FIRST DIVISION
|
EDWARD T. MARCELO, MARCELO FIBERGLASS CORPORATION,
PHIL-ASIA AGRO INDUSTRIES CORP., PHILIPPINE SPECIAL SERVICES CORP., PROVIDENT
INTERNATIONAL RESOURCES CORP., MARCELO CHEMICAL & PIGMENT CORP., FARMERS
FERTILIZER CORP., INSULAR RUBBER CO., INC., HYDRONICS CORPORATION OF THE
PHILIPPINES, MARCELO RUBBER & LATEX PRODUCTS, INC., POLARIS MARKETING
CORP., H. MARCELO & CO., INC., MARCELO STEEL CORP., PHILIPPINE CASINO
OPERATORS CORP., and MARIA CRISTINA FERTILIZER CORP.,
Petitioners, -
versus
- SANDIGANBAYAN and THE PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT, Respondents. |
G.R. No. 156605
Present: PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ, AZCUNA, and GARCIA, JJ.
Promulgated: August 28, 2007 |
x------------------------------------------------------------------------------------x
D E C I S I O N
GARCIA, J.:
This joint petition for certiorari under Rule 65 of
the Rules of Court seeks the reversal and
setting aside of the Resolution[1]
dated August 27, 2001 of the Sandiganbayan in its Civil Case No. 21, a suit for recovery of ill-gotten wealth, with damages,
initiated by the Republic of the Philippines (Republic or RP, for short), denying herein petitioners’ respective motions for summary
judgment and its Resolution[2]
of November 19, 2002 which likewise denied their separate motions for
reconsideration.
At the core of the case is the contract entered into on June 10, 1982 by
and between the Republic, though the Philippine Navy (PN), and Marcelo
Fiberglass Corporation (MFC), represented by its President, herein petitioner
Edward T. Marcelo (Marcelo, hereinafter), for the construction of 55 units of
16.46 fiberglass high-speed boats, at the unit price of P7,200,000.00, subject to adjustment upon the occurrence of
certain stated contingencies.[3] The same contract underwent amendments, the
first effected sometime in January 1984,[4]
and the second, in October 1984.[5]
The facts:
On
On
On
On
Subsequently, the Republic served a Request for Admission[11]
dated
In the meantime, the Republic sought and was later
granted leave to file a Third Amended Complaint[13]
dated October 30, 1991, therein impleading the herein petitioner corporations and two
others[14]
as additional defendants. As alleged, the
newly impleaded sixteen (16) corporations are beneficially owned and are
dummies of the individual defendants.
To the third amended complaint, the other petitioner
corporations filed their respective Answers,[15] which
contained these common allegations: they
are not owned, controlled or were acquired by Marcelo who is merely an officer/stockholder; and that their assets were acquired legally.
Following the filing by the Republic of its Pre-Trial Brief,[16]
Marcelo submitted his own Pre-Trial Brief
With Written Interrogatories, First Set and Request for Admission[17]
(to admit the truth of the matters of fact stated in his August 15, 1991 reply
to the Republic’s June 5, 1991 request for admission). On
Of the written interrogatories and request for
admission thus submitted, the Republic filed an answer[20]
to that of Marcelo’s.
On
¨
There is no genuine issue of fact/cause of
action against him; and,
¨
In his Pre-Trial Brief, he (Marcelo) requested the
[Republic] to admit the truth of the matter of fact related in his
For its part, MFC predicated its motion for summary
judgment on two major points:
¨
Lack of a genuine issue/cause of action against
it; and,
¨
The Republic’s failure and continued refusal to
answer the written interrogatories and reply to the request for admission of certain
facts set forth in its pre-trial brief.
Finally, the other petitioner corporations[22]
submit their entitlement to a summary judgment on practically the same grounds
invoked by Marcelo and MFC vis-à-vis facts embodied in their own pre-trial
brief. Thus, they argue that the matters set forth in their written
interrogatories are deemed established, more particularly the following: that
they: a) are not parties or signatories
to, and were not involved in obtaining the PN-MFC contract in question; b) were
not involved in and did not do any act in securing the approval of direct
payment for the subject boats, in violation of the stipulation in the contract
that payment should be made by Confirmed Irrevocable and Divisible Letter of
Credit (L/C); c) did not receive/collect anything from the Republic and there
is no document showing they ever received anything; and d) were not involved in
the procurement of the alleged aforementioned
foreign loan.
The Republic filed separate Opposition[23]
only to Marcelo’s and MFC’s respective motions for summary judgment, alleging in
refutation to the former’s motion the following:
¨
MFC’s defense of having a personality separate
from that of Marcelo and the other corporations was not raised in Marcelo’s
answer.
¨
The amended complaint alleges that Marcelo and
Ver, taking undue advantage of their influence and relationship, by themselves
and/or in unlawful concert with the Marcos spouses, for unjust enrichment, engaged in schemes and
strategies, including using the other corporations for the above purposes.
¨
That MFC has a personality distinct from Marcelo
is a legal issue, thus trial should not be dispensed with.
¨
The other corporations are merely the “fruits of the ill-gotten
wealth of the individual defendants”;
¨
The case is based on the theory of conspiracy.
Against MFC’s motion for summary judgment, the
Republic advanced the following arguments:
¨
The complaint makes out an allegation that the
other corporations were utilized as “fronts” for the perpetration of the
illegal schemes, devices and “stratagems”;
¨
There is no allegation in the motion for summary
judgment that defendant corporations were not used as a ‘front’ by … Marcelo.
As a matter of fact, Marcelo claims that it was MFC, not himself, which entered
into the contract with the [PN] for the construction of high-speed fiberglass
boats labeled as ‘favored’ in the Third Amended Complaint.
Marcelo and MFC in turn filed their respective Replies[24]
to the opposition entered by the Republic.
Eventually, on
Before discussing the merits of the petition, the
Court deems it appropos to delve into Criminal
Case No. 20224 which involved the subject PN-MFC boat supply contract.
In a Commission on Audit (COA) Report dated P337,700,000.00. The
disbursement, so the report claims, was contrary to pertinent laws and COA
rules governing the disbursement of public funds, such as:
(a)
There was no certificate of availability of funds;
(b)
No performance bond was posted, as required;
(c)
No demand for delivery was made despite failure to
deliver after payment of 80% of the contract price;
(d)
Default provision was not invoked or enforced against
MFC; and,
(e)
Payments were not made in accordance with the terms of
the contract.
On the basis of the COA Report, an Information, docketed as Criminal Case
No. 20224, was filed against Marcelo, then Rear Admiral Simeon Alejandro and
three other PN officials for violation of Sec. 3(e) of the Anti-Graft Law (R.A.
No. 3019, as amended) penalizing as corrupt practice the act of a public
officer and/or the conspiring private individual , inter alia, of causing injury to the
government by giving unwarranted benefits to a private party through evident
bad faith, manifest partiality or gross inexcusable negligence. As alleged, the giving
of unwarranted benefits stems from the disbursement of P337,437,000 to
MFC in partial payment of undelivered 55 units of high speed boats.
Following a review, however, on motion of Alejandro et al., the Ombudsman approved an Order[27]
of April 14, 1999, for the withdrawal of the Information, on the strength of, inter alia,
the ensuing findings of the Special Investigator embodied in the same Order:
Further,
the failure to deliver the boats was for reasons not attributable to MFC.
First, in breach of contractual stipulations, the PN incurred delay in
making the down payments until the foreign exchange crisis supervened.
Second, due to the dollar crisis, the Central Bank (CB) refused to authorize
the opening of … (LCs) to finance the importation of
the boat components. The CB finally authorized the opening of the LCs only two years after the first request was made, and it
was for restricted LCs. Third, when the shipment of
the 55 MTU diesel engines …arrived in the
The
undisputed facts also show that the down payments made by the PN were used
for the importation of boat engines, gearboxes and other components needed
for the construction of the boats, and that the PN could not lawfully demand
the delivery of the boats from MFC since the latter’s obligation to deliver the
boats had not yet arisen.
xxx xxx xxx
Moreover,
a corporation is a distinct juridical entity …. In this case, the party that
entered into the Contract with PN for the construction of speed boats was MFC,
which exclusively assumed …the obligation to put up a performance bond; it was
to MFC that down payments were made by PN…; and it was MFC which, … was solely
obligated to build the boats and deliver them to PN. Under the circumstances,
if MFC committed any culpable act, it alone bears the responsibility therefor.
xxx xxx
xxx
As
discussed earlier, there is … no injury or prejudice to the government. The down
payments made by the PN to MFC …were used to import MTU engines and other boat
parts, which … were seized by the PCGG …. Also, the facts show that no party
received any ‘unwarranted benefits, advantage or preference’ under the
contract. It must be emphasized that none of the down payments or money subject
of this case inured to the benefit of MFC or Marcelo ….
As
no injury or prejudice was caused to the Government and no party received any
unwarranted benefit under the Contract, it is baseless to say that undue injury
was caused or unwarranted benefits given through ‘manifest partiality, evident
bad faith or gross inexcusable negligence.’ xxx the elements of the crime
charged are not present in this case. [28] (Underscoring and words in brackets added)
The main issue
tendered in this joint petition turns on whether or not respondent Sandiganbayan
committed grave abuse of discretion amounting to lack or excess of jurisdiction
in denying the motion
for summary judgment of Marcelo, MFC and the other petitioner corporations.
According to the petitioners, “the pleadings of the parties, and the admissions
and documentary evidence of the [Republic] show that there is no genuine issue
as to any material fact and that [they] are entitled to a [summary] judgment as
a matter of law.”[29]
They thus urgently urge the reversal of the assailed Resolutions and the consequent
dismissal of Civil Case No. 21.
The petition is impressed with merit.
It needs to stress at the
outset that Civil Case No. 21 is one of several suits involving ill-gotten or
unexplained wealth that the Republic, through the PCGG, has initiated. The Court has resolved several similar cases,
establishing in the process doctrinal teachings. As it were, several sub-issues
in the present petition may have already been addressed, if not rendered moot
and academic, in those cases. Accordingly, this petition shall be resolved
taking into stock and in the light of the relevant holdings and doctrines in
those cases, foremost of which is Baseco v. PCGG.[30]
There, the Court made it abundantly clear that the right and duty of the
Government to recover ill-gotten wealth are undisputed. The Court added the
caveat, however, that plain and valid that right may be, a balance must still be
sought to the end that “proper respect
be accorded and adequate protection assured, the fundamental rights of private
property and free enterprise….” Among the things we stressed in
BASECO is the need, in ill-gotten
wealth cases, to give due regard to the basic rights of the parties, with
particular emphasis on the right to
property and the requirement of evidentiary substantiation.
It is the petitioners’ main posture, positing the
propriety of summary judgment in Civil
Case No. 21, that there is no more genuine factual issues to be tried by
the Sandiganbayan, the Republic, for
failing to answer the petitioners’
requests for admission, having already admitted certain vital facts in this case. Excepting, the Republic
counters that the said requests for admission were sufficiently denied by its allegations in the complaint.
In denying the motions for summary judgment, the
Sandiganbayan wrote:
The answers of [the Republic] to the written
interrogatories propounded by … Marcelo indubitably show the existence of
genuine factual issues between the parties, such as, whether or not … Marcelo …
President of [MFC] was the real beneficiary of the amounts collected from the
[Republic] by [MFC] through the alleged favored contract mentioned in the
complaint; and whether or not [MFC] was used as conduit by … Marcelo allegedly
to amass ill-gotten wealth.
It must be stressed that the crucial factual question
that serves as underpinning of the alleged causes of action invoked by the
[Republic] in this case is whether or not the subject contract, including the
amendments, … was a “favored contract”, unlawfully obtained by the defendants
in conspiracy with one another. Corollary thereto, whether or not the other
[petitioner] corporations allegedly owned or controlled beneficially by the
individual defendants were the fruits of
the alleged ill-gotten wealth obtained through the said contract or whether
individual defendants … Marcelo and … Ver acted as
dummies or agents of former President … Marcos in the defendant corporations.
xxx xxx xxx
Incidentally, the instant motions for summary judgment
were filed before the [anti-graft] Court could issue an order under Section 1,
Rule 9[31] of
the Rules of Court relative to the written interrogatories. Moreover, the
factual details alleged and conclusions of fact and law adduced in the said
pleadings largely rely on the terms and conditions of the [favored] contract …
and its amendments which are precisely being questioned … to be a “favored
contract”. From the allegations of the defendants, it is apparent that the
[Republic] extended enormous sums of money …. Even assuming … that the factual
background alleged in the Answer of … Marcelo which was reiterated in the
Answer of [MFC], to be true or to have been established or admitted, still, a
genuine factual issue remains to be tried and that is whether or not the
subject contract … was a “favored contract” … as it appears from the record
that the implementation of its terms, as narrated by the defendants, had
resulted in the expenditure of hundreds of millions of pesos on the part of the
[Republic] without a single delivery having been made or required to be made ….
The factual issue of whether or not the subject contract is a favored one,
which we take to mean as “disadvantageous” to the government, is not settled by
the allegation that the contract was implemented in the midst of a foreign
exchange crisis and that the government failed to comply with the staggered
payments which the government was required to tender before any delivery could
be made by the … [MFC] under the terms
of the contract. For the defendant to invoke the terms of the contract to
excuse the non-delivery of the subject matter thereof simply begs the questions
because the very stipulations of the contract are in issue in this case.[32] (Words in brackets added)
We examine the records and found that summary judgment
is in order. Under Section 3, Rule 35 of the Rules of Court, summary judgment
may be allowed where, save for the amount of damages, there is no genuine issue
as to any material fact and the moving party is entitled to a judgment as a
matter of law. Summary or accelerated judgment is a procedural technique aimed
at weeding out sham claims or defenses at an early stage of the litigation,
thereby avoiding the expense of time involved in a trial. Even if the pleadings
appear, on their face, to raise issues, summary judgment may still ensue as a
matter of law if the affidavits, depositions and admissions show that such
issues are not genuine.[33]
The presence or absence of a genuine issue as to any material fact determines,
at bottom, the propriety of summary judgment. A genuine issue, as opposed to
fictitious or contrived one, is an issue of fact that requires the presentation
of evidence. To the moving party rests the onus of demonstrating the absence of
any genuine issue of fact, or that the issue posed in the complaint is patently
unsubstantial so as not to constitute a genuine issue for trial.[34] In
Estrada v. Consolacion,[35] the Court stated that when
the moving party is a defending party, his pleadings, depositions or affidavits
must show that his defenses or denials are sufficient to defeat the claimant’s
claim. The affidavits or depositions shall show that there is no defense to the
cause of action or the cause of action has no merits, as the
case may be. In fine, in proceedings for summary judgment, the burden of proof
is upon the plaintiff to prove the cause of action and to show that the defense
is interposed solely for the purpose of delay. After the plaintiff discharges
its burden, the defendants has the burden to show facts sufficient to entitle
him to defend.
With the view we take of the case, there is really
no more genuine issues to be tried in this case, the Republic having failed or
refused to answer the requests for admission and the written interrogatories of
the petitioners. As it were, the Republic only answered petitioner Marcelo’s
request for admission or interrogatories. But then the Republic’s answer serves
only to highlight and confirm the fact that petitioner Marcelo’s participation
in all the transactions subject of this case is as President of MFC, [36]
thus:
1.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub-paragraph (d), of the Third Amended Complaint which
reads:
“(d) illegally
securing a loan with a foreign bank with the ‘Guarantee of the Government,’
upon the personal behest of defendant Ferdinand E. Marcos, which loan remains
unpaid to date”
1.1. Was the alleged loan for defendant …
Marcelo personally?
ANSWER:
The loan was for the [MFC] of which … Marcelo is the President, who
stands to benefit from the proceeds of the loan.
1.2. In the affirmative, what documents
indicate that the loan was for defendant …. Marcelo personally?
ANSWER:
The loan was negotiated by … Marcelo in his capacity as President of
[MFC] with the Swiss Bank Corporation. The Monetary Board [in] …
2.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub-paragraph (c), of the Third Amended Complaint which
reads:
“(c)
unlawfully received and collected from plaintiff hundreds of millions of pesos
by way of advances representing 79% of the contract price for the construction
of the aforementioned high-speed fiberglass boats, without, to date, delivering
a single boat to the prejudice and damage of Plaintiff and the Filipino people”
2.1 Was the amount allegedly received and
collected from plaintiff for the personal account of defendant Edward T.
Marcelo?
ANSWER:
The amounts collected from plaintiff were for the account of [MFC] but
only as conduit. The real beneficiary of the amount is … Marcelo. The Contract
to Build…and its Amended Contract…provide that payments should be “by CONFIRMED
IRREVOCABLE, DIVISIBLE LETTER OF CREDIT established in favor of the BUILDER.”
However, payments were made directly to [MFC] as shown in Land Bank application
for Cashier’s Check…;
2.2 In the affirmative, what documents
indicate that the amount allegedly received and collected went to the personal
account of defendant Edward T. Marcelo?
ANSWER:
The defendant, as President of [MFC] stands to benefit from the proceeds
of the amount collected. The Amended Article of Incorporation…shows that …
Marcelo is the President of the Corporation, a wholly owned family corporation.
3.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub-paragraph (b), of the Third Amended Complaint which
reads:
“(b) securing
the approval of direct payments on the above-mentioned contracts, in violation
of the stipulation that payment should be by confirmed, irrevocable and divisible
letter of credit”
3.1 Was the direct payment allegedly secured
for … Marcelo personally?
ANSWER:
The direct payment was secured by defendant as President of [MFC] as
shown in his letter dated P127,710.00.
3.2 In the affirmative, what documents
indicate that the direct payments allegedly secured went to the personal
account of defendant Edward T. Marcelo?
ANSWER:
The defendant, as President of [MFC] stands to benefit from the proceeds
of the direct payments made by plaintiff.
4.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub-paragraph (a), of the Third Amended Complaint which
reads:
“(a)
unlawfully obtaining a favored contract with the [PN] for the construction of
high-speed fiberglass boats at the cost of hundreds of millions of pesos”
4.1 Is … Marcelo personally a party to the
contract referred to by plaintiff?
ANSWER:
Yes, defendant is signatory to the contract as President of [MFC].
Defendant Marcelo’s letter-request…dated
It is basic that a corporation is clothed with a
personality distinct from that of its officers,[38] its stockholders and from other corporations
it may be connected.[39] Under
the doctrine of piercing the veil of corporate existence, however, the
corporation’s separate personality may
be disregarded when the separate identity
is used to protect a dishonest or fraudulent act, justify a wrong, or defend a crime. In such instance,
the wrongdoing must clearly and convincingly be established;[40]
it cannot be presumed.[41]
Absent malice or bad faith, the officer or shareholder cannot be made
personally liable for corporate obligations and cannot be held liable to third
persons who have claims against the corporation.
A reading of the Republic’s
answers to Marcelo’s interrogatories leads us to view, like the Ombudsman,[42]
that there was nothing irregular with
the boat supply contract. Neither were the circumstances leading to the
contract award tainted with irregularity. For, the answers yield nothing more
than a reiteration of mere conclusions of fact stated in the underlying
complaint. The complaint does not even state how the conclusion was arrived at
that Marcelo was the real beneficiary of the amounts collected under the
contract, absent factual averments that would support the same. The Republic’s
argument that since MFC did not allege in its motion for summary judgment that
it is not used as a front by Marcelo, then the two should be treated as one and
the same,[43]
is simply specious. There is no
such principle as “presumption of piercing the veil of corporate fiction.” Nor
could it be simply assumed that by the mere bare allegation or conclusion of
law, in an answer to written interrogatories, that Marcelo is a conduit of the Marcoses, a genuine issue has been created. On this score,
the Sandiganbayan was certainly in error.
As the Court distinctly notes, the complaint in Civil Case No. 21 imputes an unlawful or
at least a highly improper act against petitioner Marcelo in that he obtained a
“favored contract” with the PN, collected hundreds of million of pesos by way
of advances and illegally secured a foreign loan with sovereign guarantee
courtesy of then Pres. Marcos. The complaint, however fails to disclose why the
contract characterization “favored” was, a conclusion of law, as it were. The
Court will go further. The complaint violates fundamental rules of pleading.
For one, it yields a substantial lack of specific averments constituting the
Republic’s cause or causes of action against the petitioners, particularly
Marcelo. In fine, the complaint does not state with definiteness how or in what
specific manner the petitioners committed the alleged illegal and fraudulent
acts so broadly enumerated therein. For another, it is replete with sweeping
generalizations, conclusions of fact and law, and contains inferences derived
from facts that are not found in the complaint. In short, the complaint is an
embodiment, a concrete example, of how one should not prepare a legal
complaint. The Court’s disposition in Remitere v. Montinola Vda. De Yulo[44]
should be enlightening:
It
is not stated anywhere in the complaint why the sale … was absolutely void, nor
were there stated any particular facts or circumstances upon which the alleged
nullity of the sale or transaction is predicated. The averment that "the
public sale … was and still is absolutely a void sale ….” is a conclusion of law or an inference from facts not stated in the
pleading. A pleading should state the ultimate facts essential to the rights of
action or defense asserted, as distinguished from a mere conclusion of
fact, or conclusion of law. An
allegation that a contract is valid or void, as in the instant case, is a mere
conclusion of law.
xxx xxx xxx
Not
being statements of ultimate facts which constitute the basis of a right of the
plaintiffs-appellants, nor are they statements of ultimate facts which
constitute the wrongful acts or omissions of the defendants-appellees
that violated the right of the plaintiffs-appellants the allegations of the complaint in the present case have not fulfilled the requirements of
Section 3, Rule 6 of the … Rules of Court xxx that the complaint should contain
a "concise statement of the ultimate facts constituting the plaintiff's
cause or causes of action”. (Emphasis added.)
It cannot be over-emphasized that the Republic
cannot any more prove malice or wrongdoing on the part of either Marcelo or
MFC, or that the separate corporate identity of MFC was used for unlawful means. For, the Republic
has veritably acknowledged the regularity of the boat-construction contract by
its failure to answer written interrogatories and the request for admission
propounded by petitioner MFC. To be precise, the Republic did not answer the
following written interrogatories[45]
of MFC:
1.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub-paragraph (d), of the Third Amended
Complaint which reads:
(d) illegally
securing a loan with a foreign bank with the ‘Guarantee of the Government,’
upon the personal behest of defendant Ferdinand E. Marcos, which loan remains
unpaid to date”
1.1. Was
there any loan with a foreign bank ever availed of for … Republic… to say that the “loan remains
unpaid to date?
1.2. Who
availed of such loan with a foreign bank?
1.2. When
was such loan with a foreign bank availed of?
1.3. How
much of such loan with a foreign bank was availed of?
1.4. What
is the name of the foreign bank from which such loan was secured and availed
of?
1.5. Why
was the loan with foreign bank secured?
1.6. In
1982, what were the loan options proposed by the Republic[’s]… Philippine
National Bank for
1.7. In
1983, without a long term foreign loan to pay for the letter of credit which …
[the] … [PN] was to open with …[the] Land Bank of the Philippines, was
plaintiff Republic[’s]… Central Bank of the
1.8. What
specific provision of law in 1982 was violated for
1.9. Who
required and why was the “Guarantee of Government” secured for the loan with a
foreign bank?
1.10. In 1982, without the guarantee of
the Republic[’s]… National Government, was plaintiff Republic’s… own [PNB] Bank
willing to lend plaintiff Republic[’s]… own [PN] the amounts to pay for the
latter’s opening of a domestic/deferred letter of credit in favor of defendant [MFC]?
1.11. In 1982, who in … [the] National
Government has power to approve the issuance
of … [the] National Government’s guarantee of a loan?
1.12. In 1982, in what a particular form,
document or writing should the approval
of the issuance of
2.0 Regarding the “Specific Averments of Illegal
Acts” in paragraph 11, sub- paragraph
(c), of the Third Amended Complaint which reads:
“(c)
unlawfully received and collected from Plaintiff hundreds of millions of
pesos by way of advances representing 79% of the contract price for the
construction of the aforementioned high-speed fiberglass boats, without, to
date, delivering a single boat to the prejudice and
2.1. How
much exactly was received and collected from
2.2 Who
among the defendants received and collected such amount?
2.3. What
does
2.3.1.Were the amounts received and
collected borrowed from plaintiff Republic…?
2.3.2. If they were borrowed, what are
the loan documents evidencing the loan?
2.3.3. If they were not borrowed, why
were they received and collected from
2.4. In
its P425.7 Million to P926.524
Million. This was the agreement in
November 1985. What is the “contract price”
2.4.1. Under the June 1983 amendment to
the contract, the parties agreed that “the foreign exchange risk shall be for
the account of the P425.7 Million in June 1982 at the
exchange rate of P8.00 to US$1.00, what is the additional amount assumed
by the P18.00 to US$1.00?
2.5. What
are the pre-conditions for the delivery by defendant [MFC] of any boat under
the contract?
2.6. Which
of these preconditions have been satisfied for
2.7. Article
VIII, part B, of the contract stipulates that “delivery of the boats shall be
effected” provided that … [PN] shall have fulfilled all its obligations as
stipulated in this contract.” Has
2.8. Article
XIII, part A of the contract signed and executed on
“
2.8.1. How
many payments were received by defendant [MFC] from
2.8.2. On
what dates were each of such payments received?
2.8.3. What
were the amounts received on each of such dates?
2.8.4. How many years, months and/or days
had elapsed from
2.8.5. How many years, months and/or days
had elapsed before or after
2.8.6. What percentage of the adjusted
contract price of P926.524 Million was received in each of the payment
was received?
2.9. Article
XIII, part A, of the contract further stipulates and obligates plaintiff
Republic… to open a ‘CONFIRMED, IRREVOCABLE, DIVISIBLE LETTER OF CREDIT” in favor
of defendant Marcelo Fiberglass Corporation.
2.9.1. When did
2.9.2. What
efforts did
2.10. Article
X, part A, of the contract further provides:
“If,
at any time, either the construction of the boat, or any performance required
hereunder as a prerequisite to the delivery of the boat, is delayed due to acts
of state, xxx by destruction of the shipyard xxx by fire and/or other causes
beyond the control of either contracting
party, the time of delivery of the boat under this Contract shall be extended
for a period of time corresponding to the duration and cause of such events.”
2.10.1. Was
not the construction of the boats and a prerequisite to the delivery of the
boats delayed by an act of state or by cause beyond the control of defendant [MFC] when the state, plaintiff
Republic…, paid the 20% of the original contract price, intended for the
engines, gear boxes, fiberglass materials, radar and communication equipment of
the boats, only in November 1985 or almost three years past due and when the
contract price to be paid had increased because of the change foreign exchange
rate?
2.10.2. Was
not the construction of the boats and a prerequisite to the delivery of the
boats delayed by an act of state and by cause beyond the control of defendant [MFC]
when the state, plaintiff Republic… never delivered the full 20% of the
increased contract price intended for the very engines, gear boxes, fiberglass
materials, radar and communication equipment of the boats?
2.10.3. Was
not the construction of the boats delayed by an act of state or by cause beyond
the control of defendant [MFC] …when the Central Bank …. from 1982 to 1986,
because of the dollar crisis which was aggravated by the murder of Senator Benigno S. Aquino on 21 August
1983, refused or could not provide the foreign exchange necessary for … [MFC]
to import the engines, gear boxes, fiberglass materials and radio and
communications equipment for the boats?
2.10.4. Was
not a prerequisite to the delivery of the boats delayed by an act of state or
by cause beyond the control of defendant [MFC] when the State,
2.10.5. Was
not the construction of the boats further delayed by an act of state or by
cause beyond the control of defendant [MFC] when the state, plaintiff Republic…, sequestered on 17 February 1987
all assets of … [MFC], padlocked its offices and shipyard/plant, and barred
entry by anyone thereto up to this day?
2.10.6. Was
not the construction of the boats further delayed by an act of state or by
cause beyond the control of defendant [MFC] when the State,
2.10.7. Considering
that the foregoing causes of the delay in the construction of the boats and
delay in the prerequisite to the delivery of the boats, most of which are still
existing up to this day, is not the extension of time granted in the contract
for the delivery of the boats still continuing?
xxx xxx xxx
3.2. Is such direct payment in violation of the
stipulation in the amended contract of June 1983 which allows the payment of
the 30% downpayment either by bank draft or [L/C]?
xxx xxx xxx
3.3.
Is
“The Office of Budget and Management
(OBM) released the amount of P127.71 M.
representing the 30% downpayment required in
the contract. The amount was
subsequently paid to MFC to save for the government front-end fee and other
bank charges amounting to P1,915,650.00”
3.4. Does plaintiff Republic… know that,
for the reason stated by its own Defense Ministry, it was itself who requested
defendant [MFC] to accept payment and that the latter merely acceded to the
request?
3.4. Who “secured” the approval of, and
who “approved”’ the direct payments?
3.4.1. What is the basis of
xxx
4.1. What does
4.1.2. What circumstances made the contract
being referred to a “favored” one?
4.2. What specific provision of law was
violated for
4.2.1. Is obtaining the contract “unlawful”
because it is a “favored” one?
4.2.2. Or, is the contract “favored” because
obtaining it is “unlawful”?
4.2.3. What is the reason for the answers to
the two preceding questions?
4.3. Without using “unlawful” “favored” or
words of similarly sweeping conclusionary import,
what is wrong with “obtaining that contract with the [PN] for the construction
of high speed fiberglass boats at the costs of hundreds of millions of pesos”?
4.4. What
did plaintiff Republic…, its then Ministry of National Defense, its [AFP] and
its [PN] do to the offer made in 1979 by defendant [MFC] to construct the boats
required by the [PN] until the contract was signed on 18 June 1982?
4.5. What
did plaintiff Republic…, its then Ministry of National Defense, its [AFP], and
its [PN] do to comply with the contract entered into on 18 June 1983 up to the
time defendant [MFC] was sequestered in February 1987?
4.6. With
its sovereignty and all resources and powers …, what efforts did plaintiff
Republic… exert to know what itself, its then Ministry of National Defense, its
[AFP] and its [PN] did within the periods of almost four (4) years each
referred to in the two preceding questions?” (Words in brackets added.)
The
Republic did not also answer the written interrogatories of the other defendant
corporations. In effect, the Republic admitted the non-participation of the
other defendant corporations in the contracts in question. This is evident from the following written
interrogatories which were deemed admitted by the Republic:
1.1. What
is the specific involvement of, or the specific acts done by, each of the other
Defendant Corporations in securing the alleged loan?
xxx xxx xxx
2.1. How
much exactly was received and collected by each of the Other Defendant
Corporations from plaintiff?
2.2. When
did each of the Other Defendant Corporations receive the amounts allegedly
received from plaintiff, if any?
2.3. What
documents indicate that each of the Other Defendant Corporations received such
amount allegedly received from plaintiff?
xxx xxx xxx
4.1. Which
of the other defendant corporations is a party or signatory to the contract
referred to by plaintiff?
4.2. What
is the specific involvement of, or the specific acts done by, each of the other
defendant corporations in obtaining the contract referred to by plaintiff?”
The Republic cannot plausibly
evade the consequences of its failure to answer written interrogatories and
requests for admission. If the
plaintiff fails or refuses to answer the interrogatories, it may be a good
basis for the dismissal of his complaint for non-suit unless he can justify
such failure or refusal.[46]
To be sure, the Rules of Court prescribes the
procedures and defines all the consequence/s for refusing to comply with the
different modes of discovery. The case of Republic v. Sandiganbayan,[47]
a case for recovery of ill-gotten wealth
where the defendants
served upon the
PCGG written
interrogatories but the latter refused to make a discovery, is
relevant. Some excerpts of what the Court said thereat:
The message is
plain. It is the duty of each contending party to lay before the court the
facts in issue--fully and fairly; xxx
Initially,
that undertaking of laying the facts before the court is accomplished by the
pleadings filed by the parties;…
"ultimate facts" are set forth in the pleadings; xxx. The law says
that every pleading "shall contain in a … concise and direct statement of
the ultimate facts on which the party pleading relies for his claim or defense,
as the case may be, omitting the statement of mere evidentiary facts."
Parenthetically,
if this requirement is not observed, i.e.,
the ultimate facts are alleged too generally or "not averred with
sufficient definiteness or particularity to enable x x
(an adverse party) properly to prepare his responsive pleading or to prepare
for trial," a bill of particulars seeking a "more definite
statement" may be ordered …. xxx.
The truth is that "evidentiary
matters' may be inquired into and learned by the parties before the trial.
Indeed, it is the purpose and policy of the law that the parties - before the
trial if not indeed even before the pre-trial - should discover or inform
themselves of all the facts relevant to the action, not only those known to
them individually, but also those known to their adversaries; in other words,
the desideratum is that civil trials should not be carried on in the dark; and
the Rules of Court make this ideal possible through the deposition-discovery
mechanism set forth in Rules 24 to 29. xxx
xxx xxx xxx.
In line with
this principle of according liberal treatment to the deposition-discovery mechanism,
such modes of discovery as (a) depositions … under Rule 24,(b) interrogatories
to parties under Rule 25, and (c) requests for
admissions under Rule 26, may be availed of without leave of court, and generally, without court
intervention. The Rules of Court explicitly provide that leave of court is not
necessary to avail of said modes of discovery after an answer to the complaint
has been served. xxx.
On the other
hand, leave of court is required as regards discovery … in accordance with Rule
27, or … under Rule 28, which may be granted upon due application and a showing
of due cause.
To ensure that availment
of the modes of discovery is
otherwise untrammeled and efficacious,
the 'law imposes serious sanctions on the party who refuses to make discovery,
such as dismissing the action or proceeding or part thereof, …; taking the matters inquired into as
established in accordance with the claim of the party seeking discovery;
refusal to allow the disobedient party support or oppose designated claims or defenses;
xxx
xxx xxx xxx
.
One
last word. xxx all that is entailed to activate or put in
motion the process of discovery by interrogatories to parties under Rule 25 of
the Rules of Court, is simply the delivery directly to a party of a letter
setting forth a list of questions with the request that they be answered
individually. That is all. The service of such a communication on the party has
the effect of imposing on him the obligation of answering the questions
"separately and fully in writing under oath," and serving "a
copy of the answers on the party submitting the interrogatories …" The
sanctions for refusing to make discovery have already been mentioned. So, too,
discovery under Rule 26 is begun by nothing more complex than the service on a
party of a letter or other written communication containing a request that
specific facts therein set forth … be admitted in writing. That is all. Again,
the receipt of such a communication by the party has the effect of imposing on
him the obligation of serving the party requesting admission with "a sworn
statement either denying specifically the matters of which an admission is
requested or setting forth in detail the reasons why he cannot truthfully
either admit or deny those matters," failing in which "(e)ach of the matters
of which admission is requested shall be deemed admitted." xxx.
(emphasis supplied)
While earlier
touched upon, other considerations obtain which should have impelled the
Sandiganbayan to grant the motion for summary judgment. We refer to the defect
in the Republic’s complaint itself. We start with the very PN-MFC contract
itself which served as the main prop of the Republic’s case. There is no dispute that the Republic did not
attach to its complaint a copy of what it claims to be a “favored contract,” let alone set out therein the relevant terms and
conditions of the contract, or pertinent averments as would show, in general,
why the same is unlawful or grossly disadvantageous to the State as would merit
the tag “favored.” The rule obtains that when a claim is based on a written
instrument or document, the substance of such instrument or document shall be
set forth in the pleading, and the original or a copy thereof shall be attached
to the pleading as an exhibit which shall be deemed to be a part of the
pleading, or said copy may with like effect be set forth therein:[48]
"SECTION
7. Action or defense based on document. —
Whenever an action or defense is based upon a written instrument or document,
the substance of such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be attached to the pleading
as an exhibit, which shall be deemed to be a part of the pleading, or said copy
may with like effect be set forth in the pleading."
The record reveals that it was petitioner Marcelo no less who brought out
the contract first, as an attachment to his Answer.
On the alleged illegal advances, the particulars
on the matter
are not alleged; the circumstances that
would justify its conclusion that either petitioner Marcelo or MFC received the 79%
monetary equivalent of the contract
without delivering a single boat could not be found. Again, the specific
information was volunteered by Marcelo himself in his answer.
As to the allegation that the petitioners “secured a loan with a foreign bank with the
guarantee of the government, upon the personal behest of defendant Ferdinand
Marcos, which loan remains unpaid to date,” a copy of the alleged loan
document is not appended to the complaint. Neither is there a reference to the
pertinent provisions of the loan agreement made in the complaint, nor were the circumstances surrounding the
alleged incurring of the obligation enumerated. This is material in the sense
that the petitioners deny that there was any loan at all obtained.
On the allegation that petitioners secured the approval of direct payments on
the alleged “favored boat supply contract” in violation of the stipulation that
payment should be by “confirmed, irrevocable and divisible letter of credit,”
the existence of a cause of action based on the allegation could not be
determined since a copy of the contract was not attached to the complaint, nor
was there made a reference to the particular stipulation claimed to have been
violated.
With respect to the allegation that the petitioners acted as dummies, nominees or agents of
“Ferdinand E. Marcos in corporations such as the Philippine Casino Operators
Corporation, beneficially owned and/or controlled by the latter,” it is
noted that allegation partakes of a conclusion of fact unsupported by a
particular averment of circumstances that will show why such inference or
conclusion was arrived at. In this regard, we are reminded of the Court’s
ruling in Republic v. Sandiganbayan:[49]
Under
paragraph 6-A of the Amended Complaint, the Companies alleged to be
beneficially owned or controlled by defendants Lucio
Tan, Ferdinand and Imelda Marcos and/or the other individual defendants were
identified and enumerated, including herein corporate respondents. But except for this bare allegation, the
complaint provided no further information with respect to the manner by which
herein corporate respondents are beneficially owned or controlled by the
individual defendants. Clearly, the allegation is a conclusion of law that is
bereft of any factual basis.
(emphasis supplied)
To stress, the Rules of Court require every pleading
to “contain in a methodical and logical
form, a plain, concise and direct statement of the ultimate facts on which the
party pleading relies for his claim or defense.”[50]
A transgression of this rule is fatal. [51]
In view of the absence of
specific averments in the Republic’s complaint, the same is defective for it
presents no basis upon which the court should act, or for the defendant to meet
it with an intelligent answer.[52]
The complaint, to stress, did not present
the very documents claimed to be the source of the Marcelo-Marcos vinculum: it did not attach the alleged
boat supply contract which is the main cause of action against the petitioners;
the unpaid loan document from which another claimed cause of action arose; and
other relevant documents and information. The Republic tags, at every turn, the
PN-MFC contract to be a “favored contract,” without, however, so much as stating
with sufficient particularity the circumstances that led it to arrive at such
conclusion.
The foregoing is nonetheless
true with respect to the case against the other petitioner corporations (except
MFC). There is no cause of action against them. Not only because the complaint does
not, as to them, spell out specific illegal acts and omissions committed
by them, but also on account of our
ruling in Republic v. Sandiganbayan,[53] or what subsequent opinions would later refer to as The Final Dispositions case, which
proscribes their being impleaded in the case. Thus:
As regards actions in which
the complaints seek recovery of defendants' shares of stock in existing
corporations (e.g., San Miguel Corporation, etc.) because (they were) allegedly
purchased with misappropriated public funds,… the impleading
of said firms would clearly appear to be unnecessary. If warranted by the
evidence, judgments may be handed down against the corresponding defendants
divesting them of ownership of their stock, the acquisition thereof being
illegal and consequently burdened with a constructive trust, and imposing on
them the obligation of surrendering them to the Government.
Quite the same thing may be
said of illegally obtained funds deposited in banks. The impleading
of the banks would also appear unnecessary. xxx.
xxx xxx xxx
And as to corporations
organized with ill-gotten wealth, but are not guilty of misappropriation, fraud
or other illicit conduct — in other words, the companies themselves are the
object or thing involved in the action, the
res thereof — there is no need to implead them either. Indeed, their impleading
is not proper on the strength alone of having been formed with ill-gotten
funds, absent any other particular wrongdoing on their part. The judgment
may simply be directed against the shares of stock shown to have been issued in
consideration of ill-gotten wealth.
Such showing of having been
formed with, or having received ill-gotten funds, however strong or convincing,
does not, without more, warrant identifying the corporations in question with
the persons who formed or made use of them to give the color or appearance of
lawful, innocent acquisition to illegally amassed wealth — at the least, not so
as (to) place on the Government the onus of impleading
the former together with the latter in actions to recover such wealth. xxx. In
this light, they are simply the res in the actions for the recovery of illegally acquired
wealth, and there is, in principle, no cause of action against them and no
ground to implead them as defendants in said actions.
The Government is, thus, not
to be faulted for not making such corporations defendants in the actions
referred to. It is even conceivable that had this been attempted, motions to
dismiss would have lain to frustrate such attempts. (Underscoring supplied)
It does not escape our notice
that, in line with our ruling in Republic
immediately adverted to, petitioner corporations were perhaps not originally
impleaded because it was unnecessary, they being perceived to have been formed with ill-gotten wealth. As
against them, there is no cause of action other than that they constitute the res of the
action. However, the fact that they were subsequently impleaded
in Civil Case No. 21 could only mean
that a cause of action exists against them, one that must be specifically
alleged in the amended complaint. It appears, however, that their inclusion was
made without the corresponding insertion of general or specific averments of
illegal acts they are alleged to have committed as should constitute the cause
of action against them. It may not be said that those general and specific
averments already existing in the complaint before the amendment apply to them,
because they refer only
to the boat
building contract, a transaction for which only Marcelo
and MFC have been specifically made answerable.
The Republic’s argument in
their Opposition to the Motions for Summary Judgment that the Final Dispositions case suggested that
the other petitioner corporations should be impleaded
does not commend itself for concurrence. On the contrary, we categorically
ruled therein that their impleading is not at all
proper.
In all then, we hold that the Sandiganbayan committed
grave abuse of discretion in denying the petitioners’ separate motions for a
summary judgment. To us, the petitioners were entitled to a summary judgment owing
to the interplay of the following premises:
1. The Republic’s complaint, as couched and presented to the Sandiganbayan does not contain concise and direct statement of the ultimate facts on which it relies for its claim against petitioners Marcelo and MFC. Worse still, it does not specify the act or omission by which the other petitioners wronged the Republic. In net effect, the complaint no less does not present genuine ill-gotten wealth issue; and
2. In view of the Republic’s failure to respond to MFC’s
interrogatories, the Republic veritably conceded the regularity of the PN-MFC
contract, that no wrongdoing was committed vis-à-vis
the conclusion of that contract and that the separate personality of MFC was
not used for unlawful means to activate the piercing of corporate veil
principle. The questions in the interrogatories were simple and direct and the
answers thereto would have constituted the fact/s sought to be established. We
do not see any reason why the Republic could not have answered them. They refer
to relevant matters that could clarify the important facts left out by, to
borrow from Republic v. Sandiganbayan,[54]
the “roaming generalities in the complaint.”
Assume the element of regularity and the bona fides of the transaction and no
genuine issue as to any material fact would come into fore.
With the foregoing disquisitions, each of the petitioners’
counterclaim for damages need not detain us long. Suffice it to state that
resolution thereof entails factual determination which is not proper in a certiorari proceeding.
WHEREFORE, the
instant petition is GRANTED and the Resolutions
of the Sandiganbayan dated
No pronouncement as to costs.
SO ORDERED.
CANCIO C. GARCIA
Associate
Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
|
ANGELINA SANDOVAL-GUTIERREZ Associate Justice |
RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA
Associate Justice
C
E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, I certify 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] Penned by Associate Justice Teresita Leonardo-de Castro, with Associate Justices Anacleto D. Badoy, Jr. and Ricardo M. Ilarde (both retired), concurring; rollo, pp. 104-120.
[2] Penned by Associate Justice Godofredo L. Legaspi, with Associate Justices Raoul V. Victorino and Rodolfo G. Palattao, Sr., concurring; rollo, pp. 123-125.
[3]
[4]
[5]
[6]
[7] The complaint was actually thrice amended, the first filed before a responding pleading could be filed.
[8] Answer to the Second Amended Complaint; rollo, p. 194.
[9]
[10]
[11] It was not formally annexed to the petition.
[12] Rollo, pp. 326 et seq.
[13]
[14] Philippine Smelters Corp. and Marcelo Tire and Rubber Co., Inc.
[15] Rollo, pp.
362 et seq.; pp. 365 et seq.
[16]
[17]
[18]
[19]
[20]
[21]
[22] Per the Sandiganbayan, four defendant corporations did not join in the motion for summary judgment.
[23] Rollo, pp. 518 et seq., and 531 et seq.
[24]
[25] Supra note 1.
[26] Supra note 2.
[27] Rollo, pp. 664 et seq.
[28]
[29]
[30] G.R. No. L-75885,
[31] SECTION
1. Defenses and objections not pleaded.-
Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. xxx
[32] Resolution
dated
[33] Carcon Development Corporation v. CA, G.R. No.
88218,
[34] Evadel Realty and Development Corporation v. Soriano, G.R. No. 144291,
[35] G.R.
No. L-40948,
[36] Pre-Trial Brief with Written Interrogatories First Set and Request for Admission of Marcelo, Annex “n” of Petition, rollo, pp. 375 et seq.; See also pp. 7-8 Sandiganbayan Resolution of August 27, 2001, rollo, pp. 110-111.
[37] Rollo, p. 375.
[38] Lafarge
Cement Phil., Inc.v.Continental Cement Corp.,
G.R. No. 155173,
[39] Concept
Builders, Inc. v. NLRC, G.R. No.
108734,
[40] Secosa v. Heirs of Francisco, G.R. No. 160039,
[41] Matuguina Integrated Wood Products v. Court of Appeals, G.R. No. 98310,
[42] Supra note 27.
[43] Rollo, p. 532.
[44] G.R. No. L-19751,
[45] Pre-Trial Brief for MFC, Annex “O” of the Petition, rollo, pp. 381 et seq.
[46] Santiago Land Development Company v. Court of Appeals, G.R. No. 103922, July 9, 1996, 258 SCRA 535.
[48] Rule 8, Sec. 7, 1964 Revised Rules of Court.
[49] G.R. No. 115748,
[50] Rule 8, Sec. 1.
[51] Republic
v. Sandiganbayan, G.R. No. 92594,
[52] Republic v. Sandiganbayan, supra.
[53] G.R.
No. 96073,
[54] Supra note 51.