Manila, Philippines – The Supreme Court (SC) has settled a collection suit that spanned 15 years and resulted in the sale of a bank’s assets worth P181 million to satisfy the claimed P28.5-million attorney’s fees, the garnishment and auction of the real property of bank officers and directors who were not liable in the case, and the filing of an administrative complaint against two SC justices.
In a decision written by Justice Maria Lourdes P.A. Sereno, the SC nullified the P28.5-million attorney’s fees and reimbursement of expenses awarded by the Bago City Regional Trial Court (RTC) on May 28, 1999 to lawyer Magdaleno M. Peña as it ruled that the lawyer is entitled only to P3,000 lawyer’s fee, as found by the Court of Appeals (CA), and P1,500 reimbursement for expenses from the then Urban Bank Inc., now Export and Industry Bank.
Justices Arturo D. Brion, Martin S. Villarama Jr., Jose C. Mendoza, and Estela M. Perlas-Bernabe concurred in the decision handed down by the SC’s second division.
The SC ruled that Urban Bank may claim the P4,500 fee and reimbursement of expenses from the P25-million deposit in escrow made by the bank in favor of Isabela Sugar Company Inc. (ISCI) which sold to the bank in 1994 its 8,629-square-meter property in Pasay City for P240 million. The sale sparked the 15-year litigation on the issue of attorney’s fees and reimbursement of expenses.
It pointed out that “the evidence does not support Pena’s claim that Urban Bank agreed to “attorney’s fees and compensation” of 10 percent of the market value of the property.”
It also nullified and ordered vacated the writ of execution pending appeal issued by the Bago City RTC on October 29, 1999 in favor of Pena who utilized the writ to levy, garnish, and sell Urban Bank’s assets and those of the bank’s officers and directors worth P181 million for his P28.5-million fees and reimbursement awarded by the trial court. (Rey G. Panaligan)
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