G.R. No.
118910 November 16, 1995 Court, with the retirement of Justices Cruz
KILOSBAYAN, INCORPORATED,
JOVITO R. SALONGA, CIRILO A.
RIGOS, ERME CAMBA, EMILIO C.
CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO
SANTIAGO, JOSE ABCEDE,
CHRISTINE TAN, RAFAEL G.
FERNANDO, RAOUL V. VICTORINO,
JOSE CUNANAN, QUINTIN S.
DOROMAL, SEN. FREDDIE WEBB,
SEN. WIGBERTO TAÑADA, REP.
JOKER P. ARROYO, petitioners,
vs.
MANUEL L. MORATO, in his capacity
as Chairman of the Philippine Charity
Sweepstakes Office, and the PHILIPPINE
GAMING MANAGEMENT
CORPORATION, respondents.
RESOLUTION
MENDOZA, J.:
Petitioners seek reconsideration of our
decision in this case. They insist that the
decision in the first case has already settled
(1) whether petitioner Kilosbayan, Inc. has a
standing to sue and (2) whether under its
charter (R.A. No. 1169, as amended) the
Philippine Charity Sweepstakes Office can
enter into any form of association or
collaboration with any party in operating an
on-line lottery. Consequently, petitioners
contend, these questions can no longer be
reopened.
Because two members of the Court did not
consider themselves bound by the decision
in the first case, petitioners suggest that the
two, in joining the dissenters in the first case
in reexamining the questions in the present
case, acted otherwise than according to law.
They cite the following statement in the
opinion of the Court:
The voting on petitioners' standing in the
previous case was a narrow one, with seven
(7) members sustaining petitioners' standing
and six (6) denying petitioners' right to bring
the suit. The majority was thus a tenuous
one that is not likely to be maintained in any
subsequent litigation. In addition, there have
been changes in the membership of the
and Bidin and the appointment of the writer
of this opinion and Justice Francisco. Given
this fact it is hardly tenable to insist on the
maintenance of the ruling as to petitioners'
standing.
Petitioners claim that this statement
"conveys a none too subtle suggestion,
perhaps a Freudian slip, that the two new
appointees, regardless of the merit of the
Decision in the first Kilosbayan case against
the lotto (Kilosbayan, et al. v. Guingona,
232 SCRA 110 (1994)) must of necessity
align themselves with all the Ramos
appointees who were dissenters in the first
case and constitute the new majority in the
second lotto case." And petitioners ask,
"why should it be so?"
Petitioners ask a question to which they
have made up an answer. Their attempt at
psychoanalysis, detecting a Freudian slip
where none exists, may be more revealing of
their own unexpressed wish to find motives
where there are none which they can impute
to some members of the Court.
For the truth is that the statement is no more
than an effort to explain — rather than
to justify — the majority's decision to
overrule the ruling in the previous case. It is
simply meant to explain that because the
five members of the Court who dissented in
the first case (Melo, Quiason, Puno, Vitug
and Kapunan, JJ.) and the two new
members (Mendoza and Francisco, JJ.)
thought the previous ruling to be
erroneous and its reexamination not to be
barred by stare decisis, res judicata or
conclusiveness of judgment, or law of the
case, it was hardly tenable for petitioners to
insist on the first ruling.
Consequently to petitioners' question "What
is the glue that holds them together,"
implying some ulterior motives on the part
of the new majority in reexamining the two
questions, the answer is: None, except a
conviction on the part of the five, who had
been members of the Court at the time they
dissented in the first case, and the two new
members that the previous ruling was
erroneous. The eighth Justice (Padilla, J.) on
the other hand agrees with the seven Justices
that the ELA is in a real sense a lease
agreement and therefore does not violate
R.A. No. 1169.
The decision in the first case was a split
decision: 7-6. With the retirement of one of
the original majority (Cruz, J.) and one of
the dissenters (Bidin, J.) it was not
surprising that the first decision in the first
case was later reversed.
It is argued that, in any case, a
reexamination of the two questions is barred
because the PCSO and the Philippine
Gaming Management Corporation made a
" formal commitment not to ask for a
reconsideration of the Decision in the first
lotto case and instead submit a new
agreement that would be in conformity with
the PCSO Charter (R.A. No. 1169, as
amended) and with the Decision of the
Supreme Court in the first Kilosbayan case
against on-line, hi-tech lotto."
To be sure, a new contract was entered into
which the majority of the Court finds has
been purged of the features which made the
first contract objectionable. Moreover, what
the PCSO said in its manifestation in the
first case was the following:
1. They are no longer filing a motion for
reconsideration of the Decision of this
Honorable Court dated May 5, 1994, a copy
of which was received on May 6, 1994.
2. Respondents PCSO and PGMC are
presently negotiating a new lease agreement
consistent with the authority of PCSO under
its charter (R.A. No. 1169, as amended by
B.P. Blg. 42) and conformable with the
pronouncements of this Honorable Court in
its Decision of May 5, 1995.
The PGMC made substantially the same
manifestation as the PCSO.
There was thus no "formal commitment" —
but only a manifestation — that the parties
were not filing a motion for reconsideration.
Even if the parties made a "formal
commitment," the six (6) dissenting Justices
certainly could not be bound thereby not to
insist on their contrary view on the question
of standing. Much less were the two new
members bound by any "formal
commitment" made by the parties. They
believed that the ruling in the first case was
erroneous. Since in their view reexamination
was not barred by the doctrine of stare
decisis, res judicata or conclusiveness of
judgment or law of the case, they voted the
way they did with the remaining five (5)
dissenters in the first case to form a new
majority of eight.
Petitioners ask, "Why should this be so?"
Because, as explained in the decision, the
first decision was erroneous and no legal
doctrine stood in the way of its
reexamination. It can, therefore, be asked
"with equal candor": "Why should
this not be so?"
Nor is this the first time a split decision was
tested, if not reversed, in a subsequent case
because of change in the membership of a
court. In 1957, this Court, voting 6-5, held
in Feliciano v. Aquinas, G.R. No. L-10201,
Sept. 23, 1957 that the phrase "at the time of
the election" in §2174 of the Revised
Administrative Code of 1917 meant that a
candidate for municipal elective position
must be at least 23 years of age on the date
of the election. On the other hand, the
dissenters argued that it was enough if he
attained that age on the day he assumed
office.
Less than three years later, the same
question was before the Court again, as a
candidate for municipal councilor stated
under oath in her certificate of candidacy
that she was eligible for that position
although she attained the requisite age (23
years) only when she assumed office. The
question was whether she could be
prosecuted for falsification. In People
v. Yang, 107 Phi. 888 (1960), the Court
ruled she could not. Justice, later Chief
Justice, Benison, who dissented in the first
case, Feliciano v. Aquinas, supra, wrote the
opinion of the Court, holding that while the
statement that the accused was eligible was
"inexact or erroneous, according to the
majority in the Feliciano case," the accused
could not be held liable for falsification,
because
the question [whether the law really required
candidates to have the required age on the
day of the election or whether it was
sufficient that they attained it at the
beginning of the term of office] has not been
discussed anew, despite the presence of new
members; we simply assume for the purpose
of this decision that the doctrine stands.
Thus because in the meantime there had
been a change in the membership of the
Court with the retirement of two members
(Recess and Flex, JJ.) who had taken part in
the decision in the first case and their
replacement by new members (Barrera and
Gutierrez-David, JJ.) and the fact that the
vote in the first case was a narrow one (6 to
5), the Court allowed that the continuing
validity of its ruling in the first case might
well be doubted. For this reason it gave the
accused the benefit of the doubt that she had
acted in the good faith belief that it was
sufficient that she was 23 years of age when
she assumed office.
In that case, the change in the membership
of the Court and the possibility of change in
the ruling were noted without anyone —
much less would-be psychoanalysts —
finding in the statement of the Court any
Freudian slip. The possibility of change in
the rule as a result of change in membership
was accepted as a sufficient reason for
finding good faith and lack of criminal
intent on the part of the accused.
Indeed, a change in the composition of the
Court could prove the means of undoing an
erroneous decision. This was the lesson
of Knox v. Lee, 12 Wall. 457 (1871). The
Legal Tender Acts, which were passed
during the Civil War, made U.S. notes
(greenbacks) legal tender for the payment of
debts, public or private, with certain
exceptions. The validity of the acts, as
applied to preexisting debts, was challenged
in Hepburn v. Griswold, 8 Wall. 603 (1869).
The Court was then composed of only eight
(8) Justices because of Congressional effort
to limit the appointing power of President
Johnson. Voting 5-3, the Court declared the
acts void. Chief Justice Chase wrote the
opinion of the Court in which four others,
including Justice Grier, concurred. Justices
Miller, Swayne and Davis dissented. A
private memorandum left by the dissenting
Justices described how an effort was made
"to convince an aged and infirm member of
the court [Justice Grier] that he had not
understood the question on which he voted,"
with the result that what was originally a 4-4
vote was converted into a majority (5-3) for
holding the acts invalid.
On the day the decision was announced,
President Grant nominated to the Court
William Strong and Joseph P. Bradley to fill
the vacancy caused by the resignation of
Justice Grier and to restore the membership
of the Court to nine. In 1871, Hepburn
v. Griswold was overruled in the Legal
Tender Cases, as Knox v. Lee came to be
known, in an opinion by Justice Strong, with
a dissenting opinion by Chief Justice Chase
and the three other surviving members of the
former majority. There were allegations that
the new Justices were appointed for their
known views on the validity of the Legal
Tender Acts, just as there were others who
defended the character and independence of
the new Justices. History has vindicated the
overruling of the Hepburn case by the new
majority. The Legal Tender Cases proved to
be the Court's means of salvation from what
Chief Justice Hughes later described as one
of the Court's "self-inflicted wounds."1
We now consider the specific grounds for
petitioners' motion for reconsideration.
I. We have held that because there are no
genuine issues of constitutionality in this
case, the rule concerning real party in
interest, applicable to private litigation
rather than the more liberal rule on standing,
applies to petitioners. Two objections are
made against that ruling: (1) that the
constitutional policies and principles
invoked by petitioners, while not supplying
the basis for affirmative relief from the
courts, may nonetheless be resorted to for
striking down laws or official actions which
are inconsistent with them and (2) that the
Constitution, by guaranteeing to
independent people's organizations
"effective and reasonable participation at all
levels of social, political and economic
decision-making" (Art. XIII, §16), grants
them standing to sue on constitutional
grounds.
The policies and principles of the
Constitution invoked by petitioner read:
Art. II, §5. The maintenance of peace and
order, the protection life, liberty, and
property, and thepromotion of the general
welfare are essential for the enjoyment by
all the people of the blessings of democracy.
Id., §12. The natural and primary right and
duty of parents in the rearing of the youth
for civic efficiency and the development of
moral character shall receive the support of
the Government.
Id., §13. The State recognizes the vital role
of the youth in nation-building and shall
promote and protect their physical, moral,
spiritual, intellectual, and social well-being.
It shall inculcate in the youth patriotism and
nationalism, and encourage their
involvement in public and civic affairs.
Id., §17. The State shall give priority to
education, science and technology, arts,
culture, and sports to foster patriotism and
nationalism, accelerate social progress, and
promote total human liberation and
development.
As already stated, however, these provisions
are not self-executing. They do not confer
rights which can be enforced in the courts
but only provide guidelines for legislative or
executive action. By authorizing the holding
of lottery for charity, Congress has in effect
determined that consistently with these
policies and principles of the Constitution,
the PCSO may be given this authority. That
is why we said with respect to the opening
by the PAGCOR of a casino in Cagayan de
Oro, "the morality of gambling is not a
justiciable issue. Gambling is not illegalper
se. . . . It is left to Congress to deal with the
activity as it sees fit." (Magtajas v. Pryce
Properties Corp., Inc., 234 SCRA 255, 268
[1994]).
It is noteworthy that petitioners do not
question the validity of the law allowing
lotteries. It is the contract entered into by the
PCSO and the PGMC which they are
assailing. This case, therefore, does not raise
issues of constitutionality but only of
contract law, which petitioners, not being
privies to the agreement, cannot raise.
Nor does Kilosbayan's status as a people's
organization give it the requisite personality
to question the validity of the contract in this
case. The Constitution provides that "the
State shall respect the role of independent
people's organizations to enable the people
to pursue and protect, within the democratic
framework, their legitimate and collective
interests and aspirations through peaceful
and lawful means," that their right to
"effective and reasonable participation at all
levels of social, political, and economic
decision-making shall not be abridged."
(Art. XIII, §§ 15-16)
These provisions have not changed the
traditional rule that only real parties in
interest or those with standing, as the case
may be, may invoke the judicial power. The
jurisdiction of this Court, even in cases
involving constitutional questions, is limited
by the "case and controversy" requirement
of Art. VIII, §5. This requirement lies at the
very heart of the judicial function. It is what
differentiates decision-making in the courts
from decision-making in the political
departments of the government and bars the
bringing of suits by just any party.
Petitioners quote extensively from the
speech of Commissioner Garcia before the
Constitutional Commission, explaining the
provisions on independent people's
organizations. There is nothing in the
speech, however, which supports their claim
of standing. On the contrary, the speech
points the way to the legislative and
executive branches of the government,
rather than to the courts, as the appropriate
fora for the advocacy of petitioners'
views.2 Indeed, the provisions on
independent people's organizations may
most usefully be read in connection with the
provision on initiative and referendum as a
means whereby the people may propose or
enact laws or reject any of those passed by
Congress. For the fact is that petitioners'
opposition to the contract in question is
nothing more than an opposition to the
government policy on lotteries.
It is nevertheless insisted that this Court has
in the past accorded standing to taxpayers
and concerned citizens in cases involving
"paramount public interest." Taxpayers,
voters, concerned citizens and legislators
have indeed been allowed to sue but then
only (1) in cases involving constitutional
issues and
(2) under certain conditions. Petitioners do
not meet these requirements on standing.
Taxpayers are allowed to sue, for example,
where there is a claim of illegal
disbursement of public funds. (Pascual v.
Secretary of Public Works, 110 Phi. 331
(1960); Sanidad v. Comelec, 73 SCRA 333
(1976); Bugnay Const. & Dev. v. Laron, 176
SCRA 240 (1989); City Council of Cebu v.
Cuizon, 47 SCRA 325 [1972]) or where a
tax measure is assailed as unconstitutional.
(VAT Cases [Tolentino v. Secretary of
Finance], 235 SCRA 630 [1994]) Voters are
allowed to question the validity of election
laws because of their obvious interest in the
validity of such laws. (Gonzales v. Comelec,
21 SCRA 774 [1967]) Concerned
citizens can bring suits if the constitutional
question they raise is of "transcendental
importance" which must be settled early.
(Emergency Powers Cases [Araneta v.
Dinglasan], 84 Phi. 368 (1949); Iloilo Palay
and Corn Planters Ass'n v. Feliciano, 121
Phi. 358 (1965); Philconsa v. Gimenez, 122
Phi. 894 (1965); CLU v. Executive
Secretary, 194 SCRA 317
[1991]) Legislators are allowed to sue to
question the validity of any official action
which they claim infringes their
prerogatives qua legislators. (Philconsa v.
Enriquez, 235 506 (1994); Guingona v.
PCGG, 207 SCRA 659 (1992); Gonzales v.
Macaraig, 191 SCRA 452 (1990); Tolentino
v. Comelec, 41 SCRA 702 (1971); Tatad v.
Garcia, G.R. No. 114222, April 16, 1995
(Mendoza, J., concurring))
Petitioners do not have the same kind of
interest that these various litigants have.
Petitioners assert an interest as taxpayers,
but they do not meet the standing
requirement for bringing taxpayer's suits as
set forth in Dumlao v. Comelec, 95 SCRA
392, 403 (1980), to wit:
While, concededly, the elections to be held
involve the expenditure of public
moneys, nowhere in their Petition do said
petitioners allege that their tax money
is "being extracted and spent in violation of
specific constitutional protections against
abuses of legislative power" (Flast v. Cohen,
392 U.S., 83 [1960]), or that there is a
misapplication of such funds by respondent
COMELEC (see Pascual vs. Secretary of
Public Works, 110 Phil. 331 [1960]), or that
public money is being deflected to any
improper purpose. Neither do petitioners
seek to restrain respondent from wasting
public funds through the enforcement of an
invalid or unconstitutional law. (Philippine
Constitution Association vs. Mathay, 18
SCRA 300 [1966]), citing Philippine
Constitution Association vs. Gimenez, 15
SCRA 479 [1965]). Besides, the institution
of a taxpayer's suit, per se, is no assurance
of judicial review. As held by this Court in
Tan vs. Macapagal (43 SCRA 677 [1972]),
speaking through our present Chief Justice,
this Court is vested with discretion as to
whether or not a taxpayer's suit should be
entertained. (Emphasis added)
Petitioners' suit does not fall under any of
these categories of taxpayers' suits.
Neither do the other cases cited by
petitioners support their contention that
taxpayers have standing to question
government contracts regardless of whether
public funds are involved or not.
In Gonzales v. National Housing, Corp., 94
SCRA 786 (1979), petitioner filed a
taxpayer's suit seeking the annulment of a
contract between the NHC and a foreign
corporation. The case was dismissed by the
trial court. The dismissal was affirmed by
this Court on the grounds of res judicata and
pendency of a prejudicial question, thus
avoiding the question of petitioner's
standing.
On the other hand, in Gonzales v. Raquiza,
180 SCRA 254 (1989), petitioner sought the
annulment of a contract made by the
government with a foreign corporation for
the purchase of road construction
equipment. The question of standing was not
discussed, but even if it was, petitioner's
standing could be sustained because he was
a minority stockholder of the Philippine
National Bank, which was one of the
defendants in the case.
In the other case cited by petitioners, City
Council of Cebu v. Cuizon, 47 SCRA 325
(1972), members of the city council were
allowed to sue to question the validity of a
contract entered into by the city government
for the purchase of road construction
equipment because their contention was that
the contract had been made without their
authority. In addition, as taxpayers they had
an interest in seeing to it that public funds
were spent pursuant to an appropriation
made by law.
But, in the case at bar, there is an allegation
that public funds are being misapplied or
misappropriated. The controlling doctrine is
that of Gonzales v. Marcos, 65 SCRA 624
(1975) where it was held that funds raised
from contributions for the benefit of the
Cultural Center of the Philippines were not
public funds and petitioner had no standing
to bring a taxpayer's suit to question their
disbursement by the President of the
Philippines.
Thus, petitioners' right to sue as
taxpayers cannot be sustained. Nor as
concerned citizens can they bring this suit
because no specific injury suffered by them
is alleged. As for the petitioners, who are
members of Congress, their right to sue as
legislators cannot be invoked because they
do not complain of any infringement of their
rights as legislators.
Finally, in Valmonte v. PCSO, G.R. No.
78716, September 22, 1987, we threw out a
petition questioning another form of lottery
conducted by the PCSO on the ground that
petitioner, who claimed to be a "citizen,
lawyer, taxpayer and father of three minor
children," had no direct and personal interest
in the lottery. We said: "He must be able to
show, not only that the law is invalid, but
also that he has sustained or is in immediate
danger of sustaining some direct injury as a
result of its enforcement, and not merely that
he suffers thereby in some indefinite way. It
must appear that the person complaining
has been or is about to be denied some right
or privilege to which he is lawfully entitled
or that he is about to be subjected to some
burdens or penalties by reason of the statute
complained of." In the case at bar,
petitioners have not shown why, unlike
petitioner in the Valmonte case, they should
be accorded standing to bring this suit.
The case of Oposa v. Factoran, Jr. 224
SCRA 792 (1993) is different. Citizens'
standing to bring a suit seeking the
cancellation of timber licenses was sustained
in that case because the Court considered
Art. II, §16 a right-conferring provision
which can be enforced in the courts. That
provision states:
The State shall protect and advance the right
of the people to a balanced and healthful
ecology in accord with the rhythm and
harmony of nature. (Emphasis)
In contrast, the policies and principles
invoked by petitioners in this case do not
permit of such categorization.
Indeed, as already stated, petitioners'
opposition is not really to the validity of the
ELA but to lotteries which they regard to be
immoral. This is not, however, a legal issue,
but a policy matter for Congress to decide
and Congress has permitted lotteries for
charity.
Nevertheless, although we have concluded
that petitioners do not have standing, we
have not stopped there and dismissed their
case. For in the view we take, whether a
party has a cause of action and, therefore, is
a real party in interest or one with standing
to raise a constitutional question must turn
on whether he has a right which has been
violated. For this reason the Court has not
ducked the substantive issues raised by
petitioners.
II. R.A. No. 1169, as amended by B.P No .
42, states:
§1. The Philippine Charity Sweepstakes
Office. — The Philippine Charity
Sweepstakes Office, hereinafter designated
the Office, shall be the principal government
agency for raising and providing for funds
for health programs, medical assistance and
services and charities of national character,
and as such shall have the general powers
conferred in section thirteen of Act
Numbered One Thousand Four Hundred
Fifty-Nine, as amended, and shall have the
authority:
A. To hold and conduct charity sweepstakes
races, lotteries and other similar activities, in
such frequency and manner, as shall be
determined, and subject to such rules and
regulations as shall be promulgated by the
Board of Directors.
B. Subject to the approval of the Minister of
Human Settlements, to engage in health and
welfare-related investments, programs,
projects and activities which may be profit-
oriented, by itself or in collaboration,
association or joint venture with any person,
association, company or entity, whether
domestic or foreign, except for the activities
mentioned in the preceding paragraph (A),
for the purpose of providing for permanent
and continuing sources of funds for health
programs, including the expansion of
existing ones, medical assistance and
services, and/or charitable grants: Provided,
That such investments will not compete with
the private sector in areas where investments
are adequate as may be determined by the
National Economic and Development
Authority.
Petitioners insist on the ruling in the
previous case that the PCSO cannot hold
and conduct charity sweepstakes, lotteries
and other similar activities in collaboration,
association or joint venture with any other
party because of the clause "except for the
activities mentioned in the preceding
paragraph (A)" in paragraph (B) of §1.
Petitioners contend that the ruling is the law
of this case because the parties are the same
and the case involves the same issue, i.e., the
meaning of this statutory provision.
The "law of the case" doctrine is
inapplicable, because this case is not a
continuation of the first one. Petitioners also
say that inquiry into the same question as to
the meaning of the statutory provision is
barred by the doctrine of res judicata. The
general rule on the "conclusiveness of
judgment," however, is subject to the
exception that a question may be reopened if
it is a legal question and the two actions
involve substantially different claims. This is
generally accepted in American law from
which our Rules of Court was adopted.
(Montana v. United States, 440 U.S. 59
L.Ed.2d 147, 210 (1979); RESTATEMENT
OF THE LAW 2d, ON JUDGMENTS, §28;
P. BATOR, D. MELTZER, P. MISHKIN
AND D. SHAPIRO, THE FEDERAL
COURTS AND THE FEDERAL SYSTEM
1058, n.2 [3rd Ed., 1988]) There is nothing
in the record of this case to suggest that this
exception is inapplicable in this jurisdiction.
Indeed, the questions raised in this case are
legal questions and the claims involved are
substantially different from those involved
in the prior case between the parties. As
already stated, the ELA is substantially
different from the Contract of Lease
declared void in the first case.
Borrowing from the dissenting opinion of
Justice Feliciano, petitioners argue that the
phrase "by itself or in collaboration,
association or joint venture with any other
party" qualifies not only §1 (B) but also §1
(A), because the exception clause ("except
for the activities mentioned in the preceding
paragraph [A]") "operates, as it were, as
a renvoi clause which refers back to Section
1(A) and in this manner avoids the necessity
of simultaneously amending the text of
Section 1(A)."
This interpretation, however, fails to take
into account not only the location of the
phrase in paragraph (B), when it should be
in paragraph (A) had that been the intention
of the lawmaking authority, but also the
phrase "by itself." In other words, under
paragraph (B), the PCSO is prohibited from
"engag[ing] in . . . investments, programs,
projects and activities" if these involve
sweepstakes races, lotteries and other similar
activities not only "in collaboration,
association or joint venture" with any other
party but also "by itself." Obviously, this
prohibition cannot apply when the PCSO
conducts these activities itself. Otherwise,
what paragraph (A) authorizes the PCSO to
do, paragraph (B) would prohibit.
The fact is that the phrase in question does
not qualify the authority of the PCSO under
paragraph (A), but rather the authority
granted to it by paragraph (B). The
amendment of paragraph (B) by B.P. Blg. 42
was intended to enable the PCSO to engage
in certain investments, programs, projects
and activities for the purpose of raising
funds for health programs and charity. That
is why the law provides that such
investments by the PCSO should "not
compete with the private sector in areas
where investments are adequate as may be
determined by the National Economic and
Development Authority." Justice Davide,
then an Assemblyman, made a proposal
which was accepted, reflecting the
understanding that the bill they were
discussing concerned the authority of the
PCSO to invest in the business of others.
The following excerpt from the Record of
the Batasan Pambansa shows this to be the
subject of the discussion:
MR. DAVIDE. May I introduce an
amendment after "adequate". The intention
of the amendment is not to leave the
determination of whether it is adequate or
not to anybody. And my amendment is to
add after "adequate" the words AS MAY BE
DETERMINED BY THE NATIONAL
ECONOMIC AND DEVELOPMENT
AUTHORITY. As a mater of fact, it will
strengthen the authority to invest in these
areas, provided that the determination of
whether the private sector's activity is
already adequate must be determined by the
National Economic and Development
Authority.
Mr. ZAMORA. Mr. Speaker, the committee
accepts the proposed amendment.
MR. DAVIDE. Thank you, Mr. Speaker.
(2 RECORD OF THE BATASAN
PAMBANSA, Sept. 6, 1979,
p. 1007)
Thus what the PCSO is prohibited from
doing is from investing in a business
engaged in sweepstakes races, lotteries and
other similar activities. It is prohibited from
doing so whether "in collaboration,
association or joint venture" with others
or "by itself." This seems to be the only
possible interpretation of §1 (A) and (B) in
light of its text and its legislative history.
That there is today no other entity engaged
in sweepstakes races, lotteries and the like
does not detract from the validity of this
interpretation.
III. The Court noted in its decision that the
provisions of the first contract, which were
considered to be features of a joint venture
agreement, had been removed in the new
contract. For instance, §5 of the ELA
provides that in the operation of the on-line
lottery, the PCSO must employ "its own
competent and qualified personnel."
Petitioners claim, however, that the
"contemporaneous interpretation" of PGMC
officials of this provision is otherwise. They
cite the testimony of Glen Barroga of the
PGMC before a Senate committee to the
effect that under the ELA the PGMC would
be operating the lottery system "side by
side" with PCSO personnel as part of the
transfer of technology.
Whether the transfer of technology would
result in a violation of PCSO's franchise
should be determined by facts and not by
what some officials of the PGMC state by
way of opinion. In the absence of proof to
the contrary, it must be presumed that §5
reflects the true intention of the parties.
Thus, Art. 1370 of the Civil Code says that
"If the terms of a contract are clear and leave
no doubt upon the intention of the
contracting parties, the literal meaning of its
stipulations shall control." The intention of
the parties must be ascertained from their
"contemporaneous and subsequent acts."
(Art. 1371; Atlantic Gulf Co. v. Insular
Government, 10 Phil. 166 [1908]) It cannot
simply be judged from what one of them
says. On the other hand, the claim of third
parties, like petitioners, that the clause on
upgrading of equipment would enable the
parties after a while to change the contract
and enter into something else in violation of
the law is mere speculation and cannot be a
basis for judging the validity of the contract.
IV. It is contended that §1 of E.O. No. 301
covers all types of "contract[s] for public
services or for furnishing of supplies,
materials and equipment to the government
or to any of its branches, agencies or
instrumentalities" and not only contracts of
purchase and sale. Consequently, a lease of
equipment, like the ELA, must be submitted
to public bidding in order to be valid. This
contention is based on two premises: (1) that
§1 of E.O. No. 301 applies to any contract
whereby the government acquires title to or
the use of the equipment and (2) that the
words "supplies," "materials," and
"equipment" are distinct from each other so
that when an exception in §1 speaks of
"supplies," it cannot be construed to mean
"equipment."
Petitioners' contention will not bear analysis.
For example, the term "supplies" is used in
paragraph (a), which provides that a contract
for the furnishing of "supplies" in order to
meet an emergency is exempt from public
bidding. Unless "supplies" is construed to
include "equipment," however, the lease of
heavy equipment needed for rescue
operations in case of a calamity will have to
be submitted to public bidding before it can
be entered into by the government.
In dissent Justice Feliciano says that in such
a situation the government can simply resort
to expropriation, paying compensation
afterward. This is just like purchasing the
equipment through negotiation when the
question is whether the purchase should be
by public bidding, not to mention the fact
that the power to expropriate may not be
exercised when the government can very
well negotiate with private owners.
Indeed, there are fundamental difficulties in
simultaneously contending (1) that E.O. No.
301, §1 covers both contracts of sale and
lease agreements and (2) that the words
"supplies," "materials" and "equipment" can
not be interchanged. Thus, under paragraph
(b) of §1, public bidding is not required
"whenever the supplies are to be used in
connection with a project or activity which
cannot be delayed without causing detriment
to the public service." Following petitioners'
theory, there should be a public bidding
before the government can enter into a
contract for the lease of bulldozers and
dredging equipment even if these are
urgently needed in areas ravaged by lahar
because, first, lease contracts are covered by
the general rule and, second, the exception
to public bidding in paragraph (b) covers
only "supplies" but not equipment.
To take still another example. Paragraph (d),
which does away with the requirement of
public bidding "whenever the supplies under
procurement have been unsuccessfully
placed on bid for at least two consecutive
times, either due to lack of bidders or the
offers received in each instance were
exorbitant or nonconforming to
specifications." Again, following the theory
of the petitioners, a contract for the lease of
equipment cannot be entered into even if
there are no bids because, first, lease
contracts are governed by the general rule
on public bidding and, second, the exception
to public bidding in paragraph (d) applies
only to contracts for the furnishing of
"supplies."
Other examples can be given to show the
absurdity of interpreting §1 as applicable to
any contract for the furnishing of supplies,
materials and equipment and of considering
the words "supplies," "materials" and
"equipment" to be not interchangeable. Our
ruling that §1 of E.O. No. 301 does not
cover the lease of equipment avoids these
fundamental difficulties and is supported by
the text of §1, which is entitled "Guidelines
for Negotiated Contracts" and by the fact
that the only provisions of E.O. No. 301 on
leases, namely, §§6 and 7, concern the lease
of buildings by or to the government. Thus
the text of §1 reads:
§1. Guidelines for Negotiated Contracts. —
Any provision of law, decree, executive
order or other issuances to the contrary
notwithstanding, no contract for public
services or for furnishing supplies, materials
and equipment to the government or any of
its branches, agencies or instrumentalities
shall be renewed or entered into without
public bidding, except under any of the
following situations:
a. Whenever the supplies are urgently
needed to meet an emergency which may
involve the loss of, or danger to, life and/or
property;
b. Whenever the supplies are to be used in
connection with a project or activity which
cannot be delayed without causing detriment
to the public service;
c. Whenever the materials are sold by an
exclusive distributor or manufacturer who
does not have subdealers selling at lower
prices and for which no suitable substitute
can be obtained elsewhere at more
advantageous terms to the government;
d. Whenever the supplies under procurement
have been unsuccessfully placed on bid for
at least two consecutive times, either due to
lack of bidders or the offers received in each
instance were exhorbitant or non-
conforming to specifications;
e. In cases where it is apparent that the
requisition of the needed supplies through
negotiated purchase is most advantageous to
the government to be determined by the
Department Head concerned; and
f. Whenever the purchase is made from an
agency of the government.
Indeed, the purpose for promulgating E.O.
No. 301 was merely to decentralize the
system of reviewing negotiated contracts of
purchase for the furnishing of supplies,
materials and equipment as well as lease
contracts of buildings. Theretofore, E.O. No.
298, promulgated on August 12, 1940,
required consultation with the Secretary of
Justice and the Department Head concerned
and the approval of the President of the
Philippines before contracts for the
furnishing of supplies, materials and
equipment could be made on a negotiated
basis, without public bidding. E.O. No. 301
changed this by providing as follows:
§2. Jurisdiction over Negotiated Contracts.
— In line with the principles of
decentralization and accountability,
negotiated contracts for public services or
for furnishing supplies, materials or
equipment may be entered into by the
department or agency head or the governing
board of the government-owned or
controlled corporation concerned, without
need of prior approval by higher authorities,
subject to availability of funds, compliance
with the standards or guidelines prescribed
in Section 1 hereof, and to the audit
jurisdiction of the commission on Audit in
accordance with existing rules and
regulations.
Negotiated contracts involving P2,000,000
up to P10,000,000 shall be signed by the
Secretary and two other Undersecretaries.
xxx xxx xxx
§7. Jurisdiction Over Lease Contracts. —
The heads of agency intending to rent
privately-owned buildings or spaces for their
use, or to lease out government-owned
buildings or spaces for private use, shall
have authority to determine the
reasonableness of the terms of the lease and
the rental rates thereof, and to enter into
such lease contracts without need of prior
approval by higher authorities, subject to
compliance with the uniform standards or
guidelines established pursuant to Section 6
hereof by the DPWH and to the audit
jurisdiction of COA or its duly authorized
representative in accordance with existing
rules and regulations.
In sum, E.O. No. 301 applies only to
contracts for the purchase of supplies,
materials and equipment, and it was merely
to change the system of administrative
review of emergency purchases, as
theretofore prescribed by E.O. No. 298, that
E.O. No. 301 was issued on July 26, 1987.
Part B of this Executive Order applies to
leases of buildings, not of equipment, and
therefore does not govern the lease contract
in this case. Even if it applies, it does not
require public bidding for entering into it.
Our holding that E.O. No. 301, §1 applies
only to contracts of purchase and sale is
conformable to P.D. No. 526, promulgated
on August 2, 1974, which is in pari materia.
P.D. No. 526 requires local governments to
hold public bidding in the "procurement of
supplies." By specifying "procurement of
supplies" and excepting from the general
rule "purchases" when made under certain
circumstances, P.D. No. 526, §12 indicates
quite clearly that it applies only to contracts
of purchase and sale. This provision reads:
§12. Procurement without public bidding.
— Procurement of supplies may be made
without the benefit of public bidding in the
following modes:
(1) Personal canvass of
responsible merchants;
(2) Emergency purchases;
(3) Direct purchases from manufacturers or
exclusive distributors;
(4) Thru the Bureau of Supply Coordination;
and
(5) Purchase from other government
entities or foreign governments.
Sec. 3 broadly defines the term "supplies" as
including —
everything except real estate, which may be
needed in the transaction of public business,
or in the pursuit of any undertaking, project,
or activity, whether of the nature of
equipment, furniture, stationery, materials
for construction, or personal property of any
sort, including non-personal or contractual
services such as the repair and maintenance
of equipment and furniture, as well as
trucking, hauling, janitorial, security, and
related or analogous services.

Thus, the texts of both E.O. No. 301, §1 and

of P.D. No. 526, §§1 and 12, make it clear
that only contracts for the purchase and sale
of supplies, materials and equipment are
contemplated by the rule concerning public
biddings.

Finally, it is contended that equipment

leases are attractive and commonly used in
place of contracts of purchase and sale
because of "multifarious credit and tax
constraints" and therefore could not have
been left out from the requirement of public
bidding. Obviously these credit and tax
constraints can have no attraction to the
government when considering the
advantages of sale over lease of equipment.
The fact that lease contracts are in common
use is not a reason for implying that the rule
on public bidding applies not only to
government purchases but also to lease
contracts. For the fact also is that the
government leases equipment, such as
copying machines, personal computers and
the like, without going through public
bidding.

FOR THE FOREGOING REASONS, the

motion for reconsideration of petitioners is
DENIED with finality.

SO ORDERED.
 Bar Matter No. 553 June 17, 1993
MAURICIO C. ULEP, Petitioner,
vs. THE LEGAL CLINIC,
INC., Respondent.
R E SO L U T I O N
REGALADO, J.:
Petitioner prays this Court "to order the
respondent to cease and desist from issuing
advertisements similar to or of the same
tenor as that of annexes "A" and "B" (of said
petition) and to perpetually prohibit persons
or entities from making advertisements
pertaining to the exercise of the law
profession other than those allowed by law."
The advertisements complained of by herein
petitioner are as follows:
Annex A
SECRET MARRIAGE?
P560.00 for a valid marriage.
Info on DIVORCE. ABSENCE.
ANNULMENT. VISA.
THE Please call: 521-0767 LEGAL
5217232, 5222041 CLINIC, INC. 8:30 am-
6:00 pm 7-Flr. Victoria Bldg., UN Ave.,
Mla.
Annex B
GUAM DIVORCE.
DON PARKINSO
an Attorney in Guam, is giving FREE
BOOKS on Guam Divorce through The
Legal Clinic beginning Monday to Friday
during office
hours.chanroblesvirtualawlibrar
Guam divorce. Annulment of Marriage.
Immigration Problems, Visa Ext.
Quota/Non-quota Res. & Special Retiree's
Visa. Declaration of Absence. Remarriage to
Filipina Fiancees. Adoption. Investment in
the Phil. US/Foreign Visa for Filipina
Spouse/Children. Call Marivic
THE 7F Victoria Bldg. 429 UN Ave.,
LEGAL Ermita, Manila nr. US Embassy
CLINIC, INC. 1 Tel. 521-7232; 521-7251;
522-2041; 521-0767
It is the submission of petitioner that the
advertisements above reproduced are
champterous, unethical, demeaning of the
law profession, and destructive of the
confidence of the community in the integrity
of the members of the bar and that, as a
member of the legal profession, he is
ashamed and offended by the said
advertisements, hence the reliefs sought in
his petition as hereinbefore
quoted.chanroblesvirtualawlibrar
In its answer to the petition, respondent
admits the fact of publication of said
advertisement at its instance, but claims that
it is not engaged in the practice of law but in
the rendering of "legal support services"
through paralegals with the use of modern
computers and electronic machines.
Respondent further argues that assuming
that the services advertised are legal
services, the act of advertising these services
should be allowed supposedly
in the light of the case of John R. Bates and
Van O'Steen vs. State Bar of
2
Arizona, reportedly decided by the United
States Supreme Court on June 7,
1977.chanroblesvirtualawlibrar
Considering the critical implications on the
legal profession of the issues raised herein,
we required the (1) Integrated Bar of the
Philippines (IBP), (2) Philippine Bar
Association (PBA), (3) Philippine Lawyers'
Association (PLA), (4) U.P. Womens
Lawyers' Circle (WILOCI), (5) Women
Lawyers Association of the Philippines
(WLAP), and (6) Federacion International
de Abogadas (FIDA) to submit their
respective position papers on the
controversy and, thereafter, their
3
memoranda. The said bar associations
readily responded and extended their
valuable services and cooperation of which
this Court takes note with appreciation and
gratitude.chanroblesvirtualawlibrar
The main issues posed for resolution before
the Court are whether or not the services
offered by respondent, The Legal Clinic,
Inc., as advertised by it constitutes practice
of law and, in either case, whether the same
can properly be the subject of the
advertisements herein complained
of.chanroblesvirtualawlibrar
Before proceeding with an in-depth analysis
of the merits of this case, we deem it proper
and enlightening to present hereunder
excerpts from the respective position papers
adopted by the aforementioned bar
associations and the memoranda submitted
by them on the issues involved in this bar
matter.
1. Integrated Bar of the Philippines:
xxx xxx xx
Notwithstanding the subtle manner by which
respondent endeavored to distinguish the
two terms, i.e., "legal support services" vis-
a-vis "legal services", common sense would
readily dictate that the same are essentially
without substantial distinction. For who
could deny that document search, evidence
gathering, assistance to layman in need of
basic institutional services from government
or non-government agencies like birth,
marriage, property, or business registration,
obtaining documents like clearance,
passports, local or foreign visas, constitutes
practice of law?
xxx xxx xx
The Integrated Bar of the Philippines (IBP)
does not wish to make issue with
respondent's foreign citations. Suffice it to
state that the IBP has made its position
manifest, to wit, that it strongly opposes the
view espoused by respondent (to the effect
that today it is alright to advertise one's legal
services).chanroblesvirtualawlibrary
The IBP accordingly declares in no
uncertain terms its opposition to
respondent's act of establishing a "legal
clinic" and of concomitantly advertising the
same through newspaper publications.
The IBP would therefore invoke the
administrative supervision of this Honorable
Court to perpetually restrain respondent
from undertaking highly unethical activities
in the field of law practice as
aforedescribed. 4
xxx xxx xxx
A. The use of the name "The Legal Clinic,
Inc." gives the impression that respondent
corporation is being operated by lawyers and
that it renders legal services.
While the respondent repeatedly denies that
it offers legal services to the public, the
advertisements in question give the
impression that respondent is offering legal
services. The Petition in fact simply assumes
this to be so, as earlier mentioned,
apparently because this (is) the effect that
the advertisements have on the reading
public.
The impression created by the
advertisements in question can be traced,
first of all, to the very name being used by
respondent - "The Legal Clinic, Inc." Such a
name, it is respectfully submitted connotes
the rendering of legal services for legal
problems, just like a medical clinic connotes
medical services for medical problems.
More importantly, the term "Legal Clinic"
connotes lawyers, as the term medical clinic
connotes doctors.chanroblesvirtualawlibrary
Furthermore, the respondent's name, as
published in the advertisements subject of
the present case, appears with (the) scale(s)
of justice, which all the more reinforces the
impression that it is being operated by
members of the bar and that it offers legal
services. In addition, the advertisements in
question appear with a picture and name of a
person being represented as a lawyer from
Guam, and this practically removes
whatever doubt may still remain as to the
nature of the service or services being
offered.chanroblesvirtualawlibrar
It thus becomes irrelevant whether
respondent is merely offering "legal support
services" as claimed by it, or whether it
offers legal services as any lawyer actively
engaged in law practice does. And it
becomes unnecessary to make a distinction
between "legal services" and "legal support
services," as the respondent would have it.
The advertisements in question leave no
room for doubt in the minds of the reading
public that legal services are being offered
by lawyers, whether true or
not.chanroblesvirtualawlibrary
B. The advertisements in question are meant
to induce the performance of acts contrary to
law, morals, public order and public
policy.chanroblesvirtualawlibrary
It may be conceded that, as the respondent
claims, the advertisements in question are
only meant to inform the general public of
the services being offered by it. Said
advertisements, however, emphasize to
Guam divorce, and any law student ought to
know that under the Family Code, there is
only one instance when a foreign divorce is
recognized, and that is:
Article 26. . . .chanroblesvirtualawlibrary
Where a marriage between a Filipino citizen
and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad
by the alien spouse capacitating him or her
to remarry, the Filipino spouse shall have
capacity to remarry under Philippine Law.
It must not be forgotten, too, that the Family
Code (defines) a marriage as follows:
Article 1. Marriage is special contract of
permanent union between a man and woman
entered into accordance with law for the
establishment of conjugal and family life. It
is the foundation of the family and an
inviolable social institution whose nature,
consequences, and incidents are governed by
law and not subject to stipulation, except
that marriage settlements may fix the
property relation during the marriage within
the limits provided by this Code.
By simply reading the questioned
advertisements, it is obvious that the
message being conveyed is that Filipinos
can avoid the legal consequences of a
marriage celebrated in accordance with our
law, by simply going to Guam for a divorce.
This is not only misleading, but encourages,
or serves to induce, violation of Philippine
law. At the very least, this can be considered
"the dark side" of legal practice, where
certain defects in Philippine laws are
exploited for the sake of profit. At worst,
this is outright malpractice.
Rule 1.02. - A lawyer shall not counsel or
abet activities aimed at defiance of the law
or at lessening confidence in the legal
system.
In addition, it may also be relevant to point
out that advertisements such as that shown
in Annex "A" of the Petition, which contains
a cartoon of a motor vehicle with the words
"Just Married" on its bumper and seems to
address those planning a "secret marriage,"
if not suggesting a "secret marriage," makes
light of the "special contract of permanent
union," the inviolable social institution,"
which is how the Family Code describes
marriage, obviously to emphasize its
sanctity and inviolability. Worse, this
particular advertisement appears to
encourage marriages celebrated in secrecy,
which is suggestive of immoral publication
of applications for a marriage
license.chanroblesvirtualawlibrary
If the article "Rx for Legal Problems" is to
be reviewed, it can readily be concluded that
the above impressions one may gather from
the advertisements in question are accurate.
The Sharon Cuneta-Gabby Concepcion
example alone confirms what the
advertisements suggest. Here it can be seen
that criminal acts are being encouraged or
committed
(a bigamous marriage in Hong Kong or Las
Vegas) with impunity simply because the
jurisdiction of Philippine courts does not
extend to the place where the crime is
committed.chanroblesvirtualawlibrary
Even if it be assumed, arguendo, (that) the
"legal support services" respondent offers do
not constitute legal services as commonly
understood, the advertisements in question
give the impression that respondent
corporation is being operated by lawyers and
that it offers legal services, as earlier
discussed. Thus, the only logical
consequence is that, in the eyes of an
ordinary newspaper reader, members of the
bar themselves are encouraging or inducing
the performance of acts which are contrary
to law, morals, good customs and the public
good, thereby destroying and demeaning the
integrity of the Bar.
xxx xxx xxx
It is respectfully submitted that respondent
should be enjoined from causing the
publication of the advertisements in
question, or any other advertisements similar
thereto. It is also submitted that respondent
should be prohibited from further
performing or offering some of the services
it presently offers, or, at the very least, from
offering such services to the public in
general.chanroblesvirtualawlibrary
The IBP is aware of the fact that providing
computerized legal research, electronic data
gathering, storage and retrieval, standardized
legal forms, investigators for gathering of
evidence, and like services will greatly
benefit the legal profession and should not
be stifled but instead encouraged. However,
when the conduct of such business by non-
members of the Bar encroaches upon the
practice of law, there can be no choice but to
prohibit such
business.chanroblesvirtualawlibrary
Admittedly, many of the services involved
in the case at bar can be better performed by
specialists in other fields, such as computer
experts, who by reason of their having
devoted time and effort exclusively to such
field cannot fulfill the exacting requirements
for admission to the Bar. To prohibit them
from "encroaching" upon the legal
profession will deny the profession of the
great benefits and advantages of modern
technology. Indeed, a lawyer using a
computer will be doing better than a lawyer
using a typewriter, even if both are (equal)
in skill.chanroblesvirtualawlibrary
Both the Bench and the Bar, however,
should be careful not to allow or tolerate the
illegal practice of law in any form, not only
for the protection of members of the Bar but
also, and more importantly, for the
protection of the public. Technological
development in the profession may be
encouraged without tolerating, but instead
ensuring prevention of illegal
practice.chanroblesvirtualawlibrary
There might be nothing objectionable if
respondent is allowed to perform all of its
services, but only if such services are made
available exclusively to members of the
Bench and Bar. Respondent would then be
offering technical assistance, not legal
services. Alternatively, the more difficult
task of carefully distinguishing between
which service may be offered to the public
in general and which should be made
available exclusively to members of the Bar
may be undertaken. This, however, may
require further proceedings because of the
factual considerations
involved.chanroblesvirtualawlibrary
It must be emphasized, however, that some
of respondent's services ought to be
prohibited outright, such as acts which tend
to suggest or induce celebration abroad of
marriages which are bigamous or otherwise
illegal and void under Philippine law. While
respondent may not be prohibited from
simply disseminating information regarding
such matters, it must be required to include,
in the information given, a disclaimer that it
is not authorized to practice law, that certain
course of action may be illegal under
Philippine law, that it is not authorized or
capable of rendering a legal opinion, that a
lawyer should be consulted before deciding
on which course of action to take, and that it
cannot recommend any particular lawyer
without subjecting itself to possible
sanctions for illegal practice of
law.chanroblesvirtualawlibrary
If respondent is allowed to advertise,
advertising should be directed exclusively at
members of the Bar, with a clear and
unmistakable disclaimer that it is not
authorized to practice law or perform legal
services.chanroblesvirtualawlibrary
The benefits of being assisted by paralegals
cannot be ignored. But nobody should be
allowed to represent himself as a "paralegal"
for profit, without such term being clearly
defined by rule or regulation, and without
any adequate and effective means of
regulating his activities. Also, law practice
in a corporate form may prove to be
advantageous to the legal profession, but
before allowance of such practice may be
considered, the corporation's Article of
Incorporation and By-laws must conform to
each and every provision of the Code of
Professional Responsibility and the Rules of
Court. 5
2. Philippine Bar Association:
xxx xxx xxx.chanroblesvirtualawlibrary
Respondent asserts that it "is not engaged in
the practice of law but engaged in giving
legal support services to lawyers and
laymen, through experienced paralegals,
with the use of modern computers and
electronic machines" (pars. 2 and 3,
Comment). This is absurd. Unquestionably,
respondent's acts of holding out itself to the
public under the trade name "The Legal
Clinic, Inc.," and soliciting employment for
its enumerated services fall within the realm
of a practice which thus yields itself to the
regulatory powers of the Supreme Court.
For respondent to say that it is merely
engaged in paralegal work is to stretch
credulity. Respondent's own commercial
advertisement which announces a
certain Atty. Don Parkinsonto be handling
the fields of law belies its pretense. From all
indications, respondent "The Legal Clinic,
Inc." is offering and rendering legal
services through its reserve of lawyers. It
has been held that the practice of law is not
limited to the conduct of cases in court, but
includes drawing of deeds, incorporation,
rendering opinions, and advising clients as
to their legal right and then take them to an
attorney and ask the latter to look after their
case in court See Martin, Legal and Judicial
Ethics, 1984 ed., p.
39).chanroblesvirtualawlibrary
It is apt to recall that only natural
persons can engage in the practice of law,
and such limitation cannot be evaded by
a corporation employing competent lawyers
to practice for it. Obviously, this is the
scheme or device by which respondent "The
Legal Clinic, Inc." holds out itself to the
public and solicits employment of its legal
services. It is an odious vehicle for
deception, especially so when the public
cannot ventilate any grievance
for malpractice against the business conduit.
Precisely, the limitation of practice of law to
persons who have been duly admitted as
members of the Bar (Sec. 1, Rule 138,
Revised Rules of Court) is to subject the
members to the discipline of the Supreme
Court. Although respondent uses its business
name, the persons and the lawyers who act
for it are subject to court discipline. The
practice of law is not a profession open to all
who wish to engage in it nor can it be
assigned to another (See 5 Am. Jur. 270). It
is a personal rightlimited to persons who
have qualified themselves under the law. It
follows that not only respondent but also all
the persons who are acting for respondent
are the persons engaged in unethical law
practice. 6
3. Philippine Lawyers' Association:
The Philippine Lawyers' Association's
position, in answer to the issues stated
herein, are wit:
1. The Legal Clinic is engaged in the
practice of law;
2. Such practice is unauthorized;
3. The advertisements complained of are not
only unethical, but also misleading and
patently immoral; and
4. The Honorable Supreme Court has the
power to supress and punish the Legal
Clinic and its corporate officers for its
unauthorized practice of law and for its
unethical, misleading and immoral
advertising.
xxx xxx xxx
Respondent posits that is it not engaged in
the practice of law. It claims that it merely
renders "legal support services" to answers,
litigants and the general public as enunciated
in the Primary Purpose Clause of its
Article(s) of Incorporation. (See pages 2 to 5
of Respondent's Comment). But its
advertised services, as enumerated above,
clearly and convincingly show that it is
indeed engaged in law practice, albeit
outside of court.chanroblesvirtualawlibrary
As advertised, it offers the general public its
advisory services on Persons and Family
Relations Law, particularly regarding
foreign divorces, annulment of marriages,
secret marriages, absence and adoption;
Immigration Laws, particularly on visa
related problems, immigration problems; the
Investments Law of the Philippines and such
other related
laws.chanroblesvirtualawlibrary
Its advertised services unmistakably require
the application of the aforesaid law, the legal
principles and procedures related thereto, the
legal advices based thereon and which
activities call for legal training, knowledge
and experience.chanroblesvirtualawlibrar
Applying the test laid down by the Court in
the aforecited Agrava Case, the activities of
respondent fall squarely and are embraced in
what lawyers and laymen equally term as
"the practice of law." 7
4. U.P. Women Lawyers' Circle
In resolving, the issues before this
Honorable Court, paramount consideration
should be given to the protection of the
general public from the danger of being
exploited by unqualified persons or entities
who may be engaged in the practice of
law.chanroblesvirtualawlibrar
At present, becoming a lawyer requires one
to take a rigorous four-year course of study
on top of a four-year bachelor of arts or
sciences course and then to take and pass the
bar examinations. Only then, is a lawyer
qualified to practice
law.chanroblesvirtualawlibrar
While the use of a paralegal is sanctioned in
many jurisdiction as an aid to the
administration of justice, there are in those
jurisdictions, courses of study and/or
standards which would qualify these
paralegals to deal with the general public as
such. While it may now be the opportune
time to establish these courses of study
and/or standards, the fact remains that at
present, these do not exist in the Philippines.
In the meantime, this Honorable Court may
decide to make measures to protect the
general public from being exploited by those
who may be dealing with the general public
in the guise of being "paralegals" without
being qualified to do
so.chanroblesvirtualawlibrary
In the same manner, the general public
should also be protected from the dangers
which may be brought about by advertising
of legal services. While it appears that
lawyers are prohibited under the present
Code of Professional Responsibility from
advertising, it appears in the instant case that
legal services are being advertised not by
lawyers but by an entity staffed by
"paralegals." Clearly, measures should be
taken to protect the general public from
falling prey to those who advertise legal
services without being qualified to offer
such services. 8
A perusal of the questioned advertisements
of Respondent, however, seems to give the
impression that information regarding
validity of marriages, divorce, annulment of
marriage, immigration, visa extensions,
declaration of absence, adoption and foreign
investment, which are in essence, legal
matters , will be given to them if they avail
of its services. The Respondent's name - The
Legal Clinic, Inc. - does not help matters. It
gives the impression again that Respondent
will or can cure the legal problems brought
to them. Assuming that Respondent is, as
claimed, staffed purely by paralegals, it also
gives the misleading impression that there
are lawyers involved in The Legal Clinic,
Inc., as there are doctors in any medical
clinic, when only "paralegals" are involved
in The Legal Clinic,
Inc.chanroblesvirtualawlibrary
Respondent's allegations are further belied
by the very admissions of its President and
majority stockholder, Atty. Nogales, who
gave an insight on the structure and main
purpose of Respondent corporation in the
aforementioned "Starweek" article." 9
5. Women Lawyer's Association of the
Philippines:
Annexes "A" and "B" of the petition are
clearly advertisements to solicit cases for the
purpose of gain which, as provided for under
the above cited law, (are) illegal and against
the Code of Professional Responsibility of
lawyers in this
country.chanroblesvirtualawlibrary
Annex "A" of the petition is not only illegal
in that it is an advertisement to solicit cases,
but it is illegal in that in bold letters it
announces that the Legal Clinic, Inc., could
work out/cause the celebration of a secret
marriage which is not only illegal but
immoral in this country. While it is
advertised that one has to go to said agency
and pay P560 for a valid marriage it is
certainly fooling the public for valid
marriages in the Philippines are solemnized
only by officers authorized to do so under
the law. And to employ an agency for said
purpose of contracting marriage is not
necessary.chanroblesvirtualawlibrary
No amount of reasoning that in the USA,
Canada and other countries the trend is
towards allowing lawyers to advertise their
special skills to enable people to obtain from
qualified practitioners legal services for their
particular needs can justify the use of
advertisements such as are the subject matter
of the petition, for one (cannot) justify an
illegal act even by whatever merit the illegal
act may serve. The law has yet to be
amended so that such act could become
justifiable.chanroblesvirtualawlibrar
We submit further that these advertisements
that seem to project that secret marriages
and divorce are possible in this country for a
fee, when in fact it is not so, are highly
reprehensible.chanroblesvirtualawlibrar
It would encourage people to consult this
clinic about how they could go about having
a secret marriage here, when it cannot nor
should ever be attempted, and seek advice
on divorce, where in this country there is
none, except under the Code of Muslim
Personal Laws in the Philippines. It is also
against good morals and is deceitful because
it falsely represents to the public to be able
to do that which by our laws cannot be done
(and) by our Code of Morals should not be
done.chanroblesvirtualawlibrar
In the case (of) In re Taguda, 53 Phil. 37, the
Supreme Court held that solicitation for
clients by an attorney by circulars of
advertisements, is unprofessional, and
offenses of this character justify permanent
elimination from the Bar. 10
6. Federacion Internacional de Abogados:
xxx xxx xx
1.7 That entities admittedly not engaged in
the practice of law, such as management
consultancy firms or travel agencies,
whether run by lawyers or not, perform the
services rendered by Respondent does not
necessarily lead to the conclusion that
Respondent is not unlawfully practicing law.
In the same vein, however, the fact that the
business of respondent (assuming it can be
engaged in independently of the practice of
law) involves knowledge of the law does not
necessarily make respondent guilty of
unlawful practice of law.
. . . . Of necessity, no one . . . . acting as a
consultant can render effective service
unless he is familiar with such statutes and
regulations. He must be careful not to
suggest a course of conduct which the law
forbids. It seems . . . .clear that (the
consultant's) knowledge of the law, and his
use of that knowledge as a factor in
determining what measures he shall
recommend, do not constitute the practice of
law . . . . It is not only presumed that all men
know the law, but it is a fact that most men
have considerable acquaintance with broad
features of the law . . . . Our knowledge of
the law - accurate or inaccurate - moulds our
conduct not only when we are acting for
ourselves, but when we are serving others.
Bankers, liquor dealers and laymen
generally possess rather precise knowledge
of the laws touching their particular business
or profession. A good example is the
architect, who must be familiar with zoning,
building and fire prevention codes, factory
and tenement house statutes, and who draws
plans and specification in harmony with the
law. This is not practicing
law.chanroblesvirtualawlibrary
But suppose the architect, asked by his client
to omit a fire tower, replies that it is required
by the statute. Or the industrial relations
expert cites, in support of some measure that
he recommends, a decision of the National
Labor Relations Board. Are they practicing
law? In my opinion, they are not, provided
no separate fee is charged for the legal
advice or information, and the legal question
is subordinate and incidental to a major non-
legal problem.chanroblesvirtualawlibrary
It is largely a matter of degree and of
custom.chanroblesvirtualawlibrary
If it were usual for one intending to erect a
building on his land to engage a lawyer to
advise him and the architect in respect to the
building code and the like, then an architect
who performed this function would probably
be considered to be trespassing on territory
reserved for licensed attorneys. Likewise, if
the industrial relations field had been pre-
empted by lawyers, or custom placed a
lawyer always at the elbow of the lay
personnel man. But this is not the case. The
most important body of the industrial
relations experts are the officers and
business agents of the labor unions and few
of them are lawyers. Among the larger
corporate employers, it has been the practice
for some years to delegate special
responsibility in employee matters to a
management group chosen for their practical
knowledge and skill in such matter, and
without regard to legal thinking or lack of it.
More recently, consultants like the
defendants have the same service that the
larger employers get from their own
specialized staff.chanroblesvirtualawlibrary
The handling of industrial relations is
growing into a recognized profession for
which appropriate courses are offered by our
leading universities. The court should be
very cautious about declaring [that] a
widespread, well-established method of
conducting business is unlawful, or that the
considerable class of men who customarily
perform a certain function have no right to
do so, or that the technical education given
by our schools cannot be used by the
graduates in their business.
In determining whether a man is practicing
law, we should consider his work for any
particular client or customer, as a whole. I
can imagine defendant being engaged
primarily to advise as to the law defining his
client's obligations to his employees, to
guide his client's obligations to his
employees, to guide his client along the path
charted by law. This, of course, would be
the practice of the law. But such is not the
fact in the case before me. Defendant's
primarily efforts are along economic and
psychological lines. The law only provides
the frame within which he must work, just
as the zoning code limits the kind of
building the limits the kind of building the
architect may plan. The incidental legal
advice or information defendant may give,
does not transform his activities into the
practice of law. Let me add that if, even as a
minor feature of his work, he performed
services which are customarily reserved to
members of the bar, he would be practicing
law. For instance, if as part of a welfare
program, he drew employees'
wills.chanroblesvirtualawlibrary
Another branch of defendant's work is the
representations of the employer in the
adjustment of grievances and in collective
bargaining, with or without a mediator. This
is not per se the practice of law. Anyone
may use an agent for negotiations and may
select an agent particularly skilled in the
subject under discussion, and the person
appointed is free to accept the employment
whether or not he is a member of the bar.
Here, however, there may be an exception
where the business turns on a question of
law. Most real estate sales are negotiated by
brokers who are not lawyers. But if the
value of the land depends on a disputed
right-of-way and the principal role of the
negotiator is to assess the probable outcome
of the dispute and persuade the opposite
party to the same opinion, then it may be
that only a lawyer can accept the
assignment. Or if a controversy between an
employer and his men grows from differing
interpretations of a contract, or of a statute,
it is quite likely that defendant should not
handle it. But I need not reach a definite
conclusion here, since the situation is not
presented by the
proofs.chanroblesvirtualawlibrar
Defendant also appears to represent the
employer before administrative agencies of
the federal government, especially before
trial examiners of the National Labor
Relations Board. An agency of the federal
government, acting by virtue of an authority
granted by the Congress, may regulate the
representation of parties before such agency.
The State of New Jersey is without power to
interfere with such determination or to
forbid representation before the agency by
one whom the agency admits. The rules of
the National Labor Relations Board give to a
party the right to appear in person, or by
counsel, or by other representative. Rules
and Regulations, September 11th, 1946, S.
203.31. 'Counsel' here means a licensed
attorney, and ther representative' one not a
lawyer. In this phase of his work, defendant
may lawfully do whatever the Labor Board
allows, even arguing questions purely legal.
(Auerbacher v. Wood, 53 A. 2d 800, cited in
Statsky, Introduction to Paralegalism [1974],
at pp. 154-156.).
1.8 From the foregoing, it can be said that a
person engaged in a lawful calling (which
may involve knowledge of the law) is not
engaged in the practice of law provided that
(a) The legal question is subordinate and
incidental to a major non-legal
problem;.chanroblesvirtualawlibrar
(b) The services performed are not
customarily reserved to members of the bar;
.chanroblesvirtualawlibrar
(c) No separate fee is charged for the legal
advice or
information.chanroblesvirtualawlibrar
All these must be considered in relation to
the work for any particular client as a
whole.chanroblesvirtualawlibrary
1.9. If the person involved is both lawyer
and non-lawyer, the Code of Professional
Responsibility succintly states the rule of
conduct:
Rule 15.08 - A lawyer who is engaged in
another profession or occupation
concurrently with the practice of law shall
make clear to his client whether he is acting
as a lawyer or in another
capacity.chanroblesvirtualawlibrary
1.10. In the present case. the Legal Clinic
appears to render wedding services (See
Annex "A" Petition). Services on routine,
straightforward marriages, like securing a
marriage license, and making arrangements
with a priest or a judge, may not constitute
practice of law. However, if the problem is
as complicated as that described in "Rx for
Legal Problems" on the Sharon Cuneta-
Gabby Concepcion-Richard Gomez case,
then what may be involved is actually the
practice of law. If a non-lawyer, such as the
Legal Clinic, renders such services then it is
engaged in the unauthorized practice of
law.chanroblesvirtualawlibrary
1.11. The Legal Clinic also appears to give
information on divorce, absence, annulment
of marriage and visas (See Annexes "A" and
"B" Petition). Purely giving informational
materials may not constitute of law. The
business is similar to that of a bookstore
where the customer buys materials on the
subject and determines on the subject and
determines by himself what courses of
action to take.chanroblesvirtualawlibrar
It is not entirely improbable, however, that
aside from purely giving information, the
Legal Clinic's paralegals may apply the law
to the particular problem of the client, and
give legal advice. Such would constitute
unauthorized practice of law.
It cannot be claimed that the publication of a
legal text which publication of a legal text
which purports to say what the law is
amount to legal practice. And the mere fact
that the principles or rules stated in the text
may be accepted by a particular reader as a
solution to his problem does not affect this. .
. . . Apparently it is urged that the conjoining
of these two, that is, the text and the forms,
with advice as to how the forms should be
filled out, constitutes the unlawful practice
of law. But that is the situation with many
approved and accepted texts. Dacey's book
is sold to the public at large. There is no
personal contact or relationship with a
particular individual. Nor does there exist
that relation of confidence and trust so
necessary to the status of attorney and
client. THIS IS THE ESSENTIAL OF
LEGAL PRACTICE - THE
REPRESENTATION AND ADVISING OF A
PARTICULAR PERSON IN A
PARTICULAR SITUATION. At most the
book assumes to offer general advice on
common problems, and does not purport to
give personal advice on a specific problem
peculiar to a designated or readily identified
person. Similarly the defendant's publication
does not purport to give personal advice on a
specific problem peculiar to a designated or
readily identified person in a particular
situation - in their publication and sale of the
kits, such publication and sale did not
constitutes the unlawful practice of law . . . .
There being no legal impediment under the
statute to the sale of the kit, there was no
proper basis for the injunction against
defendant maintaining an office for the
purpose of selling to persons seeking a
divorce, separation, annulment or separation
agreement any printed material or writings
relating to matrimonial law or the
prohibition in the memorandum of
modification of the judgment against
defendant having an interest in any
publishing house publishing his manuscript
on divorce and against his having any
personal contact with any prospective
purchaser. The record does fully support,
however, the finding that for the change of
$75 or $100 for the kit, the defendant gave
legal advice in the course of personal
contacts concerning particular problems
which might arise in the preparation and
presentation of the purchaser's asserted
matrimonial cause of action or pursuit of
other legal remedies and assistance in the
preparation of necessary documents (The
injunction therefore sought to) enjoin
conduct constituting the practice of law,
particularly with reference to the giving of
advice and counsel by the defendant relating
to specific problems of particular individuals
in connection with a divorce, separation,
annulment of separation agreement sought
and should be affirmed. (State v. Winder,
348, NYS 2D 270 [1973], cited in
Statsky, supra at p. 101.).
1.12. Respondent, of course, states that its
services are "strictly non-diagnostic, non-
advisory. "It is not controverted, however,
that if the services "involve giving legal
advice or counselling," such would
constitute practice of law (Comment, par.
6.2). It is in this light that FIDA submits that
a factual inquiry may be necessary for the
judicious disposition of this case.
xxx xxx xx
2.10. Annex "A" may be ethically
objectionable in that it can give the
impression (or perpetuate the wrong notion)
that there is a secret marriage. With all the
solemnities, formalities and other requisites
of marriages (See Articles 2, et seq., Family
Code), no Philippine marriage can be
secret.chanroblesvirtualawlibra
2.11. Annex "B" may likewise be ethically
objectionable. The second paragraph thereof
(which is not necessarily related to the first
paragraph) fails to state the limitation that
only "paralegal services?" or "legal support
services", and not legal services, are
available." 11
A prefatory discussion on the meaning of
the phrase "practice of law" becomes
exigent for the proper determination of the
issues raised by the petition at bar. On this
score, we note that the clause "practice of
law" has long been the subject of judicial
construction and interpretation. The courts
have laid down general principles and
doctrines explaining the meaning and scope
of the term, some of which we now take into
account.chanroblesvirtualawlibrary
Practice of law means any activity, in or out
of court, which requires the application of
law, legal procedures, knowledge, training
and experience. To engage in the practice of
law is to perform those acts which are
characteristic of the profession. Generally,
to practice law is to give advice or render
any kind of service that involves legal
knowledge or skill. 12
The practice of law is not limited to the
conduct of cases in court. It includes legal
advice and counsel, and the preparation of
legal instruments and contract by which
legal rights are secured, although such
matter may or may not be pending in a
court. 1
In the practice of his profession, a licensed
attorney at law generally engages in three
principal types of professional activity: legal
advice and instructions to clients to inform
them of their rights and obligations,
preparation for clients of documents
requiring knowledge of legal principles not
possessed by ordinary layman, and
appearance for clients before public
tribunals which possess power and authority
to determine rights of life, liberty, and
property according to law, in order to assist
in proper interpretation and enforcement of
law. 14
When a person participates in the a trial and
advertises himself as a lawyer, he is in the
practice of law. 15One who confers with
clients, advises them as to their legal rights
and then takes the business to an attorney
and asks the latter to look after the case in
court, is also practicing law. 16Giving advice
for compensation regarding the legal status
and rights of another and the conduct with
respect thereto constitutes a practice of
law. 17One who renders an opinion as to the
proper interpretation of a statute, and
receives pay for it, is, to that extent,
practicing law. 18
In the recent case of Cayetano vs.
Monsod, 19after citing the doctrines in
several cases, we laid down the test to
determine whether certain acts constitute
"practice of law," thus:
Black defines "practice of law" as:
The rendition of services requiring the
knowledge and the application of legal
principles and technique to serve the interest
of another with his consent. It is not limited
to appearing in court, or advising and
assisting in the conduct of litigation, but
embraces the preparation of pleadings, and
other papers incident to actions and special
proceedings, conveyancing, the preparation
of legal instruments of all kinds, and the
giving of all legal advice to clients. It
embraces all advice to clients and all actions
taken for them in matters connected with the
law.
The practice of law is not limited to the
conduct of cases on court.(Land Title
Abstract and Trust Co. v. Dworken , 129
Ohio St. 23, 193N. E. 650). A person is also
considered to be in the practice of law when
he:
. . . . for valuable consideration engages in
the business of advising person, firms,
associations or corporations as to their right
under the law, or appears in a representative
capacity as an advocate in proceedings,
pending or prospective, before any court,
commissioner, referee, board, body,
committee, or commission constituted by
law or authorized to settle controversies and
there, in such representative capacity,
performs any act or acts for the purpose of
obtaining or defending the rights of their
clients under the law. Otherwise stated, one
who, in a representative capacity, engages in
the business of advising clients as to their
rights under the law, or while so engaged
performs any act or acts either in court or
outside of court for that purpose, is engaged
in the practice of law. (State ex. rel.
Mckittrick v. C.S. Dudley and Co., 102 S.
W. 2d 895, 340 Mo. 852).
This Court, in the case of Philippines
Lawyers Association v. Agrava (105 Phil.
173, 176-177),stated:
The practice of law is not limited to the
conduct of cases or litigation in court; it
embraces the preparation of pleadings and
other papers incident to actions and special
proceedings, the management of such
actions and proceedings on behalf of clients
before judges and courts, and in addition,
conveying. In general, all advice to clients,
and all action taken for them in matters
connected with the law incorporation
services, assessment and condemnation
services contemplating an appearance before
a judicial body, the foreclosure of a
mortgage, enforcement of a creditor's claim
in bankruptcy and insolvency proceedings,
and conducting proceedings in attachment,
and in matters or estate and guardianship
have been held to constitute law practice, as
do the preparation and drafting of legal
instruments, where the work done involves
the determination by the trained legal mind
of the legal effect of facts and conditions. (5
Am. Jr. p. 262,
263).chanroblesvirtualawlibrary
Practice of law under modern conditions
consists in no small part of work performed
outside of any court and having no
immediate relation to proceedings in court.
It embraces conveyancing, the giving of
legal advice on a large variety of subjects
and the preparation and execution of legal
instruments covering an extensive field of
business and trust relations and other affairs.
Although these transactions may have no
direct connection with court proceedings,
they are always subject to become involved
in litigation. They require in many aspects a
high degree of legal skill, a wide experience
with men and affairs, and great capacity for
adaptation to difficult and complex
situations. These customary functions of an
attorney or counselor at law bear an intimate
relation to the administration of justice by
the courts. No valid distinction, so far as
concerns the question set forth in the order,
can be drawn between that part of the work
of the lawyer which involves appearance in
court and that part which involves advice
and drafting of instruments in his office. It is
of importance to the welfare of the public
that these manifold customary functions be
performed by persons possessed of adequate
learning and skill, of sound moral character,
and acting at all times under the heavy trust
obligations to clients which rests upon all
attorneys. (Moran, Comments on the Rules o
Court, Vol. 3 [1973 ed.], pp. 665-666, citing
In Re Opinion of the Justices [Mass], 194 N.
E. 313, quoted in Rhode Is. Bar Assoc. v.
Automobile Service Assoc. [R.I.] 197 A.
139, 144).
The practice of law, therefore, covers a wide
range of activities in and out of court.
Applying the aforementioned criteria to the
case at bar, we agree with the perceptive
findings and observations of the aforestated
bar associations that the activities of
respondent, as advertised, constitute
"practice of law."
The contention of respondent that it merely
offers legal support services can neither be
seriously considered nor sustained. Said
proposition is belied by respondent's own
description of the services it has been
offering, to wit:
Legal support services basically consists of
giving ready information by trained
paralegals to laymen and lawyers, which are
strictly non-diagnostic, non-advisory,
through the extensive use of computers and
modern information technology in the
gathering, processing, storage, transmission
and reproduction of information and
communication, such as computerized legal
research; encoding and reproduction of
documents and pleadings prepared by
laymen or lawyers; document search;
evidence gathering; locating parties or
witnesses to a case; fact finding
investigations; and assistance to laymen in
need of basic institutional services from
government or non-government agencies,
like birth, marriage, property, or business
registrations; educational or employment
records or certifications, obtaining
documentation like clearances, passports,
local or foreign visas; giving information
about laws of other countries that they may
find useful, like foreign divorce, marriage or
adoption laws that they can avail of
preparatory to emigration to the foreign
country, and other matters that do not
involve representation of clients in court;
designing and installing computer systems,
programs, or software for the efficient
management of law offices, corporate legal
departments, courts and other entities
engaged in dispensing or administering legal
services. 2
While some of the services being offered by
respondent corporation merely involve
mechanical and technical knowhow, such as
the installation of computer systems and
programs for the efficient management of
law offices, or the computerization of
research aids and materials, these will not
suffice to justify an exception to the general
rule.chanroblesvirtualawlibrar
What is palpably clear is that respondent
corporation gives out legal information to
laymen and lawyers. Its contention that such
function is non-advisory and non-diagnostic
is more apparent than real. In providing
information, for example, about foreign laws
on marriage, divorce and adoption, it strains
the credulity of this Court that all the
respondent corporation will simply do is
look for the law, furnish a copy thereof to
the client, and stop there as if it were merely
a bookstore. With its attorneys and so called
paralegals, it will necessarily have to explain
to the client the intricacies of the law and
advise him or her on the proper course of
action to be taken as may be provided for by
said law. That is what its advertisements
represent and for the which services it will
consequently charge and be paid. That
activity falls squarely within the
jurisprudential definition of "practice of
law." Such a conclusion will not be altered
by the fact that respondent corporation does
not represent clients in court since law
practice, as the weight of authority holds, is
not limited merely giving legal advice,
contract drafting and so
forth.chanroblesvirtualawlibra
The aforesaid conclusion is further
strengthened by an article published in the
January 13, 1991 issue of the Starweek/The
Sunday Magazine of the Philippines Star,
entitled "Rx for Legal Problems," where an
insight into the structure, main purpose and
operations of respondent corporation was
given by its own "proprietor," Atty. Rogelio
P. Nogales:
This is the kind of business that is transacted
everyday at The Legal Clinic, with offices
on the seventh floor of the Victoria Building
along U. N. Avenue in Manila. No matter
what the client's problem, and even if it is as
complicated as the Cuneta-Concepcion
domestic situation, Atty. Nogales and his
staff of lawyers, who, like doctors are
"specialists" in various fields can take care
of it. The Legal Clinic, Inc. has specialists in
taxation and criminal law, medico-legal
problems, labor, litigation, and family law.
These specialist are backed up by a battery
of paralegals, counsellors and
attorneys.chanroblesvirtualawlibrar
Atty. Nogales set up The Legal Clinic in
1984. Inspired by the trend in the medical
field toward specialization, it caters to
clients who cannot afford the services of the
big law firms.chanroblesvirtualawlibrar
The Legal Clinic has regular and walk-in
clients. "when they come, we start by
analyzing the problem. That's what doctors
do also. They ask you how you contracted
what's bothering you, they take your
temperature, they observe you for the
symptoms and so on. That's how we operate,
too. And once the problem has been
categorized, then it's referred to one of our
specialists.chanroblesvirtualawlibrary
There are cases which do not, in medical
terms, require surgery or follow-up
treatment. These The Legal Clinic disposes
of in a matter of minutes. "Things like
preparing a simple deed of sale or an
affidavit of loss can be taken care of by our
staff or, if this were a hospital the residents
or the interns. We can take care of these
matters on a while you wait basis. Again,
kung baga sa hospital, out-patient, hindi
kailangang ma-confine. It's just like a
common cold or diarrhea," explains Atty.
Nogales.chanroblesvirtualawlibrar
Those cases which requires more extensive
"treatment" are dealt with accordingly. "If
you had a rich relative who died and named
you her sole heir, and you stand to inherit
millions of pesos of property, we would
refer you to a specialist in taxation. There
would be real estate taxes and arrears which
would need to be put in order, and your
relative is even taxed by the state for the
right to transfer her property, and only a
specialist in taxation would be properly
trained to deal with the problem. Now, if
there were other heirs contesting your rich
relatives will, then you would need a
litigator, who knows how to arrange the
problem for presentation in court, and gather
evidence to support the case. 21
That fact that the corporation employs
paralegals to carry out its services is not
controlling. What is important is that it is
engaged in the practice of law by virtue of
the nature of the services it renders which
thereby brings it within the ambit of the
statutory prohibitions against the
advertisements which it has caused to be
published and are now assailed in this
proceeding.chanroblesvirtualawlibrary
Further, as correctly and appropriately
pointed out by the U.P. WILOCI, said
reported facts sufficiently establish that the
main purpose of respondent is to serve as a
one-stop-shop of sorts for various legal
problems wherein a client may avail of legal
services from simple documentation to
complex litigation and corporate
undertakings. Most of these services are
undoubtedly beyond the domain of
paralegals, but rather, are exclusive
functions of lawyers engaged in the practice
of law. 22
It should be noted that in our jurisdiction the
services being offered by private respondent
which constitute practice of law cannot be
performed by paralegals. Only a person duly
admitted as a member of the bar, or
hereafter admitted as such in accordance
with the provisions of the Rules of Court,
and who is in good and regular standing, is
entitled to practice law. 23
Public policy requires that the practice of
law be limited to those individuals found
duly qualified in education and character.
The permissive right conferred on the
lawyers is an individual and limited
privilege subject to withdrawal if he fails to
maintain proper standards of moral and
professional conduct. The purpose is to
protect the public, the court, the client and
the bar from the incompetence or dishonesty
of those unlicensed to practice law and not
subject to the disciplinary control of the
court. 24
The same rule is observed in the american
jurisdiction wherefrom respondent would
wish to draw support for his thesis. The
doctrines there also stress that the practice of
law is limited to those who meet the
requirements for, and have been admitted to,
the bar, and various statutes or rules
specifically so provide. 25The practice of law
is not a lawful business except for members
of the bar who have complied with all the
conditions required by statute and the rules
of court. Only those persons are allowed to
practice law who, by reason of attainments
previously acquired through education and
study, have been recognized by the courts as
possessing profound knowledge of legal
science entitling them to advise, counsel
with, protect, or defend the rights claims, or
liabilities of their clients, with respect to the
construction, interpretation, operation and
effect of law. 26The justification for
excluding from the practice of law those not
admitted to the bar is found, not in the
protection of the bar from competition, but
in the protection of the public from being
advised and represented in legal matters by
incompetent and unreliable persons over
whom the judicial department can exercise
little control. 2
We have to necessarily and definitely reject
respondent's position that the concept in the
United States of paralegals as an occupation
separate from the law profession be adopted
in this jurisdiction. Whatever may be its
merits, respondent cannot but be aware that
this should first be a matter for judicial rules
or legislative action, and not of unilateral
adoption as it has
done.chanroblesvirtualawlibrary
Paralegals in the United States are trained
professionals. As admitted by respondent,
there are schools and universities there
which offer studies and degrees in paralegal
education, while there are none in the
Philippines. 28As the concept of the
"paralegals" or "legal assistant" evolved in
the United States, standards and guidelines
also evolved to protect the general public.
One of the major standards or guidelines
was developed by the American Bar
Association which set up Guidelines for the
Approval of Legal Assistant Education
Programs (1973). Legislation has even been
proposed to certify legal assistants. There
are also associations of paralegals in the
United States with their own code of
professional ethics, such as the National
Association of Legal Assistants, Inc. and the
American Paralegal Association. 2
In the Philippines, we still have a restricted
concept and limited acceptance of what may
be considered as paralegal service. As
pointed out by FIDA, some persons not duly
licensed to practice law are or have been
allowed limited representation in behalf of
another or to render legal services, but such
allowable services are limited in scope and
extent by the law, rules or regulations
granting permission therefor. 30
Accordingly, we have adopted the American
judicial policy that, in the absence of
constitutional or statutory authority, a person
who has not been admitted as an attorney
cannot practice law for the proper
administration of justice cannot be hindered
by the unwarranted intrusion of an
unauthorized and unskilled person into the
practice of law. 31That policy should
continue to be one of encouraging persons
who are unsure of their legal rights and
remedies to seek legal assistance only from
persons licensed to practice law in the
state. 32
Anent the issue on the validity of the
questioned advertisements, the Code of
Professional Responsibility provides that a
lawyer in making known his legal services
shall use only true, honest, fair, dignified
and objective information or statement of
facts. 33He is not supposed to use or permit
the use of any false, fraudulent, misleading,
deceptive, undignified, self-laudatory or
unfair statement or claim regarding his
qualifications or legal services. 34Nor shall
he pay or give something of value to
representatives of the mass media in
anticipation of, or in return for, publicity to
attract legal business. 35Prior to the adoption
of the code of Professional Responsibility,
the Canons of Professional Ethics had also
warned that lawyers should not resort to
indirect advertisements for professional
employment, such as furnishing or inspiring
newspaper comments, or procuring his
photograph to be published in connection
with causes in which the lawyer has been or
is engaged or concerning the manner of their
conduct, the magnitude of the interest
involved, the importance of the lawyer's
position, and all other like self-laudation. 36
The standards of the legal profession
condemn the lawyer's advertisement of his
talents. A lawyer cannot, without violating
the ethics of his profession. advertise his
talents or skill as in a manner similar to a
merchant advertising his goods. 37The
prescription against advertising of legal
services or solicitation of legal business rests
on the fundamental postulate that the that
the practice of law is a profession. Thus, in
the case of The Director of Religious
Affairs. vs. Estanislao R. Bayot 38 an
advertisement, similar to those of respondent
which are involved in the present
proceeding, 39was held to constitute
improper advertising or
solicitation.chanroblesvirtualawlibrary
The pertinent part of the decision therein
reads:
It is undeniable that the advertisement in
question was a flagrant violation by the
respondent of the ethics of his profession, it
being a brazen solicitation of business from
the public. Section 25 of Rule 127 expressly
provides among other things that "the
practice of soliciting cases at law for the
purpose of gain, either personally or thru
paid agents or brokers, constitutes
malpractice." It is highly unethical for an
attorney to advertise his talents or skill as a
merchant advertises his wares. Law is a
profession and not a trade. The lawyer
degrades himself and his profession who
stoops to and adopts the practices of
mercantilism by advertising his services or
offering them to the public. As a member of
the bar, he defiles the temple of justice with
mercenary activities as the money-changers
of old defiled the temple of Jehovah. "The
most worthy and effective advertisement
possible, even for a young lawyer, . . . . is
the establishment of a well-merited
reputation for professional capacity and
fidelity to trust. This cannot be forced but
must be the outcome of character and
conduct." (Canon 27, Code of Ethics.).
We repeat, the canon of the profession tell
us that the best advertising possible for a
lawyer is a well-merited reputation for
professional capacity and fidelity to trust,
which must be earned as the outcome of
character and conduct. Good and efficient
service to a client as well as to the
community has a way of publicizing itself
and catching public attention. That publicity
is a normal by-product of effective service
which is right and proper. A good and
reputable lawyer needs no artificial stimulus
to generate it and to magnify his success. He
easily sees the difference between a normal
by-product of able service and the
unwholesome result of propaganda. 40
Of course, not all types of advertising or
solicitation are prohibited. The canons of the
profession enumerate exceptions to the rule
against advertising or solicitation and define
the extent to which they may be undertaken.
The exceptions are of two broad categories,
namely, those which are expressly allowed
and those which are necessarily implied
from the restrictions. 41
The first of such exceptions is the
publication in reputable law lists, in a
manner consistent with the standards of
conduct imposed by the canons, of brief
biographical and informative data. "Such
data must not be misleading and may
include only a statement of the lawyer's
name and the names of his professional
associates; addresses, telephone numbers,
cable addresses; branches of law practiced;
date and place of birth and admission to the
bar; schools attended with dates of
graduation, degrees and other educational
distinction; public or quasi-public offices;
posts of honor; legal authorships; legal
teaching positions; membership and offices
in bar associations and committees thereof,
in legal and scientific societies and legal
fraternities; the fact of listings in other
reputable law lists; the names and addresses
of references; and, with their written
consent, the names of clients regularly
represented." 42
The law list must be a reputable law list
published primarily for that purpose; it
cannot be a mere supplemental feature of a
paper, magazine, trade journal or periodical
which is published principally for other
purposes. For that reason, a lawyer may not
properly publish his brief biographical and
informative data in a daily paper, magazine,
trade journal or society program. Nor may a
lawyer permit his name to be published in a
law list the conduct, management or
contents of which are calculated or likely to
deceive or injure the public or the bar, or to
lower the dignity or standing of the
profession. 43
The use of an ordinary simple professional
card is also permitted. The card may contain
only a statement of his name, the name of
the law firm which he is connected with,
address, telephone number and special
branch of law practiced. The publication of a
simple announcement of the opening of a
law firm or of changes in the partnership,
associates, firm name or office address,
being for the convenience of the profession,
is not objectionable. He may likewise have
his name listed in a telephone directory but
not under a designation of special branch of
law. 44
Verily, taking into consideration the nature
and contents of the advertisements for which
respondent is being taken to task, which
even includes a quotation of the fees
charged by said respondent corporation for
services rendered, we find and so hold that
the same definitely do not and conclusively
cannot fall under any of the above-
mentioned
exceptions.chanroblesvirtualawlibrar
The ruling in the case of Bates, et al. vs.
State Bar of Arizona, 45 which is repeatedly
invoked and constitutes the justification
relied upon by respondent, is obviously not
applicable to the case at bar. Foremost is the
fact that the disciplinary rule involved in
said case explicitly allows a lawyer, as an
exception to the prohibition against
advertisements by lawyers, to publish a
statement of legal fees for an initial
consultation or the availability upon request
of a written schedule of fees or an estimate
of the fee to be charged for the specific
services. No such exception is provided for,
expressly or impliedly, whether in our
former Canons of Professional Ethics or the
present Code of Professional Responsibility.
Besides, even the disciplinary rule in
the Bates case contains a proviso that the
exceptions stated therein are "not applicable
in any state unless and until it is
implemented by such authority in that
state." 46This goes to show that an exception
to the general rule, such as that being
invoked by herein respondent, can be made
only if and when the canons expressly
provide for such an exception. Otherwise,
the prohibition stands, as in the case at
bar.chanroblesvirtualawlibrar
It bears mention that in a survey conducted
by the American Bar Association after the
decision in Bates, on the attitude of the
public about lawyers after viewing
television commercials, it was found that
public opinion dropped significantly 47 with
respect to these characteristics of lawyers:
Trustworthy from 71% to 14%
Professional from 71% to 14%
Honest from 65% to 14%
Dignified from 45% to 14%
Secondly, it is our firm belief that with the
present situation of our legal and judicial
systems, to allow the publication of
advertisements of the kind used by
respondent would only serve to aggravate
what is already a deteriorating public
opinion of the legal profession whose
integrity has consistently been under attack
lately by media and the community in
general. At this point in time, it is of utmost
importance in the face of such negative,
even if unfair, criticisms at times, to adopt
and maintain that level of professional
conduct which is beyond reproach, and to
exert all efforts to regain the high esteem
formerly accorded to the legal
profession.chanroblesvirtualawlibrar
In sum, it is undoubtedly a misbehavior on
the part of the lawyer, subject to disciplinary
action, to advertise his services except in
allowable instances 48or to aid a layman in
the unauthorized practice of
49
law. Considering that Atty. Rogelio P.
Nogales, who is the prime incorporator,
major stockholder and proprietor of The
Legal Clinic, Inc. is a member of the
Philippine Bar, he is hereby reprimanded,
with a warning that a repetition of the same
or similar acts which are involved in this
proceeding will be dealt with more Nocon, Bellosillo, Melo and Quiason, JJ.,
severely.chanroblesvirtualawlibrar concur

While we deem it necessary that the

question as to the legality or illegality of the
purpose/s for which the Legal Clinic, Inc.
was created should be passed upon and
determined, we are constrained to refrain
from lapsing into an obiter on that aspect
since it is clearly not within the adjudicative
parameters of the present proceeding which
is merely administrative in nature. It is, of
course, imperative that this matter be
promptly determined, albeit in a different
proceeding and forum, since, under the
present state of our law and jurisprudence, a
corporation cannot be organized for or
engage in the practice of law in this country.
This interdiction, just like the rule against
unethical advertising, cannot be subverted
by employing some so-called paralegals
supposedly rendering the alleged support
services.chanroblesvirtualawlibra

The remedy for the apparent breach of this

prohibition by respondent is the concern and
province of the Solicitor General who can
institute the corresponding quo
50
warranto action, after due ascertainment
of the factual background and basis for the
grant of respondent's corporate charter, in
light of the putative misuse thereof. That
spin-off from the instant bar matter is
referred to the Solicitor General for such
action as may be necessary under the
circumstances.chanroblesvirtualawlibrar

ACCORDINGLY, the Court Resolved to

RESTRAIN and ENJOIN herein respondent,
The Legal Clinic, Inc., from issuing or
causing the publication or dissemination of
any advertisement in any form which is of
the same or similar tenor and purpose as
Annexes "A" and "B" of this petition, and
from conducting, directly or indirectly, any
activity, operation or transaction proscribed
by law or the Code of Professional Ethics as
indicated herein. Let copies of this
resolution be furnished the Integrated Bar of
the Philippines, the Office of the Bar
Confidant and the Office of the Solicitor
General for appropriate action in accordance
herewith.

Narvasa, C.J., Cruz, Feliciano, Padilla,

Bidin, Griño-Aquino, Davide, Jr., Romero,