Ramon Jacinto vs. Atty. Litonjua and Atty.

Solis

G.R. No. 207675, January 20, 2021

Facts:

This case is a petition for review on certiorari on the amended decision and
resolution of the court of appeals awarding attorneys’ fees to the respondents equivalent to
25% of the amicable settlement between Ramon Jacinto and EPCIB.

The decedents in this case are Spouses Fernando and Bernardina Jacinto. Among
their children are petitioner Ramon and his sister Marilene. The properties of the deceased
spouses were probated separately at the time.

The properties of the decedents were fraudulently transferred to Forward

Properties, Inc., which then mortgaged the properties to Equitable PCI Bank as security for
a loan. To recover their parents’ properties, Ramon filed an action against EPCIB and FPI
before the RTC of Baguio for the annulment of the sale and mortgage of the property. On her
part, Marilene, as administrartrix of the estate, intervened in the action filed by her brother
and was represented by the respondents, Atty. Litonjua and Atty. Solis.

Apparently, the fraudulent transfer of the properties was achieved by virtue of a

deed of sale executed by Fernando in favor of FPI back in 1995. This resulted in the
cancellation of the Transfer Certificates of Title of the Spouses Jacinto and new titles were
issued to FPI.

In Marilene’s complaint-in-intervention, she prayed for at least 1Million Pesos for

Moral Damages, 100,000 Pesos as exemplary damages and 100,000 Pesos as Attorney’s fees
and costs of suit.

The RTC of Baguio ruled in favor of the Jacinto siblings declaring void the sale of the
properties to FPI, the real estate mortgage between EPCIB and FPI, and the sale of the
properties on foreclosure to EPCIB. The RTC further ordered FPI to pay EPCIB the amount
of the loan and mortgage amounting to around 154 Million Pesos and also ordered FPI and
EPCIB to pay Ramon and Marilene for moral damages, exemplary damages, and 100,000
Pesos as attorney’s fees and costs of the suit.

Meanwhile, the respondent lawyers filed a Notice of Attorney's Lien before the RTC
Baguio claiming attorney's fees in the amount pursuant to their engagement contract with
Marilene.

While EPCIB’s appeal to the CA was pending, both Ramon and EPCIB moved for the
approval of a Compromise Agreement. Both parties signed the agreement and on his part,
Ramon signed the same as the President of FPI, as administrator of the Estate of his
parents, and as the complainant in the Civil Case filed in RTC Baguio.

The respondent lawyers filed an opposition to the compromise agreement attaching

their Notice of Attorney’s Lien arguing that the agreement is contrary to law, morals, good
customs, public order or public policy since it did not include their attorney’s lien and that
the value of the judgment of the RTC Baguio amounting to 154Million should be the basis of
the 25% contingency fee that they should receive.

The CA approved the Compromise agreement but denied the respondents’ claim of
attorney’s fees, reasoning that the charging lien requires as a condition sine qua non the
execution of a judgment for money.

On motion for partial reconsideration of respondents, the CA allowed the

respondents’ attorney’s lien ordering Ramon to pay the respondents 25% of the amount of
the amicable settlement.

Hence, this appeal.

Issue:

Whether or not the respondents can validly claim 25% of the amount of the
amicable settlement as attorney’s fees.

Ruling:

No, the respondents cannot claim 25% of the amicable settlement as attorney’s fees.
The Court ruled that the respondents’ attorney’s fees cannot be charged against the amount
in the Compromise Agreement between Ramon and EPCIB nor can it be charged against the
judgment of the RTC Baguio.

In this case, the RTC of Baguio awarded to both Ramon and Marilene damages
amounting to 700,000 and 100,000 as attorney’s fees, to be paid jointly and severally by FPI
and EPCIB. The trial court had no further judgment award in favor of respondents’ client
Marilene as the then administratrix of her parents’ estate. Further the trial court awarded
EPCIB the value of FPI’s loan and mortgage amounting to about 154Million Pesos based on
the former’s cross claim against the latter.

Also, while FPI is a judgment debtor in the trial court case wherein it is jointly and
severally liable with EPCIB to pay Ramon and Marilene in damages, it was liable only to
EPCIB for the 154Million Peso loan.
 It can then be deduced from the foregoing that the respondent lawyers have no
claim to the judgment amount in favor of EPCIB and that the CA was incorrect in setting
that same amount as the basis of the respondents’ 25% attorney’s fees.

Moreover, the respondents did not present their contingency fee agreement with
Marilene before the trial court, nor did they question the 100,000 Peso award of the same
court as attorney’s fees.

The Notice of Attorney’s Lien filed by the respondents was a superfluity that did not
relate to the judgment amount awarded in favor of EPCIB.

Art. 2208, Civil Code provides that: In all cases, the attorney's fees and expenses of
litigation must be reasonable.

In this case, respondents' claim of attorney's fees over the recovered properties and
the succeeding compromise agreement cannot override Ramon's acts of administration
over the decedents' estate, which included the execution of the compromise agreement.
This is because the respondents do not have a preferential right or claim to the subject
property.

In sum, the respondents cannot base the amount of their attorney’s fees on FPI’s
judgment liability to the bank, since it would be an unreasonable amount and it has already
been extinguished upon the CA’s approval of the compromise agreement.