G.R. No. 231765 - Delos Santos vs. People

Case Summary (G.R. No. 231765)

Petitioner

National Power Corporation (NPC), represented by the NPC, which filed a Motion for Inhibition in the RTC and later sought relief by certiorari before the Court of Appeals and ultimately review by the Supreme Court.

Respondent

Atty. Richard B. Rambuyong, sanggunian member (vice-mayor) of the Municipality of Ipil, acting as private counsel for plaintiff Alfredo Y. Chu in Civil Case No. 1-197.

Key Dates

RTC Order denying motion for inhibition: January 4, 2002.
Court of Appeals Decision dismissing certiorari petition: May 20, 2004.
CA Resolution denying reconsideration: April 13, 2005.
Supreme Court decision (granting petition): October 4, 2010.

Applicable Law and Authorities

1987 Constitution (serves as the constitutional framework applicable to cases decided in 1990 or later).
Republic Act No. 7160 (Local Government Code), notably Section 90(a) and (b)(1) (prohibitions on practice of profession by local officials and restriction on sanggunian members who are lawyers appearing as counsel against local government units, offices, agencies, or instrumentalities of the government) and Section 446 (composition of sanggunian). Text of Section 90(b)(1) as cited: sanggunian members who are members of the Bar shall not "Appear as counsel before any court in any civil case wherein a local government unit or any office, agency, or instrumentality of the government is the adverse party."
Administrative Code of 1987, Section 2 (General Terms Defined), including the definition that "agency of the Government" includes "government-owned or controlled corporations" and the specific definition of "Instrumentality" which expressly states that the term includes government-owned or controlled corporations.
Local Government Code, Section 5 (Rules of Interpretation), cited for interpretive principles.
Relevant jurisprudence cited by the Court in the decision: Aparri v. Court of Appeals (statutory construction rule), Maceda v. Macaraig, Jr. (characterization of NPC as government instrumentality), and authorities defining "grave abuse of discretion" (Banal III v. Panganiban; Ferrer v. Office of the Ombudsman).

Factual Background

Chu filed Civil Case No. 1-197 against NPC. Atty. Rambuyong, the vice-mayor of Ipil and a sanggunian member, appeared as counsel for Chu. NPC filed a Motion for Inhibition asserting that under Section 90(b)(1) of RA 7160 sanggunian members who are lawyers are prohibited from appearing as counsel in civil cases where an office, agency, or instrumentality of government is the adverse party. NPC argued that, as a government-owned or controlled corporation, it is an "instrumentality" of the government and therefore that Atty. Rambuyong must inhibit himself.

RTC Ruling

In an Order dated January 4, 2002, the RTC denied NPC’s motion for inhibition. The RTC reasoned that government-owned or controlled corporations were expressly excluded from Section 90(b)(1) of the Local Government Code because other provisions of the Code explicitly use the phrase "including government-owned or controlled corporations" where intended. The trial court concluded that had the framers intended to include GOCCs within Section 90 they would have said so expressly, and that to construe "agency or instrumentality" to include GOCCs would be speculative and unwarranted. The RTC declared that Section 90 does not include GOCCs among the political units that preclude sanggunian lawyer-members from appearing as counsel against them, and that Atty. Rambuyong was not disqualified to continue acting as counsel for the plaintiff. A motion for reconsideration before the RTC was denied.

Court of Appeals Ruling

NPC sought certiorari relief from the CA alleging grave abuse of discretion by the RTC. On May 20, 2004, the CA dismissed the petition for lack of merit, holding that certiorari requires a showing of capricious, arbitrary, or whimsical exercise of power (grave abuse) and that the RTC’s interpretation, even if erroneous, amounted to an error of judgment and not grave abuse. The CA found no proof of caprice or passion in the trial judge’s rulings. NPC’s motion for reconsideration before the CA was denied on April 13, 2005.

Issues Presented

The petition raised five primary contentions, summarized as: (I) The Local Government Code and the Administrative Code require Atty. Rambuyong to inhibit himself; (II) NPC is included in the term "instrumentality" of government; (III) Section 90(b)(1) intends to prevent public officials from representing interests adverse to the government; (IV) prior contrary jurisprudence (Bacani case) is no longer controlling on the meaning of government instrumentalities; and (V) Atty. Rambuyong is the real party in interest. In substance, the central legal question is whether NPC is an "instrumentality of the government" such that Section 90(b)(1) disqualifies a sanggunian member-lawyer from appearing as counsel against it.

Parties’ Contentions

NPC argued that the RTC refused to apply Section 90(b)(1), improperly narrowed the definition of "instrumentality" to exclude GOCCs despite the Administrative Code, and therefore gravely abused its discretion. NPC maintained that NPC, being a government-owned or controlled corporation, plainly falls within the term "instrumentality" and that courts should not read distinctions into a statute where none exist. NPC also argued that the restriction is meant to bar public officials from representing interests adverse to the government. Respondent Atty. Rambuyong contended that the real party who would be benefited or injured by his disqualification was the plaintiff (Chu), and thus the plaintiff, not Rambuyong, is the real party in interest; he argued his inclusion as respondent in the petition was erroneous.

Supreme Court’s Analysis: Statutory Text and Definitions

The Court emphasized the governing statutory provisions. Section 90(b)(1) of RA 7160 unambiguously bars sanggunian members who are attorneys from appearing as counsel in civil cases where "a local government unit or any office, agency, or instrumentality of the government" is the adverse party. The Administrative Code of 1987, Section 2, contains a clear definition: the term "agency of the Government" expressly includes "government-owned or controlled corporations"; and the definition of "Instrumentality" likewise states that it "includes regulatory agencies, chartered institutions and government-owned or controlled corporations." Applying the rule articulated in Aparri v. Court of Appeals, the Court held that where statutory language is plain and unambiguous the court must apply it; there is no room for construction or speculation as to legislative intent beyond the words used.

Supreme Court’s Analysis: NPC as Instrumentality

Given the Administrative Code’s explicit inclusion of government-owned or controlled corporations within the term "instrumentality," and the undisputed fact that NPC is a government-owned or controlled corporation, the Court concluded that NPC

Case Syllabus (G.R. No. 231765)

Title, Citation and Nature of Proceeding

Citation: 646 Phil. 373, First Division; G.R. No. 167810; October 04, 2010.
Nature: Petition for review on certiorari to the Supreme Court assailing the May 20, 2004 Decision and April 13, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72800 which dismissed petitioner’s certiorari petition and denied reconsideration respectively.
Parties: Republic of the Philippines, represented by the National Power Corporation (NPC) as petitioner; Atty. Richard B. Rambuyong (then incumbent Vice-Mayor of Ipil, Zamboanga Sibugay) as respondent.
Panel/Author: Decision by Justice Del Castillo; concurrence by Chief Justice Corona (Chairperson), Justices Velasco, Jr., Leonardo-de Castro, and Perez.

Factual Antecedents

Civil Case No. 1-197: Alfredo Y. Chu filed a case for collection of a sum of money and/or damages against NPC, docketed as Civil Case No. 1-197 and raffled to the Regional Trial Court (RTC) of Ipil, Zamboanga Sibugay, Branch 24.
Representation: Atty. Richard B. Rambuyong appeared as counsel for plaintiff Alfredo Y. Chu; at the time he was the incumbent Vice-Mayor of Ipil and a sanggunian member.
Motion for Inhibition: NPC filed a Motion for Inhibition arguing Section 90(b)(1) of Republic Act No. 7160 (Local Government Code) prohibits sanggunian members who are members of the Bar from appearing as counsel in any civil case wherein “any office, agency or instrumentality of the government is the adverse party.”
NPC’s position: NPC contended that, as a government-owned or controlled corporation, it is embraced within the term “instrumentality.”

Ruling of the Regional Trial Court (RTC)

RTC Order date: January 4, 2002; penned by Judge Demosthenes B. Manginsay.
RTC holding on scope of Sec. 90(b)(1), RA 7160: Government-owned or controlled corporations are expressly excluded from Section 90(b)(1) of the Local Government Code.
RTC reasoning:
- The RTC cited other provisions of the Local Government Code where the phrase “including government-owned or controlled corporations” is explicitly included.
- It held that if the framers of RA 7160 intended to impose obligations or give rights to government-owned or controlled corporations they would have stated so explicitly.
- The RTC warned against construing “agency and instrumentality of the government” to include government-owned or controlled corporations on the basis of presumption, calling such an approach “presumption, baseless conjecture and even absurdity.”
RTC dispositive language (quoted):
- “Sec. 90 of R.A. 7160 does not include government-owned or controlled corporations as among the political units against which lawyer members of the Sanggunian cannot appear as counsel of the adverse party;
- That Atty. Richard B. Rambuyong, who is the incumbent Vice-Mayor of the Municipality of Ipil, Zamboanga Sibugay, is not disqualified to continue acting as counsel for the plaintiff in this case. SO ORDERED.”
Post-order: Petitioner (NPC) filed a motion for reconsideration which the RTC denied.

Proceedings in the Court of Appeals (CA)

Petition to CA: NPC filed a petition for certiorari with the CA alleging grave abuse of discretion by the trial judge in ruling that the statutory prohibition does not apply where the adverse party is a government-owned or controlled corporation.
CA Decision: May 20, 2004 — the CA dismissed the petition for lack of merit.
CA reasoning:
- For certiorari to lie there must be a capricious, arbitrary and whimsical exercise of power; the CA found no showing that the trial judge exercised his power capriciously, arbitrarily and whimsically.
- The CA found no proof the trial judge was motivated by passion or personal hostility towards the petitioner.
- The CA stated that an erroneous interpretation of the law may be attributed to a mere error of judgment, which is not the same as “grave abuse of discretion.”
CA dispositive language (quoted): “WHEREFORE, in view of the foregoing, the instant petition is DISMISSED. SO ORDERED.”
CA denied NPC’s motion for reconsideration (April 13, 2005 Resolution).

Issues Presented to the Supreme Court

Overarching question: Whether the National Power Corporation (NPC) is an “instrumentality of government” such that, under Section 90(b)(1) of RA 7160, Atty. Richard B. Rambuyong as a sanggunian member is disqualified from appearing as counsel against it.
Specific arguments raised by petitioner (NPC):
- I. Both the Local Government Code and the 1987 Administrative Code essentially require Atty. Rambuyong to inhibit himself from acting as counsel against NPC in the proceedings below.
- II. NPC is included in the term “instrumentality” of government.
- III. The prohibition in Section 90(b)(1) of RA 7160 intends to prevent public officials from representing interest adverse to the government.
- IV. Bacani case is no longer the prevailing jurisprudence on the real meaning of government instrumentalities.
- V. Atty. Richard Rambuyong is the real-party-in-interest in the subject petition.
Respondent’s position (Atty. Rambuyong):
- The party who would be benefited or injured by compulsory inhibition is the plaintiff in Civil Case No. 1-197 (Alfredo Y. Chu); consequently, the plaintiff is the real party in interest and Atty. Rambuyong’s inclusion as respondent in the present petition is erroneous.

Relevant Statutory Provisions Quoted and Cited

Section 90, RA 7160 (Local Government Code) — Practice of Profession:
- (a) All governors, city and municipal mayors
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