Els Ethics

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ELS: LEGAL ETHICS BY: HANNA DESEMBRA

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NATURE AND CREATION OF ATTORNEY-CLIENT RELATIONSHIP

1. Regala vs Sandiganbayan, GR NO. 108939 September 20, 1996

!O"ORO R. R!G#$#, !"G#R"O %. #NG#R#, #&!$'NO &. (R)*, %OS! (. (ON(!+('ON,

ROG!$'O #. &'N$)#N, &'(OR +. $#*#'N and !")#R"O ). !S()!#, petitioners,

vs.

! ONOR#-$! S#N"'G#N-##N, /irst "ivisin, R!+)-$'( O/ ! +'$'++'N!S, #('NG

RO)G ! +R!S'"!N'#$ (O'SS'ON ON GOO" GO&!RN!N, and R#)$ S. RO(O,

respondents.

G.R. N. 108113 September 20, 1996

+#R#%# G. #)"'N', petitioner,

vs.

! S#N"'G#N-##N and ! R!+)-$'( O/ ! +'$'++'N!S, respondents.

#+)N#N, J.:

These case touch the very cornerstone of every State's judicial system, upon which the workings of th

contentious and adversarial system in the Philippine legal process are based the sanctity of fiducia

duty in the clientlawyer relationship. The fiduciary duty of a counsel and advocate is also what makes

law profession a uni!ue position of trust and confidence, which distinguishes it from any other calling.

this instance, we have no recourse but to uphold and strengthen the mantle of protection accorded to

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 #omplaint on $uly %&, &() before th

Sandiganbayan by the *epublic of the Philippines, through the Presidential #ommission on +ood

+overnment against duardo -. #ojuangco, $r., as one of the principal defendants, for the recovery o

alleged illgotten wealth, which includes shares of stocks in the named corporations in P#++ #ase o

%% /#ivil #ase o. 00%%1, entitled 2*epublic of the Philippines versus duardo #ojuangco, et al.2 1

3mong the dependants named in the case are herein petitioners Teodoro *egala, dgardo $. 3ngara,

3velino 4. #ru5, $ose #. #oncepcion, *ogelio 3. 4inluan, 4ictor P. 6a5atin, duardo 7. scueta and

Paraja +. 8ayudini, and herein private respondent *aul S. *oco, who all were then partners of the law

firm 3ngara, 3bello, #oncepcion, *egala and #ru5 6aw 9ffices /hereinafter referred to as the 3##*3

:irm1. 3##*3 6aw :irm performed legal services for its clients, which included, among others, the

organi5ation and ac!uisition of business associations and;or organi5ations, with the correlative and

incidental services where its members acted as incorporators, or simply, as stockholders. -ore


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specifically, in the performance of these services, the members of the law firm delivered to its client

documents which substantiate the client's e!uity 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 cover

said shares. "n the course of their dealings with their clients, the members of the law firm ac!uire

information relative to the assets of clients as well as their personal and business circumstances. 3s

members of the 3##*3 6aw :irm, petitioners and private respondent *aul *oco admit that they assis

in the organi5ation and ac!uisition of the companies included in #ivil #ase o. 00%%, and in keeping w

the office practice, 3##*3 lawyers acted as nomineesstockholders of the said corporations involved

se!uestration proceedings.2

9n 3ugust

&?. @efendants duardo #ojuangco, $r., dgardo $. 3ngara, $ose #. #oncepcion, Teodo

*egala, 3velino 4. #ru5, *ogelio 3. 4inluan, duardo 7. scueta, Paraja +. 8ayudini an

*aul *oco of the 3ngara #oncepcion #ru5 *egala and 3bello law offices /3##*31 plott

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

to the establishment of 7#PA, 7"#9-, #9#96":, #9#9-3*B, #"#, and more thantwenty other coconut levy funded corporations, including the ac!uisition of San -iguel

#orporation shares and its institutionali5ation through presidential directives of the cocon

monopoly. Through insidious means and machinations, 3##*3, being the whollyowned

investment arm, 3##*3 "nvestments #orporation, became the holder of appro=imately

fifteen million shares representing roughly %.%C of the total outstanding capital stock of

7#PA as of %& -arch &(). This ranks 3##*3 "nvestments #orporation number ?? am

the top &00 biggest stockholders of 7#PA which has appro=imately &,?00,000 sharehold

9n the other hand, corporate books show the name dgardo $. 3ngara as holding

appro=imately 3,744 shares as of :ebruary, &(?.4

"n their answer to the =panded 3mended #omplaint, petitioners 3##*3 lawyers alleged that>

?.? @efendants3##*3 lawyers' participation in the acts with which their codefendants a

charged, was in furtherance of legitimate lawyering.

?.?.& "n the course of rendering professional and legal services to clients,

defendants3##*3 lawyers, $ose #. #oncepcion, Teodoro @. *egala, *og

3. 4inluan and duardo 7. scueta, became holders of shares of stock in


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corporations listed under their respective names in 3nne= 232 of the e=pan

3mended #omplaint as incorporating or ac!uiring stockholders only and, a

such, they do not claim any proprietary interest in the said shares of stock.

?.D @efendant 3##*3lawyer 3velino 4. #ru5 was one of the incorporators in &)E of

-ermaid -arketing #orporation, which was organi5ed for legitimate business purposes related to the allegations of the e=panded 3mended #omplaint. 8owever, he has long ag

transferred any material interest therein and therefore denies that the 2shares2 appearing

his name in 3nne= 232 of the e=panded 3mended #omplaint are his assets. 6

Petitioner Paraja 8ayudini, who had separated from 3##*3 law firm, filed a separate answer denying

allegations in the complaint implicating him in the alleged illgotten wealth. 5

Petitioners 3##*3 lawyers subse!uently filed their 2#9--T 3@;9* 9PP9S"T"92 dated 9ctob

(, && with #ounter-otion that respondent P#++ similarly grant the same treatment to them /e=clu

as partiesdefendants1 as accorded private respondent *oco. 8The #ounter-otion for dropping

petitioners from the complaint was duly set for hearing on 9ctober &(, && in accordance with the

re!uirements of *ule &D of the *ules of #ourt.

"n its 2#omment,2 respondent P#++ set the following conditions precedent for the e=clusion of

petitioners, namely> /a1 the disclosure of the identity of its clientsF /b1 submission of documents

substantiating the lawyerclient relationshipF and /c1 the submission of the deeds of assignments

petitioners e=ecuted in favor of its client covering their respective

shareholdings.9

#onse!uently, respondent P#++ presented supposed proof to substantiate compliance by private

respondent *oco of the conditions precedent to warrant the latter's e=clusion as partydefendant in P#

#ase o. %%, to wit> /a1 6etter to respondent P#++ of the counsel of respondent *oco dated -ay


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3##*3 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. Aut until they do

identify their clients, considerations of whether or not the privilege claimed by the 3##*3

lawyers e=ists cannot even begin to be debated. The 3##*3 lawyers cannot e=cuse

themselves from the conse!uences of their acts until they have begun to establish the ba

for recogni5ing the privilegeF the e=istence andidentity of the client.

This is what appears to be the cause for which they have been impleaded by the P#++

defendants herein.

D. The P#++ is satisfied that defendant *oco has demonstrated his agency and that *o

has apparently identified his principal, which revelation could show the lack of cause aga

him. This in turn has allowed the P#++ to e=ercise its power both under the rules of 3ge

and under Section D of .9. o. &?3 in relation to the Supreme #ourt's ruling in Republ

Sandiganbayan/&)% S#*3 )


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The 8onorable Sandiganbayan committed grave abuse of discretion in not considering

petitioners 3##*3 lawyers and -r. *oco as similarly situated and, therefore, deserving

e!ual treatment.

&. There is absolutely no evidence that -r. *oco had revealed, or had

undertaken to reveal, the identities of the client/s1 for whom he acted asnomineestockholder.


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client, giving him an advantage over them who are in the same footing as partners in the 3##*3 law

Petitioners further argue that even granting that such an undertaking has been assumed by private

respondent *oco, 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 lawyerclient relationship.

*espondent P#++, through its counsel, refutes petitioners' contention, alleging that the revelation of t

identity of the client is not within the ambit of the lawyerclient confidentiality privilege, nor are the

documents it re!uired /deeds of assignment1 protected, because they are evidence of nominee status

"n his comment, respondent *oco asseverates that respondent P#++ acted correctly in e=cluding him

partydefendant because he 2/Roco1 has not filed an Answer.PCGG had therefore the right to disiss

Civil Case !o.""33 as to Roco #without an order of court by filing a notice of disissal#,$ 1and he has

undertaken to identify his principal. 14

Petitioners' contentions are impressed with merit.

"

"t is !uite apparent that petitioners were impleaded by the P#++ as codefendants to force them to

disclose the identity of their clients. #learly, respondent P#++ is not after petitioners but the 2bigger fi

as they say in street parlance. This ploy is !uite clear from the P#++'s willingness to cut a deal with

petitioners the names of their clients in e=change for e=clusion from the complaint. The statement o

the Sandiganbayan in its !uestioned resolution dated -arch &(, &< is e=plicit>

3##*3 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. Aut until they do

identify their clients, considerations of whether or not the privilege claimed by the 3##*3

lawyers e=ists cannot even begin to be debated. %he ACCRA lawyers cannot e&cuse

theselves fro the conse'uences of their acts until they have begun to establish the ba

for recogni(ing the privilegeFthe e&istence and identity of the client.

%his is what appears to be the cause for which they have been ipleaded by the PCGG

defendants herein. /mphasis ours1

"n a closely related case, #ivil #ase o. 0&&0 of the Sandiganbayan, Third @ivision, entitled 2Primaver

:arms, "nc., et al. vs. Presidential #ommission on +ood +overnment2 respondent P#++, through

counsel -ario 9ngkiko, manifested at the hearing on @ecember D, && that the P#++ wanted to

establish through the 3##*3 that their 2so called client is -r. duardo #ojuangcoF2 that 2it was -r.

duardo #ojuangco who furnished all the monies to those subscription payments in corporations inclu

in 3nne= 232 of the Third 3mended #omplaintF that the 3##*3 lawyers e=ecuted deeds of trust and

deeds of assignment, some in the name of particular personsF some in blank.

Ge !uote 3tty. 9ngkiko>


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3TTH. 9+B"B9>

Gith the permission of this 8on. #ourt. " propose to establish through these 3##*3 law

that, one, their socalled client is -r. duardo #ojuangco. Second, it was -r. duardo

#ojuangco who furnished all the monies to these subscription payments of these

corporations who are now the petitioners in this case. Third, that these lawyers e=ecuteddeeds of trust, some in the name of a particular person, some in blank. ow, these blank

deeds are important to our claim that some of the shares are actually being held by the

nominees for the late President -arcos. :ourth, they also e=ecuted deeds of assignmen

and some of these assignments have also blank assignees. 3gain, this is important to ou

claim that some of the shares are for -r. #onjuangco and some are for -r. -arcos. :ifth

that most of thes e corporations are really just paper corporations. Ghy do we say thatI

9ne> There are no really fi=ed sets of officers, no fi=ed sets of directors at the time of

incorporation and even up to &(E, which is the crucial year. 3nd not only that, they have

permits from the municipal authorities in -akati. e=t, actually all their addresses now acare of 4illareal 6aw 9ffice. They really have no address on records. These are some of

principal things that we would ask of these nominees stockholders, as they called

themselves. 16

"t 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

their duties as lawyers. Juite obviously, petitioners' inclusion as codefendants in the complaint is mer

being used as leverage to compel them to name their clients and conse!uently to enable the P#++ to

nail these clients. Such being the case, respondent P#++ has no valid cause of action as against

petitioners and should e=clude them from the Third 3mended #omplaint.

""

The nature of lawyerclient relationship is premised on the *oman 6aw concepts of locatio conductio

operaru/contract of lease of services1 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 m

be compensated by honorariuor for hire, 15and andato/contract of agency1 wherein a friend on w

reliance could be placed makes a contract in his name, but gives up all that he gained by the contract

the person who re!uested him. 18Aut the lawyerclient relationship is more than that of the principalag

and lessorlessee.

"n modern day perception of the lawyerclient 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. 1

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-oreover, an attorney also occupies what may be considered

a 2!uasijudicial office2 since he is in fact an officer of the #ourt 21and e=ercises his judgment in the

choice of courses of action to be taken favorable to his client.


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Thus, in the creation of lawyerclient relationship, there are rules, ethical conduct and duties that breat

life into it, among those, the fiduciary duty to his client which is of a very delicate, e=acting and

confidential character, re!uiring a very high degree of fidelity and good faith, 22that is re!uired by reas

of necessity and public interest 23based on the hypothesis that abstinence from seeking legal advice i

good cause is an evil which is fatal to the administration of justice. 2

"t is also the strict sense of fidelity of a lawyer to his client that distinguishes him from an

other professional in society. This conception is entrenched and embodies centuries of

established and stable tradition. 24"n Stoc)ton v.*ord,26the 7. S. Supreme #ourt held>

There are few of the business relations of life involving a higher trust and confidence tha

that of attorney and client, or generally speaking, one more honorably and faithfully

dischargedF few more an=iously guarded by the law, or governed by the sterner principle

morality and justiceF 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 b

used to the detriment or prejudice of the rights of the party bestowing it. 25

"n our jurisdiction, this privilege takes off from the old #ode of #ivil Procedure enacted by the Philippin

#ommission on 3ugust ), &0&. Section %(% of the #ode specifically 2forbids counsel, without authorit

his client to reveal any communication made by the client to him or his advice given thereon in the cou

of professional employment.2 28Passed on into various provisions of the *ules of #ourt, the attorney

client privilege, as currently worded provides>

Sec.


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#anon &). 3 lawyer owes fidelity to the cause of his client and he shall be mindful of the

trust and confidence reposed in him.

#anon &D of the #anons of Professional thics also demands a lawyer's fidelity to client>

The lawyers owes 2entire devotion to the interest of the client, warm 5eal in the maintenaand defense of his rights and the e=ertion of his utmost learning and ability,2 to the end t

nothing be taken or be withheld from him, save by the rules of law, legally applied. o fe

judicial disfavor or public popularity should restrain him from the full discharge of his duty

the judicial forum the client is entitled to the benefit of any and every remedy and defens

that is authori5ed by the law of the land, and he may e=pect his lawyer to assert every su

remedy or defense. Aut it is steadfastly to be borne in mind that the great trust of the law

is to be performed within and not without the bounds of the law. The office of attorney do

not permit, much less does it demand of him for any client, violation of law or any manne

fraud or chicanery. 8e must obey his own conscience and not that of his client.

#onsiderations favoring confidentially in lawyerclient relationships are many and serve several

constitutional and policy concerns. "n the constitutional sphere, the privilege gives flesh to one of the m

sacrosanct rights available to the accused, the right to counsel. "f a client were made to choose betwe

legal representation without effective communication and disclosure and legal representation with all h

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. "f the price of disclosure is too high, or if it amounts to se

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 presum

innocent is at once selfevident.

ncouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spect

of legal options which would otherwise be circumscribed by limited information engendered by a fear o

disclosure. 3n effective lawyerclient relationship is largely dependent upon the degree of confidence

which e=ists between lawyer and client which in turn re!uires a situation which encourages a dynamic

and fruitful e=change and flow of information. "t 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 a

professional responsibility.

The !uestion now arises whether or not this duty may be asserted in refusing to disclose the name ofpetitioners' client/s1 in the case at bar. 7nder the facts and circumstances obtaining in the instant case

the answer must be in the affirmative.

3s a matter of public policy, a client's identity should not be shrouded in mystery 307nder this premise

general rule in our jurisdiction as well as in the 7nited States is that a lawyer may not invoke the privile

and refuse to divulge the name or identity of this client. 31

The reasons advanced for the general rule are well established.


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:irst, the court has a right to know that the client whose privileged information is sought to be protecte

flesh and blood.

Second, the privilege begins to e=ist only after the attorneyclient relationship has been established. T

attorneyclient privilege does not attach until there is a client.

Third, the privilege generally pertains to the sub+ect atterof the relationship.

:inally, due process considerations re!uire that the opposing party should, as a general rule, know his

adversary. 23 party suing or sued is entitled to know who his opponent is.2 328e cannot be obliged to

grope in the dark against unknown forces. 33

otwithstanding these considerations, the general rule is however !ualified by some important

e=ceptions.

&1 #lient identity is privileged where a strong probability e=ists that revealing the client's name wouldimplicate that client in the very activity for which he sought the lawyer's advice.

"n &-Parte n(or, 3a state supreme court reversed a lower court order re!uiring a lawyer to divulge t

name of her client on the ground that the subject matter of the relationship was so closely related to th

issue of the client's identity that the privilege actually attached to both. "n n(or,the unidentified client

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. "n 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 c

had been, in fact, bribed. The lawyer was cited for contempt for her refusal to reveal his client's identity

before a grand jury. *eversing the lower court's contempt orders, the state supreme court held that un

the circumstances of the case, and under the e=ceptions described above, even the name of the clien

was privileged.

. .S.v./odge and 0weig,34involved the same e=ception, i.e. that client identity is privileged in those

instances where a strong probability e=ists that the disclosure of the client's identity would implicate th

client in the very criminal activity for which the lawyer's legal advice was obtained.

The /odgecase involved federal grand jury proceedings in!uiring into the activities of the 2Sandino

+ang,2 a gang involved in the illegal importation of drugs in the 7nited States. The respondents, law

partners, represented key witnesses and suspects including the leader of the gang, $oe Sandino.

"n connection with a ta= investigation in ovember of &)%, the "*S issued summons to 8odge and

Kweig, re!uiring them to produce documents and information regarding payment received by Sandino

behalf of any other person, and vice versa. The lawyers refused to divulge the names. The inth #ircu

the 7nited States #ourt of 3ppeals, upholding nondisclosure under the facts and circumstances of the

case, held>


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3 client's identity and the nature of that client's fee arrangements may be privileged whe

the person invoking the privilege can show that a strong probability e=ists that disclosure

such information would implicate that client in the very criminal activity for which legal ad

was sought 1aird v. 2oerner,


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"t appears . . . that the name and address of the owner of the second cab came to the

attorney in this case as a confidential communication. 8is client is not seeking to use the

courts, and his address cannot be disclosed on that theory, nor is the present action pen

against him as service of the summons on him has not been effected. The objections on

which the court reserved decision are sustained. 39

"n the case of atter of Shawut ining Copany,0the lawyer involved was re!uired by a lower cou

disclose whether he represented certain clients in a certain transaction. The purpose of the court's

re!uest 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 !uestion to the State

Supreme #ourt. 7pholding the lawyer's refusal to divulge the names of his clients the court held>

"f 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 progres

establishing by such evidence their version of the litigation. 3s 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 su

employment as such attorney, he knew that they were interested in certain transactions.

feel sure that under such conditions no case has ever gone to the length of compelling a

attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the natu

of the transactions to which it related, when such information could be made the basis of

suit against his client. 1

%1 Ghere the government's lawyers have no case against an attorney's client unless, by revealing the

client's name, the said name would furnish the only link that would form the chain of testimony necessto convict an individual of a crime, the client's name is privileged.

"n 1aird vs.2orner,2a lawyer was consulted by the accountants and the lawyer of certain undisclose

ta=payers regarding steps to be taken to place the undisclosed ta=payers in a favorable position in cas

criminal charges were brought against them by the 7.S. "nternal *evenue Service /"*S1.

"t appeared that the ta=payers' returns of previous years were probably incorrect and the ta=es

understated. The clients themselves were unsure about whether or not they violated ta= laws and sou

advice from Aaird on the hypothetical possibility that they had. o investigation was then being

undertaken by the "*S of the ta=payers. Subse!uently, the attorney of the ta=payers delivered to Aairdsum of L&


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sums of money to the government voluntarily in settlement of undetermined income ta=es, unsued on,

and with no government audit or investigation into that client's income ta= liability pending. The court

emphasi5ed the e=ception that a client's name is privileged when so much has been revealed concern

the legal services rendered that the disclosure of the client's identity e=poses him to possible investiga

and sanction by government agencies. The #ourt held>

The facts of the instant case bring it s!uarely within that e=ception to the general rule. 8e

money was received by the government, paid by persons who thereby admitted they had

not paid a sufficient amount in income ta=es some one or more years in the past. The

names of the clients are useful to the government for but one purpose to ascertain wh

ta=payers think they were delin!uent, so that it may check the records for that one year o

several years. The voluntary nature of the payment indicates a belief by the ta=payers th

more ta=es or interest or penalties are due than the sum previously paid, if any. "t indicat

feeling of guilt for nonpayment of ta=es, though whether it is criminal guilt is undisclosed

it may well be the link that could form the chain of testimony necessary to convict anindividual of a federal crime. #ertainly the payment and the feeling of guilt are the reason

the attorney here involved was employed to advise his clients what, under the

circumstances, should be done. 3

3part from these principal e=ceptions, there e=ist other situations which could !ualify as e=ceptions to

general rule.

:or e=ample, the content of any client communication to a lawyer lies within the privilege if it is relevan

the subject matter of the legal problem on which the client seeks legal assistance. -oreover, where

natureof the attorneyclient relationship has been previously disclosed and it is the identity which isintended to be confidential, the identity of the client has been held to be privileged, since such revelati

would otherwise result in disclosure of the entire transaction. 4

Summari5ing these e=ceptions, information relating to the identity of a client may fall within the ambit o

the privilege when the client's name itself has an independent significance, such that disclosure would

then reveal client confidences. 6

The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly revea

that the instant case falls under at least two e=ceptions to the general rule. :irst, disclosure of the alleg

client's name would lead to establish said client's connection with the very fact in issue of the case, whis privileged information, because the privilege, as stated earlier, protects the subject matter or the

substance /without which there would be not attorneyclient relationship1.

The link between the alleged criminal offense and the legal advice or legal service sought was duly

establishes in the case at bar, by no less than the P#++ itself. The key lies in the three specific

conditions laid down by the P#++ which constitutes petitioners' ticket to nonprosecution should they

accede thereto>

/a1 the disclosure of the identity of its clientsF


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/b1 submission of documents substantiating the lawyerclient relationshipF and

/c1 the submission of the deeds of assignment petitioners e=ecuted in favor of their clien

covering their respective shareholdings.

:rom these conditions, particularly the third, we can readily deduce that the clients indeed consulted thpetitioners, in their capacity as lawyers, regarding the financial and corporate structure, framework and

setup of the corporations in !uestion. "n turn, petitioners gave their professional advice in the form of,

among others, the aforementioned deeds of assignment covering their client's shareholdings.

There is no !uestion that the preparation of the aforestated documents was part and parcel of petition

legal service to their clients. -ore 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 ve

activity for which legal advice had been sought, i.e., the alleged accumulation of illgotten wealth in the

aforementioned corporations.

:urthermore, under the third main e=ception, revelation of the client's name would obviously provide th

necessary link for the prosecution to build its case, where none otherwise e=ists. "t is the link, in the wo

of Aaird, 2that would inevitably form the chain of testimony necessary to convict the /client1 of a . . .

crime.2 5

3n important distinction must be made between a case where a client takes on the services of an atto

for illicit purposes, seeking advice about how to go around the law for the purpose of committing illega

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 e=ception because whether or

the act for which the client sought advice turns out to be illegal, his name cannot be used or disclosed

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 shie

for an illegal act, as in the first e=ampleF while the prosecution may not have a case against the client

the second e=ample and cannot use the attorney client relationship to build up a case against the latte

The reason for the first rule is that it is not within the professional character of a lawyer to give advice o

the commission of a crime.8

The reason for the second has been stated in the cases above discusseand are founded on the same policy grounds for which the attorneyclient privilege, in general, e=ists.

"n atter of Shawut ining Co., supra, the appellate court therein stated that 2under such conditions

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 informat

could be made the basis of a suit against his client.2 92#ommunications 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 conse!uence of the relation in which the parties stand to each other, are under the seal o

confidence and entitled to protection as privileged communications.2 40Ghere the communicated


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information, which clearly falls within the privilege, would suggest possible criminal activity but there w

be not much in the information known to the prosecution which would sustain a charge e=cept that

revealing the name of the client would open up other privileged information which would substantiate t

prosecution's suspicions, then the client's identity is so ine=tricably linked to the subject matter itself th

falls within the protection. The Aaird e=ception, 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 le

advisors by clients, apprehension of compelled disclosure from attorneys must be eliminated. This

e=ception has likewise been sustained in n re Grand 5ury Proceedings41and %illotson v.1oughner.42

Ghat these cases unanimously seek to avoid is the e=ploitation of the general rule in what may amoun

a fishing e=pedition by the prosecution.

There are, after all, alternative source of information available to the prosecutor which do not depend o

utili5ing a defendant's counsel as a convenient and readily available source of information in the buildi

of a case against the latter. #ompelling disclosure of the client's name in circumstances such as the o

which e=ists in the case at bench amounts to sanctioning fishing e=peditions by la5y prosecutors andlitigants which we cannot and will not countenance. Ghen the nature of the transaction would be revea

by disclosure of an attorney's retainer, such retainer is obviously protected by the privilege. 43"t follows

that petitioner attorneys in the instant case owe their client/s1 a duty and an obligation not to disclose t

latter's identity which in turn re!uires them to invoke the privilege.

"n fine, the cru= of petitioners' objections ultimately hinges on their e=pectation that if the prosecution h

a case against their clients, the latter's case should be built upon evidence painstakingly gathered by

themfro their own sources and not from compelled testimony re!uiring them to reveal the name of t

clients, information which unavoidably reveals much about the nature of the transaction which may or

not be illegal. The logical ne=us between name and nature of transaction is so intimate in this case thewould be difficult to simply dissociate one from the other. "n this sense, the name is as much

2communication2 as information revealed directly about the transaction in !uestion itself, a communica

which is clearly and distinctly privileged. 3 lawyer cannot reveal such communication without e=posing

himself to charges of violating a principle which forms the bulwark of the entire attorneyclient relations

The uberriei fideirelationship 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 5ealously sustained. "n ilban), %weed, /adley and cCloy v.1oon,4the

Second @istrict #ourt rejected the plea of the petitioner law firm that it breached its fiduciary duty to itsclient 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 #ourt instead ruled

that breaches of a fiduciary relationship in any conte=t comprise a special breed of cases that often

loosen normally stringent re!uirements of causation and damages, and found in favor of the client.

To the same effect is the ruling in Searcy, 6enney, Scarola, 1arnhart, and Shipley P.A.v.Scheller44

re!uiring strict obligation of lawyers vis-a-visclients. "n this case, a contingent fee lawyer was fired sho

before the end of completion of his work, and sought payment 'uantu eruitof work done. The cou


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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. Ghile the client found a new

lawyer during the interregnu, events forced the client to settle for less than what was originally offere

*eiterating the principle of fiduciary duty of lawyers to clients in einhard v.Salon46famously attribu

to $ustice Aenjamin #ardo5o that 2ot honesty alone, but thepunctilioof an honor the most sensitive,

then the standard of behavior,2 the 7S #ourt found that the lawyer involved was fired for cause, thus

deserved no attorney's fees at all.

The utmost 5eal given by #ourts to the protection of the lawyerclient confidentiality privilege and lawy

loyalty to his client is evident in the duration of the protection, which e=ists not only during the relations

but e=tends even after the termination of the relationship. 45

Such are the unrelenting duties re!uired by lawyers vis-a-vistheir clients because the law, which the

lawyers are sworn to uphold, in the words of 9liver Gendell 8olmes, 482. . . is an e=acting goddess,

demanding of her votaries in intellectual and moral discipline.2 The #ourt, no less, is not prepared to

accept respondents' position without denigrating the noble profession that is lawyering, so e=tolled by

$ustice 8olmes in this wise>

very calling is great when greatly pursued. Aut what other gives such scope to reali5e t

spontaneous energy of one's soulI "n what other does one plunge so deep in the stream

life so share its passions its battles, its despair, its triumphs, both as witness and

actorI . . . Aut that is not all. Ghat a subject is this in which we are united this abstrac

called the 6aw, wherein as in a magic mirror, we see reflected, not only in our lives, but t

lives of all men that have been. Ghen " think on this majestic theme my eyes da55le. "f w

are to speak of the law as our mistress, we who are here know that she is a mistress onlbe won with sustained and lonely passion only to be won by straining all the faculties

which man is likened to +od.

Ge have no choice but to uphold petitioners' right not to reveal the identity of their clients under pain o

the breach of fiduciary duty owing to their clients, because the facts of the instant case clearly fall with

recogni5ed e=ceptions to the rule that the client's name is not privileged information.

"f we were to sustain respondent P#++ that the lawyerclient confidential privilege under the

circumstances obtaining here does not cover the identity of the client, then it would e=pose the lawyer

themselves to possible litigation by their clients in view of the strict fiduciary responsibility imposed onthem in the e=ercise of their duties.

The complaint in #ivil #ase o. 00%% alleged that the defendants therein, including herein

petitioners and duardo #ojuangco, $r. conspired with each other in setting up through the use

coconut levy funds the financial and corporate framework and structures that led to the

establishment of 7#PA, 7"#9- and others and that through insidious means and machinatio

3##*3, using its whollyowned investment arm, 3##*3 "nvestment #orporation, became the

holder of appro=imately fifteen million shares representing roughly %.%C of the total capital stoc


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7#PA as of %& -arch &(). The P#++ wanted to establish through the 3##*3 lawyers that -

#ojuangco is their client and it was #ojuangco who furnished all the monies to the subscription

paymentF hence, petitioners acted as dummies, nominees and;or agents by allowing themselve

among others, to be used as instrument in accumulating illgotten 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 #onstitution and laws of the *epublic o

the Philippines.

Ay compelling petitioners, not only to reveal the identity of their clients, but worse, to submit to t

P#++ documents substantiating the clientlawyer relationship, as well as deeds of assignment

petitioners e=ecuted in favor of its clients covering their respective shareholdings, the P#++ wo

e=act from petitioners a link 2that would inevitably form the chain of testimony necessary to con

the /client1 of a crime.2

"""

"n response to petitioners' last assignment of error, respondents alleged that the private respon

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 2as the

interest of truth may re!uire, which includes . . . the identity of the principal.2 49

:irst, as to the bare statement that private respondent merely acted as a lawyer and nominee, a

statement made in his outofcourt settlement with the P#++, it is sufficient to state that petitio

have likewise made the same claim not merely outofcourt but also in the 3nswer to plaintiff's

=panded 3mended #omplaint, signed by counsel, claiming that their acts were made infurtherance of 2legitimate lawyering.260Aeing 2similarly situated2 in this regard, public responde

must show that there e=ist other conditions and circumstances which would warrant their treatin

the private respondent differently from petitioners in the case at bench in order to evade a viola

of the e!ual protection clause of the #onstitution.

To this end, public respondents contend that the primary consideration behind their decision to

sustain the P#++'s dropping of private respondent as a defendant was his promise to disclose

identities of the clients in !uestion. 8owever, respondents failed to show and absolute nothin

e=ists in the records of the case at bar that private respondent actually revealed the identity

his client/s1 to the P#++. Since the undertaking happens to be the leitmotif of the entirearrangement between -r. *oco and the P#++, an undertaking which is so material as to have

justified P#++'s special treatment e=empting the private respondent from prosecution, respond

Sandiganbayan should have re!uired proof of the undertaking more substantial than a 2bare

assertion2 that private respondent did indeed comply with the undertaking. "nstead, as manifest

by the P#++, only three documents were submitted for the purpose, two of which were mere

re!uests for reinvestigation and one simply disclosed certain clients which petitioners /3##*3

lawyers1 were themselves willing to reveal. These were clients to whom both petitioners and


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private respondent rendered legal services while all of them were partners at 3##*3, and were

not the clients which the P#++ wanted disclosed for the alleged !uestioned 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 P#++ should conclusively show that -r. *oco wa

treated as species apart from the rest of the 3##*3 lawyers on the basis of a classification whmade substantial distinctions based on real differences. o such substantial distinctions e=ist fr

the records of the case at bench, in violation of the e!ual protection clause.

The e!ual protection clause is a guarantee which provides a wall of protection against uneven

application of status and regulations. "n the broader sense, the guarantee operates against une

applicationof legal norms so

that all persons under similar circumstances would be accorded the same treatment. 62Those w

fall within a particular class ought to be treated alike not only as to privileges granted but also a

the liabilities imposed.

. . . Ghat is re!uired 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. 3s was noted in a

recent decision> 2:avoritism and undue preference cannot be allowed. :or the principle i

that e!ual protection and security shall be given to every person under circumstances,

which if not identical are analogous. "f 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 e!ually binding the rest. 63

Ge find that the condition precedent re!uired by the respondent P#++ of the petitioners for the

e=clusion as partiesdefendants in P#++ #ase o. %% violates the lawyerclient confidentiality

privilege. The condition also constitutes a transgression by respondents Sandiganbayan and

P#++ of the e!ual protection clause of the #onstitution. 6"t is grossly unfair to e=empt one

similarly situated litigant from prosecution without allowing the same e=emption to the others.

-oreover, the P#++'s demand not only touches upon the !uestion of the identity of their client

but also on documents related to the suspected transactions, not only in violation of the attorne

client privilege but also of the constitutional right against selfincrimination. Ghichever way one

looks at it, this is a fishing e=pedition, a free ride at the e=pense of such rights.

3n argument is advanced that the invocation by petitioners of the privilege of attorneyclient

confidentiality at this stage of the proceedings is premature and that they should wait until they

called to testify and e=amine as witnesses as to matters learned in confidence before they can

raise their objections. Aut petitioners are not mere witnesses. They are coprincipals in the case

recovery of alleged illgotten wealth. They have made their position clear from the very beginnin

that they are not willing to testify and they cannot be compelled to testify in view of their

constitutional right against selfincrimination and of their fundamental legal right to maintain

inviolate the privilege of attorneyclient confidentiality.


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"t is clear then that the case against petitioners should never be allowed to take its full course in

Sandiganbayan. Petitioners should not be made to suffer the effects of further litigation when it

obvious that their inclusion in the complaint arose from a privileged attorneyclient relationship a

as a means of coercing them to disclose the identities of their clients. To allow the case to conti

with respect to them when this #ourt 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 hang

as a real and palpable threat, a proverbial Sword of @amocles over petitioners' heads. "t should

be allowed to continue a day longer.

Ghile we are aware of respondent P#++'s legal mandate to recover illgotten wealth, we will n

sanction acts which violate the e!ual protection guarantee and the right against selfincriminatio

and subvert the lawyerclient confidentiality privilege.

G8*:9*, " 4"G 9: T8 :9*+9"+, the *esolutions of respondent Sandiganbayan

/:irst @ivision1 promulgated on -arch &(, &< and -ay


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Two separate Petitions were filed before this #ourt &1 by the surviving partners of 3tty. 3le=ander Syci

who died on -ay D, &)D, and t89:;h'w


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E. The continued use of a deceased partner's name in the firm name of law partnerships has been

consistently allowed by 7.S. #ourts and is an accepted practice in the legal profession of most countri

in the world.8

The !uestion involved in these Petitions first came under consideration by this #ourt in &D% when a la

firm in #ebu /the @een case1 continued its practice of including in its firm name that of a deceasedpartner, #.@. $ohnston. The matter was resolved with this #ourt advising the firm to desist from includ

in their firm designation the name of #. @. $ohnston, who has long been dead.2

The same issue was raised before this #ourt in &D( as an incident in +. *. o. 6&&E?, entitled

*egister of @eeds of -anila vs. #hina Aanking #orporation. The law firm of Perkins M Ponce nrile

moved to intervene as aicus curiae9Aefore acting thereon, the #ourt, in a *esolution of 3pril &D, &D

stated that it 2would like to be informed why the name of Perkins is still being used although 3tty. . 3.

Perkins is already dead.2 "n a -anifestation dated -ay t89:;h'w t89:;h'w


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"t is clearly tacit in the above provision that names in a firm name of a partnership must either be those

living partners and. in the case of nonpartners, should be living persons who can be subjected to liabi

"n fact, 3rticle &(


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be, especially where there is no provision in the partnership agreement relating to good w

as an asset. ... /ibid,s

&. 3 duty of public service, of which the emolument is a byproduct, and in which one may

attain the highest eminence without making much money.


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"t is true that #anon %%does not consider as unethical the continued use of the name of a deceased o

former partner in the firm name of a law partnership when such a practice is perissible by local custo

but the #anon warns that care should be taken that no imposition or deception is practiced through thi

use.

"t must be conceded that in the Philippines, no local customperits or allowsthe continued use of adeceased or former partner's name in the firm names of law partnerships. :irm names, under our cust

"dentify the ore active and>or ore senior ebers or partners of the law fir9 3 glimpse at the histo

of the firms of petitioners and of other law firms in this country would show how their firm names have

evolved and changed from time to time as the composition of the partnership changed. t89:;h'w


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=== === ===

either the Partnership 6aw nor the Penal 6aw prohibits the practice in !uestion. The us

the firm name herein is also sustainable by reason of agreement between the partners.

ot so in this jurisdiction where there is no local custom that sanctions the practice. #ustom has beendefined as a rule of conduct formed by repetition of acts, uniformly observed /practiced1 as a social rul

legally binding and obligatory. 19#ourts take no judicial notice of custom. 3 custom must be proved as

fact, according to the rules of evidence. 203 local custom as a source of right cannot be considered by

court of justice unless such custom is properly established by competent evidence like any other fact.

Ge find such proof of the e=istence of a local custom, and of the elements re!uisite to constitute the

same, wanting herein. -erely because something is done as a matter of practice does not mean that

#ourts can rely on the same for purposes of adjudication as a juridical custom. $uridical custom must

differentiated from social custom. The former can supplement statutory law or be applied in the absen

of such statute. ot so with the latter.

-oreover, judicial decisions applying or interpreting the laws form part of the legal system. 22Ghen th

Supreme #ourt in the @een and Perkins cases issued its *esolutions directing lawyers to desist from

including the names of deceased partners in their firm designation, it laid down a legal rule against wh

no custom or practice to the contrary, even if proven, can prevail. This is not to speak of our civil law

which clearly ordains that a partnership is dissolved by the death of any partner. 23#ustom which are

contrary to law, public order or public policy shall not be countenanced. 2

The practice of law is intimately and peculiarly related to the administration of justice and should not b

considered like an ordinary 2moneymaking trade.2 t89:;h'w


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"n fine, petitioners' desire to preserve the "dentity of their firms in the eyes of the public must bow to le

and ethical impediment.

3##9*@"+6H, the petitions filed herein are denied and petitioners advised to drop the names 2SH#

and 29K3T32 from their respective firm names. Those names may, however, be included in the listin

individuals who have been partners in their firms indicating the years during which they served as such

S9 9*@*@.

"'G!S :acts>

Two separate Petitions were filed before this #ourt &1 by the surviving partners of 3tty.3le=ander Sycip, who died on -ay D, &)D, and Ghether the names of the deceased partners should be dropped.

8eld>Hes, the names should be dropped, but they may be included in the listings ofindividuals who have been partners in their firms indicating the years which they servedas such.The reason for this is, the names are being retained to improperly e=ploit theiradvertisement value.9T> " think the ruling in this case is no longer applicable because of *ule %.0< whichstates, Othe deceased partners name may still be used provided it is clearlycommunicated Qto the clients;publicR. The purpose of which is for law firms to retaingoodwill.

3. "#RO &S $#G#S+', 64 S(R# 30 71954

. '$#"O &S "#&'", 8 +'$ 469 71954

-$#N"'N# G#-O# '$#"O, P%&&'(%), v. %OS! G)'!RR!* "#&'", &'(!N! %. /R#N('S(

%#(O- #SS#" and S!$' %#(O- #SS#", R%*p'(%(*.

"elgad, "i>n ; /lres ?r P%&&'(%).

&i@ente %. /ran@is@ ?r R%*p'(%(*.

S$$#-)S

&. 3TT9*H 3@ #6"TF *63T"9 9: 3TT9*H 3@ #6"T, G8 N"STS. 2To constprofessional employment it is not essential that the client should have employed the attorney

professionally on any previous occasion . . . "t is not necessary that any retainer should have been pa


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promised, or charged forF neither is it material that the attorney consulted did not afterward undertakecase about which the consultation was had. "f a person, in respect to his business affairs or troublesany kind, consults with his attorney in his professional capacity with the view to obtaining professionadvice or assistance, and the attorney voluntarily permits or ac!uiesces in such consultation, then th

professional employment must be regarded as established . . .2cralaw virtua&aw library


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principles of e!uity and policy, will always look into the dealings between attorneys and clients and guthe latter from any undue conse!uences resulting from a situation in which they may stand une!ual. Tcourts act on the same principle whether the undertaking is to appear, or, for that matter, not to appea

answer declaration.

&0. 3TT9*HS3T63GF 3S 9::"#*S 9: T8 #97*TS. 3ttorneys are officers of the court whthey practice, forming a part of the machinery of the law for the administration of justice and as sucsubject to the disciplinary authority of the court and to its orders and directions with respect to thei

relations to the court as well as to their clients.

" ! ( ' S ' O N

)#SON

"t appears that on 3pril


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2-anila, Philippines

2-y dear -rs. 8ilado>jgc>chanrobles.com.ph

2:rom the papers you submitted to me in connection with civil case o. )00)D of the #ourt of :irst"nstance of -anila, entitled Alandina +amboa 8ilado v. S. $. 3ssad, " find that the basic facts whichbrought about the controversy between you and the defendant therein are asfollows>jgc>chanrobles.com.ph

2/a1 That you were the e!uitable owner of the property described in the complaint, as the same waspurchased and;or built with funds e=clusively belonging to you, that is to say, the houses and lot pertato your paraphernal estateF

2/b1 That on -ay %, &?%, the legal title to the property was with your husband, -r. Serafin P. 8iladoF a

2/c1 That the property was sold by -r. 8ilado without your knowledge on the aforesaid date of -ay %,&?%.

27pon the foregoing facts, " am of the opinion that your action against -r. 3ssad will not ordinarilyprosper. -r. 3ssad had the right to presume that your husband had the legal right to dispose of theproperty as the transfer certificate of title was in his name. -oreover, the price of P&&0,000 in $apanesmilitary notes, as of -ay %, &?%, does not !uite strike me as so grossly inade!uate as to warrant theannulment of the sale. " believe, lastly, that the transaction cannot be avoided merely because it wasmade during the $apanese occupation, nor on the simple allegation that the real purchaser was not aciti5en of the Philippines. 9n this last point, furthermore, " e=pect that you will have great difficulty inproving that the real purchaser was other than -r. 3ssad, considering that death has already sealed yhusbands lips and he cannot now testify as to the circumstances of the sale.

2:or the foregoing reasons, " regret to advice you that " cannot appear in the proceedings in your behaThe records of the case you loaned to me are herewith returned.

2Hours very truly,

/Sgd.1 24"#T $. :*3#"S#9.2cralaw virtua&aw library

24$:;*ag.

"n his answer to plaintiffs attorneys complaint, 3ttorney :rancisco alleged that about -ay, &?D, a reaestate broker came to his office in connection with the legal separation of a woman who had beendeserted by her husband, and also told him /:rancisco1 that there was a pending suit brought by -rs.8ilado against a certain Syrian to annul the sale of a real estate which the deceased Serafin 8ilado hamade to the Syrian during the $apanese occupationF that this woman asked him if he was willing to acthe case if the Syrian should give it to himF that he told the woman that the sales of real property durinthe $apanese regime were valid even though it was paid for in $apanese military notesF that this beingopinion, he told his visitor he would have no objection to defending the SyrianF

That one month afterwards, -rs. 8ilado came to see him about a suit she had instituted against a certSyrian to annul the conveyance of a real estate which her husband had madeF that according to her th


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case was in the hands of 3ttorneys @elgado and @i5on, but she wanted to take it away from themF thahe had known the plaintiffs deceased husband he did not hesitate to tell her frankly that hers was a locase for the same reason he had told the brokerF that -rs. 8ilado retorted that the basis of her action wnot that the money paid her husband was $apanese military notes, but that the premises were her privand e=clusive propertyF that she re!uested him to read the complaint to be convinced that this was the

theory of her suitF that he then asked -rs. 8ilado if there was a Torrens title to the property and sheanswered yes, in the name of her husbandF that he told -rs. 8ilado that if the property was registered her husbands favor, her case would not prosper eitherF

That some days afterward, upon arrival at his law office on strada street, he was informed by 3ttorne:ederico 3grava, his assistant, that -rs. 8ilado had dropped in looking for him and that when he, 3gralearned that -rs. 8ilados visit concerned legal matters he attended to her and re!uested her to leave 2e=pediente2 which she was carrying, and she didF that he told 3ttorney 3grava that the firm should nohandle -rs. 8ilados case and he should return the papers, calling 3gravas attention to what he/:rancisco1 already had said to -rs. 8iladoF

That several days later, the stenographer in his law office, Teofilo *agodon, showed him a letter whichhas been dictated in nglish by -r. 3grava, returning the 2e=pediente2 to -rs. 8iladoF that *agodon tohim /3ttorney :rancisco1 upon 3ttorney 3gravas re!uest that 3grava thought it more proper to e=plain-rs. 8ilado the reasons why her case was rejectedF that he forthwith signed the letter without reading and without keeping it for a minute in his possessionF that he never saw -rs. 8ilado since their lastmeeting until she talked to him at the -anila 8otel about a proposed e=trajudicial settlement of the cas

That in $anuary, &?E, 3ssad was in his office to re!uest him to handle his case stating that his 3merilawyer had gone to the States and left the case in the hands of other attorneysF that he accepted theretainer and on $anuary That 3ttorney :ranciscos firm mailed to the plaintiff a written opinion over his signature on the merits of her caseF that this opiniowas reached on the basis of papers she had submitted at his officeF that -rs. 8ilados purpose insubmitting those papers was to secure 3ttorney :ranciscos professional services. +ranting the facts tbe no more than these, we agree with petitioners counsel that the relation of attorney and client betwe

3ttorney :rancisco and -rs. 8ilado ensued. The following rules accord with the ethics of the legalprofession and meet with our approval>jgc>chanrobles.com.ph

2"n order to constitute the relation /of attorney and client1 a professional one and not merely one ofprincipal and agent, the attorneys must be employed either to give advice upon a legal point, to prosecor defend an action in court of $ustice, or to prepare and draft, in legal form such papers as deeds, billcontracts and the like.2 /3tkinson v. 8owlett, && By. 6aw *ep. /abstract1, %E?, cited in 4ol. ((, 3. 6. *., E.1


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2To constitute professional employment it is not essential that the client should have employed theattorney professionally on any previous occasion . . . "t is not necessary that any retainer should havebeen paid, promised, or charged forF neither is it material that the attorney consulted did not afterwardundertake the case about which the consultation was had. "f a person, in respect to his business affairtroubles of any kind, consults with his attorney in his professional capacity with the view to obtaining

professional advice or assistance, and the attorney voluntarily permits or ac!uiesces in such consultatthen the professional employment must be regarded as established . . .2 /D $ones #ommentaries onvidence, pp. ?&&(?&&.1

23n attorney is employed that is, he is engaged in his professional capacity as a lawyer or counselowhen he is listening to his clients preliminary statement of his case, or when he is giving advice thereo

just as truly as when he is drawing his clients pleadings, or advocating his clients cause in open cour/@enver Tramway #o. v. 9wens,


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2"n order that a court may prevent an attorney from appearing against a former client, it is unnecessarythat the court ascertain in detail the e=tent to which the former clients affairs might have a bearing on matters involved in the subse!uent litigation on the attorneys knowledge thereof.2 /Aody v. Second$udicial @ist. #ourt,


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advice to the opposite party, even if he should decline to perform the contemplated services on behalfthe latter. "t is to prevent undue hardship on the attorney resulting from the rigid observance of the rulethat a separate and independent fee for consultation and advice was conceived and authori5ed. 23retaining fee is a preliminary fee given to an attorney or counsel to insure and secure his future serviceand induce him to act for the client. "t is intended to remunerate counsel for being deprived, by being

retained by one party, of the opportunity of rendering services to the other and of receiving pay from hand the payment of such fee, in the absence of an e=press understanding to the contrary, is neither mnor received in payment of the services contemplatedF its payment has no relation to the obligation of client to pay his attorney for the services which he has retained him to perform.2 /) #.$.S., &0&.1

The defense that 3ttorney 3grava wrote the letter =hibit 3 and that 3ttorney :rancisco did not take thtrouble of reading it, would not take the case out of the interdiction. "f this letter was written under thecircumstances e=plained by 3ttorney :rancisco and he was unaware of its contents, the fact remains this firm did give -rs. 8ilado a formal professional advice from which, as heretofore demonstrated,emerged the relation of attorney and client. This letter binds and stops him in the same manner and tosame degree as if he personally had written it. 3n information obtained from a client by a member or

assistant of a law firm is information imparted to the firm. /E #. 59, E


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Ge conclude therefore that the motion for dis!ualification should be allowed. "t is so ordered, withoutcosts.

"'G!S

"n 3pril &?D, Alandina 8ilado filed a complaint to have some deeds of sale annulled against Selim 3s

3ttorney @elgado @i5on represented 8ilado. 3ssad was represented by a certain 3tty. 9hnick.

"n $anuary &?E, 3tty. 4icente :rancisco replaced 3tty. 9hnick as counsel for 3ssad and he thenafter

entered his appearance in court.

"n -ay &?E or four months later, 3tty. @i5on filed a motion to have 3tty. :rancisco be dis!ualified

because 3tty. @i5on found out that in $une &?D, 8ilado approached 3tty. :rancisco to ask for addition

legal opinion regarding her case and for which 3tty. :rancisco sent 8ilado a legal opinion letter.

3tty. :rancisco opposed the motion for his dis!ualification. "n his opposition, he said that no material

information was relayed to him by 8iladoF that in fact, upon hearing 8ilados story, 3tty. :rancisco advi

her that her case will not win in courtF but that later, 8ilado returned with a copy of the Coplaintprep

by 3tty. @i5onF that however, when 8ilado returned, 3tty. :rancisco was not around but an associate in

firm was there /a certain 3tty. :ederico 3grava1F that 3tty. 3grava attended to 8iladoF that after 8ilado

leaving behind the legal documents, 3tty. 3grava then prepared a legal opinion letter where it was stat

that 8ilado has no cause of action to file suitF that 3tty. 3grava had 3tty. :rancisco sign the letterF that 3

:rancisco did not read the letter as 3tty. 3grava said that it was merely a letter e=plaining why the firm

cannot take on 8ilados case.

3tty. :rancisco also pointed out that he was not paid for his adviceF that no confidential information wa

relayed because all 8ilado brought was a copy of the #omplaint which was already filed in courtF and t

if any, 8ilado already waived her right to dis!ualify 3tty. :rancisco because he was already representin

3ssad in court for four months in the said case.

$udge $ose +utierre5 @avid ruled in favor of 3tty. :rancisco.

'SS)! Ghether or not 3tty. :rancisco should be dis!ualified in the said civil case.

!$" Hes. There already e=isted an attorneyclient relationship between 8ilado and 3tty. :rancisco.8ence, 3tty. :rancisco cannot act as counsel against 8ilado without the latters consent.

3s ruled by the Supreme #ourt, to constitute an attorneyclient relationship, it is not necessary that an

retainer should have been paid, promised, or charged forF neither is it material that the attorney consu

did not afterward undertake the case about which the consultation was had. "f a person, in respect to h

business affairs or troubles of any kind, consults with his attorney in his professional capacity with the

view to obtaining professional advice or assistance, and the attorney voluntarily permits or ac!uiesces

such consultation, then the professional employment must be regarded as established.


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4. SON! &S -#N O/ (O!R(!, 15 )S 12 71899

6. G)!RR!RO &S !RN#N"O

5. ) &S GON*#$!S, #.( NO. 4208

#.(. N. 4280 ar@A 30, 200


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in favor of the formerF that in the said date, Gilliam S. 7y received the Transfer #ertificate of o. T%%&


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#ristina 7y and that T#T o. TD&ED was misplaced and cannot be located despite efforts to locate it.Ganting to protect his interest over the property coupled with his desire to get hold of T#T o. TD&EDearliest possible time, he offered his assistance pro bono to prepare a petition for lost title provided thanecessary e=penses incident thereto including e=penses for transportation and others, estimated atP


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advantage or that of a third person, unless the client with the full knowledge of the circumstanceconsents thereto.2

9n


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in the outcome e=cept as all good citi5ens may have in the proper administration of justice. 8enif the evidence on record warrants, the respondent may be suspended or disbarred despite thedesistance of complainant or his withdrawal of the charges.&or Reversion pending in this Court in which said

respondent, per coplaint filed by the ffice of the Solicitor General, is alleged to have

secured a free patent and later a certificate of title to a parcel of land which, upon

investigation, turned out to be a swapland and not susceptible of ac'uisition under a fr

patent, and which he later ortgaged to the Rural 1an) of Pinan 0!B nc9 %he ortgage

was later foreclosed and the land sold at public auction and respondent has not redeee

the land until the present. /mphasis Supplied1

The "AP Kamboanga del orte #hapter also submitted a #ertification, dated < :ebruary &0, signed

its Secretary Peter H. #o and attested to by its President +il 6. Aatula, to wit>

This is to certify that based on the certifications issued by the 9ffice of the #lerk of #ourt

-unicipal Trial #ourt in the #ity of @ipologF *egional Trial #ourt of Kamboanga del orte

and the 9ffice of the Provincial and #ity Prosecutors, -r. icolas . Sabandal has not b

convicted of any crime, nor is there any pending derogatory criminal case against him.

Aased on the above findings, the Aoard does not find any acts committed by the petition

to dis!ualify him from admission to the Philippine Aar.

Ge re!uired the complainants to comment on the aforesaid "AP #ertification and to reply to =ecutive

$udge Pelagio 6achica's comment in our *esolution of &D :ebruary &0.

9n &) 3pril &0, after taking note of the unrelenting vehement objections of complainants Tan /in A-

and Ao!uia /in SA# E&E1 and the #ertification by =ecutive $udge 6achica, dated ? 3ugust &(, that

there is a pending case before his #ourt involving respondent Sabandal, this #ourt resolved to @:*

the setting of a date for the oathtaking of respondent Sabandal and re!uired $udge 6achica to inform


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#ourt of the outcome of the case entitled *epublic v. Sabandal, /#ivil #ase %)?)1, pending before his

2Sala2 as soon as resolved.

"n the meantime, on &( 3pril &0, the #ourt received another #omment, dated &% -arch &0, by

complainant 8erve @agpin in SA# E0, vehemently objecting to the oathtaking of respondent Saband

and describing his actuations in #ivil #ase %)?) as manipulative and surreptitious. This comment wasoted in the *esolution of


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Said judgment reveals that an amicable settlement, dated


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"t turns out that #ivil #ase o. %)?) entitled 2*epublic of the Philippines v. icolas Sabandal2 was

instituted by the +overnment in &(D and was brought about because of respondent's procurement of

certificate of free patent over a parcel of land belonging to the public domain and its use as security fo

mortgage in order to obtain a loan. 3t that time, Sabandal was an employee of the Aureau of 6ands. 8

did not submit any defense and was declared it default by order of the *T# dated


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Time and again, it has been held that the practice of law is not a matter of right. "t is a privilege bestow

upon individuals who are not only learned in the law but who are also known to possess good moral

character>

The Supreme #ourt and the Philippine Aar have always tried to maintain a high standard

the legal profession, both in academic preparation and legal training as well as in honestand fair dealing. The #ourt and the licensed lawyers themselves are vitally interested in

keeping this high standardF and one of the ways of achieving this end is to admit to the

practice of this noble profession only those persons who are known to be honest and to

possess good moral character. . . . /n rePara5o, (< Phil. jgc>chanrobles.com.ph

26eakage in some subjects in the recent bar e=aminations were denounced by some of the law graduawho took part in the tests, to the Star *eporter this morning.

2These e=aminees claim to have seen mimeograph copies of the !uestions in one subject, days beforthe tests were given, in the Philippine ormal School.

29nly students of one private university in Sampaloc had those mimeographed !uestions on said subjfully one week before the tests.

2The students who made the denunciation to the Star *eporter claim that the tests actually given weresimilar in every respect to those they had seen students of this private university holding proudly arounthe city.


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2The students who claim to have seen the tests which leaked are demanding that the Supreme #ourtinstitute an immediate probe into the matter, to find out the source of the leakage, and annul the testpapers of the students of the particular university possessed of those tests before the e=aminations.

2The discovery of the alleged leakage in the tests of the bar e=aminations came close on the heels of

revelations in the Philippine #ollegian, official organ of the student body of the 7niversity of thePhilippines, on recent government tests wherein the !uestions had come into the possession of nearlythe graduates of some private technical schools.2cralaw virtua&aw library

To the publication, evidently, the attention of the Supreme #ourt must have been called, and -r. $usticPadilla, who had previously been designated #hairman of the #ommittee of Aar =aminers for this yeby authority of the #ourt, instructed -r. $ose de la #ru5 as #ommissioner with the assistance of -r. Soriano, #lerk of #ourt to cite -r. Para5o for !uestioning and investigation. "n this connection, and forpurposes of showing the interest of the Supreme #ourt in the news item and its implications, it may hebe stated that this #ourt is and for many years has been, in charge of the Aar =aminations held everyyear, including that of this year, held in 3ugust, &?(. Section &%, 3rticle 4""" of the #onstitution of the

Philippines authori5es this #ourt to promulgate rules concerning admission to the practice of law, andpursuant to that authority, *ule &


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notes were taken of the testimony of -r. Para5o, and -r. $ustice -arceliano *. -ontemayor, the newchairman of the committee of bar e=aminers, has submitted the transcript of said notes for theconsideration of this #ourt.

2:rom the record of said investigation, it is clear that -r. Para5o has deliberately and consistently decl

and refused to reveal the identity of the persons supposed to have given him the data and informationwhich his news item was based, despite the repeated appeals made to his civic spirit, and for hiscooperation, in order to enable this #ourt to conduct a thorough investigation of the alleged bare=amination anomaly, *esolved, to authori5e -r. $ustice -ontemayor to cite -r. Para5o before him,e=plain to him that the interests of the State demand and so this #ourt re!uires that he reveal the souror sources of his information and of his news item, and to warn him that his refusal to make the revelademanded will be regarded as contempt of court and penali5ed accordingly. -r. $ustice -ontemayor wadvise the #ourt of the result.2cralaw virtua&aw library

3cting upon this resolution, the writer of this opinion cited -r. Para5o to appear before him on 9ctobe&?(. 8e appeared on the date set and it was clearly e=plained to him that the interest of the State

demands and this court re!uires that he reveal the source or sources of his information and of his newitemF that this was a very serious matter involving the confidence of the people in general and the lawpractitioners and bar e=aminees in particular, in the regularity and cleanliness of the bar e=aminationsthat it also involves the good name and reputation of the bar e=aminers who were appointed by this #to prepare the bar e=aminations !uestions and later pass upon and correct the e=amination papersF anlast but not least, it also involves and is bound to affect the confidence of the whole country in the verySupreme #ourt which is conducting the bar e=aminations. "t was further e=plained to him that theSupreme #ourt is keenly interested in investigating the alleged anomaly and leakage of the e=aminatio!uestions and is determined to punish the party or parties responsible therefor but that without his helpspecially the identities of the persons who furnished him the information and who could give the court necessary data and evidence, the #ourt could not even begin the investigation because there would bno basis from which to start, not even a clue from which to formulate a theory. 6astly, Para5o was told under the law he could be punished if he refused to make the revelation, punishment which may eveninvolve imprisonment.

Aecause of the seriousness of the matter, Para5o was advised to think it over and consider theconse!uences, and if he need time within which to do this and so that he might even consult the editoand publisher of his paper, the Star *eporter, he could be given an e=tension of time, and at his re!uethe investigation was postponed to 9ctober &D, &?(. 9n that date he appeared, accompanied by hiscounsel, 3tty. :eli=berto -. Serrano. The writer of this opinion in the presence of his counsel, severalnewspapermen, #lerk of #ourt Soriano, @eputy #lerk of #ourt #ru5, and -r. #hanliongco made a formdemand on -r. Para5o to reveal the identities of his informants, under oath, but he declined and refusto make the revelation. 3t the re!uest of his counsel, that before this #ourt take action upon his refusareveal, he be accorded a hearing, with the consent of the #ourt first obtained, a public hearing was heon the same day, 9ctober &D, &?( in the course of which, 3ttorney Serrano e=tensively and ably arguthe case of his client, invoking the benefits of *epublic 3ct o. D%, the first section of which reads asfollows>jgc>chanrobles.com.ph

2S#T"9 &. The publisher, editor or duly accredited reporter of any newspaper, maga5ine or periodicof general circulation cannot be compelled to reveal the source of any newsreport or informationappearing in said publication which was related in confidence to such publisher, editor or reporter, unlethe court or a 8ouse or committee of #ongress finds that such revelation is demanded by the interest the state.2cralaw virtua&aw library


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This #ourt has given this case prolonged, careful and mature consideration, involving as it doesinteresting and important points of law as well as !uestions of national importance. #ounsel contends the phrase 2interest of the state2 found at the end of section & of *epublic 3ct o. D% means and referonly to the security of the state, that is to say that only when national security or public safety is

involved, may this #ourt compel the defendant to reveal the source or sources of his news report orinformation. Ge confess that it was not easy to decide this legal !uestion on which the conviction orac!uittal of Para5o hinges. 3s a matter of fact, the vote of the $ustices is not unanimous.

"n an effort to determine the intent of the 6egislature that passed *epublic 3ct o. D%, particularly theSenate where it originated, we e=amined the record of the proceedings in said legislative body when t

3ct, then Senate Aill o. E was being discussed. Ge gathered from the said record that the original biprepared by Senator Sotto provided that the immunity to be accorded a publisher, editor, or reporter oany newspaper was absolute and that under no circumstance could he be compelled to reveal the souof his information or news report. The committee, however, under the chairmanship of Senator #uencinserted an amendment or change, by adding to the end of section & of the clause 2unless the court fin

that such revelation is demanded by the public interest.2cralaw virtua&aw library

Ghen the bill as amended was recommended for approval on second reading, Senator Sotto, the authof the original bill proposed an amendment by eliminating the clause added by the committee 2unlethe court finds that such revelation is demanded by the public interest,2 claiming that said clause woulthe purpose of the bill. This amendment of Senator Sotto was discussed. 4arious Senators objected toelimination of the clause already referred to on the ground that without such e=ception and by givingcomplete immunity to editors, reporters, etc., many abuses may be committed. Senator #uenco,#ommittee chairman, in advocating the disapproval of the Sotto amendment, and in defending thee=ception embodied in the amendment introduced by the #ommittee, consisting in the clause> 2unlessc

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