Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission on Good Government
NEW DOCTRINEFacts
The Antecedents: Petitioner Bataan Shipyard & Engineering Co., Inc. (BASECO) challenged Executive Orders Nos. 1 and 2, and subsequent sequestration, takeover, and other orders issued by the Presidential Commission on Good Government (PCGG) and its agents. These actions included a sequestration order dated April 14, 1986, an order for production of corporate documents, termination of security services contracts, amendment of payment terms for road use, an aborted contract for wharf improvement, an order for the operation of a rock quarry, an order to dispose of scrap, and a provisional takeover order dated July 14, 1986, which also led to the termination of services of BASECO officers. Procedural History: BASECO filed a special civil action for certiorari and prohibition, praying for the declaration of unconstitutionality of Executive Orders Nos. 1 and 2, and the annulment of all orders and acts done by the PCGG based on these executive orders, including the sequestration and takeover orders, and the termination of its executives. The Petition: BASECO argued that sequestration without notice and hearing became unconstitutional after the promulgation of the Freedom Constitution. It contended that the PCGG, as an investigative agency, was not competent to act as prosecutor and judge, that there was no remedy to challenge the takeover, and that the orders constituted a Bill of Attainder. BASECO also argued that the order to produce documents violated its right against self-incrimination and unreasonable searches and seizures, and that the PCGG's interference with its contracts violated the non-impairment clause.
Issue(s)
Whether Executive Orders Nos. 1 and 2, and the subsequent sequestration and takeover orders issued by the PCGG, are constitutional. Whether the PCGG's order for the production of corporate records violated BASECO's right against self-incrimination and unreasonable searches and seizures. Whether the PCGG's actions, such as terminating contracts and amending payment terms, violated the non-impairment clause of the Constitution. Whether the PCGG acted as both prosecutor and judge. Whether the PCGG's actions constituted a Bill of Attainder.
Ruling
The petition is dismissed. The temporary restraining order issued on October 14, 1986, is lifted. The acts of sequestration and takeover by the PCGG are sustained as being in accordance with law.
Ratio Decidendi
On the Constitutionality of Executive Orders Nos. 1 and 2 and PCGG's Powers: The Court held that Executive Orders Nos. 1 and 2, and the provisional remedies of sequestration, freeze orders, and provisional takeover, are constitutional. These measures were enacted to carry out the mandate of the Provisional Constitution (Proclamation No. 3) to recover ill-gotten wealth. The Court emphasized that these remedies are provisional and designed to prevent the dissipation of assets pending judicial determination. The requirement of a prima facie case and an opportunity to contest the order were deemed sufficient to satisfy due process. The Court noted that the 1987 Constitution itself, in Section 26 of its Transitory Provisions, ratified the authority to issue sequestration and freeze orders. On the Order for Production of Documents: The Court ruled that the right against self-incrimination does not apply to juridical persons like corporations. Corporations are creatures of the state and are subject to investigation regarding their operations. Furthermore, Executive Order No. 14-A provides immunity from prosecution for testimony compelled under such orders, except for perjury. The claim of unreasonable search and seizure was dismissed as no search or seizure occurred. On the Non-Impairment Clause: The Court found no sufficient showing that the PCGG's actions, such as terminating contracts or amending payment terms, violated the non-impairment clause. These actions were undertaken in the context of the PCGG's mandate to conserve and administer assets suspected of being ill-gotten, and any impact on contracts was incidental to this primary objective. On PCGG Acting as Prosecutor and Judge: The Court clarified that the PCGG is not a judge. Its function is to investigate, collect evidence, issue provisional orders, and file cases with the Sandiganbayan. The Sandiganbayan, not the PCGG, is vested with the authority to adjudicate cases involving forfeiture of ill-gotten wealth. Therefore, the accusation that the PCGG acted as both prosecutor and judge was deemed without merit. On the Bill of Attainder Claim: The Court rejected the argument that the executive orders constituted a bill of attainder. A bill of attainder is a legislative act inflicting punishment without judicial trial. The executive orders do not determine guilt; they merely authorize provisional measures pending judicial proceedings. Any determination of guilt and forfeiture must be done by the Sandiganbayan. Thus, the executive orders do not substitute legislative for judicial determination of guilt.
Main Doctrine
The Presidential Commission on Good Government (PCGG) has the authority to issue sequestration, freeze, and provisional takeover orders under Executive Orders Nos. 1 and 2 to recover ill-gotten wealth, and these powers are constitutional, provided there is a prima facie case and an opportunity for the affected party to contest the order. The PCGG acts as a conservator, not an owner, and its powers are limited to administration and preservation pending judicial determination.