OCA CIRCULAR NO. 25-2005, March 18, 2005

For the information and guidance of all concerned, quoted hereunder
is the Decision of the Court En Bane October 28, 2003 in Administrative
Case No. 5829, entitled “Daniel Lemoine vs. Atty. Amadeo E. Balon,
Jr.”‘, to wit:

“On December 17, 1999 , complainant Daniel Lemoine, a French national, filed a verified complaint^[1]
against respondent Atty. Amadeo E. Balon, Jr., for estafa and
misconduct before the Integrated Bar of the Philippines . The case,
docketed as CBD Case No. 99-679, was referred by the
Commission on Bar Discipline to an Investigator for investigation,
report and recommendation.

The facts that spawned the filing of the complaint are as follows:

In early 1998, complainant filed a car insurance claim with the
Metropolitan Insurance Company (Metropolitan Insurance), the insurer of
his vehicle which was lost. As complainant encountered problems in
pursuing his claim which was initially rejected,^[2] his friend, a certain Jesus, “Jess” Garcia (Garcia), arranged for the engagement of respondent’s services.

By letter^[3] of October
21, 1998 addressed to Elde Management, Inc., “ATTN: Mr. Daniel Lemoine,”
under whose care complainant could be reached, respondent advised
complainant, whom he had not before met, that for his legal services he
was charging “25% of the actual amount being recovered… pay able upon
successful recovery;” an advance payment of P50,000.00 ” to be charged
[to complainant] to be deducted from whatever amount [would] be
successfully collected;” P1,000.00 “as appearance and conference fee for
each and every court hearings, conferences outside our law office and
meetings before the Office of the Insurance Commission which will be
also charged to our 25% recovery fee;” and legal expenses “such as but
not limited to filing fee, messengerial and postage expenses… and
other miscellaneous but related expenses,” to be charged to
complainant’s account which would be reimbursed upon presentation of
statement of account.

The letter-proposal of respondent regarding attorney’s fees does
not bear complainants conformity, he not having agreed therewith.

It appears that Metropolitan Insurance finally offered to settle complainant’s claim, for by letter^[4] of December 9, 1998 addressed to it, respondent confirmed his acceptance of its offer to settle the claim of complainant “in an ex-gratia basis of 75% of his policy coverage which is therefore FIVE HUNDRED TWENTY FIVE THOUSAND (P525.000.00) PESOS.”

A day or a few days before December 23, 1998 when complainant left for France,^[5] he, on the advice of respondent, signed an already prepared undated Special Power of Attorney^[6]
authorizing respondent and/or Garcia to bring any action against
Metropolitan Insurance for the satisfaction of complainant’s claim as
well as to “negotiate, sign, compromise [,] encash and receive payment”
from it. The Special Power of Attorney was later dated December 23, 1998
on which same date Metropolitan Insurance issued a Chinabank Check No.
841172 payable to complainant in the amount of P525,000.00 as full settlement of the claim.^[7] The check was received by respondent.

In the meantime, complainant returned to the Philippines in early January 1999 but left again on the 24 th of the same month.^[8]
On inquiry about the status of his claim, Garcia echoed to complainant
what respondent had written him (Garcia) in respondent’s letter^[9] of March 26, 1999 that the claim was still pending
with Metropolitan Insurance and that it was still subject of
negotiations in which Metropolitan Insurance offered to settle it for
P350,000.00 representing fifty percent thereof. In the same letter to
Garcia, respondent suggested the acceptance of the offer of settlement
to avoid a protracted litigation.

On December 6, 1999, on complainant’s personal visit to the office
of Metropolitan Insurance, he was informed that his claim had long been
settled via a December 23, 1998 check given to respondent the year
before.^[10] Complainant lost
no time in going to the law office of respondent who was not around,
however, but whom he was able to talk by telephone during which he
demanded that he turn over the proceeds of his claim.”^[11]

Respondent thereupon faxed to complainant a December 7, 1999 letter^[12]
wherein he acknowledged having in his possession the proceeds of the
encashed check which he retained, however, as attorney’s lien pending
complainant’s payment of his attorney’s fee, equivalent to fifty percent
(50%) of the entire amount collected. In the same letter, respondent
protested what he branded as the “uncivilized and unprofessional
behavior” complainant “reportedly demonstrated” at respondent’s office.
Respondent winded up his letter as follows, quoted verbatim:

We would like to clear that we cannot give the aforesaid amount until and unless our attorney’s fees will be forthwith agreed and settled. In the same manner, should you be barbaric and uncivilized with your approached, we
will not hesitate to make a proper re presentation with the Bureau of
Immigration and De portation for the authenticity of your visa.
Department of Labor and Employment for your working status. Bureau of
Internal Revenue for your taxation compliance and the National Bureau oF
Investigation [with] which we have a good network…

While it [is your] prerogative to file a legal action against
us, it is also our prerogative to file a case against you. We will
rather suggest if you could request your lawyer to just confer with us
for the peaceful settlement of this matter. (Underscoring and emphasis
supplied)

As despite written demands,^[13]
respondent refused to turn over the proceeds of the insurance claim and
to acknowledge the. unreasonableness of the attorney’s fees he was
demanding, complainant instituted the administrative action at bar on
December 17, 1999 .

In his Complaint-Affidavit, complainant alleged that “[i]t appears
that there was ‘irregularity’ with the check,” it having been issued
payable to him, but ” and/or AMADEO BALON” was therein intercalated after his (complainant’s) name.^[14]

Maintaining that respondent was entitled to only P50,000.00 in attorney’s fees,^[15] complainant decried respondent’s continued possession of the proceeds of his claim^[16] and his misrepresentations that the recovery thereof was fraught with difficulties.^[17]

In his Counter-Affidavit ^[18]
of February 18, 2000, respondent asserted that his continued retention
of the proceeds of complainant’s claim is in lawful exercise of his lien
for unpaid attorney’s fees. He expressed readiness, however, to account
for and turn them over once he got paid fifty percent (50%) thereof, he
citing the so called contingent fee billing method of “no cure, no pay”
adopted by practicing lawyers in the insurance industry as the basis of
the amount of his attorney’s fees,^[19]
which to him was justified in the absence of an attorney-client
contract between him and complainant, the latter having rejected
respondent’s letter-proposal of October 21, 1998.^[20]

Respondent also highlighted the value of the time and efforts he
extended in pursuing complainant’s claim and the expenses he incurred in
connection therewith. He went on to assert that his inability to
contact complainant whose whereabouts he did not know prompted him to
encash the check and keep the proceeds thereof in conformity with the
Special Power of Attorney executed in his favor.^[21]

During the hearings conducted by the IBP Investigator, complainant
echoed his allegations in his Complaint-Affidavit and stressed that he
turned down as unreasonable respondent’s proposal in his October 21,
1998 letter that he be paid 25% of the actual amount collected for his
legal services.^[22] And he
presented documentary evidence, including the March 26, 1999 letter of
respondent informing his co-attorney-in-fact Garcia of the supposedly
still unrecovered claim and suggesting acceptance of the purported offer
of Metropolitan Insurance to settle complainant’s claim at P350,000.00.

Explaining how his above-mentioned March 26, 1999 letter to Garcia
came about, respondent declared that it was made upon Garcia’s request,
intended for a certain Joel Ramiscal (Ramiscal) who was said to be
Garcia’s business partner.^[23]

Respondent later submitted a June 13, 2001 Supplement^[24] to his Counter Affidavit reiterating
his explanation that it was on Garcia’s express request that he wrote
the March 26, 1999 letter, which was directed to the fax number of
Ramiscal.

Additionally, respondent declared that in the first week of May 1999,
on the representation of Garcia that he had talked to complainant about
respondent’s retention of fifty percent (50%) of the insurance proceeds
for professional fees less expenses,^[25]
he gave Garcia, on a staggered basis, the total amount of P233,000.00
which, so respondent averred, is the amount of insurance claim
complainant is entitled to received less attorney’s fees and expenses.^[26] Thus, respondent claimed that he gave Garcia the amount of P30,000.00 on May 31 1999 at
Dulcinea Restaurant in Greenbelt, Makati; the amounts of P50,000.00,
P20,000.00 and P30,000.00 on different occasions at his (respondent’s)
former address through his executive secretary Sally I. Leonardo; the
amount P20,000.00 at the office of his (respondent’s) former employer
Commonwealth Insurance Company through his subordinate Glen V. Roxas;
and several other payments at Dulcinea, and at Manila Intercontinental
Hotel’s coffee shop sometime in October 1999.^[27] Respondent submitted the separate sworn statements of Leonardo and Roxas.^[28]

Explaining why no written memorandum of the turn over of various
payments to Garcia was made, respondent alleged that there was no need
therefore since he very well knew Garcia who is a co-Rotarian and
co-attorney-in-fact and whom he really dealt with regarding
complainant’s claim.^[29]

Respondent furthermore declared that he rejected complainant’s
offer to pay him P50,000.00 for his services, insisting that since there
had been no clear cut agreement on his professional fees and it was
through him that Metropolitan Insurance favorably reconsidered its
initial rejection of complainant’s claim, he is entitled to a contingent
fee of 50% of the net proceeds thereof.^[30]

Finally, respondent declared that he, in connection with his
follow-up of the insurance claim, incurred representation expenses of
P35,000.00, entertainment and other representation expenses on various
occasions of P10,000.00, and transportation and gasoline expenses and
parking fees of P5,000.00;^[31]
and that his retention of complainant’s money was justified in light of
his apprehension that complainant, being an alien without a valid
working permit in the Philippines, might leave the country anytime
without settling his professional fees.^[32]

The Investigating Commissioner, by Report and Recommendation^[33]
of October 26, 2001, found respondent guilty of misconduct and
recommended that he be disbarred and directed to immediately turn over
to complainant the sum of P475,000.00 representing the amount of the
P525,000.00 insurance claim less respondent’s professional fees of
P50,000.00, as proposed by complainant.

The Board of Governors of the Integrated Bar of the Philippines,
acting on the Investigator’s Report, issued Resolution No. XV-2002-401^[34] on August 3, 2002, reading:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and
APPROVED, the Report and Recommendation of the Investigating
Commissioner of the above-entitled case, herein made part of this
Resolution/Decision as Annex “A”; and, finding the recommendation fully
supported by the evidence on record and the applicable laws and rules, with modification, and
considering respondent’s dishonesty which amounted to grave misconduct
and grossly unethical behavior which caused dishonor, not merely to
respondent but the noble profession to which he belongs, Respondent is
hereby SUSPENDED from the practice of Jaw for sjx
(6} months with the directive to turn over the amount of Five Hundred
Twenty Five Thousand (P525,-000.00) Pesos to the complainant without
prejudice to respondent’s right to claim attorney’s fees which he may
collect in the proper forum. (Underscoring supplied)

The records of the case are before this Court.for final action.

Respondent, by a Motion for Reconsideration^[35]
filed with this Court, assails the Investigating Commissioner’s Report
and Recommendation as not supported by clear, convincing and’
satisfactory proof. He prays for the reopening of the case and its
remand to the Investigator so that Garcia can personally appear for his
(respondent’s) confrontation.

There is no need for a reopening of the case. The facts material to its resolution are either admitted or documented.

This Court is in full accord with the findings of the IBP
Investigator that respondent violated the following provisions of the
Code of Professional Responsibility, to wit:

RULE 1.01— A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

xxx

CANON 15— A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his clients.

RULE 15.06— A lawyer shall not state or imp’ly that he is able to influence any public official, tribunal or legislative body.

xxx

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 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.

xxx

CANON 17— A lawyer owes fidelity to the cause of his clients and he shall be mindful of the trust and confidence in him.

xxx

RULE 18.04— A lawyer shall keep the client informed of the
status of his case and shall respond within a reasonable time to the
client’s request for information.

xxx

RULE 21.02— A lawyer shall not, to the disadvantage of his
client, use information acquired in the course of employment, nor shall
he use the same to his advantage or that of a third person, Unless the
client with full knowledge of the circumstances consents thereto.

Specifically with respect to above-quoted provision of Canon 16
of the Code of Professional Responsibility, the Filipino lawyer’s
principal source of ethical rules, which Canon 16 bears on the principal
complaint of complainant, a lawyer must hold in trust all moneys and
properties of his client that he may come to possess. This commandment
entails certain specific acts to be done by a lawyer such as rendering
an accounting of all money or property received for or from the client^[36] as well as delivery of the funds or property to the client when due or upon demand.^[37]
Respondent breached this Canon when after he received the proceeds of
complainant’s insurance claim, he did not report it to complainant, who
had a given address in Makati, or to his co- attorney-in-fact Garcia who
was his contact with respect to complainant.

In fact, long after respondent received the December 23, 1998 check for P525,000.00 he, by his letter of March 26, 1999
to Garcia, had even the temerity to state that the claim was still
pending and recommend “acceptance of the 50% offer…which is P350,000.00 pesos .”
His explanation that he prepared and sent this letter on Garcia’s
express request is nauseating. A lawyer, like respondent, would not and
should not commit prevarication, documented at that, on the mere request
of a friend.

By respondent’s failure to promptly account for the funds he
received and held for the benefit of his client, he committed
professional misconduct.^[38]
Such misconduct is reprehensible at a greater degree, for it was
obviously done on purpose through the employment of deceit to the
prejudice of complainant who was kept in the dark about the release of
the check, until he himself discovered the same, and has to date been
deprived of the use of the proceeds thereof.

A lawyer who practices or utilizes deceit in his dealings with
his client not only violates his duty of fidelity, loyalty and devotion
to the client’s cause but also degrades himself and besmirches the fair
name of an honorable profession.^[39]

That respondent had a lien on complainant’s funds for his attorney’s fees did not relieve him of his duty to account for it.^[40]
The lawyer’s continuing exercise of his retaining lien presupposes that
the client agrees with the amount of attorney’s fees to be charged. In
case of disagreement or when the client contests that amount for being
unconscionable, however, the lawyer must not arbitrarily apply the funds
in his possession to the payment of his fees.^[41]
He can file, if he still deems it desirable, the necessary action or
proper motion with the proper court to fix the amount of such fees.^[42]

In respondent’s case, he never had the slightest attempt to
bring the matter of his compensation for judicial determination so that
his and complainant’s sharp disagreement thereon could have end put to
an end. Instead, respondent stubbornly and in bad faith held on to
complainants fund with the obvious aim of forcing complainant to agree
to the amount of attorney’s fee sought. This is an appalling abuse by
respondent of the exercise of an attorney’s retaining lien which by no
means is an absolute right and cannot at all justify inordinate delay in
the delivery of money and property to his client when due or upon
demand.

Respondent was, before receiving the check, proposing a 25% attorney’s fee. After
he received the check and after complainant had discovered its release
to him, he was already asking for 50%, objection to which complainant
communicated to him. Why respondent had to doubly increase his fees
after the lapse of about one year when all the while he has been- in
custody of the proceeds of the check defies comprehension. At any rate,
it smacks of opportunism, to say the least.

As for respondent’s claim in his June 2001 Supplement to his Counter-Affidavit that he had on several occasions from May 1999 to October 1999 already
delivered a total of P233,000.00 out of the insurance proceeds to
Garcia in trust for complainant, this does not persuade, for it is
bereft of any written memorandum thereof. It is difficult to believe
that a lawyer like respondent could have entrusted such total amount of
money to Garcia without documenting it, especially at a time when, as
respondent alleged, he and Garcia were not in good terms.^[43] Not only that. As stated earlier, respondent’s Counter-Affidavit of February 18, 2000 and his December 7, 1999 letter
to complainant unequivocally contained his express admission that the
total amount of P525,000.00 was in his custody. Such illogical, futile
attempt to exculpate himself only aggravates his misconduct.
Respondent’s claim discredited, the affidavits of Leonardo and Roxas
who, acting allegedly for him, purportedly gave Garcia some amounts
forming part of the P233,000.00 are thus highly suspect.and merit no
consideration.

The proven ancillary charges against respondent reinforce the gravity of his professional misconduct.

The intercalation of respondent’s name to the Chinabank check that was issued payable solely m favor of complainant as twice certified by Metropolitan Insurance^[44] is clearly a brazen act of falsification of a commercial document which respondent resorted to in order to encash the check.

Respondent’s threat in his December 7, 1999 letter to expose
complainant to possible sanctions from certain government agencies with
which he bragged to have a “good network” reflects lack of character,
self-respect, and justness.

It bears noting that for close to five long years respondent has
been in possession of complainant’s funds in the amount of over half a
million pesos. The deceptions and lies that he peddled to conceal, until
its discovery by complainant after about a year, his receipt of the
funds and his tenacious custody thereof in a grossly oppressive manner
point to his lack of good moral character. Worse, by respondent’s
turnaround in his Supplement to his Counter-Affidavit that he already
delivered to complainant’s friend Garcia the amount of P233,000.00
which, so respondent claims, is all that complainant is entitled to, he
in effect has declared that he has nothing more to turn over to
complainant. Such incredible position is tantamount to a refusal to
remit complainant’s funds, and gives rise to the conclusion that he has
misappropriated them.^[45]

In fine, by respondent’s questioned acts, he has shown that  he is no longer fit to remain a member of the noble profession that is the law.

WHEREFORE, respondent Atty. Amadeo E’. Balon, Jr., is found GUILTY of malpractice, deceit and gross misconduct in the practice of his profession as a lawyer and he is hereby DISBARRED. The Office of the Clerk of Court is directed to strike out his name from the Roll of Attorneys and to inform all courts and the Integrated Bar of the Philippines of this Decision.

Respondent is ordered to turn over complainant, Daniel Lemoine,
the amount of P525,000.00 within (30) days from notice, without
prejudice to whatever judicial action he may take to recover his
attorney’s fees and purported expenses incurred in securing the release
thereof from Metropolitan Insurance.

SO ORDERED.”

Copy of the decision was received by respondent on 6 November 2003
and respondent’s motion for reconsideration of the said decision was
denied with finality in the resolution dated 23 November 2004 which
respondent received on 3 January 2005.

__18__ March 2005.

	PRESBITERO J. VELASCO, JR.
	Court Administrator

^[2] Rollo at 46.

^[3] Id. at 49-50.

^[4]  Id. at 19.

^[5] TSN, May 9, 2000, pp. 4-6.

^[6] Rollo at 7-8.

^[7] Id. at 10

^[8] TSN, May 2000 p.7.

^[9] Rollo at 67-68.

^[10]  Rollo at 1.

^[11] Rollo at 1-3.

^[12] Id. at 11-13

^[13] Id. at 20, 21, and 23.

^[14] Rollo at 3.

^[15] Id. at 2.

^[16] Id. at 2-3.

^[17] Id. at 11-13

^[18] Id. at 41-45.

^[19] Id. at 41-43

^[20] Id. at 43

^[21] Rollo at 43.

^[22] TSN, May 9, 2000, pp. 12-13.

^[23] TSN, May 25, 2000, pp. 6-7.

^[24]  Rollo at 88-92.

^[25] Rollo at 89-90.

^[26] Id. at 88 and 90.

^[27] Id. at 90.

^[28] Id. at 95-96

^[29] Id. at 88 and 90.

^[30] Rollo at 90-91.

^[31] Id. at 91.

^[32] Id. at 90.

^[33] Rollo at 111-135.

^[34] Id. at 109-110.

^[35] Rollo at 137-159.

^[36] Code of Professional Responsibility, rule 16.01.

^[37] Id. at Rule 16.03.

^[38] Daroy v. Legaspi, 65 SCRA 304, 312 [1975].

^[39] Agpalo, Comments on the Code of Professional Responsibility and the Code of Judicial Conduct, p. 410 [2001].

^[40] Tanhueco v. De Dumo, 172 SCRA 760 [1989]

^[41] J.K. Mercado and Sons Agricultural Enterprises, Inc. v. De Vera, 317 SCRA 339 [1999]. Ibid.

^[42] Ibid.

^[43] Rollo at 43.

^[44] Rollo at 18 and 102.

^[45] Castillo v. Taguines, 254 SCRA 554 [1996].