A.C. No. 4566 - Unity Fishing Development Corp. vs. Macalino

Unity Fishing Development Corporation filed a complaint for disbarment against Atty. Danilo G. Macalino for alleged violation of Canon 16 of the Code of Professional Responsibility.
The Supreme Court initially ordered respondent to file his comment on the complaint within ten (10) days, to which respondent repeatedly sought extensions.

On July 26, 1996, he filed a motion for a 30‑day extension, which was granted.
Subsequent motions for additional extensions (15 days on August 26, 1996; another on September 19, 1996) were also granted.

Despite these granted motions, respondent ultimately failed to file any comment or answer.
After a Motion to Conduct Further Proceedings filed by the complainant, the case was referred to the Integrated Bar of the Philippines (IBP) for investigation by the Commission on Bar Discipline, with Atty. Cesar R. Dulay designated as the investigating commissioner.

Frabal Fishing and Ice Plant Corporation, the original owner of a parcel of land leased to Wheels Distributors, Inc., became involved in a dispute regarding the lease contract.
Frabal hired respondent to represent its interests in the ensuing lawsuit over the lease dispute.
Frabal was later merged and absorbed by the petitioner (Unity Fishing Development Corporation), with all legal claims and assets, including pending litigation and contractual relations, transferred to the petitioner.
Acting as legal counsel for the petitioner, respondent advised:

Terminating the lease relationship with Wheels Distributors.
Returning the guarantee deposit of P50,000.00 to Wheels as a prerequisite to evicting the latter from the property.

Pursuant to respondent’s advice, petitioner prepared Metrobank Check No. MB350288 in the amount of P50,000.00.
Respondent arranged for his representative to collect the check from the petitioner’s office, as evidenced by the signing of a check voucher.
Respondent represented that the check was delivered to Wheels Distributors, Inc.
Later, petitioner discovered inconsistencies:

Wheels Distributors never received the guarantee deposit.
Upon checking, it was found that the Metrobank check bore a rubber stamp indicating it was deposited at the United Savings Bank (now UCPB Savings Bank), into an account maintained by respondent.
This discovery led petitioner to initiate a separate civil case against both respondent and the bank for misappropriation of funds.

Documentary evidence (the check, deposit slip, and vouchers) and testimonies corroborated that:

The check, meant for Wheels, was deposited and credited to respondent’s personal bank account (Account No. CA-483-3).
A letter from petitioner dated May 19, 1994, acknowledged that Wheels never received the funds while the check was nonetheless endorsed and encashed.

Respondent failed either to return the funds or to provide any valid explanation for the misappropriation.
His repeated failure to file the required answer and respond to the correspondence was interpreted as a tacit admission of guilt and a demonstration of gross neglect of his professional responsibilities.

The investigating commissioner, after reviewing the facts and evidence, recommended:

Suspension from the practice of law for two (2) years.
Ordering respondent to account for and return the P50,000.00 to the complainant.
Warning that any repetition of such offense would merit a more severe penalty.

Whether Atty. Danilo G. Macalino violated Canon 16 of the Code of Professional Responsibility by misappropriating client funds.
Whether his repeated failure to file the required answer or comment, despite numerous extensions and clear directives, constitutes a tacit admission of guilt and gross neglect of his professional duties.
Whether the disciplinary action—suspension from the practice of law and the order to return the misappropriated funds—is warranted given the evidence and the applicable ethical standards.