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[ARSENIO R. REYES v. MARCIAL DE LA CRUZ](https://www.lawyerly.ph/juris/view/c2dcd?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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[ GR No. L-12729, Mar 30, 1959 ]

ARSENIO R. REYES v. MARCIAL DE LA CRUZ +

DECISION

105 Phil. 372

[ G.R. No. L-12729, March 30, 1959 ]

ARSENIO R. REYES, PLAINTIFF AND APPELLANT, VS. MARCIAL DE LA CRUZ, ET AL., DEFENDANTS AND APPELLEES.

D E C I S I O N

MONTEMAYOR, J.:

This is an  appeal by  Atty. Arsenio R. Reyes, plaintiff from the decision of the  Court of First Instance of Manila, Judge Bonifacio Ysip presiding,  in Civil Case No.  20670, ordering  among  other  things that  defendants-appellees pay to plaintiff-appellant an amount  equivalent to 5  per cent of the  amount adjudicated to each of them, from the estate to which they were  some of the heirs, based  not on  the market value  but on the  assessed  value of  the property  appearing  on the project of partition  and  distribution, with legal interest from the date of the  filing of the complaint, and  the  payment of their  proportionate shares of the costs.

Marcial,  Asuncion,  Eugenio,  Lucia,  and  Alfonso,  all surnamed de la Cruz, are some of the heirs of the  deceased Anselmo  S. Hilario.   The five  aforementioned heirs,  on September  26,  1950,  entered into  a  contract of services with  plaintiff  Reyes, the pertinent portions  of which  are reproduced below:
"We are hiring your services to represent us in Special Proceeding No. 7501, Court of First  Instance, Manila,  in such a way that we will be given all the due  share arising out  of the  will and  of the law.   You  will  exercise all duties of an attorney to preserve and defend our rights until  the project of partition is approved  by the court.

"For and in  consideration  of the services which you  are going to render to us in the said case we will pay you 5 per cent  of the amount adjudicated to  us.  You will not be  paid in cash  by us for  the time being that  the case  is pending in court.  We have no money  to pay.  You will only  be paid  of your services when the  case is terminated and our respective shares are delivered to us by order of court."   (Exhibit  A).
At  the time  this contract was  entered into,  the probate court had already ordered partition.   It seems,  however, that  there was delay in its execution  and implementation and the main purpose of hiring Atty. Reyes and the services to be rendered by him was to expedite the said partition. He helped in the preparation of the  project of partition. After said project had been approved and the terms thereof had been carried out; the properties  adjudicated to each of the  said five heirs individually, were given to  them; and the properties which were to be held in common  was determined, the plaintiff filed this action to  recover  his fees,  namely,  5  per  cent of the market value of all  said properties; and P10,000 as  moral damages,  P10,000 as consequential damages, and P10,000 as attorney's fees.

The lower court denied  the prayer for  damages  and attorney's fees.  It held that the 5 per cent  mentioned in the contract for services  referred to the assessed value, not the market value,  because the  latter was  too  speculative.

Although Marcial de la Cruz was included in the complaint, he  died before  the  complaint was filed in court, and because no substitution was made of his legal representative, the trial court believed itself not to have acquired jurisdiction over his  estate, and so confined the proceedings to the  four heirs.

The main issue in this appeal  is whether the contract for services referred to the assessed  value or to the market value of the properties adjudicated to the four heirs.  We agree with  the trial court that the  5 per cent could refer only to the assessed value, for that was the only value then known to the parties to the contract, said value appearing in the inventory of the estate of the decedent. The market value of a property is, as correctly said by the lower court, too speculative.  From experience,  we know that  the determination of the actual or market value of real property is quite difficult  This difficulty is best exemplified in cases of  expropriation.   Because the parties  almost invariably cannot agree as to the market value of the property to be expropriated,   the court  appoints commissioners to  hold hearings and receive evidence, and even then, the commissioners not infrequently cannot agree among themselves. One commissioner may fix the fair market value  of the property, say at P2.00 per square meter. Another commissioner claims  that it is only P.30 per square meter, and the third  commissioner might give  a figure that falls between the estimates of his co-commissioners. Bearing this in mind, the parties  to the  contract could not have had in mind the market value of the properties  to be adjudicated to  the five  heirs, which market value was  then unknown and whose determination would be attended with difficulties and disagreements.   But there was one  value which they all knew, and that was the assessed value appearing in the inventory and  on  the  basis  of which  the partition was to be made.  That must have been the value and the only value which they agreed upon.

Moreover,  if following the  theory of the plaintiff, the contract  referred to the market value, at what time was said market value to be ascertained,  considering that real estate values fluctuate  from time to time, depending  on the need for real  estate, say  for  building purposes if urban, or for agricultural purposes if  rural,  and also upon  whether there is  plenty of  money  in circulation or not.   Was this time of the determination of the market value, the date  when  the contract  was  entered  into,  or the date  when the partition  was actually made, or the day when the plaintiff made  a demand  for  the  payment of his legal  services?   It is a well  known  fact  that the tendency of real  estate values is to  go up with the years, and  naturally if the market value  of the  properties in question was to  be ascertained not  at the time  that the contract was entered into, but on the day that the partition proceedings were terminated and  the legal services of the plaintiff were ended, then there  might,  nay,  would be a real  and substanial difference in the two values, and  it is not likely  that  the  defendants-appellees herein would have  assumed that hazard or  risk.  This,  aside  from the consideration that because of this tendency  of real estate values to  rise, if the determination of the market value is  to be made upon the termination of the partition proceedings,  then any  undue delay in the said proceedings would tend to increase said market  value and might constitute a  temptation for a lawyer   similarly situated to agree to, if  not actually work for  said  delay.

Another aspect  of  the  case  bears  consideration.   It was the plaintiff-appellant who prepared the contract for services.   Being  a lawyer, he  knew the meaning and value of every word or  phrase used in  said  contract.  If the parties,  including  himself,  really had  in mind not the assessed value but the market value, it would have been so easy for  him to have used and inserted  said phrase, "market value", in order to remove and avoid all ambiguity and uncertainty.  We  reproduce  with  favor what  the lower court  said on this point:
"It has been  proven that the plaintiff himself  was the very-person who prepared  the document, Exhibit A.  Therefore, if there is any  ambiguity or  obscurity in the  interpretation and meaning of said contract, the same "shall not favor the party who cause the obscurity" (Art. 1377 of the Civil Code corresponding to Art. 1288 of the  Spanish Civil Code of 1889) Yatco vs. El Hogar Filipino 67 Phil., 610; Calanoc vs. Phil.  American Life Insurance Co., 52 Off. Gaz., 191, 792."
The  lower court considered the  claim of plaintiff  for legal services  as exhorbitant and unconscionable.   After considering  the circumstances  in  the case, we cannot  say that the lower  court  was wrong.   The lawyer who represented the  administrator  from the very beginning and rendered legal services in connection with the administration not only  of the  properties to be adjudicated to  the defendants herein but to the whole estate, was paid only about  P30,000.  Plaintiff-appellant whose legal  services were relatively much  less may not claim fees more than what was received by  the attorney for the administration.

We understand  that plaintiff-appellant has already received  about P5,000 as his fees from the estate of Marcial de la Cruz against which he  filed  a separate case. On the basis of the assessed  value  of the properties adjudicated to the  four  remaining heirs, in the present case, which  is P149,685.69, 5  per  cent of the  same would be  almost P8,000.  If  we add this sum plus its legal interest from the filing of the  complaint  as ordered  by the  court, to the P5,000 plaintiff had received  from the estate of Marcial de la Cruz, he would have a total of  around P14,000 which  in our opinion is sufficient, even more sufficient and adequate payment for his legal services in this case.

 In view of the foregoing,  the appealed decision is hereby affirmed, with costs.

Padilla,  Reyes,  A.  Bautista Angela,  Labrador,  Reyes, J. B. L., and Endencia, JJ., concur.
Bengzon, J., concurs in the result.

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