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PCGG V SDB DIGEST
PCGG V SDB DIGEST
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PCGG vs Sandiganbayan, et al
On February 1991, Former Solicitor General Estelito Mendoz, 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 PCGG being alleged to be ill –gotten wealth acquired during the Marcos Regime. It was
averred by the PCGG 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 invokes Rule 6.03of 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 rejects PCGG’s motion by arguing that CGG failed to prove the existence of an
inconsistency between respondent Mendoza’s former function as Sol icitor General and his present
employment as counsel of the Lucio Tan group and that Mendoza’s appearance as counsel for
respondents Tan, et al. was beyond the one-year prohibited period under Section 7(b) of Republic Act
No. 6713 since he ceased to be Solicitor General in the year 1986.
Issue: WON Rule 6.03 of the Code of Professional Responsibility applies to respondent Mendoza
Ruling:
No, Rule 6.03 of the CPR is inapplicable in the case. Rule 6.03 – 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. The motion for disqualification should be dismissed for the following
reasons:
1) After discussing the history of the present Code of Professional Responsibility which revealed
that the word “intervene” is applicable to both adverse interest conflicts a nd congruent interest
conflicts, it has been found that neither of these conflicts exists in the liquidation case and the
sequestration case.
2) The legality of the liquidation of GENBANK is not an issue in the sequestration cases.
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.
3) Mendoza’s intervention in the liquidation of Genbank is not substantial and significant to warrant
disqualification.
The petition in the special proceedings is an initiatory pleading, hence, it has to be signed by
respondent Mendoza as the then sitting Solicitor General. For another, the record is arid as to
the actual participation of respondent Mendoza in the subsequent proceedings. Moreover, 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.
It is worthy to note that in construing the words of such rule in this case, the Court balanced the two policy
considerations of having a chilling effect on government recruitment of able legal talent and the
use of former government employment as a litigation tactic to harass opposing counsel.