PCGG v SANDIGANBAYAN

Facts

 1976: General Bank & Trust Company (Genbank) encountered financial difficulties. Central Bank
extendedloans to Genbank in the hope of rehabilitating it (P310M). Nonetheless, Genbank failed to
recover.
 1977: Genbank was declared insolvent. A public bidding of Genbank’s assets was held with the Lucio
TanGroup winning the bid. Solicitor General Mendoza, representing the government, intervened wit
h the liquidation of Genbank.
 1986: after EDSA I, Cory established the PCGG to recover the ill-gotten wealth of Marcos, his family
and cronies.
 1987: PCGG filed a case against Lucio Tan and certain other people. In relation to this case, PCGG
issued several writs of sequestration on properties allegedly acquired by the respondents by taking
advantage of their close relationship and influence with Marcos. Sandiganbayan heard the case.
 Estelito Mendoza (Solicitor General during the time of Marcos) represented the respondents.
 1991: PCGG filed a motion to disqualify Mendoza, because of his participation in the liquidation
of Genbank. Genbank (now Allied Bank) is one of the properties that PCGG is seeking to
be sequestered from the Lucio Tan group. PCGG invoked Rule 6.03 of the Code of Professional
Responsibility.
 Sandiganbayan denied PCGG’s motion. According to the Sandiganbayan, Mendoza did not take an
adverse position to that taken on behalf of the Central Bank. And Mendoza’s appearance as counsel
was beyond the 1 year prohibitory period since he retired in 1986.

Issue

W/ON Rule 6.03 of the Code of Professional Responsibility applies to Estelito Mendoza

Held

No, it does not apply to Mendoza. Sandiganbayan decision is affirmed.

The matter (see 3rd note), or the act of Mendoza as Solicitor General is advising the Central Bank on how
to proceed with the liquidation of Genbank. This is not the “matter” contemplated by Rule 6.03 of the
Code of Professional Responsibility.

The matter involved in the liquidation of Genbank is entirely different from the matter involved in the
PCGG case against the Lucio Tan group.

The intervention contemplated in Rule 6.03 should be substantial and important. The role of Mendoza in
the liquidation of Genbank is considered insubstantial.

SC is even questioning why PCGG took such a long time to revive the motion to disqualify Mendoza.
Apparently, PCGG already lost a lot of cases against Mendoza. Kyle’s interpretation: PCGG getting
desperate

Something to think about: SC is somehow of the opinion that Rule 6.03 will make it harder for the
government to get good lawyers in the future to work for them because of the prohibition of accepting
cases in the future that were related to one’s work as a government counsel.
Concurring Opinions:

 Panganiban & Carpio: the congruent interest prong of Rule 6.03 should have a prescriptive period
 Tinga: Rule 6.03 cannot apply retroactively to Mendoza (when he was Solicitor General, no Rule 6.03
yet)
 Bottom line, they are all questioning the unfairness of the rule if applied without any prescriptive
period and if applied retroactively

Notes:

 Adverse-interest conflicts – where the matter in which the former government lawyer represents a
client in private practice is substantially related to a matter that the lawyer dealt with while employed
with the government and the interests of the current and former are adverse
 Congruent-interest conflicts – the use of the word “conflict” is a misnomer, it does not involve
conflicts
atall, as it prohibits lawyers from representing a private person even if the interests of the formergo
vernment client and the new client are entirely parallel
 Matter – any discrete, isolatable act as well as identifiable transaction or conduct involving a particular
situation and specific party
 Intervention – interference that may affect the interests of others