EN BANC
SUSANA
DE GUZMAN
BUADO AND NENA LISING,
Complainants,
A.C.
No. 5182
August 12, 2004
-versus-
ATTY.
EUFRACIO T.
LAYAG,
Respondent.
R E S O L U T I O
N
PER
CURIAM:
The instant case arose
from a verified letter-complaint[1]
for malpractice filed with this Court on December 9, 1999, against
Respondent
Atty. Eufracio T. Layag by Susana de Guzman Buado and Nena
Lising.
The complaint stated that de Guzman Buado and Lising had instituted a
criminal
action for Estafa[2]
against Atty. Layag with the Office of the City Prosecutor of Caloocan
City and that the City Prosecutor had resolved that there was prima
facie
evidence to justify the filing in court of informations for two (2)
counts
of estafa against Atty. Layag.[3]
Accordingly, two cases for estafa, docketed as Criminal Cases Nos.
C-58087
and C-58088 were filed with the Regional Trial Court (RTC) of Caloocan
City, Branch 124.[4]chanrobles virtual law library
In our resolution of
January 31, 2000, we directed that Atty. Layag be furnished a copy of
the
Complaint for his comment.cralaw:red
In his Comment dated
April 11, 2000, Atty. Layag denied committing any malpractice, saying
that
he merely complied with the wishes of his client, the late Rosita de
Guzman,
to deliver any money judgment in Civil Case No. C-14265 before the RTC
of Caloocan City, Branch 121, to her attorney-in-fact, one Marie Paz P.
Gonzales. Respondent prayed that the complaint be dismissed for
want
of merit.cralaw:red
Thereafter, this Court
resolved on July 10, 2000 to refer the matter to the Integrated Bar of
the Philippines (IBP) for investigation, report, and recommendation.[5]
As culled from the Report
and Recommendation[6]
dated September 25, 2003 of the IBP Investigating Commissioner, Atty.
Milagros
V. San Juan, the facts in this case are as follows:chanrobles virtual law library
Herein complainant Lising
and her sister, Rosita de Guzman (mother of herein complainant Susana
de
Guzman Buado), were the plaintiffs in Civil Case No. C-14265, entitled
"Rosita de Guzman, et al., vs. Inland Trailways, Inc.", which was
decided
by the RTC of Caloocan City, Branch 121, in favor of the plaintiffs on
May 16, 1991. Both Lising and de Guzman were represented in said
case by herein respondent, Atty. Layag. The losing party, Inland
Trailways, Inc., appealed the trial court’s judgment to the Court of
Appeals,
said appeal being docketed as CA-G.R. CV No. 34012.cralaw:red
In its Decision dated
January 5, 1995, the appellate court affirmed the Judgment of the trial
court. However, on July 3, 1993, or while CA-G.R. CV No. 34012
was
pending before the appellate court, de Guzman died.cralaw:red
Pursuant to the judgment
against it, Inland Trailways, Inc., issued the following checks:
(1) Traders Royal Bank Check No. 0000790549 dated February 15, 1996 for
P15,000 payable to Atty. Layag; (2) Traders Royal Bank Check No.
0000790548
dated March 8, 1996 in the amount of P30,180 payable to Lising; and (3)
Traders Royal Bank Check No. 0000790547 dated March 8, 1996 for the sum
of P49,000 payable to de Guzman who had by then already passed
away.
The aforementioned checks were received by respondent lawyer from Pablo
Gernale, Jr., the deputy sheriff of the RTC in February 1996.
Atty.
Layag did not inform Lising and the heirs of de Guzman about the
checks.
Instead he gave the checks to one Marie Paz Gonzales for encashment on
the strength of a Special Power of Attorney, purportedly executed by de
Guzman constituting Gonzales as her attorney-in-fact. The Special
Power of Attorney supposedly authorized Gonzales, among others, to
encash,
indorse, and/or deposit any check or bill of exchange received in
settlement
of Civil Case No. C-14265.chanrobles virtual law library
It was only in February
1998 that Lising and de Guzman Buado, while checking the status of
Civil
Case No. C-14265, found that judgment had been rendered in the said
case
and that the losing party had paid the damages awarded by issuing
checks
which were received by their counsel, Atty. Layag, two years
earlier.
De Guzman Buado and Lising then made demands upon Atty. Layag to give
them
the proceeds of the checks, but to no avail. Marie Paz Gonzales
eventually
gave Lising P10,000. No further amounts were remitted to either
Lising
or de Guzman Buado despite demands by them.cralaw:red
After the parties presented
their oral and documentary evidence before the IBP Commissioner, the
matter
was deemed submitted for resolution. On September 25, 2003, the
IBP
Investigating Commissioner made the following recommendations:
It is
submitted
that respondent has betrayed the trust of her (sic) clients. It
is
recommended that respondent be suspended from the practice of law for
the
maximum period allowed under the law and that he be ordered to turn
over
to the Complainants the amounts he received in behalf of the
complainants
Susana de Guzman Buado and Nena Lising.
Respectfully
submitted[7]
The IBP Investigating
Commissioner,
in her recommendation, found that in giving the checks to a party not
entitled
to them, Atty. Layag disregarded the rights and interests of his
clients
in violation of Canons 15,[8]
16,[9]
and 17[10]
of the Code of Professional Responsibility.chanrobles virtual law library
On the Special Power
of Attorney[11]
purportedly executed by Rosita de Guzman in favor of Marie Paz
Gonzales,
the Investigating Commissioner held that even assuming arguendo that
there
was indeed a Special Power of Attorney, it nonetheless had no force and
effect after the death of Rosita de Guzman. Hence, any authority
she had conferred upon Gonzales was already extinguished.
According
to the IBP Investigating Commissioner, since respondent represented de
Guzman in Civil Case No. C-14265, upon her death, respondent had the
obligation
to preserve whatever benefits accrued to the decedent on behalf of and
for the benefit of her lawful heirs.cralaw:red
On October 25, 2003,
the IBP Board of Governors passed its resolution on the case, affirming
with modification the recommendation by the Investigating Commissioner,
thus:
RESOLVED to
ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the above-entitled
case, herein made part of this Resolution/Decision as Annex “A”; and,
finding
the recommendation fully supported by the evidence on record and the
applicable
laws and rules, with modification, and considering that Respondent has
betrayed the trust of her (sic) clients in violation of Canon 15, 16
and
17 of the Code of Professional Responsibility, Atty. Eufracio T. Layag
is hereby DISBARRED and Ordered to turn over immediately to the
Complainants
the amounts received in their behalf.[12]
Respondent then moved
for
reconsideration of the foregoing resolution before this Court. In
view of the recommended penalty of disbarment, the Court En Banc
accepted
the respondent’s motion for our consideration.chanrobles virtual law library
Placed in issue are:
(1) the sufficiency of the evidence to prove the respondent’s liability
for violation of the Code of Professional Responsibility; and (2) the
propriety
of the recommended penalty.cralaw:red
After careful scrutiny
of the proceedings conducted by the IBP Investigating Commissioner, we
find that the factual findings made in her report and recommendation
are
well supported by the evidence on record. Respondent Atty. Layag
does not deny receiving the checks in question, but he claimed he
turned
over said checks to Marie Paz Gonzales, pursuant to the alleged Special
Power of Attorney executed by Rosita de Guzman in favor of Gonzales,
authorizing
the latter to encash, indorse, or deposit any check received as a
result
of the judgment in Civil Case No. C-14265. Respondent contended
that
in so doing, he was being true to the wishes and desires of his client,
the late Rosita de Guzman.cralaw:red
The respondent’s arguments
fail to persuade us. As a lawyer, with more than thirty (30)
years
in practice, respondent is charged with knowledge of the law. He
should know that it was error for him to rely on a Special Power of
Attorney
after the death of the principal, Rosita de Guzman. As pointed
out
by the IBP Investigating Commissioner, even assuming there was a
Special
Power of Attorney, although respondent could not produce a copy nor
prove
its existence, when de Guzman died that document ceased to be
operative.
This is clear from Article 1919[13]
of the Civil Code. While there are instances, as provided in Article
1930,[14]
where the agency is not extinguished by the death of the principal, the
instant case does not fall under the exceptions. Clearly, at the
time Atty. Layag received and turned over the checks corresponding to
the
award of damages in Civil Case No. C-14265 in February 1996, there was
no longer any valid Special Power of Attorney. Again, as pointed
out by the IBP Investigating Commissioner, respondent’s duty when the
award
of damages was made, was to preserve and deliver the amount received to
the heirs of his client, de Guzman, and not to any other person.cralaw:red
With respect to the
check from Inland Trailways, Inc., and made payable to Lising,
respondent
should have delivered it directly to Lising. The Special Power of
Attorney, which he keeps on harping on, did not cover Lising’s
case.
Its coverage - assuming again that the document existed - pertained
only
to de Guzman. Respondent certainly could not take refuge in any
provision
of said Special Power of Attorney insofar as Lising’s check is
concerned.chanrobles virtual law library
Respondent now denies
any attorney-client relationship with Lising because, as he insists, he
was only engaged by de Guzman. But in his Comment to the
Complaint,
respondent admits that he included Lising when they filed suit against
Inland Trailways, Inc., before the RTC of Caloocan City, upon the
request
of de Guzman. Absent any showing on record that Lising was
represented
by another counsel in Civil Case No. C-14265 and the subsequent appeal,
CA-G.R. CV No. 34012, the only conclusion we could reach is that she
was
also represented by Atty. Layag. But even if granted the opposite
conclusion that he was not Lising’s lawyer, it cannot exonerate the
respondent
with respect to Lising’s check. It would only make things worse
for
him, for it would show that he misappropriated the monetary award of a
party whom he did not represent. In our view, respondent’s
insistence
that Lising was not his client is more damaging to his cause.cralaw:red
In the course of his
professional relationship with his client, a lawyer may receive money
or
property for or from the client. He shall hold such property in
trust,
and he is under obligation to make an accounting thereof as required by
Rule 16.01[15]
of the Code of Professional Responsibility. This obligation to
hold
property in trust includes money received by a lawyer as a result of a
judgment favorable to his client.[16]
In the present case, Atty. Layag did not make an accounting of the
judgment
awards he received and the checks he allegedly turned over to Marie Paz
Gonzales. Further, when complainants demanded that he deliver to
them the checks pertaining to de Guzman Buado and Lising for the
judgment
in Civil Case No. C-14265, Atty. Layag did not do so, in violation of
Rule
16.03.[17]
The inescapable conclusion
we can make, given the circumstances in this case, is that by his
actions,
respondent failed to observe the utmost good faith, loyalty, candor and
fidelity required of an attorney in his dealings with his
clients.
His acts of misappropriating the money of his clients are grossly
immoral
and unprofessional. There is no doubt in our mind that he
deserves
severe punishment.cralaw:red
But is disbarment the
proper penalty for Atty. Layag?
Disbarment is the most
severe form of disciplinary sanction. The power to disbar must
always
be exercised with great caution, for only the most imperative reasons,[18]
and in clear cases of misconduct affecting the standing and moral
character
of the lawyer as an officer of the court and a member of the bar.[19]
Accordingly, disbarment should not be decreed where any punishment less
severe – such as a reprimand, suspension, or fine - would accomplish
the
end desired.[20]
In the instant case, what we seek to exact from the respondent is
strict
compliance and fidelity with his duties to his
clients.
Accordingly, we agree with the recommendation of the IBP Investigating
Commissioner that suspension, rather than disbarment, of respondent
would
suffice. In our view, however, such suspension should be
indefinite,
subject to further orders by this Court.chanrobles virtual law library
WHEREFORE, the IBP Board
of Governors Resolution No. XVI-2003-230 in Administrative Case No.
5182
finding respondent LIABLE for violation of the Canons 15, 16, and 17 of
the Code of Professional Responsibility is hereby AFFIRMED with the
MODIFICATION
that instead of the recommended penalty of disbarment, respondent Atty.
Eufracio T. Layag is hereby INDEFINITELY SUSPENDED from the practice of
law. Respondent is further DIRECTED to immediately turn over to
complainants
Susana de Guzman Buado and Nena Lising the amounts of P49,000.00 and
P30,180.00,
respectively, as well as all other amounts if any, he might have
received
for and on their behalf. Respondent is also ORDERED to REPORT to
the Office of the Bar Confidant his compliance within fifteen (15) days
from receipt hereof. Let a copy of this Resolution be attached to
the personal record of Atty. Eufracio T. Layag and copies be furnished
the Integrated Bar of the Philippines and the Office of the Court
Administrator
for dissemination to all lower courts. This Resolution is
immediately
executory.cralaw:red
SO ORDERED.cralaw:red
Davide,
Jr., C.J.,
Puno, Panganiban,Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio,
Austria-Martinez, Corona, Carpio Morales, Callejo, Sr., Azcuna, Tinga,
and Chico-Nazario, JJ.
, concur.
____________________________
Endnotes:
[1]
Rollo, pp. 1-2.
[2]
Rollo, pp. 4-7. Docketed as I.S. No. 98-13045.
[3]
Id. at 7.chanrobles virtual law library
[4]
Id. at 8-9.
[5]
Id. at 144.
[6]
Id. at 164-169.
[7]
Id. at 169.chanrobles virtual law library
[8]
CANON 15 – A lawyer shall observe candor, fairness, and loyalty in all
his dealings and transactions with his client.
[9]
CANON 16 – A lawyer shall hold in trust all moneys and properties of
his
client that may come into his possession.
[10]
CANON 17 – A lawyer owes fidelity to the cause of his client and he
shall
be mindful of the trust and confidence reposed in him.
[11]
Rollo, p. 34.chanrobles virtual law library
[12]
Id. at 163.chanrobles virtual law library
[13]
ART. 1919. Agency is extinguished:chanroblesvirtuallawlibrary
(1)
By its revocation;chanrobles virtual law library
(2)
By the withdrawal of the agent;chanrobles virtual law library
(3)
By the death, civil interdiction, insanity or insolvency of the
principal
or of the agent;
(4)
By the dissolution of the firm or corporation which entrusted or
accepted
the agency;
(5)
By the accomplishment of the object or purpose of the agency;chanrobles virtual law library
(6)
By the expiration of the period for which the agency was
constituted.
[Emphasis Supplied]
[14]
ART. 1930. The agency shall remain in full force and effect even after
the death of the principal, if it has been constituted in the common
interest
of the latter and of the agent, or in the interest of a third person
who
has accepted the stipulation in his favor.chanrobles virtual law library
[15]
Rule 16.01 – A lawyer shall account for all the money or property
collected
or received for or from the client.
[16]
See Angeles v. Uy, Jr., A.C. No. 5019, 6 April 2000, 330 SCRA 6, 19-20.
[17]
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.chanrobles virtual law library
[18]
De Guzman v. Tadeo, Adm. Case No. 879, 27 September 1939, 68 Phil. 554,
558.
[19]
Montano v. Integrated Bar of the Philippines, A.C. No. 4215, 21 May
2001,
358 SCRA 1, 9.
[20]
Paras v. Paras, A.C. No. 5333, 18 October 2000, 343 SCRA 414, 426
citing
Resurreccion v. Sayson, Adm. Case No. 1037, 14 December 1998, 300 SCRA
129, 136-137; Saburnido v. Madroño, A.C. No. 4497, 26 September
2001, 366 SCRA 1, 7. |