Documente Academic
Documente Profesional
Documente Cultură
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Ô ere are two concepts of attorney¶s fees. Ô e ordinary refers to t e reasonable
compensation paid to a lawyer by is client for t e legal services e as rendered to t e latter.
Ô e ot er concept is t e amount of damages w ic t e court may award to be paid by t e
losing party to t e prevailing party.1
Ô e rule t at t e practice of law is a profession and not a money-making trade does not
operate to deny a lawyer t e rig t to attorney¶s fees for is professional services. He may
expect t at is client will pay im is just fees in t e same manner t at a client may expect t at
is counsel will exert is best efforts to protect is interests.2
He as t e rig t to ave and recover from is client a fair and reasonable compensation
for is services, except in cases w ere e as agreed to render service gratuitously or as been
appointed counsel de oficio.3
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1. Existence of attorney-client relations ip.
2. Rendition by t e lawyer of services to t e client
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1. -c± it is t e reasonable compensation paid to t e lawyer for t e legal services e
ad rendered in favor of is client. Ô e basis of t is compensation is t e fact of
employment by t e client
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1
Compania Maritima, Inc. vs. Court of Appeals. 318 SCRA 169 (1999).c
2
Albano vs. Coloma. 21 SCRA 411 (1967) c
3
Corpuz vs. Court of Appeals. 98 SCRA 424 (1980); Canon 20, Rule 2.04, Code of Professional Responsibilityc
4
Orosco vs. Heirs of Hernandez. 1 P il.77. (1901.) c
5
Martinez vs. Union Maquinistas. 19 SCRA 167 (1967.)cc
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Since an assignee of all interests pendent elite usually steps into t e s oes of t e
assignor and acquires all of t e latter¶s rig ts and obligations in t e action, t e assignee may be
eld liable for counsel fees from out of t e proceeds of a favorable judgment. Ô at obligation
gives t e assignee t e rig t to intervene in t e matter of fixing t e amount of fees w ic may be
a proper c arge against t e judgment rendered in t e action.
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A lawyer w o represents a union and its members and wit w om e as a retainer for
payment of a fixed percentage of amounts recovered from t e company is entitled to be paid is
fees not only by t e union members but by t e non-union members as well w o derive benefits
from is services. It is but just and fair t at t e lawyer w o represented t e struggling members
of t e union to secure benefits for all employees be paid is just fees by all t ose w o received
.suc benefits.6
Attorney¶s fees in labor cases may not be more t an w at t e law provides and t ey may
not be c ecked off from any amount due t e employees wit out t eir written consent.7
Ô e expiration of t e retainer contract between t e parties during t e pendency of t e
labor case does not extinguis t e respondent¶s rig t to attorney¶s fees.8
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W ere, in a derivative suit, t e professional services of counsel w o instituted t e action
upon request of a stock older are beneficial to t e corporation, t e counsel fees may be
properly c arged against corporate funds. But as any stock older may file a derivative suit on
be alf of t e corporation, any ot er stock older may intervene and oppose t e grant of suc
fees as a c arge against funds of t e corporation.9
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6
Union de Empleados de Ôrenes vs. Kapisanan ng mga Manggagawa sa MRRCO. 110 P il. 308 (1962.) c
7
Gabriel vs. Secretary of Labor. 328 SCRA 247 (2000.) c
8
Uy vs. Gonzales A.C. No. 5280, Marc 2004c
9
Lic auco vs. Court of appeals. 63 SCRA 123. (1975.) c
10
P ilippine National Bank vs. Pardo/ 67 P il 570 (1939.) c
11
Oceña vs. Marquez. 60 SCRA 38. (1974.) c
12
Francisco vs. Matias. 10 SCRA 89. (1964.)cc
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Ô e lawyer w o as been engaged by a client is t e one entitled to ave and recover no
more t an a reasonable compensation for is services. Partners in a law firm s are in t e profits
in accordance wit t eir partners ip agreement even t oug only of t em actually rendered t e
service. If several lawyers separately employed by a client do not ave express agreement wit
t e client as to t e amount of fees eac would respectively receive or if t ey ave rendered
services at one time or anot er in t e action, eac of t em will be entitled to no more t an w at
is services actually performed are reasonably wort .
Ô e rig t of a lawyer to s are in t e professional fees rests on services performed or on
is being, based on an agreement, a partner of anot er or in a law firm. However, a ³lawyer
s all, in cases of referral, wit t e consent of t e client, be entitled to a division of fees in
proportion to t e work performed and responsibility assumed.´13 It is improper for an attorney to
receive compensation for merely recommending anot er lawyer to is client. Suc practice, if
permitted, would tend to germinate t e evils of commercialism and to destroy t e proper
appreciation of professional responsibility.14
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1. Fixed or Absolute Fee - w ic is payable regardless of t e result of t e case
a. A fixed fee payable Per Appearance
b. A fixed fee computed upon t e Number of Hours Spent
c. A fixed fee based on Piecework
d. Combination of any of t e above
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16
Ôrans-Asia S ipping Lines, Inc. vs. Court of Appeals. 254 SCRA 260 (1996.)cc
A contingent fee is not pro ibited by law and is impliedly sanctioned. It is closely
supervised by t e court to safeguard t e client from unjust c arges or abuse on t e part of is
counsel. Its validity depends upon t e reasonableness of t e amount fixed as contingent fee
under t e circumstances of t e case.
A contingent fee contract is generally valid and binding, unless it is obtained by fraud,
imposition or suppression of facts, or t e fee is so clearly excessive as to amount to an
extortion. A contract for contingent fee, w ere sanctioned by law, s ould be reasonable under
all t e circumstances of t e case including t e risk and uncertainty of t e compensation, but
s ould always be subject to t e supervision of a court as to its reasonableness.
In t e instant case, Atty. Roxas and Pastor received an amount w ic was equal to forty-
four percent (44%) of t e just compensation paid or an amount equivalent to P23,980,000.00 of
t e P54,500,000.00. Considering t at t ere was no full blown earing in t e expropriation case,
ending as it did in a Compromise Agreement, t e 44% is, undeniably, unconscionable an
excessive under t e circumstances.17
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1. Services, w ere not performed; as w en t e counsel wit drew before t e case is
finis ed, except w en wit drawal is justified.
2. Justified dismissal of t e attorney. Payment will be based on quantum meruit.
3. Stipulated Attorney's fees are in excess of w at is expressly fixed by law; under t e
Labor Code, Attorney's fees cannot exceed 10%.
4. W en t e lawyer is guilty of fraud or bad fait toward is client in t e matter of is
employment.
5. Counsel's services were wort less because of is negligence.
6. Contract of employment is illegal.
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It means as muc as t e lawyer deserves or suc amount w ic is services merit. It is
essential for t e proper operation of t e principle t at t ere is an acceptance of t e benefits by
one soug t to be c arged for t e services rendered under circumstances as reasonably to notify
im t at t e lawyer performing t e task is expecting to be paid compensation t erefor. Ô e
doctrine of quantum meruit is a device to prevent undue enric ment based on t e equitable
postulate t at it is unjust for a person to retain benefit wit out paying for it.18
Ô e circumstance t at t e services rendered by a lawyer were purely administrative in
c aracter and did not require ig degree of professional skill and experience does not affect
is rig t to fees.19 Professional services to prepare and prosecute just claims for compensation
before an administrative tribunal are as legitimate as services rendered in court in arguing a
cause to convince t e court t at t e claim presented or defense set up against t e claim by t e
ot er party oug t to be allowed or rejected. Parties in suc cases require advocates, and
members of t e legal profession must ave a rig t to accept suc employment and to receive
compensation for t eir services.
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1. Ô ere is no express contract for payment of attorney's fees agreed upon between t e
lawyer and t e client;
2. W en alt oug t ere is a formal contract for attorney's fees, t e fees stipulated are
found unconscionable;
3. W en t e contract for attorney's fees is void due to purely formal defects of execution;
4. W en, for justifiable cause, t e lawyer was not able to finis t e case;
5. W en t e lawyer and t e client disregard t e contract for attorney¶s fees; and
6. W en t e client dismissed is counsel before t e termination of t e case or t e latter
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17
Roxas, et al. vs De Zuzuarregui, Jr., et al. G.R. No. 152072, Januaray 31, 2006. c
18
Ôraders Royal Bank Employees Union-Independent vs. National Labor Relations Court. 269 SCRA 733. (1997).c
19
Sato vs. Rallos. 12 SCRA 84. (1964). c
wit drew t erefrom for valid reasons.
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1. Ôime spent and extent of t e services rendered or required - a lawyer is justified in fixing
ig er fees w en t e case is so complicated and requires more time and effort to finis it
2. Importance of subject matter - t e more important t e subject matter or t e bigger t e
value of t e interest of property in litigation, t e ig er is t e attorney's fees
3. Novelty and difficulty of questions involved - w en t e questions in a case are novel and
difficult, greater effort, deeper study and researc are bound to burn t e lawyer's time
and stamina considering t at t ere are no local precedents to rely upon
4. Skill demanded of a lawyer - t e totality of t e lawyer's experience provides im t e skill
and competence admired in lawyers
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t e case t at e will bear all of t e expenses for t e recovery of t ings or property being claimed
by t e client, and t e latter agrees to pay t e former a portion of t e t ing or property recovered
as compensation. It is void for being against public policy
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ð Ô e money received from t e judgment creditor by t e lawyer of t e judgment debtor
as consideration for t e lawyer¶s desisting from participating in t e execution sale of
t e debtor¶s property is owned by and must be turned over to t e client.
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ð A lawyer may not claim t e attorney¶s fees in t e concept of damages awarded by
t e court in favor of is client, t e latter and not t e former being entitled t ereto
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ð Except w en e and is client ave agreed t at w atever amount t e court may
award as attorney¶s fees would form part of t e lawyer¶s compensation.c
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As a general rule, a lawyer s ould avoid t e filing of any case against a client for t e
enforcement of attorney's fees. Ô e exceptions to t is rule are: (1) Ôo prevent imposition; (2) Ôo
prevent injustice; and (3) Ôo prevent fraud.
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ð He may take judicial action to protect is rig t to fees eit er in t e main action w ere
is services were rendered or in an independent civil suit against is client.
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)-2cA contract of professional services may eit er be oral or in writing. Ô e fee
stipulated may be absolute or contingent; it may be a fixed percentage of t e amount recovered
in t e action. Ô e contract may call for a down payment; it may also provide a fee per
appearance, per piece of work or on an ourly basis. It may be a combination of t ese
arrangements.
A written retainer as a distinct advantage over an oral contract. In case of controversy
as to t e question of fees, a written contract generally controls t e amount t ereof. An in t e
event of a lawyer¶s dismissal by t e client before t e conclusion of t e litigation wit out a
justifiable cause, t e attorney may be entitled to t e full amount of t e fees as stipulated in t e
written agreement. Wit out suc written agreement, e may only recover t e reasonable wort
of is services up to t e date of is dismissal.c
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1. If t e nullification is due to t e ILLEGALIÔY OF IÔS OBJECÔ t e lawyer is precluded
from recovering; and
2. lf t e nullity is due to a FORMAL DEFECÔ or because t e court as found t e AMOUNÔ
to be UNCONSCIONABLE, t e lawyer may recover for any services rendered based on
Ruantum meruit
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Generally: It as been said t at t ere is an irreconcilable conflict of interest between a
client and is lawyer as to t e matter of fees. Ô at conflict s ould not, of course, interfere wit
t e disc arge by t e lawyer of is duty of undivided fidelity to is client¶s cause. Nor s ould it
diminis is zeal in t e prosecution or defense of t e client¶s interests. But w en t at conflict
as reac ed suc a point t at it not only becomes t e lawyer¶s duty to wit draw from t e action
but to assert is rig t to compensation because of t e intolerable attitude assumed by is client,
e may, in order to prevent injustice, fraud or imposition, rig tfully resort to lawsuit to recover is
fees. He may take judicial action to protect is rig t to fees eit er in t e main action w ere is
services were rendered or in an independent civil suit against is client.
A lawyer may enforce is rig t to fees by filing t e necessary petition as an incident of
t e main action in w ic is services were rendered only w en somet ing is due t e client in t e
action from w ic t e fee is to be paid or w en t e client settles or waives is cause in favor of
t e adverse party in fraud of t e lawyer¶s claim for compensation.
Ô e enforcement of t e lawyer¶s rig t to attorney¶s fees as an incident of t e main action
in w ic is services were rendered is preferable t an in an independent action as it avoids
multiplicity of suits.20
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20
Palanca vs. Pecson. 94 P il. 419 (1954.) c
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1. Ô e very action in w ic t e services in question ave been rendered; or
Suc is preferable t an in an independent action as it avoids multiplicity of suit. Also, t e
court is already familiar wit t e lawyer¶s services in suc litigation, and can properly determine
t e circumstances suc as w et er t e client dismisses is counsel wit out just cause, or
waives is action in bad fait to defeat t e rig t of t e lawyer to fees.
3. If t e administrator dies before t e fees are paid, t e lawyer may claim against t e
estate of t e deceased administrator or executor or a petition for t e allowance of is
fees wit t e probate court.
Ô e lawyer may enforce is rig t to fees before t e proceeding is finally terminated and
t e assets are distributed because in suc cases t e probate court loses t e jurisdiction to
adjudicate t e matter of fees.28Ô e exception is w en t e petition for allowance of fees is filed
before suc closure or asset distribution is made wit out prejudice to t e claim of attorney¶s
fees.29
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21
Lizardo, sr. vs Montano 332 SCRA 163 (2000)
22
Quirante vs IAC, 169 SCRA 769 (1989).
23
Aro vs Nañawa, 27 SCRA 1090 (1969)
24
Lic auco vs CA 63 SCRA 123 (1975)
25
Dias vs Corduño, 49 P il 165 (1962.)
26
Bernardo Guerrero & Associates vs Ôan, 14 SCRA 451 (1965.)
27
Aldamis vs CFI of Mindoro, 85 P il 228 (1949)
28
Sato vs Rallos 12 SCRA (1964.)
29
Berceño vs ocampo 74 PHIL 227 (1943) c
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1. Main action is dismissed or not ing is awarded;
2. Court as decided t at it as no jurisdiction over t e action or as already lost it;
3. Person liable for attorney's fees is not a party to t e main action;
4. Court reserved to t e lawyer t e rig t to file a separate civil suit for recovery of attorney's
fees;
5. Services for w ic t e lawyer seeks payment are not connected wit t e subject
litigation;30
6. Judgment debtor as fully paid all of t e judgment proceeds to t e judgment creditor and
t e lawyer as not taken any legal step to ave is fees paid directly to im from t e
judgment proceeds.31
Ô e Burden of proof is upon t e lawyer. Ô e trial court may not aut orize any payment of
counsel fees until t ere s all ave been a earing at w ic all parties concerned were given t e
opportunity to be eard.
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An action for recovery of attorney¶s fees is subject to t e usual defenses applicable to an
ordinary civil suit, suc as:
1) Want of jurisdiction
? Res judicata
3) Prescription of action
4) Nullity of t e contract for professional services
5) Negligence in t e disc arge of t e lawyer¶s duties
6) Lack of attorney-client relations ip
7) Payment or unconscionableness of t e amount claimed.
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30
Albano vs Ramos, 20 SCRA 171 (1967.) c
31
Lizardo, Sr. vs Montano, 332 SCRA 163 (2000.) c
32
Meralco Workers Union vs Gaerlan, 97 SCRA 840 (1970).c
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A final award of attorney¶s fees may be enforced by execution. Ô e award may be
enforced against any property of t e client, including t e proceeds of t e judgment secured for
t e client in t e main action.
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Held: Anent t e contention of FICI t at t e trial court erred in ordering Vispac to pay to FICI
attorney's fees equivalent to only 10% of t e amount due despite t e fact t at Vispac bound
itself to pay to FICI attorney's fees equivalent to 20% of t e total amount due but in no case less
t an P200.00 as per t eir Indemnity Agreement (Ex ibit "1-FICI"), it as been eld t at a
stipulation regarding t e payment of attorney's fees is neit er illegal nor immoral and is
enforceable as t e law between t e parties (Santiago v. Dimayuga, 3 SCRA 919 [1961]), as
long as suc stipulation does not contravene law, good morals, good customs, public order or
public policy (Polytrade Corp. v. Blanco, 30 SCRA 187 [1969]; Social Security Commission v.
Almeda, 168 SCRA 474 [1988]).
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Held: Ô e award to private respondent of attorney's fees, owever, must be disallowed
considering t at t e award of exemplary damages was eliminated by respondent court and t e
text of t e decision of t e trial court, w ic was aimed by t e Court of Appeals, is bereft of any
findings of fact and law to justify suc award. Ô e accepted rule is t at t e reason for t e award
of attorney's fees must be stated in t e text of t e court's decision; ot erwise, if it is stated only
in t e dispositive portion of t e decision, t e same must be disallowed on appeal. Ô e award of
attorney's fees being an exception rat er t an t e general rule, it is necessary for t e court to
make findings of facts and law t at would bring t e case wit in t e exception and justify t e
grant of suc award.
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Held: It is an equally deeply-rooted rule t at contingent fees are not per se pro ibited by law.
Ô ey are sanctioned by Canon 13 of t e Canons of Professional Et ics and Canon 20, Rule
20.01 of t e recently promulgated Code of Professional Responsibility. However, as we ave
eld in t e case of Tanhueco v. De Dumo(172 SCRA 760 [1989]):
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Held:c Petitioners contend t at a contract for a contingent fee violates Article 1491 because it
involves an assignment of a property subject of litigation. Ô at article provides:
Article 1491. Ô e following persons cannot acquire by purc ase even at a public or judicial
auction, eit er in person or t roug t e petition of anot er.
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(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior and ot er o
and employees connected wit t e administration of justice, t e property and rig ts in
litigation or levied upon an execution before t e court wit in w ose jurisdiction or
territory t ey exercise t eir respective functions; this prohibition includes the act of
acRuiring by assignment and shall apply to lawyers, with respect to the property and
rights which may be the object of any litigation in which they may take part by virtue of
their profession (Emphasis supplied).
Ô is contention is wit out merit. Article 1491 pro ibits only t e sale or assignment between t e
lawyer and is client, of property w ic is t e subject of litigation, as t e Court as already
stated: " Ô e pro ibition in said article applies only to a sale or assignment to t e lawyer by is
client of t e property w ic is t e subject of litigation. In ot er words, for t e pro ibition to
operate, t e sale or transfer of t e property must take place during the pendency of t e litigation
involving t e property" (Rosario Vda. de Laig vs. Court of Appeals, et al., L-26882, November
21, 1978).
Likewise, under American Law, t e pro ibition does not apply to "cases w ere after completion
of litigation t e lawyer accepts on account of is fee, an interest t e assets realized by t e
litigation" (Drinker, Henry S., Legal Et ics, p. 100 [1953], citing App. A, 280; N.Y. Ciu 714).
"Ô ere is a clear distraction between suc cases and one in w ic t e lawyer speculates on t e
outcome of t e matter in w ic e is employed" (Drinker, supra, p. 100 citing A.B.A. Op. 279).
A contract for a contingent fee is not covered by Article 1491 because t e transfer or
assignment of t e property in litigation takes effect only after t e finality of a favorable judgment.
In t e instant case, t e attorney's fees of Atty. Fernandez, consisting of one- alf (1/2) of
w atever Maximo Abarquez mig t recover from is s are in t e lots in question, is contingent
upon t e success of t e appeal. Hence, t e payment of t e attorney's fees, t at is, t e transfer
or assignment of one- alf (1/2) of t e property in litigation will take place only if t e appeal
prospers. Ô erefore, t e tranfer actually takes effect after t e finality of a favorable judgment
rendered on appeal and not during t e pendency of t e litigation involving t e property in
question. Consequently, t e contract for a contingent fee is not covered by Article 1491
Contracts of t is nature are permitted because t ey redound to t e benefit of t e poor client and
t e lawyer "especially in cases w ere t e client as meritorious cause of action, but no means
wit w ic to pay for legal services unless e can, wit t e sanction of law, make a contract for
a contingent fee to be paid out of t e proceeds of t e litigation" (Francisco, Legal Et ics, p. 294
[1949], citing Lipscomb vs. Adams 91 S.W. 1046, 1048 [1949]). Oftentimes, contingent fees are
t e only means by w ic t e poor and elpless can redress for injuries sustained and ave t eir
rig ts vindicated
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Held: In is answer before t is Court respondent judge justifies is order for t e return of t e
P200.00 on t e ground t at petitioner is "below average standard of a lawyer." Ô e opinion of a
judge as to t e capacity of a lawyer is not t e basis of t e rig t to a lawyer's fee. It is t e
contract between t e lawyer and client and t e nature of t e services rendered. Petitioner
claims t at e won a civil case for is client, t e deceased fat er of t e guardian and t e wards.
Ô at P200.00 is t e amount of t e fee of petitioner is admitted by t e guardian. We find t at t e
court's order directing petitioner to return t e P200.00, and in effect denying im t e rig t to
collect t e same, is not justified, to say t e least.
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Held: Petitioner comes before us t roug t e instant petition for certiorari raising a sole question
of law, t at is, w et er or not t e RÔC ad jurisdiction to award attorney's fees after affirming
t e dismissal of t e case by t e MÔCC for lack of jurisdiction to try, ear and decide t e case.
Petitioner asseverates t at as t e MÔCC and t e RÔC ad no jurisdiction over t e principal
action for unlawful detainer, t en it ad no jurisdiction over t e compulsory counterclaim of
attorney's fees eit er. Ô e petition is meritorious.
A counterclaim is compulsory w ere: (1) it arises out of, or is necessarily connected wit , t e
transaction or occurrence t at is t e subject matter of t e opposing party's claim; (2) it does not
require t e presence of t ird parties of w om t e court cannot acquire jurisdiction; and, (3) t e
trial court as jurisdiction to entertain t e claim. Ôested by t ese requirements, private
respondent's claim for attorney's fees is indubitably in t e nature of a compulsory counterclaim.
And We ave consistently eld t at a compulsory counterclaim cannot remain pending for
independent adjudication by t e court
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Held: RECÔO can still recover. Object valid (not really for divorce). Except w en e and is
client ave agreed t at w atever amount t e court may award as attorney¶s fees would form
part of t e lawyer¶s compensation.
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Held:
Section 24 of Rule 127, w ic as amended by Republic Act No. 636 provides as follows:
"A client may at anytime dismiss is attorney or substitute anot er in is place, but if t e
contract between client and attorney as been reduced to writing and t e dismissal of t e
attorney was wit out justifiable cause, e s all be entitled to recover from t e client t e full
compensation stipulated in t e contract. For t e payment of suc compensation t e attorney
s all ave a lien upon all judgments, for t e payment of money and executions issued in
pursuance of suc judgment rendered in t e cases w erein is services ad been retained by
t e client." Ô e petitioner, owever, argues t at t is provision cannot be availed of by
respondent Dinglasan because t ere is neit er a written contract for attorney's fees nor a
s owing t at is dismissal was unjustified. Ô is argument is wit out merit, inasmuc as if t ere
was a written contract and t e dismissal was unjustified, Atty. Dinglasan would be entitled to t e
entirety of t e stipulated compensation, even if t e case was not yet finis ed w en e was
dismissed. In situations like t at of respondent Dinglasan t e lawyer may claim compensation
only up to t e date of is dismissal. For t e payment of suc compensation e s all
nevert eless ave a lien "upon all judgments, for t e payment of money and executions issued
in pursuance of suc judgments rendered in t e cases w erein is services ave been retained
by t e client." Section 24 does not state t at t e judgment must be secured by t e attorney
claiming t e lien.
He may take judicial action to protect is rig t to fees eit er in t e main action w ere is
services were rendered or in an independent civil suit against is client.