G.R. No.

116909 February 25, 1999

VIVENCIO M. RUIZ, EMILIO D. CASTELLANES and BLAS A. MIRANDA, petitioners,

vs.
THE COURT OF APPEALS, PEDRO V, GARCIA as presented by his legal representative, MA.
LUISA G. MAGPAYO, respondents.

PURISIMA, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court
seeking review of the 26 November 1993 Decision and the 02 September 1994 Resolution of
1 2

Court of Appeals in CA-G.R. CV No. 34360.

3

The late Pedro V. Garcia was a businessman with substantial shareholdings in V.C. Ponce Co., Inc.
consisting of shares of stock and real properties. Sometime in 1977, an internal conflict besieged the
company resulting in suits between respondent Garcia and V.C. Ponce Co., Inc. over the former's
funds and assets.

On March 10, 1977, respondent Pedro V. Garcia engaged the legal services of herein petitioners,
Attys. Vivencio M. Ruiz and Emilio D. Castellanes, and an agreement denominated as a Contract of
Retainership was executed by them, the pertinent portion of which, reads:
4

CONTRACT OF RETAINERSHIP

I, PEDRO V. GARCIA, of legal age, married to Remedios T. Garcia and residing at #100
Adelita Chioco St., Phase II, B.F. Homes, Parañaque, Metro Manila, do hereby declare and
certify that I have engaged and retained, as I do hereby retain and engage, the services of
Atty. V.M. RUIZ and his associate, E.D. CASTELLANES as my counsel to handle, protect
and prosecute all cases involving my rights and interests and that of my family .in the
370,000 shares of stocks which, we own in the V.C. Ponce Co., Inc., especially the case I
have filed against Vicente C. Ponce before the Securities and Exchange Commission
(S.E.C. Case No. 001451, Series of 1977), all other related and allied cases, both civil and
criminal, which may be assigned to and accepted by him or which have been specifically
endorsed to him and now pending before the courts and other venues . . .

xxx xxx xxx

and IN CONSIDERATION of the services of the said attorney, I do hereby assign and
transfer to him, his heirs, executors and assigns, forever fifteen (15%) percent of all my/our
shares of stock aforesaid, fully paid, evidenced by Certificate of Stock Nos. 003, 010, and
004, issued by the Corporation in our respective names . . . and of all the benefits and
dividends due but not declared and paid on said shares from 1963 up to the execution of this
retainership, including any/all monies and assets due us and other recoverables, for me and
my family, and, in addition, I further agree to pay the said attorney a yearly retainership fee of
P24,000.00 per annum in twelve (12) equal monthly payments of P2,000.00 each, payable
on or before the 5th of every ensuing month starting April 1977.

Accordingly, petitioners handled Civil Case Nos. 14297 and 17713 which were consolidated before
Branch 13 of the Court of First Instance of Pasig, Rizal. Civil Case No. Pq-6596 was before Branch
29, of the Court of First Instance in Pasay City.
On July 22, 1982, Pablo V. Garcia unilaterally terminated the said Contract of Retainership on the
alleged ground that the petitioners, his lawyers, failed to settle amicably his (Garcia) differences with
V. C. Ponce Co., Inc. Petitioners were paid attorney's fees up to the month of July, 1982. Thereafter,
the petitioners Ruiz and Castellanes manifested their withdrawal as counsel for Pedro V. Garcia and
moved their attorney's lien be put on record, in the cases involved. Such motion was granted by the
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trial court.

On February 9, 1984, petitioners Ruiz and Castellanes brought their action "For Collection of Sum of
Money and for Specific Performance", docketed as Civil Case No. 6465 before Branch 140, of the
Regional Trial Court in Makati City.

On September 27, 1990, while the said case was pending before the said lower court of origin,
Pedro V. Garcia died. And so, on October 4, 1990, after notifying the trial court of the demise of their
client, counsel moved for the dismissal of the complaint invoking Section 21, Rule 3 of the Rules of
Court. 6

On February 8, 1991, the lower court issued an Order petitioners' complaint, stating that:

. . . the Court is of the opinion and so holds that the present action is one for recovery of
money or interest in whatever recovery the deceased defendant may obtain in cases for
which the plaintiffs services were contracted; and that plaintiffs client, the herein defendant,
died before final judgment in this case, hence, Section 21 of Rule 3 of the Rules of Court
applies.

On appeal, the Court of Appeals handed down its challenged Decision, disposing, thus:

WHEREFORE, the Order appealed from is hereby MODIFIED to read, as follows:

In view of the foregoing, the motion to dismiss and the supplemental motion are hereby
granted. Civil Case No. 6364 is hereby DISMISSED in accordance with Section 21, Rule 3 of
the Rules of Court, and the notice of lis pendens annotated in T.C.T. No. 64567 is hereby
ordered canceled.

No pronouncement as to cost.

With the denial of their motion for reconsideration, petitioners found their way to this Court via the
present Petition; theorizing that:

RESPONDENT COURT ERRED IN FINDING THAT THE INSTANT CASE FOR

RECOVERY OF ATTORNEY'S PROFESSIONAL FEES WHICH HAD NOT BEEN
ADJUDICATED BY FINAL PRONOUNCEMENT IS ABATED BY THE DEATH OF THE
DEFENDANT-CLIENT AND SHOULD THEREFORE BE DISMISSED IN ACCORDANCE
WITH SECTION 21, RULE 3 OF THE RULES OF COURT.

II

RESPONDENT COURT ERRED IN NOT TAKING JUDICIAL NOTICE OF THE DECISION

OF THE THEN INTERMEDIATE APPELLATE COURT IN AC-GR NO. SP — 05291
 FINDING THE INSTANT CASE ONE FOR RECOVERY OF LAND OR AN INTEREST
THEREIN;

III

RESPONDENT COURT ERRED IN FINDING THAT THE INSTANT CASE IS ONE "TO
COMPEL THE CLIENT-DEFENDANT TO RECOGNIZE FOREMOST THE EXISTENCE OF
THE ATTORNEY-CLIENT RELATIONSHIP AFTER IT WAS SEVERED AND AS A
CONSEQUENCE, INCIDENTALLY CLAIM PAYMENT OF THEIR PROFESSIONAL FEES.

The pivot of inquiry here is: Whether or not the case at bar has survived the death of the private
respondent, Pedro V. Garcia.

It is petitioners' theory that the action they brought below was, among others, for the enforcement of
their charging lien in Civil Case Nos. 14297 and 17713, and Civil Case No. Pq-6596; which involved
a claim over the real properties litigated upon, and therefore, an action which survived the death of
their client, Pedro V. Garcia.

Sec. 21, Rule 3 of the Rules of Court provides:

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Where claims does not survive — When the action is for recovery of money, debt or interest
thereon, and the defendant dies before final judgment in the Court of First instance, it shall
be dismissed to be prosecuted in the manner especially provided in this rules.

To begin with, the aforequoted provision of law was modified by the enactment of the 1997 Civil
Procedure, Section 20, Rule 3 of which, reads:

When the action is for recovery of money arising from contract, express or implied, and the
defendant dies before final entry of final judgment in the court in which the action was
pending at the time of such death, it shall not be dismissed but shall be allowed to continue
until entry of final judgment. A favorable judgment obtained by the plaintiff therein shall be
enforced in the manner especially provided in these Rules for prosecuting claims against the
estate of a deceased person.

It is a fundamental rule in legal hermeneutics that "statutes regulating the procedure of the courts will
be construed as applicable to actions pending and undetermined at the time of the
passage," Considering that the case under scrutiny was passed upon by the lower courts under the
8

old rule, it follows that the old rule governs.

Under the plain language of Section 21, Rule 3 of B.P. 129 it is beyond cavil that "if the defendant
dies before the Court of First Instance or the Regional Trial Court has rendered a judgment, the
action is dismissed and the plaintiff is required to file a money claim against the estate of the
deceased. But if the defendant dies after the said court has rendered a judgment and pending
appeal, the action is not dismissed and the deceased defendant is substituted by his executor or
administrator or legal heirs."
9

To determine whether the action survives or not, the Court ruling in Bonilla vs. Barcena (71 SCRA
491), comes to the fore, thus:

The question as to whether an action survives or not depends on the nature of the action
and the damage sued for (Iron Gate Bank vs. Brady, 184 U.S. 665, 22 SCT, 46 L.ed 739). In
 the cause of action which survive, the wrong complained affects primarily and principally
property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive, the injury complained of is to the person, the property
end rights of property effected being incidental . . . .
ℒαwρhi ৷

The core of petitioners' argument is that action should not be dismissed since their complaint
involves not just monetary claim but also real properties as well.

Petitioners' contention is untenable. While they maintain that what they are claiming include real
properties, their Complaint is captioned as "For Collection of Money and for Specific Performance."
Obviously, the petitioners themselves, who are lawyers, believed that the cause of action against the
private respondent was in the nature of actio in personam.

"Actio in personam is a personal action seeking redress against a particular person. Personal
actions are such whereby a man claims a debt, or personal duty, or damages in lieu thereof." In the
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present case petitioners seek to recover attorney's fees from private respondent for the professional
services they rendered to the latter. Attorney's fee is basically a compensation. In its ordinary
11

sense, "the term (compensation) applies not only to salaries, but to compensation by fees for
specific services."12

Viewed in proper perspective, an action to recover attorney's fees is basically a monetary claim,
which under Section 21, Rule 3 of B.P. 129 is an action that does not survive. Such is the fate of
Civil Case No. 6465.

Petitioners theorize that the inclusion of real properties as part of the attorney's fees private
respondent owe them, converted the action into one that survives or at the very least, split the action
into one that did not survive, with respect to the monetary obligation, and which survived, with
respect to the real properties of the deceased.

In Harden vs. Harden, 20 SCRA 706, the Court ruled that an action for the satisfaction of attorney's
fees is founded on a personal obligation which does not survive the death of the defendant before
adjudication.13

As enunciated in Bonilla, the litmus test in determining what action survives and what does not
depends on the nature of the action and not on the object or kind of property sought to be recovered.

All things studiedly considered, we are of the opinion, and so hold, that respondent Court of Appeals
erred not in affirming the decision of the court a quo.

WHEREFORE, the Petition is hereby DENIED; and the decision of the Court of Appeals in CA-G.R.
CV No. 34360 AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED.