367 VOL. 181, JANUARY 23, 1990: Metropolitan Bank & Trust Company vs. Court of Appeals

2/7/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 181
367 VOL. 181, JANUARY 23, 1990

Metropolitan Bank & Trust Company vs. Court of Appeals
*
G.R. Nos. 86100-03. January 23, 1990.
METROPOLITAN BANK AND TRUST COMPANY,

petitioner, vs. THE HONORABLE COURT OF APPEALS
and ARTURO ALAFRIZ and ASSOCIATES, respondents.
Attorneys; Attorney’s Fees; Attorney’s charging lien provided

in Section 37, Rule 138 of the Rules of Court.—On the matter of
attorney’s liens, Section 37, Rule 138 provides: “x x x 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.”
Same; Same; Same; A charging lien to be enforceable as
security for the payment of attorney’s fees requires as a condition
sine qua non a
__________________
* SECOND DIVISION.
368
368 SUPREME COURT REPORTS ANNOTATED
www.central.com.ph/sfsreader/session/000001701d499f7aa92805a4003600fb002c009e/t/?o=False 1/12
judgment for money and execution in pursuance of such judgment.

—Consequent to such provision, a charging lien, to be enforceable
as security for the payment of attorney’s fees, requires as a
condition sine qua non a judgment for money and execution in
pursuance of such judgment secured in the main action by the
attorney in favor of his client. A lawyer may enforce his right to
fees by filing the necessary petition as an incident in the main
action in which his services were rendered when something is due
his client in the action from which the fee is to be paid.
Same; Same; Same; Same; A charging lien is not of a nature
which attaches to the property in litigation but is at most a
personal claim enforceable by a Writ of Execution.—In Caiña, et
al. vs. Victoriano, et al., the Court had the occasion to rule that
“the lien of respondent is not of a nature which attaches to the
property in litigation but is at most a personal claim enforceable
by a writ of execution.” In Ampil vs. Juliano-Agrava, et al., the
Court once again declared that a charging lien “presupposes that
the attorney has secured a favorable money judgment for his
client x x x.” Further, in Director of Lands vs. Ababa, et al., we
held that “(a) charging lien under Section 37, Rule 138 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 as in the instant case.”
Same; Same; Same; Same; Same; An enforceable charging
lien, duly recorded, is within the jurisdiction of the Court trying
the main case.—Nonetheless, it bears mention at this juncture
that an enforceable charging lien, duly recorded, is within the
jurisdiction of the court trying the main case and this jurisdiction
subsists until the lien is settled. There is certainly no valid reason
why the trial court cannot pass upon a petition to determine
attorney’s fees if the rule against multiplicity of suits is to be
activated. These decisional rules, however, apply only where the
charging lien is valid and enforceable under the rules.
Same; Same; Same; Same; Same; Same; A petition for
recovery of attorney’s fees has to be prosecuted and the allegations
therein established as any other money claim.—A petition for
recovery of attorney’s fees, either as a separate civil suit or as an
incident in the main action, has to be prosecuted and the
allegations therein established as any other money claim. The
persons who are entitled to or who must pay attorney’s fees have
the right to be heard upon the question of their propriety or
amount. Hence, the obvious necessity of a hearing is beyond cavil.
369
369 VOL. 181, JANUARY 23, 1990
Same; Same; Elements to be considered in fixing a reasonable

compensation for services rendered by a lawyer on the basis of
quantum meruit.—Besides, in fixing a reasonable compensation
for the services rendered by a lawyer on the basis of quantum
meruit, the elements to be considered are generally (1) the
importance of the subject matter in controversy, (2) the extent of
the services rendered, and (3) the professional standing of the
lawyer. These are aside from the several other considerations laid
down by this Court in a number of decisions as pointed out by
respondent court. A determination of all these factors would
indispensably require nothing less than a full-blown trial where
private respondent can adduce evidence to establish its right to
lawful attorney’s fees and for petitioner to oppose or refute the
same.
PETITION for certiorari to review the decision of the Court

of Appeals. Castro-Bartolome, J.
The facts are stated in the opinion of the Court.
Bautista, Picazo, Buyco, Tan & Fider for petitioner.
Arturo A. Alafriz & Associates for and in their own
behalf.
REGALADO, J.:
This petition for review on certiorari impugns the decision1

of the Court of Appeals in CA-G.R. Nos. 08265-08268
affirming the order of Branch 168, Regional Trial Court,
National Capital Judicial Region, in Civil Cases Nos.
19123-28, 19136 and 19144, fixing attorney’s fees and
directing herein petitioner Metropolitan Bank and Trust
Company (Metrobank, for brevity), as defendant in said
civil cases, to pay its attorneys, herein private respondent
Arturo Alafriz and Associates, movant therein, the amount
of P936,000.00 as attorney’s fees on a quantum meruit
basis.
The records show that from March, 1974 to September,
1983, private respondent handled the above-mentioned
civil cases before the then Court of First Instance of Pasig
(Branches I, 2II, VI, X, XIII, XIX, XX AND XXIV) in behalf
of petitioner. The civil cases were all for the declaration of
nullity of certain deeds of sale, with damages.
______________
1 Penned by Justice Floreliana Castro-Bartolome, with Justices Ricardo

L. Pronove, Jr. and Bonifacio A. Cacdac, Jr., concurring.
2 Rollo, 27.
370

3
The antecedental facts which spawned the filing of said
actions are undisputed and are hereinunder set forth as
found by the trial court and adopted substantially in the
decision of respondent court. A certain Celedonio Javier
bought seven (7) parcels of land owned by Eustaquio
Alejandro, et al., with a total area of about ten (10)
hectares. These properties were thereafter mortgaged by
Javier with the petitioner to secure a loan obligation of one
Felix Angelo Bautista and/or International Hotel
Corporation. The obligors having defaulted, petitioner
foreclosed the mortgages after which certificates of sale
were issued by the provincial sheriff in its favor as
purchaser thereof. Subsequently, Alejandro, alleging
deceit, fraud and misrepresentation committed against him
by Javier in the sale of the parcels of land, brought suits
against Javier, et al., and included petitioner as defendant
therein.
It was during the pendency of these suits that these
parcels of land were sold by petitioner to its sister
corporation, Service Leasing Corporation on March 23,
1983 for the purported price of P600,000.00. On the same
day, the properties were resold by the latter to Herby
Commercial and Construction Corporation for the
purported price of P2,500,000.00. Three months later, or on
June 7, 1983, Herby mortgaged the same properties with
Banco de Oro for P9,200,000.00. The lower court found that
private respondent, did not have knowledge of these
transfers and transactions.
As a consequence of the transfer of said parcels of land
to Service Leasing Corporation, petitioner filed an urgent
motion for substitution of party on July 28, 1983. Private
respondent, on its part, filed on August 16, 1983 a verified
motion to enter in the records of the aforesaid civil cases its
charging lien, pursuant to Section 37, Rule 138 of the Rules
of Court, equivalent to twenty-five percent (25%) of the
actual and current market values of the litigated properties
as its attorney’s fees. Despite due notice, petitioner failed to
appear and oppose said motion, as a result of which the
lower court granted the same and ordered the Register of
Deeds of Rizal to annotate the attorney’s liens on the
certificates of title of the parcels of land.
_____________
3 Ibid., 27-28.
371
371 VOL. 181, JANUARY 23, 1990

Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid

civil cases, which had been consolidated and were pending
before the Regional Trial Court of Pasig, filed a motion to
dismiss their complaints therein, which motion the lower
court granted with prejudice in its order dated September
5, 1983. On December 29, 1983, the same court ordered the
Register of Deeds to annotate the attorney’s liens of private
respondent on the derivative titles which cancelled
Transfer Certificates of Title Nos. 453093 to 453099 of the
original seven (7) parcels of land hereinbefore adverted to.
On May 28, 1984, private respondent filed a motion to
fix its attorney’s fees, based on quantum meruit, which
motion precipitated an exchange of arguments between the
parties. On May 30, 1984, petitioner manifested that it had
fully paid private respondent; the latter, in turn, countered
that the amount of P50,000.00 given by petitioner could not
be considered as full payment but merely a cash advance,
including the amount of P14,000.00 paid to it on December
15, 1980. It further appears that private respondent
attempted to arrange a compromise with petitioner in order
to avoid suit, offering a compromise amount of P600,000.00
but the negotiations were unsuccessful.
Finally, on October 15, 1984, the court a quo issued the
order assailed on appeal before respondent court, granting
payment of attorney’s fees to private respondent, under the
following dispositive portion:
“PREMISES CONSIDERED, the motion is hereby granted and

the Metropolitan Bank and Trust Company (METROBANK)
4
and
Herby Commercial and Construction Corporation are hereby
ordered to pay the movant Arturo Alafriz and Associates the
amount of P936,000.00 as 5 its proper, just and reasonable
attorney’s fees in these cases.”
On appeal, respondent court affirmed the order of the trial
______________
4 The present petition is concerned only with one-half (1/2) of the

disputed judgment of P936,000.00 or P468,000.00, rendered against
petitioner. The one-half (1/2) part of said judgment rendered against

Herby Commercial and Construction Corporation became final and
executory after it failed to appeal seasonably.
5 Rollo, 28-29.
372

court in its decision promulgated on February 11, 1988. A

motion for reconsideration, dated March 3, 1988, was filed
by petitioner but the same was denied in a resolution
promulgated on November 19, 1988, hence the present
recourse.
The issues raised and submitted for determination in
the present petition may be formulated thus: (1) whether or
not private respondent is entitled to the enforcement of its
charging lien for payment of its attorney’s fees; (2) whether
or not a separate civil suit is necessary for the enforcement
of such lien; and (3) whether or not private respondent is
entitled to twenty-five (25%) of the actual and current
market values of the litigated properties on a quantum
meruit basis.
On the first issue, petitioner avers that private
respondent has no enforceable attorney’s charging lien in
the civil cases before the court below because the dismissal
of the complaints therein were not, in the words of Section
37, Rule 138, judgments for the payment of money 6
or
executions issued in pursuance of such judgments.
We agree with petitioner.
On the matter of attorney’s liens, Section 37, Rule 138
provides:
“x x x 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.”
Consequent to such provision, a charging lien, to be

enforceable as security for the payment of attorney’s fees,
requires as a condition sine qua non a judgment for money

and execution in pursuance of such judgment secured in
the main action by the attorney in favor of his client. A
lawyer may enforce his right to fees by filing the necessary
petition as an incident in the main
______________
6 Petition, 10; Rollo, 16.
373
373 VOL. 181, JANUARY 23, 1990

action in which his services were rendered when something

is due
7
his client in the action from which the fee is to be
paid.
In the case at bar, the civil cases below were dismissed
upon the initiative of the plaintiffs
8
“in view of the full
satisfaction of their claims.” The dismissal order neither
provided for any money judgment nor made any monetary
award to any litigant, much less in favor of petitioner who
was a defendant therein. This being so, private
respondent’s supposed charging lien is, under our rules,
without any legal basis. It is flawed by the fact that there is
nothing to generate it and to which it can attach in the
same manner as an ordinary lien arises and attaches to
real or personal property. 9
In point is Morente vs. Firmalino, cited by petitioner in
support of its position. In that case, movant-appellant
attorney sought the payment of his fees from his client who
was the defendant in a complaint for injunction which was
dismissed by the trial court after the approval of an
agreement entered into by the litigants. This Court held:
“x x x The defendant having suffered no actual damage by virtue

of the issuance of a preliminary injunction, it follows that no sum
can be awarded the defendant for damages. It becomes apparent,
too, that no amount having been awarded the defendant, herein
appellant’s lien could not be enforced. The appellant, could, by
appropriate action, collect his fees as attorney.”
Private respondent would nevertheless insist that the lien

attaches10 to the “proceeds of a judgment of whatever
nature,” relying11on the case of Bacolod-Murcia Milling Co.
Inc. vs. Henares and some American cases holding that
the lien attaches to the judgment recovered by an

12
attorney
and the proceeds in whatever form they may be.
______________
7 Quirante vs. Hon. Intermediate Appellate Court, G.R. No. 73886,

January 31, 1989, citing Lichauco vs. Hon. Court of Appeals, 63 SCRA 123
(1975) and Otto Gmur, Inc. vs. Revilla, 55 Phil 627 (1936).
8 Original Record, Volume II. 770-771.
9 71 Phil. 49 (1940).
10 Comment, 7; Rollo, 72.
11 107 Phil. 560 (1960).
12 7A C.J.S. 752.
374

The contention is without merit just as its reliance is

misplaced. It is true that there are some American cases
holding that the lien attaches even to properties in
litigation. However, the statutory rules on which they are
based and the factual situations involved therein are
neither explained nor may it be said that they are of
continuing validity as to be applicable in this jurisdiction.
It cannot be gainsaid that legal concepts of foreign origin
undergo a number of variegations or nuances upon
adoption by other jurisdictions, especially those with
variant legal systems.
In fact, the same source from which private respondent
culled the American cases it cited expressly declares that
“in the absence of a statute or of a special agreement
providing otherwise, the general rule is that an attorney
has no lien on the land of his client, notwithstanding such
attorney has, with respect to the land in question,
successfully prosecuted a suit to establish the title of his
client thereto, recovered title or possession in a suit
prosecuted by such client, or defended successfully such
client’s right and title
13
against an unjust claim or an
unwarranted attack,” as is the situation in the case at bar.
This is an inescapable recognition that a contrary rule
obtains in other jurisdictions thereby resulting in doctrinal
rulings of converse or modulated import.
To repeat, since in our jurisdiction the applicable rule
provides that a charging lien attaches only to judgments for
money and executions in pursuance of such judgment, then
it must be taken in haec verba. The language of the law is
clear and unequivocal and, therefore, it must be taken to

mean exactly what it 14says, barring any necessity for
elaborate interpretation.
Notably, the interpretation, literal as it may appear to
be, is not without support in Philippine case law despite
the dearth of cases on all fours with15 the present case. In
Caiña, et al. vs. Victoriano, et al., the Court had the
occasion to rule that “the lien of respondent is not of a
nature which attaches to the
_______________
13 7A C.J.S., 756.
14 Cebu Portland Cement Company vs. Municipality of Naga, Cebu, et
al., 24 SCRA 708 (1968).
15 105 Phil. 194 (1959).
375
375 VOL. 181, JANUARY 23, 1990

property in litigation but is at most a personal claim

enforceable by 16a writ of execution.” In Ampil vs. Juliano-
Agrava, et al., the Court once again declared that a
charging lien “presupposes that the attorney has secured a
favorable money judgment for his client 17
x x x.” Further, in
Director of Lands vs. Ababa, et al., we held that “(a)
charging lien under Section 37, Rule 138 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 as in the instant case.”
Even in the Bacolod-Murcia Milling case, which we
previously noted as cited by private respondent, there was
an express declaration that “in this jurisdiction, the lien
does not attach to the property in litigation.”
Indeed, an attorney may acquire a lien for his
compensation upon money due his client from the adverse
party in any action or proceeding in which the attorney is
employed, but such lien does not extend
18
to land which is
the subject matter of the litigation. More specifically, an
attorney merely defeating recovery against his client as a
defendant is not entitled to a lien on the property involved
in litigation for fees and the court has no power to fix the
fee of an attorney defending the19 client’s title to property
already in the client’s possession.
While, a client cannot defeat an attorney’s right to his
charging lien by dismissing the case, terminating the
services of his counsel, waiving his cause or interest20

in
favor of the adverse party or compromising his action, this
rule cannot find application here as the termination of the
cases below was not at the instance of private respondent’s
client but of the opposing party.
The resolution of the second issue is accordingly
subsumed in the preceding discussion which amply
demonstrates that private respondent is not entitled to the
enforcement of its charging lien.
______________
16 34 SCRA 370 (1970).

17 88 SCRA 513 (1979).
18 Holmes vs. Waymire, 84 P 558 (1906).
19 Wessinger vs. Sturkie, 77 F (2d) 751 (1935).
20 Agpalo, Legal Ethics, 1989 ed., 371-372.
376

Nonetheless, it bears mention at this juncture that an

enforceable charging lien, duly recorded, is within the
jurisdiction of the court trying the main case 21
and this
jurisdiction subsists until the lien is settled. There is
certainly no valid reason why the trial court cannot pass
upon a petition to determine attorney’s fees if the 22
rule
against multiplicity of suits is to be activated. These
decisional rules, however, apply only where the charging
lien is valid and enforceable under the rules. On the last
issue, the Court refrains from resolving the same so as not
to preempt or interfere with the authority and adjudicative
facility of the proper court to hear and decide the
controversy in a proper proceeding which may be brought
by private respondent.
A petition for recovery of attorney’s fees, either as a
separate civil suit or as an incident in the main action, has
to be prosecuted and the allegations therein established as
any other money claim. The persons who are entitled to or
who must pay attorney’s fees have the right 23to be heard
upon the question of their propriety or amount. Hence, the
obvious necessity of a hearing is beyond cavil.
Besides, in fixing a reasonable compensation for the
services rendered by a lawyer on the basis of quantum
meruit, the elements to be considered are generally (1) the
importance of the subject matter in controversy, (2) the
extent of the services 24

rendered, and (3) the professional
standing of the lawyer. These are aside from the several
other considerations laid down by this Court in a number
25
of
decisions as pointed out by respondent court. A
determination of all these factors would indis-
________________
21 Bacolod Murcia Milling Co., Inc. vs. Henares, supra.

22 Palanca vs. Pecson, 94 Phil. 419 (1954).
23 Agpalo, op. sit., 846.
24 Section 24 Rule 138, Rules of Court.
25 Respondent Court admits in its decision that, in line with our
decisions, the following factors have to be considered, to wit: the amount
and character of services rendered, the labor, time and trouble involved,
the nature and importance of the litigation, the responsibility involved,
the amount of money or value of property affected, the skill and
experience called for in the legal services, the professional and social
standing of counsel, the results secured, and whether or not the fee is
absolute or contingent (Rollo, 36).
377
377 VOL. 181, JANUARY 23, 1990

pensably require nothing less than a full-blown trial where

private respondent can adduce evidence to establish its
right to lawful attorney’s fees and for petitioner to oppose
or refute the same.
Nothing in this decision should, however, be
misconstrued as imposing an unnecessary burden on
private respondent in collecting the fees to which it may
rightfully be entitled. But, as in the exercise of any other
right conferred by law, the proper legal remedy should be
availed of and the procedural rules duly observed to
forestall and obviate the possibility of abuse or prejudice, or
what may be misunderstood to be such, often to the
undeserved discredit of the legal profession.
Law advocacy, it has been stressed, 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 government interference, is impressed with 26
public
interest, for which it is subject to State regulation.
ACCORDINGLY, the instant petition for review is
hereby GRANTED and the decision of respondent Court of
Appeals of February 11, 1988 affirming the order of the
trial court is hereby REVERSED and SET ASIDE, without

prejudice to such appropriate proceedings as may be
brought by private respondent to establish its right to
attorney’s fees and the amount thereof.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and

Sarmiento, JJ., concur.
Petition granted. Order reversed and set aside.
Note.—Where the stipulation for legal services is

unconscionable and unreasonable and the lawyer was
dismissed for justifiable cause, the amount due to the
lawyer should be fixed on the basis of quantum meruit.
(Borcena vs. Intermediate Appellate Court, 147 SCRA 111.)
——o0o——
___________
26 Canlas vs. Hon. Court of Appeals, et al., 164 SCRA 160 (1988), per
Sarmiento, J.
378
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2/7/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 181

367 VOL. 181, JANUARY 23, 1990

METROPOLITAN BANK AND TRUST COMPANY,

Attorneys; Attorney’s Fees; Attorney’s charging lien provided

368 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank & Trust Company vs. Court of Appeals

judgment for money and execution in pursuance of such judgment.

369 VOL. 181, JANUARY 23, 1990

Metropolitan Bank & Trust Company vs. Court of Appeals

Same; Same; Elements to be considered in fixing a reasonable

PETITION for certiorari to review the decision of the Court

This petition for review on certiorari impugns the decision1

1 Penned by Justice Floreliana Castro-Bartolome, with Justices Ricardo

370 SUPREME COURT REPORTS ANNOTATED

371 VOL. 181, JANUARY 23, 1990

Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid

“PREMISES CONSIDERED, the motion is hereby granted and

On appeal, respondent court affirmed the order of the trial

4 The present petition is concerned only with one-half (1/2) of the

petitioner. The one-half (1/2) part of said judgment rendered against

372 SUPREME COURT REPORTS ANNOTATED

court in its decision promulgated on February 11, 1988. A

“x x x He shall also have a lien to the same extent upon all

Consequent to such provision, a charging lien, to be

requires as a condition sine qua non a judgment for money

6 Petition, 10; Rollo, 16.

373 VOL. 181, JANUARY 23, 1990

action in which his services were rendered when something

“x x x The defendant having suffered no actual damage by virtue

Private respondent would nevertheless insist that the lien

the lien attaches to the judgment recovered by an

7 Quirante vs. Hon. Intermediate Appellate Court, G.R. No. 73886,

374 SUPREME COURT REPORTS ANNOTATED

The contention is without merit just as its reliance is

clear and unequivocal and, therefore, it must be taken to

375 VOL. 181, JANUARY 23, 1990

property in litigation but is at most a personal claim

services of his counsel, waiving his cause or interest20

16 34 SCRA 370 (1970).

376 SUPREME COURT REPORTS ANNOTATED

Nonetheless, it bears mention at this juncture that an

extent of the services 24

21 Bacolod Murcia Milling Co., Inc. vs. Henares, supra.

377 VOL. 181, JANUARY 23, 1990

pensably require nothing less than a full-blown trial where

trial court is hereby REVERSED and SET ASIDE, without

Melencio-Herrera (Chairman), Paras, Padilla and

Petition granted. Order reversed and set aside.

Note.—Where the stipulation for legal services is

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