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Inciong vs. Domingo

*
G.R. No. 96628. July 3, 1992.

CEFERINO INCIONG, petitioner, vs. HONORABLE

EUFEMIO DOMINGO, Chairman, Commission on Audit,
respondents.

Attorney’s fees; The position of respondent Chairman of the

COA disallowing payment of attorney’s fees to petitioner not
proper.—As correctly stated by the Office of the Solicitor General,
the position of respondent Chairman of the COA disallowing
payment of attorney’s fees to petitioner Atty. Ceferino Inciong is
not proper.
Same; Same; Employment of petitioner as counsel even if
unauthorized by the Sangguniang Barangay is binding on
Barangay Caloocan.—The employment by Barangay Caloocan of
petitioner as its counsel, even if allegedly unauthorized by the
Sangguniang Barangay, is binding on Barangay Caloocan as it
took no prompt measure to repudiate petitioner’s employment.
Same; Same; Decision in Civil Case No. 1878 directing
Barangay Caloocan to pay Attorney’s fees to petitioner has become
final and executory and is binding upon Barangay Caloocan.—
The Decision dated August 9, 1989 of Branch XI, Regional Trial
Court, Balayan, Batangas in Civil Case No. 1878, directing
Barangay Caloocan to pay attorney’s fees to petitioner, has
become final and executory and is binding upon Barangay
Caloocan.

PETITION for review of the decision of the Regional Trial

Court of Balayan, Batangas, Br. II.

_________________

*EN BANC.

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Inciong vs. Domingo

The facts are stated in the opinion of the Court.

     Manuel D. Tamase for respondent.

PARAS, J.:

For failure of the Philippine Sugar Commission

(PHILSUCOM), now Philippine Sugar Refineries
Corporation, to pay real estate taxes due on its sugar
refinery situated at Barangay Caloocan, Balayan,
Batangas, the Provincial Treasurer of Batangas scheduled
the sale of said refinery at public auction on March 6, 1986.
To restrain the sale, PHILSUCOM filed a petition for
prohibition in the Court of Appeals against the Provincial
Treasurer and Provincial Assessor of Balayan, Batangas.
The petition was docketed as CA GR SP No. 08467.
On March 5, 1986, the Court of Appeals issued a
restraining order directing respondents therein to maintain
the status quo.
Meanwhile, Barangay Caloocan thru herein petitioner
Atty. Ceferino Inciong filed a Motion for Intervention
alleging that it (Barangay Caloocan) is an indispensable
party in the case as it has a 10% share of the property tax
sought to be collected from PHILSUCOM.
Thereafter, Barangay Caloocan filed an Answer to
PHILSUCOM’s Petition as well as a motion for
reconsideration of the restraining order of March 5, 1986.
On December 24, 1986, PHILSUCOM and the Municipal
Treasurer of Balayan, Batangas entered into an Amnesty
Compromise Agreement pursuant to and in conformity
with Executive Order No. 42 dated August 22, 1986. The
agreement was submitted to the Court of Appeals and the
case was accordingly dismissed.
PHILSUCOM paid the amount of P7,199,887.51 to the
Municipal Treasurer. Out of this amount, the Municipal
Treasurer allocated to Barangay Caloocan as its share 10%
or a total of P719,988.75.
Consequently, Atty. Ceferino Inciong filed a case for
payment of attorney’s fees against the Province of
Batangas, Municipality of Balayan and Barangay
Caloocan, before the Regional Trial Court, Branch XI,
Balayan, Batangas. The case was docketed as Civil Case
No. 1878.
On August 9, 1989, the Regional Trial Court rendered
judg-
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Inciong vs. Domingo

ment in favor of Atty. Ceferino Inciong, the pertinent

portion of which reads:

“From the foregoing testimony and the supporting exhibits—D

and D-1, it is gathered and established that indeed, the plaintiff
attorney was requested and has acted as counsel for defendant
Barangay Caloocan and rendered his utmost in prosecuting the
case. As a result of his efforts and zeal in pursuing the case,
defendant Barangay Caloocan was awarded the claim asked for,
when finally the Philsucom acceded to a compromise agreement.
Plaintiff’s counsel, assistance and services should therefore be
recognized. That he acted as counsel is established as even
defendant Barangay Caloocan failed to deny the relationship and
services rendered by failing to file its answer.
“However, there was no formal contract as to the amount due
the plaintiff by way of attorney’s fees. Somewhere in his
testimony plaintiff suggest that TEN PERCENT (10%) of the
barangay share on the amount paid, be fair and just
renumeration for all the expenses and services he rendered, which
the Court finds such amount to be fair, proper and just, taking
into consideration, the professional standing of the plaintiff as a
lawyer, the time and efforts he exerted, the importance of the
case. The law mandates that 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.
“The Court finds that a TEN PERCENT (10%) of what
defendant Barangay Caloocan was awarded is fair and reasonable
amount for the legal services of the plaintiff counsel.
“WHEREFORE, partial judgment in the case is hereby
rendered.

‘1. Ordering the defendant Barangay Caloocan of the

Municipality of Balayan, Batangas, to pay the plaintiff
and by way of attorney’s fees, the amount equivalent to a
TEN PERCENT (10%) of the amount awarded to said
defendant barangay.
‘2. Ordering defendant barangay to pay the costs of suit.’

“SO ORDERED.” (p. 8, Rollo)

This decision has long become final, hence, a writ of

execution was issued. But, when the Withdrawal Voucher
was presented for audit to satisfy the writ of execution, the

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Provincial Auditor of Batangas referred the matter en

consulta to the

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Inciong vs. Domingo

Director, COA Regional Trial Office No. IV.

In a 2nd Indorsement dated October 3, 1990, the COA
Director referred the Auditor’s query to respondent
Chairman, Commission on Audit, with the information
among others, that the request of the Barangay Captain of
Caloocan for petitioner’s legal assistance was not taken up
nor approved by the Sangguniang Barangay nor was there
any showing that it was approved by the Solicitor General
and concurred in by COA as required under COA Circular
No. 86-255, dated April 2, 1986.
In a 3rd Indorsement dated December 12, 1990,
respondent chairman Eufemio Domingo, Commission on
Audit, in reply to the query stated that the hiring of
petitioner by the Punong Barangay did not carry with it
the approval of the Sangguniang Barangay as required
under Section 91 (1-1) of the B.P. 337, nor was there any
appropriation therefor; the hiring was not approved by the
Solicitor General and concurred in by COA.
Hence, the instant petition.
Required to comment, the Office of the Solicitor General
filed a Manifestation and Motion stating that after a
careful study of this case, it is unable to agree with the
position of respondent Chairman Eufemio Domingo in his
3rd Indorsement disallowing payment of attorney’s fees to
petitioner Atty. Ceferino Inciong by Barangay Caloocan. (p.
35, Rollo)
The Office of the Solicitor General was thus allowed to
withdraw its appearance and the Comment for respondent
was filed by COA’s Legal Office.
The petition was given due course in Our Resolution
dated July 30, 1991.
We grant the petition.
As correctly stated by the Office of the Solicitor General,
the position of respondent Chairman of the COA
disallowing payment of attorney’s fees to petitioner Atty.
Ceferino Inciong is not proper in the light of the following
considerations.
(1) The employment by Barangay Caloocan of petitioner
as its counsel, even if allegedly unauthorized by the
Sangguniang Barangay, is binding on Barangay Caloocan
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as it took no prompt measure to repudiate petitioner’s

employment (Province of Cebu v. Intermediate Appellate
Court, 147 SCRA 447).
(2) The Decision dated August 9, 1989 of Branch XI,
Regional Trial Court, Balayan, Batangas in Civil Case No.
1878,
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Inciong vs. Domingo

directing Barangay Caloocan to pay attorney’s fees to

petitioner, has become final and executory and is binding
upon Barangay Caloocan (Mercado v. Court of Appeals, 162
SCRA 75).
(3) COA Circular No. 86- 255 cannot diminish the
substantive right of petitioner to recover attorney’s fees
under the final and executory Decision dated August 9,
1989 of the Regional Trial Court.
In its Comment, the respondent, thru the COA Legal
Office states that PHILSUCOM paid the amount of
P7,199,887.51 to the Municipal Treasurer under the
Amnesty Compromise Agreement. Out of this amount, the
Municipal Treasurer allocated to Barangay Caloocan as its
share the amount of P719,988.75. This allocation is
erroneous because pursuant to Republic Act No. 5447,
Barangay Caloocan should only share from the basic tax
which is 50% of what PHILSUCOM paid because the other
half should go to the Special Education Fund. Under the
said Republic Act No. 5447, the rightful share of Barangay
Caloocan should be P359,994.38 only.
Thus, respondent prays that in the event the Court
orders the payment of attorney’s fees to petitioner this
amount of P359,994.38 should be made as the basis
therefor.
WHEREFORE, the petition is GRANTED and
respondent is ordered to direct the payment of attorney’s
fees to petitioner Atty. Ceferino Inciong in an amount
equivalent to 10% of P359,994.38.
SO ORDERED.

          Narvasa (C.J.), Gutierrez, Jr., Cruz, Feliciano,

Padilla, Bidin, Griño-Aquino, Medialdea, Regalado,
Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.

Petition granted.

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