ROXAS V DE ZUZUARREGUI, JR.

FACTS:
1977, the National Housing Authority (NHA) filed expropriation proceedings against the
Zuzuarreguis for parcels of land belonging to them situated in Antipolo, Rizal with a total land
area of 1, 790, 570.36 The Zuzuarreguis engaged the legal services of Attys. Romeo G. Roxas
and Santiago N. Pastor. They executed a Letter-Agreement dated April 22, 1983 which indicated
that the contingent fees that the lawyers will receive at P11 or more per square meter is thirty
percent of the just compensation
The appropriate proceedings thereafter ensued and on October 29, 1984, a Partial
Decision was rendered fixing the just compensation to be paid to the Zuzuarreguis at P30 per
square meter. The NHA filed a Motion for Reconsideration for the lowering of the amount of just
compensation in accordance with applicable laws. Pending the resolution of the MFR filed by the
NHA, a joint special power of attorney was executed by the Zuzuarreguis in favor of Attys. Roxas
and Pastor
On December 10, 1985, a Letter-Agreement was executed by and between the
Zuzuarreguis and Attys. Roxas and Pastor which fixed the just compensation due the
Zuzuarreguis at P17, and anything in excess of that shall be the contingent fees of Attys. Roxas
and Pastor for their legal services. Resolution No. 1174 dated December 16, 1985, issued by the
NHA, stated that the property would be acquired at a cost of P19.50 per square meter and that it
will be paid in NHA Bonds which the yield would be based on the Central Bank rate at the time of
the payment. As a result of the NHA Resolution, a Compromise Agreement was executed and it
was approved by the Court in a Decision dated December 20, 1985. Computed at P19.50 per
square meter, the property of the Zuzuarreguis was expropriated at a total price of P34, 916,
122. The total amount released by the NHA was P54, 500, 00. The difference of P19, 583, 878
is, undoubtedly, the yield of the bonds. The amount turned over to the Zuzuarreguis by Atty.
Roxas amounted to P30, 520, 000 in NHA bonds
On August 25, 1987, a letter was sent by the Zuzuarreguis new counsel to Attys. Roxas
and Pastor demanding that the latter deliver to the Zuzuarreguis the yield corresponding to
bonds paid by the NHA within a period of 10 days from receipt, under pain of administrative, civil
and/or criminal action
The RTC dismissed the complaint. The Zuzuarreguis filed a Notice of Appeal. The Court of
Appeals ordered Attys. Roxas and Pastor to return to the plaintiffs the amount of P12, 596, 425,
already deducting the reasonable attorneys fees in the amount of P4,4 76,426.275.
ISSUES:
Whether or not the contingent fees were reasonable?
RULING:
No. Under the contract in question, Attys. Roxas and Pastor are to receive contingent fees for
their professional services.
Canon 13 of the Canons of Professional Ethics states:
a contract for contingent fee, where sanctioned by law, should be reasonable under all the
circumstances of the case including the risk and uncertainty of the compensation, but should
always be subject to the supervision of a court, as to its reasonableness
Indubitably entwined with the lawyers duty to charge only reasonable fees is the power of
this Court to reduce the amount of attorneys fees if the same is excessive and unconscionable
(Section 24, Rule 138, Rules of Court). Attorneys fees are unconscionable if they affront ones
sense of justice, decency or reasonableness.
Therefore, the power to determine the
reasonableness of attorneys fees stipulated by the parties is a matter falling within the
regulatory prerogative of the courts.
In the instant case, Attys. Roxas and Pastor received an amount which is equal to 44% of the
just compensation paid by the NHA to the Zuzuarreguis. Considering that there was no full blown

hearing in the expropriation case, ending as it did in a Compromise Agreement, the 44% is
undeniably excessive.