At this juncture, this Court sees it fit to note that the Code of Professional Responsibility strongly militates against the petitioner’s conduct in handling the funds of his client. Rules 16.01 and 16.02 of the Code provides:
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 others kept by him.
When a lawyer collects or receives money from his client for a particular purpose (such as for filing fees, registration fees, transportation and office expenses), he should promptly account to the client how the money was spent.[30] If he does not use the money for its intended purpose, he must immediately return it to the client. His failure either to render an accounting or to return the money (if the intended purpose of the money does not materialize) constitutes a blatant disregard of Rule 16.01 of the Code of Professional Responsibility.[31]
Moreover, a lawyer has the duty to deliver his client's funds or properties as they fall due or upon demand.[32] His failure to return the client's money upon demand gives rise to the presumption that he has misappropriated it for his own use to the prejudice of and in violation of the trust reposed in him by the client.[33] It is a gross violation of general morality as well as of professional ethics; it impairs public confidence in the legal profession and deserves punishment.[34]
In Cuizon v. Macalino,[35] this Court ruled that the issuance of checks which were later dishonored for having been drawn against a closed account indicates a lawyer's unfitness for the trust and confidence reposed on him, shows lack of personal honesty and good moral character as to render him unworthy of public confidence, and constitutes a ground for disciplinary action.
This case is thus referred to the Integrated Bar of the Philippines (IBP) for the initiation of disciplinary proceedings against petitioner. In any case, should there be a finding that petitioner has failed to account for the funds received by him in trust, the recommendation should include an order to immediately return the amount of ₱130,000 to his client, with the appropriate rate of interest from the time of demand until full payment.
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