[A.M. No. 5925.

March 11, 2003] (CANON 15)

RUBY MAE BARNACHEA, complainant, vs. ATTY. EDWIN T. QUIOCHO, respondent.

Complainant engaged the legal services of respondent for the latter to cause the transfer under her
name of the title over a property previously owned by her sister. Complainant was able to pay
respondent for legal fees.
Respondent failed. Complainant demanded that respondent refund to her the legal fees and return the
documents which she earlier entrusted to him. However, respondent failed to comply with said
demands.

Held: SUSPENDED for 1 year; repetition of violation will be dealt severely. PAY the complainant.

Even if it were true that no attorney-client relationship existed between them, case law has it that an
attorney may be removed or otherwise disciplined not only for malpractice and dishonesty in the
profession but also for gross misconduct not connected with his professional duties, making him unfit
for the office and unworthy of the privileges which his license and the law confer upon him.

A lawyer is obliged to hold in trust money or property of his client that may come to his possession. The
conversion by a lawyer funds entrusted to him by his client is a gross violation of professional ethics and
a betrayal of public confidence in the legal profession.

“The relation of attorney and client is highly fiduciary in nature and is of a very delicate, exacting and
confidential character. A lawyer is duty-bound to observe candor, fairness and loyalty in all his dealings
and transactions with his clients. The profession, therefore, demands of an attorney an absolute
abdication of every personal advantage conflicting in any way, directly or indirectly, with the interest of
his client. In this case, respondent miserably failed to measure up to the exacting standard expected of
him.”

[A.C. No. 5804. July 1, 2003] (CANON 15)

BENEDICTO HORNILLA and ATTY. FEDERICO D. RICAFORT, complainants, vs. ATTY. ERNESTO S. SALUNAT,
respondent.

An SEC Case was filed by the PPSTA against its own Board of Directors. Respondent admits that the ASSA
Law Firm, of which he is the Managing Partner, was the retained counsel of PPSTA. Yet, he appeared as
counsel of record for the respondent Board of Directors in the said case. Complainants contend that
respondent was guilty of conflict of interest because he was engaged by the PPSTA, of which
complainants were members, and was being paid out of its corporate funds where complainants have
contributed. Despite being told by PPSTA members of the said conflict of interest, respondent refused to
withdraw his appearance in the said cases.
Held: GUILTY of representing conflicting interests and is ADMONISHED to observe a higher degree of
fidelity in the practice of his profession. WARNED that a repetition of the same or similar acts will be
dealt with more severely.

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.

In other jurisdictions, the prevailing rule is that a situation wherein a lawyer represents both the
corporation and its assailed directors unavoidably gives rise to a conflict of interest. The interest of the
corporate client is paramount and should not be influenced by any interest of the individual corporate
officials. The rulings in these cases have persuasive effect upon us. After due deliberation on the wisdom
of this doctrine, we are sufficiently convinced that “a lawyer engaged as counsel for a corporation
cannot represent members of the same corporation’s board of directors in a derivative suit brought
against them. To do so would be tantamount to representing conflicting interests, which is prohibited by
the Code of Professional Responsibility.”

Hornilla vs. Salunat

Post under case digests, Legal Ethics at Thursday, March 08, 2012 Posted by Schizophrenic Mind

Facts: Hornilla filed a complaint against Atty. Salunat with the IBP Commission on Bar Discipline for
unethical practice regarding conflict of interests. Said counsel is a member of the ASSA Law Office and
acted as the lawyer for the Philippine Public School Teacher’s Association.

In a squabble between the PPSTA and some of its board members pending SEC resolution for unlawful
spending and undervalued sale of real properties, Atty. Salunat appeared as counsel for said board
members.

Respondent says he only appeared in behalf of ASSA since he was a partner. Moreover, he only filed a
Manifestation for extreme urgency.

Issue: Whether or not Salunat is guilty of unethical behavior as a member of the IBP.

Held: Yes. Respondent Atty. Ernesto Salunat is found GUILTY of representing conflicting interests and is
ADMONISHED to observe a higher degree of fidelity in the practice of his profession. He is further
WARNED that a repetition of the same or similar acts will be dealt with more severely.
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.

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.

Where corporate directors have committed a breach of trust either by their frauds, ultra vires acts, or
negligence, and the corporation is unable or unwilling to institute suit to remedy the wrong, a
stockholder may sue on behalf of himself and other stockholders and for the benefit of the corporation,
to bring about a redress of the wrong done directly to the corporation and indirectly to the
stockholders. This is what is known as a derivative suit, and settled is the doctrine that in a derivative
suit, the corporation is the real party in interest while the stockholder filing suit for the corporations
behalf is only nominal party. The corporation should be included as a party in the suit.

In the case at bar, the records show that SEC Case No. 05-97-5657, entitled Philippine Public School
Teachers Assn., Inc., et al. v. 1992-1995 Board of Directors of the Philippine Public School Teachers Assn.
(PPSTA), et al., was filed by the PPSTA against its own Board of Directors. Respondent admits that the
ASSA Law Firm, of which he is the Managing Partner, was the retained counsel of PPSTA. Yet, he
appeared as counsel of record for the respondent Board of Directors in the said case. Clearly,
respondent was guilty of conflict of interest when he represented the parties against whom his other
client, the PPSTA, filed suit.

HORNILLA v. SALUNATJuly 1, 2003Ynares-Santiago, J(FACTS LANG)

RULE 15.03 A lawyer shall not represent conflicting interests except bywritten consent of all
concerned given after a full disclosure of the facts.
Benedicto Hornilla and Federico Ricafort filed an administrative complaint withthe IBP on BAR Discipline
against Ernest Hornilla for illegal and unethicalpractice and conflict of interest.FACTS:
y

Atty. Ernesto Salunat

o

Partner of ASSA Law and Associates - Counsel of the PhilippinePublic School Teachers Association
(PPSTA)
o

Retained Counsel of PPSTA Board members (His brother AurelioSalunat being part of the board)
y

Complainants filed an intra-corporate case against its members of theBoard before the SEC and
Ombudsman for unlawful spending and theundervalued sale of real property of the PPSTA. Here, Atty.
Salunat entered his appearance as counsel for the PPSTA Board members.
o

Complainants contend conflict of interest and that he violate Rule15.06 as he assured the board
members that he will win the case.
y

Atty. Salunat responded by saying:

o

He appeared as counsel for the PPSTA Board members in behalf of the ASSA Law and Associates, and
only filed a manifestation of extreme urgency where another lawyer handled the case.
o

Complainant instigated, orchestrated and indiscriminately filed thecase against the PPSTA board
members.
o

He denied ensuring the victory of the board members as he onlyassured that the truth will come out.
o

Atty. Ricafort guilty of gross violation of oath of office for fillingtrumped-up charges against him.
y

Test of inconsistent interests:

o

whether or not in behalf of one client, it is the lawyer s duty tofight for an issue or claim, but it is his
duty to oppose it for theother client. In brief, if he argues for one client, this argument willbe opposed
by him when he argues for the other client
o

whether the acceptance of a new relation will prevent an attorneyfrom the full discharge of his duty of
undivided fidelity and loyaltyto his client or invite suspicion of unfaithfulness or double dealingin the
performance thereof.
y

Derivative suit = corporation vs. stockholdersISSUE:Can a lawyer engaged by a corporation defend

members of the board of the samecorporation in a derivative suit?

CASE NO. 63BENEDICTO HORNILLA

and
ATTY. FEDERICO D. RICAFORT,
complainants, vs.
ATTY.ERNESTO S. SALUNAT,
respondent
.
Facts:
This is an administrative case filed by Benedicto Hornilla and Federico Ricafort against Atty.Ernesto
Salunat for illegal and unethical practice and conflict of interest.Complainants alleged that respondent is
a member of the ASSA Law and Associates, which wasthe retained counsel of the Philippine Public
School Teachers Association (PPSTA). Complainants, whoare members of the PPSTA, filed an intra-
corporate case against its members of the Board of Directors before the Securities and Exchange
Commission, which was docketed as SEC Case No. 05-97-5657,
anda complaint before the Office of the Ombudsman, docketed as OMB Case No. 0-97-0695,
for unlawful spending and the undervalued sale of real property of the PPSTA. Respondententered his
appearance as counsel for the PPSTA Board members in the said cases. Complainantscontend that
respondent was guilty of conflict of interest because he was engaged by the PPSTA, of which
complainants were members, and was being paid out of its corporate funds where complainantshave
contributed. Despite being told by PPSTA members of the said conflict of interest, respondentrefused to
withdraw his appearance in the said cases.
In his Answer, respondent stressed that he entered his appearance as counsel for thePPSTA Board
Members for and in behalf of the ASSA Law and Associates. Respondent claimsthat it was complainant
Atty. Ricafort who instigated, orchestrated and indiscriminately filed thesaid cases against members of
the PPSTA and its Board. He denied that he ensured the victory of the PPSTA Board in the case he was
handling. He merely assured the Board that the truth willcome out and that the case before the
Ombudsman will be dismissed for lack of jurisdiction,considering that respondents therein are not public
officials, but private employees. Anent theSEC case, respondent alleged that the same was being
handled by the law firm of Atty. Eduardode Mesa, and not ASSA.
Issue:
Whether or not respondent was guilty of violating Rule 15.03 of the Code of ProfessionalResponsibility
(CPR) when he represented the assailed directors of the corporation of which he is aretained counsel.
Held:
Rule 15.03 of the CPR mandates: “A lawyer shall not represent conflicting interests except bywritten
consent of all concerned given after a full disclosure of the facts.”
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 dutyto fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if heargues for one client, this argument
will be opposed by him when he argues for the other client.

105 ROLLON v NAVALFACTS

ROLLON, together with her SON, went to the office of ATTY NARAVAL to seek his assistance in a case
filed againsther (Collection of Sum of Money)
After going through the documents, ATTY NARAVAL agreed to be ROLLON’S lawyer and required her to
payP8,000 as filing and partial service fee

As per instruction of ATTY NARAVAL, ROLLON’S SON returned to his office to follow up however ATTY
NARAVALtold the SON that he was not able to act on the case because he was busy

After several follow-ups and still no action, ROLLON decided to withdraw the amount paid to ATTY
NARAVAL forfailure of the latter to comply with their mutual agreement

ATTY NARAVAL said that he could not return the documents because the same were in his house and
the P8,000paid by ROLLON because he has no money

ROLLON decided to refer the matter to the IBP President of Davao City

INVESTIGATING COMMISSIONER: suspend for 1 year for neglect of duty and/or violation of Canons 15
and 18

IBP BOARD OF GOVERNOR’S RESOLUTION: suspend for 2 years for violation of Canons 15 and 18 and
restitution of P8,000
ISSUEW/N ATTY NARAVAL SHOULD BE REPRIMANDEDHELDYES, FOR VIOLATION OF RULE 15.05 AND
CANONS 16, 17 & 18RATIO

Ordinarily, lawyers are not obliged to act either as advisers or as advocates of any person who may wish
tobecome their client. They may decline employment and refuse to accept representation, if they are
not in aposition to carry it out effectively and competently. But once they agree to handle a case,
attorneys are requiredby the Canons of Professional Responsibility to undertake the task with zeal, care
and utmost devotion.
Acceptance of money from a client establishes an attorney client-relationship and gives rise to the duty
of fidelityto a client’s cause. And every case accepted by a lawyer deserves full attention, diligence, skill
and competence.Hence, practicing lawyers may accept only as may cases as they can efficiently handle.
Otherwise, their clientswould be prejudiced.

In the case at bar, records show that after receiving P8,000, ATTY NARAVAL failed to render any legal
service toROLLON and despite ROLLON’S repeated demands, ATTY NARAVAL failed to return the files of
the case that hadbeen entrusted to him and kept the money ROLLOON had likewise entrusted to him

Furthermore, after going through her papers, ATTY NARAVAL should have given ROLLON a candid
opinion on themerits and status of the case. Apparently, the civil suit against ROLLON had been decided
against her and hadlong become final executory. However, ATTY NARAVAL withheld such vital
information from ROLLON and evendemanded P8,000 as filing and service fee giving her hope that her
case would be acted upon.
JUDGMENT

Atty. Camilo Naraval is found

GUILTY
of violating Rule 15.05 and Canons 16, 17 and 18 of the Code of ProfessionalResponsibility and is hereby
SUSPENDED
from the practice of law for a period of two (2) years, effective upon hisreceipt of this Decision.
Furthermore, he is
ORDERED TO RESTITUTE,
within thirty (30) days from notice of thisDecision, complainant’s eight thousand pesos (P8,000), plus
interest thereon, at the rate of six percent perannum, from October 18, 2000, until fully paid.

NICANOR GONZALES and SALUD PANTANOSAS vs. ATTY. MIGUEL SABAJACAN

ISSUE:
Whether or not it is justifiable for Atty. Sabajacan in holding the certificates of title and its refusal to
deliver the said titles to the complainant despite a formalletter demand.
FACTS:
Sometime in October 1994 complainants were informed by the Register of Deeds of Cagayan de Oro City
that the complainants owner s duplicate of titlecovering their lands were entrusted to the office
secretary of the respondentwho in torn entrusted the same to respondent but when demanded to
deliverthe said titles to the complainant in formal demand letter refused and continuesto refuse without
any justification to give their titles and that in spite of repeateddemands, requests and pleas towards
respondent, respondent still fail andstubbornly refused without justification to surrender the said titles
to the rightfulowners, the complainants.The Court required commenting on the foregoing complaint;
the respondentadmitted having met Salud Panatanosas but claims that, to his recollection,Nicanor
Gonzales has never been to his office. He further denies complainants allegation that he is arrogant, in
contrast to the innocence, simplicity andignorance of said complainants. The Court finds that
respondent admittedhaving taken possession of the certificate of titles and that all he did was toinform
the Court that his obligation to deliver the certificates to Mr. Samto Uyexcludes the delivery of said
certificates to anyone else. Respondent attachedsome certificates of title to his answer to support his
contention thatcomplainants are notorious characters. However, the certifications indicate thatmost of
the cases stated therein, especially those involving fraud, have beendismissed. Respondent likewise
submitted Xerox copies of certain certificates of title in an effort to explain why he kept the certificates
of title of complainantsthat is supposedly for the purpose of subdividing the property. Unfortunately,
anexamination of the same does not show any connection thereof to respondent sclaim. In fact, two
sets of certificates of title appear to be entirely different fromeach other.
HELD:
As a lawyer, respondent should know that there are lawful remedies providedby law to protect the
interests of his client. The records do not show that he orhis client has availed of said remedies. Also, he
cannot be unaware of theimposable sanction on a counsel who resorts to unlawful means that
wouldcause injustice to the adversaries of his client.The Court accordingly finds that the respondent has
not exercises the good faithand diligence required of lawyers in handling the legal affairs of their
clients.Apparently, respondent has disregarded Canon 15, Rule 15.07 of the Code of Professional
Responsibility which provides that a lawyer shall impress upon hisclient the need for compliance with
the laws and principles of fairness. Instead,he unjustly refused to give to complainants their certificates
of titles supposedlyto enforce payment of their alleged financial obligations to his client presumablyto
impress the latter of his power to do so.Canon 19, Rule 19.01 ordains that a lawyer shall employ only
fair and honestmeans to attain the lawful objectives of his client and shall not present,participate in
presenting, or threaten to present unfounded charges to obtain animproper advantage in any case or
proceeding. Respondent has closely skirtedthis proscription, if he has not in fact transgressed the
same.The Court desires and directs that respondent should forthwith return thecertificates of title of
complainants. To ensure the same, he should be placedunder suspension until he presents to the Court
that the disputed certificates of title have been returned to and receipt thereof duly acknowledged
bycomplainants, or can present a judicial order or appropriate legal authority justifying the possession
by him or his client of said certificates. He is furtherWARNED that a repetition of the same or similar or
any other administrativemisconduct will be punished more severely.
ERLINDA R. TAROG v. ATTY. ROMULO L. RICAFORT
A.C. No. 8253 (Formerly CBD Case No. 03-1067), 15 March 2011,
EN BANC
(Per Curiam)The Tarogs engaged the services of Atty. Ricafort as their attorney on accountregarding
their bank-foreclosed property located in the Bicol Region. Atty. Ricafort required the Tarogs to pay
P7,000.00 as filingfee, which they gave to him. He explained the importance of depositing P65,000.00 in
court to counter theP60,000.00 deposited by Antonio Tee, the buyer of the foreclosed property. After
some time, the Tarogs visited Atty. Ricafort to verify the status of the consignation. Atty.Ricafort
informed them that he had not deposited the amount (in check) in court, but in his own account.He
promised to return the money, plus interest. Despite several inquiries about when the amount would
bereturned, however, the Tarogs received mere assurances from Atty. Ricafort that the money was in
goodhands.The Tarogs furthered delivered P15,000.00 to Atty. Ricafort for making a memorandum, but
he didnot file the memorandum. When it became apparent to the Tarogs that Atty. Ricafort would not
make goodhis promise of returning the P65,000.00, plus interest, Arnulfo demanded by his letter dated
December 3,2002 that Atty. Ricafort return the P65,000.00, plus interest, and the P15,000.00 paid for
the filing of thememorandum. Yet, they did not receive any reply from Atty. Ricafort.In his defense, Atty.
Ricafort denied that the P65,000.00 was intended to be deposited in court,insisting that the amount was
payment for his legal services under a "package deal.” Findings of the IBPCommissioner:

Atty. Romulo L. Ricafort be DISBARRED and be ordered to return the amount of P65,000and P15,000
which he got from his client.

Commissioner Reyes concluded that Atty. Ricafort violated Canon15, and Rules 16.01, 16.02 and 16.03
of Canon 16 of the
Code of Professional Responsibility
by takingadvantage of the vulnerability of his clients and by being dishonest in his dealings with them by
refusing toreturn the amount of P65,000.00 to them.

Page| 21
Legal Ethics Case DigestJudge Philip Aguinaldo3AA, A.Y. 2011-2012
The IBP Board of Governors adopted the Resolution resolving to return the matter to
CommissionerReyes for a clarification of whether or not there was evidence to support the claim that
the P65,000.00 had been in payment of attorney's fees and other expenses. Commissioner Reyes issued
a second Report andRecommendation, in which he declared that Atty. Ricafort did not present any
retainer agreement or receiptto prove that the amount of P65,000.00 had been part of his attorney's
fees; that Atty. Ricafort had willfully ignored the demand of Arnulfo by not replying to the demand
letter; that, instead, Atty. Ricafort hadinsisted that the househelp who had received the demand letter
had not given it to him; and that in his(Commissioner Reyes) presence, Atty. Ricafort had also promised
to the complainant that he would settlehis liability, but Atty. Ricafort did not make good his promise
despite several resettings to allow him to settlehis obligation.The IBP Board of Governors adopted and
approved the Report and Recommendation of Commissioner Reyes and recommended the disbarment
of Atty. Ricafort and the order for him to return theamounts of P65,000.00 and P15,000.00 to
Erlinda. Atty. Ricafort moved for reconsideration, maintaining that a retainer agreement was
immaterial because he had affirmed having received the P65,000.00 and having issued a receipt for the
amount; that hehad not kept the receipt because "the practice of lawyers in most instances is that
receipt is issued withoutduplicate as it behooves upon the client to demand for a receipt” and
considering that the Tarogs hadproduced a photocopy of the receipt he had issued for the P30,000.00 in
connection with their appeal, itfollowed that a similar receipt for attorney's fees had been made at the
time when the case had been about to be filed in the RTC. Acting on Atty. Ricafort's
motion for reconsideration
, the IBP Board of Governors downgraded thepenalty from disbarment to indefinite suspension. Atty.
Ricafort filed a second
motion for reconsideration,
assailing the resolution of the IBP Board of Governors for violating Section 12, Rule 139-B of the
Rules of Court
requiring the decision of the IBP Board of Governors to be in writing and to clearly and distinctly state
the facts and reasons on which the decision was based. Hence, the administrative case is now beforethe
Court for resolution.
ISSUE:
Whether or not Atty. Ricafort may be disbarred based on the grounds mentioned
HELD:
SC affirmed the findings of the Commissioner Reyes, because they were supported by
substantialevidence. However, SC imposed the penalty of disbarment instead of the recommended
penalty of indefinitesuspension considering that Atty. Ricafort committed a very serious offense that
was aggravated by hishaving been previously administratively sanctioned for a similar offense on the
occasion of which he was warned against committing a similar offense.Rule 16.01 of the
Code of Professional Responsibility
states thatRule 16.01 - A lawyer shall account for all money or property collected or received for or from
theclient. Atty. Ricafort explained that he had no copies of the receipts for the P65,000.00 and
P15,000.00issued to the Tarogs because "the practice of lawyers in most instances is that receipt is
issued withoutduplicate as it behooves upon the client to demand for a receipt." But such explanation
does not persuadethe Court. Ethical and practical considerations made it both natural and imperative
for him to issue receipts,even if not demanded, and to keep copies of the receipts for his own records.
He was all too aware that he was accountable for the moneys entrusted to him by the clients, and that
his only means of ensuringaccountability was by
issuing
and
keeping
receipts. Atty. Ricafort's acts and actuations constituted serious breach of his fiduciary duties as an
attorney.Undoubtedly, Atty. Ricafort was required to hold in trust any money and property of his clients
that cameinto his possession, and he needed to be always mindful of the trust and confidence his clients
reposed inhim.Thus, having obtained the funds from the Tarogs in the course of his professional
employment, he hadthe obligation to deliver such funds to his clients (
a
) when they became due, or (
b
) upon demand.

Page| 22
Legal Ethics Case DigestJudge Philip Aguinaldo3AA, A.Y. 2011-2012
Furthermore, Rule 16.02 of the
Code of Professional Responsibility,
imposes on an attorney thepositive obligation to keep all funds of his client separate and apart from his
own and from those of otherskept by him, to wit:Rule 16.02 - A lawyer shall keep the funds of each
client separate and apart from his ownand those of others kept by him
.
Atty. Ricafort's plain abuse of the confidence reposed in him by his clients rendered him liable
for violation of Canon 16, particularly Rule 16.01,
supra
, and Canon 17, all of the
Code of Professional Responsibility
.Canon 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of thetrust and
confidence reposed in him.His acts and actuations constituted a gross violation of general morality and
of professional ethicsthat impaired public confidence in the legal profession and deserved punishment.

91 JUNIO v GRUPO
FACTS:

Rosario Junio engaged the services of Atty. Salvador Grupo for the redemption of a land belonging to
herparents. She gave P25,000 to be used in the redemption, yet Atty. Grupo did not redeem the
property and hascontinuously refused to refund the money given.

Junio filed a complaint for disbarment for malpractice and gross misconduct

Attu. Grupo contends that the land could really not be redeemed anymore, and that since Junio
knewthat the mortgage has already expired, she knew that it was just a last ditch effort to redeem the
property. Atty.Grupo then borrowed some of the money for himself to help defray his children’s
educational expenses. (personalrequest evidenced by a PN executed in favor of Junio – Atty. Grupo
contends that their families were really veryclose and intimate with each other – Junio’s sisters were
maids of Atty. Grupo…)

Atty. Grupo claims that there was no atty-client relationship and further contends that he did not ask
forany fee, not even charity. He claims that his services were just acts of a friend for a friend. (he claims
that he iswilling to pay, though)

IBP found that Atty Grupo violated a rule forbidding lawyers from borrowing money from their
clientsunless the client’s interests are protected by the nature of the case or by independent advice and
suspended him
indefinitely.

what he violated was the rule that a lawyer is bound to observe candor, fairness and loyalty in all
hisdealing and transactions with his client. And that Atty Grupo did Not violate Rule 16 because Junio
consented toand ratified to the use of the money, as evidenced by the PN. The court is constrained to
give credence to Atty.Grupo’s claims that the money previously entrusted to him was later converted
into a loanISSUE: WoN Atty. Grupo violated Rule 16?HELD: YESRATIO:
What he violated was the rule that a lawyer is bound to observe candor, fairness and loyalty in all
hisdealing and transactions with his client. ( he did not give security for the loan and he refused to pay
theamount)And that Atty Grupo did not violate Rule 16 because Junio consented to and ratified to the
use of themoney, as evidenced by the PN. The court is constrained to give credence to Atty. Grupo’s
claims that the moneypreviously entrusted to him was later converted into a loan

But in the dispositive portion, sabi he violated… so ayun.

As to the contention that no atty- client relationship exists: it is not necessary that any retainer
shouldhave been paid. All is needed is when a person consults with his atty in his professional capacity
to obtainprofessional advice.

Atty Grupo is suspended from practice of law for 1 month and to refund the money

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

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

Held:
Yes. If a person, in respect to his business affairs, consults with an attorney in his professional capacity
and the attorney voluntarily permits in such consultation, then the professional employment must be
regarded as established.
Having gained dominance over Junio by virtue of such long relation of master and servant, Grupo took
advantage of his influence by not returning the money. Grupo has committed an act which falls short of
the standard conduct of an attorney. If an ordinary borrower of money is required by law to repay his
loan, it is more so in the case of a lawyer whose conduct serves as an example.
*SC orders Grupo suspended from the practice of law for a month and to pay Junio within 30 days with
interest at the legal rate.
* Note: 5 yrs. has already passed since the loan.
Canon 17
Yao vs. AurelioA.C. No. 7023 March 30, 2006Facts:
Bun Siong Yao is a majority stockholder of Solar Farms & Livelihood Corporationand Solar Textile
Finishing Corporation and since 1987, he retained the services of another stockholder, Atty. Leonardo
Aurelio, as his personal lawyer and also the brother-in-law of Yao’s wife. In 1999, they had a
disagreement. Aurelio then filed cases against Yao and hiswife. Yao alleged that the series of suits filed
against him and his wife constitute an abuse of the confidential information which Aurelio obtained by
virtue of his employment as counsel. Aurelio, on the other hand, claimed that he filed those which he
obtained by virtue of hisbeing a stockholder of Solar Textile Finishing Corporation.The investigating
commissioner found that Yao discontinued paying dividends to Aurelio which compelled the latter to file
multiple criminal and civil cases in the exercise of his rights as a stockholder. He recommended that
Aurelio be suspended from practice of law. The IBP approved and adopted the said recommendation.
Issue:
Whether or not Aurelio violated Canon 17 of the Code of Professional Responsibility.
Held:
Yes, Atty. Leonardo Aurelio is ordered suspended from the practice of law for aperiod of six months. He
took advantage of his being a lawyer in order to get back at Yaoand in doing so, he has inevitably utilized
information he has obtained from his dealings withYao and his companies for his own end.It is essential
to note that the relationship between an attorney and his client is afiduciary one. Canon 17 of the Code
of Professional Responsibility provides that “a lawyer owes fidelity to the cause of his client and shall be
mindful of the trust and confidencereposed on him.” An attorney is not permitted to disclose
communications made to him in hisprofessional character by a client, unless the latter consents. It is to
preserve theconfidences and secrets of a client arise at the inception of their relationship. It does
notcease with the termination of the litigation, nor is it affected by the party's ceasing to employthe
attorney and retaining another, or by any other change of relation between them. It evensurvives the
death of the client.
CARLITO P. CARANDANG,
Complainant,vs.
ATTY. GILBERT S. OBMINA,
Respondent. This is a complaint filed by Carlito P. Carandang against Atty. Gilbert S. Obmina. Atty.
Obminawas counsel for Carandang in an Ejectment case he filed. Carandang brought suit for
Atty.Obmina’s failure to inform Carandang of the adverse decision in said case and for failure toappeal
the decision. The Commission on Bar Discipline, issued an Order directing respondentAtty. Gilbert S.
Obmina to submit his Answer. However, what the Commission received was aManifestation by a certain
Atty. Ma. Carmencita C. Obmina-Muaña, allegedly daughter of respondent. She further alleged that her
father is already a permanent resident of the UnitedStates of America since March 2001 and had already
retired from the practice of law.

On the scheduled Mandatory Conference, Commission directed Atty. Muaña to produce andpresent
before the Court the alleged withdrawal of appearance filed by her father and proof that her father is
now really a permanent resident of the United States of America.Issue:Whether or not Atty. Obmina is
liable for failure serve his client with competence and diligenceas pursuant to Canon 18 of the Code of
Professional Ethics and to inform his client as to thestus of his case pursuant to Rule 18.03 of Canon
18.Ruling: There is nothing on record that will show that Atty. Obmina notified complainant in
anymanner about the decision. Blame should not be attributed solely to the respondent becauseit was
observed that complainant is partly to blame for his loss for failure to maintain contactwith Atty.
Obmina. The Supreme Court held that "
clients should maintain contact with their counsel from time to time and inform themselves of the
progress of their case, thereby exercising that standard of care which an ordinary prudent man bestows
upon his business
(Leonardo vs. S.T. Best, Inc.,). Nonetheless, the Court underscored the duty of respondent tonotify his
client as to what happened to his case.However, the respondent who has in his possession the complete
files and address of thecomplainant, should have exerted more efforts to notify Mr. Carandang as to
what happenedto his case. Whether the decision is adverse to or in favor of his client, respondent is
dutybound to notify the clients pursuant to Canon 18 of the Code of Professional Ethics. That as aresult
of the respondent’s failure to notify the complainant, the latter lost the case leading tohis eviction. The
Court ordered that Atty. Gilbert S. Obmina be suspended from the practice of law for aperiod of one (1)
year. Although the said respondent is reportedly in the United States of America and accordingly retired
from the practice of law, the Commission resolved not toclose its eyes on the negligence that
respondent has committed while in the active practice.