VALERIANA U. DALISAY, COMPLAINANT, VS. ATTY. MELANIO MAURICIO, JR., RESPONDENT.

Dalisay versus Mauricio

The Case

This is an administrative case for disbarment or disciplinary action brought by Valeriana U. Dalisay against Atty. Melanio Mauricio, Junior, whom she had engaged as counsel. She paid him attorney's fees and entrusted him with documents, yet he never rendered the legal services she bargained for, and he refused to return her money and papers when she terminated the relationship. The case matters because it is the Supreme Court's own resolution of a motion for reconsideration, and in it the Court speaks with unusual firmness on the fiduciary character of the attorney-client relationship, on the duty to account for and return a client's money, and on the impropriety of a lawyer changing his theory late in the proceedings and then turning accuser against his own former client.

Procedural History

The complaint was filed with the Integrated Bar of the Philippines. Investigating Commissioner Lydia A. Navarro of the Commission on Bar Discipline found that, for the amount paid by the complainant, no action had been taken and no pleadings prepared by the respondent. She recommended that the respondent be required to refund the amount and, surprisingly, that the complaint be dismissed. The Board of Governors of the Integrated Bar adopted and approved that report and recommendation in full. The Supreme Court, however, rendered its own Decision on April 22, 2005, finding the respondent guilty of malpractice and gross misconduct and suspending him from the practice of law for six months. The respondent then filed the motion for reconsideration that is the subject of this resolution, and the Court denied it.

Facts

On October 13, 2001, Valeriana U. Dalisay engaged the respondent as her counsel in a civil case pending before the Municipal Trial Court, Branch 1, Binangonan, Rizal. She paid him documents and attorney's fees totaling 56,000 pesos. Despite receiving that amount, the respondent never rendered legal services for her. She terminated the attorney-client relationship and demanded the return of her money and documents, but he refused.

In his earlier verified comment and in his memorandum before the Integrated Bar, the respondent himself admitted that the complainant had engaged his services in that civil case, having been referred to him by a previous counsel. Only later, in his motion for reconsideration, did he change his story and claim that he had been hired not for that case but for the filing of two new petitions. He also argued that the case had already been submitted for decision before he was engaged, that the complainant withheld documents from him, and that she had offered tampered evidence, which prompted him to file falsification charges against her.

It turned out that the respondent learned of the alleged falsification only after the complainant had already terminated their relationship, and only after news of his suspension had spread. He verified the authenticity of her title after the fact, and then filed a sworn complaint charging her with falsification. The complainant countered that he had violated client confidentiality by filing those charges, that he should have returned her money, and that his continued refusal to return it despite the Court's directive constituted contempt.

Issues

• Whether or not the respondent was engaged as counsel in the civil case, such that he was bound to serve the complainant with competence and diligence.
• Whether or not the respondent may change his theory in a motion for reconsideration after admitting the engagement in his earlier pleadings.
• Whether or not the respondent is liable for failing to act on the case and for refusing to return the money he received.
• Whether or not the respondent's claim that the complainant withheld documents and offered falsified evidence exonerates him from liability.

Applicable Provisions

Rule 19.02 of Canon 19 of the Code of Professional Responsibility provides:

Rule 19.02 – A lawyer who has received information that his clients has, in the course of the representation, perpetrated a fraud upon a person or tribunal, shall promptly call upon the client to rectify the same, and failing which he shall terminate the relationship with such client in accordance with the Rules of Court.

This rule governs how a lawyer must act upon discovering that his client has perpetrated a fraud, and the Court uses it to show that the respondent's proper recourse was to confront the client and, failing rectification, to terminate the relationship, not to abandon his duties and later file criminal charges out of vindictiveness.

Ruling

On the first issue, the Court held that no lawyer is obliged to act for every person who wishes to become his client, and he has the right to decline employment. But once he accepts money from a client, an attorney-client relationship is established, giving rise to the duty of fidelity to the client's cause. The respondent assumed that duty when he received the 56,000 pesos and agreed to handle the case, and he was remiss in performing it. There was nothing in the records to show that he entered his appearance as counsel of record, and no evidence or pleading to show that he initiated new petitions.

On the second issue, the Court refused to entertain the respondent's new version. A party should decide early what version he is going to advance, and a change of theory in the latter stage of the proceedings is objectionable because it is contrary to the rules of fair play, justice and due process. The respondent was bound by his previous admission, and his inconsistent assertions revealed his dishonesty to the Court.

On the third issue, the Court held that even assuming the engagement was for the two new petitions, the respondent's liability was still unmistakable, since there was nothing to show he filed any petition. The ethics of the profession demand that he immediately return the filing fees. Money entrusted to a lawyer for a specific purpose but not used must immediately be returned to the client on demand, and the complainant had made repeated demands without success. The fact that the case was already submitted for decision did not justify his inaction, for his first duty was to enter his appearance, and he failed even that simple task. He cannot expect to be paid for doing nothing.

On the fourth issue, the Court held that the claim of withheld documents was preposterous. When a lawyer accepts a case, his acceptance is an implied representation that he possesses the requisite academic learning, skill and ability to handle it, and the respondent knew where to obtain copies of the certificates of title. As to the alleged falsification, the Court held that even if true, it would not exonerate him. Under Rule 19.02 he should have called upon the client to rectify the fraud and, failing that, terminated the relationship. He learned of the alleged falsification long after the relationship had ended, in an active search for a justification of his negligence, and his filing of charges was motivated by vindictiveness. The Court stressed that the authority of an attorney begins with his retainer, giving rise to a relationship highly fiduciary in nature and of a very delicate, exacting, and confidential character, requiring a high degree of fidelity and good faith.

Doctrine

A lawyer is not obliged to accept every client, but once he accepts money from a client, an attorney-client relationship is established, giving rise to the duty of fidelity, and he must serve with competence and diligence. A party must decide early what version he will advance; a change of theory in a motion for reconsideration is objectionable as contrary to fair play, justice and due process. Money entrusted to a lawyer for a specific purpose, such as a filing fee, but not used must immediately be returned to the client on demand. When a lawyer learns that his client has perpetrated a fraud in the course of the representation, Rule 19.02 requires him to call upon the client to rectify it and, failing that, to terminate the relationship, rather than abandon his duties or later file charges out of vindictiveness.

Disposition

The Court denied the respondent's motion for reconsideration, held its earlier Decision immediately executory, and directed him to report his compliance to the Office of the Bar Confidant.

Remember This

The single line worth memorizing is that once a lawyer accepts money from a client, the attorney-client relationship is established and he cannot expect to be paid for doing nothing. Examiners like to use this case on the duty to account for and return a client's money, on the prohibition against changing theories late in the proceedings, and on the fiduciary and confidential character of the retainer.