FRIAS vs. ATTY.

BAUTISTA-LOZADA

A.C. No. 6656, December 13, 2005

Facts:

Complainant Bobie Rose Frias alleged that respondent became her retained

counsel and legal adviser in the early part of 1990. She entrusted to respondent

documents and titles of properties in November of that year. Sometime in December

1990, respondent persuaded complainant to sell her house located at 589 Batangas

East, Ayala Alabang Village, Muntinlupa City. Respondent allegedly acted as broker as

she was in need of money.

On December 7, 1990 respondent hastily arranged a meeting with her and a

prospective buyer, Dra. Flora San Diego, in Valenzuela, Manila. She was allegedly

made to sign a Memorandum of Agreement (MOA) without her having read it because

"they had to reach the bank before it closed at 3:00 p.m." When they arrived at the

Security Bank branch in Valenzuela, San Diego handed respondent P2M in cash and

P1M in check, instead of P3M in cash as the down payment indicated in the MOA. Out

of the P2M in cash, respondent took P1M as her commission without complainant's

consent. When the complainant protested, respondent promised to sign a promissory

note later. The P1M check was later on dishonored by the bank because it was a stale

check. San Diego eventually backed out from the sale. However, she converted the

aborted sale into a mortgage loan at 36% p.a. interest, as provided for in the MOA.

Since the transaction between her and San Diego did not materialize, complainant

allegedly tried to recover from respondent the title to the property and other

documents. Respondent, however, started avoiding her. She recovered the documents
placed inside an envelope only on May 6, 1991. On the same day, however, the

envelope was allegedly stolen from her Pajero.

ISSUE:

Whether or not the respondent is guilty of dishonesty and malpractice.

RULING:

YES. Canon 15.03 of the Code of Professional Responsibility provides, 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. He may not also undertake to discharge conflicting

duties any more than he may represent antagonistic interests. This stern rule is

founded on the principles of public policy and good taste. It springs from the relation

of attorney and client which is one of trust and confidence. The test of conflict of

interest 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 its performance. The conflict exists 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 represented him and

also whether he will be called upon in his new relation to use against the first client

any knowledge acquired through their connection.

In this case, respondent not only admitted that she represented both complainant

and San Diego in unrelated actions but also counseled both of them in the sale of the

Alabang property. As their lawyer, she was duty-bound to protect both of their
interests. She should have therefore refrained from jumbling their affairs. Yet she

introduced the complainant to another client of hers as a buyer of the property. She

even had the temerity to broker the transaction. At that early stage, she should have

realized that her role as their lawyer had been seriously compromised. Since buyer and

seller had evident antagonistic interests, she could not give both of them sound legal

advice. On top of this, respondent's obvious tendency then was to help the

complainant get a high selling price since the amount of her commission was

dependent on it.

Likewise, her act of borrowing money from a client was a violation of Canon

16.04 of the Code of Professional Responsibility: A lawyer shall not borrow money

from his client unless the client's interests are fully protected by the nature of the case

and by independent advice. A lawyer's act of asking a client for a loan, as what

respondent did, is very unethical. It comes within those acts considered as abuse of

client's confidence. The canon presumes that the client is disadvantaged by the

lawyer's ability to use all the legal maneuverings to renege on her obligation.

Finally, respondent should be reminded that a lawyer should, at all times, comply

with what the court lawfully requires. Here, respondent continues to disregard the

final order of the Court of Appeals finding her liable for the P900,000 she received

from complainant. We see no justification for her continued delay in complying with

an order that has long become final. Respondent adamantly insists that she and

complainant should simultaneously settle their obligations. As a lawyer, she should

have known that her obligation to the complainant was independent of and separate

from the complainant's obligation to the buyer. Her refusal to comply with the
appellate court's order is, therefore, a willful disobedience to its lawful orders and

must not be left unpunished.