In the recent case of REBECCA J. PALM vs. Atty. FELIPE ILEDAN JR., A.C. No. 8242, October 2, 2009, the Philippine Supreme Court dismissed the complaint for the disbarment of respondent lawyer.
May I digest below the doctrinal pronouncements of the Court on the exceptions to the rule of confidentiality of lawyer-client relationship and the rule against conflict of interest with former clients. Thus:
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The case before the Court is a disbarment proceeding filed by Rebecca J. Palm (complainant) against Atty. Felipe Iledan, Jr. (respondent) for revealing information obtained in the course of an attorney-client relationship and for representing an interest which conflicted with that of his former client, Comtech Worldwide Solutions Philippines, Inc. (Comtech).
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Violation of the Confidentiality
of Lawyer-Client Relationship
Canon 21 of the Code of Professional Responsibility provides:
Canon 21. A lawyer shall preserve the confidence and secrets of his client even after the attorney-client relationship is terminated. (Emphasis supplied)
We agree with the IBP that in the course of complainant’s consultations, respondent obtained the information about the need to amend the corporate by-laws to allow board members outside the Philippines to participate in board meetings through teleconferencing. Respondent himself admitted this in his Answer.
However, what transpired on 10 January 2004 was not a board meeting but a stockholders’ meeting. Respondent attended the meeting as proxy for Harrison. The physical presence of a stockholder is not necessary in a stockholders’ meeting because a member may vote by proxy unless otherwise provided in the articles of incorporation or by-laws. Hence, there was no need for Steven and Deanna Palm to participate through teleconferencing as they could just have sent their proxies to the meeting.
In addition, although the information about the necessity to amend the corporate by-laws may have been given to respondent, it could not be considered a confidential information. The amendment, repeal or adoption of new by-laws may be effected by “the board of directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of members of a non-stock corporation.” It means the stockholders are aware of the proposed amendments to the by-laws. While the power may be delegated to the board of directors or trustees, there is nothing in the records to show that a delegation was made in the present case. Further, whenever any amendment or adoption of new by-laws is made, copies of the amendments or the new by-laws are filed with the Securities and Exchange Commission (SEC) and attached to the original articles of incorporation and by-laws. The documents are public records and could not be considered confidential.
It is settled that the mere relation of attorney and client does not raise a presumption of confidentiality. The client must intend the communication to be confidential. Since the proposed amendments must be approved by at least a majority of the stockholders, and copies of the amended by-laws must be filed with the SEC, the information could not have been intended to be confidential. Thus, the disclosure made by respondent during the stockholders’ meeting could not be considered a violation of his client’s secrets and confidence within the contemplation of Canon 21 of the Code of Professional Responsibility.
Representing Interest in Conflict
With the Interest of a Former Client
The IBP found respondent guilty of representing an interest in conflict with that of a former client, in violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility which provides:
Rule 15.03 - A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts.
We do not agree with the IBP.
In Quiambao v. Bamba, the Court enumerated various tests to determine conflict of interests. One test of inconsistency of interests is whether the lawyer will be asked to use against his former client any confidential information acquired through their connection or previous employment. The Court has ruled that 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.
We find no conflict of interest when respondent represented Soledad in a case filed by Comtech. The case where respondent represents Soledad is an Estafa case filed by Comtech against its former officer. There was nothing in the records that would show that respondent used against Comtech any confidential information acquired while he was still Comtech’s retained counsel. Further, respondent made the representation after the termination of his retainer agreement with Comtech. A lawyer’s immutable duty to a former client does not cover transactions that occurred beyond the lawyer’s employment with the client. The intent of the law is to impose upon the lawyer the duty to protect the client’s interests only on matters that he previously handled for the former client and not for matters that arose after the lawyer-client relationship has terminated.
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