EN BANC

[A.C. No. 2614. May 21, 1991.]

MAXIMO DUMADAG , petitioner, vs. ERNESTO L. LUMAYA , respondent.

SYLLABUS

1. LEGAL ETHICS; RULE 16 OF CODE OF PROFESSIONAL RESPONSIBILITY; VIOLATED

WHEN LAWYER FAILED TO DELIVER THE FUNDS OF HIS CLIENT. — Under the Code of
Professional Responsibility, Canon 16 — "Rule 16.01 — A lawyer shall account for all money
or property collected or received for or from the client." "Rule 16.02 — A lawyer shall keep
the funds of each client separate and apart from his own and those of others kept by him".
"Rule 16.03 — A lawyer shall deliver the funds and property of his client when due or upon
demand. However, he shall have a lien over the funds and may apply so much thereof as
may be necessary to satisfy his lawful fees and disbursements, giving notice promptly
thereafter to his client. He shall also have a lien to the same extent on all judgments and
executions he has secured for his client as provided for in the Rules of Court." Even a
respondent consistently denied liability to Dumadag, his former client, the records
abundantly point to his receipt of and failure to deliver the amount of P4,344.00 to his
client, the herein complainant, a clear breach of the canons of professional responsibility.

RESOLUTION

PER CURIAM :

Respondent Atty. Ernesto L. Lumaya of Banganga, Davao Oriental is administratively

charged with unethical practices, con ict of interest and disloyalty to client by Maximo
Dumadag in a sworn letter-complaint dated 22 December 1983. Respondent was
complainant's counsel in Civil Case No. 148 before the RTC of Banganga, Davao Oriental,
led against spouses Jose and Jesusa Avellanosa, involving the sale of a parcel of land.
Civil Case No. 148 was terminated via a compromise agreement which provided, inter alia,
that not later than 1 October 1979, the Avellanosas would pay Dumadag the amount of
P4,644.00 and in turn Dumadag would execute in favor of the Avellanosas a deed of
reconveyance of the land. However, in case of failure of the Avellanosas to make full
payment of the P4,644.00 within the stipulated period, Dumadag would be entitled to
obtain possession of the land. The compromise agreement, prepared by respondent, was
approved by the trial court. The Avellanosas failed to comply with their undertaking under
the compromise agreement to pay complainant the amount of P4,644.00 not later than 1
October 1979, which necessitated the filing by Dumadag of a motion for execution. LLpr

According to complainant, he asked his then counsel, herein respondent, to prepare and
le the appropriate motion for execution; however, the latter failed to do so. It was through
the assistance of the court stenographer, Mr. Eleuterio Catubig, that complainant himself
signed and filed the motion and later obtained the writ of execution.
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 When the writ of execution was issued, Deputy Sheriff Rogelio Dongiapon, according to the
complainant, instead of serving the same on the Avellanosas, connived with respondent
attorney by selling a one (1) hectare portion of the land subject of Civil Case No. 148 to
one Eleonora Astudillo to satisfy complainant's claim out of the proceeds of the sale,
without however Dumadag's knowledge and consent. The Deed of Sale between the
Avellanosas and Astudillo, dated 14 September 1981, was notarized by respondent
attorney and stated that the "parcel of land, together with all the improvements found and
existing thereon, (is) free from liens and encumbrances, whatsoever." It expressly stated
on its face "That this Deed of Sale is executed also to satisfy nally the claim of Maximo
Dumadag in Civil Case No. 148 of the CFI of Banganga, Davao Oriental."
After the sale to Astudillo, or on 16 June 1983, Deputy Sheriff Rogelio Dongiapon made a
Sheriff's Return of Service which stated:
"Respectfully returned to MR. JAIME B. TOROBA, Of cer-in-Charge, Of ce of the
Clerk of Court, this Court, the original copy of the Writ of Execution in Civil Case
No. 148, with the information that said Writ of Execution was partially satis ed
the defendants Jose R. Avellanosa and Jesusa N. Avellanosa having paid the
amount of FOUR THOUSAND THREE HUNDRED FORTY FOUR (P4,344.00)
Philippine Currency to Atty. Ernesto L. Lumaya, plaintiff's counsel in the above
entitled case in November, 1981, with the balance of P300.00 which the
defendants Jose R. Avellanosa and Jesusa N. Avellanosa have not paid up to this
moment." (Emphasis supplied.)
The said amount of P4,344.00, according to complainant, was not delivered to him by
respondent attorney, even after the former made a demand on the latter.
After respondent's comment and complainant's reply had been led, the case was referred
to the Of ce of the Solicitor General for investigation, report and recommendation. Actual
investigation and hearings were conducted by Provincial Fiscal Arnulfo M. Agleron of Mati,
Davao Oriental, who submitted a report to the Of ce of the Solicitor General (OSG). Based
on said report, the OSG prepared and submitted its own report, including therewith a
complaint for disbarment against respondent attorney, pursuant to Sec. 4, Rule 139 of the
Rules of Court.
While respondent later led an answer to the OSG-prepared complaint against him, he
however, did not appear at the earlier investigation despite due notice. We will nonetheless
consider his answer as well as comment prior to the referral of the case to the OSG.
Respondent claims that it was the presiding judge in Civil Case No. 148 who played an
active role in the settlement proceedings between Dumadag and the Avellanosas, and that
it is unfortunate, according to respondent, that there are no written records to prove this
fact, but that it was agreed that Jose Avellanosa would pay Dumadag the amount of
P4,644.00 in installments, which he did, and that complainant Dumadag claimed and
received the money each time payment was made by Jose Avellanosa; thru herein
respondent. His (respondent's) mistake according to him, was that he merely noted at the
back of his own copy of the judgment by compromise the sums paid, all in the total
amount of P3,000.00, and all taken by complainant Dumadag, without any receipts. All his
(respondent's) records of the case, according to respondent, were also taken by Dumadag
from his office when he became a provincial board member. cdrep

Respondent also denies having been asked by Dumadag to le a motion for execution in
Civil Case No. 148 or having received from him a cow or P700.00; however he was
promised one cow since he paid the expenses in Civil Case No. 148.
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 Anent the sale by the Avellanosas to Eleonora Astudillo, the same, according to
respondent, was a private sale, Dumadag was not a party thereto. Respondent also claims
that he was not aware that a motion for execution had been led in Civil Case No. 148 by
Dumadag when the Deed of Sale between the Avellanosas and Astudillo was presented to
him for notarization, and that he did not see any cash change hands as he was informed
that it was just a rati cation of an earlier verbal sale. He notarized the deed of sale without
intention to cause any damage. Respondent however admits that in a later case, Civil Case
No. 283 (where the validity of the sale from the Avellanosas to Astudillo was assailed by
Dumadag), it was disclosed that from the P7,000.00 actually realized from the sale of the
land to Astudillo, the sheriff deducted P1,605.00 for his expenses, with the balance being
given to the vendors (Avellanosas), because Dumadag had already been paid by the
Avellanosas thru their lawyer, herein respondent.
In the Court's resolution of 16 April 1990, respondent was required to answer the OSG
complaint. Respondent's answer merely reiterates his earlier explanation and further
states:
"The truth of the matter was that the DEED OF SALE WAS ALREADY Prepared
when SHERIFF Dongiapon, the spouses Avellanosa and Maxima Astudillo came
to my Office for the Notarization of that DEED OF SALE. What respondent did was
only to ask whether the signatures are theirs and that the consideration was paid
but did not go over the contents. All of the parties af rmed their signatures and
informed respondent that the consideration was paid in installments. At that time
respondent never was informed that the proceeds was for the nal satisfaction of
Mr. Dumadag's claim. Respondent knew it only when Mr. Dumadag came to
claim the money of course I have to tell the truth and I told him, Maximo
Dumadag, that I have never received any money from Sheriff ROGELlO
DONGIAPON and I did not even know that there was a petition for the issuance of
a writ of execution that he led because I was never asked by him. Mr. Maximo
Dumadag told me that he will le a case against me if I will not give the money . .
."

For the reasons that respondent's acts constitute lack of delity, loyalty and devotion to
his client's cause, unethical practice and a violation of his lawyer's oath, the OSG
recommends respondent's suspension from the practice of law for not less than ve (5)
years.
In the case of Licuanan vs. Melo (Adm. Case No. 2361 — February 9, 1989) a lawyer was
disbarred for retaining for his personal benefit for over a one (1) year period, the amount of
P5,220.00 received by him in behalf of his client, thereby compelling the latter to le a
groundless collection suit which exposed said client to a damage countersuit.
While not exactly identical with the Licuanan case, herein complainant Dumadag had to le
a separate civil case (No. 283 — for annulment of sale, damages and attorney's fees) to
recover the amount of P4,344.00 from his previous counsel, herein respondent, Atty.
Lumaya.
Under the Code of Professional Responsibility, Canon 16 —
"Rule 16.01 — A lawyer shall account for all money or property collected or
received for or from the client.

"Rule 16.02 — A lawyer shall keep the funds of each client separate and apart
from his own and those of others kept by him.
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 "Rule 16.03 — A lawyer shall deliver the funds and property of his client when due
or upon demand. However, he shall have a lien over the funds and may apply so
much thereof as may be necessary to satisfy his lawful fees and disbursements,
giving notice promptly thereafter to his client. He shall also have a lien to the
same extent on all judgments and executions he has secured for his client as
provided for in the Rules of Court."

Both parties failed to apprise this Court of the nal disposition of Civil Case No. 283, even
as the Court took note of the RTC decision in said case where a nding was made that the
land earlier sold by the Avellanosas to Dumadag is separate and distinct from the one (1)
hectare portion sold by the Avellanosas to Astudillo. However, the RTC in its decision also
ordered co-defendant (herein respondent) Atty. Lumaya to pay the plaintiff (herein
complainant) the sum of P4,344.00 he (Atty. Lumaya) had received From Deputy Sheriff
Rogelio Dongiapon for herein complainant.
Therefore, even a respondent consistently denied liability to Dumadag, his former client,
the records abundantly point to his receipt of and failure to deliver the amount of
P4,344.00 to his client, the herein complainant, a clear breach of the canons of
professional responsibility.
ACCORDINGLY, the Court hereby SUSPENDS Atty. Ernesto Lumaya INDEFINITELY from the
practice of law effective from date of his receipt of this resolution.
Let this resolution be served personally on the respondent at his given address of record
and entered in his record as attorney. Let the IBP and the Court Administrator be furnished
also a copy of this resolution for their information and guidance as well as for
circularization to all courts in the country.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

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