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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 162525 September 23, 2008
SEN PCI!IC P"NNERS, PP CONSTRUCTION ND DEVE"OPMENT CORPORTION
#
ND CESR GOCO,
petitioners,
vs.
CIT$ O! URDNET, CE!ERINO %. CP"D, &"DO C. DE" CSTI""O, NOR'ERTO M. DE" PRDO, %ESUS .
ORDONO ND (UI"INO MGUIS,
##
, respondents.
D E C I S I O N
(UISUM'ING, J.)
The instant petition seeks to set aside the Resolutions
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dated April 15, 2003 and ebruar! ", 200" of the #ourt of Appeals
in #A$%.R. &P 'o. ()1(0.
This case ste**ed fro* a #o*plaint
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for annul*ent of contracts +ith pra!er for preli*inar! prohibitor! in,unction and
te*porar! restrainin- order filed b! respondent .aldo #. /el #astillo, in his capacit! as ta0pa!er, a-ainst respondents
#it! of 1rdaneta and #eferino 2. #apalad doin- business under the na*e 223.A 4uilders, and petitioners Asean Pacific
Planners 5APP6 represented b! Ronilo %. %oco and Asean Pacific Planners #onstruction and /evelop*ent #orporation
5APP#/#6 represented b! #esar /. %oco.
/el #astillo alle-ed that then 1rdaneta #it! Ma!or Rodolfo 3. Para!no entered into five contracts for the preli*inar!
desi-n, construction and *ana-e*ent of a four$store! t+in cine*a co**ercial center and hotel involvin- a *assive
e0penditure of public funds a*ountin- to P250 *illion, funded b! a loan fro* the Philippine 'ational 4ank 5P'46. or
*ini*al +ork, the contractor +as alle-edl! paid P75 *illion. /el #astillo also clai*ed that all the contracts are void
because the ob,ect is outside the co**erce of *en. The ob,ect is a piece of land belon-in- to the public do*ain and
+hich re*ains devoted to a public purpose as a public ele*entar! school. Additionall!, he clai*ed that the contracts, fro*
the feasibilit! stud! to *ana-e*ent and lease of the future buildin-, are also void because the! +ere all a+arded solel! to
the %oco fa*il!.
8n their Ans+er,
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APP and APP#/# clai*ed that the contracts are valid. 1rdaneta #it! Ma!or A*adeo R. Pere9, 2r., +ho
filed the cit!:s Ans+er,
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,oined in the defense and asserted that the contracts +ere properl! e0ecuted b! then Ma!or
Para!no +ith prior authorit! fro* the Sangguniang Panlungsod. Ma!or Pere9 also stated that /el #astillo has no le-al
capacit! to sue and that the co*plaint states no cause of action. or respondent #eferino 2. #apalad, Att!. ;scar #.
&aha-un filed an Ans+er
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+ith co*pulsor! counterclai* and *otion to dis*iss on the -round that /el #astillo has no
le-al standin- to sue.
Respondents 'orberto M. /el Prado, 2esus A. ;rdono and A<uilino Ma-uisa beca*e parties to the case +hen the! ,ointl!
filed, also in their capacit! as ta0pa!ers, a #o*plaint$in$8ntervention
)
adoptin- the alle-ations of /el #astillo.
After pre$trial, the =a9aro =a+ ir* entered its appearance as counsel for 1rdaneta #it! and filed an ;*nibus
Motion
(
+ith pra!er to 516 +ithdra+ 1rdaneta #it!:s Ans+er> 526 drop 1rdaneta #it! as defendant and be ,oined as plaintiff>
536 ad*it 1rdaneta #it!:s co*plaint> and 5"6 conduct a ne+ pre$trial. 1rdaneta #it! alle-edl! +anted to rectif! its position
and clai*ed that inade<uate le-al representation caused its inabilit! to file the necessar! pleadin-s in representation of its
interests.
8n its ;rder
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dated &epte*ber 11, 2002, the Re-ional Trial #ourt 5RT#6 of 1rdaneta #it!, Pan-asinan, 4ranch "5,
ad*itted the entr! of appearance of the =a9aro =a+ ir* and -ranted the +ithdra+al of appearance of the #it!
Prosecutor. 8t also -ranted the pra!er to drop the cit! as defendant and ad*itted its co*plaint for consolidation +ith /el
#astillo:s co*plaint, and directed the defendants to ans+er the cit!:s co*plaint.
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8n its ebruar! 1", 2003 ;rder,
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the RT# denied reconsideration of the &epte*ber 11, 2002 ;rder. 8t also -ranted
#apalad:s *otion to e0pun-e all pleadin-s filed b! Att!. &aha-un in his behalf. #apalad +as dropped as defendant, and
his co*plaint filed b! Att!. 2orito #. Peralta +as ad*itted and consolidated +ith the co*plaints of /el #astillo and
1rdaneta #it!. The RT# also directed APP and APP#/# to ans+er #apalad:s co*plaint.
A--rieved, APP and APP#/# filed a petition for certiorari before the #ourt of Appeals. 8n its April 15, 2003 Resolution, the
#ourt of Appeals dis*issed the petition on the follo+in- -rounds@ 516 defective verification and certification of non$foru*
shoppin-, 526 failure of the petitioners to sub*it certified true copies of the RT#:s assailed orders as *ere photocopies
+ere sub*itted, and 536 lack of +ritten e0planation +h! service of the petition to adverse parties +as not personal.
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The
#ourt of Appeals also denied APP and APP#/#:s *otion for reconsideration in its ebruar! ", 200" Resolution.
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Aence, this petition, +hich +e treat as one for revie+ on certiorari under Rule "5, the proper re*ed! to assail the
resolutions of the #ourt of Appeals.
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Petitioners ar-ue that@
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TA3 APP3==AT3 #;1RT PA=PA4=B 3RR3/ A'/ %RAC3=B A41&3/ 8T& 21/8#8A= PR3R;%AT8C3& 4B
&1MMAR8=B /8&M8&&8'% TA3 P3T8T8;' ;' TA3 4A&8& ; PR;#3/1RA= T3#A'8#A=8T83& /3&P8T3
&14&TA'T8A= #;MP=8A'#3 DTA3R3.8TAEF
88.
TA3 TR8A= #;1RT PA=PA4=B 3RR3/ A'/ %RAC3=B A41&3/ 8T& 21/8#8A= PR3R;%AT8C3& 4B #APR8#8;1&=B
5a.6 3ntertainin- the ta0pa!ers: suits of private respondents del #astillo, del Prado, ;rdono and Ma-uisa despite their
clear lack of le-al standin- to file the sa*e.
5b.6 Allo+in- the entr! of appearance of a private la+ fir* to represent the #it! of 1rdaneta despite the clear statutor! and
,urisprudential prohibitions thereto.
5c.6 Allo+in- #eferino 2. #apalad and the #it! of 1rdaneta to s+itch sides, b! per*ittin- the +ithdra+al of their respective
ans+ers and ad*ittin- their co*plaints as +ell as allo+in- the appearance of Att!. 2orito #. Peralta to represent #apalad
althou-h Att!. ;scar #. &aha-un, his counsel of record, had not +ithdra+n fro* the case, in -ross violation of +ell settled
rules and case la+ on the *atter.
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.e first resolve +hether the #ourt of Appeals erred in den!in- reconsideration of its April 15, 2003 Resolution despite
APP and APP#/#:s subse<uent co*pliance.
Petitioners ar-ue that the #ourt of Appeals should not have dis*issed the petition on *ere technicalities since the! have
attached the proper docu*ents in their *otion for reconsideration and substantiall! co*plied +ith the rules.
Respondent 1rdaneta #it! *aintains that the #ourt of Appeals correctl! dis*issed the petition because #esar %oco had
no proof he +as authori9ed to si-n the certification of non$foru* shoppin- in behalf of APP#/#.
8ndeed, #esar %oco had no proof of his authorit! to si-n the verification and certification of non$foru* shoppin- of the
petition for certiorari filed +ith the #ourt of Appeals.
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Thus, the #ourt of Appeals is allo+ed b! the rules the discretion to
dis*iss the petition since onl! individuals vested +ith authorit! b! a valid board resolution *a! si-n the certificate of non$
foru* shoppin- in behalf of a corporation. Proof of said authorit! *ust be attached> other+ise, the petition is sub,ect to
dis*issal.
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Ao+ever, it *ust be pointed out that in several cases,
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this #ourt had considered as substantial co*pliance +ith the
procedural re<uire*ents the sub*ission in the *otion for reconsideration of the authorit! to si-n the verification and
certification, as in this case. The #ourt notes that the attach*ents in the *otion for reconsideration sho+ that on March 5,
2003, the 4oard of /irectors of APP#/# authori9ed #esar %oco to institute the petition before the #ourt of
Appeals.
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;n March 22, 2003, Ronilo %oco doin- business under the na*e APP, also appointed his father, #esar %oco,
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as his attorne!$in$fact to file the petition.
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.hen the petition +as filed on March 2), 2003
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before the #ourt of Appeals,
#esar %oco +as dul! authori9ed to si-n the verification and certification e0cept that the proof of his authorit! +as not
sub*itted to-ether +ith the petition.
&i*ilarl!, petitioners sub*itted in the *otion for reconsideration certified true copies of the assailed RT# orders and +e
*a! also consider the sa*e as substantial co*pliance.
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Petitioners also included in the *otion for reconsideration their
e0planation
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that copies of the petition +ere personall! served on the =a9aro =a+ ir* and *ailed to the RT# and Att!.
Peralta because of distance. The affidavit of service
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supported the e0planation. #onsiderin- the substantial issues
involved, it +as thus error for the appellate court to den! reinstate*ent of the petition.
Aavin- discussed the procedural issues, +e shall no+ proceed to address the substantive issues raised b! petitioners,
rather than re*and this case to the #ourt of Appeals. 8n our vie+, the issue, si*pl! put, is@ /id the RT# err and co**it
-rave abuse of discretion in 5a6 entertainin- the ta0pa!ers: suits> 5b6 allo+in- a private la+ fir* to represent 1rdaneta #it!>
5c6 allo+in- respondents #apalad and 1rdaneta #it! to s+itch fro* bein- defendants to beco*in- co*plainants> and 5d6
allo+in- #apalad:s chan-e of attorne!sG
;n the first point at issue, petitioners ar-ue that a ta0pa!er *a! onl! sue +here the act co*plained of directl! involves
ille-al disburse*ent of public funds derived fro* ta0ation. The alle-ation of respondents /el #astillo, /el Prado, ;rdono
and Ma-uisa that the construction of the pro,ect is funded b! the P'4 loan contradicts the clai* re-ardin- ille-al
disburse*ent since the funds are not directl! derived fro* ta0ation.
Respondents /el #astillo, /el Prado, ;rdono and Ma-uisa counter that their personalit! to sue +as not raised b!
petitioners APP and APP#/# in their Ans+er and that this issue +as not even discussed in the RT#:s assailed orders.
Petitioners: contentions lack *erit. The RT# properl! allo+ed the ta0pa!ers: suits. 8n Public 8nterest #enter, 8nc. v.
Ro0as,
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+e held@
8n the case of ta0pa!ers: suits, the part! suin- as a ta0pa!er *ust prove that he has sufficient interest in preventin- the
ille-al e0penditure of *one! raised b! ta0ation. Thus, ta0pa!ers have been allo+ed to sue +here there is a clai* that
public funds are ille-all! disbursed or that public *one! is bein- deflected to an! i*proper purpose, or that public funds
are +asted throu-h the enforce*ent of an invalid or unconstitutional la+.
0 0 0 0
Petitioners: alle-ations in their A*ended #o*plaint that the loan contracts entered into b! the Republic and 'P# are
serviced or paid throu-h a disburse*ent of public funds are not disputed b! respondents, hence, the! are invested +ith
personalit! to institute the sa*e.
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Aere, the alle-ation of ta0pa!ers /el #astillo, /el Prado, ;rdono and Ma-uisa that P75 *illion of theP250 *illion P'4
loan had alread! been paid for *ini*al +ork is sufficient alle-ation of overpa!*ent, of ille-al disburse*ent, that invests
the* +ith personalit! to sue. Petitioners do not dispute the alle-ation as the! *erel! insist, albeit erroneousl!, that public
funds are not involved. 1nder Article 1753
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of the #ivil #ode, the cit! ac<uired o+nership of the *one! loaned fro* P'4,
*akin- the *one! public fund. The cit! +ill have to pa! the loan b! revenues raised fro* local ta0ation or b! its internal
revenue allot*ent.
8n addition, APP and APP#/#:s lack of ob,ection in their Ans+er on the personalit! to sue of the four co*plainants
constitutes +aiver to raise the ob,ection under &ection 1, Rule 7 of the Rules of #ourt.
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;n the second point, petitioners contend that onl! the #it! Prosecutor can represent 1rdaneta #it! and that la+ and
,urisprudence prohibit the appearance of the =a9aro =a+ ir* as the cit!:s counsel.
The =a9aro =a+ ir*, as the cit!:s counsel, counters that the cit! +as inutile defendin- its cause before the RT# for lack
of needed le-al advice. The cit! has no le-al officer and both #it! Prosecutor and Provincial =e-al ;fficer are bus!.
Practical considerations also dictate that the cit! and Ma!or Pere9 *ust have the sa*e counsel since he faces related
cri*inal cases. #itin- Mancenido v. #ourt of Appeals,
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the la+ fir* states that hirin- private counsel is proper +here ri-id
adherence to the la+ on representation +ould deprive a part! of his ri-ht to redress a valid -rievance.
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.e cannot a-ree +ith the =a9aro =a+ ir*. 8ts appearance as 1rdaneta #it!:s counsel is a-ainst the la+ as it provides
e0pressl! +ho should represent it. The #it! Prosecutor should continue to represent the cit!.
&ection "?15a6
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of the =ocal %overn*ent #ode 5=%#6 of 1771
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*andates the appoint*ent of a cit! le-al officer. 1nder
&ection "?15b65365i6
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of the =%#, the cit! le-al officer is supposed to represent the cit! in all civil actions, as in this case,
and special proceedin-s +herein the cit! or an! of its officials is a part!. 8n Ra*os v. #ourt of Appeals,
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+e cited that
under &ection 17
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of Republic Act 'o. 51?5,
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cit! -overn*ents *a! alread! create the position of cit! le-al officer to
+ho* the function of the cit! fiscal 5no+ prosecutor6 as le-al adviser and officer for civil cases of the cit! shall be
transferred.
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8n the case of 1rdaneta #it!, ho+ever, the position of cit! le-al officer is still vacant, althou-h its
charter
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+as enacted +a! back in 177?.
4ecause of such vacanc!, the #it! Prosecutor:s appearance as counsel of 1rdaneta #it! is proper. The #it! Prosecutor
re*ains as the cit!:s le-al adviser and officer for civil cases, a function that could not !et be transferred to the cit! le-al
officer. 1nder the circu*stances, the RT# should not have allo+ed the entr! of appearance of the =a9aro =a+ ir* vice
the #it! Prosecutor. 'otabl!, the cit!:s Ans+er +as s+orn to before the #it! Prosecutor b! Ma!or Pere9. The #it!
Prosecutor prepared the cit!:s pre$trial brief and represented the cit! in the pre$trial conference. 'o <uestion +as raised
a-ainst the #it! Prosecutor:s actions until the =a9aro =a+ ir* entered its appearance and clai*ed that the cit! lacked
ade<uate le-al representation.
Moreover, the appearance of the =a9aro =a+ ir* as counsel for 1rdaneta #it! is a-ainst the la+. &ection "?15b65365i6 of
the =%# provides +hen a special le-al officer *a! be e*plo!ed, that is, in actions or proceedin-s +here a co*ponent cit!
or *unicipalit! is a part! adverse to the provincial -overn*ent. 4ut this case is not bet+een 1rdaneta #it! and the
Province of Pan-asinan. And +e have consistentl! held that a local -overn*ent unit cannot be represented b! private
counsel
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as onl! public officers *a! act for and in behalf of public entities and public funds should not be spent to hire
private la+!ers.
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Pro bono representation in collaboration +ith the *unicipal attorne! and prosecutor has not even been
allo+ed.
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'either is the la+ fir*:s appearance ,ustified under the instances listed in Mancenido +hen local -overn*ent officials can
be represented b! private counsel, such as +hen a clai* for da*a-es could result in personal liabilit!. 'o such clai*
a-ainst said officials +as *ade in this case. 'ote that before it ,oined the co*plainants, the cit! +as the one sued, not its
officials. That the fir* represents Ma!or Pere9 in cri*inal cases, suits in his personal capacit!,
"0
is of no *o*ent.
;n the third point, petitioners clai* that 1rdaneta #it! is estopped to reverse ad*issions in its Ans+er that the contracts
are valid and, in its pre$trial brief, that the e0ecution of the contracts +as in -ood faith.
.e disa-ree. The court *a! allo+ a*end*ent of pleadin-s.
&ection 5,
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Rule 10 of the Rules of #ourt pertinentl! provides that if evidence is ob,ected to at the trial on the -round that
it is not +ithin the issues raised b! the pleadin-s, the court *a! allo+ the pleadin-s to be a*ended and shall do so +ith
liberalit! if the presentation of the *erits of the action and the ends of substantial ,ustice +ill be subserved thereb!.
;b,ections need not even arise in this case since the Pre$trial ;rder
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dated April 1, 2002 alread! defined as an issue
+hether the contracts are valid. Thus, +hat is needed is presentation of the parties: evidence on the issue. An! evidence
of the cit! for or a-ainst the validit! of the contracts +ill be relevant and ad*issible. 'ote also that under &ection 5, Rule
10, necessar! a*end*ents to pleadin-s *a! be *ade to cause the* to confor* to the evidence.
8n addition, despite 1rdaneta #it!:s ,udicial ad*issions, the trial court is still -iven lee+a! to consider other evidence to be
presented for said ad*issions *a! not necessaril! prevail over docu*entar! evidence,
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e.-., the contracts assailed. A
part!:s testi*on! in open court *a! also override ad*issions in the Ans+er.
""
As re-ards the RT#:s order ad*ittin- #apalad:s co*plaint and droppin- hi* as defendant, +e find the sa*e in order.
#apalad insists that Att!. &aha-un has no authorit! to represent hi*. Att!. &aha-un clai*s other+ise. .e note, ho+ever,
that Att!. &aha-un represents petitioners +ho clai* that the contracts are valid. ;n the other hand, #apalad filed a
co*plaint for annul*ent of the contracts. #ertainl!, Att!. &aha-un cannot represent totall! conflictin- interests. Thus, +e
should e0pun-e all pleadin-s filed b! Att!. &aha-un in behalf of #apalad.
Relatedl!, +e affir* the order of the RT# in allo+in- #apalad:s chan-e of attorne!s, if +e can properl! call it as such,
considerin- #apalad:s clai* that Att!. &aha-un +as never his attorne!.
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4efore +e close, notice is taken of the offensive lan-ua-e used b! Att!s. ;scar #. &aha-un and Antonio 4. 3scalante in
their pleadin-s before us and the #ourt of Appeals. The! unfairl! called the #ourt of Appeals a Hcourt of technicalitiesH
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for
validl! dis*issin- their defectivel! prepared petition. The! also accused the #ourt of Appeals of protectin-, in their vie+,
Han inco*petent ,ud-e.H
")
8n e0plainin- the Hconcededl! stron- lan-ua-e,H Att!. &aha-un further indicted hi*self. Ae said
that the #ourt of Appeals: dis*issal of the case sho+s its Hi*patience and readiness to punish petitioners for a perceived
sli-ht on its di-nit!H and such dis*issal Hs*acks of retaliation and does not au-ur for the cold neutralit! and i*partialit!
de*anded of the appellate court.H
"(
Accordin-l!, +e i*pose upon Att!s. ;scar #. &aha-un and Antonio 4. 3scalante a fine of P2,000
"?
each pa!able to this
#ourt +ithin ten da!s fro* notice and +e re*ind the* that the! should observe and *aintain the respect due to the #ourt
of Appeals and ,udicial officers>
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abstain fro* offensive lan-ua-e before the courts>
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and not attribute to a 2ud-e *otives
not supported b! the record.
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&i*ilar acts in the future +ill be dealt +ith *ore severel!.
&*ERE!ORE, +e 516 %RA'T the petition> 526 SET SIDE the Resolutions dated April 15, 2003 and ebruar! ", 200" of
the #ourt of Appeals in #A$%.R. &P 'o. ()1(0> 536 DEN$ the entr! of appearance of the =a9aro =a+ ir* in #ivil #ase
'o. 1$(3?? and 3IP1'%3 all pleadin-s it filed as counsel of 1rdaneta #it!> 5"6 ORDER the #it! Prosecutor to represent
1rdaneta #it! in #ivil #ase 'o. 1$(3??> 556!!IRM the RT# in ad*ittin- the co*plaint of #apalad> and 5)6 PR;A848T
Att!. ;scar #. &aha-un fro* representin- #apalad and 3IP1'%3 all pleadin-s that he filed in behalf of #apalad.
=et the records of #ivil #ase 'o. 1$(3?? be re*anded to the trial court for further proceedin-s.
inall!, +e IMPOSE a fine of P2,000 each on Att!s. ;scar #. &aha-un and Antonio 4. 3scalante for their use of offensive
lan-ua-e, pa!able to this #ourt +ithin ten 5106 da!s fro* receipt of this /ecision.
SO ORDERED.
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