045 REGALA v. SANDIGANBAYAN (Peliño) imposed on them in the exercise of their duties.
By compelling, ACCRA lawyers
September 20, 1996 | Kapunan, J. | Privileged Communication
G.R. No. 105938
PETITIONERS: Teodoro R. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose
C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, and Eduardo U. Escueta
RESPONDENTS: The Honorable Sandiganbayan, First Division, Republic of
the Philippines, acting through the Presidential Commission on Good
Government, and Raul S. Roco
G.R. No. 108113
PETITIONER: Paraja G. Hayudini
RESPONDENTS: The Sandibayan and The Republic of the Philippines
SUMMARY: ACCRA lawyers were made defendants in a Sandiganbayan case
when they did not disclose the name of their principal since their lawyers were
used as nominee-stockholders for corporations in the coco levy fund scandal.
The lawyers now seek to be excluded from the case on the basis that non-
disclosure of the identity of their client is within the ambit of the attorney-client
privilege. The issue in this case is whether or not the non-disclosure of the
identity of their client is within the ambit of the attorney-client privilege. The SC
held in the affirmative. The general rule is a client’s identity should not be
shrouded in mystery since the court has the right to know that the client whos
privileged information is sought to be protected is flesh and blood, the privilege
exists only after an attorney-client relationship is established, and the privilege
generally pertains to the subject matter, and that the opposing party should know
his adversary. But the exceptions are: (a) strong probability exists that revealing
the client’s name would implicate that client in the very activity for which he
sought the lawyer’s advice, (b) where disclosure would open the client to civil
liability, (c) where the government’s lawyers have no case against an attorney’s
client unless, by revealing the client’s name, the said name would furnish the
only link that would form the chain of testimony necessary to convict the
individual of a crime, the client’s name is privileged. Information relating to the
identity of a client may fall within the ambit of the privilege when the client’s
name itself has an independent privilege where the client’s name itself has an
independent significance, such that disclosure would then reveal client
confidence. The crux of the ACCRA lawyers’ objections hinges on their
expectiation that if the prosecution has a case against their clients, the latter’s
case should be built upon evidence painstakingly gathered by them from their
own sources and not from compelled testimony requiring them to reveal the
name of their clients, information which unavoidably reveals much about the
nature of the transaction which may or may not be illegal. A lawyer cannot
reveal such communication without exposing himself to charges violating a
principle which forms the bulwark of the entire attorney-client relationship. To
sustain the PCGG’s contentions, it would expose the lawyers to possible
litigation from their clients in view of the strict fiduciary responsibilities
would form the chaim of testimony necessary to convict their clients of a crime.
DOCTRINE: Information relating to the identity of a client may fall within the
ambit of the privilege when the client’s name itself has an independent privilege
where the client’s name itself has an independent significance, such that
disclosure would then reveal client confidence.
FACTS:
1. This case was an offshoot of a complaint filed before the Sandiganbayan by
the Republic through the PCGG against Eduardo Cojuangco for the
recovery of ill-gotten wealth.
a. Among the defendants are the petitioners here (ACCRA lawyers for
short).
2. ACCRA lawyers performed legal services for its clients, and in the
performance of these services, they delievered documents which
substantiate the client’s equity holdings.
a. In their dealings, ACCRA lawyers acquired information as to the assets
of their clients and their personal and business circumstances.
b. And that they assisted in the organization and acquisition of the
companies in the case of Cojuangco and these ACCRA lawyers acted
as nominee-stockholders in the corporations subject of the sequestration
proceedings.
3. PCGG filed a Motion to Admit Third Amended Complaint and a Third
Amended Complaint, since they moved to exclude Raul Roco (Roco) from
the complaint.
a. Basis was that Roco complied with the condition that he will reveal the
identity of the principal/s for whom he acted as nominee/stockholder in
the companies involved in the PCGG case.
b. ACCRA lawyers were included in the Third Amended Complaint since
ACCRA lawyers conspired in setting up, through the coco levy funds,
the companies subject of the sequestration proceedings.
4. ACCRA lawyers in their answer said in essence that their participation was
in furtherance of legitimate lawyering.
5. Hayudini was also implicated.
6. ACCRA lawyers filed a comment and/or opposition with counter-motion
that PCGG should grant them the same treatment as how they treated Roco
(since PCGG dropped Roco).
a. PCGG’s comment set out the conditions for the exclusion of the
ACCRA lawyers, namely: (i) disclosure of the identity of its clients, (ii)
submission of documents substantiating the lawyer-client relationship,
and (iii) submission of the deeds of assignments ACCRA lawyers
executed in favor of its client covering their respective shareholdings.
7. PCGG presented supposed proof to substantiate compliance by Roceo of
the conditions set by them.
a. Sandiganbayan promulgated the Resolution denying the exclusion of
 the ACCRA lawyers for their refusal to comply with the conditions set
forth by PCGG since the ACCRA lawyers never complied with the
conditions, so they can’t be excluded, unlike Roco who complied.
8. ACCRA lawyers moved for a reconsideration, but was denied.
9. Hence, this petition.
ISSUE/s:
1. WON ACCRA lawyers should be excluded on the ground that the attorney-
client privilege prohibits ACCRA lawyers from revealing the identity of
their clients. – YES, jurisprudence has provided that the identity of the
client, when it can be used as a fishing expedition to file cases, can be
considered as privileged.
RULING: WHEREFORE, in view of the foregoing, the Resolutions of the
Sandiganbayan are hereby ANNULLED and SET ASIDE. Sandiganbayan is further
ordered to EXCLUDE petitioners Teodoro Regala, Edgardo Angaram Avelino Cruz,
Jose Concepcion, Victor Lazatin, Eduardo Escueta, and Paraja Hayudini as parties-
defendants in the case entitled “Republic v. Cojuangco, Jr., et. al.”
RATIO:
On whether ACCRA lawyers should be excluded on the ground that the attorney-
client privilege prohibits ACCRA lawyers from revealing the identity of their clients
1. ACCRA laywers: Exclusion of Roco grants him a favorable treatment.
a. Even assuming that such an undertaking has been assumed by Roco,
they are prohibited from revealing the identity of their principal under
their sworn mandate and fiduciary duty as lawyers to uphold at all
times the confidentiality of information obtained during such lawyer-
client relationship.
2. PCGG: Revelation of the identity of the client is not within the ambit of
lawyer-client confidentiality privilege, nor are the documents it required
protected, because they are evidence of nominee status.
3. SC: Contentions of ACCRA lawyers are impressed with merit.
a. ACCRA lawyers were impleaded as co-defendants to force them to
disclose the identity of their clients. So PCGG is not after the ACCRA
lawyers but the “bigger fish” as evidenced by their willingness to cut a
deal with the ACCRA lawyers.
b. Nature of the lawyer-client relationship is premised on the concept of
location conductio operarum (contract of lease of services) and
mandato (contract of agency); but the relationship itself is more than
that of the principal-agent and lessor-lessee.
c. An attorney is more than a mere agent or servant because he
possesses special powers of trust and confidence reposed on him by
his client.
d. In the creation of lawyer-client relationship, there are rules, ethical
conduct and duties that breathe life into it.
e. This duty of the lawyer is enunciated in Rules 138, Canon 17 and
15 of the CPR.
f. Encouraging full disclosure to a lawyer by one seeking legal
services opens the door to a whole spectrum of legal options which
would otherwise be circumscribed by limited information
engenedered by a fear of disclosure.
g. Effective lawyer-client relationship is largely dependent upon the
degree of confidence which exists between lawyer and client which in
turn requires a situation which encourages a dynamic and fruitful
exchange and flow of information.
h. GENERAL RULE: A client’s identity should not be shrouded in
mystery since the court has the right to know that the client whos
privileged information is sought to be protected is flesh and blood,
the privilege exists only after an attorney-client relationship is
established, and the privilege generally pertains to the subject
matter, and that the opposing party should know his adversary.
i. EXCEPTIONS:
(a) Strong probability exists that revealing the client’s name
would implicate that client in the very activity for which he
sought the lawyer’s advice.
(b) Where disclosure would open the client to civil liability.
(c) Where the government’s lawyers have no case against an
attorney’s client unless, by revealing the client’s name, the said
name would furnish the only link that would form the chain of
testimony necessary to convict the individual of a crime, the
client’s name is privileged.
ii. To summarize: Information relating to the identity of a client
may fall within the ambit of the privilege when the client’s
name itself has an independent privilege where the client’s
name itself has an independent significance, such that
disclosure would then reveal client confidence.
i. The case at bar falls under the exceptions, considering that the clients
of ACCRA lawyers consulted them in their capacity as lwayers
regarding the financial and corporate structure, framework, and set-up
of the corporation in question, and in turn, the lawyers gave their
professional advice.
j. Revelation of the client’s name would obviously provide the necessary
link for the prosecution to build a case where none exists. It is the link
that would form the chain of testimony necessary to convict the client
of a crime. (As stated in the US case of Baird).
k. But there are distinctions where: (1) a case were a client takes on
the services of a lawyer for illicit purposes, and (2) where the client
thinks he might have previously committed something illegal and
consults his attorney about it. The first one is not privileged but the
other one is. Because whether or not the act is illegal, his name
can’t be used or disclosed if the disclosure leads to evidence, not yet
in the hands of the prosecution, which might lead to a possible
 action against him. This results to a fishing expedition.
l. The crux of the ACCRA lawyers’ objections hinges on their
expectiation that if the prosecution has a case against their clients,
the latter’s case should be built upon evidence painstakingly
gathered by them from their own sources and not from compelled
testimony requiring them to reveal the name of their clients,
information which unavoidably reveals much about the nature of
the transaction which may or may not be illegal.
m. A lawyer cannot reveal such communication without exposing
himself to charges violating a principle which forms the bulwark of
the entire attorney-client relationship.
n. Ubbermei fide relationship – imposes strict liability; ethical duties
owing to the client including confidentiality, loyalty, competence,
diligence, as well as responsibility to keep clients informed and
protect their rights to make decisions have been zealously
sustained.
o. To sustain the PCGG’s contentions, it would expose the lawyers to
possible litigation from their clients in view of the strict fiduciary
responsibilities imposed on them in the exercise of their duties.
p. By compelling, ACCRA lawyers would form the chaim of
testimony necessary to convict their clients of a crime.

Vitug, Concurring:
1. Protection of confidentiality of the lawyer-client relationship is one and it
has since been an accepted firmament in the profession.
2. It allows the lawyer and the client to institutionalize a unique relationship
based on full trust and confidence essential in a justice system that works on
the basis of substantive and procedural due process.

Davide, Jr., Dissenting:

1. The rule of confidentiality under the lawyer-client relationship is not a
cause to exclude a party. It is merely a ground for disqualification of a
witness and may only be invoked at a proper time.
2. None of the lawyers in this case were required to testify, but in fact, were
made defendants.
3. In essence, he dissented, saying that if they allow the ACCRA lawyers to be
excluded, then they, in effect, allow a defiance of the law or at lessening
confidence in the legal system.

Puno, Dissenting:
1. General Rule, the attorney-client privilege does not include non-disclosure
of client identity. But there are exceptions.
2. However, for Justice Puno, this case actually falls under a case were a
client takes on the services of a lawyer for illicit purposes.
3. In addition, they merely just asserted the privilege without showing proof
that they are entitled to it, unlike Roco who actually showed proof.