Facts:

• The case involves Radiowealth Finance Co., Inc. and Radiowealth, Inc. (petitioners) against International Corporate Bank (Interbank) (respondent).
• In 1978, the petitioners applied for credit facilities from Interbank, with Domingo M. Guevara and D.M.G., Inc. as sureties.
• Obligations were documented through promissory notes, trust receipts, and continuing surety agreements, stipulating that in case of default, the petitioners would pay reasonable attorney's fees and collection costs, not less than 10% of the value involved.
• From 1978 to 1980, the petitioners failed to meet their obligations and sought loan restructuring, but negotiations with Interbank were unsuccessful.
• Interbank filed two complaints in December 1979 and January 1980 for collection of sums owed, totaling P1,585,933.61 and P2,113,444.58.
• The petitioners did not respond to these complaints and later entered into a compromise agreement with Interbank, which did not address attorney's fees.
• The trial court approved the compromise but reserved the issue of attorney's fees for further negotiation.
• The court reduced Interbank's claim for attorney's fees from 10% to 8%.
• Dissatisfied, the petitioners appealed to the Court of Appeals, which affirmed the trial court's order.
• The petitioners subsequently filed a petition for review on certiorari with the Supreme Court, raising issues regarding the reasonableness of the attorney's fees awarded.

Issue:

• (Unlock)

Ruling:

• The Supreme Court affirmed the decision of the Court of Appeals, upholding the trial court's order that awarded attorney's fees equi...(Unlock)

Ratio:

• The Court determined that the reasonableness of attorney's fees can be a question of law when the underlying facts are undisputed.
• The trial court's reduction of attorney's fees from 10% to 8% was deemed reasonable under the circumstances.
• The Court emphasized that stipulated attorney's fees can be modified by courts if foun...continue reading