Riguer v. Mateo
REITERATIONFacts
The Antecedents: Eduardo N. Riguer engaged the services of Atty. Edralin S. Mateo in 2002 for civil and criminal cases concerning a parcel of land. Riguer paid the agreed acceptance, appearance, and pleading fees. During the appeal of the civil case, Atty. Mateo had Riguer sign a Kasunduan (agreement) on January 16, 2007, stipulating P30,000.00 for expenses, P50,000.00 for a favorable decision, and P250,000.00 upon the sale of the land. The appeal was decided in Riguer's favor on May 21, 2009, after which Atty. Mateo demanded payment based on the Kasunduan, which Riguer refused. Procedural History: Atty. Mateo filed a complaint for collection of attorney's fees on May 30, 2011, before the Municipal Trial Court in Cities (MTCC). The MTCC ruled in favor of Atty. Mateo on July 26, 2013, ordering Riguer to pay P250,000.00 with interest and costs, finding the Kasunduan binding. Riguer appealed to the Regional Trial Court (RTC), which affirmed the MTCC decision on June 2, 2014, also finding the Kasunduan valid and the fees reasonable. Riguer then appealed to the Court of Appeals (CA), which sustained the RTC's decision on April 13, 2015. Riguer's subsequent motions for reconsideration were denied by the CA on September 3, 2015, and January 14, 2016, for being filed out of time and as a prohibited second motion, respectively. The Petition: Riguer filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decisions. He argued that his motion for reconsideration was timely filed and that the CA erred in not considering his arguments regarding the defective service of notice and the prohibition against a second motion for reconsideration. Furthermore, Riguer contended that he was misled into signing the Kasunduan, which was included among voluminous documents for the appeal, and that the P250,000.00 attorney's fees were unreasonable and unconscionable, especially given the land's sale price of P600,000.00. Atty. Mateo countered that the service was proper, the petition raised factual issues beyond Rule 45, and the fees were justified by the property's alleged higher value.
Issue(s)
Whether Riguer's motion for reconsideration for the April 13, 2015 CA Decision was timely filed. Whether Atty. Mateo is entitled to recover ₱250,000.00 in attorney's fees pursuant to the Kasunduan.
Ruling
The Supreme Court affirmed the CA decision with modification. It held that while the motion for reconsideration was filed out of time, it may be entertained in the interest of substantial justice. The Court found that Riguer failed to prove fraud in the execution of the Kasunduan. However, it reduced the attorney's fees from ₱250,000.00 to ₱100,000.00, finding the original amount unconscionable.
Ratio Decidendi
On the timeliness of the motion for reconsideration: The Court held that the CA correctly reckoned the 15-day period to file a motion for reconsideration from May 15, 2015, the date of receipt by Macaldo, not May 18, 2015, when Riguer's former counsel was allegedly informed. Thus, the motion filed on June 2, 2015, was indeed filed out of time. However, the Court reiterated its power to relax procedural rules in the interest of substantial justice, as stubborn adherence to rules should not defeat justice, especially when unconscionable attorney's fees are involved. The Court found that the merits of Riguer's petition warranted such relaxation. On the entitlement to attorney's fees and the amount: The Court agreed with the lower courts that Riguer failed to establish fraud and deceit in his signing of the Kasunduan. The Court emphasized that fraud must be proven by clear and convincing evidence, and Riguer's allegations alone were insufficient. Therefore, the Kasunduan, as a contract, bound the parties. However, the Court found the stipulated attorney's fees of ₱250,000.00 to be unconscionable. It considered the amount as almost 50% of the property's sale price (₱600,000.00), Riguer's status as an elderly farmer with limited education, and the fact that the fees were for the appeal only, with prior fees already paid. The Court also noted Atty. Mateo's admission of believing 10% was appropriate. The Court gave weight to the notarized deed of sale showing the property's sale price of ₱600,000.00, rejecting Atty. Mateo's unsubstantiated claim of a higher market value.
Main Doctrine
While a written contract for attorney's fees controls the amount to be paid, courts may reduce stipulated fees if found to be unconscionable or unreasonable, considering factors such as the value of the property, the client's capacity, and the extent of services rendered. Procedural lapses may be relaxed in the interest of substantial justice.