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[A.C. No. 5830.

September 12, 2006]



En Banc

Quoted hereunder, for your information, is a resolution of this Court dated SEPT. 12,

A.C. No. 5830 (Mary D. Malecdan v. Attys. Percival L. Pekas and Matthew P. Kollin)

In the Decision of the Court dated January 26, 2004, respondents were found to have
violated Canon 1 and Rule 1.01 of the Code of Professional Responsibility for
appropriating for themselves P30,000.00 as attorney's fees, money belonging to
complainant Mary D. Malecdan in the guise of a compromise agreement, and suspending
them from the practice of law - Atty. Matthew P. Kollin for three years, and Atty.
Percival L. Pekas for six months.

Atty. Pekas filed a Motion for Reconsideration on March 19, 2004. However, on January
12, 2005, Atty. Pekas filed a Motion to Withdraw the Motion, considering that he had
already served the six months' suspension meted on him. The Court noted and granted
the motion in a Resolution dated February 8, 2005.

Respondent Atty. Kollin, for his part, filed a Motion for Reconsideration on April 1,
2004. He insists that it should be respondent Atty. Pekas who should be accountable for
the execution of the compromise agreement, as he was only instructed to submit the
incident for resolution. He reiterated that he had to ask Atty. Pekas to attend the hearing
in Baguio City since he had to attend to another hearing in Bontoc, Mt. Province on
December 14, 1999, which had been scheduled months before. He prays that the
imposition of the three-year suspension be reconsidered, or "at least to be lessened to six
(6) months, the same penalty imposed on the other respondent, Atty. Pekas, who was
actually the one who signed and agreed to the compromise agreement and which led to
the withdrawal of the money."

In a Resolution dated June 1, 2004, the Court resolved to require complainant Mary D.
Malecdan to comment on the motion for reconsideration of Atty. Kollin within 10 days
from notice. Considering, however, that the copy of the Court's January 26, 2005
Decision and May 25, 2004 Resolution sent to the complainant's address were returned
unserved with the notations "not deliverable as addressed" "unable to forward" and
"undelivered as addressed unable to forward," the Court considered the said decision and
resolution as served.
The Court resolves to deny the Motion for Reconsideration of Atty. Kollin. The
allegations in his motion are but mere reiterations of the allegations made before the
Integrated Bar of the Philippines Commission on Bar Discipline. He had been given
ample opportunity to disprove the charges against him, and he failed to do so. As we had
the occasion to state in our Decision dated January 26, 2004:

A lawyer may legally apply a client's funds in his possession to satisfy professional fees
which the client owes him, in the absence of any dispute as to the legality of the amount
thereof [In Re: Rillaroza, 99 Phil. 1041 (1956)]. However, the fact that a lawyer has a
lien for his fees on the client's money in his possession or the circumstance that the client
owes him more than the client's funds in his hands may not excuse him from making an
accounting nor entitle him to unilaterally apply the client's money to satisfy his disputed
claims [Domingo v. Domingo, 42 SCRA 131 (1971)]. In this case, the amount of
P30,000 which the respondents took for themselves as attorney's fees belonged to a third
person, not their client, as admitted by them in their complaint; the owner was, in fact, an
adverse party. It was the possession of the money, its entitlement, which was in fact put
in issue in the complaint for rescission of contract, and, if respondent Atty. Kollin is to be
believed, prompted the filing of the complaint itself. Thus, the respondents could not,
without a claiming party's knowledge, apply the amount of P30,000 for themselves as
attorney's fees. If there was someone liable for the respondents' attorney's fees, it was
their client, Eliza Fanged. It cannot be said that there was a real "compromise" as to the
manner in which the amount of P2,600,000 was to be applied, since the complainant was
not present when the compromise agreement was made.

Considering the foregoing, the Court resolves to DENY the Motion for Reconsideration
filed by Atty. Matthew P. Kollin.

Very truly yours,


Clerk of Court