Presidential Commission on Good Government v. Eduardo Cojuangco, Jr.
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the right to vote sequestered shares of stock in San Miguel Corporation (SMC). Respondent stockholders, who are registered shareholders of SMC, sought to vote their shares in an upcoming stockholders' meeting. The petitioner, the Presidential Commission on Good Government (PCGG), had sequestered these shares as part of a broader suit alleging they were ill-gotten wealth. 2. Procedural History: Respondent stockholders filed a motion before the Sandiganbayan (SB) to enjoin the PCGG from voting the sequestered shares and to allow them to vote instead. The SB granted this motion, subject to the posting of a bond. The PCGG, deeming the SB's resolution erroneous and facing time constraints due to the imminent stockholders' meeting, immediately filed a petition for certiorari and mandamus with the Supreme Court, seeking a temporary restraining order (TRO). 3. The Petition: The PCGG assailed the Sandiganbayan's resolution before the Supreme Court via a petition for certiorari and mandamus, seeking a TRO to prevent the respondent stockholders from voting the sequestered shares. The petition was filed during the Court's summer session and, while initially submitted with a faxed copy of the SB resolution, a certified copy was later provided. The core issue presented to the Supreme Court was who, between the PCGG and the respondent stockholders, had the right to vote the sequestered SMC shares at the scheduled meeting.
Issue(s)
Whether the Sandiganbayan gravely abused its discretion in issuing the resolution enjoining the PCGG from voting the sequestered shares and allowing respondent stockholders to vote them. Whether the PCGG has the right to vote sequestered shares of stock in a corporation.
Ruling
The Supreme Court remanded the case to the Sandiganbayan for further proceedings. It ordered respondent stockholders to furnish an additional bond of P25,000,000.00. The Court also clarified that the right to vote sequestered shares depends on the two-tiered test set in PCGG v. Sandiganbayan (240 SCRA 377) and Cojuangco v. Calpo (June 10, 1993 Resolution in G.R. No. 115352).
Ratio Decidendi
On the issue of whether the Sandiganbayan gravely abused its discretion in enjoining the PCGG from voting the sequestered shares: The Court acknowledged the urgency and the extraordinary circumstances surrounding the case, which led it to relax the procedural rule requiring a certified true copy of the assailed resolution. The Court noted that the PCGG had been voting the sequestered SMC shares since 1986, except for a period in 1991. However, the Court recalled its ruling in Cojuangco, Jr. vs. Roxas (195 SCRA 797), which held that the PCGG, as a mere conservator, cannot perform acts of strict ownership, including voting sequestered shares, unless there is a clear judicial determination that the shares are ill-gotten. The Court emphasized that the constitutional right against deprivation of property without due process necessitates caution in the PCGG's actions. Therefore, the SB's resolution, which allowed the stockholders to vote, was considered an incident of the main sequestration case, and its resolution was subject to further determination. On the issue of the PCGG's right to vote sequestered shares: The Court reiterated its stance from previous cases, particularly Cojuangco, Jr. vs. Roxas, that the PCGG generally cannot vote sequestered shares as it is merely a conservator. The right to vote is a basic feature of ownership. However, the Court also considered its later ruling in PCGG v. Sandiganbayan (240 SCRA 377), which, while affirming that sequestration does not automatically deprive stockholders of their right to vote, necessitates a determination of the alleged ill-gotten character of the shares. The Court established a two-tiered test for resolving who should vote sequestered shares pending the final disposition of the main sequestration suit. This test requires (1) prima facie evidence showing that the shares are ill-gotten and belong to the state, and (2) evidence of an immediate danger of dissipation that necessitates continued sequestration and voting by the PCGG. The Court found that there was a need for factual determination by the Sandiganbayan based on this test, hence the remand.
Main Doctrine
The right to vote sequestered shares of stock, pending final determination of their ill-gotten character, requires a two-tiered test: (1) prima facie evidence of ill-gotten nature, and (2) immediate danger of dissipation. The Sandiganbayan must apply this test in resolving motions concerning the voting of such shares.