[G.R. No. 127598.January 28, 2002]
MLA. ELECTRIC CO. vs. THE HON. SEC.
QUISUMBING, et al.
SPECIAL FIRST DIVISION
Quoted hereunder, for your information, is a
resolution of this Court dated 28
G.R. No. 127598 (Manila Electric Company v. The Hon. Secretary of Labor Leonardo
Quisumbing, et al.)
For our resolution is a "Motion to Approve and
Enforce Contract of Professional Service" filed by Atty. Manuel B. Tomacruz,
counsel for First Line Association of Meralco Supervisory Employees (FLAMES).
On March 15, 1999, Atty.
Tomacruz and FLAMES entered into a "Contract for Professional Service,"cralaw
under which FLAMES undertook to pay Atty. Tomacruz for his legal services, as
(1)Acceptance Fee - P50,000.00, payable upon
signing of the agreement.
(2)Contingent Fee - 15% of benefits which may accrue to client and/or its members as
a result of judgment, compromise agreement/amicable settlement, or otherwise,
at any stage. The fee is payable upon the termination of the case by any of
The contract also specified the nature and scope of professional services
to be rendered by Atty. Tomacruz, to wit:
Handling of Client's intervention in the Supreme Court,
until the case is finished, by judgment or by compromise agreement or amicable
settlement, or otherwise at any stage.
On the same date of the execution of the
service contract, Atty. Tomacruz, as counsel for FLAMES, forthwith filed a
"Motion for Leave to intervene and to Treat this as Movant's intervention.
According to Atty. Tomacruz, FLAMES President Emilio E. Diokno intimated that
pursuant to the Court's Resolution dated August 1, 2000, each of the more than
3,000 members of FLAMES would receive P25,000.00 in salary increases for the
first three years of their 1997-2002 CBA. FLAMES expressed
satisfaction with this latest Court ruling to Atty. Tomacruz and relayed its
decision not to move for a reconsideration of the said Resolution.cralaw
By this time, FLAMES had already delivered to
Atty. Tomacruz the P50,000.00 as acceptance fee and another P50,000.00
representing his contingent fee under their contract. FLAMES explained to Atty.
Tomacruz that pending efforts to collect from its members, it could only effect
partial payment of his fee due to financial constraints. FLAMES nevertheless
assured Atty. Tomacruz that it intends to honor its contractual obligation.cralaw
After the lapse of more than a year with no
payments being made, Atty. Tomacruz wrote FLAMES demanding the balance of his
stipulated fee under the contract of service, computed at 15% of the amount which each FLAMES member received from MERALCO or
P25,000.00 per member.cralaw
However, on September 26, 2001, Atty. Tomacruz received a lettercralaw
from FLAMES, expressing its refusal to make further payments. FLAMES stated
that the 15% contingent fee had no actual basis "since no benefit was in fact
obtained by the members of FLAMES consequent to the filing of the Motion for
intervention." FLAMES added that the amounts already received by Atty. Tomacruz
was reasonable compensation for his services and was commensurate to what was
actually worked out by him.
Hence, on October 22, 2001, Atty. Tomacruz
filed this present motion.
Atty. Tomacruz seeks from this Court, an order
for the enforcement of the contract of services against FLAMES, directing the
latter to pay him the amount equivalent to 15% of P25,000.00 or P3,750.00 each, for the more or less 3,000
members comprising the union.
On the other hand, FLAMES resists the claim of
Atty. Tomacruz and states, in its opposition to the motion,cralaw
that the Court did not incorporate in its February 22, 2000 resolution any
award in FLAMES' favor, upon which the contingency fee may be based. Even as
FLAMES admitted that Atty. Tomacruz raised in his pleadings for FLAMES, "worthy
arguments" that were "quite salutary" and done with the "trademark of legal
craftsmanship," FLAMES asserts that it did not gain anything from the case,
which would justify the award of attorney's fees other than those already
received by Atty. Tomacruz.
The contract of professional service entered
into by Atty. Tomacruz and FLAMES is clear and unambiguous. The contingency fee
arrangement, which is valid in our jurisdiction,cralaw
indubitably calls for the payment of 15% of any benefit which may accrue to the
union and its members, as a result of the judgment in the case.Per computation, the professional fees being
claimed by Atty. Tomacruz would amount to P11,250,000.00, computed by
multiplying the number of FLAMES members, which stand at 3,000, with 15% of
P25,000.00 - the amount allegedly received as wage increase by each FLAMES
member under the CBA.
Generally speaking, where the employment of an
attorney is under an express valid contract fixing the compensation for the
attorney, such contract is conclusive as to the amount of compensation.cralaw
A stipulation on a lawyer's compensation in a written contract for professional
services ordinarily controls the amount of fees that the contracting lawyer may
be allowed, unless the court finds such stipulated amount unreasonable or
unconscionable.cralaw The degree
of unconscionability or unreasonableness of a stipulated amount in a contingent
fee contract, will not however, preclude recovery. It merely justifies the
court's fixing a reasonable amount for the lawyer's services.cralaw
In this case, we believe that the sum of money
being claimed by Atty. Tomacruz is indeed excessive. It must be pointed out
that FLAMES intervened in this case only after the Court had already rendered
its Decision on January 27, 1999. Atty. Tomacruz did not participate in the
proceedings below and was called upon to argue in favor of only one issue.
Apart from the fact that his engagement as counsel merely extended for a little
more than a year, the number of pleadings filed by Atty. Tomacruz in behalf of
FLAMES totaled only five.
This is not to say, however, that the efforts
exerted by Atty. Tomacruz towards protecting and ensuring FLAMES' interest in
the case, are minute and insignificant. On the contrary, it appears that he
zealously and skillfully pursued his arguments in FLAMES' behalf and diligently
worked for a modification of the Court's Decision. The astuteness of his
arguments and his well-researched pleadings attest to this fact. Even FLAMES
could not deny the quality of his professional service, as it so admitted in
its opposition to the motion.
It is also worth noting that the question
involved in FLAMES' motion for intervention and MEWA's motion for
reconsideration, for that matter, was by all means complex. Although not novel
in the strict sense of the word, it necessitated a close examination and
comparison of jurisprudence on the matter and required extra effort to convince
the Court to modify its earlier decision.
Undoubtedly, the points raised by Atty.
Tomacruz in his various motions to support his arguments for FLAMES,
contributed greatly to a clearer understanding and appreciation of the issue
then at hand. FLAMES cannot rightfully claim that it did not benefit from the
intervention of Atty. Tomacruz, which FLAMES itself solicited, because the modification
of our first decision enabled FLAMES to finally determine what was monetarily
due its members under its own CBA with MERALCO. The inclusion in the Court's
subsequent resolutions of MEWA's 1995-1996 wage increase, upon which FLAMES'
CBA salary differentials would be based, could, in large part, be attributed to
Atty. Tomacruz's endeavors. Consequently, FLAMES cannot evade its obligation to
Atty. Tomacruz, who has every right to demand a reasonable sum for his
As earlier stated, the contingent fee of
P11,250,000.00 is clearly disproportionate to the extent of the services
rendered by Atty. Tomacruz, even if we were to take into account the character
of his intervention and the quality of his work. Thus, it is incumbent upon us
to fix a more reasonable sum which, in relation to the prevailing
circumstances, could be deemed as appropriate. In other words, we find here
reason to apply the principle of quantum
"as much as he deserves," is used as a basis for determining the lawyer's
professional fees in the absence of a contract, but recoverable by him from his
client. Recovery of attorney's fees on the basis of quantum meruit is authorized when (1) although there is a contract, the fees stipulated are found unconscionable
or unreasonable by the court; (2) the contract for attorney's fees is void
due to purely formal defects of execution; (3) counsel, for justifiable cause,
was not able to finish the case to its conclusion; and (4) the lawyer and
client disregard the contract for attorney's fees.cralaw
In fixing a reasonable compensation for
services rendered by a lawyer on the basis of quantum meruit, the following factors are considered: (1) the time
spent and extent of services rendered; (2) the novelty and difficulty of the
questions involved; (3) the importance of the subject matter; (4) the skill
demanded; (5) the probability of losing other
employment as a result of the acceptance of the proffered case; (6) the amount
involved in the controversy and the benefits resulting to the client; (7) the
certainty of compensation; (8) the character of employment; and (9) the
professional standing of the lawyer.cralaw
Bearing in mind these factors and the matters
already discussed above, the additional amount of P900,000.00 as attorney's
fees is reasonable under the circumstances. In fixing this amount, we
considered the fact that the contract executed between Atty. Tomacruz and
FLAMES was contingent in nature and therefore, justified the charging of a
higher fee, due to the lawyer's risk of gaining nothing in case of failure.cralawAdditionally, the difficulty of obtaining
reconsideration of the Court's decision and its importance to FLAMES,
underscores the need to compensate Atty. Tomacruz fairly. 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.cralaw
ACCORDINGLY, in view of the foregoing,
FLAMES is ORDERED to pay Atty. Manuel B. Tomacruz the additional amount of NINE
HUNDRED THOUSAND PESOS (P900,000.00) for services rendered in this case.KAPUNAN, J., NO PART.
Very truly yours,
(Sgd.) VIRGINIA ANCHETA-SORIANO
Clerk of Court