Title
Romo vs. Ferrer
Case
A.C. No. 12833
Decision Date
Nov 10, 2020
Atty. Ferrer failed to account for P295,000.00 entrusted by client Salvacion Romo, violating professional duties. Suspended for six months, ordered to repay with interest.

Case Digest (A.C. No. 12833)
Expanded Legal Reasoning Model

Facts:

  • Parties and Engagement
    • Salvacion C. Romo, the complainant, engaged Atty. Orheim T. Ferrer to represent her in a criminal case for violation of Batas Pambansa Bilang (BP) 22 against Amada Yu.
    • The engagement established a fiduciary relationship, whereby the lawyer was entrusted with funds and property pertaining to the case.
  • Receipt and Handling of Client Funds
    • Amada Yu settled the underlying case by paying a total of P375,000.00 to Atty. Ferrer on various dates:
      • P50,000.00 on March 6, 2006;
      • P50,000.00 on March 15, 2006;
      • P20,000.00 on June 6, 2006;
      • P50,000.00 on October 6, 2006;
      • P5,000.00 on November 16, 2006;
      • P10,000.00 on December 9, 2006;
      • P50,000.00 on December 18, 2006;
      • P10,000.00 on January 10, 2007;
      • P10,000.00 on February 19, 2007;
      • P120,000.00 on March 15, 2007.
    • Despite receiving the full sum, Atty. Ferrer remitted only P80,000.00 to Salvacion, leaving a balance of P295,000.00 unreturned.
  • Demand for Accounting and Subsequent Agreements
    • Salvacion demanded an accounting and the return of the remaining balance of P295,000.00.
    • A memorandum of agreement was executed wherein Atty. Ferrer acknowledged the outstanding obligation and promised to remit the total remaining amount on or before October 15, 2012, providing a land title as collateral.
    • Atty. Ferrer failed to comply with his undertakings, leading Salvacion to issue a final demand letter before filing an administrative complaint.
  • Evidence Presented and Counter Claims
    • Salvacion submitted various evidences, including the special power of attorney, acknowledgment receipts signed by Atty. Ferrer, the memorandum of agreement, and copies of the demand letters.
    • Atty. Ferrer countered with the claim that he had remitted P120,000.00, arguing:
      • Some of the payments from Amada had been given directly to Salvacion’s daughter.
      • The acknowledgment receipts produced by Salvacion were allegedly fabricated.
      • He was induced by Salvacion’s threat of a disbarment suit when executing the memorandum of agreement.
    • Atty. Ferrer, through his employees’ affidavits, sought to support his defense that a partial return had been made and that there was trust extended to his client’s daughter in managing part of these funds.
  • Administrative Proceedings and Commission Recommendations
    • In response to Salvacion’s administrative complaint (CBD Case No. 13-3782), the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) conducted an investigation.
    • The Commission found that:
      • Atty. Ferrer clearly received the total amount of P375,000.00, and by his own admission, failed to remit the balance of P295,000.00.
      • His defense regarding handing over funds to the complainant’s daughter was not substantiated by documentary evidence.
      • The invoice of acknowledgment receipts and the executed memorandum of agreement corroborated Salvacion’s claims.
    • Based on these findings, the Commission recommended a penalty of a two-year suspension from the practice of law, highlighting the abuse of client confidence and misappropriation of funds.
  • Court’s Adoption and Modification of Findings
    • The Court adopted the findings of the IBP, confirming that Atty. Ferrer had breached his fiduciary duty by failing to account for funds entrusted to him.
    • While the Court acknowledged the gravity of the misconduct, it modified the imposed penalty by suspending Atty. Ferrer for six months, taking into account:
      • This being his first offense.
      • His expressed willingness to return the misappropriated funds in installments.
    • The Court also ordered the immediate restitution of P295,000.00 with 6% interest from the date of demand (November 16, 2012).

Issues:

  • Whether a lawyer’s failure to render a proper accounting of client funds, upon demand, amounts to misappropriation and a breach of fiduciary duty.
    • The issue revolves around the absolute duty of a lawyer to account for all funds received in relation to client matters.
    • Whether the partial remittance (only P80,000.00 remitted) sufficiently met the legal and ethical obligations of the lawyer.
  • Whether Atty. Ferrer’s defense—that some funds were remitted to Salvacion’s daughter and that the receipts were fabricated—can negate the presumption of misappropriation.
    • The legitimacy of oral assertions versus tangible documentary evidence in establishing proper accounting.
    • The impact of alleged coercion (threat of disbarment) on the validity of the executed memorandum of agreement.
  • The appropriateness of the disciplinary sanction imposed, considering both prior disciplinary history and the remedial expressions of willingness to repay.
    • The issue of whether a six-month suspension sufficiently addresses the gravity of the ethical breach.
    • Balancing the objectives of discipline in protecting the integrity of the legal profession against the prospects for the lawyer’s reformation.
  • Whether the disciplinary measures and the requirement to refund with interest align with the principles of maintaining public trust in the legal profession.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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