Title
Grey vs. Insular Lumber Co.
Case
G.R. No. L-7777
Decision Date
Oct 31, 1955
The Supreme Court remands to assess the attorney's entitlement to a contingent fee and the issuance of separate checks for the administratrix and attorney, highlighting the necessity of court oversight on contingent fees and the probate court's jurisdiction over estate funds.
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Case Digest (G.R. No. L-7777)

Facts:

  • The case involves M. E. Grey, deceased, represented by Ruth Grey as administratrix of his estate, against Insular Lumber Company (G.R. No. L-7777), decided on October 31, 1955.
  • M. E. Grey initially filed a suit to recover a monetary amount from the Insular Lumber Company.
  • After Grey's death, Special Proceedings No. 387 commenced in the Court of First Instance of Negros Occidental for estate administration, with Ruth Grey appointed as administratrix.
  • Ruth Grey substituted M. E. Grey as the plaintiff in the ongoing case.
  • The trial court ruled in favor of the plaintiff, but the Supreme Court modified this decision in G.R. No. L-535.
  • The Insular Lumber Company issued a check for P88,453.56 to Ruth Grey, delivered to Atty. Carlos Hilado, the plaintiff's counsel.
  • On February 23, 1954, Atty. Hilado filed a motion for a 25% contingent fee, totaling P22,113.89, requesting direct payment to him and cancellation of the original check.
  • The Company opposed, stating it had fulfilled its obligation by paying the administratrix.
  • Atty. Hilado filed an amended motion, and on March 16, 1954, the trial court ordered the Company to cancel the original check and issue two new checks: P66,340.17 to Ruth Grey and P22,113.39 to Atty. Hilado.
  • The Company appealed, arguing it had already complied with its obligation.

Issue:

  • (Unlock)

Ruling:

  • The Supreme Court set aside the trial court's order from March 16, 1954, that granted Atty. Hilado's motion.
  • The case was remanded to the trial court for further proceedings, en...(Unlock)

Ratio:

  • The Supreme Court determined that the Insular Lumber Company had met its legal obligation by issuing the check to Ruth Grey, the administratrix.
  • Atty. Hilado's claim for attorney's fees was invalid at that stage since the Company had already complied with the judgment.
  • The court emphasized that claims for attorney's fees must be established and app...continue reading

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