Kapisanan Ng Manggagawa Sa Manila Railroad Co. v. Fajardo
REITERATIONFacts
The Antecedents: The Kapisanan ng Manggagawa sa Manila Railroad Co. (KM) was ordered by the Supreme Court in G.R. No. L-19791 to refund P335,623.26 to its members, representing monthly dues collected from July 1960 to December 1962 without their consent and in violation of the union's constitution and by-laws. Procedural History: The Court of Industrial Relations (CIR) issued an order dated January 4, 1971, directing KM to pay Attorney Gregorio E. Fajardo P83,905.82 as attorney's fees, representing 25% of the total refundable amount. KM filed a motion for partial reconsideration, arguing that Fajardo was only entitled to fees from the 400 complainants who signed the complaint, not from all union members who benefited. The Petition: KM seeks a review of the CIR's order awarding attorney's fees, specifically questioning the amount and the basis for its collection from all union members.
Issue(s)
Whether Attorney Gregorio E. Fajardo is entitled to attorney's fees from all members of the Kapisanan ng Manggagawa who benefited from the refund, regardless of whether they signed the complaint. Whether the 25% attorney's fee awarded by the Court of Industrial Relations is fair and reasonable, considering the applicable legal provisions and the economic status of the clientele.
Ruling
The Court modified the order of the Court of Industrial Relations, reducing Attorney Fajardo's fees to P33,562.32, equivalent to 10% of the total refundable amount. The decision is immediately executory.
Ratio Decidendi
On the entitlement to attorney's fees from all members: The Court affirmed that Attorney Fajardo is entitled to be paid reasonable fees by all members of the union who benefited from his services, regardless of whether they signed the complaint. This is consistent with the principle that lawyers who secure benefits for all employees should be paid by all those favored or benefited by the award. The Court cited Union de Empleados de Trenes vs. Kapisanan Ng Mga Manggagawa sa MRRCO (L-14762, Dec. 20, 1961) in support of this principle, emphasizing that the representation secured a refund for all members who were assessed the additional fees without their consent. On the reasonableness of the 25% attorney's fee: The Court found the 25% attorney's fee to be excessive. It cited Section 11, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code, which fixes attorney's fees in judicial and administrative proceedings at 10% of the amount awarded. This percentage is also allowed for lawyers prosecuting workmen's compensation cases reaching the appellate court. Furthermore, the Court considered the low economic status of the clientele, stating that the fees should not be so large as to leave the clients with only a pittance. Therefore, the fee was reduced to 10% of the total refundable amount.
Main Doctrine
While attorneys who secure benefits for union members are entitled to fees from all who benefit, the 25% attorney's fee awarded by the Court of Industrial Relations was deemed excessive and reduced to 10% of the award, considering the low economic status of the clientele and the statutory allowance for fees in similar cases.