[G.R. No. L-6897. November 29, 1956.] is neither harsh nor oppressive or inequitable.

In the Matter of the Claim for Attorney’s Fees. CLARO M. RECTO,

claimant-appellee, v. ESPERANZA P. DE HARDEN and FRED M. HARDEN 5. OBLIGATIONS AND CONTRACTS; ATTORNEY AND CLIENT; WIFE‘S CONTRACT
OF SERVICES; 20% CONTINGENT FEES ON HER SHARE IN CONJUGAL
1. ATTORNEY AND CLIENT; WIFE‘S CONTRACT FOR LEGAL SERVICES WITHOUT PARTNERSHIP; INTENTION TO FILE SUIT FOR DIVORCE AS CONDITION;
HUSBAND‘S CONSENT; CONTINGENT FEES ON HER SHARE IN CONJUGAL RENDERED IMPOSSIBLE BY WIFE. — The contract of services was made
PARTNERSHIP DOES NOT BIND THE LATTER. — Where the wife executed a principally, in contemplation of a suit for divorce which the wife intended to file
contract of professional services whereby she binds herself among other things before a competent court in California, "and of the liquidation of the conjugal
that she agrees to pay her attorney twenty (20%) per cent of the value of the partnership between’ her and her husband. Had she filed said action for divorce
share and participation which she may receive in the funds and properties of the and secure a decree of divorce, said conjugal partnership would have been
conjugal partnership of herself and her husband, such contract does not seek to dissolved and then liquidated and the share of the wife therein would have been
bind the conjugal partnership. The wife merely bound herself — and assumed the fixed. However this cannot take place, either now or in the forseeable future
personal obligation — to pay by way of contingent fees, 20% of her share in said owing to the agreements between the wife and her husband which were made for
partnership. The contract neither gives, nor purports to give to her lawyer any the evident purpose of defeating the attorney’s claim for his fees. In other words
right whatsoever, personal or real, in and to her aforesaid share. The amount the occurrences within the time contemplated by the parties — bearing in mind
thereof is simply a basis for the computation of said fees. the nature of and circumstances under which they entered into, said contract of
services — of the event upon which the amount of said fees depended, was
2. ID.; CONTINGENT FEES NOT PROHIBITED IN THE PHILIPPINES. — Appellants rendered impossible by the wife. Hence, whether such event be regarded as a
contention "that article 1491 of the Civil Code of the Philippine in effect prohibit condition or as a period, she may not insist upon its occurrence prior to the
contingent fees in untenable. Contingent fees are not prohibited in the Philippines enforcement of the rights of the lawyer, for "the condition shall be deemed
and are impliedly sanctioned by our Canons (No. 13) of Professional Ethics. (See fulfilled when the obligor voluntarily prevents its fulfillment," (Art. 1186 Civil
also Ulanday v. Manila Co., 45 Phil., 540, 554). Code) and "the debtor shall lose every right to make use of the period" when he
"violates any undertaking in consideration of which the creditor agreed to the
3. ID.; WIFE‘S CONTRACT FOR LEGAL SERVICES; INTERPRETED AND period." (Art. 1198, Civil Code).
CONSTRUED. — Appellant’s contention that the contract in question has for it
purpose to secure of divorce allegedly in violation of Articles 1305, 1352 and DECISION
1409 of the Civil Code of the Philippines is not borne out either by the language of
the contract between them or by the intent of the parties thereto. Its purpose
This is an appeal taken by Esperanza P. de Harden and Fred M. Harden from a
was not to secure a divorce or facilitate or promote the procurement of a divorce.
decision of the Court of First Instance of Manila, the pertinent part of which is of
It merely sought to protect the interest of the wife in the conjugal partnership,
the following tenor:.
during the pendency of a divorce suit she intended to file in the United States.
What is more, inasmuch as the husband and wife are admittedly citizens of the
"The contingent fee to which the claimant is entitled under paragraph 3 of the
United States, their status and the dissolution thereof are governed — pursuant
contract, Exhibit JJJ or 20, is 20% of P1,920,554.85 or the sum of P384,110.97.
to Art. 9 of the Civil Code of Spain (which was in force in the Philippines at the
time of the execution of the contract in question) and Article 15 of the Civil Code
"WHEREFORE, this Court hereby approves the recommendation of the
of the Philippines — by the laws of the United States, which sanction divorce. In
Commissioner with the above-stated modification, and finds that Attorney Claro
short, the contract of services, between the wife and her lawyer, is not contrary
M. Recto is entitled to the sum of THREE HUNDRED EIGHTY-FOUR THOUSAND
to law, morals, good customs, public order or public policy.
ONE HUNDRED AND TEN PESOS AND NINETY-SEVEN CENTAVOS (P384,110.97),
representing 20% of Esperanza P. de Harden’s share in the conjugal properties
4. ID.; CONTRACT OF SERVICES WHEN NOT OPPRESSIVE OR INEQUITABLE. —
owned by her and her husband, Fred M. Harden, as contingent fee stipulated in
Considering the character of the services rendered by the attorney in the case at
paragraph 3 of the Contract of Professional Services, Exhibit JJJ or 20, and the
bar, the nature and importance of the issues in said litigations, the amount of
said Esperanza P. de Harden is hereby ordered to pay the said amount above-
labor, time (1944 to 1952) and the trouble involved therein, the skill displayed in
stated." It appears that sometime in July, 1941, appellant, Mrs. Harden, and
connection with said cases, the value of the property affected by the controversy
appellee, Claro M. Recto, executed the following:
the professional character and standing of the lawyer, the risks assumed and the
chanroblesvirtual 1awlibrary

results obtained, Held: that the character and standing of the lawyer, the risks
"CONTRACT OF PROFESSIONAL SERVICES
assumed and the results obtained, Held: that the contract of services in question
KNOW ALL MEN BY THESE PRESENTS: chanroblesvirtual 1awlibrary
 "5. It is hereby understood that this contract includes the services of Attorney
"That I, ESPERANZA PEREZ DE HARDEN, of age, married to Fred M. Harden, and Claro M. Recto in connection with the securing of the liquidation of the properties
temporarily residing in the Philippines, with address at 534 Sales Street, Manila, and assets of the conjugal partnership of myself and Fred M. Harden, upon
have engaged the services of Attorney Claro M. Recto to appear and act as my dissolution of said partnership or for any other cause mentioned in Paragraph (3)
counsel in the action which I will file against my husband, Fred M. Harden, for the hereof.
purpose of securing an increase in the amount of support being received by me
from the conjugal partnership of myself and said Fred M. Harden, and for the IN WITNESS WHEREOF, I have signed these presents in the City _____ of Manila,
purpose likewise of protecting and preserving my rights in the properties of the Philippines this _______ day of July, 1941.
said conjugal partnership, in contemplation of the divorce suit which I intent to
file against him in the competent Court of California and of the liquidation of the
1aw library

In compliance therewith, on July 12, 1941, the appellee, as counsel for Mrs.
conjugal partnership between us, this contract of services to be under the Harden, commenced Civil Case No. 59634 of the Court of First Instance of Manila,
following conditions: 1awlibrary
entitled "Esperanza P. de Harden v. Fred M. Harden and Jose Salumbides." In the
complaint therein filed, it was prayed, among other things: (a) that Mrs. Harden
"1. That in lieu of retainer fee, which under the circumstances I am not in a be given the exclusive administration of the business and all properties of the
position to pay, I hereby agree to pay Attorney Claro M. Recto, such payment to conjugal partnership of Mr. and Mrs. Harden; (b) that, in the event of denial of
be made monthly, during the pendency of the litigation and until the termination this prayer, the defendants be ordered to inform her "of everything pertaining to
of the same, twenty-five (25%) per cent of the total increase in allowance or the administration of said business and properties", as well as to render accounts
pension which may be awarded to me by the court over and above the amount of thereof and to permit her to examine the books and records pertinent thereto; (c)
P1,500.00 which I now receive monthly from defendant Fred M. Harden out of the that Mr. Harden be ordered to account to Mrs. Harden, and to return to this
funds of the conjugal partnership; Provided, that should the case be terminated jurisdiction, the sum of P449,015.44 allegedly withdrawn by him from the
or an amicable settlement thereof be arrived at by the parties before the Philippines or sent by him to Hongkong on April 1, 1941; (d) that defendant
expiration of two years from the date of the filing of the complaint, I shall Salumbides be ordered to account for all moneys, amounting to P285,000.00,
continue to pay the said twenty-five (25%) per cent up to the end of said period. belonging to the business and assets of said conjugal partnership and deposited
by him in a safety box, either in his name, or in that of Antonio Wilson, from
January 23 to December 23, 1940; (e) that the transfer, in the name of
"2. That the aforesaid monthly payments shall be in addition to whatever amount Salumbides, of certain shares of stock, allegedly belonging to the conjugal
may be adjudged by the court against the defendant Fred M. Harden or against partnership, be rescinded and said defendant ordered to transfer said shares of
the conjugal partnership by way of litis expense, that is, attorney’s fees stock in the name of Mrs. Harden or in that of Mr. and Mrs. Harden, should Mr.
chargeable as expenses of litigation. Harden be allowed to continue as administrator of said partnership; ( f ) that the
transfer, made by Mr. Harden and/or by defendant Salumbides, as his attorney-
"3. That as full and complete satisfaction of the fees of Attorney Claro M. Recto in in-fact, of 36,000 shares of stock of the Angelo Mining Company, to some
connection with the case above referred to, and said case being for the purposes residents of Hongkong, be rescinded and said shares returned to the assets of the
aforestated, that is, to secure an increase in the amount of support I now receive conjugal partnership and placed in the name of Mr. and Mrs. Harden; (g) that the
as well as to protect and preserve my rights and interest in the properties of the monthly allowance of Mrs. Harden be increased from P1,500 to P15,000; (h) that,
conjugal partnership, in contemplation of divorce and of the liquidation of said pending final decision, Mr. Harden be ordered to increase the allowance or
partnership, I hereby agree to pay said Attorney Claro M. Recto twenty (20%) per pension of Mrs. Harden and their daughter Sarah Elizabeth to P10,000 a month;
cent of the value of the share and participation which I may receive in the funds and (i) that a writ of preliminary injunction be issued restraining the defendants
and properties of the said conjugal partnership of myself and defendant Fred M. from disposing of the assets of the conjugal partnership in fraud of Mrs. Harden.
Harden, as a result of the liquidation thereof either by death, divorce, judicial
separation, compromise or by any means or method by virtue of which said
partnership is or may be liquidated. By an order dated July 12, 1941, the court authorized the issuance of said writ,
upon the filing of the corresponding bond. It appears that, pursuant to an
"4. All expenses in connection with the litigation are to be for my account, but the agreement submitted by both parties, and with a view to avoiding unnecessary
same may be advanced by Attorney Claro M. Recto, to be reimbursed to him embarrassment, restraint or inconvenience in the financial operations of the
either from the money which I receive by way of support or from the funds of the business enterprises affected by said writ of preliminary injunction, the same was
conjugal partnership. amended by an order dated July 19, 1941, in the sense that.
". . . without prejudicing in any way the rights of the parties in this case, a defendant Harden and deductible from whatever participation he may still have in
separate bank account be established in the Chartered Bank of India, Australia the said conjugal partnership upon the liquidation thereof, upon his failure to
and China, of Manila, and all transactions in connection with the aforesaid return and deposit them in the name of the Plaza Lunch with the Manila branch of
businesses passed through that account by Mr. Harden or his duly authorized the Chartered Bank of India, Australia and China up to the time this decision shall
representative, who at present is Mr. Salumbides, without the necessity of become final;
securing a particular order from this Court on each occasion; that the present
funds in the Philippine National Bank in the name of Plaza Lunch and Fred M. "(e) A conjugal lien be annotated in the original and owner’s duplicate of Transfer
Harden be utilized for the purpose of starting said special bank account in the Certificates of Title Nos. 24393, 52436 and 54911 of the Register of Deeds of
Chartered Bank of India, Australia and China; that all income from the aforesaid Manila and in Original Certificate of Title No. 2292 of Quezon Province, and on all
businesses be deposited in this special bank account and no checks be drawn the certificates of shares belonging to said conjugal partnership, as well as in the
upon the same, except to pay the necessary overhead and running expenses corresponding books of the companies or corporations issuing them, whereby it
including purchases of tobacco, merchandise, etc., required for the proper will be made to appear that any subsequent alienation or encumbrance of said
operation of said businesses; that a new set of books be opened by Mr. Harden or properties by Fred M. Harden alone or his representative without the consent of
his duly authorized representative covering all business transactions passed his wife will be deemed fraudulent and subject to revocation or cancellation for
through said special bank account and the same be opened for inspection by the being in fraud and prejudicial to the right of Esperanza P. de Harden;
plaintiff’s duly authorized representative.
"( f ) Within a period of fifteen (15) days after this decision shall have become
"The order of injunction of July 12, 1941, is modified only to the above extent, final, Fred M. Harden and Esperanza P. de Harden are hereby ordered to execute
and in all other respects is maintained."
chanrob1es virtual 1aw library a document to be approved by this court creating and express active trust upon
the remaining cash assets and income of the conjugal partnership in the
Subsequently, the Philippines was invaded by the Japanese and placed under Philippines, whereby the Philippine Trust Company, with offices in Manila, will act
military occupation. Then came the liberation, in the course of which the records as trustee, subject to the right of Fred M. Harden to receive therefrom the sum of
of this case were destroyed. On October 23, 1946, said records were P2,500,00 a month by way of allowance and an equal amount for the plaintiff as
reconstituted at the instance of appellee herein. Thereafter, the proceedings were separate support and maintenance;
resumed and, in due course, the Court of First Instance of Manila rendered, on or
about October 31, 1949, a decision the dispositive part of which we quote: chanroblesvirtual 1awlibrary "(g) Within thirty (30) days after this decision shall have become final, Fred M.
Harden shall inform the plaintiff of all the properties and businesses of the
"In view of the foregoing considerations, this court finds and so holds that — "(a) conjugal partnership, be they in the Philippines or abroad, and render a true and
Fred M. Harden abandoned his domicile of origin in New Jersey and established a complete accounting of the earnings and profits thereof;
domicile of choice in Manila, Philippines, since 1901;
"(h) The plaintiff is entitled to litis expensae in the amount of
"(b) The matrimonial domicile of Fred M. Harden and Esperanza P. de Harden was P175,000.00 for services rendered by her counsel up to the rendition of this
established in Manila, Philippines, from the date of their marriage on December judgment, which Fred M. Harden or the herein receiver is ordered to pay within a
14, 1917; period of fifteen (15) days after this decision has become final; and

"(c) Since they did not execute any antenuptial contract before their marriage, all "(i) The writ of preliminary injunction of July 12, 1941, is hereby declared
the properties, real or personal, acquired by either or both of them on and after permanent and the order of receivership of November 20, 1946, is hereby
December 14, 1917, up to the present, over and above the sum of P20,000.00 maintained, but said auxiliary remedies will be automatically lifted upon the
representing Fred M. Harden’s capital, are hereby declared conjugal properties; conclusion of the annotation of the conjugal lien and the execution of the deed of
trust above mentioned. Without costs."IT IS SO ORDERED." chanrob1es virtual 1aw library

"(d) The total amount of P1,944,794.37 representing deposits in safety deposit The defendants appealed from said decision to this Court, where the case was
boxes in the name of Jose Salumbides, the selling price of the house in Los docketed as case No. L-3687. While the appeal was thus pending before us,
Angeles, California, and the pre-war and post-war remittances abroad of Fred M. herein appellee filed a manifestation and a motion, both dated February 20, 1952.
Harden, from which has already been deducted the sum of P160,000.00 covering In said "manifestation", appellee stated that Mrs. Harden had instructed him, by
payments for deficiency Federal income taxes and attorney’s fees, both in the tax letter, to "discontinue all proceedings relative to" said case, "vacate all orders and
case and the present one, is hereby declared chargeable to the share of judgments rendered therein, and abandon and nullify all her claims to the
conjugal partnership existing between her and Mr. Harden", in accordance with present case should be allowed to remain pending for the purpose of maintaining
several instruments dated January 29, 1952, and executed without the the receivership to safeguard his right to collect the fees that may be due him.
knowledge, advise and consent of said appellee, as counsel for Mrs. Harden,
whereby: (1) Mr. and Mrs. Harden had purportedly agreed to settle their "Attorney Claro M. Recto prays that a commissioner or referee be immediately
differences in consideration of the sum of $5,000 paid by Mr. Harden to Mrs. appointed by this Court to receive evidence in support of his allegations as to his
Harden, and a monthly pension of P500 to be paid by him to her; (2) Mr. Harden attorney’s lien and its enforcement. Counsel for the defendants-appellants does
had created a trust fund of $20,000 from which said monthly pension of $500 not object to this proceeding provided that the restrictions set forth by him be
would be taken; and (3) Mr. and Mrs. Harden had mutually released and forever observed. However, this Court does not have the proper facilities for receiving
discharged each other from all actions, debts, duties, accounts, demands and evidence in order to determine the amount of the fees claimed by Attorney Claro
claims to the conjugal partnership, in consideration of the sum of $1. It was M. Recto, and it is deemed advisable that this matter be determined by the Court
further asserted, in appellee’s "manifestation", that the purpose of the said of First Instance. This is specially so considering the opposition to the claim of
instruments, executed by Mr. and Mrs. Harden, was to defeat the claim of the Attorney Claro M. Recto filed by Attorney J. W. Ferrier, Sr. in behalf of Esperanza
former for attorney’s fees, for which reason, he prayed, in his aforementioned P. de Harden.
motion, that
"In view of the foregoing, the above entitled case is hereby remanded to the
"a) Pending the resolution of this motion, the receiver appointed herein be court of origin in order to determine the amount of fees claimed by Attorney Claro
authorized to continue holding the properties above mentioned in his custody in M. Recto in his motion dated February 20, 1952.
order not to defeat the undersigned’s inchoate lien on them;
"It is understood that, after said fees had been finally determined and paid, this
"b) A day set aside to receive the evidence of the undersigned and those of the case will be completely dismissed as prayed for by the defendants-appellants,
plaintiff and the defendant Fred M. Harden, in order to determine the amount of without prejudice to considering the claim of the receiver for compensation as
fees due to the undersigned, by the appointment of a referee or commissioner for stated in his urgent motion dated July 2, 1952. "Pending the determination of the
the reception of such amount of fees claimed by Attorney Claro M. Recto, the writ of preliminary
injunction, the orders of contempt and commitment, and all interlocutory orders
"c) After due hearing, the undersigned be declared entitled to the sum of which were issued in the course of this case, are hereby lifted and vacated, and
P400,000.00 as his fees for services rendered in behalf of the plaintiff in this with regard to the receivership, the same is hereby dissolved, only with respect to
case, under paragraph 3 of the contract, Annex ‘A’ , and to that end a charging the 368,553 shares of the Balatoc Mining Company. As to the rest of the
lien therefore be established upon the properties above-mentioned; properties, the receivership shall be maintained."chanrob1es virtual 1aw library

"d) And the receiver be ordered to pay to the undersigned the full amount of the In compliance with said resolution, the records of this case were remanded to the
fees to which the latter is found to be entitled." chanrob1es virtual 1aw library lower court, which, on September 2, 1952, designated a commissioner to receive
evidence on the amount of the fees collectible by herein appellee and to report
Counsel for the defendants-appellants, in turn, moved for the dismissal of the thereon. After due hearing, said commissioner submitted, on February 6, 1953, a
case, to which appellee objected. Acting upon the issues raised in such motion for report of about one hundred (100) pages of the printed record on appeal, setting
dismissal and in appellee’s motion to establish and enforce his charging lien, as forth, in detail, the evidence introduced by both parties, and his findings of fact,
counsel for Mrs. Harden, this Court issued on July 22, 1952, a resolution the with the following conclusion and recommendation: chanroblesvirtual 1awlibrary

pertinent part of which reads:

chanroblesvirtual 1awlibrary

"Taking into consideration the value of the properties involved in this litigation,
"It will be seen from the above that the defendants-appellants pray for the the length of time in which claimant had handled the same for Esperanza Harden,
complete dismissal of the above entitled case without prejudice to the annotation the volume and quality of the work performed, the complicated legal questions
of the contingent claim of Attorney Claro M. Recto on the property under involved, the responsibility assumed by the claimant as counsel, his reputation in
receivership, other than the 368,553 shares of the Balatoc Mining Company which the bar, the difficulties encountered by him while handling the same in which he
belong to Fred M. Harden. On the other hand, Attorney Claro M. Recto agrees to had to work hard every inch of the way because of the stiff oppositions filed by
the lifting of the writ of preliminary injunction, the orders of contempt and adverse counsel, the diligence he employed not only in the preservation of the
commitment, and all other interlocutory orders which were issued in the course of records in his possession during the days of enemy occupation but also in the
this case, with the exception of the receivership, but objects to the dismissal of protection of the interests of Esperanza Harden, his successful handling of said
the case on the ground that, since receivership is merely an auxiliary remedy, the case and those cases growing out of it which reached the Supreme Court, and the
extra services he rendered in her behalf in the tax and other court cases, the The third objection is not borne out, either by the language of the contract
undersigned Commissioner concludes that claimant is entitled to the full amount between them, or by the intent of the parties thereto. Its purpose was not to
of 20% of Esperanza Harden’s share of the conjugal properties, as provided in secure a divorce, or to facilitate or promote the procurement of a divorce. It
paragraph 3 of the Contract of Professional Services, Exhibit JJJ. merely sought to protect the interest of Mrs. Harden in the conjugal partnership,
during the pendency of a divorce suit she intended to file in the United States.
"WHEREFORE, the undersigned Commissioner respectfully recommends that Atty. What is more, inasmuch as Mr. and Mrs. Harden are admittedly citizens of the
Claro M. Recto be paid the equivalent amount of 20% of Esperanza P. de United States, their status and the dissolution thereof are governed — pursuant
Harden’s share of the conjugal properties or the sum of P369,410.04 as his to Article 9 of the Civil Code of Spain (which was in force in the Philippines at the
contingent fee for services rendered in her behalf."chanrob1es virtual 1aw library time of the execution of the contract in question) and Article 15 of the Civil Code
of the Philippines — by the laws of the United States, which sanction divorce. In
After appropriate proceedings, the lower court rendered a decision dated April 30, short, the contract of services, between Mrs. Harden and herein appellee, is not
1953, adopting substantially said report of the commissioner, but increasing the contrary to law, morals, good customs, public order or public policy.
contingent fee of appellee herein from P369,410.04, the sum recommended in
the report, to P384,110.97. Hence, this appeal taken by Mr. and Mrs. Harden. The last objection is based upon principles of equity, but, pursuant thereto, one
who seeks equity must come with clean hands (Bastida, et al., v. Dy Buncio &
The first question for determination therein is the validity of the above-quoted Co., 93 Phil., 195; 30 C. J. S. 475), and appellants have not done so, for the
contract of services, which the appellants assail as void, mainly, upon the ground: circumstances surrounding the case show, to our satisfaction, that their
(1) that Mrs. Harden cannot bind the conjugal partnership without her husband’s aforementioned agreements, ostensibly for the settlement of the differences
consent; (2) that Article 1491 of the Civil Code of the Philippines in effect between husband and wife, were made for the purpose of circumventing or
prohibits contingent fees; (3) that the contract in question has for its purpose to defeating the rights of herein appellee, under his above-quoted contract of
secure a decree of divorce, allegedly in violation of Articles 1305, 1352 and 1409 services with Mrs. Harden. Indeed, having secured a judgment in her favor,
of the Civil Code of the Philippines; and (4) that the terms of said contract are acknowledging her rights to the assets of the conjugal partnership, which turned
harsh, inequitable and oppressive. out to be worth almost P4,000,000 in addition to litis expensae in the sum of
P175,000, it is inconceivable that Mrs. Harden would have waived such rights, as
The first objection has no foundation in fact, for the contract in dispute does not well as the benefits of all orders and judgments in her favor, in consideration of
seek to bind the conjugal partnership. By virtue of said contract, Mrs. Harden the paltry sum of $5,000 allegedly paid to her by Mr. Harden and the additional
merely bound herself — or assumed the personal obligation — to pay, by way of sum of $20,000 to be paid by him in installments, at the rate of $500 a month. In
contingent fees, 20% of her share in said partnership. The contract neither gives, fact, no explanation has been given for this most unusual avowed settlement
nor purports to give, to the appellee any right whatsoever, personal or real, in between Mr. and Mrs. Harden. One can not even consider the possibility of a
and to her aforesaid share. The amount thereof is simply a basis for the reconciliation between the spouses, the same being inconsistent with the
computation of said fees. monetary consideration for said alleged settlement. What is more, the records
show that the relations between said spouses — which were bad indeed, not only
For the same reason, the second objection is, likewise, untenable. Moreover, it in July, 1941, when Mrs. Harden engaged the services of the appellee, but, even,
has already been held that contingent fees are not prohibited in the Philippines before, for Mr. and Mrs. Harden were separated since 1938 — had worsened
and are impliedly sanctioned by our Cannons (No. 13) of Professional Ethics. (see, considerably thereafter, as evidence by an action for divorce filed by Mr. Harden
also, Ulanday v. Manila Railroad Co., 45 Phil., 540, 554.) Such is, likewise, the in New Jersey, in July 1948, upon the ground of repeated acts of infidelity
rule in the United States (Legal Ethics by Henry S. Drinker, p. 176). allegedly committed by Mrs. Harden in 1940 and 1941.

". . . in the United States, the great weight of authority recognizes the validity of Again, it appears that appellee had rendered, under the contract in question, the
contracts for contingent fees, provided such contracts are not in contravention of following services, for the benefit of Mrs. Harden:chanroblesvirtual 1awlibrary

public policy, and it is only when the attorney has taken an unfair or
unreasonable advantage of his client that such a claim is condemned." 1. He succeeded in defeating defendants’ motion for the dissolution of the writ of
preliminary injunction, issued by the Court on July 12, 1941, and amended on
Needless to say, there is absolutely nothing in the records before us to show that July 19, 1941.
appellee herein had, in any manner, taken an unfair or unreasonable advantage
of his client Mrs. Harden. 2. On November 12, 1946, appellee moved for the appointment of a receiver,
upon the ground that, despite said writ of preliminary injunction, the defendants
had been disposing of the properties of the conjugal partnership for the purpose appellee filed on November 27, 1947, a motion praying that Mr. Harden be
of defrauding Mrs. Harden. After due hearing, the court, by an order dated declared in contempt of court and punished accordingly. Meanwhile, or on
November 20, 1946, directed the appointment of Abelardo Perez as receiver of November 24, 1947, Mr. Harden had instituted case G. R. No. L-1816 of this
said properties, upon the filing of a P10,000 bond. Defendants asked, on February Court against Hon. Emilio Peña, as Judge of the Court of First Instance of Manila,
13, 1947, that the receivership be suspended, or else, that they be allowed to file and Mrs. Harden. In the petition therein filed, Mr. Harden applied for a writ
a bond for the discharge of the receivership. Appellee replied objecting thereto, of certiorari annulling said orders of Judge Peña of October 7 and November 13,
unless the defendants posted a P4,000,000 bond. Subsequently or on March 5, 1947, and prayed that, pending disposition of the case, a writ of preliminary
1947, the defendants sought a reconsideration of the order of November 20, injunction be issued restraining the respondents therein from enforcing said
1946, and the discharge of the receiver. By an order dated March 21, 1947, the orders, particularly through contempt proceedings. Hence, the lower court
Court authorized said discharged upon the filing, by the defendants, of a bond in deferred action on the aforementioned motion of November 27, 1947. After due
the sum of P500,000, provided that Mr. Harden "should bring back all the hearing, this Court, in a resolution dated February 12, 1948, refused to issue the
368,553 shares of the Balatoc Mining Co., in his name to the Philippines for writ of preliminary injunction prayed for. Subsequently, or on November 21,
deposit with the Clerk of Court, or with the Chartered Bank of India, Australia and 1950, decision was rendered denying the petition for a writ of certiorari.
China, at Manila . . .
7. Soon after the issuance of our resolution in said case G. R. No. 1816, dated
"3. On motion of the appellee dated March 4, 1947, the Court, by an order dated February 12, 1948, or to be exact on March 27, 1948, the lower court issued an
April 5, 1947, directed Mr. Harden to remit to Mrs. Harden the sum of $2,500, to order directing Mr. Harden to comply, within five (5) days from notice, with the
be charged against her litis expensae. Upon similar motion, filed by appellee on or order of October 7, 1947. On April 6, 1948, appellee filed with the lower court the
about April 26, 1947, the Court ordered Mr. Harden, on May 13, 1947, to furnish corresponding formal charges against Mr. Harden for contempt of court. After due
Mrs. Harden the sum of $5,000, under the same conditions. hearing, Mr. Harden was, by an order of April 28, 1948, found guilty as charged
and ordered confined "until he complies with the aforementioned orders" of
4. On June 21, 1947, the defendants instituted Civil Case No. G. R. No. L-1499 of October 7, 1947 and March 27, 1948. On motion of Mr. Harden, said order of
this Court, entitled "Fred M. Harden and Jose Salumbides v. Emilio Peña, Abelardo April 28, 1948 was suspended until May 4, 1948, on which date he was arrested
Perez and Esperanza P. Harden" for the purpose of annulling and setting aside, by and placed in confinement at the New Bilibid Prison, in Muntinglupa, Rizal. On July
writ of certiorari, the aforementioned orders of the lower court dated July 12, 10, 1948, he filed with this Court a petition for a writ of habeas corpus against
1941, November 20, 1946, and April 5 and May 13, 1947, and to restrain, in the the Director of Prisons, (G. R. No. L-2349, entitled "Fred M. Harden v. The
meantime, the enforcement thereof. After appropriate proceedings, in the course Director of Prisons"), which, in due course was denied in a decision promulgated
of which appellee appeared as counsel for Mrs. Harden, and like counsel for the on October 22, 1948.
petitioners therein, filed several lengthy, detailed pleadings and memoranda,
decision was rendered on November 21, 1950, denying the writ 8. During the military occupation of the Philippines by the Japanese, the appellee
of certiorari prayed for. made representations with the Japanese Government to prevent the
commandeering of a business establishment belonging to Mr. and Mrs. Harden.
5. On or about September 9, 1947, appellee filed a motion alleging that despite Moreover, he succeeded in persuading the Japanese to refrain from interning Mrs.
the writ of preliminary injunction above mentioned, the defendants had, Harden and her daughter and to allow her to withdraw, from the former’s deposit
fraudulently and without judicial consent, remitted abroad several sums of money in a local bank, from P200 to P250 a month, for their subsistence. He, likewise,
aggregating P1,000,608.66, and praying that Mr. Harden be ordered to return lent her money to meet her needs and spent the sum of P55,000 in the
this sum to the Philippines, within a stated period, said sum to be deposited with preservation of the records and papers pertaining to the business and other
the account of the Plaza Lunch at the Manila Branch of the Chartered Bank of properties of the conjugal partnership of Mr. and Mrs. Harden.
India, Australia and China. Mr. Harden objected to said motion. Appellee filed a
rejoinder, to which Mr. Harden replied. Appellee filed a rejoinder to the rejoinder. 9. Appellee assisted, also, the receiver, as his counsel and, in such capacity, took
On October 7, 1947, the Court granted appellee’s motion. Mr. Harden sought a all steps essential for the proper discharge of the duties of the former. Among
reconsideration, which was opposed by the appellee on October 27, 1947, and other things, appellee sought and obtained judicial authority for some important
denied by an order dated November 13, 1947. Mr. Harden moved, on November acts of administration of, and disposition by, the receiver. He (appellee) secured
18, 1947, for the suspension of this order, which was immediately objected to by judicial intervention for the protection and preservation of the assets of the
the appellee and then denied by the Court. conjugal partnership, including orders for the delivery of certificates of stock, the
return thereof and/or its deposit with the clerk of court. He, likewise, represented
6. Inasmuch as said order of November 13, 1947 had not been complied with, the receiver in seeking war damage payments.
 explicitly declares that said litis expensae shall be "in addition to" appellee’s share
10. In civil case No. 6222 of the Court of First Instance of Manila, entitled of 25% of the increase in the allowance of Mrs. Harden and his attorney’s fees of
"Francisco Dalupan v. Fred M. Harden" for the recovery of P113,837.17, it was 20% of her share in the conjugal partnership. The second assignment of error is,
decided, through appellee’s intervention, that the conjugal assets would bear the therefore, devoid of merit.
payment of P22,767.43 only, the balance to be chargeable exclusively against Mr.
Harden’s share of the conjugal partnership. Appellants, further contend, that: chanroblesvirtual 1awlibrary

11. Appellee instituted civil case No. 6940 of the Court of First Instance of Manila, 3. The lower court erred in holding that the inchoate share of the wife, Esperanza
entitled "Abelardo Perez v. Chartered Bank of India, Australia and China and Fred P. de Harden, in the undissolved and unliquidated conjugal partnership properties
M. Harden", for the recovery of P1,000,608.66 and the return of stock certificates of the Harden spouses, is capable of certain valuation before such dissolution and
of the Balatoc Mining Co., which had been sent abroad. liquidation, and summarily assessing the value of Mrs. Harden’s share in such
conjugal properties without proper evidence.
12. He (appellee) represented Mrs. Harden in connection with a million-peso
federal tax case against Mr. and Mrs. Harden. 4. "The lower court erred in awarding 20% of such inchoate share to Attorney
Claro M. Recto from Mrs. Harden’s interests in the Harden conjugal properties,
13. Appellee successfully blocked Mr. Harden’s attempts to withdraw: (1) $53,000 summarily assessing such 20% inchoate share as of a value of P384,110.97, and
and forward the same to the Collector of Internal Revenue of Los Angeles, ordering the payment of said sum to Attorney Recto in pursuance of the
California; (2) $50,000.00, allegedly to defray expenses in resisting a new tax provisions of paragraph 3 of the Contract of Professional Services." chanrob1es virtual 1aw library

assessment against him in the United States; and (3) P65,000 for his expenses.
Appellants’ arguments in support thereof may be summarized as follows: The
Then too, the conjugal partnership had varried and extensive business interests contract of services in question provides that appellee’s contingent fees shall be
and its assets were worth almost P4,000,000. The pleadings, motions, 20% of the share of Mrs. Harden in the conjugal partnership. Pursuant to law, the
oppositions, rejoinders, and memoranda filed, and the evidence introduced, in the share of Mrs. Harden shall be determined upon the liquidation of said partnership,
aforementioned cases — in which appellee was pitted against one of the most which has not taken place, as yet. What is more, it cannot be effected until the
experienced and able members of the Philippine Bar — were numerous, extensive dissolution of the marriage relation between Mr. and Mrs. Harden. Inasmuch as
and exhaustive. For instance, the record on appeal in one of those cases, namely, this relation subsists, it follows that the amount of attorney’s fees due to appellee
G. R. No. L-3687, consisted of 966 pages. herein should not have been determined in the decision appealed from.

In short, considering the character of the services rendered by the appellee, the This line of argument overlooks the fact that said contract of services was made,
nature and importance of the issues in said litigations, the amount of labor, time principally, in contemplation of a suit for divorce that, according to Mrs. Harden,
(1941 to 1952) and trouble involved therein, the skill displayed in connection with she intended to file before a competent court in California, "and of the liquidation
said cases, the value of the property affected by the controversy, the professional of the conjugal partnership between" her and Mr. Harden. Had she filed said
character and standing of the appellee, the risks assumed and the results action for divorce and secured a decree of divorce, said conjugal partnership
obtained, we are of the opinion, and so hold, that the contract of services in would have been dissolved and then liquidated, and the share of Mrs. Harden
question is neither harsh nor oppressive or inequitable. therein would have been fixed. However, this cannot take place, either now, or in
the foreseeable future, owing to the aforementioned agreements between Mr. and
Under their second assignment of error, appellants maintain that: chanroblesvirtual 1awlibrary Mrs. Harden, which were made for the evident purpose of defeating appellee’s
claim for attorney’s fees. In other words, the occurrence, within the time
"The lower court erred in failing to find as a fact borne out by the evidence that contemplated by the parties — bearing in mind the nature of, and the
the legal services of Attorney Claro M. Recto to Mrs. Esperanza P. de Harden, circumstances under which they entered into, said contract of services — of the
payment, for which is sought by him in this case, have already been paid by his event upon which the amount of said fees depended, was rendered impossible by
immediate execution pending appeal of the decision in Civil Case No. CFI-R- Mrs. Harden. Hence, whether such event be regarded as a condition or as a
59634 (SC-G.R. No. L- 3687), wherein he collected the sum of P176,000.00 for period, she may not insist upon its occurrence, prior to the enforcement of the
all such legal services."
chanrob1es virtual 1aw library rights of the herein appellee, for "the condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment" (Art. 1186, Civil Code) and "the debtor
Said decision, however, states clearly that the aforementioned sum of P175,000 shall lose every right to make use of the period" when he "violates any
represents litis expensae, and the contract between the appellee and Mrs. Harden undertaking, in consideration of which the creditor agreed to the period." (Art.
1198, Civil Code.)

It should be noted, also, that the compensation agreed upon for appellee’s
services, consists of three (3) parts, namely: (a) 25% of the increase in the
allowance of Mrs. Harden; (b) litis expensae; and (c) 20% of her share in the
conjugal partnership. The first part was dealt with in the first paragraph of their
contract of services. The second and third parts were the object of the second
and third paragraphs, respectively. The first paragraph limited the rights of
appellee thereunder to two (2) years, in the event of termination of the case or
amicable settlement thereof within two (2) years from the filing of the complaint.
No such limitation appears in the second and third paragraphs of said contract.
Hence, the same were intended by the parties to be fully operative under any and
all conditions.

It may not be amiss to add that the value of the properties involved has been
assessed, not summarily, but after due notice and full dress hearing, in the
course of which both parties introduced testimonial and documentary evidence.
Appellants presented Exhibits 1 to 58, whereas those of the appellee were so
numerous that, having begun with Exhibit A, his last piece of documentary
evidence was marked Exhibit 26 Y’s. The transcript of the hearing, which lasted
ten (10) days, covers over 220 pages.

The other assignments of error made by appellants herein are mere corollaries of
those already disposed of, and, hence, no further discussion thereof is necessary.

In conclusion, it appears that the assets of the conjugal partnership between Mr.
and Mrs. Harden are reasonably valued at P3,841,109.70. One-half (1/2) thereof,
representing the share of Mrs. Harden, is therefore, worth P1,920,554.85. Twenty
percentum (20%) of this sum is P384,110.97, which is the contingent fee due to
the appellee, apart from the litis expensae already paid to him. Inasmuch as the
appellee has collected, also, the sum of P80,000.00, on account of said contingent
fees, there results in his favor a balance of P304,110.97.

Subject to this qualification, the decision appealed from is hereby affirmed,

therefore, with costs against the appellants. So ordered.