Hornilla v. Salunat | A.C. No. 5804 | July 1, 2003 | Ynares-Santiago, J.

Complainants: Benedicto Hornilla and Atty. Federico D. Ricafort

Respondent: Atty. Ernesto S. Salunat

SUMMARY: A complaint was filed by two members of the PPSTA against Atty. Salunat of ASSA Law
Firm for representing conflicting interests in derivative suits involving the PPSTA and its Board of
Directors. Despite his own admission that ASSA Law Firm was the counsel of PPSTA, he still appeared
as counsel for the party against whom it filed the suit. The Court held that in suits of such nature, dual
representation is prohibited as it unavoidably leads to conflict of interests. Salunat was thus found
guilty of violating Rule 15.03 of the CPR, and was admonished by the Court.

FACTS

1. Nov 21, 1997: Hornilla and Ricafort (members of the Philippine Public School Teachers
Association (PPSTA)) filed this administrative complaint against Salunat with the IBP for illegal
and unethical practice and conflict of interest.
2. Complainants' allegations:
a. Salunat is a member of the ASSA Law and Associates, which was the retained counself
of the PPSTA.
b. He appeared as counsel for PPSTA's Board of Directors in an intra-corporate case filed
against it by PPSTA. He also appeared as counsel for the members of the board in a
complaint with the Ombudsman for unlawful spending and the undervalued sale of
their property.
c. He was guilty of conflict of interest because he was being paid out of PPSTA's corporate
funds where complainants themselves have contributed (since they were members).
d. He refused to withdraw his appearance as counsel despite being told of this conflict of
interest.
e. He violated Rule 15.061 of the Code of Professional Responsibility when he appeared at
the PPSTA board meeting and ensured their victory in the intra-corporate case.
3. Respondent's answer:
a. His appearance as counsel for PPSTA was done on behalf of the law firm.
b. The intra-corporate case was handled by the law firm of Atty. de Mesa, not ASSA. As for
the Ombudsman case, all he did was file a "Manifestation for Extreme Urgency" to
dismiss the complaint.
c. He didn't ensure the victory of the Board; he merely said that "the truth will come out."
d. Ricafort was guilty of gross misconduct and malpractice for the false charges he made.
4. After investigation, the IBP recommended that Salunat be suspended from the practice of law
for six months. The recommendation was approved by the Board of Governors.
5. Salunat filed this Motion for Reconsideration with the Supreme Court.

1
Rule 15.06 - A lawyer shall not state or imply that he is able to influence any public official, tribunal or
legislative body.
ISSUE

Whether Salunat violated Rule 15.032-- YES

1. There is conflict of interest when a lawyer represents inconsistent interests of two or more
opposing parties.
a. Tests of the inconsistency of interests:
i. "whether or not in behalf of one client, it is the lawyer's duty to fight for a claim,
but it is his duty to oppose it for the other client.
ii. whether the acceptance of a new relation will prevent the lawyer from the full
discharge of his duty, or invite suspicion of unfaithfulness or double dealing.
2. In derivative suits, the rule is against dual representation because it would unavoidably give
rise to a conflict of interest. The corporation should be presumptively incapable of giving valid
consent to waive the restriction in such suits.
a. A derivative suit is a suit wherein a stockholders sues the corporate directors for a
breach of trust. The corporation, not the stockholder filing the suit, is the real party in
interest because the suit is brought in behalf of the interest of the corporation.
b. Note: A corporation's board of directors is separate and distinct from the corporate
entity itself.
3. He is guilty of conflict of interest for representing the parties against whom his other client filed
the suit.
a. Salunat himself admits that ASSA Law Firm, of which he is the Managing Partner, was
retained as counsel of PPSTA. Despite this, he still appeared as counsel of the Board of
Directors in the suit.
b. By filing of the Manifestation of Extreme, he necessarily entered his appearance in the
Ombudsman case.

DISPOSITION

Salunat is ADMONISHED to observe a higher degree of fidelity in the practice of law. He is further
WARNED that a repetion of the same will be dealt with more severely.

2
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.