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1. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION A.C. No.

5303 June 15, 2006

HUMBERTO C. LIM, JR., in behalf of PENTA RESORTS CORPORATION/Attorney-inFact of LUMOT A. JALANDONI, Complainant, vs. ATTY. NICANOR V. VILLAROSA, Respondent. RESOLUTION CORONA, J.: Humberto C. Lim Jr.1 filed a verified complaint for disbarment against respondent Atty. Nicanor V. Villarosa on July 7, 2000.2 On February 19, 2002, respondent moved for the consolidation of the said complaint with the following substantially interrelated cases earlier filed with the First Division of this Court: 1. Administrative Case No. 5463: Sandra F. Vaflor v. Atty. Adoniram P. Pamplona and Atty. Nicanor V. Villarosa; 2. Administrative Case No. 5502: Daniel A. Jalandoni v. Atty. Nicanor V. Villarosa. In a resolution dated February 24, 2003, this Court considered Administrative Case No. 5463 closed and terminated.3 On February 4, 2004, considering the pleadings filed in Administrative Case No. 5502, the Court resolved: (a) to NOTE the notice of the resolution dated September 27, 2003 of the Integrated Bar of the Philippines dismissing the case against respondent for lack of merit; and (b) to DENY, for lack of merit, the petition filed by complainant praying that the resolution of the Integrated Bar of the Philippines dismissing the instant case be reviewed and that proper sanctions be imposed upon respondent.4 No motion for reconsideration of the aforesaid denial in Administrative Case No. 5502 appears in the records. The Court is now called upon to determine the merits of this remaining case (A.C. No. 5303) against respondent. The complaint read: AS FIRST CAUSE OF ACTION

xxx xxx xxx - II That respondent is a practicing lawyer and a member of the Integrated Bar of the Philippines, Bacolod City, Negros Occidental Chapter. That sometime on September 19, 1997, Lumot A. Jalandoni, Chairman/President of PRC was sued before RTC, Branch 52 in Civil Case No. 979865, RE: Cabiles et al. vs. Lumot Jalandoni, et al. The latter engaged the legal services of herein respondent who formally entered his appearance on October 2, 1997 as counsel for the defendants Lumot A. Jalandoni/Totti Anlap Gargoles. Respondent as a consequence of said Attorney-Client relationship represented Lumot A. Jalandoni et al in the entire proceedings of said case. Utmost trust and confidence was reposed on said counsel, hence delicate and confidential matters involving all the personal circumstances of his client were entrusted to the respondent. The latter was provided with all the necessary information relative to the property in question and likewise on legal matters affecting the corporation (PRC) particularly [involving] problems [which affect] Hotel Alhambra. Said counsel was privy to all transactions and affairs of the corporation/hotel. - III That it was respondent who exclusively handled the entire proceedings of afore-cited Civil Case No. 97-9865 [and] presented Lumot A. Jalandoni as his witness prior to formally resting his case. However, on April 27, 1999 respondent, without due notice prior to a scheduled hearing, surprisingly filed a Motion to withdraw as counsel, one day before its scheduled hearing on April 28, 1999. A careful perusal of said Motion to Withdraw as Counsel will conclusively show that no copy thereof was furnished to Lumot A. Jalandoni, neither does it bear her conformity. No doubt, such notorious act of respondent resulted to (sic) irreparable damage and injury to Lumot A. Jalandoni, et al since the decision of the court RTC, Branch 52 proved adverse to Lumot A. Jalandoni, et al. The far reaching effects of the untimely and unauthorized withdrawal by respondent caused irreparable damage and injury to Lumot A. Jalandoni, et al; a highly meritorious case in favor of his client suddenly [suffered] unexpected defeat. - IV That the grounds alleged by respondent for his withdrawal as counsel of Lumot A. Jalandoni, et al. was that he is [a] retained counsel of Dennis G. Jalbuena and the Fernando F. Gonzaga, Inc. It was Dennis G. Jalbuena who recommended him to be the counsel of Lumot A. Jalandoni, et al. It is worthy to note that from the outset, respondent already knew that Dennis G. Jalbuena is the son-in-law of Lumot A. Jalandoni being married to her eldest daughter, Carmen J. Jalbuena. The other directors/officers of PRC were comprised of the eldest sibling of the remaining children of Lumot A. Jalandoni made in accordance with her wishes, with the exception of Carmen J. Jalbuena, the only daughter registered as one of the incorporators of PRC, obviously, being the author of the registration itself [sic]. Respondent further stated that he cannot refuse to represent Dennis G. Jalbuena in the case filed against the latter before the City Prosecutors Office by PRC/Lumot A. Jalandoni due to an alleged retainership agreement with said Dennis G.

Jalbuena. [He] likewise represented Carmen J. Jalbuena and one Vicente Delfin when PRC filed the criminal complaint against them. On April 06, 1999, twenty-one (21) days prior to respondents filing of his Motion to Withdraw as Counsel of Lumot A. Jalandoni, et al., respondent entered his appearance with Bacolod City Prosecutor OIC-Vicente C. Acupan, through a letter expressly stating that effective said date he was appearing as counsel for both Dennis G. Jalbuena and Carmen J. Jalbuena and Vicente Delfin in the "Estafa" case filed by the corporation (PRC) against them. Simply stated, as early as April 6, 1999 respondent already appeared for and in behalf of the Sps. Carmen and Dennis Jalbuena/Vicente Delfin while concurrently representing Lumot A. Jalandoni, et al. in Civil Case No. 97-9865. However, despite being fully aware that the interest of his client Lumot A. Jalandoni [holding an equivalent of Eighty-two (82%) percent of PRCs shares of stocks] and the interest of PRC are one and the same, notwithstanding the fact that Lumot A. Jalandoni was still his client in Civil Case No. 97-9862, respondent opted to represent opposing clients at the same time. The corporations complaint for estafa (P3,183,5525.00) was filed against the Sps. Dennis and Carmen J. Jalbuena together with UCPB bank manager Vicente Delfin. Succeeding events will show that respondent instead of desisting from further violation of his [lawyers] oath regarding fidelity to his client, with extreme arrogance, blatantly ignored our laws on Legal Ethics, by palpably and despicably defending the Sps. Dennis and Carmen J. Jalbuena in all the cases filed against them by PRC through its duly authorized representatives, before the Public Prosecutors Office, Bacolod City (PP vs. Sps. Dennis and Carmen J. Jalbuena for False Testimony/Perjury, viol. of Art. 183 RPC under BC I.S. No. 2000-2304; viol. of Art. 363, 364, 181 and 183 RPC under BC I.S. 2000-2343, PP vs. Carmen J. Jalbuena for viol. of Art. 315 under BC I.S. 20002125 and various other related criminal cases against the Sps. Dennis and Carmen Jalbuena). AS SECOND CAUSE OF ACTION xxx xxx xxx -Ixxx xxx xxx There is no dispute that respondent was able to acquire vast resources of confidential and delicate information on the facts and circumstances of [Civil Case No. 97-9865] when Lumot A. Jalandoni was his client which knowledge and information was acquired by virtue of lawyerclient relationship between respondent and his clients. Using the said classified information which should have been closely guarded respondent did then and there, willfully, unlawfully, feloniously conspired and confabulated with the Sps. Dennis and Carmen J. Jalbuena in concocting the despicable and fabricated charges against his former clients denominated as PP vs. Lumot A. Jalandoni, Pamela J. Yulo, Cristina J. Lim and Leica J. Lim for viol. of Art. 172 of Revised Penal Code due to a board resolution executed by the corporation which the Sps. Jalbuena, with the assistance of herein respondent, claimed to have been made without an actual board meeting due to an alleged lack of quorum, [among other things]. Were it not for said fiduciary relation between client and lawyer, respondent will not be in a position to furnish his conspirator spouses with confidential information on Lumot A. Jalandoni/PRC, operator of Alhambra Hotel.

- II Adding insult to injury, respondent opted to deliberately withhold the entire case file including the marked exhibits of the Cabiles case for more than three (3) months after his untimely unilateral withdrawal therefrom, despite repeated demands from [his] client. On July 26, 1999, capitalizing on his knowledge of the indispensability of said documents particularly the marked exhibits, which deadline to file the formal offer of exhibits was continually impressed upon the new counsel by the court, respondent suddenly interposed an amount of five thousand (P5,000.00) pesos as consideration prior to or simultaneous to the turnover of said documents. [On] July 29, 1999, left with no other alternative owing to the urgency of the situation, PRC issued Check No. 2077686 for P5,000.00 in payment thereof. This was duly received by respondents office on the same date. Such dilatory tactics employed by respondent immensely weakened the case of Lumot A. Jalandoni eventually resulting to (sic) an adverse decision against [her]. Further demonstrating before this Honorable Court the notoriety of respondent in representing conflicting interest which extended even beyond the family controversy was his improper appearance in court in Civil Case No. 99-10660, RE: Amy Albert Que vs. Penta Resorts Corp., this time favoring the party opponent of defendant who is even outside the family circle. During the pre-trial hearing conducted on May 5, 1999, while still [holding] exclusive possession of the entire case file of his client in Civil Case No. 97-9865, respondent brazenly positioned himself beside Atty. Adoniram P. Pamplona, counsel of plaintiff [in] a suit against his client Lumot A. Jalandoni/PRC, coaching said counsel on matters [he was privy to] as counsel of said client. Facts mentioned by said counsel of the plaintiff starting from the last par. of page 25 until and including the entire first par. of page 26 were the exact words dictated by respondent. The entire incident was personally witnessed by herein complainant [who was] only an arms length away from them during the hearing. However, the particular portion showing the said irregular acts of respondent was deliberately excluded by the court stenographer from the transcript, despite her detailed recollection and affirmation thereof to herein complainant. This prompted the new counsel of Lumot A. Jalandoni/PRC to complain to the court why Atty. Nicanor Villarosa was coaching Atty. Pamplona in such proceedings. Said corrections were only effected after repeated demands to reflect the actual events which [transpired] on said pre-trial. 5 (emphasis ours) In an addendum to the July 4, 2000 complaint, Lim also pointed to certain acts of respondent which allegedly violated the Rules of Court perpetration of falsehood and abuse of his influence as former public prosecutor. These supposedly affected the status of the cases that Lim filed against the clients of respondent.6 In a motion to dismiss dated October 30, 2000, respondent claimed that the complainant violated Circular No. 48-2000 because, in his verification, Lim stated: 3. That [he] prepared this instant complaint for disbarment against Atty. Nicanor V. Villarosa, read its contents, the same are all true and correct to [his] own personal knowledge and belief.7 (emphasis ours)

Section 4, Rule 7 of the Rules of Court explicitly provides that: SEC. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. (5a) A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains verification based on "information and belief" or upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an unsigned pleading. (As amended, A.M. 00-2-10, May 1, 2000.) (emphasis ours) While the Rules provide that an unsigned pleading produces no legal effect, 8 the court may, in its discretion, allow such deficiency to be remedied if it appears that the same was due to mere inadvertence and not intended for delay. 9 We find that Lim was not shown to have deliberately filed the pleading in violation of the Rules. In his comment dated December 1, 2000, respondent, reiterating his ground for the dismissal of the complaint, added: [that] complainant Humberto C. Lim, Jr. has not only violated the Rule on Civil Procedure but he was/is NOT duly authorize[d] by the Penta Resorts Corp. (PRC) nor [by] Lumot A. Jalandoni to file this complaint against [him]. Neither [was Lim] a proper party to file this complaint. This fact is an additional ground to have his case dismissed because Humberto C. Lim Jr. exceeded whatever authority was granted to him as embodied in a resolution and the Special Power of Attorney allegedly granted to him by the complainants.10 To bolster his assertion that the complaint against him was unfounded, respondent presented the following version in his defense: FACTS OF THE CASE xxx xxx xxx That Mrs. Jalandoni has two sons-in-law, namely Dennis G. Jalbuena married to her daughter, Carmen J. Jalbuena, and Humberto C. Lim Jr., the herein complainant married to her daughter, Cristina J. Lim. That Mrs. Lumot Jalandoni organized a corporation namely the Penta Resorts Corporation (PRC) where she owned almost ninety seven percent (97%). In other words, in reality, Penta Resorts Corporation is a single proprietorship belonging to Mrs. Jalandoni. That the only property of the corporation is as above-stated, the Alhambra Hotel, constructed solely through the effort of the spouses Jalbuena on that parcel of land now claimed by the Cabiles family.

That sometime on the year 1997 the case above-cited (Civil Case No. 97-9865) was filed before the court against the sisters. That [he], being RETAINED counsel of the spouses Dennis and Carmen J. Jalbuena was RECOMMENDED by the spouses to the sisters to answer the complaint filed against them. II. That as counsel to the sisters, [he] filed a Motion for Extension Of Time To File Answer and ultimately, [he] filed an Answer With Counter-Claim And Prayer For Issuance Of Writ Of Preliminary Injunction. That reading the Answer it is clear that the defense of the sisters totally rest on public documents (the various titles issued to the land in question because of the series [of changes] in ownership) and the sisters and their parents actual occupation and possession thereof. xxx xxx xxx Mr. Lim[s] accusation against [him] in the light of the above-facts is the best evidence of Humberto C. Lim, Jr.s penchant for exaggeration and distortion of the truth. Since the defense of the sisters to retain ownership of the land in question is based on PUBLIC documents, what delicate and confidential matters involving personal circumstances of the sisters allegedly entrusted to [him], is Mr. Humberto C. Lim, Jr. talking about in paragraphs I and II of his Complaint? What [privity] to all transactions and affairs of the corporation/hotel is he referring to? Whatever transactions the corporation may have been involved in or [may be getting involved into], is totally immaterial and irrelevant to the defense of the sisters. There was nothing personal [about the] circumstances of the sisters nor transactions of the corporation [which were] discussed. The documents being offered as evidence, [he] reiterate[s] for emphasis, are public; the presumption is that the whole world knows about them. That [he] [also] vehemently den[ies] another distorted allegation of Mr. Lim that [he] represented Mrs. Jalandoni [in] the entire proceedings of [the] case. [Lim] himself attested that [he] [filed] [his] Motion to Withdraw As Counsel, dated April 26, 1999 , before the trial court, sometime on April 27, 1999. How then could [he] have represented Mrs. Jalandoni for [the] entire proceedings of the case? Further, Mr. Lim intentionally hid from this Honorable Court the important fact that [his] Motion to Withdraw was APPROVED by the trial court because of the possibility of a conflict of interest. xxx xxx xxx. 11 Respondent discredited Lims claim that he deliberately withheld the records of the cited civil case. He insisted that it took him just a few days, not three months, to turn over the records of the case to Lim.12 While he admitted an oversight in addressing the notice of the motion to withdraw as counsel to Mrs. Totti Anlap Gargoles instead of Mrs. Jalandoni at Hotel Alhambra, he maintained that it was the height of hypocrisy to allege that Mrs. Jalandoni was not aware of his motion to withdraw13 since Mrs. Gargoles is Mrs. Jalandonis sister and Hotel Alhambra is

owned by PRC which, in turn, actually belongs to Mrs. Jalandoni. Respondent also argued that no prejudice was suffered by Mrs. Jalandoni because she was already represented by Atty. Lorenzo S. Alminaza from the first hearing date. 14 In fact, respondent contended, it was he who was not notified of the substitution of counsels.15 As to the bill of P 5,000, respondent stated: That Mr. Lim begrudge[s] [him] for billing Mrs. Jalandoni Five Thousand (Php5,000.00) Pesos. Mr. Humberto C. Lim Jr. conveniently forgets that the net worth of the property together with its improvements, under litigation in that Cabiles, et al. vs. Gargoles et al. case, is a minimum of THIRTY MILLION (Php30,000,000.00) PESOS then, and more so now. [He] cannot find any law which prohibits a counsel from billing a client for services in proportion to the services he rendered.16 In view of these developments, respondent was adamant that: the only real question to be answered in this complaint is why Mr. Lim so consistently [determined] to immerse the Jalandoni family [in] a series of criminal and civil suits and to block all attempts to reconcile the family by prolonging litigations, complaints and filing of new ones in spite of the RESOLUTION of the corporation and the UNDERTAKING of the members.17 On June 18, 2001, the Court resolved to refer the complaint to the Integrated Bar of the Philippines (IBP) for investigation. Commissioner Lydia A. Navarro made the following report and recommendation: xxx xxx xxx After going over the [pieces of evidence] submitted by the parties[,] the undersigned noted that from the onset, PRC had a case wherein respondent was its counsel. Later on, complainant had a case against spouses Jalbuena where the parties were related to each other and the latter spouses were represented by the respondent as their retained counsel; after respondent had allegedly withdrawn as counsel for the complainant in Civil Case No. 97-9865. Being the husband of one of the complainants which respondent himself averred in his answer, it is incumbent upon Humberto Lim Jr. to represent his wife as one of the representatives of PRC and Alhambra Hotel in the administrative complaint to protect not only her interest but that of the [familys]. From the facts obtaining, it is evident that complainant had a lawyer-client relationship with the respondent before the latter [was] retained as counsel by the Spouses Jalbuena when the latter were sued by complainants representative. We cannot disregard the fact that on this situation for some reason or another there existed some confidentiality and trust between complainants and respondent to ensure the successful defense of their cases.

Respondent for having appeared as counsel for the Spouses Jalbuena when charged by respondents former client Jalandoni of PRC and Alhambra Hotel, represented conflicting interests in violation of the Canon of Professional Responsibility. As such therefore, the Undersigned has no alternative but to respectfully recommend the suspension of the respondent from the practice of law for a period of six (6) months from receipt hereof. RESPECTFULLY SUBMITTED. Pasig City, June 20, 2002.18 The IBP Board of Governors (Board), however, reversed the recommendation of the investigating commissioner and resolved to dismiss the case on August 3, 2002. 19 Lumot A. Jalandoni filed a motion for reconsideration (MR) on October 18, 2002 but the Board denied the MR since it no longer had jurisdiction to consider and resolve a matter already endorsed to this Court.20 Before delving into the core issues of this case, we need to address some preliminary matters. Respondent argues that the alleged resolution of PRC and the special power of attorney given by Lumot A. Jalandoni to Humberto did not contemplate the filing of an administrative complaint. 21 Citing the Rules of Court, respondent said that: [s]uch complaints are personal in nature and therefore, the filing of the same, cannot be delegated by the alleged aggrieved party to any third person unless expressly authorized by law. We must note, however, the following: SECTION 1. How instituted. Proceedings for disbarment, suspension or discipline of attorneys may be taken by the Supreme Court motu propio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person. The complaint shall state clearly and concisely the facts complained of and shall be supported by affidavits or persons having personal knowledge of the facts therein alleged and/or by such documents a may substantiate said facts. The IBP Board of Governors may, motu propio or upon referral by the Supreme Court or by a Chapter Board of Officers, or at the instance of any person, initiate and prosecute proper charges against any erring attorneys.22 (emphasis ours) Complaints against members of the Bar are pursued to preserve the integrity of the legal profession, not for private vendetta. Thus, whoever has such personal knowledge of facts constituting a cause of action against erring lawyers may file a verified complaint with the Court or the IBP.23 Corollary to the public interest in these proceedings is the following rule:

SEC. 11. Defects. No defect in a complaint, notice, answer, or in the proceeding or the Investigators Report shall be considered as substantial unless the Board of Governors , upon considering the whole record, finds that such defect has resulted or may result in a miscarriage of justice, in which event the Board shall take such remedial action as the circumstances may warrant, including invalidation of the entire proceedings.24 (emphasis ours) Respondent failed to substantiate his allegation that Lims complaint was defective in form and substance, and that entertaining it would result in a miscarriage of justice. For the same reason, we will no longer put in issue the filing at the onset of a motion to dismiss by respondent instead of an answer or comment.25 The core issues before us now are: 1. whether there existed a conflict of interest in the cases represented and handled by respondent, and 2. whether respondent properly withdrew his services as counsel of record in Civil Case No. 97-9865. Conflict Of Interest Petitioners alleged that as an offshoot of representing conflicting interests, breach of attorneyclient confidentiality and deliberate withholding of records were committed by respondent. To effectively unravel the alleged conflict of interest, we must look into the cases involved. In Civil Case No. 97-9865, respondent represented Lumot A. Jalandoni and Totti Anlap Gargoles. This was a case for the recovery of possession of property involving Hotel Alhambra, a hotel owned by PRC. In BC I.S. No. 99-2192, Lim v. Vicente Delfin, Spouses Dennis and Carmen Jalbuena , respondent was counsel for Delfin and the spouses Jalbuena. In this case, plaintiff Cristina Lim sued the spouses Jalbuena and Delfin on the basis of two checks issued by PRC for the construction of Hotel Alhambra.26 The corporate records allegedly reflected that the contractor, AAQ Sales and Construction (AAQSC), was already paid in full yet Amy Albert Que of AAQSC still filed a collection case against PRC for an unpaid balance. 27 In her complaint-affidavit, Cristina averred: 11. That it was respondent Carmen J. Jalbuena, who took advantage of [her] signatures in blank in DBP Check Nos. 0865590 and 0865591, and who filled up the spaces of the payee, date and amount without the knowledge and consent of any officer of the corporation and [herself], after which she caused the delivery of the same checks to her husband Dennis Jalbuena, who encashed without [their] knowledge and consent, and received the proceeds of the same checks (as evidenced by his signature in receipt of payment on the dorsal side of the said checks) with the indispensable participation and cooperation of respondent Vicente B. Delfin, the Asst. Vice President and Branch Head of UCPB.28

Notably, in his comment, respondent stated: There was a possibility of conflict of interest because by this time, or one month before [he] filed [his] Motion to Withdraw, Mrs. Jalandoni /Penta Resorts Corporation, Mr. Lim, through his wife, Cristina J. Lim, by another counsel, Atty. Lorenzo S. Alminaza , filed a criminal complaint against the spouses Dennis and Carmen J. Jalbuena on March 26, 1999 under BCI.S. Case No. 99-2192.29 Similarly, in BC I.S. Nos. 00-1370, 2000-2304, 2000-2343, 00-2125, 00-2230, 00-880, respondent positioned himself against PRCs interests. And, in Civil Case No. 99-10660, a collection case against PRC, Atty. Alminaza of PRC was alarmed by the appearance of respondent at the table in court for AAQSCs counsel.30 Canon 15 of the Code of Professional Responsibility (CPR) highlights the need for candor, fairness and loyalty in all the dealings of lawyers with their clients . Rule 15.03 of the CPR aptly provides: 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. It is only upon strict compliance with the condition of full disclosure of facts that a lawyer may appear against his client; otherwise, his representation of conflicting interests is reprehensible. 31 Conflict of interest may be determined in this manner: There is 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.32 (emphasis ours) The rule on conflict of interests 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.33 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, and also whether he will be called upon in his new relation to use against his first client any knowledge acquire in the previous employment. The first part of the rule refers to cases in which the opposing parties are present clients either in the same action or in a totally unrelated case; the second part pertains to those in which the adverse party against whom the attorney appears is his former client in a matter which is related, directly or indirectly, to the present controversy.34 (emphasis ours) The rule prohibits a lawyer from representing new clients whose interests oppose those of a former client in any manner, whether or not they are parties in the same action or in totally unrelated cases. The cases here directly or indirectly involved the parties connection to PRC,

even if neither PRC nor Lumot A. Jalandoni was specifically named as party-litigant in some of the cases mentioned. An attorney owes to his client undivided allegiance. After being retained and receiving the confidences of the client, he cannot, without the free and intelligent consent of his client, act both for his client and for one whose interest is adverse to, or conflicting with that of his client in the same general matter. The prohibition stands even if the adverse interest is very slight; neither is it material that the intention and motive of the attorney may have been honest .35 (emphasis ours) The representation by a lawyer of conflicting interests, in the absence of the written consent of all parties concerned after a full disclosure of the facts, constitutes professional misconduct which subjects the lawyer to disciplinary action.36 Even respondents alleged effort to settle the existing controversy among the family members 37 was improper because the written consent of all concerned was still required. 38 A lawyer who acts as such in settling a dispute cannot represent any of the parties to it.39 Withdrawal As Counsel In Civil Case No. 97-9865 The next bone of contention was the propriety of respondents withdrawal as counsel for Lumot A. Jalandoni in Civil Case No. 97-9865 to fulfill an alleged retainership agreement with the spouses Jalbuena in a suit by PRC, through Cristina Lim, against the Jalbuenas and Delfin (BC I.S. No. 99-2192). In his December 1, 2000 comment, respondent stated that it was he who was not notified of the hiring of Atty. Alminaza as the new counsel in that case and that he withdrew from the case with the knowledge of Lumot A. Jalandoni and with leave of court. The rule on termination of attorney-client relations may be summarized as follows: The relation of attorney and client may be terminated by the client, by the lawyer or by the court, or by reason of circumstances beyond the control of the client or the lawyer. The termination of the attorney-client relationship entails certain duties on the part of the client and his lawyer.40 Accordingly, it has been held that the right of an attorney to withdraw or terminate the relation other than for sufficient cause is considerably restricted. Canon 22 of the CPR reads: Canon 22 A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances. An attorney may only retire from a case either by written consent of his client or by permission of the court after due notice and hearing, in which event the attorney should see to it that the name of the new lawyer is recorded in the case. 41 A lawyer who desires to retire from an action without the written consent of his client must file a petition for withdrawal in court.42 He must serve a copy of his petition upon his client and the adverse party at least three days before the date set for hearing, otherwise the court may treat the application as a "mere scrap of paper ."43 Respondent made no such move. He admitted that he withdrew as counsel on April 26, 1999,

which withdrawal was supposedly approved by the court on April 28, 1999. The conformity of Mrs. Jalandoni was only presumed by Atty. Villarosa because of the appearance of Atty. Alminaza in court, supposedly in his place. [A client] may discharge his attorney at any time with or without cause and thereafter employ another lawyer who may then enter his appearance. Thus, it has been held that a client is free to change his counsel in a pending case and thereafter retain another lawyer to represent him. That manner of changing a lawyer does not need the consent of the lawyer to be dismissed. Nor does it require approval of the court.44 The appearance of Atty. Alminaza in fact was not even to substitute for respondent but to act as additional counsel.45 Mrs. Jalandonis conformity to having an additional lawyer did not necessarily mean conformity to respondents desire to withdraw as counsel. Respondents speculations on the professional relationship of Atty. Alminaza and Mrs. Jalandoni find no support in the records of this case. Respondent should not have presumed that his motion to withdraw as counsel 46 would be granted by the court. Yet, he stopped appearing as Mrs. Jalandonis counsel beginning April 28, 1999, the first hearing date. No order from the court was shown to have actually granted his motion for withdrawal. Only an order dated June 4, 1999 had a semblance of granting his motion: When this case was called for hearing Atty. Lorenzo Alminaza appeared for the defendants considering that Atty. Nicanor Villarosa has already withdrawn his appearance in this case which the Court considered it to be approved as it bears the conformity of the defendants.47 (emphasis ours) That Mrs. Jalandoni continued with Atty. Alminazas professional engagement on her behalf despite respondents withdrawal did not absolve the latter of the consequences of his unprofessional conduct, specially in view of the conflicting interests already discussed. Respondent himself stated that his withdrawal from Civil Case No. 97-9865 was due to the "possibility of a conflict of interest."48 Be that as it may, the records do not support the claim that respondent improperly collected P5,000 from petitioner. Undoubtedly, respondent provided professional services to Lumot A. Jalandoni. Furthermore, there is no evidence that the documents belonging to Mrs. Jalandoni were deliberately withheld. The right of an attorney to retain possession of a clients documents, money or other property which may have lawfully come into his possession in his professional capacity, until his lawful fees and disbursements have been fully paid, is well-established.49 Finally, we express our utter dismay with Lims apparent use of his wifes community tax certificate number in his complaint for disbarment against respondent. 50 This is not, however, the forum to discuss this lapse. WHEREFORE, in view of the foregoing, respondent Atty. Nicanor V. Villarosa is hereby found GUILTY of violating Canon 15 and Canon 22 of the Code of Professional Responsibility and is SUSPENDED from the practice of law for one (1) year, effective upon receipt of this

decision, with a STERN WARNING that a repetition of the same or similar acts will be dealt with more severely. Let a copy of this resolution be entered into the records of respondent and furnished to the Office of the Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the Philippines, for their information and guidance. SO ORDERED.

2. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION ADM. CASE NO. 6876 March 7, 2008

HEIRS OF LYDIO "JERRY" FALAME, namely: MELBA FALAME, LEO FALAME and JERRY FALAME, petitioners, vs. ATTY. EDGAR J. BAGUIO, respondent. RESOLUTION TINGA, J.: On Petition for Review1 is the Resolution of the Integrated Bar of the Philippines (IBP) Board of Governors dismissing the disbarment complaint filed by the Heirs of Lydio "Jerry" Falame (complainants) against Atty. Edgar J. Baguio (respondent), docketed as CBD Case No. 04-1191. In their Complaint2 against respondent, complainants alleged that on 15 July 1991, their father, the late Lydio "Jerry" Falame (Lydio), engaged the services of respondent to represent him in an action for forcible entry docketed as Civil Case No. A-2694 (the first civil case) and entitled "Heirs of Emilio T. Sy, represented by Anastacia Velayo Vda. De Sy and Belen V. Sy vs. Lydio 'Jerry' Falame, Raleigh Falame and Four (4) John Does," in which Lydio was one of the defendants.3 Complainants recounted that respondent, as counsel for the defendants, filed the answer to the complaint in the first civil case. Subsequently, when the parties to the first civil case were required to file their respective position papers, respondent used and submitted in evidence the following: (1) a special power of attorney dated 1 July 1988 executed by Lydio in favor of his brother, Raleigh Falame, appointing the latter to be his attorney-in-fact; and (2) the affidavit of Raleigh Falame dated 23 July 1988, executed before respondent, in which Raleigh stated that Lydio owned the property subject of the first civil case.4

Complainants claimed that even after the Municipal Trial Court of Dipolog City had ruled in favor of the defendants in the first civil case, Lydio retained the services of respondent as his legal adviser and counsel for his businesses until Lydio's death on 8 September 1996.5 However, on 23 October 2000, in representation of spouses Raleigh and Noemi Falame, respondent filed a case against complainants allegedly involving the property subject of the first civil case, entitled "Spouses Rally F. Falame and Noemi F. Falame v. Melba A. Falame, Leo A. Falame, Jerry A. Falame, Jr., Sugni Realty Holdings and Development Corporations, their representatives, agents and persons acting in their behalf" and docketed as Civil Case No. 5568 (the second civil case) before the Regional Trial Court of Dipolog City, Branch 6. The complaint sought the declaration of nullity of the deed of sale, its registration in the registry of deeds, Transfer Certificate of Title No. 20241 issued as a consequence of the registration of the deed of sale, and the real estate mortgage on the said property. Alternatively, it prayed for specific performance and reconveyance or legal redemption and damages with preliminary injunction and restraining order.6 Firstly, complainants maintained that by acting as counsel for the spouses Falame in the second civil case wherein they were impleaded as defendants, respondent violated his oath of office and duty as an attorney. Plainly, they contended that the spouses Falame's interests are adverse to those of his former client, Lydio.7 Secondly, complainants claimed that respondent knowingly made false statements of fact in the complaint in the second civil case to mislead the trial court. In so doing, respondent violated paragraph (d), Section 208 of Rule 138 of the Rules of Court,9 complainants asserted further. Lastly, complainants alleged that the second civil case is a baseless and fabricated suit which respondent filed as counsel for complainants' uncle against the heirs of respondent's deceased client. Specifically, they averred that respondent filed the case for the sole purpose of retaining, maintaining and/or withholding the possession of the subject property from complainants who are its true owners. Complainants concluded that respondent violated paragraph (g), Section 20 10 of Rule 138 of the Rules of Court.11 In his Answer with Motion to Dismiss,12 respondent controverted complainants' allegations. He emphasizes that it was only Raleigh Falame who personally engaged his legal services for him and on Lydio's behalf and that, in fact, it was Raleigh who paid him the attorney's fees. He also stated that he signed the jurat in Raleigh's affidavit, which was submitted as evidence in the first civil case, believing to the best of his knowledge that there is good ground to support it. Insisting that he did not betray the confidence reposed in him by Lydio as the latter's counsel in the first civil case, respondent maintained that he did not reveal or use any fact he acquired knowledge of during the existence of the attorney-client relation in the first civil case as he had never even conferred with nor talked to Lydio in the first place. Respondent likewise contended that he did not knowingly make any misleading or untruthful statement of fact in the complaint in the second civil case and neither did he employ any means inconsistent with truth and honor in the hearing of the case.13

Respondent vigorously averred that Lydio had not retained him as counsel in any case or transaction. Stressing the long interval of twelve years separating the termination of the first civil case and his acceptance of the second civil case, respondent pointed out that the first civil case was not between Lydio and Raleigh but rather between the heirs of Emilio T. Sy on one hand and Lydio and Raleigh on the other where physical possession of property was at stake. Respondent further averred that in contrast the second civil case is one involving the spouses Raleigh and Noemi Falame as plaintiffs, and Melba, Leo and Jerry Jr., all surnamed Falame, and Sugni Realty Holdings and Development Corporation, as defendantsa case which arose from the wrongful acts committed by Melba, Leo and Jerry Jr. after Lydio's death.14 Respondent maintained that since the second civil case was still pending before the trial court, the IBP had no jurisdiction over the instant administrative case. He added that complainants filed this administrative case when Raleigh could no longer testify in his own favor as he had died a year earlier.15 In their Position Paper16 dated 7 September 2004, in addition to their previous charges against respondent, complainants claimed that respondent violated Rule 15.03 17 of the Code of Professional Responsibility when he represented the cause of the spouses Falame against that of his former client, Lydio.18 On 25 June 2005, the IBP Board of Governors passed Resolution No. XVI-2005-167 adopting and approving Investigating Commissioner Winston D. Abuyuan's report and recommendation for the dismissal of this administrative case, thus:19 x x x The charge lacks specification as to what part of the lawyer's oath was violated by the respondent and what confidence was disclosed. The complainants may have in mind the prohibition against disclosure of secret information learned in confidence, but there is no specification in the complaint what secret or information learned in confidence under Civil Case No. A-2694 was disclosed or will be disclosed by respondent in Civil Case No. 5568. In administrative complaints for disbarment or suspension against lawyers, the complainant must specify in the affidavit-complaint the alleged secrets or confidential information disclosed or will be disclosed in the professional employment ( Uy v. Gonzalez, 426 SCRA 422; 431). In the absence of such specification, the complaint must fail. In the complaint, there is no specific charge against respondent for violation of Canon 15, Rule 15.03 of the Code of Professional Responsibility about the prohibition against representation of conflicting interest. So, the allegation in paragraph 1, page 8 and 9 of complainants' position paper stating: With all due respect, it is submitted that respondent violated Canon 15, Rule 15.03 of the Code of Professional Responsibility" cannot be countenanced. The reason being that it is an elementary principle of due process to which the respondent is entitled that only those charged in the complaint can be proved by the complainants. A charge not specified in the complaint cannot be proved (Uy v. Gonzales, id.) x x x But still this charge will not proper for lack of sufficient bases.

xxx Civil Case No. 5568, which was commenced on 03 October 2000, or three years since the complainants became owners of Lydio Falame's properties, is a suit against the complainants, not as representatives of Lydio Falame, but as owners of their respective aliquot interests in the property in question (Gayon v. Gayon, 36 SCRA 104; 107-108). The complainants are sued not on the basis of the acts, rights, obligations and interest of Lydio Falame on the material possession of the improvements found on Lot 345 litigated in Civil Case No. A-2694 nor even on such land itself, but rather on the facts alleged in the second amended and supplemental complaint which give rise to their cause of action against them. While the complainants could not specify under what circumstances the respondent committed [the] alleged breach of confidence, breach of secrecy or revelation of secret or confidential information[,] the respondent has shown that he did not commit any violation of such duties or obligations of an attorney. It is clear that only Raleigh Falame engaged the legal services of the respondent for his and Lydio Falame's defense in Civil Case No. A-2694. xxx The other allegations of the complainants that the respondent violated paragraph (d), Section 20 of Rule 139, Rules of Court, and his lawyer's oath when he allegedly betrayed the trust and confidence of his former client by denying knowledge of the fact that the land was owned by Lydio Falame and when he did not disclose to the Court that at one time his present clients categorically declared and unconditionally recognized the full ownership of the late Lydio Falame and complainant Melba Falame over subject matter of both cases equally lacks evidentiary basis. xxx It is beyond the competence of the complainants to conclude and is outside the jurisdiction of this Honorable Commission to rule as to whether or nor (sic) the complaint in Civil Case No.5568 is baseless or fabricated. It is only the Honorable Court which has the exclusive jurisdiction to determine the same and cannot be the subject of an administrative complaint against the respondent. xxx WHEREFORE, premises considered, it is respectfully recommended that this complaint be dismissed on grounds of prescription, the same having been filed four (4) years after the alleged misconduct took place and for lack of merit. RESPECTFULLY SUBMITTED.20

Dissatisfied, complainants filed the instant petition for review under Rule 45 of the Rules of Court reiterating their allegations in the complaint and their position paper. 21 They likewise assert that the IBP erred in holding that the instant administrative complaint had been filed out of time since it was filed on 16 January 2004, or three (3) years, four (4) months and sixteen (16) days after the second civil case was filed on 23 October 2000. 22 In addition, in their Consolidated Comment (should be Consolidated Reply),23 complainants invoke the Court's ruling in Frias v. Bautista-Lozada24to support their contention that administrative complaints against members of the bar do not prescribe.25 In his Comment,26 respondent principally maintains that the charges imputed to him have never been proven by clear, convincing and satisfactory evidence which is the quantum of proof required in administrative cases against lawyers, and that complainants have the burden to prove their accusations as he enjoys the presumption of innocence. 27 Respondent likewise asserts that in accusing him of violation of Rule 15.03 of the Code of Professional Responsibility only in their position paper and in the instant petition, complainants infringed his right to due process and to be informed of the nature and cause of accusation against him.28 There is merit in the petition. At the outset, the Court holds that the instant administrative action is not barred by prescription. As early as 1947, the Court held in Calo, Jr. v. Degamo,29 to wit: The ordinary statutes of limitation have no application to disbarment proceedings, nor does the circumstance that the facts set up as a ground for disbarment constitute a crime, prosecution for which in a criminal proceeding is barred by limitation, affect the disbarment proceeding x x x (5 Am. Jur. 434)30 This doctrine was reaffirmed in the relatively recent case of Frias v. Bautista-Lozada31where the Court held that Rule VII, Section 1 of the Rules of Procedure of the CBD-IBP, which provides for a prescriptive period for the filing of administrative complaints against lawyers, should be struck down as void and of no legal effect for being ultra vires.32 Prescinding from the unavailability of the defense of prescription, the Court concurs with the Investigating Commissioner's opinion that some of the charges raised by complainants in their complaint are unsubstantiated. There is, however, sufficient basis to hold respondent accountable for violation of Rule 15.03 of the Code of Professional Responsibility. While this charge was not raised in the initiatory pleading, it was put forward in complainants' position paper filed with the IBP and in the petition filed with the Court. In fact, respondent proffered his defenses to the charge in his position paper before the IBP and likewise in his comment before the Court. In his very first pleading before the IBP, the answer with motion to dismiss, he denied having Lydio as his client. Such absence of attorney-client relationship is the essential element of his defense to the charge of conflict of interest, as articulated in his subsequent submissions.

The Court, therefore, rules and so holds that respondent has been adequately apprised of and heard on the issue. In administrative cases, the requirement of notice and hearing does not connote full adversarial proceedings. Actual adversarial proceedings only become necessary for clarification when there is a need to propound searching questions to witnesses who give vague testimonies. Due process is fulfilled when the parties were given reasonable opportunity to be heard and to submit evidence in support of their arguments.33 Rule 15.03 of the Code of Professional Responsibility provides: A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client. 34 The test is whether, on behalf of one client, it is the lawyer's duty to contest for that which his duty to another client requires him to oppose or when the possibility of such situation will develop. 35 The 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. 36 In addition, the rule holds even if the inconsistency is remote or merely probable or the lawyer has acted in good faith and with no intention to represent conflicting interests.37 The rule concerning conflict of interest prohibits a lawyer from representing a client if that representation will be directly adverse to any of his present or former clients. In the same way, a lawyer may only be allowed to represent a client involving the same or a substantially related matter that is materially adverse to the former client only if the former client consents to it after consultation. The rule is grounded in the fiduciary obligation of loyalty. 38 In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the client's case, including the weak and strong points of the case. The nature of that relationship is, therefore, one of trust and confidence of the highest degree. 39 The termination of attorney-client relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. The client's confidence once reposed should not be divested by mere expiration of professional employment. Even after the severance of the relation, a lawyer should not do anything which will injuriously affect his former client in any matter in which he previously represented him nor should he disclose or use any of the client's confidences acquired in the previous relation.40 In relation to this, Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed on him. His highest and most unquestioned duty is to protect the client at all hazards and costs even to himself.41 The protection given to the client is perpetual and does not cease with the termination of the litigation, nor is it affected by the party's ceasing to employ the attorney and retaining another, or by any other change of relation between them. It even survives the death of the client.42

In the case at bar, respondent admitted having jointly represented Lydio and Raleigh as defendants in the first civil case. Evidently, the attorney-client relation between Lydio and respondent was established despite the fact that it was only Raleigh who paid him. The case of Hilado v. David43tells us that it is immaterial whether such employment was paid, promised or charged for.44 As defense counsel in the first civil case, respondent advocated the stance that Lydio solely owned the property subject of the case. In the second civil case involving the same property, respondent, as counsel for Raleigh and his spouse, has pursued the inconsistent position that Raleigh owned the same property in common with Lydio, with complainants, who inherited the property, committing acts which debase respondent's rights as a co-owner. The fact that the attorney-client relation had ceased by reason of Lydio's death or through the completion of the specific task for which respondent was employed is not reason for respondent to advocate a position opposed to that of Lydio. 45 Precedents tell us that even after the termination of his employment, an attorney may not act as counsel against his client in the same general matter, even though, while acting for his former client, he acquired no knowledge which could operate to his client's disadvantage in the subsequent adverse employment. 46 And while complainants have never been respondent's clients, they derive their rights to the property from Lydio's ownership of it which respondent maintained in the first civil case. For representing Raleigh's cause which is adverse to that of his former clientRaleigh's supposed co-ownership of the subject property respondent is guilty of representing conflicting interests. Having previously undertaken joint representation of Lydio and Raleigh, respondent should have diligently studied and anticipated the potential conflict of interest. Accordingly, disciplinary action is warranted. 47 Heretofore, respondent is enjoined to look at any representation situation from "the point of view that there are possible conflicts"; and further, "to think in terms of impaired loyalty" that is to evaluate if his representation in any way will impair loyalty to a client. 48 Considering, however, that this is respondent's first offense, the Court resolves to reprimand respondent, with admonition to observe a higher degree of fidelity in the practice of his profession.49 WHEREFORE, respondent Atty. Edgar J. Baguio is found GUILTY of representing conflicting interests and meted out the penalty of REPRIMAND. He is further admonished to observe a higher degree of fidelity in the practice of his profession and to bear in mind that a repetition of the same or similar acts will be dealt with more severely. SO ORDERED.

3.FIRST DIVISION

FELICITAS S. QUIAMBAO,
Complainant,

Adm. Case No. 6708


(CBD Case No. 01-874)

Present:

DAVIDE, JR., C.J., (Chairman),

- versus -

QUISUMBING, SANTIAGO, CARPIO, and AZCUNA, JJ.

ATTY. NESTOR A. BAMBA ,


Respondent.

Promulgated:

August 25, 2005

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X

RESOLUTION

DAVIDE, JR., C.J.:

We are aware of the hapless fact that there are not enough lawyers to serve an exploding population. This unfortunate state of affairs, however, will not seize this Court from exercising its disciplinary power over lawyers culpable of serious indiscretions. The incidence of public force must be deployed to bear upon the community to eventually forge a legal profession that provides quality, ethical, accessible, and cost-effective legal service to our people and whose members are willing and able to answer the call to public service.

In

this

administrative

case

for

disbarment,

complainant

Felicitas S. Quiambao charges respondent Atty. Nestor A. Bamba with violation of the Code of Professional Responsibility for representing conflicting interests when the latter filed a case against her while he was at that time representing her in another case, and for committing other acts of disloyalty and double-dealing.

From June 2000 to January 2001, the complainant was the president and managing director of Allied Investigation Bureau, Inc. (AIB), a family-owned corporation engaged in providing security and investigation services. She avers that she procured the legal services of the respondent not only for the corporate affairs of AIB but also for her personal case. Particularly, the respondent acted as her counsel of record in an ejectment case against Spouses Santiago and Florita Torroba filed by her on 29 December 2000 before the Metropolitan Trial Court (MeTC) of Paraaque City, which was docketed as Civil Case No. 11928. She paid attorneys fees for

respondents legal services in that case. [1] About six months after she resigned as AIB president, or on 14 June 2001, the respondent filed on behalf of AIB a complaint for replevin and damages against her before the MeTC of Quezon City for the purpose of recovering from her the car of AIB assigned to her as a service vehicle. This he did without withdrawing as counsel of record in the ejectment case, which was then still pending. [2]

Apart from the foregoing litigation matter, the complainant, in her Position Paper, charges the respondent with acts of disloyalty and double-dealing. She avers that the respondent proposed to her that she organize her own security agency and that he would assist her in its organization, causing her to resign as president of AIB. The respondent indeed assisted her in December 2000 in the formation of another security agency, Quiambao Risk Management Specialists, Inc., (QRMSI), which was later registered under complainants name, with the respondent as a silent partner represented by his associate Atty. Gerardo P. Hernandez. The respondent was paid attorneys fees for his legal services in organizing and incorporating QRMSI. He also planned to steal or pirate some of the more important clients of AIB. While serving as legal counsel for AIB and a silent partner of QRMSI, he convinced complainants brother Leodegario Quiambao to organize another security agency, San Esteban Security Services, Inc. (SESSI) where he (the respondent) served as its incorporator, director, and president. The respondent and Leodegario then illegally diverted the funds of AIB to fund the incorporation of SESSI, and likewise planned to eventually close down the operations of AIB and transfer the business to SESSI. [3]

For his part, the respondent admits that he represented the complainant in the aforementioned ejectment case and later represented AIB in the replevin case against her. He, however,

denies that he was the personal lawyer of the complainant, and avers that he was made to believe that it was part of his function as counsel for AIB to handle even the personal cases of its officers. Even assuming that the complainant confided to him privileged information about her legal interests, the ejectment case and the replevin case are unrelated cases involving different issues and parties and, therefore, the privileged information which might have been gathered from one case would have no use in the other. At any rate, it was the complainant herself who insisted that he stay as her counsel despite the perceived differences among her, her brother, and AIB over the motor vehicle subject of the replevin case. against AIB.[4] The complainant even asked him to assist her in her monetary claims

The

respondent

also

denies

the

charge

raised

by

the

complainant in her position paper that he agreed to be a silent partner of QRMSI through his nominee, Atty. Gerardo P. Hernandez, who was his former law partner. He declined complainants offer to assume that role and suggested Atty. Hernandez in his place; thus, 375 shares of stock were registered in Atty. Hernandezs name as consideration of his (Atty. Hernandezs) legal services as corporate secretary and legal counsel of QRMSI. The respondent also denies that he convinced complainants brother Leodegario to organize

another security agency and that the funds of AIB were unlawfully diverted to SESSI. It was to complement the business of AIB, which was then in danger of collapse, that SESSI was established. Leodegarios wife and her son have the effective control over SESSI. Respondents subscribed shareholdings in SESSI comprise only 800 shares out of 12,500 subscribed shares. He serves AIB and SESSI in different capacities: as legal counsel of the former and as president of the latter.[5]

In his Report and Recommendation [6] dated 31 August 2004, the investigating commissioner of the IBP found the respondent guilty of representing conflicting interests based on the following undisputed facts: first, the respondent was still complainants counsel of record in the ejectment case when he filed, as legal counsel of AIB, the replevin case against her; and second, the respondent was still the legal counsel of AIB when he advised the complainant on the incorporation of another security agency, QRMSI, and recommended his former law partner, Atty. Gerardo Hernandez, to be its corporate secretary and legal counsel and also when he conferred with Leodegario to organize another security agency, SESSI, where the respondent became an incorporator, stockholder, and president. Thus, the investigating commissioner recommended that the respondent be suspended from the practice of law for one year.

The

IBP

Board

of

Governors report

adopted and

and

approved

the but

investigating

commissioners

recommendation,

reduced the penalty from one year to a stern reprimand. [7]

The issue in this case is whether the respondent is guilty of misconduct for representing conflicting interests in contravention of the basic tenets of the legal profession.

Rule 15.03, Canon 5 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. This prohibition is founded on principles of public policy and good taste.[8] In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the clients case, including the weak and strong points of the case. The nature of that relationship is, therefore, one of trust and confidence of the highest degree.[9] It behooves lawyers not only to keep inviolate the clients 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 of paramount importance in the administration of justice. [10]

In broad terms, lawyers are deemed to represent conflicting interests when, in behalf of one client, it is their duty to contend for that which duty to another client requires them to oppose. [11] Developments in jurisprudence have particularized various tests to determine whether a lawyers conduct lies within this proscription.

One test is whether a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same time, to oppose that claim for the other client. [12] Thus, if a lawyers argument for one client has to be opposed by that same lawyer in arguing for the other client, there is a violation of the rule.

Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty.[13] Still another test is whether the lawyer would be called upon in the new relation to use against a former client any confidential information acquired through their connection or previous employment.[14]

The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of them would affect the performance of the duty of undivided fidelity to both clients.[15]

In this case, it is undisputed that at the time the respondent filed the replevin case on behalf of AIB he was still the counsel of record of the complainant in the pending ejectment case. We do not sustain respondents theory that since the ejectment case and the replevin case are unrelated cases fraught with different issues, parties, and subject matters, the prohibition is inapplicable. His representation of opposing clients in both cases, though unrelated, obviously constitutes conflict of interest or, at the least, invites suspicion of double-dealing. While the respondent may assert that the complainant expressly consented to his continued representation in the ejectment case, the respondent failed to show that he fully disclosed the facts to both his clients and he failed to present any written consent of the complainant and AIB as required under Rule 15.03, Canon 15 of the Code of Professional Responsibility.

Neither can we accept respondents plea that he was dutybound to handle all the cases referred to him by AIB, including the personal cases of its officers which had no connection to its corporate affairs. That the representation of conflicting interest is in good Moreover, lawyers are not faith and with honest intention on the part of the lawyer does not make the prohibition inoperative. [16] obliged to act either as an adviser or advocate for every person who may wish to become their client. They have the right to decline such employment, subject, however, to Canon 14 of the Code of Professional Responsibility. [17] Although there are instances where lawyers cannot decline representation, [18] they cannot be made to

labor under conflict of interest between a present client and a prospective one.[19]

Additionally, in his position paper, the respondent alleges that when the complainant invited the respondent to join QRMSI, he vehemently refused to join them due to his perception of conflicting interest as he was then (and still is at present) the Legal Counsel of AIB, which is also a security agency. [ 2 0 ] To bolster his allegation, he invoked the affidavits of complainants witnesses which contained statements of his apprehension of conflict of interest should he join QRMSI. [ 2 1 ]

Surprisingly, despite his apprehension or awareness of a possible conflict of interest should he join QRMSI, the respondent later allowed himself to become an incorporator, stockholder, and president of SESSI, which is also a security agency. He justified his act by claiming that that while both AIB and SESSI are engaged in security agency business, he is serving in different capacities. As the in-house legal counsel of AIB, he serves its legal interest the parameter of which evolves around legal matters such as protecting the legal rights and interest of the corporation; conducting an investigation or a hearing on violations of company rules and regulations of their office employees and security guards; sending demand letters in collection cases; and representing the corporation in any litigation for or against it. And as president of SESSI, he serves the operational aspects of the business such as how does it operate[], how much do they price their services, what kind or how

do they train[] their security guards, how they solicit clients. Thus, conflict of interest is far-fetched. Moreover, the respondent argues that the complainant, not being a stockholder of AIB and SESSI, has no right to question his alleged conflict of interest in serving the two security agencies. [ 2 2 ]

While the complainant lacks personality to question the alleged conflict of interests on the part of the respondent in serving both security agencies, we cannot just turn a blind eye to respondents act. It must be noted that the proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter however slight the adverse interest may be. It applies even if the conflict pertains to the lawyers private activity or in the performance of a function in a nonprofessional capacity. [ 2 3 ] In the process of determining whether there is a conflict of interest, an important criterion is probability, not certainty, of conflict.

Since the respondent has financial or pecuniary interest in SESSI, which is engaged in a business competing with his clients, and, more importantly, he occupies the highest position in SESSI, one cannot help entertaining a doubt on his loyalty to his client AIB. This kind of situation passes the second test of conflict of interest, which is whether the acceptance of a new relationship would prevent the full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or doubledealing in the performance of that duty. The close relationship of the

majority stockholders of both companies does not negate the conflict of interest. Neither does his protestation that his shareholding in SESSI is a mere pebble among the sands.

In view of all of the foregoing, we find the respondent guilty of serious misconduct for representing conflicting interests.

Furthermore, it must be noted that Republic Act No. 5487, otherwise known as the Private Security Agency Law , prohibits a person from organizing or having an interest in more than one security agency. From respondents position paper, it can be culled that Leodegario Quiambao is the president and managing director of AIB, holding 60% of the outstanding shares; while his four other siblings who are permanent residents in the United States own the remaining 40%. [ 2 4 ] This prohibition notwithstanding, the respondent organized SESSI, with Leodegarios wife and son as majority stockholders holding about 70% of the outstanding shares and with him (the respondent), as well as the rest of the stockholders, holding minimal shares. [ 2 5 ] In doing so, the respondent virtually allowed It must be Leodegario and the latters wife to violate or circumvent the law by having an interest in more than one security agency. noted that in the affidavit [ 2 6 ] of Leodegarios wife, she mentioned of their conjugal property. In the absence of evidence to the contrary, the property relation of Leodegario and his wife can be presumed to be that of conjugal partnership of gains; hence, the majority shares in AIB and SESSI are the conjugal property of Leodegario and his wife, thereby placing themselves in possession of an interest in more than

one security agency in contravention of

R.A. No. 5487.

Thus, in

organizing SESSI, the respondent violated Rule 1.02, Canon 1 of the Code of Professional Responsibility, which mandates lawyers to promote respect for the law and refrain from counseling or abetting activities aimed at defiance of the law.

As to the recommendation that the penalty be reduced from a suspension of one year to a stern warning, we find the same to be without basis. We are disturbed by the reduction made by the IBP Board of Governors of the penalty recommended by the investigating commissioner without clearly and distinctly stating the facts and reasons on which that reduction is based.

Section 12(a), Rule 139-B of the Rules of Court reads in part as follows:

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.

We may consider the resolution of the IBP Board of Governors as a memorandum decision adopting by reference the report of the

investigating commissioner. change therefor. in the

However, we look with disfavor the penalty without any explanation

recommended

Again, we remind the IBP Board of Governors of the

importance of the requirement to announce in plain terms its legal reasoning, since the requirement that its decision in disciplinary proceedings must state the facts and the reasons on which its decision is based is akin to what is required of the decisions of courts of record.[27] The reasons for handing down a penalty occupy no lesser station than any other portion of the ratio.

In similar cases where the respondent was found guilty of representing conflicting interests a penalty ranging from one to three years suspension was imposed. [28] In this case, we find that a suspension from the practice of law for one year is warranted.

WHEREFORE , respondent Atty. Nestor A. Bamba is hereby held GUILTY of violation of Rule 15.03 of Canon 15 and Rule 1.02 of Canon 1 of the Code of Professional Responsibility. He is SUSPENDED from the practice of law for a period of ONE (1) YEAR effective from receipt of this Resolution, with a warning that a similar infraction in the future shall be dealt with more severely.

Let copies of this Resolution be furnished to the Office of the Bar Confidant and the Integrated Bar of the Philippines.

SO ORDERED.

4. FIRST DIVISION

LETICIA GONZALES, Complainant,

A.C. No. 6836

Present: PANGANIBAN, Chairman, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, and CHICO-NAZARIO, JJ. Promulgated: C.J.,

- versus -

ATTY. CABUCANA, Respondent.

MARCELINO

January 23, 2006

x----------------------------------------------------------- x

RESOLUTION

AUSTRIA-MARTINEZ, J.:

Before this Court is a complaint filed by Leticia Gonzales (Gonzales) praying that Atty. Marcelino Cabucana, (respondent) be disbarred for representing conflicting interests. On January 8, 2004, Gonzales filed a petition before the Integrated Bar of the Philippines (IBP) alleging that: she was the complainant in a case for sum of money and damages filed before the Municipal Trial Court in Cities (MTCC) of Santiago City, docketed as Civil Case No. 1-567 where she was represented by the law firm CABUCANA, CABUCANA, DE GUZMAN AND CABUCANA LAW OFFICE, with Atty. Edmar Cabucana handling the case and herein respondent as an associate/partner; on February 26, 2001, a decision was rendered in the civil case ordering the losing party to pay Gonzales the amount of P17,310.00 with interest and P6,000.00 as attorneys fees; Sheriff Romeo Gatcheco, failed to fully implement the writ of execution issued in connection with the judgment which prompted Gonzales to file a complaint against the said sheriff with this Court; in September 2003, Sheriff Gatcheco and his wife went to the house of Gonzales; they harassed Gonzales and asked her to execute an affidavit of desistance regarding her complaint before this Court; Gonzales thereafter filed against the Gatchecos criminal cases for trespass, grave threats, grave oral defamation, simple coercion and unjust vexation; notwithstanding the pendency of Civil Case

No. 1-567, where respondents law firm was still representing Gonzales, herein respondent represented the Gatchecos in the cases filed by Gonzales against the said spouses; respondent should be disbarred from the practice of law since respondents acceptance of the cases of the Gatchecos violates the lawyerclient relationship between complainant and respondents law firm and renders respondent liable under the Code of Professional Responsibility (CPR) particularly Rules 10.01,[1] 13.01,[2] 15.02, [3] 15.03,[4] 21.01[5] and 21.02.[6] On January 9, 2004, the IBP-Commission on Bar Discipline ordered Atty. Marcelino Cabucana, Jr. to submit his Answer to the complaint.[7] In his Answer, respondent averred: He never appeared and represented complainant in Civil Case No. 1-567 since it was his brother, Atty. Edmar Cabucana who appeared and represented Gonzales in said case. He admitted that he is representing Sheriff Gatcheco and his wife in the cases filed against them but claimed that his appearance is pro bono and that the spouses pleaded with him as no other counsel was willing to take their case. He entered his appearance in good faith and opted to represent the spouses rather than leave them defenseless. When the Gatchecos asked for his assistance, the spouses said that the cases filed against them by Gonzales were merely instigated by a high ranking official who wanted to get even with them for their refusal to testify in favor of the said official in another case. At

first, respondent declined to serve as counsel of the spouses as he too did not want to incur the ire of the high-ranking official, but after realizing that he would be abdicating a sworn duty to delay no man for money or malice, respondent entered his appearance as defense counsel of the spouses free of any charge. Not long after, the present complaint was crafted against respondent which shows that respondent is now the subject of a demolition job. The civil case filed by Gonzales where respondents brother served as counsel is different and distinct from the criminal cases filed by complainant against the Gatcheco spouses, thus, he did not violate any canon on legal ethics. [8] Gonzales filed a Reply contending that the civil case handled by respondents brother is closely connected with the cases of the Gatchecos which the respondent is handling; that the claim of respondent that he is handling the cases of the spouses pro bono is not true since he has his own agenda in offering his services to the spouses; and that the allegation that she is filing the cases against the spouses because she is being used by a powerful person is not true since she filed the said cases out of her own free will.[9] The Commission on Bar Discipline of the IBP sent to the parties a Notice of Mandatory Conference dated March 1, 2004. [10] On the scheduled conference, only a representative of complainant appeared.[11] Commissioner Demaree Raval of the

IBP-CBD then directed both parties to file their respective verified position papers.[12]

Complainant filed a Memorandum reiterating her earlier assertions and added that respondent prepared and notarized counter-affidavits of the Gatcheco spouses; that the high-ranking official referred to by respondent is Judge Ruben Plata and the accusations of respondent against the said judge is an attack against a brother in the profession which is a violation of the CPR; and that respondent continues to use the name of De Guzman in their law firm despite the fact that said partner has already been appointed as Assistant Prosecutor of Santiago City, again in violation of the CPR.[13] Respondent filed his Position Paper restating his allegations in his Answer.[14] On August 23, 2004, Commissioner Wilfredo E.J.E. Reyes issued an Order notifying both parties to appear before his office on October 28, 2004 for a clarificatory question regarding said case.[15] On the said date, only respondent appeared[16] presenting a sworn affidavit executed by Gonzales withdrawing her complaint against respondent. It reads:
SINUMPAANG SALAYSAY TUNGKOL SA PAG-UURONG NG DEMANDA

Ako, si LETICIA GONZALES, nasa tamang edad, Pilipino, may asawa, at nakatira sa Barangay Dubinan East, Santiago City, makaraang manumpa ayon sa batas ay nagsasabing:
Ako ang nagdedemanda o petitioner sa CBD Case No. 04-1186 na may pamagat na Leticia Gonzales versus Atty. Marcelino C. Cabucana, Jr. na kasalukuyang nahaharap sa Commission on Bar Discipline ng Integrated Bar of the Philippines

Ang pagkakahain ng naturang demanda ay nag-ugat sa dipagkakaintindihan na namamagitan sa akin at nina Mr. and Mrs. Romeo and Anita Gatcheco.

Dahil sa aking galit sa naturang mag-asawa, idinawit ko si Atty. Marcelino C. Cabucana, Jr. sa sigalot na namamagitan sa akin at sa mag-asawang Gatcheco, gayong nalalaman ko na si Atty. Marcelino C. Cabucana ay walang nalalaman sa naturang di pagkakaintindihan .

Makaraang pag-isipang mabuti ang paghain ko ng demanda kontra kay Atty. Marcelino C. Cabucana, Jr., nakumbinsi ako na ang pagdedemanda ko kay Atty. Marcelino C. Cabucana, Jr. ay isang malaking pagkakamali dahil siya ay walang kinalalaman (sic) sa di pagkakaintindihan naming(sic) ng mag-asawang Gatcheco.

Si Atty. Marcelino C. Cabucana, Jr. ay di ko rin naging abogado sa Civil Case No. 1-567 (MTCC Br. I Santiago City) na inihain ko kontra kay Eduardo Mangano.

Nais kong ituwid ang lahat kung kayat aking iniuurong ang naturang kasong inihain ko kontra kay Atty. Marcelino C. Cabucana, Jr. at dahil dito ay hindi na ako interesado pang ituloy and naturang kaso, at aking hinihiling sa kinauukulan na dismisin na ang naturang kaso.

Ginawa ko ang sinumpaang salaysay na ito upang patotohanan sa lahat ng nakasaad dito.[17]

Commissioner Reyes issued an Order dated October 28, 2004 requiring Gonzales to appear before him on November 25, 2004, to affirm her statements and to be subject to clarificatory questioning.[18] However, none of the parties appeared.[19] On February 17, 2005, only respondent was present. Commissioner Reyes then considered the case as submitted for resolution.[20] On February 24, 2005, Commissioner Reyes submitted his Report and Recommendation, portions of which are quoted hereunder:
The Undersigned Commissioner believes that the respondent made a mistake in the acceptance of the administrative case of Romeo Gatcheco, however, the Commission (sic) believes that there was no malice and bad faith in the said acceptance and this can be shown by the move of the complainant to unilaterally withdraw the case which she filed against Atty. Marcelino C. Cabucana, Jr. However, Atty. Cabucana is reminded to be more careful in the acceptance of cases as conflict of interests might arise.

It is respectfully recommended that Atty. Marcelino C. Cabucana, Jr. (be) sternly warned and reprimanded andadvised to be more circumspect and careful in accepting cases which might result in conflict of interests.[21]

On June 25, 2005, a Resolution was passed by the Board of Governors of the IBP, to wit:

RESOLUTION NO. XVI-2005-153 CBD CASE NO. 03-1186 Leticia Gonzales vs. Atty. Marcelino Cabucana, Jr.

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that respondent made (a) mistake in the acceptance of the administrative case of Romeo Gatcheco, Atty. Marcelino Cabucana, Jr. is hereby WARNED and REPRIMANDED and advised to be more circumspect and careful in accepting cases which might result in conflict of interests. [22]

Before going to the merits, let it be clarified that contrary to the report of Commissioner Reyes, respondent did not only represent the Gatcheco spouses in the administrative case filed by Gonzales against them. As respondent himself narrated in his Position Paper, he likewise acted as their counsel in the criminal cases filed by Gonzales against them.[23] With that settled, we find respondent guilty of violating Rule 15.03 of Canon 15 of the Code of Professional Responsibility, to wit:
Rule 15.03 A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts.

It is well-settled that a lawyer is barred from representing conflicting interests except by written consent of all concerned given after a full disclosure of the facts.[24] Such prohibition is founded on principles of public policy and good taste as the nature of the lawyer-client relations is one of trust and confidence of the highest degree.[25] Lawyers are expected not only to keep inviolate the clients 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 of paramount importance in the administration of justice.[26] One of the tests of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty.[27] As we expounded in the recent case of Quiambao vs. Bamba,[28]

The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of them would affect the performance of the duty of undivided fidelity to both clients.[29]

The claim of respondent that there is no conflict of interests in this case, as the civil case handled by their law firm where Gonzales is the complainant and the criminal cases filed by Gonzales against the Gatcheco spouses are not related, has no merit. The representation of opposing clients in said cases, though unrelated, constitutes conflict of interests or, at the very least, invites suspicion of double-dealing which this Court cannot allow.[30] Respondent further argued that it was his brother who represented Gonzales in the civil case and not him, thus, there could be no conflict of interests. We do not agree. As respondent admitted, it was their law firm which represented Gonzales in the civil case. Such being the case, the rule against representing conflicting interests applies. As we explained in the case of Hilado vs. David: [31]
[W]e can not sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to prevent any injustice to the plaintiff but to keep above reproach the honor and integrity of the courts and of the bar. Without condemning the respondents conduct as dishonest, corrupt, or fraudulent, we do believe that upon the admitted facts it is highly inexpedient. It had the tendency to bring the profession, of which he is a distinguished member, into public disrepute and suspicion and undermine the integrity of justice.[32]

The claim of respondent that he acted in good faith and with honest intention will also not exculpate him as such claim does not render the prohibition inoperative.[33] In the same manner, his claim that he could not turn down the spouses as no other lawyer is willing to take their case cannot prosper as it is settled that while there may be instances where lawyers cannot decline representation they cannot be made to labor under conflict of interest between a present client and a prospective one.[34] Granting also that there really was no other lawyer who could handle the spouses case other than him, still he should have observed the requirements laid down by the rules by conferring with the prospective client to ascertain as soon as practicable whether the matter would involve a conflict with another client then seek the written consent of all concerned after a full disclosure of the facts.[35] These respondent failed to do

thus exposing himself to the charge of double-dealing.

We

note

the as

affidavit

of

desistance case

filed

by

Gonzales. desistance

However, we are not bound by such the present involves public Indeed, the Courts exercise of its

interest.[36]

power to take cognizance of administrative cases against lawyers is not for the purpose of enforcing civil remedies between parties, but to protect the court and the public against an attorney guilty of unworthy practices in his profession.[37] In similar cases where the respondent was found guilty of representing conflicting interests a penalty ranging from one to three years suspension was imposed.[38] We shall consider however as mitigating circumstances the fact that he is representing the Gatcheco spouses pro bono and that it was his firm and not respondent personally, which handled the civil case of Gonzales. As recounted by complainant herself, Atty. Edmar Cabucana signed the civil case of complainant by stating first the name of the law firm CABUCANA, CABUCANA, DE GUZMAN AND CABUCANA LAW OFFICE, under which, his name and signature appear; while herein respondent signed the pleadings for the Gatcheco spouses only with his name,[39] without any mention of the law firm. malice and bad faith in respondents We also note the acceptance of the observation of the IBP Commissioner Reyes that there was no

Gatchecos cases as shown by the move of complainant to withdraw the case. Thus, for violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility and taking into consideration the aforementioned mitigating circumstances, we impose the penalty of fine of P2,000.00. WHEREFORE, Resolution No. XVI-2005-153 of the Integrated Bar of the Philippines is APPROVED with MODIFICATION that respondent Atty. Marcelino Cabucana, Jr. is FINED the amount of Two Thousand Pesos (P2,000.00) with a STERN WARNING that a commission of the same or similar act in the future shall be dealt with more severely. SO ORDERED.

5. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 93707 January 23, 2001

ROSITA TAN, petitioner, vs. ATTY. JOSE L. LAPAK, respondent. MENDOZA, J.: This is a complaint filed by Rosita Tan against Atty. Jose L. Lapak for misconduct, based on respondent's failure to file with this Court a petition for review on certiorari of a resolution of the Court of Appeals dismissing complainant's appeal. Complainant alleged that despite the fact that

this Court had granted respondent an extension of the time to file the petition for review on certiorari and she had paid respondent his fee, the latter nonetheless failed to file the petition in this Court. Complainant's letter, dated January 10, 1991, addressed to then Chief Justice Marcelo B. Fernan, stated: Ako po ay sumusulat sa iyo upang ihingi ng tulong ang aking suliranin na may kaugnayan sa aking kaso, G.R. No. 93707 ROSITA TAN v. CA, et al. Na dahilan sa kapabayaan ng aking abogado na si Atty. Jose Lapak ay hindi nakapagfile ng Certiorari nasa ngayon kanyang inihihinging palugit ay naibigay naman, at ako po ay nagbigay naman ng halagang P4,000.00 upang gawain lamang ang petition sa pagrerepaso ng Certiorari subalit inuulit pang hindi gawain. Kgg. Na Chief Justice ako po'y pinaasa lamang ng aking abogado na wala man lamang nagawa kung ano ang nararapat. Ako naman ay isang walang karanasan sa bagay na ito ay naniwala at naghintay. Nang makausap ko po siya ay aking tinapat kung ano na at walang nadating na resulta sa ginawa niya ang sagot sa aking maghintay na lamang daw ako. Ngunit ng ako po ay pumunta sa Maynila at napadaan ako sa Korte Suprema saka ko pa lamang napag-alaman na ang aking abogado ay hindi nakapaggawa ng brief ng Certiorari at kaya napawalaan ng bisa ang aking apelasyon.1wphi1.nt Akin pong naisip na idulog ang aking kaapihan sa Pangulo ng IBP ng Camarines Norte ang mga bagay na ito ang sagot po sa aking ay maari akong maghain ng demanda laban sa aking abogado na si Atty. Jose L. Lapak ngunit ako po ay mahirap lamang at isa pa wala akong matutustos sa aking abogado. Isa pa po wala akong pera at sapat na pinagaralan kaya po hindi ko alam kung sino ang aking dudulungan para tumulong sa mahihirap. Kaya naisip ko pong sumulat sa opisina ninyo, para ihain ang aking karaingan. Kung inyo pong mamarapatin ako ay humihingi ng tulong sa iyo bilang pinakamataas na hustisya ang aking kaapihan. Respondent denied the allegations against him. In his manifestation and comment, dated March 4, 1991, he contended: a) Ms. Rosita Tan was formerly represented by Atty. Juanito Subia in Civil Case No. 5295, Rosita Tan vs. Wilfredo Enriquez before the Regional Trial Court of Camarines Norte; said case was dismissed due to failure of Rosita Tan and his (sic) counsel to appear during the scheduled Pre-Trial of the case; . . . said Order of dismissal was however reconsidered; b) On November 11, 1986, Atty. Marciano C. Dating, Jr. entered his appearance for the said Rosita Tan as her original counsel, Atty. Juanito Subia, had withdrawn for reasons only known to her; . . . Atty. Marciano C. Dating, Jr. filed an Amended Complaint; c) That on September 20, 1988, the Court, through Hon. Luis Dictado, who heard the case, rendered a decision dismissing Rosita Tan's complaint;

d) That on October 13, 1988, Atty. Dating, Rosita Tan's counsel, appealed from the adverse decision against her to the Court of Appeals; e) That Atty. Marciano Dating also withdrew later as Rosita Tan's counsel and a certain Leopoldo P. San Buenaventura entered his appearance as new counsel for the said Rosita Tan in the appealed case before the Court of Appeals which was docketed as C.A. G.R. CV No. 20669; f) On October 26, 1989, Atty. Leopoldo E. San Buenaventura filed a Motion for Extension of Time to File Brief for Rosita Tan; . . . however, for reasons only known to said lawyer, he failed to file his Appellant's Brief; hence, on February 20, 1990, the Court of Appeals issued a Resolution dismissing the appeal for failure to Rosita Tan's counsel to file Appellant's Brief despite extension of time granted to him; g) That upon receipt by Ms. Rosita Tan of said Resolution dismissing her appeal due to the failure of her Manila lawyer to file Appellant's Brief, she came to the law office of undersigned counsel in the company of her friend, Mrs. Gloria Gatan, to employ the latter's services to seek reconsideration of the Order of dismissal and file Appellant's Brief to enable her to pursue her appeal; Rosita employed the legal services of undersigned counsel not to file a Petition for Review but to seek reconsideration of the order to dismissal of her appeal; considering then that she does not have the papers to the case on appeal, Rosita Tan agreed to pay counsel P5,000.00 to go to Manila, study the records of the case in the Court of Appeals, file a Motion for Reconsideration and prepare Appellant's Brief for her; she was able to pay P3,000.00 only instead of P5,000.00 promising to pay the balance later; consequently, the undersigned counsel filed an URGENT MOTION FOR RECONSIDERATION with the Court of Appeals . . . .; h) Unfortunately, the Court of Appeals denied said Motion for Reconsideration in a Resolution promulgated on May 2, 1990 . . . .; i) That upon receipt by the undersigned counsel of said Resolution of the Court of Appeals denying the Motion for Reconsideration, the undersigned counsel summoned the appellant Rosita Tan and requested her to bring the balance of P2,000.00 so that a Petition for Review on Certiorari could be filed with the Supreme Court; however, the said appellant Rosita Tan upon knowing of the adverse Resolution of the Court of Appeals became apathetic and when she came to the law office of the undersigned she expressed her misgivings of bringing the case to the Supreme Court and told counsel that she has no more money; despite her indifference and lukewarm attitude, the undersigned counsel filed a Motion for Extension of Time to file a Petition for Review with the Supreme Court paying the docket fees therefore in behalf of said appellant; in the meantime the undersigned counsel went to Manila to make researches preparatory to the filing of the Petition for Review with the Supreme Court; . . . The undersigned counsel then requested the appellant Rosita Tan to pay him the balance of P2,000.00 as per agreement for him to be able to prepare the Petition for Review in Manila and file it with the Supreme Court; but said appellant hesitantly paid only P1,000.00 which was her only money available promising to pay the balance of P1,000.00 later; thereafter, the

undersigned counsel went to the Court of Appeals to get certified true copies of the Resolution denying the Motion for Reconsideration; he then learned that there was already an Entry of Judgment in the case as the Resolution dismissing the appeal had already become final; the undersigned then informed Rosita Tan of her misfortune and informed her that he would study the propriety of filing an action for annulment of the decision because of his discovery of an anomaly which resulted in a mistrial; because of continuous setbacks she suffered from beginning to end; Rosita Tan said she had lost all hope and was unwilling to go any further; she then demanded the refund of P4,000.00 from the undersigned; when the undersigned gave back the P1,000.00 he received from her, she refused to receive the amount insisting that the whole amount of P4,000.00 be returned to her claiming that the undersigned counsel had not done anything for her anyway; hence the misunderstanding which culminated in her sending a letter complaint to the Honorable Chief Justice of the Supreme Court. The case was referred to the Integrated Bar of the Philippines for investigation, report, and recommendation. On July 29, 2000, the IBP passed a resolution adopting the report and recommendation of its Investigating Commissioner Jaime M. Vibar that respondent be reprimanded and ordered to restitute to complainant the amount of P1,000.00. In finding respondent guilty of betrayal of his client's trust and confidence, the investigating commissioner said in his report: Regardless of the agreement on the total amount of the fees, it is clear that respondent committed to prepare and file a "petition with the Supreme Court" and for which he received P1,000.00 from the complainant (Annex "B", Sagot, dated May 31, 1991). Despite such commitment, he failed to file the petition. It is not explained why the payment of PHP1,000.00 was made by complainant for the "petition" on August 8, 1990. At that time, the period to file the petition for review as contemplated by respondent and which was the subject of an extension motion, dated May 18, 1990, filed with and granted by the Hon. Supreme Court, had already expired. It is to be noted that respondent's motion sought an extension of "thirty (30) days from May 26, 1990 or up to June 25, 1990". It would appear that respondent received P1,000.00 on August 8, 1990 from complainant at a time when the remedy of a review of the dismissal order of the Court of Appeals was no longer available. Yet, complainant was never informed or favored with an explanation that a petition for review was no longer possible, or perhaps that another remedy was still open to the complaint. To aggravate his situation, respondent alleges in his comment to the complaint (at page 3) that after he received P1,000.00 from the complainant he immediately went to the Court of Appeals to get certified copies of the resolution denying his motion for reconsideration and that thereat he discovered that an "Entry of Judgment" had already been issued. Respondent should have known that when he went to the Court of Appeals after receipt of P1,000.00, or after August 8, 1990. The period he requested from the Hon. Supreme Court to institute the petition for review had long expired.

But the silence of respondent at the time of receipt of the amount of P1,000.00 on August 8, 1990 and the "petition with the Supreme Court" was no longer an available remedy smacks of a betrayal of a client's cause and the trust and confidence reposed in him. If indeed his client's cause was no longer worth fighting for, the lawyer should not have demanded a feeand made representations that there is merit in her case. He should have dealt with his client with all candor and honesty by informing her that on August 8, 1990 the period to file the petition had already expired. Complainant has been a victim of negligence on the part of the law firm of San Buenaventura, et al., or particularly Atty. Leopoldo San Buenaventura, for their failure to file the Appellant's Brief in behalf of complainant within the period allowed. The dismissal of the appeal gave complainant a slim chance, if not a futile remedy, with the Hon. Supreme Court. Atty. Lapak would have been shackled in any disquisition for complainant's cause considering that she already lost in the trial court and her appeal had been dismissed without any argument being advanced in her behalf. Atty. Lapak should have been candid with complainant. He should not have asked more at a time when nothing fruitful could be done anymore. With respect to respondent's offer to return the amount of P1,000.00 paid to him to file the petition for review on certiorari, the investigating commissioner stated: . . . [T]his willingness to return P1,000.00 does not erase his breach of the Code of Professional Responsibility for lacking in honesty, diligence and fairness in dealing with his client as shown by the very fact that he received the amount at a time when he could no longer file the "petition with the Supreme Court". His client deserved the information that on such date the decision of the Court of Appeals was already final. Respondent's actuation of filing an extension motion with the Hon. Supreme Court and yet not filing the pleading within the period requested and granted speaks well of respondent's lack of candor, honesty and judicious conduct in dealing with his client or in the handling of his case. This conduct violates Canon 17, & Rule 18.03, Rule 18.04 of Canon 18 of the Code of Professional Responsibility. The investigating commissioner recommends that respondent only be reprimanded considering his old age and the negligent conduct of complainant's previous counsel. The commissioner reasoned that it was the negligent conduct of complainant's previous counsel which caused the dismissal of the appeal and rendered inutile any further legal action before the Supreme Court. The investigating commissioner's findings are supported by the evidence. However, we hold that the appropriate sanction should be reprimand and order respondent to return the amount of P4,000.00 which he received from complainant.1wphi1.nt Respondent advances two reasons why he did not file a petition for review on certiorari in this Court, to wit: (1) because he found that the resolution of the Court of Appeals to be appealed to the Supreme Court had become final on May 27, 1990 and (2) because complainant failed to pay the balance of P1,000.00 of his fee.

First. With respect to the first reason, Rule 18.03 thereof which provides that "A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable." Respondent alleges that upon receipt of the Court of Appeals resolution denying the motion for reconsideration which he had filed, he summoned complainant and told her that it was imperative that a petition for review on certiorari be filed with this Court. At this point, it is important to note the material dates on record to determine if respondent's justification for his failure to file a petition for review is tenable. The resolution of the Court of Appeals dismissing complainant's appeal for failure to file an appellant's brief was promulgated on February 20, 1990. Within the reglementary period for filing an appeal, respondent filed a motion for reconsideration which the Court of Appeals denied on May 2, 1990. Respondent received a copy of this resolution (denying the motion for reconsideration) on May 11, 1990 so that respondent had 15 days from May 11, 1990, or until May 26, within which to file a petition for review on certiorari with the Supreme Court. Respondent thereafter asked for, and was granted by this Court, an extension of 30 days "counted from the reglementary period," or until June 25, 1990, within which to file the petition. As respondent failed to file the petition within the extended period, the Supreme Court issued a resolution on August 20, 1990 declaring the judgment sought to be reviewed to have become final and executory. It is not true, therefore, that respondent failed to file a petition for review on certiorari because the judgment sought to be reviewed had become final on May 27, 1990. When respondent summoned complainant and told her that in view of the denial of his motion for reconsideration it was imperative that a petition for review be filed with this Court, the resolution of the Court of Appeals was not yet final. In fact, this Court granted respondent's motion for extension of time to file the petition for review, because the resolution of the Court of Appeals denying the motion for reconsideration had not yet attained finality. Despite having been granted an extension, however, respondent failed to file the petition within the reglementary period. This constitutes a serious breach. Rule 12.03 of the Code of Professional Responsibility provides that "A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so." The filing of a petition for review is similar to the filing of an appellant's or appellee's brief. In Mariveles v. Mallari,1 it was held that the lawyer's failure to file an appellant's brief despite numerous extensions of time to file the same constitutes a blatant violation of Rule 12.03 of the Code of Professional Responsibility. As already noted, this Rule provides that after obtaining extensions of time to file pleadings, memoranda, or briefs, a lawyer should not let the period lapse without submitting the same or offering an explanation for his failure to do so. In Re: Santiago F. Marcos,2 the Court considered a lawyer's failure to file a brief for his client as amounting to inexcusable negligence. Said the Court: An attorney is bound to protect his client's interest to the best of his ability and with utmost diligence. (Del Rosario v. CA, 114 SCRA 159). A failure to file brief for his client certainly constitutes inexcusable negligence on his part. (People v. Villar, 46 SCRA 107)

The respondent has indeed committed a serious lapse in the duty owed by him to his client as well as to the Court not to delay litigation and to aid in the speedy administration of justice. (People v. Daban, 43 SCRA 185; People v. Estocada, 43 SCRA 515). At any rate, even assuming that the resolution of the Court of Appeals expired on May 27, 1990, he should not have asked on August, 8, 1990 for the balance of P5,000.00 which complainant had agreed to pay since the resolution had already become final at that time. As the investigating commissioner pointed out in his report: To aggravate his situation, respondent alleges in his comment to the complaint (at page 3) that after he received P1,000.00 from the complainant he immediately went to the Court of Appeals to get certified copies of the resolution denying his motion for reconsideration and that thereat he discovered that an "Entry of Judgment" had already been issued. Respondent should have known that when he went to the Court of Appeals after receipt of P1,000.00, or after August 8, 1990, (t)he period he requested from the Hon. Supreme Court to institute the petition for review had long expired.3 It would, therefore, appear that if an entry of judgment had been made in the Court of Appeals, it was precisely because respondent failed to file a petition for review with the Supreme Court within the extended period granted him. He cannot, therefore, excuse his breach of the duty to his client by his own negligent act. Second. Respondent asserts that complainant only engaged his services to pursue her appeal in the Court of Appeals which was dismissed due to the failure of complainant's former counsel, Atty, Leopoldo E. San Buenaventura, to file the appellant's brief. Whether or not he was engaged to represent complainant only in the Court of Appeals and not also in the Supreme Court is immaterial. For the fact is that respondent already commenced the representation of complainant in the Supreme Court by filing a motion for extension of the time of file a petition for review. In fact, according to respondent, upon receipt of the Court of Appeals resolution denying reconsideration of the dismissal of complainant's appeal, respondent summoned complainant to his office precisely to tell her that it was imperative that a petition for review be filed with the Supreme Court. Once he took the cudgels of his client's case and assured her that he would represent her in the Supreme Court, respondent owed it to his client to do his utmost to ensure that every remedy allowed by law was availed of. As this Court has held: 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, 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. He must serve the client with competence and diligence, and champion the latter's cause with wholehearted fidelity, care and devotion. Elsewise stated, he owes entire devotion to the interest of his 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. 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.4 Third. Nor can respondent excuse himself for his failure to file the petition for review on certiorari on the ground that complainant failed to pay what she promised to pay. Complainant agreed to pay P5,000.00. Of this amount, she paid respondent P3,000.00 and later P1,000.00, leaving only a balance of P1,000.00. Even if this balance had not been paid, this fact was not sufficient to justify the failure of respondent to comply with his professional obligation which does not depend for compliance on the payment of a lawyer's fees. As respondent utterly failed to comply with his professional commitment to complainant, it is, therefore, not just for him to keep the legal fee of P4,000.00 which complainant paid him. He has not rightfully earned that fee and should return it to complainant. WHEREFORE, Atty. Jose L. Lapak is REPRIMANDED and ORDERED to refund to complainant Rosita Tan the amount of P4,000.00. He is admonished henceforth to exercise greater care and diligence in the performance of his duties towards his clients and the courts and warned that repetition of the same or similar offense will be more severely dealt with.1wphi1.nt SO ORDERED.

5. FIRST DIVISION [A.C. No. 5804. July 1, 2003]


BENEDICTO HORNILLA and ATTY. FEDERICO D. RICAFORT, complainants, vs. ATTY. ERNESTO S. SALUNAT, respondent. RESOLUTION YNARES-SANTIAGO, J.: On November 21, 1997, Benedicto Hornilla and Federico D. Ricafort filed an administrative complaint [1] with the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline, against respondent Atty. Ernesto S. Salunat for illegal and unethical practice and conflict of interest. They alleged that respondent is a member of the ASSA Law and Associates, which was the retained counsel of the Philippine Public School Teachers Association (PPSTA). Respondents brother, Aurelio S. Salunat, was a member of the PPSTA Board which approved respondents engagement as retained counsel of PPSTA.
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Complainants, who are members of the PPSTA, filed an intra-corporate case against its members of the Board of Directors for the terms 1992-1995 and 1995-1997 before the Securities and Exchange Commission, which was docketed as SEC Case No. 05-97-5657, and a complaint before the Office of the Ombudsman, docketed as OMB Case No. 0-97-0695, for unlawful spending and the undervalued sale of real property of the PPSTA. Respondent entered his appearance as counsel for the PPSTA Board members in the said cases. Complainants contend that respondent was guilty of conflict of interest because he was engaged by the PPSTA, of which complainants were members, and was being paid out of its corporate funds where complainants have contributed. Despite being told by PPSTA members of the said conflict of interest, respondent refused to withdraw his appearance in the said cases. Moreover, complainants aver that respondent violated Rule 15.06 [2] of the Code of Professional Responsibility when he appeared at the meeting of the PPSTA Board and assured its members that he will win the PPSTA cases.
2

In his Answer, [3] respondent stressed that he entered his appearance as counsel for the PPSTA Board Members for and in behalf of the ASSA Law and Associates. As a partner in the said law firm, he only filed a Manifestation of Extreme Urgency in OMB Case No. 0-97-0695. [4] On the other hand, SEC Case No. 05-97-5657 was handled by another partner of the firm, Atty. Agustin V. Agustin. Respondent claims that it was complainant Atty. Ricafort who instigated, orchestrated and indiscriminately filed the said cases against members of the PPSTA and its Board.
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Respondent pointed out that his relationship to Aurelio S. Salunat was immaterial; and that when he entered into the retainer contract with the PPSTA Board, he did so, not in his individual capacity, but in representation of the ASSA Law Firm. He denied that he ensured the victory of the PPSTA Board in the case he was handling. He merely assured the Board that the truth will come out and that the case before the Ombudsman will be dismissed for lack of jurisdiction, considering that respondents therein are not public officials, but private employees. Anent the SEC case, respondent alleged that the same was being handled by the law firm of Atty. Eduardo de Mesa, and not ASSA. By way of Special and Affirmative Defenses, respondent averred that complainant Atty. Ricafort was himself guilty of gross violation of his oath of office amounting to gross misconduct, malpractice and unethical conduct for filing trumped-up charges against him and Atty. De Mesa. Thus, he prayed that the complaint against him be dismissed and, instead, complainant Ricafort be disciplined or disbarred. The complainant was docketed as CBD Case No. 97-531 and referred to the IBP Commission on Bar Discipline. After investigation, Commissioner Lydia A. Navarro recommended that respondent be suspended from the practice of law for six (6) months. The Board of Governors
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thereafter adopted Resolution No. XV-3003-230 dated June 29, 2002, approving the report and recommendation of the Investigating Commissioner. Respondent filed with this Court a Motion for Reconsideration of the above Resolution of the IBP Board of Governors. The pertinent rule 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 a full disclosure of the facts. There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is whether or not in behalf of one client, it is the lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client. [5] 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. [6] 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. [7] 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. [8]
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In this jurisdiction, a corporations board of directors is understood to be that body which (1) exercises all powers provided for under the Corporation Code; (2) conducts all business of the corporation; and (3) controls and holds all property of the corporation. [9] Its members have been characterized as trustees or directors clothed with a fiduciary character. [10] It is clearly separate and distinct from the corporate entity itself.
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Where corporate directors have committed a breach of trust either by their frauds, ultra vires acts, or negligence, and the corporation is unable or unwilling to institute suit to remedy the wrong, a stockholder may sue on behalf of himself and other stockholders and for the benefit of the corporation, to bring about a redress of the wrong done directly to the corporation and
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indirectly to the stockholders. [11] This is what is known as a derivative suit, and settled is the doctrine that in a derivative suit, the corporation is the real party in interest while the stockholder filing suit for the corporations behalf is only nominal party. The corporation should be included as a party in the suit. [12]
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Having thus laid a suitable foundation of the basic legal principles pertaining to derivative suits, we come now to the threshold question: can a lawyer engaged by a corporation defend members of the board of the same corporation in a derivative suit? On this issue, the following disquisition is enlightening: The possibility for conflict of interest here is universally recognized. Although early cases found joint representation permissible where no conflict of interest was obvious, the emerging rule is against dual representation in all derivative actions. Outside counsel must thus be retained to represent one of the defendants. The cases and ethics opinions differ on whether there must be separate representation from the outset or merely from the time the corporation seeks to take an active role. Furthermore, this restriction on dual representation should not be waivable by consent in the usual way; the corporation should be presumptively incapable of giving valid consent. [13] (underscoring ours)
13

In other jurisdictions, the prevailing rule is that a situation wherein a lawyer represents both the corporation and its assailed directors unavoidably gives rise to a conflict of interest. The interest of the corporate client is paramount and should not be influenced by any interest of the individual corporate officials. [14] The rulings in these cases have persuasive effect upon us. After due deliberation on the wisdom of this doctrine, we are sufficiently convinced that a lawyer engaged as counsel for a corporation cannot represent members of the same corporations board of directors in a derivative suit brought against them. To do so would be tantamount to representing conflicting interests, which is prohibited by the Code of Professional Responsibility.
14

In the case at bar, the records show that SEC Case No. 05-97-5657, entitled Philippine Public School Teachers Assn., Inc., et al. v. 1992-1995 Board of Directors of the Philippine Public School Teachers Assn. (PPSTA), et al., was filed by the PPSTA against its own Board of Directors. Respondent admits that the ASSA Law Firm, of which he is the Managing Partner, was the retained counsel of PPSTA. Yet, he appeared as counsel of record for the respondent Board of Directors in the said case. Clearly, respondent was guilty of conflict of interest when he represented the parties against whom his other client, the PPSTA, filed suit. In his Answer, respondent argues that he only represented the Board of Directors in OMB Case No. 0-97-0695. In the said case, he filed a Manifestation of Extreme Urgency wherein he prayed for the dismissal of the complaint against his clients, the individual Board Members. By filing
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the said pleading, he necessarily entered his appearance therein. [15] Again, this constituted conflict of interests, considering that the complaint in the Ombudsman, albeit in the name of the individual members of the PPSTA, was brought in behalf of and to protect the interest of the corporation.
15

Therefore, respondent is guilty of representing conflicting interests. Considering however, that this is his first offense, we find the penalty of suspension, recommended in IBP Resolution No. XV-2002-230 dated June 29, 2002, to be too harsh. Instead, we resolve to admonish respondent to observe a higher degree of fidelity in the practice of his profession. ACCORDINGLY, respondent Atty. Ernesto Salunat is found GUILTY of representing conflicting interests and is ADMONISHED to observe a higher degree of fidelity in the practice of his profession. He is further WARNED that a repetition of the same or similar acts will be dealt with more severely. SO ORDERED.

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