Republic of the
Supreme Court
THIRD DIVISION
|
TONGONAN HOLDINGS and DEVELOPMENT CORPORATION, Petitioner, - versus - ATTY.
FRANCISCO ESCAÑO, JR. Respondent. |
|
G.R. No. 190994 Present: VELASCO, JR., J., Chairperson, PERALTA, ABAD, VILLARAMA,
JR.,* and MENDOZA, JJ. Promulgated: September 7, 2011 |
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D E C I S I O N
MENDOZA, J.:
This is a petition for review on certiorari
under Rule 45 of the Revised Rules of Court filed by Tongonan Holdings and
Development Corporation (THDC) assailing, on questions of law, the
The Facts
This
controversy between petitioner THDC and its erstwhile counsel, respondent Atty.
Francisco Escaño, Jr. (Atty. Escaño) arose from a case for
eminent domain, docketed as Civil Case No. 3392-0 entitled “Philippine
National Oil Company v. Sps. Dominador and Minerva Samson” before the Regional
Trial Court, Branch 35, Ormoc City (RTC). THDC was named as Defendant-Intervenor in the
said case, as it had purchased the subject parcels of land from the defendant
spouses (Spouses Samson) and was represented by Atty. Escaño of the Escaño
Montehermoso Oliver and Trias Law Office from
Eventually, in the RTC Order[3]
dated
Meanwhile,
Atty. Escaño sought the entry of his attorney’s liens on the basis of the
Memorandum of Agreement (MOA) dated
Upon
dismissal of PNOC’s appeal in the main case in the CA, Atty. Escaño, representing
THDC, moved for the execution of the RTC decision. The RTC then ordered the issuance of a writ of
execution in its Order[6]
dated
Subsequently, Atty. Escaño filed an
Urgent Manifestation with Motion[7] alleging
that THDC had lost its juridical personality as a corporation due to the
revocation of its certificate of registration.
He prayed that the enforcement of the said writ of execution be held in
abeyance until the termination of the NBI’s investigation relative to the
allegations that the RTC Decision of
As
a result, THDC terminated the services of Atty. Escaño on the ground of loss of
confidence, which was approved by the RTC.
Afterward, Atty. Esca͠ño filed a
“Motion to Enter Into the Records Attorney’s Lien”[8]
for additional attorney’s fees of 15% for his professional services, rendered after
the dissolution of their law firm, from
The
RTC, in its September 26, 2005 Order,[9]
denied the motion and approved only the 15% Attorney’s Lien on the money judgment
in favor of Atty. Escaño and his former partners. It held that Atty. Escaño was not entitled to
an additional compensation on the ground that when he took over the case from
their law firm there was no separate contract for his legal services. The said case became his case after the
partners divided all of the firm’s cases among themselves; thus, the continuation
of his services was still covered by the MOA previously entered between him and
THDC. After his motion for
reconsideration was denied on
On
Nevertheless, in order to afford Atty. Escaño
of all avenues available to him in pursuing his claim for attorney’s liens, despite
the fact that the main case has long become final and executory, his appeal is
given due course. Despite the granting
of the appeal, the execution will still proceed but the money recovered will be
held in escrow until the final determination of the attorney’s fees.
Let
the records of this case be forwarded to the Court of Appeals.
SO
ORDERED.[10]
THDC then filed its Motion for
Reconsideration and Motion to Dismiss Appeal arguing that the Notice of Appeal
was not the proper remedy as the order being questioned was interlocutory which
could not be the subject of an appeal. It also questioned the order to hold the
proceeds of the execution in escrow without any motion from the parties.
On
Aggrieved, Atty. Escaño filed a Petition for Certiorari
under Rule 65 with the CA assailing both the
On
WHEREFORE, the petition is GRANTED. The orders of respondent court
dated
Accordingly,
petitioner’s Notice of Appeal is given due course and respondent court
is DIRECTED to transmit
the records of Civil Case No. 3392-0 to this Court for review on appeal of the
Orders dated September 26, 2005 and January 26, 2006 regarding the issue of
petitioner’s attorney’s fees.
Further, public
respondent is directed to put in escrow account at the local branch of the Land
Bank of the
SO ORDERED.[12]
THDC filed
a motion for reconsideration of the above decision but the CA denied the same in
its Resolution[13]
dated
GROUNDS
(1)
THE CA ERRONEOUSLY BASED ITS DECISION ON THE PRESUMPTION THAT THE
APPEAL OF ATTY. ESCAÑO WAS PROPERLY LODGED
(2)
THE CA MISINTERPRETED AND MISAPPLIED THE MEANING OF “INTERLOCUTORY
ORDER”
(3)
AN INTERLOCUTORY ORDER CANNOT BE APPEALED
(4)
THE CA ERRONEOUSLY RULED ON AN ISSUE THAT IT
DID NOT RECOGNIZE
(5)
THE CA ERRONEOUSLY RULED ON A CAUSE OF
ACTION THAT IS NOT WITHIN ITS ORIGINAL AND EXCLUSIVE JURISDICTION
(6)
THE CA ERRONEOUSLY RULED THAT THE ORDER OF
THE RTC OF
(7)
DEPRIVATION OF THE PETITIONER’S RIGHT TO DUE
PROCESS.[14]
It appears
from the records that on
Likewise,
he filed a Supplemental Manifestation with Urgent Motion for Issuance of a
Cease and Desist Order dated October 4, 2010 stating that an Order dated
October 1, 2010 was issued by the RTC directing the release to THDC of ₱45,454,683.68
out of the ₱53,476,098.45 proceeds of the judgment in Civil Case No.
3392-0 which was ordered to be put in escrow account. Acting on the said manifestations, this
Court, in a Resolution dated
On the
main issue, the Court finds the petition impressed with merit.
At the
outset, Atty. Escaño alleges that the petition failed to comply with Rule 45 as
it did not distinctly set forth the questions of law THDC raised before this
Court, and that the seven (7) grounds raised by THDC involved questions of
facts, rather than of law, which are not proper in a petition for review under
Rule 45. He likewise alleges that the
petition did not include clearly legible duplicate original or certified true
copies of the material documents of CA-GR SP No. 03935.
In Republic of
the Philippines v. Malabanan,[15] this Court distinguished a question
of law from a question of fact. A
question of law arises when there is doubt as to what the law is on a certain
state of facts, while there is a question of fact when the doubt arises as to
the truth or falsity of the alleged facts. For a question to be one of law, the
same must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must
rest solely on what the law provides on the given set of circumstances. Once it
is clear that the issue invites a review of the evidence presented, the
question posed is one of fact. Thus, the test of whether a question is one of
law or of fact is not the appellation given to such question by the party
raising the same; rather, it is whether the appellate court can determine the
issue raised without reviewing or evaluating the evidence, in which case, it is
a question of law; otherwise it is a question of fact.[16]
A perusal of the present
petition shows that the issues raised by THDC are questions of law, as the same
can be resolved solely on what the law provides under the undisputed facts. The issues are the correct appreciation of
Atty. Escaño’s appeal, the exact meaning, interpretation and application of
“interlocutory order;” the rule that an interlocutory order cannot be appealed;
the legality of the CA decision on the issue of escrow; whether the CA can make
a determination of an issue that it did not recognize; the legality of the CA
decision on the issue of attorney’s fees when there is no pending case yet on
the matter; the CA’s declaration in the questioned decision that the RTC Order
dated April 2, 2007 is revived and immediately executory; and the question of
denial of due process. All of these,
indeed, are questions of law. Thus, Atty.
Escaño’s argument that the grounds thereof are factual is misleading.
On the issue of
whether the RTC’s order of denial of the motion for entry for additional
attorney’s fees was interlocutory or final, THDC contends that it was merely interlocutory
because the issue was only collateral to the main issue of eminent domain. It
submits that the main action of eminent domain could exist independently
without the issue of attorney’s fees.
The RTC decision of
Atty. Escaño,
on the other hand, counters that the Orders of
An order or judgment of the RTC is deemed final
when it finally disposes of a pending action, so that nothing more can be done
with it in the trial court. In other words, the order or judgment ends the
litigation in the lower court. On the other hand, an order which does not
dispose of the case completely and indicates that other things remain to be
done by the court as regards the merits, is interlocutory.[17]
In
The test to determine whether an order or
judgment is interlocutory or final is this: "Does it leave something to be
done in the trial court with respect to the merits of the case? If it does, it
is interlocutory; if it does not, it is final". A court order is final in
character if it puts an end to the particular matter resolved or settles
definitely the matter therein disposed of, such that no further questions can
come before the court except the execution of the order. The term
"final" judgment or order signifies a judgment or an order which
disposes of the cause as to all the parties, reserving no further questions or
directions for future determination. The order or judgment may validly refer to
the entire controversy or to some definite and separate branch thereof.
"In the absence of a statutory definition, a final judgment, order or
decree has been held to be x x x one that finally disposes of, adjudicates, or
determines the rights, or some right or rights of the parties, either on the
entire controversy or on some definite and separate branch thereof, and which
concludes them until it is reversed or set aside." The central point to
consider is, therefore, the effects of the order on the rights of the parties.
A court order, on the other hand, is merely interlocutory in character if it is
provisional and leaves substantial proceeding to be had in connection with its
subject. The word "interlocutory" refers to "something
intervening between the commencement and the end of a suit which decides some
point or matter but is not a final decision of the whole controversy."[18]
In Planters Products, Inc. v. Court of Appeals,[19] the Court ruled that the order of the respondent trial court
awarding attorney's fees in favor of a claimant-lawyer is a final order and not
interlocutory. In the said case,
petitioner entered into an agreement for an Omnibus Credit Line with private
respondent bank. The latter engaged the
services of private respondent counsel in filing a suit against the petitioner
to enforce the latter’s obligation under the agreement. As attorney’s fees,
respondent bank assigned to respondent lawyer the right to collect fees due and
collectible from the petitioner under the trust receipts. Respondent bank was able to realize from the
sale of the attached merchandise covered by the trust receipt agreement. In as much as respondent lawyer had not yet
been paid his attorney’s fees, he filed a claim for attorney’s fees which was granted
by the trial court.
On the basis
of the aforecited distinction and applying the foregoing test, this Court is of
the view that the RTC orders of
Moreover,
as correctly noted by the CA, the RTC ended with finality the issue of Atty. Escaño’s
attorney’s fees when it rendered the aforementioned orders, having ruled that
he was not entitled to it. The RTC need
not resolve anything else thereby making the said orders final.
Nevertheless,
both the RTC and CA were wrong when they entertained the motion of Atty. Escaño
for additional attorney’s fees. Indeed,
the RTC was correct when it denied the same but it should have added as the
more important reason that the matter of his attorney’s fees was already final
and could no longer be opened and litigated upon.
The reason
is that the matter of attorney’s fees of Atty. Escaño was already covered by a
final judgment and can no longer be questioned. The issue on the matter is now res
judicata. It must be recalled that
the RTC in its Order dated
It is a fundamental legal principle
that a decision that has acquired finality becomes immutable and unalterable,
and may no longer be modified in any respect, even if the modification is meant
to correct erroneous conclusions of fact and law, and whether it be made by the
court that rendered it or by the highest court of the land. The only exceptions
to the general rule on finality of judgments are the so-called nunc pro tunc
entries which cause no prejudice to any party, void judgments, and whenever
circumstances transpire after the finality of the decision which render its
execution unjust and inequitable.[22]
None of these exceptions is obtaining in the present case.
Litigation must at some time end, even
at the risk of occasional errors. Public policy dictates that once a judgment
becomes final, executory and unappealable, the prevailing party should not be
denied the fruits of his victory by some subterfuge devised by the losing
party. Unjustified delay in the enforcement of a judgment sets at naught the
role and purpose of the courts to resolve justiciable controversies with
finality.[23]
The CA could have just dismissed the
matter of additional attorney’s fees outright on the ground of res judicata. Instead
of doing so, however, it provided a semblance of propriety to it when it gave due course
to Atty. Escaño’s appeal. The fact that Atty. Escaño had
complied with all the requirements of appeal under Rule 41 of the Revised Rules
of Court is irrelevant considering that an appeal from the final and immutable
judgment of the RTC is not proper. The
appeal should have been dismissed on the ground that the order appealed from is
not appealable (Section 1(i) Rule 50). An
appeal which requires the elevation of the entire records of the case entails a
long process which would cause unnecessary delay. This, in effect, would negate an expeditious
disposition of the case at bench.
The CA
compounded the problem when it ordered the entire proceeds of the judgment in
Civil Case No. 3392-0, not subject to existing liens, to be held in an escrow
account at the local branch of the Land Bank of the
Indeed,
this Court recognizes the inherent power of the courts to control its processes
and orders and to employ all auxiliary writs, processes and other means
necessary to carry its jurisdiction into effect, as embodied in the Rules of
Court. An order directing the proceeds
of the judgment to be deposited in escrow may be one of these auxiliary writs
and processes. So, also, the act of placing
property in litigation under judicial possession, whether in the hands of a
receiver, an administrator, or as in this case, in a government bank, is an
ancient and accepted procedure.[24]
Under the
prevailing circumstances, however, the order to hold in escrow the entire
judgment award, including the portion that should have been the just
compensation of THDC as owner of the parcels of land subject of the eminent
domain case, was certainly not proper. To delay the payment of just compensation is
virtually tantamount to a deprivation of one’s property rights.
Considering the attendant
circumstances, Atty. Escaño cannot validly invoke the ruling in Go v. Go.[25]
In that case, the Court sustained
the escrow order issued by the trial court to deposit the monthly rentals of
the property subject therein pending the resolution of the main action for
partition or until the question of co-ownership is finally determined. In upholding the propriety of such order, the
Court held that the rental deposit was the most prudent way to preserve the
rights of the contending parties pending the final determination of who was lawfully
entitled thereto.
In this
case, however, the rights of the petitioner were already finally determined in the
main case for eminent domain. Verily,
the recipient of the judgment proceeds had already been ascertained, THDC, the
judgment-obligee, who has yet to receive the just compensation for the property
wrested from it by the government in the exercise of its power of eminent
domain. It was, therefore, manifestly unnecessary
and highly irregular for the CA to order the escrow of the entire amount.
Moreover, THDC’s personality as a
corporation was only belatedly questioned by Atty. Escaño after his failure to
receive more than the 15% attorney’s fees as ruled by the RTC. Records disclose that Atty. Escaño has already
been awarded his attorney’s fees, in accordance with the MOA he signed with
THDC, which were supposed to be contingent on his client receiving its
award. Atty. Escaño is now estopped to
question the personality of his client. As properly argued by THDC, the CA cannot pass
upon the issue of the legality of THDC as a corporation, which is not within
its exclusive and original jurisdiction.
Such authority belongs to the SEC, which is the agency vested with
absolute jurisdiction, supervision and control over corporations as provided
for in Presidential Decree No. 902-A. Furthermore,
there is no pending case yet in any court of competent jurisdiction questioning
THDC’s juridical personality. Yet, the
CA hastily issued the escrow order even when the sole pending issue in the
dismissed notice of appeal was Atty. Escaño’s attorney’s liens. This compelling circumstance warrants a
reversal of the CA decision. THDC should not be prevented from receiving its
judgment-award.
To recapitulate, Atty. Escaño is not
entitled to the escrow of the entire proceeds of the case. Neither is he entitled to the escrow of additional
claim for attorney’s fees of 15% for his personal services after the
dissolution of their law firm and 33.7% in favor of his consultant, Atty. Lino
Dumas and Partners. Atty. Escaño has
already collected his fees through his former law firm and is now enjoying the
fruits of his labor, the uncertainty of the release of his client’s award
notwithstanding. He, therefore, has no
more right to prevent the release of the judgment award in favor of THDC.
In fine, this Court holds that THDC,
being the rightful claimant, is entitled to the proceeds of the judgment not
subject to existing liens. To uphold the
escrow of the full judgment award would ultimately result in patent injustice
and prejudice to THDC, which, to this date, has yet to be compensated for the
taking of its property. This Court is
not only a court of law, but also a court of justice.[26]
WHEREFORE,
the petition is GRANTED.
The
The Temporary
Restraining Order issued by the Court on
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate
Justice
Chairperson
DIOSDADO
M. PERALTA ROBERTO A. ABAD
Associate Justice Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice
A T T E S T A T I O N
I attest 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.
PRESBITERO J. VELASCO, JR.
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.
RENATO C. CORONA
Chief Justice
* Designated as additional
member in lieu of Associate Justice Maria Lourdes P.A. Sereno, per Special Order
No. 1076 dated
[1] Annex A of Petition, rollo,
pp. 25-33. Penned by Associate Justice
Stephen C. Cruz with Associate Justices Florito S. Macalino and Rodil V.
Zalameda, concurring.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
G.R. No. 169067,
[16] Id., citing Leoncio v. De Vera, G.R. No. 176842, February 18, 2008, 546 SCRA 180, 184, citing Binay v. Odeña, G.R. No. 163683, June 8, 2007, 524 SCRA 248, 255-256, further citing Velayo-Fong v. Velayo, G.R. No. 155488, December 6, 2006, 510 SCRA 320, 329-330.
[17] Sarsaba v. Vda. De
Te, G.R. No. 175910,
[18] G.R. No. 173176,
[19]
G.R. No. 76591,
[20] Rollo, p.
81.
[21]
[22] Land Bank of the Philippines v. Listana, G.R. No. 168105, July 27, 2011, citing Sacdalan v. Court of Appeals, G.R. No. 128967, May 20, 2004, 428 SCRA 586, 599.
[23] Edillo v. Dulpina, G.R. No. 188360, January 21, 2010, 610 SCRA 590, 602, citing Huerta Alba Resort, Inc. v. Court of Appeals, 394 Phil. 22, 28 (2000).
[24] The
[25] G.R. No. 183546,
[26]