A.C. No.

10438 September 23, 2014

CF SHARP CREW MANAGEMENT INCORPORATED, Complainant,

vs.
NICOLAS C. TORRES, Respondent.

DECISION

PER CURIAM:

For the Court's resolution is the Complaint1 dated October 30, 2008 filed by complainant
CF Sharp Crew Management Incorporated (complainant) against respondent Nicolas C.
Torres (respondent), charging him with violating the Code of Professional Responsibility
(CPR).

The Facts

Complainant is a corporation duly organized and existing under Philippine laws

engaged in overseas maritime employment.2 It hired respondent, a medical doctor and
a lawyer by profession, as its Legal and Claims Manager who was tasked, inter alia, to
serve as its legal counsel and to oversee the administration and management of legal
cases and medicalrelated claims instituted by seafarers against complainant’s various
principals. Among the cases respondent handled in his capacity as Legal and Claims
Manager were the claims of seafarers Bernardo R. Mangi (Mangi), Rodelio J. Sampani
(Sampani), Joseph C. Delgado (Delgado), and Edmundo M. Chua (Chua).3

In its administrative complaint, it was alleged that per respondent’s request, complainant
issued checks in the amounts of ₱524,000.00, ₱652,013.20, ₱145,650.00, ₱97,100.00,
and ₱296,808.40 as settlement of the respective claims of Mangi, Sampani, Delgado,
and Chua.4 However, complainant later discovered that, save for the check in the
amount of 145,650.00 issued to Delgado, respondent never gave the checks to the
seafarers and instead, had them deposited at International Exchange Bank, Banawe,
Quezon City Branch, under Account No. 003-10-06902-1.5 With respect to Sampani,
complainant also discovered that he only received the amounts of ₱216,936.00 and
₱8,303.00 or a total of ₱225,239.00 out of the requested amount of ₱652,013.20,
through checks not issued by complainant.6

On October 30, 2008, the Integrated Bar of the Philippines (IBP) Commission on Bar
Discipline directly received the instant complaint and on even date, issued an
Order7 requiring respondent to file an answer, but the latter failed to do so. Neither did
respondent appear in the mandatory conference scheduled on March 20, 2009 nor did
he file his position paper.8

The IBP’s Report and Recommendation

In a Report and Recommendation9 dated August 1, 2009, the IBP Investigating
Commissioner found respondent administratively liable for violating the CPR, and
accordingly recommended that he be meted the penalty of suspension from the practice
of law for one (1) year.10

The Investigating Commissioner found that respondent had indeed requested and was
issued checks as settlement of the respective claims of Mangi, Sampani, Delgado, and
Chua onthe pretense that the requested amounts represented what was lawfully due
them.11 However, instead of giving the said checks to the named seafarers, he
deposited the same at the International Exchange Bank, Banawe,Quezon City Branch,
under Account No. 003-10-06902-1,12 except for the check in the amount of 145,650.00
issued to Delgado.13

Meanwhile, respondent belatedly filed his Verified Answer (With Motion to Re-Open
Investigation)14 on March 24, 2010. He explained that he was not able to timely file an
answer because complainant supplied a wrong address to the IBP and filed non-
bailable criminal cases against him which caused his detention in a regular prison cell
and, thus, his inability to comply with the IBP’s directives.15

On the merits of the complaint,respondent maintained that the seafarers’ claims had
long been settled and that the release documents signed by the named seafarers were
already inactual custody and possession of the complainant.16 He further contended that
he only signed the dorsal portions of the checks as a form of guaranty of their
genuineness17 and that he could not have encashed them as they wereall payable to a
particular payee.18 Lastly, respondent claimed that when he resigned in August 2008,
complainant forced him to sign promissory notes to reimburse certain amounts which
had not been accounted for by the latter in exchange for his clearance documents.19 But
before he was able to settle the promissory notes, he was already arrested in
connection with the criminal cases filed by complainant against him.20

In a Resolution21 dated December 29, 2012, the IBP Board of Governors unanimously
adopted and approved the aforesaid report and recommendation with modification,
increasing the recommended period of suspension from the practice of law to two (2)
years, and ordering respondent to return the full amount of money he received from
complainant which is legally due to the seafarers, with legal interest, within thirty (30)
days from receipt of notice.

Aggrieved, respondent filed a Motion for Reconsideration22 on April 22, 2013 which was,
however, denied in a Resolution23 dated March 8, 2014.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held
administratively liable for violating the CPR.

The Court’s Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP in
its report and recommendation, except as to: (a) the recommended penalty to be
imposed upon respondent; and (b) the monetary award in favor of the complainant.

It is fundamental that the relationship between a lawyer and his client is highly fiduciary
and ascribes to a lawyer a great degree of fidelity and good faith.24 The highly fiduciary
nature of this relationship imposes upon the lawyer the duty to account for the money or
property collected or received for or from his client.25 This is the standard laid down by
Rules 16.01 and 16.03, Canon 16 of the CPR, which read:

CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES

OF HIS CLIENTTHAT 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.

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or
upon demand. x x x.

In the foregoing light, it has been heldthat a lawyer’s failure to return upon demand the
funds held by him on behalf of his client gives rise to the presumption that he has
appropriated the same for his own use in violation of the trust reposed in him by his
client. Such act is a gross violation of general morality as well as of professional
ethics.26

In this case, the IBP Investigating Commissioner correctly found that complainant had
duly proven its charges against respondent. In particular, complainant had exposed
respondent’s modus operandi of repeatedly requesting the issuance of checks
purportedly for the purpose of settling seafarers’ claims against the complainant’s
various principals, only to have such checks (except for the check inthe amount of
145,650.00 issued to Delgado) deposited to an unauthorized bank account, particularly
International Exchange Bank, Banawe,Quezon City Branch, under Account No. 003-10-
06902-1. It is well-settled 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. And if he does not use the money for the
intended purpose, the lawyer must immediately return the money to his client."27 This,
respondent failed to do.

Clearly, respondent’s acts of misappropriation constitute dishonesty, abuse of trust and

confidence reposedin him by the complainant, and betrayal of his client’s interests
which he is duty-bound to protect.28 They are contrary to the mandate of Rule 1.01,
Canon 1 of the CPR which provides that "[a] lawyer shall not engage in unlawful,
dishonest, immoral, or deceitful conduct." Such malfeasance is not only unacceptable,
disgraceful, and dishonorable to the legal profession; it also reveals a basic moral flaw
that makes him unfit to practice law.29
Anent the proper penalty for respondent’s acts, the Court deems it proper to modify the
penalty recommended by the IBP.1âwphi1 Jurisprudence provides that in similar cases
where lawyers misappropriated their clients’ money, the Court imposed upon them the
ultimate penalty of disbarment from the practice of law. In Arellano University, Inc. v.
Mijares III,30 the Court disbarred the lawyer for misappropriating his client’s money
intended for securing a certificate of title on the latter’s behalf. Similarly, in Freeman v.
Reyes,31 the same penalty was imposed upon the lawyer who misappropriated the
insurance proceeds of her client’s deceased husband.

As already discussed, respondent's conduct of misappropriating complainant's money

has made him unfit to remain in the legal profession. He has definitely fallen below the
moral bar when he engaged in deceitful, dishonest, unlawful, and grossly immoral
acts.32 As a member of the Bar, he is expected at all times to uphold the integrity and
dignity of the legal profession and refrain from any act or omission which might lessen
the trust and confidence reposed in him by the public in the fidelity, honesty, and
integrity of the legal profession.33 Membership in the legal profession is a privilege, and
whenever it is made to appear that an attorney is no longer worthy of the trust and
confidence of his clients and the public, it becomes not only the right but also the duty of
the Court to withdraw the same,34 as in this case. In view of the foregoing, respondent
deserves the ultimate penalty of disbarment from the practice of law.

Likewise, the Court cannot concur with the IBP's recommendation regarding the return
of the settlement money respondent received from complainant, considering, among
others, that it was not specifically prayed for in the latter's administrative complaint and
that the civil liability of respondent therefor may already be the subject of existing cases
involving the same parties. WHEREFORE, respondent Nicolas C. Torres is found guilty
of violating Rule 1.01, Canon 1 and Rules 16.01 and 16.03, Canon 16 of the Code of
Professional Responsibility. Accordingly, he is hereby DISBARRED from the practice of
law and his name ordered STRICKEN OFF from the roll of attorneys.

Let a copy of this Decision be attached to respondent's record in this Court as attorney.
Further, let copies of this Decision be furnished the Integrated Bar of the Philippines and
the Office of the Court Administrator, which is directed to circulate them to all the courts
in the country for their information and guidance.

SO ORDERED.