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Nakpil V Valdez

This case involved a dispute over ownership of a summer property in Baguio City. Jose Nakpil had asked the respondent, Atty. Valdez, to purchase the property for him since he lacked funds. They agreed Valdez would hold the property in trust until Nakpil could buy it back. However, when Nakpil died, Valdez excluded the property from his estate and transferred the title to his own company. The court found Valdez had a conflict of interest as the legal counsel for Nakpil's widow while also representing creditors of the estate. His actions violated his fiduciary duty to observe loyalty and fairness to his clients.

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Pau Turiano
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117 views1 page

Nakpil V Valdez

This case involved a dispute over ownership of a summer property in Baguio City. Jose Nakpil had asked the respondent, Atty. Valdez, to purchase the property for him since he lacked funds. They agreed Valdez would hold the property in trust until Nakpil could buy it back. However, when Nakpil died, Valdez excluded the property from his estate and transferred the title to his own company. The court found Valdez had a conflict of interest as the legal counsel for Nakpil's widow while also representing creditors of the estate. His actions violated his fiduciary duty to observe loyalty and fairness to his clients.

Uploaded by

Pau Turiano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Nakpil v.

Valdez 
1998

FACTS:
Jose Nakpil, husband of the complainant, became interested in purchasing a summer residence in
Moran Street, Baguio City. For lack of funds, he requested the respondent to purchase the Moran property
for him. They agreed that the respondent would keep the property in trust for the Nakpils until the latter
could buy it back. Pursuant to their agreement, respondent obtained two (2) loans from a bank which he
used to purchase and renovate the property. Title was then issued in respondent’s name.

The ownership of the Moran property became an issue in the intestate proceedings when Jose
Nakpil died. Respondent acted as the legal counsel and accountant of his widow. Respondent excluded
the Moran property from the inventory of Jose’s estate and transferred his title to the Moran property to
his company, the Caval Realty Corporation.

ISSUE:
Whether or not there was conflict of interest between the respondent Atty. Valdes and the
complainant.

HELD:
Yes. There is no question that the interests of the estate and that of its creditors are adverse to
each other. Respondent’s accounting firm prepared the list of assets and liabilities of the estate and, at the
same time, computed the claims of two creditors of the estate. There is clearly a conflict between the
interest of the estate which stands as the debtor, and that of the two claimants who are creditors of the
estate.

Respondent undoubtedly placed his law firm in a position where his loyalty to his client could be
doubted. In the estate proceedings, the duty of respondent’s law firm was to contest the claims of these
two creditors but which claims were prepared by respondent’s accounting firm. Even if the claims were
valid and did not prejudice the estate, the set-up is still undesirable. The test to determine whether there is
a conflict of interest in the representation is probability, not certainty of conflict. It was respondent’s duty
to inhibit either of his firms from said proceedings to avoid the probability of conflict of interest.

Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct
of a member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that would
promote public confidence in the integrity of the legal profession. Members of the bar are expected to
always live up to the standards embodied in the Code of Professional Responsibility as the relationship
between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good
faith. In the case at bar, the respondent exhibited less than full fidelity to his duty to observe candor,
fairness and loyalty in his dealings and transactions with his clients.

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