392 Malvar v Kraft Food, G.R. No. 183952, September 9, 2013 TO!": Interference with contractual relations
#$T%OR : Although the practice of law is not a business, an attorney is entitled entitled to be properly properly compensated compensated for the professional professional services rendered for the client, who is bound by her express agreement to duly compensate the attorney. The client may not deny her attorney such just compensation.
F#"TS& '()ro*olo+(al order Note: The case initially concerned the execution of a final decision of the ourt of Appeals !A" in a labor litigation, but has mutated into a dispute over attorney#s fees between the winning employee and her attorney after she entered into a compromise agreement with her employer under circumstances that the attorney has bewailed as designed to prevent the recovery ofjust professional fees.
$alvar filed a complaint for illegal suspension and illegal dismissal against %&'I and (autista in the National )abor *elations ommission !N)*". The )abor Arbiter found and declared her suspension and dismissal illegal, and ordered her reinstatement, and the payment of her full bac+wages, inclusive of allowances and other benefits, pl/ attor*e/ fee/. N)* and A A affirmed the decision of the )abor Arbiter. After After the judgment in her favor became final and executory on $arch -, //0, $alvar moved for the issuance of a writ of execution but the execution failed due to 1uestionable computation of the award. $alvar re1uested for the nd issuance of the writ of execution and was partially complied with but with protest on the part of %raft by filing a T*2 for further execution since the computation is incorrect. A ruled in favor of %raft. Thus, $alvar appealed. 3hile her appeal was pending in this ourt, $alvar and the respondents entered into a compromise agreement. Thereafte Thereafter, r, $alvar $alvar filed an undated undated $otion $otion to 4ismiss53 4ismiss53ith ithdraw draw ase,0 praying praying that the appeal appeal be immediately immediately dismissed5withdrawn dismissed5withdrawn in view of the compromise agreement, and that the case be considered closed and terminated. efore t)e "ort (old a(t o* Malvar/ Moto* to /m//4t)dra6 "a/e, t)e "ort re(eved o* Febrar 15, 2011 a /o7(alled Moto* for !*terve*to* to rote(t #ttor*e/ #ttor*e/ R+)t/. T)e !*terv !*terve*o e*orr *d(a *d(ated ted t)at t)at Malvar Malvar/ / pre pre(p (pta tate te a(to* a(to* )ad baffle baffled, d, /)o(e /)o(ed d a*d eve* eve* embarr embarra/ a//ed /ed t)e !*terve*or, be(a/e t )ad do*e evert)*+ le+all po//ble to /erve a*d prote(t )er *tere/t. !t added t)at t (old *ot re(all a* */ta*(e of (o*fl(t or m/*der/ta*d*+ 6t) )er, for, o* t)e (o*trar, /)e )ad eve* (omme*ded t for t/ ded(ato* a*d devoto* to )er (a/e. #((ord*+ to t)e !*terve*or, t 6a/ (erta* t)at t)e (omprom/e a+reeme*t 6a/ at)ored b t)e re/po*de*t/ to evade a po//ble lo// of 182,000,000.00 or more a/ a re/lt of t)e labor lt+ato*, bt (o*/der*+ t)e !*terve*or/ *tere/t * t)e (a/e a/ 6ell a/ t/ re/olve * pr/*+ Malvar/ *tere/t, t)e /a6 t)e !*terve*or a/ a maor /tmbl*+ blo( to t)e (omprom/e a+reeme*t t)at t 6a/ t )e* bre6*+ 6t) )er. Obvo/l, t)e o*l 6a to remove t)e !*terve*or 6a/ to )ave )er term*ate t/ /erv(e/ a/ )er le+al (o*/el. T)/ prompted t)e !*terve*or to br*+ t)e matter to t)e atte*to* of t)e "ort to e*able t to re(over * fll t/ (ompe*/ato* ba/ed o* t/ 6rtte* a+reeme*t 6t) )er. Oppo/*+ t)e Moto* for !*terve*to*,28 Malvar /tre//e/ t)at t)ere 6a/ *o trt) to t)e !*terve*or/ (lam to defrad t of t/ profe//o*al fee/: t)at t)e !*terve*or la(ed t)e le+al (apa(t to *terve*e be(a/e t )ad (ea/ed to e;/t after #tt. Mar6l N. ato* a*d /bm//o* of t)e petto* for reve6 6t) t)e Spreme "ort: a*d f*all, 6)le t)e !*terve*or 6t)dre6 6t)dre6 t/ /erv(e/ /erv(e/ o* O(tober O(tober 5, 2009, 2009, t)e (omprom (omprom/e /e a+reeme*t a+reeme*t 6a/ e;e(ted 6t) t)e re/po*de*t/ re/po*de*t/ o*
e(ember 9, 2010 a*d *otar>ed o* e(ember 1?, 2010, after more t)a* a ear a*d t6o mo*t)/, d/pell*+ a* bad+e of bad fat) o* t)er e*d. !SS$@'S-: 3hether or not the $otion for Intervention to protect attorney6s rights can prosper, and, if so, how much could it recover as attorney6s fees. %@<: 7es. R#T!O: A compromise agreement is a contract, whereby the parties underta+e reciprocal obligations to avoid litigation, or put an end to one already commenced. The client may enter into a compromise agreement with the adverse party to terminate the litigation before a judgment is rendered therein. If the compromise agreement is found to be in order and not contrary to law, morals, good customs and public policy, its judicial approval is in order.88 A compromise agreement, once approved by final order of the court, has the force of res judicata between the parties and will not be disturbed except for vices of consent or forgery.
A client has an undoubted right to settle her litigation without the intervention of the attorney, for the former is generally conceded to have exclusive control over the subject matter of the litigation and may at any time, if acting in good faith, settle and adjust the cause of action out of court before judgment, even without the attorney6s intervention. It is important for the client to show, however, that the compromise agreement does not adversely affect third persons who are not parties to the agreement. (y the same to+en, a client has the absolute right to terminate the attorney9client relationship at any time with or without cause.8 (ut this right of the client is not unlimited because good faith is re1uired in terminating the relationship. The limitation is based on Article ; of the ivil ode, which mandates that <=e>very person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.? The right is also subject to the right of the attorney to be compensated. This is clear from @ection 0, *ule 8 of the *ules of ourt, which provides: @ection 0. hange of attorneys. 9 An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. Be may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the doc+et of the court in place of the former one, and written notice of the change shall be given to the adverse party. A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client the full compensation stipulated in the contract. Bowever, the attorney may, in the discretion of the court, intervene in the case to protect his rights. &or the payment of his compensation the attorney shall have a lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in the case wherein his services had been retained by the client. !(old emphasis supplied" In fine, it is basic that an attorney is entitled to have and to receive a just and reasonable compensation for services performed at the special instance and re1uest of his client. The attorney who has acted in good faith and honesty in representing and serving the interests of the client should be reasonably compensated for his service. Note: ompromise agreement is to be approved despite favorable action on the Intervenor6s $otion for Intervention.
