Heirs of Manuel Uy Ek Liong vs. Castillo Gr 176425, June 5, 2013

HEIRS OF MANUEL UY EK LIONG VS. CASTILLO GR 176425, JUNE 5, 2013 FACTS: Respondents in this case were petitioners in a civil case to annul the title of PMPCI over over respo responde ndents nts’’ land. land. Respond espondent ents s enter entered ed into into an AGREEMENT   whereb in e!chan"e for the le"al services of Att. #epeda and the $nancial assistance of  MA%&'( &) '* (I+%,- in the event of a favorable decision in the civil case- Att #epeda and Manuel would be entitled to /0 of the realties and1or 2onetar bene$ts which 2a be ad3udicated in favor of the respondents. Respond espondent entss- on the sa2e da enter entered ed into into a Ka!"#!a"- a"reein" to sell the re2ainin re2ainin" " 4/0 share in the land in favor favor of Manuel for the su2 of 56/7. 56/7. Manuel Manuel would pa a 5* down pa2ent upon e!ecution of the *asunduan. The a"reed that an part violatin" the Kasunduan would pa the a""rieved part a penalt $!ed in the su2 of P8/*- to"ether with the attorne’s fees and liti"ation e!penses incurred incurred should a case be subse9uentl $led in court.  The respondents won in the CII( CAS'. The land was divided in accordance with the A$%&&'&"(  but the respondent respondents s refused refused to co2pl co2pl with the KASUN)UAN, despite Manuel’s o;er to pa the re2ainin" 5a2a"es a"ainst respondents. ISS&': w1n the *asunduan should be "iven e;ect ?'(>: The *asunduan is valid. The prohibition applies onl durin" the pendenc of  the suit and "enera "enerall ll does not cover cover contra contract cts s for contin contin"en "entt fees fees where where the transfer ta7es ta7es e;ect onl after the $nalit of a favorable 3ud"2ent. 3ud"2ent. The A"ree2ent A"ree2ent and the Kasunduan are not independent contracts- with parties- ob3ects and causes di;erent fro2 fro2 that of the other. other. +bli"ations arisin" fro2 fro2 contracts have the force force of law between the contractin" parties. @hen the ter2s of the contract are clear and leave no doubt as to the intention of the parties- the literal 2eanin" of its stipulation should "overn.

 The Kasunduan contained a penal clause which provides that a part who violates an of its provisions shall be liable to pa the a""rieved part a penalt $!ed at P8/*- to"ether with the attorne’s fees and liti"ation e!penses incurred b the latter latter should should 3udicial 3udicial resoluti resolution on of the 2atter 2atter beco2es beco2es necessar necessar..  The obli"or would then be bound to pa the stipulated inde2nit without the necessit of proof  of the e!istence and the 2easure of da2a"es caused b the breach. T*& +&"a(a!& $&"&%a- !/((!(& (*& "#&'"(- % #a'a$& a"# (*& +a-'&"(

 "(&%&( " a&  ""'+a"&. T*& %!&  &((&# (*a( a +&"a a!&  "( '(&# ( a(!a a"# '+&"a(%- #a'a$&.  The RTC’s award of attorne’s fees in the su2 of P8/-///.// is- however- proper. Aside fro2 the fact that the penal clause included a liabilit for said award in the event of liti"ation over a breach of the Kasunduan- petitioners were able to prove that the incurred said su2 in en"a"in" the services of their lawer to pursue their ri"hts and protect their interests.