Macarilay vs. Seriña

A lawyer who receives money from a client for a specific purpose—such as filing an action—must either perform the service or immediately return the funds upon failure to do so; failure to render agreed legal services despite receipt of an acceptance fee, coupled with deceitful misrepresentations about the status of the case, constitutes a clear violation of the Code of Professional Responsibility warranting disciplinary action.

The complainant and a co-buyer purchased a lot from a seller who failed to surrender the owner's duplicate certificate of title, preventing registration of the sale. The complainant learned that the seller had mortgaged the lot to third parties, and was advised to secure a copy of the mortgage contract. Through an employee of the Register of Deeds of Quezon City, she was referred to the respondent lawyer, who was recommended to handle the matter. The lawyer-client relationship was thus formed for the purpose of pursuing legal remedies against the seller, including filing an adverse claim and suits to compel surrender of the title.

Complainant Marissa L. Macarilay and one Jenelyn Balaoro bought a lot from Albaria Mohammad sometime in 2000, but could not register the sale because Mohammad failed to surrender the owner's duplicate certificate of title. Complainant later learned from one Reina Ong that Mohammad had mortgaged the lot to a third party. Ong advised her to obtain a copy of the mortgage contract, which required a contact in the Register of Deeds. In January or February 2002, Ong introduced complainant to Vic Paule, an employee of the Register of Deeds of Quezon City, who advised her to get a lawyer and to whom complainant allegedly gave ₱8,000 for assistance in securing the mortgage contract.

On March 18, 2002, complainant, Balaoro, and Ong met Paule at Star Mall in Mandaluyong and proceeded to the office of respondent Atty. Felix B. Seriña, the lawyer Paule had recommended. Complainant consulted respondent about the problem concerning the transfer of the lot title, and he advised that the first step was to file an adverse claim with the Register of Deeds. Respondent required an acceptance fee of ₱20,000 before acting, and complainant issued a check for that amount on the same day. Subsequently, respondent asked for ₱3,000 as notarization fee and ₱5,000 as filing fee for the adverse claim, which complainant and Balaoro paid on April 5, 2002, when respondent typed the affidavit of adverse claim in their presence and they signed it. On May 16, 2002, upon respondent's advice, complainant gave him another ₱20,000 in check as filing fees for suits to be filed against Mohammad.

Towards the middle of the year, complainant inquired about the status of the cases, but respondent could not give developments other than that the adverse claim had been filed. Respondent later assured complainant that the case against Mohammad was already filed in court, though he could not identify the particular court except that it was pending in the sala of one "Judge Regala." Upon verification with the courts and the fiscal's office in Quezon City, complainant learned that no case, criminal or civil, had ever been filed by respondent against Mohammad. When complainant called respondent about her findings and suggested service of summons by publication—having received advice from Atty. Noel Sorreda that such service was appropriate given Mohammad's unknown whereabouts—respondent became angry, and complainant did not insist.

On March 24, 2003, upon complainant's request, Atty. Sorreda called respondent to inquire about the specific branch where the case was supposedly pending; respondent became angry and hung up. Complainant authorized Atty. Sorreda to terminate respondent's services on her behalf, and Atty. Sorreda sent a letter dated March 26, 2003, confirming the verbal termination and requesting turnover of pertinent documents. Complainant herself wrote respondent affirming the letter's contents. In a letter dated April 4, 2003, respondent denied the fact of termination and invited complainant to his office. Complainant responded through Atty. Sorreda on May 16, 2003, reiterating the termination and the request for documents. In a letter dated May 23, 2003, respondent enclosed the documents requested, which revealed that he never filed a suit against Mohammad. Complainant then demanded the return of the money paid for legal services not actually rendered. Instead of returning the money, respondent wrote a letter dated July 14, 2003, denying receipt of any amount other than the ₱20,000 acceptance fee and demanding payment of alleged unpaid attorney's fees of ₱40,000 and ₱3,000 for notarial services allegedly advanced.

Respondent's version differed: he claimed the parties agreed on a two-phase approach to the problem, with the first phase consisting of having the notary sign the acknowledgment page of the deed, preparing a complaint to compel Mohammad to surrender the title, and executing an affidavit of adverse claim; the second phase involved filing the complaint in court and a criminal complaint for estafa. He claimed the verbal fee agreement was ₱20,000 acceptance fee, ₱15,000 after the first phase, ₱15,000 after the second phase, and ₱3,000 per appearance. He alleged that on April 5, 2002, complainant and Balaoro refused to sign the civil and criminal complaints because Mohammad's residence in the complaints was wrong since his whereabouts were unknown, and that they promised to locate him. Respondent claimed the complaints could not be filed even as late as January 8, 2003, because complainant wanted amendments including an additional defendant and increased damages. He also claimed to have given extensive legal advice on other matters and that complainant still owed him various amounts.

The investigating commissioner found respondent had been remiss in attending to his client's cause, regarded his defense as a mere afterthought, and recommended a penalty of reprimand or suspension plus restitution of ₱40,000, finding that respondent received a total of ₱48,000 from complainant and that ₱8,000 was sufficient compensation for the services actually rendered—the notarization of the deed of sale and the filing of the adverse claim. The IBP Board of Governors adopted the recommendation with modification, suspending respondent for six months and ordering him to pay ₱40,000 restitution.

• Failure to Render Legal Services: Complainant argued that respondent received ₱48,000 in total—₱20,000 acceptance fee, ₱3,000 notarization fee, ₱5,000 filing fee for the adverse claim, and ₱20,000 filing fees for suits against Mohammad—but never filed any case, and that the only services rendered were the notarization of the deed of sale and the filing of the adverse claim.
• Deceit and Misrepresentation: Complainant argued that respondent lied by claiming a case was pending before "Judge Regala" when no case had actually been filed, and that he became angry when confronted, refusing to acknowledge his inaction.
• Right to Restitution: Complainant argued that upon termination of respondent's services and discovery that no cases were filed, respondent was obliged to return the money paid for legal services that were never rendered, and that his refusal to do so warranted disciplinary action.

• Blame on Client: Respondent argued that the civil and criminal complaints were prepared but complainant and Balaoro refused to sign them because Mohammad's address was wrong, and that they promised to locate his whereabouts; he further claimed the complaints could not be filed because complainant wanted amendments.
• Denial of Receipts: Respondent denied receiving any amount other than the ₱20,000 acceptance fee, and claimed complainant still owed him ₱3,000 for notarial fees advanced, ₱200 for notarization and registration expenses, ₱15,000 attorney's fees for the first phase, and ₱40,000 for other legal services.
• Extensive Services Rendered: Respondent claimed he gave extensive legal advice on complainant's other matters, including litigation against spouses Casido, collection of an ₱800,000 debt, and recovery of investments in car transactions.

• Negligence and Diligence: Whether respondent violated his duty to serve his client with competence and diligence by failing to file the cases he had agreed to handle despite receiving payment for filing fees.
• Candor and Fidelity: Whether respondent violated his duty of candor, fairness, and loyalty by deceiving complainant into believing that a case had been filed when none had been.
• Return of Client Funds: Whether respondent was obliged to return the money complainant paid for filing fees and other legal services that were not actually rendered.

• Negligence and Diligence: Yes. Respondent neglected a legal matter entrusted to him by failing to file the complaints as he was supposed to, in violation of Rule 18.03 of the Code of Professional Responsibility, which provides that a lawyer shall not neglect a legal matter entrusted to him.
• Candor and Fidelity: Yes. Respondent was less than candid in his dealings with his client, lied about the filing of a complaint before "Judge Regala," and displayed lack of honesty and fidelity to her cause, violating Canons 15 and 17 of the Code of Professional Responsibility.
• Return of Client Funds: Yes. Where a client gives money to a lawyer for a specific purpose—such as filing an action—the lawyer must immediately return it upon failure to do so; respondent's unjustified withholding of ₱40,000 warranted disciplinary action under Rule 16.03 of the Code of Professional Responsibility.

• Negligence and Diligence: The Court found respondent's claim that the complaints were ready but not filed because complainant refused to sign them, absent the correct address of the defendant, to be unbelievable. First, evidence showed that complainant was insistent that the cases be filed; she repeatedly inquired about the case, but respondent would not give clear answers. Second, the alleged lack of knowledge of the defendant's correct address was not a hindrance to filing a complaint, because the address is material only to the service of summons, which presupposes a properly filed complaint. Section 14 of Rule 14 of the Rules of Court provides remedies when the defendant's whereabouts are unknown, including service by publication. Respondent should have filed the complaint, especially since complainant had already paid the filing fees. His attempt to shift the blame to her was a cover-up of his negligence that could not be countenanced.

• Candor and Fidelity: The Court held that respondent's deception was established by his lie that a civil complaint had been filed in the sala of one "Judge Regala" of the Regional Trial Court of Quezon City, when no case had actually been filed. The investigating commissioner observed that respondent's April 4, 2003 letter did not mention the allegedly prepared complaints, and it was only in his July 14, 2003 letter—responding to complainant's demand for return of money—that he raised this defense for the first time, indicating it was a mere afterthought. The lawyer-client relationship, being one of confidence, requires lawyers to give clients timely, adequate, and truthful updates on case developments; respondent deliberately withheld information about his inaction despite repeated follow-ups, effectively betraying the trust placed in him.

• Return of Client Funds: The Court found it sufficiently proven that complainant paid respondent a total of ₱48,000: ₱20,000 by check dated March 18, 2002; ₱3,000 and ₱5,000 in cash on April 5, 2002, confirmed by Balaoro; and another ₱20,000 by RCBC check dated May 16, 2002. The only legal services actually rendered were the notarization of the deed of sale and the filing of the adverse claim, for which ₱8,000 was sufficient compensation. Thus, respondent was ordered to return the balance of ₱40,000 plus legal interest. The Court cited the principle that where a client gives money to a lawyer for a specific purpose, the lawyer must immediately return it upon failure to accomplish that purpose, and the unjustified withholding of client funds warrants disciplinary action.

• Fiduciary nature of the lawyer-client relationship — The lawyer-client relationship is highly fiduciary in nature; it is delicate, exacting, and confidential, requiring a high standard of conduct and demanding utmost fidelity, candor, fairness, and good faith. Lawyers must be protective of their clients' interests as good parents would be protective of their own families, and must conduct themselves according to the best of their knowledge and discretion with all good fidelity to their clients.

• Duty to return unearned client funds — Where a client gives money to a lawyer for a specific purpose—such as to file an action or to appeal an adverse judgment—the lawyer must, upon failure to do so, immediately return it to the client. The unjustified withholding of funds belonging to the client warrants the imposition of disciplinary action against the lawyer.

• Duty to keep client informed — The lawyer-client relationship, being one of confidence, requires lawyers to give the client timely, adequate, and truthful updates on the developments of the case, so that the trust and faith of clients in their counsel remain unimpaired. A lawyer who deliberately withholds information about his inaction despite the client's repeated follow-ups wrongs the client and betrays the trust placed in him.

• Negligence as a breach of the lawyer's oath — A lawyer who neglects a legal matter entrusted to him, in violation of Rule 18.03 of the Code of Professional Responsibility, and who attempts to cover up such negligence by shifting blame to the client, commits a major breach of the lawyer's oath. The failure to discharge duty properly makes the lawyer answerable not just to the client, but also to the Court, the legal profession, and the general public.

• "Failure to render the legal services agreed upon, despite the undisputed receipt of an acceptance fee, is a clear violation of the Code of Professional Responsibility. Negligence in attending to the needs of a client and a deceitful cover-up of such carelessness likewise constitute major breaches of the lawyer's oath." — This opening statement articulates the core ratio decidendi of the case, establishing that non-performance of agreed legal services after accepting payment, combined with deceitful cover-up, constitutes professional misconduct.

• "Where the client gives money to the lawyer for a specific purpose -- such as to file an action or to appeal an adverse judgment -- the latter should, upon failure to do so, immediately return it to the former. The unjustified withholding of funds belonging to the client warrants the imposition of disciplinary action against the lawyer." — This passage states the controlling doctrine on a lawyer's obligation to return client funds when the specific purpose for which they were given is not accomplished, and is the basis for the restitution order.

• "The lawyer-client relationship, being one of confidence, requires lawyers to give the client timely, adequate and truthful updates on the developments of the case. In this manner, the trust and faith of clients in their counsel would remain unimpaired." — This excerpt defines the lawyer's duty to keep the client informed, derived from Rule 18.04 of the Code of Professional Responsibility, and explains why respondent's withholding of information about his inaction constituted a breach of fiduciary duty.

• Igual vs. Javier, 254 SCRA 416, March 7, 1996 — Cited for the proposition that the lawyer-client relationship is highly fiduciary in nature and demands a high standard of conduct with utmost fidelity, candor, fairness, and good faith.
• Barnachea vs. Quiocho, 399 SCRA 1, March 11, 2003 — Cited for the fiduciary and confidential nature of the lawyer-client relationship, and for the rule that money entrusted to a lawyer for a specific purpose must be returned immediately if not utilized.
• Pariñas vs. Paguinto, 434 SCRA 179, July 13, 2004 — Cited for the standard of vigilance and attention expected of lawyers as a "good father of a family," and for the rule that lawyers must return money given for a specific purpose upon failure to accomplish it; also cited as jurisprudence supporting the six-month suspension penalty.
• De Guzman vs. Basa, 433 SCRA 1, June 29, 2004 — Cited for the lawyer's oath not to delay any person for money or malice, and for the rule on return of client funds and the disciplinary consequences of unjustified withholding.
• Sencio vs. Calvadores, 395 SCRA 393, January 20, 2003 — Cited for the duty to return money to the client following failure to file the cases, and for the penalty of suspension in similar cases.
• Emiliano Court Townhouses Homeowners Association vs. Dioneda, 399 SCRA 296, March 20, 2003 — Cited for the principle that a lawyer's failure to discharge duty makes him answerable to the client, the Court, the legal profession, and the general public, and for the penalty of suspension.
• Mejares vs. Romana, 425 SCRA 577, March 17, 2004 — Cited for the duty to keep the client informed of case status and for the penalty of suspension in similar cases.

• Canon 15, Code of Professional Responsibility — A lawyer shall observe candor, fairness, and loyalty in all his dealings and transactions with his clients; respondent violated this canon by deceiving complainant about the filing of a case.
• Canon 16 and Rule 16.03, Code of Professional Responsibility — A lawyer shall hold in trust all moneys and properties of his client that may come into his possession, and shall deliver the funds and property of his client when due or upon demand; respondent violated this canon by unjustifiably withholding ₱40,000 belonging to complainant.
• Canon 17, Code of Professional Responsibility — A lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed in him; respondent violated this canon by displaying lack of honesty and fidelity to complainant's cause.
• Canon 18, Rules 18.03 and 18.04, Code of Professional Responsibility — A lawyer shall serve his client with competence and diligence, shall not neglect a legal matter entrusted to him, and shall keep the client informed of the status of his case; respondent violated these rules by failing to file the cases and by withholding information about his inaction.
• Section 14, Rule 14, Rules of Court — Provides for service upon a defendant whose identity or whereabouts are unknown, by publication in a newspaper of general circulation; the Court cited this provision to show that lack of knowledge of the defendant's address was not a hindrance to filing a complaint.

• Sandoval-Gutierrez, J.
• Corona, J.
• Carpio-Morales, J.
• Garcia, J.