G.R. No. 113003 - Yobido vs. Court of Appeals

On or about November 21, 1996, the complainants engaged the services of respondent to facilitate the transfer of the title of a property, originally registered under the name of Isabel Azcarraga Marcaida, into the complainants’ names.
The complainants provided respondent with two checks:

Despite repeated follow-ups by complainants, respondent failed to produce the property title.
Respondent sent several letters explaining the delay, including one dated May 8, 2000 promising to settle the title transfer, but ultimately reneged on this promise.
As a consequence of the delays, complainants were forced to secure a loan from Philippine American Life and General Insurance Company to complete the transfer of title.

Respondent refused to return the ₱68,250.00 intended for the transfer taxes even after complainants issued a certificate to file action and sent a letter demanding the refund.
The failure to return the funds and the repeated assurances without delivery of the title raised issues regarding respondent’s duty to hold and account for client funds under the Code of Professional Responsibility.

Respondent contended that the complainants were responsible for delays because they failed to furnish him with several important documents (e.g., original deed of extrajudicial petition, affidavit of publication, and a barangay certificate).
He argued that the modest professional fee of ₱13,800.00 was justified by the extensive services rendered, which included negotiating with sellers, processing requirements at regional courts and the Register of Deeds, and preparing notarized documents.
Additionally, respondent claimed a valid attorney’s retaining lien based on alleged outstanding receivables from several cases in which he represented the complainants.

The complaint for disbarment was referred to the Integrated Bar of the Philippines (IBP) for investigation, with the matter being escalated to the IBP Commission on Bar Discipline.
Both parties were summoned to a mandatory conference and required to submit their respective position papers.
Respondent failed to submit his position paper, and on July 8, 2008, the Investigating Commissioner issued findings that respondent had violated Canon 16, specifically Rules 16.01 and 16.03 of the Code of Professional Responsibility.
The Investigating Commissioner noted that the checks provided by the complainants were encashed despite respondent’s failure to facilitate the transfer of the title, thereby causing the complainants additional financial burden.

In Notice of Resolution No. XVIII-2008-399 dated August 14, 2008, the IBP Board of Governors adopted, with modifications, the Investigating Commissioner’s report and recommended disciplinary action.
The resolution imposed a disciplinary sanction whereby respondent was suspended from the practice of law for three (3) months and was ordered to return ₱68,250.00 to the complainants within thirty days of receiving notice.
Respondent filed a motion for reconsideration on November 14, 2008, which was ultimately denied by the IBP Board in Resolution No. XX-2013-839 dated June 22, 2013.

In a subsequent manifestation and motion (October 25, 2013), respondent requested a formal hearing to exercise his right to confront and cross-examine his accusers; however, this request was denied in the resolution dated September 22, 2014.
Ultimately, the court adopted the IBP’s findings, reaffirming that respondent had violated his fiduciary duty by failing to hold in trust and properly account for the client funds, and affirmed the sanction of suspension along with the order to refund the funds with accrued interest.

Whether Atty. Isagani A. Mendoza violated his fiduciary duty under Canon 16 of the Code of Professional Responsibility by:

Failing to hold in trust all moneys and properties received from the clients.
Neglecting to account for all funds collected or received for or from the clients.
Failing to deliver client funds upon demand or when due.

Whether the assertion of a valid attorney’s retaining lien by respondent is legally tenable:

Whether all necessary elements for a valid retaining lien (lawyer-client relationship, lawful possession of client’s funds and documents, and existence of an unsatisfied claim for fees) were satisfied.
Whether respondent’s retention of client funds can be justified in light of the alleged unsatisfied fees.

Whether the delays in the processing of the title transfer and respondent’s purported justifications (i.e., complainants’ failure to furnish certain documents) sufficiently mitigate or excuse the breach of fiduciary duty.

Whether the administrative sanctions—particularly the three-month suspension and the order to refund the client funds with interest—appropriately address the ethical violations committed by respondent.