Primitivo Sato vs Simeon Rallos

G.R. No. L-17194 – 12 SCRA 84 – Legal Ethics – Legal Profession – Attorney’s Fees – Services of a Lawyer-Politician

In 1949, the testate estate of Numeriana Rallos owes the government a tax liability amounting to P130k. Simeon Rallos, the administrator of the said estate, was assisted by Atty. Primitivo Sato in compromising the said tax liability with the Collector of Internal Revenue. Eventually, the tax liability was lowered to P22k.

Sato then demanded the payment of his attorney’s fees but Rallos refused to pay. Sato then filed a collection suit against Rallos as the administrator of the said estate. In the complaint, Sato demanded that according to their verbal agreement, Rallos was supposed to pay a contingent fee of P20k plus an additional one hectare land.

Rallos denied any agreement as he claimed that Sato, then the Congressman of Cebu, voluntarily offered his services to Rallos and that Sato was assisting him not as a lawyer but as a politician. Rallos also alleged that he does not need the services of Sato as a lawyer because he already has other lawyers assisting him at that time. However, he cannot refuse the offer of help made by Sato to him since it was a generous offer.

Rallos also assail the complaint filed against him to be procedurally infirm. He avers that the complaint should not have been filed against him in his capacity as an administrator because by that time he’s no longer an administrator because the estate was already distributed to the heirs.

ISSUE: Whether or not Sato is entitled to attorney’s fees.

HELD: Yes. There is no factual proof of the allegation that Sato offered his help as a politician and not as a lawyer. But the undisputed fact is that Sato’s services to Rallos greatly lowered the tax liability from P130k to P22k. It is certain that Rallos benefited from Sato’s service. Rallos even admitted that he accepted the services of Sato, albeit his claim that he cannot refuse the offer. But the fact is, Sato actualy rendered legal services and Rallos benefited.

Anent the issue of procedural infirmity, the Supreme Court ruled that in the spirit of the principle “no one can unjustly enrich himself at the expense of another,” Sato should be allowed to collect attorney’s fees.

However, the attorney’s fees to be collected should be the reasonable compensation (also considering that the agreement between Sato and Rallos was merely verbal). Hence, instead of collecting P20k plus the one hectare land, Sato may only collect from Rallos. Rallos can however claim proportionate contribution from the other heirs.

Read full text.