Republic of the Philippines (Presidential Commission on Good Government) v. Sandiganbayan
REITERATIONFacts
The Antecedents: The Presidential Commission on Good Government (PCGG) sequestered Eastern Telecommunications Philippines, Inc. (ETPI). While 40% of the shares were later freed, 60% (Class "A" shares) remained sequestered. The PCGG filed a case for reconveyance, reversion, accounting, and restitution of alleged ill-gotten ETPI shares. Respondents, ETPI Class "A" stockholders, filed a motion for the PCGG to remit cash dividends amounting to P90 million, which ETPI had turned over to the PCGG, to the Sandiganbayan. The Sandiganbayan ordered the PCGG to remit the dividends and deposit them in a special time deposit with the Philippine National Bank (PNB) for the account of the Sandiganbayan, in escrow. Subsequently, ETPI turned over another P30 million in cash dividends to the PCGG, prompting another motion from the respondents. The Sandiganbayan denied the PCGG's motion to set aside its previous resolution and granted the respondents' motion, ordering the remittance of the additional P30 million. Procedural History: The PCGG assailed the Sandiganbayan resolutions ordering the remittance of the total P120 million in ETPI cash dividends to be deposited with the PNB in the Sandiganbayan's name, pending determination of ownership. The Petition: The PCGG argued that under its authority to sequester ill-gotten properties, the sequestered assets remain in its custody until ownership is determined. It contended that its administrative functions over these properties should not be interfered with by the Sandiganbayan, citing the principle of separation of powers and rulings in Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission on Good Government (BASECO case) and Presidential Commission on Good Government v. Peña.
Issue(s)
Whether the Sandiganbayan committed grave abuse of discretion in ordering the PCGG to remit the ETPI cash dividends to the Sandiganbayan for deposit in escrow. Whether placing the sequestered dividends under custodia legis violates the separation of powers between the executive/administrative and judicial functions.
Ruling
The petition is denied due course for lack of merit. The questioned resolutions of the Sandiganbayan are affirmed.
Ratio Decidendi
On the Sandiganbayan's authority to order remittance and deposit: The Supreme Court reiterated that the PCGG's power to sequester is akin to provisional remedies like preliminary attachment or receivership, which are always subject to the control of the court. The Sandiganbayan, having exclusive and original jurisdiction over sequestration cases, possesses ample power to control proceedings, including the issuance of orders and ancillary writs to effectuate its judgment. Placing property in litigation under judicial possession, such as in a special time deposit with a bank for the account of the court, is an ancient and accepted procedure. This is essential for orderly administration of justice and to prevent conflicts between courts. The Court cited numerous US Supreme Court cases emphasizing a court's inherent power to make interlocutory orders necessary to protect its jurisdiction and ensure the effectiveness of its eventual decree. The need to place the P120,000,000.00 ETPI cash dividends in custodia legis was deemed imperative, especially since some dividends might belong to persons not even parties to the main sequestration case, such as the private respondents who were allowed to intervene. On the violation of separation of powers: The Court found no merit in the argument that placing the dividends under custodia legis violates the separation of powers. While purely administrative and discretionary functions of administrative agencies may not be interfered with by courts, the Sandiganbayan's jurisdiction over sequestration cases demands that it should also have the authority to preserve the subject matter of the cases. Issuing orders, including placing properties in custodia legis, to make its judgment effective and protect rightful claimants is a judicial, not an administrative, matter. The Court clarified that the administration of sequestered properties is left to the PCGG, but this does not preclude the Sandiganbayan from exercising its judicial power to preserve the assets under litigation. The pronouncements in the Peña case regarding respect for administrative findings of fact do not divest the Sandiganbayan of its authority to issue conservatory orders when necessary for the effective exercise of its jurisdiction.
Main Doctrine
The Sandiganbayan has the authority to place sequestered properties, including cash dividends, under custodia legis to preserve them and ensure the effective determination of ownership, as this power is an incident of its exclusive jurisdiction over sequestration cases.