A.C. No. 13628 - Paez vs. Debuque

Case Summary (A.C. No. 13628)

Petitioner’s Transactional Background and Appointment of Attorney‑in‑Fact

Paez faced foreclosure of the mortgaged property and decided to sell it to Atty. Debuque, with the understanding that he would first pay the Rural Bank to extinguish the mortgage. While detained, Paez appointed her sister, Rezano, as her attorney‑in‑fact to handle dealings concerning the sale.

Deeds of Sale — Terms and Variations

Three different deeds of sale were executed or appear in the record: (1) a “Deed of Absolute Sale with Assignment of Mortgage” (first deed) reflecting a total consideration of PHP 500,000, with PHP 300,000 payable to the Rural Bank and PHP 200,000 payable to Paez; (2) a “Deed of Absolute Sale” (second deed) reflecting a purchase price of PHP 300,000 payable solely to Paez, with Paez to shoulder capital gains tax, documentary stamp tax, transfer tax, and current real property tax; and (3) a third “Deed of Absolute Sale” executed with only Paez’s signature and containing terms identical to the second deed (PHP 300,000 and tax obligations borne by Paez).

Parties’ Divergent Accounts Concerning Payment and the Deeds

Paez’s account: the original consideration was PHP 500,000 (300k to bank; 200k to her), which was later reduced to PHP 300,000 payable solely to her; she never received payment during incarceration and discovered upon release that a deed (the first deed) was on record, purporting to divest her interest. Rezano confronted Atty. Debuque, who denied existence of the first deed and showed the second deed, but refused to pay the remaining balance. Atty. Debuque’s account: he asserted payment in installments (variously alleged totals and balances in multiple filings). In separate pleadings he claimed having paid PHP 250,000 (Answer dated Nov. 29, 2012), later averred full payment of PHP 300,000 in installments through 2009 (Answer dated May 22, 2013), then in other submissions asserted installment payments leaving a balance of PHP 28,870 with PHP 171,430 paid. He admitted advising Rezano to prepare another deed to avoid penalties on unpaid taxes and agreed to pay notarization costs. He produced photocopied receipts for payments made to persons other than Paez or Rezano.

Investigatory Proceedings and IBP Findings

Investigating Commissioner Joel L. Bodegon, in a Report and Recommendation dated May 5, 2014, found Atty. Debuque liable for violation of Canon 1, Rule 1.01 of the Code of Professional Responsibility for engaging in unlawful, dishonest, immoral, or deceitful conduct. The Commissioner emphasized fabrication and presentation of conflicting deeds reflecting different purchase prices and contradictory statements about payment. The Investigating Commissioner recommended one year suspension. The IBP Board of Governors adopted that Report and Recommendation, denied respondent’s motion for reconsideration, and increased the recommended penalty to suspension for three years, citing taking “undue advantage” of Paez’s incarcerated status.

Applicable Law and Standards Employed by the Court

Because the Court’s decision date is after 1990, the Court applied the 1987 Constitution as the institutional foundation for the practice of law and ethical regulation. The disciplinary evaluation invoked: (a) the Code of Professional Responsibility (CPR), specifically Canon I, Rule 1.01 (prohibition against unlawful, dishonest, immoral or deceitful conduct); and (b) the Code of Professional Responsibility and Accountability (CPRA), which the Court approved on April 11, 2023 and applied to pending cases where its retroactivity does not work injustice. Relevant CPRA provisions cited include Canon II, Section 1 (Proper conduct), Section 2 (Dignified conduct), Section 5 (Observance of fairness and obedience), and Section 11 (False representations or statements; duty to correct). The classification of offenses and sanctions in Canon VI (Sections 33, 34, 35 and Section 37 on sanctions) was used to characterize and penalize respondent’s conduct. The Court also relied on prior jurisprudence cited in the record (Manalang v. Atty. Buendia; Saladaga v. Atty. Astorga; Flores v. Atty. Delos Santos; Lim v. Atty. Mandagan) to articulate standards on professional ethics, definitions of dishonesty/deceit, gross misconduct, and the limited remedial scope of disciplinary proceedings.

Court’s Factual and Legal Analysis of Respondent’s Conduct

The Court found multiple indicia of dishonest and deceitful conduct by Atty. Debuque: the existence of differing deeds purporting to cover the same realty with inconsistent purchase prices; his admission that he advised Rezano to prepare the second deed to avoid tax penalties and agreed to pay notarization costs; his contradictory sworn and unsworn statements across multiple pleadings about the amount and timing of payments; production of photocopies rather than originals of receipts; alleged payments made to third persons rather than to Paez or her attorney‑in‑fact; and his own admission that, even by his account, a balance (PHP 28,870) remained outstanding. The Court emphasized that deceit requires either knowledge of falsity or reckless and conscious ignorance, especially when the victim is at a disadvantage (here, Paez’s incarceration). The combination of fabricated or inconsistent documentary instruments and inconsistent factual claims, together with taking advantage of Paez’s distressed circumstances, met the CPRA’s definition of serious offenses (gross misconduct, serious dishonesty, fraud or deceit, falsification of documents).

Conclusion on Administrative Liability and Sanction Imposed

The Court concluded that respondent violated Canon II, Section 1 of the CPRA (reiterating

Case Syllabus (A.C. No. 13628)

Procedural Posture and Relief Sought

Verified Complaint filed by petitioner Helen A. Paez against respondent Atty. Alfonso D. Debuque for violation of the Code of Professional Responsibility (CPR) and the Lawyer's Oath. (Rollo, pp. 3–5.)
Matter resolved En Banc (A.C. No. 13628, May 28, 2024) with decision by Justice Dimaampao.
Investigative and disciplinary processes: IBP Investigating Commissioner prepared a Report and Recommendation; IBP Board of Governors adopted and approved the recommendation; respondent moved for reconsideration which was denied; the case was brought before the Court for final disposition. (Rollo, pp. 130–145, 191–195.)

Subject Property and Background Facts

Subject realty: an 800-square-meter lot covered by Transfer Certificate of Title No. T-210051 located in Barangay Pagduque, Dumangas, Iloilo. (Rollo, p. 89.)
The property was mortgaged to the Rural Bank of Dumangas to secure Paez’s loan in the amount of PHP 300,000.00 and was in danger of foreclosure. (Rollo, pp. 89; 131, IBP Report and Recommendation.)
While Paez was incarcerated at the Pasay City Jail, she decided to sell the subject realty to Atty. Debuque; part of their agreement was that he would first pay her loan with the Rural Bank. (Rollo, pp. 131; 83, 94.)

Deeds of Sale: Nature, Terms, and Sequence

Three deeds of sale appear in the records, each with differing terms and signatories:
- First deed: “Deed of Absolute Sale with Assignment of Mortgage”—stated total consideration PHP 500,000.00; PHP 300,000.00 to be paid to the Rural Bank to cover the mortgage loan and PHP 200,000.00 to be paid to Paez. (Rollo, pp. 104–105.)
- Second deed: “Deed of Absolute Sale”—stated purchase price PHP 300,000.00, payable solely to Paez; Paez to pay capital gains tax, documentary stamp tax, transfer tax, and current real property tax. (Rollo, pp. 30–31.)
- Third deed: “Deed of Absolute Sale”—executed later with only Paez’s signature affixed; terms same as the second deed regarding PHP 300,000.00 purchase price and Paez’s obligation to pay taxes. (Rollo, pp. 32–33, 106–107.)

Parties’ Allegations, Admissions and Chronology of Events

Paez’s narrative:
- Initially, under the first deed, consideration was PHP 500,000.00 (PHP 300,000.00 to Rural Bank; PHP 200,000.00 to Paez), later reduced to PHP 300,000.00 payable solely to her. (Rollo, pp. 83–84.)
- Appointed her sister Raylene Paez‑Rezano as attorney-in-fact for the sale while detained. (Rollo, p. 29.)
- Atty. Debuque agreed to pay the remaining balance but failed to do so; requested that Paez prepare a deed of sale so he could send full payment; Paez prepared, signed, and sent the third deed but never received payment while incarcerated. (Rollo, pp. 131–133.)
- Upon release, Paez discovered the first deed from the Rural Bank indicating she no longer had interest; when she confronted Atty. Debuque he denied the first deed’s existence, showed her the second deed between Paez and Rezano, and refused to pay the remaining balance. (Rollo, p. 132.)
Atty. Debuque’s narrative and admissions in pleadings:
- Filed two Answers on different dates (November 29, 2012 and May 22, 2013) with differing averments regarding payment. (Rollo, pp. 25–26; 38–41.)
- In his November 29, 2012 Answer claimed payment of PHP 250,000.00 and admitted advising Rezano to prepare another deed to avoid taxes and agreeing to pay its notarization. (Rollo, pp. 25–26.)
- In his May 22, 2013 Answer averred he had “already paid completely in [installment] basis until the year 2009 the total consideration of . . . [PHP] 300,000.00.” (Rollo, p. 39.)
- In his November 29, 2013 Reply and Comment, he claimed no knowledge of the execution of the third deed (the PHP 300,000.00 deed) and asserted that Paez executed it to evade taxes. (Rollo, p. 121.)
- In his Position Paper he stated the remaining balance was PHP 200,000.00, of which PHP 171,430.00 was paid in installments, leaving a balance of PHP 28,870.00. (Rollo, pp. 92–100, 98.)

Evidentiary and Credibility Issues Identified in the Record

Existence of multiple deeds of sale covering the same subject realty with inconsistent purchase prices and signatories raised serious questions.
Atty. Debuque admitted advising Rezano to prepare another deed of sale (the second deed) to avoid penalties on unpaid taxes and agreed to pay for notarization. (Rollo, p. 26.)
Atty. Debuque’s claims and documentary submissions:
- He attached receipts to support payments but admitted those receipts were mere photocopies, calling their admissibility into issue. (Rollo, p. 152.)
- Payments were allegedly made to different persons other than Paez and Rezano, casting doubt on the claim of full payment. (Rollo, pp. 152; 46.)
- His own admission leaving a balance of PHP 28,870.00 contradicted assertions of full payment. (Rollo, p. 98; 47.)

IBP Investigation, Findings, and Recommended Penalty

Investigating Commissioner Joel L. Bodegon’s Report and Recommendation dated May 5, 2014 found respondent liable for violation of Canon I, Rule 1.01 of th
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