G.R. No. L-23467 March 27, 1968
AMALGAMATED LABORERS’ ASSOCIATION and/or FELISBERTO M. JAVIER for himself and as General President, ATTY. JOSE UR. CARBONELL, ET AL., petitioners, vs. HON. COURT OF INDUSTRIAL RELATIONS AND ATTY. LEONARDO C. FERNANDEZ, respondents.

FACTS

The case originated from CIR Case No. 70-ULP-Cebu, an unfair labor practice complaint filed by Florentino Arceo and 47 others, together with their union, Amalgamated Laborers’ Association, against their former employer, Binalbagan Sugar Central Company, Inc. (Biscom), and others. After hearings where only ten of the complainants testified, the CIR, on November 13, 1962, rendered a judgment ordering the reinstatement with back wages of two regular employees and eight seasonal workers. This judgment became final after the Supreme Court dismissed the respondents’ appeal. The Chief Examiner of the CIR computed the total net back wages due to the ten complainants at P79,755.22. Atty. Leonardo C. Fernandez, who claimed to have been the attorney of record for the laborers since the case’s inception, filed a “Notice of Attorney’s Lien,” alleging a contingent fee agreement of 25% of the money claims adjudicated. Atty. Jose Ur. Carbonell later filed a “Discharge” document, informing the CIR of Fernandez’s discharge as counsel effective February 28, 1963. On March 19, 1964, CIR Judge Arsenio I. Martinez directed Biscom to deposit 25% of P79,755.22 as attorney’s fees and awarded this amount to Atty. Fernandez. Atty. Carbonell moved for reconsideration, arguing the CIR had no jurisdiction over the attorneys’ fees dispute and that the award was excessive. The CIR en banc denied his motion. Petitioners (Atty. Carbonell, the union, and the ten employees) appealed directly to the Supreme Court.

ISSUE

Whether the Court of Industrial Relations has jurisdiction to adjudicate the contractual dispute over attorneys’ fees arising from its main case, and whether the award of 25% of the recovered amount solely to Atty. Fernandez is proper.

RULING

The Supreme Court held that the CIR has jurisdiction to adjudicate the dispute over attorneys’ fees. The controversy is an epilogue or tail-end feature of the main case (CIR No. 70-ULP-Cebu), which is within the CIR’s jurisdiction. Once the CIR acquires jurisdiction over a case, it retains that jurisdiction until the case is completely decided, including all related incidents. The grant of jurisdiction implies the necessary incidental powers to effectuate it. However, the Court set aside the award of 25% attorneys’ fees solely to Atty. Fernandez. It ruled that the contingent fee contract for 25% of the recovery, entered into by the laborers who were in necessitous circumstances, is subject to close judicial scrutiny for reasonableness. The case was remanded to the CIR with instructions to conduct a hearing to determine the respective shares of Attorneys Fernandez and Carbonell in the awarded attorneys’ fees, considering the nature and extent of services rendered by each, the fact that the laborers’ claims were meritorious, and the amount recovered. The Court noted that if payment had already been made to Fernandez, he should return any excess over the amount to which he is ultimately found entitled.