A.C. No. 6767 - Recio vs. Fandino

Case Summary (A.C. No. 6767)

Factual Background: ORASCO’s Discovery of Spurious Bail Bonds

Complainant alleged that sometime in early 2003 ORASCO began receiving court orders indicating that ORASCO bail bonds had been issued and subsequently confiscated by branches of the Regional Trial Court (RTC) of Naga and Legazpi and other courts within the fifth Judicial Region, as well as by Municipal Trial Courts (MTCs). ORASCO then wrote to clerks of court in those branches requesting copies of the bail bonds. Upon verification, ORASCO discovered that the bail bonds were fake, simulated, or spurious, based on multiple indicators: the bond form used was not ORASCO’s genuine bail bond form; signatures appearing on the bonds were forgeries because they obviously differed from the signature of ORASCO’s authorized signing officer, Conrado B. Sicat; and a stamped notice on the spurious bonds directed that notices be sent to “RM 303 PNB BLDG. NAGA CITY,” notwithstanding that ORASCO allegedly had no extension office or agency at that address.

Complainant further alleged that Respondent acted as Notary Public for the spurious bonds. She averred that the address stated in the stamped notice corresponded to Respondent’s law office. She also alleged that Respondent signed for and represented himself as counsel for the bondsman ORASCO in several court pleadings, although he was neither appointed as ORASCO’s counsel nor known by ORASCO. To support this narrative, Sheriff Rolando Borja of Naga City executed a sworn affidavit stating that Respondent represented himself as manager and counsel of ORASCO and that he would settle the amount subject of a writ of execution. Complainant asserted a further indication that Respondent solicited and illegally received payments of the bond premiums, emphasizing his admission that he acted as an unauthorized representative or agent of ORASCO. On these bases, she prayed for Respondent’s disbarment due to grave misconduct, gross dishonesty, and conduct unbecoming.

Respondent’s Defense Before the IBP

In his Comment dated September 27, 2005, Respondent claimed that he maintained an insurance business in his office, including the issuance of bail bonds, but that he delegated the business’s operation and management to Jeanette Cruz (Cruz), whom he allegedly shared his office with. Respondent alleged that Cruz conducted her own separate insurance business and maintained offices elsewhere as well. He stated that he once introduced Cruz to a person named Willy Vargas (Vargas) after Vargas referred clients to him, so that Cruz could service Vargas’s business. Respondent insisted that he had no actual participation in transactions Vargas conducted with Cruz regarding ORASCO bonds.

Respondent denied that he was the person who notarized the bonds and argued that he had no knowledge when the bonds were made, accomplished, and issued, asserting that his signature on the bonds was believed to have been affixed by Cruz. He further explained the stamped notice regarding “RM 303 BLDG., NAGA CITY” as a mere convenience made by Cruz in an arrangement with Vargas. As to the pleadings where he appeared as counsel, Respondent admitted that he appeared but claimed it was because Vargas solicited his services, and he argued that Cruz prepared the pleadings. He maintained that he had previously filed motions commonly used for bond liability and related matters, and that these served as patterns for Cruz.

With respect to Sheriff Borja’s affidavit, Respondent denied misrepresentation to the sheriff that he was ORASCO’s manager. He relied on the assertion that ORASCO did not hold office at “RM 303 PNB BLDG., Naga City,” which he believed supported his claim of lack of participation in issuing the subject bonds.

IBP Investigation and Commissioner’s Findings

The Court referred the case to the IBP for investigation and recommendation. The IBP Commissioner, Pedro A. Magpayo, Jr. (Commissioner), in his Report and Recommendation dated March 18, 2009, addressed evidentiary limitations and credibility concerns. He found it difficult to state with a high degree of certainty whether Respondent’s signatures on the bonds were genuine, because the fake bail bonds submitted as evidence were photocopies. The Commissioner noted that such photocopies could not reliably support signature comparison against an acknowledged standard signature of Respondent without risking serious error.

Nevertheless, the Commissioner identified admissions by Respondent that tended to establish culpable participation or negligence. Respondent allegedly acknowledged that: Vargas caused the issuance of the bonds through Cruz; Cruz operated the portion of Respondent’s business delegated to her; Cruz held office in the same law office during the relevant period; and Cruz therefore had free access to notarial records and paraphernalia incident to notarization. The Commissioner concluded that the liberty and facility enjoyed by Cruz provided the opportunity for forging Respondent’s signature. He emphasized that without such access obtained through the association with Respondent, the forging could not have been possible. He likewise opined that Respondent should have exercised prudence and circumspection in his personal dealings with Cruz and Vargas, particularly given ORASCO’s assertion that the bonds were spurious and that the premiums were not remitted to the company.

The Commissioner also linked the alleged falsity of the bonds to the notarial safeguards expected from notaries. He concluded that the spurious ORASCO bonds were made possible on fake bail bond forms furnished by Vargas and accompanied by bogus notarization supplied by Cruz. In the Commissioner’s view, Respondent’s negligence and oversight in allowing Cruz access to notarial tools enabled grave wrongs to ORASCO.

Additionally, the Commissioner treated Respondent’s acts in court as evidentiary of malpractice and negligence. Respondent admitted he signed pleadings or motions manually prepared by Cruz and regularly presented in court regarding bond liability. The Commissioner held that affixing Respondent’s signature to pleadings submitted in cases where ORASCO was the bondsman was equivalent to representing ORASCO in that case, not merely to clerical involvement. This act, coupled with Respondent’s expressed lack of verification, showed lack of prudence.

On these grounds, the Commissioner recommended suspension from the practice of law for six (6) months, citing negligence in failing to secure notarial paraphernalia and in appearing in court without being actually authorized by ORASCO.

IBP Board of Governors’ Adoption and Denial of Reconsideration

The IBP Board of Governors adopted and approved the Report and Recommendation through Resolution No. XIX-2011-182 dated May 14, 2011. Respondent filed a Motion for Reconsideration on August 10, 2011, but the Board denied it through Resolution No. XXI-2014-9021 dated March 21, 2014.

Issues Framed by the Court

The Court had to determine whether Respondent committed negligence and violated the 2004 Rules on Notarial Practice, and whether his conduct constituted malpractice of law and a ground for disciplinary sanction under Section 27 of Rule 138. The Court also had to determine the proper penalty, considering the notarial violations and related misconduct.

Court’s Findings on Negligence and Notarial Rule Violations

The Court affirmed the IBP’s findings with modification on the penalty. It reiterated the disciplinary grounds under Section 27 of Rule 138, including suspension or removal for deceit, malpractice, or other gross misconduct; grossly immoral conduct; violations of the oath required for practice; willful disobedience of lawful court orders; and corruptly or willfully appearing as attorney without authority. The Court characterized Respondent’s conduct as falling within malpractice, emphasizing that the case implicated notarial practice standards and the professional duty of diligence.

Central to the Court’s reasoning was the violation of the 2004 Rules on Notarial Practice, specifically Rule VII, Section 2(a) and (c) on official seal control. Under Section 2(a), every notary public must have an official seal procured at his own expense and not be possessed or owned by any other person. Under Section 2(c), when not in use, the official seal must be kept safe and secure and must be accessible only to the notary public or a person duly authorized by him.

The Court accepted the factual showing in Complainant’s position papers that Cruz was Respondent’s secretary. The Court noted that Cruz had signed an affidavit of service of a motion filed on June 23, 1999 before RTC Branch 22 Naga City. Even taking Respondent’s explanations into account, the Court held that Respondent should not have entrusted everything to his secretary and should not have allowed full access to his notarial paraphernalia, given the sensitivity of notarial responsibilities. The Court concluded that Respondent’s negligence in giving Cruz absolute freedom and access allowed Vargas and Cruz to secure notarization of spurious ORASCO bonds.

The Court further found that Respondent’s conduct in court showed another layer of negligence. Respondent appeared to represent ORASCO by signing pleadings and appearing in court, without verifying Vargas’s authority to ask him to act on ORASCO’s behalf. The Court treated this as an expected professional duty: a lawyer must exercise due diligence to ensure that the party he represents, directly or through purported agents, actually sought his representation. The Court invoked Manila Memorial Park Cemetery, Inc. v. Linsangan to reiterate that persons dealing with an agent are bound at their peril to ascertain not only the fact of agency but also the nature and extent of authority, and that where authority is controverted, the burden lies on the one asserting agency. The Court reasoned that Respondent’s failure to inquire demonstrated negligence and placed him at fault.

Case Syllabus (A.C. No. 6767)

The complainant, Elizabeth Recio, sought the disbarment of Atty. Joselito I. Fandino for grave misconduct, gross dishonesty, and conduct unbecoming of a lawyer.
The Supreme Court resolved the administrative case by affirming the Integrated Bar of the Philippines’ (IBP) findings with modification of the penalty.
The Court applied discipline rules under Rule 138, Section 27 of the Rules of Court and the 2004 Rules on Notarial Practice.

Parties and Procedural Posture

Elizabeth Recio filed an undated Complaint Affidavit against Atty. Joselito I. Fandino.
The Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.
The IBP Commissioner, Pedro A. Magpayo, Jr., issued a Report and Recommendation dated March 18, 2009.
The IBP Board of Governors adopted the recommendation through Resolution No. XIX-2011-182 dated May 14, 2011.
The respondent filed a Motion for Reconsideration dated August 10, 2011, which the IBP Board of Governors denied in Resolution No. XXI-2014-9021 dated March 21, 2014.
The Supreme Court then reviewed the IBP outcome and modified the recommended penalty.

Key Factual Allegations

The complainant alleged that sometime in early 2003, ORASCO began receiving multiple court orders reflecting that its bail bonds had been issued and subsequently confiscated by various RTC and MTC branches in the fifth Judicial Region.
ORASCO requested copies of the bonds, and upon verification, discovered that the bonds were fake, simulated, or spurious.
The complainant identified telltale signs of falsity in the ORASCO bonds, including the use of a non-genuine bail bond form, forged signatures, and an anomalous printed instruction directing notices to an address that ORASCO did not have.
The complainant alleged that the respondent was the Notary Public of the spurious bonds.
The complainant asserted that the address appearing in the notice instruction corresponded to the respondent’s law office.
The complainant alleged that the respondent signed for and misrepresented himself as counsel of the bondsman ORASCO in various pleadings, despite not being appointed and despite ORASCO having no knowledge of his purported representation.
Sheriff Rolando Borja submitted an affidavit stating that the respondent represented himself as manager and counsel of ORASCO and that he would settle the amount subject of execution.
The complainant also alleged strong indications that the respondent solicited and illegally received premium payments for the spurious bonds, based on his alleged status as an unauthorized ORASCO representative or agent.

Respondent’s Defenses

The respondent denied knowledge and participation in the issuance of the spurious ORASCO bonds.
He claimed that he ran an insurance business in his office, with management and operation delegated to Jeanette Cruz (Cruz), with whom he shared the office.
The respondent alleged that Cruz also maintained separate and apart insurance businesses and that she maintained other offices at Legazpi City and Daet, Camarines Norte.
He stated that on one occasion he introduced Willy Vargas (Vargas) to Cruz because Vargas referred clients to him, and he denied actual participation in Vargas’ transactions with Cruz regarding the ORASCO bonds.
He asserted that he was not the one who notarized the bonds and that he had no knowledge regarding their preparation and issuance.
He claimed his signature appearing on the bonds was actually affixed by Cruz.
He contended that the notice stamping directing submissions to a specific address was done merely for convenience under an arrangement made by Cruz with Vargas.
The respondent admitted appearing as counsel in matters involving the bonds, but explained it was only due to Vargas’ solicitation of his services.
He maintained that Cruz prepared the allegations and pleadings and that he signed them when presented for court filing.
He denied misrepresenting himself to the sheriff as ORASCO manager.
He pointed to the sheriff’s own statement that ORASCO had no office at the addressed location as support for his claim of no participation.

IBP Findings and Reasoning

The IBP Commissioner found it difficult to establish with high certainty whether the signatures on the bonds were genuine, because the bonds submitted as evidence were mere photocopies, limiting signature comparison.
The Commissioner noted, however, that the respondent quickly admitted that the bonds were issued by Vargas through Cruz.
The Commissioner credited the evidence suggesting Cruz’s close relationship to the respondent’s notarial and office operations, including Cruz’s role as secretary.
The Commissioner reasoned that Cruz had free access to the respondent’s notarial records and paraphernalia due to her position as office associate and co-occupant during the relevant period.
The Commissioner concluded that such freedom and access provided the opportunity for Cruz and Vargas to commit forgery.
The Commissioner further held that the respon