Bach v. Ongkiko Kalaw Ethics
Bach v. Ongkiko Kalaw Ethics
Bach v. Ongkiko Kalaw Ethics
419
profession. A lawyer is as much entitled to judicial protection against injustice, imposition of fraud on
the part of his client as the client against abuse on the part of his counsel. The duty of the court is
not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty to see that a
lawyer is paid his just fees. With his capital consisting only of his brains and with his skill acquired
at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the
protection of any judicial tribunal against any attempt on the part of his client to escape payment of
his just compensation. It would be ironic if after putting forth the best in him to secure justice for his
client, he himself would not get his due.
PETITION for review on certiorari of a decision of the Court of Appeals.
VOL. 501, SEPTEMBER 11, 2006
421
All fees mentioned herein are payable within seven (7) days from receipt of our statement of account.
It is understood that all late payments shall be subject to interest payment at the rate of 2 % per
month of delay, a fraction of a month being considered as one month, counted from the date the fees
shall fall due, without need of prior demand.
xxxx
1. (F)Termination Clause
It is understood that you may terminate our services at any time. In such an event, we shall be
entitled to collect fees for legal services already performed and results obtained based on quantum
meruit.4
On 7 March 1996, respondent filed with the RTC a Notice 5 of Charging Lien over the properties of
the spouses Bach.
On 5 February 1997, the RTC issued an Order 6 directing the annotation of the charging lien in
the amount of P1,000,000.00 on all the titles of the spouses Bachs personal and real properties
enumerated in the notice of charging lien.
On 11 February 1999, respondent received a copy of the Order 7dated 8 June 1998, granting
petitioners Motion to Withdraw his petition in Civil Case No. 95-224.
Despite respondents demands for his legal fees, petitioner failed and refused to pay. Thus,
respondent filed a Complaint8 for a sum of money also before the RTC of Makati, Branch 148,
docketed as Civil Case No. 99-514.
Respondent prayed for the payment of the following: P1,000,000.00 as the latters lawful fees for
services rendered in Civil Case No. 95-224, plus 2% interest from date of final demand until paid;
P250,000.00 as exemplary damages; P200,000.00 representing billable time spent in prosecuting the
case, plus another P150,000.00 for any appeal taken; and P50,000.00 as litigation expenses and the
cost of suit.
Within the period for filing an Answer, petitioner filed a Motion 9 to dismiss on the ground that
respondents claim had already been paid, waived, abandoned or otherwise extinguished. Petitioner
contended that prior to respondents withdrawal as counsel in Civil Case No. 95-224, petitioner had
already paid respondents services in the total amount of P200,000.00.
On 9 August 1999, the Motion to Dismiss was denied 10 by the RTC for lack of merit. Petitioner
failed to file his Answer; thus, he was declared in default and respondent was allowed to present its
evidence ex parte.11
On 24 January 2002, the RTC rendered its judgment in favor of the respondent, the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendant and the latter is hereby ordered to pay the following:
1. 1.The amount of P750,000.00 as plaintiffs lawful fees for services rendered under Civil Case
No. 95-224, plus interest at the rate of 2% per month from the date of demand until paid;
2.P700,000.00 representing billable time which was spent in prosecuting this case;
1. 3.P50,000.00 as and litigation expenses, and
2. 4.Costs of suit.
Not satisfied, petitioner appealed to the Court of Appeals, which modified the RTC Decision, thus:
WHEREFORE, Based on the foregoing premises, the instant appeal is PARTLY GRANTED and the
appealed January 24, 2002 Decision of the Regional Trial Court of Makati City-Branch 148 in Civil
Case No. 99-514 is hereby MODIFIED. Accordingly, the award of P700,000.00 representing billable
time allegedly spent in the prosecution of the case a quo is hereby DELETED. All other aspects of the
appealed DECISION are UPHELD.13
Hence, this Petition filed by petitioner Guenter Bach raising the following issues to wit:
SC
WHETHER OR NOT UNDER THE CONCEPT OF QUANTUM MERUIT, THE AMOUNT OF
P750,000.00 AS FEES FOR SERVICES RENDERED WITH INTEREST PEGGED AT 2% A MONTH
FROM DATE OF DEMAND UNTIL FULLY PAID IS REASONABLE
WHETHER OR NOT THERE IS LEGAL BASIS TO AWARD P50,000.00 AS AND FOR
LITIGATION EXPENSES AND COSTS OF SUIT.14
On the first issue, petitioner contends that the P750,000.00 awarded to the respondent by way
of quantum meruit, with interest of 2% a month from date of demand until fully paid, is excessive,
unreasonable and confiscatory. Thus, petitioner prays for reduction of the same.
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12
Id., at p. 236.
Rollo, pp. 21-22.
14
Id., at p. 7.
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almost beyond the power of review by the Supreme Court.15 Thus, in the exercise of the
Supreme Courts power of review the findings of facts of the Court of Appeals are conclusive and
binding on the Supreme Court.
XPN: There are, however, recognized exceptions to this rule, namely: (1) when the findings are
grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is
based on misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making
the findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellee and the appellant; (7) when the findings are contrary to the trial
court; (8) when the findings are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs
are not disputed by the respondent; (10) when the findings of facts are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties, which if properly considered,
would justify a different conclusion.16 Exceptions (4) and (11) are present in the case at bar, and so
this Court shall make its own determination of the facts relevant for the resolution of the case.
Ordinarily, therefore, we would have remanded this case for further reception of evidence as to
the extent and value of the services rendered by respondent to petitioner. However, so as not to
needlessly prolong the resolution of a comparatively simple controversy, we deem it just and
equitable to fix in the present recourse a reasonable amount of attorneys fees in favor of respondent.
There are two concepts of attorneys fees. In the ordinary sense, attorneys fees represent the
reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter.
(come from the client) On the other hand, in its extraordinary concept, attorneys fees may be
awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party.
(Come from the opposing party)
The issue in this case concerns attorneys fees in the ordinary concept.
Generally, the amount of attorneys fees due is that stipulated in the retainer agreement which is
conclusive as to the amount of the lawyers compensation. In the absence thereof, the amount of
attorneys fees is fixed on the basis of quantum meruit, i.e., the reasonable worth of the attorneys
services. Courts may ascertain also if the attorneys fees are found to be excessive, what is reasonable
under the circumstances. In no case, however, must a lawyer be allowed to recover more than what is
reasonable,
pursuant to Section 24, Rule 138 of the Rules of Court, which provides:
SEC. 24. Compensation of attorneys fees; agreement as to fees.An attorney shall be entitled to have
and recover from his client no more than a reasonable compensation for his services, with a view to
the importance of the subject matter of the controversy, the extent of the services rendered, and the
professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert
witnesses as to the proper compensation, but may disregard such testimony and base its conclusion
on its own professional knowledge. A written contract for services shall control the amount to
were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property
affected by the controversy or involved in the employment; (6) the skill and experience called for in
the performance of the services; (7) the professional character and social standing of the attorney; (8)
the results secured; and (9) whether the fee is absolute or contingent, it being recognized that an
attorney may properly charge a much larger fee when it is contingent than when it is not.
Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors
which should guide a lawyer in determining his fees:
1. (a)the time spent and extent of services rendered or required;
2. (b)the novelty and difficulty of the questions involved;
3. (c)the importance of the subject matter;
4. (d)the skill demanded;
5. (e)the probability of losing other employment as a result of the acceptance of the proffered
case;
6. (f)the customary charges for similar services and the schedule of fees of the IBP Chapter to
which he belongs;
7. (g)the amount involved in the controversy and the benefits resulting to the client from the
service;
8. (h)the contingency or certainty of compensation;
9. (i)the character of the employment, whether occasional or established; and
10. (j)the professional standing of the lawyer.
In determining a reasonable fee to be paid to respondent as compensation for their services
on quantum meruit, based on the factors abovequoted, it is proper to consider all the facts and
circumstances obtaining in this case.
It is undisputed that respondent firm had rendered services as counsel for the petitioners in Civil
Case No. 95-244. The services rendered consist of the following:
1. 1.Respondent was able to annotate a notice20 of lis pendenson the property of Spouses Bach in
Caloocan City covered by TCT No. C-12112, thereby preventing easy disposition of the
property by Luzviminda Bach;
2. 2.Respondent was likewise able to annotate a notice 21 of lis pendens on the property of
Spouses Bach in Pasig City covered by TCT No. 48223, thereby preventing disposition of the
property by Luzviminda Bach;
3. 3.Further, respondent annotated a notice 22 of lis pendens on the property of Spouses Bach in
Dasmarias, Cavite covered by TCT No. T-339282, thereby preventing disposition of the
property by Luzviminda Bach;
1. 4.Additionally, respondent annotated a notice 23 of lis pendens on the property of Spouses
Bach in Tanza, Cavite, covered by TCT No. T-255263, thereby preventing disposition of the
property by Luzviminda Bach;
2. 5.Respondent also worked on the annotation of the notice 24of lis pendens on the property of
Spouses Bach in Makati, covered by TCT No. S-62541, thereby preventing disposition of the
property by Luzviminda Bach;
3. 6.Respondent worked on the annotation of a notice of lis pendens on the property of Spouses
Bach in Dasmarias, Cavite, covered by TCT No. T-380848, thereby preventing disposition
of the property by Luzviminda Bach;
4. 7.Respondent annotated a notice25 of lis pendens on the property of Spouses Bach situated in
Tagaytay City, covered by TCT No. P-705, thereby preventing disposition of the property by
Luzviminda Bach;
5. 8.Respondent filed the Petition26 for Declaration of Nullity of Marriage and Dissolution of the
Conjugal Partnership of Gains of petitioner with his wife;
6. 9.Respondent prepared an affidavit27 in favor of petitioner attesting to the fact of petitioners
marriage and their properties acquired during his marriage with Luzviminda Bach:
1. 10.Respondent prepared an ex parte motion28 to declare petitioners wife to have waived her
right to file answer for failure to file the same within the period granted by law and to direct
the public prosecutor to determine whether or not a collusion exist;
2. 11.Respondent prepared a Petition29 for appointment of a receiver and to compel petitioners
wife to render an accounting;
3. 12.Other services included the filling of several oppositions30to certain motions filed by
petitioners wife;
4. 13.Respondent filed a motion31 to set the case for preliminary investigation;
5. 14.Respondent filed an ex parte motion32 to declare petitioners wife in default;
was needed for lawyers of respondent Law Firm to accomplish what they had done in the
case before they withdrew their appearance.
We do not find herein a situation so intricate that demands more than a careful scrutiny of the legal
matters involved. These are simply the normal duties of a lawyer that he is bound by law to render to
his clients with utmost fidelity for which his client must not be burdened to pay an extra price.
It bears stressing that at the time respondent firm withdrew their appearance due to policy
differences with petitioner, the case was still in its initial stage.
Guided by the above yardstick and so much of the pertinent data as are extant in the records of
this case and in the exercise of our sound discretion, we hold that the amount of P500,000.00 is a
reasonable and fair compensation for the legal services rendered by respondent to the petitioner.
The imposition of legal interest on the amount payable to private respondent as attorneys fees is
unwarranted.
Even as we agree that parties can freely stipulate on the terms of payment, still the imposition of
interest in the payment of attorneys fees is not justified. In the case of Cortes v. Court of
Appeals,40 we ruled that Article 220941 of the Civil Code does not even justify the imposition of legal
interest on the payment of attorneys fees as it is a provision of law governing ordinary obligations
and contracts. It deleted the 6% interest imposed by the appellate court on the payment of attorneys
fees.
It ratiocinated by citing Mambulao Lumber Co. v. Philippine National Bank,42 thus:
Contracts for attorneys services in this jurisdiction stands upon an entirely different
footing from contracts for the payment of compensation for any other services. x x x [A]n
attorney is not entitled in the absence of express contract to recover
more than a reasonable compensation for his services; and even when an express contract is made,
the court can ignore it and limit the recovery to reasonable compensation if the amount of the
stipulated fee is found by the court to be unreasonable.
This is a very different rule from that announced in section 1091 of the Civil Code with reference to
the obligation of contracts in general, where it is said that such obligation has the force of law
between the contracting parties. Had the plaintiff herein made an express contract to pay his
attorney an uncontingent fee of P2,115.25 for the services to be rendered in reducing the note here in
suit to judgment, it would not have been enforced against him had he seen fit to oppose it, as such a
fee is obviously far greater than is necessary to remunerate the attorney for the work involved and is
therefore unreasonable. In order to enable the court to ignore an express contract for attorneys fees,
it is necessary to show, as in other contracts, that it is contrary to morality or public policy
taking his attorneys oath as an officer of the court, a lawyer submits himself to the authority of the
courts to regulate his right to charge professional fees. 46
Though we reduced the award of attorneys fees and disallowed the imposition of interest thereon,
the fact that an attorney plays a vital role in the administration of justice underscores the need to
secure to him his honorarium lawfully earned as a means to preserve the decorum and respectability
of the legal profession. A lawyer is as much entitled to judicial protection against injustice,
imposition of fraud on the part of his client as the client against abuse on the part of his counsel. The
duty of the court is not alone to see that a lawyer acts in a proper and lawful manner; it is also its
duty to see that a lawyer is paid his just fees. With his capital consisting only of his brains and with
his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is
entitled to the protection of any judicial tribunal against any attempt on the part of his client to
escape payment of his just compensation. It would be ironic if after putting forth the best in him to
secure justice for his client, he himself would not get his due. 47
Thus, the Court of Appeals did not err in awarding expenses of litigation. Article 2208,
paragraphs 2, 5 and 11, of the Civil Code, authorize the recovery of such fees (2) When the
defendants act or omission has compelled the plaintiff to litigate x x x or to incur expenses to protect
his interest; x x x (5) Where the defendant acted in gross and evident bad faith
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46
Sumaoang v. Judge, RTC, Br. XXXI, Guimba, Nueva Ecija, G.R. No. 78173, 26 October
1992, 215 SCRA 136, 143.
47
Agpalo, LEGAL ETHICS (4th Ed., 1989), pp. 302-303.
435
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435
Bach vs. Ongkiko Kalaw Manhit & Acorda Law Offices
in refusing to satisfy the plaintiffs plainly valid, just and demandable claim; x x x and (11) In any
other case where the court deems it just and equitable that attorneys fees and expenses of litigation
should be recovered. Considering the fact that respondent was drawn into this litigation by
petitioner to protect and defend their interest and taking into account the services already rendered
by respondent to petitioner, the sum of P30,000.00 as expenses of litigation and cost of suit would be
reasonable under the premises.
WHEREFORE, the Decision appealed from is AFFIRMED WITH MODIFICATIONS to the effect
that the attorneys fees awarded to respondent is REDUCED to P500,000.00, the legal interest of 2%
on the amount due to respondent is DELETED, and the award of litigation expenses is REDUCED to
P30,000.00.
SO ORDERED.
Panganiban (C.J., Chairperson), Ynares-Santiago,Austria-Martinez and Callejo, Sr., JJ.,
concur.
Judgment affirmed with modifications.
Notes.An award of attorneys fees must have a factual, legal or equitable justification and
cannot be left to speculation and conjecture. (Mateo vs. Diaz, 374 SCRA 33 [2002])
Attorneys fees may be awarded when a party is compelled to litigate or incur expenses to protect
his interest by reason of an unjustified act of the other party. (Terminal Facilities and Services
Corporation vs. Philippine Ports Authority, 378 SCRA 82 [2002])
o0o
436
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