G.R. No. 207675 , January 20, 2021
RAMON JACINTO, PETITIONER, VS. ATTY. BENEDICT LITONJUA AND ATTY. JOSE MA. ROSENDO A. SOLIS, RESPONDENTS.

FACTS

Petitioner Ramon Jacinto and Marilene Jacinto are legitimate children of the deceased Spouses Fernando and Bernardina Jacinto. Ramon filed an action for annulment of sale and mortgage with damages and injunction against Equitable PCI Bank (EPCIB) and Forward Properties, Inc. (FPI) before the RTC of Baguio City (Civil Case No. 5751-R) to recover properties fraudulently alienated to FPI and mortgaged to EPCIB. Marilene, as administratrix of the Spouses Jacinto’s estate, intervened in the case, represented by respondents Atty. Benedict Litonjua and Atty. Jose Ma. Rosendo A. Solis. In her complaint-in-intervention, Marilene prayed for, among others, an award of attorney’s fees. The RTC Baguio ruled in favor of the Jacinto siblings, declaring the deed of sale, mortgage, and foreclosure sale void, and ordered the defendants to jointly and severally pay the plaintiff and intervenor attorney’s fees of One Hundred Thousand Pesos (P100,000.00). Only EPCIB appealed to the Court of Appeals (CA). During the pendency of the appeal, Ramon and EPCIB entered into a Compromise Agreement, which recognized EPCIB’s absolute ownership of the disputed properties and involved mutual waivers of claims. Ramon signed the agreement in three capacities: as President of FPI, as Administrator of the Estate of the Spouses Jacinto, and as Complainant in the civil case. Respondents filed a Notice of Attorney’s Lien before the RTC Baguio, claiming contingent attorney’s fees based on their engagement contract with Marilene, and opposed the Compromise Agreement for failing to include their lien. The CA initially approved the Compromise Agreement but denied respondents’ claim for attorney’s fees. Upon respondents’ motion for partial reconsideration, the CA issued an Amended Decision modifying its earlier resolution, ordering Ramon and EPCIB to disclose the amount of the amicable settlement and thereafter ordering Ramon to pay respondents 25% of that amount. Ramon’s motion for reconsideration was denied, prompting this Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals correctly allowed the respondents’ claim for attorney’s fees to be charged against the amicable settlement amount.

RULING

No. The Supreme Court granted the petition and reversed the assailed Amended Decision and Resolution of the Court of Appeals. The Court held that respondents’ claim for attorney’s fees based on a charging lien under Section 37, Rule 138 of the Rules of Court was not tenable. A charging lien attaches only to a judgment for money and is enforceable only upon execution. The Compromise Agreement, which was a mutual concession and did not involve a monetary award to the estate, did not constitute a “judgment for money” to which a charging lien could attach. Furthermore, the attorney’s fees claimed by respondents were not part of the court-approved Compromise Agreement, and the RTC Baguio’s judgment, which awarded a specific sum of P100,000.00 as attorney’s fees, had already become final and executory as to the intervenor Marilene, who did not appeal. Respondents, as her counsel, were bound by this final judgment. The Court also found that the Compromise Agreement did not unjustly enrich Ramon at the expense of respondents, as the settlement was a product of mutual concessions and did not yield a monetary recovery for the estate. Therefore, respondents were not entitled to the 25% contingent fee they claimed.