Roxas v Zuzuarregui, Jr

ROXAS V DE ZUZUARREGUI, JR. CHICO-NAZARIO: January 31, 2006 FACTS - 1977, the National Housing Authority (NHA) filed expropriation proceedings against the Zuzuarreguis for parcels of land belonging to them situated in Antipolo, Rizal with a total land area of 1, 790, 570.36 - The Zuzuarreguis engaged the legal services of Attys. Romeo G. Roxas and Santiago N. Pastor - They executed a Letter-Agreement dated April 22, 1983 which indicated that the contingent fees that the lawyers will receive at P11 or more per square meter is thirty percent of the just compensation - The appropriate proceedings thereafter ensued and on October 29, 1984, a Partial Decision was rendered fixing the just compensation to be paid to the Zuzuarreguis at P30 per square meter - The NHA filed a Motion for Reconsideration for the lowering of the amount of just compensation in accordance with applicable laws - Pending the resolution of the MFR filed by the NHA, a joint special power of attorney was executed by the Zuzuarreguis in favor of Attys. Roxas and Pastor - On December 10, 1985, a Letter-Agreement was executed by and between the Zuzuarreguis and Attys. Roxas and Pastor which fixed the just compensation due the Zuzuarreguis at P17, and anything in excess of that shall be the contingent fees of Attys. Roxas and Pastor for their legal services - Resolution No. 1174 dated December 16, 1985, issued by the NHA, stated that the property would be acquired at a cost of P19.50 per square meter and that it will be paid in NHA Bonds which the yield would be based on the Central Bank rate at the time of the payment - As a result of the NHA Resolution, a Compromise Agreement was executed and it was approved by the Court in a Decision dated December 20, 1985. - Computed at P19.50 per square meter, the property of the Zuzuarreguis was expropriated at a total price of P34, 916, 122. The total amount released by the NHA was P54, 500, 00. The difference of P19, 583, 878 is, undoubtedly, the yield of the bonds. - The amount turned over to the Zuzuarreguis by Atty. Roxas amounted to P30, 520, 000 in NHA bonds - On August 25, 1987, a letter was sent by the Zuzuarreguis’ new counsel to Attys. Roxas and Pastor demanding that the latter deliver to the Zuzuarreguis the yield corresponding to bonds paid by the NHA within a period of 10 days from receipt, under pain of administrative, civil and/or criminal action - Attys. Roxas and Pastor answered stating that the amount that they go seems huge from the surface but it just actually passed their hands. - On September 29, 1987, a letter was again sent to Attys. Roxas and Pastor formally terminating their services - The Zuzuarreguis then filed a civil action for Sum of Money and Damages, they demanded that the yield on the NHA bonds be turned over

to them - The RTC dismissed the complaint - The Zuzuarreguis filed a Notice of Appeal - The Court of Appeals ordered Attys. Roxas and Pastor to return to the plaintiffs the amount of P12, 596, 425, already deducting the reasonable attorney’s fees in the amount of P4,4 76,426.275 - Attys. Roxas and Pastor filed a MFR - The Zuzuarreguis also filed a MFR - The NHA and Pedrosa also filed a MFR - All MFRs were denied for lack of merit - Attys. Roxas and Pastor then filed a petition for certiorari ISSUES 1. WON the letter-agreement executed by the parties should stand as law between them 2. WON the contingent fees were reasonable HELD 1. Yes. A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. The Zuzuarreguis, in entering into the LetterAgreement, fully gave their consent thereto. In fact, it was them who sent the said letter to Attys. Roxas and Pastor, for the purpose of confirming all matters which they had agreed upon previously. There is absolutely no evidence to show that anybody was forced into entering into the LetterAgreement. It is basic that a contract is the law between the parties. 2. No. Under the contract in question, Attys. Roxas and Pastor are to receive contingent fees for their professional services. Canon 13 of the Canons of Professional Ethics states: a contract for contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk and uncertainty of the compensation, but should always be subject t o the supervision of a court, as to its reasonableness Canon 20, Rule 20.01 of the Code of Professional Responsibility states the guidelines by which a lawyer should determine his fees (see original) - Indubitably entwined with the lawyer’s duty to charge only reasonable fees is the power of this Court to reduce the amount of attorney’s fees if the same is excessive and unconscionable (Section 24, Rule 138, Rules of Court). Attorney’s fees are unconscionable if they affront one’s sense of justice, decency or reasonableness. Therefore, the power to determine the reasonableness of attorney’s fees stipulated by the parties is a matter falling within the regulatory prerogative of the courts. - In the instant case, Attys. Roxas and Pastor received an amount which is equal to 44% of the just compensation paid by the NHA to the Zuzuarreguis. Considering that there was no full blown hearing in the expropriation case, ending as it did in a Compromise Agreement, the 44% is undeniably excessive. In the opinion of the Court, 87.17% of the yields of the bond should go to the Zuzuarreguis computing from the amounts

stipulated in the Letter-Agreement. The remaining amount is what is due to Attys. Roxas and Pastor. The SC affirms the decision of CA with modification in the computation of the attorneys’ contingent fees.