Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-51122 March 25, 1982
EUGENIO J. PUYAT, ERWIN L. CIONG!IAN, E"GAR"O
P. REYES, ANTONIO G. PUYAT, JAIME R. !LANCO,
RA#AEL R. RECTO a$% REYNAL"O L.
LAR"I&A!AL, petitioners,
vs.
ON. SI'TO T. J. "E GU&MAN, JR., a( A((oc)a*+
Co,,)(()o$+r o- *h+ S+c.r)*)+( / E0cha$1+
Co,,)(()o$, EUSTA2UIO T. C. ACERO, R. G. 3IL"&IUS,
ENRI2UE M. !ELO, MANUEL G. A!ELLO, SER3ILLANO
"OLINA, JUANITO MERCA"O a$% ESTANISLAO A.
#ERNAN"E&, respondents.

MELENCIO-ERRERA, J.:
This suit for certiorari and Prohibition with Preliminar
!n"unction is poised a#ainst the $rder of respondent
Associate Commissioner of the %ecurities and E&chan#e
Commission '%EC( #rantin# Assemblman Estanislao A.
)ernande* leave to intervene in %EC Case No. +,-,.
A .uestion of novel import is in issue. )or its resolution, the
followin# dates and alle#ations are bein# #iven and made/
a( May 14,1979. An election for the eleven 0irectors of the
!nternational Pipe !ndustries Corporation '!P!( a private
corporation, was held. Those in char#e ruled that the
followin# were elected as 0irectors/
Eu#enio 1. Puat Eusta.uio T.C. Acero
Erwin 2. Chion#bian R. 3. 4ild*ius
Ed#ardo P. Rees Enri.ue M. Belo
Antonio 3. Puat %ervillano 0olina
1aime R. Blanco 1uanito Mercado
Rafael R. Recto
Those named on the left list ma be called the Puat 3roup5
those on the ri#ht, the Acero 3roup. Thus, the Puat 3roup
would be in control of the Board and of the mana#ement of
!P!.
b( May 25, 1979. The Acero 3roup instituted at the
%ecurities and E&chan#e Commission '%EC( quo
warrantoproceedin#s, doc6eted as Case No. +,-, 'the %EC
Case(, .uestionin# the election of Ma +-, +7,7. The Acero
3roup claimed that the stoc6holders8 votes were not
properl counted.
c( May 25-31, 1979. The Puat 3roup claims that at
conferences of the parties with respondent %EC
Commissioner de 3u*man, 1ustice Estanislao A. )ernande*,
then a member of the !nterim Batasan# Pambansa, orall
entered his appearance as counsel for respondent Acero to
which the Puat 3roup ob"ected on Constitutional #rounds.
%ection ++, Article 4!!!, of the +7,9 Constitution, then in
force, provided that no Assemblman could :appear as
counsel before ... an administrative bod:, and %EC was an
administrative bod. !ncidentall, the same prohibition was
maintained b the April ,, +7;+ plebiscite. The cited
Constitutional prohibition bein# clear, Assemblman
)ernande* did not continue his appearance for respondent
Acero.
d( May 31, 1979. <hen the %EC Case was called, it turned
out that/
'i( $n Ma +=, +7,7, Assemblman Estanislao
A. )ernande* had purchased from Au#usto A.
+
Morales ten '+>( shares of stoc6 of !P! for
P?>>.>> upon re.uest of respondent Acero to
.ualif him to run for election as a 0irector.
'ii( The deed of sale, however, was notari*ed
onl on Ma 9>, +7,7 and was sou#ht to be
re#istered on said date.
'iii( $n Ma 9+, +7,7, the da followin# the
notari*ation of Assemblman )ernande*8
purchase, the latter had @led an Ar#ent
Motion for !ntervention in the %EC Case as the
owner of ten '+>( !P! shares alle#in# le#al
interest in the matter in liti#ation.
e( July 17, 1979. The %EC #ranted leave to intervene on the
basis of Att. )ernande*8 ownership of the said ten
shares.
1
!t is this $rder allowin# intervention that
precipitated the instant petition for certiorari and Prohibition
with Preliminar !n"unction.
f( July 3, 1979. Ed#ardo P. Rees instituted a case before the
Court of )irst !nstance of Ri*al 'Pasi#(, Branch BB!, a#ainst
N.4. 4ereni#de Buein*enfabrie6en E&celsior C 0e Maas and
respondent Eusta.uio T. C. Acero and others, to annul the
sale of E&celsior8s shares in the !P! to respondent Acero 'CC
No. 99,97(. !n that case, Assemblman )ernande* appeared
as counsel for defendant E&celsior !n 2D=+7?;, we ruled that
Assemblman )ernande* could not appear as counsel in a
case ori#inall @led with a Court of )irst !nstance as in such
situation the Court would be one :without appellate
"urisdiction.:
$n %eptember -, +7,7, the Court en banc issued a
temporar Restrainin# $rder en"oinin# respondent %EC
Associate Commissioner from allowin# the participation as
an intervenor, of respondent Assemblman Estanislao
)ernande* at the proceedin#s in the %EC Case.
The %olicitor 3eneral, in his Comment for respondent
Commissioner, supports the stand of the latter in allowin#
intervention. The Court en banc, on November E, +7,7,
resolved to consider the Comment as an Answer to the
Petition.
The issue which will be resolved is whether or not
Assemblman )ernande*, as a then stoc6holder of !P! ma
intervene in the %EC Case without violatin# %ection ++,
Article 4!!! of the Constitution, which, as amended, now
reads/
%EC. ++.
No Member of the Batasan# Pambansa shall
appear as counsel before an court without
appellate "urisdiction.
before an court in an civil case wherein the
3overnment, or an subdivision, a#enc, or
instrumentalit thereof is the adverse part,
or in an criminal case wherein an oFcer or
emploee of the 3overnment is accused of an
oGense committed in relation to his oFce,
or before any administratie body.
Neither shall he, directl or indirectl be
interested @nanciall in an contract with, or
in an franchise or special privile#e #ranted
b the 3overnment, or an subdivision,
a#enc or instrumentalit thereof, includin#
an #overnmentDowned or controlled
corporation, durin# his term of oFce.
He shall not accept emploment to intervene
in an cause or matter where he ma be
?
called to act on account of his oFce.
'Emphasis supplied(
<hat reall has to be resolved is whether or not, in
intervenin# in the %EC Case, Assemblman )ernande* is, in
eGect, appearin# as counsel, albeit indirectl, before an
administrative bod in contravention of the Constitutional
provision.
$rdinaril, b virtue of the Motion for !ntervention,
Assemblman )ernande* cannot be said to be appearin# as
counsel. $stensibl, he is not appearin# on behalf of
another, althou#h he is "oinin# the cause of the private
respondents. His appearance could theoreticall be for the
protection of his ownership of ten '+>( shares of !P! in
respect of the matter in liti#ation and not for the protection
of the petitioners nor respondents who have their respective
capable and respected counsel.
However, certain salient circumstances militate a#ainst the
intervention of Assemblman )ernande* in the %EC Case. He
had ac.uired a mere P?>>.>> worth of stoc6 in !P!,
representin# ten shares out of ?E?,;-9 outstandin# shares.
He ac.uired them :after the fact: that is, on Ma 9>, +7,7,
after the contested election of 0irectors on Ma +-, +7,7,
after the quo warranto suit had been @led on Ma ?=, +7,7
before %EC and one da before the scheduled hearin# of the
case before the %EC on Ma 9+, +7,7. And what is more,
before he moved to intervene, he had si#ni@ed his intention
to appear as counsel for respondent Eusta.uio T. C.
Acero,
2
but which was ob"ected to b petitioners. Reali*in#,
perhaps, the validit of the ob"ection, he decided, instead, to
:intervene: on the #round of le#al interest in the matter
under liti#ation. And it mabe noted that in the case @led
before the Ri*al Court of )irst !nstance '2D=+7?;(, he
appeared as counsel for defendant E&celsior, coDdefendant
of respondent Acero therein.
Ander those facts and circumstances, we are constrained to
@nd that there has been an indirect :appearance as counsel
before ... an administrative bod: and, in our opinion, that is
a circumvention of the Constitutional prohibition. The
:intervention: was an afterthou#ht to enable him to appear
activel in the proceedin#s in some other capacit. To
believe the avowed purpose, that is, to enable him
eventuall to vote and to be elected as 0irector in the event
of an unfavorable outcome of the %EC Case would be pure
naivete. He would still appear as counsel indirectl.
A rulin# upholdin# the :intervention: would ma6e the
constitutional provision ineGective. All an Assemblman
need do, if he wants to inIuence an administrative bod is
to ac.uire a minimal participation in the :interest: of the
client and then :intervene: in the proceedin#s. That which
the Constitution directl prohibits ma not be done b
indirection or b a #eneral le#islative act which is intended
to accomplish the ob"ects speci@call or impliedl
prohibited.
4
!n brief, we hold that the intervention of Assemblman
)ernande* in %EC. No. +,-, falls within the ambit of the
prohibition contained in %ection ++, Article 4!!! of the
Constitution.
$ur resolution of this case should not be construed as,
absent the .uestion of the constitutional prohibition a#ainst
members of the Batasan, allowin# an stoc6holder, or an
number of stoc6holders, in a corporation to intervene in an
controvers before the %EC relatin# to intraDcorporate
matters. A resolution of that .uestion is not necessar in
this case.
<HERE)$RE, respondent Commissioner8s $rder #rantin#
Att. Estanislao A. )ernande* leave to intervene in %EC Case
No. +,-, is hereb reversed and set aside. The temporar
Restrainin# $rder heretofore issued is hereb made
permanent.
9
No costs.
%$ $R0ERE0.
!ernando, ".J., #ee$an%ee, Ma%asiar, "once&cion, Jr.,
!ernande', (uerrero, )bad *antos, +e "astro, ,ricta, -lana
and ,scolin, JJ., concur.
113 *".) 31 / -olitical 0aw / #$e 0e1islatie +e&artment /
)&&earance in "ourt
!n Ma +7,7, Eu#enio Puat and his #roup were elected as
directors of the !nternational Pipe !ndustries. The election
was subse.uentl .uestioned b Eusta.uio Acero 'PuatJs
rival( claimin# that the votes were not properl counted K
hence he @led a quo warranto case before the %ecurities
and E&chan#e Commission '%EC( on Ma ?=, +7,7. Prior to
AceroJs @lin# of the case, Estanislao )ernande*, then a
member of the !nterim Batasan# Pambansa purchased ten
shares of stoc6 of !P! from a member of AceroJs #roup. And
durin# a conference held b %EC Commissioner %i&to de
3u*man, 1r. 'from Ma ?=D9+, +7,7( to have the parties
confer with each other, Estanislao )ernande* entered his
appearance as counsel for Acero. Puat ob"ected as he
ar#ued that it is unconstitutional for an assemblman to
appear as counsel 'to anone( before an administrative
bod 'such as the %EC(. This bein# cleared, )ernande*
inhibited himself from appearin# as counsel for Acero. He
instead @led an Ar#ent Motion for !ntervention in the said
%EC case for him to intervene, not as a counsel, but as a
le#al owner of !P! shares and as a person who has a le#al
interest in the matter in liti#ation. The %EC Commissioner
#ranted the motion and in eGect #rantin# )ernande* leave
to intervene.
ISSUE5 <hether or not )ernande*, actin# as a stoc6holder
of !P!, can appear and intervene in the %EC case without
violatin# the constitutional provision that an assemblman
must not appear as counsel in such courts or bodiesL
EL"5 No, )ernande* cannot appear before the %EC bod
under the #uise that he is not appearin# as a counsel. Even
thou#h he is a stoc6holder and that he has a le#al interest in
the matter in liti#ation he is still barred from appearin#. He
bou#ht the stoc6s before the liti#ation too6 place. 0urin#
the conference he presented himself as counsel but because
it is clearl stated that he cannot do so under the
constitution he instead presented himself as a part of
interest K which is clearl a wor6around and is clearl an act
after the fact. A mere wor6around to #et himself involved in
the liti#ation. <hat could not be done directl could not
li6ewise be done indirectl.

.ead full te2t
NOTE5 Ander %ection +-, Article 4! of the +7;, Constitution/
3o *enator or member of t$e 4ouse of .e&resentaties may
&ersonally a&&ear as counsel before any court of 5ustice or
before t$e ,lectoral #ribunals, or quasi-5udicial and ot$er
administratie bodies. 3eit$er s$all $e, directly or indirectly,
be interested 6nancially in any contract wit$, or in any
franc$ise or s&ecial &riile1e 1ranted by t$e (oernment, or
any subdiision, a1ency, or instrumentality t$ereof,
includin1 any 1oernment-owned or controlled cor&oration,
or its subsidiary, durin1 $is term of o7ce. 4e s$all not
interene in any matter before any o7ce of t$e (oernment
for $is &ecuniary bene6t or w$ere $e may be called u&on to
act on account of $is o7ce.
Appearance of the le#islator is now barred before all courts
of "ustice, re#ardless of ran6, composition, or "urisdiction.
The dis.uali@cation also applies to the revived Electoral
Tribunal and to all administrative bodies, li6e the %ecurities
and E&chan#e Commission and the National 2abor Relations
-
Commission. Courts martial and militar tribunals, bein#
administrative a#encies, are included.
')rom https/MMwww.senate.#ov.phMsenatorsMterms.asp,
accessed >7M+,M?>+-(


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