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EN BANC
[G.R. Nos. 151809-12. April 12, 2005]
PRESIDENTIAL COISSION ON GOOD GO!ERNENT "PCGG#,petitioner,
vs.SANDIGAN$A%AN "&i'() Di*isio+#, LCIO C. TAN, CAREN AO TAN,
&LORENCIO T. SANTOS, NATI!IDAD P. SANTOS, DOINGO CA, TAN INEE, ARIANO TAN ENG LIAN, ESTATE O& $ENITO TAN EE IONG
"r/pr/s/+(/ TARCIANA C. TAN#, &LORENCIO N. SANTOS, 3R., ARR%
C. TAN, TAN ENG CAN, CNG POE EE, ARIANO OO, ANEL
OO, IGEL OO, 3AIE OO, ELI4A$ET OO, CELSO RANOLA,
ILLIA T. ONG, ERNESTO $. LI, $EN3AIN T. AL$ACITA, ILL% CO,
ALLIED $ANING CORP., ALLIED LEASING AND &INANCE CORPORATION,
ASIA $REER%, INC., $ASIC OLDINGS CORP., &OREOST &ARS, INC.,
&ORTNE TO$ACCO CORP., GRANDSPAN DE!ELOPENT CORP.,
IEL INDSTRIES, IRIS OLDINGS AND DE!ELOPENT CORP., 3EEL
OLDINGS, INC., AN&ACTRING SER!ICES AND TRADE CORP.,
ARANA OTELS AND RESORT CORP., NORTERN TO$ACCO
REDR%ING PLANT, PROGRESSI!E &ARS, INC., SAREOLDINGS, INC.,
SIPALA% TRADING CORP., !IRGO OLDINGS 6 DE!ELOPENT CORP.,
7+ ATT%. ESTELITO P. ENDO4A, respondents.
D E C I S I O N
PNO, J.
This case isprima impressionesand it is weighted with significance for it concerns on
one hand, the efforts of the Bar to upgrade the ethics of lawyers in government service
and on the other, its effect on the right of government to recruit competent counsel to
defend its interests.
In 19:, General Ban and Trust Company !GENBAN"# encountered financia
difficulties. GENBAN" had e$tended considera%le financial support to &ilcapita
'evelopment Corporation causing it to incur daily overdrawings on its current account with
the Central Ban.()*It was later found %y the Central Ban that GENBAN" had approved
various loans to directors, officers, stocholders and related interests totaling +)-.
million, of which /01 was classified as dou%tful and +2./2/ million as uncollecti%le.(-*As a
%ailout, ()/ C/+(r7l $7+; //+? lo7+s (o GEN$AN @)i?) r/7?)/ 7
(o(7l o' P10 =illio+.(*'espite the mega loans, GENBAN" failed to recover from its
financial woes. 3n 4arch -/, )0, the C/+(r7l $7+; issB/ 7 r/solB(io+ /?l7ri+>
GEN$ANi+sol*/+(and una%le to resume %usiness with safety to its depositors
creditors and the general pu%lic, and or/ri+> i(s liBi7(io+.(5*A pBli? ii+> o'
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GEN$ANs 7ss/(swas held from 4arch -6 to -7, )0, wherein the 8ucio Tan group
su%mitted the winning %id.(/*9u%se:uently, 'or=/r Soli?i(or G/+/r7l Es(/li(o P. /+o7
'il/ 7 p/(i(io+with the then Court of &irst Instance pr7i+> 'or ()/ 7ssis(7+?/and
supervision of the court in GENBAN";s li:uidation as mandated %y 9ection -0 of
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ac:uisition of GENBAN" %y respondents Tan, et al. when, in his capacity as then 9olicitor
General, he 7*is/the Central Ban;s officials on the pro?/Br/to %ring a%out
GENBAN";s li:uidation and appeared as counsel for the Central Ban in connection with
its petition for assistance in the li:uidation of GENBAN" which he filed with the Court of
&irst Instance !now o*/r+=/+( l7@/rsfrom
accepting engagement or employment in connection with any matter in which he had
intervened while in said service.@
3n April 22, 1991the 9econd 'ivision of the Sandiganbayanissued a
resolution /+i+>+CGG;s motion to dis:ualify respondent 4endo=a in Civil Case No
222/.())*It found that the +CGG failed to prove the e$istence of an inconsistency %etween
respondent 4endo=a;s former function as 9olicitor General and his present employment
as counsel of the 8ucio Tan group. It noted that respondent 4endo=a did not tae a
position adverse to that taen on %ehalf of the Central Ban during his term as 9olicitor
General.()-*It further ruled that respondent 4endo=a;s appearance as counsel forrespondents Tan, et al. was %eyond the one>year prohi%ited period under 9ection !%# of
2200 were (r7+s'/rr/from
the Sandiganbayans9econd 'ivision to the &ifth 'ivision. ()/*In its resolution dated ?uly)), -22), the &ifth 'ivision of the Sandiganbayandenied the other +CGG;s motion to
dis:ualify respondent 4endo=a.()6*It 7op(/the resolution of its S/?o+ Di*isio+dated
April --, )00), and o%served that the arguments were the same in su%stance as the
motion to dis:ualify filed in Civil Case No. 222/. The +CGG sought reconsideration of the
ruling %ut its motion was denied in its resolution dated 'ecem%er /, -22).()*
ence, the recourse to this Court %y the +CGG assailing the resolutions dated ?uly )),
-22) and 'ecem%er /, -22) of the &i'() Di*isio+o' ()/ Sandiganbayanvia a petition
forcertiorariand prohi%ition under
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The petition at %ar raises procedural and su%stantive issues of law. In view, however
of the import and impact of
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The +i+/(//+() ?/+(Brhas %een termed the F7r; 7>/s o' l/>7l /()i?sin the
Knited 9tates. By mid>century, American legal reformers were filling the void in two ways.
&irst, 'avid 'udley &ield, the drafter of the highly influential New Lor &ield Code,@
introduced a new set of uniform standards of conduct for lawyers. This concise statement
of eight statutory duties %ecame law in several states in the second half of the nineteenth
century. At the same time, legal educators, such as 'avid offman and George
9harswood, and many other lawyers were woring to flesh out the %road outline of a
lawyerJs duties. These reformers wrote a%out legal ethics in unprecedented detail and
thus %rought a new level of understanding to a lawyerJs duties. A num%er of mid>
nineteenth century laws and statutes, other than the &ield Code, governed lawyer
%ehavior. A few forms of colonial regulations M e.g., the do no falsehood@ oath and the
deceit prohi%itions >> persisted in some states. +rocedural law continued to directly, or
indirectly, limit an attorneyJs litigation %ehavior. The developing law of agency recogni=ed
%asic duties of competence, loyalty and safeguarding of client property. Evidence law
started to recogni=e with less e:uivocation the attorney>client privilege and its underlying
theory of confidentiality. Thus, all of the core duties, with the liely e$ception of service to
the poor, had some %asis in formal law. Let, as in the colonial and early post>revolutionary
periods, these standards were isolated and did not provide a comprehensive statement of
a lawyerJs duties. The reformers, %y contrast, were more comprehensive in their
discussion of a lawyerJs duties, and they actually ushered a new era in American legal
ethics.(-)*
Toward the /+ o' ()/ +i+/(//+() ?/+(Br, a new form of ethical standards %egan to
guide lawyers in their practice the %ar association code of legal ethics. The %ar codes
were detailed ethical standards formulated %y lawyers for lawyers. They com%ined the two
primary sources of ethical guidance from the nineteenth century. 8ie the academicdiscourses, the %ar association codes gave detail to the statutory statements of duty and
the oaths of office. Knlie the academic lectures, however, the %ar association codes
retained some of the official imprimatur of the statutes and oaths. 3ver time, the %ar
association codes %ecame e$tremely popular that states adopted them as %inding rules of
law. Critical to the development of the new codes was the re>emergence of %ar
associations themselves. 8ocal %ar associations formed sporadically during the colonia
period, %ut they dis%anded %y the early nineteenth century. In the late nineteenth century,
%ar associations %egan to form again, picing up where their colonial predecessors had
left off. 4any of the new %ar associations, most nota%ly the Ala%ama 9tate Bar Associationand the American Bar Association, assumed on the tas of drafting su%stantive standards
of conduct for their mem%ers.(--*
I+ 188, Al77=7%ecame the first state with a comprehensive %ar association code
of ethics. The )77 Ala%ama Code of Ethics was the model for several states; codes, and
it was the foundation for the American Bar AssociationJs !ABA# )027 Canons of Ethics. (-*
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I+ 191, ()/ P)ilippi+/ $7rfound that the oath and duties of a lawyer were
insufficient to attain the full measure of pu%lic respect to which the legal profession was
entitled. In that year, the +hilippine Bar Association adopted as its own, Canons ) to - of
the ABA Canons of +rofessional Ethics.(-5*
As /7rl 7s 192H, some ABA mem%ers have :uestioned the form and function of the
canons. Among their concerns was the Fr/*ol*i+> ooror the process %y which
lawyers and others temporarily enter government service from private life and then leave it
for large fees in private practice, where they can e$ploit information, contacts, and
influence garnered in government service.@(-/*These concerns were classified as 7*/rs/-
i+(/r/s( ?o+'li?(sand F?o+>rB/+(-i+(/r/s( ?o+'li?(s.@ FA*/rs/-i+(/r/s(
?o+'li?(se$ist where the matter in which the former government lawyer represents a
client in private practice is su%stantially related to a matter that the lawyer dealt with while
employed %y the government and the interests of the current and former are adverse.(-6*3n the other hand, F?o+>rB/+(-i+(/r/s( r/pr/s/+(7(io+ ?o+'li?(sare uni:ue to
government lawyers and apply primarily to former government lawyers.(-*&or severa
years, the ABA attempted to correct and update the canons through new canons,individual amendments and interpretative opinions. In )0-7, the ABA amended one canon
and added thirteen new canons.(-7*To deal with pro%lems peculiar to former government
lawyers, C7+o+ :was minted which dis:ualified them %oth for adverse>interest
conflicts@ and congruent>interest representation conflicts.@(-0*The rationale for
dis:ualification is rooted in a concern that the government lawyer;s largely discretionary
actions would %e influenced %y the temptation to tae action on %ehalf of the government
client that later could %e to the advantage of parties who might later %ecome private
practice clients.(2*C7+o+ :provides, viz.H
36. Retirement from judicial position or public employment
A lawyer should not accept employment as an advocate in any matter upon the merits of which he
has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ should not, after
his retirement, accept employment in connection with any matter he has investigated or
passed upon while in such office or employ.
3ver the ne$t thirty years, the ABA continued to amend many of the canons and added
Canons 56 and 5 in )0 and )0, respectively.()*
I+ 19H:, ()/ P)ilippi+/ $7r Asso?i7(io+again adopted as its own Canons to 5
of the ABA Canons of +rofessional Ethics. (-*
By the =il/ o' ()/ (@/+(i/() ?/+(Br, there was growing consensus that the ABA
Canons needed more meaningful revision. In )065, the ABA +resident>elect 8ewis +owel
ased for the creation of a committee to study the ade:uacy and effectiveness@ of the
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ABA Canons. The committee recommended that the canons needed su%stantial revision
in part %ecause the ABA Canons failed to distinguish %etween the inspirational and the
proscriptive@ and were thus unsuccessful in enforcement. The legal profession in the
Knited 9tates liewise o%served that C7+o+ :of the ABA Canons of +rofessional Ethics
resulted in unnecessary dis:ualification of lawyers for negligi%le participation in matters
during their employment with the government.
T)/ B+'7ir+/ss o' C7+o+ : ?o=p/ll/ A$A (o r/pl7?/ i( i+ ()/ 19:9 A$A o/l
Co/ o' Pro'/ssio+7l R/spo+siili(.(*The %asic ethical principles in the Code of
+rofessional )2)!%# and the 4odel Code of +rofessionalBs( 198, ()/ A$A 7op(/ +/@ o/l RBl/s
o' Pro'/ssio+7l R/spo+siili(. The 4odel out in rules, with comments following each rule. The new
format was intended to give %etter guidance and clarity for enforcement %ecause the only
enforcea%le standards were the %lac letter r7(/ $7r o' ()/ P)ilippi+/s "I$P# 7op(/
7 propos/ Co/ o' Pro'/ssio+7l R/spo+siili( i+ 1980 @)i?) i( sB=i((/ (o ()is
CoBr( 'or 7ppro*7l. The Code was drafted to reflect the local customs, traditions, and
practices of the %ar and to conform with new realities. O+ 3B+/ 21, 1988, ()is CoBr(
pro=Bl>7(/ ()/ Co/ o' Pro'/ssio+7l R/spo+siili(.(0*
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properly applica%le to %oth F7*/rs/-i+(/r/s( ?o+'li?(sand F?o+>rB/+(-i+(/r/s(
?o+'li?(s.
T)/ ?7s/ 7( 7r o/s +o( i+*ol*/ ()/ F7*/rs/ i+(/r/s( 7sp/?( o' RBl/ :.0 .
2200 %efore the Sandiganbayan.
Nonetheless, ()/r/ r/=7i+s ()/ issB/of whether there e$ists a F?o+>rB/+(-i+(/r/s(
?o+'li?(sufficient to dis:ualify respondent 4endo=a from representing respondents
Tan, et al.
I.$. T)/ F?o+>rB/+( i+(/r/s( 7sp/?( o' RBl/ :.0
The ;/to unloc
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mmediately after said meeting, we had a conference with the olicitor #eneral and he advised that
the following procedure should be ta5en of this Act shall
be final and e=ecutory, 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. 2o restraining order or injunction
shall be issued by the court enjoining the "entral an5 from implementing its actions under
this ection and the second paragraph of ection 3> of this Act, unless there is convincing
proof that the action of the %onetary oard is plainly arbitrary and made in bad faith andthe petitioner or plaintiff files with the cler5 or judge of the court in which the action is
pending a bond e=ecuted in favor of the "entral an5, in an amount to be fi=ed by the
court. he restraining order or injunction shall be refused or, if granted, shall be dissolved
upon filing by the "entral an5 of a bond, which shall be in the form of cash or "entral
an5 cashier)s+ chec5, 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. he provisions of Rule /; of the 2ew
Rules of "ourt insofar as they are applicable and not inconsistent with the provisions of this
ection shall govern the issuance and dissolution of the restraining order or injunctioncontemplated in this ection.
nsolvency, under this Act, shall be understood to mean the inability of a ban5 or non@
ban5 financial intermediary performing (uasi@ban5ing functions to pay its liabilities as they
fall due in the usual and ordinary course of business. !rovided, however, hat this shall not
include the inability to pay of an otherwise non@insolvent ban5 or non@ban5 financial
intermediary performing (uasi@ban5ing functions caused by e=traordinary demands
induced by financial panic commonly evidenced by a run on the ban5 or non@ban5 financial
intermediary performing (uasi@ban5ing functions in the ban5ing or financial community.
he appointment of a conservator under ection ;@A of this Act or the appointment
of a receiver under this ection shall be vested e=clusively with the %onetary oard, the
provision of any law, general or special, to the contrary notwithstanding. )As amended by
!' 2os. 8, -008, -88- B -;8, an. -6, -7;-+
e hold that this advice given %y respondent 4endo=a on the procedure to li:uidate
GENBAN" is +o( ()/ F=7((/rcontemplated %y
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)( i+ s(r/ssi+>that the
drafting, /+'or?i+> or i+(/rpr/(i+>government or agency procedures, regulations or
laws, or %riefing a%stract principles of law@ are acts which o +o( '7llwithin the scope of
the term F=7((/rand cannot dis:ualify.
S/?o+l, it can even %e conceded for the sae of argument that the a%ove act of
respondent 4endo=a falls within the definition of matter per ABA &ormal 3pinion No. 5-.
Be that as it may, the said act of respondent 4endo=a which is the F=7((/rinvolved in
9p. +roc. No. )27)- is /+(ir/l i''/r/+(from the F=7((/rinvolved in Civil Case No
2206. Again, the plain facts spea for themselves. It is given that respondent 4endo=a
had nothing to do with the decision of the Central Ban to li:uidate GENBAN". It is also
given that he did not participate in the sale of GENBAN" to Allied Ban. T)/ F=7((/r
@)/r/ )/ >o( )i=s/l' i+*ol*/was in informing Central Ban on
the pro?/Br/provided %y law to li:uidate GENBAN" thru the courts and in filing the
necessary petition in 9p. +roc. No. )27)- in the then Court of &irst Instance. T)/
sB/?( F=7((/r o' Sp. Pro?. No. 10812, ()/r/'or/, is +o( ()/ s7=/ +or is r/l7(/ (o
B( is i''/r/+( 'ro= ()/ sB/?( F=7((/r i+ Ci*il C7s/ No. 009:. Civil Case No. 2206involves the s/B/s(r7(io+ o' ()/ s(o?;sowned %y respondents Tan, et al., in Allied
Ban on the alleged ground that they are ill>gotten. The case does not involve the
li:uidation of GENBAN". Nor does it involve the sale of GENBAN" to Allied Ban
hether the shares of stoc of the reorgani=ed Allied Ban are ill>gotten is '7r
r/=o*/from the issue of the dissolution and li:uidation of GENBAN". GENBAN" was
li:uidated %y the Central Ban due, among others, to the alleged %aning malpractices of
its owners and officers. In other words, the legality of the li:uidation of GENBAN" is not
an issue in the se:uestration cases. Indeed, the urisdiction of the +CGG does no
include the dissolution and li:uidation of %ans. It goes without saying that Code 6.2 ofthe Code of +rofessional / i+(/r*/+(io+ @)il/ 7 Soli?i(or G/+/r7l i+ Sp. Pro?. No. 10812 is 7+
i+(/r*/+(io+ o+ 7 =7((/r i''/r/+( 'ro= ()/ =7((/r i+*ol*/ i+ Ci*il C7s/ No. 009:.
T)irl, we now slide to the metes and %ounds of the Fi+(/r*/+(io+contemplated %y
< to occur or lie between two things )!aris, where the same city lay
on both sides of an intervening river . . .+(5)*
Cn the other hand, DinterventionE is defined as 3B>/, R/>io+7l Tri7l CoBr(, 7l77+>, L7+7o /l SBr, $r7+?)
12,
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In a complaint dated April 2, -22, complainant 'r. Edna 9.D. 3ga Benito, then acting mayor of the 4unicipality of
Bala%agan, 8anao del 9ur, charged respondent ?udge A>2/>)/>E. 3n 9eptem%er )/, -22/, the 3m%udsman
impleaded then 4ayor adi Amer respondent. Complainant claimed that these respondents
refused to pay her salary as vice mayor since ?uly ), -225 despite repeated demands.
)
3n 4ay )6, -226, the 3m%udsman rendered a decision in that case finding respondents therein guilty of conduct
preudicial to the %est interest of the service and imposing on them the penalty of suspension from office without pay
for a period of nine months. It further directed the A4>A>2/>)/>E filed a petition for certiorari andprohi%ition6in the )7). Their prayer was to annul and set aside '.3.
No. -226>7 of the 'I8G>A7.)2This decision and the
writ of preliminary inunction were annulled %y the Court of Appeals !CA# in its &e%ruary 7, -22 decision.))The CA
held that the 4>A>2/>)/>E pursuant to
9ections )5 and - of
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the first place, respondent ?udge should have refrained from taing cogni=ance of the said special civil action when
it was raffled to his court, he ought to now this, yet he did otherwise. la'p%il.net
It recommended that respondent %e held administratively lia%le for gross ignorance of the law and fined+-),222.)5
e agree with the findings and evaluation of the 3CA %ut we modify the penalty.
A patent disregard of simple, elementary and well>nown rules constitutes gross ignorance of the law.)/?udges are
e$pected to e$hi%it more than ust cursory ac:uaintance with laws and procedural rules.)6
They must now the lawand apply it properly in good faith.)They are liewise e$pected to eep a%reast of prevailing urisprudence.)7&or a
udge who is plainly ignorant of the law taints the no%le office and great privilege vested in him. )7), respondents in 34B>4>A>2/>)/>E sought to annul and set aside '.3. No. -226>7 of the
'I8G>A7i+s( ()/ /?isio+ or 'i+i+>s o' ()/
O=Bs=7+, /
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9ection . &inality and e$ecution of decision. here the respondent is a%solved of the charge, and in case of
conviction where the penalty imposed is pu%lic censure or reprimand, suspension of not more than one month, or a
fine not e:uivalent to one month salary, the decision shall %e final, e$ecutory and unappeala%le. I+ 7ll o()/r ?7s/s,
()/ /?isio+ =7 / 7pp/7l/ (o ()/ CoBr( o' App/7ls o+ 7 */ri'i/ p/(i(io+ 'or r/*i/@ B+/r ()/
r/Bir/=/+(s 7+ ?o+i(io+s s/( 'or() i+ RBl/ H o' ()/ RBl/s o' CoBr(, @i()i+ 'i'(//+ "15# 7s 'ro= r/?/ip(
o' ()/ @ri((/+ No(i?/ o' ()/ D/?isio+ or Or/r /+i+> ()/ o(io+ 'or R/?o+si/r7(io+.
An appeal shall not stop the decision from %eing e$ecutory. In case the penalty is suspension or removal and the
respondent wins such appeal, he shall %e considered as having %een under preventive suspension and shall %epaid the salary and such other emoluments that he did not receive %y reason of the suspension or removal.
A decision of the 3ffice of the 3m%udsman in administrative cases shall %e e$ecuted as a matter of course. The
3ffice of the 3m%udsman shall ensure that the decision shall %e strictly enforced and properly implemented. The
refusal or failure %y any officer without ust cause to comply with an order of the 3ffice of the 3m%udsman to
remove, suspend, demote, fine, or censure shall %e a ground for disciplinary action against said officer. !Emphasis
supplied#
These provisions clearly show that respondent had no urisdiction to tae cogni=ance of the petition and to issue his
su%se:uent orders. e proceeded against settled doctrine, an act constituting gross ignorance of the law or
procedure.-
%ound to actually now and understand it. A
contrary rule will not only lessen the faith of the people in the courts %ut will also defeat the fundamental role of the
udiciary to render ustice and promote the rule of law.
Gross ignorance of the law or procedure is a serious charge under 9ection 7, )2>9C,-punisha%le %y either dismissal from service, suspension or a fine of more
than +-2,222 %ut not e$ceeding +52,222.-79ince this is respondent;s first offense, we deem it proper to impose
upon him a fine of +2,222.
4em%ers of the %ench are enoined to %ehave at all times in a way that promotes pu%lic confidence in the integrity
and impartiality of the udiciary.-00>2->9C,2this administrative case against respondent as a udge, %ased on grounds which
are also grounds for disciplinary action against mem%ers of the Bar, shall %e considered as disciplinary proceedingsagainst such udge as a mem%er of the Bar.)
hen respondent entertained 9CA No. )->)7), issued a T
8/10/2019 Canon 6 Full
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Canon ). A lawyer shall uphold the Constitution, o%ey the laws of the land and pro=o(/ r/sp/?( 'or l7@ 7+ l/>7l
pro?/ss/s.
$$$ $$$ $$$
Canon )). A lawyer shall os/r*/ 7+ =7i+(7i+ ()/ r/sp/?( B/ (o ()/ ?oBr(s 7+ (o Bi?i7l o''i?/rs and
should insist on similar conduct %y others. !Emphasis supplied#
informed of e$isting laws, recent amendments and current urisprudence, in eeping with
their sworn duty as mem%ers of the %ar !and %ench# to eep a%reast of legal developments.
&or such violation of the 8awyer;s 3ath and Canons ), /, 6 and )) of the C+