1. REFERENCE
1.1. DOCKET NUMBER
- GR No. L-22490
1.2. CITATION
- Gan Tion v. CA, GR No. L-22490, 28 SCRA 235 (May 21, 1969)
1.3. FULL-TEXT SOURCE ONLINE
2. MNEMONIC
2.1. LAW SCHOOL SUBJECT
- OBLICON
2.2. KEYWORDS
- Attorney’s Fees, Legal Compensation
2.3. FACT MNEMONIC
- Unpaid rent versus attorney’s fees case
2.4. DOCTRINE MNEMONIC
- Attorney’s fees are awarded in favor of litigant, making them the judgment creditor who can enforce it by way of execution
2.5. VERBATIM DOCTRINE
- Attorney’s fees are awarded in favor of litigant, making them the judgment creditor who can enforce it by way of execution
- The award is made in favor of the litigant, not of his counsel, and is justified by way of indemnity for damages recoverable by the former in the cases enumerated in Article 2208 of the Civil Code. It is the litigant, not his counsel, who is the judgment creditor and who may enforce the judgment by execution. Such credit, therefore, may properly be the subject of legal compensation.
2.6. SHORTHAND DIGEST
- This is an appeal to the Supreme Court on a Court of Appeals decision which came from a writ of execution obtained by private respondent in CFI for payment of attorney’s fees of P500 while petitioner was demanding payment for approx. two years unpaid rent worth more than P4000. While the Court of Appeals reasoned that said attorney’s fees is a ‘trust fund for the benefit for the lawyer, which would have to be turned over by the client to his counsel’ and thus cannot be subject to legal compensation, the Supreme Court reversed this, ruling that said award is in favor of the litigant, not of the counsel. The litigant is the judgment creditor, and may enforce the judgment of legal compensation via execution. The facts of the case showed however that enforcing it is unjust given that the respondent is indebted to petitioner for more than P4,000, thus setting aside the writ of execution.
3. PROFILE
3.1. DATE OF PROMULGATION
- May 21, 1969
3.2. DECIDING COURT
- Supreme Court of the Philippines
3.3. DIVISION
- En Banc
3.4. PONENTE
- Makalintal
3.5.1. CONCURRING
- Reyes, JBL
- Dizon
- Zaldivar
- Sanchez
- Fernando
- Capistrano
3.5.2. DISSENTING
- None
3.5.3. ABSENT/OTHERS
- Teehankee (took no part)
- Barredo (took no part)
- Concepcion (on leave)
- Ruiz Castro (on leave)
- None
3.7.1. PETITIONER
- Gan Tion
3.7.2. RESPONDENTS
- Court of Appeals
- Hon. Judge Agustin P. Montesa
- Judge of CFI Manila
- Sherriff of Manila
- Ong Wan Sieng
3.8.1. PETITIONER
- Burgos & Sarte
3.8.2. RESPONDENTS
- Roxas, Roxas, Roxas & Associates
3.9. NATURE OF ACTION
- Appeal on a Court of Appeals decision
3.10. LAWS AND PROVISIONS CITED
- Civil Code, Art. 1278
- Civil Code, Art. 1279
3.11. CASES CITED
- Fores v. Miranda, 105 Phil. 268
- Necesito et al v. Paras et al, 104 Phil 75,86
4. CONTENTS
4.1. FACTS
- Private respondent was a tenant in a premise owned by petitioner.
- 1961
- Petitioner filed an ejectment case, for failure to pay of the months of August and September, to the collective sum of PHP 360, or PHP 180 per month.
- Private respondent denied the allegation and said that the agreed monthly rental was only PHP 160, which he offered but refused by petitioner.
- The Municipal Court of Manila ruled in favor of petitioner on said ejectment case.
- 1962, July 2
- Upon appeal, CFI reversed lower court’s judgment and ordered private respondent to pay petitioner the sum of P500 as attorney’s fees. Said judgment was final.
- 1963, October 10
- Petitioner served notice that he was increasing rent to PHP 180, effective November 1st, and demanded the rents in arrears at the old rate in the aggregate amount of PHP 4320.00, from August 1961 to October 1963
4.2. PROCEDURAL HISTORY
- CFI Manila
- In the meantime, private respondent was able to obtain a writ of execution of the judgment for attorney’s fees in his favor.
- Court of Appeals
- Ong Wan went on certiorari to the Court of Appeals, where he pleaded legal compensation, claiming that Ong Wan Sieng was indebted to him in the sum of P4,320 for unpaid rents.
- The appellate court ruled for private respondent, holding that:
- although “respondent Ong is indebted to the petitioner for unpaid rentals in an amount of more than P4,000.00,” the sum of P500 could not be the subject of legal compensation, it being a “trust fund for the benefit of the lawyer, which would have to be turned over by the client to his counsel.”
- In the opinion of said Court, the requisites of legal compensation, namely, that the parties must be creditors and debtors of each other in their own right (Art. 1278, Civil Code) and that each one of them must be bound principally and at the same time be a principal creditor of the other (Art. 1279), are not present in the instant case, since the real creditor with respect to the sum of P500 was the defendant’s counsel.
4.3. ISSUES
- Whether there was legal compensation between petitioner and private respondent?
4.4. HELD
- Whether there was legal compensation between petitioner and private respondent?
- Yes.
- The award is made in favor of the litigant, not of his counsel, and is justified by way of indemnity for damages recoverable by the former in the cases enumerated in Article 2208 of the Civil Code. It is the litigant, not his counsel, who is the judgment creditor and who may enforce the judgment by execution. Such credit, therefore, may properly be the subject of legal compensation. Quite obviously it would be unjust to compel petitioner to pay his debt for P500 when admittedly his creditor is indebted to him for more than P4,000.
- Yes.
4.5. DISPOSITION
- Judgment of Court of appeals reversed, and the writ of execution of CFI Manila is set aside.
