FACTS: A certain Celedonio Javier bought seven (7) parcels of
land owned by Eustaquio Alejandro, et al., with a total area of about ten (10)
hectares. These properties were thereafter mortgaged by Javier with the
petitioner to secure a loan obligation of one Felix Angelo Bautista and/or
International Hotel Corporation. During the pendency of these suits that these
parcels of land were sold by petitioner to its sister corporation, Service
Leasing Corporation and on the same day, the properties were resold by the
latter to Herby Commercial and Construction Corporation. Three months later,
mortgaged the same properties with Banco de Oro wherein the lower court found
that private respondent, did not have knowledge of these transfers and
transactions. Petitioner filed
an urgent motion for substitution of party as a consequence of the transfer of
said parcels of land to Service Leasing Corporation. Private respondent, on its
part, filed a verified motion to enter in the records of the aforesaid civil
cases its charging lien, pursuant to Section 37, Rule 138 of the Rules of
Court, equivalent to twenty-five percent (25%) of the actual and current market
values of the litigated properties as its attorney's fees. Despite due notice,
petitioner failed to appear and oppose said motion, as a result of which the
lower court granted the same and ordered the, Register of Deeds of Rizal to
annotate the attorney's liens on the certificates of title of the parcels of
land.
Private respondent
filed a motion to fix its attorney's fees, based on quantum meruit, which motion precipitated an exchange of
arguments between the parties. On May 30, 1984, petitioner manifested that it
had fully paid private respondent; the latter, in turn, countered that the
amount of P50,000.00 given by petitioner could not be considered as full
payment but merely a cash advance, including the amount of P14,000.00 paid to
it on December 15, 1980. It further appears that private respondent attempted
to arrange a compromise with petitioner in order to avoid suit, offering a
compromise amount of P600,000.00 but the negotiations were unsuccessful.
ISSUES:
1. Whether or
not private respondent is entitled to the enforcement of its charging lien for
payment of its attorney's fee.
2. Whether or not a separate civil suit is
necessary for the enforcement of such lien.
3. Whether or not private respondent is
entitled to twenty-five (25%) of the actual and current market values of the
litigated properties on a quantum
meruit basis.
HELD:
1. NO. On the matter of attorney's liens Section 37,
Rule 138 provides: He shall also have a lien to the same extent upon all
judgments for the payment of money, and executions issued in pursuance of such
judgments, which he has secured in a litigation of his client, from and after
the time when he shall have caused a statement of his claim of such lien to be
entered upon the records of the court rendering such judgment, or issuing such
execution, and shall have caused written notice thereof to be delivered to his
client and to the adverse party; and he shall have the same right and power
over such judgments and executions as his client would have to enforce his lien
and secure the payment of his just fees and disbursements. Consequent to such
provision, a charging lien, to be enforceable as security for the payment of
attorney's fees, requires as a condition sine
qua non a judgment for money and execution in pursuance of such judgment
secured in the main action by the attorney in favor of his client. A lawyer may
enforce his right to fees by filing the necessary petition as an incident in
the main action in which his services were rendered when something is due his
client in the action from which the fee is to be paid. The civil cases below
were dismissed upon the initiative of the plaintiffs "in view of the frill
satisfaction of their claims."
2. NOT NECESSARY.
At this juncture an enforceable charging lien, duly recorded, is within the
jurisdiction of the court trying the main case and this jurisdiction subsists
until the lien is settled. Court trying main case will determine attorney’s
fees.
3. The Court
refused to resolve issue but gave the elements to be considered in fixing a
reasonable compensation for the services rendered by a lawyer on the basis of
quantum meruit. These are:
(1) the importance of the subject matter in controvers
(2) the extent of the services rendered, and
(1) the importance of the subject matter in controvers
(2) the extent of the services rendered, and
(3) the
professional standing of the lawyer
order of the trial court is hereby
REVERSED and SET.
ACCORDINGLY, the instant petition for review is hereby
GRANTED and the decision of respondent Court of Appeals of February 11, 1988
affirming the order of the trial court is hereby REVERSED and SET ASIDE,
without prejudice to such appropriate proceedings as may be brought by private
respondent to establish its right to attorney's fees and the amount thereof.
