The Supreme Court disbarred Attorney Leovigildo H. Mijares III for misappropriating funds entrusted to him by Arellano University, Inc. for land titling. The Court held that Mijares violated the Code of Professional Responsibility by failing to account for the P500,000.00 and engaging in dishonest conduct. This case reinforces the stringent ethical obligations lawyers must uphold, especially regarding client funds, and underscores that engaging in bribery is grounds for the most severe disciplinary action.

Dubious Dealings: When ‘Facilitation Fees’ Lead to Disbarment

Arellano University hired Atty. Mijares to secure a land title and provided him with P500,000 for “facilitation and processing.” After reporting partial completion, Mijares failed to produce promised documentation, prompting the University to demand the return of the funds and terminate his services. Mijares alleged the money was given to an MMDA Undersecretary as a bribe, with the University’s knowledge, for favorable endorsement, a claim the University vehemently denied.

This case hinges on Section 27, Rule 138 of the Revised Rules of Court, which allows for the disbarment or suspension of lawyers in cases of deceit, malpractice, or gross misconduct. The Supreme Court’s decision centered on Mijares’s failure to properly manage and account for the money given to him by his client. A key tenet of the legal profession is the **fiduciary duty** a lawyer owes to their client. This duty requires lawyers to manage client funds with utmost care, segregating them from their own and using them only for the intended purpose.

Here, Mijares was entrusted with funds specifically designated for expenses related to the titling of the property. His failure to provide a clear accounting, coupled with allegations of bribery, led the Court to conclude that he had breached his fiduciary duty. The court noted that:

Every lawyer has the responsibility to protect and advance the interests of his client such that he must promptly account for whatever money or property his client may have entrusted to him. As a mere trustee of said money or property, he must hold them separate from that of his own and make sure that they are used for their intended purpose. If not used, he must return the money or property immediately to his client upon demand, otherwise the lawyer shall be presumed to have misappropriated the same in violation of the trust reposed on him.

This statement underscores the high standard of conduct expected of lawyers when handling client funds. Mijares’s defense rested on the claim that he had given the money to a government official as a bribe, allegedly with the University’s knowledge. However, the Court found this defense unpersuasive, especially given Mijares’s failure to present evidence or testify in his own defense. Furthermore, the admission of bribery itself constituted a serious ethical violation.

Consider also the pertinent provisions from the Code of Professional Responsibility that Atty. Mijares violated, cited in the Court’s final ruling:

• Rules 1.01 and 1.02 of Canon 1 – prohibits a lawyer from engaging in unlawful, dishonest, immoral or deceitful conduct.
• Canon 15, Rule 15.05 – A lawyer when advising a client shall give a candid opinion on the merits and demerits of a client’s case and shall not exaggerate the probability of success.
• Canon 16, Rules 16.01 and 16.03 – A lawyer shall account for all money or property collected or received for or from the client. A lawyer shall deliver the funds of property of his client when due or upon demand.
• Canon 18, Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.

Even if the funds were used as described, the court highlighted a critical point: such use is itself a violation. It rejected the argument that the funds constituted a legitimate “facilitation fee,” recognizing this as a euphemism for bribery. This distinction is vital because it clarifies that attorneys cannot shield themselves by claiming ignorance or tacit consent from the client if actions skirt basic ethics and the law.

The case emphasizes not only ethical expectations but also underscores the lack of legal recourse in scenarios of bribery. By openly consenting, even subtly, to bribe attempts to secure a deal (even land titling), parties cannot later expect legal redress to recover “lost” investments after the fact. It exposes and discourages those strategies and underscores their inherent risk.

Here’s a table illustrating the breakdown of the arguments and the Court’s assessment:

Mijares’ Argument	University’s Argument	Court’s Assessment
Funds given to Lacuna for facilitation with University’s conformity.	No authorization given for bribery; funds for legitimate processing.	Defense unpersuasive; bribery admission itself is a violation.
University was aware and agreed to the bribery attempt.	The firm was actively seeking a better title for its assets.	Lack of accounting, failure to act transparently condemns argument.
Lack of fault because of Lacuna not endorsing properly	Atty. refused to return the money despite a clear mandate.	Attorneys shoulder risks by acting immorally

FAQs

What was the key issue in this case?	The primary issue was whether Atty. Mijares misappropriated funds given to him by Arellano University for land titling and whether he violated the Code of Professional Responsibility. The Court ruled that he had indeed violated the Code and acted unethically.
Why was Atty. Mijares disbarred instead of suspended?	The Court found that his admission of bribery, coupled with his failure to account for the funds, constituted grave misconduct deserving of the ultimate penalty of disbarment. This decision reflected a judgment that trust between lawyer and client had broken irrevocably.
What is a lawyer’s fiduciary duty to a client?	A lawyer’s fiduciary duty requires them to act in the best interests of their client, manage client funds with utmost care, and avoid conflicts of interest. In cases of misdealings, transparency is valued to ensure alignment.
What does “facilitation fee” mean in this context?	In this case, “facilitation fee” was considered a euphemism for a bribe, an illegal payment intended to influence a government official. A strong distinction was established between an unlawful deal, and a legal expense.
Can a client recover funds used for bribery?	The Court refused to order the return of the funds, stating that it would not convert a disbarment proceeding into a remedy for recovering bribe money lost in a bad deal. One reason for this decision includes setting the president for future transgressions, and preventing future behavior.
What happens to the information forwarded to the Ombudsman?	The Office of the Ombudsman will review the sworn statement of Atty. Mijares to determine if there is sufficient evidence to warrant a criminal investigation and, if warranted, prosecution. All available evidence must be clear and present to pursue the charges.
What are the implications for lawyers accepting funds for “facilitation”?	This case serves as a stern warning to lawyers against accepting funds for purposes that may be construed as bribery or corruption, no matter how these practices might be disguised. Any misrepresentation is harmful, and the lawyers and firms are encouraged to remain transparent.
What should a client do if a lawyer requests a “facilitation fee”?	A client should question the legitimacy of the fee, seek a detailed accounting of how the funds will be used, and consider seeking a second legal opinion if they are uncomfortable with the request. A lack of understanding should not equate to legal authorization.

This case establishes a clear precedent that lawyers will face severe consequences, including disbarment, for misappropriating client funds and engaging in corrupt practices. The decision underscores the importance of upholding the highest ethical standards within the legal profession to maintain public trust and integrity. This example acts to help clients receive only high caliber help and support, reducing opportunities for misdoing.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ARELLANO UNIVERSITY, INC. vs. ATTY. LEOVIGILDO H. MIJARES III, A.C. No. 8380, November 20, 2009