Mercado vs Atty.

Vetriolo
A brief discussion of the nature of the relationship between attorney and client and
the rule on attorney-client privilege that is designed to protect such relation is in
order.
In engaging the services of an attorney, the client reposes on him special powers of
trust and confidence. Their relationship is strictly personal and highly confidential
and fiduciary. The relation is of such delicate, exacting and confidential nature that
is required by necessity and public interest.[15] Only by such confidentiality and
protection will a person be encouraged to repose his confidence in an attorney. The
hypothesis is that abstinence from seeking legal advice in a good cause is an evil
which is fatal to the administration of justice.[16] Thus, the preservation and
protection of that relation will encourage a client to entrust his legal problems to an
attorney, which is of paramount importance to the administration of justice.[17] One
rule adopted to serve this purpose is the attorney-client privilege: an attorney is to
keep inviolate his clients secrets or confidence and not to abuse them.[18] Thus, the
duty of a lawyer to preserve his clients secrets and confidence outlasts the
termination of the attorney-client relationship,[19] and continues even after the
clients death.[20] It is the glory of the legal profession that its fidelity to its client
can be depended on, and that a man may safely go to a lawyer and converse with
him upon his rights or supposed rights in any litigation with absolute assurance that
the lawyers tongue is tied from ever disclosing it.[21] With full disclosure of the
facts of the case by the client to his attorney, adequate legal representation will
result in the ascertainment and enforcement of rights or the prosecution or defense
of the clients cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the factors
essential to establish the existence of the privilege, viz:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in
his capacity as such, (3) the communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance permanently protected (7) from
disclosure by himself or by the legal advisor, (8) except the protection be waived.
[22]
In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective attorney-client
relationship, and it is by reason of this relationship that the client made the
communication.
Matters disclosed by a prospective client to a lawyer are protected by the rule on
privileged communication even if the prospective client does not thereafter retain
the lawyer or the latter declines the employment.[23] The reason for this is to make
the prospective client free to discuss whatever he wishes with the lawyer without
fear that what he tells the lawyer will be divulged or used against him, and for the
lawyer to be equally free to obtain information from the prospective client.[24]

On the other hand, a communication from a (prospective) client to a lawyer for

some purpose other than on account of the (prospective) attorney-client relation is
not privileged. Instructive is the case of Pfleider v. Palanca,[25] where the client and
his wife leased to their attorney a 1,328-hectare agricultural land for a period of ten
years. In their contract, the parties agreed, among others, that a specified portion of
the lease rentals would be paid to the client-lessors, and the remainder would be
delivered by counsel-lessee to client's listed creditors. The client alleged that the list
of creditors which he had confidentially supplied counsel for the purpose of carrying
out the terms of payment contained in the lease contract was disclosed by counsel,
in violation of their lawyer-client relation, to parties whose interests are adverse to
those of the client. As the client himself, however, states, in the execution of the
terms of the aforesaid lease contract between the parties, he furnished counsel with
the confidential list of his creditors. We ruled that this indicates that client delivered
the list of his creditors to counsel not because of the professional relation then
existing between them, but on account of the lease agreement. We then held that a
violation of the confidence that accompanied the delivery of that list would partake
more of a private and civil wrong than of a breach of the fidelity owing from a
lawyer to his client.
(2) The client made the communication in confidence.
The mere relation of attorney and client does not raise a presumption of
confidentiality.[26] The client must intend the communication to be confidential.[27]
A confidential communication refers to information transmitted by voluntary act of
disclosure between attorney and client in confidence and by means which, so far as
the client is aware, discloses the information to no third person other than one
reasonably necessary for the transmission of the information or the accomplishment
of the purpose for which it was given.[28]
Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise
agreement prepared by a lawyer pursuant to the instruction of his client and
delivered to the opposing party,[29] an offer and counter-offer for settlement,[30] or
a document given by a client to his counsel not in his professional capacity,[31] are
not privileged communications, the element of confidentiality not being present.[32]
(3) The legal advice must be sought from the attorney in his professional capacity.
[33]
The communication made by a client to his attorney must not be intended for mere
information, but for the purpose of seeking legal advice from his attorney as to his
rights or obligations. The communication must have been transmitted by a client to
his attorney for the purpose of seeking legal advice.[34]
If the client seeks an accounting service,[35] or business or personal assistance,[36]
and not legal advice, the privilege does not attach to a communication disclosed for
such purpose.
Applying all these rules to the case at bar, we hold that the evidence on record fails
to substantiate complainants allegations. We note that complainant did not even

specify the alleged communication in confidence disclosed by respondent. All her

claims were couched in general terms and lacked specificity. She contends that
respondent violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents because the criminal
complaint disclosed facts relating to the civil case for annulment then handled by
respondent. She did not, however, spell out these facts which will determine the
merit of her complaint. The Court cannot be involved in a guessing game as to the
existence of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without any testimony
from the complainant as to the specific confidential information allegedly divulged
by respondent without her consent, it is difficult, if not impossible to determine if
there was any violation of the rule on privileged communication. Such confidential
information is a crucial link in establishing a breach of the rule on privileged
communication between attorney and client. It is not enough to merely assert the
attorney-client privilege.[37] The burden of proving that the privilege applies is
placed upon the party asserting the privilege.[38]
IN VIEW WHEREOF, the complaint against respondent Atty. Julito D. Vitriolo is hereby
DISMISSED for lack of merit.
Bote vs Sps. Veloso
Ruling:
This petition is meritorious.
Anent the first issue, Botes argument is that:
Although the original Complaint in Civil Case No. 96-282-MK is entitled: "For: Sum of
Money and/or Recovery of Possession of Real Property With Damages" the
allegations and the prayer both do not sustain the Recovery part of the title. It
should, therefore, be ignored. The allegations and the prayer of the Complaint only
support the Sum of Money case. Additionally, during the pre-trial of the case before
the RTC the parties stipulated to treat the case purely as a sum of money.27
(Emphasis supplied.)
In essence, Bote claims that the spouses Veloso did not raise the issue of their being
builders in good faith before the trial court; thus, they are precluded from raising
the issue for the first time on appeal. Pushing the point, Bote argues that the
spouses Veloso, in fact, stipulated in the Pre-Trial that the issue of possession was
being withdrawn from the complaint. Thus, Bote concludes, the CA erred in
considering and passing on the new issue.
We agree.
Section 15, Rule 44 of the Rules of Court limits the questions that may be raised on
appeal:

Section 15. Questions that may be raised on appeal. Whether or not the appellant
has filed a motion for new trial in the court below, he may include in his assignment
of errors any question of law or fact that has been raised in the court below and
which is within the issues framed by the parties. (Emphasis supplied.)
In Union Bank of the Philippines v. Court of Appeals,28 the Court clarified this
provision of the Rules of Court stating that, "It is settled jurisprudence that an issue
which was neither averred in the complaint nor raised during the trial in the court
below cannot be raised for the first time on appeal as it would be offensive to the
basic rules of fair play, justice and due process."
This principle forbids the parties from changing their theory of the case.
The "theory of the case" is defined in Blacks Law Dictionary as:
A comprehensive and orderly mental arrangement of principle and facts, conceived
and constructed for the purpose of securing a judgment or decree of a court in favor
of a litigant; the particular line of reasoning of either party to a suit, the purpose
being to bring together certain facts of the case in a logical sequence and to
correlate them in a way that produces in the decision makers mind a definite result
or conclusion favored by the advocate.29
The same term is defined in Agpalos Legal Words and Phrases as:
It is the legal basis of the cause of action or defense, which a party is not permitted
to change on appeal. (San Agustin v. Barrios, 68 Phil. 475 [1939])
A party is bound by the theory he adopts and by the cause of action he stands on
and cannot be permitted after having lost thereon to repudiate his theory and cause
of action and adopt another and seek to re-litigate the matter anew either in the
same forum or on appeal. (Arroyo v. House of Representatives Electoral Tribunal,
246 SCRA 384 [1995)30
In Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (formerly
Southern Energy Quezon, Inc.),31 the Court reiterated the thrust of the theory-ofthe-case principle in this wise:
It is already well-settled in this jurisdiction that a party may not change his theory of
the case on appeal. Such a rule has been expressly adopted in Rule 44, Section 15
of the 1997 Rules of Civil Procedure, which provides
SEC. 15. Questions that may be raised on appeal. Whether or not the appellant
has filed a motion for new trial in the court below, he may include in his assignment
of errors any question of law or fact that has been raised in the court below and
which is within the issues framed by the parties.
Thus, in Carantes v. Court of Appeals, this Court emphasized that
The settled rule is that defenses not pleaded in the answer may not be raised for
the first time on appeal. A party cannot, on appeal, change fundamentally the

nature of the issue in the case. When a party deliberately adopts a certain theory
and the case is decided upon that theory in the court below, he will not be
permitted to change the same on appeal, because to permit him to do so would be
unfair to the adverse party.
In the more recent case of Mon v. Court of Appeals, this Court again pronounced
that, in this jurisdiction, the settled rule is that a party cannot change his theory of
the case or his cause of action on appeal. It affirms that "courts of justice have no
jurisdiction or power to decide a question not in issue." Thus, a judgment that goes
beyond the issues and purports to adjudicate something on which the court did not
hear the parties, is not only irregular but also extrajudicial and invalid. The rule rests
on the fundamental tenets of fair play.1wphi1 (Emphasis supplied.)
Nevertheless, such rule admits of an exception as enunciated in Canlas v. Tubil,32 to
wit:
As a rule, a change of theory cannot be allowed. However, when the factual bases
thereof would not require presentation of any further evidence by the adverse party
in order to enable it to properly meet the issue raised in the new theory, as in this
case, the Court may give due course to the petition and resolve the principal issues
raised therein.
The instant case does not fall under this exception.
To stress, the issue of whether or not the spouses Veloso were builders in good faith
is a factual question that was never alleged, let alone proven. And as aptly stated
by the spouses Veloso themselves in their Appellants Brief dated May 23, 2001,33
"under Article 527 of the Civil Code, good faith is even always presumed and upon
him who alleges bad faith on the part of a possessor rests the burden of proof."34
Thus, in order to refute the spouses Velosos contention that they are builders in
good faith, it is necessary that Bote present evidence that they acted in bad faith.
Understandably, Bote did not present such evidence before the trial court because
good faith was not an issue then. It was only on appeal that the spouses Veloso
belatedly raised the issue that they were builders in good faith. Justice and fair play
dictate that the spouses Velosos change of their theory of the case on appeal be
disallowed and the instant petition granted.
Samson vs Atty. Era
Ruling
We affirm the findings of the IBP.
In his petition for disbarment, Samson charged Atty. Era with violating Canon 15 of
the Code of Professional Responsibility for representing conflicting interests by
accepting the responsibility of representing Sison in the cases similar to those in
which he had undertaken to represent Samson and his group, notwithstanding that
Sison was the very same person whom Samson and his group had accused with
Atty. Eras legal assistance. He had drafted the demand letters and the complaint-

affidavit that became the bases for the filing of the estafa charges against Sison and
the others in the RTC in Quezon City.
Atty. Eras contention that the lawyer-client relationship ended when Samson and
his group entered into the compromise settlement with Sison on April 23, 2002 was
unwarranted. The lawyer-client relationship did not terminate as of then, for the fact
remained that he still needed to oversee the implementation of the settlement as
well as to proceed with the criminal cases until they were dismissed or otherwise
concluded by the trial court. It is also relevant to indicate that the execution of a
compromise settlement in the criminal cases did not ipso facto cause the
termination of the cases not only because the approval of the compromise by the
trial court was still required, but also because the compromise would have applied
only to the civil aspect, and excluded the criminal aspect pursuant to Article 2034 of
the Civil Code.24
Rule 15.03, Canon 15 of the Code of Professional Responsibility provides that: A
lawyer shall not represent conflicting interests except by written consent of all
concerned given after a full disclosure of the facts. Atty. Era thus owed to Samson
and his group entire devotion to their genuine interest, and warm zeal in the
maintenance and defense of their rights.25 He was expected to exert his best
efforts and ability to preserve the clients cause, for the unwavering loyalty
displayed to his clients likewise served the ends of justice.26
In Hornilla v. Atty. Salunat,27 the Court discussed the concept of conflict of interest
in this wise:
There is conflict of interest when a lawyer represents inconsistent interests of two or
more opposing parties. The test is whether or not in behalf of one client, it is the
lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the
other client. In brief, if he argues for one client, this argument will be opposed by
him when he argues for the other client. This rule covers not only cases in which
confidential communications have been confided, but also those in which no
confidence has been bestowed or will be used. Also, there is conflict of interests if
the acceptance of the new retainer will require the attorney to perform an act which
will injuriously affect his first client in any matter in which he represents him and
also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency
of interests is whether the acceptance of a new relation will prevent an attorney
from the full discharge of his duty of undivided fidelity and loyalty to his client or
invite suspicion of unfaithfulness or double dealing in the performance thereof.28
The prohibition against conflict of interest rests on five rationales, rendered as
follows:
x x x. First, the law seeks to assure clients that their lawyers will represent them
with undivided loyalty. A client is entitled to be represented by a lawyer whom the
client can trust. Instilling such confidence is an objective important in itself. x x x.
Second, the prohibition against conflicts of interest seeks to enhance the
effectiveness of legal representation. To the extent that a conflict of interest
undermines the independence of the lawyers professional judgment or inhibits a

lawyer from working with appropriate vigor in the clients behalf, the clients
expectation of effective representation x x x could be compromised.
Third, a client has a legal right to have the lawyer safeguard the clients confidential
information xxx. Preventing use of confidential client information against the
interests of the client, either to benefit the lawyers personal interest, in aid of some
other client, or to foster an assumed public purpose is facilitated through conflicts
rules that reduce the opportunity for such abuse.
Fourth, conflicts rules help ensure that lawyers will not exploit clients, such as by
inducing a client to make a gift to the lawyer xxx.
Finally, some conflict-of-interest rules protect interests of the legal system in
obtaining adequate presentations to tribunals. In the absence of such rules, for
example, a lawyer might appear on both sides of the litigation, complicating the
process of taking proof and compromise adversary argumentation x x x. 29
The rule prohibiting conflict of interest was fashioned to prevent situations wherein
a lawyer would be representing a client whose interest is directly adverse to any of
his present or former clients. In the same way, a lawyer may only be allowed to
represent a client involving the same or a substantially related matter that is
materially adverse to the former client only if the former client consents to it after
consultation.30 The rule is grounded in the fiduciary obligation of loyalty.31
Throughout the course of a lawyer-client relationship, the lawyer learns all the facts
connected with the client's case, including the weak and strong points of the case.
Knowledge and information gathered in the course of the relationship must be
treated as sacred and guarded with care. It behooves lawyers not only to keep
inviolate the clients confidence, but also to avoid the appearance of treachery and
double-dealing, for only then can litigants be encouraged to entrust their secrets to
their lawyers, which is paramount in the administration of justice.32 The nature of
that relationship is, therefore, one of trust and confidence of the highest degree.33
Contrary to Atty. Eras ill-conceived attempt to explain his disloyalty to Samson and
his group, the termination of the attorney-client relationship does not justify a
lawyer to represent an interest adverse to or in conflict with that of the former
client. The spirit behind this rule is that the clients confidence once given should
not be stripped by the mere expiration of the professional employment. Even after
the severance of the relation, a lawyer should not do anything that will injuriously
affect his former client in any matter in which the lawyer previously represented the
client. Nor should the lawyer disclose or use any of the clients confidences acquired
in the previous relation.34 In this regard, Canon 17 of the Code of Professional
Responsibility expressly declares that: A lawyer owes fidelity to the cause of his
client and he shall be mindful of the trust and confidence reposed in him.
The lawyers highest and most unquestioned duty is to protect the client at all
hazards and costs even to himself.35 The protection given to the client is perpetual
and does not cease with the termination of the litigation, nor is it affected by the
clients ceasing to employ the attorney and retaining another, or by any other
change of relation between them. It even survives the death of the client.36

In the absence of the express consent from Samson and his group after full
disclosure to them of the conflict of interest, therefore, the most ethical thing for
Atty. Era to have done was either to outrightly decline representing and entering his
appearance as counsel for Sison, or to advice Sison to engage another lawyer for
herself. Unfortunately, he did neither, and should now suffer the proper sanction.