ATTORNEY’S LIEN

A. IN GENERAL
-These rules are designed to insure payment of the lawyer’s professional fees and the
reimbursement of his lawful disbursement in keeping with his dignity as an officer of the court.
- these are effective hold on his client to assure payment of his.
Rule 22.02 of the CPR –lawyer who withdraws or discharged shall, subject to retaining lien,
immediately turn over all papers and property to which the client is entitled, and shall cooperate
with his successor in the orderly transfer of the matter.
Rule 16.03 –lawyer shall have lien over the funds of his client and may apply so much thereof s
may be necessary to satisfy his lawful fees and disbursement, giving notice promptly thereafter
to his client.
B. Retaining Lien and Charging Lien distinguished
Retaining Lien- the right of an attorney to retain the funds, documents and papers of his client
which have lawfully come in to his possession until what is due him has been paid.
Charging Lien- is a right of an attorney upon all judgements for the payment of money and
executions issued in pursuance of such judgment rendered in the case wherein his services
have been retained by the client.

C. Definition
Retaining Lien- is a general lien for the balance of the account due to the attorney from his
client for services rendered in all matters which he may handle for the client, regardless of their
outcome.
Charging Lien- is special lien in a particular case and presupposes that a favorable judgement
has been secured or contributed some effort to secure the favorable judgement the same right
and power as his client over such judgements and executions to enforce his lien and secure
payment of his fess and disbursement.
D. Nature and Essence of Retaining Lien
- it is a passive right and cannot be actively enforced.
-There is no dispute as to fees, a lawyer may apply so much of the client’s funds in his
possession to satisfy his lawful fees and disbursement giving the notice and details thereof
promptly to his clients and remitting the remaining balance to the latter.

E. Requisites for Validity

1. Attorney-client relationship
2. Lawful possession by the lawyer of the client’s funds, documents and papers in his
professional capacity.
3. Unsatisfied claim for attorney’s fees or disbursement
 F. The Property to which Lien attaches

-to all property, papers, books, documents or securities of the client that lawfully come to the
lawyer professionally or in the course of his professional employment not necessarily in
connection with a particular case but any case or matter handled for client.
-retaining lien does not attach to funds, documents, papers which come into the lawyer’s
possession in some other capacity, such as an agent of the client’s spouse or as mortgage or
trustee is this acquire no retaining lien.
- it is not extending to funds, documents and papers of the client’s principal, such as estate
represented by the lawyer’s clients as administrator.

Except:
a. When he is also retained as a counsel for the estate against whom he has an unpaid
claim for attorney’s fees.
b. Does not extend to the subject matter of the action, which the court has adjudged in
favor of the client’s adversary.

G. When Lien attaches-

-from the moment the attorney lawfully obtains and retains possession of the funds,
documents and papers of the client.

H. Bond for return of documents

1. -In case the retaining lien is incontestable, then the court may not compel him to
surrender those documents and papers of the clients without prior proof that his fees
and disbursement have been duly satisfied.

2. -It is indispensable that the court should gain possession of the documents that have
come to the attorney and are held by him in the course of his employment as
counsel, over which he has chosen to exercise his right to retention. It may only
require upon posting of adequate bond or security.

3. -If the clients file such Bond or Security, the court may not compel the surrender of
the documents and papers without gravely abusing its discretion or authority for the
courts duty is to protect and not to destroy the attorneys retaining lien.

I. Extinguishment of Retaining Lien

-the general or retaining lien is dependent upon possession and does not attach to anything not
in attorney’s possession.
-it expires when possession lawfully ends, as when the lawyer voluntarily parts with funds,
documents and papers of his client or offers them in evidence in court.
-if the papers or documents have been improperly or illegally taken from the custody of attorney,
his lien is not lost thereby, unless by his act or omission he waives his right thereto. And
Mandamus will lie to restore possession of the documents unlawfully taken from him.
 J. Satisfaction of Lien

-The attorney’s general or retaining lien is only mere passive right to enforce collection of his
fees and disbursement. Unless the client as consequences of the inconvenience arising from
attorney’s exercising his right to retain the documents and papers of the client, voluntarily pays
him his fees and disbursement, the lawyer still has to file the necessary action to recover what is
due him from his client.
-The lawyer need not file an action in court to enforce his retaining lien and recover his fees and
disbursement if what he retains in the exercise of his lien refers to funds or money of the client
that lawfully come into his possession and the client does not dispute his claim for attorney’s
fees and the amount thereof. In such a case, the lawyer may lawfully apply the client’s funds in
satisfaction of his claim for attorney’s fees and disbursement.
-The lawyer is required to send his client an accounting, showing the amount deducted in
payment of his claim and remitting the balance, if any, to the client. But where the clients
question his right to or the amount of attorney’s fees, the lawyer should not apply the client’s
funds in his possession to satisfy his claim for service rendered.
-In this event the client shall file the necessary action or motion to fix the amount of fees, and
only after the same shall have been finally adjudicated that he can apply the clients fund to pay
his fees.
-If he makes the application without his right to or the amount of his fees first determined by the
court or without the client’s consent, he may be liable for Misappropriation of the Clients
Fund.

K. Nature and Essence of Charging Lien

- is an equitable right to have the fees and lawful disbursement due a lawyer for his
service in a suit secured to him out of the judgement for the payment of money and
executions issued in pursuance thereof in particular suit.
- it is an abstract but potential right until it’s made active and operative by recording a
statement of claim in the case and serving notice thereof upon the client and the
adverse party.
- It gives a lawyer the same right and power as the client over such judgement and
execution to enforce his right and secure payment of his fee and disbursement.
- It is a device invented by a law for the protection of attorneys against knaveries of
their clients by disabling them from receiving the fruits of recoveries without paying
for the valuable services by which the recoveries were obtained.
- it is not attached to property in litigation but is at most a personal claim enforeceable
by writ of execution.

L. REQUISITES FOR VALIDITY OF CHARGING LIEN

1. There must be an attorney-client relationship
2. The attorney has rendered services
3. Money judgement favorable to the client has been secured in action (sine qua non)
 4. Statement of his claim has been duly recorded in the case with notice thereof served
upon the client and the adverse party.

M. RECORDAL AND NOTICE OF LIEN

Charging lien – take effect from and after the time the attorney has caused a notice of
his lien to be duly entered in the record of the case.

Validity of Recordal -should be effected while the court has jurisdiction over the case
and before full satisfaction of the judgement.

How to apply lien-

First resolve the question in full dress trial before should order the registration of the charging
lien, however, the exact amount of the attorney’s fees should be determined before the lien can
be enforced. If the clients fail to contest the claim, he will be bound by the amount specified in
the lien even though it may appear to be unjust.

N. To what Charging Lien attaches

-The attorney’s charging lien, once duly recorded, attaches to the judgement for the payment of
money and the executions issued in pursuance of such judgement.
-It is also attaches to the proceeds of the judgment in favor of the client because a judgement
for money is only as valuable as the amount that may realize therefrom. it likewise attaches to
the proceeds of a compromise settlement.
O. Effects of Charging Lien
-Lien gives the lawyer the right to collect, in payment of his professional fees and disbursement,
a certain amount from out of the judgement or award rendered in favor of his client.
-the client who receives the proceeds of the judgment or the person in whose favor the client
who receives the proceeds of the judgement or the person in whose favor the client transfers
them hold such proceeds in trust for the lawyer who is, to the extent of his lien, regarded as an
equitable assignee thereof.
- the lien may therefore be enforced by execution against any person who holds the proceed of
the judgement except as against a purchaser in good faith, and the judgement debtor who, in
this regard of the charging lien, satisfies the judgement debt without reserving so much there of
as may be sufficient to pay the attorney’s fees and advances may be held liable for the full value
of lien, which may be enforced by execution.
- Once charging lien is properly created it gives lawyer the standing in the action to protest its
discontinuance by the client unless suitable measure for the protection of his right to
professional fees is provided.
P. Extinguishment of Charging Lien
-a charging lien which has been recorded before the case is finally decided is extinguished
when the client loses the action as the lien may only be forced against a judgement awarded
in favor of the client the proceeds thereof or executions thereon.
-a client cannot defeat an attorney’s right to his charging lien by an adverse action on the
part of his client, as by terminating the lawyer’s services, dismissing the case, waiving the
cause in favor of the opposite party, compromising the action or assigning the subject matter
thereof unless, by the lawyer’s act or omissions, he is deemed to have waived the lien. Rule
does not also apply where the termination or dismissal of the case is upon the instance of
the adverse party.
Q. Assignment of Charging Lien

General rule is that an attorney’s charging lien may be assigned or transferred without
preference thereof being extinguished except;

-When the assignment carries with it a breach of the attorney’s duty to preserved his
client confidence inviolate.
- where a lawyer may not assign contract for professional services to be rendered and
substitute another lawyer in his place without the client’s consent, he may assign a debt
substantially due for services rendered
-where a firm lawyers is to receive a certain compensation for their services , provided
they accomplish certain results, the surviving partners may, after the services and the
money due or to become due thereunder.

R. Satisfaction of Judgement

-The satisfaction of judgement in favor of the clients does not by itself extinguish the
attorney’s charging lien.
-The satisfaction of judgement may have extinguished the lien only when there has been
a waiver of the right thereto either by the attorney’s active conduct or by his passive
omission.

S. Enforcement

- Charging lien may be enforced, upon proper motion, by execution.

- It may be enforced against the client who, for receiving the proceeds of the judgment
without paying his lawyer for his services hold so much thereof in trust for the lawyer
as may be necessary to satisfy the recorded lien.
- It may also be enforced against the judgement debtor who, for disregarding the
charging lien properly served on him, becomes liable to the extent of the lawyer’s
claim.
 RULE 138
Attorneys and Admission to Bar

Section 24. Compensation of attorneys; agreement as to fees.

— An attorney shall be entitled to have and recover from his client no more than a
reasonable compensation for his services, with a view to the importance of the subject
matter of the controversy, the extent of the services rendered, and the professional
standing of the attorney.
-No court shall be bound by the opinion of attorneys as expert witnesses as to the
proper compensation, but may disregard such testimony and base its conclusion on its
own professional knowledge. A written contract for services shall control the amount to
be paid therefor unless found by the court to be unconscionable or unreasonable.
Unconscionable contract –
-unfair or oppressive to one party in a way that suggests abuses during its formation, a
court may find it unconscionable and refuse to enforce it. A contract is most likely to be found
unconscionable if both unfair bargaining and unfair substantive terms are shown.
-The adjective is frequently used in the context of contract law for contracts that
have grossly oppressive and unfair terms. When a court finds a contract unconscionable, it is
unenforceable.

-The ultimate basis of determining fees is the Quantum of Merit “as much as he
deserved”

Reasonableness of a claim for attorney’s fees:

(1) the amount and character of the service rendered;

(2) labor, time, and trouble involved;
(3) the nature and importance of the litigation or business in which the services were rendered;
(4) the responsibility imposed;
(5) the amount of money or the value of the property affected by the controversy or involved in
the employment;
(6) the skill and experience called for in the performance of the services;
(7) the professional character and social standing of the attorney;
(8) the results secured; and
(9) whether the fee is absolute or contingent, it being recognized that an attorney may properly
charge a much larger fee when it is contingent than when it is not.
Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the factors which
should guide a lawyer in determining his fees.

When there is agreement as to fees?

 -when a person found a right lawyer to defend him in court. It is necessary to have a
written fee agreement explaining what you want the lawyer to do, what the lawyer has promised
to do for you, and what it is going to cost.

Contingency Fee Agreement

-It is when a lawyer agrees to accept fixed percentage when he win the case.
-it is a common lawyers fee around 30 up to 50 percent of the property involved.
 RAUL SESBREÑO, petitioner,
vs
Court of Appeal,respondent

FACTS:

The Petioner, Sesbreño replaced the old counsel of 52 employees who sued in the
Province of Cebu and Governor Espina for reinstatement to work and backwages. Majority of
the employees agreed to paid 30% of the backwages as attorney’s fees and 20 % for expenses
of litigation. Later on, there was a compromised made between employees and the Province of
Cebu where the said employees waived their right to reinstatement therefore, Cebu released
P2. 3M to the petitioner for the employees as “Partial Satisfaction of Judgement”. Sometime
November and December 1979, 10 employees file manifestation, asserting that they agreed to
pay petitioner 40% fees plus 20% expenses of litigation.
Employees filed a MR asserting that there was inadvertence in placing 60% where it
should be 50% and this was granted. Petioner was not satisfied so he went to the CA but
deemed the award of 20% of the back salaries as the fair, equitable, and reasonable amount for
attorney’s fees.

ISSUE:
Whether or not the CA has the authority to reduce the amount of attorney’s fee of the
petitioner.

RULING:
Yes. attorney 's fees are always subject to judicial control . A lawyer is primarily an officer
of the court charged with the duty of assisting the court in administering impartial justice
between the parties. When he takes his oath, he submits himself to the authority of the court
and subjects his professional fees to judicial control. A stipulation on a lawyer’s compensation in
a written contract for professional services ordinarily controls the amount of fees that the
contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable
or unconscionable. Though generally, a much higher compensation is allowed in a contingent
fee agreement in consideration of the risk that the lawyer may get nothing if the suit fails. But
contingent fee contracts are under the supervision of the court in order that clients may be
protected from unjust charges. Its validity rests largely on the reasonableness of the stated fees
under the circumstances of the case. An attorney’s fee is unconscionable when it is so
disproportionate compared to the value of the services rendered. Nevertheless, the existence of
an unreasonable fee (no matter the degree) does not bar recovery. It is only that the courts will
fix a reasonable amount. “Quantum Meruit” which means “as much as he deserves” is often the
court’s basis for determining the amount. The 20% award is justified.
 Research and Services Realty, Inc., Petitioner
Vs.
Court of Appeals, Respondents

FACTS:
The petitioner agreed to Joint Venture Agreement with the Carreon and others.
Carreons and a certain Sarile file an action against the petitioner for revocation of the
Joint Venture Agreement therein, that the petitioner may order to pay 15% per annum
for his outstanding obligation and attorney’s fees, exemplary damages, expenses of
litigation and cost of suit in PNB. However, the petitioner sought the denial of the writ of
preliminary injunction, the dismissal of the complaint and payment in its favor which was
prepared and signed by Atty. Apolonio G Reyes.
Later on the petitioner engaged the services of private respondent Atty Manuel
Fonacier, Jr and entered his appearance in Civil Case No. 612. While the case is
pending the petioner without knowing of his private respondent, entered into a MOA
with Filstream, International, Inc., then, On March 1993 he decided to terminate the
legal service of private respondent at the time the petitioner had already received
7million from Filstream but upon knowing of the existence of MOA, the private
respondent filed in Civil Case No. 612 an Urgent Motion to Direct Payment of Attorney’s
Fees and / or Register Attorney’s Charging Lien, that the petitioner be ordered to pay
him the sum of P700,000 as his contingent fee in the case. The Trial Court issued an
order directing petitioner to pay his private respondent in amount of P600, 000 base on
his Quantum of Meruit. The petitioner appealed on CA but affirmed the decision from a
lower court.

ISSUE:
Whether or not the Private Respondent Lawyer is entitled to an Attorney’s fee for
a case of the Petitioner that the former has no direct participation.

RULING:
No. The SC cannot sustain the private respondent’s theory that he could have his
attorney’s fee on contingent basis because the Civil Case No. 612 still unresolved and
at the same time it is non-collection cases he handled for the petitioner, he was paid on
contingent basis at the rate of 10% of what was awarded to the petitioner. The three
reasons of the SC are first, in the private respondent own Urgent Motion to Direct
Payment of Attorney’s Fees and/ or Register Attorney’s Charging Lien, he based the
contingent fee not only in Civil Case No. 612 but in a “multitude of peripheral cases” and
the such contingent fee would become due and collectible only if and when the
petitioner obtains judgment in his favor. Second is the amount of P28 million, which
Filstream agreed to pay the petitioner, was not a judgement or award in favor of the
petitioner in his Civil Case. Third is the Private Respondent can only be entitled to
attorney’s Fee on Quantum of Meruit basis as of the expiration of his retainer contract
on March [Link] Court also considered the reasonableness of a claim of Attorney’s
Fees under the Rule 20 of CPR.

Susanita E. Mendoza-Parker, petitioner,

vs.
Court of Appeals

FACTS:

Tan Ng and Teresita S. Riosa, private respondent filed an action for collection of
a sum of money with foreclosure of real estate mortgage against Demetrio G. Alcaras
and Juliet Alcaras and represented by Atty. Efren Barangan that later on while the case
was still at pretrial stage he withdrew his appearance and petitioner took over as
substitute counsel she filed a motion for summary judgment and it was granted and
judgement rendered was in favor of private respondent and awarded the amount of
P10,000 as attorney’s fees. Thereafter, defendants filed a petition for relief from
judgment while the case was still pending, petitioner filed a motion to withdraw her
appearance with a prayer for the payment of her attorney’s fee. She demanded 15% of
total monetary award (P73,199.75) which was granted by the court but private
respondents refused to pay so but instead offering to pay her P20,000 only for
attorney’s fee and P300 as appearance fee. Therefore, the trial court ordered approved
petitioner’s motion, then private respondent filed a MR but denied by the court.
Petitioner filed a motion to cite private respondents in contempt of court for their failure
to obey the Order from the Trial Court.
Private Respondents questioned the two orders of the Trial Court before the CA
and therefore, the petitioners MR was denied.

ISSUE:
Whether or not the CA can interfere with the orders of the trial court, fixing the
attorney's fees awarded to a lawyer for legal services rendered to the client.

RULING:
Yes. CA, in the exercise of its jurisdiction to review the decision of lower courts
fixing the attorney’s fees, can and did determine whether the attorney’s fees fixed by the
said courts are reasonable under the circumstances. After taking into considerations the
various factors to guide the courts in fixing the attorney’s fees, an appellate court can
reduce the attorney’s fees stipulated by the parties in a contract for professional
services or awarded by a lower court, to levels which it deems reasonable. In the
absence of an agreement as to the amount of the attorney’s fees, the court may
determine the reasonable compensation for his professional services. Even there is an
agreement between two parties for the amount of fees, the court have the power to
disregard the contract if it is unreasonable this is because the lawyer being an officer of
the court upon their oath they submitted themselves to the authority of the court and
their fees are subject for juridical control.
In this case the petitioner took over the case after the termination of the pre-trial
and the pleadings she filed consisted only of a motion for summary judgment and an
opposition to the MR. SC ruled that there was no full-blown trial held, for the defendants
in said civil case admitted their indebtedness there was no need to exert any unusual
effort or special skill in its preparation. Under the circumstances, SC find the amount
granted by the trial court excessive and the award granted by the Court of Appeals
reasonable.