HEIRS OF ELEUTERIA ABANGAN, NAMELY: LOURDES ABELLANOSA, SABLE FILOMENA ABELLANOSA-GONZALES, ILDEFONSA ABELLANOSA, CONCORDIA C. CUESTA, ANDRES C. CUESTA, REPRESENTED BY THEIR ATT…

Heirs of Abangan versus Burgos

The Case

This is a case about a lawyer's fee. The Heirs of Anastasia Abangan, through their representative Andres Cuesta, appeal from an order of the Regional Trial Court of Cebu City directing them to pay their former counsel, Atty. Jose Burgos, the sum of 35,000 pesos as attorney's fees. The heirs insist that their lawyer already received 300,000 pesos, more than enough to cover his services, and that he should return the excess. The case matters because it gathers in one place the rules a Bar candidate must know on the fixing of attorney's fees: the statutory measure of reasonable compensation, the ten factors courts weigh, the doctrine of quantum meruit, and the evidentiary barriers a client faces when he tries to prove payment by a mere photocopy of a receipt.

Procedural History

Atty. Burgos filed before the Regional Trial Court, Branch 5, Cebu City, a Motion to Withdraw as Counsel with a prayer that his fees be fixed on the basis of quantum meruit. The trial court granted the motion in an Order dated May 14, 2009, fixing his attorney's fee at 35,000 pesos. The heirs moved for reconsideration, asking that Atty. Burgos be ordered to return 265,000 pesos, representing the 300,000 pesos less the 35,000 pesos awarded. The trial court denied the motion in a Resolution dated February 7, 2011. The heirs then filed a Notice of Appeal, and the appeal was deemed submitted for decision. The case reached the Supreme Court by ordinary appeal from the trial court's ruling, and the Court denied the appeal, affirming the orders below.

Facts

The Heirs of Anastasia Abangan engaged Atty. Burgos to handle a petition for the issuance of a decree of registration of title over a parcel of land, Lot No. 5839, situated in Pardo, Cebu City. Atty. Burgos prepared the pleadings and facilitated the filing of the petition before the trial court. The sum of 300,000 pesos was endorsed to him to serve as a revolving fund during the pendency of the case. The petition was granted, and an Original Certificate of Title was issued over the land.

Later, a Deed of Recognition of Ownership, Renunciation and Waiver of Rights was executed by Cuesta in favor of Atty. Burgos over a portion of the property, in consideration of past legal services and some undetermined amount of financial assistance. In March 2009, Atty. Burgos moved to withdraw as counsel, manifesting that he was retiring from practice because of his old age and deteriorating health, and that he had lost contact with the petitioners' representative. He prayed that the court fix his attorney's fees on the basis of quantum meruit.

The trial court granted the motion and fixed the fee at 35,000 pesos, taking into account his legal standing as a retired judge and the manner in which the petition was presented. The heirs then claimed that Atty. Burgos had already received 300,000 pesos, and they relied on an Acknowledgment Receipt which, however, was only a photocopy of a photocopy; the original was never produced. Atty. Burgos denied signing the receipt and pointed to spelling errors, the use of the local dialect, and other features inconsistent with his practice. The heirs also submitted a Joint Affidavit of two sales agents, but it was executed only in March 2013, while the appeal was already pending, and it never stated the purpose of the payment.

Issues

• Whether or not the trial court erred in ordering the petitioners to pay 35,000 pesos as attorney's fees despite the claim that Atty. Burgos had already received 300,000 pesos.
• Whether or not the photocopied Acknowledgment Receipt and the Joint Affidavit could prove that the 300,000 pesos was paid as, or included, the attorney's fees.
• Whether or not the award of attorney's fees on the basis of quantum meruit was proper in the absence of an express agreement on compensation.

Applicable Provisions

Section 24, Rule 138 of the Rules of Court provides:

Compensation of attorney's fees; agreement as to fees. - An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject - matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.

This is the measure the Court applies: reasonable compensation, judged by the importance of the subject matter, the extent of services, and the professional standing of the lawyer, and in default of a written contract, fixed by the court itself.

Section 9, Rule 130 of the Rules of Court provides:

Evidence of written agreements. — When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

This supports the Court's reading of the receipt according to its plain words, which spoke only of a downpayment on a portion of the lot and never of professional fees.

Ruling

On the first issue, the Court held that the appeal had no merit. Atty. Burgos' employment was never denied, and it was his performance as counsel that helped the heirs obtain a favorable decision. He is therefore entitled to his fees, and since there was no showing of any agreement on the amount, the fee must be based on quantum meruit, as the trial court did. The Court described quantum meruit as literally meaning as much as he deserves, a device that prevents an unscrupulous client from running away with the fruits of counsel's labor without paying, while also avoiding unjust enrichment on the part of the lawyer.

On the second issue, the Court held that the photocopied receipt was inadmissible under the best evidence rule, which requires the highest available degree of proof, especially where the document's existence is denied. Even if admitted, the receipt would not help the heirs, because it showed only that Cuesta received 300,000 pesos as downpayment for a portion of the lot and entrusted it to Atty. Burgos; nothing indicated it was in satisfaction of his professional fee. The Court applied the principle that words are construed in their ordinary and usual meaning. As the trial court observed, whether or not Atty. Burgos received the 300,000 pesos is beside the point, since it was never shown that the amount was for his professional services. The Joint Affidavit was given no evidentiary weight: it was not formally submitted before the trial court, it was executed only while the appeal was pending, and it never stated the purpose of the payment.

On the third issue, the Court upheld the award of 35,000 pesos, noting the trial court's observation of the counsel's legal standing and the manner in which the petition was presented. Quoting its own earlier observation, the Court stressed that a lawyer is as much entitled to judicial protection against injustice, imposition or fraud on the part of his client as the client against abuse on the part of his counsel, and that it would be ironic if, after putting forth the best in him to secure justice for his client, he himself would not get his due.

Doctrine

Attorney's fees are the reasonable compensation paid by the client for legal services, and the basis is the fact of employment and the agreement with the client. Under Section 24, Rule 138, the lawyer may recover no more than a reasonable compensation, measured by the importance of the subject matter, the extent of the services rendered, and his professional standing; a written contract controls unless unconscionable or unreasonable. In the absence of an express agreement, the fee is fixed on the basis of quantum meruit, as much as he deserves, which prevents both the client's unjust escape from payment and the lawyer's unjust enrichment. A client who claims payment must prove it by competent evidence; a photocopy of a photocopy is secondary evidence and is inadmissible under the best evidence rule, particularly when the document's existence is denied. Words in a receipt are given their ordinary and usual meaning, and an affidavit not formally offered and silent on the purpose of payment carries no evidentiary weight.

Disposition

The Supreme Court denied the appeal and affirmed the Order of May 14, 2009 and the Resolution of February 7, 2011 of the Regional Trial Court, Branch 5, Cebu City, so that the heirs must pay Atty. Burgos 35,000 pesos as attorney's fees.

Remember This

Memorize the line that quantum meruit means as much as he deserves, and that it is the measure of a lawyer's fee in the absence of an express agreement. Examiners use this case to test the ten factors in fixing fees under Section 24, Rule 138, and the best evidence rule against a client who relies on a photocopy to prove that his lawyer was already paid.