A.C. No. 4103 September 7, 1995 membership Mr. Paulino Salvador. . . .
membership Mr. Paulino Salvador. . . ." He further claims that the complainants filed this
VERONICA S. SANTIAGO, et. al, complainants,
v.
ATTY. AMADO R. FOJAS, respondent.
In their letter of 8 September 1993, the complainants, former clients of the respondent,
pray that the latter be disbarred for "malpractice, neglect and other offenses which may be
discovered during the actual investigation of this complaint." They attached thereto an
Affidavit of Merit wherein they specifically allege:
1. That we are Defendants-Appellates [sic] in the Court of Appeals Case No. CA-G.N.
CV No. 38153 of which to our surprise lost unnecessarily the aforesaid Petition
[sic]. A close perusal of the case reveals the serious misconduct of our attorney on
record, Atty. Amado Fojas tantamount to malpractice and negligence in the
performance of his duty obligation to us, to defend us in the aforesaid case. That
the said attorney without informing us the reason why and riding high on the trust
and confidence we repose on him either abandoned, failed to act accordingly, or
seriously neglected to answer the civil complaint against us in the sala of Judge
Teresita Capulong Case No. 3526-V-91 Val. Metro Manila so that we were deduced
[sic] in default.
1 In his resolution of 22 November 1990, Med-Arbiter Tomas Falconitin declared illegal
2. That under false pretenses Atty. Fojas assured us that everything was in order.
That he had already answered the complaint so that in spite of the incessant
demand for him to give us a copy he continued to deny same to us. Only to disclose
later that he never answered it after all because according to him he was a very
busy man. Please refer to Court of Appeals decision dated August 17, 1993.
3. That because of Atty. Amado Foja's neglect and malpractice of law we lost the
Judge Capulong case and our appeal to the Court of Appeals. So that it is only
proper that Atty. Fojas be disciplined and disbarred in the practice of his
profession.
In his Comment, the respondent admits his "mistake" in failing to file the complainants'
answer in Civil Case No. 3526-V-91, but he alleges that it was cured by his filing of a motion
for reconsideration, which was unfortunately denied by the court. He asserts that Civil Case
No. 3526-V-91 was a "losing cause" for the complainants because it was based on the
expulsion of the plaintiff therein from the Far Eastern University Faculty Association
(FEUFA) which was declared unlawful in the final decision in NCR-OD-M-90-10-050. Thus,
"[t]he unfavorable judgment in the Regional Trial Court is not imputable to [his] mistake
but rather imputable to the merits of the case, i.e., the decision in the Expulsion case
wherein defendants (complainants herein) illegally removed from the union (FEUFA)
case to harass him because he refused to share his attorney's fees in the main labor case
he had handled for them. The respondent then prays for the dismissal of this complaint for
utter lack of merit, since his failure to file the answer was cured and, even granting for the
sake of argument that such failure amounted to negligence, it cannot warrant his
disbarment or suspension from the practice of the law profession.
The complainants filed a Reply to the respondent's Comment.
Issues having been joined, we required the parties to inform us whether they were willing
to submit this case for decision on the basis of the pleadings they have filed. In their
separate compliance, both manifested in the affirmative.
The facts in this case are not disputed.
Complainants Veronica Santiago, Benjamin Hontiveros, Ma. Socorro Manas, and Trinidad
Nordista were the President, Vice-President, Treasurer, and Auditor, respectively, of the
FEUFA. They allegedly expelled from the union Paulino Salvador. The latter then
commenced with the Department of Labor and Employment (DOLE) a complaint (NCR-OD-
M-90-10-050) to declare illegal his expulsion from the union.
Salvador's expulsion and directed the union and all its officers to reinstate Salvador's name
in the roll of union members with all the rights and privileges appurtenant thereto. This
resolution was affirmed in toto by the Secretary of Labor and Employment.
Subsequently, Paulino Salvador filed with the Regional Trial Court (RTC) of Valenzuela,
Metro Manila, Branch 172, a complaint against the complainants herein for actual, moral,
and exemplary damages and attorney's fees, under Articles 19, 20, and 21 of the Civil Code.
The case was docketed as Civil Case No. 3526-V-91.
As the complainants' counsel, the respondent filed a motion to dismiss the said case on
grounds of (1) res judicata by virtue of the final decision of the Med-Arbiter in NCR-OD-M-
90-10-050 and (2) lack of jurisdiction, since what was involved was an intra-union issue
cognizable by the DOLE. Later, he filed a supplemental motion to dismiss.
The trial court, per Judge Teresita Dizon-Capulong, granted the motion and ordered the
dismissal of the case. Upon Salvador's motion for reconsideration, however, it reconsidered
the order of dismissal, reinstated the case, and required the complainants herein to file
their answer within a nonextendible period of fifteen days from notice.
Instead of filing an answer, the respondent filed a motion for reconsideration and dismissal
of the case. This motion having been denied, the respondent filed with this Court a petition
for certiorari, which was later referred to the Court of Appeals and docketed therein as CA-
G.R. SP No. 25834.
Although that petition and his subsequent motion for reconsideration were both denied,
the respondent still did not file the complainants' answer in Civil Case No. 3526-V-91.
Hence, upon plaintiff Salvador's motion, the complainants were declared in default, and
Salvador was authorized to present his evidence ex-parte.
The respondent then filed a motion to set aside the order of default and to stop the ex-
parte reception of evidence before the Clerk of Court, but to no avail.
Thereafter, the trial court rendered a decision ordering the complainants herein to pay,
jointly and severally, plaintiff Salvador the amounts of P200,000.00 as moral damages;
P50,000.00 as exemplary damages or corrective damages; and P65,000.00 as attorney's
fees; plus cost of suit.
The complainants, still assisted by the respondent, elevated the case to the Court of
Appeals, which, however, affirmed in toto the decision of the trial court.
The respondent asserts that he was about to appeal the said decision to this Court, but his
services as counsel for the complainants and for the union were illegally and unilaterally
terminated by complainant Veronica Santiago.
The core issue that presents itself is whether the respondent committed culpable
negligence, as would warrant disciplinary action, in failing to file for the complainants an
answer in Civil Case No. 3526-V-91 for which reason the latter were declared in default and
judgment was rendered against them on the basis of the plaintiff's evidence, which was
received ex-parte.
It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person
who may wish to become his client. He has the right to decline employment,1 subject,
however, to Canon 14 of the Code of Professional Responsibility. Once he agrees to take up
the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of
the trust and confidence reposed in him.2 He must serve the client with competence and
diligence,3 and champion the latter's cause with wholehearted fidelity, care, and
devotion.4 Elsewise stated, he owes entire devotion to the interest of the client, warm zeal
in the maintenance and defense of his client's rights, and the exertion of his utmost learning
and ability to the end that nothing be taken or withheld from his client, save by the rules of
law, legally applied.5 This simply means that his client is entitled to the benefit of any and
every remedy and defense that is authorized by the law of the land and he may expect his
lawyer to assert every such remedy or defense.6 If much is demanded from an attorney, it
is because the entrusted privilege to practice law carries with it the correlative duties not
only to the client but also to the court, to the bar, and to the public. A lawyer who performs
his duty with diligence and candor not only protects the interest of his client; he also serves
the ends of justice, does honor to the bar, and helps maintain the respect of the community
to the legal profession. 7
The respondent admits that it was his duty to file an answer in Civil Case No. 3526-V-91. He
justifies his failure to do so in this wise:
[I]n his overzealousness to question the Denial Order of the trial court, 8 [he] instead, thru
honest mistake and excusable neglect, filed a PETITION FOR CERTIORARI with the
Honorable Court, docketed as G.R. No. 100983.
And, when the Court of Appeals, to which G.R. No. 100983 was referred, dismissed the
petition, he again "inadvertently" failed to file an answer "[d]ue to honest mistake and
because of his overzealousness as stated earlier.
In their Reply, the complainants allege that his failure to file an answer was not an honest
mistake but was "deliberate, malicious and calculated to place them on the legal
disadvantage, to their damage and prejudice" for, as admitted by him in his motion to set
aside the order of default, his failure to do so was "due to volume and pressure of legal
work."9 In short, the complainants want to impress upon this Court that the respondent
has given inconsistent reasons to justify his failure to file an answer.
We agree with the complainants. In his motion for reconsideration of the default order, the
respondent explained his non-filing of the required answer by impliedly invoking
forgetfulness occasioned by a large volume and pressure of legal work, while in his
Comment in this case he attributes it to honest mistake and excusable neglect due to his
overzealousness to question the denial order of the trial court.
Certainly, "overzealousness" on the one hand and "volume and pressure of legal work" on
the other are two distinct and separate causes or grounds. The first presupposes the
respondent's full and continuing awareness of his duty to file an answer which,
nevertheless, he subordinated to his conviction that the trial court had committed a
reversible error or grave abuse of discretion in issuing an order reconsidering its previous
order of dismissal of Salvador's complaint and in denying the motion to reconsider the said
order. The second ground is purely based on forgetfulness because of his other
commitments.
Whether it be the first or the second ground, the fact remains that the respondent did not
comply with his duty to file an answer in Civil Case No. 3526-V-91. His lack of diligence was
compounded by his erroneous belief that the trial court committed such error or grave We do not therefore hesitate to rule that the respondent is not free from any blame for the
abuse of discretion and by his continued refusal to file an answer even after he received sad fate of the complainants. He is liable for inexcusable negligence.
the Court of Appeals' decision in the certiorari case. There is no showing whatsoever that
he further assailed the said decision before this Court in a petition for review under Rule 45 WHEREFORE, ATTY. AMADO R. FOJAS is hereby REPRIMANDED and ADMONISHED to be,
of the Rules of Court to prove his claim of overzealousness to challenge the trial court's henceforth, more careful in the performance of his duty to his clients.
order. Neither was it shown that he alleged in his motion to lift the order of default that
the complainants had a meritorious defense. 10 And, in his appeal from the judgment by SO ORDERED.
default, he did not even raise as one of the errors of the trial court either the impropriety
of the order of default or the court's grave abuse of discretion in denying his motion to lift
that order.

Pressure and large volume of legal work provide no excuse for the respondent's inability to
exercise due diligence in the performance of his duty to file an answer. Every case a lawyer
accepts deserves his full attention, diligence, skill, and competence, regardless of its
importance and whether he accepts it for a fee or for free.

All told, the respondent committed a breach of Canon 18 of the Code of Professional
Responsibility which requires him to serve his clients, the complainants herein, with
diligence and, more specifically, Rule 18.03 thereof which provides: "A lawyer shall not
neglect a legal matter entrusted to him, and his negligence in connection therewith shall
render him liable."

The respondent's negligence is not excused by his claim that Civil Case No. 3526-V-91 was
in fact a "losing cause" for the complainants since the claims therein for damages were
based on the final decision of the Med-Arbiter declaring the complainants' act of expelling
Salvador from the union to be illegal. This claim is a mere afterthought which hardly
persuades us. If indeed the respondent was so convinced of the futility of any defense
therein, he should have seasonably informed the complainants thereof. Rule 15.05, Canon
15 of the Code of Professional Responsibility expressly provides:

A lawyer, when advising his client, shall give a candid and honest opinion on the merits and
probable results of the client's case, neither overstating nor understanding the prospects
of the case.

Then too, if he were unconvinced of any defense, we are unable to understand why he took
all the trouble of filing a motion to dismiss on the grounds of res judicata and lack of
jurisdiction and of questioning the adverse ruling thereon initially with this Court and then
with the Court of Appeals, unless, of course, he meant all of these to simply delay the
disposition of the civil case. Finally, the complainants were not entirely without any valid or
justifiable defense. They could prove that the plaintiff was not entitled to all the damages
sought by him or that if he were so, they could ask for a reduction of the amounts thereof.
A.C. No. 4763 March 20, 2003
DR. GIL Y. GAMILLA, et. al, complainants,
v.
ATTY. EDUARDO J. MARIÑO JR., respondent.
THIS DISBARMENT CASE EMANATED from an intra-union leadership dispute some
seventeen (17) years ago that spilled over to the instant complaint alleging impropriety and
double-dealing in the disbursement of sums of money entrusted by the University of Sto.
Tomas to respondent Atty. Eduardo J. Mariño Jr. as president of the UST Faculty Union and
his core of officers and directors for distribution among faculty members of the university.1
For a sense of history, sometime in 1986 respondent Atty. Mariño Jr. as president of the
UST Faculty Union and other union officers entered into a collective bargaining agreement
with the management of UST for the provision of economic benefits amounting to P35
million. Instead of creating a harmonious relationship between the contracting parties, the
collective bargaining agreement regrettably engendered disputes arising from the
interpretation and implementation thereof one of which even reached this Court.2
The 1986 collective bargaining agreement expired in 1988 but efforts to forge a new one
unfortunately failed. In 1989 the faculty members of UST went on strike and as a counter-
measure UST terminated the employment of sixteen (16) officers and directors of the UST
Faculty Union including respondent. The dismissal precipitated anew bitter legal battles
which were resolved by this Court in favor of the dismissed employees by ordering their
reinstatement with back wages.3
In 1990 Secretary of Labor Ruben D. Torres prescribed the terms and conditions of a five
(5)-year collective bargaining agreement between UST and the UST Faculty Union
retroactive to 1988 when the 1986 collective bargaining agreement expired. In the same
year, the administration of UST and the UST Faculty Union also entered into a compromise
agreement for the payment of P7,000,000.00 from which P5,000,000.00 was intended to
settle the back wages and other claims of the sixteen (16) union officers and directors of
the UST Faculty Union, including herein respondent, who were earlier ordered reinstated
by this Court, and the sum of P2,000,000.00 to satisfy the remaining obligations of UST
under the 1986 collective bargaining agreement. It appears from the record that only
P5,000,000.00 for the back wages and other claims of respondent Atty. Mariño and other
concerned union officers and directors was paid immediately by UST while the satisfaction
of the balance of P2,000,000.00 was apparently deferred to some unspecified time.
In 1992 UST and the UST Faculty Union executed a memorandum of agreement to settle
the salary increases and other benefits under the collective bargaining agreement effective
1988 for the period 1 June 1991 to 31 May 1993 for a total of P42,000,000.00. It was agreed
that the benefits accruing from 1 June 1991 to 31 October 1992 were to be taken from the
sum of P42,000,000.00 which UST would release directly to the faculty members, while the
remainder of the P42,000,000.00 package would be ceded by UST to the UST Faculty Union
which would then disburse the balance to cover the benefits from 1 November 1992 to 31
May 1993. The memorandum of agreement also charged the amount of P2,000,000.00
agreed upon in the 1990 compromise agreement as well as the attorney's fees of Atty.
Mariño worth P4,200,000.00 against the P42,000,000.00 outlay.
In accordance with the memorandum of agreement, UST took care of the disbursement of
P20,226,221.60 from the total commitment of P42,000,000.00 to pay for the following
expenses: (a) P2,000,000.00 as payment for unpaid obligations to faculty members under
the 1986 collective bargaining agreement; (b) P13,833,597.96 for the salary increases of
faculty members from 1 June 1991 to 31 October 1992; (c) P192,623.64 for telephone,
electricity and water billings; and, (d) P4,200,000.00 paid to the UST Faculty Union as
attorney's fees. The expenses left a collectible sum of P21,773,778.40 from the obligation
of P42,000,000.00. The university however relinquished only P18,038,939.37 to the UST
Faculty Union which was P3,734,839.03 short of the balance of P21,773,778.40. In the
meantime, the UST Faculty Union placed P9,766,570.01 of the amount received from UST
in the money market to earn as it did make P1,146,381.27 in interest.
For benefits corresponding to 1 November 1992 to 31 May 1993, the UST Faculty Union
charged against the short-changed amount of P18,038,939.37 a total of P16,723,638.27
consisting of the following expenses: (a) P10,521,800.64 as the amount paid for salary
increases beginning 1 November 1992 to 31 May 1993; (b) P578,296.31 which was
refunded to the faculty members whose salaries were reduced as a result of their
participation in the 1989 strike; (c) P2,045,192.97 as amount paid to the faculty members
representing their December 1992 bonus; and, (d) P3,578,348.35 for reimbursements to
the University of Santo Tomas. The expenses left a balance of P5,050,140.13, i.e., the
remainder of P1,315,301.10 out of the P18,038,939.37 earlier turned over by UST to the
UST Faculty Union, plus the deficit amount of P3,734,839.03 which UST later turned over
to the UST Faculty Union after previously failing to deliver the amount. To the sum of
P5,050,140.13, the UST Faculty Union added the interest earnings of P1,146,381.27 from
money market investments as well as the amount of P192,632.64 representing the
disallowed amount of expenses earlier deducted by UST from the P42,000,000.00 package.
All in all, the money left in the possession of the UST Faculty Union was P6,389,154.04 which
it distributed among the faculty members in 1994.
Complainants as members of the UST Faculty Union questioned the alleged lack of
transparency among the officers and directors of the union in the management and
disbursement of the monetary benefits for the faculty members. They initiated two (2)
complaints with the Office of the Regional Director, National Capital Region, Department
of Labor and Employment, one on 18 October 1995, docketed as Case No. NCR-OD-M-9412-
022, and another, on 16 November 1996, docketed as Case No. NCR-OD-M-9510-028. In
both pleadings, they prayed for the expulsion of the officers and directors of the union led
by respondent Atty. Mariño because of their alleged failure to account for the balance of
the P42,000,000.00 ceded to them by UST and the attorney's fees amounting to
P4,200,000.00 which they deducted from the benefits allotted to faculty members.4
On 2 July 1997 complainants filed the instant complaint for disbarment against Atty. Mariño
accusing him of (a) compromising their entitlements under the 1986 collective bargaining
agreement without the knowledge, consent or ratification of the union members, and
worse, for only P2,000,000.00 when they could have received more than P9,000,000.00; (b)
failing to account for the P7,000,000.00 received by him and other officers and directors in
the UST Faculty Union under the 1990 compromise agreement; (c) lack of transparency in
the administration and distribution of the remaining balance of the P42,000,000.00
package under the 1992 memorandum of agreement; (d) refusal to remit and account for
the P4,200,000.00 in favor of the faculty members although the amount was denominated
as attorney's fees. Complainants asserted that respondent violated Rules 1.015 and 1.026
of Canon 1; Rule 15.087 of Canon 15; Rules 16.01,8 16.029 and 16.0310 of Canon 16; and
Rule 20.0411 of Canon 20, of the Code of Professional Responsibility.
On 4 November 1997, after several extensions Atty. Mariño filed his comment on the
complaint. He alleged that the issues raised therein were the same issues involved in the
two (2) complaints before the Bureau of Labor Relations and therefore constituted forum-
shopping, and further explained that he had adequately accounted for the disbursement of
the money demanded by complainants.
On 18 March 1998 we referred the disbarment complaint and the comment thereon to the
Integrated Bar of the Philippines for investigation, report and recommendation within
ninety (90) days from notice thereof.
On 18 May 1999 we received the Report of IBP Commissioner Lydia A. Navarro as well as
the Resolution of 30 March 1999 of the IBP Board of Governors adopting and approving the
Report which found the complaint meritorious and suspended respondent Atty. Mariño
from the practice of law "until such time that the required detailed accounting of the
questioned remittances made by UST to the UST [Faculty Union] during his incumbency as
President and Legal Counsel has been officially submitted and reported to the UST [Faculty
Union] and to the IBP."
On 7 September 1999 respondent filed his comment on the IBP Report and Resolution and
alleged the same contentions he previously asserted. On 27 October 1999 we referred the
case back to the IBP for a more detailed investigation and submission of report and
recommendation within sixty (60) days from notice.
In the meantime, or on 27 May 1999, the Regional Director found merit in the two (2)
complaints docketed as Case No. NCR-OD-M-9412-022 and Case No. NCR-OD-M-9510-028
and ordered the expulsion of respondent and the other officers and directors of the union
led by respondent Atty. Mariño because of their failure to account for the balance of the
P42,000,000.00 that had been delivered to them by the management of UST, and their
collection of exorbitant and illegal attorney's fees amounting to P4,200,000.00.12
On 9 March 2000 the Bureau of Labor Relations in the appeal docketed as BLR-A-TR-52-25-
10-99 set aside the Order of the Regional Director. It found that the balance of the
P42,000,000.00 which UST delivered to the UST Faculty Union had been fully and
adequately accounted for by respondent and the other officers and directors of the
union.13 Nonetheless, the Bureau of Labor Relations ordered respondent and the other
officers and directors of the union to distribute the attorney's fees of P4,200,000.00 among
the faculty members and to immediately hold the elections for union officers and directors
in view of the expiration of their respective terms of office.
On 16 March 2001 the Decision of the Bureau of Labor Relations was affirmed in toto by
the Court of Appeals in CA-G.R. SP No. 60657.14 The Decision of the Court of Appeals was
elevated to this Court, docketed G.R. No. 149763, where the case is allegedly still pending
resolution.
On 25 September 2002 we received the detailed Report and Recommendation of IBP
Commissioner Lydia A. Navarro and the IBP Resolution of 3 August 2002 of the Board of
Governors adopting and approving the Report which recommended the lifting of Atty.
Mariño's suspension from law practice since he had sufficiently accounted for the funds in
question.
For a start, it appears that complainants did not file a petition with this Court to review the
IBP Resolution exonerating respondent from the accusations against him and lifting his
suspension from the practice of law, an action otherwise required under Sec. 12, Rule 139-
B of the Rules of Court if the case against respondent could still proceed in this Court.
Nevertheless since the IBP Resolution is merely recommendatory, and considering further
the instructional value of this case to members of the Bench, many of whom are engaged
simultaneously in other businesses or professions, we find it prudent and judicious to
decide the instant case once and for all.
In fine, there are ethical lapses on the part of respondent Atty. Eduardo J. Mariño Jr. in the
manner by which he secured the P7,000,000.00 by virtue of the compromise agreement
and the P4,200,000.00 attorney's fees under the memorandum of agreement. Although the
record shows that the Bureau of Labor Relations found respondent as having adequately
accounted for the disbursement of the funds which the UST Faculty Union received through
the series of agreements with the management of UST, this Court believes that Atty. Mariño
failed to avoid conflict of interests, first, when he negotiated for the compromise
agreement wherein he played the diverse roles of union president, union attorney and
interested party being one of the dismissed employees seeking his own restitution, and
thereafter, when he obtained the attorney's fees of P4,200,000.00 without full prior
disclosure of the circumstances justifying such claim to the members of the UST Faculty
Union.
As one of the sixteen (16) union officers and directors seeking compensation from the
University of Santo Tomas for their illegal dismissal, respondent was involved in obvious
conflict of interests when in addition he chose to act as concurrent lawyer and president of
the UST Faculty Union in forging the compromise agreement. The test of conflict of interest
among lawyers 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."15 In the same manner, it
is undoubtedly a conflict of interests for an attorney to put himself in a position where self-
interest tempts, or worse, actually impels him to do less than his best for his client.
Thus it has been held that an attorney or any other person occupying fiduciary relations
respecting property or persons is utterly disabled from acquiring for his own benefit the
property committed to his custody for management.16 This rule is entirely independent of
whether fraud has intervened as in fact no fraud need be shown; no excuse will be heard
from an attorney because the rule stands on the moral obligation to refrain from placing
oneself in positions that ordinarily excite conflict between self-interest and integrity.
Necessarily, a lawyer cannot continue representing a client in an action or any proceeding
against a party even with the client's consent after the lawyer brings suit in his own behalf
against the same defendant if it is uncertain whether the defendant will be able to satisfy
both judgments.17 No doubt, a lawyer is not authorized to have financial stakes in the
subject matter of the suit brought in behalf of his client.18
In the instant case, quite apart from the issue of validity of the 1990 compromise
agreement, this Court finds fault in respondent's omission of that basic sense of fidelity to
steer clear of situations that put his loyalty and devotion to his client, the faculty members
of UST, open to question. Atty. Mariño both as lawyer and president of the union was duty
bound to protect and advance the interest of union members and the bargaining unit above
his own. This obligation was jeopardized when his personal interest as one of the dismissed
employees of UST complicated the negotiation process and eventually resulted in the
lopsided compromise agreement that rightly or wrongly brought money to him and the
other dismissed union officers and directors, seemingly or otherwise at the expense of the
faculty members.
The facts would affirm this observation. In brokering the compromise agreement,
respondent received P5,000,000.00 as compensation for the dismissed union officials while
only P2,000,000.00 apparently settled UST's obligations in favor of the faculty members
under the 1986 collective bargaining agreement when their original claim amounted to at
least P9,000,000.00. Worse, the P2,000,000.00 concession for accountabilities demandable
long ago in 1986 was paid only in 1992 under the memorandum of agreement, or a period
of more than two (2) years after the execution of the compromise agreement, in contrast
to the immediate payment of the P5,000,000.00 to Atty. Mariño and the other union
officers and directors.
Respondent Atty. Mariño ought to have disclosed to the members of the UST Faculty Union,
if not the entire bargaining unit of faculty members, his interest in the compromise
agreement as one of the dismissed union officers seeking compensation for the claim of
back wages and other forms of damages, and also the reasons for reducing the claim of the
faculty members from more than P9,000,000.00 to only P2,000,000.00. As the record
shows, the explanations for respondent's actions were disclosed only years after the
consummation of the compromise agreement, particularly only after the instant complaint
for disbarment was filed against him, when the accounting should have been forthcoming
either before or during the settlement of the labor case against the management of UST.
Equally important, since respondent and the other union officers and directors were to get
for themselves a lion's share of the compromise as they ultimately did, Atty. Mariño should
have unambiguously divulged and made clear to his client the compelling probability of
conflict of interests. He should have voluntarily turned over the reins of legal representation
to another lawyer who could have acted on the matter with a deep sense of impartiality
over the several claims against UST and an unfettered commitment to the cause of the
faculty members.
Furthermore, there was lack of notice and transparency in respondent's dual role as lawyer
and president of the UST Faculty Union when he obtained P4,200,000.00 as attorney's fees.
Without ruling on the validity of the collection of attorney's fees so as not to pre-empt the
decision in G.R. No. 149763 on this issue, the record does not show any justification for
such huge amount of compensation nor any clear differentiation between his legal services
and his tasks as union president comprising in all probability the same duties for which he
had collected a hefty compensation as attorney for the union.
The situation of Atty. Mariño is not any different from that of an executor or administrator
of an estate who may not charge against the estate any professional fee for legal services
rendered by him because his efforts as such are already paid for in his capacity as executor
or administrator.19 Indeed, he could have avoided complaints and perceptions of self-
enrichment arising from the levy of attorney's fees by spelling out the terms and bases for
the claim of P4,200,000.00 since the compensation for his services as president of the union
should have otherwise covered his legal services as well.
Regardless of the motivations of respondent in perfecting the compromise agreement or
demanding the inexplicable attorney's fees, his actions were not transparent enough to
allow the bargaining unit ample information to decide freely and intelligently. Clearly, he
violated Canon 15 of the Code of Professional Responsibility requiring every lawyer to
"observe candor, fairness and loyalty in all his dealings and transactions with his clients."
Lawyers are vanguards in the bastion of justice so they are without doubt expected to have
a bigger dose of service-oriented conscience and a little less of self-interest.
As indispensable part of the system of administering justice, attorneys must comply strictly
with the oath of office and the canons of professional ethics - a duty more than imperative
during these critical times when strong and disturbing criticisms are hurled at the practice
of law. The process of imbibing ethical standards can begin with the simple act of openness
and candor in dealing with clients, which would progress thereafter towards the ideal that
a lawyer's vocation is not synonymous with an ordinary business proposition but a serious
matter of public interest.
retribution is our goal in this type of proceedings. In view of this, instead of taking a more
stern measure against respondent, a reprimand and a warning would be sufficient
disciplinary action in accordance with our ruling in Sumangil v. Sta. Romana.21 Hence, Atty.
Mariño is admonished to refrain from all appearances and acts of impropriety including
circumstances indicating conflict of interests, and to behave at all times with
circumspection and dedication befitting a member of the Bar, especially observing candor,
fairness and loyalty in all transactions with his client.22
WHEREFORE, respondent Atty. Eduardo J. Mariño Jr. is REPRIMANDED for his misconduct
with a warning that a more drastic punishment will be imposed on him upon a repetition
of the same act.
SO ORDERED.

The evidence on record proves that Atty. Mariño failed to disclose at crucial moments
significant information about the manner by which he secured the P7,000,000.00 by virtue
of the compromise agreement and the P4,200,000.00 attorney's fees under the
memorandum of agreement. A simple accounting of the money that he and others
concerned received from UST, as well as an explanation on the details of the agreements,
would have enlightened the faculty members about the probability of conflict of interests
on respondent's part and guided them to look for alternative actions to protect their own
interests.

In light of the irrefragable fact of respondent's misdemeanor, a possible mitigation of his

actionable conduct was that the attorney's fees and the compromise agreement were
negotiated and finalized under the most strenuous circumstances where his leadership and
that of his core officers and directors were incessantly challenged by complainants allegedly
aided by factions within UST itself. He might also have believed that the settlement
achieved immense benefits for his constituents which would not have been otherwise
obtained if he had chosen to relinquish the rein of legal representation to some other
lawyer. Finally, it was not improbable for him to suppose though wrongly that he could
represent and in some manner serve the interests of all of them, including his own, by
pushing for and seeking the approval of the agreements himself. 20

We reiterate that the objective of a disciplinary case is not so much to punish the individual
attorney as to protect the dispensation of justice by sheltering the judiciary and the public
from the misconduct or inefficiency of officers of the court. Restorative justice not
A.C. No. 4346. April 3, 2002
ERLINDA ABRAGAN, et al., complainants,
v. Atty. MAXIMO G. RODRIGUEZ, respondent.
Lawyers violate their oath of office when they represent conflicting interests. They taint not
only their own professional practice, but the entire legal profession itself.
The Case and the Facts
Before us is a verified Petition[1] praying for the disbarment of Atty. Maximo G. Rodriguez
because of alleged illegal and unethical acts. The Petition relevantly reads as follows:
2. That sometime in 1986, the petitioners hired the services of the respondent and the
latter, represented the former in the case entitled PABLO SALOMON et al vs. RICARDO
DACALUZ et al., before the Municipal Trial Court in Cities, Cagayan de Oro City, Branch 3
docketed as Civil Case No. 11204, for Forcible Entry with Petition for a Writ of Preliminary
Injunction and Damages, [and] a Certified True and Correct Copy of the COMPLAINT by
Clerk of Court III Gerardo B. Ucat of the said Court, is herewith attached to the original of
this PETITION, while photocopies of the same are also attached to the duplicate copies of
this same Petition and marked as Annex A hereof;
3. That after the Case No. 11204 was finally won, and a Writ of Execution was issued by the
Honorable Municipal Trial Court in Cities of Cagayan de Oro City, Branch 3, the same
respondent lawyer represented the petitioners herein;
4. That when respondent counsel disturbed the association (Cagayan de Oro Landless
Residents Association, Inc.), to which all the complainants belong, by surreptitiously selling
some rights to other persons without the consent of the petitioners herein, they decided
to sever their client-lawyer relationship;
5. That in fact, the National Bureau of Investigation of Cagayan de Oro City, is presently
undertaking an investigation on the illegal activities of Atty. Maximo Rodriguez pertaining
to his express involvement in the illegal and unauthorized apportionment, assignment and
sale of parcels of land subject to the Case No. 11204, where he represented the poor
landless claimants of Cagayan de Oro City, which include your petitioners in this case;
6. That petitioners herein later filed an indirect contempt charge under Civil Case No. 11204
against Sheriff Fernando Loncion et al., on August 2, 1991 engaging the services of Atty.
LORETO O. SALVA, SR., an alleged former student of law of Atty. Maximo Rodriguez, [and
a] certified true and correct copy of the complaint thereat consisting of four (4) pages is
herewith attached and photocopies of which are also attached to the duplicates hereof,
and correspondingly marked as their Annex B;
7. That respondent lawyer, Atty. Maximo Rodriguez, (in the Indirect Contempt Case under
the same Civil Case No. 11204,) REPRESENTED and actively took up the defense of
FERNANDO LONCION et al. much to the dismay, damage and prejudice of the herein
petitioners, [and] a copy of Atty. Rodriguezs Answer, which is also certified true and correct
by Clerk of Court III Gerardo Ucat of Branch 3 of MTCC Cagayan de Oro City, consisting of
three (3) pages, is attached to the original of this Petition, while photocopies of the same
are attached to the other copies hereof and accordingly marked as Annex C;
8. That the records will bear the petitioners out that their counsel, Atty. SALVA SR. later on
withdrew the case of Indirect Contempt upon the suggestion of Atty. Maximo Rodriguez;
and instead, filed the Motion for the Issuance of an Alias Writ of Execution;
9. That on January 12, 1993, the herein respondent, without consulting the herein
Petitioners who are all poor and ignorant of court procedures and the law, filed in behalf of
the plaintiffs (which include the herein Petitioners) in Civil Case No. 11204, a Motion to
Withdraw Plaintiffs Exhibits, [and] a certified true and correct copy of said Motion by Mr.
Gerardo Ucat of MTCC Branch 3, Cagayan de Oro City is herewith attached to the original
of this Petition, while photocopies of the same are also attached to the rest of the copies
of this same Petition, and are correspondingly marked as their Annex D.
10. That the illegal and unethical actions of Atty. Maximo Rodriguez are most obnoxious,
condemnable, and highly immoral, to say the least, more so if we consider his social
standing and ascendancy in the community of Cagayan de Oro City;
11. That the records of Civil Case No. 11204 which are voluminous will bear the petitioners
allegations against the herein respondent, who, after representing them initially, then
transferring allegiance and services to the adverse parties (Lonchion, Palacio and NHA
Manager), came back to represent the herein petitioners without any regard [for] the rules
of law and the Canons of Professional Ethics, which is highly contemptible and a clear
violation of his oath as a lawyer and an officer of the courts of law;
12. That these acts are only those that records will bear, because outside of the court
records, respondent, without regard [for] delicadeza, fair play and the rule of law, has
assigned, apportioned and sold parcels of land[,] subject matter in Civil Case No. 11204
which legally have been pronounced and decided to be in the possession of the plaintiffs in
Civil Case No. 11204, who are partly the petitioners herein. Thus, they cannot yet enjoy the
fruits of the tedious and protracted legal battle because of respondents illegal acts, which
have instilled fear among the plaintiffs and the petitioners herein;
13. That respondent lawyer even represented ERLINDA ABRAGAN, one of the herein
petitioners, in a later proceedings in Civil Case No. 11204 wherein the apportionment of
parcels of land was erroneously, unprocedurally and illegally submitted to a commissioner,
and that ERLINDA ABRAGAN, after winning in the said Civil Case was later on dispossessed
of her rights by respondent counsels maneuver, after the decision (in Civil Case No. 11208)
became final executory;
14. That to make matters worse, respondent Atty. Rodriguez eventually fenced an area
consisting of about 10, 200 square meters within Lot No. 1982[,] the subject matter in Civil
Case No. 11204 without the consent of the herein petitioners. He even openly and publicly
proclaimed his possession and ownership thereof, which fact is again and also under NBI
investigation;
15. That all the foregoing acts of respondent lawyer plus his continuing and ongoing illegal
and unethical maneuvers have deprived the herein petitioners of their vested rights to
possess and eventually own the land they have for decades possessed, and declared as such
by final judgment in Civil Case No. 11204.
In his Comment,[2] respondent flatly denied the accusations of petitioners. He explained
that the withdrawal of the exhibits, having been approved by the trial court, was not illegal,
obnoxious, undesirable and highly immoral. He added that he took over the 8,000 square
meters of land only after it had been given to him as attorneys fees. In his words:
14. Respondent ADMITS that he fenced an area of about 8,000 sq. [m]. after the association
had awarded the same as attorneys fees in Civil Case Number 11204, the dismissal of the
appeal by the NHA, the successful handling of three (3) cases in the SUPREME COURT, the
pending case of QUIETING OF TITLE filed by the NHA, and for the pending reconveyance
case, Civil Case No. 93-573, supra. These area of 8,000 sq. [m]., was awarded as attorneys
fees, which [were] supposed to be ten percent of the 22 hectares, Lot No. 1982, the subject
matter of Civil Case No. 11204, but the association and its members were able to take actual
possession by judgment of the courts only o[f] the twelve (12) hectares. [This] area
consisting of 8,000 sq. [m]., and consisting of two (2) lots [was] fenced by the respondent
to prevent squatters from entering the area. The rights of possession and ownership o[f]
this area by the respondent depends upon the outcome of Civil Case No. 93-573, supra, for
reconveyance of title by the association and its members versus the NHA, et. al. If it is true
that this is under investigation by the NBI, then why, not wait and submit the investigation
of the NHA, instead of filing this unwarranted, false and fabricated charge based on
preposterous and ridiculous charges without any proof whatsoever, except the vile
[language] of an irresponsible lawyer.[3]
Thereafter, petitioners filed a Reply[4] in which they reiterated their allegations against
respondent and added that the latter likewise violated Rule 15.03 of the Code of
Professional Responsibility. The Court referred the case to the Integrated Bar of the
Philippines (IBP) for investigation, report and/or decision.[5]
Report of the Investigating Commissioner
In her Report and Recommendation dated January 23, 2001, Investigating IBP
Commissioner Lydia A. Navarro recommended that respondent be suspended from the
practice of law for six (6) months for violation of Rule 15.03 of Canon 15 of the Code of
Professional Responsibility. Her report reads in part as follows:
From the facts obtaining, it is apparent that respondent represented conflicting interest
considering that the complainants were the same plaintiffs in both cases and were duly
specified in the pleadings particularly in the caption of the cases. Under the said
predicament even if complainants were excluded as members of the Association
represented by the respondent; the latter should have first secured complainants written
consent before representing defendants in the Indirect Contempt case particularly Macario
Palacio, president of the Association, or inhibited himself.
It is very unfortunate that in his desire to render service to his client, respondent overlooked
the fact that he already violated Rule 15.03 of [C]anon 15 of the Code of Professional
Responsibility, to wit:
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.
We have no alternative but to abide by the rules.[6]
IBP Board of Governors Resolution
Upholding the above-quoted Report, the Board of Governors of the Integrated Bar of the
Philippines recommended via its May 26, 2001 Resolution that respondent be suspended
from the practice of law for two (2) months for violation of Rule 15.03 of Canon 15 of the
Code of Professional Responsibility.
This Courts Ruling
We agree with the findings and the recommendation of the IBP Board of Governors, but
hold that the penalty should be six-month suspension as recommended by the investigating
commissioner.
Administrative Liability of Respondent
At the outset, we agree with Commissioner Navarros conclusion that apart from their
allegations in their various pleadings, petitioners did not proffer any proof tending to show
that respondent had sold to other persons several rights over the land in question; and that
he had induced the former counsel for petitioners, Atty. Salva Jr., to withdraw the indirect
contempt case that they had filed. Neither did the IBP find anything wrong as regards the
8,000 square meters awarded to respondent as payment for his legal services. Petitioners
bare assertions, without any proof to back them up, would not justify the imposition of a
penalty on respondent.
Having said that, we find, however, that respondent falls short of the integrity and good
moral character required from all lawyers. They are expected to uphold the dignity of the
legal profession at all times. The trust and confidence clients repose in them require a high
standard and appreciation of the latters duty to the former, the legal profession, the courts
and the public. Indeed, the bar must maintain a high standard of legal proficiency as well
as of honesty and fair dealings. To this end, lawyers should refrain from doing anything that
might tend to lessen the confidence of the public in the fidelity, honesty and integrity of
their profession.[7]
In the present case, respondent clearly violated Rule 15.03 of Canon 15 of the Code of
Professional Responsibility, which provides that a lawyer shall not represent conflicting
interests except by written consent of all concerned given after full disclosure of the facts.
The Court explained in Buted v. Hernando:[8]
[A] lawyer represents conflicting interests when, in behalf of one client, it is his duty to
contend for that which duty to another client requires him to oppose.
The obligation to represent the client with undivided fidelity and not to divulge his secrets
or confidence forbids also the subsequent acceptance of retainers or employment from
others in matters adversely affecting any interest of the client with respect to which
confidence has been reposed.[9] (Italics in the original)
In the case at bar, petitioners were the same complainants in the indirect contempt case
and in the Complaint for forcible entry in Civil Case No. 11204.[10] Respondent should have
evaluated the situation first before agreeing to be counsel for the defendants in the indirect
contempt proceedings. Attorneys owe undivided allegiance to their clients, and should at
all times weigh their actions, especially in their dealings with the latter and the public at
large. They must conduct themselves beyond reproach at all times.
The Court will not tolerate any departure from the straight and narrow path demanded by
the ethics of the legal profession.
In Hilado v. David,[11] which we quote below, the Court advised lawyers to be like Caesars
wife to be pure and to appear to be so.
This stern rule is designed not alone to prevent the dishonest practitioner from fraudulent
conduct, but as well as to protect the honest lawyer from unfounded suspicion of
unprofessional practice. It is founded on principles of public policy, on good taste. As has
been said in another case, the question is not necessarily one of the rights of the parties,
but as to whether the attorney has adhered to proper professional standard. With these
thoughts in mind, it behooves attorneys, like Caesars wife, not only to keep inviolate the
clients confidence, but also to avoid the appearance of treachery and double-dealing. Only
thus can litigants be encouraged to entrust their secrets to their attorneys which is of
paramount importance in the administration of justice.
Because of his divided allegiance, respondent has eroded, rather than enhanced, the public
perception of the legal profession. His divided loyalty constitutes malpractice for which he
may be suspended, following Section 27, Rule 138 of the Rules of Court, which provides:
SEC. 27. Disbarment or suspension of Attorneys by Supreme Court, grounds therefor. Any
member of the bar may be disbarred or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly
immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for
any violation of the oath which he is required to take before admission to practice, or for a
wilful disobedience appearing as an attorney for a party to a case without authority so to
do. x x x.
Complainants ask that respondent be disbarred. We find however that suspension of six (6)
months from the practice of law, as recommended by Commissioner Navarro, is sufficient
to discipline respondent.
A survey of cases involving conflicting interests on the part of counsel reveals that the Court
has imposed on erring attorneys[12] either a reprimand, or a suspension from the practice
of law from five (5) months[13] to as high as two (2) years.[14]
WHEREFORE, Maximo G. Rodriguez is found guilty of violating Rule 15.03 of Canon 15 of
the Code of Professional Responsibility and is hereby SUSPENDED for six (6) months from
the practice of law, effective upon his receipt of this Decision. He is warned that a repetition
of the same or similar acts will be dealt with more severely.
Let copies of this Decision be entered in the record of respondent as attorney and served
on the IBP, as well as on the Court Administrator who shall circulate it to all courts for their
information and guidance.
SO ORDERED.
A.C. No. 2597 March 12, 1998
GLORITO V. MATURAN, petitioner,
vs.
ATTY. CONRADO S. GONZALES, respondent.
A complaint for disbarment was filed with this Court on October 25, 1983, by Glorito V.
Maturan against his counsel, Atty. Conrado S. Gonzales, charging him with immoral,
unethical, and anomalous acts. The respondent filed his comment thereto on February 6,
1984. On November 11, 1997, or after thirteen (13) years, the Board of Governors of the
Integrated Bar of the Philippines submitted their report and recommendation on the
instant case.
The facts, as culled from the records, are as follows:
Spouses Antonio and Gloria Casquejo instituted their son-in-law, Glorito V. Maturan (herein
petitioner), as their attorney-in-fact, through a Special Power of Attorney (SPA) dated
November 6, 1981. Said SPA authorized Maturan to file ejectment cases against squatters
occupying Lot 1350-A, Psd-50375, located in General Santos City, as well as criminal cases
against the latter for violation of P.D. 772, again in connection with said lot. Respondent,
Atty. Conrado Gonzales, prepared and notarized said Special Power of Attorney.
Subsequently, Glorito Maturan engaged the services of respondent in ejecting several
squatters occupying Lot 1350-A, Psd-50735. While said lot was registered in the name of
Celestino Yokingco, Antonio Casquejo had, however, instituted a case for reconveyance of
property and declaration of nullity against the former, docketed as Civil Case No. 2067.
As a consequence of his engagement by petitioner, respondent Gonzales filed Civil Case No.
1783-11 for Forcible Entry and Damages against several individuals. On February 18, 1983,
a judgment was rendered in favor of petitioner. Petitioner, through respondent, filed a
motion for issuance of a writ of execution on March 10, 1983.
In the interim, the parties to Civil Case No. 2067 entered into a compromise agreement,
which was judicially approved in a judgment dated March 28, 1983.
On June 22, 1983, while the motion for issuance of a writ of execution was pending, and
without withdrawing as counsel for petitioner, respondent filed, on behalf of Celestino
Yokingco, et al., Civil Case No. 2746, an action to annul the judgment rendered in Civil Case
No. 2067. The action was predicated on the lack of authority on the part of petitioner to
represent Antonio and Gloria Casquejo, as no such authorization was shown to be on record
in Civil Case No. 2067. On August 24, 1983, respondent, on behalf of Celestino Yokingco, et
al., also filed Special Civil Case No. 161 for injunction with a prayer for preliminary
injunction, with damages, against petitioner.
Aggrieved by respondent's acceptance of professional employment from their adversary in
Civil Case No. 2067, and alleging that privileged matters relating to the land in question had
been transmitted by petitioner to respondent in Civil Case 1783-11, petitioner filed an
administrative complaint against the former for immoral, unethical, and anomalous acts
and asked for his disbarment.
Respondent, in a comment dated January 25, 1984, denied having committed any
malicious, unethical, unbecoming, immoral, or anomalous act against his client.
Respondent declared that he was of the belief that filing a motion for issuance of a writ of
execution was the last and final act in the lawyer-client relationship between himself and
petitioner, and that his formal withdrawal as counsel for the Casquejos was unnecessary in
order to sever the lawyer-client relationship between them. Furthermore, he alleged that
his acceptance of employment from Yokingco was for him, an opportunity to honestly earn
a little more for his children's sustenance.
The investigating commissioner of the Integrated Bar of the Philippines, in his report dated
August 21, 1997, found respondent guilty of representing conflicting interests and
recommended that he be suspended for three (3) years. The Board of Governors of the IBP
adopted and approved the report and recommendation of the investigating commissioner
but recommended that the suspension be reduced from three (3) years to one (1) year.
This Court adopts the findings of the investigating commissioner finding respondent guilty
of representing conflicting interests. It is improper for a lawyer to appear as counsel for one
party against the adverse party who is his client in a related suit, as a lawyer is prohibited
from representing conflicting interests or discharging inconsistent duties. He 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.1 That the representation of conflicting
interest is in good faith and with honest intention on the part of the lawyer does not make
the prohibition inoperative.
The reason for the prohibition is found in the relation of attorney and client, which is one
of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts
connected with his client's case. He learns from his client the weak points of the action as
well as the strong ones. Such knowledge must be considered sacred and guarded with care.
No opportunity must be given him to take advantage of the client's secrets. A lawyer must
have the fullest confidence of his client. For if the confidence is abused, the profession will
suffer by the loss thereof.2
This Court finds respondent's actuations violative of Canon 6 of the Canons of Professional
Ethics which provide in part:

It is unprofessional to represent conflicting interests, except by express consent of all

concerned given after a full disclosure of the facts. Within the meaning of this canon, a
lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend
for that which duty to another client requires him to oppose.

Moreover, respondent's justification for his actions reveal a patent ignorance of the
fiduciary obligations which a lawyer owes to his client. A lawyer-client relationship is not
terminated by the filing of a motion for a writ of execution. His acceptance of a case implies
that he will prosecute the case to its conclusion. He may not be permitted to unilaterally
terminate the same to the prejudice of his client.

As to the recommendation that the term of suspension be reduced from three years to one
year, we find the same to be unwarranted. In similar cases decided by the Supreme Court,
the penalty of two or three years suspension has been imposed where respondent was
found guilty of representing conflicting interests. In Vda. De Alisbo vs. Jalandoon, Sr.,3 the
respondent, who appeared for complainant in a case for revival of judgment, even though
he had been the counsel of the adverse party in the case sought to be revived, was
suspended for a period of two years. In Bautista vs. Barrios,4 a suspension of two years was
imposed on respondent Barrios, who had drafted a deed of partition for petitioner, but who
appeared for the other party therein, when the same was sought to be enforced by
petitioner. In PNB vs. Cedo,5 the Court even suspended the respondent therein for three
years, but only because respondent not only represented conflicting interests, but also
deliberately intended to attract clients with interests adverse to his former employer.
Finally, in Natan vs. Capule,6 respondent was suspended for two years after he accepted
professional employment in the very case in which his former client was the adverse party.

ACCORDINGLY, this Court resolves to MODIFY the IBP recommendation to suspend

respondent for one year and modifies it to SUSPENSION from the practice of law for TWO
(2) YEARS, effective immediately.

SO ORDERED.
A.C. No. 5128 March 31, 2005
ELESIO C. PORMENTO, SR., Complainant,
vs.
ATTY. ALIAS A. PONTEVEDRA, respondent.
In a verified Complaint2 dated August 7, 1999, Elesio C. Pormento, Sr. charged Atty. Elias A.
Pontevedra with malpractice and misconduct, praying that on the basis of the facts alleged
therein, respondent be disbarred.
Complainant alleges that between 1964 and 1994, respondent is his family's legal counsel
having represented him and members of his family in all legal proceedings in which they
are involved. Complainant also claims that his family's relationship with respondent extends
beyond mere lawyer-client relations as they gave respondent moral, spiritual, physical and
financial support in his different endeavors.3
Based on the allegations in the complaint, the rift between complainant and respondent
began when complainant's counterclaim in Civil Case No. 1648 filed with the Regional Trial
Court of Bacolod City was dismissed. Complainant claims that respondent, who was his
lawyer in the said case, deliberately failed to inform him of the dismissal of his counterclaim
despite receipt of the order of dismissal by the trial court, as a result of which, complainant
was deprived of his right to appeal said order. Complainant asserts that he only came to
know of the existence of the trial court's order when the adverse party in the said case
extrajudicially foreclosed the mortgage executed over the parcel of land which is the
subject matter of the suit. In order to recover his ownership over the said parcel of land,
complainant was constrained to hire a new lawyer as Atty. Pontevedra refused to institute
an action for the recovery of the subject property.4
Complainant also claims that in order to further protect his rights and interests over the
said parcel of land, he was forced to initiate a criminal case for qualified theft against the
relatives of the alleged new owner of the said land. Respondent is the counsel of the
accused in said case. Complainant claims that as part of his defense in said criminal case,
respondent utilized pieces of confidential information he obtained from complainant while
the latter is still his client.5
In a separate incident, complainant claims that in 1967, he bought a parcel of land located
at Escalante, Negros Occidental. The Deed of Declaration of Heirship and Sale of said land
was prepared and notarized by respondent. Since there was another person who claims
ownership of the property, complainant alleges that he heeded respondent's advice to
build a small house on the property and to allow his (complainant's) nephew and his family
to occupy the house in order for complainant to establish his possession of the said
property. Subsequently, complainant's nephew refused to vacate the property prompting
the former to file an ejectment case with the Municipal Trial Court of Escalante, Negros
Occidental, docketed as Civil Case No. 528. Respondent acted as the counsel of
complainant's nephew.6
Complainant contends that respondent is guilty of malpractice and misconduct by
representing clients with conflicting interests and should be disbarred by reason thereof.7
In his Comment,8 respondent contends that he was never a direct recipient of any
monetary support coming from the complainant. Respondent denies complainant's
allegation that he (respondent) did not inform complainant of the trial court's order
dismissing the latter's counterclaim in Civil Case No. 1648. Respondent claims that within
two days upon his receipt of the trial court's order of dismissal, he delivered to complainant
a copy of the said order, apprising him of its contents. As to his representation of the
persons against whom complainant filed criminal cases for theft,9 respondent argues that
he honestly believes that there exists no conflict between his present and former clients'
interests as the cases he handled for these clients are separate and distinct from each other.
He further contends that he took up the cause of the accused in the criminal cases filed by
complainant for humanitarian considerations since said accused are poor and needy and
because there is a dearth of lawyers in their community. With respect to the case for
ejectment filed by complainant against his nephew, respondent admits that it was he who
notarized the deed of sale of the parcel of land sold to complainant. However, he contends
that what is being contested in the said case is not the ownership of the subject land but
the ownership of the house built on the said land.10
On December 21, 1999, complainant filed a Reply to respondent's Comment.11
On January 19, 2000, the Court referred the instant case to the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation.12
On February 18, 2002, respondent filed a Rejoinder to complainant's Reply adding that the
instant complaint was orchestrated by complainant's son who wanted political vengeance
because he lost the vice-mayoralty post to respondent during the 1988 local elections.13
On February 20, 2002, complainant filed a Sur-Rejoinder to respondent's Rejoinder.14
Thereafter, the parties filed their respective Position Papers,15 after which the case was
deemed submitted for resolution.
In his Report and Recommendation dated February 20, 2004, Investigating Commissioner
Agustinus V. Gonzaga found respondent guilty of violating Rule 15.03, Canon 15 of the Code
of Professional Responsibility. He recommended that respondent be meted the penalty of
suspension for one month.

In a minute Resolution passed on July 30, 2004, the IBP Board of Governors resolved to
annul and set aside the recommendation of the Investigating Commissioner and instead
approved the dismissal of the complaint for lack of merit, to wit:
RESOLUTION NO. XVI-2004-387
Adm. Case No. 5128
Elesio C. Pormento, Sr., vs. Atty. Elias A. Pontevedra
RESOLVED to ANNUL and SET ASIDED [sic], as it is hereby ANNULED and SET ASIDE, the
Recommendation of the Investigating Commission, and to APPROVE the DISMISSAL of the
above-entitled case for lack of merit of the complaint.
We do not agree with the dismissal of the complaint.
At the outset, we reiterate the settled rule that in complaints for disbarment, a formal
investigation is a mandatory requirement which may not be dispensed with except for valid
and compelling reasons.16 Formal investigations entail notice and hearing. However, the
requirements of notice and hearing in administrative cases do not necessarily connote full
adversarial proceedings, as actual adversarial proceedings become necessary only for
clarification or when there is a need to propound searching questions to witnesses who
give vague testimonies.17 Due process is fulfilled when the parties were given reasonable
opportunity to be heard and to submit evidence in support of their arguments.18
From the records extant in the present case, it appears that the Investigating Commissioner
conducted a hearing on January 16, 2002 where it was agreed that the complainant and the
respondent shall file their respective position papers, after which the case shall be deemed
submitted for resolution.19 No further hearings were conducted.
It is also disturbing to note that the abovementioned Resolution of the IBP Board of
Governors, annulling and setting aside the recommendation of the Investigating
Commissioner, is bereft of any findings of facts or explanation as to how and why it resolved
to set aside the recommendation of the Investigating Commissioner and instead dismissed
the complaint against respondent.
Section 12(a), Rule 139-B of the Rules of Court provides:
SEC. 12. Review and decision by the Board of Governors. –
(a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors
upon the record and evidence transmitted to it by the Investigator with his report. The
decision of the Board upon such review shall be in writing and shall clearly and distinctly
state the facts and the reasons on which it is based. It shall be promulgated within a period
not exceeding thirty (30) days from the next meeting of the Board following the submittal
of the Investigator's report. (Emphasis supplied)
In Cruz vs. Cabrera,20 we reiterated the importance of the requirement that the decision
of the IBP Board of Governors must state the facts and the reasons on which such decision
is based, which is akin to what is required of the decisions of courts of record. We held
therein that:
[A]side from informing the parties the reason for the decision to enable them to point out
to the appellate court the findings with which they are not in agreement, in case any of
them decides to appeal the decision, it is also an assurance that the judge, or the Board of
Governors in this case, reached his judgment through the process of legal reasoning.
Noncompliance with this requirement would normally result in the remand of the case.21
Moreover, while we may consider the act of the IBP Board of Governors in simply adopting
the report of the Investigating Commissioner as substantial compliance with said Rule, in
this case, we cannot countenance the act of the IBP Board of Governors in merely stating
that it is annulling the Commissioner's recommendation and then dismiss the complaint
without stating the facts and the reasons for said dismissal.
However, considering that the present controversy has been pending resolution for quite
some time, that no further factual determination is required, and the issues being raised
may be determined on the basis of the numerous pleadings filed together with the annexes
attached thereto, we resolve to proceed and decide the case on the basis of the extensive
pleadings on record, in the interest of justice and speedy disposition of the case.22
Coming to the main issue in the present case, respondent is being accused of malpractice
and misconduct on three grounds: first, for representing interests which conflict with those
of his former client, herein complainant; second, for taking advantage of the information
and knowledge that he obtained from complainant; and, third, for not notifying
complainant of the dismissal of his counterclaim in Civil Case No. 1648.
We shall concurrently discuss the first and second grounds as they are interrelated.
Rule 15.03, Canon 15 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."
Corollary to this, Canon 21 of the same Code enjoins a lawyer to preserve the confidences
and secrets of his clients even after the attorney-client relation is terminated. Rule 21.02,
Canon 21 specifically requires that:
A lawyer shall not, to the disadvantage of his client, use information acquired in the course
of employment, nor shall he use the same to his own advantage or that of a third person,
unless the client with full knowledge of the circumstances consents thereto.
In addition, Canon 6 of the Canons of Professional Ethics states:
It is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances
of his relations to the parties and any interest in or connection with the controversy, which
might influence the client in the selection of counsel.
It is unprofessional to represent conflicting interests, except by express consent of all
concerned given after a full disclosure of the facts. Within the meaning of this canon, a
lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend
for that which duty to another client requires him to oppose.
The obligation to represent the client with undivided fidelity and not to divulge his secrets
or confidences forbids also the subsequent acceptance of retainers or employment from
others in matters adversely affecting any interest of the client with respect to which
confidence has been reposed.
Jurisprudence instructs that there is a representation of conflicting interests if the
acceptance of the new retainer will require the attorney to do anything 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.23 Another test to determine if there is a representation
of conflicting 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.24
A lawyer is forbidden from representing a subsequent client against a former client when
the subject matter of the present controversy is related, directly or indirectly, to the subject
matter of the previous litigation in which he appeared for the former client.25 Conversely,
he may properly act as counsel for a new client, with full disclosure to the latter, against a
former client in a matter wholly unrelated to that of the previous employment, there being
in that instance no conflict of interests.26 Where, however, the subject matter of the
present suit between the lawyer's new client and his former client is in some way connected
with that of the former client's action, the lawyer may have to contend for his new client
that which he previously opposed as counsel for the former client or to use against the
latter information confided to him as his counsel.27 As we have held in Maturan vs.
Gonzales:28
The reason for the prohibition is found in the relation of attorney and client, which is one
of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts
connected with his client's case. He learns from his client the weak points of the action as
well as the strong ones. Such knowledge must be considered sacred and guarded with care.
No opportunity must be given him to take advantage of the client's secrets. A lawyer must
have the fullest confidence of his client. For if the confidence is abused, the profession will
suffer by the loss thereof.29
The proscription against representation of conflicting interests finds application where the
conflicting interests arise with respect to the same general matter and is applicable
however slight such adverse interest may be.30 In essence, what a lawyer owes his former
client is to maintain inviolate the client's confidence or to refrain from doing anything which
will injuriously affect him in any matter in which he previously represented him.31
In the present case, we find no conflict of interests when respondent represented herein
complainant's nephew and other members of his family in the ejectment case, docketed as
Civil Case No. 528, and in the criminal complaint, denominated as I.S. Case No. 99-188, filed
by herein complainant against them. The only established participation respondent had
with respect to the parcel of land purchased by complainant, is that he was the one who
notarized the deed of sale of the said land. On that basis alone, it does not necessarily follow
that respondent obtained any information from herein complainant that can be used to the
detriment of the latter in the ejectment case he filed.
While complainant alleges that it was respondent who advised him to allow his nephew to
temporarily occupy the property in order to establish complainant's possession of said
property as against another claimant, no corroborating evidence was presented to prove
this allegation. Defendant, in his answer to the complaint for ejectment, raised the issue as
to the right of the vendor to sell the said land in favor of complainant.32 However, we find
this immaterial because what is actually in issue in the ejectment case is not the ownership
of the subject lot but the ownership of the house built on the said lot. Furthermore, the
subject matter of I.S. Case No. 99-188 filed by complainant against his nephew and other
members of his family involves several parts of trucks owned by herein complainant.33 This
case is not in any way connected with the controversy involving said parcel of land. In fine,
with respect to Civil Case No. 528 and I.S. Case No. 99-188, complainant failed to present
substantial evidence to hold respondent liable for violating the prohibition against
representation of conflicting interests.
However, we find conflict of interests in respondent's representation of herein complainant
in Civil Case No. 1648 and his subsequent employment as counsel of the accused in Criminal
Case No. 3159.
The subject matter in Civil Case No. 1648 is Lot 609 located at Escalante, Negros Occidental,
the same parcel of land involved in Criminal Case No. 3159 filed by herein complainant
against several persons, accusing them of theft for allegedly cutting and stealing coconut
trees within the premises of the said lot. Complainant contends that it is in this criminal
case that respondent used confidential information which the latter obtained from the
former in Civil Case No. 1648.
To prove his contention, complainant submitted in evidence portions of the transcript of
stenographic notes taken during his cross-examination in Criminal Case No. 3159. However,
after a reading of the said transcript, we find no direct evidence to prove that respondent
took advantage of any information that he may have been acquired from complainant and
used the same in the defense of his clients in Criminal Case No. 3159. The matter discussed
by respondent when he cross-examined complainant is the ownership of Lot 609 in its
entirety, only a portion of which was purportedly sold to complainant. Part of the defense
raised by his clients is that herein complainant does not have the personality to file the
criminal complaint as he is not the owner of the lot where the supposed theft occurred. It
is possible that the information as to the ownership of the disputed lot used by respondent
in bringing up this issue may have been obtained while he still acted as counsel for
complainant. It is also probable that such information may have been taken from other
sources, like the Registry of Deeds, the Land Registration Authority or the respondent's
clients themselves.
Nonetheless, be that as it may, it cannot be denied that when respondent was the counsel
of complainant in Civil Case No. 1648, he became privy to the documents and information
that complainant possessed with respect to the said parcel of land. Hence, whatever may
be said as to whether or not respondent utilized against complainant any information given
to him in a professional capacity, the mere fact of their previous relationship should have
precluded him from appearing as counsel for the opposing side. As we have previously held:
The relations of attorney and client is [are] founded on principles of public policy, on good
taste. The question is not necessarily one of the rights of the parties, but as to whether the
attorney has adhered to proper professional standard. With these thoughts in mind, it
behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence,
but also to avoid the appearance of treachery and double-dealing. Only thus can litigants
be encouraged to entrust their secrets to their attorneys which is of paramount importance
in the administration of justice.34
Moreover, we have held in Hilado vs. David35 that:
Communications between attorney and client are, in a great number of litigations, a
complicated affair, consisting of entangled relevant and irrelevant, secret and well known
facts. In the complexity of what is said in the course of dealings between an attorney and
client, inquiry of the nature suggested would lead to the revelation, in advance of the trial,
of other matters that might only further prejudice the complainant's cause.36
Thus, respondent should have declined employment in Criminal Case No. 3159 so as to
avoid suspicion that he used in the criminal action any information he may have acquired
in Civil Case No. 1648.
Moreover, nothing on record would show that respondent fully apprised complainant and
his new clients and secured or at least tried to secure their consent when he took the
defense of the accused in Criminal Case No. 3159.
Respondent contends that he handled the defense of the accused in the subject criminal
case for humanitarian reasons and with the honest belief that there exists no conflict of
interests. However, the rule is settled that the prohibition against representation of
conflicting interests applies although the attorney's intentions and motives were honest
and he acted in good faith.37 Moreover, the fact that the conflict of interests is remote or
merely probable does not make the prohibition inoperative.38
Respondent also asserts that when he accepted employment in Criminal Case No. 3159, the
attorney-client relations between him and complainant in Civil Case No. 1648 had already
been terminated. This defense does not hold water because the termination of the relation
of attorney and client provides no justification for a lawyer to represent an interest adverse
to or in conflict with that of the former client.39
Thus, we find respondent guilty of misconduct for representing conflicting interests.
As to the third ground, we find that complainant failed to present substantial evidence to
prove that respondent did not inform him of the dismissal of his counterclaim in Civil Case
No. 1648. On the contrary, we find sufficient evidence to prove that complainant has been
properly notified of the trial court's order of dismissal. The only proof presented by
complainant to support his claim is the affidavit of his daughter confirming complainant's
contention that respondent indeed failed to inform him of the dismissal of his
counterclaim.40 However, in the same affidavit, complainant's daughter admits that it was
on December 4, 1989 that respondent received the order of the trial court dismissing
complainant's counterclaim. Respondent, presented a "certification" dated December 11,
1989, or one week after his receipt of the trial court's order, where complainant's daughter
acknowledged receipt of the entire records of Civil Case No. 1648 from complainant.41 The
same "certification" relieved respondent of his obligation as counsel of complainant. From
the foregoing, it can be inferred that respondent duly notified complainant of the dismissal
of his counterclaim. Otherwise, complainant could not have ordered his daughter to
withdraw the records of his case from respondent at the same time relieving the latter of
responsibility arising from his obligation as complainant's counsel in that particular case.

As to the penalty to be imposed, considering respondent's honest belief that there is no

conflict of interests in handling Civil Case No. 1648 and Criminal Case No. 3159, and it
appearing that this is respondent's first infraction of this nature, we find the penalty of
suspension to be disproportionate to the offense committed.42 Moreover, we take into
account respondent's undisputed claim that there are only three lawyers who are actually
engaged in private practice in Escalante, Negros Occidental, where both complainant and
respondent reside. One of the lawyers is already handling complainant's case, while the
other lawyer is believed by respondent's clients to be a relative of complainant. Hence,
respondent's clients believed that they had no choice but go to him for help. We do not
find this situation as an excuse for respondent to accept employment because he could
have referred his clients to the resident lawyer of the Public Attorney's Office or to other
lawyers in the neighboring towns. Nonetheless, in view of respondent's belief that he
simply adhered to his sworn duty to defend the poor and the needy, we consider such
situation as a circumstance that mitigates his liability. Considering the foregoing facts and
circumstances, we find it proper to impose a fine on respondent. In Sibulo vs. Cabrera,43
the respondent is fined for having been found guilty of unethical conduct in representing
two conflicting interests.

Respondent is further reminded to be more cautious in accepting professional

employments, to refrain from all appearances and acts of impropriety including
circumstances indicating conflict of interests, and to behave at all times with
circumspection and dedication befitting a member of the Bar, especially observing candor,
fairness and loyalty in all transactions with his clients.44

WHEREFORE, respondent Atty. Elias A. Pontevedra is found GUILTY of representing

conflicting interests and is hereby FINED in the amount of Ten Thousand (P10,000.00)
Pesos. He is WARNED that a repetition of the same or similar acts will be dealt with more
severely.

The Board of Governors of the Integrated Bar of the Philippines is DIRECTED to be heedful
of the requirements provided for in Section 12(a), Rule 139-B of the Rules of Court as
discussed in the text of herein decision.

SO ORDERED.
A.C. No. 8243 July 24, 2009
ROLANDO B. PACANA, JR., Complainant,
vs.
ATTY. MARICEL PASCUAL-LOPEZ, Respondent.
This case stems from an administrative complaint1 filed by Rolando Pacana, Jr. against Atty.
Maricel Pascual-Lopez charging the latter with flagrant violation of the provisions of the
Code of Professional Responsibility.2 Complainant alleges that respondent committed acts
constituting conflict of interest, dishonesty, influence peddling, and failure to render an
accounting of all the money and properties received by her from complainant.
On January 2, 2002, complainant was the Operations Director for Multitel Communications
Corporation (MCC). MCC is an affiliate company of Multitel International Holdings
Corporation (Multitel). Sometime in July 2002, MCC changed its name to Precedent
Communications Corporation (Precedent).3
According to complainant, in mid-2002, Multitel was besieged by demand letters from its
members and investors because of the failure of its investment schemes. He alleges that he
earned the ire of Multitel investors after becoming the assignee of majority of the shares
of stock of Precedent and after being appointed as trustee of a fund amounting to Thirty
Million Pesos (₱30,000,000.00) deposited at Real Bank.
Distraught, complainant sought the advice of respondent who also happened to be a
member of the Couples for Christ, a religious organization where complainant and his wife
were also active members. From then on, complainant and respondent constantly
communicated, with the former disclosing all his involvement and interests in Precedent
and Precedent’s relation with Multitel. Respondent gave legal advice to complainant and
even helped him prepare standard quitclaims for creditors. In sum, complainant avers that
a lawyer-client relationship was established between him and respondent although no
formal document was executed by them at that time. A Retainer Agreement4 dated January
15, 2003 was proposed by respondent. Complainant, however, did not sign the said
agreement because respondent verbally asked for One Hundred Thousand Pesos
(₱100,000.00) as acceptance fee and a 15% contingency fee upon collection of the
overpayment made by Multitel to Benefon,5 a telecommunications company based in
Finland. Complainant found the proposed fees to be prohibitive and not within his means.6
Hence, the retainer agreement remained unsigned.7
After a few weeks, complainant was surprised to receive a demand letter from respondent8
asking for the return and immediate settlement of the funds invested by respondent’s
clients in Multitel. When complainant confronted respondent about the demand letter, the
latter explained that she had to send it so that her clients – defrauded investors of Multitel
– would know that she was doing something for them and assured complainant that there
was nothing to worry about.9
Both parties continued to communicate and exchange information regarding the persistent
demands made by Multitel investors against complainant. On these occasions, respondent
impressed upon complainant that she can closely work with officials of the Anti-Money
Laundering Council (AMLC), the Department of Justice (DOJ), the National Bureau of
Investigation (NBI), the Bureau of Immigration and Deportations (BID),10 and the Securities
and Exchange Commission (SEC)11 to resolve complainant’s problems. Respondent also
convinced complainant that in order to be absolved from any liability with respect to the
investment scam, he must be able to show to the DOJ that he was willing to divest any and
all of his interests in Precedent including the funds assigned to him by Multitel.12
Respondent also asked money from complainant allegedly for safekeeping to be used only
for his case whenever necessary. Complainant agreed and gave her an initial amount of
₱900,000.00 which was received by respondent herself.13 Sometime thereafter,
complainant again gave respondent ₱1,000,000.00.14 Said amounts were all part of
Precedent’s collections and sales proceeds which complainant held as assignee of the
company’s properties.15
When complainant went to the United States (US), he received several messages from
respondent sent through electronic mail (e-mail) and short messaging system (SMS, or text
messages) warning him not to return to the Philippines because Rosario Baladjay, president
of Multitel, was arrested and that complainant may later on be implicated in Multitel’s
failed investment system. Respondent even said that ten (10) arrest warrants and a hold
departure order had been issued against him. Complainant, thereafter, received several e-
mail messages from respondent updating him of the status of the case against Multitel and
promised that she will settle the matter discreetly with government officials she can closely
work with in order to clear complainant’s name.16 In two separate e-mail messages,17
respondent again asked money from complainant, ₱200,000 of which was handed by
complainant’s wife while respondent was confined in Saint Luke’s Hospital after giving
birth,18 and another ₱700,000 allegedly to be given to the NBI.19
Through respondent’s persistent promises to settle all complainant’s legal problems,
respondent was able to convince complainant who was still in the US to execute a deed of
assignment in favor of respondent allowing the latter to retrieve 178 boxes containing
cellular phones and accessories stored in complainant’s house and inside a warehouse.20
He also signed a blank deed of sale authorizing respondent to sell his 2002 Isuzu Trooper.21
Sometime in April 2003, wary that respondent may not be able to handle his legal problems,
complainant was advised by his family to hire another lawyer. When respondent knew
about this, she wrote to complainant via e-mail, as follows:

Dear Butchie,
Hi! Ok ka lang? Hope you are fine. Sorry if I shocked you but I had to do it as your friend and
lawyer. The charges are all non-bailable but all the same as the SEC report I told you before.
The findings are the same, i.e. your company was the front for the fraud of Multitel and
that funds were provided you.
I anticipated this, that is why I really pushed for a quitclaim. Rolly is willing to return the
Crosswind, laptap (sic) and [P]alm [P]ilot. Manny Cancio really helped. Anthony na lang.
Then, I will need the accounting of all the funds you received from the sale of the phones,
every employees and directors[’] quitclaim (including yours), the funds transmitted to the
clients through me, the funds you utilized, and whatelse (sic) is still unremitted, every
centavo must be accounted for as DOJ and NBI can have the account opened.
I will also need the P30 M proof of deposit with Real [B]ank and the trust given [to] you. So
we can inform them [that] it was not touched by you.
I have been informed by Efie that your family is looking at hiring Coco Pimentel. I know him
very well as his sister Gwen is my best friend. I have no problem if you hire him but I will be
hands off. I work differently kasi. In this cases (sic), you cannot be highprofile (sic) because
it is the clients who will be sacrificed at the expense of the fame of the lawyer. I have to
work quietly and discreetly. No funfare. Just like what I did for your guys in the SEC. I have
to work with people I am comfortable with. Efren Santos will sign as your lawyer although
I will do all the work. He can help with all his connections. Val’s friend in the NBI is the one
is (sic) charge of organized crime who is the entity (sic) who has your warrant. My law
partner was the state prosecutor for financial fraud. Basically we have it covered in all
aspects and all departments. I am just trying to liquidate the phones I have allotted for you
s ana (sic) for your trooper kasi whether we like it or not, we have to give this agencies (sic)
to make our work easier according to Val. The funds with Mickey are already accounted in
the quit claims (sic) as attorneys (sic) fees. I hope he will be able to send it so we have funds
to work with.
As for your kids, legally they can stay here but recently, it is the children who (sic) the irate
clients and government officials harass and kidnap to make the individuals they want to
come out from hiding (sic). I do not want that to happen. Things will be really easier on my
side.
Please do not worry. Give me 3 months to make it all disappear. But if you hire Coco, I will
give him the free hand to work with your case. Please trust me. I have never let you down,
have I? I told you this will happen but we are ready and prepared. The clients who received
the phones will stand by you and make you the hero in this scandal. I will stand by you
always. This is my expertise. TRUST me! That is all. You have an angel on your side. Always
pray though to the best legal mind up there. You will be ok!
Candy22
On July 4, 2003, contrary to respondent’s advice, complainant returned to the country. On
the eve of his departure from the United States, respondent called up complainant and
conveniently informed him that he has been cleared by the NBI and the BID.23
About a month thereafter, respondent personally met with complainant and his wife and
told them that she has already accumulated ₱12,500,000.00 as attorney’s fees and was
willing to give ₱2,000,000.00 to complainant in appreciation for his help. Respondent
allegedly told complainant that without his help, she would not have earned such amount.
Overwhelmed and relieved, complainant accepted respondent’s offer but respondent, later
on, changed her mind and told complainant that she would instead invest the
₱2,000,000.00 on his behalf in a business venture. Complainant declined and explained to
respondent that he and his family needed the money instead to cover their daily expenses
as he was no longer employed. Respondent allegedly agreed, but she failed to fulfill her
promise.24
Respondent even publicly announced in their religious organization that she was able to
help settle the ten (10) warrants of arrest and hold departure order issued against
complainant and narrated how she was able to defend complainant in the said cases.25
By April 2004, however, complainant noticed that respondent was evading him.
Respondent would either refuse to return complainant’s call or would abruptly terminate
their telephone conversation, citing several reasons. This went on for several months.26 In
one instance, when complainant asked respondent for an update on the collection of
Benefon’s obligation to Precedent which respondent had previously taken charge of,
respondent arrogantly answered that she was very busy and that she would read Benefon’s
letter only when she found time to do so.
On November 9, 2004, fed up and dismayed with respondent’s arrogance and evasiveness,
complainant wrote respondent a letter formally asking for a full accounting of all the
money, documents and properties given to the latter.27 Respondent rendered an
accounting through a letter dated December 20, 2004.28 When complainant found
respondent’s explanation to be inadequate, he wrote a latter expressing his confusion
about the accounting.29 Complainant repeated his request for an audited financial report
of all the properties turned over to her; otherwise, he will be constrained to file the
appropriate case against respondent.30 Respondent replied,31 explaining that all the
properties and cash turned over to her by complainant had been returned to her clients
who had money claims against Multitel. In exchange for this, she said that she was able to
secure quitclaim documents clearing complainant from any liability.32 Still unsatisfied,
complainant decided to file an affidavit-complaint33 against respondent before the
Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) seeking the
disbarment of respondent.
In her Answer-Affidavit,34 respondent vehemently denied being the lawyer for Precedent.
She maintained that no formal engagement was executed between her and complainant.
She claimed that she merely helped complainant by providing him with legal advice and
assistance because she personally knew him, since they both belonged to the same
religious organization.35lavvph!1
Respondent insisted that she represented the group of investors of Multitel and that she
merely mediated in the settlement of the claims her clients had against the complainant.
She also averred that the results of the settlement between both parties were fully
documented and accounted for.36 Respondent believes that her act in helping complainant
resolve his legal problem did not violate any ethical standard and was, in fact, in accord
with Rule 2.02 of the Code of Professional Responsibility.37
To bolster her claim that the complaint was without basis, respondent noted that a
complaint for estafa was also filed against her by complainant before the Office of the City
Prosecutor in Quezon City citing the same grounds. The complaint was, however, dismissed
by Assistant City Prosecutor Josephus Joannes H. Asis for insufficiency of evidence.38
Respondent argued that on this basis alone, the administrative case must also be dismissed.
In her Position Paper,39 respondent also questioned the admissibility of the electronic
evidence submitted by complainant to the IBP’s Commission on Bar Discipline. Respondent
maintained that the e-mail and the text messages allegedly sent by respondent to
complainant were of doubtful authenticity and should be excluded as evidence for failure
to conform to the Rules on Electronic Evidence (A.M. No. 01-7-01-SC).
After due hearing, IBP Investigating Commissioner Patrick M. Velez issued a Report and
Recommendation40 finding that a lawyer-client relationship was established between
respondent and complainant despite the absence of a written contract. The Investigating
Commissioner also declared that respondent violated her duty to be candid, fair and loyal
to her client when she allowed herself to represent conflicting interests and failed to render
a full accounting of all the cash and properties entrusted to her. Based on these grounds,
the Investigating Commissioner recommended her disbarment.
Respondent moved for reconsideration,41 but the IBP Board of Governors issued a
Recommendation42 denying the motion and adopting the findings of the Investigating
Commissioner.
The case now comes before this Court for final action.
We affirm the findings of the IBP.
Rule 15.03, Canon 15 of the Code of Professional responsibility provides:
Rule 15.03 – A lawyer shall not represent conflicting interests except by written consent of
all concerned given after full disclosure of the facts.
This prohibition is founded on principles of public policy, good taste43 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. No opportunity must be
given to him to take advantage of his client; for if the confidence is abused, the profession
will suffer by the loss thereof.44 It behooves lawyers not only to keep inviolate the client’s
confidence, but also to avoid the appearance of treachery and double ─ dealing for only
then can litigants be encouraged to entrust their secrets to their lawyers, which is
paramount in the administration of justice.45 It is for these reasons that we have described
the attorney-client relationship as one of trust and confidence of the highest degree.46
Respondent must have known that her act of constantly and actively communicating with
complainant, who, at that time, was beleaguered with demands from investors of Multitel,
eventually led to the establishment of a lawyer-client relationship. Respondent cannot
shield herself from the inevitable consequences of her actions by simply saying that the
assistance she rendered to complainant was only in the form of "friendly
accommodations,"47 precisely because at the time she was giving assistance to
complainant, she was already privy to the cause of the opposing parties who had been
referred to her by the SEC.48
Respondent also tries to disprove the existence of such relationship by arguing that no
written contract for the engagement of her services was ever forged between her and
complainant.49 This argument all the more reveals respondent’s patent ignorance of
fundamental laws on contracts and of basic ethical standards expected from an advocate
of justice. The IBP was correct when it said:
The absence of a written contract will not preclude the finding that there was a professional
relationship between the parties. Documentary formalism is not an essential element in the
employment of an attorney; the contract may be express or implied. To establish the
relation, it is sufficient that the advice and assistance of an attorney is sought and received
in any matter pertinent to his profession.50 (Emphasis supplied.)1awphi1
Given the situation, the most decent and ethical thing which respondent should have done
was either to advise complainant to engage the services of another lawyer since she was
already representing the opposing parties, or to desist from acting as representative of
Multitel investors and stand as counsel for complainant. She cannot be permitted to do
both because that would amount to double-dealing and violate our ethical rules on conflict
of interest.
In Hornilla v. Atty. Salunat,51 we explained the concept of conflict of interest, thus:
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 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.52
Indubitably, respondent took advantage of complainant’s hapless situation, initially, by
giving him legal advice and, later on, by soliciting money and properties from him.
Thereafter, respondent impressed upon complainant that she had acted with utmost
sincerity in helping him divest all the properties entrusted to him in order to absolve him
from any liability. But simultaneously, she was also doing the same thing to impress upon
her clients, the party claimants against Multitel, that she was doing everything to reclaim
the money they invested with Multitel. Respondent herself admitted to complainant that
without the latter’s help, she would not have been able to earn as much and that, as a token
of her appreciation, she was willing to share some of her earnings with complainant.53
Clearly, respondent’s act is shocking, as it not only violated Rule 9.02, Canon 9 of the Code
of Professional Responsibility,54 but also toyed with decency and good taste.
Respondent even had the temerity to boast that no Multitel client had ever complained of
respondent’s unethical behavior.55 This remark indubitably displays respondent’s gross
ignorance of disciplinary procedure in the Bar. As a member of the Bar, she is expected to
know that proceedings for disciplinary actions against any lawyer may be initiated and
prosecuted by the IBP Board of Governors, motu proprio or upon referral by this Court or
by the Board of Officers of an IBP Chapter56 even if no private individual files any
administrative complaint.
Upon review, we find no cogent reason to disturb the findings and recommendations of the
IBP Investigating Commissioner, as adopted by the IBP Board of Governors, on the
admissibility of the electronic evidence submitted by complainant. We, accordingly, adopt
the same in toto.
Finally, respondent argues that the recommendation of the IBP Board of Governors to
disbar her on the grounds of deceit, malpractice and other gross misconduct, aside from
violation of the Lawyer’s Oath, has been rendered moot and academic by voluntary
termination of her IBP membership, allegedly after she had been placed under the
Department of Justice’s Witness Protection Program.57 Convenient as it may be for
respondent to sever her membership in the integrated bar, this Court cannot allow her to
do so without resolving first this administrative case against her.
The resolution of the administrative case filed against respondent is necessary in order to
determine the degree of her culpability and liability to complainant. The case may not be
dismissed or rendered moot and academic by respondent’s act of voluntarily terminating
her membership in the Bar regardless of the reason for doing so. This is because
membership in the Bar is a privilege burdened with conditions.58 The conduct of a lawyer
may make him or her civilly, if not criminally, liable to his client or to third parties, and such
liability may be conveniently avoided if this Court were to allow voluntary termination of
membership. Hence, to terminate one’s membership in the Bar voluntarily, it is imperative
that the lawyer first prove that the voluntary withdrawal of membership is not a ploy to
further prejudice the public or to evade liability. No such proof exists in the present case.
WHEREFORE, respondent Attorney Maricel Pascual-Lopez is hereby DISBARRED for
representing conflicting interests and for engaging in unlawful, dishonest and deceitful
conduct in violation of her Lawyer’s Oath and the Code of Professional Responsibility.
Let a copy of this Decision be entered in the respondent’s record as a member of the Bar,
and notice of the same be served on the Integrated Bar of the Philippines, and on the Office
of the Court Administrator for circulation to all courts in the country.
SO ORDERED.
A.C. No. 9094 August 15, 2012
SANTOS VENTURA HOCORMA FOUNDATION, INC., represented by GABRIEL H. ABAD,
Complainant,
vs.
ATTY. RICHARD V. FUNK, Respondent.
This is a disbarment case against a lawyer who sued a former client in representation of a
new one.
The Facts and the Case
Complainant Santos Ventura Hocorma Foundation, Inc. (Hocorma Foundation) filed a
complaint for disbarment against respondent Atty. Richard Funk. It alleged that Atty. Funk
used to work as corporate secretary, counsel, chief executive officer, and trustee of the
foundation from 1983 to 1985.1 He also served as its counsel in several criminal and civil
cases.
Hocorma Foundation further alleged that on November 25, 2006 Atty. Funk filed an action
for quieting of title and damages against Hocorma Foundation on behalf of Mabalacat
Institute, Inc. (Mabalacat Institute). Atty. Funk did so, according to the foundation, using
information that he acquired while serving as its counsel in violation of the Code of
Professional Responsibility (CPR) and in breach of attorney-client relationship.2
In his answer, Atty. Funk averred that Don Teodoro V. Santos (Santos) organized Mabalacat
Institute in 1950 and Hocorma Foundation in 1979. Santos hired him in January 1982 to
assist Santos and the organizations he established, including the Mabalacat Institute, in its
legal problems. In 1983 the Mabalacat Institute made Atty. Funk serve as a director and
legal counsel.3
Subsequently, according to Atty. Funk, when Santos got involved in various litigations, he
sold or donated substantial portions of his real and personal properties to the Hocorma
Foundation. Santos hired Atty. Funk for this purpose. The latter emphasized that, in all
these, the attorney-client relationship was always between Santos and him. He was more
of Santos' personal lawyer than the lawyer of Hocorma Foundation.4
Atty. Funk claimed that before Santos left for America in August 1983 for medical
treatment, he entered into a retainer agreement with him. They agreed that Atty. Funk
would be paid for his legal services out of the properties that he donated or sold to the
Hocorma Foundation. The foundation approved that compensation agreement on
December 13, 1983. But it reneged and would not pay Atty. Funk's legal fees.5
Atty. Funk also claimed that Santos executed a Special Power of Attorney (SPA) in his favor
on August 13, 1983. The SPA authorized him to advise Hocorma Foundation and follow up
with it Santos' sale or donation of a 5-hectare land in Pampanga to Mabalacat Institute,
covered by TCT 19989-R. Out of these, two hectares already comprised its school site. The
remaining three hectares were for campus expansion.
Atty. Funk was to collect all expenses for the property transfer from Hocorma Foundation
out of funds that Santos provided. It was Santos' intention since 1950 to give the land to
Mabalacat Institute free of rent and expenses. The SPA also authorized Atty. Funk to
register the 5-hectare land in the name of Mabalacat Institute so a new title could be issued
to it, separate from the properties of Hocorma Foundation.6 When Santos issued the SPA,
Atty. Funk was Mabalacat Institute's director and counsel. He was not yet Hocorma
Foundation's counsel.7 When Santos executed the deeds of conveyances, Atty. Funk's
clients were only Santos and Mabalacat Institute.8
According to Atty. Funk, on August 15, 1983 Santos suggested to Hocorma Foundation's
Board of Trustees the inclusion of Atty. Funk in that board, a suggestion that the foundation
followed.9 After Santos died on September 14, 1983, Atty. Funk was elected President of
Mabalacat Institute, a position he had since held.10
Atty. Funk claims that in 1985 when Hocorma Foundation refused to pay his attorney's fees,
he severed his professional relationship with it. On November 9, 1989, four years later, he
filed a complaint against the foundation for collection of his attorney's fees. The trial court,
the Court of Appeals (CA), and the Supreme Court decided the claim in his favor.11
After hearing, the Committee on Bar Discipline (CBD) found Atty. Funk to have violated
Canon 15, Rule 15.0312 of the Code of Professional Responsibility (CPR) with the
aggravating circumstance of a pattern of misconduct consisting of four court appearances
against his former client, the Hocorma Foundation. The CBD recommended Atty. Funk's
suspension from the practice of law for one year.13 On April 16, 2010 the IBP Board of
Governors adopted and approved the CBD's report and recommendation.14 Atty. Funk
moved for reconsideration but the IBP Board of Governors denied it on June 26, 2011.
The Issue Presented
The issue here is whether or not Atty. Funk betrayed the trust and confidence of a former
client in violation of the CPR when he filed several actions against such client on behalf of
a new one.
The Court's Ruling
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, the Mabalacat Institute, without the
foundation's written consent.

An attorney owes his client undivided allegiance. Because of the highly fiduciary nature of
their relationship, sound public policy dictates that he be prohibited from representing
conflicting interests or discharging inconsistent duties.1âwphi1 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.15

The reason for this is that a lawyer acquires knowledge of his former client's doings,
whether documented or not, that he would ordinarily not have acquired were it not for the
trust and confidence that his client placed on him in the light of their relationship. It would
simply be impossible for the lawyer to identify and erase such entrusted knowledge with
faultless precision or lock the same into an iron box when suing the former client on behalf
of a new one.

Here, the evidence shows that Hocorma Foundation availed itself of the legal services of
Atty. Funk in connection with, among others, the transfer of one of the properties subject
of the several suits that the lawyer subsequently filed against the foundation. Indeed, Atty.
Funk collected attorney's fees from the foundation for such services. Thus, he had an
obligation not to use any knowledge he acquired during that relationship, including the fact
that the property under litigation existed at all, when he sued the foundation.

The Court finds it fitting ti adopt the CBD's recommendation as well as the IBP Board of
Governor's resolution respecting the case.

WHEREFORE, the Court AFFIRMS the resolution of the Board of Governors of the Integrated
Bar of the Philippines dated April 16, 2010 and June 26, 2011 and SUSPENDS Atty. Richard
Funk from the practice of law for one year effective immediately. Serve copies of this
decision upon the Office of the Court Administration for dissemination, the Integrated Bar
of the Philippines, and the Office of the Bar Confidant so the latter may attach its copy to
his record.

SO ORDERED.
A.C. No. 4354 April 22, 2002
LOLITA ARTEZUELA, complainant,
vs.
ATTY. RICARTE B. MADERAZO, respondent.
For his failure to meet the exacting standards of professional ethics, the Board of Governors
of the Integrated Bar of the Philippines (IBP) in its Resolution of May 2, 2000 recommended
the suspension from the practice of law of respondent Atty. Ricarte B. Maderazo for the
period of six (6) months, with a stern warning that repetition of the same act will be dealt
with more severely. Respondent allegedly represented conflicting interests in violation of
Canon 6 of the Code of Professional Ethics, and Canon 15 and Rule 15.03 of the Code of
Professional Responsibility.1
By way of a Motion for Reconsideration,2 respondent now comes before this Court to
challenge the basis of the IBP's resolution, and prays for its reversal.
The factual antecedents of the case are as follows: On or about 3:00 in the early morning
of December 24, 1992, Allan Echavia had a vehicular accident at Caduman St., corner H.
Abellana St., Mandaue City. At the time of the accident, Echavia was driving a Ford Telstar
car owned by a Japanese national named Hirometsi Kiyami, but was registered in the name
of his brother-in-law, Jun Anthony Villapez. The car rammed into a small carinderia owned
by complainant Lolita Artezuela.3
The destruction of the complainant's carinderia caused the cessation of the operation of
her small business, resulting to her financial dislocation. She incurred debts from her
relatives and due to financial constraints, stopped sending her two children to college.4
Complainant engaged the services of the respondent in filing a damage suit against Echavia,
Villapez and one Bernardo Sia.5 Docketed as Civil Case No. 13666, the case was assigned to
Branch 14 of the Regional Trial Court of Cebu. An Amended Complaint was thereafter filed,
impleading Echavia, Kiyami and Villapez, and dropping Sia as a party-defendant.6 For his
services, complainant paid the respondent the amount of Ten Thousand Pesos (₱10,000.00)
as attorney's fees and Two Thousand Pesos (₱2,000.00) as filing fee.7 However, the case
was dismissed on March 22, 1994, allegedly upon the instance of the complainant and her
husband.8
Because of the dismissal of Civil Case No. 13666, complainant filed a civil case for damages
against the respondent. It was docketed as CEB-18552 and assigned to Branch 57, Regional
Trial Court of Cebu City. The case was dismissed on June 12, 2001.9
On November 24, 1994, Artezuela filed before this Court a verified complaint for
disbarment against the respondent. She alleged that respondent grossly neglected his
duties as a lawyer and failed to represent her interests with zeal and enthusiasm. According
to her, when Civil Case No. 13666 was scheduled for pre-trial conference on August 20,
1993, respondent asked for its postponement although all the parties were present.
Notwithstanding complainant's persistent and repeated follow-up, respondent did not do
anything to keep the case moving. He withdrew as counsel without obtaining complainant's
consent.10
Complainant also claimed that respondent engaged in activities inimical to her interests.
While acting as her counsel, respondent prepared Echavia's Answer to the Amended
Complaint. The said document was even printed in respondent's office. Complainant
further averred that it was respondent who sought the dismissal of the case, misleading the
trial court into thinking that the dismissal was with her consent.11
Respondent denied the complainant's allegations and averred that he conscientiously did
his part as the complainant's lawyer in Civil Case No. 13666. He withdrew as counsel
because the complainant was uncooperative and refused to confer with him. He also gave
several notices to the complainant and made known his intention before he filed his
Manifestation to withdraw as counsel. Because of the severed relationship, the lower court,
after holding a conference, decided to grant respondent's manifestation and advised the
complainant to secure the services of a new lawyer. Complainant, however, refused and
instead, sought the dismissal of the case.12
Respondent alleged that he sought the postponement of the Pre-Trial Conference
scheduled on August 20, 1993 so that he could file the Amended Complaint. He admitted
that Echavia's Answer to the Amended Complaint was printed in his office but denied
having prepared the document and having acted as counsel of Echavia. He claimed that
complainant requested him to prepare Echavia's Answer but he declined. Echavia, however,
went back to his office and asked respondent's secretary to print the document.
Respondent intimated that the complainant and Echavia have fabricated the accusations
against him to compel him to pay the amount of ₱500,000.00.13
This Court referred the complaint to the Integrated Bar of the Philippines (IBP). The IBP-
Visayas Regional Committee on Bar Discipline formed an Investigating Committee to hear
the disbarment complaint.
On October 6, 1999, Commissioner Gabriel T. Ingles issued a Report finding the respondent
guilty of representing conflicting interests, in violation of Canon 15 and Rule 15.03 of the
Code of Professional Responsibility, as well as, of Canon 6 of the Code of Professional Ethics.
He recommended that the respondent be suspended from the practice of law for a period
of one (1) year.14 Commissioner Ingles did not rule on the other issues.
As aforesaid, the Board of Governors of the Integrated Bar of the Philippines upheld the
findings of the Committee with modification only as to the penalty.
Seeking reconsideration of the IBP's resolution, respondent contends that the Investigating
Committee did not conduct trial; hence, he was not able to confront and examine the
witnesses against him. He argues that the Investigating Committee's finding that he
represented Echavia is contrary to court records and the complainant's own testimony in
CEB-18552. He also casts doubt on the credibility of the Investigating Committee to render
just and fair recommendations considering that the Investigating Commissioner and the
respondent are counsel-adversaries in another case, Civil Case No. R-33277. Finally, he
questions the imposition of a six-month suspension, which he claims to be harsh
considering that his private practice is his only source of income.15
After carefully examining the records, as well as the applicable laws and jurisprudence on
the matter, this Court is inclined to uphold the IBP's resolution.1âwphi1.nêt
In administrative cases, the requirement of notice and hearing does not connote full
adversarial proceedings, as "actual adversarial proceedings become necessary only for
clarification or when there is a need to propound searching questions to witnesses who
give vague testimonies."16 Due process is fulfilled when the parties were given reasonable
opportunity to be heard and to submit evidence in support of their arguments.17
In the case at bar, records show that respondent repeatedly sought the postponement of
the hearings, prompting the Investigating Commissioner to receive complainant's evidence
ex parte and to set the case for resolution after the parties have submitted their respective
memorandum. Hence:
"The records show that this is already the third postponement filed by respondent namely
December 12, 1996 (sic), January 3, 1996 and April 1, 1996.
The Commission for the last time, will cancel today's hearing and can no longer tolerate any
further postponement. Notify respondent by telegram for the hearing for (sic) April 22,
1996 at 2:00 P.M. Said hearing is intransferable in character.
In the meantime, complainant affirmed her complaint and likewise her witness, Allan
Echavia, also affirmed the contents of his affidavit and further stated that he had executed
the same and understood the contents thereof."18
It is by his own negligence that the respondent was deemed to have waived his right to
cross-examine the complainant and her witness. He cannot belatedly ask this Court to grant
new trial after he has squandered his opportunity to exercise his right.
Respondent's contention that the finding of the Investigating Committee was contrary to
the records and the complainant's own admission in CEB-18552 is without merit. It is true
that Atty. Aviola was Echavia's counsel-of-record in Civil Case No. 13666 as evidenced by
the certification from the clerk of court,19 and as admitted by the complainant in CEB-
18552, viz:
"ATTY. MADERAZO: (To witness- ON CROSS)
Q: Madam witness, you mentioned that the defendant in this case was the counsel of
Allan Echavia as early as August 20, 1993, wherein you learned for the first time of this fact
when you say he is counsel of Allan Echavia. (sic) You mean he is the counsel of record of
Allan Echavia in the Civil Case before Judge Dacudao? Is that what you mean?
A: What I learned was that Atty. Alviola was the counsel of Allan Echavia in the case
before Judge Dacudao but I heard Atty. Maderazo telling Allan Echavia not to admit that
Atty. Maderazo is appearing for me because he will be the one to coordinate with Allan's
case.
Q: So it is clear that the defendant in this case is not the counsel of record of Allan
Echavia. It was Atty. Alviola stated by you now?
A: Atty. Maderazo was not Allan Echavia's counsel but it was Atty. Alviola who was the
counsel of record of Allan Echavia."20
Nevertheless, the issue in this case is not whether the respondent also acted as the counsel-
of-record of Echavia. Rather, it is whether or not he had a direct hand in the preparation of
Echavia's Answer to the Amended Complaint.
To be guilty of representing conflicting interests, a counsel-of-record of one party need not
also be counsel-of-record of the adverse party. He does not have to publicly hold himself
as the counsel of the adverse party, nor make his efforts to advance the adverse party's
conflicting interests of record--- although these circumstances are the most obvious and
satisfactory proof of the charge. It is enough that the counsel of one party had a hand in
the preparation of the pleading of the other party, claiming adverse and conflicting
interests with that of his original client. To require that he also be counsel-of-record of the
adverse party would punish only the most obvious form of deceit and reward, with
impunity, the highest form of disloyalty.
Canon 6 of the Code of Professional Ethics states:
"It is the duty of a lawyer at the time of the retainer to disclose to the client the
circumstances of his relations to the parties and any interest in or in connection with the
controversy, which might influence the client in the selection of the counsel.
"It is unprofessional to represent conflicting interests, except by express consent of all
concerned given after a full disclosure of the facts. Within the meaning of this Canon, a
lawyer represents conflicting interests when in behalf of one of the clients, it is his duty to
contend for that which duty to another client requires him to oppose." (emphasis supplied)
An attorney owes his client undivided allegiance. Because of the highly fiduciary nature of
the attorney-client relationship, sound public policy dictates that a lawyer be prohibited
from representing conflicting interests or discharging inconsistent duties. He 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. Indeed, good faith and honest intention
on the part of the erring lawyer does not make this rule inoperative.21 The lawyer is an
officer of the court and his actions are governed by the uncompromising rules of
professional ethics. Thus:
"The relations of attorney and client is founded on principles of public policy, on good taste.
The question is not necessarily one of the rights of the parties, but as to whether the
attorney has adhered to proper professional standard. With these thoughts in mind, it
behooves attorneys, like Ceasar's wife, not only to keep inviolate the client's confidence,
but also to avoid the appearance of treachery and double-dealing. Only thus can litigants
be encouraged to entrust their secrets to their attorneys which is of paramount importance
in the administration of justice."22
The professional obligation of the lawyer to give his undivided attention and zeal for his
client's cause is likewise demanded in the Code of Professional Responsibility. Inherently
disadvantageous to his client's cause, representation by the lawyer of conflicting interests
requires disclosure of all facts and consent of all the parties involved. Thus:
"CANON 15- All lawyers shall observe candor, fairness and loyalty in all his dealings and
transactions with his clients.
xxx
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."
While the Resolution of the IBP is purely recommendatory, we find no reason to reverse
the same. In disciplinary proceedings against members of the bar, only clear preponderance
of evidence is required to establish liability. As long as the evidence presented by
complainant or that taken judicial notice of by the Court is more convincing and worthy of
belief than that which is offered in opposition thereto, the imposition of disciplinary
sanction is justified.23
A perusal of Echavia's Answer to the Amended Complaint shows that it indeed conflicts
with the complainant's claims. It reads:
"1. The allegations (sic) in Paragraph One (1) of the Complaint is admitted in so far as it
pertains to the personal circumstance and residence of the answering defendant. The rest
of the allegations in Paragraph One (1), and all the allegations in Paragraph Two (2) , THREE
(3), FOUR (4), FIVE (5), SIX (6), ELEVEN (11), TWELVE (12), and FOURTEEN (14), of the
Complaint are DENIED for lack of knowledge sufficient to form a belief as to the truth of
such allegations."24
By way of prayer, Echavia states:
"WHEREFORE, it is respectfully prayed that after hearing, judgment be rendered dismissing
plaintiff's complaint."25
Anent the authorship by the respondent of the document quoted above, the Investigating
Committee found the testimonies of the complainant and Echavia credible as opposed to
respondent's bare denial. As pointed out by Echavia, he was approached by Atty. Maderazo,
introduced himself as his lawyer and after some sessions in the latter's office, asked him to
return and sign a document which he later identified as the Answer to the Amended
Complaint.
The Investigating Committee found respondent's defense weak. Respondent did not bother
to present his secretary as witness, nor obtain her affidavit to prove his allegations. Instead,
he offered a convenient excuse--- that he cannot anymore locate his secretary.
Respondent argued that it was the complainant who asked him to prepare Echavia's Answer
to the Amended Complaint, after reaching an agreement whereby Echavia would testify in
favor of the complainant. After he declined the request, he claimed that it was the
complainant who prepared the document and asked his secretary to print the same. But as
shown, Echavia's Answer to the Amended Complaint was in no way favorable to the
complainant.
With the dismissal of Civil Case No. 13666, Echavia is practically off the hook. We cannot
find any reason why Echavia would commit perjury and entangle himself, once again, with
the law. He does not stand to profit at all by accusing the respondent falsely.
Furthermore, considering complainant's stature and lack of legal education, we can not see
how she could have prepared Echavia's Answer to the Amended Complaint and device a
legal maneuver as complicated as the present case.

Respondent's attack on the credibility of Investigating Commissioner Ingles to render an

impartial decision, having been an adversary in Civil Case No. R-33277, does not convince
us to grant new trial. This is the first time that respondent questions the membership of
Commissioner Ingles in the Investigating Committee. If respondent really believed in good
faith that Commissioner Ingles would be biased and prejudiced, he should have asked for
the latter's inhibition at the first instance. Moreover, we could not find any hint of
irregularity, bias or prejudice in the conduct of the investigation that would lead us to set it
aside.

Finally, we remind the respondent that the practice of law is not a property right but a mere
privilege, and as such, must bow to the inherent regulatory power of the Court to exact
compliance with the lawyer's public responsibilities.26 The suspension of the respondent's
privilege to practice law may result to financial woes. But as the guardian of the legal
profession, we are constrained to balance this concern with the injury he caused to the very
same profession he vowed to uphold with honesty and fairness.1âwphi1.nêt

IN VIEW WHEREOF, the Resolution of the IBP finding the respondent guilty of violating
Canon 6 of the Code of Professional Ethics, and Canon 15 and Rule 15.03 of the Code of
Professional Responsibility is affirmed. Respondent is suspended from the practice of law
for six (6) months with a stern warning that a similar act in the future shall be dealt with
more severely.

SO ORDERED.
A.C. No. 2040 March 4, 1998
IMELDA A. NAKPIL, complainant,
vs.
ATTY. CARLOS J. VALDES, respondent.
The friendship of JOSE NAKPIL and respondent CARLOS J. VALDES dates back to the '50s
during their school days in De La Salle and the Philippine Law School. Their closeness
extended to their families and respondent became the business consultant, lawyer and
accountant of the Nakpils.
In 1965, Jose Nakpil became interested in purchasing a summer residence in Moran Street,
Baguio City.1 For lack of funds, he requested respondent to purchase the Moran property
for him. They agreed that respondent would keep the property in trust for the Nakpils until
the latter could buy it back. Pursuant to their agreement, respondent obtained two (2) loans
from a bank (in the amounts of P65,000.00 and P75,000.00) which he used to purchase and
renovate the property. Title was then issued in respondent's name.
It was the Nakpils who occupied the Moran summer house. When Jose Nakpil died on July
8, 1973, respondent acted as the legal counsel and accountant of his widow, complainant
IMELDA NAKPIL. On March 9, 1976, respondent's law firm, Carlos J. Valdes & Associates,
handled the proceeding for the settlement of Jose's estate. Complainant was appointed as
administratrix of the estate.
The ownership of the Moran property became an issue in the intestate proceedings. It
appears that respondent excluded the Moran property from the inventory of Jose's estate.
On February 13, 1978, respondent transferred his title to the Moran property to his
company, the Caval Realty Corporation.
On March 29, 1979, complainant sought to recover the Moran property by filing with the
then Court of First Instance (CFI) of Baguio City an action for reconveyance with damages
against respondent and his corporation. In defense, respondent claimed absolute
ownership over the property and denied that a trust was created over it.
During the pendency of the action for reconveyance, complainant filed this administrative
case to disbar the respondent. She charged that respondent violated professional ethics
when he:
I. Assigned to his family corporation the Moran property (Pulong Maulap) which
belonged to the estate he was settling as its lawyer and auditor.
II. Excluded the Moran property from the "inventory of real estate properties" he
prepared for a client-estate and, at the same time, charged the loan secured to purchase
the said excluded property as a liability of the estate, all for the purpose of transferring the
title to the said property to his family corporation.
III. Prepared and defended monetary claims against the estate that retained him as
its counsel and auditor.2
On the first charge, complainant alleged that she accepted respondent's offer to serve as
lawyer and auditor to settle her husband's estate. Respondent's law firm then filed a
petition for settlement of the estate of the deceased Nakpil but did not include the Moran
property in the estate's inventory. Instead, respondent transferred the property to his
corporation, Caval Realty Corporation, and title was issued in its name. Complainant
accused respondent of maliciously appropriating the property in trust knowing that it did
not belong to him. She claimed that respondent has expressly acknowledged that the said
property belonged to the late Nakpil in his correspondences3 with the Baguio City Treasurer
and the complainant.
On the second charge, complainant alleged that respondent's auditing firm (C. J. Valdes &
Co., CPAs) excluded the Moran property from the inventory of her husband's estate, yet
included in the claims against the estate the amounts of P65,000.00 and P75,000.00, which
respondent represented as her husband's loans applied "probably for the purchase of a
house and lot in Moran Street, Baguio City."
As to the third charge, complainant alleged that respondent's law firm (Carlos J. Valdes and
Associates) filed the petition for the settlement of her husband's estate in court, while
respondent's auditing firm (C.J. Valdes & Co., CPAs) acted as accountant of both the estate
and two of its creditors. She claimed that respondent represented conflicting interests
when his accounting firm prepared the list of claims of creditors Angel Nakpil and ENORN,
Inc. against her husband's estate which was represented by respondent's law firm.
Complainant averred that there is no distinction between respondent's law and auditing
firms as respondent is the senior and controlling partner of both firms which are housed in
the same building.
We required respondent to answer the charges against him. In his ANSWER, 4 respondent
initially asserted that the resolution of the first and second charges against him depended
on the result of the pending action in the CFI for reconveyance which involved the issue of
ownership of the Moran property.
On the merit of the first charge, respondent reiterated his defense in the reconveyance
case that he did not hold the Moran property in trust for the Nakpils as he is its absolute
owner. Respondent explained that the Nakpils never bought back the Moran property from
him, hence, the property remained to be his and was rightly excluded from the inventory
of Nakpil's estate.
As to the second charge, respondent denied preparing the list of claims against the estate
which included his loans of P65,000.00 and P75,000.00 for the purchase and renovation of
the Moran property. In charging his loans against the estate, he stressed that the list drawn
up by his accounting firm merely stated that the loans in respondent's name were applied
"probably for the purchase of the house and lot in Moran Street, Baguio City." Respondent
insisted that this was not an admission that the Nakpils owned the property as the phrase
"probably for the purchase" did not imply a consummated transaction but a projected
acquisition.
Respondent also disclaimed knowledge or privity in the preparation of a letter (Exhibit "H")
of his accounting firm to the Baguio City treasurer remitting the real estate taxes for the
Moran property on behalf of the Nakpils. He contended that the letter could be a mere
error or oversight.
Respondent averred that it was complainant who acknowledged that they did not own the
Moran property for: (1) complainant's February 1979 Statement of Assets and Liabilities did
not include the said property, and; (2) complainant, as administratrix, signed the Balance
Sheet of the Estate where the Moran property was not mentioned.
Respondent admitted that complainant retained the services of his law and accounting
firms in the settlement of her husband's estate.5 However, he pointed out that he has
resigned from his law and accounting firms as early as 1974. He alleged that it was Atty.
Percival Cendaña (from the law firm Carlos Valdes & Associates) who filed the intestate
proceedings in court in 1976.
As to the third charge, respondent denied there was a conflict of interest when his law firm
represented the estate in the intestate proceedings while his accounting firm (C.J. Valdes &
Co., CPAs) served as accountant of the estate and prepared the claims of creditors Angel
Nakpil and ENORN, Inc. against the estate. He proffered the following reasons for his thesis:
First, the two claimants were closely related to the late Nakpil. Claimant ENORN, Inc. is a
family corporation of the Nakpils of which the late Nakpil was the President. Claimant Angel
Nakpil is a brother of the late Nakpil who, upon the latter's death, became the President of
ENORN, Inc. These two claimants had been clients of his law and accounting firms even
during the lifetime of Jose Nakpil. Second, his alleged representation of conflicting interests
was with the knowledge and consent of complainant as administratrix. Third, there was no
conflict of interests between the estate and the claimants for they had forged a modus
vivendi, i.e., that the subject claims would be satisfied only after full payment of the
principal bank creditors. Complainant, as administratrix, did not controvert the claims of
Angel Nakpil and ENORN, Inc. Complainant has started paying off the claims of Angel Nakpil
and ENORN, Inc. after satisfying the banks' claims. Complainant did not assert that their
claims caused prejudice to the estate. Fourth, the work of Carlos J. Valdes & Co. as common
auditor redounded to the benefit of the estate for the firm prepared a true and accurate
amount of the claim. Fifth, respondent resigned from his law and accounting firms as early
as August 15, 1974.6 He rejoined his accounting firm several years later. He submitted as
proof the SEC's certification of the filing of his accounting firm of an Amended Articles of
Partnership. Thus, it was not he but Atty. Percival Cendaña, from the firm Carlos J. Valdes
& Associates, who filed the intestate proceedings in court. On the other hand, the claimants
were represented by their own counsel Atty. Enrique O. Chan. Sixth, respondent alleged
that in the remote possibility that he committed a breach of professional ethics, he
committed such "misconduct" not as a lawyer but as an accountant who acted as common
auditor of the estate and its creditors. Hence, he should be held accountable in another
forum.
On November 12, 1979, complainant submitted her REPLY.7 She maintained that the
pendency of the reconveyance case is not prejudicial to the investigation of her disbarment
complaint against respondent for the issue in the latter is not the ownership of the Moran
property but the ethics and morality of respondent's conduct as a CPA-lawyer.
Complainant alleged that respondent's Annexes to his Reply (such as the Statement of
Assets & Liability of the Nakpils and the Balance Sheet of the Estate) which showed that
complainant did not claim ownership of the Moran property were all prepared by C.J.
Valdes & Co. as accountant of the estate of Jose Nakpil and filed with the intestate court by
C.J. Valdes & Associates as counsel for the estate. She averred that these Annexes were not
proofs that respondent owned the Moran property but were part of respondent's scheme
to remove the property from the estate and transfer it to his family corporation.
Complainant alleged that she signed the documents because of the professional counsel of
respondent and his firm that her signature thereon was required. Complainant charged
respondent with greed for coveting the Moran property on the basis of defects in the
documents he himself prepared..
Complainant urged that respondent cannot disown unfavorable documents (the list of
claims against the estate and the letter regarding Nakpil's payment of realty tax on the
Moran property) which were prepared by his law and accounting firms and invoke other
documents prepared by the same firms which are favorable to him. She averred that
respondent must accept responsibility not just for some, but for all the representations and
communications of his firms.
Complainant refuted respondent's claim that he resigned from his firms from March 9, 1976
to "several years later." She alleged that none of the documents submitted as evidence
referred to his resignation from his law firm. The documents merely substantiated his
resignation from his accounting firm.

In his REJOINDER,8 respondent insisted that complainant cannot hold him liable for
representing the interests of both the estate and the claimants without showing that his
action prejudiced the estate. He urged that it is not per se anomalous for respondent's
accounting firm to act as accountant for the estate and its creditors. He reiterated that he
is not subject to the jurisdiction of this Court for he acted not as lawyer, but as accountant
for both the estate and its claimants.
He alleged that his accounting firm merely prepared the list of claims of the creditors Angel
Nakpil and ENORN, Inc. Their claims were not defended by his accounting or law firm but
by Atty. Enrique Chan. He averred that his law firm did not oppose these claims as they
were legitimate and not because they were prepared by his accounting firm. He
emphasized that there was no allegation that the claims were fraudulent or excessive and
that the failure of respondent's law firm to object to these claims damaged the estate.
In our January 21, 1980 Resolution,9 we deferred further action on the disbarment case
until after resolution of the action for reconveyance between the parties involving the issue
of ownership by the then CFI of Baguio. Complainant moved for reconsideration on the
ground that the issue of ownership pending with the CFI was not prejudicial to her
complaint which involved an entirely different issue, i.e., the unethical acts of respondent
as a CPA-lawyer. We granted her motion and referred the administrative case to the Office
of the Solicitor General (OSG) for investigation, report and recommendation. 10
In 1983, the CFI of Baguio dismissed the action for reconveyance. The trial court ruled that
respondent held the Moran property in trust for the Nakpils but found that complainant
waived her right over it.
On appeal, the Court of Appeals reversed the trial court. The appellate court held that
respondent was the absolute owner of the Moran property. The Decision was elevated to
this Court.
On February 18, 1986, during the pendency of complainant's appeal to this Court, the OSG
submitted its Report 11 on the disbarment complaint. The OSG relied heavily on the
decision of the Court of Appeals then pending review by this Court. The OSG found that
respondent was not put on notice of complainant's claim over the property. It opined that
there was no trust agreement created over the property and that respondent was the
absolute owner thereof. Thus, it upheld respondent's right to transfer title to his family
corporation. It also found no conflict of interests as the claimants were related to the late
Jose Nakpil. The OSG recommended the dismissal of the administrative case.
Prefatorily, we note that the case at bar presents a novel situation as it involves the
disbarment of a CPA-lawyer for his demeanor in his accounting profession and law practice
in connection with the property of his client.
As a rule, a lawyer is not barred from dealing with his client but the business transaction
must be characterized with utmost honesty and good faith. 12 The measure of good faith
which an attorney is required to exercise in his dealings with his client is a much higher
standard than is required in business dealings where the parties trade at "arms length." 13
Business transactions between an attorney and his client are disfavored and discouraged
by the policy of the law. Hence, courts carefully watch these transactions to assure that no
advantage is taken by a lawyer over his client. This rule is founded on public policy for, by
virtue of his office, an attorney is in an easy position to take advantage of the credulity and
ignorance of his client. Thus, no presumption of innocence or improbability of wrongdoing
is considered in an attorney's favor. 14
In the case at bar, we cannot subscribe to the findings of the OSG in its Report. These
findings were based mainly on the decision of the Court
of Appeals in the action for reconveyance which was reversed by this Court in 1993. 15
As to the first two charges, we are bound by the factual findings of this Court in the
aforementioned reconveyance case. 16 It is well-established that respondent offered to the
complainant the services of his law and accounting firms by reason of their close
relationship dating as far back as the '50s. She reposed her complete trust in respondent
who was the lawyer, accountant and business consultant of her late husband. Respondent
and the late Nakpil agreed that the former would purchase the Moran property and keep
it in trust for the latter. In violation of the trust agreement, respondent claimed absolute
ownership over the property and refused to sell the property to complainant after the
death of Jose Nakpil. To place the property beyond the reach of complainant and the
intestate court, respondent later transferred it to his corporation.
Contrary to the findings of the OSG, respondent initially acknowledged and respected the
trust nature of the Moran property. Respondent's bad faith in transferring the property to
his family corporation is well discussed in this Court's Decision,17 thus:
. . . Valdes (herein respondent) never repudiated the trust during the lifetime of the late
Jose Nakpil. On the contrary, he expressly recognized it. . . . (H)e repudiated the trust when
(he) excluded Pulong Maulap from the list of properties of the late Jose Nakpil submitted
to the intestate court in 1973. . . .
xxx xxx xxx
The fact that there was no transfer of ownership intended by the parties . . . can be
bolstered by Exh. "I-2," an annex to the claim filed against the estate proceedings of the
late Jose Nakpil by his brother, Angel Nakpil, which was prepared by Carlos J. Valdes & Co.,
the accounting firm of herein respondent. Exhibit "I-2," which is a list of the application of
the proceeds of various FUB loans contracted as of 31 December 1973 by the late Jose
Nakpil, . . . contains the two (2) loans contracted in the name of respondent. If ownership
of Pulong Maulap was already transferred or ceded to Valdes, these loans should not have
been included in the list.
Indeed, as we view it, what the parties merely agreed to under the arrangement outlined
in Exh. "J" was that respondent Valdes would . . . "take over the total loan of P140,000.00
and pay all of the interests due on the notes" while the heirs of the late Jose Nakpil would
continue to live in the disputed property for five (5) years without remuneration save for
regular maintenance expenses. This does not mean, however, that if at the end of the five-
year period petitioner (Nakpil) failed to reimburse Valdes for his advances, . . . Valdes could
already automatically assume ownership of Pulong Maulap. Instead, the remedy of
respondents Carlos J. Valdes and Caval Realty Corporation was to proceed against the
estate of the late Jose M. Nakpil and/or the property itself." (emphasis supplied)
In the said reconveyance case, we further ruled that complainant's documentary evidence
(Exhibits "H", "J" and "L"), which she also adduced in this administrative case, should estop
respondent from claiming that he bought the Moran property for himself, and not merely
in trust for Jose Nakpil. 18
It ought to follow that respondent's act of excluding the Moran property from the estate
which his law firm was representing evinces a lack of fidelity to the cause of his client. If
respondent truly believed that the said property belonged to him, he should have at least
informed complainant of his adverse claim. If they could not agree on its ownership,
respondent should have formally presented his claim in the intestate proceedings instead
of transferring the property to his own corporation and concealing it from complainant and
the judge in the estate proceedings. Respondent's misuse of his legal expertise to deprive
his client of the Moran property is clearly unethical.
To make matters worse, respondent, through his accounting firm, charged the two loans of
P65,000.00 and P75,000.00 as liability of the estate, after said loans were obtained by
respondent for the purchase and renovation of the property which he claimed for himself.
Respondent seeks to exculpate himself from this charge by disclaiming knowledge or privity
in the preparation of the list of the estate's liabilities. He theorizes that the inclusion of the
loans must have been a mere error or oversight of his accounting firm. It is clear that the
information as to how these two loans should be treated could have only come from
respondent himself as the said loans were in his name. Hence, the supposed error of the
accounting firm in charging respondent's loans against the estate could not have been
committed without respondent's participation. Respondent wanted to "have his cake and
eat it too" and subordinated the interest of his client to his own pecuniary gain. Respondent
violated Canon 17 of the Code of Professional Responsibility which provides that a lawyer
owes fidelity to his client's cause and enjoins him to be mindful of the trust and confidence
reposed on him.
As regards the third charge, we hold that respondent is guilty of representing conflicting
interests. It is generally the rule, based on sound public policy, that an attorney cannot
represent adverse interests. It is highly improper to represent both sides of an issue. 19 The
proscription against representation of conflicting interests finds application where the
conflicting interests arise with respect to the same general matter 20 and is applicable
however slight such adverse interest may be. It applies although the attorney's intentions
and motives were honest and he acted in good faith. 21 However, representation of
conflicting interests may be allowed where the parties consent to the representation, after
full disclosure of facts. Disclosure alone is not enough for the clients must give their
informed consent to such representation. The lawyer must explain to his clients the nature
and extent of the conflict and the possible adverse effect must be thoroughly understood
by his clients. 22
In the case at bar, there is no question that the interests of the estate and that of its
creditors are adverse to each other. Respondent's accounting firm prepared the list of
assets and liabilities of the estate and, at the same time, computed the claims of two
creditors of the estate. There is clearly a conflict between the interest of the estate which
stands as the debtor, and that of the two claimants who are creditors of the estate. In fact,
at one instance, respondent's law firm questioned the claims of creditor Angel Nakpil
against the estate.
To exculpate himself, respondent denies that he represented complainant in the intestate
proceedings. He points out that it was one Atty. Percival Cendaña, from his law firm Carlos
J. Valdes & Associates, who filed the intestate case in court. However, the fact that he did
not personally file the case and appear in court is beside the point. As established in the
records of this case and in the reconveyance case, 23 respondent acted as counsel and
accountant of complainant after the death of Jose Nakpil. Respondent's defense that he
resigned from his law and accounting firms as early as 1974 (or two years before the filing
of the intestate case) is unworthy of merit. Respondent's claim of resignation from his law
firm is not supported by any documentary proof. The documents on record 24 only show
respondent's resignation from his accounting firm in 1972 and 1974. Even these documents
reveal that respondent returned to his accounting firm on July 1, 1976 and as of 1978, the
intestate proceedings for the settlement of Jose's estate had not yet been terminated. It
does not escape us that when respondent transferred the Moran property to his
corporation on February 13, 1978, the intestate proceedings was still pending in court.
Thus, the succession of events shows that respondent could not have been totally ignorant character is not only a prerequisite to admission to the bar but also a continuing
of the proceedings in the intestate case. requirement to the practice of law.

Respondent claims that complainant knew that his law firm Carlos J. Valdes & Associates
was the legal counsel of the estate 25 and his accounting firm, C.J. Valdes & Co., CPAs, was
the auditor of both the estate and the two claimants against it. 26 The fact, however, that
complainant, as administratrix, did not object to the set-up cannot be taken against her as
there is nothing in the records to show that respondent or his law firm explained the legal
situation and its consequences to complainant. Thus, her silence regarding the
arrangement does not amount to an acquiescence based on an informed consent.
We also hold that the relationship of the claimants to the late Nakpil does not negate the
conflict of interest. When a creditor files a claim against an estate, his interest is per se
adverse to the estate. As correctly pointed out by complainant, if she had a claim against
her husband's estate, her claim is still adverse and must be filed in the intestate
proceedings.
Public confidence in law and lawyers may be eroded by the irresponsible and improper
conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting in
a manner that would promote public confidence in the integrity of the legal profession.
Members of the Bar are expected to always live up to the standards embodied in the Code
of Professional Responsibility as the relationship between an attorney and his client is
highly fiduciary in nature and demands utmost fidelity and good faith.28 In the case at bar,
respondent exhibited less than full fidelity to his duty to observe candor, fairness and
loyalty in his dealings and transactions with his clients. 29
IN VIEW WHEREOF, the Court finds respondent ATTY. CARLOS J. VALDES guilty of
misconduct. He is suspended from the practice of law for a period of one (1) year effective
from receipt of this Decision, with a warning that a similar infraction shall be dealt with
more severely in the future.

Prescinding from these premises, respondent undoubtedly placed his law firm in a position Let copies of this Decision be furnished all courts, as well as the Integrated Bar of the
where his loyalty to his client could be doubted. In the estate proceedings, the duty of Philippines and the Office of the Bar Confidant.
respondent's law firm was to contest the claims of these two creditors but which claims
were prepared by respondent's accounting firm. Even if the claims were valid and did not SO ORDERED.
prejudice the estate, the set-up is still undesirable. The test to determine whether there is
a conflict of interest in the representation is probability, not certainty of conflict. It was
respondent's duty to inhibit either of his firms from said proceedings to avoid the
probability of conflict of interest.

Respondent advances the defense that assuming there was conflict of interest, he could
not be charged before this Court as his alleged "misconduct" pertains to his accounting
practice.

We do not agree. Respondent is a CPA-lawyer who is actively practicing both professions.

He is the senior partner of his law and accounting firms which carry his name. In the case
at bar, complainant is not charging respondent with breach of ethics for being the common
accountant of the estate and the two creditors. He is charged for allowing his accounting
firm to represent two creditors of the estate and, at the same time, allowing his law firm to
represent the estate in the proceedings where these claims were presented. The act is a
breach of professional ethics and undesirable as it placed respondent's and his law firm's
loyalty under a cloud of doubt. Even granting that respondent's misconduct refers to his
accountancy practice, it would not prevent this Court from disciplining him as a member of
the Bar. The rule is settled that a lawyer may be suspended or disbarred for ANY
misconduct, even if it pertains to his private activities, as long as it shows him to be wanting
in moral character, honesty, probity or good demeanor. 27 Possession of good moral
A.C. No. 3701 March 28, 1995
PHILIPPINE NATIONAL BANK, complainant,
vs.
ATTY. TELESFORO S. CEDO, respondent.
In a verified letter-complaint dated August 15, 1991, complainant Philippine National Bank
charged respondent Atty. Telesforo S. Cedo, former Asst. Vice-President of the Asset
Management Group of complainant bank with violation of Canon 6, Rule 6.03 of the Code
of Professional Responsibility, thus:
A lawyer shall not, after leaving government service, accept engagement or employment in
connection with any matter in which he had intervened while in said service.
by appearing as counsel for individuals who had transactions with complainant bank in
which respondent during his employment with aforesaid bank, had intervened.
Complainant averred that while respondent was still in its employ, he participated in
arranging the sale of steel sheets (denominated as Lots 54-M and 55-M) in favor of Milagros
Ong Siy for P200,000. He even "noted" the gate passes issued by his subordinate, Mr.
Emmanuel Elefan, in favor of Mrs. Ong Siy authorizing the pull-out of the steel sheets from
the DMC Man Division Compound. When a civil action arose out of this transaction between
Mrs. Ong Siy and complainant bank before the Regional Trial Court of Makati, Branch 146,
respondent who had since left the employ of complainant bank, appeared as one of the
counsels of Mrs. Ong Siy.
Similarly, when the same transaction became the subject of an administrative case filed by
complainant bank against his former subordinate Emmanuel Elefan, for grave misconduct
and dishonesty, respondent appeared as counsel for Elefan only to be later disqualified by
the Civil Service Commission.
Moreover, while respondent was still the Asst. Vice President of complainant’s Asset
Management Group, he intervened in the handling of the loan account of the spouses
Ponciano and Eufemia Almeda with complainant bank by writing demand letters to the
couple. When a civil action ensued between complainant bank and the Almeda spouses as
a result of this loan account, the latter were represented by the law firm "Cedo, Ferrer,
Maynigo & Associates" of which respondent is one of the Senior Partners.
In his Comment on the complaint, respondent admitted that he appeared as counsel for
Mrs. Ong Siy but only with respect to the execution pending appeal of the RTC decision. He
alleged that he did not participate in the litigation of the case before the trial court. With
respect to the case of the Almeda spouses, respondent alleged that he never appeared as
counsel for them. He contended that while the law firm "Cedo Ferrer, Maynigo &
Associates" is designated as counsel of record, the case is actually handled only by Atty.
Pedro Ferrer. Respondent averred that he did not enter into a general partnership with
Atty. Pedro Ferrer nor with the other lawyers named therein. They are only using the
aforesaid name to designate a law firm maintained by lawyers, who although not partners,
maintain one office as well as one clerical and supporting staff. Each one of them handles
their own cases independently and individually receives the revenues therefrom which are
not shared among them.
In the resolution of this Court dated January 27, 1992, this case was referred to the
Integrated Bar of the Philippines (IBP), for investigation, report and recommendation.
During the investigation conducted by the IBP, it was discovered that respondent was
previously fined by this Court in the amount of P1,000.00 in connection with G.R. No. 94456
entitled "Milagros Ong Siy vs. Hon. Salvador Tensuan, et al." for forum shopping, where
respondent appeared as counsel for petitioner Milagros Ong Siy "through the law firm of
Cedo Ferrer Maynigo and Associates."
The IBP further found that the charges herein against respondent were fully substantiated.
Respondent's averment that the law firm handling the case of the Almeda spouses is not a
partnership deserves scant consideration in the light of the attestation of complainant's
counsel, Atty. Pedro Singson, that in one of the hearings of the Almeda spouses' case,
respondent attended the same with his partner Atty. Ferrer, and although he did not enter
his appearance, he was practically dictating to Atty. Ferrer what to say and argue before
the court. Furthermore, during the hearing of the application for a writ of injunction in the
same case, respondent impliedly admitted being the partner of Atty. Ferrer, when it was
made of record that respondent was working in the same office as Atty. Ferrer.
Moreover, the IBP noted that assuming the alleged set-up of the firm is true, it is in itself a
violation of the Code of Professional Responsibility (Rule 15.02) since the client’s secrets
and confidential records and information are exposed to the other lawyers and staff
members at all times.
From the foregoing, the IBP found a deliberate intent on the part of respondent to devise
ways and means to attract as clients former borrowers of complainant bank since he was
in the best position to see the legal weaknesses of his former employer, a convincing factor
for the said clients to seek his professional service. In sum, the IBP saw a deliberate sacrifice
by respondent of his ethics in consideration of the money he expected to earn.
The IBP thus recommended the suspension of respondent from the practice of law for 3
years.
The records show that after the Board of Governors of the IBP had, on October 4, 1994,
submitted to this Court its Report and recommendation in this case, respondent filed a
Motion for Reconsideration dated October 25, 1994 of the recommendation contained in
the said Report with the IBP Board of Governors. On December 12, 1994, respondent also
filed another "Motion to Set Hearing" before this Court, the aforesaid Motion for
Reconsideration. In resolving this case, the Court took into consideration the aforesaid
pleadings.
In addition to the findings of the IBP, this Court finds this occasion appropriate to emphasize
the paramount importance of avoiding the representation of conflicting interests. In the
similar case of Pasay Law and Conscience Union, Inc. vs. Paz, (95 SCRA 24 [1980]) where a
former Legal Officer and Legal Prosecutor of PARGO who participated in the investigation
of the Anti-Graft case against Mayor Pablo Cuneta later on acted as counsel for the said
Mayor in the same anti-graft case, this Court, citing Nombrado vs. Hernandez (26 SCRA 13
119681) ruled:
The Solicitor General is of the opinion, and we find no reason to disagree with him, that
even if respondent did not use against his client any information or evidence acquired by
him as counsel it cannot be denied that he did become privy to information regarding the
ownership of the parcel of land which was later litigated in the forcible entry case, for it
was the dispute over the land that triggered the mauling incident which gave rise to the
criminal action for physical injuries. This Court's remarks in Hilado vs. David, 84 Phil. 571,
are apropos:
"Communications between attorney and client are, in a great number of litigations, a
complicated affair, consisting of entangled relevant and irrelevant, secret and well-known
facts. In the complexity of what is said in the course of dealings between an attorney and
client, inquiry of the nature suggested would lead to the revelation, in advance of the trial,
of other matters that might only further prejudice the complainant's cause."
Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the
appearance of treachery and double dealing. Only thus can litigants. be encouraged to
entrust their secrets to their attorneys which is of paramount importance in the
administration of justice.
The foregoing disquisition on conflicting interest applies with equal force and effect to
respondent in the case at bar. Having been an executive of complainant bank, respondent
now seeks to litigate as counsel for the opposite side, a case against his former employer
involving a transaction which he formerly handled while still an employee of complainant,
in violation of Canon 6 of the Canons of Professional Ethics on adverse influence and
conflicting interests, to wit:
It is unprofessional to represent conflicting interests, except by express conflicting consent
of all concerned given after a full disclosure of the facts. Within the meaning of this canon,
a lawyer represents conflicting interest when, in behalf on one client, it is his duty to
contend for that which duty to another client requires him to oppose.
ACCORDINGLY, this Court resolves to SUSPEND respondent ATTY. TELESFORO S. CEDO from
the practice of law for THREE (3) YEARS, effective immediately.
Let copies of this resolution be furnished the Integrated Bar of the Philippines and all courts
in Metro Manila.
SO ORDERED.

Whatever may be said as to whether or not respondent utilized against his former client
information given to him in a professional capacity, the mere fact of their previous
relationship should have precluded him from appearing as counsel for the other side in the
forcible entry case. In the case of Hilado vs. David, supra, this Tribunal further said:

Hence the necessity of setting the existence of the bare relationship of attorney and client
as the yardstick for testing incompatibility of interests. This stern rule is designed not alone
to prevent the dishonest practitioner from fraudulent conduct, but as well to protect the
honest lawyer from unfounded suspicion of unprofessional practice. . . . It is founded on
principles of public policy, of good taste. As has been said in another case, the question is
not necessarily one of the rights of the parties, but as to whether the attorney has adhered
to proper professional standard. With these thoughts in mind, it behooves attorney, like