Elanga v. Atty. Pasok

A lawyer who notarizes a document from which he directly or indirectly receives consideration, and who participates in transactions involving property under litigation without the consent of all parties, commits unlawful, dishonest, and deceitful conduct warranting suspension from the practice of law and revocation of notarial commission.

The complainants, Lourdes E. Elanga and her son Nilo E. Elanga, were the defendants in Civil Case No. 204 for Partition, Recovery of Ownership and Possession, Accounting and Share, Attorney's Fees and Damages pending before Branch 15 of the RTC of Cotabato City. Lourdes is the eldest sister of the plaintiffs in that civil case—the heirs of deceased spouses Gregorio Erazo, Sr. and Felomina Esgrina. The dispute centered on a lot covered by Original Certificate of Title No. V-2044, which Nilo had redeemed from the Development Bank of the Philippines (DBP). Atty. Rutillo B. Pasok served as legal counsel for the plaintiffs (the Erazo heirs) in that civil case.

Atty. Rutillo B. Pasok served as legal counsel for the heirs of deceased spouses Gregorio Erazo, Sr. and Felomina Esgrina in Civil Case No. 204, a suit for Partition, Recovery of Ownership and Possession, Accounting and Share, Attorney's Fees and Damages pending before Branch 15 of the Regional Trial Court of Cotabato City. The defendants in that case were Lourdes E. Elanga, the eldest sister of the plaintiffs, and her son Nilo E. Elanga. The dispute involved a lot covered by Original Certificate of Title No. V-2044, which Nilo had redeemed from the Development Bank of the Philippines (DBP). The plaintiffs claimed the Elangas failed to deliver the title copy in their possession, while the Elangas countered that the plaintiffs had not reimbursed them for the redemption.

On March 25, 2002, the RTC rendered a Decision requiring the plaintiffs to reimburse Nilo the amount of P162,178.03, representing the redemption price plus interest, penalties, as well as damages and attorney's fees. On appeal, the Court of Appeals deleted the awards for damages, attorney's fees, and appearance fees. The decision became final and executory. Despite failing to settle their reimbursement obligation, the plaintiffs continued to demand delivery of the title copy. The civil case remained in the execution stage.

During the pendency of Civil Case No. 204, Atty. Pasok engaged in a series of transactions involving the subject lot. On May 7, 1999, he notarized a Deed of Extra-Judicial Partition, which Lourdes later denied having signed, alleging forgery. On October 8, 2001, he notarized a Real Estate Mortgage over the subject property without the knowledge and consent of the Elangas or the trial court. On the same date, he signed an Agreement with his clients indicating receipt of the mortgage proceeds in the amounts of P23,782.00 and P162,178.03. He also notarized a Promissory Note related to the same Real Estate Mortgage. According to the Elangas, Atty. Pasok retained P162,178.03—the amount Nilo had paid to redeem the lot from DBP—and received P23,782.00 from the mortgage proceeds.

Atty. Pasok denied falsifying Lourdes's signature in the Deed of Extra-Judicial Partition, claiming that the parties had met personally to settle their differences and executed the deed in anticipation of an urgent sale. He admitted preparing and notarizing the deed and asserted that Lourdes had signed personally before him. He also acknowledged receiving P23,782.00 from his clients, which he characterized as reimbursement for transportation expenses. However, in a Joint Affidavit dated October 4, 2012, his clients stated that the P23,782.00 was paid as part of his attorney's fees. The Elangas countered that Atty. Pasok allowed his clients to mortgage the subject property without their conformity, despite his knowledge of the pending civil case, and that he notarized the mortgage document and received a portion of its proceeds.

• Notarization without consent: Complainants alleged that Atty. Pasok notarized a Real Estate Mortgage over the subject property without their knowledge and consent, and without the trial court's approval, despite knowing that the title was in their possession and that Civil Case No. 204 was still pending.
• Forgery: Complainants asserted that Lourdes's signature in the Deed of Extra-Judicial Partition was forged and that Atty. Pasok allowed the forgery.
• Improper receipt of proceeds: Complainants contended that Atty. Pasok improperly received P23,782.00 and P162,178.03 from the mortgage proceeds, amounts which should have been given to the Elangas or consigned to the court.
• Conflict of interest: Complainants argued that Atty. Pasok allowed his client Francisco Erazo to receive Lourdes's share from the mortgage proceeds despite knowing they were opposing parties in the pending civil case.

• Defect in notarization of Complaint: Atty. Pasok argued that the disbarment complaint was not properly notarized, asserting that Lourdes was ill and bedridden in Sultan Kudarat and Nilo could not have personally appeared before the notary public in Malabon City, making the complaint's execution and notarization suspect.
• Insufficient IBP-BOG explanation: Atty. Pasok contended that the IBP-BOG did not clearly state the facts and reasons for increasing the penalty to one-year suspension, contrary to Section 12, Rule 139-B of the Rules of Court.
• Issues beyond the Complaint: Atty. Pasok argued that the Investigating Commissioner's Report and Recommendation tackled issues not raised in the Complaint.
• Denial of forgery: Atty. Pasok denied falsifying Lourdes's signature, claiming the parties met personally, settled their differences, and executed the Deed of Extra-Judicial Partition in anticipation of an urgent sale, with Lourdes signing personally before him.
• Legitimate receipt of funds: Atty. Pasok claimed the P23,782.00 was reimbursement for transportation expenses, though his clients' Joint Affidavit stated it was part of his attorney's fees.

• Procedural Validity of Complaint: Whether the alleged defect in the notarization of the disbarment complaint renders it invalid.
• Adequacy of IBP-BOG Resolution: Whether the IBP-BOG failed to comply with Section 12, Rule 139-B by not clearly stating the facts and reasons for its recommended penalty.
• Scope of Investigation: Whether the Investigating Commissioner exceeded the issues raised in the Complaint.
• Notarial Disqualification: Whether Atty. Pasok violated the 2004 Rules on Notarial Practice by notarizing a document from which he received part of the proceeds.
• Ethical Violations: Whether Atty. Pasok violated the Lawyer's Oath and the Code of Professional Responsibility through his conduct.
• Forgery: Whether the allegation of forgery of Lourdes's signature in the Deed of Extra-Judicial Partition may be resolved in the disbarment proceedings.

• Procedural Validity of Complaint: No. The alleged defect was not substantial and did not result in a miscarriage of justice, as Atty. Pasok fully participated in the IBP proceedings; the presumption of regularity in the notary public's performance applies absent clear and convincing proof to the contrary.
• Adequacy of IBP-BOG Resolution: No. The IBP-BOG sufficiently stated its basis by expressly adopting the Investigating Commissioner's Report and Recommendation and specifying the violated CPR provisions; IBP-BOG resolutions are only recommendatory and subject to the Court's review.
• Scope of Investigation: No. The Court has authority to look into relevant issues pursuant to its disciplinary power, especially when pertinent details were provided in the Complaint and subsequent pleadings.
• Notarial Disqualification: Yes. Atty. Pasok was disqualified from notarizing the Real Estate Mortgage under Section 3, Rule 4 of the 2004 Rules on Notarial Practice because he received, directly and indirectly, consideration from the notarized act.
• Ethical Violations: Yes. Atty. Pasok violated Rules 1.01, 1.02, and 1.03 of Canon 1, Rule 16.01 of Canon 16 of the CPR, and the Lawyer's Oath through his unlawful, dishonest, and deceitful conduct and failure to account for client funds.
• Forgery: The Court declined to resolve the forgery allegation, holding that disbarment proceedings should not be the occasion to establish falsification or forgery, which must first be duly established in appropriate criminal or civil proceedings.

• Procedural Validity of Complaint: Atty. Pasok's claim of irregularity in the notarization was speculative and unsupported by proof. He did not demonstrate that it was impossible for the Elangas to appear before the notary public in Malabon City. Even assuming the Elangas did not personally appear, such defect is not fatal under Section 11, Rule 139-B of the Rules of Court, which provides that no defect in a complaint shall be considered substantial unless it results or may result in a miscarriage of justice. Since Atty. Pasok fully participated in the IBP proceedings, no miscarriage of justice occurred. Moreover, the presumption of regularity in the performance of duty by the notary public applies absent clear and convincing proof to the contrary.

• Adequacy of IBP-BOG Resolution: The IBP-BOG specifically indicated in its Resolution that it approved and adopted the Investigating Commissioner's Report and Recommendation, making it an integral part of Resolution No. XXI-2015-149. The IBP-BOG clearly stated that Atty. Pasok violated Canon 1, Rules 1.01, 1.02, and 1.03 of the CPR, warranting a one-year suspension. Such ratiocination sufficed since the Investigating Commissioner had already provided the details. Furthermore, IBP-BOG resolutions are only recommendatory and subject to the Court's review, so the resolution cannot be deemed a final decision in the administrative case.

• Scope of Investigation: The Court possesses authority to look into relevant issues pursuant to its disciplinary power, especially when important details were provided in the Complaint and subsequent pleadings of both parties. The Complaint sufficiently raised the pertinent issues requiring resolution.

• Notarial Disqualification: Atty. Pasok notarized the Real Estate Mortgage and, as expressly stated in the Agreement, received P162,178.03 and P23,782.00 from the mortgage proceeds. Section 3, Rule 4 of the 2004 Rules on Notarial Practice disqualifies a notary public from performing a notarial act if he will receive, as a direct or indirect result, any commission, fee, advantage, right, title, interest, cash, property, or other consideration. By notarizing the mortgage and subsequently receiving part of its proceeds, Atty. Pasok was disqualified from performing the notarial act.

• Ethical Violations: Atty. Pasok allowed and notarized the Real Estate Mortgage over property under litigation without the Elangas' consent, despite knowing the title was in their possession and the civil case was pending. He allowed his client Francisco to receive Lourdes's share from the mortgage proceeds despite their being opposing parties, with no proof that Lourdes agreed to this arrangement. His receipt of P23,782.00 and P162,178.03 from the mortgage proceeds was highly irregular, as the P162,178.03 should have been given to the Elangas, who had already redeemed the lot from DBP. These acts constituted unlawful, dishonest, and deceitful conduct under Rules 1.01, 1.02, and 1.03 of Canon 1, failure to account for client funds under Rule 16.01 of Canon 16, and violation of the Lawyer's Oath to conduct himself with good fidelity to courts and clients. The quantum of proof—substantial evidence—was satisfied.

• Forgery: The Court declined to resolve the forgery allegation because disbarment proceedings based on falsification or forgery of public documents should not be the occasion to establish the falsification or forgery. Such bases must first be duly and competently established in criminal or civil proceedings appropriate for that purpose. The complainants bore the burden of proving their allegations with substantial evidence, and while they proved other infractions with substantial evidence, the forgery claim required prior establishment in the proper forum.

• Presumption of regularity in notarization — A notary public is presumed to have performed his duty in accordance with the rules, absent clear and convincing proof to the contrary. The Court applied this presumption to uphold the validity of the notarized disbarment complaint against Atty. Pasok's speculative challenge, noting he submitted no proof to substantiate his allegations.

• Substantial evidence in disbarment proceedings — The quantum of proof necessary for a finding of guilt in a disbarment case is substantial evidence, or that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion. The complainant bears the burden of proving the allegations against the respondent. The Court found that the Elangas proved with substantial evidence that Atty. Pasok committed several infractions pertaining to his participation in documents concerning opposing parties and his improper receipt of monetary considerations.

• Disbarment not proper venue for establishing forgery — Disbarment proceedings based on falsification or forgery of public documents should not be the occasion to establish the falsification or forgery; such bases must first be duly and competently established in criminal or civil proceedings appropriate for that purpose. The Court refrained from resolving the forgery allegation against Atty. Pasok on this ground.

• Notarial disqualification for receipt of consideration — Under Section 3, Rule 4 of the 2004 Rules on Notarial Practice, a notary public is disqualified from performing a notarial act if he will receive, as a direct or indirect result, any commission, fee, advantage, right, title, interest, cash, property, or other consideration, except as provided by the Rules and by law. A lawyer who notarizes a document and receives part of its proceeds violates this rule and merits revocation of notarial commission and disqualification from future commission.

• IBP-BOG resolutions are recommendatory — Resolutions of the IBP Board of Governors are only recommendatory and always subject to the Court's review. The Court is vested with the power to affirm, modify, or reverse IBP-BOG resolutions, and thus they cannot be deemed final decisions in administrative cases.

• Lawyer's duty to account for client funds — Under Rule 16.01 of Canon 16 of the CPR, a lawyer shall account for all money or property collected or received for or from the client. Failure to account for and return funds received from transactions involving the client's interests constitutes a violation warranting disciplinary action.

• "A notary public is disqualified from performing a notarial act if he: x x x (b) will receive, as a direct or indirect result, any commission, fee, advantage, right, title, interest, cash, property, or other consideration, except as provided by these Rules and by law" — This is the notarial disqualification provision that Atty. Pasok violated by notarizing the mortgage and receiving part of its proceeds, forming the basis for revocation of his notarial commission.

• "Disbarment proceedings based on falsification or forgery of public documents should not be the occasion to establish the falsification or forgery. Such bases should first be duly and competently established either in criminal or civil proceedings appropriate for that purpose." — This states the doctrine that forgery must be litigated in the proper proceedings, not in disbarment, which the Court applied to decline resolving the forgery allegation.

• "The quantum of proof necessary for a finding of guilt in a disbarment case is substantial evidence or that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion." — This defines the standard of proof in disbarment cases, which the Court found satisfied as to the non-forgery infractions.

• "Lawyers commissioned as notaries public are mandated to discharge with fidelity the duties of their offices, such duties being dictated by public policy and impressed with public interest." — This articulates the public-interest character of notarial duties, underscoring why Atty. Pasok's failure to properly perform his notarial function undermined the integrity of the office of notary public.

• Flores-Salado vs. Atty. Villanueva, Jr., 796 Phil. 40 (2016) — Followed for the doctrine that disbarment proceedings based on forgery or falsification should not establish the forgery itself, which must first be established in appropriate criminal or civil proceedings.
• Heirs of Tan, Sr. vs. Beltran, 805 Phil. 1 (2017) — Followed for the principle that IBP-BOG resolutions are only recommendatory and subject to the Court's review, cited in rejecting Atty. Pasok's challenge to the IBP-BOG's reasoning.
• OCA vs. Judge Paderanga, 505 Phil. 143 (2005) — Followed for the Court's authority to look into relevant issues pursuant to its disciplinary power, cited in rejecting the argument that the Investigating Commissioner exceeded the issues raised.
• Bartolome vs. Basilio, 771 Phil. 1 (2015) — Followed for the principle that failure to properly perform notarial duties undermines the integrity of the office of notary public and degrades the function of notarization.
• Orola vs. Baribar, A.C. No. 6927, March 14, 2018 — Followed for the principle that notaries public must discharge their duties with fidelity as dictated by public policy and impressed with public interest.

• Rule 1.01, Canon 1, Code of Professional Responsibility — "A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct." Applied to Atty. Pasok's notarization of the mortgage without consent of opposing parties and receipt of proceeds from the notarized transaction.
• Rule 1.02, Canon 1, Code of Professional Responsibility — "A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system." Applied to Atty. Pasok's allowing his clients to mortgage property under litigation.
• Rule 1.03, Canon 1, Code of Professional Responsibility — "A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man's cause." Applied to Atty. Pasok's actions during the pendency of the civil case.
• Rule 16.01, Canon 16, Code of Professional Responsibility — "A lawyer shall account for all money or property collected or received for or from the client." Applied to Atty. Pasok's receipt of P162,178.03 and P23,782.00 without proper accounting or turnover.
• Section 3, Rule 4, 2004 Rules on Notarial Practice — Disqualifies a notary public from performing a notarial act if he will receive any consideration as a direct or indirect result. Applied to Atty. Pasok's notarization of the mortgage from which he received proceeds.
• Section 11, Rule 139-B, Rules of Court — Provides that no defect in a complaint shall be considered substantial unless it results or may result in a miscarriage of justice. Applied to reject Atty. Pasok's challenge to the notarization of the disbarment complaint.
• Section 12, Rule 139-B, Rules of Court — Requires IBP-BOG decisions to clearly state facts and reasons. Applied in finding the IBP-BOG's express adoption of the Investigating Commissioner's report sufficient compliance.
• Lawyer's Oath — Requires lawyers to conduct themselves according to the best of their knowledge and discretion with all good fidelity to courts and clients. Found violated by Atty. Pasok's conduct in notarizing documents and receiving proceeds from transactions involving opposing parties.

Peralta, C.J., Perlas-Bernabe, Leonen, Gesmundo, Carandang, Lazaro-Javier, Inting, Zalameda, Lopez, and Gaerlan, JJ., concurred. Caguioa, J., Delos Santos, J., and Baltazar-Padilla, J., were on official leave.