AMALGAMATED LABORERS ASSOCIATION and/or FELISBERTO M.

JAVIER for himself and as General

President, ATTY. JOSE UR. CARBONELL, ET.AL.(petitioners) vs. CIR and ATTY. LEONARDO C. FERNANDEZ
(respondent) GR No. L-23467 March 27, 1968
FACTS:
Amalgamated
Laborers Association won a case of unfair labor practice against Binalbagan Sugar
Central Company, Inc. (Biscom). Upon motion of the complainants, CIR sent the Chief Examiner to go to Biscom and
compute the backwages. Total net backwages amounted to P79,755.22. Appeals were made against this decision.
In the interim, Atty. Leonardo C. Fernandez (herein respondent), in the same case,
filed a Notice of Attorneys Lien over the
amount to be awarded. He alleged therein that he had been the attorney of record for the said case since the
inception of the preliminary hearings of said case up to the Supreme Court in Appeal, as chief counsel. He claimed
that the labourers have voluntarily agreed to
give him as attorneys fees
on contingent basis 25% of the award. He further averred that this is already
a discounted fee out of the plea of the unions president to reduce it from 30% for them to also satisfy
Atty. Jose Ur Carbonell. Meanwhile, CIR decided the appeals still in favour of the petitioners and ordered Biscom to
deposit the amount representing 25% of P79,755.22 with the cashier of the court to be awarded and granted to
Atty. Fernandez. Atty. Carbonell and ALA appealed from the decision contending that 1) CIR is bereft of jurisdiction
to adjudicate contractu
al disputes over attorneys fees averring that a dispute arising from contracts for attorneys fees is not a labor
dispute and is not one among the cases ruled to be within CIRs authority and to consider such a dispute to be a
mere incident
to a case over which CIR may validly assume jurisdiction is to disregard the special and limited nature of
said courts jurisdiction; 2) the award of 25% as attorneys fees to Atty. Fernandez is excessive, unfair
and illegal. This and a subsequent motion for reconsideration was denied. Hence, this petition.
ISSUES:
1. Is CIR bereft of jurisdiction over the claim for attorneys fees?
2. Is 25% of the award a reasonable attorneys fee?
RULING:
1. No. Court may be expressly granted the incidental powers necessary to effectuate its jurisdiction. In the
absence of such express grant, and in the absence of prohibitive legislation, it shall also be impliedly granted.
In the case at bench, to direct that the present dispute be lodged in another court as petitioners advocate
would only result in multiplicity of suits, a situation abhorred by the rule. Since the court of Industrial Relations
obviously had the jurisdiction over the main cases, it likewise had jurisdiction to consider and decide all matters
collateral thereto, such as cl
aims for attorneys fees made by the members of the bar who appeared therein.
2. Yes. An examination of the record of the case will readily show that an award of 25% attorneys
fees reasonably compensates the whole legal services rendered in the case. This must however be shared by
petitioner Atty. Carbonell and respondent Atty. Fernandez. Afterall, they are the counsel of record of the
complainants. Though common effort is presumed, the rightful shares of both must be ascertained. As such, the
case has been remanded to the CIR for the sole determination of shares.
OTHER IMPORTANT POINTS:

Canon 34 of Legal Ethics condemns the arrangement wherein union presidents should share in
the attorneys fees. No division of fees for legal services is proper, except with another lawyer,
based upon a division of service and responsibility. The union president is not the attorney for the labourers. He
may seek compensation only as union president.

A contingent fee contract specifying the percentage of recovery an attorney is to receive in a suit should be
reasonable under all circumstances of the case, but should always be subject to the supervision of a court, as to its
reasonableness
Retuya v. Gorduiz
Facts:
Ana F. Retuya
filed for a claim of workmens compensation against
Eastern Shipping Lines, the employer of her husband who died in 1968.

In a decision by the Workmens Compensation Unit at Tacloban City, Ana

was awarded a sum for compensation benefits, medical andhospi
talization expenses, burial expenses, and attorneys fees of
Atty.Inego Gorduiz (P300).
In the appeal, a compromise claim was proposed, and subsequentlyaccepted by Ana. The employer paid a reduced
award.
Ana sent the receipt and release, wherein she also explained that Gorduizdid not sign the
joint motion to dismiss the claim
because he wanted
20% of the award as his attorneys fees. She was willing to give him 10%
only.
After cashing the check, she was not able to contact Gorduiz and pay hisfee. Unexpectedly, she was served with a
warrant of arrest. To avoiddetention, she posted bail.
It turned out that Atty. Gorduiz executed an
affidavit stating that Ana
had misappropriated his attorneys fees amounting to three
hundred pesos, that he had demanded payment but she had refusedto make payment.
So she went to Cebu.
On the basis of such affidavit, the acting chief of police filed against Ana acomplaint for estafa.
She filed a motion to quash where she explained that she did not accedeto his demand. She stated that
the estafa case was filed merely toharass her.
The motion to quash was denied and Judge Equipilag
required Ana to produce a copy of the decision awarding her workmens
compensation.
The case of estafa was not tried. Instead, Atty. Diola, lawyer of Ana,offered Gorduiz a sum of five hundred pesos as
settlement of the case.The offer was accepted.

The dismissal was eventually released

Despite the dismissal, Ana felt aggrieved and asked for the disbarment orsuspension of Atty. Gorduiz and Judge
Equipilag.
Held/Ratio
Court found no justification in suspending respondent judge. He ishowever admonished to be more prudent
In the case of Gorduiz, the Solicitor General, disagreeing with therecommendation of the provincial fiscal of
Southern Leyte, filed in this
court a case against Gorduiz a complaint where he prayed that
Gorduizbe suspended for six months because in filing the estafa case, he hadpromoted a groundless suit.
Ana testified that she was willing to pay Gorduiz an amount of
P650 but he demanded a bigger amount.
He then filed an estafa case against her,which was
later dismissed when Ana paid Gorduiz a sum of P500.
In his testimony, Gorduiz denied that he demanded attorneys fees higher
than P300. He explained that he filed the estafa case because after Anareceived the payment of the award, she did
not turn it over desmisepromises and demands.
He further declared that it was only filed to evade payment of attorneys
fees. He also filed the case because he thought that Ana had abscondedwhen she stayed in Cebu for a long time.
He also said that he used his own

money in looking for evidence in the workmens compensation case.

The Court finds justification for suspending the respondent.

The respondent
acted precipitately in filing a criminal action against his client
for the supposed misappropriation.
It is not clear that theclient had swindled him, and there is basis that contrary to his
lawyers oath, he had filed a suit against her and had harassed and
embarrassed her.

Rule 20.02: A lawyer shall avoid controversies with clientsconcerning his compensation and shall resort only to
judicial actiononly to prevent imposition, fraud, or injustice.

Canon 20: A lawyer shall charge only fair and reasonable fees
Aldamiz v. Judge of CFI Mindoro
December 29, 1949
Moran, C.J.
FACTS: Santiago Rementeria y Aldamizcogeascoa, the decedent was a Spaniard and member of the commercial
partnership "Aldamiz y Rementeria." The other members were his brothers. Santiago Rementeria died in Spain in
1937, and probate proceedings were instituted in the same year in the CFI of Mindoro by Gavino Aldamiz
represented by Atty. Juan L. Luna. Gavino Aldamiz was appointed administrator and was again represented by
respondent Atty. Juan Luna.
After ten years from the date of his appointment, Gavino Aldamiz, as administrator, through his attorney, Juan L.
Luna, submitted his accounts for the years 1944, 1945 and 1946 and also a project of partition with a view to
closing the proceedings. The court approved the accounts but refused to approve the project of partition unless all
debts including attorney's fees be first paid. In the project of partition, it was expressly stated that attorney's fees,
debts and incidental expenses would be proportionately paid by the beneficiaries after the closure of the testate
proceedings, but the court refused to sanction this clause of the project. Attorney Luna, to comply with the wishes
of the court, without filing a written petition to have his professional fees fixed, and without previous notice to all
the interested parties, submitted evidence of his services and professional standing so that the court may fix his
compensation and the administrator may make payment thereof.
It is to be noted that Attorney Luna served as attorney for the administrator as legal consultants to Santiago and his
brothers and to the "Aldamiz y Rementeria,". He did not charge them professional services, thus showing
disinterested and extreme liberality due to friendship and other personal considerations toward his clients. When he
wanted to close accounts of the estate, he showed no interest in demanding for payment by preferring to leave the
matter to the future negotiation or understanding with the interested parties. When the amount of his fees was
fixed by the court and Gavino Aldamiz asked him for a substantial reduction, he answered that it was not he who
had fixed the amount but the court, and advised his client to file a motion for reconsideration, with the assurance
that he would offer no objection to any reduction in amount and to any extension of the time for paying what might
be granted by the court.
The Court issued its order of January 21, 1947, awarding respondent Attorney Luna, in payment of his professional
services, an aggregate sum of P28,000. Petitioner was able to pay P5,000 only, and upon his failure to pay the
balance after several demands made upon him by respondent attorney, the latter filed an ex-parte motion for
execution which was granted by the respondent Court.
ISSUE: WON the court erred in fixing the amount of attorneys fees and issuing a writ of execution (YES)
HELD:
1. The correct procedure for the collection of attorney's fees, is for the counsel to request the administrator to make
payment and file an action against him in his personal capacity and not as an administrator should he fail to pay. If
the judgment is rendered against the administrator and he pays, he may include the fees so paid in his account to
the court. The attorney also may, instead of bringing such an action, file a petition in the testate or intestate
proceeding "asking that the court, after notice to all persons interested, allow his claim and direct the administrator
to pay it as an expense of administration."
No written petition for the payment of attorney's fees has ever been filed by the respondent attorney and the
interested parties had not been previously notified thereof nor of the hearing held by the court. Consequently, the

order issued by the respondent court for the payment of the respondents fees and all subsequent orders
implementing it, are null and void, as having been issued an excess of jurisdiction.
2. The order of execution is also null and void because a writ of execution is not the proper procedure allowed by
the Rules of the Court for the payment of debts and expenses of administration. The proper procedure is for the
court to order the sale of personal estate or the sale of mortgaged of real property of the deceased and all debts or
expenses of administration should be paid out of the proceeds of the sale or mortgage. The order for the sale or
mortgage should be issued upon motion of the administrator and with the written notice to all the heirs, legatees
and devisees residing in the Philippines.
Execution may issue only where the devisees, legatees or heirs have entered into possession of their respective
portions in the estate prior to settlement and payment of the debts and expenses of administration and it is later
ascertained that there are such debts and expenses to be paid, in which case "the court having jurisdiction of the
estate may, by order for that purpose, after hearing, settle the amount of their several liabilities, and order how
much and in what manner each person shall contribute, and may issue execution if circumstances require.
Sesbreno vs CA
Sesbreno vs. Court of Appeals
GR 89252, 24 May 1993
FACTS:
Petitioner Sesbreno made a money market placement in the amount of P300,000 with the Philippine Underwriters
Finance Corporation (PhilFinance), with a term of 32 days. PhilFinance issued to Sesbreno the Certificate of
Confirmation of Sale of a Delta Motor Corporation Promissory Note, the Certificate of Securities Delivery Receipt
indicating the sale of the note with notation that said security was in the custody of Pilipinas Bank, and postdated
checks drawn against the Insular Bank of Asia and America for P304,533.33 payable on March 13, 1981. The
checks were dishonored for having been drawn against insufficient funds. Pilipinas Bank never released the note,
nor any instrument related thereto, to Sesbreno; but Sesbreno learned that the security which was issued on April
10, 1980, maturing on 6 April 1981, has a face value of P2,300,833.33 with PhilFinance as payee and Delta Motors
as maker; and was stamped non-negotiable on its face. As Sesbreno was unable to collect his investment and
interest thereon, he filed an action for damages against Delta Motors and Pilipinas Bank. Delta Motors contents that
said promissory note was not intended to be negotiated or otherwise transferred by Philfinance as manifested by
the word "non-negotiable" stamped across the face of the Note.
ISSUE:
Whether the non-negotiability of a promissory note prevents its assignment.
RULING:
A negotiable instrument, instead of being negotiated, may also be assigned or transferred. The legal consequences
of negotiation and assignment of the instrument are different. A non-negotiable instrument may not be negotiated
but may be assigned or transferred, absent an express prohibition against assignment or transfer written in the face
of the instrument. The subject promissory note, while marked "non-negotiable," was not at the same time stamped
"non-transferable" or "non-assignable." It contained no stipulation which prohibited Philfinance from assigning or
transferring such note, in whole or in part.
**A non-negotiable instrument may not be negotiated but may be assigned or transferred, absent an express
prohibition against assignment or transfer written on the face of the instrument.

Bautista vs Gonzales [A.M. No. 1625. February 12, 1990]

16
OCT
[Per Curiam]
FACTS:
In a verified complaint filed by Angel L. Bautista, respondent Ramon A. Gonzales was charged with malpractice,
deceit, gross misconduct and violation of lawyers oath. Required by this Court to answer the charges against him,
respondent filed a motion for a bill of particulars asking this Court to order complainant to amend his complaint by
making his charges more definite. In a resolution the Court granted respondents motion and required complainant
to file an amended complaint. Complainant submitted an amended complaint for disbarment, alleging that
respondent committed the following acts:

1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha
Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for a contingent fee
of fifty percent (50%) of the value of the property in litigation.
xxx
4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971 for the
development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered by TCT No. T1929, claiming that he acquired fifty percent (50%) interest thereof as attorneys fees from the Fortunados, while
knowing fully well that the said property was already sold at a public auction on June 30, 1971, by the Provincial
Sheriff of Lanao del Norte and registered with the Register of Deeds of Iligan City;
xxx
Pertinent to No. 4 above, the contract, in No. 1 above, reads:
We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all
expenses, for the suit, including court fees.
ISSUE:
Whether or not respondent committed serious misconduct involving a champertous contract.
HELD:
YES. Respondent was suspended from practice of law for six (6) months.
RATIO:
The Court finds that the agreement between the respondent and the Fortunados contrary to Canon 42 of the
Canons of Professional Ethics which provides that a lawyer may not properly agree with a client to pay or bear the
expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a lawyer may in good
faith, advance the expenses of litigation, the same should be subject to reimbursement. The agreement between
respondent and the Fortunados, however, does not provide for reimbursement to respondent of litigation expenses
paid by him. An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the clients
rights is champertous [citation omitted]. Such agreements are against public policy especially where, as in this
case, the attorney has agreed to carry on the action at his own expense in consideration of some bargain to have
part of the thing in dispute [citation omitted]. The execution of these contracts violates the fiduciary relationship
between the lawyer and his client, for which the former must incur administrative sanctions.
GAMILLA v MARIO
FACTS: Atty Marino, Jr. as president of the UST Faculty Union and other union officers entered into a collective
bargaining agreement with themanagement of UST for the provision of economic benefits amounting toP35 Milllion.
The 1986 collective bargaining agreement expired in 1988 butefforts to forge a new one unfortunately failed. In
1989, the faculty membersof UST went on strike and as a counter-measure UST terminated theemployment of 16
officers and directors of the UST Faculty Union including Atty Marino, Jr.The Sec of Labor prescribed the retroactivity
of the collectivebargaining agreement to 1988 when the 1986 collective bargainingagreement expired. In the same
year, the administration of UST and theUST Faculty Union also entered into a compromise agreement for
thepayment to settle backwages.The important fact in this case is that Atty, Marino, as president,negotiated with
UST as union attorney, even though he was an interestedparty since he was one of the officers who were dismissed
(conflict of interests)
ISSUE: WoN Marino should be reprimanded?
HELD: YES
RATIO:
1. Atty Marino failed to avoid conflict of interests, first, when henegotiated for the compromise agreement wherein
he played the diverseroles of union president, union atty and interested party being one of thedismissed employees
seeking his own restitution, and thereafter, when heobtained the attys fees of P4,200,000.00 without full prior
disclosure of thecircumstances justifying such clain to the members of the UST FacultyUnion.
2. As one of the 16 union officers and directors seekingcompensation from the UST for their illegal dismissal, Atty.
Marino wasinvolved in obvious conflict of interests when in addition he chose to act asconcurrent lawyer and
president of the UST Faculty Union in forging thecompromise agreement. The test of conflict of interest among
lawyers is whether the acceptance of a new relation will prevent an atty from the full discharge of his duty of
undivided fidelity and loyalty to his client or invitesuspicion of unfaithfulness or double-dealing in the performance

thereof. Inthe same manner, it is undoubtedly a conflict of interests for an atty to puthimself in a position where
self-interest tempts, or worse, actually impelshim to do less than his best for his client.3. Atty Marino. Both as
lawyer and president of the union was dutybound to protect and advance the interest of the union members and
thebargaining unit above his own. This obligation was jeopardized when hispersonal interest complicated the
negotiation process and eventuallyresulted in the lopsided compromise agreement that rightly or wronglybrought
money to him at the expense of the other faculty members. He alsoought to have disclosed his interest (which he
only did only years after theconsummation of his share.. tsk bad.
VINSON PINEDA V. ATTY. DE JESUS, ATTY. AMBROSIO AND ATTY. MARIANO
Facts:

Aurora Pineda filed for declaration of nullity of marriage against Vinson Pineda. Aurora proposed a
settlement regarding visitation rights and the separation of properties which was accepted by Vinson. Settlement
was approved by the trial court and their marriage was declared null and void.
Throughout the proceedings the respondent counsels were compensated but they still billed petitioner
additional legal fees in amounting to P16.5M. Vinson refused to pay the additional fees but instead paid P1.2M.
Respondents filed a complaint with the same trial court.
Trial court ordered Vinson to pay a total of P9M. CA reduced the amount to a total of P2M.
Issues:
W/N the RTC had jurisdiction over the claim for additional legal fees?
W/N respondents were entitled to additional legal fees?
Held:
A lawyer may enforce his right to his fees by filing the petition as an incident of the main action. RTC has
jurisdiction.
The respondents were seeking to collect P50M which was 10% of the value of the properties awarded to
Vinson. What respondents were demanding was additional payment for service rendered in the same case.
The professional engagement between petitioner and respondents was governed by quantum meruit.
Rule 20.4 of the Code of Professional Responsibility advises lawyers to avoid controversies with clients
concerning their compensation and to resort to judicial action only to prevent imposition, injustice or fraud. Suits to
collect fees should be avoided and should be filed only when circumstances force lawyers to resort to it.
In this case, there was no justification for the additional legal fees sought by respondents. It was an act of
unconscionable greed!
ROXAS V. DE ZUZUARREGUI, JR
Facts:
The Zuzuarreguis engaged the legal services of Attys. Romeo G. Roxas and Santiago N. Pastor, to represent
them in the case. This was sealed by a Letter-Agreement, wherein it was contained that the attorneys would
endeavor to secure just compensation with the NHA and other government agencies at a price of 11pesos or more
per square meter, and that any lower amount shall not entitle them to any attys fees. They also stipulated that in
the event they get it for 11pesos per square meter, their contingent fee shall be 30% of the just compensation.
They also stipulated that their lawyers fees shall be in proportion to the cash/bonds ratio of the just compensation.
[]
A Compromise Agreement was executed between the Zuzuarreguis and the NHA. The Compromise
Agreement, stipulated among other things, that the just compensation of the Zuzuarregui properties would be at
P19.50 per square meter payable in NHA Bonds. In a Decision dated 20 December 1985, the RTC, approved the
Compromise Agreement submitted by the parties.
The total amount in NHA bonds released to Atty. Romeo G. Roxas in behalf of the Zuzuarreguis amounted
to P54,500,000.00. Out of this amount, the records show that the amount turned over to the Zuzuarreguis by Atty.
Roxas amounted to P30,520,000.00 (representing the actual just compensation, although this amount is bigger) in
NHA bonds.
Computed at P19.50 per square meter, the 1,790,570.36 square meters property of the Zuzuarreguis was
expropriated at a total price of P34,916,122.00. The total amount released by the NHA was P54,500,000.00. The
difference of P19,583,878.00 is, undoubtedly, the yield on the bonds.
On 25 August 1987, a letter was sent by the Zuzuarreguis new counsel, Jose F. Gonzalez, to Attys. Roxas
and Pastor, demanding that the latter deliver to the Zuzuarreguis the yield corresponding to bonds paid by the NHA
within a period of 10 days from receipt, under pain of administrative, civil and/or criminal action.
Issue:

The honorable court of appeals gravely erred on a question of law in holding that the letter-agreement re:
contingent fees cannot be allowed to stand as the law between the parties
Held:

A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some service. Contracts shall be obligatory, in whatever form they may have
been entered into, provided all the essential requisites for their validity are present. The Zuzuarreguis, in entering
into the Letter-Agreement, fully gave their consent thereto. In fact, it was them (the Zuzuarreguis) who sent the said

letter to Attys. Roxas and Pastor, for the purpose of confirming all the matters which they had agreed upon
previously. There is absolutely no evidence to show that anybody was forced into entering into the LetterAgreement. Verily, its existence, due execution and contents were admitted by the Zuzuarreguis themselves.
In the presence of a contract for professional services duly executed by the parties thereto, the same
becomes the law between the said parties is not absolute but admits an exception that the stipulations therein are
not contrary to law, good morals, good customs, public policy or public order.
Under the contract in question, Attys. Roxas and Pastor are to receive contingent fees for their professional
services. It is a deeply-rooted rule that contingent fees are not per se prohibited by law. They are sanctioned by
Canon 13 of the Canons of Professional Ethics.
A contract for contingent fee, where sanctioned by law, should be reasonable under all the circumstances
of the case including the risk and uncertainty of the compensation, but should always be subject to the supervision
of a court, as to its reasonableness.
Indubitably entwined with the lawyers duty to charge only reasonable fees is the power of this Court to
reduce the amount of attorneys fees if the same is excessive and unconscionable.
Attorneys fees are unconscionable if they affront ones sense of justice, decency or reasonableness. It
becomes axiomatic therefore, that power to determine the reasonableness or the, unconscionable character of
attorney's fees stipulated by the parties is a matter falling within the regulatory prerogative of the courts.
In the instant case, Attys. Roxas and Pastor received an amount which was equal to forty-four percent
(44%) of the just compensation paid (including the yield on the bonds) by the NHA to the Zuzuarreguis, or an
amount equivalent to P23,980,000.00 of the P54,500,000.00. Considering that there was no full blown hearing in
the expropriation case, ending as it did in a Compromise Agreement, the 44% is, undeniably, unconscionable and
excessive under the circumstances. Its reduction is, therefore, in order.
It is imperative that the contingent fees received by Attys. Roxas and Pastor must be equitably reduced. In
the opinion of this Court, the yield that corresponds to the percentage share of the Zuzuarreguis in the P19.50 per
square meter just compensation paid by the NHA must be returned by Attys. Roxas and Pastor.
The yield on the NHA bonds amounted to P19,583,878.00. This amount must therefore be divided between the
Zuzuarreguis, on the one hand, and Attys. Roxas and Pastor, on the other. The division must be pro rata. Attys.
Roxas and Pastor, in the opinion of this Court, were not shortchanged for their efforts for they would still be earning
or actually earned attorneys fees in the amount of P6,987,078.75
On the issue of moral and exemplary damages, we cannot award the same for there was no direct showing
of bad faith on the part of Attys. Roxas and Pastor, for as we said earlier, contingency fees are not per se prohibited
by law. It is only necessary that it be reduced when excessive and unconscionable, which we have already done.
LAW FIRM OF TUNGOL & TIBAYAN V. CA AND SPOUSES INGCO
Facts:
Ingcos hired the petitioner law firm to enforce delivery of a land title. Complaint was filed by the law firm in
behalf of the Ingcos before the HLURB against Villa Crista alleging that the Ingcos had paid P5.1M for a lot but Villa
Crista failed to deliver the title thereto. The Ingcos and Villa Crista entered into a compromise whereby the latter
was bound to refund P4.8M provided that in case of breach of such obligation, an additional P200k would be paid by
way of liquidated damages.
Villa Crista failed to pay. Writ of execution issued. Sheriff levied and auctioned 10 lots belonging to Villa Crista. The
Ingcos bought 3 lots, the payment of which includes P5.1M contract price for the initial lot they primarily bought,
P1.35M attorneys fees and other expenses. The Ingcos then terminated the services of the law firm.
The law firm filed with the HLURB to recover 25% of the excess of the existing prevailing selling price or
the fair market value of the 3 lots. It also filed for damages in the RTC.
The law firm argued that the spouses still owed P4.5M; that in their contract the law firm was entitled to
25% of the excess of the total bid price.
HLURB arbiter ruled for the law firm. HLURHB Board reversed. The Office of the President reversed, affirming the
HLURB arbiters decision. CA reversed the OP.
Held:
SC ruled that the lawyers are not entitled to additional fees. The spouses acquired the 3 lots as the highest
bidder at the auction sale. It can be said that the lots had been acquired not through the recovery efforts of the law
firm.
Moreover, during the negotiations with Villa Crista, it was Renato Ingco who was actually negotiating, not
the lawyers.
When the auction sale was made, the attorney-client relationship no longer existed, hence the lawyers are
not entitled to the additional fees.