Spouses Olbes vs. Atty. Deciembre

A lawyer who fills up blank checks entrusted to him as security for a loan with amounts not agreed upon, despite full knowledge that the loan had already been paid, commits serious dishonesty and gross misconduct warranting indefinite suspension from the practice of law. The Court held that lawyers may be disciplined for any conduct, whether in their professional or private capacity, if such conduct renders them unfit to continue as officers of the court.

The complainants, Spouses Franklin and Lourdes Olbes, were government employees at the Central Post Office, Manila, with modest salaries. Respondent Atty. Victor V. Deciembre was a lawyer who had extended a loan to Lourdes through Rodela Loans, Inc. The complainants' high regard for respondent as a member of the bar led them to trust him with their blank checks as security for the loan. The case involves the ethical standards expected of lawyers under the Code of Professional Responsibility, which mandates that lawyers uphold the constitution, obey the laws, and conduct themselves with honesty and integrity at all times.

Spouses Franklin and Lourdes Olbes were government employees at the Central Post Office, Manila — Franklin was a letter carrier receiving a monthly salary of P6,700, and Lourdes was a mail sorter receiving P6,000. Through respondent Atty. Victor V. Deciembre, Lourdes renewed on July 1, 1999 her application for a loan from Rodela Loans, Inc. in the amount of P10,000. As security for the loan, she issued and delivered to respondent five Philippine National Bank (PNB) blank checks (Nos. 0046241-45), which served as collateral for the approved loan as well as any other loans that might be obtained in the future.

On August 31, 1999, Lourdes paid respondent the amount of P14,874.37 corresponding to the loan plus surcharges, penalties and interests, for which the latter issued a receipt. Notwithstanding the full payment of the loan, respondent filled up four of the five blank PNB Checks (Nos. 0046241, 0046242, 0046243 and 0046244) for the amount of P50,000 each, with different dates of maturity — August 15, 1999, August 20, 1999, October 15, 1999 and November 15, 1999, respectively.

On October 19, 1999, respondent filed before the Provincial Prosecution Office of Rizal an Affidavit-Complaint against petitioners for estafa and violation of Batas Pambansa (BP) 22, alleging that on July 15, 1999, around one-thirty in the afternoon at Cainta, Rizal, they personally approached him and requested that he immediately exchange with cash their postdated PNB Check Nos. 0046241 and 0046242 totaling P100,000. Several months later, on January 20, 2000, respondent filed against petitioners another Affidavit-Complaint for estafa and violation of BP 22, stating that on the same day, July 15, 1999, around two o'clock in the afternoon at Quezon City, they again approached him and requested that he exchange with cash PNB Check Nos. 0046243 and 0046244 totaling P100,000.

Petitioners insisted that on the afternoon of July 15, 1999, they never went either to Cainta, Rizal, or to Quezon City to transact business with respondent, as they were in their office at the time, as shown by their Daily Time Records; it would have been physically impossible for them to transact business in Cainta, Rizal, and, after an interval of only thirty minutes, in Quezon City, especially considering the heavy traffic conditions in those places. Petitioners also averred that many of their office mates — among them, Juanita Manaois, Honorata Acosta and Eugenia Mendoza — had suffered the same fate in their dealings with respondent.

In his Comment, respondent denied petitioners' claims, alleging that petitioners were the ones who had deceived him by not honoring their commitment regarding their July 15, 1999 transactions totaling P200,000, which were covered by their four PNB checks that were subsequently dishonored due to "ACCOUNT CLOSED." He claimed that the checks had already been fully filled up when petitioners signed them in his presence, and that he had given them the amounts of money indicated in the checks because his previous satisfactory transactions with them convinced him that they had the capacity to pay. Respondent further claimed that the loans were his private and personal transactions not connected with his profession as a lawyer, and that the criminal cases were private actions intended to vindicate his rights.

The IBP commissioner found respondent's version not credible, noting that respondent's statements in his affidavit-complaints were in direct contrast to his testimony before the Commission on cross-examination. In his affidavit-complaints, respondent stated the transactions occurred in Cainta, Rizal and Quezon City, but in his testimony he said the checks were issued at his office at Garnet Road, Ortigas Center, Pasig City — the first two checks in the morning and the next two in the afternoon. The commissioner found that respondent had blatantly distorted the truth regarding the place and time of the transactions, seriously casting doubt on his version. The commissioner also noted that respondent, a lawyer, would not even bother to ask complainants for a receipt for the money he allegedly gave, nor verify what businesses they would use the money for. Complainant Franklin Olbes had to be jailed as a result of respondent's filing of the criminal cases.

• Dishonesty and Falsification: Petitioners alleged that respondent committed willful and deliberate acts of dishonesty, falsification and conduct unbecoming a member of the Bar by filling up the blank checks with amounts not agreed upon despite full payment of the loan.
• Physical Impossibility: Petitioners argued that on the afternoon of July 15, 1999, they never went to Cainta, Rizal, or Quezon City to transact business with respondent, as shown by their Daily Time Records, making it physically impossible for them to transact business in both places within thirty minutes given heavy traffic conditions.
• Pattern of Misconduct: Petitioners averred that many of their office mates had suffered the same fate in their dealings with respondent.

• Denial of Claims: Respondent denied petitioners' claims, calling them baseless and devoid of any truth and merit, and alleged that petitioners deceived him by not honoring their commitment regarding their July 15, 1999 transactions totaling P200,000.
• Checks Fully Filled Up: Respondent claimed that the checks had already been fully filled up when petitioners signed them in his presence, and that he had given them the amounts indicated because his previous satisfactory transactions with them convinced him of their capacity to pay.
• Private Transactions: Respondent argued that the loans were his private and personal transactions not connected with his profession as a lawyer, and that the criminal cases were private actions intended to vindicate his rights, maintaining that his right to litigate should not be curtailed by the administrative action.

• Credibility of Versions: Whether the IBP commissioner correctly gave credence to petitioners' version of the facts over respondent's version.
• Administrative Liability: Whether respondent's act of filling up the blank checks with amounts not agreed upon, despite full payment of the loan, and filing criminal cases against petitioners constitutes gross misconduct and violation of the Code of Professional Responsibility.
• Proper Penalty: Whether the penalty of two years suspension recommended by the IBP is appropriate given the circumstances of the case.

• Credibility of Versions: Yes. The IBP commissioner correctly gave credence to petitioners' story that they had given five blank personal checks to respondent as security for the P10,000 loan, and found untrue and unbelievable respondent's assertion that they had filled up the checks and exchanged these with his cash at Quezon City and Cainta, Rizal.
• Administrative Liability: Yes. Respondent is guilty of serious dishonesty and professional misconduct, violating Rules 1.01 and 7.03 of the Code of Professional Responsibility, for filling up the blank checks with amounts not agreed upon despite full knowledge that the loan had already been paid, and for initiating unfounded criminal suits against petitioners.
• Proper Penalty: No. The penalty of two years suspension recommended by the IBP was too mild; considering the depravity of the offense, the Court imposed indefinite suspension from the practice of law.

• Credibility of Versions: The Court found no reason to deviate from the IBP commissioner's findings after a careful review of the records. The commissioner noted that respondent's statements in his affidavit-complaints were in direct contrast to his testimony before the Commission on cross-examination. In his affidavit-complaints, respondent stated the transactions occurred in Cainta, Rizal and Quezon City, but in his testimony he said the checks were issued at his office at Garnet Road, Ortigas Center, Pasig City — the first two checks in the morning and the next two in the afternoon. The commissioner found that respondent had blatantly distorted the truth regarding the place and time of the transactions, seriously casting doubt on his version. The commissioner also found that respondent's claim that he would trust complainants with another P200,000 and immediately release the amounts was not credible given the background of the previous transaction and the personal circumstances of complainants, who were mere employees of the Central Post Office with modest salaries. That respondent, a lawyer, would not even bother to ask complainants for a receipt for the money he allegedly gave, nor verify what businesses they would use the money for, further contributed to the lack of credibility of respondent's version.

• Administrative Liability: The Court held that membership in the legal profession is a special privilege burdened with conditions, bestowed upon individuals who are not only learned in the law but also known to possess good moral character. Lawyers should act and comport themselves with honesty and integrity in a manner beyond reproach, in order to promote the public's faith in the legal profession. The Code of Professional Responsibility mandates that a lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes (Canon 1), and shall at all times uphold the integrity and dignity of the legal profession (Canon 7). Rule 7.03 provides that a lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor should he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession. The Court emphasized that lawyers may be disciplined for any conduct, whether in their professional or in their private capacity, if such conduct renders them unfit to continue to be officers of the court. Respondent committed abominable dishonesty by abusing the confidence reposed in him by petitioners, who trusted him with their blank checks because of their high regard for him as a member of the bar. His act of filling up the blank checks with amounts not agreed upon, despite full knowledge that the loan had already been paid, was a brazen act of falsification of a commercial document resorted to for his material gain. He then had the temerity to initiate unfounded criminal suits against petitioners, exhibiting his vile intent to have them punished and deprived of liberty, resulting in the detention of Franklin for three months.

• Proper Penalty: The Court found the penalty of two years suspension recommended by the IBP to be too mild, considering the depravity of the offense committed by respondent. His propensity for employing deceit and misrepresentation was reprehensible, and his misuse of the filled-up checks that led to the detention of one petitioner was loathsome. The Court compared the case to Eustaquio vs. Rimorin, where the forging of a special power of attorney and fraudulent inducement were sanctioned with suspension for five years, and found respondent's conduct even worse because he used falsified checks as bases for maliciously indicting petitioners and caused the detention of one of them. The Court thus imposed indefinite suspension.

• Lawyer's Oath and Duty of Honesty — A lawyer is an oath-bound servant of society whose conduct is clearly circumscribed by inflexible norms of law and ethics, and whose primary duty is the advancement of the quest for truth and justice. The oath that lawyers swear impresses upon them the duty of exhibiting the highest degree of good faith, fairness and candor in their relationships with others. The Court applied this doctrine in finding that respondent's acts of filling up blank checks with amounts not agreed upon and filing unfounded criminal cases constituted serious dishonesty and professional misconduct.

• Discipline for Private Conduct — Lawyers may be disciplined for any conduct, whether in their professional or in their private capacity, if such conduct renders them unfit to continue to be officers of the court. The Court applied this doctrine in rejecting respondent's argument that the loans were his private and personal transactions not connected with his profession as a lawyer.

• Good Moral Character as Continuing Requirement — Good moral character is an essential qualification for the privilege to enter into the practice of law, and it is equally essential to observe this norm meticulously during the continuance of the practice and the exercise of the privilege. Good moral character includes at least common honesty, and no moral qualification for bar membership is more important than truthfulness and candor. The Court applied this doctrine in finding that respondent's conduct revealed a basic moral flaw and was indicative of moral depravity not expected from, and highly unbecoming of, a member of the bar.

• "Constituting a serious transgression of the Code of Professional Responsibility was the malevolent act of respondent, who filled up the blank checks entrusted to him as security for a loan by writing on those checks amounts that had not been agreed upon at all, despite his full knowledge that the loan they were meant to secure had already been paid." — This opening statement articulates the core ratio decidendi of the case, identifying the specific act that constituted the serious transgression of the Code of Professional Responsibility.

• "It is also glaringly clear that the Code of Professional Responsibility was seriously transgressed by his malevolent act of filling up the blank checks by indicating amounts that had not been agreed upon at all and despite respondent's full knowledge that the loan supposed to be secured by the checks had already been paid. His was a brazen act of falsification of a commercial document, resorted to for his material gain." — This passage defines the nature of respondent's misconduct as falsification of a commercial document for material gain, which is the basis for the finding of gross misconduct.

• "Good moral character is an essential qualification for the privilege to enter into the practice of law. It is equally essential to observe this norm meticulously during the continuance of the practice and the exercise of the privilege. Good moral character includes at least common honesty. No moral qualification for bar membership is more important than truthfulness and candor." — This passage states the canonical formulation of the continuing requirement of good moral character for lawyers, frequently cited in subsequent jurisprudence on legal ethics.

• Eustaquio vs. Rimorin, 399 SCRA 422, March 24, 2003 — Cited as a controlling precedent for the penalty of suspension for five years in a case involving forging of a special power of attorney and fraudulent inducement; the Court found respondent's conduct in the present case even worse because he used falsified checks to maliciously indict petitioners and caused the detention of one of them.
• Lao vs. Medel, 405 SCRA 228, July 1, 2003 — Cited for the principle that membership in the legal profession is a special privilege burdened with conditions.
• Sanchez vs. Somoso, 412 SCRA 569, October 3, 2003 — Cited for the principle that a high standard of excellence and ethics is expected and required of members of the bar.
• Garcia vs. Manuel, 395 SCRA 386, January 20, 2003 — Cited for the principle that lawyers may be disciplined for any conduct, whether in their professional or private capacity, if such conduct renders them unfit to continue to be officers of the court.
• Tan vs. Sabandal, 206 SCRA 473, February 24, 1992 — Cited for the principle that good moral character includes at least common honesty.
• Constantino vs. Saludares, 228 SCRA 233, December 7, 1993 — Cited for the principle that no moral qualification for bar membership is more important than truthfulness and candor.
• Sebastian vs. Atty. Calis, 372 Phil. 673, September 9, 1999 — Cited for the principle that deception and other fraudulent acts are disgraceful and dishonorable and reveal a basic moral flaw.
• Sabayle vs. Tandayag, 158 SCRA 497, March 8, 1988 — Cited for the principle that the standards of the legal profession are not satisfied by conduct that merely enables one to escape the penalties of criminal laws.

• Rule 1.01, Code of Professional Responsibility — Provides that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. The Court found respondent violated this rule through his act of filling up blank checks with amounts not agreed upon and filing unfounded criminal cases.
• Rule 7.03, Code of Professional Responsibility — Provides that a lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor should he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession. The Court found respondent violated this rule through his conduct in the present case.
• Canon 1, Code of Professional Responsibility — Provides that a lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes. Cited as a standard that respondent transgressed.
• Canon 7, Code of Professional Responsibility — Provides that a lawyer shall at all times uphold the integrity and dignity of the legal profession and support the activities of the Integrated Bar. Cited as a standard that respondent transgressed.
• Article 19, New Civil Code — Provides that every person must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Cited in support of the expectation that lawyers act in good faith in all their dealings.
• Batas Pambansa (BP) 22 — The law under which respondent filed criminal complaints against petitioners for estafa and violation of BP 22, which the Court found to be unfounded and malicious.

Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concurred.