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Engagement of a private counsel by a GOCC

First Posted 08:14:00 12/12/2010

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A.C. No. 8096

Promulgated: July 5, 2010

Factual Backgound

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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. 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 KWD?s counsels dated February 21, 2007 and during the hearing on February 23, 2007 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 Peña 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. In Santayana, 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. As willingly revealed by complainants, all four (4) orders were nullified by the Court of Appeals. 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. ?

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