A.C. No. 8708 - Spouses Saunders vs. Pagano-Calde

Complainants, spouses Byron and Maria Luisa Saunders, engaged respondent Atty. Lyssa Grace S. Pagano-Calde for the sale of a property located at 1 Tacay Road, Quezon Hill, Baguio City (subject property), which was registered in the name of Virgilio J. Gaerlan.
Respondent was further retained to represent the complainants in a separate case involving the partition of the subject property.

On January 12, 2005, a purported Deed of Conditional Sale was executed involving complainant Maria Luisa and her brother Virgilio, with their mother, Adelia J. Gaerlan, acting as Virgilio’s attorney-in-fact.
In connection with this transaction, complainants remitted two types of payments to respondent:

P500,000 as a partial payment of the purchase price to be held in trust for Adelia.
P60,000 for various expenses, which included P30,000 for the publication of summons, P15,000 for commissioneras fee, and P15,000 for the preparation of Adelia’s last will and testament.

The conditional sale stipulated that if the vendee failed to complete full payment by October 31, 2005, the partial payment would be forfeited in favor of the vendor.

The sale did not materialize, leading to the initiation of a partition case over the subject property.
In or around 2007, the complainants demanded the return of the remitted funds (P500,000 along with the fees).
Respondent initially claimed that the money was placed in a term deposit, yet failed to provide documentary proof or engage in any substantive meeting with the complainants regarding the matter.
Alternatively, respondent asserted that on November 14, 2005, the P500,000 had already been delivered to Adelia, presenting an Acknowledgment Receipt supposedly signed by Adelia as evidence.
Complainants contested this claim by noting that the Acknowledgment Receipt was produced only after the filing of a criminal case for estafa against respondent, and further, Adelia herself denied receiving any such amount via her affidavit.
The National Bureau of Investigation (NBI) released a Questioned Documents Report on October 28, 2008, revealing discrepancies between the specimen signature of Adelia and the one on the Acknowledgment Receipt.
Amid these conflicting allegations, complainants also filed a complaint with the Integrated Bar of the Philippines (IBP), Baguio-Benguet Chapter, which led to a referral of the case to the IBP Commission on Bar Discipline (IBP-CBD).

The IBP-CBD, after a series of postponements and the resolution to file Position Papers by the parties, noted that the allegations between complainants and respondent were diametrically opposed, especially given the concurrent criminal case for estafa.
Given that the central issue in the administrative case was whether respondent had indeed delivered the P500,000 to Adelia, the IBP-CBD advised that the case be dismissed without prejudice until the criminal estafa case was fully resolved.
On February 26, 2010, the Board of Governors of the IBP adopted and approved the IBP-CBD’s Report and Recommendation based on the evidence on record and applicable legal standards.

Whether Atty. Lyssa Grace S. Pagano-Calde misappropriated the funds (P500,000 and associated fees) held in trust for her clients.
Whether respondent’s claim that the money was delivered to Adelia in compliance with the Deed of Conditional Sale is credible, particularly in view of the revocation of Adelia’s authority by Virgilio.
Whether the discrepancies regarding the production of the Acknowledgment Receipt weaken respondent’s defense.
Whether it is appropriate to determine respondent’s administrative liability independently of the pending criminal estafa case.
Whether respondent’s inaction—such as failing to communicate adequately with her clients about the status of the funds—constitutes a breach of her professional responsibilities under the Code of Professional Responsibility.