Polytrade Corporation vs Victoriano Blanco

G.R. No. L-27033 – 140 Phil. 604 – 30 SCRA 187 – Legal Ethics – Two Concepts of Attorney’s Fees 

Blanco was sued by Polytrade for damages as he failed to pay a delivery of rawhide (to be converted to leather and leather products). For failing to answer the suit, he was declared in default and among those awarded in favor of Polytrade Corporation is attorney’s fee of P51, which is equivalent to 25% of the principal indebtedness of Blanco to Polytrade. Blanco now claims that said judgment against him is exorbitant and unconscionable.

ISSUE: Whether or not Blanco is correct.

HELD: No. This case would have never reached the courts had Blanco been current with his obligation to Polytrade. He never raised any defense as he did not file an answer. Bottom line is, the case could have been easily avoided without Polytrade having to go to trial.

The attorney’s fees were awarded in favor of Polytrade and not its counsel. Such an arrangement is not illegal. It is the litigant, not counsel, who is the judgment creditor entitled to enforce the judgment by execution. Further, Polytrade may have spent much for its counsel considering its counsel’s high standing.

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