Puyat v. de Guzman

EUGENIO PUYAT v. HON. SIXTO de GUZMAN (R)
G.R. No. L-51122 March 25, 1982

FACTS:

• An election for the 11 Directors of the International Pipe Industries Corporation (IPI) was held. The Puyat Group would be in control of the Board and of the management of IPI.
• The Acero Group instituted at the Securities and Exchange Commission (SEC) quo warranto proceedings, questioning the election. The Acero Group claimed that the stockholders' votes were not properly counted.
• The Puyat Group claims that at conferences of the parties with respondent SEC Commissioner de Guzman, Justice Estanislao A. Fernandez, orally entered his appearance as counsel for respondent Acero to which the Puyat Group objected on Constitutional grounds. Sec 11, Art VIII, of the 1973 Constitution, then in force, provided that no Assemblyman could "appear as counsel before ... any administrative body", and SEC was an administrative body. Incidentally, the same prohibition was maintained by the April 7, 1981 plebiscite. 
• May 31, 1979. When the SEC Case was called, it turned out that:
• Assemblyman Estanislao A. Fernandez had purchased from Augusto A. Morales 10 shares of stock of IPI for P200.00 upon request of respondent Acero to qualify him to run for election as a Director.
• The deed of sale, however, was notarized only on May 30, 1979 and was sought to be registered on said date.
• May 31, 1979, the day following the notarization of Assemblyman Fernandez' purchase, the latter had filed an Urgent Motion for Intervention in the SEC Case as the owner of 10 IPI shares alleging legal interest in the matter in litigation.
• The SEC granted leave to intervene on the basis of Atty. Fernandez' ownership of the said ten shares. It is this Order allowing intervention that precipitated the instant petition for certiorari and Prohibition with Preliminary Injunction.
• Edgardo P. Reyes instituted a case before the Court of First Instance of Rizal (Pasig) against N.V. Verenigde Bueinzenfabrieken Excelsior — De Maas and respondent Eustaquio T. C. Acero and others, to annul the sale of Excelsior's shares in the IPI to respondent Acero. In that case, Assemblyman Fernandez appeared as counsel for defendant Excelsior.
• The Court issued a temporary Restraining Order enjoining respondent SEC Associate Commissioner from allowing the participation as an intervenor, of respondent Assemblyman Estanislao Fernandez at the proceedings in the SEC Case.
• The Solicitor General, in his Comment for respondent Commissioner, supports the stand of the latter in allowing intervention. The Court, on November 6, 1979, resolved to consider the Comment as an Answer to the Petition.

ISSUE:

• Whether or not Assemblyman Fernandez, as a then stockholder of IPI may intervene in the SEC Case without violating Sec 11, Article VIII of the Constitution. 

HELD:

• We are constrained to find that there has been an indirect "appearance as counsel before ... an administrative body" and, in our opinion, that is a circumvention of the Constitutional prohibition. The "intervention" was an afterthought to enable him to appear actively in the proceedings in some other capacity. To believe the avowed purpose, that is, to enable him eventually to vote and to be elected as Director in the event of an unfavorable outcome of the SEC Case would be pure naivete. He would still appear as counsel indirectly.
• A ruling upholding the "intervention" would make the constitutional provision ineffective. All an Assemblyman need do, if he wants to influence an administrative body is to acquire a minimal participation in the "interest" of the client and then "intervene" in the proceedings. That which the Constitution directly prohibits may not be done by indirection or by a general legislative act which is intended to accomplish the objects specifically or impliedly prohibited.
• In brief, we hold that the intervention of Assemblyman Fernandez falls within the ambit of the prohibition contained in Sec 11, Article VIII of the Constitution.