A.C. No. 12280 - Ricardo, Jr. vs. Go

Edwin Jet M. Ricardo, Jr. (complainant) filed an administrative complaint for malpractice or unethical conduct against Atty. Wendell L. Go (respondent).
The charges include that respondent improperly acquired an interest in a property under litigation and extorted money by sending a demand letter for rentals.

The subject property is a house and lot in Banawa, Cebu City, originally registered under TCT No. 58099 in the names of Spouses Edwin Ricardo, Sr. and Divinagracia Ricardo.
On June 13, 1997, the spouses executed a real estate mortgage over the property in favor of Standard Chartered Bank to secure a credit line agreement.
Upon default by the spouses, Standard Chartered, represented by its counsel (Atty. Mark Anthony P. Lim of the Go & Lim Offices, respondent’s law firm), initiated extrajudicial foreclosure proceedings.

The property was auctioned on May 22, 2006, with Integrated Credit and Corporate Services Co. (ICCSC) emerging as the highest bidder.
A certificate of sale was issued on May 23, 2006, and subsequently registered and annotated on the original TCT on May 24, 2006.
Following failure to redeem, ICCSC consolidated its ownership; a new title (TCT No. 189957) was then issued in its name.

On May 30, 2007, complainant and his brother filed a complaint (Civil Case No. CEB-33420, RTC Branch 10) for annulment/reformation of contract among other causes, contesting the validity of the mortgage executed by their parents without their consent.
The case expanded to include ICCSC as an additional defendant and also challenged the consolidation of ownership.
The RTC found that:

The spouses’ mortgage did not constitute a “family home” in the legal sense.
The complainant and his brother were not beneficiaries nor dependent on the parents for legal support, thus having no standing to challenge the mortgage.

While Civil Case No. CEB-33420 was pending, ICCSC filed for an ex parte issuance of a writ of possession (LRC Case No. 3732, RTC Branch 16), which was granted on November 16, 2011.
Complainant and his brother sought to intervene in LRC Case No. 3732 in order to question the validity of the mortgage and assert their rights over the property; their motion for intervention was denied on November 7, 2012, and subsequent motions for reconsideration were also denied by the RTC and later affirmed by the Court of Appeals.
Several resolutions and decisions were rendered over the period, including decisions in the CA (e.g., Resolution dated April 24, 2012; Decision dated July 31, 2015; and other reconsideration orders up to October 19, 2016) that maintained the lower court’s rulings.

On April 1, 2017, ICCSC, as seller, and respondent, as buyer, executed a Deed of Absolute Sale for the subject property.
The transfer was finalized on October 12, 2017, with TCT No. 107-2017005446 issued in respondent’s name.
Although later participating in LRC Case No. 3732 as collaborating counsel for ICCSC, respondent emphasizes that his acquisition occurred prior to such involvement.

Complainant alleges that there was connivance among Standard Chartered, ICCSC, and respondent, implicating unethical conduct by respondent via his prior role as counsel in foreclosure and later in the writ of possession proceedings.
It is further alleged that respondent’s sending of a rental demand letter in February 2018 amounted to extortion.
In his comment, respondent denies these allegations, stating that:

His acquisition of the property occurred before his participation as collaborating counsel for ICCSC.
As the legal owner, he was within his rights to seek recovery of possession and demand payment for rentals.
The prohibition under Article 1491(5) of the Civil Code, which restricts lawyers from acquiring property involved in litigation they participate in, is inapplicable given the timing of his acquisition.

Whether respondent, by acquiring an interest in the subject property, violated the ethical prohibition under Article 1491(5) of the Civil Code.
Whether the participation of respondent as collaborating counsel for ICCSC in LRC Case No. 3732 constituted unethical conduct in light of his property acquisition.
Whether the timing of respondent’s property acquisition (prior to his involvement as counsel in the litigation) exempts him from the restrictions under Article 1491(5).
Whether sending a demand letter for payment of rentals by respondent amounts to extortion.