April 2005 - Philippine Supreme Court Decisions/Resolutions
Philippine Supreme Court Jurisprudence
PCGG v. Sandiganbayan : 151809-12 : April 12, 2005 : J. Carpio-Morales : En Banc : Dissenting Opinion
EN BANC
[G.R. NOS. 151809-12. April 12, 2005]
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, v. SANDIGANBAYAN (Fifth Division), LUCIO C. TAN, CARMEN KHAO TAN, FLORENCIO T. SANTOS, NATIVIDAD P. SANTOS, DOMINGO CHUA, TAN HUI NEE, MARIANO TAN ENG LIAN, ESTATE OF BENITO TAN KEE HIONG (represented by TARCIANA C. TAN), FLORENCIO N. SANTOS, JR., HARRY C. TAN, TAN ENG CHAN, CHUNG POE KEE, MARIANO KHOO, MANUEL KHOO, MIGUEL KHOO, JAIME KHOO, ELIZABETH KHOO, CELSO RANOLA, WILLIAM T. WONG, ERNESTO B. LIM, BENJAMIN T. ALBACITA, WILLY CO, ALLIED BANKING CORP., ALLIED LEASING AND FINANCE CORPORATION, ASIA BREWERY, INC., BASIC HOLDINGS CORP., FOREMOST FARMS, INC., FORTUNE TOBACCO CORP., GRANDSPAN DEVELOPMENT CORP., HIMMEL INDUSTRIES, IRIS HOLDINGS AND DEVELOPMENT CORP., JEWEL HOLDINGS, INC., MANUFACTURING SERVICES AND TRADE CORP., MARANAW HOTELS AND RESORT CORP., NORTHERN TOBACCO REDRYING PLANT, PROGRESSIVE FARMS, INC., SHAREHOLDINGS, INC., SIPALAY TRADING CORP., VIRGO HOLDINGS & DEVELOPMENT CORP., and ATTY. ESTELITO P. MENDOZA, Respondents.
DISSENTING OPINION
CARPIO-MORALES, J.:
While I concur in the scholarly and ably-written dissent of Justice Romeo J. Callejo, Sr., I feel compelled to write a separate dissenting opinion to reflect the additional reasons behind my position.
Justices Artemio V. Panganiban and Angelina Sandoval-Gutierrez are of the opinion that the petition can be dismissed on procedural grounds, they contending that the Presidential Commission on Government (PCGG) is precluded from filing a motion to disqualify Atty. Estelito P. Mendoza as counsel in Civil Case Nos. 0096 since the Sandiganbayan (Second Division) had already denied PCGG's motion to disqualify Atty. Mendoza as counsel in Civil Case No. 0005. In short, they are invoking the doctrines of conclusiveness of judgment and law of the case.
I believe Kilosbayan, Incorporated v. Morato1 penned by the distinguished Justice Vicente V. Mendoza is instructive.
To recall, Kilosbayan, Incorporated (Kilosbayan, Inc.), et al. filed on January 28, 1994 a petition with this Court challenging the validity of the Contract of Lease between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) on the ground that the same was made in violation of the charter of the PCSO. This Court in Kilosbayan, Incorporated v. Guingona, Jr.2 invalidated the contract.
One of the issues raised before this Court in Kilosbayan, Incorporated v. Guingona, Jr. was the standing of petitioners to maintain the suit. On that score, this Court held through Associate Justice (now Chief Justice) Hilario G. Davide, Jr. that petitioners had standing to sue.
As a result of the decision in Kilosbayan, Incorporated v. Guingona, Jr., PCSO and PGMC entered into negotiations for a new agreement which would conform to the Court's decision.
On January 25, 1995, PCSO and PGMC signed an Equipment Lease Agreement (ELA).
On February 21, 1995, Kilosbayan, Inc, et al. filed a petition against then PCSO Chair Manuel Morato seeking to declare the ELA invalid on the ground that it was substantially the same as the Contract of Lease nullified in Kilosbayan, Incorporated v. Guingona, Jr.
Its ruling in Kilosbayan, Incorporated v. Guingona, Jr. notwithstanding, this Court in Kilosbayan, Incorporated v. Morato ruled that the therein petitioners did not have standing to sue.
It explained that the doctrines of law of the case and conclusiveness of judgment do not pose a barrier to the determination of petitioners' right to maintain the suit:
Petitioners argue that inquiry into their right to bring this suit is barred by the doctrine of 'law of the case. We do not think this doctrine is applicable considering the fact that while this case is a sequel to G.R. No. 113375, it is not its continuation: The doctrine applies only when a case is before a court a second time after a ruling by an appellate court. Thus in People v. Pinuila, 103 Phil. 992 999 (1958), it was stated:
Law of the case has been defined as the opinion delivered on a former appeal. More specifically, it means that whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of these case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be facts of the case before the court. (21 C.J.S. 330)
It may be stated as a rule of general application that, where the evidence on a second or succeeding appeal is substantially the same as that on the first or preceding appeal, all matters, questions, points, or issues adjudicated on the prior appeal are the law of the case on all subsequent appeals and will not be considered or re-adjudicated therein. (5 C.J.S. 1267)
In accordance with the general rule stated in Section 1821, where after a definite determination, the court has remanded the cause for further action below, it will refuse to examine question other than those arising subsequently to such determination and remand, or other than the propriety of the compliance with its mandate; and if the court below has proceeded in substantial conformity to the directions of the appellate court, its action will not be questioned on a second appeal. ..
As a general rule a decision on a prior appeal of the same is held to be the law of the case whether that decision is right or wrong, the remedy of the party deeming himself aggrieved to seek a rehearing. (5 C.J.S. 1276-77)
Questions necessarily involved in the decision on a former appeal will be regarded as the law of the case on a subsequent appeal, although the questions are not expressly treated in the opinion of the court, as the presumption is that all the facts in the case bearing on the point decided have received due consideration whether all or none of them are mentioned in the opinion. (5 C.J.S. 1286-87)
As this Court explained in another case. 'The law of the case, as applied to a former decision of an appellate court, ,merely expresses the practice of the courts in refusing to reopen what has been decided. It differs from res judicata in that the conclusive of the first judgment is not dependent upon its finality. The first judgment is generally, if not universally, not final, It relates entirely to questions of law, and is confined in its questions of law, and is confined in its operation to subsequent proceedings in the same case. .. . (Municipality of Daet v. Court of Appeals, 93 SCRA 503, 521 (1979))
It follows that since the present case is not the same one litigated by he parties before in G.R. No. 113375, the ruling there cannot in any sense be regarded as 'the law of this case. The parties are the same but the cases are not.
Nor is inquiry into petitioners; right to maintain this suit foreclosed by the related doctrine of 'conclusiveness of judgment.3 According to the doctrine, an issue actually and directly passed upon and determined in a former suit cannot again be drawn in question in any future action between the same parties involving a different of action. (Pealosa v. Tuason, 22 Phil. 303, 313 (1912); Heirs of Roxas v. Galido, 108. 582 [1960])
It has been held that the rule on conclusiveness of judgment or preclusion of issues or collateral estoppel does not apply to issues of law, at least when substantially unrelated claims are involved. (Montana v. United States, 440 U.S. 147, 162, 59 L. Ed. 2d 210, 222 (1979); BATOR, MELTZER, MISHKIN AND SHAPIRO, THE FEDERAL COURTS AND THE FEDERAL SYSTEM 1058, n. 2 (3rd Ed., 1988)) Following this ruling it was held in Commissioner v. Sunnen, 333 U.S. 591, 92 L. Ed. 898 (1947) that where a taxpayer assigned to his wife interest in a patent in 1928 and in a suit it was determined that the money paid to his wife for the years 1929-1931 under the 1928 assignment was not part of his taxable income, this determination is not preclusive in a second action for collection of taxes on amounts to his wife under another deed of assignment for other years (1937 to 1941). For income tax purposes what is decided with respect to one contract is not conclusive as to any other contract which was not then in issue, however similar or identical it may be. The rule on collateral estoppel it was held, 'must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first preceding and where the controlling facts and applicable legal rules remain unchanged. (333 U.S. at 599-600, 92 L. Ed. at 907) Consequently, "if the relevant facts in the two cases are separate even though they may be similar or identical, collateral estoppel does not govern the legal issues which occur in the second case. Thus the second proceeding may involve an instrument or transaction identical with but in a form separable form, the one dealt with in the first proceeding. In that situation a court is free in the second proceeding to make an independent examination of the legal matters at issue.. .. (333 U.S. at 601, 92 L. Ed. at 908)
This exception to the General Rule of the Issue Preclusion is authoritatively formulated in Restatement of the Law 2d, on Judgments, as follows:
28. Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:
.. ..
(2) The issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws;. ..
Illustration:
.. ..
2. A brings an action against the municipality of B for tortious injury. The court sustain B's defense of sovereign immunity and dismisses the action. Several years later A brings the second action against B for an unrelated tortious injury occurring after the dismissal. The judgment in the first action is not conclusive on the question whether the defense immunity is available to B. Note: The doctrine of stare decisis may lead the court to refuse to reconsider the question of sovereign immunity. See '29, Comment i.
The question whether the petitioners have standing to question the Equipment or ELA is a legal question. As will presently be shown, the ELA, which the petitioners seek to declare invalid in this proceeding, is essentially different from the 1993 Contract of lease entered into by the PCSO with the PGMC. Hence the determination in the prior case (G.R. No. 113375) that the petitioner had standing to challenge the validity of the 1993 Contract of Lease of the parties does not preclude determination of their standing in the present suit. (Emphasis and underscoring supplied; italics in the original)
The doctrine of law of the case does not, I believe, apply to the present case for this is the first time that the issue to disqualify Atty. Mendoza has been elevated before this Court. It is the decision in this case which will be the law of the case. A reading of Republic v. Sandiganbayan 4 cited by Justice Sandoval-Gutierrez shows that the issue currently before this Court was not passed upon. Thus, this Court in Republic v. Sandiganbayan stated:
The key issues, in query form, are:
(1) Was the SANDIGANBAYAN's denial of the PCGG's motion to dismiss proper?chanroblesvirtualawlibrary
(2) Should the SANDIGANBAYAN have disposed first such motion to dismiss rather than resolving it as part of the judgment?chanroblesvirtualawlibrary
(3) Was the nullification of the sequestration order issued against SIPALAY and of the search and seizure order issued against ALLIED correct?chanroblesvirtualawlibrary
(4) Were the sequestration and search and seizure orders deemed automatically lifted for failure to bring an action in court against SIPALAY and ALLIED within the constitutionally prescribed period?5 ςrνll
I also believe that the doctrine of conclusiveness of judgment does not apply since in the case at bar, the question of whether the motion to disqualify Atty. Mendoza should be granted is undoubtedly a legal question. Moreover, Civil Case No. 005 and Civil Case No. 0096 involve two different substantially unrelated claims.
Justices Panganiban and Sandoval-Gutierrez further opine that the order of the Sandiganbayan in Civil Case No. 0005 denying PCGG's motion to disqualify Atty. Mendoza is not an interlocutory order but a final order, and that as a result, the principle of res judicata applies.
With all due respect, I believe that we cannot characterize the denial of PCGG's motion to disqualify Atty. Mendoza as a final order. Black's Law Dictionary defines interlocutory in the following manner:
Provisional; interim; temporary; not final. Something intervening between the commencement and the end of a suit which decides some point or matter, but is not a final decision of the whole controversy. An interlocutory order or decree is one which does not finally determine a cause of action but only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on the merits.6 (Emphasis and underscoring supplied)ςrαlαωlιbrαrÿ
Justice Oscar M. Herrera, an authority in remedial law, distinguishes between a final judgment and interlocutory order in this wise:
The concept of final judgment, as distinguished from one which has become final or executory as of right (final and executory), is definite and settled. A final judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial, declares categorically what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move (which among others, may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes final, or to use the established and more distinctive term, final and executory. (Investment, Inc. v. Court of Appeals cited in Denso [Phils.], Inc. v. Intermediate Appellate Court, 148 SCRA 280; see also Bank of America NT & SA, G.R. No. 78017, June 8, 1990 186 SCRA 417)
An interlocutory order refers to something between the commencement and end of the suit which decides some point or matter but it is not the final decision of the whole controversy.7 (Bitongv.CourtofAppeals, G.R. No. 123553, July 13, 1998, 96 SCAD 205) (Emphasis and underscoring supplied)ςrαlαωlιbrαrÿ
Justice Florenz D. Regalado is of the same view:
An order is considered interlocutory if it does not dispose of the case but leaves something else to be done by the trial court on the merits of the case. An order is final, for purposes of appeal, if it disposes of the entire case.
Where the order is interlocutory, the movant has to wait for the judgment and then appeal from the judgment, in the course of which appeal he can assign as error the said interlocutory order. The interlocutory order cannot be appealed from separately from the judgment. The general rule is that where the interlocutory order was rendered without or in excess of jurisdiction or with grave abuse of discretion, the remedy is certiorari, prohibition or mandamus depending on the facts of the case .
Where the order appealed from is interlocutory, the appellate court can dismiss the appeal even if no objection thereto was filed by the appellee in either the trial or appellate court.8 (Emphasis and underscoring supplied)ςrαlαωlιbrαrÿ
Another respected scholar of remedial law, Justice Jose Y. Feria, has formulated this guideline in determining whether an order is final or interlocutory:
The test to ascertain whether or not an order or a judgment is interlocutory or final: Does it leave something to be done in the trial court with respect to the merits of the case? If it does, it is interlocutory; if it does not, it is final. The key test to what is interlocutory is when there is something more to be done on the merits of the case.9 (Emphasis and underscoring)
In fact, this same test was used in Tambaoan v. Court of Appeals ,10 cited by Justice Panganiban to determine whether the trial court's order was interlocutory or final:
In this particular instance, the test to determine whether the order of 06 January 1995 is interlocutory or final would be: Does it leave something else to be done by the trial court on the case? If it does, it is interlocutory, if it does not, it is final. Evidently, the trial court would still have to hear the parties on the merits of the case
x x x
Indeed, the word 'interlocutory refers to 'something intervening between the commencement and the end of a suit which decides some point or matter, but is not a final decision of the whole controversy. An interlocutory order does not terminate nor does it finally dispose of the is (sic) case; it does not end the task of the court in adjudicating the parties' contentions and determining their rights and liabilities as against each other but leaves something yet to be done by the court before the case is finally decided on its merits. (Emphasis and underscoring supplied)ςrαlαωlιbrαrÿ
Applying the foregoing test, it is clear that the order denying PCGG's motion to disqualify Atty. Mendoza is interlocutory because it does not finally dispose of the case.
Interestingly enough, the U.S. Supreme Court is in agreement with Justice Callejo's conclusion that the Sandiganbayan's denial of PCGG's motion to disqualify Atty. Mendoza is an interlocutory order. In Firestone Tire & Rubber Company v. Risjord,11 the American Court ruled that an order denying motions to disqualify the opposing party's counsel in a civil case are not appealable prior to final judgment in underlying litigation since such an order does not fall within the collateral order exception of Cohen v. Beneficial Industrial Loan Corporation,12 which is cited by Justice Sandoval-Gutierrez.
Under ' 1291, the courts of appeals are vested with 'jurisdiction of appeals from all final decisions of the district courts. .. except where a direct review may be had in the Supreme Court. We have consistently interpreted this language as indicating that a party may not take an appeal under this section until there has been 'a decision by the District Court that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment. Coopers s & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945) . This rule, that a party must ordinarily raise all claims of error in a single appeal following final judgment on the merits, serves a number of important purposes. It emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of a trial. Permitting piecemeal appeals would undermine the independence of the district judge, as well as the special role that individual plays in our judicial system. In addition, the rule is in accordance with the sensible policy of 'avoid[ing] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from its initiation to entry of judgment. Cobbledick v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940) . See DiBella v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656, 7 L.Ed.2d 614 (1962) . The rule also serves the important purpose of promoting efficient judicial administration. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170, 94 S.Ct. 2140, 2149, 40 L.Ed.2d 732 (1974) .
Our decisions have recognized, however, a narrow exception to the requirement that all appeals under ' 1291 await final judgment on the merits. In Cohen v. Beneficial Industrial Loan Corp., supra, we held that a 'small class' of orders that did not end the main litigation were nevertheless final and appealable pursuant to ' 1291 . Cohen was a shareholder's derivative action in which the Federal District Court refused to apply a state statute requiring a plaintiff in such a suit to post security for costs. The defendant appealed the ruling without awaiting final judgment on the merits, and the Court of Appeals ordered the trial court to require that costs be posted. We held that the Court of Appeals properly assumed jurisdiction of the appeal pursuant to ' 1291 because the District Court's order constituted a final determination of a claim 'separable from, and collateral to, the merits of the main proceeding, because it was 'too important to be denied review, and because it was 'too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated. Id., at 546, 69 S.Ct. at 1225. Cohen did not establish new law; rather, it continued a tradition of giving ' 1291 a 'practical rather than a technical construction. Ibid. See, e.g., United States v. River Rouge Improvement Co., 269 U.S. 411, 413-414, 46 S.Ct. 144, 70 L.Ed. 339 (1926) ; Bronson v. La Crosse & Milwaukee R. Co., 67 U.S. 524-531, 2 Black 524, 530-531, 17 L.Ed. 347 (1863) ; Forgay v. Conrad, 47 U.S. 201, 203, 6 How. 201, 203, 12 L.Ed.2d 404 (1848); Whiting v. Bank of the United States, 38 U.S. 6, 15, 13 Pet. 6, 15, 10 L.Ed. 33 (1839) . We have recently defined this limited class of final 'collateral orders' in these terms: '[T]he order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment. Coopers & Lybrand v. Livesay, supra, 437 U.S. at 468, 98 S.Ct. at 2457 (footnote omitted). See Abney v. United States, 431 U.S. 651, 658, 97 S.Ct. 2034, 2039, 52 L.Ed.2d 651 (1977).
[1] Because the litigation from which the instant petition arises had not reached final judgment at the time the notice of appeal was filed. ' [FN11 the order denying petitioner's motion to disqualify respondent is appealable under ' 1291 only if it falls within the Cohen doctrine. The Court of Appeals held that it does not, and 5 of the other 10 Circuits have also reached the conclusion that denials of disqualification motions are not immediately appealable 'collateral orders. [FN12] We agree with these courts that under Cohen such an order is not subject to appeal prior to resolution of the merits.
FN11. Counsel for respondent represented at oral argument in this Court that the case was, at that time, in the discovery stage. Tr. of Oral Arg. 35-36.
FN12. See n. 10, supra.
An order denying a disqualification motion meets the first part of the 'collateral order test. It 'conclusively determine[s] the disputed question, because the only issue is whether challenged counsel will be permitted to continue his representation. In addition, we will assume, although we do not decide, that the disqualification question 'resolve [s] an important issue completely separate from the merits of the action, the second part of the test. Nevertheless,petitioneris unable to demonstrate that an order denying disqualification is 'effectively unreviewable on appeal from a final judgment within the meaning of our cases.
In attempting to show why the challenged order will be effectively unreviewable on final appeal, petitioner alleges that denying immediate review will cause it irreparable harm. It is true that the finality requirement should 'be construed so as not to cause crucial collateral claims to be lost and potentially irreparable injuries to be suffered, Mathews v. Eldridge, 424 U.S. 319, 331, n. 11, 96 S.Ct. 893, 901, n. 11, 47 L.Ed.2d 18 (1976) . In support of its assertion that it will be irreparably harmed, petitioner hints at 'the possibility that the course of the proceedings may be indelibly stamped or shaped with the fruits of a breach of confidence or by acts or omissions prompted by a divided loyalty, Brief for Petitioner 15, and at 'the effect of such a tainted proceeding in frustrating public policy, id., at 16. But petitioner fails to supply a single concrete example of the indelible stamp or taint of which it warns. The only ground that petitioner urged in the District Court was that respondent might shape the products-liability plaintiffs' claims for relief in such a way as to increase the burden on petitioner. Our cases, however, require much more before a ruling may be considered 'effectively unreviewable absent immediate appeal
[2] To be appealable as a final collateral order, the challenged order must constitute 'a complete, formal and, in the trial court, final rejection, Abney v. United States, supra, 431 U.S. at 659, 97 S.Ct. at 2040, ofaclaimedright 'where denial of immediate review would render impossible any review whatsoever, United States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971) . Thus we have permitted appeals prior to criminal trials when a defendant has claimed that he is about to be subjected to forbidden double jeopardy, Abney v. United States, supra, or a violation of his constitutional right to bail, Stack v. Boyle, 342 U.S. 1, 72 S.Ct. 1, 96 L.Ed. 3 (1951) because those situations, like the posting of security for costs involved in Cohen, 'each involved an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial. United States v. MacDonald, 435 U.S. 850, 860, 98 S.Ct. 1547, 1552, 56 L.Ed.2d 18 (1978) . By way of contrast, we have generally denied review of pretrial discovery orders, see, e. g., United States v. Ryan, supra ; Cobbledick v. United States, supra. Our rationale has been that in the rare case when appeal after final judgment will not cure an erroneous discovery order, a party may defy the order, permit a contempt citation to be entered against him, and challenge the order on direct appeal of the contempt ruling. See Cobbledick v. United States, supra, at 327, 60 S.Ct. at 542. We have also rejected immediate appealability under ' 1291 of claims that 'may fairly be assessed only after trial, United States v. MacDonald, supra, at 860, and those involving 'considerations that are 'enmeshed in the factual and legal issues comprising the plaintiff's cause of action. Coopers & Lybrand v. Livesay, 437 U.S., at 469, 98 S.Ct., at 2458, quoting Mercantile National Bank v. Langdeau, 371 U.S. 555, 558, 83 S.Ct. 520, 522, 9 L.Ed.2d 523 (1963) .
An order refusing to disqualify counsel plainly falls within the large class of orders that are indeed reviewable on appeal after final judgment, and not within the much smaller class of those that are not. The propriety of the district court's denial of a disqualification motion will often be difficult to assess until its impact on the underlying litigation may be evaluated, which is normally only after final judgment. The decision whether to disqualify an attorney ordinarily turns on the peculiar factual situation of the case then at hand, and the order embodying such a decision will rarely, if ever, represent a final rejection of a claim of fundamental right that cannot effectively be reviewed following judgment on the merits. In the case before us, petitioner has made no showing that its opportunity for meaningful review will perish unless immediate appeal is permitted. On the contrary, should the Court of Appeals conclude after the trial has ended that permitting continuing representation was prejudicial error, it would retain its usual authority to vacate the judgment appealed from and order a new trial. That remedy seems plainly adequate should petitioner's concerns of possible injury ultimately prove well founded. As the Second Circuit has recently observed, the potential harm that might be caused by requiring that a party await final judgment before it may appeal even when the denial of its disqualification motion was erroneous does not 'diffe[r] in any significant way from the harm resulting from other interlocutory orders that may be erroneous, such as orders requiring discovery over a work-product objection or orders denying motions for recusal of the trial judge. Armstrong v. McAlpin, 625 F.2d 433, 438 (1980), cert. pending, No. 80-431. But interlocutory orders are not appealable 'on the mere ground that they may be erroneous . ' Will v. United States, 389 U.S. 90, 98, n. 6, 88 S.Ct. 269, 275, n. 6, 19 L.Ed.2d 305 (1967) . Permitting wholesale appeals on that ground not only would constitute an unjustified waste of scarce judicial resources, but also would transform the limited exception carved out in Cohen into a license for broad disregard of the finality rule imposed by Congress in ' 1291 . This we decline to do. [FN13]
FN13. Although there may be situations in which a party will be irreparably damaged if forced to wait until final resolution of the underlying litigation before securing review of an order denying its motion to disqualify opposing counsel, it is not necessary, in order to resolve those situations, to create a general rule permitting the appeal of all such orders. In the proper circumstances, the moving party may seek sanctions short of disqualification, such as a protective order limiting counsel's ability to disclose or to act on purportedly confidential information. If additional facts in support of the motion develop in the course of the litigation, the moving party might ask the trial court to reconsider its decision. Ultimately, if dissatisfied with the result in the District Court and absolutely determined that it will be harmed irreparably, a party may seek to have the question certified for interlocutory appellate review pursuant to 28 U.S.C. '1292(b), see n. 7, supra, and, in the exceptional circumstances for which it was designed, a writ of mandamus from the court of appeals might be available. See In re Continental Investment Corp., supra, 637 F.2d, at 7; Community Broasting of Boston, Inc. v. FCC, 178 U.S.App.D.C., at 262, 546 F.2d, at 1028. See generally Comment, The Appealability of Orders Denying Motions for Disqualification of Counsel in the Federal Courts, 45 U.Chi.L.Rev. 450, 468-480 (1978). We need not be concerned with the availability of such extraordinary procedures in the case before us, because petitioner has made no colorable claim that the harm it might suffer if forced to await the final outcome of the litigation before appealing the denial of its disqualification motion is any greater than the harm suffered by any litigant forced to wait until the termination of the trial before challenging interlocutory orders it considers erroneous.
III
[3][4][5] We hold that a district court's order denying a motion to disqualify counsel is not appealable under ' 1291 prior to final judgment in the underlying litigation. [FN14
FN14. The United States in its brief amicus curiae, has challenged petitioner's standing to attack the order permitting respondent to continue his representation of the plaintiffs. In light of our conclusion that the Eighth Circuit was without jurisdiction to hear petitioner's appeal, we have no occasion to address the standing issue.13 (Emphasis and underscoring supplied; italics in the original)
The ruling in Firestone was subsequently reiterated in Flanagan v. United States14 and Richardson-Merrell, Inc. v. Koller.15 ςrνll
Justice Panganiban further suggests that the prohibition in Rule 6.03 of the Code of Professional Responsibility is not perpetual but merely lasts for five years primarily relying on the Civil Code provisions on prescription and the doctrine that the right to practice law is a property right protected by the Constitution.
I do not agree with this framework of analysis. Carried to its logical conclusion, Justice Panganiban's proposal would mean that after five years from the termination of the attorney-client relationship, all lawyers would be able to represent an interest in conflict with that of the former client and that they would no longer be bound by the rule on privileged communication.
It bears emphasis that the law is not trade nor a craft but a profession, a noble profession at that.
The practice of law is a profession, a form of public trust, the performance of which is entrusted only to those who are qualified and who possess good moral character. If the respect of the people in the honor and integrity of the legal profession is to be retained, both lawyers and laymen must recognize and realize that the legal profession is a profession and not a trade, and that the basic ideal of that profession is to render public service and secure justice for those who seek its aid. It is not a business, using bargain counter methods to reap large profits for those who conduct it. From the professional standpoint, it is expressive of three ideals - organization, learning and public service. The gaining of a livelihood is not a professional but a secondary consideration. The professional spirit - the spirit of public service - constantly curbs the urge of that instinct.
The law as a profession proceeds from the basic premise that membership in the bar is a privilege burdened with conditions and carries with it the responsibility to live up to its exacting standards and honored traditions. A person enrolled in its ranks is called upon to aid in the performance of one of the basic purposes of the state - the administration of justice. That the practice of law is a profession explains why lawyers repute and of eminence welcome their designation as counsel de oficio, as an opportunity to manifest fidelity to the concept that law is a profession.
The law must be thought of as ignoring commercial standards of success. The lawyer's conduct is to be measured not by the standards of trade and counting house but by those of his profession. The Code of Professional Responsibility, particularly the ethical rule against advertising or solicitation of professional employment, rests on the fundamental postulate that the practice of law is a profession.
In the matter of fixing his fees, an attorney should never forget that 'the profession is a branch of the administration of justice and not a mere money-making trade and that his standing as a member of the bar 'is not enhanced by quibbling relative to just fees, equivalent to the bargaining between a prospective purchaser and a merchant in the market before a sale is made. Law advocacy is not capital that yields profits. The returns are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from government interference, is impressed with public interest, for which it is subject to State regulation. However, while the practice of law is a profession and an attorney is primarily an officer of the court, he is as much entitled to protection from the against any attempt by his client to escape payment of his just fees, as the client against exaction by his counsel of excessive fees.
To summarize, the primary characteristics which distinguish the legal profession from business are: (a) 'a duty of public service, of which emolument is a by-product, and in which one may attain the highest eminence without making much money; (b) 'a relation as officer of the court to the administration of justice involving thorough sincerity, integrity, and reliability; (c) 'a relation to client in the highest degree fiduciary; and (d) 'a relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and encroachment on their practice, or dealing directly with their clients.
These characteristics make the law a noble profession, and the privilege to practice it is bestowed only upon individuals who are competent intellectually, academically and morally. Its basic ideal is to render service and to secure justice for those who seek its aid. If it has to remain a noble and honorable profession and attain its ideal, those enrolled in its ranks should not only master its tenets and principles but should also, by their lives, accord continuing fidelity to them. And because they are the vanguards of the law and the legal systems, lawyers must at all times conduct themselves in their professional and private dealings with honesty and integrity in a manner beyond reproach.16 ςrνll
Moreover, the relation of attorney and client is, however, one of trust and confidence of the highest order. It is highly fiduciary in nature and demands utmost fidelity and good faith.
A lawyer becomes familiar with all the facts connected with his client's case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the client's secrets.
The rule is a rigid one designed not alone to prevent the dishonest practitioner from fraudulent conduct but as well to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting duties, and to protect him from unfounded suspicion of professional misconduct. The question is not necessarily one of right of the parties but of adhere to proper professional standards. An attorney should not only keep inviolate his client's confidence but should likewise avoid the appearance of treachery and double-dealing.17 (Emphasis and underscoring supplied; citations omitted)
Thus, in Nakpil v. Valdes, 18 this Court through Justice Reynato S. Puno held that the test to determine whether there is a conflict of interest in the representation is probability, not certainty of conflict.19 ςrνll
Justice Panganiban justifies his theory on the ground that in 5 years time, the lawyer will develop a mild case of amnesia such that 'in all probability, the lapse of the said period would also naturally obscure to a reasonable extent a lawyer's memory of details of a specific case despite active participation in the proceedings therein. He thus cites his own personal experience as a member of this Court:
Modesty aside, in my nearly ten (10) years in this Court, I have disposed of about a thousand cases in full-length ponencias and countless cases by way of unsigned minute or extended Resolutions. This does not include the thousands of other cases, assigned to other members of the Court, in which I actively took part during their deliberations. In all honesty, I must admit that I cannot with certainty recall the details of the facts and issues in each of these cases, especially in their earlier ones.
While it is true that over time memory does fade, the ravages of time have been mitigated with the invention of the paper and pen and its modern offspring - the computer. It is not uncommon for lawyers to resort to note taking in the course of handling legal matters.
The proposition that 'a profession, trade or calling is a property right within the meaning of our constitutional guarantees' is not unqualified. In JMM Promotion and Management, Inc. v. Court of Appeals 20 which Justice Panganiban relies on, this Court held:
A profession, trade or calling is a property within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. (Emphasis and underscoring supplied; italics in the original; citations omitted)
Under the foregoing, the perpetual application of Rule 6.03 is clearly a valid and proper regulation.
In his ponencia, Justice Reynato S. Puno labels as insignificant the role of then Solicitor General in the liquidation of General Bank and Trust Company (GENBANK), saying that 'it is indubitable from the facts that Atty. Mendoza had no iota of participation in the decision of the Central Bank to liquidate GENBANK and that his only involvement was 'advising the Central Bank on how to proceed with the said bank's liquidation and even filing the petition for its liquidation with the CFI of. Justice Puno observes that 'the procedure of liquidation is simple and is given in black and white in Republic Act No. 265, section 29.
Atty. Mendoza's lack of participation in the decision of the Central Bank to liquidate GENBANK is to me not material. What is material is his role in facilitating the liquidation of GENBANK through his legal expertise. In advising the Central Bank, Atty. Mendoza did not just mechanically point to section 29 of Republic 265. As then Solicitor General, and as a lawyer known for his keen legal acumen, Atty. Mendoza synthesized facts, which by reason of his position he was privy to, and law with a view to successfully liquidate the bank.
Ultimately, Justice Puno advocates for a liberal interpretation of Rule 6.03 since a strict interpretation would cause 'a chilling effect on government recruitment of able legal talent.
With all due respect, I cannot subscribe to this position which is grounded on the premise that this is 'the only card that the government may play to recruit lawyers. Effectively, this is likely to result in the compromising of ethical standards which this Court must never allow. While it is desirable to recruit competent lawyers into government service, this does not justify the disturbance of our mores.
The canons and rules of the Code of Professional Responsibility must be strictly construed. Admittedly the salary for serving in government often pales in comparison to that of the private sector. I submit, however, that while financial considerations are important, they are not the sole factor affecting recruitment of lawyers to the government sector. I would like to think that serving in government is its own reward. One needs only to look at all of us members of this Court to know that money is not everything. All of us have, at one point in our legal careers, been tempted by the promise of financial success that private practice usually brings. But in the end, we decided to take the road less traveled and serve in government. And I would like to believe that each and everyone of us has made a difference. There is more to this mortal coil than the pursuit of material wealth. As Winston Churchill puts it: 'What is the use of living if it be not to strive for noble causes and make this muddled world a better place for those who will live in it after we are gone?chanroblesvirtualawlibrary
ACCORDINGLY, concurring in the dissenting opinion of Justice Romeo J. Callejo, Sr., I vote to grant the petition insofar as Civil Case No. 0096 is concerned, thus granting the motion to disqualify Atty. Estelito P. Mendoza in the said case.
Endnotes:
1 246 SCRA 540 (1995).
2 232 SCRA 110 (1994).
3 The doctrine of 'conclusiveness of judgment is also called 'collateral estoppel or 'preclusion of issues, as distinguished from 'preclusion of claims' or res judicata. In the Rules of Court, the first (conclusiveness of judgment, collateral estoppel or preclusion of issues) is governed by Rule 39, '49 (c) while the second (res judicata or preclusion of claims) is found in Rule 39, '49 (b).
4 255 SCRA 438 (1996).
5 Id. at 448-449.
6 Black's Law Dictionary 815 [1991], 6th ed.
7 II O. Herrera, Remedial Law 528 (2000).
8 F. Regalado, Remedial Law Compendium 492 (1997), 6th ed.
9 2 J. Feria & M. Noche, Civil Procedure Annotated 152 (2000).
10 365 SCRA 359 (2001).
11 449 U.S. 368 (1981).
12 337 U.S. 541 (1949).
13 449 U.S. 368, 373-380 (1981).
14 465 U.S. 259 (1984).
15 472 U.S. 424 (1985).
16 R. Agpalo, Comments on the Code of Professional Responsibility and the Code of Judicial Conduct 3-5 (2004).
17 Id. at 165.
18 286 SCRA 758 (1998).
19 Id. at 773.
20 260 SCRA 319 (1996).
