Floran v. Ediza

A.C. No. 5325 (October 19, 2011)

Atty. Ediza suspended for 6 months for misleading clients and misusing funds in property deals.

Facts:

Spouses Nemesio and Caridad Floran owned an unregistered parcel of land measuring 3.5525 hectares in San Martin, Villanueva, Misamis Oriental, which was covered by a tax declaration in the name of Sartiga Epal, a relative who had given the property to them. In August 1996, Esteban Valera filed a judicial foreclosure action against the Florans concerning a house on the land, prompting them to seek legal assistance from Atty. Roy Prule Ediza. Atty. Ediza filed a motion to dismiss the foreclosure case, which was granted by the Regional Trial Court (RTC) due to non-compliance with barangay conciliation procedures.

In 1997, the Florans sold a hectare of their land to Phividec Industrial Authority for P272,750, with payments made in installments. Atty. Ediza notarized the sale and later advised the Florans to have Epal sign a Deed of Absolute Sale to formalize the transfer of ownership. Caridad obtained Epal's consent, and a Deed of Absolute Sale was executed. Atty. Ediza received P125,463.38 from the sale for the purpose of titling the remaining land and other expenses.

However, after two years of inaction regarding the titling, the Florans demanded the return of their money, which Atty. Ediza refused. They later discovered that Atty. Ediza had a deed of sale executed by Epal in his favor for a portion of the land, which they had unknowingly signed. The Florans filed a complaint with the Integrated Bar of the Philippines (IBP) after Atty. Ediza's refusal to return their money and his misleading conduct regarding the documents.

Legal Issues:

  1. Did Atty. Ediza engage in unethical conduct by misleading the Florans into signing a deed of sale for a portion of their land?
  2. Did Atty. Ediza fail to fulfill his obligations regarding the titling of the remaining land and the return of the funds received from the Florans?

Arguments:

  • Complainants (Spouses Floran): They argued that Atty. Ediza misled them into signing a deed of sale for a portion of their land without their knowledge. They claimed that the money given to Atty. Ediza was intended for the titling of their property, and they demanded its return after he failed to register the land. They asserted that Atty. Ediza's actions constituted a breach of trust and unethical conduct.

  • Respondent (Atty. Ediza): Atty. Ediza contended that the Florans voluntarily gave him a portion of their land as payment for his legal services in the foreclosure case. He claimed that the amount he received was his rightful share from the sale of the land and that the Florans were aware of the deed of sale. He also argued that the Florans were not interested in the land and that he had no obligation to register it for them.

Court's Decision and Legal Reasoning:

The court agreed with the findings of the IBP, which had determined that Atty. Ediza had violated several provisions of the Code of Professional Responsibility. The court found that Atty. Ediza had deceived the Florans into signing a deed of sale without their knowledge and failed to fulfill his promise to register their property despite receiving a significant amount of money for that purpose. The court emphasized that lawyers are expected to maintain high standards of honesty, integrity, and fair dealing in their professional conduct.

The court highlighted that Atty. Ediza's actions were not only unethical but also constituted a breach of the trust placed in him by his clients. The court noted that the evidence presented by the Florans was credible, while Atty. Ediza's claims were inconsistent and lacked substantiation. Consequently, the court imposed a six-month suspension from the practice of law on Atty. Ediza and ordered him to return the funds received from the Florans along with the documents he misled them into signing.

Significant Legal Principles Established:

  1. Duty of Candor and Fairness: Lawyers must observe candor, fairness, and loyalty in all dealings with clients, as outlined in Canon 15 of the Code of Professional Responsibility.
  2. Prohibition Against Deceitful Conduct: Engaging in unlawful, dishonest, immoral, or deceitful conduct is strictly prohibited under Rule 1.01 of Canon 1.
  3. Negligence in Legal Matters: A lawyer's failure to diligently handle a legal matter entrusted to them can render them liable under Rule 18.03 of Canon 18.

The case underscores the importance of ethical conduct in the legal profession and the consequences of failing to uphold these standards.