G.R. No.

86100-03 January 23, 1990

METROPOLITAN BANK AND TRUST COMPANY, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ARTURO ALAFRIZ and
ASSOCIATES, respondents.
Bautista, Picazo, Buyco, Tan & Fider for petitioner.
Arturo A. Alafriz & Associates for and in their own behalf.

REGALADO, J.:
This petition for review on certiorari impugns the decision of the Court of
Appeals in CA-G.R. Nos. 08265-08268 1affirming the order of Branch 168,
Regional Trial Court, National Capital Judicial Region, in Civil Cases Nos.
19123-28, 19136 and 19144, fixing attorney's fees and directing herein
petitioner Metropolitan Bank and Trust Company (Metrobank, for brevity), as
defendant in said civil cases, to pay its attorneys, herein private respondent
Arturo Alafriz and Associates, movant therein, the amount of P936,000.00 as
attorney's fees on a quantum meruit basis.
The records show that from March, 1974 to September, 1983, private
respondent handled the above-mentioned civil cases before the then Court of
First Instance of Pasig (Branches I, II, VI, X, XIII, XIX, XX AND XXIV) in behalf
of petitioner. 2 The civil cases were all for the declaration of nullity of certain
deeds of sale, with damages.
The antecedental facts 3 which spawned the filing of said actions are
undisputed and are hereinunder set forth as found by the trial court and
adopted substantially in the decision of respondent court. A certain Celedonio
Javier bought seven (7) parcels of land owned by Eustaquio Alejandro, et al.,
with a total area of about ten (10) hectares. These properties were thereafter
mortgaged by Javier with the petitioner to secure a loan obligation of one Felix
Angelo Bautista and/or International Hotel Corporation. The obligors having
defaulted, petitioner foreclosed the mortgages after which certificates of sale
were issued by the provincial sheriff in its favor as purchaser thereof
Subsequently, Alejandro, alleging deceit, fraud and misrepresentation
committed against him by Javier in the sale of the parcels of land, brought
suits against Javier et al., and included petitioner as defendant therein.
It was during the pendency of these suits that these parcels of land were sold
by petitioner to its sister corporation, Service Leasing Corporation on March
23, 1983 for the purported price of P600,000.00. On the same day, the
properties were resold by the latter to Herby Commercial and Construction

Corporation for the purported price of P2,500,000.00. Three months later, or

on June 7, 1983, Herby mortgaged the same properties with Banco de Oro for
P9,200,000.00. The lower court found that private respondent, did not have
knowledge of these transfers and transactions.
As a consequence of the transfer of said parcels of land to Service Leasing
Corporation, petitioner filed an urgent motion for substitution of party on July
28, 1983. Private respondent, on its part, filed on August 16, 1983 a verified
motion to enter in the records of the aforesaid civil cases its charging lien,
pursuant to Section 37, Rule 138 of the Rules of Court, equivalent to twentyfive percent (25%) of the actual and current market values of the litigated
properties as its attorney's fees. Despite due notice, petitioner failed to appear
and oppose said motion, as a result of which the lower court granted the same
and ordered the, Register of Deeds of Rizal to annotate the attorney's liens on
the certificates of title of the parcels of land.
Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid civil cases, which
had been consolidated and were pending before the Regional Trial Court of
Pasig, filed a motion to dismiss their complaints therein, which motion the
lower court granted with prejudice in its order dated September 5, 1983. On
December 29, 1983, the same court ordered the Register of Deeds to
annotate the attorney's liens of private respondent on the derivative titles
which cancelled Transfer Certificates of Title Nos. 453093 to 453099 of the
original seven (7) parcels of land hereinbefore adverted to.
On May 28,1984, private respondent filed a motion to fix its attorney's fees,
based on quantum meruit, which motion precipitated an exchange of
arguments between the parties. On May 30, 1984, petitioner manifested that it
had fully paid private respondent; the latter, in turn, countered that the amount
of P50,000.00 given by petitioner could not be considered as full payment but
merely a cash advance, including the amount of P14,000.00 paid to it on
December 15, 1980. It further appears that private respondent attempted to
arrange a compromise with petitioner in order to avoid suit, offering a
compromise amount of P600,000.00 but the negotiations were unsuccessful.
Finally, on October 15,1984, the court a quo issued the order assailed on
appeal before respondent court, granting payment of attorney's fees to private
respondent, under the following dispositive portion:
PREMISES CONSIDERED, the motion is hereby granted and the
Metropolitan Bank and Trust Company (METROBANK) and
Herby Commercial and Construction Corporation 4 are hereby
ordered to pay the movant Arturo Alafriz and Associates the
amount of P936,000.00 as its proper, just and reasonable
attorney's fees in these cases. 5

On appeal, respondent court affirmed the order of the trial court in its decision
promulgated on February 11, 1988. A motion for reconsideration, dated March
3, 1988, was filed by petitioner but the same was denied in a resolution
promulgated on November 19, 1988, hence the present recourse.
The issues raised and submitted for determination in the present petition may
be formulated thus: (1) whether or not private respondent is entitled to the
enforcement of its charging lien for payment of its attorney's fees; (2) whether
or not a separate civil suit is necessary for the enforcement of such lien and
(3) whether or not private respondent is entitled to twenty-five (25%) of the
actual and current market values of the litigated properties on a quantum
meruitbasis.
On the first issue, petitioner avers that private respondent has no enforceable
attorney's charging lien in the civil cases before the court below because the
dismissal of the complaints therein were not, in the words of Section 37, Rule
138, judgments for the payment of money or executions issued in pursuance
of such judgments. 6
We agree with petitioner.
On the matter of attorney's liens Section 37, Rule 138 provides:
. . . He shall also have a lien to the same extent upon all
judgments for the payment of money, and executions issued in
pursuance of such judgments, which he has secured in a litigation
of his client, from and after 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 issuing such execution,
and shall have caused written notice thereof to be delivered to his
client and to the adverse party; and he shall have the same right
and power over such judgments and executions as his client
would have to enforce his lien and secure the payment of his just
fees and disbursements.
Consequent to such provision, a charging lien, to be enforceable as security
for the payment of attorney's fees, requires as a condition sine qua non a
judgment for money and execution in pursuance of such judgment secured in
the main action by the attorney in favor of his client. A lawyer may enforce his
right to fees by filing the necessary petition as an incident in the main action in
which his services were rendered when something is due his client in the
action from which the fee is to be paid. 7
In the case at bar, the civil cases below were dismissed upon the initiative of
the plaintiffs "in view of the frill satisfaction of their claims." 8 The dismissal
order neither provided for any money judgment nor made any monetary award
to any litigant, much less in favor of petitioner who was a defendant therein.

This being so, private respondent's supposed charging lien is, under our rule,
without any legal basis. It is flawed by the fact that there is nothing to generate
it and to which it can attach in the same manner as an ordinary lien arises and
attaches to real or personal property.
In point is Morente vs. Firmalino, 9 cited by petitioner in support of its position.
In that case, movant-appellant attorney sought the payment of his fees from
his client who was the defendant in a complaint for injunction which was
dismissed by the trial court after the approval of an agreement entered into by
the litigants. This Court held:
. . . The defendant having suffered no actual damage by virtue of
the issuance of a preliminary injunction, it follows that no sum can
be awarded the defendant for damages. It becomes apparent,
too, that no amount having been awarded the defendant, herein
appellant's lien could not be enforced. The appellant, could, by
appropriate action, collect his fees as attorney.
Private respondent would nevertheless insist that the lien attaches to the
"proceeds of a judgment of whatever nature," 10 relying on the case
of Bacolod-Murcia Milling Co. Inc. vs. Henares 11 and some American cases
holding that the lien attaches to the judgment recovered by an attorney and
the proceeds in whatever form they may be. 12
The contention is without merit just as its reliance is misplaced. It is true that
there are some American cases holding that the lien attaches even to
properties in litigation. However, the statutory rules on which they are based
and the factual situations involved therein are neither explained nor may it be
said that they are of continuing validity as to be applicable in this jurisdiction. It
cannot be gainsaid that legal concepts of foreign origin undergo a number of
variegations or nuances upon adoption by other jurisdictions, especially those
with variant legal systems.
In fact, the same source from which private respondent culled the American
cases it cited expressly declares that "in the absence of a statute or of a
special agreement providing otherwise, the general rule is that an attorney has
no lien on the land of his client, notwithstanding such attorney has, with
respect to the land in question, successfully prosecuted a suit to establish the
title of his client thereto, recovered title or possession in a suit prosecuted by
such client, or defended successfully such client's right and title against an
unjust claim or an unwarranted attack," 13 as is the situation in the case at bar.
This is an inescapable recognition that a contrary rule obtains in other
jurisdictions thereby resulting in doctrinal rulings of converse or modulated
import.
To repeat, since in our jurisdiction the applicable rule provides that a charging
lien attaches only to judgments for money and executions in pursuance of

such judgment, then it must be taken in haec verba. The language of the law
is clear and unequivocal and, therefore, it must be taken to mean exactly what
it says, barring any necessity for elaborate interpretation. 14
Notably, the interpretation, literal as it may appear to be, is not without support
in Philippine case law despite the dearth of cases on all fours with the present
case. In Caina et al. vs. Victoriano, et al., 15 the Court had the occasion to rule
that "the lien of respondent is not of a nature which attaches to the property in
litigation but is at most a personal claim enforceable by a writ of execution."
In Ampil vs. Juliano-Agrava, et al., 16 the Court once again declared that a
charging lien "presupposes that the attorney has secured a favorable money
judgment for his client . . ." Further, in Director of Lands vs.Ababa, et al., 17 we
held that "(a) charging lien under Section 37, Rule 138 of the Revised Rules of
Court is limited only to money judgments and not to judgments for the
annulment of a contract or for delivery of real property as in the instant case."
Even in the Bacolod-Murcia Milling case, which we previously noted as cited
by private respondent, there was an express declaration that "in this
jurisdiction, the lien does not attach to the property in litigation."
Indeed, an attorney may acquire a lien for his compensation upon money due
his client from the adverse party in any action or proceeding in which the
attorney is employed, but such lien does not extend to land which is the
subject matter of the litigation. 18 More specifically, an attorney merely
defeating recovery against his client as a defendant is not entitled to a lien on
the property involved in litigation for fees and the court has no power to fix the
fee of an attorney defending the client's title to property already in the client's
possession. 19
While a client cannot defeat an attorney's right to his charging lien by
dismissing the case, terminating the services of his counsel, waiving his cause
or interest in favor of the adverse party or compromising his action, 20 this rule
cannot find application here as the termination of the cases below was not at
the instance of private respondent's client but of the opposing party.
The resolution of the second issue is accordingly subsumed in the preceding
discussion which amply demonstrates that private respondent is not entitled to
the enforcement of its charging lien.
Nonetheless, it bears mention at this juncture that an enforceable charging
lien, duly recorded, is within the jurisdiction of the court trying the main case
and this jurisdiction subsists until the lien is settled. 21 There is certainly no
valid reason why the trial court cannot pass upon a petition to determine
attorney's fees if the rule against multiplicity of suits is to be
activated. 22 These decisional rules, however, apply only where the charging
lien is valid and enforceable under the rules.

On the last issue, the Court refrains from resolving the same so as not to
preempt or interfere with the authority and adjudicative facility of the proper
court to hear and decide the controversy in a proper proceeding which may be
brought by private respondent.
A petition for recovery of attorney's fees, either as a separate civil suit or as an
incident in the main action, has to be prosecuted and the allegations therein
established as any other money claim. The persons who are entitled to or who
must pay attorney's fees have the right to be heard upon the question of their
propriety or amount. 23 Hence, the obvious necessity of a hearing is beyond
cavil.
Besides, in fixing a reasonable compensation for the services rendered by a
lawyer on the basis of quantum meruit, the elements to be considered are
generally (1) the importance of the subject matter in controversy, (2) the
extent of the services rendered, and (3) the professional standing of the
lawyer. 24 These are aside from the several other considerations laid down by
this Court in a number of decisions as pointed out by respondent court. 25 A
determination of all these factors would indispensably require nothing less
than a full-blown trial where private respondent can adduce evidence to
establish its right to lawful attorney's fees and for petitioner to oppose or refute
the same.
Nothing in this decision should, however, be misconstrued as imposing an
unnecessary burden on private respondent in collecting the fees to which it
may rightfully be entitled. But, as in the exercise of any other right conferred
by law, the proper legal remedy should be availed of and the procedural rules
duly observed to forestall and obviate the possibility of abuse or prejudice, or
what may be misunderstood to be such, often to the undeserved discredit of
the legal profession.
Law advocacy, it has been stressed, is not capital that yields profits. The
returns it births are simple rewards for a job done or service rendered. It is a
calling that, unlike mercantile pursuits which enjoy a greater deal of freedom
from government interference, is impressed with public interest, for which it is
subject to State regulation. 26
ACCORDINGLY, the instant petition for review is hereby GRANTED and the
decision of respondent Court of Appeals of February 11, 1988 affirming the
order of the trial court is hereby REVERSED and SET ASIDE, without
prejudice to such appropriate proceedings as may be brought by private
respondent to establish its right to attorney's fees and the amount thereof.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.

B.M. No. 712 July 13, 1995

IN THE MATTER OF THE ADMISSION TO THE BAR AND OATH-TAKING
OF SUCCESSFUL BAR APPLICANT AL C. ARGOSINO, petitioner.
RESOLUTION

FELICIANO, J.:
A criminal information was filed on 4 February 1992 with the Regional Trial
Court of Quezon City, Branch 101, charging Mr. A.C. Argosino along with
thirteen (13) other individuals, with the crime of homicide in connection with
the death of one Raul Camaligan on 8 September 1991. The death of Raul
Camaligan stemmed from the infliction of severe physical injuries upon him in
the course of "hazing" conducted as part of university fraternity initiation rites.
Mr. Argosino and his co-accused then entered into plea bargaining with the
prosecution and as a result of such bargaining, pleaded guilty to the lesser
offense of homicide through reckless imprudence. This plea was accepted by
the trial court. In a judgment dated 11 February 1993, each of the fourteen
(14) accused individuals was sentenced to suffer imprisonment for a period
ranging from two (2) years, four (4) months and one (1) day to four (4) years.
Eleven (11) days later, Mr. Argosino and his colleagues filed an application for
probation with the lower court. The application for probation was granted in an
Order dated 18 June 1993 issued by Regional Trial Court Judge Pedro T.
Santiago. The period of probation was set at two (2) years, counted from the
probationer's initial report to the probation officer assigned to supervise him.
Less than a month later, on 13 July 1993, Mr. Argosino filed a Petition for
Admission to Take the 1993 Bar Examinations. In this Petition, he disclosed
the fact of his criminal conviction and his then probation status. He was
allowed to take the 1993 Bar Examinations in this Court's En Banc Resolution
dated 14 August 1993. 1 He passed the Bar Examination. He was not,
however, allowed to take the lawyer's oath of office.
On 15 April 1994, Mr. Argosino filed a Petition with this Court to allow him to
take the attorney's oath of office and to admit him to the practice of law,
averring that Judge Pedro T. Santiago had terminated his probation period by
virtue of an Order dated 11 April 1994. We note that his probation period did
not last for more than ten (10) months from the time of the Order of Judge
Santiago granting him probation dated 18 June 1993. Since then, Mr.
Argosino has filed three (3) Motions for Early Resolution of his Petition for
Admission to the Bar.

The practice of law is not a natural, absolute or constitutional right to be

granted to everyone who demands it. Rather, it is a high personal privilege
limited to citizens of good moral character, with special educational
qualifications, duly ascertained and certified. 2 The essentiality of good moral
character in those who would be lawyers is stressed in the following excerpts
which we quote with approval and which we regard as having persuasive
effect:
In Re Farmer: 3
xxx xxx xxx
This "upright character" prescribed by the statute, as a condition
precedent to the applicant's right to receive a license to practice
law in North Carolina, and of which he must, in addition to other
requisites, satisfy the court, includes all the elements necessary
to make up such a character. It is something more than an
absence of bad character. It is the good name which the applicant
has acquired, or should have acquired, through association with
his fellows. It means that he must have conducted himself as a
man of upright character ordinarily would, or should, or
does. Such character expresses itself, not in negatives nor in
following the line of least resistance, but quite often, in the will to
do the unpleasant thing if it is right, and the resolve not to do the
pleasant thing if it is wrong. . . .
xxx xxx xxx
And we may pause to say that this requirement of the statute is
eminently proper. Consider for a moment the duties of a lawyer.
He is sought as counsellor, and his advice comes home, in its
ultimate effect, to every man's fireside. Vast interests are
committed to his care; he is the recipient ofunbounded trust and
confidence; he deals with is client's property, reputation, his
life, his all. An attorney at law is a sworn officer of the Court,
whose chief concern, as such, is to aid the administration of
justice. . . .
xxx xxx xxx 4
In Re Application of Kaufman, 5 citing Re Law Examination of
1926 (1926) 191 Wis 359, 210 NW 710:
It can also be truthfully said that there exists nowhere greater
temptations to deviate from the straight and narrow path than in
the multiplicity of circumstances that arise in the practice of
profession. For these reasons the wisdom of requiring an

applicant for admission to the bar to possess a high moral

standard therefore becomes clearly apparent, and the board of
bar examiners as an arm of the court, is required to cause a
minute examination to be made of the moral standard of each
candidate for admission to practice. . . . It needs no further
argument, therefore, to arrive at the conclusion that the highest
degree of scrutiny must be exercised as to the moral character of
a candidate who presents himself for admission to the bar. The
evil must, if possible, be successfully met at its very source, and
prevented, for, after a lawyer has once been admitted, and has
pursued his profession, and has established himself therein, a far
more difficult situation is presented to the court when proceedings
are instituted for disbarment and for the recalling and annulment
of his license.
In Re Keenan: 6
The right to practice law is not one of the inherent rights of every
citizen, as in the right to carry on an ordinary trade or business. It
is a peculiar privilege granted and continued only to those who
demonstrate special fitness in intellectual attainment and in moral
character. All may aspire to it on an absolutely equal basis, but
not all will attain it. Elaborate machinery has been set up to test
applicants by standards fair to all and to separate the fit from the
unfit. Only those who pass the test are allowed to enter the
profession, and only those who maintain the standards are
allowed to remain in it.
Re Rouss: 7
Membership in the bar is a privilege burdened with conditions,
and a fair private and professional character is one of them; to
refuse admission to an unworthy applicant is not to punish him for
past offense: an examination into character, like the examination
into learning, is merely a test of fitness.
Cobb vs. Judge of Superior Court: 8
Attorney's are licensed because of their learning and ability, so
that they may not only protect the rights and interests of their
clients, but be able to assist court in the trial of the cause. Yet
what protection to clients or assistance to courts could such
agents give? They are required to be of good moral character, so
that the agents and officers of the court, which they are, may not
bring discredit upon the due administration of the law, and it is of
the highest possible consequence that both those who have not
such qualifications in the first instance, or who, having had them,

have fallen therefrom, shall not be permitted to appear in courts

to aid in the administration of justice.
It has also been stressed that the requirement of good moral character is, in
fact, of greater importance so far as the general public and the proper
administration of justice are concerned, than the possession of legal learning:
. . . (In re Applicants for License, 55 S.E. 635, 143 N.C. 1, 10
L.R.A. [N.S.] 288, 10 Ann./Cas. 187):
The public policy of our state has always been to
admit no person to the practice of the law unless he
covered an upright moral character. The possession
of this by the attorney is more important, if
anything, to the public and to the proper
administration of justice than legal learning. Legal
learning may be acquired in after years, but if the
applicant passes the threshold of the bar with a bad
moral character the chances are that his character
will remain bad, and that he will become a disgrace
instead of an ornament to his great calling a curse
instead of a benefit to his community a Quirk, a
Gammon or a Snap, instead of a Davis, a Smith or a
Ruffin. 9
All aspects of moral character and behavior may be inquired into in respect of
those seeking admission to the Bar. The scope of such inquiry is, indeed, said
to be properly broader than inquiry into the moral proceedings for disbarment:
Re Stepsay: 10
The inquiry as to the moral character of an attorney in a
proceeding for his admission to practice is broader in scope than
in a disbarment proceeding.
Re Wells: 11
. . . that an applicant's contention that upon application for
admission to the California Bar the court cannot reject him for
want of good moral character unless it appears that he has been
guilty of acts which would be cause for his disbarment or
suspension, could not be sustained; that the inquiry is broader in
its scope than that in a disbarment proceeding, and the court may
receive any evidence which tends to show the applicant's
character as respects honesty, integrity, and general
morality, and may no doubt refuse admission upon proofs that

might not establish his guilt of any of the acts declared to be

causes for disbarment.
The requirement of good moral character to be satisfied by those who would
seek admission to the bar must of necessity be more stringent than the norm
of conduct expected from members of the general public. There is a very real
need to prevent a general perception that entry into the legal profession is
open to individuals with inadequate moral qualifications. The growth of such a
perception would signal the progressive destruction of our people's confidence
in their courts of law and in our legal system as we know it. 12
Mr. Argosino's participation in the deplorable "hazing" activities certainly fell
far short of the required standard of good moral character. The deliberate
(rather than merely accidental or inadvertent) infliction of severe physical
injuries which proximately led to the death of the unfortunate Raul Camaligan,
certainly indicated serious character flaws on the part of those who inflicted
such injuries. Mr. Argosino and his co-accused had failed to discharge their
moral duty to protect the life and well-being of a "neophyte" who had, by
seeking admission to the fraternity involved, reposed trust and confidence in
all of them that, at the very least, he would not be beaten and kicked to death
like a useless stray dog. Thus, participation in the prolonged and mindless
physical beatings inflicted upon Raul Camaligan constituted evident rejection
of that moral duty and was totally irresponsible behavior, which makes
impossible a finding that the participant was then possessed of good moral
character.
Now that the original period of probation granted by the trial court has expired,
the Court is prepared to consider de novo the question of whether applicant
A.C. Argosino has purged himself of the obvious deficiency in moral character
referred to above. We stress that good moral character is a requirement
possession of which must be demonstrated not only at the time of application
for permission to take the bar examinations but also, and more importantly, at
the time of application for admission to the bar and to take the attorney's oath
of office.
Mr. Argosino must, therefore, submit to this Court, for its examination and
consideration, evidence that he may be now regarded as complying with the
requirement of good moral character imposed upon those seeking admission
to the bar. His evidence may consist, inter alia, of sworn certifications from
responsible members of the community who have a good reputation for truth
and who have actually known Mr. Argosino for a significant period of time,
particularly since the judgment of conviction was rendered by Judge Santiago.
He should show to the Court how he has tried to make up for the senseless
killing of a helpless student to the family of the deceased student and to the
community at large. Mr. Argosino must, in other words, submit relevant

evidence to show that he is a different person now, that he has become

morally fit for admission to the ancient and learned profession of the law.
Finally, Mr. Argosino is hereby DIRECTED to inform this Court, by appropriate
written manifestation, of the names and addresses of the father and mother (in
default thereof, brothers and sisters, if any, of Raul Camaligan), within ten (10)
day from notice hereof. Let a copy of this Resolution be furnished to the
parents or brothers and sisters, if any, of Raul Camaligan.