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Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

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 letters5therefor.

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 ₱8,000.00 was paid to him as part of the acceptance 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,20which 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.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

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.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

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 estafa 1was
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.35The 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.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

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.

Republic of the Philippines


SUPREME COURT
Manila

FIRST DIVISION

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.

EN BANC

ROLANDO B. PACANA, JR., A.C. No. 8243


Complainant,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
- versus - VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,*
PERALTA, and
BERSAMIN, JJ.

Promulgated:

ATTY. MARICEL PASCUAL-LOPEZ, July 24, 2009


Respondent.
x-----------------------------------------------------------------------------------------x

DECISION

PER CURIAM:

This case stems from an administrative complaint[1] 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
(P30,000,000.00) 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 Precedents 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 Agreement[4] 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 (P100,000.00) 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
respondent[8] asking for the return and immediate settlement of the funds invested by respondents
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 complainants 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 P900,000.00 which was received by respondent herself.[13] Sometime thereafter, complainant
again gave respondent P1,000,000.00.[14] Said amounts were all part of Precedents collections and
sales proceeds which complainant held as assignee of the companys 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 Multitels 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
complainants name.[16] In two separate e-mail messages,[17] respondent again asked money from
complainant, P200,000 of which was handed by complainants wife while respondent was confined
in Saint Lukes Hospital after giving birth,[18] and another P700,000 allegedly to be given to the
NBI.[19]

Through respondents persistent promises to settle all complainants 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 complainants 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. Vals 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!

Candy[22]
On July 4, 2003, contrary to respondents 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 P12,500,000.00 as attorneys fees and was willing to
give P2,000,000.00 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 respondents offer but respondent, later on, changed her mind and
told complainant that she would instead invest the P2,000,000.00 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 complainants 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 Benefons obligation to
Precedent which respondent had previously taken charge of, respondent arrogantly answered that
she was very busy and that she would read Benefons letter only when she found time to do so.

On November 9, 2004, fed up and dismayed with respondents 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 respondents 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-complaint[33] 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.[35]

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 IBPs 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
Recommendation[40] 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
Recommendation[42] 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 taste[43] and, more
importantly, upon necessity. In the course of a lawyer-client relationship, the lawyer learns all the
facts connected with the clients 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 clients confidence, but also to avoid
the appearance of treachery and double ─ dealing for only then can litigants be encouraged to
entrust their secrets to their lawyers, which is paramount in the administration of justice. [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 respondents 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.)

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
lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other
client. In brief, if he argues for one client, this argument will be opposed by him
when he argues for the other client. This rule covers not only cases in which
confidential communications have been confided, but also those in which no
confidence has been bestowed or will be used. Also, there is conflict of interests if
the acceptance of the new retainer will require the attorney to perform an act which
will injuriously affect his first client in any matter in which he represents him and
also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency
of interests is whether the acceptance of a new relation will prevent an attorney
from the full discharge of his duty of undivided fidelity and loyalty to his client or
invite suspicion of unfaithfulness or double dealing in the performance thereof.[52]

Indubitably, respondent took advantage of complainants 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 latters 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, respondents 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
respondents unethical behavior.[55] This remark indubitably displays respondents 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 Chapter[56] 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 Lawyers Oath, has been rendered moot and academic by voluntary termination of her IBP
membership, allegedly after she had been placed under the Department of Justices 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 respondents 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 ones
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 Lawyers Oath and the Code of Professional Responsibility.

Let a copy of this Decision be entered in the respondents 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.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

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.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

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. 6Respondent
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 12in 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)