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MARITES E. FREEMAN v. ATTY. ZENAIDA P. REYES

FACTS:

The complainant, Marites E. Freeman, sought the assistance of Atty. Zenaida P. Reyes to secure visas and obtain death benefits and insurance claims due to her deceased husband. The respondent requested certain amounts for her legal services and the complainant agreed and paid. The respondent communicated with insurance companies in London and offered to personally attend to the matter, with the complainant agreeing to shoulder her travel expenses. Upon the respondent's return, she updated the complainant about the status of her claims.

Additionally, the complainant informed the respondent about her visa troubles and the respondent referred her to a travel consultant who could handle the visa arrangements for a fee. The respondent accompanied the complainant to the travel consultant and eventually, the complainant was able to secure a visa.

The respondent denied knowledge of alleged falsified documents and stated that a second Special Power of Attorney (SPA) was her basis for communicating with the insurance companies. The complainant accused the respondent of not informing her about the progress of her insurance claims and claimed that the respondent received a substantial amount of money in her personal bank account but failed to turn it over to the complainant.

The complainant also accused the respondent of engaging in criminal acts, while the respondent maintained that she acted in good faith.

ISSUES:

  1. Whether the respondent should be disbarred for gross dishonesty and appropriating the insurance proceeds intended for the complainant.

  2. Whether a disbarment proceeding is a disciplinary proceeding and not a criminal prosecution.

  3. Whether the respondent, as the complainant's lawyer, acted within the scope of her authority in pursuing the insurance claims.

  4. Whether the respondent violated the Code of Professional Responsibility in handling the complainant's case.

  5. Whether the dismissal of a criminal case for insufficiency of evidence precludes the continuance of a separate and independent administrative case for liability.

  6. Whether misappropriation of funds entrusted to a lawyer constitutes gross violation of professional ethics.

  7. Whether or not respondent Atty. Zenaida P. Reyes deceitfully arrogated the insurance proceeds that should rightfully belong to complainant Marites E. Freeman.

  8. Whether or not respondent should be disbarred from the practice of law.

RULING:

  1. Yes, the respondent should be disbarred. The Court agrees with the recommendation of the Investigating Commissioner and the IBP Board of Governors that the respondent be disbarred for gross dishonesty in appropriating the insurance proceeds of the complainant's deceased husband.

  2. Yes, a disbarment proceeding is a disciplinary proceeding and not a criminal prosecution. It is not intended to inflict punishment but is an investigation by the court into the conduct of one of its officers. Its primary objective is the public interest and the preservation of the purity of the legal profession.

  3. The Court found that the respondent did act within the scope of her authority as the complainant's lawyer in pursuing the insurance claims, based on the admission of the respondent herself as a lawyer that she received payment from the complainant, which established a lawyer-client relationship.

  4. The Court ruled that the respondent violated the Code of Professional Responsibility. The respondent failed to comply with Canon 16, specifically Rule 16.01 which requires a lawyer to account for all money or property collected or received for or from the client, and Rule 16.03 which requires a lawyer to deliver the funds and property of a client when due or upon demand. The respondent did not provide an accounting or inform the complainant of the actual expenses incurred. Additionally, the respondent misled the complainant into believing that she needed to go to London to assist in recovering the insurance proceeds and even advised the complainant to give "grease money" to the British Embassy personnel. These actions violated Rule 1.01 of Canon 1, which prohibits lawyers from engaging in unlawful, dishonest, immoral, or deceitful conduct.

  5. The dismissal of a criminal case for insufficiency of evidence does not preclude the continuance of a separate and independent administrative case for liability. The weight of evidence necessary to establish culpability in an administrative case is merely substantial evidence, unlike in criminal cases where guilt must be proven beyond reasonable doubt.

  6. Misappropriation of funds entrusted to a lawyer constitutes a gross violation of professional ethics. It is a breach of the attorney-client fiduciary relationship and impairs the public's confidence in the legal profession. Lawyers who misappropriate funds entrusted to them may be disbarred or suspended indefinitely from the practice of law.

  7. Yes, respondent Atty. Zenaida P. Reyes deceitfully arrogated the insurance proceeds that should rightfully belong to complainant Marites E. Freeman. This act constitutes gross misconduct and transgresses the norms of honesty and integrity required in the practice of law.

  8. Respondent should be disbarred from the practice of law.

PRINCIPLES:

  • The purpose of a disbarment proceeding is to safeguard the administration of justice and protect the court and the public from the misconduct of officers of the court.

  • A disbarment proceeding is a disciplinary proceeding and not a criminal prosecution. It is initiated by the court and its objective is to determine whether the attorney is still fit to be allowed the privileges of practicing law.

  • A lawyer is obligated to account for all money or property collected or received for or from the client. (Rule 16.01, Code of Professional Responsibility)

  • A lawyer must deliver the funds and property of a client when due or upon demand. (Rule 16.03, Code of Professional Responsibility)

  • Lawyers should not engage in unlawful, dishonest, immoral, or deceitful conduct. (Rule 1.01, Canon 1, Code of Professional Responsibility)

  • In administrative cases, only substantial evidence is required to establish culpability, not proof beyond reasonable doubt as in criminal cases.

  • The dismissal of a criminal case does not preclude the continuance of a separate and independent administrative case for liability.

  • The attorney-client relationship is highly fiduciary in nature and requires utmost good faith, loyalty, fidelity, and disinterestedness on the part of the attorney.

  • Lawyers who misappropriate funds entrusted to them are in violation of professional ethics and may be disbarred or suspended from the practice of law.

  • Lawyering is a profession with a primary duty to public service, not money.

  • The norms of honesty and integrity are required in the practice of law.

  • Deceitfully arrogating upon oneself the insurance proceeds that should rightfully belong to another is an act of gross misconduct.

  • It is within the power of the court to disbar a lawyer who has committed gross misconduct and violated the norms of honesty and integrity in the practice of law.