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Artezuela vs.

Maderazo
Facts: Echavia crashed the car he is driving which is owned by Kiyami, but was
registered in the name of Villapez. The car rammed into a small carinderia owned by
Artezuela. The destruction of the carinderia caused the cessation its operation,
resulting to her financial dislocation. Artezuela incurred debts from her relatives and
due to financial constraints, stopped sending her two children to college. Artezuela
hired Maderazo in filing a damage suit against Echavia, Villapez and Kiyami. For his
services, Artezuela paid Maderazo 10,000 as attorneys fees and 2,000 as filing fee.
However, the case was dismissed, allegedly upon the instance of the Artezuela and
her husband. Because of the dismissal of the case, Artezuela filed a civil case for
damages against the Maderazo. The case was dismissed.
Artezuela filed for disbarment against the Maderazo. Artezuela argues that
Maderazo engaged in activities inimical to her interests. While acting as her
counsel, Maderazo prepared Echavias Answer to the Amended Complaint. The said
document was even printed in Maderazos office. Artezuela further averred that it
was Maderazo who sought the dismissal of the case, misleading the trial court into
thinking that the dismissal was with her consent. Maderazo denied Artezuelas
allegations. However, he admitted that Echavias Answer to the Amended Complaint
was printed in his office but denied having prepared the document and having acted
as counsel of Echavia.
Case was referred to IBP. IBP investigated the case. IBP found Maderazo guilty of
representing conflicting interests, in violation of Canon 15 and Rule 15.03 of the
Code of Professional Responsibility, as well as, of Canon 6 of the Code of
Professional Ethics.

Issues:
(1) Whether Maderazo violated Canon 15 and Rule 15.03 (conflict of interest) of the
Code of Professional Responsibility
(2) Whether Maderazo had a direct hand in the preparation of Echavias Answer to
the Amended Complaint.

Held: YES to both


Maderazo was actually giving advice to Echavias but he was not the counsel of
record. Maderazo does not have to publicly hold himself as the counsel of the
adverse party, nor make his efforts to advance the adverse partys conflicting
interests of record. It is enough that the counsel of one party had a hand in the
preparation of the pleading of the other party, claiming adverse and conflicting
interests with that of his original client. To require that he also be counsel-of-record
of the adverse party would punish only the most obvious form of deceit and reward,
with impunity, the highest form of disloyalty.

An attorney owes his client undivided allegiance. Because of the highly fiduciary
nature of the attorney-client relationship, sound public policy dictates that a lawyer
be prohibited from representing conflicting interests or discharging inconsistent
duties. Good faith and honest intention on the part of the erring lawyer does not
make this rule inoperative. The lawyer is an officer of the court and his actions are
governed by the uncompromising rules of professional ethics.

Unity Fishing vs. Macalino


Facts: Atty. Danilo Macalino (D) was hired to represent Frabal Fishing and Ice Plant
Corporation against Wheels Distributor, Inc. Frabal was eventually bought by Unity
Fishing Development Corporation (P) during the pendency of the case.
Unity Fishing (P) was evicting Wheels Distributor from their property. Macalino (D),
as counsel, advised the Unity Fishing (P) to severe all contractual relationship with
Wheels Distributor and return their security deposit amounting to P50,000. Macalino
(D) volunteered to take the check to Wheels Distributor himself.
Later, another lawyer was hired to replace Macalino (D) and the case of Unity
Fishing (P) against Wheels Distributor was eventually settled. But Unity Fishing (P)
was shocked to learn that Wheels Distributor never got the P50,000 security
deposit.
After an investigation, Unity Fishing (P) discovered that the check was deposited to
Macalino's (D) account and he was actually the one who withdrew the money.
Lawyer misappropriated money from his client.
Issues: Which provision of the Code of Ethics did Atty. Macalino violate?

Ruling: Atty. Macalion (D) violated Canon 16 of the Code of Ethics.


Canon 16 - A lawyer shall hold in trust all moneys and properties of his client that
may come into his possession.
Rule 16.1 - A lawyer shall account for all money or property collected or received for
or from the client.
Rule 16.2 - A lawyer shall keep the funds of each client separate and apart from his
own and those of others kept by him.
Rule 16.3 - A lawyer shall deliver the funds and property of his client when due or
upon demand. However, he shall have a lien over the funds and may apply so much
thereof as may be necessary to satisfy his lawful fees and disbursements, giving
notice promptly thereafter to his client. He shall also have a lien to the same extent
on all judgments and executions he has secured for his client as provided for in the
Rules of Court.

Junio vs. Atty. Grupo


Facts:
Rosario Junio entrusted to Atty. Salvador Grupo, P25,000 to be used in the
redemption of a property in Bohol. For no reason at all, Atty. Grupo did not redeem
the property so the property was forfeited. Because of this, Junio wanted the money
back but Grupo refused to refund. Instead, Grupo requested that he use the money
to help defray his childrens educational expenses. It was a personal request to
which Grupo executed a PN. He maintains that the family of the Junio and Grupo
were very close since Junios sisters served as Grupos household helpers for many
years. Grupo also stated that the basis of his rendering legal services was purely
gratuitous or an act of a friend for a friend with consideration involved. He
concluded that there was no atty-client relationship existing between them.
The case was referred to the IBP and found Grupo liable for violation of Rule 16.04
of the Code of Profesisonal Responsibility which forbids lawyers from borrowing
money from their clients. The IBP Board of Governors recommended that he be
suspended indefinitely from the practice of law. Grupo filed a motion for
reconsideration.

Issue:
Whether or not there was an atty-client relationship.

Held:
Yes. If a person, in respect to his business affairs, consults with an attorney in his
professional capacity and the attorney voluntarily permits in such consultation, then
the professional employment must be regarded as established.
Having gained dominance over Junio by virtue of such long relation of master and
servant, Grupo took advantage of his influence by not returning the money. Grupo
has committed an act which falls short of the standard conduct of an attorney. If an
ordinary borrower of money is required by law to repay his loan, it is more so in the
case of a lawyer whose conduct serves as an example.

*SC orders Grupo suspended from the practice of law for a month and to pay Junio
within 30 days with interest at the legal rate.
* Note: 5 yrs. has already passed since the loan.