December 2009 - Philippine Supreme Court Resolutions
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[G.R. No. 176888 : December 09, 2009] THE LAW FIRM OF HERMOSISIMA & INSO V. JOHNNY YOUNG :
[G.R. No. 176888 : December 09, 2009]
THE LAW FIRM OF HERMOSISIMA & INSO V. JOHNNY YOUNG
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 09 December 2009:
G.R. No. 176888 (The Law Firm of Hermosisima & Inso v. Johnny Young).-
This case is about whether or not a lawyer who is entitled to a percentage of the damages awarded to his client has a right to directly seek execution against the judgment debtor independent of his client, who is the judgment creditor.
The Facts and the Case
On March 24, 1994 the Regional Trial Court (RTC) of Cebu City rendered judgment in Civil Case CEB-14571[1] for plaintiff Solidbank Corporation (Solidbank) and against defendants Cleanwater, Inc., Robert Young, Francisco Tan, and herein respondent Johnny Young. The dispositive portion of the decision, which grouped the defendants into two, reads:
Notably, the above amended dispositive portion of the decision omitted paragraph 2 of the original one that ordered respondent Johnny Young, jointly and severally with his co-defendants, to pay P1 ,500,000.00 to Solidbank.
Nonetheless, all the defendants, including respondent Young, appealed to the Court of Appeals (CA).[6] In an October 27, 2000 Decision,[7] the CA dismissed their respective appeals and affirmed "the assailed amended decision" thus:
But, although the "amended decision" referred to the original March 24, 1994 decision as amended by the Order of May 10, 1994, which order omitted paragraph 2 that referred to respondent young, the body of the CA decision touched upon Young's case as well. Indeed, it adopted the following findings of the RTC:
Eventually, the CA's October 27, 2000 decision became final and executory.
Meanwhile, in 2000, plaintiff Solidbank was dissolved to merge with Metropolitan Bank & Trust Company (Metrobank). This resulted in the termination of the services of petitioner Law Firm of Hermosisima & Inso (petitioner law firm), Solidbank's counsel of record.[10]
On June 3, 2002 petitioner law firm filed with the RTC a notice of attorney's lien with motion for issuance of a writ of execution,[11] serving copies of it on the defendants, including Metrobank. But none of the latter appeared or opposed the motion. Finding merit in it, on June 13, 2002 the trial court issued an order, directing the entry of petitioner law firm's charging lien into the record and the issuance of a writ of execution against the defendants to satisfy the law firm's attorney's fees. The writ included the judgment against respondent Johnny Young, thus:
As a result of the issuance of the writ, the sheriff of the RTC garnished respondent Young's banlc deposit of P1,413,562.50 with China Banking Corporation.
Respondent Young filed a motion with the RTC to quash the writ issued against him [13]on the grounds (a) that petitioner, law firm did not have the personality to ask for itself the execution of the judgment since it was not a party to the suit; and (b) that the dispositive portion of the decision as amended omitted mention of his liability to the defendants. Petitioner law firm opposed the motion.[14]
On July 22, 2003, the RTC quashed the writ of execution and ordered the return of the garnished funds to Young.[15] Petitioner law firm filed a motion for reconsideration of the court's action but this was denied, prompting the law firm to file a special civil action of certiorari with the CA.[16] On May 25, 2005 the CA dismissed the petition mainly on the ground that a lawyer must collect his fees from his client rather than from the adverse party.[17] Nonetheless, the CA affirmed respondent Young's liability as guarantor, rejecting the argument that the RTC deleted it as a result of its having been omitted from the amendatory order of May 10, 1994, an omission that was "inadvertent and clerical." In the same breath, however, the appellate court ruled that since Young was a mere guarantor, his liability would arise only after his co-defendants' properties were first pursued and exhausted.
On motion for partial reconsideration of petitioner law firm, however,on January 25, 2006 the CA issued an amended decision[18] which acknowledged petitioner law firm's right over the judgment and the execution like that of its client in enforcing its attorney's lien.[19] The amended dispositive portion reads:
But respondent Young filed a motion for clarification of this last order of the CA[20] and on March 22, 2006 the CA issued a resolution, granting Young's motion by providing that, while petitioner law firm was entitled to 10% of the judgment amount, it must collect the same from Solidbank.[21] The amended dispositive portion of the decision now reads:
Petitioner law firm sought reconsideration of this resolution but the CA declined to do so in its resolution of February 15, 2007, hence, the present recourse.
Questions Presented
The petition raises two questions:
The Court's Rulings
One. It is remarkable that, while the CA ruled in the body of its amended decision that a lawyer with a valid charging lien can apply for a writ of execution against the judgment debtor as if such lawyer had stepped into the shoes of his client, the CA would insist that petitioner law firm must seek payment of his lien only from his client, the judgment creditor.
But, as petitioner law firm points out, a lawyer acquires under Section 37, Rule 138 of the Rules of Court "the same right and power over such judgments and execution like that of his client" once he properly annotates Ms attorney's lien in the records of the case. Indeed, the Court has held in Calalang v. de Borja[22] that an attorney may enforce his charging lien against the judgment debtor or his assignee, or both.[23]
Two. In an attempt to avoid liability, respondent Young claims that the CA had ruled in its May 25, 2005 decision that execution cannot lie against him until petitioner law firm shall have first exhausted his co-defendants' properties, he being a mere guarantor of their debt, and the law firm did not appeal from such ruling.
But that supposed "ruling" is actually a mere statement or opinion, loosely made, that cannot impact on the final and executory judgment rendered in the original case on its merits, the dispositive portion of which reads:
The present incident emanates from CA-G.R. SP 82240, the second time the case came up to the CA, and is concerned merely with the execution of the final judgment against respondent Young and his co-defendants. The CA cannot in this action modify the final and executory judgment in the original case quoted above. It does not say that respondent Young's liability is conditioned on the exhaustion of his co-defendants' properties. It directs him to pay the judgment creditor without any precondition. In the execution of the court's judgment, the dispositive portion should be considered as the final disposition of the case before it.[25]
Of course, where the inevitable conclusion from the body of the decision is quite clear and shows some mistake in the dispositive portion, the body of the decision will prevail.[26] Here, however, what respondent Young relies solely on for invoking the principle of excussion is the following portion of the decision:
It might be that respondent Young was actually a mere guarantor of his co-defendants' loan with the bank. But neither the RTC nor the CA on appeal from the original case touched in their respective decisions the nature, whether direct or contingent, of Young's liability to the bank. Indeed, the above-quoted portion of the RTC decision mentioned the "Continuing Guaranty" he signed only to ascertain the amount of Young's liability. On the other hand, the dispositive portion of the decision reads plainly:
It is, therefore, too late for respondent Young to raise the matter of his subsidiary liability at this stage of the execution of the judgment against him or for the CA to entertain the same.
WHEREFORE, the Court GRANTS the petition, SETS ASIDE the March 22, 2006 and February 15, 2007 resolutions of the Court of Appeals of Cebu City in CA-G.R. SP 82240, and DIRECTS the Regional Trial Court of Cebu City to reinstate the writ of execution it issued against respondent Johnny Young at the initiative of petitioner Law Firm of Hermosisima & Inso in Civil Case CEB-1457I for the satisfaction of its charging lien.
Costs against respondent Young.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Conchita Carpio Morales (designated additional member per S..O. No. 807 in lieu of Brion, J., on leave), Teresita J. Leonardo-De Castro (designated additional member per S.O. No. 776), Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 9th day of December, 2009.
G.R. No. 176888 (The Law Firm of Hermosisima & Inso v. Johnny Young).-
This case is about whether or not a lawyer who is entitled to a percentage of the damages awarded to his client has a right to directly seek execution against the judgment debtor independent of his client, who is the judgment creditor.
On March 24, 1994 the Regional Trial Court (RTC) of Cebu City rendered judgment in Civil Case CEB-14571[1] for plaintiff Solidbank Corporation (Solidbank) and against defendants Cleanwater, Inc., Robert Young, Francisco Tan, and herein respondent Johnny Young. The dispositive portion of the decision, which grouped the defendants into two, reads:
WHEREFORE, all the foregoing considered, judgment is hereby rendered as follows:On motion for reconsideration, the RTC issued an Order[3] dated May 10, 1994, changing the award of attorney's fees to 10% of the total amount due. [4] The amended dispositive portion now reads:
1. Ordering defendants Cleanwater Inc., Robert Young and Francisco Tan to pay plaintiff, jointly and severally, the outstanding balance of �3,500,000.00 plus interest thereon at the rate of 21% per annum plus penalty charges at the rate of 1% effective August 5,1993 the date of the demand and attorney's fees which, on a quantum meruit basis, is hereby assessed at P10,000.00;
2. Ordering defendant Johnny Young to pay, jointly and severally with the aforementioned defendants, the total amount of P1,500,000.00 at the same rate of interest and penalty charges as aforestated.
With costs against the defendants.
SO ORDERED.[2] (Emphasis supplied)
WHEREFORE, the dispositive portion of the Decision dated March 24,1994 is hereby amended to read as follows:
1. Ordering defendants Cleanwater, Inc., Robert Young and Francisco Tan to pay plaintiff, jointly and severally, the outstanding balance of �3,500,000.00 plus interest thereon at the rate of 21% per annum plus penalty charges at the rate of 1% effective August 5, 1993 the date of the demand "and attorney's fees in an amount equivalent to 10% of the total amount due."
SO ORDERED.[5] (Emphasis and underscoring supplied)
Notably, the above amended dispositive portion of the decision omitted paragraph 2 of the original one that ordered respondent Johnny Young, jointly and severally with his co-defendants, to pay P1 ,500,000.00 to Solidbank.
Nonetheless, all the defendants, including respondent Young, appealed to the Court of Appeals (CA).[6] In an October 27, 2000 Decision,[7] the CA dismissed their respective appeals and affirmed "the assailed amended decision" thus:
WHEREFORE, premises considered, the appeal is hereby DISMISSED for lack of merit; and the assailed amended Decision of the trial court in Civil Case CEB-14571 is AFFIRMED en toto. No costs.
SO ORDERED.[8]
But, although the "amended decision" referred to the original March 24, 1994 decision as amended by the Order of May 10, 1994, which order omitted paragraph 2 that referred to respondent young, the body of the CA decision touched upon Young's case as well. Indeed, it adopted the following findings of the RTC:
xxx Defendant Johnny Young is also liable but only up to the amount of P1,500,000.00; the Continuing Guaranty he signed being for the said amount only.[9]
Eventually, the CA's October 27, 2000 decision became final and executory.
Meanwhile, in 2000, plaintiff Solidbank was dissolved to merge with Metropolitan Bank & Trust Company (Metrobank). This resulted in the termination of the services of petitioner Law Firm of Hermosisima & Inso (petitioner law firm), Solidbank's counsel of record.[10]
On June 3, 2002 petitioner law firm filed with the RTC a notice of attorney's lien with motion for issuance of a writ of execution,[11] serving copies of it on the defendants, including Metrobank. But none of the latter appeared or opposed the motion. Finding merit in it, on June 13, 2002 the trial court issued an order, directing the entry of petitioner law firm's charging lien into the record and the issuance of a writ of execution against the defendants to satisfy the law firm's attorney's fees. The writ included the judgment against respondent Johnny Young, thus:
2. Ordering defendant Johnny Young to pay, jointly and severally with the aforementioned defendants, the total amount of P1,500,000.00 at the same rate of interest and penalty charges as aforestated.[12]
As a result of the issuance of the writ, the sheriff of the RTC garnished respondent Young's banlc deposit of P1,413,562.50 with China Banking Corporation.
Respondent Young filed a motion with the RTC to quash the writ issued against him [13]on the grounds (a) that petitioner, law firm did not have the personality to ask for itself the execution of the judgment since it was not a party to the suit; and (b) that the dispositive portion of the decision as amended omitted mention of his liability to the defendants. Petitioner law firm opposed the motion.[14]
On July 22, 2003, the RTC quashed the writ of execution and ordered the return of the garnished funds to Young.[15] Petitioner law firm filed a motion for reconsideration of the court's action but this was denied, prompting the law firm to file a special civil action of certiorari with the CA.[16] On May 25, 2005 the CA dismissed the petition mainly on the ground that a lawyer must collect his fees from his client rather than from the adverse party.[17] Nonetheless, the CA affirmed respondent Young's liability as guarantor, rejecting the argument that the RTC deleted it as a result of its having been omitted from the amendatory order of May 10, 1994, an omission that was "inadvertent and clerical." In the same breath, however, the appellate court ruled that since Young was a mere guarantor, his liability would arise only after his co-defendants' properties were first pursued and exhausted.
On motion for partial reconsideration of petitioner law firm, however,on January 25, 2006 the CA issued an amended decision[18] which acknowledged petitioner law firm's right over the judgment and the execution like that of its client in enforcing its attorney's lien.[19] The amended dispositive portion reads:
WHEREFORE, in view of the foregoing, petitioner's partial motion for reconsideration is hereby granted. Accordingly, 10% of the amount of money judgment due the Solidbank/Metrobank accrues to petitioner.
But respondent Young filed a motion for clarification of this last order of the CA[20] and on March 22, 2006 the CA issued a resolution, granting Young's motion by providing that, while petitioner law firm was entitled to 10% of the judgment amount, it must collect the same from Solidbank.[21] The amended dispositive portion of the decision now reads:
WHEREFORE, in view of all the foregoing, petitioner's partial motion for reconsideration is hereby granted. Accordingly, 10% of the amount of money judgment due the Solidbank/Metrobank accrues to petitioner. The said 10% shall be collected by petitioner from Solidbank/Metrobank."
Petitioner law firm sought reconsideration of this resolution but the CA declined to do so in its resolution of February 15, 2007, hence, the present recourse.
The petition raises two questions:
1. Whether or not petitioner law firm may, independent of its client Solidbank, seek by writ of execution against respondent Johnny Young satisfaction of its charging lien of 10% of his judgment debt; and
2. Whether or not petitioner law firm must first pursue and exhaust the properties of respondent Young's co-defendants before taking recourse against him.
One. It is remarkable that, while the CA ruled in the body of its amended decision that a lawyer with a valid charging lien can apply for a writ of execution against the judgment debtor as if such lawyer had stepped into the shoes of his client, the CA would insist that petitioner law firm must seek payment of his lien only from his client, the judgment creditor.
But, as petitioner law firm points out, a lawyer acquires under Section 37, Rule 138 of the Rules of Court "the same right and power over such judgments and execution like that of his client" once he properly annotates Ms attorney's lien in the records of the case. Indeed, the Court has held in Calalang v. de Borja[22] that an attorney may enforce his charging lien against the judgment debtor or his assignee, or both.[23]
Two. In an attempt to avoid liability, respondent Young claims that the CA had ruled in its May 25, 2005 decision that execution cannot lie against him until petitioner law firm shall have first exhausted his co-defendants' properties, he being a mere guarantor of their debt, and the law firm did not appeal from such ruling.
But that supposed "ruling" is actually a mere statement or opinion, loosely made, that cannot impact on the final and executory judgment rendered in the original case on its merits, the dispositive portion of which reads:
2. Ordering defendant Johnny Young to pay, jointly and severally with the aforementioned defendants, the total amount of �1,500,000.00 at the same rate of interest and penalty charges as aforestated.[24]
The present incident emanates from CA-G.R. SP 82240, the second time the case came up to the CA, and is concerned merely with the execution of the final judgment against respondent Young and his co-defendants. The CA cannot in this action modify the final and executory judgment in the original case quoted above. It does not say that respondent Young's liability is conditioned on the exhaustion of his co-defendants' properties. It directs him to pay the judgment creditor without any precondition. In the execution of the court's judgment, the dispositive portion should be considered as the final disposition of the case before it.[25]
Of course, where the inevitable conclusion from the body of the decision is quite clear and shows some mistake in the dispositive portion, the body of the decision will prevail.[26] Here, however, what respondent Young relies solely on for invoking the principle of excussion is the following portion of the decision:
xxx Defendant Johnny Young is also liable but only up to the amount of P1 ,500,000.00; the Continuing Guaranty he signed being for the said amount only.[27]
It might be that respondent Young was actually a mere guarantor of his co-defendants' loan with the bank. But neither the RTC nor the CA on appeal from the original case touched in their respective decisions the nature, whether direct or contingent, of Young's liability to the bank. Indeed, the above-quoted portion of the RTC decision mentioned the "Continuing Guaranty" he signed only to ascertain the amount of Young's liability. On the other hand, the dispositive portion of the decision reads plainly:
2. Ordering defendant Johnny Young to pay, jointly and severally with the aforementioned defendants, the total amount of P1,500,000.00 at the same rate of interest and penalty charges as aforestated.[28]
It is, therefore, too late for respondent Young to raise the matter of his subsidiary liability at this stage of the execution of the judgment against him or for the CA to entertain the same.
WHEREFORE, the Court GRANTS the petition, SETS ASIDE the March 22, 2006 and February 15, 2007 resolutions of the Court of Appeals of Cebu City in CA-G.R. SP 82240, and DIRECTS the Regional Trial Court of Cebu City to reinstate the writ of execution it issued against respondent Johnny Young at the initiative of petitioner Law Firm of Hermosisima & Inso in Civil Case CEB-1457I for the satisfaction of its charging lien.
Costs against respondent Young.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Conchita Carpio Morales (designated additional member per S..O. No. 807 in lieu of Brion, J., on leave), Teresita J. Leonardo-De Castro (designated additional member per S.O. No. 776), Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 9th day of December, 2009.
Very truly yours,
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1] Entitled "Solidbank Corporation v. Cleanwater, Inc., Robert Young, Francisco Tan and Johnny Young"
[2] Rollo, pp. 60-61.
[3] Id. at 65.
[4] Pursuant to the agreement between the parties as embodied in the promissory note sued upon.
[5] Rollo, p. 65.
[6] Docketed as CA-G.R. CV 46647.
[7] Rollo, pp. 99-106; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by former Associate Justices Cancio C. Garcia (retired Associate Justice of the Supreme Court) and Romeo A, Brawner (+)
[8] Id. at 106.
[9] Id
[10] Id. at 19.
[11] Id. at 107-109.
[12] See note 2.
[13] Rollo,pp. 114-118.
[14] Id. at 122-132.
[15] Id. at 170-177.
[16] Id. at 199-235; docketed as CA-G.R. SP 82240.
[17] Id. at 237-248; penned by Associate Justice Enrico A. Lanzanas and concurred in by Associate Justices Arsenio J. Magpale and Sesmando E. Villon.
[18] Id. at 265-273; penned by Associate Justice Enrico A. Lanzanas and concurred in by Associate Justices Arsenio J. Magpale and Parnpio A. Abarintos.
[19] Id. at 273.
[20] Id. at 274-275.
[21] Id. at 42.
[22] 160 PM. 1040,1046(1975).
[23] Citing Davidson v. La Plata County Board of County Commissioners, 59 P. 46, 26 Colo. 549 and Francisco, The Revised Rules of Court in the Philippines, Vol. IV-B, p. 665.
[24] See note 2.
[25] Ruby Industrial Corp. v. Court of Appeals, 348 Phil. 480, 495 (1998).
[26] People v. Lacbayan, 393 Phil S00, 810 (2000); Asian Center for Career and Employment System and Services, Inc. v. National Labor Relations Commission, 358 Phil. 380, 386 (1998).
[27] Rollo, p. 106.
[28] See note 2.
