The Supreme Court held that an attorney appearing on behalf of a client without proper authority may face disciplinary action. This ruling underscores the importance of verifying an attorney’s credentials and ensuring they possess the explicit authorization to act on your behalf in legal proceedings. It protects clients from unauthorized representation and maintains the integrity of the legal profession by upholding ethical standards for attorney conduct.

When a Lawyer’s Zeal Exceeds Legal Bounds: The Case of Unauthorized Representation

This case revolves around a disbarment complaint filed by Jesus E. Santayana against Atty. Eliseo B. Alampay. Santayana alleged that Atty. Alampay, a member of the Board of Administrators of the National Electrification Administration (NEA), engaged in malpractice and violated his oath as an attorney. The core of the complaint stemmed from Atty. Alampay’s law firm representing NEA in a legal dispute without the necessary authorization, specifically when the law mandates that NEA be represented by the Office of the Government Corporate Counsel (OGCC), the NEA’s own legal division, or the Office of the Solicitor General (OSG).

The controversy began with a bidding process for the IPB 80 Project, a rural electrification program component. Nerwin Industries Corporation (Nerwin) was initially declared the lowest bidder, but NEA later disqualified Nerwin and awarded the project to a different bidder. Seeking legal justification, NEA consulted the OGCC, which advised against NEA’s action, deeming it a violation of the law. Despite this, Atty. Alampay’s law firm provided a legal opinion that contradicted the OGCC’s, leading NEA to nullify the award to Nerwin, which then prompted Nerwin to file a lawsuit against NEA.

Atty. Alampay’s law firm then entered its appearance as counsel for NEA in the said case, resulting in Nerwin filing a motion to disqualify the law firm, which the Regional Trial Court (RTC) granted. The RTC order explicitly discontinued and terminated the appearance of Atty. Alampay’s law firm on behalf of NEA. The court further directed the Chief of the Legal Division of NEA to represent the administration unless NEA chose the services of the Office of the Government Corporate Counsel or the Office of the Solicitor General.

“WHEREFORE, the Court hereby rules as follows: (1) the motion to dismiss is denied, and (2) the motion to disqualify the Alampay, Gatchalian, Mawis and Alampay Law Office is granted thus this Court’s recognition of the appearance and representation for and in behalf of NEA of ALAMPAY, GATCHALIAN, MAWIS and ALAMPAY Law Office is discontinued and terminated.”

Atty. Alampay’s subsequent motion for reconsideration was denied. He then filed a petition for certiorari with the Court of Appeals, which was also dismissed. The Court of Appeals emphasized the lack of written conformity from the mandated government lawyers and the Commission on Audit, rendering the representation by Atty. Alampay’s law firm without legal basis. The complainant, Santayana, accused Atty. Alampay of violating Section 20(a) of Rule 138 of the Revised Rules of Court, malpractice under Section 27 of Rule 138, rendering an unauthorized legal opinion, and violating the Attorney’s Oath.

In his defense, Atty. Alampay argued that NEA’s Board of Administrators authorized his firm to represent NEA without attorney’s fees. He contended that the OGCC’s adverse stance justified NEA’s engagement of other counsel and claimed the NEA Charter did not prohibit it. The Integrated Bar of the Philippines (IBP), after investigation, found Atty. Alampay in violation of Canon 1 of the Code of Professional Responsibility and Rule 1.02 of the same Canon, recommending a reprimand and warning. The IBP Board of Governors adopted this recommendation.

The Supreme Court ultimately sustained the IBP’s Resolution. The court cited Section 10, Chapter 3, Title III, Book IV of the Administrative Code of 1987, which designates the OGCC as the principal law office for all government-owned or controlled corporations. While Section 61 of Presidential Decree No. 269, NEA’s charter, allows the NEA’s legal division to represent it in judicial proceedings, this was interpreted as an exception to the general rule. Furthermore, the Supreme Court referenced Memorandum Circular No. 9, which prohibits GOCCs from hiring private lawyers without written conformity from the Solicitor General or Government Corporate Counsel, and written concurrence from the Commission on Audit.

“SEC. 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 offspring 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 this Office.”

The Supreme Court scrutinized Resolution No. 38, the document Atty. Alampay cited as his authorization, and found it legally deficient due to the absence of written conformity from the Solicitor General or OGCC and written concurrence from the Commission on Audit. Therefore, the Court concluded that Atty. Alampay’s law firm willfully appeared as counsel for NEA without proper authority. This constitutes a violation of Section 27, Rule 138 of the Revised Rules of Court, which allows for disbarment or suspension for corruptly and willfully appearing as an attorney without authority. Despite this, the Court noted the absence of bad faith on Atty. Alampay’s part and that his firm’s services were pro bono.

“SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefore. – A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which is he is required to take before admission to practice, for a willful disobedience of any lawful order of a superior court or for corruptly and willfully appearing as an attorney for a party to a case without authority to do so. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice”

Here is a summary table highlighting the critical aspects of the case:

Issue	Details
Unauthorized Representation	Atty. Alampay’s law firm represented NEA without proper authorization from OGCC, OSG, or COA.
Legal Mandates	GOCCs must primarily be represented by OGCC; hiring private lawyers requires specific approvals.
Disciplinary Action	Atty. Alampay was fined for unauthorized representation, despite the absence of bad faith.

FAQs

What was the key issue in this case?	The key issue was whether Atty. Alampay’s law firm could represent the National Electrification Administration (NEA) in court without proper authorization from the Office of the Government Corporate Counsel (OGCC), the Office of the Solicitor General (OSG), or the Commission on Audit (COA). The Supreme Court ultimately ruled that such representation was unauthorized.
Why was Atty. Alampay’s representation considered unauthorized?	Atty. Alampay’s representation was unauthorized because he failed to secure the necessary written conformity from the Solicitor General or the OGCC and the written concurrence of the Commission on Audit, as required by Memorandum Circular No. 9. This circular governs the hiring of private lawyers by government-owned and controlled corporations (GOCCs).
What is the role of the Office of the Government Corporate Counsel (OGCC) in representing GOCCs?	The OGCC serves as the principal law office for all government-owned or controlled corporations, their subsidiaries, and other corporate offspring. It has the primary responsibility for handling their legal matters and representing them in legal proceedings, as mandated by the Administrative Code of 1987.
What disciplinary action did Atty. Alampay face?	Atty. Alampay was fined P5,000.00 for appearing as an attorney for a party to a case without authority to do so. He was also warned that any future repetition of a similar infraction would be dealt with more severely.
Did the Court find that Atty. Alampay acted in bad faith?	No, the Court specifically noted that there was no indication in the records that Atty. Alampay acted in bad faith. In fact, his law firm’s services for NEA were provided pro bono, without any fees.
What is the significance of Memorandum Circular No. 9 in this case?	Memorandum Circular No. 9 prohibits GOCCs from hiring private lawyers or law firms to handle their cases and legal matters unless they secure written conformity and acquiescence from the Solicitor General or the Government Corporate Counsel, as well as written concurrence from the Commission on Audit. This circular played a crucial role in determining the unauthorized nature of Atty. Alampay’s representation.
What is the impact of this ruling on lawyers who represent GOCCs?	This ruling reinforces the importance of attorneys ensuring they have explicit and proper authorization before representing GOCCs. It highlights the need to comply with all relevant regulations and secure necessary approvals to avoid disciplinary actions for unauthorized representation.
Can GOCCs ever hire private lawyers?	Yes, GOCCs can hire private lawyers in exceptional cases, but only with the written conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, and the written concurrence of the Commission on Audit.

This case serves as a clear reminder to attorneys of the importance of verifying their authority to represent clients, particularly in the context of government-owned or controlled corporations. Failure to comply with established legal procedures can result in disciplinary actions and undermine the integrity of the legal profession.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: JESUS E. SANTAYANA vs. ATTY. ELISEO B. ALAMPAY, A.C. NO. 5878, March 21, 2005