Title
Caballero vs. Sampana
Case
A.C. No. 10699
Decision Date
Oct 6, 2020
GSIS housing unit transferred to respondent, who defaulted on payments, leading to disbarment for gross misconduct and dishonesty under the Code of Professional Responsibility.
disbarment
unlawfully assuming ownership
real property
A

Case Summary (G.R. No. 187490)

Factual Background

On January 31, 1995, the Government Service Insurance System (GSIS) awarded the complainant a low-cost housing unit and extended a real estate loan of P216,000 with monthly amortizations of P2,584.44 for 25 years. On January 27, 1997, because of financial difficulties, the complainant transferred his rights in the property to the respondent for P60,000, on the condition that the respondent would assume the remaining loan obligations. The parties executed a Deed of Transfer of Rights memorializing the respondent’s agreement to assume the obligations under the GSIS Deed of Conditional Sale.

GSIS Correspondence and Accumulating Arrearages

GSIS correspondence first showed a substantial increase in the loan balance on August 31, 2004, when the account had risen to P609,004.68 with arrearages of P415,181.09. Further notices followed: an August 27, 2009 bill reflected P1,166,017.57; an August 31, 2010 Statement of Account reflected arrearages of P1,497,331.50; and a Final Demand dated November 3, 2014 notified the complainant that unpaid obligations had reached P2,980,183.80 as of August 31, 2014.

Attempts to Resolve and Alleged Promises

After receiving the 2004 GSIS letter, the complainant personally informed the respondent and was told that the respondent would pay and transfer the account to his name. The complainant again sought resolution in 2009 and ultimately notified GSIS of his intent to surrender the property in October 2009. On June 23, 2010, the parties met with GSIS; the complainant signed a waiver to facilitate cancellation and the respondent agreed to purchase the property by a ten percent down payment of its assessed value and installments for the balance. On July 6, 2010, GSIS cancelled the Deed of Conditional Sale for failure to settle the arrears. The complainant executed an Affidavit of Waiver on January 28, 2011 relinquishing his rights in favor of the respondent, but the loan continued to balloon and the property remained occupied, from which the record shows the respondent collected rental income.

Complaint and Initial Proceedings

The complainant filed an administrative affidavit-complaint on November 3, 2014, alleging that the respondent’s empty promises, misrepresentations, and deceit in assuming the GSIS obligation caused the loan to balloon and jeopardized the complainant’s retirement benefits. The Court directed the respondent to file a Comment on February 9, 2015; the respondent filed his Comment on March 30, 2015, denying dishonesty and claiming that he accepted the transfer only to assist the complainant and that the complainant would continue making the monthly amortizations.

Referral to the Integrated Bar of the Philippines

By Resolution dated August 12, 2015, the Court referred the matter to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. Commissioner Eduardo R. Robles found respondent’s conduct violative of Rule 1.01 and recommended reprimand. The IBP Board of Governors, however, on November 28, 2017 adopted the findings but upgraded the penalty to suspension from the practice of law for six months and directed an extended resolution explaining that modification. Commissioner Jose Villanueva Cabrera, in an Extended Resolution dated September 7, 2018, endorsed a stiffer penalty based on findings of respondent’s deceit, profiteering from the property by leasing and collecting rents, and willful refusal to comply with assumed obligations.

The Court’s Review and Findings of Fact

The Court reviewed the record in full and adopted, with modifications, the IBP’s factual findings. The Court found credible evidence that the respondent expressly obligated himself to assume the complainant’s loan obligations under the Deed of Transfer of Rights and thereafter failed to fulfill those obligations despite repeated reminders. The Court rejected the respondent’s denial that he had assumed the payments, noting that the complainant transferred his rights precisely because of financial incapacity to pay and that the respondent’s contrary account was unreasonable.

Findings on Dishonesty and Gross Misconduct

The Court concluded that the respondent’s conduct constituted dishonesty and gross misconduct in breach of Rule 1.01. The respondent’s claimed inadvertence and failure of notice were found to be self-serving and unsupported by the record. The Court further observed that the respondent had been collecting rent from the property and thereby profited while allowing the GSIS debt to escalate, conduct that was prejudicial to the complainant and to the integrity of the legal profession.

Consideration of Prior Discipline

The Court took into account the respondent’s disciplinary history. The respondent had previously been disciplined in Lising v. Sampana, A.C. No. 7958, March 3, 2014 (Minute Resolution) for a double sale and suspended for one year, and in Nery v. Sampana, 742 Phil. 531 (2014), wherein he was suspended for three years for mishandling client funds and failing to file pleadings. The Court found t

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