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Republic of the Philippines stockholders of the said corporations involved in sequestration

SUPREME COURT proceedings.
Manila
On August 20, 1991, respondent Presidential Commission on Good
EN BANC Government (hereinafter referred to as respondent PCGG) filed a
"Motion to Admit Third Amended Complaint" and "Third Amended
G.R. No. 105938 September 20, 1996 Complaint" which excluded private respondent Raul S. Roco from the
complaint in PCGG Case No. 33 as party-defendant. Respondent
TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. PCGG based its exclusion of private respondent Roco as party-
CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR defendant on his undertaking that he will reveal the identity of the
P. LAZATIN and EDUARDO U. ESCUETA, petitioners, principal/s for whom he acted as nominee/stockholder in the
vs. companies involved in PCGG Case No. 33.4
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC
OF THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL Respondent Contends
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents. Petitioners were included in the Third Amended Complaint on the
strength of the following allegations:
KAPUNAN, J.:
14. Defendants Eduardo Cojuangco, Jr., Edgardo J.
FACTS Angara, Jose C. Concepcion, Teodoro Regala, Avelino V.
Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G.
Among the defendants named in the case are herein petitioners Hayudini and Raul Roco of the Angara Concepcion Cruz
Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Regala and Abello law offices (ACCRA) plotted, devised,
Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta schemed conspired and confederated with each other in
and Paraja G. Hayudini, and herein private respondent Raul S. Roco, setting up, through the use of the coconut levy funds, the
who all were then partners of the law firm Angara, Abello, financial and corporate framework and structures that
Concepcion, Regala and Cruz Law Offices (hereinafter referred to as led to the establishment of UCPB, UNICOM, COCOLIFE,
the ACCRA Law Firm). A COCOMARK, CIC, and more than twenty other coconut
levy funded corporations, including the acquisition of
As members of the ACCRA Law Firm, petitioners and private San Miguel Corporation shares and its
respondent Raul Roco admit that they assisted in the organization and
institutionalization through presidential directives of the
acquisition of the companies included in Civil Case No. 0033, and in coconut monopoly. Through insidious means and
keeping with the office practice, ACCRA lawyers acted as nominees-
machinations, ACCRA, being the wholly-owned
investment arm, ACCRA Investments Corporation,
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became the holder of approximately fifteen million HELD: NO.

shares representing roughly 3.3% of the total outstanding
capital stock of UCPB as of 31 March 1987. This ranks It is quite apparent that petitioners were impleaded by the PCGG as
ACCRA Investments Corporation number 44 among the co-defendants to force them to disclose the identity of their clients.
top 100 biggest stockholders of UCPB which has Clearly, respondent PCGG is not after petitioners but the "bigger fish"
approximately 1,400,000 shareholders. On the other as they say in street parlance. This ploy is quite clear from the PCGG's
hand, corporate books show the name Edgardo J. Angara willingness to cut a deal with petitioners — the names of their clients
as holding approximately 3,744 shares as of February, in exchange for exclusion from the complaint.
1984.
In a closely related case, Civil Case No. 0110 of the Sandiganbayan,
Petitioner Contends Third Division, entitled "Primavera Farms, Inc., et al. vs. Presidential
Commission on Good Government" respondent PCGG, through
In their answer to the Expanded Amended Complaint, petitioners counsel Mario Ongkiko, manifested at the hearing on December 5,
ACCRA lawyers alleged that their participation in the acts with which 1991 that the PCGG wanted to establish through the ACCRA that their
their codefendants are charged, was in furtherance of legitimate "so called client is Mr. Eduardo Cojuangco;" that "it was Mr. Eduardo
lawyering. Cojuangco who furnished all the monies to those subscription
payments in corporations included in the Third Amended Complaint;
Petitioners ACCRA lawyers subsequently filed their "COMMENT that the ACCRA lawyers executed deeds of trust and deeds of
AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion assignment, some in the name of particular persons; some in blank.
that respondent PCGG similarly grant the same treatment to them
(exclusion as parties-defendants) as accorded private respondent In our jurisdiction, the client-lawyer privilege takes off from the old
Roco. The Counter-Motion for dropping petitioners from the Code of Civil Procedure enacted by the Philippine Commission on
complaint was duly set for hearing on October 18, 1991 in accordance August 7, 1901. Section 383 of the Code specifically "forbids counsel,
with the requirements of Rule 15 of the Rules of Court. without authority of his client to reveal any communication made by
the client to him or his advice given thereon in the course of
Sandiganbayan Ruling professional employment." Passed on into various provisions of the
Rules of Court, the attorney-client privilege, as currently worded
On March 18, 1992, respondent Sandiganbayan promulgated the provides:
Resolution, herein questioned, denying the exclusion of petitioners in
PCGG Case No. 33, for their refusal to comply with the conditions Considerations favoring confidentially in lawyer-client relationships
required by respondent PCGG. are many and serve several constitutional and policy concerns. In the
constitutional sphere, the privilege gives flesh to one of the most
ISSUE: Whether or not a lawyer may be compelled to disclose the sacrosanct rights available to the accused, the right to counsel. If a
identity of its client. client were made to choose between legal representation without
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effective communication and disclosure and legal representation with privilege begins to exist only after the attorney-client relationship has
all his secrets revealed then he might be compelled, in some instances, been established. The attorney-client privilege does not attach until
to either opt to stay away from the judicial system or to lose the right there is a client. Third, the privilege generally pertains to the subject
to counsel. If the price of disclosure is too high, or if it amounts to self matter of the relationship. Finally, due process considerations require
incrimination, then the flow of information would be curtailed thereby that the opposing party should, as a general rule, know his adversary.
rendering the right practically nugatory. The threat this represents "A party suing or sued is entitled to know who his opponent is." He
against another sacrosanct individual right, the right to be presumed cannot be obliged to grope in the dark against unknown forces.
innocent is at once self-evident.
Notwithstanding these considerations, the general rule is however
Encouraging full disclosure to a lawyer by one seeking legal services qualified by some important exceptions.
opens the door to a whole spectrum of legal options which would
otherwise be circumscribed by limited information engendered by a 1) Client identity is privileged where a strong probability exists that
fear of disclosure. An effective lawyer-client relationship is largely revealing the client's name would implicate that client in the very
dependent upon the degree of confidence which exists between lawyer activity for which he sought the lawyer's advice.
and client which in turn requires a situation which encourages a
dynamic and fruitful exchange and flow of information. It necessarily 2) Where disclosure would open the client to civil liability; his identity
follows that in order to attain effective representation, the lawyer must is privileged.
invoke the privilege not as a matter of option but as a matter of duty
and professional responsibility. 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
The question now arises whether or not this duty may be asserted in furnish the only link that would form the chain of testimony necessary
refusing to disclose the name of petitioners' client(s) in the case at bar. to convict an individual of a crime, the client's name is privileged.
Under the facts and circumstances obtaining in the instant case, the
answer must be in the affirmative. Apart from these principal exceptions, there exist other situations
which could qualify as exceptions to the general rule.
As a matter of public policy, a client's identity should not be shrouded
in mystery. Under this premise, the general rule in our jurisdiction as For example, the content of any client communication to a lawyer lies
well as in the United States is that a lawyer may not invoke the within the privilege if it is relevant to the subject matter of the legal
privilege and refuse to divulge the name or identity of this client. problem on which the client seeks legal assistance. Moreover, where
the nature of the attorney-client relationship has been previously
The reasons advanced for the general rule are well established. 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
First, the court has a right to know that the client whose privileged revelation would otherwise result in disclosure of the entire
information is sought to be protected is flesh and blood. Second, the transaction.
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Summarizing these exceptions, information relating to the identity of a aforementioned deeds of assignment covering their client's
client may fall within the ambit of the privilege when the client's name shareholdings.
itself has an independent significance, such that disclosure would then
reveal client confidences. There is no question that the preparation of the aforestated documents
was part and parcel of petitioners' legal service to their clients. More
The circumstances involving the engagement of lawyers in the case at important, it constituted an integral part of their duties as lawyers.
bench, therefore, clearly reveal that the instant case falls under at least Petitioners, therefore, have a legitimate fear that identifying their
two exceptions to the general rule. First, disclosure of the alleged clients would implicate them in the very activity for which legal advice
client's name would lead to establish said client's connection with the had been sought, i.e., the alleged accumulation of ill-gotten wealth in
very fact in issue of the case, which is privileged information, because the aforementioned corporations.
the privilege, as stated earlier, protects the subject matter or the
substance (without which there would be not attorney-client Furthermore, under the third main exception, revelation of the client's
relationship). name would obviously provide the necessary link for the prosecution
to build its case, where none otherwise exists. It is the link, in the
The link between the alleged criminal offense and the legal advice or words of Baird, "that would inevitably form the chain of testimony
legal service sought was duly establishes in the case at bar, by no less necessary to convict the (client) of a . . . crime."
than the PCGG itself. The key lies in the three specific conditions laid
down by the PCGG which constitutes petitioners' ticket to non- An important distinction must be made between a case where a client
prosecution should they accede thereto: 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
(a) the disclosure of the identity of its clients; activities and a case where a client thinks he might have previously
committed something illegal and consults his attorney about it. The
(b) submission of documents substantiating the lawyer- first case clearly does not fall within the privilege because the same
client relationship; and cannot be invoked for purposes illegal. The second case falls within the
exception because whether or not the act for which the client sought
(c) the submission of the deeds of assignment petitioners advice turns out to be illegal, his name cannot be used or disclosed if
executed in favor of their clients covering their respective the disclosure leads to evidence, not yet in the hands of the
shareholdings. prosecution, which might lead to possible action against him.

From these conditions, particularly the third, we can readily deduce These cases may be readily distinguished, because the privilege cannot
that the clients indeed consulted the petitioners, in their capacity as be invoked or used as a shield for an illegal act, as in the first example;
lawyers, regarding the financial and corporate structure, framework while the prosecution may not have a case against the client in the
and set-up of the corporations in question. In turn, petitioners gave second example and cannot use the attorney client relationship to
their professional advice in the form of, among others, the build up a case against the latter. The reason for the first rule is that it
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is not within the professional character of a lawyer to give advice on We find that the condition precedent required by the respondent
the commission of a crime. The reason for the second has been stated PCGG of the petitioners for their exclusion as parties-defendants in
in the cases above discussed and are founded on the same policy PCGG Case No. 33 violates the lawyer-client confidentiality privilege.
grounds for which the attorney-client privilege, in general, exists. The condition also constitutes a transgression by respondents
Sandiganbayan and PCGG of the equal protection clause of the
In fine, the crux of petitioners' objections ultimately hinges on their Constitution. It is grossly unfair to exempt one similarly situated
expectation that if the prosecution has a case against their clients, the litigant from prosecution without allowing the same exemption to the
latter's case should be built upon evidence painstakingly gathered by others. Moreover, the PCGG's demand not only touches upon the
them from their own sources and not from compelled testimony question of the identity of their clients but also on documents related
requiring them to reveal the name of their clients, information which to the suspected transactions, not only in violation of the attorney-
unavoidably reveals much about the nature of the transaction which client privilege but also of the constitutional right against self-
may or may not be illegal. The logical nexus between name and nature incrimination. Whichever way one looks at it, this is a fishing
of transaction is so intimate in this case that it would be difficult to expedition, a free ride at the expense of such rights.
simply dissociate one from the other. In this sense, the name is as
much "communication" as information revealed directly about the WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of
transaction in question itself, a communication which is clearly and respondent Sandiganbayan (First Division) promulgated on March 18,
distinctly privileged. A lawyer cannot reveal such communication 1992 and May 21, 1992 are hereby ANNULLED and SET ASIDE.
without exposing himself to charges of violating a principle which Respondent Sandiganbayan is further ordered to exclude petitioners
forms the bulwark of the entire attorney-client relationship. Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C.
Concepcion, Victor P. Lazatin, Eduardo U. Escueta and Paraja G.
We have no choice but to uphold petitioners' right not to reveal the Hayuduni as parties-defendants in SB Civil Case No. 0033 entitled
identity of their clients under pain of the breach of fiduciary duty "Republic of the Philippines v. Eduardo Cojuangco, Jr., et al."
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 SO ORDERED.
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,

In response to petitioners' last assignment of error, respondents

alleged that the private respondent Rocco 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."
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