G.R. No. 225207, September 29, 2021
Atty. Aristotle T. Dominguez, Petitioner, vs. Bank of Commerce, as Purported Transferee of Traders Royal Bank, and Spouses Carmelo, Jr. and Elizabeth Africa, Respondents.

FACTS

In 2007, respondent Carmelo Africa Jr., with his brothers, engaged the legal services of petitioner Atty. Aristotle T. Dominguez to prevent Bank of Commerce (BOC) from taking possession of family properties with a total redemption price of P25 million. Atty. Dominguez charged a 1% acceptance fee and was promised a 20% success fee on any amount reduced from the redemption price. He later averred the initial redemption price was P100 million and he was misled. In a separate matter, his legal services for the Africa brothers against Hanjin were terminated. BOC filed a petition for cancellation of adverse claim on titles, which was opposed by spouses Africa through Atty. Dominguez. During hearings, a possible settlement was mentioned. In October 2012, Atty. Dominguez filed a Request for Admission regarding the settlement allegations. He later manifested he was no longer representing the spouses Africa. In January 2013, he filed a “Motion to Fix Attorney’s Fees and to Approve Charging (Attorney’s) Lien with Motion for Production of Compromise Agreement” before the Regional Trial Court (RTC). The RTC, in its January 28, 2013 Order, held the motion in abeyance until a resolution or judgment was rendered, stating Atty. Dominguez had no personality to appear. His motion for reconsideration was denied by the RTC in its September 16, 2013 Order, stating the claim for attorney’s fees should be made in a separate civil case. Atty. Dominguez filed a Petition for Certiorari before the Court of Appeals (CA). The CA, in its June 22, 2015 Decision, dismissed the petition, finding no grave abuse of discretion by the RTC. The CA held that trial courts in petitions for cancellation of adverse claim are restricted to ruling on the propriety of the claim and cannot rule on money judgments, and that the claim for attorney’s fees should be pursued in a separate action. The CA also noted the alleged Compromise Agreement was not part of the proceedings. Atty. Dominguez’s motion for reconsideration was denied.

ISSUE

1. Whether the trial court can rule on money judgments in a petition for cancellation of adverse claim.
2. Whether the claim for attorney’s fees should be pursued in a separate action rather than in the petition for cancellation of adverse claim.
3. Whether the Compromise Agreement between BOC and Spouses Africa can be a valid basis for Atty. Dominguez’s attorney’s fees, even if such document was not part of the proceedings.
4. Whether money judgment and execution in the main case are conditions sine qua non in charging lien as security for payment of attorney’s fees.

RULING

The Supreme Court GRANTED the Petition, REVERSED and SET ASIDE the CA Decision, and REMANDED the case to the RTC for determination of attorney’s fees based on quantum meruit.
1. On ruling on money judgments: The trial court may rule on money judgments such as attorney’s fees and record and enforce an attorney’s lien in a petition for cancellation of adverse claim or in a separate action, at the option of the counsel claiming the same. Section 70 of the Property Registration Decree (PD 1529) does not limit the issues a trial court may resolve in such a petition. The registration of a lien may be granted prior to judgment to establish the lawyer’s claim, while its enforcement may await the finality of a money judgment.
2. On separate action for attorney’s fees: The claim for attorney’s fees may be asserted in the very case in which the services were rendered, and the court has the authority to determine and adjudicate the claim in that same case. A separate action is not the exclusive remedy. The RTC, having general jurisdiction, can adjudicate the claim for attorney’s fees in the pending petition.
3. On the Compromise Agreement as basis: The existence and contents of the Compromise Agreement are factual matters that must be proven before the RTC. The RTC, upon remand, is directed to determine the validity of the agreement and its implications on the claim for attorney’s fees.
4. On conditions for a charging lien: A money judgment and execution in the main case are not conditions sine qua non for a charging lien. A charging lien attaches to the judgment and can be enforced after the judgment has become final and executory. The registration of the lien can be made prior to judgment to establish the claim. The RTC’s authority to determine and fix attorney’s fees is not dependent on the nature of the principal action.
The Supreme Court held that the CA erred in ruling that the RTC could not rule on the claim for attorney’s fees within the petition for cancellation of adverse claim. The case was remanded to the RTC for the purpose of determining and fixing the attorney’s fees due to Atty. Dominguez on the basis of quantum meruit.