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Digest Author: Dodot

Republic v. Sandiganbayan (2003) Petition: Certiorari Petitioners: Republic of the Philippines Respondent: Honorable Sandiganbayan (Special First Division), Ferdinand E. Marcos (Represented by his Estate/Heirs: Imelda R. Marcos, Maria Imelda [Imee] Marcos-Manotoc, Ferdinand R. Marcos, Jr. and Irene Marcos-Araneta) and Imelda Romualdez Marcos Ponente: J. Corona Date: 15 July 2003 Case statement: Petition for certiorari [Rule 65] seeking to (1) set aside the Resolution dated 31 Jan 2002 issued by the Special First Div. of the Sandiganbayan, and reinstate the earlier decision dated 19 Sep 2000 which forfeited in favor of the Republic of the Philippines the amount held in escrow in the Philippine National Bank in the aggregate amount of $658M as of 31 Jan 2002. Facts:

17 Dec 1991 Republic, through PCGG, filed petition for forfeiture before the Sandiganbayan o Pursuant to RA 1379 (Forfeiture of property unlawfully acquired by public officer/employee), in relation to EO 1 (created PCGG, for recovery of ill-gotten booty from Marcos, his family, relatives, and close associates), EO 2 (Warning those knowledgeable about ill-gotten properties not to conceal, transfer, or dissipate the properties and not to frustrate/obstruct govts recovery of the properties), EO 14, and EO 14-A (vested Sandiganbayan with the exclusive and original jurisdiction over cases to be filed by the PCGG). o Total amount involved: $356M (including interest, presently valued at $658M), deposited in escrow at PNB Previously held by a set of accounts set up for alleged Marcos dummy corporations/foundations o Before pre-trial, Global Settlement executed by Marcoses and then-PCGG Chair Gunigundo 18 Oct 1996 Republic filed Motion for summary judgment o Rejected by Sandiganbayan: motion to approve compromise agreement took precedence [eventually, however, the Marcos side backed away from the agreement] 26 May 1998 Imelda Marcos issued filed manifestation that she was not party to motion of approval of Compromise Agreement; that she owned 90% of the funds, w/ the remaining belonging to the Marcos Estate. 10 Mar 2000 Republic filed another Motion for summary judgment, citing that o Essential facts that warrant forfeiture [RA 1379] admitted by respondents in their pleadings/submissions 19 Sep 2000 After hearing, Sandiganbayan Decision granted motion for summary judgment o No issue/fact calls for presentation of evidence o Swiss deposits [now in escrow in PNB] deemed unlawfully acquired as ill-gotten wealth 31 Jan 2002 In a resolution, Sandiganbayan reversed Sep 2000 Decision, denied motion for summary judgment o Evidence did not prove that the money in the Swiss Banks belonged to the Marcoses o No basis for forfeiture o Case set for further proceedings Republic then filed current petition.

Pertinent laws/provisions/concepts: Secs. 1 & 2, Rule 35, RoC Sec. 1. Summary judgment for claimant.A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time, after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any parts thereof. Sec. 2. Summary judgment for defending party. A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof. Sec. 10, Rule 8, RoC

Specific denial. A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is true and material and shall deny only the remainder. Where a defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state, and this shall have the effect of a denial. Sec. 11, Rule 8, RoC

Digest Author: Dodot

Allegations not specifically denied deemed admitted.Material averment in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. Allegations of usury in a complaint to recover usurious interest are deemed admitted if not denied under oath. Secs. 2 & 6, RA 1379

Section 2. Filing of petition. Whenever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully acquired. Section 6. Judgment. If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the property in question, then the court shall declare such property, forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become property of the State: Provided, That no judgment shall be rendered within six months before any general election or within three months before any special election. The Court may, in addition, refer this case to the corresponding Executive Department for administrative or criminal action, or both. Sec. 13, Art. VII, 1987 Consti. Similar to Sec. 4(2), Art. VII, 1973 Consti.

Section 13. The President, Vice-President, the Members of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure. They shall not, during said tenure, directly or indirectly, practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. The spouse and relatives by consanguinity or affinity within the fourth civil degree of the President shall not, during his tenure, be appointed as Members of the Constitutional Commissions, or the Office of the Ombudsman, or as Secretaries, Undersecretaries, chairmen or heads of bureaus or offices, including government-owned or controlled corporations and their subsidiaries. Issues: 1. 2. 3. 4.

Is an action for certiorari [Rule 65] proper? [Yes] Is summary judgment proper? [Yes] Has the petition for summary judgment been filed within the time limit specified? [Yes] Is forfeiture of the contested accounts the proper action? [Yes] Relevant to Heading

Ruling/Ratio Decidendi: 1. YES. (Court will treat the case as an exception to the general rule.) Ingrained with immense public interest, deep historical repercussions certiorari allowed notwithstanding the

existence and availability of the remedy of appeal.

2. YES. (Conditions for summary judgment set by Sec. 1, Rule 35, RoC have been met.) Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. Secret deposits in Swiss banks 5 known identified accounts, wilth balances totaling $656M Marcos pattern: (Dissenting Opinion of Sandiganbayan J. Villaruz, Jr.) o Creating foundations o Use of pseudonyms & dummies o First and Second beneficiaries, Ferdinand and his family o Opening of bank accounts for foundations o Changing the names of foundations o Transferring funds/assets from one foundation to another o Liquidation of foundations

Ferdinands and Imeldas income as public officials Cited sources (1965 to 1984) o Official Salaries, P2,627,581 o Legal Practice, P11,109,836 Note: these were reported as receivables from prior years [this had to be done because Ferdinand was barred from practicing during his presidency] If this is true, Ferdinand was still receiving payments for legal services done in the past, 20 years later Prior to 1965, however, Ferdinand did not indicate that he was receiving any fees from legal practice at all There are no known Marcos legal clients, as there is no known Marcos law office o Farm Income, P149,700 o Others, P2,521,325 o TOTAL, P16,408,442 Prior to 1965, Marcos net worth was P120,000

Digest Author: Dodot

Respondents defense Answers to facts raised by Republic were limited to ADMIT, DENY without presenting any evidence to support the admission or denial. Genuine issue of fact: calls for presentation of evidence: lack of knowledge for lack of privity, inability to recall because it happened a long time ago, the funds were lawfully acquired these are insufficient to tender genuine issues. Respondents, thus, did not provide specific denial [Sec. 10, Rule 8, RoC] in answer to specific allegations o Ex. lawfully acquired but Imelda never detailed how the funds in question were lawfully acquired Respondents also gave negative pregnant [denial pregnant with the admission of the substantial facts in the pleading] o Ex. On the charge that the Marcoses stashed countrys wealth in Switzerland -- > the response was, the truth being, the Respondents aforementioned said practices were lawfully acquired. o Allegations not specifically denied are deemed admitted [Sec. 11, Rule 8, RoC] Respondents did not enumerate and describe the documents consisting their evidence 3. YES. The petition for summary judgment may be filed anytime after the respondent/s has been filed at any subsequent stage of the litigation. (Even if/when the petitioner has agreed to proceed to trial.) Sec. 1 & 2, Rule 35, RoC Estoppel by laches [precludes a party from bringing an action when the party knowingly failed to claim or enforce a legal right at the proper time] is not applicable o Petitioner was never remiss in pursuing its case: rather, it was the intervening event [pending compromise agreement] that cause the gap between the two petitions for summary judgment


YES. Pursuant to Secs. 2 & 6, RA 1379, two facts must be established to justify forfeiture: o Ownership by the public officer of money/property acquired during his incumbency whether in his name or otherwise o That the same money/property is grossly disproportionate to his legitimate income Lawful income of Marcos spouses: approx. $304,372 o Note that legitimate income of the president is very limited: he/she cannot receive any other emolument from Govt [1935 Consti] or Govt and any other source [1973 Consti.] o Under 1973 Consti., outside employment and management of businesses strictly prohibited. [Secs. 4(2), Art. VII; Sec.. 7, Art. IX] o Respondents had argued that other sources of lawful income had not been considered but did not provide any specifics Respondents own judicial admission of their ownership of the assailed properties on record o Qualified acquisition of Swiss bank deposits [Ours, but legitimately acquired] o Failure of Imelda to deny under oath the genuineness of the various actionable documents bearing her signature o Participation in crafting of proposed General Agreement [willingness to enter into a compromise involving the assailed properties] that the General Agreement was later discarded is inconsequential o Manifestation of Imelda that she owned 90% of the assailed properties o Concern over the potential dissipation/misappropriation: indicative of personal interest in the properties Respondents unable to show that they had lawfully acquired the assailed properties = FORFEITURE. [Sec. 6, RA 1379]

Decision: Petition granted. Assailed Resolution Set Aside. Swiss deposits in escrow in PNB forfeited in favor of Republic of the Philippines. Dissenting Opinion: None. Principles: The Executive Department The President Privileges and Salary Presidents compensations are limited to the official salary that they get. During their tenure, they cannot practice any other profession, participate in any business, etc., to avoid conflict of interest.