A.C. No. 12833, November 10, 2020
Salvacion C. Romo, Complainant, vs. Atty. Orheim T. Ferrer, Respondent.

FACTS

Complainant Salvacion Romo engaged the legal services of respondent Atty. Orheim Ferrer to prosecute a BP 22 case against Amada Yu. The case was settled, and Amada Yu delivered a total of ₱375,000.00 to Atty. Ferrer in various installments from March 2006 to March 2007, as evidenced by acknowledgment receipts he signed. Atty. Ferrer, however, remitted only ₱80,000.00 to Romo. Following Romo’s demand for the ₱295,000.00 balance, Atty. Ferrer executed a Memorandum of Agreement promising to pay the amount by October 15, 2012 and to deliver a land title as collateral, but he failed to comply.
In his defense, Atty. Ferrer claimed he had remitted ₱120,000.00 and that the remaining payments were given directly to Romo’s daughter, for which no receipts were issued. He alleged the acknowledgment receipts were fabricated and that he signed the Memorandum of Agreement only because Romo threatened him with a disbarment case. The Integrated Bar of the Philippines (IBP) Commission on Bar Discipline found his defenses unsubstantiated and recommended a two-year suspension.

ISSUE

Whether Atty. Orheim T. Ferrer should be held administratively liable for failing to account for and return client funds received in the course of his professional engagement.

RULING

Yes, Atty. Ferrer is administratively liable. The Supreme Court modified the IBP’s recommendation, imposing a six-month suspension from the practice of law. The Court emphasized that a lawyer is a trustee of all client funds and properties that come into their possession. Rule 16.01 of the Code of Professional Responsibility mandates that a lawyer shall account for all money or property collected from the client. Atty. Ferrer’s admission of receiving the settlement funds, coupled with his failure to present credible evidence to refute the signed acknowledgment receipts or to prove remittance to Romo’s daughter, established his failure to fulfill this fiduciary duty.
His contradictory defenses—initially denying receipt, then admitting it via the Agreement, and later assailing the same Agreement—demonstrated bad faith and an intent to misappropriate. The claim of being threatened into signing the Agreement holds no merit, as a threat to file a just legal claim does not vitiate consent. His conduct constituted a gross violation of the trust reposed in him. The Court ordered him to return ₱295,000.00 to Romo with 6% interest per annum from notice of the Resolution and to submit proof of payment, with a warning that failure to comply would result in a more severe penalty.