G.R. No. 247724 - Dimayuga Law Offices vs. Titan-Ikeda Construction and Development Corp.

Case Summary (G.R. No. 247724)

Factual Background

Primetown Property Group, Inc. engaged Titan-Ikeda Construction and Development Corporation for structural works of the Prime Tower for PHP 40,000,000 and later awarded architectural works for PHP 130,000,000 to be paid by "full swapping" in condominium units and parking slots. Integraltech, Inc. estimated that as of October 12, 1995 Titan-Ikeda had completed only 48.71% of the architectural works, resulting in an overpayment by Primetown of PHP 66,677,000. Titan-Ikeda refused to return the excess units and parking slots despite demands.

Prior Adjudication and Supreme Court Remand

The dispute produced HLURB and RTC rulings favoring Titan‑Ikeda before the Supreme Court reviewed the case. In Titan-Ikeda Construction and Development Corp. v. Primetown Property Group, Inc., the Supreme Court on February 12, 2008 set aside earlier judgments, ordered Titan‑Ikeda to return the condominium units and parking slots corresponding to the excess payment subject to allowable claims, dismissed Titan‑Ikeda’s claims for additional work and damages, and remanded for reception of evidence to determine actual percentage completed as of October 12, 1995 and related computations.

Remand Findings and Final RTC Decision

On remand the RTC found that Titan‑Ikeda completed only 48.71% of architectural works as of October 12, 1995, and that Primetown had overpaid at a rate of 51.29%. The RTC determined that 117 condominium titles had been transferred to Titan‑Ikeda, of which 42 had been conveyed to third‑party buyers and 75 remained in Titan‑Ikeda’s name. The RTC ordered Titan‑Ikeda to return sixty condominium units, identified specific Condominium Certificate of Title numbers, and awarded the monetary equivalent of PHP 66,677,000. Titan‑Ikeda’s notice of appeal was dismissed for failure to pay the appeal fee, rendering the April 30, 2012 decision final and executory.

Attorney’s Lien, Sale in Kind, and Adverse Claim

Acting for Primetown, Dimayuga Law Offices executed a retainer agreement dated April 24, 2003 entitling it to twelve percent of monetary awards and interests. Dimayuga moved to record and enforce a charging lien and the RTC’s Omnibus Order dated April 10, 2013 subjected ten specified Condominium Certificate of Title numbers to the attorney’s lien. After the decision became final and a writ of execution issued, Primetown satisfied counsel in kind by conveying the ten units to Dimayuga via Deeds of Absolute Sale dated May 5, 2015. Dimayuga updated real property taxes and filed an Affidavit of Adverse Claim annotated on the ten certificates because title transfers remained in Titan‑Ikeda’s name due to noncompliance with the writ.

Compromise Agreement and RTC Cancellation of Lien

Without Dimayuga’s knowledge, Primetown and Titan‑Ikeda filed a Joint Motion and obtained an RTC‑approved Compromise Agreement, resulting in a Compromise Judgment dated October 6, 2017 that included provisions revoking certain letters to the Registry of Deeds and cancelling lis pendens and adverse claims annotated on the sixty titles. Titan‑Ikeda thereafter filed a Motion to Cancel Attorney’s Lien and Adverse Claim. The RTC granted the motion in an Order dated June 4, 2018, reasoning that the compromise provisions required cancellation, that the titles remained registered in Titan‑Ikeda’s name and therefore were not property of Primetown, and that Dimayuga should collect its fees from its client Primetown rather than from Titan‑Ikeda.

Court of Appeals Proceedings

Dimayuga Law Offices petitioned the Court of Appeals for certiorari, but the CA dismissed the petition on January 17, 2019 for failure to attach certified true copies of relevant documents. After the defect was corrected, the CA again denied relief, holding that counsel’s claim arose from services to Primetown and therefore had to be satisfied from Primetown’s money or property; because the ten titles remained in Titan‑Ikeda’s name and the April 30, 2012 decision had not been executed, Dimayuga’s charging lien could not be satisfied from Titan‑Ikeda’s properties.

Issue Presented

Whether the attorney’s fees and the adverse claim of Dimayuga Law Offices annotated as a charging lien on the ten condominium certificates of title could be cancelled pursuant to the compromise agreement entered into between Primetown Property and Titan‑Ikeda Construction.

Supreme Court Holding

The Supreme Court granted the petition. The Court held that the RTC erred in cancelling the charging lien and adverse claim of Dimayuga Law Offices pursuant to the compromise agreement between Primetown and Titan‑Ikeda. The Court ordered the June 4, 2018 RTC Order set aside.

Legal Basis and Reasoning

The Court explained that a lien is a charge on property and that a charging lien under Section 37, Rule 138 is a right upon judgments for the payment of money and executions secured by counsel in litigation, enforceable after entry of the claim of lien on court records and notice to the client and adverse party. The Court observed that upon annotation the attorney’s lien became a burden on the ten condominium units and that under Section 59 of Presidential Decree No. 1529 all subsisting encumbrances appearing in the registration book shall be carried into the new certificate of title unless simultaneously released. The Court emphasized that a compromise is a contract that binds only the parties and their successors‑in‑interest under Article 1311 of the Civil Code and cannot affect the rights of third persons. A lawyer is a third person in relation to a compromise between client and

Case Syllabus (G.R. No. 247724)

Parties and Procedural Posture

Dimayuga Law Offices filed a Petition for Review on Certiorari under Rule 45, Rules of Court, assailing CA Resolutions dated January 17, 2019 and May 30, 2019 that denied its petition for certiorari.
Titan-Ikeda Construction and Development Corporation opposed the petition and moved for cancellation of an attorney's lien and adverse claim annotated on ten condominium certificates of title.
The case arose from an RTC, Branch 58, Makati City Order dated June 4, 2018 that ordered removal of Dimayuga Law Offices’ attorney's lien and adverse claim on ten condominium titles.
The Court of Appeals dismissed Dimayuga Law Offices’ certiorari petition initially for procedural defects and subsequently on the merits asserting that the lien could not be satisfied from properties not belonging to Primetown.
The Supreme Court granted the petition and set aside the RTC Order dated June 4, 2018.

Key Factual Allegations

Primetown Property Group, Inc. contracted Titan-Ikeda Construction for structural and architectural works of the Makati Prime Tower and paid by transferring condominium units and parking slots.
An engineering evaluation estimated that as of October 12, 1995 Titan-Ikeda had completed only 48.71% of the architectural works, resulting in an overpayment equivalent to P66,677,000.00.
The Supreme Court in 2008 ordered Titan-Ikeda to return condominium units and parking slots corresponding to the overpayment and remanded the case to the RTC for further proceedings.
The RTC in 2012 found that Titan-Ikeda must return 60 condominium units and identified ten specific Condominium Certificate of Title numbers among them.
Dimayuga Law Offices caused annotation of its attorney's lien on those ten certificates based on a retainer agreement entitling it to twelve percent of monetary awards and thereafter received ten units by Deeds of Absolute Sale as in-kind payment of its fees.
Primetown Property and Titan-Ikeda Construction later executed a compromise agreement that contained provisions for the cancellation of lis pendens and adverse claims on the sixty titles.
The RTC granted Titan-Ikeda Construction’s Motion to Cancel Attorney's Lien and Adverse Claim, and the CA denied Dimayuga Law Offices’ certiorari petition before the Supreme Court review.

Statutory Framework

Section 37, Rule 138, Rules of Court recognizes an attorney's retaining lien and charging lien and prescribes the mechanics for a lien on judgments and executions.
Section 59, Presidential Decree No. 1529 provides that subsisting encumbrances or annotations on a certificate of title shall be carried over in any transfer unless simultaneously released or discharged.
Article 2028, Civil Code defines a compromise as a contract of reciprocal concessions to avoid or end litigation.
Article 1311, Civil Code establishes that a contract is binding between the parties and their successors-in-interest.
The petition invoked supervisory and remedial relief under Rule 45, Rules of Court to correct alleged grave abuse of discretion by the RTC.

Issues

Whether the attorney's fees and adverse claim of Dimayuga Law Offices annotated as a lien on ten condominium certificates of title may be cancelled pursuant to the compromise agreement between Primetown Property and Titan-Ikeda Construction.
Whether the RTC acted within jurisdiction and accorded due process when it ordered cancellation of the attorney's lien by motion rather than by proper action required for cancellation of adverse claims on land.

Contentions of the Parties

Dimayuga Law