Canon 16 Full Cases

8/10/2019 Canon 16 Full Cases

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

A.M. No. 2361 February 9, 1989

LEONILA J. LICUANAN, complainant,vs.ATTY. MANUEL L. MELO, respondent.

R E S O L U T I O N

PER CURIAM:

Ads By softonicAn affidavit-complaint, dated November 11, 1981, was filed by Leonila J. Licuanan withtheOfficeof 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 anejectment case filed against her tenant, failed to remit to her the rentals collected by respondent ondifferent dates over a twelve-month period, much less did he report to her the receipt of saidamounts. It was only after approximately a year from actual receipt that respondent turned over hiscollections to complainant after the latter, through another counsel, acquired knowledge of thepayment and had demanded the same.

In hisCommenton the complaint, respondent admitted having received the payment of rentalsfrom complainant's tenant,Pineda,as alleged in the complaint, but explained that he kept thismatter from the complainant for the purpose of surprising her with his success in collecting therentals.

We forwarded the case to theOfficeof the Solicitor General, for investigation, report andrecommendation. Hearings were conducted and the parties presented their respective evidence.

After investigation, theGeneralsubmitted the followingFindingsand Recommendation:

Findings:

The issue to be resolved is whether there was unreasonable delay on the part of therespondent in accounting for the funds collected by him for his former client, thecomplainant herein, for which unprofessional conduct respondent should bedisciplined.

A lawyer, under his oath, pledges himself not to delay any man for money or maliceand is bound to conduct himself with all good fidelity to his clients. Under paragraph

11 of theCanonsof Legal Ethics, he is obligated to report promptly the money of
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client that has come to his possession and should not commingle it with his privateproperty or use it for his personal purpose without his client's consent viz:

Money of the client or other trust property coming into the possessionof the lawyer should be reported promptly, and except with theclient's know and consent should not be commingled with his private

or be used by him.

And paragraph 32 of theCanonsof Legal Ethics further requires a lawyer tomaintain a reputation for honesty and fidelity to private trust:

... But above all, a lawyer will find his highest honor in a deservedreputation for fidelity to private trust and to public duty, as an honestman 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 betweenLicuananand Melo at thetime the incident in question took place. The records disclose that on August 8, 1979,

respondent, asLicuanan's attorney, obtained judgment inLicuanan's favoragainst Aida Pineda whereby the latter was directed by theCourtof Manila topayLicuananall her monthly rentals from October, 1978 and succeeding monthsthereafter.

Ads By softonicWhen several months had elapsed without them hearing a wordfromPineda,respondent decided to send her a letter on February 4, 1980,demanding that she pay the monthly rental of her apartment otherwise he will beconstrained to take the necessary legal action against her to protect the interest ofhis client (Exhibit "A", p. 8, record). On February 11, 1980, Pineda yielded to the

demand ofMelo.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 paymentsfor 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 ofMarchand April, 1980 in the sum ofP360.00 (Exh. "C" p. 10, Ibid.). Not only that, respondent again received

fromPinedaon June 30, 1980 rental payments covering the months of May, Juneand July, 1980 in the total sum of P540.00 (Exh. "D" p. 11, Ibid.). And, on September29, 1980, he received and issued Pineda a receipt for P540.00 covering rentalpayments 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

fromPinedathe total sum of P720.00 covering the months of October, November,December, 1980 and January 1981 (Exh. "F", p. 12, Ibid.).

During the entire twelve-month period that respondent had been receiving the said

rental payments ofPineda,he did not bother to inform or report to complainantabout the said payments and instead unnecessarily retained the money. He allowedthe money to accumulate for a year and kept complainant in the dark as to theprogress of the case. He did not even attempt to tell her about the money that hadcome into his possession notwithstanding the fact that complainant used to call himand inquire regarding the case (pp. 14-15, tsn., Sept. 10, 1985).
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It was only when Atty. Ponciano B. Jacinto, the new counsel retained bycomplainant, wrote respondent a letter on May 4, 1981, advising him to surrender themoney to complainant that he accounted for it (Exh. "H", p. 15, Ibid.). But this wasrather late because as early as April 27, 1981, complainant, not knowing thatrespondent had been receiving the rental payments of Pineda, instituted anadministrative case against her (Aida Pineda) before the Chief of the Philippine

Tuberculosis Society accusing her of "moral turpitude" arising from her alleged failureto pay the rent of her apartment as ordered by the City Court of Manila in Civil CaseNo. 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 damagesbefore the then Court of First Instance of Manila, for she allegedly suffered mentalanguish, besmirched reputation, wounded feelings and social humiliation arising fromthe unfounded administrative case Licuanan filed against her (Aida Pineda), since asborne out by the records, she had been paying her obligation religiously to the lawyerof Licuanan, herein respondent (pp. 48-52, record). Clearly, this unfortunate incidentwould 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 ofcomplainant for a year merely because he wanted to surprise her with his success incollecting the rental payments from Pineda. On the contrary, it is very muchdiscernible that he did not surrender immediately the money to complainant becausehe was using it for his own benefit. Common sense dictates that by unnecessarilywithholding the money of complainant for such length of time, respondent deprivedher 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 andintegrity. He must know that the "highly fiduciary" and "confidential relation" ofattorney and client requires that the attorney should promptly account for all fundsand 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 SupremeCourt in the case of Fermina Legaspi Daroy, et al., vs. Atty. Ramon ChavesLegaspi,Adm. Case No. 936, July 25, 1975, 65 SCRA 304, to wit:

A lawyer, under his oath, pledges himself not to delay any man formoney or malice and is bound to conduct himself with all good fidelityto his clients. He is obligated to report promptly the money of hisclients that has come into his possession. He should not commingle itwith his private property or use it for his personal purposes withouthis client's consent. He should maintain a reputation for honesty andfidelity to private trust (Pars. 11 and 32, Canons of Legal Ethics).

Money collected by a lawyer in pursuance of a judgment in favor ofhis clients is held in trust and must be immediately turned over tothem(Aya vs. Bigonia, 57 Phil. 8, 11).

xxx xxx xxx

A lawyer may be disbarred for any deceit, malpractice or other gross misconduct inhis office as attorney or for any violation of the lawyer's oath (Ibid, sec. 27).


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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 professionalmisconduct. The fact that a lawyer has a lien for fees on money in his hands collected for his clientsdoes not relieve him from the duty of promptly accounting for the funds received. (Emphasis

supplied).

In fine, we are convinced that respondent is guilty of breach of trust reposed in himby his client. Not only has he degraded himself but as an unfaithful lawyer he hasbesmirched 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 bybecoming a defendant in a damage suit; thus, instead of being a help to his client, hebecame the cause of her misery. He, therefore, 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 dutyas a lawyer.

RECOMMENDATION

WHEREFORE, we respectfully recommend that respondent be suspended from thepractice of law for a period of not less than one (1) year, and that he be stronglyadmonished to strictly and faithfully observe his duties to his clients. (pp. 78-85,Rollo)


Manila

THIRD DIVISION

A.C. No. 6051 April 2, 2007

CELIA ARROYO-POSIDIO,Complainant,vs.ATTY. JEREMIAS R. VITAN, Respondent.

D E C I S I O N

YNARES-SANTIAGO, J .:

Ads By softonicIn a verified complaint1dated June 14, 2002, complainant Celia Arroyo-Posidio prayed forthe disbarment of respondentAtty.Jeremias R. Vitan on account of deceit, fraud, dishonesty andcommission of acts in violation of the lawyers oath.
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Complainant alleged that she engaged the services of respondent in Special Proceeding No. C-525,

entitled "Testate Estate of deceased Nicolasa S. de Guzman Arroyo ," filed before theCourtofCaloocan City. Complainant paid respondent legal fees in the amount of P20,000.00. However, onJune 6, 1990, respondent withdrew his appearance as counsel in the said case, thus complainantengaged the services of another lawyer.

Sometime in August 1996, respondent contacted complainant and showed her documentsconsisting of tax declarations of properties purportedly forming part of the estate of Nicolasa S. de

Guzman-Arroyo, but were not included in theInventoryof Properties for distribution in SpecialProceeding No. C-525. He convinced complainant to file another case to recover her share in thealleged undeclared properties and demanded P100,000.00 as legal fees therefor. After severalmonths, however, respondent failed to institute any action. Complainant decided to forego the filingof the case and asked for the return of the P100,000.00, but respondent refused despite repeateddemands.

Consequently, complainant filed an action for sum of money and damages against respondentbefore Branch 81, Metropolitan Trial Court, Valenzuela City which was docketed as Civil Case No.7130. On March 31, 1999, the trial court rendered a decision, the dispositive portion of which states:

WHEREEFORE, premises considered, judgment is hereby rendered in favor of the plaintiff andagainst the defendant ordering the latter to:

1. To pay plaintiff the sum of P100,000.00 with interest at the rate of 12% per annum fromSeptember 7, 1996 until the same is fully paid and/or satisfied;

2. To pay plaintiff the amount of P8,000.00 as and for attorneys fees; and

3. To pay the cost of suit.2

Respondent appealed to theCourtwhich affirmed3theCourtdecision in toto.Thus, complainant

filed a Motion forIssuanceof a Writ ofExecutionwhich was granted on March 19, 2001.4

To satisfy the judgment against him, respondent issuedBankcheck number 03387425dated May31, 2001 in the amount of P120,000.00 in favor of complainant. However, upon presentment forpayment, the check was dishonored for the reason: ACCOUNT CLOSED. Despite a written notice ofdishonor and demand6dated September 3, 2001, respondent refused to honor his obligation. Hence,this administrative complaint charging respondent with deceit, fraud, dishonesty and commission ofacts in violation of the lawyers oath.

Ads By softonicRespondent denied complainants allegations. He admitted having received the amountof P100,000.00 but claimed that the same was partial payment for his services in SpecialProceeding Case No. C-525. Further, he alleged that he had already paid complainant the amount

of P150,000.00 as evidenced by a Receipt & Quitclaim7dated August 10, 2000.

On March 1, 2004, the case was referred to theBarof the Philippines (IBP) for investigation, reportand recommendation. On January 15, 2006, theCommissionersubmitted his Report8findingrespondent guilty of violating the lawyers oath and theCodeof Professional Responsibility indefrauding his client and issuing a check without sufficient funds to cover the same. Thus

4.3 x x x
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Noteworthy is the factual finding of the court thatComplainanthad already paid respondent theamount of P20,000.00 for services he had rendered inProceedingcase No. C-525. Thus,Respondents claim that theP100,000.00 given to him byComplainantallegedly for payment ofhis legal services in theProceedingis not correct. The MTC decision likewise foundthatRespondentrequested payment of the P100,000.00 in consideration for his

representingComplainantin the additional claims to be filed against the estate of Nicolasa S.deArroyo.Respondent, however, failed to file the claims. Hence, complainant demanded thereturn of the P100,000.00. The MTC decision has already become final and executory as evidenced

by a copy of theOrderof Writ ofExecutionissued by theCourt.

4.4 x x x

4.5 As already pointed out, the RTC had rendered a decision affirming in toto the decision of theMTC that theP100,000.00 given by Complainant to Respondent is not for the payment of hisprevious services rendered in the Special Proceeding case No. C-525 but rather as payment forfiling of an additional claim from the estate of the late Nicolasa S. de Guzman Arroyo. It is clear thatthere is identity of parties in the civil case for recovery of sum of money and damages and in the

administrative case for disbarment filed by herein Complainant. Thus, while the causes of action aredifferent in the two cases, there is conclusiveness on the factual circumstances surroundingComplainants delivery of theP100,000.00 to Respondent. Respondent[s] bare assertion that hisreceipt of theP100,000.00 was for payment of legal services previously rendered in the SpecialProceeding case No. C-525 does not hold water and cannot overturn the factual conclusionsreached by the MTC in its decision.

4.6 A lawyer may be suspended or disbarred for deceit or misrepresentation to the prejudice of or asa means to defraud his client. In the case of Munar v. Flores, the Supreme Court suspended anattorney who deceitfully defrauded a client of a sum of money allegedly representing cost offees and other miscellaneous expenses for a suit to be filed but which promised suit he neverfiled nor did he return the amount despite demands. Failure on the part of the lawyer, upondemand, to return to his client the funds or property held by him on the latters behalf gives rise to

the presumption that he has appropriated the same for his own use to the prejudice of and inviolation of the trust reposed in him by his client.

It is clear in this case that Complainant made demands for the return of the P100,000.00, but thesame remained unanswered by Respondent. This prompted Complainant to file a civil case forcollection of sum of money and damages. Worse, after the decision was rendered in favor ofComplainant, and a writ of execution issued, Respondent issued a check purportedly to settle thecase only to have the check bounce for insufficiency of funds. The conversion of the clients propertyis a gross violation of general morality as well as professional ethics, and deserves severepunishment. This conversion of clients property is a ground for disciplinary action and presupposesfraudulent intent on the part of the lawyer. In the case of Manalato v. Reyes, the Supreme Courtemphasized that fraudulent intent may be inferred from the lawyers refusal to make restitution after

demand. Such circumstance is present in this case.

x x x x

In view of the foregoing, this Commissioner respectfully recommends that a penalty ranging fromsuspension for a period of six (6) months to one (1) year at the discretion of the Board be imposedwith warning that repetition of similar conduct in the future will warrant a more severe penalty.9
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The IBP Board of Governors adopted the findings of the Investigating Commissioner but modifiedthe penalty from suspension to reprimand10with stern warning that a similar misconduct will warranta more severe penalty.

We agree with the findings of the IBP. However, we find that the penalty of reprimand is notcommensurate to the gravity of wrong committed by respondent.

The ethics of the legal profession rightly enjoin every lawyer to act with the highest standards oftruthfulness, fair play and nobility in the course of his practice of law.11Lawyers are prohibited fromengaging in unlawful, dishonest, immoral or deceitful conduct12and are mandated to serve theirclients with competence and diligence.13To this end, nothing should be done by any member of thelegal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity,honesty, and integrity of the profession.14

Rule 16.01, Canon 16 of the Code of Professional Responsibility requires the lawyer to account forall money or property collected or received for or from his client. Where a client gives money to hislawyer for a specific purpose, such as to file an action, appeal an adverse judgment, consummate asettlement, or pay the purchase price of a parcel of land, the lawyer should, upon failure to take such

step and spend the money for it, immediately return the money to his client .

15

In the instant case, respondent received the amount of P100,000.00 as legal fees for filing additionalclaims against the estate of Nicolasa S. de Guzman Arroyo. However, he failed to institute an action,thus it was imperative that he immediately return the amount to complainant upon demand therefor.Having received payment for services which were not rendered, respondent was unjustified inkeeping complainants money. His obligation was toimmediately return the said amount. His refusalto do so despite complainants repeated demands constitutes a violation of his oath where hepledges not to delay any man for money and swears to conduct himself with good fidelity to hisclients.

A lawyer should refrain from any action whereby for his personal benefit or gain, he abuses or takesadvantage of the confidence reposed in him by his client.16A lawyer should be scrupulously carefulin handling money entrusted to him in his professional capacity, because a high degree of fidelityand good faith on his part is exacted.17In Barnachea v. Quiocho,18the Court suspended a lawyerfrom the practice of law for one year for his failure to return clients funds which were given to him forthe expenses for the transfer of title over real property and in payment for his legal services. TheCourt held:

A lawyer is obliged to hold in trust money or property of his client that may come to his possession.He is a trustee to said funds and property. He is to keep the funds of his client separate and apartfrom his own and those of others kept by him. Money entrusted to a lawyer for a specific purposesuch as for the registration of a deed with the Register of Deeds and for expenses and fees for thetransfer of title over real property under the name of his client if not utilized, must be returnedimmediately to his client upon demand therefor. The lawyers failure to return the money of his

client upon demand gave rise to a presumption that he has misappropriated said money inviolation of the trust reposed on him. The conversion by a lawyer [of] funds entrusted to himby his client is a gross violation of professional ethics and a betrayal of public confidence inthe legal profession.19(Emphasis supplied)

Respondent must likewise be reminded that a lawyer should, at all times, comply with what the courtlawfully requires.20It bears stressing that the judgment against him in Civil Case No. 7130 has longbecome final and executory. However, up to this date, he has failed to comply with the order to pay
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complainant the amount ofP100,000.00 as well as interest and attorneys fees. His refusal to complywith the said order constitutes a willful disobedience to the courts lawful orders.

Lawyers are particularly called upon to obey court orders and processes and are expected to standforemost in complying with court directives being themselves officers of the court.21And whilerespondent issued a check in the amount of P120,000.00 in favor of complainant, purportedly to

satisfy the judgment against him, the check was later dishonored for having been drawn against aclosed account. Respondent never denied the issuance of the check or refuted complainantsallegations regarding the same. Neither did he question the veracity of complainants evidence whichconsisted of the check itself.

Needless to say, the act of issuing a bouncing check further compounded respondents infractions.Time and again, we have held that the act of a lawyer in issuing a check without sufficient funds tocover the same constitutes willful dishonesty and immoral conduct as to undermine the publicconfidence in law and lawyers.22Such conduct indicates the respondents unfitness for the trust andconfidence reposed on him, shows such lack of personal honesty and good moral character as torender him unworthy of public confidence and constitutes a ground for disciplinary action.23

It is clear from the foregoing that respondent fell short of the exacting moral and ethical standardsimposed on members of the legal profession. Respondents refusal to return complainants moneyupon demand, his failure to comply with the lawful orders of the trial court, as well as the issuance ofa bouncing check, reveal his failure to live up to his duties as a lawyer in consonance with thestrictures of his oath and the Code of Professional Responsibility.

It cannot be overemphasized that membership in the legal profession is a privilege. Whenever it ismade to appear that an attorney is no longer worthy of the trust and confidence of the public, itbecomes not only the right but also the duty of this Court, which made him one of its officers andgave him the privilege of ministering within its Bar, to withdraw the privilege.24

The Court believes that a penalty of suspension is called for under the circumstances. In Espiritu v.Cabredo IV,25a lawyer was suspended for one year for failure to account for and return the amountof P51,161.00 to his client. In Reyes v. Maglaya,26a lawyer was suspended for one year for failure toreturn to his client the amount ofP1,500.00 despite numerous demands. Likewise, in Castillo v.Taguines,27a lawyer was suspended for one year for failure to return to his client the amountof P500.00 and for issuing a bouncing check.

WHEREFORE, respondent Atty. Jeremias R. Vitan is SUSPENDED from the practice of law for aperiod of one (1) year effective from notice, with a STERN WARNING that a repetition of the sameor similar acts will be dealt with more severely.

Let copies of this Decision be entered in the record of the respondent in the Office of the BarConfidant, and served on the Integrated Bar of the Philippines, as well as on the Court Administratorwho shall circulate it to all the courts for their information and guidance.

SO ORDERED.

CONSUELO YNARES-SANTIAGOAssociate Justice

WE CONCUR:
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MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAsscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

Footnotes1Rollo, pp. 1-4.

2Id. at 5.

3Id.

4Id. at 9.

5Id. at 8.

6Id. at 10-11.

7Id. at 33.

8Id. at 70-82. Penned by Investigating Commissioner Leland R. Villadolid, Jr.

9

Id. at 76-81.10Id. at 69.

11Ong v. Unto, 426 Phil. 531, 540 (2002).

12Rule 1.01, Canon I, Code of Professional Responsibility.

13Canon 18, Code of Professional Responsibility.

14Ducat, Jr. v. Villalon Jr., 392 Phil. 394, 402 (2000).

15Schulz v. Flores, 462 Phil. 601, 612 (2003).

16Villanueva v. Ishiwata, A.C. No. 5041, November 23, 2004, 443 SCRA 401, 405.

17Navarro v. Meneses III, 349 Phil. 520, 527 (1998).

18447 Phil. 67 (2003).

19Id. at 75.

20Frias v. Lozada, A.C. No. 6656, December 13, 2005, 477 SCRA 393, 402.

21Sibulo v. Ilagan, A.C. No. 4711, November 25, 2004, 444 SCRA 1, 7.

22Barrios v. Martinez, A.C. No. 4585, November 12, 2004, 442 SCRA 324, 335.

23Cuizon v. Macalino, Adm. Case No. 4334, July 7, 2004, 433 SCRA 479, 484.

24Malhabour v. Atty. Sarmiento, A.C. No. 5417, March 31, 2006, 486 SCRA 1, 9.

25443 Phil. 24 (2003).

26313 Phil. 1 (1995).27

325 Phil. 1 (1996).


Manila

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:
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Ads By softonicOn December 17, 1999, complainant Daniel Lemoine, a French national, filed a verifiedcomplaint1against respondentAtty.Amadeo E. Balon, Jr., for estafa and misconduct beforetheBarof the Philippines. The case, docketed as CBD Case No. 99-679, was referred bytheCommissionon Bar Discipline to anInvestigatorfor investigation, report andrecommendation.

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 hadnot before met, that for his legal services he was charging "25% of the actual amount beingrecovered. . . payable upon successful recovery;" an advance payment of P50,000.00 "to becharged [to complainant] to be deducted from whatever amount [would] be successfully collected;"P1,000.00 "as appearance and conference fee for each and every court hearings, conferencesoutside our law office and meetings before theOfficeof the Insurance Commission which will bealso 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 becharged to complainants account which would be reimbursed upon presentation of statement ofaccount.

The letter-proposal of respondent regarding attorneys fees does not bear complainants conformity,he not having agreed therewith.

It appears thatInsurancefinally offered to settle complainants claim, for by letter4of December9, 1998addressed to it, respondent confirmed his acceptance of its offer to settle the claim ofcomplainant "in an ex-gratiabasis of 75% of his policy coverage which is therefore FIVE HUNDREDTWENTY FIVE THOUSAND (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 undatedPowerof Attorney6authorizing respondentand/or Garcia to bring any action againstInsurancefor the satisfaction of complainants claim aswell as to "negotiate, sign, compromise[,] encash and receive payment" from it. The Special Power

ofAttorneywas later dated December 23, 1998 on which same dateInsuranceissued aChinabank Check No. 841172 payable to complainant in the amount of P525,000.00 as fullsettlement of the claim.7The check was received by respondent.

In the meantime, complainant returned to thePhilippinesin early January 1999 but left again onthe 24th of the same month.8On inquiry about the status of his claim,Garciaechoed tocomplainant what respondent had written him (Garcia) in respondents letter9of March 26, 1999 that

the claim was still pending withInsuranceand that it was still subject of negotiations inwhichInsuranceoffered to settle it for P350,000.00 representing fifty percent thereof. In the sameletter to Garcia, respondent suggested the acceptance of the offer of settlement to avoid a protractedlitigation.
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Ads By softonicOn December 6, 1999, on complainants personal visit to the office ofInsurance,he wasinformed that his claim had long been settled via a December 23, 1998 check given to respondentthe year before.10Complainant lost no time in going to the law office of respondent who was notaround, however, but whom he was able to talk by telephone during which he demanded that he turnover the proceeds of his claim.11

Respondent thereupon faxed to complainant a December 7, 1999 letter12wherein he acknowledgedhaving in his possession the proceeds of the encashed check which he retained, however, asattorneys lien pending complainants payment 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 respondentsoffice. Respondent winded up his letter as follows, quoted verbatim:

We would like to make it clear that we cannot give you the aforesaid amount until and unless ourattorneys fees will be forthwith agreed and settled.In the same manner, should you be barbaric anduncivilized with your approached, we will not hesitate to make a proper representation with theBureau of Immigration and Deportation for the authenticity of your visa, Department of Labor andEmployment 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 caseagainst you. We will rather suggest if you could request your lawyer to just confer with us for thepeaceful settlement of this matter. (Underscoring and emphasis supplied)

As despite written demands,13respondent refused to turn over the proceeds of the insurance claimand to acknowledge the unreasonableness of the attorneys fees he was demanding, complainantinstituted the administrative action at bar on December 17, 1999.

In his Complaint-Affidavit, complainant alleged that "[i]t appears that there was irregularity with thecheck," it having been 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,15complainant decriedrespondents continued possession of the proceeds of his claim 16and his misrepresentations that therecovery thereof was fraught with difficulties.17

In his Counter-Affidavit18of February 18, 2000, respondent asserted that his continued retention ofthe proceeds of complainants claim is in lawful exercise of his lien for unpaid attorneys fees. Heexpressed 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 bypracticing lawyers in the insurance industry as the basis of the amount of his attorneys fees,19whichto him was justified in the absence of an attorney-client contract between him and complainant, thelatter having rejected respondents letter-proposal of October 21, 1998.20

Respondent also highlighted the value of the time and efforts he extended in pursuing complainantsclaim and the expenses he incurred in connection therewith. He went on to assert that his inability tocontact complainant whose whereabouts he did not know prompted him to encash the check and

keep the proceeds thereof in conformity with thePowerof Attorney executed in his favor.21

During the hearings conducted by the IBP Investigator, complainant echoed his allegations in hisComplaint-Affidavit and stressed that he turned down as unreasonable respondents proposal in his
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October 21, 1998 letter that he be paid 25% of the actual amount collected for his legalservices.22And he presented documentary evidence, including the March 26, 1999 letter ofrespondent informing his co-attorney-in-fact Garcia of the supposedly still unrecovered claim and

suggesting acceptance of the purported offer ofInsuranceto settle complainants claim atP350,000.00.

Explaining how his above-mentioned March 26, 1999 letter toGarciacame about, respondentdeclared that it was made uponGarcias request, intended for a certain Joel Ramiscal (Ramiscal)who was said to beGarcias business partner.23

Respondent later submitted a June 13, 2001 Supplement24to his Counter-Affidavit reiterating hisexplanation that it was on Garcias express request that he wrote the March 26, 1999 letter, whichwas directed to the fax number of Ramiscal. 1vvphi1.nt

Additionally, respondent declared that in the first week of May 1999, on the representation of Garciathat he had talked to complainant about respondents retention of fifty percent (50%) of theinsurance proceeds for professional fees less expenses,25he gave Garcia, on a staggered basis, thetotal amount of P233,000.00 which, so respondent averred, is the amount of insurance claim

complainant is entitled to receive less attorneys fees and expenses.26Thus, respondent claimed thathe 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(respondents) former address through his executive secretary Sally I. Leonardo; the amount ofP20,000.00 at the office of his (respondents) former employer Commonwealth Insurance Companythrough his subordinate Glen V. Roxas; and several other payments at Dulcinea, and at ManilaIntercontinental Hotels coffee shop sometime inOctober 1999.27Respondent submitted theseparate 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 hisservices, insisting that since there had been no clear-cut agreement on his professional fees and itwas through him that Metropolitan Insurance favorably reconsidered its initial rejection ofcomplainants 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, incurredrepresentation expenses of P35,000.00, entertainment and other representation expenses onvarious occasions of P10,000.00, and transportation and gasoline expenses and parking fees ofP5,000.00;31and that his retention of complainants money wasjustified in light of his apprehensionthat complainant, being an alien without a valid working permit in the Philippines, might leave thecountry anytime without settling his professional fees.32

The Investigating Commissioner, by Report and Recommendation33of October 26, 2001, foundrespondent guilty of misconduct and recommended that he be disbarred and directed to immediatelyturn over to complainant the sum of P475,000.00 representing the amount of the P525,000.00insurance 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:
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RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report andRecommendation of the Investigating Commissioner of the above-entitled case, herein made part ofthis Resolution/Decision as Annex "A"; and, finding the recommendation fully supported by theevidence on record and the applicable laws and rules, with modification, and consideringrespondents dishonesty which amounted to grave misconduct and grossly unethical behavior whichcaused 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) monthswith the directive toturn over the amount of Five Hundred Twenty Five Thousand (P525,000.00) Pesos to thecomplainant without prejudice to respondents right to claim attorneys fees which he may collect inthe proper forum. (Underscoring supplied)

The records of the case are before this Court for final action.

Respondent, by a Motion for Reconsideration35filed with this Court, assails the InvestigatingCommissioners Report and Recommendation as not supported by clear, convincing and satisfactoryproof. He prays for the reopening of the case and its remand to the Investigator so that Garcia canpersonally appear for his (respondents) confrontation.

There is no need for a reopening of the case. The facts material to its resolution are either admittedor documented.

This Court is in full accord with the findings of the IBP Investigator that respondent violated thefollowing 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 transactionswith his clients.

RULE 15.06 - A lawyer shall not state or imply that he is able to influence any public official, tribunalor legislative body.

xxx

CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come intohis possession.

RULE 16.01 - A lawyer shall account for all money or property collected or received for or from theclient.

RULE 16.02 - A lawyer shall keep the funds of each client separate and apart from his own andthose 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 necessaryto satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shallalso have a lien to the same extent on all judgments and executions he has secured for his client asprovided for in the Rules of Court.
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xxx

CANON 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust andconfidence in him.

xxx

RULE 18.04 - A lawyer shall keep the client informed of the status of his case and shall respondwithin a reasonable time to the clients request for informat ion.

xxx

RULE 21.02 - A lawyer shall not, to the disadvantage of his client, use information acquired in thecourse of employment, nor shall he use the same to his advantage or that of a third person, unlessthe client with full knowledge of the circumstances consents thereto.

Specifically with respect to above-quoted provision of Canon 16 of the Code of ProfessionalResponsibility, 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 clientthat he may come to possess. This commandment entails certain specific acts to be done by alawyer such as rendering an accounting of all money or property received for or from the client36aswell as delivery of the funds or property to the client when due or upon demand.37Respondentbreached this Canon when after he received the proceeds of complainants insurance claim, he didnot report it to complainant, who had a given address in Makati, or to his co-attorney-in-fact Garciawho was his contact with respect to complainant.

In fact, long after respondent received the December 23, 1998 check for P525,000.00 he, by hisletter of March 26, 1999 to Garcia, had even the temerity to state that the claim was still pending andrecommend "acceptance of the 50% offer . . . which is P350,000.00 pesos." His explanation that heprepared 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 he received and held for the benefit of hisclient, he committed professional misconduct.38Such misconduct is reprehensible at a greaterdegree, for it was obviously done on purpose through the employment of deceit to the prejudice ofcomplainant who was kept in the dark about the release of the check, until he himself discovered thesame, 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 offidelity, loyalty and devotion to the clients cause but also degrades himself and besmirches the fa irname of an honorable profession.39

That respondent had a lien on complainants funds for his attorneys fees did not relieve him of hisduty to account for it.40The lawyers continuing exercise of his retaining lien presupposes that theclient agrees with the amount of attorneys fees to be charged. In case of disagree ment or when theclient contests that amount for being unconscionable, however, the lawyer must not arbitrarily applythe funds in his possession to the payment of his fees.41He can file, if he still deems it desirable, thenecessary 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 forjudicial determination so that his and complainants sharp disagreement thereon could have been
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put to an end. Instead, respondent stubbornly and in bad faith held on to complainants funds withthe obvious aim of forcing complainant to agree to the amount of attorneys fees sought. This is anappalling abuse by respondent of the exercise of an attorneys retaining lien which by no means isan absolute right and cannot at all justify inordinate delay in the delivery of money and property tohis client when due or upon demand.

Respondent was, before receiving the check, proposing a 25% attorneys fees.After he received thecheck 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 hisfees after the lapse of about one year when all the while he has been in custody of the proceeds ofthe check defies comprehension. At any rate, it smacks of opportunism, to say the least.

As for respondents claim in hisJune 2001 Supplement to his Counter-Affidavit that he had onseveral occasions from May 1999 to October 1999 already delivered a total of P233,000.00 out ofthe insurance proceeds to Garcia in trust for complainant, this does not persuade, for it is bereft ofany written memorandum thereof. It is difficult to believe that a lawyer like respondent could haveentrusted 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 complainantunequivocally contained his express admission that the total amount of P525,000.00 was in hiscustody. 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 andmerit no consideration.

The proven ancillary charges against respondent reinforce the gravity of his professionalmisconduct.

The intercalation of respondents name to the Chinabank check that was issuedpayablesolely in favor ofcomplainant as twice certified by Metropolitan Insurance44is clearly a brazen act offalsification of a commercial document which respondent resorted to in order to encash the check.

Respondents threat in his December 7, 1999letter to expose complainant to possible sanctionsfrom certain government agencies with which he bragged to have a "good network" reflects lack ofcharacter, self-respect, and justness.

It bears noting that for close to five long years respondent has bee n in possession of complainantsfunds 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, his receipt of the funds and his tenaciouscustody thereof in a grossly oppressive manner point to his lack of good moral character. Worse, byrespondents turnaround in his Supplement to his Counter-Affidavit that he already delivered tocomplainants friend Garcia the amount of P233,000.00 which, so respondent claims, is all thatcomplainant 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, andgives rise to the conclusion that he has misappropriated them.45

In fine, by respondents questioned acts, he has shown that he is no longer fit to remain a member ofthe noble profession that is the law.

WHEREFORE, respondent Atty. Amadeo E. Balon, Jr., is found GUILTY of malpractice, deceit andgross misconduct in the practice of his profession as a lawyer and he is hereby DISBARRED. The
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Office of the Clerk of Court is directed to strike out his name from the Roll of Attorneys and to informall courts and the Integrated Bar of the Philippines of this Decision.

Respondent is ordered to turn over to complainant, Daniel Lemoine, the amount of P525,000.00within thirty (30) days from notice, without prejudice to whatever judicial action he may take torecover 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.

Footnotes1

Rollo at 1-4.2Rollo at 46.3Id. at 49-50.

4Id. at 19.

5TSN, May 9, 2000, pp. 4-6.

6Rollo at 7-8.

7Id. at 10.

8TSN, May 9, 2000, p. 7.

9Rollo at 67-68.

10Rollo at 1.

11Rollo at 1 and 3.

12Id. at 11-13.

13Id. at 20, 21, and 23.

14Rollo at 3.

15Id. at 2.

16Id .at 2-3.

17Id .at 1 and 3.

18Id .at 41-45.19Id. at 41 and 43.

20Id. at 43.

21Rollo at 43.

22TSN, May 9, 2000, pp. 12-13.

23TSN, May 25, 2001, pp. 6-7.

24Rollo at 88-92.

25Rollo at 89-90.

26Id. at 88 and 90.

27Id. at 90.

28Id. at 95-96.

29Id. at 88 and 90.

30Rollo at 90-91.

31Id. at 91.

32Id. at 90.

33Rollo at 111-135.

34Id. at 109-110.

35Rollo at 137-159.36

Code of Professional Responsibility, Rule 16.01.37

Id. at Rule 16.03.38

Daroy v. Legaspi, 65 SCRA 304, 312 [1975].39

Agpalo, Comments on the Code of Professional Responsibility and the Code of Judicial Conduct, p. 410 [2001].40

Tanhueco v. De Dumo, 172 SCRA 760 [1989].41

J.K. Mercado and Sons Agricultural Enterprises, Inc. v. De Vera,317 SCRA 339 [1999].42

Ibid.43

Rollo at 43.44

Rollo at 18 and 102.45

Castillo v. Taguines, 254 SCRA 554 [1996].
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Canon 16 Full Cases

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