Facts:
Complainant engaged the services of Atty. Valmores to file with the National Labor Relations Commission (NLRC) a claim for disability benefits against Agemar Manning Agency Inc. and its principal Sonnet Shipping Ltd.
LA rendered in favor of complainant ordering Agemar and Sonnet to pay. Agemar and Sonnet appealed. The NLRC set aside the decision of the LA and dismissed the case for lack of merit. Complainant elevated the case to the Court of Appeals and then to the SC, both ruled against him.
Believing that he was betrayed by his counsel, complainant filed the instant case for disbarment. Complainant alleged that respondent failed to perform his duties as counsel in facilitating the settlement of his case. He stated that Atty. Valmores delayed the settlement of the case and for failing to win the same. He accused Capt. Flores, the manager of Agemar of splitting the money they received from the shipping company and that the two received the money without the knowledge of the counsel of the company and instead of giving it to him, they divided the money.
In his defense, respondent contended that he accepted the case of complainant on a contingent basis, and that he completely and diligently represented complainant in the labor case.
The court referred the case to the IBP for investigation, report, and recommendation. The IBP Board of Governors resolved to adopt the recommendation of the Investigating Commissioner to dismiss the complaint for lack of merit.
The Investigating Commissioner pointed out that respondent cannot be blamed for failing to win or settle complainant's case, and that there is no evidence that respondent failed to advise complainant to settle the case.
Issue:
Whether or not Atty. Valmores failed to perform his duties as counsel.
Ruling: NO.
In this case, complainant, in essence, blames respondent for what happened to his claim for disability and accused respondent of dishonesty for allegedly taking the settlement money behind his back. His allegations based merely on assumptions and suspicions will not suffice because "allegation is not equivalent to proof." And, it is a basic rule in evidence that he who alleges must prove.
It must be stressed that the purpose of a disbarment proceeding is "to determine the fitness of a lawyer to continue acting as an officer of the court and as participant in the dispensation of justice." It is a procedure for the Court "to cleanse the ranks of the legal profession of its undesirable members in order to protect the public and the courts." Thus, it is not an alternative remedy for losing litigants.
There is no showing that he was negligent, or incompetent, or dishonest in the performance of his duties. Thus, he cannot be held responsible for failing to win or settle the case.
AS TO THE LENDING OF MONEY TO THE CLIENT:
However, notwithstanding the dismissal of the disbarment complaint, respondent still must be admonished for violating the Code of Professional Responsibility (CPR). Lending money to a client is a violation of Rule 16.04 of the CPR.
In this case, respondent shouldered all the litigation expenses and docket fees of complainant's labor case. Though this may be allowed under justifiable circumstances in order to protect the client's interest, jurisprudence requires that the advances should be subject to reimbursement. Here, there was no agreement.
Whether respondent was moved by compassion or whether he was just annoyed and wanted complainant to leave the law office is immaterial. Respondent's acts of advancing the necessary expense without proving the terms of reimbursement and lending money to complainant, are clear violations of Rule 16.04 of the CPR.
Let it be stressed that lending money to a client is prohibited because it creates a conflict-of-interest situation. lawyer who lends money to a client will certainly have an interest in the outcome of the case he or she is handling, which might lead him or her to put his or her interest above the interest of his or her client. This will prevent him or her from faithfully discharging his or her duty of undivided fidelity and loyalty to his or her client.
Thus, to avoid any suspicion of impropriety, lawyers should not lend money to their clients unless in the interest of justice, they have to advance necessary expenses for the legal matters they are handling for their clients. The advances, however, must be subject to reimbursement, the terms of which should be clearly provided.
Atty. Valmores is ADMONISHED for lending money to his client.