G.R. No. L-9473; November 28, 1959
ROSARIO DE JESUS-ALANO, petitioner, vs. HON. BIENVENIDO A. TAN, Judge of the Court of First Instance of Manila, and TRINIDAD DE LEON VDA. DE ROXAS, respondents.

FACTS

Sometime in 1953, respondent Trinidad de Leon Vda. de Roxas filed an action for judicial foreclosure of a real estate mortgage. After several months without a hearing, she withdrew the suit and, upon the recommendation of Judge Gavino S. Abaya, availed of the services of petitioner Atty. Rosario de Jesus-Alano to pursue extrajudicial foreclosure under Act No. 3135 . The mortgaged property was sold at public auction, and from the proceeds, the sheriff delivered P153,020.00 to Mrs. Roxas for the principal and interest. Mrs. Roxas, through a letter signed by petitioner as her attorney, additionally claimed 10% attorney’s fees (P15,302.00). Due to this claim, the sheriff withheld distribution of the remaining balance, prompting a suit (Civil Case No. 22881) by another judgment creditor, Pacita de los Reyes Philipps, to recover her claim. In that case, Mrs. Roxas, represented by petitioner, filed an answer reiterating the claim for attorney’s fees under Article 2208 of the Civil Code and included a counterclaim for moral damages. The court, in its decision dated January 31, 1955, denied the damages and ordered the distribution of the remaining funds. It awarded Mrs. Roxas P2,500.00 as “attorney’s fees and other expenses incurred in the foreclosure proceedings,” considering the extrajudicial foreclosure a continuation of the judicial one. On March 31, 1955, upon petitioner’s motion, the court issued an order for execution, directing that the P2,500.00 “be delivered to Atty. Rosario de Jesus-Alano being the lawyer of defendant Mrs. Trinidad de Leon Vda. de Roxas.” The sheriff complied on April 21, 1955. On June 15, 1955, a new attorney for Mrs. Roxas, Atty. Jose Topacio Nueno, filed a petition alleging that Mrs. Roxas never engaged petitioner’s professional services, that the motion for execution was filed without her knowledge, and that the P2,500.00 belonged to her, not to petitioner. Petitioner filed a manifestation stating she acted as counsel in the extrajudicial foreclosure, received only P350.00 from Mrs. Roxas, and that the awarded amount was her attorney’s lien. After a hearing, the court, on June 18, 1955, issued an order requiring petitioner to deposit the P2,500.00 with the clerk of court within five days to determine if she was really Mrs. Roxas’s lawyer and the reasonable value of her services, with a threat of contempt and arrest for non-compliance. Petitioner’s motion for reconsideration was denied, leading to this petition for certiorari to annul the June 18, 1955, order as issued without jurisdiction and unconstitutional.

ISSUE

Whether the respondent judge acted without jurisdiction or in grave abuse of discretion in issuing the order of June 18, 1955, which required petitioner to deposit the P2,500.00 awarded as attorney’s fees and threatened her with contempt and arrest.

RULING

Yes, the petition for certiorari is granted. The respondent judge’s order of June 18, 1955, is annulled.
The Supreme Court held that the decision of January 31, 1955, in Civil Case No. 22881 had already become final and executory. That decision specifically awarded P2,500.00 to Mrs. Roxas as “equitable and just attorney’s fees,” taking into account the standing of her attorney, the petitioner. The subsequent order of execution correctly directed payment to petitioner as the attorney of record. The respondent judge, therefore, had no jurisdiction to modify this final decision through the June 18, 1955, order, especially since no motion to set it aside under Rule 38 of the Rules of Court had been filed. Furthermore, the Court recognized petitioner’s attorney’s retaining lien under Section 37 of Rule 127 (now Section 37, Rule 138) of the Rules of Court, which allows an attorney to retain funds lawfully coming into their possession until lawful fees are paid. Since the P2,500.00 was adjudicated as the reasonable value of her services and she lawfully received it via court order, she had a right to retain it. The Court found the order requiring deposit and threatening arrest for debt to be arbitrary and a violation of due process. However, the Court noted that petitioner had already received P350.00 from Mrs. Roxas during the foreclosure proceedings. Consequently, the Court ordered petitioner to return this P350.00 to Mrs. Roxas. The preliminary injunction was made permanent. No costs were awarded.