Anido v. Negado
REITERATIONFacts
The Antecedents: Private respondent Filomeno R. Negado filed a complaint for collection of attorney's fees against petitioners Maria L. Anido, Jose E. Larraga, and Salud E. Larraga. Private respondent alleged that in July 1978, he entered into an oral contract for legal services with petitioners to prepare documents for the settlement of their parents' intestate estate. He prepared the documents, including an "Extrajudicial Settlement of Estate Among Heirs" and "Project of Partition," and a "Contract for Attorney’s Service and Fee" stipulating a 4% commission on property sales. Private respondent claimed petitioners used the documents but refused to sign the contract and did not pay him. Procedural History: The Regional Trial Court (RTC) ruled in favor of the private respondent, declaring that an oral contract existed, that private respondent had performed his obligation before illegal dismissal, and ordering petitioners to pay P953,250.00 (15% of P6,355,000.00 total sales) as professional fees, plus 20% interest, P30,000.00 for attorney's fees and litigation expenses, and costs. The Court of Appeals (CA) affirmed the existence of the oral contract but reduced the attorney's fees to 10% and eliminated the award for interest and litigation expenses. The CA also initially ruled that the action had prescribed, but later held that since prescription was not an issue during pre-trial, it could not be resolved on appeal. Both parties moved for reconsideration, which were denied. The Petition: Petitioners filed a petition for review on certiorari, arguing that the CA erred in not dismissing the complaint on the ground of prescription and in giving credence to hearsay evidence.
Issue(s)
Whether the Court of Appeals erred in not dismissing the complaint on the ground of prescription. Whether the Court of Appeals violated the rule on res inter alios acta by giving credence to a hearsay piece of evidence.
Ruling
The Supreme Court granted the petition, reversed, and set aside the assailed Decision of the Court of Appeals. The Court ruled that the action was barred by prescription.
Ratio Decidendi
On the issue of prescription: The Supreme Court agreed with the petitioners that the Court of Appeals could have resolved the issue of prescription on appeal, as it was raised as a special and affirmative defense in the Answer and invoked during pre-trial, with the trial court postponing its resolution. The Court reiterated that failure to plead the defense of prescription does not amount to a waiver if the plaintiff's own allegations or evidence show that the action has already prescribed. In this case, private respondent's allegation that petitioners refused to sign the contract in October 1978 and the filing of the complaint on November 23, 1987, more than nine years later, clearly indicated that the six-year prescriptive period under Article 1145 of the Civil Code for actions based on an oral contract had lapsed. The Court emphasized that as a lawyer, private respondent should have known the prescriptive period for his claim. Furthermore, Rule 9, Section 1 of the 1997 Rules of Civil Procedure mandates the dismissal of an action when it appears from the pleadings or evidence that it is barred by the statute of limitations. Therefore, the appellate court erred in affirming the award of professional fees. There was no ratio provided for the second issue, so this entry is intentionally left blank.
Main Doctrine
An action for collection of attorney's fees based on an oral contract, filed more than nine years after the cause of action accrued, is barred by prescription under Article 1145 of the Civil Code, as the six-year prescriptive period had lapsed.