Client Money and Bouncing Checks: A Lawyer’s Fiduciary Duty After Bernasconi v. Demaisip

The Supreme Court’s 2021 decision in Bernasconi v. Demaisip (A.C. No. 11477) serves as a firm reminder that lawyers who mishandle client funds face severe professional consequences—even if the client later withdraws the complaint. The case underscores two non-negotiable duties: accounting for every peso received from a client and never issuing worthless checks.

The Facts of the Case

In 2008, a client engaged Atty. Belleza Demaisip to handle the transfer of ownership of a parcel of land. The lawyer received ₱2,960,000.00 for the transfer costs. However, she failed to deliver any transfer certificate of title.

When the client demanded a refund, Atty. Demaisip submitted a liquidation of expenses amounting to ₱512,000.00 and returned ₱810,000.00. She could not account for the remaining ₱1,638,000.00. She then issued a check for that amount, which was dishonored for being drawn against a closed account. She later executed promissory notes but still failed to pay.

The client filed criminal complaints for violation of Batas Pambansa Blg. 22 (the Bouncing Checks Law) and estafa, plus an administrative complaint before the Integrated Bar of the Philippines (IBP).

The Issue

The central question was whether Atty. Demaisip violated the Code of Professional Responsibility (CPR) by failing to return the client’s money and by issuing a bouncing check.

The Ruling: Guilty of Gross Misconduct

The Supreme Court found Atty. Demaisip guilty of gross misconduct and suspended her from the practice of law for two years. The Court held that she violated:

• Rule 1.01, Canon 1 – A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct.
• Rule 16.01, Canon 16 – A lawyer shall account for all money or property collected or received for or from the client.
• Rule 16.03, Canon 16 – A lawyer shall deliver the funds and property of the client when due or upon demand.

Key Legal Principles

Client desistance does not end the case. The client withdrew his complaint, claiming a misunderstanding. The Court ruled this was irrelevant. Disciplinary proceedings are not civil actions between private parties; they exist solely for public welfare. As the Court explained in Bautista v. Atty. Bernabe, a lawyer answers to the Court for conduct as an officer of the Court, regardless of the complainant’s interest.

Failure to return client money is misappropriation. Citing Del Mundo v. Atty. Capistrano, the Court held that when a client entrusts money for a specific purpose and it is not used, it must be immediately returned upon demand. Failure to do so gives rise to a presumption of misappropriation.

The attorney’s fees defense was an afterthought. Atty. Demaisip claimed she withheld the balance as payment for her legal fees. The Court rejected this: she never informed the client of this claim until her Position Paper, and her own liquidation showed she had already charged ₱297,000.00 as partial attorney’s fees despite incomplete work.

Issuing a bouncing check is serious misconduct. Even without a criminal conviction, admitting to issuing an unfunded check violates B.P. Blg. 22 and constitutes willful dishonesty. The Court cited De Jesus v. Atty. Collado to emphasize that conviction is not essential for administrative liability.

Practical Takeaways

• Account for every centavo. Lawyers must keep clear records of client funds and be ready to return unused amounts immediately upon demand.
• Never issue worthless checks. A bouncing check—even as a “guarantee”—is grounds for suspension, regardless of criminal case outcomes.
• Withdrawal of a complaint is not a defense. Disciplinary cases proceed for the public interest, not for private grievance.
• Raise fee claims promptly. A lawyer cannot withhold client funds as payment without prior disclosure and agreement.
• The penalty is real. Two years of suspension can end a practice; the Court treats fund mishandling with utmost severity.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.