E.
The compromise agreement could not
validate the void oral contingent fee
agreement; neither did it supersede the
written contingent fee agreement
The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case No. 215
(ejectment case) was intended to ratify and confirm Atty. Lacaya’s acquisition and possession of the
disputed one-half portion which were made in violation of Article 1491 (5) of the Civil Code. As earlier
discussed, such acquisition is void; the compromise agreement, which had for its object a void
transaction, should be void.
A contract whose cause, object or purpose is contrary to law, morals, good customs, public order or
public policy is in existent and void from the beginning. 43 It can never be ratified44 nor the action or
defense for the declaration of the in existence of the contract prescribe; 45 and any contract directly
resulting from such illegal contract is likewise void and in existent. 46
Consequently, the compromise agreement did not supersede the written contingent fee agreement
providing for attorney’s fee of ₱2,000.00; neither did it preclude the petitioners from questioning its
validity even though Vicente might have knowingly and voluntarily acquiesced thereto and although the
MTC approved it in its June 10, 1982 decision in the ejectment case. The MTC could not have acquired
jurisdiction over the subject matter of the void compromise agreement; its judgment in the ejectment
case could not have attained finality and can thus be attacked at any time. Moreover, an ejectment case
concerns itself only with the issue of possession de facto; it will not preclude the filing of a separate
action for recovery of possession founded on ownership. Hence, contrary to the CA’s position, the
petitioners–in filing the present action and praying for, among others, the recovery of possession of the
disputed one-half portion and for judicial determination of the reasonable fees due Atty. Lacaya for his
services –were not barred by the compromise agreement.
Atty. Lacaya is entitled to receive attorney’s fees on a quantum meruit basis
In view of their respective assertions and defenses, the parties, in effect, impliedly set aside any express
stipulation on the attorney’s fees, and the petitioners, by express contention, submit the reasonableness
of such fees to the court’s discretion. We thus have to fix the attorney’s fees on a quantum meruit basis.
"Quantum meruit—meaning ‘as much as he deserves’—is used as basis for determining a lawyer’s
professional fees in the absence of a contract x x x taking into account certain factors in fixing the
amount of legal fees."47 "Its essential requisite is the acceptance of the benefits by one sought to be
charged for the services rendered under circumstances as reasonably to notify him that the lawyer
performing the task was expecting to be paid compensation" 48 for it. The doctrine of quantum meruit is
a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to
retain benefit without paying for it. 49
Under Section 24, Rule 138 of the Rules of Court 50 and Canon 20 of the Code of Professional
Responsibility,51 factors such as the importance of the subject matter of the controversy, the time spent
and the extent of the services rendered, the customary charges for similar services, the amount involved
in the controversy and the benefits resulting to the client from the service, to name a few, are
considered in determining the reasonableness of the fees to which a lawyer is entitled.
In the present case, the following considerations guide this Court in considering and setting Atty.
Lacaya’s fees based on quantum meruit: (1) the questions involved in these civil cases were not novel
and did not require of Atty. Lacaya considerable effort in terms of time, skill or the performance of
extensive research; (2) Atty. Lacaya rendered legal services for the Spouses Cadavedo in three civil cases
beginning in 1969 until 1988 when the petitioners filed the instant case; (3) the first of these civil cases
(Cadavedo v. Ames) lasted for twelve years and reaching up to this Court; the second (Ames v.
Cadavedo) lasted for seven years; and the third (Cadavedo and Lacaya v. DBP) lasted for six years,
reaching up to the CA; and (4) the property subject of these civil cases is of a considerable size of
230,765 square meters or 23.0765 hectares.
All things considered, we hold as fair and equitable the RTC’s considerations in appreciating the
character of the services that Atty. Lacaya rendered in the three cases, subject to modification on
valuation. We believe and so hold that the respondents are entitled to two (2) hectares (or
approximately one-tenth [1/10] of the subject lot), with the fruits previously received from the disputed
one-half portion, as attorney’s fees. They shall return to the petitioners the remainder of the disputed
one-half portion.
The allotted portion of the subject lot properly recognizes that litigation should be for the benefit of the
client, not the lawyer, particularly in a legal situation when the law itself holds clear and express
protection to the rights of the client to the disputed property (a homestead lot). Premium consideration,
in other words, is on the rights of the owner, not on the lawyer who only helped the owner protect his
rights. Matters cannot be the other way around; otherwise, the lawyer does indeed effectively acquire a
property right over the disputed property. If at all, due recognition of parity between a lawyer and a
client should be on the fruits of the disputed property, which in this case, the Court properly accords.
WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AFFIRM the decision
dated September 17, 1996 and the resolution dated December 27, 1996of the Regional Trial Court of
Dipolog City, Branch 10,in Civil Case No. 4038, with the MODIFICATION that the respondents, the
spouses Victorino (Vic) T. Lacaya and Rosa Legados, are entitled to two (2) hectares (or approximately
one-tenth [1/10] of the subject lot) as attorney’s fees. The fruits that the respondents previously
received from the disputed one-half portion shall also form part of the attorney’s fees. We hereby
ORDER the respondents to return to the petitioners the remainder of the 10.5383-hectare portion of the
subject lot that Atty. Vicente Lacaya acquired pursuant to the compromise agreement.
SO ORDERED.
