THIRD DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 21 2004.

G.R. No. 162840 (Sergio F. Angeles vs. The Hon. Court of Appeals and University of the Philippines .)

Before us is a petition for review on certiorari assailing the September 29, 2003 decision ^[1] cralaw of the Court of Appeals in CA-G.R. SP No. 67882 which nullified and set aside the May 21, 2001 order of the Regional Trial Court (RTC) of Quezon City, Branch 220, for execution of a supposed award of attorney's fees based on a recorded charging lien.

In May 1985, petitioner Angeles represented the residents of Krus-na-Ligas in LRC Case No. Q-3151(85) before the RTC of Quezon City, Branch 100 (Branch 100), for the exclusion of a parcel of land occupied by his clients from TCT No. 192690, the certificate of land title of respondent University of the Philippines (UP).

UP filed a motion to dismiss on the ground of res judicata because the same issue had already been adjudicated by the RTC of Quezon City, Branch 102, in Civil Case No. Q-42736. Moreover, the Supreme Court itself had already upheld the validity and indefeasibility of TCT No. 9462, registered in the name of UP, (which was the old TCT before UP subdivided its property and TCT 192690 was issued on August 15, 1973.)

Branch 100 deferred resolution of UP's motion to dismiss upon the parties' manifestation that, even prior to the filing of LRC Case No. Q-3151(85), UP already intended to donate the disputed parcel of land to the Krus-na-Ligas residents. UP, however, clarified that the donation was an act of liberality and not a compromise or settlement of the case.

In view of UP's decision to donate the disputed property to the Krus-na-Ligas residents, subject to certain conditions, on June 13, 1986, Branch 100 dismissed LRC Case No. Q-3151(85):

After hearing, the manifestation of Atty. Angeles for the petitioners and Atty. Raval for the respondent University of the Philippines, since the petitioners' counsel was the first to make a manifestation that this case which is now filed before this court should be dismissed first without prejudice but because of the vehement objection of the University of the Philippines, thru counsel, that a dismissal without prejudice creates a cloud on the title of the University of the Philippines, and even with or without this case filed, the University of the Philippines has already decided to have the property subject of litigation donated to the residents of Cruz-na-Ligas with, or course, the conditions set therein, let this case be DISMISSED without pronouncement as to cost.

On August 20, 1986, upon motion of Angeles, Branch 100 issued an order directing the recording of 15% of the market value of the property donated as charging lien. This was later reduced to 6% on appeal of the Krus-na-Ligas residents. UP did not participate in the charging lien proceedings.

Meanwhile, on August 5, 1986, UP executed a Deed of Donation over a 15.8 hectare portion of the land covered by TCT No. 192690 to the Quezon City government as trustee of the qualified residents of Brgy. Krus-na-Ligas. The Deed of Donation specified certain terms and conditions for Quezon City's compliance. Failure to comply would result in the automatic reversion of the land to UP.

On December 18, 1986, Quezon City executed a Deed of Conveyance of 23,602 square meters of the same land to Angeles out of the 15.8 hectares donated by UP.

On February 6, 1988, due to Quezon City's violation of the deed's terms and conditions, UP revoked the donation.

However, despite the revocation of the donation, the Krus-na-Ligas residents moved for the execution of an alleged compromise agreement in the June 13, 1986 order of Branch 100 in LRC Case No. 3151(85). The said court granted the motion for execution on July 16, 1990.

On April 30, 1991, on Angeles' motion, Branch 100 issued an order directing UP to segregate and convey to him 6% of the disputed property.

UP filed a petition for certiorari and prohibition before the Court of Appeals (CA) docketed as CA-G.R. SP No. 24913 assailing the April 30, 1991 order of Branch 100.

On November 27, 1991, the CA permanently enjoined Branch 100 from proceeding with LRC Case No. Q-3151(85) and nullified the April 30, 1991 order. Subsequently we affirmed the CA decision.

On March 13, 1992, the Krus-na-Ligas residents, through Angeles, revived the case by filing Civil Case No. Q-92-11663 entitled "Baluyot, et al. vs. UP" in the RTC of Quezon City, Branch 220 (Branch 220). This time they questioned UP's revocation its donation to Quezon City as trustee of the residents. Angeles again filed a motion for execution of a "final and executory order of award of attorney's fees," claiming it had been previously granted by Branch 100 in LRC Case NO. Q-3151(85).

On February 14, 2000, Branch 220 dismissed the motion for execution on the ground of lack of jurisdiction since the order for the award of attorney's fees arose from LRC Case NO. Q-3151 (85) which had already been dismissed with finality. Angeles filed a motion for reconsideration. UP and Quezon City filed their respective oppositions. Angeles then filed a motion to withdraw his previous motion for reconsideration of the order of February 14, 2000 and instead filed a motion to execute a final and executory order of award of attorney's fees under the joint captions of Civil Case No. Q-92-11663 and LRC Case No. Q-3151 (85). UP opposed.

On May 21, 2001, Branch 220 granted the motion for execution of the order awarding attorney's fees to Angeles. UP's motion for reconsideration was denied on September 15, 2001.

UP appealed to the CA which rendered the assailed decision nullifying and setting aside the aforesaid May 21, 2001 order of Branch 220.

According to the CA, Branch 220 had neither the jurisdiction to resolve Angeles' motion to execute the "final and executory order of award of attorney's fees" nor the authority to issue the writ of execution for the attorney's fees of Angeles. The CA ruled that his right to enforce the charging lien was inchoate, that is, dependent on a judgment favorable to his clients, the Krus-na-Ligas residents. Since his clients failed to obtain favorable judgment in LRC Case No. Q-3151 (85), he had no right to the charging lien. The CA also ruled that the recovery of the alleged attorney's charging lien could not be made by mere motion because more than five years had lapsed since the dismissal of LRC Case No. Q-3151 (85). The motion was only ancillary to the main case and could not stand on its own. When the order of dismissal of LRC Case No. Q-3151 (85) became final and executory, there ceased to be any principal action. Consequently, said motion could not be acted upon anymore.

Angeles is now before us contending that the CA erred in declaring that Branch 220 acted with grave abuse of discretion resulting in lack or excess of jurisdiction. He insists that attorney's fees may be asserted in either the very action in which the services in question are rendered or in a separate action.

The argument is specious.

True, a duly recorded enforceable charging lien is within the jurisdiction of the court trying the main case and the jurisdiction subsists until the lien is settled. ^[2] cralaw This, however, applies only where the charging lien is valid and enforceable under the rules. Rule 138, Section 37 of the Rules of Court is clear and explicit:

xxx. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements.

Clearly, a charging lien, to be enforceable as security for the payment of attorney's fees, requires as a condition sine qua non a money judgment won by the attorney in favor of his client.

Here, the order of dismissal in LRC Case No. Q-3151 (85) neither provided for any money judgment nor granted any monetary award to any litigant, much less in favor of Angeles' clients, the plaintiffs therein. This being so, his supposed charging lien had therefore, under our rules, no legal basis.

There was nothing to support the charging lien or anything to which it could attach, in the same manner as an ordinary lien attaches to real or personal property.

The August 20, 1986 order of Branch 100 did not award attorney's fees but merely directed the recording of a charging lien:

AS PRAYED FOR, let the 15% of the market value of the property subject of the DEED OF DONATION be recorded as a charging lien on said property or properties, to secure the payment of attorney's fees.

Although the order provided that the charging lien was to be recorded "to secure the payment of attorney's fees," the actual award itself of attorney's fees was an entirely separate matter.

The recording of a charging lien to guarantee the payment of attorney's fees is not the same as an award of attorney's fees. By recording a charging lien on the subject property, the inchoate right of Angeles was merely being recognized but it did not constitute an award of attorney's fees which was already due and enforceable.

Stated otherwise, lawyer may record his claim before the rendition of judgment to establish his right to the lien, as distinguished from the enforcement thereof which takes place only after favorable judgment is secured for the client. ^[3] cralaw Thus, recording of an attorney's charging lien happens before final judgment while an award of attorney's fees is granted only after favorable judgment. In this case, Angeles' right was established with the recording of a charging lien of his fees but the enforceability of that right was contingent or dependent on a judgment favorable to his clients and awarding attorney's fees to him. This favorable judgment, however, never came about because the case filed by his clients was dismissed. Since nothing was awarded to Angeles' clients, he legally had no lien to enforce.

Note that Rule 138, Section 37 of the Rules of Court, earlier quoted, provides that a charging lien attaches only to judgments for money and executions. ^[4] cralaw

The language of the law is clear and unequivocal, and must therefore be taken to mean exactly what it says, barring any necessity for elaborate interpretation. ^[5] cralaw

Indeed, the Court has had occasion to rule that a charging lien does not attach to the property in litigation but is at most a personal claim enforceable by a writ of execution. ^[6] cralaw In Ampil vs. Juliano-Agrava, et al., ^[7] cralaw The Court declared that a charging lien presupposes that an attorney is able to secure a favorable money judgment for his client. In Director of Lands vs. Ababa, et al., ^[8] cralaw we held that a charging lien under Rule 138, Section 37 of the Revised Rules of Court is limited only to money judgments and not to judgments for the annulment of a contract or for delivery of real property. In Bacolod -Murcia Milling ^[9] cralaw we declared that in this jurisdiction, the lien does not attach to the property in litigation.

All told, we find the assailed decision of the Court of Appeals to be accord with the law and jurisprudence.

WHEREFORE, the petition is hereby denied due course.

SO ORDERED.

Very truly yours,

(Sgd.) JULIETA Y. CARREON
Clerk of Court