MACONDRAY & CO., INC., PLAINTIFF AND APPELLANT, VS. MACARIO JOSE, DEFENDANT AND APPELLEE.

The
plaintiff instituted in the Court of First Instance of Manila civil
case No. 44533 against the defendant for the recovery of certain sums
of money. Incidentally the plaintiff asked that, upon the previous
filing of a bond, it be given possession of two refrigerators mortgaged
to it by the defendant. The trial court granted said petition, but the
defendant, having filed a bond through the Luzon Surety Co., Inc.,
retained possession of the refrigerators. In said case the defendant
was ordered to pay the plaintiff the following sums: P216.14 with 12
per cent annual interest thereon from March 21, 1933; P425 with
interest thereon at the same rate from February 12, 1933; P87.40 as
attorney’s fees, and P69.04 as costs. The decision thus rendered having
become final, the defendant delivered the two refrigerators to the
plaintiff. Said refrigerators, upon petition of the plaintiff, were
sold by the sheriff at public auction and awarded to the former for the
sum of P125. After deducting this sum from the amount of the judgment
the defendant was still indebted to the plaintiff in the amount of
P717.02. The defendant became insolvent, and to recover the balance of
the judgment in its favor, the plaintiff petitioned for execution of
the same against the surety, Luzon Surety Co., Inc. The trial court
granted said petition but the defendant appealed from the order
granting the same to this court. In case G. R. No. 42380 (April 29,
1935), the appeal interposed by the defendant, this court reversed the
appealed order and sentenced the plaintiff to pay the costs. The costs
taxed against the plaintiff amounted to P105. Before the case was
remanded to the court of origin, counsel for the defendant, Zosimo
Rivas, filed notice of his lien against his client, the defendant, and
asked that the plaintiff be ordered to pay him the costs to which it
was sentenced. This court denied said petition in its resolution of May
13, 1935.

After the case had been remanded to the trial
court Attorney Rivas filed a motion praying that his lien on the costs
be declared preferred and that a writ of execution be issued against
the plaintiff for said amount. The trial court granted ex parte
said motion and ordered the issuance of the writ of execution. Upon
being notified of said order the plaintiff filed a motion praying that
the same be set aside and that its right to the balance of the judgment
be declared preferred and superior to the lien of Attorney Rivas,
inasmuch as it was entitled to set-off the costs against the balance of
the judgment still owing from the defendant. After hearing the parties,
the trial court, in its order of December 20, 1935 denied the motion of
the plaintiff and declared the lien of the attorney superior and
preferred to the right invoked by the plaintiff. The latter appealed.

1. In its first assignment of error the plaintiff contends that this court
   has definitely decided in its resolution of May 13, 1935 that its right
   to the balance of the judgment has preference over the lien of Attorney
   Rivas on the costs. We believe that this contention is well-founded. It
   will be recalled that Attorney Rivas not only filed notice of his lien
   but petitioned this court to order the plaintiff to pay him the costs.
   In his petition, at the same time a notice, he alleged that his right
   was based upon section 37 of the Code of Civil Procedure and that he
   knew that the plaintiff was the creditor of the defendant for the
   balance of the judgment which it had obtained and not fully executed.
   Consequently the question of preference between his lien and the right
   of the plaintiff to the costs was raised. Between what has been decided
   and the present incident wherein the order of May 13, 1935 is invoked
   there exists perfect identity of parties, things or subject matter and
   causes of action (art. 1252, Civil Code; Ocampo vs. Jenkins and Worcester, 14 Phil., 681; Donato vs. Mendoza, 25 Phil., 57; Roman Catholic Archbishop of Manila vs. Director of hands, 35 Phil., 339; Chua Tan vs.
   Del Rosario, 57 Phil., 411). On the other hand, this court had
   jurisdiction to determine who was entitled to the costs for it awarded
   the same to the defendant. Hence, the preference of the lien invoked by
   Attorney Rivas is already res judicata; and it having been decided that said preference does not exist, the trial court erred in issuing the appealed order.

2. The
   plaintiff contends in his second and last assignment of error that
   assuming that the question of preference had not been decided in the
   resolution of May 13, 1935 and is not res judicata, the trial court,
   nevertheless, should have held that his right to the balance of the
   judgment is superior and preferred to the lien of Attorney Rivas.
   Considering the facts of the case we believe that this theory of the
   plaintiff is in accordance with law. Section 37 of the Code of Civil
   Procedure reads as follows:

   ‘”Sec. 37. Lawyers liens.—A
   lawyer shall have a lien upon ail the funds and papers and documents of
   his client which may lawfully have come into his possession, and may
   retain the same until his lawful fees and disbursements due to him from
   his client 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 and decrees for the payment of money, and executions issued
   in pursuance of such judgments and decrees which he has secured in a
   litigation of his client, from and after, but not before, 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
   decree, or issuing such execution, and shall have caused written notice
   thereof to be delivered to the adverse party, and shall have the same
   right and power over such judgments, decrees, and executions to enforce
   his lien as his client had or may have to the extent that may be
   necessary for the payment of his just fees and disbursements.”

   According to said section, the lien of the attorney on the documents
   and funds of his client which are found in his possession and on the
   judgment and decree which he has secured in favor of his client takes
   legal effect only from and after, but not before, notice of said lien
   has been entered in the record and served on the adverse party (Menzi
   & Co. vs.
   Bastida, 35 Off. Gaz., 773). Inasmuch as the judgment was obtained by
   the plaintiff against the defendant long before the lien of Attorney
   Rivas, which came into being only on May 8, 1935, the former has
   preference over the latter (article 1924 of the Civil Code).

In view of the foregoing considerations, the appealed order is hereby
reversed and it is held that Attorney Zosimo Rivas is not entitled to
the writ of execution applied for and issued, and that the plaintiff
may set-off the costs to which it was sentenced against its credit,
consisting in the balance of the judgment obtained by it against the
defendant, with the costs of this instance against the
defendant-appellee. So ordered.

Avanceña, C. J., Villa-Real, Diaz, Laurel, and Concepcion, JJ., concur.