AC 4834; (February, 2000) (Digest)
G.R. No. A.C. No. 4834 February 29, 2000
FELICIDAD L. COTTAM, complainant, vs. ATTY. ESTRELLA O. LAYSA, respondent.
FACTS
Complainant Felicidad Cottam charged Atty. Estrella Laysa with gross misconduct and dishonesty. Cottam owned two parcels of land and executed a special power of attorney (SPA) in favor of Faustino Aledia to mortgage them. Aledia mortgaged the properties to Banahaw Lending Corporation, with Atty. Laysa notarizing the deed. Cottam later fully paid the loan, and the mortgage was released, also notarized by Laysa. However, Cottam discovered her titles remained in Laysa’s custody. Laysa refused to release them, presenting instead a statement of account from Aledia for P888,750.00 and demanding its payment.
Atty. Laysa, in her defense, admitted notarizing the first mortgage while counsel for the lending corporation. She claimed that after Aledia defaulted, she assisted him by arranging for her relatives to pay the obligation to prevent foreclosure, leading to a second mortgage in their favor for P650,000.00, executed while the SPA was still valid. Laysa asserted she later paid her relatives when Aledia absconded and that she provided the statement to Cottam to pursue Aledia via Interpol.
ISSUE
Whether the Integrated Bar of the Philippines (IBP) committed a procedural error by issuing a recommendation against Atty. Laysa without conducting a formal investigation where the respondent could be heard.
RULING
Yes. The Supreme Court remanded the case to the IBP for proper proceedings. The Court emphasized that complaints against lawyers require careful investigation to ensure due process. Under Rule 139-B of the Rules of Court, the IBP must conduct a formal investigation when a complaint merits further inquiry beyond the pleadings. The investigator must give the respondent full opportunity to defend, present witnesses, and be heard. An ex parte investigation is permitted only if the respondent fails to appear despite reasonable notice.
In this case, the IBP Board of Governors adopted a commissioner’s report recommending a one-year suspension and notarial revocation without any formal investigation. The records confirmed no such hearing was held, depriving Atty. Laysa of her right to be heard. The procedural safeguards are vital to distinguish meritorious complaints from baseless ones, protecting the innocent from wrongful condemnation. Therefore, the Court set aside the IBP resolution and ordered a remand for a proper investigation in accordance with the rules.