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[G.R. No. 165428.� July 13, 2005]
LBP vs. LUCIANO
SECOND DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated JUL 13 2005.
G.R. No. 165428 (Land Bank of the Philippines vs. Teresita Panlilio-Luciano.)
Pending action are the following submissions: (1) a Motion for Reconsideration dated 24 May 2005 signed by Attys. Danilo B. Beramo and Rafael L. Berba�o, who identify themselves as belonging to "Piczon Beramo & Associates, Counsel for petitioner [Land Bank of the Philippines]" and (2) Manifestation dated 3 June 2005 filed by the Office of the Government Corporate Counsel (OGCC) in behalf of the Land Bank of the Philippines (LBP).
It may be recalled that in a Resolution [1] cralaw dated 27 April 2005, the Court directed the OGCC to enter its appearance in behalf of LBP and to manifest whether it was adopting the instant petition filed in behalf of LBP by Attys. Beramo and Berba�o. [2] cralaw The OGCC filed an Entry of Appearance with Motion for Extension of Time to File Manifestation dated 23 May 2005, which the Court noted in its Resolution dated 6 July 2005.
Both the Motion for Reconsideration and the Manifestation now pending before this Court were filed in response to our Resolution dated 27 April 2005. The Motion for Reconsideration reiterates the earlier position of Attys. Beramo and Berba�o that they, as members of the LBP Legal Department, have the capacity to represent LBP before this Court.
On the other hand, the OGCC states in its Manifestation that it is adopting the petition previously filed by LBP, a position which the Court duly notes. The OGCC likewise manifests that it has duly authorized the Legal Department of LBP to handle this case, pursuant to a Letter of Authority, a copy of which was attached to the Manifestation. It is this aspect of delegation that shall be subject of scrutiny in this Resolution.
Attys. Beramo and Berba�o pray that the Court reconsider the 27 April 2005 Resolution and issue another resolution declaring that the appearance of the OGCC insofar as cases involving LBP can be dispensed with. After careful study, we deny the Motion for Reconsideration for lack of merit.
Before we inquire into the principal issue raised in the Motion for Reconsideration on the LBP Legal Department's authority to represent LBP in this petition, we must first readdress our concerns, already stated in our 27 April 2005 Resolution, over the fact that the LBP Legal Department utilizes the name "Piczon Beramo & Associates." This name appears again in the present Motion for Reconsideration, despite the fact that we earlier expressed disfavor over the nomenclature and the obvious implication that LBP is represented by a private law partnership instead of the LBP Legal Department. We might as well reiterate what we said in our 27 April 2005 Resolution, which should serve as the final word on the matter:
It is immediately suspicious why the members of the Land Bank legal department would style themselves as "Piczon Beramo & Associates," thus implying that they are a duly constituted legal partnership whose legal services are available to clients other than the Land Bank. If indeed Attys. Piczon, Beramo and "their associates" are members of the Legal Department, it should be understood that they are appointed in their individual capacities. And as members of the Legal Department, they would be deemed as public officials, salaried by the Land Bank, and in the employ of the government-owned or controlled corporation with original charter.
On this score, two points are relevant. First, under Section 7(b)(2) of the Code of Conduct and Ethical Standards for Public Officials and Employees (Rep. Act No. 6713), public officials and employees during their incumbency are barred from engaging in the private practice of their profession unless authorized by the Constitution or by law. There is no law authorizing the members of the Legal Department of Land Bank from engaging in private practice, and presumably these lawyers are precluded from any professional legal practice other than in the service of Land Bank. Thus, it behooves this Court why these members of the Land Bank Legal Department choose to undertake the appearance of a private law firm when they are barred from law from engaging in such private practice.
Second, Rule 3.03 of the Code of Professional Responsibility declares that "where a partner accepts public office, he shall withdraw from the firm and his name shall be dropped from the firm name unless the law allows him to practice law concurrently." Again, this ethical rule precludes the members of the Land Bank Legal Department from establishing a private law firm or being designated a "named partner" in such a firm. Thus, the impropriety of Attys. Piczon, Beramo and Berba�o representing themselves as "Piczon Beramo and Associates" becomes even more glaring, considering that by their own admission, these three lawyers belong to the Legal Department of Land Bank. [3] cralaw
At present, Attys. Beramo and Berba�o insist that the lawyers of the LBP Legal Department exclusively work for the LBP, and that "Piczon Beramo & Associates" "merely describes the collective legal force of the Legal Department handling agrarian cases" for LBP. Again, wariness is aroused by the use of the descriptive phrase "collective legal force of the Legal Department," considering that the movants could have simply said that the "name merely describes the Legal Department" of the LBP. We would like to believe, as Attys. Beramo and Berba�o aver, that these lawyers who collectively describe themselves as "Piczon Beramo and Associates" work exclusively for the LBP as members of its legal department, but these LBP Legal Department lawyers foster contrary misgivings by the very use of the questioned nomenclature itself.
Unbelievably, Attys. Beramo and Berba�o assert that the name "Piczon Beramo & Associates" is "devoid of any legal significance or implication." This claim suggests that the Court was foolish to have earlier assumed, as expressed in the Resolution dated 17 January 2005, that Piczon Beramo & Associates was a private law firm. However, anybody hearing of "Piczon Beramo & Associates" would assume that such was a private law firm, for nothing in the appellation would indicate that it were instead composed of government lawyers, an assumption that would be readily apparent if these LBP lawyers were identified instead as the "Land Bank Legal Department."
At any rate, the LBP Legal Department should immediately stop representing itself as "Piczon Beramo & Associates" in courts, quasi-judicial agencies, or to the public at large. However, if it emerges that "Piczon Beramo & Associates" were indeed a privately constituted law partnership engaged in government legal services without the requisite concurrences of the OGCC and the Commission on Audit, [4] cralaw then disciplinary consequences may be in order.
We now proceed to dispose of the Motion for Reconsideration on the merits. Attys. Beramo and Berba�o concede the general rule that it is the OGCC that acts as the principal law office or counsel of all government-owned or controlled corporations (GOCCs) such as the LBP. However, they rely upon Section 91 of LBP's Charter, [5] cralaw the provision which constitutes the Legal Department of LBP, as basis for insisting that the said Legal Department has the power to represent LBP in any and all cases, including the present petition. The cited provision reads:
SECTION 91. Legal counsel. - The Secretary of Justice shall be ex-officio legal adviser of the Bank. Any provision of law to the contrary notwithstanding, the Land Bank shall have its own Legal Department, the chief and members of which shall be appointed by the Board of Trustees. The composition, budget and operating expenses of the Office of the Legal Counsel and the salaries and traveling expenses of its officers and employees shall be fixed by the Board of Trustees and paid by the Bank. (Emphasis supplied.)
True enough, the provision allows the constitution of the LBP Legal Department. However, contrary to the submission of Attys. Beramo and Berba�o, such does not operate as an exception to the general rule that the OGCC is the principal law office of GOCCs. Nothing in the LBP charter designates the legal department as the principal law office of LBP. In fact, the cited provision merely says that the LBP shall have a legal department, without elaboration as to the tasks and functions of such department.
There is nothing in the LBP charter that expressly authorizes the said Legal Department to appear in behalf of LBP in any court or quasi-judicial proceeding. Attys. Beramo and Berba�o insist that the creation of the LBP Legal Department "necessarily entails conferment of the power to represent [LBP] in any and all cases" and consequently confers the power to "exercise such incidental powers or perform such acts as are necessary to make the conferred power effective." At first blush, this is not an unreasonable position; yet, we are precluded from adopting the same, owing to the explicit proviso in Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987, [6] cralaw which reads:
Section 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate Counsel (OGCC) shall act as the principal law office of all government-owned or controlled corporations, their subsidiaries, other corporate offsprings and government acquired asset corporations and shall exercise control and supervision over all legal departments or divisions maintained separately and such powers and functions as are now or may hereafter be provided by law. In the exercise of such control and supervision, the Government Corporate Counsel shall promulgate rules and regulations to effectively implement the objectives of the Office.
The OGCC is authorized to receive the attorney's fees adjudged in favor of their client government-owned or controlled corporations, their subsidiaries/other corporate offsprings and government acquired asset corporations. These attorney's fees shall accrue to a Special fund of the OGCC, and shall be deposited in an authorized government depository as trust liability and shall be made available for expenditure without the need for a Cash Disbursement Ceiling, for purposes of upgrading facilities and equipment, granting of employee's incentive pay and other benefits, and defraying such other incentive expenses not provided for in the General Appropriations Act as may be determined by the Government Corporate Counsel. (Emphasis supplied.)
The above provision mandates the OGCC, and not the LBP Legal Department, as the principal law office of the LBP. Moreover, it establishes the proper hierarchical order in that the LBP Legal Department remains under the control and supervision of the OGCC. Indeed, if we were to accede to the position of Attys. Beramo and Berba�o that the mere constitution of an LBP Legal Department ipso facto confers upon it the capacity to litigate cases in behalf of LBP in any legal proceeding, then the role of the OGCC as the principal law office of all GOCCs would be rendered nugatory in all GOCCs with Legal Departments.
At the same time, the existence of the OGCC does not render the LBP Legal Department a superfluity. We do not doubt that the LBP Legal Department carries out vital legal services to LBP. However, the performance of such functions cannot deprive the OGCC's role as overseer of the LBP Legal Department and its mandate of exercising control and supervision over all GOCC legal departments. For the purpose of filing petitions and making submissions before this Court, such control and supervision imply express participation by the OGCC as principal legal counsel of LBP. Our succeeding disposition of the OGCC's pending Manifestation would delve in detail the extent of the OGCC's required participation. But suffice for now, Attys. Beramo and Berba�o are in error when they assert that the OGCC's participation in the present petition is not required at all.
It should also be noted that the aforementioned Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987 authorizes the OGCC to receive the attorney's fees adjudged in favor of their client GOCCs, such fees accruing to a special fund of the OGCC. Evidently, the non-participation of the OGCC in litigations pursued by GOCCs would deprive the former of its due funding as authorized by law. Hence, this is another reason why we cannot sustain Attys. Beramo and Berba�o's position that the OGCC need not participate in litigations pursued by LBP.
It may strike as disruptive to the flow of a GOCC's daily grind to require the participation of the OGCC as its principal law office, or the exercise of control and supervision by the OGCC over the acts of the GOCC's legal departments. For reasons such as proximity and comfort, the GOCC may find it convenient to rely instead on its in-house legal departments, or more irregularly, on private practitioners. Yet the statutory role of the OGCC as principal law office of GOCCs is one of long-standing, [7] cralaw and we have to recognize such function as part of public policy. Since the jurisdiction of the OGCC includes all GOCCs, its perspective is less myopic than that maintained by a particular legal department of a GOCC. It is not inconceivable that left to its own devices, the legal department of a given GOCC may adopt a legal position inconsistent with or detrimental to other GOCCs. Since GOCCs fall within the same governmental framework, it would be detrimental to have GOCCs foisted into adversarial positions by their respective legal departments. Hence, there is indubitable wisdom in having one overseer over all these legal departments which would ensure that the legal positions adopted by the GOCCs would not conflict with each other or the government.
Attys. Beramo and Berba�o claim that the LBP Legal Department had handled some cases which had been decided by the Court [8] cralaw and that the OGCC has never been involved in the litigation and handling of LBP's appellate cases involving specialized fields such as banking and agrarian reform. These points should not be dismissed lightly, but then again, years of wrong practice do not make a statutory right. The Administrative Code of 1987, adopting a decades-old legal precept, expressly provides that it is the OGCC that acts as the principal law office of GOCCs and exercises control and supervision over the legal departments of GOCCs. If the LBP Legal Department has long operated as an independent fiefdom absent any control, supervision, or even concern from the OGCC, then this practice must end now. As to the pending litigations of LBP which are exclusively by the LBP Legal Department, it shall be the individual courts with jurisdiction over those cases that shall decide how to proceed next. We shall not, by reason of this Resolution, interfere with the dispensation of those cases. Certainly, Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987 can be invoked by adverse parties or by the courts in citing as deficient the exclusive representation of LBP by its Legal Department. Then again, if neither the adverse parties nor the courts of jurisdiction choose to contest this point, there would be no impediment to the litigation to maintain.
Of course, if the principle that the OGCC is the principal law office of GOCCs proves persistently inconvenient in practice, it would be up to Congress to amend the Administrative Code, or for the OGCC itself to promulgate rules and regulations that would alleviate the problems in practice without abdicating its legal mandate. The succeeding discussion on the OGCC's pending Manifestation involves a review of the OGCC's current practices, including the present rules and regulations.
The OGCC states in its Manifestation that it had duly authorized the LBP Legal Department to handle the present case. The authority referred to comes from an attached Letter of Authority signed by Government Corporate Counsel Agnes VST Devanadera and addressed to Atty. Manuel C. Picson, Vice President/Head, Legal Services Group of the LBP. The letter relevantly states:
By virtue of the 1987 Revised Administrative Code, the Office of the Government Corporate Counsel (OGCC) hereby authorizes the Legal Department of LBP to handle [this petition], as counsel for LBP.
Relative thereto, the Legal Department of LBP is likewise authorized to prepare and sign all pleadings that are to be filed with the Supreme Court.
It should be noted that contrary to the premise stated in the Letter of Authority, nothing in the Administrative Code of 1987 expressly allows the OGCC to authorize a legal department to handle a particular case in behalf of the GOCC. However, we are willing to concede that by virtue of the mandate of control and supervision exercised by the OGCC over the legal departments of GOCCs, there are permissible levels of delegation of authority the OGCC may cede to the legal departments it supervises. We need to ascertain though the extent of authority the OGCC may delegate to the LBP Legal Department in this case.
For one, we cannot sustain an interpretation of the Letter of Authority that would excuse the OGCC from any further participation in this case. The Letter of Authority certainly admits to such an interpretation, though it does not expressly preclude further involvement by the OGCC. Nevertheless, the Letter of Authority cannot be construed in such a manner that would virtually result in a surrender or abdication of powers by the office charged by law with its performance. [9] cralaw
More decisively to this petition, the Rules and Regulations
Integrating and Implementing the Mandate of the Office Government Corporate
Counsel (Implementing Rules) indubitably requires that the OGCC handle the
instant petition. The case involves a just compensation claim by the respondent
over two parcels of land which the trial court adjudged in the respective
amounts of Eight Hundred Twenty Five Thousand Fifty Pesos and Seventy One
Centavos (P825,050.71) and One Million Two Thousand Ninety Nine Pesos
and Thirty Centavos (P1,002,099.30), or One Million Eight Hundred Twenty
Seven Thousand One Hundred and Fifty Pesos and One Centavos (P1,827,150.01)
all in all.
[10]
cralaw
The case was ordered remanded to the trial court by the Court of Appeals
Sixteenth Division in its assailed Decision dated 3 August 2004.
[11]
cralaw
The issue raised in the present petition is whether the determination of just compensation upon remand to the trial court should be based on the determination of the selling price of palay or that the formula under Presidential Decree No. 27 be applied. [12] cralaw Yet the amounts involved, as evidenced by the trial court decision, are obviously significant. In that regard, Article V. 1 of the Implementing Rules provides:
Article V. The Duties and Responsibilities of the GOCCs are:
1. The GOCCs shall refer to the OGCC only cases and legal matters
which are important or which involve amounts of not less than FIVE HUNDRED
THOUSAND PESOS (P500,000.00).
a)����� In referrals, the GOCCs shall provide complete documentation and background of all cases or legal matters so referred.
b)����� The GOCCs shall prepare and send to the OGCCs all preliminary communications such as demand letters and affidavits or pleadings for review.
c)����� The GOCCs shall coordinate and consult with the OGCC for prompt, efficient, effective, adequate, competent and developmental legal services.
d)����� As a matter of policy, the GOCCs shall exhaust all administrative remedies before filing any case and the case so filed must be based on clear provisions of law and not on mere technicalities.
If there can be any doubt that it is the OGCC which should handle the present petition, Article IV of the Implementing Rules further provides:
Article IV. Jurisdiction, Powers and Duties of the OGCC. The OGCC has the following jurisdiction, powers and duties:
1.������ Acts as chief legal counsel of the GOCCs.
2.������ Represents the GOCCs in all litigations and proceedings before the Supreme Court, Court of Appeals, and all other courts or tribunals, including quasi-judicial bodies, in the Philippines, as well as in all litigations and proceedings in foreign countries consistent with their laws.
These above-cited provisions from the Implementing Rules,
promulgated consistent with the authority under the Administrative Code for the
OGCC to prescribe such rules,
[13]
cralaw
make it clear that in cases involving amounts exceeding Five Hundred
Thousand Pesos (P500,000.00) such as the present petition, it is the
OGCC tasked with directly handling the case. Therefore, the Letter of
Authority cannot excuse the OGCC from handling the present petition, as to
construe the letter otherwise would be in violation of the mandate under the
Administrative Code of the OGCC as the principal law office of the LBP, and of
the specific provisions of the OGCC's own Implementing Rules.
It does not escape our attention that there seems to be a patent
inconsistency in the Implementing Rules, Article IV vesting jurisdiction on the
OGCC to represent the GOCCs in all litigations, and Article V limiting
the referral of cases by GOCCs to OGCCs to important cases or those which
involve amounts of not less than Five Hundred Thousand Pesos (P500,000.00).
The inconsistency is not material to the present petition though, since these
provisions inescapably task the OGCC to represent the LBP in those cases
involving amounts in excess of Five Hundred Thousand Pesos (P500,000.00).
Nonetheless, the contradictory provisions, as they stand, would cause confusion
as to whether the OGCC needs to appear in behalf of GOCCs in cases involving
small claims. We shall avoid making any pronouncements on this point for now,
since such would anyway constitute obiter dicta, but certainly the OGCC
can avoid unnecessary confusion and needless litigation on the question should
it simply amend its own Implementing Rules.
Does this ruling of the Court likewise preclude participation in this petition from the LBP Legal Department? It does not, so long as the OGCC consents to such participation, and the Legal Department so acts under the control and supervision of the OGCC. For all practical intents, the members of the LBP Legal Department would be free to develop the theories behind this case, or to draft and co-sign pleadings. However, these actions must meet the approval of the OGCC, such approval being sufficiently evidenced by the OGCC's signature on the pleadings filed before this Court.
We do not discount the LBP Legal Department's unique position to assist in the litigation of this case. Its familiarity with the facts, as well as with the day-to-day workings of the LBP, invests it with distinct advantages in handling the petition that might not be shared by the members of the OGCC. From the prescribed statutory setup between the LBP Legal Department and the OGCC, we can discern similarities to the prevalent practice in law firms of having junior associates probe into the factual background of cases and prepare the initial drafts, their output subject to the review and approval of the firm's senior partner. The junior associate (or the LBP Legal Department) would have the advantage gained by proximity to the milieu, but the senior partner would have the advantage of a wider perspective enriched by experience. The correlative advantage of the OGCC might not necessarily be derived from years of experience, but putatively from its vantage point as overseer of all legal processes emanating from and involving all GOCCs.
The OGCC and the LBP Legal Department would be served well in accepting the prescribed statutory setup and acceding to the benefits of the imposed relationship. Indeed, the petition could have been dismissed outright considering that it was not filed by the OGCC. Instead, we have allowed it to stand thus far and even endeavored to elaborate upon it in quite a few extensive resolutions, not because the petition has obvious or indubitable merit, but out of a legitimate concern to see to it that the law is followed, with the framework established by the Administrative Code observed by the OGCC and the LBP Legal Department alike. It is hoped that the Court's atypical indulgence of this petition, as expressed by this Resolution and the two that came before it, would appropriately guide the LBP and the OGCC in future litigations. But the time would come for the present petition to be litigated solely on the merits.
WHEREFORE, the COURT RESOLVES:
1)� to DENY the Motion for Reconsideration dated 24 May 2005 for lack of merit;
2)� to NOTE the Manifestation dated 3 June 2005 insofar as it manifests that the OGCC is adopting the instant petition as its own;
3)� to REQUIRE the OGCC to directly handle the instant petition, and if it so chooses, to engage the LBP Legal Department as its collaborating counsel under its� control and� supervision� as mandated under the Administrative Code of 1987;
4)� to REQUIRE respondent Teresita Panlilio-Luciano to COMMENT on the Petition for Review dated 27 October 2004 within TEN (10) DAYS from receipt of this Resolution.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] cralaw Rollo, pp. 171-175.
[2] cralaw See id. at 49.
[3] cralaw Rollo, pp. 172-173.
[4] cralaw See Phividec Industrial Authority v. Capitol Steel Corporation, G.R. No. 155692, 23 October 2003,414 SCRA 327, 334.
[5] cralaw Republic Act No. 3844, as amended by Presidential Decree No. 251 and Rep. Act No. 7907.
[6] cralaw Executive Order no. 292.
[7] cralaw See Phividec Industrial Authority v. Capitol Steel Corporation, supra note 4 at 330-332 for the statutory history of the OGCC.
[8] cralaw Citing in particular Sharp International Marketing v. Court of Appeals, G.R. No. 93661, 4 September 1991, 201 SCRA 299; LBP v. Jose Pascual, G.R. No. 128557; and Gabatin v. LBP, G.R. No. 148223, 25 November 2004.
[9] cralaw See I. CORTES, PHILIPPINE ADMINISTRATIVE LAW: CASES AND MATERIALS, 1963 ed., at 12.
[10] cralaw Rollo, p. 109.
[11] cralaw Rollo, p. 62. Decision penned by Justice R. Dacudao, concurred in by Justices L. Bersamin and Celia Librea-Leagogo.
[12] cralaw Id. At 40.
[13] cralaw Supra note 6.
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