I.

Conflict of Interest of Corporate Lawyers

a. Rule 15.03
b. Derivative Suit
i. Hornilla VS Salunat
Doctrine: 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
(in this case a member because PPSTA is non-stock) 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.

ii. Hocorma Foundation VS Funk

Doctrine: Canon 15, Rule 15.03 of the CPR provides that a lawyer cannot
represent conflicting interests except by written consent of all concerned
given after a full disclosure of the facts. Here, it is undeniable that Atty.
Funk was formerly the legal counsel of Hocorma Foundation. Years after
terminating his relationship with the foundation, he filed a complaint
against it on behalf of another client, without the foundation’s written
consent.

iii. Pacana VS Pascual Lopez

Doctrine: This prohibition is founded on principles of public policy, good
taste and, more importantly, upon necessity. In the course of a lawyer-
client relationship, the lawyer learns all the facts connected with the
client’s case, including its weak and strong points. Such knowledge must
be considered sacred and guarded with care.

iv. Palm VS Iledan

Doctrine: It is settled that the mere relation of attorney and client does not
raise a presumption of confidentiality.11 The client must intend the
communication to be confidential.12 Since the proposed amendments
must be approved by at least a majority of the stockholders, and copies of
the amended by-laws must be filed with the SEC, the information could
not have been intended to be confidential.