THIRD DIVISION
[A.C. No. 12700. June 16, 2021.][Formerly CBD Case No. 14-4308]
MELANIO S. CU, complainant, vs.ATTY. LUCILLE FE R. MAGGAY-PRINCIPE, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedJune 16, 2021, which reads as follows:
"A.C. No. 12700 (Formerly CBD Case No. 14-4308)(Melanio S. Cu v. Atty. Lucille Fe R. Maggay-Principe). — In a Verified Complaint 1 dated July 17, 2014, complainant Melanio S. Cu (Cu) prayed for the revocation of Atty. Lucille Fe R. Maggay-Principe's (Principe) license to practice law on the ground of representing conflicting interests. Complainant alleged that he was a client of Principe's law office involving a case, and throughout the duration of their attorney-client relationship, and while consulting the same office with the view of engaging their services, Principe represented L.M. United Telephone Co., Inc. (L.M United) in filing a civil case against complainant. The latter then claims that Principe cannot represent L.M. United without violating the rule against representing conflicting interests. 2
On October 9, 2014, Principe filed her Verified Answer 3 in which she refuted the accusations against her. She explained that while she was still an associate of L.M. Maggay and Associates, Herman Seechung (Herman) and Fortunata Seechung-Cu (Fortunata), who were sued as defendants in Civil Case No. 85-755 before the Regional Trial Court, Branch 23 of Naga City (RTC-Naga), engaged her services in August 1985. A few months later, their co-defendant in that case, Trifona Seechung-Federis (Trifona), likewise availed the services of Principe's law firm. Fortunata is the mother of Cu, who later designated Cu as her attorney-in-fact in the aforesaid case. Sometime in January 1991, Principe's law office required its clients to reduce into writing the contract for legal services that was orally agreed upon in 1985. The Contract for Legal Services 4 was signed by Principe on behalf of the law office, while Cu signed as attorney-in-fact for Herman, Fortunata, and Trifona.
Principe continued that while Civil Case No. 85-755 was pending, she became an incorporator, stockholder and member of the Board of Directors of L.M. United, a family corporation. Her late father, Atty. Luciano Maggay (Atty. Luciano) was its President and Chairman of the Board. L.M. United, thereafter, purchased a parcel of land from Antonio J. Cu (Antonio). During the negotiations between Atty. Luciano and Antonio, Cu was usually present and knew about the purchase. Atty. Luciano was then surprised to learn that complainant caused the attachment and execution sale of the property bought from Antonio in a case that he won against Antonio. Atty. Luciano confronted Cu about the attachment and execution sale, but was unsuccessful. As he had to defend the interest of L.M. United, he filed an action for damages (Civil Case No. RTC-01-146) against Cu before the Regional Trial Court, Branch 63 of Calabanga, Camarines Sur (RTC-Calabanga). 5
Principe recounted that in an attempt to prevent her from participating in the case, Cu raised the issue of conflict of interest in Civil Case No. RTC-01-146. However, in an Order dated February 5, 2002, the RTC-Calabanga ruled that there was no lawyer-client relationship between them. Cu still persisted and filed a Motion to Disqualify with Motion for Inhibition asking that L.M. Maggay and Associates be excluded from participating. 6 These were also denied in an Order dated April 23, 2003. Eventually, Civil Case No. RTC-01-146 reached the Court of Appeals, 7 which ruled in favor of L.M. United and directed Cu to pay damages. The rulings in favor of L.M. United were all affirmed by this Court. 8 IAETDc
Principe insisted that Cu never became its client since he merely acted as an agent of Herman, Fortunata, and Trifona. Principe, thus, prayed for the dismissal of the complaint against her, claiming that the complaint for disbarment was an act of vendetta and motivated by bad faith and ill-will to destroy her good name. 9
In a Report and Recommendation 10 dated February 27, 2015, the Investigating Commissioner of the Integrated Bar of the Philippines (IBP)-Commission on Bar Discipline, recommended the dismissal of the Complaint on the ground that it was unsubstantiated and was clearly meant to harass and embarrass Principe.
Upon review by the IBP-Board of Governors (IBP-BOG), it issued Resolution No. XXI-2015-303 11 dated April 19, 2015, which reversed and set aside the Report and Recommendation of the Investigating Commissioner. In its Resolution, the IBP-BOG found Principe guilty of representing conflicting interests and was meted the penalty of suspension from the practice of law for six (6) months. In an Extended Resolution 12 dated February 2, 2017, the IBP-BOG found that, as the counsel of Cu and the latter's mother in the RTC Naga case, Principe cannot represent the telephone company without violating the rule prohibiting a lawyer from representing conflicting interest. Considering that Cu consulted the Principe and her law firm with a view of engaging their services, confidential matters and information could have been exchanged during these consultation meetings.
Principe contested the suspension by filing a Motion for Reconsideration 13 invoking the rule on conclusiveness of judgment. She pointed out that the RTC-Calabanga already ruled on the same issue in Civil Case No. RTC-01-146 wherein it was ruled that she did not represent conflicting interest and that there was no lawyer-client relationship between her and Cu. Principe then accused Cu of forum shopping for filing this disbarment complaint after the RTC already resolved the same controversy.
In a Comment 14 dated November 6, 2017, the Cu countered that Civil Case No. RTC-01-146 has different facts from the instant disbarment complaint and that res judicata is not applicable to administrative proceedings. He also claimed that no forum shopping exists as the grounds relied upon in these two cases are totally different from each other.
After due proceedings, the IBP-BOG issued a Resolution 15 dated June 29, 2018, reducing Principe's period of suspension from six (6) months to three (3) months, with the following disposition:
RESOLVED, to PARTIALLY GRANT the Respondent's Motion for Reconsideration by reducing the recommended penalty of Suspension from the practice of law for six (6) months to THREE (3) MONTHS, considering that the issue of conflict of interest has long been resolved before the RTC of Calabanga, Camarines Sur, and it is respondent's first offense.
Determined to clear her name, Principe filed a Second Motion for Reconsideration which was noted by the IBP-BOG in its Resolution dated September 7, 2019. This time, Principe cited a Separate Opinion in PCGG v. Sandiganbayan, 16 wherein it was supposedly stated that an order denying a motion to disqualify counsel is a final order and that the principle of res judicata should apply. 17
In his Opposition, Cu argued that the Second Motion for Reconsideration was procedurally flawed and that the contentions therein are mere rehash of Principe's previous arguments. 18 The records of the case were, thereafter, elevated to this Court.
Issue
Whether Principe Atty. Lucille Fe R. Maggay-Principe is guilty of representing conflicting interests.
Ruling
After reviewing the facts and recommendations made on the case, We hereby suspend respondent from the practice of law for a period of six (6) months.
The relationship between a lawyer and his client is one imbued with utmost trust and confidence. Thus, lawyers are enjoined to look at any representation situation from "the point of view that there are possible conflicts," and "to think in terms of impaired loyalty" which calls for an evaluation whether his representation, in any way, will impair loyalty to a client. 19 In this regard, a prohibition against representing conflicting interest is observed. Conflict of interest exists when a lawyer represents inconsistent interests of two or more opposing parties. 20 This rule, which is grounded on principles of public policy and good taste, 21 is embodied in the Code of Professional Responsibility, to wit:
CANON 15 — A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND TRANSACTIONS WITH HIS CLIENTS.
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.
Under the afore-cited rule, it is explicit that a lawyer is prohibited from representing new clients whose interests oppose those of a former client in any manner, whether or not they are parties in the same action or on totally unrelated cases. The prohibition is founded on the principles of public policy and good taste. It behooves lawyers not only to keep inviolate the client's 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 of paramount importance in the administration of justice. 22 DcHSEa
Jurisprudence has provided various tests in ascertaining whether a lawyer is guilty of representing conflicting interests, and one of these is whether the acceptance of a new relation would prevent the full discharge of the lawyer's duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty. 23 As a legal representative of complainant in one case, and a legal representative of complainant's opposition in another, respondent can hardly be expected to fulfill her duties with the due diligence and fidelity required of a counsel. In addition, the entity respondent is representing in Civil Case No. RTC-01-146 is her own family's company, hence it would be reasonable to expect that she would harbor biases against complainant which would easily affect how she handles Civil Case No. 85-755 wherein she represents complainant.
Respondent also cannot hide behind the defense that complainant was only an agent of his mother such that there was no lawyer-client relationship between them. A power of attorney is an instrument in writing whereby one person, as principal, appoints another as his agent and confers authority to perform certain specified acts, in which case it is called a special power of attorney, or kinds of acts on behalf of the principal. 24 In short, a person armed with a special power of authority is deemed for all purposes the extension of the legal personality of his principal. So, when complainant suddenly found out that the complaint against him in Civil Case No. RTC-01-146 was prepared by his own counsel, he understandably lost his faith that respondent can still properly represent him in Civil Case No. 85-755. A lawyer owes absolute fidelity to the cause of his client, full devotion to his genuine interest, and warm zeal in the maintenance and defense of his right, 25 and respondent evidently failed to do so. Her acts went against the rationale for the prohibition against conflict of interest which is to assure that the lawyer will represent the client with undivided loyalty, thus, gaining his trust and confidence. 26 We quote with imprimatur the findings of the IBP-BOG when, in originally imposing the penalty of suspension of six months, it stated that:
Furthermore, complainant had been consulting the law firm where respondent belongs to with the clear intention of retaining them as their counsel. This was admitted by the late Atty. Luciano Maggay, father of the respondent. It is therefore clear that when respondent and her law firm represented the telephone company as plaintiff in the RTC Calabanga case against herein complainant while the law firm is also complainant's counsel in another case (RTC Naga), the respondent is guilty of representing conflicting interests. As the counsel of complainant and the latter's mother in the RTC Naga case, respondent cannot represent the telephone company without violating the rule prohibiting a lawyer from representing conflicting interests. Considering that complainant consulted respondents and her law firm with the view of engaging their services, confidential matters and information could have been exchanged during these consultation meetings. As stated in Hilado v. David, 84 Phil. 569 (1949), if a person in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the professional employment is established. The handling of the RTC Naga case by respondent's law firm should have prevented respondent from representing complainant's adverse party in the RTC Calabanga case.
Respondent wants this Board to believe that no professional relationship existed between her and complainant because the latter was merely an attorney-in-fact or agent of complainant's mother in the RTC Naga case. In Burke v. Magulta, A.C. No. 99-634, 10 June 2002, the Supreme Court had the [occasion] to rule that "a lawyer-client relationship was established from the very first moment complainant asked respondent for legal advice regarding the [former's] business. To constitute professional employment, it is not essential that the client employed the attorney professionally on any previous occasion. It is not necessary that any retainer be paid, promised, or charged; neither it is material that the attorney consulted did not afterward handle the case for which his service had been sought."
xxx xxx xxx
Moreover, it must be emphasized that the rule against representing conflicting interest likewise applied to members of the same law firm. Thus, where a lawyer is disqualified or forbidden from appearing as counsel in a case because of conflict of interests, the law firm of which he is a member as well as any member, associate of assistant is similarly disqualified or prohibited from so acting. This rule is a corollary of the rule that the employment of one member of a law firm is considered as an employment of the law firm and that the employment of a law firm is equivalent to a retainer of the members thereof. In light thereof, respondent is personally barred by the rules on ethics from representing an interest contrary to that earlier espoused by his firm applying the rule in Hilado v. David, 84 Phil. 569, 580 (1949). In the more recent case of Anglo v. Valencia, et al., A.C. No. 10567 (25 February 2015), the Supreme Court finds respondents who were members of the same law firm administratively liable for representing conflicting interests. 27
As to respondent's reliance on the PCGG case, We find that this case is not apropos to this present case. The motions for disqualification contemplated in the PCGG case were all filed in relation to civil cases. No disbarment proceedings were involved such that respondent could successfully invoke this case in opposing the present Complaint which seeks to hold her accountable for her actions as a lawyer. Also, the instant case is an administrative case for disbarment, hence, the case of Dinsay v. Atty. Cioco28 comes to mind where this Court categorically declared that:
The doctrine of res judicata applies only to judicial or quasi-judicial proceedings and not to the exercise of the [Court's] administrative powers.
With regards to the penalty imposed on respondent, it is well established that the appropriate penalty against an errant lawyer depends on the exercise of sound judicial discretion based on the surrounding facts. 29 In the case at bench, the IBP-Board of Governors initially meted a six-month suspension. However, upon motion for reconsideration duly filed, it was reduced to only three months taking into account the pronouncement in Civil Case No. RTC-01-146 and that it was the respondent's first offense. Nonetheless, based on the circumstances of this case, this Court finds it proper to impose the penalty of suspension of respondent from the practice of law for a period of six (6) months. SCaITA
IN VIEW OF THE FOREGOING, Atty. Lucille Fe R. Maggay-Principe is SUSPENDED from the practice of law for a period of SIX (6) MONTHS. She is DIRECTED to INFORM this Court of the date of her receipt of this Resolution to determine the reckoning point when her suspension shall take effect.
Let a copy of this Resolution be furnished to the Office of the Bar Confidant, to be appended to the personal record of Atty. Lucille Fe R. Maggay-Principe as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for dissemination to all trial courts for their information and guidance.
SO ORDERED."(Hernando, J., on official leave)
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1.Rollo, pp. 2-5.
2.Id.
3.Id. at 21-26.
4.Id. at 30-31.
5.Id. at 23-24.
6.Id. at 61-62.
7. CA-G.R. CV No. 92773.
8.Rollo, pp. 24-25.
9.Id. at 25.
10.Id. at 259-262.
11.Id. at 257.
12.Id. at 263-270.
13.Id. at 213-224.
14.Id. at 226-228.
15.Id. at 233.
16. 495 Phil. 485 (2015).
17.Rollo, pp. 242-247.
18.Id. at 248-249.
19.Dr. Lee v. Atty. Simando, 710 Phil. 600, 611 (2013).
20.Paces Industrial Corporation v. Atty. Salandanan, 814 Phil. 93, 98 (2017).
21.Samala v. Atty. Valencia, 541 Phil. 1, 8 (2007).
22.Paces Industrial Corporation v. Atty. Salandanan, supra note 19, at 101.
23.Aniñon v. Atty. Sabitsana, Jr., 685 Phil. 322, 327 (2012).
24.Black's Law Dictionary, Sixth Edition, 1991.
25.Plus Builders v. Atty. Revilla, 598 Phil. 255, 260 (2009).
26.Samson v. Atty. Era, 717 Phil. 101, 112 (2013).
27.Rollo, pp. 267-269.
28. 322 Phil. 740, 742 (1996).
29.Samonte v. Atty. Jumamil, 813 Phil. 795, 805 (2017).