Problems Areas in Legal Ethics

Lawyers Compensation

Introduction
There are two concepts of attorneys fees. The ordinary concept refers
to reasonable compensation paid to the lawyer by his client for the
legal services he has rendered to the latter. The other concept is the
amount of damages which the court may award to be paid by the
losing party to the prevailing party (Compania Maritime Inc. v CA. 318
SCRA 169).
Being a primarily an officer of the court charged with the duty of
assisting the court render impartial justice, what the lawyer may collect
as his fee is always subject to judicial control (Perez v Scotish Union &
National Ins. Co., 76 Phil. 320 (196)
Generally, the right of a lawyer to s reasonable compensation for his
services requires the existence of an Attorney-client relationship and
the rendition by the lawyer of his services to the client (Arce v Phil
National Bank, 62 Phil 570 (1935)

Quantum Meruit means as mush as the lawyer deserves or such

amount which his services merit

A contract for contingent fee is an agreement in writing in the fee,

usually a fixed percentage of what may be recovered in the action is
made to depend upon the success in the effort to enforce or defend a
supposed right (Grey v Insular Lumber co., 97 Phil 836)

Champertous Contract is an agreement where the lawyer stipulates

with his client that in the prosecution of the case, he will bear all the
expenses for the recovery of things or property being claimed by the
client and the latter agrees to pay the former a portion of the
thing/property recovered as compensation.

Reparations Commission vs. Visayan Packing

193 SCRA 540

Reparations Commission

Visayan Packing

Repacom
adopted
Resolution
No. 262
awarding to
The trial
court ordered Vispac
the defendant
to payVispac
to FICI
fees
byattorney's
way
equivalent
to only 10%
of the
Vispac
bound itself to pay to
of a contract
amount
due despiteFICI
the attorney's
fact
fees equivalent
of conditional
to 20%
purchase
anditself
that Vispac
bound
to payof the total amount
to FICI sale
attorney'sdue
feesbut in no case less than
per
their
equivalent to 20% ofP200.00
the total as
Indemnity
Agreement
amount
due
but
in
no
case
less
THE FIELDMENS INSURANCE CO., INC

than P200.00 as per their

Indemnity Agreement FICI is the

bondsman for the

principal
defendant Vispac,
under Surety
Bond No. 4122

Issue
WON the trial court erred in
ordering Vispac to pay to FICI
attorney's fees equivalent to only
10% of the amount due despite the
fact that Vispac bound itself to pay
to FICI attorney's fees equivalent
to 20% of the total amount due but
Ruling
in no case less than P200.00 as
per their Indemnity Agreement YES! It has been held that a stipulation
regarding the payment of attorney's fees is
neither illegal nor immoral and is
enforceable as the law between the parties
(Santiago v. Dimayuga, 3 SCRA 919
[1961]), as long as such 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]).

Francisco vs. Matias

10 SCRA 101

Materials facts. In May, 1952, she filed

in this expediente, thru Atty. R. N.
Agbunag, a petition for the probate of
the will of said Gabina Raquel. The petition
was in due time, opposed by Basilia Salud,
first cousin of Gabina
on the grounds that: (1) the will was not
signed by the deceased; (2) it was not
amount
executed Actual
in accordance
with law;of the
(3) Gabina had been the victim of undue
estate
>and
P167,000.00
influence and fee
fraud;should
(4) thebe
deceased
Lawyers
based on
had no mental capacity to
the
makecontract
a testament. as originally agreed
On July 16,1952,
said Aurea
Matias
and
not on
named as executrix in the will engaged
the services of Atty. Vicente
Francisco, who, with the assistance of Atty.
Agbunag and of Attorneys Alberto J.
Francisco and J. Gonzales
Orense, personally handled the case
before three different judges
successively

Contingent
fee
should
be
Contingent fee = P15,000.00
30% of
market
value
Under
thethe
erroneous
belief
thatof
the amount
of themeruit
estate ison
only
Quantum
the estate
based
P167,000.00
Quantum
meruit

Ruling

r
e
t
Yes. There, is no doubt, he belongs in the front line of the legal
t profession.
a
s
e
In trial work, there are few who match his
m ic
t
v
mental acumen and resourcefulness.
c
r
e
j
e
s
b
Issue
u hein the light of our several
l
Taking into account all the variables ofsproceeding
e
WON
Atty.Francisco
t
e
smodify
f isfees,
h
pronouncements on matter of contingent
lawyer's
we feel that
n
t
o
entitledoto
an
u
f
t
the appealed resolution andoawarding
12.5%
of
the
market
value
to the
n
c
d
increase
in
the
e
e xt
f
e
herein appellee wouldc
accomplish
r
o
e
n
lawyers fee
e
g
d
a
t
n
d en di
r anjustice
substantial
o
r an
p
t
Im ture
s
l
a
a
n
N
o
i
Atty. Francisco renderedsmuch greater services
s he handled tedious trial work which lasted for
this estate. For onefthing
e
about four yearsro
P and for another, the
fee was contingent.

Aldamiz vs. Judge CFI Mindoro

85 Phil 228

Gavino

g
a
i
t
n
a
S

ADMINISTRATOR

Commercial partnership
"AldamizJyosRementeria
e
Atty. Luna

Gavino through Submitted his accounts for the years

1944, 1945 and 1946 and also a project
Atty. Luna

No

of partition with a view to closing the

proceedings

Attorney Luna, to comply with the wishes of

the court, without
previously preparing and 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 might fix
the amount of his compensation and the
administrator may make payment thereof.

ti

nb

ad

fai

th

Fix P2
ed 8, 0
00

P5,0

00 state
e
t
the

he
to
t
t
o
to
N
t
bu
N
,
IO
oa y Gavino
T
c
U
as miz
C
e
E
g da
o
X
c
l
E
o
Atty.
Luna
z
A
i
g
OF ntia dam hip "
R Sa Al
s
r
E
e
f
D o
y rtn
R
a
i
O tate ter pa
l
es men rciaWON
the fixing of the
"
e
e
a
i
R mm ter
co men amount of attorney's fees
by the court was proper
Re

Ruling

The
The correct
correct procedure
procedure for
for the
the collection
collection of
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

Sesbreno vs. CA
G.R. No. 161390

whatever

Thirty (30%) percent of

back
salaries, damages, etc. that we may recover in the
mandamus and other cases that we are filing or
have filed against the Province of Cebu, the
Provincial Governor, etc.

Back wages
ATTYCSesbreno
A M I N E R O

C A M I N E R O S

e
s
i
m
o
r
p
m
o

t
n
e
m
e
e
r
ag

The court then ordered the issuance of a

45%

partial writ of execution directing the payment of only

of the
amount due them based on the computation of the provincial
engineering office as audited by the authority concerned.

T
N
U
O
M
A
L
L
U
F
E
H
T
D
I
PA

The court did not release the remaining 55%, thus holding in
abeyance the payment of the lawyers fees
pending the determination of the final amount of such fees.

PROVINCE OF CEBU
Pro
go vinci
v
a
tre erno l
a
r
an sure ,
de
r
ng , aud
ine
i
er tor,

C A
M I N E
R O S

Damages (Thr
u Breach of Co
ntract) and Atto
rneys Fees

National
rate and n
ot
Provincia
l rates

no
e
r
b
s
Se
.
ATTY ISesbreno
y
t
t
to Was Atty S
sA
o
t
d
es
e
entitl es for prejudiced b breno
y t he
g
w
a
t
r
o
c
n
m
g
a
da
ntr computation
o
c
f
in
o
th
enceamin
h
c
c
i
v
a
e r os
mrooney
bre
P
e
h
t t th t al. claims by us
s
n
i
a
ing
ee provinci
ag
u
b
e
a
of C the nationa l and not
l wage r

at e

The petitioner had withdrawn his complaint against the

camineros with whom he had a contract for legal services.
The withdrawal was premised on a settlement, which
indicates that his former clients already paid
their obligations. Having been paid by his clients in
accordance
with the
agreement,
his claim
against the
No
fixed amount
was
specifically
provided
respondents,
therefore,
has
no leg
to stand on.
for
in their contract
nor
was
a specified
rate

agreed upon on how the money claims were to

be computed. The use of the word whatever
shows that the basis for the computation would
be the amount that the court would award in
favor of the camineros

Important Doctrines

Roxas vs. De Zuzuarregui G.R. No. 15207

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
Perez vs. Scottish Union 76 Phil. 320
"The income of a lawyer is not a safe criterion of his professional ability. Many very good lawyers earn but
small incomes while lawyers of inferior ability may prosper financially. Neither is the length of time a
lawyer has practiced a reliable measure of his ability; his competency must be judged by the character of
his work."
Bautista vs. Gonzales A.M. No. 1625
An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client's rights
is champertous . 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. The execution of these contracts violates the fiduciary relationship between
the lawyer and his client, for which the former must incur administrative sanctions.

Fernandez vs. Hon. Bello 107 Phil 1140

The opinion of a judge as to the capacity of a lawyer is not the basis of the right to a lawyer's fee. It is the
contract between the lawyer and client and the nature of the services rendered.

Retuya vs. Goduiz 96 SCRA 529

Controversies with clients concerning compensation are to be avoided by the lawyer so far as shall be
compatible with his self- respect and with his right to receive reasonable recompense for his services;
and lawsuits with clients should be resorted to only to prevent injustice, imposition or fraud."
Intestate Estate of A. Dalisay vs. Marasigan 257 SCRA 511
Claim for attorney's fees is indubitably in the nature of a compulsory counterclaim. And We have
consistently held that a compulsory counterclaim cannot remain pending for independent adjudication by
the court