SECOND DIVISION
PRESIDENTIAL COMMISSION G.R. No.
124772
ON
GOOD GOVERNMENT and
MAGTANGGOL
C. GUNIGUNDO,
in
his capacity as CHAIRMAN thereof,
Petitioners, Present:
QUISUMBING,
J.,
-
versus - Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
SANDIGANBAYAN and VELASCO, JR., JJ.
OFFICECO HOLDINGS, N.V.,
Respondents.
Promulgated:
August 14,
2007
x-----------------------------------------------------------------------------------x
D E C I S I O N
Tinga, J.:
Before this Court is a Petition for
Certiorari and Prohibition with Prayer for Issuance of a Temporary Restraining
Order filed by the Presidential Commission on Good Government (PCGG) to
restrain and enjoin respondent Sandiganbayan from further proceeding with Civil
Case No. 0164, and to declare null and void the Resolutions of the
Sandiganbayan (Second Division) dated 11 January 1996 and 29 March 1996, which
denied PCGG’s motion to dismiss and motion for reconsideration, respectively,
in Civil Case No. 0164.
The antecedent facts follow.
On 7 April 1986, in connection with
criminal proceedings initiated in the Philippines to locate, sequester and seek
restitution of alleged ill-gotten wealth amassed by the Marcoses and other
accused from the Philippine Government,[1]
the Office of the Solicitor General (OSG) wrote the Federal Office for Police
Matters in Berne, Switzerland, requesting assistance for the latter office to:
(a) ascertain and provide the OSG with information as to where and in which
cantons the ill-gotten fortune of the Marcoses and other accused are located,
the names of the depositors and the banks and the amounts involved; and (b)
take necessary precautionary measures, such as sequestration, to freeze the
assets in order to preserve their existing value and prevent any further
transfer thereof (herein referred to as the IMAC request).[2]
On
Officeco appealed the Order of the
District Attorney to the Attorney General of the Canton of Zurich. The Attorney
General affirmed the Order of the District Attorney.[5]
Officeco further appealed to the Swiss Federal Court which likewise dismissed
the appeal on
Thereafter, in late 1992, Officeco
made representations with the OSG and the PCGG for them to officially advise
the Swiss Federal Office for Police Matters to unfreeze Officeco’s assets.[7]
The PCGG required Officeco to present countervailing evidence to support its
request.
Instead of complying with the PCGG
requirement for it to submit countervailing evidence, on
the complaint[8] which
was docketed as Civil Case No. 0164 of the Sandiganbayan. The complaint prayed
for the PCGG and the OSG to officially advise the Swiss government to exclude
from the freeze or sequestration order the account of Officeco with BTAG and to
unconditionally release the said account to Officeco.
The OSG filed a joint answer[9] on
On
The issues raised by the PCGG in its Memorandum[15]
may be summarized as follows: whether the Sandiganbayan erred in not dismissing
Civil Case No. 0164 on the grounds of (1) res judicata; (2) lack
of jurisdiction on account of the “act of state doctrine”; (3) lack of cause of
action for being premature for failure to exhaust administrative remedies; and
(4) lack of cause of action for the reason that mandamus does not lie to compel
performance of a discretionary act, there being no showing of grave abuse of
discretion on the part of petitioners.
According to petitioners, the
Next, petitioners claim that Civil
Case No. 0164 in effect seeks a judicial review of the legality or illegality
of the acts of the Swiss government since the Sandiganbayan would inevitably
examine and review the freeze orders of Swiss officials in resolving the case.
This would be in violation of the “act of state” doctrine which states that
courts of one country will not sit in judgment on the acts of the government of
another in due deference to the independence of sovereignty of every sovereign
state.[17]
Furthermore, if the Sandiganbayan
allowed the complaint in Civil Case No. 0164 to prosper, this would place the
Philippine government in an uncompromising position as it would be constrained
to take a position contrary to that contained in the IMAC request.
Petitioners allege that Officeco
failed to exhaust the administrative remedies available under Secs. 5 and 6 of
the PCGG Rules and Regulations Implementing Executive Orders No. 1 and No. 2.
This failure, according to petitioners, stripped Officeco of a cause of action thereby
warranting the dismissal of the complaint before the Sandiganbayan.
Petitioners further contend that the
complaint before the Sandiganbayan is actually one for mandamus but the act sought
by Officeco is discretionary in nature. Petitioners add that they did not
commit grave abuse of discretion in denying Officeco’s request to unfreeze its
account with BTAG since the denial was based on Officeco’s failure to present
countervailing evidence to support its claim. The action for mandamus does not
lie, petitioners conclude.
In its comment,[18]
Officeco questions the competence of the PCGG lawyers to appear in the case
since they are not properly authorized by the OSG to represent the Philippine
government and/or the PCGG in ill-gotten wealth cases such as the one in the
case at bar. However, this issue has been rendered moot by an agreement by and among
the PCGG Chairman, the Solicitor General, the Chief Presidential Legal Counsel,
and the Secretary of Justice that the PCGG lawyers would enter their appearance
as counsel of PCGG or the Republic and shall directly attend to the various
cases of the PCGG, by virtue of their deputization as active counsel.[19]
Furthermore, the Memorandum in this case which was prepared by the OSG
reiterated the arguments in support of the petition which was initially filed
by PCGG.
Nevertheless, the petition is bereft
of merit. We find that the Sandiganbayan did not act with grave abuse of
discretion in denying petitioners’ motion to dismiss.
Res judicata
Res judicata means a matter adjudged, a thing
judicially acted upon or decided; a thing or matter settled by judgment.[20]
The doctrine of res judicata provides that a final judgment on the
merits rendered by a court of competent jurisdiction is conclusive as to
the rights of the parties and their privies and constitutes an absolute
bar to subsequent actions involving the same claim, demand, or cause of
action.[21]
For the preclusive effect of res
judicata to be enforced, the following requisites must obtain: (1) The
former judgment or order must be final; (2)
It must be a judgment or order on the merits, that is, it was rendered
after a consideration of the evidence or stipulations submitted by the parties
at the trial of the case; (3) It must
have been rendered by a court having jurisdiction over the subject matter and
the parties; and (4) There must be, between the first and second actions,
identity of parties, of subject matter and of cause of action. This requisite
is satisfied if the two actions are substantially between the same parties.[22]
While the first three elements above
are present in this case, we rule that the fourth element is absent. Hence, res
judicata does not apply to prevent the Sandiganbayan from proceeding with
Civil Case No. 0164.
Absolute identity of parties is not a
condition sine qua non for res judicata to apply, a shared
identity of interest being sufficient to invoke the coverage of the principle.[23] In this regard, petitioners claim that while
“the Philippine government was not an impleaded party respondent in
Secondly, a subject matter is the
item with respect to which the controversy has arisen, or concerning which the
wrong has been done, and it is ordinarily the right, the thing, or the contract
under dispute.[26] In the
case at bar, the subject matter in the Swiss Federal Court was described in the
31 May 1989 decision itself as “ruling on temporary measures (freezing of
accounts) and of taking of evidence (gathering bank information).”[27]
It was thus concerned with determining (1) whether “there is a reason of
exclusion as defined in Art. 2 lit. b and [Art. ] 3 par. 1 IRSG[28]
or an applicable case of Art. 10 Par. 2 IRSG;” [29]
(2) whether legal assistance should be refused
on the basis of Art. 2 lit. a IRSG;[30]
(3) whether Officeco should be regarded as a disinterested party owing to the
fact that its name was not included in the list accompanying the IMAC request
as well as in the order of the District Attorney of Zurich; and (4) whether the
grant of legal assistance is proper considering the actions of Gapud.[31]
In short, the subject matter before the Swiss courts was the propriety of the legal
assistance extended to the Philippine government. On the other hand, the issue
in Civil Case No. 0164 is whether the PCGG may be compelled to officially
advise the Swiss government to exclude or drop from the freeze or sequestration
order the account of Officeco with BTAG and to release the said account to
Officeco. In short, the subject matter in Civil Case No. 0164 is the propriety
of PCGG’s stance regarding Officeco’s account with BTAG.
In arguing that there is identity of
causes of action, petitioners claim that “the proofs required to sustain a
judgment for [Officeco] in
A cause of action is an act or
omission of one party in violation of the legal right of the other.[32]
Causes of action are identical when there is an identity in the facts essential
to the maintenance of the two actions, or where the same evidence will sustain
both actions.[33] The
test often used in determining whether causes of action are identical is to
ascertain whether the same facts or evidence would support and establish the
former and present causes of action.[34]
More significantly, there is identity of causes of action when the judgment
sought will be inconsistent with the prior judgment.[35]
In the case at bar, allowing Civil Case No. 0164 to proceed to its logical
conclusion will not result in any inconsistency with the
Act of State Doctrine
The classic American statement of the
act of state doctrine, which appears to have taken root in England as early as
1674,[36]
and began to emerge in American jurisprudence in the late eighteenth and early
nineteenth centuries, is found in Underhill v. Hernandez,[37]
where Chief Justice Fuller said for a unanimous Court:
Every
sovereign state is bound to respect the independence of every other state, and
the courts of one country will not sit in judgment on the acts of the
government of another, done within its territory. Redress of grievances by
reason of such acts must be obtained through the means open to be availed of by
sovereign powers as between themselves.[38]
The act of state doctrine is one of the methods by which
States prevent their national courts from deciding disputes which relate to the
internal affairs of another State, the other two being immunity and
non-justiciability.[39]
It is an avoidance technique that is directly related to a State’s obligation
to respect the independence and equality of other States by not requiring them
to submit to adjudication in a national court or to settlement of their
disputes without their consent.[40]
It requires the forum court to exercise restraint in the adjudication of
disputes relating to legislative or other governmental acts which a foreign
State has performed within its territorial limits.[41]
It
is petitioners’ contention that the Sandiganbayan “could not grant or deny the
prayers in [Officeco’s] complaint without first examining and scrutinizing the
freeze order of the Swiss officials in the light of the evidence, which however
is in the possession of said officials” and that it would therefore “sit in
judgment on the acts of the government of another country.”[42] We disagree.
The parameters of the use of the act
of state doctrine were clarified in Banco Nacional de Cuba v. Sabbatino.[43] There, the U.S. Supreme Court held that international
law does not require the application of this doctrine nor does it forbid the application
of the rule even if it is claimed that the act of state in question violated
international law. Moreover, due to the doctrine’s peculiar nation-to-nation
character, in practice the usual method for an individual to seek relief is to
exhaust local remedies and then repair to the executive authorities of his own
state to persuade them to champion his claim in diplomacy or before an
international tribunal.[44]
Even assuming that international law
requires the application of the act of state doctrine, it bears stressing that
the Sandiganbayan will not examine and review the freeze orders of the
concerned Swiss officials in Civil Case No. 0164. The Sandiganbayan will not
require the Swiss officials to submit to its adjudication nor will it settle a
dispute involving said officials. In fact, as prayed for in the complaint, the
Sandiganbayan will only review and examine the propriety of maintaining PCGG’s
position with respect to Officeco’s accounts with BTAG for the purpose of
further determining the propriety of issuing a writ against the PCGG and the
OSG. Everything considered, the act of state doctrine finds no application in
this case and petitioners’ resort to it is utterly mislaid.
Exhaustion of Administrative Remedies
Petitioners advert to Officeco’s
failure to exhaust the administrative remedies provided in Secs. 5 and 6 of the
PCGG Rules and Regulations Implementing Executive Orders No. 1 and No. 2.[45]
However, a reading of said provisions shows that they refer only to
sequestration orders, freeze orders and hold orders issued by the PCGG in the
It was thus error for petitioners to
treat Officeco’s request for the lifting of the freeze orders as a request
under Secs. 5 and 6 of its rules. First, the PCGG cannot even grant the remedy
embodied in the said rules, i.e.,
lifting of the freeze orders. Second, any argument towards a conclusion that
PCGG can grant the remedy of lifting the freeze order is totally inconsistent
with its earlier argument using the act of state doctrine. PCGG’s cognizance of
such a request and treating it as a request under Secs. 5 and 6 of its rules
would require a re-examination or review of the decision of the Swiss court, a
procedure that is prohibited by the act of state doctrine.
Complaint States a Cause of Action
While the stated issue is whether
mandamus lies, the real crux of the matter is whether Officeco’s complaint
before the Sandiganbayan states a cause of action. We uphold the sufficiency of
the complaint.
It may be recalled that Officeco had
alleged that it had sent several letters to the PCGG and the OSG for these
bodies to advise the Swiss authorities to drop or exclude Officeco’s account with
BTAG from the freeze or sequestration, but no formal response was received by
petitioners on these letters. Copies of at least four (4) of these letters were
in fact attached as annexes to the complaint.[46]
Section 5(a) of Republic Act No.
6713, or the Code of Conduct and Ethical Standards for Public Officials and
Employees, states:
Section 5. Duties of Public Officials and Employees. ― In the performance of their duties, all public officials and employees are under obligation to:
(a) Act promptly on letters and requests. ― All public officials and employees shall, within fifteen (15) working days from receipt thereof, respond to letters, telegrams or other means of communications sent by the public. The reply must contain the action taken on the request. [Emphasis supplied.]
Since neither the PCGG nor the OSG
replied to the requests of Officeco within fifteen (15) days as required by
law, such inaction is equivalent to a denial of these requests. As such, no
other recourse was left except for judicial relief. The appreciation of the
allegations in the complaint from this standpoint allows us to see how the
cause of action precisely materialized. Even if these allegations were not cast
in the framework of a mandamus action, they still would give rise to a viable
cause of action, subject to the proof of the allegations during trial.
A motion to dismiss on the ground of
failure to state a cause of action in the complaint hypothetically admits the
truth of the facts alleged therein. The hypothetical admission extends to the
relevant and material facts well pleaded in the complaint and inferences fairly
deducible therefrom. Hence, if the allegations in the complaint furnish
sufficient basis by which the complaint can be maintained, the same should not be
dismissed regardless of the defense that may be assessed by the defendants.[47]
The
following allegations culled from Officeco’s complaint in the Sandiganbayan
would, if proven, entitle Officeco to the main reliefs sought in its complaint
in view of petitioners’ refusal to exclude Officeco’s account with BTAG in the
list of ill-gotten wealth, to wit: (1) The freeze order has been in effect for
eleven (11) years, since 1986, without any judicial action instituted by the PCGG
and the OSG against Officeco; (2) The PCGG and the OSG have no document or
proof that the account of Officeco with BTAG belongs to the Marcoses nor their
cronies. Information on this matter was
even requested by the OSG from the PCGG and the latter from Swiss authorities
who, up to the present, have not responded positively on the request;[48]
and (3) Requests[49] by
Officeco to the PCGG and OSG to make representations with the Swiss authorities
for the latter to release Officeco’s account with the BTAG from the freeze
order remain unacted upon despite the mandate in Section 5(a) of Republic Act
No. 6713.
The truth of the above allegations,
which must be deemed hypothetically admitted for the purpose of considering the
motion to dismiss, may properly be determined only if Civil Case No. 0164 is
allowed to proceed, such that if they are found to be supported by preponderance
of evidence, adverse findings may properly be made against PCGG and the
corresponding reliefs granted in favor of Officeco.
Furthermore, Officeco claims that on
two separate occasions, upon request of counsel for Security Bank and Trust
Company (SBTC), the PCGG and the OSG formally advised the Swiss authorities to
release from the freeze orders two other securities accounts with BTAG. Because
of these representations, the release of the two accounts from the freeze order was
effected. Gapud also assisted in the establishment and administration of these
accounts with BTAG.[50]
According to Officeco, the continuous refusal of the PCGG and the OSG to act
favorably on its request while acting favorably on the above two requests of
SBTC is a clear violation of its right to equal protection under the 1987
Constitution.[51]
The guarantee of equal protection,
according to Tolentino v. Board of
Accountancy, et al.,[52] simply means “that no person or class of
persons shall be deprived of the said protection of the laws which is enjoyed
by other persons or other classes in the same place and in like circumstances.”[53] Indeed, if it were true that the PCGG and
the OSG facilitated the release of two deposit accounts upon the request of
SBTC and these accounts are similarly situated to Officeco’s frozen account
with BTAG, the operation of the equal protection clause of the Constitution
dictates that Officeco’s account should likewise be ordered released. Again, this matter can properly be resolved
if Civil Case No. 0164 is allowed to proceed.
WHEREFORE, premises considered, the
instant petition is DISMISSED.
No pronouncement as to costs.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
PRESBITERO J. VELASCO,
JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1]The names of the accused as listed in the caption of PCGG I.S. No. 1 are as follows: Ferdinand E. Marcos, Imelda R. Marcos, Imelda Marcos Manotoc (Imee), Tomas Manotoc, Irene Marcos Araneta, Gregorio Araneta III, Ferdinand R. Marcos, Jr., Baltazar Aquino, Roberto S. Benedicto, Edna Camcam, Jose Y. Campos, Eduardo Cojuangco, Roman Cruz, Jr., Rodolfo Cuenca, Herminio Disini, Antonio Floirendo, Andres Genito, Jr., Rolando Gapud, Fe Roa Gimenez, Peter Sabido, Ricardo Silverio, Lucio Tan, Bienvenido Tantoco, Gliceria Tantoco, Geronimo Velasco, Fabian Ver, John Doe, Jane Doe, and others. Records, Vol. I, p. 22.
[2]Rollo,
pp. 62-64.
[3]No such list can be found in the records of the case.
[4]It appearing that Rolando Gapud, one of the accused in PCGG I.S. No. 1, as President of Security Bank and Trust Company, assisted Officeco in the opening and administration of which Officeco’s account with BTAG.
[5]Based on
its finding, the two limited companies, Curacao Corporation Company NV and
Netherlands Antilles Corporation Company NV, who were the incorporators of
Officeco, were also the incorporators of Unique Investment NV and Goodland
Investment NV, companies organized by Jose Yao Campos on instructions of former
President Ferdinand E. Marcos as a conduit of ill-gotten funds.
[6]Rollo,
pp. 77-86.
[7]These
requests were contained in various letters written by Officeco’s counsel.
[8]Rollo,
pp. 103-117.
[9]Records, Vol. I, pp. 97-104.
[10]The defendants were the following: Raul I. Goco, in his capacity as Solicitor General, the Presidential Commission on Good Government (PCGG), and Magtanggol C. Gunigundo, in his capacity as PCGG Chairman.
[11]Rollo, pp. 127-152.
[12]
Still, the record also indicates a disconcerting lack of harmony between the OSG and the PCGG
in the litigation of this petition. It was the PCGG itself, through its own
counsels, which had filed the petition before this Court without any manifest
conformity on the part of the OSG. In fact, there was an extended dispute on
this point among the parties. While the OSG later manifested that it had
deputized the PCGG lawyers to appear in this case, the Memorandum for
petitioners was filed by the OSG itself.
[13]
[14]Records, Vol. IV, p. 1025.
[15]Rollo,
pp. 1114-1153.
[16]Citing General
Corporation of the
[17]Citing Underhill
v. Hernandez, 168
[18]Rollo, pp. 164-219.
[19]
[20]Lanuza
v. Court of Appeals, G.R. No. 131394, 28 March 2005, 454 SCRA 54, 61,
citing Manila Electric Company v. Philippine Consumers Foundation, Inc.,
425 Phil. 65, 78 (2002), citing 46 Am Jur. §514.
[21]
[22]Escareal
v. Philippine Airlines, Inc., G.R. No. 151922,
[23]Lanuza v. Court of Appeals, supra note 20, at 62, citing Cruz v. Court of Appeals, 388 Phil. 550, 556 (2000).
[24]Rollo,
p. 20.
[25]Executive
Order No. 2 (signed by former President Corazon C. Aquino on
[26]Escareal
v. Philippine Airlines, Inc., supra note 22, citing Yusingco v. Ong Hing Lian, 149
Phil. 688, 705.
[27]Rollo,
p. 82.
[28]Under this provision, a request for legal assistance is not to be complied with if the object of the proceedings is an act which, according to Swiss interpretation, has a predominantly political character.
[29]Under this provision, the divulgence of facts is inadmissible if it means considerable disadvantage to Swiss economy and this would not be expected in consideration of the significance of the deed.
[30]Under this provision, the procedure is refused when there are grounds for the assumption that the proceedings abroad do not correspond to the principles established in the European Human Rights Convention.
[31]Rollo, pp. 82-84. A legal requirement for legal assistance is that the actions of the individual accused must be punishable either under Philippine law or Swiss law.
[32]Escareal
v. Philippine Airlines, Inc., supra note 22, citing Section 2, Rule 2, 1997
Rules of Civil Procedure.
[33]Id., citing Stilanopolus v. City of Legaspi, G.R. No. 113913, 12 October 1999, 316 SCRA 523, 541.
[34]Lanuza
v. Court of Appeals, supra note 20, at 62, citing Cagayan de Oro
Coliseum Inc. v. Court of Appeals, 378 Phil. 498, 520 (1999).
[35]
[36]Banco
Nacional de Cuba v. Sabbatino, 376
[37]168
[38]Banco
Nacional de
[39]Evans, M.d. (Ed.), International Law
(First Edition),
[40]
[41]
[43]376
[44]
[45]Secs. 5 and 6 of the Rules read:
Section 5. Who may contest. – The person against whom a writ of sequestration or freeze or hold order is directed may request the lifting thereof in writing, either personally or through counsel within five (5) days from receipt of the writ of order, or in the case of a hold order, from date of knowledge thereof.
Section 6. Procedure for review of writ of order. – After
due hearing or motu proprio for good cause shown, the Commission may
lift the writ or order unconditionally or subject to such conditions as it may
deem necessary, taking into consideration the evidence and the circumstances of
the case. The resolution of the Commission may be appealed by the party
concerned to the Office of the President of the
[48]Officeco
points to the following communications as evidence of this fact: (1) Letter
dated
[49]The
requests were made by Officeco’s counsel through letters dated
[50]These are the deposit accounts of Bunratty Enterprises Ltd. worth US$15,000,000.00 and a CB Note worth US$2,598,586.00
[51]Sec.
1, Article II of the 1987 Constitution provides: “No person shall be deprived
of life, liberty or property without due process of law, nor shall any person
be denied the equal protection of the laws.”
.
[52]90 Phil. 83, 90 (1951).