2. de Guzman v. de Dios

DE GUZMAN vs. DE DIOS A.C. No. 4943. January 26, 2001

FACTS

In 1995, complainant De Guzman engaged the services of respondent De Dios as counsel in order to form a corporation. Later, in1996, with the assistance of the latter, uzu!i "each #otel, Inc. $"#I% was registered with the ecurities and &'change (ommission. (omplainant paid on respondent a monthl) retainer fee of *5,+++.++. In, 199, the corporation re-uired complainant to pa) her unpaid suscried shares of stoc!  amounting to */,/05,+++.++ or //,05+ shares on or efore Decemer 0+, 199. hen in 1992, De Guzman received notice of the pulic auction sale of her delin-uent shares and a cop) of a oard resolution authorizing such sale. (omplainant soon learned that her shares had een ac-uired ) 3amon del 3osario, one of the incorporators of "#I. he sale ousted complainant from the corporation completel). 4hile respondent rose to e president of the corporation. (omplainant alleged that she relied on the advice of tt). De Dios and elieved that would help her with the management of the corporation. he pointed out that respondent appeared as her her couns counsel el and and sign signed ed plead pleadin ings gs in a case case where where compl complai aina nant nt was was one one of the the part partie ies. s. 3espondent, however, e'plained that she onl) appeared ecause the propert) involved elonged to "#I, that the complainant misunderstood her role legal counsel of uzu!i "each #otel, Inc.

ISSUE

47 there is attorne)8client relationship etween the parties 47 there is violation of o f law)ers oath

!E"D

:es. ttorne)8client relationship e'isted etween the parties. It was the complainant who retained respondent to form a corporation. he appeared as counsel in ehalf eh alf of complainant. :es, there is violation of law)ers oath. Law)ers must conduct themselves, especiall) in their dealings with their clients and the pulic at large, with honest) and integrit) in a manner   e)ond reproach. s a law)er, he is ound ) her oath to do no falsehood or consent to its commission and to conduct herself as a law)er according to the est of her !nowledge and discretion. he law)ers oath is a source of oligations and violation thereof is a ground for  suspension, disarment, or other disciplinar) action. In this this case case,, ther theree was was evide evidence nce of coll collus usio ion n etw etween een the the oard oard of dire direct ctor orss and and respondent wherein the complainant was ousted completel) from the corporation while the respondent ecame the *resident. It is clear that the acts of respondent tt). De Dios are clearl) in violation of her solemn oath as a law)er ) representing conflicting interests and engaging in

unlawful, dishonest, immoral or deceitful conduct. hus, upreme (ourt ;*&7D her from the practice of law for si' $6% months, with warning that a repetition of the charges will e dealth with more severel).

7

#A.C. No. 4943. January 26, 2001$

DIANA D. DE GUZMAN, complainant, vs. ATT%. "OU&DES I. DE DIOS, respondent . & E SO " U T I O N 'A&DO, J .

he case efore the (ourt is a complaint i?1@ for disarment against tt). Lourdes I. De Dios on the ground of violation of (anon 15, 3ule 15.+0 of the code of *rofessional 3esponsiilit), for representing conflicting interests, and of rticle 1A91 (ivil (ode, for ac-uiring propert) in litigation. In 1995, complainant engaged the services of respondent as counsel in order to form a corporation, which would engage in hotel and restaurant usiness in >longapo (it). >n Banuar) 1+, 1996, with the assistance of tt). De Dios, complainant registered uzu!i "each #otel, Inc. $"#I% with the ecurities and &'change (ommission.ii?/@ (omplainant paid on respondent a monthl) retainer fee of *5,+++.++. >n Decemer 15, 199, the corporation re-uired complainant to pa) her unpaid suscried shares of stoc! amounting to two million two hundred and thirt) five thousand pesos $*/,/05,+++.++% or //,05+ shares, on or efore Decemer 0+, 199. >n Banuar) /9, 1992,iii?0@  complainant received notice of the pulic auction sale of her  delin-uent shares and a cop) of a oard resolution dated Banuar) 6, 1992 authorizing such sale.iv ?A@  (omplainant soon learned that her shares had een ac-uired ) 3amon del 3osario, one of the incorporators of "#I. he sale ousted complainant from the corporation completel). 4hile respondent rose to e president of the corporation, complainant lost all her lifes savings invested therein. (omplainant alleged that she relied on the advice of tt). De Dios and elieved that as the maCorit) stoc!holder, tt). de Dios would help her with the management of the corporation. (omplainant pointed out that respondent appeared as her counsel and signed pleadings in a case where complainant was one of the parties.v?5@ 3espondent, however, e'plained that she onl) appeared ecause the propert) involved elonged to "#I. 3espondent alleged that complainant misunderstood the role of respondent as legal counsel of uzu!i "each #otel, Inc. 3espondent manifested that her appearance as counsel for complainant Diana de Guzman was to protect the

rights and interest of "#I since the latter was real owner of the land in controvers). 3espondent further said that the land on which the resort was estalished elonged to the Bapanese incorporators, not to complainant. he relationship of the complainant and the Bapanese investors turned sour ecause complainant misappropriated the funds and propert) of the corporation. o save the corporation from an!ruptc), respondent advised all concerned stoc!holders that it was proper to call for the pa)ment of unpaid suscriptions and suse-uent sale of the delin-uent shares. hese lead to the auction of the unpaid shares of complainant and hence, the ouster of complainant from the corporation. eantime, r. Del 3osario transferred one hundred $1++% shares to respondent in pa)ment of legal services as evidenced ) a Deed of 4aiver and ransfer of corporate hares of toc!. >n >ctoer //, 1999, the Integrated "ar of the *hilippines issued a resolutionvi?6@ finding that the acts of respondent were not motivated ) ill will as she acts in the est interest of her client, "#I. he I"* found that complainant failed to present convincing proof of her attorne)8client relationship with respondent other than the pleadings respondent filed in the trial court where complainant was one of the parties. 4e disagree. 4e find merit in the complaint. here are certain facts presented efore us that created dout on the propriet) of the declaration of delin-uent shares and suse-uent sale of complainants entire suscription. (omplainant suscried to /9,2++ shares e-uivalent to two million nine hundred and eight) thousand pesos $*/,92+,+++.++%. he was the maCorit) stoc!holder. >ut of  the suscried shares, she paid up seven hundred fort)8five thousand pesos $*A5,+++.++% during the stage of incorporation. #ow complainant got ousted from the corporation considering the amount she had invested in it is e)ond us. Granting that the sale of her delin-uent shares was valid, what happened to her  original sharesE his, at least, should have een e'plained. 3espondent claims that there was no attorne)8client relationship etween her and complainant. he claim has no merit. It was complainant who retained respondent to form a corporation. he appeared as counsel in ehalf of complainant. here was evidence of collusion etween the oard of directors and respondent. Indeed, the  oard of directors now included respondent as the president, 3amon del 3osario as secretar), #i!oi uzu!i as chairman, gnes 3odriguez as treasurer and a!a)u!i ato as director.vii?@ he  present situation shows a clear case of conflict of interest of the respondent. Law)ers must conduct themselves, especiall) in their dealings with their clients and the  pulic at large, with honest) and integrit) in a manner e)ond reproach.viii?2@ 4e saidF o sa) that law)ers must at all times uphold and respect the law is to state the ovious, ut such statement can never e overemphasized. (onsidering that, Hof all classes and professions, ?law)ers are@ most sacredl) ound to uphold the law, it is imperative that the) live ) the law. ccordingl), law)ers who violate their oath and engage in deceitful conduct have no place in the legal profession.i'?9@

(learl), respondent violated the prohiition against representing conflicting interests and engaging in unlawful, dishonest, immoral or deceitful conduct.'?1+@ s a law)er, respondent is ound ) her oath to do no falsehood or consent to its commission and to conduct herself as a law)er according to the est of her !nowledge and discretion. he law)ers oath is a source of oligations and violation thereof is a ground for  suspension, disarment,'i?11@ or other disciplinar) action.'ii?1/@ he acts of respondent tt). De Dios are clearl) in violation of her solemn oath as a law)er that this (ourt will not tolerate. (!E&EFO&E, the (ourt finds respondent tt). Lourdes I. De Dios remiss in her sworn dut) to her client, and to the ar. he (ourt here) ;*&7D her from the practice of law for  si' $6% months, with warning that a repetition of the charges will e dealth with more severel).

Let a cop) ofthis decision e entered in the personal records of respondent as an attorne) and as a memer of the "ar, and furnish the "ar (onfidant, the Integrated "ar of the *hilippines, and the (ourt dministrator for circulation to all courts in the countr). SO O&DE&ED.

 Davide, Jr., C.J. (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur .

i[1] Filed on September 4, 1998. ii[2] SEC Registration No. AS9!"2!#, Rollo, p. 4"28. iii[$] %etter dated &an'ar( 2, 1998, Rollo, p. $8. i)[4] Rollo, p. $*. )[#] Entr( o+ Appearane, Rollo, p. *4. )i[!] Rollo, pp. 119"12#. )ii[*] Rollo, p. 4!. )iii[8] Res'rreion v . Sa(son, $ SCRA 129 [1998]. i-[9] Ibid., iting E- parte all, 1* /.S. 2!#, ited in 0alolm, %egal and &'diial Etis, p. 214. -[1] Code o+ ro+essional Responsibilit(, Canon 1, R'le 1.1. -i[11] 0agdal'(o v . Nae, A.C. $88, Febr'ar( 2, 2, iting Ade3 Realt(, n. v . CA, 21# SCRA $1 5199267 Riards v . Aso(, 1#2 SCRA 4#, # 5198*67 ia3 v . erong, 141 SCRA 4!, 49 5198!6. -ii[12] 0agdal'(o ). Nae, A.C., supra, Note 11, iting Re(es v . aa, 24! SCRA !4, !* 5199#6.