CANON 6 Regional Trial Court of Makati, Branch 146, receives the revenues therefrom which are not

RULE 6.03 respondent who had since left the employ of shared among them.
complainant bank, appeared as one of the counsels
A.C. No. 3701 March 28, 1995 of Mrs. Ong Siy. In the resolution of this Court dated January 27,
1992, this case was referred to the Integrated Bar
PHILIPPINE NATIONAL BANK, complainant, Similarly, when the same transaction became the of the Philippines (IBP), for investigation, report
vs. subject of an administrative case filed by and recommendation.
ATTY. TELESFORO S. CEDO, respondent. complainant bank against his former subordinate
Emmanuel Elefan, for grave misconduct and During the investigation conducted by the IBP, it
dishonesty, respondent appeared as counsel for was discovered that respondent was previously
RESOLUTION
Elefan only to be later disqualified by the Civil fined by this Court in the amount of P1,000.00 in
Service Commission. connection with G.R. No. 94456 entitled "Milagros
Ong Siy vs. Hon. Salvador Tensuan, et al." for
BIDIN, J.:
Moreover, while respondent was still the Asst. Vice forum shopping, where respondent appeared as
President of complainant’s Asset Management counsel for petitioner Milagros Ong Siy "through
In a verified letter-complaint dated August 15, Group, he intervened in the handling of the loan the law firm of Cedo Ferrer Maynigo and
1991, complainant Philippine National Bank account of the spouses Ponciano and Eufemia Associates."
charged respondent Atty. Telesforo S. Cedo, former Almeda with complainant bank by writing demand
Asst. Vice-President of the Asset Management letters to the couple. When a civil action ensued The IBP further found that the charges herein
Group of complainant bank with violation of Canon between complainant bank and the Almeda spouses against respondent were fully substantiated.
6, Rule 6.03 of the Code of Professional as a result of this loan account, the latter were Respondent's averment that the law firm handling
Responsibility, thus: represented by the law firm "Cedo, Ferrer, the case of the Almeda spouses is not a partnership
Maynigo & Associates" of which respondent is one deserves scant consideration in the light of the
A lawyer shall not, after leaving of the Senior Partners. attestation of complainant's counsel, Atty. Pedro
government service, accept Singson, that in one of the hearings of the Almeda
engagement or employment in In his Comment on the complaint, respondent spouses' case, respondent attended the same with
connection with any matter in which admitted that he appeared as counsel for Mrs. Ong his partner Atty. Ferrer, and although he did not
he had intervened while in said Siy but only with respect to the execution pending enter his appearance, he was practically dictating
service. appeal of the RTC decision. He alleged that he did to Atty. Ferrer what to say and argue before the
not participate in the litigation of the case before court. Furthermore, during the hearing of the
by appearing as counsel for individuals who had the trial court. With respect to the case of the application for a writ of injunction in the same
transactions with complainant bank in which Almeda spouses, respondent alleged that he never case, respondent impliedly admitted being the
respondent during his employment with aforesaid appeared as counsel for them. He contended that partner of Atty. Ferrer, when it was made of record
bank, had intervened. while the law firm "Cedo Ferrer, Maynigo & that respondent was working in the same office as
Associates" is designated as counsel of record, the Atty. Ferrer.
Complainant averred that while respondent was case is actually handled only by Atty. Pedro Ferrer.
still in its employ, he participated in arranging the Respondent averred that he did not enter into a Moreover, the IBP noted that assuming the alleged
sale of steel sheets (denominated as Lots 54-M and general partnership with Atty. Pedro Ferrer nor set-up of the firm is true, it is in itself a violation of
55-M) in favor of Milagros Ong Siy for P200,000. with the other lawyers named therein. They are the Code of Professional Responsibility (Rule
He even "noted" the gate passes issued by his only using the aforesaid name to designate a law 15.02) since the client’s secrets and confidential
subordinate, Mr. Emmanuel Elefan, in favor of Mrs. firm maintained by lawyers, who although not records and information are exposed to the other
Ong Siy authorizing the pull-out of the steel sheets partners, maintain one office as well as one clerical lawyers and staff members at all times.
from the DMC Man Division Compound. When a and supporting staff. Each one of them handles
civil action arose out of this transaction between their own cases independently and individually From the foregoing, the IBP found a deliberate
Mrs. Ong Siy and complainant bank before the intent on the part of respondent to devise ways and
means to attract as clients former borrowers of was later litigated in the forcible policy, of good taste. As has been
complainant bank since he was in the best position entry case, for it was the dispute said in another case, the question is
to see the legal weaknesses of his former employer, over the land that triggered the not necessarily one of the rights of
a convincing factor for the said clients to seek his mauling incident which gave rise to the parties, but as to whether the
professional service. In sum, the IBP saw a the criminal action for physical attorney has adhered to proper
deliberate sacrifice by respondent of his ethics in injuries. This Court's remarks professional standard. With these
consideration of the money he expected to earn. in Hilado vs. David, 84 Phil. 571, are thoughts in mind, it behooves
apropos: attorney, like Caesar's wife, not only
The IBP thus recommended the suspension of to keep inviolate the client's
respondent from the practice of law for 3 years. "Communications between attorney confidence, but also to avoid the
and client are, in a great number of appearance of treachery and double
The records show that after the Board of Governors litigations, a complicated affair, dealing. Only thus can litigants. be
of the IBP had, on October 4, 1994, submitted to consisting of entangled relevant and encouraged to entrust their secrets
this Court its Report and recommendation in this irrelevant, secret and well-known to their attorneys which is of
case, respondent filed a Motion for Reconsideration facts. In the complexity of what is paramount importance in the
dated October 25, 1994 of the recommendation said in the course of dealings administration of justice.
contained in the said Report with the IBP Board of between an attorney and client,
Governors. On December 12, 1994, respondent also inquiry of the nature suggested The foregoing disquisition on conflicting interest
filed another "Motion to Set Hearing" before this would lead to the revelation, in applies with equal force and effect to respondent in
Court, the aforesaid Motion for Reconsideration. In advance of the trial, of other matters the case at bar. Having been an executive of
resolving this case, the Court took into that might only further prejudice the complainant bank, respondent now seeks to litigate
consideration the aforesaid pleadings. complainant's cause." as counsel for the opposite side, a case against his
former employer involving a transaction which he
In addition to the findings of the IBP, this Court Whatever may be said as to whether formerly handled while still an employee of
finds this occasion appropriate to emphasize the or not respondent utilized against his complainant, in violation of Canon 6 of the Canons
paramount importance of avoiding the former client information given to of Professional Ethics on adverse influence and
representation of conflicting interests. In the him in a professional capacity, the conflicting interests, to wit:
similar case of  Pasay Law and Conscience Union, mere fact of their previous
Inc. vs. Paz, (95 SCRA 24 [1980]) where a former relationship should have precluded It is unprofessional to represent
Legal Officer and Legal Prosecutor of PARGO who him from appearing as counsel for conflicting interests, except by
participated in the investigation of the Anti-Graft the other side in the forcible entry express conflicting consent of all
case against Mayor Pablo Cuneta later on acted as case. In the case of Hilado vs. David, concerned given after a full
counsel for the said Mayor in the same anti-graft supra, this Tribunal further said: disclosure of the facts. Within the
case, this Court, citing Nombrado vs. meaning of this canon, a lawyer
Hernandez (26 SCRA 13 119681) ruled: Hence the necessity of setting the represents conflicting interest when,
existence of the bare relationship of in behalf on one client, it is his duty
The Solicitor General is of the attorney and client as the yardstick to contend for that which duty to
opinion, and we find no reason to for testing incompatibility of another client requires him to
disagree with him, that even if interests. This stern rule is designed oppose.
respondent did not use against his not alone to prevent the dishonest
client any information or evidence practitioner from fraudulent conduct, ACCORDINGLY, this Court resolves to SUSPEND
acquired by him as counsel it cannot but as well to protect the honest respondent ATTY. TELESFORO S. CEDO from the
be denied that he did become privy lawyer from unfounded suspicion of practice of law for THREE (3) YEARS, effective
to information regarding the unprofessional practice. . . . It is immediately.
ownership of the parcel of land which founded on principles of public
Let copies of this resolution be furnished the despite the fact that he presided over the employment in connection with any matter
Integrated Bar of the Philippines and all courts in conciliation proceedings between the litigants in which he intervened while in said service.
Metro Manila. as punong barangay.
Furthermore, as an elective official, respondent
SO ORDERED. In his defense, respondent claimed that one of his contravened the prohibition under Section 7(b)(2)
duties as punong barangay was to hear complaints of RA 6713:8
A.C. No. 5738             February 19, 2008 referred to the barangay's Lupong Tagapamayapa.
As such, he heard the complaint of Regina and SEC. 7. Prohibited Acts and Transactions. -
WILFREDO M. CATU, complainant, Antonio against Elizabeth and Pastor. As head of In addition to acts and omissions of public
vs. the Lupon, he performed his task with utmost officials and employees now prescribed in
objectivity, without bias or partiality towards any of the Constitution and existing laws, the
ATTY. VICENTE G. RELLOSA, respondent.
the parties. The parties, however, were not able to following shall constitute prohibited acts
amicably settle their dispute and Regina and and transactions of any public official ands
RESOLUTION Antonio filed the ejectment case. It was then that employee and are hereby declared to be
Elizabeth sought his legal assistance. He acceded unlawful:
CORONA, J.: to her request. He handled her case for free
because she was financially distressed and he xxx       xxx       xxx
Complainant Wilfredo M. Catu is a co-owner of a wanted to prevent the commission of a patent
lot1 and the building erected thereon located at 959 injustice against her.
(b) Outside employment and other activities
San Andres Street, Malate, Manila. His mother and
related thereto. - Public officials and
brother, Regina Catu and Antonio Catu, contested The complaint was referred to the Integrated Bar employees during their incumbency shall
the possession of Elizabeth C. Diaz-Catu 2 and of the Philippines (IBP) for investigation, report not:
Antonio Pastor3 of one of the units in the building. and recommendation. As there was no factual issue
The latter ignored demands for them to vacate the to thresh out, the IBP's Commission on Bar
premises. Thus, a complaint was initiated against Discipline (CBD) required the parties to submit xxx       xxx       xxx
them in the Lupong Tagapamayapa  of Barangay their respective position papers. After evaluating
723, Zone 79 of the 5th District of Manila4 where the contentions of the parties, the IBP-CBD found (2) Engage in the private practice
the parties reside. sufficient ground to discipline respondent.7 of profession unless authorized
by the Constitution or law,
Respondent, as punong barangay of Barangay 723, According to the IBP-CBD, respondent admitted provided that such practice will not
summoned the parties to conciliation that, as punong barangay, he presided over the conflict or tend to conflict with their
meetings.5 When the parties failed to arrive at an conciliation proceedings and heard the complaint official functions; xxx (emphasis
amicable settlement, respondent issued a of Regina and Antonio against Elizabeth and supplied)
certification for the filing of the appropriate action Pastor. Subsequently, however, he represented
in court. Elizabeth and Pastor in the ejectment case filed According to the IBP-CBD, respondent's violation of
against them by Regina and Antonio. In the course this prohibition constituted a breach of Canon 1 of
Thereafter, Regina and Antonio filed a complaint thereof, he prepared and signed pleadings the Code of Professional Responsibility:
for ejectment against Elizabeth and Pastor in the including the answer with counterclaim, pre-trial
Metropolitan Trial Court of Manila, Branch 11. brief, position paper and notice of appeal. By so CANON 1. A LAWYER SHALL UPHOLD THE
Respondent entered his appearance as counsel for doing, respondent violated Rule 6.03 of the Code of CONSTITUTION, OBEY THE LAWS OF
the defendants in that case. Because of this, Professional Responsibility: THE LAND, PROMOTE RESPECT FOR
complainant filed the instant administrative LAW AND LEGAL PROCESSES. (emphasis
complaint,6 claiming that respondent committed an Rule 6.03 - A lawyer shall not, after leaving supplied)
act of impropriety as a lawyer and as a public government service, accept engagement or
officer when he stood as counsel for the defendants
For these infractions, the IBP-CBD recommended For elective local government officials, Section 90 That the officials concerned do not derive
the respondent's suspension from the practice of of RA 716012 governs: monetary compensation therefrom.
law for one month with a stern warning that the
commission of the same or similar act will be dealt SEC. 90. Practice of Profession. - (a) All This is a special provision that applies specifically
with more severely.9 This was adopted and governors, city and municipal mayors are to the practice of profession by elective local
approved by the IBP Board of Governors.10 prohibited from practicing their profession officials. As a special law with a definite scope (that
or engaging in any occupation other than is, the practice of profession by elective local
We modify the foregoing findings regarding the the exercise of their functions as local chief officials), it constitutes an exception to Section 7(b)
transgression of respondent as well as the executives. (2) of RA 6713, the general law on engaging in the
recommendation on the imposable penalty. private practice of profession by public officials and
(b)  Sanggunian  members may practice their employees. Lex specialibus derogat generalibus.13
Rule 6.03 of the Code of Professional professions, engage in any occupation, or
Responsibility Applies Only to Former teach in schools except during session Under RA 7160, elective local officials of provinces,
Government Lawyers hours: Provided, That sanggunian members cities, municipalities and barangays are the
who are members of the Bar shall not: following: the governor, the vice governor and
Respondent cannot be found liable for violation of members of the sangguniang panlalawigan for
Rule 6.03 of the Code of Professional (1) Appear as counsel before any provinces; the city mayor, the city vice mayor and
Responsibility. As worded, that Rule applies only to court in any civil case wherein a local the members of the sangguniang panlungsod for
a lawyer who has left government service and in government unit or any office, cities; the municipal mayor, the municipal vice
connection "with any matter in which he intervened agency, or instrumentality of the mayor and the members of the sangguniang
while in said service." In PCGG v. government is the adverse party; bayan for municipalities and the punong barangay,
Sandiganbayan,11 we ruled that Rule the members of the sangguniang barangay and the
6.03 prohibits former government lawyers from (2) Appear as counsel in any criminal members of the sangguniang kabataan for
accepting "engagement or employment in case wherein an officer or employee barangays.
connection with any matter in which [they] had of the national or local government is
intervened while in said service." accused of an offense committed in Of these elective local officials, governors, city
relation to his office; mayors and municipal mayors are prohibited from
Respondent was an incumbent punong barangay at practicing their profession or engaging in any
the time he committed the act complained of. (3) Collect any fee for their occupation other than the exercise of their
Therefore, he was not covered by that provision. appearance in administrative functions as local chief executives. This is because
proceedings involving the local they are required to render full time service. They
government unit of which he is an should therefore devote all their time and attention
Section 90 of RA 7160, Not Section 7(b)(2) of
official; and to the performance of their official duties.
RA 6713, Governs The Practice of Profession
of Elective Local Government Officials
(4) Use property and personnel of the On the other hand, members of the sangguniang
Government except when panlalawigan, sangguniang
Section 7(b)(2) of RA 6713 prohibits public officials
the sanggunian member concerned is panlungsod or sangguniang bayan may practice
and employees, during their incumbency, from
defending the interest of the their professions, engage in any occupation, or
engaging in the private practice of their profession
Government. teach in schools except during session hours. In
"unless authorized by the Constitution or law,
other words, they may practice their professions,
provided that such practice will not conflict or tend
engage in any occupation, or teach in schools
to conflict with their official functions." This is the (c) Doctors of medicine may practice their outside their session hours. Unlike governors, city
general law which applies to all public officials and profession even during official hours of work mayors and municipal mayors, members of
employees. only on occasions of emergency: Provided, the sangguniang panlalawigan, sangguniang
panlungsod or sangguniang bayan are required to
hold regular sessions only at least once a with any commercial, credit, agricultural, or which is a breach of Rule 1.01 of the Code of
week.14 Since the law itself grants them the industrial undertaking without a written Professional Responsibility:
authority to practice their professions, engage in permission from the head of the
any occupation or teach in schools outside session Department: Provided, That this Rule 1.01 - A lawyer shall not engage in
hours, there is no longer any need for them to prohibition will be absolute in the case of unlawful, dishonest, immoral or
secure prior permission or authorization from any those officers and employees whose duties deceitful conduct. (emphasis supplied)
other person or office for any of these purposes. and responsibilities require that their entire
time be at the disposal of the For not living up to his oath as well as for not
While, as already discussed, certain local elective Government; Provided, further, That if an complying with the exacting ethical standards of
officials (like governors, mayors, provincial board employee is granted permission to engage the legal profession, respondent failed to comply
members and councilors) are expressly subjected in outside activities, time so devoted outside with Canon 7 of the Code of Professional
to a total or partial proscription to practice their of office hours should be fixed by the agency Responsibility:
profession or engage in any occupation, no such to the end that it will not impair in any way
interdiction is made on the punong barangay and the efficiency of the officer or employee:
And provided, finally, that no permission is CANON 7. A LAWYER SHALL AT ALL
the members of the sangguniang
necessary in the case of investments, made TIMES UPHOLD THE INTEGRITY AND
barangay. Expressio unius est exclusio
by an officer or employee, which do not THE DIGNITY OF THE LEGAL
alterius.15 Since they are excluded from any
involve real or apparent conflict between his PROFESSION AND SUPPORT THE
prohibition, the presumption is that they are
private interests and public duties, or in any ACTIVITIES OF THE INTEGRATED BAR.
allowed to practice their profession. And this
way influence him in the discharge of his (emphasis supplied)
stands to reason because they are not mandated to
serve full time. In fact, the sangguniang duties, and he shall not take part in the
barangay is supposed to hold regular sessions only management of the enterprise or become an Indeed, a lawyer who disobeys the law disrespects
twice a month.16 officer of the board of directors. (emphasis it. In so doing, he disregards legal ethics and
supplied) disgraces the dignity of the legal profession.
Accordingly, as punong barangay, respondent was
not forbidden to practice his profession. However, As punong barangay, respondent should have Public confidence in the law and in lawyers may be
he should have procured prior permission or therefore obtained the prior written permission of eroded by the irresponsible and improper conduct
authorization from the head of his Department, as the Secretary of Interior and Local Government of a member of the bar.18 Every lawyer should act
required by civil service regulations. before he entered his appearance as counsel for and comport himself in a manner that promotes
Elizabeth and Pastor. This he failed to do. public confidence in the integrity of the legal
profession.19
A Lawyer In Government Service Who Is Not
Prohibited To Practice Law Must Secure Prior The failure of respondent to comply with Section
Authority From The Head Of His Department 12, Rule XVIII of the Revised Civil Service Rules A member of the bar may be disbarred or
constitutes a violation of his oath as a lawyer: to suspended from his office as an attorney for
obey the laws. Lawyers are servants of the violation of the lawyer's oath 20 and/or for breach of
A civil service officer or employee whose
law, vires legis, men of the law. Their paramount the ethics of the legal profession as embodied in
responsibilities do not require his time to be fully
duty to society is to obey the law and promote the Code of Professional Responsibility.
at the disposal of the government can engage in
the private practice of law only with the written respect for it. To underscore the primacy and
permission of the head of the department importance of this duty, it is enshrined as the first WHEREFORE, respondent Atty. Vicente G. Rellosa
concerned.17 Section 12, Rule XVIII of the Revised canon of the Code of Professional Responsibility. is hereby found GUILTY of professional
Civil Service Rules provides: misconduct for violating his oath as a lawyer and
In acting as counsel for a party without first Canons 1 and 7 and Rule 1.01 of the Code of
securing the required written permission, Professional Responsibility. He is
Sec. 12. No officer or employee shall
respondent not only engaged in the unauthorized therefore SUSPENDED from the practice of
engage directly in any private business,
practice of law but also violated civil service rules law for a period of six months effective from his
vocation, or profession or be connected
receipt of this resolution. He is TOBACCO CORP., GRANDSPAN 28, 1977, wherein the Lucio Tan group submitted
sternly WARNED that any repetition of similar acts DEVELOPMENT CORP., HIMMEL the winning bid.5 Subsequently, former Solicitor
shall be dealt with more severely. INDUSTRIES, IRIS HOLDINGS AND General Estelito P. Mendoza filed a
DEVELOPMENT CORP., JEWEL HOLDINGS, petition with the then Court of First
Respondent is strongly advised to look up and take INC., MANUFACTURING SERVICES AND Instance praying for the assistance and
to heart the meaning of the word delicadeza. TRADE CORP., MARANAW HOTELS AND supervision of the court in GENBANK's liquidation
RESORT CORP., NORTHERN TOBACCO as mandated by Section 29 of Republic Act No.
Let a copy of this resolution be furnished the Office REDRYING PLANT, PROGRESSIVE FARMS, 265.
of the Bar Confidant and entered into the records INC., SHAREHOLDINGS, INC., SIPALAY
of respondent Atty. Vicente G. Rellosa. The Office TRADING CORP., VIRGO HOLDINGS & In February 1986, the EDSA I revolution toppled
of the Court Administrator shall furnish copies to DEVELOPMENT CORP., and ATTY. ESTELITO the Marcos government. One of the first acts of
all the courts of the land for their information and P. MENDOZA, Respondents. President Corazon C. Aquino was to establish the
guidance. Presidential Commission on Good Government
DECISION (PCGG) to recover the alleged ill-gotten wealth of
SO ORDERED. former President Ferdinand Marcos, his family and
PUNO, J.: his cronies. Pursuant to this mandate, the PCGG,
on July 17, 1987, filed with the Sandiganbayan a
complaint for 'reversion, reconveyance,
This case is prima impressiones and it is weighted
restitution, accounting and damages against
with significance for it concerns on one hand, the
respondents Lucio Tan, Carmen Khao Tan,
efforts of the Bar to upgrade the ethics of lawyers
Florencio T. Santos, Natividad P. Santos, Domingo
in government service and on the other, its effect
Chua, Tan Hui Nee, Mariano Tan Eng Lian, Estate
on the right of government to recruit competent
of Benito Tan Kee Hiong, Florencio N. Santos, Jr.,
counsel to defend its interests.
EN BANC Harry C. Tan, Tan Eng Chan, Chung Poe Kee,
Mariano Khoo, Manuel Khoo, Miguel Khoo, Jaime
In 1976, General Bank and Trust Company Khoo, Elizabeth Khoo, Celso Ranola, William T.
[G.R. NOS. 151809-12. April 12, 2005] (GENBANK) encountered financial difficulties. Wong, Ernesto B. Lim, Benjamin T. Albacita, Willy
GENBANK had extended considerable financial Co, Allied Banking Corporation (Allied Bank), Allied
PRESIDENTIAL COMMISSION ON GOOD support to Filcapital Development Corporation Leasing and Finance Corporation, Asia Brewery,
GOVERNMENT causing it to incur daily overdrawings on its Inc., Basic Holdings Corp., Foremost Farms, Inc.,
(PCGG), Petitioner, v. SANDIGANBAYAN (Fifth current account with the Central Bank. 1 It was Fortune Tobacco Corporation, Grandspan
Division), LUCIO C. TAN, CARMEN KHAO later found by the Central Bank that GENBANK Development Corp., Himmel Industries, Iris
TAN, FLORENCIO T. SANTOS, NATIVIDAD P. had approved various loans to directors, officers, Holdings and Development Corp., Jewel Holdings,
SANTOS, DOMINGO CHUA, TAN HUI NEE, stockholders and related interests totaling P172.3 Inc., Manufacturing Services and Trade Corp.,
MARIANO TAN ENG LIAN, ESTATE OF million, of which 59% was classified as doubtful Maranaw Hotels and Resort Corp., Northern
BENITO TAN KEE HIONG (represented by and P0.505 million as uncollectible. 2 As a Tobacco Redrying Plant, Progressive Farms, Inc.,
TARCIANA C. TAN), FLORENCIO N. SANTOS, bailout, the Central Bank extended emergency Shareholdings, Inc., Sipalay Trading Corp., Virgo
JR., HARRY C. TAN, TAN ENG CHAN, CHUNG loans to GENBANK which reached a total Holdings & Development Corp., (collectively
POE KEE, MARIANO KHOO, MANUEL KHOO, of P310 million.3 Despite the mega loans, referred to herein as respondents Tan, et al.), then
MIGUEL KHOO, JAIME KHOO, ELIZABETH GENBANK failed to recover from its financial woes. President Ferdinand E. Marcos, Imelda R. Marcos,
KHOO, CELSO RANOLA, WILLIAM T. WONG, On March 25, 1977, the Central Bank issued a Panfilo O. Domingo, Cesar Zalamea, Don Ferry and
ERNESTO B. LIM, BENJAMIN T. ALBACITA, resolution declaring GENBANK insolvent and Gregorio Licaros. The case was docketed as
WILLY CO, ALLIED BANKING CORP., ALLIED unable to resume business with safety to its Civil Case No. 0005 of the Second Division of
LEASING AND FINANCE CORPORATION, ASIA depositors, creditors and the general public, the Sandiganbayan.6 In connection therewith, the
BREWERY, INC., BASIC HOLDINGS CORP., and ordering its liquidation.4 A public bidding PCGG issued several writs of sequestration on
FOREMOST FARMS, INC., FORTUNE of GENBANK's assets was held from March 26 to properties allegedly acquired by the above-named
persons by taking advantage of their close On April 22, 1991 the Second Division of discretion amounting to lack or excess of
relationship and influence with former President the Sandiganbayan issued a jurisdiction in issuing the assailed resolutions
Marcos. resolution denying PCGG's motion to disqualify contending that: 1) Rule 6.03 of the Code of
respondent Mendoza in Civil Case No. 0005. 11 It Professional Responsibility prohibits a former
Respondents Tan, et al. repaired to this Court and found that the PCGG failed to prove the existence government lawyer from accepting employment in
filed petitions for certiorari, prohibition and of an inconsistency between respondent Mendoza's connection with any matter in which he intervened;
injunction to nullify, among others, the writs of former function as Solicitor General and his 2) the prohibition in the Rule is not time-bound; 3)
sequestration issued by the PCGG.7 After the filing present employment as counsel of the Lucio Tan that Central Bank could not waive the objection to
of the parties' comments, this Court referred the group. It noted that respondent Mendoza did not respondent Mendoza's appearance on behalf of the
cases to the Sandiganbayan for proper take a position adverse to that taken on behalf of PCGG; and 4) the resolution in Civil Case No. 0005
disposition. These cases were docketed as Civil the Central Bank during his term as Solicitor was interlocutory, thus res judicata does not
Case Nos. 0096-0099. In all these cases, General.12 It further ruled that respondent apply.19 ςrνll
respondents Tan, et al. were represented by their Mendoza's appearance as counsel for respondents
counsel, former Solicitor General Estelito P. Tan, et al. was beyond the one-year prohibited The petition at bar raises procedural and
Mendoza, who has then resumed his private period under Section 7(b) of Republic Act No. 6713 substantive issues of law. In view, however, of the
practice of law. since he ceased to be Solicitor General in the year import and impact of Rule 6.03 of the Code of
1986. The said section prohibits a former public Professional Responsibility to the legal profession
On February 5, 1991, the PCGG filed motions to official or employee from practicing his profession and the government, we shall cut our way and
disqualify respondent Mendoza as counsel for in connection with any matter before the office he forthwith resolve the substantive issue.
used to be with within one year from his
respondents Tan, et al. with the Second Division
resignation, retirement or separation from public I
of the Sandiganbayan in Civil Case Nos.
office.13 The PCGG did not seek any reconsideration
00058 and 0096-0099.9 The motions alleged that
of the ruling.14 ςrνll
respondent Mendoza, as then Solicitor Substantive Issue
General10 and counsel to Central Bank, 'actively
intervened in the liquidation of GENBANK, which It appears that Civil Case Nos. 0096-0099
were transferred from The key issue is whether Rule 6.03 of the Code of
was subsequently acquired by respondents Tan, et Professional Responsibility applies to respondent
al. and became Allied Banking Corporation. the Sandiganbayan's Second Division to the Fifth
Division.15 In its resolution dated July 11, 2001, the Mendoza. Again, the prohibition states: 'A lawyer
Respondent Mendoza allegedly 'intervened in the shall not, after leaving government service, accept
acquisition of GENBANK by respondents Tan, et al. Fifth Division of the Sandiganbayan denied the
other PCGG's motion to disqualify respondent engagement or employment in connection with
when, in his capacity as then Solicitor General, any matter in which he had intervened while in
he advised the Central Bank's officials on Mendoza.16 It adopted the resolution of its Second
the said service.
the procedure to bring about GENBANK's Division dated April 22, 1991, and observed that
liquidation and appeared as counsel for the Central the arguments were the same in substance as the
motion to disqualify filed in Civil Case No. 0005. I.A. The history of Rule 6.03
Bank in connection with its petition for assistance
in the liquidation of GENBANK which he filed with The PCGG sought reconsideration of the ruling but
the Court of First Instance (now Regional Trial its motion was denied in its resolution dated A proper resolution of this case necessitates that
Court) of and was docketed as Special Proceeding December 5, 2001.17 ςrνll we trace the historical lineage of Rule 6.03 of the
No. 107812. The motions to disqualify Code of Professional Responsibility.
invoked Rule 6.03 of the Code of Professional Hence, the recourse to this Court by the PCGG
Responsibility. Rule 6.03 prohibits former assailing the resolutions dated July 11, 2001 and In the seventeenth and eighteenth centuries,
government lawyers from accepting 'engagement December 5, 2001 of the Fifth Division of ethical standards for lawyers were pervasive
or employment in connection with any matter in the Sandiganbayan via a Petition in England and other parts of Europe. The early
which he had intervened while in said service. for Certiorari and prohibition under Rule 65 of the statements of standards did not resemble modern
1997 Rules of Civil Procedure. 18 The PCGG alleged codes of conduct. They were not detailed or
that the Fifth Division acted with grave abuse of collected in one source but surprisingly were
comprehensive for their time. The principal thrust David Hoffman and George Sharswood, and many the late nineteenth century, bar associations began
of the standards was directed towards the litigation other lawyers were working to flesh out the broad to form again, picking up where their colonial
conduct of lawyers. It underscored the central duty outline of a lawyer's duties. These reformers wrote predecessors had left off. Many of the new bar
of truth and fairness in litigation as superior to any about legal ethics in unprecedented detail and thus associations, most notably the Alabama State Bar
obligation to the client. The formulations of the brought a new level of understanding to a lawyer's Association and the American Bar Association,
litigation duties were at times intricate, including duties. A number of mid-nineteenth century laws assumed on the task of drafting substantive
specific pleading standards, an obligation to inform and statutes, other than the Field Code, governed standards of conduct for their members.22 ςrνll
the court of falsehoods and a duty to explore lawyer behavior. A few forms of colonial
settlement alternatives. Most of the lawyer's other regulations - e.g., the 'do no falsehood oath and the In 1887, Alabama became the first state with a
basic duties -- competency, diligence, loyalty, deceit prohibitions -- persisted in some states. comprehensive bar association code of ethics. The
confidentiality, reasonable fees and service to the Procedural law continued to directly, or indirectly, 1887 Alabama Code of Ethics was the model for
poor -- originated in the litigation context, but limit an attorney's litigation behavior. The several states' codes, and it was the foundation for
ultimately had broader application to all aspects of developing law of agency recognized basic duties the American Bar Association's (ABA) 1908 Canons
a lawyer's practice. of competence, loyalty and safeguarding of client of Ethics.23 ςrνll
property. Evidence law started to recognize with
The forms of lawyer regulation in colonial and less equivocation the attorney-client privilege and In 1917, the Philippine Bar found that the oath
early post-revolutionary America did not differ its underlying theory of confidentiality. Thus, all of and duties of a lawyer were insufficient to attain
markedly from those in England. The colonies and the core duties, with the likely exception of service the full measure of public respect to which the
early states used oaths, statutes, judicial oversight, to the poor, had some basis in formal law. Yet, as in legal profession was entitled. In that year, the
and procedural rules to govern attorney behavior. the colonial and early post-revolutionary periods, Philippine Bar Association adopted as its own,
The difference from England was in the these standards were isolated and did not provide a Canons 1 to 32 of the ABA Canons of Professional
pervasiveness and continuity of such regulation. comprehensive statement of a lawyer's duties. The Ethics.24 ςrνll
The standards set in England varied over time, but reformers, by contrast, were more comprehensive
the variation in early America was far greater. The in their discussion of a lawyer's duties, and they
actually ushered a new era in American legal As early as 1924, some ABA members have
American regulation fluctuated within a single questioned the form and function of the canons.
colony and differed from colony to colony. Many ethics.21 ςrνll
Among their concerns was the 'revolving door or
regulations had the effect of setting some 'the process by which lawyers and others
standards of conduct, but the regulation was Toward the end of the nineteenth century, a temporarily enter government service from private
sporadic, leaving gaps in the substantive new form of ethical standards began to guide life and then leave it for large fees in private
standards. Only three of the traditional core duties lawyers in their practice - the bar association code practice, where they can exploit information,
can be fairly characterized as pervasive in the of legal ethics. The bar codes were detailed ethical contacts, and influence garnered in government
formal, positive law of the colonial and post- standards formulated by lawyers for lawyers. They service.25 These concerns were classified
revolutionary period: the duties of litigation combined the two primary sources of ethical
as adverse-interest conflicts' and 'congruent-
fairness, competency and reasonable fees.20 ςrνll guidance from the nineteenth century. Like the
interest conflicts. 'Adverse-interest
academic discourses, the bar association codes
conflicts' exist where the matter in which the
The nineteenth century has been termed the gave detail to the statutory statements of duty and
former government lawyer represents a client in
'dark ages' of legal ethics in the United States. the oaths of office. Unlike the academic lectures,
private practice is substantially related to a matter
By mid-century, American legal reformers were however, the bar association codes retained some
that the lawyer dealt with while employed by the
filling the void in two ways. First, David Dudley of the official imprimatur of the statutes and oaths.
government and the interests of the current and
Field, the drafter of the highly influential New York Over time, the bar association codes became
former are adverse.26 On the other hand,
'Field Code, introduced a new set of uniform extremely popular that states adopted them as
'congruent-interest representation
standards of conduct for lawyers. This concise binding rules of law. Critical to the development of
conflicts' are unique to government lawyers and
statement of eight statutory duties became law in the new codes was the re-emergence of bar
apply primarily to former government
several states in the second half of the nineteenth associations themselves. Local bar associations
lawyers.27 For several years, the ABA attempted to
century. At the same time, legal educators, such as formed sporadically during the colonial period, but
correct and update the canons through new
they disbanded by the early nineteenth century. In
canons, individual amendments and interpretative revision, in part because the ABA Canons failed to the concept of impropriety on the subjective
opinions. In 1928, the ABA amended one canon and distinguish between 'the inspirational and the views of anxious clients as well as the norm's
added thirteen new canons. 28 To deal with proscriptive and were thus unsuccessful in indefinite nature.38 ςrνll
problems peculiar to former government enforcement. The legal profession in the United
lawyers, Canon 36 was minted which disqualified States likewise observed that Canon 36 of the ABA In cadence with these changes, the Integrated
them both for 'adverse-interest conflicts' and Canons of Professional Ethics resulted in Bar of the Philippines (IBP) adopted a
'congruent-interest representation conflicts.29 The unnecessary disqualification of lawyers for proposed Code of Professional Responsibility
rationale for disqualification is rooted in a concern negligible participation in matters during their in 1980 which it submitted to this Court for
that the government lawyer's largely discretionary employment with the government. approval. The Code was drafted to reflect the local
actions would be influenced by the temptation to customs, traditions, and practices of the bar and to
take action on behalf of the government client that The unfairness of Canon 36 compelled ABA to conform with new realities. On June 21, 1988,
later could be to the advantage of parties who replace it in the 1969 ABA Model Code of this Court promulgated the Code of
might later become private practice Professional Responsibility.33 The basic ethical Professional Responsibility.39 Rule 6.03 of the
clients.30 Canon principles in the Code of Professional Code of Professional Responsibility deals
36 provides, viz.:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ Responsibility were supplemented by Disciplinary particularly with former government lawyers, and
Rules that defined minimum rules of conduct to provides, viz.:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
36. Retirement from judicial position or public which the lawyer must adhere.34 In the case of
employment Canon 9, DR 9-101(b)35 became the applicable Rule 6.03 - A lawyer shall not, after leaving
supplementary norm. The drafting committee government service, accept engagement or
A lawyer should not accept employment as an reformulated the canons into the Model Code of employment in connection with any matter in
advocate in any matter upon the merits of which he Professional Responsibility, and, in August of 1969, which he had intervened while in said service.
has previously acted in a judicial capacity. the ABA House of Delegates approved the Model
Code.36 ςrνll
Rule 6.03 of the Code of Professional Responsibility
A lawyer, having once held public office or retained the general structure of paragraph 2,
having been in the public employ should not, Despite these amendments, legal practitioners Canon 36 of the Canons of Professional Ethics
after his retirement, accept employment in remained unsatisfied with the results and indefinite but replaced the expansive phrase 'investigated
connection with any matter he has standards set forth by DR 9-101(b) and the Model and passed upon with the word 'intervened. It is,
investigated or passed upon while in such Code of Professional Responsibility as a therefore, properly applicable to both 'adverse-
office or employ. whole. Thus, in August 1983, the ABA adopted interest conflicts' and 'congruent-interest
new Model Rules of Professional conflicts.
Over the next thirty years, the ABA continued to Responsibility. The Model Rules used the
amend many of the canons and added Canons 46 'restatement format, where the conduct standards
The case at bar does not involve the 'adverse
and 47 in 1933 and 1937, respectively. 31 ςrνll were set-out in rules, with comments following
interest aspect of Rule 6.03. Respondent
each rule. The new format was intended to give
Mendoza, it is conceded, has no adverse interest
better guidance and clarity for enforcement
In 1946, the Philippine Bar Association again problem when he acted as Solicitor General in Sp.
'because the only enforceable standards were the
adopted as its own Canons 33 to 47 of the ABA Proc. No. 107812 and later as counsel of
black letter Rules. The Model Rules eliminated the
Canons of Professional Ethics.32 ςrνll respondents Tan, et al. in Civil Case No. 0005 and
broad canons altogether and reduced the emphasis
Civil Case Nos. 0096-0099 before
on narrative discussion, by placing comments after
By the middle of the twentieth century, there the Sandiganbayan. Nonetheless, there remains
the rules and limiting comment discussion to the
was growing consensus that the ABA Canons the issue of whether there exists a 'congruent-
content of the black letter rules. The Model Rules
needed more meaningful revision. In 1964, the ABA interest conflict sufficient to disqualify
made a number of substantive improvements
President-elect Lewis Powell asked for the creation respondent Mendoza from representing
particularly with regard to conflicts of
of a committee to study the 'adequacy and respondents Tan, et al.
interests.37 In particular, the ABA did away with
effectiveness' of the ABA Canons. The committee Canon 9, citing the hopeless dependence of
recommended that the canons needed substantial I.B. The 'congruent interest aspect of Rule 6.03
The key to unlock Rule 6.03 lies in comprehending and Savings Bank Antonio T. Castro, Jr., where The Board decided as
first, the meaning of 'matter referred to in the rule they averred that on March 28, 1977, they had a follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
and, second, the metes and bounds of the conference with the Solicitor General (Atty.
'intervention made by the former government Mendoza), who advised them on how to proceed .. .
lawyer on the 'matter. The American Bar with the liquidation of GENBANK. The pertinent
Association in its Formal Opinion 342, defined portion of the said memorandum E. To authorize Management to furnish the
'matter as any discrete, isolatable act as well as states:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ Solicitor General with a copy of the subject
identifiable transaction or conduct involving a memorandum of the Director, Department of
particular situation and specific party, and not Immediately after said meeting, we had a Commercial and Savings Bank dated March 29,
merely an act of drafting, enforcing or interpreting conference with the Solicitor General and he 1977, together with copies of:
government or agency procedures, regulations or advised that the following procedure should be
laws, or briefing abstract principles of law. taken: 1. Memorandum of the Deputy Governor,
Supervision and Examination Sector, to the
Firstly, it is critical that we pinpoint the 1. Management should submit a memorandum to Monetary Board, dated March 25, 1977, containing
'matter which was the subject of intervention by the Monetary Board reporting that studies and a report on the current situation of Genbank;
respondent Mendoza while he was the Solicitor evaluation had been made since the last
General. The PCGG relates the following acts of examination of the bank as of August 31, 1976 and 2. Aide Memoire on the Antecedent Facts Re:
respondent Mendoza as constituting the it is believed that the bank can not be reorganized General Bank and Trust Co., dated March 23, 1977;
'matter where he intervened as a Solicitor or placed in a condition so that it may be permitted
General, viz:40 ςrνll to resume business with safety to its depositors and
creditors and the general public. 3. Memorandum of the Director, Department of
Commercial and Savings Bank, to the Monetary
The PCGG's Case for Atty. Mendoza's
Board, dated March 24, 1977, submitting, pursuant
Disqualification 2. If the said report is confirmed by the Monetary to Section 29 of R.A. No. 265, as amended by P.D.
Board, it shall order the liquidation of the bank and No. 1007, a repot on the state of insolvency of
The PCGG imputes grave abuse of discretion on the indicate the manner of its liquidation and approve a Genbank, together with its attachments; and
part of the Sandiganbayan (Fifth Division) in liquidation plan.
issuing the assailed Resolutions dated July 11, 2001
4. Such other documents as may be necessary or
and December 5, 2001 denying the motion to 3. The Central Bank shall inform the principal needed by the Solicitor General for his use in then
disqualify Atty. Mendoza as counsel for stockholders of Genbank of the foregoing decision CFI-praying the assistance of the Court in the
respondents Tan, et al. The PCGG insists that Atty. to liquidate the bank and the liquidation plan liquidation of Genbank.
Mendoza, as then Solicitor General, actively approved by the Monetary Board.
intervened in the closure of GENBANK by advising
the Central Bank on how to proceed with the said Beyond doubt, therefore, the 'matter or the act of
4. The Solicitor General shall then file a petition in respondent Mendoza as Solicitor General involved
bank's liquidation and even filing the petition for its the Court of First Instance reciting the proceedings
liquidation with the CFI of. in the case at bar is 'advising the Central Bank,
which had been taken and praying the assistance of on how to proceed with the said bank's liquidation
the Court in the liquidation of Genbank. and even filing the petition for its liquidation with
As proof thereof, the PCGG cites the Memorandum
the CFI of. In fine, the Court should resolve
dated March 29, 1977 prepared by certain key The PCGG further cites the Minutes No. 13 dated whether his act of advising the Central Bank on
officials of the Central Bank, namely, then Senior March 29, 1977 of the Monetary Board where it the legal procedure to liquidate GENBANK is
Deputy Governor Amado R. Brinas, then Deputy was shown that Atty. Mendoza was furnished included within the concept of 'matter under Rule
Governor Jaime C. Laya, then Deputy Governor and copies of pertinent documents relating to 6.03. The procedure of liquidation is given in
General Counsel Gabriel C. Singson, then Special GENBANK in order to aid him in filing with the black and white in Republic Act No. 265, section
Assistant to the Governor Carlota P. Valenzuela, court the petition for assistance in the bank's 29, viz:
then Asistant to the Governor Arnulfo B. Aurellano liquidation. The pertinent portion of the said
and then Director of Department of Commercial minutes reads:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The provision reads in part: financial intermediary performing quasi-banking plaintiff may suffer by the refusal or the dissolution
functions and enforce individual liabilities of the of the injunction. The provisions of Rule 58 of the
SEC. 29. Proceedings upon insolvency. - Whenever, stockholders and do all that is necessary to New Rules of Court insofar as they are applicable
upon examination by the head of the appropriate preserve the assets of such institution and to and not inconsistent with the provisions of this
supervising or examining department or his implement the liquidation plan approved by the Section shall govern the issuance and dissolution of
examiners or agents into the condition of any bank Monetary Board. The Monetary Board shall the restraining order or injunction contemplated in
or non-bank financial intermediary performing designate an official of the Central Bank, or a this Section.
quasi-banking functions, it shall be disclosed that person of recognized competence in banking or
the condition of the same is one of insolvency, or finance, as liquidator who shall take over the Insolvency, under this Act, shall be understood to
that its continuance in business would involve functions of the receiver previously appointed by mean the inability of a bank or non-bank financial
probable loss to its depositors or creditors, it shall the Monetary Board under this Section. The intermediary performing quasi-banking functions
be the duty of the department head concerned liquidator shall, with all convenient speed, convert to pay its liabilities as they fall due in the usual and
forthwith, in writing, to inform the Monetary Board the assets of the banking institution or non-bank ordinary course of business. Provided, however,
of the facts, and the Board may, upon finding the financial intermediary performing quasi-banking That this shall not include the inability to pay of an
statements of the department head to be true, functions to money or sell, assign or otherwise otherwise non-insolvent bank or non-bank financial
forbid the institution to do business in the dispose of the same to creditors and other parties intermediary performing quasi-banking functions
Philippines and shall designate an official of the for the purpose of paying the debts of such caused by extraordinary demands induced by
Central Bank or a person of recognized institution and he may, in the name of the bank or financial panic commonly evidenced by a run on
competence in banking or finance, as receiver to non-bank financial intermediary performing quasi- the bank or non-bank financial intermediary
immediately take charge of its assets and liabilities, banking functions, institute such actions as may be performing quasi-banking functions in the banking
as expeditiously as possible collect and gather all necessary in the appropriate court to collect and or financial community.
the assets and administer the same for the benefit recover accounts and assets of such institution.
of its creditors, exercising all the powers necessary The appointment of a conservator under Section
for these purposes including, but not limited to, The provisions of any law to the contrary 28-A of this Act or the appointment of a receiver
bringing suits and foreclosing mortgages in the notwithstanding, the actions of the Monetary Board under this Section shall be vested exclusively with
name of the bank or non-bank financial under this Section and the second paragraph of the Monetary Board, the provision of any law,
intermediary performing quasi-banking functions. Section 34 of this Act shall be final and executory, general or special, to the contrary notwithstanding.
and can be set aside by the court only if there is (As amended by PD Nos. 72, 1007, 1771 & 1827,
.. . convincing proof that the action is plainly arbitrary Jan. 16, 1981)
and made in bad faith. No restraining order or
If the Monetary Board shall determine and confirm injunction shall be issued by the court enjoining the We hold that this advice given by respondent
within the said period that the bank or non-bank Central Bank from implementing its actions under Mendoza on the procedure to liquidate GENBANK
financial intermediary performing quasi-banking this Section and the second paragraph of Section is not the 'matter contemplated by Rule 6.03 of
functions is insolvent or cannot resume business 34 of this Act, unless there is convincing proof that the Code of Professional Responsibility. ABA
with safety to its depositors, creditors and the the action of the Monetary Board is plainly Formal Opinion No. 342 is clear as daylight in
general public, it shall, if the public interest arbitrary and made in bad faith and the petitioner
stressing that the 'drafting, enforcing or
requires, order its liquidation, indicate the manner or plaintiff files with the clerk or judge of the court
interpreting government or agency procedures,
of its liquidation and approve a liquidation plan. in which the action is pending a bond executed in
regulations or laws, or briefing abstract principles
The Central Bank shall, by the Solicitor General, favor of the Central Bank, in an amount to be fixed
of law are acts which do not fall within the scope
file a petition in the Court of First Instance reciting by the court. The restraining order or injunction
of the term 'matter and cannot disqualify.
the proceedings which have been taken and shall be refused or, if granted, shall be dissolved
praying the assistance of the court in the upon filing by the Central Bank of a bond, which
shall be in the form of cash or Central Bank Secondly, it can even be conceded for the sake of
liquidation of such institution. The court shall have argument that the above act of respondent
jurisdiction in the same proceedings to adjudicate cashier(s) check, in an amount twice the amount of
the bond of the petitioner or plaintiff conditioned Mendoza falls within the definition of matter per
disputed claims against the bank or non-bank ABA Formal Opinion No. 342. Be that as it may, the
that it will pay the damages which the petitioner or
said act of respondent Mendoza which is the 'Intervene means, hence, in DR 9-101(b), the prohibition extended
'matter involved in Sp. Proc. No. 107812 viz.:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ only to a matter in which the lawyer, while in the
is entirely different from the 'matter involved in government service, had 'substantial
Civil Case No. 0096. Again, the plain facts speak 1: to enter or appear as an irrelevant or extraneous responsibility. The 1983 Model Rules further
for themselves. It is given that respondent feature or circumstance. .. 2: to occur, fall, or come constricted the reach of the rule. MR 1.11(a)
Mendoza had nothing to do with the decision of the in between points of time or events. .. 3: to come in provides that 'a lawyer shall not represent a private
Central Bank to liquidate GENBANK. It is also or between by way of hindrance or modification: client in connection with a matter in which the
given that he did not participate in the sale of INTERPOSE. .. 4: to occur or lie between two lawyer participated personally and
GENBANK to Allied Bank. The 'matter where he things (Paris, where the same city lay on both sides substantially as a public officer or employee.
got himself involved was in informing Central of an intervening river. ..)41 ςrνll
Bank on the procedure provided by law to It is, however, alleged that the intervention of
liquidate GENBANK thru the courts and in filing On the other hand, 'intervention is defined as: respondent Mendoza in Sp. Proc. No. 107812 is
the necessary petition in Sp. Proc. No. 107812 in significant and substantial. We disagree. For one,
the then Court of First Instance. The subject the petition in the special proceedings is
1: the act or fact of intervening: INTERPOSITION;
'matter of Sp. Proc. No. 107812, therefore, is an initiatory pleading, hence, it has to be signed
2: interference that may affect the interests of
not the same nor is related to but is different by respondent Mendoza as the then sitting Solicitor
others.42 ςrνll
from the subject 'matter in Civil Case No. General. For another, the record is arid as to
0096. Civil Case No. 0096 involves the actual participation of respondent Mendoza in
the sequestration of the stocks owned by There are, therefore, two possible interpretations
the subsequent proceedings. Indeed, the case was
respondents Tan, et al., in Allied Bank on the of the word 'intervene. Under the first
in slumberville for a long number of years. None of
alleged ground that they are ill-gotten. The case interpretation, 'intervene includes participation in the parties pushed for its early termination.
does not involve the liquidation of GENBANK. Nor a proceeding even if the intervention is irrelevant Moreover, we note that the petition filed merely
does it involve the sale of GENBANK to Allied or has no effect or little influence. 43 Under
seeks the assistance of the court in the liquidation
Bank. Whether the shares of stock of the the second interpretation, 'intervene only of GENBANK. The principal role of the court in this
reorganized Allied Bank are ill-gotten is far includes an act of a person who has the power to type of proceedings is to assist the Central Bank in
removed from the issue of the dissolution and influence the subject proceedings.44 We hold that
determining claims of creditors against the
liquidation of GENBANK. GENBANK was liquidated this second meaning is more appropriate to give to
GENBANK. The role of the court is not strictly as a
by the Central Bank due, among others, to the the word 'intervention under Rule 6.03 of the Code
court of justice but as an agent to assist the Central
alleged banking malpractices of its owners and of Professional Responsibility in light of its history.
Bank in determining the claims of creditors. In
officers. In other words, the legality of the The evils sought to be remedied by the Rule do not
such a proceeding, the participation of the Office of
liquidation of GENBANK is not an issue in the exist where the government lawyer does an act
the Solicitor General is not that of the usual court
sequestration cases. Indeed, the jurisdiction of the which can be considered as innocuous such as 'x x
litigator protecting the interest of government.
PCGG does not include the dissolution and x drafting, enforcing or interpreting government or
liquidation of banks. It goes without saying that agency procedures, regulations or laws, or briefing
abstract principles of law. II
Code 6.03 of the Code of Professional
Responsibility cannot apply to respondent
In fine, the intervention cannot be insubstantial Balancing Policy Considerations
Mendoza because his alleged intervention
while a Solicitor General in Sp. Proc. No. and insignificant. Originally, Canon 36 provided
107812 is an intervention on a matter that a former government lawyer 'should not, after To be sure, Rule 6.03 of our Code of Professional
different from the matter involved in Civil his retirement, accept employment in connection Responsibility represents a commendable effort on
Case No. 0096. with any matter which he has investigated or the part of the IBP to upgrade the ethics of lawyers
passed upon while in such office or employ. As in the government service. As aforestressed, it is a
aforediscussed, the broad sweep of the phrase take-off from similar efforts especially by the ABA
Thirdly, we now slide to the metes and bounds of
'which he has investigated or passed upon resulted which have not been without difficulties. To date,
the 'intervention contemplated by Rule 6.03.
in unjust disqualification of former government the legal profession in the United States is still fine
lawyers. The 1969 Code restricted its latitude, tuning its DR 9-101(b) rule.
In fathoming the depth and breadth of Rule 6.03 of difficult to divine. The disqualification of office once occupied by respondent Mendoza. It
our Code of Professional Responsibility, the Court respondent Mendoza has long been a dead issue. cannot be overly stressed that the position of
took account of various policy It was resuscitated after the lapse of many years Solicitor General should be endowed with a
considerations to assure that its interpretation and only after PCGG has lost many legal incidents great degree of independence. It is this
and application to the case at bar will achieve its in the hands of respondent Mendoza. For a fact, independence that allows the Solicitor General to
end without necessarily prejudicing other values of the recycled motion for disqualification in the case recommend acquittal of the innocent; it is this
equal importance. Thus, the rule was not at bar was filed more than four years after the independence that gives him the right to refuse to
interpreted to cause a chilling effect on filing of the petitions for certiorari, prohibition and defend officials who violate the trust of their office.
government recruitment of able legal talent. injunction with the Supreme Court which were Any undue dimunition of the independence of the
At present, it is already difficult for government to subsequently remanded to Solicitor General will have a corrosive effect on the
match compensation offered by the private sector the Sandiganbayan and docketed as Civil Case rule of law.
and it is unlikely that government will be able to Nos. 0096-0099.50 At the very least, the
reverse that situation. The observation is not circumstances under which the motion to disqualify No less significant a consideration is the
inaccurate that the only card that the government in the case at bar were refiled put petitioner's deprivation of the former government lawyer
may play to recruit lawyers is have them defer motive as highly suspect. of the freedom to exercise his profession.
present income in return for the experience and Given the current state of our law, the
contacts that can later be exchanged for higher Similarly, the Court in interpreting Rule 6.03 disqualification of a former government lawyer may
income in private practice.45 Rightly, Judge was not unconcerned with the prejudice to the extend to all members of his law firm.55 Former
Kaufman warned that the sacrifice of entering client which will be caused by its misapplication. It government lawyers stand in danger of becoming
government service would be too great for most cannot be doubted that granting a disqualification the lepers of the legal profession.
men to endure should ethical rules prevent them motion causes the client to lose not only the law
from engaging in the practice of a technical firm of choice, but probably an individual lawyer in It is, however, proffered that the mischief sought to
specialty which they devoted years in acquiring whom the client has confidence.51 The client with a be remedied by Rule 6.03 of the Code of
and cause the firm with which they become disqualified lawyer must start again often without Professional Responsibility is the possible
associated to be disqualified.46 Indeed, 'to make the benefit of the work done by the latter. 52 The appearance of impropriety and loss of public
government service more difficult to exit can only effects of this prejudice to the right to choose an confidence in government. But as well observed,
make it less appealing to enter.47 ςrνll effective counsel cannot be overstated for it can the accuracy of gauging public perceptions is a
result in denial of due process. highly speculative exercise at best56 which can lead
In interpreting Rule 6.03, the Court also cast a to untoward results.57 No less than Judge Kaufman
harsh eye on its use as a litigation tactic to The Court has to consider also the possible doubts that the lessening of restrictions as to
harass opposing counsel as well as deprive his adverse effect of a truncated reading of the former government attorneys will have any
client of competent legal representation. The rule on the official independence of lawyers in detrimental effect on that free flow of information
danger that the rule will be misused to bludgeon an the government service. According to Prof. between the government-client and its attorneys
opposing counsel is not a mere guesswork. The Morgan: 'An individual who has the security of which the canons seek to protect. 58 Notably, the
Court of Appeals for the District of Columbia has knowing he or she can find private employment appearance of impropriety theory has been
noted 'the tactical use of motions to disqualify upon leaving the government is free to work rejected in the 1983 ABA Model Rules of
counsel in order to delay proceedings, deprive the vigorously, challenge official positions when he or Professional Conduct59 and some courts have
opposing party of counsel of its choice, and harass she believes them to be in error, and resist illegal abandoned per se disqualification based on Canons
and embarrass the opponent, and observed that the demands by superiors. An employee who lacks this 4 and 9 when an actual conflict of interest exists,
tactic was 'so prevalent in large civil cases in assurance of private employment does not enjoy and demand an evaluation of the interests of the
recent years as to prompt frequent judicial and such freedom.53 He adds: 'Any system that affects defendant, government, the witnesses in the case,
academic commentary.48 Even the United States the right to take a new job affects the ability to quit and the public.60 ςrνll
Supreme Court found no quarrel with the Court of the old job and any limit on the ability to quit
Appeals' description of disqualification motions as inhibits official independence. 54 The case at bar It is also submitted that the Court should apply
'a dangerous game.49 In the case at bar, the new involves the position of Solicitor General, the Rule 6.03 in all its strictness for it correctly
attempt to disqualify respondent Mendoza is
disfavors lawyers who 'switch sides. It is claimed been disloyal to his or her last client - the period. Mr. Justice Tinga opines that the rule
that 'switching sides' carries the danger that government. Interviews with lawyers consistently cannot apply retroactively to respondent Mendoza.
former government employee may compromise confirm that law firms want the 'best government Obviously, and rightly so, they are disquieted by
confidential official information in the process. lawyers - the ones who were hardest to beat - not the fact that (1) when respondent Mendoza was the
But this concern does not cast a shadow in the case the least qualified or least vigorous Solicitor General, Rule 6.03 has not yet adopted by
at bar. As afore-discussed, the act of respondent advocates.65 But again, this particular concern is the IBP and approved by this Court, and (2) the bid
Mendoza in informing the Central Bank on the a non factor in the case at bar. There is no to disqualify respondent Mendoza was made after
procedure how to liquidate GENBANK is charge against respondent Mendoza that he the lapse of time whose length cannot, by any
a different matter from the subject matter of Civil advised Central Bank on how to liquidate standard, qualify as reasonable. At bottom, the
Case No. 0005 which is about the sequestration of GENBANK with an eye in later defending point they make relates to the unfairness of the
the shares of respondents Tan, et al., in Allied respondents Tan, et al. of Allied Bank. Indeed, he rule if applied without any prescriptive period and
Bank. Consequently, the danger that confidential continues defending both the interests of Central retroactively, at that. Their concern is legitimate
official information might be divulged is nil, if not Bank and respondents Tan, et al. in the above and deserves to be initially addressed by the IBP
inexistent. To be sure, there are no inconsistent cases. and our Committee on Revision of the Rules of
'sides' to be bothered about in the case at bar. For Court.
there is no question that in lawyering for Likewise, the Court is nudged to consider the need
respondents Tan, et al., respondent Mendoza is not to curtail what is perceived as the 'excessive IN VIEW WHEREOF, the petition assailing the
working against the interest of Central Bank. On influence of former officials' or their resolutions dated July 11, 2001 and December 5,
the contrary, he is indirectly defending the validity 'clout.66 Prof. Morgan again warns against 2001 of the Fifth Division of the Sandiganbayan in
of the action of Central Bank in liquidating extending this concern too far. He explains the Civil Case Nos. 0096-0099 is denied.
GENBANK and selling it later to Allied Bank. Their rationale for his warning, viz: 'Much of what
interests coincide instead of colliding. It is for appears to be an employee's influence may actually No cost.
this reason that Central Bank offered no objection be the power or authority of his or her position,
to the lawyering of respondent Mendoza in Civil power that evaporates quickly upon departure from SO ORDERED.
Case No. 0005 in defense of respondents Tan, et government x x x.67 More, he contends that the
al. There is no switching of sides for no two concern can be demeaning to those sitting in
sides are involved. government. To quote him further: 'x x x The idea
that, present officials make significant decisions
It is also urged that the Court should consider that based on friendship rather than on the merit says
Rule 6.03 is intended to avoid conflict of more about the present officials than about their
loyalties, i.e., that a government employee might former co-worker friends. It implies a lack of will or
be subject to a conflict of loyalties while still in talent, or both, in federal officials that does not
government service.61 The example given by the seem justified or intended, and it ignores the
proponents of this argument is that a lawyer who possibility that the officials will tend to disfavor
plans to work for the company that he or she is their friends in order to avoid even the appearance
currently charged with prosecuting might be of favoritism.68
tempted to prosecute less vigorously.62 In the
cautionary words of the Association of the Bar III
Committee in 1960: 'The greatest public risks
arising from post employment conduct may well The question of fairness
occur during the period of employment through
the dampening of aggressive administration of
Mr. Justices Panganiban and Carpio are of the
government policies.63 Prof. Morgan, however,
view, among others, that the congruent interest
considers this concern as 'probably excessive. 64 He
prong of Rule 6.03 of the Code of Professional
opines 'x x x it is hard to imagine that a private firm
Responsibility should be subject to a prescriptive
would feel secure hiding someone who had just