SECOND DIVISION
CESAR
A. ESPIRITU,
Complainant,
Adm.
Case
No. 5831
January 13, 2003 -versus-
ATTY. JUAN
CABREDO
IV,
Respondent.
D E C I S I O N
MENDOZA,
J.:
This is an administrative
complaint filed with the Integrated Bar of the Philippines (IBP) on May
8, 2001 by complainant Cesar A. Espiritu against Atty. Juan Cabredo IV
for failure to fulfill a fiduciary obligation to a client.chanrobles virtuallaw libraryred
The complaint alleges
the following facts:chanrobles virtuallaw libraryred
On November 5, 1999,
the BPI Family Savings Bank Inc. (BPI-FSB) filed two complaints for
replevin
and damages against Esphar Medical Center, (Esphar) Inc. and its
president
Cesar Espiritu and a certain John Doe. In the first complaint, the
BPI-FSB
alleged that, on July 14, 1997, Esphar, Cesar Espiritu, and a certain
John
Doe executed in favor of Gencars, Inc. (Gencars) a promissory note in
which
they obligated themselves jointly and severally to pay the latter
P511,956.00
in monthly installments pursuant to a schedule they had agreed upon. It
was provided that failure on the part of the makers to pay any
installment
when due shall make subsequent installments and the balance of the
obligation
immediately due and demandable. The promissory note was secured by a
chattel
mortgage on an Isuzu "Close Van" (1997 model) and registered with the
Register
of Deeds and the Land Transportation Commission. On July 14, 1997,
Gencars
executed a deed of assignment in favor of the BPI-FSB, assigning to the
latter all of its rights, title and interest in the promissory note
secured
by the chattel mortgage. In 1999, Esphar, Espiritu and John Doe failed
to pay installments for three consecutive months, for which reason
demands
were made on the three to pay the entire balance of P186,806.28, with
accrued
interest at the rate of 36% per annum or to give to BPI-FSB the
possession
of the Isuzu van in order to foreclose the mortgage. As the three
failed
to comply with the demands, the BPI-FSB brought suit for replevin and
damages
against them.[1]
The second complaint
alleged similar facts involving Citimotors, Inc. as the payee of
another
promissory note in which Esphar, Espiritu and John Doe, as makers,
obligated
themselves solidarily to pay the former P674,640.00 in monthly
installments.
The promissory note was secured by a chattel mortgage on a Mitsubishi
L-300
"Exceed Montone Van" (1997 model), which BPI-FSB, as holder of the said
promissory note, sought to foreclose due to the makers’ failure to
comply
with its terms and conditions.[2]
On December 10, 1999,
Espiritu engaged the services of Atty. Juan Cabredo IV, herein
respondent,
to represent him in the two civil cases. On same day, Cabredo’s
secretary,
Rose Tria, picked up copies of the complaints from Espiritu’s office
and,
on December 14, 1999, his representative Reynaldo Nuñez received
from Esphar P16,000.00 for use as filing and acceptance fees. While the
cases were pending in court, Atty. Cabredo advised Esphar to remit
money
and update payments to BPI-FSB through the trial court. Accordingly, on
December 28, 1999 and again January 28, 2000, Esphar’s representative,
Maritess Alejandrino, delivered a total of P51,161.00 to Atty.
Cabredo’s
office. Later on, when Atty. Cabredo failed to appear at a hearing of
the
civil cases, the management of Esphar found out that he did not deliver
the sum of P51,161.00 to the court or BPI-FSB. The management of Esphar
then agreed to settle the cases amicably. For this reason, a joint
motion
to dismiss was filed by the parties, and the cases were dismissed on
May
15, 2000. Thereafter, on May 8, 2001, Espiritu filed a complaint
against
Atty. Cabredo for fraud.[3]
In his answer dated
June 6, 2001, respondent Cabredo admitted that his secretary, Rose
Tria,
had indeed received P51,161.00 from Esphar, but claimed that Tria
failed
to inform him about it. It was only when he read Esphar’s first demand
letter dated March 21, 2000 that he learned for the first time about
the
receipt of the money. Respondent claimed that he failed to get
complainant’s
demand letters of March 24, 2000 and January 5, 2001 because of lapses
on the part of his staff. He thus shifted the blame on his staff.cralaw:red
7. It is quite unfortunate
that this incident happened all thru the fault of the law firm
personnel.
In spite of respondent’s candid, honest and sincere desire to
faithfully
and religiously serve good clients, [his efforts have been] rendered
inutile
by lapses of his staff;chanrobles virtuallaw libraryred
8. Respondent believes
that complainant Cesar A. Espiritu would not have resorted to this
present
action had the firm personnel been vigilant enough to inform respondent
of this matter.chanrobles virtuallaw libraryred
Respondent said he was
willing to reimburse complainant to show his good faith and "to erase
the
suspicion that respondent intentionally spent the amount for his own
use
and benefit."[4]
Acting on the complaint,
the Integrated Bar of the Philippines (IBP) Commission on Bar
Discipline
scheduled a hearing on September 24, 2001. However, the hearing had to
be rescheduled three times - on November 14, 2001, December 14, 2001,
and
January 18, 2002 - because of respondent’s failure to appear despite
due
notice to him. In orders dated November 14, 2001[5]
and December 14, 2001,[6]
respondent was warned that the investigator would proceed with the case
if he failed to appear again in subsequent hearings. Finally, in the
order
dated January 18, 2002, Investigating Commissioner Wilfredo Reyes
ordered:
Considering that this
is the fifth (5th) time that the respondent has failed to appear
despite
notice, the undersigned Commissioner has no option but to decide the
case
on the basis of the pleadings submitted. It must be noted that despite
receipt of the Orders of the Commission, the respondent Atty. Juan
Cabredo
IV has failed to appear before the Commission on Bar Discipline.cralaw:red
This case is deemed
submitted for resolution based on the pleadings submitted by the
parties.[7]chanrobles virtuallaw libraryred
On February 13, 2002,
Commissioner Reyes submitted his report and recommendation. He found
respondent
guilty of violation of the Code of Professional Responsibility and
recommended
that the latter be suspended from the practice of law for three months
and ordered to return the amount of P51,161.00 to Esphar.[8]
In a resolution dated August 3, 2002, the IBP Board of Governors
adopted
and approved the recommendation of the investigating commissioner.[9]
Except for the penalty,
we find the recommendation is well taken.chanrobles virtuallaw libraryred
The Code of Professional
Responsibility provides:
CANON 16 - A LAWYER
SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY
COME
INTO HIS POSSESSION.cralaw:red
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.cralaw:red
The relationship between
a lawyer and a client is highly fiduciary; it requires a high degree of
fidelity and good faith.[10]
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.[11]
In this case, respondent
claims that he did not know about the receipt by his secretary on the
amount
of P51,161.00 received from Esphar until he read the first demand
letter
of the company, which stated:
March 21, 2000
JUDGE JUAN CABREDO
Cubao, Quezon Citychanrobles virtuallaw libraryred
Dear Judge Cabredo:chanrobles virtuallaw libraryred
Due to your failure
to make an interbank deposit as what we have agreed upon yesterday,
March
20, 2000, we are sending bearer, MRS. MARITESS ALEJANDRINO, to collect
the amount of P51,161.00 representing payment intended for BPI FAMILY
BANK
which was coursed through your office per your instruction.cralaw:red
We are hoping that you
will not fail to return the money through bearer hereof. Her specimen
signature
is shown below for identification purposes.
Thank you.chanrobles virtuallaw libraryred
Very truly yours,
ESPHAR MEDICAL CENTER,
INC.
(signed)
AUTHORIZED SIGNATURE
Specimen Signature of:
(signed)
MARITESS ALEJANDRINO
However, even after
receiving this notice and two other demand letters, respondent never
returned
the money of complainant nor paid it to the bank. Indeed, it is
improbable
that respondent’s 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.[12]
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.[13]
It appears that respondent,
while now a practicing lawyer, was a former judge.[14]
Thus, he should have known the ethical precepts guiding lawyers who
handle
money given to them in trust by their clients and the necessary
consequences
for violation thereof. Rule 138 of the Rules
of Court provides:chanrobles virtuallaw libraryred
Sec. 27.
Disbarment
or suspension of attorneys by Supreme Court; grounds therefor. - A
member
of the bar may be disbarred or suspended from his office as attorney by
the Supreme Court for any deceit, malpractice, or other gross
misconduct
in such office, grossly immoral conduct, or by reason of his conviction
of a crime involving moral turpitude, or for any violation of the oath
which he is required to take before admission to practice, or for a
willful
disobedience of any lawful order of a superior court, or for corruptly
or willfully appearing as an attorney for a party to a case without
authority
so to do. The practice of soliciting cases at law for the purpose of
gain,
either personally or through paid agents or brokers, constitutes
malpractice.chanrobles virtuallaw libraryred
From the evidence
presented
by complainant, which respondent failed to rebut, it is clear that the
breach of trust committed by respondent amounted to deceit, as well as
a violation of his oath, for which he should be penalized with either
disbarment
or suspension. While we agree with the findings of the investigating
commissioner,
we find the recommended penalty of suspension for three months to be
too
light. In Reyes v. Maglaya[15]
a lawyer was suspended for one year for failing to return P1,500.00
belonging
to his client despite numerous demands. In Castillo v. Taguines,[16]
a lawyer failed to deliver to his client P500.00, representing the
monetary
settlement of a civil suit despite demands. To make matters worse, he
fooled
the client by issuing a bouncing check. He was suspended for one year.chanrobles virtuallaw libraryred
For his failure to account
for P51,161.00 received from his client and to restitute it without any
reason, respondent should be suspended for one year.cralaw:red
WHEREFORE, Atty. Juan
Cabredo IV is hereby SUSPENDED for one (1) year and ORDERED to
immediately
return to Esphar Medical Center, Inc. the sum of P51,161.00, with
WARNING
that a repetition of the same or similar acts will be dealt with more
severely.
Let copies of the Decision be entered in his record as an attorney and
be furnished the Integrated Bar of the Philippines (IBP) and all the
courts
in the country for their information and guidance.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Bellosillo, J., (Chairman),
Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.
____________________________
Endnotes:
[1]
Annex A of the Complaint; Rollo, pp. 4-12.
[2]
Annex B of the Complaint; id., pp. 13-21.
[3]
Complaint; Rollo, pp. 1-2.
[4]
Answer; Rollo, pp. 36-37.
[5]
Id., p. 56.
[6]
Id., p. 58.
[7]
Id., p. 61.
[8]
Report and Recommendation of Cmr. Wilfredo Reyes, pp. 4-5; Rollo, pp.
67-68.
[9]
Resolution No. XV-2002-411, CBD Case No. 01-833, Cesar A. Espiritu v.
Atty.
Juan Cabredo, IV; Rollo, p. 63.
[10]
Angeles v. Uy, 330 SCRA 6 (2000).
[11]
Marquez v. Meneses, 321 SCRA 1 (1999), citing Canon 11 of the Canons of
Professional Ethics.
[12]
Rule 138, Rules
of
Court.
[13]
See Angeles v. Uy, 330 SCRA 6 (2000).
[14]
Annex H of Complaint; Rollo, pp. 27, 32-33. Complainant refers to
respondent
as "Judge Juan Cabredo IV" in a letter to the IBP Commission on Bar
Discipline
and in two demand letters.
[15]
243 SCRA 214 (1995).
[16]254
SCRA 554 (1996). |