SECOND
DIVISION
|
VICENTE B.
CHUIDIAN, Petitioner, - versus - SANDIGANBAYAN
(Fifth Division) and the REPUBLIC OF THE Respondents. x---------------------------------------------x PHILIPPINE NATIONAL BANK, Petitioner, - versus - SANDIGANBAYAN, EDGARDO A. URIETA in his Official Capacity as SB Chief
Judicial Staff Officer, VICENTE B. CHUIDIAN, the REPUBLIC OF THE PHILIPPINES
represented by the DEPARTMENT OF
FINANCE and PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT and the TRADE &
INVESTMENT DEVELOPMENT CORPORATION,
Respondents. |
|
G.R. No. 156383 Present: PUNO, J.,
Chairperson, SANDOVAL-GUTIERREZ, AZCUNA, and GARCIA, JJ. Promulgated: G.R. No. 160723 |
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D E C I S I O N
GARCIA,
J.:
Before the Court
are these two petitions for certiorari under Rule 65 of the Rules of Court to
nullify and set aside certain issuances of the Sandiganbayan, Fifth Division,
in Civil Case No. 0027, a suit for
recovery of alleged ill-gotten wealth thereat instituted in behalf of the
Republic of the Philippines by the Presidential Commission on Good Government, against
then President Ferdinand E. Marcos, et al.
In the first petition, docketed as G.R.
No. 156383, petitioner Vicente B. Chuidian assails the Resolution
dated October 8, 2002[1] of
the Sandiganbayan insofar as it denied his
Motion for Writ of Execution
of the Decision of this Court dated January
19, 2001 in G.R. No. 139941 entitled
“Vicente B. Chuidian v. Sandiganbayan (5th Division), et al.”[2] In the second, docketed as G.R.
No. 160723, petitioner Philippine National Bank (PNB) impugns the Resolution
dated
Per its Resolution of
At the heart of these proceedings is
Letter of Credit (L/C) No. SFD-005-85 – also denominated as SSD-005-85 in some pleadings
and other relevant documents – issued by PNB in favor of Vicente B. Chuidian to
cover the balance of what Philippine Export & Foreign Loan Guarantee
Corporation (PHILGUARANTEE), now Trade & Investment Development Corporation
(TIDCORP), undertook to pay Chuidian pursuant to a compromise agreement entered
into in the
The
factual antecedents which gave rise to these consolidated petitions are set
forth in the Court’s Decision of
The
instant petition of [Vicente B. Chuidian] arises from transactions that were
entered into by the government in the penultimate days of the Marcos
administration. xxx. As a favored
business associate of the Marcoses, Chuidian allegedly … induce[d] … the
officers of… (PHILGUARANTEE) [sometime in 1980] … to facilitate the … issuance
of a loan guarantee in favor of the Asian Reliability Company, Incorporated
(ARCI) …. ARCI, 98% of which was
allegedly owned by Chuidian, was granted a loan guarantee of …
(US$25,000,000.00).
xxx.
Although ARCI had received the proceeds of the loan …, [it] defaulted in the
payments thereof, compelling Philguarantee to undertake payments for the
same. Consequently, … Philguarantee sued
Chuidian before the Santa Clara County Superior Court, charging that … Chuidian
… misused the funds ….
xxx xxx xxx
On
In was further stipulated that … the
Philippine government shall pay Chuidian the amount of Five Million Three
Hundred Thousand Dollars (US$5,300,000.00).
Initial payment of … (US$500,000.00) was actually received by Chuidian,
as well as succeeding payment of … (US$200,000.00). The remaining
balance of … (US$4,600,000.00) was to be paid through an irrevocable Letter
of Credit (L/C) from which Chuidian would draw … (US$100,000.00) monthly. Accordingly, on
With the advent of the Aquino
administration, the … (PCGG) exerted earnest efforts to search and recover
[illegally acquired] money, … and other assets ….
Petitioner Chuidian was among those
whose assets were sequestered …. On
In the meantime, Philguarantee filed a motion before the Superior Court of Santa Clara County of California in Civil Case Nos. 557867 and 577697 seeking [but eventually failing] to vacate the stipulated judgment containing the settlement between Philguarantee and Chuidian … xxx.
xxx xxx xxx
Meanwhile, on
On
xxx xxx xxx
While the case was pending, … the
Republic … filed a motion for [and
eventually secured an order for the] issuance of a writ of attachment over … L/C [No. SSD-005-85] ….
xxx xxx xxx
Accordingly, an order of attachment
was issued … on
On
xxx xxx xxx
Subsequently, on
xxx xxx xxx
In a Resolution promulgated on
On the same day, the Sandiganbayan
issued another Resolution denying Chuidian’s motion to require deposit of the
attached L/C in an interest bearing account.
xxx xxx xxx
On
The Sandiganbayan declared the
national government as the principal obligor of the L/C even though the liability
remained in the books of the PNB for accounting and monitoring purposes.
The Sandiganbayan, however, denied
Chuidian’s motion for reconsideration of the denial of his motion to lift attachment
…. (Emphasis and words in bracket added.)
The Sandiganbayan’s refusal to reconsider its
denial of Chuidian’s motion to lift attachment would be assailed in a special
civil action for certiorari that would be docketed as G.R. No. 139941.
On
WHEREFORE,
in view of all the foregoing, the petition is DISMISSED. The Resolutions of the Sandiganbayan dated
In the same decision, however, the Court declared
that the “Sandiganbayan erred in
relieving PNB of its liability as the original debtor” of the L/C in
question, for the reason that “until such
time that the government is able to
successfully prove that [Chuidian] has
no right to claim the proceeds of the L/C, he is deemed to be the lawful payee-beneficiary of said L/C for
which any substitution of debtor requires his consent.”
On
the Book of Entries of Judgments of this
Court.[6] The
following relevant incidents then transpired:
1. On
On
WHEREFORE, Chuidian’s Motion
for Writ of Execution is DENIED.
However, pursuant to the decision of the Supreme Court, the PNB is
DIRECTED to remit to the Sandiganbayan the proceeds of [L/C] No. SFD-005-85 in
the amount of U.S.$4.4 million within fifteen (15) days from notice hereof, the
same to be placed under special time deposit with the Land Bank of the
Philippines, for the account of Sandiganbayan in escrow for the person or
persons, natural or juridical, who shall eventually be adjudged lawfully
entitled thereto, the same to earn interest at the current legal bank
rates. xxx.
2. Subsequently, Chuidian
came to the Court on a petition for certiorari, docketed as G.R.
No. 156383, assailing the Sandiganbayan’s October 8, 2002 Resolution, supra, but insofar only as it denied his
Motion for Writ of Execution. On
3. Therefrom, Chuidian filed a Motion for Reconsideration dated April 7, 2003,[11] drawing the Court’s attention to the fact that
“in so far as to the question of whether or not the amount of 4.4 million
Dollars should be deposited into the Land Bank (into an interest bearing
account), that question has been decided with finality by the Supreme Court.”
On
On
4. On February 26, 2004, Chuidian moved for reconsideration
of the January 14, 2004 Resolution, therein stating that a favorable action on this
motion – which in effect would be to grant a second motion for reconsideration -
is in the interest of upholding the power and integrity of the Court whose
Orders PNB has totally ignored.
Meanwhile, or on
Subsequent developments saw PNB thrice asking
for additional time within which to comply, followed by its filing of a MANIFESTATION IN LIEU OF COMPLIANCE therein stating that, from the on-going
negotiations with TIDCORP (formerly PHILGUARANTEE), it discovered that petitioner Chuidian had,
in 1991, filed a voluntary petition for bankruptcy in
The
Sandiganbayan, however, denied the desired release per its Resolution of
WHEREFORE,
the prayer of movant PNB in its MANIFESTATION ‘IN LIEU OF COMPLIANCE’ dated
September 30, 2003 that this Court issue an Order releasing it from complying
with our July 02, 2003 (should properly be July 10, 2003) Resolution is hereby
DENIED for lack of merit. Accordingly,
PNB is ordered to comply immediately upon service hereof, with the directive of
the Supreme Court in its Decision promulgated last January 19, 2001 which was
reiterated by this Court in its Resolution of October 8, 2002 and July 2, 2003,
under pain of contempt should it again fail to comply with the same. The Sheriff of this Court is hereby directed
to effect the service of this Resolution to the PNB for immediate compliance of
the aforementioned Supreme Court’s Decision.
The October 30, 2003 Resolution is presently being
assailed by PNB in its petition for certiorari, docketed as G.R.
No. 160723.
While awaiting the required comment/s from
the respondents in G.R. No. 160723,
the Court received PNB’s Urgent
Manifestation/Motion[19] praying
the Court to take judicial notice of the Deed
of Release with Quitclaim[20]
executed by TIDCORP in favor of PNB. In it, TIDCORP, styling itself as assignee
or successor-in-interest of Chuidian/Fidelity on L/C No. SFD-005-85, discharged
PNB from any claim arising out of its being the issuer of the L/C. Chuidian
opposed the motion.
In its Comment
dated
On
On
In its Memorandum, PNB ascribes the
commission of grave abuse of discretion on the part of the Sandiganbayan. The
abuse, to borrow from the memorandum, came in the form of the anti-graft court’s
completely disregarding “the February 28,
2003 Deed of Assignment and Quitclaim entered into by Fidelity … and TIDCORP as
a supervening event that would effectively suspend the enforcement of, or much
less, satisfy the January 19, 2001 decision of this Honorable Court which was
reiterated by [the Sandiganbayan] in its orders dated October 08, 2003, July 2,
2003 and October 30, 2003.”
Chuidian’s recourse is, as earlier stated,
focused on the October 8, 2002 Resolution
of the Sandiganbayan to the extent that it denied his motion for writ of execution
involving the January 19, 2001 Decision of this Court in G.R. No. 139941.
As
we see it, the decisive issue tendered in these consolidated proceedings turns on the enforcement of the said
final and executory
At the outset, one preliminary procedural
issue needs to be addressed. We refer to the effect of the Court’s order of
consolidation contained in its Resolution of
As may be recalled, the Court dismissed on
February 26, 2003 G.R. No. 156383, therein
petitioner Chuidian failing to show that grave abuse of discretion attended the
denial by the Sandiganbayan of his motion for issuance of writ of execution involving
the January 19, 2001 Decision. Therefrom,
Chuidian moved for reconsideration which the Court, on
Chuidian
argues that the consolidation order adverted to had, in effect, given due course to his second motion for
reconsideration of the dismissal of his underlying petition in G.R. No. 156383.
Citing Francisco,[25]
Chuidian claims that since consolidation effectively merges all the different
actions consolidated into a single action, and that the order of consolidation,
if properly decreed, is binding upon all the parties to the different actions
until it is vacated or set aside, the Court’s order of consolidation in this
case revived his heretofore dismissed petition in G.R. No. 156383.
We agree.
Consolidation
presupposes that the actions covered by the corresponding order are pending in
the same court.[26]
Given this perspective, the irresistible
conclusion is that the Court, with the consolidation of G.R. No. 160723 with G.R. No.
156383, effectively admitted Chuidian’s second motion for reconsideration
aforestated and, for all intents and purposes revived his petition in G.R. No.
156383.
Even
assuming arguendo that the order of
consolidation did not ipso facto work
to revive G.R. No. 156383, this Court
is possessed with inherent power to suspend its own rules, to except a particular case or save a
petition from its operations wherever the demands of justice so require.[27]
It
may be that in the minute Resolution of
To be sure, a reconsideration and eventual
reinstatement of what may be considered a final denial action is not unprecedented. In Uy v.
Land Bank of the Philippines,[29] the
Court also granted therein petitioner Uy’s similar second
motion for reconsideration and reinstated in the process an otherwise
peremptorily denied petition for review.
To
reiterate what the Court has said in Ginete
v. Court of Appeals[30] and other cases, the rules of procedure
should be viewed as mere instruments designed to facilitate the attainment of
justice. They are not to be applied with
severity and rigidity when such application would clearly defeat the very
rationale for their conception and existence.
Even the Rules of Court reflects this principle. The power to suspend or even disregard rules,
inclusive of the one-motion rule, can be
so pervasive and compelling as to alter even that which this Court itself has
already declared to be final. The peculiarities of this case impel us to do so
now.
This
brings us to the substantive aspect of these cases.
In
its bid to be freed from liability arising from its issuance of L/C No. SFD
-005-85, PNB argues that the 2003 Fidelity-TIDCORP Agreement is a new matter
that arose after the finality of the January 19, 2001 Decision in G.R. No. 139941 has
set in. According to PNB, such agreement which it was not cognizant and could
not have been aware of during the proceedings before this Court, directly impacts on its obligation to remit
the proceeds of the subject L/C to the Sandiganbayan. Thus, the resulting change of ownership of
the L/C in favor of TIDCORP is of significant moment since, as PNB argues, it renders
the implementation of the said January 19, 2001 Decision - as reiterated in subsequent
Sandiganbayan issuances in Civil Case No. 0027 - unjust and inequitable for PNB
to perform.
We
are not persuaded by PNB’s argument.
Long
before the execution of the relied-upon quitclaim contracts between Fidelity
and TIDCORP, on one hand, and TIDCORP and PNB on the other, L/C No. SFD-005-85
has been in custodia legis of the
Sandiganbayan, covered as the L/C was by the attachment order issued on
PNB, in foisting before this Court the
alleged TIDCORP-PNB Deed of Release with
Quitclaim and the earlier Fidelity–TIDCORP Deed of Assignment and Quitclaim, cannot plausibly feign ignorance
of the Court’s ruling in G.R. No. 139941 where we declared that:
The
validity of this Deed of Transfer [between the Republic and PNB] is not disputed. Thus, PNB is estopped from denying its
liability thereunder considering that neither the PNB nor the government
bothered to secure petitioner’s consent to the substitution of debtors. We are not unmindful that any effort to
secure petitioner’s consent at that time would, in effect, be deemed an
admission that the L/C is valid and binding.
Even the Sandiganbayan found that:
“. . . Movant has basis in pointing out that
inasmuch as the L/C was issued in his favor, he is presumed to be the lawful
payee-beneficiary of the L/C until such time that the plaintiff successfully
proves that said L/C is ill-gotten and he has no right over the same.
In
Republic v. Sandiganbayan, we held that the provisional remedies, such as
freeze orders and sequestration, were not ‘meant to deprive the owner or
possessor of his title or any right to the property sequestered, frozen of
taken over and vest it in the sequestering agency, the Government or other
person.”
Thus,
until such time that the government is able to successfully prove that petitioner
has no right to claim the proceeds of the L/C, he is deemed to be the lawful
payee-beneficiary of said L/C, for which any substitution of debtor requires
his consent. The Sandiganbayan thus
erred in relieving PNB of its liability as the original debtor. (Words in
bracket added.)
Given the foregoing perspective, it cannot
now be said that the Republic, through TIDCORP, could have validly acquired
ownership over the subject L/C No. SFD-005-85. For, as long as Sandiganbayan has not, with
finality, ruled on the ownership of said L/C, the same is presumptively owned
by Chuidian. We said so in our judgment in G.R.
No. 139941.
Lest
it be overlooked, the authenticity and due execution of the Fidelity-TIDCORP Agreement
and its legal effects have not actually been established as evidentiary fact in
an appropriate judicial proceedings. In the strict legal viewpoint, therefore,
PNB cannot, in this certiorari proceedings, validly invoke the same agreement
of which it is not even a party.
For almost the same reason articulated above,
neither can PNB, as against Chuidian, effectively set up the alleged
TIDCORP-PNB Deed of Release with
Quitclaim to help its cause. What
is more, TIDCORP, as the alleged assignee/successor-in-interest of Chuidian and
beneficiary of L/C No. SSD-005-85, knew all along, being a respondent in G.R. No. 160723, that the issue of ownership over the L/C is
still subject of a pending litigation (Civil Case No. 0027) before the
Sandiganbayan.
Petitioner PNB’s urging for the Court to take judicial notice of both deeds in question cannot be done. This
is because the existence, validity and enforceability of said documents,
as Chuidian has pointed out at every
turn, are not proper subjects of judicial cognizance under Section 1, Rule 129
of the Rules of Court.[33]
In
the light of the foregoing disquisitions, there is really no discharging “supervening
event” yet upon which PNB can, for the nonce, (a) hitch its claim of non-liability
as issuer of L/C No. SFD-005-85, and (b) invoke to exempt itself from complying
with our underlying directive to remit the proceeds of the L/C to the
Sandiganbayan. This is not necessarily
to say that it cannot, at the proper
time and forum and after the deeds in question shall have, in proper proceedings,
passed the test of authenticity and due execution, avail itself of the apparent
beneficent effects of the same deeds.
While perhaps anti-climactic to so stress
at this stage, PNB’s attempt to
resist complying with what is exacted of it
under the January 19, 2001 Decision came after it led, at some point, the
Sandiganbayan to believe that it was bent on remitting the proceeds of the L/C to that court in obedience
to its and this Court’s parallel orders. Two instances easily come to mind: First,
as a matter of record, PNB requested the Bureau of Treasury to make available the amount covered by the subject L/C
to be deposited in escrow with the Land Bank of the Philippines for the account of the Sandiganbayan;[34]
and Second,
PNB made known its intention to obey the
order to remit, but pleaded that it be given an extension to comply,
considering (a) the huge amount involved, and (b) that there would be a need
for PNB to comply first with certain bank procedures as well as some Central
Bank regulations before it could remit the amount of US$4.4 Million.[35]
Having made such representations, PNB
cannot now claim that it is no longer liable under the
The
contention of movants PNB is without merit.
It is emphasized that this Court is only enforcing the order of the
Supreme Court directing it (PNB) to remit to this Court the proceeds of [L/C]
No. SFD-005-85 in the amount of US$4.4 million, the same to be placed under
special time deposit with the [LBP], for the account of the Sandiganbayan in
escrow for the person or persons, natural or juridical, who shall eventually be
adjudged lawfully entitled thereto, the same to earn interest at the
current legal bank rates …. Indeed, the
directive of the Supreme Court was not predicated upon the issue of ownership
of the [L/C] as it will be held in escrow of whoever will be eventually
adjudged lawfully entitled thereto.
Thus, the information given by the PNB that TIDCORP … is the obligor,
beneficiary or guarantor of the subject Letter of Credit, even if we assume
that to be true, will not serve as a valid excuse for the PNB not to comply
with the order of the Supreme Court.
This Court can no longer entertain any pleading which will eventually
result in the non-compliance of the aforesaid Supreme Court Decision. Definitely, PNB cannot just exonerate itself
from its obligation after it was given several extensions of time, which
extensions were granted upon its assurance that it is exerting utmost effort to
comply with the aforementioned Court’s Order.[36]
(Words in bracket added; underscoring in the original)
It bears to stress at this juncture that
the Sandiganbayan’s October 8, 2002 Resolution and July 10, 2003 Order
juxtaposed with its assailed October 30,
2003 resolution to veritably enforce and implement the Court’s January 19, 2001
Decision in G.R. No. 139941. In a very real sense, therefore, the Sandiganbayan
had already granted what petitioner Chuidian was then asking that court and,
presently, this Court, i.e., the
execution of said January 19, 2001 Decision, albeit a formal writ of execution
has not been issued. Nonetheless, the
At bottom then, Chuidian’s petition in
G.R. No. 156383 has been rendered moot and academic by the Sandiganbayan’s
October 30, 2003 Resolution aforestated and its earlier resolution of the same
tenor. A moot and academic case or issue is one that ceases to present a
justifiable controversy by virtue of supervening events, so that a
determination thereof would be of no practical value. In such cases, there is no actual substantial
relief to which petitioner would be entitled to and which would be negated by
the dismissal of the petition.[37]
We
close by making clear certain key premises holding this ponencia together and against which it is cast:
1.
As peremptorily determined by the Court in its ruling
in G.R. No. 139941, PNB is estopped from denying its liability under L/C No.
SFD-005-85. The Deed of Transfer entered into on
2.
Chuidian remains the lawful payee-beneficiary of L/C
No. SFD-005-85, until such time that the government, thru any of its agencies
or any other interested party, is able to successfully prove in the proper forum
that Chuidian has no right or has no longer any right to claim the proceeds of
the L/C; and
3.
The Decision of the Court in G.R. No. 139941 that the
proceeds of L/C No. SFD-005-85 be deposited with the LBP to be held in escrow
is, as the Sandiganbayan declared,[38] a
directive addressed to PNB, not an award for or against any party. The question
as to whom such attached proceeds will eventually be awarded to shall be
determined at the first instance in Civil Case No. 0027 of the Sandiganbayan,
barring any supervening event that would change the factual or legal complexion
of the case.
WHEREFORE, the petition in
G.R. No. 156383 is DISMISSED on the
ground of mootness, while the petition in G.R. No. 160723 is DISMISSED for lack of merit.
The
Sandiganbayan is ordered to immediately enforce the Decision of the Court dated
SO
ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairperson
|
ANGELINA SANDOVAL-GUTIERREZ Associate Justice |
RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA
Associate Justice
A T T E S T A T I O N
I
attest that the conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
REYNATO S .PUNO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant
to Article VIII, Section 13 of the Constitution, and the Division Chairperson's
Attestation, it is hereby certified that the conclusions in the above decision
were reached in consultation before the
case was assigned to the writer of the opinion of the Court.
ARTEMIO V. PANGANIBAN
Chief Justice
[1] Penned by Associate Justice Francisco H. Villaruz with Presiding Justice Minita V. Chico-Nazario (now a member of this Court) and Associate Justice Ma. Cristina G. Cortez –Estrada concurring; Rollo (G.R. No. 156383), pp. 34-39.
[2] Reported in 349 SCRA 745 (2001).
[3] Rollo (G.R. No. 160723), pp. 35-38.
[4]
[5] The
separate Resolutions were promulgated
[6] Rollo (G.R. No. 160723), p. 87.
[7] Rollo (G.R. No. 156383), p. 63.
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15] Supra note 9.
[16] Rollo (G.R. No. 160723), pp. 139 et seq.
[17]
[18] Supra note 3.
[19] Dated
[20] Annex “B” to PNB’s Urgent Motion; Rollo (G.R. No. 160723), pp. 265-268.
[21]
[22] Section 1. Judicial Notice, when mandatory. – A court shall take judicial notice, without the introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical division.
[23] Rollo (G.R. No. 156383), p. 260.
[24] Supra note 4.
[25] Vicente Francisco, The Revised Rules of Court, Vol. II, 1966 ed., pp. 348 et seq.
[26] Paras, Rules of Court Annotated, Vol. I, 1996 ed., p. 670, citing Salazar v. CFI of Laguna, 64 Phil. 785.
[27] Ginete v. Court of Appeals, G.R. No. 127596, September 24, 1998, citing cases, 296 SCRA 38.
[28] Supra note 12.
[29] G.R. No. 136100,
[30] Supra note 27.
[31] Feria & Concepcion, Civil Procedure Annotated, Vol. II, p. 277.
[32] The Dial Corporation v. Soriano, G.R. No. L-82330,
[33] Supra note 22.
[34] Par. #6 of PNB’s Opposition to the Issuance of Writ of Execution Ad Cautelam; Rollo (G.R. No. 160723), p. 94.
[35] Par. #2 of “Annex “X” of Petition in G.R. No. 160723; Rollo (G.R. No 160723), p. 155.
[36] Supra note 3.
[37] Vda. De Davao v. CA, G.R. No. 116526,
[38] Page
7 of its