G.R. No. 97351 - Gonzales vs. Chavez

Case Summary (G.R. No. 97351)

Key Dates and Applicable Law

Solicitor General’s withdrawal: December 3, 1990
Decision date: February 4, 1992
Applicable law: 1987 Philippine Constitution; Presidential Decree No. 478; Administrative Code of 1987 (Executive Order No. 292); Executive Orders Nos. 1, 2, and 14 (1986) establishing PCGG’s powers and jurisdiction; Rules of Court

Issues Presented

Whether the Solicitor General neglected his public duty by withdrawing as counsel for the Republic and the PCGG.
Whether the PCGG acted without or in excess of jurisdiction by hiring private lawyers after the Solicitor General’s withdrawal.

Solicitor General’s Withdrawal and Its Consequences

Solicitor General Chavez withdrew his appearance as counsel for the Republic and PCGG in a total of 144 cases (33 before the Supreme Court, 109 in the Sandiganbayan, plus others). His withdrawal was made through a pleading entitled "Withdrawal of Appearance with Reservation," wherein he reserved the right to comment on pending matters if called upon by the court or in government interest. Following this, the PCGG hired 40 private lawyers compensated monthly plus appearance fees to continue prosecuting the cases.

Petitioner's Argument on Mandatory Appearance of the Solicitor General

The petitioner argued that under Section 1 of P.D. No. 478 and Section 35 of the Administrative Code of 1987, the Solicitor General is mandated to act as legal counsel for the government including the PCGG, without discretion to withdraw. The Solicitor General’s withdrawal, allegedly made without valid reasons, violated this mandatory duty. The petitioner relied on established doctrine, dating back to Sta. Rosa Mining Co. v. Zabala, that public prosecutors must prosecute their cases despite personal opinions or convictions.

Petitioner also maintained that:

The Solicitor General loses standing once withdrawing and cannot appear “with reservation” or file comments afterward, except as mandated by law (e.g., cases involving constitutional issues under Rule 3, Section 23 of the Rules of Court).
Withdrawal without court approval is null and void under Rule 138, Section 26.
The PCGG’s hiring of private lawyers, in absence of explicit legal authorization, was ultra vires and constituted unlawful expenditure of public funds.
The Solicitor General and PCGG are statutorily bound; the Solicitor General may not pick and choose cases to prosecute or defend at will.

Respondents’ Arguments and Position

The COA affirmed it had not authorized payment for private lawyers and highlighted existing administrative circulars prohibiting hiring external counsel without Solicitor General’s approval and COA concurrence.
The PCGG claimed its broad powers under Executive Orders Nos. 1, 2, and 14 include implied authority to engage private lawyers as necessary to fulfill its mandate, especially after the Solicitor General’s withdrawal. It analogized the hiring of accountants and other professionals with hiring private legal counsel.
The PCGG argued the Solicitor General’s withdrawal forced it to hire private lawyers to avoid prejudice in the government’s recovery efforts given its own insufficient legal manpower to confront wealthy defendants.
The PCGG asserted that the Solicitor General’s withdrawal amounted to tacit approval of PCGG’s hiring of private lawyers and that the reasonableness of their fees was commensurate with complexity and expertise.
The Solicitor General, through Assistant Solicitor General commenters, explained the withdrawal was due to repeated professional embarrassment arising from the PCGG’s failure to coordinate or keep OSG informed, leading to OSG being undermined in open court. It contended this justified the withdrawal and that the matter was already resolved by prior court rulings accepting the withdrawal "with reservation."

Historical and Legal Background of the Office of the Solicitor General

The Court traced the statutory origins of the Solicitor General’s office from Act No. 136 (1901) and various laws evolving to establish the OSG as the principal law office of the government, erected to consolidate legal services, ensure consistent legal policy, and represent the government in all courts and matters requiring legal counsel.

Presidential Decree No. 478 (1974) and the Administrative Code of 1987 (Executive Order No. 292) explicitly designate the Solicitor General as the principal law officer of the government, tasked with representing the Republic, its agencies, instrumentalities, officials, and agents in litigation, investigations, and legal proceedings. The use of the term "shall" in these provisions denotes mandatory duties.

Nature of the Solicitor General’s Duty and Discretion

The Court emphasized the mandatory nature of the Solicitor General’s duty to represent the government and that such duty may be compelled via mandamus. The Solicitor General holds a public office involving some sovereign functions and acts as officer of the court, with responsibilities extending beyond ordinary client-lawyer relations.

However, the Court acknowledged the Solicitor General has discretion akin to that of the U.S. Attorney General in commencing, maintaining, dismissing, or compromising cases, subject to reasonableness grounded in the State’s best interests. The discretion must not be arbitrary or exercised on trivial grounds and must align with national interest and legal mandates.

Application of the Law to the Present Case

It was pointed out that the PCGG, although empowered by executive orders to prosecute cases it investigates, does not divest the Solicitor General of his statutory mandate to represent the government and its agencies in litigation. The PCGG cannot abdicate this power or appoint private counsel without legal basis. Only in proceedings outside the Philippines may the Solicitor General hire counsel to assist.

The Solicitor General’s withdrawal based on alleged professional humiliation and lack of coordination was deemed unjustified. Open communication between the PCGG and the OSG is essential, and the OSG must be sustained in performance of its duties without prejudice arising from the conduct of either party.

The Solicitor General’s retention of a "right to comment" after withdrawal lacks legal standing because withdrawal terminates his official representation in court unless otherwise ordered by the court.

The Court also rejected the argument that the Solicitor General’s withdrawal was already judicially recognized as valid, declaring that an important question of public right persists warranting this ruling.

Judicial Findings and Holding

The Solicitor General’s duty to represent the government, the PCGG, and the Republic in litigation is mandatory under law. He may not withdraw his appearance without valid and legal justification, nor may he abdicate his responsibilities for trivial reasons such as professional embarrassment.
The Solicitor General’s unilateral withdrawal without client consent or court approval is beyond his authority and constitutes dereliction of duty.
The PCGG acted within reasonable necessity in hiring private lawyers after the Solicitor General's withdrawal, b

Case Syllabus (G.R. No. 97351)

Factual Background and Nature of the Petition

Petitioner Ramon A. Gonzales, a citizen and taxpayer, filed a petition for mandamus and prohibition with a prayer for a temporary restraining order.
The petition raises two main issues: (1) whether the Solicitor General neglected his public duty by withdrawing as counsel for the Republic of the Philippines and the Presidential Commission on Good Government (PCGG) in multiple court cases; and (2) whether the PCGG acted without or in excess of jurisdiction in hiring private lawyers to substitute for the Solicitor General after his withdrawal.
The petition was filed as a class suit under Section 12, Rule 3 of the Rules of Court, citing public interest and prevention of unlawful expenditure of public funds.
The Solicitor General, Francisco I. Chavez, withdrew through a pleading entitled "Withdrawal of Appearance with Reservation" in 144 cases spanning various courts, including the Supreme Court and Sandiganbayan.
Subsequent to this withdrawal, the PCGG hired forty (40) private lawyers, with monthly compensations and appearance fees as detailed in the petition.

Petitioner's Legal Arguments and Contentions

The Solicitor General’s withdrawal was without lawful reason and implied discretion unallowed by mandatory statutes.
Section 1 of Presidential Decree No. 478 and Section 35 of the 1987 Administrative Code mandate the Solicitor General to represent the Republic and PCGG in all relevant cases, without discretion to withdraw.
Reliance on Sta. Rosa Mining Co. v. Zabala to argue that public prosecutors (including the Solicitor General) are duty-bound to proceed regardless of personal opinions.
The Solicitor General's attempted reservation to submit comments after withdrawal is invalid due to loss of standing once withdrawal is expressed.
Section 26 of Rule 138 requires client consent or court approval for attorney withdrawal; such consent or approval was absent, rendering the withdrawal legally void and subject to collateral attack.
Orbos v. Civil Service Commission does not support the Solicitor General’s withdrawal nor the practice of selectively abandoning cases.
PCGG hiring private lawyers without explicit statutory authority is ultra vires, possibly creating unauthorized public offices and resulting in unlawful expenditure of public funds.
Prohibition is appropriate against both PCGG and Commission on Audit (COA) to prevent unlawful payments for private counsel services.
The petitioner seeks preservation of the status quo via a temporary restraining order.

Respondents' Comments and Arguments

Commission on Audit (COA)

COA has not authorized disbursement for private lawyers’ payment.
Cited COA Circular No. 89-299 withdrawing pre-audit over national agencies, but exercising exclusive authority over audit scope and methods.
Post-audit likewise disallowed funds disbursement for private lawyers.
COA Circular No. 86-255 prohibits government agencies from hiring private counsel without prior written consent of the Solicitor General or Government Corporate Counsel, plus COA concurrence.

Presidential Commission on Good Government (PCGG)

Asserts broad authority under Executive Orders Nos. 1, 2, and 14 to hire private lawyers when necessary for mandate fulfillment, even if not expressly stated.
Interpretation that the power to prosecute cases includes discretion to determine manner and supervision of prosecutions, including private attorneys.
Argues that "assistance of the Office of the Solicitor General" means advisory support, not exclusive control.
Hiring private lawyers is analogous to other professionals engaged (accountants, researchers) and aligns with prior practices in foreign jurisdictions (US, Switzerland).
Hiring private lawyers is not ultra vires but an effective means to exercise powers, especially after OSG’s unilateral withdrawal.
Litigation Division is understaffed and facing well-resourced opponents, necessitating private attorneys.
Attempts to seek support from DOJ and Government Corporate Counsel faced limited response.
PCGG acts as the alter ego of the President in protecting State interests; hence, the Executive branch authorizes hiring private counsel.
Solicitor General’s withdrawal is deemed tacit approval of