GENEROSA BUTED AND BENITO BOLISAY, PETITIONERS, VS. ATTY. HAROLD M. HERNANDO, RESPONDENT.

On 22 August 1974, spouses Generosa Buted and Benito Bolisay
filed an administrative complaint for malpractice against respondent Atty.
Harold M. Hernando, charging the
latter with having wantonly abused professional secrets or information obtained
by him as their counsel.

After respondent Hernando filed his Answer on 25 June 1974, the
Court, in a resolution dated 4
October 1974 referred the complaint to the Solicitor-General for investigation,
report and recommendation.

On 10 February 1975, complainants presented a Joint Affidavit of
Desistance.^[1]

On 24 October 1975, the Solicitor-General conducted a hearing
where respondent took the witness stand on his own behalf.

The record of the case shows the following background facts:

In an action for partition instituted by Generosa as compulsory
heir of the deceased Teofilo Buted, respondent was counsel for Luciana Abadilla
and a certain Angela Buted. Involved in said partition case was a parcel
of land identified as Lot 9439-B. Respondent ultimately succeeded in defending Luciana Abadilla’s claim of
exclusive ownership over Lot 9439-B. When Luciana died, respondent withdrew his appearance from that
partition case.

It appears that Luciana Abadilla sold the lot to Benito Bolisay
and a new Transfer Certificate of Title over the lot was issued in the name of
complainant spouses.

When an action for specific performance was lodged by a couple
named Luis Sy and Elena Sy against Benito Bolisay as one of the defendants,^[2]
the latter retained the services of respondent. Atty. Hernando however claims that he rendered his services to
Benito Bolisay free of charge. Subject
of this case was a contract of lease executed by Benito’s co-defendant therein,
Enrique Buted, over a house standing on a portion of Lot No. 9439-B. It appears that the Sy’s were claiming that
the lease extended to the aforementioned lot. Benito was then asserting ownership over the realty by virtue of a Deed
of Sale executed by Luciana Abadilla in his favor. Eventually, the Sy’s were ordered to vacate the house subject of
the lease. Respondent avers that the
relationship between himself and Benito Bolisay as regards this case was
terminated on 4 December 1969.^[3]

On 23 February 1974, respondent Hernando, without the consent of
the heirs of Luciana Abadilla and complainant spouses, filed a petition on
behalf of the heirs of Carlos, Dionisia
and Francisco all surnamed Abadilla, seeking the cancellation of the
Transfer Certificate of Title (TCT) of complainant spouses over the lot. Carlos, Dionisia and Francisco were
Luciana’s registered co-owners in the original certificate of title covering
Lot No. 9439-B.^[4]
At the hearing, respondent Hernando testified that if the petition for
cancellation of TCT was granted, Lot 9439-B would no longer be owned by
complainant spouses but would be owned in common by all the heirs of Luciana
Abadilla.^[5]

Complainant spouses, upon learning of respondent’s appearance
against them in the cadastral proceeding, manifested their disapproval thereof
in a letter dated 30 July 1974.^[6]
Respondent however, pursued the case until it was eventually dismissed by the
trial court on 2 September 1974 on the ground of prescription.^[7]

At the hearing before the Office of the Solicitor General and in his
Answer, respondent Hernando admitted his involvement in the cadastral case as
counsel for the Abadillas but denied having seen or taken hold of the
controversial Transfer Certificate of Title, and having availed himself of any
confidential information relating to Lot 9439-B.

In its Report and Recommendation dated 29 March 1990, the
Solicitor General recommends that respondent be suspended from the practice of
law for three (3) months for violation of the Canons of Professional Ethics by
representing clients with conflicting interests, and filed before this Court
the corresponding Complaint^[8] dated
30 March 1990.

The issue raised in this proceeding is: whether or not respondent Hernando had a conflict of interests
under the circumstances described above.

The Canons of Professional Ethics, the then prevailing parameters
of behavior of members of the bar, defines a conflict of interests situation in
the following manner:

“6. Adverse influence and conflicting
interests. –

x x x                                                                              x
x x                                                                                  x
x x

It is unprofessional to represent conflicting interests, except by
express consent of all concerned given after a full disclosure of the
facts. Within the meaning of this
canon, a lawyer represents 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.

The obligation to represent the client with undivided fidelity and
not to divulge his secrets or confidence forbids also the subsequent acceptance
of retainers or employment from others in matters adversely affecting any
interest of the client with respect to which confidence has been reposed.”
(Underscoring supplied)

Though as regards the first and second cases handled by
respondent, no conflict of interest existed, the same cannot be said with
respect to the action for specific performance and the cadastral
proceeding. By respondent’s own
admission, he defended the right of ownership over Lot 9439-B of complainant
Benito Bolisay in the action for specific performance. He assailed this same right of ownership when he subsequently filed
a petition for cancellation of complainants’ Transfer Certificate of Title over
that same lot. Respondent Hernando was
in a conflict of interest situation.

It is clear from the above-quoted portion of the Canons of Professional Ethics that in cases
where a conflict of interests may exist, full disclosure of the facts and
express consent of all the parties concerned are necessary.^[9] The present Code of Professional
Responsibility is stricter on this matter considering that consent of the
parties is now required to be in written form.^[10] In
the case at bar, such consent was wanting.

Respondent persistently argues that contrary to the claims of
complainant spouses, he had never seen nor taken hold of the Transfer
Certificate of Title covering Lot. No. 9439-B nor obtained any confidential
information in handling the action for specific performance.^[11]
The contention of respondent is, in effect, that because complainant has not
clearly shown that respondent had obtained any confidential information from
Benito Bolisay while representing the latter in the action for specific
performance, respondent cannot be penalized for representing conflicting
interests. That is not the rule in this
jurisdiction. The rule here is, rather, that the mere fact that
respondent had acted as counsel for Benito Bolisay in the action for specific
performance should have precluded respondent from acting or appearing as
counsel for the other side in the subsequent petition for cancellation of the
Transfer Certificate of Title of the spouses Generosa and Benito Bolisay. There is no necessity for proving the actual
transmission of confidential information to an attorney in the course of his
employment by his first client in order that he may be precluded from accepting
employment by the second or subsequent client where there are conflicting interests between the first and the
subsequent clients. The reason for this
rule was set out by the Court in Hilado v. David^[12]
in the following terms:

Communications between attorney and client are, in a great number
of litigations, a compli­cated affair, consisting of entangled relevant and
irrelevant, secret and well known facts. In the complexity of what is said in the course of the dealings between
an attorney and a client, inquiry of the nature suggested would lead to the
revelation, in advance of the
trial, of other matters that might only further prejudice the complainant’s
cause. And the theory would be
productive of other unsalutary results. To make the passing of confidential communication a condition
precedent; i.e., to make the employment conditioned on the scope and character
of the knowledge acquired by an attorney in determining his right to change
sides, would not enhance the freedom of litigants, which is to be sedulously
fostered, to consult with lawyers upon what they believe are their rights in
litigation. The condition would of
necessity call for an investigation of what information the attorney has
received and in what way it is or it is not in conflict with his new
position. Litigants would be in
consequence be wary in going to an attorney, lest by an unfortunate turn of the
proceeding, if an investigation be held, the court should accept the attorney’s
inaccurate version of the facts that came to him.

Hence the necessity of setting down the existence of the bare
relationship of attorney and client as the yardstick for testing incompatibi­lity
of interests. This stern rule 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. (Strong vs. Int. Bldg., etc.; Ass’n, 183
Ill., 97; 47 L.R.A., 792) It is founded on principles of public policy, on good
taste. As has been said 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 standard. With these thoughts in mind, it behooves
attorneys, like Caesar’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.”^[13]
(Underscoring supplied)

This Court went further in San Jose v.
Cruz,^[14]
where the lawyer was charged with malpractice for having represented a new client whose interest was
opposed to those of his former clients in another case:

“The record shows that the respondent offered his services to
the Matienzo spouses knowing that the petitioner had obtained a favorable
judgment in the civil case No. 5480 and that his efforts in the subsequent
civil case No. 5952 would frustrate said judgment and render it ineffectual, as
has really been the result upon his obtaining the writ of injunction
above-mentioned. Obviously his conduct
is unbecoming to an attorney and cannot be sanctioned by the courts. An attorney owes loyalty to his client
not only in the case in which he has represented him but also after the
relation of attorney and client has terminated and it is not a good practice to
permit him afterwards to defend in another case other persons against his
former client under the pretext that the case is distinct from, and independent
of the former case.”^[15]
(Underscoring supplied)

The appropriate rule has been expressed
by Justice Malcolm in the following manner:

“An attorney is not permitted, in serving a new client as
against a former one, to do anything which will injuriously affect the former
client in any manner in which the attorney formerly represented him, though the
relation of attorney and client has
terminated, and the new
employment is in a different case; nor can the attorney use against his former client any knowledge or
information gained through their former connection.”^[16]
(Underscoring supplied)

The absence of monetary consideration does not exempt the lawyer
from complying with the prohibition against pursuing cases where a conflict of
interest exists. The prohibition
attaches from the moment the attorney-client relationship is established and
extends beyond the duration of the professional relationship.

The Court therefore agrees with the Solicitor-General that
respondent Hernando is guilty of violation of the Canons of Professional Ethics
by representing clients with conflicting interests. We believe, however, that a heavier penalty is appropriate.

ACCORDINGLY, the Court Resolved to SUSPEND Atty. Harold M.
Hernando from the practice of law for a period of five (5) months, with a WARNING that repetition of the same
or similar offense will warrant a more severe penalty. A copy of this Resolution shall be furnished
to all courts and to the Office of the Bar Confidant and spread on the personal
record of respondent.

Fernan, C.J., (Chairman), Gutierrez, Jr., Feliciano, Bidin, and Davide, Jr., JJ., concur.

^[1]
Rollo, p. 17.

^[2]
TSN, 24 October 1975, p. 19.

^[3]
Rollo, p. 12.

^[4]
TSN, 24 October 1975, p. 42.

^[5]
Id., p. 9; Rollo, p. 18.

^[6]
Rollo, p. 6.

^[7]
Id., pp. 3-12.

^[8]
Id., p. 20.

^[9]
In Re Dela Rosa, 27 Phil 258 (1914).

^[10]
Code of Professional Responsibility, Canon 15, Rule 15.03 which provides: A lawyer shall not represent conflicting
interest except by written consent of all concerned given after a full disclosure
of the facts. See also Canon 37, Canons
of Professional Ethics.

^[11]
TSN, 24 October 1975, p. 69 and 71; Answer, p. 2.

^[12]
84 Phil. 570 (1932).

^[13]
84 Phil. at 578-579; See also, Nombrado vs. Hernandez, 135 Phil 5
(1968); In re Hamilton, 24 Phil 100 (1913).

^[14]
57 Phil. 792 (1933); See also Sumangil v. Sta. Romana, 84 Phil. 777
(1949); and Natan v. Capule, 91 Phil. 640 (1952).

^[15]
57 Phil. at 794-795.

^[16]
Legal and Judicial Ethics, 143 (1949).