G.R. No. L-31865 November 26, 1973
PEDRO CABILDO, as Provincial Treasurer, Ilocos Norte, ADOLFO CALAPINI, as Municipal Treasurer, Burgos, Ilocos Norte, and THE ILOCOS NORTE COCONUT PRODUCERS ASSOCIATION, INC., petitioners, vs. HON. RICARDO Y. NAVARRO, Judge of the Court of First Instance, Laoag City, Ilocos Norte., JOHN F. NORTHCOTT, JR., and ROBERT PATRICK NORTHCOTT, respondents.

FACTS

The private respondents, John F. Northcott, Jr. and Robert Patrick Northcott, owned a parcel of land in Ilocos Norte. Due to tax delinquency, the provincial treasurer sold the land at public auction on December 27, 1963, to the petitioner Ilocos Norte Coconut Producers Association, Inc. for P6,326. The certificate and final bill of sale were registered on December 29, 1965. The Northcotts, through their administrator, subsequently sought to redeem the property by tendering payments totaling P8,877.88 to the provincial treasurer in January and February 1966. The Association resisted the redemption, leading the Northcotts to file a case for ownership.
The trial court initially dismissed the complaint. After the Northcotts filed a notice of appeal, they also filed a motion for reconsideration. While the appeal was pending approval, the trial court, on January 18, 1969, rendered an amended decision declaring the Northcotts’ redemption valid. The petitioners appealed this amended decision to the Supreme Court.

ISSUE

Whether the Supreme Court should approve the compromise agreement submitted by the parties during the pendency of the appeal, notwithstanding a claim for attorney’s fees by the respondents’ counsel.

RULING

The Supreme Court approved the compromise agreement. The legal logic is grounded in the fundamental right of a client to settle litigation. The Court cited established jurisprudence that a client possesses an undoubted right to compromise a suit without the intervention of his lawyer. The claim for attorney’s fees by Atty. Manuel V. San Jose, based on a contingent fee contract stipulating 60% of any recovered property, does not invalidate the agreement between the principal parties. The Court noted that under the terms of the retainer, the fee was collectible only if property was recovered. Since the compromise itself was the means by which the Northcotts retained an interest (7 hectares), and this outcome was achieved without a judicial recovery on the merits, a strict enforcement of the contingent fee was not warranted.
However, to balance equity, the Court ruled that Atty. San Jose should be compensated on a quantum meruit basis for services actually rendered. To secure this payment, the Court constituted a lien on the 7-hectare portion retained by the Northcotts under the compromise. The agreement itself, wherein the parties donated most of the disputed land to the Provincial Government of Ilocos Norte and retained 7 hectares each, was deemed valid and immediately effective. The case was remanded to the trial court solely to determine the reasonable attorney’s fee due.