A.C. No. 2125, April 3, 1995
Enrique M. Reyes, complainant, vs. Atty. Leopoldo T. Maglaya, respondent.

FACTS

Complainant Enrique Reyes engaged the services of respondent Atty. Leopoldo Maglaya to file a criminal action for estafa and to recover a sum of money. Reyes endorsed pertinent documents and paid Maglaya P1,500.00 as his fee. Despite repeated follow-ups, Maglaya failed to institute the required legal action for over three months. Consequently, Reyes demanded the return of both the documents and the money through a letter dated January 18, 1980, which Maglaya admitted receiving on January 23, 1980. Maglaya failed to comply with this demand.
In his Answer, Maglaya claimed the fee was also for expenses to retrieve original documents from a government agency. He further stated that complainant had no cause of action except for the return of the P1,500.00, which he agreed to refund. The case was referred for investigation. Despite numerous hearings, Maglaya repeatedly failed to appear and present evidence, even after being warned that the case would be resolved based on the existing record.

ISSUE

Whether respondent Atty. Leopoldo Maglaya should be held administratively liable for his conduct in handling his client’s case and for failing to return the client’s money upon demand.

RULING

Yes, the respondent is administratively liable. The Supreme Court adopted the findings and recommendation of the Integrated Bar of the Philippines (IBP). The legal logic rests on two primary grounds established by respondent’s own admissions and the uncontested evidence. First, Maglaya violated Canon 16, Rule 16.03 of the Code of Professional Responsibility, which mandates a lawyer to deliver a client’s funds upon demand. His admission that he received the demand letter and his agreement to return the P1,500.00, coupled with his subsequent failure to do so, constitutes a clear breach of this fiduciary duty. The withholding of client funds is a serious ethical violation warranting discipline.
Second, the Court found Maglaya negligent in handling his client’s case. He failed to take any legal action for an unreasonable period despite having obtained the necessary case files, and he ignored his client’s inquiries regarding the case status. This demonstrated a lack of the diligence required of a lawyer. His repeated failure to participate in the administrative proceedings, despite notice, was construed as a waiver of his right to present contrary evidence, allowing the complaint to be resolved based on the uncontroverted allegations. Consequently, the Court suspended Atty. Leopoldo T. Maglaya from the practice of law for one year.