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363 Phil. 263

THIRD DIVISION

[ G.R. No. 116909, February 25, 1999 ]

VIVENCIO M. RUIZ, EMILIO D. CASTELLANES AND BLAS A.

MIRANDA, PETITIONERS, VS. THE COURT OF APPEALS, AND
PEDRO V. GARCIA, AS REPRESENTED BY HIS LEGAL
REPRESENTATIVE, MA. LUISA G. MAGPAYO, RESPONDENTS.

DECISION

PURISIMA, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court seeking review of the 26 November 1993 Decision[1] and the 02
September 1994 Resolution[2] of the Court of Appeals[3] in CA-G.R. CV No. 34360.

The late Pedro V. Garcia was a businessman with substantial shareholdings in V. C.

Ponce Co., Inc. consisting of shares of stock and real properties. Sometime in 1977,
an internal conflict developed and besieged the company, engendering suits between
respondent Garcia and V.C. Ponce Co., Inc. over the former's funds and assets.

On March 10, 1977, respondent Pedro V. Garcia engaged the legal services of herein
petitioners, Attys. Vivencio M. Ruiz and Emilio D. Castellanes, and an Agreement
denominated as a Contract of Retainership[4] was executed by them, the pertinent
portion of which, reads:

" CONTRACT OF RETAINERSHIP

I, PEDRO V. GARCIA, of legal age, amrried to Remedios T. Garcia and

residing at #100 Adelita Chioco St., Phase II, B.F. Homes, Parañaque,
Metro Manila, do hereby declare and certify that I have engaged and
retained, as I do hereby retain and engage, the services of Atty. V. M.
RUIZ and his associate, E.D. CASTELLANES as my counsel to handle,
protect and prosecute all cases involving my rights and interests and that
of my family in the 370,000 shares of stocks which we own in the V. C.
Ponce Co., Inc., especially the case I have filed against Vicente C. Ponce
before the Securities and Exchange Commission (SEC Case No. 001451,
Series of 1977), all other related and allied cases, both civil and criminal,
which may be assigned to and accepted by him or which have been
specifically endorsed to him and now pending before the courts and other
venues x x x

xxx xxx xxx

and IN CONSIDERATION of the services of the said attorney, I do hereby

assign and transfer to him, his heirs, executors and assigns, forever,
fifteen (15%) percent of all my/our shares of stock aforesaid, fully paid,

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evidenced by Certificate of Stock Nos. 003, 010, and 004, issued by the
Corporation in our respective names x x x and of all the benefits and
dividends due but not declared and paid on said shares from 1963 up to
the execution of this retainership, including any/all monies and assets
due us and other recoverables, for me and my family, and, in addition, I
further agree to pay the said attorney a yearly retainership fee of
P24,000.00 per annum in twelve (12) equal monthly payments of
P2,000.00 each, payable on or before the 5th of every ensuing month
starting April 1977."

Accordingly, the petitioners handled Civil Case Nos. 14297 and 17713 which were
consolidated before Branch 13 of the Court of First Instance in Pasig, Rizal. Civil
Case No. Pq-6596 was before Branch 29, of the Court of First Instance in Pasay City.

On July 22, 1982, Pablo V. Garcia unilaterally terminated the said Contract of
Retainership on the alleged ground that the petitioners, his lawyers, failed to settle
amicably his (Garcia) differences with V. C. Ponce Co., Inc. Petitioners were paid
attorney's fees up to the month of July, 1982. Thereafter, the petitioners Ruiz and
Castellanes manifested their withdrawal as counsel for Pedro V. Garcia and moved
that their attorney's lien be put on record,[5] in the cases involved. Such motion was
granted by the trial court.

On February 9, 1984, petitioners Ruiz and Castellanes brought their action "For
Collection of Sum of Money and for Specific Performance", docketed as Civil Case
No. 6465 before Branch 140, of the Regional Trial Court in Makati City.

On September 27, 1990, while the said case was pending before the said lower court
of origin, Pedro V. Garcia died. And so, on October 4, 1990, after notifying the trial
court of the demise of their client, counsel moved for the dismissal of the case,
invoking Section 21, Rule 3 of the Rules of Court.[6]

On February 8, 1991, the lower court issued an Order dismissing petitioners'

complaint, stating that:

" x x x the Court is of the opinion and so holds that the present action is
one for recovery of money or interest in whatever recovery the deceased
defendant may obtain in cases for which the plaintiff's services were
contracted; and that plaintiff's client, the herein defendant, died before
final judgment in this case, hence, Section 21 of Rule 3 of the Rules of
Court applies ."

On appeal, the Court of Appeals handed down its challenged Decision, disposing,
thus:

"WHEREFORE, the Order appealed from is herby MODIFIED to read, as

follows:

`In view of the foregoing, the motion to dismiss and the supplemental
motion are hereby granted. Civil Case No. 6364 is hereby DISMISSED in
accordance with Section 21, Rule 3 of the Rules of Court, and the notice
of lis pendens annotated in T.C.T. No. 64567 is hereby ordered cancelled.'

No pronouncement as to cost."
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With the denial of their motion for reconsideration, petitioners found their way to
this Court via the present Petition; theorizing, that:

I.

RESPONDENT COURT ERRED IN FINDING THAT THE INSTANT CASE FOR

RECOVERY OF ATTORNEY'S PROFESSIONAL FEES WHICH HAD NOT BEEN
ADJUDICATED BY FINAL PRONOUNCEMENT IS ABATED BY THE DEATH OF
THE DEFENDANT-CLIENT AND SHOULD THEREFORE BE DISMISSED IN
ACCORDANCE WITH SECTION 21, RULE 3 OF THE RULES OF COURT.

II.

RESPONDENT COURT ERRED IN NOT TAKING JUDICIAL NOTICE OF THE

DECISION OF THE THEN INTERMEDIATE APPELLATE COURT IN AC-GR
NO. SP-05291 FINDING THE INSTANT CASE ONE FOR RECOVERY OF
LAND OR AN INTEREST THEREIN;

III.

RESPONDENT COURT ERRED IN FINDING THAT THE INSTANT CASE IS

ONE "TO COMPEL THE CLIENT-DEFENDANT TO RECOGNIZE FOREMOST
THE EXISTENCE OF THE ATTORNEY-CLIENT RELATIONSHIP AFTER IT
WAS SEVERRED AND AS A CONSEQUENCE, INCIDENTALLY CLAIM
PAYMENT OF THEIR PROFESSIONAL FEES."

The pivot of inquiry here is: Whether or not the case at bar has survived the death
of the private respondent, Pedro V. Garcia.

It is petitioners' theory that the action they brought below was, among others, for
the enforcement of their charging lien in Civil Case Nos. 14297 and 17713, and Civil
Case No. Pq-6596; which involved a claim over the real properties litigated upon,
and therefore, an action which survived the death of their client, Pedro V. Garcia.

Section 21, Rule 3 of the Rules of Court[7] provides:

"Where claims does not survive - When the action is for recovery of
money, debt or interest thereon, and the defendant dies before final
judgment in the Court of First Instance, it shall be dismissed to be
prosecuted in the manner especially provided in these rules. "

To begin with, the aforequoted provision of law was modified by the enactment of
the 1997 Civil Procedure, Section 20, Rule 3 of which, reads:

" When the action is for recovery of money arising from contract, express
or implied, and the defendant dies before final entry of final
judgment in the court in which the action was pending at the time of
such death, it shall not be dismissed but shall be allowed to continue until
entry of final judgment. A favorable judgment obtained by the plaintiff
therein shall be enforced in the manner especially provided in these Rules
for prosecuting claims against the estate of a deceased person. "

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It is a fundamental rule in legal hermeneutics that "statutes regulating the procedure

of the courts will be construed as applicable to actions pending and undetermined
at the time of the passage,"[8] Considering that the case under scrutiny was passed
upon by the lower courts under the old rule, it follows that the old rule governs.

Under the plain language of Section 21, Rule 3 of B.P. 129, it is beyond cavil that "if
the defendant dies before the Court of First Instance or the Regional Trial Court has
rendered a judgment, the action is dismissed and the plaintiff is required to file a
money claim against the estate of the deceased. But if the defendant dies after the
said court has rendered a judgment and pending appeal, the action is not dismissed
and the deceased defendant is substituted by his executor or administrator or legal
heirs."[9]

To determine whether the action survives or not, the Court ruling in Bonilla vs.
Barcena (71 SCRA 491) comes to the fore, thus:

"The question as to whether an action survives or not depends on the

nature of the action and the damage sued for (Iron Gate Bank vs.
Brady, 184 U.S. 665, 22 SCT, 46 L.ed 739). In the cause of action which
survive, the wrong complained affects primarily and principally property
and property rights, the injuries to the person being merely incidental,
while in the causes of action which do not survive, the injury complained
of is to the person, the property and rights of property affected being
incidental xxx.."

The core of petitioners' argument is that action should not be dismissed since their
complaint involves not just monetary claim but also real properties, as well..

Petitioners' contention is untenable. While they maintain that what they are claiming
include real properties, their Complaint is captioned as "For Collection of Money and
for Specific Performance." Obviously, the petitioners themselves, who are lawyers,
believed that their cause of action against the private respondent is in the nature of
actio in personam.

"Actio in personam is a personal action seeking redress against a particular person.

Personal actions are such whereby a man claims a debt, or personal duty, or
damages in lieu thereof."[10] In the present case, petitioners seek to recover
attorney's fees from private respondent for professional services they rendered to
the latter. Attorney's fee is basically a compensation.[11] In its ordinary sense, "the
term (compensation) applies not only to salaries, but to compensation by fees for
specific service." [12]

Viewed in proper perspective, an action to recover attorney's fees is basically a

monetary claim, which under Section 21, Rule 3 of B.P. 129 is an action that does
not survive. Such is the fate of Civil Case No. 6465.

Petitioners theorize that the inclusion of real properties as part of the attorney's fees
private respondent owe them, converted the action into one that survives or at the
very least, split the action into one that did not survive, with respect to the
monetary obligation, and which survived, with respect to the real properties of the
deceased.

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In Harden vs. Harden, 20 SCRA 706, the Court ruled that an action for the
satisfaction of attorney's fees is founded on a personal obligation which does not
survive the death of the defendant before adjudication.[13]

As enunciated in Bonila, the litmus test in determining what action survives and
what does not depends on the nature of the action and not on the object or kind
of property sought to be recovered.

All things studiedly considered, we are of the opinion, and, so hold, that the
respondent Court of Appeals erred not in affirming the decision of the court a quo.

WHEREFORE, the Petition is hereby DENIED; and the decision of the Court of
Appeals in CA-G.R. CV No. 34360 AFFIRMED in toto. No pronouncement as to
costs.

SO ORDERED.

Romero (Chairman), Panganiban, and Gonzaga-Reyes, JJ., concur.

Vitug, J., on official business abroad.

[1] Annex "B," Petition; Rollo, pp. 36-42.

[2] Annex "A," Petition; Rollo, p. 34.

[3] Seventeenth Division. Composed of Justices Alfredo L. Benipayo (Chairman),

Ricardo P. Galvez (ponente) and Eubulo G. Verzola (member).

[4] Annex "A ," C. A. Records, pp. 51-52.

[5] Annex "E," CA Record, p. 24.

[6] Rollo, p. 19; 1964 Rules of Court.

[7] 1964 Rules of Court.

[8] Atlas vs. Court of Appeals, 201 SCRA 51.

[9] Paredes vs. Moya, 61 SCRA 526.

[10] R.S. Vasan (Ed.), Latin Words and Phrases for Lawyers.

[11] 7 Am Jur 2d, "Attorneys At Law," § 327, p. 340, citing Central R. & Banking Co.

vs. Petters, 113 US 116.

[12] Kuenzle & Streiff Inc. vs. Commissioner of Internal Revenue, 120 Phil. 1099.

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[13] Climaco vs. Siy Uy, 19 SCRA 858

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