Quasha v. LCN Construction DIGEST

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03 Quaha v.

LCN Construction
G.R. No. 174873 (25 August 2008)
Chico-Nazario, J. / Tita K

Subject Matter: Rule 85; Improper Charges


Summary: Atty. Quasha and Atty. Syquia were appointed as administrators of the estate of Triviere. Atty. Quasha represented the
deceased’s children, while Atty. Syquia represented the widow. Atty. Quasha died and was replaced by Atty. Zapata of Quasha Law
Office. Atty Syquia and Atty. Zapata filed a Motion for Payment alleging that they have not received any amount since 1992 (more
than ten years already) for attorney's fees and litigation expenses. They prayed that the payment be deducted from the estate. LCN,
the only remaining claimant against the estate, opposed the said motion arguing that no distribution should be allowed until LCN’s
claim, which was still pending at the court, is satisfied. RTC granted the motion and awarded P100k each to Quasha Law Office and
Atty. Syquia. CA reversed the RTC order, ruling that the lawyers, as executor or administrator is a lawyer, shall not charge against the
estate any professional fees for legal services rendered. Quasha Law Office file a petition for review before the SC. The SC ruled that
Quasha Law Office did not substitute Atty. Quasha as co-administrator because no letters of adminstration was issued in its favor as
required by Sec. 2, Rule 82. Hence, Quasha Law Office merely served as counsel of the Tiviere children and are entitle to Atty. Fees
for the legal services rendered. However, such payment may be collected from the shares of the Triviere children, upon final
distribution of the estate.
Doctrines:
The attorney’s fees owed to a counsel not serving as co-administrator cannot be covered by the prohibition in the third paragraph of
Sec. 7, Rule 85 of the ROC against an attorney, to charge against the estate professional fees for legal services rendered.

Parties:
QUASHA ANCHETA PEÑA AND NOLASCO LAW OFFICE FOR ITS OWN BEHALF, AND
Petitioner
REPRESENTING THE HEIRS OF RAYMOND TRIVIERE
Respondent LCN CONSTRUCTION CORP.
Facts:
14 December 1987 Raymond Triviere passed away.
April 1988 Atty. Syquia and Atty. Quasha of Quasha Law Office, representing the widow and children of the late
Raymond Triviere, respectively, were appointed administrators of the estate of the deceased.
As administrators, Atty. Syquia and Atty. Quasha incurred expenses for the payment of real estate taxes,
security services, preservation and administration of the estate, and litigation expenses.
1996 Atty. Quasha died.
Atty. Zapata, also from Quasha Law Office, took over as the counsel of the Triviere children, and continued
to help Atty. Syquia in the settlement of the estate.
6 September 2002 Atty. Syquia and Atty. Zapata filed a Motion for Payment1.
They prayed that P1Million be taken from the Estate funds2, to be divided as follows:
a) P450,000.00 as share of the children of the deceased who are represented by the Quasha Ancheta Peña &
Nolasco Law Offices;
b) P200,000.00 as attorney's fees and litigation expenses for the Quasha Ancheta Peña & Nolasco Law
Offices;
c) P150,000.00 as share for the widow of the deceased, Amy Consuelo Triviere; and
d) P200,000.00 for the administrator Syquia, who is also the counsel of the widow; and for litigation costs
and expenses3.
They reasoned:
 That for all their work4 since 1988 up to 1992, they were only given the amount of P20,000.00 each
on November 28, 1988; and another P50,00.00 each on October 1991; and the amount

1This is already a second motion for payment. The first motion was filed in 1995 by Atty. Syquia and Atty. Quasha. RTC denied the first motion due
to their failure to submit an accounting of the assets and liabilities of the estate under administration.
2 Currently valued at P4,738,558.63.
3 Transcripts and other out of pocket expenses.
4 They were able to settle all claims except the remaining baseless claim of LCN Construction Corp.; they were able to dismiss two foreign claims
increasing the monetary value of the estate from over P1Million to the present P4,738,558.63.
of P100,000.00 each on July 1992; or a total of P170,000.00 to cover their administration fees,
counsel fees and expenses (They have not received any amount since 1992).
 That Administrator Syquia, who is a lawyer, is entitled to additional Administrator's fees as provided
in Section 7, Rule 85 ROC because as the estate was large, the settlement was attended with great
difficulty and required a high degree of capacity.
 That after all these years, their clients have not been given a part of their share in the estate.

2 October 2002 LCN, the only remaining claimant against the Intestate Estate of the deceased, opposed the said Motion.
LCN averred that:
 its claims are still outstanding and chargeable against the estate of the late Raymond Triviere; thus,
no distribution should be allowed until they have been paid; especially considering that LCN’s claim
amounted to P6,016,570.65 as against the remaining assets of the estate totaling P4,738,558.63,
rendering the latter insolvent.
RTC granted the Motion for Payment.
RTC ruled that Atty. Syquia and Quasha Law Office are entitled to the payment for the services they have rendered and
accomplished for the estate and the heirs of the deceased as they have over a decade now spent so much time, labor and
skill to accomplish the task assigned to them; and the last time the administrators obtained their fees was in 1992. Hence,
RTC awarded a reduced amount of P100k each to Atty. Syquia and Quasha Law Office, as attorney's fees and litigation
expenses.

RTC also awarded P450k as share of the children of the deceased who are represented by the Quasha, Ancheta, Pena,
Nolasco Law Offices, and P150k as share for the widow of the deceased, Amy Consuelo Triviere.5

LCN’s MR was denied.

CA ruled in favor of LCN.

CA held that Atty. Syquia and the Quasha Law Office could not claim their administrator's fees and litigation expenses
from the funds of the estate. Where the executor or administrator is a lawyer, he shall not charge against the estate any
professional fees for legal services rendered by him.6 The attorney's fees due Atty. Syquia and the Quasha Law Offices
should be borne by their clients, the widow and children of the deceased, respectively.

CA also revoked the P450k share and P150k share awarded by the RTC to the children and widow, because Sec. 1, Rule 91
ROC proscribes the distribution of the residue of the estate until all its obligations have been paid.

Petitioner (only Quasha Law Office) filed a MR, arguing that Sec. 7 (3) of Rule 85 is not applicable to the instant case since it is
“merely seeking payment for legal services rendered to the estate and for litigation expenses”.

CA denied the MR. It held that petitioner’s allegation in their MR deserves scant consideration because it is in conflict with earlier
claims before the CA which was actually payment for the administration of the Estate and NOT professional fees for legal services
rendered (in other words, petitioner changed its theory).

Issue/s:

1. WON attorney's fees shall be awarded in favor of the co-administrators. (YES, but not as co-administrator.)

Ratio:

Yes – Petitioner Quasha Law Office is entitled to attorney's fees and litigation expenses of P100k, however, the said
amount may be collected from the shares of the Triviere children, upon final distribution of the estate.

5Hindirelevant sa topic ngayon, relevant sa Rule 90.


6Section 7, Rule 85 of the Revised Rules of Court. xxx Where the executor or administrator is a lawyer, he shall not charge against the estate any
professional fees for legal services rendered by him.xxx
**To resolve the issue, SC had to determine first WON Quasha Law Office substituted Atty. Quasha as administrator, representing the children of
the deceased.

 Sec. 2, Rule 82 of the Rules of Court provides:

Section 2. xxx When an executor or administrator dies, resigns, or is removed the remaining executor or administrator
may administer the trust alone, unless the court grants letters to someone to act with him. If there is no remaining
executor or administrator, administration may be granted to any suitable person.

o No evidence that Quasha Law Office or any of its lawyers substituted Atty. Quasha as co-administrator of the
estate.
o No letters of administration were issued to petitioner Quasha Law Office or any of its lawyers at any time after
the death of Atty. Quasha in 1996.
o Therefore, petitioner rendered legal services for the settlement of the estate of the deceased NOT as co-
administrator thereof.
o The attorney's fees, therefore, cannot be covered by the prohibition in Sec. 7, Rule 85 against an attorney, to
charge against the estate professional fees for legal services rendered by them.

 However, while petitioner Quasha Law Office, serving as counsel of the Triviere children from the time of death of Atty.
Quasha in 1996, is entitled to attorney's fees and litigation expenses of P100k, the same may be collected from the shares
of the Triviere children, upon final distribution of the estate, in consideration of the fact that the Quasha Law Office,
indeed, served as counsel (not as co-administrator), representing and performing legal services for the Triviere children in
the settlement of the estate of their deceased father.

Wherefore, premises considered, the Petition for Review on Certiorari is hereby PARTLY GRANTED. The Decision dated 11 May 2006
and Resolution dated 22 September 2006 of the Court of Appeals in CA-G.R. SP No. 81296 are AFFIRMED, with
the following MODIFICATIONS:

1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED THOUSAND PESOS (P100,000.00), for legal services
rendered for the Triviere children in the settlement of the estate of their deceased father, the same to be paid by the Triviere children in
the manner herein discussed; and

2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of their corresponding administrators' fees, to be
determined by the RTC handling Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to be chargeable to the
estate of Raymond Trieviere.

Others/Notes:

ISSUE #2: WON the award in favor of the heirs of the deceased is already a distribution of the residue of the estate. (NO)

The awards in favor of petitioner children and widow was not yet a distribution of the residue of the estate since there was still a
pending claim against the estate. However, the said award constitutes a partial and advance distribution of the estate.

The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows the distribution of the estate prior to the payment
of the obligations mentioned therein, provided that "the distributees, or any of them, gives a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs."

It is within the discretion of the RTC whether or not to permit the advance distribution of the estate, its exercise of such discretion
should be qualified by the following:

[1] only part of the estate that is not affected by any pending controversy or appeal may be the subject of advance distribution
(Section 2, Rule 109); and

[2] the distributees must post a bond, fixed by the court, conditioned for the payment of outstanding obligations of the estate
(second paragraph of Section 1, Rule 90).
There is no showing that the RTC, in awarding to the petitioner children and widow their shares in the estate prior to the
settlement of all its obligations, complied with these two requirements or, at the very least, took the same into
consideration.

Taking into account that the claim of LCN against the estate of the late Raymond Triviere allegedly amounted
to P6,016,570.65, already in excess of the P4,738,558.63 reported total value of the estate, the RTC should have

Re: Change in Theory

In attempting to exempt itself from the coverage of said rule, Quasha Law Office presented conflicting arguments to justify its claim
for attorney's fees against the estate. Quasha Law Office initially asserted itself as co-administrator of the estate before the courts.
Later upon filing a Motion for Reconsideration with the Court of Appeals, Petitioner Quasha Law denied it was substituted in the
place of Atty. Quasha as administrator of the estate.

The Court notes with disfavor the sudden change in the theory by petitioner Quasha Law Office.

As a general rule, a party cannot change his theory of the case or his cause of action on appeal. When a party adopts a certain theory
in the court below, he will not be permitted to change his theory on appeal.

As an exception to the rule, in the interest of justice and within the sound discretion of the appellate court, a party may change his
legal theory on appeal, only when the factual bases thereof would not require presentation of any further evidence by the adverse
party in order to enable it to properly meet the issue raised in the new theory.

SC finds it necessary to exercise leniency on the rule against changing of theory on appeal, consistent with the rules of fair
play and in the interest of justice. Petitioner Quasha Law Office presented conflicting arguments with respect to whether or
not it was co-administrator of the estate. Nothing in the records, however, reveals that any one of the lawyers of Quasha
Law Office was indeed a substitute administrator for Atty. Quasha upon his death.

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