ENGEL PAUL ACA, COMPLAINANT, VS. ATTY. RONALDO P. SALVADO, RESPONDENT.

Aca versus Salvado

The Case

This is an administrative case for disbarment. Engel Paul Aca, a private investor, complains against Atty. Ronaldo P. Salvado, a member of the Bar who held himself out as a lawyer and a businessman engaged in lending. Aca says Salvado lured him into investing with promises of high monthly interest, issued postdated checks to cover principal and interest, and then left those checks to bounce for insufficient funds or a closed account. The case matters because it fixes a rule every reviewee must carry: a lawyer who issues worthless checks in his private business dealings commits gross misconduct and violates the Code of Professional Responsibility, and his stature as a lawyer is itself part of what made the victim trust him.

Procedural History

The complaint was filed with the Integrated Bar of the Philippines. The Investigating Commissioner heard the parties, received their mandatory conference briefs and position papers, and recommended suspension from the practice of law for six months. The Board of Governors of the Integrated Bar adopted and approved that recommendation but modified the period, raising the suspension from six months to two years. No motion for reconsideration was filed before the Board, and no petition for review was filed before the Supreme Court. Even so, the Integrated Bar elevated the entire records to the Supreme Court for final action, because its resolution is merely recommendatory and does not attain finality. The Supreme Court then rendered its own decision, sustaining the findings of the Board and adopting its recommendation in part.

Facts

Sometime in 2010, Aca met Salvado through Atty. Samuel Divina, a childhood friend. Salvado introduced himself as a lawyer and a businessman in several ventures, including lending. He enticed Aca to invest, guaranteeing a high interest rate of five to six percent every month, and assured him of a profitable investment because he had various clients and investors. He even assured Aca that he would not place his reputation as a lawyer on the line. Aca made an initial investment, and it yielded the principal plus the promised interest. On various dates from 2010 to 2011, Salvado again induced him to invest with promises of high returns.

As consideration, Salvado issued several postdated checks drawn on his account at Philippine Savings Bank, totaling six million one hundred seven thousand pesos, representing principal plus interest. Upon presentment, the checks were dishonored, drawn from insufficient funds or a closed account. Aca made verbal and written demands. At first Salvado communicated openly, assuring Aca he would not abscond and was merely having difficulty liquidating assets and collecting from his own creditors. Later he began to avoid Aca's calls and messages, and meetings arranged through common friends proved futile.

In December 2011, Atty. Divina personally tried to serve a notice of dishonor for seven hundred forty seven thousand pesos, the cash value of the first two checks, but Salvado refused to receive it. In April 2012, Atty. Divina, his filing clerk, and Aca's family went to Salvado's house. A certain Mark told them Salvado no longer lived there. As they were leaving, Salvado arrived, told Aca he had not forgotten his debt, and invited him inside, but Aca refused. Salvado again refused to receive or even read the demand letter, and despite his promises he never settled. For his defense, Salvado denied enticing Aca, claimed it was Aca who inquired about investing, and said the checks were mere security or evidence of investment. He called the dishonor a result of his own gullibility and inadvertence.

Issues

• Whether or not Atty. Salvado enticed the complainant into investing in his businesses by representing himself as a lawyer and businessman offering high interest, such that his version deserves credence.
• Whether or not the issuance of worthless checks in his private business dealings constitutes a violation of Rule 1.01 of Canon 1 and Rule 7.03 of Canon 7 of the Code of Professional Responsibility.
• Whether or not his attempts to evade payment of his obligations demonstrate a lack of moral character fit for membership in the Bar.
• Whether or not the administrative case may proceed independently of any civil or criminal case, including a prosecution under Batas Pambansa Bilang 22.

Applicable Provisions

Rule 1.01 of Canon 1 of the Code of Professional Responsibility provides:

A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

This is the rule the Court holds was violated when Salvado issued checks he knew were not funded.

Rule 7.03 of Canon 7 of the Code of Professional Responsibility provides:

A lawyer shall not engage in conduct that adversely reflects on the fitness to practice law, nor shall he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession.

This is the rule that reaches a lawyer's conduct even in his private business life.

Section 12, paragraph b, of Rule 139-B of the Rules of Court, on review by the Board of Governors, provides:

If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action.

This explains why the records reached the Supreme Court even without a petition for review, the Board's resolution being merely recommendatory.

Ruling

On the first issue, the Court sustained the findings of the Board and gave credence to the complainant's version, because of the unambiguous manner in which the narrative was laid down and its coherent reasoning. The public is inclined to rely on representations made by lawyers, and a man learned in the law is expected to make truthful representations when dealing with persons, clients or otherwise. The Court found it hard to believe that a person would not consider the profession of the person on whose businesses he would invest. Salvado's stature as a member of the Bar had, in one way or another, influenced the complainant's decision to invest.

On the second issue, the Court held that the denials could not belie the dishonor of the checks, and rejected the explanation that they were mere securities. Of all people, lawyers are expected to fully comprehend the legal import of bouncing checks. The Court recalled its ruling that the gravamen of the offense punished by Batas Pambansa Bilang 22 is the act of making and issuing a worthless check, a check dishonored upon presentation for payment, and that the law prohibits the making and circulation of worthless checks because of their deleterious effects on the public interest. The excuse of gullibility and inadvertence deserved scant consideration. When Salvado issued the worthless checks, he discredited the legal profession and created the public impression that laws were mere tools of convenience that could be used, bended and abused to satisfy personal whims and desires. The Court held that the issuance of worthless checks constituted gross misconduct and put the erring lawyer's moral character in serious doubt, even though it was not related to his professional duties, and that this dictum covered his business relationship with the complainant. Clearly, he violated Rule 1.01 and Rule 7.03.

On the third issue, the Court could not overlook Salvado's deceiving attempts to evade payment. Instead of displaying a committed attitude to his creditor, he refused to answer demands and even tried to make the complainant believe he no longer resided at his given address. These acts demonstrated lack of moral character to satisfy the responsibilities and duties imposed on lawyers as professionals and as officers of the court. The subsequent offers he made and the eventual sale of his properties to the complainant could not overturn his acts unbecoming of a member of the Bar.

On the fourth issue, the Court held that administrative cases against lawyers belong to a class of their own and may proceed independently of civil and criminal cases, including violations of Batas Pambansa Bilang 22. The only issue in disciplinary proceedings is the respondent's fitness to remain as a member of the Bar, and the Court's findings have no material bearing on other judicial actions the parties may choose to file against each other.

Doctrine

• A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct under Rule 1.01, and shall not engage in conduct that adversely reflects on his fitness to practice law under Rule 7.03, whether in public or private life.
• The issuance of worthless checks by a lawyer, even in his private business dealings and even if unrelated to his professional duties, constitutes gross misconduct that puts his moral character in serious doubt.
• A lawyer's stature as a member of the Bar influences the public's decision to trust him, so his representations carry weight and must be truthful.
• Administrative cases against lawyers are sui generis — a class of their own — and proceed independently of civil and criminal cases; the only issue is the respondent's fitness to remain a member of the Bar.

Disposition

The Court found Atty. Ronaldo P. Salvado guilty of violating Rule 1.01 of Canon 1 and Rule 7.03 of Canon 7 of the Code of Professional Responsibility and suspended him from the practice of law for two years, furnishing copies to the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts, with a copy attached to his personal records.

Remember This

The single line to memorize: a lawyer who issues worthless checks in his private business commits gross misconduct under Rules 1.01 and 7.03, and his being a lawyer is itself part of the deception. Examiners use this case to test the reach of the Code of Professional Responsibility into private business dealings and the rule that disbarment proceedings are independent of Batas Pambansa Bilang 22 prosecutions.