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G.R. No.

72841 January 29, 1987

PROVINCE OF CEBU, petitioner,


vs.
HONORABLE INTERMEDIATE APPELLATE COURT and ATTY. PABLO P.
GARCIA, respondents.

Facts:

While Governor of Province of Cebu, Rene Espina, was on official business in Manila, the
Vice-Governor, Priscillano Almendras and three (3) members of the Provincial Board enacted
Resolution No. 188, donating to the City of Cebu 210 province owned lots all located in the City of
Cebu and authorizing the Vice-Governor to sign the deed of donation on behalf of the province.

Upon his return from Manila, Governor Espina denounced the action of his colleagues in
donating practically all the patrimonial property of the province of Cebu and decided to engage the
services of Atty. Pablo Garcia in filing and prosecuting the case in his behalf and in behalf of the
Province of Cebu. Garcia filed the complaint for the annulment of the deed of donation with an
application for the issuance of a writ of preliminary injunction, which application was granted on the
same day.

A compromise agreement was reached between the parties and was approved by the court
and a decision was rendered on its basis. The court ordered the City of Cebu to return and deliver to
the Province of Cebu all the lots and the Province of Cebu to pay the City of Cebu for and in
consideration of the return of the aforesaid lots.

For his services rendered, Atty. Garcia filed a Notice of Attorney's Lien, praying that his
statement of claim of attorney's lien in said case be entered upon the records thereof. To said notice,
Province of Cebu opposed, stating that the payment of attorney's fees and reimbursement of
incidental expenses are not allowed by law and settled jurisprudence to be paid by the Province

After hearing, the CFI of Cebu rendered judgment in favor of private respondent and against
petitioner Province of Cebu, declaring that the former is entitled to recover attorney's fees on the
basis of quantum meruit and fixing the amount thereof at P30,000.00.

The Intermediate Appellate Court affirmed the findings and conclusions of the trial court. Both parties
went to the Supreme Court with the petitioner anchors its opposition to private respondent's claim for
compensation on the grounds that the employment of claimant as counsel for the Province of Cebu
by then Governor Rene Espina was unauthorized and violative of Section 1681 to 1683 in relation to
Section 1679 of the Revised Administrative Code and that the claim for attorney's fees is beyond the
purview of Section 37, Rule 138 of the Rules of Court.

Issue: Whether or not Province of Cebu is liable for respondent counsel's services?

Held: YES.

The representation of a municipality by a private attorney has been settled to be not allowed.
Section 3 of the Local Autonomy Law provides that only the provincial fiscal and the municipal attorney
can represent a province or municipality in its lawsuits. The provision is mandatory. The municipality's
authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal is
disqualified to represent it as when he represents the province against a municipality.
This provision is intended not to burden the local government with the expenses of hiring a
private lawyer. The lawmaker also assumed that the interests of the municipal corporation would be
best protected if a government lawyer handles its litigations.

Admittedly, Governor Espina was not authorized by the Provincial Board, through a board
resolution, to employ Atty. Pablo P. Garcia as counsel of the Province of Cebu. However, the
circumstances obtaining in the case at bar are such that the rule cannot be applied. The Provincial
Board would never have given such authorization. The controversy involved an intramural fight
between the Provincial Governor on one hand and the members of the Provincial Board on the other
hand. It is simply impossible that the Vice-Governor and the members of the Provincial Board would
pass a resolution authorizing Governor Espina to hire a lawyer to file a suit against themselves.

A strict application of the provisions of the law on the matter would deprive the plaintiffs in
the court below of redress for a valid grievance. The decision of the respondent court is grounded in
equity.

It is also argued that the employment of claimant was violative of the Revised Administrative
Code because the Provincial Fiscal who was the only competent official to file this case was not
disqualified to act for the Province of Cebu. Respondent counsel's representation of the Province of
Cebu became necessary because of the Provincial Board's failure or refusal to direct the bringing of
the action to recover the properties it had donated to the City of Cebu. The Board more effectively
disqualified the Provincial Fiscal from representing the Province of Cebu when it directed the Fiscal
to appear for its members in Civil Case No. R-8669 filed by Atty. Garcia, and others, to defend its
actuation in passing and approving Provincial Board Resolution No. 186.

Anent the question of liability for respondent counsel's services, until the contrary is clearly
shown an attorney is presumed to be acting under authority of the litigant whom he purports to
represent. His authority to appear for and represent petitioner in litigation, not having been
questioned in the lower court, it will be presumed on appeal that counsel was properly authorized to
file the complaint and appear for his client.

A municipality may become obligated upon an implied contract to pay the reasonable value
of the benefits accepted. The doctrine of implied municipal liability has been said to apply to all
cases where money or other property of a party is received under such circumstances that the
general law, independent of express contract implies an obligation upon the municipality to do justice
with respect to the same.

The obligation of a municipal corporation upon the doctrine of an implied contract


does not connote an enforceable obligation. The principle of liability rests upon the
theory that the obligation implied by law to pay does not originate in the unlawful
contract, but arises from considerations outside it. The measure of recovery is the
benefit received by the municipal corporation. The value of the property or services, or the
compensation specified in the contract, is not the measure.

The petitioner cannot set up the plea that the contract was ultra vires and still retain benefits
thereunder. Having regarded the contract as valid for purposes of reaping some benefits, the
petitioner is estopped to question its validity for the purposes of denying answerability.

Actually it was Governor Espina who filed the case against Cebu City and Mayor Osmeña.
Garcia just happened to be the lawyer; Still Atty. Garcia is entitled to compensation. To deny private
respondent compensation for his professional services would amount to a deprivation of property
without due process of law.

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