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[A.C. No. 6554 [Formerly CBD-02-984].
ERLINDA K. ILUSORIO-BILDNER v. ATTY. LUIS K. LOKIN, JR., AND THE BOARD OF GOVERNORS OF THE IBP
Special Third Division
Sirs/Mesdames:
Quoted hereunder, for your information is a resolution of the Third
Division of this Court dated
A.C. No. 6554 [Formerly CBD-02-984] (Erlinda K. IIusorio-Bildner v. Atty. Luis K. Lokin, Jr., and the Board of Governors of the IBP.)
All the parties in the present case have filed motions for reconsideration of this Court's Decision dated December 14, 2005 (Decision) finding respondent Atty. Luis Lokin, Jr. (Lokin) guilty of violating Rule 15.03 of the Code of Professional Responsibility and suspending him from the practice of law for three months.
In his Motion for Reconsideration dated January 22, 2006, Lokin, now represented by counsel Atty. Myla S. Bernardo who filed an Entry of Appearance dated January 22, 2006 and which is NOTED, asks this Court to reverse and set aside the Decision, with an alternative prayer for an evidentiary hearing.
The Motion for Reconsideration dated January 27, 2006 filed by the Integrated Bar of the Philippines (IBP) likewise prays that this Court set aside the Decision and, instead, affirm the resolution of its Board of Governors dismissing the administrative complaint against respondent Lokin.
On the other hand, the Manifestation with Motion for Reconsideration dated January 4, 2006 filed by petitioner Erlinda K. IIusorio-Bildner prays that the penalty imposed by this Court in its Decision be increased to three years without prejudice to the penalty of disbarment.
In his motion, Lokin again proffers that he is not guilty of representing conflicting interests since the handling of the earlier Sandiganbayan case was turned over to Atty. Demaree J.B. Raval as his personal account, totally separate and exclusive of the Law Firm accounts. While this argument has been sufficiently treated in the Decision, Lokin has submitted alleged newly-discovered evidence: a Special Power of Attorney (SPA) executed by Potenciano Ilusorio (Ilusorio) for Atty. Raval.
The SPA named Atty. Raval, not the Law Firm of RAVAL, SUPLICO & LOKIN, as the "true and lawful attorney-in-fact" of Ilusorio. The designation, however, in no way excludes the law firm's representation of Ilusorio as his legal counsel. Indeed, the SPA itself is evidence of the attorney-client relationship then existing between the law firm and Ilusorio. Besides assigning to Raval the power to represent Ilusorio before the Sandiganbayan with respect to the recovery of the shares and dividends subject of his claim, the SPA assigns the following, among other powers:
4. Upon release of the cash dividends, to settle any account with the Law Firm of RAVAL, SUPLICO & LOKIN and with any person whomsoever may have assisted the Firm in the recovery of the shares and dividends.
It is clearly manifest that Ilusorio assumed that the law firm, not merely Raval, would be involved in pursuing his claim before the Sandiganbayan. The SPA presented by Lokin thus undermines rather than supports his position.
Lokin asserts that, if there was really a conflict of interest, Ilusorio would have objected to his appearance in behalf of the other party in the SEC case. The IBP, in its Motion for Reconsideration, asserts along the same vein that Ilusorio's failure to move for the disqualification or inhibition of Lokin in the SEC case amounted to an implied waiver. The case of San Jose Homeowners, Inc. v. Romanillo , [1] cralaw however, clearly instructs:
It is inconsequential that petitioner never questioned the propriety of respondent's continued representation of Lydia Durano-Rodriguez. The lack of opposition does not mean tacit consent. As long as the lawyer represents inconsistent interests of two (2) or more opposing clients, he is guilty of violating his oath. Rule 15.03 of the Code of Professional Responsibility specifically mandates that a lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure. x x x (Underscoring supplied)
Since Lokin has not shown any written consent of Ilusorio, his representation of conflicting interests must be held to be a violation of ethical rules meriting disciplinary action from this Court.
Lokin further asserts that when he averred before the SEC that Ilusorio's petition is a premature action to enforce the Compromise Agreement, he was not arguing against the validity of the agreement but was only stating a fact. Similarly, the IBP proffers that Lokin did not contest the validity of the agreement before the SEC but merely argued that it had no jurisdiction over Ilusorio's petition.
The immediately foregoing view misunderstands what constitutes representation of conflicting interests. This Court, in Pormento , Sr. v. Pontevedra , [2] cralaw ruled:
A lawyer is forbidden from representing a subsequent client against a former client when the subject matter of the present controversy is related, directly or indirectly, to the subject matter of the previous litigation in which he appeared for the former client. x x x
The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter and is applicable however slight such adverse interest may be. In essence, what a lawyer owes his former client is to maintain inviolate the client's confidence or to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him. (Emphasis and underscoring supplied)
And in Pasay Law and Conscience Union, Inc. v. Paz, [3] cralaw it held:
Whatever may be said as to whether or not respondent utilized against his former client information given to him in a professional capacity, the mere fact of their previous relationship should have precluded him from appearing as counsel for the other side in the forcible entry case. (Emphasis and underscoring supplied)
The act alone of representing a subsequent client against a former client in any matter related to the subject of the previous litigation thus constitutes a violation of the rule against representing conflicting interests. Whatever then may be the tenor or merit of the arguments Lokin made in behalf of his clients in the SEC case, his mere act of appearing therein against a former client already constituted professional misconduct in view of the clear relation of the subject matter in that SEC case to that of the earlier case in the Sandiganbayan. The rule against representing conflicting interests, it bears emphasis,
x x x is designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well to protect the honest lawyer from unfounded suspicion of unprofessional practice. It is founded on principles of public policy, on good taste. As has been said in another case, the question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standards. With these thoughts in mind, it behooves attorneys, like Ceasar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. [4] cralaw (Underscoring supplied)
The relation of the subject matter in the Sandiganbayan case to that in the subsequent SEC case is simply too clear to be overlooked. Indeed, it baffles this Court that the IBP, in its Motion for Reconsideration, remains adamant in maintaining that the two cases are in no way related, when the contrary is evident, not merely from the Memorandum which Lokin himself filed before the SEC, the most relevant portion of which was already quoted in the Decision, but also from the statements in Ilusorio's petition before the SEC.
After having alleged in his SEC petition that Philippine Overseas Telecommunications Corporation (POTC) owned all the outstanding capital stock of PHILCOMSAT, [5] cralaw Ilusorio made the following argument in support of his claim that the election of PHILCOMSAT directors subject of said petition was invalid:
5.5 Assuming arguendo that indirect representation is allowed, no quorum could have been constituted in the questioned PHILCOMSAT meeting because the stockholders entitled to vote the majority of POTC's outstanding capital stock are the Petitioners Ilusorio , Fidelity Farms, Inc. and Great Asia Enterprises, who were all indubitably absent and not represented in the assailed meeting.
5.5.1 As of
|
|
No. of Shares |
|
Potenciano Ilusorio |
300 |
|
Fidelity Farms, Inc. |
781 |
|
Great Asia Enterprises |
694 |
|
Total |
1,775 |
5.5.2 In addition, Petitioner Ilusorio is the legal and beneficial owner of Six Hundred Seventy-three (673) shares in POTC pursuant to a Compromise Agreement entered into with the Presidential Commission on Good Government (PCGG) in 1996. In this Compromise Agreement, PCGG expressly recognized the right and ownership of Mr. Ilusorio over 673 shares of POTC held by Mid-Pasig Land Development Corp. ("Mid-Pasig") and Independent Realty Corp. ("IRC"). The Sandiganbayan approved this Compromise Agreement in an order dated 8 June 1998. (Copies of the Compromise Agreement and the Sandiganbayan order approving the same are attached hereto as Annexes "D" and "E".)
5.5.3 Furthermore, in addition to the 673 POTC shares Petitioner Ilusorio owns pursuant to the Compromise Agreement, the PCGG gave to him the right to vote the Four Thousand Seven Hundred Twenty-Seven (4,727) POTC shares held by Mid-Pasig and IRC, which PCGG previously sequestered, for five (5) years from the signing of the Compromise Agreement. (A copy of this Ilusorio-PCGG Proxy Agreement dated 28 June 1998 is hereto attached and made an integral part thereof as Annex "F".)
5.6 In sum, Petitioners Ilusorio, Fidelity Farms, Inc. and Great Asia Enterprises are entitled to vote majority of the outstanding capital stock of POTC on account of their ownership of and voting power over the following shareholdings in POTC:
|
Pontenciano Ilusorio |
300 673 (Compromise Agreement) 4,727 (Proxy Agreement) |
|
Fidelity Farms, Inc. |
781 |
|
Great Asia Enterprises |
694 -------- |
|
Total: |
7,175 |
|
Percentage |
53.04% |
5.6.1 Thus, with this combined ownership and voting power over 53.04% of the outstanding capital stock of POTC, and assuming that indirect representation of POTC in the questioned meeting could have been allowed in said meeting, only Petitioners Ilusorio, Fidelity Farms and Great Asia could have mustered the required number of votes as to constitute a quorum therein. That they were indubitably neither present nor represented in the assailed meeting clearly and undeniably show that the questioned meeting was devoid of the quorum required under PHILCOMSAT'S By-laws. [6] cralaw (Emphasis and underscoring supplied)
Not only, therefore, did Ilusorio's SEC petition refer repeatedly to the Compromise Agreement, which circumstance alone already contradicts the IBP's contention that it "in no way" relates to the Sandiganbayan case; Ilusorio even made the existence of such agreement one of his principal arguments in challenging the validity of the PHILCOMSAT meeting subject of the SEC case.
When, therefore, Lokin appeared in the SEC case as counsel for the therein respondents, he was clearly representing a party which had an interest in preventing the implementation of the Compromise Agreement - the same agreement, it bears repeating, which Lokin and his firm previously negotiated for Ilusorio. Lokin, in fact, was acting precisely in pursuit of this interest when he argued before the SEC that the implementation of the agreement was still premature.
Even assuming arguendo that Lokin did not challenge the legality of the agreement itself or that its implementation was, in fact, premature, neither of these circumstances can obliterate the fact that the interest which he represented for his former client and that for his subsequent clients were clearly opposed to each other.
Lokin finally asserts that his appearance in the SEC case should not be found unethical, it being a mere logical consequence of his being the Corporate Secretary of PHILCOMSAT, thus making him a necessary party. This contention, however, deserves scant consideration. Lokin was not a respondent in the SEC case. Plainly, his appearance was solely as counsel for the respondents, not as a party.
His appearance as counsel cannot be considered "a logical consequence" of his position as Corporate Secretary, for there is a distinction between that position and that of legal counsel for the corporation. The duties of corporate secretary generally have to do with the making and keeping of the corporate records, such as the minutes of the meetings of stockholders and directors. [7] cralaw They do not necessarily include the duty to litigate cases for the corporation as its legal counsel.
The IBP takes exception to this Court's ruling that motions for reconsideration in bar discipline cases are allowed, alleging that Rule III (Pleadings, Notices and Appearances), Section 2(c) of the new Rules of Procedure of the IBP Commission on Bar Discipline prohibits such motions for reconsideration. Said provision reads:
SECTION 12. Prohibited Pleadings. The following pleadings shall not be allowed, to wit:
x x x x
c. Motion for new trial, or for reconsideration of resolution or order
x x x x
This Court, however, besides not being bound by the rules of the IBP, has already clarified in a long line of cases that motions for reconsideration are not prohibited in bar discipline cases. The Decision was a mere reiteration of these rulings. The IBP must thus conform to these pronouncements. As this Court has recently stated:
The [Commission on Bar Discipline - Integrated Bar of the Philippines] derives its authority to take cognizance of administrative complaints against lawyers from this Court which has the inherent power to regulate, supervise and control the practice of law in the Philippines. Hence, in the exercise of its delegated power to entertain administrative complaints against lawyers, the CBD-IBP should be guided by the doctrines and principles laid down by this Court. [8] cralaw
Respecting petitioner's Manifestation with Motion for Reconsideration, she correctly points out that the recommendation of Investigating Commissioner Milagros San Juan in the case of Lokin was suspension from the practice of law for three years, not three months as mentioned in the Decision. Nonetheless, the Court sees no reason to modify the penalty of three-month suspension imposed in the dispositive portion of the Decision. Said penalty was not intended to conform to the recommendation of Commissioner San Juan, but was determined in light of the rulings of this Court in previous bar discipline cases involving representation of conflicting interests, in each of which a similar penalty was imposed. [9] cralaw
WHEREFORE, the MOTION FOR RECONSIDERATION of respondent Atty. Luis K. Lokin, Jr., the MOTION FOR RECONSIDERATION of the Integrated Bar of the Philippines, and the MANIFESTATION with MOTION FOR RECONSIDERATION of petitioner Erlinda K. Ilusorio-Bildner are DENIED.
Rule III, Section 2(c) of the Rules of Procedure of the Commission on Bar Discipline of the Integrated Bar of the Philippines is declared VOID insofar as it prohibits motions for reconsideration in bar discipline cases.
Very truly yours,
(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court
Endnotes:
[1] cralaw A.C. No. 5580, June 15, 2005, 460 SCRA 105, 110.
[2] cralaw A.C. No. 5128. March 31, 2005, 454 SCRA 167, 177-178.
[3] cralaw A.C. No. 1008, January 22, 1980, 95 SCRA 24, 31.
[4] cralaw Hilado v. David, 84 Phil. 569, 578-579 (1949).
[5] cralaw IBP rollo p. 98, Vol. I.
[6] cralaw IBP rollo pp. 111-113, Vol. I.
[7] cralaw R. LOPEZ, THE CORPORATION CODE OF THE PHILIPPINES ANNOTATED 434-435 (1994).
[8] cralaw Frias v. Bautista-Lozada, A.C. No. 6656, May 4, 2006.
[9] cralaw Vide Abaqueta v. Florido , 443 Phil. 688, (2003), imposing a three-month suspension; Buted v. Hernando, A.C. No. 1359, October 17, 1991, 203 SCRA 1, imposing a five-month suspension; and Pasay Law and Conscience Union, Inc. v. Paz, supra note 3 imposing a two-month suspension.
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