Title
Aro vs. Nanawa
Case
G.R. No. L-24163
Decision Date
Apr 28, 1969
Attorney Aro’s contingent fee claim was upheld after clients fraudulently waived their inheritance share, colluding to deprive him of rightful compensation.
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Case Digest (G.R. No. L-24163)

Facts:

  1. Engagement of Legal Services: Petitioner Regino B. Aro, a practicing attorney, was engaged by respondents Luis Magtibay and Pablo Magtibay to prosecute their claim as heirs to the estate of their deceased uncle, Lucio Magtibay. The properties in question were in the possession of respondents Aurelia Martinez, Gregorio Lontok, Maria Mendoza, Maximo Porto, and Rosario Andaya.

  2. Contingent Fee Agreement: Due to the Magtibay brothers' lack of funds, they agreed to engage Aro’s services on a contingent basis. The agreement stipulated that Aro would receive one-half (later reduced to one-third or P1,000) of whatever share the Magtibay brothers would recover from the estate.

  3. Filing of the Case: Aro filed a petition to litigate as paupers and a complaint in the Court of First Instance of Laguna on behalf of the Magtibay brothers. The petition was granted, and the case was docketed as Civil Case No. SC-525.

  4. Motion to Dismiss: The defendants filed a motion to dismiss the case, which Aro opposed. The court denied the motion to dismiss.

  5. Settlement Negotiations: On October 24, 1964, Aro and the defendants’ attorney discussed a possible amicable settlement. The defendants offered to settle by giving the Magtibay brothers a property worth P3,000. However, the Magtibay brothers failed to appear for the settlement meeting.

  6. Fraudulent Waiver: On October 28, 1964, Aro discovered that the Magtibay brothers and Aurelia Martinez had executed an extrajudicial partition and waiver, wherein the Magtibay brothers waived their share in favor of Aurelia Martinez, effectively depriving Aro of his contingent fee.

  7. Opposition and Counter-Motion: Aro filed an opposition to the second motion to dismiss and a counter-motion to set aside the extrajudicial partition and waiver, seeking to protect his attorney’s fees.

  8. Dismissal of the Case: The respondent judge dismissed the case without prejudice to Aro’s right to file a separate action for his attorney’s fees. Aro’s motion for reconsideration was denied.

Issue:

  1. Whether the respondent judge committed grave abuse of discretion in dismissing the case without resolving Aro’s claim for attorney’s fees.
  2. Whether the compromise agreement between the Magtibay brothers and Aurelia Martinez, which deprived Aro of his contingent fee, was fraudulent and collusive.
  3. Whether Aro is entitled to have his attorney’s fees recognized and enforced as a lien on the properties in question.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

The Supreme Court set aside the orders of the respondent judge and recognized Aro’s right to his attorney’s fees, either as one-third of the 1/4 share acknowledged in the compromise agreement or P1,000, which should constitute a lien on the said share. The Court emphasized the importance of protecting attorneys from collusive settlements and ensuring that they are fairly compensated for their services.


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