A.C. No.

720, June 17, 2015

Atty. Macaraeg denied Francisco's accusation that he
FRANCISCO CAOILE, Complainant, v. ATTY. neglected their case. He pointed out that to push
through with the appeal he even advanced some of
MARCELINO MACARAEG, Respondent.
the appeal expenses. While he admitted that he
failed to submit an appellants' brief, he averred that
RESOLUTION the same was actually the fault of his clients who
failed to provide the necessary funds to file said brief.
DEL CASTILLO, J.: According to him, he constantly reminded Francisco
to give him the amount necessary to cover the costs
of the transcript and printing of the appeal brief. He
Alleging that his lawyer's neglect and dereliction of
even filed three motions for extension of time to file
duty caused the dismissal of his appeal, complainant
brief to give Francisco more time to come up with the
Francisco Caoile (Francisco) filed on August 16, 1966
said payment. Still, Francisco was unable to pay.
a Complaint1 for disbarment against Atty. Marcelino
Moreover, Atty. Macaraeg was not reimbursed for the
Macaraeg (Atty. Macaraeg).
amount he advanced for appeal expenses.
Factual Antecedents
On September 22, 1966, this Court referred the
Complaint to the Solicitor General for investigation,
Francisco, and four others, engaged the services of
report and recommendation.10
Atty. Macaraeg to represent titiem in Civil Case No.
11119, an action for recovery of ownership filed
Proceedings before the Solicitor General
before the Court of First Instance (CFI) of Lingayen,
Pangasinan. After the CFI rendered judgment against
From March to November 1967, the Solicitor General
them, Francisco and his co-defendants decided to
conducted several hearings.11 Thereafter, the parties
appeal their case before the Court of Appeals (CA).
were required to submit their respective
memoranda.12 Atty. Macaraeg submitted his
Accordingly, Atty. Macaraeg filed a notice of appeal.
Memorandum on January 18, 1968,13 while Francisco
Thrice he moved for extension of time to file
submitted his Memorandum on March 25, 1968.14
appellants' brief. In his last motion for extension,2 he
alleged that he was already in the process of doing
In November 1972, the Office of the Solicitor General
the finishing touches on the brief and just needed to
again summoned the parties to appear before it.15
have it printed. Yet, the extended period expired
Notably, the return of the subpoena served upon
without Atty. Macaraeg filing any brief. Hence, upon
Atty. Macaraeg contained a notation,
motion of the opposing party, the CA dismissed the
viz:chanroblesvirtuallawlibrary
appeal.3 The dismissal became final and executory
on December 13, 1963.4 Atty. Marcelino Macaraeg is now deceased.

Francisco averred that they were unaware of the

(illegible)
dismissal of their appeal until they were served with
Signature
the CFI's writ of execution5 and a notice of sale at
wife16
public auction6 of their property in 1965. After
Subsequently, this case was transferred to the
confirming with the CA that they indeed lost the
Integrated Bar of the Philippines (IBP).
case, Francisco confronted Atty. Macaraeg who
informed him that they lost the case because they
Report and Recommendation of the Integrated Bar of
failed to pay him in full.7
the Philippines
Hence, this administrative complaint against Atty.
In an Order17 dated May 8, 1990, the IBP notified the
Macaraeg for neglect and dereliction of duty.
parties to manifest whether they are still interested
in prosecuting the case, or whether supervening
In his Answer,8 Atty. Macaraeg averred that Francisco
events have transpired rendering the case moot and
and his co-defendants did not pay in full for his
academic. The IBP received no response. On
services in filing the appeal. Anent the pacto de retro
November 17, 1997, the IBP again sent notices to the
sale which Francisco and his wife executed in his
parties to appear,18 but the notices were unclaimed.
favor supposedly to cover the balance of his
Subsequently, the IBP, through an Order 19 dated
professional fees, Atty. Macaraeg claimed that it was
November 27, 2001, directed the heirs of Atty.
Francisco who insisted on its execution, and that,
Macaraeg to submit a certified true copy of his death
contrary to Francisco's claim, it was intended as
certificate to no avail as the copy thereof sent to the
payment for his services while representing Francisco
said heirs was returned to sender.
before the CFI, and not as payment for his services in
filing the appeal. Atty. Macaraeg also claimed that, in
Finally on October 19, 2011, Commissioner Oliver A.
any case, Francisco did not honor the said pacto de
Cachapero (Commissioner Cachapero) of the
retro sale as the possession of the lot was never
Commission on Bar Discipline of the IBP came up
turned over to him.9
with a Report and Recommendation.20 Noting the
long period of time that the Complaint has been it to state that a motion for extension to file an
pending, he stated:chanroblesvirtuallawlibrary appellant's brief carries with it the presumption that
the applicant-lawyer will file the pleading within the
For unknown reasons, this case x x x lingered [quite requested extended period. Failure to dojo without
some time] in the Commission. It was filed on August any reasonable excuse violates the Code of
16, 1966 in the Supreme Court and x x x Professional Responsibility.23
subsequently found its way [to] the Commission
where it was initially assigned to a Commissioner. In While Atty. Macaraeg attributed the non-filing of the
the first week of October 2011, the undersigned, who brief to his clients' failure to give the amount
was tasked to prepare the resolution, received the necessary for filing the same, he should have, as
folder and the records of the case. aptly stated by Commissioner Cachapero, shown a
more mindful and caring attitude towards the cause
Records show that on May 8, 1990, then of his clients by advancing the payment. Besides, the
Commissioner Ernesto L. Pineda wrote the parties facts of this case show that his clients were making
asking them to manifest within x x x (10) days from partial payments in their efforts to comply with their
notice whether x x x they are still interested in obligation to him and were not deliberately refusing
prosecuting this case, and whether supervening to pay him. In fact, as claimed by Atty. Macaraeg
events have transpired which rendered the resolution himself, Francisco even insisted that they enter into a
moot or academic. The Commission received no pacto de retro sale in order for them to fully pay him
response from either litigant, hence this for the services he rendered in connection with their
resolution.21cralawlawlibrary civil case in the CFI. In fact, if Atty. Macaraeg truly
believed that the necessary funds from his clients
Anent the merits of the Complaint, Commissioner
were not forthcoming, he could have excused himself
Cachapero ruled that Atty. Macaraeg neglected the
from the case. The Code of Professional
cause of his clients when he thrice moved for
Responsibility allows a counsel to withdraw his
extension of time within which to file his brief.
services for a good cause, including the client's
However, he did not file any, reasoning out that the
failure to comply with the retainer agreement.24
non-filing was due to his clients' failure to give him
Indeed, Atty. Macaraeg violated Rule 12.03.
the necessary funds. Commissioner Cachapero
opined that the said excuse cannot stand. He thus
Nevertheless, while the actuation of Atty. Macaraeg
found Atty. Macaraeg to have violated Rule 12.03 of
warrants the imposition of a penalty, supervening
Canon 12 of the Code of Professional Responsibility,
circumstances call for the dismissal of this
viz.:chanroblesvirtuallawlibrary
administrative case.
A lawyer shall not, after obtaining extensions of time
to file pleadings, memoranda or briefs, let the period The Supreme Court Law List shows that Atty.
lapse without submitting the same or offering an Macaraeg was admitted to the Bar on November 6,
explanation for his failure to do so. 1933.25 Records reveal that he was already 60 years
old when the hearings in this disbarment case were
Accordingly, Commissioner Cachapero recommended held in 1967. Hence, he would have been 108 years
that Atty. Macaraeg be suspended from the practice old by this time. It is also noteworthy that the
of law for a period of two years. subpoena issued by the Solicitor General in 1972
contains a handwritten note that Atty. Macaraeg had
In Resolution No. XX-2013-17422 dated February 13, already died. Thereafter, nothing more was heard
2013, the IBP Board of Governors adopted and from either party despite notice. Under these
approved the findings of Commissioner Cachapero circumstances, it is safe to assume that the
with the modification that the penalty be reduced to complainant had already lost interest in pursuing this
a suspension of one year.chanRoblesvirtualLawlibrary disbarment case against Atty. Macaraeg and that
there is truth in the handwritten notation in the
The Court's Ruling return of the subpoena that Atty. Macaraeg had
already passed away. In Apiag v. Cantero,26 the Court
Rule 18.03 of the Code of Professional Responsibility dismissed the administrative case against therein
provides:chanroblesvirtuallawlibrary respondent and no longer imposed any sanction
against him in view of his death during the pendency
A lawyer shall not neglect a legal matter entrusted to of said case.cralawred
him, and his negligence in connection therewith shall
render him liable. WHEREFORE, premises considered, this Complaint
for Disbarment against Atty. Marcelino Macaraeg is
A considerable length of time had elapsed from the hereby DISMISSED.
time Atty. Macaraeg' filed the notice of appeal on
August 30, 1962 up to the time he filed the third SO ORDERED.chanroblesvirtuallawlibrary
motion for extension of time to file brief on October
5, 1963. Despite the passage of such time, however, Carpio, (Chairperson), Brion, Mendoza, and
Atty. Macaraeg still failed to file the brief, which Jardeleza,*JJ., concur.
resulted in the dismissal of his clients' appeal. Suffice
[G.R. No. 137680. February 6, 2004] On October 30, 1995, the POEA rendered a Decision
dismissing Felosopos complaint with prejudice. The
POEA, however, failed to rule on petitioners
CONCEPT PLACEMENT RESOURCES, INC., petitioner,
counterclaim for damages and attorneys fees.
vs. RICHARD V. FUNK, respondent.
Thereafter, the Decision became final and executory.

DECISION
On December 8, 1995, respondent advised petitioner
of the POEAs favorable Decision and requested
SANDOVAL-GUTIERREZ, J.: payment of his attorneys fees.

This is a petition for review on certiorari assailing the In reply, petitioner rejected respondents request for
Decision1[1] dated February 18, 1999 of the Court of the following reasons: (1) the retainer agreement
Appeals in CA-G.R. SP No. 46703, entitled Richard V. was terminated as early as March 1995; (2) there is
Funk vs. Hon. Santiago Ranada, Jr., Presiding Judge of no separate agreement for the handling of the labor
RTC, Makati, Branch 137 and Concept Placement case; and (3) the POEA did not rule on petitioners
Resources, Inc. counterclaim for attorneys fees. This prompted
respondent to file with the Metropolitan Trial Court
(MTC), Branch 67, Makati City a complaint for sum of
The antecedent facts giving rise to the controversy at
money (attorneys fees) and damages against
bar are as follows:
petitioner, docketed as Civil Case No. 51552.

On June 25, 1994, Concept Placement Resources,

During the pre-trial on September 3, 1996, the MTC,
Inc., petitioner, engaged the legal services of Atty.
upon respondents motion, declared petitioner as in
Richard V. Funk, respondent.
default. Its motion for reconsideration was denied in
an Order dated September 13, 1996. Forthwith,
On July 1, 1994, the parties executed a retainer respondent was allowed to present his evidence ex-
contract wherein they agreed that respondent will be parte.
paid regular retainer fee for various legal services,
except litigation, quasi-judicial and administrative
On October 27, 1996, the MTC rendered a
proceedings and similar actions. In these services,
Decision2[2] ordering petitioner to pay respondent
there will be separate billings.
P50,000.00 as attorneys fees.

Meanwhile, one Isidro A. Felosopo filed with the

On appeal, the Regional Trial Court (RTC), Branch
Philippine Overseas Employment Administration
137, Makati City, reversed the MTC Decision, holding
(POEA) a complaint for illegal dismissal against
inter alia that since the MTC, in the same Decision,
petitioner, docketed as POEA Case No. 94-08-2370.
did not resolve petitioners counterclaim for attorneys
Petitioner referred this labor case to respondent for
fees, which constitutes res judicata, respondent is
legal action.
not entitled thereto.

Immediately, respondent, as counsel for petitioner,

Respondent filed a motion for reconsideration but
filed with the POEA its answer with counterclaim for
was denied by the RTC in an Order3[3] dated
P30,000.00 as damages and P60,000.00 as attorneys
December 29, 1997.
fees.

On March 1, 1995, while the labor case was still

pending, petitioner terminated its retainer agreement
with respondent. Nevertheless, respondent continued 2
handling the case.

1 3
Thus, respondent filed with the Court of Appeals a regular retainer fee and those covered by separate
petition for review ascribing to the RTC the following billings. Petitioners services not covered by the
errors: (1) in reversing the MTC Decision on the regular retainer fee and, hence, subject to separate
ground of res judicata; and (2) in disregarding the billing include:
compulsory counterclaim as basis for respondents
action for attorneys fees.
xxx

In due course, the Court of Appeals promulgated its

5.Services not covered by the regular retainer fee
Decision4[4] dated February 18, 1999 reversing the
and therefore, subject to separate billing:
assailed RTC Decision and affirming the MTC
Decision, thereby sustaining the award to respondent
of his attorneys fees in the amount of P50,000.00. a) litigation, quasi-judicial proceedings,
administrative investigation, and similar proceedings
legal in nature;
Hence, this petition for review on certiorari wherein
petitioner raises the following assignments of error:
xxx
I.A QUESTION OF LAW IS BEING RAISED ON WHETHER
AN ALLEGATION IN PLEADING DRAFTED BY COUNSEL x x x While admittedly, the Petitioner and the Private
ON BEHALF OF HIS CLIENT FILED IN A LABOR CASE Respondent did not execute a written agreement on
CAN BE USED AS THE SOLE BASIS OF A COLLECTION Petitioners fees in said case apart from the Retainer
SUIT BY COUNSEL IN THE ABSENCE OF ANY WRITTEN Agreement, however, the Private Respondent did
CONTRACT; AND, categorically and unequivocally admit in its
Compulsory Counterclaim embodied in its Answer to
the Complaint, in POEA Case No. 94-08-2370, that it
II. ON A QUESTION OF LAW ON WHETHER
engaged the services of the Petitioner as its counsel
THERE IS A DISTINCTION BETWEEN THE PRINCIPLE
For a fee in the amount of P60,000.00, Etc.:
OF RES JUDICATA PER SE FROM THE PRINCIPLE THAT
THE DISMISSAL OF THE MAIN CASE CARRIES WITH IT
THE DISMISSAL OF THE COMPULSORY COMPULSORY COUNTERCLAIM
COUNTERCLAIM AND SAID DISMISSAL CONSTITUTES
RES JUDICATA WITH RESPECT TO THE COMPULSORY
1. Respondent reproduces herein by reference
COUNTERCLAIM.5[5]
all the material allegations in the foregoing Answer.

The basic issue to be resolved is whether or not

2. As shown by the allegation in the Answer
respondent is entitled to attorneys fees for assisting
the complaint is factually and legally unfounded. To
petitioner as counsel in the labor case.
defend itself against this baseless suit, respondent
suffered and continues to suffer actual damage in
While it is true that the retainer contract between the the amount of P30,000.00 and was compelled to hire
parties expired during the pendency of the said labor the services of counsel for a fee in the amount of
case, it does not follow that petitioner has no more P60,000.00 plus P1,500.00 honorarium per
obligation to pay respondent his attorneys fees. The appearance and litigation expenses in the amount of
Court of Appeals found that petitioner engaged the not less than P10,000.00 plus cost of
legal services of respondent and agreed to pay him
accordingly, thus:
3. suit. (Exhibit B-1: underscoring supplied)

Anent the first issue, the Petitioner resolutely avers

Petitioner, in order to evade its obligation, invoked
that he and the Private Respondent had agreed on
the principle of res judicata. Citing BA Finance
the latter paying him the amount of P60,000.00 by
Corporation vs. Co6[6], petitioner contends that
way of attorneys fees for his professional services as
since the complaint in the labor case was dismissed,
its counsel in POEA Case No. 94-08-2370 the
the counterclaim for attorneys fees was likewise
Petitioner relying on his Retainer Agreement in
dismissed. Consequently, the dismissal of the
tandem with the Compulsory Counterclaim of the
counterclaim has the effect of res judicata on
Private Respondent to the complaint of Isidro
respondents complaint for attorneys fees.
Felosopo.
Necessarily, it must also be dismissed.

We agree with the Petitioners pose. It bears stressing

Petitioners invocation of res judicata7[7] is utterly
that the Retainer Agreement of the Petitioner and the
misplaced. The labor case and the instant complaint
Private Respondent (Exhibit A) envisaged two (2)
for collection of attorneys fees are entirely different.
species of professional services of the Petitioner,
Obviously, in the two cases, there is no identity of
namely, those professional services covered by the

4 6

5 7
parties, identity of subject matter, and identity of
causes of action. Also, the Order in the labor case
dismissing the complaint with prejudice is not on the
merits.

Significantly, in German Marine Agencies, Inc. vs.

NLRC,8[8] we held that there must always be a
factual basis for the award of attorneys fees. Here,
since petitioner agreed to be represented by
respondent as counsel in the labor case and to pay
him his attorneys fees, it must abide with its
agreement which has the force of law between
them.9[9]

We observe, however, that respondent did not

encounter difficulty in representing petitioner. The
complaint against it was dismissed with prejudice. All
that respondent did was to prepare the answer with
counterclaim and possibly petitioners position paper.
Considering respondents limited legal services and
the case involved is not complicated, the award of
P50,000.00 as attorneys fees is a bit excessive. In
First Metro Investment Corporation vs. Este del Sol
Mountain Reserve, Inc.,10[10] we ruled that courts are
empowered to reduce the amount of attorneys fees if
the same is iniquitous or unconscionable. Under the
circumstances obtaining in this case, we consider the
amount of P20,000.00 reasonable.

WHEREFORE, the petition is GRANTED. The assailed

Decision of the Court of Appeals is AFFIRMED with
MODIFICATION in the sense that the award of
P50,000.00 as attorneys fees to herein respondent is
reduced to only P10,000.00. No costs.

SO ORDERED.

Vitug, (Chairman), Corona, and Carpio-Morales, JJ.,

concur.

10