OCA CIRCULAR NO. 118-2003, August 29, 2003

For the information and guidance of all concerned,
quoted hereunder is the decision of the Second Division of the Supreme
Court in the Administrative Case No. 5831, entitled “CESAR A. ESPIRITU
vs. ATTY. JUAN B. CABEEDO IV” dated January 13, 2003, to wit:

This is an administrative complaint filed with the
Integrated Bar of the Philippines (IBP) on May 8, 2001 by complainant
Cesar A. Espiritu against Atty. Juan Cabredo IV, for failure to fulfill a
fiduciary obligation to a client.

“xxx

The Code of Professional Responsibility provides:

CANON 16 — A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

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
hen 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.

The relationship between a lawyer and a client is highly fiduciary, it requires a high degree of fidelity and good faith.^[10]
Hence, in dealing with trust property, a lawyer should be very
scrupulous. Money or other trust property of the client coming into the
possession of the lawyer should be reported by the latter and accounted
for promptly and should not under any circumstances, be commingled with
his own or be used by him.^[11]

In this case, respondent claims that he did not
know about the receipt by his secretary on the amount of P51,161.00
received from Esphar until he read the first demand letter of the
company, which stated:

March 21, 2000

JUDGE JUAN CABREDO

Cubao, Quezon City

Dear Judge:

Due to your failure to make interbank deposit as
what we have agreed upon yesterday, March 20, 2000, we are sending
bearer, Mrs. MARTTESS ALEJANDRINO, to collect the amount of P51,161.00
representing payment intended for BPI FAMILY BANK which was coursed
through your office per your instruction.

We are hoping that you will not fail to return the
money through bearer hereof Her specimen signature is shown below for
identification purposes.

Thank you.

Very truly yours.

ESPHAR MEDICAL CENTER, INC.

Specimen Signature of:

(signed)

MARTTESS ALEJANDRINO

However, even after receiving this notice and two
other demand letters, respondent never returned the money of complainant
nor paid it to the bank. Indeed, it is improbable that respondent’s
secretary failed to inform complainant about the receipt of such a
substantial sum of money. In failing to account for the money of his
client, respondent violated not only the Code of Professional
Responsibility but also his oath to conduct himself with all good
fidelity to his clients^.[12]
Like judges, lawyers must not only be proper but they must also appear
to be so. This way, the people’s faith in the justice system would
remain unshaken.^[13]

It appears that respondent, while now a practicing lawyer was a former judge.^[14]
Thus, he should have known the ethical precepts guiding lawyer who
handle money given to them in trust by their clients and the necessary
consequences for violation thereof, Rule 138 of the Rules of Court provides:

Sec. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefore. — A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit
malpractice, or other gross misconduct in such office, grossly immoral
conduct, or by reason of his conviction of a crime involving moral
turpitude, or for any violation of the oath which he is required to take before admission to practice or
for a willful disobedience of any lawful order of a superior court, or
for corruptly or willfully appearing as an attorney for a party to a case
without authority so to do. Hie practice of soliciting cases at law for
the purpose of gain, either personally or through paid agents or
brokers, constitutes malpractice, (emphasis supplied)

From the evidence presented by complainant, which respondent failed
to rebut, it is clear that the breach of trust committed by respondent
amounted to deceit, as well as a violation of his oath, for which he
should be penalized with either disbarment of suspension While we agree
with the findings of the investigating commissioner, we find the
recommended penalty of suspension for three months to be too light In Reyes v. Maglaya. ^[15] a lawyer was suspended for one year for failing to return Pl,500.00 belonging to his client despite numerous demands. In Castillo v. Taguines. ^[16]
a lawyer failed to deliver to his client P500.00, representing the
monetary settlement of a civil suit despite demands. To make matters
worse, he fooled the client by issuing a bouncing check. He was
suspended for one year.

For his failure to account for P51,161.00 received from his client
and to restitute it without any reason, respondent should be suspended
for one year.

WHEREFORE, Atty. Juan Cabredo, IV, is hereby SUSPENDED for one (1)
year and ORDERED to immediately return to Esphar Medical Center, inc.
the sum of P51,161.00, with WARNING that a repetition of the same or
similar acts will be dealt with more severely. Let copies of the
Decision be entered in his record as an attorney and be furnished the
Integrated Bar of the Philippiines (IBP) and all the courts in the country
for their information and

SO ORDERED.”

Respondent received a copy of this decision on February 4, 2003.

August __29___, 2003.

^[11] Marquez v. Meneses 321 SCRA1 (1999), citing Canon 11 of the Canons of Professional Ethics

^[12] Rule 138, RULES OF COURT

^[13] See Angles v. Uy, 330 SCRA 6 (2000)

^[14] Annex H of Complaint,
Rollo, pp. 27, 32-33., Complaint refers to respondent as “Judge Juan
Cabredo IV” in a letter to the IBP on Bar Discipline and two demand
letters.

^[15] 243 SCRA, 214 (1995)

^[16] 254 SCRA, 554 (1996)