amalgamated laborers.docx

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AMALGAMATED LABORERS’ ASSOCIATION and/or FELISBERTO M. JAVIER for hims!f and as Gnra! "rsidn#$ ATT%. JOSE &R. CARBONELL$ ET.AL.'(#i#ionrs) *s. CIR and ATT%. LEONARDO C. FERNANDE+ 'rs(ondn#) GR No. L,- 01 Mar2h -1$ 3405 FACTS: Amalgamated Laborers’ Association won a case of unfair labor practice against Binalbagan Sugar Central Company, Inc !Biscom" #pon motion of t$e complainants, CI% sent t$e C$ief &'aminer to go to Biscom and compute t$e bac(wages Total net bac(wages amounted to )*+,* -- Appeals were made against t$is decision In t$e interim, Atty Leonardo C Fernande. !$erein respondent", in t$e same case, /led a 01otice of Attorney’s Lien2 o3er t$e amount to be awarded 4e alleged t$erein t$at $e $ad been t$e attorney of record for t$e said case since t$e inception of t$e preliminary $earings of said case up to t$e Supreme Court in Appeal, as c$ief counsel 4e claimed t$at t$e labourers $a3e 3oluntarily agreed to gi3e $im as attorney’s fees on contingent basis - 5 of t$e award 4e furt$er a3erred t$at t$is is already a discounted fee out of t$e plea of t$e union’s president to reduce it from 675 for t$em to also satisfy Atty 8ose #r Carbonell 9eanw$ile, CI% decided t$e appeals still in fa3our of t$e petitioners and ordered Biscom to deposit t$e amount representing - 5 of )*+,* -- wit$ t$e cas$ier of t$e court to be awarded and granted to Atty Fernande. Atty Carbonell and ALA appealed from t$e decision contending t$at " CI% is bereft of ;urisdiction to ad;udicate contractu al disputes o3er attorney’s fees a3erring t$at a dispute arising from contracts for attorney’s fees is not a labor dispute and is not one among t$e cases ruled to be wit$in CI%’s aut$ority and to consider suc$ a dispute to be a mere incident to a case o3er w$ic$ CI% may 3alidly assume ;urisdiction is to disregard t$e special and limited nature of said court’s ;urisdiction< -" t$e award of - 5 as attorney’s fees to Atty Fernande. e'cessi3e, unfair and illegal T$is and a subse=uent motion for reconsideration was denied 4ence, t$is petition ISS#&S: Is CI% bereft of ;urisdiction o3er t$e claim for attorney’s fees> - Is - 5 of t$e award a reasonable attorney’s fee> %#LI1?: 1o Court may be e'pressly granted t$e incidental powers necessary to e@ectuate its ;urisdiction In t$e absence of suc$ e'press grant, and in t$e absence of pro$ibiti3e legislation, it s$all also be impliedly granted In t$e cas at benc$, to direct t$at t$e present dispute be lodged in anot$er court as petitioners ad3ocate would only result in multiplicity of suits, a situation ab$orred by t$e rule Since t$e court of Industrial %elations ob3iously $ad t$e

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AMALGAMATED LABORERS ASSOCIATION and/or FELISBERTO M. JAVIER for himself and as GeneralPresident, ATTY. JOSE UR. CARBONELL, ET.AL.(petitioners) vs. CIR and ATTY. LEONARDO C. FERNANDEZ (respondent) GR No. L-23467 March 27, 1968

FACTS:AmalgamatedLaborers Association won a case of unfair labor practice against Binalbagan SugarCentral 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 theamount 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 togive him as attorneys fees on contingent basis 25% of the award. He further averred that this is alreadya discounted fee out of the plea of the unions president to reduce it from 30% for them to also satisfyAtty. 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 contractual 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 incidentto a case over which CIR may validly assume jurisdiction is to disregard the special and limited nature ofsaid courts jurisdiction; 2) the award of 25% as attorneys fees to Atty. Fernandez is excessive, unfairand 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 claims 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% attorneysfees 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 inthe 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. Retuyafiled 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, Anawas awarded a sum for compensation benefits, medical andhospitalization 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 thejoint motion to dismiss the claimbecause he wanted20% 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 anaffidavit stating that Anahad misappropriated his attorneys fees amounting to threehundred 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 Equipilagrequired Ana to produce a copy of the decision awarding her workmenscompensation. The case of estafa was not tried. Instead, Atty. Diola, lawyer of Ana,offered Gorduiz a sum of five hundred pesos assettlement 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 waslater dismissed when Ana paid Gorduiz a sum of P500. In his testimony, Gorduiz denied that he demanded attorneys fees higherthan 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 attorneysfees. 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 ownmoney 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 hislawyers oath, he had filed a suit against her and had harassed andembarrassed 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 MindoroDecember 29, 1949Moran, 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 AppealsGR 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]

16OCT[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.

x x x

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. T-1929, 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;

x x x

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 Letter-Agreement. 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 P6,987,078.75On 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.