The Lawyer And The Moneys Or Properties Of His Clients court, let alone securing, its authority. - Atty.
its authority. - Atty. Salomon Jr. v. Atty. Frial,
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 in the
Rules of Court.
Rule 16.04 - A lawyer shall not borrow money from his client unless the
client's interest 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.
Rule 138 Sec. 24. Compensation of attorneys; agreement as to fees. -
An attorney shall be entitled to have and recover from his client no
more than a reasonable compensation for his services, with a view to
the importance of the subject matter of the controversy, the extent of
the services rendered, and the professional standing of the attorney.
xxx
Rule 138 Sec. 25. Unlawful retention of client's funds; contempt. -
When an attorney unjustly retains in his hands money of his client after
it has been demanded, he may be punished for contempt as an officer
of the Court who has misbehaved in his official transactions; but
proceedings under this section shall not be a bar to a criminal
prosecution.
Rule 138 Sec. 37. 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 funds to the
satisfaction thereof.
He shall also have a lien to the same extent upon all judgments for the
payment of money, and executions issued in pursuance of such
judgments, 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
judgment, 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 just fees and disbursements.
Lawyer took custody of 2 cars subject of preliminary attachment
According to Atty. Salomon, the attaching sheriff of Manila, instead of
depositing the attached cars in the court premises, turned them over to
Atty. Frial, Lo’s counsel.
Very patently, Atty. Frial was remiss in his obligation of taking good
care of the attached cars. He also allowed the use of the Nissan Sentra
car by persons who had no business using it. He did not inform the
court or at least the sheriff of the destruction of the Volvo car. What is
worse is that he took custody of them without so much as informing the
A.C. No. 7820 [2008]
Lawyer withdraw money deposited to the Branch Clerk of Court
without informing his client
Complainant, through his new counsel Atty. Miguel D. Larida, sent
respondent on 30 June 2003 a final demand letter for the accounting
and return of the P255,000. Respondent failed to reply.
Respondent committed a flagrant violation of his oath when he
received the sum of money representing the monthly rentals intended
for his client, without accounting for and returning such sum to its
rightful owner. Respondent received the money in his capacity as
counsel for complainant. Therefore, respondent held the money in trust
for complainant.
Respondent should have immediately notified complainant of the trial
court’s approval of the motion to withdraw the deposited rentals. Upon
release of the funds to him, respondent could have collected any lien
which he had over them in connection with his legal services, provided
he gave prompt notice to complainant. A lawyer is not entitled to
unilaterally appropriate his client’s money for himself by the mere fact
that the client owes him attorney’s fees. In this case, respondent did
not even seek to prove the existence of any lien, or any other right that
he had to retain the money.
Respondent’s failure to turn over the money to complainant despite the
latter’s demands gives rise to the presumption that he had converted
the money for his personal use and benefit. - Almandrez Jr. v. Atty.
Langit, A.C. No. 7057 [2006]
Business transaction between lawyer and client is discourage
As a rule, a lawyer is not barred from dealing with his client but the
business transaction must be characterized with utmost honesty and
good faith. The measure of good faith which an attorney is required to
exercise in his dealings with his client is a much higher standard that is
required in business dealings where the parties trade at "arms length."
Business transactions between an attorney and his client are
disfavored and discouraged by the policy of the law. Hence, courts
carefully watch these transactions to assure that no advantage is taken
by a lawyer over his client. This rule is founded on public policy for, by
virtue of his office, an attorney is in an easy position to take advantage
of the credulity and ignorance of his client. Thus, no presumption of
innocence or improbability of wrongdoing is considered in an attorney’s
favor. - Chua and Hsia v. Atty. Mesina Jr., A.C. No. 4904 [2004]
No services rendered,
money must be returned
It is now clear to us that since respondent did not take any step to
assist complainant in her case, charging P56,000.00 is improper.
While giving legal advice and opinion on complainant’s problems and
those of her family constitutes legal service, however, the attorney’s
fee must be reasonable. Obviously, P56,000.00 is exorbitant.
We cannot understand why respondent initially demanded P8,000.00
as filing fee from complainant when he very well knew that the docket
fee for Civil Case No. 00-044 had been paid. If it was intended as a
docket fee for another case, why did he not file the corresponding
complaint?
Respondent lawyer did not return the money to complainant despite
demand following his failure to file the case. - Dalisay v. Atty.
Mauricio, Jr., A.C. No. 5655 [2006]
Issuance of receipts is part of ethical practice
Thirdly, Atty. Ricafort explained that he had no copies of the receipts
for the P65,000.00 and P15,000.00 issued to the Tarogs because "the
practice of lawyers in most instances is that receipt is issued without
duplicate as it behooves upon the client to demand for a receipt." But
such explanation does not persuade us. Ethical and practical
considerations made it both natural and imperative for him to issue
receipts, even if not demanded, and to keep copies of the receipts for
his own records. He was all too aware that he was accountable for the
moneys entrusted to him by the clients, and that his only means of
ensuring accountability was by issuing and keeping receipts.
He reneged on his duty to render an accounting to his clients showing
that he had spent the amounts for the particular purposes intended. He
was thereby presumed to have misappropriated the moneys for his
own use to the prejudice of his clients and in violation of the clients’
trust reposed in him. He could not escape liability, for upon failing to
use the moneys for the purposes intended, he should have
immediately returned the moneys to his clients. –Tarog v. Atty.
Ricafort, A.C. No. 8253 March 15, 2011
Lawyer should not deposit the funds in his personal account
For him to deposit the amount of P65,000.00 in his personal account
without the consent of the Tarogs and not return it upon demand, and
for him to fail to file the memorandum and yet not return the amount of
P15,000.00 upon demand constituted a serious breach of his fiduciary
duties as their attorney. He reneged on his duty to render an
accounting to his clients showing that he had spent the amounts for the
particular purposes intended. - Tarog v. Atty. Ricafort, A.C. No. 8253
[2011]
Depositing it in his personal account with the consent of client is
ethical?
When to deliver funds of clients
Thus, having obtained the funds from the [client] in the course of his
professional employment, [a lawyer] had the obligation to deliver such
funds to his clients
(a) when they became due, or
(b) upon demand.
- Tarog v. Atty. Ricafort, A.C. No. 8253 [2011]
Lending money to client
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. - Linsangan v.
Atty. Tolentino, A.C. No. 6672 [2009]
Purpose of prohibiting lending of money to 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. 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.
- Linsangan v. Atty. Tolentino, A.C. No. 6672 [2009]
Ill-effects of lending money to clients
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.
Either of these circumstances may:
a. lead the lawyer to consider his own recovery rather than that of his
client, or
b. 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. - Linsangan v. Atty. Tolentino, A.C. No.
6672 [2009]
Rule 16.01 includes money judgment in favor of client
There is no question that the money or property received by a lawyer
for her client properly belongs to the latter. Conformably with these
canons of professional responsibility, we have held that a lawyer is
obliged to render an accounting of all the property and money she has
collected for her client. This obligation includes the prompt reporting
and accounting of the money collected by the lawyer by reason of a
favorable judgment to his client. - Bayonla v. Atty. Reyes, A.C. No.
4808 [2011]
Lawyer and client must agree
with the amount before retaining lien
is validly applied
In both cases, however, it is to be assumed that the client agrees
with the lawyer in the amount of attorney's fees. In case of a
disagreement, or when the client disputes the amount claimed by the
lawyer for being unconscionable, the lawyer should not arbitrarily
apply the funds in his possession to the payment of his fees;
instead, it should behoove the lawyer to file, if he still deems it
desirable, the necessary action or the proper motion with the proper
court to fix the amount of his attorney's fees. If a lawyer were allowed
to unilaterally apply the funds in his hands in payment of his
claimed compensation even when there is a disagreement
between him and his client would not only be violative of the trust
relationship between them but can also open the door to possible
abuse by those who are less than mindful of their fiduciary duty. - J.K.
Mercado and Sons v. Atty. De Vera and Atty. Bandalan, A.C. No. 3066
[2001]
Misuse of filing fee violates the rule that lawyers must be
scrupulously careful in handling money entrusted to them in their
professional capacity
Central to this case are the following alleged acts of respondent
lawyer: (a) his non-filing of the Complaint on behalf of his client and (b)
his appropriation for himself of the money given for the filing fee. -
Burbe v. Atty. Magulta, AC No. 99-634 [2002]
Appropriating the entire award is a violation of Canon 16 and Rule
16.01
The Court is not oblivious of the right of a lawyer to be paid for the
legal services he has extended to his client but such right should not
be exercised whimsically by appropriating to himself the money
intended for his clients. There should never be an instance where
the victor in litigation loses everything he won to the fees of his
own lawyer. - Rivera v. Atty. Angeles, A.C. No. 2519 [2000]
• He is obliged to render a prompt accounting of all the
property and money he has collected for his client." "The fact
that a lawyer has a lien for his attorney's fees on the money
in his hands collected for his client does not relieve him from
the obligation to make a prompt accounting. "Moreover, a
lawyer has no right "to unilaterally appropriate his client's
money for himself by the mere fact alone that the client owes
him attorney's fees.“ – Viray v. Atty. Sanicas, A.C. No. 7337
September 29, 2014

Obligation of lawyer once the money or property intended for his
client is received
should be reported and accounted for promptly and
should not under any circumstances be commingled with his own or
be used by him.
Duty to return immediately
When a lawyer receives money from a client for a particular purpose
involving the client-attorney relationship, he is bound to render an
accounting to the client showing that the money was spent for that
particular purpose. If the lawyer does not use the money for the
intended purpose, he must immediately return the money to his client. -
Navarro v. Atty. Solidum, Jr., A.C. No. 9872 January 28, 2014

- Judge Angeles v. Atty. Uy, Jr., A.C. No. 5019. April 6, 2000

Misappropriation is not required

The records do not clearly show whether Attorney Uy had in fact

appropriated the said amount; in fact, Mrs. Del Rosario acknowledged
that she had received it on February 12, 1999. They do show,
however, that respondent failed to promptly report that amount to
her. This is clearly a violation of his professional responsibility.

Verily, the question is not necessarily whether the rights of the clients
have been prejudiced, but whether the lawyer has adhered to the
ethical standards of the bar. - Judge Angeles v. Atty. Uy, Jr., A.C. No.
5019. April 6, 2000

Avoid keeping the money of client

Keeping the money in his possession without his client's

knowledge only provided Atty. Uy the tempting opportunity to
appropriate for himself the money belonging to his client. This situation
should, at all times, be avoided by members of the bar. Like judges,
lawyers must not only be clean; they must also appear clean. This way,
the people's faith in the justice system would remain undisturbed. -
Judge Angeles v. Atty. Uy, Jr., A.C. No. 5019. April 6, 2000

Severe punishment warranted

The conversion of funds entrusted to an attorney is a gross violation of

general morality as well as professional ethics. It impairs public
confidence in the legal profession, "It deserves severe punishment." -
Daroy, et. al. v. Atty, Legaspi, A.M. No. 936 July 25, 1975

Unjust retention of client’s money punishable by contempt

Section 25, Rule 138 of the Rules of Court provides that when an
attorney unjustly retains in his hands money of his client after it has
been demanded, he may be punished for contempt as an officer of the
court who has misbehaved in his official transactions and he is liable to
a criminal prosecution. - Daroy, et. al. v. Atty. Legaspi, A.M. No. 936
July 25, 1975

Duty to account

In any event, even assuming that respondent was authorized to

receive payments, the same does not exempt him from his duty of
promptly informing his client of the amounts he received in the course
of his professional employment. "The fiduciary nature of the
relationship between counsel and client imposes on a lawyer the duty
to account for the money or property collected or received for or from
the client....