalahanin iyon. Para ko
the amount of attorney's fees is fixed at ₱l00,000.00. Costs na kayong nanay o lola.” As the dispute over the
against spouses Mamerto and Delia Timado. concerned parcels of land worsened, the Mother Case
eventually branched out into 11 cases, in which Atty.
Bugaring continued to represent complainant and her co-
heirs. In all of these cases, complainant again would ask of
the professional fees, which effected to the same

Later, the co-heirs had a meeting with complainant to

express their (co-heirs’) discontent with the way Atty.
Bugaring was handling the Mother Case as this was
derailing their intended sale of Lots 2343 and 2454 to ISSUE/S: W/N respondent Atty. Bugaring is entitled to his
Golden Bay Realty and Development Corporation. attorney’s fees. – NO.
Complainant could not give and firm or certain answer to
their queries as there was really no agreement or contract DOCTRINES | HELD: Canon 10 of the Code of Professional
between her and Atty. Bugaring. Atty. Bugaring, after Responsibility provides that a lawyer owes candor,
having been informed by complainant of this concern, fairness and good faith to the courts. Accordingly, Rule
then told complainant that he could draw up 2 fictitious 10.01 requires a member of the bar not [to tell] any
contracts (dated December 11, 1992: one for the Mother falsehood, nor consent to the doing of any in court, nor
Case, and the other for the Catalina Roberto v Dolores shall he mislead, or allow the court to be misled by any
Fajardo case) for his services to be shown to the co-heirs, artifice. Moreover, Section 20(d) of Rule 138 of the Rules
providing amongst others that: an acceptance fee of of Court provides that a lawyer must employ such means
P50,000.00, per appearance fee of P1,000.00 and upon the only as are consistent with truth and honor, and never
termination of the case, an additional attorneys fee seek to mislead the judge or any judicial officer by any
equivalent to 25% of the value of the subject property in artifice or false statement of fact or law.
litigation. Complainant was assured that the contracts
were not valid and binding, telling her that “Ito ho ay para Indeed, respondent has not completely been honest when
lamang may maipakita kayo sa kanila, per hindi ito totoo.” he claimed that the entire estate of Adela Silva was the
Eventually, a compromise agreement was entered into by subject of litigation in the case for partition. For one thing,
all the parties to this case (the complaiant and her co- it is clear that Lots 2434 and 2454 were the only properties
heirs, the Cruz family, and the tenants), thus leading to a mentioned in the Complaint for partition. Also, the
judgment on the Mother Case and the consequent Compromise Agreement and the Judgment in the Mother
dismissal of the offshoot cases. Case for partition did not indicate that the subject of
partition was the late Adela Silvas estate, but they did
The complaiant thus tendered the amount of P100,000 refer to the other properties belonging to her.
which they believed was appropriate for the services given
by Atty. Bugaring. Bugaring rejected and proposed a deal As regards his professional fees, we stress that the proper
with complainant that he be given only P85,000 but that time to deal with this delicate issue is upon the
he shall charge the amount of P1,200,000 against the commencement of the lawyer-client relationship. In this
estate. This, complainant rejected. It had been almost 3 case, respondent should have determined and entered
years before complainant heard from Atty. Bugaring again, into an agreement regarding his fees in 1991 at the latest,
who had already instituted a collection case before the when he was first retained by complainant as her counsel
RTC of Quezon City, with a prayer for preliminary in the partition case. Such prudence would have spared
attachment for collection of his legal fees. the Court this controversy over a lawyer’s compensation,
a suit that should be avoided except to prevent imposition,
Atty. Bugaring, by way of comment, avers that from 1991 injustice or fraud.
to May 1994, complainant retained his services as her
personal legal consultant and x x x lawyer in nineteen (19) To be sure, a lawyer is entitled to the protection of the
court cases. The basis for his claim of attorney’s fees were courts against any attempt on the part of a client to escape
the contracts for his services, dated December 11, 1992. payment of legitimate attorney’s fees. However, such
Due to complainant’s and her counsel’s failure to appear, protection must not be sought at the expense of truth.
the court declared complainant in default and Atty. Complete candor or honesty is expected from lawyers,
Bugaring was allowed to present evidence ex-parte. The particularly when they appear and plead before the courts
trial court rendered judgment favoring Atty. Bugaring, for their own causes against former clients, as in this case.
which was affirmed by the Court of Appeals. With his armada of legal knowledge and skills, respondent
clearly enjoyed the upper hand. More important, he had
However, the evaluation and recommendation of the IBP the sole opportunity to present evidence in the collection
provided that Atty. Bugaring was guilty of gross case after complainant was declared in default, and after
misconduct for making untruthful statements and for he was allowed to present his evidence ex parte. Again,
misleading the trial courts on several occasions in the civil respondent should have determined and entered into an
cases herein. agreement regarding his fees in 1991 at the latest, when
he was first retained by complainant as her counsel in the
partition case. Such prudence would have spared the mistakes. There would be variance of the judgment if
Court this controversy over a lawyer’s compensation, a attorney’s fees would still be included. Motion for
suit that should be avoided except to prevent imposition, Reconsideration was also denied. Petitioner elevated to
injustice or fraud. RULING: WHEREFORE, Respondent the SC.
Rexie Efren A. Bugaring is found LIABLE for gross
misconduct and is hereby SUSPENDED from the practice of Petitioner’s contention: A motion to recover attorney’s
law for a period of ONE (1) YEAR, effective upon the finality fees can be filed and entertained by the court before and
of this Decision. He is WARNED that a repetition of the after a judgment has become final. Moreover, the oral
same or of a similar misconduct will be dealt with more contract with the deceased spouses can be considered a
severely. quasi-contract upon which an action can be commenced
within 6 years pursuant to Art. 1145 of the Civil Code.
Motion filed on Sept. 6, 2009 so not bared by prescription.
FRANCISCO L. ROSARIO, JR., Petitioner Respondents’ contention: Motion was filed late. The RTC
vs. has already resolved the issue when it awarded the
LELLANI DE GUZMAN, ARLEEN DE GUZMAN, PHILIP RYAN amount of P10,000.00 as attorney’s fees. Article 2208 of
DE GUZMAN, and ROSELLA DE GUZMAN BAUTISTA, the Civil Code allows recovery of attorney’s fees under a
Respondents written agreement. The alleged understanding by the
petitioner with the deceased spouses was never put into
FACTS: August 1990: Spouses Pedro and Rosita de Guzman writing and the respondents have no knowledge or
engaged the legal services of Atty. Francisco L. Rosario, Jr, information of such oral contract. Lastly, the 25% of
(petitioner) as defense counsel in a complaint filed against market value of the land is excessive and unconscionable.
them by one Loreta A. Chong for annulment of contract
and recovery of possession with damages involving a ISSUE/S:
parcel of land in Parañaque City. Whether or not Petitioner’s claim for attorney’s fees is
valid and if a judgment that has been rendered final and
The case was commenced in the RTC and even ended in executory bars him from claiming such fees. - NO
the Supreme Court with Spouses De Guzman winning at all
There are two concepts of attorney’s fees: ordinary and
While the case was pending in the SC, the spouses died in extraordinary.
a vehicular accident and were then substituted by their
children who are the respondents in this case. Ordinary sense: reasonable compensation paid to a lawyer
by his client for legal services rendered.
September 8, 2009: Petitioner Rosario filed a Motion to
Determine Attorney’s Fees before RTC alleging that he had Extraordinary sense: awarded by the court to the
a verbal agreement with the spouses that he would get successful litigant to be paid by the losing party as
25% of the market value of the subject land if the case filed indemnity for damages. It may be decreed to in favor of
by Chong would be dismissed. the party, not his lawyer, in any of the instances
authorized by law.
The respondents refused despite a written demand by the
petitioner. The losing party is not bound by nor his liability dependent
upon on the fee arrangement of the prevailing party with
Petitioner: insists that he is entitled to an amount his lawyer. However, it may be taken into account of the
equivalent to 25% of the market value of the subject land court in fixing the amount of counsel fees as an element of
on the basis of quantum meruit. damages.

RTC denied the motion on the ground it was filed out of The fee as an item of damages belongs to the party litigant
time. Judgment in the subject case had long become final and not to his lawyer. It forms part of the judgment. The
and executory on October 31, 2007. RTC lost jurisdiction client and his lawyer may, however, agree that whatever
over the case because the final decision could not be attorney’s fee awarded by the court shall pertain to the
amended or corrected except for clerical errors or lawyer as compensation or part thereof. In such case, the
court upon proper motion may require the losing party to the court is not alone to see a lawyer acts in a proper and
pay it directly to the lawyer. lawful manner; it is also its duty to see that the lawyer is
paid his just fees. It would be ironic if after putting forth
The two concepts of attorney’s fees require, as a the best in him to secure justice for his client, he himself
prerequisite to their grant, the intervention of or the would not get his due.
rendition of professional services by the lawyer. A client is
not liable to pay counsel fees in favor of a lawyer who RULING:
never rendered services, so too a losing party may not be In this case, petitioner filed his motion on September 8,
held liable to pay for attorney’s fees as damages in favor 2009, one (1) year and eleven (11) months from the finality
of a winning party who enforced his rights without the of the RTC decision on October 31, 2008.
assistance of a counsel. Moreover, both fees are subject to
judicial control and modification. Petitioner claims to have an oral contract of attorney’s
fees, Art. 1145 of the Civil code allows him a period of six
The rules governing the determination of their reasonable (6) years to file an action for recovery of professional fees.
amount are applicable in one as in the other. SC ins in the view that the petitioner is deserving to the
claimed attorney’s fees and that the amount should be
It is well settled that a claim for attorney’s fees may be based on quantum meruit.
asserted either in the very action in which the services of
the lawyer had been rendered or in a separate action. Petitioner represented the deceased spouses in the civil
Attorney’s fees cannot be determined until after the main case for annulment of contract and recovery of possession
litigation has been decided and the subject of the recovery with damages and has successfully done so from the trial
is at the disposition of the court. Though while a claim for court level in 1990 up to the SC in 2007. It not an easy task
attorney’s fees may be filed before the judgment is for the petitioner to defend his client’s cause for 17 years,
rendered, the determination of the propriety of such fees such a long period of time, considering the heavy and
is held in abeyance until the main case has become final. demanding legal workload which includes research,
Otherwise, the determination is premature. preparation of pleadings, gathering of documentary proof,
court appearances, and various legal work necessary to
Quantum meruit – literally meaning as much as he the defense of the client.
deserves – is used as a basis of determining attorney’s fees
in the absence of an express agreement. It is a device that It cannot be denied that the petitioner devoted much time
prevents unscrupulous clients from running away with the and energy in handling the case. Given the considerable
fruits of the legal services of counsel without paying for it. amount of time spent, diligent amount of effort exerted
It also avoids unjust enrichment of the client. and the quality of work, petitioner deserves to be awarded
reasonable attorney’s fees for his services. Justice and
An attorney must show that he is entitled to a reasonable equity dictate that petitioner be paid based on quantum
compensation for the effort in pursuing the client’s cause, meruit.
taking into account certain factors in fixing the amount of
fees. The award of 25% based on the value of property was not
granted because the petitioner failed to clearly
Rule 20.01 of the Code of Professional Responsibility lists substantiate the details of his oral agreement with
the guidelines in determining the proper amount of Spouses de Guzman. A fair and reasonable amount should
attorney’s fees. (please refer to such Rule) be 15% of market value of the subject property.

Practice of law is not a business and the attorney plays a WHEREFORE, the petition is GRANTED. Accordingly, the
vital role in the administration of justice underscores the Court grants the Motion to Determine the Attorney’s Fees
need to secure him an honorarium lawfully earned as a filed by the petitioner Atty. Francisco L. Rosario, Jr. Based
means to preserve the decorum and respectability of the on quantum meruit, the amount of attorney’s fees is at the
legal profession. rate of 15% of the market value of the parcel of land,
covered by Transfer Certificate of Title No. 1292, at the
A lawyer is entitled to judicial protection against injustice, time of payment. SO ORDERED.
imposition or fraud on the part of his client. The duty of
NAPOLEON PORTES, SR., , vs. SEGUNDA ARCALA, Luis while TCT No. T-39332 covering Lot 2-B was issued to
-This case stems from a complaint for recovery of -In 1966, Vicente, Jr., Sotera and Perfecta had Lot 2-B
possession and annulment of titles filed on 21 April 1977 subdivided. Vicente, Jr. pretended to be the son of
by respondents Segunda, Eulalia, Salustancia, Vamerco, Vicente, respondents' father, and had the subdivided
Josefina, Felomino, Marciano, Lydia, and Salome, all portions of Lot 2-B titled in this manner: Lot 2-B-3 covered
surnamed Arcala. by TCT No. T-44568 in Vicente's name; Lot 2-B-1 covered
by TCT No. T-44566 in Perfecta's name; and Lot 2-B-2
-Respondents claimed that as early as 1908, their parents, covered by TCT CD Technologies Asia, Inc. © 2018
Vicente and Felisa, had already occupied and developed cdasiaonline.com No. T-44567 in Sotera's name.
the disputed parcels of land, Lots 2 and 3. These two lots
are located in Sitio Pagba, Mansalanao, La Castellana, -On 21 February 1967, Vicente, Jr., Sotera and Perfecta
Negros Occidental. On 20 June 1912, the Director of Lands executed a Deed of Absolute Sale over the properties in
approved Vicente's homestead application for Lots 2 and favor of Enrique and Pacita.
3. Vicente and Felisa were in open, exclusive and
continuous possession of Lots 2 and 3 until their deaths in -Luis sold Lot 2-A to Napoleon as evidenced by a "Deed of
1930 and 1940, respectively. As Vicente and Felisa's heirs, Sale of Realty with Assumption of Mortgage" dated 28
respondents succeeded them in their rights over Lots 2 December 1967.
and 3. Respondents then took possession of Lots 2 and 3.
-On 3 August 1970, Angel and a certain Eleuteria Espinosa
-Respondents Cled the complaint against their cousins, ("Eleuteria"), reconstituted the title of Lot 3. OCT No. RO-
Vicente, Jr., Perfecta, Sotera, and Consolacion, all 10754 (11988) was issued to Angel and Eleuteria.
surnamed Arcala.
-Respondents, who were still in possession of Lots 2 and 3,
-Respondents alleged that on 30 November 1917, learned of defendants' fraudulent acts in 1966 when
Felomina, the aunt of Luis, registered Lots 1, 2, 3, 4, 5 and Vicente, Jr. claimed ownership of Lot 2. Segunda had the
6 in her name. These lots are situated in Barrio land dispute investigated by the Bureau of Lands. The
Mansalanao, Pontevedra, Negros Occidental and investigation report of the Bureau of Lands dated 24
described in Plan II-12285. The decree of registration February 1970 was favorable to respondents. The
dated 11 November 1920 was issued to Felomina by the investigation report recommended the revocation of
Court of First Instance of Negros Occidental in GLRO Case Felomina's certificates of title over Lot 2.
No. 15426. However, on 26 July 1930, the cadastral court -On 9 October 1970, Segunda caused the annotation of an
issued another decree of registration excluding Lots 2 and adverse claim on the transfer certificates of title of Lots 2
3 from the decree of registration issued to Felomina. The and 3. On 23 October 1970, certain persons acting in
cadastral court amended Felomina's decree of registration behalf of Luis forcibly entered Lot 3. Luis allegedly caused
because Vicente and Felisa had already obtained a the imprisonment of Segunda and respondents' tenant,
homestead patent over Lots 2 and 3. The Director of Lands Valentino Serapio ("Valentino") for refusing to give a share
issued another plan to Felomina. The new plan refLected of the land's produce to either Luis or Vicente, Jr.
the true area of Felomina's land. From 196.3176 hectares,
Felomina's registered land area was reduced to 164.9178 -Respondents prayed for the nullification of petitioners'
hectares, composed only of Lots 1, 4, 5, and 6. certificates of title, turning over of possession of Lots 2 and
3 to respondents and payment of 30% of whatever may be
-Despite the amended decree of 26 July 1930, Felomina recovered as attorney's fees and litigation expenses.
was still able to have the title of Lot 2 reconstituted by
invoking GLRO Case No. 15426. On 31 March 1964, the The trial court ruled that respondents own Lots 2 and 3.
reconstituted title of Lot 2, OCT No. RO-8932, was issued Felomina's reconstituted title over Lot 2 is void because
to Felomina. Felomina then subdivided Lot 2 into Lots 2-A she had no right to reconstitute the title of this property.
and 2-B. In December 1964, OCT No. RO-8932 was Vicente, Jr., Sotera, Perfecta, Consolacion, Luis, Napoleon
cancelled. TCT No. T-39331 covering Lot 2-A was issued to and the spouses Enrique and Pacita, the subsequent
buyers of the subdivided portions of Lot 2, were not
innocent purchasers. All of them had notice of the Laws of Plaintiff-appellee filed with the trial court a complaint
the certificates of title. Vicente, Jr., Sotera, Perfecta, and against defendants-appellees for collection of sum of
Consolacion were declared in default because of their money with damages. Alleging that (i) in March 1998,
failure to file their answer despite notice. Angel and defendants-appellants engaged the services of plaintiff-
Eleuteria also had no prior title over Lot 3 to reconstitute. appellee by buying aggregates materials from plaintiff-
Angel and Eleuteria's title over Lot 3 is thus void. appellee, for which the latter had delivered and supplied
-The defendants were also ordered to pay plaintiffs, by good quality crushed basalt rock; (ii) the parties had
way of attorney's fee[s] 20% per centum of the fair market initially agreed on the terms of payment, whereby
value of the land they each possessed. defendants-appellants would issue the check
corresponding to the value of the materials to be
ISSUE/S:WON the award of attorney’s fees is valid.- YES delivered, or "Check Before Delivery," but prior to the
implementation of the said payment agreement,
DOCTRINES | HELD: defendants-appellants requested from plaintiff-appellee a
Attorney's fees may be awarded when the defendant's act 30-day term from the delivery date within which to pay,
or omission has compelled the plaintiff to incur expenses which plaintiff-appellee accepted; and (iii) after making
to protect his interest. 24 The trial court ordered deliveries pursuant to the purchase orders and despite
petitioners to pay 20% of the fair market value of the land demands by plaintiff-appellee, defendants appellants
they each possessed as attorney's fees. We modify the failed and refused to pay and settle their overdue
award of attorney's fees. The heirs of Napoleon shall pay accounts.
attorney's fees of P50,000.
Defendants-appellants filed a motion to dismiss, alleging
that the complaint was premature considering that
RULING: defendant-appellant PNCC had been faithfully paying its
The heirs of Napoleon Portes, Sr., Maria, Napoleon, Jr., obligations to plaintiff-appellee, as can be seen from the
Nestor, Rebecca, Rosalina, and Nicanor all surnamed substantial reduction of its overdue account as of August
PORTES shall pay P50,000 attorney's fees, and deliver and 1999.
turn over possession of Lot 2-A to respondents Segunda,
Eulalia, Salustancia, Vamerco, JoseCna, Felomino, The trial court rendered a Decision, the dispositive portion
Marciano, Lydia, and Salome, all surnamed ARCALA. The 5 of which reads: ₱782,296.80 as actual damages;
September 1994 Decision of the Regional Trial Court of ₱50,000.00 as attorney’s fees, plus ₱3,000.00 per court
Negros Occidental, 6th Judicial Region, Branch 51, Bacolod appearance; Cost of suit.
City in Civil Case No. 1815 is FINAL and EXECUTORY on
Felomina Gustilo, Angel Gustilo, Luis Gustilo, spouses Defendants-appellants filed a motion for reconsideration,
Vicente, Jr. and Ramona Arcala, Perfecta and Roberto alleging that during the pendency of the case, the principal
Cadongon, Sotera and Alfredo Magsico, Consolacion and obligation was fully paid and hence, the award by the trial
Martin Mujas, and Enrique and Pacita Palmares. Costs court of actual damages in the amount of ₱782,269.80 was
against petitioners. without factual and legal bases. the trial court considered
defendants-appellants’ claim of full payment of the
principal obligation, but still it ordered them to pay legal
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION v. interest of twelve per cent (12%) per annum.
M. ONG, JR. On 9 July 2009, the Special Fourth Division of the CA
promulgated a Decision3 in CA-G.R. CV No. 88827,
FACTS: The present case involves a simple purchase affirming with modification the assailed Decision of the
transaction between defendant-appellant Philippine court a quo. petitioner filed a Motion for Reconsideration,
National Construction Corporation (PNCC), represented by which raised the lone issue of the propriety of the award
defendants-appellants Rogelio Espiritu and Rolando of attorney’s fees in favor of respondent.4 It should be
Macasaet, and plaintiff-appellee APAC, represented by noted that in said motion, petitioner fully agreed with the
Cesar M. Ong, Jr., involving crushed basalt rock delivered CA Decision imposing 6% legal interest per annum on the
by plaintiff-appellee to defendant-appellant PNCC. principal obligation and absolving Rogelio Espiritu and
Rolando Macasaet from any liability as members of the
board of directors of PNCC. Thus, the main focus of the acceptance fee and ₱3,000 as appearance fee, in favor of
Motion for Reconsideration was on the CA’s affirmation of respondent APAC Marketing Incorporated, is hereby
the court a quo’s Decision awarding attorney’s fees in DELETED.
favor of respondent. However, the appellate court’s
Former Special Fourth Division denied petitioner’s Motion
for Reconsideration in a Resolution dated 18 January 2010 Bondoc v. Datu

ISSUE/S: whether the CA gravely erred in awarding FACTS: In November 2006, Edigardo V. Bondoc consulted
attorney’s fees to respondent. Yes Atty. Olimpio R. Datu regarding a civil case for damages he
intended to file against John Paul Mercado. Bondoc
DOCTRINES | HELD: an award of attorney’s fees under disclosed to Datu that he figured in a vehicular accident
Article 2208 demands factual, legal, and equitable caused by Mercado, for which he was hospitalized and was
justification to avoid speculation and conjecture forced to spend P100,000 in medical expenses. An attempt
surrounding the grant thereof.10 Due to the special nature to settle ensued, but he was paid a small sum of P30,000.
of the award of attorney’s fees, a rigid standard is imposed Hence, Bondoc sought to hire Datu to file a civil case for
on the courts before these fees could be granted. Hence, damages. Bondoc and Datu then agreed that Datu will
it is imperative that they clearly and distinctly set forth in handle the filing of the case. In return, Bondoc undertook
their decisions the basis for the award thereof. It is not to pay Datu P25,000 in attorney’s fees, to which Bondoc
enough that they merely state the amount of the grant in with in two installments paid on February 6, 2007 and
the dispositive portion of their decisions.11 It bears August 6, 2007. The checks were received by a certain Tess
reiteration that the award of attorney’s fees is an Pano, a staff in Datu’s office. Bondoc also turned over to
exception rather than the general rule; thus, there must Datu all the documents pertinent to the case and regularly
be compelling legal reason to bring the case within the followed up on the progress of the same but Datu told him
exceptions provided under Article 2208 of the Civil Code to give the court more time.
to justify the award.12
More than a year later, Datu still made no reports to
We have perused the assailed CA’s Decision, but cannot Bondoc regarding the civil case for damages. When
find any factual, legal, or equitable justification for the Bondoc inquired with the trial court in San Fernando City,
award of attorney’s fees in favor of respondent. The he was informed that no civil suit for damages was filed
appellate court simply quoted the portion of the RTC against Mercado in his behalf. He was later showed by
Decision that granted the award as basis for the Datu a letter sent to Mercado, inviting the latter to a
affirmation thereof. There was no elaboration on the meeting to discuss a possible settlement of the case. On
basis. There is therefore an absence of an independent CA the date set for the conference, only Bondoc attended.
finding of the factual circumstances and legal or equitable Datu related to Bondoc that he had talked to Mercado’s
basis to justify the grant of attorney’s fees. The CA merely lawyer who informed him that Mercado had already paid
adopted the RTC’s rational for the award, which in this Bondoc P500,000 in settlement. Bondoc denied this and
case we find to be sorely inadequate. The only discernible presented to Datu the acknowledgement receipt showing
reason proffered by the trial court in granting the award that he was only paid P30,000. Because of this, Bondoc
was that respondent, as complainant in the civil case, was demanded the return of the P25,000 which he paid as
forced to litigate to protect the latter’s interest. Thus, we attorney’s fees. However, Datu refused to comply with
find that there is an obvious lack of a compelling legal the demand.
reason to consider the present case as one that falls within
the exception provided under Article 2208 of the Civil IBP Commissioner Jaime Oracion recommended that Datu
Code. Absent such finding, we hold that the award of be found liable for violation Rule 16.03 of Canon 16, Canon
attorney’s fees by the court a quo, as sustained by the 17, and Rule 18.03 of Canon 18 of the Code of Professional
appellate court, was improper and must be deleted. Responsibility, suspended for three months, and ordered
to pay Bondoc P25,000 with legal interest. IBP Board of
RULING: WHEREFORE, the foregoing Petition is GRANTED. Governors increased the amount from P25,000 to
The assailed Decision dated 9 July 2009 of the Court of P30,000.
Appeals in CA-G.R. CV No. 88827 is MODIFIED, in that the
award of attorney’s fees in the amount of ₱50,000 as
ISSUE/S: Whether or not Datu breached his obligation 18.03, and Canon 17 of the Code of Professional
under the Code of Professional Responsibility. YES Responsibility.

DOCTRINES | HELD: Canon 17 of the Code of Professional

Responsibility reminds lawyers that they owe fidelity to VALENTIN C. MIRANDA, Complainant, - versus- ATTY.
the cause of their client. Inextricably linked to this duty is MACARIO D. CARPIO, Respondent.
Rule 18.03 of Canon 18 which impresses upon lawyers not
to neglect a legal matter entrusted to them. In Camara v. FACTS: Complainant initiated Land Registration
Reyes, the Court held that the duty of fidelity and the Commission (LRC) Case No. M-226 for the registration of
obligation not to neglect a legal matter entrusted by the the aforesaid property. During the course of the
client mean nothing short of entire devotion to the client’s proceedings, complainant engaged the services of
genuine interest and warm zeal in the defense of his or her respondent Atty. Carpio as counsel in the said case when
rights. Lawyers must exert their best efforts to preserve his original counsel, Atty. Samuel Marquez, figured in a
their clients’ cause. Unwavering loyalty displayed to a vehicular accident.
client also serves the ends of justice.
In complainant's Affidavit, complainant and respondent
This Court has consistently penalized lawyers who fall agreed that complainant was to pay respondent Twenty
short of their obligation to manifest devotion and Thousand Pesos (PhP20,000.00) as acceptance fee and
diligence to protect the interest of the client by failing to Two Thousand Pesos (PhP2,000.00) as appearance fee.
file his or her client’s initiatory action after receiving Complainant paid respondent the amounts due him, as
attorney’s fees. evidenced by receipts duly signed by the latter. During the
last hearing of the case, respondent demanded the
In addition to the imposition of disciplinary action, this additional amount of Ten Thousand Pesos (PhP10,000.00)
Court has also consistently ordered the return of for the preparation of a memorandum, which he said
attorney’s fees received with legal interest pursuant to would further strengthen complainant's position in the
Rule 16.03 of Canon 16, which mandates that “[a] lawyer case, plus twenty percent (20%) of the total area of the
shall deliver the funds and property of his client when due subject property as additional fees for his services.
or upon demand.”
Complainant did not accede to respondent's demand for
Applying the foregoing, this Court finds that Datu fell short it was contrary to their agreement. Moreover,
of the fidelity and diligence that he owed his client complainant co-owned the subject property with his
Bondoc. Datu failed to protect Bondoc’s interest by: (a) not siblings, and he could not have agreed to the amount
acting on the complaint he promised to file on behalf of being demanded by respondent without the knowledge
Bondoc; (b) acting on the matter only after 18 months and and approval of his co-heirs. As a result of complainant's
after Bondoc’s persistent inquiries; and (c) by believing refusal to satisfy respondent's demands, the latter became
that Mercado’s alleged payment to Bondoc without as furious and their relationship became sore.
much as demanding any proof of this payment. Rather
than securing Bondoc’s interest, Datu chose to side with A Decision was rendered, granting the petition for
Mercado. This is not the kind of unwavering loyalty and registration, which Decision was declared final and
diligence that is expected of members of the legal executory in an Order dated June 5, 1998. On March 24,
profession. 2000, the Land Registration Authority (LRA) sent
complainant a copy of the letter addressed to the Register
Further, having failed to render legal services, Datu has the of Deeds (RD) of Las Pias City, which transmitted the
legal and moral obligation to return the P25,000 which he decree of registration and the original and owner's
received. duplicate of the title of the property.

RULING: WHEREFORE, in view of the foregoing, we Complainant went to the RD to get the owner's duplicate
AFFIRM WITH MODIFICATION Resolution No. XX-2013-374 of the Original Certificate of Title (OCT) bearing No. 0-94.
of the IBP Board of Governors. We impose upon Atty. He was surprised to discover that the same had already
Olimpio R. Datu the penalty of SIX MONTHS SUSPENSION been claimed by and released to respondent on March 29,
from the practice of law for violation of Rule 16.03, Rule 2000. On May 4, 2000, complainant talked to respondent
on the phone and asked him to turn over the owner's In addition to the alleged agreement between him and
duplicate of the OCT, which he had claimed without complainant for the payment of the 20% professional fees,
complainant's knowledge, consent and authority. respondent invoked the principle of quantum meruit to
Respondent insisted that complainant first pay him the justify the amount being demanded by him.
PhP10,000.00 and the 20% share in the property
equivalent to 378 square meters, in exchange for which, ISSUE/S: WON the professional fees claimed by
respondent would deliver the owner's duplicate of the respondent are valid. NO
OCT. Once again, complainant refused the demand, for
not having been agreed upon. DOCTRINES | HELD: Respondent's claim for his unpaid
professional fees that would legally give him the right to
In a letter dated May 24, 2000, complainant reiterated his retain the property of his client until he receives what is
demand for the return of the owner's duplicate of the OCT. allegedly due him has been paid has no basis and, thus, is
On June 11, 2000, complainant made the same demand on invalid.
respondent over the telephone. Respondent reiterated his Section 37, Rule 138 of the Rules of Court specifically
previous demand and angrily told complainant to comply, provides:
and threatened to have the OCT cancelled if the latter
refused to pay him. Section 37. Attorneys liens. An attorney shall have a lien
upon the funds, documents and papers of his client, which
On June 26, 2000, complainant learned that on April 6, have lawfully come into his possession and may retain the
2000, respondent registered an adverse claim on the same until his lawful fees and disbursements have been
subject OCT wherein he claimed that the agreement on paid, and may apply such funds to the satisfaction thereof.
the payment of his legal services was 20% of the property He shall also have a lien to the same extent upon all
and/or actual market value. To date, respondent has not judgments for the payment of money, and executions
returned the owner's duplicate of OCT No. 0-94 to issued in pursuance of such judgments, which he has
complainant and his co-heirs despite repeated demands to secured in a litigation of his client, from and after the time
effect the same. when he shall have caused a statement of his claim of such
lien to be entered upon the records of the court rendering
In defense of his actions, respondent relied on his alleged such judgment, or issuing such execution, and shall have
retaining lien over the owner's duplicate of OCT No. 0-94. caused written notice thereof to be delivered to his client
Respondent admitted that he did not turn over to and to the adverse party; and he shall have the same right
complainant the owner's duplicate of OCT No. 0-94 and power over such judgments and executions as his
because of complainant's refusal, notwithstanding client would have to enforce his lien and secure the
repeated demands, to complete payment of his agreed payment of his just fees and disbursements.
professional fee consisting of 20% of the total area of the
property covered by the title, i.e., 378 square meters out An attorney's retaining lien is fully recognized if the
of 1,890 square meters, or its equivalent market value at presence of the following elements concur: (1) lawyer-
the rate of PhP7,000.00 per square meter, thus, yielding a client relationship; (2) lawful possession of the client's
sum of PhP2,646,000.00 for the entire 378-square-meter funds, documents and papers; and (3) unsatisfied claim for
portion and that he was ready and willing to turn over the attorney's fees.
owner's duplicate of OCT No. 0-94, should complainant
pay him completely the aforesaid professional fee. Further, the attorney's retaining lien is a general lien for
the balance of the account between the attorney and his
Respondent admitted the receipt of the amount of client, and applies to the documents and funds of the
PhP32,000.00, however, he alleged that the amount client which may come into the attorney's possession in
earlier paid to him will be deducted from the 20% of the the course of his employment.
current value of the subject lot. He alleged that the
agreement was not reduced into writing, because the In the present case, complainant claims that there is no
parties believed each other based on their mutual trust. such agreement for the payment of professional fee
He denied that he demanded the payment of consisting of 20% of the total area of the subject property
PhP10,000.00 for the preparation of a memorandum, and submits that their agreement was only for the
since he considered the same unnecessary. 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 Meanwhile, in 2007, when Atty. Domingo died, he was
respondent that the latter is entitled to an additional substituted by his legal heirs
professional fee consisting of 20% of the total area
covered by OCT No. 0-94. The agreement between the Petitioner wrote the legal heir Ma. Ala Domingo (private
parties only shows that respondent will be paid the respondent) and informed them of the finality of the
acceptance fee and the appearance fees, which the decision which was affirmed by the Supreme Court. He
respondent has duly received. Clearly, there is no then requested her to inform Land Bank of the segregation
unsatisfied claim for attorney's fees that would entitle of the 30% contingent attorney’s fees based on the
respondent to retain his client's property. Hence, increase of the just compensation.
respondent could not validly withhold the title of his client
absence a clear and justifiable claim. The decision became final and executory on March 3,
Respondent's unjustified act of holding on to
complainant's title with the obvious aim of forcing Petitioner received a Notice of Appearance filed by Atty.
complainant to agree to the amount of attorney's fees Antonio Conde replacing him as counsel for the private
sought is an alarming abuse by respondent of the exercise respondents/legal heirs.
of an attorney's retaining lien, which by no means is an
absolute right, and cannot at all justify inordinate delay in On August 6, 2009, Private Respondents filed a Motion for
the delivery of money and property to his client when due Execution through Atty. Conde, while Petitioner filed a
or upon demand. Motion for Approval of Charging Attorney’s Lien and Order
of Payment on August 12, 2009. Private Resp. filed a
RULING: WHEREFORE, Atty. Macario D. Carpio is motion to dismiss.
SUSPENDED from the practice of law for a period of six (6)
months, effective upon receipt of this Decision. He is RTC - Ruled in favor of Private Resp. It ruled that the court
ordered to RETURN to the complainant the owner's has no jurisdiction over Atty. Aquino's motion for approval
duplicate of OCT No. 0-94 immediately upon receipt of this of charging (Attorney's) lien having been filed after the
decision. He is WARNED that a repetition of the same or judgment has become final and executory.
similar act shall be dealt with more severely.
ISSUE/S: Whether the trial court committed a reversible
error in denying the motion to approve attorney's lien and
order of payment on the ground that it lost jurisdiction
AUGUSTO M. AQUINO, vs. HON. ISMAEL P. CASABAR, over the case since judgment in the case has already
become final and executory. - YES
FACTS: On June 2002, Atty. Angel T. Domingo (now
deceased) verbally contracted Augusto Aquino DOCTRINES | HELD: The fee as an item of damages belongs
(Petitioner) to represent him in an Agrarian Case on a to the party litigant and not to his lawyer. It forms part of
contingency fee basis. The case was for the determination his judgment recoveries against the losing party. The client
of the just compensation for the expropriation and taking and his lawyer may, however, agree that whatever
of Atty. Domingo's ricelands consisting of 60.5348 attorney’s fee as an element of damages the court may
hectares, situated in Guimba, Nueva Ecija, by the award shall pertain to the lawyer as his compensation or
Department of Agrarian Reform (DAR), pursuant to as part thereof. In such a case, the court upon proper
Presidential Decree (P.D.)27. The DAR and the Land Bank motion may require the losing party to pay such fee
of the Philippines (Land Bank) initially valued Atty. directly to the lawyer of the prevailing party.
Domingo's property at ₱484,236.27 or ₱7,999.30 per
hectare, which Domingo opposed in courts. Eventually, Similarly, in the instant case, the attorney’s fees being
the RTC, acting as Special Agrarian Court (RTC/SAC) issued claimed by the petitioner is the compensation for
a Decision fixing the just compensation for Atty. professional services rendered, and not an indemnity for
Domingo's property at ₱2,459,319.70 or ₱40,626.54 per damages. Petitioner is claiming payment from private
hectare. The appellate court affirmed in toto the SAC respondents for the successful outcome of the agrarian
Decision. case which he represented. We see no valid reason why
public respondent cannot pass upon a proper petition to However, considering that the contract was made verbally
determine attorney's fees considering that it is already and that there was no evidence presented to justify the
familiar with the nature and the extent of petitioner's legal 30% contingent fees being claimed by petitioner, the only
services. If we are to follow the rule against multiplicity of way to determine his right to appropriate attorney’s fees
suits, then with more reason that petitioner's motion is to apply the principle of quantum meruit (as much as he
should not be dismissed as the same is in effect incidental deserves). The recovery of attorney’s fees on the basis of
to the main case. quantum meruitis a device that prevents an unscrupulous
client from running away with the fruits of the legal
We are, likewise, unconvinced that the court a quo did not services of counsel without paying for it and also avoids
acquire jurisdiction over the motion solely due to non- unjust enrichment on the part of the attorney himself. This
payment of docket fees. Petitioner's failure to pay the Court, which holds and exercises the power to fix
docket fees pertinent to his motion should not be attorney's fees on quantum meruit basis in the absence of
considered as having divested the court a quo's an express written agreement between the attorney and
jurisdiction. We note that, in this case, there was no the client, deems it fair to fix petitioner's attorney's fees at
showing that petitioner intended to evade the payment of fifteen percent (15%) of the increase in the just
docket fees as in fact he manifested willingness to pay the compensation awarded to private respondents.
same should it be necessary.

Private respondent was well within his rights when he RULING: WHEREFORE, the petition is GRANTED.
made his claim and waited for the finality of the judgment Accordingly, the Court grants the Motion for Approval of
for holiday pay differential, instead of filing it ahead of the Charging Attorney's Lien filed by petitioner Atty. Augusto
award’s complete resolution. To declare that a lawyer may M. Aquino. Based on quantum meruit, the amount of
file a claim for fees in the same action only before the attorney's fees is at the rate of fifteen percent (15%) of the
judgment is reviewed by a higher tribunal would deprive amount of the increase in valuation of just compensation
him of his aforestated options and render ineffective the awarded to the private respondents.
foregoing pronouncements of this Court. Here, apparently
petitioner filed his claim as an incident of the main action, NOTES: Rule 20.01 of the Code of Professional
as in fact, his motion was for the court's approval of Responsibility lists the guidelines for determining the
charging attorney's lien and the prayer thereto was to proper amount of attorney fees, to wit:
direct the entry into the case records the attorney's fees
he is claiming. Needless to say, petitioner's motion for Rule 20.1 – A lawyer shall be guided by the following
approval of charging attorney's lien and order of payment factors in determining his fees:
was not intended to be filed as a separate action. a) The time spent and the extent of the services rendered
Nevertheless, it is within petitioner's right to wait for the or required;
finality of the judgment, instead of filing it ahead of the b) The novelty and difficult of the questions involved;
court's resolution, since precisely the basis of the c) The important of the subject matter;
determination of the attorney's fees is the final disposition d) The skill demanded;
of the case, that is, the just compensation to be awarded e) The probability of losing other employment as a result
to the private respondents. of acceptance of the proffered case;
f) The customary charges for similar services and the
Moreover, the RTC/SAC decision became final and schedule of fees of the IBP chapter to which he belongs;
executory on March 3, 2009, and petitioner filed his g) The amount involved in the controversy and the
Motion to Determine Attorney’s Fees on August 10, 2009, benefits resulting to the client from the service;
or only about four (4) months from the finality of the h) The contingency or certainty of compensation;
RTC/SAC decision. Considering that petitioner and Atty. i) The character of the employment, whether occasional or
Domingo’s agreement was contracted verbally, Article established; and
1145 of the Civil Code allows petitioner a period of six (6) j) The professional standing of the lawyer.
years within which to file an action to recover professional
fees for services rendered. Thus, the disputed motion to
approve the charging of attorney's lien and the order of
payment was seasonably filed.