Nakpil v.

Valdes AC # 2040 March 4, 1998

Facts:Jose Nakpil was interested in a piece of property situated in Moran, Baguio. He
went into an agreement with Atty. Carlos Valdes for the latter to buy the property in
trust for Nakpil. Valdes did buy the property by contracting 2 loans. The lands titles
were transferred to his name. When Jose Nakpil died, Imelda Nakpil (his wife)
acquired the services of Valdes and his accounting and law firms for the settlement
of the estate of Jose Nakpil. What Valdes did was to exclude the property in Baguio
from the list of assets of Jose Nakpil (he actually transferred the property to his
company, the Caval Realty Corporation) while including the loans he contracted.
What Imelda did was to file a suit for reconveyance in the CFI. While the case was
pending, Imelda also filed an administrative complaint for disbarment against
Valdes. The CFI dismissed the action for reconveyance. The CA reversed the CFI.
The complaint for reconveyance went up to the SC and was decided in favor of
Nakpil. The SC held that Valdes only held the lots in trust for Nakpil.

Issue: W/n Atty. Valdes should be administratively sanctioned for his acts, namely:
o Excluding the property in Baguio from the estate of Jose Nakpil;
o Including his loans as claims on the estate; and
o Apparently, representing conflicting interests when his accounting firm prepared
the list of claims of creditors Angel Nakpil and ENORN against the estate of Jose
Nakpil, which was represented by his law firm.

Held: The SC found Valdes guilty of misconduct and suspends him for 1 year.The
Court held that the first two acts clearly show that Valdes broke the trust reposed on
him by Imelda Nakpil when the latter agreed to use his professional services as a
lawyer and an accountant. It was clear that Jose Nakpil and Atty. Came to an
agreement that the latter would be buying the property in trust for Jose. By his act
of excluding the property from the estate and including the loans he contracted
(and used for his own benefit) as claims, Valdes took for granted the trust formed
between Jose
and him (they had a close relationship since the 50s), which was the basis for
Imeldas decision to use his services.

As to the third charge, we hold respondent guilty of representing conflicting

interests which is proscribed by Canon 15 Rule 15.03. In the case at bar, there is no
question that the interests of the estate and that of its creditors are adverse to each
other. Respondent's accounting firm prepared the list of assets and liabilities of the
estate and, at the same time, computed the claims of two creditors of the estate.
There is clearly a conflict between the interest of the estate which stands as the
debtor, and that of the two claimants who are creditors of the estate