HENRY G. LACIDA, COMPLAINANT, vs. . ATTY. REJOICE S. SUBEJANO.
- G.R. Number: A.C. No. 13361
- Promulgated: 2025-02-12
- Ponente: CAGUIOA, J.
Doctrine
## Facts of the Case Henry G. Lacida, on behalf of Megamitch Financial Resources Corporation (Megamitch), filed a disbarment complaint against Atty. Rejoice S. Subejano (respondent) in connection with a loan respondent obtained from Megamitch. In January 2015, respondent and Mr. Alejandro Rentillosa applied for a PHP 15,000,000.00 loan from Megamitch, which at the time, employed respondent's law firm, Subejano & Ditucalan (SD Law), as its retained legal counsel. Respondent allegedly leveraged his relationship with Megamitch's CEO, Mr. Alain De Schouwer, and misrepresented their business interests in Iligan City and Lanao del Norte to secure funds totalling PHP 11,679,900.00. Megamitch later found discrepancies in respondent's business claims and that no formal loan agreement was executed, leading to a demand for the return of the funds and the filing of a criminal case for Estafa and this disbarment complaint. Respondent admitted obtaining the loan for a business venture and stated he had previously repaid a PHP 500,000.00 loan from Megamitch. He denied misrepresentation, claiming they submitted a business proposal and feasibility study, and that loan proceeds were used to purchase equipment inspected by Megamitch. He attributed his failure to fully repay the loan to an unfavorable political climate. The Investigating Commissioner initially found respondent guilty of violating **Canon 16, Rule 16.04 of the Code of Professional Responsibility (CPR)** and recommended a five-year suspension. The IBP Board of Governors (IBP-BOG) adopted the findings but reduced the penalty to a six-month suspension. However, upon respondent's motion for reconsideration, which included a Compromise Agreement with Megamitch and complainant's non-objection (provided the complaint could be revived if the agreement was breached), the IBP-BOG dismissed the complaint. ## Issues 1. Is Atty. Rejoice S. Subejano administratively liable for violating the prohibition against borrowing money from a client under the Code of Professional Responsibility and Accountability (CPRA)? ## Decision / Rationale **Issue 1:** The Court determined that **Atty. Rejoice S. Subejano is not administratively liable** for violating the prohibition against borrowing money from a client. The Court found that the loan transaction between Megamitch and respondent falls under the exceptions to the prohibition against borrowing money from clients, as provided in **Canon III, Section 52 of the Code of Professional Responsibility and Accountability (CPRA)**, which superseded the CPR and applies retroactively. The Court held that: * The transaction is a **standard commercial transaction** relating to Megamitch's business, which is lending and financing, as affirmed by both parties. * An **existing business relationship** between Megamitch and respondent was established by a prior loan in 2014, which respondent fully repaid. * Though a formal loan agreement was not signed, the parties' allegations confirm the **perfection of a contract of loan**, which is an exception covered by the CPRA. Furthermore, the Court found a **lack of sufficient evidence** to substantiate the claims of abuse of trust and misrepresentation by the respondent. The only evidence presented, a certification that respondent had no business records in Iligan City, was deemed insufficient to warrant the Court's disciplinary power. The Court also rejected the complainant's request to revive the complaint should respondent fail to comply with the Compromise Agreement, as it cannot accede to such a prayer in this administrative case. ## Doctrines - **Canon III, Section 52 of the Code of Professional Responsibility and Accountability (CPRA):** This section prohibits a lawyer from borrowing money from a client during the existence of the lawyer-client relationship, unless the client's interests are fully protected by the nature of the case or by independent advice. - **Exceptions to the Prohibition on Lending and Borrowing…
Keywords
Code of Professional Responsibility Canon 16 Rule 16.04, Code of Professional Responsibility and Accountability Canon III Section 52, Trust and Confidence in Lawyer-Client Relationship, Disbarment, Lawyer's Loan from Client, Legal Ethics, Professional Misconduct, Lawyer-Client Relationship, Compromise Agreement, Substantial Evidence, Administrative Liability, Retroactive Application, Per Curiam, Complaint Dismissed, Lack of Merit, loan, megamitch, business, dated, client