Case Digest (G.R. No. 68838)
Facts:
Florencio Fabillo and Josefa Tana (substituted by their heirs Gregorio Fabillo, Roman Fabillo, Cristeta F. Maglinte and Antonio Fabillo) v. The Honorable Intermediate Appellate Court (Third Civil Case Division) and Alfredo Murillo (substituted by his heirs Fiamita M. Murillo, Flor M. Agcaoili and Charito M. Babol), G.R. No. 68838, March 11, 1991, Supreme Court Third Division, Fernan, C.J., writing for the Court.
The dispute arose from the probate of the last will and testament of Justina Fabillo (dated August 16, 1957), who bequeathed to her brother Florencio Fabillo a house and lot in San Salvador Street, Palo, Leyte (Tax Declaration No. 19335), and to her husband Gregorio D. Brioso a parcel in Pugahanay, Palo, Leyte. After Justina’s death Florencio filed for probate; on June 2, 1962 the probate court approved a partition project but reserved the ownership of the San Salvador property for separate litigation.
In August 1964 Florencio engaged Atty. Alfredo M. Murillo to pursue recovery of the San Salvador property. Murillo’s August 9, 1964 handwritten letter proposed a 40% contingent fee “of the money value of the house and lot” in case of success. On August 22, 1964 the parties signed a written “Contract of Services” in which Florencio (and his wife Josefa) retained Murillo for the probate matter and for Civil Case No. 3532 (Florencio Fabillo v. Gregorio D. Brioso). The contract provided, inter alia, that in case of success Murillo would receive “the sum equivalent to FORTY PER CENTUM (40%) of whatever benefit I may derive from such cases” and specifically referred to 40% of the purchase price if the property were sold, 40% of mortgage proceeds if mortgaged, 40% of rentals if leased, and allowed Murillo “the option of either occupying or leasing to any interested party FORTY PER CENT of the house and lot” where the property was neither sold nor mortgaged.
Murillo filed Civil Case No. 3532 and the case terminated on October 29, 1964 when the court, on the parties’ joint motion of compromise, declared Florencio the lawful owner of both the San Salvador and the Pugahanay parcels. Thereafter Murillo asserted rights under the contract, took possession and exercised ownership over what he claimed was a 40% share of the properties, and installed a tenant on the Pugahanay parcel. In 1966 the Fabillos repudiated Murillo’s asserted share; in response Murillo filed on March 23, 1970 Civil Case No. 4434 (ownership, damages and appointment of a receiver) against the Fabillos and their heirs, praying among other things that he be declared owner of 40% of the two properties and awarded damages and attorney’s fees.
The Court of First Instance of Leyte (Judge Auxencio C. Dacuycuy) decided on December 2, 1975 that the spouses’ consent was not vitiated and that the contingent-fee contract did not violate Article 1491 of the Civil Code; it upheld Murillo’s claim and declared him owner of 40% of both parcels, ordered collection of portions of produce and income, and awarded costs. On January 29, 1976 the trial court modified its judgment and entered specified money awards (including P2,450 representing 40% of net produce for certain years and P300 as attorney’s fees).
The Fabillos (substituted by their children after the deaths of Florencio and Justina) appealed to the then Intermediate Appellate Court, which o...(Subscriber-Only)
Issues:
- Did the contract of services between the Fabillos and Atty. Murillo violate Article 1491(5) of the Civil Code (prohibiting lawyers from acquiring by purchase properties which are the objects of litigation)?
- Did the contract transfer ownership of forty percent (40%) of the disputed properties to Murillo, or did it entitle him only to forty percent of the value/benefit derived from the litigation?
- If the Court declines to enforce a 40% ownership award, what is a reasonable attorne...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)