Pale - Impres To Coi

IMPRESCRIPTIBILITY OF DISBARMENT
EN BANC
BOBIE ROSE V. FRIAS,
Complainant,
A.C. No. 6656

(formerly CBD-98-591)
Present:
PANGANIBAN,
C.J.
PUNO,*
QUISUMBING,
YNARESSANTIAGO,
SANDOVALGUTIERREZ,
CARPIO,
AUSTRIAMARTINEZ,
-versus-
CORONA,
CARPIO
MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICONAZARIO,
GARCIA and
VELASCO, JJ.
ATTY. CARMELITA S.
BAUTISTA-LOZADA,**
Respondent.
Promulgated:
May 4, 2006
x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----x
CORONA, J.:
Respondent Atty. Carmelita Bautista-Lozada seeks
reconsideration of our December 13, 2005 resolution finding her
guilty of violating Rules 15.03 and 16.04 of the Code of
Professional Responsibility and of willfully disobeying a final and
executory decision of the Court of Appeals and suspending her
from the practice of law for two years.
Respondent contends that, pursuant to Rule VIII of the
Rules of Procedure of the Commission on Bar Discipline (CBD)
of the Integrated Bar of the Philippines (IBP), the complaint
against her was already barred by prescription. She also asserts
that her December 7, 1990 loan agreement with complainant
complied with Rule 16.04 because the interest of complainant
was fully protected.
Respondents contentions have no merit.
Respondent anchors her defense of prescription on Rule
VIII, Section 1 of the Rules of Procedure of the CBD-IBP which
provides:
SECTION 1. Prescription. A complaint for
disbarment, suspension or discipline of attorneys
prescribes in two (2) years from the date of the
professional misconduct.
However, as early as 1967, we have held that the
defense of prescription does not lie in administrative
proceedings against lawyers.[1] And in the 2004 case of Heck v.
Santos,[2] we declared that an administrative complaint against
a member of the bar does not prescribe.
RESOLUTION
PALE | Imprescriptibility of Disbarment & Conflict of Interest | 1
If the rule were otherwise, members of

the bar would be emboldened to disregard the
very oath they took as lawyers, prescinding from
the fact that as long as no private complainant
would immediately come forward, they stand a
chance of being completely exonerated from
whatever administrative liability they ought to
answer for. It is the duty of this Court to protect
the integrity of the practice of law as well as the
administration of justice. No matter how much
time has elapsed from the time of the

commission of the act complained of and the time
of the institution of the complaint, erring
members of the bench and bar cannot escape the
disciplining arm of the Court. This categorical
pronouncement is aimed at unscrupulous
members of the bench and bar, to deter them
from committing acts which violate the Code of
Professional Responsibility, the Code of Judicial
Conduct, or the Lawyers Oath. x x x
Thus, even the lapse of considerable time

from the commission of the offending act to the
institution of the administrative complaint will not
erase the administrative culpability of a
lawyer.[3] (emphasis supplied)
The CBD-IBP derives its authority to take cognizance of

administrative complaints against lawyers from this Court which
has the inherent power to regulate, supervise and control the
practice of law in the Philippines. Hence, in the exercise of its
delegated power to entertain administrative complaints against
lawyers, the CBD-IBP should be guided by the doctrines and
principles laid down by this Court.
Regrettably, Rule VIII, 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
runs afoul of the settled ruling of this Court. It should therefore
be struck down as void and of no legal effect for being ultra
vires.
Moreover, assuming that prescription is a valid defense,
respondent raised it only at this late stage. We presume she
was familiar with that rule yet she failed to invoke it at the
earliest opportunity.
Instead she opted to insist on her
innocence.
On the other ground raised by respondent, we have
sufficiently discussed the implications of her loan agreement
with complainant in relation to Rule 16.04 of the Code of
Professional Responsibility in our December 13, 2005 resolution.
Considering the fiduciary character of respondents relationship
with complainant, the nature of their agreement and
complainants lack of independent advice when she entered into
it, there is neither sufficient ground nor compelling reason to
reconsider our earlier resolution.
WHEREFORE, respondents motion for reconsideration
is hereby DENIED WITH FINALITY.
Rule VIII, Section 1 of the Rules of Procedure of the
Commission on Bar Discipline of the Integrated Bar of the
Philippines is hereby declared null and void.
Let copies of this resolution be furnished the Integrated
Bar of the Philippines and the Office of the Bar Confidant for
their information and guidance.
SO ORDERED.
EN BANC
BOBIE ROSE V. FRIAS,

Complainant,
A.C. No. 6656

(formerly CBD-98-591)
Present:
PANGANIBAN,
C.J.
PUNO,*
QUISUMBING,
YNARESSANTIAGO,
SANDOVALGUTIERREZ,
CARPIO,
AUSTRIAMARTINEZ,
-versus-
CORONA,
CARPIO
MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICONAZARIO,
GARCIA and
VELASCO, JJ.
ATTY. CARMELITA S.
BAUTISTA-LOZADA,**
Respondent.
Promulgated:
May 4, 2006
x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----x
Respondent Atty. Carmelita Bautista-Lozada seeks

reconsideration of our December 13, 2005 resolution finding her
guilty of violating Rules 15.03 and 16.04 of the Code of
Professional Responsibility and of willfully disobeying a final and
executory decision of the Court of Appeals and suspending her
from the practice of law for two years.
Respondent contends that, pursuant to Rule VIII of the
Rules of Procedure of the Commission on Bar Discipline (CBD)
of the Integrated Bar of the Philippines (IBP), the complaint
against her was already barred by prescription. She also asserts
that her December 7, 1990 loan agreement with complainant
complied with Rule 16.04 because the interest of complainant
was fully protected.
Respondents contentions have no merit.
Respondent anchors her defense of prescription on Rule
VIII, Section 1 of the Rules of Procedure of the CBD-IBP which
provides:
SECTION 1. Prescription. A complaint for
disbarment, suspension or discipline of attorneys
prescribes in two (2) years from the date of the
professional misconduct.
However, as early as 1967, we have held that the
defense of prescription does not lie in administrative
proceedings against lawyers.[1] And in the 2004 case of Heck v.
Santos,[2] we declared that an administrative complaint against
a member of the bar does not prescribe.
RESOLUTION
CORONA, J.:
If the rule were otherwise, members of

the bar would be emboldened to disregard the
very oath they took as lawyers, prescinding from
the fact that as long as no private complainant

would immediately come forward, they stand a
chance of being completely exonerated from
whatever administrative liability they ought to
answer for. It is the duty of this Court to protect
the integrity of the practice of law as well as the
administration of justice. No matter how much
time has elapsed from the time of the

commission of the act complained of and the time
of the institution of the complaint, erring
members of the bench and bar cannot escape the
disciplining arm of the Court. This categorical
pronouncement is aimed at unscrupulous
members of the bench and bar, to deter them
from committing acts which violate the Code of
Professional Responsibility, the Code of Judicial
Conduct, or the Lawyers Oath. x x x
Thus, even the lapse of considerable time

from the commission of the offending act to the
institution of the administrative complaint will not
erase the administrative culpability of a
lawyer.[3] (emphasis supplied)
The CBD-IBP derives its authority to take cognizance of

administrative complaints against lawyers from this Court which
has the inherent power to regulate, supervise and control the
practice of law in the Philippines. Hence, in the exercise of its
delegated power to entertain administrative complaints against
lawyers, the CBD-IBP should be guided by the doctrines and
principles laid down by this Court.
Regrettably, Rule VIII, 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
runs afoul of the settled ruling of this Court. It should therefore
be struck down as void and of no legal effect for being ultra

vires.
Moreover, assuming that prescription is a valid defense,
respondent raised it only at this late stage. We presume she
was familiar with that rule yet she failed to invoke it at the
earliest opportunity.
Instead she opted to insist on her
innocence.
On the other ground raised by respondent, we have
sufficiently discussed the implications of her loan agreement
with complainant in relation to Rule 16.04 of the Code of
Professional Responsibility in our December 13, 2005 resolution.
Considering the fiduciary character of respondents relationship
with complainant, the nature of their agreement and
complainants lack of independent advice when she entered into
it, there is neither sufficient ground nor compelling reason to
reconsider our earlier resolution.
WHEREFORE, respondents motion for reconsideration
is hereby DENIED WITH FINALITY.
Rule VIII, Section 1 of the Rules of Procedure of the
Philippines is hereby declared null and void.
Let copies of this resolution be furnished the Integrated
Bar of the Philippines and the Office of the Bar Confidant for
their information and guidance.
SO ORDERED.
CONFLICT OF INTEREST
[Syllabus]
EN BANC
[G.R. No. 105938. September 20, 1996]
TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V.

CRUZ, JOSE C. CONCEPCION, ROGELIO A.
VINLUAN, VICTOR P. LAZATIN, and EDUARDO U.
ESCUETA, petitioners, vs. THE HONORABLE
SANDIGANBAYAN, First Division, REPUBLIC OF
THE PHILIPPINES, ACTING THROUGH THE
PRESIDENTIAL
COMMISSION
ON
GOOD
GOVERNMENT, and RAUL S. ROCO, respondents.
[G.R. No. 108113. September 20, 1996]
PARAJA
G.
HAYUDINI,
petitioner,
vs.
THE
SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.
DECISION
KAPUNAN, J.:
These cases touch the very cornerstone of every State's
judicial system, upon which the workings of the contentious and
adversarial system in the Philippine legal process are based -
the sanctity of fiduciary duty in the client-lawyer relationship.

The fiduciary duty of a counsel and advocate is also what makes
the law profession a unique position of trust and confidence,
which distinguishes it from any other calling. In this instance,
we have no recourse but to uphold and strengthen the mantle
of protection accorded to the confidentiality that proceeds from
the performance of the lawyer's duty to his client.
The facts of the case are undisputed.
The matters raised herein are an offshoot of the institution
of the Complaint on July 31, 1987 before the Sandiganbayan by
the Republic of the Philippines, through the Presidential
Commission on Good Government against Eduardo M.
Cojuangco, Jr., as one of the principal defendants, for the
recovery of alleged ill-gotten wealth, which includes shares of
stocks in the named corporations in PCGG Case No. 33 (Civil
Case No. 0033), entitled "Republic of the Philippines versus
Eduardo Cojuangco, et al."[1]
Among the defendants named in the case are herein
petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz,
Jose C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin,
Eduardo U. Escueta and Paraja G. Hayudini, and herein private
respondent Raul S. Roco, who all were then partners of the law
firm Angara, Abello, Concepcion, Regala and Cruz Law Offices
(hereinafter referred to as the ACCRA Law Firm). ACCRA Law
Firm performed legal services for its clients, which included,
among others, the organization and acquisition of business
associations and/or organizations, with the correlative and
incidental services where its members acted as incorporators, or
simply, as stockholders. More specifically, in the performance
of these services, the members of the law firm delivered to its
client documents which substantiate the client's equity holdings,
i.e., stock certificates endorsed in blank representing the shares
registered in the client's name, and a blank deed of trust or
assignment covering said shares. In the course of their
dealings with their clients, the members of the law firm acquire
information relative to the assets of clients as well as their

personal and business circumstances. As members of the
ACCRA Law Firm, petitioners and private respondent Raul Roco
admit that they assisted in the organization and acquisition of
the companies included in Civil Case No. 0033, and in keeping
with the office practice, ACCRA lawyers acted as nomineesstockholders of the said corporations involved in sequestration
proceedings.[2]
On August 20, 1991, respondent Presidential Commission
on Good Government (hereinafter referred to as respondent
PCGG) filed a "Motion to Admit Third Amended Complaint" and
"Third Amended Complaint" which excluded private respondent
Raul S. Roco from the complaint in PCGG Case No. 33 as
party-defendant.[3] Respondent PCGG based its exclusion of
private respondent Roco as party-defendant on his undertaking
that he will reveal the identity of the principal/s for whom he
acted as nominee/stockholder in the companies involved in
PCGG Case No. 33.[4]
Petitioners were included in the Third Amended Complaint
on the strength of the following allegations:
14.
Defendants Eduardo Cojuangco, Jr., Edgardo
J. Angara, Jose C. Concepcion, Teodoro Regala,
Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U.
Escueta, Paraja G. Hayudini and Raul Roco of the
Angara Concepcion Cruz Regala and Abello law
offices (ACCRA) plotted, devised, schemed.
conspired and confederated with each other in
setting up, through the use of the coconut levy
funds, the financial and corporate framework and
structures that led to the establishment of UCPB,
UNICOM, COCOLIFE, COCOMARK, CIC, and more
than twenty other coconut levy funded corporations,
including the acquisition of San Miguel Corporation
shares and its institutionalization through presidential
directives of the coconut monopoly.
Through
insidious means and machinations, ACCRA, being the

wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately
fifteen million shares representing roughly 3.3% of
the total outstanding capital stock of UCPB as of 31
March 1987.
This ranks ACCRA Investments
Corporation number 44 among the top 100 biggest
stockholders of UCPB which has approximately
1,400,000 shareholders.
On the other hand,
corporate books show the name Edgardo J. Angara
as holding approximately 3,744 shares as of
February, 1984.[5]
In their answer to the Expanded Amended Complaint,
petitioners ACCRA lawyers alleged that:
4.4. Defendants-ACCRA lawyers participation in
the acts with which their co-defendants are charged,
was in furtherance of legitimate lawyering.
4.4.1.
In the course of rendering
professional and legal services to clients,
defendants-ACCRA
lawyers,
Jose
C.
Concepcion, Teodoro D. Regala, Rogelio A.
Vinluan and Eduardo U. Escueta, became
holders of shares of stock in the corporations
listed under their respective names in Annex A
of the expanded Amended Complaint as
incorporating or acquiring stockholders only
and, as such, they do not claim any proprietary
interest in the said shares of stock.
4.5. Defendant ACCRA-lawyer Avelino V. Cruz was
one of the incorporators in 1976 of Mermaid Marketing
Corporation, which was organized for legitimate
business purposes not related to the allegations of the
expanded Amended Complaint. However, he has long
ago transferred any material interest therein and
therefore denies that the shares appearing in his name

in Annex A of the expanded Amended Complaint are
his assets.[6]
Petitioner Paraja Hayudini, who had separated from ACCRA
law firm, filed a separate answer denying the allegations in the
complaint implicating him in the alleged ill-gotten wealth.[7]
Petitioners ACCRA lawyers subsequently filed their
"COMMENT AND/OR OPPOSITION" dated October 8, 1991 with
Counter-Motion that respondent PCGG similarly grant the same
treatment to them (exclusion as parties-defendants) as
accorded private respondent Roco.[8] The Counter-Motion for
dropping petitioners from the complaint was duly set for hearing
on October 18, 1991 in accordance with the requirements of
Rule 15 of the Rules of Court.
In its "Comment," respondent PCGG set the following
conditions precedent for the exclusion of petitioners, namely:
(a) the disclosure of the identity of its clients; (b) submission of
documents substantiating the lawyer-client relationship; and (c)
the submission of the deeds of assignments petitioners
executed in favor of its clients covering their respective
shareholdings.[9]
Consequently, respondent PCGG presented supposed proof
to substantiate compliance by private respondent Roco of the
conditions precedent to warrant the latter's exclusion as partydefendant in PCGG Case No. 33, to wit: (a) Letter to respondent
PCGG of the counsel of respondent Roco dated May 24, 1989
reiterating a previous request for reinvestigation by the PCGG
in PCGG Case No. 33; (b) Affidavit dated March 8, 1989
executed by private respondent Roco as Attachment to the
letter aforestated in (a); and (c) Letter of the Roco, Bunag, and
Kapunan Law Offices dated September 21, 1988 to the
respondent PCGG in behalf of private respondent Roco originally
requesting the reinvestigation and/or re-examination of the
evidence of the PCGG against Roco in its Complaint in PCGG
Case No. 33.[10]

It is noteworthy that during said proceedings, private
respondent Roco did not refute petitioners' contention that he
did actually not reveal the identity of the client involved in PCGG
Case No. 33, nor had he undertaken to reveal the identity of the
client for whom he acted as nominee-stockholder.[11]
On March 18, 1992, respondent Sandiganbayan
promulgated the Resolution, herein questioned, denying the
exclusion of petitioners in PCGG Case No. 33, for their refusal to
comply with the conditions required by respondent PCGG. It
held:
x x x.
ACCRA lawyers may take the heroic stance of not
revealing the identity of the client for whom they have
acted, i.e. their principal, and that will be their choice.
But until they do identify their clients, considerations of
whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The
ACCRA lawyers cannot excuse themselves from the
consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the
existence and identity of the client.
This is what appears to be the cause for which they
have been impleaded by the PCGG as defendants
herein.
5. The PCGG is satisfied that defendant Roco has
demonstrated his agency and that Roco has apparently
identified his principal, which revelation could show the
lack of cause against him. This in turn has allowed the
PCGG to exercise its power both under the rules of
Agency and under Section 5 of E.O. No. 14-A in relation
to the Supreme Court's ruling in Republic v.
Sandiganbayan (173 SCRA 72).
The PCGG has apparently offered to the ACCRA

lawyers the same conditions availed of by Roco; full
disclosure in exchange for exclusion from these
proceedings (par. 7, PCGG's COMMENT dated
November 4, 1991).
The ACCRA lawyers have
preferred not to make the disclosures required by the
PCGG.
The ACCRA lawyers cannot, therefore, begrudge
the PCGG for keeping them as party defendants. In the
same vein, they cannot compel the PCGG to be
accorded the same treatment accorded to Roco.
Neither can this Court.
WHEREFORE, the Counter Motion dated October 8,
1991 filed by the ACCRA lawyers and joined in by Atty.
Paraja G. Hayudini for the same treatment by the PCGG
as accorded to Raul S. Roco is DENIED for lack of
merit.[12]
ACCRA lawyers moved for a reconsideration of the above
resolution but the same was denied by the respondent
Sandiganbayan. Hence, the ACCRA lawyers filed the petition for
certiorari, docketed as G.R. No. 105938, invoking the following
grounds:
I
The Honorable Sandiganbayan gravely abused its
discretion in subjecting petitioners ACCRA lawyers who
undisputably acted as lawyers in serving as nomineestockholders, to the strict application of the law of
agency.
II
The Honorable Sandiganbayan committed grave
abuse of discretion
in not considering petitioners
ACCRA lawyers and Mr. Roco as similarly situated and,

therefore, deserving of equal treatment.
1. There is absolutely no evidence that Mr. Roco had
revealed, or had undertaken to reveal, the identities
of the client(s) for whom he acted as nomineestockholder.
2. Even assuming that Mr. Roco had revealed, or had
undertaken to reveal, the identities of the client(s),
the disclosure does not constitute a substantial
distinction as would make the classification
reasonable under the equal protection clause.
3.
Respondent Sandiganbayan sanctioned favoritism

and undue preference in favor of Mr. Roco in
violation of the equal protection clause.
III

abuse of discretion in not holding that, under the facts
of this case, the attorney-client privilege prohibits
petitioners ACCRA lawyers from revealing the identity of
their client(s) and the other information requested by
the PCGG.
1. Under the peculiar facts of this case, the attorneyclient privilege includes the identity of the client(s).
2. The factual disclosures required by the PCGG are not
limited to the identity of petitioners ACCRA lawyers'
alleged client(s) but extend to other privileged
matters.
IV
abuse of discretion in not requiring that the dropping of
party-defendants by the PCGG must be based on
reasonable and just grounds and with due consideration
to the constitutional right of petitioners ACCRA lawyers

to the equal protection of the law.
Petitioner Paraja G. Hayudini, likewise, filed his own motion
for reconsideration of the March 18, 1991 resolution which was
denied by respondent Sandiganbayan. Thus, he filed a separate
petition for certiorari, docketed as G.R. No. 108113, assailing
respondent Sandiganbayan's resolution on essentially the same
grounds averred by petitioners in G.R. No. 105938.
Petitioners contend that the exclusion of respondent Roco
as party-defendant in PCGG Case No. 33 grants him a favorable
treatment, on the pretext of his alleged undertaking to divulge
the identity of his client, giving him an advantage over them
who are in the same footing as partners in the ACCRA law firm.
Petitioners further argue that even granting that such an
undertaking has been assumed by private respondent Roco,
they are prohibited from revealing the identity of their principal
under their sworn mandate and fiduciary duty as lawyers to
uphold at all times the confidentiality of information obtained
during such lawyer-client relationship.
Respondent PCGG, through its counsel, refutes petitioners'
contention, alleging that the revelation of the identity of the
client is not within the ambit of the lawyer-client confidentiality
privilege, nor are the documents it required (deeds of
assignment) protected, because they are evidence of nominee
status.[13]
In his comment, respondent Roco asseverates that
respondent PCGG acted correctly in excluding him as partydefendant because he "(Roco) has not filed an Answer. PCGG
had therefore the right to dismiss Civil Case No. 0033 as to
Roco `without an order of court by filing a notice of
dismissal,'"[14] and he has undertaken to identify his principal.[15]
Petitioners' contentions are impressed with merit.
I
It is quite apparent that petitioners were impleaded by the

PCGG as co-defendants to force them to disclose the identity of
their clients. Clearly, respondent PCGG is not after petitioners
but the bigger fish as they say in street parlance. This ploy is
quite clear from the PCGGs willingness to cut a deal with
petitioners -- the names of their clients in exchange for
exclusion from the complaint.
The statement of the
Sandiganbayan in its questioned resolution dated March 18,
1992 is explicit:
ACCRA lawyers may take the heroic stance of not
revealing the identity of the client for whom they have
acted, i.e., their principal, and that will be their choice.
But until they do identify their clients, considerations of
whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The
ACCRA lawyers cannot excuse themselves from the
consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the
existence and identity of the client.
This is what appears to be the cause for which they
have been impleaded by the PCGG as defendants
herein. (Underscoring ours)
In a closely related case, Civil Case No. 0110 of the
Sandiganbayan, Third Division, entitled Primavera Farms, Inc.,
et al. vs. Presidential Commission on Good Government
respondent PCGG, through counsel Mario Ongkiko, manifested
at the hearing on December 5, 1991 that the PCGG wanted to
establish through the ACCRA that their so called client is Mr.
Eduardo Cojuangco; that it was Mr. Eduardo Cojuangco who
furnished all the monies to those subscription payments in
corporations included in Annex A of the Third Amended
Complaint; that the ACCRA lawyers executed deeds of trust and
deeds of assignment, some in the name of particular persons,
some in blank.
We quote Atty. Ongkiko:

ATTY. ONGKIKO:
With the permission of this Hon. Court. I propose to
establish through these ACCRA lawyers that, one, their
so-called client is Mr. Eduardo Cojuangco. Second, it
was Mr. Eduardo Cojuangco who furnished all the
monies to these subscription payments of these
corporations who are now the petitioners in this case.
Third, that these lawyers executed deeds of trust, some
in the name of a particular person, some in blank.
Now, these blank deeds are important to our claim that
some of the shares are actually being held by the
nominees for the late President Marcos. Fourth, they
also executed deeds of assignment and some of these
assignments have also blank assignees. Again, this is
important to our claim that some of the shares are for
Mr. Cojuangco and some are for Mr. Marcos. Fifth, that
most of these corporations are really just paper
corporations. Why do we say that? One: There are no
really fixed sets of officers, no fixed sets of directors at
the time of incorporation and even up to 1986, which is
the crucial year. And not only that, they have no
permits from the municipal authorities in Makati. Next,
actually all their addresses now are care of Villareal Law
Office. They really have no address on records. These
are some of the principal things that we would ask of
these nominees stockholders, as they called
themselves.[16]
It would seem that petitioners are merely standing in for
their clients as defendants in the complaint. Petitioners are
being prosecuted solely on the basis of activities and services
performed in the course of their duties as lawyers. Quite
obviously, petitioners inclusion as co-defendants in the
complaint is merely being used as leverage to compel them to
name their clients and consequently to enable the PCGG to nail
these clients. Such being the case, respondent PCGG has no

valid cause of action as against petitioners and should exclude
them from the Third Amended Complaint.
II
The nature of lawyer-client relationship is premised on the
Roman Law concepts of locatio conductio operarum (contract of
lease of services) where one person lets his services and
another hires them without reference to the object of which the
services are to be performed, wherein lawyers' services may be
compensated by honorarium or for hire,[17] and mandato
(contract of agency) wherein a friend on whom reliance could
be placed makes a contract in his name, but gives up all that he
gained by the contract to the person who requested him.[18] But
the lawyer-client relationship is more than that of the principalagent and lessor-lessee.
In modern day perception of the lawyer-client relationship,
an attorney is more than a mere agent or servant, because he
possesses special powers of trust and confidence reposed on
him by his client.[19] A lawyer is also as independent as the
judge of the court, thus his powers are entirely different from
and superior to those of an ordinary agent.[20] Moreover, an
attorney also occupies what may be considered as a "quasijudicial office" since he is in fact an officer of the Court [21] and
exercises his judgment in the choice of courses of action to be
taken favorable to his client.
Thus, in the creation of lawyer-client relationship, there are
rules, ethical conduct and duties that breathe life into it, among
those, the fiduciary duty to his client which is of a very delicate,
exacting and confidential character, requiring a very high
degree of fidelity and good faith,[22] that is required by reason
of necessity and public interest[23] based on the hypothesis that
abstinence from seeking legal advice in a good cause is an evil
which is fatal to the administration of justice.[24]
It is also the strict sense of fidelity of a lawyer to his client
that distinguishes him from any other professional in society.

This conception is entrenched and embodies centuries of
established and stable tradition.[25] In Stockton v. Ford,[26] the
U.S. Supreme Court held:
There are few of the business relations of life
involving a higher trust and confidence than that of
attorney and client, or generally speaking, one more
honorably and faithfully discharged; few more anxiously
guarded by the law, or governed by the sterner
principles of morality and justice; and it is the duty of
the court to administer them in a corresponding spirit,
and to be watchful and industrious, to see that
confidence thus reposed shall not be used to the
detriment or prejudice of the rights of the party
bestowing it.[27]
In our jurisdiction, this privilege takes off from the old Code
of Civil Procedure enacted by the Philippine Commission on
August 7, 1901. Section 383 of the Code specifically forbids
counsel, without authority of his client to reveal any
communication made by the client to him or his advice given
thereon in the course of professional employment.[28] Passed
on into various provisions of the Rules of Court, the attorneyclient privilege, as currently worded provides:
Sec. 24. Disqualification by reason of privileged
communication. - The following persons cannot testify
as to matters learned in confidence in the following
cases:
xxx
An attorney cannot, without the consent of his
client, be examined as to any communication
made by the client to him, or his advice given
thereon in the course of, or with a view to,
professional employment, can an attorneys
secretary, stenographer, or clerk be examined,
without the consent of the client and his

employer, concerning any fact the knowledge of
which has been acquired in such capacity.[29]
Further, Rule 138 of the Rules of Court states:
Sec. 20. It is the duty of an attorney:
(e) to maintain inviolate the confidence, and at
every peril to himself, to preserve the secrets of
his client, and to accept no compensation in
connection with his clients business except
from him or with his knowledge and approval.
This duty is explicitly mandated in Canon 17 of the Code of
Professional Responsibility which provides that:
Canon 17. A lawyer owes fidelity to the cause of
his client and he shall be mindful of the trust and
confidence reposed in him.
Canon 15 of the Canons of Professional Ethics also demands
a lawyer's fidelity to client:
The lawyer owes "entire devotion to the interest of
the client, warm zeal in the maintenance and defense of
his rights and the exertion of his utmost learning and
ability," to the end that nothing be taken or be withheld
from him, save by the rules of law, legally applied. No
fear of judicial disfavor or public popularity should
restrain him from the full discharge of his duty. In the
judicial forum the 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. But it is steadfastly to
be borne in mind that the great trust of the lawyer is to
be performed within and not without the bounds of the
law. The office of attorney does not permit, much less
does it demand of him for any client, violation of law or
any manner of fraud or chicanery. He must obey his

own conscience and not that of his client.
Considerations favoring confidentiality in lawyer-client
relationships are many and serve several constitutional and
policy concerns. In the constitutional sphere, the privilege gives
flesh to one of the most sacrosanct rights available to the
accused, the right to counsel. If a client were made to choose
between legal representation without effective communication
and disclosure and legal representation with all his secrets
revealed then he might be compelled, in some instances, to
either opt to stay away from the judicial system or to lose the
right to counsel. If the price of disclosure is too high, or if it
amounts to self incrimination, then the flow of information
would be curtailed thereby rendering the right practically
nugatory. The threat this represents against another sacrosanct
individual right, the right to be presumed innocent is at once
self-evident.
Encouraging full disclosure to a lawyer by one seeking legal
services opens the door to a whole spectrum of legal options
which would otherwise be circumscribed by limited information
engendered by a fear of disclosure. An effective lawyer-client
relationship is largely dependent upon the degree of confidence
which exists between lawyer and client which in turn requires a
situation which encourages a dynamic and fruitful exchange and
flow of information. It necessarily follows that in order to attain
effective representation, the lawyer must invoke the privilege
not as a matter of option but as a matter of duty and
professional responsibility.
The question now arises whether or not this duty may be
asserted in refusing to disclose the name of petitioners' client(s)
in the case at bar. Under the facts and circumstances obtaining
in the instant case, the answer must be in the affirmative.
As a matter of public policy, a clients identity should not be
shrouded in mystery.[30] Under this premise, the general rule in
our jurisdiction as well as in the United States is that a lawyer

may not invoke the privilege and refuse to divulge the name or
identity of his client.[31]
The reasons advanced for the general rule are well
established.
First, the court has a right to know that the client whose
privileged information is sought to be protected is flesh and
blood.
Second, the privilege begins to exist only after the attorneyclient relationship has been established. The attorney-client
privilege does not attach until there is a client.
Third, the privilege generally pertains to the subject matter
of the relationship.
Finally, due process considerations require that the
opposing party should, as a general rule, know his adversary.
A party suing or sued is entitled to know who his opponent
is.[32] He cannot be obliged to grope in the dark against
unknown forces.[33]
Notwithstanding these considerations, the general rule is
however qualified by some important exceptions.
1)
Client identity is privileged where a strong

probability exists that revealing the clients name
would implicate that client in the very activity for
which he sought the lawyers advice.
In Ex-Parte Enzor,[34] a state supreme court reversed a

lower court order requiring a lawyer to divulge the name of her
client on the ground that the subject matter of the relationship
was so closely related to the issue of the clients identity that
the privilege actually attached to both.
In Enzor, the
unidentified client, an election official, informed his attorney in
confidence that he had been offered a bribe to violate election
laws or that he had accepted a bribe to that end. In her
testimony, the attorney revealed that she had advised her client
to count the votes correctly, but averred that she could not
remember whether her client had been, in fact, bribed. The
lawyer was cited for contempt for her refusal to reveal his
clients identity before a grand jury. Reversing the lower courts
contempt orders, the state supreme court held that under the
circumstances of the case, and under the exceptions described
above, even the name of the client was privileged.
U.S. v. Hodge and Zweig,[35] involved the same exception,
i.e. that client identity is privileged in those instances where a

strong probability exists that the disclosure of the client's
identity would implicate the client in the very criminal activity
for which the lawyers legal advice was obtained.
The Hodge case involved federal grand jury proceedings

inquiring into the activities of the Sandino Gang, a gang
involved in the illegal importation of drugs in the United States.
The respondents, law partners, represented key witnesses and
suspects including the leader of the gang, Joe Sandino.
In connection with a tax investigation in November of
1973, the IRS issued summons to Hodge and Zweig, requiring
them to produce documents and information regarding payment
received by Sandino on behalf of any other person, and vice
versa. The lawyers refused to divulge the names. The Ninth
Circuit of the United States Court of Appeals, upholding nondisclosure under the facts and circumstances of the case, held:
A clients identity and the nature of that clients fee
arrangements may be privileged where the person invoking the
privilege can show that a strong probability exists that
disclosure of such information would implicate that client in the
very criminal activity for which legal advice was sought Baird v.
Koerner, 279 F.2d at 680. While in Baird Owe enunciated this
rule as a matter of California law, the rule also reflects federal
law. Appellants contend that the Baird exception applies to this
case.
The Baird exception is entirely consonant with the principal

policy behind the attorney-client privilege. In order to promote
freedom of consultation of legal advisors by clients, the
apprehension of compelled disclosure from the legal advisors
must be removed; hence, the law must prohibit such disclosure
except on the clients consent. 8 J. Wigmore, supra sec. 2291,
at 545. In furtherance of this policy, the clients identity and
the nature of his fee arrangements are, in exceptional cases,
protected as confidential communications.[36]
2) Where disclosure would open the client to civil
liability, his identity is privileged. For instance, the
peculiar facts and circumstances of Neugass v.
Terminal Cab Corporation,[37] prompted the New York
Supreme Court to allow a lawyers claim to the
effect that he could not reveal the name of his client
because this would expose the latter to civil litigation.
In the said case, Neugass, the plaintiff, suffered injury when
the taxicab she was riding, owned by respondent corporation,
collided with a second taxicab, whose owner was unknown.
Plaintiff brought action both against defendant corporation and
the owner of the second cab, identified in the information only
as John Doe. It turned out that when the attorney of defendant
corporation appeared on preliminary examination, the fact was
somehow revealed that the lawyer came to know the name of
the owner of the second cab when a man, a client of the
insurance company, prior to the institution of legal action, came
to him and reported that he was involved in a car accident. It
was apparent under the circumstances that the man was the
owner of the second cab. The state supreme court held that
the reports were clearly made to the lawyer in his professional
capacity. The court said:
That his employment came about through the fact that the
insurance company had hired him to defend its policyholders
seems immaterial. The attorney in such cases is clearly the
attorney for the policyholder when the policyholder goes to him
to report an occurrence contemplating that it would be used in

an action or claim against him.[38]
xxx
xxx
xxx.
All communications made by a client to his counsel, for the

purpose of professional advice or assistance, are privileged,
whether they relate to a suit pending or contemplated, or to
any other matter proper for such advice or aid; x x x And
whenever the communication made, relates to a matter so
connected with the employment as attorney or counsel as to
afford presumption that it was the ground of the address by the
client, then it is privileged from disclosure. xxx.
It appears... that the name and address of the owner of the
second cab came to the attorney in this case as a confidential
communication. His client is not seeking to use the courts, and
his address cannot be disclosed on that theory, nor is the
present action pending against him as service of the summons
on him has not been effected. The objections on which the
court reserved decision are sustained.[39]
In the case of Matter of Shawmut Mining Company,[40] the
lawyer involved was required by a lower court to disclose
whether he represented certain clients in a certain transaction.
The purpose of the courts request was to determine whether
the unnamed persons as interested parties were connected with
the purchase of properties involved in the action. The lawyer
refused and brought the question to the State Supreme Court.
Upholding the lawyers refusal to divulge the names of his
clients the court held:
If it can compel the witness to state, as directed by the
order appealed from, that he represented certain persons in the
purchase or sale of these mines, it has made progress in
establishing by such evidence their version of the litigation. As
already suggested, such testimony by the witness would compel
him to disclose not only that he was attorney for certain people,
but that, as the result of communications made to him in the
course of such employment as such attorney, he knew that they

were interested in certain transactions. We feel sure that under
such conditions no case has ever gone to the length of
compelling an attorney, at the instance of a hostile litigant, to
disclose not only his retainer, but the nature of the transactions
to which it related, when such information could be made the
basis of a suit against his client.[41]
3) Where the governments lawyers have no case against
an attorneys client unless, by revealing the clients name, the
said name would furnish the only link that would form the chain
of testimony necessary to convict an individual of a crime, the
clients name is privileged.
In Baird vs Korner,[42] a lawyer was consulted by the
accountants and the lawyer of certain undisclosed taxpayers
regarding steps to be taken to place the undisclosed taxpayers
in a favorable position in case criminal charges were brought
against them by the U.S. Internal Revenue Service (IRS).
It appeared that the taxpayers returns of previous years
were probably incorrect and the taxes understated. The clients
themselves were unsure about whether or not they violated tax
laws and sought advice from Baird on the hypothetical
possibility that they had. No investigation was then being
undertaken by the IRS of the taxpayers. Subsequently, the
attorney of the taxpayers delivered to Baird the sum of
$12,706.85, which had been previously assessed as the tax due,
and another amount of money representing his fee for the
advice given. Baird then sent a check for $12,706.85 to the IRS
in Baltimore, Maryland, with a note explaining the payment, but
without naming his clients. The IRS demanded that Baird
identify the lawyers, accountants, and other clients involved.
Baird refused on the ground that he did not know their names,
and declined to name the attorney and accountants because
this constituted privileged communication. A petition was filed
for the enforcement of the IRS summons. For Bairds repeated
refusal to name his clients he was found guilty of civil contempt.
The Ninth Circuit Court of Appeals held that, a lawyer could not
be forced to reveal the names of clients who employed him to
pay sums of money to the government voluntarily in settlement
of undetermined income taxes, unsued on, and with no
government audit or investigation into that clients income tax
liability pending. The court emphasized the exception that a
clients name is privileged when so much has been revealed
concerning the legal services rendered that the disclosure of the
clients identity exposes him to possible investigation and
sanction by government agencies. The Court held:
The facts of the instant case bring it squarely within
that exception to the general rule. Here money was
received by the government, paid by persons who
thereby admitted they had not paid a sufficient amount
in income taxes some one or more years in the past.
The names of the clients are useful to the government
for but one purpose - to ascertain which taxpayers think
they were delinquent, so that it may check the records
for that one year or several years. The voluntary
nature of the payment indicates a belief by the
taxpayers that more taxes or interest or penalties are
due than the sum previously paid, if any. It indicates a
feeling of guilt for nonpayment of taxes, though
whether it is criminal guilt is undisclosed. But it may
well be the link that could form the chain of testimony
necessary to convict an individual of a federal crime.
Certainly the payment and the feeling of guilt are the
reasons the attorney here involved was employed - to
advise his clients what, under the circumstances, should
be done.[43]
Apart from these principal exceptions, there exist other
situations which could qualify as exceptions to the general rule.
For example, the content of any client communication to a
lawyer lies within the privilege if it is relevant to the subject
matter of the legal problem on which the client seeks legal
assistance.[44] Moreover, where the nature of the attorney-client

relationship has been previously disclosed and it is the identity
which is intended to be confidential, the identity of the client
has been held to be privileged, since such revelation would
otherwise result in disclosure of the entire transaction.[45]
Summarizing these exceptions, information relating to the
identity of a client may fall within the ambit of the privilege
when the clients name itself has an independent significance,
such that disclosure would then reveal client confidences.[46]
The circumstances involving the engagement of lawyers in
the case at bench, therefore, clearly reveal that the instant case
falls under at least two exceptions to the general rule. First,
disclosure of the alleged client's name would lead to establish
said client's connection with the very fact in issue of the case,
which is privileged information, because the privilege, as stated
earlier, protects the subject matter or the substance (without
which there would be no attorney-client relationship).
The link between the alleged criminal offense and the legal
advice or legal service sought was duly established in the case
at bar, by no less than the PCGG itself. The key lies in the three
specific conditions laid down by the PCGG which constitutes
petitioners ticket to non-prosecution should they accede
thereto:
(a) the disclosure of the identity of its clients;
(b) submission of documents substantiating the
lawyer-client relationship; and
(c) the submission of the deeds of assignment
petitioners executed in favor of their clients covering
their respective shareholdings.
From these conditions, particularly the third, we can readily
deduce that the clients indeed consulted the petitioners, in their
capacity as lawyers, regarding the financial and corporate
structure, framework and set-up of the corporations in question.
In turn, petitioners gave their professional advice in the form of,

among others, the aforementioned deeds of assignment
covering their clients shareholdings.
There is no question that the preparation of the aforestated
documents was part and parcel of petitioners legal service to
their clients. More important, it constituted an integral part of
their duties as lawyers. Petitioners, therefore, have a legitimate
fear that identifying their clients would implicate them in the
very activity for which legal advice had been sought, i.e., the
alleged accumulation of ill-gotten wealth in the aforementioned
corporations.
Furthermore, under the third main exception, revelation of
the client's name would obviously provide the necessary link for
the prosecution to build its case, where none otherwise exists.
It is the link, in the words of Baird, that would inevitably form
the chain of testimony necessary to convict the (client) of a...
crime."[47]
An important distinction must be made between a case
where a client takes on the services of an attorney for illicit
purposes, seeking advice about how to go around the law for
the purpose of committing illegal activities and a case where a
client thinks he might have previously committed something
illegal and consults his attorney about it. The first case clearly
does not fall within the privilege because the same cannot be
invoked for purposes illegal. The second case falls within the
exception because whether or not the act for which the advice
turns out to be illegal, his name cannot be used or disclosed if
the disclosure leads to evidence, not yet in the hands of the
prosecution, which might lead to possible action against him.
These cases may be readily distinguished, because the
privilege cannot be invoked or used as a shield for an illegal act,
as in the first example; while the prosecution may not have a
case against the client in the second example and cannot use
the attorney client relationship to build up a case against the
latter. The reason for the first rule is that it is not within the
professional character of a lawyer to give advice on the
commission of a crime.[48] The reason for the second has been
stated in the cases above discussed and are founded on the
same policy grounds for which the attorney-client privilege, in
general, exists.
In Matter of Shawmut Mining Co., supra, the appellate court
therein stated that "under such conditions no case has ever yet
gone to the length of compelling an attorney, at the instance of
a hostile litigant, to disclose not only his retainer, but the nature
of the transactions to which it related, when such information
could be made the basis of a suit against his client.[49]
"Communications made to an attorney in the course of any
personal employment, relating to the subject thereof,
and which may be supposed to be drawn out in consequence of
the relation in which the parties stand to each other, are under
the seal of confidence and entitled to protection as privileged
communications."[50] Where the communicated information,
which clearly falls within the privilege, would suggest possible
criminal activity but there would be not much in the information
known to the prosecution which would sustain a charge except
that revealing the name of the client would open up other
privileged information which would substantiate the
prosecutions suspicions, then the clients identity is so
inextricably linked to the subject matter itself that it falls within
the protection. The Baird exception, applicable to the instant
case, is consonant with the principal policy behind the privilege,
i.e., that for the purpose of promoting freedom of consultation
of legal advisors by clients, apprehension of compelled
disclosure from attorneys must be eliminated. This exception
has likewise been sustained in In re Grand Jury Proceedings[51]
and Tillotson v. Boughner.[52] What these cases unanimously
seek to avoid is the exploitation of the general rule in what may
amount to a fishing expedition by the prosecution.
There are, after all, alternative sources of information
available to the prosecutor which do not depend on utilizing a

defendant's counsel as a convenient and readily available
source of information in the building of a case against the latter.
Compelling disclosure of the client's name in circumstances such
as the one which exists in the case at bench amounts to
sanctioning fishing expeditions by lazy prosecutors and litigants
which we cannot and will not countenance. When the nature of
the transaction would be revealed by disclosure of an attorney's
retainer, such retainer is obviously protected by the privilege.[53]
It follows that petitioner attorneys in the instant case owe their
client(s) a duty and an obligation not to disclose the latter's
identity which in turn requires them to invoke the privilege.
In fine, the crux of petitioners' objections ultimately hinges
on their expectation that if the prosecution has a case against
their clients, the latter's case should be built upon evidence
painstakingly gathered by them from their own sources and not
from compelled testimony requiring them to reveal the name of
their clients, information which unavoidably reveals much about
the nature of the transaction which may or may not be illegal.
The logical nexus between name and nature of transaction is so
intimate in this case that it would be difficult to simply
dissociate one from the other. In this sense, the name is as
much "communication" as information revealed directly about
the transaction in question itself, a communication which is
clearly and distinctly privileged. A lawyer cannot reveal such
communication without exposing himself to charges of violating
a principle which forms the bulwark of the entire attorney-client
relationship.
The uberrimei fidei relationship between a lawyer and his
client therefore imposes a strict liability for negligence on the
former. The ethical duties owing to the client, including
confidentiality, loyalty, competence, diligence as well as the
responsibility to keep clients informed and protect their rights to
make decisions have been zealously sustained. In Milbank,
Tweed, Hadley and McCloy v. Boon,[54] the US Second District
Court rejected the plea of the petitioner law firm that it

breached its fiduciary duty to its client by helping the latter's
former agent in closing a deal for the agent's benefit only after
its client hesitated in proceeding with the transaction, thus
causing no harm to its client. The Court instead ruled that
breaches of a fiduciary relationship in any context comprise a
special breed of cases that often loosen normally stringent
requirements of causation and damages, and found in favor of
the client.
To the same effect is the ruling in Searcy, Denney, Scarola,
Barnhart, and Shipley P.A. v. Scheller[55] requiring strict
obligation of lawyers vis-a-vis clients. In this case, a contingent
fee lawyer was fired shortly before the end of completion of his
work, and sought payment quantum meruit of work done. The
court, however, found that the lawyer was fired for cause after
he sought to pressure his client into signing a new fee
agreement while settlement negotiations were at a critical
stage.
While the client found a new lawyer during the
interregnum, events forced the client to settle for less than
what was originally offered. Reiterating the principle of
fiduciary duty of lawyers to clients in Meinhard v. Salmon[56]
famously attributed to Justice Benjamin Cardozo that "Not
honesty alone, but the punctilio of an honor the most sensitive,
is then the standard of behavior," the US Court found that the
lawyer involved was fired for cause, thus deserved no attorney's
fees at all.
The utmost zeal given by Courts to the protection of the
lawyer-client confidentiality privilege and lawyer's loyalty to his
client is evident in the duration of the protection, which exists
not only during the relationship, but extends even after the
termination of the relationship.[57]
Such are the unrelenting duties required of lawyers vis-a-vis
their clients because the law, which the lawyers are sworn to
uphold, in the words of Oliver Wendell Holmes,[58] "xxx is an
exacting goddess, demanding of her votaries in intellectual and
moral discipline." The Court, no less, is not prepared to accept

respondents position without denigrating the noble profession
that is lawyering, so extolled by Justice Holmes in this wise:
Every calling is great when greatly pursued. But
what other gives such scope to realize the spontaneous
energy of one's soul? In what other does one plunge
so deep in the stream of life - so share its passions its
battles, its despair, its triumphs, both as witness and
actor? x x x But that is not all. What a subject is this
in which we are united - this abstraction called the Law,
wherein as in a magic mirror, we see reflected, not only
in our lives, but the lives of all men that have been.
When I think on this majestic theme my eyes dazzle. If
we are to speak of the law as our mistress, we who are
here know that she is a mistress only to be won with
sustained and lonely passion - only to be won by
straining all the faculties by which man is likened to
God.
We have no choice but to uphold petitioners' right not to
reveal the identity of their clients under pain of the breach of
fiduciary duty owing to their clients, because the facts of the
instant case clearly fall within recognized exceptions to the rule
that the clients name is not privileged information.
UCPB, UNICOM and others and that through insidious means

and machinations, ACCRA, using its wholly-owned investment
arm, ACCRA Investments Corporation, became the holder of
approximately fifteen million shares representing roughly 3.3%
of the total capital stock of UCPB as of 31 March 1987. The
PCGG wanted to establish through the ACCRA lawyers that Mr.
Cojuangco is their client and it was Cojuangco who furnished all
the monies to the subscription payment; hence, petitioners
acted as dummies, nominees and/or agents by allowing
themselves, among others, to be used as instrument in
accumulating ill-gotten wealth through government concessions,
etc., which acts constitute gross abuse of official position and
authority, flagrant breach of public trust, unjust enrichment,
violation of the Constitution and laws of the Republic of the
Philippines.
By compelling petitioners, not only to reveal the identity of
their clients, but worse, to submit to the PCGG documents
substantiating the client-lawyer relationship, as well as deeds of
assignment petitioners executed in favor of its clients covering
their respective shareholdings, the PCGG would exact from
petitioners a link that would inevitably form the chain of
testimony necessary to convict the (client) of a crime.
III
If we were to sustain respondent PCGG that the lawyerclient confidential privilege under the circumstances obtaining
here does not cover the identity of the client, then it would
expose the lawyers themselves to possible litigation by their
clients in view of the strict fiduciary responsibility imposed on
them in the exercise of their duties.
In response to petitioners' last assignment of error,

respondents allege that the private respondent was dropped as
party defendant not only because of his admission that he acted
merely as a nominee but also because of his undertaking to
testify to such facts and circumstances "as the interest of truth
may require, which includes... the identity of the principal."[59]
The complaint in Civil Case No. 0033 alleged that the

defendants therein, including herein petitioners and Eduardo
Cojuangco, Jr. conspired with each other in setting up through
the use of coconut levy funds the financial and corporate
framework and structures that led to the establishment of
First, as to the bare statement that private respondent

merely acted as a lawyer and nominee, a statement made in his
out-of-court settlement with the PCGG, it is sufficient to state
that petitioners have likewise made the same claim not merely
out-of- court but also in their Answer to plaintiff's Expanded
Amended Complaint, signed by counsel, claiming that their acts

were made in furtherance of "legitimate lawyering.[60] Being
"similarly situated" in this regard, public respondents must show
that there exist other conditions and circumstances which would
warrant their treating the private respondent differently from
petitioners in the case at bench in order to evade a violation of
the equal protection clause of the Constitution.
To this end, public respondents contend that the primary
consideration behind their decision to sustain the PCGG's
dropping of private respondent as a defendant was his promise
to disclose the identities of the clients in question. However,
respondents failed to show - and absolutely nothing exists
in the records of the case at bar - that private respondent
actually revealed the identity of his client(s) to the PCGG. Since
the undertaking happens to be the leitmotif of the entire

arrangement between Mr. Roco and the PCGG, an undertaking
which is so material as to have justified PCGG's special
treatment exempting the private respondent from prosecution,
respondent Sandiganbayan should have required proof of the
undertaking more substantial than a "bare assertion" that
private respondent did indeed comply with the undertaking .
Instead, as manifested by the PCGG, only three documents
were submitted for the purpose, two of which were mere
requests for re-investigation and one simply disclosed certain
clients which petitioners (ACCRA lawyers) were themselves
willing to reveal. These were clients to whom both petitioners
and private respondent rendered legal services while all of them
were partners at ACCRA, and were not the clients which the
PCGG wanted disclosed for the alleged questioned
transactions.[61]
To justify the dropping of the private respondent from the
case or the filing of the suit in the respondent court without
him, therefore, the PCGG should conclusively show that Mr.
Roco was treated as a species apart from the rest of the ACCRA
lawyers on the basis of a classification which made substantial
distinctions based on real differences. No such substantial

distinctions exist from the records of the case at bench, in
violation of the equal protection clause.
The equal protection clause is a guarantee which provides a
wall of protection against uneven application of statutes and
regulations. In the broader sense, the guarantee operates
against uneven application of legal norms so that all persons
under similar circumstances would be accorded the same
treatment.[62] Those who fall within a particular class ought to
be treated alike not only as to privileges granted but also as to
the liabilities imposed.
x x x. What is required under this constitutional
guarantee is the uniform operation of legal norms so
that all persons under similar circumstances would be
accorded the same treatment both in the privileges
conferred and the liabilities imposed. As was noted in a
recent decision: Favoritism and undue preference
cannot be allowed. For the principle is that equal
protection and security shall be given to every person
under circumstances, which if not identical are
analogous. If law be looked upon in terms of burden or
charges, those that fall within a class should be treated
in the same fashion, whatever restrictions cast on some
in the group equally binding the rest.[63]
We find that the condition precedent required by the
respondent PCGG of the petitioners for their exclusion as
parties-defendants in PCGG Case No. 33 violates the lawyerclient confidentiality privilege. The condition also constitutes a
transgression by respondents Sandiganbayan and PCGG of the
equal protection clause of the Constitution.[64] It is grossly unfair
to exempt one similarly situated litigant from prosecution
without allowing the same exemption to the others. Moreover,
the PCGGs demand not only touches upon the question of the
identity of their clients but also on documents related to the
suspected transactions, not only in violation of the attorneyPALE | Imprescriptibility of Disbarment & Conflict of Interest | 19
client privilege but also of the constitutional right against selfincrimination. Whichever way one looks at it, this is a fishing
expedition, a free ride at the expense of such rights.
An argument is advanced that the invocation by petitioners
of the privilege of attorney-client confidentiality at this stage of
the proceedings is premature and that they should wait until
they are called to testify and examine as witnesses as to
matters learned in confidence before they can raise their
objections. But petitioners are not mere witnesses. They are
co-principals in the case for recovery of alleged ill-gotten
wealth. They have made their position clear from the very
beginning that they are not willing to testify and they cannot be
compelled to testify in view of their constitutional right against
self-incrimination and of their fundamental legal right to
maintain inviolate the privilege of attorney-client confidentiality.
promulgated on March 18, 1992 and May 21, 1992 are hereby
ANNULLED and SET ASIDE. Respondent Sandiganbayan is
further ordered to exclude petitioners Teodoro D. Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,
*
Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and
Paraja G. Hayuduni as parties-defendants in SB Civil Case No.
0033 entitled "Republic of the Philippines v. Eduardo Cojuangco,
Jr., et al.".
SO ORDERED.
It is clear then that the case against petitioners should

never be allowed to take its full course in the Sandiganbayan.
Petitioners should not be made to suffer the effects of further
litigation when it is obvious that their inclusion in the complaint
arose from a privileged attorney-client relationship and as a
means of coercing them to disclose the identities of their clients.
To allow the case to continue with respect to them when this
Court could nip the problem in the bud at this early opportunity
would be to sanction an unjust situation which we should not
here countenance. The case hangs as a real and palpable
threat, a proverbial Sword of Damocles over petitioners' heads.
It should not be allowed to continue a day longer.
While we are aware of respondent PCGGs legal mandate to
recover ill-gotten wealth, we will not sanction acts which violate
the equal protection guarantee and the right against selfincrimination and subvert the lawyer-client confidentiality
privilege.
WHEREFORE, IN VIEW OF THE FOREGOING, the
Resolutions of respondent Sandiganbayan (First Division)
AustriaMartinez,
Corona,*
EN BANC
Carpio
Morales,
Callejo
NORTHWESTERN UNIVERSITY,
6632
Sr.,
A.C. No.
Azcuna,
INC., and BEN A. NICOLAS,
Tinga,
Complainants,
Present:
ChicoNazario, and
Jr., CJ,
JJ
Davide
Garcia,
Puno,
Promulgated:
Panganiban,
Atty. MACARIO D. ARQUILLO,
Quisumbing,
YnaresSantiago,
SandovalGutierrez,
- versus -
Respondent.
August 2, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- --- -- -- x
Carpio,
DECISION
PANGANIBAN, J.:
R epresenting conflicting interests is prohibited by the Code of

Professional Responsibility.
Unless all the affected
clients
__________________
On official leave.
written consent is given after a full disclosure of all relevant

facts, attorneys guilty of representing conflicting interests shall
as a rule be sanctioned with suspension from the practice of
law.
The Case and the Facts
This administrative case stems from a sworn LetterComplaint[1] filed with the Integrated Bar of the PhilippinesCommission on Bar Discipline (IBP-CBD) by Ben A. Nicolas,
acting for himself and on behalf of Northwestern University,
Inc. In that Letter-Complaint, Atty. Macario D. Arquillo was
charged with deceit, malpractice, gross misconduct and/or
violation of his oath as attorney by representing conflicting
interests. The material averments of the Complaint are
summarized by the IBP-CBD as follows:
Herein
[c]omplainants,
Northwestern
University, Inc. and Mr. Ben A. Nicolas, accuses
(sic) herein [r]espondent, Atty. Macario D.
Arquillo, of engaging in conflicting interest in a
case before the National Labor Relations
Commission, Regional Arbitration Branch No. 1,
San Fernando, La Union.
Complainant alleges that in a consolidated

case, herein [r]espondent appeared and acted as
counsels for both complainants (eight out of the
eighteen complainants therein) and respondent
(one out of the ten respondents therein).
In a consolidation of NLRC Cases [Nos.] 105-1086-97, 1-05-1087-97, 1-05-1088-97, 1-051091-97, 1-05-1092-97, 1-05-1097-97, 1-05-110997, 1-05-1096-97 (consolidated cases), herein
[r]espondent
appeared
as
counsel
for
complainants therein, Teresita A. Velasco,
Gervacio A. Velasco, Mariel S. Hernando, Virginio
C. Rasos, Bonifacio S. Blas, Ronald A. Daoang,
Luzviminda T. Urcio and Araceli Quimoyog. In the
very same consolidated case, [r]espondent
was also the counsel of one of the respondents
therein, Jose G. Castro.
Complainants, as their evidence, submitted

the Motion to Dismiss dated August 12, 1997 filed
by Jose G. Castro, represented by his counsel,
herein [r]espondent filed before the NLRC of San
Fernando, La Union. Sixteen (16) days later or on
August
28, 1997, [r]espondent
filed
a
Complainants Consolidated Position Paper, this
time representing some of the complainants in
the very same consolidated case.[2] (Citations
omitted)
Respondent failed to file his Answer to the Complaint

despite a June 24 1998 Order[3] of the IBP-CBD directing him to
do so. Even after receiving five notices, he failed to appear in
any of the scheduled hearings. Consequently, he was deemed
to have waived his right to participate in the proceedings.
Thereafter, the complainants were ordered to submit their
verified position paper with supporting documents, after which

the case was to be deemed submitted for decision.[4] In their
Manifestation[5] dated August 30, 2004, they said that they
would no longer file a position paper. They agreed to submit
the case for decision on the basis of their Letter-Affidavit dated
March 16, 1998, together with all the accompanying
documents.
Report and Recommendation of the IBP
In his Report,[6] Commissioner Dennis B. Funa found

respondent guilty of violating the conflict-of-interests rule under
the Code of Professional Responsibility. Thus, the former
recommended the latters suspension from the practice of law
for a period of six (6) months.
In Resolution No. XVI-2004-415 dated October 7, 2004,

the Board of Governors of the IBP adopted the Report and
Recommendation of Commissioner Funa, with the modification
that the period of suspension was increased to two (2) years.
On December 12, 2004, the Resolution and the records

of the case were transmitted to this Court for final action,
pursuant to Section 12(b) of Rule 139-B of the Rules of Court.
On January 20, 2005, respondent filed a Motion for
Reconsideration to set aside Resolution No. XVI-2004-415. The
IBP denied the Motion.
The Courts Ruling

We agree with the findings of the IBP Board of

Governors, but reduce the recommended period of suspension
to one year.
Administrative Liability of Respondent
The Code of Professional Responsibility requires lawyers

to observe candor, fairness and loyalty in all their dealings and
transactions with their clients.[7] Corollary to this duty, lawyers
shall not represent conflicting interests, except with all the
concerned clients written consent, given after a full disclosure
of the facts.[8]
When a lawyer represents two or more opposing parties,

there is a conflict of interests, the existence of which is
determined by three separate tests:
(1) when, in
representation of one client, a lawyer is required to fight for an
issue or claim, but is also duty-bound to oppose it for another
client; (2) when the acceptance of the new retainer will require
an attorney to perform an act that may injuriously affect the
first client or, when called upon in a new relation, to use against
the first one any knowledge acquired through their professional
connection; or (3) when the acceptance of a new relation would
prevent the full discharge of an attorneys duty to give
undivided fidelity and loyalty to the client or would invite
suspicion of unfaithfulness or double dealing in the performance
of that duty.[9]
In the present case, Atty. Macario D. Arquillo, as counsel

for Respondent Jose C. Castro in NLRC Case Nos. I-05-1083-97
to I-05-1109-97, filed a Motion to Dismiss those cases. Shortly
thereafter, a position paper was filed by Atty. Arquillo as
counsel for several complainants in consolidated NLRC Case
Nos. I-05-1087-97, I-05-1088-97, I-05-1091-97, I-05-1092-97,
I-05-1096-97, I-05-1097-97, and I-05-1109-97. All the cases in
the second set were included in the first one, for which he had
filed the subject Motion to Dismiss. Furthermore, in his position
paper for the complainants, Atty. Arquillo protected his other
client, Respondent Jose C. Castro, in these words:
3. More than lack of valid cause for the

dismissal of complainants, respondents, except
Atty. Jose C. Castro and Atty. Ernesto B.
Asuncion, should be made accountable for not
according complainants their right to due
process.[10]
In his two-page Motion for Reconsideration, Atty. Arquillo

claims that there was no conflict of interest in his representation
of both the respondent and the complainants in the same
consolidated cases, because all of them were allegedly on the
same side. Attaching to the Motion the Decision of Labor
Arbiter Norma C. Olegario on the consolidated NLRC cases, Atty.
Arquillo theorizes that her judgment absolved Castro of personal
liability for the illegal dismissal of the complainants; this fact
allegedly showed that there was no conflict in the interests of all
the parties concerned.
This Court does not agree. Atty. Arquillos acts cannot

be justified by the fact that, in the end, Castro was proven to be
not personally liable for the claims of the dismissed employees.
Having agreed to represent one of the opposing parties first,
the lawyer should have known that there was an obvious
conflict of interests, regardless of his alleged belief that they
were all on the same side. It cannot be denied that the
dismissed employees were the complainants in the same cases
in which Castro was one of the respondents. Indeed,
Commissioner Funa correctly enounced:
As counsel for complainants, [r]espondent

had the duty to oppose the Motion to Dismiss
filed by Jose G. Castro. But under the
circumstance, it would be impossible since
[r]espondent is also the counsel of Jose G.
Castro. And it appears that it was [r]espondent
who prepared the Motion to Dismiss, which he
should be opposing [a]s counsel of Jose G. Castro,
Respondent had the duty to prove the
Complaint wrong. But Respondent cannot do
this because he is the counsel for the
complainants. Here lies the inconsistency.
The inconsistency of interests is very clear.
Thus it has been noted
The attorney in that situation

will not be able to pursue, with
vigor and zeal, the clients claim
against the other and to properly
represent the latter in the unrelated
action, or, if he can do so, he

cannot avoid being suspected by
the defeated client of disloyalty or
partiality in favor of the successful
client. The foregoing considerations
will strongly tend to deprive the
relation of attorney and client of
those special elements which make
it one of trust and confidence[.]
(Legal Ethics, Agpalo, p. 230, 4th

ed.; In re De la Rosa, 21 Phil.
258)[11]
An attorney cannot represent adverse interests. It is a

hornbook doctrine grounded on public policy that a lawyers
representation of both sides of an issue is highly improper. The
proscription applies when the conflicting interests arise with
respect to the same general matter, however slight such conflict
may be. It applies even when the attorney acts from honest
intentions or in good faith.[12]
The IBP Board of Governors recommended that

respondent be suspended from the practice of law for two
years. Considering, however, prior rulings in cases also
involving attorneys representing conflicting interests, we reduce
the suspension to one (1) year.[13]
WHEREFORE, Atty. Macario D. Arquillo is found GUILTY

of misconduct and is hereby SUSPENDED from the practice of
law for a period of one (1) year effective upon his receipt of this
Decision, with a warning that a similar infraction shall be dealt

with more severely in the future.
SO ORDERED.
EN BANC
[A.M. No. MTJ-95-1053. January 2, 1997]
SPOUSES
MAKADAYA SADIK and USODAN SADIK,

vs. JUDGE ABDALLAH CASAR,
complainants,
respondent.
DECISION
PER CURIAM:
The case before us stemmed from a verified complaint filed
by Spouses Makadaya and Usodan Sadik charging Judge
Abdallah Casar, Municipal Circuit Trial Court of KolambuganTangcal, Lanao del Norte with misconduct and misappropriation.
Judge Casar filed his answer dated February 28, 1995
averring that the complaint is merely for harassment and
intended to ruin his reputation.
In the resolution of August 14, 1995, this Court referred this
case to Executive Judge Valerio M. Salazar of the Regional Trial
Court of Iligan City and Lanao del Norte, Branch 6 for
investigation, report and recommendation.
In his Report and Recommendation dated November 25,
1995, the Investigating Judge made the following findings:
"The basic facts are not in dispute, to wit:
1. On February 14, 1985, one Lekiya Paito
filed an application for life insurance with the
Great Pacific Life Assurance Corporation
(Grepalife) in Cotabato City, Exh. 5. The
application was approved and Policy No.
0503033 was issued in her name for the

amount of P30,000.00 with an accidental death
benefit rider. Named as beneficiaries were her
daughters, Linang Minalang and Makadaya
Sadik. She paid the initial premium of P410.00.
2. On October 12, 1985, Lekiya Paito died
in Pagayawan, Tamparan, Lanao del Sur.
3. The beneficiaries and/or through their
representatives sought for and obtained the
assistance of respondent, who was then a trial
attorney of the Bureau of Forest Development,
Cotabato City, to pursue the approval of their
claim for payment of the insurance benefits
with Grepalife. Respondent made the necessary
follow-ups but in due course Grepalife denied
the claim on the grounds of misrepresentation
and concealment.
4. On October 10, 1986, respondent, as
counsel for the beneficiaries, filed a complaint
in the Regional Trial Court, Br. 13, Cotabato
City which was docketed therein as Civil Case
No. 2747 entitled: 'Makadaya L. Sadik and
Linang Minalang, plaintiffs versus Great Pacific
Life Assurance Corporation, defendant' for
Specific Performance.
5. On November 17, 1989, the Regional
Trial Court rendered a decision in favor of
plaintiffs and against the defendant ordering
the latter to pay to the former the sum of
P30,000.00 as 'benefit due them under
Insurance Policy No. 503033.' The court denied
plaintiffs' claim for double indemnity of
P60,000.00 under the accidental death rider. At
this time, respondent was already the Presiding
Judge of the 5th Municipal Circuit Trial Court of

Kolambugan-Maigo
(now,
MCTC
of
Kolambugan-Tangcal), having assumed such
office on September 1, 1989, Exh. 7.
6. Upon receipt of the decision, respondent
as counsel for plaintiffs filed a notice of appeal
to the Court of Appeals even as defendant
likewise
filed
an
appeal.
Respondent
represented the plaintiffs in the appeal. On
September 22, 1992, the Court of Appeals
affirmed in toto the decision of the lower court.
Defendant elevated the case on petition for
review to the Supreme Court which dismissed
the petition.
7. After the dismissal of its petition by the
Supreme Court, Grepalife filed a Manifestation
dated 6 July 1993 with the Regional Trial Court,
Br. 13, Cotabato City declaring its willingness to
pay the judgment award and depositing with
said court RCBC check No. 62837 in the amount
of P30,000.00 payable to the plaintiffs. Copy of
the manifestation was furnished to 'Atty.
Abdallah M. Casar, Counsel for the Plaintiffs,
Kolambugan, Lanao del Norte' (pp. 44 & 55,
Records).
8. On October 1, 1992, respondent
collected the check from the Clerk of Court of
the Regional Trial Court, Br. 13, Cotabato City
and thereafter cashed it.
9. Respondent did not deliver the said
money judgment to the plaintiffs.
10. On January 26, 1995, complainants
filed their administrative complaint.
Respondent admitted that he retained the sum of

P30,000.00 representing the judgment award in Civil Case No.
2747 and that he did not deliver it to the plaintiffs. He
interposes the following defenses:
1. He is not guilty of any misconduct because he
accepted the case long before he became a judge;
2. He did not misappropriate the money he collected
from the court. It is intact but he has the right to
retain the amount of P30,000.00 until he is paid his
expenses pursuant to Section 137, Rule 138 on
attorney's lien;
3. The complainant, Makadaya Sadik is not the real
Makadaya Sadik, plaintiff in Civil Case No. 2747 and
being an impostor she is not entitled to the money.
There is no dispute that when respondent agreed to file the
complaint in behalf of Makadaya Sadik and Linang Minalang, he
was not yet a member of the judiciary. He was a trial attorney
of the Bureau of Forest Development. He claimed that he was
authorized to engage in practice in behalf of relatives but
presented no documentary authority. He continued to represent
the plaintiffs in Civil Case No. 2747 when he joined the Citizens
Legal Assistance Office in a private capacity. In fact he took
pains to emphasize that he handled the case not as a CLAO
lawyer (tsn, p. 39; 11-13-95) although in his notices of change
of address, he gave his new addresses as follows: 'Atty.
Abdallah M. Casar, CLAO, Capitol, Pigcarangan, Tubod, Lanao
del Norte' Exh. 10 and 'CLAO, Kabacan District Office, Municipal
Hall Bldg., Kabacan, Province of Cotabato' Exh. 11. (pp. 119120, Records). Similarly in his Memorandum dated 24 October
1988, he signed as 'Attorney for Plaintiffs, CLAO, Kabacan,
Cotabato,' Exh. B (pp. 89-96, Records). In those instances,
while he was actually prosecuting the case in his private
capacity, he gave the impression that he was handling the case
for the CLAO. By his own admission, he was engaged in a
private practice while employed as trial attorney with the BFD

and citizen's attorney with the CLAO. He failed to produce proof
of authority. But as he correctly states, those were acts
performed before he joined the judiciary. However, he failed to
mention that even after he became a municipal judge, he
continued to act as counsel for the plaintiffs in Civil Case No.
2747 on appeal to the Court of Appeals and the Supreme Court.
He assumed office on September 1, 1989. The decision of the
Regional Trial Court was rendered on November 17, 1989. He
filed an appeal in behalf of the plaintiffs even as Grepalife also
appealed. He testified:
'Q. After that what happened?
A. The case' decision was affirmed by the Court of
Appeals and eventually appealed again to the
Supreme Court where I made several
manifestations'. (tsn, p. 36; 11/13/95)
He actively handled the case on appeal. He violated Rule
5:07 of the Code of Judicial Conduct which states that 'A judge
shall not engage in the private practice of law.' He reasoned out
that he was forced to continue as counsel for the plaintiffs
because he failed to get in touch with them after he received
the decision of the lower court. He even went to Davao to look
for them but failed. A transparent and flimsy justification. At
that time he was stationed in Kolambugan, Lanao del Norte. He
knew that plaintiffs are from Pagayawan, Tamparan, Lanao del
Sur. He is himself a native of Tatayawon, Tamparan. He could
have easily went to his hometown or sent someone there to get
in touch with plaintiffs. He did not have to go to Davao which is
much further from Kolambugan than Tamparan. At any rate
failure to contact his clients is not reason enough to continue as
counsel for plaintiffs on appeal. The least which he should have
done was to secure permission from the Supreme Court before
proceeding with the case on appeal.
He also denies having converted and misappropriated the
judgment award of P30,000.00. He claims the amount is intact

but he has the right to retain the same until he is paid for his
expenses pursuant to Sec. 37, Rule 138 of the Rule of Court. He
declared:
'A. They failed to come and for all these, I estimated
my expenses to be more than Thirty Thousand
(P30,000.00) Pesos.
Q. What is your right in getting the amount of
P30,000.00?
A. Well, pursuant to Rule 138, Section 37 of the Rules
of Court known as attorney's liens by virtue of that
I have the right to retain the amount until payment
of my expenses was paid . . .' (sic) (tsn, pp. 38-39;
11/13/95).
This is ridiculous. The judgment award is only P30,000.00
but he spent more than P30,000.00 to recover it. Thus despite
winning the case, the client could not collect a single cent and
will still have to pay his lawyer. This may be one reason why the
ordinary layman holds an unflattering perception of lawyers.
His evidence fails to prove the amount of expenses claimed
by him. He said that to follow-up the claim, he went to Manila
six times spending for fare alone P3000.00 for each trip. When
the case was on appeal to the Supreme Court, he went to
Manila to follow-up thrice (tsn, p. 38; 11/13/95). Except for his
uncorroborated testimony, there are only two documents
showing he was indeed in Manila. Those are Exhs. 26 and 32
indicating that he personally served those letters to Grepalife in
Manila. But there is no evidence that he went there for this
purpose alone. It is highly probable that the visit to Grepalife
was merely one of his purposes in going to Manila. On the other
hand, his claim that he went to Manila three times to follow-up
the case while it was pending with the Supreme Court is
unworthy of credence. He was then already a municipal judge.
He could not have openly exposed himself to the Supreme
Court as being engaged in private practice. Besides there is no

reason to follow-up in person any case with the Supreme Court.
Similarly, his claims that he spent a lot of money in looking for
witnesses and trying to trace the whereabouts of his clients are
self-serving, devoid of corroboration and unsupported by
document evidence. Finally, he presented the receipts for the
payment of docket fees in the amount of P580.00, Exhs. 28 and
29, which he alleges was paid by him out of his own pocket.
Standing alone, those receipts do not prove his claim. The
normal practice is for the client to advance to his lawyer the
amount for the filing fees. It is the lawyer who pays the docket
fees and he can easily procure the issuance of the receipts in
his own name. Complainant Makadaya Sadik declared that her
husband took care of the payment of the docket fees.
Respondent did not cross-examine Usodan Sadik on this point.
In sum, respondent failed to show by clear and convincing
evidence that he did indeed spent more than P30,000.00 to
prosecute the insurance claim. His various claims of expenses
for travels to Manila, to find witnesses and to look for his clients
are all designed to inflate his demand for reimbursement and
justify his withholding of the judgment award from his clients.
To be generous, the sum of P6,000.00 corresponding to his
trips to Manila in March and May, 1986 may be allowed. Added
to that may be his claim for attorney's fees, although to be
generous again, he is not really entitled to it. From the
testimonies of both Usodan Sadik and respondent, it appears
that there was an agreement for the payment of P10,000.00 if
respondent succeeds in recovering the sum of P60,000.00 under
the accidental death rider. But this amount was not obtained
and only the basic claim of P30,000.00 was adjudged by the
court. It is logical to assume that in such case, the amount of
attorney's fees should also be proportionally reduced to
P5,000.00. Thus his total claim is not more than P11,000.00.
Nonetheless, it appears that his reliance on Section 37, Rule
138 of the Rules of Court is nothing more than an afterthought.
If indeed, he was claiming attorney's lien pursuant to said
section, then he should have known that to be entitled thereto

he must comply with certain pre-conditions. Said section
provides that with respect to judgments for payment of money,
like in Civil Case No. 2747, a lawyer shall have a lien thereto
'from and after the time when he shall have caused a statement
of his claim of such lien to be entered upon the records of the
court rendering such judgment . . . and shall have caused
written notice thereof to be delivered to his client and the
adverse party.' From July, 1993 when he learned of the
dismissal of Grepalife's petition by the Supreme Court until now,
he did not file the necessary pleadings to enforce his alleged
lien. It surfaces only when the administrative case was filed.
His last line of defense is that the complainant Makadaya
Sadik is not the real Makadaya Sadik who is the beneficiary of
Lekiya Paito and plaintiff in Civil Case No. 2747. He declared:
"A. As far as I know they were recruited as witnesses.
COURT: Q. You said 'they, are you referring to Usodan
Sadik and Makadaya Sadik?
A. Yes, Your Honor, because of the failure of the
beneficiaries to come to Court.
COURT: Proceed.
Judge Casar: Q. Do you have any evidence for that,
that Makadaya Sadik or referring to these persons who
are complainants, Usodan Sadik and Makadaya Sadik
were recruited to testify in this case, but these are not
the true complainants?
A. Yes.
Q. Who recruited them?
xxx
COURT: WHO FAILED TO APPEAR?
COURT: I DO NOT UNDERSTAND THIS. ANOTHER

WITNESSES OR ANOTHER PERSON WAS
PRESENTED TO TESTIFY AS LINANG MINALANG
AND SADIK?
A. At that time we needed more witnesses so the
parties and Barogong Paito agreed to testify but
two persons who are principal witnesses failed to
come.
COURT: SO WHEN THEY FAILED TO COME, WHAT DID
SADIK PAITO DO?
A. They took charge of presenting another witnesses
(sic).
Q. WHAT DO YOU MEAN BY 'TOOK CHARGE', YOU
MEAN, THEY PRESENTED TO YOU PERSONS WHO
WERE NOT REALLY LINANG MINALANG AND
MAKADAYA SADIK?
A. They told me that instead of them who could not go
to court, they faked another persons ( sic ).
Q. AND THESE PERSONS WHO WERE FAKED
APPEARED AND TESTIFIED AS LINANG MINALANG
AND MAKADAYA SADIK?
A. As a matter of fact, only Makadaya Sadik took the
stand because Linang Minalang failed to come.
A. The claimants.' (tsn, pp. 21-22; 11/13/95).

xxx
A. Makadaya Sadik and Linang Minalang despite notice.

The claimants failed to appear and procured
another persons (sic) who are impostors. This
Kunug Minalang and Sadik Paito took charge of the
witnesses and they presented another witnesses
(sic).
xxx
Q. MAKADAYA SADIK TESTIFIED IN COURT?

A. In reality, Makadaya Sadik failed to appear also.
Q. BUT SOMEBODY TESTIFIED AS IF HE IS MAKADAYA

SADIK?
A. Yes.
Q. I WANT THIS VERY CLEAR, HADJI SARIP PAITO
PRESENTED TO YOU ANOTHER PERSON WHO
CLAIM TO BE MAKADAYA SADIK BUT HE IS REALLY
NOT MAKADAYA?
A. Yes.
Q. AND THAT PERSON WHO ACTUALLY TESTIFIED
CLAIMING TO BE MAKADAYA SADIK WAS THE
PERSON WHO TESTIFIED THE LAST TIME AS
MAKADAYA SADIK?
A. That is what I can recall.
COURT: PROCEED.
Judge Casar:
Q. What was the arrangement for that matter for the
recruitment of other substitute witnesses?
A. Well, I told my client, I have to give them Five
Thousand (P5,000.00) pesos.
COURT: TO WHOM WILL THE P5,000.00 BE PAID?
A. To the substitute witnesses.
Q. YOU TOLD SARIP PAITO AND KUNUG MINALANG
THAT THESE WITNESSES BE PAID P5,000.00?
A. Yes.
Q. DID THEY AGREE?
A. I presume so because they testified.
Q. KUNUG MINALANG AND SARIP PAITO AGREED THAT
THE P5,000.00 BE PAID TO THE SUBSTITUTE
WITNESSES?
A. Seems to me that they agreed.' (tsn, pp. 34-36;
11/13/95).
By his own categorical admission, he deliberately, knowingly
and willfully agreed to procure a substitute witness, an
impostor, to pose as claimant Makadaya Sadik and testify in
Civil Case No. 2747. He even proposed that such witness be
paid P5,000.00. And he actually presented such witness as
Makadaya Sadik in that case and that impostor is the Makadaya
Sadik who is the complainant in this case. She is, respondent
says, the step-daughter of Lekiya Paito, the daughter of
Batobarani Lugpangan and another woman (tsn, p. 17;
11/13/95). By any language, this is subornation of perjury.
To make matters worse, he declared that even before he
filed the complaint in Civil Case No. 2747, he was already
informed that the insurance policy of Lekiya Paito was
fraudulent. Thus:
'Q. What else happened?
A. Naga Datumanong approached me and told me
about the facts of the case and that this was done
by unscrupulous persons.
COURT: WHAT WAS DONE BY UNSCRUPULOUS
PERSONS?
A. The insurance application of Lekiya Paito, in fact, at
the time of the insurance, Lekiya Paito was killed in
her hometown.
COURT: YOU MEAN LEKIYA PAITO WAS ALREADY SICK
WHEN THE INSURANCE FORM WAS MADE?
A. Yes, she was sick in Pagayawan, not in Cotabato
City.
Judge Casar: So, whose work is that insurance
A. As far as I know, that is the work of Usodan Hadji

Ibrahim.
COURT: THIS USODAN HADJI IBRAHIM IS NOT THE
PERSON NOW IN COURT?
A. As far as I know, he is Usodan Ibrahim.
Q. IN OTHER WORDS, THIS IS OR THE PERSON WHO
APPEARED AS COMPLAINANT IS ACTUALLY
USODAN IBRAHIM?
A. As far as I know, he is not working with me.
Q. SO THAT THIS PERSON NAMED USODAN SADIK,
ONE OF THE COMPLAINANTS, IS ACTUALLY
USODAN IBRAHIM?
A. Yes.
Q. AND YOU NOW CLAIM THAT USODAN IBRAHIM WAS
THE ONE WHO PREPARED THE FRAUDULENT
POLICY FOR LEKIYA PAITO?
A. As far as I was told.' (tsn, pp. 30-31; 11/13/95).
Yet knowing that the insurance claim was
fraudulent, he filed the complaint and compounded it by
presenting false witnesses in court. He transgressed not
only the Canons of Professional Ethics but also the
Revised Penal Code. In his single-minded intent to keep
the insurance proceeds for himself and deprive
complainant Makadaya Sadik of her share, respondent
dug a deep hole for himself. His cure is worse than the
disease.
It is possible that the insurance taken for Lekiya
Paito was indeed a scam. It is not an uncommon
occurrence in these parts to insure a person who is near
death or for an insured to fake his death and collect the
proceeds. But scam or not we are convinced that the
complainant Makadaya Sadik is not an impostor. She

denied that she is the step-daughter of Lekiya Paito.
She insisted she is the youngest daughter and she
named all her brothers and sisters. And it was
respondent who presented her in Civil Case No. 2747 as
Makadaya Sadik daughter of Lekiya Sadik and one of
the beneficiaries of the latter's insurance policy."
The Investigating Judge then recommended that a penalty
ranging from a fine of twenty thousand (P20,000.00) pesos to
suspension for six (6) months be imposed depending on
respondent's record. Respondent was likewise ordered to pay to
herein complainant, Makadaya Sadik, the sum of fifteen
thousand (P15,000.00) pesos less the sum of five thousand five
hundred (P5,500.00) pesos equivalent to one-half of the
expenses and attorney's fees demanded by respondent.
In the resolution of March 13, 1996 this Court referred this
case to the Office of the Court Administrator for evaluation,
report and recommendation.
In its memorandum of August 15, 1996, the Office of the
Court Administrator made the following findings and evaluation:
"The undersigned concurs with the finding of
Executive Judge Salazar that respondent be found guilty
of the charges of misconduct and misappropriation, but
differs insofar as the recommended penalty is
concerned. It is an established rule that the personal
behavior of a member of the judiciary in the
performance of his official duties and in his everyday
life should be beyond reproach. Respondent's act of
collecting the judgment award of P30,000.00 from the
Clerk of Court of RTC, Cotabato City and his refusal to
turn over the amount to his client, complainant
Makadaya Sadik and her sister, is an act of
misappropriation amounting to gross misconduct and/or
dishonesty. His defense that he has the right to retain
the entire P30,000.00 as attorney's lien in unacceptable.

For he has no right to retain the judgment award
allegedly to secure payment of litigation expenses and
attorney's fees. He had no authority to practice law
while in government service. In continuing to handle
the case of herein complainants against Grepalife after
he joined the government and without first securing
proper authority is no less constitutive of abuse of
authority. Furthermore, he violated Rule 5.06 of the
Code of Judicial Conduct which prohibits a judge to
engage in the private practice of law. He likewise
violated the Attorney's Oath in agreeing to file Civil Case
No. 2747 for the purpose of claiming the insurance
proceeds from Grepalife despite his having been
informed that the insurance policy of Lekiya Paito was
fraudulently applied for. Agreeing to handle the claim
said to have arisen from a fraudulent act against the
insurer certainly speaks of a moral flaw in his character.
This Court has held that: 'A judge should always be
a symbol of rectitude and propriety, comporting himself
in a manner that will raise no doubt whatsoever about
his honesty . . . He should ever strive to preserve the
good name of the court on which he sits and avoid any
indiscretion that will defile its probity. The respondent
has not lived up to these exacting standards. He has
betrayed his oath and debased his position. He has
impaired the image of the Judiciary to which he owes
the duty of loyalty and obligation to keep it at all times
above suspicion and worthy of the people's trust. No
less importantly, he has also injured the herein
complainant, who has yet to receive the money
entrusted to the respondent for the satisfaction of the
judgment that became final and executory more than
three years ago.' (Dr. Ernesto J. Yuson vs. Judge
Federico V. Noel, AM No. RTJ-91-762, 1 October 1993).
Records show that in MTJ-92-728 filed by Mayor

Perlita Libardos against herein respondent judge for
gross ignorance of the law, grave misconduct, etc. he
was fined P5,000.00 and sternly warned. He has still
five (5) other administrative cases docketed against him
namely: 1) MTJ-95-1048, for gross ignorance of the
law, gross incompetence, violation of Section 7, 15 and
17 of Rule 37 of the New Comelec Rules of Procedures,
etc.; 2) 95-1061 for Illegal Possession of Firearms and
Ammunitions; 3) OCA-IPI No. 95-59-MTJ for Gross
Ignorance of the Law, Gross Incompetence; and 4) OCA
IPI No. 95-59-MTJ for Falsification of Public Documents.
The first two (2) cases are pending investigation by the
Executive Judge while the two (2) others are now
pending with the Court with respondent's Comment
dated 29 November 1995 and 7 December 1995 and
pending evaluation by this Office, respectively.
It is clear from the facts established that
respondent does not deserve to remain in the service of
the Judiciary where honesty, probity and integrity are
indispensable credentials."
It then recommended:
"Respectfully submitted for the consideration of the
Honorable Court is our recommendation that: a) Judge
Abdallah M. Casar, MCTC Kolambugan-Tangcal, Lanao
del Norte be DISMISSED from the service with prejudice
to his appointment to any position in the government,
including government-owned or controlled corporations,
and with forfeiture of all retirement benefits except his
accrued leave credits; and b) he be ORDERED to turn
over to complainant Makadaya-Sadik and Linang
Minalang (co-plaintiff in Civil Case No. 2747) the sum of
Thirty Thousand Pesos (P30,000.00) which he received
from the Clerk of Court of RTC, Branch 13, Cotabato
City last 1 October 1993 within fifteen (15) days from
receipt of notice."
The Court has thoroughly studied the record of this case
and has ascertained that the findings of the investigating judge,
concurred in by the Office of the Court Administrator, are
adequately supported by the evidence and are in accord with
applicable legal principles. Consequently, the Court hereby
adopts the OCA's recommendation of meting out the supreme
penalty of dismissal on herein respondent judge.
It must be borne in mind that courts exist to dispense and
to promote justice.[1] However, the reality of justice depends,
above all, on the intellectual, moral and personal quality of the
men and women who are called to serve as our judges.[2] In a
piece written by Rosenberg, this point was emphasized, thus:
"Justice is an alloy of men and mechanisms in
which, as Roscoe Pound remarked, 'men count more
than machinery.' Assume the clearest rules, the most
enlightened procedures, the most sophisticated court
techniques; the key factor is still the judge. In the long
run, 'There is no guarantee of justice except the
personality of the judge.' The reason the judge makes
or breaks the system of justice is that rules are not selfdeclaring or self-applying. Even in a government of
laws, men make the decisions."[3]
In the recent case of Jocelyn Talens-Dabon v, Judge Hermin
E. Arceo,[4] the Court emphasized the importance of the role
played by judges in the judicial system, thus:
"The integrity of the Judiciary rests not only upon
the fact that it is able to administer justice but also
upon the perception and confidence of the community
that the people who run the system have done justice.
At times, the strict manner by which we apply the law
may, in fact, do justice but may not necessarily create
confidence among the people that justice, indeed, is
served. Hence, in order to create such confidence, the
people who run the judiciary, particularly judges and

justices, must not only be proficient in both the
substantive and procedural aspects of the law, but more
importantly, they must possess the highest integrity,
probity, and unquestionable moral uprightness, both in
their public and private lives. Only then can the people
be reassured that the wheels of justice in this country
run with fairness and equity, thus creating confidence in
the judicial system."
Insistence on personal integrity and honesty as
indispensable qualifications for judicial office reflect an
awareness in the legal profession of the immensity of the
damage that can be done to the legal order by judicial
corruption. The rationale for this was succinctly put by Jones,
thus:
"If a physician or a professor or a businessman is
discovered to be a thief or an influence peddler, the
disclosure will not put medicine, higher education, or
business into general disrepute. But judges are different
and more representative; revelations of judicial
corruption create suspicion and loss of confidence in
legal processes generally and endanger public respect
for law."[5]
Indeed, to be effective in his role, a judge must be a man of
exceptional integrity and honesty. The special urgency for
requiring these qualities in a judge is not hard to understand for
the judge acts directly upon the property, liberty, even life, of
his countrymen. Hence, being in a position of such grave
responsibility in the administration of justice, a judge must
conduct himself in a manner befitting the dignity of such exalted
office.
Respondent judge, however, not only failed in this respect
but proved himself repeatedly unworthy of his post.
The records show that even after he became judge,
respondent acted as counsel for herein complainants and

misappropriated the judgment award of P30,000.00 which
rightfully belongs to complainants. Moreover, respondent's line
of defense revealed a significant and deplorable flaw in his
character. In hoping to redeem himself, he categorically
admitted that he deliberately, knowingly and willfully agreed to
handle a case involving a fraudulent insurance claim and in the
process procured and presented false witnesses in court. Under
the circumstances, this Court is amazed at how brazen
respondent has comported himself and without compunction at
leaving a "paper trail" behind him.
This judgment is immediately executory and the respondent

judge is further ordered to cease and desist from discharging
the functions of his office upon receipt of this decision. Let a
copy be entered in the personal records of the respondent.
SO ORDERED.
Narvasa, C.J., Padilla, Davide, Jr., Bellosillo, Puno, Kapunan,

Francisco, Panganiban, Regalado, Romero, Melo, Romero, Melo,
Mendoza, Hermosisima, Jr., and Torres, JJ., concur.
Vitug, on leave.
This Court notes that respondent had been previously fined

P5,000.00 and sternly warned for knowingly issuing an order
without jurisdiction and with grave abuse of discretion.[6]
Moreover, he has four other administrative cases docketed
against him involving various charges such as gross ignorance
of the law, gross incompetence, illegal possession of firearms
and ammunitions and falsification of public documents.
Respondent judge's seeming propensity to transgress the
very law he is sworn to uphold makes him unfit to discharge the
functions of a judge. Judicial office demands the best possible
men and this Court will not hesitate to rid its ranks of
undesirables who undermine its efforts towards effective and
efficient administration of justice, thus tainting its image in the
eyes of the public.
WHEREFORE, Judge Abdallah M. Casar is hereby
DISMISSED
from the service for
misconduct
and
misappropriation with FORFEITURE of all retirement benefits
and accrued leave credits and with prejudice to re-employment
in any branch, agency or instrumentality of the government,
including government-owned or controlled corporations. He is
further ordered to turn over to complainant Makadaya Sadik
and Linang Minalang the sum of Thirty Thousand Pesos
(P30,000.00) which he received from the Clerk of Court of RTC,
Branch 13, Cotabato City last October 1, 1993.
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.
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.
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.
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 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]
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.
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 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]
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)
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.
In the case at bar, the records show that SEC Case No. 0597-5657, 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
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 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.
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.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ.,

concur.
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
Promulgated:
Republic of the Philippines

Supreme Court
Baguio City
April 11, 2012

SECOND DIVISION
ATTY. CLEMENCIO SABITSANA, JR.,
Respondent.
A.C. No. 5098
x-----------------------------------------------------------------------------------x
JOSEFINA M. ANION,
Complainant,
Present:
BRION, J.,
DECISION
Acting Chairperson,
PERALTA,*
BRION, J.:
PEREZ,
SERENO, and
- versus -
REYES, JJ.
We resolve this disbarment complaint against Atty.

Clemencio Sabitsana, Jr. who is charged of: (1) violating the
lawyers duty to preserve confidential information received from
his client;1[1] and (2) violating the prohibition on representing

conflicting interests.2[2]
In her complaint, Josefina M. Anion (complainant)
related that she previously engaged the legal services of Atty.
Sabitsana in the preparation and execution in her favor of a
Deed of Sale over a parcel of land owned by her late commonlaw husband, Brigido Caneja, Jr. Atty. Sabitsana allegedly
violated her confidence when he subsequently filed a civil case
against her for the annulment of the Deed of Sale in behalf of
Zenaida L. Caete, the legal wife of Brigido Caneja, Jr. The
complainant accused Atty. Sabitsana of using the confidential
information he obtained from her in filing the civil case.
Atty. Sabitsana admitted having advised the complainant

in the preparation and execution of the Deed of Sale. However,
he denied having received any confidential information. Atty.
Sabitsana asserted that the present disbarment complaint was
instigated by one Atty. Gabino Velasquez, Jr., the notary of the
disbarment complaint who lost a court case against him (Atty.
Sabitsana) and had instigated the complaint for this reason.
The Findings of the IBP Investigating Commissioner
In our Resolution dated November 22, 1999, we referred

the disbarment complaint to the Commission on Bar Discipline
of the Integrated Bar of the Philippines (IBP) for investigation,

report
and
recommendation.
In
his
Report
and
Recommendation dated November 28, 2003, IBP Commissioner
Pedro A. Magpayo Jr. found Atty. Sabitsana administratively
liable for representing conflicting interests. The IBP
Commissioner opined:
In Bautista vs. Barrios, it was held that a lawyer

may not handle a case to nullify a contract which
he prepared and thereby take up inconsistent
positions.
Granting that Zenaida L. Caete,
respondents present client in Civil Case No. B1060 did not initially learn about the sale executed
by Bontes in favor of complainant thru the
confidences and information divulged
by
complainant to respondent in the course of the
preparation of the said deed of sale, respondent
nonetheless has a duty to decline his current
employment as counsel of Zenaida Caete in view
of the rule prohibiting representation of conflicting
interests.
In re De la Rosa clearly suggests that a
lawyer may not represent conflicting interests in
the absence of the written consent of all parties
concerned given after a full disclosure of the facts.
In the present case, no such written consent was
secured
by
respondent
before accepting
employment as Mrs. Caetes counsel-of-record. x
xx
x
Complainant and respondents present

client, being contending claimants to the same
property, the conflict of interest is obviously
present. There is said to be inconsistency of
interest when on behalf of one client, it is the
attorneys duty to contend for that which his duty
to another client requires him to oppose. In brief,
if he argues for one client this argument will be
opposed by him when he argues for the other
client. Such is the case with which we are now
confronted, respondent being asked by one client
to nullify what he had formerly notarized as a true
and valid sale between Bontes and the
complainant. (footnotes omitted)3[3]
fully supported by the evidence on record, the applicable laws

and rules.5[5] The IBP Board of Governors agreed with the IBP
Commissioners recommended penalty.
Atty. Sabitsana moved to reconsider the above

resolution, but the IBP Board of Governors denied his motion in
a resolution dated July 30, 2004.
The Issue
The issue in this case is whether Atty. Sabitsana is guilty

of misconduct for representing conflicting interests.
The IBP Commissioner recommended that Atty.
Sabitsana be suspended from the practice of law for a period of
one (1) year.4[4]
The Findings of the IBP Board of Governors
In a resolution dated February 27, 2004, the IBP Board

of Governors resolved to adopt and approve the Report and
Recommendation of the IBP Commissioner after finding it to be
The Courts Ruling
After a careful study of the records, we agree with

the findings and recommendations of the IBP
Commissioner and the IBP Board of Governors.
The relationship between a lawyer and his/her client

should ideally be imbued with the highest level of trust and
confidence. This is the standard of confidentiality that must
prevail to promote a full disclosure of the clients most
confidential information to his/her lawyer for an unhampered
exchange of information between them. Needless to state, a

client can only entrust confidential information to his/her lawyer
based on an expectation from the lawyer of utmost secrecy and
discretion; the lawyer, for his part, is duty-bound to observe
candor, fairness and loyalty in all dealings and transactions with
the client.6[6] Part of the lawyers duty in this regard is to
avoid representing conflicting interests, a matter covered by
Rule 15.03, Canon 15 of the Code of Professional Responsibility
quoted below:
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.
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.7[7] The prohibition also applies even if 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.8[8] To be held accountable under
this rule, 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.9[9]
Jurisprudence has provided three tests in determining

whether a violation of the above rule is present in a given case.
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. 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. 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.10[10] [emphasis ours]
complainant as the defendant in the case; and third, the case

he filed was for the annulment of the Deed of Sale that he had
previously prepared and executed for the complainant.
On the basis of the attendant facts of the case, we find
substantial evidence to support Atty. Sabitsanas violation of the
above rule, as established by the following circumstances on
record:
One, his legal services were initially engaged by the

complainant to protect her interest over a certain property. The
records show that upon the legal advice of Atty. Sabitsana, the
Deed of Sale over the property was prepared and executed in
the complainants favor.
Two, Atty. Sabitsana met with Zenaida Caete to discuss

the latters legal interest over the property subject of the Deed
of Sale. At that point, Atty. Sabitsana already had knowledge
that Zenaida Caetes interest clashed with the complainants
interests.
Three, despite the knowledge of the clashing interests

between his two clients, Atty. Sabitsana accepted the
engagement from Zenaida Caete.
By his acts, not only did Atty. Sabitsana agree to

represent one client against another client in the same action;
he also accepted a new engagement that entailed him to
contend and oppose the interest of his other client in a property
in which his legal services had been previously retained.
To be sure, Rule 15.03, Canon 15 of the Code of

Professional Responsibility provides an exception to the above
prohibition. However, we find no reason to apply the exception
due to Atty. Sabitsanas failure to comply with the requirements
set forth under the rule. Atty. Sabitsana did not make a full
disclosure of facts to the complainant and to Zenaida Caete
before he accepted the new engagement with Zenaida Caete.
The records likewise show that although Atty. Sabitsana wrote a
letter to the complainant informing her of Zenaida Caetes
adverse claim to the property covered by the Deed of Sale and,
urging her to settle the adverse claim; Atty. Sabitsana however
did not disclose to the complainant that he was also being
engaged as counsel by Zenaida Caete.11[11] Moreover, the
records show that Atty. Sabitsana failed to obtain the written
consent of his two clients, as required by Rule 15.03, Canon 15
of the Code of Professional Responsibility.
Four, Atty. Sabitsanas actual knowledge of the

conflicting interests between his two clients was demonstrated
by his own actions: first, he filed a case against the complainant
in behalf of Zenaida Caete; second, he impleaded the
Accordingly, we find as the IBP Board of Governors did

Atty. Sabitsana guilty of misconduct for representing
conflicting interests. We likewise agree with the penalty of
suspension for one (1) year from the practice of law
recommended by the IBP Board of Governors. This penalty is
consistent with existing jurisprudence on the administrative
offense of representing conflicting interests.12[12]
We note that Atty. Sabitsana takes exception to the IBP

recommendation on the ground that the charge in the complaint
was only for his alleged disclosure of confidential information,
not for representation of conflicting interests. To Atty.
Sabitsana, finding him liable for the latter offense is a violation
of his due process rights since he only answered the designated
charge.
We find no violation of Atty. Sabitsanas due process

rights. Although there was indeed a specific charge in the
complaint, we are not unmindful that the complaint itself
contained allegations of acts sufficient to constitute a violation
of the rule on the prohibition against representing conflicting
interests. As stated in paragraph 8 of the complaint:
Atty. Sabitsana, Jr. accepted the commission as a

Lawyer of ZENAIDA CANEJA, now Zenaida Caete,
to recover lands from Complainant, including this
land where lawyer Atty. Sabitsana, Jr. has advised
his client [complainant] to execute the second

sale[.]
Interestingly, Atty. Sabitsana even admitted these

allegations in his answer.13[13] He also averred in his Answer
that:
6b. Because the defendant-to-be in the
complaint (Civil Case No. B-1060) that he would
file on behalf of Zenaida Caneja-Caete was his
former client (herein complainant), respondent
asked [the] permission of Mrs. Caete (which she
granted) that he would first write a letter (Annex
4) to the complainant proposing to settle the
case amicably between them but complainant
ignored it. Neither did she object to respondents
handling the case in behalf of Mrs. Caete on the
ground she is now invoking in her instant
complaint. So respondent felt free to file the
complaint against her.14[14]
We have consistently held that the essence of due

process is simply the opportunity to be informed of the charge
against oneself and to be heard or, as applied to administrative
proceedings, the opportunity to explain ones side or the
opportunity to seek a reconsideration of the action or ruling
complained of.15[15] These opportunities were all afforded to

Atty. Sabitsana, as shown by the above circumstances.
All told, disciplinary proceedings against lawyers are sui

generis.16[16] In the exercise of its disciplinary powers, the
Court merely calls upon a member of the Bar to account for his
actuations as an officer of the Court with the end in view of
preserving the purity of the legal profession. We likewise aim to
ensure the proper and honest administration of justice by
purging the profession of members who, by their misconduct,
have proven themselves no longer worthy to be entrusted with
the duties and responsibilities of an attorney.17[17] This is all
that we did in this case. Significantly, we did this to a degree
very much lesser than what the powers of this Court allows it to
do in terms of the imposable penalty. In this sense, we have
already been lenient towards respondent lawyer.
Atty. Sabitsana is DIRECTED to inform the Court of the

date of his receipt of this Decision so that we can determine the
reckoning point when his suspension shall take effect.
SO ORDERED
WHEREFORE, premises considered, the Court resolves

to ADOPT the findings and recommendations of the
Philippines. Atty. Clemencio C. Sabitsana, Jr. is found GUILTY
of misconduct for representing conflicting interests in violation
of Rule 15.03, Canon 15 of the Code of Professional
Responsibility. He is hereby SUSPENDED for one (1) year from
the practice of law.
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.C. No. 6664
July 16, 2013
FERDINAND A. SAMSON, Complainant,

vs.
ATTY. EDGARDO O. ERA, Respondent.
DECISION
BERSAMIN, J.:
An attorney who wittingly represents and serves conflicting
interests may be suspended from the practice of law, or even
disbarred when circumstances so warrant.
Antecedents
Ferdinand A. Samson has brought this complaint for disbarment
charging respondent Atty. Edgardo O. Era with violation of his
trust and confidence of a client by representing the interest of
Emilia C. Sison, his present client, in a manner that blatantly
conflicted with his interest.
Samson and his relatives were among the investors who fell
prey to the pyramiding scam perpetrated by ICS Exports, Inc.
Exporter, Importer, and Multi-Level Marketing Business (ICS
Corporation), a corporation whose corporate officers were led
by Sison. The other officers were Ireneo C. Sison, William C.
Sison, Mimosa H. Zamudio, Mirasol H. Aguilar and Jhun Sison.
Samson engaged Atty. Era to represent and assist him and his
relatives in the criminal prosecution of Sison and her group.
Pursuant to the engagement, Atty. Era prepared the demand

letter dated July 19, 2002 demanding the return or refund of
the money subject of their complaints. He also prepared the
complaint-affidavit that Samson signed and swore to on July 26,
2002. Subsequently, the complaint-affidavit charging Sison and
the other corporate officials of ICS Corporation with several
counts of estafa1was presented to the Office of the City
Prosecutor of Quezon City (OCPQC). After the preliminary
investigation, the OCPQC formally charged Sison and the others
with several counts of estafa in the Regional Trial Court, Branch
96 (RTC), in Quezon City.2
In April 2003, Atty. Era called a meeting with Samson and his
relatives to discuss the possibility of an amicable settlement
with Sison and her cohorts. He told Samson and the others that
undergoing a trial of the cases would just be a waste of time,
money and effort for them, and that they could settle the cases
with Sison and her group, with him guaranteeing the turnover
to them of a certain property located in Antipolo City belonging
to ICS Corporation in exchange for their desistance. They
acceded and executed the affidavit of desistance he prepared,
and in turn they received a deed of assignment covering land
registered under Transfer Certificate of Title No. R-4475
executed by Sison in behalf of ICS Corporation.3
Samson and his relatives later demanded from Atty. Era that
they be given instead a deed of absolute sale to enable them to
liquidate the property among themselves. It took some period
of negotiations between them and Atty. Era before the latter
delivered to them on November 27, 2003 five copies of a deed
of absolute sale involving the property. However, Atty. Era told
them that whether or not the title of the property had been
encumbered or free from lien or defect would no longer be his
responsibility. He further told them that as far as he was
concerned he had already accomplished his professional
responsibility towards them upon the amicable settlement of the

cases between them and ICS Corporation.4
When Samson and his co-complainants verified the title of the
property at the Registry of Deeds and the Assessors Office of
Antipolo City, they were dismayed to learn that they could not
liquidate the property because it was no longer registered under
the name of ICS Corporation but was already under the name
of Bank Wise Inc.5 Upon their urging, Atty. Era negotiated as
their counsel with ICS Corporation.
Due to the silence of Atty. Era for sometime thereafter, Samson
and his group wrote to him on September 8, 2004 to remind
him about his guarantee and the promise to settle the issues
with Sison and her cohorts. But they did not hear from Atty. Era
at all.6
During the hearings in the RTC, Atty. Era did not anymore
appear for Samson and his group. This forced them to engage
another lawyer. They were shocked to find out later on,
however, that Atty. Era had already been entering his
appearance as the counsel for Sison in her other criminal cases
in the other branches of the RTC in Quezon City involving the
same pyramiding scam that she and her ICS Corporation had
perpetrated.7 In this regard, they established Atty. Eras legal
representation of Sison by submitting several certified copies of
the minutes of the proceedings in the criminal cases involving
Sison and her group issued by Branch 102 and Branch 220 of
the RTC in Quezon City showing that Atty. Era had appeared as
the counsel of Sison in the cases for estafa pending and being
tried in said courts.8 They also submitted a certification issued
on November 3, 2004 indicating that Atty. Era had visited Sison,
an inmate in the Female Dormitory in Camp Karingal, Sikatuna
Village, Quezon City as borne out by the blotter logbook of that
unit.9
On January 20, 2005, Samson executed an affidavit alleging the

foregoing antecedents, and praying for Atty. Eras disbarment
on the ground of his violation of the trust, confidence and
respect reposed in him as their counsel.10
Upon being required by the Court to comment on the complaint
against him within 10 days from notice, Atty. Era several times
sought the extension of his period to file the comment to
supposedly enable him to collate documents relevant to his
comment.11 The Court granted his request and allowed him an
extension totaling 40 days. But despite the lapse of the
extended period, he did not file his comment.
On September 27, 2005, Samson reiterated his complaint for
disbarment against Atty. Era.12
By its resolution dated March 1, 2006,13 the Court required Atty.
Era to show cause why he should not be disciplinarily dealt with
or held in contempt for such failure to submit his comment.
In the comment that he subsequently filed on April 11, 2006 in
the Office of the Bar Confidant,14 Atty. Era alleged that the
conclusion on April 23, 2002 of the compromise settlement
between Samson and his group, on one hand, and Sison and
her ICS Corporation, on the other, had terminated the lawyerclient relationship between him and Samson and his group; and
that on September 1, 2003, he had been appointed as counsel
de officio for Sison by Branch 102 of the RTC in Quezon City
only for purposes of her arraignment.
On July 17, 2006, the Court referred the case to the Integrated
Bar of the Philippines (IBP) for investigation, report and
recommendation.15
In his report and recommendation dated October 1, 2007,16 the
Investigating Commissioner of the IBP Commission on Bar
Discipline (IBPCBD) found Atty. Era guilty of misconduct for

representing conflicting interests, for failing to serve his clients
with competence and diligence, and for failing to champion his
clients cause with wholehearted fidelity, care and devotion.
The Investigating Commissioner observed that the evidence did
not sustain Atty. Eras claim that his legal services as counsel for
Samson and his group had terminated on April 23, 2003 upon
the execution of the compromise settlement of the criminal
cases; that he even admitted during the mandatory conference
that there was no formal termination of his legal services; 17 that
his professional obligation towards Samson and his group as his
clients did not end upon execution of the settlement agreement,
because he remained duty-bound to see to it that the
settlement was duly implemented; that he also had the
obligation to appear in the criminal cases until their termination;
and that his acceptance of the engagement to appear in behalf
of Sison invited suspicion of his double-dealing and
unfaithfulness.
The Investigating Commissioner recommended that Atty. Era be
suspended from the practice of law for six months, viz:
From the foregoing, it is clear that respondent is guilty of
misconduct for representing conflicting interests, failing to serve
his client, complainant herein, with competence and diligence
and champion the latters cause with wholehearted fidelity, care
and devotion. It is respectfully recommended that respondent
be SUSPENDED from the practice of law for a period of six (6)
months and WARNED that a repetition of the same or similar
act would merit a more severe penalty.18
In Resolution No. XVIII-2007-195 passed on October 19,
2007,19 the IBP Board of Governors adopted and approved the
report and recommendation of the Investigating Commissioner
of the IBP-CBD, with the modification that Atty. Era be

suspended from the practice of law for two years.
On June 9, 2012, the IBP Board of Governors passed Resolution
No. XX-2012-180,20 denying Atty. Eras motion for
reconsideration and affirming Resolution No. XVIII-2007-195.
The IBP Board of Governors then forwarded the case to the
Court pursuant to Section 12(b), Rule 139-B of the Rules of
Court.21
On October 17, 2012, Atty. Era filed a Manifestation and Motion
(With Leave of Court).22 However, on November 26, 2012, the
Court merely noted the manifestation, and denied the motion
for its lack of merit.23
Ruling
We affirm the findings of the IBP.
In his petition for disbarment, Samson charged Atty. Era with
violating Canon 15 of the Code of Professional Responsibility for
representing conflicting interests by accepting the responsibility
of representing Sison in the cases similar to those in which he
had undertaken to represent Samson and his group,
notwithstanding that Sison was the very same person whom
Samson and his group had accused with Atty. Eras legal
assistance. He had drafted the demand letters and the
complaint-affidavit that became the bases for the filing of the
estafa charges against Sison and the others in the RTC in
Quezon City.
Atty. Eras contention that the lawyer-client relationship ended
when Samson and his group entered into the compromise
settlement with Sison on April 23, 2002 was unwarranted. The
lawyer-client relationship did not terminate as of then, for the
fact remained that he still needed to oversee the

implementation of the settlement as well as to proceed with the
criminal cases until they were dismissed or otherwise concluded
by the trial court. It is also relevant to indicate that the
execution of a compromise settlement in the criminal cases did
not ipso facto cause the termination of the cases not only
because the approval of the compromise by the trial court was
still required, but also because the compromise would have
applied only to the civil aspect, and excluded the criminal aspect
pursuant to Article 2034 of the Civil Code.24
and also whether he will be called upon in his new relation to

use against his first client any knowledge acquired through their
connection. Another test of the inconsistency of interests is
whether the acceptance of a new relation will prevent an
attorney from the full discharge of his duty of undivided fidelity
and loyalty to his client or invite suspicion of unfaithfulness or
double dealing in the performance thereof.28
Rule 15.03, Canon 15 of the Code of Professional Responsibility

provides that: "A lawyer shall not represent conflicting interests
except by written consent of all concerned given after a full
disclosure of the facts." Atty. Era thus owed to Samson and his
group entire devotion to their genuine interest, and warm zeal
in the maintenance and defense of their rights.25 He was
expected to exert his best efforts and ability to preserve the
clients cause, for the unwavering loyalty displayed to his clients
likewise served the ends of justice.26
x x x. First, the law seeks to assure clients that their lawyers will
represent them with undivided loyalty. A client is entitled to be
represented by a lawyer whom the client can trust. Instilling
such confidence is an objective important in itself. x x x.
In Hornilla v. Atty. Salunat,27 the Court discussed the concept of

conflict of interest in this wise:
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." This rule covers not only cases in which confidential
communications have been confided, but also those in which no
confidence has been bestowed or will be used. Also, there is
conflict of interests if the acceptance of the new retainer will
require the attorney to perform an act which will injuriously
affect his first client in any matter in which he represents him
The prohibition against conflict of interest rests on five

rationales, rendered as follows:
Second, the prohibition against conflicts of interest seeks to

enhance the effectiveness of legal representation. To the extent
that a conflict of interest undermines the independence of the
lawyers professional judgment or inhibits a lawyer from
working with appropriate vigor in the clients behalf, the clients
expectation of effective representation x x x could be
compromised.
Third, a client has a legal right to have the lawyer safeguard the
clients confidential information xxx.1wphi1 Preventing use of
confidential client information against the interests of the client,
either to benefit the lawyers personal interest, in aid of some
other client, or to foster an assumed public purpose is facilitated
through conflicts rules that reduce the opportunity for such
abuse.
Fourth, conflicts rules help ensure that lawyers will not exploit
clients, such as by inducing a client to make a gift to the lawyer
xxx.
Finally, some conflict-of-interest rules protect interests of the

legal system in obtaining adequate presentations to tribunals. In
the absence of such rules, for example, a lawyer might appear
on both sides of the litigation, complicating the process of
taking proof and compromise adversary argumentation x x x.29
disclose or use any of the clients confidences acquired in the

previous relation.34 In this regard, Canon 17 of the Code of
Professional Responsibility expressly declares that: "A lawyer
owes fidelity to the cause of his client and he shall be mindful of
the trust and confidence reposed in him."
The rule prohibiting conflict of interest was fashioned to prevent

situations wherein a lawyer would be representing a client
whose interest is 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.30 The
rule is grounded in the fiduciary obligation of loyalty.31
Throughout 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. Knowledge
and information gathered in the course of the relationship must
be treated as sacred and guarded with care.1wphi1 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 paramount in the
administration of justice.32 The nature of that relationship is,
therefore, one of trust and confidence of the highest degree.33
The lawyers highest and most unquestioned duty is to protect

the client at all hazards and costs even to himself.35 The
protection given to the client is perpetual and does not cease
with the termination of the litigation, nor is it affected by the
clients 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.36
Contrary to Atty. Eras ill-conceived attempt to explain his

disloyalty to Samson and his group, the termination of the
attorney-client relationship does not justify a lawyer to
represent an interest adverse to or in conflict with that of the
former client. The spirit behind this rule is that the clients
confidence once given should not be stripped by the mere
expiration of the professional employment. Even after the
severance of the relation, a lawyer should not do anything that
will injuriously affect his former client in any matter in which the
lawyer previously represented the client. Nor should the lawyer
In the absence of the express consent from Samson and his

group after full disclosure to them of the conflict of interest,
therefore, the most ethical thing for Atty. Era to have done was
either to outrightly decline representing and entering his
appearance as counsel for Sison, or to advice Sison to engage
another lawyer for herself. Unfortunately, he did neither, and
should now suffer the proper sanction.
WHEREFORE, the Court FINDS and PRONOUNCES Atty.
EDGARDO O. ERA guilty of violating Rule 15.03 of Canon 15,
and Canon 17 of the Code of Professional Responsibility; and
SUSPENDS him from the practice of law for two years effective
upon his receipt of this decision, with a warning that his
commission of a similar offense will be dealt with more severely.
Let copies of this decision be included in the personal record of
Atty. EDGARDO 0. ERA and entered m his file in the Office of
the Bar Confidant.
Let copies of this decision be disseminated to all lower courts by
the Office of the Court Administrator, as well as to the
Integrated Bar of the Philippines for its guidance.
SO ORDERED.
G.R. No. 1359 October 17, 1991

GENEROSA BUTED, ET AL. vs. HAROLD M. HERNANDO
THIRD DIVISION
[G.R. No. 1359. October 17, 1991.]
GENEROSA BUTED and BENITO BOLISAY, petitioners, vs. ATTY.

HAROLD M. HERNANDO, respondent.
Jorge A. Dolorfino for petitioners.
SYLLABUS
1.
LEGAL ETHICS; CANONS OF PROFESSIONAL ETHICS;
LAWYER'S REPRESENTATION OF CONFLICTING INTERESTS,
PROHIBITED EXCEPT BY EXPRESS CONSENT OF ALL PARTIES
GIVEN AFTER FULL DISCLOSURE OF THE FACTS. It is clear
from the Canons of Professional Ethics that in cases where a
conflict of interests may exist, full disclosure of the facts and
express consent of all the parties concerned are necessary. The
present Code of Professional Responsibility is stricter on this
matter considering that consent of the parties is now required
to be in written form. In the case at bar, such consent was
wanting.
2.
ID.; ID.; ID.; ACTUAL TRANSMISSION OF
CONFIDENTIAL INFORMATION FROM FIRST CLIENT NEED NOT
BE PROVED TO PRECLUDE LAWYER FROM ACCEPTING
EMPLOYMENT BY THE SECOND; CASE AT BAR. Respondent
persistently argues that contrary to the claims of complainant
spouses, he had never seen nor taken hold of the Transfer

Certificate of Title covering Lot No. 9439-B nor obtained any
confidential information in handling the action for specific
performance. The contention of respondent is, in effect, that
because complainant has not clearly shown that respondent had
obtained any confidential information from Benito Bolisay while
representing the latter in the action for specific performance,
respondent cannot be penalized for representing conflicting
interests. That is not the rule in this jurisdiction The rule here is,
rather, that the mere fact that respondent had acted as counsel
for Benito Bolisay in the action for specific performance should
have precluded respondent from acting or appearing as counsel
for the other side in the subsequent petition for cancellation of
the Transfer Certificate of Title of the spouses Generosa and
Benito Bolisay. There is no necessity for proving the actual
transmission of confidential information to an attorney in the
course of his employment by his first client in order that he may
be precluded from accepting employment by the second or
subsequent client where there are conflicting interests between
the first and the subsequent clients.
3.
ID.; ID.; ID.; ABSENCE OF MONETARY
CONSIDERATION; DOES NOT EXEMPT A LAWYER FROM THE
PROHIBITION. The absence of monetary consideration does
not exempt the lawyer from complying with the prohibition
against pursuing cases where a conflict of interest exists. The
prohibition attaches from the moment the attorney-client
relationship is established and extends beyond the duration of
the professional relationship.
4.
ID.; ID.; VIOLATION THEREOF PENALIZED WITH FIVE
(5) MONTHS SUSPENSION FROM THE PRACTICE OF LAW; CAE
AT BAR. The Court Resolved to SUSPEND Atty. Harold M.
Hernando from the practice of law for a period of five (5)
months, with a WARNING that repetition of the same or similar
offense will warrant a more severe penalty.
RESOLUTION
PER CURIAM, p:
On 22 August 1974, spouses Generosa Buted and Benito Bolisay
filed an administrative complaint for malpractice against
respondent Atty. Harold M. Hernando, charging the latter with
having wantonly abused professional secrets or information
obtained by him as their counsel.
After respondent Hernando filed his Answer on 25 June 1974,
the Court, in a resolution dated 4 October 1974 referred the
complaint to the Solicitor-General for investigation, report and
recommendation.
On 10 February 1975, complainants presented a Joint Affidavit
of Desistance. 1
On 24 October 1975, the Solicitor-General conducted a hearing
where respondent took the witness stand on his own behalf.
prcd
The record of the case shows the following background facts:
In an action for partition instituted by Generosa as compulsory
heir of the deceased Teofilo Buted, respondent was counsel for
Luciana Abadilla and a certain Angela Buted. Involved in said
partition case was a parcel of land identified as Lot 9439-B.
Respondent ultimately succeeded in defending Luciana
Abadilla's claim of exclusive ownership over Lot 9439-B. When
Luciana died, respondent withdrew his appearance from that
partition case.
It appears that Luciana Abadilla sold the lot to Benito Bolisay

and a new Transfer Certificate of Title over the lot was issued in
the name of complainant spouses.
When an action for specific performance was lodged by a
couple named Luis Sy and Elena Sy against Benito Bolisay as
one of the defendants, 2 the latter retained the services of
respondent. Atty. Hernando however claims that he rendered
his services to Benito Bolisay free of charge. Subject of this case
was a contract of lease executed by Benito's co-defendant
therein, Enrique Buted, over a house standing on a portion of
Lot No. 9439-B. It appears that the Sy's were claiming that the
lease extended to the aforementioned lot. Benito was then
asserting ownership over the realty by virtue of a Deed of Sale
executed by Luciana Abadilla in his favor. Eventually, the Sy's
were ordered to vacate the house subject of the lease.
Respondent avers that the relationship between himself and
Benito Bolisay as regards this case was terminated on 4
December 1969. 3
On 23 February 1974, respondent Hernando, without the
consent of the heirs of Luciana Abadilla and complainant
spouses, filed a petition on behalf of the heirs of Carlos, Dionisia
and Francisco all surnamed Abadilla, seeking the cancellation of
the Transfer Certificate of Title (TCT) of complainant spouses
over the lot. Carlos, Dionisia and Francisco were Luciana's
registered co-owners in the original certificate of title covering
Lot No. 9439-B. 4 At the hearing, respondent Hernando testified
that if the petition for cancellation of TCT was granted, Lot
9439-B would no longer be owned by complainant spouses but
would be owned in common by all the heirs of Luciana Abadilla.
5
Complainant spouses, upon learning of respondent's
appearance against them in the cadastral proceeding,
manifested their disapproval thereof in a letter dated 30 July
1974. 6 Respondent however, pursued the case until it was
eventually dismissed by the trial court on 2 September 1974 on

the ground of prescription. 7
At the hearing before the Office of the Solicitor General and in
his Answer, respondent Hernando admitted his involvement in
the cadastral case as counsel for the Abadillas but denied
having seen or taken hold of the controversial Transfer
Certificate of Title, and having availed himself of any
confidential information relating to Lot 9439-B.
In its Report and Recommendation dated 29 March 1990, the
Solicitor General recommends that respondent be suspended
from the practice of law for three (3) months for violation of the
Canons of Professional Ethics by representing clients with
conflicting interests, and filed before this Court the
corresponding Complaint 8 dated 30 March 1990.
The issue raised in this proceeding is: whether or not
respondent Hernando had a conflict of interests under the
circumstances described above.
The Canons of Professional Ethics, the then prevailing
parameters of behavior of members of the bar, defines a
conflict of interests situation in the following manner:
"6.
xxx
Adverse influence and conflicting interests.

xxx
xxx
It is unprofessional to represent conflicting interests, except by

express consent of all concerned given after a full disclosure of
the facts. Within the meaning of this canon, a lawyer represents
conflicting interests when, in behalf of one client, it is his duty
to contend for that which duty to another client requires him to
oppose. cdphil
The obligation to represent the client with undivided fidelity and
not to divulge his secrets or confidence forbids also the
subsequent acceptance of retainers or employment from others
in matters adversely affecting any interest of the client with

respect to which confidence has been reposed." (Emphasis
supplied)
Though as regards the first and second cases handled by
respondent, no conflict of interest existed, the same cannot be
said with respect to the action for specific performance and the
cadastral proceeding. By respondent's own admission, he
defended the right of ownership over Lot 9439-B of complainant
Benito Bolisay in the action for specific performance. He
assailed this same right of ownership when he subsequently
filed a petition for cancellation of complainants' Transfer
Certificate of Title over that same lot. Respondent Hernando
was in a conflict of interest situation.
It is clear from the above-quoted portion of the Canons of
Professional Ethics that in cases where a conflict of interests
may exist, full disclosure of the facts and express consent of all
the parties concerned are necessary. 9 The present Code of
Professional Responsibility is stricter on this matter considering
that consent of the parties is now required to be in written
form. 10 In the case at bar, such consent was wanting.
Respondent persistently argues that contrary to the claims of
complainant spouses, he had never seen nor taken hold of the
Transfer Certificate of Title covering Lot No. 9439-B nor
obtained any confidential information in handling the action for
specific performance. 11 The contention of respondent is, in
effect, that because complainant has not clearly shown that
respondent had obtained any confidential information from
Benito Bolisay while representing the latter in the action for
specific performance, respondent cannot be penalized for
representing conflicting interests. That is not the rule in this
jurisdiction The rule here is, rather, that the mere fact that
respondent had acted as counsel for Benito Bolisay in the action
for specific performance should have precluded respondent
from acting or appearing as counsel for the other side in the
subsequent petition for cancellation of the Transfer Certificate

of Title of the spouses Generosa and Benito Bolisay. There is no
necessity for proving the actual transmission of confidential
information to an attorney in the course of his employment by
his first client in order that he may be precluded from accepting
employment by the second or subsequent client where there
are conflicting interests between the first and the subsequent
clients. The reason for this rule was set out by the Court in
Hilado v. David 12 in the following terms:
Communications between attorney and client are, in a great
number of litigations, a complicated affair, consisting of
entangled relevant and irrelevant, secret and well known facts.
In the complexity of what is said in the course of the dealings
between an attorney and a client, inquiry of the nature
suggested would lead to the revelation, in advance of the trial,
of other matters that might only further prejudice the
complainant's cause. And the theory would be productive of
other unsalutary results. To make the passing of confidential
communication a condition precedent; i.e., to make the
employment conditioned on the scope and character of the
knowledge acquired by an attorney in determining his right to
change sides, would not enhance the freedom of litigants, which
is to be sedulously fostered, to consult with lawyers upon what
they believe are their rights in litigation. The condition would of
necessity call for an investigation of what information the
attorney has received and in what way it is or it is not in conflict
with his new position. Litigants would be in consequence be
wary in going to an attorney, lest by an unfortunate turn of the
proceeding, if an investigation be held, the court should accept
the attorney's inaccurate version of the facts that came to him.
Hence the necessity of setting down the existence of the bare
relationship of attorney and client as the yardstick for testing
incompatibility of interests. This stern rule is designed not alone
to prevent the dishonest practitioner from fraudulent conduct,
but as well to protect the honest lawyer from unfounded
suspicion of unprofessional practice. (Strong vs. Int. Bldg., etc.;

Ass'n. 183 Ill., 97; 47 L.R.A., 792) It is founded on principles of
public policy, on good taste. As has been said another case, the
question is not necessarily one of the rights of the parties, but
as to whether the attorney has adhered to proper professional
standard. With these thoughts in mind, it behooves attorneys,
like Caesar's wife, not only to keep inviolate the client's
confidence, but also to avoid the appearance of treachery and
double-dealing. Only thus can litigants be encouraged to entrust
their secrets to their attorneys which is of paramount
importance in the administration of justice." 13 (Emphasis
supplied)
This Court went further in San Jose v. Cruz, 14 where the
lawyer was charged with malpractice for having represented a
new client whose interest was opposed to those of his former
clients in another case:
"The record shows that the respondent offered his services to
the Matienzo spouses knowing that the petitioner had obtained
a favorable judgment in the civil case No. 5480 and that his
efforts in the subsequent civil case No. 5962 would frustrate
said judgment and render it ineffectual, as has really been the
result upon his obtaining the writ of injunction abovementioned. Obviously his conduct is unbecoming to an attorney
and cannot be sanctioned by the courts An attorney owes
loyalty to his client not only in the case in which he has
represented him but also after the relation of attorney and
client has terminated and it is not a good practice to permit him
afterwards to defend in another case other persons against his
former client under the pretext that the case is distinct from,
and independent of the former case." 15 (Emphasis supplied)
"An attorney is not permitted, in serving a new client as against

a former one, to do anything which will injuriously affect the
former client in any manner in which the attorney formerly
represented him, though the relation of attorney and client has
terminated, and the new employment is in a different case; nor
can the attorney use against his former client any knowledge or
information gained through their former connection." 16
(Emphasis supplied)
The absence of monetary consideration does not exempt the
lawyer from complying with the prohibition against pursuing
cases where a conflict of interest exists. The prohibition
attaches from the moment the attorney-client relationship is
established and extends beyond the duration of the professional
relationship. prLL
The Court therefore agrees with the Solicitor-General that
respondent Hernando is guilty of violation of the Canons of
Professional Ethics by representing clients with conflicting
interests. We believe, however, that a heavier penalty is
appropriate.
ACCORDINGLY, the Court Resolved to SUSPEND Atty. Harold M.
Hernando from the practice of law for a period of five (5)
months, with a WARNING that repetition of the same or similar
offense will warrant a more severe penalty. A copy of this
Resolution shall be furnished to all courts and to the Office of
the Bar Confidant and spread on the personal record of
respondent.
The appropriate rule has been expressed by Justice Malcolm in

the following manner:

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IMPRESCRIPTIBILITY OF DISBARMENT

A.C. No. 6656

If the rule were otherwise, members of

time has elapsed from the time of the

Thus, even the lapse of considerable time

The CBD-IBP derives its authority to take cognizance of

Regrettably, Rule VIII, Section 1 of the Rules of

BOBIE ROSE V. FRIAS,

A.C. No. 6656

Respondent Atty. Carmelita Bautista-Lozada seeks

If the rule were otherwise, members of

the fact that as long as no private complainant

time has elapsed from the time of the

Thus, even the lapse of considerable time

The CBD-IBP derives its authority to take cognizance of

be struck down as void and of no legal effect for being ultra

PALE | Imprescriptibility of Disbarment & Conflict of Interest | 4

[G.R. No. 105938. September 20, 1996]

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V.

[G.R. No. 108113. September 20, 1996]

the sanctity of fiduciary duty in the client-lawyer relationship.

information relative to the assets of clients as well as their

insidious means and machinations, ACCRA, being the

therefore denies that the shares appearing in his name

Case No. 33.[10]

The PCGG has apparently offered to the ACCRA

ACCRA lawyers and Mr. Roco as similarly situated and,

Respondent Sandiganbayan sanctioned favoritism

The Honorable Sandiganbayan committed grave

to the constitutional right of petitioners ACCRA lawyers

It is quite apparent that petitioners were impleaded by the

We quote Atty. Ongkiko:

these clients. Such being the case, respondent PCGG has no

that distinguishes him from any other professional in society.

without the consent of the client and his

any manner of fraud or chicanery. He must obey his

our jurisdiction as well as in the United States is that a lawyer

Client identity is privileged where a strong

In Ex-Parte Enzor,[34] a state supreme court reversed a

U.S. v. Hodge and Zweig,[35] involved the same exception,

i.e. that client identity is privileged in those instances where a

The Hodge case involved federal grand jury proceedings

The Baird exception is entirely consonant with the principal

to report an occurrence contemplating that it would be used in

All communications made by a client to his counsel, for the

course of such employment as such attorney, he knew that they

assistance.[44] Moreover, where the nature of the attorney-client

In turn, petitioners gave their professional advice in the form of,

available to the prosecutor which do not depend on utilizing a

Court rejected the plea of the petitioner law firm that it

moral discipline." The Court, no less, is not prepared to accept

UCPB, UNICOM and others and that through insidious means

In response to petitioners' last assignment of error,

The complaint in Civil Case No. 0033 alleged that the

First, as to the bare statement that private respondent

Amended Complaint, signed by counsel, claiming that their acts

the undertaking happens to be the leitmotif of the entire

distinctions based on real differences. No such substantial

It is clear then that the case against petitioners should

INC., and BEN A. NICOLAS,

R epresenting conflicting interests is prohibited by the Code of

PALE | Imprescriptibility of Disbarment & Conflict of Interest | 22

written consent is given after a full disclosure of all relevant