[A.M. No. 01-4-03-SC. June 29, 2001] "In Estes vs.
"In Estes vs. Texas, the United States Supreme Court held that
RE: REQUEST RADIO-TV COVERAGE OF THE TRIAL IN
THE SANDIGANBAYAN OF THE PLUNDER CASES
AGAINST THE FORMER PRESIDENT JOSEPH E.
ESTRADA,
DECISION
The travails of a deposed President continue. The
Sandiganbayan reels to start hearing the criminal charges against
Mr. Joseph E. Estrada. Media seeks to cover the event via live
television and live radio broadcast and endeavors this Court to
allow it that kind of access to the proceedings.
On 13 March 2001, the Kapisanan ng mga Brodkaster ng
Pilipinas (KBP), an association representing duly franchised and
authorized television and radio networks throughout the country,
sent a letter[1] requesting this Court to allow live media coverage of
the anticipated trial of the plunder and other criminal cases filed
against former President Joseph E. Estrada before the
Sandiganbayan in order "to assure the public of full ransparency in
the proceedings of an unprecedented case in our history." [2] The
request was seconded by Mr. Cesar N. Sarino in his letter of 05
April 2001 to the Chief Justice and, still later, by Senator Renato
Cayetano and Attorney Ricardo Romulo.
On 17 April 2001, the Honorable Secretary of Justice
Hernando Perez formally filed the instant petition, [3] submitting the
following exegesis:
"3. The foregoing criminal cases involve the previous acts of the
former highest official of the land, members of his family, his
cohorts and, therefore, it cannot be over emphasized that the
prosecution thereof, definitely involves a matter of public concern
and interest, or a matter over which the entire citizenry has the
right to know, be informed and made aware of.
" 4. There is no gainsaying that the constitutional right of the people
to be informed on matters of public concern, as in the instant
cases, can best be recognized, served and satisfied by allowing
the live radio and television coverage of the concomitant court
proceedings.
"5. Moreover, the live radio and television coverage of the
proceedings will also serve the dual purpose of ensuring the
desired transparency in the administration of justice in order to
disabuse the minds of the supporters of the past regime of any and
all unfounded notions, or ill-perceived attempts on the part of the
present dispensation, to 'railroad' the instant criminal cases against
the Former President Joseph Ejercito Estrada."[4]
Public interest, the petition further averred, should be evident
bearing in mind the right of the public to vital information affecting
the nation.
In effect, the petition seeks a re-examination of the 23rd
October 1991 resolution of this Court in a case for libel filed by then
President Corazon C. Aquino. The resolution read:
"The records of the Constitutional Commission are bereft of
discussion regarding the subject of cameras in the
courtroom. Similarly, Philippine courts have not had the opportunity
to rule on the question squarely.
While we take notice of the September 1990 report of the United
States Judicial Conference Ad Hoc Committee on Cameras in the
Courtroom, still the current rule obtaining in the Federal Courts of
the United States prohibit the presence of television cameras in
criminal trials. Rule 53 of the Federal Rules of Criminal Procedure
forbids the taking of photographs during the progress of judicial
proceedings or radio broadcasting of such proceedings from the
courtroom. A trial of any kind or in any court is a matter of serious
importance to all concerned and should not be treated as a means
of entertainment. To so treat it deprives the court of the dignity
which pertains to it and departs from the orderly and serious quest
for truth for which our judicial proceedings are formulated.
"Courts do not discriminate against radio and television media by
forbidding the broadcasting or televising of a trial while permitting
the newspaper reporter access to the courtroom, since a television
or news reporter has the same privilege, as the news reporter is
not permitted to bring his typewriter or printing press into the
courtroom.
television coverage of judicial proceedings involves an inherent
denial of the due process rights of a criminal defendant. Voting 5-4,
the Court through 'Mr. Justice Clark, identified four (4) areas of
potential prejudice which might arise from the impact of the
cameras on the jury, witnesses, the trial judge and the
defendant.The decision in part pertinently stated:
"'Experience likewise has established the prejudicial effect of
telecasting on witnesses. Witnesses might be frightened, play to
the camera, or become nervous. They are subject to extraordinary
out-of-court influences which might affect their testimony. Also,
telecasting not only increases the trial judge's responsibility to
avoid actual prejudice to the defendant, it may as well affect his
own performance. Judges are human beings also and are subject
to the same psychologjcal reactions as laymen. For the defendant,
telecasting is a form of mental harassment and subjects him to
excessive public exposure and distracts him from the effective
presentation of his defense.
'The television camera is a powerful weapon which intentionally or
inadvertently can destroy an accused and his case in the eyes of
the public.'
"Representatives of the press have no special standing to apply for
a writ of mandate to compel a court to permit them to attend a trial,
since within the courtroom, a reporter's constitutional rights are no
greater than those of any other member of the public. Massive
intrusion of representatives of the news media into the trial itself
can so alter or destroy the constitutionally necessary judicial
atmosphere and decorum that the requirements of impartiality
imposed by due process of law are denied the defendant and a
defendant in a criminal proceeding should not be forced to run a
gauntlet of reporters and photographers each time he enters or
leaves the courtroom.
"Considering the prejudice it poses to the defendant's right to due
process as well as to the fair and orderly administration of justice,
and considering further that the freedom of the press and the right
of the people to information may be served and satisfied by less
distracting, degrading and prejudicial means, live radio and
television coverage of court proceedings shall not be allowed.Video
footages of court hearings for news purposes shall be restricted
and limited to shots of the courtroom, the judicial officers, the
parties and their counsel taken prior to the commencement of
official proceedings. No video shots or photographs shall be
permitted during the trial proper.
"Accordingly, in order to protect the parties right to due process, to
prevent the distraction of the participants in the proceedings and in
the last analysis, to avoid miscarriage of justice, the Court resolved
to PROHIBIT live radio and television coverage of court
proceedings. Video footages of court hearings for news purposes
shall be limited and restricted as above indicated."
Admittedly, the press is a mighty catalyst in awakening public
consciousness, and it has become an important instrument in the
quest for truth.[5] Recent history exemplifies media's invigorating
presence, and its contribution to society is quite impressive. The
Court, just recently, has taken judicial notice of the enormous effect
of media in stirring public sentience during the impeachment trial, a
partly judicial and partly political exercise, indeed the most-watched
program in the boob-tubes during those times, that would soon
culminate in EDSA II.
The propriety of granting or denying the instant petition
involve the weighing out of the constitutional guarantees of
freedom of the press and the right to public information, on the one
hand, and the fundamental rights of the accused, on the other
hand, along with the constitutional power of a court to control its
proceedings in ensuring a fair and impartial trial. [6]
When these rights race against one another,
jurisprudence[7] tells us that the right of the accused must be
preferred to win.
With the possibility of losing not only the precious liberty but
also the very life of an accused, it behooves all to make absolutely
certain that an accused receives a verdict solely on the basis of a
just and dispassionate judgment, a verdict that would come only
after the presentation of credible evidence testified to by unbiased
witnesses unswayed by any kind of pressure, whether open or
subtle, in proceedings that are devoid of histrionics that might
detract from its basic aim to ferret veritable facts free from improper
influence,[8] and decreed by a judge with an unprejudiced mind,
unbridled by running emotions or passions.
Due process guarantees the accused a presumption of
innocence until the contrary is proved in a trial that is not lifted
above its individual settings nor made an object of public's
attention[9]and where the conclusions reached are induced not by
any outside force or influence [10] but only by evidence and
argument given in open court, where fitting dignity and calm
ambiance is demanded.
Witnesses and judges may very well be men and women of
fortitude, able to thrive in hardy climate, with every reason to
presume firmness of mind and resolute endurance, but it must also
be conceded that "television can work profound changes in the
behavior of the people it focuses on."[11] Even while it may be
difficult to quantify the influence, or pressure that media can bring
to bear on them directly and through the shaping of public opinion,
it is a fact, nonetheless, that, indeed, it does so in so many ways
and in varying degrees. The conscious or unconscious effect that
such coverage may have on the testimony of witnesses and the
decision of judges cannot be evaluated but, it can likewise be said,
it is not at all unlikely for a vote of guilt or innocence to yield to it.
[12]
It might be farcical to build around them an impregnable armor
against the influence of the most powerful media of public opinion.
[13]
To say that actual prejudice should first be present would
leave to near nirvana the subtle threats to justice that a disturbance
of the mind so indispensable to the calm and deliberate
dispensation of justice can create.[14] The effect of television may
escape the ordinary means of proof, but it is not far-fetched for it to
gradually erode our basal conception of a trial such as we know it
now.[15]
An accused has a right to a public trial but it is a right that
belongs to him, more than anyone else, where his life or liberty can
be held critically in balance. A public trial aims to ensure that he is
fairly dealt with and would not be unjustly condemned and that his
rights are not compromised in secrete conclaves of long ago. A
public trial is not synonymous with publicized trial; it only implies
that the court doors must be open to those who wish to come, sit in
the available seats, conduct themselves with decorum and observe
the trial process. In the constitutional sense, a courtroom should
have enough facilities for a reasonable number of the public to
observe the proceedings, not too small as to render the openness
negligible and not too large as to distract the trial participants from
their proper functions, who shall then be totally free to report what
they have observed during the proceedings.[16]
The courts recognize the constitutionally embodied freedom
of the press and the right to public information. It also approves of
media's exalted power to provide the most accurate and
comprehensive means of conveying the proceedings to the public
and in acquainting the public with the judicial process in action;
nevertheless, within the courthouse, the overriding consideration is
still the paramount right of the accused to due process [17] which
must never be allowed to suffer diminution in its constitutional
proportions. Justice Clark thusly pronounced, "while a maximum
freedom must be allowed the press in carrying out the important
function of informing the public in a democratic society, its exercise
must necessarily be subject to the maintenance of absolute
fairness in the judicial process."[18]
This Court, in the instance [19] already mentioned, citing Estes
vs. Texas,[20] the United States Supreme Court holding the
television coverage of judicial proceedings as an inherent denial of
due process rights of an accused, also identified the following as
being likely prejudices:
"1. The potential impact of television x x x is perhaps of the
greatest significance. x x x. From the moment the trial judge
announces that a case will be televised it becomes a cause
celebre. The whole community, x x x becomes interested in all the
morbid details surrounding it. The approaching trial immediately
assumes an important status in the public press and the accused is
highly publicized along with the offense with which he is
charged. Every juror carries with him into the jury box these solemn
facts and thus increases the chance of prejudice that is present in
every criminal case. x x x
"2. The quality of the testimony in criminal trials will often be
impaired. The impact upon a witness of the knowledge that he is
being viewed by a vast audience is simply incalculable. Some may
be demoralized and frightened, some cocky and given to
overstatement; memories may falter, as with anyone speaking
publicly, and accuracy of statement may be severely undermined. x
x x.Indeed, the mere fact that the trial is to be televised might
render witnesses reluctant to appear and thereby impede the trial
as well as the discovery of the truth.
"3. A major aspect of the problem is the additional responsibilities
the presence of television places on the trial judge. His job is to
make certain that the accused receives a fair trial. This most
difficult task requires his undivided attention. x x x
4. Finally, we cannot ignore the impact of courtroom television on
the defendant. Its presence is a form of mental - if not physical-
harassment, resembling a police line-up or the third degree. The
inevitable close-up of his gestures and expressions during the
ordeal of his trial might well transgress his personal sensibilities,
his dignity, and his ability to concentrate on the proceedings before
him - sometimes the difference between life and death -
dispassionately, freely and without the distraction of wide public
surveillance. A defendant on trial for a specific crime is entitled to
his day in court, not in a stadium, or a city or nationwide arena. The
heightened public clamor resulting from radio and television
coverage will inevitably result in prejudice."
In his concurring opinion in Estes, Mr. Justice Harlan opined
that live television and radio coverage could have mischievous
potentialities for intruding upon the detached atmosphere that
should always surround the judicial process.[21]
The Integrated Bar of the Philippines, in its Resolution of 16
April 2001, expressed its own concern on the live television and
radio coverage of the criminal trials of Mr. Estrada; to paraphrase:
Live television and radio coverage can negate the rule on exclusion
of witnesses during the hearings intended to assure a fair trial; at
stake in the criminal trial is not only the life and liberty of the
accused but the very credibility of the Philippine criminal justice
system, and live television and radio coverage of the trial could
allow the "hooting throng" to arrogate unto themselves the task of
judging the guilt of the accused, such that the verdict of the court
will be acceptable only if popular; and live television and radio
coverage of the trial will not subserve the ends of justice but will
only pander to the desire for publicity of a few grandstanding
lawyers.
It may not be unlikely, if the minority position were to be
adopted, to see protracted delays in the prosecution of cases
before trial courts brought about by petitions seeking a declaration
of mistrial on account of undue publicity and assailing a court a
quo's action either allowing or disallowing live media coverage of
the court proceedings because of supposed abuse of discretion on
the part of the judge.
En passant, the minority would view the ponencia as having
modified the case law on the matter. Just to the contrary, the Court
effectively reiterated its standing resolution of 23 October
1991. Until 1991, the Court had yet to establish the case law on the
matter, and when it did in its 23 rd October resolution, it confirmed, in
disallowing live television and radio coverage of court proceedings,
that "the records of the Constitutional Commission (were) bereft of
discussion regarding the subject of cameras in the courtroom" and
that "Philippine courts (had) not (theretofore) had the opportunity to
rule on the question squarely."
But were the cases decided by the U.S. courts and cited in
the minority opinion really in point?
In Nebraska Press Association vs. Stewart,[22] the
Nebraska State trial judge issued an order restraining news media
from publishing accounts of confession or admissions made by the
accused or facts strongly implicating him. The order was struck
down. In Richmond Newspaper, Inc., vs. Virginia ,[23] the trial
judge closed the courtroom to the public and all participants except
witnesses when they testify. The judge was reversed by the U.S.
Supreme Court which ruled that criminal trials were historically
open. In Globe Newspaper vs. Superior Court,[24] the US
Supreme Court voided a Massachusetts law that required trial
judges to exclude the press and the public from the courtroom
during the testimony of a minor victim of certain sexual offenses.
Justice Stewart, in Chandler vs. Florida,[25] where two
police officers charged with burglary sought to overturn their
conviction before the US Supreme Court upon the ground that the
television coverage had infringed their right to fair trial, explained
that "the constitutional violation perceived by the Estes Court did
not stem from the physical disruption that might one day disappear
with technological advances in the television equipment but
inhered, rather, in the hypothesis that the mere presence of
cameras and recording devices might have an effect on the trial
participants prejudicial to the accused."[26]
Parenthetically, the United States Supreme Court and other
federal courts do not allow live television and radio coverage of
their proceedings.
The sad reality is that the criminal cases presently involved
are of great dimensions so involving as they do a former President
of the Republic. It is undeniable that these cases have twice
become the nation's focal points in the two conflicting phenomena
of EDSA II and EDSA III where the magnitude of the events has left
a still divided nation. Must these events be invited anew and risk
the relative stability that has thus far been achieved? The
transcendental events in our midst do not allow us to, turn a blind
eye to yet another possible extraordinary case of mass action
being allowed to now creep into even the business of the courts in
the dispensation of justice under a rule of law. At the very least, a
change in the standing rule of the court contained in its resolution
of 23 October 1991 may not appear to be propitious.
Unlike other government offices, courts do not express the
popular will of the people in any sense which, instead, are tasked
to only adjudicate justiciable controversies on the basis of what
alone is submitted before them.[27] A trial is not a free trade of
ideas. Nor is a competing market of thoughts the known test truth
in a courtroom.[28]
The Court is not all that unmindful of recent technological and
scientific advances but to chance forthwith the life or liberty of any
person in a hasty to bid to use and apply them, even before ample
safety nets are provided and the concerns heretofore expressed
are aptly addressed, is a price too high to pay.
WHEREFORE, the petition is DENIED.SO ORDERED.
PRIVILEGED
COMMUNICATION
Conversation that takes places within the context of a protected
relationship, such as that between an attorney and client, a
husband and wife, a priest and penitent, and a doctor and patient.
The law often protects against forced disclosure of such
conversations. However, there are exceptions that can invalidate a
privileged communication, and there are various circumstances
where it can be waived, either purposefully or unintentionally.

Those statements made by a client to his counsel or attorney, or

solicitor, in confidence, relating to some cause Or action then
pending or in contemplation. Such communications cannot be
disclosed without the consent of the client. In judicial proceedings,
the law allows people to refuse to disclose the contents of certain
privileged conversations and writings. Communications between an
attorney and client, husband and wife, clergyperson and penitent,
and doctor and patient are all privileged. In a few states, the
privilege extends to a psychotherapist and client and to a reporter
and her source.

To qualify for privileged status, communications must generally be

made in a private setting (that is, in a context where confidentiality
could reasonably be expected). The privilege is lost (waived) when
all or part of the communication is disclosed to a third person.
These privileges are held by the client (but not the lawyer), the
patient (but not the doctor or psychotherapist), the speaking (but
not the spoken-to) spouse and both the clergyperson and
the penitent. The lawyer, doctor, psychotherapist and
spoken-to spouse, however, cannot reveal the
communication without the other person's consent. The
client, patient, speaking spouse, clergyperson and
penitent may waive the privilege (that is, testify about
the conversation) and also may prevent the other
person from disclosing the information.
Example: Sue and Martin are divorcing. When Martin
first left Sue, he emptied out a joint bank account and
placed that money in a separate account in another
state. He refuses to tell Sue where the money is, but he
has told his lawyer, Ann. The discussion between Martin
and Ann is privileged, and unless Martin authorizes Ann
to tell Sue where the money is, or unless Martin himself
tells another person about his conversation with Ann,
Ann cannot be forced to disclose the information.

Marital communications privilege. Courts cannot force

husbands and wives to disclose the contents of
confidential communications made during marriage. The
purpose of the privilege is to protect and promote
honesty and confidence within marriages.

Example: Sandy has a budding marijuana brownie

business which she operates out of her home. Sandy has
told her husband, Doug, about her endeavors. All
private conversations between them are privileged; that
is, if Sandy is ever prosecuted for her business, she can
prevent Doug from disclosing what he knows.

Spousal privilege. Courts cannot force husbands and

wives to testify against each other. For example, when a
former husband trying to gain custody of his child called
his ex-wife's new husband as a witness to testify about
her treatment of the child, the court refused to force him
to testify on the grounds that it could jeopardize an
existing marriage.

G.R. No. 90083 October 4, 1990
KHALYXTO PEREZ MAGLASANG vs.PEOPLE
RESOLUTION
PER CURIAM:
On June 22, 1989, a petition for certiorari 1 entitled "Khalyxto Perez
Maglasang vs. People of the Philippines, Presiding Judge, Ernesto
B. Templado (San Carlos City Court) Negros Occidental," was filed
by registered mail with the Court. Due to non-compliance with the
requirements of Circular No. 1-88 of the Court, specifically the non-
payment of P316.50 for the legal fees and the non-attachment of
the duplicate originals or duly certified true copies of the
questioned decision and orders of the respondent judge denying
the motion for reconsideration, the Court dismissed the petition on
July 26, 1989. 2
On September 9, 1989, Atty. Marceliano L. Castellano, as counsel
of the petitioner, moved for a reconsideration of the resolution
dismissing the petition. 3 This time, the amount of P316.50 was
remitted and the Court was furnished with a duplicate copy of the
respondent judge's decision, and also the IBP O.R. No. and the
date of the payment of his membership dues. The motion for
reconsideration did not contain the duplicate original or certified
true copies of the assailed orders. Thus, in a Resolution dated
October 18, 1989, the motion for reconsideration was denied "with
FINALITY." 4
Three months later, or on January 22, 1990 to be exact, the Court
received from Atty. Castellano a copy of a complaint dated
December 19, 1989, filed with the Office of the President of the
Philippines whereby Khalyxto Perez Maglasang, through his
lawyer, Atty. Castellano, as complainant, accused all the five
Justices of the Court's Second Division with "biases and/or
ignorance of the law or knowingly rendering unjust judgments or
resolution." 5The complaint was signed by Atty. Castellano "for the
complainant" with the conformity of one Calixto B. Maglasang,
allegedly the father of accused-complainant Khalyxto. 6 By reason
of the strong and intemperate language of the complaint and its
improper filing with the Office of the President, which, as he should
know as a lawyer, has no jurisdiction to discipline, much more,
remove, Justices of the Supreme Court, on February 7, 1990, Atty.
Castellano was required to show cause why he should not be
punished for contempt or administratively dealt with for improper
conduct. 7 On March 21, 1990, Atty. Castellano filed by registered
mail his "Opposition To Cite For Contempt Or Administratively Dealt
With For An Improper Conduct (sic)." 8
In his "Opposition", Atty. Castellano claimed that the complaint
"was a constructive criticism intended to correct in good faith the
erroneous and very strict practices of the Justices concerned, as
Respondents (sic). 9 Atty. Castellano further disputed the authority
and jurisdiction of the Court in issuing the Resolution requiring him
to show cause inasmuch as "they are Respondents in this
particular case and no longer as Justices and as such they have no
more jurisdiction to give such order." 10 Thus, according to him, "the
most they (Justices) can do by the mandate of the law and
procedure (sic) is to answer the complaint satisfactorily so that they
will not be punished in accordance with the law just like a common
tao." 11
Notwithstanding his claim that the complaint was a "constructive
criticism," the Court finds the various statements made by Atty.
Castellano in the complaint he lodged with the Office of the
President of the Philippines and in his "Opposition" filed with the
Court portions of which read as follows:
VI
That with all these injustices of the 2nd Division, as
assigned to that most Honorable Supreme Court, the
complainant was legally constrained to file this
Administrative Complaint to our Motherly President who
is firm and determined to phase-out all the
scalawags (Marcos Appointees and Loyalists) still in your
administration without bloodshed but by honest and just
investigations, which the accused-complainant concurs to
such procedure and principle, or otherwise, he could
have by now a rebel with the undersigned with a cause
for being maliciously deprived or unjustly denied of Equal
Justice to be heard by our Justices designated to the
Highest and most Honorable Court of the Land (Supreme
Court); 12 (Emphasis ours.)
VII
That the Honorable Supreme Court as a Court
has no fault at all for being Constitutionally
created, but the Justices assigned therein are
fallables (sic), being bias (sic), playing
ignorance of the law and knowingly rendering
unjust Resolutions the reason observed by the
undersigned and believed by him in good faith,
is that they are may be Marcos-appointees,
whose common intention is to sabotage the
Aquino Administration and to rob from innocent
Filipino people the genuine Justice and
Democracy, so that they will be left in
confusion and turmoil to their advantage and to
the prejudice of our beloved President's
honest, firm and determined Decision to bring
back the real Justice in all our Courts , for the
happiness, contentment and progress of your
people and the only country which God has
given us. PHILIPPINES. 13 (Emphasis ours.)
VIII
That all respondents know the law and the pure
and simple meaning of Justice, yet they
refused to grant to the poor and innocent
accused-complainant, so to save their brethren
in rank and office (Judiciary) Judge Ernesto B.
Templado, . . . 14
IX
. . . If such circulars were not known to the
undersigned, it's the fault of the Justices of the
Honorable Supreme Court, the dismissal of the
petition was based more of money reasons. . . .
This is so for said Equal Justice is our very
Breath of Life to every Filipino, who is brave to
face the malicious acts of the Justices of the
Second Division, Supreme Court. By reason of
fear for the truth Respondents ignore the equal
right of the poor and innocent-accused
(complainant) to be heard against the rich and
high-ranking person in our Judiciary to be
heard in equal justice in our Honorable Court,
for the respondents is too expensive and can't
be reached by an ordinary man for the Justices
therein are inconsiderate, extremely strict and
meticulous to the common tao and hereby
grossly violate their Oath of Office and our
Constitution "to give all possible help and
means to give equal Justice to any man,
regardless of ranks and status in
life" 15 (Emphasis ours.)
xxx xxx xxx
5. That the undersigned had instantly without
delay filed a Motion for Reconsideration to the
Resolution which carries with it a final denial of
his appeal by complying ( sic) all the
requirements needed for a valid appeal yet the
respondents denied just the same which legally
hurt the undersigned in the name of Justice, for
the Respondents-Justices, were so strict
or inhumane and so inconsiderate that there
despensation (sic) of genuine justice was too
far and beyond the reach of the Accused-
Appellant, as a common tao, as proved by
records of both cases mentioned above. 16
xxx xxx xxx
 D. That by nature a contempt order is a one
sided weapon commonly abused by Judges
and Justices, against practicing lawyers, party-
litigants and all Filipino people in general for no
Judges or Justices since the beginning of our
Court Records were cited for contempt by any
presiding Judge. That this weapon if
maliciously applied is a cruel means to silence
a righteous and innocent complainant and to
favor any person with close relation. 17
scurrilous and contumacious. His allegations that the
Court in dismissing his petition did so "to save their
brethren in rank and office (Judiciary) Judge Ernesto B.
Templado," and that the dismissal was "based more for
(sic) money reasons;" and his insinuation that the Court
maintains a double standard in dispensing justice one
set for the rich and another for the poor went beyond
the bounds of "constructive criticism." They are not
relevant to the cause of his client. On the contrary, they
cast aspersion on the Court's integrity as a neutral and
final arbiter of all justiciable controversies brought before
it. Atty. Castellano should know that the Court in resolving
complaints yields only to the records before it and not to
any extraneous influence as he disparagingly intimates.
It bears stress that the petition was dismissed initially by the Court
for the counsel's failure to fully comply with the requirements laid
down in Circular No. 1-88, a circular on expeditious disposition of
cases, adopted by the Court on November 8, 1988, but effective
January 1, 1989, after due publication. It is true that Atty.
Castellano later filed on behalf of his client a motion for
reconsideration and remitted the necessary legal fees, 18 furnished
the Court with a duplicate original copy of the assailed trial court's
decision, 19 and indicated his IBP O.R. No. and the date he paid his
dues. 20 But he still fell short in complying fully with the
requirements of Circular No. 1-88. He failed to furnish the Court
with duplicate original or duty certified true copies of the other
questioned orders issued by the respondent trial court judge. At
any rate, the explanation given by Atty. Castellano did not render
his earlier negligence excusable. Thus, as indicated in our
Resolution dated October 18, 1989 which denied with finality his
motion for reconsideration, "no valid or compelling reason (having
been) adduced to warrant the reconsideration sought." Precisely,
under paragraph 5 of Circular No. 1-88 it is provided that
"(S)ubsequent compliance with the above requirements will not
warrant reconsideration of the order of dismissal unless it be
shown that such non-compliance was due to compelling reasons."
It is clear that the case was lost not by the alleged injustices Atty.
Castellano irresponsibly ascribed to the members of the Court's
Second Division, but simply because of his inexcusable negligence
and incompetence. Atty. Castellano, however, seeks to pass on the
blame for his deficiencies to the Court, in the hope of salvaging his
reputation before his client. Unfortunately, the means by which Atty.
Castellano hoped to pass the buck so to speak, are grossly
improper. As an officer of the Court, he should have known better
than to smear the honor and integrity of the Court just to keep the
confidence of his client. Time and again we have emphasized that
a "lawyer's duty is not to his client but to the administration of
justice; to that end, his client's success is wholly subordinate; and
his conduct ought to and must always be scrupulously observant of
law and ethics." 21 Thus, "while a lawyer must advocate his client's
cause in utmost earnest and with the maximum skill he can
marshal, he is not at liberty to resort to arrogance, intimidation, and
innuendo." 22
To be sure, the Court does not pretend to be immune from
criticisms. After all, it is through the criticism of its actions that the
Court, composed of fallible mortals, hopes to correct whatever
mistake it may have unwittingly committed. But then again, "[i]t is
the cardinal condition of all such criticism that it shall be bona
fide and shall not spill over the walls of decency and propriety. A
wide chasm exists between fair criticism, on the one hand, and
abuse and slander of courts and the judges thereof, on the other.
Intemperate and unfair criticism is a gross violation of the duty of
respect to courts." 23 In this regard, it is precisely provided under
Canon 11 of the Code of Professional Responsibility that:
CANON 11-A LAWYER SHALL OBSERVE AND
MAINTAIN THE RESPECT DUE TO THE COURTS AND
TO JUDICIAL OFFICERS AND SHOULD INSIST ON
SIMILAR CONDUCT BY OTHERS.
xxx xxx xxx
RULE 11.03 A lawyer shall abstain from
scandalous, offensive or menancing language
or behavior before the courts.
RULE 11.04 A lawyer should not attribute to
a judge motives not supported by the record or
have materiality to the case.
xxx xxx xxx
We further note that in filing the "complaint" against the justices of
the Court's Second Division, even the most basic tenet of our
government system the separation of powers between the
judiciary, the executive, and the legislative branches has been
lost on Atty. Castellano. We therefore take this occasion to once
again remind all and sundry that "the Supreme Court is supreme
the third great department of government entrusted exclusively with
the judicial power to adjudicate with finality all justiciable disputes,
public and private. No other department or agency may pass upon
its judgments or declare them 'unjust.'" 24 Consequently, and owing
to the foregoing, not even the President of the Philippines as Chief
Executive may pass judgment on any of the Court's acts.
Finally, Atty. Castellano's assertion that the complaint "was a
constructive criticism intended to correct in good faith the
erroneous and very strict practices of the Justices, concerned as
Respondents (sic)" is but a last minute effort to sanitize his clearly
unfounded and irresponsible accusation. The arrogance displayed
by counsel in insisting that the Court has no jurisdiction to question
his act of having complained before the Office of the President, and
in claiming that a contempt order is used as a weapon by judges
and justices against practicing lawyers, however, reveals all too
plainly that he was not honestly motivated in his criticism. Rather,
Atty. Castellano's complaint is a vilification of the honor and
integrity of the Justices of the Second Division of the Court and an
impeachment of their capacity to render justice according to law.
WHEREFORE, Atty. Marceliano L. Castellano is found guilty of
CONTEMPT OF COURT and IMPROPER CONDUCT as a
member of the Bar and an officer of the Court, and is hereby
ordered to PAY within fifteen (15) days from and after the finality of
this Resolution a fine of One Thousand (P1,000.00) Pesos, or
SUFFER ten (10) days imprisonment in the municipal jail of
Calatrava, Negros Occidental in case he fails to pay the fine
seasonably, and SUSPENDED from the practice of law throughout
the Philippines for six (6) months as soon as this Resolution
becomes final, with a WARNING that a repetition of any
misconduct on his part will be dealt with more severely. Let notice
of this Resolution be entered in Atty. Castellano's record, and be
served on the Integrated Bar of the Philippines, the Court of
Appeals, and the Executive Judges of the Regional Trial Courts
and other Courts of the country, for their information and guidance.
SO ORDERED.

[G.R. No. 105938. September 20, 1996]
TEODORO R. REGALA vs. THE HONORABLE
SANDIGANBAYAN,
KAPUNAN, J .:
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.[3] Respondent 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:
x x x.
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 theconsequences 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.
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.
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 PCGGs 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. (Underscoring
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
by honorarium 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
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 attorneys 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 clients 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 clients 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 clients name would
implicate that client in the very activity for which he
sought the lawyers 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 clients 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 clients identity before a grand
jury. Reversing the lower courts 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 lawyers
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 clients identity and the nature of that clients 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 clients consent. 8 J. Wigmore, supra sec. 2291, at 545. In
furtherance of this policy, the clients 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 lawyers claim to the effect that he could not
reveal the name of his client because this would
expose the latter to civil litigation.
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]
x x x 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; x x x 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. xxx.
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 courts 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 lawyers
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 governments lawyers have no case against an
attorneys client unless, by revealing the clients 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 clients
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 taxpayers 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 Bairds 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 clients income tax
liability pending. The court emphasized the exception that a clients
name is privileged when so much has been revealed concerning
the legal services rendered that the disclosure of the clients 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
clients 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 clients 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 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 prosecutions suspicions, then the clients 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 petitioners' 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]"xxx 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? x x x 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 my
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
clients 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.
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.
x x x. 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 PCGGs
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 PCGGs 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.
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 exclude petitioners Teodoro D. Regala, Edgardo
J. Angara, Avelino V. Cruz, Jose C. Concepcion, *Rogelio A.
Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G.
Hayuduni as parties-defendants in SB Civil Case No. 0033 entitled
"Republic of the Philippines v. Eduardo Cojuangco, Jr., et al .".
SO ORDERED.

A.M. No. 936 July 25, 1975
FERMINA LEGASPI DAROY, LYDIA LEGASPI and
AGRIPINO LEGASPI, complainants,
vs.
ATTORNEY RAMON CHAVES LEGASPI, respondent.
AQUINO, J.:
Fermina Legazpi-Daroy, Lydia Legaspi-Acha and Agripino Legaspi
of Iligan City, in a verified complaint dated March 10, 1970, charged
Attorney Ramon Chaves Legaspi 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 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.
Nop. 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, Teofilo Legaspi, 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 Legaspito see him
on that date so that the money could be 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 here 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
extrajudicial 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
It turned out that on October 20, 1969 the respondent, as to
"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).1wph1.t
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 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 as a carbon copy of a supposed extrajudicial partition
executed in 1968 by the four children of Consuelo Gonzaga, by her
surviving husband, Teofilo Legaspi 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 March 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).1wph1.t
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).1wph1.t
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 practices 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 re Paraiso, 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. Alio, 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 MacDougall, 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).1wph1.t
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.
G.R. No. L-3404 April 2, 1951
ANGELA I. TUASON, plaintiff-appellant,
vs.
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC.,
MONTEMAYOR, J. :
In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto
and their brother Antonio Tuason Jr., held a parcel of land with an
area of 64,928.6 sq. m. covered by Certificate of Title No. 60911 in
Sampaloc, Manila, in common, each owning an undivided 1/3
portion. Nieves wanted and asked for a partition of the common
property, but failing in this, she offered to sell her 1/3 portion. The
share of Nieves was offered for sale to her sister and her brother
but both declined to buy it. The offer was later made to their mother
but the old lady also declined to buy, saying that if the property later
increased in value, she might be suspected of having taken
advantage of her daughter. Finally, the share of Nieves was sold to
Gregorio Araneta Inc., a domestic corporation, and a new
Certificate of Title No. 61721 was issued in lieu of the old title No.
60911 covering the same property. The three co-owners agreed to
have the whole parcel subdivided into small lots and then sold, the
proceeds of the sale to be later divided among them. This
agreement is embodied in a document (Exh. 6) entitled
"Memorandum of Agreement" consisting of ten pages, dated June
30, 1941.
Before, during and after the execution of this contract (Exh. 6), Atty.
J. Antonio Araneta was acting as the attorney-in-fact and lawyer of
the two co-owners, Angela I. Tuason and her brother Antonio
Tuason Jr. At the same time he was a member of the Board of
Director of the third co-owner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be briefly stated
as follows: The three co-owners agreed to improve the property by
filling it and constructing roads and curbs on the same and then
subdivide it into small lots for sale. Araneta Inc. was to finance the
whole development and subdivision; it was prepare a schedule of
prices and conditions of sale, subject to the subject to the approval
of the two other co-owners; it was invested with authority to sell the
lots into which the property was to be subdivided, and execute the
corresponding contracts and deeds of sale; it was also to pay the
real estate taxes due on the property or of any portion thereof that
remained unsold, the expenses of surveying, improvements, etc.,
all advertising expenses, salaries of personnel, commissions, office
and legal expenses, including expenses in instituting all actions to
eject all tenants or occupants on the property; and it undertook the
duty to furnish each of the two co-owners, Angela and Antonio
Tuason, copies of the subdivision plans and the monthly sales and
rents and collections made thereon. In return for all this
undertaking and obligation assumed by Araneta Inc., particularly
the financial burden, it was to receive 50 per cent of the gross
selling price of the lots, and any rents that may be collected from
the property, while in the process of sale, the remaining 50 per cent
to be divided in equal portions among the three co-owners so that
each will receive 16.33 per cent of the gross receipts.
Because of the importance of paragraphs 9, 11 and 15 of the
contract (Exh. 6), for purposes of reference we are reproducing
them below:
(9) This contract shall remain in full force and effect
during all the time that it may be necessary for the
PARTY OF THE SECOND PART to fully sell the said
property in small and subdivided lots and to fully collect
the purchase prices due thereon; it being understood and
agreed that said lots may be rented while there are no
purchasers thereof;
(11) The PARTY OF THE SECOND PART (meaning
Araneta Inc.) is hereby given full power and authority to
sign for and in behalf of all the said co-owners of said
property all contracts of sale and deeds of sale of the lots
into which this property might be subdivided; the powers
herein vested to the PARTY OF THE SECOND PART
may, under its own responsibility and risk, delegate any
of its powers under this contract to any of its officers,
employees or to third persons;
(15) No co-owner of the property subject-matter of this
contract shall sell, alienate or dispose of his ownership,
interest or participation therein without first giving
preference to the other co-owners to purchase and
acquire the same under the same terms and conditions
as those offered by any other prospective purchaser.
Should none of the co-owners of the property subject-
matter of this contract exercise the said preference to
acquire or purchase the same, then such sale to a third
party shall be made subject to all the conditions, terms,
and dispositions of this contract; provided, the PARTIES
OF THE FIRST PART (meaning Angela and Antonio)
shall be bound by this contract as long as the PARTY OF
THE SECOND PART, namely, the GREGORIO
ARANETA, INC. is controlled by the members of the
Araneta family, who are stockholders of the said
corporation at the time of the signing of this contract
and/or their lawful heirs;
On September 16, 1944, Angela I. Tuason revoked the powers
conferred on her attorney-in-fact and lawyer, J. Antonio Araneta.
Then in a letter dated October 19, 1946, Angela notified Araneta,
Inc. that because of alleged breach of the terms of the
"Memorandum of Agreement" (Exh. 6) and abuse of powers
granted to it in the document, she had decided to rescind said
contract and she asked that the property held in common be
partitioned. Later, on November 20, 1946, Angela filed a complaint
in the Court of First Instance of Manila asking the court to order the
partition of the property in question and that she be given 1/3 of the
same including rents collected during the time that the same
including rents collected during the time that Araneta Inc.,
administered said property.
The suit was administered principally against Araneta, Inc.
Plaintiff's brother, Antonio Tuason Jr., one of the co-owners
evidently did not agree to the suit and its purpose, for he evidently
did not agree to the suit and its purpose, for he joined Araneta, Inc.
as a co-defendant. After hearing and after considering the
extensive evidence introduce, oral and documentary, the trial court
presided over by Judge Emilio Pea in a long and considered
decision dismissed the complaint without pronouncement as to
costs. The plaintiff appealed from that decision, and because the
property is valued at more than P50,000, the appeal came directly
to this Court.
Some of the reasons advanced by appellant to have the
memorandum contract (Exh. 6) declared null and void or rescinded
are that she had been tricked into signing it; that she was given to
understand by Antonio Araneta acting as her attorney-in-fact and
legal adviser that said contract would be similar to another contract
of subdivision of a parcel into lots and the sale thereof entered into
by Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L",
but it turned out that the two contracts widely differed from each
other, the terms of contract Exh. "L" being relatively much more
favorable to the owners therein the less favorable to Araneta Inc.;
that Atty. Antonio Araneta was more or less disqualified to act as
her legal adviser as he did because he was one of the officials of
Araneta Inc., and finally, that the defendant company has violated
the terms of the contract (Exh. 6) by not previously showing her the
plans of the subdivision, the schedule of prices and conditions of
the sale, in not introducing the necessary improvements into the
land and in not delivering to her her share of the proceeds of the
rents and sales.
We have examined Exh. "L" and compared the same with the
contract (Exh. 6) and we agree with the trial court that in the main
the terms of both contracts are similar and practically the same.
Moreover, as correctly found by the trial court, the copies of both
contracts were shown to the plaintiff Angela and her husband, a
broker, and both had every opportunity to go over and compare
them and decide on the advisability of or disadvantage in entering
into the contract (Exh. 6); that although Atty. Antonio Araneta was
an official of the Araneta Inc.; being a member of the Board of
Directors of the Company at the time that Exhibit "6" was executed,
he was not the party with which Angela contracted, and that he
committed no breach of trust. According to the evidence Araneta,
the pertinent papers, and sent to her checks covering her receive
the same; and that as a matter of fact, at the time of the trial,
Araneta Inc., had spent about P117,000 in improvement and had
received as proceeds on the sale of the lots the respectable sum of
P1,265,538.48. We quote with approval that portion of the decision
appealed from on these points:
The evidence in this case points to the fact that the
actuations of J. Antonio Araneta in connection with the
execution of exhibit 6 by the parties, are above board. He
committed nothing that is violative of the fiduciary
relationship existing between him and the plaintiff. The
act of J. Antonio Araneta in giving the plaintiff a copy of
exhibit 6 before the same was executed, constitutes a full
disclosure of the facts, for said copy contains all that
appears now in exhibit 6.
Plaintiff charges the defendant Gregorio Araneta, Inc.
with infringing the terms of the contract in that the
defendant corporation has failed (1) to make the
necessary improvements on the property as required by
paragraphs 1 and 3 of the contract; (2) to submit to the
plaintiff from time to time schedule of prices and
conditions under which the subdivided lots are to be sold;
and to furnish the plaintiff a copy of the subdivision plans,
a copy of the monthly gross collections from the sale of
the property.
The Court finds from the evidence that he defendant
Gregorio Araneta, Incorporated has substantially
complied with obligation imposed by the contract exhibit
6 in its paragraph 1, and that for improvements alone, it
has disbursed the amount of P117,167.09. It has likewise
paid taxes, commissions and other expenses incidental
to its obligations as denied in the agreement.
With respect to the charged that Gregorio Araneta,
Incorporated has failed to submit to plaintiff a copy of the
subdivision plains, list of prices and the conditions
governing the sale of subdivided lots, and monthly
statement of collections form the sale of the lots, the
Court is of the opinion that it has no basis. The evidence
shows that the defendant corporation submitted to the
plaintiff periodically all the data relative to prices and
conditions of the sale of the subdivided lots, together with
the amount corresponding to her. But without any
justifiable reason, she refused to accept them. With the
indifferent attitude adopted by the plaintiff, it was thought
useless for Gregorio Araneta, Incorporated to continue
sending her statement of accounts, checks and other
things. She had shown on various occasions that she did
not want to have any further dealings with the said
corporation. So, if the defendant corporation proceeded
with the sale of the subdivided lots without the approval
of the plaintiff, it was because it was under the correct
impression that under the contract exhibit 6 the decision
of the majority co-owners is binding upon all the three.
The Court feels that recission of the contract exhibit 6 is
not minor violations of the terms of the agreement, the
general rule is that "recission will not be permitted for a
slight or casual breach of the contract, but only for such
breaches as are so substantial and fundamental as to
defeat the object of the parties in making the agreement"
(Song Fo & Co. vs. Hawaiian-Philippine Co., 47 Phil.
821).
As regards improvements, the evidence shows that during the
Japanese occupation from 1942 and up to 1946, the Araneta Inc.
although willing to fill the land, was unable to obtain the equipment
and gasoline necessary for filling the low places within the parcel.
As to sales, the evidence shows that Araneta Inc. purposely
stopped selling the lots during the Japanese occupantion, knowing
that the purchase price would be paid in Japanese military notes;
and Atty. Araneta claims that for this, plaintiff should be thankfull
because otherwise she would have received these notes as her
share of the receipts, which currency later became valueles.
But the main contention of the appellant is that the contract (Exh.
6) should be declared null and void because its terms, particularly
paragraphs 9, 11 and 15 which we have reproduced, violate the
provisions of Art. 400 of the Civil Code, which for the purposes of
reference we quote below:
ART. 400. No co-owner shall be obliged to remain a party
to the community. Each may, at any time, demand the
partition of the thing held in common.
Nevertheless, an agreement to keep the thing undivided
for a specified length of time, not exceeding ten years,
shall be valid. This period may be a new agreement.
We agree with the trial court that the provisions of Art. 400 of the
Civil Code are not applicable. The contract (Exh., 6) far from
violating the legal provision that forbids a co-owner being obliged to
remain a party to the community, precisely has for its purpose and
object the dissolution of the co-ownership and of the community by
selling the parcel held in common and dividing the proceeds of the
sale among the co-owners. The obligation imposed in the contract
to preserve the co-ownership until all the lots shall have been sold,
is a mere incident to the main object of dissolving the co-owners.
By virtue of the document Exh. 6, the parties thereto practically and
substantially entered into a contract of partnership as the best and
most expedient means of eventually dissolving the co-ownership,
the life of said partnership to end when the object of its creation
shall have been attained.
This aspect of the contract is very similar to and was perhaps
based on the other agreement or contract (Exh. "L") referred to by
appellant where the parties thereto in express terms entered into
partnership, although this object is not expressed in so many words
in Exh. 6. We repeat that we see no violation of Art. 400 of the Civil
Code in the parties entering into the contract (Exh. 6) for the very
reason that Art. 400 is not applicable.
Looking at the case from a practical standpoint as did the trial
court, we find no valid ground for the partition insisted upon the
appellant. We find from the evidence as was done by the trial court
that of the 64,928.6 sq. m. which is the total area of the parcel held
in common, only 1,600 sq. m. or 2.5 per cent of the entire area
remained unsold at the time of the trial in the year 1947, while the
great bulk of 97.5 per cent had already been sold. As well observed
by the court below, the partnership is in the process of being
dissolved and is about to be dissolved, and even assuming that Art.
400 of the Civil Code were applicable, under which the parties by
agreement may agree to keep the thing undivided for a period not
exceeding 10 years, there should be no fear that the remaining
1,600 sq. m. could not be disposed of within the four years left of
the ten-years period fixed by Art. 400.
We deem it unnecessary to discuss and pass upon the other points
raised in the appeal and which counsel for appellant has
extensively and ably discussed, citing numerous authorities. As we
have already said, we have viewed the case from a practical
standpoint, brushing aside technicalities and disregarding any
minor violations of the contract, and in deciding the case as we do,
we are fully convinced that the trial court and this Tribunal are
carrying out in a practical and expeditious way the intentions and
the agreement of the parties contained in the contract (Exh. 6),
namely, to dissolve the community and co-ownership, in a manner
most profitable to the said parties.
In view of the foregoing, the decision appealed from is hereby
affirmed. There is no pronouncement as to costs.
So ordered.