LAWYERS FIDUCIARY OBLIGATIONS

1. Judge ADORACION G. ANGELES, complainant, vs. Atty. THOMAS C. UY JR.,

respondent. A.C. No. 5019. April 6, 2000
FACTS: Judge Adoracion G. Angeles of the Regional Trial Court of Caloocan City
(Branch 121) charged Atty. Thomas C. Uy Jr. with violation of Canon 16 of the Code of
Professional Responsibility. Complainant states that respondent's acts, which had
earlier been held contemptible in her February 10, 1999 Order, also rendered him
administratively liable. In the said Order, she averred that accused Norma Trajano
manifested that she had already settled in full the civil aspect in Crim. Case No. C54177 (98) in the total amount of P36,500.00. She further alleged that she paid
P20,000.00 directly to the private complainant Primitiva Malansing Del Rosario and the
balance of P16,500.00 was delivered to Atty. Thomas C. Uy, Jr., the lawyer of the
private complainant. However, the latter failed to turn over the said amount to private
complainant. The Court directed Atty. Uy Jr. to produce the money but the latter argued
that he kept it in his office. Consequently, the Court suspended the proceedings to
enable Atty. Uy to get the money from his law office which is located only at the second
floor of the same building where this court is located. Unfortunately, Atty. Uy did not
show up anymore and not even his shadow appeared in Court.
In compliance with this Court's Resolution, Respondent Uy filed his Comment on June
7, 1999. Denying that he violated Canon 16 of the Code of Professional Responsibility,
he explained that Primitiva Del Rosario did not get the money when handed the same
because she wanted it to be saved in whole together with the future installment
payments of Norma Trajano and to be kept in the office of the respondent as wished by
her son Bong Del Rosario and that the said sum of money was kept in the filing cabinet
in the office of the respondent. He further maintained that it was only after Judge
Angeles issue the February 10, 1999 Order that his client relented and accepted the
money on February 12, 1999.
ISSUE: Whether Atty. Uy Jr. violated Canon 16 of the Code of Professional
Responsibility.
HELD: YES. Canon 16 of the Code of Professional Responsibility provides that "a
lawyer shall hold in trust all moneys and properties of his client that may come into his
possession." Furthermore, Rule 16.01 of the Code also states that "a lawyer shall
account for all money or property collected or received for or from the client."
In the present case, it is clear that respondent failed to promptly report and account for
the P16,500 he had received from Norma Trajano on behalf of his client, Primitiva Del
Rosario. Although the amount had been entrusted to respondent on December 14,
1998, his client revealed during the February 10, 1999 hearing that she had not yet
received it. Worse, she did not even know where it was.
The records do not clearly show whether Attorney Uy had in fact appropriated the said
amount; in fact, Mrs, Del Rosario acknowledge that she had received it on February 12,

1999. They do show, however, that respondent failed to promptly report that amount to
her. This is clearly a violation of his professional responsibility. Indeed, in Aya v.
Bigornia, the Court ruled that money collected by a lawyer in favor of his clients must be
immediately turned over to them. In Daroy v. Legaspi, the Court held that "lawyers are
bound to promptly account for money or property received by them on behalf of their
clients and failure to do so constitutes professional misconduct. For misappropriating
and failing to promptly report and deliver money they received on behalf of their clients,
some lawyers have been disbarred and others have been suspended for sixmonths. In
the present case, the records merely show that respondent did not promptly report that
he received money on behalf of his client. There is no clear evidence of
misappropriation. Under the circumstances, we rule that he should be suspended for
one month.
2. NAKPIL VS VALDEZ
FACTS: Jose Nakpil, husband of the complainant, became interested in purchasing a
summer residence in Moran Street, Baguio City. For lack of funds, he requested
respondent to purchase the Moran property for him. They agreed that respondent would
keep the property in thrust for the Nakpils until the latter could buy it back. Pursuant to
their agreement, respondent obtained two (2) loans from a bank which he used to
purchase and renovate the property. Title was then
The ownership of the Moran property became an issue in the intestate proceedings
when Jose Nakpil died. Respondent acted as the legal counsel and accountant of his
widow. Respondent Moran property to his company, the Caval Realty Corporation.
ISSUE: Whether or not there was conflict of interest between the respondent Atty.
Valdes and the complainant.
HELD: YES. Respondent was suspended from practice of law for one (1) year.
RATIO: [T]here is no question that the interests of the estate and that of its creditors are
adverse and, at the same time, computed the claims of two creditors of the estate.
There is clearly a conflict between the interest of the estate which stands as the debtor,
and that of the two claimants who are creditors of the estate.
[R]espondent undoubtedly placed his law firm in a position where his loyalty to his client
could be the claims were valid and did not prejudice the estate, the set-up is still
undesirable. The test to determine whether there is a conflict of interest in the
representation is probability, not certainty the probability of conflict of interest.
Public confidence in law and lawyers may be eroded by the irresponsible and improper
conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting
in a manner that would promote public confidence in the integrity of the legal profession.
Members of the bar are expected to always live up to the standards embodied in the
Code of Professional Responsibility as the relationship between an attorney and his
client is highly fiduciary in nature and demands utmost fidelity and good faith. In the
case at bar, respondent exhibited less than full fidelity to his duty to observe candor,

fairness and loyalty in his dealings and transactions with his clients.
3. GERVACIO L. LIWAG, complainant, vs. ATTY. GILBERTO NERI, Respondent.
FACTS:
Prior to October 21, 1952, the spouses Enrique and Ursula Pineda requested the
complainant to act as counter-indemnitor with the Manila Surety & Fidelity Company in
a bond posted for said spouses in favor of the National Rice and Corn Corporation
(NARIC). When the Pinedas had failed to liquidate their obligation, the NARIC enforced
the bond against the Manila Surety and Fidelity Company and the latter in turn collected
from the complainant the sum of P2,951.35. Having failed to recover extra-judicially said
amount from the Pinedas, the complainant engaged the services of the respondent who
agreed to handle the matter on a contingent fee of forty per cent.
As they were his neighbors, Neri, acting slowly, tried to talk to the Pinedas, who
admitted their indebtedness and pleaded for time to pay the same. On or about July 17,
1956, when no payment had been made, the respondent wrote a letter of demand,
threatening to take judicial action if the Pinedas would still not meet their obligation. On
the same date, the complainant delivered to the respondent the amount of P30.00 as
the filing fee for the necessary complaint. The respondent did not actually file any
complaint, for the alleged reason that debtor spouses had given assurances to pay,
although he informed the complainant that he had already done so. It did not take long
before the truth was discovered and before the complainant was provoked into
commencing this administrative case.
ISSUE: Whether or not Neri should be disbarred.
HELD: No. It is an established fact that the respondent had received from the
complainant P30.00 as filing fee. The respondent argues that his services were not
engaged solely "for the purpose of filing the corresponding collection complaint", but to
collect from the Pinedas the amount owed; or in other words, that the respondent was
given full discretion as to the means for accomplishing the assignment. Assuming that
this was so, the respondent has committed a breach of professional ethics when,
contrary to the fact, he made the complainant believe that the Pineda spouses had
already been sued in court and did not return the amount intended for the filing fee.
Considering however, that the respondent has not yet received anything for his services
and that the complainant has subsequently been paid, disbarment or even suspension
of the respondent from the practice of his profession would be too harsh and unkind.
We only here reprimand him for the offense, with the warning that a repetition of similar
misconduct or, for that matter, any violation of his oath will be dealt with more drastically.
4. Diaz v. Kapunan
FACTS: Diaz and Mendezona formed a partnership and entered into extensive
business transactions in Leyte. However, this failed and Mendezona recognized, in
favor of Diaz, an indebtedness of 80,000 pesos and an additional sum of 10, 000 pesos

laid upon Hacienda Mapuyo and to be paid within a period of one year. Mendezona
failed to pay resulting to the foreclosure and sale of his property. At the foreclosure sale,
Diaz appeared with his lawyer Emilio Benitez and Atty. Kapunan. Atty. Kapunan
expressed his desire to purchase the property, and he started at a bid of 12, 000 pesos.
Eventually, Diaz won. However, Diaz and Kapunan entered into an agreement that the
latter is withdrawing his bid and in consideration therefore Diaz will pay him 1,000 pesos
to which 500 pesos was paid by Diaz. Diaz filed a complaint against Kapunan for
unprofessional conduct.
(Note: Kapunan was given extensive authority by the letter of Mendezona of April 12,
1919. When Kapunan took part in the sale, it must be assumed that he was bidding in
representation of his client and for the benefit of the client.)
ISSUE: Whether or not Atty. Kapunan is guilty of violating Article 542 of the RPC (This
article punishes "any person who shall solicit any gift or promise as a consideration for
agreeing to refrain from taking part in any public auction.)
HELD: Yes, he is guilty.
The crime is consummated by the mere act of soliciting a gift or promise for the purpose
of abstaining from taking part in the auction. Not permitting our minds to be confused by
the varied explanations of Diaz and Kapunan, the document formulated by them and
hereinbefore quoted, demonstrates that Kapunan, on the promise of Diaz to pay
P1,000, refrained from further participation in the sale of the property of Mendezona,
which is exactly the situation covered by article 542 of the Penal Code. Public policy
discountenances combinations or agreements on the part of bidders at execution sales,
the objects and effects of which are to stifle competition. The courts will consider an
agreement between a judgment creditor and one claiming an interest in the thing about
to be sold under an execution, that neither shall bid against the other, as void, unless all
parties concerned know of the arrangement and consent thereto. Execution sales
should be open to free and full competition, in order to secure the maximum benefit for
the debtor. Article 542 of the Penal Code is, therefore, a wise provision even though
rarely invoked, and should be used to discourage the stifling of bids at judicial sales.
It remains to be said that following the presentation of the charges against Attorney
Kapunan in this court, he was given an opportunity to answer, and the usual
investigation of his professional conduct was made by the provincial fiscal of Leyte
acting under the supervision of the Attorney-General. From the report of the fiscal,
indorsed by the Attorney- General, three charges seem to have been considered. The
first two, relating to Kapunan's attempt to represent both the parties in the case, and to
molest and disturb Diaz by frivolous motions, the law officer of the Government finds not
substantiated; and with this conclusion we fully agree.)