9/3/2015 G.R. No.

L-51122

TodayisThursday,September03,2015

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

G.R.No.L51122March25,1982

EUGENIOJ.PUYAT,ERWINL.CHIONGBIAN,EDGARDOP.REYES,ANTONIOG.PUYAT,JAIMER.
BLANCO,RAFAELR.RECTOandREYNALDOL.LARDIZABAL,petitioners,
vs.
HON.SIXTOT.J.DEGUZMAN,JR.,asAssociateCommissioneroftheSecurities&ExchangeCommission,
EUSTAQUIOT.C.ACERO,R.G.VILDZIUS,ENRIQUEM.BELO,MANUELG.ABELLO,SERVILLANO
DOLINA,JUANITOMERCADOandESTANISLAOA.FERNANDEZ,respondents.

MELENCIOHERRERA,J.:

ThissuitforcertiorariandProhibitionwithPreliminaryInjunctionispoisedagainsttheOrderofrespondentAssociate
CommissioneroftheSecuritiesandExchangeCommission(SEC)grantingAssemblymanEstanislaoA.Fernandez
leavetointerveneinSECCaseNo.1747.

A question of novel import is in issue. For its resolution, the following dates and allegations are being given and
made:

a)May14,1979.AnelectionfortheelevenDirectorsoftheInternationalPipeIndustriesCorporation(IPI)aprivate
corporation,washeld.ThoseinchargeruledthatthefollowingwereelectedasDirectors:

EugenioJ.PuyatEustaquioT.C.Acero
ErwinL.ChiongbianR.G.Vildzius
EdgardoP.ReyesEnriqueM.Belo
AntonioG.PuyatServillanoDolina
JaimeR.BlancoJuanitoMercado
RafaelR.Recto

ThosenamedontheleftlistmaybecalledthePuyatGroupthoseontheright,theAceroGroup.Thus,thePuyat
GroupwouldbeincontroloftheBoardandofthemanagementofIPI.

b) May 25, 1979. The Acero Group instituted at the Securities and Exchange Commission (SEC) quo warranto
proceedings, docketed as Case No. 1747 (the SEC Case), questioning the election of May 14, 1979. The Acero
Groupclaimedthatthestockholders'voteswerenotproperlycounted.

c)May2531,1979.ThePuyatGroupclaimsthatatconferencesofthepartieswithrespondentSECCommissioner
deGuzman,JusticeEstanislaoA.Fernandez,thenamemberoftheInterimBatasangPambansa,orallyenteredhis
appearanceascounselforrespondentAcerotowhichthePuyatGroupobjectedonConstitutionalgrounds.Section
11, Article VIII, of the 1973 Constitution, then in force, provided that no Assemblyman could "appear as counsel
before ... any administrative body", and SEC was an administrative body. Incidentally, the same prohibition was
maintainedbytheApril7,1981plebiscite.ThecitedConstitutionalprohibitionbeingclear,AssemblymanFernandez
didnotcontinuehisappearanceforrespondentAcero.

d)May31,1979.WhentheSECCasewascalled,itturnedoutthat:

(i)OnMay15,1979,AssemblymanEstanislaoA.FernandezhadpurchasedfromAugustoA.Morales
ten(10)sharesofstockofIPIforP200.00uponrequestofrespondentAcerotoqualifyhimtorunfor
electionasaDirector.

(ii)Thedeedofsale,however,wasnotarizedonlyonMay30,1979andwassoughttoberegisteredon
saiddate.

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(iii) On May 31, 1979, the day following the notarization of Assemblyman Fernandez' purchase, the
latterhadfiledanUrgentMotionforInterventionintheSECCaseastheowneroften(10)IPIshares
alleginglegalinterestinthematterinlitigation.

e)July 17, 1979. The SEC granted leave to intervene on the basis of Atty. Fernandez' ownership of the said ten
shares. 1 It is this Order allowing intervention that precipitated the instant petition for certiorari and Prohibition with
PreliminaryInjunction.

f)July3,1979.EdgardoP.ReyesinstitutedacasebeforetheCourtofFirstInstanceofRizal(Pasig),BranchXXI,
againstN.V.VerenigdeBueinzenfabriekenExcelsiorDeMaasandrespondentEustaquioT.C.Aceroandothers,
toannulthesaleofExcelsior'ssharesintheIPItorespondentAcero(CCNo.33739).Inthatcase,Assemblyman
FernandezappearedascounselfordefendantExcelsiorInL51928,weruledthatAssemblymanFernandezcould
notappearascounselinacaseoriginallyfiledwithaCourtofFirstInstanceasinsuchsituationtheCourtwouldbe
one"withoutappellatejurisdiction."

On September 4, 1979, the Court en banc issued a temporary Restraining Order enjoining respondent SEC
Associate Commissioner from allowing the participation as an intervenor, of respondent Assemblyman Estanislao
FernandezattheproceedingsintheSECCase.

The Solicitor General, in his Comment for respondent Commissioner, supports the stand of the latter in allowing
intervention. The Court enbanc, on November 6, 1979, resolved to consider the Comment as an Answer to the
Petition.

The issue which will be resolved is whether or not Assemblyman Fernandez, as a then stockholder of IPI may
intervene in the SEC Case without violating Section 11, Article VIII of the Constitution, which, as amended, now
reads:

SEC.11.

No Member of the Batasang Pambansa shall appear as counsel before any court without appellate
jurisdiction.

before any court in any civil case wherein the Government, or any subdivision, agency, or
instrumentalitythereofistheadverseparty,

orinanycriminalcasewhereinanyofficeroremployeeoftheGovernmentisaccusedofanoffense
committedinrelationtohisoffice,

orbeforeanyadministrativebody.

Neithershallhe,directlyorindirectlybeinterestedfinanciallyinanycontractwith,orinanyfranchiseor
special privilege granted by the Government, or any subdivision, agency or instrumentality thereof,
includinganygovernmentownedorcontrolledcorporation,duringhistermofoffice.

Heshallnotacceptemploymenttointerveneinanycauseormatterwherehemaybecalledtoacton
accountofhisoffice.(Emphasissupplied)

Whatreallyhastoberesolvediswhetherornot,ininterveningintheSECCase,AssemblymanFernandezis,in
effect, appearing as counsel, albeit indirectly, before an administrative body in contravention of the Constitutional
provision.

Ordinarily, by virtue of the Motion for Intervention, Assemblyman Fernandez cannot be said to be appearing as
counsel. Ostensibly, he is not appearing on behalf of another, although he is joining the cause of the private
respondents.Hisappearancecouldtheoreticallybefortheprotectionofhisownershipoften(10)sharesofIPIin
respect of the matter in litigation and not for the protection of the petitioners nor respondents who have their
respectivecapableandrespectedcounsel.

However, certain salient circumstances militate against the intervention of Assemblyman Fernandez in the SEC
Case.HehadacquiredamereP200.00worthofstockinIPI,representingtensharesoutof262,843outstanding
shares.Heacquiredthem"afterthefact"thatis,onMay30,1979,afterthecontestedelectionofDirectorsonMay
14,1979,afterthequowarrantosuithadbeenfiledonMay25,1979beforeSECandonedaybeforethescheduled
hearing of the case before the SEC on May 31, 1979. And what is more, before he moved to intervene, he had
signified his intention to appear as counsel for respondent Eustaquio T. C. Acero, 2 but which was objected to by
petitioners.Realizing,perhaps,thevalidityoftheobjection,hedecided,instead,to"intervene"onthegroundoflegalinterest
inthematterunderlitigation.AnditmaybenotedthatinthecasefiledbeforetheRizalCourtofFirstInstance(L51928),he
appearedascounselfordefendantExcelsior,codefendantofrespondentAcerotherein.

Under those facts and circumstances, we are constrained to find that there has been an indirect "appearance as
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counsel before ... an administrative body" and, in our opinion, that is a circumvention of the Constitutional
prohibition.The"intervention"wasanafterthoughttoenablehimtoappearactivelyintheproceedingsinsomeother
capacity.Tobelievetheavowedpurpose,thatis,toenablehimeventuallytovoteandtobeelectedasDirectorin
the event of an unfavorable outcome of the SEC Case would be pure naivete. He would still appear as counsel
indirectly.

Arulingupholdingthe"intervention"wouldmaketheconstitutionalprovisionineffective.AllanAssemblymanneed
do,ifhewantstoinfluenceanadministrativebodyistoacquireaminimalparticipationinthe"interest"oftheclient
and then "intervene" in the proceedings. That which the Constitution directly prohibits may not be done by
indirection or by a general legislative act which is intended to accomplish the objects specifically or impliedly
prohibited.3

In brief, we hold that the intervention of Assemblyman Fernandez in SEC. No. 1747 falls within the ambit of the
prohibitioncontainedinSection11,ArticleVIIIoftheConstitution.

Ourresolutionofthiscaseshouldnotbeconstruedas,absentthequestionoftheconstitutionalprohibitionagainst
membersoftheBatasan,allowinganystockholder,oranynumberofstockholders,inacorporationtointervenein
anycontroversybeforetheSECrelatingtointracorporatematters.Aresolutionofthatquestionisnotnecessaryin
thiscase.

WHEREFORE,respondentCommissioner'sOrdergrantingAtty.EstanislaoA.FernandezleavetointerveneinSEC
Case No. 1747 is hereby reversed and set aside. The temporary Restraining Order heretofore issued is hereby
madepermanent.

Nocosts.

SOORDERED.

Fernando, C.J., Teehankee, Makasiar, Concepcion, Jr., Fernandez, Guerrero, Abad Santos, De Castro, Ericta,
PlanaandEscolin,JJ.,concur.

Aquino,J.,tooknopart.

Barredo,J.,Ireservemyvote.

Footnotes

1p.23,Rollo.

2p.6,Ibid.

3Am.Digest,2dDicennialEd.,Vol.5,citingAtkinsonvs.Board,etc.,108P.1046.

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