Dear Atty. Gab,

Musta Atty! I hope you can shed some light on a situation my siblings and I are facing. Our parents were involved in a land dispute case in Quezon City for many years, probably starting around 15 years ago. They hired a lawyer, Atty. Ricardo Cruz, to represent them. Sadly, our parents passed away in a car accident while the case was on appeal with the Supreme Court. We, the children, were substituted as parties.

Thankfully, the Supreme Court eventually ruled in our favor about two years ago, and the decision became final. We were relieved the long battle was over. During the case, the court awarded P15,000 as attorney’s fees in the judgment, which we assumed was meant for Atty. Cruz.

Just last week, Atty. Cruz contacted us. He’s demanding payment for his legal services, claiming he had a verbal agreement with our late parents for 20% of the current market value of the Quezon City property. This was a complete surprise! We knew he was the lawyer, of course, but we never discussed any percentage fee arrangement with him, and our parents never mentioned such a deal to us. We always thought the P15,000 awarded by the court covered his fees.

We’re confused and worried. Can he still claim fees now, two years after the case became final and executory? Isn’t it too late? And is a verbal agreement for 20% of the property value even valid, especially since our parents are no longer here to confirm it? That percentage seems very high. What are our rights and obligations here? We want to be fair, but this demand feels overwhelming.

Hoping for your guidance.

Sincerely,
Maria Hizon

Dear Maria,

Thank you for reaching out. I understand your confusion and concern regarding Atty. Cruz’s claim for attorney’s fees. It’s unsettling to face unexpected financial demands, especially concerning a matter you thought was concluded and involving deceased loved ones.

Let’s clarify a common point of confusion first. The P15,000 awarded in the court decision is likely what’s termed ‘extraordinary’ attorney’s fees. This amount is awarded to the winning party (your family) as damages, meant to partially cover litigation expenses, and is paid by the losing party. It’s different from the ‘ordinary’ attorney’s fees, which represent the lawyer’s compensation for services rendered, payable by the client (your parents, and now potentially their estate or heirs).

Regarding the timing, a lawyer generally can claim compensation for their services even after the main case judgment has become final and executory, provided the claim is made within the legally prescribed period. The finality of the main case often signifies when the lawyer’s primary service concludes, triggering the ability to fully determine and claim their earned fees.

Understanding a Lawyer’s Right to Compensation After a Case

The core issue here involves distinguishing between the two types of attorney’s fees and understanding how and when a lawyer can claim payment for their professional services. As mentioned, the fee awarded in the judgment is typically extraordinary fees, an indemnity for damages payable to the litigant, not necessarily the lawyer’s compensation. The compensation a lawyer is entitled to from their client for the work performed is a separate matter, governed by their agreement or, in its absence, by legal principles of fairness.

Philippine jurisprudence clearly establishes that a lawyer has options for recovering their professional fees. They don’t necessarily forfeit their right to fees simply because the main case has ended. A lawyer can pursue their claim in two primary ways:

1. In the same case: By filing a motion or petition to determine and enforce their fees as an incident to the main action. This is often done after the judgment benefiting the client has become final.
2. In a separate civil action: By filing a new lawsuit specifically for the collection of attorney’s fees.

Choosing to file a claim within the same action, even after finality, is a recognized procedure. The Supreme Court has noted:

“It is well settled that a claim for attorney’s fees may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action… While a claim for attorney’s fees may be filed before the judgment is rendered, the determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyer’s claim for attorney’s fees may arise has become final. Otherwise, the determination to be made by the courts will be premature.”

This means Atty. Cruz filing his claim two years after the finality of the judgment isn’t automatically invalid based on timing alone. The critical factor here is the prescription period – the time limit set by law for filing such a claim.

Since Atty. Cruz alleges an oral contract, the relevant law is Article 1145 of the Civil Code, which governs actions based on oral contracts or quasi-contracts (obligations arising from lawful, voluntary, and unilateral acts to prevent unjust enrichment).

“ART. 1145. The following actions must be commenced within six years: (1) Upon an oral-contract (2) Upon a quasi-contract.” (Civil Code of the Philippines)

This means Atty. Cruz generally has six years to file his claim, typically counted from when his cause of action accrued – often when his services concluded and payment was demanded or refused. Since the judgment became final two years ago, and he only demanded payment recently, his claim likely falls within this six-year window.

Now, regarding the validity and amount of the claim based on an alleged oral agreement: Oral contracts for attorney’s fees are generally valid, but proving their existence and specific terms (like the 20% share) can be challenging, especially when the original parties (your parents) are deceased. If the existence or terms of the oral contract cannot be sufficiently proven, or if the agreed fee is found to be unreasonable or unconscionable, the principle of quantum meruit applies. This Latin phrase means “as much as he deserves.” It allows the court to determine a reasonable fee based on the circumstances and the value of the services rendered, preventing unjust enrichment for either the client or the lawyer.

The Code of Professional Responsibility provides factors for determining reasonable fees on a quantum meruit basis:

“Rule 20.1 – A lawyer shall be guided by the following factors in determining his fees: a) The time spent and the extent of the services rendered or required; b) The novelty and difficulty of the questions involved; c) The importance of the subject matter; d) The skill demanded… g) The amount involved in the controversy and the benefits resulting to the client from the service; h) The contingency or certainty of compensation… j) The professional standing of the lawyer.” (Code of Professional Responsibility)

Therefore, even if the alleged 20% oral agreement is disputed, Atty. Cruz may still be entitled to a reasonable fee based on quantum meruit, considering the 15 years of service, the complexity of the case going up to the Supreme Court, and the successful outcome preserving the property for your family. The law recognizes the lawyer’s contribution and right to fair compensation:

“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. The duty of the court is not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty to see that a lawyer is paid his just fees.”

While the 20% claim might seem high and its basis is contested, the underlying right of Atty. Cruz to be compensated for his lengthy and successful service exists, likely calculated based on quantum meruit if the oral contract isn’t proven or deemed reasonable.

Practical Advice for Your Situation

• Verify Dates: Confirm the exact date the Supreme Court decision became final and executory. Also, pinpoint when Atty. Cruz first formally demanded the 20% fee from you or your siblings. This helps establish the timeline relative to the six-year prescriptive period.
• Review Records: Check any correspondence, emails, or records left by your parents that might mention the fee arrangement with Atty. Cruz. While you stated none exists, a thorough check is prudent.
• Assess Reasonableness (Quantum Meruit): Even if you dispute the 20% verbal agreement, consider what a fair fee might be based on the factors in Rule 20.1 (time spent – 15 years, complexity, successful outcome, value of property saved, lawyer’s effort). This prepares you for potential negotiation.
• Communicate & Negotiate: Engage in open communication with Atty. Cruz. Acknowledge his service but express your concerns about the lack of documentation for the 20% agreement and its amount. You might be able to negotiate a mutually acceptable fee based on quantum meruit.
• Distinguish Fee Types: Gently clarify your understanding (and perhaps his) that the P15,000 awarded in the judgment was extraordinary fees (damages) payable to your family, not necessarily his service compensation unless previously agreed.
• Document Everything: Keep records of all communications (letters, emails, meeting notes) with Atty. Cruz regarding this fee claim moving forward.
• Seek Legal Counsel: Given the complexities involving an alleged oral contract, deceased parties, and substantial amounts, it is highly advisable to consult with your own independent lawyer. They can provide specific advice tailored to your situation, review any evidence, and represent you in negotiations or potential court proceedings if Atty. Cruz pursues his claim formally.

Navigating issues involving legal fees, especially under these circumstances, can be intricate. The law aims to ensure fairness for both clients and lawyers. While Atty. Cruz has a right to claim reasonable compensation within the legal timeframe, the basis and amount of that compensation are subject to proof and principles of fairness, particularly quantum meruit if the alleged oral contract is uncertain or unconscionable.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.