A.C. No. 13361 - Lacida vs. Subejano

Henry G. Lacida (complainant) filed a complaint for disbarment against Atty. Rejoice S. Subejano (respondent) on behalf of Megamitch Financial Resources Corporation (Megamitch).
The complaint arose in connection to a loan obtained by respondent from Megamitch.

On January 19, 2015, respondent and Alejandro Rentillosa applied for a PHP 15,000,000 loan from Megamitch to augment their aggregate business capital in Iligan City and Lanao del Norte.
At that time, respondent was a founding partner of Subejano & Ditucalan (SD Law), the retained legal counsel of Megamitch.
Respondent allegedly leveraged his personal relationship with Megamitch's CEO, Alain De Schouwer, and misrepresented their engagement in the sand and gravel business to secure the loan.

De Schouwer authorized the release of PHP 11,679,900 under an understanding that respondent would later execute a loan contract and provide security.
Respondent later submitted a Loan Contract with Chattel Mortgage deemed unacceptable by Megamitch.
Megamitch discovered no business records for respondent in Iligan City, undermining his representations.
Megamitch refused to release the balance and demanded return of funds already released.
Respondent failed to comply, leading to a criminal Estafa case and the disbarment complaint.

Respondent admitted obtaining a loan from Megamitch and repaying an earlier PHP 500,000 loan in 2016.
Denied misrepresentation or deceit; asserted submission of a business proposal and feasibility study evaluated by Megamitch.
Claimed loan proceeds used to purchase heavy equipment inspected by Megamitch.
Admitted failure to fully comply with repayments due to political climate causing business failure.
Maintained he was not evading obligations and was attempting repayment.

Investigating Commissioner Rebecca Villanueva-Maala found respondent guilty of violating Canon 16, Rule 16.04 of the Code of Professional Responsibility (CPR) about lawyers borrowing from clients.
Recommended a five-year suspension.
IBP Board of Governors adopted findings but reduced penalty to six months suspension.
Respondent filed motions for reconsideration, arguing non-involvement as personal borrower, independent advice protected Megamitch's interests, and attached a Compromise Agreement.
Complainant raised no objection and prayed respondent not be penalized to enable compliance.
IBP-BOG granted reconsideration and recommended dismissal.

Court adopted IBP-BOG recommendation to dismiss complaint.
Applied the new Code of Professional Responsibility and Accountability (CPRA) retroactively.
Held that loan transaction was a standard commercial transaction, with existing prior business relations and protected interests.
Found lack of substantial evidence of abuse of trust or misrepresentation.
Declined to revive complaint even if compromise agreement is breached.

Whether the respondent violated the prohibition against borrowing money from his client under the Code of Professional Responsibility and Accountability.
Whether the loan transaction was tainted with deceit, misrepresentation, or abuse of trust warranting administrative sanction.
Whether the complaint for disbarment should be dismissed or sanctions imposed on respondent.