Republic of the Philippines

Court of Appeals
Cebu City

TWENTIETH DIVISION

ATTY. AUDIE C. ARNADO, CA-G.R. SP NO. 13306

Petitioner,

Members:
– versus -
LAGURA-YAP, J., Chairperson,
QUIROZ, &
CORPIN, JR., JJ.

HON. PRESIDING JUDGE, RTC

BRANCH, CEBU CITY, L.E. EX-
Promulgated: 26 February 2021
IMPORT (CEBU), INC., CARLOS
DY HONG and LEONCIO DY
HONG,
Respondents.

DECISION

LAGURA-YAP, J.

Before this Court is a Petition for Certiorari1 under Rule

65 of the Rules of Court seeking to annul and set aside the
Resolution2 dated June 6, 2019 and the Order3 dated
September 2, 2019 of the Regional Trial Court, Branch 21,
Cebu City in Civil Case No. CEB-23539.

The Antecedents

The facts, as culled from the Petition, are as follows:

United Coconut Planter's Bank (UCPB) filed a Complaint4

for collection of sum of money against private respondents
L.E. Ex-Import (Cebu), Inc., Carlos Dy Hong and Leoncio Dy
before the RTC of Cebu City. Private respondents were then
represented by Atty. Rory Jon Q. Sepulveda. However, he later
withdrew his appearance as counsel for private respondents
1 Rollo, pp. 4-29.
2 Rollo, pp. 122-124.
3 Rollo, p. 125
4 Rollo, pp. 30-36.
CA-G.R. SP NO. 13306 2 of 10
Decision

because of his appointment as legal counsel of the Governor of

the Province of Cebu.

On July 27, 2007, private respondents engaged the

services of petitioner as their new counsel. Petitioner, as
private respondents' counsel, filed motions and other
pleadings in their behalf. Specifically, on February 25, 2009,
petitioner filed a Motion to Dismiss5 the case for UCBP's failure
to comply with the lawful orders of the court. On May 25,
2009, public respondent issued an Order6 granting the said
motion and, accordingly, dismissed the case against private
respondents.

On March 17, 2015, petitioner filed a Motion to Fix

Attorney's Fees7. On the same date, he also filed an Ex Parte
Motion to Annotate Attorney's Lien8.

On October 8, 2015, public respondent issued an Order9

directing private respondent to file their Comment on the
motion to fix attorney's fees and granting the ex parte motion
to annotate attorney's lien on the property covered by Tax
Declaration No. GR-12-18-24503.

On December 14, 2018, petitioner filed another Ex Parte

Motion to Annotate Attorney's Lien 10 over other parcels of land
owned by private respondents, covered under Tax Declaration
Nos. GRC6-03-020-04306, GRC6-03-020-07554 and GRC6-
03-039-00713. Later, on February 14, 2019, petitioner filed an
Ex Parte Motion11, withdrawing his motion to fix attorney's lien
but pursuing the motion to annotate attorney's lien on the
properties covered by the above-mentioned tax declaration.

On February 26, 2019, public respondent issued an

Order12 denying petitioner's motion to annotate attorney's lien
on the aforementioned parcels of land for lack of basis.
Thereafter, petitioner filed a Motion for Reconsideration13 of the

5 Rollo, p. 54-55.
6 Rollo, p. 56.
7 Rollo, pp. 57-59
8 Rollo, pp. 60-62.
9 Rollo, p. 63.
10 Rollo, pp. 64-66
11 Rollo, pp. 67-68.
12 Rollo, p. 80.
13 Rollo, pp. 81-85.
CA-G.R. SP NO. 13306 3 of 10
Decision

said Order. Meanwhile, private respondents filed a Motion to

Cancel Annotation of Attorney's Lien on the real property
covered by Tax Declaration No. GR-12-18-24503.

On June 6, 2019, the RTC issued a Resolution, denying

petitioner's Motion for Reconsideration and granting private
respondents' Motion to Cancel Annotation of Attorney's Lien on
the real property covered by Tax Declaration No. GR-12-18-
24503. The RTC held that in Acknowledgment Receipt No.
3316, the Arnado Law Office recognized private respondents'
payment as “full payment”. This signifies that private
respondents have fully paid their obligation to the Arnado Law
Firm. Therefore, petitioner's attorney's lien on the real
property covered by Tax Declaration No. GR-12-18-24503 has
no basis and should be canceled. The dispositive portion of the
Resolution reads:

In view of the foregoing, the Court hereby-

1. DENIES the Motion for Reconsideration filed by

Att[y]. Audie C. Arnado for lack of merit; and

2. GRANTING the Motion to Cancel Annotation of

Attorney's Lien on the real property covered by Tax
Declaration No. GR-12-18-24503.

The Provincial Assessor of the Province of

Cebu and/or the Municipal Assessor of the
Municipality of Consolacion, Cebu are ordered to
cancel the annotation of attorney's lien of Atty. Audie
C. Arnado on the real property covered by Tax
Declaration No. GR-12-18-24503.

Deputy Sheriff Edwin Chavez is ordered to

serve this Order to the concerned Provincial Assessor
of the Province of Cebu and the Municipal Assessor
of the Municipality of Consolacion, Cebu.

SO ORDERED.

Petitioner filed a Motion for Reconsideration but his

motion was denied by the RTC in its Order14 dated September
2, 2019. Hence, this Petition, anchored on the following
ground:
14 Rollo, p. 125.
CA-G.R. SP NO. 13306 4 of 10
Decision

Issue

THE HONORABLE PUBLIC RESPONDENT

COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN HE GRANTED THE PRIVATE
RESPONDENT'S MOTION TO CANCEL ANNOTATION
OF ATTORNEY'S LIEN ON THE TAX DECLARATIONS
COVERING THE REAL PROPERTIES OWNED BY THE
PRIVATE RESPONDENTS.15

Petitioner's Arguments

In the instant Petition for Certiorari, petitioner argues that

he has handled and defended several cases in behalf of private
respondent. Thus, he is entitled to reasonable attorney's fees.
Through his efforts, he was able to successfully cause the
dismissal of pending cases against private respondents, freed
their property from legal claims and erased their gargantuan
debt.

Petitioners engagement by private respondents was

covered by a Contract of Legal Services, which provides:

10. Attorney's Fees. The lawyers shall be entitled

to fair and just “attorney's or success fee”, such as but
not limited to a fair portion of recovered money or
property, or avoidance of debts, etc. provided by law or
fairness, since such benefits are enjoyed by the clients
due to the efforts of the counsel/s.

While it is true that the practice of law is not a money-

making trade or business, it does not foreclose the right of a
lawyer to seek full compensation for the professional services
he has rendered, specially in the instant case where the
clients benefited greatly from the legal services rendered.

Rule 139, Section 24 of the Rules of Court expressly

provides that the counsel is entitled to recover reasonable
compensation from his or her client. Thus, petitioner has a
valid and binding lien on the properties owned by private
respondents after the latter failed to perform their legal
obligation under the Contract of Legal Services. Private
15 Rollo, p. 12.
CA-G.R. SP NO. 13306 5 of 10
Decision

respondents have presented evidence of payment for one (1)

case only but none for the other cases handled by petitioner. It
is therefore clear that public respondent's order for
cancellation of the attorney's lien annotated on Tax
Declaration No. GR-12-18-24503 was unjust because it
deprived petitioner of the protection given by law.

Factors exist in this case that merit the grant of

reasonable compensation to petitioner for legal services that
he rendered. In determining reasonable amount of attorney's
fees, the Supreme Court has considered several factors, such
as time and effort spent, extent of the services rendered,
difficulty of the questions involved, importance of the subject
matter, amount involved in the controversy, and benefits
obtained for the client. Granting arguendo that private
respondents have paid petitioner a certain amount, this does
not prevent petitioner from seeking full compensation for the
legal services rendered based on the contract and on quantum
meruit.

Here, petitioner has spent considerable time and effort in

working for the dismissal of the instant case and for obtaining
benefits favorable to private respondents. The Complaint was
filed way back in 1999. By the time petitioner entered his
appearance, voluminous records had already been
accumulated. If petitioner had not been diligent and vigilant in
protecting and asserting private respondents' rights, the case
would not have been dismissed with prejudice. Petitioner used
his knowledge, skills and training in the intricacies of the law.
His services could not be belittled by private respondents.

Due to the services rendered by petitioner, private

respondents have obtained a considerable amount of benefits,
which entitles counsel to a fair and reasonable just
compensation. The Complaint against private respondents
asserted a past due money claim equivalent to fifty one million
thirty-three thousand five hundred seventy-six pesos and
forty-two centavos (P51,033,576.42) as of May 25, 2009. This
amount would have continued to increase due to interest and
penalties had petitioner been remiss in his duty of defending
and protecting the rights and interests of private respondents.
CA-G.R. SP NO. 13306 6 of 10
Decision

The amount involved in the controversy, the importance

of the properties involved and the resulting benefits should all
be considered in fixing the amount of reasonable attorney's
fees due. Based on jurisprudence, the attorney's fees in the
instant case should range from P7,655,036.46 to
P17,861,751.75. The amount of one million three hundred
sixty-seven thousand pesos (P 1,367,000.00) that private
respondents claim to have paid is clearly less than three
percent (3%) of the amount saved by them. This amount may
be treated as advance payment but may not be considered a
bar to petitioner from claiming full and fair recompense for
which he is contractually and legally entitled.

The annotation of the attorney's lien on the property

owned by private respondents is a right granted by law to
petitioner. It is necessary to protect his claim for just
compensation for legal services rendered. Thus, the RTC
committed grave abuse of discretion when it ordered the
cancellation of the attorney's lien annotated on the private
respondent's properties.

Private Respondents' Arguments

In their Comment16, private respondents argue that the

RTC acted within the bounds of its jurisdiction when it
ordered the cancellation of the annotation of the attorney's lien
on Tax Declaration No. GR-12-18-24503. The RTC's ruling
was based on the documents presented, especially those
coming from petitioner's office, which acknowledged that his
attorney's fees were already paid in full.

The documents on record clearly show that petitioner has

already been paid his attorney's fees/success fees for the case
pending before RTC, Branch 21, Cebu City way back in June
2017. The Acknowledgment Receipts issued from his own
office are clear admissions that he has duly received payments
for his fees and he has even discharged private respondent by
acknowledging, in the last receipt, that the payment was for
the full payment of his fees for this particular case. With the
foregoing acknowledgment, public respondent found no more
basis for the continued annotation of attorney's lien over
16 Rollo, pp. 131-138.
CA-G.R. SP NO. 13306 7 of 10
Decision

private respondent's property.

Petitioner, by his very own issued documents, cannot

now say that the amount paid was merely an advance of his
fees. His own documents pegged his fees at one million three
hundred sixty-seven thousand pesos (P1,367,000.00) and he
acknowledged full payment thereof. The documents speak for
themselves and there is no need for further interpretation.

To reiterate public respondent did not act with grave

abuse of discretion because its ruling was based on the
evidence presented.

Our Ruling

The Petition lacks merit.

Essential to the grant of a petition for certiorari under

Rule 65 of the Rules of Court is the allegation and proof that
the respondent court or tribunal acted without jurisdiction or
with grave abuse of discretion amounting to lack of excess of
jurisdiction. This is so because Section 1 of Rule 65 provides:

Section 1. Petition for certiorari. — When any tribunal,

board or officer exercising judicial or quasi-judicial
functions has acted without or in excess its or his
jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there
is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as law and
justice may require.

The term "grave abuse of discretion" has a precise

meaning in remedial law. It is the capricious or whimsical
exercise of judgment that effectively brings the acting entity
outside the exercise of its proper jurisdiction. The abuse of
discretion must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform a
duty enjoined by law, or to act at all in contemplation of law,
CA-G.R. SP NO. 13306 8 of 10
Decision

as where the power is exercised in an arbitrary and despotic

manner by reason of passion and hostility. 17 The case of Yu vs.
Reyes-Carpio18 defines grave abuse of discretion in this
manner:
The term "grave abuse of discretion" has a specific
meaning. An act of a court or tribunal can only be
considered as with grave abuse of discretion when
such act is done in a "capricious or whimsical
exercise of judgment as is equivalent to lack of
jurisdiction." The abuse of discretion must be so
patent and gross as to amount to an "evasion of a
positive duty or to a virtual refusal to perform a
duty enjoined by law, or to act at all in
contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by
reason of passion and hostility." Furthermore, the
use of a petition for certiorari is restricted only to
"truly extraordinary cases wherein the act of the
lower court or quasi-judicial body is wholly void."
From the foregoing definition, it is clear that the
special civil action of certiorari under Rule 65 can
only strike an act down for having been done with
grave abuse of discretion if the petitioner could
manifestly show that such act was patent and
gross. x x x.

The burden is on the part of the petitioner to prove not

merely reversible error, but grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the
public respondent issuing the impugned decision or order.
Mere abuse of discretion is not enough; the abuse must be
grave.19

In the present case, We find no grave abuse of discretion

on the part of the RTC when it ordered the cancellation of the
attorney's lien over private respondent's property. There was
no showing that the RTC acted in a capricious or whimsical
manner in the exercise of its judgment as is equivalent to lack
of jurisdiction. We have perused the Petition and We do not see
how the RTC abused its discretion in a patent and gross
manner that would warrant striking down its Resolution and
Order through a writ of certiorari. In fact, an examination of
17 Biñan Rural Bank vs. Jose Willelmino G. Carlos, et al., G.R. No. 193919 , June 15, 2015.
18 G.R. No. 189207, June 15, 2011.
19 Intec Cebu Inc., et al. vs. Hon. Court of Appeals, et al., G.R. No. 189851, June 22, 2016.
CA-G.R. SP NO. 13306 9 of 10
Decision

the records shows that the RTC had adequate factual and
legal bases in arriving at its ruling. Its conclusion was based
on the available documentary evidence on record in the form
of the Acknowledgment Receipts.

In the absence of any showing of grave abuse of

discretion on the part of the RTC, We see no reason to depart
from its factual findings and its appreciation of the
Acknowledgment Receipts as evidence. In Romy's Freight
Service vs. Castro20, the Supreme Court explained that the sole
office of a writ of certiorari is the correction of errors of
jurisdiction including the commission of grave abuse of
discretion amounting to lack of jurisdiction, and does not
include the review of the public respondent’s evaluation of the
evidence and the factual findings based thereon. It does not
include a mistake in the appreciation of the contending
parties’ respective evidence or the evaluation of their relative
weight.

It must be emphasized that the principal office of

certiorari is only to keep the inferior court within the
parameters of its jurisdiction or to prevent it from committing
such a grave abuse of discretion amounting to lack or excess
of jurisdiction.21 Here, it is clear that the RTC did not exceed
the bounds of its jurisdiction when it issued the assailed
Resolution and Order. Hence, We see no grave abuse of
discretion on the part of the RTC that would justify the grant
of the instant petition for certiorari.

WHEREFORE, premises considered, the Petition for

Certiorari is DISMISSED.

SO ORDERED.

ORIGINAL SIGNED
MARILYN B. LAGURA-YAP
Associate Justice

20 G.R. No. 141637, June 8, 2006.

21 Alfredo Tagle vs. Equitable PCI Bank (Formerly Philippine Commercial International Bank) and the Honorable Herminia
V. Pasamba, Acting Presiding Judge, Regional Trial Court-Branch 82, City of Malolos, Bulacan, G.R. No. 172299, April 22,
2008.
CA-G.R. SP NO. 13306 10 of 10
Decision

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

ROBERTO P. QUIROZ BAUTISTA G. CORPIN, JR.
Associate Justice
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it

is hereby certified that the conclusions in the above decision
were reached in consultation before the case was assigned to
the writer of the opinion of the Court.

ORIGINAL SIGNED
MARILYN B. LAGURA-YAP
Associate Justice
Chairperson, Twentieth Division