G.R. No.

105938 September 20, 1996

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C.

CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN and EDUARDO U.
ESCUETA, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE
PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT, and RAUL S. ROCO, respondents.

G.R. No. 108113 September 20, 1996

PARAJA G. HAYUDINI, petitioner,
vs.
THE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents.

KAPUNAN, J.:

These case touch the very cornerstone of every State's judicial system, upon which the
workings of the contentious and adversarial system in the Philippine legal process are
based — the sanctity of fiduciary duty in the client-lawyer relationship. The fiduciary duty
of a counsel and advocate is also what makes the law profession a unique position of
trust and confidence, which distinguishes it from any other calling. In this instance, we
have no recourse but to uphold and strengthen the mantle of protection accorded to the
confidentiality that proceeds from the performance of the lawyer's duty to his client.

The facts of the case are undisputed.

The matters raised herein are an offshoot of the institution of the Complaint on July 31,
1987 before the Sandiganbayan by the Republic of the Philippines, through the
Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as
one of the principal defendants, for the recovery of alleged ill-gotten wealth, which
includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case
No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al." 1

Among the dependants named in the case are herein petitioners Teodoro Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan, Victor P.
Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul
S. Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala
and Cruz Law Offices (hereinafter referred to as the ACCRA Law Firm). ACCRA Law
Firm performed legal services for its clients, which included, among others, the
organization and acquisition of business associations and/or organizations, with the
correlative and incidental services where its members acted as incorporators, or simply,
as stockholders. More specifically, in the performance of these services, the members of
the law firm delivered to its client documents which substantiate the client's equity
holdings, i.e., stock certificates endorsed in blank representing the shares registered in
the client's name, and a blank deed of trust or assignment covering said shares. In the
course of their dealings with their clients, the members of the law firm acquire information
relative to the assets of clients as well as their personal and business circumstances. As
members of the ACCRA Law Firm, petitioners and private respondent Raul Roco admit
that they assisted in the organization and acquisition of the companies included in Civil
Case No. 0033, and in keeping with the office practice, ACCRA lawyers acted as
nominees-stockholders of the said corporations involved in sequestration proceedings. 2
On August 20, 1991, respondent Presidential Commission on Good Government
(hereinafter referred to as respondent PCGG) filed a "Motion to Admit Third Amended
Complaint" and "Third Amended Complaint" which excluded private respondent Raul S.
Roco from the complaint in PCGG Case No. 33 as party-defendant.  Respondent PCGG
3

based its exclusion of private respondent Roco as party-defendant on 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. 4

Petitioners were included in the Third Amended Complaint on the strength of the
following allegations:

14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion,

Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G.
Hayudini and Raul Roco of the Angara Concepcion Cruz Regala and Abello law offices
(ACCRA) plotted, devised, schemed conspired and confederated with each other in
setting up, through the use of the coconut levy funds, the financial and corporate
framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE,
COCOMARK, CIC, and more than twenty other coconut levy funded corporations,
including the acquisition of San Miguel Corporation shares and its institutionalization
through presidential directives of the coconut monopoly. Through insidious means and
machinations, ACCRA, being the wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately fifteen million shares representing
roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This
ranks ACCRA Investments Corporation number 44 among the top 100 biggest
stockholders of UCPB which has approximately 1,400,000 shareholders. On the other
hand, corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984. 5

In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers

alleged that:

4.4 Defendants-ACCRA lawyers' participation in the acts with which their codefendants
are charged, was in furtherance of legitimate lawyering.

4.4.1 In the course of rendering professional and legal services to clients, defendants-
ACCRA lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and
Eduardo U. Escueta, became holders of shares of stock in the corporations listed under
their respective names in Annex "A" of the expanded Amended Complaint as
incorporating or acquiring stockholders only and, as such, they do not claim any
proprietary interest in the said shares of stock.

4.5 Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976 of
Mermaid Marketing Corporation, which was organized for legitimate business purposes
not related to the allegations of the expanded Amended Complaint. However, he has
long ago transferred any material interest therein and therefore denies that the "shares"
appearing in his name in Annex "A" of the expanded Amended Complaint are his assets. 6

Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a separate
answer denying the allegations in the complaint implicating him in the alleged ill-gotten
wealth.7

Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR OPPOSITION"

dated October 8, 1991 with Counter-Motion that respondent PCGG similarly grant the
same treatment to them (exclusion as parties-defendants) as accorded private
respondent Roco.  The Counter-Motion for dropping petitioners from the complaint was
8
duly set for hearing on October 18, 1991 in accordance with the requirements of Rule 15
of the Rules of Court.

In its "Comment," respondent PCGG set the following conditions precedent for the
exclusion of petitioners, namely: (a) the disclosure of the identity of its clients; (b)
submission of documents substantiating the lawyer-client relationship; and (c) the
submission of the deeds of assignments petitioners executed in favor of its client
covering their respective
shareholdings. 9

Consequently, respondent PCGG presented supposed proof to substantiate compliance

by private respondent Roco of the conditions precedent to warrant the latter's exclusion
as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the
counsel of respondent Roco dated May 24, 1989 reiterating a previous request for
reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989
executed by private respondent Roco as Attachment to the letter aforestated in (a); and
(c) Letter of the Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to
the respondent PCGG in behalf of private respondent Roco originally requesting the
reinvestigation and/or re-examination of the evidence of the PCGG against Roco in its
Complaint in PCGG Case No. 33.  10

It is noteworthy that during said proceedings, private respondent Roco did not refute
petitioners' contention that he did actually not reveal the identity of the client involved in
PCGG Case No. 33, nor had he undertaken to reveal the identity of the client for whom
he acted as nominee-stockholder.  11

On March 18, 1992, respondent Sandiganbayan promulgated the Resolution, herein

questioned, denying the exclusion of petitioners in PCGG Case No. 33, for their refusal to
comply with the conditions required by respondent PCGG. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for
whom they have acted, i.e. their principal, and that will be their choice. But until they do
identify their clients, considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to establish the
basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG
as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
cause against him. This in turn has allowed the PCGG to exercise its power both under
the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of
by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7,
PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not
to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party
defendants. In the same vein, they cannot compel the PCGG to be accorded the same
treatment accorded to Roco.
Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers
and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as
accorded to Raul S. Roco is DENIED for lack of merit.  12

ACCRA lawyers moved for a reconsideration of the above resolution but the same was
denied by the respondent Sandiganbayan. Hence, the ACCRA lawyers filed the petition
for certiorari, docketed as G.R. No. 105938, invoking the following grounds:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners

ACCRA lawyers who undisputably acted as lawyers in serving as nominee-stockholders,
to the strict application of the law of agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering

petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving
of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to
reveal, the identities of the client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities
of the client(s), the disclosure does not constitute a substantial distinction as would make
the classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of

Mr. Roco in violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in 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.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity
of the client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of
petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that
the dropping of party-defendants by the PCGG must be based on reasonable and just
grounds and with due consideration to the constitutional right of petitioners ACCRA
lawyers to the equal protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of the
March 18, 1991 resolution which was denied by respondent Sandiganbayan. Thus, he
filed a separate petition for certiorari, docketed as G.R. No. 108113, assailing respondent
Sandiganbayan's resolution on essentially the same grounds averred by petitioners in
G.R. No. 105938.

Petitioners contend that 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, giving him an advantage over them who are in the
same footing as partners in the ACCRA law firm. Petitioners further argue that even
granting that such an undertaking has been assumed by private respondent Roco, they
are prohibited from revealing the identity of their principal under their sworn mandate and
fiduciary duty as lawyers to uphold at all times the confidentiality of information obtained
during such lawyer-client relationship.

Respondent PCGG, through its counsel, refutes petitioners' contention, alleging that the
revelation of the identity of the client is not within the ambit of the lawyer-client
confidentiality privilege, nor are the documents it required (deeds of assignment)
protected, because they are evidence of nominee status.  13

In his comment, respondent Roco asseverates that respondent PCGG acted correctly in
excluding him as party-defendant because he "(Roco) has not filed an Answer. PCGG
had therefore the right to dismiss Civil Case No. 0033 as to Roco 'without an order of
court by filing a notice of dismissal',"   and he has undertaken to identify his principal. 
14 15

Petitioners' contentions are impressed with merit.

It is quite apparent that petitioners were impleaded by the PCGG as co-defendants to

force them to disclose the identity of their clients. Clearly, respondent PCGG is not after
petitioners but the "bigger fish" as they say in street parlance. This ploy is quite clear
from the PCGG's willingness to cut a deal with petitioners — the names of their clients in
exchange for exclusion from the complaint. The statement of the Sandiganbayan in its
questioned resolution dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for
whom they have acted, i.e, their principal, and that will be their choice. But until they do
identify their clients, considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to establish the
basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG
as defendants herein. (Emphasis ours)

In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third Division,
entitled "Primavera Farms, Inc., et al. vs. Presidential Commission on Good Government"
respondent PCGG, through counsel Mario Ongkiko, manifested at the hearing on
December 5, 1991 that the PCGG wanted to establish through the ACCRA that their "so
called client is Mr. Eduardo Cojuangco;" that "it was Mr. Eduardo Cojuangco who
furnished all the monies to those subscription payments in corporations included in
Annex "A" of the Third Amended Complaint; that the ACCRA lawyers executed deeds of
trust and deeds of assignment, some in the name of particular persons; some in blank.

We quote Atty. Ongkiko:

ATTY. ONGKIKO:
With the permission of this Hon. Court. I propose to establish through these ACCRA
lawyers that, one, their so-called client is Mr. Eduardo Cojuangco. Second, it was Mr.
Eduardo Cojuangco who furnished all the monies to these subscription payments of
these corporations who are now the petitioners in this case. Third, that these lawyers
executed deeds of trust, some in the name of a particular person, some in blank. Now,
these blank deeds are important to our claim that some of the shares are actually being
held by the nominees for the late President Marcos. Fourth, they also executed deeds of
assignment and some of these assignments have also blank assignees. Again, this is
important to our claim that some of the shares are for Mr. Conjuangco and some are for
Mr. Marcos. Fifth, that most of thes e corporations are really just paper corporations. Why
do we say that? One: There are no really fixed sets of officers, no fixed sets of directors
at the time of incorporation and even up to 1986, which is the crucial year. And not only
that, they have no permits from the municipal authorities in Makati. Next, actually all their
addresses now are care of Villareal Law Office. They really have no address on records.
These are some of the principal things that we would ask of these nominees
stockholders, as they called themselves.  16

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. Quite obviously, petitioners' inclusion
as co-defendants in the complaint is merely being used as leverage to compel them to
name their clients and consequently to enable the PCGG to nail these clients. Such
being the case, respondent PCGG has no valid cause of action as against petitioners
and should exclude them from the Third Amended Complaint.

II

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, wherein lawyers' services may be compensated by honorarium or for
hire,   and mandato (contract of agency) wherein a friend on whom reliance could be
17

placed makes a contract in his name, but gives up all that he gained by the contract to
the person who requested him.   But the lawyer-client relationship is more than that of
18

the principal-agent and lessor-lessee.

In modern day perception of the lawyer-client relationship, an attorney is more than a

mere agent or servant, because he possesses special powers of trust and confidence
reposed on him by his client.   A lawyer is also as independent as the judge of the court,
19

thus his powers are entirely different from and superior to those of an ordinary
agent.  Moreover, an attorney also occupies what may be considered as a "quasi-judicial
20

office" since he is in fact an officer of the Court   and exercises his judgment in the choice
21

of courses of action to be taken favorable to his client.

Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and
duties that breathe life into it, among those, the fiduciary duty to his client which is of a
very delicate, exacting and confidential character, requiring a very high degree of fidelity
and good faith,   that is required by reason of necessity and public interest   based on the
22 23

hypothesis that abstinence from seeking legal advice in a good cause is an evil which is
fatal to the administration of justice.  24

It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any
other professional in society. This conception is entrenched and embodies centuries of
established and stable tradition.   In Stockton v. Ford,  the U. S. Supreme Court held:
25 26
There are few of the business relations of life involving a higher trust and confidence than
that of attorney and client, or generally speaking, one more honorably and faithfully
discharged; few more anxiously guarded by the law, or governed by the sterner principles
of morality and justice; and it is the duty of the court to administer them in a
corresponding spirit, and to be watchful and industrious, to see that confidence thus
reposed shall not be used to the detriment or prejudice of the rights of the party
bestowing it. 27

In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by
the Philippine Commission on August 7, 1901. Section 383 of the Code specifically
"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."   Passed on into various provisions of the Rules of Court, the attorney-
28

client privilege, as currently worded provides:

Sec. 24. Disqualification by reason of privileged communication. — The following

persons cannot testify as to matters learned in confidence in the following cases:

xxx xxx xxx

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, or
with a view to, professional employment, can an attorney's secretary, stenographer, or
clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity.  29

Further, Rule 138 of the Rules of Court states:

Sec. 20. It is the 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.

This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility

which provides that:

Canon 17. A lawyer owes fidelity to the cause of his client and he shall be mindful of the
trust and confidence reposed in him.

Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client:

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," to the end that nothing be taken or be withheld from him, save by the rules of law,
legally applied. No fear of judicial disfavor or public popularity should restrain him from
the full discharge of his duty. In the judicial forum the client is entitled to the benefit of any
and every remedy and defense that is authorized by the law of the land, and he may
expect his lawyer to assert every such remedy or defense. But it is steadfastly to be
borne in mind that the great trust of the lawyer is to be performed within and not without
the bounds of the law. The office of attorney does not permit, much less does it demand
of him for any client, violation of law or any manner of fraud or chicanery. He must obey
his own conscience and not that of his client.

Considerations favoring confidentially in lawyer-client relationships are many and serve

several constitutional and policy concerns. In the constitutional sphere, the privilege gives
flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If
a client were made to choose between legal representation without effective
communication and disclosure and legal representation with all his secrets revealed then
he might be compelled, in some instances, to either opt to stay away from the judicial
system or to lose the right to counsel. If the price of disclosure is too high, or if it amounts
to self incrimination, then the flow of information would be curtailed thereby rendering the
right practically nugatory. The threat this represents against another sacrosanct individual
right, the right to be presumed innocent is at once self-evident.

Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a
whole spectrum of legal options which would otherwise be circumscribed by limited
information engendered by a fear of disclosure. An effective lawyer-client relationship is
largely dependent upon the degree of confidence which exists between lawyer and client
which in turn requires a situation which encourages a dynamic and fruitful exchange and
flow of information. It necessarily follows that in order to attain effective representation,
the lawyer must invoke the privilege not as a matter of option but as a matter of duty and
professional responsibility.

The question now arises whether or not this duty may be asserted in refusing to disclose
the name of petitioners' client(s) in the case at bar. Under the facts and circumstances
obtaining in the instant case, the answer must be in the affirmative.

As a matter of public policy, a client's identity should not be shrouded in mystery   Under
30

this premise, the general rule in our jurisdiction as well as in the United States is that a
lawyer may not invoke the privilege and refuse to divulge the name or identity of this
client. 31

The reasons advanced for the general rule are well established.

First, the court has a right to know that the client whose privileged information is sought
to be protected is flesh and blood.

Second, the 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.

Third, the privilege generally pertains to the subject matter of the relationship.

Finally, due process considerations require that the opposing party should, as a general
rule, know his adversary. "A party suing or sued is entitled to know who his opponent
is."   He cannot be obliged to grope in the dark against unknown forces. 
32 33

Notwithstanding these considerations, the general rule is however qualified by some

important exceptions.

1) Client identity is privileged where 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.

In Ex-Parte Enzor,   a state supreme court reversed a lower court order requiring a
34

lawyer to divulge the name of her client on the ground that the subject matter of the
relationship was so closely related to the issue of the client's identity that the privilege
actually attached to both. In Enzor, the unidentified client, an election official, informed
his attorney in confidence that he had been offered a bribe to violate election laws or that
he had accepted a bribe to that end. In her testimony, the attorney revealed that she had
advised her client to count the votes correctly, but averred that she could not remember
whether her client had been, in fact, bribed. The lawyer was cited for contempt for her
refusal to reveal his client's identity before a grand jury. Reversing the lower court's
contempt orders, the state supreme court held that under the circumstances of the case,
and under the exceptions described above, even the name of the client was privileged.

U .S. v. Hodge and Zweig,  involved the same exception, i.e. that client identity is
35

privileged in those instances where a strong probability exists that the disclosure of the
client's identity would implicate the client in the very criminal activity for which the
lawyer's legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring into the activities of
the "Sandino Gang," a gang involved in the illegal importation of drugs in the United
States. The respondents, law partners, represented key witnesses and suspects
including the leader of the gang, Joe Sandino.

In connection with a tax investigation in November of 1973, the IRS issued summons to
Hodge and Zweig, requiring them to produce documents and information regarding
payment received by Sandino on behalf of any other person, and vice versa. The lawyers
refused to divulge the names. The Ninth Circuit of the United States Court of Appeals,
upholding non-disclosure under the facts and circumstances of the case, held:

A client's identity and the nature of that client's fee arrangements may be privileged
where the person invoking the privilege can show that a strong probability exists that
disclosure of such information would implicate that client in the very criminal activity for
which legal advice was sought Baird v. Koerner, 279 F. 2d at 680. While in Baird Owe
enunciated this rule as a matter of California law, the rule also reflects federal law.
Appellants contend that the Baird exception applies to this case.

The Baird exception is entirely consonant with the principal policy behind the attorney-
client privilege. "In order to promote freedom of consultation of legal advisors by clients,
the apprehension of compelled disclosure from the legal advisors must be removed;
hence, the law must prohibit such disclosure except on the client's consent." 8 J.
Wigmore, supra sec. 2291, at 545. In furtherance of this policy, the client's identity and
the nature of his fee arrangements are, in exceptional cases, protected as confidential
communications.  36

2) Where disclosure would open the client to civil liability; his identity is privileged. For
instance, the peculiar facts and circumstances of Neugass v. Terminal Cab
Corporation,  prompted the New York Supreme Court to allow a lawyer's claim to the
37

effect that he could not reveal the name of his client because this would expose the latter
to civil litigation.

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was riding,
owned by respondent corporation, collided with a second taxicab, whose owner was
unknown. Plaintiff brought action both against defendant corporation and the owner of
the second cab, identified in the information only as John Doe. It turned out that when the
attorney of defendant corporation appeared on preliminary examination, the fact was
somehow revealed that the lawyer came to know the name of the owner of the second
cab when a man, a client of the insurance company, prior to the institution of legal action,
came to him and reported that he was involved in a car accident. It was apparent under
the circumstances that the man was the owner of the second cab. The state supreme
court held that the reports were clearly made to the lawyer in his professional capacity.
The court said:

That his employment came about through the fact that the insurance company had hired
him to defend its policyholders seems immaterial. The attorney is such cases is clearly
the attorney for the policyholder when the policyholder goes to him to report an
occurrence contemplating that it would be used in an action or claim against him.  38

xxx xxx xxx

All communications made by a client to his counsel, for the purpose of professional
advice or assistance, are privileged, whether they relate to a suit pending or
contemplated, or to any other matter proper for such advice or aid; . . . And whenever the
communication made, relates to a matter so connected with the employment as attorney
or counsel as to afford presumption that it was the ground of the address by the client,
then it is privileged from disclosure. . .

It appears . . . that the name and address of the owner of the second cab came to the
attorney in this case as a confidential communication. His client is not seeking to use the
courts, and his address cannot be disclosed on that theory, nor is the present action
pending against him as service of the summons on him has not been effected. The
objections on which the court reserved decision are sustained.  39

In the case of Matter of Shawmut Mining Company,  the lawyer involved was required by
40

a lower court to disclose whether he represented certain clients in a certain transaction.

The purpose of the court's request was to determine whether the unnamed persons as
interested parties were connected with the purchase of properties involved in the action.
The lawyer refused and brought the question to the State Supreme Court. Upholding the
lawyer's refusal to divulge the names of his clients the court held:

If it can compel the witness to state, as directed by the order appealed from, that he
represented certain persons in the purchase or sale of these mines, it has made progress
in establishing by such evidence their version of the litigation. As already suggested,
such testimony by the witness would compel him to disclose not only that he was
attorney for certain people, but that, as the result of communications made to him in the
course of such employment as such attorney, he knew that they were interested in
certain transactions. We feel sure that under such conditions no case has ever gone to
the length of compelling an attorney, at the instance of a hostile litigant, to disclose not
only his retainer, but the nature of the transactions to which it related, when such
information could be made the basis of a suit against his client. 
41

3) Where the 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, the client's name is
privileged.

In Baird vs. Korner,  a lawyer was consulted by the accountants and the lawyer of certain
42

undisclosed taxpayers regarding steps to be taken to place the undisclosed taxpayers in

a favorable position in case criminal charges were brought against them by the U.S.
Internal Revenue Service (IRS).

It appeared that the taxpayers' returns of previous years were probably incorrect and the
taxes understated. The clients themselves were unsure about whether or not they
violated tax laws and sought advice from Baird on the hypothetical possibility that they
had. No investigation was then being undertaken by the IRS of the taxpayers.
Subsequently, the attorney of the taxpayers delivered to Baird the sum of $12, 706.85,
which had been previously assessed as the tax due, and another amount of money
representing his fee for the advice given. Baird then sent a check for $12,706.85 to the
IRS in Baltimore, Maryland, with a note explaining the payment, but without naming his
clients. The IRS demanded that Baird identify the lawyers, accountants, and other clients
involved. Baird refused on the ground that he did not know their names, and declined to
name the attorney and accountants because this constituted privileged communication. A
petition was filed for the enforcement of the IRS summons. For Baird's repeated refusal
to name his clients he was found guilty of civil contempt. The Ninth Circuit Court of
Appeals held that, a lawyer could not be forced to reveal the names of clients who
employed him to pay sums of money to the government voluntarily in settlement of
undetermined income taxes, unsued on, and with no government audit or investigation
into that client's income tax liability pending. The court emphasized the exception that a
client's name is privileged when so much has been revealed concerning the legal
services rendered that the disclosure of the client's identity exposes him to possible
investigation and sanction by government agencies. The Court held:

The facts of the instant case bring it squarely within that exception to the general rule.
Here money was received by the government, paid by persons who thereby admitted
they had not paid a sufficient amount in income taxes some one or more years in the
past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for
that one year or several years. The voluntary nature of the payment indicates a belief by
the taxpayers that more taxes or interest or penalties are due than the sum previously
paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is
criminal guilt is undisclosed. But it may well be the link that could form the chain of
testimony necessary to convict an individual of a federal crime. Certainly the payment
and the feeling of guilt are the reasons the attorney here involved was employed — to
advise his clients what, under the circumstances, should be done.  43

Apart from these principal exceptions, there exist other situations which could qualify as
exceptions to the general rule.

For example, the content of any client communication to a lawyer lies within the privilege
if it is relevant to the subject matter of the legal problem on which the client seeks legal
assistance.   Moreover, where the nature of the attorney-client relationship has been
44

previously disclosed and it is the identity which is intended to be confidential, the identity
of the client has been held to be privileged, since such revelation would otherwise result
in disclosure of the entire transaction.  45

Summarizing these exceptions, information relating to the identity of a client may fall
within the ambit of the privilege when the client's name itself has an independent
significance, such that disclosure would then reveal client confidences.  46

The circumstances involving the engagement of lawyers in the case at bench, therefore,
clearly reveal that the instant case falls under at least two exceptions to the general rule.
First, disclosure of the alleged client's name would lead to establish said client's
connection with the very fact in issue of the case, which is privileged information,
because the privilege, as stated earlier, protects the subject matter or the substance
(without which there would be not attorney-client relationship).

The link between the alleged criminal offense and the legal advice or legal service sought
was duly establishes in the case at bar, by no less than the PCGG itself. The key lies in
the three specific conditions laid down by the PCGG which constitutes petitioners' ticket
to non-prosecution should they accede thereto:

(a) the disclosure of the identity of its clients;

(b) submission of documents substantiating the lawyer-client relationship; and

(c) the submission of the deeds of assignment petitioners executed in favor of their
clients covering their respective shareholdings.
From these conditions, particularly the third, we can readily deduce that the clients
indeed 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
aforementioned deeds of assignment covering their client's shareholdings.

There is no question that the preparation of the aforestated documents was part and
parcel of petitioners' legal service to their clients. More important, it constituted an
integral part of their duties as lawyers. Petitioners, therefore, have a legitimate 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.

Furthermore, under the third main exception, revelation of the client's name would
obviously provide the necessary link for the prosecution to build its case, where none
otherwise exists. It is the link, in the words of Baird, "that would inevitably form the chain
of testimony necessary to convict the (client) of a . . . crime." 47

An important distinction must be made between a case where a client takes on the
services of an attorney for illicit purposes, seeking advice about how to go around the law
for the purpose of committing illegal activities and a case where a client thinks he might
have previously committed something illegal and consults his attorney about it. The first
case clearly does not fall within the privilege because the same cannot be invoked for
purposes illegal. The second case falls within the exception because whether or not the
act for which the client sought advice turns out to be illegal, his name cannot be used or
disclosed if the disclosure leads to evidence, not yet in the hands of the prosecution,
which might lead to possible action against him.

These cases may be readily distinguished, because the privilege cannot be invoked or
used as a shield for an illegal act, as in the first example; while the prosecution may not
have a case against the client in the second example and cannot use the attorney client
relationship to build up a case against the latter. The reason for the first rule is that it is
not within the professional character of a lawyer to give advice on the commission of a
crime.   The reason for the second has been stated in the cases above discussed and
48

are founded on the same policy grounds for which the attorney-client privilege, in
general, exists.

In Matter of Shawmut Mining Co., supra, the appellate court therein stated that "under
such conditions no case has ever yet gone to the length of compelling an attorney, at the
instance of a hostile litigant, to disclose not only his retainer, but the nature of the
transactions to which it related, when such information could be made the basis of a suit
against his client."   "Communications made to an attorney in the course of any personal
49

employment, relating to the subject thereof, and which may be supposed to be drawn out
in consequence of the relation in which the parties stand to each other, are under the
seal of confidence and entitled to protection as privileged communications."  Where the
50

communicated information, which clearly falls within the privilege, would suggest possible
criminal activity but there would be not much in the information known to the prosecution
which would sustain a charge except that revealing the name of the client would open up
other privileged information which would substantiate the prosecution's suspicions, then
the client's identity is so inextricably linked to the subject matter itself that it falls within
the protection. The Baird exception, applicable to the instant case, is consonant with the
principal policy behind the privilege, i.e., that for the purpose of promoting freedom of
consultation of legal advisors by clients, apprehension of compelled disclosure from
attorneys must be eliminated. This exception has likewise been sustained in In re Grand
Jury Proceedings  and Tillotson v. Boughner.  What these cases unanimously seek to
51 52
avoid is the exploitation of the general rule in what may amount to a fishing expedition by
the prosecution.

There are, after all, alternative source of information available to the prosecutor which do
not depend on utilizing a defendant's counsel as a convenient and readily available
source of information in the building of a case against the latter. Compelling disclosure of
the client's name in circumstances such as the one which exists in the case at bench
amounts to sanctioning fishing expeditions by lazy prosecutors and litigants which we
cannot and will not countenance. When the nature of the transaction would be revealed
by disclosure of an attorney's retainer, such retainer is obviously protected by the
privilege.   It follows that petitioner attorneys in the instant case owe their client(s) a duty
53

and an obligation not to disclose the latter's identity which in turn requires them to invoke
the privilege.

In fine, the crux of petitioners' objections ultimately hinges on their expectation that if the
prosecution has a case against their clients, the latter's case should be built upon
evidence painstakingly gathered by them from their own sources and not from compelled
testimony requiring them to reveal the name of their clients, information which
unavoidably reveals much about the nature of the transaction which may or may not be
illegal. The logical nexus between name and nature of transaction is so intimate in this
case the it would be difficult to simply dissociate one from the other. In this sense, the
name is as much "communication" as information revealed directly about the transaction
in question itself, a communication which is clearly and distinctly privileged. A lawyer
cannot reveal such communication without exposing himself to charges of violating a
principle which forms the bulwark of the entire attorney-client relationship.

The uberrimei fidei relationship between a lawyer and his client therefore imposes a strict
liability for negligence on the former. The ethical duties owing to the client, including
confidentiality, loyalty, competence, diligence as well as the responsibility to keep clients
informed and protect their rights to make decisions have been zealously sustained.
In Milbank, Tweed, Hadley and McCloy v. Boon,  the US Second District Court rejected
54

the plea of the petitioner law firm that it breached its fiduciary duty to its client by helping
the latter's former agent in closing a deal for the agent's benefit only after its client
hesitated in proceeding with the transaction, thus causing no harm to its client. The Court
instead ruled that breaches of a fiduciary relationship in any context comprise a special
breed of cases that often loosen normally stringent requirements of causation and
damages, and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley
P.A. v. Scheller  requiring strict obligation of lawyers vis-a-vis clients. In this case, a
55

contingent fee lawyer was fired shortly before the end of completion of his work, and
sought payment quantum meruit of work done. The court, however, found that the lawyer
was fired for cause after he sought to pressure his client into signing a new fee
agreement while settlement negotiations were at a critical stage. While the client found a
new lawyer during the interregnum, events forced the client to settle for less than what
was originally offered. Reiterating the principle of fiduciary duty of lawyers to clients
in Meinhard v. Salmon  famously attributed to Justice Benjamin Cardozo that "Not
56

honesty alone, but the punctilio of an honor the most sensitive, is then the standard of
behavior," the US Court found that the lawyer involved was fired for cause, thus deserved
no attorney's fees at all.

The utmost zeal given by Courts to the protection of the lawyer-client confidentiality
privilege and lawyer's loyalty to his client is evident in the duration of the protection,
which exists not only during the relationship, but extends even after the termination of the
relationship.  57
Such are the unrelenting duties required by lawyers vis-a-vis their clients because the
law, which the lawyers are sworn to uphold, in the words of Oliver Wendell Holmes,   ". . .
58

is an exacting goddess, demanding of her votaries in intellectual and moral discipline."

The Court, no less, is not prepared to accept respondents' position without denigrating
the noble profession that is lawyering, so extolled by Justice Holmes in this wise:

Every calling is great when greatly pursued. But what other gives such scope to realize
the spontaneous energy of one's soul? In what other does one plunge so deep in the
stream of life — so share its passions its battles, its despair, its triumphs, both as witness
and actor? . . . But that is not all. What a subject is this in which we are united — this
abstraction called the Law, wherein as in a magic mirror, we see reflected, not only in our
lives, but the lives of all men that have been. When I think on this majestic theme my
eyes dazzle. If we are to speak of the law as our mistress, we who are here know that
she is a mistress only to be won with sustained and lonely passion — only to be won by
straining all the faculties by which man is likened to God.

We have no choice but to uphold 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.

If we were to sustain respondent PCGG that the lawyer-client confidential privilege under
the circumstances obtaining here does not cover the identity of the client, then it would
expose the lawyers themselves to possible litigation by their clients in view of the strict
fiduciary responsibility imposed on them in the exercise of their duties.

The complaint in Civil Case No. 0033 alleged that the defendants therein, including
herein petitioners and Eduardo Cojuangco, Jr. conspired with each other in setting up
through the use of coconut levy funds the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM and others and that through
insidious means and machinations, ACCRA, using its wholly-owned investment arm,
ACCRA Investment Corporation, became the holder of approximately fifteen million
shares representing roughly 3.3% of the total capital stock of UCPB as of 31 March 1987.
The PCGG wanted to establish through the ACCRA lawyers that Mr. Cojuangco is their
client and it was Cojuangco who furnished all the monies to the subscription payment;
hence, petitioners acted as dummies, nominees and/or agents by allowing themselves,
among others, to be used as instrument in accumulating ill-gotten wealth through
government concessions, etc., which acts constitute gross abuse of official position and
authority, flagrant breach of public trust, unjust enrichment, violation of the Constitution
and laws of the Republic of the Philippines.

By compelling petitioners, not only to reveal the identity of their clients, but worse, to
submit to the PCGG documents substantiating the client-lawyer relationship, as well as
deeds of assignment petitioners executed in favor of its clients covering their respective
shareholdings, the PCGG would exact from petitioners a link "that would inevitably form
the chain of testimony necessary to convict the (client) of a crime."

III

In response to petitioners' last assignment of error, respondents alleged that the private
respondent was dropped as party defendant not only because of his admission that he
acted merely as a nominee but also because of his undertaking to testify to such facts
and circumstances "as the interest of truth may require, which includes . . . the identity of
the principal."
59
First, as to the bare statement that private respondent merely acted as a lawyer and
nominee, a statement made in his out-of-court settlement with the PCGG, it is sufficient
to state that petitioners have likewise made the same claim not merely out-of-court but
also in the Answer to plaintiff's Expanded Amended Complaint, signed by counsel,
claiming that their acts were made in furtherance of "legitimate lawyering."  Being 60

"similarly situated" in this regard, public respondents must show that there exist other
conditions and circumstances which would warrant their treating the private respondent
differently from petitioners in the case at bench in order to evade a violation of the equal
protection clause of the Constitution.

To this end, public respondents contend that the primary consideration behind their
decision to sustain the PCGG's dropping of private respondent as a defendant was his
promise to disclose the identities of the clients in question. However, respondents failed
to show — and absolute nothing exists in the records of the case at bar — that private
respondent actually revealed the identity of his client(s) to the PCGG. Since the
undertaking happens to be the leitmotif of the entire arrangement between Mr. Roco and
the PCGG, an undertaking which is so material as to have justified PCGG's special
treatment exempting the private respondent from prosecution, respondent
Sandiganbayan should have required proof of the undertaking more substantial than a
"bare assertion" that private respondent did indeed comply with the undertaking. Instead,
as manifested by the PCGG, only three documents were submitted for the purpose, two
of which were mere requests for re-investigation and one simply disclosed certain clients
which petitioners (ACCRA lawyers) were themselves willing to reveal. These were clients
to whom both petitioners and private respondent rendered legal services while all of them
were partners at ACCRA, and were not the clients which the PCGG wanted disclosed for
the alleged questioned transactions. 61

To justify the dropping of the private respondent from the case or the filing of the suit in
the respondent court without him, therefore, the PCGG should conclusively show that Mr.
Roco was treated as species apart from the rest of the ACCRA lawyers on the basis of a
classification which made substantial distinctions based on real differences. No such
substantial distinctions exist from the records of the case at bench, in violation of the
equal protection clause.

The equal protection clause is 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.   Those who fall within a particular class ought to be treated alike not only as
62

to privileges granted but also as to the liabilities imposed.

. . . What is required under this constitutional guarantee is the uniform operation of legal
norms so that all persons under similar circumstances would be accorded the same
treatment both in the privileges conferred and the liabilities imposed. As was noted in a
recent decision: "Favoritism and undue preference cannot be allowed. For the principle is
that equal protection and security shall be given to every person under circumstances,
which if not identical are analogous. If law be looked upon in terms of burden or charges,
those that fall within a class should be treated in the same fashion, whatever restrictions
cast on some in the group equally binding the rest. 63

We find that the condition precedent required by the respondent PCGG of the petitioners
for their exclusion as parties-defendants in PCGG Case No. 33 violates the lawyer-client
confidentiality privilege. The condition also constitutes a transgression by respondents
Sandiganbayan and PCGG of the equal protection clause of the Constitution.  It is 64

grossly unfair to exempt one similarly situated litigant from prosecution without allowing
the same exemption to the others. Moreover, the PCGG's demand not only touches upon
the question of the identity of their clients but also on documents related to the suspected
transactions, not only in violation of the attorney-client privilege but also of the
constitutional right against self-incrimination. Whichever way one looks at it, this is a
fishing expedition, a free ride at the expense of such rights.

An argument is advanced that the invocation by petitioners of the privilege of attorney-

client confidentiality at this stage of the proceedings is premature and that they should
wait until they are called to testify and examine as witnesses as to matters learned in
confidence before they can raise their objections. But petitioners are not mere witnesses.
They are co-principals in the case for recovery of alleged ill-gotten wealth. They have
made their position clear from the very beginning that they are not willing to testify and
they cannot be compelled to testify in view of their constitutional right against self-
incrimination and of their fundamental legal right to maintain inviolate the privilege of
attorney-client confidentiality.

It is clear then that the case against petitioners should never be allowed to take its full
course in the Sandiganbayan. Petitioners should not be made to suffer the effects of
further litigation when it is obvious that their inclusion in the complaint arose from a
privileged attorney-client relationship and as a means of coercing them to disclose the
identities of their clients. To allow the case to continue with respect to them when this
Court could nip the problem in the bud at this early opportunity would be to sanction an
unjust situation which we should not here countenance. The case hangs as a real and
palpable threat, a proverbial Sword of Damocles over petitioners' heads. It should not be
allowed to continue a day longer.

While we are aware of respondent PCGG's legal mandate to recover ill-gotten wealth, we
will not sanction acts which violate the equal protection guarantee and the right against
self-incrimination and subvert the lawyer-client confidentiality privilege.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of respondent

Sandiganbayan (First Division) promulgated on March 18, 1992 and May 21, 1992 are
hereby ANNULLED and SET ASIDE. Respondent Sandiganbayan is further ordered to
exclude petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C.
Concepcion, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayuduni as parties-
defendants in SB Civil Case No. 0033 entitled "Republic of the Philippines v. Eduardo
Cojuangco, Jr., et al."

SO ORDERED.

Separate Opinions

 
VITUG, J., concurring:

The legal profession, despite all the unrestrained calumny hurled against it, is still the
noblest of professions. It exists upon the thesis that, in an orderly society that is opposed
to all forms of anarchy, it so occupies, as it should, an exalted position in the proper
dispensation of justice. In time, principles have evolved that would help ensure its
effective ministration. The protection of confidentiality of the lawyer-client relationship is
one, and it has since been an accepted firmament in the profession. It allows the lawyer
and the client to institutionalize a unique relationship based on full trust and confidence
essential in a justice system that works on the basis of substantive and procedural due
process. To be sure, the rule is not without its pitfalls, and demands against it may be
strong, but these problems are, in the ultimate analysis, no more than mere tests of vigor
that have made and will make that rule endure.

I see in the case before us, given the attendant circumstances already detailed in
the ponencia, a situation of the Republic attempting to establish a case not on what it
perceives to be the strength of its own evidence but on what it could elicit from a counsel
against his client. I find it unreasonable for the Sandiganbayan to compel petitioners to
breach the trust reposed on them and succumb to a thinly disguised threat of
incrimination.

Accordingly, I join my other colleague who vote for the GRANT of the petition.

DAVIDE, JR., J.: dissenting

The impressive presentation of the case in the ponencia of Mr. Justice Kapunan makes
difficult the espousal of a dissenting view. Nevertheless, I do not hesitate to express that
view because I strongly feel that this Court must confine itself to the key issue in this
special civil action for certiorari, viz., 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. That issue, unfortunately, has been simply
buried under the avalanche of authorities upholding the sanctity of lawyer-client
relationship which appears to me to be prematurely invoked.

From the undisputed facts disclosed by the pleadings and summarized in the ponencia, I
cannot find my way clear to a conclusion that the Sandiganbayan committed grave abuse
of discretion in not acting favorably on the petitioners' prayer in their Comment to the
PCGG's Motion to Admit Third Amended Complaint.

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. The control of the Court comes in only
when the issue of "interest" (§ 2, Rule 3, Rules of Court) as, e.g., whether an
indispensable party has not been joined, or whether there is a misjoinder of parties (§ 7,
8, and 9, Id.), is raised.

In the case below, the PCGG decided to drop or exclude from the complaint original co-
defendant Raul Roco because he had allegedly complied with the condition prescribed
by the PCGG, viz., undertake that he will reveal the identity of the principals for whom he
acted as nominee/stockholder in the companies involved in PCGG Case No. 0033. In
short, there was an agreement or compromise settlement between the PCGG and Roco.
Accordingly, the PCGG submitted a Third Amended Complaint without Roco as a
defendant. No obstacle to such an agreement has been insinuated. 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. There is at all no showing that Civil Case No. 0033 cannot further be
proceeded upon or that any judgment therein cannot be binding without Roco remaining
as a defendant. Accordingly, the admission of the Third Amended Complaint cannot be
validly withheld by the Sandiganbayan.

Are the petitioners, who did not file a formal motion to be excluded but only made the
request to that effect as a rider to their Comment to the Motion to Admit Third Amended
Complaint, entitled to be excluded from the Third Amended Complaint such that denial
thereof would constitute grave abuse of discretion on the Sandiganbayan's part? To me,
the answer is clearly in the negative.
The petitioners seek to be accorded the same benefit granted to or to be similarly treated
as Roco. Reason and logic dictate that they cannot, unless they too would make
themselves like Roco. Otherwise stated, they must first voluntarily adopt for themselves
the factual milieu created by Roco and must bind themselves to perform certain
obligations as Roco. It is precisely for this that in response to the petitioners' comment on
the aforementioned Motion to Admit Third Amended Complaint the PCGG manifested
that it is willing to accord the petitioners the treatment it gave Roco provided they would
do what Roco had done, that is, disclose the identity of their principals/clients and submit
documents substantiating their claimed lawyer-client relationship with the said
principals/clients, as well as copies of deeds of assignments the petitioners executed in
favor of their principals/clients. The petitioners did not do so because they believed that
compliance thereof would breach the sanctity of their fiduciary duty in a lawyer-client
relationship.

It, indeed, appears that Roco has complied with his obligation as a consideration for his
exclusion from the Third Amended Complaint. The Sandiganbayan found that

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
action against him. This in turn has allowed the PCGG to exercise its power both under
the rules of agency and under Section 5 of E.O. No. 14-1 in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

As a matter of fact, the PCGG presented evidence to substantiate Roco's compliance.

The ponencia itself so stated, thus:

. . . respondent PCGG presented evidence to substantiate compliance by private

respondent Roco of the conditions precedent to warrant the latter's exclusion as party-
defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of
respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by
the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private
respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of Roco,
Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent in behalf
of private respondent Roco originally requesting the reinvestigation and/or re-
examination of evidence by the PCGG it Complaint in PCGG Case No. 33. (Id., 5-6).

These are the pieces of evidence upon which the Sandiganbayan founded its conclusion
that the PCGG was satisfied with Roco's compliance. The petitioners have not assailed
such finding as arbitrary.

The ponencia's observation then that Roco did not refute the petitioners' contention that
he did not comply with his obligation to disclose the identity of his principals is entirely
irrelevant.

In view of their adamantine position, the petitioners did not, therefore, allow themselves
to be like Roco. They cannot claim the same treatment, much less compel the PCGG to
drop them as defendants, for nothing whatsoever. 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 based on the grounds
allowed by law (e.g., those enumerated in § 1, Rule 16, Rules of Court). The rule of
confidentiality under the lawyer-client relationship is not a cause to exclude a party. It is
merely aground for disqualification of a witness (§ 24, Rule 130, Rules of Court) and may
only be invoked at the appropriate time, i.e., when a lawyer is under compulsion to
answer as witness, as when, having taken the witness stand, he is questioned as to such
confidential communicator or advice, or is being otherwise judicially coerced to produce,
through subpoena duces tecum or otherwise, letters or other documents containing the
same privileged matter. But none of the lawyers in this case is being required to testify
about or otherwise reveal "any [confidential] communication made by the client to him, or
his advice given thereon in the course of, or with a view to, professional employment."
What they are being asked to do, in line with their claim that they had done the acts
ascribed to them in pursuance of their professional relation to their clients, is to identify
the latter to the PCGG and the Court; but this, only if they so choose in order to be
dropped from the complaint, such identification being the condition under which the
PCGG has expressed willingness to exclude them from the action. The revelation is
entirely optional, discretionary, on their part. The attorney-client privilege is not therefor
applicable.

Thus, the Sandiganbayan did not commit any abuse of discretion when it denied the
petitioners' prayer for their exclusion as party-defendants because they did not want to
abide with any of the conditions set by the PCGG. There would have been abuse if the
Sandiganbayan granted the prayer because then it would have capriciously, whimsically,
arbitrarily, and oppressively imposed its will on the PCGG.

Again, what the petitioners want is their exclusion from the Third Amended Complaint or
the dismissal of the case insofar as they are concerned because either they are invested
with immunity under the principle of confidentiality in a lawyer-client relationship, or the
claims against them in Civil Case No. 0033 are barred by such principle.

Even if we have to accommodate this issue, I still submit that the lawyer-client privilege
provides the petitioners no refuge. They are sued as principal defendants in Civil Case
No. 0033, a case of the recovery of alleged ill-gotten wealth. Conspiracy is imputed to the
petitioners therein. In short, they are, allegedly, conspirators in the commission of the
acts complained of for being nominees of certain parties.

Their inclusion as defendants in justified under § 15, Article XI of the Constitution —

which provides that the right of the State to recover properties unlawfully acquired by
public officials or employees, from them or from their nominees or transferees, shall not
be barred by prescription, laches or estoppel — and E.O. No. 1 of 28 February 1986,
E.O. No. 2 of 12 March 1986, E.O. No. 14 of 7 May 1986, and the Rules and Regulations
of the PCGG. Furthermore, § 2, Rule 110 of the Rules of Court requires that the
complaint or information should be "against all persons who appear to be responsible for
the offense involved."

Hypothetically admitting the allegations in the complaint in Civil Case No. 0033, I find
myself unable to agree with the majority opinion that the petitioners are immune from suit
or that they have to be excluded as defendants, or that they cannot be compelled to
reveal or disclose the identity of their principals, all because of the sacred lawyer-client
privilege.

This privilege is well put in Rule 130 of the Rules of Court, to wit:

§ 24. Disqualification by reason of privileged communication. — The following persons

cannot testify as to matters learned in confidence in the following cases:

xxx xxx xxx

(b) 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, or
with a view to, professional employment, nor can an attorney's secretary, stenographer,
or clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity.
The majority seeks to expand the scope of the Philippine rule on the lawyer-client
privilege by copious citations of American jurisprudence which includes in the privilege
the identity of the client under the exceptional situations narrated therein. From the
plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of privilege
contested therein arose in grand jury proceedings on different States, which are
preliminary proceedings before the filing of the case in court, and we are not even told
what evidentiary rules apply in the said hearings. In the present case, the privilege is
invoked in the court where it was already filed and presently pends, and we have the
foregoing specific rules above-quoted. Secondly, and more important, 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 in the offenses
charged. The cases cited by the majority evidently do not apply to them.

Hence, I wish to repeat and underscore the fact that the lawyer-client privilege is not a
shield for the commission of a crime or against the prosecution of the lawyer therefor. I
quote, with emphases supplied, from 81 AM JUR 2d, Witnesses, § 393 to 395, pages
356-357:

§ 393. Effect of unlawful purpose.

The existence of an unlawful purpose prevents the attorney-client privilege from

attaching. The attorney-client privilege does not generally exist where the representation
is sought to further criminal or fraudulent conduct either past, present, or future. Thus, a
confidence received by an attorney in order to advance a criminal or fraudulent purpose
is beyond the scope of the privilege.

Observation: The common-law rule that the privilege protecting confidential

communications between attorney and client is lost if the relation is abused by a client
who seeks legal assistance to perpetrate a crime or fraud has been codified.

§ 394. Attorney participation.

The attorney-client privilege cannot be used to protect a client in the perpetration of a

crime in concert with the attorney, even where the attorney is not aware of his client's
purpose. The reason for the rule is that it is not within the professional character of a
lawyer to give advised on the commission of crime. Professional responsibility does not
countenance the use of the attorney-client privilege as a subterfuge, and all conspiracies,
either active or passive, which are calculated to hinder the administration of justice will
vitiate the privilege. In some jurisdictions, however, this exception to the rule of privilege
in confined to such intended acts in violation of the law as are mala in se, as
distinguished from those which are merely mala prohibita.

§ 395. Communication in contemplation of crime.

Communications between attorney and client having to do with the client's contemplated
criminal acts, or in aid or furtherance thereof, are not covered by the cloak of privilege
ordinarily existing in reference to communications between attorney and client. But, the
mere charge of illegality, not supported by evidence, will not defeat the privilege; there
must be at least prima facie evidence that the illegality has some foundation in fact.

Underhill also states:

There are many other cases to the same effect, for the rule is prostitution of the
honorable relation of attorney and client will not be permitted under the guise of privilege,
and every communication made to an attorney by a client for a criminal purpose is a
conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the
attorney under certain circumstances may be bound to disclose at once in the interest of
justice. In accordance with this rule, where a forged will or other false instrument has
come into possession of an attorney through the instrumentality of the accused, with the
hope and expectation that the attorney would take some action in reference thereto, and
the attorney does act, in ignorance of the true character of the instrument, there is no
privilege, inasmuch as full confidence has been withheld. The attorney is then compelled
to produce a forged writing against the client. The fact that the attorney is not cognizant
of the criminal or wrongful purpose, or, knowing it, attempts to dissuade his client, is
immaterial. The attorney's ignorance of his client's intentions deprives the information of
a professional character as full confidence has been withheld. (H.C. Underhill, A Treatise
on the Law of Criminal Case Evidence, vol. 2, Fifth ed. (1956), Sec. 332, pp. 836-837;
emphasis mine).

125 AMERICAN LAW REPORTS ANNOTATED, 516-519, summarizes the rationale of

the rule excepting communications with respect to contemplated criminal or fraudulent
acts, thus:

c. Rationale of rule excepting communications with respect to contemplated criminal or

fraudulent act.

Various reasons have been announced as being the foundation for the holdings that
communications with respect to contemplated criminal or fraudulent acts are not
privileged.

The reason perhaps most frequently advanced is that in such cases there is no
professional employment, properly speaking. Standard F. Ins. Co v. Smithhart (1919)
183 Ky 679, 211 SW. 441, 5 ALR 972; Cummings v. Com. (1927) 221 Ky 301, 298 SW
943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van Alstine (1885)
57 Mich 69, 23 NW 594; Hamil & Co. v. England (1892) 50 Mo App 338; Carney
v. United R. Co. (1920) 205 Mo App 495, 226 SW 308; Matthews v. Hoagland (1891) 48
NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM Dec
287; People ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed
without opinion in (1934) 242 App Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9
Hare 387, 68 Eng Reprint 558; Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint
751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR; Re Postlethwaite (1887) LR
35 Ch Div (Eng) 722.

In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court said: "In order that the
rule may apply, there must be both professional confidence and professional
employment, but if the client has a criminal object in view in his communications with his
solicitor one of these elements must necessarily be absent. The client must either
conspire with his solicitor or deceive him. If his criminal object is avowed, the client does
not consult his adviser professionally, because it cannot be the solicitor's business to
further any criminal object. If the client does not avow his object, he reposes no
confidence, for the state of facts which is the foundation of the supposed confidence
does not exist. The solicitor's advice is obtained by a fraud."

So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW 441, 5 ALR 972, the

court said: "The reason of the principle which holds such communications not to be
privileged is that it is not within the professional character of a lawyer to give advice upon
such subjects, and that it is no part of the profession of an attorney or counselor at law to
be advising persons as to how they may commit crimes or frauds, or how they may
escape the consequences of contemplated crimes and frauds. If the crime or fraud has
already been committed and finished, a client may advise with an attorney in regard to it,
and communicate with him freely, and the communications cannot be divulged as
evidence without the consent of the client, because it is a part of the business and duty of
those engaged in the practice of the profession of law, when employed and relied upon
for that purpose, to give advice to those who have made infractions of the laws; and, to
enable the attorney to properly advise and to properly represent the client in court or
when prosecutions are threatened, it is conducive to the administration of justice that the
client shall be free to communicate to his attorney all the facts within his knowledge, and
that he may be assured that a communication made by him shall not be used to his
prejudice."

The protection which the law affords to communications between attorney and client has
reference to those which are legitimately and properly within the scope of a lawful
employment, and does not extend to communications made in contemplation of a crime,
or perpetration of a fraud. Strong v. Abner (1937) 368 Ky 502, 105 SW (2d) 599.

The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in holding not

privileged communications to an attorney having for their object the communication of a
crime, said: "They then partake of the nature of a conspiracy, or attempted conspiracy,
and it is not only lawful to divulge such communications, but under certain circumstances
it might become the duty of the attorney to do so. The interests of public justice require
that no such shield from merited exposure shall be interposed to protect a person who
takes counsel how he can safely commit a crime. The relation of attorney and client
cannot exist for the purpose of counsel in concocting crimes."

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287, the court was of the
opinion that there could be no such relation as that of attorney and client, either in the
commission of a crime, or in the doing of a wrong by force or fraud to an individual, the
privileged relation of attorney and client existing only for lawful and honest purposes.

If the client consults the attorney at law with reference to the perpetration of a crime, and
they co-operate in effecting it, there is no privilege, inasmuch as it is no part of the
lawyer's duty to aid in crime — he ceases to be counsel and becomes a
criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.

The court cannot permit it to be said that the contriving of a fraud forms part of the
professional business of an attorney or solicitor. Charlton v. Coombes (1863) 4 Giff 372,
66 Eng Reprint 751.

If the client does not frankly and freely reveal his object and intention as well as facts,
there is not professional confidence, and therefore no privilege. Matthews
v. Hoagland (NJ) supra. See to the same effect Carney v. United R. Co. (1920) 205 Mo
App 495, 226 SW 308.

There is no valid claim of privilege in regard to the production of documents passing

between solicitor and client, when the transaction impeached is charged to be based
upon fraud, that is the matter to be investigated, and it is thought better that the alleged
privilege should suffer than that honestly and fair dealing should appear to be violated
with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.

In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in Reg. v. Cox (1884)
LR 14 QB Div (Eng) 172 — CCR), the chief justice said "I believe the law is, and properly
is, that if a party consults an attorney, and obtains advice for what afterwards turns out to
be the commission of a crime or a fraud, that party so consulting the attorney has no
privilege whatever to close the lips of the attorney from stating the truth. Indeed, if any
such privilege should be contended for, or existing, it would work most grievous hardship
on an attorney, who, after he had been consulted upon what subsequently appeared to
be a manifest crime and fraud, would have his lips closed, and might place him in a very
serious position of being suspected to be a party to the fraud, and without his having an
opportunity of exculpating himself . . . There is no privilege in the case which I have
suggested of a party consulting another, a professional man, as to what may afterwards
turn out to be a crime or fraud, and the best mode of accomplishing it."

In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question of privilege as to

communications between attorney and client was not involved, the question directly
involved being the competency of a clerk in a business establishment to testify as to
certain information which he acquired while working in the establishment, the court
strongly approved of a view as stated arguendo for plaintiff, in Annesley
v. Anglesea (1743) 17 How St Tr (Eng) 1229, as follows: "I shall claim leave to consider
whether an attorney may be examined as to any matter which came to his knowledge as
an attorney. If he is employed as an attorney in any unlawful or wicked act, his duty to the
public obliges him to disclose it; no private obligations can dispense with that universal
one which lies on every member of society to discover every design which may be
formed, contrary to the laws of society, to destroy the public welfare. For this reason, I
apprehend that if a secret which is contrary to the public good, such as a design to
commit treason, murder, or perjury, comes to the knowledge of an attorney, even in a
cause where he is concerned, the obligation to the public must dispense with the private
obligation to the client."

The court in McMannus v. State (1858) 2 Head (Tenn) 213, said; "It would be monstrous
to hold that if counsel was asked and obtained in reference to a contemplated crime that
the lips of the attorney would be sealed, when the facts might become important to the
ends of justice in the prosecution of crime. In such a case the relation cannot be taken to
exist. Public policy would forbid it."

And the court in Lanum v. Patterson (1909) 151 Ill App 36, observed that this rule was
not in contravention of sound public policy, but on the contrary, tended to the
maintenance of a higher standard of professional ethics by preventing the relation of
attorney and client from operating as a cloak for fraud.

Communications of a client to an attorney are not privileged if they were a request for
advice as to how to commit a fraud, it being in such a case not only the attorney's
privilege, but his duty, to disclose the facts to the court. Will v. Tornabells & Co. (1907) 3
Porto Rico Fed Rep 125. The court said: "We say this notwithstanding the comments of
opposing counsel as to the indelicacy of his position because of his being now on the
opposite side of the issue that arose as a consequence of the communication he testifies
about, and is interested in the cause to the extent of a large contingent fee, as he
confesses."

The object of prohibiting the disclosure of confidential communications is to protect the

client, and not to make the attorney an accomplice or permit him to aid in the commission
of a crime. People vs. Petersen (1901) 60 App Div 118, NYS 941.

The seal of personal confidence can never be used to cover a transaction which is in
itself a crime. People v. Farmer (1909) 194 NY 251, 87 NE 457.

As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, § 410 and 411, pages
366-368, states:

§ 410. Name or identity of client.

Disclosure of a client's identity is necessary proof of the existence of the attorney-client

relationship and is not privileged information. Thus, the attorney-client privilege is
inapplicable even though the information was communicated confidentially to the attorney
in his professional capacity and, in some cases, in spite of the fact that the attorney may
have been sworn to secrecy, where an inquiry is directed to an attorney as to the name
or identity of his client. This general rule applies in criminal cases, as well as in civil
actions. Where an undisclosed client is a party to an action, the opposing party has a
right to know with whom he is contending or who the real party in interest is, if not the
nominal adversary.

§ 411. Disclosure of identity of client as breach of confidentiality.

The revelation of the identification of a client is not usually considered privileged, except
where so much has been divulged with regard to to legal services rendered or the advice
sought, that to reveal the client's name would be to disclose the whole relationship and
confidential communications. However, even where the subject matter of the attorney-
client relationship has already been revealed, the client's name has been deemed
privileged.

Where disclosure of the identity of a client might harm the client by being used against
him under circumstances where there are no countervailing factors, then the identity is
protected by the attorney-client privilege.

In criminal proceedings, a client's name may be privileged if information already obtained

by the tribunal, combined with the client's identity, might expose him to criminal
prosecution for acts subsequent to, and because of, which he had sought the advice of
his attorney.

Although 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, where the
attorney has surrendered to the authorities physical evidence in his possession by way of
the attorney-client relationship, the state must prove the connection between the piece of
physical evidence and the defendant without in any way relying on the testimony of the
client's attorney who initially received the evidence and, thus, the attorney may not be
called to the stand and asked to disclose the identity of the client. However, an attorney
cannot refuse to reveal the identity of a person who asked him to deliver stolen property
to the police department, whether a bona fide attorney-client relationship exists between
them, inasmuch as the transaction was not a legal service or done in the attorney's
professional capacity.

Distinction: Where an attorney was informed by a male client that his female
acquaintance was possibly involved in [a] his-and-run accident, the identity of the female
did not come within scope of attorney-client privilege although the identity of the male
client was protected. (emphases supplied)

WIGMORE explains why the identity of a client is not within the lawyer-client privilege in
this manner:

§ 2313. Identity of client or purpose of suit. — The identity of the attorney's client or the
name of the real party in interest will seldom be a matter communicated in confidence
because the procedure of litigation ordinarily presupposes a disclosure of these facts.
Furthermore, so far as a client may in fact desire secrecy and may be able to secure
action without appearing as a party to the proceedings, it would be improper to sanction
such a wish. Every litigant is in justice entitled to know the identity of his opponents. He
cannot be obliged to struggle in the dark against unknown forces. He has by anticipation
the right, in later proceedings, if desired, to enforce the legal responsibility of those who
may have maliciously sued or prosecuted him or fraudulently evaded his claim. He has
as much right to ask the attorney "Who fees your fee?" as to ask the witness (966 supra).
"Who maintains you during this trial?" upon the analogy of the principle already examined
(2298 supra), the privilege cannot be used to evade a client's responsibility for the use of
legal process. And if it is necessary for the purpose to make a plain exception to the rule
of confidence, then it must be made. (Wigmore on Evidence, vol. 8, (1961), p. 609;
emphases supplied).

In 114 ALR, 1322, we also find the following statement:

1. Name or identity.

As is indicated in 28 R.C.L. p. 563, it appears that the rule making communications

between attorney and client privileged from disclosure ordinarily does not apply where
the inquiry is confined to the fact of the attorney's employment and the name of the
person employing him, since the privilege presupposes the relationship of client and
attorney, and therefore does not attach to its creation.

At the present stage of the proceedings below, the petitioners have not shown that they
are so situated with respect to their principals as to bring them within any of the
exceptions established by American jurisprudence. There will be full opportunity for them
to establish that fact at the trial where the broader perspectives of the case shall have
been presented and can be better appreciated by the court. The insistence for their
exclusion from the case is understandable, but the reasons for the hasty resolution
desired is naturally suspect.

We do not even have to go beyond our shores for an authority that the lawyer-client
privilege cannot be invoked to prevent the disclosure of a client's identity where the
lawyer and the client are conspirators in the commission of a crime or a fraud. Under our
jurisdiction, lawyers are mandated not to counsel or abet activities aimed at defiance of
the law or at lessening confidence in the legal system (Rule 1.02, Canon 1, Code of
Professional Responsibility) and to employ only fair and honest means to attain the lawful
objectives of his client (Rule 19.01, Canon 19, Id.). And under the Canons of Professional
Ethics, a lawyer must steadfastly bear in mind that his great trust is to be performed
within and not without the bounds of the law (Canon 15, Id.), that he advances the honor
of his profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance with the
strictest principles of moral law (Canon 32, Id.). These canons strip a lawyer of the
lawyer-client privilege whenever he conspires with the client in the commission of a crime
or a fraud.

I then vote to DENY, for want of merit, the instant petition.

Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

This is an important petition for certiorari to annul the resolutions of the

respondent Sandiganbayan denying petitioners' motion to be excluded from the
Complaint for recovery of alleged ill-gotten wealth on the principal ground that as lawyers
they cannot be ordered to reveal the identity of their client.

First, we fast forward the facts. The Presidential Commission on Good Government
(PCGG) filed Civil Case No. 33 before the Sandiganbayan against Eduardo M.
Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as co-defendants are
the petitioners in the cases at bar — lawyers Teodoro Regala, Edgardo J. Angara,
Avelino V. Cruz, Jose Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo
Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer Raul Roco, now
a duly elected senator of the Republic. All co-defendants were then partners of the law
firm, Angara, Abello, Concepcion, Regala and Cruz Law Offices, better known as the
ACCRA Law Firm. The Complaint against Cojuangco, Jr., and the petitioners
alleged, inter alia, viz:

xxx xxx xxx

The wrongs committed by defendants acting singly or collectively and in unlawful concert
with one another, include the misappropriation and theft of public funds, plunder of the
nation's wealth, extortion, blackmail, bribery, embezzlement and other acts of corruption,
betrayal of public trust and brazen abuse of power as more fully described (in the
subsequent paragraphs of the complaint), all at the expense and to the grave and
irreparable damage of Plaintiff and the Filipino people.

Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro

D. Regala, Avelino V. Cruz, Regalio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini
and Raul S. Roco of Angara, Concepcion, Cruz, Regala, and Abello law offices (ACCRA)
plotted, devised, schemed, conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK,
CIC and more than twenty other coconut levy funded corporations, including the
acquisition of the San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly. through insidious means and
machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately fifteen million shares representing
roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This
ranks ACCRA Investments Corporation number 44 among the top 100 biggest
stockholders of UCPB which has approximately 1,400,000 shareholders. On the other
hand, corporate books show the name Edgardo J. Angara as holding approximately
3,744 shares as of 7 June 1984.

In their Answer, petitioners alleged that the legal services offered and made available by
their firm to its clients include: (a) organizing and acquiring business organizations, (b)
acting as incorporators or stockholders thereof, and (c) delivering to clients the
corresponding documents of their equity holdings (i.e., certificates of stock endorsed in
blank or blank deeds of trust or assignment). They claimed that their activities were "in
furtherance of legitimate lawyering."

In the course of the proceedings in the Sandiganbayan, the PCGG filed a Motion to
Admit Third Amended Complaint and the Third Amended Complaint excluding lawyer
Roco as party defendant. Lawyer Roco was excluded on the basis of his promise to
reveal the identity of the principals for whom he acted as nominee/stockholder in the
companies involved in the case.

The Sandiganbayan ordered petitioners to comment on the motion. In their Comment,

petitioners demanded that they be extended the same privilege as their co-defendant
Roco. They prayed for their exclusion from the complaint. PCGG agreed but set the
following conditions: (1) disclosure of the identity of their client; (2) submission of
documents substantiating their lawyer-client relationship; and (3) submission of the
deeds of assignment petitioners executed in favor of their client covering their respective
shareholdings. The same conditions were imposed on lawyer Roco.

Petitioners refused to comply with the PCGG conditions contending that the attorney-
client privilege gives them the right not to reveal the identity of their client. They also
alleged that lawyer Roco was excluded though he did not in fact reveal the identity of his
clients. On March 18, 1992, the Sandiganbayan denied the exclusion of petitioners in
Case No. 33. It held:
 xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for
whom they have acted, i.e., their principal, and that will be their choice. But until they do
identify their clients, considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to the debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to establish the
basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG
as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
course against him. This in turn has allowed the PCGG to exercise its power both under
the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of
by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7,
PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not
to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as a party
defendants. In the same vein, they cannot compel the PCGG to be accorded the same
treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers
and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as
accorded to Raul S. Roco is DENIED for lack of merit.

Sandiganbayan later denied petitioners' motions for reconsideration in its resolutions

dated May 21, 1988 and September 3, 1992.

In this petition for certiorari, petitioners contend:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners

ACCRA lawyers who indisputably acted as lawyers in serving as nominee-stockholders,
to the strict application of the law agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering

petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving
of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to
reveal, the identities of the client(s) for whom he acted as nominee-stockholder.
2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities
of the client(s), the disclosure does not constitute a substantial distinction as would make
the classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of

Mr. Roco and violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in 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.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity
of the client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of
petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that
the dropping of party-defendants by the PCGG must be based on reasonable and just
grounds and with due consideration to the constitutional right of petitioners ACCRA
lawyers to the equal protection of the law.

The petition at bar is atypical of the usual case where the hinge issue involves the
applicability of attorney-client privilege. It ought to be noted that petitioners were included
as defendants in Civil Case No. 33 as conspirators. Together with Mr. Cojuangco, Jr.,
they are charged with having ". . . conspired and confederated with each other in setting
up, through the use of the coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK,
CICI and more than twenty other coconut levy funded corporations, including the
acquisition of San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly." To stress, petitioners are charged with
having conspired in the commission of crimes. 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. Petitioners refused to comply and assailed the condition on the
ground that to reveal the identity of their client will violate the attorney-client privilege.

It is thus necessary to resolve whether the Sandiganbayan committed grave abuse of

discretion when it rejected petitioners' thesis that to reveal the identity of their client
would violate the attorney-client privilege. The attorney-client privilege is the oldest of the
privileges for confidential communications known to the common law.  For the first time in
1

this jurisdiction, we are asked to rule whether the attorney-client privilege includes the
right not to disclose the identity of client. The issue poses a trilemma for its resolution
requires the delicate balancing of three opposing policy considerations. One overriding
policy consideration is the need for courts to discover the truth for truth alone is the true
touchstone of justice.  Equally compelling is the need to protect the adversary system of
2

justice where truth is best extracted by giving a client broad privilege to confide facts to
his counsel.  Similarly deserving of sedulous concern is the need to keep inviolate the
3

constitutional right against self-incrimination and the right to effective counsel in criminal
litigations. To bridle at center the centrifugal forces of these policy considerations, courts
have followed to prudential principle that the attorney-client privilege must not be
expansively construed as it is in derogation of the search for truth.  Accordingly, a narrow
4
construction has been given to the privilege and it has been consistently held that "these
competing societal interests demand that application of the privilege not exceed that
which is necessary to effect the policy considerations underlying the privilege, i.e., the
privilege must be upheld only in those circumstances for which it was created.'" 5

Prescinding from these premises, our initial task is to define in clear strokes the
substantive content of the attorney-client privilege within the context of the distinct issues
posed by the petition at bar. With due respect, I like to start by stressing the irreducible
principle that the attorney-client privilege can never be used as a shield to commit a
crime or a fraud. Communications to an attorney having for their object the commission
of a crime ". . . partake the nature of a conspiracy, and it is not only lawful to divulge such
communications, but under certain circumstances it might become the duty of the
attorney to do so. The interests of public justice require that no such shield from merited
exposure shall be interposed to protect a person who takes counsel how he can safely
commit a crime. The relation of attorney and client cannot exist for the purpose of
counsel in concocting crimes."  In the well chosen words of retired Justice Quiason, a
6

lawyer is not a gun for hire.  I hasten to add, however, that a mere allegation that a
7

lawyer conspired with his client to commit a crime or a fraud will not defeat the
privilege.  As early as 1933, no less than the Mr. Justice Cardozo held in Clark v. United
8

States  that: "there are early cases apparently to the effect that a mere charge of
9

illegality, not supported by any evidence, will set the confidences free . . . But this
conception of the privilege is without support . . . To drive the privilege away, there must
be 'something to give colour to the charge;' there must be prima facie evidence that it
has foundation in fact." In the petition at bar, however, the PCGG appears to have
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. The PCGG has
agreed to exclude petitioners from the Complaint provided they reveal the identity of their
client. In fine, PCGG has conceded that petitioner are entitled to invoke the attorney-
client privilege if they reveal their client's identity.

Assuming then that petitioners can invoke the attorney-client privilege since the PCGG is
no longer proceeding against them as co-conspirators in crimes, we should focus on the
more specific issue of whether the attorney-client privilege includes the right not to
divulge the identity of a client as contended by the petitioners. As a general rule, the
attorney-client privilege does not include the right of non-disclosure of client identity. The
general rule, however, admits of well-etched exceptions which the Sandiganbayan failed
to recognize. The general rule and its exceptions are accurately summarized in In re
Grand Jury Investigation,  viz:
10

The federal forum is unanimously in accord with the general rule that the identity of a
client is, with limited exceptions, not within the protective ambit of the attorney-client
privilege. See: In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1027 (5th Cir.
1982) (en banc); In re Grand Jury Proceedings (Jones), 517 F. 2d 666, 670-71 (5th Cir.
1975); In re Grand Jury Proceedings (Fine), 651 F. 2d 199, 204 (5th Cir. 1981); Frank
v. Tomlinson, 351 F.2d 384 (5th Cir. 1965), cert. denied, 382 U.S. 1082, 86 S.Ct. 648, 15
L.Ed.2d 540 (1966); In re Grand Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982);
In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979).

The Circuits have embraced various "exceptions" to the general rule that the identity of a
client is not within the protective ambit of the attorney-client privilege. All such exceptions
appear to be firmly grounded in the Ninth Circuit's seminal decision in Baird v. Koerner,
279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from an attorney stating
that an enclosed check in the amount of $12,706 was being tendered for additional
amounts due from undisclosed taxpayers. When the IRS summoned the attorney to
ascertain the identity of the delinquent taxpayers the attorney refused identification
assertion the attorney-client privilege. The Ninth Circuit, applying California law, adjudged
that the "exception" to the general rule as pronounced in Ex parte McDonough, 170 Cal.
230, 149 P. 566 (1915) controlled:

The name of the client will be considered privileged matter where the circumstances of
the case are such that the name of the client is material only for the purpose of showing
an acknowledgment of guilt on the part of such client of the very offenses on account of
which the attorney was employed.

Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer was adjudged within this
exception to the general rule. The Ninth Circuit has continued to acknowledge this
exception.

A significant exception to this principle of non-confidentiality holds that such information

may be privileged when the person invoking the privilege is able to show that a strong
possibility exists that disclosure of the information would implicate the client in the very
matter for which legal advice was sought in the first case.

In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982). Accord: United States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir.
1977); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979); United
States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness
(Salas), 695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be most
succinctly characterized as the "legal advice" exception, has also been recognized by
other circuits. See: In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449 U.S. 994,
101 S. Ct. 531, 66 L.Ed.2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d
17, 19 (3d Cir 1980), cert. denied, 449 U.S.1083, 101 S.Ct. 869-70, 66 L.Ed.2d 808
(1981). Since the legal advice exception is firmly grounded in the policy of protecting
confidential communications, this Court adopts and applies its principles herein. See: In
re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), supra.

It should be observed, however that the legal advice exception may be defeated through
a prima facie showing that the legal representation was secured in furtherance of present
or intended continuing illegality, as where the legal representation itself is part of a larger
conspiracy. See: In re Grand Jury Subpoenas Decus Tecum (Marger/Merenbach), supra,
695 F.2d at 365 n. 1; In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449, U.S.
994, 101 S.Ct. 531, 66 L.Ed. 2d 291 (1980); In re Grand Jury Investigation (Tinari), 631
F.2d 17, 19 (3d Cir 1980); cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed. 2d 808
(1981); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979);
United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). See also: Clark
v. United States, 289 U.S. 1, 15, 53, S.Ct. 465, 469, 77, L.Ed. 993 (1933); In re Grand
Jury Proceedings (Pavlick), 680 F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).

Another exception to the general rule that the identity of a client is not privileged arises
where disclosure of the identity would be tantamount to disclosing an otherwise protected
confidential communication. In Baird, supra, the Ninth Circuit observed:

If the identification of the client conveys information which ordinarily would be conceded
to be part of the usual privileged communication between attorney and client, then the
privilege should extend to such identification in the absence of another factors.

Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the following exception:

To the general rule is an exception, firmly embedded as the rule itself. The privilege may
be recognized where so much of the actual communication has already been disclosed
that identification of the client amounts to disclosure of a confidential communication.
NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United States v. Tratner, 511
F.2d 248, 252 (7th Cir. 1975); Colton v. United States, 306 F.2d 633, 637 (2d Cir. 1962),
cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 1963); Tillotson v. Boughner, 350
F.2d 663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d Cir. 1944).
See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed. 474 (1826). The Seventh
Circuit has added to the Harvey exception the following emphasized caveat:

The privilege may be recognized where so much of the actual communication has
already been disclosed [not necessarily by the attorney, but by independent sources as
well] that identification of the client [or of fees paid] amounts to disclosure of a
confidential communication.

United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976 (emphasis added). The
Third Circuit, applying this exception, has emphasized that it is the link between the client
and the communication, rather than the link between the client and the possibility of
potential criminal prosecution, which serves to bring the client's identity within the
protective ambit of the attorney-client privilege. See: In re Grand Jury Empanelled
February 14, 1978 (Markowitz), 603 F.2d 469, 473 n. 4 (3d Cir. 1979). Like the "legal
advice" exception, this exception is also firmly rooted in principles of confidentiality.

Another exception, articulated in the Fifth Circuit's en banc decision of In re Grand Jury

Proceedings (Pavlick), 680 F.2d 1026 (5th Cir. 1982 (en banc), is recognized when
disclosure of the identity of the client would provide the "last link" of evidence:

We have long recognized the general rule that matters involving the payment of fees and
the identity of clients are not generally privileged. In re Grand Jury Proceedings, (United
States v. Jones), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n. 2. There
we also recognized, however, a limited and narrow exception to the general rule, one that
obtains when the disclosure of the client's identity by his attorney would have supplied
the last link in an existing chain of incriminating evidence likely to lead to the client's
indictment.

I join the majority in holding that the Sandiganbayan committed grave abuse of discretion
when it misdelineated the metes and bounds of the attorney-client privilege by failing to
recognize the exceptions discussed above.

Be that as it may, I part ways with the majority when it ruled that petitioners need not
prove they fall within the exceptions to the general rule. I respectfully submit that the
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.  The person claiming the privilege or its exceptions has the obligation to
11

present the underlying facts demonstrating the existence of the privilege.  When these
12

facts can be presented only by revealing the very information sought to be protected by
the privilege, the procedure is for the lawyer to move for an inspection of the evidence in
an in camera hearing.  The hearing can even be in camera and ex-parte. Thus, it has
13

been held that "a well-recognized means for an attorney to demonstrate the existence of
an exception to the general rule, while simultaneously preserving confidentiality of the
identity of his client, is to move the court for an in camera ex-parte hearing.  Without the
14

proofs adduced in these in camera hearings, the Court has no factual basis to determine
whether petitioners fall within any of the exceptions to the general rule.

In the case at bar, it cannot be gainsaid that petitioners have not adduced evidence that
they fall within any of the above mentioned exceptions for as aforestated, the
Sandiganbayan did not recognize the exceptions, hence, the order compelling them to
reveal the identity of their client. In ruling that petitioners need not further establish the
factual basis of their claim that they fall within the exceptions to the general rule, the
majority held:

The circumstances involving the engagement of lawyers in the case at bench therefore
clearly reveal that the instant case falls under at least two exceptions to the general rule.
First, disclosure of the alleged client's name would lead to establish said client's
connection with the very fact in issue of the case, which is privileged information,
because the privilege, as stated earlier, protects the subject matter or the substance
(without which there would be no attorney-client relationship). Furthermore, under the
third main exception, revelation of the client's name would obviously provide the
necessary link for the prosecution to build its case, where none otherwise exists. It is the
link, in the word of Baird, "that would inevitably form the chain of testimony necessary to
convict the (client) of a . . . crime.

I respectfully submit that the first and third exceptions relied upon by the majority are not
self-executory but need factual basis for their successful invocation. The first exception
as cited by the majority is ". . . where a strong probability exists that revealing the clients'
name would implicate that client in the very activity for which he sought the lawyer's
advice." It seems to me evident that "the very activity for which he sought the lawyer's
advice" is a question of fact which must first be established before there can be any
ruling that the exception can be invoked. The majority cites Ex Parte Enzor,   and
15

U S v. Hodge and Zweig,  but these cases leave no doubt that the "very activity" for
16

which the client sought the advice of counsel was properly proved. In both cases, the
"very activity" of the clients reveal they sought advice on their criminal activities. Thus, in
Enzor, the majority opinion states that the "unidentified client, an election official,
informed his attorney in confidence that he had been offered a bribe to violate election
laws or that he had accepted a bribe to that end."  In Hodge, the "very activity" of the
17

clients deals with illegal importation of drugs. In the case at bar, there is no inkling
whatsoever about the "very activity" for which the clients of petitioners sought their
professional advice as lawyers. There is nothing in the records that petitioners were
consulted on the "criminal activities" of their client. The complaint did allege that
petitioners and their client conspired to commit crimes but allegations are not evidence.

So it is with the third exception which as related by the majority is "where the
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."  Again, the rhetorical questions
18

that answer themselves are: (1) how can we determine that PCGG has "no case" against
petitioners without presentation of evidence? and (2) how can we determine that the
name of the client is the only link without presentation of evidence as to the other links?
The case of Baird vs. Koerner  does not support the "no need for evidence" ruling of the
19

majority. In Baird, as related by the majority itself, "a lawyer was consulted by the
accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken
to place the undisclosed taxpayers in a favorable position in case criminal charges were
brought against them by the US Internal Revenue Service (IRS). It appeared that the
taxpayers' returns of previous years were probably incorrect and the taxes
understated.  Once more, it is clear that the Baird court was informed of the activity of the
20

client for which the lawyer was consulted and the activity involved probable violation of
the tax laws. Thus, the Court held:

The facts of the instant case bring it squarely within that exception to the general rule.
Here money was received by the government, paid by persons who thereby admitted
they had not paid a sufficient amount in income taxes some one or more years in the
past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for
that one year or several years. The voluntary nature of the payment indicates a belief by
the taxpayers that more tax or interest or penalties are due than the sum previously paid,
if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal
guilt is undisclosed. But it may well be the link that could form the chain of testimony
necessary to convict an individual of a federal crime. Certainly the payment and the
feeling of guilt are the reasons the attorney here involved was employed — to advise his
clients what, under the circumstances, should be done.

In fine, the factual basis for the ruling in Baird was properly established by the parties. In
the case at bar, there is no evidence about the subject matter of the consultation made
by petitioners' client. Again, the records do not show that the subject matter is criminal in
character except for the raw allegations in the Complaint. Yet, this is the unstated
predicate of the majority ruling that revealing the identity of the client ". . . would furnish
the only link that would form the chain of testimony necessary to convict an individual of a
crime." The silent implication is unflattering and unfair to petitioners who are marquee
names in the legal profession and unjust to their undisclosed client.

Finally, it ought to be obvious that petitioners' right to claim the attorney-client privilege is
resolutory of the Complaint against them, and hence should be decided ahead and
independently of their claim to equal protection of the law. Pursuant to the rule in legal
hermeneutics that courts should not decide constitutional issues unless unavoidable, I
also respectfully submit that there is no immediate necessity to resolve petitioners' claim
to equal protection of the law at this stage of the proceedings.

IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion.

Separate Opinions

VITUG, J., concurring:

The legal profession, despite all the unrestrained calumny hurled against it, is still the
noblest of professions. It exists upon the thesis that, in an orderly society that is opposed
to all forms of anarchy, it so occupies, as it should, an exalted position in the proper
dispensation of justice. In time, principles have evolved that would help ensure its
effective ministration. The protection of confidentiality of the lawyer-client relationship is
one, and it has since been an accepted firmament in the profession. It allows the lawyer
and the client to institutionalize a unique relationship based on full trust and confidence
essential in a justice system that works on the basis of substantive and procedural due
process. To be sure, the rule is not without its pitfalls, and demands against it may be
strong, but these problems are, in the ultimate analysis, no more than mere tests of vigor
that have made and will make that rule endure.

I see in the case before us, given the attendant circumstances already detailed in
the ponencia, a situation of the Republic attempting to establish a case not on what it
perceives to be the strength of its own evidence but on what it could elicit from a counsel
against his client. I find it unreasonable for the Sandiganbayan to compel petitioners to
breach the trust reposed on them and succumb to a thinly disguised threat of
incrimination.

Accordingly, I join my other colleague who vote for the GRANT of the petition.

DAVIDE, JR., J.: dissenting
The impressive presentation of the case in the ponencia of Mr. Justice Kapunan makes
difficult the espousal of a dissenting view. Nevertheless, I do not hesitate to express that
view because I strongly feel that this Court must confine itself to the key issue in this
special civil action for certiorari, viz., 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. That issue, unfortunately, has been simply
buried under the avalanche of authorities upholding the sanctity of lawyer-client
relationship which appears to me to be prematurely invoked.

From the undisputed facts disclosed by the pleadings and summarized in the ponencia, I
cannot find my way clear to a conclusion that the Sandiganbayan committed grave abuse
of discretion in not acting favorably on the petitioners' prayer in their Comment to the
PCGG's Motion to Admit Third Amended Complaint.

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. The control of the Court comes in only
when the issue of "interest" (§ 2, Rule 3, Rules of Court) as, e.g., whether an
indispensable party has not been joined, or whether there is a misjoinder of parties (§ 7,
8, and 9, Id.), is raised.

In the case below, the PCGG decided to drop or exclude from the complaint original co-
defendant Raul Roco because he had allegedly complied with the condition prescribed
by the PCGG, viz., undertake that he will reveal the identity of the principals for whom he
acted as nominee/stockholder in the companies involved in PCGG Case No. 0033. In
short, there was an agreement or compromise settlement between the PCGG and Roco.
Accordingly, the PCGG submitted a Third Amended Complaint without Roco as a
defendant. No obstacle to such an agreement has been insinuated. 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. There is at all no showing that Civil Case No. 0033 cannot further be
proceeded upon or that any judgment therein cannot be binding without Roco remaining
as a defendant. Accordingly, the admission of the Third Amended Complaint cannot be
validly withheld by the Sandiganbayan.

Are the petitioners, who did not file a formal motion to be excluded but only made the
request to that effect as a rider to their Comment to the Motion to Admit Third Amended
Complaint, entitled to be excluded from the Third Amended Complaint such that denial
thereof would constitute grave abuse of discretion on the Sandiganbayan's part? To me,
the answer is clearly in the negative.

The petitioners seek to be accorded the same benefit granted to or to be similarly treated
as Roco. Reason and logic dictate that they cannot, unless they too would make
themselves like Roco. Otherwise stated, they must first voluntarily adopt for themselves
the factual milieu created by Roco and must bind themselves to perform certain
obligations as Roco. It is precisely for this that in response to the petitioners' comment on
the aforementioned Motion to Admit Third Amended Complaint the PCGG manifested
that it is willing to accord the petitioners the treatment it gave Roco provided they would
do what Roco had done, that is, disclose the identity of their principals/clients and submit
documents substantiating their claimed lawyer-client relationship with the said
principals/clients, as well as copies of deeds of assignments the petitioners executed in
favor of their principals/clients. The petitioners did not do so because they believed that
compliance thereof would breach the sanctity of their fiduciary duty in a lawyer-client
relationship.

It, indeed, appears that Roco has complied with his obligation as a consideration for his
exclusion from the Third Amended Complaint. The Sandiganbayan found that
5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
action against him. This in turn has allowed the PCGG to exercise its power both under
the rules of agency and under Section 5 of E.O. No. 14-1 in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

As a matter of fact, the PCGG presented evidence to substantiate Roco's compliance.

The ponencia itself so stated, thus:

. . . respondent PCGG presented evidence to substantiate compliance by private

respondent Roco of the conditions precedent to warrant the latter's exclusion as party-
defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of
respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by
the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private
respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of Roco,
Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent in behalf
of private respondent Roco originally requesting the reinvestigation and/or re-
examination of evidence by the PCGG it Complaint in PCGG Case No. 33. (Id., 5-6).

These are the pieces of evidence upon which the Sandiganbayan founded its conclusion
that the PCGG was satisfied with Roco's compliance. The petitioners have not assailed
such finding as arbitrary.

The ponencia's observation then that Roco did not refute the petitioners' contention that
he did not comply with his obligation to disclose the identity of his principals is entirely
irrelevant.

In view of their adamantine position, the petitioners did not, therefore, allow themselves
to be like Roco. They cannot claim the same treatment, much less compel the PCGG to
drop them as defendants, for nothing whatsoever. 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 based on the grounds
allowed by law (e.g., those enumerated in § 1, Rule 16, Rules of Court). The rule of
confidentiality under the lawyer-client relationship is not a cause to exclude a party. It is
merely aground for disqualification of a witness (§ 24, Rule 130, Rules of Court) and may
only be invoked at the appropriate time, i.e., when a lawyer is under compulsion to
answer as witness, as when, having taken the witness stand, he is questioned as to such
confidential communicator or advice, or is being otherwise judicially coerced to produce,
through subpoena duces tecum or otherwise, letters or other documents containing the
same privileged matter. But none of the lawyers in this case is being required to testify
about or otherwise reveal "any [confidential] communication made by the client to him, or
his advice given thereon in the course of, or with a view to, professional employment."
What they are being asked to do, in line with their claim that they had done the acts
ascribed to them in pursuance of their professional relation to their clients, is to identify
the latter to the PCGG and the Court; but this, only if they so choose in order to be
dropped from the complaint, such identification being the condition under which the
PCGG has expressed willingness to exclude them from the action. The revelation is
entirely optional, discretionary, on their part. The attorney-client privilege is not therefor
applicable.

Thus, the Sandiganbayan did not commit any abuse of discretion when it denied the
petitioners' prayer for their exclusion as party-defendants because they did not want to
abide with any of the conditions set by the PCGG. There would have been abuse if the
Sandiganbayan granted the prayer because then it would have capriciously, whimsically,
arbitrarily, and oppressively imposed its will on the PCGG.
Again, what the petitioners want is their exclusion from the Third Amended Complaint or
the dismissal of the case insofar as they are concerned because either they are invested
with immunity under the principle of confidentiality in a lawyer-client relationship, or the
claims against them in Civil Case No. 0033 are barred by such principle.

Even if we have to accommodate this issue, I still submit that the lawyer-client privilege
provides the petitioners no refuge. They are sued as principal defendants in Civil Case
No. 0033, a case of the recovery of alleged ill-gotten wealth. Conspiracy is imputed to the
petitioners therein. In short, they are, allegedly, conspirators in the commission of the
acts complained of for being nominees of certain parties.

Their inclusion as defendants in justified under § 15, Article XI of the Constitution —

which provides that the right of the State to recover properties unlawfully acquired by
public officials or employees, from them or from their nominees or transferees, shall not
be barred by prescription, laches or estoppel — and E.O. No. 1 of 28 February 1986,
E.O. No. 2 of 12 March 1986, E.O. No. 14 of 7 May 1986, and the Rules and Regulations
of the PCGG. Furthermore, § 2, Rule 110 of the Rules of Court requires that the
complaint or information should be "against all persons who appear to be responsible for
the offense involved."

Hypothetically admitting the allegations in the complaint in Civil Case No. 0033, I find
myself unable to agree with the majority opinion that the petitioners are immune from suit
or that they have to be excluded as defendants, or that they cannot be compelled to
reveal or disclose the identity of their principals, all because of the sacred lawyer-client
privilege.

This privilege is well put in Rule 130 of the Rules of Court, to wit:

§ 24. Disqualification by reason of privileged communication. — The following persons

cannot testify as to matters learned in confidence in the following cases:

xxx xxx xxx

(b) 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, or
with a view to, professional employment, nor can an attorney's secretary, stenographer,
or clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity.

The majority seeks to expand the scope of the Philippine rule on the lawyer-client
privilege by copious citations of American jurisprudence which includes in the privilege
the identity of the client under the exceptional situations narrated therein. From the
plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of privilege
contested therein arose in grand jury proceedings on different States, which are
preliminary proceedings before the filing of the case in court, and we are not even told
what evidentiary rules apply in the said hearings. In the present case, the privilege is
invoked in the court where it was already filed and presently pends, and we have the
foregoing specific rules above-quoted. Secondly, and more important, 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 in the offenses
charged. The cases cited by the majority evidently do not apply to them.

Hence, I wish to repeat and underscore the fact that the lawyer-client privilege is not a
shield for the commission of a crime or against the prosecution of the lawyer therefor. I
quote, with emphases supplied, from 81 AM JUR 2d, Witnesses, § 393 to 395, pages
356-357:

§ 393. Effect of unlawful purpose.

The existence of an unlawful purpose prevents the attorney-client privilege from

attaching. The attorney-client privilege does not generally exist where the representation
is sought to further criminal or fraudulent conduct either past, present, or future. Thus, a
confidence received by an attorney in order to advance a criminal or fraudulent purpose
is beyond the scope of the privilege.

Observation: The common-law rule that the privilege protecting confidential

communications between attorney and client is lost if the relation is abused by a client
who seeks legal assistance to perpetrate a crime or fraud has been codified.

§ 394. Attorney participation.

The attorney-client privilege cannot be used to protect a client in the perpetration of a

crime in concert with the attorney, even where the attorney is not aware of his client's
purpose. The reason for the rule is that it is not within the professional character of a
lawyer to give advised on the commission of crime. Professional responsibility does not
countenance the use of the attorney-client privilege as a subterfuge, and all conspiracies,
either active or passive, which are calculated to hinder the administration of justice will
vitiate the privilege. In some jurisdictions, however, this exception to the rule of privilege
in confined to such intended acts in violation of the law as are mala in se, as
distinguished from those which are merely mala prohibita.

§ 395. Communication in contemplation of crime.

Communications between attorney and client having to do with the client's contemplated
criminal acts, or in aid or furtherance thereof, are not covered by the cloak of privilege
ordinarily existing in reference to communications between attorney and client. But, the
mere charge of illegality, not supported by evidence, will not defeat the privilege; there
must be at least prima facie evidence that the illegality has some foundation in fact.

Underhill also states:

There are many other cases to the same effect, for the rule is prostitution of the
honorable relation of attorney and client will not be permitted under the guise of privilege,
and every communication made to an attorney by a client for a criminal purpose is a
conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the
attorney under certain circumstances may be bound to disclose at once in the interest of
justice. In accordance with this rule, where a forged will or other false instrument has
come into possession of an attorney through the instrumentality of the accused, with the
hope and expectation that the attorney would take some action in reference thereto, and
the attorney does act, in ignorance of the true character of the instrument, there is no
privilege, inasmuch as full confidence has been withheld. The attorney is then compelled
to produce a forged writing against the client. The fact that the attorney is not cognizant
of the criminal or wrongful purpose, or, knowing it, attempts to dissuade his client, is
immaterial. The attorney's ignorance of his client's intentions deprives the information of
a professional character as full confidence has been withheld. (H.C. Underhill, A Treatise
on the Law of Criminal Case Evidence, vol. 2, Fifth ed. (1956), Sec. 332, pp. 836-837;
emphasis mine).
125 AMERICAN LAW REPORTS ANNOTATED, 516-519, summarizes the rationale of
the rule excepting communications with respect to contemplated criminal or fraudulent
acts, thus:

c. Rationale of rule excepting communications with respect to contemplated criminal or

fraudulent act.

Various reasons have been announced as being the foundation for the holdings that
communications with respect to contemplated criminal or fraudulent acts are not
privileged.

The reason perhaps most frequently advanced is that in such cases there is no
professional employment, properly speaking. Standard F. Ins. Co v. Smithhart (1919)
183 Ky 679, 211 SW. 441, 5 ALR 972; Cummings v. Com. (1927) 221 Ky 301, 298 SW
943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van Alstine (1885)
57 Mich 69, 23 NW 594; Hamil & Co. v. England (1892) 50 Mo App 338; Carney
v. United R. Co. (1920) 205 Mo App 495, 226 SW 308; Matthews v. Hoagland (1891) 48
NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM Dec
287; People ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed
without opinion in (1934) 242 App Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9
Hare 387, 68 Eng Reprint 558; Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint
751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR; Re Postlethwaite (1887) LR
35 Ch Div (Eng) 722.

In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court said: "In order that the
rule may apply, there must be both professional confidence and professional
employment, but if the client has a criminal object in view in his communications with his
solicitor one of these elements must necessarily be absent. The client must either
conspire with his solicitor or deceive him. If his criminal object is avowed, the client does
not consult his adviser professionally, because it cannot be the solicitor's business to
further any criminal object. If the client does not avow his object, he reposes no
confidence, for the state of facts which is the foundation of the supposed confidence
does not exist. The solicitor's advice is obtained by a fraud."

So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW 441, 5 ALR 972, the

court said: "The reason of the principle which holds such communications not to be
privileged is that it is not within the professional character of a lawyer to give advice upon
such subjects, and that it is no part of the profession of an attorney or counselor at law to
be advising persons as to how they may commit crimes or frauds, or how they may
escape the consequences of contemplated crimes and frauds. If the crime or fraud has
already been committed and finished, a client may advise with an attorney in regard to it,
and communicate with him freely, and the communications cannot be divulged as
evidence without the consent of the client, because it is a part of the business and duty of
those engaged in the practice of the profession of law, when employed and relied upon
for that purpose, to give advice to those who have made infractions of the laws; and, to
enable the attorney to properly advise and to properly represent the client in court or
when prosecutions are threatened, it is conducive to the administration of justice that the
client shall be free to communicate to his attorney all the facts within his knowledge, and
that he may be assured that a communication made by him shall not be used to his
prejudice."

The protection which the law affords to communications between attorney and client has
reference to those which are legitimately and properly within the scope of a lawful
employment, and does not extend to communications made in contemplation of a crime,
or perpetration of a fraud. Strong v. Abner (1937) 368 Ky 502, 105 SW (2d) 599.
The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in holding not
privileged communications to an attorney having for their object the communication of a
crime, said: "They then partake of the nature of a conspiracy, or attempted conspiracy,
and it is not only lawful to divulge such communications, but under certain circumstances
it might become the duty of the attorney to do so. The interests of public justice require
that no such shield from merited exposure shall be interposed to protect a person who
takes counsel how he can safely commit a crime. The relation of attorney and client
cannot exist for the purpose of counsel in concocting crimes."

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287, the court was of the
opinion that there could be no such relation as that of attorney and client, either in the
commission of a crime, or in the doing of a wrong by force or fraud to an individual, the
privileged relation of attorney and client existing only for lawful and honest purposes.

If the client consults the attorney at law with reference to the perpetration of a crime, and
they co-operate in effecting it, there is no privilege, inasmuch as it is no part of the
lawyer's duty to aid in crime — he ceases to be counsel and becomes a
criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.

The court cannot permit it to be said that the contriving of a fraud forms part of the
professional business of an attorney or solicitor. Charlton v. Coombes (1863) 4 Giff 372,
66 Eng Reprint 751.

If the client does not frankly and freely reveal his object and intention as well as facts,
there is not professional confidence, and therefore no privilege. Matthews
v. Hoagland (NJ) supra. See to the same effect Carney v. United R. Co. (1920) 205 Mo
App 495, 226 SW 308.

There is no valid claim of privilege in regard to the production of documents passing

between solicitor and client, when the transaction impeached is charged to be based
upon fraud, that is the matter to be investigated, and it is thought better that the alleged
privilege should suffer than that honestly and fair dealing should appear to be violated
with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.

In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in Reg. v. Cox (1884)
LR 14 QB Div (Eng) 172 — CCR), the chief justice said "I believe the law is, and properly
is, that if a party consults an attorney, and obtains advice for what afterwards turns out to
be the commission of a crime or a fraud, that party so consulting the attorney has no
privilege whatever to close the lips of the attorney from stating the truth. Indeed, if any
such privilege should be contended for, or existing, it would work most grievous hardship
on an attorney, who, after he had been consulted upon what subsequently appeared to
be a manifest crime and fraud, would have his lips closed, and might place him in a very
serious position of being suspected to be a party to the fraud, and without his having an
opportunity of exculpating himself . . . There is no privilege in the case which I have
suggested of a party consulting another, a professional man, as to what may afterwards
turn out to be a crime or fraud, and the best mode of accomplishing it."

In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question of privilege as to

communications between attorney and client was not involved, the question directly
involved being the competency of a clerk in a business establishment to testify as to
certain information which he acquired while working in the establishment, the court
strongly approved of a view as stated arguendo for plaintiff, in Annesley
v. Anglesea (1743) 17 How St Tr (Eng) 1229, as follows: "I shall claim leave to consider
whether an attorney may be examined as to any matter which came to his knowledge as
an attorney. If he is employed as an attorney in any unlawful or wicked act, his duty to the
public obliges him to disclose it; no private obligations can dispense with that universal
one which lies on every member of society to discover every design which may be
formed, contrary to the laws of society, to destroy the public welfare. For this reason, I
apprehend that if a secret which is contrary to the public good, such as a design to
commit treason, murder, or perjury, comes to the knowledge of an attorney, even in a
cause where he is concerned, the obligation to the public must dispense with the private
obligation to the client."

The court in McMannus v. State (1858) 2 Head (Tenn) 213, said; "It would be monstrous
to hold that if counsel was asked and obtained in reference to a contemplated crime that
the lips of the attorney would be sealed, when the facts might become important to the
ends of justice in the prosecution of crime. In such a case the relation cannot be taken to
exist. Public policy would forbid it."

And the court in Lanum v. Patterson (1909) 151 Ill App 36, observed that this rule was
not in contravention of sound public policy, but on the contrary, tended to the
maintenance of a higher standard of professional ethics by preventing the relation of
attorney and client from operating as a cloak for fraud.

Communications of a client to an attorney are not privileged if they were a request for
advice as to how to commit a fraud, it being in such a case not only the attorney's
privilege, but his duty, to disclose the facts to the court. Will v. Tornabells & Co. (1907) 3
Porto Rico Fed Rep 125. The court said: "We say this notwithstanding the comments of
opposing counsel as to the indelicacy of his position because of his being now on the
opposite side of the issue that arose as a consequence of the communication he testifies
about, and is interested in the cause to the extent of a large contingent fee, as he
confesses."

The object of prohibiting the disclosure of confidential communications is to protect the

client, and not to make the attorney an accomplice or permit him to aid in the commission
of a crime. People vs. Petersen (1901) 60 App Div 118, NYS 941.

The seal of personal confidence can never be used to cover a transaction which is in
itself a crime. People v. Farmer (1909) 194 NY 251, 87 NE 457.

As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, § 410 and 411, pages
366-368, states:

§ 410. Name or identity of client.

Disclosure of a client's identity is necessary proof of the existence of the attorney-client

relationship and is not privileged information. Thus, the attorney-client privilege is
inapplicable even though the information was communicated confidentially to the attorney
in his professional capacity and, in some cases, in spite of the fact that the attorney may
have been sworn to secrecy, where an inquiry is directed to an attorney as to the name
or identity of his client. This general rule applies in criminal cases, as well as in civil
actions. Where an undisclosed client is a party to an action, the opposing party has a
right to know with whom he is contending or who the real party in interest is, if not the
nominal adversary.

§ 411. Disclosure of identity of client as breach of confidentiality.

The revelation of the identification of a client is not usually considered privileged, except
where so much has been divulged with regard to to legal services rendered or the advice
sought, that to reveal the client's name would be to disclose the whole relationship and
confidential communications. However, even where the subject matter of the attorney-
client relationship has already been revealed, the client's name has been deemed
privileged.

Where disclosure of the identity of a client might harm the client by being used against
him under circumstances where there are no countervailing factors, then the identity is
protected by the attorney-client privilege.

In criminal proceedings, a client's name may be privileged if information already obtained

by the tribunal, combined with the client's identity, might expose him to criminal
prosecution for acts subsequent to, and because of, which he had sought the advice of
his attorney.

Although 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, where the
attorney has surrendered to the authorities physical evidence in his possession by way of
the attorney-client relationship, the state must prove the connection between the piece of
physical evidence and the defendant without in any way relying on the testimony of the
client's attorney who initially received the evidence and, thus, the attorney may not be
called to the stand and asked to disclose the identity of the client. However, an attorney
cannot refuse to reveal the identity of a person who asked him to deliver stolen property
to the police department, whether a bona fide attorney-client relationship exists between
them, inasmuch as the transaction was not a legal service or done in the attorney's
professional capacity.

Distinction: Where an attorney was informed by a male client that his female
acquaintance was possibly involved in [a] his-and-run accident, the identity of the female
did not come within scope of attorney-client privilege although the identity of the male
client was protected. (emphases supplied)

WIGMORE explains why the identity of a client is not within the lawyer-client privilege in
this manner:

§ 2313. Identity of client or purpose of suit. — The identity of the attorney's client or the
name of the real party in interest will seldom be a matter communicated in confidence
because the procedure of litigation ordinarily presupposes a disclosure of these facts.
Furthermore, so far as a client may in fact desire secrecy and may be able to secure
action without appearing as a party to the proceedings, it would be improper to sanction
such a wish. Every litigant is in justice entitled to know the identity of his opponents. He
cannot be obliged to struggle in the dark against unknown forces. He has by anticipation
the right, in later proceedings, if desired, to enforce the legal responsibility of those who
may have maliciously sued or prosecuted him or fraudulently evaded his claim. He has
as much right to ask the attorney "Who fees your fee?" as to ask the witness (966 supra).
"Who maintains you during this trial?" upon the analogy of the principle already examined
(2298 supra), the privilege cannot be used to evade a client's responsibility for the use of
legal process. And if it is necessary for the purpose to make a plain exception to the rule
of confidence, then it must be made. (Wigmore on Evidence, vol. 8, (1961), p. 609;
emphases supplied).

In 114 ALR, 1322, we also find the following statement:

1. Name or identity.

As is indicated in 28 R.C.L. p. 563, it appears that the rule making communications

between attorney and client privileged from disclosure ordinarily does not apply where
the inquiry is confined to the fact of the attorney's employment and the name of the
person employing him, since the privilege presupposes the relationship of client and
attorney, and therefore does not attach to its creation.

At the present stage of the proceedings below, the petitioners have not shown that they
are so situated with respect to their principals as to bring them within any of the
exceptions established by American jurisprudence. There will be full opportunity for them
to establish that fact at the trial where the broader perspectives of the case shall have
been presented and can be better appreciated by the court. The insistence for their
exclusion from the case is understandable, but the reasons for the hasty resolution
desired is naturally suspect.

We do not even have to go beyond our shores for an authority that the lawyer-client
privilege cannot be invoked to prevent the disclosure of a client's identity where the
lawyer and the client are conspirators in the commission of a crime or a fraud. Under our
jurisdiction, lawyers are mandated not to counsel or abet activities aimed at defiance of
the law or at lessening confidence in the legal system (Rule 1.02, Canon 1, Code of
Professional Responsibility) and to employ only fair and honest means to attain the lawful
objectives of his client (Rule 19.01, Canon 19, Id.). And under the Canons of Professional
Ethics, a lawyer must steadfastly bear in mind that his great trust is to be performed
within and not without the bounds of the law (Canon 15, Id.), that he advances the honor
of his profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance with the
strictest principles of moral law (Canon 32, Id.). These canons strip a lawyer of the
lawyer-client privilege whenever he conspires with the client in the commission of a crime
or a fraud.

I then vote to DENY, for want of merit, the instant petition.

Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

This is an important petition for certiorari to annul the resolutions of the

respondent Sandiganbayan denying petitioners' motion to be excluded from the
Complaint for recovery of alleged ill-gotten wealth on the principal ground that as lawyers
they cannot be ordered to reveal the identity of their client.

First, we fast forward the facts. The Presidential Commission on Good Government
(PCGG) filed Civil Case No. 33 before the Sandiganbayan against Eduardo M.
Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as co-defendants are
the petitioners in the cases at bar — lawyers Teodoro Regala, Edgardo J. Angara,
Avelino V. Cruz, Jose Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo
Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer Raul Roco, now
a duly elected senator of the Republic. All co-defendants were then partners of the law
firm, Angara, Abello, Concepcion, Regala and Cruz Law Offices, better known as the
ACCRA Law Firm. The Complaint against Cojuangco, Jr., and the petitioners
alleged, inter alia, viz:

xxx xxx xxx

The wrongs committed by defendants acting singly or collectively and in unlawful concert
with one another, include the misappropriation and theft of public funds, plunder of the
nation's wealth, extortion, blackmail, bribery, embezzlement and other acts of corruption,
betrayal of public trust and brazen abuse of power as more fully described (in the
subsequent paragraphs of the complaint), all at the expense and to the grave and
irreparable damage of Plaintiff and the Filipino people.
Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro
D. Regala, Avelino V. Cruz, Regalio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini
and Raul S. Roco of Angara, Concepcion, Cruz, Regala, and Abello law offices (ACCRA)
plotted, devised, schemed, conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK,
CIC and more than twenty other coconut levy funded corporations, including the
acquisition of the San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly. through insidious means and
machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately fifteen million shares representing
roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This
ranks ACCRA Investments Corporation number 44 among the top 100 biggest
stockholders of UCPB which has approximately 1,400,000 shareholders. On the other
hand, corporate books show the name Edgardo J. Angara as holding approximately
3,744 shares as of 7 June 1984.

In their Answer, petitioners alleged that the legal services offered and made available by
their firm to its clients include: (a) organizing and acquiring business organizations, (b)
acting as incorporators or stockholders thereof, and (c) delivering to clients the
corresponding documents of their equity holdings (i.e., certificates of stock endorsed in
blank or blank deeds of trust or assignment). They claimed that their activities were "in
furtherance of legitimate lawyering."

In the course of the proceedings in the Sandiganbayan, the PCGG filed a Motion to
Admit Third Amended Complaint and the Third Amended Complaint excluding lawyer
Roco as party defendant. Lawyer Roco was excluded on the basis of his promise to
reveal the identity of the principals for whom he acted as nominee/stockholder in the
companies involved in the case.

The Sandiganbayan ordered petitioners to comment on the motion. In their Comment,

petitioners demanded that they be extended the same privilege as their co-defendant
Roco. They prayed for their exclusion from the complaint. PCGG agreed but set the
following conditions: (1) disclosure of the identity of their client; (2) submission of
documents substantiating their lawyer-client relationship; and (3) submission of the
deeds of assignment petitioners executed in favor of their client covering their respective
shareholdings. The same conditions were imposed on lawyer Roco.

Petitioners refused to comply with the PCGG conditions contending that the attorney-
client privilege gives them the right not to reveal the identity of their client. They also
alleged that lawyer Roco was excluded though he did not in fact reveal the identity of his
clients. On March 18, 1992, the Sandiganbayan denied the exclusion of petitioners in
Case No. 33. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for
whom they have acted, i.e., their principal, and that will be their choice. But until they do
identify their clients, considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to the debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have begun to establish the
basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG
as defendants herein.
5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
course against him. This in turn has allowed the PCGG to exercise its power both under
the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of
by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7,
PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not
to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as a party
defendants. In the same vein, they cannot compel the PCGG to be accorded the same
treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers
and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as
accorded to Raul S. Roco is DENIED for lack of merit.

Sandiganbayan later denied petitioners' motions for reconsideration in its resolutions

dated May 21, 1988 and September 3, 1992.

In this petition for certiorari, petitioners contend:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners

ACCRA lawyers who indisputably acted as lawyers in serving as nominee-stockholders,
to the strict application of the law agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering

petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving
of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to
reveal, the identities of the client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities
of the client(s), the disclosure does not constitute a substantial distinction as would make
the classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of

Mr. Roco and violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in 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.
1. Under the peculiar facts of this case, the attorney-client privilege includes the identity
of the client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of
petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that
the dropping of party-defendants by the PCGG must be based on reasonable and just
grounds and with due consideration to the constitutional right of petitioners ACCRA
lawyers to the equal protection of the law.

The petition at bar is atypical of the usual case where the hinge issue involves the
applicability of attorney-client privilege. It ought to be noted that petitioners were included
as defendants in Civil Case No. 33 as conspirators. Together with Mr. Cojuangco, Jr.,
they are charged with having ". . . conspired and confederated with each other in setting
up, through the use of the coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK,
CICI and more than twenty other coconut levy funded corporations, including the
acquisition of San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly." To stress, petitioners are charged with
having conspired in the commission of crimes. 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. Petitioners refused to comply and assailed the condition on the
ground that to reveal the identity of their client will violate the attorney-client privilege.

It is thus necessary to resolve whether the Sandiganbayan committed grave abuse of

discretion when it rejected petitioners' thesis that to reveal the identity of their client
would violate the attorney-client privilege. The attorney-client privilege is the oldest of the
privileges for confidential communications known to the common law.  For the first time in
1

this jurisdiction, we are asked to rule whether the attorney-client privilege includes the
right not to disclose the identity of client. The issue poses a trilemma for its resolution
requires the delicate balancing of three opposing policy considerations. One overriding
policy consideration is the need for courts to discover the truth for truth alone is the true
touchstone of justice.  Equally compelling is the need to protect the adversary system of
2

justice where truth is best extracted by giving a client broad privilege to confide facts to
his counsel.  Similarly deserving of sedulous concern is the need to keep inviolate the
3

constitutional right against self-incrimination and the right to effective counsel in criminal
litigations. To bridle at center the centrifugal forces of these policy considerations, courts
have followed to prudential principle that the attorney-client privilege must not be
expansively construed as it is in derogation of the search for truth.  Accordingly, a narrow
4

construction has been given to the privilege and it has been consistently held that "these
competing societal interests demand that application of the privilege not exceed that
which is necessary to effect the policy considerations underlying the privilege, i.e., the
privilege must be upheld only in those circumstances for which it was created.'" 5

Prescinding from these premises, our initial task is to define in clear strokes the
substantive content of the attorney-client privilege within the context of the distinct issues
posed by the petition at bar. With due respect, I like to start by stressing the irreducible
principle that the attorney-client privilege can never be used as a shield to commit a
crime or a fraud. Communications to an attorney having for their object the commission
of a crime ". . . partake the nature of a conspiracy, and it is not only lawful to divulge such
communications, but under certain circumstances it might become the duty of the
attorney to do so. The interests of public justice require that no such shield from merited
exposure shall be interposed to protect a person who takes counsel how he can safely
commit a crime. The relation of attorney and client cannot exist for the purpose of
counsel in concocting crimes."  In the well chosen words of retired Justice Quiason, a
6

lawyer is not a gun for hire.  I hasten to add, however, that a mere allegation that a
7

lawyer conspired with his client to commit a crime or a fraud will not defeat the
privilege.  As early as 1933, no less than the Mr. Justice Cardozo held in Clark v. United
8

States  that: "there are early cases apparently to the effect that a mere charge of
9

illegality, not supported by any evidence, will set the confidences free . . . But this
conception of the privilege is without support . . . To drive the privilege away, there must
be 'something to give colour to the charge;' there must be prima facie evidence that it
has foundation in fact." In the petition at bar, however, the PCGG appears to have
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. The PCGG has
agreed to exclude petitioners from the Complaint provided they reveal the identity of their
client. In fine, PCGG has conceded that petitioner are entitled to invoke the attorney-
client privilege if they reveal their client's identity.

Assuming then that petitioners can invoke the attorney-client privilege since the PCGG is
no longer proceeding against them as co-conspirators in crimes, we should focus on the
more specific issue of whether the attorney-client privilege includes the right not to
divulge the identity of a client as contended by the petitioners. As a general rule, the
attorney-client privilege does not include the right of non-disclosure of client identity. The
general rule, however, admits of well-etched exceptions which the Sandiganbayan failed
to recognize. The general rule and its exceptions are accurately summarized in In re
Grand Jury Investigation,  viz:
10

The federal forum is unanimously in accord with the general rule that the identity of a
client is, with limited exceptions, not within the protective ambit of the attorney-client
privilege. See: In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1027 (5th Cir.
1982) (en banc); In re Grand Jury Proceedings (Jones), 517 F. 2d 666, 670-71 (5th Cir.
1975); In re Grand Jury Proceedings (Fine), 651 F. 2d 199, 204 (5th Cir. 1981); Frank
v. Tomlinson, 351 F.2d 384 (5th Cir. 1965), cert. denied, 382 U.S. 1082, 86 S.Ct. 648, 15
L.Ed.2d 540 (1966); In re Grand Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982);
In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979).

The Circuits have embraced various "exceptions" to the general rule that the identity of a
client is not within the protective ambit of the attorney-client privilege. All such exceptions
appear to be firmly grounded in the Ninth Circuit's seminal decision in Baird v. Koerner,
279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from an attorney stating
that an enclosed check in the amount of $12,706 was being tendered for additional
amounts due from undisclosed taxpayers. When the IRS summoned the attorney to
ascertain the identity of the delinquent taxpayers the attorney refused identification
assertion the attorney-client privilege. The Ninth Circuit, applying California law, adjudged
that the "exception" to the general rule as pronounced in Ex parte McDonough, 170 Cal.
230, 149 P. 566 (1915) controlled:

The name of the client will be considered privileged matter where the circumstances of
the case are such that the name of the client is material only for the purpose of showing
an acknowledgment of guilt on the part of such client of the very offenses on account of
which the attorney was employed.

Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer was adjudged within this
exception to the general rule. The Ninth Circuit has continued to acknowledge this
exception.
A significant exception to this principle of non-confidentiality holds that such information
may be privileged when the person invoking the privilege is able to show that a strong
possibility exists that disclosure of the information would implicate the client in the very
matter for which legal advice was sought in the first case.

In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982). Accord: United States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir.
1977); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979); United
States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness
(Salas), 695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be most
succinctly characterized as the "legal advice" exception, has also been recognized by
other circuits. See: In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449 U.S. 994,
101 S. Ct. 531, 66 L.Ed.2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d
17, 19 (3d Cir 1980), cert. denied, 449 U.S.1083, 101 S.Ct. 869-70, 66 L.Ed.2d 808
(1981). Since the legal advice exception is firmly grounded in the policy of protecting
confidential communications, this Court adopts and applies its principles herein. See: In
re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), supra.

It should be observed, however that the legal advice exception may be defeated through
a prima facie showing that the legal representation was secured in furtherance of present
or intended continuing illegality, as where the legal representation itself is part of a larger
conspiracy. See: In re Grand Jury Subpoenas Decus Tecum (Marger/Merenbach), supra,
695 F.2d at 365 n. 1; In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449, U.S.
994, 101 S.Ct. 531, 66 L.Ed. 2d 291 (1980); In re Grand Jury Investigation (Tinari), 631
F.2d 17, 19 (3d Cir 1980); cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed. 2d 808
(1981); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979);
United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). See also: Clark
v. United States, 289 U.S. 1, 15, 53, S.Ct. 465, 469, 77, L.Ed. 993 (1933); In re Grand
Jury Proceedings (Pavlick), 680 F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).

Another exception to the general rule that the identity of a client is not privileged arises
where disclosure of the identity would be tantamount to disclosing an otherwise protected
confidential communication. In Baird, supra, the Ninth Circuit observed:

If the identification of the client conveys information which ordinarily would be conceded
to be part of the usual privileged communication between attorney and client, then the
privilege should extend to such identification in the absence of another factors.

Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the following exception:

To the general rule is an exception, firmly embedded as the rule itself. The privilege may
be recognized where so much of the actual communication has already been disclosed
that identification of the client amounts to disclosure of a confidential communication.

NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United States v. Tratner, 511
F.2d 248, 252 (7th Cir. 1975); Colton v. United States, 306 F.2d 633, 637 (2d Cir. 1962),
cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 1963); Tillotson v. Boughner, 350
F.2d 663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d Cir. 1944).
See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed. 474 (1826). The Seventh
Circuit has added to the Harvey exception the following emphasized caveat:

The privilege may be recognized where so much of the actual communication has
already been disclosed [not necessarily by the attorney, but by independent sources as
well] that identification of the client [or of fees paid] amounts to disclosure of a
confidential communication.
United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976 (emphasis added). The
Third Circuit, applying this exception, has emphasized that it is the link between the client
and the communication, rather than the link between the client and the possibility of
potential criminal prosecution, which serves to bring the client's identity within the
protective ambit of the attorney-client privilege. See: In re Grand Jury Empanelled
February 14, 1978 (Markowitz), 603 F.2d 469, 473 n. 4 (3d Cir. 1979). Like the "legal
advice" exception, this exception is also firmly rooted in principles of confidentiality.

Another exception, articulated in the Fifth Circuit's en banc decision of In re Grand Jury

Proceedings (Pavlick), 680 F.2d 1026 (5th Cir. 1982 (en banc), is recognized when
disclosure of the identity of the client would provide the "last link" of evidence:

We have long recognized the general rule that matters involving the payment of fees and
the identity of clients are not generally privileged. In re Grand Jury Proceedings, (United
States v. Jones), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n. 2. There
we also recognized, however, a limited and narrow exception to the general rule, one that
obtains when the disclosure of the client's identity by his attorney would have supplied
the last link in an existing chain of incriminating evidence likely to lead to the client's
indictment.

I join the majority in holding that the Sandiganbayan committed grave abuse of discretion
when it misdelineated the metes and bounds of the attorney-client privilege by failing to
recognize the exceptions discussed above.

Be that as it may, I part ways with the majority when it ruled that petitioners need not
prove they fall within the exceptions to the general rule. I respectfully submit that the
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.  The person claiming the privilege or its exceptions has the obligation to
11

present the underlying facts demonstrating the existence of the privilege.  When these
12

facts can be presented only by revealing the very information sought to be protected by
the privilege, the procedure is for the lawyer to move for an inspection of the evidence in
an in camera hearing.  The hearing can even be in camera and ex-parte. Thus, it has
13

been held that "a well-recognized means for an attorney to demonstrate the existence of
an exception to the general rule, while simultaneously preserving confidentiality of the
identity of his client, is to move the court for an in camera ex-parte hearing.  Without the
14

proofs adduced in these in camera hearings, the Court has no factual basis to determine
whether petitioners fall within any of the exceptions to the general rule.

In the case at bar, it cannot be gainsaid that petitioners have not adduced evidence that
they fall within any of the above mentioned exceptions for as aforestated, the
Sandiganbayan did not recognize the exceptions, hence, the order compelling them to
reveal the identity of their client. In ruling that petitioners need not further establish the
factual basis of their claim that they fall within the exceptions to the general rule, the
majority held:

The circumstances involving the engagement of lawyers in the case at bench therefore
clearly reveal that the instant case falls under at least two exceptions to the general rule.
First, disclosure of the alleged client's name would lead to establish said client's
connection with the very fact in issue of the case, which is privileged information,
because the privilege, as stated earlier, protects the subject matter or the substance
(without which there would be no attorney-client relationship). Furthermore, under the
third main exception, revelation of the client's name would obviously provide the
necessary link for the prosecution to build its case, where none otherwise exists. It is the
link, in the word of Baird, "that would inevitably form the chain of testimony necessary to
convict the (client) of a . . . crime.
I respectfully submit that the first and third exceptions relied upon by the majority are not
self-executory but need factual basis for their successful invocation. The first exception
as cited by the majority is ". . . where a strong probability exists that revealing the clients'
name would implicate that client in the very activity for which he sought the lawyer's
advice." It seems to me evident that "the very activity for which he sought the lawyer's
advice" is a question of fact which must first be established before there can be any
ruling that the exception can be invoked. The majority cites Ex Parte Enzor,   and
15

U S v. Hodge and Zweig,  but these cases leave no doubt that the "very activity" for
16

which the client sought the advice of counsel was properly proved. In both cases, the
"very activity" of the clients reveal they sought advice on their criminal activities. Thus, in
Enzor, the majority opinion states that the "unidentified client, an election official,
informed his attorney in confidence that he had been offered a bribe to violate election
laws or that he had accepted a bribe to that end."  In Hodge, the "very activity" of the
17

clients deals with illegal importation of drugs. In the case at bar, there is no inkling
whatsoever about the "very activity" for which the clients of petitioners sought their
professional advice as lawyers. There is nothing in the records that petitioners were
consulted on the "criminal activities" of their client. The complaint did allege that
petitioners and their client conspired to commit crimes but allegations are not evidence.

So it is with the third exception which as related by the majority is "where the
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."  Again, the rhetorical questions
18

that answer themselves are: (1) how can we determine that PCGG has "no case" against
petitioners without presentation of evidence? and (2) how can we determine that the
name of the client is the only link without presentation of evidence as to the other links?
The case of Baird vs. Koerner  does not support the "no need for evidence" ruling of the
19

majority. In Baird, as related by the majority itself, "a lawyer was consulted by the
accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken
to place the undisclosed taxpayers in a favorable position in case criminal charges were
brought against them by the US Internal Revenue Service (IRS). It appeared that the
taxpayers' returns of previous years were probably incorrect and the taxes
understated.  Once more, it is clear that the Baird court was informed of the activity of the
20

client for which the lawyer was consulted and the activity involved probable violation of
the tax laws. Thus, the Court held:

The facts of the instant case bring it squarely within that exception to the general rule.
Here money was received by the government, paid by persons who thereby admitted
they had not paid a sufficient amount in income taxes some one or more years in the
past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for
that one year or several years. The voluntary nature of the payment indicates a belief by
the taxpayers that more tax or interest or penalties are due than the sum previously paid,
if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal
guilt is undisclosed. But it may well be the link that could form the chain of testimony
necessary to convict an individual of a federal crime. Certainly the payment and the
feeling of guilt are the reasons the attorney here involved was employed — to advise his
clients what, under the circumstances, should be done.

In fine, the factual basis for the ruling in Baird was properly established by the parties. In
the case at bar, there is no evidence about the subject matter of the consultation made
by petitioners' client. Again, the records do not show that the subject matter is criminal in
character except for the raw allegations in the Complaint. Yet, this is the unstated
predicate of the majority ruling that revealing the identity of the client ". . . would furnish
the only link that would form the chain of testimony necessary to convict an individual of a
crime." The silent implication is unflattering and unfair to petitioners who are marquee
names in the legal profession and unjust to their undisclosed client.
Finally, it ought to be obvious that petitioners' right to claim the attorney-client privilege is
resolutory of the Complaint against them, and hence should be decided ahead and
independently of their claim to equal protection of the law. Pursuant to the rule in legal
hermeneutics that courts should not decide constitutional issues unless unavoidable, I
also respectfully submit that there is no immediate necessity to resolve petitioners' claim
to equal protection of the law at this stage of the proceedings.

IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion