Attorney's fees may be fixed by courts
The courts cannot take judicial notice of the attorney's fees being claimed by
petitioner because although 10% was the rate agreed upon by the parties, it has been, in a line of cases, held that the percentage to be charged can still be
fixed by the Court. For instance, in Mambulao Lumber Company v.
Philippine National Bank,[65] the Court held:
Similarly, in Bank of the Philippine Islands, Inc. v. Spouses Norman and
Angelina Yu,[66] the Supreme Court reduced the claim for attorney's fees from 10%
to 1% based on the following reasons: (1) attorney's fee is not essential to
the cost of borrowing, but a mere incident of collection; (2) 1% is just and
adequate because the mortgagee bank had already charged foreclosure expenses;
(3) attorney's fee of 10% of the total amount due is onerous considering the
rote effort that goes into extrajudicial foreclosures.
In determining the compensation of an attorney, the following circumstances should be considered: the amount and character of the services rendered; the responsibility imposed; the amount of money or the value of the property affected by the controversy, or involved in the employment; the skill and experience called for in the performance of the service; the professional standing of the attorney; the results secured; and whether or not the fee is contingent or absolute, it being a recognized rule that an attorney may properly charge a much larger fee when it is to be contingent than when it is not. From the stipulation in the mortgage contract earlier quoted, it appears that the agreed fee is 10% of the total indebtedness, irrespective of the manner the foreclosure of the mortgage is to be effected. The agreement is perhaps fair enough in case the foreclosure proceedings is prosecuted judicially but, surely, it is unreasonable when, as in this case, the mortgage was foreclosed extra-judicially, and all that the attorney did was to file a petition for foreclosure with the sheriff concerned. x x x (emphasis added)
Similarly, in Bank of the Philippine Islands, Inc. v. Spouses Norman and
Angelina Yu,[66] the Supreme Court reduced the claim for attorney's fees from 10%
to 1% based on the following reasons: (1) attorney's fee is not essential to
the cost of borrowing, but a mere incident of collection; (2) 1% is just and
adequate because the mortgagee bank had already charged foreclosure expenses;
(3) attorney's fee of 10% of the total amount due is onerous considering the
rote effort that goes into extrajudicial foreclosures.
