Professional Documents
Culture Documents
of Corporate Lawyers
1
CPR provisions
2
Corporate counsel and possibility
of COI
Members of the Board of Directors
Employees of the corporation
General public
Counsel’s private interest
3
Duty of attorney to a
corporate client
“[a]n attorney for a corporate client owes his duty [of loyalty] to
the corporate entity rather than a particular officer, director, or
shareholder.” - ABC Trans Natl Transport, Inc. v. Aeronautics
Forwarders, Inc, 413 NE.2d 1299, 1310 1980
“[t]he attorney for a corporation, even a closely held one, does not
have a specific fiduciary duty toward the individual
shareholders.” - Kopka v. Kamensky and Rubenstein, 821 NE.2d
719, 727 (2004)
4
He should resolve all doubts against the
propriety of the representation. – Cannon v. U.S.
Acoustics Corp. 398 F.Supp. 209 (1975)
5
Palm v. Atty. Iledan, Jr.
A.C. No. 8242 [2009]
Complainant is the President of Comtech, a corporation engaged in the
business of computer software development.
6
On 24 March 2004, Comtech’s new counsel sent a demand letter
to Soledad [a former officer and director of Comtech, who
resigned and who was suspected of releasing unauthorized
disbursements of corporate funds] to return or account for the
amount of P90,466.10 representing her unauthorized
disbursements when she was the Corporate Treasurer of
Comtech.
8
Respondent admitted that during the months of September and
October 2003, complainant met with him regarding the
procedure in amending the corporate by-laws to allow board
members outside the Philippines to participate in board
meetings.
9
In addition, although the information about the necessity to
amend the corporate by-laws may have been given to respondent,
it could not be considered a confidential information.
10
It is settled that the mere relation of attorney and client does not
raise a presumption of confidentiality. The client must intend the
communication to be confidential. 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. Thus, the disclosure made by respondent
during the stockholders’ meeting could not be considered a
violation of his client’s secrets and confidence within the
contemplation of Canon 21 of the Code of Professional
Responsibility.
11
We find no conflict of interest when respondent represented
Soledad in a case filed by Comtech. The case where respondent
represents Soledad is an Estafa case filed by Comtech against its
former officer. There was nothing in the records that would
show that respondent used against Comtech any confidential
information acquired while he was still Comtech’s retained
counsel.
The intent of the law is to impose upon the lawyer the duty to
protect the client’s interests only on matters that he previously
handled for the former client and not for matters that arose
after the lawyer-client relationship has terminated.
12
Santos Ventura Hocorma Foundation, Inc. v.
Atty. Funk, A.C. No. 9094 August 15, 2012
It alleged that Atty. Funk used to work as corporate secretary,
counsel, chief executive officer, and trustee of the Santos Ventura
Hocorma foundation from 1983 to 1985. He also served as its
counsel in several criminal and civil cases.
13
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, the Mabalacat Institute, without the
foundation's written consent.
14
An attorney 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. This rule is so absolute that good faith
and honest intention on the erring lawyer's part
does not make it inoperative.
16
Respondent entered his appearance as counsel for the PPSTA
Board members in the said cases.
17
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.
18
What is a “derivative suit”?
19
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.
20
Corporation cannot “consent” to a
representation of a lawyer with COI
The cases and ethics opinions differ on whether there must be
separate representation from the outset or merely from the time
the corporation seeks to take an active role. Furthermore, this
restriction on dual representation should not be waivable by
consent in the usual way; the corporation should be
presumptively incapable of giving valid consent.
21
Quiambao v. Atty. Nestor Bamba
A. C. No. 6708 August 25, 2005
Complainant Felicitas S. Quiambao charges respondent Atty.
Nestor A. Bamba with violation of the Code of Professional
Responsibility for representing conflicting interests when the
latter filed a case against her while he was at that time
representing her in another case, and for committing other acts
of disloyalty and double-dealing.
22
About six months after she resigned as AIB president, or on 14
June 2001, the respondent filed on behalf of AIB a complaint for
replevin and damages against her before the MeTC of Quezon
City for the purpose of recovering from her the car of AIB
assigned to her as a service vehicle. This he did without
withdrawing as counsel of record in the ejectment case, which
was then still pending.
23
While the respondent may assert that the complainant expressly
consented to his continued representation in the ejectment case,
the respondent failed to show that he fully disclosed the facts
to both his clients and he failed to present any written consent
of the complainant and AIB as required under Rule 15.03, Canon
15 of the Code of Professional Responsibility.
24
Extent or degree of prohibition on
representing COI
It must be noted 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.
25
Business transactions between an attorney and his client are
disfavored and discouraged by the policy of the law.
26
De Guzman v. Atty. L. De Dios,
A.C. No. 4943 January 26, 2001
In 1995, complainant engaged the services of respondent as
counsel in order to form a corporation.
On January 10, 1996, with the assistance of Atty. De Dios,
complainant registered Suzuki Beach Hotel, Inc. (SBHI) with the
Securities and Exchange Commission.
On December 15, 1997, the corporation required complainant to
pay her unpaid subscribed shares of stock amounting to two
million two hundred and thirty five thousand pesos
(P2,235,000.00) or 22,350 shares, on or before December 30,
1997.
Complainant soon learned that her shares had been acquired by
Ramon del Rosario, one of the incorporators of SBHI. The sale
ousted complainant from the corporation completely. While
respondent rose to be president of the corporation,
complainant lost all her life's savings invested therein.
27
Complainant alleged that she relied on the advice of Atty.
de Dios and believed that as the majority stockholder, Atty.
de Dios would help her with the management of the
corporation.
29
Thank you for your attention!!
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