Presidential Commission on Good Government v. Aquino
REITERATIONFacts
The Antecedents: On June 18, 1982, Marcelo Fiberglass Corporation (MFC), through its president Edward T. Marcelo, entered into a Contract to Buy and Sell with the Philippine Navy for the construction and delivery of fifty-five patrol boats. The contract price was P425,700,000, with a 30% down payment. The contract was unilaterally initiated by Edward T. Marcelo and favorably endorsed by then President Ferdinand Marcos. To facilitate funding, MFC secured presidential approval for a government guarantee for a loan. Subsequently, presidential approval was obtained to release the first down payment of P127,710,000 from unprogrammed funds. On July 28, 1983, the Philippine Navy paid P127,710,000 through a cashier's check, allegedly in violation of the contract requiring a letter of credit. MFC alleged this was facilitated by Edward T. Marcelo's closeness to President Marcos. Further payments were made, totaling P337,437,000, yet MFC had not delivered any boats. An amendment to the contract adjusted the price to P926,524,500 due to peso depreciation. Procedural History: On February 16, 1987, the Presidential Commission on Good Government (PCGG) issued a writ of sequestration over all assets of MFC and Edward T. Marcelo, recommending recovery of the advanced payments. MFC asserted the writ was issued without a prima facie case, prior notice, or opportunity to be heard, and was implemented with military aid, leading to the premises being padlocked and personnel barred. This prompted MFC to file a case for certiorari and prohibition with the Regional Trial Court (RTC) of Malabon. On March 2, 1987, the RTC issued a restraining order enjoining the PCGG from executing and implementing the writ of sequestration and ordered the turnover of premises and assets. The PCGG filed a Motion to Dismiss. On March 19, 1987, the RTC issued a writ of preliminary injunction. The PCGG then filed a petition for certiorari, prohibition, and/or mandamus with the Supreme Court. The Petition: The PCGG assails the RTC's assumption of jurisdiction and interference with its orders and functions. MFC, in its comment and counter-petition, questions the PCGG's jurisdiction to sequester assets not constituting ill-gotten wealth and argues that the sequestration violates constitutional rights.
Issue(s)
Whether the Regional Trial Court (RTC) has jurisdiction over the Presidential Commission on Good Government (PCGG) in the exercise of its powers. Whether the PCGG has the jurisdiction, power, and authority to sequester assets of MFC that do not constitute ill-gotten wealth. Whether the issuance and implementation of the writ of sequestration violated MFC's constitutional rights against impairment of obligation of contracts and deprivation of property without due process of law.
Ruling
The petition in G.R. No. 77816 is granted. The orders issued by the respondent judge on March 2, 1987, and March 19, 1987, in Civil Case No. 904-MN are set aside as null and void. The respondent judge is ordered to cease and desist from any further proceedings in Civil Case No. 904-MN, which is ordered dismissed. The counter-petition in G.R. No. 78753 is dismissed for lack of merit.
Ratio Decidendi
On the jurisdiction of the Regional Trial Court over the PCGG: The Supreme Court held that Regional Trial Courts and the Court of Appeals have no jurisdiction over the Presidential Commission on Good Government (PCGG) in the exercise of its powers under applicable Executive Orders and Article XVIII, Section 26 of the Constitution. Consequently, they may not interfere with and restrain or set aside the orders and actions of the Commission. This is because Section 2 of Executive Order No. 14 vests the Sandiganbayan with exclusive and original jurisdiction over all cases filed by the PCGG concerning funds, moneys, assets, and properties illegally acquired or misappropriated, whether civil or criminal. Furthermore, all incidents arising from, incidental to, or related to such cases also fall under the Sandiganbayan's exclusive and original jurisdiction. The Supreme Court reiterated its ruling in PCGG vs. Hon. Emmanuel G. Peña et al., emphasizing that the Sandiganbayan's jurisdiction is exclusive and original, subject only to review on certiorari by the Supreme Court. The attempt to exclude special civil actions from the Sandiganbayan's jurisdiction is unavailing if these actions similarly involve the powers and functions of the PCGG. The Court found it superfluous to restate the reasons for the exclusivity of the Sandiganbayan's jurisdiction, as they were amply explained in the cited decision. The matters involved in the present cases, namely the sequestration of assets of MFC and its president, are orders issued by the PCGG in the exercise of its powers, and the propriety of such sequestration and any related incidents fall within the exclusive jurisdiction of the Sandiganbayan. On the PCGG's authority to sequester assets not constituting ill-gotten wealth: The Court implicitly affirmed the PCGG's authority to sequester assets in question by ruling that the RTC lacked jurisdiction to interfere. The core of the PCGG's mandate, as established by Executive Order No. 14, is to recover ill-gotten wealth. While the counter-petition raised the issue of whether assets not constituting ill-gotten wealth could be sequestered, the Court's dismissal of the counter-petition and its emphasis on the Sandiganbayan's exclusive jurisdiction over PCGG cases suggest that the determination of what constitutes ill-gotten wealth, and thus subject to sequestration, falls within the purview of the Sandiganbayan's original and exclusive jurisdiction. The Supreme Court's role is limited to reviewing decisions of the Sandiganbayan via certiorari. Therefore, the RTC cannot preempt this process by questioning the PCGG's determination of what assets are subject to sequestration in the first instance. On the alleged violation of constitutional rights: The Court's decision to set aside the RTC's orders and dismiss the case effectively negates the RTC's findings regarding the alleged violations of MFC's constitutional rights. By holding that the RTC lacked jurisdiction, the Supreme Court implicitly found that the RTC could not properly rule on the alleged impairment of contract or deprivation of property without due process. The proper venue for such claims, when they arise from or are incidental to PCGG sequestration orders, is the Sandiganbayan. The Supreme Court's resolution of the jurisdictional issue preempts any discussion on the merits of the alleged constitutional violations at the RTC level. The Court's directive to cease and desist from further proceedings in the RTC and the dismissal of the case signify that the RTC's restraining order and preliminary injunction were issued without jurisdiction and were therefore void.
Main Doctrine
Regional Trial Courts and the Court of Appeals have no jurisdiction over the Presidential Commission on Good Government (PCGG) in the exercise of its powers under applicable Executive Orders and Article XVIII, Section 26 of the Constitution, and therefore may not interfere with and restrain or set aside the orders and actions of the Commission. All cases of the PCGG regarding funds, moneys, assets, and properties illegally acquired or misappropriated, whether civil or criminal, fall within the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to such cases also fall under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court.