G.R. No. A.C. No. 3637. January 24, 2001.
Rural Bank of Silay, Inc., Complainant, vs. Atty. Ernesto H. Pilla, Respondent.

FACTS

Complainant Rural Bank of Silay, Inc. filed a disbarment complaint against respondent Atty. Ernesto H. Pilla for deceit and gross misconduct. The bank alleged that in 1975, respondent obtained a loan of P91,427.00 by executing a real estate mortgage over a parcel of land in Sagay, Negros Occidental. He presented a Special Power of Attorney (SPA) purportedly signed by the registered owners, Pedro N. Torres and Oscar D. Granada, authorizing him to mortgage the property as their attorney-in-fact. Relying on this security, the bank released the loan.
Subsequently, Oscar D. Granada filed a civil case for annulment, claiming he never signed the SPA. The Regional Trial Court declared the SPA and the mortgage null and void, finding the signatures forged. The court also held that respondent, having benefited from the falsified document, was presumed to have a hand in its preparation. Respondent did not appeal this decision. The bank later initiated this administrative case, noting respondent never returned the loan proceeds.

ISSUE

Whether respondent Atty. Ernesto H. Pilla is guilty of professional misconduct warranting disciplinary action.

RULING

Yes, the Supreme Court found respondent guilty of misconduct and suspended him from the practice of law for three years. The Court emphasized that a lawyer’s oath to do no falsehood and the Code of Professional Responsibility demand honesty and integrity in both professional and private conduct. The factual findings of the RTC in the civil case, which became final due to respondent’s failure to appeal, were persuasive in the administrative proceeding. These findings established that the SPA was forged and that respondent, as the beneficiary, was presumed involved in the falsification.
The legal logic rests on the principle that possession and use of a forged document, especially for personal profit, creates a presumption that the possessor is the forger. As a lawyer, respondent knew or ought to have known that the notarization of the SPA required the personal appearance of the principals, which did not occur. His act of presenting the falsified document to secure a loan constituted unlawful, dishonest, and deceitful conduct. The Court ruled that such misconduct, even in private dealings, reflects a lack of the moral character required for continued membership in the Bar. Good moral character is a continuing qualification for law practice. The three-year suspension serves as a penalty and a deterrent.