DOMINADOR P. BURBE VS ATTY. ALBERTO C.

MAGULTA
AC NO. 99-634, June 10, 2002, THIRD DIVISION, (Panganiban, J.)

FACTS:

On September 1998, Atty. Magulta agreed to represent Mr. Burbe in a money claim and possible
civil case against certain parties for breach of contract. Consequent to such agreement, Magulta prepared
the demand letter some other legal papers. However, since Burbe failed to secure a settlement of the
dispute, Magulta suggested filing a complaint to which Burbe agreed and paid P25,000 as filing fee. A
week later, Magulta informed Burbe that the case has been filed in court and to wait for a notice of its
progress. Months passed but there seemed to be no progress in the case. Upon inquiry, Magulta kept on
informing him that the court personnel has not yet acted on his case.

Burbe decided to go to the Office of the Clerk of Court with a copy of the complaint to verify the
progress of the case but was told that there was no record of a case filed by Atty. Magulta. Burbe
confronted Magulta at his office where he continued to lie with the excuse that it was the court personnel
who kept delaying his case. Only upon showing a certification that no such case was filed did he admit
that he did not file the case because he had used the money for his own purpose. He offered to reimburse
the amount by issuing 2 checks in the amounts of P12,000 and P8,000 which Burbe accepted.

ISSUE:

Whether or not Atty. Alberto Magulta is liable for misappropriation of funds given to him for the filing
fee?

HELD:

Yes. Rule 16.01 of the Code of Professional Responsibility states that lawyers shall hold in trust
all moneys of their clients and properties that may come into their possession.

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. It may be true that they have a lien
upon the clients funds, documents and other papers that have lawfully come into their possession; that
they may retain them until their lawful fees and disbursements have been paid; and that they may apply
such funds to the satisfaction of such fees and disbursements. However, these considerations do not
relieve them of their duty to promptly account for the moneys that they received. Their failure to do so
constitutes professional misconduct. In any event, they must still exert all effort to protect their clients
interest within the bounds of the law.

Respondent fell short of this standard when he converted into his legal fees the filing fee
entrusted to him by his client and thus failed to file the complaint promptly. The fact that the former
returned the amount does not exculpate him from his breach of duty.

WHEREFORE, Atty. Alberto C. Magulta is found guilty of violating Rules 16.01 and 18.03 of the Code
of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of one
(1) year, effective upon his receipt of this Decision.