P360 altogether.
The defendant denied the allegation and
said that the agreed monthly rental was only P160, which
he had offered to but was refused by the plaintiff. The
plaintiff obtained a favorable judgment in the municipal
court (of Manila), but upon appeal the Court of First
Instance, on July 2, 1962, reversed the judgment and
dismissed the complaint, and ordered the plaintiff to pay
VOL. 28, MAY 21, 1969 235
the defendant the sum of P500 as attorney's fees. That
Gan Tion vs. Court of Appeals judgment became final.
On October 10, 1963 Gan Tion served notice on Ong
No. L-22490. May 21, 1969. Wan Sieng that he was increasing the rent to P180 a
month, effective November 1st, and at the same time
GAN TION, petitioner, vs. HON. COURT OF APPEALS, demanded the rents in arrears at the old rate in the
HON. JUDGE AGUSTIN P. MONTESA, as Judge of the aggregate amount of P4,320.00, corresponding to a period
Court of First Instance of Manila, ONG WAN SIENG and from August 1961 to October 1963.
THE SHERIFF OF MANILA, respondents. In the meantime, over Gan Tion's opposition, Ong Wan
Sieng was able to obtain a writ of execution of the
judgment for attorney's fees in his favor. Gan Tion went on
Attorney's fees; Award is in favor of litigant not of his counsel. certiorari to the Court of Appeals, where he pleaded legal
—An award for attorney's fees is made in favor of the litigant, not compensation, claiming that Ong Wan Sieng was indebted
of his counsel, and the litigant, not his counsel, is the judgment to him in the sum of P4,320 f or unpaid rents, The
creditor who may enforce the judgment for attorney's fees for appellate court accepted the petition but eventually decided
execution. for the respondent, holding that although "respondent Ong
Civil law; Obligations; Extinguishment of obligations; is indebted to the petitioner for unpaid rentals in an
Compensation; Award for attorney's fees as subject of legal amount of more than P4,000.00," the sum of P500 could not
compensation.—An award for attorney's fees is a proper subject of be the subject of legal compensation, it being a "trust fund
legal compensation. for
236 237
236 SUPREME COURT REPORTS ANNOTATED VOL. 28, MAY 21, 1969 237
Gan Tion vs. Court of Appeals Commissioner of Immigration vs. Go Tieng
PETITION from a judgment of the Court of Appeals. the benefit of the lawyer, which would have to be turned
over by the client to his counsel." In the opinion of said
The facts are stated in the opinion of the Court. Court, the requisites of legal compensation, namely, that
Burgos & Sarte for petitioner. the parties must be creditors and debtors of each other in
Roxas, Roxas, Roxas & Associates for respondents. their own right (Art. 1278, Civil Code) and that each one of
them must be bound principally and at the same time be a
MAKALINTAL, J.: principal creditor of the other (Art. 1279), are not present
in the instant case, since the real creditor with respect to
The sole issue here is whether or not there has been legal the sum of P500 was the defendant's counsel.
compensation between petitioner Gan Tion and respondent This is not an accurate statement of the nature of an
Ong Wan Sieng. award for attorney's fees. The award is made in favor of the
Ong Wan Sieng was a tenant in certain premises owned litigant, not of his counsel, and is justified by way of
by Gan Tion. In 1961 the latter filed an ejectment case indemnity for damages recoverable by the former in the
against the former, alleging non-payment of rents for 1
cases enumerated in Article 2208 of the Civil Code. It is
August and September of that year, at P180 a month, or the litigant, not his counsel, who is the judgment creditor
and who may enforce the judgment by execution. Such
credit, therefore, may properly be the subject of legal
compensation. Quite obviously it would be unjust to compel
petitioner to pay his debt f or P500 when admittedly his
creditor is indebted to him for more than P4,000.
WHEREFORE, the judgment of the Court of Appeals is
reversed, and the writ of execution issued by the Court of
First Instance of Manila in its Civil Case No. 49535 is set
aside. Costs against respondent.
Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Sanchez,
Fernando and Capistrano, JJ., concur.
Teehankee and Barredo, JJ., did not take part.
Concepcion, C.J., and Castro, J., are on leave.
Judgment reversed.
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