Unity Fishing vs. Atty. Macalino

Client (P) vs. Lawyer (D)
AC 4566	[T]

Summary: A lawyer misappropriated money from his client.

Rule of Law: Canon 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.

Facts: Atty. Danilo Macalino (D) was hired to represent Frabal Fishing and Ice Plant Corporation against Wheels Distributor, Inc. Frabal was eventually bought by Unity Fishing Development Corporation (P) during the pendency of the case.

Unity Fishing (P) was evicting Wheels Distributor from their property. Macalino (D), as counsel, advised the Unity Fishing (P) to severe all contractual relationship with Wheels Distributor and return their security deposit amounting to P50,000. Macalino (D) volunteered to take the check to Wheels Distributor himself.

Later, another lawyer was hired to replace Macalino (D) and the case of Unity Fishing (P) against Wheels Distributor was eventually settled. But Unity Fishing (P) was shocked to learn that Wheels Distributor never got the P50,000 security deposit.

After an investigation, Unity Fishing (P) discovered that the check was deposited to Macalino's (D) account and he was actually the one who withdrew the money.

Issues: Which provision of the Code of Ethics did Atty. Macalino violate?

Ruling: Atty. Macalion (D) violated Canon 16 of the Code of Ethics.

Canon 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.

Rule 16.1 - A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.2 - A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Rule 16.3 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court.