Wednesday, June 8, 2011

Duty of lawyers to account for funds of clients



In the case of AVITO YU vs. ATTY. CESAR R. TAJANLANGIT, ADM. CASE NO.  5691, March 13, 2009, respondent was ordered to render, within thirty (30) days from notice of the resolution, an accounting of all monies he had received from complainant and to itemize the nature of the legal services he had rendered, inclusive of the expenses he had incurred, in compliance with Rule 16.01 of the Code of Professional Responsibility. Thus:


          X x x.

          Complainant alleged that he had engaged the services of respondent as defense counsel in Criminal Case No. 96-150393 that resulted in a judgment of conviction against him and a sentence of thirty (30) years of imprisonment.[1]  After the motion for reconsideration and/or new trial was denied by the trial court, instead of filing an appeal, respondent filed a petition for certiorari[2] under Rule 65 of the 1997 Rules of Civil Procedure imputing grave abuse of discretion on the trial court’s part in denying the motion. This petition was subsequently denied by the Court of Appeals. Due to respondent’s alleged error in the choice of remedy, the period to appeal lapsed and complainant was made to suffer imprisonment resulting from his conviction.  In depriving complainant of his right to an appeal, respondent allegedly violated Rule 18.03[3] of the Code. Moreover, complainant averred that respondent had violated Rule 16.01[4] of the Code for failing to return the bailbond to him in the amount P195,000.00 after having withdrawn the same.[5] Further, complainant stated that respondent had failed to pay the telephone bill he had incurred during his stay at complainant’s house.[6]
         

X x x.

Records show that respondent did not serve as complainant’s lawyer at the inception of or during the trial of Criminal Case No. 96-150393 which resulted to the conviction of the latter. In fact, respondent was only engaged as counsel after the withdrawal of appearance of complainant’s lawyers and denial of the Motion for Reconsideration and/or New Trial and the supplement thereto. At that time, complainant had already been incarcerated. Significantly, complainant made no mention of the availability of the remedy of appeal at the time of respondent’s employment.

More importantly, the Court finds adequate respondent’s justification for filing the petition for certiorari instead of an appeal. Indeed, there is no showing that respondent was negligent in handling the legal matter entrusted to him by complainant.

          The Court also agrees with the IBP that it was not at all improper for respondent to have withdrawn the cash bonds as there was evidence showing that complainant and respondent had entered into a special fee arrangement. But, however justified respondent was in applying the cash bonds to the payment of his services and reimbursement  of the expenses he had incurred, the Court agrees with the IBP that he is not excused from rendering an accounting of the same. In Garcia v. Atty. Manuel,[7] the Court held that “(t)he highly fiduciary and confidential relation of attorney and client requires that the lawyer should promptly account for all the funds received from, or held by him for, the client.”[8] 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.[9]

          Finally, the Court concurs with the IBP that while it is true that respondent was not presented a copy of the unpaid telephone bill, the instant complaint itself constitutes the demand for its payment. Considering that there is no manifestation to the effect that the same has been paid, respondent should accordingly be required to settle it.

X x x.





[1]Id. at 1.

[2]Id. at 11-37.

[3]Rule 18.03: A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.

[4]Rule 16.01: A lawyer shall account for all money or property collected or received for or from the client.

[5]Supra note 2. 

[6]Id. at 195-196; Position Paper of Complainant dated  9 February 2004.

[7]443 Phil. 429 (2003).

[8]Id. at 487.

[9]Schulz v. Atty. Flores, 462 Phil. 601, 612-613 (2003).

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