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Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

A.C. No. 5955               September 8, 2009

JOHN CHRISTEN S. HEGNA, Complainant,
vs.
ATTY. GOERING G.C. PADERANGA, Respondent.

D E C I S I O N

DEL CASTILLO, J.:

Before this Court is a letter-complaint¹ dated June 3, 2002, filed by complainant John Christen S. Hegna with the Office of the Bar Confidant (OBC) against respondent Atty. Goering G.C. Paderanga for deliberately falsifying documents, which caused delay in the execution of the decision rendered by the Municipal Trial Courts in Cities (MTCC), Branch 8, Cebu City, in Civil Case No. R-45146, entitled John Hegna v. Mr. & Mrs. Eliseo Panaguinip.

Herein complainant was the lessee of a portion of Lot No. 5529, situated at Barangay Quiot Pardo, Cebu City, which was owned by the heirs of Sabina Baclayon. The heirs of Baclayon, through their representative Gema Sabandija, entered into a contract of lease with complainant for a period of ten (10) years, commencing from June 26, 1994, with a rental of ₱3,000.00 per year, or ₱250.00 per month.

On September 26, 2001, complainant filed a complaint for forcible entry against therein defendants docketed as Civil Case No. R-45146, entitled John Hegna v. Mr. & Mrs. Eliseo Panaguinip, with the Municipal Trial Court in Cities (MTCC), Branch 8 of Cebu City. In said complaint, he alleged that in about the second week of March 1996, therein defendants entered the vacant portion of the leased premises by means of force, intimidation, threat, strategy or stealth; destroyed the barbed wire enclosing the leased premises of complainant, then built a shop on the said premises without complainant’s consent. He averred that despite his demands upon therein defendants to vacate the premises and demolish the structure built thereon, the latter failed and refused to comply.²

When therein defendants failed to file their Answer, complainant filed a motion that judgment be rendered in default.

On December 21, 2001, the MTCC rendered a Decision in favor of complainant, ordering therein defendants to vacate the leased premises and to pay complainant compensatory damages for illegal occupation and use of the subject property, as well as attorney’s fees and costs of suit. The dispositive portion of the decision reads as follows:

WHEREFORE, this Court directs judgment against Defendants MR. & MRS. ELISEO PANAGUINIP and directs them to vacate Lot No. 5529 over the portion in an area of 1,596 square meters thereof, as leased to herein Plaintiff, situated at Barangay Quiot Pardo, Cebu City, and to pay Plaintiff the sum of PESOS: ONE THOUSAND (₱1,000) per month from the second week of March 1996 until the present date by way of compensatory damages for the illegal occupation and use of the contested property, subject to 12% annual legal interest until fully paid, and thereafter pay the same amount per month until they vacate the subject property hereof, and to further pay Plaintiff the sum of ₱5,000.00 by way of Attorney’s Fees, and the costs of this suit.

SO ORDERED.³

On February 8, 2002, the MTCC granted the Motion for Execution of Judgment filed by complainant, and issued a Writ of Execution on February 18, 2002.

On February 21, 2002, Sheriff Edilberto Suarin of the MTCC, Branch 8 of Cebu City levied on certain personal properties of therein defendants.⁴

On March 1, 2002, therein defendants requested the complainant to move for the dismissal of the complaint against them so as to prevent the issuance of the writ of execution thereon. While therein defendants wanted to amicably settle the case, however, they failed to mention the proposed settlement amount stated in the decision dated December 21, 2001.

Subsequently, respondent Atty. Goering G.C. Paderanga filed an Affidavit of Third-Party Claim⁵ dated March 5, 2002 before Sheriff Suarin, the sheriff executing the judgment in the said civil case. In the said affidavit, respondent claimed that he was the owner of Lot No. 3653-D-1 and a FUSO (Canter series) vehicle, which he bought from therein defendants on November 27, 2001,⁶ and December 12, 2001,⁷ respectively, both of which could be erroneously levied by a writ of execution issued in the civil case.

On April 3, 2002, Sheriff Suarin tried to levy therein defendants’ parcel of land and motor vehicle, but failed to do so because of the third- party claim filed by respondent.⁸ Subsequently, on April 24, 2002, respondent filed a Complaint⁹ for Annulment of Judgment with prayer for the issuance of an injunction and temporary restraining order (TRO) with damages against complainant before the Regional Trial Court (RTC), Branch 13 of Cebu City, docketed as Case No. CEB-27614, entitled Mr. Eliseo Panaguinip, Mrs. Ma. Teresa Panaguinip and Goering G.C. Paderanga v. John Hegna, Mila Hegna, Judge Edgemelo C. Rosales and Edilberto R. Suarin.

In an Order¹⁰ dated May 13, 2002, the RTC issued a writ of preliminary injunction enjoining the MTCC to desist from further proceeding with the civil case, and the Sheriff to desist from conducting a public auction of the levied properties of therein defendants. The RTC subsequently dismissed respondent’s complaint for annulment of judgment in its Decision¹¹ dated June 29, 2006.

In a letter dated June 3, 2002, filed with the OBC, complainant alleged that he was filing a complaint against respondent for "deliberately falsifying documents, causing delay and a possible denial of justice to be served in Civil Case No. R-45146." He alleged that after the decision in the said civil case was rendered, therein defendants called him on the telephone, requesting the stay of the execution of judgment, as the latter would be settling their accounts within ten days, but they failed to comply.

On March 14, 2003, complainant filed a criminal complaint¹² for falsification of public documents against respondent; false testimony and perjury against therein defendants; and falsification under paragraph 6, Article 171 of the Revised Penal Code against Atty. Elena Marie Madarang, notary public, before the Office of the City Prosecutor of Cebu City. Anent the complaint against respondent, complainant averred that the third-party claim was full of irregularities, to wit: (a) the Deed of Absolute Sale involving Lot No. 3653-D-1, covered by TCT No. T-11127, dated November 27, 2001, had no record of transfer in the Register of Deeds of Cebu City; (b) the registration of the motor vehicle allegedly owned by respondent by virtue of the Deed of Absolute Sale dated December 21, 2001 did not reflect any change of ownership from May 4, 2001; (c) the two Deeds of Absolute Sale dated November 27, 2001 and December 21, 2001 showed that both were notarized under Series of 2000 of the notary public; (d) Notarial Register No. 177 on page 37, Book II showed erasures and tampering done by substituting the intended entry of Joint Affidavit of Two Disinterested Person to a Deed of Absolute Sale under the names of the spouses Eliseo and Ma. Teresa Panaguinip, therein defendants, representing the sale of Lot No. 3653-D-1 under TCT No. 11127; and Notarial Register No. 188 on Page 39, Book II of Atty. Madarang also had tampering and erasures, as the entry of Affidavit of Loss was substituted with a Deed of Absolute Sale under the name of Ma. Teresa Panaguinip representing the sale of the FUSO (Canter series); and (e) the Community Tax Certificate number appearing in both Deeds of Absolute Sale was actually issued to another person, not to therein defendant Ma. Teresa Panaguinip.

On April 28, 2003, the Office of the City Prosecutor of Cebu City dismissed the criminal complaint for falsification of public documents against respondent for lack of prima facie evidence of guilt, as the allegations therein were similar to the instant administrative complaint.¹³

In his Comment¹⁴ dated April 29, 2003 on the administrative complaint filed against him, respondent argued that he did not falsify any document and maintained that he had already satisfactorily explained the irregularities before the Office of the City Prosecutor. He added that the genuineness and due execution of the deeds of sale had not been affected by the fact that he failed to register the same. Also, he alleged that the MTCC Decision dated December 21, 2001 was unjust and void due to lack of jurisdiction, and for being based on spurious claims.

In a Resolution¹⁵ dated July 9, 2003, the Court referred the administrative complaint to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation/decision within ninety (90) days from receipt of the record.

On November 21, 2003, the parties appeared in a mandatory preliminary conference and, upon termination thereof, were ordered to submit their respective verified position papers within ten (10) days, after which the case would be deemed submitted for resolution.¹⁶ Complainant and respondent submitted their position papers on December 11, 2003,¹⁷ and December 2, 2003,¹⁸ respectively.

On June 1, 2005, the Investigating Commissioner of the IBP submitted his Report and Recommendation, which contained the following observations:

III. FINDINGS:

Based on the resolution of the City Prosecutor’s office in Cebu City, the complaint against the Panaguinip spouses and Attys. Paderanga and Madarang (the notary public) was dismissed for lack of prima facie of guilt. Such resolution is accorded great weight but certainly not conclusive considering the administrative nature of this instant complaint. In criminal prosecutions, a prima facie evidence is necessary but in this instant case, substantial evidence is all that [is] necessary to support a guilty verdict.

According to the Respondent, it was perfectly normal for him to obtain properties without registering the same under his own name. In his Position Paper, he even cited several other transactions where he merely possessed Deeds of Sale but not Certification of Registration or Transfer Certificates of Title. He alleged that for ESTATE PLANNING purposes, he intentionally left these properties in the name of the previous owner. The alleged discrepancies in the notarization were fully explained as well. The notary public explained that the erasures in her Notarial Register were made to correct mistakes so that entries will speak the truth. These corrections include the entries under entry number 177 to indicate the correct entry which was the Deed of Sale executed [by] the spouses Panaguinip. The original entry, Affidavit of Two Disinterested Persons, was actually notarized but was later cancelled at the request of the same affiants. The full explanation of these affiants, very doubtful and highly suspect, was nevertheless taken into consideration by the Prosecutor for reasons known only to him. The Respondents also managed to convince the Cebu Prosecutor that the discrepancy in the Residence Certificates was due to human error!

Not necessarily disagreeing with the findings of the City Prosecutor of Cebu City, the Resolution dismissing the case for falsification is not entirely convincing. There were certainly evidentiary matters which could have been better addressed by a judge, namely, the affidavit of the secretary of the notary public, the explanation in the incorrect entries in notarial register, the affidavit of the two (2) witnesses who sought the cancellation of their original affidavit, and the explanation of Paderanga himself regarding the difference in the dates.

Complainant is a layman who filed his own Position Paper unaided by counsel while Respondent is a lawyer. Nevertheless, Complainant managed to present one (1) piece of evidence not squarely addressed by Respondent Paderanga: the letter handwritten by Respondent’s clients, written in Cebuano, asking the Complainant for mercy and forgiveness in relation to the forcible entry case. Such letter was no longer necessary if indeed there was a GENUINE transfer of ownership of properties owned by the Panaguinip spouses to their lawyer, Respondent Paderanga. This letter, attached to the Complaint, was never refuted in any way by Respondent Paderanga who may have skirted the issue by inadvertence or by design. The letter dated March 1, 2002 indicates that the Panaguinip spouses still believe and assert ownership over these properties despite the existence of a Deed of Sale allegedly dated March 5, 2002. Complainant also went further by attaching an Affidavit by a Third Person who stated that the Panaguinip spouses still assert ownership over the parcel of land and vehicle.

Moreover, Complainant alleged that Respondent invited him consecutive times after the issuance of the writ of execution in the lower court; the first was at the Majestic Restaurant, the second was at Club Cebu at Waterfront Hotel. There was an offer to settle the judgment award of ₱100,000. During the first meeting, the offer was ₱3,000, on the second meeting, this time with the Panaguinip spouses, the offer was ₱10,000. When Complainant refused to settle with Respondent, he received a copy of the Affidavit of Third-Party Claim a few days later.

The parties did not stipulate this particular issue; however, this Commissioner feels that for the final disposition of this case, it is worthy to mention Article 1491 of the Civil Code. It specifically states that:

Art. 1491. The following persons cannot acquire by purchase, even at public or judicial auction, either in person or through the mediation of another:

x x x

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigations or levied upon execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession.

x x x

This is a classic case where a lawyer acquired the interests of his client in certain properties subject for execution. Regardless of the court’s apparent lack of jurisdiction, Respondent Paderanga acquired the two (2) matters subject for execution in the forcible entry case in violation of [the] Canon of Legal Ethics. A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also the moment that becomes subject to the judicial action of the judge. x x x

In all likelihood, although Complainant failed to get a favorable resolution from the City Prosecutor’s office in Cebu City, the Affidavit of Third Party Claim was simulated to defeat the rights of Complainant herein. It is immaterial that the decision of the lower court granting a judgment award was subsequently reversed or nullified. It is immaterial that the City Prosecutor did not find a prima facie case of falsification. The fact remains that there was a MULTITUDE of irregularities surrounding the execution of the Affidavit and, coupled with the letter sent by the Panaguinip spouses left unrebutted by Respondent Paderanga, there is substantial evidence that the Affidavit of Third Party Claim was purposely filed to thwart the enforcement of the decision in the forcible entry case.

It is worthy to note that the proceedings before the prosecutor’s office did not take into consideration the handwritten letter from the Panaguinip spouses. For whatever reason, Complainant did not present such letter, which if he did, the prosecutor may come up with a different resolution.

IV. RECOMMENDATION

While Complainant cannot fully prove the existence of falsity in the execution of the Affidavit of Third Party Claim, this Commissioner is convinced that there was indeed an anomaly which constitutes a violation of the Canons of Professional Responsibility.

A lawyer ought to have known that he cannot acquire the property of his client which is in litigation. x x x Respondent necessitates a heavy penalty since the circumstances surrounding the transfer of ownership of properties tend to indicate an anomalous transfer aimed to subvert the proper administration of justice. The numerous discrepancies in the transfer document, some dismissed as clerical errors and other explained by incredulous stories by way of affidavits, compounded by the letter left uncontested by Respondent Paderanga, inevitably lead a rational person to conclude that Paderanga may not have acquired the properties prior to the judicial action of execution. Even if the City Prosecutor found no prima facie case of falsification, this Commissioner finds substantial evidence to support a conclusion that Respondent Paderanga committed an ethical violation and should be meted the penalty of suspension of five (5) years from the practice of law.¹⁹

In a Resolution dated December 17, 2005, the IBP Board of Governors adopted and approved, with modification, the Report and Recommendation of the Investigating Commissioner, viz:

x x x finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that a lawyer ought to know that he cannot acquire the property of his client which is in litigation, Atty. Goering Paderanga is hereby SUSPENDED from the practice of law for one (1) year.²⁰

On March 23, 2006, respondent filed with the Court a Motion for Reconsideration of the Resolution of the IBP Board of Governors and, on August 18, 2006, a Supplemental Motion for Reconsideration.

In a Resolution dated August 23, 2006, the Court referred the motion for reconsideration to the IBP.

On December 11, 2008, the IBP issued a Resolution denying the motion for reconsideration, and affirmed its Resolution dated December 17, 2005.

Under Section 27 of Rule 138²¹ of the Rules of Court, a member of the Bar may be disbarred or suspended on any of the following grounds: (1) deceit; (2) malpractice or other gross misconduct in office; (3) grossly immoral conduct; (4) conviction of a crime involving moral turpitude; (5) violation of the lawyer’s oath; (6) willful disobedience of any lawful order of a superior court; and (7) willfully appearing as an attorney for a party without authority. In the present case, the Court finds respondent administratively liable for engaging in dishonest and deceitful conduct.

Although respondent denied having acted as counsel for therein defendants, the Spouses Panaguinip, in the forcible entry case filed by complainant, his involvement in the said case was still highly suspect. After the writ of execution had been issued on February 18, 2002, he went with defendants-spouses to amicably settle with complainant on two separate occasions, ostensibly to protect his own interests. Complainant claimed that during those two meetings, respondent did not disclose his ownership over the properties in question, leading the former to believe that respondent was, in fact, the counsel for defendants-spouses. He averred that respondent and defendant spouses initially offered a settlement of ₱3,000.00, which he refused as he had already spent ₱10,000.00 on court expenses. On their second meeting, the offer had been raised to ₱25,000.00, which again complainant declined, as the latter had, at that time, spent ₱25,000.00. Complainant maintained that it was only after said meetings had transpired that he received the affidavit of a third-party claim executed by respondent, stating that the latter was the owner of the property and motor vehicle. On the other hand, respondent claimed that the meetings took place in April 2002, after he had filed a third-party claim.

Had respondent been the rightful owner of a parcel of land and motor vehicle that were still registered in the name of defendants-spouses, he should have immediately disclosed such fact immediately and filed a third- party claim, as time was of the essence. Moreover, in their letter dated March 1, 2002, defendants-spouses did not mention any transfer of ownership of the said properties to respondent, as the former still believed that they owned the same. The continued possession and ownership by defendants-spouses was also attested to by a certain Brigida Lines, who executed an Affidavit²² in favor of complainant.

Based on the foregoing, the Court is more inclined to believe that when complainant and defendants-spouses failed to reach an agreement, respondent came forward as a third-party claimant to prevent the levy and execution of said properties. He, therefore, violated Rule 1.01 of the Code of Professional Responsibility,²³ which provides that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Under this rule, conduct has been construed not to pertain exclusively to the performance of a lawyer’s professional duties.²⁴ In previous cases,²⁵ the Court has held that a lawyer may be disbarred or suspended for misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor; or unworthy to continue as an officer of the court.

Notably, in the falsification case earlier filed, complainant was able to cite several irregularities in the documents evidencing the deeds of sale in question: the non-registration by respondent of the sale transactions; a Community Tax Certificate number appearing on said deeds which was different from that issued to defendant Ma. Teresa Panaguinip; and the erasures of the entries pertaining to said deeds from the Notarial Register.

Of these irregularities, only one can directly be attributable to respondent – his non-registration of the sale transaction. He argues that the sales were valid despite non-registration, and maintained that it was perfectly normal and regular for a lawyer like him to choose not to register and cause the transfer of title of the land and the FUSO jeepney after the execution of the Deeds of Sale, so the transactions would not appear in the records of the Bureau of Internal Revenue, the City Assessor or the Register of Deeds, on the Land Registration Office. He added that he had also bought four lots, which had not yet been transferred to his name, for estate planning or speculation purposes. He claimed that he found it legally wise not to immediately register after buying so that he would not pay for the expenses of the sale and transfer twice, once he decided to sell; or place them in his children’s name, and avoid paying estate and inheritance taxes upon his death.²⁶

While the act of registration of a document is not necessary in order to give it legal effect as between the parties, requirements for the recording of the instruments are designed to prevent frauds and to permit and require the public to act with the presumption that a recorded instrument exists and is genuine.²⁷ However, while the RTC was correct in holding that said omission on respondent’s part may not be considered falsification, he had shown an intent to defraud the government, which had the right to collect revenue from him, as well as from other persons who may have an interest in said properties.1avvphi1

Respondent violated the Lawyer’s Oath, which mandates that he should support the Constitution, obey the laws as well as the legal orders of the duly constituted authorities therein, and do no falsehood or not consent to the doing of any in court. Further, he has also failed to live up to the standard set by law that he should refrain from counseling or abetting activities aimed at defiance of the law or at lessening confidence in the legal system.²⁸ Respondent’s act of non-registration of the deeds of sale to avoid paying tax may not be illegal per se; but, as a servant of the law, a lawyer should make himself an exemplar for others to emulate. The responsibilities of a lawyer are greater than those of a private citizen. He is looked up to in the community.²⁹ Respondent must have forgotten that a lawyer must refrain from committing acts which give even a semblance of impropriety to the profession.

In cases wherein lawyers have similarly engaged in deceitful and dishonest conduct, the Court has imposed the penalty of suspension from the practice of law ranging from six (6) months to one (1) year.

In Spouses Donato v. Asuncion, Sr.,³⁰ where therein respondent lawyer filed a complaint for reformation of instrument to obtain financial gain, and prepared a contract which did not express the true intention of the parties, he was found guilty of gross misconduct and suspended from the practice of law for six (6) months.

In Yap-Paras v. Paras,³¹ where therein respondent lawyer applied for free patents over lands owned by another person and not in the former’s physical possession, he was found guilty of committing a falsehood in violation of the Lawyer’s Oath and the Code of Professional Responsibility and suspended from the practice of law for one (1) year, with a warning that the commission of the same or similar offense in the future would result in the imposition of a more severe penalty.

In the present case, the Investigating Commissioner and the IBP Board of Governors recommended a penalty of suspension to be imposed upon respondent for five (5) years and one (1) year, respectively. The Court, however, believes that a penalty of one (1) year is more commensurate to respondent’s deceitful and dishonest conduct.

WHEREFORE, respondent Atty. Goering G.C. Paderanga is found guilty of engaging in dishonest and deceitful conduct, and is SUSPENDED from the practice of law for one (1) year, with a stern warning that a repetition of the same or similar offense in the future would result in the imposition of a more severe penalty.

Let a copy of this Decision be entered into respondent’s record as a member of the Bar, and notice of the same be served on the Integrated Bar of the Philippines, and on the Office of the Court Administrator for circulation to all courts in the country.

This Decision shall be immediately executory.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA
Associate Justice

Footnotes

¹ Rollo, Vol. I, pp. 3-5.

² Cited in the Amended Complaint dated April 24, 2002, filed by defendants and herein respondent in Case No. CEB-27614, entitled Mr. Eliseo Panaguinip, Mrs. Ma. Teresa Panaguinip and Goering G.C. Paderanga v. John Hegna, Mila Hegna, Judge Edgemelo C. Rosales and Edilberto R. Suarin, id. at 107-137.

³ Id. at 6-7.

⁴ Id. at 389.

⁵ Id. at 10-11.

⁶ Deed of Absolute Sale dated November 27, 2001, rollo, Vol. I, p. 12.

⁷ Deed of Absolute Sale dated December 12, 2001, id. at 14.

⁸ Decision of the RTC dated June 29, 2006 in Civil Case No. CEB-27614, entitled Spouses Panaguinip and Paderanga v. Hegna, et al.; rollo, Vol. II, pp. 78-82.

⁹ Rollo, Vol. I, pp. 107-137.

¹⁰ Id. at 334-338.

¹¹ Rollo, Vol. II, pp. 78-82.

¹² Id. at 339-342.

¹³ Id. at 343-352.

¹⁴ Id. at 76-96.

¹⁵ Id. at 144.

¹⁶ Id. at 152.

¹⁷ Id. at 214-216.

¹⁸ Id. at 153-176.

¹⁹ Rollo, Vol. I, pp. 247-252. (Citations omitted.)

²⁰ Id. at 243.

²¹ As amended by SC Resolutions dated May 20, 1968 and February 13, 1992.

²² Rollo, p. 217.

²³ Promulgated by the Supreme Court on June 21, 1988.

²⁴ Ronquillo, et al. v. Cezar, A.C. No. 6288, June 16, 2006, 491 SCRA 1.

²⁵ Id.; Lao v. Medel, A.C. No. 5916, July 1, 2003, 405 SCRA 227, 232; Ong v. Unto, A.C. No. 2417, February 5, 2002, 376 SCRA 152, 160; Calub v. Suller, A.C. No. 1474, January 28, 2000, 323 SCRA 556; Narag v. Narag, A.C. No. 3405, June 29, 1998, 291 SCRA 451; Nakpil v. Valdes, A.C. No. 2040, March 4, 1998, 286 SCRA 758.

²⁶ Counter-Affidavit dated April 11, 2003, rollo, pp. 97-99.

²⁷ Maglucot-aw, et al. v. Maglucot, et al., G. R. No. 132518, March 28, 2000, 329 SCRA 78.

²⁸ Code of Professional Responsibility, Canon 1. Rule 1.02.

²⁹ Irene Santos-Tan v. Atty. Romeo R. Robiso, A.C. No. 6383, March 31, 2009.

³⁰ A.C. No. 4914, March 3, 2004, 424 SCRA 199.

³¹ A.C. No. 4947, February 14, 2005, 451 SCRA 194.

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