G.R. No. L-13505; March 30, 1960
BACOLOD MURCIA MILLING COMPANY, INC., plaintiff-appellant, vs. FIDEL HENARES, as Judicial Administrator of the Intestate Estate of the late DON ESTEBAN HENARES, defendant-appellee.

FACTS

This is an appeal from an order of the Court of First Instance of Negros Occidental. The case originated from a foreclosure of mortgage suit (Civil Case No. 546) filed by Bacolod-Murcia Milling Co., Inc. against the estate of Esteban Henares, where Ricardo Nolan appeared as counsel for the plaintiff. A decision was rendered on July 11, 1947, ordering the defendant to pay the plaintiff a sum of money plus attorney’s fees. On July 7, 1953, Ricardo Nolan filed a notice of lawyer’s lien with the court, claiming 10% of the judgment amount as his fees. The plaintiff opposed this notice. A writ of execution was issued on November 13, 1953, and the mortgaged properties were sold at public auction on July 16, 1954, with the sale confirmed by the court on September 4, 1954. On September 8, 1954, after the confirmation of the sale, Nolan petitioned the court to order the plaintiff to pay him the amount of his lien. The plaintiff opposed, arguing that the judgment had been satisfied by the sale, leaving no judgment to which the lien could attach, and that the court therefore lacked jurisdiction. The trial court issued an order on December 24, 1954, directing the plaintiff to turn over the amount of the lien to the Provincial Sheriff for payment to Nolan. The plaintiff appealed.

ISSUE

The decisive issue is whether the satisfaction of a judgment in a foreclosure suit, by the judgment creditor’s purchase of the mortgaged property at a judicial sale, extinguishes an attorney’s charging lien for which notice was filed prior to the satisfaction.

RULING

The Supreme Court affirmed the order of the lower court. The Court ruled that the satisfaction of a judgment does not, by itself, extinguish an attorney’s charging lien, especially when the attorney has taken steps to preserve it. Nolan filed his notice of lien on July 7, 1953, long before the writ of execution (November 13, 1953) and the judicial sale (July 16, 1954). He also notified the Sheriff of his claim before the sale. Under Section 33, Rule 127 of the Rules of Court, an attorney’s lien attaches to a judgment for the payment of money and executions issued pursuant to it. The lien takes legal effect from the time notice is entered in the record and served on the client and adverse party. The Court held that Nolan did not waive his lien; his actions indicated a desire to preserve it. The satisfaction of the judgment did not deprive the court of jurisdiction to enforce the lien that had already attached. The Court also found no merit in the appellant’s claim that the order lacked a statement of facts and law, as such constitutional and rule requirements apply to decisions on the merits, not to orders on incidental matters.