CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND
PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS
PROFESSION.
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.
Rule 16.04 - A lawyer shall not borrow money from his client
unless the client's interest are fully protected by the nature of
the case or by independent advice. Neither shall a lawyer lend
money to a client except, when in the interest of justice, he has
to advance necessary expenses in a legal matter he is handling
for the client.
Section 25. Unlawful retention of client's funds; contempt. When an
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.
1 should be disciplined.
A.M. No. 2361 February 9, 1989
LEONILA J. LICUANAN, complainant,
vs.
ATTY. MANUEL L. MELO, respondent.
RESOLUTION
FIDUCIARY OBLIGATION OF A LAWYER
PER CURIAM:
An affidavit-complaint, dated November 11, 1981, was filed by Leonila J.
Licuanan with the Office of the Court Administrator on 5 February 1982
against respondent, Atty. Manuel L. Melo, for breach of professional ethics,
alleging that respondent, who was her counsel in an ejectment case filed
against her tenant, failed to remit to her the rentals collected by respondent on
different dates over a twelve-month period, much less did he report to her the
receipt of said amounts. It was only after approximately a year from actual
receipt that respondent turned over his collections to complainant after the
latter, through another counsel, acquired knowledge of the payment and had
demanded the same.
In his Comment on the complaint, respondent admitted having received the
payment of rentals from complainant's tenant, Aida Pineda, as alleged in the
complaint, but explained that he kept this matter from the complainant for the
purpose of surprising her with his success in collecting the rentals.
We forwarded the case to the Office of the Solicitor General, for investigation,
report and recommendation. Hearings were conducted and the parties
presented their respective evidence.
After investigation, the Solicitor General submitted the following Findings and
Recommendation:
Findings:
The issue to be resolved is whether there was unreasonable delay on the part of
the respondent in accounting for the funds collected by him for his former
client, the complainant herein, for which unprofessional conduct respondent
A lawyer, under his oath, pledges himself not to delay any man for money or
malice and is bound to conduct himself with all good fidelity to his clients.
Under paragraph 11 of the Canons of Legal Ethics, he is obligated to report
promptly the money of client that has come to his possession and should not
commingle it with his private property or use it for his personal purpose
without his client's consent viz:
Money of the client or other trust property coming into the possession of the
lawyer should be reported promptly, and except with the client's know and
consent should not be commingled with his private or be used by him.
And paragraph 32 of the Canons of Legal Ethics further requires a lawyer to
maintain a reputation for honesty and fidelity to private trust:
... But above all, a lawyer will find his highest honor in a deserved reputation
for fidelity to private trust and to public duty, as an honest man and as a
patriotic and loyal citizen.
In the instant case, respondent failed to observe his oath of office. It is
undisputed that the relation of attorney and client existed between Licuanan
and Melo at the time the incident in question took place. The records disclose
that on August 8, 1979, respondent, as Licuanan's attorney, obtained judgment
in Licuanan's favor against Aida Pineda whereby the latter was directed by the
City Court of Manila to pay Licuanan all her monthly rentals from October,
1978 and succeeding months thereafter.
When several months had elapsed without them hearing a word from Pineda,
respondent decided to send her a letter on February 4, 1980, demanding that
she pay the monthly rental of her apartment otherwise he will be constrained to
take the necessary legal action against her to protect the interest of his client
(Exhibit "A", p. 8, record). On February 11, 1980, Pineda yielded to the
demand of Melo. She went to respondent's office and paid him P3,060.00 for
which respondent gave her a receipt for the said amount representing her rental
payments for October, 1978 to February, 1980 at the rate of P180.00 per month
(Exh. "B", p. 9, Ibid.) At the end of March 31,1980, Pineda again went back to
respondent and paid the rentals of her apartment for the months of March and
April, 1980 in the sum of P360.00 (Exh. "C" p. 10, Ibid.). Not only that,
respondent again received from Pineda on June 30, 1980 rental payments
covering the months of May, June and July, 1980 in the total sum of P540.00
(Exh. "D" p. 11, Ibid.). And, on September 29, 1980, he received and issued
2 very much discernible that he did not surrender immediately the money to
Pineda a receipt for P540.00 covering rental payments for the months of
August, September and October, 1980. (Exh. "E", Ibid.). After four months
had elapsed, or on January 23, 1981, he collected again from Pineda the total
sum of P720.00 covering the months of October, November, December, 1980
and January 1981 (Exh. "F", p. 12, Ibid.).
FIDUCIARY OBLIGATION OF A LAWYER
During the entire twelve-month period that respondent had been receiving the
said rental payments of Pineda, he did not bother to inform or report to
complainant about the said payments and instead unnecessarily retained the
money. He allowed the money to accumulate for a year and kept complainant
in the dark as to the progress of the case. He did not even attempt to tell her
about the money that had come into his possession notwithstanding the fact
that complainant used to call him and inquire regarding the case (pp. 14-15,
tsn., Sept. 10, 1985).
It was only when Atty. Ponciano B. Jacinto, the new counsel retained by
complainant, wrote respondent a letter on May 4, 1981, advising him to
surrender the money to complainant that he accounted for it (Exh. "H", p. 15,
Ibid.). But this was rather late because as early as April 27, 1981, complainant,
not knowing that respondent had been receiving the rental payments of Pineda,
instituted an administrative case against her (Aida Pineda) before the Chief of
the Philippine Tuberculosis Society accusing her of "moral turpitude" arising
from her alleged failure to pay the rent of her apartment as ordered by the City
Court of Manila in Civil Case No. 037276 and claiming that she has ignored
and refused to pay her just obligation (Exh. "G", p. 14, Ibid.).
This led therefore Pineda to bring an action against her (Licuanan) for
damages before the then Court of First Instance of Manila, for she allegedly
suffered mental anguish, besmirched reputation, wounded feelings and social
humiliation arising from the unfounded administrative case Licuanan filed
against her (Aida Pineda), since as borne out by the records, she had been
paying her obligation religiously to the lawyer of Licuanan, herein respondent
(pp. 48-52, record). Clearly, this unfortunate incident would not have happened
had respondent been only true to his oath as a lawyer, i.e., to be honest and
candid towards his client.
Thus, we find it hard to believe respondent's defense that he kept the money of
complainant for a year merely because he wanted to surprise her with his
success in collecting the rental payments from Pineda. On the contrary, it is
complainant because he was using it for his own benefit. Common sense
dictates that by unnecessarily withholding the money of complainant for such
length of time, respondent deprived her of the use of the same. It is therefore
too credulous to believe his explanation, which is flimsy and incredible
Respondent's actuation casts doubt on his honesty and integrity. He must know
that the "highly fiduciary" and "confidential relation" of attorney and client
requires that the attorney should promptly account for all funds and property
received or held by him for the client's benefit, and failure to do so constitutes
professional misconduct, as succinctly held by the Honorable Supreme Court
in the case of Fermina Legaspi Daroy, et al., vs. Atty. Ramon Chaves Legaspi,
Adm. Case No. 936, July 25, 1975, 65 SCRA 304, to wit:
A lawyer, under his oath, pledges himself not to delay any man for money or
malice and is bound to conduct himself with all good fidelity to his clients. He
is obligated to report promptly the money of his clients that has come into his
possession. He should not commingle it with his private property or use it for
his personal purposes without his client's consent. He should maintain a
reputation for honesty and fidelity to private trust (Pars. 11 and 32, Canons of
Legal Ethics).
Money collected by a lawyer in pursuance of a judgment in favor of his clients
is held in trust and must be immediately turned over to them (Aya vs. Bigonia,
57 Phil. 8, 11).
xxx xxx xxx
A lawyer may be disbarred for any deceit, malpractice or other gross
misconduct in his office as attorney or for any violation of the lawyer's oath
(Ibid, sec. 27).
The relation between an attorney and his client is highly fiduciary in its nature
and of a very delicate, exacting and confidential in character, requiring a high
degree of fidelity and good faith (7 Am. Jur. 2d 105). In view of that special
relationship, 'lawyers are bound to promptly account for money or property
received by them on behalf of their clients and failure to do so constitutes
professional misconduct. The fact that a lawyer has a lien for fees on money in
his hands collected for his clients does not relieve him from the duty of
promptly accounting for the funds received. (Emphasis supplied).
3 promptly, and should not under any circumstance be commingled with his own
In fine, we are convinced that respondent is guilty of breach of trust reposed in
him by his client. Not only has he degraded himself but as an unfaithful lawyer
he has besmirched the fair name of an honorable profession (In re Paraiso, 41
Phil. 24, 25; In re David, 84 Phil. 627; Manaloto vs. Reyes, Adm. Case No.
503, October 29, 1965, 15 SCRA 131). By his deceitful conduct, he placed his
client in jeopardy by becoming a defendant in a damage suit; thus, instead of
being a help to his client, he became the cause of her misery. He, therefore,
FIDUCIARY OBLIGATION OF A LAWYER
deserves a severe punishment for it. (Aya vs. Bigornia, 57 Phil. 8, 11; In re
Bamberger, April 17, 1924, 49 Phil. 962; Daroy, et al., vs. Atty. Ramon Chaves
Legaspi, supra.)
Clearly, respondent is guilty of professional misconduct in the discharge of his
duty as a lawyer.
RECOMMENDATION
WHEREFORE, we respectfully recommend that respondent be suspended
from the practice of law for a period of not less than one (1) year, and that he
be strongly admonished to strictly and faithfully observe his duties to his
clients. (pp. 78-85, Rollo)
We find the foregoing findings well considered and adopt the same but differ
with the recommendation.
The actuations of respondent in retaining for his personal benefit over a one-
year period, the amount of P5,220.00 received by him on behalf of his client,
the complainant herein, depriving her of its use, and withholding information
on the same despite inquiries made by her, is glaringly a breach of the
Lawyer's Oath to which he swore observance, and an evident transgression of
the Canons of Professional Ethics particularly:
11. DEALING WITH TRUST PROPERTY
The lawyer should refrain from any action whereby for his personal benefit or
gain he abuses or takes advantage of the confidence reposed in him by his
client.
Money of the client or collected for the client of other trust property coming
into the possession of the lawyer should be reported and accounted for
or be used by him. *
Indeed, by his professional misconduct, respondent has breached the trust
reposed in him by his client. He has shown himself unfit for the confidence
and trust which should characterize an attorney-client relationship and the
practice of law. By reason thereof complainant was compelled to file a
groundless suit against her tenant for non-payment of rentals thereby exposing Carpio,
her to jeopardy by becoming a defendant in a damage suit filed by said tenant
against her By force of circumstances, complainant was further compelled to Corona,1*
engage the services of another counsel in order to recover the amount
rightfully due her but which respondent had unjustifiedly withheld from her. Carpio Morales,

Respondent's unprofessional actuations considered, we are constrained to find - versus - Chico-Nazario,

him guilty of deceit, malpractice and gross misconduct in office. He has
displayed lack of honesty and good moral character. He has violated his oath Velasco, Jr.,*
not to delay any man for money or malice, besmirched the name of an
honorable profession and has proven himself unworthy of the trust reposed in Nachura,
him by law as an officer of the Court. He deserves the severest punishment.
Leonardo-De Castro,
WHEREFORE, consistent with the crying need to maintain the high traditions
and standards of the legal profession and to preserve undiminished public faith
Brion,
in attorneys-at-law, the Court Resolved to DISBAR respondent, Atty. Manuel
L. Melo, from the practice of law. His name is hereby ordered stricken from
the Roll of Attorneys. Peralta,*

Copies of this Resolution shall be circulated to all Courts of the country and Bersamin,
spread on the personal record of respondent Atty. Manuel L. Melo.
Del Castillo,
SO ORDERED.
Abad, and
Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, Villarama, Jr., JJ.
JJ., concur.
ATTY. LEOVIGILDO H. MIJARES III,
Gutierrez, Jr., J., took no part.
Respondent. Promulgated:
ARELLANO UNIVERSITY, INC., A.C. No. 8380

4 Complainant,
November 20, 2009
Present:
x ---------------------------------------------------------------------------------------- x

Puno, C.J., 1

FIDUCIARY OBLIGATION OF A LAWYER

 Sometime in January 2004, complainant Arellano University, Inc. (the
University) engaged the services of respondent Leovigildo H. Mijares III, a
member of the Bar, for securing a certificate of title covering a dried up
DECISION portion of the Estero de San Miguel that the University had been occupying.
The property was the subject of a Deed of Exchange dated October 1, 1958
between the City of Manila and the University.

PER CURIAM:

In its complaint for disbarment against Mijares, the University alleged

This disbarment case is about the need for a lawyer to account for funds
entrusted to him by his client.
that it gave him all the documents he needed to accomplish his work. Later,
Mijares asked the University for and was given P500,000.00 on top of his
attorneys fees, supposedly to cover the expenses for facilitation and
processing. He in turn promised to give the money back in case he was unable
to get the work done.

On July 5, 2004 Mijares informed the University that he already

The Facts and the Case
completed Phase I of the titling of the property, meaning that he succeeded in
getting the Metro Manila Development Authority (MMDA) to approve it and
that the documents had already been sent to the Department of Environment
The facts are taken from the record of the case and the report and and Natural Resources (DENR). The University requested Mijares for copies
recommendation
5 of the Commission on Bar Discipline of the Integrated Bar of of the MMDA approval but he unjustifiably failed to comply despite his clients
the Philippines (IBP). repeated demands. Then he made himself scarce, prompting the University to
withdraw all the cases it had entrusted to him and demand the return of the
P500,000.00 it gave him.

FIDUCIARY OBLIGATION OF A LAWYER

 On November 23, 2005 the University wrote Mijares by registered letter,
formally terminating his services in the titling matter and demanding the return
of the P500,000.00. But the letter could not be served because he changed
office address without telling the University. Eventually, the University found
his new address and served him its letter on January 2, 2006. Mijares
personally received it yet he did not return the money asked of him.
In his answer to the complaint, Mijares alleged that he and the University
agreed on a number of courses of action relating to the project assigned to him:
first, get the Universitys application for a survey plan which the DENR-NCR
approved for a facilitation cost of P500,000.00; second, get a favorable
MMDA endorsement for a facilitation cost of another P500,000.00; and, third,
the titling of the property by the Land Registration Authority for a facilitation
cost of still another P500,000.00.
Mijares also alleged that the DENR-NCR Assistant Regional Director told
him that he needed to get a favorable endorsement from MMDA and that the
person to talk to about it was Undersecretary Cesar Lacuna. Mijares later met
6
the latter through a common friend. At their meeting, Mijares and Lacuna
allegedly agreed on what the latter would get for recommending approval of
the application. Later, Mijares said, he gave the P500,000.00 to Lacuna
through their common friend on Lacunas instruction.
FIDUCIARY OBLIGATION OF A LAWYER
Mijares next alleged that, after he received the money, Lacuna told him
that the University filed an identical application earlier on March 15, 2002.
Mijares claimed that the University deliberately withheld this fact from him.
Lacuna said that, because of the denial of that prior application, he would have
difficulty recommending approval of the present application. It appeared that
Lacuna endorsed the previous application to the Mayor of Manila on July 23,
2003 but the latter did not act on it.
Mijares finally alleged that he and Lacuna wanted to bypass the Mayor of
Manila in the paper work but they were unable to arrive at a concrete plan.
Mijares claimed that the University gave him only P45,000.00 as his fees and
that it was with the Universitys conformity that he gave the P500,000.00 to
Lacuna.
The IBP designated Atty. Dennis B. Funa as Commissioner to conduct a
formal investigation of the complaint. Despite numerous settings, however,
Mijares failed to appear before the Commissioner and adduce evidence in his
defense.
 On October 17, 2008 Commissioner Funa submitted his Report and
Recommendation2[1] in the case to the Integrated Bar of the Phillippines
Board of Governors. The Report said that the University did not authorize The Question Presented

Mijares to give P500,000.00 to the then MMDA Deputy Chairman Cesar

Lacuna; that Mijares had been unable to account for and return that money
despite repeated demands; and that he admitted under oath having bribed a
government official.
The only question presented in this case is whether or not respondent Mijares
is guilty of misappropriating the P500,000.00 that his client, the University,
entrusted to him for use in facilitating and processing the titling of a property
that it claimed.

Commissioner Funa recommended a) that Mijares be held guilty of

violating Rules 1.01 and 1.02, Canon 15, Rule 15.05, Canon 16, Rules 16.01
and 16.03, and Canon 18, Rule 18.04 of the Code of Professional The Courts Ruling
Responsibility and meted out the penalty of disbarment; b) that he be ordered
to return the P500,000.00 and all the pertinent documents to the University;
and c) that Mijares sworn statement that formed part of his Answer be
Section 27, Rule 138 of the Revised Rules of Court provides for the
endorsed to the Office of the Ombudsman for investigation and, if warranted,
disbarment or suspension of a lawyer for the following: (1) deceit; (2)
for prosecution with respect to his shady dealing with Deputy Chairman
malpractice; (3) gross misconduct in office; (4) grossly immoral conduct; (5)
Lacuna.
conviction of a crime involving moral turpitude; (6) violation of the lawyers
On December 11, 2008 the IBP Board of Governors passed Resolution oath; (7) willful disobedience of any lawful order of a superior court; and (8)
XVIII-2008-631, adopting and approving the Investigating Commissioners willfully appearing as an attorney for a party without authority to do so. 4[3]
recommendation but modifying the penalty from disbarment to indefinite
7
suspension from the practice of law and ordering Mijares to return the
P500,000.00 and all pertinent documents to the University within six months
from receipt of the Courts decision.3[2]

2
4
3
FIDUCIARY OBLIGATION OF A LAWYER
Every lawyer has the responsibility to protect and advance the interests of his
client such that he must promptly account for whatever money or property his
client may have entrusted to him. As a mere trustee of said money or property,
he must hold them separate from that of his own and make sure that they are
used for their intended purpose. If not used, he must return the money or
property immediately to his client upon demand, otherwise the lawyer shall be
presumed to have misappropriated the same in violation of the trust reposed on
him.5[4] A lawyers conversion of funds entrusted to him is a gross violation of
professional ethics.6[5]
Here, respondent Mijares chose not to be heard on his evidence. Technically,
the only evidence on record that the Court can consider is the Universitys
evidence that he got P500,000.00 from complainant for expenses in facilitating
and processing its title application; that he undertook to return the money if he
did not succeed in his purpose; that he falsely claimed having obtained the
MMDA approval of the application; and that he nonetheless refused to return
the money despite repeated demands. Unopposed, this evidence supports the
finding of guilt of the Investigating Commissioner and the IBP Board of
Governors.
8 Even more unfortunate for Mijares, he admitted under oath having
5 therefore, inclined to let him off with the penalty of indefinite suspension
6
FIDUCIARY OBLIGATION OF A LAWYER
Besides, even if the Court were to consider the defense that Mijares
laid out in his answer, the same does not rouse sympathy. He claims that he
gave the P500,000.00 to Undersecretary Lacuna, with the Universitys
conformity, for a favorable MMDA endorsement to the Mayor of Manila. He
also claims that, in a complete turnaround, Lacuna later said that he could not
provide the endorsement because, as it turned out, the MMDA had previously
given such endorsement of the Universitys earlier application and the Mayor
of Manila did not act on that endorsement.
But, if this were so, there was no reason for Mijares not to face the
University and make it see that it had no cause for complaint, having given
him clearance to pass on the P500,000.00 to Lacuna. Instead, Mijares kept
silent. He did not deny that the University went all over town looking for him
after he could not return the money. Nor did he take any action to compel
Lacuna to hand back the money that the University gave him. More, his not
showing up to testify on his behalf at the investigation of the case is a dead
giveaway of the lack of merit of his defense. No evidence exists to temper the
doom that he faces.
bribed a government official to act favorably on his clients application to
acquire title to a dried-up creek. That is quite dishonest. The Court is not,
which is another way of saying he can resume his practice after a time if he
returns the money and makes a promise to shape up.
The Court is also not inclined to go along with the IBPs recommendation
that the Court include in its decision an order directing Mijares to return the
P500,000.00 that the University entrusted to him. The University knowingly
gave him that money to spend for facilitation and processing. It is not nave.
There is no legitimate expense called facilitation fee. This term is a deodorized
word for bribe money. The Court will not permit the conversion of a
disbarment proceeding into a remedy for recovering bribe money lost in a bad
deal.
WHEREFORE, the Court finds respondent Leovigildo H. Mijares III, a
member of the Bar, GUILTY of violation of Rules 1.01 and 1.02, Canon 15,
Rule 15.05, Canon 16, Rules 16.01 and 16.03, and Canon 18, Rule 18.04 of
the Code of Professional Responsibility and imposes on him the penalty of
DISBARMENT. He is, in addition, directed to return to complainant Arellano
University, Inc. all the documents in his possession covering the titling matter
that it referred to him.
9 Guicos residence in Commonwealth, Quezon City, Atty. Guico asked him to
Let the sworn statement of respondent Mijares, forming his Answer, be
forwarded to the Office of the Ombudsman for whatever action it deems
proper under the circumstances.
FIDUCIARY OBLIGATION OF A LAWYER
SO ORDERED.
A.C. No. 10573 January 13, 2015
FERNANDO W. CHU, Complainant,
vs.
ATTY. JOSE C. GUICO, JR., Respondent.
DECISION
PER CURIAM:
Fernando W. Chu invokes the Court's disciplinary authority in resolving this
disbarment complaint against his former lawyer, respondent Atty. Jose C.
Guico, Jr., whom he has accused of gross misconduct.
Antecedents
Chu retained Atty. Guico as counsel to handle the labor disputes involving his
company, CVC San Lorenzo Ruiz Corporation (CVC).1 Atty. Guicos legal
services included handling a complaint for illegal dismissal brought against
CVC (NLRC Case No. RAB-III-08-9261-05 entitled Kilusan ng
Manggagawang Makabayan (KMM) Katipunan CVC San Lorenzo Ruiz
Chapter, Ladivico Adriano, et al. v. CVC San Lorenzo Ruiz Corp. and
Fernando Chu).2 On September 7, 2006, Labor Arbiter Herminio V. Suelo
rendered a decision adverse to CVC.3 Atty. Guico filed a timely appeal in
behalf of CVC.
According to Chu, during a Christmas party held on December 5, 2006 at Atty.
prepare a substantial amount of money to be given to the NLRC
Commissioner handling the appeal to insure a favorable decision.4 On June
10, 2007, Chu called Atty. Guico to inform him that he had raised P300,000.00
for the purpose. Atty. Guico told him to proceed to his office at No. 48 Times
Street, Quezon City, and togive the money to his assistant, Reynaldo (Nardo)
Manahan. Chu complied, and later on called Atty. Guico to confirm that he had
delivered the money to Nardo. Subsequently, Atty. Guico instructed Chu to
meet him on July 5, 2007 at the UCC Coffee Shop on T. Morato Street,
Quezon City. Atthe UCC Coffee Shop, Atty. Guico handed Chu a copy of an
alleged draft decision of the NLRC in favor of CVC.5 The draft decision6 was
printed on the dorsal portion of used paper apparently emanating from the
office of Atty. Guico. On that occasion, the latter told Chu to raise another
P300,000.00 to encourage the NLRC Commissioner to issue the decision. But
Chu could only produce P280,000.00, which he brought to Atty. Guicos office
on July 10, 2007 accompanied by his son, Christopher Chu, and one Bonifacio
Elipane. However, it was Nardo who received the amount without issuing any
receipt.7
Chu followed up on the status of the CVC case with Atty. Guico in December
2007. However, Atty. Guico referred him to Nardo who in turn said that he
would only know the status after Christmas. On January 11, 2008, Chu again
called Nardo, who invited him to lunch at the Ihaw Balot Plaza in Quezon
City. Once there, Chu asked Nardo if the NLRC Commissioner had accepted
the money, but Nardo replied in the negative and simply told Chu to wait.
Nardo assured that the money was still with Atty. Guico who would return it
should the NLRC Commissioner not accept it.8
On January 19, 2009, the NLRC promulgated a decision adverse to CVC.9
Chu confronted Atty. Guico, who in turn referred Chu to Nardo for the filing
of a motion for reconsideration. After the denial of the motion for
reconsideration, Atty. Guico caused the preparation and filing of an appeal in
the Court of Appeals. Finally, Chu terminated Atty. Guico as legal counsel on
May 25, 2009.10
In his position paper,11 Atty. Guico described the administrative complaint as
replete with lies and inconsistencies, and insisted that the charge was only
meant for harassment. He denied demanding and receiving money from Chu, a
denial that Nardo corroborated with his own affidavit.12 He further denied
handing to Chu a draft decision printed on used paper emanating from his
10
office, surmising that the used paper must have been among those freely lying
around in his office that had been pilfered by Chus witnesses in the criminal
complaint he had handled for Chu.13
Findings and Recommendation of the
IBP Board of Governors
FIDUCIARY OBLIGATION OF A LAWYER
IBP Commissioner Cecilio A.C. Villanueva found that Atty. Guico had
violated Rules 1.01 and 1.02, Canon I of the Code of Professional
Responsibility for demanding and receiving P580,000.00 from Chu; and
recommended the disbarment of Atty. Guico in view of his act of extortion and
misrepresentation that caused dishonor to and contempt for the legal
profession.14
On February 12, 2013, the IBP Board of Governors adopted the findings of
IBP Commissioner Villanueva in its Resolution No. XX-2013-87,15 but
modified the recommended penalty of disbarment to three years suspension,
viz.:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously
ADOPTED and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner in the above-entitled
case, herein made part of this Resolution as Annex "A," and finding the
recommendation fully supported by the evidence on record and the applicable
laws and rules and considering Respondents violation of Canon 1, Rules 1.01
and 1.02 of the Code of Professional Responsibility, Atty. Jose C. Guico, Jr. is
hereby SUSPENDED from the practice of law for three (3) years with
Warning that a repetition of the same or similar act shall be dealt with more
severely and Ordered to Return the amount of Five Hundred Eighty Thousand
(P580,000.00) Pesos with legal interest within thirty (30) days from receipt of
notice.
Atty. Guico moved for reconsideration,16 but the IBP Board of Governors
denied his motion for reconsideration on March 23, 2014 in Resolution No.
XXI-2014-173.17
Neither of the parties brought a petition for review vis--vis Resolution No.
XX-2013-87 and Resolution No. XXI-2014-173.
Issue
Did Atty. Guico violate the Lawyers Oath and Rules 1.01 and 1.02, Canon I of
the Code of Professional Responsibility for demanding and receiving
P580,000.00 from Chu to guarantee a favorable decision from the NLRC?
Ruling of the Court
In disbarment proceedings, the burden of proof rests on the complainant to
establish respondent attorneys liability by clear, convincing and satisfactory
evidence. Indeed, this Court has consistently required clearly preponderant
evidence to justify the imposition of either disbarment or suspension as
penalty.18
Chu submitted the affidavits of his witnesses,19 and presented the draft
decision that Atty. Guico had represented to him as having come from the
NLRC. Chu credibly insisted that the draft decision was printed on the dorsal
portion of used paper emanating from Atty. Guicos office,20 inferring that
Atty. Guico commonly printed documents on used paper in his law office.
Despite denying being the source of the draft decision presented by Chu, Atty.
Guicos participation in the generation of the draft decision was undeniable.
For one, Atty. Guico impliedly admitted Chus insistence by conceding that the
used paper had originated from his office, claiming only that used paper was
just "scattered around his office."21 In that context, Atty. Guicos attempt to
downplay the sourcing of used paper from his office was futile because he did
not expressly belie the forthright statement of Chu. All that Atty. Guico stated
by way of deflecting the imputation was that the used paper containing the
draft decision could have been easily taken from his office by Chus witnesses
in a criminal case that he had handled for Chu,22 pointing out that everything
in his office, except the filing cabinets and his desk, was "open to the public
xxx and just anybody has access to everything found therein."23 In our view,
therefore, Atty. Guico made the implied admission because he was fully aware
that the used paper had unquestionably come from his office.
The testimony of Chu, and the circumstances narrated by Chu and his
witnesses, especially the act of Atty. Guico of presenting to Chu the supposed
draft decision that had been printed on used paper emanating from Atty.
Guicos office, sufficed to confirm that he had committed the imputed gross
misconduct by demanding and receiving P580,000.00 from Chu to obtain a
favorable decision. Atty. Guico offered only his general denial of the
allegations in his defense, but such denial did not overcome the affirmative
11
testimony of Chu. We cannot but conclude that the production of the draft
decision by Atty. Guico was intended to motivate Chu to raise money to ensure
the chances of obtaining the favorable result in the labor case. As such, Chu
discharged his burden of proof as the complainant to establish his complaint
against Atty. Guico. In this administrative case, a fact may be deemed
established if it is supported by substantial evidence, or that amount of relevant
FIDUCIARY OBLIGATION OF A LAWYER
evidence which a reasonable mind might accept as adequate to justify a
conclusion.24
What is the condign penalty for Atty. Guico?
In taking the Lawyers Oath, Atty. Guico bound himself to:
x x x maintain allegiance to the Republic of the Philippines; x x x support its
Constitution and obey the laws as well as the legal orders of the duly
constituted authorities therein; x x x do no falsehood, nor consent to the doing
of any in court; x x x delay no man for money or malice x x x. The Code of
Professional Responsibility echoes the Lawyers Oath, to wit:
CANON 1 A lawyer shall uphold the constitution, obey the laws of the land
and promote respect for law and for legal processes.1wphi1
Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct.
Rule 1.02 A lawyer shall not counsel or abet activities aimed at defiance of
the law or at lessening confidence in the legal system.
The sworn obligation to respect the law and the legal processes under the
Lawyers Oath and the Code of Professional Responsibility is a continuing
condition for every lawyer to retain membership in the Legal Profession. To
discharge the obligation, every lawyer should not render any service or give
advice to any client that would involve defiance of the very laws that he was
bound to uphold and obey,25 for he or she was always bound as an attorney to
be law abiding, and thus to uphold the integrity and dignity of the Legal
Profession.26 Verily, he or she must act and comport himself or herself in such
a manner that would promote public confidence in the integrity of the Legal
Profession.27 Any lawyer found to violate this obligation forfeits his or her
privilege to continue such membership in the legal profession.
Atty. Guico willingly and wittingly violated the law in appearing to counsel
Chu to raise the large sums of money in order to obtain a favorable decision in
the labor case. He thus violated the law against bribery and corruption. He
compounded his violation by actually using said illegality as his means of
obtaining a huge sum from the client that he soon appropriated for his own
personal interest. His acts constituted gross dishonesty and deceit, and were a
flagrant breach of his ethical commitments under the Lawyers Oath not to
delay any man for money or malice; and under Rule 1.01 of the Code of
Professional Responsibility that forbade him from engaging in unlawful,
dishonest, immoral or deceitful conduct. His deviant conduct eroded the faith
of the people in him as an individual lawyer as well as in the Legal Profession
as a whole. In doing so, he ceased to be a servant of the law.
Atty. Guico committed grave misconduct and disgraced the Legal Profession.
Grave misconduct is "improper or wrong conduct, the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies a wrongful intent and not mere error of
judgment."28 There is no question that any gross misconduct by an attorney in
his professional or private capacity renders him unfit to manage the affairs of
others, and is a ground for the imposition of the penalty of suspension or
disbarment, because good moral character is an essential qualification for the
admission of an attorney and for the continuance of such privilege.29
Accordingly, the recommendation of the IBP Board of Governors to suspend
him from the practice of law for three (3) years would be too soft a penalty.
Instead, he should be disbarred,30 for he exhibited his unworthiness of
retaining his membership in the legal profession. As the Court has reminded in
Samonte v. Abellana:31
Disciplinary proceedings against lawyers are designed to ensure that whoever
is granted the privilege to practice law in this country should remain faithful to
the Lawyers Oath. Only thereby can lawyers preserve their fitness to remain
as members of the Law Profession. Any resort to falsehood or deception,
including adopting artifices to cover up ones misdeeds committed against
clients and the rest of the trusting public, evinces an unworthiness to continue
enjoying the privilege to practice law and highlights the unfitness to remain a
member of the Law Profession. It deserves for the guilty lawyer stern
disciplinary sanctions.
12
FIDUCIARY OBLIGATION OF A LAWYER
Lastly, the recommendation of the IBP Board of Governors that Atty. Guico be
ordered to return the amount of P580,000.00 to Chu is well-taken. That
amount was exacted by Atty. Guico from Chu in the guise of serving the
latters interest as the client. Although the purpose for the amount was
unlawful, it would be unjust not to require Atty. Guico to fully account for and
to return the money to Chu. It did not matter that this proceeding is
administrative in character, for, as the Court has pointed out in Bayonla v.
Reyes:32
Although the Court renders this decision in an administrative proceeding
primarily to exact the ethical responsibility on a member of the Philippine Bar,
the Courts silence about the respondent lawyers legal obligation to restitute
the complainant will be both unfair and inequitable. No victim of gross ethical
misconduct concerning the clients funds or property should be required to still
litigate in another proceeding what the administrative proceeding has already
established as the respondents liability. x x x
ACCORDINGLY, the Court FINDS and DECLARES respondent ATTY. JOSE
S. GUICO, JR. GUILTY of the violation of the Lawyers Oath, and Rules 1.01
and 1.02, Canon I of the Code of Professional Responsibility, and DISBARS
him from membership in the Integrated Bar of the Philippines. His name is
ORDERED STRICKEN from the Roll of Attorneys.
Let copies of this Decision be furnished to the Office of the Bar Confidant, to
be appended to Atty. Guicos personal record as an attorney; to the Integrated
Bar of the Philippines; and to all courts and quasi-judicial offices in the
country for their information and guidance.
SO ORDERED.
EN BANC
A.C. No. 10681, February 03, 2015
SPOUSES HENRY A. CONCEPCION AND BLESILDA S.
CONCEPCION, Complainants, v. ATTY. ELMER A. DELA ROSA,
Respondent.
DECISION
 PERLAS-BERNABE, J.:
On March 28, 2006, or the day respondent promised to return the money, he
This is an administrative case that stemmed from a Verified Complaint 1 filed failed to pay complainants. Thus, in April 2006, complainants began
by complainants Spouses Henry A. Concepcion (Henry) and Blesilda S. demanding payment but respondent merely made repeated promises to pay
Concepcion (Blesilda; collectively complainants) against respondent Atty. soon. On July 7, 2008, Blesilda sent a demand letter9 to respondent, which the
Elmer A. dela Rosa (respondent), charging him with gross misconduct for latter did not heed.10 On August 4, 2008, complainants, through their new
violating, among others, Rule 16.04 of the Code of Professional Responsibility counsel, Atty. Kathryn Jessica dela Serna, sent another demand letter 11 to
(CPR). respondent.12 In his Reply,13 the latter denied borrowing any money from the
complainants. Instead, respondent claimed that a certain Jean Charles Nault
The Facts (Nault), one of his other clients, was the real debtor. Complainants brought the
matter to the Office of the Lupong Tagapamayapa in Barangay Balulang,
In their Verified Complaint, complainants alleged that from 1997 2 until August Cagayan de Oro City. The parties, however, failed to reach a
2008,3 respondent served as their retained lawyer and counsel. In this capacity, settlement.14chanRoblesvirtualLawlibrary
respondent handled many of their cases and was consulted on various legal
matters, among others, the prospect of opening a pawnshop business towards On January 11, 2010, the IBP-Misamis Oriental Chapter received
the end of 2005. Said business, however, failed to complainants letter-complaint15 charging respondent with violation of Rule
materialize.4chanRoblesvirtualLawlibrary 16.04 of the CPR. The rule prohibits lawyers from borrowing money from
clients unless the latters interests are fully protected by the nature of the case
Aware of the fact that complainants had money intact from their failed or by independent advice.16chanRoblesvirtualLawlibrary
business venture, respondent, on March 23, 2006, called Henry to borrow the
amount of P2,500,000.00, which he promised to return, with interest, five (5) In his Comment,17 respondent denied borrowing P2,500,000.00 from
days thereafter. Henry consulted his wife, Blesilda, who, believing that complainants, insisting that Nault was the real debtor.18 He also claimed that
respondent would be soon returning the money, agreed to lend the aforesaid complainants had been attempting to collect from Nault and that he was
sum to respondent. She thereby issued three (3) EastWest Bank checks 5 in engaged for that specific purpose.19chanRoblesvirtualLawlibrary
respondents name:6chanRoblesvirtualLawlibrary
In their letter-reply,20 complainants maintained that they extended the loan to
Check No. Date Amount Payee respondent alone, as evidenced by the checks issued in the latters name. They
categorically denied knowing Nault and pointed out that it defies common
0000561925 03-23-06 P750,000.00 Elmer dela Rosa
sense for them to extend an unsecured loan in the amount of P2,500,000.00 to
0000561926 03-23-06 P850,000.00 Elmer dela Rosa a person they do not even know. Complainants also submitted a copy of the
0000561927 03-23-06 P900,000.00 Elmer dela Rosa Answer to Third Party Complaint21 which Nault filed as third-party defendant
Total: P2,500,000.00 in a related collection case instituted by the complainants against respondent. 22
In said pleading, Nault explicitly denied knowing complainants and alleged
13 that it was respondent who incurred the subject loan from
Upon receiving the checks, respondent signed a piece of paper containing: (a) them.23chanRoblesvirtualLawlibrary
photocopies of the checks; and (b) an acknowledgment that he received the
originals of the checks and that he agreed to return the P2,500,000.00, plus On November 23, 2010, the IBP-Misamis Oriental Chapter endorsed the letter-
monthly interest of five percent (5%), within five (5) days. 7 In the afternoon of complaint to the IBP-Commission on Bar Discipline (CBD), 24 which was later
March 23, 2006, the foregoing checks were personally encashed by docketed as CBD Case No. 11-2883.25 In the course of the proceedings,
respondent.8chanRoblesvirtualLawlibrary respondent failed to appear during the scheduled mandatory conferences. 26
FIDUCIARY OBLIGATION OF A LAWYER
Hence, the same were terminated and the parties were directed to submit their
respective position papers.27 Respondent, however, did not submit
any.cralawred
The IBP Report and Recommendation
On April 19, 2013, the IBP Investigating Commissioner, Jose I. de La Rama,
Jr. (Investigating Commissioner), issued his Report 28 finding respondent guilty
of violating: (a) Rule 16.04 of the CPR which provides that a lawyer shall not
borrow money from his clients unless the clients interests are fully protected
by the nature of the case or by independent advice; (b) Canon 7 which states
that a lawyer shall uphold the integrity and dignity of the legal profession and
support the activities of the IBP; and (c) Canon 16 which provides that a
lawyer shall hold in trust all monies and properties of his client that may come
into his possession.29chanRoblesvirtualLawlibrary
The Investigating Commissioner observed that the checks were issued in
respondents name and that he personally received and encashed them. Annex
E30 of the Verified Complaint shows that respondent acknowledged receipt
of the three (3) EastWest Bank checks and agreed to return the P2,500,000.00,
plus a pro-rated monthly interest of five percent (5%), within five (5)
days.31chanRoblesvirtualLawlibrary
On the other hand, respondents claim that Nault was the real debtor was found
to be implausible. The Investigating Commissioner remarked that if it is true
that respondent was not the one who obtained the loan, he would have
responded to complainants demand letter; however, he did not. 32 He also
observed that the acknowledgment 33 Nault allegedly signed appeared to have
been prepared by respondent himself.34 Finally, the Investigating
Commissioner cited Naults Answer to the Third Party Complaint which
categorically states that he does not even know the complainants and that it
was respondent alone who obtained the loan from
them.35chanRoblesvirtualLawlibrary
14
In fine, the Investigating Commissioner concluded that respondents actions
degraded the integrity of the legal profession and clearly violated Rule 16.04
and Canons 7 and 16 of the CPR. Respondents failure to appear during the
mandatory conferences further showed his disrespect to the IBP-CBD. 36
Accordingly, the Investigating Commissioner recommended that respondent
be disbarred and that he be ordered to return the P2,500,000.00 to
FIDUCIARY OBLIGATION OF A LAWYER
complainants, with stipulated interest.37chanRoblesvirtualLawlibrary
Finding the recommendation to be fully supported by the evidence on record
and by the applicable laws and rule, the IBP Board of Governors adopted and
approved the Investigating Commissioners Report in Resolution No. XX-
2013-617 dated May 11, 2013,38 but reduced the penalty against the respondent
to indefinite suspension from the practice of law and ordered the return of the
P2,500,000.00 to the complainants with legal interest, instead of stipulated
interest.
Respondent sought a reconsideration39 of Resolution No. XX-2013-617 which
was, however, denied in Resolution No. XXI-2014-29440 dated May 3,
2014.cralawred
The Issue Before the Court
The central issue in this case is whether or not respondent should be held
administratively liable for violating the CPR.
The Courts Ruling
The Court concurs with the IBPs findings except as to its recommended
penalty and its directive to return the amount of P2,500,000.00, with legal
interest, to complainants.cralawred
I.
Respondents receipt of the P2,500,000.00 loan from complainants is amply
supported by substantial evidence. As the records bear out, Blesilda, on March
23, 2006, issued three (3) EastWest Bank Checks, in amounts totalling to
P2,500,000.00, with respondent as the payee. 41 Also, Annex E42 of the
Verified Complaint shows that respondent acknowledged receipt of the checks
and agreed to pay the complainants the loan plus the pro-rated interest of five
percent (5%) per month within five (5) days. 43 The dorsal sides of the checks
likewise show that respondent personally encashed the checks on the day they
were issued.44 With respondents direct transactional involvement and the
actual benefit he derived therefrom, absent too any credible indication to the
contrary, the Court is thus convinced that respondent was indeed the one who
borrowed the amount of P2,500,000.00 from complainants, which amount he
had failed to return, despite their insistent pleas.

Respondents theory that Nault is the real debtor hardly inspires belief. While
respondent submitted a document purporting to be Naults acknowledgment of
his debt to the complainants, Nault, in his Answer to Third Party Complaint,
categorically denied knowing the complainants and incurring the same
obligation.
Moreover, as correctly pointed out by complainants, it would be illogical for
them to extend a P2,500,000.00 loan without any collateral or security to a
person they do not even know. On the other hand, complainants were able to
submit documents showing respondents receipt of the checks and their
encashment, as well as his agreement to return the P2,500,000.00 plus interest.
This is bolstered by the fact that the loan transaction was entered into during
the existence of a lawyer-client relationship between him and complainants, 45
allowing the former to wield a greater influence over the latter in view of the
trust and confidence inherently imbued in such relationship.
Under Rule 16.04, Canon 16 of the CPR, a lawyer is prohibited from
borrowing money from his client unless the clients interests are fully
protected:chanroblesvirtuallawlibrary
CANON 16 A lawyer shall hold in trust all moneys and
properties of his clients that may come into his possession.
Rule 16.04 A lawyer shall not borrow money from his client
unless the clients interests are fully protected by the nature of
the case or by independent advice. Neither shall a lawyer lend
money to a client except, when in the interest of justice, he has
to advance necessary expenses in a legal matter he is handling
for the client.
The Court has repeatedly emphasized that the relationship between a lawyer
and his client is one imbued with trust and confidence. And as true as any
natural
15 tendency goes, this trust and confidence is prone to abuse. The rule
against borrowing of money by a lawyer from his client is intended to prevent
the lawyer from taking advantage of his influence over his client. 46 The rule
presumes that the client is disadvantaged by the lawyers ability to use all the
legal maneuverings to renege on his obligation. 47 In Frias v. Atty. Lozada48
(Frias) the Court categorically declared that a lawyers act of asking a client
FIDUCIARY OBLIGATION OF A LAWYER
for a loan, as what herein respondent did, is unethical, to
wit:chanroblesvirtuallawlibrary
Likewise, her act of borrowing money from a client was a
violation of [Rule] 16.04 of the Code of Professional
Responsibility:ChanRoblesVirtualawlibrary
A lawyer shall not borrow money from his
client unless the clients interests are fully
protected by the nature of the case and by
independent advice.
A lawyers act of asking a client for a loan, as what
respondent did, is very unethical. It comes within those
acts considered as abuse of clients confidence. The canon
presumes that the client is disadvantaged by the lawyers
ability to use all the legal maneuverings to renege on her
obligation.49 (Emphasis supplied)
As above-discussed, respondent borrowed money from complainants who
were his clients and whose interests, by the lack of any security on the loan,
were not fully protected. Owing to their trust and confidence in respondent,
complainants relied solely on the formers word that he will return the money
plus interest within five (5) days. However, respondent abused the same and
reneged on his obligation, giving his previous clients the runaround up to this
day. Accordingly, there is no quibble that respondent violated Rule 16.04 of
the CPR.
In the same vein, the Court finds that respondent also violated Canon 7 of the
CPR which reads:chanroblesvirtuallawlibrary
CANON 7 - A LAWYER SHALL AT ALL TIMES UPHOLD
THE INTEGRITY AND DIGNITY OF THE LEGAL
PROFESSION AND SUPPORT THE ACTIVITIES OF THE
INTEGRATED BAR.
In unduly borrowing money from the complainants and by blatantly refusing
to pay the same, respondent abused the trust and confidence reposed in him by
his clients, and, in so doing, failed to uphold the integrity and dignity of the
legal profession. Thus, he should be equally held administratively liable on
this score.
That being said, the Court turns to the proper penalty to be imposed and the for circulation to all the courts.
propriety of the IBPs return directive.cralawred
SO ORDERED.
II.
FIRST DIVISION
The appropriate penalty for an errant lawyer depends on the exercise of sound
judicial discretion based on the surrounding A.C. No. 10672, March 18, 2015
facts.50chanRoblesvirtualLawlibrary
EDUARDO A. MAGLENTE,*Complainant, v. ATTY. DELFIN R.
In Frias, the Court suspended the lawyer from the practice of law for two (2) AGCAOILI, JR., Respondent.
years after borrowing P900,000.00 from her client, refusing to pay the same
despite court order, and representing conflicting interests. 51 Considering the DECISION
greater amount involved in this case and respondents continuous refusal to
pay his debt, the Court deems it apt to suspend him from the practice of law PERLAS-BERNABE, J.:
for three (3) years, instead of the IBPs recommendation to suspend him
indefinitely. Before the Court is an administrative complaint 1 dated May 9, 2006 filed by
complainant Eduardo A. Maglente (complainant), before the Integrated Bar of
The Court also deems it appropriate to modify the IBPs Resolution insofar as the Philippines (IBP), against respondent Atty. Delfin R. Agcaoili, Jr.
it orders respondent to return to complainants the amount of P2,500,000.00 (respondent), praying that the latter be directed to return the amount of
and the legal interest thereon. It is settled that in disciplinary proceedings P48,000.00 that he received from the former.
against lawyers, the only issue is whether the officer of the court is still fit to
be allowed to continue as a member of the Bar.52 In such cases, the Courts
The Facts
only concern is the determination of respondents administrative liability; it
should not involve his civil liability for money received from his client in a
Complainant, as President of Samahan ng mga Maralitang Taga Ma.
transaction separate, distinct, and not intrinsically linked to his professional
Corazon III, Incorporated (Samahan), alleged that he engaged the services of
engagement. In this case, respondent received the P2,500,000.00 as a loan
respondent for the purpose of filing a case in order to determine the true owner
from complainants and not in consideration of his professional services.
of the land being occupied by the members of Samahan.2 In connection
Hence, the IBPs recommended return of the aforementioned sum lies beyond
therewith, he gave respondent the aggregate amount of P48,000.00 intended to
the ambit of this administrative case, and thus cannot be
cover the filing fees for the action to be instituted, as evidenced by a written
sustained.chanrobleslaw
acknowledgment executed by respondent himself. 3 Despite the payment,
respondent failed to file an action in court. When confronted, respondent
WHEREFORE, respondent Atty. Elmer A. dela Rosa is found guilty of
explained that the money given to him was not enough to fully pay for the
violating Canon 7 and Rule 16.04, Canon 16 of the Code of Professional
filing fees in court.4Thus, complainant asked for the return of the money, but
Responsibility.
16 Accordingly, he is hereby SUSPENDED from the practice of
respondent claimed to have spent the same and even demanded more money. 5
law for a period of three (3) years effective upon finality of this Decision, with
Complainant further alleged that when he persisted in seeking restitution of the
a stern warning that a commission of the same or similar acts will be dealt with
aforesaid sum, respondent told him to shut up because it was not his money in
more severely. This Decision is immediately executory upon receipt.
the first place.6 Hence, complainant filed this administrative complaint seeking
the return of the full amount he had paid to respondent.
Let a copy of this Decision be furnished the Office of the Bar Confidant, the
Integrated Bar of the Philippines, and the Office of the Court Administration
In his defense,7 respondent denied spending complainants money, explaining
FIDUCIARY OBLIGATION OF A LAWYER
that he had already prepared the initiatory pleading and was poised to file the
same, when he discovered through the Clerk of Court of the Regional Trial
Court of Antipolo City that the filing fee was quite costly. This prompted him
to immediately relay such information to complainant who undertook to raise
the amount needed. While waiting, however, the instant administrative case
was filed against him. 8
The IBPs Report and Recommendation
In a Report and Recommendation9 dated October 3, 2012, the IBP
Investigating Commissioner found respondent guilty of violating Rule 16.01
of the Code of Professional Responsibility (CPR), and accordingly,
recommended that he be: (a) meted with the penalty of Censure, with a
warning that a repetition of the same will be met with a stiffer penalty; and (b)
directed to account for or return the amount of P48,000.00 to complainant. 10
The Investigating Commissioner found that respondent clearly received the
amount of P48,000.00 from complainant, which was intended to answer for
the filing fees of a case he was supposed to file for the Samahan, but which he
failed to do so.11 In this relation, the Investigating Commissioner observed that
had respondent prepared the complaint and performed research works, as he
claimed, then he could have kept a reasonable amount for his effort under the
doctrine of quantum meruit, but unfortunately, he could not present any proof
in this respect.12
In a Resolution13 dated May 11, 2013, the IBP Board of Governors adopted
and approved the aforesaid Report and Recommendation, with modification
increasing the recommended penalty from Censure to suspension from the
practice of law for a period of three (3) months. Aggrieved, respondent moved
for reconsideration14 which was, however, denied in a Resolution15 dated May
3, 2014.
The Issue Before the Court
17
The essential issue in this case is whether or not respondent should be held
administratively liable for the acts complained of.
The Courts Ruling
After a judicious perusal of the records, the Court concurs with the findings of
FIDUCIARY OBLIGATION OF A LAWYER
the IBP, except as tothe penalty to be imposed upon respondent.
It must be stressed that once a lawyer takes up the cause of his client, he is
duty-bound to serve the latter with competence, and to attend to such clients
cause with diligence, care, and devotion, whether he accepts it for a fee or for
free. He owes fidelity to such cause and must always be mindful of the trust
and confidence reposed upon him. 16 Therefore, a lawyers neglect of a legal
matter entrusted to him by his client constitutes inexcusable negligence for
which he must be held administratively liable for violating Rule 18.03, Canon
18of the CPR,17 which reads:
CANON 18 A LAWYER SHALL SERVE HIS CLIENT
WITH COMPETENCE AND DILIGENCE.
x x x x
Rule 18.03 A lawyer shall not neglect a legal matter
entrusted to him, and his negligence in connection [therewith]
shall render him liable.
In the instant case, it is undisputed that complainant engaged the services of
respondent for the purpose of filing a case in court, and in connection
therewith, gave the amount of P48,000.00 to answer for the filing fees. Despite
the foregoing, respondent failed to comply with his undertaking and offered
the flimsy excuse that the money he received from complainant was not
enough to fully pay the filing fees.
Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the
CPR when he failed to refund the amount of P48,000.00 that complainant gave
him despite repeated demands, viz.:
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.
x x x x
 Rule 16.03 A lawyer shall deliver the funds and property of
his client when due or upon demand. x x x.
Verily, when a lawyer receives money from the client for a particular purpose,
the lawyer is bound to render an accounting to the client showing that the
money was spent for the intended purpose. Consequently, if the money was
not used accordingly, the same must be immediately returned to the client. 18 A
lawyers failure to return the money to his client despite numerous demands is
a violation of the trust reposed on him and is indicative of his lack of
integrity,19 as in this case.
Clearly, respondent failed to exercise such skill, care, and diligence as men of
the legal profession commonly possess and exercise in such matters of
professional employment,20 and hence, must be disciplined accordingly.
Having established respondents administrative liability, the Court now
determines the proper penalty to be imposed.
Jurisprudence provides that in similar cases where lawyers neglected their
clients affairs and, at the same time, failed to return the latters money and/or
property despite demand, the Court meted out the penalty of suspension from
the practice of law. In Segovia-Ribaya v. Lawsin,21 the Court suspended the
lawyer for a period of one (1) year for his failure to perform his undertaking
under his retainership agreement with his client and to return the money given
to him by the latter.22 Similarly, in Meneses v. Macalino,23 the same penalty
was imposed on a lawyer who failed to render any legal service to his client as
well as to return the money he received for such purpose. 24 In view of the
foregoing, the Court finds it appropriate that respondent be meted with the
penalty of suspension from the practice of law for a period of one (1) year.
Finally, the Court sustains the directive for respondent to account for or return
the amount of P48,000.00 to complainant. It is well to note that while the
Court has previously held that disciplinary proceedings should only revolve
around
18 the determination of the respondent-lawyers administrative and not his
civil liability, it must be clarified that this rule remains applicable only to
claimed liabilities which are purely civil in nature for instance, when the
claim involves moneys received by the lawyer from his client in a transaction
separate and distinct [from] and not intrinsically linked to his professional
engagement.25 Since the aforesaid amount was intended to answer for filing
fees which is intimately related to the lawyer-client relationship between
FIDUCIARY OBLIGATION OF A LAWYER
complainant and respondent, the Court finds the return thereof to be in order.26
WHEREFORE, respondent Atty. Delfin R. Agcaoili, Jr. (respondent), is
found GUILTY of violating Rules 16.01 and 16.03 of Canon 16, and Rule
18.03 of Canon 18of the Code of Professional Responsibility. Accordingly, he
is hereby SUSPENDED from the practice of law for a period of one (1) year,
effective upon his receipt of this Decision, with a STERN WARNING that a
repetition of the same or similar acts will be dealt with more severely.
Furthermore, respondent is ORDERED to return to complainant Eduardo A.
Maglente the amount of P48,000.00 he received from the latter within ninety
(90) days from the finality of this Decision. Failure to comply with the
foregoing directive will warrant the imposition of a more severe penalty.
Let a copy of this Decision be attached to respondents record in this Court as
attorney. Further, let copies of this Decision be furnished the Integrated Bar of
the Philippines and the Office of the Court Administrator, which is directed to
circulate them to all the courts in the country for their information and
guidance.
SO ORDERED.
AC. No. 10912, January 19, 2016
PAULINA T. YU, Complainant, v. ATTY. BERLIN R. DELA CRUZ,
Respondent.
DECISION
PER CURIAM:
Subject of this disposition is the September 28, 2014 Resolution 1 of the
Integrated Bar of the Philippines Board of Governors (IBP-BOG) which
adopted and approved the findings and the recommendation of the
Investigating Commissioner for the disbarment of Atty. Berlin Dela Cruz
(respondent lawyer).
It appears from the records that respondent lawyer agreed to represent Paulina
T. Yu (complainant) in several cases after having received various amounts as
acceptance fees, to wit:chanRoblesvirtualLawlibrary
 Case Title Acceptance Fees
People v. Tortona for attempted homicide (Case No.
06-359) filed with the Metropolitan Trial Court, P 20,000.00
Bacoor, Cavite
Paulina T. Yu v. Pablo and Rodel Gamboa for qualified
theft/estafa (I.S. No. XV-07-INV-116-05339) filed with P 8,000.00
the City Prosecutor of Manila
Paulino T. Yu v. Roberto Tuazon et al. (Civil Case No.
LP-00-0087) filed before the Regional Trial Court of P 15,000.00
Las Pias2
cralawlawlibrary
On November 29, 2011, while the lawyer-client relationship was subsisting,
respondent lawyer borrowed pieces of jewelry from complainant and pledged
the same with the Citystate Savings Bank, Inc. for the amount of P29,945.50,
as shown in the Promissory Note with Deed of Pledge. 3 Respondent lawyer
appropriated the proceeds of the pledge to his personal use. In order to
facilitate the redemption of the said jewelry, respondent lawyer issued to
complainant, Citystate Savings Bank Check No. 0088551, dated August 31,
2011, in the amount of P34,500.00. Upon presentment, however, complainant
was shocked to learn that the check was dishonored for the reason, "Account
Closed."4 Complainant immediately notified respondent lawyer of the dishonor
of the check.
In a letter,5 dated March 23, 2012, complainant demanded for the refund of the
acceptance fees received by respondent lawyer prior to the "abandonment" of
the cases and the payment of the value of the jewelry, but to no avail.
In another letter,6 dated April 18, 2012, this time represented by another
lawyer, Atty. Francisco C. Miralles, complainant yet again demanded the
redemption of the check in cash within five days from notice; the refund of the
19 acceptance fees, in exchange for which no service was rendered; the
paid
payment of the value of the pledged jewelry in the amount of PI00,000.00 in
order to avoid the interests due and the possible foreclosure of the pledge; and
moral damages of P 300,000.00.
For his failure to heed the repeated demands, a criminal case for violation of
Batas Pambansa Blg. 22 was filed with the Office of the City Prosecutor, Las
FIDUCIARY OBLIGATION OF A LAWYER
Pinas City, against him.7
On June 7, 2012, a verified complaint was filed with the IBP-Commission on
Bar Discipline (IBP-CBD),8 where complainant prayed for the disbarment of
respondent lawyer on account of grave misconduct, conduct unbecoming of a
lawyer and commission of acts in violation of the lawyer's oath. The IBP-CBD
required respondent lawyer to submit his answer to the complaint. 9 Despite
having been duly served with a copy of the complaint and the order to file his
answer, as shown in a certification10 issued by the Post Master of the Las Pias
Central Post Office, respondent still failed to file an answer.
Respondent lawyer was likewise notified of the scheduled mandatory
conference/hearing on November 23, 2012, but only the complainant and her
counsel appeared on the said day. The IBP-CBD then ordered the resetting of
the mandatory conference for the last time to January 11, 2013 and the
personal service of the notice thereof to respondent lawyer's given address. 11
Notwithstanding the receipt of the notice by respondent lawyer's mother,12 he
still failed to appear during the conference, prompting complainant to move
for the termination of the conference and the submission of the case for report
and recommendation.
On June 7, 2013, the Investigating Commissioner recommended the
disbarment of respondent lawyer from the practice of law.13 Based on the
evidence on record, respondent lawyer was found to have violated Rule 16.04
of the Code of Professional Responsibility (CPR), which proscribed the
borrowing of money from a client, unless the latter's interests were fully
protected by the nature of the case or by independent advice. Worse,
respondent lawyer had clearly issued a worthless check in violation of law
which was against Rule 1.01 of Canon 1 of the CPR stating that, "[a] lawyer
shall not engage in unlawful, dishonest and immoral or deceitful conduct."
On September 28, 2014, the IBP-BOG affirmed the said recommendation in
Resolution No. XXI-2014-698.14
Neither a motion for reconsideration before the BOG nor a petition for review
before this Court was filed. Nonetheless, the IBP elevated to this Court the
entire records of the case for appropriate action with the IBP Resolution being
merely recommendatory and, therefore, would not attain finality, pursuant to
par. (b), Section 12, Rule 139-B of the Rules of Court.15
The Court acknowledges the fact that respondent lawyer failed to refute the
accusations against him despite the numerous opportunities afforded to him to
explain his side. All means were exhausted to give respondent lawyer a chance
to oppose the charges against him but to no avail and for reasons only for
known to him. Whether respondent lawyer had personally read the orders by
the IBP-CBD or his mother failed to forward the same for his personal
consideration may only be an object of surmise in which the Court cannot
indulge. "Disbarment of lawyers is a proceeding that aims to purge the law
profession of unworthy members of the bar. It is intended to preserve the
nobility and honor of the legal profession."16 Surely, respondent lawyer's
failure or refusal to participate in the IBP-CBD proceedings does not hinder
the Court from determining the full extent of his liability and imposing an
appropriate sanction, if any.
After a judicious review of the records, the Court finds no reason to deviate
from the findings of the Investigating Commissioner with respect to
respondent lawyer's violation of Canons 1,17 16,18 17,19 and Rules 1.01,20
16.04,21 of the CPR.
In the case at bench, the complaint stemmed from the use by respondent
lawyer of his client's property. He had, indeed, come into possession of
valuable pieces of jewelry which he presented as security in a contract of
pledge. Complainant voluntarily and willingly delivered her jewelry worth
P135,000.00 to respondent lawyer who meant to borrow it and pawn it
thereafter. This act alone shows respondent lawyer's blatant disregard of Rule
16.04. Complainant's acquiescence to the "pawning" of her jewelry becomes
immaterial considering that the CPR is clear in that lawyers are proscribed
from borrowing money or property from clients, unless the latter's interests are
fully protected by the nature of the case or by independent advice. Here,
respondent lawyer's act of borrowing does not constitute an exception.
Respondent lawyer used his client's jewelry in order to obtain, and then
appropriate for himself, the proceeds from the pledge. In so doing, he had
abused the trust and confidence reposed upon him by his client. That he might
have
20 intended to subsequently pay his client the value of the jewelry is
inconsequential. What deserves detestation was the very act of his exercising
influence and persuasion over his client in order to gain undue benefits from
the latter's property. The Court has repeatedly emphasized that the relationship
between a lawyer and his client is one imbued with trust and confidence. And
as true as any natural tendency goes, this "trust and confidence" is prone to
abuse.22 The rule against borrowing of money by a lawyer from his client is
FIDUCIARY OBLIGATION OF A LAWYER
intended to prevent the lawyer from taking advantage of his influence over his
client.23 The rule presumes that the client is disadvantaged by the lawyer's
ability to use all the legal maneuverings to renege on his obligation. 24 Suffice it
to say, the borrowing of money or property from a client outside the limits laid
down in the CPR is an unethical act that warrants sanction.
Due to complainant's respect for respondent lawyer, she trusted his
representation that the subject jewelry would be redeemed upon maturity. She
accepted respondent lawyer's check, which was eventually dishonored upon
presentment. Despite notice of the dishonor, respondent lawyer did not take
steps to remedy the situation and, on the whole, reneged on his obligation,
constraining complainant to avail of legal remedies against him.
Given the circumstances, the Court does not harbor any doubt in favor of
respondent lawyer. Obviously, his unfulfilled promise to facilitate the
redemption of the jewelry and his act of issuing a worthless check constitute
grave violations of the CPR and the lawyer's oath. These shortcomings on his
part have seriously breached the highly fiduciary relationship between lawyers
and clients. Specifically, his act of issuing worthless checks patently violated
Rule 1.01 of Canon 1 of the CPR which requires that "[a] lawyer shall not
engage in unlawful, dishonest, immoral or deceitful conduct." This indicates a
lawyer's unfitness for the trust and confidence reposed on him, shows such
lack of personal honesty and good moral character as to render him unworthy
of public confidence, and constitutes a ground for disciplinary action, 25 and
thus seriously and irreparably tarnishes the image of the profession. 26 Such
conduct, while already off-putting when attributed to an ordinary person, is
much more abhorrent when exhibited by a member of the Bar.27 In this case,
respondent lawyer turned his back from the promise that he once made upon
admission to the Bar. As "vanguards of the law and the legal system, lawyers
must at all times conduct themselves, especially in their dealings with their
clients and the public at large, with honesty and integrity in a manner beyond
reproach."28
As to the penalty commensurate to respondent lawyer's actions, the Court
takes heed of the guidepost provided by jurisprudence, viz.: "Disbarment
should not be decreed where any punishment less severe, such as reprimand,
suspension, or fine, would accomplish the end desired. This is as it should be
considering the consequence of disbarment on the economic life and honor of
the erring person."29 Hence, caution is called for amidst the Court's plenary
power to discipline erring lawyers. In line with prevailing jurisprudence, 30 the
Court finds it proper to impose the penalty of three-year suspension against
respondent lawyer, with a stern warning that a repetition of any of the
infractions attributed to him in this case, or any similar act, shall merit a
heavier penalty.
Anent the monetary demands made by complainant, the Court reiterates the
rule that in disciplinary proceedings against lawyers, the only issue is whether
the officer of the court is still fit to be allowed to continue as a member of the
Bar.31 Thus, the Court is not concerned with the erring lawyer's civil liability
for money received from his client in a transaction separate, distinct, and not
intrinsically linked to his professional engagement. Accordingly, it cannot
order respondent lawyer to make the payment for the subject jewelry he
pawned, the value of which is yet to be determined in the appropriate
proceeding.
As to the return of acceptance fees, a clarification is in order. The Investigating
Commissioner erred in referring to them as "attorney's fees"
As to the charge that respondent abandoned the cases he
accepted after payment of attorney's fees, this commission is
not fully satisfied that the complainant was able to prove it
with substantial or clear evidence. It was not fully explained in
the complaint how or in what manner were the cases
"abandoned" by the respondent; and what prejudice was
caused to the complainant. This Commission noted that not a
single document or order coming from the court of
prosecutor's office was appended to the Complaint-Affidavit
that would at least apprise this body of what the respondent
actually did with the cases he represented. 32cralawlawlibrary
There is a distinction between attorney's fee and acceptance fee. It is well-
settled that attorney's fee is understood both in its ordinary and extraordinary
concept.33 In its ordinary sense, attorney's fee refers to the reasonable
compensation
21 paid to a lawyer by his client for legal services rendered.
FIDUCIARY OBLIGATION OF A LAWYER
Meanwhile, in its extraordinary concept, attorney's fee is awarded by the court
to the successful litigant to be paid by the losing party as indemnity for
damages.34 On the other hand, acceptance fee refers to the charge imposed by
the lawyer for merely accepting the case. This is because once the lawyer
agrees to represent a client, he is precluded from handling cases of the
opposing party based on the prohibition on conflict of interest. Thus, this
incurs an opportunity cost by merely accepting the case of the client which is
therefore indemnified by the payment of acceptance fee. Since the acceptance
fee only seeks to compensate the lawyer for the lost opportunity, it is not
measured by the nature and extent of the legal services rendered. 35
In the case at bench, the amounts of P20,000.00, P18,000.00, and P15,000.00,
respectively, were in the nature of acceptance fees for cases in which
respondent lawyer agreed to represent complainant. Despite this oversight of
the Investigating Commissioner, the Court affirms the finding that aside from
her bare allegations, complainant failed to present any evidence showing that
respondent lawyer committed abandonment or neglect of duty in handling of
cases. Hence, the Court sees no legal basis for the return of the subject
acceptance fees.
WHEREFORE, finding respondent Atty. Berlin R. Dela Cruz GUILTY of
violating Canons 1, 16, 17, and Rules 1.01 and 16.04 of the Code of
Professional Responsibility, the Court hereby SUSPENDS him from the
practice of law for THREE YEARS with a STERN WARNING
that a repetition of the same or similar act would be dealt with more severely.
Let copies of this decision be furnished the Bar Confidant to be entered in the
personal record of the respondent as a member of the Philippine Bar; the
Integrated Bar of the Philippines for distribution to all its chapters; and the
Office of the Court Administrator for circulation to all courts throughout the
country.
SO ORDERED