Full Text_Doctrine of Separate Legal Personality_cases No. 13-15

7/25/2019 Full Text_Doctrine of Separate Legal Personality_cases No. 13-15

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FIRST DIVISION

[G.R. No. 106244. January 22, 1997]

REPUBLIC OF !E P!ILIPPINE", petitioner, vs. !ONOR#BLE"#N$IG#NB#%#N, &ICOR #FRIC#, LOUR$E" #FRIC#,N#!#LIE #FRIC#, JO"E ENRI'UE #FRIC#, P#UL $ELFIN#FRIC#, RO"#RIO #RELL#NO, R#C'UEL $INGL#"#N,&ICORI# N. LEG#R$#, #NGEL# N. LOBREG#, (#NUEL &.NIEO, BENIO NIEO, (#. RI# N. $E LO" RE%E", E&EL%NRO(ERO, RO"#RIO "ONGCO, C#R(EN N. U#)ON an*

R#F#EL &. L$E), respondents.

$ E C I " I O N+

BELLO"ILLO, J.

GOVERNMENT calls upon us to issue a writ of certiorarideclaring null and void the! Nove"#er $%%$ and & Ma' $%% Resolutions of respondent Sandigan#a'an whichgranted the Motion for Declaration of Non-Sequestration or Invalidity of Sequestrationover the shares of stoc( of private respondents Messrs) Victor *frica+ et al)+ in EasternTeleco""unications ,hilippines+ Inc) -ET,I.+ and which su#se/uentl' deniedreconsideration thereof there#' lifting the writ of se/uestration over the su#0ect shares)

These facts are not disputed1 On 2ul' $%34 the Repu#lic of the ,hilippinesthrough the ,residential 5o""ission on Good Govern"ent -,5GG. and the Office ofthe Solicitor General filed #efore respondent Sandigan#a'an a co"plaint forreconve'ance+ reversion+ accounting+ restitution and da"ages against Messrs) 2ose 6)

*frica+ Manuel 7) Nieto+ 2r)+ Ferdinand E) Marcos+ I"elda R) Marcos+ Ferdinand R)Marcos+ 2r)+ Ro#erto S) 8enedicto+ 2uan ,once Enrile and ,otenciano Ilusorio #eforethe Sandigan#a'an) The co"plaint+ doc(eted as 5ivil 5ase No) &&&%+ alleged thatdefendants illegall' "anipulated+ under the guise of e9panding the operations of,hilippine 5o""unications Satellite 5orporation -,7I65OMS*T.+ the purchase of"a0or shareholdings of 5a#le and :ireless 6i"ited+ a 6ondon;#ased

teleco""unications co"pan'+ in ET,I which shareholdings defendants Ro#erto S)8enedicto+ 2ose 6) *frica and Manuel 7) Nieto 2r)+ #' the"selves and throughcorporations organi


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*ngela N) 6o#regat+ Manuel V) Nieto+ Ra"on Nieto+ 8enito Nieto+ 5arlos Nieto+ Ma) RitaN) Delos Re'es+ Evel'n Ro"ero+ Rosario Songco+ 5ar"en N) Tua


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In the instant case+ private respondents have in the past 'ears #een deprived oftheir dividends which have now accrued and accu"ulated+ without affording the" anopportunit' to protect and defend their interests) Their shares of stoc( in ET,I have#een challenged #' the Govern"ent without the latter instituting an action to recover thesa"e+ and onl' on the "ere allegation in a collateral proceeding+ #elatedl' "ade+ that

the' are also part of ill;gotten wealth) The Govern"ent is thus see(ing to recover theshares of stoc( of private respondents through an action where the na"ed defendantsare different fro" private respondents herein)

The procedure is highl' irregular and seriousl' flawed) If the Govern"ent is reall'interested in clai"ing the shares of stoc( of private respondents the proper procedure isto i"plead the" in a co"plaint for the recover' of those shares) =nfortunatel'+ it hasallowed the period to lapse without i"pleading the") If the defendants in 5ivil 5ase No)&&&%+ who have #een particularl' identified as having "anipulated the transfer of sharesof stoc( in ET,I to their na"es allegedl' under unconsciona#le ter"s and conditions+were i"pleaded to #e a#le to defend the"selves and their interests+ with "ore reasonshould private respondents herein+ who have not even #een shown to have participated

in the illicit transactions+ #e i"pleaded and given a chance to #e heard) For+ thesanctified principle that no person shall #e deprived of life+ li#ert' or propert' withoutdue process of law re/uires that at the outset a person should first #e na"ed andincluded in a suit #efore his ver' e9istence is disregarded and his freedo" and propert'ta(en awa' fro" hi") *ctions "ust #e #rought against the persons who are to #e #ound#' the 0udg"ent o#tained therein)v

:e are not unaware of the various ,5GG se/uestration cases decided #' this5ourt on > 2anuar' $%% where it was held that Bcorporations or #usiness enterprisesalleged to #e repositories of Aill;gottenA wealth -need not. #e actuall' and for"all'i"pleaded in the actions for the recover' thereof+ in order to "aintain in effect e9isting

se/uestration thereof)B

vi

8ut those cases should #e distinguished fro" the instant case)In those $ cases the co"panies as well as properties which for"er ,resident and Mrs)Ferdinand Marcos+ their relatives+ friends and #usiness associates allegedl' used asdepositaries or as instru"ents to illegall' a"ass wealth+ or which supposedl'constituted fruits of ill;gotten wealth+ were se/uestered) 5o"plaints were thereafter filed#' the ,5GG against individual persons #elieved to #e the owners or holders of theshares of stoc( of the aforesaid co"panies) The co"panies were not the"selvesi"pleaded as defendants #ut "erel' enu"erated in lists anne9ed to the co"plaintsagainst the na"ed individuals)

The defendants therein #an(ed on the o"issions and sought the lifting of the ordersof se/uestration on the ground that no proper 0udicial action had #een filed within the

ti"e and in the "anner re/uired #' the 5onstitution against the corporations with whichthe' were associated) The' argued that upon the e9piration of the regle"entar' periodthe se/uestration of the corporations should #e dee"ed auto"aticall' lifted) =nder thefacts especiall' attendant in those cases we said it should not #e so) There we held thatthe 5onstitution did not descri#e nor specif' the (ind and character of the 0udicial actionor proceeding to #e instituted #ut onl' re/uired that the action or proceeding involvedthe "atter of se/uestration+ free


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se/uestered+ fro


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e"#e


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the rule of law+ the "ini"u" re/uire"ent is to i"plead the registered owners of thoseshares in a for"al co"plaint to recover the")

In the sa"e se/uestration cases+ we also ruled that for lac( of proof+ even of thespecieprima facie+ the writ of se/uestration should #e lifted

This 5ourt is not un"indful of the fact that its Resolution of 2ul' !+ $%%$+ on thepetitionerAs "otion for reconsideration in G)R) No) %4 -,5GG v) Interco. appears tosustain the proposition that actual i"pleading in the recover' action of a corporationunder se/uestration for #eing a repositor' of illegall';ac/uired wealth+ is necessar' andre/uisite for such proposed or pending sei+ descri#ing the" as a"ong the properties illegall'ac/uired #' Ro"ualde 2anuar' $%%thuswise

The reason for the correctness of the -Interco. e9ception is o#viousl' the doctrineof Bpiercing the veil of corporate fiction)B Stated si"pl'+ this doctrine states that in anaction against a person+ whether natural or a corporation+ that wholl' owns or controlsanother corporation and uses this wholl' owned or controlled corporation to evade hisor its o#ligation or lia#ilit' 9 9 9 9 to hide the ill;gotten wealth of an' or all of the persons

i"pleaded therein+ a 0udg"ent against an' or all of the i"pleaded defendants "a' #eenforced against an' or all of the said corporations even if these corporations have not#een for"all' i"pleaded as defendants in the case)

8ut even if we disregard the corporate fiction of ET,I+ still private respondentscannot #e divested of their shares of stoc( unless in a proper foru" the' have #eenshown to have co""itted so"e wrongdoing in ac/uiring the") * corporation is acollection of individuals and the idea of its #eing a legal entit' apart fro" its "e"#ers isa "ere fiction of+ law introduced for convenience in conducting #usiness) :hen this


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fiction is used to 0ustif' wrong+ protect fraud+ or defend cri"e+ the law will disregard thee9istence of the corporation as a distinct legal entit' and view the latter "erel' as anassociation of persons) *ccordingl'+ the e/uita#le owners of the corporation shall #epersonall' lia#le and the acts of the real parties will #e dealt with as though nocorporation had #een for"ed) In the instant case+ onl' the na"ed defendants in 5ivil

5ase No) &&&% are #eing accused of wrongdoing in ac/uiring their shares of stoc( inET,I) Thus onl' their identified shares of stoc( in ET,I should #e su#0ect to the clai"sof the Govern"ent)

On the other hand+ private respondents who were not charged nor i"pleaded asdefendants are innocent until found guilt' #' a court of co"petent 0urisdiction) The'should #e spared until found lia#le) 5onse/uentl'+ even if the corporate veil of ET,I ispierced+ the' can never #e divested of their shares of stoc( until shown to haveengaged in illicit activities in ac/uiring those shares) *t the ver' least+ the' have to #ei"pleaded in a co"plaint for recover' thereof) For+ how can their shares of stoc( #econsidered ill;gotten and conse/uentl' the writ of se/uestration of the said sharesupheld when not a single case has #een filed against private respondents for the

purposeC 7ow can the supposed prima facie case deter"ined #' the ,5GG to #ee9isting #e su#stantiatedC To den' the" their right to such shares on the "uch #elatedallegation and "erel' on the #asis thereof that the' fronted for for"er ,resident andMrs) Ferdinand Marcos and their cronies would si"pl' #e to undul' perpetuate theassault on the rudi"entar' rules of fair pla')

In Repu#lic v) Sandigan#a'an9iwe said that BwHe need onl' to recall at this 0uncturethat+ as in AINTER5O+A evidence of the ,5GG is nil to even co"e up with a prima faciecase against SI,*6* -and *66IED.) This si"ilitude is the decisive factor that draws theinstant case awa' fro" the BFinal DispositionsB "ade #' this 5ourt in the $%% Repu#licv) Sandigan#a'an case+ thus "a(ing INTER5O+ as supported #' the *etna and Seno

cases+ the controlling precedent)B

9ii

In the case at hand+ how can the ,5GG esta#lish itssupposedprima faciefinding against private respondents when it has not even filed acase against the"C

The Concurring pinion with !ualificationsof M"e) 2ustice Melencio;7errera in8ataan Ship'ard J Engineering 5o)+ Inc) v) ,residential 5o""ission an GoodGovern"ent9iiicannot escape our thoughts

I consider it i"perative that se/uestration "easures #e #uttressed #' 0udicialproceedings the soonest possi#le in order to settle the "atter of ownership ofse/uestered shares and to deter"ine whether or not the' are legall' owned #' thestoc(holders of record or are Bill;gotten wealthB su#0ect to forfeiture in favor of theState) Se/uestration alone+ #eing actuall' an ancillar' re"ed' to a principal action+

should not #e "ade the #asis for the e9ercise of acts of do"inion for an indefiniteperiod of ti"e)

Se/uestration is an e9traordinar'+ harsh+ and even severe re"ed') It should #econfined to its lawful para"eters and e9ercised+ with due regard+ in the words of itsena#ling laws+ to the re/uire"ents of fairness+ due process+ and 2ustice)

*lso worth "entioning is the Dissent in those oft;repeated ,5GG se/uestrationcases where in strong and elo/uent language it was said


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:hile govern"ent efforts to recover illegall' a"assed wealth should have thesupport fro" all its #ranches+ eagerness and


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i

ii

iii

SE5OND DIVISION

[G. R. No. 997. (ar/ ,1997]

R#$ER" RO%#L B#N,petitioner, vs. COUR OF #PPE#L", FILRIER"GU#R#N% #""UR#NCE CORPOR#ION an* CEN#L B#N o 3P!ILIPPINE", respondents.


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$ E C I " I O N

ORRE", JR., J.

*ssailed in this ,etition for Review on Certiorariis the Decision of the respondent 5ourt of*ppeals dated 2anuar' %+ $%%&+ affir"ing the nullit' of the transfer of 5entral 8an(

5ertificate of Inde#tedness -585I. No) D3%$+ with a face value of ,&&+&&&+ fro" the,hilippine =nderwriters Finance 5orporation -,hilfinance. to the petitioner Traders Ro'al8an( -TR8.+ under a Repurchase *gree"ent dated Fe#ruar' ?+ $%3$+ and a Detached

*ssign"ent dated *pril 4+ $%3$)

Doc(eted as 5ivil 5ase No) 3>;$4%!! in the Regional Trial 5ourt of Manila+ 8ranch >+the action was originall' filed as a ,etition for Mandamusunder Rule ! of the Rules of 5ourt+to co"pel the 5entral 8an( of the ,hilippines to register the transfer of the su#0ect 585I topetitioner Traders Ro'al 8an( -TR8.)

In the said petition+ TR8 stated that1

>) On Nove"#er 4+ $%4%+ Filriters Guarant' *ssurance 5orporation -Filriters. e9ecuteda Detached *ssign"ent 999+ where#' Filriters+ as registered owner+ sold+ transferred+assigned and delivered unto ,hilippine =nderwriters Finance 5orporation -,hilfinance. all itsrights and title to 5entral 8an( 5ertificates of Inde#tedness -585I. Nos) D3%& to D3%!+inclusive+ each in the deno"ination of ,ESOS1 FIVE 7=NDRED T7O=S*ND -,&&+&&&.and having an aggregate value of ,ESOS1 T7REE MI66ION FIVE 7=NDRED T7O=S*ND

-,>+&&+&&&)&&.

?) The aforesaid Detached *ssign"ent -*nne9 *. contains an e9press authori!$)$$. on *pril 4+ $%3$

4) ,hilFinance failed to repurchase the 585I on the agreed date of "aturit'+ *pril 4+$%3$+ when the chec(s it issued in favor of petitioner were dishonored for insufficient funds

3) Owing to the default of ,hilFinance+ it e9ecuted a Detached *ssign"ent in favor of the,etitioner to ena#le the latter to have its title co"pleted and registered in the #oo(s of therespondent) *nd #' "eans of said Detach"ent *ssign"ent+ ,hilfinance transferred andassigned all its rights and title in the said 585I -*nne9 5. to petitioner and+ further"ore+ it didthere#' irrevoca#l' authori


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%) ,etitioner presented the 585I -*nne9 5.+ together with the two -. afore"entionedDetached *ssign"ents -*nne9es 8 and D.+ to the Securities Servicing Depart"ent of therespondent+ and re/uested the latter to effect the transfer of the 585I on its #oo(s and toissue a new certificate in the na"e of petitioner as a#solute owner thereof

$&) Respondent failed and refused to register the transfer as re/uested+ and continues todo so notwithstanding petitioners valid and 0ust title over the sa"e and despite repeated

de"ands in writing+ the latest of which is hereto attached as *nne9 E and "ade an integralpart hereof

$$) The e9press provisions governing the transfer of the 585I were su#stantiall'co"plied with in petitioners re/uest for registration+ to wit1

No transfer thereof shall #e valid unless "ade at said office -where the5ertificate has #een registered. #' the registered owner hereof+ in person or #' hisattorne' dul' authori


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policies+ e9ecuted si"ilar detached assign"ent for"s transferring the 585I to plaintiff

999

$) The detached assign"ent is patentl' void and inoperative #ecause the assign"ent iswithout the (nowledge and consent of directors of Filriters+ and not dul' authori of 58 5ircular No) 4!%

$!) The assign"ent of the 585I to ,hilfinance is a personal act of *lfredo 8anaria andnot the corporate act of Filriters and as such null and void

a. The assign"ent was e9ecuted without consideration and for that reason+ theassign"ent is void fro" the #eginning -*rticle $?&%+ 5ivil 5ode.

#. The assign"ent was e9ecuted without an' (nowledge and consent of the #oard ofdirectors of Filriters

c. The 585I constitutes reserve invest"ent of Filriters against lia#ilities+ which is are/uire"ent under the Insurance 5ode for its e9istence as an insurance co"pan' and thepursuit of its #usiness operations) The assign"ent of the 585I is illegal act+ in the sense of

malum in se or malum prohi#itum+ for an'one to "a(e+ either as corporate or personal act

d. The transfer or di"inution of reserve invest"ents of Filriters is e9pressl' prohi#ited #'law+ is i""oral and against pu#lic polic'

e. The assign"ent of the 585I has resulted in the capital i"pair"ent and in the solvenc'deficienc' of Filriters -and has in fact helped in placing Filriters under conservatorship.+ aninevita#le result (nown to the officer who e9ecuted the detached assign"ent)

$4) ,laintiff had acted in #ad faith and with (nowledge of the illegalit' and invalidit' of theassign"ent

a. The 585I No) 3%$ is not a negotia#le instru"ent and as a certificate of inde#tednessis not pa'a#le to #earer #ut is registered in the na"e of Filriters

#. The provision on transfer of the 585Is+ provides that the 5entral 8an( shall treat theregistered owner as the a#solute owner and that the value of the registered certificates shall#e pa'a#le onl' to the registered owner a sufficient notice to plaintiff that the assign"ents donot give the" the registered owners right as a#solute owner of the 585Is

c. 58 5ircular 4!%+ Series of $%3& -Rules and Regulations Governing 585Is. providesthat registered certificates are pa'a#le onl' to the registered owner -*rticle II+ Section $.)

$3) ,laintiff (new full well that the assign"ent #' ,hilfinance of 585I No) 3%$ #' Filritersis not a regular transaction "ade in the usual or ordinar' course of #usiness

a. The 585I constitutes part of the reserve invest"ents of Filriters against lia#ilitiesre/uired #' the Insurance 5ode and its assign"ent or transfer is e9pressl' prohi#ited #' law)There was no atte"pt to get an' clearance or authori


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found the assign"ent of 585I No) D3%$ in favor of ,hilfinance+ and the su#se/uentassign"ent of the sa"e 585I #' ,hilfinance in favor of Traders Ro'al 8an( null and void andof no force and effect) The dispositive portion of the decision reads1

*55ORDING6+ 0udg"ent is here#' rendered in favor of the respondent FilritersGuarant' *ssurance 5orporation and against the plaintiff Traders Ro'al 8an(1

-a. Declaring the assign"ent of 585I No) 3%$ in favor of ,hilFinance+ and thesu#se/uent assign"ent of 585I #' ,hilFinance in favor of the plaintiff TradersRo'al 8an( as null and void and of no force and effect

-#. Ordering the respondent 5entral 8an( of the ,hilippines to disregard thesaid assign"ent and to pa' the value of the proceeds of the 585I No) D3%$ to theFiltriters Guarant' *ssurance 5orporation

-c. Ordering the plaintiff Traders Ro'al 8an( to pa' respondent Filriters

Guarant' *ssurance 5orp) The su" of ,$&+&&& as attorne's fees and

-d. to pa' the costs)

SO ORDERED)

The petitioner assailed the decision of the trial court in the 5ourt of *ppeals+ #ut theirappeal li(ewise failed) The findings of fact of the said court are here#' reproduced1

The records reveal that defendant Filriters is the registered owner of 585I No) D3%$)=nder a deed of assign"ent dated Nove"#er 4+ $%4$+ Filriters transferred 585I No) D3%$to ,hilippine =nderwriters Finance 5orporation -,hilfinance.) Su#se/uentl'+ ,hilfinancetransferred 585I No) D3%$+ which was still registered in the na"e of Filriters+ to appellantTraders Ro'al 8an( -TR8.) The transfer was "ade under a repurchase agree"ent datedFe#ruar' ?+ $%3$+ granting ,hilfinance the right to repurchase the instru"ent on or #efore

*pril 4+ $%3$) :hen ,hilfinance failed to #u' #ac( the note on "aturit' date+ it e9ecuted adeed of assign"ent+ dated *pril 4+ $%3$+ conve'ing to appellant TR8 all its rights and title to585I No) D3%$)

*r"ed with the deed of assign"ent+ TR8 then sought the transfer and registration of585I No) D3%$ in its na"e #efore the Securit' and Servicing Depart"ent of the 5entral 8an(-58.) 5entral 8an(+ however+ refused to effect the transfer and registration in view of anadverse clai" filed #' defendant Filriters)

6eft with no other recourse+ TR8 filed a special civil action for mandamusagainst the5entral 8an( in the Regional Trial 5ourt of Manila) The suit+ however+ was su#se/uentl'treated #' the lower court as a case of interpleader when 58 pra'ed in its a"ended answerthat Filriters #e i"pleaded as a respondent and the court ad0udge which of the" is entitled tothe ownership of 585I No) D3%$) Failing to get a favora#le 0udg"ent) TR8 now co"es to this5ourt on appeal)

In the appellate court+ petitioner argued that the su#0ect 585I was a negotia#leinstru"ent+ and having ac/uired the said certificate fro" ,hilfinance as a holder in duecourse+ its possession of the sa"e is thus free fro" an' defect of title of prior parties and fro"an' defense availa#le to prior parties a"ong the"selves+ and it "a' thus+ enforce pa'"ent ofthe instru"ent for the full a"ount thereof against all parties lia#le thereon)

In ignoring said argu"ent+ the appellate court said that the 585I is not a negotia#leinstru"ent+ since the instru"ent clearl' stated that it was pa'a#le to Filriters+ the registeredowner+ whose na"e was inscri#ed thereon+ and that the certificate lac(ed the words of


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negotia#ilit' which serve as an e9pression of consent that the instru"ent "a' #e transferred#' negotiation)

O#viousl'+ the assign"ent of the certificate fro" Filriters to ,hilfinance was fictitious+having #een "ade without consideration+ and did not confor" to 5entral 8an( 5ircular No)4!%+ series of $%3&+ #etter (nown as the Rules and Regulations Governing 5entral 8an(

5ertificates of Inde#tedness+ which provided that an' assign"ent of registered certificatesshall not #e valid unless "ade 999 #' the registered owner thereof in person or #' hisrepresentative dul' authori


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and "aintenance of a per"anent i"prove"ent revolving fund+ is si"ilar to a #ond+ -3 Minn)&.) 8eing e/uivalent to a #ond+ it is properl' understood as an ac(nowledg"ent of ano#ligation to pa' a fi9ed su" of "one') It is usuall' used for the purpose of long ter" loans)

The appellate court ruled that the su#0ect 585I is not a negotia#le instru"ent+ stating

that1

*s worded+ the instru"ent provides a pro"ise to pa' Filriters Guarant' *ssurance5orporation+ the registered owner hereof) Ver' clearl'+ the instru"ent is pa'a#le onl' toFilriters+ the registered owner+ whose na"e is inscri#ed thereon) It lac(s the words ofnegotia#ilit' which should have served as an e9pression of consent that the instru"ent "a'#e transferred #' negotiation)

* reading of the su#0ect 585I indicates that the sa"e is pa'a#le to FI6RITERSG=*R*NT *SS=R*N5E 5OR,OR*TION+ and to no one else+ thus+ discounting thepetitioners su#"ission that the sa"e is a negotia#le instru"ent+ and that it is a holder in duecourse of the certificate)

The language of negotia#ilit' which characteri


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:hat is "ore+ :e find that the transfer "ade #' Filriters to ,hilfinance did not confor"to 5entral 8an( 5ircular No) 4!%+ series of $%3&+ otherwise (nown as the Rules andRegulations Governing 5entral 8an( 5ertificates of Inde#tedness+ under which the notewas issued) ,u#lished in the Official Ga


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with the corporate entit' which the law ai"s to protect #' this doctrine)

The corporate separateness #etween Filriters and ,hilfinance re"ains+ despite thepetitioners insistence on the contrar') For one+ other than the allegation that Filriters is %&owned #' ,hilfinance+ and the identit' of one shall #e "aintained as to the other+ there isnothing else which could lead the court under the circu"stances to disregard their corporate

personalities)

Though it is true that when valid reasons e9ist+ the legal fiction that a corporation is anentit' with a 0uridical personalit' separate fro" its stoc(holders and fro" other corporations"a' #e disregarded+ in the a#sence of such grounds+ the general rule "ust #e upheld) Thefact that ,hilfinance owns "a0orit' shares in Filriters is not #' itself a ground to disregard theindependent corporate status of Filriters) In 6iddel J 5o)+ Inc) vs) 5ollector of InternalRevenue+ the "ere ownership #' a single stoc(holder or #' another corporation of all ornearl' all of the capital stoc( of a corporation is not of itself a sufficient reason for disregardingthe fiction of separate corporate personalities)

In the case at #ar+ there is sufficient showing that the petitioner was not defrauded at all

when it ac/uired the su#0ect certificate of inde#tedness fro" ,hilfinance)On its face+ the su#0ect certificates states that it is registered in the na"e of Filriters) This

should have put the petitioner on notice+ and pro"pted it to in/uire fro" Filriters as to,hilfinances title over the sa"e or its authorit' to assign the certificate) *s it is+ there is noshowing to the effect that petitioner had an' dealings whatsoever with Filriters+ nor did it "a(ein/uiries as to the ownership of the certificate)

The ter"s of the 585I No) D3%$ contain a provision on its TR*NSFER) Thus1

TR*NSFER1 This 5ertificate shall pass #' deliver' unless it is registered in the ownersna"e at an' office of the 8an( or an' agenc' dul' authori


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registered or at the Securities Servicing Depart"ent+ 5entral 8an( of the ,hilippines+ and #'the registered owner thereof+ in person or #' his representative+ dul' authori


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and the "aintenance of the re/uired reserve fund)

5onse/uentl'+ the title of Filriters over the su#0ect certificate of inde#tedness "ust #eupheld over the clai"ed interest of Traders Ro'al 8an()

*55ORDING6+ the petition is DISMISSED and the decision appealed fro" dated2anuar' %+ $%%& is here#' *FFIRMED)

"O OR$ERE$.

"egalado, 'Chairman(, "omero, &uno, andMendoa, **., concur)paragraph paragraphparagraph

Repu#lic of the ,hilippines"UPRE(E COUR

Manila

SE5OND DIVISION

G.R. No. 1257 Jun 5, 199

!E PRE"I$ENI#L CO((I""ION ON GOO$ GO&ERN(EN PCGG8, 3+3+onr,:;.!ON. "#N$IG#NB#%#N an* #EROCO( IN&E"OR" < (#N#GER", INC., r;on*n3;.

(#RINE), J.:

In +3; /on3+nu+n= ;ar/ or >+??@=o33n Aa?3>, r+n 3+3+onr Pr;+*n3+a? Co+;;+on on Goo*Go:rnn3 PCGG8 +?* +n 3 "an*+=anayan on Ju?y 22, 197 a /a; C+:+? Ca; No. 00098 orr/on:yan/, r:r;+on, a//oun3+n=, r;3+3u3+on an* *aa=; a=a+n;3 (anu? !. N+3o, Jo; L.#r+/a, Ror3o ". Bn*+/3o, Po3n/+ano I??u;or+o, Juan Pon/ Enr+? an* Fr*+nan* E. (ar/o;, Jr.a??=+n=, +n ;u;3an/, 3a3 ;a+* *n*an3; a/3* a; >*u+;> o 3 ?a3 ;3ron=an an* *:+;*>;/;> an* >;3ra3=;> 3o onoo?+D 3 3?/oun+/a3+on; +n*u;3ry. #nn* 3o 3/o?a+n3 +; a ?+;3+n= o 3 a;;3; o *n*an3; N+3o an* #r+/a, aon= A+/ ar 3+r ;ar; o;3o/ +n r+:a3 r;on*n3 #ro/o In:;3or; an* (ana=r;, In/. #ro/o8. 1

#?o;3 a yar ?a3r, 3 PCGG ;ou=3 3o ;u;3r #ro/o un*r a Ar+3 o ;u;3ra3+on *a3*Jun 15, 19, 2A+/ Aa; ;r:* on an* r/+:* >un*r ro3;3> y #ro/oH; r;+*n3 on #u=u;3, 19.

":n 78 *ay; a3r r/+3 o 3 ;u;3ra3+on or*r, #ro/o on #u=u;3 10, 19 +?* a/o?a+n3 a=a+n;3 3 PCGG *o/3* a; C+:+? Ca; No. 00448 4ur=+n= 3 "an*+=anayan 3o nu??+y3 ;a on 3 =roun* 3a3 +3 Aa; ;r:* on #ro/o yon* 3 +=3n 18@on3 r+o* ro 3ra3++/a3+on o 3 197 Con;3+3u3+on a; ro:+** or +n "/3+on 26, #r3+/? &III 3ro A+/ ra*;

"/. 26. au3or+3y 3o +;;u ;u;3ra3+on or rD or*r; un*rPro/?aa3+on No. *a3* (ar/ 25, 196 +n r?a3+on 3o 3 r/o:ry o +??@=o33n Aa?3 ;a?? ra+n ora3+: or no3 or 3an +=3n on3; a3r


20/31

3 ra3++/a3+on o 3+; Con;3+3u3+on. !oA:r, +n 3 na3+ona? +n3r;3, a;/r3++* y 3 Pr;+*n3, 3 Con=r;; ay 3n* ;a+* r+o*.

# ;u;3ra3+on or rD or*r ;a?? +;;u* on?y uon ;oA+n= o a primafacie/a;. or*r an* 3 ?+;3 o 3 ;u;3r* or roDn ror3+; ;a??or3A+3 r=+;3r* A+3 3 ror /our3. For or*r; +;;u* or 3

ra3++/a3+on o 3+; Con;3+3u3+on, 3 /orr;on*+n= u*+/+a? a/3+on orro/*+n= ;a?? +?* A+3+n ;+ on3; ro +3; ra3++/a3+on. For 3o;+;;u* a3r ;u/ ra3++/a3+on, 3 u*+/+a? a/3+on or ro/*+n= ;a?? /on/* A+3+n ;+ on3; ro 3 +;;uan/ 3ro.

;u;3ra3+on or rD or*r +; ** au3oa3+/a??y ?+3* + no u*+/+a?a/3+on ro/*+n= +; /on/* a; r+n ro:+**.

In +3; an** an;Ar *a3* (ay 19, 1992, 53 PCGG ;/++/a??y a??=* 3a3 #ro/o a; no /au;o a/3+on a=a+n;3 +3 ;+n/ 3 +;;uan/ o 3 Ar+3 o ;u;3ra3+on on Jun 15, 19 Aa; A??@A+3+n 31@on3 /on;3+3u3+ona? *a*?+n /oun3* ro Fruary 2, 197, 3 *a3 An 3 o?, +n a?+;/+3, o:rA?+n=?y ra3++* 3 197 Con;3+3u3+on.

$ur+n= 3 n*n/y o C+:+? Ca; No. 0044, #ro/o +?* on Ju?y 5, 1995 a (an+;3a3+on an*(o3+on 6ray+n= 3a3 3 "an*+=anayan *+r/3 3 PCGG 3o r?a; an* *+;3r+u3 3 *+:+*n*;r3a+n+n= 3o 3 ;ar; o #ro/o +n a?? /orora3+on; Ar +3 oAn; ;ar; o ;3o/. Con3+n=3ron, 73 PCGG oo;* 3 r?a; o 3 *+:+*n*; on 3 ar=un3 3a3 >3 a/3 ?a+n3+#ro/o8 +; n3+on* +n #nn >#> o 3 /o?a+n3 +?* +n C+:+? Ca; No. 0009 +; a /?ar +n*+/a3+on3a3 3 ;ar; 3ro ar ?+A+; ;u;3r*.>

"an*+=anayan +n +3; R;o?u3+on rou?=a3* on January 1, 1996 a/3* a:ora?y on#ro/oH; (an+;3a3+on an* (o3+on an* 3u; or*r* 3 PCGG 3o r?a; 3 *+:+*n*; r3a+n+n= 3o#ro/o /3 3 *+:+*n*; on 3 ;u;3r* ;ar; o ;3o/ r=+;3r* +n 3 na; o (anu?N+3o an* Jo; #r+/a +n POC, EPI an* #ro/o, on 3 o??oA+n= +n*+n=;

# /?o; ;/ru+3+ny o #nn >#> o 3 /o?a+n3 +n C+:+? Ca; No. 0009, n3+3?*>Ru?+/ o 3 P+?++n; :;. Jo; L. #r+/a, (anu? !. N+3o, Jr., an*Ror3o ". Bn*+/3o>, *o; no3 ;oA, 3a3 r+n ?a+n3+ #ro/o In:;3or;< (ana=r;, In/., a; a /orora3+on, Aa; +3;? ;u;3r*. -a3 Aa;;u;3r* ar 3 ;ar; o ;3o/ o (anu? !. N+3o, Jr. an* Jo; L. #r+/a+n #ro/o In:;3or; < (an=r;, In/.

$n*an3 PCGG +; un*r ;3o? ro *ny+n= 3a3 +3 a; +n a/3 r/o=n+D*an* /on+r* 3 non@;u;3ra3+on ;3a3u; o r+n ?a+n3+, a; a/orora3+on, y r?a;+n= 3 /a; *+:+*n*; *u 3o 3 ?a+n3+ roP+?++n O:r;a; ?/oun+/a3+on; Corora3+on POC or ;or38 r +3;R;o?u3+on; *a3* Jun 29, 199 an* (ay 6, 1994. ;a+* PCGG R;o?u3+on,*a3* Jun 29, 199 #nn >#>, (an+;3a3+on an* (o3+on, . 0, r/or*8rr; 3o +3; aro:a? 3o r?a; 3 POC /a; *+:+*n*; */?ar* +n 199an* 1991 r3a+n+n= 3o 3 ;ar; o r+n ?a+n3+ #ro/o In:;3or; a//ru+n=3o 3 ;ar; o ;3o/; +n POC, r=+;3r* un*r 3 na o #ro/oIn:;3or; < (ana=r;, In/., /3 /a; *+:+*n*; r3a+n+n= 3o 3 r;ona?;ar; o (r. (anu? !. N+3o, Jr. +n POC an* ?+A+; +; ;ar; o ;3o/; +n#ro/o In:;3or; < (ana=r;, In/.> #nn >B>, (an+;3a3+on an* (o3+on,


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. 1, r/or*8.

r +; no *+;u3 3a3 r+n ?a+n3+, a; a /orora3+on, a; a ur+*+/a?r;ona?+3y ;ara3 an* *+;3+n/3 ro +3; ;3o/o?*r;.

#3r a o3+on or r/on;+*ra3+on 3ro Aa; *n+* y 3 "an*+=aayan r R;o?u3+on

rou?=a3* on (ay 7, 1996, 93 PCGG +?* 3 r;n3 3+3+on or certiorarion #u=u;3 16, 1996a;;a+?+n= 3 "an*+=anayan or*r or 3 r?a; o 3 *+:+*n*; a; a:+n= n +;;u* A+3 =ra:au; o *+;/r3+on. In /o?+an/ A+3 3 R;o?u3+on o 3+; Cour3 *a3* "3r 2, 1996 10A+/a?;o =ran3* 3 3orary r;3ra+n+n= or*r ray* or y 3 PCGG, #ro/o +?* +3; /on3 on 33+3+on on "3r 11, 1996 113o A+/, 3 PCGG on No:r 21, 1996 +?* a r?y. 12

3+3+on u;3 a+?.

r +; r+3 +n 3 +n+3+a? o+n3 a?++* y #ro/o +n +3; /on3 3a3 3 +n;3an3 certiorariro/*+n=; rou=3 y 3 PCGG +; an +ror r*y un*r 3 /+r/u;3an/;. Fro a ra*+n=o +3; January 1, 1996 R;o?u3+on =ran3+n= #ro/oH; (an+;3a3+on an* (o3+on, a; r3ooruo3*8, a; A?? a; 3 (ay 7, 1996 R;o?u3+on *ny+n= 3 o3+on or r/on;+*ra3+on, 3

"an*+=anayan a; :+r3ua??y a;;* uon 3 +:o3a? +;;u +n:o?:* +n #ro/oH; /o?a+n3 or 3*/?ara3+on o nu??+3y o 3 Ar+3 o ;u;3ra3+on C+:+? Ca; No. 00448 K i.e., A3r or no3#ro/oH; ;u;3ra3+on Aa; +n or*r. a3 /our3H; +n*+n= 3o 3 /3 3a3 #ro/o Aa; no3:a?+*?y ;u;3r*, /?ar?y, Aa; a +na? a*u*+/a3+on on 3 r+3; A+/ +; r:+Aa? y 3a??a3 /our3 on?y 3rou= an aa? un*r Ru? 45 o 3 Ru?; o Cour3. PCGG ;ou?* a:a:a+?* o 3 r*y o aa? +?* A+3+n 3 ;3a3u3ory +3n 158@*ay r+o* an* no3 a 3+3+onor certiorari, a; 3 ar=un3; 3 PCGG rooun*; +n ;uor3 o +3; /a??n= on 3"an*+=anayan R;o?u3+on; Aou?* aoun3 3o a *+==+n= +n3o 3 r+3; an* unar3+n= o u*=n3.1#3 3+; un/3ur, >[i]t must emphatically be reiterated,> 3o orroA 3 Aor*; o (r. Ju;3+/ R=a?a*o +nPuroo*; Cor. :;. NLRC, 14>;+n/ ;o o3n +; +3 o:r?oo*, 3a3 3 ;/+a? /+:+? a/3+on or certiorari+;a r*y *;+=n* or 3 /orr/3+on o rror; o ur+;*+/3+on an* rror; o u*=n3. ra;on or 3ru? +; ;+?. -n a /our3 r/+;; +3; ur+;*+/3+on, an rror /o+33* A+? ;o n=a=* *o; no3*r+: +3 o 3 ur+;*+/3+on +n= r/+;* An 3 rror +; /o+33*. I +3 *+*, :ry rror /o+33*

y a /our3 Aou?* *r+: +3 o +3; ur+;*+/3+on an* :ry rronou; u*=n3 Aou?* a :o+* u*=n3.+; /anno3 a??oA*. a*+n+;3ra3+on o u;3+/ Aou?* no3 ;ur:+: ;u/ a ru?. Con;un3?y, anrror o u*=n3 3a3 3 /our3 ay /o+3 +n 3 r/+; o +3; ur+;*+/3+on +; no3 /orr/3a? 3rou=3 or+=+na? /+:+? a/3+on o certiorari.>

Eua??y Aor3 r/a??+n= +; 3a3 certiorari+; no3 an* /anno3 a* a ;u;3+3u3 or an aa? Ar3 ?a33r r*y +; a:a+?a? 15u3 Aa; ?o;3 3ru 3 au?3 or n=?+=n/ o 3+3+onr, 16a; +n 3+; /a;.

E:n + A *+;r=ar* ;u/ ro/*ur ?aA, 3 ;u;3an3+a? /on3n3+on; o 3 PCGG a+? 3o +n:+3u*=n3 +n +3; a:or.

First. - /anno3 ;u;/r+ 3o 3 PCGGH; 3ory 3a3, a; 3 +r;3 ara=ra o "/3+on 26, #r3+/?&III o 3 Con;3+3u3+on ;a; on?y o > au3or+3y to issue. . .>, 3n 3r +; a+3u?

/o?+an/ A+3 3 1@on3 /on;3+3u3+ona? *a*?+n y 3 r +;;uan/ o 3 Ar+3 o;u;3ra3+on A+3+n 3a3 3+@ra Jun 15, 198 :n + ;r:+/ 3ro on #ro/o Aa;/3* 3ra3r #u=u;3 , 198.

o:+ou; +n3n*n3 +n* 3 1@on3 r+o*, a; A?? a; 3 ;+ 68@on3 3+@?++3 or 3+?+n= o 3 /orr;on*+n= u*+/+a? a/3+on, +; 3o n;ur 3 ro3/3+on o ror3y r+=3; an* 3o;r: a; a n/;;ary ;a=uar* a=a+n;3 an o:rDa?ou; r/+; y 3 "3a3, a/3+n= a; >oun3y@un3r;> ;o 3o ;a, o +3; oAr o ;u;3ra3+on A+/, a; *;/r+* y Ju;3+/ #ur+na(?n/+o@!rrra +n r /on/urr+n= o+n+on +n B#"ECO :. PCGG, 17+; an >3ra@or*+nary, ar; an*


22/31

;:r r*y.> For 3+; ra;on, >I83 ;ou?* /on+n*>, J. !rrra /on3+nu;, >3o +3; ?aAu? ara3r;an* r/+;*, A+3 *u r=ar*, +n 3 Aor*; o +3; na?+n= ?aA;, 3o 3 ru+rn3; o a+rn;;, *uro/;;, an* Ju;3+/.> roa? :+? o =o:rnn3a? au; +; ;3 a:o+** an 3 *+/3a3; o>a+rn;;>, >*u ro/;;> an* >Ju;3+/> ar 3ru?y ** un*r an +n3rr3a3+on o "/3+on 26, #r3+/?&III a; ru+r+n= o3 3 +;;uan/ o 3 Ar+3 andno3++/a3+on 3o, or or r/+;?y, 3 a/u+;+3+on o

ur+;*+/3+on o:r 3 n3+3yn3+3+; 3o ;u;3r* :+a :a?+* ;r:+/ 3ro, 3o /3* A+3+n 31@on3 r+o*. # Ar+3 o ;u;3ra3+on, 3ror, run; 3 r+; o +n= ;3ru/ *oAn a; +n:a?+* + an*An 3 3A+n ru+rn3; o +;;uan/ an* ;r:+/ ar no3 ;a3+;+* A+3+n 3 *a*?+n.

"u/ +; 3 a3 o 3 ;u/3 Ar+3 o ;u;3ra3+on, unor3una3?y. -3r 3 1@on3 r+o*+r* on Ju?y 26, 19 a; /?a+* y #ro/o, +n ?+n A+3 3 /ou3a3+on o 3+ un*r #r3+/?1 o 3 C+:+? Co* an* 3 ru?+n= +n >Na3+ona? (ar3+n= Cor. :. /;on,> 29 "CR# 708 or on#u=u;3 2, 19 3 PCGGH; o;+3+on8, 3 a/3 ra+n; 3a3 ;r:+/ o 3 Ar+3 on #ro/o on#u=u;3 , 19 Aa; a* yon* 3; *a3;. PCGGH; 3ory 3a3 3 r +;;uan/ o 3Ar+3 A+3+n 3 1@on3 *a*?+n A+?? ;u+/, +; u;3 3oo *an=rou; 3o a//3. Ia=+n a ;/nar+oAr 3 PCGG ay a: a/3ua??y 3arr+* +n 3 +;;uan/ o 3 ;u;3ra3+on or*r 3o 3ru*+/ o 3 Aou?*@ ;u;3r* n3+3y, an* a?? 3a3 3 PCGG a; 3o *o 3o /o:r +3; +;3a +;3o /on:n+n3?y an3@*a3 3 Ar+3 ;o a; 3o +=n 3+?y /o?+an/. a3 Aou?*, +n /3, a??oA+n= 3 PCGG 3o ?oy a ;u3ru= 3o :a?+*a3 Aa3 ay +n a/3 a ur?y A+;+/a?,

unoun** an* an >3r3ou=3> 3ao:r o /orora3 ror3y. Con;3+3u3+on *o; no3 an*/an n:r 3o?ra3 ;u/ a */3+: anu:r. "r:+/ o 3 Ar+3 o ;u;3ra3+on A+3+n 3 1@on3 r+o*, 3n, +; an +ra3+: a;ur 3o =uar* a=a+n;3 3+; +n* o +;/+, or +3 A+??/r3a+n?y =+: 3 a;;uran/ 3a3 3 Ar+3 Aa; =nu+n?y +;;u* A+3+n 3a3 /on;3+3u3+ona? *a*?+n.

Second. PCGG /anno3 u;3+y +3; a+?ur, a; oun* y 3 "an*+=anayan, 13o +? 3/orr;on*+n= u*+/+a? a/3+on a=a+n;3 #ro/o A+3+n 3 ;+ 68@on3 r+o* a; ro:+** or un*r 3;a /on;3+3u3+ona? ro:+;+on +n o/u; "/3+on 26, #r3+/? &III, ;/on* ara=ra8 y 3 a/3 3a3#ro/o Aa; n3+on* +n 3 /o?a+n3 o 3 PCGG +n C+:+? Ca; No. 0009 3 N+3o, #r+/a, et al./a;8 an* +n #nn >#> 3ro no3A+3;3an*+n= 3a3 #ro/o Aa; no3 +?a** a; ar3y@*n*an3,an* on 3 ar=un3 3a3 3 +?+n= o C+:+? Ca; No. 0009 a=a+n;3 3 >N+3o, #r+/a et al. =rou> +;nou= /o?+an/ A+3 3 >u*+/+a? a/3+on> ru+rn3. /a; o Ru?+/ :. "an*+=anayan, 240"CR# 76, January 2, 1995, r?+* uon y 3 PCGG, a; no r+=3u? a?+/a3+on, +na;u/ a; 3+;

Cour3H; ronoun/n3; 3r+n, +n an;Ar 3o 3+; /ru/+a? u;3+on

$OE" INCLU"ION IN !E CO(PL#IN" FILE$ B% !E PCGG BEFORE !E"#N$IG#NB#%#N OF "PECIFIC #LLEG#ION" OF CORPOR#ION" BEING>$U((IE"> OR UN$ER !E CONROL OF ONE OR #NO!ER OF !E$EFEN$#N" N#(E$ !EREIN #N$ U"E$ #" IN"RU(EN" FOR#C'UI"IION, OR #" BEING $EPO"I#RIE" OR PRO$UC", OF ILL@GOEN -E#L!M OR !E #NNEING O "#I$ CO(PL#IN" OF # LI" OF"#I$ FIR(", BU -I!OU #CU#LL% I(PLE#$ING !E( #"$EFEN$#N", "#I"F% !E CON"IUION#L RE'UIRE(EN !# INOR$ER O (#IN#IN # "EI)URE EFFECE$ IN #CCOR$#NCE -I!EECUI&E OR$ER NO. 1, ;. 196, !E CORRE"PON$ING >JU$ICI#L

#CION OR PROCEE$ING> "!OUL$ BE FILE$ -I!IN !E "I@(ON!PERIO$ PRE"CRIBE$ IN "ECION 26, #RICLE &III, OF !E 1978CON"IUION

r;uo;* a :a?+* an* +;3+n= ;u;3ra3+on o 3 un+?a** /orora3+on;/on/rn*. u; K

18 "/. 26, #r3. &III o 3 Con;3+3u3+on *o; no3, y +3; 3r; or any a+r+n3rr3a3+on 3ro, ru+r 3a3 /orora3+on; or u;+n;; n3rr+;;a??=* 3o ro;+3or+; o >+??@=o33n Aa?3,> a; 3 3r +; u;* +n ;a+*


23/31

ro:+;+on, a/3ua??y an* ora??y +?a** +n 3 a/3+on; or 3 r/o:ry3ro, in order to maintain in effect existing sequestrations thereofM

28 /o?a+n3; or 3 r/o:ry o +??@=o33n Aa?3 A+/ r?y +*n3+y an*ora??= ;a+* /orora3+on; or n3rr+;; 3o 3 +n;3run3;, ro;+3or+; or3 ru+3; o +??@=o33n Aa?3, A+3ou3 or, /o A+3+n 3 an+n= o 3

ra; >/orr;on*+n= u*+/+a? a/3+on or ro/*+n=> /on3?a3* y 3/on;3+3u3+ona? ro:+;+on rrr* 3oM 3 or ;o, 3a3 nora??y, ;a+*/orora3+on;, a; *+;3+n=u+;* ro 3+r ;3o/o?*r; or r;, ar no3=nra??y ;ua? or 3 ?a33rH; +??=a? or /r++na? a/3ua3+on; +n 3 a/u+;+3+ono 3 a;;3; +n:;3* y 3 +n@3 orrM

8 :n a;;u+n= 3 +?a*+n= o ;a+* /orora3+on; 3o n/;;ary an*ror ;o 3a3 u*=n3 ay /orn;+:?y an* /3+:?y rn*r* +n3 a/3+on;, an*n3 o 3 /o?a+n3; 3o +?a* 3 a; *n*an3;ay, un*r +;3+n= ru?; o ro/*ur, *on a3 any 3+ *ur+n= 3n*n/y o 3 a/3+on; 3ry +n+3+a3*, an* :n *ur+n= 3 n*n/y o anaa? 3o 3 "ur Cour3 K a ro/*ur 3a3, +n any /a;, +; no3+n/on;+;3n3 A+3 or ro;/r+* y 3 /on;3+3u3+ona? 3+ ?++3; 3o 3 +?+n= o3 /orr;on*+n= /o?a+n3; >or> K i.e., ith regard or in relation to, inrespect of, or in connection ith, or concerningK orders of sequestration,free!ing,or provisional ta"eover. . . . Ea;+; ;u?+*8

;r +; no +;3+n= ;u;3ra3+on 3o 3a? aou3 +n 3+; /a;, a; 3 Ar+3 +;;u* a=a+n;3 #ro/o,3o ra3, +; +n:a?+* or ra;on; r+nor ;3a3*. Er=o, 3 ;u+3 +n C+:+? Ca; No. 0009 a=a+n;3 (r.N+3o an* (r. #r+/a a; ;aro?*r; +n aro/o +; no3 an* /anno3 ipso facto a ;u+3 a=a+n;3 3un+?a** #ro/o +3;? A+3ou3 :+o?a3+n= 3 un*an3a? r+n/+? 3a3 a /orora3+on a; a?=a? r;ona?+3y *+;3+n/3 an* ;ara3 ro +3; ;3o/o?*r;. "u/ +; 3 ru?+n= ?a+* *oAn +n PCGG:. In3r/o 19r+3ra3* anA +n a /a; o or r/n3 :+n3a= K Ru?+/ :. "an*+=anayan, "+a?ayra*+n= Cor. an* #??+* Ban+n= Cor. 20Ar 3+; Cour3, ;a+n= 3rou= (r. Ju;3+/ R+/ar*o J.Fran/+;/o, 21A* 3o 3 ?on *+;;n3 o (r. Ju;3+/ o*oro R. Pa*+??a 22+n 3 :ry ;a Ru?+/ :.

"an*+=anayan /a; r+n +n:o* y 3 PCGG, 3o Ar+3

. . . a+?ur 3o +?a* 3; /orora3+on; a; *n*an3; an* r?y ann+n=a ?+;3 o ;u/ /orora3+on; 3o 3 /o?a+n3; +; a :+o?a3+on o 3+r r+=3 3o *uro/;; or +3 Aou?* +n /3 *+;r=ar*+n= 3+r *+;3+n/3 an* ;ara3r;ona?+3y A+3ou3 a ar+n=.

In /a;; Ar ;3o/; o a /orora3+on Ar a??=*?y 3 ru+3; o +??@=o33nAa?3, +3 ;ou?* rr* 3a3 +n o;3 o 3; /a;; 3 ;3o/;+n:o?:* /on;3+3u3 a ;u;3an3+a? + no3 /on3ro??+n= +n3r;3 +n 3 /orora3+on;. a;+/ 3n3; o a+r ?ay *an* 3a3 3; /orora3+on; +?a** a;*n*an3; ;+n/ a u*=n3 +n a:or o 3 =o:rnn3 A+?? un*ou3*?y;u;3an3+a??y an* */+;+:?y a/3 3 /orora3+on a; *+;3+n/3 n3+3+;.

u*=n3 /ou?* ;3r+ 3 o :ry3+n= A+3ou3 +n= r:+ou;?y ar* a;3y ar no3 ar3+; 3o 3 a/3+on +n A+/ 3 u*=n3 +; rn*r*.

. . . . !o?*+n= 3a3 3 >/orr;on*+n= u*+/+a? a/3+on or ro/*+n=>/on3?a3* y 3 Con;3+3u3+on +; any a/3+on /on/rn+n= or +n:o?:+n= 3/orora3+on un*r ;u;3ra3+on +; o:r;+?+y+n= 3 ;o?u3+on, 3 r;u?3 oA+/ +; an3a=on+;3+/ 3o 3 r+n/+?; o u;3+/ an* a+r ?ay.


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. . . 3 a/3+on; /on3?a3* y 3 Con;3+3u3+on ;ou?* 3o; A+/+n/?u* 3 /orora3+on no3 a; a r ann 3o 3 /o?a+n3 u3 a;*n*an3. +; +; 3 +n+u ru+rn3 o 3 *u ro/;; =uaran3."or3 o +n= +?a**, 3 /orora3+on a; no ;3an*+n= +n 3 u*+/+a?a/3+on. I3 /anno3 a*ua3?y *n* +3;?. I3 ay no3 :n ar*.

On 3 . . . o+n+on 3a3 a?3rna3+:?y 3 /orora3+on; /an +?a** a;*n*an3; y an*n3 o 3 /o?a+n3, "/3+on 26, #r3+/? &III o 3Con;3+3u3+on Aou?* aar 3o r/?u* 3+; ro/*ur, or a??oA+n=an*n3 o 3 /o?a+n3 3o +?a* 3r3oor un+?a**/orora3+on; Aou?* +n /3 a??oA /o?a+n3; a=a+n;3 3 /orora3+on 3o +?* yon* 3 r+o*; +* y ;a+* "/3+on 26.

-+? =o:rnn3 or3; 3o r/o:r +??=a??y aa;;* Aa?3 ;ou?* a:;uor3 ro a?? +3; ran/;, a=rn;; an* Da? ;ou?* no3 a??oA* 3orun r;r, o:rr+*+n= +n 3 ro/;; 3 :ry r+n/+?; 3a3 +3 +; ;Aorn 3o

uo?*. In our ?=a? ;y;3, 3 n*; *o no3 a?Aay; u;3+y 3 an;.-ron=; ar n:r /orr/3* y /o+33+n= o3r Aron=;, an* a; ao:@*+;/u;;* 3 r/o:ry o +??@=o33n Aa?3 *o; no3 an* ;ou?* n:r u;3+yunra;ona? +n3ru;+on; +n3o /on;3+3u3+ona??y or+**n=rou. . . . .

?a;3 ara o *+;/u;;+on 3ou/; on 3 *o/3r+n o ;3o?. L3 u; rA+n* 3 :n3; or a /?arun*r;3an*+n= o 3 +;;u +n:o?:*.

$ur+n= 3 n*n/y o 3 #ro/o /o?a+n3 a=a+n;3 3 PCGG, 3 ?a33r aro:* 3 r?a;o 3 /a; *+:+*n*; */?ar* +n 3 yar; 199, 1991 an* 199 a//ru+n= 3o 3 ;ar; o ;3o/ o#ro/o +n 3 P+?++n O:r;a; ?/oun+/a3+on; Co. POC8 r PCGG Cr3++/a3+on *a3*Jun 29, 199 2an* R;o?u3+on No. 94@066 *a3* (ay 6, 1994 A+/ ra*, r;/3+:?y

OFFICE OF !E PRE"I$EN

PRE"I$ENI#L CO((I""ION ON GOO$ GO&ERN(EN

C E R I F I C # I O N

+; +; 3o /r3+y 3a3 3 o??oA+n= +; an /r3 o 3 (+nu3; o 3E/u3+: Co+33 (3+n= ?* on Jun 1, 199 a3 3 PCGGCo+;;+on Roo, 63 F?oor, P+?/o/n B?*=., Pa;+=, (3ro (an+?a

#$ %&'()*+&(&- /0+S'&S, /(.)-*/1+2 /+'&, J.

#3r *?+ra3+on on 3 ?33r@ru;3 *a3* (ay 0, 199 o #ro/oIn:;3or;, In/. an* (r. (anu? N+3o, Jr. 3ru /oun;?, 3 Co+;;+on a;r;o?:* 3o aro:* 3 r?a; o 3 POC /a; *+:+*n*; */?ar* +n199 an* 1991.


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Ca+ran ur3r +n;3ru/3* Co. Gu+ao 3o ur;u 3 ;33?n3 A+3(r. N+3o on or a:ora? 3r; 3o 3 =o:rnn3.

$on on 3+; 293 *ay o Jun, 199 a3 Pa;+=, (3ro (an+?a, P+?++n;.

CERIFIE$ CORREC

"G$.8

ELI)#BE! J. RINI$#$

Co+;;+on "/r3ary

KKKKKKKKK KKKKKKKKK

REPUBLIC OF !E P!ILIPPINE"

OFFICE OF !E PRE"I$EN

PRE"I$ENI#L CO((I""ION ON GOO$ GO&ERN(EN

RE"OLUION NO. 94@066

-!ERE#", 3 ru;3 o Po?y=on In:;3or;, In/. an* (r. Jo; #r+/a an*#ro/o In:;3or; < (ana=r;, In/. an* (r. (anu? !. N+3o, Jr. Aa; 3an u+n 3 E/u3+: Co+33 (3+n= o 3+; Co+;;+on ?* on (ay 5, 1994M

-!ERE#", +3 aar; 3a3 (r. Jo; #r+/a an* (r. (anu? !. N+3o, Jr. aro3 *n*an3; +n C+:+? Ca; No. 009 or 3 "an*+=anayan, an*rr;n3a3+on a; n a* 3a3 #ro/o In:;3or; < (ana=r;, In/. +; no3;u;3r*.

NO-, !EREFORE, RE"OL&E$, #" I I" !EREB% RE"OL&E$, 3a3 3PRE"I$ENI#L CO((I""ION ON GOO$ GO&ERN(EN PCGG8 ry+n3ro;; no o/3+on 3o 3 r?a; o 3 /a; *+:+*n*; */?ar* +n 199an* a//ru+n= 3o 3 ;ar; o ;3o/ +n P+?++n O:r;a;?/oun+/a3+on; Co. POC8 r=+;3r* un*r 3 na o #ro/oIn:;3or; < (ana=r;, In/. /3 3 /a; *+:+*n*; r3a+n+n= 3o 3r;ona? ;ar; o ;3o/ o (r. (anu? N+3o, Jr. +n POC an* ?+A+;, +;

;ar; o ;3o/ +n #ro/o In:;3or; < (ana=r;, In/.

On 3 o3r an*, 3 r?a; o 3 /a; *+:+*n*; */?ar* +n 199 an*r:+ou; yar; A+/ ar a//ru+n= 3o 3 ;ar; o ;3o/ +n POC r=+;3r*+n 3 na o Po?y=on In:;3or;, In/. an* (r. Jo; #r+/a +; ry *rr*.

$ONE 3+; 63 *ay o (ay, 1994 a3 Pa;+=, (3ro (an+?a.


26/31

"G

(#G#NGGOL C. GUNIGUN$O

Ca+ran

"G$.8 "G$.8

RE%N#L$O ". GUI#O !ER(ILO R. RO"#L

Co+;;+onr Co+;;+onr

"G$.8 "G$.8

JULIE C. BERUBEN !ER(INIO #. (EN$O)#

Co+;;+onr Co+;;+onr

PCGG +;;u* 3 aoruo3* >Cr3++/a3+on> an* >R;o?u3+on 94@066> aarn3?yon 3 a;+; o a >(oran*u> 24rar* y #33y. I;a? B. "an/D, orr ?=a?/oun;? o 3 PCGG, a*:+;+n= 3 ?a33r no3 3o +n3ro; any o/3+on 3o 3 r?a; o3 POC /a; *+:+*n*;. # or3+on o 3 >(oran*u> ra*;

!E I""UE"

1. I; 3r ?=a? a;+; 3o A+3o?* 3 r?a; o 3 POC /a; *+:+*n*;*/?ar* +n 199 an* 1991 +n a:or o (r. N+3o an* #ro/o

2. -a; 3 ;u;3ra3+on or*r #r/o +;;u* :a?+*?y

*s to the first issue.

#; r;o?:* y 3 "an*+=anayan +n +3; R;o?u3+on o O/3or 2, 1991 an*January 25, 199, 3 PCGG a; no au3or+3y 3o A+3o?* ;a3+;a/3+on an*r?a; o *+:+*n*; 3o ;3o/o?*r; Ao; ;ar; +n POC ar no3 an* a:n:r n ;u;3r*. u;, 3 "an*+=anayan ru?*

- a: =on o:r 3 ?a*+n=; +?* y 3 ar3+;, an* A+n* 3a3 r+n 3+3+onr;, Ao; ;3o/o?*+n=; +n 3 POCar no3 ;u;3r*, a: 3 r+=3 3o 3 ayn3 o 3+rr;/3+: *+:+*n*;. R;on*n3 PCGG a; no au3or+3y 3oA+3o?* ;a3+;a/3+on an* r?a; o 3 ;a.

r +; no3+n= +n 3 r/or*; o 3 Co+;;+on 3o ;oA 3a3 a;u;3ra3+on or*r +;;u* a=a+n;3 3 ;ar; o (r. N+3o Jr. an* #ro/o +n


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POC. # *+;3+n/3+on u;3 a* +n 3 a33r o ;u;3ra3+on o 3/orora3+on +3;? an* 3 ;u;3ra3+on o /orora3 ;aro?*+n=; +n ano3r/orora3+on. P?a; ; No3 ao: r=ar*+n= ;u;3ra3+on o #ro/o8 ;u;3ra3+on rr; 3o #ro/o a; a /orora3+on.

B+n= ;++?ar?y ;+3ua3* a; 3 3+3+onr; +n "an*+=anayan C+:+? Ca; No.

11 an* /on;+*r+n= 3 r?:an3 a/3; ;3a3* ao:, +3 +; 3 o+n+on o 3un*r;+=n* 3a3 3 POC *+:+*n*; *u (r. N+3o an* #ro/o ay r?a;* 3o 3.

*s to the second issue.

-+3 r;/3 3o 3 Ar+3 o ;u;3ra3+on +;;u* on Jun 15, 19 a=a+n;3#ro/o an* ;r:* on #u=u;3 , 19, 3 o??oA+n= o+n3; ar 3o /on;+*r*

18 I3 ay ar=u* 3a3 3+; Ar+3 +; a >+*n+=3> ;u;3ra3+on or*r/on;+*r+n= 3 *a3 o +3; +;;uan/ an* 3 *a3 +3 Aa; ;r:* on #ro/o,

3a3 +;, our 48 *ay; or 3 +ra3+on o 3 au3or+3y o PCGG 3o +;;u;u;3ra3+on or rD or*r a; ro:+** un*r "/3+on 26, #r3+/? &III o 3197 Con;3+3u3+on.

28 ;u;3ra3+on or*r +n u;3+on Aa; +;;u* a3r 3 /3+:+3y o 3197 Con;3+3u3+on a/3?y on Jun 15, 19. #; ;u/, 3 ;u;3ra3+on or*r/an on?y +;;u* uon ;oA+n= aprima facie/a; o +??@=o33n Aa?3.No3+n= Aa; n3+on* +n 3 Ar+3 a=a+n;3 #ro/o o any =roun* or a;+;or +3; +;;uan/. I3 u;3 ;3a3* 3a3 3 /oany +; ?a/* un*r ;u;3ra3+on.

8 E:n a;;u+n= 3a3 +3 Aa; :a?+* An +;;u*, 3 ;u;3ra3+on or*r Aa;n:r +?n3*. In a/3, +n "an*+=anayan C+:+? Ca; No. 044, 3 PCGG3rou= 3 O+/ o 3 "o?+/+3or Gnra? a=r* no3 3o +?n3 3;u;3ra3+on or*r a; ar?+r *+;/u;;*.

48 PCGG a; no3 +?* any a/3+on a=a+n;3 #ro/o. In 3 In3r/o /a;, 3"ur Cour3, citing"/3+on 26, #r3+/? &III o 3 Con;3+3u3+on, a; ru?*an* ?* >3 ;u;3ra3+on or rD or*r +; ** au3oa3+/a??y ?+3* +no u*+/+a? a/3+on or ro/*+n= +; /on/* a; r+n ro:+**.> #nya/3+on or ro/*+n= a=a+n;3 #ro/o ;ou?* a: n /on/* or +?*A+3+n ;+ 68 on3; ro Jun 15, 19.

CONCLU"ION

IN &IE- OF #LL !E FOREGOING, +3 our /on;+*r* o+n+on an*

r/on*a3+on 3a3 3 Co+;;+on +n3ro; no o/3+on 3o 3 r?a; o3 POC /a; *+:+*n*; */?ar* +n 199 an* 1991 +n a:or o (r. N+3o Jr.an* #ro/o In:;3or;, In/.

Fur3ror, aror+a3 +n;3ru/3+on =+:n 3o 3 a;;+=n* #;;3 (on+3or+n POC 3o aro: 3 /orr;on*+n= //; /o:r+n= 3 /a; *+:+*n*;*u (r. N+3o Jr. an* #ro/o In:;3or;, In/.


28/31

"G$.8

I"(#EL B. "#NC!E)

a+n= +n3o a//oun3 3; *o/un3;, 3 "an*+=anayan 3u; oun* 3 PCGG 3o +n ;3o?ro *ny+n= 3 non@;u;3r* ;3a3u; o #ro/o an* ro ru;+n= 3 r?a; o /a;*+:+*n*; +n a:or o 3 ?a33r. PCGG 3a; /3+on 3o 3+; +n*+n= on 3 /?a+ 3a3 3 "3a3;ou?* no3 ?* :u?nra? 3o ;3o? or 3 a/3; o a;3 o+/+a?;.

PCGGH; /on3n3+on +; no3 r;ua;+: un*r 3 a33n*an3 /+r/u;3an/;. -+? A a=r A+33 ;3a3n3 3a3 3 "3a3 +; +un ro ;3o?, 3+; /on/3, a; /?ar++* y 3+; Cour3 3ru(r. Ju;3+/ (?o +n Ru?+/ :. "an*+=anayan, et al. 25>+; un*r;3oo* 3o rr 3o a/3; an* +;3a; o+3; o+/+a?; ;/+a??y 3o; A+/ ar +rr=u?ar.> 26!r, o3r 3an +3; ar a;;r3+on 3a3 #33y."an/DH; >O+n+on> +; >+??=a? an* ru*+/+a?,> 3 PCGG a; no3 r;n3* /on:+n/+n= :+*n/ 3oro: +rr=u?ar+3y or n=?+=n/ on 3 ar3 o #33y. "an/D +n rn*r+n= +; >O+n+on> a:ora? 3o#ro/o. In a/3, no ?;; 3an PCGG Ca+ran (a=3an==o? Gun+=un*o an* 3 r;3 o 3Co+;;+onr; /?ar?y ** 3 r/on*a3+on o #33y. "an/D y a++n= 3+r ;+=na3ur; onR;o?u3+on No. 94@066 a??oA+n= 3 r?a; o 3 /a; *+:+*n*; */?ar* +n 199 a//ru+n= 3o #ro/oH;;ar; o ;3o/ +n POC. E?n3ary no3+on; o /on;+;3n/y an* a+r ?ay /a?? uon 3 PCGG 3o onor3 r?a; o 3 /a; *+:+*n*; r;n3?y ru;3* y #ro/o, a3r a ;++?ar /o+3n3 a; n/o??/3+:?y /on+r* y +3; /o+;;+onr; +n ?a/ an* A+3. ># ru?+n= 3o 3 /on3rary>, +n 3 ru*+3?an=ua= o Ju;3+/ E;/ara? o 3 "an*+=anayan a; a*o3* +n Ru?+/ :. "an*+=anayan, 226 "CR#14, >+; no3 on?y +??o=+/a? an* +rra3+ona?, u3 +nu+3a? an* rn+/+ou; a; A??, or +3 ay on 3 *ooror /ar+/+ou; a*:n3ur+; on 3 ar3 o 3 o?+/y@ar; o 3 ?an*, an* *+;r=ar* or 3 a;3y o3 ?aA, A+/ /ou?* u?3+a3?y r+n= aou3 3 /+3+DnryH; ?o;; a+3 an* /on+*n/ +n 3 ;+n/r+3y o3 =o:rnn3 +n +3; *a?+n=; A+3 3 =o:rn*.>

-!EREFORE, 3 +n;3an3 3+3+on +; ry $I"(I""E$. a;;a+?* R;o?u3+on; o 3"an*+=anayan rou?=a3* o January, 1, 1996 an* (ay 7, 1996 ar #FFIR(E$ +n 3+r n3+r3y.

"O OR$ERE$.

egalado, %uno and -endo!a, JJ., concur.

-elo, J., is on leave.


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