De Guzman v. de Dios (2001) | A.C. No. 4943 |January 26, 2001 | Ponente: Pardo, J.

Nature of Case: Complaint for Disbarment

Petioner(s): Diana de Guzman
Respondent: Atty. Lourdes de Dios
LegProf Topic: Canon 15: Rule 15.01 and 15.03 Conflict of Interest

SUMMARY: Atty de Dios appeared as counsel for complainant de Guzman for the establishment of a
corporation. Eventually, de Guzman was removed from the corporation for unpaid shares of stock, while
Atty De Dios became the president. The court ruled that there was evidence of collusion between the
Board of Directors and the respondent, while the respondent was engaged in attorney-client privilege
with the complainant. Clearly, respondent violated the prohibition against representing conflicting
interests and engaging in unlawful, dishonest, immoral or deceitful conduct.

FACTS:

 Complainant de Guzman engaged the services of respondent as counsel in order to form a

corporation
 January 1996: With the assistance of Atty De Dios, complainant was able to found Suzuki Beach
Hotel, to which she paid a monthly retainer fee of P5,000
 December 1997: Corporation required complainant to pay unpaid subscribed shares of stock of
P2,235,000 or 22,350 shares
 January 1998: Complainant received notice of the public auction of her delinquent shares.
Thereafter, she learned that her shares by a certain del Rosario.
 The sale ousted complainant from the corporation, while Atty de Dios became the president of
the corporation.
 Thus, a complaint for disbarment was filed against Atty de Dios. Complainant alleged that:
respondent appeared as her counsel and signed pleadings where complainant was one of the
parties
 Respondent: her appearance as counsel for complainant Diana de Guzman was to protect the
rights and interest of SBHI since the latter was real owner of the land in controversy.
 IBP resolution: acts of respondent were not motivated by ill will as she acted in the best interest
of her client, IBP found that she failed to present proof of the attorney-client relationship.

WON there is merit in the complaint—yes

 There is lack of explanation on why complainant got ousted from the corporation considering
the amount of her investments
o Complainant was majority stockholder. She was subscribed to 29,800 shares, amounting
to P2,980,000
o Granting that the sale of the delinquent shares was valid, there was no explanation of
what happened to her original sales

WON there was conflict of interest—yes

  There was attorney client privilege between the respondent and complainant
o It was complainant who retained respondent to form a corporation.
o She appeared as counsel in behalf of complainant.
 At the same time, there is evidence of collusion between the board of directors and respondent
o This is clear from the people who are now in the Board of Directors and the fact that
respondent is now president
 The two scenarios point that there is clear conflict of interest
 Lawyers must conduct themselves, especially in their dealings with their clients and the public at
large, with honesty and integrity in a manner beyond reproach
 Clearly, respondent violated the prohibition against representing conflicting interests and
engaging in unlawful, dishonest, immoral or deceitful conduct.
 The acts of respondent Atty. De Dios are clearly in violation of her solemn oath as a lawyer
that this Court will not tolerate.

DISPOSITION: the Court finds respondent Atty. Lourdes I. De Dios remiss in her sworn duty to her
client, and to the bar. The Court hereby SUSPENDS her from the practice of law for six (6) months,
with warning that a repetition of the charges will be dealt with more severely.