Case Digest de Guzman V. de DiosA.C. No. 4943. January 26, 2001

A.C. No. 4943. January 26, 2001
DIANA D. DE GUZMAN, complainant, vs. ATTY. LOURDES I. DE DIOS, respondent.
Case Digest
Facts
In 1995, complainant engaged the services of respondent as counsel in order to form a corporation,
which would engage in hotel and restaurant business in Olongapo City.
On January 10, 1996, with the assistance of Atty. De Dios, complainant registered Suzuki Beach Hotel,
Inc. (SBHI) with the Securities and Exchange Commission. Complainant paid on respondent a monthly
retainer fee of P5,000.00.
On December 15, 1997, the corporation required complainant to pay her unpaid subscribed shares of
stock amounting to two million two hundred and thirty-five thousand pesos (P2,235,000.00) or 22,350
shares, on or before December 30, 1997.
On January 29, 1998, complainant received notice of the public auction sale of her delinquent shares
and a copy of a board resolution dated January 6, 1998 authorizing such sale. Complainant soon learned
that her shares had been acquired by Ramon del Rosario, one of the incorporators of SBHI. The sale
ousted complainant from the corporation completely. While respondent rose to be president of the
corporation, complainant lost all her life’s savings invested therein.
Issues
Did Atty Lourdes I. De Dios violated Canon 15, Rule 15.03 of the code of Professional Responsibility, for
representing conflicting interests, and Article 1491 Civil Code, for acquiring property in litigation.
Legal Basis
Canon 15, Rule 15.03 of the code of Professional Responsibility, for representing conflicting interests.
Article 1491 Civil Code, for acquiring property in litigation.
Ruling
There are certain facts presented before the court that created doubt on the propriety of the
declaration of delinquent shares and subsequent sale of complainant’s entire subscription.
Complainant subscribed to 29,800 shares equivalent to two million nine hundred and eighty thousand
pesos (P2,980,000.00). She was the majority stockholder. Out of the subscribed shares, she paid up
seven hundred forty-five thousand pesos (P745,000.00) during the stage of incorporation.
How complainant got ousted from the corporation considering the amount she had invested in it is
beyond us. Granting that the sale of her delinquent shares was valid, what happened to her original
shares? This, at least, should have been explained.
Respondent claims that there was no attorney-client relationship between her and complainant has no
merit. It was complainant who retained respondent to form a corporation. She appeared as counsel in
behalf of complainant.
There was evidence of collusion between the board of directors and respondent. Indeed, the board of
directors now included respondent as the president, Ramon del Rosario as secretary, Hikoi Suzuki as
chairman, Agnes Rodriguez as treasurer and Takayuki Sato as director. The present situation shows a
clear case of conflict of interest of the respondent.
Lawyers must conduct themselves, especially in their dealings with their clients and the public at large,
with honesty and integrity in a manner beyond reproach. c
We said:
To say that lawyers must at all times uphold and respect the law is to state the obvious, but such
statement can never be overemphasized. Considering that, of all classes and professions, [lawyers are]
most sacredly bound to uphold the law, it is imperative that they live by the law. Accordingly, lawyers
who violate their oath and engage in deceitful conduct have no place in the legal profession.
Clearly, respondent violated the prohibition against representing conflicting interests and engaging in
unlawful, dishonest, immoral or deceitful conduct.
As a lawyer, respondent is bound by her oath to do no falsehood or consent to its commission and to
conduct herself as a lawyer according to the best of her knowledge and discretion. The lawyer’s oath is a
source of obligations and violation thereof is a ground for suspension, disbarment, or other disciplinary
action. The acts of respondent Atty. De Dios are clearly in violation of her solemn oath as a lawyer that
should not be tolerated.

Case Digest de Guzman V. de DiosA.C. No. 4943. January 26, 2001

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Case Digest de Guzman V. de DiosA.C. No. 4943. January 26, 2001

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Article 1491 Civil Code, for acquiring property in litigation.

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