PALE - Money Matters - Comingling and Delivery of Funds

Money
Matters
⮚CO-MINGLING OF FUNDS
⮚DELIVERY OF FUNDS
CANON 16
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.
Failure of the lawyer to account all the
funds and property of his client which may
come into his possession would amount to
misappropriation which may subject him
to disbarment on the ground of grave
misconduct or a criminal prosecution for
estafa under Art. 315, par. 1(b) of the
RPC.
Adm. Case No. 5831. January 13, 2003
CESAR A. ESPIRITU, complainant, vs. ATTY.
JUAN CABREDO IV, Respondent.
CESAR A. ESPIRITU, complainant, vs. ATTY. JUAN CABREDO IV, Respondent.
FACTS:
Cesar Espiritu (complainant) filed an administrative complaint with the IBP against Atty.
Juan Cabredo IV (respondent) for failure to fulfill a fiduciary obligation to a client.
Complainant was the president of Esphar Medical Center, and he executed a promissory
note that obliges him to pay P511,956 in monthly installments to Gencars, Inc. Gencars
assigned to BPI-FSB all of its rights regarding the promissory note. Complainant failed to pay
for 3 consecutive months, and demands were made to pay their obligation.
Complainant engaged the services of respondent to represent him in the civil

case for payment. Esphar’s representative, Maritess Alejandrino, delivered P51,160
to respondent’s office. It was later found out that respondent did not deliver the
money to the court or to BPI-FSB, even failing to appear at the hearing of the
complainant’s civil case. Complainant then filed a case for fraud against respondent
after amicably settling his civil case with the other party.
Respondent’s defense was that his secretary (Rose Tria) did indeed
receive the money from Esphar, but Tria failed to inform him about the
money. Respondent shifted the blame of negligence towards his staff. He
is also willing to reimburse complainant to show his good faith and to
remove any suspicion that he used the amount for his own use and
benefit.
IBP acted on the complaint and set hearings, but respondent failed to attend
even after being rescheduled for 3 times. Eventually, the investigating
commissioner proceeded with the case and decided that respondent be suspended
from the practice of law for 3 months and ordered to return the amount to Esphar.
ISSUE:
Whether or not Atty. Cabredo should be suspended by the court for
his actions.
HELD:
YES. The SC suspended him for one year from the practice of law and ordered
him to return the money to Esphar.
The relationship between a lawyer and a client is highly fiduciary; it requires a

high degree of fidelity and good faith. Hence, in dealing with trust property, a
lawyer should be very scrupulous. Money or other trust property of the client
coming into the possession of the lawyer should be reported by the latter and
accounted for promptly and should not, under any circumstances, be commingled
with his own or be used by him.
Even after receiving notice and two other demand letters, respondent never
returned the money of complainant nor paid it to the bank. Indeed, it is
improbable that respondents secretary failed to inform complainant about the
receipt of such a substantial sum of money. In failing to account for the money of
his client, respondent violated not only the Code of Professional Responsibility but
also his oath to conduct himself with all good fidelity to his clients. Like judges,
lawyers must not only be proper but they must also appear to be so. This way, the
people’s faith in the justice system would remain unshaken.
CANON 16
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.
Counsel cannot unilaterally
retain client’s property for his
attorney’s lien.
A counsel has no right to retain or
appropriate unilaterally as lawyer’s lien
any amount belonging to his client which
may come into his possession. (Cabigao v.
Rodrigo, 57 Phil. 20)
While this rule provides that the lawyer has the right to retain the
funds of his client as attorney’s lien and charging lien, he is
still duty bound to render an accounting of his client’s
funds and property which may come into his possession in
the course of his professional employment. In the
application of attorney’s lien, a lawyer shall give notice to
his client, otherwise, the same might be construed as
misappropriation which may subject him to disciplinary
action. (Antiquiera, 2007)
Adm. Case No. 5623. December 11, 2003
FERNANDEZ, complainant, vs. ATTY. CABRERA II,
Respondent.
FERNANDEZ, complainant, vs. ATTY. CABRERA II, Respondent.
FACTS:
Fernandez engaged the services of Atty. Cabrera II to handle the cases of her
associates in Baguio City. After taking hold of the records of the cases that
Fernandez entrusted to him and after getting initially paid for the services he would
render, Atty. Cabrera II suddenly disappeared and could no longer be located in his
address or in the addresses that Fernandez gathered.
ISSUE:
Whether or not Atty. Cabrera II violate the Code of Professional
Responsibility when he accepted the records and money of the
complainant and thereafter failed to render his services?
HELD:
YES. Acceptance of money from a client establishes an attorney-client
relationship and gives rise to the duty of fidelity to the client’s cause. The CPR
require that once an attorney agrees to handle a case, he should undertake the
task with zeal, care and utmost devotion.
Atty. Cabrera’s action projects his appalling indifference to his client’s cause and
brazen disregard of his duties as a lawyer. Not only did he fail to render service of
any kind, he also absconded with the records of the cases with which he was
entrusted. Then to top it all, he kept the money complainant paid to him. Such
conduct is unbecoming of a member of the bar, for lawyer’s professional and
personal conduct must at all times be kept beyond reproach and above suspicion.
Adm. Case No. 10443. August 8, 2016
CAMPOS, JR., complainant, vs. ATTY. ESTEBAL,
Respondent.
CAMPOS, JR., complainant, vs. ATTY. ESTEBAL, Respondent.
FACTS:
Campos engaged the services of Atty. Estebal in securing tourist visas to US.
Campos paid a total of P345,000; however, Atty. Estebal failed to apply or secure
for him the US tourist visa that he promised. Thus, he demanded for the return of
his money. For failure to return his money, Campos instituted an administrative
case against Atty. Estebal.
ISSUE:
Whether or not Atty. Estebal violate the Code of Professional
Responsibility by mismanaging the fund of his client
HELD:
YES. There is hardly any doubt that Atty. Estebal’s act of receiving such
substantial sums from complainants without in the least intending to honor his
word to secure US tourist visas that he promised to get for them constitute a
breach of his professional responsibility. By mismanaging the fund of his client and
failure to return the money intended for securing US visas, Atty. Estebal failed to
observe honesty and good faith in his dealings with them. Therefore, violating Rule
16.03.
SOLIMAN, complainant, vs. ATTY. AMBOY,
Respondent.
SOLIMAN, complainant, vs. ATTY. AMBOY, Respondent.
FACTS:
Soliman engaged the services of Atty. Amboy in connection with a partition
case. No case was filed as the other co-owners were amenable to the partition.
Instead, Atty. Amboy just facilitated the issuance of the titles to the said property.
Atty. Amboy then told Soliman that someone from the Register of Deeds can help
expedite the issuance of titles for a fee of P50,000.00 which Soliman deposited to
Atty. Amboy’s bank account as payment for the latter’s contact.
However, Atty. Amboy failed to deliver the respective certificates of title.

Soliman claimed that Atty. Amboy thereafter refused to release the pertinent
documents she gave to her for the processing of the titles or give back the
P50,000.00 that was already paid to her.
ISSUE:
Whether or not Atty. Amboy violate the Code of Professional
Responsibility particularly Rule 16.03 on delivery of funds.
SOLIMAN, complainant, vs. ATTY. AMBOY, Respondent
HELD:
YES. Atty. Amboy violated the Code. Upon inquiry, the supposed contact denied
having received any amount from Atty. Amboy. In not returning the money to
Soliman after a demand therefore was made following her failure to procure the
issuance of the certificates of title, Atty. Amboy violated Canon 16, particularly Rule
16.03 thereof about delivery of funds.
Monzon, Jessa Marie M.
Law 3E
THANK YOU ☺

PALE - Money Matters - Comingling and Delivery of Funds

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PALE - Money Matters - Comingling and Delivery of Funds

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Money

Complainant engaged the services of respondent to represent him in the civil

The relationship between a lawyer and a client is highly fiduciary; it requires a

However, Atty. Amboy failed to deliver the respective certificates of title.

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