Spec Pro Class 2020

Facts:

 

The law firm Araneta & Araneta, through its assistant, Atty. Francisco T. Papa, had rendered services, as counsel for the appellee, in connection with

1. The approval of his accounts for January to March, 1956, which were objected to by the appellant. Said objection was, on October 19, 1956, overruled by the lower court, the action of which was affirmed by this Court in G.R. No. L-11788, on May 16, 1958, on appeal taken by appellant.

2. The appellee's accounts for April to June, 1957; which were approved by the lower court on July 13, 1957, despite appellant's objection thereto. Although appellant appealed to the Supreme Court, he, subsequently, withdrew the appeal.

3. In 1958, appellant instituted CA-G.R. No. 22810-R of the Court of Appeals for a writ of certiorari and mandamus against the appellee and the lower court, the latter having sustained the action of the appellee in withholding certain sums from the shares of the minors aforementioned in the net income of the trust estate for July to September, 1957, in view of the appellant's refusal to reimburse to said estate identical sums received in the form of allowances for the period from April to June, 1957, in excess of the shares of said minors in the net income for that period. After appropriate proceedings, the Court of Appeals rendered a decision on June 25, 1958, dismissing said petition.

​

The lower court authorized the payment of P5,500.00 for the services thus rendered by Araneta & Araneta, which appellant assails upon the ground that, the executor or administrator is an attorney so he shall not charge against the estate any professional fees for legal services rendered by him; that the services above referred to inured to the benefit, not of the trust estate, but of the trustee; that the amount of the award is excessive; and that the lower court should have required the introduction of evidence on the extent of the services rendered by the aforementioned law firm before making said award.

​

Issue:

 

Whether or not the trustee, J. Antonio Araneta — hereinafter referred to as the appellee — may be allowed to pay a sum of money to the law firm, Araneta & Araneta, of which he is a member, for services rendered to him, in his aforementioned capacity as such trustee, in several judicial proceedings.

 

Ruling:

 

The Supreme Court through Justice Concepcion, “We believe it, therefore, to be the better policy to acknowledge the authority of courts of justice to exercise a sound judgment in determining, in the light of the peculiar circumstances obtaining in each case, whether or not a trustee shall be allowed to pay attorney's fees and charge the same against the trust estate, independently of his compensation as a trustee.”

 

In the case at bar, considering that the appellee was merely defending himself in the proceedings that required the services of counsel; that in each case the stand taken by the appellee was upheld by the court; that the will creating the trust and designating the appellee as trustee explicitly grants him the right to collect for his services such reasonable fees; that, in view of the nature of the relations between the trustor and the trustee, on the one hand, and the trustor and appellant on the other, there can be little doubt but that the trustor would have sanctioned the payment of the attorney's fees involved in this incident; and that it may have been more costly for the trust estate to engage the services of a law firm other than that of Araneta & Araneta, we are not prepared to hold that the lower court has erred in authorizing the payment of said attorney's fees by herein appellee.