495 Phil. 485
PUNO, J.:
36. RETIREMENT FROM JUDICIAL POSITION OR PUBLIC EMPLOYMENTOver the next thirty years, the ABA continued to amend many of the canons and added Canons 46 and 47 in 1933 and 1937, respectively.[31]
A lawyer should not accept employment as an advocate in any matter upon the merits of which he has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ should not, after his retirement, accept employment in connection with any matter he has investigated or passed upon while in such office or employ.
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.Rule 6.03 of the Code of Professional Responsibility retained the general structure of paragraph 2, Canon 36 of the Canons of Professional Ethics but replaced the expansive phrase "investigated and passed upon" with the word "intervened." It is, therefore, properly applicable to both "adverse-interest conflicts" and "congruent-interest conflicts."
The PCGG's Case for Atty. Mendoza's DisqualificationBeyond doubt, therefore, the "matter" or the act of respondent Mendoza as Solicitor General involved in the case at bar is "advising the Central Bank, on how to proceed with the said bank's liquidation and even filing the petition for its liquidation with the CFI of Manila." In fine, the Court should resolve whether his act of advising the Central Bank on the legal procedure to liquidate GENBANK is included within the concept of "matter" under Rule 6.03. The procedure of liquidation is given in black and white in Republic Act No. 265, section 29, viz:
The PCGG imputes grave abuse of discretion on the part of the Sandiganbayan (Fifth Division) in issuing the assailed Resolutions dated July 11, 2001 and December 5, 2001 denying the motion to disqualify Atty. Mendoza as counsel for respondents Tan, et al. The PCGG insists that Atty. Mendoza, as then Solicitor General, actively intervened in the closure of GENBANK by advising the Central Bank on how to proceed with the said bank's liquidation and even filing the petition for its liquidation with the CFI of Manila.
As proof thereof, the PCGG cites the Memorandum dated March 29, 1977 prepared by certain key officials of the Central Bank, namely, then Senior Deputy Governor Amado R. Brinas, then Deputy Governor Jaime C. Laya, then Deputy Governor and General Counsel Gabriel C. Singson, then Special Assistant to the Governor Carlota P. Valenzuela, then Asistant to the Governor Arnulfo B. Aurellano and then Director of Department of Commercial and Savings Bank Antonio T. Castro, Jr., where they averred that on March 28, 1977, they had a conference with the Solicitor General (Atty. Mendoza), who advised them on how to proceed with the liquidation of GENBANK. The pertinent portion of the said memorandum states:Immediately after said meeting, we had a conference with the Solicitor General and he advised that the following procedure should be taken:The PCGG further cites the Minutes No. 13 dated March 29, 1977 of the Monetary Board where it was shown that Atty. Mendoza was furnished copies of pertinent documents relating to GENBANK in order to aid him in filing with the court the petition for assistance in the bank's liquidation. The pertinent portion of the said minutes reads:
1) Management should submit a memorandum to the Monetary Board reporting that studies and evaluation had been made since the last examination of the bank as of August 31, 1976 and it is believed that the bank can not be reorganized or placed in a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public. 2) If the said report is confirmed by the Monetary Board, it shall order the liquidation of the bank and indicate the manner of its liquidation and approve a liquidation plan. 3) The Central Bank shall inform the principal stockholders of Genbank of the foregoing decision to liquidate the bank and the liquidation plan approved by the Monetary Board. 4) The Solicitor General shall then file a petition in the Court of First Instance reciting the proceedings which had been taken and praying the assistance of the Court in the liquidation of Genbank.
The Board decided as follows:. . .
E. To authorize Management to furnish the Solicitor General with a copy of the subject memorandum of the Director, Department of Commercial and Savings Bank dated March 29, 1977, together with copies of:
- Memorandum of the Deputy Governor, Supervision and Examination Sector, to the Monetary Board, dated March 25, 1977, containing a report on the current situation of Genbank;
- Aide Memoire on the Antecedent Facts Re: General Bank and Trust Co., dated March 23, 1977;
- Memorandum of the Director, Department of Commercial and Savings Bank, to the Monetary Board, dated March 24, 1977, submitting, pursuant to Section 29 of R.A. No. 265, as amended by P.D. No. 1007, a repot on the state of insolvency of Genbank, together with its attachments; and
- Such other documents as may be necessary or needed by the Solicitor General for his use in then CFI-praying the assistance of the Court in the liquidation of Genbank.
SEC. 29. Proceedings upon insolvency. - Whenever, upon examination by the head of the appropriate supervising or examining department or his examiners or agents into the condition of any bank or non-bank financial intermediary performing quasi-banking functions, it shall be disclosed that the condition of the same is one of insolvency, or that its continuance in business would involve probable loss to its depositors or creditors, it shall be the duty of the department head concerned forthwith, in writing, to inform the Monetary Board of the facts, and the Board may, upon finding the statements of the department head to be true, forbid the institution to do business in the Philippines and shall designate an official of the Central Bank or a person of recognized competence in banking or finance, as receiver to immediately take charge of its assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same for the benefit of its creditors, exercising all the powers necessary for these purposes including, but not limited to, bringing suits and foreclosing mortgages in the name of the bank or non-bank financial intermediary performing quasi-banking functions.We hold that this advice given by respondent Mendoza on the procedure to liquidate GENBANK is not the "matter" contemplated by Rule 6.03 of the Code of Professional Responsibility. ABA Formal Opinion No. 342 is clear as daylight in stressing that the "drafting, enforcing or interpreting government or agency procedures, regulations or laws, or briefing abstract principles of law" are acts which do not fall within the scope of the term "matter" and cannot disqualify.. . .
If the Monetary Board shall determine and confirm within the said period that the bank or non-bank financial intermediary performing quasi-banking functions is insolvent or cannot resume business with safety to its depositors, creditors and the general public, it shall, if the public interest requires, order its liquidation, indicate the manner of its liquidation and approve a liquidation plan. The Central Bank shall, by the Solicitor General, file a petition in the Court of First Instance reciting the proceedings which have been taken and praying the assistance of the court in the liquidation of such institution. The court shall have jurisdiction in the same proceedings to adjudicate disputed claims against the bank or non-bank financial intermediary performing quasi-banking functions and enforce individual liabilities of the stockholders and do all that is necessary to preserve the assets of such institution and to implement the liquidation plan approved by the Monetary Board. The Monetary Board shall designate an official of the Central Bank, or a person of recognized competence in banking or finance, as liquidator who shall take over the functions of the receiver previously appointed by the Monetary Board under this Section. The liquidator shall, with all convenient speed, convert the assets of the banking institution or non-bank financial intermediary performing quasi-banking functions to money or sell, assign or otherwise dispose of the same to creditors and other parties for the purpose of paying the debts of such institution and he may, in the name of the bank or non-bank financial intermediary performing quasi-banking functions, institute such actions as may be necessary in the appropriate court to collect and recover accounts and assets of such institution.
The provisions of any law to the contrary notwithstanding, the actions of the Monetary Board under this Section and the second paragraph of Section 34 of this Act shall be final and executory, and can be set aside by the court only if there is convincing proof that the action is plainly arbitrary and made in bad faith. No restraining order or injunction shall be issued by the court enjoining the Central Bank from implementing its actions under this Section and the second paragraph of Section 34 of this Act, unless there is convincing proof that the action of the Monetary Board is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending a bond executed in favor of the Central Bank, in an amount to be fixed by the court. The restraining order or injunction shall be refused or, if granted, shall be dissolved upon filing by the Central Bank of a bond, which shall be in the form of cash or Central Bank cashier(s) check, in an amount twice the amount of the bond of the petitioner or plaintiff conditioned that it will pay the damages which the petitioner or plaintiff may suffer by the refusal or the dissolution of the injunction. The provisions of Rule 58 of the New Rules of Court insofar as they are applicable and not inconsistent with the provisions of this Section shall govern the issuance and dissolution of the restraining order or injunction contemplated in this Section.
Insolvency, under this Act, shall be understood to mean the inability of a bank or non-bank financial intermediary performing quasi-banking functions to pay its liabilities as they fall due in the usual and ordinary course of business. Provided, however, That this shall not include the inability to pay of an otherwise non-insolvent bank or non-bank financial intermediary performing quasi-banking functions caused by extraordinary demands induced by financial panic commonly evidenced by a run on the bank or non-bank financial intermediary performing quasi-banking functions in the banking or financial community.
The appointment of a conservator under Section 28-A of this Act or the appointment of a receiver under this Section shall be vested exclusively with the Monetary Board, the provision of any law, general or special, to the contrary notwithstanding. (As amended by PD Nos. 72, 1007, 1771 & 1827, Jan. 16, 1981)
1: to enter or appear as an irrelevant or extraneous feature or circumstance . . . 2: to occur, fall, or come in between points of time or events . . . 3: to come in or between by way of hindrance or modification: INTERPOSE . . . 4: to occur or lie between two things (Paris, where the same city lay on both sides of an intervening river . . .)[41]On the other hand, "intervention" is defined as:
1: the act or fact of intervening: INTERPOSITION; 2: interference that may affect the interests of others.[42]There are, therefore, two possible interpretations of the word "intervene." Under the first interpretation, "intervene" includes participation in a proceeding even if the intervention is irrelevant or has no effect or little influence.[43] Under the second interpretation, "intervene" only includes an act of a person who has the power to influence the subject proceedings.[44] We hold that this second meaning is more appropriate to give to the word "intervention" under Rule 6.03 of the Code of Professional Responsibility in light of its history. The evils sought to be remedied by the Rule do not exist where the government lawyer does an act which can be considered as innocuous such as "x x x drafting, enforcing or interpreting government or agency procedures, regulations or laws, or briefing abstract principles of law."
(a) Civil Case No. 0095 - Sipalay Trading Corp. vs. PCGG, which seeks to nullify the PCGG's Order dated July 24, 1986 sequestering Lucio Tan's shares of stocks in Maranaw Hotels and Resort Corporation (Century Park Sheraton Hotel);Civil Cases Nos. 0096 and 0100 involve Tan, et al.'s shares of stocks in the Allied Banking Corporation (Allied Bank).
(b) Civil Case No. 0096 - Lucio Tan, Mariano Tanenglian, Allied Banking Corp., Iris Holding and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated June 19, 1986 sequestering the shares of stocks in Allied Banking Corporation held by and/or in the name of respondents Lucio Tan, Mariano Tanenglian, Iris Holding and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc.;
(c) Civil Case No. 0097 -- Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr. and Foremost Farms, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated August 12, 1986 sequestering the shares of stocks in Foremost Farms, Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad Santos and Florencio N. Santos, Jr.;
(d) Civil Case No. 0098 - Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc. and Fortune Tabacco Corp. v. PCGG., which seeks to nullify the PCGG's Order dated July 24, 1986 sequestering the shares of stocks in Fortune Tobacco Corp. held by and /or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc.; and
(e) Civil Case No. 0099 -- Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos and Shareholdings, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated July 24, 1986 sequestering the shares of stocks in Shareholdings, Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos and Natividad Santos.
(f) Civil Case No. 0100 - Allied Banking Corp. vs. PCGG, which seeks to nullify the PCGG's Search and Seizure Order dated August 13, 1986, issued on bank documents of Allied Banking Corp. [3]
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.In each motion, PCGG alleged that Atty. Mendoza, then Solicitor General of the Marcos Administration, "actively intervened" in the liquidation of General Bank and Trust Company (GENBANK), subsequently acquired by Tan et al. and became Allied Bank. PCGG's allegations are similar in every aspect, thus:
"(1) He was the former Solicitor General of the Republic of the Philippines for almost 14 years appearing on behalf of the Republic in multitudes of cases.On April 22, 1991, the Sandiganbayan issued a Resolution[4] in Civil Case No. 0005 denying PCGG's motion to disqualify Atty. Mendoza.
(2) The records show that, as then Solicitor General, Atty. Estelito P. Mendoza appeared as counsel for the Central Bank of the Philippines in Special Proceedings No. 107812, pending before the Regional Trial Court of Manila, in connection with the Central Bank's Petition for assistance in the Liquidation of General bank and Trust Company (herein called "Genbank", for brevity). The records also show that Defendant Lucio Tan and his group were the same persons who acquired Genbank's assets, liabilities and interest.
(3) Consequently, Atty. Mendoza's appearance as counsel for the Defendant herein runs counter to the long-cherished ethical canon of the legal profession which prohibits a counsel to appear in litigation adverse to the interests of his former client. Interpreting this sanction, jurisprudence has held, that:'The lawyer's obligation to represent the client with undivided fidelity and to keep his confidences, also forbid the lawyer from accepting retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed in him. (Canon of Professional Ethics, 6). The prohibition stands even if the adverse interest is very slight; neither is it material that the intention and motive of the attorney may have been honest. (5 Am. Jur. 296).'(4) The reason for the prohibition is obvious. Apart from the obligation to keep inviolate the prior relationship between counsel and his former client, such counsel obtains material information in confidence. Consequently, he should not be allowed to represent a party with adverse interest to his former client, arising out of the very transaction subject of the former relationship.
(5) In the case at bar, it should be stressed that Defendant Lucio Tan and his group acquired the assets and liabilities of Genbank. This manner of acquisition has been alleged to have been fraudulent, arbitrary and a product of collusion between them and the Central Bank officials. (Refer to Criminal Case No. 005 pending before this Honorable Court.) Atty. Mendoza's appearance as counsel for Defendants, clearly violates the Code of Professional Responsibility, which provides that:'A lawyer shall not after leaving the government service accept engagement or employment in connection with any matter in which he had intervened while in said service.' (Code of Professional Responsibility, Canon 6, Rule 6.03)'(6) In the liquidation of Genbank and its eventual acquisition by Lucio Tan and his group, Atty. Mendoza, as Solicitor-General, personally advised the Central Bank officials on the procedure to bring about Genbank's liquidation. In the Memorandum for the Governor of the Central Bank dated March 29, 1977 (signed by the following subordinates of then CB Governor Gregorio Licaros, namely: Senior Deputy Governor Amado R. Brinas (deceased), Deputy Governor Jaime C. Laya, Deputy Governor & General Counsel Gabriel C. Singson, Special Asst. to the Governor Carlota P. Valenzuela, Asst. to the Governor Arnulfo B. Aurellano and Director Antonio T. Castro, Jr.), the following portion disclosed Atty. Mendoza's participation:'Immediately after said meeting, we had a conference with the Solicitor General (atty. Mendoza) and he advised that the following procedure should be taken:Plainly stated, it was Atty. Mendoza who was the legal author of the closure of Genbank and the eventual sale to Mr. Lucio Tan and his Group. Clearly, Atty. Mendoza should be disqualified in this case."
'(1) Management should submit a memorandum to the Monetary Board reporting that studies and evaluation had been made since the last examination of the bank as of August 31, 1976 and it is believed that the bank cannot be reorganized or placed in a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public.
'(2) If the said report is confirmed by the Monetary Board, it shall order the liquidation of the bank and indicate the manner of its liquidation and approve a liquidation plan.
(3) The Central Bank shall inform the principal stockholders of Genbank of the foregoing decision to liquidate the bank and the liquidation plan approved by the Monetary Board.
(4) The Solicitor General shall then file a petition in the Court of First Instance reciting the proceedings which had been taken and praying the assistance of the Court in the liquidation of Genbank."
"Acting on the PCGG's "MOTION TO DISQUALIFY ATTY. ESTELITO P. MENDOZA AS COUNSEL FOR PETITIONER" dated February 5,1991 which appears not to have been resolved by then Second Division of this Court, and it appearing that (1) the motion is exactly the same in substance as that motion filed in Civil Case No. 0005 as in fact, Atty. Mendoza in his "OPPOSITION" dated March 5, 1991 manifested that he was just adopting his opposition to the same motion filed by PCGG in Civil Case No. 0005 and (2) in the Court's Order dated March 7,1991, the herein incident was taken-up jointly with the said same incident in Civil Case No. 0005 (pp.134-135,Vol. I, Record of Civil Case No. 0096), this Division hereby reiterates and adopts the Resolution dated April 22, 1991 in Civil Case No. 0005 of the Second Division (pp.1418-1424, Vol. III, Record of Civil Case No. 0005) denying the said motion as its Resolution in the case at bar."[7]The PCGG moved for the reconsideration of the foregoing Resolution, but was denied. In the Resolution dated December 5, 2001, the Sandiganbayan ruled:
"Acting on respondent PCGG's "MOTION FOR RECONSIDERATION" dated August 1, 2001 praying for the reconsideration of the Court's Resolution dated July 12, 2001 denying its motion to disqualify Atty. Estelito P. Mendoza as counsel for petitioners, to which petitioners have filed an "OPPOSITION TO MOTION FOR RECONSIDERATION DATED AUGUST 1, 2001" dated August 29, 2001, as well as the respondent's "REPLY (To Opposition to Motion for Reconsideration)" dated November 16, 2001, it appearing that the main motion to disqualify Atty. Mendoza as counsel in these cases was exactly the same in substance as that motion to disqualify Atty. Mendoza filed by the PCGG in Civil Case No. 0005 (re:Republic vs. Lucio Tan, et al.) and the resolutions of this Court (Second Division) in Civil Case No. 0005 denying the main motion as well as of the motion for reconsideration thereof had become final and executory when PCGG failed to elevate the said resolutions to the Supreme Court, the instant motion is hereby DENIED.[8]Hence, the PCGG's present petition for certiorari and prohibition alleging that the Sandiganbayan committed grave abuse of discretion in denying its motion to disqualify Atty. Mendoza in Civil Cases Nos. 0096-0099.
(1) Is certiorari the proper remedy to assail the Sandiganbayan Resolutions dated July 11 and December 5, 2001 denying the PCGG's motion to disqualify Atty. Mendoza in Civil Cases Nos. 0096-0099?There are some important points I wish to stress at this incipient stage. I believe they should be considered if we are to arrive at a fair resolution of this case. The scattershot manner in which the PCGG filed the various motions to disqualify Atty. Mendoza shows its intent to harass him and Tan et al. It may be recalled that the PCGG filed three (3) identical motions, one in Civil Cases Nos. 0096-0099, another in Civil Case No. 0100 and the last one in Civil Case No. 0005. Of these cases, only Civil Cases Nos. 0096, 0100 and 0005 actually involve Tan et al.'s shares of stocks in the Allied Bank. Civil Cases Nos. 0097, 0098 and 0099 have entirely different subject matter. Thus, insofar as these cases are concerned, the motions to disqualify lack substantive merit. Why then would the PCGG file identical motions to disqualify Atty. Mendoza in these unrelated cases? Its intention is suspect. To subject Tan et al. to numerous and baseless motions to disqualify their lawyer is, no doubt, a form of harassment.
(2) May Sandiganbayan Resolution dated April 22, 1991 in Civil Case No. 0005 be considered a bar to similar motions to disqualify Atty. Mendoza under the doctrine of res judicata?
(3) Does Atty. Mendoza's participation in the liquidation of GENBANK constitute intervention?
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.In determining whether Atty. Mendoza committed a breach of this Rule, certain factual predicates should be established, thus: (a) in connection with what "matter" has Atty. Mendoza accepted an engagement or employment after leaving the government service?; (b) in connection with what "matter" did he intervene while in government service?; and (c) what acts did he particularly perform in "intervening" in connection with such "matter"?
"Although a precise definition of "matter" as used in the Disciplinary Rule is difficult to formulate, the term seems to contemplate a discrete and isolatable transaction or set of transactions between identifiable parties. Perhaps the scope of the term "matter" may be indicated by examples. The same lawsuit or litigation is the same matter. The same issue of fact involving the same parties and the same situation or conduct is the same matter. By contrast, work as a government employee in drafting, enforcing or interpreting government or agency procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify the lawyer under DR 9-101 (B) from subsequent private employment involving the same regulations, procedures, or points of law; the same "matter" is not involved because there is lacking the discrete, identifiable transaction or conduct involving a particular situation and specific parties.In the case at bar, the Court's task is to determine whether Special Proceedings No. 107812 falls within the concept of "matter." This must be analyzed in relation with Civil Case No. 0096. Anent Civil Cases Nos. 0097, 0098 and 0099, there is no doubt that they do not involve the shares of stocks of Tan et al. in Allied Bank. Thus, only Special Proceedings No. 107812 and Civil Case No. 0096 must be considered.
"But more important, the "matter" involved in Sp. Proc. No. 107812 is entirely different from the "matter" involved in Civil Case No. 0096. Again the bald facts speak for themselves. It is given that Atty. Mendoza had nothing to do with the decision of the Central Bank to liquidate GENBANK. It is also given that he did not participate in the sale of GENBANK to Allied Bank. 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 Sp. Proc. No. 107812 in the then Court of First Instance. The subject "matter" Sp. Proc. No. 107812, however, is not the same nor related to but different from the subject "matter" in Civil Case No. 0096. Civil Case No. 0096 involves the sequestration of the stocks owned by 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 Allied Bank. Whether the shares of stocks 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 banking malpractices of its owners and officers. In other words, the legality of the liquidation of GENBANK is not an issue in the sequestration cases. Indeed, the jurisdiction of the PCGG does not include the dissolution and liquidation of banks. It goes without saying that Code 6.03 of the Code of Professional Responsibility cannot apply to Atty. Mendoza because his alleged intervention while a Solicitor General in Sp. Proc. No. 107812 is an intervention on a matter different from the matter involved in Civil Case No. 0096."As Solicitor General, Atty. Mendoza represented the Republic of the Philippines in every case where it was involved. As a matter of practice and procedure, he signed every pleading prepared by his Associates. Taking this into consideration, will it be just to disqualify him in all the cases containing pleadings bearing his signature? The answer must be in the negative. His disqualification might be too harsh a penalty for one who had served the government during the best years of his life and with all his legal expertise.
A lawyer shall not accept private employment in a manner in which he had "substantial responsibility" while he was a public employee.Substantial responsibility envisages a lawyer having such a heavy responsibility for the matter in question that it is likely he becomes
"Like the case law, policy considerations do not support the disqualification of a government attorney merely because during his government service he had access to information about a corporation which subsequently turned out to become an opponent in a private lawsuit. If the law were otherwise, the limiting language of the Disciplinary Rule could be bypassed altogether by the simple claim that an attorney may have viewed confidential information while employed by the government, and government lawyers would face perpetual disqualification in their subsequent practices."In fine, I fully concur in Justice Puno's Dissent that "Rule 6.03 of the Code of Professional Responsibility cannot apply to Atty. Mendoza because his alleged intervention while a Solicitor General in Special Proceedings No. 107812 is an intervention in a matter different from the matter involved in Civil Case No. 0096.
"Sec. 47. Effect of judgments or final orders.The above provision comprehends two distinct concepts of res judicata: (1) bar by former judgment and (2) conclusiveness of judgment. Under the first concept, res judicata serves as an absolute proscription of a subsequent action when the following requisites concur: (1) the former judgment or order was final; (2) it adjudged the pertinent issue or issues on their merits; (3) it was rendered by a court that had jurisdiction over the subject matter and the parties; and (4) between the first and the second actions, there was identity of parties, of subject matter, and of causes of action.[2]
" The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:"(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and x x x x x x x x x
"(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto."
"Ā§28. Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:In accordance with the above exception to the rule, Justice Morales believes that the doctrine of conclusiveness of judgment does not apply to this case, because the issue at bar -- disqualification of counsel -- "is undoubtedly a legal question" and "Civil Case No. 005 and Civil Case No. 0096 involve two different substantially unrelated claims."x x x x x x x x x
(2) The issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account or an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws; x x x. [Emphasis and omissions in the original.]"
"It is a general rule common to all civilized system of jurisprudence, that the solemn and deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of facts, should be regarded as a final and conclusive determination of the question litigated, and should forever set the controversy at rest. Indeed, it has been well said that this maxim is more than a mere rule of law, more than an important principle of public policy: and that it is not too much to say that it is a fundamental concept in the organization of the jural sytem. Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. The very object for which courts were constituted was to put an end to controversies."[43]WHEREFORE, I vote to DISMISS the Petition.
"The order of the trial court dismissing petitioner's counterclaim was a final order since the dismissal, although based on a technicality, would require nothing else to be done by the court with respect to that specific subject except only to await the possible filing during the reglementary period of a motion for reconsideration or the taking of an appeal therefrom."The Court further said that errors of judgment, as well as procedure, that do not relate to the jurisdiction of the court or involve grave abuse of discretion are reviewable by timely appeal, not by a special civil action for certiorari, unless for valid and compelling reasons.
"Art. 92. When and how penalties prescribe. - The penalties imposed by final sentence prescribe as follows:See also Act No. 3326, as amended.
- Death and reclusion perpetua, in twenty years;
- Other afflictive penalties, in fifteen years;
- Correctional penalties, in ten years; with the exception of the penalty of arresto mayor, which prescribes in five years;
- Light penalties, in one year."
Petitioners argue that inquiry into their right to bring this suit is barred by the doctrine of "law of the case." We do not think this doctrine is applicable considering the fact that while this case is a sequel to G.R. No. 113375, it is not its continuation: The doctrine applies only when a case is before a court a second time after a ruling by an appellate court. Thus in People v. Pinuila, 103 Phil. 992 999 (1958), it was stated:The doctrine of law of the case does not, I believe, apply to the present case for this is the first time that the issue to disqualify Atty. Mendoza has been elevated before this Court. It is the decision in this case which will be the law of the case. A reading of Republic v. Sandiganbayan[4] cited by Justice Sandoval-Gutierrez shows that the issue currently before this Court was not passed upon. Thus, this Court in Republic v. Sandiganbayan stated:
"'Law of the case' has been defined as the opinion delivered on a former appeal. More specifically, it means that whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of these case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be facts of the case before the court." (21 C.J.S. 330)
"It may be stated as a rule of general application that, where the evidence on a second or succeeding appeal is substantially the same as that on the first or preceding appeal, all matters, questions, points, or issues adjudicated on the prior appeal are the law of the case on all subsequent appeals and will not be considered or re-adjudicated therein. (5 C.J.S. 1267)
"In accordance with the general rule stated in Section 1821, where after a definite determination, the court has remanded the cause for further action below, it will refuse to examine question other than those arising subsequently to such determination and remand, or other than the propriety of the compliance with its mandate; and if the court below has proceeded in substantial conformity to the directions of the appellate court, its action will not be questioned on a second appeal . . .
"As a general rule a decision on a prior appeal of the same is held to be the law of the case whether that decision is right or wrong, the remedy of the party deeming himself aggrieved to seek a rehearing. (5 C.J.S. 1276-77)
"Questions necessarily involved in the decision on a former appeal will be regarded as the law of the case on a subsequent appeal, although the questions are not expressly treated in the opinion of the court, as the presumption is that all the facts in the case bearing on the point decided have received due consideration whether all or none of them are mentioned in the opinion. (5 C.J.S. 1286-87)"
As this Court explained in another case. "The law of the case, as applied to a former decision of an appellate court, ,merely expresses the practice of the courts in refusing to reopen what has been decided. It differs from res judicata in that the conclusive of the first judgment is not dependent upon its finality. The first judgment is generally, if not universally, not final, It relates entirely to questions of law, and is confined in its questions of law, and is confined in its operation to subsequent proceedings in the same case . . . ." (Municipality of Daet v. Court of Appeals, 93 SCRA 503, 521 (1979))
It follows that since the present case is not the same one litigated by he parties before in G.R. No. 113375, the ruling there cannot in any sense be regarded as "the law of this case." The parties are the same but the cases are not.
Nor is inquiry into petitioners; right to maintain this suit foreclosed by the related doctrine of "conclusiveness of judgment."[3] According to the doctrine, an issue actually and directly passed upon and determined in a former suit cannot again be drawn in question in any future action between the same parties involving a different of action. (PeƱalosa v. Tuason, 22 Phil. 303, 313 (1912); Heirs of Roxas v. Galido, 108. 582 [1960])
It has been held that the rule on conclusiveness of judgment or preclusion of issues or collateral estoppel does not apply to issues of law, at least when substantially unrelated claims are involved. (Montana v. United States, 440 U.S. 147, 162, 59 L. Ed. 2d 210, 222 (1979); BATOR, MELTZER, MISHKIN AND SHAPIRO, THE FEDERAL COURTS AND THE FEDERAL SYSTEM 1058, n. 2 (3rd Ed., 1988)) Following this ruling it was held in Commissioner v. Sunnen, 333 U.S. 591, 92 L. Ed. 898 (1947) that where a taxpayer assigned to his wife interest in a patent in 1928 and in a suit it was determined that the money paid to his wife for the years 1929-1931 under the 1928 assignment was not part of his taxable income, this determination is not preclusive in a second action for collection of taxes on amounts to his wife under another deed of assignment for other years (1937 to 1941). For income tax purposes what is decided with respect to one contract is not conclusive as to any other contract which was not then in issue, however similar or identical it may be. The rule on collateral estoppel it was held, "must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first preceding and where the controlling facts and applicable legal rules remain unchanged." (333 U.S. at 599-600, 92 L. Ed. at 907) Consequently, "if the relevant facts in the two cases are separate even though they may be similar or identical, collateral estoppel does not govern the legal issues which occur in the second case. Thus the second proceeding may involve an instrument or transaction identical with but in a form separable form, the one dealt with in the first proceeding. In that situation a court is free in the second proceeding to make an independent examination of the legal matters at issue. . . ." (333 U.S. at 601, 92 L. Ed. at 908)
This exception to the General Rule of the Issue Preclusion is authoritatively formulated in Restatement of the Law 2d, on Judgments, as follows:
Ā§28. Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:
. . . .
(2) The issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws; . . .
Illustration:
. . . .
2. A brings an action against the municipality of B for tortious injury. The court sustain B's defense of sovereign immunity and dismisses the action. Several years later A brings the second action against B for an unrelated tortious injury occurring after the dismissal. The judgment in the first action is not conclusive on the question whether the defense immunity is available to B. Note: The doctrine of stare decisis may lead the court to refuse to reconsider the question of sovereign immunity. See Ā§29, Comment i.
The question whether the petitioners have standing to question the Equipment or ELA is a legal question. As will presently be shown, the ELA, which the petitioners seek to declare invalid in this proceeding, is essentially different from the 1993 Contract of lease entered into by the PCSO with the PGMC. Hence the determination in the prior case (G.R. No. 113375) that the petitioner had standing to challenge the validity of the 1993 Contract of Lease of the parties does not preclude determination of their standing in the present suit. (Emphasis and underscoring supplied; italics in the original)
The key issues, in query form, are:I also believe that the doctrine of conclusiveness of judgment does not apply since in the case at bar, the question of whether the motion to disqualify Atty. Mendoza should be granted is undoubtedly a legal question. Moreover, Civil Case No. 005 and Civil Case No. 0096 involve two different substantially unrelated claims.
(1) Was the SANDIGANBAYAN's denial of the PCGG's motion to dismiss proper?
(2) Should the SANDIGANBAYAN have disposed first such motion to dismiss rather than resolving it as part of the judgment?
(3) Was the nullification of the sequestration order issued against SIPALAY and of the search and seizure order issued against ALLIED correct?
(4) Were the sequestration and search and seizure orders deemed automatically lifted for failure to bring an action in court against SIPALAY and ALLIED within the constitutionally prescribed period?[5]
Provisional; interim; temporary; not final. Something intervening between the commencement and the end of a suit which decides some point or matter, but is not a final decision of the whole controversy. An interlocutory order or decree is one which does not finally determine a cause of action but only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on the merits.[6] (Emphasis and underscoring supplied)Justice Oscar M. Herrera, an authority in remedial law, distinguishes between a final judgment and interlocutory order in this wise:
The concept of final judgment, as distinguished from one which has become final or executory as of right (final and executory), is definite and settled. A final judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial, declares categorically what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move (which among others, may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes final, or to use the established and more distinctive term, final and executory. (Investment, Inc. v. Court of Appeals cited in Denso [Phils.], Inc. v. Intermediate Appellate Court, 148 SCRA 280; see also Bank of America NT & SA, G.R. No. 78017, June 8, 1990 186 SCRA 417)Justice Florenz D. Regalado is of the same view:
An interlocutory order refers to something between the commencement and end of the suit which decides some point or matter but it is not the final decision of the whole controversy.[7] (Bitong v. Court of Appeals, G.R. No. 123553, July 13, 1998, 96 SCAD 205) (Emphasis and underscoring supplied)
An order is considered interlocutory if it does not dispose of the case but leaves something else to be done by the trial court on the merits of the case. An order is final, for purposes of appeal, if it disposes of the entire case.Another respected scholar of remedial law, Justice Jose Y. Feria, has formulated this guideline in determining whether an order is final or interlocutory:
Where the order is interlocutory, the movant has to wait for the judgment and then appeal from the judgment, in the course of which appeal he can assign as error the said interlocutory order. The interlocutory order cannot be appealed from separately from the judgment. The general rule is that where the interlocutory order was rendered without or in excess of jurisdiction or with grave abuse of discretion, the remedy is certiorari, prohibition or mandamus depending on the facts of the case.
Where the order appealed from is interlocutory, the appellate court can dismiss the appeal even if no objection thereto was filed by the appellee in either the trial or appellate court.[8] (Emphasis and underscoring supplied)
The test to ascertain whether or not an order or a judgment is interlocutory or final: Does it leave something to be done in the trial court with respect to the merits of the case? If it does, it is interlocutory; if it does not, it is final. The key test to what is interlocutory is when there is something more to be done on the merits of the case.[9] (Emphasis and underscoring)In fact, this same test was used in Tambaoan v. Court of Appeals,[10] cited by Justice Panganiban to determine whether the trial court's order was interlocutory or final:
In this particular instance, the test to determine whether the order of 06 January 1995 is interlocutory or final would be: Does it leave something else to be done by the trial court on the case? If it does, it is interlocutory, if it does not, it is final. Evidently, the trial court would still have to hear the parties on the merits of the case...Applying the foregoing test, it is clear that the order denying PCGG's motion to disqualify Atty. Mendoza is interlocutory because it does not finally dispose of the case.
x x x
Indeed, the word "interlocutory" refers to "something intervening between the commencement and the end of a suit which decides some point or matter, but is not a final decision of the whole controversy." An interlocutory order does not terminate nor does it finally dispose of the is (sic) case; it does not end the task of the court in adjudicating the parties' contentions and determining their rights and liabilities as against each other but leaves something yet to be done by the court before the case is finally decided on its merits. (Emphasis and underscoring supplied)
Under Ā§ 1291, the courts of appeals are vested with "jurisdiction of appeals from all final decisions of the district courts ... except where a direct review may be had in the Supreme Court." We have consistently interpreted this language as indicating that a party may not take an appeal under this section until there has been "a decision by the District Court that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment."' Coopers s & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). This rule, that a party must ordinarily raise all claims of error in a single appeal following final judgment on the merits, serves a number of important purposes. It emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of a trial. Permitting piecemeal appeals would undermine the independence of the district judge, as well as the special role that individual plays in our judicial system. In addition, the rule is in accordance with the sensible policy of "avoid[ing] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from its initiation to entry of judgment." Cobbledick v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940). See DiBella v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656, 7 L.Ed.2d 614 (1962). The rule also serves the important purpose of promoting efficient judicial administration. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170, 94 S.Ct. 2140, 2149, 40 L.Ed.2d 732 (1974).The ruling in Firestone was subsequently reiterated in Flanagan v. United States[14] and Richardson-Merrell, Inc. v. Koller.[15]
Our decisions have recognized, however, a narrow exception to the requirement that all appeals under Ā§ 1291 await final judgment on the merits. In Cohen v. Beneficial Industrial Loan Corp., supra, we held that a "small class" of orders that did not end the main litigation were nevertheless final and appealable pursuant to Ā§ 1291. Cohen was a shareholder's derivative action in which the Federal District Court refused to apply a state statute requiring a plaintiff in such a suit to post security for costs. The defendant appealed the ruling without awaiting final judgment on the merits, and the Court of Appeals ordered the trial court to require that costs be posted. We held that the Court of Appeals properly assumed jurisdiction of the appeal pursuant to Ā§ 1291 because the District Court's order constituted a final determination of a claim "separable from, and collateral to," the merits of the main proceeding, because it was "too important to be denied review," and because it was "too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Id., at 546, 69 S.Ct. at 1225. Cohen did not establish new law; rather, it continued a tradition of giving " 1291 a "practical rather than a technical construction." Ibid. See, e.g., United States v. River Rouge Improvement Co., 269 U.S. 411, 413-414, 46 S.Ct. 144, 70 L.Ed. 339 (1926); Bronson v. LaCrosse & Milwaukee R. Co., 67 U.S. 524-531, 2 Black 524, 530-531, 17 L.Ed. 347 (1863); Forgay v. Conrad, 47 U.S. 201, 203, 6 How. 201, 203, 12 L.Ed.2d 404 (1848); Whiting v. Bank of the United States, 38 U.S. 6, 15, 13 Pet. 6, 15, 10 L.Ed. 33 (1839). We have recently defined this limited class of final "collateral orders" in these terms: "[T]he order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, supra, 437 U.S. at 468, 98 S.Ct. at 2457 (footnote omitted). See Abney v. United States, 431 U.S. 651, 658, 97 S.Ct. 2034, 2039, 52 L.Ed.2d 651 (1977).
[1] Because the litigation from which the instant petition arises had not reached final judgment at the time the notice of appeal was filed. [FN11] the order denying petitioner's motion to disqualify respondent is appealable under Ā§ 1291 only if it falls within the Cohen doctrine. The Court of Appeals held that it does not, and 5 of the other 10 Circuits have also reached the conclusion that denials of disqualification motions are not immediately appealable "collateral orders." [FN12] We agree with these courts that under Cohen such an order is not subject to appeal prior to resolution of the merits.
FN11. Counsel for respondent represented at oral argument in this Court that the case was, at that time, in the discovery stage. Tr. of Oral Arg. 35-36.
FN12. See n. 10, supra.
An order denying a disqualification motion meets the first part of the "collateral order" test. It "conclusively determine[s] the disputed question," because the only issue is whether challenged counsel will be permitted to continue his representation. In addition, we will assume, although we do not decide, that the disqualification question "resolve [s] an important issue completely separate from the merits of the action," the second part of the test. Nevertheless, petitioner is unable to demonstrate that an order denying disqualification is "effectively unreviewable on appeal from a final judgment" within the meaning of our cases.
In attempting to show why the challenged order will be effectively unreviewable on final appeal, petitioner alleges that denying immediate review will cause it irreparable harm. It is true that the finality requirement should "be construed so as not to cause crucial collateral claims to be lost and potentially irreparable injuries to be suffered," Mathews v. Eldridge, 424 U.S. 319, 331, n. 11, 96 S.Ct. 893, 901, n. 11, 47 L.Ed.2d 18 (1976). In support of its assertion that it will be irreparably harmed, petitioner hints at "the possibility that the course of the proceedings may be indelibly stamped or shaped with the fruits of a breach of confidence or by acts or omissions prompted by a divided loyalty," Brief for Petitioner 15, and at "the effect of such a tainted proceeding in frustrating public policy," id., at 16. But petitioner fails to supply a single concrete example of the indelible stamp or taint of which it warns. The only ground that petitioner urged in the District Court was that respondent might shape the products-liability plaintiffs' claims for relief in such a way as to increase the burden on petitioner. Our cases, however, require much more before a ruling may be considered "effectively unreviewable" absent immediate appeal
[2] To be appealable as a final collateral order, the challenged order must constitute "a complete, formal and, in the trial court, final rejection," Abney v. United States, supra, 431 U.S. at 659, 97 S.Ct. at 2040, of a claimed right "where denial of immediate review would render impossible any review whatsoever," United States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971). Thus we have permitted appeals prior to criminal trials when a defendant has claimed that he is about to be subjected to forbidden double jeopardy, Abney v. United States, supra, or a violation of his constitutional right to bail, Stack v. Boyle, 342 U.S. 1, 72 S.Ct. 1, 96 L.Ed. 3 (1951) because those situations, like the posting of security for costs involved in Cohen, "each involved an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial." United States v. MacDonald, 435 U.S. 850, 860, 98 S.Ct. 1547, 1552, 56 L.Ed.2d 18 (1978). By way of contrast, we have generally denied review of pretrial discovery orders, see, e. g., United States v. Ryan, supra; Cobbledick v. United States, supra. Our rationale has been that in the rare case when appeal after final judgment will not cure an erroneous discovery order, a party may defy the order, permit a contempt citation to be entered against him, and challenge the order on direct appeal of the contempt ruling. See Cobbledick v. United States, supra, at 327, 60 S.Ct. at 542. We have also rejected immediate appealability under Ā§ 1291 of claims that "may fairly be assessed" only after trial, United States v. MacDonald, supra, at 860, and those involving "considerations that are 'enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Coopers & Lybrand v. Livesay, 437 U.S., at 469, 98 S.Ct., at 2458, quoting Mercantile National Bank v. Langdeau, 371 U.S. 555, 558, 83 S.Ct. 520, 522, 9 L.Ed.2d 523 (1963).
An order refusing to disqualify counsel plainly falls within the large class of orders that are indeed reviewable on appeal after final judgment, and not within the much smaller class of those that are not. The propriety of the district court's denial of a disqualification motion will often be difficult to assess until its impact on the underlying litigation may be evaluated, which is normally only after final judgment. The decision whether to disqualify an attorney ordinarily turns on the peculiar factual situation of the case then at hand, and the order embodying such a decision will rarely, if ever, represent a final rejection of a claim of fundamental right that cannot effectively be reviewed following judgment on the merits. In the case before us, petitioner has made no showing that its opportunity for meaningful review will perish unless immediate appeal is permitted. On the contrary, should the Court of Appeals conclude after the trial has ended that permitting continuing representation was prejudicial error, it would retain its usual authority to vacate the judgment appealed from and order a new trial. That remedy seems plainly adequate should petitioner's concerns of possible injury ultimately prove well founded. As the Second Circuit has recently observed, the potential harm that might be caused by requiring that a party await final judgment before it may appeal even when the denial of its disqualification motion was erroneous does not "diffe[r] in any significant way from the harm resulting from other interlocutory orders that may be erroneous, such as orders requiring discovery over a work-product objection or orders denying motions for recusal of the trial judge." Armstrong v. McAlpin, 625 F.2d 433, 438 (1980), cert. pending, No. 80-431. But interlocutory orders are not appealable "on the mere ground that they may be erroneous." Will v. United States, 389 U.S. 90, 98, n. 6, 88 S.Ct. 269, 275, n. 6, 19 L.Ed.2d 305 (1967). Permitting wholesale appeals on that ground not only would constitute an unjustified waste of scarce judicial resources, but also would transform the limited exception carved out in Cohen into a license for broad disregard of the finality rule imposed by Congress in Ā§ 1291. This we decline to do. [FN13]
FN13. Although there may be situations in which a party will be irreparably damaged if forced to wait until final resolution of the underlying litigation before securing review of an order denying its motion to disqualify opposing counsel, it is not necessary, in order to resolve those situations, to create a general rule permitting the appeal of all such orders. In the proper circumstances, the moving party may seek sanctions short of disqualification, such as a protective order limiting counsel's ability to disclose or to act on purportedly confidential information. If additional facts in support of the motion develop in the course of the litigation, the moving party might ask the trial court to reconsider its decision. Ultimately, if dissatisfied with the result in the District Court and absolutely determined that it will be harmed irreparably, a party may seek to have the question certified for interlocutory appellate review pursuant to 28 U.S.C. Ā§ 1292(b), see n. 7, supra, and, in the exceptional circumstances for which it was designed, a writ of mandamus from the court of appeals might be available. See In re Continental Investment Corp., supra, 637 F.2d, at 7; Community Broadcasting of Boston, Inc. v. FCC, 178 U.S.App.D.C., at 262, 546 F.2d, at 1028. See generally Comment, The Appealability of Orders Denying Motions for Disqualification of Counsel in the Federal Courts, 45 U.Chi.L.Rev. 450, 468-480 (1978). We need not be concerned with the availability of such extraordinary procedures in the case before us, because petitioner has made no colorable claim that the harm it might suffer if forced to await the final outcome of the litigation before appealing the denial of its disqualification motion is any greater than the harm suffered by any litigant forced to wait until the termination of the trial before challenging interlocutory orders it considers erroneous.III
[3][4][5] We hold that a district court's order denying a motion to disqualify counsel is not appealable under Ā§ 1291 prior to final judgment in the underlying litigation. [FN14]
FN14. The United States in its brief amicus curiae, has challenged petitioner's standing to attack the order permitting respondent to continue his representation of the plaintiffs. In light of our conclusion that the Eighth Circuit was without jurisdiction to hear petitioner's appeal, we have no occasion to address the standing issue.[13] (Emphasis and underscoring supplied; italics in the original)
The practice of law is a profession, a form of public trust, the performance of which is entrusted only to those who are qualified and who possess good moral character. If the respect of the people in the honor and integrity of the legal profession is to be retained, both lawyers and laymen must recognize and realize that the legal profession is a profession and not a trade, and that the basic ideal of that profession is to render public service and secure justice for those who seek its aid. It is not a business, using bargain counter methods to reap large profits for those who conduct it. From the professional standpoint, it is expressive of three ideals - organization, learning and public service. The gaining of a livelihood is not a professional but a secondary consideration. The professional spirit - the spirit of public service - constantly curbs the urge of that instinct.Moreover, the relation of attorney and client is, however, one of trust and confidence of the highest order. It is highly fiduciary in nature and demands utmost fidelity and good faith.
The law as a profession proceeds from the basic premise that membership in the bar is a privilege burdened with conditions and carries with it the responsibility to live up to its exacting standards and honored traditions. A person enrolled in its ranks is called upon to aid in the performance of one of the basic purposes of the state - the administration of justice. That the practice of law is a profession explains why lawyers repute and of eminence welcome their designation as counsel de oficio, as an opportunity to manifest fidelity to the concept that law is a profession.
The law must be thought of as ignoring commercial standards of success. The lawyer's conduct is to be measured not by the standards of trade and counting house but by those of his profession. The Code of Professional Responsibility, particularly the ethical rule against advertising or solicitation of professional employment, rests on the fundamental postulate that the practice of law is a profession.
In the matter of fixing his fees, an attorney should never forget that "the profession is a branch of the administration of justice and not a mere money-making trade" and that his standing as a member of the bar "is not enhanced by quibbling relative to just fees, equivalent to the bargaining between a prospective purchaser and a merchant in the market before a sale is made." Law advocacy is not capital that yields profits. The returns are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from government interference, is impressed with public interest, for which it is subject to State regulation. However, while the practice of law is a profession and an attorney is primarily an officer of the court, he is as much entitled to protection from the against any attempt by his client to escape payment of his just fees, as the client against exaction by his counsel of excessive fees.
To summarize, the primary characteristics which distinguish the legal profession from business are: (a) "a duty of public service, of which emolument is a by-product, and in which one may attain the highest eminence without making much money;" (b) "a relation as officer of the court to the administration of justice involving thorough sincerity, integrity, and reliability;" (c) "a relation to client in the highest degree fiduciary;" and (d) "a relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and encroachment on their practice, or dealing directly with their clients.
These characteristics make the law a noble profession, and the privilege to practice it is bestowed only upon individuals who are competent intellectually, academically and morally. Its basic ideal is to render service and to secure justice for those who seek its aid. If it has to remain a noble and honorable profession and attain its ideal, those enrolled in its ranks should not only master its tenets and principles but should also, by their lives, accord continuing fidelity to them. And because they are the vanguards of the law and the legal systems, lawyers must at all times conduct themselves in their professional and private dealings with honesty and integrity in a manner beyond reproach.[16]
... A lawyer becomes familiar with all the facts connected with his client's case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the client's secrets.Thus, in Nakpil v. Valdes,[18] this Court through Justice Reynato S. Puno held that the test to determine whether there is a conflict of interest in the representation is probability, not certainty of conflict.[19]
The rule is a rigid one designed not alone to prevent the dishonest practitioner from fraudulent conduct but as well to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting duties, and to protect him from unfounded suspicion of professional misconduct. The question is not necessarily one of right of the parties but of adhere to proper professional standards. An attorney should not only keep inviolate his client's confidence but should likewise avoid the appearance of treachery and double-dealing.[17] (Emphasis and underscoring supplied; citations omitted)
Modesty aside, in my nearly ten (10) years in this Court, I have disposed of about a thousand cases in full-length ponencias and countless cases by way of unsigned minute or extended Resolutions. This does not include the thousands of other cases, assigned to other members of the Court, in which I actively took part during their deliberations. In all honesty, I must admit that I cannot with certainty recall the details of the facts and issues in each of these cases, especially in their earlier ones.While it is true that over time memory does fade, the ravages of time have been mitigated with the invention of the paper and pen and its modern offspring - the computer. It is not uncommon for lawyers to resort to note taking in the course of handling legal matters.
A profession, trade or calling is a property within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.Under the foregoing, the perpetual application of Rule 6.03 is clearly a valid and proper regulation.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. (Emphasis and underscoring supplied; italics in the original; citations omitted)
The Code of Professional Responsibility is not designed for Holmes' proverbial "bad man" who wants to know just how many corners he may cut, how close to the line he may play, without running into trouble with the law. Rather, it is drawn for the "good man" as a beacon to assist him in navigating an ethical course through the sometimes murky waters of professional conduct.[1]With due respect, I dissent from the majority opinion. I believe that the present case behooves the Court to strictly apply the Code of Professional Responsibility and provide an ethical compass to lawyers who, in the pursuit of the profession, often find themselves in the unchartered sea of conflicting ideas and interests. There is certainly, without exception, no profession in which so many temptations beset the path to swerve from the line of strict integrity; in which so many delicate and difficult questions of duty are continually arising.[2] The Code of Professional Responsibility establishes the norms of conduct and ethical standards in the legal profession and the Court must not shirk from its duty to ensure that all lawyers live up to its provisions. Moreover, the Court must not tolerate any departure from the "straight and narrow" path demanded by the ethics of the legal profession and enjoin all lawyers to be like Caesar's wife - to be pure and appear to be so.[3]
In all these cases, respondents Tan, et al. are represented by their counsel Atty. Estelito P. Mendoza, who served as the Solicitor General from 1972 to 1986 during the administration of former President Marcos.
- Civil Case No. 0096 - Lucio Tan, Mariano Tanenglian, Allied Banking Corp., Iris Holding and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated June 19, 1986 sequestering the shares of stock in Allied Banking Corporation held by and/or in the name of respondents Lucio Tan, Mariano Tanenglian, Iris Holding and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc.;
- Civil Case No. 0097 - Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr., and Foremost Farms, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated August 12, 1986 sequestering the shares of stock in Foremost Farms, Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad Santos and Florencio N. Santos, Jr.;
- Civil Case No. 0098 - Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc. and Fortune Tobacco Corp. v. PCGG, which seeks to nullify the PCGG's Order dated July 24, 1986 sequestering the shares of stock in Fortune Tobacco Corp. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc.; and
- Civil Case No. 0099 - Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos and Shareholdings, Inc. v. PCGG, which seeks to nullify the PCGG's Order dated July 24, 1986 sequestering the shares of stock in Shareholdings, Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos and Natividad Santos.
Atty. Mendoza allegedly "intervened" in the acquisition of GENBANK by respondents Tan, et al. since Atty. Mendoza, in his capacity as the Solicitor General, advised the Central Bank's officials on the procedure to bring about GENBANK's liquidation. Further, he appeared as counsel for the Central Bank in connection with its petition for assistance in the liquidation of GENBANK. He filed the said petition with the Court of First Instance (now Regional Trial Court) of Manila and docketed therein as Special Proceeding No. 107812.[7]
- In 1976, General Bank and Trust Company (GENBANK) got into financial difficulties. The Central Bank then extended an emergency loan to GENBANK reaching a total of P310 million. In extending this loan, the Central Bank, however, took control of GENBANK with the execution of an irrevocable proxy by 2/3 of GENBANK's outstanding shares in favor of the Central Bank and the election of seven (7) Central Bank nominees to the 11-member Board of Directors of GENBANK. Subsequently, on March 25, 1977, the Monetary Board of the Central Bank issued a Resolution declaring GENBANK insolvent, forbidding it to do business and placing it under receivership.
- In the meantime, a public bidding for the sale of GENBANK assets and liabilities was scheduled at 7:00 P.M. on March 28, 1977. Among the conditions for the bidding were: (a) submission by the bidder of a letter of credit issued by a bank acceptable to Central Bank to guaranty payment or as collateral of the Central Bank emergency loan; and (b) a 2-year period to repay the said Central Bank emergency loan. On March 29, 1977, the Central Bank, through a Monetary Board Resolution, approved the bid of the group of respondents Lucio Tan and Willy Co. This bid, among other things, offered to pay only P500,000.00 for GENBANK assets estimated at P688,201,301.45; Capital Accounts of P103,984,477.55; Cash of P25,698,473.00; and the takeover of the GENBANK Head Office and branch offices. The required letter of credit was also not attached to the bid. What was attached to the bid was a letter of Panfilo O. Domingo, as PNB President, promising to open an irrevocable letter of credit to secure the advances of the Central Bank in the amount of P310 million. Without this letter of commitment, the Lucio Tan bid would not have been approved. But such letter of commitment was a fraud because it was not meant to be fulfilled. Ferdinand E. Marcos, Gregorio Licaros and Panfilo O. Domingo conspired together in giving the Lucio Tan group undue favors such as the doing away with the required irrevocable letter of credit, the extension of the term of payment from two years to five years, the approval of second mortgage as collateral for the Central Bank advances which was deficient by more than P90 Million, and many other concessions to the great prejudice of the government and of the GENBANK stockholders.
- GENBANK eventually became the Allied Banking Corporation in April 1977. Respondents Lucio Tan, Willy S. Co and Florencio T. Santos are not only incorporators and directors but they are also the major shareholders of this new bank.[6]
Acting on the PCGG's "MOTION TO DISQUALIFY ATTY. ESTELITO P. MENDOZA AS COUNSEL FOR PETITIONER" dated February 5, 1991 which appears not to have been resolved by then Second Division of this Court, and it appearing that (1) the motion is exactly the same in substance as that motion filed in Civil Case No. 0005 as in fact, Atty. Mendoza in his "OPPOSITION" dated March 5, 1991 manifested that he was just adopting his opposition to the same motion filed by PCGG in Civil Case No. 0005 and (2) in the Court's Order dated March 7, 1991, the herein incident was taken-up jointly with the said same incident in Civil Case No. 0005 (pp. 134-135, Vol. I, Record of Civil Case No. 0096), this Division hereby reiterates and adopts the Resolution dated April 22, 1991 in Civil Case No. 0005 of the Second Division (pp. 1418-1424, Vol. III, Record of Civil Case No. 0005) denying the said motion as its Resolution in the case at bar.[8]The PCGG sought the reconsideration thereof but its motion was denied in the assailed Resolution dated December 5, 2001, which reads:
Acting on respondent PCGG's "MOTION FOR RECONSIDERATION" dated August 1, 2001 praying for the reconsideration of the Court's Resolution dated July 12, 2001 denying its motion to disqualify Atty. Estelito P. Mendoza as counsel for petitioners, to which petitioners have filed an "OPPOSITION TO MOTION FOR RECONSIDERATION DATED AUGUST 1, 2001" dated August 29, 2001, as well as the respondent's "REPLY (To Opposition to Motion for Reconsideration) dated November 16, 2001, it appearing that the main motion to disqualify Atty. Mendoza as counsel in these cases was exactly the same in substance as that motion to disqualify Atty. Mendoza filed by the PCGG in Civil Case No. 0005 (re: Republic vs. Lucio Tan, et al.) and the resolutions of this Court (Second Division) in Civil Case No. 0005 denying the main motion as well as of the motion for reconsideration thereof had become final and executory when PCGG failed to elevate the said resolutions to the Supreme Court, the instant motion is hereby DENIED.[9]The Resolution[10] dated April 22, 1991 of the Sandiganbayan (Second Division) in Civil Case No. 0005, which was adopted by the Fifth Division in Civil Cases Nos. 0096-0099, denied the similar motion to disqualify Atty. Mendoza as counsel for respondents Tan, et al. holding, in essence, that the PCGG "has failed to prove that there exists an inconsistency between Atty. Mendoza's former function as Solicitor General and his present employment as counsel of the Lucio Tan group."[11] The Sandiganbayan (Second Division) explained, thus:
... It has been said that the test of inconsistency in cases of the character under consideration is not whether the attorney has ever appeared for the party against whom he proposes to appear, but whether his accepting the new retainer will require him, in forwarding the interests of his new client, to do anything which will injuriously affect his former client in any matter in which he formerly represented against him, and whether he will be called upon, in his new relation, to use against his former client any knowledge or information acquired through their former connection. Nor does the rule imposing disability on the attorney mean that he, having once been employed by a client, shall never thereafter appear in any matter against him but merely forbids the attorney's appearance or acting against the client where the attorney can use, to the detriment of such client, the information and confidences acquired during the existence of their relation as attorney and client (7 C.J.S., Pp. 828-829, cited in Primavera Farms, Inc., et al. vs. PCGG, supra). Significantly, PCGG's "Reply" does not controvert Atty. Mendoza's claim that in appearing in the instant case, he does not take a position adverse to that he had taken in behalf of the Central Bank of the Philippines in SP No. 107812. Neither did it challenge Atty. Mendoza's claim that the position he took as Solicitor General in behalf of the Central Bank in 1977 when he filed the said case (SP No. 107812) has been maintained by his successors in office. In fact, even incumbent Central Bank Governor Jose Cuisia had interposed no objection to Atty. Mendoza's appearance as counsel for the Lucio Tan group for as long as he maintains the same position he has taken on behalf of the Central Bank of the Philippines as Solicitor General, which position refers to the various resolutions of the Monetary Board and actions of the Central Bank in regard General Bank and Trust Co. as being regular and in accordance with law (Annex "A", Rejoinder, Records, Pp. 1404-1405).[12]The Sandiganbayan (Second Division) further observed that Atty. Mendoza's appearance as counsel for respondents Tan, et al. was well beyond the one-year prohibited period under Section 7(b) of Republic Act No. 6713 since he ceased to be the Solicitor General in the year 1986. The said provision prohibits a former public official or employee from practicing his profession in connection with any matter before the office he used to be with within one year from his resignation, retirement or separation from public office.
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.Section 7 of Presidential Decree No. 1606, as amended by Section 3 of Rep. Act No. 7975, likewise, states:
Sec. 7. Form, Finality and Enforcement of Decisions. -I am not persuaded by the arguments proffered by respondents Tan, et al. The above-mentioned rules do not preclude the resort to this Court by way of a petition for certiorari under Rule 65 of the Rules of Court of orders or resolutions of the Sandiganbayan. The special civil action of certiorari may be availed of where there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.[13]...
Decisions and final orders of the Sandiganbayan shall be appealable to the Supreme Court.
Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:The doctrine of res judicata comprehends two distinct concepts - (1) bar by former judgment and (2) conclusiveness of judgment.[18] Paragraph (b) embodies the doctrine of res judicata or res adjudicata or bar by prior judgment, while paragraph (c) estoppel by judgment or conclusiveness of judgment.[19] In Macahilig v. Heirs of Grace M. Magalit,[20] Justice Artemio Panganiban explained that the term "final" in the phrase judgments or final orders in the above section has two accepted interpretations. In the first sense, it is an order that one can no longer appeal because the period to do so has expired, or because the order has been affirmed by the highest possible tribunal involved.[21] The second sense connotes that it is an order that leaves nothing else to be done, as distinguished from one that is interlocutory.[22] The phrase refers to a final determination as opposed to a judgment or an order that settles only some incidental, subsidiary or collateral matter arising in an action; for example, an order postponing a trial, denying a motion to dismiss or allowing intervention. Orders that give rise to res judicata or conclusiveness of judgment apply only to those falling under the second category.[23]
...
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors-in-interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors-in-interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.
CANON 6 - THESE CANONS SHALL APPLY TO LAWYERS IN GOVERNMENT SERVICE IN THE DISCHARGE OF THEIR OFFICIAL DUTIES.A good number of the Canons in our present Code of Professional Responsibility were adopted from the Canons of Professional Ethics of the American Bar Association (ABA).[28] Rule 6.03, in particular, is a restatement of Canon 36 of the Canons of Professional Ethics which provided:
Rule 6.01 - The primary duty of a lawyer in public prosecution is not to convict but to see that justice is done. The suppression of facts or the concealment of witnesses capable of establishing the innocence of the accused is highly reprehensible and is cause for disciplinary action.
Rule 6.02 - A lawyer in government service shall not use his public position to promote or advance his private interests, nor allow the latter to interfere with his public duties.
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.
36. RETIREMENT FROM JUDICIAL POSITION OR PUBLIC EMPLOYMENT.Indeed, the restriction against a public official from using his public position as a vehicle to promote or advance his private interests extends beyond his tenure on certain matters in which he intervened as a public official.[29] Rule 6.03 makes this restriction specifically applicable to lawyers who once held public office. A plain reading of the rule shows that the interdiction (1) applies to a lawyer who once served in the government, and (2) relates to his accepting "engagement or employment in connection with any matter in which he had intervened while in said service."
A lawyer should not accept employment as an advocate in any matter upon the merits of which he has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ, should not after his retirement accept employment in connection with any matter which he has investigated or passed upon while in such office or employ.
Immediately after said meeting, we had a conference with the Solicitor General and he advised that the following procedure should be taken:The Minutes No. 13 dated March 29, 1977 of the Monetary Board likewise shows that Atty. Mendoza was furnished copies of pertinent documents relating to GENBANK in order to aid him in filing with the court the petition for assistance in the bank's liquidation. The pertinent portion of the said minutes reads:
- Management should submit a memorandum to the Monetary Board reporting that studies and evaluation had been made since the last examination of the bank as of August 31, 1976 and it is believed that the bank can not be reorganized or placed in a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public.
- If the said report is confirmed by the Monetary Board, it shall order the liquidation of the bank and indicate the manner of its liquidation and approve a liquidation plan.
- The Central Bank shall inform the principal stockholders of Genbank of the foregoing decision to liquidate the bank and the liquidation plan approved by the Monetary Board.
- The Solicitor General shall then file a petition in the Court of First Instance reciting the proceedings which had been taken and praying the assistance of the Court in the liquidation of Genbank.[41]
E. To authorize Management to furnish the Solicitor General with a copy of the subject memorandum of the Director, Department of Commercial and Savings Bank dated March 29, 1977, together with copies of:By advising the Central Bank on the procedure to bring about the liquidation of GENBANK and, more significantly, by filing the petition for assistance in its liquidation, Atty. Mendoza had clearly intervened in the liquidation of GENBANK and its subsequent acquisition by respondents Tan, et al.for his use in filing a petition in the Court of First Instance praying the assistance of the Court in the liquidation of Genbank."[42]
- Memorandum of the Deputy Governor, Supervision and Examination Sector, to the Monetary Board, dated March 25, 1977, containing a report on the current situation of Genbank;
- Aide Memoire on the Antecedent Facts Re: General Bank and Trust Co., dated March 23, 1977;
- Memorandum of the Director, Department of Commercial and Savings Bank, to the Monetary Board, dated March 24, 1977, submitting, pursuant to Section 29 of R.A. No. 265, as amended by P.D. No. 1007, a report on the state of insolvency of Genbank, together with its attachments; and
- Such other documents as may be necessary or needed by the Solicitor General.
1: to enter or appear as an irrelevant or extraneous feature or circumstance; 2: to occur, fall or come between points of time or events; 3: to come in or between by way of hindrance or modification: INTERPOSE; 4: to occur or lie between two things "[44]Further, "intervention" is defined as -
1: the act or fact of intervening: INTERPOSITION; 2: interference that may affect the interests of others ...[45]With the foregoing definitions, it is not difficult to see that by giving counsel to the Central Bank on how to proceed with GENBANK's liquidation and filing the necessary petition therefor with the court, Atty. Mendoza "had intervened," "had come in," or "had interfered," in the liquidation of GENBANK and the subsequent acquisition by respondents Tan, et al. of the said banking institution. Moreover, his acts clearly affected the interests of GENBANK as well as its stockholders.
A lawyer should avoid even the appearance of professional impropriety.Providing specificity to this general caveat, Disciplinary Rule (DR) 9-101(B) commands, thus:
A lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee.The purpose of the interdiction, as stated in the ABA Committee on Professional Ethics, Opinion No. 37, is -
"[to avoid] the manifest possibility that - [a former Government lawyer's] action as a public legal official might be influenced (or open to the charge that it had been influenced) by the hope of later being employed privately to uphold or upset what he had done.[46]The old Canon 36, as well as the present Canon 9 and DR9-101(B), rest on the policy consideration that an attorney must seek to avoid even the appearance of evil.[47]
To illustrate the normal rule for non-government lawyers, imagine that the lawyer has represented passenger A and has recovered substantial damages in a suit against a driver. No conflict of interest principle or rule restricts the lawyer from later representing passenger B against the driver with respect to exactly the same accident. B may obtain the benefits of the lawyer's help regardless of the fact that the lawyer might be able to employ to B's advantage information and strategies developed in the representation of A. The critical element is that the interest of A and B do not conflict.The rationale for the "congruent-interest representation conflict" doctrine has been explained, thus:
The analysis does not change if we move from an area that is entirely private into one that is arguably more connected with the public interest. Suppose a lawyer in private practice represents Small Soap Company in its suit for damages under the federal antitrust laws against Giant Soap Company. The lawyer would not be disqualified from representing Medium Soap Company against Giant Soap in a succeeding suit for damages based on precisely the same conspiracy. The congruence of interests between Small Soap and Medium Soap would almost certainly mean that the lawyer could represent both clients. In the absence of a conflict - an opposing interest between the two clients - the existence of a substantial relationship between the matters involved in both cases is irrelevant.
Now, suppose the lawyer has filed suit in behalf of the government against Giant Soap Company to force divestiture of an acquired company on a theory that, because of the acquisition, Giant Soap has monopolized an industry in conflict with antitrust laws. May the lawyer, after leaving government service and while in private practice, represent Medium Soap Company against Giant Soap in a suit for damages based on the same antitrust conspiracy? Does the absence of opposing interests between Medium Soap and the lawyer's former government client similarly mean that there should be no disqualification?
At this point, the rules for the former government lawyer diverge sharply from the normal former-client conflict rules: the lawyer is disqualified from representing the successive client in private practice, despite the fact that the interests of the client and the lawyer's former government client are apparently aligned. All that is required for disqualification is the relationship between the former and the succeeding representations.[52]
The rationale for disqualification is rooted in a concern with the impact that any other rule would have upon the decisions and actions taken by the government lawyer during the course of the earlier representation of the government. Both courts and commentators have expressed the fear that permitting a lawyer to take action in behalf of a government client that later could be to the advantage of private practice client would present grave dangers that a government lawyer's largely discretionary actions would be wrongly influenced by the temptation to secure private practice employment or to favor parties who might later become private practice clients ...The foregoing disquisition applies to the case of Atty. Mendoza. Indeed, a textual reading of Rule 6.03 of our Code of Professional Responsibility reveals that no conflict of interests or adverse interests is required for the interdiction to apply. If it were so, or if conflict of interests were an element, then the general conflict of interests rule (Rule 15.03)[54] would apply. Rather, the interdiction in Rule 6.03 broadly covers "engagement or employment in connection with any matter in which he had intervened while in the said service." To reiterate, the drafters of our Code of Professional Responsibility had construed this to mean that a lawyer "cannot accept any work or employment from anyone that will involve or relate to the matter in which he intervened as a public official, except on behalf of the body or authority which he served during his public employment."[55]
The fear that government lawyers will misuse government power in that way is not idle. Lawyers who represent the government often exercise enormous discretion unchecked by an actual client who oversees the lawyer's work. For that reason a special rule is needed to remove the incentive for government lawyers to take discretionary decisions with an eye cast toward advantages in future, nongovernmental employment. The broad disqualification accomplishes that and, particularly under rubrics that do not invariably require disqualification of the entire firm with which the former government lawyer practices, does it without unnecessarily discouraging lawyers from entering temporary public service.[53]
[D]isciplinary proceedings against lawyers are sui generis. Neither purely civil nor pure criminal, they do not involve a trial of an action or a suit, but are rather investigations by the Court into the conduct of one of its officers. Not being intended to inflict punishment, [they are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. [They] may be initiated by the Court motu propio. Public interest is [their] primary objective, and the real question for determination is whether or not the attorney is still a fit person be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end view of preserving the purity of the legal profession and the proper and honest administration of justice...[59]For this reason, the civil law concept of prescription of actions finds no application in disqualification cases against lawyers.
If the government service will tend to sterilize an attorney in too large an area of law for too long a time, or will prevent him from engaging in the practice of a technical specialty which he has devoted years in acquiring, and if that sterilization will spread to the firm which he becomes associated, the sacrifice of entering government service will be too great for most men to make.[63]Addressing this argument in General Motors, the same US court, through Justice Irving F. Kaufman, also the ponente of the Esso Export Case, distinguished the two cases. It noted that the said court denied the motion to disqualify the former government lawyer in Esso Export Case because the lawyer therein "never investigated or passed upon the subject matter of the pending case ... never rendered or had any specific duty to render any legal advice in relation to the regulations involved in the litigation."[64] Hence, the accommodation between maintaining high ethical standards for former Government employees, on the one hand, and encouraging entry into Government service, on the other, was struck under far different circumstances of the Esso Export Case.
If there was a likelihood that information pertaining to the pending matter reached the attorney, although he did not "investigate" or "pass upon" it, ..., there would undoubtedly be an appearance of evil if he were not disqualified.[66]Thus, it was concluded that the Esso Export Case unquestionably presented a case for the cautious application of the "appearance-of-evil doctrine" because the former Government lawyer's connection with the matter at issue was the tenuous one of mere employment in the same Government agency.
The principle of prospectivity of statutes, original or amendatory, has been applied in many cases. These include: Buyco v. PNB, 961) 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576 which divested the Philippine National Bank of authority to accept back pay certificates in payment of loans, does not apply to an offer of payment made before effectivity of the act; Largado v. Masaganda, et al., 5 SCRA 522 (June 30, 1962), ruling that RA 2613, as amended by RA 3090 on June, 1961, granting to inferior courts jurisdiction over guardianship cases, could not be given retroactive effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sections 9 and 10 of Executive Order No. 90, amending Section 4 of PD 1752, could have no retroactive application; People v. Que Po Lay, 94 Phil. 640, holding that a person cannot be convicted of violating Circular No. 20 of the Central Bank, when the alleged violation occurred before publication of the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application to P.D. No. 27 decreeing the emancipation of tenants from the bondage of the soil, and P.D. No. 316 prohibiting ejectment of tenants from rice and corn farmholdings, pending the promulgation of rules and regulations implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 which removed "personal cultivation" as a ground for the ejectment of a tenant cannot be given retroactive effect in the absence of a statutory statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the repeal of the old Administrative Code by RA 4252 could not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA 6389 should have only prospective application; (See also Bonifacio v. Dizon, 177 SCRA 294 and Balatbat v. CA, 205 SCRA 419).I believe that there is a greater demand to ward off the retroactive application of the Code of Professional Responsibility for the Code is the source of penal liabilities against its infringers. It is well entrenched that generally, penal laws or those laws which define offenses and prescribe penalties for their violation operate prospectively.[5] The Constitution itself bars the enactment of ex-post facto laws.[6] I do not think it necessary to flirt with the constitutional issue whether the Code of Professional Responsibility operates as a penal statute within the definition of an ex-post facto law, but I am satisfied with the general rules, affirmed by jurisprudence, that abhor the retroactivity of statutes and regulations such as the Code of Professional Responsibility.
The prospectivity principle has also been made to apply to administrative rulings and circulars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a circular or ruling of the Commissioner of Internal Revenue may not be given retroactive effect adversely to a taxpayer; Sanchez v. COMELEC, 193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on Elections, which directed the holding of recall proceedings, had no retroactive application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be given retrospective effect so as to entitle to permanent appointment an employee whose temporary appointment had expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions which, "although in themselves not laws, are nevertheless evidence of what the laws mean, . . . (this being) the reason why under Article 8 of the New Civil Code, 'Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system . . ...."[4]
36. Retirement from judicial position or public employmentCanon 36 would apparently cover the allegations imputed to Atty. Mendoza. However, a thorough review should first be examined on whether Canon 36 of the Canons of Professional Ethics may be used as legal basis in resolving this case.
A lawyer should not accept employment as an advocate in any matter upon the merits of which he has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ should not, after his retirement, accept employment in connection with any matter he has investigated or passed upon while in such office or employ.