The suit is for Certiorari and Prohibition with Preliminary Injunction poised
against the Order of respondent Associate Commissioner of the Securities and
Exchange Commission (SEC), Hon. Sixto T. J. De Guzman, Jr., granting
Assemblyman Estanislao A. Fernandez leave to intervene in a SEC Case.
FACTS:
On 14 May 1979, an election for the eleven Directors of the
International Pipe Industries (IPI), a private corporation, was held – six of
the elected directors were herein petitioners that may be called the Puyat
Group, while the other five were herein respondents, the Acero Group. Thus, the
Puyat Group would be in control of the Board and of the management of IPI.
On 25 May 1979, the Acero Group instituted at the SEC quo warranto
proceedings questioning the election.
Conferences were held on 25-31 May 1979 and the Puyat Group objected on
Constitutional grounds the appearance of Justice Estanislao Fernandez, then a
member of the Interim Batasang Pambansa, as counsel for the Acero group. Section
11, Article VIII, 1973 Constitution, then in force, provided that no
Assemblyman could "appear as counsel before xxx any administrative
body" and SEC was an administrative body. The prohibition being clear,
Assemblyman Fernandez did not continue his appearance.
When SEC Case was called on 31 May 1979, it turned out that Assemblyman
Fernandez had purchased on 15 May 1979 ten shares of IPI stock for Php200.00,
but the deed of sale was notarized only on 30 May 1979. He then filed on 31 May
1979 an Urgent Motion for Intervention in the SEC Case as the owner of 10 IPI
shares alleging legal interest in the matter in litigation, which motion was
granted by the SEC Commissioner.
ISSUE:
Whether or not Assemblyman Fernandez, in intervening in the SEC Case, is
in effect appearing as counsel, albeit indirectly, before an administrative body in contravention of the Constitutional
provision.
RULING:
The Court en banc ruled that ordinarily, by virtue of the Motion for
Intervention, Assemblyman Fernandez cannot be said to be appearing as counsel.
His appearance could theoretically be for the protection of his ownership of
ten (10) IPI shares.
However, certain salient circumstances militate against the intervention
of Assemblyman Fernandez. He had acquired a mere Php200.00 worth of stock in
IPI. He acquired them "after the fact", that is, on 30 May 1979,
after the contested election of Directors, after the quo warranto suit had been
filed, and one day before the scheduled hearing of the case before the SEC. And
what is more, before he moved to intervene, he had signified his intention to
appear as counsel for the Acero group, but which was objected to by petitioners
Puyat group. Realizing, perhaps, the validity of the objection, he decided,
instead, to "intervene" on the ground of legal interest in the matter
under litigation.
Under those facts and circumstances, there has been an indirect
appearance as counsel before an administrative body, which is a circumvention
of the Constitutional prohibition. The "intervention" was an
afterthought to enable him to appear actively in the proceedings in some other
capacity.
A ruling upholding the "intervention" would make the
constitutional provision ineffective. All an Assemblyman need do, if he wants
to influence an administrative body is to acquire a minimal participation in
the "interest" of the client and then "intervene" in the
proceedings. That which the
Constitution directly prohibits may not be done by indirection or by a
general legislative act which is intended to accomplish the objects
specifically or impliedly prohibited.
Thus, the intervention of Assemblyman Fernandez in the SEC Case falls
within the ambit of the prohibition contained in the 1973 Constitution. Respondent
Commissioner's Order granting Assemblyman Fernandez leave to intervene in the SEC
Case was reversed and set aside.
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