Pascual vs. Court of Appeals

An intestate court retains jurisdiction over a claim for attorney's fees incurred in the administration of an estate even after the death of the appointed administratrix, as the estate is a juridical entity distinct from the administratrix, who is merely a representative party; and a party who had ample opportunity to contest a claim but chose to remain silent cannot later invoke lack of due process to annul a final judgment.

Don Andres Pascual died intestate on October 12, 1973, survived by his widow Doña Adela Soldevilla Pascual and numerous collateral heirs. Doña Adela was appointed special administratrix of the estate and, on February 24, 1974, engaged Atty. Jesus I. Santos as counsel for a fee equivalent to fifteen percent of the gross estate. The estate settlement proceedings were pending before the then Court of First Instance of Pasig, Rizal, later reassigned to the Regional Trial Court of Pasig, Branch 162. Doña Adela died on August 18, 1987, leaving a will that named petitioner Olivia S. Pascual — an acknowledged natural child of Don Andres's brother Eligio — as sole universal heir. Petitioner was subsequently appointed special administratrix of Doña Adela's three-fourths share in the estate.

Don Andres Pascual died intestate on October 12, 1973, survived by his widow Doña Adela Soldevilla Pascual and numerous collateral heirs, including the children of his full blood and half blood brothers and the acknowledged natural children of another brother, Eligio Pascual — among them petitioner Olivia S. Pascual. On December 11, 1973, Doña Adela filed a petition for letters of administration over her husband's estate with the then Court of First Instance of Pasig, Rizal, and was appointed special administratrix. On February 24, 1974, she engaged Atty. Jesus I. Santos as counsel for the estate settlement proceedings, agreeing to a fee equivalent to fifteen percent of the gross estate.

The proceedings were later reassigned to the RTC of Pasig, Branch 162, presided by Judge Manuel Padolina. On November 4, 1985, the heirs moved for approval of a Compromise Agreement stipulating that three-fourths of the estate would go to Doña Adela and one-fourth to the other heirs; the intestate court approved the agreement on December 10, 1985. On August 18, 1987, while the settlement was still pending, Doña Adela died, leaving a will naming petitioner as sole universal heir. Petitioner filed a petition for probate of the will before the RTC of Malabon, Branch 72. On September 30, 1987, the RTC of Pasig denied a motion to reiterate hereditary rights filed by petitioner and her brother, reasoning that as illegitimate children of the decedent's brother, they were barred under Article 992 of the Civil Code from acquiring hereditary rights to Doña Adela's intestate estate. On December 17, 1987, the court ordered that private respondent's attorney's lien on Doña Adela's hereditary share be entered into the records.

Six years after Doña Adela's death, on January 19, 1994, Judge Padolina rendered a decision disposing of the manner of partition: one-fourth of the properties to the heirs of Don Andres and three-fourths to the estate of Doña Adela, both in accordance with the Compromise Agreement. The decision also awarded attorney's fees to Atty. Santos equivalent to fifteen percent of the three-fourths share of Doña Adela. After the decision became final and executory, private respondent filed a motion for issuance of a writ of execution on March 25, 1994. Despite opposition from petitioner, the motion was granted in the April 19, 1994 Order, directing issuance of a writ of execution in the partial amount of ₱2,000,000 against Doña Adela's three-fourths share. The writ issued on April 20, 1994, and the sheriff garnished deposits and shares of stock sufficient to cover the amount. Petitioner's motion for reconsideration and quashal was denied on June 29, 1994.

Petitioner then filed a petition for annulment of judgment with the Court of Appeals, seeking to annul the award of attorney's fees in the January 19, 1994 decision, the April 19, 1994 order granting the writ of execution, the writ itself, and the June 29, 1994 order denying reconsideration. The appellate court dismissed the petition, ruling that the intestate court had jurisdiction to make the award and that petitioner had been accorded due process. It noted that private respondent had filed his claim as early as the first quarter of 1974, that the trial court had recorded the attorney's lien on December 17, 1987, and that despite knowledge of the claim, petitioner did not oppose it or move for reconsideration or appeal after the award was made.

On October 21, 1997, after the case had been submitted for resolution, Crisanto S. Cornejo and other heirs of Doña Adela filed an Omnibus Motion alleging that Judge Padolina had conspired with petitioner and private respondent to place the entire estate under their control, that the attorney's fees were awarded without hearing or notice, and that private respondent had filed collection cases in other courts in violation of the rule against forum shopping. They sought the judge's inhibition, consolidation of related estate proceedings, investigation of the authenticity of Doña Adela's will, setting aside of prior decisions, and reopening of the cases.

• Loss of Jurisdiction Upon Death of Client: Petitioner argued that the January 19, 1994 RTC decision, insofar as it awarded attorney's fees, was void from the beginning because the intestate court had lost jurisdiction over the person of Doña Adela by reason of her death.
• Denial of Due Process: Petitioner maintained that the questioned portion of the decision was void because it deprived the heirs of Doña Adela of due process, preventing them from contesting the claim and submitting evidence of partial payments previously made to private respondent.
• Insufficient Factual and Legal Bases: Petitioner alleged that the award was void ab initio because the body of the decision did not state the facts and the law upon which the award was based, in violation of Article VIII, Section 14 of the Constitution.
• Unreasonableness of Attorney's Fees: Petitioner insisted that she had not lost her right to question the amount of attorney's fees, arguing that it was unreasonable and countenanced exploitation for speculative profit on account of the estate's enormous value.
• Wrongful Issuance of Writ of Execution: Petitioner asserted that the writ of execution was wrongfully issued.
• Lack of Jurisdiction Due to Non-Payment of Docket Fees: Petitioner averred that the intestate court had no jurisdiction to award attorney's fees before private respondent paid the prescribed docket fees, invoking Lacson vs. Reyes.

• Jurisdiction of Intestate Court: Respondent argued that the intestate court retained jurisdiction over the estate proceedings despite the administratrix's death, as the claim was filed against the estate of Don Andres, not against Doña Adela personally.
• Due Process Accorded: Respondent countered that petitioner had been accorded due process, noting that she had knowledge of the claim, made partial payments to private respondent, and chose not to oppose the claim, move for reconsideration, or appeal the decision.

• Jurisdiction: Whether the trial court had jurisdiction to make the questioned award of attorney's fees despite the death of the administratrix, Doña Adela.
• Due Process: Whether the heirs of Doña Adela, represented by petitioner, were deprived of due process.
• Factual and Legal Bases: Whether there were factual and legal bases for the award of attorney's fees in the body of the trial court's decision.
• Intervention: Whether the Omnibus Motion filed by Crisanto S. Cornejo and other heirs should be allowed.

• Jurisdiction: Yes. The intestate court retained jurisdiction over the estate proceedings despite the administratrix's death, the estate being a juridical entity distinct from the administratrix who was merely a representative party.
• Due Process: No. The heirs were not deprived of due process, petitioner having had ample opportunity to contest the claim but chose to remain silent, make partial payments, and failed to move for reconsideration or appeal.
• Factual and Legal Bases: Yes. The body of the trial court's decision stated the factual and legal bases for the award, recounting the services rendered by private respondent in representing the estate and securing approval of the Compromise Agreement.
• Intervention: No. The Omnibus Motion was a disguised motion for intervention filed beyond the prescribed period and lacking in substance.

• Jurisdiction: The death of Doña Adela did not extinguish the monetary claim of private respondent or divest the intestate court of jurisdiction. The claim was filed against the estate of Don Andres, which is distinct and separate from that of Doña Adela, who merely served as administratrix — a representative party under Rule 3, Section 3 of the Rules of Court. Section 2, Rule 82 requires the appointment of a new administrator upon the death, resignation, or removal of the incumbent, but does not divest the court of jurisdiction. A monetary claim against the person administering an estate, in relation to acts of administration in its ordinary course, may be filed in the court where the estate settlement is pending. The intestate court had a mandate to determine whether the claim was a necessary expense in the care, management, and settlement of the estate. The fact that the attorney's lien was recorded four months after the administratrix's death was of no moment. Petitioner's reliance on Lacson vs. Reyes for the proposition that separate docket fees must be paid before jurisdiction vests was misplaced, as that case involved a motion for attorney's fees in the nature of an action commenced by a lawyer against his client, whereas here the claim was filed against the estate. Moreover, where a judgment awards a claim not specified in the pleadings or whose amount was left for the court's determination, the additional filing fees constitute a lien on the judgment, and private respondent in fact paid the prescribed fees.

• Due Process: The essence of due process is the right to be heard. Where a person is not heard because he or she has chosen not to give his or her side, the right is not violated. From her appointment as special administratrix on September 28, 1989 until the rendition of the January 19, 1994 decision, petitioner never opposed the claim; she even made partial payments to private respondent, constituting tacit acknowledgment of the validity of the contract. After receiving the decision on February 8, 1994, she again chose not to move for reconsideration or appeal. Under Rule 86, Section 11, a claim admitted by the administrator or executor may be allowed by the court without hearing. The trial court found the claim admitted and uncontested. Petitioner's own fault and negligence caused the decision to become final and executory, and she must bear the consequences of the maxim that equity aids the vigilant, not those who slumber on their rights.

• Factual and Legal Bases: The legal and factual bases of the award were stated in the body of the January 19, 1994 decision. In recounting the significant events leading to the culmination of the case, the trial court revealed the importance of the services rendered by private respondent — representing the estate, arguing for approval of the Compromise Agreement, and rendering legal advice on the final distribution of properties. Unlike cases where attorney's fees are awarded in the concept of damages under Article 2208 of the Civil Code, the award here was in the nature of compensation for services rendered under a contract. The legal proceedings and the agreement between attorney and client were sufficient proof of the legality of the award. As to reasonableness, delving into the amount involves going into the merits, which is procedurally impermissible in an annulment proceeding. In any event, there was no evidence that the stipulated amount was illegal, immoral, or contrary to law, morals, good customs, public order, or public policy, and is therefore enforceable as the law between the parties. The award finds support in Law Firm of Raymundo A. Armovit vs. Court of Appeals, which upheld twenty percent of all recoveries as attorney's fees, considering the numerous properties involved and private respondent's thirteen years of labor.

• Intervention: The Omnibus Motion was really a disguised motion for intervention. Under Rule 19, Section 2 of the 1997 Rules of Civil Procedure, intervention must be filed at any time before rendition of judgment by the trial court. The motion was filed only after the parties had submitted their memoranda and years after both the RTC and CA had rendered their decisions. Further, any misconduct allegedly committed by Judge Padolina was not a proper subject of intervention, as he was merely a nominal party. The dismissal of private respondent's collection case for forum shopping did not affect the validity or finality of the January 19, 1994 decision, and the consolidation of cases involving different estates was improper due to the absence of any connection between them.

• Annulment of Final Judgment — The extraordinary action to annul a final judgment is restricted to the grounds of extrinsic fraud and lack of jurisdiction, and cannot be used as a stratagem to reopen an entire controversy and render a farce of a decision that has long become final and executory. The Court applied this doctrine by limiting its review to whether the trial court lacked jurisdiction or whether extrinsic fraud attended the judgment, finding neither.

• Jurisdiction of Probate Court Over Administrative Claims — A monetary claim against the person administering an estate, in relation to acts of administration in its ordinary course, may be filed in the court where the special proceeding for settlement of the estate is pending. The death of the administratrix does not divest the intestate court of jurisdiction because the estate is a juridical entity distinct from the administratrix, who is merely a representative party. The court retains its mandate to determine whether a claim is a necessary expense in the care, management, and settlement of the estate.

• Due Process as the Right to Be Heard — The essence of due process is the right to be heard. Where a person is not heard because he or she has chosen not to give his or her side, the right is not violated. If one who has a right to speak chooses to be silent, one cannot later complain of being unduly silenced. A party who had ample opportunity to contest a claim but failed to do so, and who further failed to move for reconsideration or appeal, cannot later invoke lack of due process to annul a final judgment.

• Admitted Claims Under Rule 86, Section 11 — Any claim admitted entirely by the executor or administrator may be approved by the court without hearing, though the court in its discretion may order known heirs, legatees, or devisees to be notified and heard. The Court applied this rule where the trial court found the attorney's fees claim admitted and uncontested by the special administratrix.

• Standards for Fixing Attorney's Fees — In fixing reasonable attorney's fees, courts consider: (1) the amount and character of the services rendered; (2) labor, time, and trouble involved; (3) the nature and importance of the litigation or business; (4) the responsibility imposed; (5) the amount of money or value of property affected; (6) the skill and experience called for; (7) the professional character and social standing of the attorney; and (8) the results secured, with a recognized rule that an attorney may charge a larger fee when it is contingent. These factors approximate those enumerated in Rule 20.01 of the Code of Professional Responsibility.

• "The extraordinary action to annul a final judgment is restricted to the grounds provided by law, in order to prevent it from being used by a losing party to make a complete farce of a duly promulgated decision that has long become final and executory." — This passage opens the decision and articulates the restrictive policy governing annulment of final judgments, framing the entire analysis that follows.

• "The rule does not have the effect of divesting the instance court of jurisdiction. Its jurisdiction subsists because the proper party in this case is the estate of Don Andres, which is distinct and separate from that of Doña Adela who merely served as the former's administratrix." — This passage states the ratio decidendi on the jurisdiction issue, establishing that an estate is a juridical entity distinct from its administratrix and that the court's jurisdiction subsists despite the administratrix's death.

• "If one who has a right to speak chooses to be silent, one cannot later complain of being unduly silenced." — This passage encapsulates the Court's due process reasoning, frequently cited in subsequent jurisprudence for the principle that voluntary silence does not constitute a denial of the right to be heard.

• Lacson vs. Reyes, 182 SCRA 729 (1990) — Distinguished. The Court distinguished this case, which required payment of a separate docket fee for a motion for attorney's fees as being in the nature of an action commenced by a lawyer against his client, from the present case where the claim was filed against the estate.

• Law Firm of Raymundo A. Armovit vs. Court of Appeals, 202 SCRA 16 (1991) — Followed. The Court relied on this case to support the reasonableness of the stipulated attorney's fees, noting it upheld twenty percent of all recoveries in a foreclosure case.

• Azores vs. Securities and Exchange Commission, 252 SCRA 387 (1996) — Cited for the principle that failure to perfect an appeal renders the decision final and executory, barring appellate review.

• Amigo vs. Court of Appeals, 253 SCRA 382 (1996) — Cited for the principle that annulment of judgment is limited to the grounds provided by law and cannot be used to reopen an entire controversy.

• Quirino vs. Grospe, 169 SCRA 702 (1989) — Cited for the principle that a monetary claim against the person administering an estate, in relation to acts of administration, may be filed in the court where the estate settlement is pending.

• Ramos vs. Bidin, 161 SCRA 561 (1988) — Cited for the principle that a stipulated attorney's fee not shown to be illegal, immoral, or contrary to law, morals, good customs, public order, or public policy is enforceable as the law between the parties, and for the standards in fixing reasonable attorney's fees.

• Section 2, Rule 82, Rules of Court — Governs proceedings upon the death, resignation, or removal of an executor or administrator, requiring the appointment of a new administrator. The Court held that this rule does not divest the intestate court of jurisdiction, as the estate is distinct from the administratrix.

• Section 3, Rule 3, Rules of Court — Provides that a trustee, guardian, executor, or administrator may sue or be sued without joining the party for whose benefit the action is presented. Applied to establish that Doña Adela was merely a representative party and the estate of Don Andres was the proper party.

• Section 11, Rule 86, Rules of Court — Provides that a claim admitted entirely by the executor or administrator may be approved by the court without hearing. Applied to uphold the award where the trial court found the claim admitted and uncontested.

• Section 2, Rule 47, 1997 Rules of Court — Codifies the grounds for annulment of judgment as extrinsic fraud and lack of jurisdiction. Applied to limit the Court's review to these two grounds.

• Section 1, Rule 19, 1997 Rules of Civil Procedure — Governs intervention, allowing a person with legal interest to intervene before rendition of judgment. Applied to deny the Omnibus Motion as untimely, it having been filed after judgment had long become final.

• Article 2208, Civil Code — Governs attorney's fees awarded in the concept of damages. The Court distinguished this provision from the present case, where the award was in the nature of compensation for services rendered under a contract.

• Article VIII, Section 14, 1987 Constitution — Requires that no decision shall be rendered without expressing clearly and distinctly the facts and the law on which it is based. The Court found compliance, as the body of the trial court's decision stated the factual and legal bases for the award.

• Rule 20.01, Code of Professional Responsibility — Enumerates the factors a lawyer shall be guided by in determining fees. The Court noted these factors closely approximate the established standards for fixing reasonable attorney's fees.

Davide, Jr., Melo, Vitug, and Quisumbing, JJ., concurred.