CANON 15
00 was paid to him as part of the acceptance
A.C. No. 10558 February 23, 2015
MICHAEL RUBY, Complainant,
vs.
ATTY. ERLINDA B. ESPEJO and ATTY. RUDOLPH DILLA
BAYOT, Respondents.
DECISION
REYES, J.:
This is an administrative complaint1 filed by Michael
Ruby (complainant) with the Commission on Bar
Discipline (CBD) of the Integrated Bar of the Philippines
(IBP) against Atty. Erlinda B. Espejo (Atty. Espejo) and
Atty. Rudolph Dilla Bayot (Atty. Bayot) (respondents) for
violation of the Code of Professional Responsibility.
The Facts
The complainant alleged that he and his mother,
Felicitas Ruby Bihla (Felicitas), engaged the services of
the respondents in connection with a case for
cancellation and nullification of deeds of donation.
Pursuant to the retainer agreement2 dated August 29,
2009, the complainant and Felicitas would pay Atty.
Espejo the amount of ₱100,000.00 as acceptance fee,
₱70,000.00 of which was actually paid upon the signing
of the agreement and the remaining ₱30,000.00 to be
paid after the hearing on the prayer for the issuance of
a temporary restraining order (TRO). The complainant
and Felicitas likewise agreed to pay the amount of
₱5,000.00 as appearance fee for every hearing, which
was apparently later reduced to ₱4,000.00.
On September 15, 2009, the complainant gave Atty.
Espejo the amount of ₱50,000.00 as payment for filing
fee.3 On September 16, 2009, Atty. Espejo filed the
complaint for nullification and cancellation of deeds of
donation with the Regional Trial Court (RTC) of Quezon
City, Branch 219. However, the actual filing fee that
was paid by her only amounted to 7,561.00;4 she failed
to account for the excess amount given her despite
several demand letters5 therefor.
On September 23, 2009, Atty. Espejo allegedly asked
the complainant to give Atty. Bayot the amount of
₱30,000.00 – the remaining balance of the acceptance
fee agreed upon – notwithstanding that the prayer for
the issuance of a TRO has yet to be heard. The
complainant asserted that the same was not yet due,
but Atty. Espejo told him that Atty. Bayot was in dire
need of money. The complainant gave Atty. Bayot the
amount of ₱8,000.00 supposedly as partial payment for
the balance of the acceptance fee and an additional
₱4,000.00 as appearance fee for the September 22, 2009
hearing.6
On September 25, 2009, Atty. Espejo called the
complainant informing him of the need to file a
separate petition for the issuance of a TRO. She
allegedly asked for ₱50,000.00 to be used as
"representation fee." The complainant was able to
bargain with Atty. Espejo and gave her ₱20,000.00
instead.7
Meanwhile, on September 24, 2009, the RTC issued an
Order8 denying the complainant’s prayer for the
issuance of a TRO. The complainant alleged that the
respondents failed to apprise him of the denial of his
prayer for the issuance of a TRO; that he only came to
know of said denial on November 3, 2009 when he
visited the RTC.9
On October 23, 2009, the complainant deposited the
amount of ₱4,000.00 to the bank account of Atty. Bayot
as appearance fee for the hearing on the motion to
serve summons through publications, which was set at
2:00 p.m. on even date. However, Atty. Bayot allegedly
did not appear in court and instead met with the
complainant at the lobby of the Quezon City Hall of
Justice, telling them that he already talked to the clerk
of court who assured him that the court would grant
their motion.10
Thereafter, the complainant alleged, the respondents
failed to update him as to the status of his complaint.
He further claimed that Atty. Bayot had suddenly denied
that he was their counsel. Atty. Bayot asserted that it
was Atty. Espejo alone who was the counsel of the
complainant and that he was merely a collaborating
counsel.
In its Order11 dated January 7, 2010, the IBP-CBD
directed the respondents to submit their respective
answers to the complaint.
In his Answer,12 Atty. Bayot claimed that he was not
the counsel of the complainant; that he merely assisted
him and Atty. Espejo. He averred that Atty. Espejo, with
the complainant’s consent, sought his help for the sole
purpose of drafting a complaint. He pointed out that it
was Atty. Espejo who signed and filed the complaint in
the RTC.13
Atty. Bayot further pointed out that he had no part in
the retainer agreement that was entered into by the
complainant, Felicitas, and Atty. Espejo. He also denied
having any knowledge as to the ₱50,000.00 that was
paid to Atty. Espejo as filing fees.14
As to the ₱12,000.00 that was given him, he claimed
that he was entitled to ₱4,000.00 thereof since the said
amount was his appearance fee. He pointed out that he
appeared before the RTC’s hearing for the issuance of a
TRO on September 22, 2009. On the other hand, the
₱8,000.
fee, which was then already due since the RTC had
already heard their prayer for the issuance of a TRO.15
He also denied any knowledge as to the ₱20,000.00 that
was paid to Atty. Espejo purportedly for "representation
fee" that would be used to file a new petition for the
issuance of a TRO.16
Atty. Bayot admitted that he was the one who drafted
the motion to serve summons through publication, but
pointed out that it was Atty. Espejo who signed and
filed it in the RTC. He also admitted that he was the one
who was supposed to attend the hearing of the said
motion, but claimed that he was only requested to do so
by Atty. Espejo since the latter had another
commitment. He denied requesting from the
complainant the amount of ₱4,000.00 as appearance
fee, alleging that it was the latter who insisted on
depositing the same in his bank account.17
During the said hearing, Atty. Bayot claimed that when
he checked the court’s calendar, he noticed that their
motion was not included. Allegedly, the clerk of court
told him that she would just tell the judge to consider
their motion submitted for resolution.18
On the other hand, Atty. Espejo, in her Answer,19
denied asking for ₱50,000.00 from the complainant as
filing fees. She insisted that it was the complainant who
voluntarily gave her the money to cover the filing fees.
She further alleged that she was not able to account for
the excess amount because her files were destroyed
when her office was flooded due to a typhoon. She also
denied having asked another ₱50,000.00 from the
complainant as "representation fee," asserting that the
said amount was for the payment of the injunction bond
once the prayer for the issuance of a TRO is issued.
Findings of the Investigating Commissioner
On May 3, 2011, after due proceedings, the Investigating
Commissioner issued a Report and Recommendation,20
which recommended the penalty of censure against the
respondents. The Investigating Commissioner pointed
out that Atty. Bayot and the complainant had a lawyer-
client relationship notwithstanding that the former was
not the counsel of record in the case. That his admission
that he was a collaborating counsel was sufficient to
constitute a lawyer client relationship. Moreover,
considering that Atty. Bayot initially received the
amount of ₱12,000.00 from the complainant, the
Investigating Commissioner opined that he can no longer
deny that he was the lawyer of the complainant. The
Investigating Commissioner further found that:
Parenthetically, Respondents had asked and demanded
prompt payment of their attorney’s fees or appearance
fees and even asked for amounts for dubious purposes
yet they, just the same, performed their duties to their
clients leisurely and lethargically. Worse, when the
trusting Complainant had noticed that his case was
headed for disaster and wanted Respondents to explain
their obviously slothful and listless services, they
disappeared or became evasive thus fortifying the
conclusion that they indeed have performed and carried
out their duties to Complainant way below the standards
set by the Code of [P]rofessional Responsibility.21
Nevertheless, the Investigating Commissioner found that
the complainant failed to prove that he indeed suffered
injury as a result of the respondents’ conduct and,
accordingly, should only be meted the penalty of
censure.
Findings of the IBP Board of Governors
On March 20, 2013, the IBP Board of Governors issued a
Resolution,22 which adopted and approved the
recommendation of the Investigating Commissioner,
albeit with the modification that the penalty imposed
upon Atty. Espejo and Atty. Bayot was increased from
censure to suspension from the practice of law for a
period of one year.
Atty. Bayot moved to reconsider the Resolution dated
March 20, 2013 issued by the IBP Board of Governors.23
The complainant likewise filed a motion for
reconsideration, asking the IBP Board of Governors to
order the respondents to refund to him the amount he
paid to the respondents.24 In the meantime, Atty.
Espejo passed away.25
On March 22, 2014, the IBP Board of Governors issued a
Resolution,26 which dismissed the case insofar as Atty.
Espejo in view of her demise. The IBP Board of
Governors affirmed Atty. Bayot’s suspension from the
practice of law for a period of one year.
On December 3, 2014, the Court issued a Resolution,27
which, inter alia, considered the case closed and
terminated as to Atty. Espejo on account of her death.
Accordingly, the Court’s disquisition in this case would
only be limited to the liability of Atty. Bayot.
The Issue
The issue in this case is whether Atty. Bayot violated the
Code of Professional Responsibility, which would
warrant the imposition of disciplinary sanction.
Ruling of the Court
After a thorough perusal of the respective allegations of
the parties and the circumstances of this case, the
Court modifies the findings of the Investigating
Commissioner and the IBP Board of Governors.
Atty. Bayot claimed that he is not the counsel of record
of the complainant in the case before the RTC.1âwphi1
He pointed out that he had no part in the retainer
agreement entered into by the complainant and Atty.
Espejo. Thus, Atty. Bayot claimed, the complainant had
no cause of action against him.
The Court does not agree.
It is undisputed that Atty. Espejo was the counsel of
record in the case that was filed in the RTC. Equally
undisputed is the fact that it was only Atty. Espejo who
signed the retainer agreement. However, the evidence
on record, including Atty. Bayot’s admissions, points to
the conclusion that a lawyer-client relationship existed
between him and the complainant.
Atty. Bayot was the one who prepared the complaint
that was filed with the RTC. He was likewise the one
who prepared the motion to serve summons through
publication. He likewise appeared as counsel for the
complainant in the hearings of the case before the RTC.
He likewise advised the complainant on the status of the
case.
More importantly, Atty. Bayot admitted that he received
₱8,000.00, which is part of the acceptance fee indicated
in the retainer agreement, from the complainant. It is
true that it was Atty. Espejo who asked the complainant
to give Atty. Bayot the said amount. However, Atty.
Bayot admitted that he accepted from the complainant
the said ₱8,000.00 without even explaining what the
said amount was for.
The foregoing circumstances clearly established that a
lawyer-client relationship existed between Atty. Bayot
and the complainant. "Documentary formalism is not an
essential element in the employment of an attorney;
the contract may be express or implied. To establish the
relation, it is sufficient that the advice and assistance of
an attorney is sought and received in any matter
pertinent to his profession."28 Further, acceptance of
money from a client establishes an attorney-client
relationship.29 Accordingly, as regards the case before
the RTC, the complainant had two counsels – Atty.
Espejo and Atty. Bayot.
The Code of Professional Responsibility provides that:
CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL
MONEYS AND PROPERTIES OF HIS CLIENTTHAT MAY COME
INTO HIS POSSESSION.
Rule 16.01 – A lawyer shall account for all money or
property collected or received for or from the client.
Rule 16.02 – A lawyer shall keep the funds of each client
separate and apart from his own and those of others
kept by him.
xxxx
CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH
COMPETENCE AND DILIGENCE. x x x x
Rule 18.03 – A lawyer shall not neglect a legal matter
entrusted to him, and his negligence in connection
therewith shall render him liable.
Rule 18.04 – A lawyer shall keep the client informed of
the status of his case and shall respond within a
reasonable time to the client’s request for information.
Accordingly, Atty. Bayot owes fidelity to the cause of
the complainant and is obliged to keep the latter
informed of the status of his case. He is likewise bound
to account for all money or property collected or
received from the complainant. He may be held
administratively liable for any inaptitude or negligence
he may have had committed in his dealing with the
complainant.
In Del Mundo v. Capistrano,30 the Court emphasized
that:
Indeed, when a lawyer takes a client’s cause, he
covenants that he will exercise due diligence in
protecting the latter’s rights. Failure to exercise that
degree of vigilance and attention expected of a good
father of a family makes the lawyer unworthy of the
trust reposed on him by his client and makes him
answerable not just to his client but also to the legal
profession, the courts and society. His workload does
not justify neglect in handling one’s case because it is
settled that a lawyer must only accept cases as much as
he can efficiently handle.
Moreover, a lawyer is obliged to hold in trust money of
his client that may come to his possession.1âwphi1 As
trustee of such funds, he is bound to keep them
separate and apart from his own. Money entrusted to a
lawyer for a specific purpose such as for the filing and
processing of a case if not utilized, must be returned
immediately upon demand. Failure to return gives rise
to a presumption that he has misappropriated it in
violation of the trust reposed on him. And the
conversion of funds entrusted to him constitutes gross
violation of professional ethics and betrayal of public
confidence in the legal profession.31 (Citations omitted)
Nevertheless, the administrative liability of a lawyer for
any infractions of his duties attaches only to such
circumstances, which he is personally accountable for.
It would be plainly unjust if a lawyer would be held
accountable for acts, which he did not commit.
The Investigating Commissioner’s findings, which was
adopted by the IBP Board of Governors, did not make a
distinction as to which specific acts or omissions the
respondents are each personally responsible for. This is
inequitable since either of the respondents may not be
held personally liable for the infractions committed by
the other.
Atty. Bayot may not be held liable for the failure to
account for and return the excess of the ₱50,000.00
which was paid by the complainant for the filing fees.
The evidence on record shows that it was Atty. Espejo
alone who received the said amount and that she was
the one who paid the filing fees when the complaint was
filed with the RTC. That Atty. Bayot had no knowledge
of the said amount paid by the complainant for the
filing fees is even admitted by the complainant himself
during the proceedings before the IBP-CBD, viz:
ATTY. BAYOT: So, Atty. Espejo ask you for ₱50,000[.00]
as filing fee.
MR. RUBY: Admitted.
ATTY. BAYOT: That when he asked you about that, Atty.
Bayot was not present.
MR. RUBY: Admitted.
xxxx
ATTY. BAYOT: That later on you gave Atty. Espejo the
₱50,000[.00].
MR. RUBY: Admitted.
ATTY. BAYOT: That Atty. Bayot was not also present at
that time.
MR. RUBY: Admitted.
xxxx
ATTY. BAYOT: That never did Atty. Bayot ask you or
followed-up from you the ₱50,000[.00] that Atty. Espejo
was asking as filing fee?
MR. RUBY: Admitted.
xxxx
MR. RUBY: You have nothing to do with the ₱50,000[.00]
that was Atty. Espejo.32
Further, in her Answer, Atty. Espejo admitted that she
was the one who failed to account for the filing fees,
alleging that the files in her office were destroyed by
flood. Likewise, the demand letters written by the
complainant, which were seeking the accounting for the
₱50,000.00 filing fee, were all solely addressed to Atty.
Espejo. Clearly, Atty. Bayot may not be held
administratively liable for the failure to account for the
filing fees.
Atty. Bayot cannot also be held liable for the ₱20,000.00
which Atty. Espejo asked from the complainant for
"representation fee." The complainant failed to adduce
any evidence that would establish that Atty. Bayot knew
of and came into possession of the said amount paid by
the complainant.
On the other hand, Atty. Bayot is legally entitled to the
₱8,000.00 he received from the complainant on
September 23, 2009, the same being his share in the
acceptance fee agreed to by the complainant in the
retainer agreement. He is likewise legally entitled to
the ₱4,000.00 from the complainant on even date as it
is the payment for his appearance fee in the hearing for
the issuance of a TRO on September 22, 2009.
However, Atty. Bayot is not entitled to the ₱4,000.00
which the complainant deposited to his bank account on
October 23, 2009. Atty. Bayot admitted that there was
no hearing scheduled on the said date; their motion to
serve summons through publication was not included in
the RTC’s calendar that day. Accordingly, Atty. Bayot is
obliged to return the said amount to the complainant.
As regards the complainant’s charge of gross neglect
against Atty. Bayot, the Court finds the same
unsubstantiated. The Court has consistently held that in
suspension or disbarment proceedings against lawyers,
the lawyer enjoys the presumption of innocence, and
the burden of proof rests upon the complainant to prove
the allegations in his complaint.33
A lawyer may be disbarred or suspended for gross
misconduct or for transgressions defined by the rules as
grounds to strip a lawyer of professional license.
Considering, however, the serious consequences of
either penalty, the Court will exercise its power to
disbar or suspend only upon a clear, convincing, and
satisfactory proof of misconduct that seriously affects
the standing of a lawyer as an officer of the court and as
member of the bar.
The complainant merely alleged that, after the hearing
on the motion to serve summons through publication,
the respondents had "made themselves scarce" and
failed to update him on the status of the case before
the RTC. However, other than his bare allegations, the
complainant failed to present any evidence that would
show that Atty. Bayot was indeed remiss in his duties to
the complainant.
However, the complainant’s November 4, 2009 letter34
to Atty. Espejo tells a different story. In the said letter,
the complainant asked Atty. Espejo to withdraw as
being the counsel of record in the case before the RTC
in favor of Atty. Bayot since he was the one who
actually prepared the pleadings and attended the
hearings of their motions. In any case, the charge of
neglect against Atty. Bayot was premature, if not
unfair, considering that, at that time, the case before
the RTC was still in the early stages; the pre-trial and
trial have not even started yet. That they lost their bid
for the issuance of a TRO is not tantamount to neglect
on the part of Atty. Bayot.
However, Atty. Bayot is not entirely without fault. This
administrative complaint was brought about by his
intervention when the complainant sought the legal
services of Atty. Espejo. Atty. Bayot undertook to
prepare the complaint to be filed with the RTC and the
motion to serve summons through publication, attended
the hearings, and advised the complainant as to the
status of the case without formally entering his
appearance as counsel of record. He was able to obtain
remuneration for his legal services sans any direct
responsibility as to the progress of the case. Atty. Bayot
is reminded to be more circumspect in his dealings with
clients. WHEREFORE, Atty. Rudolph Dilla Bayot is hereby
ADMONISHED to exercise more prudence and
judiciousness in dealing with his clients. He is also
ordered to return to Michael Ruby within fifteen (15)
days from notice the amount of Four Thousand Pesos
(₱4,000.00) representing his appearance fee received
from the latter on October 23, 2009 with a warning that
failure on his part to do so will result in the imposition
of stiffer disciplinary action.
SO ORDERED.
A.C. No. 9395 November 12, 2014
DARIA O. DAGING, Complainant,
vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This administrative complaint for disbarment arose from
an Affidavit Complaint1 filed by Daria O. Daging
(complainant) before the Integrated Bar of the
Philippines (IBP), Benguet Chapter,2 against Atty. Riz
Tingalon L. Davis (respondent).
Antecedents
Complainant was the owner and operator of Nashville
Country Music Lounge. She leased from Benjie Pinlac
(Pinlac) a building spaGe located at No. 22 Otek St.,
Baguio City where she operated the bar.
Meanwhile, complainant received a Retainer Proposal3
from Davis & Sabling Law Office signed by respondent
and his partner Atty. Amos Saganib Sabling (Atty.
Sabling). This eventually resulted in the signing by the
complainant, the respondent and Atty. Sabling of a
Retainer Agreement4 dated March 7, 2005.
Because complainant was delinquent in paying the
monthly rentals, Pinlac terminated the lease. Together
with Novie Balageo (Balageo) and respondent, Pinlac
went to complainant's music bar, inventoried all the
equipment therein, and informed her that Balageo
would take over the operation of the bar. Complainant
averred that subsequently respondent acted as business
partner of Balageo in operating the bar under her
business name, which they later renamed Amarillo Music
Bar.
Complainant likewise alleged that she filed an
ejectment case against Pinlac and Balageo before the
Municipal Trial Court in Cities (MTCC), Branch 1, Baguio
City. At that time, Davis & Sabling Law Office was still
her counsel as their Retainer Agreement remained
subsisting and in force. However, respondent appeared
as counsel for Balageo in that ejectment case and filed,
on behalf of the latter, an Answer with Opposition to
the Prayer for the Issuance of a Writ of Preliminary
Injunction.5
In his Comment,6 respondent denied participation in the
takeover or acting as a business partner of Balageo in
the operation of the bar. He asserted that Balageo is the
sole proprietress of the establishment. He insisted that
it was Atty. Sabling, his partner, who initiated the
proposal and was in fact the one who was able to
convince complainant to accept the law office as her
retainer. Respondent maintained that he never obtained
any knowledge or information regarding the business of
complainant who used to consult only Atty. Sabling.
Respondent admitted though having represented
Balageo in the ejectment case, but denied that he took
advantage of the Retainer Agreement between
complainant and Davis and Sabling Law Office. Thus:
3.a Prior to the engagement of the Complainant of the
DAVIS and SABLING LAW OFFICE as her retainer, Novie
Balageo was already one of the Clients of Respondent in
several cases;
3.b Sometime in the last week of the month of May
2005, while Respondent was in his office doing some
legal works, Novie Balageo called up Respondent
informing the latter that his assistance is needed for
purposes of conducting an inventory of all items at the
former Nashville Country Music Lounge;
3.c Respondent [asked] Novie Balageo [the purpose of]
the inventory [to which] the latter x xx responded x xx
that she entered into a lease contract with the present
administrator of the building, Benjie Pinlac;
3.d Respondent, to his disbelief requested Novie
Balageo to go [to] the LAW OFFICE for further
clarification of the matter. Thereafter, Respondent was
later informed that the business of Complainant was
taken over and operated by Mr. Benjie Pinlac for seven
days. Furthermore, Mr. Benjie Pinlac offered the said
place to Novie Balageo which the latter readily
accepted;
3.e [Left] with no recourse, Respondent requested one
of his staff to assist Novie Balageo in conducting an
inventory. Furthermore, Respondent never acted as
partner of Novie Balageo in operating the former
Nashville Country Music Lounge;
3.f When Complainant filed the civil case for Ejectment
against Novie Balageo and Benjie Pinlac, Respondent
represented the former thereof without taking
advantage of the retainership contract between the DA
VIS and SABLING LAW OFFICE [and] Complainant as
Respondent has no knowledge or information of any
matters related by complainant to Atty. Sabling
regarding the former' s business;
3.g While the Complaint was pending, respondent was
xx x informed by Novie Balageo and Benjie Pinlac of the
truth of all matters x x x which x x x Respondent [was
unaware of];
3.h However, for the interest of justice and fair play, x
x x Respondent [deemed it prudent] to xx x withdraw as
Counsel for Novie Balageo. Hence, Respondent filed his
Motion to Withdraw As Counsel. x x x
3.i The civil case was subsequently dismissed for lack of
jurisdiction over the [Complaint's] subject matter. x x
x7
On October 15, 2008, the Investigating Commissioner
rendered a Report and Recommendation8 finding
respondent guilty of betrayal of his client's trust and for
misuse of information obtained from his client to the
disadvantage of the latter and to the advantage of
another person. He recommended that respondent be
suspended from the practice oflaw for a period of one
year.
On December 11, 2008, the IBP Board of Governors
adopted and approved the Report and Recommendation
of the Investigating Commissioner.9 Upon motion of the
respondent, it reduced the penalty imposed to six
months suspension considering that there is no proof
that respondent actually handled any previous legal
matters involving complainant.10
Our Ruling
It is undisputed that complainant entered into a
Retainer Agreement dated March 7, 2005 with
respondent's law firm. This agreement was signed by the
respondent and attached to the rollo of this case. And
during the subsistence of said Retainer Agreement,
respondent represented and defended Balageo, who was
impleaded as one of the defendants in the ejectment
case complainant filed before the MTCC of Baguio City.
In fact, respondent filed on behalf of said Balageo an
Answer with Opposition to the Prayer for the Issuance of
a Writ of Preliminary Injunction dated July 11, 2005. It
was only on August 26, 2005 when respondent withdrew
his appearance for Balageo.
Based on the established facts, it is indubitable that
respondent transgressed Rule 15.03 of Canon 15 of the
Code of Professional Responsibility.1âwphi1 It provides:
Rule 15.03 -A lawyer shall not represent conflicting
interests except by written consent of all concerned
given after a full disclosure of the facts.
"A lawyer may not, without being guilty of professional
misconduct, act as counsel for a person whose interest
conflicts with that of his present or former client."11
The prohibition against representing conflicting
interests is absolute and the rule applies even if the
lawyer has acted in good faith and with no intention to
represent conflicting interests.12 In Quiambao v. Atty.
Bamba,13 this Court emphasized that lawyers are
expected not only to keep inviolate the client's
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 of paramount importance in the administration
of justice.14
Respondent argues that while complainant is a client of
Davis & Sabling Law office, her case is actually handled
only by his partner Atty. Sabling. He was not privy to
any transaction between Atty. Sabling and complainant
and has no knowledge of any information or legal matter
complainant entrusted or confided to his law partner.
He thus inveigles that he could not have taken
advantage of an information obtained by his law firm by
virtue of the Retainer Agreement. We are not
impressed. In Hilado v. David,15 reiterated in Gonzales
v. Atty. Cabucana, Jr.,16 this Court held that a lawyer
who takes up the cause of the adversary of the party
who has engaged the services of his law firm brings the
law profession into public disrepute and suspicion and
undermines the integrity of justice. Thus, respondent's
argument that he never took advantage of any
information acquired by his law finn in the course of its
professional dealings with the complainant, even
assuming it to be true, is of no moment. Undeniably
aware of the fact that complainant is a client of his law
firm, respondent should have immediately informed
both the complainant and Balageo that he, as well as
the other members of his law firm, cannot represent any
of them in their legal tussle; otherwise, they would be
representing conflicting interests and violate the Code
of Professional Responsibility. Indeed, respondent could
have simply advised both complainant and Balageo to
instead engage the services of another lawyer.
The penalty for representing conflicting interests may
either be reprimand or suspension from the practice of
law ranging from six months to two years.17 We thus
adopt the recommendation of the IBP Board of
Governors.
WHEREFORE, the Court ADOPTS and AFFIRMS the
January 15, 2012 Resolution of the Integrated Bar of the
Philippines Board of Governors. Atty. Riz Tingalon L.
Davis is found GUILTY of violating Rule 15.03, Canon 15
of the Code of Professional Responsibility and is hereby
SUSPENDED from the practice of law for a period of six
(6) months effective upon receipt of this Resolution. He
is warned that a commission of the same or similar
offense in the future will result in the imposition of a
stiffer penalty.
Let a copy of this Resolution be entered into the records
of Atty. Riz Tingalon L. Davis and furnished to the Office
of the Clerk of Court, the Office of the Bar Confidant,
the Integrated Bar of the Philippines, and all courts in
the Philippines, for their information and guidance.
Atty. Riz Tingalon L. Davis is DIRECTED to inform the
Court of the date of his receipt of this Resolution.
SO ORDERED.
A.C. No. 6664 July 16, 2013
FERDINAND A. SAMSON, Complainant,
vs.
ATTY. EDGARDO O. ERA, Respondent.
DECISION
BERSAMIN, J.:
An attorney who wittingly represents and serves
conflicting interests may be suspended from the
practice of law, or even disbarred when circumstances
so warrant.
Antecedents
Ferdinand A. Samson has brought this complaint for
disbarment charging respondent Atty. Edgardo O. Era
with violation of his trust and confidence of a client by
representing the interest of Emilia C. Sison, his present
client, in a manner that blatantly conflicted with his
interest.
Samson and his relatives were among the investors who
fell prey to the pyramiding scam perpetrated by ICS
Exports, Inc. Exporter, Importer, and Multi-Level
Marketing Business (ICS Corporation), a corporation
whose corporate officers were led by Sison. The other
officers were Ireneo C. Sison, William C. Sison, Mimosa
H. Zamudio, Mirasol H. Aguilar and Jhun Sison.
Samson engaged Atty. Era to represent and assist him
and his relatives in the criminal prosecution of Sison and
her group. Pursuant to the engagement, Atty. Era
prepared the demand letter dated July 19, 2002
demanding the return or refund of the money subject of
their complaints. He also prepared the complaint-
affidavit that Samson signed and swore to on July 26,
2002. Subsequently, the complaint-affidavit charging
Sison and the other corporate officials of ICS
Corporation with several counts of estafa1was presented
to the Office of the City Prosecutor of Quezon City
(OCPQC). After the preliminary investigation, the
OCPQC formally charged Sison and the others with
several counts of estafa in the Regional Trial Court,
Branch 96 (RTC), in Quezon City.2
In April 2003, Atty. Era called a meeting with Samson
and his relatives to discuss the possibility of an amicable
settlement with Sison and her cohorts. He told Samson
and the others that undergoing a trial of the cases
would just be a waste of time, money and effort for
them, and that they could settle the cases with Sison
and her group, with him guaranteeing the turnover to
them of a certain property located in Antipolo City
belonging to ICS Corporation in exchange for their
desistance. They acceded and executed the affidavit of
desistance he prepared, and in turn they received a
deed of assignment covering land registered under
Transfer Certificate of Title No. R-4475 executed by
Sison in behalf of ICS Corporation.3
Samson and his relatives later demanded from Atty. Era
that they be given instead a deed of absolute sale to
enable them to liquidate the property among
themselves. It took some period of negotiations
between them and Atty. Era before the latter delivered
to them on November 27, 2003 five copies of a deed of
absolute sale involving the property. However, Atty. Era
told them that whether or not the title of the property
had been encumbered or free from lien or defect would
no longer be his responsibility. He further told them
that as far as he was concerned he had already
accomplished his professional responsibility towards
them upon the amicable settlement of the cases
between them and ICS Corporation.4
When Samson and his co-complainants verified the title
of the property at the Registry of Deeds and the
Assessor’s Office of Antipolo City, they were dismayed
to learn that they could not liquidate the property
because it was no longer registered under the name of
ICS Corporation but was already under the name of Bank
Wise Inc.5 Upon their urging, Atty. Era negotiated as
their counsel with ICS Corporation.
Due to the silence of Atty. Era for sometime thereafter,
Samson and his group wrote to him on September 8,
2004 to remind him about his guarantee and the promise
to settle the issues with Sison and her cohorts. But they
did not hear from Atty. Era at all.6
During the hearings in the RTC, Atty. Era did not
anymore appear for Samson and his group. This forced
them to engage another lawyer. They were shocked to
find out later on, however, that Atty. Era had already
been entering his appearance as the counsel for Sison in
her other criminal cases in the other branches of the
RTC in Quezon City involving the same pyramiding scam
that she and her ICS Corporation had perpetrated.7 In
this regard, they established Atty. Era’s legal
representation of Sison by submitting several certified
copies of the minutes of the proceedings in the criminal
cases involving Sison and her group issued by Branch 102
and Branch 220 of the RTC in Quezon City showing that
Atty. Era had appeared as the counsel of Sison in the
cases for estafa pending and being tried in said courts. 8
They also submitted a certification issued on November
3, 2004 indicating that Atty. Era had visited Sison, an
inmate in the Female Dormitory in Camp Karingal,
Sikatuna Village, Quezon City as borne out by the
blotter logbook of that unit.9
On January 20, 2005, Samson executed an affidavit
alleging the foregoing antecedents, and praying for
Atty. Era’s disbarment on the ground of his violation of
the trust, confidence and respect reposed in him as
their counsel.10
Upon being required by the Court to comment on the
complaint against him within 10 days from notice, Atty.
Era several times sought the extension of his period to
file the comment to supposedly enable him to collate
documents relevant to his comment.11 The Court
granted his request and allowed him an extension
totaling 40 days. But despite the lapse of the extended
period, he did not file his comment.
On September 27, 2005, Samson reiterated his
complaint for disbarment against Atty. Era.12
By its resolution dated March 1, 2006,13 the Court
required Atty. Era to show cause why he should not be
disciplinarily dealt with or held in contempt for such
failure to submit his comment.
In the comment that he subsequently filed on April 11,
2006 in the Office of the Bar Confidant,14 Atty. Era
alleged that the conclusion on April 23, 2002 of the
compromise settlement between Samson and his group,
on one hand, and Sison and her ICS Corporation, on the
other, had terminated the lawyer-client relationship
between him and Samson and his group; and that on
September 1, 2003, he had been appointed as counsel
de officio for Sison by Branch 102 of the RTC in Quezon
City only for purposes of her arraignment.
On July 17, 2006, the Court referred the case to the
Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation.15
In his report and recommendation dated October 1,
2007,16 the Investigating Commissioner of the IBP
Commission on Bar Discipline (IBPCBD) found Atty. Era
guilty of misconduct for representing conflicting
interests, for failing to serve his clients with
competence and diligence, and for failing to champion
his clients’ cause with wholehearted fidelity, care and
devotion.
The Investigating Commissioner observed that the
evidence did not sustain Atty. Era’s claim that his legal
services as counsel for Samson and his group had
terminated on April 23, 2003 upon the execution of the
compromise settlement of the criminal cases; that he
even admitted during the mandatory conference that
there was no formal termination of his legal services;17
that his professional obligation towards Samson and his
group as his clients did not end upon execution of the
settlement agreement, because he remained duty-
bound to see to it that the settlement was duly
implemented; that he also had the obligation to appear
in the criminal cases until their termination; and that
his acceptance of the engagement to appear in behalf of
Sison invited suspicion of his double-dealing and
unfaithfulness.
The Investigating Commissioner recommended that Atty.
Era be suspended from the practice of law for six
months, viz:
From the foregoing, it is clear that respondent is guilty
of misconduct for representing conflicting interests,
failing to serve his client, complainant herein, with
competence and diligence and champion the latter’s
cause with wholehearted fidelity, care and devotion. It
is respectfully recommended that respondent be
SUSPENDED from the practice of law for a period of six
(6) months and WARNED that a repetition of the same or
similar act would merit a more severe penalty.18
In Resolution No. XVIII-2007-195 passed on October 19,
2007,19 the IBP Board of Governors adopted and
approved the report and recommendation of the
Investigating Commissioner of the IBP-CBD, with the
modification that Atty. Era be suspended from the
practice of law for two years.
On June 9, 2012, the IBP Board of Governors passed
Resolution No. XX-2012-180,20 denying Atty. Era’s
motion for reconsideration and affirming Resolution No.
XVIII-2007-195.
The IBP Board of Governors then forwarded the case to
the Court pursuant to Section 12(b), Rule 139-B of the
Rules of Court.21
On October 17, 2012, Atty. Era filed a Manifestation and
Motion (With Leave of Court).22 However, on November
26, 2012, the Court merely noted the manifestation,
and denied the motion for its lack of merit.23
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. Era’s 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. Era’s 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 lawyer’s 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 lawyer’s
professional judgment or inhibits a lawyer from working
with appropriate vigor in the client’s behalf, the client’s
expectation of effective representation x x x could be
compromised.
Third, a client has a legal right to have the lawyer
safeguard the client’s confidential information
xxx.1âwphi1 Preventing use of confidential client
information against the interests of the client, either to
benefit the lawyer’s 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.1âwphi1 It behooves lawyers not only
to keep inviolate the client’s 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. Era’s 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 client’s 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 client’s
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 lawyer’s 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 client’s 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.
WHEREFORE, the Court FINDS and PRONOUNCES Atty.
EDGARDO O. ERA guilty of violating Rule 15.03 of Canon
15, and Canon 17 of the Code of Professional
Responsibility; and SUSPENDS him from the practice of
law for two years effective upon his receipt of this
decision, with a warning that his commission of a similar
offense will be dealt with more severely.
Let copies of this decision be included in the personal
record of Atty. EDGARDO 0. ERA and entered m his file
in the Office of the Bar Confidant.
Let copies of this decision be disseminated to all lower
courts by the Office of the Court Administrator, as well
as to the Integrated Bar of the Philippines for its
guidance.
SO ORDERED.
A.C. No. 9537 June 10, 2013
(Formerly CBD Case No. 09-2489)
DR. TERESITA LEE, Complainant,
vs.
ATTY. AMADOR L. SIMANDO, Respondent.
DECISION
PERALTA, J.:
Before us is a Petition for Disbarment1 dated July 21,
2009 filed by Dr. Teresita Lee (Dr. Lee) against
respondent Atty. Amador L. Simando (Atty. Simando)
before the Integrated Bar of the Philippines-Commission
on Bar Discipline (IBP-CBD), docketed as CBD Case No.
09-2489, now A.C. No. 9537, for violation of the Code of
Judicial Ethics of Lawyers.
The facts of the case, as culled from the records, are as
follows:
Atty. Simando was the retained counsel of complainant
Dr. Lee from November 2004 until January 8, 2008, with
a monthly retainer fee of Three Thousand Pesos
(Php3,000.00).2
Sometime during the above-mentioned period, Atty.
Simando went to see Dr. Lee and asked if the latter
could help a certain Felicito M. Mejorado (Mejorado) for
his needed funds. He claimed that Mejorado was then
awaiting the release of his claim for informer's reward
from the Bureau of Customs. Because Dr. Lee did not
know Mejorado personally and she claimed to be not in
the business of lending money, the former initially
refused to lend money. But Atty. Simando allegedly
persisted and assured her that Mejorado will pay his
obligation and will issue postdated checks and sign
promissory notes. He allegedly even offered to be the
co-maker of Mejorado and assured her that Mejorado's
obligation will be paid when due. Atty. Simando was
quoted saying: "Ipapahamak ba kita, kliyente kita";
"Sigurado ito, kung gusto mo, gagarantiyahan ko pa ito,
at pipirma din ako"; "Isang buwan lang, at hindi hihigit
sa dalawang buwan ito, bayad ka na."3
Due to Atty. Simando's persistence, his daily calls and
frequent visits to convince Dr. Lee, the latter gave in to
her lawyer's demands, and finally agreed to give
Mejorado sizeable amounts of money. Respondent acted
as co-maker with Mejorado in various cash loans, to
wit:4
Date: Amount
November 11, 2006 Php 400,000.00
November 24, 2006 200,000.00
November 27, 2006 400,000.00
December 7, 2006 200,000.00
December 13, 2006 200,000.00
Total: Php1,400,000.00
When the said obligation became due, despite Dr. Lee's
repeated demands, Mejorado failed and refused to
comply with his obligation. Since Atty. Simando was still
her lawyer then, Dr. Lee instructed him to initiate legal
action against Mejorado. Atty. Simando said he would
get in touch with Mejorado and ask him to pay his
obligation without having to resort to legal action.
However, even after several months, Mejorado still
failed to pay Dr. Lee, so she again asked Atty. Simando
why no payment has been made yet. Dr. Lee then
reminded Atty. Simando that he was supposed to be the
co-maker of the obligation of Mejorado, to which he
replied: "Di kasuhan din ninyo ako!"5
Despite complainant's repeated requests, respondent
ignored her and failed to bring legal actions against
Mejorado. Thus, in January 2008, complainant was
forced to terminate her contract with Atty. Simando.
Subsequently, complainant's new lawyer, Atty. Gilbert
Morandarte, sent a demand letter dated June 13, 2008
to Atty. Simando in his capacity as the co-maker of
some of the loans of Mejorado.
In his Letter dated June 30, 2008, respondent denied his
liability as a co-maker and claimed that novation had
occurred because complainant had allegedly given
additional loans to Mejorado without his knowledge.6
Dr. Lee then accused Atty. Simando of violating the
trust and confidence which she gave upon him as her
lawyer, and even took advantage of their professional
relationship in order to get a loan for his client. Worse,
when the said obligation became due, respondent was
unwilling to help her to favor Mejorado. Thus, the
instant petition for disbarment against Atty. Simando.
On August 12, 2009, the IBP-CBD ordered respondent to
submit his Answer on the complaint against him.7
In his Answer8 dated September 17, 2009, Atty. Simando
claimed that complainant, who is engaged in lending
money at a high interest rate, was the one who initiated
the financial transaction between her and Mejorado. He
narrated that complainant asked him if it is true that
Mejorado is his client as she found out that Mejorado
has a pending claim for informer's reward with the
Bureau of Customs. When he affirmed that Mejorado is
his client, complainant signified that she is willing to
give money for Mejorado's financial needs while
awaiting for the release of the informer's reward.
Eventually, parties agreed that Mejorado will pay double
the amount and that payment shall be made upon
receipt by Mejorado of the payment of his claim for
informer's reward.9
Meanwhile, Atty. Simando stressed that Dr. Lee gave
Mejorado a total of Php700,000.00 as an investment but
he signed as co-maker in all the receipts showing double
the amount or Php1,400,000.00.10
Respondent claimed that complainant is a money-lender
exacting high interest rates from borrowers.11 He
narrated several instances and civil cases where
complainant was engaged in money-lending where he
divulged that even after defendants had already paid
their loan, complainant still persists in collecting from
them.12 Respondent asserted that he knew of these
transactions, because he was among the four lawyers
who handled complainant's case.13
Respondent averred that from the time that Mejorado
and Dr. Lee had become close to each other, the latter
had given Mejorado additional investments and one (1)
Silverado Pick-up at the price of ₱500,000.00 and fifty
(50) sacks of old clothings. He claimed that the
additional investments made by Dr. Lee to Mejorado
were given without his knowledge.
Atty. Simando further alleged that with Dr. Lee's
investment of around ₱2 Million which included the
Silverado Pick-up and the fifty (50) sacks of old
clothings, the latter required Mejorado to issue five (5)
checks with a total value of ₱7,033,500.00, an amount
more than the actual value which Mejorado received.14
Atty. Simando added that while Dr. Lee and Mejorado
agreed that the issued checks shall be presented to the
bank only upon payment of his informer's reward, Dr.
Lee presented the checks to the bank despite being
aware that Mejorado's account had no funds for said
checks. Atty. Simando further denied that he refused to
take legal action against Mejorado. He claimed that
complainant never instructed him to file legal action,
since the latter knew that Mejorado is obligated to pay
only upon receipt of his informer's reward.
Finally, Atty. Simando insisted that he did not violate
their lawyerclient relationship, since Dr. Lee voluntarily
made the financial investment with Mejorado and that
he merely introduced complainant to Mejorado. He
further claimed that there is no conflict of interest
because he is Mejorado's lawyer relative to the latter's
claim for informer's reward, and not Mejorado's lawyer
against Dr. Lee. He reiterated that there is no
conflicting interest as there was no case between
Mejorado and Dr. Lee that he is handling for both of
them.15
In her Reply dated October 30, 2009, Dr. Lee denied
that what she entered into was a mere investment. She
insisted that she lent the money to Mejorado and
respondent, in his capacity as co-maker and the
transaction was actually a loan.16 To prove her claim,
Dr. Lee submitted the written loan agreements/receipts
which categorically stated that the money received was
a loan with due dates, signed by Mejorado and
respondent as co-maker.17 She further claimed that she
did not know Mejorado and it was respondent who
brought him to her and requested her to assist Mejorado
by lending him money as, in fact, respondent even
vouched for Mejorado and agreed to sign as co-maker.
Complainant further emphasized that what she was
collecting is the payment only of the loan amounting to
One Million Four Hundred Thousand Pesos
(Php1,400,000.00) which respondent had signed as co-
maker. Thus, respondent's claim that his obligation was
already extinguished by novation holds no water, since
what was being collected is merely his obligation
pertaining to the loan amounting to Php1,400,000.00
only, and nothing more.
Finally, complainant lamented that respondent, in his
comments, even divulged confidential informations he
had acquired while he was still her lawyer and even
used it against her in the present case, thus, committing
another unethical conduct. She, therefore, maintained
that respondent is guilty of violating the lawyer-client
confidentiality rule.
Both parties failed to appear during the mandatory
conference on January 15, 2010. Both parties requested
for resetting of the mandatory conference, however,
both failed to agree on a certain date. Hence, the IBP,
so as not to delay the disposition of the complaint,
terminated the mandatory conference and instead
required the parties to submit their respective position
papers.18
On March 18, 2010, the IBP-CBD found Atty. Simando
guilty of violating the Code of Professional
Responsibility. It recommended that respondent be
suspended from the practice of law for six (6) months.
On December 29, 2010, the IBP Board of Governors
adopted and approved the Report and Recommendation
of the IBP-CBD to suspend Atty. Simando from the
practice of law for a period of six (6) months.
Respondent moved for reconsideration.
On March 10, 2012, the IBP Board of Governors granted
respondent's motion for reconsideration for lack of
sufficient evidence to warrant the penalty of
suspension. The Resolution dated December 29, 2010
was reversed and the case against respondent was
dismissed.
RULING
We reverse the ruling of the IBP Board of Governors.
Jurisprudence has provided three tests in determining
whether a lawyer is guilty of representing conflicting
interest:
One test is whether a lawyer is duty-bound to fight for
an issue or claim in behalf of one client and, at the
same time, to oppose that claim for the other client.
Thus, if a lawyer’s argument for one client has to be
opposed by that same lawyer in arguing for the other
client, there is a violation of the rule.
Another test of inconsistency of interests is whether the
acceptance of a new relation would prevent the full
discharge of the lawyer’s duty of undivided fidelity and
loyalty to the client or invite suspicion of unfaithfulness
or double-dealing in the performance of that duty. Still
another test is whether the lawyer would be called upon
in the new relation to use against a former client any
confidential information acquired through their
connection or previous employment.19
In the instant case, we find substantial evidence to
support respondent's violation of the above parameters,
as established by the following circumstances on record:
First, it is undisputed that there was a lawyer-client
relationship between complainant and Atty. Simando as
evidenced by the retainer fees received by respondent
and the latter's representation in certain legal matters
pertaining to complainant's business;
Second, Atty. Simando admitted that Mejorado is
another client of him albeit in a case claiming rewards
against the Bureau of Customs;
Third, Atty. Simando admitted that he was the one who
introduced complainant and Mejorado to each other for
the purpose of entering into a financial transaction
while having knowledge that complainant's interests
could possibly run in conflict with Mejorado's interests
which ironically such client's interests, he is duty-bound
to protect;
Fourth, despite the knowledge of the conflicting
interests between his two clients, respondent consented
in the parties' agreement and even signed as co-maker
to the loan agreement;
Fifth, respondent's knowledge of the conflicting
interests between his two clients was demonstrated
further by his own actions, when he:
(a) failed to act on Mejorado's failure to pay his
obligation to complainant despite the latter's instruction
to do so;
(b) denied liability despite signing as co-maker in the
receipts/promissory notes arising from the loan
agreement between his two clients;
(c) rebutted complainant's allegations against Mejorado
and him, and even divulged informations he acquired
while he was still complainant's lawyer.
Clearly, it is improper for respondent to appear as
counsel for one party (complainant as creditor) against
the adverse party (Mejorado as debtor) who is also his
client, since a lawyer is prohibited from representing
conflicting interests. He may not, without being guilty
of professional misconduct, act as counsel for a person
whose interest conflict with that of his present or
former client.
Respondent's assertion that there is no conflict of
interest because complainant and respondent are his
clients in unrelated cases fails to convince. His
representation of opposing clients in both cases, though
unrelated, obviously constitutes conflict of interest or,
at the least, invites suspicion of double-dealing.20
Moreover, with the subject loan agreement entered into
by the complainant and Mejorado, who are both his
clients, readily shows an apparent conflict of interest,
moreso when he signed as co-maker.
Likewise, respondent's argument that the money
received was an investment and not a loan is difficult to
accept, considering that he signed as co-maker.
Respondent is a lawyer and it is objectionable that he
would sign as co-maker if he knew all along that the
intention of the parties was to engage in a mere
investment. Also, as a lawyer, signing as a co-maker, it
can be presupposed that he is aware of the nature of
suretyship and the consequences of signing as co-maker.
Therefore, he cannot escape liability without exposing
himself from administrative liability, if not civil liability.
Moreover, we noted that while complainant was able to
show proof of receipts of various amounts of money
loaned and received by Mejorado, and signed by the
respondent as co-maker, the latter, however, other
than his bare denials, failed to show proof that the
money given was an investment and not a loan.
It must be stressed that the proscription against
representation of conflicting interests finds application
where the conflicting interests arise with respect to the
same general matter however slight the adverse interest
may be. It applies even if the conflict pertains to the
lawyer’s private activity or in the performance of a
function in a non-professional capacity. In the process of
determining whether there is a conflict of interest, an
important criterion is probability, not certainty, of
conflict.21
We likewise note that respondent offered several
excuses in order to avoid payment of his
liability.1âwphi1 First, in his Answer to complainant's
demand letter, he claimed there was novation which
extinguished his liability; Secondly, he claimed that the
amount received by Mejorado for which he signed as co-
maker was merely an investment and not a loan. Finally,
he alleged that it was agreed that the investment with
profits will be paid only after Mejorado receives the
payment for his claim for reward which complainant
violated when she presented the checks for payment
prematurely. These actuations of Atty. Simando do not
speak well of his reputation as a lawyer.22
Finally, we likewise find respondent guilty of violating
Rule 21.01 of the Code of Professional Responsibility.23
In his last-ditch effort to impeach the credibility of
complainant, he divulged informations24 which he
acquired in confidence during the existence of their
lawyer-client relationship.
We held in Nombrado v. Hernandez25 that the
termination of the relation of attorney and client
provides no justification for a lawyer to represent an
interest adverse to or in conflict with that of the former
client. The reason for the rule is that the client’s
confidence once reposed cannot be divested by the
expiration of the professional employment.
Consequently, a lawyer should not, even after the
severance of the relation with his client, do anything
which will injuriously affect his former client in any
matter in which he previously represented him nor
should he disclose or use any of the client's confidences
acquired in the previous relation.
Accordingly, we reiterate that lawyers are enjoined to
look at any representation situation from "the point of
view that there are possible conflicts," and further, "to
think in terms of impaired loyalty" that is to evaluate if
his representation in any way will impair loyalty to a
client.26
WHEREFORE, premises considered, this Court resolves to
ADOPT the findings and recommendation of the IBP in
Resolution No. XIX-20 10-733 suspending respondent
Atty. Amador L. Simando for six ( 6) months from the
practice of law, with a WARNING that a repetition of the
same or similar offense will warrant a more severe
penalty.
Let copies of this Decision be furnished all courts, the
Office of the Bar Confidant and the Integrated Bar of
the Philippines for their information and guidance. The
Office of the Bar Confidant is DIRECTED to append a
copy of this Decision to respondent's record as member
of the Bar.
Atty. Simando is DIRECTED to inform the Court of the
date of his receipt of this Decision so that we can
determine the reckoning point when his suspension shall
take effect.
This Decision shall be immediately executory.
SO ORDERED.
A.C. No. 10567 February 25, 2015
WILFREDO ANGLO, Complainant,
vs.
ATTY. JOSE MA. V. VALENCIA, ATTY. JOSE MA. J.
CIOCON, ATTY. PHILIP Z. DABAO, ATTY. LILY UYV
ALENCIA, ATTY. JOEY P. DE LA PAZ, ATTY. CRIS G.
DIONELA, ATTY. RAYMUNDO T. PANDAN, JR.,* ATTY.
RODNEY K. RUBICA,** and ATTY. WILFRED RAMON M.
PENALOSA, Respondents.
DECISION
PERLAS-BERNABE, J.:
This is an administrative case stemming from a
complaint-affidavit1 dated December 4, 2009 filed by
complainant Wilfredo Anglo (complainant) charging
respondents Attys. Jose Ma. V. Valencia (Atty.
Valencia), Jose Ma. J. Ciocon (Atty. Ciocon ), Philip Z.
Dabao (Atty. Dabao ), Lily Uy-Valencia (Atty. Uy-
Valencia), Joey P. De La Paz (Atty. De La Paz), Cris G.
Dionela (Atty. Dionela), Raymundo T. Pandan, Jr. (Atty.
Pandan, Jr.), Rodney K. Rubica (Atty. Rubica), and
Wilfred Ramon M. Penalosa (Atty. Penalosa; collectively,
respondents) of violating the Code of Professional
Responsibility (CPR), specifica1ly the rule against
conflict of interest.
The Facts
In his complaint-affidavit, complainant alleged that he
availed the services of the law firm Valencia Ciocon
Dabao Valencia De La Paz Dionela Pandan Rubica Law
Office(law firm), of which Attys. Valencia, Ciocon,
Dabao, Uy-Valencia, De La Paz, Dionela, Pandan, Jr.,
and Rubica were partners, for two (2) consolidated labor
cases2 where he was impleaded as respondent. Atty.
Dionela, a partner of the law firm, was assigned to
represent complainant. The labor cases were
terminated on June 5, 2008 upon the agreement of both
parties.3
On September 18, 2009, a criminal case4 for qualified
theft was filed against complainant and his wife by FEVE
Farms Agricultural Corporation (FEVE Farms) acting
through a certain Michael Villacorta (Villacorta).
Villacorta, however, was represented by the law firm,
the same law office which handled complainant’s labor
cases. Aggrieved, complainant filed this disbarment case
against respondents, alleging that they violated Rule
15.03, Canon 15 and Canon 21 of the CPR,5 to wit:
CANON 15 – A LAWYER SHALL OBSERVE CANDOR,
FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS.
xxxx
RULE 15.03 – A lawyer shall not represent conflicting
interests except by written consent of all concerned
given after a full disclosure of the facts.
xxxx
CANON 21 – A LAWYER SHALL PRESERVE THE
CONFIDENCES AND SECRETS OF HIS CLIENT EVEN AFTER
THE ATTORNEY-CLIENT RELATION IS TERMINATED.
In their defense,6 respondents admitted that they
indeed operated under the name Valencia Ciocon Dabao
Valencia De La Paz Dionela Pandan Rubica Law Office,
but explained that their association is not a formal
partnership, but one that is subject to certain
"arrangements." According to them, each lawyer
contributes a fixed amount every month for the
maintenance of the entire office; and expenses for
cases, such as transportation, copying, printing, mailing,
and the like are shouldered by each lawyer separately,
allowing each lawyer to fix and receive his own
professional fees exclusively.7 As such, the lawyers do
not discuss their clientele with the other lawyers and
associates, unless they agree that a case be handled
collaboratively. Respondents claim that this has been
the practice of the law firm since its inception. They
averred that complainant’s labor cases were solely and
exclusively handled by Atty. Dionela and not by the
entire law firm. Moreover, respondents asserted that
the qualified theft case filed by FEVE Farms was handled
by Atty. Peñalosa, a new associate who had no
knowledge of complainant’s labor cases, as he started
working for the firm after the termination thereof.8
Meanwhile, Atty. Dionela confirmed that he indeed
handled complainant’s labor cases but averred that it
was terminated on June 13, 2008,9 and that
complainant did not have any monthly retainer
contract.10 He likewise explained that he did not see
the need to discuss complainant’s labor cases with the
other lawyers as the issue involved was very simple,11
and that the latter did not confide any secret during the
time the labor cases were pending that would have been
used in the criminal case with FEVE Farms. He also
claimed that the other lawyers were not aware of the
details of complainant’s labor cases nor did they know
that he was the handling counsel for complainant even
after the said cases were closed and terminated.12 The
IBP’s Report and Recommendation
In a Report and Recommendation13 dated September
26, 2011, the IBP Commissioner found respondents to
have violated the rule on conflict of interest and
recommended that they be reprimandedtherefor, with
the exception of Atty. Dabao, who had died on January
17, 2010.14 The IBP found that complainant was indeed
represented in the labor cases by the respondents acting
together as a law firm and not solely by Atty. Dionela.
Consequently, there was a conflict of interest in this
case, as respondents, through Atty. Peñalosa, having
been retained by FEVE Farms, created a connection that
would injure complainant in the qualified theft case.
Moreover, the termination of attorney-client relation
provides no justification for a lawyer to represent an
interest adverse to or in conflict with that of the former
client.15
In a Resolution16 dated February 12, 2013, the IBP
Board of Governors adopted and approved the IBP
Commissioner’s Report and Recommendation with
modification. Instead of the penalty of reprimand, the
IBP Board of Governors dismissed the case with warning
that a repetition of the same or similar act shall be
dealt with more severely.
Complainant filed a motion for reconsideration17
thereof, which the IBP Board of Governors granted in its
Resolution18 dated March 23, 2014 and thereby (a) set
aside its February 12, 2013 Resolution and (b) adopted
and approved the IBP Commissioner’s Report and
Recommendation, with modification, (1) reprimanding
the respondents for violation of the rule on conflict of
interest; (2) dismissing the case against Atty. Dabao in
view of his death; and (3) suspending Atty. Dionela from
the practice of law for one year, being the handling
counsel of complainant’s labor cases.
The Issue Before the Court
The essential issue in this case is whether or not
respondents are guilty of representing conflicting
interests in violation of the pertinent provisions of the
CPR.
The Court’s Ruling
Rule 15.03, Canon 15 and Canon 21 of the CPR provide:
CANON 15 – A LAWYER SHALL OBSERVE CANDOR,
FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS.
xxxx
RULE 15.03 – A lawyer shall not represent conflicting
interests except by written consent of all concerned
given after a full disclosure of the facts.
xxxx
CANON 21 – A LAWYER SHALL PRESERVE THE
CONFIDENCES AND SECRETS OF HIS CLIENT EVEN AFTER
THE ATTORNEY-CLIENT RELATIONSHIP IS TERMINATED.
In Hornilla v. Atty. Salunat,19 the Court explained 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.1âwphi1 The test is "whether or not in behalf of
one client, it is the lawyer’s 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.20
As such, a lawyer is prohibited from representing new
clients whose interests oppose those of a former client
in any manner, whether or not they are parties in the
same action or on totally unrelated cases. The
prohibition is founded on the principles of public policy
and good taste.21 In this case, the Court concurs with
the IBP’s conclusions that respondents represented
conflicting interests and must therefore be held liable.
As the records bear out, respondents’ law firm was
engaged and, thus, represented complainant in the
labor cases instituted against him. However, after the
termination thereof, the law firm agreed to represent a
new client, FEVE Farms, in the filing of a criminal case
for qualified theft against complainant, its former
client, and his wife. As the Court observes, the law
firm’s unethical acceptance of the criminal case arose
from its failure to organize and implement a system by
which it would have been able to keep track of all cases
assigned to its handling lawyers to the end of, among
others, ensuring that every engagement it accepts
stands clear of any potential conflict of interest. As an
organization of individual lawyers which, albeit engaged
as a collective, assigns legal work to a corresponding
handling lawyer, it behooves the law firm to value
coordination in deference to the conflict of interest
rule. This lack of coordination, as respondents’ law firm
exhibited in this case, intolerably renders its clients’
secrets vulnerable to undue and even adverse exposure,
eroding in the balance the lawyer-client relationship’s
primordial ideal of unimpaired trust and confidence.
Had such system been institutionalized, all of its
members, Atty. Dionela included, would have been wary
of the above-mentioned conflict, thereby impelling the
firm to decline FEVE Farms’ subsequent engagement.
Thus, for this shortcoming, herein respondents, as the
charged members of the law firm, ought to be
administratively sanctioned. Note that the Court finds
no sufficient reason as to why Atty. Dionela should
suffer the greater penalty of suspension. As the Court
sees it, all respondents stand in equal fault for the law
firm’s deficient organization for which Rule 15.03,
Canon 15 and Canon 21 of the CPR had been violated. As
such, all of them are meted with the same penalty of
reprimand, with a stern warning that a repetition of the
same or similar infraction would be dealt with more
severely.
As a final point, the Court clarifies that respondents'
pronounced liability is not altered by the fact that the
labor cases against complainant had long been
terminated. Verily, the termination of attorney-client
relation provides no justification for a lawyer to
represent an interest adverse to or in conflict with that
of the former client. The client's confidence once
reposed should not be divested by mere expiration of
professional employment.22
WHEREFORE, respondents Attys. Jose Ma. V. Valencia,
Jose Ma. J. Ciocon, Lily Uy-Valencia, Joey P. De La Paz,
Cris G. Dionela, Raymundo T. Pandan, Jr., Rodney K.
Rubica, and Wilfred Ramon M. Penalosa are found
GUILTY of representing conflicting interests in violation
of Rule 15.03, Canon 15 and Canon 21 of the Code of
Professional Responsibility and are therefore
REPRIMANDED for said violations, with a STERN
WARNING that a repetition of the same or similar
infraction would be dealt with more severely.
Meanwhile, the case against Atty. Philip Dabao is
DISMISSED in view of his death.
Let a copy of this Resolution be furnished the Office of
the Bar Confidant, to be appended to respondents'
personal records as attorneys. Further, let copies of this
Resolution be furnished the Integrated Bar of the
Philippines and the Office of the Court Administrator,
which is directed to circulate them to all courts in the
country for their information and guidance.
SO ORDERED.
A.C. No. 8243 July 24, 2009
ROLANDO B. PACANA, JR., Complainant,
vs.
ATTY. MARICEL PASCUAL-LOPEZ, Respondent.
DECISION
PER CURIAM:
This case stems from an administrative complaint1 filed
by Rolando Pacana, Jr. against Atty. Maricel Pascual-
Lopez charging the latter with flagrant violation of the
provisions of the Code of Professional Responsibility. 2
Complainant alleges that respondent committed acts
constituting conflict of interest, dishonesty, influence
peddling, and failure to render an accounting of all the
money and properties received by her from
complainant.
On January 2, 2002, complainant was the Operations
Director for Multitel Communications Corporation (MCC).
MCC is an affiliate company of Multitel International
Holdings Corporation (Multitel). Sometime in July 2002,
MCC changed its name to Precedent Communications
Corporation (Precedent).3
According to complainant, in mid-2002, Multitel was
besieged by demand letters from its members and
investors because of the failure of its investment
schemes. He alleges that he earned the ire of Multitel
investors after becoming the assignee of majority of the
shares of stock of Precedent and after being appointed
as trustee of a fund amounting to Thirty Million Pesos
(₱30,000,000.00) deposited at Real Bank.
Distraught, complainant sought the advice of respondent
who also happened to be a member of the Couples for
Christ, a religious organization where complainant and
his wife were also active members. From then on,
complainant and respondent constantly communicated,
with the former disclosing all his involvement and
interests in Precedent and Precedent’s relation with
Multitel. Respondent gave legal advice to complainant
and even helped him prepare standard quitclaims for
creditors. In sum, complainant avers that a lawyer-
client relationship was established between him and
respondent although no formal document was executed
by them at that time. A Retainer Agreement4 dated
January 15, 2003 was proposed by respondent.
Complainant, however, did not sign the said agreement
because respondent verbally asked for One Hundred
Thousand Pesos (₱100,000.00) as acceptance fee and a
15% contingency fee upon collection of the overpayment
made by Multitel to Benefon,5 a telecommunications
company based in Finland. Complainant found the
proposed fees to be prohibitive and not within his
means.6 Hence, the retainer agreement remained
unsigned.7
After a few weeks, complainant was surprised to receive
a demand letter from respondent8 asking for the return
and immediate settlement of the funds invested by
respondent’s clients in Multitel. When complainant
confronted respondent about the demand letter, the
latter explained that she had to send it so that her
clients – defrauded investors of Multitel – would know
that she was doing something for them and assured
complainant that there was nothing to worry about.9
Both parties continued to communicate and exchange
information regarding the persistent demands made by
Multitel investors against complainant. On these
occasions, respondent impressed upon complainant that
she can closely work with officials of the Anti-Money
Laundering Council (AMLC), the Department of Justice
(DOJ), the National Bureau of Investigation (NBI), the
Bureau of Immigration and Deportations (BID),10 and the
Securities and Exchange Commission (SEC)11 to resolve
complainant’s problems. Respondent also convinced
complainant that in order to be absolved from any
liability with respect to the investment scam, he must
be able to show to the DOJ that he was willing to divest
any and all of his interests in Precedent including the
funds assigned to him by Multitel.12
Respondent also asked money from complainant
allegedly for safekeeping to be used only for his case
whenever necessary. Complainant agreed and gave her
an initial amount of ₱900,000.00 which was received by
respondent herself.13 Sometime thereafter, complainant
again gave respondent ₱1,000,000.00.14 Said amounts
were all part of Precedent’s collections and sales
proceeds which complainant held as assignee of the
company’s properties.15
When complainant went to the United States (US), he
received several messages from respondent sent through
electronic mail (e-mail) and short messaging system
(SMS, or text messages) warning him not to return to the
Philippines because Rosario Baladjay, president of
Multitel, was arrested and that complainant may later
on be implicated in Multitel’s failed investment system.
Respondent even said that ten (10) arrest warrants and
a hold departure order had been issued against him.
Complainant, thereafter, received several e-mail
messages from respondent updating him of the status of
the case against Multitel and promised that she will
settle the matter discreetly with government officials
she can closely work with in order to clear
complainant’s name.16 In two separate e-mail
messages,17 respondent again asked money from
complainant, ₱200,000 of which was handed by
complainant’s wife while respondent was confined in
Saint Luke’s Hospital after giving birth,18 and another
₱700,000 allegedly to be given to the NBI.19
Through respondent’s persistent promises to settle all
complainant’s legal problems, respondent was able to
convince complainant who was still in the US to execute
a deed of assignment in favor of respondent allowing
the latter to retrieve 178 boxes containing cellular
phones and accessories stored in complainant’s house
and inside a warehouse.20 He also signed a blank deed of
sale authorizing respondent to sell his 2002 Isuzu
Trooper.21
Sometime in April 2003, wary that respondent may not
be able to handle his legal problems, complainant was
advised by his family to hire another lawyer. When
respondent knew about this, she wrote to complainant
via e-mail, as follows:
Dear Butchie,
Hi! Ok ka lang? Hope you are fine. Sorry if I shocked you
but I had to do it as your friend and lawyer. The charges
are all non-bailable but all the same as the SEC report I
told you before. The findings are the same, i.e. your
company was the front for the fraud of Multitel and that
funds were provided you.
I anticipated this, that is why I really pushed for a
quitclaim. Rolly is willing to return the Crosswind,
laptap (sic) and [P]alm [P]ilot. Manny Cancio really
helped. Anthony na lang. Then, I will need the
accounting of all the funds you received from the sale of
the phones, every employees and directors[’] quitclaim
(including yours), the funds transmitted to the clients
through me, the funds you utilized, and whatelse (sic) is
still unremitted, every centavo must be accounted for
as DOJ and NBI can have the account opened.
I will also need the P30 M proof of deposit with Real
[B]ank and the trust given [to] you. So we can inform
them [that] it was not touched by you.
I have been informed by Efie that your family is looking
at hiring Coco Pimentel. I know him very well as his
sister Gwen is my best friend. I have no problem if you
hire him but I will be hands off. I work differently kasi.
In this cases (sic), you cannot be highprofile (sic)
because it is the clients who will be sacrificed at the
expense of the fame of the lawyer. I have to work
quietly and discreetly. No funfare. Just like what I did
for your guys in the SEC. I have to work with people I am
comfortable with. Efren Santos will sign as your lawyer
although I will do all the work. He can help with all his
connections. Val’s friend in the NBI is the one is (sic)
charge of organized crime who is the entity (sic) who
has your warrant. My law partner was the state
prosecutor for financial fraud. Basically we have it
covered in all aspects and all departments. I am just
trying to liquidate the phones I have allotted for you s
ana (sic) for your trooper kasi whether we like it or not,
we have to give this agencies (sic) to make our work
easier according to Val. The funds with Mickey are
already accounted in the quit claims (sic) as attorneys
(sic) fees. I hope he will be able to send it so we have
funds to work with.
As for your kids, legally they can stay here but recently,
it is the children who (sic) the irate clients and
government officials harass and kidnap to make the
individuals they want to come out from hiding (sic). I do
not want that to happen. Things will be really easier on
my side.
Please do not worry. Give me 3 months to make it all
disappear. But if you hire Coco, I will give him the free
hand to work with your case. Please trust me. I have
never let you down, have I? I told you this will happen
but we are ready and prepared. The clients who
received the phones will stand by you and make you the
hero in this scandal. I will stand by you always. This is
my expertise. TRUST me! That is all. You have an angel
on your side. Always pray though to the best legal mind
up there. You will be ok!
Candy22
On July 4, 2003, contrary to respondent’s advice,
complainant returned to the country. On the eve of his
departure from the United States, respondent called up
complainant and conveniently informed him that he has
been cleared by the NBI and the BID.23
About a month thereafter, respondent personally met
with complainant and his wife and told them that she
has already accumulated ₱12,500,000.00 as attorney’s
fees and was willing to give ₱2,000,000.00 to
complainant in appreciation for his help. Respondent
allegedly told complainant that without his help, she
would not have earned such amount. Overwhelmed and
relieved, complainant accepted respondent’s offer but
respondent, later on, changed her mind and told
complainant that she would instead invest the
₱2,000,000.00 on his behalf in a business venture.
Complainant declined and explained to respondent that
he and his family needed the money instead to cover
their daily expenses as he was no longer employed.
Respondent allegedly agreed, but she failed to fulfill her
promise.24
Respondent even publicly announced in their religious
organization that she was able to help settle the ten
(10) warrants of arrest and hold departure order issued
against complainant and narrated how she was able to
defend complainant in the said cases.25
By April 2004, however, complainant noticed that
respondent was evading him. Respondent would either
refuse to return complainant’s call or would abruptly
terminate their telephone conversation, citing several
reasons. This went on for several months.26 In one
instance, when complainant asked respondent for an
update on the collection of Benefon’s obligation to
Precedent which respondent had previously taken
charge of, respondent arrogantly answered that she was
very busy and that she would read Benefon’s letter only
when she found time to do so.
On November 9, 2004, fed up and dismayed with
respondent’s arrogance and evasiveness, complainant
wrote respondent a letter formally asking for a full
accounting of all the money, documents and properties
given to the latter.27 Respondent rendered an
accounting through a letter dated December 20, 2004.28
When complainant found respondent’s explanation to be
inadequate, he wrote a latter expressing his confusion
about the accounting.29 Complainant repeated his
request for an audited financial report of all the
properties turned over to her; otherwise, he will be
constrained to file the appropriate case against
respondent.30 Respondent replied,31 explaining that all
the properties and cash turned over to her by
complainant had been returned to her clients who had
money claims against Multitel. In exchange for this, she
said that she was able to secure quitclaim documents
clearing complainant from any liability.32 Still
unsatisfied, complainant decided to file an affidavit-
complaint33 against respondent before the Commission
on Bar Discipline of the Integrated Bar of the Philippines
(IBP) seeking the disbarment of respondent.
In her Answer-Affidavit,34 respondent vehemently
denied being the lawyer for Precedent. She maintained
that no formal engagement was executed between her
and complainant. She claimed that she merely helped
complainant by providing him with legal advice and
assistance because she personally knew him, since they
both belonged to the same religious
organization.35lavvph!1
Respondent insisted that she represented the group of
investors of Multitel and that she merely mediated in
the settlement of the claims her clients had against the
complainant. She also averred that the results of the
settlement between both parties were fully documented
and accounted for.36 Respondent believes that her act in
helping complainant resolve his legal problem did not
violate any ethical standard and was, in fact, in accord
with Rule 2.02 of the Code of Professional
Responsibility.37
To bolster her claim that the complaint was without
basis, respondent noted that a complaint for estafa was
also filed against her by complainant before the Office
of the City Prosecutor in Quezon City citing the same
grounds. The complaint was, however, dismissed by
Assistant City Prosecutor Josephus Joannes H. Asis for
insufficiency of evidence.38 Respondent argued that on
this basis alone, the administrative case must also be
dismissed.
In her Position Paper,39 respondent also questioned the
admissibility of the electronic evidence submitted by
complainant to the IBP’s Commission on Bar Discipline.
Respondent maintained that the e-mail and the text
messages allegedly sent by respondent to complainant
were of doubtful authenticity and should be excluded as
evidence for failure to conform to the Rules on
Electronic Evidence (A.M. No. 01-7-01-SC).
After due hearing, IBP Investigating Commissioner
Patrick M. Velez issued a Report and Recommendation40
finding that a lawyer-client relationship was established
between respondent and complainant despite the
absence of a written contract. The Investigating
Commissioner also declared that respondent violated
her duty to be candid, fair and loyal to her client when
she allowed herself to represent conflicting interests
and failed to render a full accounting of all the cash and
properties entrusted to her. Based on these grounds, the
Investigating Commissioner recommended her
disbarment.
Respondent moved for reconsideration,41 but the IBP
Board of Governors issued a Recommendation42 denying
the motion and adopting the findings of the
Investigating Commissioner.
The case now comes before this Court for final action.
We affirm the findings of the IBP.
Rule 15.03, Canon 15 of the Code of Professional
responsibility provides:
Rule 15.03 – A lawyer shall not represent conflicting
interests except by written consent of all concerned
given after full disclosure of the facts.
This prohibition is founded on principles of public
policy, good taste43 and, more importantly, upon
necessity. In the course of a lawyer-client relationship,
the lawyer learns all the facts connected with the
client’s case, including its weak and strong points. Such
knowledge must be considered sacred and guarded with
care. No opportunity must be given to him to take
advantage of his client; for if the confidence is abused,
the profession will suffer by the loss thereof.44 It
behooves lawyers not only to keep inviolate the client’s
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.45 It is for these reasons that we have described
the attorney-client relationship as one of trust and
confidence of the highest degree.46
Respondent must have known that her act of constantly
and actively communicating with complainant, who, at
that time, was beleaguered with demands from
investors of Multitel, eventually led to the
establishment of a lawyer-client relationship.
Respondent cannot shield herself from the inevitable
consequences of her actions by simply saying that the
assistance she rendered to complainant was only in the
form of "friendly accommodations,"47 precisely because
at the time she was giving assistance to complainant,
she was already privy to the cause of the opposing
parties who had been referred to her by the SEC.48
Respondent also tries to disprove the existence of such
relationship by arguing that no written contract for the
engagement of her services was ever forged between
her and complainant.49 This argument all the more
reveals respondent’s patent ignorance of fundamental
laws on contracts and of basic ethical standards
expected from an advocate of justice. The IBP was
correct when it said:
The absence of a written contract will not preclude the
finding that there was a professional relationship
between the parties. Documentary formalism is not an
essential element in the employment of an attorney;
the contract may be express or implied. To establish the
relation, it is sufficient that the advice and assistance of
an attorney is sought and received in any matter
pertinent to his profession.50 (Emphasis
supplied.)1awphi1
Given the situation, the most decent and ethical thing
which respondent should have done was either to advise
complainant to engage the services of another lawyer
since she was already representing the opposing parties,
or to desist from acting as representative of Multitel
investors and stand as counsel for complainant. She
cannot be permitted to do both because that would
amount to double-dealing and violate our ethical rules
on conflict of interest.
In Hornilla v. Atty. Salunat,51 we explained the concept
of conflict of interest, thus:
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 lawyer’s 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.52
Indubitably, respondent took advantage of
complainant’s hapless situation, initially, by giving him
legal advice and, later on, by soliciting money and
properties from him. Thereafter, respondent impressed
upon complainant that she had acted with utmost
sincerity in helping him divest all the properties
entrusted to him in order to absolve him from any
liability. But simultaneously, she was also doing the
same thing to impress upon her clients, the party
claimants against Multitel, that she was doing
everything to reclaim the money they invested with
Multitel. Respondent herself admitted to complainant
that without the latter’s help, she would not have been
able to earn as much and that, as a token of her
appreciation, she was willing to share some of her
earnings with complainant.53 Clearly, respondent’s act is
shocking, as it not only violated Rule 9.02, Canon 9 of
the Code of Professional Responsibility,54 but also toyed
with decency and good taste.
Respondent even had the temerity to boast that no
Multitel client had ever complained of respondent’s
unethical behavior.55 This remark indubitably displays
respondent’s gross ignorance of disciplinary procedure
in the Bar. As a member of the Bar, she is expected to
know that proceedings for disciplinary actions against
any lawyer may be initiated and prosecuted by the IBP
Board of Governors, motu proprio or upon referral by
this Court or by the Board of Officers of an IBP Chapter56
even if no private individual files any administrative
complaint.
Upon review, we find no cogent reason to disturb the
findings and recommendations of the IBP Investigating
Commissioner, as adopted by the IBP Board of
Governors, on the admissibility of the electronic
evidence submitted by complainant. We, accordingly,
adopt the same in toto.
Finally, respondent argues that the recommendation of
the IBP Board of Governors to disbar her on the grounds
of deceit, malpractice and other gross misconduct,
aside from violation of the Lawyer’s Oath, has been
rendered moot and academic by voluntary termination
of her IBP membership, allegedly after she had been
placed under the Department of Justice’s Witness
Protection Program.57 Convenient as it may be for
respondent to sever her membership in the integrated
bar, this Court cannot allow her to do so without
resolving first this administrative case against her.
The resolution of the administrative case filed against
respondent is necessary in order to determine the
degree of her culpability and liability to complainant.
The case may not be dismissed or rendered moot and
academic by respondent’s act of voluntarily terminating
her membership in the Bar regardless of the reason for
doing so. This is because membership in the Bar is a
privilege burdened with conditions.58 The conduct of a
lawyer may make him or her civilly, if not criminally,
liable to his client or to third parties, and such liability
may be conveniently avoided if this Court were to allow
voluntary termination of membership. Hence, to
terminate one’s membership in the Bar voluntarily, it is
imperative that the lawyer first prove that the voluntary
withdrawal of membership is not a ploy to further
prejudice the public or to evade liability. No such proof
exists in the present case.
WHEREFORE, respondent Attorney Maricel Pascual-Lopez
is hereby DISBARRED for representing conflicting
interests and for engaging in unlawful, dishonest and
deceitful conduct in violation of her Lawyer’s Oath and
the Code of Professional Responsibility.
Let a copy of this Decision be entered in the
respondent’s record as a member of the Bar, and notice
of the same be served on the Integrated Bar of the
Philippines, and on the Office of the Court Administrator
for circulation to all courts in the country.
SO ORDERED.
A.C. No. 10687 July 22, 2015
MABINI COLLEGES, INC. represented by MARCEL N.
LUKBAN, ALBERTO I. GARCIA, JR., and MA. PAMELA
ROSSANA A. APUYA, Complainant,
vs.
ATTY. JOSE D. PAJARILLO, Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a verified complaint1 for disbarment against
respondent Atty. Jose D. Pajarillo for allegedly violating
Canon 15, Rule 15.03 of the Code of Professional
Responsibility which prohibits a lawyer from
representing conflicting interests and Canon 15 of the
same Code which enjoins a lawyer to observe candor,
fairness, and loyalty in all his dealings and transactions
with clients.
The salient facts of the case follow:
In 1995, the complainant, Mabini Colleges, Inc., had a
Board of Trustees which was divided in to two opposing
factions. The first faction, called the Adeva Group, was
composed of Romulo M. Adecam Lydia E. Cacawa,
Eleodoro D. Bicierro, and Pilar I. Andrade. The other
faction, called the Lukban Group, was composed of
Justo B. Lukban, Luz I. Garcia, Alice I. Adeva, and
Marcel N. Lukban.
In 1996, the complainant appointed the respondent as
its corporate secretary with a total monthly
compensation and honorarium of ₱6,000.
On March 29, 1999, the Adeva Group issued an
unnumbered Board Resolution which authorized Pilar I.
Andrade, the Executive Vice President and Treasurer of
the Complainant at that Time, and Lydia E. Cacawa, the
Vice President for Administration and Finance, to apply
for a loan with the Rural Bank of Paracale (RBP), Daet
Branch, Camarines Norte in favor of the complainant.
On May 12, 1999, the Lukban Group sent a letter to RBP
to oppose the loan application because the Adeva Group
appointed Librado Guerra and Cesar Echano, who were
allegedly not registered as stockholders in the Stock and
Transfer Book of the complainant, as members of the
Board of Trustees. The Lukban Group also alleged that
the complainant was having financial difficulties.
On May 14, 1999, respondent sent a letter to RBP to
assure the latter of complainant’s financial capacity to
pay the loan.
On July 13, 1999, RBP granted the loan application in
the amount of ₱200,000 which was secured by a Real
Estate Mortgage over the properties of the complainant.
On September 27, 1999, the Securities and Exchange
Commission (SEC) issued an Order which nullified the
appointment of Librado Guerra and Cesar Echano by the
Adeva Group as members of the Board of Trustees of the
complainant. As a result, complainant sent a letter to
RBP to inform the latter of the SEC Order.
On October 19, 1999, RBP sent a letter to the
complainant acknowledging receipt of the SEC Order
and informing the latter that the SEC Order was referred
to RBP’s legal counsel, herein respondent. The
complainant alleged that it was only upon receipt of
such letter that it became aware that respondent is also
the legal counsel of RBP.
On April 18, 2000, complainant and RBP increased the
loan to ₱400,000.
On April 23, 2002, RBP moved to foreclose the Real
Estate Mortgage.
On May 28, 2002, complainant filed a complaint for
Annulment of Mortgage with a Prayer for Preliminary
Injunction against RBP. Respondent entered his
appearance as counsel for RBP.
On September 2, 2011, complainant filed the present
complaint for disbarment against the respondent for
allegedly representing conflicting interests and for
failing to exhibit candor, fairness, and loyalty.
Respondent raised three defenses against the complaint
for disbarment. First, respondent argued that Marcel N.
Lukban, Alberto I. Garia Jr., and Ma. Pamela Rossana
Apuya cannot represent the complainant in this
disbarment case because they were not duly authorized
by the Board of Directors to file the complaint. Second,
respondent claimed that he is not covered by the
prohibition on conflict of interest which applies only to
the legal counsel of complainant. Respondent argued
that he merely served as the corporate secretary of
complainant and did not serve as its legal counsel.
Third, respondent argued that there was no conflict of
interest when he represented RBP in the case for
annulment of mortgage because all the documents and
information related to the loan transaction between RBP
and complainant were public record. Thus, respondent
claimed that he could not have taken advantage of his
position as the mere corporate secretary of the
complainant.
On February 14, 2013, the Investigating Commissioner
issued a Report and Recommendation2 finding
respondent guilty of representing conflicting interests
and recommending that respondent be suspended from
the practice of law for at least one year. The
Investigating Commissioner noted that respondent
appeared for RBP in the case for annulment of mortgage
filed by his former client, the complainant herein. The
Investigating Commissioner cited cast vouchers3 from
1994 to 2001 showing that respondent was paid by
complainant for his retained legal services. According to
the Investigating Commissioner, these vouchers debunk
respondent’s claim that the complainant merely
appointed him as its corporate secretary. The
Investigating Commissioner also held that the
personality of complainant’s representative to file this
administrative case is immaterial since proceedings for
disbarment, suspension or discipline of attorneys may be
taken by the Supreme Court motu prprio or by the
Integrated Bar of the Philippines (IBP) upon the verified
complaint of any person.
On June 21, 2013, the Board of Governors of the IBP
issued Resolution No. XX-2013-7704 which affirmed the
findings of the Investigating Commissioner and imposed
a penalty of suspension from the practice of law for one
year against respondent.
On May 3, 2014, the Board of Governors of the IBP
issued Resolution No. XXI-2014-2905 which denied the
motion for reconsideration filed by respondent.
The issue in this case is whether respondent is guilty of
representing conflicting interests when he entered his
appearance as counsel for RBP in the case for annulment
of mortgage filed by complainant against RBP.
We rule in the affirmative. We thus affirm the Report
and Recommendation of the Investigating Commissioner,
and Resolution Nos. XX-2013-770 and XXI-2014-290 of
the IBP Board of Governors. Indeed, respondent
represented conflicting interest in violation of Canon 15,
Rule 15.03 of the Code of Professional Responsibility
which provides that [a] lawyer shall not represent
conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.
This rule prohibits a lawyer from representing new
clients whose interests oppose those of a former client
in any manner, whether or not they are parties in the
same action or on totally unrelated cases.6 based on the
principles o public policy and good taste, this
prohibition on representing conflicting interests enjoins
lawyers not only to keep inviolate the client’s
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 lawyer,
which is of paramount importance in the administration
of justice.7 in Maturan v. Gonzales,8 we further
explained the rationale for the prohibition:
The reason for the prohibition is found in the relation of
attorney and client, which is one of trust and
confidence of the highest degree.1âwphi1 A lawyer
becomes familiar with all the facts connected with his
client’s case. He learns from his client the weak points
of the action as well as the strong ones. Such knowledge
must be considered sacred and guarded with care. No
opportunity must be given him to take advantage of the
client’s secrets. A lawyer must have the fullest
confidence of his client. For if the confidence is abused
the profession will suffer by the loss thereof.
Meanwhile, Hornilla v. Salunat,9 we explained the test
to determine the existence of conflict of interest:
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 lawyer’s duty to fight for an issue or claim, but 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.
The rule prohibiting conflict of interest applies to
situations where in a lawyer would be representing a
client whose interest is directly adverse to any of his
present or former clients.10 it also applies when the
lawyer represents a client against a former client in a
controversy that is related, directly or indirectly, to the
subject matter of the previous litigations in which he
appeared for the former client.[11] this rule applies
regardless of the degree of adverse interests.12 what a
lawyer owes his former client is to maintain inviolate
the client’s confidence or to refrain from doing anything
which will injuriously affect him in any matter in which
he previously represented him.13 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.14
Applying the foregoing to the case at bar, we find that
respondent represented conflicting interests when he
served as counsel for RBP in the case for annulment of
mortgage filed by the complainant, respondent’s former
client, against RBP.
The finding of the Investigating Commissioner that
respondent was compensated by complainant for his
retained legal services is supported by the evidence on
record, the cash vouchers from 1994 to 2001. Clearly,
complainant was respondent’s former client. And
respondent appeared as counsel of RBP in a case filed by
his former client against RBP. This makes respondent
guilty of representing conflicting interests since
respondent failed to show any written consent of all
concerned (particularly the complainant) given after a
full disclosure of the facts representing conflicting
interests.15
We also note that the respondent acted for the
complainant’s interest on the loan transaction between
RBP and the complainant when he sent a letter dated
May 14, 1999 to RBP to assure the latter of the financial
capacity of the complainant to pay the loan. But as
counsel for RBP in the case for annulment of mortgage,
he clearly acted against the interest of the complainant,
his former client.
Contrary to the respondent’s claim, it is of no moment
that all the documents and information in connection
with loan transaction between RBO and the complainant
were public records. In Hilado v. David,16 we laid down
the following doctrinal pronouncements:
The principle which forbids an attorney who has been
engaged to represent a client from thereafter appearing
on behalf of the client’s opponent applies equally even
though during the continuance of the employment
nothing of a confidential nature was revealed to the
attorney by the client (Christian vs. Waialua Agricultural
Co., 30 Hawaii, 553, Footnote 7, C. J. S., 828)
Where it appeared that an attorney representing one
party in litigation had formerly represented the adverse
party with respect to the same matter involved in the
litigation, the court need not inquire as to how much
knowledge the attorney acquired from his former client
during that relationship, before refusing to permit the
attorney to represent the adverse party. (Brown vs.
Miller, 52 App. D. C. 330;286, F994)
In order that a court may prevent an attorney from
appearing against a former client, it is unnecessary that
the court ascertain in detail the extent to which the
former client’s affairs might have a bearing on the
matters involved in the subsequent litigation on the
attorney’s knowledge thereof. (Boyd vs. Second Judicial
Dist. Court, 274 P., 7;51 Nev., 264)
This rule has been so strictly enforced that is has been
held that an attorney, on terminating his employment,
cannot thereafter act as counsel against his client in the
same general matter, even though, while acting for his
former client, he acquired no knowledge which could
operate to his client’s disadvantage in the subsequent
adverse employment. (Pierce vs. Palmer [1910], 31 R.
1., 432; 77 Atl., 201, Ann. Cas., 1912S, 181.)
Thus, the nature and extent of the information received
by the lawyer from his client is irrelevant in determining
the existence of conflict of interest.
Finally, we agree with the Investigating Commissioner
that a complaint for disbarment is imbued with public
interest which allows for a liberal rule on legal standing.
Under Section 1, Rule 139-B of the Rules of Court,
[p]roceedings for the disbarment, suspension or
discipline of attorneys may be taken by the Supreme
Court motu proprio, or by the Integrated Bar of the
Philippines (IBP) upon the verified complaint of any
person. Thus, in the present case, we find that Marcel
N. Lukban, Alberto I. Garcia Jr., and Ma. Pamela
Rossana A. Apuya can institute the complaint for
disbarment even without authority from the Board of
Directors of the complainant.
WHEREFORE, premises considered Resolution No. XX-
2013-770 and Resolution No. XXI-2014-290 of the IBP
Board of Governors imposing a penalty of suspension
from the practice of law for one year against respondent
Atty. Jose D. Pajarillo are hereby AFFIRMED.
SO ORDERED.
A.C. No. 1359 October 17, 1991
GENEROSA BUTED and BENITO BOLISAY, petitioners,
vs.
ATTY. HAROLD M. HERNANDO, respondent.
Jorge A. Dolorfino for petitioners.
RESOLUTION
PER CURIAM:p
On 22 August 1974, spouses Generosa Buted and Benito
Bolisay filed an administrative complaint for
malpractice against respondent Atty. Harold M.
Hernando, charging the latter with having wantonly
abused professional secrets or information obtained by
him as their counsel.
After respondent Hernando filed his Answer on 25 June
1974, the Court, in a resolution dated 4 October 1974
referred the complaint to the Solicitor-General for
investigation, report and recommendation.
On 10 February 1975, complainants presented a Joint
Affidavit of Desistance. 1
On 24 October 1975, the Solicitor-General conducted a
hearing where respondent took the witness stand on his
own behalf.
The record of the case shows the following background
facts:
In an action for partition instituted by Generosa as
compulsory heir of the deceased Teofilo Buted,
respondent was counsel for Luciana Abadilla and a
certain Angela Buted. Involved in said partition case was
a parcel of land Identified as Lot 9439-B. Respondent
ultimately succeeded in defending Luciana Abadilla's
claim of exclusive ownership over Lot 9439-B. When
Luciana died, respondent withdrew his appearance from
that partition case.
It appears that Luciana Abadilla sold the lot to Benito
Bolisay and a new Transfer Certificate of Title over the
lot was issued in the name of complainant spouses.
When an action for specific performance was lodged by
a couple named Luis Sy and Elena Sy against Benito
Bolisay as one of the defendants, 2 the latter retained
the services of respondent Atty. Hernando however
claims that he rendered his services to Benito Bolisay
free of charge. Subject of this case was a contract of
lease executed by Benito's co-defendant therein,
Enrique Buted, over a house standing on a portion of Lot
No. 9439-B. It appears that the Sy's were claiming that
the lease extended to the aforementioned lot. Benito
was then asserting ownership over the realty by virtue
of a Deed of Sale executed by Luciana Abadilla in his
favor. Eventually, the Sy's were ordered to vacate the
house subject of the lease. Respondent avers that the
relationship between himself and Benito Bolisay as
regards this case was terminated on 4 December 1969. 3
On 23 February 1974, respondent Hernando, without the
consent of the heirs of Luciana Abadilla and complainant
spouses, filed a petition on behalf of the heirs of Carlos,
Dionisia and Francisco all surnamed Abadilla, seeking
the cancellation of the Transfer Certificate of Title
(TCT) of complainant spouses over the lot. Carlos,
Dionisia and Francisco were Luciana's registered co-
owners in the original certificate of title covering Lot
No. 9439-B. 4 At the hearing, respondent Hernando
testified that if the petition for cancellation of TCT was
granted, Lot 9439-B would no longer be owned by
complainant spouses but would be owned in common by
all the heirs of Luciana Abadilla. 5
Complainant spouses, upon learning of respondent's
appearance against them in the cadastral proceeding,
manifested their disapproval thereof in a letter dated 30
July 1974. 6 Respondent however, pursued the case
until it was eventually dismissed by the trial court on 2
September 1974 on the ground of prescription. 7
At the hearing before the Office of the Solicitor General
and in his Answer, respondent Hernando admitted his
involvement in the cadastral case as counsel for the
Abadillas but denied having seen or taken hold of the
controversial Transfer Certificate of Title, and having
availed himself of any confidential information relating
to Lot 9439-B.
In its Report and Recommendation dated 29 March 1990,
the Solicitor General recommends that respondent be
suspended from the practice of law for three (3) months
for violation of the Canons of Professional Ethics by
representing clients with conflicting interests, and filed
before this Court the corresponding Complaint 8 dated
30 March 1990.
The issue raised in this proceeding is: whether or not
respondent Hernando had a conflict of interests under
the circumstances described above.
The Canons of Professional Ethics, the then prevailing
parameters of behavior of members of the bar, defines
a conflict of interests situation in the following manner:
6. Adverse influence and conflicting interests.—
xxx xxx xxx
It is unprofessional to represent conflicting interests,
except by express consent of all concerned given after a
full disclosure of the facts. Within the meaning of this
canon, a lawyer represents conflicting interests when,
in behalf of one client, it is his duty to contend for that
which duty to another client requires him to oppose.
The obligation to represent the client with undivided
fidelity and not to divulge his secrets or confidence
forbids also the subsequent acceptance of retainers or
employment from others in matters adversely affecting
any interest of the client with respect to which
confidence has been reposed. (Emphasis supplied)
Though as regards the first and second cases handled by
respondent, no conflict of interest existed, the same
cannot be said with respect to the action for specific
performance and the cadastral proceeding. By
respondent's own admission, he defended the right of
ownership over Lot 9439-B of complainant Benito Bolisay
in the action for specific performance. He assailed this
same right of ownership when he subsequently filed a
petition for cancellation of complainants' Transfer
Certificate of Title over that same lot. Respondent
Hernando was in a conflict of interest situation.
It is clear from the above-quoted portion of the Canons
of Professional Ethics that in cases where a conflict of
interests may exist, full disclosure of the facts and
express consent of all the parties concerned are
necessary. 9 The present Code of Professional
Responsibility is stricter on this matter considering that
consent of the parties is now required to be in written
form. 10 In the case at bar, such consent was wanting.
Respondent persistently argues that contrary to the
claims of complainant spouses, he had never seen nor
taken hold of the Transfer Certificate of Title covering
Lot No. 9439-B nor obtained any confidential
information in handling the action for specific
performance. 11 The contention of respondent is, in
effect, that because complainant has not clearly shown
that respondent had obtained any confidential
information from Benito Bolisay while representing the
latter in the action for specific performance,
respondent cannot be penalized for representing
conflicting interests. That is not the rule in this
jurisdiction. The rule here is, rather, that the mere fact
that respondent had acted as counsel for Benito Bolisay
in the action for specific performance should have
precluded respondent from acting or appearing as
counsel for the other side in the subsequent petition for
cancellation of the Transfer Certificate of Title of the
spouses Generosa and Benito Bolisay. There is no
necessity for proving the actual transmission of
confidential information to an attorney in the course of
his employment by his first client in order that he may
be precluded from accepting employment by the second
or subsequent client where there are conflicting
interests between the first and the subsequent clients.
The reason for this rule was set out by the Court in
Hilado v. David 12 in the following terms:
Communications between attorney and client are, in a
great number of litigations, a complicated affair,
consisting of entangled relevant and irrelevant, secret
and well known facts. In the complexity of what is said
in the course of the dealings between an attorney and a
client, inquiry of the nature suggested would lead to the
revelation, in advance of the trial, of other matters that
might only further prejudice the complainant's cause.
And the theory would be productive of other unsalutary
results. To make the passing of confidential
communication a condition precedent; i.e., to make the
employment conditioned on the scope and character of
the knowledge acquired by an attorney in determining
his right to change sides, would not enhance the
freedom of litigants, which is to be sedulously fostered,
to consult with lawyers upon what they believe are
their rights in litigation. The condition would of
necessity call for an investigation of what information
the attorney has received and in what way it is or it is
not in conflict with his new position. Litigants would be
in consequence be wary in going to an attorney, lest by
an unfortunate turn of the proceeding, if an
investigation be held, the court should accept the
attorney's inaccurate version of the facts that came to
him.
Hence the necessity of setting down the existence of
the bare relationship of attorney and client as the
yardstick for testing incompatibility of interests. This
stern rule is designed not alone to prevent the dishonest
practitioner from fraudulent conduct, but as well to
protect the honest lawyer from unfounded suspicion of
unprofessional practice. (Strong vs. Int. Bldg., etc.;
Ass'n. 183 III., 97; 47 L.R.A., 792) It is founded on
principles of public policy, on good taste. As has been
said another case, the question is not necessarily one of
the rights of the parties, but as to whether the attorney
has adhered to proper professional standard. With these
thoughts in mind, it behooves attorneys, like Caesar's
wife, not only to keep inviolate the client's confidence,
but also to avoid the appearance of treachery and
double-dealing. Only thus can litigants be encouraged to
entrust their secrets to their attorneys which is of
paramount importance in the administration of justice.
13 (Emphasis supplied)
This Court went further in San Jose v. Cruz, 14 where
the lawyer was charged with malpractice for having
represented a new client whose interest was opposed to
those of his former clients in another case:
The record shows that the respondent offered his
services to the Matienzo spouses knowing that the
petitioner had obtained a favorable judgment in the
civil case No. 5480 and that his efforts in the subsequent
civil case No. 5952 would frustrate said judgment and
render it ineffectual, as has really been the result upon
his obtaining the writ of injunction above-mentioned.
Obviously his conduct is unbecoming to an attorney and
cannot be sanctioned by the courts. An attorney owes
loyalty to his client not only in the case in which he has
represented him but also after the relation of attorney
and client has terminated and it is not a good practice
to permit him afterwards to defend in another case
other persons against his former client under the
pretext that the case is distinct from, and independent
of the former case. 15 (Emphasis supplied)
The appropriate rule has been expressed by Justice
Malcolm in the following manner:
An attorney is not permitted, in serving a new client as
against a former one, to do anything which will
injuriously affect the former client in any manner in
which the attorney formerly represented him, though
the relation of attorney and client has terminated, and
the new employment is in a different case; nor can the
attorney use against his former client any knowledge or
information gained through their former connection. 16
(Emphasis supplied)
The absence of monetary consideration does not exempt
the lawyer from complying with the prohibition against
pursuing cases where a conflict of interest exists. The
prohibition attaches from the moment the attorney-
client relationship is established and extends beyond the
duration of the professional relationship.
The Court therefore agrees with the Solicitor-General
that respondent Hernando is guilty of violation of the
Canons of Professional Ethics by representing clients
with conflicting interests. We believe, however, that a
heavier penalty is appropriate.
ACCORDINGLY, the Court Resolved to SUSPEND Atty.
Harold M. Hernando from the practice of law for a
period of five (5) months, with a WARNING that
repetition of the same or similar offense will warrant a
more severe penalty. A copy of this Resolution shall be
furnished to all courts and to the Office of the Bar
Confidant and spread on the personal record of
respondent.