SC Disbars Lawyer for Obtaining Money from Client Without Rendering Legal Services, Appropriating Insurance Proceeds of Client's

Husband
Posted: November 24, 2011; By Arcie M. Sercado
The Supreme Court recently disbarred a lawyer for obtaining money from a client without rendering proper legal services, and appropriating the insurance proceeds of the clients husband. The decision is immediately executory. In a 21-page per curiam decision, the SC En Banc found respondent Atty. Zenaida P. Reyes guilty of gross misconduct, and ordered all courts be notified of her disbarment. Respondent Reyes was also ordered to turn over to complainant Marites E. Freeman the proceeds of her deceased husbands insurance policies remitted to the former by two insurance companies in London, United Kingdom, which is approximately equivalent to 700,000. In ruling for respondents disbarment, the Court ruled that, respondent's repeated reprehensible acts of employing chicanery and unbecoming conduct to conceal her web of lies, to the extent of milking complainant's finances dry, and deceitfully arrogating upon herself the insurance proceeds that should rightfully belong to complainant, in the guise of rendering legitimate legal services, clearly transgressed the norms of honesty and integrity required in the practice of law. The Court agreed with the finding of the Integrated Bar of the Philippines (IBP) Investigating Commissioner Milagros V. San Juan that complainant Freeman had sufficiently substantiated the charge of gross dishonesty against respondent for having appropriated the insurance proceeds of complainants deceased husband, and the recommendation of the IBP Board of Governors that respondent should be disbarred. Respondent Reyes claimed that she acted within the scope of her authority as counsel to represent the complainant in pursuing the insurance claims. However, the Court held that she should have never deviated from the benchmarks set by Canon 16 of the Code of Professional Responsibility (CPR) which mandates that a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Specifically, Rule 16.01 states that a lawyer shall account for all money or property collected or received for or from the client, and Rule 16.03 thereof requires that a lawyer shall deliver the funds and property of a client when due or upon demand, the Court noted. The Court added that when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for a particular purpose. The Court also said that if he does not use the money for the intended purpose, the lawyer must immediate return the money to his client. In the case at bar, the Court found that even if respondent admitted having received money amounting to 120,000 from the complainant, she did not render an accounting or apprise the complainant of the actual expenses incurred.

Further, the complainant gave Php50,000 to the respondent for the purpose of assisting her in claiming the insurance proceeds in London. However, the Court found that respondent's primary purpose in traveling to London was to attend the International Law Conference in Russell Square, London. It is appalling that respondent had the gall to take advantage of the benevolence of the complainant, then grieving for the loss of her husband, and mislead her into believing that she needed to go to London to assist in recovering the proceeds of the insurance policies, the Court held. The Court also found that worse, respondent even inculcated in the mind of the complainant that she had to adhere to the nefarious culture of giving grease money or lagay, in the total amount of Php43,000 to the British Embassy personnel, as if it was an ordinary occurrence in the normal course of conducting official business transactions, as a means to expedite the visa applications. The Court held that this runs afoul the dictum in Rule 1.01 of Canon 1 of the CPR which states that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. More importantly, the Court pointed out that apart from her bare denials that no remittance was made to her personal bank account, respondent never attempted to reconcile the discrepancy, or give a satisfactory explanation, as to why she failed to render an accounting, on the proceeds of the insurance policies that should rightfully belong to the complainant vis--vis the correspondence by the insurance companies based in London. The Court further found that the amounts of 10,489.57 and 471.06 (approximately 700,000 in all) were remitted to respondent through other means of international transactions, such as the International Moneymover, which explains why no direct remittance from the insurance companies in London could be traced to the personal bank account of respondent. In closing, the Court stressed that Lawyers who misappropriate the funds entrusted to them are in gross violation of professional ethics and are guilty of betrayal of public confidence in the legal profession. Those who are guilty of such infraction may be disbarred or suspended indefinitely from the practice of law. Indeed, lawyering is not a business. It is a profession in which duty to public service, not money, is the primary consideration. Voting for disbarment are Justices Antonio T. Carpio, Arturo D. Brion, Diosdado M. Peralta, Roberto A. Abad, Martin S. Villarama, Jr., Jose Portugal Perez, Jose Catral Mendoza, Maria Lourdes P. A. Sereno, Bienvenido L. Reyes, and Estela M. Perlas-Bernabe. Chief Justice Renato C. Corona, and Justices Presbitero J. Velasco, Jr. and Lucas P. Bersamin took no part. Justices Teresita J. Leonardo-De Castro and Mariano C. Del Castillo are on official leave. (AC No. 6246. Freeman v. Reyes, November 15, 2011)