Facts:

The case involves Adelita S. Villamor (complainant) and Atty. Ely Galland A. Jumao-as (respondent). The events leading to the complaint began when Villamor was persuaded by Felipe Retubado and Atty. Jumao-as to establish a lending company. Retubado was to manage the daily operations, while Atty. Jumao-as would handle the legal aspects. Villamor agreed to this arrangement, and Atty. Jumao-as proceeded to register the company, AEV Villamor Credit, Inc., with the Securities and Exchange Commission (SEC) and drafted essential legal documents, including the Articles of Incorporation (AOI).

In March 2007, Atty. Jumao-as requested Villamor to sign blank SEC pre-printed AOI forms. Later, he informed her about a loan from Debbie Yu, delivering P500,000.00 to Villamor as additional capital for the business. A promissory note was prepared, but Villamor did not receive a copy nor met Yu. In April 2008, Atty. Jumao-as instructed Villamor to issue a postdated check for P650,000.00 to Yu...

Facts:

Formation of the Lending Company

Adelita S. Villamor (Villamor) was persuaded by Felipe Retubado (Retubado) and Atty. Ely Galland A. Jumao-as (Atty. Jumao-as) to organize a lending company. Retubado offered to manage the day-to-day operations, while Atty. Jumao-as would handle the legal aspects. Villamor agreed, and Atty. Jumao-as facilitated the registration of the company, AEV Villamor Credit, Inc., with the Securities and Exchange Commission (SEC) and prepared legal documents, including the Articles of Incorporation (AOI).

Loan and Promissory Note

When the company needed additional funds, Atty. Jumao-as suggested that Villamor borrow from Debbie Yu (Yu). Atty. Jumao-as delivered P500,000.00 to Villamor, which was used as additional capital. A promissory note was prepared, signed by Villamor, Retubado, and Atty. Jumao-as as co-borrowers. However, Villamor was not given a copy of the promissory note and never met Yu.

Ownership Dispute

In March 2007, Atty. Jumao-as asked Villamor to sign blank SEC pre-printed AOI forms. Later, Villamor discovered that Atty. Jumao-as and Retubado each owned 30,000 shares (48% of the company) despite contributing minimal capital.

Postdated Check and Departure

In April 2008, Atty. Jumao-as instructed Villamor to issue a postdated check for P650,000.00 (P500,000.00 principal + P150,000.00 interest) in Yu's name as security for the loan, assuring her it would not be negotiated. In May 2008, Atty. Jumao-as and Retubado left Villamor's company to join Yu's 3E's Debt Equity Grant Co., a competing lending company. They also attempted to persuade Villamor's collectors to remit collections to 3E's Debt Equity Grant Co.

Demand Letter

On October 8, 2008, Atty. Jumao-as sent a demand letter to Villamor on behalf of Yu, demanding payment of P650,000.00. Villamor filed a complaint, alleging that Atty. Jumao-as represented conflicting interests and breached her trust.

Issue:

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Ruling:

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Ratio:

1. Conflict of Interest: Atty. Jumao-as represented both Villamor and Yu, whose interests were directly adverse. He assisted Villamor in forming AEV Villamor Credit, Inc., and later represented Yu in demanding payment from Villamor. This constituted a clear conflict of interest under Rule 15.03 of the CPR, which prohibits lawyers from representing conflicting interests without written consent from all parties after full disclosure.

2. Lawyer-Client Relationship: A lawyer-client relationship existed between Villamor and Atty. Jumao-as, as he provided legal services during the incorporation and operation of the lending company. He also had a lawyer-client relationship with Yu. Representing both parties without consent violated his duty of loyalty and fidelity.

3. Fiduciary Duty: Lawyers owe their clients undivided loyalty and must avoid situations where their personal interests conflict with their professional obligations. Atty. Jumao-as breached this duty by acting against Villamor's interests while representing Yu.

4. Penalty: The Court imposed a two-year suspension, consistent with jurisprudence, as Atty. Jumao-as's actions warranted a significant penalty to uphold the integrity of the legal profession.