Republic
of the
Supreme
Court
FIRST DIVISION
|
THE LAW FIRM OF RAYMUNDO A. ARMOVIT, Petitioner, - versus - COURT OF APPEALS and BENGSON COMMERCIAL BUILDING,
INC., Respondents. |
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G.R. No. 154559 Present: CORONA, C.J.,
Chairperson, LEONARDO-DE
CASTRO, BERSAMIN, DEL
CASTILLO, and VILLARAMA, JR., JJ. Promulgated: October
5, 2011 |
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LEONARDO-DE
CASTRO, J.:
Petitioner Law Firm of
Raymundo A. Armovit (Armovit Law Firm) captioned the present action as a Petition
and/or Motion for Execution. As a Petition
for Certiorari, petitioner assails
the Resolutions of the Court of Appeals in CA-G.R. CV No. 43099 dated November
28, 1996,[1] August
27, 2001[2] and
June 11, 2002,[3] as well
as the Orders of the Regional Trial Court (RTC) of San Fernando, La Union in
Civil Case No. 2794 dated February 24 and June 7, 1993. As a Motion for Execution, petitioner seeks
the execution of the 1991 Decision of this Court in G.R. No. 90983, entitled Law Firm of Raymundo A. Armovit v. Court of
Appeals.[4]
On August 20, 1965 and
November 23, 1971, Bengson Commercial Building, Inc. (BCBI) obtained loans from
the Government Service Insurance System (GSIS) in the total amount of P4,250,000.00,
secured by real estate and chattel mortgages. When BCBI defaulted in the payment of the
amortizations, GSIS extrajudicially foreclosed the mortgaged properties and
sold them at public auction where it emerged as the highest bidder.[5]
With the Armovit Law
Firm as its counsel, BCBI filed an action to annul the extrajudicial
foreclosure on June 23, 1977 with the then Court of First Instance (CFI) of La
Union. The action was docketed as Civil
Case No. 2794. After trial, the CFI, by
then renamed Regional Trial Court, rendered a Decision: (1) nullifying the foreclosure of BCBIs
mortgaged properties; (2) ordering the cancellation of the titles issued to
GSIS and the issuance of new ones in the name of BCBI; (3) ordering BCBI to pay
GSIS P900,000.00 for the debenture bonds; and (4) directing GSIS to (a)
restore to BCBI full possession of the foreclosed properties, (b) restructure
the P4.25 Million worth of loans at the legal rate of interest from the
finality of the judgment, (c) pay BCBI P1.9 Million representing accrued
monthly rentals and P20,000.00 rental monthly until the properties are
restored to BCBIs possession, and (d) pay the costs.[6]
GSIS appealed to the
Court of Appeals. The appeal was docketed
as CA-G.R. CV No. 09361. It appears that
the Armovit Law Firm ceased to be the counsel of BCBI sometime before the
appeal of GSIS. The said law firm and
BCBI dispute the legality of the replacement, with BCBI claiming that the Armovit
Law Firm had been remiss in its duties as BCBIs counsel.
On January 19, 1988,
the Court of Appeals affirmed the RTC Decision with modification. The dispositive portion of the Decision of
the appellate court reads:
WHEREFORE,
we affirm the appealed decision with MODIFICATION, as follows:
1. The
foreclosure and auction sale on February 10, 1977 of BENGSON's properties
covered by real estate and chattel mortgages mentioned in the notice of sale
issued by the La Union provincial sheriff are set aside.
2. The
writ of possession issued to GSIS as the highest bidder by the defunct Court of
First Instance, sitting as a cadastral court, as a consequence of said
foreclosure sale, is annulled.
3. The
Register of Deeds of La Union is ordered to cancel the present certificates of
title covering those properties and issue new ones in lieu thereof in the same
names and with the same annotations, terms and conditions, including the
mortgage in question, as appeared (sic) in the previous certificates of title
as of the date BENGSON constituted the mortgage on those properties in favor of
GSIS, it being understood that all expenses to be incurred incidental to such
title cancellation and issuance shall be borne by GSIS.
4. GSIS
is ordered to restore to BENGSON full possession of those mortgaged properties
situated in San Fernando, La Union.
5. All
properties under the mortgage in question, including those parcels of land
situated in San Fernando, La Union and in Quezon City, shall remain under
mortgage in favor of GSIS.
6. GSIS
is ordered to restructure BENGSON's loan as promised, the restructuring to
proceed from the premise that as of the foreclosure date, i.e. February 10,
1977, BENGSON had paid GSIS an aggregate amount of P286,000.00 on the
subject loan.
7. The
interest rates per annum stated in the first and second mortgage loan contracts
entered into between BENGSON and GSIS, as well as all other terms and
conditions provided for therein except as qualified by the subsequent
agreement of the parties regarding the promised loan restructuring and
deferment of foreclosure by reason of the arrearages incurred shall remain as
originally stipulated upon by the parties.
8. BENGSON
is ordered to pay GSIS the debenture bond with an aggregate face value of P900,000.00
at the stipulated interest rate of 14% per annum, quarterly; and to pay 14%
interest per annum, compounded monthly, on the interest on said debenture bond,
that had become due quarterly, in accordance with the stipulations provided for
therein.
9. GSIS shall reimburse BENGSON
the monthly rent of P20,000.00 representing income produced by one of
the latter's mortgaged properties, i.e., the Regent Theatre building, from
February 15, 1977 until GSIS shall have restored the full possession of said
building, together with the land on which it stands, to BENGSON.
10. The
entire record of this case is ordered remanded to the trial court and the
latter is directed to ascertain whether such mortgaged properties as
machineries, equipment, and other movie paraphernalia, etc., are in fact no
longer in existence per report of the provincial sheriff, as well as to
determine their replacement value if GSIS fails to return them; and, as prayed
for by BENGSON, to receive evidence from the parties on the costs of suit
awarded to it.
No pronouncement
as to cost of this appeal. (Emphasis supplied.)[7]
The Decision of the Court of
Appeals became final and executory on February 10, 1988 and the records were remanded
to the court a quo on March 14, 1988.
The GSIS did not file a Motion for Reconsideration
or an appeal therefrom.[8]
The subsequent proceedings were summarized
by this Court in its Decision in G.R. No. 90983,[9]
which is now the subject of petitioners Motion for Execution:
It x x x appears
that when Atty. Armovit sought execution with the court a quo, he was informed by Romualdo Bengzon, president of the
respondent corporation, that the firm had retained the services of Atty.
Pacifico Yadao. He was also informed
that the company would pay him the agreed compensation and that Atty. Yadao's
fees were covered by a separate agreement. The private respondent, however, later ignored
his billings and over the phone, directed him allegedly not to take part in the
execution proceedings. Forthwith, he
sought the entry of an attorney's lien in the records of the case. The lower court allegedly refused to make the
entry and on the contrary, issued an order ordering the Philippine National
Bank to "release to the custody of Mr. Romualdo F. Bengzon and or Atty.
Pacifico Yadao" the sum of P2,760,000.00 (ordered by the Court of
Appeals as rentals payable by the Government Service Insurance System).
Atty.
Armovit then moved, apparently for the hearing of his motion to recognize
attorney's lien, and thereafter, the trial court issued an order in the tenor
as follows:
When this
case was called for hearing on the petition to record attorney's charging lien,
Attys. Armovit and Aglipay appeared for the petitioners.
Atty.
Armovit informed the Court that they are withdrawing the petition considering
that they are in the process of amicably settling their differences with the
plaintiff, which manifestation was confirmed by Atty. Yadao as well as the
plaintiffs, Romualdo Bengson and Brenda Bengson, who are present today.
In view
of this development, the petition to record attorneys charging lien, the same
being in order and not contrary to law, morals and public policy, as prayed for
by Attys. Armovit and Aglipay, it is hereby withdrawn. The parties, therefore are hereby directed to
comply faithfully with their respective obligations.
SO
ORDERED.
However,
upon the turnover of the money to the private respondent, Mrs. Brenda Bengson
(wife of Romualdo Bengson) delivered to Atty. Armovit the sum of P300,000.00
only. Atty. Armovit protested and demanded the amount of P552,000.00
(twenty percent of P2,760,000.00), for which Mrs. Bengson made
assurances that he will be paid the balance.
On
November 4, 1988, however, Atty. Armovit received an order emanating from the
trial court in the tenor as follows:
During the
hearing on the petition to record attorney's charging lien on October 11, 1988,
Attys. Armovit and Aglipay withdrew their petition to record attorney's
charging lien, which was duly approved by the Court, after which the Court
directed the parties to comply faithfully with their respective obligations.
In
compliance with the Order of this Court, the plaintiff submitted a pleading
denominated as compliance alleging that petitioner (Atty. Armovit) has already
received from the plaintiff the sum of P300,000.00, Philippine Currency,
as and by way of attorneys fees. With
the receipt by the petitioner from the plaintiff of this amount, the latter has
faithfully complied with its obligation.
WHEREFORE,
the Order of this Court dated October 11, 1988 approving the withdrawal of the
petition to record attorneys charging lien, on motion of the petitioner, is
now final.
SO
ORDERED.
Reconsideration
having been denied, Atty. Armovit went to the Court of Appeals on a petition
for certiorari and prohibition.
On August
25, 1989, the Court of Appeals rendered judgment dismissing the petition. Reconsideration having been likewise denied
by the Appellate Court, Atty. Armovit instituted the instant appeal.[10]
This
Court rendered its Decision in the foregoing case on September 27, 1991. The relevant portions of the Decision,
including the fallo thereof, are
quoted hereunder:
The
disposition of the Court of Appeals was that since the receipt evidencing
payment to Atty. Armovit of the sum of P300,000.00 "was without any
qualification as 'advance' or 'partial' or 'incomplete'," the intention of
the parties was that it was full payment. The Appellate Court also noted Atty. Armovit's
withdrawal of his motion to record attorney's lien and figured that Atty.
Armovit was satisfied with the payment of P300,000.00.
The only
issue is whether or not Atty. Armovit is entitled to the sum of P252,000.00
more, in addition to the sum of P300,000.00 already paid him by the
private respondent.
There is
no question that the parties had agreed on a compensation as follows:
a) P15,000.00
by way of acceptance and study fee, payable within five (5) days from date;
b) 20%
contingent fee computed on the value to be recovered by favorable judgment in
the cases; and
c.) the
execution and signing of a final retainer agreement complete with all necessary
details.
(While
the parties' agreement speaks of "a final retainer agreement" to be
executed later, it does not appear that the parties did enter into a
"final" agreement thereafter.)
The private
respondent's version however is that while it may be true that the agreed
compensation was twenty percent of all recoveries, the parties later agreed on
a compromise sum approved allegedly by the trial court, per its Order of
October 11, 1988.
x x x x
Contingent
fees are valid in this jurisdiction. It
is true that attorney's fees must at all times be reasonable; however, we do
not find Atty. Armovit's claim for "twenty percent of all recoveries"
to be unreasonable. In the case of Aro v. Naawa, decided in 1969, this
Court awarded the agreed fees amid the efforts of the client to deny him fees
by terminating his services. In parallel
vein, we are upholding Atty. Armovit's claim for P252,000.00 more
pursuant to the contingent fee agreement amid the private respondent's own
endeavours to evade its obligations.
x x x x
WHEREFORE,
premises considered, the petition is GRANTED. The private respondent is ORDERED
to pay the petitioner the sum of P252,000.00. Costs against the private respondent. [11]
Neither party filed a
Motion for Reconsideration from the Decision of this Court. Thus, the Decision became final and executory
on December 17, 1991.[12]
On October 29, 1992,
the Armovit Law Firm filed in Civil Case No. 2794 an Omnibus Motion praying,
among other things, that a final assessment of its attorneys fees be computed
at 20% on the value of all the properties recovered by BCBI, deducting the
amount already paid which is 20% of the money judgment for P1,900,00.00;
and that a writ of execution for the full payment of the balance of its
attorneys fees be issued.[13]
On February 24, 1993, the
RTC issued the first assailed Order denying the Armovit Law Firms Omnibus
Motion. The RTC held that the issue regarding
attorneys fees had already been resolved by this Court in G.R. No. 90983,
whereby this Court ordered BCBI to pay the Armovit Law Firm the sum of P252,000.00,
in addition to the P300,000.00 already paid. The RTC noted that the Decision of this Court
had long become final and executory and in fact, was already executed upon the payment
of the sum of P252,000.00. The
RTC also stressed that the Armovit Law Firm had no more participation in the
prosecution of the case before the appellate court, as BCBI was, by then, already
represented by another counsel. Thus,
according to the RTC, it would constitute unjust enrichment to grant the Armovit
Law Firm attorneys fees despite having no more participation in the case.[14]
The Armovit Law Firm
filed a Motion for Reconsideration, which was denied by the RTC on June 7,
1993.[15]
The Armovit Law Firm
appealed the Orders of the RTC to the Court of Appeals. The appeal was docketed as CA-G.R. CV No.
43099.
When the Court of
Appeals became repeatedly unsuccessful in securing the original records of
Civil Case No. 2794 due to the progress of the execution of the same in the
trial court, the appellate court, in the first assailed Resolution dated
November 28, 1996, directed Atty. Raymundo Armovit to submit a certified copy
of the complete original records at his expense.[16] Atty. Armovit filed a Motion for
Reconsideration praying that BCBI be ordered to defray the costs of the copying
of the pertinent records, as he has no responsibility whatsoever for the
delay. Atty. Armovit added that the
photocopying of the records would be futile as there was still the need to
await the termination of the proceedings before the trial court.[17] On April 24, 2001, the Court of Appeals
received a letter from the Officer-in-Charge of the RTC informing the appellate
court of the pendency before this Court of G.R. No. 137448 and G.R. No. 141454,
which were both connected with the execution of the Decision in Civil Case No.
2794. Due to all of the foregoing
circumstances, the Court of Appeals issued on August 27, 2001 the second assailed
Resolution ordering that CA-G.R. CV No. 43099 be archived temporarily pending
receipt of the original records of Civil Case No. 2794.[18] The Armovit Law Firms Motion for
Reconsideration was denied in the third assailed Resolution dated June 11,
2002.[19]
On September 9, 2002,
the Armovit Law Firm filed the present action captioned Petition and/or Motion
for Execution, a joint Petition for Certiorari
and Motion for Execution, with the following prayer:
WHEREFORE,
petitioner respectfully prays that the instant petition for certiorari be given
due course and, after due proceedings, judgment be rendered setting aside as
null and void ab initio the respondent
courts Orders dated February 24 and June
7, 1993 (Annexes A and B) and Resolutions
dated November 28, 1996, August 27, 2001 and June 11, 2002 (Annexes C, D
and E); and ordering respondent trial court as follows:
1. To
immediately issue a writ of execution of the final and executory Decision of
September 29, 1991, of the Supreme Court in Law
Firm of Raymundo A. Armovit vs. Court of Appeals, et al. (G.R. No. 90983)
on the twenty percent of all recoveries on the following:
a. All
the mortgaged properties recovered by private respondent from the GSIS by
annotating petitioners charging lien at the back of their corresponding
titles.
b. The P29,982,824.19
received by private respondent on September 26, 1994, as per Sheriffs Return dated October 3, 1994
(Annex EE), plus the legal rate of interest from such date until fully paid.
2. To
assess the value of the real properties recovered by private respondent from
the GSIS and apply petitioners charging lien by deducting therefrom the sum of
P552,000.00 priorly applied to the accumulated rentals recovered from
GSIS by private respondent. After the
assessment and determination of the value of petitioners twenty percent of all recoveries to cause the execution thereof.[20]
According to the Armovit
Law Firm, the RTC and the Court of Appeals committed the following legal
errors:
I.
THE TRIAL COURT ERRED IN VARYING
THE FINAL AND EXECUTORY SUPREME COURT DECISION BY LIMITING THE EXECUTION OF
PETITIONERS ATTORNEYS FEES OF TWENTY PERCENT OF ALL RECOVERIES ONLY TO THE
RENTALS AND EXCLUDING THE REST OF THE RECOVERIES MADE BY THE BENGSONS.
II.
THE COURT OF APPEALS ERRED IN
SENDING PETITIONERS APPEAL TO THE ARCHIVES.
III.
THE APPELLATE AND TRIAL COURTS
ERRED IN DEFYING THE SUPREME COURT IN ITS FINAL AND EXECUTORY DECISION AWARDING
PETITIONER A CONTINGENT FEE OF TWENTY PERCENT OF ALL RECOVERIES.[21]
The present action is
devoid of merit.
For convenient
reference, the dispositive portion of the judgment sought to be executed,
namely our Decision in G.R. No. 90983, is re-quoted as follows:
WHEREFORE,
premises considered, the petition is GRANTED. The private respondent is ORDERED
to pay the petitioner the sum of P252,000.00. Costs against the private respondent. [22]
As can be readily
observed, the Court ordered the payment of the sum of P252,000.00,
nothing more, nothing less. While the body
of the Decision quoted the agreement of the parties stating the compensation as
20% contingent fee computed on the value to be recovered by favorable judgment
on the cases,[23] this
Court specifically ordered BCBI to pay the Armovit Law Firm the aforementioned sum
only, in addition to the P300,000.00 already paid. BCBI was therefore held to be liable for the
total amount of P552,000.00, representing 20% of the P2,760,000.00
received by BCBI as rental payments from GSIS.
Significantly, the order upon GSIS to reimburse BCBI for rental
payments constitutes the only monetary award in favor of BCBI in the
final and executory Decision in CA-G.R. CV No. 09361.[24] This Court confined its award to the said sum despite
the fact that the Armovit Law Firm prayed for a much greater amount in its
Memorandum:
WHEREFORE,
petitioner respectfully prays for judgment declaring respondent trial courts
orders (Annexes N and Q) and respondent Court of Appeals confirmatory
decisions (Annexes R and T) null and void ab initio, and instead directing
that petitioner be paid his attorneys fees of 20% of all monies and properties
received and to be received by respondent BCBI in consequence of the final
judgment secured for them by petitioner (Annex E in rel. annex G), as
follows
a) 20% of
P2,760,000.00, the rental arrearages due and already received by BCBI, which amounts to P552,000.00,
minus the P300,000.00 paid unto petitioner, or a net balance of P252,000.00
due petitioner;
b) 20% of P15 million, the market
value of the commercial lots, multi-story buildings and residential lots and
houses, already placed in BCBIs possession, which amounts to P3,000,000.00 still due petitioner; and
c) 20% of P20 million worth of
hotel and movie machines and equipment units, centralized air conditioning facilities,
etc., to be paid in cash to BCBI, which
amounts to P4,000,000.00 in unpaid fees to petitioner
or, in the alternative, should
trial of facts be deemed appropriate, that the case be remanded for further
proceedings to receive petitioners evidence on the amount of his attorneys
fees due and unpaid, the same to be presided over by another trial judge chosen
by proper raffle; that respondent judge Genaro Gines be prohibited from any
further intervention in Civil Case No. 2794; and at all events, that treble
costs be fixed and imposed upon respondents.
Petitioner
also prays for such other reliefs as may be just and equitable in the premises.[25]
(Emphases supplied.)
As stated above, the Armovit
Law Firm did not file a Motion for Reconsideration of the Decision in G.R. No.
90983 to protest the exclusion in the dispositive portion of several items it
specifically prayed for in its pleadings.
The Decision thus became final and executory on December 17, 1991.[26] The Armovit Law Firm cannot now ask the trial
court, or this Court, to execute the Decision in G.R. No. 90983 as if these
items prayed for were actually granted.
The Armovit Law Firm,
in insisting on its claim, pins its entire case on the statement in the body of
the Decision that we do not find Atty. Armovits claim for twenty percent of
all recoveries to be unreasonable.[27] In this regard, our ruling in Grageda v. Gomez [28] is
enlightening:
It is
basic that when there is a conflict between the dispositive portion or fallo of a Decision and the opinion of
the court contained in the text or body of the judgment, the former prevails
over the latter. An order of execution
is based on the disposition, not on the body, of the Decision. This rule rests on the theory that the fallo is the final order while the
opinion in the body is merely a statement ordering nothing.
Indeed,
the foregoing rule is not without an exception. We have held that where the
inevitable conclusion from the body of the decision is so clear as to show that
there was a mistake in the dispositive portion, the body of the decision will
prevail. x x x.[29]
Applying this ruling to
the case at bar, it is clear that the statement in the body of our 1991 Decision
(that we do not find Atty. Armovits claim for twenty percent of all
recoveries to be unreasonable[30])
is not an order which can be the subject of execution. Neither can we ascertain from the body of the
Decision an inevitable conclusion clearly showing a mistake in the dispositive
portion. On the contrary, the context in
which the statement was used shows that it is premised on the interpretation
that Atty. Armovits valid claim is only for an additional P252,000.00 in
attorneys fees:
Contingent
fees are valid in this jurisdiction. It
is true that attorney's fees must at all times be reasonable; however, we do not find Atty. Armovit's claim for
"twenty percent of all recoveries" to be unreasonable. In the case of Aro v. Naawa, decided in 1969, this Court awarded the agreed fees
amid the efforts of the client to deny him fees by terminating his
services. In parallel vein, we are upholding Atty. Armovit's claim for P252,000.00
more pursuant to the contingent fee agreement amid the private
respondent's own endeavours to evade its obligations.[31]
(Emphases supplied.)
The confusion created
in the case at bar shows yet another reason why mere pronouncements in bodies
of Decisions may not be the subject of execution: random statements can easily
be taken out of context and are susceptible to different interpretations. When not enshrined in a clear and definite
order, random statements in bodies of Decisions can still be the subject of another
legal debate, which is inappropriate and should not be allowed in the execution
stage of litigation.
Consequently, the trial
court cannot be considered to have committed grave abuse of discretion in
denying the execution of the statement in the body of our 1991 Decision that
we do not find Atty. Armovits claim for twenty percent of all recoveries to
be unreasonable.[32] All things considered, it was the
interpretation of petitioner Armovit Law Firm, not that of the trial court,
which had the effect of varying the final and executory Decision of this Court
in G.R. No. 90983. The instant Petition
for Certiorari should therefore fail.
WHEREFORE,
the Petition is DISMISSED. Costs against petitioner.
SO ORDERED.
Associate Justice
Chairperson
WE CONCUR:
Chief Justice
Chairperson
LUCAS P. BERSAMIN
Associate Justice |
MARIANO C. DEL CASTILLO Associate Justice |
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MARTIN S. VILLARAMA, JR. Associate Justice |
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[1] Rollo (G.R. No. 154559), p. 73.
[2] Id.
at 46-49; penned by Associate Justice Conchita Carpio Morales with Associate
Justices Candido V. Rivera and Rebecca de Guia-Salvador, concurring.
[3] Id. at 51-52.
[4] G.R.
No. 90983, September 27, 1991, 202 SCRA 16.
[5] See Government Service
Insurance System v. Gines, G.R. No. 85273, March 9, 1993, 219 SCRA 724, 725-726.
[6] Id.
at 728.
[7] Id.
at 728-730.
[8] Id.
at 730.
[9] Law Firm of Raymundo A. Armovit v. Court of Appeals, supra note 4.
[10] Id.
at 18-20.
[11] Id.
at 21-25.
[12] Rollo (G.R. No. 90983), p. 321.
[13] Rollo (G.R. No. 154559), p. 40.
[14] Id. at 40-41.
[15] Id.
at 43-44.
[16] Id.
at 47.
[17] Id.
at 47-48.
[18] Id.
at 48.
[19] Id. at 51-52.
[20] Id.
at 34-35.
[21] Id.
at 20.
[22] Law Firm of Raymundo A. Armovit v. Court of
Appeals, supra note 4 at 25.
[23] Id.
at 21.
[24] Government Service Insurance System v. Gines, supra note 5 at 729.
[25] Rollo (G.R. No. 90983), pp. 268-269.
[26] Id.
at 321.
[27] Law Firm of Raymundo A. Armovit v. Court of Appeals, supra note 4 at 24-25.
[28] G.R.
No. 169536, September 21, 2007, 533 SCRA 677.
[29] Id.
at 691.
[30] Law Firm of Raymundo A. Armovit v. Court of Appeals, supra note 4 at 24-25.
[31] Id.
[32] Id.