Canon 20

Fajardo v. Bugaring, AC No. 5114, October 7, 2004

Facts: Complainant alleged that she had known respondent since 1989 when she, together with her co-
heirs, were trying to sell properties which they inherited from their predecessors represented by one
Atty. Ricardo Dantes, and with their tenants, over Lots 2434 and 2454 located in Sta. Rosa, Laguna,
which they were trying to sell to Golden Bay Realty and Development Corporation. Atty. Bugaring was
recommended by Atty. Dantes to complainant to assist her and her co-heirs with the legal aspects of the
disputes they were encountering. They were close associates. Atty. Bugaring started appearing at every
hearing of the case. Complainant paid Atty. Bugaring every hearing an appearance fee of P1,000.00,
whether hearings were postponed or not, treated him to lunch and used to send him off with
vegetables, candies and other goodies.

Complainant had always asked Atty. Bugaring how much charge for his professional fees, but Atty.
Bugaring would just answer: Huwag na ninyo alalahanin iyon. Para ko na kayong nanay o lola. All along,
complainant was swayed to believe that Atty. Bugaring was nice and courteous. The Mother Case soon
branched out to more and more cases, about eleven (11) cases in all whenever the complainants would
ask about his professional fees, the same answer is the usual reply. Until there came a point that
Fajardo tried to fleece the complainant of his allegedly accumulated attorneys fees amounting to P
3,532,170.

Issue: Did Atty. Bugaring violate Canon 20 of the CPR with regards to charging his professional fees?

Ruling: Yes. The Court ruled that as regards his professional fees, the proper time to deal with this
delicate issue is upon the commencement of the lawyer-client relationship. In this case, respondent
should have determined and entered into an agreement regarding his fees at the latest, when he was
first retained by complainant as her counsel in the partition case. Such prudence would have spared the
Court this controversy over a lawyers compensation, a suit that should be avoided except to prevent
imposition, injustice or fraud.

A lawyer is entitled to the protection of the courts against any attempt on the part of a client to escape
payment of legitimate attorneys fees. However, such protection must not be sought at the expense of
truth. Complete candor or honesty is expected from lawyers, particularly when they appear and plead
before the courts for their own causes.

Agustin v. CA, GR No. 84751, June 6, 1990

Facts: This petition for review on certiorari impugns the decision of the CA with the following portion:
WHEREFORE, the present appeal is accordingly resolved deleting the adjudicated award of P20,000.00 as
exemplary damages.

Plaintiff-appellee owned Lot 14, Block 1 at Tandang Sora, Quezon City. He agreed to sell said parcel of
land to defendants-appellants on a package deal together with a residential house to be constructed
thereon for the sum of P202,980.00. A deed of sale was executed and the Transfer Certificate of Title
was made. However, during the course of their agreement, the defendant allegedly breached their
contract, unable to render the due payment to PAG-IBIG as stipulated in their agreement.
Plaintiff-appellee filed for reconveyance and damage. In answer, defendants-appellants maintained inter
alia that approval of housing loan had been assured upon completion of the house with proof of its
delivery and acceptance, but that acceptance could not be reasonably given by them in that certain
specifications for the housing unit had not been complied with.

After trial on the merits, the lower court rendered judgment in favor of private respondent, the
dispositive part whereof reads:

judgment is hereby rendered ordering defendants, jointly and severally:

a) to reconvey to plaintiff the parcel of land covered by Transfer Certificate of Title No. 284735 **
of the Register of Deeds, Quezon City;
b) to pay plaintiff the sum of P20,000.00 as exemplary damages;
c) to pay plaintiff the sum of P5,000.00 as attorney's fees, plus costs of the suit.

which judgment, as earlier stated, was affirmed by respondent court but with the deletion of the award
of exemplary damages. Hence, this petition raising the following issue.

Issue: Whether private respondent is not entitled to attorney's fees of P5,000.00 under the facts and
circumstances of the case

Ruling: The award to private respondent of attorneys fees, however, must be disallowed considering
that the award of exemplary damages was eliminated by respondent court and the text of the decision
of the trial court, which was affirmed by the Court of Appeals, is bereft of any findings of fact and law to
justify such award. The accepted rule is that the reason for the award of attorneys fees must be stated
in the text of the courts decision; otherwise, if it is stated only in the dispositive portion of the decision,
the same must be disallowed on appeal. The award of attorneys fees being an exception rather than
the general rule, it is necessary for the court to make findings of facts and law that would bring the case
within the exception and justify the grant of such award. WHEREFORE, except for the award of
attorney's fees which is hereby deleted, the decision of respondent Court of Appeals is hereby
AFFIRMED.

Mambulao Lumber Co. v. PNB, GR No. L-22973, January 30, 1968

Facts: Petitioner Mambulao Lumber applied for an industrial loan with herein respondent PNB and was
approved with its real estate, machinery and equipments as collateral. PNB released the approved loan
but petitioner failed to pay and was later discovered to have already stopped in its operation. PNB then
moved for the foreclosure and sale of the mortgaged properties. The properties were sold and
petitioner sent a bank draft to PNB to settle the balance of the obligation. PNB however alleges that a
remaining balance stands and a foreclosure sale would still be held unless petitioner remits said
amount. The foreclosure sale proceeded and petitioners properties were taken out of its compound.
Petitioner filed actions before the court and claims moral damages and attorneys fees.

Issue: How are attorneys fees awarded?

Ruling: This Court has invariably fixed counsel fees on a quantum meruit basis whenever the fees
stipulated appear excessive, unconscionable, or unreasonable, because a lawyer is primarily a court
officer charged with the duty of assisting the court in administering impartial justice between the
parties. The fees should be subject to judicial control. Sound public policy demands that courts disregard
stipulations for counsel fees, whenever they appear to be a source of speculative profit at the expense
of the debtor or mortgagor.

Uy v. Gonzales, AC No. 5280, March 30, 2004

Facts: Uy engaged the services of Atty. Gonzales to prepare and file a petition for the issuance of a new
certificate of title. After confiding with respondent the circumstances surrounding the lost title and
discussing the fees and costs, respondent prepared, finalized and submitted to him a petition to be filed
before the RTC.

When the petition was about to be filed, respondent went to complainants office demanding a certain
amount other than what was previously agreed upon. However, respondent claims that he gave
complainant a handwritten letter telling complainant that he is withdrawing the petition he prepared
and that complainant should get another lawyer to file the petition thereby terminating the lawyer-
client relationship between him and

Issue: Is Atty. Gonzales entitled to attorneys fees?

Ruling: Yes. The Court ruled that the expiration of the retainer contract between the parties during the
pendency of the labor case does not extinguish the respondents right to attorneys fees. Attorneys fees
may be still made on the basis of quantum meruit.

Cristobal v. Ocson, GR No. 19205, February 13, 1923

Facts: The plaintiff in this case, Cristobal, sues to recover an attorney's fee, claimed to be due from the
defendant, Ocson, by virtue of a written contract. Prior to the date of the making of the contract upon
which this action is founded, the defendant's father, a resident of the City of Manila, died intestate.
Having need of a lawyer to render advice, the defendant approached the plaintiff, with a view to
obtaining the professional services of the letter; and a written contract of employment was drawn up
between the two in due.

By this contract the plaintiff agreed to take upon himself as attorney the duty of conducting the
intestate proceedings in the estate of the father of defendant. The contract states that "With the
understanding, nevertheless, that if by the desire and will of the first party [Ocson] the second party
[Cristobal] should be relieved of his services as attorney before the division, the fee shall be as
stipulated and agreed in the present contract and thenceforth shall be deemed due and payable."

However, the defendant repudiated this agreement within two or three days after it was made and
employed another attorney to conduct the proceedings in the intestacy to which reference has been
made. Upon this the plaintiff instituted the present action to compel the defendant to pay to the
plaintiff a sum equivalent to ten per cent (10%) of the amount which would pertain to the defendant as
his share of his father's estate.
Issue: Whether plaintiff Atty. Cristonal can compel the defendant for compensation

Ruling: Yes. Where an attorney employed for a particular case is dismissed before action is instituted, he
is entitled to compensation on the basis of quantum meruit for such service as has been already
performed by him; and a stipulation in the written contract between him and his client to the effect that
if he is dismissed before the service is complete the stipulated fee shall become at once due and payable
in full, is invalid in so far as it would secure to the attorney anything more than reasonable
compensation for the services actually rendered. Upon hearing the cause, the trial judge, awarded to
the plaintiff the sum of P6,500, with lawful interest.