PCGG vs Sandiganbayan

G.R. No. 151809 April 12, 2005

Facts: On February 1991, former Solicitor General Estelito Mendoza, who has currently resumed the
private practice of law, was sought to be disqualified from representing the Lucia Tan group in the 1987
case involving General Bank and Trust Company (GENBANK) sad on of those properties subject to a writ
of sequestration by PCGG vexing alleges 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 Lucia Tan group when it submitted
the winning bid.

PCGG 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 I which he had
intervened while in said service.”

Sandiganbayan rejects PCGG’s motion by arguing the CGG failed to prove the existence of an inconsistency
between respondent Mendoza’s former function as Solicitor General and his present employment as
counsel of the Lucia 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 Atty. Estelito Mendoza?

Ruling: No. Rule 6.03 of the Code of Professional Responsibility 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 fro 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 and 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 he 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 Alllied 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.