Adm. Case No. 5831; January 13, 2003
CESAR A. ESPIRITU, complainant, vs. ATTY. JUAN CABREDO IV, respondent.

FACTS

Complainant Cesar Espiritu engaged the services of respondent Atty. Juan Cabredo IV to represent him in two civil cases for replevin and damages filed by BPI Family Savings Bank. During the pendency of the cases, and upon Cabredo’s advice, Espiritu’s company, Esphar Medical Center, delivered a total of P51,161.00 to Cabredo’s office on two occasions. The money was intended to be remitted to the bank through the trial court to update the loan payments. Subsequently, it was discovered that Cabredo failed to deliver the money to the court or the bank. The parties eventually settled the cases amicably, leading to their dismissal.
Respondent, in his answer, admitted that his secretary received the P51,161.00 but claimed she failed to inform him about it. He shifted blame to his staff and expressed willingness to reimburse the amount. During the IBP Commission on Bar Discipline proceedings, respondent repeatedly failed to appear for hearings despite due notice, leading the Investigating Commissioner to decide the case based on the pleadings.

ISSUE

Whether respondent Atty. Juan Cabredo IV violated the Code of Professional Responsibility and his oath as a lawyer by failing to account for and deliver client funds received by his office.

RULING

Yes, respondent is guilty of gross misconduct. The Supreme Court found a clear violation of Canon 16 and Rules 16.01 and 16.03 of the Code of Professional Responsibility, which mandate a lawyer to hold client funds in trust, account for them, and deliver them upon demand. The Court emphasized that a lawyer’s fiduciary duty is paramount and cannot be evaded by blaming staff. The receipt of money by a lawyer’s secretary within the scope of her duties is deemed receipt by the lawyer himself, who bears ultimate responsibility. Respondent’s failure to restitute the amount and his repeated non-appearance before the IBP demonstrated a disregard for judicial processes and compounded his ethical breach.
The Court modified the IBP’s recommended penalty, considering the substantial amount involved (P51,161.00) and the absence of restitution. Citing precedents where failure to account for smaller sums warranted one-year suspension, the Court suspended Atty. Cabredo from the practice of law for one year. He was also ordered to immediately return the P51,161.00 to Esphar Medical Center, Inc., with a warning that repetition would be dealt with more severely.