AC 5440; (December, 2014) (Digest)
G.R. No. A.C. No. 5440; December 10, 2014
SPOUSES NICASIO AND DONELITA SAN PEDRO, Complainants, vs. ATTY. ISAGANI A. MENDOZA, Respondent.
FACTS
Complainants engaged the services of respondent Atty. Isagani A. Mendoza in November 1996 to facilitate the transfer of a property title into their names. They issued two checks to respondent: one for ₱68,250.00 to cover transfer taxes and another for ₱13,800.00 as his professional fee. Despite encashing both checks, respondent failed to produce the title despite repeated follow-ups and several letters explaining the delay. Complainants referred the matter to the barangay and later demanded a refund of the ₱68,250.00, which respondent refused. Complainants were forced to obtain a loan to secure the title transfer themselves. Respondent contested the allegations, arguing that complainants caused the delay by failing to furnish required documents and that his retention of the money was justified by unpaid legal fees for other cases he handled for them. The case was referred to the Integrated Bar of the Philippines (IBP), where respondent failed to submit his position paper. The IBP Investigating Commissioner found respondent violated Canon 16 of the Code of Professional Responsibility.
ISSUE
Whether respondent is guilty of violating Canon 16 of the Code of Professional Responsibility for failing to hold in trust, account for, and deliver the funds of his clients.
RULING
Yes, respondent is guilty of violating Canon 16, Rules 16.01 and 16.03 of the Code of Professional Responsibility. The Supreme Court adopted the IBP Board of Governors’ resolution, which suspended respondent from the practice of law for three (3) months. He was ordered to return the amount of ₱68,250.00 to complainants with 6% legal interest from the date of finality of the judgment until full payment. The Court emphasized that lawyers have a fiduciary duty to account for and promptly deliver client funds upon demand. Respondent’s failure to use the money for its intended purpose and his unjust retention despite demand constituted a breach of this duty. His claim of a lien for unpaid fees in other cases was not properly substantiated and did not justify withholding the specific funds earmarked for transfer taxes.