G.R. No. 221097. September 29, 2021
AUGUSTO M. AQUINO, PETITIONER, VS. MA. ALA F. DOMINGO AND MA. MARGARITA IRENE F. DOMINGO, RESPONDENTS.

FACTS

Angel T. Domingo, father of respondents, owned a 262.2346-hectare rice land in Guimba, Nueva Ecija, placed under the agrarian reform program. The Land Bank of the Philippines (LBP) initially valued it at P2,086,735.09. Angel disagreed and verbally contracted the legal services of petitioner Atty. Augusto M. Aquino, who filed a petition for determination of just compensation before the Special Agrarian Court (SAC). The SAC fixed just compensation at P15,223,050.91, a decision ultimately affirmed by the Supreme Court. Angel died and was substituted by respondents. The LBP computed the final just compensation at P15,269,313.66, with a net balance payable of P13,182,578.57 after deducting the initial payment received.
Subsequently, petitioner filed a “Manifestation with Motion to Approve Memorandum of Agreement,” alleging the existence of a Memorandum of Agreement (MOA) between Angel, his brother Benjamin, and two other individuals (San Vicente and Gajitos) entitling the latter to a 35% commission from any increase in valuation. Attached was a “Contract for Legal Services” between petitioner and Benjamin agreeing to a 30% contingent attorney’s fee from any increase. Respondents opposed, claiming the MOA was falsified, that Angel had already paid fees, and that the claim should be filed in the settlement of Angel’s estate.
The SAC, in an Order dated April 13, 2009, initially directed the release of 35% of the balance (P4,613,902.49) to petitioner and his alleged collaborators. In a subsequent Order dated September 15, 2009, it modified its ruling, denied the motion to approve the MOA, but granted petitioner contingent attorney’s fees equivalent to 30% of the balance (P3,954,773.57). The SAC maintained it had jurisdiction as no estate proceedings had been initiated. Respondents appealed. The SAC later granted petitioner’s Motion for Execution Pending Appeal, and the LBP released the funds to him. The Court of Appeals, in its assailed Decision, declared the SAC’s April 13, 2009 and September 15, 2009 Orders void insofar as they granted attorney’s fees, holding that the SAC’s jurisdiction was limited to the determination of just compensation and that the claim for attorney’s fees should be pursued in a separate action before the regular courts. It ordered petitioner to return the money.

ISSUE

Whether the Special Agrarian Court (SAC) had jurisdiction to award attorney’s fees to petitioner in the same action for the determination of just compensation.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision. The SAC’s jurisdiction under Republic Act No. 6657, while original and exclusive, is limited to petitions for the determination of just compensation to landowners and prosecution of all offenses under the Act. A claim for attorney’s fees, while it may be asserted in the very action in which the services were rendered, is not part of the cause of action for just compensation and is distinct and separate from it. The circumstances of this case—involving a dispute over the existence and authenticity of a fee agreement, the fact that the client had died, and the claim was against his estate—dictated that the claim be resolved in a separate action. The SAC exceeded its jurisdiction when it awarded attorney’s fees. Petitioner’s proper recourse is to file an independent civil action for the collection of his claimed fees before the regular courts. The Court of Appeals correctly ordered the return of the released funds, without prejudice to such separate action.