In my Oct. 31 column, I wrote about a Supreme Court case that used the pari delicto doctrine to prevent a broker from recovering the unpaid purchase price of stock market trades, which it made for a client in violation of the mandatory closeout rule under the Revised Securities Act (Abacus Securities Corp. vs. Ampil [483 SCRA 315, 27 February 2006]).
Can the case be applied to other market transactions, such as insider trading? For example, if an investor trades on the basis of nonpublic material information given to him by a listed company or his broker, and he sustains damages because the so-called inside information turns out to be false, can he sue them for damages? Can the company and broker raise the pari delicto defense to bar the client from recovering damages from them?
There is a precedent from the Supreme Court of the United States for this situation. In Bateman Eichler v. Berner (472 US 299 (1985]), Lazzaro, an employee of a stock brokerage firm (Bateman), falsely represented that he had some inside information on the growth prospects of a company. He induced several clients of Bateman to purchase stock in the company. The investors alleged that they inquired from the president of the company (Neadeau) whether Lazzaro’s tips were accurate. Neadeau stated that the information was “not public knowledge” and “would neither confirm nor deny those claims,” but allegedly advised clients that “Lazzaro was very trustworthy and a good man.”
Claiming that they incurred substantial trading losses as a result of the conspiracy between Lazzaro and Neadeau, the investors later sued for damages based on Rule 10b-5, which was the governing law for insider trading in the United States. Bateman contended that, since the clients had themselves attempted to trade based on insider, albeit incorrect, information, they were barred from recovering damages under the pari delicto defense.
The issue was whether the pari delicto defense precluded investors from suing the tipping insider for stock fraud.
Speaking through Justice Brennan, the US Supreme Court ruled that the pari delicto defense did not preclude the investors from suing the tipping insider and stockbroker for fraud. Traditionally, the defense precluded recovery by a wrongdoing plaintiff on the notion that courts should not lend aid to wrongdoers. However, the doctrine will not bar a suit where (1) the defendant’s wrongdoing equals or outweighs the plaintiff’s, and (2) allowing the suit will serve important public purposes.
The Supreme Court held that insiders and broker-dealers who selectively disclose material nonpublic information commit a potentially broader range of violations than the investors, or tippees, who trade on the basis of that information. A tippee trading on inside information will, almost always, be guilty of fraud against individual shareholders, a violation for which the tipper shares responsibility. But the insider, in disclosing such information, also breaches fiduciary duties toward the issuer itself.
The Court held that, denying the in pari delicto defense would best promote protection of the investing public and the national economy. First, it promotes the important goal of exposing wrongdoers. Second, deterrence of insider trading most frequently will be maximized by bringing enforcement pressures to bear on the sources of such information—corporate insiders and broker-dealers. Third, insiders and broker-dealers often will be more responsive to the deterrent pressures of potential sanctions. Finally, there are means other than the in pari delicto defense to deter tippee trading. Although there might well be situations in which the relative culpabilities of tippees and their sources merit a different mix of deterrent incentives, in cases such as the instant one, the public interest will most frequently be advanced if defrauded tippees are permitted to expose illegal practices by corporate insiders and broker-dealers.
Whether or not our courts of law will apply the Bateman decision in the Philippine context remains to be seen. As we lawyers know, foreign court decisions only have a persuasive, not binding, effect on Philippine courts.
(The author, formerly president and chief executive officer of the Philippine Stock Exchange, is now co-managing partner and head of corporate and special projects department of the Angara Abello Concepcion & Regala Law Offices (Accralaw). The views in this column are solely the author’s and should not in any way be attributed to Accralaw. The author may be contacted through email@example.com.)
A.C. No. 9698. November 13, 2013 Rolando E. Cawaling Vs. Napoleon M. Menese, et al. "x x x.
The pertinent portions of Sections 4 and 6, Rule VI of the Revised Rules of Procedure of the NLRC read: SECTION 4. REQUISITES FOR PERFECTION OF APPEAL – a) The appeal shall be: (1) filed within the reglementary period provided in Section 1 of this Rule; (2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; (3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; (4) in three (3) legibly typewritten or printed copies; and (5) accompanied by i) proof of payment of the required appeal fee and legal research fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.
SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The appeal bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive of damages and attorney’s fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court, and shall be accompanied by:
(a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case. (b) a copy of the indemnity agreement between the employer-appellant and bonding company; and (c) a copy of security deposit or collateral securing the bond.
A certified true copy of the bond shall be furnished by the appellant to the appellee who shall verify the regularity and genuineness thereof and immediately report to the Commission any irregularity.
Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall cause the immediate dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop the running of the period to perfect an appeal.7
In a nutshell, the rules are explicit that the filing of a bond for the perfection of an appeal is mandatory and jurisdictional. The requirement that employers post a cash or surety bond to perfect their appeal is apparently intended to assure workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the former’s appeal.
It was intended to discourage employers from using an appeal to delay, or even evade, their obligations to satisfy their employees' just and lawful claims. However, the whole essence of requiring the filing of bond is defeated if the bond issued turned out to be invalid due to the surety company's expired accreditation. x x x."
A.C. No. 7965. November 13, 2013 Azucena Segovia-Ribaya Vs. Atty. Bartolome C. Lawsin "x x x.
Anent respondent’s administrative liability, the Court agrees with the IBP that respondent’s failure to properly account for and duly return his client’s money despite due demand is tantamount to a violation of Rules 16.01 and 16.03, Canon 16 of the Code which respectively read as follows:
CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.
Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court.
Records disclose that respondent admitted the receipt of the subject amount from complainant to cover for pertinent registration expenses but posited his failure to return the same due to his client’s act of confronting him at his office wherein she shouted and called him names. With the fact of receipt being established, it was then respondent’s obligation to return the money entrusted to him by complainant. To this end, suffice it to state that complainant’s purported act of “maligning” respondent does not justify the latter’s failure to properly account for and return his client’s money upon due demand. Verily, a lawyer’s duty to his client is one essentially imbued with trust so much so that it is incumbent upon the former to exhaust all reasonable efforts towards its faithful compliance. In this case, despite that singular encounter, respondent had thereafter all the opportunity to return the subject amount but still failed to do so. Besides, the obligatory force of said duty should not be diluted by the temperament or occasional frustrations of the lawyer’s client, especially so when the latter remains unsatisfied by the lawyer’s work. Indeed, a lawyer must deal with his client with professional maturity and commit himself towards the objective fulfilment of his responsibilities. If the relationship is strained, the correct course of action is for the lawyer to properly account for his affairs as well as to ensure the smooth turn-over of the case to another lawyer. Except only for the retaining lien exception 23 under Rule 16.03, Canon 16 of the Code, the lawyer should not withhold the property of his client.
Unfortunately, absent the applicability of such exception or any other justifiable reason therefor, respondent still failed to perform his duties under Rules 16.01 and 16.03, 16 of the Code which perforce warrants his administrative liability.
The Court, however, deems it proper to increase the IBP’s recommended period of suspension from the practice of law from six (6) months to one (1) year in view of his concomitant failure to exercise due diligence in handling his client’s cause as mandated by Rules 18.03 and 18.04, Canon 18 of the Code:
CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable. Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client's request for information.
After a judicious scrutiny of the records, the Court observes that respondent did not only accomplish his undertaking under the retainer, but likewise failed to give an adequate explanation for such non-performance despite the protracted length of time given for him to do so. As such omissions equally showcase respondent’s non-compliance with the standard of proficiency required of a lawyer as embodied in the above-cited rules, the Court deems it apt to extend the period of his suspension from the practice of law from six (6) months to one (1) year similar to the penalty imposed in the case of Del Mundo v. Capistrano.24
As a final point, the Court must clarify that the foregoing resolution should not include a directive for the return of the amount of P31,500.00 as recommended by the IBP Board of Governors. The same amount was given by complainant to respondent to cover for registration expenses; hence, its return partakes the nature of a purely civil liability which should not be dealt with during an administrative-disciplinary proceeding. In Tria-Samonte v. Obias,25 the Court recently held that its “findings during administrative disciplinary proceedings have no bearing on the liabilities of the parties involved which are purely civil in nature – meaning, those liabilities which have no intrinsic link to the lawyer's professional engagement – as the same should be threshed out in a proper proceeding of such nature.” This pronouncement the Court applies to this case and thus, renders a disposition solely on respondent’s administrative liability.
G.R. No. 208566/G.R. No. 208493/G.R. No. 209251. November 11, 2013 Greco Antonious Beda B. Belgica, et al. Vs. Hon. Executive Secretary Paquito N. Ochoa, Jr, et al./Social Justice Society (SJS) President Samson S. Alcantara Vs. Hon. Franklin M. Drilon, etc., et al./Pedrito M. Nepomuceno, etc. Vs. President Benigno Simeon C. Aquino III, et al. Concurring Opinion - C.J. Sereno, J. Carpio, J. Leonen. Concurring and Dissenting Opinion - J. Brion.
"x x x.
The Issues Before the Court -
Based on the pleadings, and as refined during the Oral Arguments, the
following are the main issues for the Court‘s resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable controversy; (b) the issues raised in the consolidated petitions are matters of policy not subject to judicial review; (c) petitioners have legal standing to sue; and (d) the Court‘s Decision dated August 19, 1994 in G.R. Nos. 113105, 113174, 113766, and 113888, entitled ―Philippine Constitution Association v. Enriquez‖114 (Philconsa) and Decision dated April 24, 2012 in G.R. No. 164987, entitled ―Lawyers Against Monopoly and Poverty v. Secretary of Budget and Management‖115 (LAMP) bar the relitigation of the issue of constitutionality of the ―Pork Barrel System‖ under the principles of res judicata and stare decisis.
II. Substantive Issues on the “Congressional Pork Barrel.”
Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar thereto are unconstitutional considering that they violate the principles of/constitutional provisions on (a) separation of powers; (b) non-delegability of legislative power; (c) checks and balances; (d) accountability; (e) political dynasties; and (f) local autonomy.
III. Substantive Issues on the “Presidential Pork Barrel.”
Whether or not the phrases (a) ―and for such other purposes as may be hereafter directed by the President‖ under Section 8 of PD 910,116 relating to the Malampaya Funds, and (b) ―to finance the priority infrastructure development projects and to finance the restoration of damaged or destroyed facilities due to calamities, as may be directed and authorized by the Office of the President of the Philippines‖ under Section 12 of PD 1869, as amended by PD 1993, relating to the Presidential Social Fund, are unconstitutional insofar as they constitute undue delegations of legislative power.
These main issues shall be resolved in the order that they have been
stated. In addition, the Court shall also tackle certain ancillary issues as
prompted by the present cases.
x x x.
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby
declares as UNCONSTITUTIONAL:
(a) the entire 2013 PDAF Article;
(b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which authorize/d legislators – whether individually or collectively organized into committees – to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight;
(c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which conferred personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine;
(d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction; and
(e) the phrases (1) ―and for such other purposes as may be hereafter directed by the President‖ under Section 8 of Presidential Decree No. 910 and (2) ―to finance the priority infrastructure development projects under Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of non-delegability of legislative power.
Accordingly, the Court‘s temporary injunction dated September 10, 2013 is hereby declared to be PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for the year 2013, as well as for all previous years, and the funds sourced from (1) the Malampaya Funds under the phrase ―and for such other purposes as may be hereafter directed by the President‖ pursuant to Section 8 of Presidential Decree No. 910, and (2) the Presidential Social Fund under the phrase ―to finance the priority infrastructure development projects‖ pursuant to Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, which are, at the time this Decision is promulgated, not covered by Notice of Cash Allocations (NCAs) but only by Special Allotment Release Orders (SAROs), whether obligated or not, are hereby ENJOINED. The remaining PDAF funds covered by this permanent injunction shall not be disbursed/released but instead reverted to the unappropriated surplus of the general fund, while the funds under the Malampaya Funds and the Presidential Social Fund shall remain therein to be utilized for their respective special purposes not otherwise declared as unconstitutional.
On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby DENIES petitioners‘ prayer seeking that
the Executive Secretary and/or the Department of Budget and Management be ordered to provide the public and the Commission on Audit complete lists/schedules or detailed reports related to the availments and utilization of the funds subject of these cases.
Petitioners‘ access to official documents already available and of public record which are related to these funds must, however, not be prohibited but merely subjected to the custodian‘s reasonable regulations or any valid statutory prohibition on the same. This denial is without prejudice to a proper mandamus case which they or the Commission on Audit may choose to pursue through a separate petition.
The Court also DENIES petitioners' prayer to order the inclusion of
the funds subject of these cases in the budgetary deliberations of Congress as the same is a matter left to the prerogative of the political branches of
Finally, the Court hereby DIRECTS all prosecutorial organs of the
government to, within the bounds of reasonable dispatch, investigate and accordingly prosecute all government officials and/or private individuals for possible criminal offenses related to the irregular, improper and/or unlawful disbursement/utilization of all funds under the Pork Barrel System.
This Decision is immediately executory but prospective in effect.
MANILA, Philippines—It will be difficult to reconstitute the records of pending cases in courts that have been battered by monster typhoon Yolanda (international name Haiyan), an official from the Department of Justice (DOJ) said Thursday.
Prosecutor General Claro Arellano said the Hall of Justice in Tacloban, Leyte alone was totally damaged by the typhoon.
“Our chance is to be able to reconstitute the records of the cases from the parties but that too will be difficult,” Arellano said.
The prosecutors’ office is housed at the Bulwagan ng Katarungan Compound in Tacloban, Leyte. Arellano said, a staff and wife of a prosecutor were reported to among the typhoon fatalities.
The Office of the Prosecutors will resume work on Monday.
“We are preparing to send typewriters and other supplies to them,” Chief Prosecutors Association (CIPROSA) head and Manila Chief Prosecutor Edward Togonon said.
The prosecutors have sent a second batch of assistance to affected prosecutors and staff this week—two trucks of relief goods and clothes, said Togonon.
Arellano said the trucks left via Batangas port Friday and arrived in Tacloban Wednesday.
As early as 1994, the constitutionality of the pork barrel, then called the Countrywide Development Fund (CDF), was challenged on the ground of violation of the rule that, although appropriating money is the function of Congress, spending it is the prerogative of the executive branch.
The Supreme Court ruled in favor of the CDF. It said that what the law allowed members of Congress to do was simply to recommend projects. If the recommended projects qualified for funding under the CDF, it was the President who would implement them.
Prior to the approval of the 1994 General Appropriations Act (GAA), pork barrel, which was recognized by the 1935 Constitution as a legitimate institution, had not received much attention. In the years from 1972 to 1986, there was no talk about pork barrel. But those were unusual years because, for all practical purposes, President Ferdinand Marcos controlled the national treasury, both pork and beef.
After the restoration of democratic processes and in the years from 1986 to 1993, pork barrel was not a hot subject of debate. It was only after the approval of the 1994 GAA that pork barrel became a frequent front-page subject for heated discussion.
What was it in the 1994 GAA that invited debate?
Earlier pork barrel laws specifically stated that the money could be released only with the approval of the President, and that the budget secretary should promulgate rules and regulations for pork barrel funds. For as long as this was followed, there was no problem. However, such requirements were removed by the 1994 GAA, Republic Act No. 7663.
RA 7663 simply said: “The fund shall be automatically released quarterly by way of Advice of Allotments and Notice of Cash Allocation directly to the assigned implementing agency not later than five (5) days after the beginning of each quarter upon submission of the list of projects and activities by the officials concerned.”
Who are these “officials concerned”? They are senators, representatives, and the Vice President. In effect, RA 7663 gave to the members of Congress control over the release of approved funds.
Whereas under the Constitution it is the President, either directly or through executive agencies, who should control the release of funds, the executive agencies awaited the go-signal of the members of Congress before they could release the funds for the projects recommended by the members of Congress.
The decision Tuesday of the Supreme Court restores the normal constitutional order of handling public money. The first destination of money coming in for the public, either as taxes or other forms of income, is the public treasury. And such money stays in the treasury until Congress determines how it is to be used.
As the Constitution says, “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” The appropriation can be either through the general appropriations law or through special appropriations. This provision prevents members of Congress, and the President, from indiscriminately spending unappropriated money.
Now that we have the Supreme Court decision, unappropriated and unspent money will have to be returned to the general coffers of government “except for the funds covered by the Malampaya Fund and the Presidential Social Fund, which shall remain therein to be utilized for their respective special purposes not otherwise declared unconstitutional.”
Effect on President
What effect will this decision have on President Aquino’s capacity to meet emergency situations? I do not know how much money the President has in the contingency provisions for him in the general appropriations law.
Does he have the resources needed to deal with the effects of the October earthquake in Bohol and now also with the ravages caused by Supertyphoon “Yolanda?” At the rate the President is reassuring the survivors of the ravages caused by nature, he probably is confident that he has the resources. If needed, he can call Congress to a special session to appropriate what more is required.
The beneficiaries of the pork barrel will probably be unhappy with the high court’s decision. Many of them really needed what the pork barrel system had given them. That need of many remains.
The challenge now is for Congress and for the President to devise something constitutional to fill the vacuum left by the Supreme Court’s decision declaring pork barrel unconstitutional.
In a landmark decision that could spell the end of political patronage, the Supreme Court on Tuesday declared unconstitutional past and present congressional pork barrel laws as it ordered the criminal prosecution of individuals who had benefited from the schemes over the past two decades.
The high court, voting 14-0-1, also struck down the discretionary provisions granted the President in the use of multibillion-peso oil revenues from the Malampaya Fund and the Presidential Social Fund—the government share of revenues from the Philippine Amusement and Gaming Corp. (Pagcor).
In declaring unconstitutional the provisions on the Priority Development Assistance Fund (PDAF) in the 2013 General Appropriations Act (GAA) and its earlier incarnation, the 1990 Countrywide Development Fund (CDF), the high tribunal held that these arrangements violated the principle of separation of powers.
Reversing itself after thrice upholding the legality of the lawmakers’ pork barrel, the court said that this time it simply “allowed legislators to wield, in varying gradations, nonoversight, postenactment authority in vital areas of budget execution” and denied the President the power to veto items in the GAA.
The ruling was issued four months after the Inquirer broke the story that P10 billion in allocations from the PDAF and the Malampaya Fund meant to ease rural poverty and the plight of storm victims over the past 10 years had gone to ghost projects and massive kickbacks.
“This will surely hurt the presidency,” said Ramon Casiple, executive director of the Institute for Political and Electoral Reforms. “It means it will be very difficult for the executive and legislative branches to create discretionary funds.”
Western Samar Rep. Mel Senen Sarmiento said political patronage would have little influence now during elections. “Little by little, I hope we come to a time where people will vote based on performance.”
In its three-page ruling, the Supreme Court declared unconstitutional the following laws and practices:
– “All legal provisions of past and present congressional pork barrel laws … which authorized legislators—whether individually or collectively organized into committees—to intervene, assume or participate in any of the various postenactment identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight.
– “All legal provisions of past and present congressional pork barrel laws, such as the previous PDAF and CDF articles and the various congressional insertions, which conferred personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine.
– “All informal practices of similar import and effect, which the court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of discretion.
– “The phrases (1) ‘and for such other purposes as may be hereafter directed by the President’ under Section 8 of Presidential Decree No. 910” on the use of the Malampaya Fund other than for energy development and (2) “to finance the priority infrastructure development projects” under Section 12 of PD 1869, as amended by PD 1993, for both failing the sufficient standard test in violation of the principle of nondelegability of legislative power.”
The two presidential decrees refer to a portion of revenues from Pagcor to fund projects ranging from flood control to beautification and healthcare in Metropolitan Manila authorized by the President.
The court said a temporary restraining order issued on Sept. 10 covering the remaining PDAF allocations for the rest of the year—roughly P12 billion—and those from previous years had become permanent. It said these funds, along with the Pagcor resources, should be returned to the Treasury.
A Pagcor statement said that for the first nine months of this year, it remitted to Malacañang P2 billion of its earnings. According to the Department of Energy, the Malampaya Fund amounted to P132 billion as of June 30. It was P70 billion when President Aquino assumed office.
The Supreme Court likewise directed the government to investigate and prosecute all government officials and private individuals who have irregularly, improperly or unlawfully disbursed funds under the pork barrel system.
Associate Justice Estela Bernabe wrote the ruling. Associate Justice Presbitero Velasco Jr. inhibited himself from the decision, saying his son is a congressman.
The National Bureau of Investigation has filed a complaint for plunder in the Office of the Ombudsman against businesswoman Janet Lim-Napoles and Senators Juan Ponce Enrile, Jinggoy Estrada and Ramon Revilla Jr. in connection with the P10-billion pork barrel scam. They all have denied any wrongdoing.
Former President and now Pampanga Rep. Gloria Macapagal-Arroyo and three of her Cabinet secretaries were also named recently in another plunder complaint in connection with the alleged wholesale theft of P900 million from the Malampaya Fund meant for victims of Tropical Storms “Ondoy” and “Pepeng” in 2009.
“We thought we won,” said Solicitor General Francis Jardeleza. The government respects the court ruling, he told reporters before attending oral arguments on petitions questioning in the Supreme Court the constitutionality of the Disbursement Acceleration Program—an impounding mechanism for government savings.
Jardeleza had pleaded for the retention of the congressional pork, saying that half a million students and a similar number of indigent patients were depending on the lawmakers for their continued enrollment and healthcare.
Budget Secretary Florencio Abad said he wanted to see the full decision to determine if there was still a way to make use of the pork barrel funds.—With a report from Leila B. Salaverria and AFP
Attorney; Attorney-client relationship. Respondent Atty. Ramon SG Cabanes, Jr. was charged for gross negligence in violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility. The Supreme Court held him guilty of gross negligence. The relationship between an attorney and his client is one imbued with utmost trust and confidence. In this light, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the required degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high standard of legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its importance and whether he accepts it for a fee or for free. A lawyer’s duty of competence and diligence includes not merely reviewing the cases entrusted to the counsel’s care or giving sound legal advice, but also consists of properly representing the client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, prosecuting the handled cases with reasonable dispatch, and urging their termination without waiting for the client or the court to prod him or her to do so. While such negligence or carelessness is incapable of exact formulation, the Court has consistently held that the lawyer’s mere failure to perform the obligations due his client is per se a violation. Thus, the court suspended respondent for six (6) months. Josefina Caranza Vda de Saldivar v. Atty. Ramon SG Cabanes, Jr., A.C. No. 7749, July 8, 2013
Attorney; Conflict of interest. The rule prohibiting conflict of interest was fashioned to prevent situations wherein a lawyer would be representing a client whose interest is directly adverse to any of his present or former clients. In the same way, a lawyer may only be allowed to represent a client involving the same or a substantially related matter that is materially adverse to the former client only if the former client consents to it after consultation. The rule is grounded in the fiduciary obligation of loyalty. Throughout the course of a lawyer-client relationship, the lawyer learns all the facts connected with the client’s case, including the weak and strong points of the case. Knowledge and information gathered in the course of the relationship must be treated as sacred and guarded with care. It behooves lawyers not only to keep inviolate the client’s confidence, but also to avoid the appearance of treachery and double-dealing, for only then can litigants be encouraged to entrust their secrets to their lawyers, which is paramount in the administration of justice. The nature of that relationship is, therefore, one of trust and confidence of the highest degree.
Contrary to Atty. Era’s ill-conceived attempt to explain his disloyalty to Samson and his group, the termination of the attorney-client relationship does not justify a lawyer to represent an interest adverse to or in conflict with that of the former client. The spirit behind this rule is that the client’s confidence once given should not be stripped by the mere expiration of the professional employment. Even after the severance of the relation, a lawyer should not do anything that will injuriously affect his former client in any matter in which the lawyer previously represented the client. Nor should the lawyer disclose or use any of the client’s confidences acquired in the previous relation. Thus, Atty. Era was found guilty of Rule 15.03 of Canon 15 and Canon 17 of the Code of Professional Responsibility and was suspended from the practice of law for two (2) years. Ferdinand A. Samson v. Atty. Edgardo O. Era, A.C. No. 6664, July 16, 2013.
Attorney; Disbarment and suspension of lawyers; Burden of proof. The burden of proof in disbarment and suspension proceedings always rests on the shoulders of the complainant. The Court exercises its disciplinary power only if the complainant establishes the complaint by clearly preponderant evidence that warrants the imposition of the harsh penalty. As a rule, an attorney enjoys the legal presumption that he is innocent of the charges made against him until the contrary is proved. An attorney is further presumed as an officer of the Court to have performed his duties in accordance with his oath. In this case, complainants failed to discharge their burden of proving that respondents ordered their secretary to stamp a much later date instead of the actual date of receipt for the purpose of extending the ten-day period within which to file a Motion for Reconsideration under the NLRC Rules of Procedure. Such claim is merely anchored on speculation and conjecture and not backed by any clear preponderant evidence necessary to justify the imposition of administrative penalty on a member of the Bar. Jaime Joven and Reynaldo C. Rasing v. Atty. Pablo R. Cruz and Frankie O. Magsalin III, A.C. No. 7686, July 31, 2013.
Attorney; Honesty; Practice of law is not a right but a privilege. Lawyers are officers of the court, called upon to assist in the administration of justice. They act as vanguards of our legal system, protecting and upholding truth and the rule of law. They are expected to act with honesty in all their dealings, especially with the court. Verily, the Code of Professional Responsibility enjoins lawyers from committing or consenting to any falsehood in court or from allowing the courts to be misled by any artifice. Moreover, they are obliged to observe the rules of procedure and not to misuse them to defeat the ends of justice. Indeed, the practice of law is not a right but merely a privilege bestowed upon by the State upon those who show that they possess, and continue to possess, the qualifications required by law for the conferment of such privilege. One of those requirements is the observance of honesty and candor. Candor in all their dealings is the very essence of a practitioner’s honorable membership in the legal profession. Lawyers are required to act with the highest standard of truthfulness, fair play and nobility in the conduct of litigation and in their relations with their clients, the opposing parties, the other counsels and the courts. They are bound by their oath to speak the truth and to conduct themselves according to the best of their knowledge and discretion, and with fidelity to the courts and their clients. Sonic Steel Industries, Inc. v. Atty. Nonnatus P. Chua, A.C. No. 6942, July 17, 2013.
Court personnel; Gross dishonesty; Misrepresentation of eligibility; Penalty. Respondent, a court stenographer III, was charged with gross dishonesty in connection with her Civil Service eligibility where she was accused of causing another person to take the Civil Service Eligibility Examination in her stead. Before the Decision was imposed, however, respondent already resigned. The Supreme Court held that the respondent’s resignation from the service did not cause the Court to lose its jurisdiction to proceed against her in this administrative case. Her cessation from office by virtue of her intervening resignation did not warrant the dismissal of the administrative complaint against her, for the act complained of had been committed when she was still in the service. Nor did such cessation from office render the administrative case moot and academic. Otherwise, exacting responsibility for administrative liabilities incurred would be easily avoided or evaded.
Respondent’s dismissal from the service is the appropriate penalty, with her eligibility to be cancelled, her retirement benefits to be forfeited, and her disqualification from re-employment in the government service to be perpetual. Her intervening resignation necessarily means that the penalty of dismissal could no longer be implemented against her. Instead, fine is imposed, the determination of the amount of which is subject to the sound discretion of the Court. Concerned Citizen V. Nonita v. Catena, Court Stenographer III, RTC, Br. 50, Puerto Princesa, Palawan, A.M. OCA IPI No. 02-1321-P, July 16, 2013.
Court personnel; Misconduct; Penalty under the Revised Rules on Administrative Cases in the Civil Service; Effect of death in an administrative case. Misconduct is “a transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behavior, wilful in character, improper or wrong behavior.” A misconduct is “grave” or gross” if it is “out of all measure; beyond allowance; flagrant; shameful” or “such conduct as is not to be excused.” Respondent Ong’s and Buencamino’s acts of using the levied car for personal errands and losing it while under their safekeeping constitute grave misconduct and gross neglect of duty. These are flagrant and shameful acts and should not be countenanced. Respondents’ acts warrant the penalty of dismissal as provided in Rule 10, Section 46 of the Revised Rules on Administrative Cases in the Civil Service. As for respondent Buencamino, his death is not a ground for the dismissal of the Complaint against him. Respondent Buencamino’s acts take away the public’s faith in the judiciary, and these acts should be sanctioned despite his death.
Sheriffs are reminded that they are “repositories of public trust and are under obligation to perform the duties of their office honestly, faithfully, and to the best of their abilities.” Being “frontline officials of the justice system,” sheriffs and deputy sheriffs “must always strive to maintain public trust in the performance of their duties.” Office of the Court Administrator v. Noel R. Ong, Deputy Sheriff, Br. 49, et al., A.M. No. P-09-2690, July 9, 2013.
Court personnel; Simple neglect of duty; Penalty under the Uniform Rules on Administrative Cases; Mitigating circumstances. The Development Bank of the Philippines (DBP) charged respondent Sheriff lV Famero with Gross Neglect of Duty amounting to Gross Misconduct for refusing to implement the Writ of Execution issued in a civil case involving DBP. The Supreme Court held that the respondent cannot fully be excused for his failure to make periodic reports in the proceedings taken on the writ, as mandated by Section 14, Rule 39 of the Rules of Court.
For the respondent’s lapses in the procedures in the implementation of the writ of execution, he was found guilty of simple neglect of duty, defined as the failure of an employee to give attention to the task expected of him. Under Section 52(B)(1) of the Uniform Rules on Administrative Cases in the Civil Service, simple neglect of duty is a less grave offense punishable by suspension from office for one (1) month and one (1) day to six (6) months for the first offense, and dismissal for the second offense. In the imposition of the appropriate penalty, Section 53 of the same Rules allows the disciplining authority to consider mitigating circumstances in favor of the respondent. The court considered his length of service in the Judiciary, acknowledgment of infractions, remorse and other family circumstances, among others, in determining the proper penalty. He was also found to be entitled to the following mitigating circumstances: (1) his more than 24 years of service in the Judiciary; (2) a clear record other than for the present infraction which is his first offense, (3) the resistance of the informal settlers to leave the property; (4) fear for his life; and (5) his well-grounded recognition that he could not undertake any demolition without the appropriate court order. After considering the attendant facts and the mitigating circumstances, the court also considered that the efficiency of court operations may ensue if the respondent’s work were to be left unattended by reason of his suspension. Thus, he was imposed the penalty of fine instead of suspension from service. Development Bank of the Philippines, etc. Vs. Damvin V. Famero, Sheriff IV, RTC, Br. 43, Roxas, Oriental Mindoro, A.M. No. P-0-2789, July 31, 2013.
Judge; Gross Inefficiency; Duties include prompt disposition or resolution of cases. As a frontline official of the Judiciary, a trial judge should always act with efficiency and probity. He is duty-bound not only to be faithful to the law, but also to maintain professional competence. The pursuit of excellence ought always to be his guiding principle. Such dedication is the least that he can do to sustain the trust and confidence that the public have reposed in him and the institution he represents.
The Court cannot overstress its policy on prompt disposition or resolution of cases. Nonetheless, the Court has been mindful of the plight of our judges and understanding of circumstances that may hinder them from promptly disposing of their businesses. Hence, the Court has allowed extensions of time to decide cases beyond the 90-day period. All that a judge needs to do is to request and justify an extension of time to decide the cases, and the Court has almost invariably granted such request. Judge Carbonell’s failure to decide several cases within the reglementary period, without justifiable and credible reasons, constituted gross inefficiency. Considering that Judge Carbonell has retired due to disability, his poor health condition may have greatly contributed to his inability to efficiently perform his duties as a trial judge. That mitigated his administrative liability, for which reason the Court reduced the recommended penalty of fine from P50,000 to P20,000. Re: Failure of Former Judge Antonio A. Carbonell to Decide Cases Submitted for Decision and Resolve Pending Motions in the RTC, Branch 27, San Fernando, La Union, A.M. No. 08-5-305-RTC, July 9, 2013.
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Under the 2005 United Nations Convention Against Corruption (UNCAC) and the 1980 Vienna Convention on Law of Treaties, the Philippines is obliged to cancel the passport of senators and representatives charged with plunder by the NBI before the Ombudsman. Let us assume for the sake of argument that there is a conflict between, on the one hand, a treaty to which the Philippines is a party; and on the other hand, a Philippine law. The conflict is resolved by the Philippine Constitution, which provides that the Philippines adopts the generally accepted principles of international law as part of the law of the land. This is because the phrase “part of the law of the land” means that a treaty to which the Philippines is a party should be applied as if it were a law passed by Congress.
As provided by the UNCAC, Art. 30, para. 3, party-states are obliged to maximize the effectiveness of law enforcement measures relating to corruption. The UNCAC preamble – considered to be an aid in the interpretation of the substantive provisions of the treaty – is premised on the need to stop corruption, particularly cases “that involve vast quantities of assets, which may constitute a substantial proportion of the resources of States, and that threaten the political stability and sustainable development of those States. The plunder cases undergoing preliminary investigation involve vast quantities of assets, including P10 billion.
In the interest of national security, the state is not immobilized by its own domestic law to allow persons in interest to morph into fugitives from justice before taking what could be a futile action. By analogy, in international law, the early cancellation of a passport by government, is an act of preemptive self-defense. You don’t wait for a shot to be fired before you press the trigger. x x x."