G.R. No. 93941 June 26, 1992
NICEFORO S. AGATON, petitioner, vs. THE HON. COURT OF APPEALS, HON. JOSE C. DE GUZMAN (RTC JUDGE, Br. 93, Q.C.) and THE CONSOLIDATED BANK & TRUST CO. (SOLIDBANK), respondents.

FACTS

On September 21, 1981, Insular Bank of Asia and America (IBAA) and Consolidated Bank & Trust Company (Solidbank) extended a loan to Hitachi-Union, Inc. (HITACHI), secured by a real estate mortgage and a surety undertaking from Leonardo Ty. Due to HITACHI’s failure to pay, IBAA initiated extrajudicial foreclosure. HITACHI filed a complaint for injunction (Civil Case No. Q-44439) against the banks. The banks agreed to retain petitioner Niceforo S. Agaton as common counsel. Petitioner sent a letter-proposal for his fees, consisting of a fixed fee of P150,000 and a contingent fee of P550,000, payable if Solidbank succeeded in foreclosing the real estate mortgage and registering the sheriff’s certificate of sale. Solidbank sent a counter-proposal offering a fixed fee of P100,000 and a contingent fee of P250,000, payable only if Solidbank succeeded in foreclosing the real estate mortgage and registering the Sheriff’s Certificate of Sale. Petitioner accepted this counter-proposal without objection. The litigation resulted in a compromise agreement with surety Leonardo Ty, leading to a Judgment by Compromise. Solidbank received a cash settlement. Petitioner, having been paid the fixed fee, filed a post-judgment claim for the contingent fee, arguing that the cash collection from the compromise constituted success entitling him to the contingent fee. Solidbank opposed, contending the specific contingency of foreclosure and registration of the certificate of sale never occurred.

ISSUE

Whether petitioner is entitled to the contingent fee of P250,000 despite the non-occurrence of the specific contingency stated in the retainer agreement—that Solidbank “succeeds in the foreclosure of the real estate mortgage and registers the Sheriff’s Certificate of Sale.”

RULING

No. The Supreme Court denied the petition, affirming the Court of Appeals. The terms of the written retainer agreement, as stated in Solidbank’s counter-proposal accepted by petitioner, are clear and binding. The contingent fee was expressly payable only upon the occurrence of a specific condition: Solidbank’s success in foreclosing the real estate mortgage and registering the Sheriff’s Certificate of Sale. This specific contingency did not occur, as the case was settled by a compromise agreement resulting in a cash payment, not a foreclosure. The court applied the literal meaning of the contract’s stipulations under Article 1370 of the Civil Code, refusing to interpret the agreement to include other forms of settlement. Since the agreed condition precedent was not fulfilled, petitioner is not entitled to the contingent fee.