G.R. No. L-52715




Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-52715 February 28, 1985 BENITO E. DOMINGUEZ, JR. and INTEGRATED CONSTRUCTION SERVICES, INC., petitioners, vs. HON. COURT OF APPEALS and JUAN T. DAVID, respondents. Juan T. David for private respondent. CUEVAS, J.: This is a Petition for Review on certiorari of the decision of the then Court of Appeals, promulgated on June 19, 1975 in CA-G.R. No. 56910-R, affirming with modifications, the decision of the then Court of First Instance of Manila, Branch XII in Civil Case No. 91275 entitled "Juan T. David versus Benito E. Dominguez, Jr., Integrated Construction Services, Inc. and Filipinas Integrated Services Corporation", for collection of attorney's fees. The pertinent facts, not disputed by the parties, are as follows — Sometime in 1966, Integrated Construction Services, Inc. (heretofore referred to as ICSI) entered into a contract with the National Waterworks & Sewerage Authority (NAWASA for short) for the construction of the Bicti-Novaliches aqueduct. NAWASA failed to supply ICSI with the required and necessary quantity of cement and even as ICSI was authorized by NAWASA to purchase local cement, still it could not secure the needed quantity. So, Benito E. Dominguez, Jr., in behalf of ICSI made arrangements with Mr. Antonio Menor, then Chairman and Acting General Manager of NAWASA, for the importation of cement from Japan. Mr. Menor verbally authorized Dominguez, Jr. to make such importation and so the latter opened letters of credit with the Overseas Bank, of which Emerita Ramos, Jr. was the head. The importation came in three shipments. The first arrived on October 5, 1966; the second on November 2, 1966; and the third one, on November 29, 1966. Per the bins of lading, the consignee was NAWASA. Upon arrival of the first shipment, Mr. Menor wrote a letter on October 16, 1966 to the Collector of Customs informing the latter that the shipment of cement in question consisting of 5,000 metric tons "are importations of the office and is intended for use in the construction of the 3RD Bicti-Novaliches, aqueduct project at Norzagaray, Bulacan and Novaliches, Quezon City (Project of NAWASA) and that pursuant to RA 3592, said importations are exempted from payment of taxes, duties, imports, surcharges and port levies." 1 By this same letter, Mr. Menor requested that the cement be released to its (NAWASA's) authorized broker without payment of the aforementioned levies. Subsequently, Mr. Menor also indorsed the bin of lading covering the second shipment of 117,268 bags and signed the bank guaranty covering the third shipment of 164,273 bags. On December 26, 1966, the then Customs Commissioner Juan Ponce Enrile, ordered an investigation of these shipments. The next day, December 27, 1966, because of the sensational publicity on these shipments of cement made in the metropolitan papers, Mr. Menor wrote a letter to the Commissioner of Customs claiming, among others, that "the cement was not imported by NAWASA; neither did the NAWASA authorized the importer to import the same in the name of NAWASA; that if the NAWASA was named the consignee, it was done without the knowledge and consent of NAWASA, therefore the cement is not owned by NAWASA." With the denial made by Mr. Menor of the grant of authority to ICSI to import the questioned cement, seizure proceedings were initiated by the Collector of Customs of the Port of Manila against these cement shipments. The seizure proceedings against the first shipment of 117,268 bags was docketed as S.I. No. 10586; the second shipment of 117,268, as S.I. No. 10719; and the third shipment of 164,173, as S.I. No. 10719-A. These seizure proceedings were consolidated and docketed as Customs Case No. 917. Almost simultaneously, the Bureau of Customs, also filed a criminal complaint, docketed as I.S. No. 67-1697 with the City Fiscal of Manila, for falsification of public and/or commercial document and violation of the Tariff and Customs Code arising from these importations of cement against Benito E. Dominguez, Jr. as president of ICSI and two other employees of ICSI. Faced with the aforesaid litigations, Benito E. Dominguez, Jr. in his capacity as President of ICSI engage the legal services of respondent Atty. Juan T. David. On February 4, 1967, Rita Desiderio, Administrative Officer of the Juan T. David Law Office, upon instructions of Atty. David, addressed a letter to Benito E. Dominguez, Jr., President, Integrated Construction Services, Inc. 2 indicating to him the attorney's fees which he will collect on the cement cases and the criminal case No. 67-1697. The pertinent portion of that letter reads- 1. In the cement cases. a. Retainer fee for the duration of the cases...................................................... P 20,000.00 b. If the release of said cement, under bond, is secured....................................... 50,000.00 c. For each shipment exempted from the penalty of for- feiture................................... 20% of the invoice value thereof 2. In Criminal Case I.S. No. 67-1697 a. Retainer fee for the duration of the case........................................................... P 5,000.00 b. For the successful termination of said case......................................................... 25,000.00 The bill also provides that Atty. David "will not charge any professional fee if said cases are unsuccessful." Benito E. Dominguez, Jr. received the original of this letter on February 7, 1967, but made no reply nor any answer thereto. However, he continued availing of the legal services of Atty. Juan T. David in both the cement and criminal cases herein earlier adverted to. There were two criminal cases involved and for which the services of Atty. Juan T. David were availed of. The first case relates to a charge against Mr. L. Bulante Jose Domingo and several others, for violation of Section 302 of R.A. 1937, as amended and docketed as Criminal Case No. 89203. 3 Atty. Juan T. David assisted these two accused during the trial of the case up to its termination which resulted in their acquittal. 4 The second case was I.S. No. 67-1697. A full-blown hearing was conducted by the fiscal's office and on July 16, 1968, the case was dismissed and Benito E. Dominguez, Jr. and his corespondents were absolved from liability, the City Fiscal concluding that "there is no falsification or violation of the Customs and Tariff Code." Meanwhile, a series of incidents took place in Customs Case No. 917. ICSI through Atty. David, sought the release of the shipments, particularly the cement under S.I. No. 10586, upon a deposit of the estimated amount corresponding to the customs duty, taxes and other charges which may be found due on the cement involved. Atty. David, respresenting ICSI proposed to have the amount demanded deposited with the Bureau of Customs in the form of a cashier's or manager's check, without the same being deposited in the account of the Bureau of Customs pending a resolution on the issue of laibilty to pay the duty and taxes demanded. ICSI particularly sought the release first of only one shipment because of its financial inability to put up the deposit for all the three shipments. With this petition of ICSI through Atty. David, the Collector of Customs in his Order dated April 26, 1967, authorized the release of the subject shipment only upon payments of duties, taxes and other charges amounting to P 248,941.00 and the posting of a sufficient cash or government bonds, or a Bank Guaranty on Irrevocable Domestic Letter of Credit equal to the appraised value of subject shipment to be determined by the Appraiser's Division of the Bureau of Customs. On May 4, 1967, Atty. David as counsel of ICSI addressed a letter to the Collector of Customs 5 reiterating his request for a deposit under the same arrangement as before intimated, giving his reasons as to why only a deposit is sought. In a letter dated May 12, 1967 to Atty. David 6 the Collector of Customs reiterated his order dated April 26, 1967 and threatened to sell the shipment at public auction if no payment of the demanded duties, taxes and other charges and the posting of a bond are made. On May 16, 1967, Atty. David again addressed another letter to the Collector of Customs 7 requesting for a reconsideration. This was denied by the Collector of Customs in his letter to Atty. David dated May 23, 1967 8 giving Benito Dominguez, Jr. two (2) days within which to pay the duties, taxes and other charges and to post the required bond. Hence, on May 29, 1967, ICSI remitted to the Collector of Customs, in cashier's cheek, the sum of P 248,941.00 drawn against the Overseas Bank of Manila. ICSI also posted and filed with the Collector of Customs, Irrevocable Domestic Letter of Credit No. 671477-D dated May 24, 1967, drawn against the Overseas Bank of Manila in the amount of P 387,796.16, which is the equivalent value of the 117,268 bags of cement. In a letter dated June 14, 1967 addressed to the Collector of Customs, 9 Atty. David requested that the same be considered as a letter of protest against the payment. This protest was docketed with the Bureau of Customs as Protest No. 2979. The evidence further shows that when the seizure cases were heard before the Collector of Customs, it was agreed by the parties that they would adopt the evidence presented in the Fiscal's Office in I.S. No. 67-1697 as evidence in Customs Case No. 917. However, before the investigation by the Fiscal's Office was terminated, the Collector of Customs rendered his decision dated February 27, 1968 decreeing the forfeiture of the cement. Atty. David filed a motion for reconsideration 10 which was denied in an Order dated March 18, 1968. On March 20, 1968, Atty. David filed a notice 11 to appeal the collector's decision to the Commissioner of Customs. Atty. David thereafter filed with the Commissioner of Customs a "Motion for Reconsideration" 12 praying that the decision rendered by the Collector of Customs be set aside. Pending the appeal of the decision in Customs Case No. 917, the Collector of Customs scheduled the hearing of Protest No. 2979, but Atty. David requested for suspension of hearing "until after the Commissioner of Customs has decided Customs Case No. 917, because the decision of said case will govern the decision in this case." 13 With the dismissal of I.S. No. 67-1697 by the City Fiscal of Manila on July 16, 1968, Atty. David submitted to the Office of the Commissioner of Customs, copies of the transcript of stenographic notes taken during the hearing at the fiscal's office with the request that accordingly Customs Case No. 917 be dismissed and that his client be accorded the corresponding relief. On December 16, 1970 Benito E. Dominguez, Jr. requested Atty. David to affix his signature to a pleading entitled "Appearance" filed by Atty. Feliciano C. Tumale, 14 as a collaborating counsel. Mr. Dominguez informed Atty. David that Atty. Tumale knows his way around with the Bureau of Customs and that he was to follow-up only the refund of the customs duties, taxes and the charges. Atty. David affixed his signature to the "Appearance" but at the same time informed Mr. Dominguez that a favorable decision was forthcoming. On January 12, 1972, the Commissioner of Customs rendered a decision 15 in both Customs Case No. 917 and Customs Case No. 998, 16 the dispositive portion of which reads — WHEREFORE, in view of all the foregoing premises, the decision appealed from is hereby set aside. The Collector of Customs of Manila is hereby directed to cause the refund to the Contractor, Integrated Construction Services, Inc. the amount of P 248,941.00 it has paid on the 117,268 bags of cement covered by S.I. No. 10586 and the cancellation of the domestic letter of credit it had filed in the sum of P 387,796.16 representing the value of the said shipment. The rest of the shipment in question shall be released only upon payment of customs duties, taxes and other charges due thereon in conformity of this decision. Atty. Tumale received a copy of this decision 17 but did not inform Atty. David about it. Mr. Dominguez admitted that he did not also inform Atty, David of the decision. After the receipt by Atty. Tumale of the decision, he followed-up the execution of the same. The customs duties and fees were refunded to ICSI and the domestic letter of credit in the sum of P387,796.16 representing the value of the shipment of 117,268 bags of cement covered by S.I. No. 10586 (under Protest No. 2979) previously filed by ICSI was cancelled. When Atty. David learned of the decision and of the refund, he called up Dominguez, Jr. for his professional fees. Mr. Dominguez, Jr. promised that the refund of an amount coming from the Bureau of Internal Revenue in the sum of more than P50,000.00 shall be paid to him. Atty. David followed up this promise of Mr. Dominguez with a letter dated March 6, 1972 18 addressed to the latter requesting that his attorney's fees be settled "even with the partial payment thereof by turning over to me the warrant which may be issued by the Bureau of Internal Revenue even if the sum is less than 50% of my fee." On July 11, 1972, the Bureau of Internal Revenue refunded to ICSI the sum of P52,413.00 representing erroneously paid advance sales tax on ICSI's importation of cement (under Protest No. 2979), but Mr. Dominguez, Jr. did not pay Atty. David, prompting the latter to send another letter to Mr. Dominguez 19 demanding, together with his other claim for attorney's fees, 20% of the P52,413.00 refunded by the Bureau of Internal Revenue. Despite the receipt of this letter, Atty. David did not receive any reply from Mr. Dominguez, Jr., neither was he paid his attorney's fees. On October 28, 1972, Atty. Nemesio C. Garcia, Jr., in behalf of Atty. David, wrote a demand letter 20 addressed to Mr. Benito E. Dominguez, Jr. demanding payment of the unpaid account in connection with his professional fees in the amount of P20,000.00 (as balance in I.S. No. 67-1697) and P207,000.00 in the cement cases. On November 14, 1972, ICSI through counsel Atty. Blanco, sent a letter/reply 2l to Atty. Garcia denying Atty. David's entitlement to the fees demanded because Atty. David has already been fully paid his fees in I.S. No. 67-1697 and that he was not entitled to fees in the cement cases "because an the cement shipments were decreed forfeited," and furthermore, the fees for such services were already paid to Atty. Tumale. Hence, on July 7, 1973, Atty. David instituted an action for collection of attorney's fees before the Court of First Instance of Manila, Branch XII, docketed thereat as Civil Case No. 91275, against defendants Benito E. Dominguez, Jr., Integrated Construction Services, Inc. and Filipinas Integrated Services Corporation. The case was subsequently dismissed as against defendant Filipinas Integrated Services, Inc. On November 18, 1974, the trial court rendered its decision, the dispositive portion of which reads — IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court hereby render judgment (a) directing the defendant Benito Dominguez, Jr. to pay to the plaintiff the sum of P 15,000.00 on the first cause of action, with legal interest thereon from October 28, 1972, which is the date of extrajudicial demand of payment, until the sum is fully paid; (b) directing the defendants Benito Dominguez, Jr., and the Integrated Construction Services, Inc. to jointly and severally pay to plaintiff the sums of. (1) P 207,000.00 on the second cause of action also with legal interest commencing from 28 October 1974 until it is fully paid; (2) P 10,000.00 as and for attorney's fees; (3) P 20,000.00 as exemplary damages; and (4) Costs of this suit. Defendants' counterclaims are hereby dismissed for lack of merit. SO ORDERED. Defendants Benito E. Dominguez, Jr. and Integrated Construction Services, Inc. appealed the foregoing decision to the respondent Court of Appeals under CA-G. R. No. 56910-R. Disposing of the aforesaid appeal, respondent Court of Appeals in its Decision promulgated on June 19, 1979 decreed — WHEREFORE, with the foregoing modification of not awarding P 20,000.00 as exemplary damages, the decision appealed from is hereby affirmed in all other respects. Petitioners moved to reconsider the aforesaid decision and in its Resolution dated January 28, 1980, respondent Court of Appeals modified its decision to read — WHEREFORE, the decision is modified by reducing the attorney's fees to the amount of P 157,559.23 on the second cause of action. The decision is reiterated in all other aspects. SO ORDERED Hence, the instant "Petition for Review on Certiorari." In a Resolution dated April 16, 1980, We required respondents to comment on the petition. Respondents filed their Comment on May 16, 1980. In a subsequent Resolution dated June 18, 1980, We gave due course to the petition and required both parties to submit their simultaneous memoranda which they did. The only issue raised in this petition is — whether or not private respondent Atty. Juan T. David is entitled to attorney's fees. Petitioners contend that Atty. David is not entitled to attorney's fees because — (1) their obligation to pay attorney's fees was on a contingent basis — contingent upon the successful outcome of the cases involved, particularly the customs and/or cement cases but which cases were not successfully handled because Atty. David failed to establish the legality of the importation as a tax-free importation of the NAWASA; (2) that with respect to I.S. No. 67-1697 of the City Fiscal's Office of Manila, Atty. David's retainer and attorney's fees in the total sum of P30,000.00 was already fully paid; and (3) that with respect to the retainer fee of P20,000.00 in the cement cases, the same had already been paid to Atty. Feliciano Tumale, an associate of Atty. David. On the other hand, private respondent Atty. David maintains that all the cases he handled for petitioners were successfully terminated because on appeal to the Commissioner of Customs, he obtained a favorable judgment which ordered ultimately the refund of the amount of P248,941.00 previously paid under protest, and the letter of credit in the amount of P387,796.16 was ordered cancelled. Atty. David further contends that with respect to I.S. No. 67-1697, only the amount of P10,000.00 was paid to him under OBM Check No. 259558 and that with respect to the alleged retainer fees paid to Atty. Tumale, the same cannot affect his right to collect his attorney's fees because Atty. Tumale is not his associate. We find private respondent Atty. David's contention meritorious. The basic rule is that when one has rendered services to another and these services were accepted by the latter, in the absence of proof that the services were rendered gratuitously, it is but just that the recipient should make compensation therefor, pursuant to well-known and accepted principle of law that no one should be permitted to enrich himself at the expense of another." 22 In the case at bar, it is not disputed that private respondent had rendered professional services to petitioners. And the evidence on record shows that their contract is governed by the letter dated February 7, 1967 23 sent by Atty. David's office to petitioner Dominguez, Jr. which stipulates for the payment of professional fee on a contingent basis — contingent upon the success of the cases handled. The letter specifically provides that "for each shipment exempted from the penalty of forfeiture — 20% of the invoice value thereof" shall be paid to Atty. David. On the "reasonableness" of this contingent fee, the trial court correctly held — . . . The Court finds and hereby declare the said amounts to be very reasonable considering the nature of the cases, the personalities involved, the difficulty of the cases handled especially the customs or cement cases, the personal sacrifices plaintiff had given to the case, even risking his life against the military when a Philippine Constabulary Colonel and his men had attempted to forcibly take possession of the cement then stored in warehouses for the purpose of selling the same at public auction, on which occasions, Atty. David blocked the attempt with firm determination of keeping it for his clients even over his dead body. This conduct of Atty. David, unquestionably proceeding merely from his capacity as lawyer of defendants without any known personal interest on the goods except his patently over-zealous, sincere and deep-seated loyalty to the cause of his clients (the defendants) certainly deserved a sincere commendation, and defendants should not be the last to acknowledge and appreciate this uncommon loyalty because definitely they were the direct recipients of the fruits of his personal sacrifices done beyond the ordinary call of his duty as lawyer. Then aside from these, the Court has to consider the fact that his fees are on a contingent basis. He must succeed if he expects compensation at all. If not, he shall have invested his time and elephantine efforts gratis et amore. This Court knows of no lawyer of consequence who is willing to do that. Then, the court takes public notice of the fact that Atty. David is reputed to be one of the most respected leading legal luminary of the country, not only of a good number of past generations but of the present one, considering his personal involvement in court battles in many of the most controversial and leading cases of our judicial history-the politburo cases and the Amado Hernandez case, to mention two of them. These circumstances are legitimate considerations in the determination by the court of the reasonable attorney's fees. Thus it has been held that the circumstances to be considered in determining the compensation of an attorney are (1) the amount and character of the services rendered; (2) the labor, time and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed, the amount of money or the value of the property affected by the controversy or involved in the employment; (5) the skill and experience called for in the performance of the services; (6) the professional character and social standing of the attorney, and (7) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent that when it is not. (Martinez vs. Banogan, G.R. L-15698, April 30, 1963; Francisco vs. Matias, G.R. L-16349, Jan. 31, 1964; Bernardino Guerrero & Associates vs. Tan, G.R. L-20824, June 24, 1965; Mambulao Lumber Co. vs. PNB, G.R. L-22973, Jan. 30, 1968; Aro vs. Nanawa, G.R. L-24163, April 28, 1969; and Polytrade Corp. vs. Blanco, L-27033, October 31, 1969). Petitioners do not question the reasonableness of the amount fixed. They, however, contend that Atty. David is not entitled at all to this amount because all the cases he handled with the Bureau of Customs were lost and/or unsuccessful. There is no merit to this contention. The evidence on record indubitably shows that while the Collector of Customs in his decision declared all the shipments in question forfeited, on appeal by Atty. David to the Commissioner of Customs, the said decision was reversed. The Commissioner of Customs held that all shipments involved were exempted from forfeiture and forthwith ordered the cancellation of the letter of credit and the refund of the customs duties and taxes paid under protest. 24 Undoubtedly, were it not for this decision of the Commissioner of Customs, petitioners would have lost the P248,941.00 paid for duties, taxes and other damages and the letter of credit of P387,796.16 for costs of the 117,268 bags of cement. This is due principally, if not solely, as the evidence shows, to the exclusive and untiring efforts and legal assistance of private respondent Atty. David. It is settled that a lawyer is entitled to the fruits of his labor. 25 Likewise, We find no merit to petitioners' claim that private respondent had already been paid for his services in the cement cases because the amount of P20,000.00 had already been given to his assocciate, Atty. Feliciano Tumale. As the trial court and respondent Court of Appeals correctly observed, Atty. Tumale is neither private respondent. The record is replete with evidence showing that Atty. David, from the time he was asked by petitioners to affix his signature to the "Apperance" of Atty. Tumale, had not even on one single occasion seen or met Atty. Tumale. Whatever payment made to Atty. Tumale, has not been shown by the evidence on record to have benefited Atty. David. Finally, with respect to petitioners' claim that Atty. David had already been paid of his services in I.S. No. 16-1697, the evidence on record shows that private respondent's fee for this case is P30,000.00 broken down into (a) P5,000.00 as retainer fee and P25,000.00 for the dismissal of the case. Out of this amount Atty. David had already received his retainer fee of P5,000.00 in cash 26 and the amount of P10,000.00 under OBM Check No. 259558 thereby still leaving a balance of P15,000.00. The other P 15,000.00 paid by petitioners to Atty. David under OBM Cashier's Check No. 259558 dated March 30, 1967 was for Criminal Case No. 89203.27 IN VIEW OF THE FOREGOING CONSIDERATIONS the decision appealed from is hereby AFFIRMED, with costs against petitioners. SO ORDERED. Makasiar, Aquino, Concepcion, Jr. and Escolin, JJ., concur. Abad Santos, J., took no part. Footnotes 1 Exhibit 11 - ICSI. 2 Exhibit "C". 3 Exhibit "A". 4 Exhibits "A-1 " to "A-29"; Exhibit "A-20". 5 Exhibit "B". 6 Exhibit "B-1". 7 Exhibit "B-2". 8 Exhibit "B-3". 9 Exhibit "B-4". 10 Exhibit "B-9". 11 Exhibit "B-9-A". 12 Exhibit "B-9". 13 Exhibit "B-6" 14 Exhibit "B-15". 15 Exhibit " 1 - ICSI". 16 Protest No. 2979. 17 Exhibit "11-ICSI". 18 Exhibit "C-1". 19 Exhibit "C-2". 20 Exhibit "C-3". 21 Exhibit "C-4". 22 Pacific Merchandising Corporation vs. Consolacion Insurance & Surety Co., Inc., 73 SCRA 564; Corpuz vs. Court of Appeals, 98 SCRA 424. 23 Exhibit "C". 24 Exhibit "B-10". 25 Pelmoka vs. Diaz, 118 SCRA 651. 26 Exhibit "C-4". 27 Exhibits "A", "A-1" to "A-30". The Lawphil Project - Arellano Law Foundation