SC disciplines lawyer who fails to return client's money
The Supreme Court has held that "any money collected for the client or other trust property coming into the lawyer's possession should promptly be reported by him [or her]."[1] ( Rule 16.03 under Canon 6 of the Code of Professional Responsibility provides that:
In several cases, the Supreme Court disciplined lawyers who failed or refused to remit amounts received for and on behalf of their clients. "The penalty for violation of Canon 16 of the Code of Professional Responsibility usually ranges from suspension for six months, to suspension for one year, or two years, and even disbarment[,]"[2] depending on the circumstances of each case.
In Villanueva v. Atty. Ishiwata,[3] respondent received four checks totalling P225,000.00 from his client's employer after signing a Quitclaim and Release pursuant to their compromise agreement.[4] Despite full payment of settlement award, respondent only remitted P45,000.00 to his client and refused to deliver the balance.[5] Respondent explained that he delivered P90,000.00 to his client's wife, but his secretary misplaced the signed receipts, and he deducted his 25% attorney's fees of P56,250.00 from the award.[6] The balance left was only P750.00.[7] The Supreme Court found Atty. Ishiwata guilty of violating Canon 16 of the Code of Professional Responsibility, suspended him from the practice of law for one (1) year, and ordered him to restitute to complainant the amount of P154,500.00 representing the balance after P45,000.00 and the 10% attorney's fees had been deducted from the settlement award.[8]
In Aldovino v. Atty. Pujalte, Jr.,[9] respondent received P1,001,332.26 from the Branch Clerk of Court corresponding to the six shares of his clients in the estate of their deceased mother, but respondent only delivered P751,332.26 to his clients.[10] Respondent explained that he deducted P250,000.00 as his attorney's fees, while complainants countered that respondent could only retain P14,000.00 as they already paid him P86,000.00 for his services.[11] The Supreme Court found Atty. Pujalte, Jr. guilty of violating Canon 16 of the Code of Professional Responsibility, suspended him from the practice of law for one (1) year, and ordered him to return to complainants the amount of P236,000.00.[12]
In Almendarez, Jr. v. Atty. Langit,[13] respondent received P255,000.00 from the Officer-in-Charge Clerk of Court representing the monthly rentals deposited by the other party in the ejectment case respondent handled for his client.[14] Respondent did not inform his client of this transaction and failed to reply to the final demand letter for accounting.[15] Respondent did not file an Answer to the administrative Complaint despite notice, and failed to appear at the mandatory conference.[16] The Supreme Court found Atty. Langit guilty of violating Canons 1, 11, 16, and 17 of the Code of Professional Responsibility, suspended him from the practice of law for two (2) years, and ordered him to restitute to complainant the amount of P255,000.00 with 12% interest per annum.[17]
In Bayonla v. Reyes,[18] respondent should have delivered to her clients the amount of P123,582.67—the net amount of Bayonla's share in the expropriation compensation after deducting respondent's 40% share as attorney's fees—but respondent only delivered P79,000.00 and refused to remit the P44,582.67 shortage.[19] The Supreme Court found Atty. Reyes guilty of violating Rules 16.01 and 16.03 of the Code of Professional Responsibility, suspended her from the practice of law for two (2) years, ordered her to pay complainants the amount of P44,582.67 with 12% interest per annum, and render accounting and inventory.[20]
In Jinon v. Jiz,[21] respondent received P45,000.00 from his client for transfer of title expenses.[22] His client later learned that respondent had been collecting the rentals from the property amounting to P12,000.00, yet respondent only turned over P7,000.00.[23] Complainant terminated respondent's legal services and demanded the return of the amounts.[24] Respondent countered that his legal services covered negotiation and sale of the property for a fee of P75,000.00.[25] The Supreme Court found Atty. Jiz guilty of violating Rules 16.01, 16.03, and 18.03 of the Code of Professional Responsibility, suspended him from the practice of law for two (2) years, and ordered him to pay complainant the amount of P45,000.00 with 6% legal interest per annum from date of demand until finality of Decision, then 12% until fully paid.[26]
CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.
. . . .
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.
In several cases, the Supreme Court disciplined lawyers who failed or refused to remit amounts received for and on behalf of their clients. "The penalty for violation of Canon 16 of the Code of Professional Responsibility usually ranges from suspension for six months, to suspension for one year, or two years, and even disbarment[,]"[2] depending on the circumstances of each case.In Villanueva v. Atty. Ishiwata,[3] respondent received four checks totalling P225,000.00 from his client's employer after signing a Quitclaim and Release pursuant to their compromise agreement.[4] Despite full payment of settlement award, respondent only remitted P45,000.00 to his client and refused to deliver the balance.[5] Respondent explained that he delivered P90,000.00 to his client's wife, but his secretary misplaced the signed receipts, and he deducted his 25% attorney's fees of P56,250.00 from the award.[6] The balance left was only P750.00.[7] The Supreme Court found Atty. Ishiwata guilty of violating Canon 16 of the Code of Professional Responsibility, suspended him from the practice of law for one (1) year, and ordered him to restitute to complainant the amount of P154,500.00 representing the balance after P45,000.00 and the 10% attorney's fees had been deducted from the settlement award.[8]
In Aldovino v. Atty. Pujalte, Jr.,[9] respondent received P1,001,332.26 from the Branch Clerk of Court corresponding to the six shares of his clients in the estate of their deceased mother, but respondent only delivered P751,332.26 to his clients.[10] Respondent explained that he deducted P250,000.00 as his attorney's fees, while complainants countered that respondent could only retain P14,000.00 as they already paid him P86,000.00 for his services.[11] The Supreme Court found Atty. Pujalte, Jr. guilty of violating Canon 16 of the Code of Professional Responsibility, suspended him from the practice of law for one (1) year, and ordered him to return to complainants the amount of P236,000.00.[12]
In Almendarez, Jr. v. Atty. Langit,[13] respondent received P255,000.00 from the Officer-in-Charge Clerk of Court representing the monthly rentals deposited by the other party in the ejectment case respondent handled for his client.[14] Respondent did not inform his client of this transaction and failed to reply to the final demand letter for accounting.[15] Respondent did not file an Answer to the administrative Complaint despite notice, and failed to appear at the mandatory conference.[16] The Supreme Court found Atty. Langit guilty of violating Canons 1, 11, 16, and 17 of the Code of Professional Responsibility, suspended him from the practice of law for two (2) years, and ordered him to restitute to complainant the amount of P255,000.00 with 12% interest per annum.[17]
In Bayonla v. Reyes,[18] respondent should have delivered to her clients the amount of P123,582.67—the net amount of Bayonla's share in the expropriation compensation after deducting respondent's 40% share as attorney's fees—but respondent only delivered P79,000.00 and refused to remit the P44,582.67 shortage.[19] The Supreme Court found Atty. Reyes guilty of violating Rules 16.01 and 16.03 of the Code of Professional Responsibility, suspended her from the practice of law for two (2) years, ordered her to pay complainants the amount of P44,582.67 with 12% interest per annum, and render accounting and inventory.[20]
In Jinon v. Jiz,[21] respondent received P45,000.00 from his client for transfer of title expenses.[22] His client later learned that respondent had been collecting the rentals from the property amounting to P12,000.00, yet respondent only turned over P7,000.00.[23] Complainant terminated respondent's legal services and demanded the return of the amounts.[24] Respondent countered that his legal services covered negotiation and sale of the property for a fee of P75,000.00.[25] The Supreme Court found Atty. Jiz guilty of violating Rules 16.01, 16.03, and 18.03 of the Code of Professional Responsibility, suspended him from the practice of law for two (2) years, and ordered him to pay complainant the amount of P45,000.00 with 6% legal interest per annum from date of demand until finality of Decision, then 12% until fully paid.[26]
[1] Villanueva v. Atty. Ishiwata, 486 Phil. 1, 6 (2004) [Per J. Sandoval-Gutierrez, Third Division], citing Judge Angeles v. Atty. Uy, Jr., 386 Phil. 221, 233 (2000) [Per J. Panganiban, Third Division].
[2] Cerdan v. Atty. Gomez, 684 Phil. 418, 428 (2012) [Per J. Mendoza, Third Division].
[3] 486 Phil. 1 (2004) [Per J. Sandoval-Gutierrez, Third Division].
[4] Id. at 4.
[5] Id.
[6] Id. at 5.
[7] Id.
[8] Id. at 7-8.
[9] 467 Phil. 556 (2004) [Per J. Sandoval-Gutierrez, Third Division].
[10] Id. at 558.
[11] Id. at 558-559.
[12] Id. at 562.
[13] 528 Phil. 814 (2006) [Per J. Carpio. En Banc].
[14] Id. at 817.
[15] Id. at 817-818.
[16] Id. at 818.
[17] Id. at 821-822.
[18] A.C. No. 4808, November 22, 2011, 660 SCRA490 [Per J. Bersamin, En Banc].
[19] Id. at 499.
[20] Id. at 507.
[21] A.C. No. 9615, March 5, 2013, 692 SCRA 348 [Per J. Perlas-Bernabe, En Banc].
[22] Id. at 350.
[23] Id.
[24] Id. at 351.
[25] Id.
[26] Id. at 358.