Baseco v. Pcgg

8/12/2019 Baseco v. Pcgg

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lawphil

Today is Monday, June 17, 2013

Republic of the Philippines

SUPRM !"URT

Manila

# $%#!

&'R' #o' 7())( May 27, 1*)7

$%T%%# S+P-%R. / #R#& !"', #!' $%S!", petitione,

s'

PRS.#T%4 !"MMSS"# "# &"". &"5R#M#T, !+%RM%# J"5T"

S%4"#&%, !"MMSS"#R M%R- !"#!P!"# $%UTST%, !"MMSS"#R

R%M"# .%6, !"MMSS"#R R%U4 R' .%6%, !"MMSS"#R U#T# S'

."R"M%4, !%PT' J"R& $' S%!U#!", et al', espondents'

%postol, $enas, &u8au, "na and %ssociates fo petitione'

5icente &' Sison fo inteeno %'T' %besa8is'

#%R5%S%, J'9

!hallen:ed in this special ciil action of cetioai and pohibition by a piate copoation ;nown

as the $ataan Shipyad and n:ineein: !o', nc' ae9 1 uestation ode which, in the iew of the petitione copoation, initiated all its 8isey

was issued on %pil 1B, 1*)@ by !o88issione May !oncepcion $autista' t was addessed to

thee of the a:ents of the !o88ission, heeafte si8ply efeed to as P!&&' t eads as follows9


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R9 SUSTR%T"# "R.R

$y itue of the powes ested in the Pesidential !o88ission on &ood &oen8ent, by authoity

of the Pesident of the Philippines, you ae heeby diected to se>ueste the followin: co8panies'

1' $ataan Shipyad and n:ineein: !o', nc' n:ineein: sland Shipyad and Maieles

Shipyad

2' $aseco uay

3' Philippine JaiC%lai !opoation

B' ?idelity Mana:e8ent !o', nc'

(' Ro8son Realty, nc'

@' Tident Mana:e8ent !o'

7' #ew Tident Mana:e8ent

)' $ay Tanspot

*' %nd all affiliate co8panies of %lfedo D$eEoD Ro8ualde=

-ou ae heeby odeed9

1' To i8ple8ent this se>uestation ode with a 8ini8u8 disuption of these co8paniesF business

actiities'

2' To ensue the continuity of these co8panies as :oin: concens, the cae and 8aintenance of

these assets until such ti8e that the "ffice of the Pesident thou:h the !o88ission on &ood

&oen8ent should decide othewise'

3' To epot to the !o88ission on &ood &oen8ent peiodically'

?uthe, you ae authoi=ed to e>uest fo MilitayASecuity Suppot fo8 the MilitayAPolice

authoities, and such othe acts essential to the achiee8ent of this se>uestation ode' 1

b' "de fo Poduction of .ocu8ents

"n the sten:th of the aboe se>uestation ode, M' Jose M' $alde, actin: fo the P!&&,

addessed a lette dated %pil 1), 1*)@ to the Pesident and othe offices of petitione fi8,

eiteatin: an ealie e>uest fo the poduction of cetain docu8ents, to wit9


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1' Stoc; Tansfe $oo;

2' 4e:al docu8ents, such as9

2'1' %ticles of ncopoation

2'2' $yC4aws

2'3' Minutes of the %nnual Stoc;holdes Meetin: fo8 1*73 to 1*)@

2'B' Minutes of the Re:ula and Special Meetin:s of the $oad of .iectos fo8 1*73 to 1*)@

2'(' Minutes of the


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issued on %pil 21, 1*)@ by a !apt' ?lodelino $' 6abala, a 8e8be of the tas; foce assi:ned to

cay out the basic se>uestation ode' +e sent a lette to $%S!"Fs 5iceCPesident fo ?inance, 3

te8inatin: the contact fo secuity seices within the n:inee sland co8pound between

$%S!" and D%ncho and ?%RG%-SD and Dothe ciilian secuity a:encies,D !%P!"M

8ilitay pesonnel hain: aleady been assi:ned to the aea,

2 !han:e of Mode of Pay8ent of nty !ha:es

"n July 1(, 1*)@, the sa8e !apt' 6abala issued a Me8oandu8 addessed to DTuc; "wnes and

!ontactos,D paticulaly a DM' $uddy "ndiilla #ational Maine !opoation,D adisin: of the

a8end8ent in pat of thei contacts with $%S!" in the sense that the stipulated cha:es fo use

of the $%S!" oad netwo; wee 8ade payable Dupon enty and not any8oe subEect to

8onthly billin: as was oi:inally a:eed upon'D B

d' %boted !ontact fo 8poe8ent of Ghaf at n:inee sland

"n July *, 1*)@, a P!&& fiscal a:ent, S' $een:ue, enteed into a contact in behalf of $%S!"

with .elta8aine nte:ated Pot Seices, nc', in itue of which the latte undetoo; to

intoduce i8poe8ents costin: appo


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subEect to specified :uidelines and safe:uads includin: audit and eification' )

:' The T%"5R "de

$y lette dated July 1B, 1*)@, !o88issione Ra8on %' .ia= deceed the poisional ta;eoe bythe P!&& of $%S!", Dthe Philippine .oc;yad !opoation and all thei affiliated co8panies'D

* .ia= ino;ed the poisions of Section 3 c of


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1 declae unconstitutional and oid


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2 allowin: P!&& %:ent Sileio $een:ue to ente into an Dano8alous contactD with

.elta8aine nte:ated Pot Seices, nc', :iin: the latte fee use of $%S!" pe8isesI 1@

3 authoi=in: P!&& %:ent, Mayo Melba $uenaentua, to 8ana:e and opeate its oc; >uay

at Sesi8an, MaielesI 17

B authoi=in: the sa8e 8ayo to sell o dispose of its 8etal scap, e>uip8ent, 8achiney and

othe 8ateialsI 1)

( authoi=in: the ta;eoe of $%S!", Philippine .oc;yad !opoation, and all thei

affiliated co8paniesI

@ te8inatin: the seices of $%S!" euestation, ?ee=e and Ta;eoe "des

Many 8isconceptions and 8uch doubt about the 8atte of se>uestation, ta;eoe and fee=e

odes hae been en:endeed by 8isappehension, o inco8plete co8pehension if not indeed

downi:ht i:noance of the law :oenin: these e8edies' t is needful that these 8isconceptions

and doubts be dispelled so that uninfo8ed and useless debates about the8 8ay be aoided, and

a:u8ents tainted b sophisty o intellectual dishonesty be >uic;ly e


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fee=in: of assets o accounts'D 2B

b' uestation of all business entepises and

entities owned o contolled by the8, duin: his ad8inistation, diectly o thou:h no8inees, by

ta;in: undue adanta:e of thei public office andAo usin: thei powes, authoity, influence,

connections o elationship' 27

n elation to the ta;eoe o se>uestation that it was authoi=ed to undeta;e in the fulfill8ent of

its 8ission, the P!&& was :anted Dpowe and authoityD to do the followin: paticula acts, to

wit9

1' To se>ueste o place o cause to be placed unde its contol o possession any buildin: o office

wheein any illC:otten wealth o popeties 8ay be found, and any ecods petainin: theeto, inode to peent thei destuction, conceal8ent o disappeaance which would fustate o ha8pe

the inesti:ation o othewise peent the !o88ission fo8 acco8plishin: its tas;'

2' To poisionally ta;e oe in the public inteest o to peent the disposal o dissipation,

business entepises and popeties ta;en oe by the :oen8ent of the Macos %d8inistation o

by entities o pesons close to fo8e Pesident Macos, until the tansactions leadin: to such

ac>uisition by the latte can be disposed of by the appopiate authoities'

3' To enEoin o estain any actual o theatened co88ission of acts by any peson o entity that

8ay ende 8oot and acade8ic, o fustate o othewise 8a;e ineffectual the effots of the

!o88ission to cay out its tas; unde this ode' 2)

So that it 8i:ht ascetain the facts :e8ane to its obEecties, it was :anted powe to conduct

inesti:ationsI e>uie sub8ission of eidence by subpoenae ad testificandu8 and duces tecu8I

ad8iniste oathsI punish fo conte8pt' 2* t was :ien powe also to po8ul:ate such ules and

e:ulations as 8ay be necessay to cay out the puposes of H H its ceation' 30

c'


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ecoey of illC:otten popeties a8assed by the leades and suppotes of the peious e:i8e'D t

declaes that9

1 H H the &oen8ent of the Philippines is in possession of eidence showin: that thee ae assets

and popeties pupotedly petainin: to fo8e ?edinand ' Macos, andAo his wife Ms' 8eldaRo8ualde= Macos, thei close elaties, subodinates, business associates, du88ies, a:ents o

no8inees which had been o wee ac>uied by the8 diectly o indiectly, thou:h o as a esult of

the i8pope o ille:al use of funds o popeties owned by the :oen8ent of the Philippines o

any of its banches, instu8entalities, entepises, ban;s o financial institutions, o by ta;in:

undue adanta:e of thei office, authoity, influence, connections o elationship, esultin: in thei

unEust enich8ent and causin: :ae da8a:e and peEudice to the ?ilipino people and the Republic

of the Philippines9D and

2 H H said assets and popeties ae in the fo8 of ban; accounts, deposits, tust accounts, shaes

of stoc;s, buildin:s, shoppin: centes, condo8iniu8s, 8ansions, esidences, estates, and othe

;inds of eal and pesonal popeties in the Philippines and in aious counties of the wold'D 31

Upon these pe8ises, the PesidentC

1 fo=e Dall assets and popeties in the Philippines in which fo8e Pesident Macos andAo his

wife, Ms' 8elda Ro8ualde= Macos, thei close elaties, subodinates, business associates,

du88ies, a:ents, o no8inees hae any inteest o paticipationI

2 pohibited fo8e Pesident ?edinand Macos andAo his wife H H, thei close elaties,subodinates, business associates, duties, a:ents, o no8inees fo8 tansfein:, coneyin:,

encu8bein:, concealin: o dissipatin: said assets o popeties in the Philippines and aboad,

pendin: the outco8e of appopiate poceedin:s in the Philippines to dete8ine whethe any such

assets o popeties wee ac>uied by the8 thou:h o as a esult of i8pope o ille:al use of o

the conesion of funds belon:in: to the &oen8ent of the Philippines o any of its banches,

instu8entalities, entepises, ban;s o financial institutions, o by ta;in: undue adanta:e of thei

official position, authoity, elationship, connection o influence to unEustly enich the8seles at

the euied Dall pesons in the Philippines holdin: such assets o popeties, whethe located in the

Philippines o aboad, in thei na8es as no8inees, a:ents o tustees, to 8a;e full disclosue of the

sa8e to the !o88ission on &ood &oen8ent within thity 30 days fo8 publication of H the


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d' uied

by the8 diectly o indiectly, thou:h o as a esult of the i8pope o ille:al use of funds o

popeties owned by the &oen8ent of the Philippines o any of its banches, instu8entalities,

entepises, ban;s o financial institutions, o by ta;in: undue adanta:e of thei office, authoity,

influence, connections o elationship, esultin: in thei unEust enich8ent and causin: :ae

da8a:e and peEudice to the ?ilipino people and the Republic of the PhilippinesDI 3*

c that Dsaid assets and popeties ae in the fo8 of ban; accounts' deposits, tust' accounts,

shaes of stoc;s, buildin:s, shoppin: centes, condo8iniu8s, 8ansions, esidences, estates, and

othe ;inds of eal and pesonal popeties in the Philippines and in aious counties of the

woldID B0 and

2 that cetain Dbusiness entepises and popeties wee ta;en oe by the :oen8ent of the


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Macos %d8inistation o by entities o pesons close to fo8e Pesident Macos' B1

@' &oen8entFs Ri:ht and .uty to Recoe %ll llC:otten Gealth

Thee can be no debate about the alidity and e8inent popiety of the &oen8entFs plan Dtoecoe all illC:otten wealth'D

#eithe can thee be any debate about the poposition that assu8in: the aboe descibed factual

pe8ises of the uisitionsCis within the eal8

of Eudicial notice, bein: of so euie8ent of eidentiay substantiation has been e


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wealthD as the eidence at hand 8ay eeal, thee is an obious and i8peatie need fo

peli8inay, poisional 8easues to peent the conceal8ent, disappeaance, destuction,

dissipation, o loss of the assets and popeties subEect of the suits, o to estain o foil acts that

8ay ende 8oot and acade8ic, o effectiely ha8pe, delay, o ne:ate effots to ecoe the sa8e'

7' Poisional Re8edies Pescibed by 4aw

To answe this need, the law has pescibed thee 3 poisional e8edies' These ae9 1

se>uestationI 2 fee=e odesI and 3 poisional ta;eoe'

Se>uestation and fee=in: ae e8edies applicable :eneally to uneathed instances of DillC:otten

wealth'D The e8edy of Dpoisional ta;eoeD is peculia to cases whee Dbusiness entepises and

popeties wee ta;en oe by the :oen8ent of the Macos %d8inistation o by entities o

pesons close to fo8e Pesident Macos'D B3

a' Se>uestation

$y the clea te8s of the law, the powe of the P!&& to se>ueste popety clai8ed to be DillC

:ottenD 8eans to place o cause to be placed unde its possession o contol said popety, o any

buildin: o office wheein any such popety and any ecods petainin: theeto 8ay be found,

includin: Dbusiness entepises and entities,DCfo the pupose of peentin: the destuction,

conceal8ent o dissipation of, and othewise consein: and pesein:, the sa8eCuntil it can be

dete8ined, thou:h appopiate Eudicial poceedin:s, whethe the popety was in tuth willC

:otten,D i'e', ac>uied thou:h o as a esult of i8pope o ille:al use of o the conesion of fundsbelon:in: to the &oen8ent o any of its banches, instu8entalities, entepises, ban;s o

financial institutions, o by ta;in: undue adanta:e of official position, authoity elationship,

connection o influence, esultin: in unEust enich8ent of the ostensible owne and :ae da8a:e

and peEudice to the State' BB %nd this, too, is the sense in which the te8 is co88only undestood

in othe Euisdictions' B(

b' D?ee=e "deD

% Dfee=e odeD pohibits the peson hain: possession o contol of popety alle:ed to constitute

DillC:otten wealthD Dfo8 tansfein:, coneyin:, encu8bein: o othewise depletin: o

concealin: such popety, o fo8 assistin: o ta;in: pat in its tansfe, encu8bance,

conceal8ent, o dissipation'D B@ n othe wods, it co88ands the possesso to hold the popety

and consee it subEect to the odes and disposition of the authoity deceein: such fee=in:' n

this sense, it is a;in to a :anish8ent by which the possesso o ostensible owne of popety is

enEoined not to delie, tansfe, o othewise dispose of any effects o cedits in his possession o

contol, and thus beco8es in a sense an inoluntay depositay theeof' B7

c' Poisional Ta;eoe

n poidin: fo the e8edy of Dpoisional ta;eoe,D the law ac;nowled:es the appaent


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distinction between Dill :ottenD Dbusiness entepises and entitiesD :oin: concens, businesses in

actual opeation, :eneally, as to which the e8edy of se>uestation applies, it bein: necessaily

infeed that the e8edy entails no intefeence, o the least possible intefeence with the actual

8ana:e8ent and opeations theeofI and Dbusiness entepises which wee ta;en oe by the

:oen8ent :oen8ent of the Macos %d8inistation o by entities o pesons close to hi8,D inpaticula, as to which a Dpoisional ta;eoeD is authoi=ed, Din the public inteest o to peent

disposal o dissipation of the entepises'D B) Such a Dpoisional ta;eoeD i8pots so8ethin:

8oe than se>uestation o fee=in:, 8oe than the placin: of the business unde physical

possession and contol, albeit without o with the least possible intefeence with the 8ana:e8ent

and cayin: on of the business itself' n a Dpoisional ta;eoe,D what is ta;en into custody is not

only the physical assets of the business entepise o entity, but the business opeation as well' t is

in fine the assu8ption of contol not only oe thin:s, but oe opeations o onC :oin: actiities'

$ut, to epeat, such a Dpoisional ta;eoeD is allowed only as e:ads Dbusiness entepises H H

ta;en oe by the :oen8ent of the Macos %d8inistation o by entities o pesons close to

fo8e Pesident Macos'D

d' #o .iest8ent of Title "e Popety Sei=ed

t 8ay pehaps be well at this point to stess once a:ain the poisional, contin:ent chaacte of the

e8edies Eust descibed' ndeed the law plainly >ualifies the e8edy of ta;eCoe by the adEectie,

Dpoisional'D These e8edies 8ay be esoted to only fo a paticula euisition of

title o othe i:ht theeto by the appaent owne was attended by so8e itiatin: ano8aly' #one ofthe e8edies is 8eant to depie the owne o possesso of his title o any i:ht to the popety

se>uesteed, fo=en o ta;en oe and est it in the se>uestein: a:ency, the &oen8ent o othe

peson' This can be done only fo the causes and by the pocesses laid down by law'

That this is the sense in which the powe to se>ueste, fee=e o poisionally ta;e oe is to be

undestood and euestation of popety the ac>uisition of which is

suspect shall last Duntil the tansactions leadin: to such ac>uisition H H can be disposed of by the

appopiate authoities'D B*


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pe8anent, athe than a passin:, tansitional state of affais' That this is not so is >uite euestation o fee=e odes unde Pocla8ation #o' 3 dated

Mach 2(, 1*)@ in elation to the ecoey of illC:otten wealth sha: e8ain opeatie fo not 8oe

than ei:hteen 8onths afte the atification of this !onstitution' +owee, in the national inteest,

as cetified by the Pesident, the !on:ess 8ay euesteed o fo=en popeties shall fothwith be e:isteed with the pope

cout' ?o odes issued befoe the atification of this !onstitution, the coespondin: Eudicial

action o poceedin: shall be filed within si< 8onths fo8 its atification' ?o those issued afte

such atification, the Eudicial action o poceedin: shall be co88enced within si< 8onths fo8 the

issuance theeof'

The se>uestation o fee=e ode is dee8ed auto8atically lifted if no Eudicial action o poceedin:

is co88enced as heein poided' (2

f' inship to %ttach8ent Receieship

%s thus descibed, se>uestation, fee=in: and poisional ta;eoe ae a;in to the poisional

e8edy of peli8inay attach8ent, o eceieship' (3 $y attach8ent, a sheiff sei=es popety of a

defendant in a ciil suit so that it 8ay stand as secuity fo the satisfaction of any Eud:8ent that

8ay be obtained, and not disposed of, o dissipated, o lost intentionally o othewise, pendin: the

action' (B $y eceieship, popety, eal o pesonal, which is subEect of liti:ation, is placed in the

possession and contol of a eceie appointed by the !out, who shall consee it pendin: final

dete8ination of the title o i:ht of possession oe it' (( %ll these e8edies se>uestation,

fee=in:, poisional, ta;eoe, attach8ent and eceieship ae poisional, te8poay,

desi:ned foCpaticula euestation o fee=e o ta;eoe odes ae not issued by a cout is

of no 8o8ent' The Solicito &eneal daws attention to the wit of distaint and ley which since

1*3@ the !o88issione of ntenal Reenue has been by law authoi=ed to issue a:ainst popety

of a delin>uent ta


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Dunyieldin: position, is that any chan:e in pocedue, o the institution of a new one, should

confo8 to due pocess and the othe pesciptions of the $ill of Ri:hts of the !onstitution'D (7 t

is, to be sue, a poposition on which thee can be no disa:ee8ent'

h' "des May ssue < Pate

4i;e the e8edy of peli8inay attach8ent and eceieship, as well as deliey of pesonal

popety in eplein suits, se>uestation and poisional ta;eoe wits 8ay issue e< pate' () %nd

as in peli8inay attach8ent, eceieship, and deliey of pesonality, no obEection of any

si:nificance 8ay be aised to the e< pate issuance of an ode of se>uestation, fee=in: o

ta;eoe, :ien its funda8ental chaacte of te8poainess o conditionalityI and ta;in: account

specially of the constitutionally euisites fo 5alidity

Ghat is indispensable is that, a:ain as in the case of attach8ent and eceieship, thee euestation, fee=e o ta;eoe ode, and

ade>uate and fai oppotunity to contest it and endeao to cause its ne:ation o nullification' @1

$oth ae assued unde the euestion and the ules and e:ulations po8ul:ated

by the P!&&'

a' Pi8a ?acie idence as $asis fo "des

uestation o fee=e and ta;eoe odes issue upon the authoity of at least two

co88issiones, based on the affi8ation o co8plaint of an inteested paty, o 8otu popio when

the !o88ission has easonable :ounds to beliee that the issuance theeof is waanted' @B %

si8ila e>uie8ent is now found in Section 2@, %t' K5 of the 1*)7 !onstitution, which

e>uies that a Dse>uestation o fee=e ode shall be issued only upon showin: of a pi8a facie

case'D @(

b' "ppotunity to !ontest


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%nd Sections ( and @ of the sa8e Rules and Re:ulations lay down the pocedue by which a paty

8ay see; to set aside a wit of se>uestation o fee=e ode, i=9

S!T"# (' Gho 8ay contend'CThe peson a:ainst who8 a wit of se>uestation o fee=e o

hold ode is diected 8ay e>uest the liftin: theeof in witin:, eithe pesonally o thou:hcounsel within fie ( days fo8 eceipt of the wit o ode, o in the case of a hold ode, fo8

date of ;nowled:e theeof'

S!T"# @' Pocedue fo eiew of wit o ode'C%fte due heain: o 8otu popio fo :ood

cause shown, the !o88ission 8ay lift the wit o ode unconditionally o subEect to such

conditions as it 8ay dee8 necessay, ta;in: into consideation the eidence and the cicu8stance

of the case' The esolution of the co88ission 8ay be appealed by the paty concened to the

"ffice of the Pesident of the Philippines within fifteen 1( days fo8 eceipt theeof'

Paenthetically, een if the e>uie8ent fo a pi8a facie showin: of DillC :otten wealthD wee not

euestation o

fee=in: of popety conte8plated in the euestion, it would neetheless be

euestation, fee=e and ta;eoe odes, it should be dispelled by the fact that thesepaticula e8edies and the authoity of the P!&& to issue the8 hae eceied constitutional

appobation and sanction' %s aleady 8entioned, the Poisional o D?eedo8D !onstitution

eco:ni=es the powe and duty of the Pesident to enact D8easues to achiee the 8andate of the

people to H H H ecoe illC :otten popeties a8assed by the leades and suppotes of the

peious e:i8e and potect the inteest of the people thou:h odes of se>uestation o fee=in:

of assets o accounts'D %nd as also aleady adeted to, Section 2@, %ticle K5 of the 1*)7

!onstitution @7 teats of, and atifies the Dauthoity to issue se>uestation o fee=e odes unde

Pocla8ation #o' 3 dated Mach 2(, 1*)@'D

The institution of these poisional e8edies is also pe8ised upon the StateFs inheent police

powe, e:aded, as t lie powe of po8otin: the public welfae by estainin: and e:ulatin: the

use of libety and popety,D @) and as Dthe 8ost essential, insistent and illi8itable of powes H H

in the po8otion of :eneal welfae and the public inteest,D @* and said to be coCe


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such odes as 8ay be waanted by the eidence thus collected and as 8ay be necessay to

pesee and consee the assets of which it ta;es custody and contol and peent thei

disappeaance, loss o dissipationI and eentually file and posecute in the pope cout of

co8petent Euisdiction all cases inesti:ated by it as 8ay be waanted by its findin:s' t does not

ty and decide, o hea and dete8ine, o adEudicate with any chaacte of finality o co8pulsion,cases inolin: the essential issue of whethe o not popety should be fofeited and tansfeed to

the State because DillC:ottenD within the 8eanin: of the !onstitution and the e


18/62

1' Jose %' RoEas

1,2B) shaes

2' Seeino &' de la !u=

1,2B) shaes

3' 8ilio T' -ap

2,(0) shaes

B' Jose ?enande=

1,2B) shaes

(' Jose ?ancisco

12) shaes

@' Manuel S' Mendo=a

*@ shaes

7' %nthony P' 4ee

1,2B) shaes

)' +ilaio M' Rui=

32 shaes

*' !onstante 4' ?aiLas

) shaes

10' ?idelity Mana:e8ent, nc'

@(,))2 shaes

11' Tident Mana:e8ent

7,B12 shaes


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12' United Phil' 4ines

1,2B0 shaes

13' Renato M' Tanseco

) shaes

1B' ?idel 5entua

) shaes

1(' Meto $ay .ydoc;

13@,370 shaes

1@' Manuel Jacela

1 shae

17' Jonathan &' 4u

1 shae

1)' Jose J' Tanchanco

1 shae

1*' .ioscoo Papa

12) shaes

20' dwad T' Macelo

B shaes

T"T%4

21),)1* shaes'

13 %c>uisition of #%SS!" by $%S!"

$aely si< 8onths afte its incopoation, $%S!" ac>uied fo8 #ational Shipyad / Steel!opoation, o #%SS!", a :oen8entCowned o contolled copoation, the latteFs shipyad at


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Maieles, $ataan, ;nown as the $ataan #ational Shipyad $#S, and euent Reduction of PiceI nteention of Macos

Unaccountably, the pice of P(2,000,000'00 was educed by 8oe than oneChalf, to

P2B,311,((0'00, about ei:ht ) 8onths late' % docu8ent to this effect was euied thee hunded 300 hectaes of land in Maieles fo8

the


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e>uip8ent and 8achineies of #%SS!" at J' Pan:aniban S8eltin: Plant'D n the sa8e deed,

#%SS!" co88itted itself to coopeate with $%S!" fo the ac>uisition fo8 the #ational

&oen8ent o othe appopiate &oen8ent entity of n:inee sland' !onsideation fo the sale

was set at P(,000,000'00I a down pay8ent of P1,000,000'00 appeas to hae been 8ade, and the

balance was stipulated to be paid at 7 inteest pe annu8 in e>ual se8i annual install8ents oea te8 of nine * yeas, to co88ence afte a :ace peiod of two 2 yeas' M' %tuo Pacificado

a:ain si:ned fo #%SS!", to:ethe with the :eneal 8ana:e, M' .aid R' nes'

17' 4oans "btained

t futhe appeas that on May 27, 1*7( $%S!" obtained a loan fo8 the #.!, ta;en fo8 Dthe

last aailable Japanese wa da8a:e fund of N1*,000,000'00,D to pay fo DJapanese 8ade heay

e>uip8ent band new'D )0 "n Septe8be 3, 1*7(, it :ot anothe loan also fo8 the #.! in the

a8ount of P30,000,000'00 id'' %nd on Januay 2), 1*7@, it :ot still anothe loan, this ti8e fo8

the &SS, in the su8 of P12,B00,000'00' )1 The clai8 has been 8ade that not a sin:le centao has

been paid on these loans' )2

1)' Repots to Pesident Macos

n Septe8be, 1*77, two 2 epots wee sub8itted to Pesident Macos e:adin: $%S!"' The

fist was contained in a lette dated Septe8be (, 1*77 of +ilaio M' Rui=, $%S!" pesident' )3

The second was e8bodied in a confidential 8e8oandu8 dated Septe8be 1@, 1*77 of !apt' %'T'

Ro8ualde=' )B They futhe disclose the fine hand of Macos in the affais of $%S!", and that

of a Ro8ualde=, a elatie by affinity'

a' $%S!" PesidentFs Repot

n his lette of Septe8be (, 1*77, $%S!" Pesident Rui= epoted to Macos that thee had

been Dno odes o de8ands fo ship constuctionD fo so8e ti8e and e


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!apt' %'T' Ro8ualde=F epot to the Pesident was sub8itted eleen 11 days late' t opened with

the followin: caption9

MM"R%#.UM9

?"R 9 The Pesident

SU$J!T9 %n aluation and ReCassess8ent of a Pefo8ance of a Mission

?R"M9 !apt' %'T' Ro8ualde='

4i;e Rui=, Ro8ualde= wote that $%S!" faced :eat difficulties in 8eetin: its loan obli:ations

due chiefly to the fact that Dodes to build ships as euestion us late onI and

3' Ge will owe no futhe faos fo8 the8' )7

+e also tans8itted to Macos, to:ethe with the epot, the followin: docu8ents9 ))

1' Stoc; cetificates indosed and assi:ned in blan; with assi:n8ents and waiesI )*

2' The aticles of incopoation, the a8ended aticles, and the byClaws of $%S!"I

3' .eed of Sales, wheein #%SS!" sold to $%S!" fou B pacels of land in Dn:inee

slandD, Pot %ea, ManilaI

B' Tansfe !etificate of Title #o' 12B)22 in the na8e of $%S!", coein: Dn:inee slandDI

(' !ontact dated "ctobe *, 1*73, between #%SS!" and $%S!" eCstuctue and e>uip8ent

at Maieles, $ataanI

@' !ontact dated July 1@, 1*7(, between #%SS!" and $%S!" eCstuctue and e>uip8ent atn:inee sland, Pot %ea ManilaI


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7' !ontact dated "ctobe 1, 1*7B, between P6% and $%S!" e 300 hectaes of land at

Maieles, $ataanI

)' 4ist of $%S!"Fs fi


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2' 4UST5!" P32,(3),000 Repaation

b' >uity paticipation of :oen8ent shall be in the fo8 of nonC otin: shaes'

?o i88ediate co8pliance' *2

M' MacosF :uidelines wee po8ptly co8plied with by his subodinates' TwentyCtwo 22 days

afte eceiin: thei pesidentFs 8e8oandu8, Messs' +ilaio M' Rui=, !onstante 4' ?aiLas and

&eoni8o 6' 5elasco, in epesentation of thei espectie copoations, euip8ent

so instead of #.! :ettin: paid on its loan to $%S!", it was 8ade to pay $%S!" instead the

a8ount of P1)'2)(MI 2 the shipbuildin: e>uip8ent pocued fo8 epaations thou:h P6%,

now in the possession of $%S!" and $S. $ay Shipyad / .ydoc;in:, nc' be tansfeed to

4UST5!" thou:h P#"!I and 3 the shipbuildin: e>uip8ent thus tansfeed be inested by

4UST5!", actin: thou:h P#"! and #.!, as the :oen8entFs e>uity paticipation in a

shipbuildin: copoation to be established in patneship with the piate secto'


25/62

contol by Pesident Macos of $%S!" has been sufficiently shown'

"the eidence sub8itted to the !out by the Solicito &eneal poes that Pesident Macos not

only e


26/62

cetificates of stoc; ae in the possession of thid paties, a8on: who8 bein: the espondents

the8seles H H and petitione is still endeaoin: to secue copies theeof fo8 the8'D 102 "n the

sa8e day he filed anothe 8otion payin: that he be allowed Dto secue copies of the !etificates

of Stoc; in the na8e of Meto $ay .ydoc;, nc', and of all othe !etificates, of Stoc; of

petitioneFs stoc;holdes in possession of espondents'D 103

n a Manifestation dated "ctobe 10, 1*)@,, 10B the Solicito &eneal not uneasonably a:ued

that counselFs afoestated 8otion to secue copies of the stoc; cetificates Dconfi8s the fact that

stoc;holdes of petitione copoation ae not in possession of H H thei cetificates of stoc;,D and

the eason, accodin: to hi8, was Dthat *( of said shaes H H hae been endosed in blan; and

found in MalacaLan: afte the fo8e Pesident and his fa8ily fled the county'D To this

8anifestation $%S!"Fs counsel eplied on #oe8be (, 1*)@, as aleady 8entioned, Stubbonly

insistin: that the fi8Fs stoc;holdes had not eally assi:ned thei stoc;' 10(

n iew of the patiesF conflictin: declaations, this !out esoled on #oe8be 27, 1*)@ a8on:

othe thin:s Dto e>uie H H the petitione H H to deposit upon pope eceipt with !le; of !out

Juanito RanEo the oi:inals of the stoc; cetificates alle:ed to be in its possession o accessible to

it, 8entioned and descibed in %nne< FPF of its petition, and othe pleadin:s H H within ten 10

days fo8 notice'D 10@ n a 8otion filed on .ece8be (, 1*)@, 107 $%S!"Fs counsel 8ade the

state8ent, >uite supisin: in the pe8ises, that Dit will ne:otiate with the ownes of the $%S!"

stoc; in >uestion to allow petitione to boow fo8 the8, if aailable, the cetificates efeed toD

but that Dit needs a 8oe sufficient ti8e theefoD sic' $%S!"Fs counsel howee eentually

had to confess inability to poduce the oi:inals of the stoc; cetificates, puttin: up the feeble

euested the stoc;holdes to allow H H hi8 to boow said cetificates,H H so8e of H H the8 clai8ed that they had delieed the cetificates to thid paties by way of

pled:e andAo to secue pefo8ance of obli:ations, while othes alle:edly hae entusted the8 to

thid paties in iew of last national e8e:ency'D 10) +e has coneniently o8itted, no has he

offeed to :ie the details of the tansactions adeted to by hi8, o to e


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popeties and business se>uesteed and ta;en oe by the P!&& to pesons who ae Ddu88ies,D

no8inees o alte e:os of the fo8e pesident'

?o8 the standpoint of the P!&&, the facts heein stated at so8e len:th do indeed show that the

piate copoation ;nown as $%S!" was Downed o contolled by fo8e Pesident ?edinand' Macos H H duin: his ad8inistation, H H thou:h no8inees, by ta;in: adanta:e of H H his

public office andAo usin: H H his powes, authoity, influence H H,D and that #%SS!" and othe

popety of the :oen8ent had been ta;en oe by $%S!"I and the situation Eustified the

se>uestation as well as the poisional ta;eoe of the copoation in the public inteest, in

accodance with the te8s of uestation and ta;eoe by the P!&& as bein: in accod with the law,

and, in iew of what has thus fa been set out in this opinion, ponounces to be without 8eit the

theoy that said acts, and the euate e8edy

to i8pu:n, set aside o othewise obtain elief theefo8, o that the P!&& had acted as

posecuto and Eud:e at the sa8e ti8e'

22'


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with its powe to De>uie all pesons in the Philippines holdin: H H alle:ed DillC:ottenD assets o

popeties, whethe located in the Philippines o aboad, in thei na8es as no8inees, a:ents o

tustees, to 8a;e full disclosue of the sa8e H H'D The contention lac;s 8eit'

t is ele8entay that the i:ht a:ainst selfCinci8ination has no application to Euidical pesons'

Ghile an indiidual 8ay lawfully efuse to answe inci8inatin: >uestions unless potected by an

i88unity statute, it does not follow that a copoation, ested with special piile:es and

fanchises, 8ay efuse to show its hand when cha:ed with an abuse ofsuchpiile:es H H 113

Releant Euispudence is also cited by the Solicito &eneal' 11B

H H copoations ae not entitled to all of the constitutional potections which piate indiiduals

hae' H H They ae not at all within the piile:e a:ainst selfCinci8ination, althou:h this cout

8oe than once has said that the piile:e uns ey closely with the Bth %8end8entFs Seach and

Sei=ue poisions' t is also settled that an office of the co8pany cannot efuse to poduce its

ecods in its possession upon the plea that they will eithe inci8inate hi8 o 8ay inci8inate it'D

";laho8a Pess Publishin: !o' ' Gallin:, 327 U'S' 1)@I e8phasis, the Solicito &enealFs'

H H The copoation is a ceatue of the state' t is pesu8ed to be incopoated fo the benefit of

the public' t eceied cetain special piile:es and fanchises, and holds the8 subEect to the laws

of the state and the li8itations of its chate' ts powes ae li8ited by law' t can 8a;e no contact

not authoi=ed by its chate' ts i:hts to act as a copoation ae only peseed to it so lon: as it

obeys the laws of its ceation' Thee is a esee i:ht in the le:islatue to inesti:ate its contactsand find out whethe it has euestions unless potected by an i88unity statute, it does not follow that a copoation, ested

with special piile:es and fanchises 8ay efuse to show its hand when cha:ed with an abuse of

such piile:es' Gilson ' United States, (( 4aw d', 771, 7)0 Oe8phasis, the Solicito

&enealFs

%t any ate,


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The witness 8ay not efuse to co8ply with the ode on the basis of his piile:e a:ainst selfC

inci8inationI but no testi8ony o othe info8ation co8pelled unde the ode o any

info8ation diectly o indiectly deied fo8 such testi8ony, o othe info8ation 8ay be used

a:ainst the witness in any ci8inal case, euestion to which an answe can be

easily :ien, 8uch less one which will suffice fo eey conceiable situation'

a' P!&& May #ot uesteed, fo=en o poisionally ta;enoe, the P!&& is a conseato, not an owne' Theefoe, it can not pefo8 acts of stict

owneshipI and this is specially tue in the situations conte8plated by the se>uestation ules

whee, unli;e cases of eceieship, fo e


30/62

instu8entality of the :oen8ent' 11@ n the case of se>uesteed businesses :eneally i'e', :oin:

concens, businesses in cuent opeation, as in the case of se>uesteed obEects, its essential ole,

as aleady discussed, is that of conseato, caeta;e, Dwatchdo:D o oesee' t is not that of

8ana:e, o innoato, 8uch less an owne'

c' Powes oe $usiness ntepises Ta;en "e by Macos o ntities o Pesons !lose to hi8I

4i8itations Theeon

#ow, in the special instance of a business entepise shown by eidence to hae been Dta;en oe

by the :oen8ent of the Macos %d8inistation o by entities o pesons close to fo8e

Pesident Macos,D 117 the P!&& is :ien powe and authoity, as aleady adeted to, to

Dpoisionally ta;e it oe in the public inteest o to peent H H its disposal o dissipationID

and since the te8 is obiously e8ployed in efeence to :oin: concens, o business entepises in

opeation, so8ethin: 8oe than 8ee physical custody is connotedI the P!&& 8ay in this case

euesteed shaes of stoc;,D Dto ote such shaes of stoc; as it 8ay hae se>uesteed in

copoations at all stoc;holdesF 8eetin:s called fo the election of diectos, declaation of

diidends, a8end8ent of the %ticles of ncopoation, etc'D The Me8oandu8 should be

constued in such a 8anne as to be consistent with, and not contadictoy of the


31/62

because the i:ht euesteed constitute the contollin: o a

substantial pat of the copoate otin: powe' The stoc; is not to be oted to eplace diectos, o

eise the aticles o byClaws, o othewise bin: about substantial chan:es in policy, po:a8 o

pactice of the copoation euied'

2(' #o Sufficient Showin: of "the e:ulaities

%s to the othe ie:ulaities co8plained of by $%S!", i'e', the cancellation o eision, and the

euestion wee

done without o in e


32/62

-ap, ?enan, Paas, &ancayco and Sa8iento, JJ', concu'

Sepaate "pinions

T+%#, !J', concuin:9

fully concu with the 8astely opinion of M' Justice #aasa' n the pocess of disposin: of the

issues aised by petitione $%S!" in the case at ba, it co8pehensiely discusses the laws and

pinciples :oenin: the Pesidential !o88ission on &ood &oen8ent P!&& and defines the

scope and euote the pun:ent lan:ua:e of M' Justice !u=, DThee

is no >uestion that all lawful effots should be ta;en to ecoe the te8endous wealth plundeed

fo8 the people by the past e:i8e in the 8ost e


33/62

conseato and ad8inistato' n this conte


34/62

to:ethe with deeds of assi:n8ent of pactically all the outstandin: shaes of stoc; of the thee 3

copoations aboe 8entioned which hold *(')2 of all $%S!" stoc;, si:ned by the ownes

theeof althou:h not notai=edD 7 wee found in MalacaLan: shotly afte the deposed PesidentFs

sudden fli:ht fo8 the county on the ni:ht of ?ebuay 2(, 1*)@' Thus, the 8ain opinionFs

unaoidable conclusion that DGhile the petitioneFs counsel was >uic; to dispute this assetedfact, assuin: this !out that the $%S!" stoc;holdes wee still in possession of thei espectie

stoc; cetificates and had Fnee endosed H H H the8 in blan; o to anyone else,F that denial is

euent ecoded state8ents as a 8ee :estue of defiance attle

than a eifiable factual declaation ' ' ' ' Unde the cicu8stances, the !out can only conclude

that he could not :et the oi:inals fo8 the stoc;holdes fo the si8ple eason that as the Solicito

&eneal 8aintains, said stoc;holdes in tuth no lon:e hae the8 in thei possession, these hain:

aleady been assi:ned in blan; to Pesident Macos'D )

Gith this ston: unebutted eidence of ecod in this !out, Justice MelencioC+eea, Eoined by

Justice ?eliciano, euesteed stoc; in case of a

ta;eoe of business actually belon:in: to the :oen8ent o whose capitali=ation co8es fo8

public funds but which, so8ehow, landed in the hands of piate pesons, as in the case of

$%S!"'D They 8eely >ualify thei concuence with the inEunction that such ta;eoes be

euesteed shaes' Suffice it to say in this e:ad that each case has to be Eud:ed fo8 the

petinent facts and cicu8stances and that the 8ain opinion e8phasi=es sufficiently that it is only

in the special instances specified in the :oenin: laws :ounded on the supeio national inteest

and welfae and the pactical necessity of pesein: the popety and peentin: its loss odisposition that the poisional e8edy of poisional ta;eCoe is e


35/62

docu8entay eidence of ecod, which they 8ust li;ewise e


36/62

Supe8e 4aw'D 13 ?o this eason, it is coCeuestein: the pupoted illC:otten assets

and popeties and ta;in: oe stolen popeties of the :oen8ent channeled to du88y o font

co8panies is statin: the obious' The ecoey of these illC:otten assets and popeties would

:eatly aid ou financially cippled :oen8ent and hasten ou national econo8ic ecoey, not to

8ention the fact that they i:htfully belon: to the people' Ghile as a 8easue of selfCpotection, if,

in the inteest of :eneal welfae, police powe 8ay be e


37/62

seeal billion pesos' These lands ae now aailable fo lowCcost housin: poEects fo the benefit

of the poo and the dispossessed a8on:st ou people'

n the le:al custody of the !o88ission as a esult of se>uestation poceedin:s, ae euestation of popeties, deposits, and

secuities pobably woth 8any billions of pesos in #ew -o;, #ew Jesey, +awaii, !alifonia,

and 8oe i8potantlyCin Swit=eland' .ue to faoable deelop8ents in Swit=eland, we 8ay

e


38/62

usin: the ey sa8e stolen popeties and funds deied theefo8' f they wish to pusue thei

own e8pty clai8, they 8ust do it on thei own, afte fist establishin: that they indeed hae a

lawful i:ht andAo shaeholdin: in $%S!"'

Unde the 1*)7 !onstitution, the P!&& is called upon to file the Eudicial poceedin:s fofofeitue and ecoey of the se>uesteed o fo=en popeties coeed by its odes issued befoe

the atification of the !onstitution on ?ebuay 2, 1*)7, within si< 8onths fo8 such atification,

o by %u:ust 2, 1*)7' ?o those odes issued afte such atification, the Eudicial action o

poceedin: 8ust be co88enced within si< 8onths fo8 the issuance theeof' The P!&& has not

eally been :ien 8uch ti8e, considein: the 8a:nitude of its tas;s' t is entitled to so8e

fobeaance, in aailin: of the 8auestation,

fee=e and te8poay ta;eCoe enco8pass the fist type of acts' They do not include the second

type of acts which ae eseed only to the i:htful owne of the assets o business se>uesteed o

te8poaily ta;en oe'

The e8oal and election of 8e8bes of the boad of diectos of a copoate entepise is, to 8e,

a clea act of owneship on the pat of the shaeholdes of the copoation' Unde odinay

cicu8stances, would deny the P!&& the authoity to chan:e and elect the 8e8bes of$%S!"Fs $oad of .iectos' +owee, unde the facts as disclosed by the ecods, it appeas

that the cetificates of stoc; epesentin: about ninetyCfie *( pe cent of the total owneship

in $%S!"Fs capital stoc; wee found endosed in blan; in Malacanan: pesu8ably in the

possession and contol of M' Macos at the ti8e he and his fa8ily fled in ?ebuay 1*)@' This

cicu8stance let alone the euently, een ahead of Eudicial poceedin:s, a8 coninced that the Republic of the

Philippines, thou:h the P!&&, has the i:ht and een the duty to ta;eCoe full contol and

supeision of $%S!"'

M4#!"C+RRR%, J', concuin:9

would li;e to >ualify 8y concuence in so fa as the otin: of se>uesteed sto; is concened'

The otin: of se>uesteed stoc; is, to 8y 8ind, an euestation is in the natue of a Eudicial deposit ibid''


39/62

hae no obEection to accodin: the i:ht to ote se>uesteed stoc; in case of a ta;eCoe of

business actually belon:in: to the :oen8ent o whose capitali=ation co8es fo8 public funds

but which, so8ehow, landed in the hands of piate pesons, as in the case of $%S!"' To 8y

8ind, howee, caution and pudence should be euesteed shaes of anonC:oin: piate business entepise, specially the sensitie ones, since the tue and eal owneship

of said shaes is yet to be dete8ined and poen 8oe conclusiely by the !outs'

t would be 8oe in ;eepin: with le:al no8s if fofeitue poceedin:s poided fo unde

Republic %ct #o' 137* be filed in !out and the P!&& see; Eudicial appoint8ent as a eceie o

ad8inistato, in which case, it would be e8poweed to ote se>uesteed shaes unde its custody

Section ((, !opoation !ode' Theeby, the assets in liti:ation ae bou:ht within the !outFs

Euisdiction and the pesence of an i8patial Jud:e, as a e>uisite of due pocess, is assued' ?o,

een in its histoical conteuestation is a Eudicial 8atte that is best handled by the !outs'

conside it i8peatie that se>uestation 8easues be buttessed by Eudicial poceedin:s the

soonest possible in ode to settle the 8atte of owneship of se>uesteed shaes and to dete8ine

whethe o not they ae le:ally owned by the stoc;holdes of ecod o ae DillC:otten wealthD

subEect to fofeitue in fao of the State' Se>uestation alone, bein: actually an ancillay e8edy

to a pincipal action, should not be 8ade the basis fo the e


40/62

tests of due pocess and othe $ill of Ri:hts potections'

2 Se>uestation is intended to peent the destuction, conceal8ent, o dissipation of illC:otten

wealth' The obEect is conseation and peseation' %ny euesteed popety o to act as if its findin:s ae final'

B The P!&& does not own se>uesteed popety' t cannot and 8ust not euestation is only a peli8inay o ancillay e8edy' Thee 8ust be a pincipal and independent

suit filed in cout to establish the tue owneship of se>uesteed popeties' The factual pe8ise

that a se>uesteed popety was illC:otten by fo8e Pesident Macos, his fa8ily, elaties,

subodinates, and close associates cannot be assu8ed' The fact of owneship 8ust be established

in a pope suit befoe a cout of Eustice'

$ut what has the !out, in effect, uledQ

Pa:es 21 to 33 of the 8aEoity opinion ae dedicated to a state8ent of facts which conclusiely

and indubitably shows that $%S!" is owned by Pesident MacosCand that it was ac>uied and

astly enla:ed by the fo8e PesidentFs ta;in: undue adanta:e of his public office and usin: his

powes, authoity, o influence'

Thee has been no cout heain:, no tial, and no pesentation of eidence' %ll that we hae is

what the P!&& has :ien us' The petitione has not een been allowed to see the eidence, 8uch

less efute it'

Ghat the P!&& has :atheed in the couse of its sei=ues and inesti:ations 8ay be :ospel tuth'


41/62

+owee, that tuth 8ust be popely established in a tial cout, not unilateally dete8ined by the

P!&& o declaed by this !out in a special poceedin: which only as;s us to set aside o enEoin

an ille:al euesteed popety is illC:otten wealth and

poceeds to euestionable deal was bou:ht to ou

attention, the awadee alle:edly aised his bid to the leel of the bette offe' The successful bidde

late sub8itted a co88ent in inteention e


42/62

who instituted the instant petition' t then filed a 8otion to withdaw this ey sa8e petition we

ae now decidin:' n othe wods, the Dnew ownesD did not want the Supe8e !out to continue

po;in: into the le:ality of thei acts' They 8oed to abot the petition filed with us'

%ny suspicion of i8popiety would hae been aoided if the P!&& had filed the e>uied coutpoceedin:s and e


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Thee is no >uestion that all lawful effots should be ta;en to ecoe the te8endous wealth

plundeed fo8 the people by the past e:i8e in the 8ost euate and is aailable to the P!&&'The adanta:e of this e8edy is that, unli;e the ad libitu8 8easues now bein: ta;e it is

authoi=ed and at the sa8e ti8e also li8ited by the funda8ental law' see no eason why it should

not now be e8ployed by the P!&&, to e8oe all doubts e:adin: the le:ality of its acts and all

suspicions concenin: its 8oties'

Sepaate "pinions

T+%#, !J', concuin:9

fully concu with the 8astely opinion of M' Justice #aasa' n the pocess of disposin: of the

issues aised by petitione $%S!" in the case at ba, it co8pehensiely discusses the laws and

pinciples :oenin: the Pesidential !o88ission on &ood &oen8ent P!&& and defines the

scope and e


44/62

diectly o thou:h no8inees, by ta;in: undue adanta:e of thei public office andAo usin: thei

powes, authoity, influence, connections o elationship'D 1

The !out is unani8ous insofa as the Eud:8ent at ba upholds the i8peatie need of ecoein:

the illC:otten popeties a8assed by the peious e:i8e, which Ddesees the fullest suppot of theEudiciay and all sectos of society'D 2 To >uote the pun:ent lan:ua:e of M' Justice !u=, DThee

is no >uestion that all lawful effots should be ta;en to ecoe the te8endous wealth plundeed

fo8 the people by the past e:i8e in the 8ost e


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chai8an, Joito Salon:a, in his state8ent befoe the 1*)@ !onstitutional !o88ission, DM' "ple

once called Fo:ani=ed pilla:eF DC:obbled up the :oen8ent copoation #ational Shipyad /

Steel !opoation #%SS!" its shipyad at Maieles, 300 hectaes of land in Maieles fo8 the

uip8ent

and facilities includin: stuctues, buildin:s, shops, >uates, houses, plants and eualify thei concuence with the inEunction that such ta;eoes bee


46/62

of the se>uesteed shaes' Suffice it to say in this e:ad that each case has to be Eud:ed fo8 the

petinent facts and cicu8stances and that the 8ain opinion e8phasi=es sufficiently that it is only

in the special instances specified in the :oenin: laws :ounded on the supeio national inteest

and welfae and the pactical necessity of pesein: the popety and peentin: its loss o

disposition that the poisional e8edy of poisional ta;eCoe is e


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Thus, the 8ain opinion coectly concludes that Dn the li:ht of the affi8atie showin: by the

&oen8ent that, pi8a facie at least, the stoc;holdes and diectos of $%S!" as of %pil, 1*)@

wee 8ee Fdu88ies,F no8inees o alte e:os of Pesident MacosI at any ate, that they ae no

lon:e ownes of any shaes of stoc; in the copoation, the conclusion cannot be aoided that saidstoc;holdes and diectos hae no basis and no standin: whatee to cause the filin: and

posecution of the instant poceedin:I and to :ant elief to $%S!", as payed fo in the petition,

would in effect be to estoe the assets, popeties and business se>uesteed and ta;en oe by the

P!&& to pesons who ae Fdu88iesF no8inees o alte e:os of the fo8e Pesident'D *

%nd Justice Padilla in his sepaate concuence Dcalled a spade a spade,D citin: the steet

cetificates epesentin: *( of $%S!"Fs outstandin: stoc; found in MalacaLan: afte M'

MacosF hasty fli:ht in ?ebuay, 1*)@ and the e


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t should be 8entioned that the tac;in: down of the deposed PesidentFs actual owneship of the

$%S!" shaes was fotuitously facilitated by the ecoey of the steet cetificates in

MalacaLan: afte his hasty fli:ht fo8 the county last yea' This is not :eneally the case'

?o e


49/62

outside thei teitoial boundaiesCthe Pesidential !o88ission on &ood &oen8ent, which has

undeta;en the difficult and than;less tas; of tyin: to undo what had been done so secetly and

effectiely in the last twenty yeas, shall hae 8oe than Eustified its euestion

the :oen8entFs i:ht to ecoe the ey popeties and assets that hae been stolen fo8 it byusin: the ey sa8e stolen popeties and funds deied theefo8' f they wish to pusue thei

own e8pty clai8, they 8ust do it on thei own, afte fist establishin: that they indeed hae a

lawful i:ht andAo shaeholdin: in $%S!"'

Unde the 1*)7 !onstitution, the P!&& is called upon to file the Eudicial poceedin:s fo

fofeitue and ecoey of the se>uesteed o fo=en popeties coeed by its odes issued befoe

the atification of the !onstitution on ?ebuay 2, 1*)7, within si< 8onths fo8 such atification,

o by %u:ust 2, 1*)7' ?o those odes issued afte such atification, the Eudicial action o

poceedin: 8ust be co88enced within si< 8onths fo8 the issuance theeof' The P!&& has not

eally been :ien 8uch ti8e, considein: the 8a:nitude of its tas;s' t is entitled to so8e

fobeaance, in aailin: of the 8auestation,

fee=e and te8poay ta;eCoe enco8pass the fist type of acts' They do not include the second

type of acts which ae eseed only to the i:htful owne of the assets o business se>uesteed ote8poaily ta;en oe'


50/62

The e8oal and election of 8e8bes of the boad of diectos of a copoate entepise is, to 8e,

a clea act of owneship on the pat of the shaeholdes of the copoation' Unde odinay

cicu8stances, would deny the P!&& the authoity to chan:e and elect the 8e8bes of

$%S!"Fs $oad of .iectos' +owee, unde the facts as disclosed by the ecods, it appeasthat the cetificates of stoc; epesentin: about ninetyCfie *( pe cent of the total owneship

in $%S!"Fs capital stoc; wee found endosed in blan; in Malacanan: pesu8ably in the

possession and contol of M' Macos at the ti8e he and his fa8ily fled in ?ebuay 1*)@' This

cicu8stance let alone the euently, een ahead of Eudicial poceedin:s, a8 coninced that the Republic of the

Philippines, thou:h the P!&&, has the i:ht and een the duty to ta;eCoe full contol and

supeision of $%S!"'

M4#!"C+RRR%, J', concuin:9

would li;e to >ualify 8y concuence in so fa as the otin: of se>uesteed sto; is concened'

The otin: of se>uesteed stoc; is, to 8y 8ind, an euestation is in the natue of a Eudicial deposit ibid''

hae no obEection to accodin: the i:ht to ote se>uesteed stoc; in case of a ta;eCoe of

business actually belon:in: to the :oen8ent o whose capitali=ation co8es fo8 public funds

but which, so8ehow, landed in the hands of piate pesons, as in the case of $%S!"' To 8y

8ind, howee, caution and pudence should be euesteed shaes of an

onC:oin: piate business entepise, specially the sensitie ones, since the tue and eal owneship

of said shaes is yet to be dete8ined and poen 8oe conclusiely by the !outs'

t would be 8oe in ;eepin: with le:al no8s if fofeitue poceedin:s poided fo unde

Republic %ct #o' 137* be filed in !out and the P!&& see; Eudicial appoint8ent as a eceie o

ad8inistato, in which case, it would be e8poweed to ote se>uesteed shaes unde its custody

Section ((, !opoation !ode' Theeby, the assets in liti:ation ae bou:ht within the !outFs

Euisdiction and the pesence of an i8patial Jud:e, as a e>uisite of due pocess, is assued' ?o,

een in its histoical conteuestation is a Eudicial 8atte that is best handled by the !outs'

conside it i8peatie that se>uestation 8easues be buttessed by Eudicial poceedin:s the

soonest possible in ode to settle the 8atte of owneship of se>uesteed shaes and to dete8ine

whethe o not they ae le:ally owned by the stoc;holdes of ecod o ae DillC:otten wealthD

subEect to fofeitue in fao of the State' Se>uestation alone, bein: actually an ancillay e8edyto a pincipal action, should not be 8ade the basis fo the e


51/62

indefinite peiod of ti8e'

Se>uestation is an e


52/62

dissent' en as the !out e8phasi=es pinciples of due pocess and fai play, it has unfotunately

alidated ulta ies acts iolatie of those ey sa8e pinciples' Ghile we stess the ules which

8ust :oen the P!&& in the euestation :ien by law to the P!&&'

Ge ae all a:eed in the !out that the P!&& is not a Eud:e' t is an inesti:ato and posecuto'

Se>uestation is only a peli8inay o ancillay e8edy' Thee 8ust be a pincipal and independent

suit filed in cout to establish the tue owneship of se>uesteed popeties' The factual pe8ise

that a se>uesteed popety was illC:otten by fo8e Pesident Macos, his fa8ily, elaties,

subodinates, and close associates cannot be assu8ed' The fact of owneship 8ust be established

in a pope suit befoe a cout of Eustice'

$ut what has the !out, in effect, uledQ

Pa:es 21 to 33 of the 8aEoity opinion ae dedicated to a state8ent of facts which conclusiely

and indubitably shows that $%S!" is owned by Pesident MacosCand that it was ac>uied and

astly enla:ed by the fo8e PesidentFs ta;in: undue adanta:e of his public office and usin: his

powes, authoity, o influence'

Thee has been no cout heain:, no tial, and no pesentation of eidence' %ll that we hae is

what the P!&& has :ien us' The petitione has not een been allowed to see the eidence, 8uch

less efute it'

Ghat the P!&& has :atheed in the couse of its sei=ues and inesti:ations 8ay be :ospel tuth'+owee, that tuth 8ust be popely established in a tial cout, not unilateally dete8ined by the

P!&& o declaed by this !out in a special poceedin: which only as;s us to set aside o enEoin

an ille:al euesteed popety is illC:otten wealth and

poceeds to e


53/62

of secuity :uads, disposin: of scap, entein: into new contacts and othewise behain: as if it

wee aleady the owne' %t this late date and with all the eidence P!&& clai8s to hae, no cout

case has been filed'

%8on: the inteestin: ite8s elicited duin: the oal a:u8ents o found in the ecods of thispetition ae9

1 Upon se>uestein: $%S!", so8e P!&& pesonnel lost no ti8e in di::in: up paed

pe8ises with Eac; ha88es in a fantic seach fo buied :old bas'

2 Two top P!&& oluntees cha:ed each othe with stealin: popeties unde thei custody'

The P!&& had to step in, dis8iss the ein: epesentaties, and eplace the8 with new ones'

3 The petitione clai8s that the lowe bid of a oc; >uay opeato was accepted een as a

hi:he and 8oe faoable bid was offeed' Ghen the >uestionable deal was bou:ht to ou

attention, the awadee alle:edly aised his bid to the leel of the bette offe' The successful bidde

late sub8itted a co88ent in inteention euied cout

poceedin:s and e


54/62

a se>uesteed copoation, decease the capital stoc;, o sell substantially all copoate assets

without any effectie chec; fo8 the ownes not yet diested of thei titles o fo8 a cout of

Eustice' The P!&& is tas;ed to pesee assets but when it euestion that all lawful effots should be ta;en to ecoe the te8endous wealth

plundeed fo8 the people by the past e:i8e in the 8ost e


55/62

ad8inistato whose authoity is li8ited to peentin: the se>uesteed popeties fo8 bein:

dissipated o clandestinely tansfeed'

The cout action pescibed in the !onstitution is not inade>uate and is aailable to the P!&&'

The adanta:e of this e8edy is that, unli;e the ad libitu8 8easues now bein: ta;e it isauthoi=ed and at the sa8e ti8e also li8ited by the funda8ental law' see no eason why it should

not now be e8ployed by the P!&&, to e8oe all doubts e:adin: the le:ality of its acts and all

suspicions concenin: its 8oties'

?ootnotes

1 %nne< %, petition, ollo, p' 2@'

2 %nne< $, petition, ollo, p' 27'

3 %nne< !, petition, ollo p' 2)'

B %nne< .C% petition, ollo p' 3)'

( %nne< , petition, ollo p' 3*'

@ %nne< ?, petition, ollo p' B1'

7 %nne< &, petition, ollo, p' B2I %nne< &C1, Suppl' Pleadin:, ollo, pp' 1(0 et se>'

) %nne


56/62

1) d', p' )'

1* d', p' *'

20 d', pp' @03C@0('

21 d', p' )I %nne< , petition'

22 d', p' *'

23 Po8ul:ated on Mach 2(, 1*)@'

2B %RT' , Sec' 1, dI e8phasis supplied'

2( Gheeas !lauses Pea8ble'

2@ Sec' 1'

27 Sec' 2, aI e8phasis supplied'

2) Sec' 3, Ob, Oc, and OdI e8phasis supplied'

2* Sec' 3, Oa, Oe, Of'

30 Sec' 3, Oh'

31 ?ist two Gheeas !lausesI e8phasis supplied'

32 8phasis supplied'

33 ffectie May 7, 1*)@'

3B Sec 1I e8phasis supplied'

3( Sec' 1I e8phasis supplied'

3@ Sec' 3'

37 Sec' 1, Od, %RT' , Poisional !onstitution, Pocla8ation #o' 3'

3) Sec' 2, Oa,


57/62

B0 Second Gheeas !lause,


58/62

(1 %RT' K5'

(2 8phasis supplied'

(3 $%S!"Fs counsel a:ees Rollo, p' @*0'

(B Rule (7, Rules of !out'

(( Rule (*, Rules of !out'

(@ !'%' #o' B@@I !hap' , Title K, #ational ntenal Reenue !ode of 1*77I ollo, pp' 1*7C1*)'

(7 Rollo, p' @*2'

() Secs' 3 and B, Rule (7I Sec' 3, Rule (*I Secs' 1C3, Rule @0, Rules of !outI see, e':', ?ilinest

!edit !op' ' Reloa, 117 S!R% B209 see, too, 7* !'J'S', 10B7 to the followin: effect' DThe

conseatoy wit of se>uestation has been held to be a pocess of the 8ost e


59/62

@) ?eund, The Police Powe !hica:o, 1*0B, cited by !u=, '%', !onstitutional 4awI Bth ed',

p' B2'

@* S8ith, $ell / !o' ' #atiidad, B0 Phil' 13@, citin: U'S' ' Toibio, 1( Phil' )(I !huchill andTait ' Raffety, 32 Phil' ()0, and Rubi ' Poincial $oad of Mindoo, 3* Phil' @@0'

70 Rubi ' Poincial $oad, supa'

71


60/62

)) d', pp' 71C72'

)* See pa' 20, infa'

*0 8phasis suppliedI see pa' 17, D4oans "btained,D supa'

*1 8phasis supplied'

*2 Rollo, p' )1'

*3 %nne< @ of Solicito &enealFs Manifestation, etc', dtd' Sept' 2B, 1*)@, supa'

*B Rollo, pp' 1*2, @))'

*( d', pp' 1*0C1*2'

*@ %nne< P, petition, supa'

*7 !o88ent and Me8oandu8 in a8plification of oal a:u8ents filed by the Solicito

&eneal on "ctobe 1(, 1*)@ ollo, pp' 17) et se>I Resolution, "ct' 2), 1*)@ ollo, p' @11C%'

*) %nne


61/62

110 %t' 5, Sec' 1 12, 1*73 !onstitution'

111 Peo' ' ?ee, B) S!R% 3)2, 3*(C3*@, citin: !u88in:s ' U'S', B Gall' 71 U'S' 277

1)@7, accod, < pate &aland, B Gall' 71 U'S' 333 1)@7, it bein: obseed that thisdefinition Dwas adopted by this !out in People s' !alos, 7) Phil' (3(, (BB 1*B7 and in People

s' Montene:o, *1 Phil' ))3, ))( 1*(2'D

112 d', at pp, 3*@C3*7, citin: de 5eau ' $aisted, 3@3 U'S' 1BB, 1@0 1*@0I United States '

4oett, 32) U'S' 303, 31( 1*B@'

113 Matin, 4aw / Juispudence on the ?eedo8 !onstitution of the Philippines, 1*)@ ed', p'

310, citin: +al ' +en;el, 201 U'S' B3'

11B Rollo, pp' 21(C217'

11( See Sec' 7, Rule (*, Rules of !out'

11@ Sec' 3, d, f, :, '

T+%#, !'J', concuin:9

1


62/62

) de8'

* Main opinion, pa' 21'

10 !hief Justice Taney, cited in Mofe s' Mutuc, 22 S!R% B2B 1*@)'

11 %nnotation, 3( S!R% (00, citin: Pi8icias s' ?u:oso, )0 Phil' 71I :nacio s' las, (( "'&'

21@2'

12 !huchill s' Raffety, 32 Phil' ()0, citin: ) !yc', )@3'

13 %nnotation, 3( S!R% (00, at p' (01, citin: !o;e 13*'

1B 5ol' 1@ %MJUR 2d, !onstitutional 4aw, Sec' 370'

1( $R#%S Pi8e on the 1*73 !onstitution, p' 32, 1*)3 ed'

1@ !huchill s' Raffety, 32 Phil' ()0, citin: #oble State $an; s' +as;ell 21* US O1*11

(7('

17 5ol' 1@ %MJUR 2d, !onstitutional 4aw, Sec' B20'

1) 5ol' 1@ %MJUR 2d, !onstitutional 4aw, Sec' 370'

1* Joito R' Salon:a9 DThe Pactical and 4e:al %spects of the Recoey of llC:otten Gealth,D

&e:oio %aneta Me8oial 4ectue delieed on %u:ust 2(, 1*)@ at the %teneo 4aw School'

20 de8'

The 4awphil PoEect C %ellano 4aw ?oundation

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