Cerdan v. Gomez

A.C. No. 9154 (March 19, 2012)

Atty. Carlo Gomez was suspended for a year for mishandling Aurora D. Cerdan's funds.

Facts:

The case arose from a complaint filed by Aurora D. Cerdan against Atty. Carlo Gomez before the Integrated Bar of the Philippines (IBP). Cerdan alleged that she and Benjamin Rufino, who was a widower, lived together as husband and wife and purchased several properties during their cohabitation. They maintained savings accounts at First Consolidated Bank (FCB) in Palawan, specifically at the Quezon and Narra branches. Following Rufino's death on December 28, 2004, Cerdan sought legal advice from Atty. Gomez regarding the properties left by Rufino and paid him attorney's fees amounting to P152,000.00, although only P100,000.00 was acknowledged in a receipt.

Cerdan claimed that she authorized Atty. Gomez through a Special Power of Attorney (SPA) to settle Rufino's savings account at FCB-Quezon branch. However, Atty. Gomez allegedly replaced the original agreement of a 50-50 sharing of the proceeds with a Compromise Agreement that awarded 60% to Rufino's heirs and only 40% to Cerdan. Furthermore, Atty. Gomez included the FCB-Narra Branch account in the agreement, despite the SPA only covering the Quezon branch account. Cerdan accused Atty. Gomez of taking her bank book for the Narra Branch account, which contained approximately P165,000.00, and failing to return it. She also alleged that he withdrew funds from her accounts and provided her with only P290,000.00, stating, "ITO NA LAHATANG PERA MO ATANG SA AKIN NAKUHA KO NA."

Additionally, Cerdan recounted a previous case in 2000 where Atty. Gomez represented her against a certain Romeo Necio, for which she paid him P15,000.00 in fees. She claimed that Atty. Gomez had not remitted the agreed amount of P12,000.00 from that case.

In response, Atty. Gomez admitted to providing legal services to Rufino but denied the allegations made by Cerdan. He claimed he was unaware of Cerdan's non-marital status with Rufino until after Rufino's death. Atty. Gomez asserted that he made efforts to locate Rufino's legitimate heirs and informed Cerdan of her potential lack of entitlement to Rufino's estate. He also denied any wrongdoing regarding the attorney's fees and the handling of the savings accounts.

The IBP required Atty. Gomez to file an answer to the complaint, and after a mandatory conference and submission of position papers, the case was submitted for resolution.

Legal Issues:

  1. Did Atty. Gomez exceed the authority granted to him by the Special Power of Attorney when he entered into the Compromise Agreement regarding the FCB accounts?
  2. Did Atty. Gomez violate his fiduciary duty to Cerdan by failing to account for the funds received and by unilaterally deducting his attorney's fees?
  3. What is the appropriate penalty for Atty. Gomez's alleged violations of the Code of Professional Responsibility?

Arguments:

  • Complainant's Arguments:

    • Cerdan argued that Atty. Gomez acted beyond the scope of the SPA by including the FCB-Narra Branch account in the Compromise Agreement and by agreeing to a distribution of proceeds that was not in line with their original agreement.
    • She contended that Atty. Gomez failed to return her bank book and did not account for the funds he withdrew from her accounts, resulting in a significant loss of her rightful share.
    • Cerdan maintained that Atty. Gomez's actions constituted a breach of his fiduciary duty as her attorney.

  • Respondent's Arguments:

    • Atty. Gomez contended that he was not aware of Cerdan's non-marital status with Rufino and that he acted in good faith in representing her interests.
    • He claimed that he negotiated the settlement with the legitimate heirs of Rufino and that the proceeds were properly turned over to Cerdan.
    • Atty. Gomez denied receiving the full amount of attorney's fees claimed by Cerdan and suggested that any discrepancies were due to his secretary's actions.

Court's Decision and Legal Reasoning:

The IBP found Atty. Gomez guilty of violating Canon 16 of the Code of Professional Responsibility, which mandates that a lawyer must hold in trust all moneys and properties of their client and account for all money or property collected or received for or from the client. The IBP concluded that Atty. Gomez exceeded his authority by entering into a Compromise Agreement regarding the FCB-Narra Branch account without proper authorization. Furthermore, he failed to account for the funds received from the Quezon Branch account and unilaterally deducted his attorney's fees without an agreement to do so.

The court emphasized the fiduciary nature of the lawyer-client relationship, which requires utmost good faith, loyalty, and candor. Atty. Gomez's actions were deemed to have eroded public confidence in the legal profession, and the court noted that the penalty for such violations typically ranges from suspension for six months to disbarment, depending on the severity of the misconduct.

Ultimately, the court upheld the IBP's recommendation and imposed a one-year suspension from the practice of law on Atty. Gomez, with a warning that any repetition of similar acts would be dealt with severely.

Significant Legal Principles Established:

  1. A lawyer must act within the authority granted by a client through a Special Power of Attorney and cannot unilaterally alter agreements without consent.
  2. The fiduciary duty of a lawyer requires full accountability for all funds received on behalf of a client, and any deductions for fees must be agreed upon in advance.
  3. Violations of the Code of Professional Responsibility can result in significant disciplinary actions, including suspension or disbarment, depending on the nature and severity of the misconduct.