SPECIAL FIRST DIVISION
[A.C. No. 12086. November 10, 2021.]Formerly CBD Case No. 12-3300
ANTONIO T. AGUINALDO, complainant, vs.ATTY. ISAIAH C. ASUNCION, JR., respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Special First Division, issued a Resolution datedNovember 10, 2021which reads as follows:
"A.C. No. 12086 [Formerly CBD Case No. 12-3300] (Antonio T. Aguinaldo v. Atty. Isaiah C. Asuncion, Jr.). — For resolution before this Court is the Motion for Reconsideration 1 dated December 8, 2020 filed by Atty. Isaiah C. Asuncion, Jr. (respondent) urging the Court to reconsider its Decision 2 dated October 7, 2020 which found him guilty of committing dishonest, deceitful and fraudulent acts in violation of Canon 1, Rule 1.01 of the Code of Professional Responsibility (CPR) and accordingly imposed upon him the penalty of suspension from the practice of law for a period of six (6) months with a warning that a similar misconduct in the future shall be dealt with more severely. 3
The Facts
To recall, the instant administrative case arose from a Complaint 4 dated January 13, 2021 filed by Antonio T. Aguinaldo (complainant) against respondent in connection with a sale of a parcel of land in Tarlac that did not materialize for which complainant had parted with the amount of P100,000.00 as earnest money. Complainant alleged that respondent employed deceit and fraud when the latter offered to sell a parcel of land owned by his mother, when it was already sold to the Posadas family. Moreover, respondent allegedly refused to provide documents to prove their ownership over the subject property and subsequently refused to return the amount of P100,000.00 despite complainant's demands. Complainant alleges that the foregoing acts of respondent constituted a violation of Canon 1, Rule 1.01 of the CPR, which prohibits a lawyer from engaging in unlawful, dishonest, immoral or deceitful conduct. 5
In response, respondent denies and refutes the allegations of complainant stating that the parcel of land offered for sale to complainant belonged to respondent's mother, which was substantiated by a certified true copy of the Transfer Certificate of Title (TCT) and Tax Declarations which indicates respondent's mother, Patricia Cansino Asuncion (Asuncion) as the registered owner thereof. Specifically, respondent denies that a certain Posadas owned the parcel of land being offered to complainant. In addition, respondent claims that it was in fact complainant who reneged on his obligation to pay the down payment when they supposedly fell due and that complainant was demanding additional conditions which were not previously discussed by the parties. Accordingly, respondent considered complainant to have backed out of the transaction and claims that he has no obligation to return the P100,000.00 earnest money, as it was considered a guaranty to ensure that the buyer would push thru with the transaction. 6
In Our Decision 7 dated October 7, 2020, We noted and adopted the findings of fact of the Integrated Bar of the Philippines (IBP) in their Report and Recommendation 8 dated December 14, 2014. We ruled that the collective acts and attitude of respondent in his dealing with complainant, indicated that he employed trickery by luring complainant into agreeing to buy the property and misrepresenting that his mother owned the property when it was already sold to the Posadas Family. We likewise ruled that respondent's continued refusal to return the earnest money despite the failure of the transaction to materialize placed respondent's integrity in serious doubt. 9
Accordingly, for the foregoing reasons, We found respondent guilty of violating Canon 1, Rule 1.01 of the CPR and meted the penalty of suspension from the practice of law for a period of six (6) months with a warning. 10
The dispositive portion of Our Decision reads: CAIHTE
WHEREFORE, respondent Atty. Isaiah C. Asuncion, Jr. is hereby found GUILTY of committing dishonest, deceitful, and fraudulent acts prejudicial to the legal profession and in violation of Canon 1, Rule 1.01 of the Code of Professional Responsibility. Accordingly, he is SUSPENDED from the practice of law for a period of six (6) months, reckoned from receipt of this Decision, with WARNING that a similar misconduct in the future shall be dealt with more severely.
Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of the Philippines for their information and guidance. The Court Administrator is DIRECTED to CIRCULATE this Decision to all courts in the country.
SO ORDERED.11
Hence, the present Motion for Reconsideration. 12
In his Motion for Reconsideration, respondent argues that complainant failed to submit competent and credible evidence to prove that respondent employed trickery in luring him into agreeing to buy the subject property. Respondent argues that he did not misrepresent his right/ownership of the subject property, and that in fact during the proceedings before the IBP, respondent submitted evidence, i.e., the certified true copy of the TCT, and the tax declarations, to show that his mother, Asuncion is the registered owner of at least 30 hectares of land which includes the subject property offered to complainant. 13
In addition, with respect to complainant's allegation that the subject property was already sold and owned by the Posadas Family, respondent argues that the same was false and was merely based on complainant's suspicions. To refute complainant's claim, respondent attached to his Motion for Reconsideration an Affidavit 14 dated September 21, 2018 executed by Ramon Posadas (Posadas), the individual whom complainant alleged to be the supposed real owner of the subject property. In his Affidavit, Posadas clarified that their supposed sale of the subject property was not consummated and that the title and ownership thereof was never transferred to them. Thus, Posadas explained that the late Asuncion remained the owner of the subject property: 15
That sometime in 2003, while I and my family were still residing in the Philippines, we intended to buy a certain land owned and registered in the name of Patricia Cansino Asuncion, with an area of 21 hectares, more or less, which is located in Barangay Banaoang East, Moncada, Tarlac and covered by Transfer Certificate of Title No. 319985, and that time we did not expect that our immigrant visas to Canada would be approved ahead of schedule;
That the supposed sale of the above-property to us was never consummated because I and my family were about to leave for Canada at that time, and shortly before we migrated to Canada, we informed the late [Patricia] C. Asuncion that we would no longer purchase the above property;
That the late Patricia C. Asuncion remained to be the registered owner of the property at present, and after her death in 2016, the ownership over the said property passed to her two (2) surviving children, namely, Dr. Julie Asuncion-Alcancia and Atty. Isaiah C. Asuncion, Jr.;
That the late Patricia C. Asuncion had always been the absolute owner of the above property, and there was never an instance that the ownership of said property was transferred to me and my family because, as stated above, the supposed sale of the same to us never materialized; 16
It bears pointing out that the foregoing Affidavit executed by Posadas was not submitted during the IBP proceedings and was only executed and secured after the IBP issued its Report and Recommendation.
Anent complainant's allegation that respondent's refusal to return the P100,000.00 earnest money was unlawful, respondent counters that the same was a rightful forfeiture and justified.
In his Motion for Reconsideration, respondent cites Our ruling in Racelis v. Sps. Javier, 17 wherein we explained that "[i]n a contract to sell, earnest money is generally intended to compensate the seller for the opportunity cost of not looking for any other buyers. It is ashow of commitment on the part of the party who intimates his or her willingness to go through with the sale after a specified period or upon compliance with the conditions stated in the contract to sell." Respondent thus argues that when complainant refused to pay the down payment when they fell due in accordance with complainant's proposal, the forfeiture of the earnest money was justified. 18
Our Ruling
After a careful and assiduous review of the records and the arguments raised and evidence presented by respondent in his Motion for Reconsideration, We find it necessary to modify Our previous Ruling. DETACa
Respondent is charged for having violated Canon 1, Rule 1.01 of the CPR in connection with the sale of a parcel of land that did not materialize. In particular, complainant alleges that respondent employed trickery, deceit and fraud when complainant was mislead into agreeing to purchase the Subject Property, despite the same being owned by the Posadas Family. Complainant charges respondent for failing to disclose material facts regarding the ownership of the Subject Property. Moreover, complainant likewise faults respondent for his continued refusal to return the P100,000.00 paid by complainant as earnest money, despite his repeated demands. Complainant alleges that he did not back out from the transaction, but was merely demanding from respondent to produce the necessary documents to prove their ownership over the parcel of land offered to him for sale. 19
Canon 1, Rule 1.01 of the CPR provides:
CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes.
Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
We explained that the foregoing provision, embodies the norm of conduct that should be observed by all lawyers, in that they should not engage in unlawful, dishonest, immoral, or deceitful conduct.
"Unlawful" conduct refers to any act or omission that is contrary to, prohibited or unauthorized by, in defiance of, disobedient to, or disregards the law. 20
"Dishonesty" in this regard, means the disposition to lie, cheat, deceive, defraud, or betray; be unworthy; lacking in integrity, honesty, probity, integrity in principle, fairness, or straightforwardness. 21
On the other hand, conduct that is "deceitful" means the proclivity for fraudulent and deceptive misrepresentation, artifice or device that is used upon another who is ignorant of the true facts, to the prejudice and damage of the party imposed upon. 22 "Deceitful conduct" involves moral turpitude and includes anything done contrary to justice, modesty or good morals. 23 It is an act of baseness, vileness or depravity in the private and social duties which a person owes to his or her fellowmen or to society in general, contrary to justice, honesty, modesty, or good morals. 24
Accordingly, in order to be deceitful, the person must either have knowledge of the falsity or acted in reckless and conscious ignorance thereof, especially if the parties are not on equal terms, and was done with the intent that the aggrieved party act thereon, and the latter indeed acted in reliance of the false statement or deed in the manner contemplated to his injury. 25
A sampling of relevant and similar jurisprudence yields the exacting standards and norm of ethical conduct expected of a member of the legal profession, which should be maintained in both his/her professional and private dealings and transactions.
In Kare v. Atty. Tumaliuan, 26 We found respondent therein guilty of committing dishonest, deceitful, and fraudulent acts for having purchased a house and lot in exchange for cash and her Toyota Fortuner that was already encumbered and mortgaged to a bank — the fact of which was withheld from complainant. Respondent therein failed to comply with her obligation of delivering a clean title to the vehicle or any documentation showing that the same had been released from any encumbrances. Accordingly, We ruled that respondent violated Canon 1, Rule 1.01 of the CPR and imposed the penalty of suspension from the practice of law for a period of one (1) year.
In Saladaga v. Atty. Astorga, 27 this Court found respondent to have acted with bad faith, falsehood, and deceit when he entered into a "Deed of Sale with Right to Repurchase" with complainant. Respondent had misrepresented and made it appear in the Deed that the title of the property was under his name, when in fact the title had already been cancelled previously and another one was issued under the name of Philippine National Bank (PNB). Moreover, prior to the expiration of respondent's right to repurchase the Subject Property, he was able to have PNB's title cancelled and a new one issued in his name — the fact of which he did not disclose to complainant. Finally, it was later on discovered that the subject property was subsequently mortgaged by respondent to the Rural Bank of Albuera (Leyte), Inc. — who eventually acquired ownership of the property through foreclosure proceedings and thereafter, dispossessed complainant of the Subject Property. In the said case, We ruled that respondent violated Canon 1, Rule 1.01 of the CPR, among others and imposed the penalty of suspension from the practice of law for a period of one (1) year.
In the foregoing cases, it was duly proven by clear and convincing evidence that respondent therein employed trickery, or fraudulent and deceptive misrepresentation in their dealings. It was proven that respondents had knowledge of the falsity and acted with intent to deceive or misrepresent their victims. Such dishonesty and deceitful conduct was appropriately met with the penalty of suspension.
However, in the instant case, We find nothing constituting clear and convincing evidence that respondent engaged in unlawful, dishonest, or deceitful conduct in his dealing with complainant, which would warrant the imposition of the penalty of suspension from the practice of law. aDSIHc
We reiterate that in administrative cases against lawyers, the quantum of proof required is preponderance of evidence, which the complainant has the burden to discharge. Preponderance of evidence means that the evidence adduced by one side is, as a whole, superior to or has a greater weight than that of the other. It means evidence, which is more convincing to the court as worthy of belief compared to the presented contrary evidence. 28 When the pieces of evidence of the parties are evenly balanced or when doubt exists on the preponderance of evidence, the equipoise rule dictates that the decision be against the party carrying the burden of proof. 29
The Court exercises its disciplinary power only if the complainant establishes their case by clear, convincing, and satisfactory evidence. 30
In the instant case, complainant alleges that respondent employed deceit, trickery and fraud when the latter misrepresented that her mother owned the property offered to complainant — when in fact it was supposedly owned by the Posadas family. In arriving at his conclusion, complainant relied on a sign outside the property which indicated "POSADAS PROPERTY" and that the Posadas family hired a caretaker to oversee the same. In addition, complainant presented official receipts for the payment of Real Property Taxes made by Posadas. 31
After a circumspect review of the records and the evidence presented by the parties, We are convinced that respondent did not commit any misrepresentation, dishonesty or deceit in his dealing with complainants.
First, during the proceedings before the IBP, respondent attached an updated certified true copy of the TCT which indicated respondent's mother, Asuncion as the registered owner thereof. Second, the official receipt presented by complainant — which although indicates that payment of the real property taxes was made by Posadas, nevertheless indicates that the declared owner is respondent's mother, Asuncion. Notably, tax declarations or realty tax payments are not conclusive evidence of ownership but are mere indicia of possession in the concept of owners. 32Third, and most importantly, Posadas himself denies he is the owner of the Subject Property. In his Affidavit, Posadas clarifies that although sometime in 2003, his family intended to buy the Subject Property from respondent's mother, Asuncion, the sale was never consummated. Posadas emphasized that ownership of the property was never transferred to him and that respondent's mother, Asuncion remained the absolute owner thereof.
Given the foregoing, We are not convinced that respondent made misrepresentations or withheld material information regarding the status and ownership of the subject property. There was no falsity in his representations to complainant that the property offered to him for sale was owned by respondent's mother, Asuncion.
Anent the issue of respondent's refusal to return the earnest money in the amount of P100,000.00, We do not find the same to be impelled by any ill motive or intention to defraud complainant.
In a contract to sell, the payment of earnest money represents the seller's opportunity cost of holding in abeyance the search for other buyers or better deals. Absent proof of a clear agreement to the contrary, it should be forfeited if the sale does not happen without the seller's fault. The potential buyer bears the burden of proving that the earnest money was intended other than as part of the purchase price and to be forfeited if the sale does not occur without the seller's fault. 33
Most recently, in Heirs of Kim v. Quicho, 34 this Court citing Racelis v. Sps. Javier, ruled that in a contract to sell, the payment of earnest money is a show of commitment on the part of the potential buyer of his or her willingness to push through with the sale and is generally intended to compensate the seller for the opportunity cost of not looking for any other buyers, to wit:
In a contract to sell, earnest money is generally intended to compensate the seller for the opportunity cost of not looking for any other buyers. It is a show of commitment on the part of the party who intimates his or her willingness to go through with the sale after a specified period or upon compliance with the conditions stated in the contract to sell.
Opportunity cost is defined as "the cost of the foregone alternative." In a potential sale, the seller reserves the property for a potential buyer and foregoes the alternative of searching for other offers. This Court, in Philippine National Bank v. Court of Appeals, construed earnest money given in a contract to sell as "consideration for [seller's] promise to reserve the subject property for [the buyer]." The seller, "in excluding all other prospective buyers from bidding for the subject property x x x [has given] up what may have been more lucrative offers or better deals."
Earnest money, therefore, is paid for the seller's benefit. It is part of the purchase price while at the same time proof of commitment by the potential buyer. Absent proof of a clear agreement to the contrary, it is intended to be forfeited if the sale does not happen without the seller's fault. For this reason, the Court, in Racelis v. [Sps.] Javier, ruled that "[t]here is no unjust enrichment on the part of the seller should the initial payment be deemed forfeited. After all, the owner could have found other offers or a better deal. The earnest money given by respondents is the cost of holding this search in abeyance." 35 (Citations and emphasis omitted.)
In the instant case, there is no dispute that the parties merely entered into a contract to sell and not a contract of sale. In a contract of sale, the seller obliges to transfer ownership of and deliver the subject matter of the contract. 36 The title to the property passes to the buyer upon delivery of the thing sold. In contrast, in a contract to sell, ownership does not pass to the prospective buyer until full payment of the purchase price. The title of the property remains with the prospective seller. 37
The records bear that complainant offered to purchase the subject property while respondent reserved ownership thereof until full payment of the purchase price. In the Letter 38 dated October 20, 2010, complainant offered to purchase the subject property under his proposed schedule of payment which starts with the payment of P100,000.00 as earnest money. Moreover, as admitted by complainant when he paid the earnest money, it was explained to him by respondent that it signified his sincerity in purchasing the property. 39
Accordingly, in the absence of any agreement or evidence to the contrary, the payment of P100,000.00 as earnest money was intended to be forfeited if the sale does not happen without the seller's fault. The question therefore is whether respondent, as the seller was at fault for the non-execution of the sale. ETHIDa
In the instant case, the parties have conflicting accounts as to why the sale of the subject property failed to materialize. Respondent claims that the sale of the subject property was not consummated due to complainant's failure to pay the down payment of the purchase price and the imposition of additional conditions, not agreed upon during the negotiations. On the other hand, complainant claims that respondent failed to draft and prepare a written contract to formalize their agreement and failed to produce the necessary documents to show the status and ownership of the subject property.
After weighing the evidence presented by the parties, We are inclined to favor complainant's position.
It is not an unreasonable demand, that before a buyer parts with his money, proper documentation of the agreement should first be drawn up and prepared and proof of ownership of the property be available upon request. Notably, respondent failed to provide any reason or justification for his failure to prepare the necessary contracts and proof of his mother's ownership of the Subject Property. Simply, it was through respondent's fault that the sale of the subject property did not push through, and thus the forfeiture of the earnest money was not justified.
Accordingly, respondent's repeated failure to return the amount of P100,000.00 is unwarranted and unjustified.
We likewise take this opportunity to remind respondent that the issue on the true ownership of the property could have easily been avoided and explained had respondent furnished the necessary documents during his initial meetings with complainant. Moreover, respondent should have been more diligent in preparing a written contract detailing the respective rights and obligations of the parties as evidence of their agreement. As a member of the Bar, respondent should have been more judicious and forthright in his private dealings.
A member of the Bar must act with integrity, honesty and professional decorum. Both his professional and personal conduct must be kept beyond reproach and above suspicion. His conduct should be characterized by candor, competence and fairness. 40
Although respondent may have been negligent and remiss with some of his obligations both as a party to a contract and a member of the Bar, such misgivings to Our mind do not amount to dishonest or deceitful conduct which would warrant suspension from the practice of law. We find the penalty of suspension to be too harsh and instead find the penalty of reprimand and stern warning sufficient given the foregoing circumstances.
WHEREFORE, the Motion for Reconsideration dated December 8, 2020 filed by respondent Atty. Isaiah C. Asuncion, Jr. is PARTIALLY GRANTED. The Decision dated October 7, 2020 is MODIFIED and the penalty of suspension DELETED. Accordingly, respondent Atty. Isaiah C. Asuncion, Jr., is meted the penalty of REPRIMAND and is STERNLY WARNED that the same or a similar act in the future shall be dealt with more severely.
Let copies of this Resolution be attached to the personal records of Atty. Isaiah C. Asuncion, Jr. as attorney, and be furnished to the Office of the Bar Confidant and the Integrated Bar of the Philippines. The Court Administrator is DIRECTED to CIRCULATE this Resolution to all courts in the country.
The entry of appearance of Atty. Isaiah O. Asuncion III, as counsel for respondent is NOTED.
SO ORDERED."Dimaampao, J., designated as additional Member in lieu of Peralta, C.J., pursuant to par. 3 of Sec. 8, Rule 2 of the IRSC.
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 136-145.
2.Id. at 127-134; penned by Chief Justice Diosdado M. Peralta (now a retired Member of this Court) with Associate Justices Alfredo Benjamin S. Caguioa, Amy C. Lazaro-Javier, Mario V. Lopez, and Samuel H. Gaerlan, concurring.
3.Id. at 133.
4.Id. at 2-9.
5.Id. at 2-6.
6.Id. at 18-20.
7.Id. at 1127-134. n
8.Id. at 112-121; penned by Commissioner Christian D. Villagonzalo.
9.Id. at 130-131.
10.Id. at 130-133.
11.Id. at 133.
12.Id. at 136-145.
13.Id. at 137-139.
14.Id. at 147.
15.Id.
16.Id.
17. 824 Phil. 684 (2018).
18.Rollo, pp. 141-143.
19.Id. at 4.
20.Saladaga v. Atty. Astorga, 748 Phil. 1, 13 (2014).
21.Jimenez v. Atty. Francisco, 749 Phil. 551, 565-566 (2014).
22.Saladaga v. Atty. Astorga, supra at 13.
23.Suarez v. Atty. Maravilla-Ona, 796 Phil. 27, 35 (2016) citing Overgaard v. Valdez, 588 Phil. 422, 430 (2008).
24.Id.
25.Saladaga v. Atty. Astorga, supra at 13.
26. A.C. No. 8777, October 9, 2019.
27.Supra note 22.
28.HDI Holdings Philippines, Inc. v. Atty. Cruz, A.C. No. 11724 (Formerly CBD No. 14-4109), July 31, 2018.
29.Arienda v. Atty. Aguila, 495 Phil. 264, 268 (2005).
30.Id.
31.Rollo, pp. 4-5.
32.Heirs of Santiago v. Heirs of Santiago, 452 Phil. 238, 248 (2003).
33.Racelis v. Sps. Javier, supra note 17 at 702.
34. G.R. No. 249247, March 15, 2021.
35.Id.
36.Tan v. Benolirao, 619 Phil. 35, 48 (2009).
37.Chua v. Court of Appeals, 449 Phil. 25, 41-42 (2003).
38.Rollo, p. 42.
39.Id. at 3.
40.Roque v. Clemencio, 287 Phil. 684, 689 (1992).
n Note from the Publisher: Copied verbatim from the official document.