G.R. No. 4089 - Pelayo vs. Lauron

In October 1973, Salandanan became a stockholder of Paces Industrial Corporation (Paces).
He subsequently assumed positions as Director, Treasurer, Administrative Officer, Vice-President for Finance, and counsel for Paces.
As Paces’ counsel, he appeared in multiple cases, including:

*Sisenando Malveda, et al. v. Paces Corporation* (NLRC R-04 Case No. 11-3114-73).
*Land & Housing Development Corporation v. Paces Corporation* (Civil Case No. 18791).

In the latter case, Salandanan filed a Motion for a Bill of Particulars which the court denied, but he failed to file an Answer, resulting in an order of default against Paces.
He neither withdrew his appearance nor advised Paces to engage another counsel, leading to a final and executory adverse decision.

On December 4, 1973, E.E. Black Ltd., via counsel, notified Paces of an outstanding obligation amounting to ₱96,513.91.
Salandanan represented Paces in negotiations regarding this debt and was entrusted with related documents.

Internal conflicts within Paces’ management forced Salandanan and his group to sell their shares to Nicolas C. Balderama’s group on May 27, 1974.
After the sell-out, Salandanan began representing E.E. Black Ltd. in filing a complaint with an application for preliminary attachment to collect the obligation from Paces.
He successfully obtained various writs of attachment and garnishment against Paces’ business partners.

Paces filed a complaint against Salandanan for malpractice and/or gross misconduct due to representing conflicting interests and using confidential information against Paces.
Salandanan denied an attorney-client relationship with Paces, claiming his role as lawyer was coincidental to his position as stockholder and officer and that knowledge obtained was from his investment role, not legal representation.
The Integrated Bar of the Philippines (IBP) Commission on Bar Discipline recommended a one-year suspension on November 2, 2011.
The IBP Board of Governors adopted and modified this to a three-year suspension on September 28, 2013 (Resolution No. XX-2013-120).
A motion for reconsideration was denied on August 8, 2014 (Resolution No. XXI-2014-413).

Did Atty. Edgardo M. Salandanan represent conflicting interests when he acted as counsel for E.E. Black Ltd. after previously representing Paces?
Was there an attorney-client relationship between Salandanan and Paces that required the observance of the duty of loyalty and confidentiality?
Did Salandanan commit malpractice and/or gross misconduct by using confidential information acquired from Paces against it?
What are the appropriate disciplinary measures for Salandanan’s conduct under the Code of Professional Responsibility?