G.R. No. 194814 & G.R. No. 194825. October 21, 2015.
ROSARIO ENRIQUEZ VDA. DE SANTIAGO, Petitioner, vs. ATTY. JOSE A. SUING, Respondent.

JAIME C. VISTAR, Petitioner, vs. ATTY. JOSE A. SUING, Respondent.

FACTS

Respondent Atty. Jose A. Suing served as counsel for the plaintiff in Civil Case No. 59439, a complaint for reconveyance of 91 parcels of land from GSIS, filed before the RTC of Pasig. The original plaintiff, Eduardo M. Santiago, passed away and was substituted by his widow, petitioner Rosario Enriquez Vda. de Santiago. On May 8, 1996, Rosario entered into a Memorandum of Understanding (MOU) with Atty. Suing, Atty. Roberto R. Reverente, and Atty. Wellington B. Lachica. The MOU stipulated that the lawyers would render legal services on a contingency basis, with no acceptance or advance fees except out-of-pocket expenses. It further provided that in the event of a favorable final and executory judgment, Rosario would share the net proceeds as follows: 35% to Atty. Suing and Atty. Reverente, and 30% to Atty. Lachica. This net sharing was agreed to be constituted as an attorney’s lien on the properties awarded.
On December 17, 1997, the RTC rendered judgment ordering GSIS to reconvey 78 parcels to Rosario or pay their fair market value. This decision was affirmed by the Court of Appeals and subsequently by the Supreme Court in G.R. No. 155206 , which became final and executory. Rosario, through Atty. Suing, filed a motion for execution. The RTC granted the motion and issued a writ of execution and notices of garnishment. GSIS assailed the orders before the Court of Appeals in CA-G.R. SP No. 84079. In a Decision dated August 3, 2006, the Court of Appeals allowed partial execution for the sum of P399,828,000.00.
Meanwhile, on April 26, 2006, Atty. Suing filed a Notice of Attorney’s Lien before the RTC, praying for the satisfaction of the 35% contingent fee from the net proceeds. Rosario, in a letter dated May 29, 2006, expressed dismay, deemed the fees excessive, and discharged Atty. Suing and Atty. Reverente as her counsels. She filed a Notice of Discharge of Counsel on June 1, 2006. Atty. Suing opposed the discharge. New counsels for Rosario filed their Notice of Appearance.
Atty. Suing then filed a “Motion to Direct the Sheriff to Proceed with the Execution of Garnished Funds… with Motion for Immediate Execution of Undersigned Counsel’s Attorney’s Lien.” Rosario opposed, praying that Atty. Suing be required to prove the fees on quantum meruit. Other lawyers who previously represented Rosario also filed claims for attorney’s fees.
In an Order dated September 12, 2006, the RTC directed the enforcement of the writ of execution, ordering that 10% of the proceeds (P39,982,800.00) be turned over to the court to await disposition of the various lawyers’ claims, and the 90% be given immediately to Rosario. In a subsequent Order dated November 20, 2006, the RTC affirmed its ruling and distributed the 10% fund, awarding 60% of it (or P23,989,680.00) to Atty. Suing and Atty. Reverente.
Atty. Suing filed a petition for certiorari before the Court of Appeals (CA-G.R. SP No. 97807) assailing the RTC Orders. In an Amended Decision dated June 4, 2010, the Court of Appeals granted the petition, setting aside the RTC Orders. The appellate court held that the contingent fee agreement was valid and that the attorney’s lien attached to the judgment award. It ordered the RTC to compute and satisfy Atty. Suing’s lien based on the 35% contingent fee from the net proceeds of the judgment, after deducting legitimate expenses. The Court of Appeals denied the motions for reconsideration filed by Rosario and another claimant, Jaime C. Vistar. Hence, these consolidated petitions for review.

ISSUE

The core issue is whether the Court of Appeals erred in upholding the validity of the contingent fee agreement (the MOU) and ordering the enforcement of Atty. Suing’s attorney’s lien for 35% of the net proceeds from the judgment award, thereby setting aside the RTC’s orders which allocated only a portion of the proceeds (10% of a partial execution amount) for attorney’s fees and distributed a fraction of that to Atty. Suing.

RULING

The Supreme Court DENIED the petitions and AFFIRMED the Amended Decision of the Court of Appeals. The Court held that the contingent fee agreement embodied in the MOU was valid. A lawyer’s compensation is primarily governed by the contract with the client. The MOU clearly stipulated a 35% contingent fee for Atty. Suing and Atty. Reverente, which was not unconscionable given the nature and extent of the services rendered over a decade, which resulted in a favorable final judgment. The attorney’s lien, being a charging lien, attached to the judgment award and the proceeds thereof. The RTC erred in effectively reducing the contingent fee by allocating only 10% of a partial execution amount for all attorney’s claims and distributing only a portion of that to Atty. Suing. The proper remedy was to enforce the lien according to the contract. The Court of Appeals correctly ordered the RTC to compute and satisfy Atty. Suing’s lien based on the stipulated 35% of the net proceeds from the judgment, after deducting legitimate expenses. The discharge of Atty. Suing by Rosario did not negate his right to the full contingent fee, as the success of the case was already secured under his representation.