887 Phil. 255 – A.C. No. 10699 – Legal Ethics – CPRA – Fidelity; Propriety – A lawyer must honor contractual obligations
Wilfredo Caballero, an employee of the National Food Authority, was awarded a low-cost housing unit by the Government Service Insurance System (GSIS) in January 1995, through a P216,000 loan payable over 25 years. Facing financial difficulties, he transferred his rights to Atty. Glicerio Sampana in January 1997, for P60,000, with the condition that Sampana would assume the remaining loan obligations. A Deed of Transfer of Rights was executed to formalize this agreement.
Despite this arrangement, Caballero received notices from GSIS in 2004 and 2009 indicating that the loan had ballooned due to non-payment, reaching over P1.1 million. Sampana failed to fulfill his obligation to pay the amortizations, and the property remained occupied by his tenant, preventing Caballero from surrendering it to GSIS. Eventually, the GSIS canceled the Deed of Conditional Sale and demanded that Caballero vacate the property.
ISSUE: Whether Atty. Sampana’s actions constituted gross misconduct warranting disciplinary action.
HELD: Yes. The Supreme Court found that Sampana willfully refused to fulfill the obligations he voluntarily assumed under the Deed of Transfer of Rights. His actions caused significant financial harm to Caballero, who faced mounting arrears and the loss of the property. The Court emphasized that Sampana’s conduct violated Rule 1.01 of the Code of Professional Responsibility, which prohibits lawyers from engaging in unlawful, dishonest, immoral, or deceitful conduct.
Furthermore, the SC noted that this was not Sampana’s first infraction. He had previously been suspended for one year in Lising vs Sampana for unethical conduct involving a double sale of property, and for three years in Nery vs Sampana for mishandling client funds and failing to file a court pleading.
A lawyer’s willful failure to honor obligations voluntarily assumed, especially when such failure results in significant harm to another party, constitutes gross misconduct. Repeated violations of ethical standards demonstrate unfitness to practice law and warrant the ultimate penalty of disbarment.
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