Monsod VS Cayetano

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 100113 September 3, 1991 RENATO CAYETANO, petitioner, vs. CHRISTIAN MONSOD, HON. JOVITO R. SALONGA, COMMISSION ON APPOINTMENT, and HON. GUILLERMO CARAGUE, in his capacity as Secretary of Budget and Management, respondents. Renato L. Cayetano for and in his own behalf. Sabina E. Acut, Jr. and Mylene Garcia-Albano co-counsel for petitioner. PARAS, J.:p We are faced here with a controversy of far-reaching proportions. While o
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  Republic of the Philippines SUPREME COURT ManilaSECOND DIVISION G.R. No. 100113 September 3, 1991RENATO CAYETANO, petitioner,vs. CHRISTIAN MONSOD, HON. JOVITO R. SALONGA, COMMISSION ON APPOINTMENT, and HON. GUILLERMO CARAGUE, in his capacityas Secretary of Budget and Management, respondents . Renato L. Cayetano for and in his own behalf.Sabina E. Acut, Jr. and Mylene Garcia-Albano co-counsel for petitioner. PARAS, J.:p We are faced here with a controversy of far-reaching proportions. While ostensibly only legal issues are involved, the Court's decision in this casewould indubitably have a profound effect on the political aspect of our national existence.The 1987 Constitution provides in Section 1 (1), Article IX-C:There shall be a Commission on Elections composed of a Chairman and six Commissioners who shall be natural-born citizensof the Philippines and, at the time of their appointment, at least thirty-five years of age, holders of a college degree, and mustnot have been candidates for any elective position in the immediately preceding -elections. However, a majority thereof,including the Chairman, shall be members of the Philippine Bar who have been engaged in the practice of law for at least tenyears. (Emphasis supplied)The aforequoted provision is patterned after Section l(l), Article XII-C of the 1973 Constitution which similarly provides:There shall be an independent Commission on Elections composed of a Chairman and eight Commissioners who shall be natural-born citizens of the Philippines and, at the time of their appointment, at least thirty-five years of age and holders of a college degree. However, a majority thereof,including the Chairman, shall be members of the Philippine Bar  who have been engaged in the practice of law for at least ten years. ' (Emphasissupplied)Regrettably, however, there seems to be no jurisprudence as to what constitutes practice of law as a legal qualification to an appointive office.Black defines practice of law as:The rendition of services requiring the knowledge and the application of legal principles and technique to serve the interest of another with his consent. It is not limited to appearing in court, or advising and assisting in the conduct of litigation, butembraces the preparation of pleadings, and other papers incident to actions and special proceedings, conveyancing, thepreparation of legal instruments of all kinds, and the giving of all legal advice to clients. It embraces all advice to clients and allactions taken for them in matters connected with the law. An attorney engages in the practice of law by maintaining an officewhere he is held out to be-an attorney, using a letterhead describing himself as an attorney, counseling clients in legal matters,negotiating with opposing counsel about pending litigation, and fixing and collecting fees for services rendered by hisassociate. ( Black's Law Dictionary  , 3rd ed.)The practice of law is not limited to the conduct of cases in court. ( Land Title Abstract and Trust Co. v. Dworken, 129 Ohio St. 23, 193 N.E. 650) Aperson is also considered to be in the practice of law when he:... for valuable consideration engages in the business of advising person, firms, associations or corporations as to their rightsunder the law, or appears in a representative capacity as an advocate in proceedings pending or prospective, before anycourt, commissioner, referee, board, body, committee, or commission constituted by law or authorized to settle controversiesand there, in such representative capacity performs any act or acts for the purpose of obtaining or defending the rights of their clients under the law. Otherwise stated, one who, in a representative capacity, engages in the business of advising clients asto their rights under the law, or while so engaged performs any act or acts either in court or outside of court for that purpose, isengaged in the practice of law. ( State ex. rel. Mckittrick v..C.S. Dudley and Co., 102 S.W. 2d 895, 340 Mo. 852)This Court in the case of  Philippine Lawyers Association v.Agrava, (105 Phil. 173,176-177) stated: The practice of law  is not limited to the conduct of cases or  litigation in court  ; it embraces the preparation of pleadings andother papers incident to actions and special proceedings, the management of such actions and proceedings on behalf of   clients before judges and courts, and in addition, conveying. In general, all advice to clients , and all action taken for them inmatters connected with the law  incorporation services, assessment and condemnation services contemplating an appearancebefore a judicial body, the foreclosure of a mortgage, enforcement of a creditor's claim in bankruptcy and insolvencyproceedings, and conducting proceedings in attachment, and in matters of estate and guardianship have been held toconstitute law practice, as do the preparation and drafting of legal instruments, where the work done involves thedetermination by the trained legal mind of the legal effect of facts and conditions . (5 Am. Jr. p. 262, 263). (Emphasis supplied) Practice of law  under modem conditions consists in no small part of work performed outside of any court and having noimmediate relation to proceedings in court. It embraces conveyancing, the giving of legal advice on a large variety of subjects,and the preparation and execution of legal instruments covering an extensive field of business and trust relations and other affairs.  Although these transactions may have no direct connection with court proceedings, they are always subject to becomeinvolved in litigation . They require in many aspects a high degree of legal skill, a wide experience with men and affairs, andgreat capacity for adaptation to difficult and complex situations. These customary functions of an attorney or counselor at lawbear an intimate relation to the administration of justice by the courts. No valid distinction, so far as concerns the question setforth in the order, can be drawn between that part of the work of the lawyer which involves appearance in court and that partwhich involves advice and drafting of instruments in his office. It is of importance to the welfare of the public that thesemanifold customary functions be performed by persons possessed of adequate learning and skill, of sound moral character,and acting at all times under the heavy trust obligations to clients which rests upon all attorneys. (Moran, Comments on theRules of Court  , Vol. 3 [1953 ed.] , p. 665-666, citing In re Opinion of the Justices [Mass.], 194 N.E. 313, quoted in Rhode Is.Bar Assoc. v. Automobile Service Assoc  . [R.I.] 179 A. 139,144). (Emphasis ours)The University of the Philippines Law Center in conducting orientation briefing for new lawyers (1974-1975) listed the dimensions of the practice of law in even broader terms as advocacy, counselling and public service.One may be a practicing attorney in following any line of employment in the profession. If what he does exacts knowledge of the law and is of a kind usual for attorneys engaging in the active practice of their profession, and he follows some one or more lines of employment such as this he is a practicing attorney at law within the meaning of the statute. ( Barr v. Cardell  , 155NW 312)Practice of law means any activity, in or out of court, which requires the application of law, legal procedure, knowledge, training and experience. To engage in the practice of law is to perform those acts which are characteristics of the profession. Generally, to practice law is to give notice or render any kind of service, which device or service requires the use in any degree of legal knowledge or skill. (111 ALR 23)The following records of the 1986 Constitutional Commission show that it has adopted a liberal interpretation of the term practice of law. MR. FOZ. Before we suspend the session, may I make a manifestation which I forgot to do during our review of the provisions on the Commission on Audit. May I be allowed to make a very brief statement?THE PRESIDING OFFICER (Mr. Jamir).The Commissioner will please proceed.MR. FOZ. This has to do with the qualifications of the members of the Commission on Audit. Among others, the qualifications provided for by Section I is that They must be Members of the Philippine Bar  — I am quoting from the provision — who have been engaged in the practice of law for at least tenyears   .To avoid any misunderstanding which would result in excluding members of the Bar who are now employed in the COA or Commission on Audit, we would like to make the clarification that this provision on qualifications regarding members of the Bar does not necessarily refer or involve actual practice of law outside the COA We have to interpret this to mean that as long asthe lawyers who are employed in the COA are using their legal knowledge or legal talent in their respective work within COA,then they are qualified to be considered for appointment as members or commissioners, even chairman, of the Commissionon Audit  .This has been discussed by the Committee on Constitutional Commissions and Agencies and we deem it important to take itup on the floor so that this interpretation may be made available whenever this provision on the qualifications as regardsmembers of the Philippine Bar engaging in the practice of law for at least ten years is taken up.MR. OPLE. Will Commissioner Foz yield to just one question.MR. FOZ. Yes, Mr. Presiding Officer.MR. OPLE. Is he, in effect, saying that service in the COA by a lawyer is equivalent to the requirement of a law practice that is set forth in the Article on the Commission on Audit? MR. FOZ. We must consider the fact that the work of COA, although it is auditing, will necessarily involvelegal work; it will involve legal work. And, therefore, lawyers who are employed in COA now would have  the necessary qualifications in accordance with the Provision on qualifications under our provisions on theCommission on Audit. And, therefore, the answer is yes. MR. OPLE. Yes. So that the construction given to this is that this is equivalent to the practice of law.MR. FOZ. Yes, Mr. Presiding Officer  .MR. OPLE. Thank you .... ( Emphasis supplied)Section 1(1), Article IX-D of the 1987 Constitution, provides, among others, that the Chairman and two Commissioners of the Commission on Audit(COA) should either be certified public accountants with not less than ten years of auditing practice, or members of the Philippine Bar who havebeen engaged in the  practice of law  for at least ten years. (emphasis supplied)Corollary to this is the term private practitioner and which is in many ways synonymous with the word lawyer. Today, although many lawyers donot engage in private practice, it is still a fact that the majority of lawyers are private practitioners. (Gary Munneke, Opportunities in Law Careers [VGM Career Horizons: Illinois], [1986], p. 15). At this point, it might be helpful to define  private practice . The term, as commonly understood, means an individual or organization engaged in thebusiness of delivering legal services. ( Ibid  .). Lawyers who practice alone are often called sole practitioners. Groups of lawyers are called firms. The firm is usually a partnership and members of the firm are the partners. Some firms may be organized as professional corporations and themembers called shareholders. In either case, the members of the firm are the experienced attorneys. In most firms, there are younger or moreinexperienced salaried attorneyscalled associates. ( Ibid. ).The test that defines law practice by looking to traditional areas of law practice is essentially tautologous, unhelpful defining the practice of law asthat which lawyers do. (Charles W. Wolfram, Modern Legal Ethics [West Publishing Co.: Minnesota, 1986], p. 593). The practice of law is definedas the performance of any acts . . . in or out of court, commonly understood to be the practice of law. ( State Bar Ass'n v. Connecticut Bank & Trust Co ., 145 Conn. 222, 140 A.2d 863, 870 [1958] [quoting Grievance Comm. v. Payne , 128 Conn. 325, 22 A.2d 623, 626 [1941]). Because lawyersperform almost every function known in the commercial and governmental realm, such a definition would obviously be too global to be workable.(Wolfram, op. cit. ).The appearance of a lawyer in litigation in behalf of a client is at once the most publicly familiar role for lawyers as well as an uncommon role for theaverage lawyer. Most lawyers spend little time in courtrooms, and a large percentage spend their entire practice without litigating a case. ( Ibid  ., p.593). Nonetheless, many lawyers do continue to litigate and the litigating lawyer's role colors much of both the public image and the self perceptionof the legal profession. ( Ibid  .).In this regard thus, the dominance of litigation in the public mind reflects history, not reality. ( Ibid  .). Why is this so? Recall that the late Alexander SyCip, a corporate lawyer, once articulated on the importance of a lawyer as a business counselor in this wise: Even today, there are stilluninformed laymen whose concept of an attorney is one who principally tries cases before the courts. The members of the bench and bar and theinformed laymen such as businessmen, know that in most developed societies today, substantially more legal work is transacted in law offices thanin the courtrooms. General practitioners of law who do both litigation and non-litigation work also know that in most cases they find themselvesspending more time doing what [is] loosely desccribe[d] as business counseling than in trying cases. The business lawyer has been described asthe planner, the diagnostician and the trial lawyer, the surgeon. I[t] need not [be] stress[ed] that in law, as in medicine, surgery should be avoidedwhere internal medicine can be effective. ( Business Star  , Corporate Finance Law, Jan. 11, 1989, p. 4).In the course of a working day the average general practitioner wig engage in a number of legal tasks, each involving different legal doctrines, legalskills, legal processes, legal institutions, clients, and other interested parties. Even the increasing numbers of lawyers in specialized practice wigusually perform at least some legal services outside their specialty. And even within a narrow specialty such as tax practice, a lawyer will shift fromone legal task or role such as advice-giving to an importantly different one such as representing a client before an administrative agency.(Wolfram, supra , p. 687).By no means will most of this work involve litigation, unless the lawyer is one of the relatively rare types — a litigator who specializes in this work tothe exclusion of much else. Instead, the work will require the lawyer to have mastered the full range of traditional lawyer skills of client counselling,advice-giving, document drafting, and negotiation. And increasingly lawyers find that the new skills of evaluation and mediation are both effectivefor many clients and a source of employment. ( Ibid  .).Most lawyers will engage in non-litigation legal work or in litigation work that is constrained in very important ways, at least theoretically, so as toremove from it some of the salient features of adversarial litigation. Of these special roles, the most prominent is that of prosecutor. In somelawyers' work the constraints are imposed both by the nature of the client and by the way in which the lawyer is organized into a social unit toperform that work. The most common of these roles are those of corporate practice and government legal service. ( Ibid  .).In several issues of the Business Star  , a business daily, herein below quoted are emerging trends in corporate law practice, a departure from thetraditional concept of practice of law.  We are experiencing today what truly may be called a revolutionary transformation in corporate law practice. Lawyers andother professional groups, in particular those members participating in various legal-policy decisional contexts, are finding thatunderstanding the major emerging trends in corporation law is indispensable to intelligent decision-making.Constructive adjustment to major corporate problems of today requires an accurate understanding of the nature andimplications of the corporate law research function accompanied by an accelerating rate of information accumulation. Therecognition of the need for such improved corporate legal policy formulation, particularly model-making and contingencyplanning, has impressed upon us the inadequacy of traditional procedures in many decisional contexts.In a complex legal problem the mass of information to be processed, the sorting and weighing of significant conditional factors,the appraisal of major trends, the necessity of estimating the consequences of given courses of action, and the need for fastdecision and response in situations of acute danger have prompted the use of sophisticated concepts of information flowtheory, operational analysis, automatic data processing, and electronic computing equipment. Understandably, an improveddecisional structure must stress the predictive component of the policy-making process, wherein a model , of the decisionalcontext or a segment thereof is developed to test projected alternative courses of action in terms of futuristic effects flowingtherefrom. Although members of the legal profession are regularly engaged in predicting and projecting the trends of the law, the subjectof corporate finance law has received relatively little organized and formalized attention in the philosophy of advancingcorporate legal education. Nonetheless, a cross-disciplinary approach to legal research has become a vital necessity.Certainly, the general orientation for productive contributions by those trained primarily in the law can be improved through anearly introduction to multi-variable decisional context and the various approaches for handling such problems. Lawyers,particularly with either a master's or doctorate degree in business administration or management, functioning at the legal policylevel of decision-making now have some appreciation for the concepts and analytical techniques of other professions whichare currently engaged in similar types of complex decision-making.Truth to tell, many situations involving corporate finance problems would require the services of an astute attorney because of the complex legal implications that arise from each and every necessary step in securing and maintaining the business issueraised. ( Business Star  , Corporate Finance Law, Jan. 11, 1989, p. 4).In our litigation-prone country, a corporate lawyer is assiduously referred to as the abogado de campanilla. He is the big-time lawyer, earning big money and with a clientele composed of the tycoons and magnates of business and industry.Despite the growing number of corporate lawyers, many people could not explain what it is that a corporate lawyer does. For one, the number of attorneys employed by a single corporation will vary with the size and type of the corporation. Manysmaller and some large corporations farm out all their legal problems to private law firms. Many others have in-house counselonly for certain matters. Other corporation have a staff large enough to handle most legal problems in-house. A corporate lawyer, for all intents and purposes, is a lawyer who handles the legal affairs of a corporation. His areas of concern or jurisdiction may include, inter alia : corporate legal research, tax laws research, acting out as corporate secretary (inboard meetings), appearances in both courts and other adjudicatory agencies (including the Securities and ExchangeCommission), and in other capacities which require an ability to deal with the law. At any rate, a corporate lawyer may assume responsibilities other than the legal affairs of the business of the corporation he isrepresenting. These include such matters as determining policy and becoming involved in management  . ( Emphasis supplied.)In a big company, for example, one may have a feeling of being isolated from the action, or not understanding how one's workactually fits into the work of the orgarnization. This can be frustrating to someone who needs to see the results of his work firsthand. In short, a corporate lawyer is sometimes offered this fortune to be more closely involved in the running of the business.Moreover, a corporate lawyer's services may sometimes be engaged by a multinational corporation (MNC). Some large MNCsprovide one of the few opportunities available to corporate lawyers to enter the international law field. After all, internationallaw is practiced in a relatively small number of companies and law firms. Because working in a foreign country is perceived bymany as glamorous, tills is an area coveted by corporate lawyers. In most cases, however, the overseas jobs go toexperienced attorneys while the younger attorneys do their international practice in law libraries. ( Business Star  , CorporateLaw Practice, May 25,1990, p. 4).This brings us to the inevitable, i.e., the role of the lawyer in the realm of finance. To borrow the lines of Harvard-educatedlawyer Bruce Wassertein, to wit: A bad lawyer is one who fails to spot problems, a good lawyer is one who perceives thedifficulties, and the excellent lawyer is one who surmounts them. ( Business Star  , Corporate Finance Law, Jan. 11, 1989, p.4).Today, the study of corporate law practice direly needs a shot in the arm, so to speak. No longer are we talking of thetraditional law teaching method of confining the subject study to the Corporation Code and the Securities Code but anincursion as well into the intertwining modern management issues.
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