Palencia Vs.

Linsangan

Facts:

Jerry Palencia was an overseas worker that was injured during work in M/T Panos G, where he
was treated in Singapore, then it was continued in the Philippines at Manila Doctors Hospital. During his
treatment at the hospital he was visited by two (2) paralegals of the respondent Atty. Pedro Linsangan
where they encourage the complainant to file a suit for indemnity against the latter’s employer, wherein
Palencia agreed. After which, Atty. Linsangan and Palencia executed an attorney-client contract and a
special power of attorney, for the engagement of legal services of the respondent and Gurbani & Co. and
agreed to pay them 35% of any recovery and settlement obtained for both. After the contract, the
respondent has recovered from the complainant’s employer US 60,000 as indemnity and US 20,000 under
their collective bargaining agreement. Not satisfied with the recovery, the respondent and Gurbani & Co.
also filed a tort case against M/T Panos G before the High Court of Singapore, together with the help of
Papadopoulos, Lycourgos & Co. and retired Justice Emilio Gancayo, the complainant has received US
90,000. Gurbani & Co. remitted the said amount to the respondent amounting to US 54, 608.40. Feeling
cheated by the respondent, the complainant contested the tendered amount of US 20, 756.05 that they
received from the respondent. Wherein the respondent filed 2 cases against the respondent, one is an
action for preliminary mandatory injunction and one is an action for accounting, remittance of amounts
of settlement of account. Both cases where dismissed and ruled in favor against the complainant.

The complainant filed a subject letter complaint with the Integrated Bar of the Philippines
Commission on Bar Discipline ( IBP-CBD),requesting that an investigation be conducted against the
respondent for disciplinary action be imposed for unethical acts committed namely:

(1) refusal to remit the amount of US 90,000, and only offering the amount of US 20,
756.05

2) depositing complainant’s money in the account;

and (3) engaging in an ambulance chasing by deploying their agent to hire respondents’
services while the former is still bedridden in the hospital.

The respondent answered the allegations made by the complainant that such amount is based
upon the services rendered by the Gurbani & Co., retired Justice Gancayo and including their own. IBP-
CBD in its Report and Recommendation ruled that the respondent has violated the canons of Code of
Professional Responsibility, and found out that the three (3) respondent connived with the case of the
complainant and recommending for their suspension in the practice of law for a period of one (1) year,
and to comply to the decision rendered in the 2 cases. The IBP Board of Governors adopted the
recommendation of IBP-CBP and modified the suspension of one (1) year to two (2) year suspension of
the three (3) respondents.

Issue:

WHETHER OR NOT the respondent has violated the canons of Code of Professional Responsibility.
Ruling:

Yes, the Supreme Court held that practice of law is a profession and not a business. Lawyers are to avoid
at all times any act that would tend to lessen the confidence of the public in the legal profession as a noble
calling. They are prohibited from soliciting cases for the purpose of gain, either personally or through paid
agents or brokers. Ambulance chasing or the solicitation of almost any kind by an attorney, personally or
through an agent , in order to gain employment is prohibited. In this case, there is sufficient evidence to
show that respondents violated these rules. The admission made by the paralegal of Atty. Lingasan that
they convinced the complainant to render the legal services of the former.

Furthermore, the relationship between a lawyer and its client is highly fiduciary. The relationship
holds a lawyer to a great degree of confidence and good faith by their client, especially in handling the
latter’s money. Money collected by a lawyer on a judgement ruled in favor of his client constitute trust
funds and must be immediately paid over the client. As he holds such funds as agent or trustee, his failure
to pay or to deliver the same to the client after demand constitutes conversion. Thus, whenever a lawyer
collects money as a result of favorable judgement, he must promptly report and account the money
collected to his client. In this case, this was not observed the respondent allegedly kept the money of the
complainant inside the firm’s vault for two (2) years until they were made aware of the disciplinary
complaint against them before by the IBP-CBD. Even with such explanation made by the respodents, it is
still improper for the lawyer to put the money of its client in his personal safe deposit vault. Funds
belonging to the client should be deposited in a separate trust account in a bank or trust company of
good repute for safekeeping. The respondent demonstrated that payment of their attorney’s fees is more
important than their fiduciary and faithful duty of accounting and returning what is rightfully due to their
client.