J.K. Mercado and Sons Agricultural Enterprises, Inc. v. De Vera
REITERATIONFacts
The Antecedents: Complainants J.K. Mercado and Sons Agricultural Enterprises, Inc., and spouses Jesus K. Mercado and Rosario K. Mercado filed a petition for disbarment against Atty. Eduardo C. De Vera and former Regional Trial Court Judge Eduardo de Vera and Jose Rongkales Bandalan. This stemmed from Civil Case No. 17215, an action filed by Rosario P. Mercado against Jesus K. Mercado, Mercado and Sons, and Standard Fruits Corporation. Judge Bandalan decided in favor of Rosario P. Mercado, awarding her over P9 million. Subsequently, Judge Bandalan granted Atty. De Vera's motion for execution pending appeal and motion to annotate attorney's liens on certificates of title. A writ of execution was issued, and garnishments were served, resulting in the withdrawal of P1,270,734.56. Procedural History: Rosario P. Mercado terminated Atty. De Vera's services, offering P350,000.00 as attorney's fees and demanding an accounting and turnover of funds. Atty. De Vera refused, claiming entitlement to P2,254,217.00. Rosario P. Mercado filed disbarment proceedings against Atty. De Vera. The case was transferred to the Integrated Bar of the Philippines (IBP) and assigned to Commissioner Ernesto L. Pineda, later reassigned to Commissioner Plaridel C. Jose. Commissioner Jose dismissed the case against Judge Bandalan for lack of jurisdiction and recommended dismissal of the disbarment case against Atty. De Vera without prejudice to ventilating the issue of attorney's fees. The IBP Board of Governors adopted Resolution No. X-93-41 recommending Atty. De Vera's suspension for one year. Atty. De Vera filed Administrative Case No. 4438 against IBP officers and Atty. Carmen Leonor P. Mercado-Alcantara, alleging irregularities in the adoption of the resolution. The Petition: Administrative Case No. 3066 is the disbarment case against Atty. De Vera and Judge Bandalan. Administrative Case No. 4438 is Atty. De Vera's petition against IBP officers and Atty. Alcantara for alleged grave misconduct and malpractice.
Issue(s)
Whether the IBP Board of Governors committed serious irregularities in adopting Resolution No. X-93-41. Whether Atty. Eduardo C. De Vera is guilty of misconduct warranting disbarment or suspension.
Ruling
In Administrative Case No. 3066, the Resolution No. X-93-41 of the IBP Board of Governors is AFFIRMED with MODIFICATION. Atty. Eduardo C. De Vera is SUSPENDED from the practice of law for six (6) months and is DIRECTED to return to Rosario K. Mercado the amount in his possession in excess of P350,000.00, without prejudice to whatever judicial action he may take to recover his unsatisfied attorney's fees, if any. His suspension stands until he has satisfactorily shown to the Court his compliance therewith. Administrative Case No. 4438 is DISMISSED for lack of merit.
Ratio Decidendi
On the alleged irregularities in the adoption of Resolution No. X-93-41 (A.C. No. 4438): The Court found no serious irregularity in the adoption of Resolution No. X-93-41. The respondents adequately explained why the resolution could not have been accomplished on the same day of the meeting, as it was common practice for board resolutions to be signed on different dates by members of the Board of Governors. While some members signed after their term expired, the action attested to by the resolution was adopted during their tenure. The succeeding members of the Board of Governors affirmed that the previous Board had already rendered a decision, with only some members yet to affix their signatures. The inconsistencies in the minutes of the meeting did not convincingly establish a concerted effort to manipulate the outcome of the case against Atty. De Vera. The charge against Atty. Alcantara was unsubstantiated, and her motions for early resolution indicated a delay in the release of the resolution, not knowledge of its final outcome. On the disbarment/suspension of Atty. Eduardo C. De Vera (A.C. No. 3066): The Court affirmed the findings of the IBP Board of Governors regarding Atty. De Vera's conduct. While a lawyer is entitled to compensation and protection against clients who refuse to pay, he cannot unilaterally apply client's funds to satisfy claimed attorney's fees when there is a disagreement. The lawyer must file the necessary action or proper motion with the court to fix the amount of attorney's fees. Allowing a lawyer to unilaterally apply funds would violate the trust relationship and open the door to abuse. Atty. De Vera's actions in convincing the aging client to withdraw a large sum of money and keep it with him, instead of depositing it in banks, and his refusal to turn over funds in excess of P350,000.00, demonstrated infidelity in the custody of his client's funds. He was duty-bound to turn over and render a full accounting of what he received. His disagreement with the client entitled him to take proper legal steps, but not to take matters into his own hands. The Court found his actuations warranted disciplinary action, modifying the recommended suspension from one year to six months and directing the return of excess funds.
Main Doctrine
A lawyer is entitled to be compensated for professional services rendered and must be protected against clients who wrongly refuse to give him his just due. However, a lawyer cannot unilaterally apply client's funds to satisfy claimed attorney's fees when there is a disagreement; instead, the lawyer must file the necessary action or proper motion with the court to fix the amount of attorney's fees. Failure to do so violates the trust relationship and opens the door to possible abuse.