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Enforcement of attorney’s lien, C3S47 CPRA

Section 47, Canon III

SECTION 47. Enforcement of attorney’s lien. – In case of non-payment of attorney’s fees, a lawyer may resort to the enforcement of the attorney’s lien under Canon III, Section 54, by filing a Notice of Enforcement of Attorney’s Lien with the court, tribunal, or other government agency of origin where the action or proceeding the lawyer rendered service for is pending, without prejudice to other remedies under the law or the Rules of Court. The Notice shall be accompanied by proof of the services rendered, and served on the client. The court, tribunal, or other government agency, after hearing, shall determine the lawyer’s entitlement to the claimed fees.
The enforcement of an attorney’s lien shall be treated as an independent claim and shall in no instance delay the resolution of the main case. The resolution of the lawyer’s claim may be included in the main judgment or in a separate partial judgment. In the case of a partial judgment, the same shall be subject of appeal.
An appeal in the main case shall not stay the execution of the lawyer’s lien. In the execution of the judgment in the main case, the court shall give due consideration to the pending claim of the lawyer.
If the claim for attorney’s lien arises after a decision has been rendered by the court, tribunal, or other government agency of origin on the action or proceeding, the claim for the enforcement of the lien shall be by an independent action. (2023 Code of Professional Responsibility and Accountability or CPRA)

1. Enforcement of attorney’s lien

a. Concept

1) The 2 kinds of attorney’s lien

There are 2 kinds of attorney’s lien:

1) Retaining lien; and

2) Charging lien. (See: De Caiña v. Victoriano, En Banc, G.R. No. L-12905, February 26, 1959, Per Bautista Angelo, J.)

It may therefore be seen that the right of a lawyer to insure the payment of his professional fee is either to retain the funds, documents, and papers of his client which may have lawfully come into his possession, or to enforce it upon any judgment for the payment of money he may secure in favor of his client. (De Caiña v. Victoriano [1959], supra.)

a) Retaining lien

The retaining lien is the right of the attorney to retain the funds, documents, and papers of his client which have lawfully come into his possession until his lawful fees and disbursements have been paid and to apply such funds to the satisfaction thereof (De Caiña v. Victoriano [1959], supra.)

[T]he retaining lien is dependent upon possession and does not attach to anything not in attorney’s hands. The lien exists only so long as the attorney’s retains possession ends. (De Caiña v. Victoriano [1959], supra.)

b) Charging lien

The charging lien is the right which the attorney has upon all judgments for the payment of money, and executions issued in pursuance of said judgments, which he has secured in litigation of his client… (De Caiña v. Victoriano [1959], supra.)

[T]he enforcement of a charging lien can only take place after a final money judgment has been rendered in favor of the client. The lien only attaches to the money judgment due to the client and is contingent on the final determination of the main case. Until the money judgment has become final and executory, enforcement of the lien is premature. (Navarez v. Abrogar III, G.R. No. 191641, September 02, 2015, Per Brion, J.)

[A] final money judgment In favor of the counsel’s client is significant so that charging of attorneys lien may commence. Otherwise, the enforcement of attorney’s Hen would have no leg to stand on. (Dominguez v. Bank of Commerce, G.R. No. 225207, September 29, 2021, Per Hernando, J.)

b. Enforcement

Under this rule, this lien, whether retaining or charging, 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; (De Caiña v. Victoriano [1959], supra.)

1) Main Case

a) Notice of Enforcement of Attorney’s Lien

Under this section, for non-payment of attorney’s fees by clients, lawyers may resort “to the enforcement of the attorney’s lien under Canon III, Section 54, by filing a Notice of Enforcement of Attorney’s Lien with the court, tribunal, or other government agency of origin where the action or proceeding the lawyer rendered service for is pending, without prejudice to other remedies under the law or the Rules of Court.”

Dominguez v. Bank of Commerce, G.R. No. 225207, September 29, 2021, Per Hernando, J.

• We find for Atty. Dominguez[.] The trial court may rule on money judgments such as attorney’s fees and record and. enforce attorney’s lien in a. petition for cancellation of adverse claim or in a separate action., at the option of the counsel, claiming the same. To distinguish, registration or recording of attorney’s lien merely recognizes the right of the lawyer to claim from the judgment of the suit, whereas the lien can only be enforced when the money judgment in favor of the counsel’s client becomes final and executory. It is to be noted that among the prayers of Atty. Dominguez in his Motion to Fix Attorney’s Fees41 is to register a statement of his lien before the rendition of judgment.42 If a lien may be enforced in said, petition when the money judgment has become final, then the registration of the lien may be granted even prior to the judgment in order to establish the lawyer’s claim. The determination and the fixing of attorney’s fees may be deferred until the resolution of the case and the finality of the money judgment in favor of the lawyer’s client.

b) Proof of services rendered, service to client

The Notice shall be accompanied by proof of the services rendered, and served on the client. The court, tribunal, or other government agency, after hearing, shall determine the lawyer’s entitlement to the claimed fees.

c) Treated as an independent claim

The attorney’s lien shall be enforced and “treated as an independent claim and shall in no instance delay the resolution of the main case.”

d) Resolution

The lawyer’s claim may be resolved by including it “in the main judgment or in a separate partial judgment.” For partial judgment, “the same shall be subject of appeal.”

e) No staying pending appeal

If the main case is appealed, this will “not stay the execution of the lawyer’s lien.”

f) Execution

When judgment in the main case is for execution, the court is required to “give due consideration to the pending claim of the lawyer.”

2) Independent action

Lawyers may institute an independent action for the enforcement of an attorney’s lien if such claim “arises after a decision has been rendered by the court, tribunal, or other government agency of origin on the action or proceeding.”

c. Registration/recording of a lien v. Enforcement of a lien

The registration of the lien should also be distinguished from the enforcement of the lien. Registration merely determines the birth of the lien. The enforcement of the lien, on the other hand, can only take place once a final money judgment has been secured in favor of the client. The enforcement of the lien is a claim for attorney’s fees that may be prosecuted in the very action where the attorney rendered his services or in a separate action. (Navarez v. Abrogar III [2015], supra.)

[A] statement of lien may be registered even before the rendition of judgment, while enforcement may only be done after a judgment has been secured in favor of the client… (Dominguez v. Bank of Commerce, G.R. No. 225207, September 29, 2021, Per Hernando, J.)

[A] motion for the enforcement of the lien is in the nature of an action commenced by a lawyer against his clients for attorney’s fees. As in every action for a sum of money, the attorney-movant must first pay the prescribed docket fees before the trial court can acquire jurisdiction to order the payment of attorney’s fees. (Navarez v. Abrogar III [2015], supra.)

Navarez v. Abrogar III, G.R. No. 191641, September 02, 2015, Per Brion, J.:

• In this case, Atty. Abrogar only moved for the registration of his lien. He did not pay any docket fees because he had not yet asked the RTC to enforce his lien. However, the RTC enforced the lien and ordered the petitioner to pay Atty. Abrogar’s attorney’s fees and administrative expenses.

• Under this situation, the RTC had not yet acquired jurisdiction to enforce the charging lien because the docket fees had not been paid. The payment of docket fees is mandatory in all actions, whether separate or an offshoot of a pending proceeding. In Lacson v. Reyes, this Court granted certiorari and annulled the decision of the trial court granting a “motion for attorney’s fees” because the attorney did not pay the docket fees. Docket fees must be paid before a court can lawfully act on a case and grant relief. Therefore, the RTC acted without or in excess of its jurisdiction when it ordered the payment of the attorney’s fees.

1) Lien follows the property until properly discharged

Dimayuga Law Offices v. Titan-Ikeda Construction and Development Corporation, G.R. No. 247724, September 23, 2020, Per Carandang, J.:

• Pursuant to its successful litigation of Primetown Property’s case against Titan-Ikeda Construction, Dimayuga Law Offices caused the annotation of its attorney’s lien in Condominium Certificate of Title Nos. 35739, 35743, 35744, 35745, 35748, 35779, 35797, 35798, 35805, 35806 based on the retainer agreement which entitles it to 12% of all the monetary awards and interests granted to Primetown Property. These 10 condominium certificates of title are part of the 60 condominium units which the RTC ordered Titen-Ikeda Construction to return to Primetown Property. Hence, upon the annotation of said attorney’s lien to the condominium certificates of title, it became a burden upon the condominium units.

• Notably, these 10 condominium units subjected to the attorney’s lien of Dimayuga Law Offices were also the subject of Deeds of Absolute Sale entered into between Primetown Property as the seller and Dimayuga Law Offices as the buyer as payment for the latter’s attorney’s fees.

• The lien, until properly discharged, follows the property.46 In fact, under Section 59 of Presidential Decree No. 1529, otherwise known as the “Property Registration Decree,” whenever a registered land is conveyed, all subsisting encumbrances or annotations appearing in the registration book and noted on the certificate shall be carried over and stated in the new certificate of title except where the said encumbrances or annotations are simultaneously released or discharged.

• In this case, the attorney’s lien was not properly cancelled. The compromise agreement entered into between Primetown Property and Titan­Ikeda Construction providing for the dissolution of any lien and adverse claim annotated upon the condominium certificates of title cannot be the basis for the cancellation of the lien and adverse claim of Dimayuga Law Offices.

d. Duty of courts to protect attorney’s lien

In the exercise of their supervisory authority over attorneys as officers of the Court, the courts are bound to respect and protect the attorney’s lien as a necessary means to preserve the decorum and respectability of the law profession. Hence, the Court must thwart any and every effort of clients already served by their attorneys’ worthy services to deprive them of their hard-earned compensation. Truly, the duty of the courts is not only to see to it that attorneys act in a proper and lawful manner, but also to see to it that attorneys are paid their just and lawful fees. (Dimayuga Law Offices v. Titan-Ikeda Construction and Development Corporation, G.R. No. 247724, September 23, 2020, Per Carandang, J.)

Dimayuga Law Offices v. Titan-Ikeda Construction and Development Corporation, G.R. No. 247724, September 23, 2020, Per Carandang, J.:

• In this case, a perusal of the provisions of the compromise agreement entered into between Primetown Property and Titan-Ikeda Construction would show that there was no mention of how the attorney’s fees earned by Dimayuga Law Offices will be paid. Worse, the compromise agreement even provided for the cancellation of the attorney’s lien already annotated in the 10 condominium certificates of title prior to the execution of the said compromise agreement. The absence of any provision respecting the attorney’s lien annotated in the 10 condominium certificates of title cannot prejudice the rights of Dimayuga Law Offices which was not a party to the compromise agreement.

• In the first place, the 10 condominium units should not have been included in the compromise agreement because they have already been sold by Primetown Property to Dimayuga Law Offices as payment in kind of the attorney’s fees that the latter earned. In other words, the 10 condominium units were already owned by Dimayuga Law Offices long before the compromise agreement was executed.

• It can be gleaned from here that it was the intention of Primetown Property to retain and respect the attorney’s fees earned by Dimayuga Law Offices even during the negotiations it undertook with Titan-Ikeda Construction relative to the compromise agreement. Hence, the 10 condominium certificates of title should not have been included in the compromise agreement.

• While lawyering is not a moneymaking venture and lawyers are not merchants, an attorney is entitled to be properly compensated for the professional services rendered for the client. Equity dictates that Dimayuga Law Offices must be awarded what it is due.

References

Canon III, 2023 Code of Professional Responsibility

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