G.R. No. 120592, 14 March 1997


Traders Royal Bank Employees Union (petitioner) and Atty. Emmanuel Noel A. Cruz (private respondent) entered into a retainer agreement, whereby petitioner obligated itself to pay the respondent a monthly retainer fee in consideration that the law firm will only render their services enumerated in the contract.

During the existence of that agreement, the employees of Traders Royal Bank (TRB) filed a claim against the company for holiday, mid-year and year-end bonuses. On September 2, 1988, the NLRC rendered a decision in the foregoing case in favor of the employees. TRB challenged the decision of the NLRC before the SC. The SC deleted the award of mid-year and year-end bonus differentials while affirming the award of holiday pay differential.

After private respondent received the decision of the SC he notified the petitioner union, the TRB and the NLRC of his right to exercise and enforce his attorney’s lien over the award of holiday pay differential, he filed a motion before LA for the determination of his attorney’s fees, praying that 10% of the total award for holiday pay differential computed by TRB at P175,794.32, or the amount of P17,579.43, be declared as his attorney’s fees, and that petitioner union be ordered to pay and remit said amount to him.

Petitioner opposed said motion. LA favored private respondent. Petitioner appealed to NLRC but NLRC affirmed LA’s decision. Hence the petition at bar.


Is the private respondent entitled to Atty.’s fees aside from his retainer fee?


Yes. There is an establishment of quasi contract in this case. A quasi-contract is based on the presumed will or intent of the obligor dictated by equity and by the principles of absolute justice. Some of these principles are: (1) It is presumed that a person agrees to that which will benefit him; (2) Nobody wants to enrich himself unjustly at the expense of another; and (3) We must do unto others what we want them to do unto us under the same circumstances.

Article 2142 of the Civil Code states that: Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.

It is elementary that an attorney is entitled to have and receive a just and reasonable compensation for services performed at the special instance and request of his client. As long as the lawyer was in good faith and honestly trying to represent and serve the interests of the client, he should have a reasonable compensation for such services.

There are 2 commonly accepted concepts of attorney’s fees, the so-called ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client.

In its extraordinary concept, an attorney’s fee is an indemnity for damages ordered by the court to be paid by the losing party in litigation. The basis of this is any of the cases provided by law where such award can be made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.

It is the first type of attorney’s fees which private respondent demanded before the labor arbiter. 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.

 * Case digest by Aileen B. Buenafe, LLB-1, Andres Bonifacio Law School, SY 2017-2018