Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82761:56532&catid=1580&Itemid=566
Timestamp: 2019-04-21 04:55:16+00:00

Document:
ATTY. EMMANUEL D. AGUSTIN, JOSEPHINE SOLANO, ADELAIDA FERNANDEZ, ALEJANDRO YUAN, JOCELYN LAVARES, MARY JANE OLASO, MELANIE BRIONES, ROWENA PATRON, MA. LUISA CRUZ, SUSAN TAPALES, RUSTY BAUTISTA, AND JANET YUAN, Petitioners, v. ALEJANDRO CRUZ–HERRERA, Respondent.
This is a petition for review on certiorari1 assailing the Resolution2 dated September 30, 2005 of the Court of Appeals (CA) in CA–G.R. SP No. 85556 which approved the joint compromise agreement executed by respondent Alejandro Cruz–Herrera (Herrera) and the former employees of Podden International Philippines, Inc. (Podden), namely: Josephine Solano, Adelaida Fernandez, Alejandro Yuan, Jocelyn Lavares, Mary Jane Olaso, Melanie Briones, Rowena Patron, Ma. Luisa Cruz, Susan Tapales, Rusty Bautista, and Janet Yuan (complainants).
Respondent Herrera was the President of Podden while complainants were assemblers and/or line leader assigned at the production department.3 In 1993, the complainants were terminated from employment due to financial reverses. Upon verification, however, with the Department of Labor and Employment, no such report of financial reverses or even retrenchment was filed. This prompted the complainants to file a complaint for illegal dismissal, monetary claims and damages against Podden and Herrera.4 They engaged the services of Atty. Emmanuel D. Agustin (Atty. Agustin) to handle the case5 upon the verbal agreement that he will be paid on a contingency basis at the rate of ten percent (10%) of the final monetary award or such amount of attorney’s fees that will be finally determined.
[Podden and Herrera] are further ordered to pay complainants their money claims representing their underpayment of wages, 13th month pay, premium pay for holidays and rest days and service incentive leave pay to be computed by the Fiscal Examiner of the Research, Information and Computation Unit of the Commission in due time.
[Podden and Herrera] are furthermore ordered to pay each complainant the amount of [P]40,000.00 as moral and exemplary damages, as well as ten (10%) of the total awards as attorney’s fee.
A cursory examination of the records reveal[s] that complainants, all eleven (11) of them, had indeed executed their respective waiver and quitclaim thru an instrument entitled “Pagtalikod sa Karapatang Maghabol” absolving [Podden and Herrera] from any and all liabilities that may arise against the latter to these cases. The instruments were signed by the complainants and sworn to before Notary Public Amparo G. Ocampo. Considering the fact that the complainants, through their common counsel, received a copy of the Decision in these cases on December 28, 1998, it could only be supposed that as of that date they signed the instrument of waiver and quitclaim on March 2, 1999, April 8, 1999 and March 31, 2000, they were already properly apprised about the decision having been issued in their favor, more particularly the contents thereof, by their esteemed counsel. The fact that complainants would execute such waiver and quitclaim, notwithstanding, only shows the spontaneity and voluntariness of their deed.
WHEREFORE, premises considered, the motion for writ of execution is denied on [the] ground that complainants have already settled their cases with [Podden and Herrera].
On account of the settlement, however, [Podden and Herrera] are hereby ordered to pay complainants’ counsel ten (10%) percent of the amount received by complainants as attorney’s fees.
WHEREFORE, the appeal is GRANTED. The Order a quo of May 15, 2000 is hereby reversed and set aside and a new one entered ordering the Labor Arbiter a quo to immediately issue the corresponding writ of execution for the enforcement of the decision rendered in this case. The quitclaims executed by the complainants are hereby nullified. However, any amount received by the complainants under the quitclaims shall be deducted from the award due each of them.
Finding the above terms and conditions not contrary to law, public order and public policy, the parties’ prayer that the foregoing joint compromise agreement be approved and the extant case be dismissed with prejudice is GRANTED and the agreement ADMITTED. Judgment is hereby entered in accordance thereto.
Parties are enjoined to strictly comply with this judgment on compromise.
Atty. Agustin moved for the reconsideration of the foregoing resolution but his motion was denied in the CA Resolution22 dated September 8, 2006.
Displeased, Atty. Agustin, with the complainants named as his co–petitioners, interposed the present recourse contending that the resolutions of the CA violated the principle of res judicata because they amended and altered the final and executory LA Decision dated September 27, 1998 and NLRC Resolution dated May 7, 2003 on the basis of an unconscionable compromise agreement that was executed without his knowledge and consent. Atty. Agustin prays that the joint compromise agreement be set aside, the LA Decision dated September 27, 1998 executed and Herrera ordered to pay him P335,844.18 as attorney’s fees pursuant to the final and executory monetary award originally obtained by the complainants before the LA.
The petition is dismissible outright for being accompanied by a defective certification of non–forum shopping having been signed by Atty. Agustin instead of the complainants as the principal parties.
x x x [T]he certification (against forum shopping) must be signed by the plaintiff or any of the principal parties and not by the attorney. For such certification is a peculiar personal representation on the part of the principal party, an assurance given to the court or other tribunal that there are no other pending cases involving basically the same parties, issues and causes of action.
The Court has espoused leniency and overlooked such procedural misstep in cases bearing substantial merit complemented by the written authority or general power of attorney granted by the parties to the actual signatory.26 However, no analogous justifiable reasons exist in the case at bar neither do the claims of Atty. Agustin merit substantial consideration to justify a relaxation of the rule.
It is apparent that the complainants did not seek the instant review because they have already settled their dispute with Herrera before the CA. It is Atty. Agustin’s personal resolve to pursue this recourse premised on his unwavering stance that the joint compromise agreement signed by the complainants was inequitable and devious as they were denied the bigger monetary award adjudged by a final and executory judgment.
Atty. Agustin ought to be reminded that his professional relation with his clients is one of agency under the rules thereof “[t]he acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his authority.”27 It is clear that under the circumstances of this case, Atty. Agustin is acting beyond the scope of his authority in questioning the compromise agreement between the complainants, Podden and Herrera.
In the present case, the allegations of vitiated consent proffered by Atty. Agustin are all presumptions and suppositions that have no bearing as evidence. There is no proof that the complainants were forced, intimidated or defrauded into executing the quitclaims. On the contrary, the LA correctly observed that, based on the following facts, the complainants voluntarily entered into and fully understood the contents and effect of the quitclaims, to wit: (1) they have already received a copy and hence aware of the LA Decision dated September 27, 1998 when they signed the quitclaims on March 2, 1999, April 8, 1999 and March 31, 2000; (2) the quitclaims were written in Filipino language which is known to and understood by the complainants; (3) none of the complainants attended the hearings on the motion for execution of the LA Decision dated September 27, 1998; (4) they were consistent in their manifestations before the NLRC and the CA that they have already settled their claims against Podden and Herrera hence, their request for the termination of the appeals filed by Atty. Agustin before the said tribunals.
Furthermore, it is the complainants themselves who can impugn the consideration of the compromise as being unconscionable31 but no such repudiation was manifested before the Court or the courts a quo.
The ruling in Unicane Workers Union–CLUP v. NLRC32 cited by Atty. Agustin is not applicable to the facts at hand. The circumstances which led the Court to annul the quitclaim in Unicane are not attendant in the present case. In Unicane, the attorney–in–fact who signed the quitclaim in behalf of the employees exceeded the scope of his authority thus prejudicing the latter. Consequently, it was ruled that the quitclaim did not bind the employees. No akin situation exists in the case at bar.
As the validity of a compromise agreement cannot be prejudiced, so should not be the payment of a lawyer’s adequate and reasonable compensation for his services should the suit end by reason of the settlement. The terms of the compromise subscribed to by the client should not be such that will amount to an entire deprivation of his lawyer’s fees, especially when the contract is on a contingent fee basis. In this sense, the compromise settlement cannot bind the lawyer as a third party. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is not only to ensure that a lawyer acts in a proper and lawful manner, but also to see to it that a lawyer is paid his just fees.
However, equity dictates that an exception to such rule be made in this case with the end in view that the fair share of litigants to the benefits of a suit be not displaced by a contract for legal services.
It must be noted that the complainants were laborers who desired to contest their dismissal for being illegal. With no clear means to pay for costly legal services, they hired Atty. Agustin whose remuneration was subject to the success of the illegal dismissal suit. Before a judgment was rendered in their favor, however, the company closed down and settlement of the suit for an amount lesser than their monetary claims, instead of execution of the favorable judgment, guaranteed the atonement for their illegal termination. To make the complainants liable for the P335,844.18 attorney’s fees adjudged in the LA Decision of September 27, 1998 would be allowing Atty. Agustin to get a lion’s share of the P385,000.0037 received by the former from the compromise agreement that terminated the suit; to allow that to happen will contravene the raison d’être for contingent fee arrangements.
More importantly, Atty. Agustin was not totally deprived of his fees. Under the joint settlement agreement, he is entitled to receive ten percent (10%) of the total settlement. We find the said amount reasonable considering that the nature of the case did not involve complicated legal issues requiring much time, skill and effort.
It cannot be said that Herrera negotiated for the compromise agreement in bad faith. It remains undisputed that Podden has ceased operations on December 1, 1994 or almost four years before the LA Decision dated September 27, 1998 was rendered.41 In view thereof, the implementation of the award became unfeasible and a compromise settlement was more beneficial to the complainants as it assured them of reparation, albeit at a reduced amount. This was the same situation prevailing at the time when Herrera manifested and reiterated before the CA that a concession has been reached by the parties. Thus, the motivating force behind the settlement was not to deprive or prejudice Atty. Agustin of his fees, but rather the inability of a dissolved corporation to fully abide by its adjudged liabilities and the certainty of payment on the part of the complainants.
Also, collusion between complainants and Herrera cannot be inferred from the fact that Atty. Agustin obtained lesser attorney’s fees under the compromise agreement as against that which he could have gained if the LA Decision dated September 27, 1998 was executed. Unless there is a showing that the complainants actually received an amount higher than that stated in the settlement agreement, it cannot be said that Atty. Agustin was unlawfully prejudiced. There is no proof submitted supporting such inference.
Under the above circumstances, Herrera cannot be made solidarily liable for Atty. Agustin’s fees which, as a rule, are the personal obligation of his clients, the complainants. However, pursuant to his undertaking in the joint compromise agreement, Herrera is solely bound to compensate Atty. Agustin at the rate of ten percent (10%) of the total settlement agreement.42 Since the entire provisions of the joint compromise agreement are not available in the records and only the relevant portions thereof were quoted in the CA Resolution dated September 30, 2005, the Court deems it reasonable to impose a period of ten (10) days within which Herrera should fulfill his obligation to Atty. Agustin.
WHEREFORE, premises considered, the petition is hereby DENIED. The Resolution dated September 30, 2005 of the Court of Appeals in CA–G.R. SP No. 85556 is AFFIRMED.
Pursuant to his undertaking in the joint compromise agreement, respondent Alejandro Cruz–Herrera is ORDERED to pay, give, deliver to Atty. Emmanuel D. Agustin ten percent (10%) of the total settlement agreement within a period of ten (10) days from notice hereof. Both of them are hereby REQUIRED to report compliance with the foregoing order within a period of five days thereafter.
2 Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices Jose C. Mendoza (now a Member of this Court) and Arturo G. Tayag (retired), concurring; id. at 37–39.
3 Complainant Josephine Solano was a line leader while the rest of the other complainants were assemblers; id. at 44.
6 Issued by LA Aliman D. Mangandog; id. at 43–53.
19See CA Resolution dated September 30, 2005, id. at 37–38.
23Cosco Philippines Shipping, Inc. v. Kemper Insurance Company, G.R. No. 179488, April 23, 2012, 670 SCRA 343, 350–351.
24 518 Phil. 53 (2006).
25 Id. at 63, citing Gutierrez v. Sec. of the Dept. of the Labor and Employment, 488 Phil. 110, 121 (2004).
27See J–Phil Marine Inc. and/or Candava v. NLRC, 583 Phil. 671, 676 (2008).
29Czarina T. Malvar v. Kraft Food Phils., Inc., and/or Bienvenido Bautista, Kraft Foods International, G.R. No. 183952, September 9, 2013.
30Magbanua v. Uy, 497 Phil. 511, 520–522 (2005).
32 330 Phil. 291 (1996).
34 G.R. No. 167415, February 26, 2010, 613 SCRA 742.
36University of the East v. Secretary of Labor and Employment, G.R. Nos. 93310–12, November 21, 1991, 204 SCRA 254, 263, 265.
37 P35,000.00 multiplied by 11 complainants. See CA Decision dated September 30, 2005; rollo, pp. 37–39.
38Rayos v. Atty. Hernandez, 544 Phil. 447, 461 (2007).
40Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, 533 Phil. 69, 85 (2006).

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