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Attorney’s fees

First Posted 16:20:00 03/31/2008

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On the issue of attorney?s fees, we quote the award of the RTC in its modified decision dated 5 December 2001:

Fourth ? Hereby ordering Defendants ? DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney?s fees to plaintiffs equivalent to, and computed at Ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs? land and standing crops and improvements.

In justifying its award of 10% of the just compensation as attorney?s fees, the RTC cited Article 2208 of the Civil Code and supposed delay of three years by the DAR in ruling on the issue of just compensation.

Contracts for attorney?s services in this jurisdiction stand upon an entirely different footing from contracts for the payment of compensation for any other service.

x x x

[A]n attorney is not entitled in the absence of express contract to recover more than a reasonable compensation for his services; and even when an express contract is made, the court can ignore it and limit the recovery to reasonable compensation if the amount of the stipulated fee is found by the court to be reasonable The general rule is that attorney?s fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. They are not to be awarded every time a party wins a suit. The power of the court to award attorney?s fees under Article 2208 of the Civil Code demands factual, legal and equitable justification.

A perusal of Article 2208 of the Revised Civil Code will reveal that the award of attorney?s fees in the form of damages is the exception rather than the rule for it is predicated upon the existence of exceptional circumstances. In all cases, it must be reasonable, just and equitable if the same is to be granted. It is necessary for the court to make findings of fact and law to justify the grant of such award.

The matter of attorney?s fees must be clearly explained and justified by the trial court in the body of its decision.

In this case, the RTC failed to substantiate its award of attorney?s fees which amounts to ten percent (10%) of the award of P1,383,179,000 and is equivalent to P138,317,900.00.

It must be noted that the RTC, in justifying attorney?s fees in favor of AFC and HPI, ruled that AFC and HPI were ?constrained to go to court due to the unreasonable delay of three (3) years by defendant DAR in failing to rule on their claim for just and additional compensation.? However, as we have earlier discussed, AFC and HPI?s proper recourse after rejecting the initial valuation of LBP was to bring the matter to the RTC acting as Special Agrarian Court and not to file two complaints for determination of just compensation with the DAR. It is then quite obvious that AFC and HPI?s claimed ?unreasonable delay? in obtaining just compensation for its subject properties was brought about by their own undoing for which they should not be made to profit by virtue of an exorbitant award of attorney?s fees in their favor. Given this, we now hold that the RTC erred in awarding attorney?s fees in favor of AFC and HPI for said award lacks the requisite factual and legal justification. Its deletion is proper. ? Apo Fruits Corporation, et al. vs. Court of Appeals, et al., G.R. No. 164195, December 19, 2007

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