325 Phil. 762
FRANCISCO, J.:
"24 July 1986
Maranaw Hotels and Resort Corporation
C/O Mr. Lucio C. Tan
Allied Banking Corporation
Allied Bank Center
Ayala Ave., Makati
Metro Manila
Subject: Sequestration Order and Supervisory Committee
Gentlemen:
By virtue of the powers vested in the Presidential Commission on Good Government by authority of the President of the Republic of the Philippines, we hereby sequester the shares of stocks in Maranaw Hotels and Resort Corporation held by and/or in the name of Sipalay Trading Corporation.
We direct you not to cause any transfer, conveyance encumbrance, concealment, or liquidation of the aforementioned shares of stocks without any written authority from the commission.xxx xxx xxx
This sequestration order and formation of the Supervisory Committee shall take effect upon your receipt of this Order.
For your immediate and strict compliance.
Very truly yours,
FOR THE COMMISSION:
(Sgd.) (Sgd.)
RAMON A. DIAZ QUINTIN S. DOROMAL
Commissioner Commissioner"[2]
"The Manager
Allied Banking Corporation
Valenzuela Branch
Valenzuela, Metro ManilaSEARCH AND SEIZURE ORDER
Gentlemen:
By virtue of the powers vested in this Commission by the President of the Republic of the Philippines, you are hereby directed to submit for search and seizure all bank documents in the abovementioned premises which our representative may find necessary and relevant to the investigation being conducted by this Commission.
Atty. Benjamin Alonte is deputized to head the team that will implement this Order.
August 13, 1986, Pasig, Metro Manila.
FOR THE COMMISSION:
(Sgd.)
RAMON A. DIAZ
Commissioner
(Sgd.)
MARY CONCEPCION BAUTISTA
Commissioner"[3]
"In S.B. No. 0095
"WHEREFORE, in the light of the foregoing, the Court has no judicious recourse but to declare, as it hereby declares, the writ of sequestration issued against petitioner Sipalay Trading Corporation’s shares of stock in Maranaw Hotel and Resorts Corporation as deemed automatically lifted for respondent PCGG’s failure to implead the petitioner within the period mandated under Section 26, Article XVIII of the 1987 Constitution. The same writ is likewise declared null and void for having issued without sufficient evidentiary foundation -respondent PCGG having failed to adduce and proffer that quantum of evidence-necessary for its validity -without prejudice to the issue of illgotten wealth being attributed to petitioner Sipalay Trading Corporation and/or defendants Lucio C. Tan, et al. being threshed out and litigated in Civil Case No. 0005."In S.B. No. 0100
"WHEREFORE, premises duly considered, the Court hereby declares the subject search and seizure order issued by respondent PCGG directed against petitioner Allied Banking Corporation’s Valenzuela branch on August 13, 1986 as null and void ab initio for having been issued without due process and in contravention of the organic law then in force, the Freedom Constitution, under which mantle, the Bill of Rights found in the 1973 Constitution was amply protected and enforced. Consequently, all documents, records and other tangible objections (sic) seized pursuant thereto are hereby ordered returned to petitioner Allied Banking Corporation through its duly authorized representative, after proper inventory and accounting shall have been made within thirty (30) days from receipt hereof.
SO ORDERED."
"As a general rule, a motion to dismiss is interposed before the defendant pleads (Section 1, Rule 16, Rules of Court). However, there is no rule or law prohibiting the defendant from filing a motion to dismiss after an answer had been filed. On the contrary, Section 2 of Rule 9, expressly authorizes the filing of such motion at any stage of the proceedings when it is based upon failure to state a cause of action x x x."
"Section 5. - Who may contest - The person against whom a writ of sequestration or freeze or hold order is directed may request the lifting thereof in writing, either personally or through counsel within five (5) days from the receipt of the writ of order x x x."
"Section 6. - Procedure for Review of writ or order - After due hearing or motu propio for good cause shown, the Commission may lift the writ or order unconditionally or subject to such condition as it may deem necessary, taking into consideration the evidence and circumstances of the case. The resolution of the Commission may be appealed by the party concerned to the Office of the President of the Philippines within fifteen (15) days from receipt thereof."
"Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could nor should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it."
"Two. The rule on non-exhaustion of administrative (sic) remedies does not apply to petitioners’ case. This rule, which is based on sound public policy and practical considerations, is not inflexible. It is subject to many exceptions, to wit: (i) where there is estoppel on the part of the party invoking the doctrine; (ii) where the challenged administrative act is patently illegal amounting to lack of jurisdiction; (iii) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; and (iv) where the question involved is purely legal and will ultimately have to be decided by the courts of justice."[20]x x x xxx xxx
"x x x there was no absolute necessity of appealing respondent PCGG’s resolution to the Office of the President, as purportedly required by Section 6 of the PCGG Rules and Regulations, inasmuch as respondent PCGG seemed to have exhibited indifference towards petitioners’ pleas for the lifting of the sequestration and search and seizure orders. Official inaction or unreasonable delay, as heretofore intimated, is one of the exceptions to the rule on non-exhaustion of administrative remedies. Hence, under the circumstance, petitioners may not be faulted for seeking relief directly from the courts."[21]
"The Court agrees with petitioners’ (SIPALAY and ALLIED) stance that the only period suspended by a motion to dismiss is the period to file an answer (Section 4, Rule 16 of the Rules of Court)[22] and that where a period is to be suspended by the filing of a pleading, the Rules of Court expressly provides for such suspension (Section 1[b], Rule 12 of the Rules of Court, for instance, provides for the suspension of the period to file a responsive pleading if a motion for bill of particulars is filed).[23] Consequently, respondent’s (PCGG) filing of a motion to dismiss, without seeking leave of court to stay or suspend the running of the period for filing its written formal offer of evidence - as agreed upon and ordered in open court during the hearing on July 1, 1993 - could not have the effect of suspending the period within which it should submit its formal offer of evidence in writing. Without express leave of court, respondent (PCGG) could not improvidently assume that it has liberty to suspend the running of the period agreed upon. Respondent (PCGG) should have been prudent enough to seek the permission of this Court in respect of such matter to avert possible controversy arising therefrom. More importantly, respondent (PCGG) should not have made a unilateral presumption of procedural norm."[24]xxx xxx xxx
"In view of the foregoing, the Court has no judicious recourse but to sustain petitioners’ (SIPALAY and ALLIED) stance and declare, as it hereby declares, that respondent (PCGG) is deemed to have waived presentation of further evidence and to have its evidence rested on the basis of the evidence on record."[25]
"Section 26. The authority to issue sequestration or freeze orders under Proclamation No. 3 dated March 25, 1986 in relation to the recovery of ill-gotten wealth shall remain operative for not more than eighteen months after the ratification of this Constitution. However, in the national interest, as certified by the President, the Congress may extend said period.
"A sequestration or freeze order shall be issued only upon showing of a prima facie case. The order and the list of the sequestered or frozen properties shall forthwith be registered with the proper court. For orders issued before the ratification of this Constitution, the corresponding judicial action or proceeding shall be filed within six months from its ratification. For those issued after such ratification, the judicial action or proceeding shall be commenced within six months from the issuance thereof.
"The sequestration or freeze order is deemed automatically lifted if no judicial action or proceeding is commenced as herein provided."
"Documentary and object evidence shall be offered after the presentation of a party’s testimonial evidence. Such offer shall be done orally unless allowed by the court to be done in writing."
"Oral testimony may be taken into account only when it is complete, that is, if the witness has been wholly cross-examined by the adverse party or the right to cross-examine is lost wholly or in part thru the fault of such adverse party. But when cross-examination is not and cannot be done or completed due to causes attributable to the party offering the witness, the uncompleted testimony is thereby rendered incompetent.
"The right of a party to cross-examine the witness of his adversary is invaluable as it is inviolable in civil cases, no less than the right of the accused in criminal cases. The express recognition of such right of the accused in the Constitution does not render the right thereto of parties in civil cases less constitutionally based, for it is an indispensable part of the due process guaranteed by the fundamental law x x x. Until such cross-examination has been finished, the testimony of the witness cannot be considered as complete and may not, therefore, be allowed to form part of the evidence to be considered by the court in deciding the case."
"The wholesale exclusion of testimonies was too inflexible a solution to the procedural impasse because it prejudiced the party whose only fault during the entire proceedings was to die before he could be cross-examined. The prudent alternative should have been to admit the direct examination so far as the loss of cross-examination could have been shown to be not in that instance a material loss. And more compellingly so in the instant case where it has become evident that the adverse party was afforded a reasonable chance for cross-examination but through his own fault failed to cross-examine the witness.
"Where death prevents cross-examination under such circumstances that no responsibility of any sort can be ascribed to the plaintiff or his witness, it seems a harsh measure to strike out all that has been obtained in the direct examination." (Italics supplied)
Purpose please? |
The testimony of this witness will cover the fact that at the time of sequestration there were issued (sic), there were more prima facie evidence. | |
xxx xxx xxx |
q: | Dr. Doromal do you know the petitioner, Sipalay Trading Corporation? |
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a: | Yes, sir. |
q: | Why do you know Sipalay Trading Corporation? |
a: | It is one of those companies which we had investigated and eventually issued a Sequestration Order. |
q: | Do you you (sic) Maranaw Hotels and Resorts? |
a: | Yes, sir. |
q: | Why do you know this Maranao Hotels and Resorts? |
a: | Again it is one of those we had sequestered because of its relation with Sipalay Trading Corporation? |
q: | Do you know the petitioner Allied Banking Corporation? |
a: | Yes, sir. |
q: | Why do you know it? |
a: | In the same manner that the material of documents we had, we ended up having a Sequestration Order on Allied Banking Corporation. |
xxx xxx xxx |
q: | Dr. Doromal at that time that the sequestration order which you have just recognized was issued and which sequestration order was signed by you and Commissioner Ramon Diaz, what documents if any did you consider? |
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a: | We considered documents which were gotten from Malacañang after the previous President had left. We had also document (sic) which were gotten from the U.S. which were given by the States Department to the PCGG and whatever had been gotten by our operation people. |
q: | If I show to you some of these documents will you be able to recognize them? |
a: | Yes, some of them I will be able to recognize. |
q: | I show to you a set of documents, what relation have these set of documents to those documents which you have mentioned you and Commissioner Diaz or the Commission considered when the Sequestration Order dated July 24, 1986 was issued? |
Will you please go over these documents? |
Witness is going over the voluminous documents. |
a: | The documents that I have just slipped into here that would have to do with Sipalay Trading Corporation, this I remember. |
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q: | The question is, what relation has this document to the document you considered in issuing the Sequestration Order subject matter of this case? |
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a: | This one which I had flipped into this had been considered by the Commission at the time of the sequestration. |
May I request that this document which the witness had identified, these documents consisted of seventy-six documents and we -have earlier inadvertently marked them as Exhibit A to WWW but if we can have them marked accordingly as Exhibits 1, 2 to 76 accordingly. | |
xxx xxx xxx |
q: | Doctor Doromal when you issued, when the Sequestration Order was issued in the judgment of the Commission, what quantum of evidence do these documents amount to? |
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Objection to the question, Your Honors (sic) please. First of all the witness did not identify all of those documents as he was going over the folder of documents. He was picking up particular documents in the folder and it is a question of law. |
We are proving that there is more prima facie evidence in the judgment when he issued the Sequestration Order. | |
What is the quantum of evidence do these documents represent? |
For the purpose of issuance thereof? |
Yes, Your Honor. |
With that qualification are you willing to accept that qualification? |
Yes, your Honor. |
Witness may answer: |
a: | These documents are more than just prima facie evidence which is the only thing required of us before issuing the Sequestration Order. |
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In fact over and above what is needed there are plenty of evidence of these documents which movant amply justifies our issuing of the Sequestration Order in the sense that there is just no reason no(r) question that there is a preponderance of evidence for the sequestration. |
That would be all, Your Honor. |
How about this 0095? |
In both cases, Your Honor. |
Does the document include any reference to the Allied Banking Corporation? |
Yes, Your Honor, but the Sequestration Order was issued by Commissioner Diaz and Mary Con Bautista. |
With respect to? |
Allied Banking Corporation. | |
May I ask additional questions, Your Honor. |
Please proceed. |
q: | Dr. Doromal what if any is your participation in the issuance of the Sequestration Order or the Search and Seizure Order against Allied Banking Corporation? |
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a: | All these Sequestration Orders were brought by the Commission in (sic) banc and we are present with the documents that had been available. |
We listen to them and the action is made by the Commission and in the issuance of the Sequestration Order. | |
Then whoever is the Commissioner most involved in that particular company thus signs or do sign the Sequestration Order. | |
In this particular case that you mentioned about Allied Banking Corporation, the two other Commissioners who were there ahead of me were the ones who signed because they are most familiar with the Allied Banking Corporation. | |
xxx xxx xxx |
q: | Specifically what is your participation in the issuance of the sequestration personally of Allied Banking Corporation? |
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a: | I am one of the most who participated in the discussion when I became a member and that was April in 1986. |
xxx xxx xxx |
q: | When deliberated upon what documents were considered? |
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xxx xxx xxx |
a: | First of all when this Search and Seizure Order was issued this was during the time that I was already a member of the PCGG as Commissioner and when this is brought before the group before the Commission there are the attached documents that backed up this Search and Seizure Order and for that matter other items that have to do with the sequestration or something similar to that so what I am saying the materials that go with this would indicate the reason for the Search and Seizure Order similar to the papers that are needed when we issued the Sequestration Order. |
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q: | I will show you again this Exhibit 1, these Exhibits 1 to 76 will you please go over the same and state before this Honorable court what relation have these documents to the documents which you mentioned were considered in the deliberation for the issuance of Search and Seizure Order against Allied Banking Corporation? |
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xxx xxx xxx |
a: | I am looking at some of these documents that have to do with the Allied Banking Corporation and I recognize some of these and the others I do not see because some of these are materials which were gathered by other groups and their attachments but the- others such as this letter, this I remember. |
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xxx xxx xxx |
q: | Dr. Doromal in your recollection what is the reason or the finding of the PCGG why the Sequestration Order was issued against Sipalay Trading Corporation or Maranao Hotels and Resorts? |
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a: | The reason was that in the Maranao Corporation which was the company which was later on acquired by Sipalay Trading Corporation which was the holding company it was our judgment that there are enough indications there that these were acquired because of closeness to the president and that this was really in fact one of those that had been gotten from DBP, Development Bank of the Philippines with the idea being that it was, it could be gotten through the help of the Office of the President and the President himself. |
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xxx xxx xxx |
q: | What if any is the finding of PCGG regarding the ownership of Sipalay Trading Corporation? |
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a: | Sipalay Trading Corporation was holding company and owner. The people in the ownership is not only Lucio Tan but looks like relatives of Mr. Tan. |
q: | In your recollection Doctor Doromal, what is the finding or reason of companies why it issued the Search and Issue (sic) Order against Allied Banking Corporation? |
a: | The Commission wanted to find out documents that would indicate or prove the relationship between President Marcos and Lucio Tan and one way to do that is to have access to the papers to the documents that were in the Allied Banking Corporation. |
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That would be all, Your Honor."[33] |
Purpose, please. |
The testimony of the witness is offered for the purpose of proving that when the Presidential Commission on Good Government issued the search and seizure order dated August 13, 1988, the Commission considered ample evidence in the issuance thereof and also to prove that defendant Lucio Tan in concert with defendants Ferdinand Marcos and Imelda Marcos acquired General Bank and Trust Company in violation of existing rules and for remedial consideration and that later on Genbank was converted by defendant Lucio Tan and company to Allied Bank of which defendant Lucio Tan and defendants Ferdinand Marcos owned beneficially. | |
xxx xxx xxx |
q: | Madam Witness, what basis or document, if any did the commission consider when it issued the search and seizure order? |
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a: | We had several documents in our possession at that time, one of the documents was a list which have been taken from the office of Imee M. Araneta on EDSA which contained a listing of the holdings of the late President Marcos in several corporations and the extent of his participation on these corporations. And the other, in addition to what have been given by certain informants, another was an affidavit of Mr. Gapud which he had issued wherein he had mentioned also the participation of Mr. Marcos in Allied Banking, I think that affidavit is here and also the fact that deposits were made from Allied Banking in the accounts of Mr. Marcos in the Security Bank. |
xxx xxx xxx | |
q: | Madam Witness, you mentioned certain documents on the basis of which the PCGG issued the search and seizure order against Allied Banking Corporation, I am showing to you a folder containing Exhibit 1 to 18, will you please go over this document and state which of these documents were considered by the Commission when it issued the search and seizure order? |
a: | These documents marked Exhibits I which is a list, which is a letter, unfortunately I don’t see page two of this but this is the document which we have addressed principally, as far as we know addressed to the late President Marcos and together with this we have Exhibit 2, another letter dated March 28, 1977 addressed to the Deputy Governor Mr. Briñas about the intention to purchase General Bank and Trust Company and subsequently documents Exhibit 3 signed by Carlota Valenzuela, Special Assistant to the Governor, Exhibit 4 another document marked Confidential signed by Mr. Barin reporting on the action taken regarding Genbank. |
xxx xxx xxx |
And another document which has been marked as Exhibit 4, 5, 6, 7, these documents refer to the acquisition by Lucio Tan of the Genbank for the amount of P500,000.00, the Commission then considered that plus the fact that the acquisition and transfer of Genbank to the Lucio Tan group was done in a short time without proper observance of public bidding which the Commission then considered to be irregular, so this is one of the documents we look at. Mr. Tan in the acquisition of Genbank had been given a favored treatment. | |
xxx xxx xxx |
This document dated May 17, 1989 under letterhead Allied Banking Corporation addressed to His Excellency President Marcos, President and Prime Minister signed by Lucio Tan. In addition we have a document which has already been marked as Exhibit 12 which is the affidavit of Mr. Rolando Gapud dated January 14, this is series of 1987, in this document Mr. Gapus (sic) has also made an enumeration of deposits made by certain individuals from certain banks among them Allied Banking Corporation for the account of Mr. Marcos in the Security Bank. | |
xxx xxx xxx |
Exhibits 13 and 13-a which is a listings (sic) of deposits made and placements in the bank, in the bank account of Mr. Marcos. In addition, we have the documents marked up to Exhibits 13-g, h, l, all showing checks or amounts received from Allied Bank deposited in the Security Bank and Trust Company. Exhibits up to Exhibit 13-k, 1, m, p. t, v, 2, y and x."[34] | |
xxx xxx xxx |
q: | Chairman Bautista, during the last hearing before it was adjourned we were going over this folder containing Exhibits 1 to 80 and we are indicating which of these exhibits. were considered by the PCGG when it issued the Search and Seizure Order against Allied Banking Corporation; |
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Will you please go over again this folder and indicate to this Exhibit to whether what was considered by the Presidential Commission on Good Government when it issued the Search and Seizure Order against Allied Banking Corporation. | |
a: | I recall that we had already pointed to the document marked Exhibit 7 in red which is a letter of Lucio Tan to the Governor Licaros of the Central Bank and the one marked in red as Exhibit 8 which is the letter to Mr. Gregorio Licaros signed by T.O. Domingo, the Allied Banking Report which is marked as Exhibit 9. |
xxx xxx xxx | |
q: | Apart from these exhibits which you have just mentioned what other evidence if any did the Commission consider? |
a: | There were for instance the verbal information given to us by individuals as well as the information given to us by Mr. Rolando Gapud verbally. |
xxx xxx xxx |
q: | What is the finding based on these Exhibits which you mentioned and the information given by Rolando Gapud which he later on formalized in an affidavit. |
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What finding if any with regards to the Allied Banking Corporation did the Commission arrive that led to the issuance of the Search and Seizure (sic) Order? | |
a: | The Commission after reviewing al (sic) of these exhibits as with all the information that had come into its possession had come to the conclusion that indeed Mr. Lucio Tan was a close associate of the late President Marcos and they were involved in business associates and transactions and that the late President had substantial holdings in this corporation in which Lucio Tan was also involved and therefore the commission would have to act in accordance to its powers of the sequestration granted under Executive Order No. 1. |
xxx xxx xxx |
q: | To what corporation do you refer to when you mentioned Mr. Marcos has equity in the corporation owned by Lucio Tan? |
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a: | Among them is precisely Allied Banking Corporation, Asia Brewery and Sipalay Trading Corporation. I mean these are some of the corporations. |
q: | Chairman Bautista, what is the legal basis or authority by the commission of the Presidential Commission on Good Government when it issued the Search and Seizure Order against the Allied Banking Corporation? |
a: | The Commission under Executive Order No. 1, the President has been given specifically the power to sequester business and property owned by the late President Marcos, Mrs. Marcos, relatives and closed business associates and to take possession or take over this business and assets in order to prevent dissipation of these assets or removal of these assets and concealment of these assets and also to take over such documents as the Commission may consider necessary in order that these documents may be preserved for the purpose of the filing of the case in order to prosecute or conduct civil action against President Marcos, Mrs. Marcos, relatives and other close business associates that is very clearly stated in Executive Order No. 1. |
xxx xxx xxx |
0100, Your Honor. | |
q: | Chairman Bautista, the Search and Seizure Order issued by PCGG dated August 13, 1986 against Allied Banking Corporation reads in pertinent part and I quote: |
"You are hereby directed to submit for Search and Seizure all bank documents in the above mentioned premises which our representatives may find necessary and relevant to the investigation conducted by the Commission." | |
a: | Well I think we clearly specify there that we are to seize the bank documents. |
It is specifically stated that the Search and Seizure Order refers to bank documents precisely because of the information that had been given to us that these documents could be found in the particular place. | |
xxx xxx xxx |
q: | Now, Chairman Bautista do you know what happened after the Search and Seizure Order against Allied Banking Corporation? |
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a: | We were not able to seize any document precisely because of the objection raised and so what happened is that the parties agreed to just seal this place so that neither of the parties would be able to remove any documents. |
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That will be all, Your Honor."[35] |
"Even assuming that the same had been identified in court, it would have no evidentiary value. Identification of documentary evidence must be distinguished from its formal offer as an exhibit. The first is done in the course of the trial and is accompanied by the marking of the evidence as an exhibit. The second is done only when the party rests its case and not before. The mere fact that a particular document is identified and marked as an exhibit does not mean it will be or has been offered as part of the evidence of the party. The party may decide to formally offer it if it believes this will advance its cause, and then again it may decide not to do so at all."(Italics supplied.)
"No direct connection or relationship has been established, at least, as far as the evidence extant on the records of these cases are concerned, between petitioner Sipalay Trading’s acquisition and ownership of the sequestered shares of stock and Lucio C. Tan’s alleged fraudulent business maneuverings and connivance with the late President Ferdinand E. Marcos. These oral testimonies are practically dependent on the existence of official records of respondent PCGG which, due to the latter’s own doing, have not been formally offered. Hence, these oral testimonies have no leg to stand on."[37]xxx xxx xxx
"Without credible and competent documentary evidence to fortify the witnesses’ bare allegations as aforestated, it is difficult to sustain a finding of prima facie case in the proceedings - especially taking into account the fact that petitioner Sipalay Trading is presumed by law to possess a separate and distinct judicial personality from its principal stockholders, i.e., Lucio Tan, et. al. x x x."[38]
"Prima facie evidence has been defined as evidence which, standing alone unexplained or uncontroverted, is sufficient to maintain the proposition affirmed. It is such as, in judgment of law, is sufficient to establish the fact, and if not rebutted, remains sufficient for that purpose."[39]xxx xxx xxx
"It is evidence which suffices for the proof of a particular fact until contradicted and overcome by other evidence."[40]xxx xxx xxx
"It is evidence which, standing alone and unexplained, would maintain the proposition and warrant the conclusion to support which it is introduced."[41]xxx xxx xxx
Prima facie case is such as will suffice until contradicted and overcome by other evidence."[42]xxx xxx xxx
"A prima facie case is one which is apparently established by evidence adduced by plaintiff in support of his case up to the time such evidence stands unexplained and uncontradicted."[43]xxx xxx xxx
"A prima facie case is one in which the evidence in favor of a proposition is sufficient to support a finding in its favor, if all the evidence to the contrary is disregarded."[44]xxx xxx xxx
"A litigating party is said to have a prima facie case when the evidence in his favor is sufficiently strong for his opponent to be called on to answer it. A prima facie case, then, is one which is established by sufficient evidence, and can be overthrown only be rebutting evidence adduced on the other side."[45]
"Naked statements must be entitled to little weight when the parties hold better evidence behind the scenes"[47] and
"A party’s nonproduction of a document which courts almost invariably expect will be produced ‘unavoidably throws a suspicion over the cause."[48]
"6. Commissioner Daza also informed the Commissioner that upon the instructions of Minister Salonga, any Commissioner can file or issue a sequestral order provided the order has the conformity verbal or written of another Commissioner. These could include any other order or seizure."[58]xxx xxx xxx
"6. Commissioner Pedro L. Yap before his departure on a mission, reported the work he had accomplished during the past days. These included numerous ‘freeze’ and ‘sequestration’ orders. He asked that the list of orders should not be particularized in the minutes."[59]
Q: | I am asking you how many months did it take looking for records? |
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A: | I think more than two months, sir. |
Q: | And these were the records you found, marked Exhibits A and B? |
A: | Yes, sir, during the time I devoted to them."[60] |
xxx xxx xxx |
Q: | But nonetheless, for two months you tried looking for records corresponding to the subpoena? |
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A: | Yes, sir."[61] |
"The only logical conclusion that may be reached by Atty. Hontiveros’ inability to produce PCGG records in regard respondent Sipalay is that there was no evidence before the PCGG or any of its Commissioners which would tend to establish that the shares of stock in Maranaw registered in the name of private respondent Sipalay are ill-gotten."[62]
"IV. The issue on the existence of prima facie evidence in support of the issuance of a sequestration order has likewise been laid to rest in the BASECO case, in this wise:
‘8. Requisites for Validity
What is indispensable is that, again as in the case of attachment and receivership, there exist a prima facie factual foundation, at least, for the sequestration, freeze or takeover order, and adequate and fair opportunity to contest it and endeavor to cause its negation or nullification.
Both were assured under the executive orders in question and the rules and regulations promulgated by the PCGG.
a.Prima Facie Evidence as Basis for Orders
Executive Order No. 14 enjoins that there be ‘due regard to the requirements of fairness and due process.’ Executive Order No. 2 declares that with respect to claims on allegedly ‘ill-gotten’ assets and properties, ‘it is the position of the new democratic government that President Marcos x x x (and other parties affected) be afforded fair opportunity to contest these claims before appropriate Philippine authorities.’ Section 7 of the Commission’s Rules and Regulations provides that sequestration or freeze (and takeover) orders issue upon the authority of at least two commissioners, based on the affirmation or complaint of an interested party, or motu propio when the Commission has reasonable grounds to believe that the issuance thereof is warranted. A similar requirement is now found in Section 26, Art. XVIII of the 1987 Constitution, which requires that a ‘sequestration or freeze order shall be issued only upon showing of a prima facie case.’ (Italics in the original text.)"
a)x x x
b)x x x
c)x x x and
d)Recover ill-gotten properties amassed by the leaders and supporters of the previous regime and protect the interest of the people through orders of sequestration or freezing of assets or accounts.’
"Parenthetically, even if the requirement for a prima facie showing of ‘ill-gotten wealth’ were not expressly imposed by some rule or regulation as a condition to warrant the sequestration or freezing of property contemplated in the executive orders in question, it would nevertheless be exigible in this jurisdiction in which the Rule of Law prevails and official acts which are devoid of rational basis in tact or law, or are whimsically and capricious, are condemned and struck down."
"SECTION 3. - The Commission shall have the power and authority:
(a) To conduct investigation as may be necessary in order to accomplish and carry out the purposes of this order.
(b) To sequester or place or cause to be placed under its control or possession any building or office wherein any ill-gotten wealth or properties may be found, and any records pertaining thereto, in order to prevent their destruction, concealment or disappearance which would frustrate or hamper the investigation or otherwise prevent the Commission from accomplishing its task.
(c) To provisionally take over in the public interest or to prevent its disposal or dissipation, business enterprises and properties taken over by the government of the Marcos administration or by entities or persons close to former President Marcos, until the transactions leading to such acquisition by the latter can be disposed of by the appropriate authorities.
(d) To enjoin or restrain any actual or threatened commission of acts by any person or entity that may render moot and academic, or frustrate, or otherwise make ineffectual the efforts of the Commission to carry out its tasks under this order.
(e) To administer oaths, and issue subpoenas requiring the attendance and testimony of witnesses and/or the production of such books, papers, contracts, records, statement of accounts and other documents as may be material to the investigation conducted by the Commission.
(f) To hold any person in direct or indirect contempt and impose the appropriate penalties, following the same procedures and penalties provided in the Rules of Court.
(g) To seek and secure the assistance of any office agency or instrumentality of the government.
(h) To promulgate such rules and regulations as may be necessary to carry out the purposes of this order."
"From the foregoing provisions of law, it is clear that the PCGG has the following powers and authority:
1. To conduct an investigation including the preliminary investigation and prosecution of the ill-gotten wealth cases of former President Marcos, relatives and associates, and graft and corruption cases assigned by the President to it;
2. Issue sequestration orders in relation to property claimed to be ill-gotten;
3. Issue ‘freeze orders’ prohibiting persons in possession of property alleged to be ill-gotten from transferring or otherwise disposing of the same;
4. Issue provisional takeover orders of the said property;
5. Administer oaths and issue subpoenas in the conduct of investigation;
6. Hold any person in direct or indirect contempt and impose the appropriate penalties as provided by the rules."
"As thus described, sequestration, freezing and provisional takeover are akin to the provisional remedy of preliminary attachment, or receivership. By attachment, a sheriff seizes property of a defendant in a civil suit so that it may stand as security for the satisfaction of any judgment that may be obtained, and not disposed of, or dissipated, or lost intentionally or otherwise, pending the action. By receivership, property, real or personal, which is subject of litigation, is placed in the possession and control of a receiver appointed by the Court, who shall conserve it pending final determination of the title or right or possession over it. All these remedies- sequestration, freezing, provisional takeover, attachment and receivership-are provisional, temporary, designed for particular exigencies, attended by no character or permanency or finality, and always subject to the control of the issuing court or agency."
"The question of the validity of PCGG sequestration and freeze orders as provisional measures to collect and conserve the assets believed to be ill-gotten wealth has been laid to rest in BASECO vs. PCGG (150 SCRA 181) where this Court held that such orders are not confiscatory but only preservative in character, not designed to effect a confiscation of, but only to conserve properties believed to be ill-gotten wealth of the ex-president, his family and associates, and to prevent their concealment dissipation, or transfer, pending the determination of their true- ownership." (Italics supplied)
"The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall not be violated, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined by the judge, or such other responsible officer as may be authorized by law, after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched, and the person or things to be seized."
(1) it must be issued upon probable cause;
(2) the probable cause must be determined by the judge himself and not by the applicant or any other person;
(3) in the determination of probable cause, the judge must examine, under oath or affirmation, the complainant and such witnesses as the latter may produce; and
(4) the warrant issued must particularly describe the place to be searched and persons or things to be seized.[69]
"It should also by now be reasonably evident from what has thus far been said that the PCGG is not, and was never intended to act as, judge. Its general function is to conduct investigations in order to collect evidence establishing instances of ‘ill-gotten wealth’; issue sequestration, and such orders as may be warranted by the evidence thus collected and as may be necessary to preserve and conserve the assets of which it takes custody and control and prevent their disappearance, loss or dissipation; and eventually file and prosecute in the proper court of competent jurisdiction all cases investigated by it as may be warranted by its findings. It does not try and decide, or hear and determine, or adjudicate with any character of finality or compulsion, cases involving the essential issue of whether or not property should be forfeited and transferred to the State because ‘ill-gotten’ within the meaning of the Constitution and the executive orders. This function is reserved to the designated court, in this case, the Sandiganbayan. There can therefore be no serious regard accorded to the accusation, leveled by BASECO, that the PCGG plays the perfidious role of prosecutor and judge at the same time." (Italics supplied.)
"By virtue of the powers vested in the Commission by the President of the Republic of the Philippines, you are hereby directed to submit for search and seizure all bank documents in the aforementioned premises which our representative may find necessary and relevant to the investigation being conducted by this Commission.
xxx xxx xxx"
"A search warrant must conform strictly to the requirements of the constitutional and statutory provisions under which it was issued. Otherwise, it is void. The proceedings upon search warrants, it has rightly been held, must be absolutely legal, ‘for there is not a description of process known to the law, the execution of which is more distressing to the citizen. Perhaps there is none which excites such intense feeling in consequence of its humiliating and degrading effect.’ The warrant will always be construed strictly without, however, going the full length of requiring technical accuracy. No presumptions of regularity are to be invoked in aid of the process when an officer undertakes to justify under it."
"Section 26.xxx xxx xxx
"A sequestration or freeze order shall be issued only upon showing of a prima facie case. The order and the list of the sequestered or frozen properties shall forthwith be registered with the proper court. For orders issued before the ratification of this Constitution, the corresponding judicial action or proceeding shall be filed within six months from its ratification. For those issued after such ratification, the judicial action or proceeding shall be commenced within six months from the issuance thereof.
"The sequestration or freeze order is deemed automatically lifted if no judicial action or proceeding is commenced as herein provided."
"x x x On not a few occasions, the Court has sustained the merit and logic of motions seeking the lifting of writs of sequestration for respondent PCGG’s failure to institute the corresponding judicial action or proceeding against corporations which, either through sheer oversight or gross neglect, have not been expressly impleaded in the various civil complaints filed before this Court. The case of ‘PCGG v. International Copra Export Corporation, et. al.’ (INTERCO case) is illuminating on this point. Therein, the Supreme Court made a distinction between the judicial personalities of a corporation and its stockholders, ruling that if a corporation is not impleaded, it cannot be deemed to have been sued in an action against its stockholders.
"A perusal of the original complaint in Civil Case No. 0005, which was concededly filed within the six-month period provided for under the organic law, reveals that petitioner Sipalay Trading was not specifically impleaded therein as party-defendant, either in a nominal or principal capacity. If at all, the latter has been included therein as part of principal defendant’s ill-gotten assets. Under Rule 3, Section 7 of the Rules of Court, ‘(P)arties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.’
"It bears emphasis along this vein that, as implied from INTERCO, petitioner Sipalay Trading has a juridical personality separate and distinct from its stockholders. As such, any civil charge filed against principal defendant Lucio C. Tan and/or his dummies or agents is not deemed a suit against the former. Neither does mere inclusion in the list of ill-gotten assets as part of principal defendant’s ill-gotten wealth suffice to comply with the constitutional injunction. Impleading a party means bringing the suit against it. Listing or annexing it to the complaint, on the other hand, implies being the object of the action.xxx xxx x x x
"It must be stated with equal respect that the phrase ‘judicial action or proceeding,’ within the meaning of the organic law, is subject to the ordinary rules of procedure and is subordinate to the requirements of due process. Failure to implead petitioner corporation in the action within the constitutional period is, therefore, patently transgressive of the constitutional mandate against deprivation of life, liberty and property without due process of law."[81]
"In this jurisdiction, a corporation has a legal personality .distinct and separate from its stockholders. Thus a suit against any of the stockholders is not ipso facto a suit against the corporation.xxx xxx xxx
"There is likewise no merit to petitioner’s argument that the doctrine which justifies the ‘piercing of the veil of corporate fiction’ is applicable to the case at bar. The Sandiganbayan correctly found the record bereft of sufficient basis from which to conclude that private respondents’ respective corporate identities have been used to defeat public convenience, protect fraudulent schemes, or evade obligations and liabilities under statutes. Whether or not Enrique Luy, a major stockholder of private respondents, acted as a dummy of Eduardo Cojuangco, Jr., and whether or not the shareholders of Enrique Luy are beneficially owned by Eduardo Cojuangco, Jr., are matters still to be established in Civil Case No. 0033. But as far as private respondents are concerned, inclusion of their major stockholder in Civil Case No. 0033 does not detract from, nor excuse, petitioner’s failure to file the proper judicial action against them in compliance with the constitutional requirement under Section 26 of Article XVIII."
"Where the original complaint states a cause of action, but does it imperfectly, and afterward an amended complaint is filed, correcting the defect, the plea of statute of limitations will relate to the time of filing the original complaint."
"DOES INCLUSION IN THE COMPLAINTS FILED BY THE PCGG BEFORE THE SANDIGANBAYAN OF SPECIFIC ALLEGATIONS OF CORPORATIONS BEING ‘DUMMIES’ OR UNDER THE CONTROL OF ONE OR ANOTHER OF THE DEFENDANTS NAMED THEREIN AND USED AS INSTRUMENTS FOR ACQUISITION, OR AS BEING DEPOSITARIES OR PRODUCTS, OF ILL-GOTTEN WEALTH; OR THE ANNEXING TO SAID COMPLAINTS OF A LIST OF SAID FIRMS, BUT WITHOUT ACTUALLY IMPLEADING THEM AS DEFENDANTS, SATISFY THE CONSTITUTIONAL REQUIREMENT THAT IN ORDER TO MAINTAIN A SEIZURE EFFECTED, IN ACCORDANCE WITH EXECUTIVE ORDER NO. 1, s. 1986, THE CORRESPONDING ‘JUDICIAL ACTION OR PROCEEDING’ SHOULD BE FILED WITHIN THE SIX-MONTH PERIOD PRESCRIBED IN SECTION 26, ARTICLE XVIII, OF THE (1987) CONSTITUTION?"
"It is thus both needful and timely to pronounce that:
1) Section 26, Article XVIII of the Constitution does not, by its terms or any fair interpretation thereof, require that corporations or business enterprises alleged to be repositories of ‘ill-gotten wealth’, as the term is used in said provision, be actually and formally impleaded in the actions for the recovery thereof, in order to maintain in effect existing sequestrations thereof;
2) complaints for the recovery of ill-gotten wealth which merely identify and/or allege said corporations or enterprises to be the instruments, repositories or the fruits of ill-gotten wealth without more, come within the meaning of the phrase ‘corresponding judicial action or proceeding’ contemplated by the constitutional provision referred to; the more so, that normally, said corporations, as distinguished from their stockholders or members, are not generally suable for the latter’s illegal or criminal actuations in the acquisition of the assets invested by them in the former.
3) even assuming the impleading of said corporations to be necessary and proper so that judgment may comprehensively and effectively be rendered in the actions, amendment of the complaints to implead them as defendants may, under existing rules of procedure, be done at any time during the pendency of the actions thereby initiated, and even during the pendency of an appeal to the Supreme Court - a procedure that, in any case, is not inconsistent with or proscribed by the constitutional time limits to the filing of the corresponding complaints ‘for’ - i.e., with regard or in relation to, in respect of or in connection with, or concerning - orders or sequestration, freezing, or provisional takeover."
"XVI. The "Interco" and "PJI" Rulings
"This Court is not unmindful of the fact that its Resolution-of July 26, 1991 on the petitioner’s motion for reconsideration in G.R. No. 92755 (PCGG vs. Interco) appears to sustain the proposition that actual impleading in the recovery action of a corporation under sequestration for being a repository of illegally-acquired wealth, is necessary and requisite for such proposed or pending seizure to come under the protective umbrella of the Constitution. But Interco is to be differentiated from the cases now under review in that in the former, as already elsewhere herein made clear, there was a lack of proof, even of the prima facie kind, that Eduardo Cojuangco, Jr. owned any stock in Interco, the evidence on record being in fact that said corporation had been organized as a family corporation of the Luys.
"So, too, this Court’s judgment in the so-called ‘PJI Case’ (Republic of the Philippines [PCGG] v. Sandiganbayan and Rosario Olivares) may not be regarded as on all fours with the cases under consideration. The PJI Case involved the shares of stock in the name of eight (8) natural persons which had never been sequestered at all. What happened was that the PCGG simply arrogated unto itself the right to vote those unsequestered shares on the bare claim that the eight (8) registered owners thereof were ‘dummies’ of Benjamin Romualdez, the real owner of the shares; and all that the PCGG had done as predicate for that act of appropriation of the stock, was to include all the shares of PJI in a list (Annex A) appended to its complaint in Sandiganbayan Case no. 0035, describing them as among the properties illegally acquired by Romualdez. Unfortunately, as in Interco, the PCGG failed to substantiate by competent evidence its theory of clandestine ownership of Romualdez; and since moreover, there had been no sequestration of the alleged dummies’ shares of stock, it was undoubtedly correct for the Sandiganbayan to grant the latter’s motion for them to be recognized and declared as the true owners of the stock in question, which judgment this Court subsequently pronounced to be free from grave abuse of discretion."[85]
"x x x failure to implead these corporations as defendants and merely annexing a list of such corporations to the complaints is a violation of their right to due process for it would in effect be disregarding their distinct and separate personality without a hearing.
"In cases where stocks of a corporation were allegedly the fruits of ill-gotten wealth, it should be remembered that in most of these cases the stocks involved constitute a substantial if not controlling interest in the corporations. The basic tenets of fair play demand that these corporations be impleaded as defendants since a judgment in favor of the government will undoubtedly substantially and decisively affect the corporations as distinct entities. The judgment could strip them of everything without being previously heard as they are not parties to the action in which the judgment is rendered.
"x x x Holding that the ‘corresponding judicial action or proceeding’ contemplated by the Constitution is any action concerning or involving the corporation under sequestration is oversimplifying the solution, the result of which is antagonistic to the principles of justice and fair play.
"x x x the actions contemplated by the Constitution should be those which include the corporation not as a mere annex to the complaint but as defendant. This is the minimum requirement of the due process guarantee. Short of being impleaded, the corporation has no standing in the judicial action. It cannot adequately defend itself. It may not even be heard.
"On the x x x opinion that alternatively the corporations can be impleaded as defendants by amendment of the complaint, Section 26, Article XVIII of the Constitution would appear to preclude this procedure, for allowing amendment of the complaint to implead therefore unimpleaded corporations would in effect allow complaints against the corporations to be filed beyond the periods fixed by said Section 26.
"Justice Amuerfina Melencio-Herrera in her separate opinion in Bataan Shipyard and Engineering Corporation, Inc. v. PCGG (150 SCRA 181, 253) correctly stated what should be the rule, thus:‘Sequestration is an extraordinary, harsh and severe remedy. It should be confined to its lawful parameters and exercised, with due regard, in the words of its enabling laws, to the requirements of fairness, due process and Justice.’ (Italics supplied)
"While government efforts to recover illegally amassed wealth should have support from all its branches, eagerness and zeal should not be allowed to run berserk, overriding in the process the very principles that it is sworn to uphold. In our legal system, the ends do not always justify the means. Wrongs are never corrected by committing other wrongs, and as above-discussed the recovery of ill-gotten wealth does not and should never justify unreasonable intrusions into constitutionally forbidden grounds x x x."
"1.02. Petitioner apparently overlooks that the Sandiganbayan is a collegiate court which sits in divisions composed of three (3) members each. The unanimous vote of all the three (3) members of a division is required for the rendition of a judgment (See Section 1(b), Rule XVIII, Revised Rules of the Sandiganbayan). The Decision and Resolution subject of the present - appeal, though penned by Justice Romeo Escareal, the Chairman of the Second Division of the Sandiganbayan, were concurred in by the two (2) other members of the Sandiganbayan’s Second Division. Such being the case, petitioner’s fears of bias or partiality on the part of Justice Romeo Escareal cannot affect the questioned Decision and Resolution rendered by the Sandiganbayan (Second Division). As held by this Honorable Court in Mirriam Defensor-Santiago vs. Hon. Justice Francis Garchitorena, Et Al. (G.R. No. 109226, December 2, 1993):‘Notwithstanding petitioner’s misgiving, it should be taken into consideration that the Sandiganbayan sits in three divisions with three justices in each division. Unanimity among the three members is mandatory for arriving at any decision of a division. (P.D. 1606, Sec. 5). The collegiate character of the Sandiganbayan thus renders baseless petitioner’s fear of prejudice and bias on the part of Presiding Justice Garchitorena (Paredes vs. Gopenco, 29 SCRA 688 [1969]).’"