Molabola v. Cabarroguis

FIRST DIVISION

[A.C. No. 10304. June 14, 2021.][Formerly CBD Case No. 07-2110]

RAUL MOLABOLA, ET AL., complainants,vs. ATTY. HONESTO A. CABARROGUIS, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated June 14, 2021 which reads as follows:

"A.C. No. 10304 [Formerly CBD Case No. 07-2110] (Raul Molabola, et al., Complainants, v. Atty. Honesto A. Cabarroguis, Respondent). — Before the Court is a complaint for disbarment filed by Raul Molabola and Evelyn M. Montecalvo (complainants) against Atty. Honesto A. Cabarroguis (Atty. Cabarroguis).

Antecedents

A 21-hectare parcel of land located at Barrio Talandang, Davao City covered by OCT No. P-2273 was registered in the name of Ignacio Molabola (Ignacio), the father of complainants. The property was mortgaged in favor of Philippine National Bank (PNB), which subsequently foreclosed the same. PNB consolidated its title to the property under TCT No. P-29948. 1

On 26 May 1971, Ignacio executed a Special Power of Attorney (SPA) in favor of Atty. Cabarroguis, authorizing the latter to repurchase the subject land from PNB. Said SPA was irrevocable with power of substitution at the option of the attorney-in-fact. 2 A Deed of Sale (Repurchase) was thereafter executed by PNB in favor of Ignacio on 27 May 1971. Through Atty. Cabarroguis' effort, the title to the subject property was transferred back in Ignacio's name on 23 June 1997 under TCT No. T-286253. 3

Atty. Cabarroguis likewise facilitated the registration of the subject property with the Department of Agrarian Reform (DAR). A Notice of Coverage was issued by DAR for the land sometime in 1997 while the property was still registered in the name of PNB. As such, Atty. Cabarroguis filed a petition with Branch 15 of the Regional Trial Court (RTC) of Davao City to fix the value of the property in 2000. He withdrew the same but filed another petition to fix the value of the property in November 2000. 4

On 07 August 2001, Atty. Cabarroguis filed a petition to cancel Ignacio's title and have the property registered in his name. This was granted on 05 October 2001. Accordingly, on 23 January 2002, the DAR, through the Land Bank of the Philippines (LBP), paid Php506,216.67 to Atty. Cabarroguis. 5

Notably, Ignacio died on 24 July 1994. 6

Sometime in 2007, complainants wrote Atty. Cabarroguis to remit to them the payments made by the DAR. Atty. Cabarroguis sent a reply letter denying any obligation to the complainants. 7 Thus, complainants initiated the instant proceedings, 8 stressing that Ignacio died on 24 July 1994 but Atty. Cabarroguis continued to act as attorney-in-fact when he offered the property for sale to the DAR on 03 November 1997. 9

According to complainants, Atty. Cabarroguis committed misrepresentation as attorney-in-fact of Ignacio even after the latter's death, when: (1) he offered the land for sale to the DAR; (2) he filed a Manifestation dated 04 November 1999 in DARAB Case No. LV as Ignacio's representative although he was not authorized; (3) he represented Ignacio during the PARAD proceedings for the determination of the just compensation for the subject land; (4) to question the valuation given to the property by the PARAD, he filed a petition in March 2000 before Branch 15 of the RTC of Davao City as Ignacio's attorney-in-fact; and (5) after withdrawing the first petition, he filed another petition in November 2000 to fix the just compensation of the property as Ignacio's attorney-in-fact. 10

Complainants further insist that Atty. Cabarroguis misused the SPA issued in his favor and exceeded the power given him. They underlined that after repurchasing Ignacio's property on 28 May 1971, Atty. Cabarroguis obtained the title and kept it until 27 June 1997 instead of transferring the title from PNB to Ignacio. He withdrew the amount of Php507,216.67 and Php380.06 from the LBP as compensation for Ignacio's property and misappropriated the same. He made it appear that he was a party to the Deed of Sale (Repurchase) of the property from PNB to Ignacio as the latter's attorney-in-fact. He even had his name entered in the title of the property (TCT No. 286253) as Ignacio's attorney-in-fact. 11

In defense, Atty. Cabarroguis averred that Ignacio asked him to repurchase the property, sell it, and pay his obligations with Getty Oil from the proceeds of the sale. Taking pity on Ignacio, Atty. Cabarroguis agreed to help the latter. He thus negotiated with PNB and paid the repurchase price with his own money. 12 Atty. Cabarroguis likewise paid Ignacio's debt to Getty Oil and the real property tax of the subject property. 13

He expounded that the Deed of Sale (Repurchase) was prepared by PNB and it was the latter which included his name as Ignacio's attorney-in-fact. He clarified that when he offered the subject land to DAR and filed the petitions before the RTC, he did so as Ignacio's attorney-in-fact. Atty. Cabarroguis explained that he had his name entered on the title TCT No. 286253 because of the irrevocable nature of the SPA and that he filed the petition for cancellation of Ignacio's title for the payment of just compensation so as to avoid confusion on who the LBP will pay — PNB or Atty. Cabarroguis/Ignacio. 14

Further, Atty. Cabarroguis claimed that he can validly perform such acts because he was already the owner of the subject property pursuant to the Deed of Sale with right to repurchase dated 26 May 1971, executed by Ignacio in Atty. Cabarroguis' favor. 15 Ignacio executed said Deed of Sale to convince Atty. Cabarroguis to repurchase the land, 16 since said document obligates Ignacio to repay Atty. Cabarroguis what the latter paid to redeem the property from PNB. 17 Atty. Cabarroguis also insisted that he was not aware that Ignacio died in 1994. 18 Considering this and given that Ignacio never repurchased said property from him, 19 Atty. Cabarroguis did not misappropriate the payments made by LBP as he was entitled to the said payment as the property's owner. 20

Complainants have not denied the authenticity and due execution of the Deed of Sale dated 26 May 1971 executed by Ignacio in favor of Atty. Cabarroguis. 21

Report and Recommendation

In its Report 22 dated 23 February 2009, the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline (CBD) found Atty. Cabarroguis guilty for violating Rule 10.01 of Canon 10 of the Code of Professional Responsibility (CPR), to wit:

WHEREFORE, premises considered, for misrepresenting himself as Attorney-in-fact of Mr. Ignacio Molabola instead of the of his property in the aforecited various vendee proceedings/transactions it is respectfully recommended that Atty. Honesto Cabarroguis be meted the penalty of reprimand for violation of Rule 10.01. x x x 23

The CBD underlined that while Atty. Cabarroguis' acts did not strictly arise in the course of an attorney-client relationship as it occurred in an ordinary relationship of agency, the fact remains that Atty. Cabarroguis performed acts beyond those authorized by the SPA. He should have done the above-cited acts in his own name rather than in Ignacio's name. Instead, he made it appear that he was acting as attorney-in-fact of Ignacio rather than the vendee of the property for the sake of expediency. In doing so, he resorted to some shortcuts in his attempt to protect his interest in the subject property, amounting to the violation of Rule 10.01 of Canon 10. 24

In its Resolution 25 dated 28 August 2010, the IBP Board of Governors (Board) adopted and approved with modification said recommendation, suspending Atty. Cabarroguis from the practice of law for one (1) year for his repeated use of the SPA, viz.:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of the above entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and finding Respondent guilty of Canon 10, Rule 10.01 of the Code of Professional Responsibility and taking into consideration Respondent's repeated use of the Special Power of Attorney in violation of the trust and confidence reposed on him and the gravity of the acts committed, Atty. Honesto A. Cabarroguis is hereby SUSPENDED from the practice of law for one (1) year.26

On 11 May 2013, the Board partially granted Atty. Cabarroguis' Motion for Reconsideration and set aside the order of suspension, to wit:

RESOLVED to PARTIALLY GRANT Respondent's Motion for Reconsideration and ADOPT, as it is hereby ADOPTED, the Report and Recommendation of the Investigating Commissioner, to wit: There is no evidence of bad faith on the part of Respondent; there is evidence that Respondent duly served as counsel of Ignacio Molabola during the time the latter was facing estafa case and served Ignacio Molabola for many years and the latter's non-action to claim back the property from 1971 until his death on 1984 is a clear indication that he never had any claim anymore over the property. Absent evidence to the effect that there was misbehavior on the part of Respondent in acquiring said property, the penalty of REPRIMAND is appropriate. Thus, Resolution No. XIX-2010-454 dated August 28, 2010 is hereby SET ASIDE.27

Complainants thereafter filed a petition before this Court: (1) clarifying that Atty. Cabarroguis was the lawyer of Getty Oil in its estafa case against Ignacio, thus, Atty. Cabarroguis' purchase of the subject property was in violation of Articles 1491 and 1492 of the Civil Code; and (2) insisting that Atty. Cabarroguis' continuous misrepresentation as Ignacio's attorney-in-fact is violative of Canon 1, Rules 1.01, 1.02, 1.03, Canon 7, Rule 7.02, Canon 10, Rules 10.1, 10.2 and 10.3 of the CPR. 28

Issue

The sole issue in this case is whether Atty. Cabarroguis may be held administratively liable for violating the CPR.

Ruling of the Court

We adopt the findings of the IBP Board.

Atty. Cabarroguis did not

Under Article 1491 (5) of the Civil Code, lawyers are prohibited from acquiring either by purchase or assignment the property or rights involved which are the object of the litigation in which they intervene by virtue of their profession. The prohibition on purchase is all embracing to include not only sales to private individuals but also public or judicial sales. The rationale advanced for the prohibition is that public policy disallows the transactions in view of the fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised by these persons. It is founded on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at the expense of his client. However, the said prohibition applies only if the sale or assignment of the property takes place during the pendency of the litigation involving the client's property. Consequently, without such elements, no violation of Article 1491 (5) of the Civil Code attaches. 29

Guided by the above, it should be emphasized that for the prohibition to apply, the sale or assignment of the property must take place during the pendency of the litigation principally involving the property to which the lawyer participated. 30

In this regard, We agree with Atty. Cabarroguis that the prohibition under Article 1491 (5) is inapplicable. 31 The subject property was never the subject of any litigation nor compromise between Getty Oil and Ignacio, in which Atty. Cabarroguis was involved. 32

That the transaction is

While Ignacio did not formally engage Atty. Cabarroguis' services as a lawyer, any untoward actions committed by Atty. Cabarroguis may be disciplined by the Court.

Indeed, a lawyer may be disciplined for acts committed even in his private capacity for acts which tend to bring reproach on the legal profession or to injure it in the favorable opinion of the public. There is no distinction as to whether the transgression is committed in a lawyer's private life or in his professional capacity, for a lawyer may not divide his personality as an attorney at one time and a mere citizen at another. 33

Here, the SPA executed on 26 May 1971 by Ignacio empowers Atty. Cabarroguis to perform in his behalf only the following acts: (1) to repurchase the subject land from PNB, and (2) to register the sale with the Register of Deeds of Davao City. It states:

To repurchase for and in my name, that piece of agricultural land consisting of 21.4439 hectares, located at Siao, Tugbok, Davao City, originals covered by OCT No. P-2273, registered in my name as the original patentee with the Register of Deeds of Davao City, but presently covered by TCT No. T-29948 registered in the name of the Philippine National Bank with the Register of Deeds of Davao City, from the Philippine National Bank and for this purpose, to pay for the repurchase price in full, sign for and receive the title from the vendee, the Philippine National Bank to register the sale with the Register of Deeds of Davao City, and to do and perform any and all acts requisite and necessary in order to attain the purpose for which he has been and by these presents authorized to act for and in my name and stead. 34

Yet, despite the clear mandate of the SPA, Atty. Cabarroguis admitted to performing the following acts "for and on behalf of Mr. Ignacio Molabola": (1) he offered Ignacio's land for sale to the DAR on 03 November 1997; (2) he filed a Manifestation dated 04 November 1999 in DARAB case no. LV; (3) he represented Ignacio during the proceedings before the PARAD to determine the appropriate compensation for the land; (4) he questioned the valuation given by the PARAD and filed a petition before Branch 15 of the RTC in Davao City on 23 March 2000; (5) after withdrawing his first petition, he filed another one in November 2000 to fix the just compensation for the subject property; (6) he filed a claim for the land's value on 22 December 1998; and (7) he received the compensation for the land on 23 January 2002. 35

Based on the foregoing, Atty. Cabarroguis unmistakably performed acts beyond those authorized by the SPA. Moreover, it is worthy to note that it took 26 years for Atty. Cabarroguis to discharge his second authorized duty of registering the repurchase from PNB with the Register of Deeds and of transferring back the title of the subject property in the name of Ignacio. 36

The fact that the land was sold to Atty. Cabarroguis does not justify his continuous use of the SPA and his persistent misrepresentation that he was acting on behalf of Ignacio. While representing himself as Ignacio's attorney-in-fact was convenient for the transfer of the subject property's title, it is nonetheless true that he acted beyond the scope of his authority. Atty. Cabarroguis could have accomplished said acts as the vendee of the property had he processed: (1) the registration of the Deed of Sale in his favor; 37 and (2) the transfer of the subject property's title in his name.

Given the foregoing, We agree with the IBP's findings that Atty. Cabarroguis violated Rule 10.01 of Canon 10 of the CPR. 38 While no damage has resulted from the same, Atty. Cabarroguis' actions still amounted to a violation of the CPR.

As for the proper penalty, this Court had imposed the penalty of censure or admonishment in previous cases wherein the same Canons and Rules of the CPR were violated. 39 Accordingly, We sustain the IBP Board's Resolution.

WHEREFORE, in view of the foregoing, the complaint for disbarment is hereby DENIED. Nevertheless, Atty. Honesto A. Cabarroguis is found liable for violation of Canon 10 and Rule 10.01 of the Code of Professional Responsibility. He is hereby REPRIMANDED with a stern warning that a repetition of the same or similar act would be dealt with more severely. 40

Let a copy of this Resolution be furnished to the Office of the Bar Confidant, to be appended to Atty. Honesto A. Cabarroguis' personal record as attorney. Likewise, let copies of this Resolution be furnished to the Integrated Bar of the Philippines and the Office of the Court Administrator for dissemination to all courts in the country for their information and guidance.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, p. 1325.

2.Id. at 1322.

3.Id. at 1325.

4.Id.

5.Id. at 1326.

6.Id. at 1325.

7.Id. at 1326.

8.Id. at 2-6.

9.Id.

10.Id. at 1323-1324.

11.Id.

12.Id. at 53-54, 59, 1322-1325.

13.Id. at 59.

14.Id. at 1322-1325.

15.Id. at 1323, 1325.

16.Id. at 1328.

17.Id. at 1324.

18.Id.

19.Id. at 1553-1554.

20.Id. at 1323, 1325.

21.Id. at 66, 1325, 1328.

22.Id. at 1322-1329; signed by Investigating Commissioner Eduardo V. De Mesa.

23.Id. at 1329.

24.Id. at 1328-1329.

25.Id. at 1321.

26.Id.

27.Id. at 1320.

28.Id. at 1390-1402.

29.See Ramos v. Ngaseo, 487 Phil. 40-49 (2004), A.C. No. 6210, 09 December 2004 [Per J. Ynares-Santiago].

30.Ricardo, Jr. v. Go, A.C. No. 12280, 16 September 2020 [Per J. J.C. Reyes].

31.See Palacios v. Amora, A.C. No. 11504, 01 August 2017 [Per Curiam] and Ricardo, Jr. v. Go, A.C. No. 12280, 16 September 2020 [Per J. J.C. Reyes].

32.Id.; Rollo, pp. 1563-1564.

33.Valin v. Ruiz, A.C. No. 10564, 07 November 2017 [Per J. Gesmundo].

34.Rollo, p. 1327.

35.Id. at 1328.

36.Id. at 1327.

37.Id. at 1326.

38. Rule 10.01, Canon 10 of the CPR provides:

CANON 10 — A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT.

Rule 10.01 — A lawyer should not do any falsehood, nor consent to the doing of any in court; nor shall be mislead the court by any artifice, or allow the court to be misled.

39.See Puno v. Canlas, A.C. No. 11349 (Notice), 15 June 2020, and Casanova v. Ubarra, Jr., A. C. No. 10882 (Notice), 02 December 2015.

40.See Malecdan v. Baldo, A.C. No. 12121, 27 June 2018 [Per J. Caguioa].