AC 4562; (June, 2005) (Digest)
A.C. No. 4562; June 15, 2005
DANIEL MORTERA, TERESITA MORTERA, FERDINAND MORTERA and LEO MORTERA, Complainants, vs. ATTY. RENATO B. PAGATPATAN, Respondent.
FACTS
The complainants, the Morteras, were plaintiffs in a civil case for rescission of contract. They secured a judgment affirmed by the Supreme Court, ordering Renato C. Aguilar to pay them ₱155,000. The respondent, Atty. Renato B. Pagatpatan, was their counsel. On April 15, 1994, respondent entered into a secret agreement with the judgment debtor, Aguilar. He accepted ₱150,000 from Aguilar as partial payment of the judgment sum, issued a receipt, and deposited the money into his personal bank account without the knowledge or consent of his clients, the complainants.
Despite successive orders from the Regional Trial Court and the Court of Appeals, respondent refused to surrender the money to the complainants. In his defense, he admitted receiving and withholding the funds but claimed it was proper compensation for unpaid legal fees from prior services rendered to the complainants and their mother. He argued he needed to secure the money from other potential claimants and the complainants’ volatile temperament, though he presented no evidence for these claims.
ISSUE
Whether respondent Atty. Renato B. Pagatpatan violated the Code of Professional Responsibility by secretly receiving and withholding his clients’ money.
RULING
Yes, the respondent is guilty of gross misconduct. The Supreme Court found that respondent violated Canons 15 and 16 of the Code of Professional Responsibility. Specifically, he breached his duty of candor to his clients by failing to inform them of the receipt of the judgment award. He failed to account for and hold in trust the money received for his clients, commingling it with his personal funds instead of keeping it separate. While a lawyer has a right to a retaining lien over funds in his possession for lawful fees, this does not justify unilateral appropriation without the client’s knowledge or a prior agreement. Respondent presented no evidence of any fee agreement authorizing him to withhold the specific amount. His actions constituted deceit, bad faith, and a blatant disregard of his fiduciary duty.
The Court modified the Integrated Bar of the Philippines’ recommendation of a one-year suspension. Considering respondent’s experience as a lawyer since 1974, his bad faith, and his availability of other legal remedies to recover his fees, a heavier penalty was warranted. Respondent Atty. Renato B. Pagatpatan was SUSPENDED from the practice of law for TWO YEARS. He was ordered to turn over the ₱150,000 to the complainants within five days and report his compliance to the Office of the Bar Confidant.