Canon 16 Hold in Trust Client’s Moneys and Properties

1. Account – Rule 16.01

Rule 16.01

Atty. Salomon Jr v Atty. Frial

Facts: 2 cars were attached to a writ of preliminary attachment, a Volvo and a Nissan Sentra. However,
instead of depositing the attached cars in the court premises, turned them over to Atty. Frial. Atty.
Salomon claimed that on several occasions, the Nissan Sentra was spotted being used by unauthorized
individuals.

Defense: The subject vehicles were first parked near the YMCA building in front of the Manila City Hall
where they remained for four months. Atty Frial said that when he went to check on the vehicles
condition, he found them to have been infested and the wirings underneath the hoods gnawed by rats
and brought them for a mechanical check up.

SC: Atty. Frial was remiss in his obligation of taking good care of the attached cars. He also allowed the
use of the Nissan Sentra car by persons who had no business using it. He did not inform the court or at
least the sheriff of the destruction of the Volvo car. What is worse is that he took custody of them
without so much as informing the court, let alone securing, its authority

Almandarez v Atty. Langit

Facts: Atty Langit was the counsel of Almandarez for an ejectment case where monthly rentals were
deposited in the court. Atty Langit made the withdrawal on the rentals amounting to 255,000 without
the knowledge of Almandarez, who demanded the return of the amount but Atty. Langit failed to reply.

SC: Respondent committed a flagrant violation of his oath when he received the sum of money
representing the monthly rentals intended for his client, without accounting for and returning such sum
to its rightful owner. Respondent received the money in his capacity as counsel for complainant.
Therefore, respondent held the money in trust for complainant.

Respondent should have immediately notified complainant of the trial court's approval of the motion to
withdraw the deposited rentals. Upon release of the funds to him, respondent could have collected any
lien which he had over them in connection with his legal services, provided he gave prompt notice to
complainant. A lawyer is not entitled to unilaterally appropriate his client's money for himself by the
mere fact that the client owes him attorney's fees.

Chua and Hsia v Atty. Mesina

Facts: Chua was a lessee of a building and a lot owned by Atty Mesina's family. As Mrs. Mesina failed to
meet her obligation in the bank, so Chua settled the same. The ownership was tranferred to Chua,
however to evade a falsification case, Atty Mesina proposed to complainants that they would simulate a
deed of sale of the property wherein complainants would resell it to Mrs. Mesina. When Mrs. Mesina
died, respondent never returned the ownership to complainants.

SC: When respondent inveigled his own clients, the Chua spouses, into turning over to him the owners
copy of his mothers title upon the misrepresentation that he would, in four months, have a deed of sale
executed by his mother in favor of complainants, he committed dishonesty. Respondent welched on his
promise to cause the reconveyance of the Melencio property to complainants.

2. Keep Client’s Fund Separate – Rule 16.02

Hernandez vs Atty. Go

Facts: Hernandez engaged the legal services of Atty. Go regarding her husband's demandable loans.

Atty. Go advised her to give him her land titles so he could sell them to enable her to pay her creditors.
She executed deeds of sale in his favor on the condition that he would sell the lots and from the
proceeds pay her creditors. Thus, Atty. Go became the registered owner of all the lots belonging to the
complainant.

However, Hernandez came to know that Go did not sell the lots. Instead, he paid her creditors with his
own funds and kept her properties.

Ruling: Atty. Go was suspended for 6 months.

He violated Canon 16 of the CPR, the principal source of ethical rules for lawyers in this jurisdiction,
provides: A lawyer shall hold in trust all moneys and properties of his client that may come into his
possession.

His acts of requiring for himself complainant's lots entrusted to him are, by any stand, acts constituting
gross misconduct, a grievous wrong, a forbidden act, a dereliction in duty, willful in character, and
implies a wrongful intent and not mere error in judgment. Such conduct on the part of respondent
degrades not only himself but also the name and honor of the legal profession. He violated this Court's
mandate that lawyers must at all times conduct themselves, especially in their dealing with their clients
and the public at large, with honesty and integrity in a manner beyond reproach.

Tarog vs Atty. Ricafort

Facts: The Tarogs engaged the services of Atty. Ricafort regarding their bank-foreclosed property.

Atty. Ricafort required them to deposit P65,000 in court to counter the P60,000 deposit of the buyer of
their foreclosed property. To produce the said amount, the Tarogs loaned from Sia who issued a check
in their favor. Atty. Ricafort acquired the check after persuading Arnulfo Tarog that he would be the one
who'll deposit the money in court.

However, the Tarogs later found out that Atty. Ricafort did not deposit the said amount in court, but in
Ricafort’s own account. He promised to return the said amount, plus interest.

When the RTC required them to file their memoranda, they delivered P15,000 to Atty. Ricafort for that
purpose but he did not file a memoranda.

Atty. Ricafort contended that the P65,000 was a payment for his legal services under a package deal.

Ruling: Atty. Ricafort was disbarred. The Code of Professional Responsibility demands the utmost degree
of fidelity and good faith in dealing with the moneys entrusted to lawyers because of their fiduciary
relationship.
Rule 16.02 of the Code of Professional Responsibility, imposes on an attorney the positive obligation to
keep all funds of his client separate and apart from his own and from those of others kept by him, to wit:

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.

Atty. Ricaforts act of obtaining P65,000.00 and P15,000.00 from the Tarogs under the respective
pretexts that the amount would be deposited in court and that he would prepare and file the
memorandum for the Tarogs erected a responsibility to account for and to use the amounts in
accordance with the particular purposes intended. For him to deposit the amount of P65,000.00 in his
personal account without the consent of the Tarogs and not return it upon demand, and for him to fail
to file the memorandum and yet not return the amount of P15,000.00 upon demand constituted a
serious breach of his fiduciary duties as their attorney. He reneged on his duty to render an accounting
to his clients showing that he had spent the amounts for the particular purposes intended. He was
thereby presumed to have misappropriated the moneys for his own use to the prejudice of his clients
and in violation of the clients trust reposed in him. He could not escape liability, for upon failing to use
the moneys for the purposes intended, he should have immediately returned the moneys to his clients.

3. Delivery of Funds; Lawyer’s Lien – Rule 16.03

Lourdes Busios vs Atty Francisco Ricafort

FACTS: lourdes busios charged atty ricafort with having committed the crime of estafa by
misappropriation the sum of 30,000 intended for his clients as well as having deceived his clients into
giving him the sum of 2,000 purportedly to be deposited as a bond in the case which was not required.
He converted the money of his clients to his own personal use without their consent

HELD: a lawyer, under his oath,pledges himself not to delay any man foe money or malice and is bound
to conduct himself with all good fidelity to his clients.he is obliged to report promptly the money of his
client that has come into his possession. He should not commingle it with his private property or use it
for his personal purposes without his clients consent. He should maintain a reputation for honesty and
fidelity to private trust.

The court resolves to disbar respondent atty ricafort from practice of law. His name be stricken from
the roll of attorneys.

QUILBAN vs. ROBINOL

FACTS: Subjected to frustrations were the dreams of thirty-two (32) squatter families (Samahan) to own
the land of approximately 50 square meters each on which their respective homes were built. To
vindicate their rights they have aired their plight before this Court. Thwarted, too, was the benevolence
shown by the original owner of the land which parted with its property at a giveaway price thinking that
it was accommodating the landless squatters.

To prosecute the appeal before the Court of Appeals, the Samahan members hired as their
counsel Atty. Santiago R. Robinol for which the latter was paid P 2,000.00 as attorney's fees and was
also to be given by the members a part of the land, subject matter of the case, equal to the portion that
would pertain to each of them. For ejectment of the non-plaintiffs occupying the property and other
expenses, the Samahan delivered the sum of 75K to Atty. Robinol.
 After almost a year, the Samahan officers discovered that no payment had been made to Rivera
(non-plaintiff occupying the property). When queried, Atty. Robinol replied that there was an
intervention filed in the civil case but it turned out that the motion for intervention had already been
dismissed. After confronting Atty. Robinol with that fact, the latter gave other excuses, which the
officers discovered to have no basis at all. Thus, they changed to new counsel Atty. Montemayor.
Informed about this, Atty. Robinol turned deaf ears to the demands.

HELD: Atty. Robinol has, in fact, been guilty of ethical infractions and grave misconduct that make him
unworthy to continue in the practice of the profession. Certainly, he had no right to unilaterally
appropriate his clients' money not only because he is bound by a written agreement but also because,
under the circumstances, it was highly unjust for him to have done so. His clients were mere squatters
who could barely eke out an existence.

He has not only violated his oath not to delay any man for money and to conduct himself with
all good fidelity to his clients. He has also brought the profession into disrepute with people who had
reposed in it full faith and reliance for the fulfillment of a life-time ambition to acquire a homelot they
could call their own.

4. No Borrowing, No Lending – Rule 16.044

Barnachea vs quicho

Facts: barnachea engaged the legal services of atty. Quicho to cause the transfer of title of a property
owned by her sister under her name.

she drew and issued checks in a total amount of 41280.00 for the expenses for said transfer by
which atty quicho has encasched, however, despite the lapse of almost two months, atty quicho failed
to secure title over the property.

barnachea then demanded for refund but atty quicho failed to comply.

Con. Of atty quicho: the checks were for the actual and incidental expenses of the transfer of tct not for
his legal services. Because of financial problems, he needed more time to fund the check

Issue: won he violated canon 16 of cpr

Held: yes. money entrusted to a lawyer for a specific purpose such as for the registration of a deed with
the register of deeds and for expenses and fees for the transfer of title over real property under the
name of his client if not utilized, MUST BE returned immediately to his client upon demand therefor.

the lawyers failure to return the money of his client upon demand gave rise to a presumption that he
has misappropriated said money in violation of the trust reposed to him.

the conversion by a lawyer funds entrusted to him by his client is a gross violation of professional
ethics and a betrayal of public confidence in the legal profession.

Suspended for 1 yr.