G.R. Nos. 151809-12. April 12, 2005.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, vs. SANDIGANBAYAN (Fifth Division), LUCIO C. TAN, ET AL., and ATTY. ESTELITO P. MENDOZA, Respondents.

FACTS

The PCGG filed a complaint with the Sandiganbayan to recover alleged ill-gotten wealth amassed by respondents Lucio Tan and others in association with former President Ferdinand Marcos. The respondents were represented by former Solicitor General Estelito P. Mendoza. The PCGG moved to disqualify Atty. Mendoza, invoking Rule 6.03 of the Code of Professional Responsibility. The PCGG alleged that while serving as Solicitor General, Mendoza actively intervened in the liquidation of the insolvent General Bank and Trust Company (GENBANK), which was later acquired by the Lucio Tan group and became Allied Banking Corporation. Specifically, he advised the Central Bank and filed a court petition for assistance in GENBANK’s liquidation.
The Sandiganbayan denied the motion to disqualify. It found no proof that Mendoza’s former function as Solicitor General was inconsistent with his current representation, noting he had not taken a position adverse to the Central Bank’s interest. The PCGG filed a petition for certiorari with the Supreme Court, arguing the Sandiganbayan committed grave abuse of discretion.

ISSUE

Whether the Sandiganbayan committed grave abuse of discretion in denying the PCGG’s motion to disqualify Atty. Estelito P. Mendoza as counsel for the respondents based on Rule 6.03 of the Code of Professional Responsibility.

RULING

No, the Sandiganbayan did not commit grave abuse of discretion. The Supreme Court, voting 8-6-1, upheld the Sandiganbayan’s ruling. The legal logic centers on the application of Rule 6.03, which prohibits a former government lawyer from accepting “engagement or employment in connection with any matter in which he had intervened while in said service.” The Court emphasized that for disqualification to attach, the matter of the former government service and the present engagement must be the same or substantially related.
The Court found that Mendoza’s intervention as Solicitor General was limited to the liquidation of GENBANK—a neutral, administrative act to assist the Central Bank in implementing banking laws. His representation of the Tan group decades later pertains to an entirely different matter: the recovery of alleged ill-gotten wealth acquired through influence with the Marcos administration. There is no identity or substantial relation between the act of advising on a bank’s liquidation proceedings and defending against allegations of amassing wealth through political cronyism. The transactions and legal issues are distinct. Furthermore, the Court noted that the Code of Professional Responsibility was promulgated in 1988, after the questioned acts of representation had commenced, and it cannot be applied retroactively to penalize Mendoza. Absent a clear violation of a contemporaneous ethical rule, the Sandiganbayan’s denial of the disqualification motion was a proper exercise of discretion and not attended by grave abuse.