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.
Q. May a counsel unilaterally retain or appropriate funds of his client as his attorney’s lien?
A: No. A counsel has no right to retain or
appropriate unilaterally as lawyer’s lien any amount belonging to his client which may come into his possession. (Cabigao v. Rodrigo, August
9,1932)
Note: While this rule provides that the lawyer has the right to retain the funds of his client as may be necessary to satisfy his lawful fees and disbursements known as attorney’s lien and his lien to the same extent on all judgments and executions he has secured for his client called charging lien, he is still dutybound to render an accounting of his client’s funds and property which may come into his possession in the course of his professional employment In the application of attorney’s lien, a lawyer shall give notice to his client otherwise, the same might be construed as misappropriation which may subject him to disciplinary action. (Antiquiera,
2007)
Q. Marquez retained the professional service of Meneses to prosecute a claim against Ruth Igdanes and Delfin Igdanes. The oral agreement was that Marquez would pay a fee of P100.00 to Meneses, whether the case was won or lost. Thereafter, Marquez advanced from time to time to Meneses various sums as fees, which totalled P75.00. When decision was rendered by the court in favor of the Marquez, Igdanes was ordered to pay Marquez the claimed amount with legal interest from the filing of the complaint until fully paid, and P75.00 as attorneys fees.
Marquez’s brother informed her that the sheriff informed him that Meneses respondent had gotten all of the P75.00 as his fees. Marquez wrote to Meneses twice asking him to send her P50.00 and to keep P25.00 for himself, but Meneses refused to give her the P50.00 she was asking and contended that that was their agreement. Marquez’s contention, in brief, is that she had been overcharged by Meneses for as the agreed fee was P100.00, win or lose, and she had already paid P75.00 to Meneses, the latter simply had the right, at most, to keep P25.00 out of the P75.00 he had gotten from the sheriff. Should Atty. Meneses be held liable for not giving the money to his client?
A: Yes. It is well-settled that money collected by a lawyer in pursuance of a judgment in favor of his client is money held in trust and must be immediately turned over to the latter.Canon 11 of
the Canons of Professional Ethics, in force at the time material to this case, provides that the lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client. Money of the client or collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly and should not under any circumstances be commingled with his own or be used by him.
In this case, Meneses should have made an accounting with his client of the amount he received, deducted the balance of the attorneys fees due him, and turned over the rest of the amount to his client. As the Solicitor General observed, if Meneses was mindful of his ethics, he should at least have waited until the judgment debtor in Civil Case No. 82 had made further payments on the amount adjudged against them... By placing his personal interest above his clients cause, respondent clearly breached the trust reposed upon him. (Marquez v. Meneses,
Adm. Case No. 675, December 17, 1999)
Q: Fernandez engaged the services of Atty. Cabrera II to handle the cases of her associates in Baguio City. After taking hold of the records of the cases that Fernandez entrusted to him and after getting initially paid for the services he would render, Atty. Cabrera II suddenly disappeared and could no longer be located in his given address or in the addresses that Fernandez gathered.
Did Atty. Cabrera II violate the Code of Professional Responsibility when he accepted the records and money of the complainant and thereafter failed to render his services?
A: Yes. Acceptance of money from a client
establishes an attorney-client relationship and gives rise to the duty of fidelity to the client's cause. The canons of professional responsibility require that once an attorney agrees to handle a case, he should undertake the task with zeal, care, and utmost devotion.
Atty. Cabrera's action projects his appalling indifference to his client's cause and a brazen disregard of his duties as a lawyer. Not only did he fail to render service of any kind, he also absconded with the records of the cases with which he was entrusted. Then to top it all, he kept the money complainant paid to him. Such conduct is unbecoming of a member of the bar, for a lawyer's professional and personal conduct
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ACADEMICS CHAIR: LESTER JAY ALAN E.FLORES IIU
N I V E R S I T Y O FS
A N T OT
O M A Smust at all times be kept beyond reproach and above suspicion. The duty of a lawyer is to uphold the integrity and dignity of the legal profession at all times. This can only be done by faithfully performing the lawyer's duties to society, to the bar, to the courts and to his clients. (Fernandez v.
Atty. Cabrera II, A.C. No. 5623, Dec. 11, 2003) d. Borrowing or Lending
Q: Is a lawyer allowed to borrow money from his client?
A: GR: No.
XPN: Unless the client’s interests are fully protected by the nature of the case or by independent advice.
Note: While the lawyer may borrow money from his client, where the client’s interests are fully protected by the nature of the case he is handling for the client, or by independent advice from another lawyer, he should not abuse the client’s confidence by delaying payment. (Alindogan v. Geron, G.R.
Admin. Case No. 221, May 21, 1958).
Q: Is a lawyer allowed to lend money from his client?
A: GR: No.
XPN: when in the interest of justice, he has to
advance necessary expenses in a legal matter he is handling for the client.
Note: Prohibition from lending is intended to assure the lawyer’s independent professional judgment, for if the lawyer acquires a financial interest in the outcome of the case the free exercise of his judgment may be adversely affected. (Agpalo, 2004;
Comment of IBP Committee that drafted the Code, p.90)
Q: Atty Lozada was the retained counsel and legal adviser of Frias to which all documents and titles of properties of the latter were entrusted to. Atty Lozada persuaded Frias to sell her house, the former acting as broker since she was in need of money. Dra. San Diego, the prospective buyer then handed 2 million in cash
and 1 million in check and out of the 2 million, Atty. Lozada took 1 million as her commission without Frias’ consent. When Dra. San Diego backed out from the sale, Frias tried to recover from Atty. Lozada the title to the property and other documents but Atty. Lozada started avoiding her.
Dra. San Diego filed a case against Frias to return the 3 million she paid plus interest. Frias claimed that her failure to return the money was because of Atty. Lozada’s refusal to give back the 1 million she took as commission. A case was filed by Frias against Atty. Lozada but despite the favourable decision, respondent refused to return the money.
Atty. Lozada claimed that since she did not have enough money, Frias requested her to sell or mortgage the property and offered her a loan, commission and attorney’s fees on the basis of the selling price. He denied that Frias previously demanded the return of 1million until the civil case against her was instituted in which she expressed her willingness to pay the 900,000 plus agreed interest.
Did Atty. Lozada committed a violation of the Code of Professional Responsibility in asking for a loan from her client?
A: Yes. Her act of borrowing money from a client
was a violation of Canon 16.04 of the Code of Professional Responsibility.
A lawyer’s act of asking a client for a loan, as what respondent did, is very unethical. It comes within those acts considered as abuse of client’s confidence. The canon presumes that the client is disadvantaged by the lawyer’s ability to use all the legal manoeuverings to renege on her obligation. (Frias v. Lozada, A.C. NO. 6656,
December 13,2005)
Note: The principle behind Rule 16.04 is to prevent the lawyer from taking advantage of his influence over the client or to avoid acquiring a financial interest in the outcome of the case.
Not prohibited: advances for necessary expenses.
4. FIDELITY TO CLIENT’S CAUSE Rule 16.04, Canon 16, CPR - A lawyer shall
not borrow money from his client unless the client's interest are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he is handling for the client.