Facts:

The case of M. E. Grey, Deceased, Substituted by Ruth Grey, as Administratrix of the Estate of the Late M. E. Grey vs. Insular Lumber Company (G.R. No. L-7777) was decided on October 31, 1955. The original action was initiated by M. E. Grey against the Insular Lumber Company to recover a monetary sum. Following Grey's death, Special Proceedings No. 387 were initiated in the Court of First Instance of Negros Occidental for the administration of his estate, with Ruth Grey appointed as the administratrix. Subsequently, Ruth Grey substituted M. E. Grey as the plaintiff in the case. The trial court ruled in favor of the plaintiff, but the Supreme Court modified this judgment in G.R. No. L-535. In compliance with the final judgment, the Insular Lumber Company issued a check for P88,453.56, made out to Ruth Grey in her capacity as administratrix, and delivered it to Atty. Carlos Hilado, the counsel for the plaintiff. On February 23, 1954, Atty. Hilado filed a motion with the tri...

Facts:

1. Origins of the Case:
   The case originated from a money claim filed by M. E. Grey against Insular Lumber Company (the Company). Upon Grey's death, Ruth Grey was appointed administratrix of his estate and substituted him as the plaintiff. The trial court ruled in favor of the plaintiff, and the Supreme Court later modified the judgment in G.R. No. L-535.

2. Payment of Judgment Debt:
   In compliance with the final judgment, the Company issued a check for P88,453.56 payable to Ruth Grey, as administratrix of the estate of M. E. Grey, and delivered it to Atty. Carlos Hilado, counsel for the plaintiff.

3. Atty. Hilado’s Claim for Attorney’s Fees:
   Atty. Hilado filed a motion with the trial court, claiming a contingent fee of 25% (P22,113.89) of the judgment amount under a contract with M. E. Grey. He requested the court to order the Company to cancel the original check and issue two separate checks: one for P66,340.17 to the administratrix and another for P22,113.39 to him.

4. Opposition by the Company:
   The Company opposed the motion, arguing that it had already fulfilled its obligation by paying the judgment debt in full. It suggested that Atty. Hilado file his claim for attorney’s fees in the probate proceedings.

5. Trial Court’s Order:
   The trial court granted Atty. Hilado’s amended motion, ordering the Company to cancel the original check and issue two separate checks as requested. The Company appealed this order to the Supreme Court.

6. Notification Issues:
   Atty. Hilado claimed to have notified Atty. Jose A. Strachan, the attorney for the estate, by registered mail. However, it was unclear whether Atty. Strachan received the notice in time to respond, and administratrix Ruth Grey, residing in the United States, was not given sufficient opportunity to participate in the proceedings.

Issue:

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Ruling:

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Ratio:

1. Compliance with Judgment Debt:
   Once the Company paid the judgment debt in full, it had no further obligation to the plaintiff or her counsel. The payment of attorney’s fees is a separate matter that must be resolved between the attorney and the estate.

2. Protection of Charging Liens:
   While contingent fees are allowed under Philippine law, they must be reasonable and just. The court has a duty to supervise such fees to protect clients from unjust charges. The validity and reasonableness of Atty. Hilado’s claim must be established in a proper proceeding.

3. Jurisdiction of the Probate Court:
   The funds of the estate are in custodia legis, and the probate court has jurisdiction over their distribution. Any claim for attorney’s fees must be approved by the probate court after giving the administratrix an opportunity to contest the claim.

4. Due Process for the Administratrix:
   The administratrix, Ruth Grey, was not given sufficient notice or opportunity to participate in the proceedings. She must be given adequate time to respond to Atty. Hilado’s claim, including the option to appear in court if she so desires.