HORNILLA v. SALUNAT July 1, 2003 Ynares-Santiago, J RULE 15.

03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. Benedicto Hornilla and Federico Ricafort filed an administrative complaint with the IBP on BAR Discipline against Ernest Hornilla for illegal and unethical practice and conflict of interest. FACTS: y Atty. Ernesto Salunat o Partner of ASSA Law and Associates - Counsel of the Philippine Public School Teachers Association (PPSTA) o Retained Counsel of PPSTA Board members (His brother Aurelio Salunat being part of the board) y Complainants filed an intra-corporate case against its members of the Board before the SEC and Ombudsman for unlawful spending and the undervalued sale of real property of the PPSTA. Here, Atty. Salunat entered his appearance as counsel for the PPSTA Board members. o Complainants contend conflict of interest and that he violate Rule 15.06 as he assured the board members that he will win the case. y Atty. Salunat responded by saying: o He appeared as counsel for the PPSTA Board members in behalf of the ASSA Law and Associates, and only filed a manifestation of extreme urgency where another lawyer handled the case. o Complainant instigated, orchestrated and indiscriminately filed the case against the PPSTA board members. o He denied ensuring the victory of the board members as he only assured that the truth will come out. o Atty. Ricafort guilty of gross violation of oath of office for filling trumped-up charges against him. y Test of inconsistent interests: o whether or not in behalf of one client, it is the lawyer s duty to fight for an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client o whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof. Derivative suit = corporation vs. stockholders

y ISSUE: Can a lawyer engaged by a corporation defend members of the board of the same corporation in a derivative suit?

HELD: Guilty of representing conflicting interests. admonished to observe a higher degree of fidelity in the practice of his profession. y Conflict of interest because of dual representation in all derivative actions. y The interest of the corporate client is paramount and should not be influence by any interest of the individual corporate officials = conflict of interest WARNED that a repetition of similar acts will be dealt with more severly.