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409 Phil. 466


[ A.C. No. 4673, April 27, 2001 ]




This is a complaint filed against petitioner Atty. Hector Teodosio for having allegedly represented clients with conflicting interests in violation of Rule 15.01 of the Code of Professional Responsibility.

Respondent Mercedes Nava alleged that petitioner acted as counsel for Melanie Batislaong in several cases[1] in various branches of the Iloilo City Regional Trial Court while acting as counsel for Letecia Espinosa and Ma. Gilda Palma in cases[2] filed by them against Melanie Batislaong and herself, respondent Mercedes Nava.

In his comment, petitioner admits that Melanie Batislaong, Letecia Espinosa, and Ma. Gilda Palma are indeed his clients with respect to the cases mentioned by respondent. He denies, however, that his clients' interests are conflicting and contends that his clients in fact have a common interest against respondent Nava.  According to him, Nava used to be the manager of Batislaong's lending business and, in that capacity, dealt with several borrowers, including Espinosa and Palma.  Due to acts of mismanagement allegedly committed by Nava, Batislaong, then represented by Atty. Eugenio O. Original, sued Nava for accounting and damages (Civil Case No. 21417). In turn, Nava charged Batislaong (Criminal Case Nos. 79688 and 44181) and Espinosa and Palma (I.S. Nos. 2200-93 and 2068-93) with estafa.

While the complaints against them were pending preliminary investigation,  Espinosa and Palma hired petitioner's services in seeking the annulment of certain trust receipt agreements allegedly falsified by Nava, on the basis of which the criminal complaints against them were filed.  As a result, petitioner filed on behalf of Espinosa and Palma Civil Case Nos. 21511 and 21493 against Nava and Batislaong for annulment of contract and damages. Petitioner claims that he impleaded Batislaong  as Nava's co-defendant because  Espinosa  and Palma  wanted  to settle the balance of the amount  they had  borrowed  from Batislaong  through  Nava but they were unsure whether the payment should be made to Nava or Batislaong as the two had parted ways.  Both were, therefore, impleaded so that they could interplead who between them should receive the payment.  Petitioner claims that it was only after he had filed these cases that Batislaong offered to hire him as her counsel not only in the civil case she had filed against Nava (Civil Case No. 21417) but also in the two estafa cases, Criminal Case Nos. 79688 and 44181, filed against her by Nava.  Petitioner claims that he agreed to represent Batislaong in these cases only after he had explained to her the nature of the complaints filed by Espinosa and Palma against her and Nava in Civil Case Nos. 21511 and 21493.[3]

Petitioner submitted affidavits executed by Batislaong, Espinosa, and Palma stating that they have no complaints in the way petitioner handled their cases and that each of them was aware that the other was represented by petitioner.  Petitioner further submitted another set of affidavits executed by Espinosa and Palma stating in detail the extent of their knowledge of petitioner's involvement in Batislaong's cases as well as the basis of their consent for him to act as their common counsel.[4]

Respondent assails the affidavits of Batislaong, Espinosa, and Palma on the ground that they were notarized by a lawyer from petitioner's law firm and that they do not bear the data as to the residence certificates of the affiants.  In addition, respondent claims that petitioner failed to ask the court to declare Batislaong in default despite the latter's failure to answer the complaints filed by Espinosa and Palma, and contends that this is proof of petitioner's bias for her (Batislaong).[5] In response, petitioner claims that there was no need to declare Batislaong in default in Civil Case Nos. 21511 and 21493 because Nava, in her Answer, had disclaimed any interest in the offer of payment of Palma and Espinosa, making the necessity for the defendants to interplead moot and academic as the money would logically be paid to Batislaong.[6]

The Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.  In a report, dated June 23, 1998, IBP Commissioner Milagros V. San Juan recommended the dismissal of the complaint for lack of merit.[7] However, the IBP Board of Governors, in  Resolution XIII-99-23 of February 23, 1999, found petitioner guilty of violation of Rule 15.03 of the Code of Professional Responsibility and ordered him suspended from the practice of law for one year.  The Board's resolution reads:

Adm. Case No. 4673
Mercedes Nava vs.
Atty. Hector Teodosio

RESOLVED to SUSPEND Atty. Hector Teodosio for ONE (1) YEAR from the practice of law for representing litigants with CONFLICTING INTERESTS.[8]

IBP Governor for Eastern Visayas, Kenny A.H. Tantuico, dissenting, adopted the report and recommendation of Commissioner San Juan in view of the consent given by respondent's clients.

On April 13, 1999, petitioner filed a motion to set aside IBP Resolution XIII-99-23.  The Court referred the motion to the IBP which, on December 11, 1999, issued Resolution XIV-99-286, affirming the Board's original Resolution XIII-99-23.

After receipt of IBP Resolution XIV-99-286, the Court resolved to treat petitioner's motion to set aside the questioned IBP resolution as his petition for review thereof and required respondent to file comment.  In lieu of comment, respondent filed a manifestation stating that the points raised in petitioner's motion were mere reiterations of what he had already stated in his prior pleadings.[9] Petitioner filed a Reply to respondent's manifestation.[10] We now deal with the issues raised in the petition for review.

First. Petitioner points out that the IBP Board ordered him suspended from the practice of law without stating the facts and the law on which its decision is  based.  On the other hand, although the report of the investigating commissioner contains findings, her recommendation was for the dismissal of the complaint against petitioner for lack of merit.  Petitioner contends that even the commissioner's report is of doubtful validity since she failed to schedule any hearing on the case before she submitted her report to the Board of Governors.[11] The pertinent provisions of Rule 139-B  of the Rules of Court on the IBP's investigation of disbarment complaints, the report of its investigator, and the review of the latter's findings by the Board of Governors, state:

SEC. 8. Investigation. ¾ Upon joinder of issues or upon failure of the respondent to answer, the Investigator shall, with deliberate speed, proceed with the investigation of the case.  He shall have the power to issue subpoenas and administer oaths.  The respondent shall be given full opportunity to defend himself, to present witnesses on his behalf and be heard by himself and counsel.  However, if upon reasonable notice, the respondent fails to appear, the investigation shall proceed ex parte.

. . . .

SEC. 10.  Report of Investigator. ¾ Not later than thirty (30) days from termination of the investigation, the Investigator shall submit a report containing his findings of fact and recommendations to the IBP Board of Governors, together with the stenographic notes and the transcript thereof, and all the evidence presented during the investigation.  The submission of the report need not await the transcription of the stenographic notes, it being sufficient that the report reproduce substantially from the Investigator's personal notes any relevant and pertinent testimonies.

. . . .

SEC. 12.  Review and decision by the Board of Governors. ¾  (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it by the Investigator with his report.  The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based. It shall be promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigator's report.

(b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action.  (Emphasis added)

The requirement that the IBP investigator afford the respondent in a disbarment complaint full opportunity to present his case cannot be taken lightly for it is meant to ensure that baseless accusations against members of the Bar do not prosper.[12] Similarly, the requirement that the decision of the Board of Governors state the facts and the reasons on which it is based, which is akin to what is required of the decisions of courts of record, serves an important function.  For aside from informing the parties the reason for the decision to enable them to point out to the appellate court the findings with which they are not in agreement, in case any of them decides to appeal the decision, it is also an assurance that the judge, or the Board of Governors in this case, reached his judgment through the process of legal reasoning.[13] In the case at bar, the IBP failed to observe these procedural requirements.  Commissioner San Juan appear not to have scheduled a hearing on the case nor required the parties to submit their evidence.  Similarly, the Board of Governors' resolution suspending petitioner from the practice of law does not contain any findings of fact or law upon which it based its ruling.

Non-compliance with the foregoing procedural rules would normally result in the remand of the case.[14] Nevertheless, in instances where the controversy has been pending resolution for quite sometime and the issues involved could be resolved on the basis of the records on appeal, the Court has opted to resolve the case in the interest of justice and speedy disposition of cases.[15] In view of the presence of such circumstances in this case, the Court deems it advisable to do so.

Second. We  now resolve the question whether petitioner is guilty of violation of the Code of Professional Responsibility which in pertinent part provides:

Rule 15.03 ¾ A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

Under Canon 6 of the previous Canons of Professional Ethics, a lawyer is deemed to represent 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.[16] The rule is designed to remove from attorneys the opportunity to take advantage of the secrets of clients obtained during the existence of the client-attorney relation.[17]

Based on the facts of this case, we hold that petitioner's conduct does not amount to a violation of the rule.  The records bear out petitioner's contention that based on the causes of action of the cases involving Melanie Batislaong on one hand and Letecia Espinosa and Ma. Gilda Palma on the other, he could simultaneously represent them without any possible violation of the client-attorney confidentiality.  In the cases filed by him for Espinosa and Palma (Civil Case Nos. 21511 and 21493), it is only Nava against whom the former have an adverse interest as it was the latter who allegedly falsified the trust receipt agreements to the prejudice of Palma and Espinosa.  Indeed, were it not for the offer of Palma and Espinosa to settle their obligation, there would have been no need to implead Batislaong as a defendant.  On the other hand, in the other cases in which Batislaong is a party, either as plaintiff in Civil Case No. 21417 or as an accused in Criminal Case Nos. 78200,  79688, and 44181, neither Palma nor Espinosa are parties.  Indeed, it is Nava who is the respondent in the first case and the private complainant in the last two criminal cases.  Under the foregoing circumstances, the danger that petitioner may abuse his clients' confidences to the detriment of the other is absent.

Respondent contends that petitioner's failure to ask the court to have Batislaong declared in default in Civil Case Nos. 21511 and 21493 despite the fact that she failed to file her answer is proof that he was favoring Batislaong over Espinosa and Palma.  This contention is untenable.  As petitioner explains, with Nava disclaiming any interest in the offer of payment of Espinosa and Palma, petitioner found no need to have Batislaong declared in default as Nava's contention meant that it was Batislaong alone who would be entitled to receive payment.  In any case, Batislaong's failure to file her answer, coupled with Nava's disavowal of interest, could only mean that the money offered in payment will be kept in the custody of the court subject to future claims.

Third.  Even granting that the interests of Espinosa, Palma, and Batislaong are conflicting, petitioner cannot be held liable for acting as their common counsel in view of the fact that, as stated in their affidavits, petitioner explained to them the consequences of his representation and that they gave their consent to the same.  Indeed, Espinosa and Palma stated that it was they themselves who brought Batislaong to petitioner's office so that the latter could engage his services.[18] The fact that the first set of affidavits were uniformly notarized by an associate in petitioner's law firm and that they did not state certain data relating to the residence certificates of the affiants do not adversely affect their validity absent any proof that the affiants did not execute them of their own volition or that their signature therein are not authentic.

WHEREFORE, Resolutions XIII-99-23 and XIV-99-286 of the Integrated Bar of the Philippines are SET ASIDE and the complaint against respondent Atty. Hector Teodosio is DISMISSED for lack of merit.


Bellosillo, (Chairman), and Buena, JJ., concur.
Quisumbing, and De Leon, Jr., JJ., on leave.

[1] Criminal Case Nos. 78200, 76686, and 44181, all entitled "People v. Melanie Batislaong" and Civil Case No. 21417, entitled "Melanie Batislaong v. Mercedes Nava."

[2] Civil Case No. 21511, entitled "Letecia Espinosa v. Mercedes Nava and Melanie Bastislaong" and Civil Case No. 21493, entitled "Spouses Jesus Palma, Jr. and Ma. Gilda Palma v. Mercedes Nava and Melanie Batislaong."

[3] Rollo, pp. 94-110.

[4] Id., pp. 148-151,  271-276.

[5] Id., pp. 155, 159, 235-237.

[6] Id., p. 208.

[7] Id., vol. IV, pp. 32-34.

[8] Id., vol. IV, p. 31.

[9] Id., pp. 284-286.

[10] Id., pp. 291-295.

[11] Id., vol. IV, pp. 24-28.

[12] See Cottam v. Laysa, Adm. Case No. 4834, Feb. 29, 2000.

[13] People v. Bugarin, 273 SCRA 389 (1997).

[14] See Cottam v. Laysa, supra.

[15] See People v. Bugarin, supra.

[16] See Buted v. Hernando, 203 SCRA 1 (1991); Alisbo v. Jalandoon, Sr., 199 SCRA 321 (1991).

[17] United States v. Laranja, 21 Phil. 500 (1912).

[18] Rollo, pp. 269-276.

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