Municipality Of Tiwi V Betito.docx

Municipality of Tiwi v Antonio Betito G.R. No. 171873; 07/09/2010; Del Castillo, J

SUMMARY: In an earlier case of National Power Corporation v. Province of Albay, the SC issued a decision finding NPC liable for unpaid real estate taxes from June 11, 1984 to March 10, 1987 on its properties located in Albay. These properties consisted of geothermal plants in the Municipality of Tiwi. Thus, Tiwi has a share in the taxes. NPC requested for clarification from Office of the President to regarding extent of LGU shares in the taxes. Sangguniang Bayan of Tiwi passed Resolution No. 15-92 authorizing Mayor Corral to hire a lawyer to represent Tiwi in the recovery of their rightful share in the aforesaid realty taxes. It hired the services of respondent Atty. Betito and Atty Lawenko. entered into a Contract of Legal Services which provided that Betito and Lawenko would receive a 10% contingent fee on whatever amount of realty taxes that would be recovered by Tiwi through their efforts. OP later on clarified that NPC may remit such share to Tiwi directly. Before such clarification, earlier payments have already been made to Albay amounted to more than P40M. From Albay’s refusal to remit Tiwi’s share in the P40M stemmed several administrative complaints and court cases that respondent allegedly handled on behalf of Tiwi to recover the latter’s rightful share in the unpaid realty taxes. The present controversy arose when respondent sought to enforce the Contract of Legal Services after rendering the aforementioned legal services which allegedly benefited Tiwi. Respondent claims that he handled numerous cases which resulted to the recovery of Tiwi’s share in the realty taxes. As a result of these efforts, Tiwi was able to collect the around ₱110M and another ₱35M from the NPC as well as other amounts to be proven during the trial. RTC rendered a partial judgment in favor of Betito, with trial to receive evidence on remaining amounts. CA affirmed. Issue before the SC is whether the award attorney’s fees to respondent is unreasonable. The SC found the petition meritorious. It ruled as follows 1. Then Mayor Corral was authorized to enter into the Contract of Legal Services- It is indicated in Sec 444 (b)(1)(vi) of the LGC. Pursuant to this provision, the municipal mayor is required to secure the prior authorization of the Sangguniang Bayan before entering into a contract on behalf of the municipality. In the instant case, the Sangguniang Bayan of Tiwi unanimously passed Resolution No. 15-92. 2. The legal services contemplated in Resolution No. 15-92 was limited to such services which reasonably contributed to the recovery of Tiwi’s rightful share in the unpaid realty taxes of NPC- wording of Resolution No. 15-92 is clear. Its title and whereas clauses, indicate that the hiring of a lawyer was for the sole purpose of executing the judgment in NPC v. Province of Albay, that is, to allow Tiwi to recover its rightful share in the unpaid realty taxes of NPC. There is a municipal legal officer that performs general legal services so no need for the respondent on that aspect. 3. The issue of the reasonable legal fees due to respondent still needs to be resolved in a trial on the merits.respondent, by his own admission, concedes the immense importance of the OP clarification to the eventual recovery of the unpaid realty taxes. However, respondent never asserted the degree of his participation in the crafting or issuance of this opinion. It is evident, therefore, that the recovery of the realty taxes is not solely attributable to the efforts of respondent. Thus respondent cannot claim 10% of all alleged services rendered. Petition Granted DOCTRINE#1 Judgment on the pleadings is improper when the answer to the complaint tenders several issues. When it appears that not all the material allegations of the complaint were admitted in the answer for some of them were either denied or disputed, and the defendant has set up certain special defenses which, if proven, would have the effect of nullifying plaintiff’s main cause of action, judgment on the pleadings cannot be rendered DOCTRINE#2 Municipal Mayor shall, upon authorization by the sangguniang bayan, represent the municipality in all its business transactions and sign on its behalf all bonds, contracts, and obligations, and such other documents made pursuant to law or ordinance