G.R. No. 116909 February 25, 1999.
VIVENCIO M. RUIZ, EMILIO D. CASTELLANES and BLAS A. MIRANDA, petitioners, vs. THE COURT OF APPEALS, PEDRO V. GARCIA as presented by his legal representative, MA. LUISA G. MAGPAYO, respondents.

FACTS

The late Pedro V. Garcia, a businessman with substantial shareholdings in V.C. Ponce Co., Inc., engaged the legal services of petitioners Attys. Vivencio M. Ruiz and Emilio D. Castellanes through a “Contract of Retainership” dated March 10, 1977. The contract stipulated that in consideration for their legal services in handling cases related to Garcia’s 370,000 shares of stock in the company, petitioners were assigned fifteen percent (15%) of those shares and other recoverable assets, plus a yearly retainership fee of P24,000. On July 22, 1982, Garcia unilaterally terminated the contract. Petitioners withdrew as counsel and moved to record their attorney’s lien in the involved cases. On February 9, 1984, petitioners filed an action “For Collection of Sum of Money and for Specific Performance” (Civil Case No. 6465) before the Regional Trial Court of Makati. While the case was pending, Pedro V. Garcia died on September 27, 1990. Counsel for Garcia moved to dismiss the complaint pursuant to Section 21, Rule 3 of the 1964 Rules of Court. The trial court granted the motion to dismiss, ruling that the action was for recovery of money or interest in a recovery and did not survive the defendant’s death before final judgment. The Court of Appeals affirmed the dismissal. Petitioners elevated the case to the Supreme Court, arguing that their action, which involved a claim over real properties litigated in the cases they handled, was one that survived the death of the client.

ISSUE

Whether the action for collection of attorney’s fees and specific performance survives the death of the defendant-client, Pedro V. Garcia, before final judgment, pursuant to Section 21, Rule 3 of the 1964 Rules of Court.

RULING

No, the action does not survive. The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the action was essentially for the recovery of attorney’s fees, which is a monetary claim arising from a contract for professional services. Applying Section 21, Rule 3 of the 1964 Rules of Court (which governed as the case was decided under the old rule), an action for recovery of money, debt, or interest thereon does not survive if the defendant dies before final judgment in the Court of First Instance (Regional Trial Court). The Court rejected petitioners’ argument that the inclusion of real properties in the claim converted the action into one that survives. The nature of the action is determined not by the object or kind of property sought but by the cause of action itself. Here, the action was in personam—a personal action to recover compensation (attorney’s fees) for services rendered, founded on a personal obligation. Following the test in Bonilla vs. Barcena, such an action, where the wrong affects primarily property rights and the injury to the person is merely incidental, does not survive. The action was therefore properly dismissed, and petitioners’ claim should be prosecuted as a money claim against the estate of the deceased.