PACANA V. PASCUAL-LOPEZ

FACTSPacana was the Operations Director for Multitel Communications Corporation (MCC). Multitel was besieged by demand letters from its members and investors because of the failure of its investment schemes. Pacana earned the ire of Multitel investors after becoming the assignee of majority of the shares of stock of Precedent and after being appointed as trustee of a fund amounting to Thirty Million Pesos (P30,000,000.00) deposited at Real Bank. Multitel later changed its name to Precedent.Pacana sought the advice of Lopez who also happened to be a member of the Couples for Christ, a religious organization where Pacana and his wife were also active members. From then on, they constantly communicated, with the former disclosing all his involvement and interests in Precedent and Precedents relation with Multitel. Lopez gave legal advice to Pacana and even helped him prepare standard quitclaims for creditors. In sum, Pacana avers that a lawyer-client relationship was established between him and Lopez although no formal document was executed by them at that time. There was an attempt to have a formal retainer agreement signed but it didnt push through. After a few weeks, Pacana was surprised to receive a demand letter from Lopez asking for the return and immediate settlement of the funds invested by Lopezs clients in Multitel. Lopez explained that she had to send it so that her clients defrauded investors of Multitel would know that she was doing something for them and assured Pacana that there was nothing to worry about.Both parties continued to communicate and exchange information regarding the persistent demands made by Multitel investors against Pacana. Pacana gave Lopez several amounts, first 900,000; then 1,000,000 to be used in his case. Even when Pacana went to the states, they continued communicating and he continued sending her money for the case. Wary that Lopez may not be able to handle his legal problems, Pacana was advised by his family to hire another lawyer. When Lopez knew about this, she wrote to complainant via e-mail, as follows:

Dear Butchie,Hi! Ok ka lang? Hope you are fine. Sorry if I shocked you but I had to do it as your friend and lawyer.------------ I have been informed by Efie that your family is looking at hiring Coco Pimentel. I know him very well as his sister Gwen is my best friend. I have no problem if you hire him but I will be hands off. I work differently kasi. -------- Efren Santos will sign as your lawyer although I will do all the work. -----------Please do not worry. Give me 3 months to make it all disappear. But if you hire Coco, I will give him the free hand to work with your case. -------- I will stand by you always. This is my expertise. TRUST me! ----Candy

When he got back to the country, Lopez told Pacana she had earned P12,500,000.00 as attorneys fees and was willing to give P2,000,000.00 to him in appreciation for his help. This never happened though. Lopez also ignored Pacanas repeated requests for accounting. She continued to evade him.Finally, Pacana filed a case with the IBP for Lopezs disbarment. The IBP disbarred her.

ISSUEWhether or not Lopez had violated Rule 15.03 on representing conflicting interests.

HELDYes! Attorney Maricel Pascual-Lopez was DISBARRED for representing conflicting interests and for engaging in unlawful, dishonest and deceitful conduct in violation of her Lawyers Oath and the Code of Professional Responsibility. Ratio: Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after full disclosure of the facts. Lopez must have known that her act of constantly and actively communicating with Pacana, who, at that time, was beleaguered with demands from investors of Multitel, eventually led to the establishment of a lawyer-client relationship. Lopez cannot shield herself from the inevitable consequences of her actions by simply saying that the assistance she rendered to complainant was only in the form of "friendly accommodations," precisely because at the time she was giving assistance to complainant, she was already privy to the cause of the opposing parties who had been referred to her by the SEC.Given the situation, the most decent and ethical thing which Lopez should have done was either to advise Pacana to engage the services of another lawyer since she was already representing the opposing parties, or to desist from acting as representative of Multitel investors and stand as counsel for complainant. She cannot be permitted to do both because that would amount to double-dealing and violate our ethical rules on conflict of interest.Indubitably, Lopez took advantage of Pacanas hapless situation, initially, by giving him legal advice and, later on, by soliciting money and properties from him. Thereafter, Lopez impressed upon Pacana that she had acted with utmost sincerity in helping him divest all the properties entrusted to him in order to absolve him from any liability. But simultaneously, she was also doing the same thing to impress upon her clients, the party claimants against Multitel, that she was doing everything to reclaim the money they invested with Multitel.

Algura vs City of Naga In 1999, the City of Naga demolished a portion of the house owned by spouses Antonio and Lorencita Algura for allegedly being a nuisance as the said portion of the house was allegedly blocking the road right of way.In September, the spouses then sued Naga for damages arising from the said demolition (loss of income from boarders), which to the spouses is an illegal demolition. Simultaneous to their complaint was an ex-parte motion for them to litigate as indigent litigants. The motion was granted and the spouses were exempted from paying the required filing fees.In February 2000, during pre-trial, the City of Naga asked for 5 days within which to file a Motion to Disqualify Petitioners as Indigent Litigants. Under the Rules of Court (then Sec. 16, Rule 141), a party may be qualified as a pauper litigant (for those residing outside Metro Manila) if he submits an affidavit attesting that a.) his gross monthly income does not exceed P1,500.00 (now not more than double the monthly minimum wage) and b.) he should not own property with an assessed value of not more than P18,000.00 (now not more than P300k market value). The City asserted that the combined income of the Alguras is at least P13,400 which is way beyond the threshold P1.5k. The City presented as proof Antonios pay slip as a policeman (P10,400) and Lorencitas estimated income from her sari-sari store. The claim of the spouses that they were property-less, as proven by the City Assessors Certification, was not disputed by the City.The spouses argued that since the boarding house was demolished by the city, they only relied on the income of Antonio which was barely enough to cover their familys need like food, shelter, and other basic necessities for them and their family (they have 6 children).The judge, however, granted the motion of the City and so the spouses were disqualified as pauper-litigants. Subsequently, the case filed by the spouses against the City was dismissed for the spouses failure to pay the required filing fees.ISSUE: Whether or not the spouses should be disqualified as pauper-litigants.HELD: No, there was no hearing on the matter hence the case was remanded back to the lower court. In this case, the Supreme Court reconciled the provisions of Sec. 21, Rule 3 and Sec. 19, Rule 141 (then Sec. 16, Rule 141).Sec. 21, Rule 3, merely provides a general statement that indigent litigants may not be required to pay the filing fees. On the other hand, Sec. 19, Rule 141 provides the specific standards that a party must meet before he can be qualified as an indigent party and thus be exempt from paying the required fees.If Sec. 19, Rule 141 (in this case, then Sec. 16, Rule 141) is strictly applied, then the spouses could not qualify because their income exceeds P1.5k, which was the threshold prior to 2000. But if Sec. 21, Rule 3 is to be applied, the applicant (the Spouses) should be given a chance in a hearing to satisfy the court that notwithstanding the evidence presented by the opposing party (Naga), they have no money or property sufficient and available for food, shelter and other basic necessities for their family, and are thus, qualified as indigent litigants under said Rule. Therefore, the court should have conducted a trial in order to let the spouses satisfy the court that indeed the income theyre having, even though above the P1.5k limit, was not sufficient to cover food, shelter, and their other basic needs.