Facts:

The case involves Florencio A. Saladaga as the complainant and Atty. Arturo B. Astorga as the respondent. The events leading to the case began on December 2, 1981, when Astorga executed a "Deed of Sale with Right to Repurchase" in favor of Saladaga, selling a parcel of coconut land located in Barangay Bunga, Baybay, Leyte, for P15,000.00. In this deed, Astorga represented that he had the perfect right to sell the property and that it was free from any liens or encumbrances. The deed stipulated that Astorga had two years to repurchase the property, failing which the parties would renew the agreement. However, Astorga did not exercise his right to repurchase within the specified period, and Saladaga sent a final demand for repurchase on May 10, 1984, which went unanswered.

In December 1989, Saladaga received letters from the Rural Bank of Albuera, Inc. (RBAI), informing him that the property had been mortgaged by Astorga and subsequently foreclosed. Saladaga discove...

Facts:

Transaction Details

Complainant Florencio A. Saladaga and respondent Atty. Arturo B. Astorga entered into a "Deed of Sale with Right to Repurchase" on December 2, 1981. Respondent sold (with the right to repurchase) a parcel of coconut land located at Barangay Bunga, Baybay, Leyte, covered by Transfer Certificate of Title (TCT) No. T-662, for P15,000.00. Respondent represented that he had "the perfect right to dispose as owner in fee simple" the property and that it was "free from all liens and encumbrances." The deed provided that respondent had two years to repurchase the property, failing which the parties were to renew the agreement.

Failure to Repurchase

Respondent failed to repurchase the property within the stipulated period, and no renewal of the contract occurred despite complainant’s final demand on May 10, 1984. Complainant remained in possession of the property until December 1989, when he received letters from the Rural Bank of Albuera (RBAI) informing him that the property had been mortgaged by respondent, foreclosed, and that complainant must vacate.

Investigation Findings

Complainant discovered that:

1. 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 proceedings.
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 deed of sale between PNB and respondent dated March 27, 1979.
3. Respondent mortgaged the property to RBAI on March 14, 1984, leading to foreclosure and the issuance of TCT No. TP-10635 on March 27, 1991.
   Complainant was subsequently dispossessed of the property.

Criminal and Administrative Complaints

Complainant filed a criminal complaint for estafa against respondent, which led to the filing of an Information before the Municipal Trial Court (MTC) of Baybay, Leyte. Separately, complainant filed administrative cases (A.C. No. 4697 and A.C. No. 4728) seeking respondent’s disbarment. The administrative cases were referred to the Integrated Bar of the Philippines (IBP).

Respondent’s Defense

Respondent argued that the agreement was an equitable mortgage, not a sale with pacto de retro, and that complainant should account for the produce from the land, which would exceed the P15,000.00 consideration.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Violation of the Lawyer’s Oath and Code of Professional Responsibility:

   • Respondent’s actions, including misrepresenting the status of the property and failing to draft a clear agreement, demonstrated dishonesty, deceit, and a lack of legal competence.
   • He violated Canon 1 and Rule 1.01 of the Code of Professional Responsibility, which require lawyers to uphold the law, act with honesty, and avoid deceitful conduct.

2. Disregard for Court Directives:

   • Respondent’s repeated failure to comply with Court and IBP directives caused undue delay in the resolution of the case, violating Canon 11 and Rule 12.03 of the Code of Professional Responsibility.

3. Suspension as Appropriate Sanction:

   • Given the gravity of respondent’s actions, a two-year suspension was deemed appropriate to protect the integrity of the legal profession.

4. Civil Liability Not Addressed in Administrative Proceedings:

   • The Court declined to order the return of the P15,000.00, as this issue pertains to civil liability and should be resolved in a separate civil or criminal case.