RECTO v. HARDEN G.R. No. L-6897 November 29 1956 petitioners Esperanza Harden (appellant) respondents Claro M Recto (appellee)
Concepcion
Hermosisima
summary Mrs. Harden availed of the service of Atty. Recto to protect her share of the conjugal partnership against dispositions dispositions made by her husband James (joke lang, Fred talaga) in contemplation contemplation of the divorce suit she plans to file in California (California! In the cityyyyyyy). cityyyyyyy). Recto was successful in having the court order that properties alienated be returned to an account from which Mrs. Harden could get her monthly support as well as her share in the conjugal partnership after her marriage is dissolved. However, Mrs. Harden and Mr. Harden suddenly entered into agreements waiving the judgment, which in the opinion of Atty. Recto were made to defeat his claim for attorney’s fees. Court agreed with Recto. The court 1 st discussed that the Contract of Service is valid because it a) does not give Recto a share in the conjugal partnership because it only make the half of such as basis for his fees and b)[PRIL] it wasn’t entered into so that Recto could obtain divorce in the PH which is not allowed by our laws. It was merely a contract to protect Mrs. Harden’s share in the partnership in contemplation of a divorce suit which is allowed in the US. Moreover, both Mr. and Mrs. Harden are US citizens so the dissolution of their marriage (according to Article 15 CC) will be governed by US laws, which allows divorce.
facts of the case - Sometime in July 1941, Mrs. Esperanza Harden (Mrs. Harden) and Claro Recto executed a contract of professional services (Contract of Service), the contents of which are summarized below: o She engaged the services of Atty. Recto for the purpose of securing an increase in the amount of her support from her husband Mr. (James) Harden and for the purpose of protecting and preserving her right in the properties of the conjugal partnership, in contemplation of a divorce suit which she intended to file in the Court of California Since she isn’t currently able to pay Recto’s retainer fee she agrees to pay Atty . Recto o 25% of whatever increase in support she will get from Mr. (James) Harden Attorney’s fees charged as expenses of liti gation 20% of her share and participation which he may receive in the funds and properties of the conjugal partnership - In compliance with the contract, Atty. Recto commenced a case in the CFI Manila entitled “Esperanza Harden v Fred Harden and Jose Salumbides” wherein he prayed that o Mrs. Harden be given the exclusive administration of all businesses and property of the conjugal partnership OR that defendants inform Mrs. Harden of everything pertaining pertaining to the businesses and property of the conjugal partnership o That Mr. Harden account and return to the PH sums of money he withdrew and sent to HK o That transfers of shares of stock in the name of 3 rd persons and the administrator administrator Salumbides be cancelled and returned to the conjugal partnership o That a writ of preliminary injunction injunction be issued against the defendant to prevent them from disposing of the property and businesses of the conjugal partnership - A writ of preliminary injunction was thus issued by the CFI. Such injunction was modified upon an agreement of the parties to put up a separate bank account in the Chartered Bank of India, Australia and China. The funds of the conjugal partnership, as well as those that will be ordered returned to the conjugal partnership will then be transferred to such bank account.
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The Japs invaded the PH. After the liberation, records of the case were destroyed. Atty. Recto then asked that the records be reconstituted. On October 31 1949, the CFI rendered a decision o Declaring the value of the conjugal partnership at around P4Million. o Ordering that a conjugal lien be annotated in the TCT of a parcel of land in QC, of certain shares of stock, which will say that any alienation of Mr. Harden will be invalid for lack of consent of Mrs. Harden o Increasing the allowance of both Mr. and Mrs. Harden to P2500 from the previous P1500/month o Ordering Mr. (James) Harden to inform Mrs. Harden of all property and businesses belonging to the conjugal partnership o That a receiver be appointed to prevent Mr. Harden and Salumbides from disposing of the property despite the writ of preliminary injunction Of course Mr. Harden and Salumbides appealed the case. While the appeal was pending, Atty. Recto filed a manifestation and motion stating that Mrs. Harden suddenly instructed him to discontinue all proceedings relative to the case above as well as all judgment obtained, since she executed certain instruments with Mr. Harden: o A settlement agreement between Mister and Missus for the sum of P5,000 o That a trust fund was created by Mr. Harden from which a monthly pension of P500/month would be taken According to Atty. Recto, such documents were executed merely to defeat his claim as attorney’s fees. Thus he prayed in his motion that: o The receiver appointed continue his functions o He be declared entitled to the sum of P400,000 a his fees for services rendered o That the cases above continue since the receivership is based on these cases, and that such cases are important to safeguard his attorney’ fees A commissioner was appointed who reported that Atty. Recto was entitled to 20% of Mrs. Harden’s share of the conjugal partnership considering the time and effort the Attorney has given to her case. CFI adopted the finding of the commissioner and found Atty. Recto entitled to the sum of P384,110. Thus both Mr. and Mrs. Harden appealed such order to the SC. Their arguments are o That Mrs. Harden cannot bind the conjugal partnership by the said Contract of Service without Mr. Harden’s consent o That Article 1491 of the CC prohibits contingent fees o [TOPIC FOR PRIL] That the Contract of Service has for its purpose securing a decree of divorce allegedly in violation of Articles 1305, 1352, and 1409 of CC. o Terms of the said Contract of Service are harsh, inequitable and oppressive
issue Whether Atty. Recto was entitled to P386K YES ratio 1st Contention: The Contract of Service does not seek to bind the conjugal partnership - By virtue of the Contract of Service, Mrs. Harden merely bound herself to pay, by way of contingent fees, 20% of her share in said partnership. The contract neither gives nor purports to give to Atty. Recto any right (personal or real) to her aforesaid share in the partnership. The amount of her share is simply made the basis of computation of Atty. Recto’s fees 2nd Contention: It has already been held that contingent fees are not prohibited in the Philippines and are impliedly sanctioned by the Philippines’ Cannon of Professional Ethics. - Moreover, no proof was presented that Atty. Recto wanted to take unfair or unreasonable advantage of Mrs. Harden 2
3rd Contention: They are both US citizens, so divorce is allowed - 1st off, the contract didn’t say that Atty. Recto will procure a divorce or facilitate the procurement of a divorce. The Contract of Service merely sought to protect Mrs. Harden’s interest in the conjugal partnership, during the pendency of a divorce suit she intends to file in the US. - Moreover, since both Mr. and Mrs. Harden are admittedly US citizens, their status and dissolution of their marriage by the laws of the US which sanctions divorce. [pursuant to Article 9 of the civil code of Spain (which was in force in the PH at the time t he contract of service was executed) and Article 15 CC) - Thus the contract was not contrary to law, morals, good customs, public order or public policy 4th Contention: One who ask for equity must come with clean hands as well - In this case, Atty. Recto has won for Mr. Harden P2Million since the conjugal partnership was found to value around P4M - After securing such a judgment, it was inconceivable then for Mrs. Harden to waive such judgment for only $5,000 and $20,000 to be paid in installments. Records also show that the situation between Mr. and Mrs. Harden has worsened since Mr. Harden already filed a divorce suit in Joysi (New Jersey) allegedly for repeated acts of infidelity by Mrs. Harden - Considering the services rendered and judgment obtained by Atty. Recto for Mrs. Harden, it isn’t fair to award to him 20% of her share in the conjugal partnership - Appellants then argue that it was impossible for the lower court to determine an amount of P386K since the amount of Mr. Harden’s share can only be effected until the dissolution of the marriage between Mr. and Mrs. Harden. The SC countered that considering the agreements entered into between Mr. and Mrs. Harden after the judgment in the CFI ( which were made to defeat Atty. Recto’s claim for attorney’s fees), Mrs. Harden cannot now avail of such conditions.
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