8/30/2021 [ Adm. Case No.

99-634, June 10, 2002 ]

432 Phil. 840

THIRD DIVISION
[ Adm. Case No. 99-634, June 10, 2002 ]
DOMINADOR P. BURBE, COMPLAINANT, VS. ATTY. ALBERTO C.
MAGULTA, RESPONDENT.

DECISION

PANGANIBAN, J.:

After agreeing to take up the cause of a client, a lawyer owes fidelity to both cause and client,
even if the client never paid any fee for the attorney-client relationship. Lawyering is not a
business; it is a profession in which duty to public service, not money, is the primary
consideration.

The Case

Before us is a Complaint for the disbarment or suspension or any other disciplinary action
against Atty. Alberto C. Magulta. Filed by Dominador P. Burbe with the Commission on Bar
Discipline of the Integrated Bar of the Philippines (IBP) on June 14, 1999, the Complaint is
accompanied by a Sworn Statement alleging the following:

“x x x                                       x x x                                  x x x

“That in connection with my business, I was introduced to Atty. Alberto C. Magulta,

sometime in September, 1998, in his office at the Respicio, Magulta and Adan Law
Offices at 21-B Otero Building, Juan de la Cruz St., Davao City, who agreed to
legally represent me in a money claim and possible civil case against certain parties
for breach of contract;

“That consequent to such agreement, Atty. Alberto C. Magulta prepared for me the
demand letter and some other legal papers, for which services I have accordingly
paid; inasmuch, however, that I failed to secure a settlement of the dispute, Atty.
Magulta suggested that I file the necessary complaint, which he subsequently
drafted, copy of which is attached as Annex A, the filing fee whereof will require the
amount of Twenty Five Thousand Pesos (P25,000.00);

“That having the need to legally recover from the parties to be sued I, on January 4,
1999, deposited the amount of P25,000.00 to Atty. Alberto C. Magulta, copy of the
Receipt attached as Annex B, upon the instruction that I needed the case filed
immediately;

“That a week later, I was informed by Atty. Alberto C. Magulta that the complaint
had already been filed in court, and that I should receive notice of its progress;

“That in the months that followed, I waited for such notice from the court or from
Atty. Magulta but there seemed to be no progress in my case, such that I frequented
his office to inquire, and he would repeatedly tell me just to wait;

“That I had grown impatient on the case, considering that I am told to wait [every
time] I asked; and in my last visit to Atty. Magulta last May 25, 1999, he said that
the court personnel had not yet acted on my case and, for my satisfaction, he even
brought me to the Hall of Justice Building at Ecoland, Davao City, at about 4:00
p.m., where he left me at the Office of the City Prosecutor at the ground floor of the
building and told to wait while he personally follows up the processes with the Clerk
of Court; whereupon, within the hour, he came back and told me that the Clerk of
Court was absent on that day;

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“That sensing I was being given the run-around by Atty. Magulta, I decided to go to
the Office of the Clerk of Court with my draft of Atty. Magulta’s complaint to
personally verify the progress of my case, and there told that there was no record at
all of a case filed by Atty. Alberto C. Magulta on my behalf, copy of the
Certification dated May 27, 1999, attached as Annex C;

“That feeling disgusted by the way I was lied to and treated, I confronted Atty.
Alberto C. Magulta at his office the following day, May 28, 1999, where he
continued to lie to with the excuse that the delay was being caused by the court
personnel, and only when shown the certification did he admit that he has not at all
filed the complaint because he had spent the money for the filing fee for his own
purpose; and to appease my feelings, he offered to reimburse me by issuing two (2)
checks, postdated June 1 and June 5, 1999, in the amounts of P12,000.00 and
P8,000.00, respectively, copies of which are attached as Annexes D and E;

“That for the inconvenience, treatment and deception I was made to suffer, I wish to
complain Atty. Alberto C. Magulta for misrepresentation, dishonesty and oppressive
conduct;”

x x x                                         x x x                                  x x x.[1]

On August 6, 1999, pursuant to the July 22, 1999 Order of the IBP Commission on Bar
Discipline,[2] respondent filed his Answer[3] vehemently denying the allegations of complainant
“for being totally outrageous and baseless.” The latter had allegedly been introduced as a
kumpadre of one of the former’s law partners. After their meeting, complainant requested him
to draft a demand letter against Regwill Industries, Inc. -- a service for which the former never
paid. After Mr. Said Sayre, one of the business partners of complainant, replied to this letter, the
latter requested that another demand letter -- this time addressed to the former -- be drafted by
respondent, who reluctantly agreed to do so. Without informing the lawyer, complainant asked
the process server of the former’s law office to deliver the letter to the addressee.

Aside from attending to the Regwill case which had required a three-hour meeting, respondent
drafted a complaint (which was only for the purpose of compelling the owner to settle the case)
and prepared a compromise agreement. He was also requested by complainant to do the
following:

1. Write a demand letter addressed to Mr. Nelson Tan

2. Write a demand letter addressed to ALC Corporation

3. Draft a complaint against ALC Corporation

4. Research on the Mandaue City property claimed by complainant’s wife

All of these respondent did, but he was never paid for his services by complainant.

Respondent likewise said that without telling him why, complainant later on withdrew all the
files pertinent to the Regwill case. However, when no settlement was reached, the latter
instructed him to draft a complaint for breach of contract. Respondent, whose services had
never been paid by complainant until this time, told the latter about his acceptance and legal
fees. When told that these fees amounted to P187,742 because the Regwill claim was almost P4
million, complainant promised to pay on installment basis.

On January 4, 1999, complainant gave the amount of P25,000 to respondent’s secretary and told
her that it was for the filing fee of the Regwill case. When informed of the payment, the lawyer
immediately called the attention of complainant, informing the latter of the need to pay the
acceptance and filing fees before the complaint could be filed. Complainant was told that the
amount he had paid was a deposit for the acceptance fee, and that he should give the filing fee
later.

Sometime in February 1999, complainant told respondent to suspend for the meantime the filing
of the complaint because the former might be paid by another company, the First Oriental
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Property Ventures, Inc., which had offered to buy a parcel of land owned by Regwill Industries.
The negotiations went on for two months, but the parties never arrived at any agreement.

Sometime in May 1999, complainant again relayed to respondent his interest in filing the
complaint. Respondent reminded him once more of the acceptance fee. In response,
complainant proposed that the complaint be filed first before payment of respondent’s
acceptance and legal fees. When respondent refused, complainant demanded the return of the
P25,000. The lawyer returned the amount using his own personal checks because their law
office was undergoing extensive renovation at the time, and their office personnel were not
reporting regularly. Respondent’s checks were accepted and encashed by complainant.

Respondent averred that he never inconvenienced, mistreated or deceived complainant, and if

anyone had been shortchanged by the undesirable events, it was he.

The IBP’s Recommendation

In its Report and Recommendation dated March 8, 2000, the Commission on Bar Discipline of
the Integrated Bar of the Philippines (IBP) opined as follows:

“x x x [I]t is evident that the P25,000 deposited by complainant with the Respicio
Law Office was for the filing fees of the Regwill complaint. With complainant’s
deposit of the filing fees for the Regwill complaint, a corresponding obligation on
the part of respondent was created and that was to file the Regwill complaint within
the time frame contemplated by his client, the complainant. The failure of
respondent to fulfill this obligation due to his misuse of the filing fees deposited by
complainant, and his attempts to cover up this misuse of funds of the client, which
caused complainant additional damage and prejudice, constitutes highly dishonest
conduct on his part, unbecoming a member of the law profession. The subsequent
reimbursement by the respondent of part of the money deposited by complainant for
filing fees, does not exculpate the respondent for his misappropriation of said funds.
Thus, to impress upon the respondent the gravity of his offense, it is recommended
that respondent be suspended from the practice of law for a period of one (1)
year.”[4]

The Court’s Ruling

We agree with the Commission’s recommendation.

Main Issue:

Misappropriation of Client’s Funds

Central to this case are the following alleged acts of respondent lawyer: (a) his non-filing of the
Complaint on behalf of his client and (b) his appropriation for himself of the money given for
the filing fee.

Respondent claims that complainant did not give him the filing fee for the Regwill complaint;
hence, the former’s failure to file the complaint in court. Also, respondent alleges that the
amount delivered by complainant to his office on January 4, 1999 was for attorney’s fees and
not for the filing fee.

We are not persuaded. Lawyers must exert their best efforts and ability in the prosecution or the
defense of the client’s cause. They who perform that duty with diligence and candor not only
protect the interests of the client, but also serve the ends of justice. They do honor to the bar and
help maintain the respect of the community for the legal profession.[5] Members of the bar must
do nothing that may tend to lessen in any degree the confidence of the public in the fidelity, the
honesty, and integrity of the profession.[6]

Respondent wants this Court to believe that no lawyer-client relationship existed between him
and complainant, because the latter never paid him for services rendered. The former adds that
he only drafted the said documents as a personal favor for the kumpadre of one of his partners.

We disagree. A lawyer-client relationship was established from the very first moment
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complainant asked respondent for legal advice regarding the former’s business. To constitute
professional employment, it is not essential that the client employed the attorney professionally
on any previous occasion. It is not necessary that any retainer be paid, promised, or charged;
neither is it material that the attorney consulted did not afterward handle the case for which his
service had been sought.

If a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view
to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces
with the consultation, then the professional employment is established.[7]

Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship

between the lawyer and the complainant or the nonpayment of the former’s fees.[8] Hence,
despite the fact that complainant was kumpadre of a law partner of respondent, and that
respondent dispensed legal advice to complainant as a personal favor to the kumpadre, the
lawyer was duty-bound to file the complaint he had agreed to prepare -- and had actually
prepared -- at the soonest possible time, in order to protect the client’s interest. Rule 18.03 of the
Code of Professional Responsibility provides that lawyers should not neglect legal matters
entrusted to them.

This Court has likewise constantly held that once lawyers agree to take up the cause of a client,
they owe fidelity to such cause and must always be mindful of the trust and confidence reposed
in them.[9] They owe entire devotion to the interest of the client, warm zeal in the maintenance
and the defense of the client’s rights, and the exertion of their utmost learning and abilities to
the end that nothing be taken or withheld from the client, save by the rules of law legally
applied.[10]

Similarly unconvincing is the explanation of respondent that the receipt issued by his office to
complainant on January 4, 1999 was erroneous. The IBP Report correctly noted that it was quite
incredible for the office personnel of a law firm to be prevailed upon by a client to issue a
receipt erroneously indicating payment for something else. Moreover, upon discovering the
“mistake” -- if indeed it was one -- respondent should have immediately taken steps to correct
the error. He should have lost no time in calling complainant’s attention to the matter and should
have issued another receipt indicating the correct purpose of the payment.

The Practice of Law -- a

Profession, Not a Business

In this day and age, members of the bar often forget that the practice of law is a profession and
not a business.[11] Lawyering is not primarily meant to be a money-making venture, and law
advocacy is not a capital that necessarily yields profits.[12] The gaining of a livelihood is not a
professional but a secondary consideration.[13] Duty to public service and to the administration
of justice should be the primary consideration of lawyers, who must subordinate their personal
interests or what they owe to themselves. The practice of law is a noble calling in which
emolument is a byproduct, and the highest eminence may be attained without making much
money.[14]

In failing to apply to the filing fee the amount given by complainant -- as evidenced by the
receipt issued by the law office of respondent -- the latter also violated the rule that lawyers
must be scrupulously careful in handling money entrusted to them in their professional capacity.
[15] Rule 16.01 of the Code of Professional Responsibility states that lawyers shall hold in trust
all moneys of their clients and properties that may come into their possession.

Lawyers who convert the funds entrusted to them are in gross violation of professional ethics
and are guilty of betrayal of public confidence in the legal profession.[16] It may be true that
they have a lien upon the client’s funds, documents and other papers that have lawfully come
into their possession; that they may retain them until their lawful fees and disbursements have
been paid; and that they may apply such funds to the satisfaction of such fees and
disbursements. However, these considerations do not relieve them of their duty to promptly
account for the moneys they received. Their failure to do so constitutes professional
misconduct.[17] In any event, they must still exert all effort to protect their client’s interest
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within the bounds of law.

If much is demanded from an attorney, it is because the entrusted privilege to practice law
carries with it correlative duties not only to the client but also to the court, to the bar, and to the
public.[18] Respondent fell short of this standard when he converted into his legal fees the filing
fee entrusted to him by his client and thus failed to file the complaint promptly. The fact that the
former returned the amount does not exculpate him from his breach of duty.

On the other hand, we do not agree with complainant’s plea to disbar respondent from the
practice of law. The power to disbar must be exercised with great caution. Only in a clear case
of misconduct that seriously affects the standing and the character of the bar will disbarment be
imposed as a penalty.[19]

WHEREFORE, Atty. Alberto C. Magulta is found guilty of violating Rules 16.01 and 18.03 of
the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law
for a period of one (1) year, effective upon his receipt of this Decision. Let copies be furnished
all courts as well as the Office of the Bar Confidant, which is instructed to include a copy in
respondent’s file.

SO ORDERED.

Sandoval-Gutierrez, and Carpio, JJ., concur.

Puno, J., (Chairman), abroad, on official leave

[1] Records, pp. 2-3.

[2] Ibid., p. 15.

[3] Id., at pp. 20-28.

[4] Report and Recommendation, pp. 10-11; records, 261-262.

[5] R. Agpalo, Legal Ethics, 1997 ed., p. 156.

[6] Sipin-Nabor v. Baterina, AC No. 4073, June 28, 2001.

[7] Hilado v. David, 84 Phil. 569, September 21, 1949.

[8] Junio v. Grupo, AC No. 5020, December 18, 2001.

[9] Aromin v. Boncavil, 315 SCRA 1, September 22, 1999.

[10] Tan v. Lapak, 350 SCRA 74, January 23, 2001.

[11] Cantiller v. Potenciano, 180 SCRA 246, December 18, 1989.

[12] Canlas v. Court of Appeals, 164 SCRA 160, August 8, 1988.

[13] R. Agpalo, supra, p.12.

[14] Ibid., p. 13.

[15] Medina v. Bautista, 12 SCRA 1, September 26, 1964.

[16]
Sipin-Nabor v. Baterina, supra; Gonato v. Adaza, 328 SCRA 694, March 27, 2000, citing
Obia v. Catimbang, 196 SCRA 23, April 19, 1991.
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[17] Tanhueco v. De Dumo, 172 SCRA 760, April 25, 1989.

[18] Aromin v. Boncavil, supra.

[19] Montano v. Integrated Bar of the Phils. et al., AC No. 4215, May 21, 2001.

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