G.R. No. A.C. No. 4697 & A.C. No. 4728, November 25, 2014
Florencio A. Saladaga, Complainant, vs. Atty. Arturo B. Astorga, Respondent.

FACTS

Complainant Florencio A. Saladaga and respondent Atty. Arturo B. Astorga entered into a “Deed of Sale with Right to Repurchase” on December 2, 1981, involving a coconut land in Leyte for ₱15,000.00. Respondent, as vendor a retro, represented himself as the owner in fee simple and that the property was free from liens. The deed allowed respondent two years to repurchase, with a provision for renewal if not repurchased. Respondent failed to repurchase within the period, and no renewal occurred despite a final demand from complainant in May 1984. Complainant remained in possession until December 1989, when he received notices from the Rural Bank of Albuera (Leyte), Inc. (RBAI) stating that the property had been mortgaged by respondent to RBAI, foreclosed, and that complainant must vacate.
Complainant’s investigation revealed: (1) The original Transfer Certificate of Title (TCT) No. T-662 had been cancelled by TCT No. T-3211 in the name of Philippine National Bank (PNB) on November 17, 1972, after foreclosure; (2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the names of respondent and his wife on January 4, 1982, pursuant to a 1979 deed of sale between PNB and respondent; (3) Respondent mortgaged the property to RBAI on March 14, 1984, leading to foreclosure and RBAI obtaining TCT No. TP-10635 on March 27, 1991. Complainant was dispossessed by RBAI.
Complainant filed a criminal complaint for estafa, resulting in an Information filed against respondent in the Municipal Trial Court of Baybay, Leyte. He also filed administrative complaints (A.C. No. 4697 and A.C. No. 4728) seeking respondent’s disbarment. In his Consolidated Answer before the Integrated Bar of the Philippines (IBP), respondent denied the pacto de retro sale, claiming it was an equitable mortgage, and argued that complainant’s benefits from the land’s produce exceeded ₱15,000.00.

ISSUE

Whether respondent Atty. Arturo B. Astorga violated his oath and the Code of Professional Responsibility, warranting disciplinary action.

RULING

The Supreme Court found respondent administratively liable. The Court agreed with the IBP Board of Governors’ recommendation, as modified. Respondent’s actions demonstrated a disregard for legal proficiency, morality, honesty, and fair dealing required of lawyers.
The Court held that respondent, as the drafter of the ambiguous “Deed of Sale with Right to Repurchase,” failed to ensure the instrument clearly reflected the parties’ intent, leading to legal disputes. This showed a lack of legal competence, violating his oath to conduct himself as a lawyer with knowledge and discretion. Further, respondent violated Article 19 of the Civil Code by not acting with justice, honesty, and good faith. His representation in the deed that the property was covered by TCT No. T-662, when it had been cancelled years earlier, and his subsequent actions (including obtaining a new title and mortgaging the property without informing complainant) constituted deceit and gross misconduct.
The Court suspended respondent from the practice of law for two years, with a warning that a similar offense would be dealt with more severely. However, it refrained from ordering the return of the ₱15,000.00 consideration, as such a civil liability should be addressed in a proper civil action. The suspension was based on substantial evidence of respondent’s violation of professional standards, independent of the pending criminal case for estafa.