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SECOND DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated JUL 13 2005.
G.R. No. 165428 (Land Bank of the Philippines vs. Teresita Panlilio-Luciano.)
Pending action are the following submissions: (1) a Motion for Reconsideration dated 24 May 2005 signed by Attys.
Danilo B. Beramo and Rafael L. Berbaño, who identify themselves as belonging to "Piczon Beramo & Associates, Counsel
for petitioner [Land Bank of the Philippines]" and (2) Manifestation dated 3 June 2005 filed by the Office of the
Government Corporate Counsel (OGCC) in behalf of the Land Bank of the Philippines (LBP).
It may be recalled that in a Resolution[1] dated 27 April 2005, the Court directed the OGCC to enter its appearance in
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behalf of LBP and to manifest whether it was adopting the instant petition filed in behalf of LBP by Attys. Beramo and
Berbaño.[2] The OGCC filed an Entry of Appearance with Motion for Extension of Time to File Manifestation dated 23 May
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2005, which the Court noted in its Resolution dated 6 July 2005.
Both the Motion for Reconsideration and the Manifestation now pending before this Court were filed in response to our
DebtKollect Company, Inc. Resolution dated 27 April 2005. The Motion for Reconsideration reiterates the earlier position of Attys. Beramo and
Berbaño that they, as members of the LBP Legal Department, have the capacity to represent LBP before this Court.
On the other hand, the OGCC states in its Manifestation that it is adopting the petition previously filed by LBP, a position
which the Court duly notes. The OGCC likewise manifests that it has duly authorized the Legal Department of LBP to
handle this case, pursuant to a Letter of Authority, a copy of which was attached to the Manifestation. It is this aspect of
delegation that shall be subject of scrutiny in this Resolution.
Attys. Beramo and Berbaño pray that the Court reconsider the 27 April 2005 Resolution and issue another resolution
declaring that the appearance of the OGCC insofar as cases involving LBP can be dispensed with. After careful study, we
deny the Motion for Reconsideration for lack of merit.
Before we inquire into the principal issue raised in the Motion for Reconsideration on the LBP Legal Department's
authority to represent LBP in this petition, we must first readdress our concerns, already stated in our 27 April 2005
Resolution, over the fact that the LBP Legal Department utilizes the name "Piczon Beramo & Associates." This name
appears again in the present Motion for Reconsideration, despite the fact that we earlier expressed disfavor over the
nomenclature and the obvious implication that LBP is represented by a private law partnership instead of the LBP Legal
Department. We might as well reiterate what we said in our 27 April 2005 Resolution, which should serve as the final
word on the matter:
It is immediately suspicious why the members of the Land Bank legal department would style themselves as "Piczon
Beramo & Associates," thus implying that they are a duly constituted legal partnership whose legal services are available
ChanRobles Intellectual Property Division to clients other than the Land Bank. If indeed Attys. Piczon, Beramo and "their associates" are members of the Legal
Department, it should be understood that they are appointed in their individual capacities. And as members of the Legal
Department, they would be deemed as public officials, salaried by the Land Bank, and in the employ of the government-
owned or controlled corporation with original charter.
On this score, two points are relevant. First, under Section 7(b)(2) of the Code of Conduct and Ethical Standards for
Public Officials and Employees (Rep. Act No. 6713), public officials and employees during their incumbency are barred
from engaging in the private practice of their profession unless authorized by the Constitution or by law. There is no law
authorizing the members of the Legal Department of Land Bank from engaging in private practice, and presumably these
lawyers are precluded from any professional legal practice other than in the service of Land Bank. Thus, it behooves this
Court why these members of the Land Bank Legal Department choose to undertake the appearance of a private law firm
when they are barred from law from engaging in such private practice.
Second, Rule 3.03 of the Code of Professional Responsibility declares that "where a partner accepts public office, he
shall withdraw from the firm and his name shall be dropped from the firm name unless the law allows him to practice
law concurrently." Again, this ethical rule precludes the members of the Land Bank Legal Department from establishing a
private law firm or being designated a "named partner" in such a firm. Thus, the impropriety of Attys. Piczon, Beramo and
Berbaño representing themselves as "Piczon Beramo and Associates" becomes even more glaring, considering that by
their own admission, these three lawyers belong to the Legal Department of Land Bank.[3] cralaw
At present, Attys. Beramo and Berbaño insist that the lawyers of the LBP Legal Department exclusively work for the LBP,
and that "Piczon Beramo & Associates" "merely describes the collective legal force of the Legal Department handling
agrarian cases" for LBP. Again, wariness is aroused by the use of the descriptive phrase "collective legal force of the
Legal Department," considering that the movants could have simply said that the "name merely describes the Legal
Department" of the LBP. We would like to believe, as Attys. Beramo and Berbaño aver, that these lawyers who collectively
describe themselves as "Piczon Beramo and Associates" work exclusively for the LBP as members of its legal
department, but these LBP Legal Department lawyers foster contrary misgivings by the very use of the questioned
nomenclature itself.
UNITED STATES SUPREME COURT JURISPRUDENCE
Unbelievably, Attys. Beramo and Berbaño assert that the name "Piczon Beramo & Associates" is "devoid of any legal
significance or implication." This claim suggests that the Court was foolish to have earlier assumed, as expressed in the
PHILIPPINE SUPREME COURT JURISPRUDENCE Resolution dated 17 January 2005, that Piczon Beramo & Associates was a private law firm. However, anybody hearing
of "Piczon Beramo & Associates" would assume that such was a private law firm, for nothing in the appellation would
indicate that it were instead composed of government lawyers, an assumption that would be readily apparent if these
LBP lawyers were identified instead as the "Land Bank Legal Department."
At any rate, the LBP Legal Department should immediately stop representing itself as "Piczon Beramo & Associates" in
courts, quasi-judicial agencies, or to the public at large. However, if it emerges that "Piczon Beramo & Associates" were
indeed a privately constituted law partnership engaged in government legal services without the requisite concurrences
of the OGCC and the Commission on Audit,[4] then disciplinary consequences may be in order.
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We now proceed to dispose of the Motion for Reconsideration on the merits. Attys. Beramo and Berbaño concede the
general rule that it is the OGCC that acts as the principal law office or counsel of all government-owned or controlled
corporations (GOCCs) such as the LBP. However, they rely upon Section 91 of LBP's Charter,[5] the provision which
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constitutes the Legal Department of LBP, as basis for insisting that the said Legal Department has the power to
represent LBP in any and all cases, including the present petition. The cited provision reads:
SECTION 91. Legal counsel. - The Secretary of Justice shall be ex-officio legal adviser of the Bank. Any provision of law
to the contrary notwithstanding, the Land Bank shall have its own Legal Department, the chief and members of which
shall be appointed by the Board of Trustees. The composition, budget and operating expenses of the Office of the Legal
Counsel and the salaries and traveling expenses of its officers and employees shall be fixed by the Board of Trustees
and paid by the Bank. (Emphasis supplied.)
True enough, the provision allows the constitution of the LBP Legal Department. However, contrary to the submission of
Attys. Beramo and Berbaño, such does not operate as an exception to the general rule that the OGCC is the principal law
office of GOCCs. Nothing in the LBP charter designates the legal department as the principal law office of LBP. In fact,
the cited provision merely says that the LBP shall have a legal department, without elaboration as to the tasks and
functions of such department.
There is nothing in the LBP charter that expressly authorizes the said Legal Department to appear in behalf of LBP in any
court or quasi-judicial proceeding. Attys. Beramo and Berbaño insist that the creation of the LBP Legal Department
"necessarily entails conferment of the power to represent [LBP] in any and all cases" and consequently confers the
power to "exercise such incidental powers or perform such acts as are necessary to make the conferred power
effective." At first blush, this is not an unreasonable position; yet, we are precluded from adopting the same, owing to the
explicit proviso in Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987,[6] which reads:
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Section 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate Counsel (OGCC) shall
act as the principal law office of all government-owned or controlled corporations, their subsidiaries, other corporate
offsprings and government acquired asset corporations and shall exercise control and supervision over all legal
departments or divisions maintained separately and such powers and functions as are now or may hereafter be
provided by law. In the exercise of such control and supervision, the Government Corporate Counsel shall promulgate
rules and regulations to effectively implement the objectives of the Office.
The OGCC is authorized to receive the attorney's fees adjudged in favor of their client government-owned or controlled
corporations, their subsidiaries/other corporate offsprings and government acquired asset corporations. These
attorney's fees shall accrue to a Special fund of the OGCC, and shall be deposited in an authorized government
depository as trust liability and shall be made available for expenditure without the need for a Cash Disbursement
Ceiling, for purposes of upgrading facilities and equipment, granting of employee's incentive pay and other benefits, and
defraying such other incentive expenses not provided for in the General Appropriations Act as may be determined by the
Government Corporate Counsel. (Emphasis supplied.)
The above provision mandates the OGCC, and not the LBP Legal Department, as the principal law office of the LBP.
Moreover, it establishes the proper hierarchical order in that the LBP Legal Department remains under the control and
supervision of the OGCC. Indeed, if we were to accede to the position of Attys. Beramo and Berbaño that the mere
constitution of an LBP Legal Department ipso facto confers upon it the capacity to litigate cases in behalf of LBP in any
legal proceeding, then the role of the OGCC as the principal law office of all GOCCs would be rendered nugatory in all
GOCCs with Legal Departments.
At the same time, the existence of the OGCC does not render the LBP Legal Department a superfluity. We do not doubt
that the LBP Legal Department carries out vital legal services to LBP. However, the performance of such functions
cannot deprive the OGCC's role as overseer of the LBP Legal Department and its mandate of exercising control and
supervision over all GOCC legal departments. For the purpose of filing petitions and making submissions before this
Court, such control and supervision imply express participation by the OGCC as principal legal counsel of LBP. Our
succeeding disposition of the OGCC's pending Manifestation would delve in detail the extent of the OGCC's required
participation. But suffice for now, Attys. Beramo and Berbaño are in error when they assert that the OGCC's participation
in the present petition is not required at all.
It should also be noted that the aforementioned Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of
1987 authorizes the OGCC to receive the attorney's fees adjudged in favor of their client GOCCs, such fees accruing to a
special fund of the OGCC. Evidently, the non-participation of the OGCC in litigations pursued by GOCCs would deprive the
former of its due funding as authorized by law. Hence, this is another reason why we cannot sustain Attys. Beramo and
Berbaño's position that the OGCC need not participate in litigations pursued by LBP.
It may strike as disruptive to the flow of a GOCC's daily grind to require the participation of the OGCC as its principal law
office, or the exercise of control and supervision by the OGCC over the acts of the GOCC's legal departments. For
reasons such as proximity and comfort, the GOCC may find it convenient to rely instead on its in-house legal
departments, or more irregularly, on private practitioners. Yet the statutory role of the OGCC as principal law office of
GOCCs is one of long-standing,[7] and we have to recognize such function as part of public policy. Since the jurisdiction
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of the OGCC includes all GOCCs, its perspective is less myopic than that maintained by a particular legal department of
a GOCC. It is not inconceivable that left to its own devices, the legal department of a given GOCC may adopt a legal
position inconsistent with or detrimental to other GOCCs. Since GOCCs fall within the same governmental framework, it
would be detrimental to have GOCCs foisted into adversarial positions by their respective legal departments. Hence,
there is indubitable wisdom in having one overseer over all these legal departments which would ensure that the legal
positions adopted by the GOCCs would not conflict with each other or the government.
Attys. Beramo and Berbaño claim that the LBP Legal Department had handled some cases which had been decided by
the Court[8] and that the OGCC has never been involved in the litigation and handling of LBP's appellate cases involving
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specialized fields such as banking and agrarian reform. These points should not be dismissed lightly, but then again,
years of wrong practice do not make a statutory right. The Administrative Code of 1987, adopting a decades-old legal
precept, expressly provides that it is the OGCC that acts as the principal law office of GOCCs and exercises control and
supervision over the legal departments of GOCCs. If the LBP Legal Department has long operated as an independent
fiefdom absent any control, supervision, or even concern from the OGCC, then this practice must end now. As to the
pending litigations of LBP which are exclusively by the LBP Legal Department, it shall be the individual courts with
jurisdiction over those cases that shall decide how to proceed next. We shall not, by reason of this Resolution, interfere
with the dispensation of those cases. Certainly, Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of
1987 can be invoked by adverse parties or by the courts in citing as deficient the exclusive representation of LBP by its
Legal Department. Then again, if neither the adverse parties nor the courts of jurisdiction choose to contest this point,
there would be no impediment to the litigation to maintain.
Of course, if the principle that the OGCC is the principal law office of GOCCs proves persistently inconvenient in practice,
it would be up to Congress to amend the Administrative Code, or for the OGCC itself to promulgate rules and regulations
that would alleviate the problems in practice without abdicating its legal mandate. The succeeding discussion on the
OGCC's pending Manifestation involves a review of the OGCC's current practices, including the present rules and
regulations.
The OGCC states in its Manifestation that it had duly authorized the LBP Legal Department to handle the present case.
The authority referred to comes from an attached Letter of Authority signed by Government Corporate Counsel Agnes
VST Devanadera and addressed to Atty. Manuel C. Picson, Vice President/Head, Legal Services Group of the LBP. The
letter relevantly states:
By virtue of the 1987 Revised Administrative Code, the Office of the Government Corporate Counsel (OGCC) hereby
authorizes the Legal Department of LBP to handle [this petition], as counsel for LBP.
Relative thereto, the Legal Department of LBP is likewise authorized to prepare and sign all pleadings that are to be filed
with the Supreme Court.
It should be noted that contrary to the premise stated in the Letter of Authority, nothing in the Administrative Code of
1987 expressly allows the OGCC to authorize a legal department to handle a particular case in behalf of the GOCC.
However, we are willing to concede that by virtue of the mandate of control and supervision exercised by the OGCC over
the legal departments of GOCCs, there are permissible levels of delegation of authority the OGCC may cede to the legal
departments it supervises. We need to ascertain though the extent of authority the OGCC may delegate to the LBP Legal
Department in this case.
For one, we cannot sustain an interpretation of the Letter of Authority that would excuse the OGCC from any further
participation in this case. The Letter of Authority certainly admits to such an interpretation, though it does not expressly
preclude further involvement by the OGCC. Nevertheless, the Letter of Authority cannot be construed in such a manner
that would virtually result in a surrender or abdication of powers by the office charged by law with its performance.[9] cralaw
More decisively to this petition, the Rules and Regulations Integrating and Implementing the Mandate of the Office
Government Corporate Counsel (Implementing Rules) indubitably requires that the OGCC handle the instant petition. The
case involves a just compensation claim by the respondent over two parcels of land which the trial court adjudged in the
respective amounts of Eight Hundred Twenty Five Thousand Fifty Pesos and Seventy One Centavos (P825,050.71) and
One Million Two Thousand Ninety Nine Pesos and Thirty Centavos (P1,002,099.30), or One Million Eight Hundred Twenty
Seven Thousand One Hundred and Fifty Pesos and One Centavos (P1,827,150.01) all in all.[10] The case was ordered
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remanded to the trial court by the Court of Appeals Sixteenth Division in its assailed Decision dated 3 August 2004.[11] cralaw
The issue raised in the present petition is whether the determination of just compensation upon remand to the trial court
should be based on the determination of the selling price of palay or that the formula under Presidential Decree No. 27
be applied.[12] Yet the amounts involved, as evidenced by the trial court decision, are obviously significant. In that
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1. The GOCCs shall refer to the OGCC only cases and legal matters which are important or which involve amounts of not
less than FIVE HUNDRED THOUSAND PESOS (P500,000.00).
a) In referrals, the GOCCs shall provide complete documentation and background of all cases or
legal matters so referred.
b) The GOCCs shall prepare and send to the OGCCs all preliminary communications such as
demand letters and affidavits or pleadings for review.
c) The GOCCs shall coordinate and consult with the OGCC for prompt, efficient, effective, adequate,
competent and developmental legal services.
d) As a matter of policy, the GOCCs shall exhaust all administrative remedies before filing any case
and the case so filed must be based on clear provisions of law and not on mere technicalities.
If there can be any doubt that it is the OGCC which should handle the present petition, Article IV of the Implementing
Rules further provides:
Article IV. Jurisdiction, Powers and Duties of the OGCC. The OGCC has the following jurisdiction, powers and duties:
2. Represents the GOCCs in all litigations and proceedings before the Supreme Court, Court of Appeals, and all other
courts or tribunals, including quasi-judicial bodies, in the Philippines, as well as in all litigations and proceedings in
foreign countries consistent with their laws.
These above-cited provisions from the Implementing Rules, promulgated consistent with the authority under the
Administrative Code for the OGCC to prescribe such rules,[13] make it clear that in cases involving amounts exceeding
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Five Hundred Thousand Pesos (P500,000.00) such as the present petition, it is the OGCC tasked with directly handling
the case. Therefore, the Letter of Authority cannot excuse the OGCC from handling the present petition, as to construe
the letter otherwise would be in violation of the mandate under the Administrative Code of the OGCC as the principal law
office of the LBP, and of the specific provisions of the OGCC's own Implementing Rules.
It does not escape our attention that there seems to be a patent inconsistency in the Implementing Rules, Article IV
vesting jurisdiction on the OGCC to represent the GOCCs in all litigations, and Article V limiting the referral of cases by
GOCCs to OGCCs to important cases or those which involve amounts of not less than Five Hundred Thousand Pesos
(P500,000.00). The inconsistency is not material to the present petition though, since these provisions inescapably task
the OGCC to represent the LBP in those cases involving amounts in excess of Five Hundred Thousand Pesos
(P500,000.00). Nonetheless, the contradictory provisions, as they stand, would cause confusion as to whether the OGCC
needs to appear in behalf of GOCCs in cases involving small claims. We shall avoid making any pronouncements on this
point for now, since such would anyway constitute obiter dicta, but certainly the OGCC can avoid unnecessary confusion
and needless litigation on the question should it simply amend its own Implementing Rules.
Does this ruling of the Court likewise preclude participation in this petition from the LBP Legal Department? It does not,
so long as the OGCC consents to such participation, and the Legal Department so acts under the control and
supervision of the OGCC. For all practical intents, the members of the LBP Legal Department would be free to develop
the theories behind this case, or to draft and co-sign pleadings. However, these actions must meet the approval of the
OGCC, such approval being sufficiently evidenced by the OGCC's signature on the pleadings filed before this Court.
We do not discount the LBP Legal Department's unique position to assist in the litigation of this case. Its familiarity with
the facts, as well as with the day-to-day workings of the LBP, invests it with distinct advantages in handling the petition
that might not be shared by the members of the OGCC. From the prescribed statutory setup between the LBP Legal
Department and the OGCC, we can discern similarities to the prevalent practice in law firms of having junior associates
probe into the factual background of cases and prepare the initial drafts, their output subject to the review and approval
of the firm's senior partner. The junior associate (or the LBP Legal Department) would have the advantage gained by
proximity to the milieu, but the senior partner would have the advantage of a wider perspective enriched by experience.
The correlative advantage of the OGCC might not necessarily be derived from years of experience, but putatively from its
vantage point as overseer of all legal processes emanating from and involving all GOCCs.
The OGCC and the LBP Legal Department would be served well in accepting the prescribed statutory setup and acceding
to the benefits of the imposed relationship. Indeed, the petition could have been dismissed outright considering that it
was not filed by the OGCC. Instead, we have allowed it to stand thus far and even endeavored to elaborate upon it in
quite a few extensive resolutions, not because the petition has obvious or indubitable merit, but out of a legitimate
concern to see to it that the law is followed, with the framework established by the Administrative Code observed by the
OGCC and the LBP Legal Department alike. It is hoped that the Court's atypical indulgence of this petition, as expressed
by this Resolution and the two that came before it, would appropriately guide the LBP and the OGCC in future litigations.
But the time would come for the present petition to be litigated solely on the merits.
1) to DENY the Motion for Reconsideration dated 24 May 2005 for lack of merit;
2) to NOTE the Manifestation dated 3 June 2005 insofar as it manifests that the OGCC is adopting the instant petition
as its own;
3) to REQUIRE the OGCC to directly handle the instant petition, and if it so chooses, to engage the LBP Legal
Department as its collaborating counsel under its control and supervision as mandated under the Administrative Code
of 1987;
4) to REQUIRE respondent Teresita Panlilio-Luciano to COMMENT on the Petition for Review dated 27 October 2004
within TEN (10) DAYS from receipt of this Resolution.
Endnotes:
[1] Rollo, pp. 171-175.
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[4]
See Phividec Industrial Authority v. Capitol Steel Corporation, G.R. No. 155692, 23 October 2003,414
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[7]See Phividec Industrial Authority v. Capitol Steel Corporation, supra note 4 at 330-332 for the
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1991, 201 SCRA 299; LBP v. Jose Pascual, G.R. No. 128557; and Gabatin v. LBP, G.R. No. 148223, 25
November 2004.
[9] See I. CORTES, PHILIPPINE ADMINISTRATIVE LAW: CASES AND MATERIALS, 1963 ed., at 12.
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[11]Rollo, p. 62. Decision penned by Justice R. Dacudao, concurred in by Justices L. Bersamin and Celia
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Librea-Leagogo.
[12] Id. At 40.
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