Lichauco v. Court of Appeals
REITERATIONFacts
The Antecedents: This case originated from a derivative suit filed by Alejandro A. Lichauco, a stockholder of Republic Resources Development Corporation (REDECO), against the company's directors and controlling stockholders. Lichauco sought to annul stock options and perpetual oil royalties that the directors had voted for themselves at the corporation's expense. REDECO was named a nominal defendant as it was under the control of the main defendants. A compromise agreement was eventually reached, which included the cancellation of overriding royalty rights and a stipulation for REDECO to pay attorney's fees to Lichauco, to be fixed by the court. However, a dispute arose regarding the nature and amount of these attorney's fees, with Lichauco claiming compensation for personal services and REDECO asserting he was only entitled to reimbursement for legal expenses. Procedural History: Following the compromise agreement, the trial court approved it but reserved the determination of attorney's fees for a later hearing. Lichauco later withdrew his claim for attorney's fees, stating a settlement had been reached, and REDECO confirmed a payment of P27,500.00 to Lichauco for attorney's fees. Subsequently, REDECO stockholders Federico V. Cerezo and Cipriano Santos filed motions to intervene, challenging the payment of attorney's fees. The trial court granted their intervention and later ordered Lichauco to show cause why the P27,500.00 should not be deposited with the court. Lichauco opposed this, arguing no cause of action was stated against him and that the settlement was legitimate. The trial court denied the motion to deposit the fees but did not act on Lichauco's withdrawal of his claim. After further pleadings and a trial that commenced, Lichauco moved to dismiss the case, which was denied. He then filed a petition for certiorari with the Court of Appeals, challenging the intervention of Cerezo and Santos. The Court of Appeals denied his petition, leading to the current appeal. The Petition: Alejandro A. Lichauco filed this petition for certiorari with the Supreme Court, seeking review of the Court of Appeals' decision which denied his petition for certiorari. Lichauco argues that the trial court erred in allowing the intervention of Federico V. Cerezo and Cipriano Santos. He contends that their intervention was untimely, filed after the deadline set for intervention and after the trial court had already rendered its decision on the main derivative suit by approving the compromise agreement. Furthermore, Lichauco asserts that the complaint-in-intervention raises issues concerning attorney's fees that are distinct from and not germane to the original derivative suit. The core of his petition is that the intervention was improperly permitted, thereby exceeding the trial court's jurisdiction.
Issue(s)
Whether the intervention of Federico V. Cerezo and Cipriano Santos was timely and properly allowed by the trial court. Whether the issue of attorney's fees was distinct from and not germane to the issues in the main derivative suit.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, denying the petition for certiorari for lack of merit. The intervention was deemed timely and properly allowed.
Ratio Decidendi
On the timeliness and propriety of the intervention: The Court reiterated that intervention may be permitted by the court, in its discretion, anytime before the rendition of final judgment. The reservation by the trial court of the determination of attorney's fees after approving the compromise agreement on the main causes of action meant that the case was still pending trial on this specific issue. The cause of action for intervention by Cerezo and Santos accrued only when petitioner Lichauco obtained the amount of P27,500.00 as attorney's fees from REDECO's funds, making their intervention timely. The Court noted that Lichauco himself participated in the trial of the intervention, thereby waiving any objection to its lateness. The Court found no indication of grave abuse of discretion on the part of the trial court or the appellate court in allowing the intervention. On the distinctness of the attorney's fees issue: The Court, citing Otto Gmur, Inc. vs. Eulogio P. Revilla, et al., held that an attorney's fee cannot be determined until after the main litigation has been decided and the subject of the recovery is at the disposition of the court. The issue over attorney's fees only arises when something has been recovered from which the fee is to be paid. Therefore, the issue of attorney's fees was intrinsically linked to the main derivative suit, as it concerned the compensation for services rendered in recovering benefits for the corporation. The reservation of this issue by the trial court clearly indicated that the main litigation was not fully concluded until this matter was resolved.
Main Doctrine
Intervention may be allowed by the court in its discretion anytime before the rendition of final judgment, provided the intervenor has a legal interest in the matter in litigation or is so situated as to be adversely affected by a disposition of property. The timeliness of intervention is determined by when the cause of action for intervention accrues, which, in cases involving attorney's fees, is when the amount is recovered or becomes recoverable.