G.R. No. L-27832 May 28, 1970
TESTATE ESTATE OF AMADEO MATUTE OLAVE, Deceased, CARLOS V. MATUTE, general administrator-appellant, MATIAS S. MATUTE, co-administrative-appellant, PATERNO R. CANLAS, appellant, vs. JOSE S. MATUTE, ANUNCIACION CANDELARIO, ELENA MATUTE Y CANDELARIO and AMADEO MATUTE Y CANDELARIO, JR., appellees.

FACTS

The appeal was perfected prior to the effectivity of Republic Act No. 5440. Appellants Carlos V. Matute and Matias S. Matute, co-administrators of the Testate Estate of Amadeo Matute Olave, and their attorney, Paterno R. Canlas, sought reversal of the probate court’s order dated April 22, 1967. The order required them to surrender seventeen (17) titles to estate properties to the assistant clerk of court for safekeeping. The order originated from a motion filed by the appellees (Jose S. Matute, et al.) praying that former administrator Matias S. Matute be ordered to surrender the titles, which he had received from the assistant clerk on September 28, 1966. The appellants resisted, arguing that the removal and replacement of Matias as administrator were under appeal, that the titles had been delivered to both co-administrators Matias and Carlos Matute, and that Carlos Matute was currently in possession of the titles. Attorney Paterno R. Canlas specifically claimed a retention lien over the titles under Rule 138, Section 37 of the Rules of Court, based on his pending claim for legal services rendered to the estate, which was later compromised for P2,000,000.00. He asserted he was “from time to time also in possession” of the titles in his capacity as counsel for the estate and was retaining them in exercise of his retention lien. The probate court granted the motion to surrender the documents to prevent possible controversy. Reconsideration was denied on May 29, 1967, with the court ordering Canlas to surrender the documents immediately.

ISSUE

Whether the probate court erred in ordering the surrender of the seventeen (17) titles to the clerk of court without first providing for the satisfaction of Attorney Paterno R. Canlas’s fees or proper security for their payment, in light of his claim of a retention lien under Rule 138, Section 37 of the Rules of Court.

RULING

The Supreme Court reversed the orders of the probate court dated April 22, 1967 and May 29, 1967, insofar as they denied appellant Attorney Paterno R. Canlas’s right to retain the seventeen documents and required their surrender without his claim for fees being first satisfied. The Court held that the explicit terms of Rule 138, Section 37 afford no alternative but to uphold Canlas’s claim regarding the documents in his possession. His right as counsel for the estate to retain the documents until his lawful fees are paid is incontestable, and he cannot be compelled to surrender them without prior proof that his fees have been satisfied. The courts are bound to respect and protect the attorney’s lien. If it is indispensable for the court to gain possession of the documents, it can require surrender only by first requiring the client or claimant to file proper and adequate security for the lawyer’s compensation. The probate court’s order was plainly in error for not providing such satisfaction or security. The Court noted that the probate court’s order of May 29, 1967 found that Canlas had admitted being in possession of the titles, setting at rest any ambiguity from his “from time to time” statement. The ruling in Inton vs. Matute was distinguished as inapplicable because there the counsel served the administrator individually, not the estate. Costs were awarded against the appellees.