THIRD DIVISION
|
RAUL
H. SESBREÑO, Petitioner, - versus - HON. COURT OF APPEALS,
PROVINCE OF CEBU, GOV. EDUARDO R. GULLAS, THE PROVINCIAL TREASURER, THE
PROVINCIAL AUDITOR, THE PROVINCIAL ENGINEER PATROCINIO BACAY (sued both in
their official and personal capacities), Respondents. |
G.R.
No. 161390
Present: YNARES-SANTIAGO, J.,
Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: April 16,
2008 |
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
For
review is the Decision[1] of
the Court of Appeals (CA) dated
On
AGREEMENT
WE, the undersigned, hereby agree to pay Atty. Raul H. Sesbreño, thirty (30%) percent of whatever back salaries, damages, etc. that we may recover in the mandamus and other cases that we are filing or have filed against the Province of Cebu, the Provincial Governor, etc., whether or not the said cases will be amicably settled or decided by the courts by final judgment. We shall take care of all expenses in connection with the said cases.[8]
During
the pendency of the aforesaid cases or on
The camineros obtained favorable judgment when the Court of First
Instance (now RTC) of
When respondent Eduardo R. Gullas
(Gov. Gullas) assumed the position of governor of
On
1. The respondent
x x x x
9. That the amounts payable to the employees concerned represented by Atty. Raul H. Sesbreño is subject to said lawyer’s charging and retaining liens as registered in the trial court and in the Honorable Court of Appeals.
x x x x
11. That upon request of the employees concerned,
most of whom are in dire actual financial straits, the
Apparently, the camineros waived their right to reinstatement embodied in the CFI
decision and the province agreed that it immediately pay them their back
salaries and other claims. This Court
adopted said compromise agreement in our decision[13] dated
In
view of the finality of the above decision, the camineros, through their new counsel (who substituted for the
petitioner), moved for its execution.
The court then ordered the issuance of a partial writ of execution directing
the payment of only 45% of the amount due them based on the computation of the
provincial engineering office as audited by the authority concerned.[15] The court did not release the remaining 55%,
thus holding in abeyance the payment of the lawyer’s fees pending the
determination of the final amount of such fees.[16] However, instead of complying with the court
order directing partial payment, the
Thus,
petitioner filed the complaint for Damages
(Thru Breach of Contract) and Attorney’s Fees against the Province of Cebu,
the provincial governor, treasurer, auditor, and engineer in their official and
personal capacities, as well as against his former clients (the camineros).[18]
Petitioner
anchored his claim on the provision of the Civil Code, specifically Article 19[19]
thereof. He alleged that by directly
paying the camineros the amounts due
them, the respondents induced the camineros
to violate their written contract for attorney’s fees.[20] He likewise claimed that they violated the
compromise agreement approved by the Court by computing the camineros’ money claims based on the
provincial instead of the national wage rate which, consequently, yielded a
lower amount.[21] Petitioner went on to say that although he
was not a party to the above contracts, by virtue of the registration of his
charging lien, he was a quasi-party and thus, had legal standing to institute
the case below.[22]
On
On
Wherefore,
for all the foregoing, judgment is rendered, ordering the
(a)
P669,336.51
in actual damages; with interest of 12% per annum from date of demand until
fully paid;
(b)
P20,000.00
in moral damages;
(c)
P5,000.00
in litigation expenses; and
(d) To pay the costs.[24]
While maintaining the validity of the
compromise agreement, the trial court found that the petitioner’s money claims
should have been computed based on the national and not the provincial rate of
wages paid the camineros. Accordingly, the court declared that the
petitioner was prejudiced to the extent of the difference between these two rates. The court further upheld the petitioner’s
status as a quasi-party considering that he had a registered charging
lien. However, it did not give credence
to the petitioner’s claim that the respondent public officials induced the camineros to violate their contract, and
thus, absolved them from liability.
On appeal, the CA reversed the trial
court’s decision and dismissed the complaint.[25] The appellate court concluded that petitioner
failed to sufficiently establish his allegation that the respondents induced
the camineros to violate the
agreement for attorney’s fees and the compromise agreement, and that he
suffered damage due to respondents’ act of directly paying the camineros the amounts due them.[26]
Hence, the instant petition. In his Memorandum, petitioner raises the
following issues:
1. RESPONDENT COURT OF APPEALS ERRED IN NOT AFFIRMING THE TRIAL COURT DECISION DUE TO LONG DELAY IN DECIDING CA-G.R. CV NO. 43287.
2. RESPONDENT COURT OF APPEALS ERRED IN NOT DISMISSING THE APPEAL IN CA-G.R. CV NO. 43287 FOR FAILURE TO PROSECUTE AND DUE TO THE FATALLY-DEFECTIVE APPELLANT’S BRIEF.
3. RESPONDENT COURT OF APPEALS ERRED IN REVERSING THE TRIAL COURT DECISION BY DECLARING THAT THE TRIAL COURT SHOULD NOT FIX THE ATTORNEY’S FEES OF PETITIONER DESPITE THE FACT THAT THE TRIAL COURT DECISION IS CLEAR THAT WHAT WAS ADJUDGED WAS THE DECLARATION THAT THERE WAS BREACH OF THE COMPROMISE CONTRACT AND DAMAGES ARE TO BE AWARDED THE PETITIONER.
4. RESPONDENT COURT OF APPEALS ERRED IN
NOT DECLARING RESPONDENTS GULLAS, RESENTES, SANCHEZ AND BACAY AS PERSONALLY
LIABLE AND THAT THEIR PERSONAL LIABILITY IS SOLIDARY WITH THAT OF
5. RESPONDENT COURT OF APPEALS ERRED IN NOT DECLARING THAT PRIVATE RESPONDENTS ARE SOLIDARILY LIABLE TO PAY TO PETITIONER ACTUAL OR COMPENSATORY, MORAL, EXEMPLARY, NOMINAL, TEMPERATE DAMAGES, LITIGATION EXPENSES AND LOSS OF EARNINGS AND INTERESTS.[27]
The petition
is bereft of merit.
Petitioner
insists that the CA should have affirmed the trial court’s decision in view of
the delay in resolving the case, and should have denied the appeal because of
the formal defects in the appellant’s brief.[28]
Petitioner cites the cases of Malacora v.
Court of Appeals[29]
and Flora v. Pajarillaga[30] where this Court held that an appealed
case which had been pending beyond the time fixed by the Constitution should be
“deemed affirmed.”
We cannot
apply the cited cases to the one at bench because they were decided on the
basis of Section 11 (2), Article X of the 1973 Constitution, which reads:
SEC. 11. x x x
(2) With respect to the Supreme Court and
other collegiate appellate courts, when the applicable maximum period shall
have lapsed without the rendition of the corresponding decision or resolution
because the necessary vote cannot be had, the judgment, order, or resolution
appealed from shall be deemed affirmed x x x.
That provision
is not found in the present Constitution.
The court, under the 1987 Constitution, is now mandated to decide or
resolve the case or matter submitted to it for determination within specified
periods.[31] Even when there is delay and no decision or
resolution is made within the prescribed period, there is no automatic
affirmance of the appealed decision. The
appellate court, therefore, cannot be faulted in not affirming the RTC’s decision. While we do not tolerate delay in the
disposition of cases, we cannot dismiss appealed cases solely because they had
been pending in court for a long period, especially when the appeal is highly
meritorious as in the present case.
Likewise, we cannot
agree with the petitioner that the appealed case be dismissed on account of the
formal defects in respondent’s appellant’s brief filed before the CA. The requirements laid down by the Rules of
Court on the contents of the brief are intended to aid the appellate court in
arriving at a just and proper conclusion of the case.[32] However, despite its deficiencies,
respondent’s appellant’s brief is sufficient in form and substance as to
apprise the appellate court of the essential facts and nature of the case, as
well as the issues raised and the laws necessary for the disposition of the
same.[33] Thus, we sustain the CA’s decision to rule on
the merits of the appeal instead of dismissing it on mere technicality.
Now, on the
main issue of whether or not respondents are liable for damages for breach of
contract.
Petitioner
clarifies that he instituted the instant case for breach of the compromise
agreement and not for violation of the agreement for attorney’s fees as
mistakenly concluded by the appellate court.
He also cites Calalang v. De Borja[34]
in support of his right to collect the amounts due him against the judgment
debtor (the respondents).[35] Lastly, petitioner argues that the respondent
public officials acted beyond the scope of their authority when they directly
paid the camineros their money claims
and failed to withhold the petitioner’s fees.
There is, according to the petitioner, a showing of bad faith on the
part of the province and the public officials concerned.
After a careful scrutiny of the record
of the case, we find no compelling reason to disturb the appellate court’s
conclusion. We would like to stress at
this point that the compromise agreement had been validly entered into by the
respondents and the camineros and the
same became the basis of the judgment rendered by this Court. Its validity, therefore, had been laid to
rest as early as 1979 when the Court promulgated its decision in Commissioner of Public Highways v. Burgos.[36] In fact, the judgment had already been fully
satisfied by the respondents. It was precisely
this full satisfaction of judgment that gave rise to the instant controversy,
based primarily on the petitioner’s claim that he was prejudiced because of the
following: 1) the wrong computation in the camineros’
money claims by using the provincial and not the national wage rate; and 2) the
mode of satisfying the judgment through direct payment which impaired his
registered charging lien.
Petitioner’s claim for attorney’s
fees was evidenced by an agreement for
attorney’s fees voluntarily executed by the camineros where the latter agreed to pay the former “thirty (30%)
percent of whatever back salaries, damages, etc. that they might recover
in the mandamus and other cases that they were filing or have filed.” Clearly, no fixed amount was specifically
provided for in their contract nor was a specified rate agreed upon on how the
money claims were to be computed. The
use of the word “whatever” shows that
the basis for the computation would be the amount that the court would award in
favor of the camineros. Considering that the parties agreed to a
compromise, the payment would have to be based on the amount agreed upon by
them in the compromise agreement approved by the court. And since the compromise agreement had assumed
finality, this Court can no longer delve into its substance, especially at this
time when the judgment had already been fully satisfied. We cannot allow the petitioner to question
anew the compromise agreement on the pretext that he suffered damage. As long as he was given the agreed percentage
of the amount received by the camineros,
then, the agreement is deemed complied with, and petitioner cannot claim to
have suffered damage.
Petitioner likewise claims that he
was prejudiced by respondents’ act in directly paying the camineros the amounts due them, as it rendered inutile the charging
lien duly registered for his protection.
To
insure payment of his professional fees and reimbursement of his lawful
disbursements in keeping with his dignity as an officer of the court, the law
creates in favor of a lawyer a lien, not only upon the funds, documents and
papers of his client which have lawfully come into his possession until what is
due him has been paid, but also a lien upon all judgments for the payment of
money and executions issued pursuant to such judgments rendered in the case
wherein his services have been retained by the client.[37] Section 37, Rule 138 of the Rules of Court
specifically provides:
Section 37.
Attorney’s liens. – An attorney shall have a lien upon the funds,
documents and papers of his client, which have lawfully come into his
possession and may retain the same until his lawful fees and disbursements have
been paid, and may apply such funds to the satisfaction thereof. 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.
A
charging lien is an equitable right to have the fees and costs due to the
lawyer for services in a suit secured to him out of the judgment or recovery in
that particular suit. It is based on the
natural equity that the plaintiff should not be allowed to appropriate the
whole of a judgment in his favor without paying thereout for the services of
his attorney in obtaining such judgment.[38]
In
this case, the existence of petitioner’s charging lien is undisputed since it
was properly registered in the records.
The parties even acknowledged its existence in their compromise
agreement. However, a problem arose when
the respondents directly paid in full the camineros’ money claims and did not withhold that
portion which corresponds to petitioner’s fees.
When
the judgment debt was fully satisfied, petitioner could have enforced his lien
either against his clients (the camineros
herein) or against the judgment debtor (the respondents herein). The clients, upon receiving satisfaction of
their claims without paying their lawyer, should have held the proceeds in
trust for him to the extent of the amount of his recorded lien, because after
the charging lien had attached, the attorney is, to the extent of said lien,
regarded as an equitable assignee of the judgment or funds produced by his
efforts.[39] The judgment debtors may likewise be held
responsible for their failure to withhold from the camineros the amount of attorney’s fees due the petitioner.
In
the instant case, the petitioner rightly commenced an action against both his
clients and the judgment debtors.
However, at the instance of the petitioner himself, the complaint
against his clients was withdrawn on the ground that he had settled his
differences with them. He maintained the
case against respondents because, according to him, the computation of the camineros’ money claims should have been
based on the national and not the provincial wage rate. Thus, petitioner insists that the respondents
should be made liable for the difference.
While
the respondents may have impaired the petitioner’s charging lien by satisfying
the judgment without regard for the lawyer’s right to attorney’s fees, we
cannot apply the doctrine enunciated in Calalang
v. Judge de Borja,[40]
because of the peculiar circumstances obtaining in this case. In Calalang,
this Court stressed that the judgment debtor may be held responsible for his
failure to withhold the amount of attorney’s fees in accordance with the duly
registered charging lien.[41] However, there is a disparity between the two
cases, because, in this case, the petitioner had withdrawn his complaint against
the camineros with whom he had a
contract for legal services. The
withdrawal was premised on a settlement, which indicates that his former
clients already paid their obligations.
This is bolstered by the certification of the clerk of court that his
former clients had deposited their passbooks to ensure payment of the agreed fees. Having been paid by his clients in accordance
with the agreement, his claim against the respondents, therefore, has no leg to
stand on.
Neither
can the petitioner rely on Bacolod Murcia
Milling Co., Inc. v. Henares, etc.[42]
where this court declared that satisfaction of the judgment, in general, does
not by itself bar or extinguish the attorney’s liens, as the court may even
vacate such satisfaction and enforce judgment for the amount of the lien.[43] However, the satisfaction of the judgment
extinguishes the lien if there has been a waiver, as shown either by the
attorney’s conduct or by his passive omission.[44] In the instant case, petitioner’s act in
withdrawing the case against the camineros
and agreeing to settle their dispute may be considered a waiver of his
right to the lien. No rule will allow a
lawyer to collect from his client and then collect anew from the judgment
debtor except, perhaps, on a claim for a bigger amount which, as earlier discussed,
is baseless.
Lawyering
is not a moneymaking venture and lawyers are not merchants. Law advocacy is not capital that yields
profits. The returns it births are
simple rewards for a job done or service rendered. It is a calling that, unlike mercantile
pursuits which enjoy a greater deal of freedom from governmental interference,
is impressed with a public interest, for which it is subject to state
regulation.[45]
Considering
that petitioner’s claim of higher attorney’s fees is baseless and considering
further that he had settled his case as against his former clients, we cannot
sustain his right to damages for breach of contract against the respondents,
even on the basis of Articles 1191[46]
or 1311.[47] Although we sustain his status to institute
the instant case, we cannot render a favorable judgment because there was no
breach of contract. Even if there was
such a breach, he had waived his right to claim against the respondents by
accepting payment and/or absolving from liability those who were primarily
liable to him. Thus, no liability can be
imputed to the
Lastly,
we cannot ascribe bad faith to the respondents who directly paid the camineros the amounts due them. The records do not show that when they did
so, they induced the camineros to
violate their contract with the petitioner; nor do the records show that they
paid their obligation in order to cause prejudice to the petitioner. The attendant circumstances, in fact, show
that the camineros acknowledged their
liability to the petitioner and they willingly fulfilled their obligation. It would be contrary to human nature for the
petitioner to have acceded to the withdrawal of the case against them, without
receiving the agreed attorney’s fees.
WHEREFORE, premises considered, the
petition is hereby DENIED. The Decision of the Court of Appeals dated
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
MA. ALICIA
AUSTRIA-MARTINEZ Associate Justice |
MINITA V. CHICO-NAZARIO Associate Justice |
RUBEN T. REYES
Associate
Justice
A T T E S T A T I O N
I attest 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’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Chairperson,
Third Division
C E R T I F I C A T I O
N
Pursuant to Section 13, Article
VIII of the Constitution and the Division Chairperson's Attestation, I certify
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
REYNATO
S. PUNO
Chief
Justice
[1] Penned by Associate Justice Eliezer R. De Los Santos, with Associate Justices Romeo A. Brawner and Jose C. Mendoza, concurring; rollo, pp. 45-59.
[2] Rollo, pp. 97-98.
[3] Penned by Judge Ramon AM. Torres; rollo, pp. 99-116.
[4] They were permanent laborers holding positions in the national plantilla of floating personnel chargeable against the “JJ” funds with particular assignments at the First Engineering District of Cebu.
[5] Entitled “Cesar Pañares, et al. v. Gov.
Rene Espina, et al.”
[6] Entitled “Camia Hermosa, et al. v. Gov. Rene Espina, et al.”
[7] Records, p. 9.
[8]
[9]
[10] The dispositive portion of the decision reads:
WHEREFORE,
judgment is hereby rendered ordering the alternative respondents Commissioner
of Public Highways and the District Engineer of the First Engineering District
of Cebu, Bureau of Public Highways, to reinstate the petitioner to their
original positions with back salaries, together with all the privileges and
salary adjustments or increases, from
SO ORDERED. (Exh. “TT”)
[11] Records, pp. 10-15.
[12]
[13] No. L-36752-53,
[14] But the same was amended on
[15] Records, p. 123.
[16] Rollo, p. 47.
[17]
[18] Records, pp. 1-8.
[19] Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
[20] Rollo, pp. 47-48.
[21]
[22]
[23] Records, pp. 423-424.
[24] Rollo, p. 116.
[25]
[26]
[27]
[28]
[29] No. L-51042,
[30] G.R. No. L-24806,
[31] CONSTITUTION, Art. VIII, Sec. 15(4).
[32] Phil.
Coconut Authority v. Corona International, Inc., 395 Phil 742, 750 (2000).
[33] Phil.
Coconut Authority v. Corona Internation, Inc., supra.
[34] 160
Phil 1040, 1045 (1975).
[35] Rollo, pp. 199-200.
[36] Supra,
note 13.
[37] Legal Ethics by Ruben E. Agpalo, 1989 Edition, p. 359.
[38] Bacolod
Murcia Milling Co., Inc. v. Henares, etc., 107 Phil 560, 567 (1960).
[39] Bacolod
Murcia Milling Co., Inc. v. Henares, etc., supra at 568.
[40] Supra.
[41] Supra at 1045.
[42] Supra.
[43] Supra.
[44] Bacolod
Murcia Milling Co., Inc. v. Henares, etc., supra.
[45] Bach
v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334,
[46] The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law.
[47] Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.
If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.