G.R. No. 117438 June 8, 1995
RAUL SESBREÑO, petitioner, vs. HON. COURT OF APPEALS, and PATRICIA GIAN, et al., respondents.

FACTS

Petitioner Atty. Raul Sesbreño represented fifty-two employees in a suit for reinstatement and backwages against the Province of Cebu. Thirty-two employees, including the ten private respondents, signed agreements stipulating a contingent fee of 30% of back salaries as attorney’s fees plus 20% for expenses. The case culminated in a final judgment in favor of the employees. A subsequent compromise agreement led to the release of P2.3 million covering back salaries, terminal leave, and gratuity pay. The ten private respondents later asserted that their agreement with Sesbreño limited the 40% total deduction to back salaries only.
The trial court initially fixed Sesbreño’s fees at 60% of all monies received, later corrected to 50%. Sesbreño appealed, seeking additional fees. The Court of Appeals, however, reduced the award to 20% of the back salaries only, finding the 50% award on all monies excessive and contrary to the specific terms of the professional service contract.

ISSUE

Whether the Court of Appeals acted within its authority in reducing the amount of attorney’s fees stipulated in the contingent fee contract between the lawyer and his clients.

RULING

Yes, the Court of Appeals acted within its authority. The Supreme Court affirmed the appellate court’s decision, emphasizing the well-established doctrine that all attorney’s fees, whether fixed by contract or otherwise, are subject to the court’s supervisory power and control. A lawyer is not merely an agent of the client but primarily an officer of the court. By taking the attorney’s oath, a lawyer submits to the court’s authority to regulate professional compensation to ensure it remains reasonable, equitable, and commensurate with the services rendered.
In this case, the Court found the contingent fee contract authorizing a 50% deduction from “back salaries only.” The trial court’s award of 50% of “all monies,” which included terminal leave and gratuity pay, was therefore contrary to the contract’s express stipulation. More importantly, the appellate court correctly exercised its judicial discretion to assess the reasonableness of the fee. Considering the nature of the case as a labor suit, the amount recovered, and the extent of the lawyer’s participation, the reduction to 20% of the back salaries was deemed a fair, equitable, and reasonable exercise of the court’s regulatory power to prevent unconscionable compensation. The contract did not bind the court to an automatic approval of the stipulated percentage.