BY ATTY. JULIUS GREGORY B. DELGADO

MAMERTA C. LIZADA, ET AL. VS. ATTY. DEMOSTHENES S. TECSON, A.C. NO. 14203: APPLICATION OF SECTION 49, CANON III OF THE CODE OF PROFESSIONAL RESPONSIBILITY AND ACCOUNTABILITY (CPRA) ON THE LAWYER’S DUTY TO ACCOUNT FOR THEIR CLIENT’S PROPERTIES DURING AND AFTER THE LAWYER-CLIENT RELATIONSHIP

Petitioners Mamerta C. Lizada, Benito Cuizon, Abelardo Cuizon, and Enrique Cuizon (“Lizada, et al.”) are the legal heirs of the late Spouses Leoncio Cuizon and Mamerta Seno (“Spouses Cuizon”). Lizada, et al. alleged that Spouses Cuizon were the registered owners of several parcels of land located in Lapu-Lapu City, Cebu with a total area of 14,161.75 square meters. On January 28, 1981, the Export Processing Zone Authority (EPZA) sought the expropriation of said parcels of land for development as an export processing zone in Lapu-Lapu City. As such, Spouses Cuizon hired Atty. Tecson to represent them in the expropriation proceedings. 

On September 24, 2015, the Regional Trial Court (RTC) of Lapu-Lapu City, Cebu rendered its Judgment, finding the expropriation proper, and fixing the just compensation at Php2,500.00 per square meter, with legal interest of 12% per annum from January 28, 1981 until full payment. The computed amount of just compensation including accumulated interest is Php134,341,965.15, which amount was eventually paid by the Philippine Economic Zone Authority (PEZA) on December 23, 2015.

The check representing the total just compensation was received by Atty. Tecson who, in turn, remitted the amount of Php13,434.196.51 to each of the complainants, or a total of Php53,736,786.04. Notably, Lizada, et al. expected to receive Php26,868,03 each and were thus surprised when they received only half of the said amount/ The remaining Php13,434,196.51, which is equal to each individual share of Lizada, et al., was kept by Atty. Tecson as his attorney’s fees. With respect to the remaining Php67,170,982.57, Atty. Tecson simply told Lizada, et al. that the same will be allotted to former Department of Justice Secretary Leila De Lima in support of her senatorial bid.

For his defense, Atty. Tecson averred that the engagement of the PR man was with conformity of Lizada, et al. The Investigating Prosecutor recommended his Disbarment owing to his admission that he advised Lizada, et al. to hire a PR man and that he personally handed the supposed “share” or “facilitation fee” to the PR man. The Investigating Prosecutor also directed Atty. Tecson to return the amount of Php67,170,982.57 to Lizada, et al. with 6% interest per annum until fully paid. The Board of Governors adopted the findings of the Investigating Commissioner insofar as imposing the penalty of Disbarment but did not agree with the recommendation to return the unaccounted funds.

The Supreme Court, in a per curiam ruling, despite the case initiated prior to the effectivity of the Code of Professional Responsibility and Accountability (CPRA), applied the CPRA invoking its Transitory Provision which states that the provisions of the CPRA shall be applied to all pending and future cases, except to the extent that in the opinion of the Court, its retroactive application would not be feasible and would work injustice. 

The Supreme Court held that under Canon III of the CPRA, fidelity “pertains to a lawyer’s duty to uphold the Constitution and the laws of the land, to assist in the administration of justice as an officer of the court, and to advance or defend a client’s cause, with full devotion, genuine interest, and zeal in the pursuit of truth and justice.” The Court held that fidelity expected of a lawyer does not mean unbridled loyalty to their client’s cause and in advocating their client’s interests, a lawyer must always observe the law and legal processes. The Court held that a lawyer “must never give inappropriate or illegal advice or pursue an illicit course of action.” 

The Supreme Court held that Atty. Tecson miserably failed to live up to his duty to uphold the rule of law and to assist in the administration of justice. Instead of advising his clients to go through the regular process of execution, Atty. Tecson deliberately chose to cut short and undermine such legal process by advising his clients to bribe. The Court held that what is more shocking his Atty. Tecson’s unabashed admission of his role in the bribery. 

The Supreme Court also applied Section 49, Canon III of the CPRA which is the duty of a lawyer to account for their client’s properties during and after the lawyer-client relationship. The Court distinguished the old provision in Rule 16.01 of the former Code of Professional Responsibility which simply states that a lawyer must account for all money or property collected or received for or from a client, from that of the new provision under the CPRA which now clearly defines the nature and extent of this duty, both during the existence of the lawyer-client relationship and after its termination. 

The Court held that the lawyer’s duty to account during engagement commences immediately upon their receipt of the fund or property belonging to his client and this duty includes the following, to wit: (a) preparing an inventory for said fund or property; (b) using the same for the stated purpose; and (c) promptly returning the unused portion thereof to the client upon demand or upon the accomplishment of the stated purpose. The court held that when the lawyer claims to have spent or utilized the client’s money or property for the stated purpose, it is incumbent upon the lawyer to show proof thereof.

More importantly, applying the case of Dizon vs. Trinidad-Radoc, A.C. No. 13675 (July 11, 2023), wherein it was held that the lawyer’s failure to return said fund or property upon demand creates a presumption that the lawyer misappropriated the same for their own use to the prejudice and in violation of the trust reposed in them by the client, the Supreme Court held that since Lizada, et al. demanded from Atty. Tecson to return to them Php67,170,982.57, which represents the unremitted portion of their just compensation, the presumption that Atty. Tecson misappropriated the same for his benefit attaches. It is now incumbent upon Atty. Tecson to overcome such presumption by presenting evidence that he utilized the said amount for its intended purpose which he failed to do so. 

The Court also noted that Atty. Tecson did not present proof that Lizada, et al. “willingly agreed” to his proposal to engage the services of a PR man. The Court held that even if Atty. Tecson was able to present proof that Lizada, et al. agreed to such proposal, Atty. Tecson would still be held liable and will be asked to return the said amount as fidelity is not blind loyalty to client’s cause but rather faithfulness to the rule of law. A lawyer’s duty to account, which includes their duty to spend or use the client’s funds for its stated purpose, must necessarily align with their duty of fidelity. It is incumbent upon the lawyer to use their client’s funds only for a lawful purpose. 

The Supreme Court disbarred Atty. Tecson and directed him to return to Lizada, et al. Php67,170,982.57.