Canon 16 and Canon 17 (Without Other Rules)-- Cases

8/12/2019 Canon 16 and Canon 17 (Without Other Rules)-- Cases

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Compiled by: | TINA SIUAGAN

1LEGAL ETHICS ASSIGNED CASE READINGS

CANON 16

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

A.C. No. 2591 September 8, 2006

LETICIA ADRIMISIN,complainant,vs.

ATTY. ROLANDO S. JAVIER,respondent.

D E C I S I O N

CARPIO, J.:

The Case

On 12 September 1983, Leticia Adrimisin ("complainant") filed a

complaint-affidavit1with the Ministry of Justiceseeking the

disbarment of Atty. Rolando S. Javier ("respondent") for deceit

and misrepresentation.

The Facts

Complainant alleges that on 12 July 1983, she was introduced by

her cousin, Pablo Adrimisin, to respondent. She needed the help

of a lawyer in having her son-in-law, Alfredo Monterde

("Monterde"), who was charged with the crime of qualified theft,

released from the Caloocan City Jail. Complainant claims that

respondent advised her to file a bail bond. Complainant informed

respondent that her only money was P500. Complainant contends

that respondent received the money, issued a receipt2and

promised that Monterde would be released from jail the followingday.

Complainant also alleges that respondent failed to keep his

promise in having Monterde released. Complainant went to

respondent's office several times but it seemed that respondent

was avoiding her. Monterde was later released upon settlement of

the case with his employer. Complainant claims that she

demanded for the return of the P500 but respondent failed to

return this amount.

Respondent did not file any comment or answer. He only

appeared in the investigative hearings conducted by the Office of

the Solicitor General ("OSG"). Respondent, in his testimony,

claims he was not hired by complainant aslegal counsel.

Respondent alleges complainant only asked his help to secure a

bail bond.3Respondent admits he received P500 for the bail bond

and called up Carlos Alberto ("Alberto"), an insurance

agent.4Respondent claims he gave the P500 to Alberto. However,

the amount was not sufficient to pay for the bond.5Respondentdenies that he promised to have Monterde released

immediately.6Respondent claims he advised complainant to get

back her money directly from Alberto.7

Alberto, the insurance agent, was presented during the hearing.

He testified that on 20 July 1983, respondent came to him to
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secure a bail bond for qualified theft.8Alberto showed a copy of

the personal bail bond dated 20 July 1983, issued

by Philippine Phoenix Surety & Insurance, Inc. ("Philippine

Phoenix Surety") with a premium ofP940 and costs of

documentary stamps, notarial fees and clearances at P279 fora total of P1,219.9Alberto claimed he issued a genuine bond but it

was not filed in court because complainant failed to pay the

balance.10He also testified that Pablo Adrimisin asked for the

refund of the P500 but the amount could not be refunded due

to expenses already incurred and forfeiture of the remainder in

favor of Alberto's office.11

The bail bond which was marked as Exhibit "1" contained a

stamped "Limitation of Liability" clause. The clause states"Authorized limit of the bond shall not exceed P20,000 and it is

not valid for theft and robbery cases."12The portion "Not valid for

theft and robbery cases" was deleted with a marking pen but this

cancellation was not signed or initialed. Alberto was asked why

the cancellation was unsigned. Alberto replied that he had no

knowledge on who made the stamp or the cancellation.13When

asked if it is the policy of Philippine Phoenix Surety not to post

personal bail bond with respect to theft and robbery cases,

Alberto answered in the affirmative.14

Alberto also clarified that he is not connected with Philippine

Phoenix Surety but he is an employee of the House of Bonds,

which is the general agent of the former.15

Mr. Alfredo Brigoli ("Brigoli"), General Manager of the House of

Bonds, was also presented as one of respondent's witnesses.

Brigoli explained that he gives Alberto 5 sets of pre-signed bail

bond forms.16However, in theft, robbery and drug cases, Alberto

is required to seek his approval before the bond is issued.

Brigoli testified that it was Alberto's daughter who called him upfor approval to issue a bond for qualified theft.17He informed

Alberto's daughter to bring the original bond and its duplicate

copies to his office in Intramuros for his signature, but the same

was not done.18Due to the lack of his signature, Brigoli claimed

that the bond has not been approved.19Brigoli also testified that

since the bond was not forwarded to his office, the same was not

recorded and the payment was not remitted.

The OSG's Report and Recommendation

The OSG's Investigating Solicitor Antonio G. Castro heard the case

and submitted a Report and Recommendation ("Report"). The

OSG recommended that respondent be suspended from the

practice of law for not less than one year. The Report reads:

The charge of deceit and misrepresentation against respondent

has been sufficiently established. Respondent himself admits that

he received from complainant the sum of P500.00 for the bail

bond of complainant's son-in-law Alfredo Monterde; that he failed

to secure Monterde's release from jail; and that he did not return

the sum of P500.00 to complainant (pp. 9-20, tsn, March 14,

1985).

x x x x
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Respondent's defense that he actually secured a bail bond for

Monterde is a mere afterthought. Firstly, complainant confided to

him that she had no more money except P500.00. He would not,

therefore, secure a bail bond with higher premium than P500.00.

Secondly, while he declared that the records of Monterde's case in

the Regional Trial Court in Caloocan City, Branch XXV, sala of

Judge Oscar Herrera showed that the recommended bail

was P8,000.00 (pp. 8-9, tsn, March 14, 1985), the personal bail

bond, marked as Exhibit "1", which was allegedly prepared, was

forP9,400.00 (Exh. "1", p. 7, Folder of Exhs.).

Thirdly, respondent's witness, Alfredo Brigoli, the general manager

of the AAF House of Bonds, admitted that Exhibit "1" was not

finally approved. On cross-examination, he declared:

"Q Have you signed that as finally approved?

A No, sir. When they called up asking for my signature on the

deleted portion of the bond, Mr. Alberto never came to my office.

Q In other words that bond has not been finally approved.

A Not finally approved because there is no signature yet."

(p. 20, tsn, Sept. 30, 1985).

As held by this Honorable Court in Royong v. Oblena, 7 SCRA 859,

868-869 (1963), "The respondent's misconduct, although

unrelated to his office, may constitute sufficient grounds for

disbarment." And in Quingwa v. Puno, 19 SCRA 439, 445 (1967),

it also held that, "Indeed, it is important that members of this

ancient and learned profession of law must conform themselves in

accordance with the highest standards of morality."

Specifically, for deceit and misrepresentation, respondent may be

suspended or disbarred (In re Paraiso, 41 Phil. 24, 25 [1920]).

20

The Court's Ruling

The Court finds respondent liable for violation of Canon 16 and

Rule 18.03 of the Code of Professional Responsibility ("Code").

The Code mandates every lawyer to hold in trust all moneys and

properties of his client that may come into his

possession.21Consequently, a lawyer should account for the

money received from a client.22The Code also enjoins a lawyer

not to neglect a legal matter entrusted to him,23

and hisnegligence in connection therewith shall render him liable.

Respondent himself admitted the receipt of P500 from

complainant as payment for the bail bond as shown in

histestimony and in Exhibit "A". By his receipt of the amount,

respondent agreed to take up complainant's cause and owed

fidelity to complainant and her cause, even if complainant never

paid any fee. Lawyering is not a business. It is a profession in

which duty to public service, not money, is the primary

consideration.24

Respondent claims that on 12 July 1983, he called up Alberto for

the issuance of the bail bond but it took 8 days before the bail

bond was prepared. In failing to immediately secure the bail bond,

respondent clearly neglected to exercise ordinary diligence or that

reasonable degree of care and skill required by the circumstances.
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There were also irregularities in the personal bail bond. Firstly, it

was issued on 20 July 1983 but notarized sometime in 1984 as

seen in the Notarial Certificate. The Court therefore agrees with

OSG's finding that respondent's defense that he secured a bail

bond was a mere afterthought. Furthermore, complainant filed hercomplaint on 12 September 1983, which means that the bond was

notarized only after the complaint was filed. Secondly, the bail

bond was not valid for theft and robbery cases. Although there

was a cancellation of such phrase through marking pen, the same

was not countersigned, and hence the cancellation was void.

Thirdly, the payment for the bond was not recorded and neither

was it remitted to the issuer of the bond. This means that the

bond was a mere piece of paper without any value for it failed to

serve its purpose.

Complainant demanded for the return of the P500 but respondent

kept on insisting that complainant seek refund from Alberto.

Respondent has the duty to account for the money entrusted to

him by complainant. In Parias v. Paguinto,25we held that "a

lawyer shall account for all money or property collected from the

client. Money entrusted to a lawyer for a specific purpose, such as

for filing fee, but not used for failure to file the case must

immediately be returned to the client on demand." In the present

case, money for the payment of the bond's premium was not used

for the purpose intended. Hence, respondent must return the

amount to complainant upon demand.

A lawyer's failure to return upon demand the funds held by him

on behalf of his client gives rise to the presumption that he has

appropriated the same for his own use in violation of the trust

reposed in him by his client. Such act is a gross violation of

general morality as well as of professional ethics. It impairs public

confidence in the legal profession and deserves punishment.26

This is not the first time respondent is found to have unlawfullywithheld and misappropriated money. In Igual v. Javier,27the

Court held that respondent had unjustifiably refused to return

Igual's money upon demand and his absence of integrity was

highlighted by his "half-baked excuses, hoary pretenses and

blatant lies in his testimony before the IBP Committee on Bar

Discipline." The Court suspended Javier from the practice of law

for a period of one month and ordered him to restitute the

amount of P7,000 to Igual. In that case, we reminded respondent

that he was "expected to always live up to the standardsembodied in the Code of Professional Responsibility for the

relationship between an attorney and his client is highly fiduciary

in nature and demands utmost fidelity and good faith."28

We reiterate this reminder. Lawyers who convert the funds

entrusted to them are in gross violation of professional ethics and

are guilty of betrayal of public confidence in the legal

profession.29Those who are guilty of such infraction may be

disbarred or suspended from the practice of law.30

WHEREFORE, we SUSPENDAtty. Rolando S. Javier from thepractice of law for SIX MONTHS effective upon finality of thisDecision. We ORDER respondent to restitute complainant Leticia

Adrimisin the Five Hundred Pesos (P500) with legal interest

computed from 12 September 1983 until full payment.
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Respondent shall submit to the Court proof of restitution within

ten (10) days from payment.

Let copies of this resolution be furnished the Office of the Bar

Confidant to be appended to respondent's personal record, andthe Integrated Bar of the Philippines. The Court Administrator

shall furnish copies to all courts of the land for their information

and guidance.

SO ORDERED.

Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-

Gutierrez, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr.,

Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., J.J.,concur.


SUPREME COURTManila

EN BANC

A.C. No. 7057 July 25, 2006

DAVID L. ALMENDAREZ, JR.,complainant,vs.

ATTY. MINERVO T. LANGIT,respondent.

D E C I S I O N

CARPIO,J.:

The Case

On 5 May 2004, David L. Almendarez, Jr. ("complainant") filed this

complaint-affidavit1before the Integrated Bar of the Philippines

(IBP), seeking the disbarment of Atty. Minervo T. Langit

("respondent") for acts unbecoming alawyer.

The facts are undisputed:

Complainant, as attorney-in-fact of his mother Pura Lioanag Vda.de Almendarez, was the plaintiff in an ejectment case before the

Municipal Trial Court of Dagupan City, Branch 2 ("trial court").

Respondent served as complainant's counsel. While the case was

pending, defendant Roger Bumanlag ("Bumanlag")

deposited monthly rentals for the property in dispute to the

Branch Clerk of Court.
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On 3 February 1994, the trial court rendered a decision in the

ejectment case based on a compromise agreementexecuted by

complainant and Bumanlag. On 18 December 1995, the trial court

issued an alias writ of execution for the satisfaction of the

decision. A court order2dated 2 March 2000 granted the OmnibusMotion for Execution andWithdrawal of Deposited Rentals filed by

respondent as complainant's counsel. Respondent filed a second

motion for withdrawal of deposited rentals, which the trial court

also granted on 16 March 2000.

Sometime in May 2003, complainant learned that respondent was

able to withdraw the rentals deposited by Bumanlag. Felicidad

Daroy ("Daroy"), Officer-in-Charge Clerk of Court, confirmed this

to complainant who received from Daroy copies of the two

withdrawal slips drawn from the trial court's savings account. One

slip dated 10 March 2000 was for P28,000,3and another slip

dated 19 April 2000 was for P227,000.4Thus, respondent received

a total of P255,000, as evidenced by two receipts5signed by him.

The withdrawals were made through Daroy's authorized

representative Antonia Macaraeg, but Daroy personally delivered

the money to respondent. Respondent did not inform complainant

of these transactions.

Complainant, through his new counsel Atty. Miguel D. Larida, sentrespondent on 30 June 2003 a final demand letter for the

accounting and return of the P255,000.6Respondent failed to

reply.

Hence, complainant filed this case for disbarment against

respondent for failing to account for complainant's funds.

Complainant further accuses respondent of neglecting to pursue

the implementation of the writ of execution issued in the

ejectment case.

On 12 May 2004, IBP Director for Bar Discipline Rogelio A. Vinluan("IBP Director Vinluan") ordered respondent to submit his Answer

to the complaint. Respondent did not file an answer despite

receipt of the notice.7

On 4 October 2004, IBP Investigating Commissioner Caesar R.

Dulay ("IBP Commissioner Dulay") notified the parties to appear

before him for a mandatory conference on 15 November 2004,

later reset to 17 January 2005. Only complainant appeared at the

conference, prompting IBP Commissioner Dulay to order the

conference terminated and to declare that respondent had waivedhis right to participate in the proceedings. IBP Commissioner

Dulay directed the parties to file their respective position papers.

Complainant submitted his position paper on 22 March 2005.

Again, respondent took no action.

Findings and Recommendation of the IBP

On 8 June 2005, IBP Commissioner Dulay submitted

his Report and Recommendation ("Report")8with the finding that

respondent failed to account for money he held in trust for

complainant. The Report considered complainant's evidence "clear

and convincing" enough to justify disciplinary action against

respondent for violation of Rule 16.01 of the Code of Professional

Responsibility. IBP Commissioner Dulay recommended that

respondent be declared guilty of gross misconduct and suspended
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for one year, aside from being ordered to render an accounting of

the money he had received.

In a Resolution9dated 17 December 2005, the IBP Board of

Governors approved the Report, with the modification that thepenalty of suspension be increased to two years.

The Court's Ruling

We sustain the findings of the IBP.

Respondent committed a flagrant violation of his oath when he

received the sum of money representing the monthly rentals

intended for his client, without accounting for and returning such

sum to its rightful owner. Respondent received the money in his

capacity as counsel for complainant. Therefore, respondent held

the money in trust for complainant. The Code of Professional

Responsibility ("Code") states:

CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS

AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS

POSSESSION.

Rule 16.01A lawyer shall account for all money or property

collected or received for or from the client.

Rule 16.03A lawyer shall deliver the funds and property to his

client when due or upon demand. However, he shall have a lien

over the funds and may apply so much thereof as may be

necessary to satisfy his lawful fees and disbursements, giving

notice promptly thereafter to his client. He shall also have a lien to

the same extent on all judgments and executions he has secured

for his client as provided for in the Rules of Court.

Respondent should have immediately notified complainant of the

trial court's approval of the motion to withdrawthe deposited rentals. Upon release of the funds to him,

respondent could have collected any lien which he had over them

in connection with his legal services, provided he gave prompt

notice to complainant. A lawyer is not entitled to unilaterally

appropriate his client's money for himself by the mere fact that

the client owes him attorney's fees.10In this case, respondent did

not even seek to prove the existence of any lien, or any other

right that he had to retain the money.

Respondent's failure to turn over the money to complainantdespite the latter's demands gives rise to the presumption that he

had converted the money for his personal use and benefit. This is

a gross violation of general morality as well as of professional

ethics, impairing public confidence in the legal profession.11More

specifically, it renders respondent liable not only for violating the

Code but also for contempt, as stated in Section 25, Rule 138 of

the Rules of Court:

SEC. 25. Unlawful retention of client's funds; contempt Whenan attorney unjustly retains in his hands money of his client after

it has been demanded he may be punished for contempt as

an officer of the Court who has misbehaved in his official

transactions; but proceedings under this section shall not be a bar

to a criminal prosecution.
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Additionally, respondent failed to observe Canon 1712of the Code,

which obligates the lawyer to take up the cause of his client with

entire zeal and devotion. It seems that after respondent received

the withdrawn deposits, he never contacted complainant again.

He did not pursue the implementation of the writ of executionissued in the ejectment case, to the prejudice of complainant. By

his inaction, respondent violated the trust and confidence reposed

in him. For in agreeing to be complainant's counsel, respondent

undertook to take all steps necessary to safeguard complainant's

interest in the case.

The misconduct of respondent is aggravated by his unjustified

refusal to heed the orders of the IBP requiring him to file an

answer to the complaint-affidavit and, afterwards, to appear at

the mandatory conference. Although respondent did not appear at

the conference, the IBP gave him another chance to defend

himself through aposition paper. Still, respondent ignored this

directive, exhibiting a blatant disrespect for authority. Indeed, he

is justly charged with conduct unbecoming a lawyer, for a lawyer

is expected to uphold the law and promote respect for legal

processes.13Further, a lawyer must observe and maintain respect

not only to the courts, but also to judicial officers and other duly

constituted authorities,14including the IBP. Under Rule 139-B of

the Rules of Court, the Court has empowered the IBP to

conduct proceedings for the disbarment, suspension, or discipline

of attorneys.

The relation of attorney and client is highly fiduciary, requiring

utmost good faith, loyalty, and fidelity on the part of the attorney.

Respondent miserably failed in this regard. Instead, he

demonstrated a lack of integrity, care, and devotion required by

the legal profession from its members. Whenever a lawyer is no

longer worthy of the trust and confidence of the public, this Court

has the right and duty to withdraw his privilege as officer of the

Court and member of the Bar.15

WHEREFORE,we find Atty. Minervo T. Langit GUILTYofviolating Canons 1, 11, 16, and 17 of the Code of Professional

Responsibility. We SUSPENDrespondent from the practice of lawfor two years effective upon finality of this Decision.

We ORDERrespondent to RESTITUTE, within 30 days fromfinality of this Decision, complainant'sP255,000, with interest at

12% per annum from 30 June 2003 until fully paid.

We DIRECTrespondent to submit to the Court proof of paymentwithin 15 days from payment of the full amount.

Let copies of this Decision be furnished all courts, the Office of the

Bar Confidant, as well as the Integrated Bar of the Philippines, for

their notice and guidance.

SO ORDERED.

Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-

Gutierrez, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr.,

Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., J.J.,concur.
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EN BANC

[A.C. NO. 4562 : June 15, 2005]

DANIEL MORTERA, TERESITA MORTERA, FERDINAND

MORTERA and LEO MORTERAComplainants, v.ATTY.RENATO B. PAGATPATAN,Respondent.

R E S O L U T I O N

CORONA, J.:

How far may a lawyer go to ensure that he gets paid?cralawlibrary

The answer to this question is stated clearly in Canon 16 of the

Code of Professional Responsibility for Lawyers1

andin decisions2applying the same, but it is apparently not plain

enough to the respondent in this case. It therefore behooves us to

make an example of him for the improvement of the legal

profession.

This disbarment case originated from the execution of a judgment

in a civil action for "rescission of contracts with a prayer for

prohibitory mandatory injunction."3

In brief, the complainants, then the plaintiffs, sued their mother,one Renato C. Aguilar and one PhilipArnold Palmer Bradfield for

the rescission of a contract of sale. They secured judgment under

which Aguilar was to pay them P155,000 for the property, which

this Court affirmed.4

On April 15, 1994, respondent did the unthinkable. Under

a secret agreement with Aguilar, he accepted P150,000 from the

latter as partial payment of the judgment sum, issuing a receipt

for the amount.5He then deposited the money in his

personal bank account without the knowledge ofcomplainants.6Until now, respondent adamantly refuses

to surrender the money to complainants, despite the successive

Orders of the RTC and the Court of Appeals.7

For his part, respondent, in his comment8admits his secret

agreement with and receipt of the money from Aguilar,

interposing as his defense the fact that the complainants and their

mother owed him the money he appropriated for services

previously rendered. They would not have paid him his fees had

he not done what he did.9In support of his argument, the

respondent narrated his years of service as counsel for the

complainants and their mother. He alleged the amounts they

owed him although he presented no evidence of any agreement

between him and the complainants for the exact amount of

his compensation.

Respondent's responsibility to the complainants is unequivocally

stated in Canons 15 and 16 of the Code of Professional

Responsibility. The four rules governing this situation were: heowed candor to his clients;10he was bound to account for

whatever money he received for and from them;11as a lawyer, he

was obligated to keep his own money separate from that of his

clients;12and, although he was entitled to a lien over the funds in

order to satisfy his lawful fees,13he was also bound to give
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prompt notice to his clients of such liens and to deliver the funds

to them upon demand or when due.

Respondent violated each and every one of these rules.

Respondent cited the need to protect the money from other

persons claiming to be heirs of Eusebio Montera14and from the

volatile temperament of the complainants15but did not present

any evidence at all to prove either claim. Thus, these claims

should be ignored.

Because the respondent admitted concealing his clients' money,

the only question in our minds is how severe his punishment

should be.

The Board of Governors of the Integrated Bar of the Philippines

resolved16to suspend the respondent for one year.

We do not agree.

InAldovino v. Pujalte,17respondent Atty. Pedro C. Pujalte similarly

faced disbarment charges for having withheld his clients' money in

violation of Canon 16. Pujalte alleged a lien for his fees over the

contested amount but adduced no evidence of this supposed lien.

In disposing of that case, we said:

Respondent has no right to retain or appropriate unilaterally, as

lawyer's lien, the sum of P250,000, as attorney's fees. In fact, he

did not adduce any proof of such agreement. His mere allegation

or claim is not proof. Obviously, his failure to return the money to

complainants upon demand gave rise to the presumption that he

misappropriated it in violation of the trust reposed on him. His act

of holding on to their money without their acquiescence is conduct

indicative of lack of integrity and propriety. He was clinging to

something not his and to which he had no right.

As a penalty for his infraction, Atty. Pujalte was suspended for a

year.

However, in the more recent case of de Guzman Buado and Lising

v. Layag18which involved a violation of Canons 15, 16 and 17, the

Court En Bancimposed the much heavier penalty of indefinite

suspension.

In that case, Atty. Eufracio Layag, the lawyer of the complainants

Lising and de Guzman, successfully prosecuted a case againstInland Trailways, Inc. (Inland). Pursuant to the judgment, Inland

issued three checks, one payable to Layag, one payable to Lising

and one payable to de Guzman who had already passed away by

then. Layag received all three checks from the deputy sheriff but

did not inform the complainants. He then gave them to one Marie

Paz Gonzales for encashment on the strength of a special power

of attorney (SPA) purportedly executed by the late de Guzman

appointing her as his attorney-in-fact. This SPA authorized

Gonzales to encash any check or bill of exchange received insettlement of the case. Even after complainants learned of the

issuance of the checks two years later and demanded delivery of

the proceeds, Layag refused to do so.

In imposing upon Layag the penalty of indefinite suspension, the

Court En Bancconsidered his years of experience as a lawyer, his
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ignorance of the law, specifically the Civil Code, and his violation

of not one but three Canons.

Even though, on its face, this case has more in common

with Pujaltethan with Layag, a one-year suspension seems toolenient for a number of reasons.

First, the respondent in this case has been a practicing lawyer

since 197419and even runs his own small law firm. For all his vast

experience, however, he claims that he has done nothing wrong

by concealing and withholding his clients' money from

them.20Coming from a seasoned practitioner of the law, this

attitude is inexcusable.

Second, the respondent had other means of recovering his fees,having filed a case for that purpose which was, however,

dismissed for his failure to properly implead an indispensable

party.21In short, having botched his own effort to recover his

fees, he sought to simply subvert both law and proper procedure

by holding on to the money.

Clearly, the respondent's actuations were thoroughly tainted with

bad faith, deceit and utter contempt of his sworn duty as a

lawyer. Thus, a heavier penalty than a mere one-year suspension

is definitely called for.

WHEREFORE, the IBP Board of Governors Resolution No. XV-2002-223 in Administrative Case No. 4562, finding respondent

liable for violation of Canon 16 of the Code of Professional

Responsibility is herebyAFFIRMEDwiththe MODIFICATIONthat instead of a one-year suspension, Atty.

Renato B. Pagatpatan is hereby SUSPENDEDfrom the practiceof law for two years.

Respondent is further directed to turn over to the complainants,

within five (5) days from receipt of this resolution, the P150,000he received in their behalf.

Respondent is also ORDERED to report to the Office of the BarConfidant his compliance herewith within 15 days from such

compliance.

Let a copy of this Resolution be attached to the personal record of

Atty. Renato B. Pagatpatan and copies furnished the Integrated

Bar of the Philippines and the Office of the Court Administrator for

dissemination to all courts.

This Resolution is immediately executory.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario,and Garcia, JJ., concur.
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EN BANC

A.C. No. 5829 October 28, 2003

DANIEL LEMOINE,complainant,vs.

ATTY. AMADEO E. BALON, JR.,respondent.

D E C I S I O N

PER CURIAM:

On December 17, 1999, complainant Daniel Lemoine, a French

national, filed a verified complaint1

against respondent Atty.Amadeo E. Balon, Jr., for estafa and misconduct before the

Integrated Bar of the Philippines. The case, docketed as CBD Case

No. 99-679, was referred by the Commission on Bar Discipline to

an Investigator for investigation, report and recommendation.

The facts that spawned the filing of the complaint are as follows:

In early 1998, complainant filed a car insurance claim with the

Metropolitan Insurance Company (Metropolitan Insurance), the

insurer of his vehicle which was lost. As complainant encounteredproblems in pursuing his claim which was initially rejected,2his

friend, a certain Jesus "Jess" Garcia (Garcia), arranged for the

engagement of respondents services.

By letter3of October 21, 1998 addressed to Elde

Management, Inc., "ATTN: Mr. Daniel Lemoine," under whose

care complainant could be reached, respondent advised

complainant, whom he had not before met, that for hislegal

services he was charging "25% of the actual amount being

recovered. . . payable upon successful recovery;" an advance

payment of P50,000.00 "to be charged [to complainant] to bededucted from whatever amount [would] be successfully

collected;" P1,000.00 "as appearance and conference fee for each

and every court hearings, conferences outside our law office and

meetings before the Office of the Insurance Commission which

will be also charged to our 25% recovery fee;" and legal expenses

"such as but not limited to filing fee, messengerial and postage

expenses . . . and other miscellaneous but related expenses," to

be charged to complainants account which would be reimbursed

upon presentation of statement of account.

The letter-proposal of respondent regarding attorneys fees does

not bear complainants conformity, he not having agreed

therewith.

It appears that Metropolitan Insurance finally offered to settle

complainants claim, for by letter4of December 9,1998 addressed

to it, respondent confirmed his acceptance of its offer to settle the

claim of complainant "in an ex-gratia basis of 75% of his policy

coverage which is therefore FIVE HUNDRED TWENTY FIVETHOUSAND (P525,000.00) PESOS."

A day or a few days before December 23, 1998 when complainant

left for France,5he, on the advice of respondent, signed an

already prepared undated Special Power of Attorney6authorizing

respondent and/or Garcia to bring any action against Metropolitan
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Insurance for the satisfaction of complainants claim as well as to

"negotiate, sign, compromise[,] encash and receive payment"

from it. The Special Power of Attorney was later dated December

23, 1998 on which same date Metropolitan Insurance issued a

Chinabank Check No. 841172 payable to complainant in theamount of P525,000.00 as full settlement of the claim.7The check

was received by respondent.

In the meantime, complainant returned to the Philippines in early

January 1999 but left again on the 24th of the same month.8On

inquiry about the status of his claim, Garcia echoed to

complainant what respondent had written him (Garcia) in

respondents letter9of March 26, 1999 that the claim was still

pending with Metropolitan Insurance and that it was still subject

of negotiations in which Metropolitan Insurance offered to settle it

for P350,000.00representing fifty percent thereof. In the same

letter to Garcia, respondent suggested the acceptance of the offer

of settlement to avoid a protracted litigation.

On December 6, 1999, on complainants personal visit to

the office of Metropolitan Insurance, he was informed that his

claim had long been settled via a December 23, 1998 check given

to respondent the year before.10Complainant lost no time in going

to the law office of respondent who was not around, however, butwhom he was able to talk by telephone during which he

demanded that he turn over the proceeds of his claim.11

Respondent thereupon faxed to complainant a December 7, 1999

letter12wherein he acknowledged having in his possession the

proceeds of the encashed check which he retained, however, as

attorneys lien pending complainantspayment of his attorneys

fee, equivalent to fifty percent (50%) of entire amount collected.

In the same letter, respondent protested what he branded as the

"uncivilized and unprofessional behavior" complainant "reportedly

demonstrated" at respondents office. Respondent winded up hisletter as follows, quoted verbatim:

We would like to make it clear that we cannot give you the

aforesaid amount until and unless our attorneys fees will be

forthwith agreed and settled. In the same manner, should you be

barbaric and uncivilized with your approached, we will not hesitate

to make a proper representation with the Bureau of Immigration

and Deportation for the authenticity of your visa, Department of

Labor and Employment for your working status, Bureau of

Internal Revenue for your taxation compliance and the National

Bureau of Investigation [with] which we have a good network...

While it [is your] prerogative to file a legal action against us, it is

also our prerogative to file a case against you. We will rather

suggest if you could request your lawyer to just confer with us for

the peaceful settlement of this matter. (Underscoring and

emphasis supplied)

As despite written demands,

13

respondent refused to turn over theproceeds of the insurance claim and to acknowledge the

unreasonableness of the attorneys fees he was demanding,

complainant instituted the administrative action at bar on

December 17, 1999.

In his Complaint-Affidavit, complainant alleged that "[i]t appears

that there was irregularity with the check," it having been
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issued payable to him, but "and/or AMADEO BALON" was therein

intercalated after his (complainants) name.141awphi1.nt

Maintaining that respondent was entitled to only P50,000.00 in

attorneys fees,

15

complainant decried respondents continuedpossession of the proceeds of his claim16and his

misrepresentations that the recoverythereof was fraught with

difficulties.17

In his Counter-Affidavit18of February 18, 2000, respondent

asserted that his continued retention of the proceeds of

complainants claim is in lawful exercise of his lien for unpaid

attorneys fees. He expressed readiness,however, to account for

and turn them over once he got paid fifty percent (50%) thereof,

he citing the so called contingent fee billing method of "no cure,no pay" adopted by practicing lawyers in the insurance industry as

the basis of the amount of his attorneys fees,19which to him was

justified in the absence of an attorney-client contract between him

and complainant, the latter having rejected respondents letter-

proposal of October 21, 1998.20

Respondent also highlighted the value of the time and efforts he

extended in pursuing complainants claim and theexpenses he

incurred in connection therewith. He went on to assert that hisinability to contact complainant whose whereabouts he did not

know prompted him to encash the check and keep the proceeds

thereof in conformity with the Special Power of Attorney executed

in his favor.21

During the hearings conducted by the IBP Investigator,

complainant echoed his allegations in his Complaint-Affidavit and

stressed that he turned down as unreasonable respondents

proposal in his October 21, 1998 letter that he be paid 25% of the

actual amount collected for his legal services.22And he presented

documentary evidence, including the March 26, 1999 letter of

respondent informing his co-attorney-in-fact Garcia of thesupposedly still unrecovered claim and suggesting acceptance of

the purported offer of Metropolitan Insurance to settle

complainants claim at P350,000.00.

Explaining how his above-mentioned March 26, 1999 letter to

Garcia came about, respondent declared that it was made upon

Garcias request, intended for a certain Joel Ramiscal (Ramiscal)

who was said to be Garcias business partner.23

Respondent later submitted a June 13, 2001 Supplement24to hisCounter-Affidavit reiterating his explanation that it was on Garcias

express request that he wrote the March 26, 1999 letter, which

was directed to the fax number of Ramiscal.1vvphi1.nt

Additionally, respondent declared that in the first week of May

1999, on the representation of Garcia that he had talked to

complainant about respondents retention of fifty percent (50%)

of the insurance proceeds for professional fees less expenses,25he

gave Garcia, on a staggered basis, the total amount ofP233,000.00 which, so respondent averred, is the amount of

insurance claim complainant is entitled to receive less attorneys

fees and expenses.26Thus, respondent claimed that he gave

Garcia the amount of P30,000.00 on May 31, 1999 at Dulcinea

Restaurant in Greenbelt, Makati; the amounts of P50,000.00,

P20,000.00 and P30,000.00 on different occasions at his
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(respondents) former address through his executive secretary

Sally I. Leonardo; the amount of P20,000.00 at the office of his

(respondents) former employer Commonwealth

Insurance Company through his subordinate Glen V. Roxas; and

several other payments at Dulcinea, and at ManilaIntercontinental Hotels coffee shop sometime inOctober

1999.27Respondent submitted the separate sworn statements of

Leonardo and Roxas.28

Explaining why no written memorandum of the turn over of

various payments to Garcia was made, respondent alleged that

there was no need therefor since he very well knew Garcia who is

a co-Rotarian and co-attorney-in-fact and whom he really dealt

with regarding complainants claim.29

Respondent furthermore declared that he rejected complainants

offer to pay him P50,000.00 for his services, insisting that since

there had been no clear-cut agreement on his professional fees

and it was through him that Metropolitan Insurance favorably

reconsidered its initial rejection of complainants claim, he is

entitled to a contingent fee of 50% of the net proceeds thereof.30

Finally, respondent declared that he, in connection with his follow-

up of the insurance claim, incurred representation expenses ofP35,000.00, entertainment and other representation expenses on

various occasions of P10,000.00, and transportation and gasoline

expenses and parking fees of P5,000.00;31and that his retention

of complainants money was justified in light of his apprehension

that complainant, being an alien without a valid working permit in

the Philippines, might leave the country anytime without settling

his professional fees.32

The Investigating Commissioner, by Report and

Recommendation33of October 26, 2001, found respondent guilty

of misconduct and recommended that he be disbarred and

directed to immediately turn over to complainant the sum of

P475,000.00 representing the amount of the P525,000.00

insurance claim less respondents professional fees of P50,000.00,

as proposed by complainant.

The Board of Govenors of the Integrated Bar of the Philippines,

acting on the Investigators Report, issued Resolution No. XV-

2002-40134on August 3,2002, reading:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and

APPROVED, the Report and Recommendation of the Investigating

Commissioner of the above-entitled case, herein made part of this

Resolution/Decision as Annex "A"; and, finding the

recommendation fully supported by the evidence on record and

the applicable laws and rules, with modification, and considering

respondents dishonesty which amounted to grave misconduct and

grossly unethical behavior which caused dishonor, not merely to

respondent but the noble profession to which he belongs,Respondent is hereby SUSPENDED from the practice of law for six

(6) months with the directive to turn over the amount of Five

Hundred Twenty Five Thousand (P525,000.00) Pesos to the

complainant without prejudice to respondents right to claim

attorneys fees which he may collect in the proper forum .

(Underscoring supplied)
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The records of the case are before this Court for final action.

Respondent, by a Motion for Reconsideration35filed with this

Court, assails the Investigating Commissioners Report and

Recommendation as not supported by clear, convincing and

satisfactory proof. He prays for the reopening of the case and its

remand to the Investigator so that Garcia can personally appear

for his (respondents) confrontation.

There is no need for a reopening of the case. The facts material to

its resolution are either admitted or documented.

This Court is in full accord with the findings of the IBP

Investigator that respondent violated the following provisions of

the Code of Professional Responsibility, to wit:

RULE 1.01 - A lawyer shall not engage in unlawful, dishonest,

immoral or deceitful conduct.

xxx

CANON 15 - A lawyer shall observe candor, fairness and loyalty in

all his dealings and transactions with his clients.

RULE 15.06 - A lawyer shall not state or imply that he is able to

influence any public official, tribunal or legislative body.

xxx

CANON 16 - A lawyer shall hold in trust all moneys and properties

of his client that may come into his possession.

RULE 16.01 - A lawyer shall account for all money or property

collected or received for or from the client.

RULE 16.02 - A lawyer shall keep the funds of each client separate

and apart from his own and those of others kept by him.

RULE 16.03 - A lawyer shall deliver the funds and property of his

client when due or upon demand. However, he shall have a lien

over the funds and may apply so much thereof as may be

necessary to satisfy his lawful fees and disbursements, giving

notice promptly thereafter to his client. He shall also have a lien to

the same extent on all judgments and executions he has secured

for his client as provided for in the Rules of Court.

xxx

CANON 17 - A lawyer owes fidelity to the cause of his client and

he shall be mindful of the trust and confidence in him.

xxx

RULE 18.04 - A lawyer shall keep the client informed of the status

of his case and shall respond within a reasonable time to the

clients request for information.

xxx

RULE 21.02 - A lawyer shall not, to the disadvantage of his client,

use information acquired in the course of employment, nor shall

he use the same to his advantage or that of a third person, unless

the client with full knowledge of the circumstances consents

thereto.
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Specifically with respect to above-quoted provision of Canon 16 of

the Code of Professional Responsibility, the Filipino lawyers

principal source of ethical rules, which Canon 16 bears on the

principal complaint of complainant, a lawyer must hold in trust all

moneys and properties of his client that he may come to possess.This commandment entails certain specific acts to be done by a

lawyer such as rendering an accounting of all money or property

received for or from the client36as well as delivery of the funds or

property to the client when due or upon demand.37Respondent

breached this Canon when after he received the proceeds of

complainants insurance claim, he did not report it to complainant,

who had a given address in Makati, or to his co-attorney-in-fact

Garcia who was his contact with respect to complainant.

In fact, long after respondent received the December 23,

1998 check for P525,000.00 he, by his letter of March 26, 1999 to

Garcia, had even the temerity to state that the claim was still

pending and recommend "acceptance of the 50% offer . . . which

is P350,000.00 pesos." His explanation that he prepared and sent

this letter on Garcias express request is nauseating. A lawyer, like

respondent, would not and should not commit prevarication,

documented at that, on the mere request of a friend.

By respondents failure to promptly account for the funds hereceived and held for the benefit of his client, he committed

professional misconduct.38Such misconduct is reprehensible at a

greater degree, for it was obviously done on purpose through the

employment of deceit to the prejudice of complainant who was

kept in the dark about the release of the check, until he himself

discovered the same, and has to date been deprived of the use of

the proceeds thereof.

A lawyer who practices or utilizes deceit in his dealings with his

client not only violates his duty of fidelity, loyalty and devotion to

the clients cause but also degrades himself and besmirches the

fair name of an honorable profession.39

That respondent had a lien on complainants funds for his

attorneys fees did not relieve him of his duty to account for

it.40The lawyers continuing exercise of his retaining lien

presupposes that the client agrees with the amount of attorneys

fees to be charged. In case of disagreement or when the client

contests that amount for being unconscionable, however, the

lawyer must not arbitrarily apply the funds in his possession to thepayment of his fees.41He can file, if he still deems it desirable, the

necessary action or proper motion with the proper court to fix the

amount of such fees.42

In respondents case, he never had the slightest attempt to bring

the matter of his compensation for judicial determination so that

his and complainants sharp disagreement thereon could have

been put to an end. Instead, respondent stubbornly and in bad

faith held on to complainants funds with the obvious aim offorcing complainant to agree to the amount of attor neys fees

sought. This is an appalling abuse by respondent of the exercise

of an attorneys retaining lien which by no means is an absolute

right and cannot at all justify inordinate delay in the delivery of

money and property to his client when due or upon demand.
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Respondent was, before receiving the check, proposing a 25%

attorneys fees.After he received the check and after complainant

had discovered its release to him, he was already asking for 50%,

objection to which complainant communicated to him. Why

respondent had to doubly increase his fees after the lapse ofabout one year when all the while he has been in custody of the

proceeds of the check defies comprehension. At any rate, it

smacks of opportunism, to say the least.

As for respondents claim in his June 2001 Supplement to his

Counter-Affidavit that he had on several occasions from May

1999 to October 1999 already delivered a total of P233,000.00 out

of the insurance proceeds to Garcia in trust for complainant, this

does not persuade, for it is bereft of any written memorandum

thereof. It is difficult to believe that a lawyer like respondent could

have entrusted such total amount of money to Garcia without

documenting it, especially at a time when, as respondent alleged,

he and Garcia were not in good terms.43Not only that. As stated

earlier, respondents Counter-Affidavit of February 18, 2000 and

his December 7, 1999 letter to complainant unequivocally

contained his express admission that the total amount of

P525,000.00 was in his custody. Such illogical, futile attempt to

exculpate himself only aggravates his misconduct. Respondents

claim discredited, the affidavits of Leonardo and Roxas who,

acting allegedly for him, purportedly gave Garcia some amounts

forming part of the P233,000.00 are thus highly suspect and merit

no consideration.

The proven ancillary charges against respondent reinforce the

gravity of his professional misconduct.

The intercalation of respondents name to the Chinabank check

that was issued payable solely in favor ofcomplainant as twice

certified by Metropolitan Insurance44is clearly a brazen act of

falsification of a commercial document which respondent resorted

to in order to encash the check.

Respondents threat in his December 7, 1999 letter to expose

complainant to possible sanctions from certain government

agencies with which he bragged to have a "good network" reflects

lack of character, self-respect, and justness.

It bears noting that for close to five long years respondent has

been in possession of complainants funds in the amount of over

half a million pesos. The deceptions and lies that he peddled to

conceal, until its discovery by complainant after about a year, hisreceipt of the funds and his tenacious custody thereof in a grossly

oppressive manner point to his lack of good moral character.

Worse, by respondents turnaround in his Supplement to his

Counter-Affidavit that he already delivered to complainants friend

Garcia the amount of P233,000.00 which, so respondent claims, is

all that complainant is entitled to, he in effect has declared that he

has nothing more to turn over to complainant. Such incredible

position is tantamount to a refusal to remit complainants funds,

and gives rise to the conclusion that he has misappropriatedthem.45

In fine, by respondents questioned acts, he has shown that he is

no longer fit to remain a member of the noble profession that is

the law.
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WHEREFORE, respondent Atty. Amadeo E. Balon, Jr., is foundGUILTY of malpractice, deceit and gross misconduct in the

practice of his profession as a lawyer and he is hereby

DISBARRED. The Office of the Clerk of Court is directed to strike

out his name from the Roll of Attorneys and to inform all courtsand the Integrated Bar of the Philippines of this Decision.

Respondent is ordered to turn over to complainant, Daniel

Lemoine, the amount of P525,000.00 within thirty (30) days from

notice, without prejudice to whatever judicial action he may take

to recover his attorneys fees and purported expenses incurred in

securing the release thereof from Metropolitan Insurance.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing,

Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-

Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.

Ynares-Santiago, J., on leave.


SUPREME COURTManila

EN BANC

A.C. No. 8380 November 20, 2009

ARELLANO UNIVERSITY, INC.Complainant,vs.

ATTY. LEOVIGILDO H. MI

Documents

Canon 16 and Canon 17 (Without Other Rules)-- Cases