A.C. No. 6933. July 5, 2017. GREGORIO V. CAPINPIN, JR., Complainant, vs. ATTY. ESTANISLAO L. CESA, JR., Respondent.
FACTS

Complainant Gregorio Capinpin, Jr. executed a real estate mortgage in favor of Family Lending Corporation (FLC) to secure a loan. Due to his default, FLC, represented by respondent Atty. Estanislao L. Cesa, Jr., initiated foreclosure proceedings. Complainant filed multiple legal actions to enjoin the foreclosure. During these proceedings, respondent allegedly approached complainant to negotiate a settlement. Respondent represented that he could influence the sheriff to defer the auction sale and persuade his client, FLC, to accept a reduced settlement of PhP 7 million. For these services, respondent demanded and received from complainant professional fees totaling PhP 400,000. Despite these payments, the foreclosure sale proceeded.
Respondent denied initiating the negotiations, claiming it was complainant who sought his help for more time to pay. He admitted receiving some checks as advance attorney’s fees but asserted his client, FLC, was aware of these dealings. He presented a letter from complainant to FLC stating complainant would negotiate for the payment of respondent’s fees.

ISSUE

Whether respondent violated the Code of Professional Responsibility by representing conflicting interests and failing to account for funds received from the adverse party.

RULING

Yes, respondent is administratively liable. The Supreme Court affirmed the findings and recommendation of the Integrated Bar of the Philippines. Respondent violated Canon 15, Rule 15.03 of the Code of Professional Responsibility, which prohibits a lawyer from representing conflicting interests except with the written consent of all parties after full disclosure. By negotiating with the adverse party, complainant, for a settlement that would reduce his own client’s (FLC’s) recovery, and by accepting fees from said adverse party, respondent placed himself in a position where his duty to his client conflicted with his personal interest in obtaining fees from the opposing side. This created a clear conflict of interest.
Furthermore, respondent violated Canon 16, Rule 16.01, which mandates a lawyer to account for all money or property collected from a client. The funds received from complainant, ostensibly for influencing the settlement, should be considered money received in connection with his legal services for FLC. Respondent failed to account for or disclose these payments to his client, FLC. His defense that FLC was aware is belied by the lack of any written consent as required by the rules. The Court found his actions constituted malpractice, undermining the integrity of the legal profession. Accordingly, respondent Atty. Estanislao L. Cesa, Jr. is SUSPENDED from the practice of law for one (1) year.