PCGG vs.

Sandiganbayan (2005)

Summary Cases:

● PCGG vs. Sandiganbayan, Lucio Tan, et al

Subject: A lawyer shall not, after leaving government service, accept engagement or employment in
connection with any matter in which he had intervened while in said service

Facts:

Former Solicitor General Estelito Mendoza, who has currently resumed the private practice of law, was
sought to be disqualified from representing the Lucio Tan group in the 1987 case involving General Bank
and Trust Company (GENBANK) as one of those properties subject to a writ of sequestration by
Presidential Commission on Good Government (PCGG) being alleged to be part of the ill-gotten wealth
acquired during the Marcos Regime. PCGG claims that there exists an adverse interest on Mendoza
since he was the one who filed a petition praying for assistance and supervision of the court in the
liquidation of GENBANK when he was still a Solicitor General, which bank was subsequently owned by
the Lucio Tan group when it submitted the winning bid. PCGG now invokes Rule 6.03 of the Code of
Professional Responsibility which prohibits former government lawyers from accepting “engagement or
employment in connection with any matter in which he had intervened while in said service.”

Sandiganbayan denied PCGG’s motion and said that it failed to prove the existence of an inconsistency
between Atty. Mendoza’s former function as Solicitor General and his present employment as counsel of
the Lucio Tan group. It also argued that Atty.Mendoza’s appearance as counsel for Tan, et al. is already
beyond the one-year prohibited period under Section 7(b) of Republic Act No. 6713 as he ceased to be
Solicitor General in 1986.

Held:

Rule 6.03 not applicable in the case of Atty. Mendoza

1. Rule 6.03 of the Code of Professional Responsibility (CPR) states that a lawyer shall not, after leaving
government service, accept engagement or employment in connection with any matter in which he had
intervened while in said service.

2. The history of the present Code of Professional Responsibility which reveals that the word “intervene”
is applicable to both adverse interest conflicts and congruent interest conflicts, it has been found that
neither of these conflicts exists in the liquidation case and the sequestration case.

3. The “matter” where he got himself involved was in informing Central Bank on the procedure provided
by law to liquidate GENBANK through the courts and in filing the necessary petition in the then Court of
First Instance. The subject “matter” of the special proceeding, therefore, is not the same nor is related to
but is different from the subject “matter” in the civil case. The civil case involves the sequestration of the
stocks owned by respondents Tan, et al., in Allied Bank on the alleged ground that they are ill-gotten.
The case does not involve the liquidation of GENBANK. Nor does it involve the sale of GENBANK to
Allied Bank. Whether the shares of stock of the reorganized Allied Bank are ill-gotten is far removed from
the issue of the dissolution and liquidation of GENBANK. GENBANK was liquidated by the Central Bank
due, among others, to the alleged banking malpractices of its owners and officers.

4. The petition in the special proceedings is an initiatory pleading, hence, it has to be signed by Atty.
Mendoza as the then sitting Solicitor General. For another, the record failed to specify his actual
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participation in the subsequent proceedings. The petition filed merely seeks the assistance of the court in
the liquidation of GENBANK. The principal role of the court in this type of proceedings is to assist the
Central Bank in determining claims of creditors against the GENBANK.

5. Rule 6.03 represents a commendable effort on the part of the IBP to upgrade the ethics of lawyers in
the government service. The rule was not interpreted to cause a chilling effect on government
recruitment of able legal talent. To make government service more difficult to exit can only make it less
appealing to enter.

6. The Court in interpreting Rule 6.03 was not unconcerned with the prejudice to the client which will be
caused by its misapplication. It cannot be doubted that granting a disqualification motion causes the
client to lose not only the law firm of choice, but probably an individual lawyer in whom the client has
confidence. The effects of this prejudice to the right to choose an effective counsel cannot be overstated
for it can result in denial of due process. It is for these reasons that the petition to disqualify Atty.
Mendoza was denied. The concern however on the need of imposing a prescriptive period and a period
of retroactivity in relation to Rule 6.03 should be addressed by the Integrated Bar of the Philippines (IBP)
and the court’s Committee on Revision of the Rules of Court.

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