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

Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.02 – A lawyer shall keep the funds of each client separate and apart from his own and those of others

kept by him.

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand.  However, he

shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and

disbursements, giving notice promptly thereafter to his client.  He shall also have a lien to the same extent on all

judgments and executions he has secured for his client as provided for the Rules of Court.

            Attorneys’ Liens – an attorney shall have a lien upon the funds, documents and papers of his client which have

lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and

may apply such finds to the satisfaction thereof.  He shall also have a lien to the same extent upon all judgements for the

payment of money, and executions issued in pursuance of such judgements which he has secured in a litigation of his

client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the

records of the court rendering such judgement, or issuing such execution, and shall have caused written notice thereof to

be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and

executions as his client would have to enforce his lien and secure the payment of his fees and disbursements .  (Sec, 37,

Rule 138, RRC)

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s 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 the legal matter he is handling for the client.

Attorney’s lien is not an excuse for non-rendition of accounting

Cannot disburse client’s money to client’s creditors without authority.

Failure to deliver upon demand gives rise to the presumption that he has misappropriated the funds for his own

use to the prejudice of the client and in violation of the trust reposed in him.

Notify client if retaining lien shall be implemented

When a lawyer enforces a charging lien against his client, the client-lawyer relationship is terminated.

The principle behind Rule 16.04 is to prevent the lawyer from taking advantage of his influence over the client or

to avoid acquiring a financial interest in the outcome of the case.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

A.C. No. 9390               August 1, 2012

EMILIA O. DHALIWAL, Complainant, vs.ATTY. ABELARDO B. DUMAGUING, Respondent.

R E S O L U T I O N

PERLAS-BERNABE, J.:

Emilia O. Dhaliwal filed a complaint for violation of Canon 16 of the Code of Professional Responsibility against Atty. Abelardo B. Dumaguing.

In her sworn statement, complainant alleged that she engaged the services of respondent in connection with the purchase of a parcel of land from Fil-Estate Development, Inc. (Fil-Estate). On June 13, 2000, upon the instruction of respondent, complainant's daughter and son-in-law withdrew P 342,000.00 from the Philippine National Bank (PNB) and handed the cash over to respondent. They then proceeded to BPI Family Bank Malcolm Square Branch where respondent purchased two manager's checks in the amounts of P 58,631.94 and P 253,188.00 both payable to the order of Fil-Estate Inc. When asked why the manager's checks were not purchased at PNB, respondent explained that he has friends at the BPI Family Bank and that is where he maintains an account. These manager's checks were subsequently consigned with the Housing and Land Use Regulatory Board (HLURB) after complainant’s request to suspend payments to Fil-Estate had been granted. On September 22, 2000, respondent, on behalf of complainant, filed with the HLURB a complaint for delivery of title and damages against Fil-Estate. A week after or on September 29, 2000, he withdrew the two manager's checks that were previously consigned. On March 3, 2003, complainant informed the HLURB through a letter that respondent was no longer representing her. On March 11, 2003, the HLURB promulgated its Decision, adverse to complainant, finding the case for delivery of title and damages premature as there was no evidence of full payment of the purchase price. Thereafter, complainant made demands upon respondent to return and account to her the amounts previously consigned with the HLURB. Respondent did not comply. Thus, complainant prays that respondent be disbarred.

In his answer, respondent admitted substantially all of the allegations in the complaint. In defense, he claims that the amount of P311,819.94 was consigned to the HLURB to cover the full payment of the balance of the purchase price of the lot with Fil-Estate. Fil-Estate, however, did not accept the same as it wanted complainant to also pay interests and surcharges totalling more than P 800,000.00. Because the amount was formally consigned with the HLURB, he allegedly filed a motion1 to verify if the judgment in the case was already satisfied. He claimed that his motion has not yet been acted upon; hence, he did not deem it proper as yet to return the consigned amount.

Following the submission by complainant of her verified position paper and the failure of respondent to submit his, despite having been given ample opportunity to do so, the Commission on Bar Discipline, through Attorney Gerely C. Rico, submitted its Report and Recommendation finding complainant to have sufficiently established that respondent violated Canon 16 of the Code of Professional Responsibility. It also found respondent to have submitted a false and fabricated piece of documentary evidence, as the January 2004 Motion attached to his answer as Annex A did not bear any proof of service upon the opposing party and proof of filing with the HLURB. The Commission recommended that respondent be suspended from the practice of law for a period of one (1) year. On September 19, 2007, the IBP Board of Governors passed Resolution No. XVIII-2007-93, adopting with modification the Commission's Report and Recommendation, to wit:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of 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 Respondent's violation of Canon 16 of the Code of Professional Responsibility by his failure to return and account to complainant the amount previously consigned with the HLURB despite demand, Atty. Abelardo B. Dumaguing is hereby SUSPENDED from the practice of law for six (6) months and Orderedto Return the amount of P311,819.94 to complainant within thirty (30) days from receipt of notice.

Respondent's motion for reconsideration was denied by the IBP Board of Governors in Resolution No. XX-2012-42.

The Court adopts the IBP's findings of fact and conclusions of law.

The Code of Professional Responsibility provides:

Canon 16-A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01-A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02-A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03-A lawyer shall deliver the funds and property of his client when due or upon demand.

Money entrusted to a lawyer for a specific purpose, such as payment for the balance of the purchase price of a parcel of land as in the present case, but not used for the purpose, should be immediately returned.2 "A lawyer's failure to return upon demand the funds held by him on behalf of his client gives rise to the presumption that he has appropriated the same for his own use in violation of the trust reposed in him by his client. Such act is a gross violation of general morality as well as of professional ethics. It impairs public confidence in the legal profession and deserves punishment."3

Since respondent withdrew the consignation of the BPI manager’s checks in the total amount of P 311,891.94 from the HLURB and the same was not used to settle the balance of the purchase price of the parcel of land purchased by complainant from Fil-Estate, then reimbursement with legal interest4 was properly ordered by the IBP.

Respondent's proffered excuse of having to await the HLURB action on his alleged motion-- the filing of which he miserably failed to prove-- as a condition to the return of the sum of P 311 ,891.94 to complainant compounds his liability and even bolstered his attitude to use dishonest means if only to evade his obligation. It underlines his failure to meet the high moral standards required of members of the legal profession.

WHEREFORE, Atty. Abelardo B. Dumaguing is adjudged GUILTY of violating Canon 16 of the Code of Professional Responsibility. He is hereby SUSPENDED from the practice of law for a period of six (6) months effective upon receipt of this Resolution. He is also ordered to return to complainant Emilia O. Dhaliwal, the amount of P311,819.94 with legal interest of six percent (6%) per annum from the time of his receipt of the money on September 29, 2000 up to the finality of this Resolution and twelve percent (12%) per annum from finality thereof until paid.

Let copies of this Resolution be furnished the Office of the Bar Confidant to be entered into respondent’s personal records as attorney. Copies shall likewise be

furnished the IBP and the Office of the Court Administrator for circulation to all courts concerned.

SO ORDERED.

A.C. No. 4562               June 15, 2005

DANIEL MORTERA, TERESITA MORTERA, FERDINAND MORTERA and LEO MORTERA Complainants, vs.ATTY. RENATO B. PAGATPATAN, Respondent.

R E S O L U T I O N

CORONA, J.:

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

The answer to this question is stated clearly in Canon 16 of the Code of Professional Responsibility for Lawyers1and in decisions2 applying the same, but it is apparently not plain enough to the respondent in this case. It therefore behooves us to make an example of him for the improvement of the legal profession.

This disbarment case originated from the execution of a judgment in a civil action for "rescission of contracts with a prayer for prohibitory mandatory injunction."3

In brief, the complainants, then the plaintiffs, sued their mother, one Renato C. Aguilar and one Philip Arnold Palmer Bradfield for the rescission of a contract of sale. They secured judgment under which Aguilar was to pay themP155,000 for the property, which this Court affirmed.4

On April 15, 1994, respondent did the unthinkable. Under a secret agreement with Aguilar, he accepted P150,000 from the latter as partial payment of the judgment sum, issuing a receipt for the amount.5 He then deposited the money in his personal bank account without the knowledge of complainants.6 Until now, respondent adamantly refuses to surrender the money to complainants, despite the successive Orders of the RTC and the Court of Appeals.7

For his part, respondent, in his comment8 admits his secret agreement with and receipt of the money from Aguilar, interposing as his defense the fact that the complainants and their mother owed him the money he appropriated for services previously rendered. They would not have paid him his fees had he not done what he did.9 In support of his argument, the respondent narrated his years of service as counsel for the complainants and their mother. He alleged the amounts they owed him although he presented no evidence of any agreement between him and the complainants for the exact amount of his compensation.

Respondent’s responsibility to the complainants is unequivocally stated in Canons 15 and 16 of the Code of Professional Responsibility. The four rules governing this situation were: he owed candor to his clients;10 he was bound to account for whatever money he received for and from them;11 as a lawyer, he was obligated to keep his own money separate from that of his clients;12 and, although he was entitled to a lien over the funds in order to satisfy his lawful fees,13 he was also bound to give prompt notice to his clients of such liens and to deliver the funds to them upon demand or when due.

Respondent violated each and every one of these rules.

Respondent cited the need to protect the money from other persons claiming to be heirs of Eusebio Montera14 and from the volatile temperament of the complainants15 but did not present any evidence at all to prove either claim. Thus, these claims should be ignored.

Because the respondent admitted concealing his clients’ money, the only question in our minds is how severe his punishment should be.

The Board of Governors of the Integrated Bar of the Philippines resolved16 to suspend the respondent for one year.

We do not agree.

In Aldovino v. Pujalte,17 respondent Atty. Pedro C. Pujalte similarly faced disbarment charges for having withheld his clients’ money in violation of Canon 16. Pujalte alleged a lien for his fees over the contested amount but adduced no evidence of this supposed lien.

In disposing of that case, we said:

Respondent has no right to retain or appropriate unilaterally, as lawyer’s lien, the sum of P250,000, as attorney’s fees. In fact, he did not adduce any proof of such agreement. His mere allegation or claim is not proof. Obviously, his failure to return the money to complainants upon demand gave rise to the presumption that he misappropriated it in violation of the trust reposed on him. His act of holding on to their money without their acquiescence is conduct indicative of lack of integrity and propriety. He was clinging to something not his and to which he had no right.

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

However, in the more recent case of de Guzman Buado and Lising v. Layag18 which involved a violation of Canons 15, 16 and 17, the Court En Banc imposed the much heavier penalty of indefinite suspension.

In that case, Atty. Eufracio Layag, the lawyer of the complainants Lising and de Guzman, successfully prosecuted a case against Inland Trailways, Inc. (Inland). Pursuant to the judgment, Inland issued three checks, one payable to Layag, one payable to Lising and one payable to de Guzman who had already passed away by then. Layag received all three checks from the deputy sheriff but did not inform the complainants. He then gave them to one Marie Paz Gonzales for encashment on the strength of a special power of attorney (SPA) purportedly executed by the late de Guzman appointing her as his attorney-in-fact. This SPA authorized Gonzales to encash any check or bill of exchange received in settlement of the case. Even after complainants learned of the issuance of the checks two years later and demanded delivery of the proceeds, Layag refused to do so.

In imposing upon Layag the penalty of indefinite suspension, the Court En Banc considered his years of experience as a lawyer, his ignorance of the law, specifically the Civil Code, and his violation of not one but three Canons.

Even though, on its face, this case has more in common with Pujalte than with Layag, a one-year suspension seems too lenient for a number of reasons.

First, the respondent in this case has been a practicing lawyer since 197419 and even runs his own small law firm. For all his vast experience, however, he claims that he has done nothing wrong by concealing and withholding his clients’ money from them.20 Coming from a seasoned practitioner of the law, this attitude is inexcusable.lawphil.net

Second, the respondent had other means of recovering his fees, having filed a case for that purpose which was, however, dismissed for his failure to properly implead an indispensable party.21 In short, having botched his own effort to recover his fees, he sought to simply subvert both law and proper procedure by holding on to the money.

Clearly, the respondent’s actuations were thoroughly tainted with bad faith, deceit and utter contempt of his sworn duty as a lawyer. Thus, a heavier penalty than a mere one-year suspension is definitely called for.

WHEREFORE, the IBP Board of Governors Resolution No. XV-2002-223 in Administrative Case No. 4562, finding respondent liable for violation of Canon 16 of the Code of Professional Responsibility is hereby AFFIRMED with

theMODIFICATION that instead of a one-year suspension, Atty. Renato B. Pagatpatan is hereby SUSPENDED from the practice of law for two years.

Respondent is further directed to turn over to the complainants, within five (5) days from receipt of this resolution, the P150,000 he received in their behalf.

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

Let a copy of this Resolution be attached to the personal record of Atty. Renato B. Pagatpatan and copies furnished the Integrated Bar of the Philippines and the Office of the Court Administrator for dissemination to all courts.

This Resolution is immediately executory.

SO ORDERED.

A.C. No. 7965               November 13, 2013

AZUCENA SEGOVIA-RIBAYA, Complainant, vs.ATTY. BARTOLOME C. LAWSIN, Respondent.

R E S O L U T I O N

PERLAS-BERNABE, J.:

For the Court’s resolution is an administrative complaint1 filed by Azucena Segovia-Ribaya (complainant) against Atty. Bartolome C. Lawsin (respondent), the antecedents of which are detailed as follows:

The Facts

On November 18, 2005, the parties entered into a retainership agreement2 (retainer) whereby respondent undertook to, inter alia process the registration and eventually deliver, within a period of six (6 ) months,3 the certificate of title over a certain parcel of land (subject land) in favor of complainant acting as the representative of the Heirs of the late Isabel Segovia. In connection therewith, respondent received from complainant the amounts of P15,000.00 andP39,000.004 to cover for the litigation and land registration expenses, respectively.

Notwithstanding the expenditure of the P39,000.00 given for registration expenses (subject amount) and the lapse of more than three (3) years from the retainer’s date, complainant alleged that respondent, without proper explanation, failed to fulfill his undertaking to register the subject land and deliver to complainant the certificate of title over the same. As complainant was tired of respondent’s excuses, she finally decided to just withdraw the subject amount from respondent. For such purpose, she confronted the latter at his office and also subsequently sent him two (2) demand letters,5 but all to no avail.6 Hence, complainant was prompted to file the instant administrative complaint.

In his Comment,7 respondent admitted that he indeed received the subject amount from complainant but averred that after receiving the same, the latter’s brother, Erlindo, asked to be reimbursed the amount of P7,500.00 which the latter purportedly paid to the land surveyor.8 Respondent likewise alleged that he later found out that he could not perform his undertaking under the retainer because the ownership of the subject land was still under litigation.9Finally, respondent stated that he wanted to return the balance of the subject amount to

complainant after deducting what Erlindo took from him, but was only prevented to do so because he was maligned by complainant when she went to his office and there, shouted and called him names in the presence of his staff.10

In the Court’s Resolutions dated December 17, 200811 and March 2, 2009,12 the case was referred to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. After both parties failed to appear during the mandatory conference, IBP Investigating Commissioner Atty. Salvador B. Hababag (Investigating Commissioner) required the parties to submit their respective position papers.13 Complainant filed her position paper14 on October 8, 2009, while respondent failed to do so.

The IBP’s Report and Recommendation

On November 6, 2009, the Investigating Commissioner issued his Report and Recommendation,15 finding respondent to have violated Rules 16.01 and 16.03, Canon 16 of the Code of Professional Responsibility (Code) for his failure to properly account for the money entrusted to him without any adequate explanation why he could not return the same. The Investigating Commissioner found that respondent’s acts demonstrated his "lack of candor, fairness, and loyalty to his client, who entrusted him with money and documents for the registration of the subject land."16 The Investigating Commissioner likewise held that respondent’s failure to return the subject amount, despite being given "adequate time to return"17 the same, "not to mention the repeated x x x demands made upon him,"18constitutes "gross dishonesty, grave misconduct, and even misappropriation of money"19 in violation of the above-stated rules. In view of the foregoing, the Investigating Commissioner recommended that respondent be suspended from the practice of law for a period of six (6) months, with a stern warning that a repetition of the same or similar offenses in the future shall be dealt with more severely.20

In a Resolution21 dated December 29, 2012, the IBP Board of Governors adopted and approved the Investigating Commissioner’s Report and Recommendation with modification, ordering the return of the amount of P31,500.00,22with legal interest and within thirty (30) days from receipt of notice, to complainant.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for violating Rules 16.01 and 16.03, Canon 16 of the Code.

The Court’s Ruling

The Court concurs with and affirms the findings of the IBP anent respondent’s administrative liability but deems it proper to: (a) extend the recommended period of suspension from the practice of law from six (6) months to one (1) year; and (b) delete the recommended order for the return of the amount of P31,500.00.

Anent respondent’s administrative liability, the Court agrees with the IBP that respondent’s failure to properly account for and duly return his client’s money despite due demand is tantamount to a violation of Rules 16.01 and 16.03, Canon 16 of the Code which respectively read as follows:

CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand.1âwphi1 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.

Records disclose that respondent admitted the receipt of the subject amount from complainant to cover for pertinent registration expenses but posited his failure to return the same due to his client’s act of confronting him at his office wherein she shouted and called him names. With the fact of receipt being established, it was then respondent’s obligation to return the money entrusted to him by complainant. To this end, suffice it to state that complainant’s purported act of "maligning" respondent does not justify the latter’s failure to properly account for and return his client’s money upon due demand. Verily, a lawyer’s duty to his client is one essentially imbued with trust so much so that it is incumbent upon the former to exhaust all reasonable efforts towards its faithful compliance. In this case, despite that singular encounter, respondent had thereafter all the opportunity to return the subject amount but still failed to do so. Besides, the obligatory force of said duty should not be diluted by the temperament or occasional frustrations of the lawyer’s client, especially so when the latter remains unsatisfied by the lawyer’s work. Indeed, a lawyer must deal with his client with professional maturity and commit himself towards the objective fulfillment of his responsibilities. If the relationship is strained, the correct course of action is for the lawyer to properly account for his affairs as well as to ensure the smooth turn-over of the case to another lawyer. Except only for the retaining lien exception23 under Rule 16.03, Canon 16 of the Code, the lawyer

should not withhold the property of his client. Unfortunately, absent the applicability of such exception or any other justifiable reason therefor, respondent still failed to perform his duties under Rules 16.01 and 16.03, Canon 16 of the Code which perforce warrants his administrative liability.

The Court, however, deems it proper to increase the IBP’s recommended period of suspension from the practice of law from six (6) months to one (1) year in view of his concomitant failure to exercise due diligence in handling his client’s cause as mandated by Rules 18.03 and 18.04, Canon 18 of the Code:

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client's request for information.

After a judicious scrutiny of the records, the Court observes that respondent did not only accomplish his undertaking under the retainer, but likewise failed to give an adequate explanation for such non-performance despite the protracted length of time given for him to do so. As such omissions equally showcase respondent’s non-compliance with the standard of proficiency required of a lawyer as embodied in the above-cited rules, the Court deems it apt to extend the period of his suspension from the practice of law from six (6) months to one (1) year similar to the penalty imposed in the case of Del Mundo v. Capistrano.24

As a final point, the Court must clarify that the foregoing resolution should not include a directive for the return of the amount of P31,500.00 as recommended by the IBP Board of Governors. The same amount was given by complainant to respondent to cover for registration expenses; hence, its return partakes the nature of a purely civil liability which should not be dealt with during an administrative-disciplinary proceeding. In Tria-Samonte v. Obias,25the Court recently held that its "findings during administrative-disciplinary proceedings have no bearing on the liabilities of the parties involved which are purely civil in nature – meaning, those liabilities which have no intrinsic link to the lawyer's professional engagement – as the same should be threshed out in a proper proceeding of such nature." This pronouncement the Court applies to this case and thus, renders a disposition solely on respondent’s administrative liability.

WHEREFORE, respondent Atty. Bartolome C. Lawsin is found guilty of violating Rules 16.01 and 16.03, Canon 16, and Rules 18.03 and 18.04, Canon 18 of 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 Resolution with a stem warning that a repetition of the same or similar acts will be dealt with more severely.

Let a copy of this Resolution be furnished the Office of the Bar Confidant the Integrated Bar of the Philippines and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

A.C. No. 6672               September 4, 2009

PEDRO L. LINSANGAN, Complainant, vs.ATTY. NICOMEDES TOLENTINO, Respondent.

R E S O L U T I O N

CORONA, J.:

This is a complaint for disbarment1 filed by Pedro Linsangan of the Linsangan Linsangan & Linsangan Law Office against Atty. Nicomedes Tolentino for solicitation of clients and encroachment of professional services.

Complainant alleged that respondent, with the help of paralegal Fe Marie Labiano, convinced his clients2 to transfer legal representation. Respondent promised them financial assistance3 and expeditious collection on their claims.4To induce them to hire his services, he persistently called them and sent them text messages.

To support his allegations, complainant presented the sworn affidavit5 of James Gregorio attesting that Labiano tried to prevail upon him to sever his lawyer-client relations with complainant and utilize respondent’s services instead, in exchange for a loan of P50,000. Complainant also attached "respondent’s" calling card:6

Front

NICOMEDES TOLENTINO

LAW OFFFICE

CONSULTANCY & MARITIME SERVICESW/ FINANCIAL ASSISTANCE

Fe Marie L. LabianoParalegal

1st MIJI Mansion, 2nd Flr. Rm. M-01 6th Ave., cor M.H. Del PilarGrace Park, Caloocan City

Tel: 362-7820Fax: (632) 362-7821Cel.: (0926) 2701719

Back

SERVICES OFFERED:

CONSULTATION AND ASSISTANCETO OVERSEAS SEAMEN

REPATRIATED DUE TO ACCIDENT,INJURY, ILLNESS, SICKNESS, DEATHAND INSURANCE BENEFIT CLAIMS

ABROAD.1avvphi1

(emphasis supplied)

Hence, this complaint.

Respondent, in his defense, denied knowing Labiano and authorizing the printing and circulation of the said calling card.7

The complaint was referred to the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.8

Based on testimonial and documentary evidence, the CBD, in its report and recommendation,9 found that respondent had encroached on the professional practice of complainant, violating Rule 8.0210 and other canons11of the Code of

Professional Responsibility (CPR). Moreover, he contravened the rule against soliciting cases for gain, personally or through paid agents or brokers as stated in Section 27, Rule 13812 of the Rules of Court. Hence, the CBD recommended that respondent be reprimanded with a stern warning that any repetition would merit a heavier penalty.

We adopt the findings of the IBP on the unethical conduct of respondent but we modify the recommended penalty.

The complaint before us is rooted on the alleged intrusion by respondent into complainant’s professional practice in violation of Rule 8.02 of the CPR. And the means employed by respondent in furtherance of the said misconduct themselves constituted distinct violations of ethical rules.

Canons of the CPR are rules of conduct all lawyers must adhere to, including the manner by which a lawyer’s services are to be made known. Thus, Canon 3 of the CPR provides:

CANON 3 - A lawyer in making known his legal services shall use only true, honest, fair, dignified and objective information or statement of facts.

Time and time again, lawyers are reminded that the practice of law is a profession and not a business; lawyers should not advertise their talents as merchants advertise their wares.13 To allow a lawyer to advertise his talent or skill is to commercialize the practice of law, degrade the profession in the public’s estimation and impair its ability to efficiently render that high character of service to which every member of the bar is called.14

Rule 2.03 of the CPR provides:

RULE 2.03. A lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

Hence, lawyers are prohibited from soliciting cases for the purpose of gain, either personally or through paid agents or brokers.15 Such actuation constitutes malpractice, a ground for disbarment.16

Rule 2.03 should be read in connection with Rule 1.03 of the CPR which provides:

RULE 1.03. A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man’s cause.

This rule proscribes "ambulance chasing" (the solicitation of almost any kind of legal business by an attorney, personally or through an agent in order to gain employment)17 as a measure to protect the community from barratry and champerty.18

Complainant presented substantial evidence19 (consisting of the sworn statements of the very same persons coaxed by Labiano and referred to respondent’s office) to prove that respondent indeed solicited legal business as well as profited from referrals’ suits.

Although respondent initially denied knowing Labiano in his answer, he later admitted it during the mandatory hearing.

Through Labiano’s actions, respondent’s law practice was benefited. Hapless seamen were enticed to transfer representation on the strength of Labiano’s word that respondent could produce a more favorable result.

Based on the foregoing, respondent clearly solicited employment violating Rule 2.03, and Rule 1.03 and Canon 3 of the CPR and Section 27, Rule 138 of the Rules of Court.1avvphi1

With regard to respondent’s violation of Rule 8.02 of the CPR, settled is the rule that a lawyer should not steal another lawyer’s client nor induce the latter to retain him by a promise of better service, good result or reduced fees for his services.20 Again the Court notes that respondent never denied having these seafarers in his client list nor receiving benefits from Labiano’s "referrals." Furthermore, he never denied Labiano’s connection to his office.21Respondent committed an unethical, predatory overstep into another’s legal practice. He cannot escape liability under Rule 8.02 of the CPR.

Moreover, by engaging in a money-lending venture with his clients as borrowers, respondent violated Rule 16.04:

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s 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 rule is that a lawyer shall not lend money to his client. The only exception is, when in the interest of justice, he has to advance necessary expenses (such as filing fees, stenographer’s fees for transcript of stenographic notes, cash bond or premium for surety bond, etc.) for a matter that he is handling for the client.

The rule is intended to safeguard the lawyer’s independence of mind so that the free exercise of his judgment may not be adversely affected.22 It seeks to ensure his undivided attention to the case he is handling as well as his entire devotion and fidelity to the client’s cause. If the lawyer lends money to the client in connection with the client’s case, the lawyer in effect acquires an interest in the subject matter of the case or an additional stake in its outcome.23Either of these circumstances may lead the lawyer to consider his own recovery rather than that of his client, or to accept a settlement which may take care of his interest in the verdict to the prejudice of the client in violation of his duty of undivided fidelity to the client’s cause.24

As previously mentioned, any act of solicitation constitutes malpractice25 which calls for the exercise of the Court’s disciplinary powers. Violation of anti-solicitation statutes warrants serious sanctions for initiating contact with a prospective client for the purpose of obtaining employment.26 Thus, in this jurisdiction, we adhere to the rule to protect the public from the Machiavellian machinations of unscrupulous lawyers and to uphold the nobility of the legal profession.

Considering the myriad infractions of respondent (including violation of the prohibition on lending money to clients), the sanction recommended by the IBP, a mere reprimand, is a wimpy slap on the wrist. The proposed penalty is grossly incommensurate to its findings.

A final word regarding the calling card presented in evidence by petitioner. A lawyer’s best advertisement is a well-merited reputation for professional capacity and fidelity to trust based on his character and conduct.27 For this reason, lawyers are only allowed to announce their services by publication in reputable law lists or use of simple professional cards.

Professional calling cards may only contain the following details:

(a) lawyer’s name;

(b) name of the law firm with which he is connected;

(c) address;

(d) telephone number and

(e) special branch of law practiced.28

Labiano’s calling card contained the phrase "with financial assistance." The phrase was clearly used to entice clients (who already had representation) to change counsels with a promise of loans to finance their legal actions. Money was dangled to lure clients away from their original lawyers, thereby taking advantage of their financial distress and emotional vulnerability. This crass commercialism degraded the integrity of the bar and deserved no place in the legal profession. However, in the absence of substantial evidence to prove his culpability, the Court is not prepared to rule that respondent was personally and directly responsible for the printing and distribution of Labiano’s calling cards.

WHEREFORE, respondent Atty. Nicomedes Tolentino for violating Rules 1.03, 2.03, 8.02 and 16.04 and Canon 3 of the Code of Professional Responsibility and Section 27, Rule 138 of the Rules of Court is hereby SUSPENDEDfrom the practice of law for a period of one year effective immediately from receipt of this resolution. He isSTERNLY WARNED that a repetition of the same or similar acts in the future shall be dealt with more severely.

Let a copy of this Resolution be made part of his records in the Office of the Bar Confidant, Supreme Court of the Philippines, and be furnished to the Integrated Bar of the Philippines and the Office of the Court Administrator to be circulated to all courts.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

A.C. No. 5082             February 17, 2004

MILAGROS N. ALDOVINO, VIRGILIO NICODEMUS, ANGELA N. DELA CRUZ, JULITA N. SOCO, MAGDALENA N. TALENS and TEODORO S. NICODEMUS, complainants vs.ATTY. PEDRO C. PUJALTE, JR., respondent.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

This is a complaint for disbarment and/or disciplinary action1 against Atty. Pedro C. Pujalte, Jr. filed by Milagros Nicodemus-Aldovino, Virgilio Nicodemus, Angela Nicodemus-dela Cruz, Julita Nicodemus-Soco, Magdalena Nicodemus-Talens and Teodoro S. Nicodemus for violation of Canon 16 of the Code of Professional Responsibility.

Complainants alleged in their complaint that they are brothers and sisters and heirs of Arcadia Nicodemus. Sometime in March, 1995, they hired the services of respondent Atty. Pujalte, Jr. as their counsel in Civil Case No. 95-46 filed with the Regional Trial Court, Branch 56, Lucena City. The suit was for specific performance with damages to compel their sister, Loreto Nicodemus Pulumbarit, to deliver to them their shares in the estate of their deceased mother.

On November 9, 1998 the trial court rendered its Decision, the dispositive portion of which reads:

"WHEREFORE, FROM THE FOREGOING, the court finds for the defendant Loreto Pulumbarit and accordingly orders the dismissal of the case with costs against plaintiffs and orders the Branch Clerk of Court of this branch, upon finality of this decision to withdraw from Savings Account No. 435-527745-9 at the Philippine National Bank and to deliver the proceeds to all the heirs of Arcadia Nicodemus upon proper receipt. Both counsels are directed to oversee the distribution and for them to jointly file their manifestation on the matter."2

Accordingly, on December 1, 1998, Branch Clerk of Court Angelo A. Serdon withdrew from the Philippine National Bank the sum of P1,335,109.68 under Savings Account No. 435-527745-9.

In the presence of defendant Mrs. Loreto N. Pulumbarit and respondent counsel, Branch Clerk of Court Serdon divided the withdrawn amount into eight shares of P166,888.71 each. He gave the defendant two shares. Then he handed the remaining amount of P1,001,332.26, corresponding to six shares, to respondent upon his representation that he is authorized to receive the money and to oversee the distribution to complainants of their respective shares.

However, complainants did not receive their shares from respondent despite repeated demands. Thus, they engaged the services of Atty. Francisco I. Chavez who, on December 17, 1998, sent a letter to respondent demanding that the amount of P1,001,332.26 entrusted to him by the Branch Clerk of Court be turned over to complainants.

On December 21, 1998, respondent wired Atty. Chavez that he will deliver to complainants their respective shares "tomorrow morning."

What respondent delivered to herein complainants was only P751,332.26, instead of P1,001,332.26 because he deducted P250,000.00 therefrom. He claimed that this amount is his attorney’s fees per his agreement with Milagros Aldovino, complainants’ representative. On February 23, 1999, Atty. Chavez again wired respondent demanding that he return to complainants the amount of P236,000.00. As explained by Atty. Chavez in his telegram, respondent could retain only P14,000.00 (not P250,000.00), which amount is in addition to the P86,000.00 initially paid to him by complainants as his attorney’s fees. According to complainants, the sum of P100,000.00 (P86,000.00 plus P14,000.00) is more than the amount of attorney’s fees agreed upon by the parties. Still, respondent failed to return to complainants the amount of P236,000.00, which is the balance after deducting P14,000.00 from P250,000.00.

In his comment dated September 3, 1999, respondent admitted that he received from the Branch Clerk of Court "P1,335,109.68" representing complainants’ shares. Thereafter, he waited for complainants Virgilio and Teodoro Nicodemus and Engr. Isidro Aureada at the Sangguniang Panlalawigan of Quezon where he had a hearing, but they did not come.

To disprove deceit on his part, he attached to his comment his letter dated December 2, 1998 to Engr. Isidro Aureada3 informing the latter that he waited for those complainants in order to give them the money.

Respondent claimed that there is a verbal agreement between him and Milagros Aldovino, representative of complainants, that they will pay him P250,000.00 as his attorney’s fees. Consequently, he deducted and retained this amount from the money delivered to him by the Branch Clerk of Court. At any rate, he wrote complainants on December 23, 1998 regarding this matter.4

In her Report dated March 10, 2003,5 IBP Commissioner Rebecca Villanueva-Maala made the following findings and recommendation:

"xxx. In the case at bar, after respondent got hold of the entire settlement amount, he did not immediately turn over the said amount to the complainants who had to look and search for him. It was only when respondent was threatened with a legal action (Estafa, docketed as Grim. Case No. 99-1017, RTC Br. 58, Lucena City) that he decided to return the balance of the settlement amount but after deducting P250,000.00 which he claims to be his attorney’s fees. Complainants alleged that they have already paid respondent the amount of P86,000.00 which was more than double the agreed upon professional fees. Complainants even agreed to pay an additional P14.000.00 to complete the amount of P100,000.00 but there was no agreement to the effect that respondent will be paid P250,000.00. Respondent unilaterally appropriated the amount of P250,000.00 without the conformity of complainants. The lawyer is allowed to apply so much of the funds as may be necessary to satisfy his lawful fees and disbursement subject to the condition that he shall promptly notify his client (Rule 16.03, CPR). The lawyer cannot unilaterally appropriate for himself the money of his client for payment of his attorney’s fees which the client owes to the former (Cabigao vs. Rodrigo, 57 Phil 20; Capulong vs. Alino, 22 SCRA 491).

"PREMISES CONSIDERED, we find respondent to have violated Canon 16 and 16.03 of the Code of Professional Responsibility and recommends that he be suspended for the period of one (1) year from the practice of his profession as a lawyer and as a member of the Bar."

On June 21, 2003, the IBP Board of Governors, Pasig City, passed Resolution No. XV-2003-347 adopting and approving the Report of IBP Commissioner Maala.

We sustain the Resolution of the IBP Board of Governors finding that respondent violated Canon 16, Code of Professional Responsibility and suspending him from the practice of law for one (1) year.

Canon 16 and its Rule 16.03 provide:

"CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

"x x x x x x x x x

"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."

Respondent should have complied with the above provisions. When complainants demanded that the sum of P1,001,332.26 be delivered to them, he should have heeded promptly. Had they not hired a lawyer and charged him with estafa, he would not have turned over the money to them. While it may be true that he has "a lien over the funds," he should have notified complainants about it in due time.

Respondent has no right to retain or appropriate unilaterally as lawyer’s lien,6 the sum of P250,000.00. As found by IBP Commissioner Maala, there was no agreement between him and complainants that he could retain P250,000.00 as attorney’s fees. In fact, he did not adduce any proof of such agreement. His mere allegation or claim is not proof.7 Obviously, his failure to return the money to complainants upon demand gave rise to the presumption that he misappropriated it in violation of the trust reposed on him.8 His act of holding on to their money without their acquiescence is conduct indicative of lack of, integrity and propriety.9 He was clinging to something not his and to which he had no right.10

This Court has been exacting in its demand for integrity and good moral character of members of the Bar. They are expected at all times to uphold the integrity and dignity of the legal profession11 and refrain from any act or omission which might lessen the trust and confidence reposed by the public in the fidelity, honesty, and integrity of the legal profession.12 Membership in the legal profession is a privilege.13 And whenever it is made to appear that an attorney is no longer worthy of the trust and confidence of the public, it becomes not only the right but also the duty of this Court, which made him one of its officers and gave him the privilege of ministering within its Bar, to withdraw the privilege.14 Respondent, by his conduct, blemished not only his integrity as a member of the Bar, but also that of the legal profession.

WHEREFORE, respondent Atty. Pedro C. Pujalte, Jr. is hereby declared guilty of violation of Canon 16 of the Code of Professional Responsibility and is

SUSPENDED from the practice of law for a period of one (1) year effective immediately. He is ordered to return the sum of P236,000.00 to complainants within five (5) days from notice.

SO ORDERED.

Vitug, (Chairman), Corona, and Carpio-Morales, JJ., concur.