Sousa vs. Tinampay

A lawyer who accepts money from a client establishes an attorney-client relationship and owes the client fidelity, competence, and diligence; the lawyer's mere failure to perform the obligations due his client is per se a violation of the Code of Professional Responsibility. Once a lawyer agrees to handle a case, he is required to undertake the task with zeal, care, and utmost devotion, and his negligence in fulfilling these duties subjects him to disciplinary action.

Complainant Victoria C. Sousa was a co-defendant in Civil Case No. 103, entitled Spouses Antonio L. Dominguez and Fe D. Dominguez vs. Victoria Cabilan Sousa, et al., a case for annulment of sale originally raffled to the Municipal Circuit Trial Court (MCTC) of Dauis, Panglao, Bohol. The case was dismissed for lack of jurisdiction and later refiled with the Regional Trial Court (RTC) of Tagbilaran City as Civil Case No. 6657, which the RTC treated as an original case. In connection with this case, complainant executed a Special Power of Attorney (SPA) in favor of respondent on January 13, 2000, naming, constituting, and appointing him to be her attorney-in-fact.

Complainant Victoria C. Sousa was a co-defendant in Civil Case No. 103, a case for annulment of sale filed by Spouses Antonio L. Dominguez and Fe D. Dominguez against her and others. The case was originally raffled to the Municipal Circuit Trial Court (MCTC) of Dauis, Panglao, Bohol, but was dismissed for lack of jurisdiction. It was later refiled with the Regional Trial Court (RTC) of Tagbilaran City and docketed as Civil Case No. 6657, which the RTC treated as an original case.

On January 13, 2000, complainant executed a Special Power of Attorney (SPA) in favor of respondent, naming, constituting, and appointing him to be her attorney-in-fact. The SPA expressly directed respondent to represent her before any court, person, or office relative to whatever properties she had acquired, to appear for and in her name in all stages of all cases filed for or against her, including Civil Case No. 103 (later Civil Case No. 6657), and to appear in all stages, including pre-trial and amicable settlement.

According to complainant, respondent did not enter his appearance as her counsel in the proceedings before the MCTC. During the pre-trial of the refiled case in the RTC, complainant was declared in default since neither she nor her former counsel appeared. Although respondent was present during the pre-trial, he remained silent and did not submit any notice for his substitution as the new counsel of complainant. Respondent never admitted in open court that he was the legal counsel of complainant, but he continuously accepted payment from her. Completely unaware of the order of default against her, complainant continued to remit payments to respondent, which the latter accepted.

Respondent countered that he was never the counsel of complainant, insisting that Atty. Teofisto Cabilan was the counsel of record, and that he represented complainant's co-defendants in Civil Case No. 6657. He claimed there was never any retainer agreement between him and complainant engaging him as counsel, although he admitted that he had billed complainant for the case and was paid P41,500.00 as referral fee. He also maintained that complainant was updated minute by minute of all the proceedings, that she was well represented through the Cual family, and that he had an updated accounting of all her remittances. He further claimed that the billings he sent to complainant were for his services to the Cual family charged against their land where complainant constructed her residential/vacation house.

The Investigating Commissioner found that respondent was clearly negligent and unmindful of his duties to complainant with regard to the Dominguez case during the pre-trial, which resulted in her being declared in default. He was present during the proceedings, supposedly representing the other co-defendants, and yet inexplicably did not do anything to protect the interest of complainant either as attorney-in-fact or as counsel on special appearance in view of the absence of regular counsel. Moreover, respondent did not report the incident at least soon enough to complainant so that appropriate action could be taken to reverse the default order.

• Attorney-Client Relationship: Complainant insisted that respondent is her counsel considering that she executed an SPA authorizing him to appear and represent her in Civil Case No. 6657, and that respondent never denied the validity and due execution of the SPA.
• Negligence and Prejudice: Complainant argued that she was declared in default and was prejudiced by respondent's negligence, and that respondent failed to account for the various amounts he received from her.
• Fiduciary Duty: Complainant asserted that respondent is guilty of gross misconduct for failing to account for the various amounts he received from her, and that the fiduciary nature of the relationship between counsel and client imposes on the lawyer the duty to account for the money or property collected or received for or from the client.

• Absence of Attorney-Client Relationship: Respondent countered that he was never the counsel of complainant, insisting that Atty. Teofisto Cabilan was the counsel of record, and that he represented complainant's co-defendants in Civil Case No. 6657.
• No Retainer Agreement: Respondent argued that there was never any retainer agreement between him and complainant engaging him as counsel, although he admitted billing complainant for the case and being paid P41,500.00 as referral fee.
• Full Disclosure and Accounting: Respondent maintained that complainant was updated minute by minute of all the proceedings, that she was well represented through the Cual family, and that he had an updated accounting of all her remittances.
• Nature of Billings: Respondent claimed that the billings he sent to complainant were for his services to the Cual family charged against their land where complainant constructed her residential/vacation house.

• Attorney-Client Relationship: Whether an attorney-client relationship was established between complainant and respondent through the execution of the Special Power of Attorney and respondent's acceptance of payments.
• Negligence: Whether respondent was negligent in failing to protect complainant's interest during the pre-trial of Civil Case No. 6657, resulting in her declaration of default.
• Administrative Liability: Whether respondent's negligence constitutes a violation of the Code of Professional Responsibility warranting administrative sanction.
• Restitution: Whether respondent should be ordered to return the amounts he received from complainant.

• Attorney-Client Relationship: Yes. The execution of the SPA and respondent's acceptance of money from complainant established an attorney-client relationship, giving rise to the duty of fidelity to the client's cause.
• Negligence: Yes. Respondent was negligent and unmindful of his sworn duties to complainant when he failed to represent her during the pre-trial despite being present, resulting in her declaration of default.
• Administrative Liability: Yes. Respondent's neglect of the legal matter entrusted to him constitutes flagrant violations of Canons 17 and 18, and Rules 18.03 and 18.04 of the Code of Professional Responsibility, constituting inexcusable negligence.
• Restitution: Yes. Respondent is ordered to return the legal fees amounting to P121,000.00 and $950.00, computed at the exchange rate prevailing at the time of payment, with legal interest at 6% per annum.

• Attorney-Client Relationship: The Court found that complainant availed herself of respondent's legal services as evidenced by the SPA she executed in his favor on January 13, 2000. The SPA expressly stated that respondent shall represent complainant in all the cases filed for or against her, including Civil Case No. 6657, and categorically directed him to appear in all stages of the case such as the pre-trial conference. The Court cited Reyes vs. Atty. Vitan, which held that when a respondent accepts money from a complainant, it is understood that he agreed to take up the latter's case and that an attorney-client relationship between them was established.

• Negligence: The Court found that respondent was present during the pre-trial stage of Civil Case No. 6657 but failed to represent complainant well enough and protect her interest either as an attorney-in-fact or by way of special appearance. Consequently, complainant was declared in default. The situation became worse when respondent failed to at least inform complainant about the progress of the case so that proper action could be taken to reverse the default order. The Court held that a lawyer's duty of competence and diligence includes properly representing the client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, as well as prosecuting the handled cases with reasonable dispatch.

• Administrative Liability: The Court held that a lawyer's negligence in fulfilling his duties subjects him to disciplinary action, and that the lawyer's mere failure to perform the obligations due his client is per se a violation. The Court cited United Coconut Planters Bank vs. Atty. Noel, where the Court suspended a respondent for three years for inexcusable negligence in failing to file an answer on behalf of complainant, resulting in the latter being declared in default. The Court found that respondent's neglect of the legal matter entrusted to him constitutes inexcusable negligence for which he must be held administratively liable.

• Restitution: The Court observed that while complainant alleged that respondent received P202,500.00 and $2,168.00, only the following amounts were supported by evidence: (1) P111,500.00, (2) P9,500.00, (3) $500.00, (4) $250.00, and (5) $200.00. Since respondent failed to render legal service to complainant, he should have promptly accounted for and returned the money to her. The Court ordered respondent to return the legal fee amounting to P121,000.00 and $950.00, computed at the exchange rate prevailing at the time of payment, with interest at 6% per annum from the time of respondent's receipt of the Decision until full payment.

• Attorney-Client Relationship — Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the client's cause. Once a lawyer agrees to handle a case, he is required to undertake the task with zeal, care, and utmost devotion. In this case, the SPA executed by complainant in favor of respondent, coupled with respondent's acceptance of payments, established the attorney-client relationship.

• Duty of Competence and Diligence — A lawyer's duty of competence and diligence includes not just reviewing the cases entrusted to the counsel's care or giving sound legal advice; it consists of properly representing the client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, as well as prosecuting the handled cases with reasonable dispatch. The Court applied this doctrine in finding respondent negligent for failing to represent complainant during pre-trial despite being present.

• Per Se Violation for Negligence — A lawyer's negligence in fulfilling his duties subjects him to disciplinary action, and while such negligence is incapable of exact formulation, the lawyer's mere failure to perform the obligations due his client is per se a violation. The Court applied this principle in finding respondent administratively liable.

• Right to Decline Employment but Duty Once Accepted — No lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client, and every lawyer has the right to decline employment. However, once he agrees to take on the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him, owing entire devotion to the interest of the client.

• "Once a lawyer agrees to handle a case, he is required to undertake the task with zeal, care and utmost devotion." — This opening statement articulates the fundamental duty of lawyers once they accept a case, setting the standard against which respondent's conduct was measured.

• "Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the client's cause." — This passage establishes the core principle that the attorney-client relationship is formed upon acceptance of payment, which was central to the Court's finding that respondent was complainant's counsel.

• "A lawyer's duty of competence and diligence includes not just reviewing the cases entrusted to the counsel's care or giving sound legal advice. Significantly, it consists of properly representing the client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, as well as prosecuting the handled cases with reasonable dispatch." — This passage defines the scope of a lawyer's duty of competence and diligence, which respondent failed to fulfill when he did not protect complainant's interest during pre-trial.

• "The act of receiving money as acceptance fee for legal services in handling complainant's case and subsequently failing to render such services is a clear violation of Canon 18 of the Code of Professional Responsibility which provides that a lawyer shall serve his client with competence and diligence." — This quotation from Reyes v. Atty. Vitan was applied by the Court to the present case, establishing that respondent's failure to render legal services after accepting payment constitutes a clear violation of the CPR.

• United Coconut Planters Bank vs. Atty. Noel, A.C. No. 3951, June 19, 2018 — Cited as controlling precedent for the principle that a lawyer's inexcusable negligence in failing to file pleadings on behalf of a client, resulting in default, warrants suspension from the practice of law. The Court suspended the respondent in that case for three years.

• Reyes vs. Atty. Vitan, 496 Phil. 1 (2005) — Cited for the doctrine that receiving money as acceptance fee for legal services and subsequently failing to render such services is a clear violation of Canon 18 of the Code of Professional Responsibility.

• Segovia-Ribaya vs. Atty. Lawsin, 721 Phil. 44 (2013) — Cited as precedent for imposing suspension of one year for a lawyer's failure to perform his undertaking under his retainership agreement with his client and to return the money given to him.

• Go vs. Atty. Buri, A.C. No. 12296, December 4, 2018 — Cited as precedent for suspending an erring lawyer for two years for neglecting her client's affairs and failing to return the latter's money and/or property despite demand.

• San Gabriel vs. Atty. Sempio, A.C. No. 12423, March 26, 2019 — Cited for the principle that once a lawyer agrees to handle a case, he is required to undertake the task with zeal, care, and utmost devotion, and that acceptance of money from a client establishes an attorney-client relationship.

• Ball vs. Atty. Mataro, A.C. No. 12294 (Resolution), January 30, 2019 — Cited for the definition of a lawyer's duty of competence and diligence, including properly representing the client before any court or tribunal.

• Caranza Vda. De Saldivar vs. Atty. Cabanes, Jr., 713 Phil. 530 (2013) — Cited in support of the standard of legal proficiency and devotion expected of lawyers.

• Santiago vs. Atty. Fojas, 318 Phil. 79, 86-87 (1995) — Cited for the principle that a client is entitled to the benefit of any and every remedy authorized by law and may expect his lawyer to assert every such remedy or defense.

• Canon 17, Code of Professional Responsibility — Provides that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed in him. The Court found respondent violated this canon by failing to protect complainant's interest during pre-trial.

• Canon 18, Code of Professional Responsibility — Provides that a lawyer shall serve his client with competence and diligence. The Court found respondent violated this canon by neglecting the legal matter entrusted to him.

• Rule 18.03, Code of Professional Responsibility — Provides that a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable. The Court found respondent violated this rule by failing to represent complainant during pre-trial.

• Rule 18.04, Code of Professional Responsibility — Provides that a lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to client's request for information. The Court found respondent violated this rule by failing to inform complainant of the default order so that proper action could be taken.

Perlas-Bernabe, Senior Associate Justice (Chairperson), Hernando, and Zalameda, JJ., concurred. A. Reyes, Jr., J., was on leave.