UNITY FISHING DEVELOPMENT CORPORATION v. ATTY. DANILO G.

MACALINO Frabal Fishing and Ice Plant Corporation (Frabal) was the owner of a parcel of land which was leased to Wheels Distributors, Inc. (Wheels), dealer of cars and motor vehicles. A dispute arose between them which led to a lawsuit. Frabal hired the services of respondent Atty. Danilo G. Macalino as counsel. Frabal merged and was absorbed by Unity Fishing, assigning and transferring all its business assets and liabilities to the latter, including all judicial and extra-judicial claims. So Frabal substituted in the former s lawsuit with Wheels; As legal counsel, Macalino advised to severe all contractual relationship with Wheels as a step towards eventually evicting the latter from the property they were occupying and to return the guarantee deposit equivalent to two (2) months rental or the amount of P50,000.00 to Wheels; Macalino volunteered to bring the check to the office of Wheels himself and to make them accept it so he sent his representative to Unity Fishing s office to get the said check; Thereafter, Macalino represented that he was able to deliver the check to Wheels Distributors, Inc.; The suit between Unity and Wheels continued for several years but Unity changed counsels, replacing Macalino. Finally the suit ended in amicable settlement. In the process of negotiating the terms and conditions of the settlement, Wheels informed Petitioner that it never received the refund guarantee deposit of P50,000.00; Petitioner wrote to Respondent on May 19, 1994 to explain why the check in issue never reached Wheels Distributors and how it was endorsed and encashed despite the fact that it was a crossed check Despite receipt of said letter, however, Macalino never responded nor attempted to explain his side to what strongly appears to be a gross misappropriation of the money for his own personal use; That he misappropriated the amount of P50,000.00 for his own personal use cannot be denied because an employee of UCPB testified that Macalino was the one maintaining Account to which the crossed check payable to Wheels was deposited HELD: Respondent s wanton failure to make an accounting and to return to his client the amount entrusted to him upon demand give rise to the presumption that he misappropriated it, in violation of the trust and confidence reposed on him It is clear, therefore, that respondent, by depositing the check in his own account and subsequently deceiving his client into believing that he delivered the same to Wheels is undoubtedly guilty of deceit, malpractice, gross misconduct and unethical behavior. What is more, respondent s repeated failures to comply with the orders of the Court requiring him to comment on the complaint indicate a high degree of irresponsibility on his part. WHEREFORE, Atty. Danilo G. Macalino is hereby declared guilty of violation of Canon 16 of the Code of Professional Responsibility, for his failure to immediately return and deliver the funds of his former client upon demand, and is hereby SUSPENDED from the practice of law for a period of one (1) year effective immediately, with a STERN WARNING that a repetition of the same or similar acts shall be dealt with more severely. He is likewise ordered to return the sum ofP50,000 to complainant within ten (10) hereof.

ROSARIO JUNIO vs. ATTY. SALVADOR M. GRUPO Junio engaged the services of Atty. Grupo for the redemption of a parcel of land. She entrusted to him the amount of P25,000.00 to be used in the redemption of the aforesaid property. However, Grupo did not redeem the property; as a result of which the right of redemption was lost and the property was eventually forfeited. Because of his failure to redeem the property, Junio demanded the return of the money. Despite repeated demands, Grupo continuously refused to refund the money entrusted to him. In his Answer, he admitted receiving the amount in question but alleged that: The subject land could really not be redeemed anymore. When transaction failed, Grupo requested that he be allowed, in the meantime, to avail of the money because he had an urgent need for some money himself to help defray his children's educational expenses. Thus, he executed a promissory note for the amount. Also the family of the complainant and that of the respondent were very close and intimate with each other. That is why, when Junio requested assistance regarding the mortgaged property, Grupo had no secondthoughts in extending a lending hand He did not ask for any fee and his services were purely gratuitous; it was simply an act of a friend for a friend. It was just lamentably unfortunate that his efforts failed. Junio however denied that Grupo informed her of his failure to redeem the property and that he just requested her to instead lend the money to him.3 The case was thereafter referred to the Integrated Bar of the Philippines Respondent takes further refuge in the intimate and close relationship existing between himself and the complainant's family on the basis of which his legal services were purely gratuitous or "simply an act of a friend for a friend" with "no consideration involved." Thus, he concluded that there was, strictly speaking, no attorney-client relationship existing between them. Rather, right from the start.
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 (Rule 16.04, Code of Professional Responsibility). This rule is intended to prevent the lawyer from taking advantage of his influence over the client.

It would indeed appear from the records of the case that respondent was allowed to borrow the money previously entrusted to him by complainant for the purpose of securing the redemption of the property. Respondent, however, did not give adequate security for the loan and subsequently failed to settle his obligation. As explained in Hilado v. David: To constitute professional employment it is not essential that the client should have employed the attorney professionally on any previous occasion . . . It is not necessary that any retainer should have been paid. promised, or charged for; neither is it material that the attorney consulted did not afterward undertake the case about which the consultation was had. If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established . . . WHEREFORE, the Court finds petitioner guilty of violation of Rule 16.04 of the Code of Professional Responsibility and orders him suspended from the practice of law for a period of one (1) month and to pay to respondent, within 30 days from notice, the amount of P25,000.00 with interest at the legal rate, computed from December 12, 1996.

CESARIO ADARNE vs. ATTY. DAMIAN V. ALDABA Sps. Cumpio filed an action for forcible entry against herein complaint Cesario Adarne, Aning Arante, and Miguel Inokando. Atty. Isauro Marmita represented the defendants. The case was dismissed by the Justice of the Peace for lack of jurisdiction and was appealed to the CFI of Carigara. The CFI returned the case to the lower court finding that it had jurisdiction. After trial, JOP again dismissed the case and it was again appealed to the CFI. Attys. Arturo Mirales and Generoso Casimpan filed the answer for the defendants. At the hearing, Adarne, noting that his attorneys had not yet arrived, prevailed upon Atty. Aldaba, who was then present in court, to appear as counsel for them and ask for the Postponement of the trial. Atty. Aldaba, who is his third degree cousin, agreed, and entered a special appearance. Upon noticing that the plaintiffs and their counsel were not also present in court, Aldaba, instead of asking for a postponement, moved for the dismissal of the case, which was granted. The plaintiffs then appealed. At the hearing, Atty. Aldaba was again prevailed upon by Adarne to appear in his behalf. The respondent entered a "special appearance" for the complainant and thereafter argued that the interest of justice would best be served of the defendants were allowed to file an action for quieting of title and the case heard jointly with the pending action for forcible entry. Finding merit, the court ordered Adarne to file an action for quieting of title within 1 week, after which both cases would be tried jointly. Thereafter, the court declared the defendants in default for their failure to appeal at the hearing set for that day and directed the plaintiffs to present evidence to support their claim. Because of this, Cesario Adarne filed the present complaint against Atty. Aldaba. The respondent denied that he ever had any agreement with the complainant with respect to the handling of the latter's case except for the "special appearance" that he entered for the complainant, in view of the non-availability of the complainant's lawyers on said dates. HELD: The judgment by default rendered against the complainant cannot be attributed to the respondent attorney. The blame lies with the complainant for having engaged the services of several lawyers to handle his case without formally withdrawing the authority he had given to them to appear in his behalf as to place the responsibility upon the respondent. It appeared that there have been three changes made of the attorneys for the complainant in the forcible entry case. However, no formalities whatever were observed in those changes such that the respondent entered a "special appearance" for the complainant in order that he could ask for the dismissal of the case for the failure of the adverse party to prosecute. No substitution of attorneys will be allowed unless there be filed: (1) a written application for such substitution; (2) the written consent of the client; (3) the written consent of the attorney substituted; and (4) in case such written consent can not be secured, there must be filed with the application proof of service of notice of such motion upon the attorney to be substituted, in the manner prescribed by the rules. Besides, the respondent honestly believed that he had appeared for the complainant only for a special purpose and that the complainant had agreed to contact his attorney of record to handle his case after the hearing, so that he did nothing more about it. WHEREFORE, the present administrative complaint is hereby DISMISSED.

CARLOS B. REYES vs. ATTY. JEREMIAS R. VITAN Carlos Reyes hired the services of respondent Atty. Jeremias Vitan for the purpose of filing the appropriate complaint or charge against his sister-in-law and her niece for refusing to abide with the Decision of the RTC ordering the partition of the properties left by Reyes s brother; and that Atty. Vitan, after receiving the amount of P17,000.00, did not take any action on complainant's case. From the IBP investigation, it was found that: It was complainant who submitted the supposed letters of the respondent Estelita Reyes and Juliet Alegonza but there were no proofs when they sent and when the same were received by the addressee. Likewise, the complaint submitted by Atty. Vitan was only a format in the sense that it was not signed by the respondent; the RTC Branch No. was left blank; there was no Civil Case No. and there was no proof that said pleading was filed which amounts only to a mere scrap of paper and not a pleading or authenticated document in the legal parlance. As it is, nothing had been done by the respondent for the complainant as his client for the legal fees he collected which was paid by the complainant as reflected in the receipts issued by the respondent in handwritten forms and signed by him. Atty. Vitan not only violated Cannon 18 of the Code of Professional Responsibility for having neglected a legal matter entrusted to him and did not inform complainant the status of his case but also disregarded the orders of the Commission without reasons, which amounted to utter disrespect of authority and unethical conduct in the practice of his profession, thus, should be sanctioned. HELD: When respondent accepted the amount of P17,000.00 from Reyes, it was understood that he agreed to take up the latter's case and that an attorney-client relationship between them was established. From then on, it was expected of him to serve his client, herein complainant, with competence and attend to his cause with fidelity, care and devotion. The act of receiving money as acceptance fee for legal services in handling complainant's case and subsequently failing to render such services is a clear violation of Canon 18 of the CPR which provides that a lawyer shall serve his client with competence and diligence. WHEREFORE, respondent Atty. Jeremias R. Vitan is hereby declared guilty of violation of Canon 18 of the Code of Professional Responsibility and is SUSPENDED from the practice of law for a period of six (6) months effective upon notice of this Decision. He is ordered to return to complainant within five (5) days from notice the sum of P17,000.00 with interest of 12% per annum from the date of the promulgation of this Decision until the full amount shall have been returned.

ANA F. RETUYA vs. ATTY. IEGO A. GORDUIZ Ana F. Retuya filed a claim for workmen's compensation against the employer of her husband who died. The decision awarded her P8,792.10 consisting of (a) P6,000 as compensation benefits, (b) P2,292.10 for medical and hospitalization expenses, (c) P200 as burial expenses and (d) P300 as attorney's fees of Atty. Iego Gorduiz. The employer proposed to compromise the claim by paying only onehalf of the total award. Ana accepted the proposal. After she had cashed the check, she was not able to contact Gorduiz and pay his fee. Then, unexpectedly she was served with a warrant of arrest for estafa. It turned out that Atty. Gorduiz executed an affidavit stating that Ana had misappropriated his attorney's fees amounting to three hundred pesos and that he had demanded payment of the amount from her but, she refused to make payment and instead, she went to Cebu and starved there for a long time. The estafa case was not tried. Atty. Erasmo M. Diola, as lawyer of Ana, offered to Atty. Gorduiz the sum of five hundred pesos as settlement of the case. The offer was accepted. The estafa case was dismissed but inspite of it, Ana felt aggrieved by the proceedings therein and she asked for the disbarment or suspension of Atty. Gorduiz and Judge Equipilag. Retuya testified hat she was willing to pay Gorduiz six hundred fifty pesos as his attorney's fee but he demanded a bigger amount. He lodged a complaint for estafa against her and was arrested. As already stated above, the estafa case was later dismissed when Ana paid Gorduiz sum of five hundred pesos. Gorduiz denied that he demanded as attorney's fees an amount higher than three hundred pesos. He explained that he filed the estafa case because after Ana had received payment of the award, she did not turn over to him the attorney's fees of three hundred pesos in spite of her promises to pay the same and his demands for payment HELD: Respondent acted precipitately in filing a criminal action against his client for the supposed misappropriation of his attorney's fees. It is not altogether clear that his client had swindled him and, therefore, there is some basis for concluding that, contrary to his lawyer's oath, he had filed a suit against her and had harassed and embarrassed her. WHEREFORE, the respondent is from the practice of law for a period of six months counted from notice of this decision. A copy of this decision should be attached to his record in the Bar Confidant's office.