PCGG v. Sandiganbayan, G.R. No. GR NOS. 151809-12 dated 12 April 2005
Facts:
in 1976 general bank and Trust Company encountered financial difficulties. Gen. bank had extended considerable
financial support to Filcapital Development Corporation causing it to incur daily overdrawings on its current account
with the central bank. It was later found by the central bank that Genbank had approved various loans to directors,
officers, stockholders and related interests totaling P172.3 million, of which 59% was classified as doubtful and P0.505
million as uncollectible. As a bailout, the central bank extended emergency loans to Gen.bank which reached a
total of P310 million. Genbank failed to recover from its financial woes.
Central bank issued a resolution declaring Genbank insolvent and unable to resume business with safety to its
depositors, creditors and general public , and ordering its liquidation. A public bidding of Genbank’s assets was held
wherein the Lucio tan group submitted the winning bid. Subsequently, former Solicitor General Estelito Mendoza filed
the petition with the court of first instance praying for the assistance and supervision of the court in Genbanks liquidation
as mandated by section 29 on Republic act number 265.
After Edsa revolution I, President Corazon Aquino established the Presidential Commission on Good Governance
(PCGG) to recover the alleged ill-gotten wealth of former President Marcos, his family and cronies. Pursuant to this
mandate, the PCGG filed with the Sandiganbayan a complaint for reversion, reconveyance, restitution,
accounting and damages against Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad P.
Santos, Domingo Chua, Tan Hui Nee, Mariano Tan Eng Lian, Estate of Benito Tan Kee Hiong,
Florencio N. Santos, Jr., Harry C. Tan, Tan Eng Chan, Chung Poe Kee, Mariano Khoo, Manuel
Khoo, Miguel Khoo, Jaime Khoo, Elizabeth Khoo, Celso Ranola, William T. Wong, Ernesto B. Lim,
Benjamin T. Albacita, Willy Co, Allied Banking Corporation (Allied Bank), Allied Leasing and Finance
Corporation, Asia Brewery, Inc., Basic Holdings Corp., Foremost Farms, Inc., Fortune Tobacco
Corporation, Grandspan Development Corp., Himmel Industries, Iris Holdings and Development
Corp., Jewel Holdings, Inc., Manufacturing Services and Trade Corp., Maranaw Hotels and Resort
Corp., Northern Tobacco Redrying Plant, Progressive Farms, Inc., Shareholdings, Inc., Sipalay
Trading Corp., Virgo Holdings & Development Corp., (collectively referred to herein as respondents
Tan, et al.), then President Ferdinand E. Marcos, Imelda R. Marcos, Panfilo O. Domingo, Cesar
Zalamea, Don Ferry and Gregorio Licaros. The case was docketed as Civil Case No. 0005 of the
Second Division of the Sandiganbayan.6 In connection therewith, the PCGG issued several writs of
sequestration on properties allegedly acquired by the above-named persons by taking advantage
of their close relationship and influence with former President Marcos.
In all these cases, respondents Tan, et al. were represented by their counsel, former Solicitor General
Estelito P. Mendoza, who has then resumed his private practice of law. However the pcgg filed motions to
disqualify respondent Mendoza as counsel for respondents. It was alleged that Mendoza, as then Solicitor General and
counsel to central bank actively intervened in the liquidation of GenBank, which was subsequently acquired by
respondents and which subsequently became Allied Banking Corporation. The motions to disqualify invoked rule 6.03
of the code of the professional responsibility which prohibits former government lawyers from accepting
engagement or employment in connection with any matter in which he had intervened while in the said service. The
Sandiganbayan issued a resolution denying PCGG's motion to disqualify or respondents Mendoza. It found that the
PCGG failed to prove the existence of an inconsistency between respondent and losses former function as soldier and
his person employment as council of the luchtan group PCG's records this court assailing the resolutions of this Indian
by it thank you everyone for discussing the facts no the issue of this case is whether or not rule 6.03 of the code of
professional responsibility applies to attorney estelito Mendoza now what is the ruling of the court the court ruled the
case of bar does not involve the adverse interest aspect of rule 6.03 respondent Mendoza is considered has no adverse
interest problem when he acted as solicitor general and later as counsel of respondents Stan at Al before the
sandiganbayan nonetheless
there remains the issue of whether there exists A congruent interest conflict sufficient to disqualify respondent Mendoza
from representing respondents Stan and al the key is unlocking the meaning of matter referred to in the rule and 2nd
limits and bounds of the intervention made by the former government lawyer in the matter the handout therefore the
matter or the act of respondent Mendoza as solicitor general involved in the case of bar is advising the central bank or
how to proceed with the said banks liquidation and even filing the petition for its liquidation with the court of first instance
of Manila furthermore the Supreme Court held that the advice given by respondent Mendoza on the procedure to
liquidate GenBank is not the matter from deflated by rule 6.73 of the code of professional responsibility maybe a formal
opinion number 342 is clear as they light in stressing that that that thing enforcing or interpreting government or agency
procedures regulations are loss of bleeping abstract principles of law are apps which do not fall within the scope of the
their matter and cannot disqualify respondent Mendoza had nothing to do with that decision of the central bank to
liquidate Gen. bank he also did not participate in the sale of GenBank to allied bank the legality of the liquidation of
GenBank is not an issue in the sequestration case indeed did you restriction on the PCG does not include the dissolution
and liquidation of banks that's the code 6.03 of the code of professional responsibility cannot apply to respondent
Mendoza because his alleged intervention while solicitor general is an intervention on a matter different from the matter
involved in the civil case of sequestration in the midst and bounds of the intervention the applicable meaning as the
term is used in the code of professional ethics is that it is an act of a person who has the power to influence the subject
proceedings the evil sought to be remedied by the code to not exist where the government lawyer does not act which
can be considered as innocuous such as drafting enforcing or interpreting government or agency procedures
regulations or laws or briefing abstract principles of law the court rules that the intervention of Mendoza is not significant
and substantial he merely petitions that the court gives assistance in the liquidation of Geneva the role of court is not
strictly as a Court of Justice but as an agent to assist the central bank in determining the claims of the of creditors in
such a proceeding the role of the solicitor general is not that of the usual court litigator protecting the interests of the
government hence the petition assailing the resolutions of the sandiganbayan is denied thank you group miss for all
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