Dimayuga Law Offices vs. Titan-Ikeda Construction and Development Corporation, G.R. No. 159007 (2019)
### Facts:
**Background and Agreements:**
– **Feb 4, 1993:** Primetown Property Group Inc. (Primetown) contracts Titan-Ikeda Construction and Development Corporation (Titan-Ikeda) for structural works of the Prime Tower with a payment of PHP 40,000,000.
– **Jan 31, 1994:** Supplemental Agreement awards Titan-Ikeda the architectural works for PHP 130,000,000, to be paid via condominium units and parking slots.
– **Jun 30, 1994:** Deed of Absolute Sale executed covering 114 condominium units and 20 parking slots.
**Project Issues:**
– Titan-Ikeda fails to meet completion deadlines; Primetown takes over.
– **Sep 1995:** Engineering consultancy Integraltech, Inc. reports 48.71% completion by Titan-Ikeda; evaluates overpayment of PHP 66,677,000.
**Legal Proceedings:**
– **Jul 2, 1997:** Primetown files suit against Titan-Ikeda for return of overpayment.
– **Dec 10, 1996:** Titan-Ikeda filed a suit with HLURB due to Primetown’s refusal to deliver keys and management certificates.
– **Aug 5, 1998:** RTC dismisses Primetown’s complaint; orders Primetown to pay Titan-Ikeda for additive works and damages.
– Primetown appeals to SC, resulting in **Feb 12, 2008:** SC orders Titan-Ikeda to return overpayment minus allowable claims.
**Execution and Attorney’s Lien:**
– **Apr 30, 2012:** RTC reconfirms Titan-Ikeda’s work completion at 48.71%; orders Titan-Ikeda to return PHP 66,677,000 or equivalent condominium units.
– **Apr 10, 2013:** RTC grants attorney’s lien to Dimayuga Law Offices on 10 condominium titles as per their retainer agreement.
– **Apr 29, 2013:** RTC issues Writ of Execution.
– **May 5, 2015:** Primetown pays Dimayuga Law Offices in kind through condominium units.
**Compromise Agreement:**
– Without Dimayuga Law Offices’ knowledge, Primetown and Titan-Ikeda enter a compromise agreement nullifying the attorney’s lien.
**Subsequent Motions:**
– **Mar 6, 2018:** RTC orders Primetown to pay attorney’s fees to Dimayuga Law Offices.
– **Jun 4, 2018:** RTC cancels attorney’s lien per compromise agreement.
– Dimayuga Law Offices petitions CA, which denies it based on procedural technicalities and substantive points.
### Issues:
1. **Whether the attorney’s lien and adverse claim of Dimayuga Law Offices on the condominium titles can be cancelled due to the compromise agreement between Primetown and Titan-Ikeda.**
### Court’s Decision:
**Analysis and Holdings:**
1. **Nature and Validity of Attorney’s Lien:**
– An attorney’s lien is a legal claim on property to secure payment for legal services.
– **Charging Lien:** Dimayuga Law Offices had a lien on the judgments and titles secured for Primetown.
– The annotation of the lien was proper and created a burden on the property.
2. **Impact of Compromise Agreement:**
– The compromise agreement between Primetown and Titan-Ikeda cannot impact third-party rights.
– The agreement failed to address the attorney’s lien, breaching Dimayuga Law Offices’ right.
3. **Independence of the Attorney’s Lien:**
– The lien continues until discharged and cannot be annulled by a compromise agreement unknown to the attorney.
– PD 1529 mandates that liens are carried over unless released or discharged.
4. **Equity and Professional Fees:**
– The client’s settlement should not deprive the attorney of fees for services rendered.
– The case emphasizes the duty of courts to ensure attorneys’ rightful compensation.
**Conclusion:**
– The attorney’s lien held by Dimayuga Law Offices stands valid.
– The Order dated June 4, 2018, canceling the lien and adverse claim, is set aside.
### Doctrine:
1. **Attorney’s Lien Doctrine:** Attorneys are entitled to a proprietary interest in the judgment secured for their clients, enforceable against third parties unless properly discharged (Rule 138, Section 37, Rules of Court).
2. **Effects of Compromise:** Compromise agreements bind only the parties involved and cannot nullify legal claims of third parties, such as attorney’s liens.
### Class Notes:
– **Attorney’s Lien:** Ensures attorneys are compensated for services through a lien on judgments or funds secured (Rule 138, Sec. 37, Rules of Court).
– **Effect of Compromise Agreement:** Limited to parties involved and cannot affect third-party rights unless explicitly stated.
– **Equity Principle:** Courts must protect attorneys’ rights to fair compensation, including their statutory liens.
– **PD 1529, Sec. 59:** Encumbrances on registered property must be carried over unless simultaneously discharged.
### Historical Background:
– The case showcases ongoing construction and property disputes in Metro Manila, underscored by complex legal battles over contractual agreements and payments.
– Highlights procedural rigor in enforcing judicial decisions and recognizing attorneys’ financial interests, reflecting professional ethics within Philippine legal practice.
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