RESOLUTION
VILLARAMA, JR., J.:
Before the Court is a petition for review of
Resolution No. XVIII-2008-335[1] passed
on July 17, 2008 by the Board of Governors of the Integrated Bar of
the Philippines (IBP) in CBD Case No. 07-1953. The IBP Board of Governors
dismissed the disbarment case filed by the complainants against the
respondents.
The facts and proceedings antecedent to this
case are as follows:
Koronadal Water District (KWD), a
government-owned and controlled corporation (GOCC), hired respondent Atty.
Michael A. Ignes as private legal counsel for one (1) year effective April
17, 2006.[2] The
Office of the Government Corporate Counsel (OGCC) and the Commission on Audit
(COA) gave their consent to the employment of Atty. Ignes.[3] However,
controversy later erupted when two (2) different groups, herein referred to as
the Dela Pea board and Yaphockun board, laid claim as the legitimate Board of
Directors of KWD.
On December 28, 2006,
the members of the Dela Pea board filed Civil Case No. 1793[4] for
Injunction and Damages, seeking to annul the appointment of two (2) directors,
Joselito T. Reyes and Carlito Y. Uy, who will allegedly connive with Director
Allan D. Yaphockun whose hostility to the present Board of Directors, the Dela
Pea board, is supposedly of public knowledge.
On January 18, 2007, the Dela Pea board
also adopted Resolution No. 009[5] appointing
respondents Atty. Rodolfo U. Viajar, Jr. and Atty. Leonard Buentipo Mann as
private collaborating counsels for all cases of KWD and its Board of Directors,
under the direct supervision and control of Atty. Ignes.
Subsequently, on February 9, 2007, Attys.
Ignes, Viajar, Jr. and Mann filed SCA Case No. 50-24 for Indirect Contempt of
Court[6] entitled Koronadal
Water District (KWD), represented herein by its General Manager, Eleanor Pimentel-Gomba
v. Efren V. Cabucay, et al. On February 19, 2007, they
also filed Civil Case No. 1799 for Injunction and Damages[7] entitled Koronadal
Water District (KWD), represented herein by its General Manager, & Eleanor
Pimentel-Gomba v. Rey J. Vargas. On March 9, 2007, KWD and
Eleanor Pimentel-Gomba filed a supplemental complaint[8] in
Civil Case No. 1799.
Meanwhile, in Contract Review No. 079[9] dated February
16, 2007, the OGCC had approved the retainership contract of Atty. Benjamin
B. Cuanan as new legal counsel of KWD and stated that the retainership contract
of Atty. Ignes had expired on January 14, 2007.
In its letter[10] dated March
2, 2007, the OGCC also addressed Eleanor P. Gombas insistence that the
retainership contract of Atty. Ignes will expire on April 17,
2007. The OGCC stated that as stipulated, the KWD or OGCC may terminate
the contract anytime without need of judicial action; that OGCCs grant of
authority to private counsels is a privilege withdrawable under justifiable
circumstances; and that the termination of Atty. Igness contract was justified
by the fact that the Local Water Utilities Administration had confirmed the
Yaphockun board as the new Board of Directors of KWD and that said board had
terminated Atty. Igness services and requested to hire another counsel.
Alleging that respondents acted as counsel for
KWD without legal authority, complainants filed a disbarment complaint[11] against
the respondents before the IBP Commission on Bar Discipline (CBD), docketed as
CBD Case No. 07-1953. Complainants alleged that respondents filed SCA Case
No. 50-24 and Civil Case No. 1799 as counsels of KWD without legal
authority. They likewise stated in their position paper[12] that
Atty. Ignes continued representing KWD even after the OGCC had confirmed the
expiration of Atty. Igness contract in its April 4, 2007 manifestation/motion[13] in
Civil Case No. 1796-25 entitled Koronadal Water District (KWD),
represented herein by its General Manager, Eleanor Pimentel Gomba v. Supreme
Investigative and Security Agency, represented by its Manager Efren Y. Cabucay.
In his defense,[14] Atty.
Mann stated that he and his fellow respondents can validly represent KWD
until April 17, 2007 since Atty. Ignes was not notified of his contracts
pre-termination. Atty. Mann also stated that he stopped representing KWD
after April 17, 2007 in deference to the OGCCs stand. Attys.
Ignes, Viajar, Jr. and Nadua echoed Atty. Manns defense.[15]
On March 10, 2008, complainants filed a
manifestation[16] before
the IBP with the following attachments: (1) the transcript of stenographic
notes taken on January 28, 2008 in Civil Case No. 1799, and (2) the notice of
appeal dated February 28, 2008 of the January 7, 2008 Order dismissing Civil
Case No. 1799. Aforesaid transcript showed that Atty. Ignes appeared as counsel
of KWD and Ms. Gomba. He also signed the notice of appeal.
In his report and recommendation,[17] the
Investigating Commissioner recommended that the charge against Atty. Ignes be
dismissed for lack of merit. The Investigating Commissioner held that
Atty. Ignes had valid authority as counsel of KWD for one (1) year, from April
2006 to April 2007, and he was unaware of the pre-termination of his contract when
he filed pleadings in SCA Case No. 50-24 and Civil Case No. 1799 in February
and March 2007.
As to Attys. Viajar, Jr., Mann and Nadua, the
Investigating Commissioner recommended that they be fined P5,000
each for appearing as attorneys for a party without authority to do so,
per Santayana v. Alampay.[18] The
Investigating Commissioner found that they failed to secure the conformity of
the OGCC and COA to their engagement as collaborating counsels for KWD.
As aforesaid, the IBP Board of Governors
reversed the recommendation of the Investigating Commissioner and dismissed the
case for lack of merit.
Hence, the present petition.
Complainants contend
that the IBP Board of Governors erred in dismissing the case because
respondents had no authority from the OGCC to file the complaints and appear as
counsels of KWD in Civil Case No. 1799, SCA Case No. 50-24 and Civil Case No.
1796-25. Complainants point out that the retainership contract of Atty.
Ignes had expired on January 14, 2007; that the Notice of Appeal filed by Atty.
Ignes, et al. in Civil Case No. 1799 was denied per Order dated April 8, 2008
of the Regional Trial Court (RTC) for being filed by one not duly authorized by
law; and that the authority of Attys. Viajar, Jr. and Mann as collaborating
counsels is infirm since Resolution No. 009 of the Dela Pea board lacks the
conformity of the OGCC. As a consequence, according to complainants,
respondents are liable for willfully appearing as attorneys for a party to a
case without authority to do so.
In his comment, Atty. Ignes admits that their
authority to represent KWD had expired on April 17, 2007, but he and his
fellow respondents stopped representing KWD after that date. He submits
that they are not guilty of appearing as counsels without authority. In
their comment, Attys. Viajar, Jr. and Nadua propound similar
arguments. They also say that their fees were paid from private funds of
the members of the Dela Pea board and KWD personnel who might need legal
representation, not from the public coffers of KWD. In his own comment,
Atty. Mann submits similar arguments.
After a careful study of the case and the
parties submissions, we find respondents administratively liable.
At the outset, we note that the parties do not
dispute the need for OGCC and COA conformity if a GOCC hires private
lawyers. Nonetheless, we shall briefly recall the legal basis of this
rule. Under Section 10, Chapter 3, Title III, Book IV of the Administrative
Code of 1987, it is the OGCC which shall act as the principal law office of
all GOCCs. And Section 3 of Memorandum Circular No. 9,[19] issued
by President Estrada on August 27, 1998, enjoins GOCCs to refrain from
hiring private lawyers or law firms to handle their cases and legal
matters. But the same Section 3 provides that in exceptional cases, the
written conformity and acquiescence of the Solicitor General or the Government
Corporate Counsel, as the case may be, and the written concurrence of the COA
shall first be secured before the hiring or employment of a private lawyer or
law firm. In Phividec Industrial Authority v. Capitol Steel Corporation,[20] we
listed three (3) indispensable conditions before a GOCC can hire a private
lawyer: (1) private counsel can only be hired in exceptional cases; (2) the
GOCC must first secure the written conformity and acquiescence of the Solicitor
General or the Government Corporate Counsel, as the case may be; and (3) the
written concurrence of the COA must also be secured.
In the case of respondents, do they have valid
authority to appear as counsels of KWD?
We find that Attys. Nadua, Viajar, Jr. and Mann
had no valid authority to appear as collaborating counsels of KWD in SCA Case
No. 50-24 and Civil Case No. 1799. Nothing in the records shows that Atty.
Nadua was engaged by KWD as collaborating counsel. While the 4th Whereas
Clause of Resolution No. 009 partly states that he and Atty. Ignes presently
stand as KWD legal counsels, there is no proof that the OGCC and COA approved
Atty. Naduas engagement as legal counsel or collaborating counsel. Insofar
as Attys. Viajar, Jr. and Mann are concerned, their appointment as
collaborating counsels of KWD under Resolution No. 009 has no approval from the
OGCC and COA.
Attys. Nadua, Viajar, Jr. and Mann are in the
same situation as the private counsel of Phividec Industrial Authority in Phividec. In
that case, we also ruled that said private counsel of Phividec Industrial
Authority, a GOCC, had no authority to file the expropriation case in Phividecs
behalf considering that the requirements set by Memorandum Circular No. 9 were
not complied with.[21] Thus,
Resolution No. 009 did not grant authority to Attys. Nadua, Viajar, Jr. and
Mann to act as collaborating counsels of KWD. That Atty. Ignes was not
notified of the pre-termination of his own retainership contract cannot
validate an inexistent authority of Attys. Nadua, Viajar, Jr. and Mann as
collaborating counsels.
In the case of Atty. Ignes, he also appeared as
counsel of KWD without authority, after his authority as its counsel had
expired. True, the OGCC and COA approved his retainership contract for one
(1) year effective April 17, 2006. But even if we assume as true that
he was not notified of the pre-termination of his contract, the records still
disprove his claim that he stopped representing KWD after April 17,
2007.
Atty. Ignes offered no rebuttal to the verified
manifestation of complainants filed with the IBP on March 10,
2008. Attached therein was the transcript of stenographic notes[22] in
Civil Case No. 1799 taken on January 28, 2008 when Atty. Ignes
argued the extremely urgent motion for the immediate return of the
facilities of the KWD to the KWD Arellano Office. The RTC was
compelled to ask him why he seeks the return of KWD properties
if he filed the motion as counsel of Ms. Gomba. When the RTC
noted that KWD does not appear to be a party to the motion, Atty. Ignes said
that KWD is represented by Ms. Gomba per the caption of the
case. Atty. Ignes also manifested that they will file a motion for
reconsideration of the orders dismissing Civil Case No. 1799 and Civil Case No.
1793. The RTC ruled that it will not accept any motion for reconsideration in
behalf of KWD unless he is authorized by the OGCC, but Atty. Ignes later filed
a notice of appeal[23] dated February
28, 2008, in Civil Case No. 1799. As the notice of appeal signed by
Atty. Ignes was filed by one (1) not duly authorized by law, the RTC, in its
Order[24] dated
April 8, 2008, denied due course to said notice of appeal.
As we see it, Atty. Ignes portrayed that his
appearance on January 28, 2008 was merely as counsel of Ms.
Gomba. He indicted himself, however, when he said that Ms. Gomba
represents KWD per the case title. In fact, the extremely urgent motion
sought the return of the facilities of KWD to its Arellano
Office. Clearly, Atty. Ignes filed and argued a motion with the interest
of KWD in mind. The notice of appeal in Civil Case No. 1799 further
validates that Atty. Ignes still appeared as counsel of KWD after his authority
as counsel had expired. This fact was not lost on the RTC in denying due
course to the notice of appeal.
Now did respondents willfully appear
as counsels of KWD without authority?
The following circumstances convince us that,
indeed, respondents willfully and deliberately appeared as counsels of KWD
without authority. One, respondents have admitted the existence of
Memorandum Circular No. 9 and professed that they are aware of our ruling
in Phividec.[25] Thus,
we entertain no doubt that they have full grasp of our ruling therein that
there are indispensable conditions before a GOCC can hire private counsel and
that for non-compliance with the requirements set by Memorandum Circular No. 9,
the private counsel would have no authority to file a case in behalf of a
GOCC. Still, respondents acted as counsels of KWD without complying with
what the rule requires. They signed pleadings as counsels of
KWD. They presented themselves voluntarily, on their own volition, as
counsels of KWD even if they had no valid authority to do so.
Two, despite the question on respondents
authority as counsels of KWD which question was actually raised earlier in
Civil Case No. 1799 by virtue of an urgent motion to disqualify KWDs counsels[26] dated February
21, 2007 and during the hearing on February 23, 2007[27] respondents
still filed the supplemental complaint in the case on March 9,
2007. And despite the pendency of this case before the IBP, Atty. Ignes
had to be reminded by the RTC that he needs OGCC authority to file an intended
motion for reconsideration in behalf of KWD.
With the grain of evidence before us, we do not
believe that respondents are innocent of the charge even if they insist that
the professional fees of Attys. Nadua, Viajar, Jr. and Mann, as collaborating
counsels, were paid not from the public coffers of KWD. To be sure, the
facts were clear that they appeared as counsels of KWD without authority, and
not merely as counsels of the members of the Dela Pea board and KWD personnel
in their private suits.
Consequently, for respondents willful
appearance as counsels of KWD without authority to do so, there is a valid
ground to impose disciplinary action against them. Under Section 27, Rule
138 of the Rules of Court, a member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for any deceit,
malpractice, or other gross misconduct in such office, grossly immoral conduct,
or by reason of his conviction of a crime involving moral turpitude, or for any
violation of the oath which he is required to take before admission to
practice, or for a willful disobedience of any lawful order of a superior
court, or for corruptly or willfully appearing as an attorney for a
party to a case without authority to do so.
Disbarment, however, is the most severe form of
disciplinary sanction, and, as such, the power to disbar must always be
exercised with great caution, and should be imposed only for the most
imperative reasons and in clear cases of misconduct affecting the standing and
moral character of the lawyer as an officer of the court and member of the
bar.Accordingly, disbarment should not be decreed where any punishment less
severe such as a reprimand, suspension or fine, would
accomplish the end desired.[28] In Santayana,[29]we
imposed a fine of P5,000 on the respondent for willfully appearing
as an attorney for a party to a case without authority to do so. The
respondent therein also appeared as private counsel of the National
Electrification Administration, a GOCC, without any approval from the OGCC and
COA.
Conformably with Santayana, we
impose a fine of P5,000 on each respondent.
On another matter, we note that respondents
stopped short of fully narrating what had happened after the RTC issued four
(4) orders on March 24, 2007 and on April 13, 2007 in Civil
Case No. 1799.[30] As
willingly revealed by complainants, all four (4) orders were nullified by the
Court of Appeals.[31] We
are compelled to issue a reminder that our Code of Professional Responsibility
requires lawyers, like respondents, to always show candor and good faith to the
courts.[32]
WHEREFORE, the petition is GRANTED. The
assailed Resolution No. XVIII-2008-335 passed on July 17, 2008 by the IBP Board
of Governors in CBD Case No. 07-1953 isREVERSED and SET
ASIDE.
Respondents Attys. Michael A. Ignes, Leonard
Buentipo Mann, Rodolfo U. Viajar, Jr., and John Rangal D. Nadua are found GUILTY of
willfully appearing as attorneys for a party to a case without authority to do
so and FINED P5,000 each, payable to this Court within
ten (10) days from notice of this Resolution. They are STERNLY
WARNED that a similar offense in the future will be dealt with more
severely.
Let a copy of this Resolution be attached to
respondents personal records in the Office of the Bar Confidant.
SO ORDERED.
