Attorney's Fees for Administrators Who Also Serve as Counsel in Estate Disputes

The Supreme Court has clarified a question that often arises in estate practice: when the person administering an estate is also a lawyer, and that lawyer represents the heir in a separate dispute over the inheritance, may he be paid attorney's fees on top of his compensation as administrator? In Bermudo v. Tayag-Roxas (G.R. No. 172879, February 2, 2011), the Court answered yes — provided the legal work went beyond the ordinary duties of an administrator.

The facts of the case

Atty. Ricardo Bermudo filed a petition to probate the will of Artemio Hilario and to be appointed administrator of the estate. The testator had named Fermina Tayag-Roxas as his only heir, but several persons claiming to be relatives of the deceased opposed the petition.

The Regional Trial Court allowed the will and recognized Roxas as sole heir. The Court of Appeals affirmed, and the Supreme Court sustained that ruling in 1992. Throughout these proceedings, Atty. Bermudo also served as Roxas's counsel.

Once the heir's right to inherit became final, Atty. Bermudo moved to fix his legal fees and to constitute a charging lien on the estate. The RTC awarded him fees equal to 20% of the estate. On appeal, the Court of Appeals limited his compensation as administrator under Section 7, Rule 85 of the Rules of Court and fixed his attorney's fees at 20% of the value of the estate's land.

After the case was remanded, the RTC valued the estate at P12,644,300.00 and ordered Roxas to pay that amount as attorney's fees, with 6% interest per annum. The Court of Appeals later reduced the award to P4,234,770.00, using a different valuation of the land. Both parties elevated the matter to the Supreme Court.

The remedy: appeal or certiorari?

Atty. Bermudo argued that Roxas should have appealed the RTC's execution order, not filed a petition for certiorari. He cited Section 1, Rule 109 of the Rules of Court, which allows appeals from certain orders in special proceedings, including an order settling the account of an executor or administrator.

The Supreme Court disagreed. The award in Atty. Bermudo's favor did not settle his account as administrator. It fixed his attorney's fees for legal services rendered in the suit contesting Roxas's right as sole heir. Thus, Section 1(d) of Rule 109 did not apply.

More importantly, the Court of Appeals had already decided the award of attorney's fees with finality in the earlier case. When the RTC later determined what amounted to 20% of the value of the estate's lands, it was merely implementing a final judgment. An order of execution is not appealable. The proper remedy, therefore, was a special civil action of certiorari.

Attorney's fees separate from administrator's compensation

Roxas contended that Atty. Bermudo was entitled only to compensation as administrator under Section 7, Rule 85 of the Rules of Court.

The Court rejected this argument. Atty. Bermudo did not merely administer the estate; he also acted as Roxas's counsel in the suit that challenged her right as sole heir. He pursued that contest all the way to the Supreme Court and succeeded in defending her inheritance. Representing Roxas in that suit was not part of his duties as administrator. It was therefore just that he be paid attorney's fees for that separate service.

The Court also stressed that his right to attorney's fees had already been settled with finality in the earlier Court of Appeals case. Roxas could no longer raise the argument that he was not entitled to such fees.

How the fees were computed

Atty. Bermudo questioned the reduction of his fees from P12,644,300.00 to P4,234,770.00. The RTC had relied on an amicus curiae's advice on the value of the estate's lands. The Court of Appeals found this procedure unwarranted and instead used the values established by the Angeles City Assessor.

The Supreme Court upheld the Court of Appeals. It found no compelling reason to deviate from the lower court's ruling. Citing Francisco v. Matias (119 Phil. 351, 1964), the Court noted that given their wide experience and the official nature of their work, city assessors' opinions deserve great weight and reliability. The computation based on the assessor's market values was therefore sustained.

Practical takeaways

• A lawyer who administers an estate may be entitled to attorney's fees for legal services rendered to an heir in a separate inheritance dispute, in addition to compensation as administrator under Section 7, Rule 85 of the Rules of Court.
• The key question is whether the legal work formed part of the administrator's ordinary duties. If it did not, separate attorney's fees may be justified.
• Once an award of attorney's fees becomes final, it can no longer be collaterally attacked. The remaining issue is only its implementation.
• An order of execution is generally not appealable; the proper remedy to challenge the manner of its implementation is a petition for certiorari.
• In valuing estate property for purposes of computing fees, courts may rely on official assessments, such as those of the city assessor, which carry great weight.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.