G.R. No. A.C. No. 4515; July 14, 2008
Cecilia A. Agno, Complainant, vs. Atty. Marciano J. Cagatan, Respondent.

FACTS

Complainant Cecilia A. Agno filed a disbarment case against Atty. Marciano J. Cagatan, President of International Services Recruitment Corporation (ISRC). ISRC’s recruitment license had been cancelled by the Department of Labor and Employment (DOLE) in 1988, and the corporation was banned from overseas recruitment. While an appeal of this cancellation was pending with the Office of the President, respondent entered into a Memorandum of Agreement (MOA) on August 9, 1992, with complainant’s husband, Khalifa H. Juma. The MOA stipulated a 50-50 joint ownership of ISRC, with Khalifa contributing ₱500,000.00 to reinstate the corporate license and start operations. Respondent received the full amount.
Complainant later discovered that respondent failed to comply with the MOA’s terms. Inquiries with the Securities and Exchange Commission (SEC) and the Philippine Overseas Employment Administration (POEA) revealed that the corporate structure of ISRC remained unchanged, with complainant and her husband not registered as stockholders or officers. ISRC’s license had not been reinstated. Upon demand for a refund, respondent issued a ₱500,000.00 check that was dishonored for being drawn against a closed account.

ISSUE

Whether respondent Atty. Marciano J. Cagatan violated the Code of Professional Responsibility, warranting disciplinary action.

RULING

Yes, respondent is guilty of gross misconduct and violation of his oath as a lawyer. The Supreme Court found that respondent employed deceit in inducing the investment. He executed the MOA promising joint ownership and management while fully aware that ISRC’s corporate structure could not be altered without SEC approval and that its recruitment license was under cancellation and not yet reinstated. His failure to undertake the promised corporate changes and his misrepresentation regarding the status of the license constituted dishonesty and abuse of the confidence reposed in him as a lawyer.
Furthermore, his issuance of a worthless check to repay the investment, which was subsequently dishonored, demonstrated a lack of integrity and a cavalier disregard for his fiduciary obligations. This act, a violation of Batas Pambansa Blg. 22, constituted gross misconduct. While the act was committed in a private transaction, a lawyer’s professional oath to uphold the law extends to all conduct, private or professional. Such acts erode public confidence in the legal profession. Considering the circumstances, the Court suspended respondent from the practice of law for one year and one month and ordered him to restitute the ₱500,000.00 to the complainant.