The Supreme Court disbarred Atty. Leonuel N. Mas for defrauding a foreign client, Keld Stemmerik, by misrepresenting Philippine land ownership laws and misappropriating funds. This decision reinforces the high ethical standards required of lawyers, emphasizing their duty to uphold the law, act honestly, and protect client interests. It serves as a strong warning against deceitful practices within the legal profession, ensuring that lawyers who violate the trust placed in them face severe consequences, including disbarment and potential criminal charges.

Betrayal of Trust: When a Lawyer Exploits a Client’s Ignorance for Personal Gain

Keld Stemmerik, a Danish citizen, sought legal advice from Atty. Leonuel N. Mas regarding the purchase of real property in the Philippines. Mas, aware that Philippine law prohibits foreign land ownership, falsely assured Stemmerik that he could legally acquire property. He then proposed the purchase of an 86,998 sq.m. property in Zambales, further deceiving Stemmerik. Trusting Mas’s legal expertise, Stemmerik engaged his services and paid a P400,000 fee for the preparation of necessary documents. The lawyer then prepared falsified documents, and agreements and misappropriated the funds for his use. The Supreme Court thus decided on the correct punishment for the fraudulent lawyer.

Building on this deception, Mas prepared a contract to sell between Stemmerik (represented by Mas) and a purported owner, Bonifacio de Mesa. Following this, he drafted a deed of sale transferring the property to Ailyn Gonzales and created an agreement stating that Stemmerik provided the funds for this purchase. Mas received P3.8 million from Stemmerik for the property purchase, issuing an acknowledgment receipt. However, after the execution of these documents, Mas became unreachable, avoiding Stemmerik’s attempts to inquire about the property registration. The court finds that the notice to Atty. Mas was properly given despite the respondent abandoning his last known address.

Upon further investigation, Stemmerik discovered that aliens could not own land in the Philippines. Further verification revealed the property was inalienable, located within a former U.S. Military Reservation. Stemmerik then filed a disbarment complaint against Mas with the Integrated Bar of the Philippines (IBP). Mas failed to respond to the complaint or appear at mandatory conferences. The IBP’s Commission on Bar Discipline (CBD) found Mas guilty of misleading Stemmerik, preparing falsified documents, and misappropriating funds. The CBD recommended his disbarment, a decision affirmed by the IBP Board of Governors with an additional requirement to return P4.2 million to Stemmerik.

The Supreme Court emphasized that lawyers must uphold the law and the integrity of the bar. Mas violated his oath as a lawyer and the Code of Professional Responsibility. Specifically, he gave advice contradicting fundamental constitutional policy, showing disrespect for the Constitution and gross ignorance of basic law. By advising Stemmerik that a foreigner could legally acquire real estate, he deliberately misled his client, violating Canons 1, 7, 15, 16 and 17 of the Code of Professional Responsibility. These canons require lawyers to uphold the Constitution, maintain integrity, observe candor, and hold client funds in trust.

CANON 1 – A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES.

Rule 1.01. – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Ultimately, the Supreme Court held that Mas’s actions warranted disbarment. He not only deceived his client but also engaged in unlawful conduct, betraying the trust placed in him. Mas abused his position as a lawyer for personal gain, demonstrating a clear and present danger to the rule of law and the legal system. His actions tarnished the image of the bar and degraded the integrity of the legal profession, justifying the severe penalty of disbarment.

FAQs

What was the key issue in this case?	The key issue was whether Atty. Leonuel N. Mas should be disbarred for defrauding his foreign client, Keld Stemmerik, by misrepresenting Philippine land ownership laws and misappropriating funds. The Court ultimately found him guilty of serious misconduct.
What did Atty. Mas misrepresent to his client?	Atty. Mas misrepresented that Stemmerik, a Danish citizen, could legally acquire real property in the Philippines, despite constitutional prohibitions on foreign land ownership. He also falsely assured Stemmerik that a specific property was alienable, further deceiving his client.
How much money did Atty. Mas misappropriate from his client?	Atty. Mas misappropriated a total of P4.2 million from Stemmerik, which included P400,000 for legal fees and P3.8 million intended for the purchase of the property. The Court ordered him to return the full amount with interest.
What were the specific violations of the Code of Professional Responsibility?	Atty. Mas violated Canons 1, 7, 15, 16 and 17 of the Code of Professional Responsibility, which pertain to upholding the Constitution and laws, maintaining integrity, observing candor, and holding client funds in trust. His actions were dishonest and deceitful, warranting disbarment.
What was the role of the Integrated Bar of the Philippines (IBP) in this case?	The IBP, through its Commission on Bar Discipline (CBD), investigated the disbarment complaint against Atty. Mas. The CBD recommended his disbarment, which was affirmed by the IBP Board of Governors, leading to the Supreme Court’s final decision.
What is the significance of this case for foreign investors in the Philippines?	This case highlights the importance of due diligence and seeking reliable legal advice when investing in the Philippines, especially regarding real property. It serves as a cautionary tale against relying on unscrupulous lawyers who may exploit their clients’ ignorance.
What is the penalty for lawyers who engage in dishonest or deceitful conduct?	Lawyers who engage in dishonest or deceitful conduct face severe penalties, including suspension or disbarment, depending on the gravity of the offense. Disbarment results in the removal of the lawyer’s name from the Roll of Attorneys.
What steps did the Supreme Court take beyond disbarment in this case?	In addition to disbarment and ordering restitution, the Supreme Court directed the National Bureau of Investigation (NBI) to locate Atty. Mas and file appropriate criminal charges against him. The NBI was further directed to report regularly to the Court on its actions.

This case stands as a stern reminder to members of the bar regarding the importance of upholding ethical standards, especially concerning honesty and fidelity to client interests. The Supreme Court’s decision underscores its commitment to safeguarding the integrity of the legal profession and protecting the public from unscrupulous lawyers. Cases like this serve as a continued encouragement for reforms within the Philippine legal system.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Keld Stemmerik v. Atty. Leonuel N. Mas, A.C. No. 8010, June 16, 2009