Title: Regala et al. vs. Sandiganbayan et al., GR No.

105938, 09/20/96
Note - These are two cases with one resolution.
Ponente: Justice Kapunan
Topic: V. Lawyers, Courts, and Judges (Lawyers)

I. FACTS (“undisputed”)
Clients consulted the petitioners, in their capacity as lawyers, regarding the financial and
corporate structure, framework and set-up of the corporations in question. In turn,
petitioners gave their professional advice in the form of, among others, the deeds of
assignment covering their client's shareholdings.
Petitioners fear that identifying their clients would implicate them in the very activity for
which legal advice had been sought, i.e., the alleged accumulation of ill-gotten wealth in
the aforementioned corporations.
1. July 31, 1987 – complaint before the Sandiganbayan of PCGG vs. Eduardo M.
Cojuangco, Jr., (principal defendant) et al. for recovery of alleged ill-gotten wealth, i. e.,
shares of stocks in named corporations in PCGG Case No. 33 (Civil Case No. 0033),
entitled "R. P. v. Cojuangco, et al."
2. Defendants named in the case are herein petitioners (plus private respondent Raul S.
Roco) - then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law
Offices (ACCRA Law Firm).
3. ACCRA Law Firm – acquired info on assets of clients, personal and business
circumstances; assisted in organization and acquisition of business associations and/or
organizations (companies listed in Civil Case 0033), where its members acted as
incorporators, or simply, as stockholders etc; delivered documents which substantiate the
client's equity holdings, i.e., (1) stock certificates endorsed in blank representing the
shares registered in the client's name, and (2) a blank deed of trust or assignment covering
said shares; acted as nominees-stockholders of the said corporations involved in
sequestration proceedings (as office practice)
4. August 20, 1991 - respondent PCGG’s "Motion to Admit Third Amended Complaint"
and "Third Amended Complaint" excluded private respondent Raul Roco from complaint
in PCGG Case No. 33 because of his undertaking that he will reveal the identity of the
principal/s for whom he acted as nominee/stockholder in the companies involved in
PCGG Case No. 33.
5. Third Amended Complaint – said defendants conspired in helping set up, through the
use of the coconut levy funds, UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and
more than 20 other coconut levy funded corporations, including the acquisition of San
Miguel Corporation shares
6. ACCRA Investments Corporation - became the holder of approximately 15 million
shares (roughly 3.3%) of total outstanding capital stock of UCPB as of 31 March 1987;
44 among the top 100 biggest stockholders of UCPB (about 1,400,000 shareholders); a
wholly-owned investment arm
7. Edgardo J. Angara - holding approximately 3,744 shares as of February, 1984 of UCPB
8. Expanded Amended Complaint of ACCRA – said that is only in legitimate lawyering;
became holders of shares of stock in the corporations listed but do not claim any
proprietary interest in the said shares of stock; said Avelino V. Cruz an incorporator in
1976 of Mermaid Marketing Corporation but for legitimate business purposes and
already transferred shares
9. Petitioner Paraja Hayudini - denied being onvolved in the alleged ill-gotten wealth
10. "COMMENT AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion
of ACCRA – moving that respondent PCGG similarly grant the same treatment to them
(exclusion as parties-defendants) as accorded Roco.
11. Conditions precedent for the exclusion of petitioners, namely (PCGG’s Comment):
(a) the disclosure of the identity of its clients; (b) documents substantiating the lawyer-
client relationship; and (c) deeds of assignments petitioners executed for clients covering
shares
12. PCGG’s supposed proof to substantiate compliance by Roco: (a) Letter to respondent
PCGG of his the counsel reiterating previous request for reinvestigation; (b) Affidavit as
Attachment; (c) Letter of the Roco, Bunag, and Kapunan Law Offices originally
requesting the reinvestigation and/or re-examination of evidence of PCGG against Roco
13. Roco did not refute petitioners' contention that he did actually not reveal identity of
the client, nor undertook to reveal the identity of the client for whom he acted as
nominee-stockholder.
14. March 18, 1992 - respondent Sandiganbayan promulgated Resolution herein
questioned, denying the exclusion of petitioners for their refusal to comply with the
conditions by PCGG
15. Hence, petition for certiorari, grounds: strict application of the law of agency;
absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal,
disclosure not constitute a substantial distinction for equal protection clause, favoritism
and undue preference; not holding that, under the facts of this case, the attorney-client
privilege prohibits petitioners ACCRA lawyers from revealing the identity of their
client(s) and the other information requested by the PCGG; unreasonable or unjust

II. Issue: Privileged Information

Whether or not the lawyer’s fiduciary duty (uberrimei fidei) may be asserted in refusing
to disclose the identity of clients [name of petitioners' client(s)] under the facts and
circumstances obtaining in the instant case
SIDE ISSUE: Whether or not the exclusion of respondent Roco as party-defendant in
PCGG Case No. 33 grants him a favorable treatment, on the pretext of his alleged
undertaking to divulge the identity of his client (showing him lack of cause).

III. RATIONALE
The High Court upheld that petitioners' right not to reveal the identity of their clients
under pain of the breach of fiduciary duty owing to their clients, because the facts of the
instant case clearly fall within recognized exceptions to the rule that the client's name is
not privileged information. Sandiganbayan resolution annulled and set aside. Petitioners
excluded from complaint.
1. A lawyer may not invoke the privilege and refuse to divulge the name or identity of
this client. Reasons: 1. Court has a right to know that the client whose privileged
information is sought to be protected is flesh and blood. 2. Privilege begins to exist only
after the attorney-client relationship has been established. The attorney-client privilege
does not attach until there is a client. 3. Privilege generally pertains to the subject matter
of the relationship. 4. Due process considerations require that the opposing party should,
as a general rule, know his adversary.
2. BUT (Exceptions/Racio Decidendi): When the client's name itself has an independent
significance, such that disclosure would then reveal client confidences
1. A strong probability exists that revealing the client's name would implicate that client
in the very activity for which he sought the lawyer's advice. (Baird exception for freedom
of consultation)
2. Disclosure would open the client to civil liability. (case at bar)
3. Government's lawyers have no case against an attorney's client unless, by revealing the
client's name, the said name would furnish the only link that would form the chain of
testimony necessary to convict an individual of a crime. (case at bar – BAIRD
EXCEPTION)
4. Relevant to the subject matter of the legal problem on which the client seeks legal
assistance (case at bar)
5. Nature of the attorney-client relationship has been previously disclosed and it is the
identity which is intended to be confidential
3. Petitioners were impleaded by PCGG as co-defendants to force them to disclose the
identity of their clients, after the "bigger fish" as they say in street parlance — the names
of their clients in exchange for exclusion from the complaint. (Primavera Farms, Inc., et
al. vs. PCGG Mario Ongkiko) - "so called client is Mr. Eduardo Cojuangco" (leverage to
nail clients)
4. No valid cause of action. It would seem that petitioners are merely standing in for their
clients as defendants in the complaint. Petitioners are being prosecuted solely on the basis
of activities and services performed in the course of their duties as lawyers.
5. The nature of lawyer-client relationship is premised on the Roman Law concepts of
locatio conductio operarum (contract of lease of services) where one person lets his
services and another hires them without reference to the object of which the services are
to be performed. Their services may be compensated by honorarium or for hire, and
mandato (contract of agency) wherein a friend on whom reliance could be placed makes
a contract in his name, but gives up all that he gained by the contract to the person who
requested him.
6. OTHERS: Privileged Communication Laws Applicable
a. Old Code of Civil Procedure enacted by the Philippine Commission on August 7, 1901.
Section 383 "forbids counsel, without authority of his client to reveal any communication
made by the client to him or his advice given thereon in the course of professional
employment."
b. Rules of Court Sec. 24: “Disqualification by reason of privileged communication. —
The following persons cannot testify as to matters learned in confidence in the following
cases: “An attorney cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in the course of…”
c. Rule 138 of the Rules of Court states, Sec. 20: “duty of an attorney: (e) to maintain
inviolate the confidence, and at every peril to himself, to preserve the secrets of his client,
and to accept no compensation in connection with his client's business except from him
or with his knowledge and approval.”
d. Canon 17 of the Code of Professional Responsibility: “A lawyer owes fidelity to the
cause of his client and he shall be mindful of the trust and confidence reposed in him.”
e. Canon 15 of the Canons of Professional Ethics: The lawyers owes "entire devotion to
the interest of the client, warm zeal in the maintenance and defense of his rights and the
exertion of his utmost learning and ability,"
7. Equal protection clause - a guarantee which provides a wall of protection against
uneven application of status and regulations. In the broader sense, the guarantee operates
against uneven application of legal norms so that all persons under similar circumstances
would be accorded the same treatment.
8. Violates the equal protection guarantee and the right against self-incrimination and
subverts the lawyer-client confidentiality privilege.

IV. Separate Opinions (Three other justices: Vitug, Davide and Puno)
VITUG, J., concurring:
1. Confidentiality of the lawyer-client relationship - allows the lawyer and the client to
institutionalize a unique relationship based on full trust and confidence
2. A situation of what it could elicit from a counsel against his client, unreasonable and
with thinly disguised threat of incrimination.

DAVIDE, JR., J.: dissenting

1. Court must confine itself to the key issue, issue burried: whether or not the
Sandiganbayan acted with grave abuse of discretion in not excluding the defendants, the
petitioners herein, from the Third Amended Complaint in Civil Case No. 0033.
2. Sandiganbayan did not commit grave abuse of discretion in not acting favorably on the
petitioners' prayer to exclude them. The prerogative to determine who shall be made
defendants in a civil case is initially vested in the plaintiff, or the PCGG in this case.
3. If Roco's revelation violated the confidentiality of a lawyer-client relationship, he
would be solely answerable therefor to his principals/clients and, probably, to this Court
in an appropriate disciplinary action if warranted.
4. They have no right to make such a demand for until they shall have complied with the
conditions imposed for their exclusion, they cannot be excluded except by way of a
motion to dismiss.The rule of confidentiality under the lawyer-client relationship is not a
cause to exclude a party. It is merely a ground for disqualification of a witness.
5. The revelation is entirely optional, discretionary, on their part. The attorney-client
privilege is not therefor applicable. The lawyer-client privilege provides the petitioners
no refuge. They are sued as principal defendants for recovery of alleged ill-gotten wealth.
6. Wrong use of American jurisprudence in ponencia: 1. Issue of privilege contested
therein arose in grand jury proceedings on different States. 2. In the cases cited by the
majority, the lawyers concerned were merely advocating the cause of their clients but
were not indicted for the charges against their said clients. Here, the counsel themselves
are co-defendants duly charged in court as co-conspirators.
7. Lawyer-client privilege is not a shield for the commission of a crime or against the
prosecution of the lawyer therefor.
8. As a general rule, the identity of a defendant in a criminal prosecution is a matter of
public record and, thus, not covered by the attorney-client privilege. Identity of a client is
not within the lawyer-client privilege in this manner because every litigant is in justice
entitled to know the identity of his opponents.
Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

1. MAIN POINT OF PUNO: Sandiganbayan committed grave abuse of discretion when
it misdelineated the metes and bounds of the attorney-client privilege by failing to
recognize the exceptions. But petitioners need to prove that prove they fall within the
exceptions to the general rule. Needs factual basis.
2. REASON: Attorney-client privilege is not a magic mantra whose invocation will ipso
facto and ipso jure drape he who invokes it with its protection. Plainly put, it is not
enough to assert the privilege.
3. Legal advice exception may be defeated through a prima facie: in furtherance of
present or intended continuing illegality, as where the legal representation itself is part of
a larger conspiracy. [like this case]
4. Atypical of the usual case where the hinge issue involves the applicability of attorney-
client privilege: petitioners included as defendants and conspirators.
5. The issue of attorney-client privilege arose when PCGG agreed to exclude petitioners
from the complaint on condition they reveal the identity of their client.
6. The issue poses a trilemma: need for courts to discover the truth, need to protect
adversary system of justice, need to keep inviolate the constitutional right against self-
incrimination and effective counsel in criminal litigations.
7. Attorney-client privilege can never be used as a shield to commit a crime or a fraud.
8. PCGG relented on its original stance as spelled out in its Complaint that petitioners are
co-conspirators in crimes and cannot invoke the attorney-client privilege.