Borcena v. Intermediate Appellate Court

JR., J.:

The petitioners question the amount which the respondent Court of Appeals and the trial court ordered to be paid to their former lawyer, as his compensation. On July 6, 1981, the petitioners engaged the legal services of respondent Gil P. de Guzman under the following terms and conditions: "Dear Atty. de Guzman: "For purposes of handling our case against Nam Kwang, Socea Bonna, Metropolitan Waterworks and Sewerage System and other persons who are parties to the total or partial destruction of some of our road and residential lots at the Memorial Park Subdivision, Bigti, Norzagaray, Bulacan, we hereby retain and employ the legal services of your Law Office towards its prosecution. For your services, we hereby offer you the following schedule: "a) 20% of our total claim, for and as attorney's fees, "b.) 5% of our total claim, for and as representation and miscellaneous expenses; TOTAL: 25% which shall be payable to you and may be collected from us anytime after its complete payment by the said defendants, either solidarily or collectively.

It is hereby understood that apart from this, whatever judgment attorney's fees may be awarded by the court against said defendants, the same shall accrue to you which shall not form part of our contingent fee. We hope that you will handle this case for us. Very truly yours, MODESTA BORCENA, ANTONIO GIMENO, JR.

ESTELA GIMENO, ROLANDO GIMENO, EDGARDO GIMENO, AND ANELIA GIMENO CONFORME: By: GIL DE GUZMAN ROLANDO GIMENO On this same date, respondent de Guzman filed a complaint for damages against the Metropolitan Waterworks and Sewerage System, (hereinafter caged MWSS) Nam Kwang, Socea Bonna and Chun Bae Kim, which was docketed as Civil Case No. SM-1208. The pertinent allegations of the complaint are as follows: x x x x x x x x x 11. That sometime in February, 1980, or immediately preceding or subsequent thereto defendants, without any notice and against the will and consent of herein plaintfffs, entered a portion of said property and bulldozed the fully developed lots, and committed waste, destruction and depredation thereon, causing all monuments of title, drainage system subdivision lots, ornamental trees resulting to total wreck to 23 fully developed lots and flood of about 16 lots causing them wanton and unseconded (sic) damages founded in the x x x x x x x x x 13.

That defendants, despite previous repeated demands from plaintiffs to indemnify them for damages and losses they have caused the plaintiffs, failed and refused and still continue to fail and refuse to pay actual and compensatory damages in the amount of P670,000.00; x x x x x x x x x 14. That due to the unlawful acts of the defendants violating the rights, plaintiffs, the latter suffered and still continue to suffer sleepless nights, loss of business standing, serious anxieties and besmirched reputation assessable as moral damages in the amount of P30,000.00; 15. That to serve as an example to other would-be defendants similarly situated with defendants herein plaintiffs are entitled against the defendants corrective and exemplary damages in the amount of P10,000.00; 16.

The plaintiffs in order to protect their rights and interest so unduly abused by herein defendants are constrained to litigate and to retain the professional services of counsel in the amount of 20% representing the total claim of plaintiffs against the defendants, for and as reasonable attorney's fees; The complaint was later amended by dropping Chun Bae Kim as defendant. Defendants Nam Kwang and Socea Bonna were subsequently declared in default. On June 18, 1982, Atty.

de Guzman filed a motion for preliminary attachment praying that an order be issued attaching properties of the defendants amounting to P710,000.00 plus 20% thereof representing attorney's fees, or a total of P852,000.00. The motion was granted upon plaintiffs' posting a bond of P852,000.00 issued by a bonding company acceptable to the court. The MWSS was directed to hold in trust the P852,000.00 payable to Nam Kwang prompting the plaintiffs to file a motion for them to take custody of the P852,000.00.

The motion was denied in the order dated October 20, 1982. On December 7, 1982, the court directed the MWSS to turn over the P852,000.00 to the deputy sheriff and for the latter to deposit the same with the Sta. Maria Municipal Treasury.

The court also ordered that withdrawals must be upon its orders. This order was amended on December 15, 1982 when MWSS was directed to prepare and issue the check in the name of Rolando Gimeno for the amount of P852,000.00, and to release said check to him upon proper Identification. At the same time, the deputy sheriff was directed to receive the check from Rolando Gimeno and deposit the same with the municipal treasurer of Sta.

Maria, Bulacan. In compliance with the court orders, MWSS issued and released-(l) PNB Check No. 070925 in the amount of P 746,111.71 and (2) PNB Check No. 070928 in the amount of P105,888.29, both dated December 20, 1982 payable to Rolando Gimeno for deposit with the Municipal Treasurer of Sta. Maria, Bulacan.

On January 11, 1983, De Guzman filed a manifestation questioning the restriction on the checks that the same be deposited only with the Municipal Treasurer of Sta. Maria, Bulacan as uncalled for and contrary to the court's order of December 7, 1982 as modified by the December 15, 1982 order. On March 17, 1983, Rolando Gimeno on behalf of the other plaintiffs (petitioners herein) and in his own behalf sent a letter to Atty. de Guzman terminating his services as their counsel.

The relevant portions of the letter read as follows: x x x x x x x x x Sir: "We regret to inform you that your services as our Counsel in all our cases and legal problems are terminated effective immediately. "The decision to terminate your services was engendered by your failure and/or refusal to return to Mr. Rolando B. Gimeno the PNB Checks for deposit with the Municipal Treasurer of Sta. Maria, Bulacan, although the same are now almost three (3) months old and may become stale.

Furthermore, transfer of said deposit to a bank may be asked from the Court so that said money can earn interests. Undersigned have lost interest earnings on said money for three (2) months now. "Kindly return to Mr. Rolando B. Gimeno all our case records involving all our legal problems still in your possession; and bin us for your services rendered thus far, and we assure your goodself you will be amply compensated.

x x x x x x x x x On March 24, 1983, Atty. Perpetuo L. B. Alonzo entered his appearance as new counsel for the petitioners. On March 25, 1983, Atty. de Guzman filed an opposition to Gimeno's ex-parte motion to transfer deposit of garnished amount. He claimed that he never received the PNB checks, that Gimeno's affidavit of loss admits having received the checks from MWSS, and that Rolando Gimeno lost them.

Atty. de Guzman also filed his comment stating that he has no objection to the substitution of counsel provided that the agreed honorarium is complied with, and subject to the attomey's lien. On April 16, 1983, Atty. de Guzman filed an attorney's lien on the garnished amount of P852,000.00 pursuant to Section 26 of Rule 138. A motion dated April 18, 1983, prayed for the issuance of an order: "1.

Ordering the deposit of PNB Checks Nos. 070925 and 070928 both dated December 20, 1982 with PNB Branch in Malolos, Bulacan in the name of plaintiff Rolando Gimeno and movant Atty. Gil de Guzman under the following schedule, to wit: (a) Rolando Gimeno, as plaintiff and attorney-in-fact.................................... P532,500.00 (b) Atty. Gilde Guzman, for his attorney's fees........................................ 319,500.00 Total...............................................