EN BANC

[G.R. No. 105938. September 20, 1996.]

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V.

CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR
P. LAZATIN, and EDUARDO U. ESCUETA, petitioners, vs. THE
HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF
THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents.

[G.R. No. 108113. September 20, 1996.]

PARAJA G. HAYUDINI, petitioner, vs.

THE SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.

Manuel G. Abello for petitioners.

Roco Bunag Kapunan & Migallos for Raul S. Roco.
Mario E. Ongkiko for Presidential Commission on Good Government.

SYLLABUS

1. LEGAL ETHICS; LAWYER-CLIENT RELATIONSHIP; BOUNDED BY

RULES, ETHICAL CONDUCT AND DUTIES; RATIONALE. — In the creation of
lawyer-client relationship, there are rules, ethical conduct and duties that breathe
life into it, among those, the fiduciary duty to his client which is of a very delicate,
exacting and confidential character, requiring a very high degree of fidelity and
good faith, that is required by reason of necessity and public interest based on the
hypothesis that abstinence from seeking legal advice in a good cause is an evil
which is fatal to the administration of justice. It is also the strict sense of fidelity of
a lawyer to his client that distinguishes him from any other professional in society.
This conception is entrenched and embodies centuries of established and stable
tradition. Considerations favoring confidentiality in lawyer-client relationships are
many and serve several constitutional and policy concerns. In the constitutional
sphere, the privilege gives flesh to one of the most sacrosanct rights available to
the accused, the right to counsel. If a client were made to choose between legal
representation without effective communication and disclosure and legal
representation with all his secrets revealed then he might be compelled, in some
instances, to either opt to stay away from the judicial system or to lose the right to
counsel. If the price of disclosure is too high, or if it amounts to self incrimination,
then the flow of information would be curtailed thereby rendering the right
practically nugatory. The threat this represents against another sacrosanct
individual right, the right to be presumed innocent is at once self-evident.
Encouraging full disclosure to a lawyer by one seeking legal services opens the
door to a whole spectrum of legal options which would otherwise be circumscribed
by limited information engendered by a fear of disclosure. An effective lawyer-client
relationship is largely between lawyer and client which in turn requires a situation
which encourages a dynamic and fruitful exchange and flow of information. It
necessarily follows that in order to attain effective representation, the lawyer must
invoke the privilege not as a matter of option but as a matter of duty and
professional responsibility.
2. ID.; ID.; AS A GENERAL RULE A LAWYER MAY NOT REFUSE TO
DIVULGE THE IDENTITY OF HIS CLIENT; RATIONALE. — As a matter of public
policy, a client's identity should not be shrouded in mystery. Under this premise,
the general rule in our jurisdiction as well as in the United States is that a lawyer
may not invoke the privilege and refuse to divulge the name or identity of his client.
The reasons advanced for the general rule are well established. First, the court
has a right to know that the client whose privileged information is sought to be
protected is flesh and blood. Second, the privilege begins to exist only after the
attorney-client relationship has been established. The attorney-client privilege
does not attach until there is a client. Third, the privilege generally pertains to the
subject matter of the relationship. Finally, due process considerations require that
the opposing party should, as a general rule, know his adversary. "A party suing
or sued is entitled to know who his opponent is. He cannot be obliged to grope in
the dark against unknown forces.
3. ID.; ID.; ID.; EXCEPTION; WHEN THE CLIENT'S IDENTITY IS
PRIVILEGED. — The general rule is, however, qualified by some important
exception. 1) Client identity is privileged where a strong probability exists that
revealing the client's name would implicate that client in the very activity for which
he sought the lawyer's advice. 2) Where disclosure would open the client to civil
liability, his identity is privileged. 3) Where the government's lawyers have no case
against an attorney's client unless, by revealing the client's name, the said name
would furnish the only link that would form the chain of testimony necessary to
convict an individual of a crime, the client's name is privileged. Apart from these
principal exceptions, there exist other situations which could qualify as exceptions
to the general rule. For example, the content of any client communication to a
lawyer lies within the privilege if it is relevant to the subject matter of the legal
problem on which the client seeks legal assistance. Moreover, where the nature of
the attorney-client relationship has been previously disclosed and it is the identity
which is intended to be confidential, the identity of the client has been held to be
privileged, since such revelation would otherwise result in disclosure and the entire
transaction. Summarizing these exceptions, information relating to the identity of a
client may fall within the ambit of the privilege when the client's name itself has an
independent significance, such that disclosure would then reveal client
confidences.
4. CONSTITUTIONAL LAW; BILL OF RIGHTS; EQUAL PROTECTION
CLAUSE CONSTRUED. — The equal protection clause is a guarantee which
provides a wall of protection against uneven application of statutes and
regulations. In the broader sense, the guarantee operates against
uneven application of legal norms so that all persons under similar circumstances
would be accorded the same treatment. (Gumabon v. Director of Prisons, 37
SCRA 420 [1971]). Those who fall within a particular class ought to be treated alike
not only as to privileges granted but also as to the liabilities imposed. . . . What is
required under this Constitutional guarantee is the uniform operation of legal norms
so that all persons under similar circumstances would be accorded the same
treatment both in the privileges conferred and the liabilities imposed. As was noted
in a recent decision: 'Favoritism and undue preference cannot be allowed. For the
principle is that equal protection and security shall be given to every person under
circumstances, which if not identical are analogous. If law be looked upon in terms
of burden or charges, those that fall within a class should be treated in the same
fashion, whatever restrictions cast on some in the group equally binding the rest.
VITUG, J., separate opinion:
LEGAL ETHICS; LAWYER-CLIENT RELATIONSHIP; COVERED BY THE
PROTECTION OF CONFIDENTIALITY. — The legal profession, despite all the
unrestrained calumny hurled against it, is still the noblest of professions. It exists
upon the thesis that, in an orderly society that is opposed to all forms of anarchy,
it so occupies, as it should, an exalted position in the proper dispensation of justice.
In time, principles have evolved that would help ensure its effective ministation.
The protection of confidentiality of the lawyer-client relationship is one, and it has
since been an accepted firmament in the profession. It allows the lawyer and the
client to institutionalize a unique relationship based on full trust and confidence
essential in a justice system that works on the basis of substantive and procedural
due process. To be sure, the rule is not without its pitfalls, and demands against it
may be strong, but these problems are, in the ultimate analysis, no more than mere
tests of vigor that have made and will make that rule endure.
DAVIDE, JR. J., dissenting opinion:
1. LEGAL ETHICS; LAWYER-CLIENT RELATIONSHIP; NATURE OF THE
RULE OF CONFIDENTIALITY. — The rule of confidentiality under the lawyer-
client relationship is not a cause to exclude a party. It is merely a ground for
disqualification of a witness (Sec. 24, Rule 130, Rules of Court) and may only be
invoked at the appropriate time, i.e., when a lawyer is under compulsion to answer
as witness, as when, having taken the witness stand, he is questioned as to such
confidential communication or advice, or is being otherwise judicially coerced to
produce, through subpoenae duces tecum or otherwise, letters or other
documents containing the same privileged matter.
2. ID.; LAWYER-CLIENT PRIVILEGE; CONTRARY TO THE MAJORITY
RULE, AMERICAN JURISPRUDENCE SHOULD NOT BE APPLIED TO EXPAND
THE SCOPE OF THE PHILIPPINE RULE. — Hypothetically admitting the
allegations in the complaint in Civil Case No. 0033, I find myself unable to agree
with the majority opinion that the petitioners are immune from suit or that they have
to be excluded as defendants, or that they cannot be compelled to reveal or
disclose the identity of their principals, all because of the sacred lawyer-client
privilege. This privilege is well put in Rule 130 of the Rules of Court. The majority
seeks to expand the scope of the Philippine rule on the lawyer-client privilege by
copious citations of American jurisprudence which includes in the privilege the
identity of the client under the exceptional situations narrated therein. From the
plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of
privilege contested therein arose in grand jury proceedings on different States,
which are primarily proceedings before the filing of the case in court, and we are
not even told what evidentiary rules apply in the said hearings. In the present case,
the privilege is invoked in the court where it was already filed. Secondly, and more
important, in the cases cited by the majority, the lawyers concerned were merely
advocating the cause of their clients but were not indicted for the charges against
their said clients. Here, the counsel themselves are co-defendants duly charged in
court as co-conspirators in the offenses charged. The cases cited by the majority
evidently do not apply to them.
3. ID.; ID.; MAY NOT BE INVOKED AS A SHIELD FOR THE COMMISSION
OF CRIME. — I wish to repeat and underscore the fact that the lawyer-client
privilege is not a shield for the commission of a crime or against the prosecution of
the lawyer therefor. We do not even have to go beyond our shores for an authority
that the lawyer-client privilege cannot be invoked to prevent the disclosure of a
client's identity where the lawyer and the client are conspirators in the commission
of a crime or a fraud. Under our jurisdiction, lawyers are mandated not to counsel
or abet activities aimed at defiance of the law or at lessening confidence in the
legal system (Rule 1.02, Canon 1, Code of Professional Responsibility) and to
employ only fair and honest means to attain the lawful objectives of his client (Rule
19.01, Canon 19, Id). And under the Canons of Professional Ethics, a lawyer must
steadfastly bear in mind that his great trust is to be performed within and not
without the bounds of the law (Canon 15, Id.), that he advances the honor of his
profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance
with the strictest principles of moral law (Canon 32, Id.). These canons strip a
lawyer of the lawyer-client privilege whenever he conspires with the client in the
commission of a crime or a fraud.
PUNO, J., dissenting opinion:
1. LEGAL ETHICS; LAWYER-CLIENT PRIVILEGE; CAN NEVER BE USED
AS A SHIELD TO COMMIT CRIME OR FRAUD. — The attorney-client privilege
can never be used as a shield to commit a crime or a fraud. Communications to
an attorney having for their object the commission of a crime ". . . partake the
nature of a conspiracy, and it is not only lawful to divulge such communications,
but under certain circumstances it might become the duty of the attorney to do so.
The interests of public justice require that no such shield from merited exposure
shall be interposed to protect a person who takes counsel how he can safely
commit a crime. The relation of attorney and client cannot exist for the purpose of
counsel in concocting crimes." (125 American Law Reports Annotated 516–519
citing People v. Van Alstine, 57 Mich 69, 23 NW 594)
2. ID.; ID.; DOES NOT INCLUDE THE RIGHT OF NON-DISCLOSURE OF
CLIENT IDENTITY AS A GENERAL RULE; EXCEPTIONS. — As a general rule,
the attorney-client privilege does not include the right of non-disclosure of client
identity. The general rule, however, admits of well-etched exceptions which
the Sandiganbayanfailed to recognize. The general rule and its exceptions are
accurately summarized in In re Grand Jury Investigation. The Circuits have
embraced various "exceptions" to the general rule that the identity of a client is not
within the protective ambit of an attorney-client privilege. All such exceptions
appear to be firmly grounded in the Ninth Circuit's seminal decision
in Baird v. Koerner, 279 F. 2d 633 (8th Cir. 1960). 'The name of the client will be
considered privileged matter where the circumstances of the case are such that
the name of the client is material only for the purpose of showing an
acknowledgment of guilt on the part of such client of the very offenses on account
of which the attorney was employed.' 'A significant exception to this principle of
non-confidentiality holds that such information may be privileged when the person
invoking the privilege is able to show that a strong possibility exists that disclosure
of the information would implicate the client in the very matter for which legal advice
was sought in the first case.' Another exception to the general rule that the identity
of a client is not privileged arises where disclosure of the identity would be
tantamount to disclosing an otherwise protected confidential communication. To
the general rule is an exception, firmly embedded as the rule itself. The privilege
may be recognized where so much of the actual communication has already been
disclosed that identification of the client amounts to disclosure of a confidential
communication. The privilege may be recognized where so much of the actual
communication has already been disclosed [not necessarily by the attorney but by
independent sources as well] that identification of the client [or of fees paid]
amounts to disclosure of a confidential communication. Another exception,
articulated in the Fifth Circuit's en banc decision of In re Grand Jury Proceedings
(Pavlick), 680 F, 2D 1026 5th Cir. 1982 (en banc), is recognized when disclosure
of the identity of the client would provide the "last link" of evidence.
3. ID.; ID.; PERSON CLAIMING THE PRIVILEGE OR ITS EXCEPTIONS
HAS THE OBLIGATION TO PRESENT THE UNDERLYING FACTS
DEMONSTRATING THE EXISTENCE OF THE PRIVILEGE. — The person
claiming the privilege or its exception has the obligation to present the underlying
facts demonstrating the existence of the privilege. When these facts can be
presented only by revealing the very information sought to be protected by the
privilege, the procedure is for the lawyer to move for an inspection of the evidence
in an in camera hearing. The hearing can even be in camera and ex-parte. Thus,
it has been held that "a well-recognized means for an attorney to demonstrate the
existence of an exception to the general rule, while simultaneously preserving
confidentiality of the identity of his client, is to move the court for an in camera ex-
parte hearing. Without the proofs adduced in these in camera hearings, the Court
has no factual basis to determine whether petitioners fall within any of the
exceptions to the general rule.

DECISION

KAPUNAN, J : p

These cases touch the very cornerstone of every State's judicial system,
upon which the workings of the contentious and adversarial system in the
Philippine legal process are based — the sanctity of fiduciary duty in the client-
lawyer relationship. The fiduciary duty of a counsel and advocate is also what
makes the law profession a unique position of trust and confidence, which
distinguishes it from any other calling. In this instance, we have no recourse but to
uphold and strengthen the mantle of protection accorded to the confidentiality that
proceeds from the performance of the lawyer's duty to his client.
The facts of the case are undisputed.
The matters raised herein are an offshoot of the institution of the Complaint
on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines,
through the Presidential Commission on Good Government against Eduardo M.
Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-
gotten wealth, which includes shares of stocks in the named corporations in PCGG
Case No. 33 (Civil Case No. 0033), entitled "Republic of the
Philippines versus Eduardo Cojuangco, et al." 1
Among the defendants named in the case are herein petitioners
Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,
Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini,
and herein private respondent Raul S. Roco, who all were then partners of the law
firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter
referred to as the ACCRA Law Firm). ACCRA Law Firm performed legal services
for its clients, which included, among others, the organization and acquisition of
business associations and/or organizations, with the correlative and incidental
services where its members acted as incorporators, or simply, as stockholders.
More specifically, in the performance of these services, the members of the law
firm delivered to its client documents which substantiate the client's equity
holdings, i.e., stock certificates endorsed in blank representing the shares
registered in the client's name, and a blank deed of trust or assignment covering
said shares. In the course of their dealings with their clients, the members of the
law firm acquire information relative to the assets of clients as well as their personal
and business circumstances. As members of the ACCRA Law Firm, petitioners
and private respondent Raul Roco admit that they assisted in the organization and
acquisition of the companies included in Civil Case No. 0033, and in keeping with
the office practice, ACCRA lawyers acted as nominees-stockholders of the said
corporations involved in sequestration proceedings. 2
On August 20, 1991, respondent Presidential Commission on Good
government (hereinafter referred to as respondent PCGG) filed a "Motion to Admit
Third Amended Complaint" and "Third Amended Complaint" which excluded
private respondent Raul S. Roco from the complaint in PCGG Case No. 33 as
party-defendant. 3Respondent PCGG based its exclusion of private respondent
Roco as party-defendant on his undertaking that he will reveal the identity of the
principal/s for whom he acted as nominee/stockholder in the companies involved
in PCGG Case No. 33. 4
Petitioners were included in the Third Amended Complaint on the strength
of the following allegations:
14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose
C. Concepcion, Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan,
Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara
Concepcion Cruz Regala and Abello law offices (ACCRA) plotted,
devised, schemed, conspired and confederated with each other in setting
up, through the use of the coconut levy funds, the financial and corporate
framework and structures that led to the establishment of UCPB,
UNICOM, COCOLIFE, COCOMARK, CIC, and more than twenty other
coconut levy funded corporations, including the acquisition of San Miguel
Corporation shares and its institutionalization through presidential
 directives of the coconut monopoly. Through insidious means and
machinations, ACCRA, being the wholly-owned investment arm, ACCRA
Investments Corporation, became the holder of approximately fifteen
million shares representing roughly 3.3% of the total outstanding capital
stock of UCPB as of 31 March 1987. This ranks ACCRA Investments
Corporation number 44 among the top 100 biggest stockholders of UCPB
which has approximately 1,400,000 shareholders. On the other hand,
corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984. 5
In their answer to the Expanded Amended Complaint, petitioners ACCRA
lawyers alleged that:
4.4. Defendants-ACCRA lawyers' participation in the acts with
which their co-defendants are charged, was in furtherance of legitimate
lawyering.
4.4.1. In the course of rendering professional and legal
services to clients, defendants-ACCRA lawyers, Jose C.
Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and Eduardo
U. Escueta, became holders of shares of stock in the corporations
listed under their respective names in Annex 'A' of the expanded
Amended Complaint as incorporating or acquiring stockholders
only and, as such, they do not claim any proprietary interest in the
said shares of stock.
4.5. Defendant ACCRA-lawyer Avelino V. Cruz was one of
the incorporators in 1976 of Mermaid Marketing Corporation, which
was organized for legitimate business purposes not related to the
allegations of the expanded Amended Complaint. However, he has
long ago transferred any material interest therein and therefore
denies that the 'shares' appearing in his name in Annex 'A' of the
expanded Amended Complaint are his assets. 6
Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed
a separate answer denying the allegations in the complaint implicating him in the
alleged ill-gotten wealth. 7
Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR
OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent PCGG
similarly grant the same treatment to them (exclusion as parties-defendants) as
accorded private respondent Roco. 8 The Counter-Motion for dropping petitioners
from the complaint was duly set for hearing on October 18, 1991 in accordance
with the requirements of Rule 15 of the Rules of Court.
In its "Comment," respondent PCGG set the following conditions precedent
for the exclusion of petitioners, namely: (a) the disclosure of the identity of its
clients; (b) submission of documents substantiating the lawyer-client relationship;
and (c) the submission of the deeds of assignments petitioners executed in favor
of its clients covering their respective shareholdings. 9
Consequently, respondent PCGG presented supposed proof to substantiate
compliance by private respondent Roco of the conditions precedent to warrant the
latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to
respondent PCGG of the counsel of respondent Roco dated May 24, 1989
reiterating a previous request for reinvestigation by the PCGG in PCGG Case No.
33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as
Attachment to the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and
Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in
behalf of private respondent Roco originally requesting the reinvestigation and/or
re-examination of the evidence of the PCGG against Roco in its Complaint in
PCGG Case No. 33. 10
It is noteworthy that during said proceedings, private respondent Roco did
not refute petitioners' contention that he did actually not reveal the identity of the
client involved in PCGG Case No. 33, nor had he undertaken to reveal the identity
of the client for whom he acted as nominee-stockholder. 11
On March 18, 1992, respondent Sandiganbayan promulgated the
Resolution, herein questioned, denying the exclusion of petitioners in PCGG Case
No. 33, for their refusal to comply with the conditions required by respondent
PCGG. It held:
xxx xxx xxx
ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e. their principal, and that
will be their choice. But until they do identify their clients, considerations
of whether or not the privilege claimed by the ACCRA lawyers exists
cannot even begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the existence andidentity
of the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein.
5. The PCGG is satisfied that defendant Roco has demonstrated
his agency and that Roco has apparently identified his principal, which
revelation could show the lack of cause against him. This in turn has
allowed the PCGG to exercise its power both under the rules of Agency
and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's
ruling in Republic v. Sandiganbayan (173 SCRA 72).
The PCGG has apparently offered to the ACCRA lawyers the same
conditions availed of by Roco; full disclosure in exchange for exclusion
 from these proceedings (par. 7, PCGG's COMMENT dated November 4,
1991). The ACCRA lawyers have preferred not to make the disclosures
required by the PCGG.
The ACCRA lawyers cannot, therefore, begrudge the PCGG for
keeping them as party defendants. In the same vein, they cannot compel
the PCGG to be accorded the same treatment accorded to Roco.
Neither can this Court.
WHEREFORE, the Counter Motion dated October 8, 1991 filed by
the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same
treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack
of merit. 12
ACCRA lawyers moved for a reconsideration of the above resolution but the
same was denied by the respondent Sandiganbayan. Hence, the ACCRA lawyers
filed the petition for certiorari, docketed as G.R. No. 105938, invoking the following
grounds:
I
The Honorable Sandiganbayan gravely abused its discretion in
subjecting petitioners ACCRA lawyers who undisputably acted as lawyers
in serving as nominee-stockholders, to the strict application of the law of
agency.
II
The Honorable Sandiganbayan committed grave abuse of
discretion in not considering petitioners ACCRA lawyers and Mr. Roco as
similarly situated and, therefore, deserving of equal treatment.
1. There is absolutely no evidence that Mr. Roco had revealed, or
had undertaken to reveal, the identities of the client(s) for
whom he acted as nominee-stockholder.
2. Even assuming that Mr. Roco had revealed, or had undertaken
to reveal, the identities of the client(s), the disclosure does
not constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.
3. Respondent Sandiganbayan sanctioned favoritism and undue
preference in favor of Mr. Roco in violation of the equal
protection clause.
III
The Honorable Sandiganbayan committed grave abuse of
discretion in not holding that, under the facts of this case, the attorney-
client privilege prohibits petitioners ACCRA lawyers from revealing the
identity of their client(s) and the other information requested by the PCGG.
 1. Under the peculiar facts of this case, the attorney-client privilege
includes the identity of the client(s).
2. The factual disclosures required by the PCGG are not limited to
the identity of petitioners ACCRA lawyers' alleged client(s)
but extend to other privileged matters.
IV
The Honorable Sandiganbayan committed grave abuse of
discretion in not requiring that the dropping of party-defendants by the
PCGG must be based on reasonable and just grounds and with due
consideration to the constitutional right of petitioners ACCRA lawyers to
the equal protection of the law.
Petitioner Paraja G. Hayudini, likewise, filed his own motion for
reconsideration of the March 18, 1991 resolution which was denied by
respondent Sandiganbayan. Thus, he filed a separate petition for certiorari,
docketed as G.R. No. 108113, assailing respondent Sandiganbayan's resolution
on essentially the same grounds averred by petitioners in G.R. No. 105938.
Petitioners contend that the exclusion of respondent Roco as party-
defendant in PCGG Case No. 33 grants him a favorable treatment, on the pretext
of his alleged undertaking to divulge the identity of his client, giving him an
advantage over them who are in the same footing as partners in the ACCRA law
firm. Petitioners further argue that even granting that such an undertaking has
been assumed by private respondent Roco, they are prohibited from revealing the
identity of their principal under their sworn mandate and fiduciary duty as lawyers
to uphold at all times the confidentiality of information obtained during such lawyer-
client relationship.cdasia

Respondent PCGG, through its counsel, refutes petitioners' contention,

alleging that the revelation of the identity of the client is not within the ambit of the
lawyer-client confidentiality privilege, nor are the documents it required (deeds of
assignment) protected, because they are evidence of nominee status. 13
In his comment, respondent Roco asseverates that respondent PCGG acted
correctly in excluding him as party-defendant because he "(Roco) has not filed an
Answer. PCGG had therefore the right to dismiss Civil Case No. 0033 as to Roco
'without an order of court by filing a notice of dismissal,'" 14 and he has undertaken
to identify his principal. 15
Petitioners' contentions are impressed with merit.
I
It is quite apparent that petitioners were impleaded by the PCGG as co-
defendants to force them to disclose the identity of their clients. Clearly,
respondent PCGG is not after petitioners but the "bigger fish" as they say in street
parlance. This ploy is quite clear from the PCGG's willingness to cut a deal with
petitioners — the names of their clients in exchange for exclusion from the
complaint. The statement of the Sandiganbayan in its questioned resolution dated
March 18, 1992 is explicit:
ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e., their principal, and that
will be their choice. But until they do identify their clients, considerations
of whether or not the privilege claimed by the ACCRA lawyers exists
cannot even begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the existence and identity
of the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein. (Italics ours)
In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third
Division, entitled "Primavera Farms, Inc., et al. vs. Presidential Commission on
Good Government" respondent PCGG, through counsel Mario Ongkiko,
manifested at the hearing on December 5, 1991 that the PCGG wanted to establish
through the ACCRA that their "so called client is Mr. Eduardo Cojuangco"; that "it
was Mr. Eduardo Cojuangco who furnished all the monies to those subscription
payments in corporations included in Annex "A" of the Third Amended Complaint;
that the ACCRA lawyers executed deeds of trust and deeds of assignment, some
in the name of particular persons, some in blank.
We quote Atty. Ongkiko:
ATTY. ONGKIKO:
With the permission of this Hon. Court. I propose to establish
through these ACCRA lawyers that, one, their so-called client is Mr.
Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco who
furnished all the monies to these subscription payments of these
corporations who are now the petitioners in this case. Third, that these
lawyers executed deeds of trust, some in the name of a particular person,
some in blank. Now, these blank deeds are important to our claim that
some of the shares are actually being held by the nominees for the late
President Marcos. Fourth, they also executed deeds of assignment and
some of these assignments have also blank assignees. Again, this is
important to our claim that some of the shares are for Mr. Cojuangco and
some are for Mr. Marcos. Fifth, that most of these corporations are really
just paper corporations. Why do we say that? One: There are no really
fixed sets of officers, no fixed sets of directors at the time of incorporation
and even up to 1986, which is the crucial year. And not only that, they
have no permits from the municipal authorities in Makati. Next, actually all
their addresses now are care of Villareal Law Office. They really have no
 address on records. These are some of the principal things that we would
ask of these nominees stockholders, as they called themselves. 16
It would seem that petitioners are merely standing in for their clients as
defendants in the complaint. Petitioners are being prosecuted solely on the basis
of activities and services performed in the course of their duties as lawyers. Quite
obviously, petitioners' inclusion as co-defendants in the complaint is merely being
used as leverage to compel them to name their clients and consequently to enable
the PCGG to nail these clients. Such being the case, respondent PCGG has no
valid cause of action as against petitioners and should exclude them from the Third
Amended Complaint.
II
The nature of lawyer-client relationship is premised on the Roman Law
concepts of locatio conductio operarum (contract of lease of services) where one
person lets his services and another hires them without reference to the object of
which the services are to be performed, wherein lawyers' services may be
compensated byhonorarium or for hire, 17 and mandato (contract of agency)
wherein a friend on whom reliance could be placed makes a contract in his name,
but gives up all that he gained by the contract to the person who requested
him. 18 But the lawyer-client relationship is more than that of the principal-agent
and lessor-lessee.
In modern day perception of the lawyer-client relationship, an attorney is
more than a mere agent or servant, because he possesses special powers of trust
and confidence reposed on him by his client. 19 A lawyer is also as independent as
the judge of the court, thus his powers are entirely different from and superior to
those of an ordinary agent. 20 Moreover, an attorney also occupies what may be
considered as a "quasi-judicial office" since he is in fact an officer of the
Court 21 and exercises his judgment in the choice of courses of action to be taken
favorable to his client.
Thus, in the creation of lawyer-client relationship, there are rules, ethical
conduct and duties that breathe life into it, among those, the fiduciary duty to his
client which is of a very delicate, exacting and confidential character, requiring a
very high degree of fidelity and good faith, 22 that is required by reason of necessity
and public interest 23 based on the hypothesis that abstinence from seeking legal
advice in a good cause is an evil which is fatal to the administration of justice. 24
It is also the strict sense of fidelity of a lawyer to his client that distinguishes
him from any other professional in society. This conception is entrenched and
embodies centuries of established and stable tradition. 25 In Stockton v. Ford, 26 the
U.S. Supreme Court held:
There are few of the business relations of life involving a higher
trust and confidence than that of attorney and client, or generally
 speaking, one more honorably and faithfully discharged; few more
anxiously guarded by the law, or governed by the sterner principles of
morality and justice; and it is the duty of the court to administer them in a
corresponding spirit, and to be watchful and industrious, to see that
confidence thus reposed shall not be used to the detriment or prejudice of
the rights of the party bestowing it. 27
In our jurisdiction, this privilege takes off from the old Code of Civil
Procedure enacted by the Philippine Commission on August 7, 1901. Section 383
of the Code specifically "forbids counsel, without authority of his client to reveal
any communication made by the client to him or his advice given thereon in the
course of professional employment." 28 Passed on into various provisions of
the Rules of Court, the attorney-client privilege, as currently worded provides:
Sec. 24. Disqualification by reason of privileged communication. —
The following persons cannot testify as to matters learned in confidence
in the following cases:
xxx xxx xxx
An attorney cannot, without the consent of his client, be examined
as to any communication made by the client to him, or his advice given
thereon in the course of, or with a view to, professional employment, can
an attorney's secretary, stenographer, or clerk be examined, without the
consent of the client and his employer, concerning any fact the knowledge
of which has been acquired in such capacity. 29
Further, Rule 138 of the Rules of Court states:
Sec. 20. It is the duty of an attorney:
(e) to maintain inviolate the confidence, and at every peril to
himself, to preserve the secrets of his client, and to accept no
compensation in connection with his client's business except from him or
with his knowledge and approval.
This duty is explicitly mandated in Canon 17 of the Code of Professional
Responsibility which provides that:
Canon 17. A lawyer owes fidelity to the cause of his client and he
shall be mindful of the trust and confidence reposed in him.
Canon 15 of the Canons of Professional Ethics also demands a lawyer's
fidelity to client:
The lawyer owes "entire devotion to the interest of the client, warm
zeal in the maintenance and defense of his rights and the exertion of his
utmost learning and ability," to the end that nothing be taken or be withheld
from him, save by the rules of law, legally applied. No fear of judicial
disfavor or public popularity should restrain him from the full discharge of
his duty. In the judicial forum the client is entitled to the benefit of any and
 every remedy and defense that is authorized by the law of the land, and
he may expect his lawyer to assert every such remedy or defense. But it
is steadfastly to be borne in mind that the great trust of the lawyer is to be
performed within and not without the bounds of the law. The office of
attorney does not permit, much less does it demand of him for any client,
violation of law or any manner of fraud or chicanery. He must obey his
own conscience and not that of his client.
Considerations favoring confidentiality in lawyer-client relationships are
many and serve several constitutional and policy concerns. In the constitutional
sphere, the privilege gives flesh to one of the most sacrosanct rights available to
the accused, the right to counsel. If a client were made to choose between legal
representation without effective communication and disclosure and legal
representation with all his secrets revealed then he might be compelled, in some
instances, to either opt to stay away from the judicial system or to lose the right to
counsel. If the price of disclosure is too high, or if it amounts to self incrimination,
then the flow of information would be curtailed thereby rendering the right
practically nugatory. The threat this represents against another sacrosanct
individual right, the right to be presumed innocent is at once self-evident.
Encouraging full disclosure to a lawyer by one seeking legal services opens
the door to a whole spectrum of legal options which would otherwise be
circumscribed by limited information engendered by a fear of disclosure. An
effective lawyer-client relationship is largely dependent upon the degree of
confidence which exists between lawyer and client which in turn requires a
situation which encourages a dynamic and fruitful exchange and flow of
information. It necessarily follows that in order to attain effective representation,
the lawyer must invoke the privilege not as a matter of option but as a matter of
duty and professional responsibility.
The question now arises whether or not this duty may be asserted in refusing
to disclose the name of petitioners' client(s) in the case at bar. Under the facts and
circumstances obtaining in the instant case, the answer must be in the affirmative.
As a matter of public policy, a client's identity should not be shrouded in
mystery. 30 Under this premise, the general rule in our jurisdiction as well as in the
United States is that a lawyer may not invoke the privilege and refuse to divulge
the name or identity of his client. 31
The reasons advanced for the general rule are well established.
First, the court has a right to know that the client whose privileged
information is sought to be protected is flesh and blood.
Second, the privilege begins to exist only after the attorney-client
relationship has been established. The attorney-client privilege does not attach
until there is a client
 Third, the privilege generally pertains to the subject matter of the
relationship.
Finally, due process considerations require that the opposing party should,
as a general rule, know his adversary. "A party suing or sued is entitled to know
who his opponent is." 32 He cannot be obliged to grope in the dark against
unknown forces. 33
Notwithstanding these considerations, the general rule is however qualified
by some important exceptions.
1) Client identity is privileged where a strong probability exists that revealing
the client's name would implicate that client in the very activity for which he sought
the lawyer's advice.
In Ex-Parte Enzor, 34 a state supreme court reversed a lower court order
requiring a lawyer to divulge the name of her client on the ground that the subject
matter of the relationship was so closely related to the issue of the client's identity
that the privilege actually attached to both. In Enzor, the unidentified client, an
election official, informed his attorney in confidence that he had been offered a
bribe to violate election laws or that he had accepted a bribe to that end. In her
testimony, the attorney revealed that she had advised her client to count the votes
correctly, but averred that she could not remember whether her client had been, in
fact, bribed. The lawyer was cited for contempt for her refusal to reveal his client's
identity before a grand jury. Reversing the lower court's contempt orders, the state
supreme court held that under the circumstances of the case, and under the
exceptions described above, even the name of the client was privileged.
U.S. v. Hodge and Zweig, 35 involved the same exception, i.e. that client
identity is privileged in those instances where a strong probability exists that the
disclosure of the client's identity would implicate the client in the very criminal
activity for which the lawyer's legal advice was obtained.
The Hodge case involved federal grand jury proceedings inquiring into the
activities of the "Sandino Gang," a gang involved in the illegal importation of drugs
in the United States. The respondents, law partners, represented key witnesses
and suspects including the leader of the gang, Joe Sandino.
In connection with a tax investigation in November of 1973, the IRS issued
summons to Hodge and Zweig, requiring them to produce documents and
information regarding payment received by Sandino on behalf of any other person,
and vice versa. The lawyers refused to divulge the names. The Ninth Circuit of the
United States Court of Appeals, upholding non-disclosure under the facts and
circumstances of the case, held:
A client's identity and the nature of that client's fee arrangements
may be privileged where the person invoking the privilege can show that
 a strong probability exists that disclosure of such information would
implicate that client in the very criminal activity for which legal advice was
sought Baird v. Koerner, 279 F.2d at 680. While in Baird Owe enunciated
this rule as a matter of California law, the rule also reflects federal law.
Appellants contend that the Baird exception applies to this case.
The Baird exception is entirely consonant with the principal policy
behind the attorney-client privilege. "In order to promote freedom of
consultation of legal advisors by clients, the apprehension of compelled
disclosure from the legal advisors must be removed; hence, the law must
prohibit such disclosure except on the client's consent." 8 J. Wigmore,
supra Sec. 2291, at 545. In furtherance of this policy, the client's identity
and the nature of his fee arrangements are, in exceptional cases,
protected as confidential communications. 36
2) Where disclosure would open the client to civil liability, his identity is
privileged. For instance, the peculiar facts and circumstances
of Neugass v. Terminal Cab Corporation, 37 prompted the New York Supreme
Court to allow a lawyer's claim to the effect that he could not reveal the name of
his client because this would expose the latter to civil litigation. llcd

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she
was riding, owned by respondent corporation, collided with a second taxicab,
whose owner was unknown. Plaintiff brought action both against defendant
corporation and the owner of the second cab, identified in the information only as
John Doe. It turned out that when the attorney of defendant corporation appeared
on preliminary examination, the fact was somehow revealed that the lawyer came
to know the name of the owner of the second cab when a man, a client of the
insurance company, prior to the institution of legal action, came to him and
reported that he was involved in a car accident. It was apparent under the
circumstances that the man was the owner of the second cab. The state supreme
court held that the reports were clearly made to the lawyer in his professional
capacity. The court said:
That his employment came about through the fact that the
insurance company had hired him to defend its policyholders seems
immaterial. The attorney in such cases is clearly the attorney for the
policyholder when the policyholder goes to him to report an occurrence
contemplating that it would be used in an action or claim against him. 38
xxx xxx xxx.
All communications made by a client to his counsel, for the purpose
of professional advice or assistance, are privileged, whether they relate to
a suit pending or contemplated, or to any other matter proper for such
advice or aid; . . . And whenever the communication made, relates to a
matter so connected with the employment as attorney or counsel as to
 afford presumption that it was the ground of the address by the client, then
it is privileged from disclosure. . . .
It appears . . . that the name and address of the owner of the
second cab came to the attorney in this case as a confidential
communication. His client is not seeking to use the courts, and his address
cannot be disclosed on that theory, nor is the present action pending
against him as service of the summons on him has not been effected. The
objections on which the court reserved decision are sustained. 39
In the case of Matter of Shawmut Mining Company, 40 the lawyer involved
was required by a lower court to disclose whether he represented certain clients in
a certain transaction. The purpose of the court's request was to determine whether
the unnamed persons as interested parties were connected with the purchase of
properties involved in the action. The lawyer refused and brought the question to
the State Supreme Court. Upholding the lawyer's refusal to divulge the names of
his clients the court held:
If it can compel the witness to state, as directed by the order
appealed from, that he represented certain persons in the purchase or
sale of these mines, it has made progress in establishing by such
evidence their version of the litigation. As already suggested, such
testimony by the witness would compel him to disclose not only that he
was attorney for certain people, but that, as the result of communications
made to him in the course of such employment as such attorney, he knew
that they were interested in certain transactions. We feel sure that under
such conditions no case has ever gone to the length of compelling an
attorney, at the instance of a hostile litigant, to disclose not only his
retainer, but the nature of the transactions to which it related, when such
information could be made the basis of a suit against his client. 41
3) Where the government's lawyers have no case against an attorney's
client unless, by revealing the client's name, the said name would furnish the only
link that would form the chain of testimony necessary to convict an individual of a
crime, the client's name is privileged.
In Baird vs. Korner, 42 a lawyer was consulted by the accountants and the
lawyer of certain undisclosed taxpayers regarding steps to be taken to place the
undisclosed taxpayers in a favorable position in case criminal charges were
brought against them by the U.S. Internal Revenue Service (IRS).
It appeared that the taxpayer's returns of previous years were probably
incorrect and the taxes understated. The clients themselves were unsure about
whether or not they violated tax laws and sought advice from Baird on the
hypothetical possibility that they had. No investigation was then being undertaken
by the IRS of the taxpayers. Subsequently, the attorney of the taxpayers delivered
to Baird the sum of $12,706.85, which had been previously assessed as the tax
due, and another amount of money representing his fee for the advice given. Baird
then sent a check for $12,706.85 to the IRS in Baltimore, Maryland, with a note
explaining the payment, but without naming his clients. The IRS demanded that
Baird identify the lawyers, accountants, and other clients involved. Baird refused
on the ground that he did not know their names, and declined to name the attorney
and accountants because this constituted privileged communication. A petition
was filed for the enforcement of the IRS summons. For Baird's repeated refusal to
name his clients he was found guilty of civil contempt. The Ninth Circuit Court of
Appeals held that, a lawyer could not be forced to reveal the names of clients who
employed him to pay sums of money to the government voluntarily in settlement
of undetermined income taxes, unsued on, and with no government audit or
investigation into that client's income tax liability pending. The court emphasized
the exception that a client's name is privileged when so much has been revealed
concerning the legal services rendered that the disclosure of the client's identity
exposes him to possible investigation and sanction by government agencies. The
Court held:
The facts of the instant case bring it squarely within that exception
to the general rule. Here money was received by the government, paid by
persons who thereby admitted they had not paid a sufficient amount in
income taxes some one or more years in the past. The names of the
clients are useful to the government for but one purpose — to ascertain
which taxpayers think they were delinquent, so that it may check the
records for that one year or several years. The voluntary nature of the
payment indicates a belief by the taxpayers that more taxes or interest or
penalties are due than the sum previously paid, if any. It indicates a feeling
of guilt for nonpayment of taxes, though whether it is criminal guilt is
undisclosed. But it may well be the link that could form the chain of
testimony necessary to convict an individual of a federal crime. Certainly
the payment and the feeling of guilt are the reasons the attorney here
involved was employed — to advise his clients what, under the
circumstances, should be done. 43
Apart from these principal exceptions, there exist other situations which
could qualify as exceptions to the general rule.
For example, the content of any client communication to a lawyer lies within
the privilege if it is relevant to the subject matter of the legal problem on which the
client seeks legal assistance. 44 Moreover, where the nature of the attorney-client
relationship has been previously disclosed and it is the identity which is intended
to be confidential, the identity of the client has been held to be privileged, since
such revelation would otherwise result in disclosure of the entire transaction. 45
Summarizing these exceptions, information relating to the identity of a client
may fall within the ambit of the privilege when the client's name itself has an
independent significance, such that disclosure would then reveal client
confidences. 46
The circumstances involving the engagement of lawyers in the case at
bench, therefore, clearly reveal that the instant case falls under at least two
exceptions to the general rule. First, disclosure of the alleged client's name would
lead to establish said client's connection with the very fact in issue of the case,
which is privileged information, because the privilege, as stated earlier, protects
the subject matter or the substance (without which there would be no attorney-
client relationship).
The link between the alleged criminal offense and the legal advice or legal
service sought was duly established in the case at bar, by no less than the PCGG
itself. The key lies in the three specific conditions laid down by the PCGG which
constitutes petitioners' ticket to non-prosecution should they accede thereto:
(a) the disclosure of the identity of its clients;
(b) submission of documents substantiating the lawyer-client
relationship; and
(c) the submission of the deeds of assignment petitioners executed
in favor of their clients covering their respective shareholdings.
From these conditions, particularly the third, we can readily deduce that the
clients indeed consulted the petitioners, in their capacity as lawyers, regarding the
financial and corporate structure, framework and set-up of the corporations in
question. In turn, petitioners gave their professional advice in the form of, among
others, the aforementioned deeds of assignment covering their client's
shareholdings.
There is no question that the preparation of the aforestated documents was
part and parcel of petitioners' legal service to their clients. More important, it
constituted an integral part of their duties as lawyers. Petitioners, therefore, have
a legitimate fear that identifying their clients would implicate them in the very
activity for which legal advice had been sought, i.e., the alleged accumulation of
ill-gotten wealth in the aforementioned corporations.
Furthermore, under the third main exception, revelation of the client's name
would obviously provide the necessary link for the prosecution to build its case,
where none otherwise exists. It is the link, in the words of Baird, "that would
inevitably form the chain of testimony necessary to convict the (client) of a . . .
crime." 47
An important distinction must be made between a case where a client takes
on the services of an attorney, for illicit purposes, seeking advice about how to go
around the law for the purpose of committing illegal activities and a case where a
client thinks he might have previously committed something illegal and consults
his attorney about it. The first case clearly does not fall within the privilege because
the same cannot be invoked for purposes illegal. The second case falls within the
exception because whether or not the act for which the client sought advice turns
out to be illegal, his name cannot be used or disclosed if the disclosure leads to
evidence, not yet in the hands of the prosecution, which might lead to possible
action against him.
These cases may be readily distinguished, because the privilege cannot be
invoked or used as a shield for an illegal act, as in the first example; while the
prosecution may not have a case against the client in the second example and
cannot use the attorney client relationship to build up a case against the latter. The
reason for the first rule is that it is not within the professional character of a lawyer
to give advice on the commission of a crime. 48 The reason for the second has
been stated in the cases above discussed and are founded on the same policy
grounds for which the attorney-client privilege, in general, exists.
In Matter of Shawmut Mining Co., supra, the appellate court therein stated
that "under such conditions no case has ever yet gone to the length of compelling
an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but
the nature of the transactions to which it related, when such information could be
made the basis of a suit against his client." 49 "Communications made to an
attorney in the course of any personal employment, relating to the subject thereof,
and which may be supposed to be drawn out in consequence of the relation in
which the parties stand to each other, are under the seal of confidence and entitled
to protection as privileged communications." 50 Where the communicated
information, which clearly falls within the privilege, would suggest possible criminal
activity but there would be not much in the information known to the prosecution
which would sustain a charge except that revealing the name of the client would
open up other privileged information which would substantiate the prosecution's
suspicions, then the client's identity is so inextricably linked to the subject matter
itself that it falls within the protection. The Baird exception, applicable to the instant
case, is consonant with the principal policy behind the privilege, i.e., that for the
purpose of promoting freedom of consultation of legal advisors by clients,
apprehension of compelled disclosure from attorneys must be eliminated. This
exception has likewise been sustained in In re Grand Jury
Proceedings 51 and Tillotson v. Boughner. 52 What these cases unanimously seek
to avoid is the exploitation of the general rule in what may amount to a fishing
expedition by the prosecution.
There are, after all, alternative sources of information available to the
prosecutor which do not depend on utilizing a defendant's counsel as a convenient
and readily available source of information in the building of a case against the
latter. Compelling disclosure of the client's name in circumstances such as the one
which exists in the case at bench amounts to sanctioning fishing expeditions by
lazy prosecutors and litigants which we cannot and will not countenance. When
the nature of the transaction would be revealed by disclosure of an attorney's
retainer, such retainer is obviously protected by the privilege. 53 It follows that
petitioner attorneys in the instant case owe their client(s) a duty and an obligation
not to disclose the latter's identity which in turn requires them to invoke the
privilege.
In fine, the crux of petitioner's objections ultimately hinges on their
expectation that if the prosecution has a case against their clients, the latter's case
should be built upon evidence painstakingly gathered by them from their own
sources and not from compelled testimony requiring them to reveal the name of
their clients, information which unavoidably reveals much about the nature of the
transaction which may or may not be illegal. The logical nexus between name and
nature of transaction is so intimate in this case that it would be difficult to simply
dissociate one from the other. In this sense, the name is as much "communication"
as information revealed directly about the transaction in question itself, a
communication which is clearly and distinctly privileged. A lawyer cannot reveal
such communication without exposing himself to charges of violating a principle
which forms the bulwark of the entire attorney-client relationship.
The uberrimei fidei relationship between a lawyer and his client therefore
imposes a strict liability for negligence on the former. The ethical duties owing to
the client, including confidentiality, loyalty, competence, diligence as well as the
responsibility to keep clients informed and protect their rights to make decisions
have been zealously sustained. In Milbank, Tweed, Hadley and
McCloy v. Boon, 54 the US Second District Court rejected the plea of the petitioner
law firm that it breached its fiduciary duty to its client by helping the latter's former
agent in closing a deal for the agent's benefit only after its client hesitated in
proceeding with the transaction, thus causing no harm to its client. The Court
instead ruled that breaches of a fiduciary relationship in any context comprise a
special breed of cases that often loosen normally stringent requirements of
causation and damages, and found in favor of the client.
To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and
Shipley P.A. v. Scheller 55 requiring strict obligation of lawyers vis-a-vis clients. In
this case, a contingent fee lawyer was fired shortly before the end of completion of
his work, and sought payment quantum meruit of work done. The court, however,
found that the lawyer was fired for cause after he sought to pressure his client into
signing a new fee agreement while settlement negotiations were at a critical stage.
While the client found a new lawyer during the interregnum, events forced the
client to settle for less than what was originally offered. Reiterating the principle of
fiduciary duty of lawyers to clients in Meinhard v. Salmon 56 famously attributed to
Justice Benjamin Cardozo that "Not honesty alone, but the punctilio of an honor
the most sensitive, is then the standard of behavior," the US Court found that the
lawyer involved was fired for cause, thus deserved no attorney's fees at all.
The utmost zeal given by Courts to the protection of the lawyer-client
confidentiality privilege and lawyer's loyalty to his client is evident in the duration
of the protection, which exists not only during the relationship, but extends even
after the termination of the relationship. 57
Such are the unrelenting duties required of lawyers vis-a-vis their clients
because the law, which the lawyers are sworn to uphold, in the words of Oliver
Wendell Holmes, 58 ". . . is an exacting goddess, demanding of her votaries in
intellectual and moral discipline." The Court, no less, is not prepared to accept
respondents' position without denigrating the noble profession that is lawyering, so
extolled by Justice Holmes in this wise:
Every calling is great when greatly pursued. But what other gives
such scope to realize the spontaneous energy of one's soul? In what other
does one plunge so deep in the stream of life — so share its passions its
battles, its despair, its triumphs, both as witness and actor? . . . But that is
not all. What a subject is this in which we are united — this abstraction
called the Law, wherein as in a magic mirror, we see reflected, not only in
our lives, but the lives of all men that have been. When I think on this
majestic theme by eyes dazzle. If we are to speak of the law as our
mistress, we who are here know that she is a mistress only to be won with
sustained and lonely passion — only to be won by straining all the faculties
by which man is likened to God.
We have no choice but to uphold petitioners' right not to reveal the identity
of their clients under pain of the breach of fiduciary duty owing to their clients,
because the facts of the instant case clearly fall within recognized exceptions to
the rule that the client's name is not privileged information.
If we were to sustain respondent PCGG that the lawyer-client confidential
privilege under the circumstances obtaining here does not cover the identity of the
client, then it would expose the lawyers themselves to possible litigation by their
clients in view of the strict fiduciary responsibility imposed on them in the exercise
of their duties.LLphil

The complaint in Civil Case No. 0033 alleged that the defendants therein,
including herein petitioners and Eduardo Cojuangco, Jr. conspired with each other
in setting up through the use of coconut levy funds the financial and corporate
framework and structures that led to the establishment of UCPB, UNICOM and
others and that through insidious means and machinations, ACCRA, using its
wholly-owned investment arm, ACCRA Investments Corporation, became the
holder of approximately fifteen million shares representing roughly 3.3% of the total
capital stock of UCPB as of 31 March 1987. The PCGG wanted to establish
through the ACCRA lawyers that Mr. Cojuangco is their client and it was
Cojuangco who furnished all the monies to the subscription payment; hence,
petitioners acted as dummies, nominees and/or agents by allowing themselves,
among others, to be used as instrument in accumulating ill-gotten wealth through
government concessions, etc., which acts constitute gross abuse of official position
and authority, flagrant breach of public trust, unjust enrichment, violation of the
Constitution and laws of the Republic of the Philippines.
By compelling petitioners, not only to reveal the identity of their clients, but
worse, to submit to the PCGG documents substantiating the client-lawyer
relationship, as well as deeds of assignment petitioners executed in favor of its
clients covering their respective shareholdings, the PCGG would exact from
petitioners a link, "that would inevitably form the chain of testimony necessary to
convict the (client) of a crime."
III
In response to petitioners' last assignment of error, respondents allege that
the private respondent was dropped as party defendant not only because of his
admission that he acted merely as a nominee but also because of his undertaking
to testify to such facts and circumstances "as the interest of truth may require,
which includes . . . the identity of the principal." 59
First, as to the bare statement that private respondent merely acted as a
lawyer and nominee, a statement made in his out-of-court settlement with the
PCGG, it is sufficient to state that petitioners have likewise made the same claim
not merely out-of-court but also in their Answer to plaintiff's Expanded Amended
Complaint, signed by counsel, claiming that their acts were made in furtherance of
"legitimate lawyering." 60 Being "similarly situated" in this regard, public
respondents must show that there exist other conditions and circumstances which
would warrant their treating the private respondent differently from petitioners in
the case at bench in order to evade a violation of the equal protection clause of the
Constitution.
To this end, public respondents contend that the primary consideration
behind their decision to sustain the PCGG's dropping of private respondent as a
defendant was his promise to disclose the identities of the clients in question.
However, respondents failed to show — and absolutely nothing exists in the
records of the case at bar — that private respondent actually revealed the identity
of his client(s) to the PCGG. Since the undertaking happens to be the leitmotif of
the entire arrangement between Mr. Roco and the PCGG, an undertaking which is
so material as to have justified PCGG's special treatment exempting the private
respondent from prosecution, respondent Sandiganbayan should have required
proof of the undertaking more substantial than a "bare assertion" that private
respondent did indeed comply with the undertaking. Instead, as manifested by the
PCGG, only three documents were submitted for the purpose, two of which were
mere requests for re-investigation and one simply disclosed certain clients which
petitioners (ACCRA lawyers) were themselves willing to reveal. These were clients
to whom both petitioners and private respondent rendered legal services while all
of them were partners at ACCRA, and were not the clients which the PCGG wanted
disclosed for the alleged questioned transactions. 61
To justify the dropping of the private respondent from the case or the filing
of the suit in the respondent court without him, therefore, the PCGG should
conclusively show that Mr. Roco was treated as a species apart from the rest of
the ACCRA lawyers on the basis of a classification which made substantial
distinctions based on real differences. No such substantial distinctions exist from
the records of the case at bench, in violation of the equal protection clause.
The equal protection clause is a guarantee which provides a wall of
protection against uneven application of statutes and regulations. In the broader
sense, the guarantee operates against uneven application of legal norms so that
all persons under similar circumstances would be accorded the same
treatment. 62 Those who fall within a particular class ought to be treated alike not
only as to privileges granted but also as to the liabilities imposed.
. . . What is required under this constitutional guarantee is the uniform operation of
legal norms so that all persons under similar circumstances would be accorded the same
treatment both in the privileges conferred and the liabilities imposed. As was noted in a
recent decision: 'Favoritism and undue preference cannot be allowed. For the principle is
that equal protection and security shall be given to every person under circumstances,
which if not identical are analogous. If law be looked upon in terms of burden or charges,
those that fall within a class should be treated in the same fashion, whatever restrictions
cast on some in the group equally binding the rest. 63
We find that the condition precedent required by the respondent PCGG of
the petitioners for their exclusion as parties-defendants in PCGG Case No. 33
violates the lawyer-client confidentiality privilege. The condition also constitutes a
transgression by respondents Sandiganbayan and PCGG of the equal protection
clause of the Constitution. 64 it is grossly unfair to exempt one similarly situated
litigant from prosecution without allowing the same exemption to the others.
Moreover, the PCGG's demand not only touches upon the question of the identity
of their clients but also on documents related to the suspected transactions, not
only in violation of the attorney-client privilege but also of the constitutional right
against self-incrimination. Whichever way one looks at it, this is a fishing
expedition, a free ride at the expense of such rights.
An argument is advanced that the invocation by petitioners of the privilege
of attorney-client confidentiality at this stage of the proceedings is premature and
that they should wait until they are called to testify and examine as witnesses as
to matters learned in confidence before they can raise their objections. But
petitioners are not mere witnesses. They are co-principals in the case for recovery
of alleged ill-gotten wealth. They have made their position clear from the very
beginning that they are not willing to testify and they cannot be compelled to testify
in view of their constitutional right against self-incrimination and of their
fundamental legal right to maintain inviolate the privilege of attorney-client
confidentiality.
It is clear then that the case against petitioners should never be allowed to
take its full course in the Sandiganbayan. Petitioners should not be made to suffer
the effects of further litigation when it is obvious that their inclusion in the complaint
arose from a privileged attorney-client relationship and as a means of coercing
them to disclose the identities of their clients. To allow the case to continue with
respect to them when this Court could nip the problem in the bud at this early
opportunity would be to sanction an unjust situation which we should not here
countenance. The case hangs as a real and palpable threat, a proverbial Sword of
Damocles over petitioners' heads. It should not be allowed to continue a day
longer.
While we are aware of respondent PCGG's legal mandate to recover ill-
gotten wealth, we will not sanction acts which violate the equal protection
guarantee and the right against self-incrimination and subvert the lawyer-client
confidentiality privilege.LibLex

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of

respondent Sandiganbayan (First Division) promulgated on March 18, 1992 and
May 21, 1992 are hereby ANNULLED and SET ASIDE.
Respondent Sandiganbayan is further ordered to execute petitioners Teodoro
D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Conception, Victor P.
Lazatin, Eduardo U. Escueta and Paraja G. Hayudini as parties-defendants
in SB Civil Case No. 0033 entitled "Republic of the Philippines v. Eduardo
Cojuangco, Jr., et al."
SO ORDERED.
Bellosillo, Melo and Francisco, JJ ., concur.
Vitug, J ., see separate opinion.
Padilla, Panganiban and Torres, Jr., JJ., concur in the result.
Davide, Jr. and Puno, JJ ., dissents.
Narvasa, C.J. and Regalado, J., join Justice Davide in his dissent.
Romero, J ., took no part. Related to PCGG Commissioner when Civil Case
No. 0033 was filed.
Hermosisima, Jr., J ., took no part. Participated
in Sandiganbayan deliberations thereon.
Mendoza, J ., is on leave.
 Separate Opinions
VITUG, J ., separate opinion:

The legal profession, despite all the unrestrained calumny hurled against it,
is still the noblest of professions. It exists upon the thesis that, in an orderly society
that is opposed to all forms of anarchy, it so occupies, as it should, an exalted
position in the proper dispensation of justice. In time, principle have evolved that
would help ensure its effective ministration. The protection of confidentiality of the
lawyer-client relationship is one, and it has been since an accepted firmament in
the profession. It allows the lawyer and the client to institutionalize a unique
relationship based on full trust and confidence essential in a justice system that
works on the basis of substantive and procedural due process. To be sure, the rule
is not without its pitfalls, and demands against it may be strong, but these problems
are, in the ultimate analysis, no more than mere tests of vigor that have made and
will make that rule endure.
I see in the case before us, given the attendant circumstances already
detailed in the ponencia, a situation of the Republic attempting to establish a case
not on what it perceives to be the strength of its own evidence but on what it could
elicit from a counsel against his client. I find it unreasonable for
the Sandiganbayan to compel petitioners to breach the trust reposed on them and
succumb to a thinly disguised threat of incrimination. cda

Accordingly, I join my other colleague who vote for the GRANT of the
petition.

DAVIDE, JR., J ., dissenting:

The impressive presentation of the case in the ponencia of Mr. Justice

Kapunan makes difficult the espousal of a dissenting view. Nevertheless, I do not
hesitate to express that view because I strongly feel that this Court must confine
itself to the key issue in this special civil action for certiorari, viz., whether or not
theSandiganbayan acted with grave abuse of discretion in not excluding the
defendants, the petitioners herein, from the Third Amended Complaint in Civil
Code No. 0033. That issue, unfortunately, has been simply buried under the
avalanche of authorities upholding the sanctity of lawyer-client relationship which
appears to me to be prematurely invoked.
From the undisputed facts disclosed by the pleadings and summarized in
the ponencia, I cannot find my way clear to a conclusion that
the Sandiganbayancommitted grave abuse of discretion in not acting favorably on
the petitioners' prayer in their Comment to the PCGG's Motion to Admit Third
Amended Complaint.
 The prerogative to determine who shall be made defendants in a civil case
is initially vested in the plaintiff, or the PCGG in this case. The control of the Court
comes in only when the issue of "interest" (§2,Rule 3, Rules of Court) as, e.g.,
whether an indispensable party has not been joined, or whether there is a
misjoinder of parties (§7, 8, and 9, Id.), is raised.llcd

In the case below, the PCGG decided to drop or exclude from the complaint
original co-defendant Raul Roco because he had allegedly complied with the
condition prescribed by the PCGG, viz., undertake that he will reveal the identity
of the principals for whom he acted as nominee/stockholder in the companies
involved in PCGG Case No. 0033. In short, there was an agreement or
compromise settlement between the PCGG and Roco. Accordingly, the PCGG
submitted a Third Amended Complaint without Roco as a defendant. No obstacle
to such an agreement has been insinuated. If Roco's revelation violated the
confidentiality of a lawyer-client relationship, he would be solely answerable
therefor to his principals/clients and, probably, to this Court in an appropriate
disciplinary action if warranted. There is at all no showing that Civil Case No. 0033
cannot further be proceeded upon or that any judgment therein cannot be binding
without Roco remaining as a defendant. Accordingly, the admission of the Third
Amended Complaint cannot be validly withheld by the Sandiganbayan.
Are the petitioners, who did not file a formal motion to be excluded but only
made the request to that effect as a rider to their Comment to the Motion to Admit
Third Amended Complaint, entitled to be excluded from the Third Amended
Complaint such that denial thereof would constitute grave abuse of discretion on
theSandiganbayan's part? To me, the answer is clearly in the negative.
The petitioners seek to be accorded the same benefit granted to or to be
similarly treated as Roco. Reason and logic dictate that they cannot, unless they
too would make themselves like Roco. Otherwise stated, they must first voluntarily
adopt for themselves the factual milieu created by Roco and must bind themselves
to perform certain obligations as Roco. It is precisely for this that in response to
the petitioners' comment on the aforementioned Motion to Admit Third Amended
Complaint the PCGG manifested that it is willing to accord the petitioners the
treatment it gave Roco provided they would do what Roco had done, that is,
disclose the identity of their principals/clients and submit documents substantiating
their claimed lawyer-client relationship with the said principals/clients, as well as
copies of deeds of assignments the petitioners executed in favor of their
principals/clients. The petitioners did not do so because they believed that
compliance thereof would breach the sanctity of their fiduciary duty in a lawyer-
client relationship.
It, indeed, appears, that Roco has complied with his obligation as a
consideration for his exclusion from the Third Amended Complaint.
The Sandiganbayan found that
 5. The PCGG is satisfied that defendant Roco has demonstrated
his agency and that Roco has apparently identified his principal, which
revelation could show the lack of action against him. This in turn has
allowed the PCGG to exercise its power both under the rules of agency
and under Section 5 of E.O. No. 14-1 in relation to the Supreme Court's
ruling in Republic v. Sandiganbayan (173 SCRA 72).
As a matter of fact, the PCGG presented evidence to substantiate Roco's
compliance. The ponencia itself so stated, thus:
. . . respondent PCGG presented evidence to substantiate
compliance by private respondent Roco of the conditions precedent to
warrant the latter's exclusion as party-defendant in PCGG Case No. 33,
to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco
dated May 24, 1989 reiterating a previous request for reinvestigation by
the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989
executed by private respondent Roco as Attachment to the letter
aforestated in (a); and (c) Letter of Roco, Bunag, and Kapunan Law
Offices dated September 21, 1988 to the respondent in behalf of private
respondent Roco originally requesting the reinvestigation and/or re-
examination of evidence by the PCGG it Complaint in PCGG Case No.
33. (Id., 5–6).
These are the pieces of evidence upon which the Sandiganbayan founded its
conclusion that the PCGG was satisfied with Roco's compliance. The
petitioners have not assailed such finding as arbitrary.
The ponencia's observation then that Roco did not refute the petitioners'
contention that he did not comply with his obligation to disclose the identity of his
principals is entirely irrelevant.
In view of their adamantine position, the petitioners did not, therefore, allow
themselves to be like Roco. They cannot claim the same treatment, much less
compel the PCGG to drop them as defendants, for nothing whatsoever. They have
no right to make such a demand for until they shall have complied with the
conditions imposed for their exclusion, they cannot be excluded except by way of
a motion to dismiss based on the grounds allowed by law (e.g., those enumerated
in §1, Rule 16, Rules of Court). The rule of confidentially under the lawyer-client
relationship is not a cause to exclude a party. It is merely a ground for
disqualification of a witness (§24, Rule 130, Rules of Court) and may only be
invoked at the appropriate time, i.e., when a lawyer is under compulsion to answer
as witness, as when, having taken the witness stand, he is questioned as to such
confidential communication or advice, or is being otherwise judicially coerced to
produce, through subpoenae duces tecumor otherwise, letters or other documents
containing the same privileged matter. But none of the lawyers in this case is being
required to testify about or otherwise reveal "any [confidential] communication
made by the client to him, or his advice given thereon in the course of, or with a
view to, professional employment." What they are being asked to do, in line with
their claim that they had done the acts ascribed to them in pursuance of their
professional relation to their clients, is to identify the latter to the PCGG and the
Court; but this, only if they so choose in order to be dropped from the complaint,
such identification being the condition under which the PCGG has expressed
willingness to exclude them from the action. The revelation is entirely optional,
discretionary, on their part. The attorney-client privilege is not therefor applicable.
Thus, the Sandiganbayan did not commit any abuse of discretion when it
denied the petitioners' prayer for their exclusion as party-defendants because they
did not want to abide with any of the conditions set by the PCGG. There would
have been abuse if the Sandiganbayan granted the prayer because then it would
have capriciously, whimsically, arbitrarily, and oppressively imposed its will on the
PCGG.
Again, what the petitioners want is their exclusion from the Third Amended
Complaint or the dismissal of the case insofar as they are concerned because
either they are invested with immunity under the principle of confidentially in a
lawyer-client relationship, or the claims against them in Civil Case No. 0033 are
barred by such principle.
Even if we have to accommodate this issue, I still submit that the lawyer-
client privilege provides the petitioners no refuge. They are sued as principal
defendants in Civil Case No. 0033, a case for the recovery of alleged ill-gotten
wealth. Conspiracy is imputed to the petitioners therein. In short, they are,
allegedly, conspirators in the commission of the acts complained of for being
nominees of certain parties.
Their inclusion as defendants is justified under Section 15, Article XI of the
Constitution — which provides that the right of the State to recover properties
unlawfully acquired by public officials or employees, from them or from their
nominees or transferees, shall not be barred by prescription, laches or estoppel —
and E.O. No. 1 of 28 February 1986, E.O. No. 2 of 12 March 1986, E.O. No. 14 of
7 May 1986, and the Rules and Regulations of the PCGG. Furthermore, §2,Rule
110 of the Rules of Court requires that the complaint or information should be
"against all persons who appear to be responsible for the offense involved."
Hypothetically admitting the allegations in the complaint in Civil Case No.
0033, I find myself unable to agree with the majority opinion that the petitioners are
immune from suit or that they have to be excluded as defendants, or that they
cannot be compelled to reveal or disclose the identity of their principals, all
because of the sacred lawyer-client privilege.
This privilege is well put in Rule 130 of the Rules of Court, to wit:
 §24. Disqualification by reason of privileged communication. —
The following persons cannot testify as to matters learned in confidence
in the following cases:
xxx xxx xxx
(b) An attorney cannot, without the consent of his client, be
examined as to any communication made by the client to him, or his
advice given thereon in the course of, or with a view to, professional
employment, nor can an attorney's secretary, stenographer, or clerk be
examined, without the consent of the client and his employer, concerning
any fact the knowledge of which has been acquired in such capacity.
The majority seeks to expand the scope of the Philippine rule on the lawyer-
client privilege by copious citations of American jurisprudence which includes in
the privilege the identity of the client under the exceptional situations narrated
therein. From the plethora of cases cited, two facts stand out in bold relief. Firstly,
the issue of privilege contested therein arose in grand jury proceedings on different
States, which are preliminary proceedings before the filing of the case in court, and
we are not even told what evidentiary rules apply in the said hearings. In the
present case, the privilege is invoked in the court where it was already filed and
presently pends, and we have the foregoing specific rules above-quoted.
Secondly, and more important, in the cases cited by the majority, the lawyers
concerned were merely advocating the cause of their clients but were not indicted
for the charges against their said clients. Here, the counsel themselves are co-
defendants duly charged in court as co-conspirators in the offenses charged. The
cases cited by the majority evidently do not apply to them.
Hence, I wish to repeat and underscore the fact that the lawyer-client
privilege is not a shield for the commission of a crime or against the prosecution of
the lawyer therefor. I quote, with emphases supplied, from 81 AMJUR 2d,
Witnesses, §393 to 395, pages 356–357:
§393. Effect of unlawful purpose.
The existence of an unlawful purpose prevents the attorney-client
privilege from attaching. The attorney-client privilege does not generally
exist where the representation is sought to further criminal or fraudulent
conduct either past, present, or future. Thus, a confidence received by an
attorney in order to advance a criminal or fraudulent purpose is beyond
the scope of the privilege.
Observation: The common-law rule that the privilege protecting confidential
communications between attorney and client is lost if the relation is abused by a client
who seeks legal assistance to perpetrate a crime or fraud has been codified.
§394. Attorney participation.
 The attorney-client privilege cannot be used to protect a client in
the perpetration of a crime in concert with the attorney, even where the
attorney is not aware of his client's purpose. The reason for the rule is that
it is not within the professional character of a lawyer to give advice on the
commission of crime. Professional responsibility does not countenance
the use of the attorney-client privilege as a subterfuge, and all
conspiracies, either active or passive, which are calculated to hinder the
administration of justice will vitiate the privilege. In some jurisdictions,
however, this exception to the rule of privilege is confined to such intended
acts in violation of the law as are mala in se, as distinguished from those
which are merely mala prohibita.
§395. Communication in contemplation of crime.
Communications between attorney and client having to do with the
client's contemplated criminal acts, or in aid or furtherance thereof, are not
covered by the cloak of privilege ordinarily existing in reference to
communications between attorney and client. But, the mere charge of
illegality, not supported by evidence, will not defeat the privilege; there
must be at least prima facie evidence that the illegality has some
foundation in fact.
Underhill also states:
There are many other cases to the same effect, for the rule
is prostitution of the honorable relation of attorney and client will not be
permitted under the guise of privilege, and every communication made to
an attorney by a client for a criminal purpose is a conspiracy or attempt at
a conspiracy which is not only lawful to divulge, but which the attorney
under certain circumstances may be bound to disclose at once in the
interest of justice. In accordance with this rule, where a forged will or other
false instrument has come into possession of an attorney through the
instrumentality of the accused, with the hope and expectation that the
attorney would take some action in reference thereto, and the attorney
does act, in ignorance of the true character of the instrument, there is no
privilege, inasmuch as full confidence has been withheld. The attorney is
then compelled to produce a forged writing against the client. The fact that
the attorney is not cognizant of the criminal or wrongful purpose, or,
knowing it, attempts to dissuade his client, is immaterial. The attorney's
ignorance of his client's intentions deprives the information of a
professional character as full confidence has been withheld. (H.C.
Underhill, A Treatise on the Law of Criminal Evidence, vol. 2 Fifth ed.
(1956), Sec. 332, pp. 836–837; italics mine).
125 AMERICAN LAW REPORTS ANNOTATED, 516–519, summarizes the
rationale of the rule excepting communications with respect to contemplated
criminal or fraudulent acts, thus:
c. Rationale of rule excepting communications with respect to
contemplated criminal or fraudulent act.
Various reasons have been announced as being the foundation for
the holdings that communications with respect to contemplated criminal
or fraudulent acts are not privileged.
The reason perhaps most frequently advanced is that in such
cases there is no professional employment, properly speaking. Standard
F. Ins. Co. v. Smithhart(1919) 183 Ky 679, 211 SW. 441, 5 ALR
972; Cummings v. Com. (1927) 221 Ky 301, 298 SW
943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van
Alstine(1885) 57 Mich 69, 23 NW 594; Hamil & Co. v. England (1892) 50
Mo App 338; Carney v. United R. Co. (1920) 205 Mo App 495, 226 SW
308; Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A
1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM Dec 287; People
ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed
without opinion in (1934) 242 App Div 611, 271 NYS
1059); Russell v. Jackson (1851) 9 Hare 387, 68 Eng Reprint
558; Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint
751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR; Re
Postlethwaite (1887) LR 35 Ch Div (Eng) 722.
In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court
said: "In order that the rule may apply, there must be both professional
confidence and professional employment, but if the client has a criminal
object in view in his communications with his solicitor one of these
elements must necessarily be absent. The client must either conspire with
his solicitor or deceive him. If his criminal object is avowed, the client does
not consult his adviser professionally, because it cannot be the solicitor's
business to further any criminal object. If the client does not avow his
object, he reposes no confidence, for the state of facts which is the
foundation of the supposed confidence does not exist. The solicitor's
advice is obtained by a fraud."
So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211
SW 441, 5 ALR 972, the court said: "The reason of the principle which
holds such communications not to be privileged is that it is not within the
professional character of a lawyer to give advice upon such subjects, and
that it is no part of the profession of an attorney or counselor at law to be
advising persons as to how they may commit crimes or frauds, or how
they may escape the consequences of contemplated crimes and frauds.
If the crime or fraud has already been committed and finished, a client
may advise with an attorney in regard to it, and communicate with him
freely, and the communications cannot be divulged as evidence without
the consent of the client, because it is a part of the business and duty of
those engaged in the practice of the profession of law, when employed
and relied upon for that purpose, to give advice to those who have made
infractions of the laws; and, to enable the attorney to properly advise and
to properly represent the client in court or when prosecutions are
threatened, it is conducive to the administration of justice that the client
shall be free to communicate to his attorney all the facts within his
knowledge, and that he may be assured that a communication made by
him shall not be used to his prejudice."
The protection which the law affords to communications between
attorney and client has reference to those which are legitimately and
properly within the scope of a lawful employment, and does not extend to
communications made in contemplation of a crime, or perpetration of a
fraud. Strong v. Abner (1937) 268 Ky 502, 105 SW (2d) 599.
The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594,
in holding not privileged communications to an attorney having for their
object the commission of a crime, said: "They then partake of the nature
of a conspiracy, or attempted conspiracy, and it is not only lawful to divulge
such communications, but under certain circumstances it might become
the duty of the attorney to do so. The interests of public justice require that
no such shield from merited exposure shall be interposed to protect a
person who takes counsel how he can safely commit a crime. The relation
of attorney and client cannot exist for the purpose of counsel in concocting
crimes." prcd

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287,

the court was of the opinion that there could be no such relation as that of
attorney and client, either in the commission of a crime, or in the doing of
a wrong by force or fraud to an individual, the privileged relation of attorney
and client existing only for lawful and honest purposes.
If the client consults the attorney at law with reference to the
perpetration of a crime, and they co-operate in effecting it, there is no
privilege, inasmuch as it is no part of the lawyer's duty to aid in crime —
he ceases to be counsel and becomes a
criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.
The court cannot permit it to be said that the contriving of a fraud
forms part of the professional business of an attorney or
solicitor. Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751.
If the client does not frankly and freely reveal his object and
intention as well as facts, there is not professional confidence, and
therefore no privilege. Matthewsv. Hoagland (NJ) supra. See to the same
effect Carney v. United R. Co. (1920) 205 Mo App 495, 226 SW 308.
There is no valid claim of privilege in regard to the production of
documents passing between solicitor and client, when the transaction
impeached is charged to be based upon fraud, that is the matter to be
investigated, and it is though better that the alleged privilege should suffer
than that honestly and fair dealing should appear to be violated with
impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.
In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited
in Reg. v. Cox (1884) LR 14 QB Div (Eng) 172 — CCR), the chief justice
said: "I believe the law is, and properly is, that if a party consults an
attorney, and obtains advice for what afterwards turns out to be the
commission of a crime or a fraud, that a party so consulting the attorney
has no privilege whatever to close the lips of the attorney from stating the
truth. Indeed, if any such privilege should be contended for, or existing, it
would work most grievous hardship on an attorney, who, after he had been
consulted upon what subsequently appeared to be a manifest crime and
fraud, would have his lips closed, and might place him in a very serious
position of being suspected to be a party to the fraud, and without his
having an opportunity of exculpating himself. . . .There is no privilege in
the case which I have suggested of a party consulting another, a
professional man, as to what may afterwards turn out to be a crime or
fraud, and the best mode of accomplishing it."
In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the
question of privilege as to communications between attorney and client
was not involved, the question directly involved being the competency of
a clerk in a business establishment to testify as to certain information
which he acquired while working in the establishment, the court strongly
approved of a view as stated arguendo for plaintiff,
in Annesley v. Anglesea (1743) 17 How St Tr (Eng) 1229, as follows: "I
shall claim leave to consider whether an attorney may be examined as to
any matter which came to his knowledge as an attorney. If he is employed
as an attorney in any unlawful or wicked act, his duty to the public obliges
him to disclose it; no private obligations can dispense with that universal
one which lies on every member of society to discover every design which
may be formed, contrary to the laws of society, to destroy the public
welfare. For this reason, I apprehend that if a secret which is contrary to
the public good, such as a design to commit treason, murder, or perjury,
comes to the knowledge of an attorney, even in a cause where he is
concerned, the obligation to the public must dispense with the private
obligation to the client."
The court in McMannus v. State (1858) 2 Head (Tenn) 213, said:
"It would be monstrous to hold that if counsel was asked and obtained in
reference to a contemplated crime that the lips of the attorney would be
sealed, when the facts might become important to the ends of justice in
the prosecution of crime. In such a case the relation cannot be taken to
exist. Public policy would forbid it."
And the court in Lanum v. Patterson (1909) 151 Ill App 36,
observed that this rule was not in contravention of sound public policy, but
on the contrary, tended to the maintenance of a higher standard of
 professional ethics by preventing the relation of attorney and client from
operating as a cloak for fraud.
Communications of a client to an attorney are not privileged if they
were a request for advice as to how to commit a fraud, it being in such a
case not only the attorney's privilege, but his duty, to disclose the facts to
the court. Will v. Tornabells & Co. (1907) 3 Porto Rico Fed Rep 125. The
court said: "We say this notwithstanding the comments of opposing
counsel as to the indelicacy of his position because of his being now on
the opposite side of the issue that arose as a consequence of the
communication he testifies about, and is interested in the cause to the
extent of a large contingent fee, as he confesses."
The object of prohibiting the disclosure of confidential
communications is to protect the client, and not to make the attorney an
accomplice or permit him to aid in the commission of a
crime. People vs. Petersen (1901) 60 App Div 118, NYS 941.
The seal of personal confidence can never be used to cover a
transaction which is in itself a crime. People v. Farmer (1909) 194 NY
251, 87 NE 457.
As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, §410 and
411, pages 366–368, states:
§410. Name or identity of client.
Disclosure of a client's identity is necessary proof of the existence
of the attorney-client relationship and is not privileged information. Thus,
the attorney-client privilege is inapplicable even though the information
was communicated confidentially to the attorney in his professional
capacity and, in some cases, in spite of the fact that the attorney may have
been sworn to secrecy, where an inquiry is directed to an attorney as to
the name or identity of his client. This general rule applies in criminal
cases, as well as in civil actions. Where an undisclosed client is a party to
an action, the opposing party has a right to know with whom he is
contending or who the real party in interest is, if not the nominal adversary.
§411. Disclosure of identity of client as breach of confidentiality.
The revelation of the identification of a client is not usually
considered privileged, except where so much has been divulged with
regard to legal services rendered or the advice sought, that to reveal the
client's name would be to disclose the whole relationship and confidential
communications. However, even where the subject matter of the attorney-
client relationship has already been revealed, the client's name has been
deemed privileged.
Where disclosure of the identity of a client might harm the client by
being used against him under circumstances where there are no
 countervailing factors, then the identity is protected by the attorney-client
privilege.
In criminal proceedings, a client's name may be privileged if
information already obtained by the tribunal, combined with the client's
identity, might expose him to criminal prosecution for acts subsequent to,
and because of, which he had sought the advice of his attorney.
Although as a general rule, the identity of a defendant in a criminal
prosecution is a matter of public record and, thus, not covered by the
attorney-client privilege, where the attorney has surrendered to the
authorities physical evidence in his possession by way of the attorney-
client relationship, the state must prove the connection between the piece
of physical evidence and the defendant without in any way relying on the
testimony of the client's attorney who initially received the evidence and,
thus, the attorney may not be called to the stand and asked to disclose
the identity of the client. However, an attorney cannot refuse to reveal the
identity of a person who asked him to deliver stolen property to the police
department, whether a bona fide attorney-client relationship exists
between them, inasmuch as the transaction was not a legal service or
done in the attorney's professional capacity.
Distinction: Where an attorney was informed by a male client that
his female acquaintance was possibly involved in [a] hit-and-run accident,
the identity of the female did not come within scope of attorney-client
privilege although the identity of the male client was protected. (italics
supplied)
WIGMORE explains why the identity of a client is not within the lawyer-client
privilege in this matter.
§2313. Identity of client or purpose of suit. — The identity of the
attorney's client or the name of the real party in interest will seldom be a
matter communicated in confidence because the procedure of litigation
ordinarily presupposes a disclosure of these facts. Furthermore, so far as
a client may in fact desire secrecy and may be able to secure action
without appearing as a party to the proceedings, it would be improper to
sanction such a wish. Every litigant is in justice entitled to know the identity
of his opponents. He cannot be obliged to struggle in the dark against
unknown forces. He has by anticipation the right, in later proceedings, if
desired, to enforce the legal responsibility of those who may have
maliciously sued or prosecuted him or fraudulently evaded his claim. He
has as much right to ask the attorney "Who fees your fee?" as to ask the
witness (966 supra). "Who maintains you during this trial?" upon the
analogy of the principle already examined (2298 supra), the privilege
cannot be used to evade a client's responsibility for the use of legal
process. And if it is necessary for the purpose to make a plain exception
to the rule of confidence, then it must be made. (Wigmore on Evidence,
vol. 8, (1961), p. 609; emphases supplied).
 In 114 ALR, 1322, we also find the following statement:
1. Name or identity.
As is indicated in 28 R.C.L. p. 563, it appears that the rule making
communications between attorney and client privileged from disclosure
ordinarily does not apply where the inquiry is confined to the fact of the
attorney's employment and the name of the person employing him, since
the privilege presupposes the relationship of client and attorney, and
therefore does not attach to its creation.
At the present stage of the proceedings below, the petitioners have not
shown that they are so situated with respect to their principals as to bring them
within any of the exceptions established by American jurisprudence. There will be
full opportunity for them to establish that fact at the trial where the broader
perspectives of the case shall have been presented and can be better appreciated
by the court. The insistence for their exclusion from the case is understandable,
but the reasons for the hasty resolution desired is naturally suspect.
We do not even have to go beyond our shores for an authority that the
lawyer-client privilege cannot be invoked to prevent the disclosure of a client's
identity where the lawyer and the client are conspirators in the commission of a
crime or a fraud. Under our jurisdiction, lawyers are mandated not to counsel or
abet activities aimed at defiance of the law or at lessening confidence in the legal
system (Rule 1.02, Canon, 1, Code of Professional Responsibility) and to employ
only fair and honest means to attain the lawful objectives of his client (Rule 19.01,
Canon 19, Id.). And under the Canons of Professional Ethics, a lawyer must
steadfastly bear in mind that his great trust is to be performed within and not
without the bounds of the law (Canon 15, Id.), that he advances the honor of his
profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance
with the strictest principles of moral law (Canon 32, Id.). These canons strip a
lawyer of the lawyer-client privilege whenever he conspires with the client in the
commission of a crime or a fraud.
I then vote to DENY, for want of merit, the instant petition.
Narvasa, C .J . and Regalado, J ., concur.

PUNO, J ., dissenting:

This is an important petition for certiorari to annul the resolutions of the

respondent Sandiganbayan denying petitioners' motion to be excluded from the
Complaint for recovery of alleged ill-gotten wealth on the principal ground that as
lawyers they cannot be ordered to reveal the identity of their client.
 First, we fast forward the facts. The Presidential Commission on Good
Government (PCGG) filed Civil Case No. 33 before the Sandiganbayan against
Eduardo M. Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as
co-defendants are the petitioners in the cases at bar — lawyers Teodoro Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose Concepcion, Rogelio A. Vinluan, Victor
P. Lazatin, Eduardo Escueta and Paraja Hayudini. Also included as a co-defendant
is lawyer Raul Roco, now a duly elected senator of the Republic. All co-defendants
were then partners of the law firm, Angara, Abello, Concepcion, Regala and Cruz
Law Offices, better known as the ACCRA Law Firm. The Complaint against
Cojuangco, Jr., and the petitioners alleged, inter alia, viz:
"xxx xxx xxx
"The wrongs committed by defendants acting singly or collectively
and in unlawful concert with one another, include the misappropriation and
theft of public funds, plunder of the nation's wealth, extortion, blackmail,
bribery, embezzlement and other acts of corruption, betrayal of public trust
and brazen abuse of power as more fully described (in the subsequent
paragraphs of the complaint), all at the expense and to the grave and
irreparable damage of Plaintiff and the Filipino people.
"Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C.
Concepcion, Teodoro D. Regala, Avelino V. Cruz, Rogelio A. Vinluan,
Eduardo U. Escueta, Paraja G. Hayudini and Raul S. Roco of Angara,
Concepcion, Cruz, Regala, and Abello law offices (ACCRA) plotted,
devised, schemed, conspired and confederated with each otherin setting
up, through the use of the coconut levy funds, the financial and corporate
framework and structures that led to the establishment of UCPB,
UNICOM, COCOLIFE, COCOMARK, CIC and more than twenty other
coconut levy funded corporations, including the acquisition of the San
Miguel Corporation shares and the institutionalization through presidential
directives of the coconut monopoly. Through insidious means and
machinations, ACCRA, using its wholly-owned investment arm, ACCRA
Investments Corporation, became the holder of approximately fifteen
million shares representing roughly 3.3% of the total outstanding capital
stock of UCPB as of 31 March 1987. This ranks ACCRA Investments
Corporation number 44 among the top 100 biggest stockholders of UCPB
which has approximately 1,400,000 shareholders. On the other hand,
corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of 7 June 1984."
In their Answer, petitioners alleged that the legal services offered and made
available by their firm to its clients include: (a) organizing and acquiring business
organizations, (b) acting as incorporators or stockholders thereof, and (c)
delivering to clients the corresponding documents of their equity holdings (i.e.,
certificates of stock endorsed in blank or blank deeds of trust or assignment). They
claimed that their activities were "in furtherance of legitimate lawyering."
 In the course of the proceedings in the Sandiganbayan, the PCGG filed a
Motion to Admit Third Amendment Complaint and the Third Amended Complaint
excluding lawyer Roco as party defendant. Lawyer Roco was excluded on the
basis of his promise to reveal the identity of the principals for whom he acted as
nominee/stockholder in the companies involved in the case.
The Sandiganbayan ordered petitioners to comment on the motion. In their
Comment, petitioners demanded that they be extended the same privilege as their
co-defendant Roco. They prayed for their exclusion from the complaint. PCGG
agreed but set the following conditions: (1) disclosure of the identity of their client;
(2) submission of documents substantiating their lawyer-client relationship; and (3)
submission of the deeds of assignment petitioners executed in favor of their client
covering their respective shareholdings. The same conditions were imposed on
lawyer Roco.
Petitioners refused to comply with the PCGG conditions contending that
the attorney-client privilege gives them the right not to reveal the identity of their
client. They also alleged that lawyer Roco was excluded though he did not in fact
reveal the identity of his clients. On March 18, 1992, the Sandiganbayan denied
the exclusion of petitioners in Case No. 33. It held:
"xxx xxx xxx
"ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e., their principal, and that
will be their choice.But until they do identify their clients, considerations of
whether or not the privilege claimed by the ACCRA lawyers exists cannot
even begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the existence andidentity
of the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein.
5. The PCGG is satisfied that defendant Roco has demonstrated
his agency and that Roco has apparently identified his principal, which
revelation could show the lack of cause against him. This in turn has
allowed the PCGG to exercise its power both under the rules of Agency
and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's
ruling in Republic v. Sandiganbayan (173 SCRA 72).
The PCGG has apparently offered to the ACCRA lawyers the same
conditions availed of by Roco; full disclosure in exchange for exclusion
from these proceedings (par. 7, PCGG's COMMENT dated November 4,
1991). The ACCRA lawyers have preferred not to make the disclosures
required by the PCGG.
 The ACCRA lawyers cannot, therefore, begrudge the PCGG for
keeping them as party defendants. In the same, vein, they cannot compel
the PCGG to be accorded the same treatment accorded to Roco.
Neither can this Court.
WHEREFORE, the Counter Motion dated October 8, 1991 filed by
the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same
treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack
of merit."
Sandiganbayan later denied petitioners' motion for reconsideration in its
resolutions dated May 21, 1988 and September 3, 1992. cdrep

In this petition for certiorari, petitioners contend:

"I
"The Honorable Sandiganbayan gravely abused its discretion in
subjecting petitioners ACCRA lawyers who undisputably acted as lawyers
in serving as nominee-stockholders, to the strict application of the law
agency.
"II
"The Honorable Sandiganbayan committed grave abuse of
discretion in not considering petitioners ACCRA lawyers and Mr. Roco as
similarly situated and, therefore, deserving of equal treatment.
1. There is absolutely no evidence that Mr. Roco had
revealed, or had undertaken to reveal, the identities of the client(s)
for whom he acted as nominee-stockholder.
2. Even assuming that Mr. Roco had revealed, or had
undertaken to reveal, the identities of the client(s), the disclosures
does not constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.
3. Respondent Sandiganbayan sanctioned favoritism and
undue preference in favor of Mr. Roco in violation of the equal
protection clause.
"III
"The Honorable Sandiganbayan committed grave abuse of
discretion in not holding that, under the facts of this case, the attorney-
client privilege prohibits petitioners ACCRA lawyers from revealing the
identity of their client(s) and the other information requested by the PCGG.
1. Under the peculiar facts of this case, the attorney-client
privilege includes the identity of the client(s).
 2. The factual disclosures required by the PCGG are not
limited to the identity of petitioners ACCRA lawyers' alleged
client(s) but extend to other privileged matters.
"IV
"The Honorable Sandiganbayan committed grave abuse of
discretion in not requiring that the dropping of party-defendants by the
PCGG must be based on reasonable and just grounds and with due
considerations to the constitutional right of petitioners ACCRA lawyers to
the equal protection of the law."
The petition at bar is atypical of the usual case where the hinge issue
involves the applicability of attorney-client privilege. It ought to be noted that
petitioners were included as defendants in Civil Case No. 33 as conspirators.
Together with Mr. Cojuangco, Jr., they are charged with having ". . . conspired and
confederated with each other in setting up, through the use of the coconut levy
funds, the financial and corporate framework and structures that led to the
establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CICI and more than
twenty other coconut levy funded corporations, including the acquisition of San
Miguel Corporation shares and the institutionalization through presidential
directives of the coconut monopoly." To stress, petitioners are charged with having
conspired in the commission of crimes. The issue of attorney-client privilege arose
when PCGG agreed to exclude petitioners from the complaint on condition they
reveal the identity of their client. Petitioners refused to comply and assailed the
condition on the ground that to reveal the identity of their client will violate the
attorney-client privilege.
It is thus necessary to resolve whether the Sandiganbayan committed grave
abuse of discretion when it rejected petitioners' thesis that to reveal the identity of
their client would violate the attorney-client privilege. The attorney-client privilege
is the oldest of the privileges for confidential communications known to the
common law. 1 For the first time in this jurisdiction, we are asked to rule whether
the attorney-client privilege includes the right not to disclose the identity of client.
The issue poses a trilemma for its resolution requires the delicate balancing of
three opposing policy considerations. One overriding policy consideration is the
need for courts to discover the truth for truth alone is the true touchstone of
justice. 2 Equally compelling is the need to protect the adversary system of justice
where truth is best extracted by giving a client broad privilege to confide facts to
his counsel. 3 Similarly deserving of sedulous concern is the need to keep inviolate
the constitutional right against self-incrimination and the right to effective
counsel in criminal litigations. To bridle at center the centrifugal forces of these
policy considerations, courts have followed the prudential principle that the
attorney-client privilege must not be expansively construed as it is in derogation of
the search for truth. 4 Accordingly, a narrow construction has been given to the
privilege and it has been consistently held that "these competing societal interests
demand that application of the privilege not exceed that which is necessary to
effect the policy considerations underlying the privilege, i.e., 'the privilege must be
upheld only in those circumstances for which it was created.'" 5
Prescinding from these premises, our initial task is to define in clear strokes
the substantive content of the attorney-client privilege within the context of the
distinct issues posed by the petition at bar. With due respect, I like to start by
stressing the irreducible principle that the attorney-client privilege can never be
used as a shield to commit a crime or a fraud. Communications to an attorney
having for their object the commission of a crime ". . . partake the nature of a
conspiracy, and it is not only lawful to divulge such communications, but under
certain circumstances it might become the duty of the attorney to do so. The
interests of public justice require that no such shield from merited exposure shall
be interposed to protect a person who takes counsel how he can safely commit a
crime. The relation of attorney and client cannot exist for the purpose of counsel in
concocting crimes." 6 In the well chosen words of retired Justice Quiason, a lawyer
is not a gun for hire. 7 I hasten to add, however, that a mere allegation that a lawyer
conspired with his client to commit a crime or a fraud will not defeat the
privilege. 8 As early as 1993, no less than the Mr. Justice Cardozo held
in Clark v. United States 9 that: "there are early cases apparently to the effect that
a mere charge of illegality, not supported by any evidence, will set the confidences
free . . . But this conception of the privilege is without support . . . To drive the
privilege away, there must be 'something to give colour to the charge';there must
be prima facie evidence that it has foundation in fact." In the petition at bar,
however, the PCGG appears to have relented on its original stance as spelled out
in its Complaint that petitioners are co-conspirators in crimes and cannot invoke
the attorney-client privilege. The PCGG has agreed to exclude petitioners from the
Complaint provided they reveal the identity of their client. In fine, PCGG has
conceded that petitioners are entitled to invoke the attorney-client privilege if they
reveal their client's identity.
Assuming then that petitioners can invoke the attorney-client privilege since
the PCGG is no longer proceeding against them as co-conspirators in crimes, we
should focus on the more specific issue of whether the attorney-client privilege
includes the right not to divulge the identity of a client as contended by the
petitioners. As a general rule, the attorney-client privilege does not include the right
of non-disclosure of client identity. The general rule, however, admits of well-
etched exceptionswhich the Sandiganbayan failed to recognize. The general rule
and its exceptions are accurately summarized in In re Grand Jury
Investigation, 10 viz:
"The federal forum is unanimously in accord with the general
rule that the identity of a client is, with limited exceptions, not within the
protective ambit of the attorney-client privilege. See: In re Grand Jury
Proceedings (Pavlick), 680 F.2d 1026, 1027 (5th Cir. 1982) (en banc); In
re Grand Jury Proceedings (Jones), 517 F.2d 666, 670-71 (5th Cir.
1975); In re Grand Jury Proceedings (Fine), 651 F.2d 199, 204 (5th Cir.
1981); Frank v. Tomlinson, 351 F.2d 384 (5th Cir. 1965), cert. denied,
382 U.S. 1028, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966); In re Grand Jury
Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982); In re Grand Jury
Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218
(9th Cir. 1979).
The Circuits have embraced various "exceptions" to the general
rule that the identity of a client is not within the protective ambit of the
attorney-client privilege. All such exceptions appear to be firmly grounded
in the Ninth Circuit's seminal decision in Baird v. Koerner, 279 F.2d 633
(9th Cir. 1960). In Baird the IRS received a letter from an attorney stating
that an enclosed check in the amount of $12,706 was being tendered for
additional amounts due from undisclosed taxpayers. When the IRS
summoned the attorney to ascertain the identity of the delinquent
taxpayers the attorney refused identification asserting the attorney-client
privilege. The Ninth Circuit, applying California law, adjudged that the
"exception" to the general rule as pronounced in Ex parte McDonough,
170 Cal. 230, 149 P.566 (1915) controlled:
'The name of the client will be considered privileged matter
where the circumstances of the case are such that the name of the
client is material only for the purpose of showing an
acknowledgment of guilt on the part of such client of the very
offenses on account of which the attorney was employed.'
Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer
was adjudged within this exception to the general rule. The Ninth circuit
has continued to acknowledge this exception.
'A significant exception to this principle of non-confidentiality
holds that such information may be privileged when the person
invoking the privilege is able to show that a strong possibility exists
that disclosure of the information would implicate the client in the
very matter for which legal advice was sought in the first case.'
In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach),
695 F.2d 363, 365 (9th Cir. 1982). Accord: United States v. Hodge and
Zweig, 548 F.2d 1347, 1353 (9th Cir. 1977); In re Grand Jury Proceedings
(Lawson), 600 F.2d 215, 218 (9th Cir. 1979); United States v. Sherman,
627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness (Salas),
695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be
most succinctly characterized as the "legal advice" exception, has also
been recognized by other circuits. See: In re Walsh, 623 F.2d 489, 495,
(7th Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531, 66 L.Ed.2d 291
(1980); In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir.
1980), cert. denied, 449 U.S. 1083, 101 S. Ct. 869-70, 66 L.Ed.2d 808
(1981). Since the legal advice exception is firmly grounded in the policy of
protecting confidential communications, this Court adopts and applies its
principles herein. See: In re Grand Jury Subpoenas Duces Tecum
(Marger/Merenbach), supra.
It should be observed, however, that the legal advice exception
may be defeated through a prima facie showing that the legal
representation was secured in furtherance of present or intended
continuing illegality, as where the legal representation itself is part of a
larger conspiracy. See: In re Grand Jury Subpoenas Decus Tecum
(Marger/Merenbach), supra, 695 F.2d at 365 n. 1; In re Walsh, 623 F.2d
489, 495 (7th Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531, 66 L.Ed.
2d 291 (1980): In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d
Cir. 1980); cert. denied, 449 U.S. 1083. 101 S. Ct. 869, 66 L. Ed. 2d 808
(1981); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th
Cir. 1979); United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir.
1971). See also: Clark v. United States, 289 U.S. 1, 15, 53, S. Ct. 465,
469, 77 L. Ed. 993 (1933); In re Grand Jury Proceedings (Pavlick), 680
F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).
Another exception to the general rule that the identity of a client is
not privileged arises where disclosure of the identity would be tantamount
to disclosing an otherwise protected confidential communication.
In Baird, supra, the Ninth Circuit observed:
'If the identification of the client conveys information which
ordinarily would be conceded to be part of the usual privileged
communication between attorney and client, then the privilege
should extend to such identification in the absence of other factors.'
Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated
the following exception:
To the general rule is an exception, firmly embedded as the
rule itself. The privilege may be recognized where so much of the
actual communication has already been disclosed that
identification of the client amounts to disclosure of a confidential
communication.
NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United
States v. Tratner, 511 F.2d 248, 252 (7th Cir. 1975); Colton v. United
States, 306 F.2d 633, 637 (2d Cir. 1962), cert. denied, 371 U.S. 951, 83
S.Ct. 505, 9 L.Ed.2d 499 1963); Tillotson v. Boughner, 350 F.2d 663, 666
(7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d Cir.
1944). See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed.
474 (1826). The Seventh Circuit has added to the Harvey exception the
following emphasized caveat:
The privilege may be recognized where so much of the
actual communication has already been disclosed [not necessarily
 by the attorney, but by independent sources as well] that
identification of the client [or of fees paid] amounts to disclosure of
a confidential communication.
United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976
(emphasis added). The Third Circuit, applying this exception, has
emphasized that it is the link between the client and the communication,
rather than the link between the client and the possibility of potential
criminal prosecution, which serves to bring the clients' identity within the
protective ambit of the attorney-client privilege. See: In re Grand Jury
Empanelled February 14, 1978 (Markowitz), 603 F.2d 469, 473 n.4 (3d
Cir. 1979). Like the "legal advice" exception, this exception is also firmly
rooted in principles of confidentiality.
Another exception, articulated in the Fifth Circuit's en
banc decision of In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026
(5th Cir. 1982 (en banc), is recognized when disclosure of the identity of
the client would provide the "last link" of evidence:
We have long recognized the general rule that matters
involving the payment of fees and the identity of clients are not
generally privileged. In re Grand Jury Proceedings, (United
States v. Jones), 517 F.2d 666 (5th Cir. 1975); see cases
collected id. at 670 n. 2. There we also recognized, however, a
limited and narrow exception to the general rule, one that obtains
when the disclosure of the client's identity by his attorney would
have supplied the last link in an existing chain of incriminating
evidence likely to lead to the client's indictment.'"
I join the majority in holding that the Sandiganbayan committed grave abuse
of discretion when it misdelineated the metes and bounds of the attorney-
client privilege by failing to recognize the exceptions discussed above.
Be that as it may, I part ways with the majority when it ruled that petitioners
need not prove they fall within the exceptions to the general rule. I respectfully
submit that the attorney-client privilege is not a magic mantra whose invocation will
ipso facto and ipso jure drape he who invokes it with its protection. Plainly put, it is
not enough to assert the privilege. 11 The person claiming the privilege or its
exceptions has the obligation to present the underlying facts demonstrating the
existence of the privilege. 12 When these facts can be presented only by revealing
the very information sought to be protected by the privilege, the procedure is for
the lawyer to move for an inspection of the evidence in an in
camera hearing. 13 The hearing can even be in camera and ex-parte. Thus, it has
been held that "a well-recognized means for an attorney to demonstrate the
existence of an exception to the general rule, while simultaneously preserving
confidentiality of the identity of his client, is to move the court for an in camera ex-
parte hearing. 14 Without the proofs adduced in these in camera hearings, the
Court has no factual basis to determine whether petitioners fall within any of the
exceptions to the general rule.
In the case at bar, it cannot be gainsaid that petitioners have not adduced
evidence that they fall within any of the above mentioned exceptions for as
aforestated, the Sandiganbayan did not recognize the exceptions, hence, the
order compelling them to reveal the identity of their client. In ruling that petitioners
need not further establish the factual basis of their claim that they fall within the
exceptions to the general rule, the majority held:
"The circumstances involving the engagement of lawyers in the
case at bench therefore clearly reveal that the instant case falls under at
least two exceptions to the general rule. First, disclosure of the alleged
client's name would lead to establish said client's connection with the very
fact in issue of the case, which is privileged information, because the
privilege, as stated earlier, protects the subject matter or the substance
(without which there would be no attorney-client relationship).
Furthermore, under the third main exception, revelation of the client's
name would obviously provide the necessary link for the prosecution to
build its case, where none otherwise exists. It is the link, in the word
of Baird, "that would inevitably form the chain of testimony necessary to
convict the (client) of a . . . crime."
I respectfully submit that the first and third exceptions relied upon by the
majority are not self-executory but need factual basis for their successful
invocation. The first exception as cited by the majority is ". . . where a strong
probability exists that revealing the client's name would implicate that client in
the very activity for which he sought the lawyer's advice." It seems to me evident
that "the very activity for which he sought the lawyer's advice" is a question of
fact which must first be established before there can be any ruling that the
exception can be invoked. The majority cites Ex Parte Enzor, 15 and US v. Hodge
and Zweig, 16 but these cases leave no doubt that the "very activity" for which the
client sought the advice of counsel was properly proved. In both cases, the "very
activity" of the clients reveal they sought advice on theircriminal activities. Thus,
in Enzor, the majority opinion states that the "unidentified client, an election official,
informed his attorney in confidence that he had been offered a bribe to violate
election laws or that he had accepted a bribe to that end." 17 In Hodge, the "very
activity" of the clients deals with illegal importation of drugs. In the case at bar,
there is no inkling whatsoever about the "very activity" for which the clients of
petitioners sought their professional advice as lawyers. There is nothing in the
records that petitioners were consulted on the "criminal activities" of their client.
The complaint did allege that petitioners and their client conspired to commit
crimes but allegations are not evidence.
So it is with the third exception which as related by the majority is "where
the government's lawyers have no case against an attorney's client unless, by
revealing the client's name, the said name would furnish the only link that would
form the chain of testimony necessary to convict an individual of a crime." 18 Again,
the rhetorical questions that answer themselves are: (1) how can we determine
that PCGG has "no case" against petitioners without presentation of evidence?
and (2) how can we determine that the name of the client is the only link without
presentation of evidence as to the other links? The case
of Baird vs. Koerner 19 does not support the "no need for evidence" ruling of the
majority. In Baird, as related by the majority itself, "a lawyer was consulted by the
accountants and the lawyer of certain undisclosed taxpayers regarding steps to be
taken to place the undisclosed taxpayers in a favorable position in case criminal
charges were brought against them by the US Internal Revenue Services (IRS). It
appeared that the taxpayers' returns of previous years were probably incorrect and
the taxes understated. 20 Once more, it is clear that theBaird court was informed
of the activity of the client for which the lawyer was consulted and
the activity involved probable violation of tax laws. Thus, the Court held:
"The facts of the instant case bring it squarely within that exception
to the general rule. Here money was received by the government, paid by
persons who thereby admitted they had not paid a sufficient amount in
income taxes some one or more years in the past. The names of the
clients are useful to the government for but one purpose — to ascertain
which taxpayers think they were delinquent, so that it may check the
records for that one year or several years. The voluntary nature of the
payment indicates a belief by the taxpayers that more taxes or interest or
penalties are due than the sum previously paid, if any. It indicates a feeling
of guilt for nonpayment of taxes, though whether it is criminal guild is
undisclosed. But it may well be the link that could form the chain of
testimony necessary to convict an individual of a federal crime. Certainly
the payment and the feeling of guilt are the reasons the attorney here
involved was employed — to advise his clients what, under the
circumstances, should be done."
In fine, the factual basis for the ruling in Baird was properly established by
the parties. In the case at bar, there is no evidence about the subject matter of the
consultation made by petitioners' client. Again, the records do not show that the
subject matter is criminal in character except for the raw allegations in the
Complaint. Yet, this is the unstated predicate of the majority ruling that revealing
the identity of the client ". . . would furnish the only link that would form the chain
of testimony necessary to convict an individual of a crime." The silent implication
is unflattering and unfair to petitioners who are marquee names in the legal
profession and unjust to their undisclosed client.
Finally, it ought to be obvious that petitioners' right to claim the attorney-
client privilege is resolutory of the Complaint against them, and hence should
be decided ahead and independently of their claim to equal protection of the
 law. Pursuant to the rule in legal hermeneutics that courts should not decide
constitutional issues unless unavoidable, I also respectfully submit that there
is no immediate necessity to resolve petitioners' claim to equal protection of
the law at this stage of the proceedings.
IN VIEW WHEREOF, I respectfully register a qualified dissent from the
majority opinion.
(Regala v. Sandiganbayan, G.R. Nos. 105938 & 108113, [September 20, 1996],
|||

330 PHIL 678-755)

EN BANC

[G.R. No. X92-1. July 30, 1979.]

PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM

NAME "SYCIP, SALAZAR, FELICIANO, HERNANDEZ & CASTILLO."
LUCIANO E. SALAZAR, FLORENTINO P, FELICIANO, BENILDO G.
HERNANDEZ. GREGORIO R. CASTILLO. ALBERTO P. SAN JUAN,
JUAN C. REYES, JR., ANDRES G. GATMAITAN, JUSTINO H.
CACANINDIN, NOEL A. LAMAN, ETHELWOLDO E. FERNANDEZ,
ANGELITO C. IMPERIO, EDUARDO R. CENIZA, TRISTAN A.
CATINDIG, ANCHETA K. TAN, and ALICE V. PESIGAN, petitioners.

IN THE MATTER OF THE PETITION FOR AUTHORITY TO CONTINUE

USE OF THE FIRM NAME "OZAETA, ROMULO, DE LEON, MABANTA
& REYES." RICARDO J. ROMULO, BENJAMIN M. DE LEON, ROMAN
MABANTA, JR., JOSE MA. REYES, JESUS S. J. SAYOC, EDUARDO
DE LOS ANGELES, and JOSE F. BUENAVENTURA, petitioners.

RESOLUTION

MELENCIO-HERRERA, J : p

Two separate Petitions were filed before this Court 1) by the surviving
partners of Atty. Alexander Sycip, who died on May 5, 1975, and 2) by the
surviving partners of Atty. Herminio Ozaeta, who died on February 14, 1976,
praying that they be allowed to continue using, in the names of their firms, the
names of partners who had passed away. In the Court's Resolution of
September 2, 1976, both Petitions were ordered consolidated. prLL

Petitioners base their petitions on the following arguments:

1. Under the law, a partnership is not prohibited from continuing its
business under a firm name which includes the name of a deceased
partner; in fact, Article 1840 of the Civil Code explicitly sanctions the practice
when it provides in the last paragraph that:
"The use by the person or partnership continuing the business of
the partnership name, or the name of a deceased partner as part thereof,
shall not of itself make the individual property of the deceased partner
liable for any debts contracted by such person or partnership." 1
2. In regulating other professions, such as accountancy and engineering,
the legislature has authorized the adoption of firm names without any restriction
as to the use, in such firm name, of the name of a deceased partner; 2 the
legislative authorization given to those engaged in the practice of accountancy
— a profession requiring the same degree of trust and confidence in respect of
clients as that implicit in the relationship of attorney and client — to acquire and
use a trade name, strongly indicates that there is no fundamental policy that is
offended by the continued use by a firm of professionals of a firm name which
includes the name of a deceased partner, at least where such firm name has
acquired the characteristics of a "trade name." 3
3. The Canons of Professional Ethics are not transgressed by the
continued use of the name of a deceased partner in the firm name of a law
partnership because Canon 33 of the Canons of Professional Ethics adopted
by the American Bar Association declares that:
". . . The continued use of the name of a deceased or former partner
when permissible by local custom, is not unethical, but care should be
taken that no imposition or deception is practiced through this use. . . ." 4
4. There is no possibility of imposition or deception because the deaths
of their respective deceased partners were well-publicized in all newspapers of
general circulation for several days; the stationeries now being used by them
carry new letterheads indicating the years when their respective deceased
partners were connected with the firm; petitioners will notify all leading national
and international law directories of the fact of their respective deceased
partners' deaths. 5
5. No local custom prohibits the continued use of a deceased partner's
name in a professional firm's name; 6 there is no custom or usage in the
Philippines, or at least in the Greater Manila Area, which recognizes that the
name of a law firm necessarily identifies the individual members of the firm. 7
 6. The continued use of a deceased partner's name in the firm name of
law partnerships has been consistently allowed by U.S. Courts and is an
accepted practice in the legal profession of most countries in the world. 8
The question involved in these Petitions first came under consideration
by this Court in 1953 when a law firm in Cebu (the Dean case) continued its
practice of including in its firm name that of a deceased partner, C.D. Johnston.
The matter was resolved with this Court advising the firm to desist from
including in their firm designation the name of C. D. Johnston, "who has long
been dead."
The same issue was raised before this Court in 1958 as an incident in G.
R. No. L-11964, entitled Register of Deeds of Manila vs. China Banking
Corporation. The law firm of Perkins & Ponce Enrile moved to intervene
as amicus curiae. Before acting thereon, the Court, in a Resolution of April 15,
1957, stated that it "would like to be informed why the name of Perkins is still
being used although Atty. E. A. Perkins is already dead." In a Manifestation
dated May 21, 1957, the law firm of Perkins and Ponce Enrile, raising
substantially the same arguments as those now being raised by petitioners,
prayed that the continued use of the firm name "Perkins & Ponce Enrile" be
held proper.
On June 16, 1958, this Court resolved:
"After carefully considering the reasons given by Attorneys Alfonso
Ponce Enrile and Associates for their continued use of the name of the
deceased E. G. Perkins, the Court found no reason to depart from the
policy it adopted in June 1953 when it required Attorneys Alfred P. Deen
and Eddy A. Deen of Cebu City to desist from including in their firm
designation, the name of C. D. Johnston, deceased. The Court believes
that, in view of the personal and confidential nature of the relations
between attorney and client and the high standards demanded in the
canons of professional ethics, no practice should be allowed which
even in a remote degree could give rise to the possibility of deception.
Said attorneys are accordingly advised to drop the name "PERKINS" from
their firm name."
Petitioners herein now seek a re-examination of the policy thus far
enunciated by the Court.
The Court finds no sufficient reason to depart from the rulings thus laid
down.
A. Inasmuch as "Sycip, Salazar, Feliciano, Hernandez and Castillo" and
"Ozaeta, Romulo, De Leon, Mabanta and Reyes" are partnerships, the
use in their partnership names of the names of deceased partners will run
counter to Article 1815 of the Civil Code which provides:
 "Art. 1815. Every partnership shall operate under a firm name,
which may or may not include the name of one or more of the partners.
"Those who, not being members of the partnership include their
names in the firm name, shall be subject to the liability of a partner."
It is clearly tacit in the above provision that names in a firm name of a
partnership must either be those of living partners and, in the case of non-
partners, should be living persons who can be subjected to liability. In fact,
Article 1825 of the Civil Code prohibits a third person from including his
name in the firm name under pain of assuming the liability of a partner. The
heirs of a deceased partner in a law firm cannot be held liable as the old
members to the creditors of a firm particularly where they are non-lawyers.
Thus, Canon 34 of the Canons of Professional Ethics "prohibits all agreement
for the payment to the widow and heirs of a deceased lawyer of a percentage,
either gross or net, of the fees received from the future business of the
deceased lawyer's clients, both because the recipients of such division are not
lawyers and because such payments will not represent service or responsibility
on the part of the recipient." Accordingly, neither the widow nor the heirs can
be held liable for transactions entered into after the death of their lawyer-
predecessor. There being no benefits accruing, there can be no corresponding
liability.
LLpr

Prescinding the law, there could be practical objections to allowing the

use by law firms of the names of deceased partners. The public relations value
of the use of an old firm name can tend to create undue advantages and
disadvantages in the practice of the profession. An able lawyer without
connections will have to make a name for himself starting from scratch. Another
able lawyer, who can join an old firm, can initially ride on that old firm's
reputation established by deceased partners.
B. In regards to the last paragraph of Article 1840 of the Civil Code cited
by petitioners, supra, the first factor to consider is that it is within Chapter 3 of
Title IX of the Code entitled "Dissolution and Winding Up." The Article primarily
deals with the exemption from liability in cases of a dissolved partnership, of
the individual property of the deceased partner for debts contracted by the
person or partnership which continues the business using the partnership
name or the name of the deceased partner as part thereof. What the law
contemplates therein is a hold-over situation preparatory to formal
reorganization.
Secondly, Article 1840 treats more of a commercial partnership with a
good will to protect rather than of a professionalpartnership, with no saleable
good will but whose reputation depends on the personal qualifications of its
individual members. Thus, it has been held that a saleable goodwill can exist
only in a commercial partnership and cannot arise in a professional partnership
consisting of lawyers. 9
"As a general rule, upon the dissolution of a commercial
partnership the succeeding partners or parties have the right to carry on
the business under the old name, in the absence of a stipulation
forbidding it, (s)ince the name of a commercial partnership is a partnership
asset inseparable from the good will of the firm . . .." (60 Am Jur 2d, s 204,
p. 115) (Emphasis supplied)
On the other hand,
". . . a professional partnership the reputation of which depends on
the individual skill of the members, such as partnerships of attorneys or
physicians, has no good will to be distributed us a firm asset on its
dissolution, however intrinsically valuable such skill and reputation may
be, especially where there is no provision in the partnership agreement
relating to good will as an asset. . . ." (ibid, s 203, p. 115) (Emphasis
supplied).
C. A partnership for the practice of law cannot be likened to partnerships
formed by other professionals or for business. For one thing, the law on
accountancy specifically allows the use of a trade name in connection with the
practice of accountancy. 10
"A partnership for the practice of law is not a legal entity. It is a mere
relationship or association for a particular purpose. . . . It is not a partnership
formed for the purpose of carrying on trade or business or of holding
property." 11 Thus, it has been stated that "the use of a nom de plume, assumed
or trade name in law practice is improper." 12
"The usual reason given for different standards of conduct being
applicable to the practice of law from those pertaining to business is that
the law is a 'profession.' . . .
"Dean Pound, in his recently published contribution to the Survey
of the Legal Profession, (The Lawyer from Antiquity to Modern Times, p.
5) defines a profession as 'a group of men pursuing a learned art as a
common calling in the spirit of public service, — no less a public service
because it may incidentally be a means of livelihood.'
xxx xxx xxx
"Primary characteristics which distinguish the legal profession from
business are:
1. A duty of public service, of which the emolument is a by-product,
and in which one may attain the highest eminence without making much
money.
 2. A relation as an 'officer of court' to the administration of justice
involving thorough sincerity, integrity, and reliability.
3. A relation to clients in the highest degree fiduciary.
4. A relation to colleagues at the bar characterized by candor,
fairness, and unwillingness to resort to current business methods of
advertising and encroachment on their practice, or dealing directly with
their clients." 13
"The right to practice law is not a natural or constitutional right but is in the
nature of a privilege or franchise. 14 It is limited to persons of good moral
character with special qualifications duly ascertained and certified. 15 The right
does not only presuppose in its possessor integrity, legal standing and
attainment, but also the exercise of a special privilege, highly personal and
partaking of the nature of a public trust." 16
D. Petitioners cited Canon 33 of the Canons of Professional Ethics of the
American Bar Association 17 in support of their petitions.
It is true that Canon 33 does not consider as unethical the continued use
of the name of a deceased or former partner in the firm name of a law
partnership when such a practice is permissible by local custom but the Canon
warns that care should be taken that no imposition or deception is practiced
through this use.
It must be conceded that in the Philippines, no local custom permits or
allows the continued use of a deceased or former partner's name in the firm
names of law partnerships. Firm names, under our custom, identify the more
active and/or more senior members or partners of the law firm. A glimpse at the
history of the firms of petitioners and of other law firms in this country would
show how their firm names have evolved and changed from time to time as the
composition of the partnership changed.
"The continued use of a firm name after the death of one or more
of the partners designated by it is proper only where sustained by local
custom and not where by custom this purports to identify the active
members. . . .
"There would seem to be a question, under the working of the
Canon, as to the propriety of adding the name of a new partner and at the
same time retaining that of a deceased partner who was never a partner
with the new one." (H.S. Drinker, op. cit., supra, at pp. 207-208)
(Emphasis supplied)
The possibility of deception upon the public, real or consequential, where
the name of a deceased partner continues to be used cannot be ruled out. A
personin search of legal counsel might be guided by the familiar ring of a
distinguished name appearing in a firm title.
 E. Petitioners argue that U.S. Courts have consistently avowed the
continued use of a deceased partner's name in the firm name of law
partnerships. But that is so because it is sanctioned by custom.
In the case of Mendelsohn v. Equitable Life Assurance Society (33
N.Y.S. 2d 733) which petitioners Salazar, et al. quoted in their memorandum,
the New York Supreme Court sustained the use of the firm name Alexander &
Green even if none of the present ten partners of the firm bears either
name because the practice was sanctioned by custom and did not offend any
statutory provision or legislative policy and was adopted by agreement of the
parties The Court stated therein:
"The practice sought to be proscribed has the sanction of
custom and offends no statutory provision or legislative policy. Canon 33
of the Canons of Professional Ethics of both the American Bar Association
and the New York State Bar Association provides in part as follows: 'The
continued use of the name of a deceased or former partner, when
permissible by local custom is not unethical, but care should be taken that
no imposition or deception is practiced through this use.' There is no
question as to local custom. Many firms in the city use the names of
deceased members with the approval of other attorneys, bar associations
and the courts. The Appellate Division of the First Department has
considered the matter and reached the conclusion that such practice
should not be prohibited. (Emphasis supplied)
xxx xxx xxx
"Neither the Partnership Law nor the Penal Law prohibits the
practice in question. The use of the firm name herein is also sustainable
by reason of agreement between the partners." 18
Not so in this jurisdiction where there is no local custom that sanctions
the practice. Custom has been defined as a rule of conduct formed by repetition
of acts, uniformly observed (practiced) as a social rule, legally binding and
obligatory. 19 Courts take no judicial notice of custom. A custom must be proved
as a fact, according to the rules of evidence. 20 A local custom as a source of
right cannot be considered by a court of justice unless such custom is properly
established by competent evidence like any other fact. 21 We find such proof of
the existence of a local custom. and of the elements requisite to constitute the
same, wanting herein. Merely because something is done as a matter of
practice does not mean that Courts can rely on the same for purposes of
adjudication as a juridical custom. Juridical custom must be differentiated from
social custom. The former can supplement statutory law or be applied in the
absence of such statute. Not so with the latter.
Moreover, judicial decisions applying or interpreting the laws form part of
the legal system. 22 When the Supreme Court in the Deen and Perkins cases
issued its Resolutions directing lawyers to desist from including the names of
 deceased partners in their firm designation, it laid down a legal rule against
which no custom or practice to the contrary, even if proven, can prevail. This is
not to speak of our civil law which clearly ordains that a partnership is dissolved
by the death of any partner. 23 Customs which are contrary to law, public order
or public policy shall not be countenanced. 24
The practice of law is intimately and peculiarly related to the
administration of justice and should not be considered like an ordinary "money-
making trade."
". . . It is of the essence of a profession that it is practiced in a spirit
of public service. 'A trade' . . . 'aims primarily at personal gain; a profession
at the exercise of powers beneficial to mankind.' If, as in the era of wide
free opportunity, we think of free competitive self assertion as the highest
good, lawyer and grocer and farmer may seem to be freely competing with
their fellows in their calling in order each to acquire as much of the world's
good as he may within the limits allowed him by law. But the member of a
profession does not regard himself as in competition with his professional
brethren. He is not bartering his services as is the artisan nor exchanging
the products of his skill and learning as the farmer sells wheat or corn.
There should be no such thing as a lawyers or physicians' strike. The best
service of the professional man is often rendered for no equivalent or for
a trifling equivalent and it is his pride to do what he does in a way worthy
of his profession even if done with no expectation of reward. This spirit of
public service in which the profession of law is and ought to be exercised
is a prerequisite of sound administration of justice according to law. The
other two elements of a profession, namely, organization and pursuit of a
learned art have their justification in that they secure and maintain that
spirit." 25
In fine, petitioners' desire to preserve the identity of their firms in the eyes
of the public must bow to legal and ethical impediments.
ACCORDINGLY, the petitions filed herein are denied and petitioners
advised to drop the names "SYCIP" and "OZAETA" from their respective firm
names. Those names may, however, be included in the listing of individuals
who have been partners in their firms indicating the years during which they
served as such. prLL

SO ORDERED.
Teehankee, Concepcion Jr., Santos, Fernandez, Guerrero and De
Castro, JJ., concur.
Fernando, C.J, and Abad-Santos, J., took no part.
CERTIFICATION
FERNANDO, C.J. : p
 The petitions are denied, as there are only four votes for granting them,
seven of the .Justices being of the contrary view, as explained in the plurality
opinion of Justice Ameurfina Melencio-Herrera. It is out of delicadeza that the
undersigned did not participate in the disposition of these petitions, as the law
office of Sycip, Salazar, Feliciano, Hernandez and Castillo started with the
partnership of Quisumbing, Sycip, and Quisumbing, the senior partner, the late
Ramon Quisumbing, being the father-in-law of the undersigned, and the most
junior partner then, Norberto J. Quisumbing, being his brother-in-law. For the
record, the undersigned wishes to invite the attention of all concerned, and not
only of petitioners, to the last sentence of the opinion of Justice Ameurfina
Melencio-Herrera: 'Those names [Sycip and Ozaeta] may, however, be
included in the listing of individuals who have been partners in their firms
indicating the years during which they served as such." It represents a happy
compromise.

Separate Opinions
AQUINO, J., dissenting:

I dissent. The fourteen members of the law firm, Sycip, Salazar,

Feliciano, Hernandez & Castillo, in their petition of June 10, 1975, prayed for
authority to continue the use of that firm name, notwithstanding the death of
Attorney Alexander Sycip on May 5, 1975 (May he rest in peace). He was the
founder of the firm which was originally known as the Sycip Law Office.
On the other hand, the seven surviving partners of the law firm, Ozaeta,
Romulo, De Leon, Mabanta & Reyes, in their petition of August 13, 1976,
prayed that they be allowed to continue using the said firm name
notwithstanding the death of two partners, former Justice Roman Ozaeta and
his son, Herminio, on May 1, 1972 and February 14, 1976, respectively.
They alleged that the said law firm was a continuation of the Ozaeta Law
Office which was established in 1957 by Justice Ozaeta and his son and that,
as to the said law firm, the name Ozaeta has acquired an institutional and
secondary connotation.
Article 1840 of the Civil Code, which speaks of the use by the partnership
of the name of a deceased partner as part of the partnership name, is cited to
justify the petitions. Also invoked is the canon that the continued use by a law
firm of the name of a deceased partner, "when permissible by local custom, is
not unethical" as long as "no imposition or deception is practiced through this
use" (Canon 33 of the Canons of Legal Ethics).
 I am of the opinion that the petition may be granted with the condition that
it be indicated in the letterheads of the two firms (as the case may be) that
Alexander Sycip, former Justice Ozaeta and Herminio Ozaeta are dead or the
period when they served as partners should be stated therein.
Obviously, the purpose of the two firms in continuing the use of the
names of their deceased founders is to retain the clients who had customarily
sought the legal services of Attorneys Sycip and Ozaeta and to benefit from the
goodwill attached to the names of those respected and esteemed law
practitioners. That is a legitimate motivation.
The retention of their names is not illegal per se. That practice was
followed before the war by the law firm of James Ross. Notwithstanding the
death of Judge Ross the founder of the law firm of Ross, Lawrence, Selph and
Carrascoso, his name was retained in the firm name with an indication of the
year when he died. No one complained that the retention of the name of Judge
Ross in the firm name was illegal or unethical.
Barredo, Makasiar and Antonio, JJ., concur.
(In Re: Sycip, Salazar, Feliciano, Hernandez & Castillo, G.R. No. X92-1
|||

(Resolution), [July 30, 1979])

EN BANC

[A.C. No. 936 . July 25, 1975.]

FERMINA LEGASPI DAROY, LYDIA LEGASPI and

AGRIPINO LEGASPI, complainants, vs. ATTORNEY RAMON
CHAVES LEGASPI, respondent.

SYNOPSIS

Respondent, as counsel of complainants in an intestate proceedings,

received P4,000.00 in their behalf. Instead of turning over the amount to his
clients, respondent misappropriated the money. Several demands were made
for respondent to pay complainants but to no avail. Hence, they filed a
complaint for disbarment.
The Court ruled that a member of the bar who converts the money of his
clients to his own benefits through false pretenses is guilty of deceit,
malpractice and gross misconduct in his office of lawyer.
Respondent disbarred.
 SYLLABUS

1. ATTORNEYS; OBLIGATION TO REPORT PROMPTLY MONEY OF

CLIENTS IN HIS POSSESSION. — A lawyer, under his oath, pledges himself
not to delay any man for money or malice and is bound to conduct himself with
all good fidelity to his clients. He is obligated to report promptly the money of
his clients that has come into his possession. He should not commingle it with
his private property or use it for his personal purposes without his client's
consent. He should maintain a reputation for honesty and fidelity to private trust
(Pars. 11 and 32, Canons of Legal Ethics). Money collected by a lawyer in
pursuance of a judgment in favor of his clients held in trust and must be
immediately turned over to them.
2. ID.; ID.; UNJUSTLY RETAINING CLIENT'S MONEY IS
PUNISHABLE. — Section 25, Rule 138 of the Rules of Court provides that
when an attorney unjustly retains in his hands money of his client after it has
been demanded, he may be punished for contempt as an officer of the court
who has misbehaved in his official transactions and he is liable to a criminal
prosecution.
3. ID.; ID.; CONVERSION OF CLIENT'S MONEY CONSTITUTES
DECEIT, MALPRACTICE AND GROSS MISCONDUCT. — The conversion of
funds entrusted to an attorney is a gross violation of general morality as well as
professional ethic. It impairs public confidence in the legal profession, and
deserves severe punishment.
4. ID.; DISBARMENT; GROUNDS THEREFOR. — A lawyer may be
disbarred for any deceit, malpractice or other gross misconduct in his office as
attorney or for any violation of the lawyer's oath. (Sec. 27, rule 138 of the Rules
of Court)
5. ID.; RELATION BETWEEN ATTORNEY AND CLIENT. — The relation
between an attorney and his client is highly fiduciary in its nature and of a very
delicate, exacting and confidential character, requiring a high degree of fidelity
and good faith. In view of that special relationship, lawyers are bound to
promptly account for money or property received by them on behalf of their
clients and failure to do so constitutes professional misconduct. The fact that a
lawyer has a lien for fees on money in his hands collected for his clients does
not relieve him from the duty of promptly accounting for the funds received.
6. ID.; ID.; CONVERSION OF CLIENT'S MONEY THROUGH FALSE
PRETENSES CONSTITUTE MALPRACTICE. — A member of the bar who
converts the money of his client to his own benefits through false pretenses is
guilty of deceit, malpractice and gross misconduct in his office of lawyer. The
attorney who violates his oath of office betrays the confidence reposed in him
by a client and practises deceit, cannot be permitted to continue as a law
 practitioner. Not alone has he degraded himself but as an unfaithful lawyer he
has besmirched the fair name of an honorable profession.
7. ID.; ID.; INSTANT CASE. — Where a lawyer misappropriated the
funds of his client and evaded payment thereof through manufactured defenses
and repeatedly failed to appear at the investigation when sued causing the
proceeding to drag on for a long time, he is guilty of deceit, malpractice and
professional misconduct which is a sufficient ground for disbarment.

DECISION

AQUINO, J : p

Fermina Legaspi-Daroy, Lydia Legaspi-Acha and Agripino Legaspi of

Iligan City, in a verified complaint dated March 10, 1970, charged Attorney
Ramon ChavesLegaspi of Cagayan de Oro City with malpractice for having
misappropriated the sum of four thousand pesos which he had collected for
them. They prayed that the respondent be disbarred. 1 (He was 59 years old in
1974. He passed the 1954 bar examinations with a rating of 75.75%).
The evidence shows that the complainants hired the respondent in May,
1962 to represent them in the intestate proceeding for the settlement of the
estate of the spouses Aquilino Gonzaga and Paz Velez-Gonzaga. The
complainants, together with their brother, Vivencio, who was abroad, were
adjudged as one of the six groups of heirs of the late Gonzaga spouses, their
deceased mother, Consuelo Gonzaga-Legaspi, being a daughter of the
spouses. The heirs in a joint petition dated April 11, 1969, which the respondent
signed as counsel for the complainants, agreed that the coconut land left by the
decedents would be divided into six equal parts, that the administrator be
authorized to sell the said land, and that, after payment of the obligations of the
estate, the net proceeds would be distributed among the six groups of heirs.
The probate court approved that agreement in its order of April 29, 1969 (Spec.
Proc. No. 640 of the Misamis Oriental CFI, Exh. A).
The land was sold. Fermina Legaspi-Daroy came to know of the sale only
when the respondent wrote a note dated November 28, 1969 to her father,
TeofiloLegaspi, wherein he stated "that the money we have deposited may be
withdrawn on December 8, 1969 at 9:00 o'clock". The respondent advised
Teofilo Legaspi to see him on that date so that the money could he withdrawn
(Exh. B).
The complainants were not able to get the money on December 8
because the respondent on December 7 sent to Mrs. Daroy a telegram
countermanding his prior advice and directing her to go to Cagayan de Oro City
on December 10, a Wednesday, to receive the money (Exh. C). On December
9, a certain Atty. Sugamo sent a handwritten note to Mrs. Daroy advising her
not to go to Cagayan de Oro City on December 10 because according to the
respondent "his postdated checks can be paid and/or collected either Thursday
or Friday yet" (Exh. D).
In the afternoon of that same day, December 9, Mrs. Daroy received
another note, this time from the respondent himself, "Cousin Ramon". The note
contained the disturbing intelligence that Mrs. Daroy's "Cousin Ramon" had
withdrawn the money amounting to P4,000 and had spent it. The letter, a sort
of extra-judicial confession or mea culpa on respondent's part, reads as follows
(Exh. E):
"Dear Fermina,
I wrote this letter with the hope that you will understand me.
I have received P4,000.00 our share in the case filed and is now in my
custody.
Previous (sic) I have a case wherein I was forced to use our money to
solve my problem.
Now to pay the amount I have used, I sold my jeep to Mr. Ricarte Gorospe,
an Employee of the BIR here in Cag. But I am not paid as yet. So, I am
waiting as he will pay at 3:00 p.m. today and it's close as I have promised
to give it on the 10th, I mean our money.
Kindly help me, defer the giving you of the sum or at least until Thursday
or Friday, I bring it to you.
I know my responsibility on this matter.
Thanks.
Cousin
Ramon"
It turned out that on October 20, 1969 the respondent, as "counsel for
Fermina Daroy et al.", received from Deputy Provincial Sheriff Jose V. Yasay
the said sum of P4,000 as "one (1) share in participation of my clients
Fermina Daroy et al. in connection with (the) order of Judge B. K. Gorospe" in
the aforementioned intestate proceeding. The respondent signed a receipt for
that amount (Exh. L-1). The sheriff paid to Attorneys Angel Quimpo, Leovigildo
Tandog, Jr. and Teogenes Velez, Jr. the respective shares of the other groups
of heirs also in the sum of P4,000 for each group. Those lawyers turned over
the amounts withdrawn to their respective clients (Exh. L).
 It is evident that the respondent, in writing on November 28, 1969 to
Teofilo Legaspi that the money deposited could be withdrawn on December 8,
1969, acted in bad faith. He had already withdrawn the money before that date.
He concealed that fact from the complainants.
Before the disbarment complaint was filed several demands were made
upon the respondent to pay to the complainants the amount which he had
misappropriated. He repeatedly broke his promises to make payment. As
complainants' patience was already exhausted, they filed their complaint for
disbarment on March 13, 1970. 2
Atty. Alfredo R. Busico, the lawyer for the complainants, in a letter to this
Court's Clerk of Court dated May 26, 1970, expressed the hope that preferential
attention would be given to the case. He said that he had "reliable information
from Cagayan de Oro City" that the respondent "has been bragging that nothing
will happen to this case" (p. 20, Rollo).
The case was referred to the Solicitor General for investigation, report
and recommendation. In 1973 he requested the City Fiscal of Iligan City to
conduct the investigation. 3 After the investigation was finished, the case was
set for hearing. The respondent did not appear at the hearing.
Respondent Legaspi in his testimony admitted that he received the said
sum of P4,000 as shown in the receipt, Exhibit D dated October 20, 1969. He
said that after receiving it he immediately wired Teofilo Legaspi at Iligan City to
see him (the respondent) in his office at Cagayan de Oro City so that
Teofilo Legaspi could tell him "the proper disposal" of that amount.
Teofilo Legaspi supposedly went to see him on October 21, 1969 and at
their conference they supposedly agreed that the sum of P700 would be
deducted from the P4,000 to cover the expenses which he (Legaspi) described
as "expenses involved from the parties litigants, expenses seeking evidence
and other expenses relevant to the case" and "major expenses" in the case
(sic); that his attorney's fees would be equivalent "to a share of the petitioners",
an agreement which was later placed in formal form (referring
to 1968 extrajudicial settlement attached to his answer); that the balance of
P3,300 would be divided into six equal parts (six because of the
four Legaspi children, the father Teofilo Legaspi and the lawyer Ramon
C. Legaspi); that under such division each participant would receive P412 each
(P3,300 divided by six gives a quotient of P550 not P412), and that he gave
Teofilo the sum of P412. The respondent did not present any receipt to prove
that alleged payment.
He said that at first Teofilo Legaspi told him to keep the share of
Vivencio Legaspi, who was abroad, but at the end of October or the first week
of November, 1969 Teofilo got from him (the respondent) Vivencio's share.
Again, the respondent did not ask Teofilo to sign a receipt for Vivencio's share.
After paying the shares of Teofilo and Vivencio, the balance of the amount left
in respondent's possession amounted to P2,476.
According to respondent's version, the complainants "refused
consistently to receive" the said balance from him because they wanted the full
amount of P4,000. He said that he had already paid to them the sum of P2,000
and that only the sum of P476 was left in his custody. He did not present any
receipt to prove the alleged payment of P2,000. He said that he could deliver
that amount of P476 to the complainants.
Mrs. Daroy, in rebuttal, denied that her father, Teofilo Legaspi, received
the sum of P412 from the respondent. She said that her father never went to
Cagayan de Oro City to confer with the respondent. She said that there was no
agreement that the respondent would participate like an heir in the partition of
the sum of P4,000. She denied that the respondent offered to pay her and her
brother and sister the sum of P2,746. She denied that the respondent paid to
the complainants P2,000.
After a careful examination of the evidence, we find that respondent's
testimony cannot be given any credence. In his memorandum he stated that
after he received from the sheriff "on October 29, 1969" the sum of P4,000, he
"immediately wired" his kinsman, Teofilo Legaspi, to come to Cagayan de Oro
City and that Teofilo "came on October 21, 1969". Respondent meant October
20, 1969, the date of the receipt, Exhibit L-1.
The truth is that he did not send any such wire. The statement of the
sheriff and respondent's office clerk in their affidavits of March 18, 1975 that
such a wire was sent is false. What he sent to Teofilo Legaspi was a
handwritten note dated November 28, 1969 (Exh. B) wherein the respondent
made it appear that the said sum of P4,000 was going to be withdrawn on
"December 8, 1969 at nine o'clock". That the respondent in his testimony and
memorandum forgot that note, which is Annex C of the complaint for disbarment
and which he admitted in paragraph 4 of his answer, is an indication that he
does not know the facts of his own case and that he had no scruples in trying
to mislead and deceive this Court.
That note of respondent to Teofilo Legaspi, his telegram and his letter
(already quoted) to Mrs. Daroy dated December 7 and 9, 1969, respectively
(Exh. B, C and E) overwhelmingly belie his fabricated theory that he conferred
with Teofilo Legaspi at the end of October or in the first week of November,
1969. He was tempted to concoct a story as to his alleged payments to
Teofilo Legaspi because the latter is dead and could not refute him. However,
complainants' documentary evidence refutes his prevarications, distortions and
fabrications.
 He attached to his memorandum (of which he did not furnish
complainants a copy) his Exhibit 2, a supposed typewritten computation of
complainants' claim against him which totalled P10,406.05. Exhibit 2 does not
bear any signature. The respondent wants to imply that the complainants were
trying to blackmail him. No probative value can be given to Exhibit 2.
The flimsiness and incredible character of respondent's defense are
discernible in his Exhibit 1, which he attached to his answer to the original
complaint.
Exhibit 1 is a carbon copy of a supposed extrajudicial partition executed
in 1968 by the four children of Consuelo Gonzaga, by her surviving husband,
TeofiloLegaspi and by the respondent, Atty. Legaspi, all the six being described
in the document as "the legitimate children and sole heirs of Consuelo
Gonzaga, who died on May 12, 1941". Why the respondent was an heir of
Consuelo Gonzaga was not explained.
In that curious instrument, the spaces for the day and month when it was
signed and acknowledged before a notary, the spaces for the description of the
fourth parcel of land, the spaces for the shares adjudicated to the heirs, the
spaces for the instrumental witnesses and the spaces for the numbers of the
residence certificates and the dates and places of issue were left blank. Yet the
instrument was signed by the above six persons and duly notarized by a notary
whose signature is illegible.
In that extrajudicial partition Consuelo Gonzaga was alleged to have left
four parcels of land located at Barrio Maputi, Initao, Misamis Oriental which she
inherited from her father Aquilino Gonzaga. However, in the order of the Court
of First Instance of Misamis Oriental dated April 29, 1969 Consuelo Gonzaga
inherited only a one-sixth share in a parcel of land located at Maputi, Initao,
Misamis Oriental.
How Vivencio Legaspi, who, according to the instrument, was a resident
of Alameda, California, was able to sign it and to appear before a notary was
not explained.
The incomplete document, far from being of any help to
respondent Legaspi, casts a reflection on his competency and integrity as a
lawyer and on the competency and integrity of the notary before whom it was
acknowledged. As already noted, it was made to appear herein that
respondent Legaspi was an heir of Consuelo Gonzaga when, obviously, he did
not possess that status. The document does not even mention whether the
deceased died intestate.
That document has no connection with the P4,000 and does not justify
the misappropriation or breach of trust committed by the respondent.
 A lawyer, under his oath, pledges himself not to delay any man for money
or malice and is bound to conduct himself with all good fidelity to his clients. He
is obligated to report promptly the money of his clients that has come into his
possession. He should not commingle it with his private property or use it for
his personal purposes without his client's consent. He should maintain a
reputation for honesty and fidelity to private trust (Pars. 11 and 32, Canons of
Legal Ethics).
Money collected by a lawyer in pursuance of a judgment in favor of his
clients is held in trust and must be immediately turned over to them (Aya vs.
Bigornia, 57 Phil. 8, 11).
Section 25, Rule 138 of the Rules of Court provides that when an attorney
unjustly retains in his hands money of his client after it has been demanded, he
may be punished for contempt as an officer of the court who has misbehaved
in his official transactions and he is liable to a criminal prosecution.
A lawyer may be disbarred for any deceit, malpractice or other gross
misconduct in his office as attorney or for any violation of the lawyer's oath (Ibid,
sec. 27).
"The relation between an attorney and his client is highly fiduciary in its
nature and of a very delicate, exacting and confidential character, requiring a
high degree of fidelity and good faith" (7 Am. Jur. 2d 105). In view of that special
relationship, "lawyers are bound to promptly account for money or property
received by them on behalf of their clients and failure to do so constitutes
professional misconduct. The fact that a lawyer has a lien for fees on money in
his hands collected for his clients does not relieve him from the duty of promptly
accounting for the funds received." (Syllabus, In re Bamberger, 49 Phil. 962).
The conversion of funds entrusted to an attorney is a gross violation of
general morality as well as professional ethics. It impairs public confidence in
the legal profession. "It deserves severe punishment" (Sturr vs. State Bar of
California, 52 Cal. 2d 125, 338 Pac. 2d 897).
A member of the bar who converts the money of his client to his own
benefit through false pretenses is guilty of deceit, malpractice and gross
misconduct in his office of lawyer. The attorney, who violates his oath of office,
betrays the confidence reposed in him by a client and practises deceit cannot
be permitted to continue as a law practitioner. Not alone has he degraded
himself but as an unfaithful lawyer he has besmirched the fair name of an
honorable profession (In reParaiso, 41 Phil. 24, 25; In re David, 84 Phil. 627;
Manaloto vs. Reyes, Adm. Case No. 503, October 29, 1965, 15 SCRA 131;
See Cabigao and Yzquierdo vs. Fernando Rodrigo, 57 Phil. 20).
We find respondent Legaspi guilty of deceit, malpractice and
professional misconduct for having misappropriated the funds of his clients. His
 manufactured defenses, his lack of candor and his repeated failure to appear
at the investigation conducted by the City Fiscal of Iligan and at the hearings
scheduled by this Court, thus causing this proceeding to drag on for a long time,
demonstrate his unworthiness to remain as a member of the noble profession
of law. (See Capulong vs. Aliño, Adm. Case No. 381, February 10, 1968, 22
SCRA 491).
Taking into account the environmental circumstances of the case, we
hold that the proper disciplinary action against the respondent is disbarment.
Its salutary purpose is to protect the court and the public from the misconduct
of an officer of the court. It is premised on the assumption that a member of the
bar should be competent, honorable and reliable, a person in whom courts and
clients may repose confidence (In re Mac Dougall, 3 Phil. 70, 78).
Its objectives are to compel the lawyer to deal fairly and honestly with his
client and to remove from the profession a person whose misconduct has
proven him unfit for the duties and responsibilities belonging to the office of an
attorney (6 Moran's Comments on the Rules of Court, 1970 Ed., p. 242).
The prayer of the complainants that the respondent be ordered to pay
them the said amount of P4,000 plus attorney's fees and miscellaneous
expenses incurred in the prosecution of this case amounting to more than
P1,000 cannot be granted in this disbarment proceeding. That amount should
be recovered in an ordinary action.
WHEREFORE, the respondent is disbarred. The Clerk of Court is
directed to strike out his name from the Roll of Attorneys.
SO ORDERED.
Makalintal, C.J., Castro, Fernando, Barredo, Makasiar, Antonio,
Esguerra, Muñoz Palma, Concepcion, Jr. and Martin, JJ., concur.
Teehankee, J., is on leave.

||| (Daroy v. Legaspi, A.C. No. 936, [July 25, 1975], 160 PHIL 306-317)

EN BANC

[G.R. No. L-961. September 21, 1949.]

BLANDINA GAMBOA HILADO, petitioner, vs. JOSE

GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
and SELIM JACOB ASSAD, respondents.
 Delgado, Dizon & Flores for petitioner.
Vicente J. Francisco for respondents.

SYLLABUS

1. ATTORNEY AND CLIENT; RELATION OF ATTORNEY AND CLIENT,

WHEN EXISTS. — "To constitute professional employment it is not essential
that the client should have employed the attorney professionally on any
previous occasion . . . It is not necessary that any retainer should have been
paid, promised, or charged for; neither is it material that the attorney consulted
did not afterward undertake the case about which the consultation was had. If
a person, in respect to his business affairs or troubles of any kind, consults with
his attorney in his professional capacity with the view to obtaining professional
advice or assistance, and the attorney voluntarily permits or acquiesces in such
consultation, then the professional employment must be regarded as
established . . ."
2. ID.; ATTORNEY IS INHIBITED TO ACT ON BEHALF OF BOTH
PARTIES. — There is no law or provision in the Rules of Court prohibiting
attorneys in express terms from acting on behalf of both parties to a controversy
whose interests are opposed to each other, but such prohibition is necessarily
implied in the injunctions as provided in section 26 (e), Rule 123 and section 19
(e) of Rule 127 of the Rules of Court.
3. ID.; INFORMATION PROFESSIONALLY OBTAINED BY ATTORNEY
FROM CLIENT IS SACRED. — Information so received is sacred to the
employment to which it pertains, and to permit it to be used in the interest of
another, or, worse still, in the interest of the adverse party, is to strike at the
element of confidence which lies at the basis of, and affords the essential
security in, the relation of attorney and client.
4. ID.; ID. — The mere relation of attorney and client ought to preclude
the attorney from accepting the opposite party's retainer in the same litigation
regardless of what information was received by him from his first client.
5. ID.; RELATION OF ATTORNEY AND CLIENT IS FOUNDED ON
PRINCIPLES OF PUBLIC POLICY. — The relation of attorney and client is
founded on principles of public policy, on good taste. The question is not
necessarily one of the rights of the parties, but as to whether the attorney has
adhered to proper professional standard. With these thoughts in mind, it
behooves attorneys, like Ceasar's wife, not only to keep inviolate the client's
confidence, but also to avoid the appearance of treachery and double-dealing.
Only thus can litigants be encouraged to entrust their secrets to their attorneys
which is of paramount importance in the administration of justice.
 6. ID.; RETAINING FEE, WHAT IS. — "A retaining fee is a preliminary
fee given to an attorney or counsel to insure and secure his future services, and
induce him to act for the client. It is intended to remunerate counsel for being
deprived, by being retained by one party, of the opportunity of rendering
services to the other and of receiving pay from him, and the payment of such
fee, in the absence of an express understanding to the contrary, is neither made
nor received in payment of the services contemplated; its payment has no
relation to the obligation of the client to pay his attorney for the services which
he has retained him to perform."
7. ID.; INFORMATION OBTAINED FROM CLIENT BY A MEMBER OF
THE FIRM. — An information obtained from a client by a member or assistant
of a law firm is information imparted to the firm.
8. ID.; PROFESSIONAL CONFIDENCE, EXPIRATION OF. —
Professional confidence once reposed can never be divested by expiration of
professional employment.
9. ID.; COURTS; JURISDICTION, EXTENT OF SUMMARY. — The
courts have summary jurisdiction to protect the rights of the parties and the
public from any conduct of attorneys prejudicial to the administration of justice.
The summary jurisdiction of the courts over attorneys is not confined to
requiring them to pay over money collected by them but embraces authority to
compel them to do whatever specific acts may be incumbent upon them in their
capacity of attorneys to perform. The courts, from the general principles of
equity and policy, will always look into the dealings between attorneys and
clients and guard the latter from any undue consequences resulting from a
situation in which they may stand unequal. The courts act on the same principle
whether the undertaking is to appear, or, for that matter, not to appear, to
answer declaration.
10. ATTORNEYS-AT-LAW; AS OFFICERS OF THE COURTS. —
Attorneys are officers of the court where they practice, forming a part of the
machinery of the law for the administration of justice and as such subject to the
disciplinary authority of the court and to its orders and directions with respect
to their relations to the court as well as to their clients.

DECISION

TUASON, J : p

It appears that on April 23, 1945, Blandina Gamboa Hilado brought an

action against Selim Jacob Assad to annul the sale of several houses and lot
executed during the Japanese occupation by Mrs. Hilado's now deceased
husband.

On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on

behalf of the defendant; and on June 15, Attorneys Delgado, Dizon, Flores
and Rodrigo registered their appearance as counsel for the plaintiff.
On October 5, these attorneys filed an amended complaint by including
Jacob Assad as party defendant.
On January 28, 1946, Attorney Francisco entered his appearance as
attorney of record for the defendant in substitution for Attorneys Ohnick,
Velilla and Balonkita who had withdrawn from the case.
On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
Francisco urging him to discontinue representing the defendants on the
ground that their client had consulted with him about her case, on which
occasion, it was alleged, "she turned over the papers" to Attorney Francisco,
and the latter sent her a written opinion. Not receiving any answer to this
suggestion, Attorneys Delgado, Dizon, Flores and Rodrigo on June 3, 1946,
filed a formal motion with the court, wherein the case was and is pending, to
disqualify Attorney Francisco.
Attorney Francisco's letter to plaintiff, mentioned above and identified
as Exhibit A, is in full as follows:
"VICENTE J. FRANCISCO
"Attorney-at-Law
1462 Estrada, Manila
"July 13, 1945
"Mrs. Blandina Gamboa Hilado
"Manila, Philippines
"My dear Mrs. Hilado:
"From the papers you submitted to me in connection with civil case
No. 70075 of the Court of First Instance of Manila, entitled 'Blandina
Gamboa Hilado vs. S. J. Assad,' I find that the basic facts which brought
about the controversy between you and the defendant therein are as
follows:
"(a) That you were the equitable owner of the property described in
the complaint, as the same was purchased and/or built with funds
exclusively belonging to you, that is to say, the houses and lot pertained
to your paraphernal estate;
"(b) That on May 3, 1943, the legal title to the property was with
your husband, Mr. Serafin P. Hilado; and
 "(c) That the property was sold by Mr. Hilado without your
knowledge on the aforesaid date of May 3, 1943.
"Upon the foregoing facts, I am of the opinion that your action
against Mr. Assad will not ordinarily prosper. Mr. Assad had the right to
presume that your husband had the legal right to dispose of the property
as the transfer certificate of title was in his name. Moreover, the price of
P110,000 in Japanese military notes, as of May 3, 1943, does not quite
strike me as so grossly inadequate as to warrant the annulment of the
sale. I believe, lastly, that the transaction cannot be avoided merely
because it was made during the Japanese occupation, nor on the simple
allegation that the real purchaser was not a citizen of the Philippines. On
this last point, furthermore, I expect that you will have great difficulty in
proving that the real purchaser was other than Mr. Assad, considering that
death has already sealed your husband's lips and he cannot now testify
as to the circumstances of the sale.
"For the foregoing reasons, I regret to advice you that I cannot
appear in the proceedings in your behalf. The records of the case you
loaned to me are herewith returned.
"Yours very truly,
(Sgd.) "VICENTE J. FRANCISCO."
"VJF/Rag.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco
alleged that about May, 1945, a real estate broker came to his office in
connection with the legal separation of a woman who had been deserted by
her husband, and also told him (Francisco) that there was a pending suit
brought by Mrs. Hilado against a certain Syrian to annul the sale of a real
estate which the deceased Serafin Hilado had made to the Syrian during the
Japanese occupation; that this woman asked him if he was willing to accept
the case if the Syrian should give it to him; that he told the woman that the
sales of real property during the Japanese regime were valid even though it
was paid for in Japanese military notes; that this being his opinion, he told his
visitor he would have no objection to defending the Syrian;
That one month afterwards, Mrs. Hilado came to see him about a suit
she had instituted against a certain Syrian to annul the conveyance of a real
estate which her husband had made; that according to her the case was in
the hands of Attorneys Delgado and Dizon, but she wanted to take it away
from them; that as he had known the plaintiff's deceased husband he did not
hesitate to tell her frankly that hers was a lost case for the same reason he
had told the broker; that Mrs. Hiladoretorted that the basis of her action was
not that the money paid her husband was Japanese military notes, but that
the premises were her private and exclusive property; that she requested him
to read the complaint to be convinced that this was the theory of her suit; that
he then asked Mrs. Hilado if there was a Torrens title to the property and she
answered yes, in the name of her husband; that he told Mrs. Hilado that if the
property was registered in her husband's favor, her case would not prosper
either;
That some days afterward, upon arrival at his law office on Estrada
street, he was informed by Attorney Federico Agrava, his assistant, that
Mrs. Hilado had dropped in looking for him and that when he, Agrava, learned
that Mrs. Hilado's visit concerned legal matters he attended to her and
requested her to leave the "expediente" which she was carrying, and she did;
that he told Attorney Agrava that the firm should not handle Mrs. Hilado's case
and he should return the papers, calling Agrava's attention to what he
(Francisco) already had said to Mrs. Hilado;
That several days later, the stenographer in his law office, Teofilo
Ragodon, showed him a letter which has been dictated in English by Mr.
Agrava, returning the "expediente" to Mrs. Hilado; that Ragodon told him
(Attorney Francisco) upon Attorney Agrava's request that Agrava thought it
more proper to explain to Mrs. Hiladothe reasons why her case was rejected;
that he forthwith signed the letter without reading it and without keeping it for a
minute in his possession; that he never saw Mrs. Hilado since their last
meeting until she talked to him at the Manila Hotel about a proposed
extrajudicial settlement of the case;
That in January, 1946, Assad was in his office to request him to handle
his case stating that his American lawyer had gone to the States and left the
case in the hands of other attorneys; that he accepted the retainer and on
January 28, 1946, entered his appearance.
Attorney Francisco filed an affidavit of stenographer Ragodon in
corroboration of his answer.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His Honor
believed that no information other than that already alleged in plaintiff's
complaint in the main cause was conveyed to Attorney Francisco, and
concluded that the intercourse between the plaintiff and the respondent did
not attain the point of creating the relation of attorney and client.
Stripped of disputed details and collateral matters, this much is
undoubted: That Attorney Francisco's law firm mailed to the plaintiff a written
opinion over his signature on the merits of her case; that this opinion was
reached on the basis of papers she had submitted at his office; that
Mrs. Hilado's purpose in submitting those papers was to secure Attorney
Francisco's professional services. Granting the facts to be no more than
these, we agree with petitioner's counsel that the relation of attorney and
client between Attorney Francisco and Mrs. Hilado ensued. The following
rules accord with the ethics of the legal profession and meet with our
approval:
"In order to constitute the relation (of attorney and client) a
professional one and not merely one of principal and agent, the attorneys
must be employed either to give advice upon a legal point, to prosecute
or defend an action in court of Justice, or to prepare and draft, in legal
form such papers as deeds, bills, contracts and the like." (Atkinson vs.
Howlett, 11 Ky. Law Rep. (abstract), 364, cited in Vol. 88, A. L. R., p. 6.)
"To constitute professional employment it is not essential that the
client should have employed the attorney professionally on any previous
occasion . . . It is not necessary that any retainer should have been paid,
promised, or charged for; neither is it material that the attorney consulted
did not afterward undertake the case about which the consultation was
had. If a person, in respect to his business affairs or troubles of any kind,
consults with his attorney in his professional capacity with the view to
obtaining professional advice or assistance, and the attorney voluntarily
permits or acquiesces in such consultation, then the professional
employment must be regarded as established . . ." (5 Jones
Commentaries on Evidence, pp. 4118-4119.)
"An attorney is employed — that is, he is engaged in his
professional capacity as a lawyer or counselor — when he is listening to
his client's preliminary statement of his case, or when he is giving advice
thereon, just as truly as when he is drawing his client's pleadings, or
advocating his client's cause in open court." (Denver Tramway Co. vs.
Owens, 20 Colo., 107; 36 P., 848.)
"Formality is not an essential element of the employment of an
attorney. The contract may be express or implied and it is sufficient that
the advice and assistance of the attorney is sought and received, in
matters pertinent to his profession. An acceptance of the relation is
implied on the part of the attorney from his acting in behalf of his client in
pursuance of a request by the latter." (7 C. J. S., 848- 849; see Hirach
Bros. & Co. vs. R. E. Kennington Co., 88 A. L. R., 1.)
Section 26 (e), Rule 123 of the Rules of Court provides that "an
attorney cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in the
course of professional employment;" and section 19 (e) of Rule 127 imposes
upon an attorney the duty "to maintain inviolate the confidence, and at every
peril to himself, to preserve the secrets of his client." There is no law or
provision in the Rules of Court prohibiting attorneys in express terms from
acting on behalf of both parties to a controversy whose interests are opposed
to each other, but such prohibition is necessarily implied in the injunctions
above quoted. (In re De la Rosa, 27 Phil., 258.) In fact the prohibition derives
validity from sources higher than written laws and rules. As has been aptly
said in In re Merron, 22 N. M., 252, L.R.A., 1917B, 378, "information so
received is sacred to the employment to which it pertains," and "to permit it to
be used in the interest of another, or, worse still, in the interest of the adverse
party, is to strike at the element of confidence which lies at the basis of, and
affords the essential security in, the relation of attorney and client."
That only copies of pleadings already filed in court were furnished to
Attorney Agrava and that, this being so, no secret communication was
transmitted to him by the plaintiff, would not vary the situation even if we
should discard Mrs. Hilado's statement that other papers, personal and private
in character, were turned in by her. Precedents are at hand to support the
doctrine that the mere relation of attorney and client ought to preclude the
attorney from accepting the opposite party's retainer in the same litigation
regardless of what information was received by him from his first client.
"The principle which forbids an attorney who has been engaged to
represent a client from thereafter appearing on behalf of the client's
opponent applies equally even though during the continuance of the
employment nothing of a confidential nature was revealed to the attorney
by the client." (Christian vs. Waialua Agricultural Co., 30 Hawaii, 533,
Footnote 7, C. J. S., 828.)
"Where it appeared that an attorney, representing one party, in
litigation, had formerly represented the adverse party with respect to the
same matter involved in the litigation, the court need not inquire as to how
much knowledge the attorney acquired from his former client during that
relationship, before refusing to permit the attorney to represent the
adverse party." (Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.).
"In order that a court may prevent an attorney from appearing
against a former client, it is unnecessary that the court ascertain in detail
the extent to which the former client's affairs might have a bearing on the
matters involved in the subsequent litigation on the attorney's knowledge
thereof." (Body vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev., 264.)
"This rule has been so strictly enforced that it has been held that
an attorney, on terminating his employment, cannot thereafter act as
counsel against his client in the same general matter, even though, while
acting for his former client, he acquired no knowledge which could operate
to his client's disadvantage in the subsequent adverse employment.
Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas., 1912S,
181.)
Communications between attorney and client are, in a great number of
litigations, a complicated affair, consisting of entangled relevant and
irrelevant, secret and well known facts. In the complexity of what is said in the
course of the dealings between an attorney and a client, inquiry of the nature
suggested would lead to the revelation, in advance of the trial, of other
matters that might only further prejudice the complainant's cause. And the
theory would be productive of other unsalutary results. To make the passing
of confidential communication a condition precedent; i. e., to make the
employment conditioned on the scope and character of the knowledge
acquired by an attorney in determining his right to change sides, would not
enhance the freedom of litigants, which is to be sedulously fostered, to consult
with lawyers upon what they believe are their rights in litigation. The condition
would of necessity call for an investigation of what information the attorney
has received and in what way it is or it is not in conflict with his new position.
Litigants would in consequence be wary in going to an attorney, lest by an
unfortunate turn of the proceeding, if an investigation be held, the court should
accept the attorney's inaccurate version of the facts that came to him. "Now
the abstinence from seeking legal advice in a good cause is by hypothesis an
evil which is fatal to the administration of justice." (John H. Wigmore's
Evidence, 1923, Sections 2285, 2290, 2291.)
Hence the necessity of setting down the existence of the bare
relationship of attorney and client as the yardstick for testing incompatibility of
interests. This stern rule is designed not alone to prevent the dishonest
practitioner from fraudulent conduct, but as well to protect the honest lawyer
from unfounded suspicion of unprofessional practice. (Strong vs. Int. Bldg.,
etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It is founded on principles of public
policy, on good taste. As has been said in another case, the question is not
necessarily one of the rights of the parties, but as to whether the attorney has
adhered to proper professional standard. With these thoughts in mind, it
behooves attorneys, like Caesar's wife, not only to keep inviolate the client's
confidence, but also to avoid the appearance of treachery and double-dealing.
Only thus can litigants be encouraged to entrust their secrets to their
attorneys which is of paramount importance in the administration of justice.

So without impugning respondent's good faith, we nevertheless can not

sanction his taking up the cause of the adversary of the party who had sought
and obtained legal advice from his firm; this, not necessarily to prevent any
injustice to the plaintiff but to keep above reproach the honor and integrity of
the courts and of the bar. Without condemning the respondent's conduct as
dishonest, corrupt, or fraudulent, we do believe that upon the admitted facts it
is highly inexpedient. It had the tendency to bring the profession, of which he
is a distinguished member, "into public disrepute and suspicion and
undermine the integrity of justice."
There is in legal practice what is called "retaining fee," the purpose of
which stems from the realization that the attorney is disabled from acting as
counsel for the other side after he has given professional advice to the
opposite party, even if he should decline to perform the contemplated services
on behalf of the latter. It is to prevent undue hardship on the attorney resulting
from the rigid observance of the rule that a separate and independent fee for
consultation and advice was conceived and authorized. "A retaining fee is a
preliminary fee given to an attorney or counsel to insure and secure his future
services, and induce him to act for the client. It is intended to remunerate
counsel for being deprived, by being retained by one party, of the opportunity
of rendering services to the other and of receiving pay from him, and the
payment of such fee, in the absence of an express understanding to the
contrary, is neither made nor received in payment of the services
contemplated; its payment has no relation to the obligation of the client to pay
his attorney for the services which he has retained him to perform." (7 C.J.S.,
1019.)
The defense that Attorney Agrava wrote the letter Exhibit A and that
Attorney Francisco did not take the trouble of reading it, would not take the
case out of the interdiction. If this letter was written under the circumstances
explained by Attorney Francisco and he was unaware of its contents, the fact
remains that his firm did give Mrs. Hilado a formal professional advice from
which, as heretofore demonstrated, emerged the relation of attorney and
client. This letter binds and stops him in the same manner and to the same
degree as if he personally had written it. An information obtained from a client
by a member or assistant of a law firm is information imparted to the firm. (6
C. J., 628; 7 C. J. S., 986.) This is not a mere fiction or an arbitrary rule; for
such member or assistant, as in our case, not only acts in the name and
interest of the firm, but his information, by the nature of his connection with
the firm is available to his associates or employers. The rule is all the more to
be adhered to where, as in the present instance, the opinion was actually
signed by the head of the firm and carries his initials intended to convey the
impression that it was dictated by him personally. No progress could be hoped
for in "the public policy that the client in consulting his legal adviser ought to
be free from apprehension of disclosure of his confidence," if the prohibition
were not extended to the attorney's partners, employers or assistants.
The fact that petitioner did not object until after four months had passed
from the date Attorney Francisco first appeared for the defendants does not
operate as a waiver of her right to ask for his disqualification. In one case,
objection to the appearance of an attorney was allowed even on appeal as a
ground for reversal of the judgment. In that case, in which throughout the
conduct of the cause in the court below the attorney had been suffered so to
act without objection, the court said: "We are all of the one mind, that the right
of the appellee to make his objection has not lapsed by reason of failure to
make it sooner; that professional confidence once reposed can never be
divested by expiration of professional employment." (Nickels vs. Griffin, 1
Wash. Terr., 374, 321 A. L. R., 1316.)
 The complaint that petitioner's remedy is by appeal and not by certiorari
deserves scant attention. The courts have summary jurisdiction to protect the
rights of the parties and the public from any conduct of attorneys prejudicial to
the administration of justice. The summary jurisdiction of the courts over
attorneys is not confined to requiring them to pay over money collected by
them but embraces authority to compel them to do whatever specific acts may
be incumbent upon them in their capacity of attorneys to perform. The courts,
from the general principles of equity and policy, will always look into the
dealings between attorneys and clients and guard the latter from any undue
consequences resulting from a situation in which they may stand unequal.
The courts act on the same principle whether the undertaking is to appear, or,
for that matter, not to appear, to answer declaration, etc. (6 C.J., 718; 7
C.J.S., 1005.) This summary remedy against attorneys flows from the fact that
they are officers of the court where they practice, forming a part of the
machinery of the law for the administration of justice and as such subject to
the disciplinary authority of the court and to its orders and directions with
respect to their relations to the court as well as to their clients. (Charest vs.
Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.)
Attorneys stand on the same footing as sheriffs and other court officers in
respect of matters just mentioned.
We conclude therefore that the motion for disqualification should be
allowed. It is so ordered, without costs.
Moran, C.J., Ozaeta, Paras, Feria, Bengzon, Padilla, Montemayor,
Reyes and Torres, JJ., concur.
||| (Hilado v. David, G.R. No. L-961, [September 21, 1949], 84 PHIL 569-581)

U.S. Supreme Court

Stone v. Bank of Commerce, 174 U.S. 412 (1899)

Stone v. Bank of Commerce

No. 882

Argued February 28, March 2, 1899

Decided May 16, 1899

174 U.S. 412

Syllabus
Citizens' Savings Bank v. Owensboro, 173 U. S. 636, followed to the point that in the
case of a bank whose charter was granted subsequently to the year 1866, and which
had accepted the provisions of the Hewitt Act

Page 174 U. S. 413

and had thereafter paid the tax specified therein, there was no irrepealable contract in
favor of such bank that it should be thereafter and during its corporate existence taxed
under the provisions of that act.

The agreement set forth in the statement of facts between the City of Louisville, the
sinking fund commissioners of that city, represented by the city attorney, and the
various banks of that city acting by their attorneys, was not a valid agreement within the
power of an attorney at law to make.

An attorney, in his capacity merely as such, has no power to make any agreement for
his client before a suit has been commenced or before he has been retained to
commence one, and if, under such circumstances, he assumes to act for his principal, it
must be as agent, and his actual authority must appear.

An equitable estoppel which would prevent the state from exercising its power to alter
the rate of taxation in this case should be based upon the clearest equity, and the
payment of the money under the circumstances of this case, not exceeding the amount
really legally due for taxes, although disputed at the time, does not work such an
equitable estoppel as to prevent the assertion of the otherwise legal rights of the city.

The bill in this case was filed in 1897 by the Bank of Commerce, a citizen and resident
of the City of Louisville, in the State of Kentucky, for the purpose of obtaining an
injunction restraining the defendants from assessing the complainant, and from
collecting or attempting to collect any taxes based upon the assessment spoken of in
the bill, and for a final decree establishing the contract right of the complainant to be
taxed in the method prescribed by the Act of May 17, 1886, known as the "Hewitt Act,"
the terms of which it alleged it had accepted. The bill sought to perpetually enjoin the
defendants from assessing the franchise or property of the complainant in any other
manner than under that act. The material provisions of the Hewitt Act are set out in the
opinion of the court, delivered by MR. JUSTICE WHITE, in the case of Citizens' Savings
Bank of Owensboro v. Owensboro, 173 U. S. 636.

In 1891, Kentucky adopted a new constitution, section 174 of which, providing for the
taxation of all property in proportion to its value, is also set forth in the above-cited case.

The legislature of the state in 1892 passed an act in relation to the taxation of banks
and other corporations which was in conflict with the Hewitt Act, and provided for taxing
the

Page 174 U. S. 414

banks in a different manner from that act, and also subjected the banks to local taxation,
the total being much more onerous than that enforced under the Hewitt Act.

The complainant was incorporated under an Act of the legislature of Kentucky approved
February 10, 1865, and it had all the powers granted by that act and the several
amendments thereof as alleged in its bill.

There were various other banks in the City of Louisville which also alleged that they had
accepted the terms of the Hewitt Act, and by reason thereof had a valid contract with
the state that they should be taxed only under the provisions of that act.

The complainant alleges in its bill that early in the year 1894, a demand was made on
the part of the defendant the City of Louisville, based upon the act of 1892 and the
ordinance adopted in pursuance thereof, for the payment of a license tax equal to four
percent of its gross receipts into the sinking fund of the city. The banks denied their
liability to pay any tax other than that provided in the Hewitt Act, and hence arose the
differences between the city and the banks.

No litigation had been commenced for the purpose of testing the questions at issue
between the city and the banks, although negotiations looking to that end had been in
progress between the city attorney of Louisville and the members of the sinking fund
board, on the one hand, and the counsel for the various banks and trust companies, on
the other. There is set forth in the bill of the complainant the action of the sinking fund
board, as follows:

"Sinking Fund Office, Feb'y 13, 1894"

"A committee, consisting of Messrs. Thomas L. Barrett, John H. Leathers, and George
W. Swearingen appeared before the board on behalf of the banks who are members of
the Louisville Clearing House and stated that it was the purpose of said banks to resist
the payment of the license fee demanded of them under the license ordinance approved
January 29, 1894, on the ground that said banks were not legally liable to pay the same,
but, in order to save the sinking fund

Page 174 U. S. 415

from any embarrassment occasioned by their refusal to pay said license fee, the banks,
with two or three exceptions, were willing to enter into an arrangement whereby they
would pay a part of the amount demanded of them and lend the sinking fund the
balance thereof, to be repaid, with interest at four percentum per annum, if it was finally
decided and adjudged that the banks were not liable to pay said license fees."

"After discussion, the president was, on motion of Mr. Tyler, seconded by Mr. Summers,
authorized to enter into the following arrangement with the different banks, trust and title
companies who will be subject to the payment of the license fees if the license
ordinance is finally adjudged to be valid and enforceable:"
"First. To accept from each of said banks and companies a payment equal to the
difference between the amount they now pay to the state for state taxes and the amount
they would be required to pay for state taxes under the provisions of what is known as
the 'Hewitt Bill.' This sum shall be an actual payment, not to be repaid under any
circumstances, but its payment shall not in any manner or to any extent prejudice the
banks or companies paying it, or be taken as a waiver of any legal right which they have
in the premises."

"Second. In addition to making the above payments, the said banks and companies,
save those selected to test the question involved, shall each lend to the sinking fund a
sum which, added to said payment, will equal four percentum of its gross earnings
during the year 1893, and the sinking fund will execute for said loans its obligations,
agreeing to repay the same, with interest at four percentum per annum, when and if it
shall be finally adjudged by the court of last resort that said banks or companies are not
liable to pay the license fee required by the ordinance aforesaid; but if it is finally
adjudged that they are liable to pay said license fee, then the said loan shall be taken
and deemed as a payment of said license fee, and the obligation to repay the same
shall be void."

"Third. The banks or companies selected to test the question involved will each lend the
sinking fund a sum equal to four percentum of their gross earnings for the year 1893,
and

Page 174 U. S. 416

will receive therefor the obligations of the sinking fund as above described."

"Fourth. This arrangement is to be entered into with the understanding that the said
banks and companies will institute without delay and diligently prosecute such actions
as may be necessary to settle and adjudge the right and liabilities of the parties in the
premises, and pending such proceedings, the sinking fund will not prosecute them, or
any of them, for doing business without license."

"A true copy. Attest: J. M. Terry"

"Secretary and Treasurer"

Following the above, the complainant's bill contains what is termed a

"Stipulation between the City of Louisville, the Commissioners of the Sinking Fund of
the City of Louisville, and the Banks, Trust, and Title Companies of the City of
Louisville,"

which stipulation reads as follows:

"It is agreed between the City of Louisville, the Commissioners of the Sinking Fund of
the City of Louisville, represented by H. S. Barker, City Attorney, acting under the
advice and by the authority of the Board of Sinking Fund Commissioners, given at a
regular meeting of said board, and the Mayor of the City of Louisville, on the one part,
and the various banks, trust and title companies of the City of Louisville, acting by
Humphrey & Davie and Helm & Bruce, their attorneys, of the other part:"

"First. That in February, 1894, it was agreed between the City of Louisville and the
board of sinking fund commissioners, acting together in the interest of the said city, and
the various banks, trust and title companies, acting through their committee, to-wit,
Messrs. Thomas L. Barrett, John H. Leathers, and George W. Swearingen, and their
counsel, to-wit, Messrs. Humphrey & Davie and Helm & Bruce, that the question of the
liability of said banks and trust and title companies to pay municipal taxes, either license
or ad valorem,otherwise than as provided by the revenue law, commonly known as the
'Hewitt Bill,' should be tested by appropriate litigation looking to that end. "

Page 174 U. S. 417

"Second. In order to effectually test the question as to all of said companies, they were
divided into three classes, it being understood that all who had accepted the provisions
of the said Hewitt Bill would fall in one or the other of the classes named, to-wit:"

"(A) Banks whose charters had been granted prior to 1856."

"(B) Banks whose whose charters had been granted subsequent to 1856."

"(C) National banks."

"It being understood that the trust and title companies which had accepted the
provisions of the Hewitt Bill would fall in class B, above named."

"Third. In pursuance of that agreement the sinking fund commissioners caused to be

issued warrants against the Bank of Kentucky, representing class A, the Louisville
Banking Company, representing class B, and the Third National Bank, representing
class C, and these banks respectively applied for a writ of prohibition against the City
Court of Louisville, proceeding with the hearing, that being the manner pointed out by
the city charter for testing the validity of city ordinances."

"It was distinctly understood and agreed at that time -- and this agreement was made for
the best interest of all parties to it -- that if any bank in any class should eventually fail to
establish the existence and validity of the contract which it was claimed was made
under the Hewitt Bill, that all of that class should thereafter regularly and promptly
submit to the existing laws and pay their taxes, and it was also agreed that if any bank
of any class should succeed in establishing a contract and the validity thereof under the
Hewitt Bill, that that should exempt all banks and companies falling within that class
from the payment of taxes except as provided in the Hewitt Bill."
"Fourth. On the faith of this agreement, all of the banks and companies aforesaid paid
into the sinking fund the amounts of taxes claimed against them under the terms and
conditions named in the minutes of the sinking fund commissioners of February 13,
1894, an attested copy of which is hereto attached as part hereof; but at a later date,
and in further

Page 174 U. S. 418

reliance upon said agreement, all said banks and companies, except those actually
involved in the test cases, paid the whole of the amount of taxes claimed as against
them by the City of Louisville, without reservation, until the question thus raised should
be finally disposed of."

"Humphrey & Davie"

"Helm & Bruce"

"For Banks, Trust and Title Companies, of the City of Louisville"

"H. S. Barker, City Att'y"

"Approved:"

"C. H. Gibson"

"Pres't Comm'rs Sinking Fund City of Lou."

"A true copy. Attest:"

"Huston Quinn"

"Arthur Peter"

"M. McLoughlin"

The Louisville Banking Company was one of the banks which brought an action for the
purpose of testing the question of its liability to taxation. The charter of that company
was granted subsequent to the year 1856, and in that respect it was like the defendant
bank. It also claimed to have accepted the provisions of the Hewitt Act. In the litigation
which followed, the Louisville Banking Company was adjudged by the Court of Appeals
of Kentucky to have an irrepealable contract, throughout its charter existence, to be
taxed under the Hewitt Act, and judgment pursuant to that adjudication was entered in
favor of that company. The complainant herein claimed the benefit of the foregoing
adjudication, and the circuit court allowed it, and gave judgment as follows:
"1. That the complainant is entitled to the benefit of the proceedings taken in the case
of Louisville Banking Company v. R. H. Thompson, Judge, etc., in the Jefferson Court of
Common Pleas, and the proceedings taken in said cause on appeal to the Court of
Appeals of Kentucky wherein the Louisville Banking Company was appellant, and the
said R. H. Thompson, judge, etc., and the City of Louisville, were appellees, to the
same extent as if the complainant had been a party to said proceedings. "

Page 174 U. S. 419

"(2) That it is res judicata between the complainant and the City of Louisville that the
complainant is entitled to be taxed under what is known as the 'Hewitt Revenue Law,'
and not otherwise, and it is therefore adjudged, ordered, and decreed that the
defendants Samuel H. Stone, Charles Findley, and George W. Long are perpetually
enjoined and restrained from making any assessment under the Act of November 11,
1892, or certifying the same, to the City of Louisville, upon any rights, properties, or
franchises, or shares of stock, of the complainant, and that any provisions of the
constitution of the State of Kentucky, and any provision of the said Act of November 11,
1892, or of the city charter, which may be construed as authorizing the levy or
assessment of any tax against the complainant, its rights, properties, or franchises,
other than as allowed by the said Hewitt Law, is, during the corporate existence of the
complainant, unconstitutional and void, and that the complainant and its shares of stock
are exempt from all other taxation whatsoever except as prescribed in the said Hewitt
Law, so long as said tax shall be paid during the corporate existence of complainant."

The defendants appealed directly to this Court from the judgment of the circuit court
under the provisions of section 5 of the act of 1891, 26 Stat. 826, because the case
involved the application of the Constitution of the United States and because a law of
the State of Kentucky was claimed to be in contravention of that Constitution.

SECOND DIVISION

[A.C. No. 704 . November 24, 1975.]

MERCEDES R. VDA. DE GUERRERO, complainant, vs. ATTY.

HAROLD M. HERNANDO, respondent.

No counsel for complaint.

Harold M. Hernando for his own behalf as respondent.

SYNOPSIS
 Respondent was charged with misconduct or malpractice and with
having committed misrepresentation as to exhibition of residence certificate. On
the malpractice charge respondent, in an action for partition against
complainant, impleaded certain persons in the case as plaintiffs although,
allegedly, he was not authorized to do so. Respondent explained, however, he
did so at the behest of their uncle who assured the former that said persons
were interested in the subject matter of the action and that four of them had
executed a special power of attorney designating the uncle as their
representative. On the misrepresentation charge, respondent allegedly
indicated in the jurat of a tenancy contract, as the residence certificate of an
affiant, the residence certificate corresponding to another person. Respondent
explained that the erroneous entry was a purely harmless, clerical or
typographical error.
The Supreme Court dismissed the malpractice charge, but severely
censured respondent for the falsehood which he had committed as regards to
the jurat and at the same time barred or disqualified him from acting as a notary
public for a period of one year.

SYLLABUS

1. LEGAL ETHICS; MALPRACTICE; CASE AT BAR. — Charged with

malpractice or professional misconduct in that he impleaded as plaintiffs in an
action for partition certain persons, who subsequently disclaimed having
authorized respondent to do so, the latter explained that he did so at the behest
of said persons' uncle who assured him that they were interested in the subject
matter and that four of them had executed a special power of attorney. HELD:
Respondent was not guilty of any professional misconduct. Credence can be
given to his profession of good faith in including them as plaintiffs. Moreover, in
a partition action all the co-owners should be joined as parties.
2. ID.; ID.; RESIDENCE CERTIFICATE REQUIRED TO BE EXHIBITED.
— The exhibition of the residence certificate is required whenever a document
is acknowledged before a notary public (Sec. 6 Com. Act 456). Such a
requirement may enable the notary to ascertain the identity of the persons
appearing before him and to unmask impostors. There is a similar requirement
in section 251 of the Revised Administrative Code with respect to the cedula
certificate.
3. ID.; ID.; DISBARMENT PROCEEDINGS; DEFENSES. — It is not a
defense that the complaint against respondent might have been provoked by
the act of his client in filing a disbarment complaint against the counsel of
complainant for allegedly tampering with the dates appearing in the original
summons and sheriff's return (supposedly to avoid default).
 4. ID.; ID.; MISCONDUCT; MAKING IT APPEAR IN JURAT THAT
AFFIANT EXHIBITED A RESIDENCE CERTIFICATE WHEN IN FACT HE DID
NOT DO SO. — A lawyer is guilty of misconduct as notary in making it appear
in the jurat of tenancy contract that affiant exhibited to him a residence
certificate when in fact he (affiant) did not do so. Such misrepresentation is
unquestionably censurable and justifies disciplinary action against him as a
member of the bar and as notary public. He violated the mandate in his
attorney's oath to "obey the laws" and "do no falsehood". Considering the
irregularity committed he deserves a severe censure and should be suspended
from acting as notary public for one year.
5. ID.; ID.; CASE AT BAR DISTINGUISHED FROM SAMONTE VS.
RODRIGO, Adm. Case 930. — The case at bar should be distinguished from
Samonte vs. Rodrigo (Adm. Case 930, December 17, 1970) where a notary
public in good faith copied the date of affiant's residence certificate as found in
his income tax return, and it was later discovered that the residence certificate
mentioned therein was not actually issued to the affiant. The notary was given
an admonition and warned to be more careful in the discharge of his notarial
duties.

RESOLUTION

AQUINO, J : p

This disbarment case was filed against Atty. Harold M. Hernando of

Sarrat, Ilocos Norte by Mercedes Hernando Reyes Vda. de Guerrero of Laoag
City, a septuagenarian, who described herself as a poor, defenseless and
helpless widow.
Malpractice charge. — In behalf of eleven plaintiffs, Atty. Hernando filed
in the Court of First Instance of Ilocos Norte a complaint for partition against
Mrs.Guerrero. After the complaint was filed, seven of the plaintiffs impleaded in
that case, who are Mrs. Guerrero's cousins, namely, (1) Felicidad B. Reyes-
Fonacier, (2) Rosario B. Reyes-Concepcion, (3) Violeta B. Reyes-Samonte, (4)
Mamerta B. Reyes-Mercado, (5) Mercedes B. Reyes, (6) Federico B. Reyes
and (7) Concepcion B. Reyes, filed manifestations in court, expressing their
surprise because they were included as plaintiffs although they never
authorized Atty. Hernando to represent them (Civil Case No. 3717-II, Ilocos
Norte CFI, Mateo H. Reyes, et al vs. Mercedes R. Vda. de Guerrero). By reason
of those manifestations, Mrs. Guerrero charged Atty.Hernando with
misconduct or malpractice.
 To refute the charge, Atty. Hernando explained that he was engaged by
Mateo H. Reyes to file the complaint for partition; that Mateo directed him to
include as co-plaintiffs the aforenamed persons, who are his nephew and
nieces and who were interested in the subject-matter of the action; that four of
those persons executed a special power of attorney designating Mateo as their
representative in that litigation (Exh. H or 1); that Mateo told him that the special
power of attorney of his other nieces had already been mailed and he would
receive it in due course, and that after the said persons revoked the power of
attorney and manifested that they were disinclined to appear as plaintiffs, he
(Atty. Hernando) amended the complaint by dropping them as plaintiffs and
impleading them as defendants.
In view of that explanation, the Solicitor General recommended the
dismissal of the malpractice charge. That recommendation is justified.
RespondentHernando was not guilty of any professional misconduct in
including as plaintiffs the said persons who, by the way, had not joined
Mrs. Guerrero in filing the disbarment complaint herein.
Credence can be given to his profession of good faith in including them
as plaintiffs. He did so at the behest of their uncle, Mateo H. Reyes. Four of
them in their special power of attorney appointed Mateo as their agent in
initiating the action. Moreover, in a partition action all the co-owners should be
joined as parties (Sec. 1, Rule 69, Rules of Court; Reyes vs. Cordero, 46 Phil.
658).
Misrepresentation as to exhibition of residence certificate. —
Mrs. Guerrero also charged respondent Hernando with having indicated in the
jurat of a tenancy contract, as the residence certificate of Tranquilino Bernardo,
the residence certificate corresponding to Antonio Raymundo. That contract
was presented in evidence in the aforecited partition case.
It is incontrovertible that as a notary Atty. Hernando made it appear in the
jurat of the tenancy contract, which was subscribed and sworn to before him by
Evaristo Juan and Tranquilino Bernardo (and wherein Mrs. Guerrero was an
instrumental witness), that Residence Certificate No. A-2893960 was issued to
Bernardo on January 20, 1963 and that Juan's residence certificate was also
issued on January 20, 1963, whereas, according to the records of the internal
revenue office at Laoag City Residence Certificate No. A-2893960 was issued
to Raymundo on January 15, 1963 and Juan's residence certificate was also
issued on that same date.
Respondent's defense is that he asked Bernardo to produce his
residence certificate; that Mateo H. Reyes interposed that he had Bernardo's
residence certificate but he was not able to bring it at that time; that a week later
Mateo met Atty. Hernando in front of the post office and, on that occasion, he
copied the number and date appearing in Bernardo's residence certificate, and
that according to the records of the internal revenue office the duplicate of said
residence certificate was issued to Raymundo and the original to Bernardo.
Atty. Hernando in his answer claimed that the erroneous entry regarding
the number of Bernardo's residence certificate was a "purely harmless" "clerical
or topographical" (should be typographical) error which did not concern
Mrs. Guerrero and which did not affect the integrity of the document.
That claim cannot be sustained. Bernardo did not testify to support
respondent's pretension that he (Bernardo) was provided with a residence
certificate. The testimony of Mateo H. Reyes that he had secured a residence
certificate for his tenant, Bernardo, which turned out to have been issued to
Raymundo, is obviously fabricated. No such residence certificate was
presented as evidence. The imputation that Residence Certificate No. A-
2893960 was issued twice by the internal revenue clerk is unbelievable.
The exhibition of the residence certificate is required whenever a
document is acknowledged before a notary (Sec. 6, Commonwealth Act No.
465). Such a requirement may enable the notary to ascertain the identity of the
person appearing before him and to unmask impostors (Manila Surety & Fidelity
Co., Inc. vs. Luna, 107 Phil. 281). (There is a similar requirement in section 251
of the Revised Administrative Code with respect to the cedula certificate).
It is not a defense that the complaint against Atty. Hernando might have
been provoked by the act of his client, Mateo H. Reyes, in filing a disbarment
complaint against Atty. Amador C. Castro, Mrs. Guerrero's counsel in the
aforementioned Civil Case No. 3717-II, for allegedly tampering with the dates
appearing in the original summons and sheriff's return (supposedly to avoid
default). That complaint was dismissed for lack of evidence (Resolution dated
March 14, 1968 in Reyes vs. Castro, Administrative Case No. 616).
We find Atty. Hernando guilty of misconduct as a notary in making it
appear in the jurat of a tenancy contract that affiant Tranquilino Bernardo
exhibited to him a residence certificate when in fact he did not do so. Such
misrepresentation is unquestionably censurable and justifies disciplinary action
against the respondent as a member of the bar and as a notary public (Cf.
National Bureau of Investigation vs. Morada, 112 Phil. 717; Viuda de Veloso vs.
Madarang, 61 Phil. 773). The respondent violated the mandate in his attorney's
oath to "obey the laws" and "do no falsehood" (Form 28, Appendix of the Rules
of Court).
The instant case is different from Samonte vs. Rodrigo, Jr.,
Administrative Case No. 930, December 17, 1970, 36 SCRA 283 where a
notary in good faith copied the data of affiant's residence certificate, as found
in his income tax return, and it was later discovered that the residence certificate
mentioned therein was not actually issued to the affiant. The notary was given
 an admonition and warned to be more careful in the discharge of his notarial
duties.
Considering the irregularity committed by the respondent, we hold that
he deserves a severe censure and that he should be suspended from acting as
notary public for one year.
WHEREFORE, the charge of malpractice against respondent Harold
M. Hernando is dismissed but he is severely censured for the falsehood which
he had committed and at the same time he is barred or disqualified from acting
as a notary public for a period of one year counted from notice of the entry of
judgment in this case. He is warned that a more drastic punishment would be
imposed on a repetition of the same anomaly.
SO ORDERED.
Fernando, Barredo, Antonio and Concepcion, Jr., JJ., concur.
(Vda. de Guerrero v. Hernando, A.C. No. 704 (Resolution), [November 24,
|||

1975], 160-A PHIL 725-730)

SECOND DIVISION

[A.C. No. 5280. March 30, 2004.]

WILLIAM S. UY, complainant, vs. ATTY. FERMIN

L. GONZALES, respondent.

RESOLUTION

AUSTRIA-MARTINEZ, J : p

William S. Uy filed before this Court an administrative case against Atty.

Fermin L. Gonzales for violation of the confidentiality of their lawyer-client
relationship. The complainant alleges:
Sometime in April 1999, he engaged the services of respondent lawyer to
prepare and file a petition for the issuance of a new certificate of title. After
confiding with respondent the circumstances surrounding the lost title and
discussing the fees and costs, respondent prepared, finalized and submitted to
him a petition to be filed before the Regional Trial Court of Tayug, Pangasinan.
When the petition was about to be filed, respondent went to his (complainant's)
office at Virra Mall, Greenhills and demanded a certain amount from him other than
what they had previously agreed upon. Respondent left his office after reasoning
with him. Expecting that said petition would be filed, he was shocked to find out
later that instead of filing the petition for the issuance of a new certificate of title,
respondent filed a letter-complaint dated July 26, 1999 against him with the Office
of the Provincial Prosecutor of Tayug, Pangasinan for "Falsification of Public
Documents." 1 The letter-complaint contained facts and circumstances pertaining
to the transfer certificate of title that was the subject matter of the petition which
respondent was supposed to have filed. Portions of said letter-complaint read:
The undersigned complainant accuses WILLIAM S. UY, of legal
age, Filipino, married and a resident of 132-A Gilmore Street corner 9th
Street, New Manila, Quezon City, Michael Angelo T. UY, CRISTINA EARL
T. UY, minors and residents of the aforesaid address, Luviminda G.
Tomagos, of legal age, married, Filipino and a resident of Carmay East,
Rosales, Pangasinan, and F. Madayag, with office address at A12, 2/F
Vira Mall Shopping Complex, Greenhills, San Juan, Metro Manila, for
ESTAFA THRU FALSIFICATION OF PUBLIC DOCUMENTS, committed
as follows:
That on March 15, 1996, William S. Uy acquired by purchase a
parcel of land consisting of 4.001 ha. for the amount of P100,000.00,
Philippine Currency, situated at Brgy. Gonzales, Umingan, Pangasinan,
from FERMIN C. GONZALES, as evidenced by a Deed of Sale executed
by the latter in favor of the former . . .; that in the said date, William
S. Uy received the Transfer Certificate of Title No. T-33122, covering the
said land;
That instead of registering said Deed of Sale and Transfer
Certificate of Title (TCT) No. T-33122, in the Register of Deeds for the
purpose of transferring the same in his name, William S. Uy executed a
Deed of Voluntary Land Transfer of the aforesaid land in favor of his
children, namely, Michael Angelo T. Uy and Cristina Earl T. Uy, wherein
William S. Uy made it appear that his said children are of legal age, and
residents of Brgy. Gonzales, Umingan, Pangasinan, when in fact and in
truth, they are minors and residents of Metro Manila, to qualify them as
farmers/beneficiaries, thus placing the said property within the coverage
of the Land Reform Program; EcHIDT

That the above-named accused, conspiring together and helping

one another procured the falsified documents which they used as
supporting papers so that they can secure from the Office of the Register
of Deeds of Tayug, Pangasinan, TCT No. T-5165 (Certificate of Land
Ownership Award No. 004 32930) in favor of his above-named children.
Some of these Falsified documents are purported Affidavit of
Seller/Transferor and Affidavit of Non-Tenancy, both dated August 20,
1996, without the signature of affiant, Fermin C. Gonzales, and that on
that said date, Fermin C. Gonzales was already dead . . .;
 That on December 17, 1998, William S. Uy with deceit and evident
intent to defraud undersigned, still accepted the amount of P340,000.00,
from Atty. Fermin L.Gonzales, P300,000.00, in PNB Check No. 0000606,
and P40,000.00, in cash, as full payment of the redemption of TCT No.
33122 . . . knowing fully well that at that time the said TCT cannot be
redeemed anymore because the same was already transferred in the
name of his children;
That William S. Uy has appropriated the amount covered by the
aforesaid check, as evidenced by the said check which was encashed by
him . . .;
That inspite of repeated demands, both oral and in writing, William
S. Uy refused and continue to refuse to deliver to him a TCT in the name
of the undersigned or to return and repay the said P340,000.00, to the
damage and prejudice of the undersigned. 2
With the execution of the letter-complaint, respondent violated his oath as a
lawyer and grossly disregarded his duty to preserve the secrets of his client.
Respondent unceremoniously turned against him just because he refused to
grant respondent's request for additional compensation. Respondent's act
tarnished his reputation and social standing. 3
In compliance with this Court's Resolution dated July 31, 2000, 4 respondent
filed his Comment narrating his version, as follows:
On December 17, 1998, he offered to redeem from complainant a 4.9
hectare-property situated in Brgy. Gonzales, Umingan, Pangasinan covered by
TCT No. T-33122 which the latter acquired by purchase from his (respondent's)
son, the late Fermin C. Gonzales, Jr.. On the same date, he paid complainant
P340,000.00 and demanded the delivery of TCT No. T-33122 as well as the
execution of the Deed of Redemption. Upon request, he gave complainant
additional time to locate said title or until after Christmas to deliver the same and
execute the Deed of Redemption. After the said period, he went to complainant's
office and demanded the delivery of the title and the execution of the Deed of
Redemption. Instead, complainant gave him photocopies of TCT No. T-33122 and
TCT No. T-5165. Complainant explained that he had already transferred the title
of the property, covered by TCT No. T-5165 to his children Michael and
Cristina Uy and that TCT No. T-5165 was misplaced and cannot be located despite
efforts to locate it. Wanting to protect his interest over the property coupled with
his desire to get hold of TCT No. T-5165 the earliest possible time, he offered his
assistance pro bono to prepare a petition for lost title provided that all necessary
expenses incident thereto including expenses for transportation and others,
estimated at P20,000.00, will be shouldered by complainant. To these,
complainant agreed.
 On April 9, 1999, he submitted to complainant a draft of the petition for the
lost title ready for signing and notarization. On April 14, 1999, he went to
complainant's office informing him that the petition is ready for filing and needs
funds for expenses. Complainant who was with a client asked him to wait at the
anteroom where he waited for almost two hours until he found out that complainant
had already left without leaving any instructions nor funds for the filing of the
petition. Complainant's conduct infuriated him which prompted him to give a
handwritten letter telling complainant that he is withdrawing the petition he
prepared and that complainant should get another lawyer to file the petition.
Respondent maintains that the lawyer-client relationship between him and
complainant was terminated when he gave the handwritten letter to complainant;
that there was no longer any professional relationship between the two of them
when he filed the letter-complaint for falsification of public document; that the facts
and allegations contained in the letter-complaint for falsification were culled from
public documents procured from the Office of the Register of Deeds in Tayug,
Pangasinan.5
In a Resolution dated October 18, 2000, the Court referred the case to the
Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation. 6
Commissioner Rebecca Villanueva-Maala ordered both parties to appear on
April 2, 2003 before the IBP. 7 On said date, complainant did not appear despite
due notice. There was no showing that respondent received the notice for that
day's hearing and so the hearing was reset to May 28, 2003. 8
On April 29, 2003, Commissioner Villanueva-Maala received a letter from
one Atty. Augusto M. Macam dated April 24, 2003, stating that his client, William
S. Uy, had lost interest in pursuing the complaint he filed against
Atty. Gonzales and requesting that the case against Atty. Gonzales be
dismissed. 9
On June 2, 2003, Commissioner Villanueva-Maala submitted her report and
recommendation, portions of which read as follows:
The facts and evidence presented show that when respondent
agreed to handle the filing of the Verified Petition for the loss of TCT No.
T-5165, complainant had confided to respondent the fact of the loss and
the circumstances attendant thereto. When respondent filed the Letter-
Complaint to the Office of the Special Prosecutor in Tayug, Pangasinan,
he violated Canon 21 of the Code of Professional Responsibility which
expressly provides that "A lawyer shall preserve the confidences and
secrets of his client even after the attorney-client relation is terminated."
Respondent cannot argue that there was no lawyer-client relationship
between them when he filed the Letter-Complaint on 26 July 1999
considering that as early as 14 April 1999, or three (3) months after,
 respondent had already terminated complainant's perceived lawyer-client
relationship between them. The duty to maintain inviolate the client's
confidences and secrets is not temporary but permanent. It is in effect
perpetual for "it outlasts the lawyer's employment" (Canon 37, Code of
Professional Responsibility) which means even after the relationship has
been terminated, the duty to preserve the client's confidences and secrets
remains effective. Likewise Rule 21.02, Canon 21 of the Rules of
Professional Responsibility provides that "A lawyer shall not, to the
disadvantage of his client, use information acquired in the course of
employment, nor shall he use the same to his own advantage or that of a
third person, unless the client with the full knowledge of the circumstances
consents thereto." TSEHcA

On 29 April 2003, the Commission received a letter dated 24 April

2003 from Atty. Augusto M. Macam, who claims to represent complainant,
William S. Uy, alleging that complainant is no longer interested in pursuing
this case and requested that the same be dismissed. The aforesaid letter
hardly deserves consideration as proceedings of this nature cannot be
"interrupted by reason of desistance, settlement, compromise, restitution,
withdrawal of the charges, or failure of the complainant to prosecute the
same. (Section 5, Rule 139-B, Rules of Court). Moreover,
in Boliver vs. Simbol, 16 SCRA 623, the Court ruled that "any person may
bring to this Court's attention the misconduct of any lawyer, and action will
usually be taken regardless of the interest or lack of interest of the
complainant, if the facts proven so warrant."
IN VIEW OF THE FOREGOING, we find respondent Atty. Fermin
L. Gonzales to have violated the Code of Professional Responsibility and
it is hereby recommended that he be SUSPENDED for a period of SIX (6)
MONTHS from receipt hereof, from the practice of his profession as a
lawyer and member of the Bar. 10
On June 21, 2003, the Board of Governors of the Integrated Bar of the
Philippines issued Resolution No. XV-2003-365, thus:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED
and APPROVED, the Report and Recommendation of the Investigating
Commissioner of the above-entitled case, herein made part of this
Resolution/Decision as Annex "A"; and finding the recommendation fully
supported by the evidence on record and applicable laws and rules, and
considering that respondent violated Rule 21.02, Canon 21 of the Canons
of Professional Responsibility, Atty. Fermin L. Gonzales is hereby
SUSPENDED from the practice of law for six (6) months. 11
Preliminarily, we agree with Commissioner Villanueva-Maala that the
manifestation of complainant Uy expressing his desire to dismiss the
administrative complaint he filed against respondent, has no persuasive bearing in
the present case.
Sec. 5, Rule 139-B of the Rules of Court states that:
xxx xxx xxx
No investigation shall be interrupted or terminated by reason of the
desistance, settlement, compromise, restitution, withdrawal of the
charges, or failure of the complainant to prosecute the same.
This is because:
A proceeding for suspension or disbarment is not in any sense a
civil action where the complainant is a plaintiff and the respondent lawyer
is a defendant. Disciplinary proceedings involve no private interest and
afford no redress for private grievance. They are undertaken and
prosecuted solely for the public welfare. They are undertaken for the
purpose of preserving courts of justice from the official ministration of
persons unfit to practice in them. The attorney is called to answer to the
court for his conduct as an officer of the court. The complainant or the
person who called the attention of the court to the attorney's alleged
misconduct is in no sense a party, and has generally no interest in the
outcome except as all good citizens may have in the proper administration
of justice. Hence, if the evidence on record warrants, the respondent may
be suspended or disbarred despite the desistance of complainant or his
withdrawal of the charges. 12
Now to the merits of the complaint against the respondent.
Practice of law embraces any activity, in or out of court, which requires the
application of law, as well as legal principles, practice or procedure and calls for
legal knowledge, training and experience. 13 While it is true that a lawyer may be
disbarred or suspended for any misconduct, whether in his professional or private
capacity, which shows him to be wanting in moral character, in honesty, probity
and good demeanor or unworthy to continue as an officer of the
court, 14 complainant failed to prove any of the circumstances enumerated above
that would warrant the disbarment or suspension of herein respondent.
Notwithstanding respondent's own perception on the matter, a scrutiny of
the records reveals that the relationship between complainant and respondent
stemmed from a personal transaction or dealings between them rather than the
practice of law by respondent. Respondent dealt with complainant only because
he redeemed a property which complainant had earlier purchased from his
(complainant's) son. It is not refuted that respondent paid complainant
P340,000.00 and gave him ample time to produce its title and execute the Deed
of Redemption. However, despite the period given to him, complainant failed to
fulfill his end of the bargain because of the alleged loss of the title which he had
admitted to respondent as having prematurely transferred to his children, thus
prompting respondent to offer his assistance so as to secure the issuance of a new
title to the property, in lieu of the lost one, with complainant assuming the expenses
therefor.
As a rule, an attorney-client relationship is said to exist when a lawyer
voluntarily permits or acquiesces with the consultation of a person, who in respect
to a business or trouble of any kind, consults a lawyer with a view of obtaining
professional advice or assistance. It is not essential that the client should have
employed the attorney on any previous occasion or that any retainer should have
been paid, promised or charged for, neither is it material that the attorney consulted
did not afterward undertake the case about which the consultation was had, for as
long as the advice and assistance of the attorney is sought and received, in matters
pertinent to his profession. 15
Considering the attendant peculiar circumstances, said rule cannot apply to
the present case. Evidently, the facts alleged in the complaint for "Estafa Through
Falsification of Public Documents" filed by respondent against complainant were
obtained by respondent due to his personal dealings with complainant.
Respondent volunteered his service to hasten the issuance of the certificate of title
of the land he has redeemed from complainant. Respondent's immediate objective
was to secure the title of the property that complainant had earlier bought from his
son. Clearly, there was no attorney-client relationship between respondent and
complainant. The preparation and the proposed filing of the petition was only
incidental to their personal transaction. AScHCD

Canon 21 of the Code of Professional Responsibility reads:

Canon 21 — A LAWYER SHALL PRESERVE THE CONFIDENCE
AND SECRETS OF HIS CLIENT EVEN AFTER THE ATTORNEY-
CLIENT RELATION IS TERMINATED.
Rule 21.01 — A lawyer shall not reveal the confidences or secrets
of his client except:
a) When authorized by the client after acquainting him of the
consequences of the disclosure;
b) When required bylaw;
c) When necessary to collect his fees or to defend himself, his
employees or associates or by judicial action.
The alleged "secrets" of complainant were not specified by him in his
affidavit-complaint. Whatever facts alleged by respondent against complainant
were not obtained by respondent in his professional capacity but as a redemptioner
of a property originally owned by his deceased son and therefore, when
respondent filed the complaint for estafa against herein complainant, which
necessarily involved alleging facts that would constitute estafa, respondent was
not, in any way, violating Canon 21. There is no way we can equate the filing of
the affidavit-complaint against herein complainant to a misconduct that is wanting
in moral character, in honesty, probity and good demeanor or that renders him
unworthy to continue as an officer of the court. To hold otherwise would be
precluding any lawyer from instituting a case against anyone to protect his
personal or proprietary interests.
WHEREFORE, Resolution No. XV-2003-365 dated June 21, 2003 of the
Integrated Bar of the Philippines is REVERSED and SET ASIDE and the
administrative case filed against Atty. Fermin L. Gonzales, docketed as A.C. No.
5280, is DISMISSED for lack of merit.
SO ORDERED.
Puno, Quisumbing, Callejo, Sr. and Tinga, JJ., concur.

||| (Uy v. Gonzales, A.C. No. 5280 (Resolution), [March 30, 2004])

FIRST DIVISION

[G.R. No. 104600. July 2, 1999.]

RILLORAZA, AFRICA, DE OCAMPO and

AFRICA, petitioner, vs. EASTERN TELECOMMUNICATIONS
PHILS., INC. and PHILIPPINE LONG DISTANCE
COMPANY, respondents.

Rilloraza, Africa, De Ocampo and Africa for petitioner.

Meer Meer & Meer Law Offices for PLDT.
Alampay and Manhit Law Office for PLDT.
Romulo Mabanta Buenaventura Sayoc & De Los Angeles and Arthur D. Lim
Law Office for Eastern Telecommunications Phils., Inc.

SYNOPSIS
 Declaring that the judge committed no abuse of discretion in denying
petitioner's motion for enforcement of attorney's lien, the Court of Appeals
dismissed petitioner's petition for certiorari. Hence, this action.
No one shall be unjustly enriched at the expense of another. A lawyer has
the right to be paid for the legal services he has extended to his client, which
compensation must be reasonable. A lawyer would be entitled to receive what he
merits for his services.
The trial court has the principal task of fixing the amount of attorney's fees.
Hence, the necessity of a hearing is beyond cavil.
As to petitioner's contention that it is entitled to a charging lien, the Court
held that a charging lien to be enforceable as security for the payment of attorney's
fees requires as a condition sine qua non a judgment for money and execution in
pursuance of such judgment secured in the main action by the attorney in favor of
his client. From the facts of the case, it would seem that petitioner had no hand in
the amicable settlement that occurred, nor did it ever obtain a favorable judgment
for its client.
CSIcHA

SYLLABUS

1. REMEDIAL LAW; PROCEDURAL RULES LIBERALLY CONSTRUED. —

There is nothing sacrosanct about procedural rules, which are liberally construed
in order to promote their objectives and assist the parties in obtaining just, speedy
and inexpensive determination of every action or proceeding. In an analogous
case, we ruled that where the rigid application of the rules would frustrate
substantial justice, or bar the vindication of a legitimate grievance, the courts are
justified in exempting a particular case from the operation of the rules. cCTIaS

2. LEGAL ETHICS; ATTORNEY-CLIENT RELATIONSHIP; WHEN CLIENT

EMPLOYS SERVICES OF LAW FIRM, HE DOES NOT EMPLOY LAWYER
ASSIGNED TO PERSONALLY HANDLE CASE BUT EMPLOYS ENTIRE FIRM.
— Petitioner contends that Atty. Rilloraza initiated the filing of the complaint. When
a client employs the services of a law firm, he does not employ the services of the
lawyer who is assigned to personally handle the case. Rather, he employs the
entire law firm. In the event that the counsel appearing for the client resigns, the
firm is bound to provide a replacement. Thus, RADA could not claim to have
initiated the filing of the complaint considering that ETPI hired SAGA. What is
more, on September 17, 1987, ETPI paid SAGA the amount of One Hundred
Thousand Pesos (P100,000.00) representing services performed prior to
September 17, 1987. SAGA assigned one of its associates, Atty.
Francisco Rilloraza, to handle the case for the firm. Although
Atty. Rillorazahandled the case personally, he did so for and in behalf of SAGA.
 3. ID.; ID.; ATTORNEY'S FEES; AMOUNT DETERMINED BY QUANTUM
MERUIT BASIS. — "In any case, whether there is an agreement or not, the courts
shall fix a reasonable compensation which lawyers may receive for their
professional services." "A lawyer has the right to be paid for the legal services he
has extended to his client, which compensation must be reasonable." A lawyer
would be entitled to receive what he merits for his services. Otherwise stated, the
amount must be determined on a quantum meruit basis.
4. ID.; ID.; ID.; ID.; QUANTUM MERUIT, DEFINED. — "Quantum meruit,
meaning "as much as he deserved" is used as a basis for determining the lawyer's
professional fees in the absence of a contract but recoverable by him from his
client." Recovery of attorney's fees on the basis of quantum meruit is authorized
when (1) there is no express contract for payment of attorney's fees agreed upon
between the lawyer and the client; (2) when although there is a formal contract for
attorney's fees, the fees stipulated are found unconscionable or unreasonable by
the court; and (3) when the contract for attorney's fees is void due to purely formal
defects of execution; (4) when the counsel, for justifiable cause, was not able to
finish the case to its conclusion; (5) when lawyer and client disregard the contract
for attorney's fees.
5. ID.; ID.; ID.; ID.; ELEMENTS TO BE CONSIDERED. — In fixing a
reasonable compensation for the services rendered by a lawyer on the basis
of quantum meruit, the elements to be considered are generally (1) the importance
of the subject matter in controversy, (2) the extent of services rendered, and (3)
the professional standing of the lawyer. A determination of these factors would
indispensably require nothing less than a full-blown trial where private respondents
can adduce evidence to establish the right to lawful attorney's fees and for
petitioner to oppose or refute the same. The trial court has the principal task of
fixing the amount of attorney's fees. Hence, the necessity of a hearing is beyond
cavil.
6. ID.; ID.; ID.; CHARGING LIEN, CONSTRUED; FAVORABLE
JUDGMENT, NECESSARY. — A charging lien to be enforceable as security for
the payment of attorney's fees requires as a condition sine qua non a judgment for
money and execution in pursuance of such judgment secured in the main action
by the attorney in favor of his client. A charging lien presupposes that the attorney
has secured a favorable money judgment for his client. From the facts of the case
it would seem that petitioner had no hand in the settlement that occurred, nor did
it ever obtain a favorable judgment for ETPI. ECaTDc

DECISION
PARDO, J : p

The Issue
The basic issue submitted for consideration of the Court is whether or not
petitioner is entitled to recover attorney's fees amounting to Twenty Six Million
Three Hundred Fifty Thousand Seven Hundred Seventy Nine Pesos and Ninety
One Centavos (P26,350,779.91) for handling the case for its
client Eastern Telecommunications Philippines, Inc. filed with the Regional Trial
Court, Makati, though its services were terminated in midstream and the client
directly compromised the case with the adverse party. dctai

The Facts
In giving due course to the petition, we carefully considered the facts
attendant to the case. On August 28, 1987, Eastern Telecommunications
Philippines, Inc. (ETPI) represented by the law firm San Juan, Africa, Gonzales
and San Agustin (SAGA), filed with the Regional Trial Court, Makati, a complaint
for recovery of revenue shares against Philippine Long Distance Telephone
Company (PLDT). Atty. Francisco D. Rilloraza, a partner of the firm appeared for
ETPI.
After ETPI rested its case, it paid SAGA the billed amount of One Hundred
Thousand Pesos (P100,000.00). On September 18, 1987, the trial court issued a
resolution granting ETPI's application for preliminary restrictive and mandatory
injunctions. During this period, SAGA was dissolved and four of the junior partners
formed the law firm Rilloraza, Africa, De Ocampo & Africa (RADA), which took over
as counsel in the case for ETPI. The latter signed a retainer agreement with
counsel dated October 1, 1987. 1
Petitioners presented the three aspects of the main case in the trial court.
First, the traffic revenue shares which ETPI sought to recover from PLDT in
accordance with the contract between them. Second, ETPI sought preventive
injunctive relief against the PLDT's threats to deny ETPI access to the Philippines
international gateway switch. Third, ETPI called this the "foreign
correspondentships aspect" where ETPI sought preventive injunctive relief against
PLDT's incursions and inducements directed at ETPI's foreign correspondents in
Hongkong, Taiwan and Singapore, to break their correspondentship contracts with
PLDT, using the threat of denying them access to the international gateway as
leverage.
In this connection, ETPI filed with the trial court two urgent motions for
restraining order, one on October 30, 1987 and another on November 4, 1987. As
the applications were not acted upon, ETPI brought the case up to the Court of
Appeals by petition for certiorari.
 On June 28, 1988, petitioner received a letter from ETPI signed by E. M.
Villanueva, President and Chief Executive Officer. In substance, the letter stated
that ETPI was terminating the retainer contract dated October 1, 1987, effective
June 30, 1988.
On June 29, 1988, petitioner filed with the Regional Trial Court a notice of
attorney's lien, furnishing copies to the plaintiff ETPI, to the signatory of the
termination letter and PLDT. On the same date, petitioner additionally sent a letter
to ETPI attaching its partial billing statement. In its notice, RADA informed the court
that there were negotiations toward a compromise between ETPI and PLDT.
In April 1990, petitioner confirmed that indeed the parties arrived at an
amicable settlement and that the same was entered as a judgment. On April 26,
1990, petitioner filed a motion for the enforcement of attorney's lien with the
Regional Trial Court of Makati and then appraised the Supreme Court thereof by
manifestation. 2We noted the manifestation in a resolution dated July 23, 1990.
On May 24, 1990, PLDT filed with the trial court a manifestation that it is not
a party to nor in any manner involved in the attorney's lien being asserted by
Atty.Rilloraza for and in behalf of the law firm, 3 while ETPI filed its opposition
thereto on June 11, 1990.
The Lower Court's Ruling
The trial court in its resolution dated September 14, 1990 denied the motion
for enforcement of attorney's lien. Thus:
"WHEREFORE, premises considered, the court finds that the
Notice of Attorney's Lien filed by the law firm of Rilloraza, Africa, De
Ocampo and Africa has no basis in fact and in law, and therefore denies
the Motion for Enforcement of Attorney's Lien.dctai

"SO ORDERED.
"Makati, Metro Manila, September 4, 1990.
"(s/t) ZEUS C. ABROGAR
"Judge" 4
On October 10, 1990, petitioner filed with the trial court a notice of appeal
from the above-mentioned order to the Supreme Court. On November 6, 1990,
ETPI filed a Motion to Dismiss Appeal contending that the case could be brought
to the Supreme Court only via a petition for review on certiorari, not by a mere
notice of appeal. In an order dated January 16, 1991, the trial court dismissed
RADA's appeal.
The trial court said:
"There is no more regular appeal from the Regional Trial Court to
the Supreme Court. Under the amendment of Section 17 of the Judiciary
 Act by R.A. 5440, orders and judgments of the Regional Trial Court may
be elevated to the Supreme Court only by petition for review on certiorari.
xxx xxx xxx
"Wherefore, premises considered, the order dated September 14,
1990 is hereby reconsidered and set aside. The Notice of Appeal filed by
movant RADA is dismissed.
"SO ORDERED.
"Given this 16th day of January, 1991, at Makati, Metro Manila.
"(s/t) ZEUS C. ABROGAR
"Judge" 5
Hence, on February 9, 1991, petitioner filed a petition for certiorari with the
Supreme Court, which we remanded to the Court of Appeals. The latter dismissed
the petition in a decision promulgated on November 14, 1991, 6 ruling that the
judge committed no abuse of discretion in denying petitioner's motion for
enforcement of attorney's lien. Thus:
"We therefore rule that respondent judge committed no abuse of
discretion, much less a grave one, in denying petitioner's motion for
enforcement of attorney's lien.
"Assuming that respondent judge committed an error in denying
petitioner's motion for enforcement of attorney's lien, it cannot be
corrected by certiorari.
"WHEREFORE, the writs prayed for are DENIED, and the petition
is hereby DISMISSED, with cost against petitioner.
"SO ORDERED.
"(s/t) REGINA G. ORDOÑEZ-BENITEZ
"Associate Justice"
"WE CONCUR:
"(s/t) JOSE A. R. MELO "(s/t) EMETERIO C. CUI
"Associate Justice "Associate Justice" 7
DISCUSSION
A. The Procedural Aspect
There is nothing sacrosanct about procedural rules, which are liberally
construed in order to promote their objectives and assist the parties in obtaining
just, speedy and inexpensive determination of every action or proceeding. 8 In an
analogous case, 9 we ruled that where the rigid application of the rules would
frustrate substantial justice, 10 or bar the vindication of a legitimate grievance, the
courts are justified in exempting a particular case from the operation of the rules.
In A-One Feeds, Inc. vs. Court of Appeals, we said —
"Litigations should, as much as possible, be decided on the merits
and not on technicality. Dismissal of appeals purely on technical grounds
is frowned upon, and the rules of procedure ought not to be applied in a
very rigid, technical sense, for they are adopted to help secure, not
override, substantial justice and thereby defeat their very claims. As has
been the constant ruling of this Court, every party litigant should be
afforded the amplest opportunity for the proper and just determination of
his cause, free from the constraints of technicalities." 11
A basic legal principle is that no one shall be unjustly enriched at the
expense of another. 12 This principle is one of the mainstays of every legal system
for centuries and which the Civil Code echoes:
"ARTICLE 22. Every person who through an act of performance by
another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall
return the same to him." 13
The Code Commission, its report, emphasized that:
"It is most needful that this ancient principle be clearly and
specifically consecrated in the proposed Civil Code to the end that in
cases not foreseen by the lawmaker, no one may unjustly benefit himself
to the prejudice of another. The German Civil Code has a similar provision
(Art. 812)." 14
With this in mind, one could easily understand why, despite technical
deficiencies, we resolved to give due course to this petition. More importantly, the
case on its face appears to be impressed with merit. LLjur

B. The Attorney's Fees

We understand that Atty. Francisco Rilloraza handled the case from its
inception until ETPI terminated the law firm's services in 1988. Petitioner's claim
for attorney's fees hinges on two grounds: first, the fact that
Atty. Rilloraza personally handled the case when he was working for SAGA; and
second, the retainer agreement dated October 1, 1987.
We agree that petitioners are entitled to attorneys' fees. We, however, are
not convinced with the petitioner's arguments that the services RADA rendered
merit the amount they are claiming.
First, petitioner contends that Atty. Rilloraza initiated the filing of the
complaint. When a client employs the services of a law firm, he does not employ
the services of the lawyer who is assigned to personally handle the case. Rather,
he employs the entire law firm. In the event that the counsel appearing for the client
resigns, the firm is bound to provide a replacement. Thus, RADA could not claim
to have initiated the filing of the complaint considering that ETPI hired SAGA. What
is more, on September 17, 1987, ETPI paid SAGA the amount of One Hundred
Thousand Pesos (P100,000.00) 15 representing services performed prior to
September 17, 1987. SAGA assigned one of its associates, Atty.
Francisco Rilloraza, to handle the case for the firm. Although
Atty. Rilloraza handled the case personally, he did so for and in behalf of SAGA.
Second, petitioner claims that under the retainer agreement, which provides:
"6.2 B. Court Cases:
Should recourse to judicial action be necessary to effect collection
or judicial action be taken by adverse party, our attorney's fees shall be
fifteen percent (15%) of the amounts collected or the value of the property
acquired or liability saved." 16LexLib

the firm is entitled to the fees agreed upon.

However, the retainer agreement has been terminated. True,
Attorney Rilloraza played a vital role during the inception of the case and in the
course of the trial. We cannot also ignore the fact that an attorney-client
relationship between petitioner and respondent no longer existed during its
culmination by amicable agreement. To award the attorneys' fees amounting to
15% of the sum of One Hundred Twenty Five Million Six Hundred Seventy One
Thousand Eight Hundred Eighty Six Pesos and Four Centavos (P125,671,886.04)
plus Fifty Million Pesos (P50,000,000.00) paid by PLDT to ETPI would be too
unconscionable.
"In any case, whether there is an agreement or not, the courts shall fix a
reasonable compensation which lawyers may receive for their professional
services." 17 "A lawyer has the right to be paid for the legal services he has
extended to his client, which compensation must be reasonable." 18 A lawyer
would be entitled to receive what he merits for his services. Otherwise stated, the
amount must be determined on a quantum meruit basis.
"Quantum meruit, meaning 'as much as he deserved' is used as a basis for
determining the lawyer's professional fees in the absence of a contract but
recoverable by him from his client." 19 Recovery of attorney's fees on the basis
of quantum meruit is authorized when (1) there is no express contract for payment
of attorney's fees agreed upon between the lawyer and the client; (2) when
although there is a formal contract for attorney's fees, the fees stipulated are found
unconscionable or unreasonable by the court; and (3) when the contract for
attorney's fees is void due to purely formal defects of execution; (4) when the
counsel, for justifiable cause, was not able to finish the case to its conclusion; (5)
when lawyer and client disregard the contract for attorney's fees. 20
 In fixing a reasonable compensation for the services rendered by a lawyer
on the basis of quantum meruit, the elements to be considered are generally (1)
the importance of the subject matter in controversy, (2) the extent of services
rendered, and (3) the professional standing of the lawyer. A determination of these
factors would indispensably require nothing less than a full-blown trial where
private respondents can adduce evidence to establish the right to lawful attorney's
fees and for petitioner to oppose or refute the same. 21 The trial court has the
principal task of fixing the amount of attorney's fees. 22 Hence, the necessity of a
hearing is beyond cavil.
C. Charging Lien
Petitioner contends that pursuant to Rule 138 of the Revised Rules of Court,
it is entitled to a charging lien. The rule provides:
"SECTION 37. Attorney's liens. — An attorney shall have a lien
upon the funds, documents and papers of his client, which have lawfully
come into his possession and may retain the same until his lawful fees
and disbursements have been paid, and may apply such funds to the
satisfaction thereof. He shall also have a lien to the same extent upon all
judgments for the payment of money, and executions issued in pursuance
of such judgments, which he has secured in a litigation of his client, from
and after the time when he shall have caused a statement of his claim of
such lien to be entered upon the records of the court rendering such
judgment, or issuing such execution, and shall have caused written notice
thereof to be delivered to his client and to the adverse party; and he shall
have the same right and power over such judgments and executions as
his client would have to enforce his lien and secure the payment of his just
fees and disbursements." (Emphasis supplied)
We do not agree. A charging lien to be enforceable as security for the
payment of attorney's fees requires as a condition sine qua non a judgment for
money and execution in pursuance of such judgment secured in the main action
by the attorney in favor of his client. 23 A charging lien presupposes that the
attorney has secured a favorable money judgment for his client. 24 From the facts
of the case it would seem that petitioner had no hand in the settlement that
occurred, nor did it ever obtain a favorable judgment for ETPI.
ETPI entered into a compromise agreement when it ended the services of
petitioner and through the effort of ETPI's new lawyers, the law firm Romulo,
Mabanta, Buenaventura, Sayoc and De los Angeles. Whether there was bad faith
in the substitution of the lawyers to avoid compliance with the retainer agreement
could only be determined after a trial of the case on the merits.
This decision, however, should not be interpreted as to impose upon
petitioner any additional burden in collecting its attorney's fees. The petitioner must
avail itself of the proper remedy in order to forestall the possibility of any injustice
on or unjust enrichment of any of the parties.
The Judgment (Fallo)
ACCORDINGLY, the Court GRANTS the petition, REVERSES the decision
of the Court of Appeals in CA-G.R. SP No. 24463 and REMANDS the case to the
court of origin for the determination of the amount of attorney's fees to which
petitioner is entitled. cdphil

No costs.
SO ORDERED.
Davide, Jr., C.J., Kapunan and Ynares-Santiago, JJ., concur.
Melo, J., took no part.

(Rilloraza v. Eastern Telecommunications Phils., Inc., G.R. No. 104600, [July 2,

|||

1999], 369 PHIL 1-13)

EN BANC

[G.R. No. 30641. December 18, 1929.]

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-

appellee, vs. J. O. WAGNER, ET AL., defendants-appellants.

Manuel Escudero and William F. Mueller, for appellants.

Attorney-General Jaranilla, for appellee.

SYLLABUS

1. CONTRACTS; RESCISSION; RESTORATION AS CONDITION TO

RESCISSION. — The party who asks for rescission must restore to the other
party whatever has been received under the contract (Government of the
Philippine Islands vs. Wagner and Cleland Wagner [1927], 49 Phil., 944).
2. ID.; ID.; ID. — Proceeding under this rule of law, it is held that the
amount which the Government should refund to the defendants as a
prerequisite to the rescission of the contract and the cancellation of the patent
and title is P4,000.
 3. ID.; PRINCIPAL AND AGENT; POWER OF ATTORNEY. — A person
who is made an attorney-in-fact, with the same power and authority to deal with
the property which the principals might or could have had if personally present,
may adopt the usual legal means to accomplish the object, including
acceptance of service and engaging of counsel to preserve the ownership and
possession of the principal's property.

DECISION

MALCOLM, J : p

There are two branches to the appeal in this case. As between

the Government of the Philippine Islands and J. O. Wagner, Catherine
Cleland Wagner, and J. J. Murphy, represented by counsel, the issue is the
amount of the refund which the Government should make to the defendants
as a condition to rescission of the contract of sale. As between
the Government and J. O. Wagner and Catherine Cleland Wagner,
represented by other counsel, the issue is the jurisdiction of the courts over
the persons of these defendants.
I. In amplification of the preliminary introduction of the first branch of the
case, it may be said that when this case was in the appellate court before
([1927], 49 Phil., 944), it was ordered that the record be remanded to the
lower court "for the taking of testimony to determine the amount which
the Government should refund to the defendants as a prerequisite to the
rescission of the contract, and the cancellation of the patent and the title." In
the body of the decision, the same thought was elucidated by this statement:
"The Government, having asked for rescission, must restore to the defendants
whatever it has received under the contract. It will only be just if, as a
condition to rescission, the Government be required to refund to the
defendants an amount equal to the purchase price, plus the sums expended
by them in improving the land. (Civil Code, art. 1295.)" In compliance with the
foregoing order and observations, a hearing was had in the Court of First
Instance of Benguet. Both parties offered a number of witnesses. After the
hearing, the court found that P1,200 had been expended by the defendants
for improvements on lot 29-F of the Baguio townsite, and that upon the
payment of this sum, plus the amount of P960.60, the sale price of the lot, the
contract of sale would be rescinded and the patent and certificate of title for lot
29-F cancelled.
 As addressed to the judgment of the trial court naming a total of
P2,160.60 as the amount to be paid by the Government as a prerequisite to
rescission of the contract, three errors are assigned, viz.:
"1. The lower court erred in admitting contour map, Exhibit A, and
all testimony based thereon.
"2. The lower court erred in not finding that the defendants had
spent P19,000 for improving lot No. 29.
"3. The lower court erred in finding that but P1,200 had been
expended for improving lot 29, and in ordering the rescission of the
contract, and the cancellation of the patent certificate of title therefor."
Regarding the first error, the record discloses that the contour map,
Exhibit A, was admitted without objection. Regarding the second and third
errors which go to the merits, it is evident at a glance that the defendants
cannot be allowed P19,000 for improving lot 29-F for otherwise this court
would not have reached the decision it did formerly, and would not have found
as it did find "that the defendants, as well as the intervenor, had failed to
construct improvements on the land of the value of P15,000." The conclusions
of the trial judge, which make reasonable allowances in favor of the
defendants, of 3,000 cubic meters of excavation and filling at 40 centavos per
cubic meter are not at all unjust. Six hundred pesos for the plan for the
proposed cinematograph building is not a proper item to be taken into
account. A refund for taxes may not be allowed since not contemplated in our
order, and since not coming within the purview of article 1295 of the Civil
Code. However, having in mind the interest lost on the price paid and the
expenses which the defendants have incurred, we are inclined to be
somewhat more liberal than was the trial judge. Everything considered, we
feel that a lump sum of P4,000 may fairly be substituted for the P2,160.00
named in the judgment of the trial court.
II. That this court has not seen fit to take up and decide at the outset of
this decision the challenge to its jurisdiction and the jurisdiction of the trial
court, discloses how little the long and complicated arguments of the
intervenors have impressed the members of the court.
When these proceedings were initiated, service was made on J. J.
Murphy as the owner of a one-half undivided interest in the property, and on
J. J. Murphy as the attorney-in-fact for the Wagners, the owners of the
remaining one-half interest. Counsel was engaged by Murphy, who
represented the defendants both in the trial court and in this court without
objection. It was only after the record had been returned to the trial court for
the taking of further evidence that the jurisdiction of the court was impugned.
The trial court overruled such objection, as likewise did this court, but
subsequently we permitted counsel to intervene to elucidate his position.
 At the time Murphy accepted service, he had in his possession the
following power of attorney:
"Know all men by these presents, that we, J. O. Wagner and
Catherine Cleland Wagner, husband and wife, citizens of the United
States of America now residing at Baguio, subprovince of Benguet,
Mountain Province, Philippine Islands, have made, constituted, and
appointed, and by these presents do make, constitute, and appoint J. J.
Murphy, of Baguio, subprovince of Benguet, Mountain Province,
Philippine Islands, our true and lawful attorney for us and in our name,
place and stead, to use, lease, sell and convey lot numbered twenty-nine
(29) section F, in Baguio townsite, subprovince of Benguet, Mountain
Province, Philippine Islands, of which land Catherine Cleland Wagner is
the recorded owner as demonstrated by official receipt numbered 792232
(seven hundred and ninety-two thousand two hundred and thirty-two)
issued by the Director of Lands, on May 3d, 1913, said lot containing eight
thousand and five (8,005) square meters, and for us and in our names to
make, seal, and deliver, and in any and every way and manner deal in the
above-mentioned property.
"And in short our said attorney, J. J. Murphy, is given full and
complete authority over this aforementioned lot to do as he may deem
best. Giving and granting unto our said attorney full power and authority
to do and perform all and every lawful act and thing whatever requisite
and necessary to be done in and about the premises as fully to all intents
and purposes as we might or could do if personally present hereby
ratifying and confirming all that our said attorney shall lawfully do or cause
to be done by virtue of these presents.
"In witness whereof, we have hereunto signed our names on this
14th day of May, A. D. nineteen hundred and seventeen.
"Signed in the presence of:

(Sgd.) "JAMES A. WRIGHT

"FRANCISCO AQUINO

(Sgd.) "J. O. WAGNER

"CATHERINE CLELAND WAGNER"

"UNITED STATES OF AMERICA

"PHILIPPINE ISLANDS
"CITY OF BAGUIO
 "At the municipality of Baguio, in the subprovince of Benguet, in
the Mountain Province, on this 14th day of May, A. D. 1917, personally
appeared J. O. Wagner and Catherine Cleland Wagner, known to me to
be husband and wife and the same persons who executed the foregoing
instrument, and acknowledged that the same is their free act and deed.
"J. O. Wagner exhibited cedula No. A-30072, issued at Baguio, P.
I., on Jan. 6th, 1917.
"Before me.
(Sgd.) "PASCUAL PACIS
"Notario Público

"El nombramiento termina 31 de dic., 1917"

All that Wilbur S. Wilson and his counsel presented to offset the
authority of Murphy was a cablegram said to have been sent by the Wagners
to Wilson on July 25, 1928, and reading as follows:
"We authorize you take all legal means protect our interest lot 29-
F, Baguio."
J. J. Murphy had, of course, the right to represent his one-half
undivided interest in the land in dispute. He also had the right under the
universal power of attorney to represent the Wagners. The intention of the
parties, which, as in all written instruments should prevail, was to give Murphy
the same power and authority to deal with the property which the Wagners
might or could have had if personally present. The usual legal means were
adopted to accomplish the object. The most effective way by which Murphy
could preserve the ownership and possession of his principal's property was
by accepting service and by defending the rights of the absent owners in the
courts. Every act of Murphy was taken for the benefit of the Wagners.
Attorney Mueller handled the case for the defendants as ably and
conscientiously as any attorney could have done. (There can be noted 21 R.
C. L., pp. 881-882; Liñan vs. Puno [1915], 31 Phil., 259; 11 Manresa, Código
Civil, 1st ed., p. 455.)
The cablegram constitutes a very slight basis on which to claim a
revocation by the principals of the power of attorney. Moreover, to set
everything aside which has taken place would prove of no benefit to the
parties.
The result is to rule against the attempted intervention by sustaining the
jurisdiction of the courts, and on the merits to adhere to the appealed decision
in its principal aspects.
 In accordance with the foregoing, the intervention will be disallowed,
and the judgment appealed from will be affirmed, with the modification that in
lieu of the items of P1,200 and P960.60 mentioned in the judgment, P4,000
will be substituted. So ordered without special pronouncement as to costs in
this instance.
Avanceña, C.J., Johnson, Ostrand, Johns and Villa-Real, JJ., concur.
Street, J., I vote to affirm.

(Government of the Philippine Islands v. Wagner, G.R. No. 30641, [December

|||

18, 1929], 54 PHIL 132-137)

FIRST DIVISION

[G.R. No. L-38768. July 23, 1974.]

ORBIT TRANSPORTATION COMPANY, petitioner, vs. WORKME

N'S COMPENSATION COMMISSION and MELECIO CRESPO in
behalf of minor ROSALINE CRESPO, respondents.

RESOLUTION

TEEHANKEE, J : p

The Court administers a reprimand to counsels for petitioner for not

having pleaded and instead having suppressed from their statement of the case
and of the questions of law involved in the petition material facts found in the
respondent commission's decision sought to be appealed from, which show the
petition's lack of merit.
On June 13, 1974, Messrs. Sergio D. Vendero and Renerio R. Bartonico
as counsel for petitioner filed the petition at bar for review of respondent
Workmen's Compensation Commission's decision and resolution directing
petitioner to pay respondent-claimant (as grandchild-dependent of the
deceased driver-employee)inter alia the principal sum of P4,360.00 as
compensation and burial expenses.
In their "summary statement of the matters involved," counsel claimed
that the "questions of law involved" were:
 "1. It was an error not to consider the payment of P5,000.00 in
Philippine currency as full and complete payment of the compensation for
the death of Ramon Crespo.
"2. It was an error to disregard the express and obvious statement
in Exhibit 1 of such payment."
Counsel further contended that "in this particular case, the petitioner
voluntarily paid the amount of P5,000.00 in cash as evidenced by Exhibit 1.
Certainly, the Workmen's Compensation Commission or any government
agency for that matter cannot say that voluntary payment and the evidence of
such payment violate the provisions of Act 3428 simply because the same did
not pass through its office," and that "(T)here can be no other conclusion but
that the entire case hinges on the question of whether or not the payment of
P5,000.00 in cash as evidenced by Exhibit 1 (Settlement and Release of Claim)
is in full and complete compensation for the death of Ramon Crespo in
accordance with the Workmen's Compensation Law. This matter is certainly a
question of law."
Upon consideration of the allegations of the petition and verifying
the ratio decidendi of respondent commission's decision about which the
petition was silent, the Court found that material facts bearing on the petition's
lack of merit had been suppressed.
In denying the petition for lack of merit, the Court accordingly in its
resolution of June 28, 1974 required counsel to show cause why they "should
not be disciplinarily dealt with for suppressing from (their) statement of the case
and questions of law involved in the petition the material facts found in the
Workmen's Compensation Commission's decision 'that the amount of
P5,000.00 claimed to be the compensation for the death of Ramon Crespo by
the respondent (herein petitioner) is the proceeds of the insurance procured by
the deceased with premiums paid from the daily income of the late Ramon
Crespo' (at pages 3-4, WCCdecision, Annex B, petition) and that the claim was
an uncontroverted claim (at pages 4-5, idem) with the apparent intent of
misleading the Court as to the merits of the petition.'"
Counsel promptly filed their "explanation and apology" on July 11, 1974.
They pleaded haste and time pressure (as indeed they filed the petition at bar
within the original ten-day reglementary period) and "beg(ged) forgiveness and
promise(d) to be more cautious and discreet in so filing a pleading with this
Honorable Court or with any court, body or commission for that matter."
They further sought to explain that "(T)hat matter of payment of
P5,000.00 being 'the proceeds of the insurance procured by the deceased with
premiums paid from the daily income of the late Ramon Crespo' (at pages 3-
4 WCC decision, Annex 'B') and the failure to controvert the claim were never
touched and argued against in said petition because first, a copy of the decision
was already attached to the petition forming part thereof; secondly, if the
petition were given due course, the entire records of the case would be elevated
to the Honorable Court for evaluation; . . .,"
While the Court is disposed under the circumstances to be lenient and to
dispose of the grave transgressions of counsel with a reprimand and warning,
the Court deems this a timely occasion to remind counsel in particular and
practitioners in general that time-pressure provides no justification for
the suppression ofmaterial and vital facts which bear on the merit or lack of
merit of a petition.
The Court has time and again 1 stressed that members of the bar owe
fidelity to the courts as well as to their clients and that they must show faithful
adherence to the provisions of Rule 7, section 5 that "the signature of an
attorney constitutes a certificate by him that he has read the pleading and that
to the best of his knowledge, information and belief, there is good ground to
support it; and that it is not interposed for delay" with the admonition therein
that "for a willful violation of this rule an attorney may be subjected to
disciplinary action."
The cooperation of litigants and their attorneys is required so that
needless clogging of the court dockets with unmeritorious cases may be
avoided leaving the courts free to devote their time and attention to meritorious
and truly contentious cases. In this, the attorney plays a major role of advising
his client to refrain from seeking further appellate review and action in plainly
untenable cases.
Counsel's profferred excuse for their suppression of the material facts
that the receipt signed by the deceased employee's heirs was in payment of
the deceased's insurance (not compensation) and that respondent was entitled
to the compensation award as the claim was uncontroverted, to wit, that a copy
of respondent commission's decision was attached to the petition,
manifestly violates the requirement of Rule 43, section 2 2 that "the petition shall
contain a concise statement of the issues involved and the grounds relied
on for the petition . . ." and that "the questions raised must be distinctly set
forth in the petition."
Rule 8, section 1 lays down the fundamental rule on pleadings that "Every
pleading shall contain in a methodical and logical form, a plain,
concise and directstatement of the ultimate facts on which the party pleading
relies for his claim or defense, as the case may be, omitting the statement of
mere evidentiary facts." 3
Hence, the Court has always stressed the long-standing fundamental
doctrine of Cañete vs. Wislizenus 4 that exhibits or annexes attached to a
complaint or petition do not take the place of allegations of the ultimate
 facts constituting the cause of action (of the complaint or petition) which the
pleader is under obligation to plead concisely and specifically as if his pleading
had no annexes, under pain of peremptory dismissal of his complaint or
petition. Justice Moreland thus succinctly explained the rationale for this basic
rule: "(A) court is not obliged, in order to know what the plaintiff's cause of action
is, to search through a list of exhibits, more or less lengthy, and select what the
court presumes the pleader intended to allege. The complaint itself must
contain all of the facts necessary to establish plaintiff's cause of action so that
when the court reads it can see upon the face of the complaint itself whether or
not a cause of action is stated. If the pleader desires to refer to any motion or
order or other proceeding and to make it a part of his complaint he must set out
in the complaint itself the nature of the proceeding and the substance thereof
in such a way as to show its relationship to and its effect upon the cause of
action."
It is plainly evident by the same token that material facts established in
the annexes attached to the complaint or petition which disprove or
are contrary to the very allegations of the pleader should not be suppressed in
the pleader's statement of his case and of the issues involved but must be
specifically averred so that the Court may have before it
a full and complete picture of the questions raised in the light of all the material
facts fully found to have been established at the trial or hearing.
ACCORDINGLY, the Court administers a reprimand to Attys. Sergio D.
Vendero and Renerio B. Bartonico with the warning that a repetition of the same
or other violations of their attorney's oath will be severely dealth with. Let copies
of this resolution be entered in their personal record and furnished the
Integrated Bar of the Philippines.
Makalintal, C.J., Castro, Makasiar, Esguerra and Muñoz Palma,
JJ., concur.

(Orbit Transportation Co. v. Workmen's Compensation Commission, G.R. No. L-

|||

38768 (Resolution), [July 23, 1974], 157 PHIL 81-87)

SECOND DIVISION

[G.R. No. L-23815. June 28, 1974.]

 ADELINO H. LEDESMA, petitioner, vs. HON. RAFAEL
C. CLIMACO, Presiding Judge of the Court of First Instance of
Negros Occidental, Branch I, Silay City, respondent.

Adelino E. Ledesma in his own behalf.

Hon. Rafael C. Climaco in his own behalf.

DECISION

FERNANDO, J : p

What is assailed in this certiorari proceeding is an order of respondent

Judge denying a motion filed by petitioner to be allowed to withdraw as
counsel de oficio. 1 One of the grounds for such a motion was his allegation that
with his appointment as Election Registrar by the Commission on Elections, he
was not in a position to devote full time to the defense of the two accused. The
denial by respondent Judge of such a plea, notwithstanding the conformity of
the defendants, was due "its principal effect [being] to delay this case." 2 It was
likewise noted that the prosecution had already rested and that petitioner was
previously counsel de parte, his designation in the former category being
precisely to protect him in his new position without prejudicing the accused. It
cannot be plausibly asserted that such failure to allow withdrawal of de
oficio counsel could ordinarily be characterized as a grave abuse of discretion
correctible by certiorari. There is, however, the overriding concern for the right
to counsel of the accused that must be taken seriously into consideration. In
appropriate cases, it should tilt the balance. This is not one of them. What is
easily discernible was the obvious reluctance of petitioner to comply with the
responsibilities incumbent on the counsel de oficio. Then, too, even on the
assumption that he continues in his position, his volume of work is likely to be
very much less at present. There is not now the slightest pretext for him to shirk
an obligation a member of the bar, who expects to remain in good standing,
should fulfill. The petition is clearly without merit.
According to the undisputed facts, petitioner, on October 13, 1964, was
appointed Election Registrar for the Municipality of Cadiz, Province of Negros
Occidental. Then and there, he commenced to discharge its duties. As he was
counsel de parte for one of the accused in a case pending in the sala of
respondent Judge, he filed a motion to withdraw as such. Not only did
respondent Judge deny such motion, but he also appointed him counsel de
oficio for the two defendants. Subsequently, on November 3, 1964, petitioner
filed an urgent motion to be allowed to withdraw as counsel de oficio, premised
on the policy of the Commission on Elections to require full time service as well
as on the volume or pressure of work of petitioner, which could prevent him
from handling adequately the defense. Respondent Judge, in the challenged
order of November 6, 1964, denied said motion. A motion for reconsideration
having proved futile, he instituted this certiorari proceeding. 3
As noted at the outset, the petition must fail.
1. The assailed order of November 6, 1964 denying the urgent motion of
petitioner to withdraw as counsel de oficio speaks for itself. It began with a
reminder that a crime was allegedly committed on February 17, 1962, with the
proceedings having started in the municipal court of Cadiz on July 11, 1962.
Then respondent Judge spoke of his order of October 16, 1964 which reads
thus: "In view of the objection of the prosecution to the motion for postponement
of October 15, 1964 (alleging that counsel for the accused cannot continue
appearing in this case without the express authority of the Commission on
Elections); and since according to the prosecution there are two witnesses who
are ready to take the stand, after which the government would rest, the motion
for postponement is denied. When counsel for the accused assumed office as
Election Registrar on October 13, 1964, he knew since October 2, 1964 that
the trial would be resumed today. Nevertheless, in order not to prejudice the
civil service status of counsel for the accused, he is hereby designated
counsel de oficio for the accused. The defense obtained postponements on
May 17, 1963, June 13, 1963, June 14, 1963, October 28, 1963, November 27,
1963, February 11, 1964, March 9, 1964, June 8, 1964, July 26, 1964, and
September 7, 1964." 4 Reference was then made to another order of February
11, 1964: "Upon petition of Atty. Adelino H. Ledesma, alleging indisposition, the
continuation of the trial of this case is hereby transferred to March 3, 1964 at
8:30 in the morning. The defense is reminded that at its instance, this case has
been postponed at least eight (8) times, and that the government witnesses
have to come all the way from Manapala." 5 After which, it was noted in such
order that there was no incompatibility between the duty of petitioner to the
accused and to the court and the performance of his task as an election
registrar of the Commission on Elections and that the ends of justice "would be
served by allowing and requiring Mr. Ledesma to continue as counsel de
oficio, since the prosecution has already rested its case." 6
2. What is readily apparent therefore, is that petitioner was less than duly
mindful of his obligation as counsel de oficio. He ought to have known that
membership in the bar is a privilege burdened with conditions. It could be that
for some lawyers, especially the neophytes in the profession, being appointed
counselde oficio is an irksome chore. For those holding such belief, it may come
as a surprise that counsel of repute and of eminence welcome such an
opportunity. It makes even more manifest that law is indeed a profession
dedicated to the ideal of service and not a mere trade. It is understandable then
why a high degree of fidelity to duty is required of one so designated. A recent
statement of the doctrine is found in People v. Daban: 7 "There is need anew in
this disciplinary proceeding to lay stress on the fundamental postulate that
membership in the bar carries with it a responsibility to live up to its exacting
standard. The law is a profession, not a trade or a craft. Those enrolled in its
ranks are called upon to aid in the performance of one of the basic purposes of
the State, the administration of justice. To avoid any frustration thereof,
especially in the case of an indigent defendant, a lawyer may be required to act
as counsel de oficio. The fact that his services are rendered without
remuneration should not occasion a diminution in his zeal. Rather the contrary.
This is not, of course, to ignore that other pressing matters do compete for his
attention. After all, he has his practice to attend to. That circumstance
possesses, high degree of relevance since a lawyer has to live; certainly he
cannot afford either to neglect his paying cases. Nonetheless, what is
incumbent upon him as counsel de oficio must be fulfilled." 8
So it has been from the 1905 decision of In re Robles Lahesa, 9 where
respondent was de oficio counsel, the opinion penned by Justice Carson
making clear: "This Court should exact from its officers and subordinates the
most scrupulous performance of their official duties, especially when
negligence in the performance of those duties necessarily results in delays in
the prosecution of criminal cases . . ." 10 Justice Sanchez in People v.
Estebia 11 reiterated such a view in these words: "It is true that he is a court-
appointed counsel. But we do say that as such counsel de oficio, he has as
high a duty to the accused as one employed and paid by defendant himself.
Because, as in the case of the latter, he must exercise his best efforts and
professional ability in behalf of the person assigned to his care. He is to render
effective assistance. The accused-defendant expects of him due diligence, not
mere perfunctory representation. . . . For, indeed a lawyer who is a vanguard in
the bastion of justice is expected to have a bigger dose of social conscience
and a little less of self-interest." 12
The weakness of the petition is thus quite evident.
3. If respondent Judge were required to answer the petition, it was only
due to the apprehension that considering the frame of mind of a counsel loath
and reluctant to fulfill his obligation, the welfare of the accused could be
prejudiced. His right to counsel could in effect be rendered nugatory. Its
importance was rightfully stressed by Chief Justice Moran in People v. Holgado
in these words: "In criminal cases there can be no fair hearing unless the
accused be given an opportunity to be heard by counsel. The right to be heard
would be of little avail if it does not include the right to be heard by counsel.
Even the most intelligent or educated man may have no skill in the science of
law, particularly in the rules of procedure, and, without counsel, he may be
 convicted not because he is guilty but because he does not know how to
establish his innocence. And this can happen more easily to persons who are
ignorant or uneducated. It is for this reason that the right to be assisted by
counsel is deemed so important that it has become a constitutional right and it
is so implemented that under our rules of procedure it is not enough for the
Court to apprise an accused of his right to have an attorney, it is not enough to
ask him whether he desires the aid of an attorney, but it is essential that the
court should assign one de oficio for him if he so desires and he is poor or grant
him a reasonable time to procure an attorney of his own." 13 So it was under the
previous Organic Acts. 14 The present Constitution is even more emphatic. For,
in addition to reiterating that the accused "shall enjoy the right to be heard by
himself and counsel," 15 there is this new provision: "Any person under
investigation for the commission of an offense shall have the right to remain
silent and to counsel, and to be informed of such right. No force, violence,
threat, intimidation, or any other means which vitiates the free will shall be used
against him. Any confession obtained in violation of this section shall be
inadmissible in evidence." 16
Thus is made manifest the indispensable role of a member of the Bar in
the defense of an accused. Such a consideration could have sufficed for
petitioner not being allowed to withdraw as counsel de oficio. For he did betray
by his moves his lack of enthusiasm for the task entrusted to him, to put matters
mildly. He did point though to his responsibility as an election registrar.
Assuming his good faith, no such excuse could be availed now. There is not
likely at present, and in the immediate future, an exorbitant demand on his time.
It may likewise be assumed, considering what has been set forth above, that
petitioner would exert himself sufficiently to perform his task as defense counsel
with competence, if not with zeal, if only to erase doubts as to his fitness to
remain a member of the profession in good standing. The admonition is ever
timely for those enrolled in the ranks of legal practitioners that there are times,
and this is one of them, when duty to court and to client takes precedence over
the promptings of self-interest.
WHEREFORE, the petition for certiorari is dismissed. Costs against
petitioner.
Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J., did not take part.
||| (Ledesma v. Climaco, G.R. No. L-23815, [June 28, 1974], 156 PHIL 481-488)

FIRST DIVISION
 [G.R. No. L-33821. June 22, 1973.]

THE PEOPLE OF THE PHILIPPINES, plaintiff-

appellee, vs. FEDERICO SILVESTRE alias BOY DE
GUZMAN, defendant-appellant.

Acting solicitor General Conrado T . Limcaoco, Acting Assistant Solicitor

General Alicia V . Sempio Diy and Solicitor Amado D. Aquino for plaintiff
appellee.
Manuel B. Imbong (Counsel de Oficio) for defendant-appellant.

DECISION

CASTRO, J : p

The defendant Federico Silvestre, alias Boy de Guzman together with

one Francisco See, was indicted for the crime of "robbery in band with homicide
and rape" in criminal case 319 of the Court of First Instance of Davao del Norte.
The information read to the two accused recites:
"The undersigned accuses Federico Silvestre alias Boy de
Guzman and Francisco See of the crime of Robbery in Band with
Homicide and Rape, under Articles 296 and 294, pars. 1 and 2 of the
Revised Penal Code, committed as follows:
"That on or about June 12, 1970, in the Municipality of Tagum,
Province of Davao del Norte, Philippines, and within the jurisdiction of this
Court, the above-mentioned accused, with intent of gain, with violence
and intimidation against persons and armed with a gun, conspiring and
confederating with one another and withalias Falconit and alias Boy Paco,
who are still at large, and mutually helping one another, did then and there
wilfully, unlawfully and feloniously enter the house owned by Isabelo
Secuya by forcibly opening the door and once inside, take, steal and carry
away cash in the amount of P200.00 and 1 piece suit worth P90.00
amounting all in all to P290.00, to the damage and prejudice of said owner
in the aforesaid sum; and on the occasion thereof, the said accused with
said weapon and with intent to kill, conspiring and confederating with each
other and with alias Falconit and alias Boy Paco, who are still at large,
attack, assault and shoot one Roque Estrella, thereby inflicting upon the
latter wounds which caused his death; and by means of force and
intimidation, did then and there wilfully, unlawfully and feloniously have
carnal knowledge with Adela S. Estrella, against her will; and further
 causing actual, moral and compensatory damages to the offended party
or parties or heirs of the victim.
"The commission of the foregoing offense is attended by
aggravating circumstances of recidivism, quasi-recidivism and nighttime."
Upon arraignment on June 8, 1971, the defendant Silvestre entered a
plea of "guilty;" his co-accused, Francisco See, pleaded "not guilty."
In a decision dated June 9, 1971, the trial court found the defendant
Silvestre guilty of the crime charged and sentenced him to, among others, the
penalty of death.
Hence, this review en consulta.
The record of this case reveals the following proceedings had by the trial
court at the arraignment of the defendant Silvestre and his co-accused:
"INTERPRETER:
(Calling the case) — Criminal Case No. 319, People versus Federico
Silvestre alias Boy de Guzman and Francisco See, for Robbery in
Band with Homicide and Rape, for Arraignment.
"FISCAL FUENTES:
May it please the Honorable Court. Appearing for the prosecution.
"COURT:
Any appearance for the accused?
"INTERPRETER:
Atty. Laolao was appointed as counsel de oficio but he is not in Court,
Your Honor.
"COURT:
Atty. Guyo, can you act as counsel de oficio for the accused for the
arraignment only?
"ATTY. GUYO:
Yes, Your Honor. May I ask for a new minutes to see the records, Your
Honor?
"COURT:
Counsel is given ten minutes to see the records of the case and to
confer with the accused.
(To the Interpreter) — Call the next case.
(Case called again after ten minutes.)
 "ATTY. GUYO:
Appearing as counsel de oficio for the arraignment of the accused, Your
Honor. The accused is ready for the arraignment.
"COURT:
Arraign the accused.
"ATTY. GUYO:
The accused, Your Honor, do not understand Visayan dialect. They are,
however, Tagalog speaking persons. May I request therefore that
the reading of the charge be made in Tagalog?
"INTERPRETER:
May I manifest, Your Honor, that these two persons especially Boy de
Guzman or Federico Silvestre I have known him, Your Honor,
when I was yet a policeman of the Tagum Police Force and when
he was imprisoned in the Tagum Municipal Jail, this Federico
Silvestre alias Boy de Guzman had been speaking in the Visayan
dialect, and as a matter of fact this morning I was conversing with
him in the Visayan dialect. I do not know why he manifested that
he cannot understand the Visayan dialect.
"ATTY. GUYO:
Your Honor please, considering the nature of the offense and since the
accused now in open Court manifested that he would prefer the
information to be read in Tagalog, we pray that the accused he 90
allowed with this request.
"COURT:
Arraign the accused in the Tagalog language.
"(Accused Federico Silvestre alias Boy de Guzman, when arraigned,
pleaded 'GUILTY', but accused Francisco See, when arraigned,
pleaded 'NOT GUILTY'.)"
Thru counsel de oficio Manuel B. Imbong appointed by this Court, the
defendant now charges that the trial court "erred in convicting and imposing on
the accused-appellant the penalty of death without first taking the necessary
precautions to assure itself that the accused-appellant fully understood the
charges preferred against him and its consequent penalty and [in not hearing]
prosecution's evidence in support of the allegations of the information in order
to be able to judge correctly the extent of accused-appellant's guilt."
The Solicitor General, as counsel for the People of the Philippines, joins
the defendant in faulting the procedure adopted by the trial court in the
arraignment of the appellant Silvestre. It is pointed out that "the trial court did
not explain to the appellant the true nature of the charge against him, especially
the allegations in the information of conspiracy in the homicide that
accompanied the robbery charged, the allegation that said crime was
committed by a band, and the aggravating circumstances of recidivism, quasi-
recidivism, and nighttime also alleged in the information; and neither did the
trial court explain to the appellant the consequences and gravity of the charge
against him, with all the supposed aggravating circumstances that attended its
commission and which, if appellant would also admit, certainly could not be
overcome by the lone mitigating circumstance of plea of guilty, so that the
imposition of the death penalty on said appellant would be inevitable."
It is quite obvious, from a mere cursory reading of the record of this case,
that the trial judge failed to take the essential measures which this Court, in a
long line of decisions, has prescribed to guard against the improvident entry of
a plea of guilty by an accused. First, as pointed out by the Solicitor General, the
trial court did not at all ascertain for itself whether the defendant Silvestre
completely understood the full meaning, significance and implications of his
plea of guilty. 1 And,second, it did not receive evidence for the purpose of
establishing the guilt and the precise degree of culpability of the defendant,
notwithstanding his plea of guilty. 2
The acceptance by the court a quo of the plea of guilty by the defendant
Silvestre was inordinately hasty and was made without due regard for the
gravity of its consequences upon the life of a human being. When the previously
appointed counsel de oficio did not show up at the arraignment, the court simply
appointed one of the lawyers then present to act as counsel "for the arraignment
only," as if the duties of an attorney to his accused client can be conveniently
segmented and the segments farmed out to whomsoever may catch the fancy
of the court. Worse, only ten minutes were vouchsafed to the newly appointed
counsel de oficio, which period of time he accepted without protest, to study the
complicated and serious charge of "robbery in band with homicide and rape"
and confer with the two accused whom he met in court for the first time that
morning.
The undue haste with which the court a quo treated the entry of the plea
of guilty by the appellant Silvestre stresses the importance of what we said
in Peoplevs. Apduham: "All trial judges must refrain from accepting with alacrity
an accused's plea of guilty, for while justice demands a speedy administration
judges are duty bound to be extra solicitous in seeing to it that when an accused
pleads guilty he understands fully the meaning of his plea and the import of an
inevitable conviction." 3
But the fault in the case at bar does not lie entirely with the trial judge. A
share thereof is attributable to Atty. Jose B. Guyo, the counsel de oficio below,
who does not appear to have taken his duties to the accused with the
 seriousness and concern expected of a conscientious advocate and officer of
the court.
In the period of ten minutes that passed from his appointment as
counsel de oficio to his declaration to the court a quo of his almost instant
readiness to proceed with the arraignment of the two accused, he summarily
did away with the need of conscientiously scrutinizing the entire record of the
case and interviewing his clients fully on the circumstances of the crime
charged. It is Atty. Guyo's dangerous and ill-advised brand of counselling that
can conceivably send innocent men to prison, if not to their death, or doom
guilty persons to suffer more than their just measure of punishment and
retribution.
ACCORDINGLY, the decision appealed from is set aside, and this case
is hereby remanded to the court a quo for a new arraignment of the defendant
Silvestre and for further proceedings in accordance with law and consistently
with the import of the observations herein made. Costs de oficio.
Makalintal, Actg. C.J., Zaldivar, Fernando, Teehankee, Barredo,
Makasiar, Antonio, and Esguerra, JJ., concurs.
||| (People v. Silvestre, G.R. No. L-33821, [June 22, 1973], 151-A PHIL 758-764)

EN BANC

[G.R. No. 97351. February 4, 1992.]

RAMON A. GONZALES, petitioner, vs. HON. FRANCISCO

I. CHAVEZ, in his capacity as Solicitor General,
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and
COMMISSION ON AUDIT, respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; SOLICITOR GENERAL; DESIGNATED TO

APPEAR FOR THE GOVERNMENT IN ALL LITIGATIONS AND LEGAL
PROCEEDINGS. — On July 25, 1987, President Corazon C. Aquino signed into
law Executive Order No. 292 instituting the Administrative Code of 1987. Under
Book IV, Title III, Chapter 12 thereof, the Office of the Solicitor General is
described as an "independent and autonomous office attached to the Department
of Justice," headed by the Solicitor General, "who is the principal law officer and
legal defender of the Government." Section 35 of the Executive Order is explicit
on this score, thus: "Section 35. Powers and Functions. —The Office of the
Solicitor General shall represent the Government of the Philippines, its agencies
and instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of a lawyer. When authorized by the
President or head of the office concerned, it shall also represent government
owned or controlled corporations. The Office of the Solicitor General shall
constitute the law office of the Government and, as such, shall discharge duties
requiring the services of a lawyer. . . ."
2. STATUTORY CONSTRUCTION; MANDATE TO APPEAR FOR THE
GOVERNMENT, IMPERATIVE OR MANDATORY; TERM "SHALL,"
CONSTRUED. — It is patent that the intent of the lawmaker was to give the
designated official, the Solicitor General, in this case, the unequivocal mandate
to appear for the government in legal proceedings. Spread out in the laws
creating the office is the discernible intent which may be gathered from the term
"shall," which is invariably employed, from Act No. 136 (1901) to the more
recent Executive Order No. 292 (1987). Under the principles of statutory
construction, so familiar even to law students, the term "shall" is nothing if not
mandatory. "In common or ordinary parlance and in its ordinary significance, the
term 'shall' is a word of command, and one which has always and which must be
given a compulsory meaning, and it is generally imperative or mandatory. It has
the invariable significance of operating to impose a duty which may be enforced,
particularly if public policy is in favor of this meaning or when public interest is
involved, or where the public or persons have rights which ought to be exercised
or enforced, unless a contrary intent appears." "The presumption is that the word
'shall' in a statute is used in an imperative, and not in a directory, sense. If a
different interpretation is sought, it must rest upon something in the character of
the legislation or in the context which will justify a different meaning." The Court
is firmly convinced that, considering the spirit and the letter of the law, there can
be no other logical interpretation of Sec. 35 of the Administrative Code than that
it is, indeed, mandatory upon the OSG to "represent the Government of the
Philippines, its agencies and instrumentalities and its officials and agents in any
litigation, proceeding, investigation or matter requiring the services of a lawyer."
3. CONSTITUTIONAL LAW; SOLICITOR GENERAL; HIS ROLE AS AN
OFFICER OF THE COURT. — Being a public officer, the Solicitor General is
"invested with some portion of the sovereign functions of the government, to be
exercised by him for the benefit of the public." Another role of the Solicitor
General is as an officer of the Court, in which case he is called upon "to share in
the task and responsibility of dispensing justice and resolving disputes;"
therefore, he may be enjoined in the same manner that a special prosecutor was
so enjoined by this Court from committing any act which may tend to "obstruct,
pervert or impede and degrade the administration of justice." Like the Attorney-
General of the United States who has absolute discretion in choosing whether to
prosecute or not to prosecute or to abandon a prosecution already started, our
own Solicitor General may even dismiss, abandon, discontinue or compromise
suits either with or without stipulation with the other party. Abandonment of a
case, however, does not mean that the Solicitor General may just drop it without
any legal and valid reasons, for the discretion given him is not unlimited. Its
exercise must be, not only within the parameters set by law but with the best
interest of the State as the ultimate goal.
4. ID.; ID.; MUST CONTINUE PERFORMING HIS DUTY AS LAWYER FOR THE
GOVERNMENT EVEN THOUGH ONE AGENCY TAKES AN ADVERSE
POSITION AGAINST ANOTHER AGENCY. — This Court clarified that even
when "confronted with a situation where one government office takes an adverse
position against another government agency, as in this case, the Solicitor
General should not refrain from performing his duty as the lawyer of the
government. It is incumbent upon him to present to the court what he considers
would legally uphold the best interest of the government although it may run
counter to a client's position. In such an instance, the government office
adversely affected by the position taken by the Solicitor General, if it still believes
in the merit of its case may appear in its own behalf through its legal personnel or
representative." The Court further pointed out that it is not entirely impossible that
the Office of the Solicitor General may take a position adverse to his clients like
the Civil Service Commission and the National Relations Commission, among
others, and even the People of the Philippines. In such instances, however, it is
not proper for the Solicitor General to simply decline to handle the case or
arbitrarily withdraw therefrom. The Court enjoins him to "nevertheless manifest
his opinion and recommendation to the Court which is an invaluable aid in the
disposition of the case."
5. ID.; PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT; SHOULD
NOT OUST THE OFFICE OF THE SOLICITOR GENERAL FROM ITS LAWFUL
MANDATE TO REPRESENT THE GOVERNMENT. — Under the law of its
creation and the complementary Rules, the law office of the PCGG, as it is for
the rest of the Government, is the Office of the Solicitor General. Although the
PCGG is "empowered to file and prosecute all cases investigated by it"
under Executive Orders Nos. 1 and 2, it does not thereby oust the Office of the
Solicitor General from its lawful mandate to represent the Government and its
agencies in any litigation, proceeding, investigation or matter requiring the
services of a lawyer. Moreover, such express grant of power to PCGG does not
imply that it may abdicate such power and turn over the prosecution of the cases
to private lawyers whom it may decide to employ. In those instances where
proceedings are to be conducted outside of the Philippines, the Solicitor General,
continuing to discharge his duties, may employ counsel to assist him, particularly
because he may not be licensed to appear before the courts in a foreign
jurisdiction.
6. ID.; SOLICITOR GENERAL; MUST NOT DECLINE TO APPEAR ON BEHALF
OF A GOVERNMENT AGENCY WITHOUT JUST AND VALID REASON. — In
those cases where a government agency declines the services of the Solicitor
General or otherwise fails or refuses to forward the papers of the case to him for
appropriate action, the Court categorically held that ". . . this practice should be
stopped." By the same token, the Solicitor General should not decline to appear
in court to represent a government agency without just and valid reason,
especially the PCGG which is under the Office of the President, he being a part
of the Executive Department. For Section 1 ofPresidential Decree No. 478 which
authorizes the OSG to represent the Government of the Philippines, its agencies
and instrumentalities and its officials and agents in any litigation, admits of an
exception, and that is, it stops short of representing "a public official at any stage
of a criminal case or in a civil suit for damages arising from a felony." In instances
such as the above, the OSG can, with reason, withdraw its representation even if
it has already entered its appearance. But the Solicitor General, as the officially-
mandated lawyer of the Government, is not empowered to take a similar step on
the basis of a petty reason like embarrassment, as that to which the individual
lawyers assigned to appear for their office were subjected.
7. ID.; ID.; HIS WITHDRAWAL OF APPEARANCE ON BEHALF OF THE PCGG
BEYOND THE SCOPE OF HIS AUTHORITY. — The Solicitor General's
withdrawal of his appearance on behalf of the PCGG was beyond the scope of
his authority in the management of a case. As a public official, it is his sworn duty
to provide legal service to the Government, particularly to represent it in
litigations. And such duty may be enjoined upon him by the writ of mandamus.
Such order, however, should not be construed to mean that his discretion in the
handling of his cases may be interfered with. The Court is not compelling him to
act in a particular way. Rather, the Court is directing him to prevent a failure of
justice resulting from his abandonment in midstream of the cause of the PCGG
and the Republic and ultimately, of the Filipino people.
8. REMEDIAL LAW; SPECIAL CIVIL ACTION; WRIT OF PROHIBITION WILL
NOT LIE IN CASE. — The writ of prohibition, however, may not be similarly
treated and granted in this petition. The said writ, being intended to prevent the
doing of some act that is about to be done, it may not provide a remedy for acts
which are already fiat accompli.

DECISION

ROMERO, J : p
In the instant petition for mandamus and prohibition with prayer for the issuance
of a temporary restraining order, petitioner submits for the Court's adjudication
the twin issues of whether or not the Solicitor General neglected his public duty
by withdrawing as counsel for the Republic of the Philippines and the Presidential
Commission on Good Government (PCGG) in cases he had filed in court and
whether or not the PCGG acted without or in excess of jurisdiction in hiring
private lawyers as a result of such withdrawal of appearance.

Petitioner Ramon A. Gonzales, as a citizen and taxpayer, filed the petition as a

class suit under Section 12, Rule 3 of the Rules of Court on the ground that the
subject matters involved are of common and general interest to all Filipino
citizens and taxpayers as they pertain to the enforcement of a public duty and the
prevention of unlawful expenditure of public funds.
According to the petitioner, the Solicitor General is the counsel for the Republic
and the PCGG in thirty-three (33) cases before this Court, one hundred nine
(109) cases in the Sandiganbayan, one (1) case in the National Labor Relations
Commission and another case in the Municipal Trial Court or a total of one
hundred forty-four (144) cases. 1 In December 1990, the Solicitor General
withdrew as counsel in said cases through a pleading entitled "Withdrawal of
Appearance with Reservation." 2 The pleading states:
"The SOLICITOR GENERAL, to this Honorable Court, hereby
respectfully withdraws as counsel for plaintiff Presidential Commission
on Good Government (PCGG) in the above-captioned case, with the
reservation, however, conformably with Presidential Decree No. 478, the
provisions of Executive Order No. 292 as well as the decisional law of
'Orbos v. Civil Service Commission, et al.' (G.R. No. 92561, September
12, 1990), to submit his comment/observation on incidents/matters
pending with this Honorable Court, if called for by circumstances in the
interest of the government or if he is so required by the court.
Makati, Metro Manila, December 3, 1990.
(Sgd.) FRANCISCO I. CHAVEZ
IBP O.R. No. 289417-2.06.90"
The Solicitor General filed a substantially similar pleading in the cases where the
Republic is a party.
As a result of such withdrawal of appearance, the PCGG hired forty (40) private
lawyers, nineteen (19) of whom are trial lawyers. They would receive a monthly
compensation of at least P10,000.00 plus appearance fee of P1,700.00 in actual
trial and/or P500.00 if trial is postponed. 3
Petitioner contends that since the Solicitor General's withdrawal of appearance
was made without any reason, it implied that it was "within the absolute
discretion" of said public official. Section 1 of Presidential Decree No.
478 and Section 35 of the Administrative Code of 1987, however, mandatorily
require the Solicitor General to stand in the place of, and act for the Republic and
the PCGG in court. Therefore, the Solicitor General has "no discretion to reject
by withdrawing" as counsel for said entities.
Applying the ruling of this Court with respect to a fiscal in Sta. Rosa Mining Co. v.
Zabala, 4 the petitioner further states that: "Similarly, it is the duty of the Solicitor
General to appear for the Republic and the PCGG, hence regardless of his
personal convictions or opinions, he must proceed to discharge his duty (not
withdraw, which is equivalent to refusal to prosecute), and let the court decide
the merits of the case." 5
Moreover, petitioner avers that the Solicitor General cannot withdraw his
appearance "with reservation" nor can he file his "comment/observation on the
incidents/matters" after such withdrawal because by ceasing to appear as
counsel, he loses his standing in court. Unless a case involves the
constitutionality of a treaty, law, ordinance or executive order for which Rule 3,
Section 23 of the Rules of Court 6 mandates his appearance, the Solicitor
General is not authorized to appear therein after his withdrawal as counsel
inasmuch as he himself is not a party-litigant.
Furthermore, under Section 26 of Rule 138, 7 the Solicitor General may not
unilaterally withdraw his appearance without the consent of the Republic or the
PCGG unless the court authorizes his withdrawal. Since there was no such court
authority, the Solicitor General's withdrawal of appearance in said several cases
is null and void, as it constitutes an act against a mandatory law and hence, it
may be attacked collaterally.
Neither may the Solicitor General withdraw on the authority of Orbos v. Civil
Service Commission 8 wherein this Court held:
"In the discharge of this task the Solicitor General must see to it that the
best interest of the government is upheld within the limits set by law. . . .
xxx xxx xxx
There are cases where a government agency declines the services of
the Solicitor General or otherwise fails or refuses to forward the papers
of the case to him for appropriate action. . . . The Court finds and so
holds that this practice should be stopped. To repeat, the Solicitor
General is the lawyer of the government, any of its agents and officials in
any litigation, proceeding, investigation or matter requiring the services
of a lawyer. The exception is when such officials or agents are being
charged criminally or are being civilly sued for damages arising from a
felony. His services cannot be lightly rejected, much less ignored by the
office or officials concerned.
 Indeed, the assistance of the Solicitor General should be welcomed by
the parties. He should be given full support and cooperation by any
agency or official involved in litigation. He should be enabled to faithfully
discharge his duties and responsibilities as the government advocate.
And he should do no less for his clients. His burden of assisting in the
fair and just administration of justice is clear.
This Court does not expect the Solicitor General to waver in the
performance of his duty. As a matter of fact, the Court appreciates the
participation of the Solicitor General in many proceedings and his
continued fealty to his assigned task. He should not therefore desist from
appearing before this Court even in those cases he finds his opinion
inconsistent with the government or any of its agents he is expected to
represent. The Court must be advised of his position just as well."
(Underscoring supplied).
The petitioner adds the following observations: 9
"Therefore, this case militates more against the Solicitor General than in
his favor. For if the government and its officials cannot reject the
services of the Solicitor General, neither may the latter select the case
he would represent by withdrawing in some and retaining others. For
unlike private lawyers who are bound to their clients by contract and,
therefore, can reject cases offered to them, the Solicitor General and
PCGG are wedded to each other by statute for better and for worse. And
only a divorce, through the abolition of PCGG or resignation of the
Solicitor General, can untie the marital knot. Otherwise, the relationship
should continue sans PCGG demurring, and the Solicitor General
withdrawing. Absent such resignation or abolition, the Solicitor General
has to prosecute or defend the said cases to the best of his ability."
Hence, petitioner contends, the PCGG acted without or in excess of jurisdiction
in hiring private lawyers as substitutes for the Solicitor General. Nowhere
in Executive Orders Nos. 1, 2 and 14 does it appear that the PCGG is authorized
to hire said lawyers. Since the Solicitor General is named by law as the lawyer
for all government agencies, the hiring of private lawyers by such agencies is
impliedly excluded. Thus, by employing private lawyers, the PCGG is creating a
public office and naming a public officer. However, in the absence of a law
providing for the creation of the office of PCGG counsel, said hired lawyers are
usurpers or intruders whose acts may be challenged in a collateral proceeding
such as an action for prohibition.
Similarly, petitioner asserts, prohibition will lie against the Commission on Audit
considering that any payment for the services of the PCGG-hired lawyers would
result in an unlawful expenditure of public funds. Stressing the need to preserve
the status quo until the determination of his rights as a citizen and taxpayer,
petitioner prays for the issuance of a temporary restraining order.
Acting on the petition, however, the Court required the respondents to file their
respective comments on the petition without granting the prayer for a temporary
restraining order. 10
In its comment, the Commission on Audit (COA) alleges that it has not allowed
the disbursement of funds to pay for the services of PCGG-hired private lawyers.
It points out the fact that under COA Circular No. 89-299 dated March 21, 1989,
the COA has withdrawn the pre-audit of transactions entered into by national
government agencies pursuant to the constitutional provision that the COA has
the exclusive authority to "define the scope of its audit and examination, to
establish the techniques and methods required therefor."11 Neither has the COA
allowed in post-audit the disbursements of funds in payment of the services of
the hired private lawyers. Moreover, under COA Circular No. 86-255 dated
April 2,1986, the hiring of private lawyers by government agencies and
instrumentalities is prohibited unless there is prior written conformity of the
Solicitor General or the Government Corporate Counsel, as the case may be, as
well as the written concurrence of COA.
For its part, the PCGG, through Commissioner Maximo A. Maceren and lawyer
Eliseo B. Alampay, asserts in its comment that the scope of its authority
under Executive Orders Nos. 1, 2 and 14 is broad enough to include the authority
to engage the services of private lawyers, if necessary, for the fulfillment of its
mandate. While such authority is not expressly stated in said executive orders, "it
must be deemed necessarily implied in and subsumed under the expressly
enumerated powers of the Commission." 12
The PCGG contends that its power under Section 1 of Executive Order No. 14 to
"file and prosecute all cases investigated by it" includes "the grant of discretion to
the Commission in determining the manner of filing and prosecuting its cases
including the matter of who, in particular, will control and supervise the
prosecution of said cases." The phrase "with the assistance of the Office of the
Solicitor General and other government agencies" simply means that the Solicitor
General is called upon to render assistance to the PCGG and whether or not
such assistance is required by the Commission is a matter of discretion on its
part. Such provision does not preclude the PCGG from engaging the services of
private lawyers in the same way that it is "clearly authorized to hire accountants,
appraisers, researchers and other professionals as it performs its functions."
Since, upon the dictates of legal and practical necessity, it has hired lawyers in
the United States and in Switzerland, "it may similarly hire Filipino lawyers in
prosecuting its Philippine cases." 13

The PCGG further asserts that the hiring of private lawyers is "not an ultra
vires" act but a "means by which (it) can effectively exercise its powers." It
emphasizes the fact that it hired private lawyers "only after the Office of the
Solicitor General had unilaterally withdrawn its appearance" for the PCGG in the
various pending PCGG-instituted cases. Its own Litigation Division, which was
constituted after the Solicitor General's withdrawal, is "sorely undermanned" but it
has to contend with "affluent and influential individuals and entities" who can
"afford to hire skilled lawyers and organize vast litigation networks." The PCGG
tried to seek the assistance of the Department of Justice and the Office of the
Government Corporate Counsel but only the former sent two additional
prosecutors to handle its cases. 14
The PCGG clarifies that its powers are circumscribed, not only by the executive
orders aforementioned but also by the inherent police power of the State. By
hiring private lawyers, it was merely trying to assist the President of the
Philippines in protecting the interest of the State. As such, it was acting as
an alter ego of the President and therefore, it was the Executive which
determined the necessity of engaging the services of private prosecutors.
Contending that "overwhelming necessity" impelled it to hire private lawyers, the
PCGG avers that inasmuch as the Central Bank of the Philippines or the
Philippine National Bank may engage the services of private lawyers, with more
reason may it be allowed to hire private prosecutors after it was abandoned by
the Solicitor General in the prosecution of the ill-gotten wealth cases.
Consequently, "the Solicitor General's withdrawal of assistance is tantamount to
his tacit approval of the PCGG's hiring of private prosecutors in replacement of
the solicitors handling the said civil cases." 15
The PCGG concludes that the reasonableness of the compensation for its hired
lawyers can hardly be questioned considering the expertise of said lawyers and
the complexity of the cases they would be handling for the PCGG. Thus, the
prayer for a preliminary injunction must be denied otherwise "the harm that would
be done would be far greater than the perceived mischief petitioner seeks to
prevent." 16
Solicitor General Francisco I. Chavez inhibits himself from appearing in this case
"considering that as far as the Office of the Solicitor General (OSG for brevity) is
concerned, the subject is a closed matter among the OSG, the PCGG and the
Courts." 17 In the comment filed by Assistant Solicitor General Edgardo L. Kilayko
and Solicitor Iderlina P. Pagunuran, the OSG sets out at length the history of the
PCGG from its creation until the filing in the Sandiganbayan of thirty-nine
(39) "prima faciecases" for ill-gotten wealth against former President Marcos and
his cronies. As suits and countersuits stemmed from the original thirty-nine (39)
civil cases, "the OSG had been put to a tremendous task and thus invariably in
urgent need of being consulted or informed by PCGG of the facts and
circumstances material to the prosecution and progress not only of the original
39 civil cases, but also of all kinds of 'incidents.'"
Nonetheless, the OSG lawyers faced the challenges and the odds if only to live
up to their task as "the best lawyers there are in the country." The OSG further
explains:18
"On many a time, however, the lack of the above-mentioned consultation
or information resulted in situations that rendered the OSG unavoidably
incapable of performing its functions and duties as lawyer of the
Government, not only as mandated upon it by law and as spelled out
in Orbos v. CSC, G.R. No. 92561, September 12, 1990, but also in
consonance with its office motto: 'Integrity In Advocacy.'
"Once the OSG argued before the Sandiganbayan that an asset was
under sequestration, only to be informed by the adverse party waving a
document before the Sandiganbayan Justices that the sequestration had
earlier been lifted, with a PCGG resolution, the document, to boot
(Razon case). Then, again, OSG argued, even before this Honorable
Court, that an ill-gotten asset had 'mysteriously' disappeared, only to be
informed by the Honorable Court, that a PCGG Commissioner had
earlier by resolution authorized the disposition of the asset (COCOFED
case). All the instances need not be enumerated here, as they are not of
meat and substance, even as OSG is rendered thereby a laughing stock
in its professionalism.
"As to matters that are of great pith and moment, suffice it to say that the
recent Benedicto 'compromise' agreement, not to mention the SMC-
UCPB Compromise settlement is sub judice or under advisement not
only of the Sandiganbayan but also of this Honorable Court in separate
'incidents,' and suffice it to state that the relationship, obtaining between
the Government offices/agencies and the Office of the Solicitor General
as counsel, is not at all like one that simply would obtain between private
client and private lawyer in private practice, although constant
consultation and advice are sine qua non in both types of relationship.
The relationship is rather one, created as it is by law, where imposed
upon OSG is the responsibility to present to the courts the position that
will uphold the best interest of the People, the Government and the
State, albeit the same may run counter to its client's position or route of
action. At any rate, the PCGG through nationwide TV broadcast and
print media, publicly announced that PCGG had dispensed with or
otherwise did not need the legal services of the Lawyer of the
Government, and thus on OSG descended, not the unmerited remark of
having 'abandoned' the ill-gotten wealth cases, but the time-honored
principle of impossibilium nulla obligatio est. i.e., there is no obligation to
do impossible things (Lim Co Chui v. Paredes, 47 Phil. 463), without in
any way casting any aspersion on the moral integrity of any
Commissioner or PCGG official, as made clear by the Solicitor General
to the President in a meeting with PCGG.
 "Hence, in the light of all the foregoing circumstances, at rock-bottom
precisely so as not to prejudice 'the interest of the Government' (Orbos),
the Solicitor General withdrew as counsel for PCGG in all said cases by
filing a notice of 'Withdrawal of Appearance with Reservation.'"
In arguing that the instant petition should be dismissed, the OSG contends that
this case has become moot and academic as this very Court had resolved to
allow the withdrawal of appearance of the Solicitor General in all the cases
pending before it "with reservation, conformably with PD No. 478, Executive
Order No. 292,as well as the doctrine laid down in 'Orbos v. Civil Service
Commission, et al.,' G.R. No. 92561, September 12, 1990, . . ." 19 For its part, the
Sandiganbayan had also resolved that "the appearance of the Solicitor General
is deemed withdrawn to be substituted by the PCGG's legal panel." 20
The OSG maintains further that the instant petition does not present a case and
controversy as the petitioner himself does not even have a "court standing" and a
"litigable interest." All the petitioner seeks is an "advisory opinion." The OSG
asserts that the "incident" (referring to the Solicitor General's withdrawal of
appearance) should be distinguished from that in JPC Enterprise, Inc. v. Court of
Appeals, et al., 21 wherein the Assets Privatization Trust (APT) decided to appear
for itself because the law names the Minister of Justice only as its ex oficio legal
adviser while by itself it can file suits and institute proceedings and engage
external expertise in the fulfillment of its tasks. However, since the APT has no
personality of its own, it should have appeared through the Solicitor General. The
OSG argues that said "adversarial incident" is not present in this case.
In his reply to the comments of the PCGG and the OSG, the petitioner insists that
although as between the Solicitor General and the PCGG, this case may have
been rendered moot and academic, as between him on the one hand and the
Solicitor General and the PCGG on the other hand, a "real controversy" still
exists and the issues raised herein have not ceased to exist either. Moreover, a
judgment of prohibition and mandamus would have a "practical legal effect and
can be enforced." 22
Citing Miguel v. Zulueta, 23 and Tañada v. Tuvera, 24 petitioner asserts that he
has a standing in court because where a question of public right is involved and
the object of the mandamus is the enforcement of a public duty, the relator need
not show any legal or special interest in the result of the proceeding. It is
sufficient that, as a citizen, he is interested in having the laws executed and the
duty in question enforced.
The petitioner rebuts the PCGG's contention that its power to hire private lawyers
may be implied from its expressly enumerated powers. He asserts that
since P.D. No. 478 mandates that "the Solicitor General as law office of the
government with the duty to appear for the PCGG," no implication from the
express powers of (the) PCGG can stand against the language of P.D. No. 478.
On the other hand, the law regarding the PCGG and that regarding the Solicitor
General should be harmonized. 25
The Court considers these pleadings sufficient bases for resolving this petition
and, on account of the importance and imperativeness of the issues raised
herein, the filing of memoranda by the parties is dispensed with.
We shall, first of all, confront a preliminary issue interposed by the OSG —
whether or not this case has been rendered moot and academic by this Court's
resolution granting the Solicitor General's motion to withdraw appearance as
counsel in the several cases pending herein. It should be clarified that the
resolution had to be issued with the national interest in mind. Time was of the
essence and any hedging on the part of the PCGG and/or its counsel could, not
merely set back but prejudice, the government's all-out efforts to recover ill-
gotten wealth.

Notwithstanding the ostensible mootness of the issues raised in a case, this

Court has never shirked from its symbolic function of educating bench and bar by
formulating guiding and controlling principles, precepts, doctrines and
rules. 26 More so, if the case is of such magnitude that certain legal ambiguities
must be unravelled for the protection of the national interest. 27
To allow the transcendental issue of whether the OSG may withdraw its
appearance in a cluster of cases of national import to pass into legal limbo simply
because it has been "mooted" would be a clear case of misguided judicial self-
restraint. This Court has assiduously taken every opportunity to lay down brick by
brick the doctrinal infrastructure of our legal system. Certainly, this is no time for
a display of judicial timorousness of the kind which the Solicitor General is
untimely exhibiting now.
Accordingly, we confront the issues conscious of their far-reaching implications,
not alone on the instant case but on future ones as well, which the OSG will
surely be called upon to handle again and again.
The resolution of the first issue laid down at the beginning of
this ponencia hinges on whether or not the Solicitor General may be compelled
by mandamus to appear for the Republic and the PCGG. This issue is best
resolved by a close scrutiny of the nature and extent of the power and authority
lodged by law on the Solicitor General.
At this juncture, a flashback on the statutory origins of the Office of the Solicitor
General is in order. Incorporated in Act No. 136 dated June 11, 1901 28
providing for the organization of courts in the Philippine Islands was Chapter III
entitled "The Attorney General." Section 40 states:
 "There shall be an Attorney-General for the Philippine Islands, to be
appointed by the Philippine Commission . . ."
The catalog of his duties includes the following:
"He shall prosecute or defend therein all causes, civil and criminal, to
which the Government of the Philippine Islands, or any officer thereof, in
his official capacity, is a party . . ." 29
Section 41 further provides:
"There shall be an officer learned in the law to assist the Attorney-
General in the performance of all his duties, called the Solicitor-General
who shall be appointed by the Commission. . . . In case of a vacancy in
the office of Attorney-General, or of his absence or disability, the
Solicitor-General shall have power to exercise the duties of that office.
Under the supervision of the Attorney-General, it shall be the especial
duty of the Solicitor-General to conduct and argue suits and appeals in
the Supreme Court, in which the Philippine Government is
interested, and the Attorney-General may, whenever he deems it for the
interest of the Philippine Government, either in person conduct and
argue any case in any court of the Philippine Islands in which the
Philippine Government is interested or may direct the Solicitor General
to do so." (Underscoring supplied)
Six months later, a law was passed reorganizing the Office of the Attorney-
General and providing for the appointment of the said official and the Solicitor-
General by the Civil Governor and for an increase in their salaries. Their duties
remained basically the same. 30
In the meantime, Act No. 222 was passed on September 5, 1901 providing for
the organization of, among others, the Department of Finance and Justice which
embraced within its executive control the Bureau of Justice. 31
Under Act No. 2711, otherwise known as the Administrative Code of 1917, the
Bureau of Justice is specifically constituted "the law office of the Government of
the Philippine Islands and by it shall be performed duties requiring the services of
a law officer." 32 Its chief officials are the Attorney-General and his assistant, the
Solicitor-General. 33
"As principal law officer of the Government, the Attorney-General shall have
authority to act for and represent the Government of the Philippine Islands, its
officers, and agents in any official investigation, proceeding, or matter requiring
the services of a lawyer." 34
In 1932, the office of the Attorney-General was phased out and his functions
were assumed by the Secretary of Justice. 35 Subsequently, the Bureau of
Justice came to be known as the Office of the Solicitor General, 36 headed by the
Solicitor General. 37
Parenthetically, these institutions were patterned after the Office of Attorney-
General created by the First U.S. Congress in the Judiciary Act of 1789 which
called for a "meet person, learned in the law, to act as Attorney General for the
U.S." 38 When the Department of Justice was established in 1870, the position of
Solicitor-General was created as an assistant to the Attorney-General. 39 Over a
century later, their respective positions and functions remain the same. The
Attorney-General of the United States, appointed by the President with the
advice and consent of the Senate, is now the head of the Department of
Justice. 40 In the same manner, a Solicitor General, learned in the law, is
appointed to assist the Attorney-General in the performance of his duties. 41
In contrast, the Solicitor-General of the Philippines, emerging from the shadow of
the Attorney-General and later, of the Secretary of Justice, has come to his own.
On July 20, 1948, Republic Act No. 335, amending Section 1659 of the
Administrative Code, bestowed on him the rank of Undersecretary of a
Department. Subsequently, a series of amendatory laws designed to enlarge the
complement of the Office of the Solicitor General was enacted 42 until on June 4,
1974, by virtue of Presidential Decree No. 478, its pivotal role in the government
became clearly defined and delineated.
During the martial law years, President Ferdinand E. Marcos leaned heavily on
his Solicitor General to provide the legal underpinnings of his official acts.
Reflective of the tremendously enhanced power of the official and the position
was Executive Order No. 454 enacted on September 23, 1975, conferring upon
the Solicitor General the rank of a member of the Cabinet "with all the rights,
honors and privileges pertaining to the position." Said executive order was
superseded by Executive Order No. 473 dated August 12, 1976 "making the
Solicitor General a member of the Cabinet." These executive orders were capped
by Executive Order No. 552 dated August 14, 1979elevating the OSG into a
Ministry with the same powers and functions defined in P.D. Nos. 478 and 1347.
P.D. 478 became, as it were, the Magna Carta of the Office of the Solicitor
General. After the change of administration, or on July 25, 1987, President
Corazon C. Aquino signed into law Executive Order No. 292 instituting
the Administrative Code of 1987. Under Book IV, Title III, Chapter 12 thereof, the
Office of the Solicitor General is described as an "independent and autonomous
office attached to the Department of Justice." Headed by the Solicitor General,
"who is the principal law officer and legal defender of the Government," the Office
shall have a Legal Staff composed of fifteen (15) Assistant Solicitors General and
such number of Solicitors and Trial Attorneys "as may be necessary to operate
the Office which shall be divided into fifteen (15) divisions. 43 Among its powers
and functions are the following which are relevant to the issues at hand:
"Section 35. Powers and Functions. — The Office of the Solicitor
General shall represent the Government of the Philippines, its agencies
 and instrumentalities and its officials and agents in any litigation,
proceeding, investigation or matter requiring the services of a lawyer.
When authorized by the President or head of the office concerned, it
shall also represent government owned or controlled corporations. The
Office of the Solicitor General shall constitute the law office of the
Government, and, as such, shall discharge duties requiring the services
of a lawyer. (Underscoring supplied.) It shall have the following specific
powers and functions:
(1) Represent the Government in the Supreme Court and the Court of
Appeals in all criminal proceedings; represent the Government
and its officers in the Supreme Court, the Court of Appeals, and
all other courts or tribunals in all civil actions and special
proceedings in which the Government or any officer thereof in his
official capacity is a party.
(2) Investigate, initiate court action, or in any manner proceed against
any person, corporation or firm for the enforcement of any
contract, bond, guarantee, mortgage, pledge or other collateral
executed in favor of the Government. Where proceedings are to
be conducted outside of the Philippines, the Solicitor General may
employ counsel to assist in the discharge of the aforementioned
responsibilities.
xxx xxx xxx
(8) Deputize legal officers of government departments, bureaus,
agencies and offices to assist the Solicitor General and appear or
represent the Government in cases involving their respective
offices, brought before the courts and exercise supervision and
control over such legal Officers with respect to such cases.
(9) Call on any department, bureau, office, agency or instrumentality of
the Government for such service, assistance and cooperation as
may be necessary in fulfilling its functions and responsibilities and
for this purpose enlist the services of any government official or
employee in the pursuit of his tasks.
Departments, bureaus, agencies, offices, instrumentalities and corporations to
whom the Office of the Solicitor General renders legal services are authorized to
disburse funds from their sundry operating and other funds for the latter Office. For this
purpose, the Solicitor General and his staff are specifically authorized to receive
allowances as may be provided by the Government offices, instrumentalities and
corporations concerned, in addition to their regular compensation.

(10) Represent, upon the instructions of the President of the Republic of

the Philippines in international litigations, negotiations or
 conferences where the legal position of the Republic must be
defended or presented.
(11) Act for the Republic and/or the people before any court, tribunal,
body or commission in any matter, action or proceeding which, in
his opinion, affects the welfare of the people as the ends of justice
may require; and
(12) Perform such other functions as may be provided by law." 44
In thus tracing the origins of the Office of the Solicitor General to gain a clear
understanding of the nature of the functions and extent of the powers of the
Solicitor General himself, it is evident that a policy decision was made in the early
beginnings to consolidate in one official the discharge of legal functions and
services in the government. These took the form mostly of representing the
Government in various legal proceedings.
The rationale behind this step is not difficult to comprehend. Sound government
operations require consistency in legal policies and practices among the
instrumentalities of the State. Moreover, an official learned in the law and skilled
in advocacy could best plan and coordinate the strategies and moves of the legal
battles of the different arms of the government. Surely, the economy factor, too,
must have weighed heavily in arriving at such a decision.
It is patent that the intent of the lawmaker was to give the designated official, the
Solicitor General, in this case, the unequivocal mandate to appear for the
government in legal proceedings. Spread out in the laws creating the office is the
discernible intent which may be gathered from the term "shall," which is
invariably employed, fromAct No. 136 (1901) to the more recent Executive Order
No. 292 (1987).
Under the principles of statutory construction, so familiar even to law students,
the term "shall" is nothing if not mandatory.
"In common or ordinary parlance and in its ordinary significance, the term 'shall'
is a word of command, and one which has always and which must be given a
compulsory meaning, and it is generally imperative or mandatory. It has the
invariable significance of operating to impose a duty which may be enforced,
particularly if public policy is in favor of this meaning or when public interest is
involved or where the public or persons have rights which ought to be exercised
or enforced, unless a contrary intent appears." 45
"The presumption is that the word 'shall' in a statute is used in an imperative, and
not in a directory, sense. If a different interpretation is sought, it must rest upon
something in the character of the legislation or in the context which will justify a
different meaning." 46
Exactly what is the signification of the mandate for the OSG "to represent the
Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, proceeding, investigation or matter requiring the
services of a lawyer?"
"To 'represent' is standing in place, supplying the place, or performing the duties
or exercising the rights, of the party represented; to speak or act with authority on
behalf of another; to conduct and control proceedings in court on behalf of
another." 47
The decision of this Court as early as 1910 with respect to the duties of the
Attorney-General well applies to the Solicitor General under the facts of the
present case. The Court then declared:
"In this jurisdiction, it is the duty of the Attorney General 'to perform the
duties imposed upon him by law' and 'he shall prosecute all causes, civil
and criminal, to which the Government of the Philippine Islands, or any
officer thereof, in his official capacity, is a party. . . .'" 48
Being a public officer, the Solicitor General is "invested with some portion of the
sovereign functions of the government, to be exercised by him for the benefit of
the public." 49 Another role of the Solicitor General is as an officer of the Court, in
which case he is called upon "to share in the task and responsibility of dispensing
justice and resolving disputes;" therefore, he may be enjoined in the same
manner that a special prosecutor was so enjoined by this Court from committing
any act which may tend to "obstruct, pervert or impede and degrade the
administration of justice." 50
In one case where a fiscal manifested before the trial court that he would not
prosecute the case in court for insufficiency of evidence after his motion to
dismiss had been denied, this Court granted a petition for mandamus to compel
him to prosecute the case. We declared:
"Notwithstanding his personal convictions or opinions, the fiscal must
proceed with his duty of presenting evidence to the court to enable the
court to arrive at its own independent judgment as to the culpability of
the accused. The fiscal should not shirk from his responsibility much less
leave the prosecution of the case at the hands of a private prosecutor . .
. In the trial of criminal cases, it is the duty of the public prosecutor to
appear for the government since an offense is an outrage to the
sovereignty of the State . . . This is so because the prosecuting officer is
the representative not of an ordinary party to a controversy but of a
sovereignty where obligation to govern impartially is as compelling as its
obligation to govern at all; and whose interest, therefore, in criminal
prosecution is not that it shall win a case, but that justice shall be done.
As such, he is in a peculiar and very definite sense the servant of the
 law, the two-fold aim of which is that guilt shall not escape or innocence
suffer." 51
Undoubtedly, the above arguments apply equally well to the Solicitor General
who is sought to be compelled to appear before the different courts to ensure
that the case of the Republic of the Philippines against those who illegally
amassed wealth at the expense of the people may be made to account for their
misdeeds and return said wealth.
Like the Attorney-General of the United States who has absolute discretion in
choosing whether to prosecute or not to prosecute or to abandon a prosecution
already started, 52 our own Solicitor General may even dismiss, abandon,
discontinue or compromise suits either with or without stipulation with the other
party. 53Abandonment of a case, however, does not mean that the Solicitor
General may just drop it without any legal and valid reasons, for the discretion
given him is not unlimited. 54 Its exercise must be, not only within the parameters
set by law but with the best interest of the State as the ultimate goal. Such are
reflected in its policies, thus:
"The discretionary power of the attorney for the United States in
determining whether a prosecution shall be commenced or maintained
may well depend upon matters of policy wholly apart from any question
of probable cause. Although as a member of the bar, the attorney for the
United States is an officer of the court, he is nevertheless an executive
official of the Government, and it is as an officer of the executive
department that he exercises a discretion as to whether or not there
shall be a prosecution in a particular case. . . ." 55
The first executive order ever issued by President Aquino on February 28, 1986,
created the PCGG. It announced the government's policy of recovering all ill-
gotten wealth amassed by former President Marcos, his immediate family,
relatives and close associates. It charged the PCGG with the "task of assisting
the President" in regard to the recovery of all ill-gotten wealth, investigation of
"such cases of graft and corruption as the President may assign" to it, and the
adoption of safeguards to ensure that corruption may not be again committed
with impunity.
This issuance was followed by Executive Order No. 2 dated March 12,
1986 freezing all assets and properties of Marcos, his family and cronies;
prohibiting their transfer, conveyance, encumbrance or concealment, and
requiring all persons in and outside of the Philippines who are in possession of
said properties to make full disclosure of the same to the PCGG.
On April 11, 1986, the PCGG promulgated its Rules and Regulations. A pertinent
provision states:
 "Section 10. Findings of the Commission. — Based on the evidence
adduced, the Commission shall determine whether there is reasonable
ground to believe that the asset, property or business enterprise in
question constitute ill-gotten wealth as described in Executive Orders
Nos. 1 and 2. In the event of an affirmative finding, the Commission shall
certify the case to the Solicitor General for appropriate action in
accordance with law. Businesses, properties, funds and other assets
found to be lawfully acquired shall be immediately released and the writ
of sequestration, hold or freeze orders lifted accordingly. (Underscoring
supplied)
Thereafter, or on May 7, 1986, Executive Order No. 14 defining the jurisdiction
over cases involving such ill-gotten wealth was issued, it contains the following
provisions:
"Section 1. Any provision of law to the contrary notwithstanding, the
Presidential Commission on Good Government, with the assistance of
the office of the Solicitor General and other government agencies, is
hereby empowered to file and prosecute all cases investigated by it
under Executive Order No. 1, dated February 28, 1986, and Executive
Order No. 2, dated March 12, 1986, as may be warranted by its finding.
Section 2. The Presidential Commission on Good Government shall file
all such cases, whether civil or criminal, with the Sandiganbayan, which
shall have exclusive and original jurisdiction thereof.
Section 3. Civil suits for restitution, reparation of damages, or
indemnification for consequential damages, forfeiture proceedings
provided for under Republic Act No. 1379, or any other civil actions
under the Civil Code or other existing laws, in connection with Executive
Order No. 2 dated March 12, 1986, may be filed separately from and
proceed independently of any criminal proceedings and may be proved
by a preponderance of evidence." (Underscoring supplied)

All these legal provisions ineluctably lead to no other conclusion but that under
the law of its creation and the complementary Rules, the law office of the PCGG,
as it is for the rest of the Government, is the Office of the Solicitor General.
Although the PCGG is "empowered to file and prosecute all cases investigated
by it" under Executive Orders Nos. 1 and 2, it does not thereby oust the Office of
the Solicitor General from its lawful mandate to represent the Government and its
agencies in any litigation, proceeding, investigation or matter requiring the
services of a lawyer. Moreover, such express grant of power to PCGG does not
imply that it may abdicate such power and turn over the prosecution of the cases
to private lawyers whom it may decide to employ. In those instances where
proceedings are to be conducted outside of the Philippines, the Solicitor General,
continuing to discharge his duties, may employ counsel to assist
him, 56 particularly because he may not be licensed to appear before the courts
in a foreign jurisdiction.
Under its own Rules and Regulations, specifically the provision aforequoted, the
PCGG certifies to the Solicitor General the cases for which it had found
reasonable ground to believe that certain assets and properties are ill-gotten
under Executive Orders Nos. 1 and 2. The Solicitor General shall then proceed
"in accordance with law."
Upon receipt of a case certified to him, the Solicitor General exercises his
discretion in the management of the case. He may start the prosecution of the
case by filing the appropriate action in court or he may opt not to file the case at
all. He may do everything within his legal authority but always conformably with
the national interest and the policy of the government on the matter at hand.
After filing a case, he may even move for its dismissal in the event that, along the
way, he realizes that prosecuting the case would not serve the government's
purposes. In other words, because he was appointed to the position on account
of his qualification as a man "learned in the law," the Solicitor General is
obligated to perform his functions and to perform them well. He may not,
however, abdicate his function through an arbitrary exercise of his discretion. We
find that a withdrawal of appearance on flimsy or petty grounds is tantamount to
withdrawing on no grounds at all and to a dereliction of duty.
The Office of the Solicitor General repeatedly invoked the ruling in Orbos v. Civil
Service Commission, 57 which hardly constitutes authority to uphold its position
with respect to the withdrawal of the Solicitor General in the instant case. On the
contrary, in said case, this Court struck down private respondent's motion to
disqualify the OSG from appearing for petitioner Department of Transportation
and Communications Secretary Orbos. At the risk of being repetitious, the parties
were reminded that under Section 1 of Presidential Decree No. 478 —
"The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and
agents in any litigation, proceeding, investigation, or matter requiring the
services of a lawyer." (Underscoring supplied)
This Court clarified that even when "confronted with a situation where one
government office takes an adverse position against another government
agency, as in this case, the Solicitor General should not refrain from performing
his duty as the lawyer of the government. It is incumbent upon him to present to
the court what he considers would legally uphold the best interest of the
government although it may run counter to a client's position. In such an
instance, the government office adversely affected by the position taken by the
Solicitor General, if it still believes in the merit of its case may appear in its own
behalf through its legal personnel or representative."
The Court further pointed out that it is not entirely impossible that the Office of
the Solicitor General may take a position adverse to his clients like the Civil
Service Commission and the National Labor Relations Commission, among
others, and even the People of the Philippines. In such instances, however, it is
not proper for the Solicitor General to simply decline to handle the case or
arbitrarily withdraw therefrom. The Court enjoins him to "nevertheless manifest
his opinion and recommendations to the Court which is an invaluable aid in the
disposition of the case." 58
However, in those cases where a government agency declines the services of
the Solicitor General or otherwise fails or refuses to forward the papers of the
case to him for appropriate action, the Court categorically held that ". . . this
practice should be stopped." 59 By the same token, the Solicitor General should
not decline to appear in court to represent a government agency without just and
valid reason, especially the PCGG which is under the Office of the President, he
being a part of the Executive Department.
In the case at bar, the reason advanced by the Solicitor General for his motion to
withdraw his appearance as lawyer for the PCGG is that he has been, more than
once embarrassed in court and thereby made "a laughing stock in its (his)
professionalism." Examples are when the OSG lawyers betrayed ignorance in
open court of certain moves taken by the PCGG, such as the lifting of a
sequestration of an asset or when it was under the impression that an asset had
mysteriously disappeared only to be informed that "a PCGG Commissioner had
earlier by resolution authorized the disposition of said asset."
The last straw, as it were, was the public announcement through media by the
PCGG that it had "dispensed with or otherwise did not need the legal services of
the lawyer of the government." 60 It is evident that the withdrawal of the Solicitor
General was precipitated by institutional pique, the lawyers concerned having
allowed their collective pride to prevail over their sense of duty in protecting and
upholding the public interest.
One wistfully wishes that the OSG could have been as zealous in representing
the PCGG as it was in appearing for the head of their office, the Solicitor
General, in a civil suit for damages filed against him in a Regional Trial Court
arising from allegedly defamatory remarks uttered by him.
Such enthusiasm, according to this Court, was misplaced. For Section 1
of Presidential Decree No. 478 which authorizes the OSG to represent the
Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, admits of an exception, and that is, it stops short of
representing "public official at any stage of a criminal case or in a civil suit for
damages arising from a felony." 61
In instances such as the above, the OSG can, with reason, withdraw its
representation even if it has already entered its appearance. But the Solicitor
General, as the officially-mandated lawyer of the Government, is not empowered
to take a similar step on the basis of a petty reason like embarrassment, as that
to which the individual lawyers assigned to appear for their office were subjected.
Had they not been too preoccupied with their personal feelings, they could have
checked themselves in time. For a sense of professional responsibility and
proper decorum would dictate that they distinguish between the institution which,
from the very beginning, had been constituted as the law office of the
Government and the individuals through whom its powers and duties are
exercised. No emotions, of whatever kind and degree, should be allowed to
becloud their high sense of duty and commitment to country and people.
The OSG itself admitted refraining from citing other incidents as additional bases
for the Solicitor General's withdrawal "as they are not of meat and substance" but
apparently, their overwhelming sense of shame overcame them as the OSG was
"rendered thereby a laughing stock in its professionalism." 62
Now a word on the incidents that allegedly caused humiliation to the OSG
lawyers, thus provoking the Solicitor General into withdrawing his appearance as
counsel for the PCGG. No litigation can be assured of success if counsel does
not enjoy the confidence of his client. This is manifested by, among other things,
holding regular, constant and untrammeled consultations with each other. Who
can say but that if the communication lines had been kept open between the
OSG and the PCGG, no surprises would have been sprung on the former by the
latter in open court?
Petitioner's claim that the Solicitor General could not withdraw his appearance as
lawyer of PCGG inasmuch as he had neither the consent of his client nor the
authority from the court, applying the pertinent provisions of the Rules of Court, is
not well-taken. Here is no ordinary lawyer-client relationship. Let it be
remembered that the client is no less than the Republic of the Philippines in
whom the plenum of sovereignty resides. Whether regarded as an abstract entity
or an ideal person, it is to state the obvious that it can only act through the
instrumentality of the government which, according to the Administrative Code of
1987, refers to the "corporate governmental entity through which the functions of
government are exercised throughout the Philippines . . ." 63 And the OSG is, by
law, constituted the law office of the Government whose specific powers and
functions include that of representing the Republic and/or the people before any
court in any action which affects the welfare of the people as the ends of justice
may require.
Indeed, in the final analysis, it is the Filipino people as a collectivity that
constitutes the Republic of the Philippines. Thus, the distinguished client of the
OSG is the people themselves of which the individual lawyers in said office are a
part.
In order to cushion the impact of his untimely withdrawal of appearance which
might adversely affect the case, the Solicitor General has offered "to submit his
comment/observation on incidents/matters pending with this Honorable Court, if
called for by circumstances in the interest of the government or if he is so
required by the court." However, as correctly pointed out by the petitioner, while
the Solicitor General may be free to express his views and comments before the
Court in connection with a case he is handling, he may not do so anymore after
he has formally expressed his refusal to appear therein. For by then, he has lost
his standing in court. Unless his views are sought by the court, the Solicitor
General may not voluntarily appear in behalf of his client after his withdrawal
from the case; otherwise, such reappearance would constitute a blatant
disregard for court rules and procedure, and that, on the part of one who is
presumed to be "learned in the law."

In the face of such express refusal on the part of the Solicitor General to continue
his appearance as counsel of the PCGG in the cases to recover the ill-gotten
wealth of the Filipino people from the Marcoses and their cronies, the PCGG has
had to employ the services of a group of private attorneys lest the national
interest be prejudiced. Were this Court to allow such action to remain
unchallenged, this could well signal the laying down of the novel and
unprecedented doctrine that the representation by the Solicitor General of the
Government enunciated by law is, after all, not mandatory but merely directory.
Worse, that this option may be exercised on less than meritorious grounds; not
on substance but on whimsy, depending on the all too human frailties of the
lawyers in the OSG assigned to a particular case. Under such circumstances, it
were better to repeal the law than leave the various government agencies, all
dependent on the OSG for legal representation, in a condition of suspenseful
uncertainty. With every looming legal battle, they will be speculating whether they
can rely on the Solicitor General to defend the Government's interest or whether
they shall have to depend on their own "in-house" resources for legal assistance.
The Court is firmly convinced that, considering the spirit and the letter of the law,
there can be no other logical interpretation of Sec. 35 of the Administrative
Code than that it is, indeed, mandatory upon the OSG to "represent the
Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, proceeding, investigation or matter requiring the
services of a lawyer."
Sound management policies require that the government's approach to legal
problems and policies formulated on legal issues be harmonized and coordinated
by a specific agency. The government owes it to its officials and their respective
offices, the political units at different levels, the public and the various sectors,
local and international, that have dealings with it, to assure them of a degree of
certitude and predictability in matters of legal import.
From the historical and statutory perspectives detailed earlier in this ponencia, it
is beyond cavil that it is the Solicitor General who has been conferred the
singular honor and privilege of being the "principal law officer and legal defender
of the Government." One would be hard put to name a single legal group or law
firm that can match the expertise, experience, resources, staff and prestige of the
OSG which were painstakingly built up for almost a century.
Moreover, endowed with a broad perspective that spans the legal interests of
virtually the entire government officialdom, the OSG may be expected to
transcend the parochial concerns of a particular client agency and instead,
promote and protect the public weal. Given such objectivity, it can discern,
metaphorically speaking, the panoply that is the forest and not just the individual
trees. Not merely will it strive for a legal victory circumscribed by the narrow
interests of the client office or official, but as well, the vast concerns of the
sovereign which it is committed to serve.
In light of the foregoing, the Solicitor General's withdrawal of his appearance on
behalf of the PCGG was beyond the scope of his authority in the management of
a case. As a public official, it is his sworn duty to provide legal services to the
Government, particularly to represent it in litigations. And such duty may be
enjoined upon him by the writ of mandamus. Such order, however, should not be
construed to mean that his discretion in the handling of his cases may be
interfered with. The Court is not compelling him to act in a particular
way. 64 Rather, the Court is directing him to prevent a failure of justice 65
resulting from his abandonment in midstream of the cause of the PCGG and the
Republic and ultimately, of the Filipino people.
In view of the foregoing, there need be no proof adduced that the petitioner has a
personal interest in the case, as his petition is anchored on the right of the
people, through the PCGG and the Republic, to be represented in court by the
public officer duly authorized by law. The requirement of personal interest is
satisfied by the mere fact that the petitioner is a citizen and hence, part of the
public which possesses the right. 66
The writ of prohibition, however, may not be similarly treated and granted in this
petition. The said writ, being intended to prevent the doing of some act that is
about to be done, it may not provide a remedy for acts which are already fait
accompli. 67 Having been placed in a situation where it was constrained to hire
private lawyers if the Republic's campaign to legally recover the wealth amassed
by the Marcoses, their friends and relatives was to prosper, the PCGG's action is
justified. However, it was not entirely blameless. Its failure to coordinate closely
with the Solicitor General has spawned the incidents which culminated in the
withdrawal of the latter from appearing as counsel in its cases.
WHEREFORE, the petition for a writ of mandamus is hereby GRANTED. The
Solicitor General is DIRECTED to immediately re-enter his appearance in the
cases wherein he had filed a motion to withdraw appearance and the PCGG
shall terminate the services of the lawyers it had employed but not before paying
them the reasonable fees due them in accordance with rules and regulations of
the Commission on Audit.
This decision is immediately executory.
SO ORDERED.
Narvasa, C. J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Padilla, Bidin,
Griño-Aquino, Medialdea, Regalado, Davide, Jr. and Nocon, JJ., concur.
Feliciano, J., concurs in the result.
||| (Gonzales v. Chavez, G.R. No. 97351, [February 4, 1992], 282 PHIL 858-892)

EN BANC

[A.C. No. 959 . July 30, 1971.]

PEDRO OPAREL, SR., complainant, vs. ATTY.

DOMINADOR ABARIA, respondent.

SYLLABUS

1. LEGAL ETHICS; ATTORNEYS; DUTY TO ADEQUATELY INFORM CLIENTS

OF THE MODE AND MANNER IN WHICH THEIR INTEREST IS DEFENDED. —
While it would appear that under the circumstances no case lies against
respondent Dominador Abaria, it is not amiss to impress on members of the Bar
that the utmost care be taken to minimize occasions for any misunderstanding
between them and their clients. The relationship being one of confidence, there is
ever present the need for the latter being adequately and fully informed of the mode
and manner in which their interest is defended. They should not be left in the dark.
They are entitled to the fullest disclosure of why certain steps are taken and why
certain matters are either included or excluded from the documents they are made
to sign. It is only thus that their faith in counsel may remain unimpaired.
2. ID.; ID.; ID.; SAME ZEAL SHOULD CHARACTERIZED EFFORTS TO DEFEND
CLIENTS RIGHTS OF PROPERTY. — The same zeal should characterize a
lawyer's efforts as when he is defending the rights of property. As it is, there is
even the fear that a lawyer works harder when he appears for men of substance.
To show how unfounded is such a suspicion, he must exert his utmost, whoever
be his client.
3. ID.; ID.; ID.; DUTY TO USE SIMPLEST LANGUAGE IN COMMUNICATING
MATTERS TO CLIENT. — More specifically, in a case like the present, he should
not invite loss of trust by inadvertence or even by a failure to use the simplest and
most understandable language in communicating matters. For he may lend himself
to the suspicion that he is lacking in candor and may be taking undue advantage
of his client for his own profit and advantage in any dealing with the adverse party.

RESOLUTION

FERNANDO, J : p

This administrative proceeding was started by Pedro Oparel, Sr., who identified
himself as a pauper in his complaint filed with this Court on August 27, 1970
against respondent Dominador Abaria, a member of the Philippine Bar. The
charge was that respondent, whose services were retained to assist complainant
recover damages from his employer for injuries suffered, acted dishonestly.
Apparently, a settlement was reached, complainant having been made to sign a
receipt in the sum of P500.00 for his claim, out of which was deducted P55.00 as
attorney's fees, when the truth, according to the complaint, was that respondent
did receive the much larger amount of P5,000.00. In a resolution of September 14,
1970, the respondent was required to file an answer within ten days from notice. It
was duly filed on October 19, 1970 with a vehement denial on the part of the
respondent, alleging that the complaint was "irresponsible, baseless and [should]
not merit even the scantiest consideration" of this Court. He further alleged that
while complainant was asking only for P200.00, he was able to secure a settlement
from the employer in the sum of P500.00, admitting that he was given as fees the
aforesaid amount of P55.00. He accounted for the alleged sum of P5,000.00 by
stating that P3,500.00 was spent by the employer for plaintiff's operation and
medical bills, another P1,000.00 given to complainant's family during his
confinement in the hospital, and then the P500.00 received in cash by way of
additional settlement. He prayed that the complaint be dismissed.
This Court, in a resolution of October 23, 1970, referred the matter to the Solicitor
General for investigation, report and recommendation. Such report and
recommendation was submitted on June 2, 1971. It was therein stated that the city
fiscal of Bacolod City, who was designated to act as investigator, as the parties
were residents of the place, submitted on March 2, 1971 a report recommending
dismissal due to the desistance of complainant. It appeared that when the case
was called for investigation on February 17, 1971, the complainant manifested that
he was no longer interested in pushing through his complaint against respondent.
In his affidavit of desistance, he admitted that the administrative charge arose out
of a misunderstanding between him and respondent. He likewise admitted that
there was no deception practiced on him by respondent when he was made to sign
the affidavit of September 20, 1966 wherein it appeared that the amount received
by him was P500.00, no mention being made therein of the other P4,500.00 which,
as noted in the answer of respondent, consisted of P3,500.00 for expenses
incurred for complainant's operation and medical bills and P1,000.00 given to his
family for support while he was staying in the hospital. The Solicitor General
agreed with such a recommendation and prayed that the case be dismissed.
While it would appear that under the circumstances no case lies against
respondent Dominador Abaria, it is not amiss to impress on members of the Bar
that the utmost care be taken to minimize occasions for any misunderstanding
between them and their clients. The relationship being one of confidence, there is
ever present the need for the latter being adequately and fully informed of the mode
and manner in which their interest is defended. They should not be left in the dark.
They are entitled to the fullest disclosure of why certain steps are taken and why
certain matters are either included or excluded from the documents they are made
to sign. It is only thus that their faith in counsel may remain unimpaired.
Where, as did happen here, the client happens to be poor and unlettered, seeking
to enforce what he considers his just demands against an employer, it is even
more imperative that matters be explained to him with all precision and clarity.
More than that, no effort should be spared for him to get fully what he is entitled to
under the law. The same zeal should characterize a lawyer's efforts as when he is
defending the rights of property. As it is, there is even the fear that a lawyer works
harder when he appears for men of substance. To show how unfounded is such a
suspicion he must exert his utmost, whoever be his client.
More specifically, in a case like the present, he should not invite loss of trust by
inadvertence or even by a failure to use the simplest and most understandable
language in communicating matters. For he may lend himself to the suspicion that
he is lacking in candor and may be taking undue advantage of his client for his
own profit and advantage in any dealing with the adverse party. At any rate, with
complainant having been satisfied with the explanation of respondent, he could not
be justly charged of being recreant to his trust for personal gain. The dismissal of
this case is therefore warranted.
WHEREFORE, the administrative case filed by Pedro Oparel, Sr. against
respondent Dominador Abaria is dismissed.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Teehankee,
Barredo and Makasiar, JJ., concur.
Villamor, J., took no part.
Dizon, J., is on official leave.

(Oparel, Sr. v. Abaria, A.C. No. 959 (Resolution), [July 30, 1971], 148-B PHIL
|||

109-112)