SECOND DIVISION
[A.C. No. 11297. August 31, 2016.]
[Formerly CBD Case No. 10-2721]
VIRGILIO G. LIWANAG, petitioner, vs. ATTY. ONOFRE G. GARLITOS, JR., respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 31 August 2016 which reads as follows:
"A.C. No. 11297 [Formerly CBD Case No. 10-2721]: VIRGILIO G. LIWANAG v. ATTY. ONOFRE G. GARLITOS, JR.
We sustain the Integrated Bar of the Philippines Board of Governors' Resolution No. XXI-2015-422. 1 We impose upon respondent Atty. Onofre G. Garlitos, Jr. the penalty of one (1)-year suspension from the practice of law. He is further required to return to complainant Virgilio G. Liwanag the amount of P140,000.00.
In the Complaint-Affidavit 2 filed before the Integrated Bar of the Philippines, complainant sought the disbarment of respondent.
Complainant engaged the services of respondent in the settlement of the estate of his mother, Catalina Liwanag. Complainant and his five (5) other siblings agreed to the apportionment of a house and lot owned by Catalina in Quezon City. 3 Three (3) of complainant's siblings agreed to waive their share in favor of complainant and his two (2) other siblings, Concepcion L. Harkins and Lualhati L. Maravilla. 4
Respondent was tasked with effecting the agreed partition. 5 He was successful in securing a reconstituted title over the property. 6 However, to effect the transfer to complainant and his two (2) other siblings, the estate taxes on Catalina Liwanag's estate had to be paid and a Certificate Authorizing Registration obtained from the Bureau of Internal Revenue. 7
Complainant claims that to facilitate the payment of estate taxes, respondent asked for P140,000.00 from him. 8 He delivered this amount in two (2) tranches: first, for P135,000.00; and second, for the remainder of P5,000.00. 9 Complainant adduced a letter of receipt signed by respondent to attest to his delivery and respondent's acceptance of P140,000.00. 10
Respondent allegedly committed to have the Certificate Authorizing Registration released by May 31, 2010. 11 He failed to deliver on this promise. 12 Thus, complainant sent a demand letter on July 1, 2010 for respondent to return the money. 13
As respondent failed to comply, the Complaint-Affidavit was filed. 14
Respondent claims, in his defense, that he made the best effort in securing the Certificate Authorizing Registration. 15
He explains that the estate tax due on Catalina Liwanag's estate was initially assessed to be P360,000.00. 16 Complainant supposedly asked for ways of reducing this amount. 17 Thus, respondent got in touch with an officer of the Bureau of Internal Revenue for assistance. 18 He was supposedly informed that the estate taxes due could be reduced and that a determination was made in that the total cost to be incurred (inclusive of the estate tax itself, as well as fees for the professional services of an accountant and for securing other documents) was P140,000.00. 19
The need to comply with several documentary requirements supposedly delayed the release of the Certificate Authorizing Registration. Thus, he asked for complainant's acquiescence to an extension of up to the end of June 2010, rather than May 31, 2010, as he had originally undertaken. Complainant supposedly agreed. 20
Respondent claims that the release of the Certificate Authorizing Registration was forthcoming, if not for a commotion that complainant caused in the Bureau of Internal Revenue office while making his own inquiry. 21
Following proceedings in the Integrated Bar of the Philippines, Investigating Commissioner Mario V. Andres (Commissioner Andres) furnished the Report and Recommendation 22 dated April 27, 2015 recommending that respondent be suspended from the practice of law for one (1) year and required to return the sum of P140,000.00 to complainant. 23 CAIHTE
In its Resolution No. XXI-2015-422, 24 the Integrated Bar of the Philippines Board of Governors adopted Commissioner Andres' recommendations.
We sustain the findings and conclusions of the Integrated Bar of the Philippines.
Canon 16, Rule 16.01 of the Code of Professional Responsibility spells out a lawyer's duty to hold in trust all funds and property of a client, which may come to his or her possession:
CANON 16 — A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.
Rule 16.01 — A lawyer shall account for all money or property collected or received for or from the client.
Commissioner Andres correctly noted that, in Barcenas v. Alvero, 25 this Court emphasized that a lawyer is duty-bound to immediately return or deliver to a client the funds that he or she received from the client if he or she is unable to utilize those funds for the specific purpose for which he or she had received them:
When a lawyer receives money from a 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. And if he does not use the money for the intended purpose, the lawyer must immediately return the money to his client. 26
It is not disputed that respondent received from complainant the sum of P140,000.00. It is also settled that this amount was to be utilized for facilitating the release of a Certificate Authorizing Registration from the Bureau of Internal Revenue by answering for such expenses as the estate tax due on Catalina Liwanag's estate. From all indications, respondent has yet to deliver on his undertaking to obtain such a Certificate. Failing in this, he is also still in possession of the P140,000.00 delivered to him by complainant.
Complainant has suggested that respondent acted fraudulently in inducing him to deliver the P140,000.00. It is unclear, as the Integrated Bar of the Philippines correctly notes, if respondent was animated by the sole and specific purpose of defrauding complainant. At the very least, a doubt may be indulged in respondent's favor that he at least somewhat acted in pursuit of the purposes for which his services were engaged. After all, he delivered on the initial stage of securing a reconstituted title over the lot, which was to be transferred to complainant and his two (2) siblings.
What cannot be disputed is how respondent's continuing possession of this amount is no longer proper. By respondent's own admission, at some point, it became evident — whether because of the commotion supposedly caused by complainant at the Bureau of Internal Revenue office or for some other reason — that he could no longer deliver on his undertaking to secure a Certificate Authorizing Registration. In accordance with the standard set in Barcenas, as soon as this became evident, he should have surrendered the P140,000.00 to complainant.
Although perhaps not acting out of an entirely fraudulent design, respondent was still remiss of his duties under Canon 16 of the Code of Professional Responsibility. For this, he must be penalized.
It is proper, in these proceedings, to require respondent to restitute complainant for the amount delivered to him.
Luna v. Galarrita27 explained the parameters for ordering restitution in the course of disciplinary proceedings:
In Ronquillo v. Atty. Cezar, the parties entered a Deed of Assignment after which respondent received P937,500.00 from complainant as partial payment for the townhouse and lot. However, respondent did not turn over this amount to developer Crown Asia, and no copy of the Contract to Sell was given to complainant. This court suspended Atty. Cezar from the practice of law for three (3) years, but did not grant complainant's prayer for the return of the P937,500.00. DETACa
Ronquillo held that "[d]isciplinary proceedings against lawyers do not involve a trial of an action, but rather investigations by the court into the conduct of one of its officers." Thus, disciplinary proceedings are limited to a determination of "whether or not the attorney is still fit to be allowed to continue as a member of the Bar."
Later jurisprudence clarified that this rule excluding civil liability determination from disciplinary proceedings "remains applicable only to claimed liabilities which are purely civil in nature — for instance, when the claim involves moneys received by the lawyer from his client in a transaction separate and distinct [from] and not intrinsically linked to his professional engagement." This court has thus ordered in administrative proceedings the return of amounts representing legal fees.
This court has also ordered restitution as concomitant relief in administrative proceedings when respondent's civil liability was already established:
Although the Court renders this decision in an administrative proceeding primarily to exact the ethical responsibility on a member of the Philippine Bar, the Court's silence about the respondent lawyer's legal obligation to restitute the complainant will be both unfair and inequitable. No victim of gross ethical misconduct concerning the client's funds or property should be required to still litigate in another proceeding what the administrative proceeding has already established as the respondent's liability. That has been the reason why the Court has required restitution of the amount involved as a concomitant relief in the cited cases of Mortera v. Pagatpatan, supra, Almendarez, Jr. v. Langit, supra, Small v. Banares, supra. 28 (Citations omitted)
The amount of P140,000.00 was delivered to respondent in the course of complainant's engagement of his professional services, or in the context of an attorney-client relationship. This is not an extraneous or otherwise purely civil matter. It is properly the business of these disciplinary proceedings.
WHEREFORE, respondent Atty. Onofre G. Garlitos, Jr. is SUSPENDED from the practice of law for one (1) year. He is WARNED that a repetition of the same or similar acts shall be dealt with more severely.
Respondent is ordered to restitute complainant Virgilio G. Liwanag the sum of P140,000.00.
Let a copy of this Resolution be attached to respondent's personal record as attorney. Let copies of this Resolution be likewise served on the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the country for their information and guidance. aDSIHc
SO ORDERED.(Brion, J., on leave.)"
Very truly yours,
MA. LOURDES C. PERFECTODivision Clerk of Court
By:
(SGD.) TERESITA AQUINO TUAZONDeputy Division Clerk of Court
Footnotes
1. Rollo, pp. 59-60.
2. Id. at 2-6.
3. Id. at 61, Report and Recommendation.
4. Id.
5. Id.
6. Id. at 62.
7. Id.
8. Id.
9. Id.
10. Id.
11. Id.
12. Id.
13. Id.
14. Id. at 63.
15. Id.
16. Id.
17. Id.
18. Id.
19. Id.
20. Id. at 64.
21. Id.
22. Id. at 61-70.
23. Id. at 70.
24. Id. at 59-60.
25. 633 Phil. 25 (2010) [Per J. Peralta, En Banc].
26. Id. at 33, citing Celaje v. Soriano, 561 Phil. 341, 347 (2007) [Per J. Austria, En Banc].
27. A.C. No. 10662, July 7, 2015 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2015/july2015/10662.pdf> [Per J. Leonen, En Banc].
28. Id. at 13-14.