Administrative Case No. 3637 - Rural Bank of Silay, Inc. vs. Pilla

On July 23, 1975, respondent executed a Real Estate Mortgage in favor of the complainant over a parcel of land in Sagay, Negros Occidental, identified by Transfer Certificate of Title No. T-55380.
Respondent purportedly acted as attorney-in-fact for the registered owners, Pedro N. Torres and Oscar D. Granada, by presenting a Special Power of Attorney (Annex “B”) to support his authority to mortgage the property.
The complainant used these documents—specifically the Real Estate Mortgage (Annex “A”) and the Special Power of Attorney—to extend a loan amounting to P91,427.00 to the respondent.

The complainant later discovered that respondent was not authorized by Oscar D. Granada to mortgage the property, as the latter had denied executing the Special Power of Attorney.
Oscar D. Granada filed a civil action (Civil Case No. 1 of the RTC, Branch 60, Negros Occidental) seeking the annulment of the mortgage and the Special Power of Attorney.
The RTC found that the Special Power of Attorney was forged and falsified, noting especially that the signatures of Oscar D. Granada and his spouse were not genuine.
Although the respondent had benefited from the falsified document, he did not appeal the RTC decision, thereby allowing the court’s findings to become final and binding.

Following the respondent’s submission of his comment denying deceit, the matter was referred to the Integrated Bar of the Philippines (IBP) for investigation.
The IBP, through Commissioner Julio C. Elamparo, gathered evidence from both parties, establishing that the respondent had executed and submitted the questionable documents to secure the loan.
Notary public Antonio Pura testified that he notarized the questioned documents after respondent assured him that the signatures were genuine, thereby highlighting the reliance on respondent’s representations.

The matter revealed that respondent’s act of presenting a forged Special Power of Attorney was a misrepresentation and a betrayal of his professional oath as a lawyer.
The respondent failed to explain satisfactorily the origin and authenticity of the documents, nor did he identify the client purported to have provided him with the forged power.
The IBP initially recommended a five-year suspension from the practice of law; however, the Board of Governors modified this penalty to a three-year suspension, as encapsulated in Resolution No. XIV-00-175, dated April 7, 2000.
The final determination highlighted that his misconduct, even though executed in a private transaction, undermined the ethical standards expected of a lawyer.

Whether Atty. Ernesto H. Pilla employed deceit and gross misconduct in securing a loan by presenting a forged and falsified Special Power of Attorney.

Did respondent’s act of mortgaging property with a document that he knew or should have known was forged amount to misrepresentation?
Is his reliance on a commercially motivated transaction sufficient to absolve him of ethical misconduct?

Whether the presumption of involvement in the forgery is applicable when a lawyer benefits from a falsified document without providing a satisfactory explanation.

Should the respondent’s failure to rebut the presumption of complicity—given the benefit he derived from the document—be regarded as a decisive factor for disciplinary sanctions?

Whether the misconduct warrants disbarment or a lesser penalty, such as suspension, in alignment with the provisions of the Code of Professional Responsibility.

Does the nature of the misconduct and its effects on the integrity of the legal profession justify the disciplinary penalty imposed?