G.R. No. L-17115 - Guevarra vs. Gimenez

Petitioner Guillermo B. Guevara, a member of the Philippine bar and practicing lawyer, was engaged by the Central Bank on or about September 1, 1959.
The engagement was made at the request of then-Governor Miguel Cuaderno, who sought legal assistance to defend the Central Bank and its Monetary Board in Civil Case No. 41226, filed by R. Marino Corpus.
Under Resolution No. 1283 of the Monetary Board dated September 8, 1959, the Governor was empowered to designate Guevara as counsel and to agree on a fee arrangement for his services.

Governor Cuaderno accepted the proposal as to the retainer fee and the per diem, effective from the date of the petitioner's appearance in the case.
Petitioner rendered his legal services by appearing on several dates (spanning from September 1959 to March 1960) and filing motions and legal submissions (e.g., Motion to Dismiss, Amended Complaint, Respondents’ Rejoinder, and additional legal arguments).

Prior to the dismissal of the case on June 14, 1960, petitioner had already sent his bill for the retainer fee on January 10, 1960.
The Bank Auditor, seeking guidance on the bill, received a communication from the Auditor General dated June 10, 1960.

The Auditor General conditionally approved the retainer fee provided that it be paid in installments:

P3,000 after filing the answer to the petition.
P3,000 after the Court of First Instance’s decision.
P2,000 after filing briefs in case of appeal.
P2,000 upon final termination of the case, with the possibility of full payment if there was no appeal.

With respect to the P300 per diem fee, the Auditor General expressed reservations, deeming it "excessive" and possibly inadmissible for audit.

Petitioner filed an original action for mandamus on July 6, 1960, seeking to compel the Auditor General and the Bank Auditor to approve and pass in audit:

That P6,000 had already been paid on account of the retainer fee.
The legality of the contract entered into by the Central Bank was questionable, as the Bank did not have the authority to engage petitioner in this manner.
That the appropriate remedy would have been to appeal the respondents’ prior action instead of seeking a writ of mandamus.

Notably, the respondents’ arguments were internally inconsistent, as they simultaneously attacked the contract’s legality and acknowledged partial performance by confirming the payment of P6,000.

Earlier, on September 19, 1959, Secretary of Justice Pedro Tuason had opined that the Central Bank, enjoying a special charter and distinct personality, possessed the inherent power to employ attorneys and compensate them at terms deemed reasonable by its Monetary Board.
The petitioner's services were clearly for the benefit of the Central Bank (and not under the direct representation of the Solicitor General), thereby distinguishing his engagement from those contemplated by Section 1664 of the Revised Administrative Code.

Whether the contract between the petitioner and the Central Bank for legal services was valid and enforceable.

The determination of contractual validity in light of partial performance and the subsequent approval of payment installments by the Auditor General.
The legal authority of the Central Bank to retain private legal counsel for its defense, given its distinct status under a special charter.

The extent and nature of the Auditor General’s duty in approving and passing in audit payments once a contract has been duly executed.

Whether his duty is discretionary or ministerial once all requirements—such as appropriation, delivery of service, and proper attestation—have been met.
Whether the stated reservations regarding the reasonableness of the per diem fee affect his duty to approve the payments.

Whether this section, governing the employment of attorneys by the government (under the direction of the Solicitor General), can be invoked to challenge the contract with the Central Bank.
Whether the distinct personality and inherent powers of the Central Bank exclude it from the typical constraints applicable to government agencies.