EN BANC

[G.R. No. 152154. November 18, 2003]

REPUBLIC
OF
THE
PHILIPPINES, petitioner,
vs. 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, respondents.
RESOLUTION
CORONA, J.:
Before us are motions dated August 1, 2003, August 2, 2003 and August 25,
2003 of respondents Imelda R. Marcos, Irene Marcos-Araneta, Ma. Imelda Marcos
and Ferdinand R. Marcos, Jr., respectively, seeking reconsideration of our decision
dated July 15, 2003 which ordered the forfeiture in favor of the Republic of the
Philippines of the Swiss deposits in escrow at the Philippine National Bank (PNB) in
the estimated aggregate amount of US$658,175,373.60 as of January 31, 2002.
Respondent Imelda Marcos, in her motion for reconsideration, asks this Court to
set aside the aforesaid decision dated July 15, 2003, premised on the following
grounds:
I
THE DECISION OF THIS HONORABLE COURT EFFECTIVELY
DEPRIVED RESPONDENT OF HER CONSTITUTIONALLY ENSHRINED
RIGHT TO DUE PROCESS ON THE FOLLOWING GROUNDS:

D. EVEN ASSUMING THAT THE PROSECUTION WAS ABLE TO

ESTABLISH A PRIMA FACIE CASE, A SUMMARY JUDGMENT
CANNOT BE RENDERED IN FORFEITURE PROCEEDINGS.
RESPONDENT HAS THE RIGHT TO BE GIVEN THE OPPORTUNITY
TO OVERTHROW THE DISPUTABLE PRESUMPTION.
E. THE FACTUAL FINDING THAT THE FOUNDATIONS INVOLVED IN
THE INSTANT FORFEITURE PROCEEDINGS ARE CONSIDERED
BUSINESSES, AND WERE MANAGED BY RESPONDENT
TOGETHER WITH HER LATE HUSBAND, WILL PERNICIOUSLY
AFFECT THE CRIMINAL PROCEEDINGS FILED BY THE REPUBLIC
AGAINST RESPONDENT.
II
THE DECISION OF THE SUPREME COURT, WHICH IMPROPERLY
CONVERTED THE SPECIAL CIVIL ACTION INTO A REGULAR APPEAL,
DIVESTED RESPONDENT OF HER RIGHT TO APPEAL THE CASE ON
THE MERITS, THEREBY DEPRIVING HER OF DUE PROCESS.
A. THE RESOLUTION DATED 31 JANUARY 2002 RAISED BEFORE
THIS HONORABLE COURT ON A PETITION FOR CERTIORARI,
WAS OBVIOUSLY A MERE INTERLOCUTORY ORDER. THE
DECISION OF THIS HONORABLE COURT SHOULD NOT HAVE
DELVED ON THE MERITS OF THE CASE, IN DIRECT VIOLATION
OF RESPONDENTS RIGHT TO APPEAL, WHICH IS EXPRESSLY
CONFERRED BY THE RULES.
Respondent Imelda Marcos further alleges that our July 15, 2003 decision will
prejudice the criminal cases filed against her.
Respondents Ferdinand, Jr. and Imee Marcos also pray that the said decision
be set aside and the case be remanded to the Sandiganbayan to give petitioner
Republic the opportunity to present witnesses and documents and to afford
respondent Marcoses the chance to present controverting evidence, based on the
following:
I

A. FORFEITURE PROCEEDINGS UNDER R.A. 1379, IN RELATION TO

THE EXECUTIVE ORDERS ARE CRIMINAL/PENAL IN NATURE,
HENCE, RESPONDENT HAS ALL THE RIGHTS IN FAVOR OF THE
ACCUSED
UNDER THE
CONSTITUTION; AND
THE
PROSECUTION HAS THE BURDEN OF PROVING RESPONDENT'S
GUILT BEYOND REASONABLE DOUBT.

THE LETTER AND INTENT OF RA 1379 FORBID/PRECLUDE

SUMMARY JUDGMENT AS THE PROCESS TO DECIDE FORFEITURE
UNDER
RA
1379. THUS,
IT
PROVIDES
FOR
SPECIFIC
JURISDICTIONAL ALLEGATIONS IN THE PETITION AND MANDATES A
WELL-DEFINED PROCEDURE TO BE STRICTLY OBSERVED BEFORE
FORFEITURE JUDGMENT MAY BE RENDERED.

B. CONSIDERING THE CRIMINAL/PENAL NATURE OF THE

PROCEEDINGS, THE DENIALS RAISED BY RESPONDENT IN HER
ANSWER WERE SUFFICIENT TO TRAVERSE THE ALLEGATIONS
IN THE PETITION FOR FORFEITURE.

II

C. THE PROSECUTION HAD FAILED TO ESTABLISH EVEN A PRIMA

FACIE CASE AGAINST RESPONDENT, MUCH LESS PROVEN ITS
CASE FOR FORFEITURE BEYOND REASONABLE DOUBT.

SUMMARY JUDGMENT IN THE DECISION UNDER RECONSIDERATION

DIMINISHES/MODIFIES OR REPEALS VIA JUDICIAL LEGISLATION SUBSTANTIVE
RIGHTS OF RESPONDENTS GRANTED AND GUARANTEED BY RA 1379 AND IS
THEREFORE UNCONSTITUTIONAL.
III

THE DECISION IS CONSTITUTIONALLY INVALID FOR FAILURE TO EXPRESS

CLEARLY AND DISTINCTLY THE TRUE/GENUINE STATEMENT OF FACTS
(ADDUCED AFTER TRIAL/ PRESENTATION OF EVIDENCE) ON WHICH IT IS
BASED.
IV
THE LAW(S) ON WHICH THE DECISION IS BASED IS/ARE NOT
APPLICABLE/PROPER AND/OR ARE FORCEFULLY STRAINED TO JUSTIFY THE
UNWARRANTED CONCLUSIONS REACHED, VIOLATIVE OF CONSTITUTIONAL
AND STATUTORY INJUNCTIONS.
V

II
SUMMARY JUDGMENT IS APPLICABLE TO A PETITION FOR
FORFEITURE, AS LONG AS THERE IS NO GENUINE FACTUAL ISSUE
WHICH WOULD CALL FOR TRIAL ON THE MERITS.
III
THE DECISION DATED JULY 15, 2003 OF THIS HONORABLE COURT
CLEARLY EXPRESSED THE FACTS ON WHICH IT IS BASED, MOST
OF WHICH WERE ADMITTED BY PRIVATE RESPONDENTS IN THEIR
PLEADINGS SUBMITTED TO THE SANDIGANBAYAN AND IN THE
COURSE OF THE PROCEEDINGS.
IV

ASSUMING SUMMARY JUDGMENT IS APPLICABLE AND PROPER, IT

IS NOT WARRANTED UNDER THE PREMISES.

CERTIORARI IS THE APPROPRIATE AND SPEEDY REMEDY OF

PETITIONER REPUBLIC, GIVEN THE GRAVE ABUSE OF DISCRETION
COMMITTED BY RESPONDENT SANDIGANBAYAN IN TOTALLY
REVERSING ITS OWN DECISION DATED SEPTEMBER 19, 2000 AND
IN ISSUING THE SUBJECT RESOLUTION DATED JANUARY 31, 2002,
AND CONSIDERING THAT THE CASE IS IMBUED WITH IMMENSE
PUBLIC INTEREST, PUBLIC POLICY AND DEEP HISTORICAL
REPERCUSSIONS.

VII

ASSUMING THAT A SUMMARY JUDGMENT IS PROPER, THE

AVERMENTS OF THE PETITION FORFEITURE ARE INCOMPLETE
AND INCONCLUSIVE TO COMPLY WITH THE REQUISITE
IMPERATIVES. JUDGMENT VIOLATES THE CONDITIONS SINE QUA
NON TO BE OBSERVED TO RENDER A VALID DECISION OF
FORFEITURE UNDER RA 1379.

A FORFEITURE PROCEEDING UNDER REPUBLIC ACT NO. 1379 IS

CIVIL AND NOT CRIMINAL IN NATURE.

THERE BEING A DEPRIVATION OF DUE PROCESS, THE COURT AXIOMATICALLY

OUSTED ITSELF OF JURISDICTION. HENCE, THE DECISION IS VOID.
VI

VIII
THE STATEMENT OF OPERATIVE FACTS/FACTUAL NARRATION AS
WELL AS THE CONCLUSIONS REACHED IN THE DECISION ARE
CONTRADICTED OR REFUTED BY THE PLEADINGS OF THE
PARTIES, THE JUDICIAL ADMISSIONS OF PETITIONER, THE
PROCEEDINGS BEFORE SANDIGANBAYAN AND THE ORDERS
ISSUED.
Respondent Irene Araneta, in her motion for reconsideration, merely reiterates
the arguments previously raised in the pleadings she filed in this Court and prays that
the Courts decision dated July 15, 2003 be set aside.
In its consolidated comment dated September 29, 2003, the Office of the
Solicitor General argues that:

VI
THE DECISION DATED JULY 15, 2003 OF THIS HONORABLE COURT
WILL NOT PREJUDICE THE CRIMINAL ACTIONS FILED AGAINST
RESPONDENT IMELDA R. MARCOS FOR VIOLATION OF THE ANTIGRAFT AND CORRUPT PRACTICES ACT.
On October 6, 2003, respondents Marcos, Jr. and Imee Marcos filed a motion
for leave to file a reply to petitioner Republic's consolidated comment, which this
Court granted. On October 22, 2003, they filed their reply to the consolidated
comment.
As the aforequoted issues are interwoven, the Court shall discuss them
together.
At the outset, we note that respondents, in their motions for reconsideration, do
not raise any new matters for the Court to resolve. The arguments in their motions for
reconsideration are mere reiterations of their contentions fully articulated in their
previous pleadings, and exhaustively probed and passed upon by the Court.

I
THE MOTIONS FOR RECONSIDERATION DO NOT RAISE ANY NEW
MATTER AND WERE FILED MANIFESTLY TO DELAY THE EXECUTION
OF THE DECISION DATED JULY 15, 2003.

SUMMARY JUDGMENT IN FORFEITURE PROCEEDINGS

Respondent Marcoses argue that the letter and intent of RA 1379 forbid and
preclude summary judgment as the process to decide forfeiture cases under the law.
It provides for specific jurisdictional allegations in the petition and mandates a welldefined procedure to be strictly observed before a judgment of forfeiture may be
rendered.
According to respondents, Section 5 of RA 1379 requires the court to set a date
for hearing during which respondents shall be given ample opportunity to explain, to
the satisfaction of the court, how they acquired the property. They contend that the
proceedings under RA 1379 are criminal in character, thus they have all the rights of
an accused under the Constitution such as the right to adduce evidence and the right
to a hearing. They claim that it is petitioner which has the burden of proving
respondents' guilt beyond reasonable doubt and that forfeiture of property should
depend not on the weakness of their evidence but on the strength of petitioner's.
Accordingly, respondents maintain that, due to the criminal nature of forfeiture
proceedings, the denials raised by them were sufficient to traverse all the allegations
in the petition for forfeiture.
The issue of the propriety of summary judgment was painstakingly discussed
and settled in our July 15, 2003 decision:
A summary judgment is one granted upon motion of a party for an expeditious settlement of
the case, it appearing from the pleadings, depositions, admissions and affidavits that there are
no important questions or issues of fact posed and, therefore, the movant is entitled to a
judgment as a matter of law. A motion for summary judgment is premised on the assumption
that the issues presented need not be tried either because these are patently devoid of substance
or that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the
Rules of Court for the prompt disposition of a civil action where there exists no serious
controversy. Summary judgment is a procedural devise for the prompt disposition of actions in
which the pleadings raise only a legal issue, not a genuine issue as to any material fact. [1]

IS SUMMARY JUDGMENT IN FORFEITURE

PROCEEDINGS A VIOLATION OF DUE PROCESS?

The principal contention now of respondent Marcoses is limited to their

argument that our aforementioned decision effectively deprived them of their
constitutionally enshrined right to due process.
According to respondents, RA 1379 is penal in substance and effect, hence,
they are entitled to the constitutional safeguards enjoyed by an accused.
Respondents further argue that the reinstatement of the decision of the
Sandiganbayan dated September 19, 2000, which ordered the forfeiture of the
properties subject of the instant case by summary judgment, diminished or repealed,
by judicial legislation, respondents rights guaranteed by RA 1379 for failure to set a
date for hearing to benefit respondents.
We disagree.
Due process of law has two aspects: substantive and procedural due
process. In order that a particular act may not be impugned as violative of the due

process clause, there must be compliance with both substantive and the procedural
[2]
requirements thereof.
In the present context, substantive due process refers to the intrinsic validity of a
[3]
law that interferes with the rights of a person to his property. On the other hand,
procedural due process means compliance with the procedures or steps, even
periods, prescribed by the statute, in conformity with the standard of fair play and
[4]
without arbitrariness on the part of those who are called upon to administer it.
Insofar as substantive due process is concerned, there is no showing that RA
1379 is unfair, unreasonable or unjust. In other words, respondent Marcoses are not
being deprived of their property through forfeiture for arbitrary reasons or on flimsy
grounds. As meticulously explained in the July 15, 2003 decision of the Court, EO
[5]
No. 1 created the PCGG primarily to assist then President Corazon Aquino in the
recovery, pursuant to RA 1379, of vast government resources amassed and stolen by
former President Ferdinand Marcos, his immediate family, relatives, close associates
and other cronies. These assets were stashed away here and abroad.
A careful study of the provisions of RA 1379 readily discloses that the forfeiture
proceedings in the Sandiganbayan did not violate the substantive rights of respondent
Marcoses. These proceedings are civil in nature, contrary to the claim of the
Marcoses that it is penal in character.
[6]

In Almeda Sr., et al. vs. Perez, et al., we suggested a test to determine

whether the proceeding for forfeiture is civil or criminal:
. . . Forfeiture proceedings may be either civil or criminal in nature, and may be in rem or in
personam. If they are under a statute such that if an indictment is presented the forfeiture can
be included in the criminal case they are criminal in nature, although they may be civil in
form; and where it must be gathered from the statute that the action is meant to be criminal in
its nature it cannot be considered as civil. If, however, the proceeding does not involve the
conviction of the wrongdoer for the offense charged the proceeding is of a civil nature; and
under statutes which specifically so provide, where the act or omission for which the forfeiture
is imposed is not also a misdemeanor, such forfeiture may be sued for and recovered in a civil
action. (37 CJS, Forfeiture, Sec. 5, pp. 15-16)
In the case of Republic vs. Sandiganbayan and Macario Asistio, Jr.,
categorically declared that:

[7]

this Court

The rule is settled that forfeiture proceedings are actions in rem and therefore civil in nature.
The proceedings under RA 1379 do not terminate in the imposition of a penalty
but merely in the forfeiture of the properties illegally acquired in favor of the
State. Section 6 of said law provides:
x x x 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 x x x

The procedure outlined in the law leading to forfeiture is that provided for in
a civil action:
xxx

xxx

xxx

Sec. 3. The petition The petition shall contain the following information:
(a)

The name and address of the respondent.

(b)
The public office or employment he holds and such other public
offices or employments which he has previously held.
(c)
The approximate amount of property he has acquired during his
incumbency in his past and present offices and employments.
(d)
A description of said property, or such thereof as has been
identified by the Solicitor General.
(e)
The total amount of his government salary and other proper
earnings and incomes from legitimately acquired property, and
(f)
Such other information as may enable the court to determine
whether or not the respondent has unlawfully acquired property during his
incumbency.
xxx

xxx

xxx

Sec. 4. Period for the answer. The respondent shall have a period of fifteen days within
which to present his answer.
In short, there is a petition, then an answer and lastly, a hearing. The preliminary
investigation required prior to the filing of the petition, in accordance with Section 2 of
the Act, is expressly provided to be similar to a preliminary investigation in a criminal
case. The similarity, however, ends there for, if the investigation were akin to that in a
criminal case but all the other succeeding steps were those for a civil proceeding,
then the process as a whole is definitely not criminal. Were it a criminal proceeding,
there would be, after preliminary investigation, a reading of the information, a plea of
guilty or not guilty, a trial and a reading of judgment in the presence of respondents.
But these steps, as above set forth, are clearly not provided for in the law.
Prescinding from the foregoing discussion, save for annulment of marriage or
declaration of its nullity or for legal separation, summary judgment is applicable to all
[8]
kinds of actions.
The proceedings in RA 1379 and EO No. 14 were observed in the prosecution
of the petition for forfeiture. Section 1 of EO No.14-A, dated August 18, 1986,
amending Section 3 of EO No.14, provides that civil suits to recover unlawfully
acquired property under RA 1379 may be proven by preponderance of evidence.
Under RA 1379 and EO Nos. 1 and 2, the Government is required only to state the

known lawful income of respondents for the prima facie presumption of illegal
provenance to attach. As we fully explained in our July 15, 2003 decision,petitioner
Republic was able to establish this prima facie presumption. Thus, the burden of proof
shifted, by law, to the respondents to show by clear and convincing evidence that the
Swiss deposits were lawfully acquired and that they had other legitimate sources of
income. This, respondent Marcoses did not do. They failed or rather, refused to
raise any genuine issue of fact warranting a trial for the reception of evidence
therefor. For this reason and pursuant to the State policy to expedite recovery of illgotten wealth, petitioner Republic moved for summary judgment which the
Sandiganbayan appropriately acted on.
Respondents also claim that summary judgment denies them their right to a
hearing and to present evidence purposely granted under Section 5 of RA 1379.
Respondents were repeatedly accorded full opportunity to present their case,
their defenses and their pleadings. Not only did they obstinately refuse to do
so. Respondents time and again tried to confuse the issues and the Court itself, and
to delay the disposition of the case.
Section 5 of RA 1379 provides:
The court shall set a date for a hearing which may be open to the public, and during which the
respondent shall be given ample opportunity to explain, to the satisfaction of the court, how he
has acquired the property in question.
And pursuant to Section 6 of the said law, 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.
Respondent Marcoses erroneously understood hearing to be synonymous with
trial. The words hearing and trial have different meanings and connotations. Trial
may refer to the reception of evidence and other processes. It embraces the period
for the introduction of evidence by both parties. Hearing, as known in law, is not
confined to trial but embraces the several stages of litigation, including the pre-trial
stage. A hearing does not necessarily mean presentation of evidence. It does not
necessarily imply the presentation of oral or documentary evidence in open court but
that the parties are afforded the opportunity to be heard.
A careful analysis of Section 5 of RA 1379 readily discloses that the word
hearing does not always require the formal introduction of evidence in a trial, only
that the parties are given the occasion to participate and explain how they acquired
the property in question. If they are unable to show to the satisfaction of the court that
they lawfully acquired the property in question, then the court shall declare such
[9]
property forfeited in favor of the State. There is no provision in the law that a full
blown trial ought to be conducted before the court declares the forfeiture of the
subject property. Thus, even if the forfeiture proceedings do not reach trial, the court
is not precluded from determining the nature of the acquisition of the property in
question even in a summary proceeding.
Due process, a constitutional precept, does not therefore always and in all
situations require a trial-type proceeding. The essence of due process is found in the
reasonable opportunity to be heard and submit ones evidence in support of his
defense. What the law prohibits is not merely the absence of previous notice but the

[10]

absence thereof and the lack of opportunity to be heard. This opportunity was
made completely available to respondents who participated in all stages of the
litigation.
When the petition for forfeiture was filed at the Sandiganbayan, respondent
Marcoses argued their case and engaged in all of the lengthy discussions,
argumentation, deliberations and conferences, and submitted their pleadings,
documents and other papers. When petitioner Republic moved for summary
judgment, respondent Marcoses filed their demurrer to evidence. They agreed to
submit the case for decision with their opposition to the motion for summary
judgment. They moved for the reconsideration of the Sandiganbayan resolution dated
September 19, 2000 which granted petitioner Republics motion for summary
judgment (which was in fact subsequently reversed in its January 31, 2002
resolution.) And when the case finally reached this Court, respondent Marcoses were
given, on every occasion, the chance to file and submit all the pleadings necessary to
defend their case. And even now that the matter has been finally settled and
adjudicated, their motion for reconsideration is being heard by this Court.

But a forfeiture proceeding is an action in rem, against the thing itself instead of
against the person. Being civil in character, it requires no more than a preponderance
[11]
of evidence. And by preponderance of evidence is meant that the evidence as a
[12]
whole adduced by one side is superior to that of the other.
Hence, the factual
findings of this Court in its decision dated July 15, 2003 will, as a consequence,
neither affect nor do away with the requirement of having to prove her guilt beyond
reasonable doubt in the criminal cases against her.
One final note. We take judicial notice of newspaper accounts that a certain
Judge Manuel Real of the US District Court of Hawaii issued a global freeze order
on the Marcos assets, including the Swiss deposits. We reject this order outrightly
because
it
is
a
transgression
not
only
of
the
principle
of
territoriality in public international law but also of the jurisdiction of this Court
recognized by the parties-in-interest and the Swiss government itself.
WHEREFORE, the motions for reconsideration are hereby DENIED with
FINALITY.
SO ORDERED.

For twelve long years, respondent Marcoses tried to stave off this case with
nothing but empty claims of lack of knowledge or information sufficient to form a
belief, or they were not privy to the transactions, or they could not remember
(because the transactions) happened a long time ago or that the assets were
lawfully acquired. And they now allege deprivation of their right to be heard and
present evidence in their defense?

Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago,

Sandoval-Gutierrez,
Austria-Martinez,
Carpio-Morales,
Callejo,
Sr.,
Azcuna, and Tinga, JJ., concur.
Carpio, J., no part.

It would be repulsive to our basic concepts of justice and fairness to allow

respondents to further delay the adjudication of this case and defeat the judgment of
this Court which was promulgated only after all the facts, issues and other
considerations essential to a fair and just determination had been judiciously
evaluated.

NICOLAS vs. ROMULO

Supreme Court En Banc

Petitioner Republic has the right to a speedy disposition of this case. It would
readily be apparent to a reasonable mind that respondent Marcoses have been
deliberately resorting to every procedural device to delay the resolution hereof. There
is justice waiting to be done. The people and the State are entitled to favorable
judgment, free from vexatious, capricious and oppressive delays, the salutary
objective being to restore the ownership of the Swiss deposits to the rightful owner,
the Republic of the Philippines, within the shortest possible time.
The respondent Marcoses cannot deny that the delays in this case have all been
made at their instance. The records can testify to this incontrovertible fact. It will be a
mockery of justice to allow them to benefit from it. By their own deliberate acts not
those of the Republic or anybody else they are deemed to have altogether waived
or abandoned their right to proceed to trial.
Respondent Imelda R. Marcos likewise asserts that the factual finding that the
foundations involved in the instant forfeiture proceedings were businesses managed
by her and her late husband, will adversely affect the criminal proceedings filed by the
Republic against her. The contention is bereft of merit. The criminal cases referred
to by said respondent are actions in personam, directed against her on the basis of
her personal liability. In criminal cases, the law imposes the burden of proving guilt
on the prosecution beyond reasonable doubt, and the trial judge in evaluating the
evidence must find that all the elements of the crime charged have been established
by sufficient proof to convict.

DECISION
AZCUNA, J.:
These are petitions for certiorari, etc. as special civil actions and/or for review of the
Decision of the Court of Appeals in Lance Corporal Daniel J. Smith v. Hon. Benjamin T.
Pozon, et al., in CA-G.R. SP No. 97212, dated January 2, 2007.
The facts are not disputed.
Respondent Lance Corporal (L/CPL) Daniel Smith is a member of the United States
Armed Forces. He was charged with the crime of rape committed against a Filipina, petitioner
herein, sometime on November 1, 2005, as follows:
The undersigned accused LCpl. Daniel Smith, Ssgt. Chad Brian
Carpentier, Dominic Duplantis, Keith Silkwood and Timoteo L. Soriano,
Jr. of the crime of Rape under Article 266-A of the Revised Penal Code, as
amended by Republic Act 8353, upon a complaint under oath filed by
Suzette S. Nicolas, which is attached hereto and made an integral part
hereof as Annex A, committed as follows:
That on or about the First (1st) day of
November 2005, inside the Subic Bay Freeport Zone,

Olongapo City and within the jurisdiction of this

Honorable Court, the above-named accuseds (sic),
being then members of the United States Marine
Corps, except Timoteo L. Soriano, Jr., conspiring,
confederating together and mutually helping one
another, with lewd design and by means of force,
threat and intimidation, with abuse of superior strength
and taking advantage of the intoxication of the victim,
did then and there willfully, unlawfully and
feloniously sexually abuse and have sexual intercourse
with or carnal knowledge of one Suzette S. Nicolas, a
22-year old unmarried woman inside a Starex Van
with Plate No. WKF-162, owned by Starways Travel
and Tours, with Office address at 8900 P. Victor St.,
Guadalupe, Makati City, and driven by accused
Timoteo L. Soriano, Jr., against the will and consent of
the said Suzette S. Nicolas, to her damage and
prejudice.
CONTRARY TO LAW.[1]

Pursuant to the Visiting Forces Agreement (VFA) between the Republic of

the Philippines and the United States, entered into on February 10, 1998, the United States, at
its request, was granted custody of defendant Smith pending the proceedings.
During the trial, which was transferred from the Regional Trial Court (RTC) of
Zambales to the RTC of Makati for security reasons, the United States Government faithfully
complied with its undertaking to bring defendant Smith to the trial court every time his
presence was required.
On December 4, 2006, the RTC of Makati, following the end of the trial, rendered
its Decision, finding defendant Smith guilty, thus:
WHEREFORE, premises considered, for failure of the
prosecution to adduce sufficient evidence against accused S/SGT. CHAD
BRIAN CARPENTER, L/CPL. KEITH SILKWOOD AND L/CPL.
DOMINIC DUPLANTIS, all of the US Marine Corps assigned at the USS
Essex, are hereby ACQUITTED to the crime charged.
The prosecution having presented sufficient evidence against
accused L/CPL. DANIEL J. SMITH, also of the US Marine Corps at the
USS Essex, this Court hereby finds him GUILTY BEYOND
REASONABLE DOUBT of the crime of RAPE defined under Article
266-A, paragraph 1 (a) of the Revised Penal Code, as amended by R.A.
8353, and, in accordance with Article 266-B, first paragraph thereof,
hereby sentences him to suffer the penalty of reclusion perpetua together
with the accessory penalties provided for under Article 41 of the same
Code.
Pursuant to Article V, paragraph No. 10, of the Visiting Forces
Agreement entered into by the Philippines and the United States, accused

L/CPL. DANIEL J. SMITH shall serve his sentence in the facilities that
shall, thereafter, be agreed upon by appropriate Philippine and United
States authorities. Pending agreement on such facilities, accused L/CPL.
DANIEL J. SMITH is hereby temporarily committed to the Makati City
Jail.
Accused L/CPL. DANIEL J. SMITH is further sentenced to
indemnify complainant SUZETTE S. NICOLAS in the amount
of P50,000.00 as compensatory damages plus P50,000.00 as moral
damages.
SO ORDERED.[2]

As a result, the Makati court ordered Smith detained at the Makati jail until further
orders.
On December 29, 2006, however, defendant Smith was taken out of the Makati jail
by a contingent of Philippine law enforcement agents, purportedly acting under orders of the
Department of the Interior and Local Government, and brought to a facility for detention under
the control of the United States government, provided for under new agreements between the
Philippines and the United States, referred to as the Romulo-Kenney Agreement of December
19, 2006 which states:
The Government of the Republic of the Philippines and the Government of
the United States of America agree that, in accordance with the Visiting
Forces Agreement signed between our two nations, Lance Corporal Daniel
J. Smith, United States Marine Corps, be returned to U.S. military custody
at the U.S. Embassy in Manila.
(Sgd.) KRISTIE A. KENNEY
Representative of the United States
of America

(Sgd.) ALBERTO G. ROMULO

Representative of the Republic
of the Philippines

DATE:

DATE: December 19, 2006__

12-19-06

and the Romulo-Kenney Agreement of December 22, 2006 which states:

The Department of Foreign Affairs of the Republic of the Philippines and
the Embassy of the United States of America agree that, in accordance
with the Visiting Forces Agreement signed between the two nations, upon
transfer of Lance Corporal Daniel J. Smith, United States Marine Corps,
from the Makati City Jail, he will be detained at the first floor, Rowe
(JUSMAG) Building, U.S. Embassy Compound in a room of
approximately 10 x 12 square feet. He will be guarded round the clock
by U.S. military personnel. The Philippine police and jail authorities,
under the direct supervision of the Philippine Department of Interior and
Local Government (DILG) will have access to the place of detention to
ensure the United States is in compliance with the terms of the VFA.

The matter was brought before the Court of Appeals which decided on January 2,
2007, as follows:
WHEREFORE, all the foregoing considered, we resolved to
DISMISS the petition for having become moot.[3]

Subsequently, the United States agreed to turn over these bases to the Philippines;
and with the expiration of the RP-US Military Bases Agreement in 1991, the territory covered
by these bases were finally ceded to the Philippines.
To prevent a recurrence of this experience, the provision in question was adopted in
the 1987 Constitution.

Hence, the present actions.

The petitions were heard on oral arguments on September 19, 2008, after which the
parties submitted their memoranda.
Petitioners contend that the Philippines should have custody of defendant L/CPL
Smith because, first of all, the VFA is void and unconstitutional.
This issue had been raised before, and this Court resolved in favor of the
constitutionality of the VFA. This was in Bayan v. Zamora,[4] brought by Bayan, one of
petitioners in the present cases.
Against the barriers of res judicata vis--vis Bayan, and stare decisis vis--vis all
the parties, the reversal of the previous ruling is sought on the ground that the issue is of
primordial importance, involving the sovereignty of the Republic, as well as a specific
mandate of the Constitution.

The provision is thus designed to ensure that any agreement allowing the presence of
foreign military bases, troops or facilities in Philippine territory shall be equally binding on
the Philippines and the foreign sovereign State involved. The idea is to prevent a recurrence
of the situation in which the terms and conditions governing the presence of foreign armed
forces in our territory were binding upon us but not upon the foreign State.
Applying the provision to the situation involved in these cases, the question is
whether or not the presence of US Armed Forces in Philippine territory pursuant to the VFA is
allowed under a treaty duly concurred in by the Senate xxx and recognized as a treaty by
the other contracting State.
This Court finds that it is, for two reasons.
First, as held in Bayan v. Zamora,[5] the VFA was duly concurred in by the
Philippine Senate and has been recognized as a treaty by the United States as attested and
certified by the duly authorized representative of the United States government.

The provision of the Constitution is Art. XVIII, Sec. 25 which states:

Sec. 25. After the expiration in 1991 of the Agreement between
the Philippines and the United States of America concerning Military
Bases, foreign military bases, troops, or facilities shall not be allowed in
the Philippines except under a treaty duly concurred in by the Senate and,
when the Congress so requires, ratified by a majority of the votes cast by
the people in a national referendum held for that purpose, and recognized
as a treaty by the other contracting State.

The reason for this provision lies in history and the Philippine experience in regard
to the United States military bases in the country.

The fact that the VFA was not submitted for advice and consent of the United States
Senate does not detract from its status as a binding international agreement or treaty
recognized by the said State. For this is a matter of internal United States law. Notice can be
taken of the internationally known practice by the United States of submitting to its Senate for
advice and consent agreements that are policymaking in nature, whereas those that carry out or
further implement these policymaking agreements are merely submitted to Congress, under
the provisions of the so-called CaseZablocki Act, within sixty days from ratification.[6]
The second reason has to do with the relation between the VFA and the RP-US
Mutual Defense Treaty of August 30, 1951. This earlier agreement was signed and duly
ratified with the concurrence of both the Philippine Senate and the United States Senate.
The RP-US Mutual Defense Treaty states:[7]

It will be recalled that under the Philippine Bill of 1902, which laid the basis for the
Philippine Commonwealth and, eventually, for the recognition of independence, the United
States agreed to cede to the Philippines all the territory it acquired from Spain under the Treaty
of Paris, plus a few islands later added to its realm, except certain naval ports and/or military
bases and facilities, which the United States retained for itself.

MUTUAL DEFENSE TREATY BETWEEN THE REPUBLIC OF

THE PHILIPPINES AND
THE UNITED
STATES
OF
AMERICA. Signed at Washington, August 30, 1951.
The Parties of this Treaty

This is noteworthy, because what this means is that Clark and Subic and the other
places in the Philippines covered by the RP-US Military Bases Agreement of 1947 were not
Philippine territory, as they were excluded from the cession and retained by the US.
Accordingly, the Philippines had no jurisdiction over these bases except to the extent
allowed by the United States. Furthermore, the RP-US Military Bases Agreement was never
advised for ratification by the United States Senate, a disparity in treatment, because
the Philippines regarded it as a treaty and had it concurred in by our Senate.

Reaffirming their faith in the purposes and principles of the

Charter of the United Nations and their desire to live in peace with all
peoples and all governments, and desiring to strengthen the fabric of peace
in the Pacific area.
Recalling with mutual pride the historic relationship which brought
their two peoples together in a common bond of sympathy and mutual

ideals to fight side-by-side against imperialist aggression during the last

war.

under its jurisdiction in the Pacific Ocean, its armed forces, public vessels
or aircraft in the Pacific.

Desiring to declare publicly and formally their sense of unity

and their common determination to defend themselves against
external armed attack, so that no potential aggressor could be under the
illusion that either of them stands alone in the Pacific area.

ARTICLE VI. This Treaty does not affect and shall not be
interpreted as affecting in any way the rights and obligations of the Parties
under the Charter of the United Nations or the responsibility of the United
Nations for the maintenance of international peace and security.

Desiring further to strengthen their present efforts for

collective defense for the preservation of peace and security pending
the development of a more comprehensive system of regional security in
the Pacific area.

ARTICLE VII. This Treaty shall be ratified by the Republic of

the Philippines and the United Nations of America in accordance with
their respective constitutional processes and will come into force when
instruments of ratification thereof have been exchanged by them
at Manila.

Agreeing that nothing in this present instrument shall be

considered or interpreted as in any way or sense altering or diminishing
any existing agreements or understandings between the Republic of
the Philippines and the United States of America.
Have agreed as follows:
ARTICLE I. The parties undertake, as set forth in the Charter of
the United Nations, to settle any international disputes in which they may
be involved by peaceful means in such a manner that international peace
and security and justice are not endangered and to refrain in their
international relation from the threat or use of force in any manner
inconsistent with the purposes of the United Nations.

ARTICLE VIII. This Treaty shall remain in force

indefinitely. Either Party may terminate it one year after notice has been
given to the other party.
IN WITHNESS WHEREOF the undersigned Plenipotentiaries
have signed this Treaty.
DONE in duplicate at Washington this thirtieth day of August,
1951.
For the Republic of the Philippines:
(Sgd.) CARLOS

P.

(Sgd.) JOAQUIN

M.

(Sgd.) VICENTE

J.

ROMULO
ARTICLE II. In order more effectively to achieve the objective of
this Treaty, the Parties separately and jointly by self-help and mutual
aid will maintain and develop their individual and collective capacity
to resist armed attack.

ELIZALDE
FRANCISCO
(Sgd.) DIOSDADO

ARTICLE III. The Parties, through their Foreign Ministers or their

deputies, will consult together from time to time regarding the
implementation of this Treaty and whenever in the opinion of either of
them the territorial integrity, political independence or security of either of
the Parties is threatened by external armed attack in the Pacific.

MACAPAGAL

ARTICLE IV. Each Party recognizes that an armed attack in the

Pacific area on either of the parties would be dangerous to its own peace
and safety and declares that it would act to meet the common dangers in
accordance with its constitutional processes.

DULLES

Any such armed attack and all measures taken as a result thereof
shall be immediately reported to the Security Council of the United
Nations. Such measures shall be terminated when the Security Council
has taken the measures necessary to restore and maintain international
peace and security.
ARTICLE V. For the purpose of Article IV, an armed attack on
either of the Parties is deemed to include an armed attack on the
metropolitan territory of either of the Parties, or on the island territories

For the United States of America:

(Sgd.) DEAN ACHESON
(Sgd.) JOHN
FOSTER
(Sgd.) TOM CONNALLY
(Sgd.) ALEXANDER
WILEY[8]

Clearly, therefore, joint RP-US military exercises for the purpose of developing the
capability to resist an armed attack fall squarely under the provisions of the RP-US Mutual
Defense Treaty. The VFA, which is the instrument agreed upon to provide for the joint RPUS military exercises, is simply an implementing agreement to the main RP-US Military
Defense Treaty. The Preamble of the VFA states:
The Government of the United States of America and the Government of
the Republic of the Philippines,

Reaffirming their faith in the purposes and principles of the Charter of the
United Nations and their desire to strengthen international and regional
security in the Pacific area;
Reaffirming their obligations under the Mutual Defense Treaty
of August 30, 1951;
Noting that from time to time elements of the United States armed
forces may visit the Republic of the Philippines;
Considering that cooperation between the United States and the
Republic of the Philippines promotes their common security interests;
Recognizing the desirability of defining the treatment of United
States personnel visiting the Republic of the Philippines;
Have agreed as follows:[9]

Government shall present its position to the United States Government

regarding custody, which the United States Government shall take into full
account. In the event Philippine judicial proceedings are not completed
within one year, the United States shall be relieved of any obligations
under this paragraph. The one year period will not include the time
necessary to appeal. Also, the one year period will not include any time
during which scheduled trial procedures are delayed because United
States authorities, after timely notification by Philippine authorities to
arrange for the presence of the accused, fail to do so.
Petitioners contend that these undertakings violate another provision of the
Constitution, namely, that providing for the exclusive power of this Court to adopt rules of
procedure for all courts in the Philippines (Art. VIII, Sec. 5[5]). They argue that to allow the
transfer of custody of an accused to a foreign power is to provide for a different rule of
procedure for that accused, which also violates the equal protection clause of the Constitution
(Art. III, Sec. 1.).
Again, this Court finds no violation of the Constitution.

Accordingly, as an implementing agreement of the RP-US Mutual Defense Treaty, it

was not necessary to submit the VFA to the US Senate for advice and consent, but merely to
the US Congress under the CaseZablocki Act within 60 days of its ratification. It is for this
reason that the US has certified that it recognizes the VFA as a binding international
agreement, i.e., a treaty, and this substantially complies with the requirements of Art. XVIII,
Sec. 25 of our Constitution.[10]
The provision of Art. XVIII, Sec. 25 of the Constitution, is complied with by virtue
of the fact that the presence of the US Armed Forces through the VFA is a presence allowed
under the RP-US Mutual Defense Treaty. Since the RP-US Mutual Defense Treaty itself has
been ratified and concurred in by both the Philippine Senate and the US Senate, there is no
violation of the Constitutional provision resulting from such presence.
The VFA being a valid and binding agreement, the parties are required as a matter of
international law to abide by its terms and provisions.
The VFA provides that in cases of offenses committed by the members of the US
Armed Forces in the Philippines, the following rules apply:

Article V
Criminal Jurisdiction
xxx
6. The custody of any United States personnel over whom the
Philippines is to exercise jurisdiction shall immediately reside with United
States military authorities, if they so request, from the commission of the
offense until completion of all judicial proceedings. United States military
authorities shall, upon formal notification by the Philippine authorities and
without delay, make such personnel available to those authorities in time
for any investigative or judicial proceedings relating to the offense with
which the person has been charged. In extraordinary cases, the Philippine

The equal protection clause is not violated, because there is a substantial basis for a
different treatment of a member of a foreign military armed forces allowed to enter our
territory and all other accused.[11]
The rule in international law is that a foreign armed forces allowed to enter ones
territory is immune from local jurisdiction, except to the extent agreed upon. The Status of
Forces Agreements involving foreign military units around the world vary in terms and
conditions, according to the situation of the parties involved, and reflect their bargaining
power. But the principle remains, i.e., the receiving State can exercise jurisdiction over the
forces of the sending State only to the extent agreed upon by the parties.[12]
As a result, the situation involved is not one in which the power of this Court to
adopt rules of procedure is curtailed or violated, but rather one in which, as is normally
encountered around the world, the laws (including rules of procedure) of one State do not
extend or apply except to the extent agreed upon to subjects of another State due to the
recognition of extraterritorial immunity given to such bodies as visiting foreign armed
forces.
Nothing in the Constitution prohibits such agreements recognizing immunity from
jurisdiction or some aspects of jurisdiction (such as custody), in relation to long-recognized
subjects of such immunity like Heads of State, diplomats and members of the armed forces
contingents of a foreign State allowed to enter another States territory. On the contrary, the
Constitution states that the Philippines adopts the generally accepted principles of international
law as part of the law of the land. (Art. II, Sec. 2).
Applying, however, the provisions of VFA, the Court finds that there is a different
treatment when it comes to detention as against custody. The moment the accused has to be
detained, e.g., after conviction, the rule that governs is the following provision of the VFA:
Article V
Criminal Jurisdiction
xxx

Sec. 10. The confinement or detention by Philippine authorities

of United States personnel shall be carried out in facilities agreed on by
appropriate Philippines and United
Statesauthorities. United
States personnel serving sentences in the Philippines shall have the right to
visits and material assistance.

It is clear that the parties to the VFA recognized the difference between custody
during the trial and detention after conviction, because they provided for a specific
arrangement to cover detention. And this specific arrangement clearly states not only that the
detention shall be carried out in facilities agreed on by authorities of both parties, but also that
the detention shall be by Philippine authorities. Therefore, the Romulo-Kenney Agreements
of December 19 and 22, 2006, which are agreements on the detention of the accused in
the United States Embassy, are not in accord with the VFA itself because such detention is
not by Philippine authorities.
Respondents should therefore comply with the VFA and negotiate with
representatives of the United States towards an agreement on detention facilities under
Philippine authorities as mandated by Art. V, Sec. 10 of the VFA.
Next, the Court addresses the recent decision of the United States Supreme Court
in Medellin v. Texas ( 552 US ___ No. 06-984, March 25, 2008), which held that treaties
entered into by the United States are not automatically part of their domestic law unless these
treaties are self-executing or there is an implementing legislation to make them enforceable.
On February 3, 2009, the Court issued a Resolution, thus:
G.R. No. 175888 (Suzette Nicolas y Sombilon v. Alberto Romulo, et al.);
G.R. No. 176051 (Jovito R. Salonga, et al. v. Daniel Smith, et
al.); and G.R. No. 176222 (Bagong Alyansang Makabayan
[BAYAN], et al. v. President Gloria Macapagal-Arroyo, et al.).
The parties, including the Solicitor General, are required to submit
within three (3) days a Comment/Manifestation on the following points:
1.

What is the implication on the RP-US Visiting Forces

Agreement of the recent US Supreme Court decision in Jose
Ernesto Medellin v. Texas, dated March 25, 2008, to the effect
that treaty stipulations that are not self-executory can only be
enforced pursuant to legislation to carry them into effect; and
that, while treaties may comprise international commitments,
they are not domestic law unless Congress has enacted
implementing statutes or the treaty itself conveys an intention
that it be self-executory and is ratified on these terms?

2.

Whether the VFA is enforceable in the US as domestic law,

either because it is self-executory or because there exists
legislation to implement it.

3.

Whether the RP-US Mutual Defense Treaty of August 30,

1951 was concurred in by the US Senate and, if so, is there proof

of the US Senate advice and consent resolution? Peralta, J., no

part.
After deliberation, the Court holds, on these points, as follows:
First, the VFA is a self-executing Agreement, as that term is defined
in Medellin itself, because the parties intend its provisions to be enforceable, precisely because
the Agreement is intended to carry out obligations and undertakings under the RP-US Mutual
Defense Treaty. As a matter of fact, the VFA has been implemented and executed, with
the US faithfully complying with its obligation to produce L/CPL Smith before the court
during the trial.
Secondly, the VFA is covered by implementing legislation, namely, the Case-Zablocki
Act, USC Sec. 112(b), inasmuch as it is the very purpose and intent of the US Congress that
executive agreements registered under this Act within 60 days from their ratification be
immediately implemented. The parties to these present cases do not question the fact that the
VFA has been registered under the Case-Zablocki Act.
In sum, therefore, the VFA differs from the Vienna Convention on Consular Relations
and the Avena decision of the International Court of Justice (ICJ), subject matter of
the Medellin decision. The Convention and the ICJ decision are not self-executing and are not
registrable under the Case-Zablocki Act, and thus lack legislative implementing authority.
Finally, the RP-US Mutual Defense Treaty was advised and consented to by the US
Senate on March 20, 1952, as reflected in the US Congressional Record, 82 ndCongress,
Second Session, Vol. 98 Part 2, pp. 2594-2595.
The framers of the Constitution were aware that the application of international law
in domestic courts varies from country to country.
As Ward N. Ferdinandusse states in his Treatise, DIRECT APPLICATION OF
INTERNATIONAL CRIMINAL LAW IN NATIONAL COURTS, some countries require
legislation whereas others do not.
It was not the intention of the framers of the 1987 Constitution, in adopting Article
XVIII, Sec. 25, to require the other contracting State to convert their system to achieve
alignment and parity with ours. It was simply required that the treaty be recognized as a treaty
by the other contracting State. With that, it becomes for both parties a binding international
obligation and the enforcement of that obligation is left to the normal recourse and processes
under international law.
Furthermore, as held by the US Supreme Court in Weinberger v. Rossi,[13] an
executive agreement is a treaty within the meaning of that word in international law and
constitutes enforceable domestic law vis--vis the United States. Thus, the US Supreme Court
in Weinberger enforced the provisions of the executive agreement granting preferential
employment to Filipinos in the US Bases here.

Accordingly, there are three types of treaties in the American system:

1.

Art. II, Sec. 2 treaties These are advised and consented to by the US
Senate in accordance with Art. II, Sec. 2 of the US Constitution.

2.

ExecutiveCongressional Agreements: These are joint agreements of

the President and Congress and need not be submitted to the Senate.

3.

Sole Executive Agreements. These are agreements entered into by the

President. They are to be submitted to Congress within sixty (60) days of
ratification under the provisions of the Case-Zablocki Act, after which
they are recognized by the Congress and may be implemented.

LEONARDO-DE
CASTRO,
BRION, and
PERALTA, JJ.

COMMISSION ON AUDIT,
Promulgated:
Respondent.
February 26, 2009
x-----------------------------------------------------x

As regards the implementation of the RP-US Mutual Defense Treaty, military aid or
assistance has been given under it and this can only be done through implementing
legislation. The VFA itself is another form of implementation of its provisions.

DECISION
CARPIO, J.:

WHEREFORE, the petitions are PARTLY GRANTED, and the Court of Appeals
Decision in CA-G.R. SP No. 97212 dated January 2, 2007 is MODIFIED. The Visiting
Forces Agreement (VFA) between the Republic of the Philippines and the United States,
entered into on February 10, 1998, is UPHELD as constitutional, but the Romulo-Kenney
Agreements of December 19 and 22, 2006 are DECLARED not in accordance with the
VFA, and respondent Secretary of Foreign Affairs is hereby ordered to forthwith negotiate
with the United States representatives for the appropriate agreement on detention facilities
under Philippine authorities as provided in Art. V, Sec. 10 of the VFA, pending which
the status quo shall be maintained until further orders by this Court.
The Court of Appeals is hereby directed to resolve without delay the related matters
pending therein, namely, the petition for contempt and the appeal of L/CPL Daniel Smith from
the judgment of conviction.
No costs.
SO ORDERED.

EN BANC

BASES CONVERSION AND

DEVELOPMENT AUTHORITY,
Petitioner,

G.R. No. 178160

Present:

- versus -

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,*
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
TINGA,*
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,

The Case
This is a petition for certiorari[1] with prayer for the issuance of a temporary restraining
order and a writ of preliminary injunction. The petition seeks to nullify Decision No. 2007020[2] dated 12 April 2007 of the Commission on Audit (COA).
The Facts
On 13 March 1992, Congress approved Republic Act (RA) No. 7227[3] creating the
Bases Conversion and Development Authority (BCDA). Section 9 of RA No. 7227 states that
the BCDA Board of Directors (Board) shall exercise the powers and functions of the
BCDA. Under Section 10, the functions of the Board include the determination of the
organizational structure and the adoption of a compensation and benefit scheme at least
equivalent to that of the Bangko Sentral ng Pilipinas (BSP). Accordingly, the Board
determined the organizational structure of the BCDA and adopted a compensation and benefit
scheme for its officials and employees.
On 20 December 1996, the Board adopted a new compensation and benefit scheme
which included a P10,000 year-end benefit granted to each contractual employee, regular
permanent employee, and Board member. In a memorandum[4] dated 25 August 1997, Board
Chairman Victoriano A. Basco (Chairman Basco) recommended to President Fidel V. Ramos
(President Ramos) the approval of the new compensation and benefit scheme. In a
memorandum[5] dated 9 October 1997, President Ramos approved the new compensation and
benefit scheme.
In 1999, the BSP gave a P30,000 year-end benefit to its officials and employees. In
2000, the BSP increased the year-end benefit from P30,000 to P35,000. Pursuant to Section
10 of RA No. 7227 which states that the compensation and benefit scheme of the BCDA shall
be at least equivalent to that of the BSP, the Board increased the year-end benefit of BCDA
officials and employees from P10,000 to P30,000. Thus in 2000 and 2001, BCDA officials
and employees received a P30,000 year-end benefit, and, on 1 October 2002, the Board passed
Resolution No. 2002-10-193[6] approving the release of a P30,000 year-end benefit for 2002.
Aside from the contractual employees, regular permanent employees, and Board
members, the full-time consultants of the BCDA also received the year-end benefit.
On 20 February 2003, State Auditor IV Corazon V. Espao of the COA issued Audit
Observation Memorandum (AOM) No. 2003-004[7] stating that the grant of year-end benefit to

Board members was contrary to Department of Budget and Management (DBM) Circular
Letter No. 2002-2 dated 2 January 2002. In Notice of Disallowance (ND) No. 03-001-BCDA(02)[8] dated 8 January 2004, Director IV Rogelio D. Tablang (Director Tablang), COA, Legal
and Adjudication Office-Corporate, disallowed the grant of year-end benefit to the Board
members and full-time consultants. In Decision No. 2004-013[9] dated 13 January 2004,
Director Tablang concurred with AOM No. 2003-004 and ND No. 03-001-BCDA-(02).
In a letter[10] dated 20 February 2004, BCDA President and Chief Executive Officer Rufo
Colayco requested the reconsideration of Decision No. 2004-013. In a Resolution[11] dated 22
June 2004, Director Tablang denied the request. The BCDA filed a notice of appeal[12] dated 8
September 2004 and an appeal memorandum[13] dated 23 December 2004 with the COA.
The COAs Ruling
In Decision No. 2007-020,[14] the COA affirmed the disallowance of the year-end benefit
granted to the Board members and full-time consultants and held that the presumption of good
faith did not apply to them. The COA stated that:

despite the earlier clarification on the matter by the DBM thru the issuance
on January 2, 2002 of DBM Circular Letter No. 2002-02, still, the BCDA
Board of Directors enacted Resolution No. 2002-10-93 on October 1, 2002
granting YEB to the BCDA personnel including themselves. Full time
consultants, being non-salaried personnel, are also not entitled to such
presumption since they knew from the very beginning that they are only
entitled to the amount stipulated in their contracts as compensation for
their services. Hence, they should be made to refund the disallowed
YEB.[15] (Boldfacing in the original)
Hence, this petition.
The Courts Ruling
The Board members and full-time consultants of the BCDA are not entitled to the yearend benefit.

The granting of YEB x x x is not without x x x limitation. DBM

Circular Letter No. 2002-02 dated January 2, 2002 stating, viz:

First, the BCDA claims that the Board can grant the year-end benefit to its members and
full-time consultants because, under Section 10 of RA No. 7227, the functions of the Board
include the adoption of a compensation and benefit scheme.

2.0 To clarify and address issues/requests concerning the same,

the
following compensation policies are
hereby reiterated:

The Court is not impressed. The Boards power to adopt a compensation and benefit
scheme is not unlimited. Section 9 of RA No. 7227 states that Board members are entitled to
a per diem:

2.1
PERA,
personnel
benefits, these

ADCOM, YEB and retirement benefits, are

benefits granted in addition to salaries. As fringe
shall be paid only when the basic salary is also paid.

2.2
Members of the Board of Directors of agencies are not
salaried
officials of the government. As
non-salaried
officials
they
are
not
entitled to PERA, ADCOM, YEB
and retirement benefits unless
expressly
provided by law.
2.3
Department Secretaries, Undersecretaries and Assistant
Secretaries
who serve as Ex-officio Members of
the Board of Directors are not
entitled to any
remuneration in
line
with
the
Supreme
Court
ruling
that their services in the Board are already
paid for and covered by
the remuneration attached
to their office. (underscoring ours)

Members of the Board shall receive a per diem of not more than
Five
thousand
pesos
(P5,000)
for
every
board
meeting: Provided, however, That the per diem collected per month
does not exceed the equivalent of four (4) meetings: Provided, further,
That the amount of per diem for every board meeting may be increased by
the President but such amount shall not be increased within two (2) years
after its last increase. (Emphasis supplied)

Section 9 specifies that Board members shall receive a per diem for every board meeting;
limits the amount of per diem to not more than P5,000; and limits the total amount of per
diem for one month to not more than four meetings. In Magno v. Commission on
Audit,[16] Cabili v. Civil Service Commission,[17] De Jesus v. Civil Service
Commission,[18] Molen, Jr. v. Commission on Audit,[19] and Baybay Water District v.
Commission on Audit,[20] the Court held that the specification of compensation and
limitation of the amount of compensation in a statute indicate that Board members are
entitled only to the per diem authorized by law and no other. In Baybay Water District, the
Court held that:

Clearly, as stated above, the members and ex-officio members of the

Board of Directors are not entitled to YEB, they being not salaried
officials of the government. The same goes withfull time
consultants wherein no employer-employee relationships exist between
them and the BCDA. Thus, the whole amount paid to them
totaling P342,000 is properly disallowed in audit.

By specifying the compensation which a director is entitled to receive and

by limiting the amount he/she is allowed to receive in a month, x x x the
law quite clearly indicates that directors x x x are authorized to receive
only the per diem authorized by law and no other compensation or
allowance in whatever form.[21]

Moreover, the presumption of good faith may not apply to the

members and ex-officio members of the Board of Directors because

Also, DBM Circular Letter No. 2002-2 states that, Members of the Board of Directors
of agencies are not salaried officials of the government. As non-salaried officials they are

not entitled to PERA, ADCOM, YEB and retirement benefits unless expressly provided by
law. RA No. 7227 does not state that the Board members are entitled to a year-end benefit.
With regard to the full-time consultants, DBM Circular Letter
No. 2002-2 states
that, YEB and retirement benefits, are personnel benefits granted in addition to
salaries. As fringe benefits, these shall be paid only when the basic salary is also
paid. The full-time consultants are not part of the BCDA personnel and are not paid the
basic salary. The full-time consultants consultancy contracts expressly state that there is no
employer-employee relationship between the BCDA and the consultants, and that the BCDA
shall pay the consultants a contract price. For example, the consultancy contract[22] of a
certain Dr. Faith M. Reyes states:
SECTION 2. Contract Price. For and in consideration of the services to
be performed by the CONSULTANT (16 hours/week), BCDA shall pay
her the amount of TWENTY THOUSAND PESOS and 00/100
(P20,000.00), Philippine currency, per month.

II of the Constitution are not self-executing provisions. In that case, the Court held that
Some of the constitutional provisions invoked in the present case were taken from Article II
of the Constitution specifically, Sections 5 x x x and 18 the provisions of which the
Court categorically ruled to be non self-executing.
Third, the BCDA claims that the denial of year-end benefit to the Board members and
full-time consultants violates Section 1, Article III of the Constitution.[25] More specifically,
the BCDA claims that there is no substantial distinction between regular officials and
employees on one hand, and Board members and full-time consultants on the other. The
BCDA states that there is here only a distinction, but no difference because both have
undeniably one common goal as humans, that is x x x to keep body and soul together or,
[d]ifferently put, both have mouths to feed and stomachs to fill.
The Court is not impressed. Every presumption should be indulged in favor of the
constitutionality of RA No. 7227 and the burden of proof is on the BCDA to show that
there is a clear and unequivocal breach of the Constitution.[26] In Abakada Guro Party
List v. Purisima,[27] the Court held that:

xxxx
SECTION 4. Employee-Employer Relationship. It is understood that
no employee-employer relationship shall exist between BCDA and the
CONSULTANT.
SECTION 5. Period of Effectivity. This CONTRACT shall have an
effectivity period of one (1) year, from January 01, 2002 to December 31,
2002, unless sooner terminated by BCDA in accordance with Section 6
below.

A law enacted by Congress enjoys the strong presumption of

constitutionality. To justify its nullification, there must be a clear and
unequivocal breach of the Constitution, not a doubtful and unequivocal
one. To invalidate [a law] based on x x x baseless supposition is an
affront to the wisdom not only of the legislature that passed it but also of
the executive which approved it.

Since full-time consultants are not salaried employees of BCDA, they are not entitled to the
year-end benefit which is a personnel benefit granted in addition to salaries and which is
paid only when the basic salary is also paid.

The BCDA failed to show that RA No. 7227 unreasonably singled out Board members
and full-time consultants in the grant of the year-end benefit. It did not show any clear and
unequivocal breach of the Constitution. The claim that there is no difference between regular
officials and employees, and Board members and full-time consultants because both groups
have mouths to feed and stomachs to fill is fatuous. Surely, persons are not automatically
similarly situated thus, automatically deserving of equal protection of the laws just
because they both have mouths to feed and stomachs to fill. Otherwise, the existence of a
substantial distinction would become forever highly improbable.

Second, the BCDA claims that the Board members and full-time consultants should be
granted the year-end benefit because the granting of year-end benefit is consistent with
Sections 5 and 18, Article II of the Constitution. Sections 5 and 18 state:

Fourth, the BCDA claims that the Board can grant the year-end benefit to its members
and the full-time consultants because RA No. 7227 does not expressly prohibit it from doing
so.

Section 5. The maintenance of peace and order, the protection of

life, liberty, and property, and the promotion of the general welfare are
essential for the enjoyment by all people of the blessings of democracy.

The Court is not impressed. A careful reading of Section 9 of RA No. 7227 reveals that
the Board is prohibited from granting its members other benefits. Section 9 states:

SECTION 6. Termination of Services. BCDA, in its sole discretion

may opt to terminate this CONTRACT when it sees that there is no more
need for the services contracted for. (Boldfacing in the original)

Section 18. The State affirms labor as a primary social economic

force. It shall protect the rights of workers and promote their welfare.

The Court is not impressed. Article II of the Constitution is entitled Declaration of

Principles and State Policies. By its very title, Article II is a statement of general ideological
principles and policies. It is not a source of enforceable rights.[23] In Tondo Medical Center
Employees Association v. Court of Appeals,[24] the Court held thatSections 5 and 18, Article

Members of the Board shall receive a per diem of not more than
Five
thousand
pesos
(P5,000)
for
every
board
meeting: Provided, however, That the per diem collected per month
does not exceed the equivalent of four (4) meetings: Provided, further,
That the amount of per diem for every board meeting may be increased by
the President but such amount shall not be increased within two (2) years
after its last increase. (Emphasis supplied)

Section 9 specifies that Board members shall receive a per diem for every board meeting;
limits the amount of per diem to not more than P5,000; limits the total amount ofper diem for
one month to not more than four meetings; and does not state that Board members may receive
other benefits. In Magno,[28] Cabili,[29] De Jesus,[30] Molen, Jr.,[31] and Baybay Water
District,[32] the Court held that the specification of compensation and limitation of the
amount of compensation in a statute indicate that Board members are entitled only to
the per diem authorized by law and no other.
The specification that Board members shall receive a per diem of not more than P5,000
for every meeting and the omission of a provision allowing Board members to receive other
benefits lead the Court to the inference that Congress intended to limit the compensation of
Board members to the per diem authorized by law and no other. Expressio unius est exclusio
alterius. Had Congress intended to allow the Board members to receive other benefits, it
would have expressly stated so.[33] For example, Congress intention to allow Board members
to receive other benefits besides the per diem authorized by law is expressly stated in Section
1 of RA No. 9286:[34]
SECTION 1. Section 13 of Presidential Decree No. 198, as
amended, is hereby amended to read as follows:
SEC. 13. Compensation. Each director shall receive per
diem to be determined by the Board, for each meeting of the Board
actually attended by him, but no director shall receiveper diems in any
given month in excess of the equivalent of the total per diem of four
meetings in any given month.
Any per diem in excess of One hundred fifty pesos (P150.00) shall
be subject to the approval of the Administration. In addition thereto,
each director shall receive allowances and benefits as the Board may
prescribe subject to the approval of the Administration. (Emphasis
supplied)

The Court cannot, in the guise of interpretation, enlarge the scope of a statute or insert into a
statute what Congress omitted, whether intentionally or unintentionally. [35]
When a statute is susceptible of two interpretations, the Court must adopt the one in
consonance with the presumed intention of the legislature to give its enactments the most
reasonable and beneficial construction, the one that will render them operative and
effective.[36] The Court always presumes that Congress intended to enact sensible
statutes.[37] If the Court were to rule that the Board could grant the year-end benefit to its
members, Section 9 of RA No. 7227 would become inoperative and ineffective the
specification that Board members shall receive a per diem of not more than P5,000 for every
meeting; the specification that the per diem received per month shall not exceed the equivalent
of four meetings; the vesting of the power to increase the amount of per diem in the President;
and the limitation that the amount of per diem shall not be increased within two years from its
last increase would all become useless because the Board could always grant its members
other benefits.
With regard to the full-time consultants, DBM Circular Letter No. 2002-2 states that,
YEB and retirement benefits, are personnel benefits granted in addition to salaries. As
fringe benefits, these shall be paid only when the basic salary is also paid. The full-time

consultants are not part of the BCDA personnel and are not paid the basic salary. The fulltime consultants consultancy contracts expressly state that there is no employer-employee
relationship between BCDA and the consultants and that BCDA shall pay the consultants a
contract price. Since full-time consultants are not salaried employees of the BCDA, they are
not entitled to the year-end benefit which is a personnelbenefit granted in addition to
salaries and which is paid only when the basic salary is also paid.
Fifth, the BCDA claims that the Board members and full-time consultants are entitled to
the year-end benefit because (1) President Ramos approved the granting of the benefit to the
Board members, and (2) they have been receiving it since 1997.
The Court is not impressed. The State is not estopped from correcting a public officers
erroneous application of a statute, and an unlawful practice, no matter how long, cannot give
rise to any vested right.[38]
The Court, however, notes that the Board members and full-time consultants received the
year-end benefit in good faith. The Board members relied on (1) Section 10 of RA No. 7227
which authorized the Board to adopt a compensation and benefit scheme; (2) the fact that RA
No. 7227 does not expressly prohibit Board members from receiving benefits other than
the per diem authorized by law; and (3) President Ramos approval of the new compensation
and benefit scheme which included the granting of a year-end benefit to each contractual
employee, regular permanent employee, and Board member. The full-time consultants relied
on Section 10 of RA No. 7227 which authorized the Board to adopt a compensation and
benefit scheme. There is no proof that the Board members and full-time consultants knew that
their receipt of the year-end benefit was unlawful. In keeping with Magno,[39] De
Jesus,[40] Molen, Jr.,[41] and Kapisanan ng mga Manggagawa sa Government Service
Insurance System (KMG) v. Commission on Audit,[42] the Board members and full-time
consultants are not required to refund the year-end benefits they have already received.
WHEREFORE, the petition is PARTIALLY GRANTED. Commission on Audit
Decision No. 2007-020 dated 12 April 2007 is AFFIRMED with theMODIFICATION that
the Board members and full-time consultants of the Bases Conversion and Development
Authority are not required to refund the year-end benefits they have already received.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

A.M. No. 93-7-696-0 February 21, 1995

In Re JOAQUIN T. BORROMEO, Ex Rel. Cebu City Chapter of the Integrated Bar
of the Philippines.

RESOLUTION

PER CURIAM:
It is said that a little learning is a dangerous thing; and that he who acts as his own
lawyer has a fool for a client. There would seem to be more than a grain of truth in
these aphorisms; and they appear to find validation in the proceeding at bench, at
least.
The respondent in this case, Joaquin T. Borromeo, is not a lawyer but has apparently
read some law books, and ostensibly come to possess some superficial awareness of
a few substantive legal principles and procedural rules. Incredibly, with nothing more
than this smattering of learning, the respondent has, for some sixteen (16) years now,
from 1978 to the present, been instituting and prosecuting legal proceedings in
various courts, dogmatically pontificating on errors supposedly committed by the
courts, including the Supreme Court. In the picturesque language of former Chief
1
Justice Enrique M. Fernando, he has "with all the valor of ignorance," been verbally
jousting with various adversaries in diverse litigations; or in the words of a well-known
song, rushing into arenas "where angels fear to tread." Under the illusion that his
trivial acquaintance with the law had given him competence to undertake litigation, he
has ventured to represent himself in numerous original and review proceedings.
Expectedly, the results have been disastrous. In the process, and possibly in aid of
his interminable and quite unreasonable resort to judicial proceedings, he has seen fit
to compose and circulate many scurrilous statements against courts, judges and their
employees, as well as his adversaries, for which he is now being called to account.
Respondent Borromeo's ill-advised incursions into lawyering were generated by fairly
prosaic transactions with three (3) banks which came to have calamitous
consequences for him chiefly because of his failure to comply with his contractual
commitments and his stubborn insistence on imposing his own terms and conditions
for their fulfillment. These banks were: Traders Royal Bank (TRB), United Coconut
Planters Bank (UCPB), Security Bank & Trust Co. (SBTC). Borromeo obtained loans
or credit accommodation from them, to secure which he constituted mortgages over
immovables belonging to him or members of his family, or third persons. He failed to
pay these obligations, and when demands were made for him to do so, laid down his
own terms for their satisfaction which were quite inconsistent with those agreed upon
with his obligees or prescribed by law. When, understandably, the banks refused to
let him have his way, he brought suits right and left, successively if not
contemporaneously, against said banks, its officers, and even the lawyers who
represented the banks in the actions brought by or against him. He sued, as well, the
public prosecutors, the Judges of the Trial Courts, and the Justices of the Court of
Appeals and the Supreme Court who at one time or another, rendered a judgment,
resolution or order adverse to him, as well as the Clerks of Court and other Court
employees signing the notices thereof. In the aggregate, he has initiated or spawned
in different fora the astounding number of no less-than fifty (50) original or review
proceedings, civil, criminal, administrative. For some sixteen (16) years now, to
repeat, he has been continuously cluttering the Courts with his repetitive, and quite
baseless if not outlandish complaints and contentions.

I. CASES INVOLVING TRADERS

ROYAL BANK (TRB)
The first bank that Joaquin T. Borromeo appears to have dealt with was the Traders
Royal Bank (TRB). On June 2, 1978, he got a loan from it in the sum of P45,000.00.
This he secured by a real estate mortgage created over two parcels of land covered
by TCT No. 59596 and TCT No. 59755 owned, respectively, by Socorro BorromeoThakuria (his sister) and Teresita Winniefred Lavarino. On June 16, 1978, Borromeo
obtained a second loan from TRB in the amount of P10,000.00, this time giving as
security a mortgage over a parcel of land owned by the Heirs of Vicente V. Borromeo,
covered by TCT No. RT-7634. Authority to mortgage these three lots was vested in
him by a Special Power of Attorney executed by their respective owners.
Additionally, on April 23, 1980, Borromeo obtained a Letter of Credit from TRB in the
sum of P80,000.00, in consideration of which he executed a Trust Receipt (No.
2
595/80) falling due on July 22, 1980.
Borromeo failed to pay the debts as contracted despite demands therefor.
Consequently, TRB caused the extra-judicial foreclosure of the mortgages given to
secure them. At the public sale conducted by the sheriff on September 7, 1981, the
three mortgaged parcels of land were sold to TRB as the highest bidder, for
P73,529.09.
Within the redemption period, Borromeo made known to the Bank his intention to
redeem the properties at their auction price. TRB manager Blas C. Abril however
made clear that Borromeo would also have to settle his outstanding account under
Trust Receipt No. 595/80 (P88,762.78), supra. Borromeo demurred, and this
disagreement gave rise to a series of lawsuits commenced by him against the Bank,
its officers and counsel, as aforestated.
A. CIVIL CASES
1.
RTC
Case
No. R-22506; CA
CV No. 07015; G.R. No. 83306

G.R.

On October 29, 1982 Borromeo filed a complaint in the Cebu City Regional Trial
Court for specific performance and damages against TRB and its local manager, Blas
Abril, docketed as Civil Case No. R-22506. The complaint sought to compel
defendants to allow redemption of the foreclosed properties only at their auction price,
with stipulated interests and charges, without need of paying the obligation secured
by the trust receipt above mentioned. Judgment was rendered in his favor on
December 20, 1984 by Branch 23 of the Cebu City RTC; but on defendants' appeal to
the Court of Appeals docketed as CA-G.R. CV No. 07015 the judgment was
reversed, by decision dated January 27, 1988. The Court of Appeals held that the
"plaintiff (Borromeo) has lost his right of redemption and can no longer compel
defendant to allow redemption of the properties in question."
Borromeo elevated the case to this court where his appeal was docketed as G.R. No.
83306. By Resolution dated August 15, 1988, this Court's First Division denied his

petition for review "for failure . . . to sufficiently show that the respondent Court of
Appeals had committed any reversible error in its questioned judgment, it appearing
on the contrary that the said decision is supported by substantial evidence and is in
accord with the facts and applicable law." Reconsideration was denied, by Resolution
dated November 23, 1988. A second motion for reconsideration was denied by
Resolution dated January 30, 1989, as was a third such motion, by Resolution dated
April 19, 1989. The last resolution also directed entry of judgment and the remand of
the case to the court of origin for prompt execution of judgment. Entry of judgment
was made on May 12, 1989. By Resolution dated August 7, 1989, the Court denied
another motion of Borromeo to set aside judgment; and by Resolution dated
December 20, 1989, the Court merely noted without action his manifestation and
motion praying that the decision of the Court of Appeals be overturned, and declared
that "no further motion or pleading . . . shall be entertained . . . ."
2.
RTC
Case
CA-G.R. SP No. 22356

No. CEB

8750;

The ink was hardly dry on the resolutions just mentioned before Borromeo initiated
another civil action in the same Cebu City Regional Court by which he attempted to
litigate the same issues. The action, against the new TRB Branch Manager, Jacinto
Jamero, was docketed as Civil Case No. CEB-8750. As might have been anticipated,
the action was, on motion of the defense, dismissed by Order dated May 18,
3
1990, on the ground ofres judicata, the only issue raised in the second action i.e.,
Borromeo's right to redeem the lots foreclosed by TRB having been ventilated in
Civil Case No. R-22506 (Joaquin T. Borromeo vs. Blas C. Abril and Traders Royal
Bank) (supra) and, on appeal, decided with finality by the Court of Appeals and the
Supreme Court in favor of defendants therein.
The Trial Court's judgment was affirmed by the Court of Appeals in CA-G.R. SP No.
22356.
3.
RTC
Case
CA-G.R. SP No. 28221

No. CEB-9485;

In the meantime, and during the pendency of Civil Case No. R-22506, TRB
consolidated its ownership over the foreclosed immovables. Contending that act of
consolidation amounted to a criminal offense, Borromeo filed complaints in the Office
of the City Prosecutor of Cebu against the bank officers and lawyers. These
complaints were however, and quite correctly, given short shrift by that Office.
Borromeo then filed suit in the Cebu City RTC, this time not only against the TRB,
TRB officers Jacinto Jamero and Arceli Bustamante, but also against City Prosecutor
Jufelinito Pareja and his assistants, Enriqueta Belarmino and Eva A. Igot, and the
TRB lawyers, Mario Ortiz and the law, firm, HERSINLAW. The action was docketed
as Civil Case No. CEB-9485. The complaint charged Prosecutors Pareja, Belarmino
and Igot with manifest partiality and bias for dismissing the criminal cases just
mentioned; and faulted TRB and its manager, Jamero, as well as its lawyers, for
consolidating the titles to the foreclosed properties in favor of the bank despite the
pendency of Case No. R-22506. This action also failed. On defendants' motion, it was
dismissed on February 19, 1992 by the RTC. (Branch 22) on the ground of res
judicata(being identical with Civil Case Nos. R-22506 and CEB-8750, already decided

with finality in favor of TRB), and lack of cause of action (as to defendants Pareja,
Belarmino and Igot).
Borromeo's certiorari petition to the Court of Appeals (CA G.R. SP No. 28221) was
4
dismissed by that Court's 16th Division on October 6, 1992, for the reason that the
proper remedy was appeal.
4.
RTC
Case
CA-G.R. SP No. 27100

No. CEB-10368;

Before Case No. CEB-9845 was finally decided, Borromeo filed, on May 30, 1991, still
another civil action for the same cause against TRB, its manager, Jacinto Jamero,
and its lawyers, Atty. Mario Ortiz and the HERSINLAW law office. This action was
docketed as Civil Case No. CEB-10368, and was described as one for "Recovery of
Sums of Money, Annulment of Titles with Damages." The case met the same fate as
the others. It was, on defendants' motion, dismissed on September 9, 1991 by the
5
RTC (Branch 14 ) on the ground of litis pendentia.
The RTC ruled that
Civil Case No. CEB-9485 will readily show that the defendants
therein, namely the Honorable Jufelinito Pareja, Enriqueta
Belarmino, Eva Igot, Traders Royal Bank, Arceli Bustamante,
Jacinto Jamero, Mario Ortiz and HERSINLAW are the same
persons or nearly all of them who are impleaded as defendants in
the present Civil Case No. CEB-10368, namely, the Traders Royal
Bank, Jacinto Jamero, Mario Ortiz and HERSINLAW. The only
difference is that more defendants were impleaded in Civil Case
No. CEB-9485, namely, City Prosecutor Jufelinito Pareja and his
assistants Enriqueta Belarmino and Eva Igot. The inclusion of the
City Prosecutor and his two assistants in Civil Case No. CEB-9485
was however merely incidental as apparently they had nothing to
do with the questioned transaction in said case. . . .
The Court likewise found that the reliefs prayed for were the same as those sought in
Civil Case No. CEB-9485, and the factual bases of the two cases were essentially the
same the alleged fraudulent foreclosure and consolidation of the three properties
mortgaged years earlier by Borromeo to TRB.
For some reason, the Order of September 9, 1991 was set aside by an Order
6
rendered by another Judge on November 11, 1991 the Judge who previously
heard the case having inhibited himself; but this Order of November 11, 1991 was, in
turn, nullified by the Court of Appeals (9th Division), by Decision promulgated on
March 31, 1992 in CA-G.R. SP No. 27100 (Traders Royal Bank vs. Hon. Celso M.
7
Gimenez, etc. and Joaquin T. Borromeo), which decision also directed dismissal of
Borromeo's complaint.
5. RTC Case No. CEB-6452

When a new branch manager, Ronald Sy, was appointed for TRB, Cebu City,
Borromeo forthwith made that event the occasion for another new action, against
TRB, Ronald Sy, and the bank's attorneys Mario Ortiz, Honorato Hermosisima, Jr.,
Wilfredo Navarro and HERSINLAW firm. This action was docketed as Civil Case No.
CEB-6452, and described as one for "Annulment of Title with Damages." The
complaint, dated October 20, 1987, again involved the foreclosure of the three (3)
immovables above mentioned, and was anchored on the alleged malicious, deceitful,
and premature consolidation of titles in TRB's favor despite the pendency of Civil
8
Case No. 22506. On defendant's motion, the trial court dismissed the case on the
ground of prematurity, holding that "(a)t this point . . ., plaintiff's right to seek
annulment of defendant Traders Royal Bank's title will only accrue if and when
plaintiff will ultimately and finally win Civil Case No. R-22506."
6. RTC Case No. CEB-8236
Having thus far failed in his many efforts to demonstrate to the courts the "merit" of
his cause against TRB and its officers and lawyers, Borromeo now took a different
tack by also suing (and thus also venting his ire on) the members of the appellate
courts who had ruled adversely to him. He filed in the Cebu City RTC, Civil Case No.
CEB-8236, impleading as defendants not only the same parties he had theretofore
been suing TRB and its officers and lawyers (HERSINLAW, Mario Ortiz) but
also the Chairman and Members of the First Division of the Supreme Court who had
repeatedly rebuffed him in G.R. No. 83306 (SEE sub-head I, A, 1, supra), as well as
the Members of the 5th, 9th and 10th Divisions of the Court of Appeals who had
likewise made dispositions unfavorable to him. His complaint, dated August 22, 1989,
aimed to recover damages from the defendants Justices for
. . . maliciously and deliberately stating blatant falsehoods and
disregarding evidence and pertinent laws, rendering manifestly
unjust and biased resolutions and decisions bereft of signatures,
facts or laws in support thereof, depriving plaintiff of his cardinal
rights to due process and against deprivation of property without
said process, tolerating, approving and legitimizing the patently
illegal, fraudulent, and contemptuous acts of defendants TRB,
(which) constitute a) GRAVE DERELICTION OF DUTY AND
ABUSE OF POWER emanating from the people, b) FLAGRANT
VIOLATIONS OF THE CONSTITUTION, CARDINAL PRIMARY
RIGHTS DUE PROCESS, ART. 27, 32, CIVIL CODE, Art. 208,
REV. PENAL CODE, and R.A. 3019, for which defendants must be
held liable under said laws.
The complaint also prayed for reconveyance of the "fake titles obtained fraudulently
by TRB/HERSINLAW," and recovery of "100,000.00 moral damages; 30,000.00
exemplary damages; and P5,000.00 litigation expenses." This action, too, met a quick
and unceremonious demise. On motion of defendants TRB and HERSINLAW, the
9
trial court, by Order dated November 7, 1989, dismissed the case.
7. RTC Case No. CEB-13069

It appears that Borromeo filed still another case to litigate the same cause subject of
two (2) prior actions instituted by him. This was RTC Case No. CEB-13069, against
TRB and the latter's lawyers, Wilfredo Navarro and Mario Ortiz. The action was
10
dismissed in an Order dated October 4, 1993, on the ground of res judicata the
subject matter being the same as that in Civil Case No. R-22506, decision in which
was affirmed by the Court of Appeals in CA-G.R. CV No. 07015 as well as by this
11
Court in G.R. No. 83306 and litis pendentia the subject matter being also the
same as that in Civil Case No. CEB-8750, decision in which was affirmed by the
12
Court of Appeals in CA G.R. SP No. 22356.
8. RTC Criminal Case No. CBU-19344;
CA-G.R. SP No. 28275; G.R. No. 112928
On April 17, 1990 the City Prosecutor of Cebu City filed an information with the RTC
of Cebu (Branch 22) against Borromeo charging him with a violation of the Trust
13
Receipts Law. The case was docketed as Criminal Case No. CBU-19344. After a
while, Borromeo moved to dismiss the case on the ground of denial of his right to a
speedy trial. His motion was denied by Order of Judge Pampio A. Abarintos dated
April 10, 1992. In the same order, His Honor set an early date for Borromeo's
arraignment and placed the case "under a continuous trial system on the dates as
may be agreed by the defense and prosecution." Borromeo moved for
reconsideration. When his motion was again found without merit, by Order dated May
21, 1992, he betook himself to the Court of Appeals on a special civil action
of certiorari, to nullify these adverse orders, his action being docketed as CA-G.R. SP
No. 28275.
Here again, Borromeo failed. The Court of Appeals declared that the facts did not
show that there had been unreasonable delay in the criminal action against him, and
14
denied his petition for being without merit.
Borromeo then filed a petition for review with this Court (G.R. No. 112928), but by
resolution dated January 31, 1994, the same was dismissed for failure of Borromeo to
comply with the requisites of Circulars Numbered 1-88 and 19-91. His motion for
reconsideration was subsequently denied by Resolution dated March 23, 1994.
a.
Clarificatory
Communications
Borromeo Re "Minute Resolutions"

to

He next filed a Manifestation dated April 6, 1994 calling the Resolution of March 23,
1994 "Un-Constitutional, Arbitrary and tyrannical and a gross travesty of 'Justice,'"
because it was "signed only by a mere clerk and . . . (failed) to state clear facts and
law," and "the petition was not resolved on MERITS nor by any Justice but by a mere
15
clerk."
The Court responded with another Resolution, promulgated on June 22, 1994, and
with some patience drew his attention to the earlier resolution "in his own previous
case (Joaquin T. Borromeo vs. Court of Appeals and Samson Lao, G.R. No. 82273, 1
16
June 1990; 186 SCRA 1) and on the same issue he now raises." Said Resolution of
June 22, 1994, after reiterating that the notices sent by the Clerk of Court of the

Court En Banc or any of the Divisions simply advise of and quote the resolution
actually adopted by the Court after deliberation on a particular matter, additionally
stated that Borromeo "knew, as well, that the communications (notices) signed by the
Clerk of Court start with the opening clause
Quoted hereunder, for your information, is a resolution of the First
Division of this Court dated. _________,
thereby indisputably showing that it is not the Clerk of Court who prepared or signed
the resolutions."
This was not, by the way, the first time that the matter had been explained to
Borromeo. The record shows that on July 10, 1987, he received a letter from Clerk of
Court Julieta Y. Carreon (of this Court's Third Division) dealing with the subject, in
17
relation to G.R. No. 77243. The same matter was also dealt with in the letter
received by him from Clerk of Court Luzviminda D. Puno, dated April 4, 1989, and in
the letter to him of Clerk of Court (Second Division) Fermin J. Garma, dated May 19,
18
1989. And the same subject was treated of in another Resolution of this Court,
notice of which was in due course served on him, to wit: that dated July 31, 1989, in
19
G.R. No. 87897.
B. CRIMINAL CASES
Mention has already been made of Borromeo's attempt with "all the valor of
ignorance" to fasten not only civil, but also criminal liability on TRB, its officers and
20
lawyers. Several other attempts on his part to cause criminal prosecution of those
he considered his adversaries, will now be dealt with here.
1. I. S. Nos. 90-1187 and 90-1188
On March 7, 1990, Borromeo filed criminal complaints with the Office of the Cebu City
Prosecutor against Jacinto Jamero (then still TRB Branch Manager), "John Doe and
officers of Traders Royal Bank." The complaints (docketed as I.S. Nos. 90-1187-88)
accused the respondents of "Estafa and Falsification of Public Documents." He
claimed, among others that the bank and its officers, thru its manager, Jacinto
Jamero, sold properties not owned by them: that by fraud, deceit and false pretenses,
respondents negotiated and effected the purchase of the (foreclosed) properties from
his (Borromeo's) mother, who "in duress, fear and lack of legal knowledge," agreed to
the sale thereof for only P671,000.00, although in light of then prevailing market
prices, she should have received P588,030.00 more.
21

In a Joint Resolution dated April 11, 1990, the Cebu City Fiscal's office dismissed
the complaints observing that actually, the Deed of Sale was not between the bank
and Borromeo's mother, but between the bank and Mrs. Thakuria (his sister), one of
the original owners of the foreclosed properties; and that Borromeo, being a stranger
to the sale, had no basis to claim injury or prejudice thereby. The Fiscal ruled that the
bank's ownership of the foreclosed properties was beyond question as the matter had
been raised and passed upon in a judicial litigation; and moreover, there was no proof
of the document allegedly falsified nor of the manner of its falsification.

a. I.S. Nos. 87-3795 and 89-4234

Evidently to highlight Borromeo's penchant for reckless filing of unfounded
complaints, the Fiscal also adverted to two other complaints earlier filed in his Office
by Borromeo involving the same foreclosed properties and directed against
respondent bank officers' predecessors (including the former Manager, Ronald Sy)
and lawyers both of which were dismissed for lack of merit. These were:
a. I. S. No. 87-3795 (JOAQUIN T. BORROMEO vs. ATTY. MARIO
ORTIZ and RONALD SY) for "Estafa Through Falsification of Public
Documents, Deceit and False Pretenses." This case was
dismissed by Resolution dated January 19, 1988 of the City
Prosecutor's Office because based on nothing more than a letter
dated June 4, 1985, sent by Bank Manager Ronald Sy to the lessee
of a portion of the foreclosed immovables, advising the latter to
remit all rentals to the bank as new owner thereof, as shown by the
consolidated title; and there was no showing that respondent Atty.
Ortiz was motivated by fraud in notarizing the deed of sale in TRB's
favor after the lapse of the period of redemption, or that Ortiz had
benefited pecuniarily from the transaction to the prejudice of
complainant; and
b. I.S. No. 89-4234 (JOAQUIN T. BORROMEO vs. RONALD SY,
ET AL.) for "Estafa Through False Pretenses and Falsification of
Public Documents." This case was dismissed by Resolution
dated January 31, 1990.
2. I.S.Nos. 88-205 to 88-207
While Joaquin Borromeo's appeal (G.R. No. 83306) was still pending before the
22
Supreme Court, an affidavit was executed in behalf of TRB by Arceli Bustamante,
in connection with the former's fire insurance claim over property registered in its
name one of two immovables formerly owned by Socorro B. Thakuria (Joaquin
23
Borromeo's sister) and foreclosed by said bank. In that affidavit, dated September
10, 1987, Bustamante stated that "On 24 June 1983, TRB thru foreclosure acquired
real property together with the improvements thereon which property is located at F.
Ramos St., Cebu City covered by TCT No. 87398 in the name or TRB." The affidavit
was notarized by Atty. Manuelito B. Inso.
Claiming that the affidavit was "falsified and perjurious" because the claim of title by
TRB over the foreclosed lots was a "deliberate, wilful and blatant fasehood in that,
among others: . . . the consolidation was premature, illegal and invalid," Borromeo
filed a criminal complaint with the Cebu City Fiscal's Office against the affiant
(Bustamante) and the notarizing lawyer (Atty. Inso) for "falsification of public
document, false pretenses, perjury." On September 28, 1988, the Fiscal's Office
24
dismissed the complaint. It found no untruthful statements in the affidavit or any
malice in its execution, considering that Bustamante's statement was based on the
Transfer Certificate of Title in TRB's file, and thus the document that Atty. Inso
notarized was legally in order.

3. OMB-VIS-89-00136
This Resolution of this Court (First Division) in G.R. No. 83306 dated August 15, 1988
sustaining the judgment of the Court of Appeals (10th Division) of January 27,
1988 in CA-G.R. CV No. 07015, supra, was made the subject of a criminal complaint
by Borromeo in the Office of the Ombudsman, Visayas, docketed as OMB-VIS-8900136. His complaint against "Supreme Court Justice (First Div.) and Court of
Appeals Justice (10th Div)" was dismissed for lack of merit in a Resolution issued
25
on February 14, 1990 which, among other things, ruled as follows:
It should be noted and emphasized that complainant has remedies
available under the Rules of Court, particularly on civil procedure
and existing laws. It is not the prerogative of this Office to make a
review of Decisions and Resolutions of judicial courts, rendered
within their competence. The records do not warrant this Office to
take further proceedings against the respondents.
In addition, Sec. 20. of R.A. 6770, "the Ombudsman Act states that
the Office of the Ombudsman may not conduct the necessary
investigation of any administrative act or omission complained of if
it believes that (1) the complainant had adequate remedy in another
judicial or quasi-judicial body;" and Sec. 21 the same law provides
that the Office of the Ombudsman does not have disciplinary
authority over members of the Judiciary.
II. CASES INVOLVING UNITED COCONUT
PLANTERS BANK (UCPB)
26

As earlier stated, Borromeo (together with a certain Mercader) also borrowed

money from the United Coconut Planters Bank (UCPB) and executed a real estate
mortgage to secure repayment thereof. The mortgage was constituted over a 122square-meter commercial lot covered by TCT No. 75680 in Borromeo's name. This
same lot was afterwards sold on August 7, 1980 by Borromeo to one Samson K. Lao
for P170,000.00, with a stipulation for its repurchase (pacto de retro) by him
(Borromeo, as the vendor). The sale was made without the knowledge and consent of
UCPB.
A. CIVIL CASES
Now, just as he had defaulted in the payment of the loans and credit accommodations
he had obtained from the Traders Royal Bank, Borromeo failed in the fulfillment of his
obligations to the UCPB.
Shortly after learning of Borromeo's default, and obviously to obviate or minimize the
ill effects of the latter's delinquency, Lao applied with the same bank (UCPB) for a
loan, offering the property he had purchased from Borromeo as collateral. UCPB was
not averse to dealing with Lao but imposed several conditions on him, one of which
was for Lao to consolidate his title over the property. Lao accordingly instituted a suit
for consolidation of title, docketed as Civil Case No. R-21009. However, as will shortly

be narrated, Borromeo opposed the consolidation prayed for. As a result, UCPB

cancelled Lao's application for a loan and itself commenced proceedings foreclose
the mortgage constituted by Borromeo over the property.
This signaled the beginning of court battles waged by Borromeo not only against Lao,
but also against UCPB and the latter's lawyers, battles which he (Borromeo) fought
contemporaneously with his court war with Traders Royal Bank.
1.
RTC
Case
No. R-21009; AC-G.R.
No. CV-07396; G.R. No. 82273
The first of this new series of court battles was, as just stated, the action initiated by
Samson Lao in the Regional Trial Court of Cebu (Branch 12), docketed as Case No.
R-21009, for consolidation of title in his favor over the 122-square-meter lot subject of
the UCPB mortgage, in accordance with Article 1007 of the Civil Code. In this suit Lao
was represented by Atty. Alfredo Perez, who was later substituted by Atty. Antonio
Regis. Borromeo contested Lao's application.
Judgment was in due course rendered by the RTC (Branch 12, Hon. Francis Militante,
presiding) denying consolidation because the transaction between the parties could
not be construed as a sale with pacto de retrobeing in law an equitable mortgage;
however, Borromeo was ordered to pay Lao the sum of P170,000.00, representing
the price stipulated in the sale a retro, plus the amounts paid by Lao for capital gains
and other taxes in connection with the transaction (P10,497.50).
Both Lao and Borromeo appealed to the Court of Appeals. Lao's appeal was
dismissed for failure of his lawyer to file brief in his behalf. Borromeo's appeal ACG.R. No. CV-07396 resulted in a Decision by the Court of Appeals dated
December 14, 1987, affirming the RTC's judgment in toto.
The Appellate Court's decision was, in turn, affirmed by this Court (Third Division) in a
four-page Resolution dated September 13, 1989, promulgated in G.R. No. 82273
an appeal also taken by Borromeo. Borromeo filed a motion for reconsideration on
several grounds, one of which was that the resolution of September 13, 1989 was
unconstitutional because contrary to "Sec. 4 (3), Art. VIII of the Constitution," it was
not signed by any Justice of the Division, and there was "no way of knowing which
justices had deliberated and voted thereon, nor of any concurrence of at least three of
the members." Since the motion was not filed until after there had been an entry of
judgment, Borromeo having failed to move for reconsideration within the reglementary
period, the same was simply noted without action, in a Resolution dated November
27, 1989.
Notices of the foregoing Resolutions were, in accordance with established rule and
practice, sent to Borromeo over the signatures of the Clerk of Court and Assistant
Clerk of Court (namely: Attys. Julieta Y. CARREON and Alfredo MARASIGAN,
respectively).
a. RTC Case No. CEB-8679

Following the same aberrant pattern of his judicial campaign against Traders Royal
Bank, Borromeo attempted to vent his resentment even against the Supreme Court
officers who, as just stated, had given him notices of the adverse dispositions of this
Court's Third Division. He filed Civil Case No. CEB-8679 in the Cebu City RTC (CFI)
for recovery of damages against "Attys. Julieta Y. Carreon and Alfredo Marasigan,
Division Clerk of Court and Asst. Division Clerk of Court, Third Division, and Atty.
Jose I. Ilustre, Chief of Judicial Records Office." He charged them with usurpation of
judicial functions, for allegedly "maliciously and deviously issuing biased, fake,
baseless and unconstitutional 'Resolution' and 'Entry of Judgment' in G.R. No.
82273."

petition is filed merely to forestall the early execution of judgment

and for non-compliance with the rules. The resolution denying due
course always gives the legal basis. As emphasized in In
Re: Wenceslao Laureta, 148 SCRA 382, 417 [1987], "[T]he Court is
not 'duty bound' to render signed Decisions all the time. It has
ample discretion to formulate Decisions and/or Minute
Resolutions, provided a legal basis is given, depending on its
evaluation of a case" . . . This is the only way whereby it can act on
all cases filed before it and, accordingly, discharge its constitutional
functions. . . .

Summonses were issued to defendants by RTC Branch 18 (Judge Rafael R. Ybaez,

presiding). These processes were brought to the attention of this Court's Third
Division. The latter resolved to treat the matter as an incident in G.R. No. 82273, and
referred it to the Court En Banc on April 25, 1990. By Resolution (issued in said G.R.
No. 82273, supra) dated June 1, 1990, the Court En Banc ordered Judge Ybaez to
quash the summonses, to dismiss Civil Case No. CEB-8679, and "not to issue
summons or otherwise to entertain cases of similar nature which may in the future be
filed in his court." Accordingly, Judge Ibaez issued an Order on June 6, 1990
quashing the summonses and dismissing the complaint in said Civil Case No. CEB8679.

. . . (W)hen the Court, after deliberating on a petition and any

subsequent pleadings, manifestations, comments, or motions
decides to deny due course to the petition and states that the
questions raised are factual, or no reversible error in the
respondent court's decision is shown, or for some other legal basis
stated in the resolution, there is sufficient compliance with the
constitutional requirement . . . (of Section 14, Article VIII of the
Constitution "that no petition for review or motion for
reconsideration shall be refused due course or denied without
stating the legal basis thereof").

27

The Resolution of June 1, 1990 explained to Borromeo in no little detail the nature
and purpose of notices sent by the Clerks of Court of decisions or resolutions of the
Court En Banc or the Divisions, in this wise:
This is not the first time that Mr. Borromeo has filed
charges/complaints against officials of the Court. In several letter
complaints filed with the courts and the Ombudsman, Borromeo
had repeatedly alleged that he "suffered injustices," because of the
disposition of the four (4) cases he separately appealed to this
Court which were resolved by minute resolutions, allegedly in
violation of Sections 4 (3), 13 and 14 of Article VIII of the 1987
Constitution. His invariable complaint is that the resolutions which
disposed of his cases do not bear the signatures of the Justices
who participated in the deliberations and resolutions and do not
show that they voted therein. He likewise complained that the
resolutions bear no certification of the Chief Justice and that they
did not state the facts and the law on which they were based and
were signed only by the Clerks of Court and therefore
"unconstitutional, null and void."
xxx xxx xxx
The Court reminds all lower courts, lawyers, and litigants that it
disposes of the bulk of its cases by minute resolutions and decrees
them as final and executory, as were a case is patently without
merit, where the issues raised are factual in nature, where the
decision appealed from is in accord with the facts of the case and
the applicable laws, where it is clear from the records that the

For a prompt dispatch of actions of the Court, minute resolutions

are promulgated by the Court through the Clerk of Court, who takes
charge of sending copies thereof to the parties concerned by
quoting verbatim the resolution issued on a particular case. It is the
Clerk of Court's duty to inform the parties of the action taken on
their cases quoting the resolution adopted by the Court. The Clerk
of Court never participates in the deliberations of a case. All
decisions and resolutions are actions of the Court. The Clerk of
Court merely transmits the Court's action. This was explained in the
case G.R. No. 56280, "Rhine Marketing Corp. v. Felix Gravante,
et al.," where, in a resolution dated July 6, 1981, the Court
said "[M]inute resolutions of this Court denying or dismissing
unmeritorious petitions like the petition in the case at bar, are the
result of a thorough deliberation among the members of this Court,
which does not and cannot delegate the exercise of its judicial
functions to its Clerk of Court or any of its subalterns, which should
be known to counsel. When a petition is denied or dismissed by this
Court, this Court sustains the challenged decision or order together
with its findings of facts and legal conclusions.
Minute resolutions need not be signed by the members of the Court
who took part in the deliberations of a case nor do they require the
certification of the Chief Justice. For to require members of the
Court to sign all resolutions issued would not only unduly delay the
issuance of its resolutions but a great amount of their time would be
spent on functions more properly performed by the Clerk of Court
and which time could be more profitably used in the analysis of
cases and the formulation of decisions and orders of important
nature and character. Even with the use of this procedure, the

Court is still struggling to wipe out the backlogs accumulated over

the years and meet the ever increasing number of cases coming to
it. . . .
b.
RTC
CIVIL
CASE
6740; G.R. No. 84054

NO. CEB-(6501)

It is now necessary to digress a little and advert to actions which, while having no
relation to the UCPB, TRB or SBTC, are relevant because they were the predicates
for other suits filed by Joaquin Borromeo against administrative officers of the
Supreme Court and the Judge who decided one of the cases adversely to him.
The record shows that on or about December 11, 1987, Borromeo filed a civil action
for damages against a certain Thomas B. Tan and Marjem Pharmacy, docketed as
Civil Case No. CEB-6501. On January 12, 1988, the trial court dismissed the case,
without prejudice, for failure to state a cause of action and prematurity (for noncompliance with P.D. 1508).
What Borromeo did was simply to re-file the same complaint with the same Court, on
March 18, 1988. This time it was docketed as Civil Case No. CEB-6740, and
assigned to Branch 17 of the RTC of Cebu presided by Hon. Mario Dizon. Again,
however, on defendants' motion, the trial court dismissed the case, in an order dated
May 28, 1988. His first and second motions for reconsideration having been denied,
Borromeo filed a petition for review before this Court, docketed as G.R. No. 84054
(Joaquin T. Borromeo vs. Tomas Tan and Non. Mario Dizon).
In a Resolution dated August 3, 1988, the Court required petitioner to comply with the
rules by submitting a verified statement of material dates and paying the docket and
legal research fund fees; it also referred him to the Citizens Legal Assistance Office
for help in the case. His petition was eventually dismissed by Resolution of the
Second Division dated November 21, 1988, for failure on his part to show any
reversible error in the trial court's judgment. His motion for reconsideration was
denied with finality, by Resolution dated January 18, 1989.
Borromeo wrote to Atty. Fermin J. Garma (Clerk of Court of the Second Division) on
April 27, 1989 once more remonstrating that the resolutions received by him had not
been signed by any Justice, set forth no findings of fact or law, and had no
certification of the Chief Justice. Atty. Garma replied to him on May 19, 1989, pointing
out that "the minute resolutions of this Court denying dismissing petitions, like the
petition in the case at bar, which was denied for failure of the counsel and/or
petitioner to sufficiently show that the Regional Trial Court of Cebu, Branch 17, had
committed any reversible error in the questioned judgment [resolution dated
November 21, 1988], are the result of a thorough deliberation among the members of
this Court, which does not and cannot delegate the exercise of its judicial function to
its Clerk of Court or any of its subalterns. When the petition is denied or dismissed by
the Court, it sustains the challenged decision or order together with its findings of
facts and legal conclusions."

Borromeo obviously had learned nothing from the extended Resolution of June 1,
1990 in G.R. No. 82273, supra(or the earlier communications to him on the same
subject) which had so clearly pointed out that minute resolutions of the Court are as
much the product of the Members' deliberations as full-blown decisions or resolutions,
and that the intervention of the Clerk consists merely in the ministerial and routinary
function of communicating the Court's action to the parties concerned.
c. RTC Case No. CEB-9042
What Borromeo did next, evidently smarting from this latest judicial rebuff, yet another
in an already long series, was to commence a suit against Supreme Court (Second
Division) Clerk of Court Fermin J. Garma and Assistant Clerk of Court Tomasita Dris.
They were the officers who had sent him notices of the unfavorable resolutions in
G.R. No. 84054, supra. His suit, filed on June 1, 1990, was docketed as Case No.
CEB-9042 (Branch 8, Hon. Bernardo Salas presiding). Therein he complained
essentially of the same thing he had been harping on all along: that in relation to G.R.
No. 91030 in which the Supreme Court dismissed his petition for "technical
reasons" and failure to demonstrate any reversible error in the challenged judgment
the notice sent to him of the "unsigned and unspecific" resolution of February
19, 1990, denying his motion for reconsideration had been signed only by the
defendant clerks of court and not by the Justices. According to him, he had thereupon
written letters to defendants demanding an explanation for said "patently unjust and
un-Constitutional resolutions," which they ignored; defendants had usurped judicial
functions by issuing resolutions signed only by them and not by any Justice, and
without stating the factual and legal basis thereof; and defendants' "wanton, malicious
and patently abusive acts" had caused him "grave mental anguish, severe moral
shock, embarrassment, sleepless nights and worry;" and consequently, he was
entitled to moral damages of no less than P20,000.00 and exemplary damages of
P10,000.00, and litigation expenses of P5,000.00.
On June 8, 1990, Judge Renato C. Dacudao ordered the records of the case
transmitted to the Supreme Court conformably with its Resolution dated June 1, 1990
in G.R. No. 82273, entitled "Joaquin T. Borromeo vs. Hon. Court of Appeals and
Samson-Lao," supra directing that all complaints against officers of that Court be
28
forwarded to it for appropriate action.
Borromeo filed a "Manifestation/Motion" dated June 27, 1990 asking the Court to
"rectify the injustices" committed against him in G.R. Nos. 83306, 84999, 87897,
77248 and 84054. This the Court ordered expunged from the record (Resolution, July
19, 1990).
2.
RTC
Case
No. R-21880; CA-G.R.
CV No. 10951; G.R. No. 87897
Borromeo also sued to stop UCPB from foreclosing the mortgage on his property. In
the Cebu City RTC, he filed a complaint for "Damages with Injunction," which was
docketed as Civil Case No. R-21880 (Joaquin T. Borromeo vs. United Coconut
Planters Bank, et al.). Named defendants in the complaint were UCPB, Enrique
Farrarons(UCPB Cebu Branch Manager) and Samson K. Lao. UCPB was
represented in the action by Atty. Danilo Deen, and for a time, by Atty. Honorato

Hermosisima (both being then resident partners of ACCRA Law Office). Lao was
represented by Atty. Antonio Regis. Once again, Borromeo was rebuffed. The Cebu
RTC (Br. 11, Judge Valeriano R. Tomol, Jr. presiding) dismissed the complaint,
upheld UCPB's right to foreclose, and granted its counterclaim for moral damages in
the sum of P20,000.00; attorney's fees amounting to P10,000.00; and litigation
expenses of P1,000.00.

to persuade the Court that the errors imputed to the Court of

Appeals had indeed been committed and therefore, there was no
cause to modify the conclusions set forth in that judgment; and in
such a case, there is obviously no point in reproducing and
restating the conclusions and reasons therefor of the Court of
Appeals.

Borromeo perfected an appeal to the Court of Appeals where it was docketed as CAG.R. CV No. 10951. That Court, thru its Ninth Division (per Martinez, J., ponente, with
de la Fuente and Pe, JJ., concurring), dismissed his appeal and affirmed the Trial
Court's judgment.

Premises considered, the Court further Resolved to DIRECT

ENTRY OF JUDGMENT.

Borromeo filed a petition far review with the Supreme Court which, in G.R. No. 87897
dismissed it for insufficiency in form and substance and for being "largely
unintelligible." Borromeo's motion for reconsideration was denied by Resolution dated
June 25, 1989. A second motion for reconsideration was denied in a Resolution dated
July 31, 1989 which directed as well entry of judgment (effected on August 1, 1989).
In this Resolution, the Court (First Division) said:
The Court considered the Motion for Reconsideration dated July 4,
1989 filed by petitioner himself and Resolved to DENY the same for
lack of merit, the motion having been filed without "express leave of
court" (Section 2, Rule 52, Rules of Court) apart from being a
reiteration merely of the averments of the Petition for Review dated
April 14, 1989 and the Motion for Reconsideration dated May 25,
1989. It should be noted that petitioner's claims have already been
twice rejected as without merit, first by the Regional Trial Court of
Cebu and then by the Court of Appeals. What petitioner desires
obviously is to have a third ruling on the merits of his claims, this
time by this Court. Petitioner is advised that a review of a decision
of the Court of Appeals is not a matter of right but of sound judicial
discretion and will be granted only when there is a special and
important reason therefor (Section 4, Rule 45); and a petition for
review may be dismissed summarily on the ground that "the appeal
is without merit, or is prosecuted manifestly for delay or the
question raised is too unsubstantial to require consideration"
(Section 3, Rule 45), or that only questions of fact are raised in the
petition, or the petition otherwise fails to comply with the formal
requisites prescribed therefor (Sections 1 and 2, Rule 45; Circular
No. 1-88). Petitioner is further advised that the first sentence of
Section 14, Article VIII of the 1987 Constitution refers to a decision,
and has no application to aresolution as to which said section
pertinently provides that a resolution denying a motion for
reconsideration need state only the legal basis therefor; and that
the resolution of June 26, 1989 denying petitioner's first Motion for
Reconsideration dated May 25, 1989 does indeed state the legal
reasons therefor. The plain and patent signification of the grounds
for denial set out in the Resolution of June 26, 1989 is that the
petitioner's arguments aimed at the setting aside of the
resolution denying the petition for review and consequently bringing
about a review of the decision of the Court of Appeals had failed

On August 13, 1989 Borromeo wrote to Atty. Estrella C. Pagtanac, then the Clerk of
Court of the Court's First Division, denouncing the resolution above mentioned as "a
LITANY OF LIES, EVASIONS, and ABSURD SELF-SERVING LOGIC from a
Supreme Court deluded and drunk with power which it has forgotten emanates from
the people," aside from being "patently UNCONSTITUTIONAL for absence of
signatures and facts and law: . . . and characterizing the conclusions therein as "the
height of ARROGANCE and ARBITRARINESS assuming a KING-LIKE AND EVEN
GOD-LIKE
POWER totally at variance and contradicted by . . . CONSTITUTIONAL provisions . .
." To the letter Borromeo attached copies of (1) his "Open Letter to the Ombudsman"
dated August 10, 1989 protesting the Court's "issuing UNSIGNED, UNSPECIFIC, and
BASELESS 'MINUTE RESOLUTIONS;'" (2) his "Open Letter of Warning" dated
August 12, 1989; and (3) a communication of Domingo M. Quimlat, News
Ombudsman, Phil. Daily Inquirer, dated August 10, 1989. His letter was ordered
expunged from the record because containing "false, impertinent and scandalous
matter (Section 5, Rule 9 of the Rules of Court)." Another letter of the same ilk, dated
November 7, 1989, was simply "NOTED without action" by Resolution promulgated
on December 13, 1989.
3.
RTC
Case
No. CEB-4852; CA
SP No. 14519; G.R. No. 84999

G.R.

In arrant disregard of established rule and practice, Borromeo filed another action to
invalidate the foreclosure effected at the instance of UCPB, which he had
unsuccessfully tried to prevent in Case No. CEB-21880. This was Civil Case No.
CEB-4852 of the Cebu City RTC (Joaquin T. Borromeo vs. UCPB, et al.) for
"Annulment of Title with Damages." Here, UCPB was represented by Atty. Laurence
Fernandez, in consultation with Atty. Deen.
On December 26, 1987, the Cebu City RTC (Br. VII, Hon. Generoso A. Juaban,
presiding) dismissed the complaint on the ground of litis pendentia and ordered
Borromeo to pay attorney's fees (P5,000.00) and litigation expenses (P1,000.00).
Borromeo instituted a certiorari action in the Court of Appeals to annul this judgment
(CA G.R. SP No. 14519); but his action was dismissed by the Appellate Court on
June 7, 1988 on account of his failure to comply with that Court's Resolution of May
13, 1988 for submission of certified true copies of the Trial Court's decision of
December 26, 1987 and its Order of February 26, 1988, and for statement of "the
dates he received . . . (said) decision and . . . order."

Borromeo went up to this Court on appeal, his appeal being docketed as G.R. No.
84999. In a Resolution dated October 10, 1988, the Second Division required
comment on Borromeo's petition for review by the respondents therein named, and
required Borromeo to secure the services of counsel. On November 9, 1988, Atty.
Jose L. Cerilles entered his appearance for Borromeo. After due proceedings,
Borromeo's petition was dismissed, by Resolution dated March 6, 1989 of the Second
Division for failure to sufficiently show that the Court of Appeals had committed any
reversible error in the questioned judgment. His motion for reconsideration dated April
4, 1989, again complaining that the resolution contained no findings of fact and law,
was denied.
a. RTC Case No. CEB-8178
Predictably, another action, Civil Case No. CEB-8178, was commenced by Borromeo
in the RTC of Cebu City, this time against the Trial Judge who had lately rendered
judgment adverse to him, Judge Generoso Juaban. Also impleaded as defendants
were UCPB, and Hon. Andres Narvasa (then Chairman, First Division), Estrella
G.Pagtanac and Marissa Villarama (then, respectively, Clerk of Court and Assistant
Clerk of Court of the First Division), and others. Judge German G. Lee of Branch 15
of said Court to which the case was raffled caused issuance of summonses
which were in due course served on September 22, 1989, among others, on said
defendants in and of the Supreme Court. In an En Banc Resolution dated October 2,
1989 in G.R. No. 84999 this Court, required Judge Lee and the Clerk of Court
and Assistant Clerk of Court of the Cebu RTC to show cause why no disciplinary
action should be taken against them for issuing said summonses.

sale thereof by Lao to Logarta. Borromeo appealed to the Court of Appeals, but that
Court, in CA-G.R. CV No. 04097, affirmed the Trial Court's judgment, by Decision
promulgated on October 10, 1986.
Borromeo came up to this Court. on appeal, his review petition being docketed as
G.R. No. 77248. By Resolution of the Second Division of March 16, 1987, however,
his petition was denied for the reason that "a) the petition as well as the docket and
legal research fund fees were filed and paid late; and (b) the issues raised are factual
and the findings thereon of the Court of Appeals are final." He moved for
reconsideration; this was denied by Resolution dated June 3, 1987.
He thereafter insistently and persistently still sought reconsideration of said adverse
resolutions through various motions and letters, all of which were denied. One of his
letters inter alia complaining that the notice sent to him by the Clerk of Court did
not bear the signature of any Justice elicited the following reply from Atty. Julieta Y.
Carreon, Clerk of Court of the Third Division, dated July 10, 1987, reading as follows:
Dear Mr. Borromeo:
This refers to your letter dated June 9, 1987 requesting for a copy
of the actual resolution with the signatures of all the Justices of the
Second Division in Case G.R. No. 77243 whereby the motion for
reconsideration of the dismissal of the petition was denied for lack
of merit.

Shortly thereafter, Atty. Jose L. Cerilles who, as already stated, had for a time
represented Borromeo in G.R. No. 84999 filed with this Court his withdrawal of
appearance, alleging that there was "no compatibility" between him and his client,
Borromeo because "Borromeo had been filing pleadings, papers; etc. without . . .
(his) knowledge and advice" and declaring that he had "not advised and . . . (had)
no hand in the filing of (said) Civil Case CEB 8178 before the Regional Trial Court in
Cebu. On the other hand, Judge Lee, in his "Compliance" dated October 23, 1989,
apologized to the Court and informed it that he had already promulgated an order
dismissing Civil Case No. CEB-8178 on motion of the principal defendants therein,
namely, Judge Generoso Juaban and United Coconut Planters Bank (UCPB). Atty.
Cerilles' withdrawal of appearance, and Judge Lee's compliance, were noted by the
Court in its Resolution dated November 29, 1989.

In connection therewith, allow us to cite for your guidance,

Resolution dated July 6, 1981 in G.R. No. 56280, Rhine Marketing
Corp. v. Felix Gravante, Jr., et al., wherein the Supreme Court
declared that "(m)inute resolutions of this Court denying or
dismissing unmeritorious petitions like the petition in the case at
bar, are the result of a thorough deliberation among the members of
this Court, which does not and cannot delegate the exercise of its
judicial functions to its Clerk of Court or any of its subalterns, which
should be known to counsel. When a petition is denied or dismissed
by this Court, this Court sustains the challenged decision or order
together with its findings of facts and legal conclusions." It is the
Clerk of Court's duty to notify the parties of the action taken on their
case by quoting the resolution adopted by the Court.

4.
RTC
Case
No. CEB-374; CA-G.R.
CV No. 04097; G.R. No. 77248

Very truly yours,

It is germane to advert to one more transaction between Borromeo and Samson K.

29
Lao which gave rise to another action that ultimately landed in this Court. The
transaction involved a parcel of land of Borromeo's known as the "San Jose Property"
(TCT No. 34785). Borromeo sued Lao and another person (Mariano Logarta) in the
Cebu Regional Trial Court on the theory that his contract with the latter was not an
absolute sale but an equitable mortgage. The action was docketed as Case No. CEB374. Judgment was rendered against him by the Trial Court (Branch 12) declaring
valid and binding the purchase of the property by Lao from him, and the subsequent

JULIETA Y. CARREON
B. CRIMINAL CASES
Just as he had done with regard to the cases involving the Traders Royal Bank, and
similarly without foundation, Borromeo attempted to hold his adversaries in the cases
concerning the UCPB criminally liable.

1. Case No; OMB-VIS-89-00181

In relation to the dispositions made of Borromeo's appeals and other attempts to
30
overturn the judgment of the RTC in Civil Case No. 21880, Borromeo filed with the
Office of the Ombudsman (Visayas) on August 18, 1989, a complaint against the
Chairman and Members of the Supreme Court's First Division; the Members of the
Ninth Division of the Court of Appeals, Secretary of Justice Sedfrey Ordoez,
Undersecretary of Justice Silvestre Bello III, and Cebu City Prosecutor Jufelinito
Pareja, charging them with violations of the Anti-Graft and Corrupt Practices Act and
the Revised Penal Code.
31

By Resolution dated January 12, 1990, the Office of the Ombudsman dismissed
Borromeo's complaint, opining that the matters therein dealt with had already been
tried and their merits determined by different courts including the Supreme Court
(decision, June 26, 1989, in G.R. No. 87987). The resolution inter alia stated that,
"Finally, we find it unreasonable for complainant to dispute and defiantly refuse to
acknowledge the authority of the decree rendered by the highest tribunal of the land
in this case. . . ."
2. Case No. OMB-VIS-90-00418
A second complaint was filed by Borromeo with the Office of the Ombudsman
(Visayas), dated January 12, 1990, against Atty. Julieta Carreon, Clerk of Court of the
Third Division, Supreme Court, and others, charging them with a violation of R.A.
3019 (and the Constitution, the Rules of Court, etc.) for supposedly usurping judicial
functions in that they issued Supreme Court resolutions (actually, notices of
resolutions) in connection with G.R. No. 82273 which did not bear the justices'
32
signatures. In a Resolution dated March 19, 1990, the Office of the Ombudsman
dismissed his complaint for "lack of merit" declaring inter alia that "in all the
questioned actuations of the respondents alleged to constitute usurpation . . . it
cannot be reasonably and fairly inferred that respondents really were the ones
rendering them," and "it is not the prerogative of this office to review the correctness
33
of judicial resolutions."
III. CASES INVOLVING SECURITY
BANK & TRUST CO. (SBTC)
A. CIVIL CASES
1.
RTC
Case
No. 21615; CAG.R. No. 20617; G.R. No. 94769
The third banking institution which Joaquin T. Borromeo engaged in running court
battles, was the Security Bank & Trust Company (SBTC). From it Borromeo had
obtained five (5) loans in the aggregate sum of P189,126.19, consolidated in a single
Promissory Note on May 31, 1979. To secure payment thereof, Summa Insurance
Corp. (Summa) issued a performance bond which set a limit of P200,000.00 on its
liability thereunder. Again, as in the case of his obligations to Traders Royal Bank and

UCPB, Borromeo failed to discharge his contractual obligations. Hence, SBTC

brought an action in the Cebu City RTC against Borromeo and Summa for collection.
The action was docketed as Civil Case No. R-21615, and was assigned to Branch 10,
Judge Leonardo Caares, presiding. Plaintiff SBTC was represented by Atty. Edgar
Gica, who later withdrew and was substituted by the law firm, HERSINLAW. The latter
appeared in the suit through Atty. Wilfredo Navarro.
Judgment by default was rendered in the case on January 5, 1989; both defendents
were sentenced to pay to SBTC, solidarily, the amount of P436,771.32; 25% thereof
as attorney's fees (but in no case less than P20,000.00); and P5,000.00 as litigation
expenses; and the costs. A writ of execution issued in due course pursuant to which
an immovable of Borromeo was levied on, and eventually sold at public auction on
October 19, 1989 in favor of the highest bidder, SBTC.
On February 5, 1990, Borromeo filed a motion to set aside the judgment by default,
but the same was denied on March 6, 1990. His Motion for Reconsideration having
likewise been denied, Borromeo went to the Court of Appeals for relief (CA-G.R. No.
20617), but the latter dismissed his petition. Failing in his bid for reconsideration,
Borromeo appealed to this Court on certiorari his appeal being docketed as G.R.
No. 94769. On September 17, 1990, this Court dismissed his petition, and
subsequently denied with finality his motion for reconsideration. Entry of Judgment
was made on December 26, 1990.
However, as will now be narrated, and as might now have been anticipated in light of
his history of recalcitrance and bellicosity, these proceedings did not signify the end of
litigation concerning Borromeo's aforesaid contractual commitments to SBTC, but
only marked the start of another congeries of actions and proceedings, civil and
criminal concerning the same matter, instituted by Borromeo.
2. RTC Case No. CEB-9267
While G.R. No. 94769 was yet pending in the Supreme Court, Borromeo commenced
a suit of his own in the Cebu RTC against SBTC; the lawyers who represented it in
Civil Case No. R-21625 HERSINLAW, Atty.Wilfredo Navarro, Atty. Edgar
Gica; and even the Judge who tried and disposed of the suit, Hon. Leonardo
Caares. He denominated his action, docketed as Civil Case No. CEB-9267, as one
for "Damages from Denial of Due Process, Breach of Contract, Fraud, Unjust
Judgment, with Restraining Order and Injunction." His complaint accused defendants
of "wanton, malicious and deceitful acts" in "conniving to deny plaintiff due process
and defraud him through excessive attorney's fees," which acts caused him grave
mental and moral shock, sleepless nights, worry, social embarrassment and severe
anxiety for which he sought payment of moral and exemplary damages as well as
litigation expenses.
By Order dated May 21, 1991, the RTC of Cebu City, Branch 16 (Hon. Godardo
Jacinto, presiding) granted the demurrer to evidence filed by defendants and
dismissed the complaint, holding that "since plaintiff failed to introduce evidence to

support . . . (his) causes of action asserted . . ., it would be superfluous to still require

defendants to present their own evidence as there is nothing for them to controvert."
2.
RTC
Case
CA-G.R. CV No. 39047

the temperament he has, by far, exhibited, the appellant is,

however, sufficiently warned that similar displays in the future shall
accordingly be dealt with with commensurate severity.

No. CEB-10458;

Nothing daunted, and running true to form, Borromeo filed on July 2, 1991 still
another suit against the same parties SBTC, HERSINLAW, and Judge Caares
34
but now including Judge Godardo Jacinto, who had rendered the latest judgment
against him. This suit, docketed as Civil Case No. CEB-10458, was, according to
Borromeo, one "for Damages (For Unjust Judgment and Orders, Denial of Equal
Protection of the Laws Violation of the Constitution, Fraud and Breach of Contract)."
Borromeo faulted Judges Caares and Jacinto "for the way they decided the two
cases (CVR-21615 & CEB NO. 9267)," and contended that defendants committed
"wanton, malicious, and unjust acts" by "conniving to defraud plaintiff and deny him
equal protection of the laws and due process," on account of which he had been
"caused untold mental anguish, moral shock, worry, sleepless nights, and
embarrassment for which the former are liable under Arts. 20, 21, 27, and 32 of the
Civil Code."
The defendants filed motions to dismiss. By Order dated August 30, 1991, the RTC of
Cebu City, Branch 15 (Judge German G. Lee, Jr., presiding) dismissed the complaint
on grounds of res judicata, immunity of judges from liability in the performance of their
official functions, and lack of jurisdiction.
Borromeo took an appeal to the Court of Appeals, which docketed it as CA-G.R. CV
No. 39047.
In the course thereof, he filed motions to cite Atty. Wilfredo F. Navarro, lawyer of
SBTC, for contempt of court. The motions were denied by Resolution of the Court of
35
Appeals (Special 7th Division) dated April 13, 1993. Said the Court:
Stripped of their disparaging and intemperate innuendoes, the
subject motions, in fact, proffer nothing but a stark difference in
opinion as to what can, or cannot, be considered res judicata under
the circumstances.
xxx xxx xxx
By their distinct disdainful tenor towards the appellees, and his
apparent penchant for argumentum ad hominen, it is, on the
contrary the appellant who precariously treads the acceptable limits
of argumentation and personal advocacy. The Court, moreover,
takes particular note of the irresponsible leaflets he admits to have
authored and finds them highly reprehensible and needlessly
derogatory to the dignity, honor and reputation of the Courts. That
he is not a licensed law practitioner is, in fact, the only reason that
his otherwise contumacious behavior is presently accorded the
patience and leniency it probably does not deserve. Considering

IV. OTHER CASES

A. RTC Case No. CEB-2074; CA-G.R,
CV No. 14770; G.R. No. 98929
One other case arising from another transaction of Borromeo with Samson K. Lao is
pertinent. This is Case No. CEB-2974 of the Regional Trial Court of Cebu. It appears
that sometime in 1979, Borromeo was granted a loan of P165,000.00 by the
Philippine Bank of Communications (PBCom) on the security of a lot belonging to him
36
in San Jose Street, Cebu City, covered by TCT No. 34785. Later, Borromeo
obtained a letter of credit in the amount of P37,000.00 from Republic Planters Bank,
with Samson Lao as co-maker. Borromeo failed to pay his obligations; Lao agreed to,
and did pay Borromeo's obligations to both banks (PBCom and Republic), in
consideration of which a deed of sale was executed in his favor by Borromeo over two
(2) parcels of land, one of which was that mortgaged to PBCom, as above stated. Lao
then mortgaged the land to PBCom as security for his own loan in the amount of
P240,000.00.
Borromeo subsequently sued PBCom, some of its personnel, and Samson Lao in the
Cebu Regional Trial Court alleging that the defendants had conspired to deprive him
of his property. Judgment was rendered against him by the Trial Court. Borromeo
elevated the case to the Court of Appeals where his appeal was docketed as CA-G.R.
CV No. 14770. On March 21, 1990, said Court rendered judgment affirming the Trial
Court's decision, and on February 7, 1991, issued a Resolution denying Borromeo's
motion for reconsideration. His appeal to this Court, docketed as G.R. No. 98929, was
given short shrift. On May 29, 1991, the Court (First Division) promulgated a
Resolution denying his petition for review "for being factual and for failure . . . to
sufficiently show that respondent court had committed any reversible error in its
questioned judgment."
Stubbornly, in his motion for reconsideration, he insisted the notices of the resolutions
sent to him were unconstitutional and void because bearing no signatures of the
Justices who had taken part in approving the resolution therein mentioned.
B. RTC Case No. CEB-11528
What would seem to be the latest judicial dispositions rendered against Borromeo, at
least as of date of this Resolution, are two orders issued in Civil Case No. CEB-11528
of the Regional Trial Court at Cebu City (Branch 18), which was yet another case filed
by Borromeo outlandishly founded on the theory that a judgment promulgated against
him by the Supreme Court (Third Division) was wrong and "unjust." Impleaded as
defendant in the action was former Chief Justice Marcelo B. Fernan, as Chairman of
the Third Division at the time in question. On August 31, 1994 the presiding judge,
Hon. Galicano O. Arriesgado, issued a Resolution inter aliadismissing Borromeo's

complaint "on grounds of lack of jurisdiction and res judicata." His Honor made the
following pertinent observations:
. . . (T)his Court is of the well-considered view and so holds that this
Court has indeed no jurisdiction to review, interpret or reverse the
judgment or order of the Honorable Supreme Court. The acts or
omissions complained of by the plaintiff against the herein
defendant and the other personnel of the highest Court of the land
as alleged in paragraphs 6 to 12 of plaintiff's complaint are certainly
beyond the sphere of this humble court to consider and pass upon
to determine their propriety and legality. To try to review, interpret
or reverse the judgment or order of the Honorable Supreme Court
would appear not only presumptuous but also contemptuous. As
argued by the lawyer for the defendant, a careful perusal of the
allegations in the complaint clearly shows that all material
allegations thereof are directed against a resolution of the Supreme
Court which was allegedly issued by the Third Division composed
of five (5) justices. No allegation is made directly against defendant
Marcelo B. Fernan in his personal capacity. That being the case,
how could this Court question the wisdom of the final order or
judgment of the Supreme Court (Third Division) which according to
the plaintiff himself had issued a resolution denying plaintiffs
petition and affirming the Lower Court's decision as reflected in the
"Entry of Judgment." Perhaps, if there was such violation of the
Rules of Court, due process and Sec. 14, Art. 8 of the Constitution
by the defendant herein, the appropriate remedy should not have
been obtained before this Court. For an inferior court to reverse,
interpret or review the acts of a superior court might be construed to
a certain degree as a show of an uncommon common sense.
Lower courts are without supervising jurisdiction to interpret or to
reverse the judgment of the higher courts.
Borromeo's motion for reconsideration dated September 20, 1994 was denied "for
lack of sufficient factual and legal basis" by an Order dated November 15, 1994.
V. ADMINISTRATIVE CASE No. 3433
A. Complaint Against Lawyers
of his Court Adversaries
Borromeo also initiated administrative disciplinary proceedings against the lawyers
who had appeared for his adversaries UCPB and Samson K. Lao in the actions
above mentioned, and others. As already mentioned, these lawyers were: Messrs.
Laurence Fernandez, Danilo Deen, Honorato Hermosisima, Antonio Regis, and
Alfredo Perez. His complaint against them, docketed as Administrative Case No.
3433, prayed for their disbarment. Borromeo averred that the respondent lawyers
connived with their clients in (1) maliciously misrepresenting a deed of sale with pacto
de retro as a genuine sale, although it was actually an equitable mortgage; (2)
fraudulently depriving complainant of his proprietary rights subject of the Deed of
Sale; and (3) defying two lawful Court orders, all in violation of their lawyer's oath to

do no falsehood nor consent to the doing of any in Court. Borromeo alleged that
respondents Perez and Regis falsely attempted to consolidate title to his property in
favor of Lao.
B. Answer of Respondent Lawyers
The respondent lawyers denounced the disbarment complaint as "absolutely
baseless and nothing but pure harassment." In a pleading dated July 10, 1990,
entitled "Comments and Counter Motion to Cite Joaquin Borromeo in Contempt of
Court;" July 10, 1990, filed by the Integrated Bar of the Philippines Cebu City Chapter,
signed by Domero C. Estenzo (President), Juliano Neri (Vice-President), Ulysses
Antonio C. Yap (Treasurer); Felipe B. Velasquez (Secretary), Corazon E. Valencia
(Director), Virgilio U. Lainid (Director), Manuel A. Espina (Director), Ildefonsa A.
Ybaez (Director), Sylvia G. Almase (Director), and Ana Mar Evangelista P. Batiguin
(Auditor). The lawyers made the following observations:
It is ironic. While men of the legal profession regard members of the
Judiciary with deferential awe and respect sometimes to the extent
of cowering before the might of the courts, here is a non-lawyer
who, with gleeful abandon and unmitigated insolence, has cast
aspersions and shown utter disregard to the authority and name of
the courts.
And lawyers included. For indeed, it is very unfortunate that here is
a non-lawyer who uses the instruments of justice to harass lawyers
and courts who crosses his path more especially if their actuations
do not conform with his whims and caprices.
Adverting to letters publicly circulated by Borromeo, inter alia charging then Chief
Justice Marcelo B. Fernan with supposed infidelity and violation of the constitution,
etc., the lawyers went on to say the following:
The conduct and statement of Borromeo against this Honorable
Court, and other members of the Judiciary are clearly and grossly
disrespectful, insolent and contemptuous. They tend to bring
dishonor to the Judiciary and subvert the public confidence on the
courts. If unchecked, the scurrilous attacks will undermine the
dignity of the courts and will result in the loss of confidence in the
country's judicial system and administration of justice.
. . . (S)omething should be done to protect the integrity of the courts
and the legal profession. So many baseless badmouthing have
been made by Borromeo against this Honorable Court and other
courts that for him to go scot-free would certainly be demoralizing to
members of the profession who afforded the court with all the
respect and esteem due them.

Subsequently, in the same proceeding; Borromeo filed another pleading protesting

the alleged "refusal" of the Cebu City Chapter of the Integrated Bar of the Philippines
to act on his disbarment cases "filed against its members."
C. Decision of the IBP
On March 28, 1994, the National Executive Director, IBP (Atty. Jose Aguila Grapilon)
transmitted to this Court the notice and copy of the decision in the case, reached after
due investigation, as well as the corresponding records in seven (7) volumes. Said
decision approved and adopted the Report and Recommendation dated December
15, 1993 of Atty. Manuel P. Legaspi, President, IBP, Cebu City Chapter, representing
the IBP Commission on Bar Discipline, recommending dismissal of the complaint as
against all the respondents and the issuance of a "warning to Borromeo to be more
cautious and not be precipitately indiscriminate in the filing of administrative
37
complaints against lawyers."
VI. SCURRILOUS WRITINGS
Forming part of the records of several cases in this Court are copies of letters ("open"
or otherwise), "circulars," flyers or leaflets harshly and quite unwarrantedly derogatory
of the many court judgments or directives against him and defamatory of his
adversaries and their lawyers and employees, as well as the judges and court
employees involved in the said adverse dispositions some of which scurrilous
writings were adverted to by the respondent lawyers in Adm. Case No. 3433, supra.
The writing and circulation of these defamatory writing were apparently undertaken by
Borromeo as a parallel activity to his "judicial adventures." The Court of Appeals had
occasion to refer to his "apparent penchant for argumentum ad hominen" and of the
"irresponsible leaflets he admits to have authored . . . (which were found to be) highly
reprehensible and needlessly derogatory to the dignity, honor and reputation of the
Courts."
In those publicly circulated writings, he calls judges and lawyers ignorant, corrupt,
oppressors, violators of the Constitution and the laws, etc.
Sometime in July, 1990, for instance, he wrote to the editor of the "Daily Star" as
regards the reported conferment on then Chief Justice Marcelo B. Fernan of an
"Award from the University of Texas for his contributions in upholding the Rule of
Law, Justice, etc.," stressing that Fernan "and the Supreme Court persist in rendering
rulings patently violative of the Constitution, Due Process and Rule of Law,
particularly in their issuance of so-called Minute Resolutions devoid of FACT or LAW
or SIGNATURES . . ." He sent a copy of his letter in the Supreme Court.
He circulated an "OPEN LETTER TO SC justices, Fernan," declaring that he had
"suffered INJUSTICE after INJUSTICE from you who are sworn to render TRUE
JUSTICE but done the opposite, AND INSTEAD OF RECTIFYING THEM, labeled my
cases as 'frivolous, nuisance, and harassment suits' while failing to refute the
irrefutable evidences therein . . .;" in the same letter, he specified what he considered
to be some of "the terrible injustices inflicted on me by this Court."

In another letter to Chief Justice Fernan, he observed that "3 years after EDSA, your
pledges have not been fulfilled. Injustice continues and as you said, the courts are
agents of oppression, instead of being saviours and defenders of the people. The
saddest part is that (referring again to minute resolutions) even the Supreme Court,
the court of last resort, many times, sanctions injustice and the trampling of the rule of
law and due process, and does not comply with the Constitution when it should be the
first to uphold and defend it . . . ." Another circulated letter of his, dated June 21, 1989
and captioned, "Open Letter to Supreme Court Justices Marcelo Fernan and Andres
Narvasa," repeated his plaint of having "been the victim of many . . . 'Minute
Resolutions' . . . which in effect sanction the theft and landgrabbing and arson of my
properties by TRADERS ROYAL BANK, UNITED COCONUT PLANTERS BANK,
AND one TOMAS B. TAN all without stating any FACT or LAW to support your
dismissal of . . . (my) cases, despite your firm assurances (Justice Fernan) that you
would cite me such facts or laws (during our talk in your house last March 12 1989);"
and that "you in fact have no such facts or laws but simply want to ram down a most
unjust Ruling in favor of a wrongful party. . . ."
In another flyer entitled in big bold letters, "A Gov't That Lies! Blatant attempt to fool
people!" he mentions what he regards as "The blatant lies and contradictions of the
Supreme Court, CA to support the landgrabbing by Traders Royal Bank of
Borromeos' Lands." Another flyer has at the center the caricature of a person, seated
on a throne marked Traders Royal Bank, surrounded by such statements as, "Sa
TRB para kami ay royalty. Nakaw at nakaw! Kawat Kawat! TRB WILL STEAL!" etc
Still another "circular" proclaims: "So the public may know: Supreme Court minute
resolutions w/o facts, law, or signatures violate the Constitution" and ends with the
38
admonition: "Supreme Court, Justice Fernan: STOP VIOLATING THE CHARTER."
One other "circular" reads:
SC,
NARVASA

CODDLERS
VIOLATOR OF LAWS

OF

TYRANTS!!!
CROOKS!

by: JOAQUIN BORROMEO

NARVASA's SC has denied being a DESPOT nor has it shielded
CROOKS in the judiciary. Adding "The SCRA (SC Reports) will
attest to this continuing vigilance Of the supreme Court." These are
lame, cowardly and self-serving denials and another "selfexoneration" belied by evidence which speak for themselves (Res
Ipsa Loquitor) (sic) the SCRA itself.
It is pure and simply TYRANNY when Narvasa and associates
issued UNSIGNED, UNCLEAR, SWEEPING "Minute Resolutions"
devoid of CLEAR FACTS and LAWS in patent violation of Secs.
4(3), 14, Art. 8 of the Constitution. It is precisely through said
TYRANNICAL, and UNCONSTITUTIONAL sham rulings that
Narvasa & Co. have CODDLED CROOKS like crony bank TRB,
UCPB, and SBTC, and through said fake resolutions that Narvasa
has LIED or shown IGNORANCE of the LAW in ruling that

CONSIGNATION IS NECESSARY IN RIGHT OF REDEMPTION

(GR 83306). Through said despotic resolutions, NARVASA & CO.
have sanctioned UCPB/ACCRA's defiance of court orders and
naked land grabbing What are these if not TYRANNY? (GR
84999).

DECLARING HIMSELF, JUSTICES, and even

MERE CLERKS TO BE IMMUNE FROM SUIT
AND UN-ACCOUNTABLE TO THE PEOPLE and
REFUSING TO ANSWER AND REFUTE
CHARGES AGAINST HIMSELF

Was it not tyranny for the SC to issue an Entry of Judgment without

first resolving the motion for reconsideration (G.R No. 82273). Was
it not tyranny and abuse of power for the SC to order a case
dismissed against SC clerks (CEBV-8679) and declare justices and
said clerks "immune from suit" despite their failure to file any
pleading? Were Narvasa & Co. not in fact trampling on the rule of
law and rules of court and DUE PROCESS in so doing? (GR No.
82273).

JOAQUIN T. BORROMEO

TYRANTS will never admit that they are tyrants. But their acts
speak for themselves! NARVASA & ASSOC: ANSWER AND
REFUTE THESE SERIOUS CHARGES OR RESIGN!!
IMPEACH NARVASA
ISSUING UNSIGNED, SWEEPING, UNCLEAR,
UNCONSTITUTIONAL
"MINUTE
RESOLUTIONS" VIOLATIVE OF SECS. 4(3), 14,
ART. 8, Constitution
VIOLATING RULES OF COURT AND DUE
PROCESS IN ORDERING CASE AGAINST SC
CLERKS (CEB-8679) DISMISSED DESPITE
THE LATTER'S FAILURE TO FILE PLEADINGS;
HENCE IN DEFAULT
CORRUPTION AND/OR GROSS IGNORANCE
OF
THE
LAW
IN
RULING,
THAT
CONSIGNATION IS NECESSARY IN RIGHT OF
REDEMPTION, CONTRADICTING LAW AND
SC'S OWN RULINGS TO ALLOW CRONY
BANK TRB TO STEALS LOTS WORTH P3
MILLION
CONDONING CRONY BANK UCPB'S
DEFIANCE OF TWO LAWFUL COURT
ORDERS AND STEALING OF TITLE OF
PROPERTY WORTH P4 MILLION
BEING JUDGE AND ACCUSED AT THE SAME
TIME AND PREDICTABLY EXONERATING
HIMSELF AND FELLOW CORRUPT JUSTICES

VI. IMMEDIATE ANTECEDENTS

OF PROCEEDINGS AT BAR
A. Letter of Cebu City Chapter
IBP, dated June 21, 1992
Copies of these circulars evidently found their way into the hands, among others, of
some members of the Cebu City Chapter of the Integrated Bar of the Philippines. Its
President thereupon addressed a letter to this Court, dated June 21, 1992, which (1)
drew attention to one of them that last quoted, above " . . . .sent to the IBP Cebu
City Chapter and probably other officers . . . in Cebu," described as containing "highly
libelous and defamatory remarks against the Supreme Court and the whole justice
system" and (2) in behalf of the Chapter's "officers and members," strongly urged
the Court "to impose sanctions against Mr. Borromeo for his condemnable act."
B. Resolution of July 22, 1993
Acting thereon, the Court En Banc issued a Resolution on July 22, 1993, requiring
comment by Borromeo on the letter, notice of which was sent to him by the Office of
the Clerk of Court. The resolution pertinently reads as follows:
xxx xxx xxx
The records of the Court disclose inter alia that as early as April 4,
1989, the Acting Clerk of Court, Atty. Luzviminda D. Puno, wrote a
four page letter to Mr. Borromeo concerning G.R. No. 83306
(Joaquin T. Borromeo vs. Traders Royal Bank [referred to by
Borromeo in the "circular" adverted to by the relator herein, the IBP
Cebu City Chapter]) and two (2) other cases also filed with the
Court by Borromeo: G.R. No. 77248 (Joaquin T. Borromeo v.
Samson Lao and Mariano Logarta) and G.R. No. 84054 (Joaquin T.
Borromeo v. Hon. Mario Dizon and Tomas Tan), all resolved
adversely to him by different Divisions of the Court. In that letter
Atty. Puno explained to Borromeo very briefly the legal principles
applicable to his cases and dealt with the matters mentioned in his
circular.
The records further disclose subsequent adverse rulings by the
Court in other cases instituted by Borromeo in this Court, i.e., G.R.
No. 87897 (Joaquin T. Borromeo v. Court of Appeals, et al.) and
No. 82273 (Joaquin T. Borromeo v. Court of Appeals and Samson

Lao), as well as the existence of other communications made public

by Borromeo reiterating the arguments already passed upon by the
court in his cases and condemning the court's rejection of those
arguments.
Acting on the letter dated June 21, 1993 of the Cebu City Chapter
of the Integrated Bar of the Philippines thru its above named,
President, and taking account of the related facts on record, the
Court Resolved:
1) to REQUIRE:
(a) the Clerk of Court (1) to DOCKET the matter at bar as a
proceeding for contempt against Joaquin T. Borromeo instituted at
the relation of said Cebu City Chapter, Integrated Bar of the
Philippines, and (2) to SEND to the City Sheriff, Cebu City, notice of
this resolution and copies of the Chapter's letter dated June 21,
1993 together with its annexes; and
(b) said City Sheriff of Cebu City to CAUSE PERSONAL SERVICE
of said notice of resolution and a copy of the Chapter's letter dated
June 21, 1993, together with its annexes, on Joaquin T. Borromeo
at his address at Mabolo, Cebu City; and
2) to ORDER said Joaquin T. Borromeo, within ten (10) days from
receipt of such notice and the IBP Chapter's letter of June 21, 1993
and its annexes, to file a comment on the letter and its annexes as
well as on the other matters set forth in this resolution, serving copy
thereof on the relator, the Cebu City Chapter of the Integrated Bar
of the Philippines, Palace of Justice Building, Capitol, Cebu City.
SO ORDERED.
1. Atty. Puno's Letter of April 4, 1989
Clerk of Court Puno's letter to Borromeo of April 4, 1989, referred to in the first
paragraph of the resolution just mentioned, explained to Borromeo for perhaps the
second time, precisely the principles and established practice relative to "minute
resolutions" and notices thereof, treated of in several other communications and
resolutions sent to him by the Supreme Court, to wit: the letter received by him on
July 10, 1987, from Clerk of Court Julieta Y. Carreon (of this Court's Third Division) (in
39
relation to G.R No. 77243 ) the letter to him of Clerk of Court (Second Division)
Fermin
J.
Garma,
dated
May
19,
40
1989, and three resolutions of this Court, notices of which were in due course
41
served on him, to wit: that dated July 31, 1989, in G.R. No. 87897; that dated June
42
1, 1990 in G.R. No. 82274 (186 SCRA 1), and that dated June 11, 1994 in G. R.
43
No. 112928.
C. Borromeo's Comment of August 27, 1993

In response to the Resolution of July 22, 1993, Borromeo filed a Comment dated
August 27, 1993 in which he alleged the following:
1) the resolution of July 22, 1993 (requiring comment) violates the
Constitution which requires "signatures and concurrence of majority
of members of the High Court;" hence, "a certified copy duly signed
by Justices is respectfully requested;"
2) the Chief Justice and other Members of the Court should inhibit
themselves "since they cannot be the Accused and Judge at the
same time, . . . (and) this case should be heard by an impartial and
independent body;"
3) the letter of Atty. Legaspi "is not verified nor signed by members
of said (IBP Cebu Chapter) Board; . . . is vague, unspecific, and
sweeping" because failing to point out "what particular statements
in the circular are allegedly libelous and condemnable;" and does
not appear that Atty. Legaspi has authority to speak or file a
complaint "in behalf of those accused in the "libelous circular;"
4) in making the circular, he (Borromeo) "was exercising his rights
of freedom of speech, of expression, and to petition the government
for redress of grievances as guaranteed by the Constitution (Sec. 4,
Art. III) and in accordance with the accountability of public officials;"
the circular merely states the truth and asks for justice based on the
facts
and
the
law; . . . it is not libelous nor disrespectful but rather to be
commended and encouraged; . . . Atty. Legaspi . . . should specify
under oath which statements are false and lies;
5) he "stands by the charges in his circular and is prepared to
support them with pertinent facts, evidence and law;" and it is
"incumbent on the Hon. Chief Justice and members of the High
Court to either refute said charges or dispense the justice that they
are duty bound to dispense.
D. Resolution of September 30, 1993
After receipt of the comment, and desiring to accord Borromeo the fullest opportunity
to explain his side, and be reprsented by an attorney, the Court promulgated the
following Resolution on September 30, 1993, notice of which was again served on
him by the Office of the Clerk of Court.
. . . The return of service filed by Sheriff Jessie A. Belarmino, Office
of the Clerk of Court Regional Trial Court of Cebu City, dated
August 26, 1993, and the Comment of Joaquin Borromeo, dated
August 27, 1993, on the letter of President Manuel P. Legaspi of
the relator dated June 21, 1993, are both NOTED. After deliberating
on the allegations of said Comment, the Court Resolved to GRANT

Joaquin T. Borromeo an additional period of fifteen (15) days from

notice hereof within which to engage the services or otherwise seek
the assistance of a lawyer and submit such further arguments in
addition to or in amplification of those set out in his Comment dated
August 27, 1993, if he be so minded.

circular," theorized that it is "incumbent on the said Justices to rectify their grave as
well as to dismiss Atty. Legaspi's baseless and false charges."
VII. THE COURT CONCLUSIONS
A. Respondent's Liability
for Contempt of Court

SO ORDERED.
E. Borromeo's Supplemental Comment
of October 15, 1992
Borromeo filed a "Supplemental Comment" dated October 15, 1992, reiterating the
arguments and allegations in his Comment of August 27, 1993, and setting forth
"additional arguments and amplification to . . . (said) Comment," viz.:
1) the IBP and Atty. Legaspi have failed "to specify and state under
oath the alleged 'libelous' remarks contained in the circular . . .;
(they should) be ordered to file a VERIFIED COMPLAINT . . .(failing
in which, they should) be cited in contempt of court for making false
charges and wasting the precious time of this Highest Court by
filing a baseless complaint;
2) the allegations in their circular are not libelous nor disrespectful
but "are based on the TRUTH and the LAW", namely:
a) "minute resolutions" bereft of signatures and
clear facts and laws are patent violations of Secs.
4(32), 13, 14, Art. VIII of the Constitution;
b) there is no basis nor thruth to this Hon. Court's
affirmation to the Appelate Court's ruling that the
undersigned "lost" his right of redemption price,
since no less than this Hon. Court has ruled in
many
rulings
that
CONSIGNATION
IS
UNNECESSARY in right of redemption;
c) this Hon. Court has deplorably condoned crony banks TRB and
UCPB's frauds and defiance of court orders in G.R. Nos. 83306 and
878997 and 84999.
F. Borromeo's "Manifestation" of
November 26, 1993
Borromeo afterwards filed a "Manifestation" under date of November 26, 1993,
adverting to "the failure of the IBP and Atty. Legaspi to substantiate his charges under
oath and the failure of the concerned Justices to refute the charges in the alledged
"libelous circular" and, construing these as "and admission of the thruth in said

Upon the indubitable facts on record, there can scarcely be any doubt of Borromeo's
guilt of contempt, for abuse of and interference with judicial rules and processes,
gross disrespect to courts and judges and improper conduct directly impeding,
44
obstructing and degrading the administration of justice. He has stubbornly litigated
issues already declared to be without merit, obstinately closing his eyes to the many
rulings rendered adversely to him in many suits and proceedings, rulings which had
become final and executory, obdurately and unreasonably insisting on the application
of his own individual version of the rules, founded on nothing more than his personal
(and quite erroneous) reading of the Constitution and the law; he has insulted the
judges and court officers, including the attorneys appearing for his adversaries,
needlessly overloaded the court dockets and sorely tried the patience of the judges
and court employees who have had to act on his repetitious and largely unfounded
complaints, pleadings and motions. He has wasted the time of the courts, of his
adversaries, of the judges and court employees who have had the bad luck of having
to act in one way or another on his unmeritorious cases. More particularly, despite his
attention having been called many times to the egregious error of his theory that the
so-called "minute resolutions" of this Court should contain findings of fact and
conclusions of law, and should be signed or certified by the Justices promulgating the
45
same, he has mulishly persisted in ventilating that self-same theory in various
proceedings, causing much loss of time, annoyance and vexation to the courts, the
court employees and parties involved.
1. Untenability of Proffered Defenses
The first defense that he proffers, that the Chief Justice and other Members of the
Court should inhibit themselves "since they cannot be the Accused and Judge at the
same time . . . (and) this case should be heard by an impartial and independent body,
is still another illustration of an entirely unwarranted, arrogant and reprehensible
assumption of a competence in the field of the law: he again uses up the time of the
Court needlessly by invoking an argument long since declared and adjudged to be
untenable. It is axiomatic that the "power or duty of the court to institute a charge for
contempt against itself, without the intervention of the fiscal or prosecuting officer, is
essential to the preservation of its dignity and of the respect due it from litigants,
lawyers and the public. Were the intervention of the prosecuting officer required and
judges obliged to file complaints for contempts against them before the prosecuting
officer, in order to bring the guilty to justice, courts would be inferior to prosecuting
officers and impotent to perform their functions with dispatch and absolute
independence. The institution of charges by the prosecuting officer is not necessary
to hold persons guilty of civil or criminal contempt amenable to trial and punishment
by the court. All that the law requires is that there be a charge in writing duly filed in
court and an opportunity to the person charged to be heard by himself or counsel.

The charge may be made by the fiscal, by the judge, or even by a private person. . .
46
."
His claim that the letter of Atty. Legaspi "is not verified nor signed by members of
said (IBP Cebu Chapter) Board; . . . is vague, unspecific, and sweeping" because
failing to point out what particular statements in the circular are allegedly libelous and
condemnable;" and it does not appear that Atty. Legaspi has authority to speak or file
a complaint "in behalf of those accused in the 'libelous' circular" is in the premises,
plainly nothing but superficial philosophizing, deserving no serious treatment.
Equally as superficial, and sophistical, is his other contention that in making the
allegations claimed to be contumacious, he "was exercising his rights of freedom of
speech, of expression, and to petition the government for redress of grievances as
guaranteed by the Constitution (Sec. 4, Art. III) and in accordance with the
accountablity of public officials." The constitutional rights invoked by him afford no
justification for repetitious litigation of the same causes and issues, for insulting
lawyers, judges, court employees; and other persons, for abusing the processes and
rules of the courts, wasting their time, and bringing them into disrepute and
disrespect.
B. Basic Principles Governing
the Judicial Function
The facts and issues involved in the proceeding at bench make necessary a
restatement of the principles governing finality of judgments and of the paramount
need to put an end to litigation at some point, and to lay down definite postulates
concerning what is perceived to be a growing predilection on the part of lawyers and
litigants like Borromeo to resort to administrative prosecution (or institution of
civil or criminal actions) as a substitute for or supplement to the specific modes of
appeal or review provided by law from court judgments or orders.
1.
Reason
Hierarchy

for

courts; Judicial

Courts exist in every civilized society for the settlement of controversies. In every
country there is a more or less established hierarchical organization of courts, and a
more or less comprehensive system of review of judgments and final orders of lower
courts.
The judicial system in this jurisdiction allows for several levels of litigation, i.e., the
presentation of evidence by the parties a trial or hearing in the first instance as
well as a review of the judgments of lower courts by higher tribunals, generally by
consideration anew and ventilation of the factual and legal issues through briefs or
memoranda. The procedure for review is fixed by law, and is in the very nature of
things, exclusive to the courts.
2.
Paramount
Need
Litigation at Some Point

to

end

It is withal of the essence of the judicial function that at some point, litigation must
end. Hence, after the procedures and processes for lawsuits have been undergone,
and the modes of review set by law have been exhausted, or terminated, no further
ventilation of the same subject matter is allowed. To be sure, there may be, on the
part of the losing parties, continuing disagreement with the verdict, and the
conclusions therein embodied. This is of no moment, indeed, is to be expected; but, it
is not their will, but the Court's, which must prevail; and, to repeat, public policy
demands that at some definite time, the issues must be laid to rest and the court's
47
dispositions thereon accorded absolute finality. As observed by this Court
48
in Rheem of the Philippines v. Ferrer, a 1967 decision, a party "may think highly of
his intellectual endowment. That is his privilege. And he may suffer frustration at what
he feels is others' lack of it. This is his misfortune. Some such frame of mind,
however, should not be allowed to harden into a belief that he may attack a court's
decision in words calculated to jettison the time-honored aphorism that courts are the
temples of right."
3.
Judgments
Not Reviewable

of

Supreme

Court

The sound, salutary and self-evident principle prevailing in this as in most

jurisdictions, is that judgments of the highest tribunal of the land may not be reviewed
by any other agency, branch, department, or official of Government. Once the
Supreme Court has spoken, there the matter must rest. Its decision should not and
cannot be appealed to or reviewed by any other entity, much less reversed or
modified on the ground that it is tainted by error in its findings of fact or conclusions of
law, flawed in its logic or language, or otherwise erroneous in some other
49
respect. This, on the indisputable and unshakable foundation of public policy, and
constitutional and traditional principle.
In an extended Resolution promulgated on March 12, 1987 in In Re: Wenceslao
Laureta involving an attempt by a lawyer to prosecute before the Tanod bayan
"members of the First Division of this Court collectively with having knowingly and
deliberately rendered an 'unjust extended minute Resolution' with deliberate bad faith
in violation of Article 204 of the Revised penal Code ". . . and for deliberatly causing
"undue injury" to respondent . . . and her co-heirs because of the "unjust Resolution"
promulgated, in violation of the Anti-Graft and Corrupt Practices Act . . . the
50
following pronouncements were made in reaffirmation of established doctrine:
. . . As aptly declared in the Chief Justice's Statement of December
24, 1986, which the Court hereby adopts in toto, "(I)t is elementary
that the Supreme Court is supreme the third great department of
government entrusted exclusively with the judicial power to
adjudicate with finality all justiciable disputes, public and private. No
other department or agency may pass upon its judgments or
declare them "unjust." It is elementary that "(A)s has ever been
stressed since the early case of Arnedo vs.Llorente (18 Phil. 257,
263 [1911]) "controlling and irresistible reasons of public policy and
of sound practice in the courts demand that at the risk of occasional
error, judgments of courts determining controversies submitted to
them should become final at some definite time fixed by law, or by a

rule of practice recognized by law, so as to be thereafter beyond

the control even of the court which rendered them for the purpose
of correcting errors of fact or of law, into which, in the opinion of the
court it may have fallen. The very purpose for which the courts are
organized is to put an end to controversy, to decide the questions
submitted to the litigants, and to determine the respective rights of
the parties. (Luzon Brokerage Co., Inc. vs. Maritime Bldg., Co., Inc.,
86 SCRA 305, 316-317)

In respect of Courts below the Supreme Court, the ordinary remedies available under
law to a party who is adversely affected by their decisions or orders are a motion for
new trial (or reconsideration) under Rule 37, and an appeal to either the Court of
Appeals or the Supreme Court, depending on whether questions of both fact and law,
or of law only, are raised, in accordance with fixed and familiar rules and conformably
51
with the hierarchy of courts. Exceptionally, a review of a ruling or act of a court on
the ground that it was rendered without or in excess of its jurisdiction, or with grave
abuse of discretion, may be had through the special civil action of certiorari or
prohibition pursuant to Rule 65 of the Rules of Court.

xxx xxx xxx

Indeed, resolutions of the Supreme Court as a collegiate court,
whether an en banc or division, speak for themselves and are
entitled to full faith and credence and are beyond investigation or
inquiry under the same principle of conclusiveness of enrolled bills
of the legislature. (U.S. vs. Pons, 34 Phil. 729; Gardiner, et al. vs.
Paredes, et al., 61 Phil. 118; Mabanag vs. Lopez Vito, 78 Phil. 1)
The Supreme Court's pronouncement of the doctrine that "(I)t is
well settled that the enrolled bill . . . is conclusive upon the courts as
regards the tenor of the measure passed by Congress and
approved by the President. If there has been any mistake in the
printing of the bill before it was certified by the officers of Congress
and approved by the Executive [as claimed by petitioner-importer
who unsuccessfully sought refund of margin fees] on which we
cannot speculate, without jeopardizing the principle of separation of
powers and undermining one of the cornerstones of our
democractic system the remedy is by amendment or curative
legislation, not by judicial decree" is fully and reciprocally applicable
to Supreme Court orders, resolutions and decisions, mutatis
mutandis. (Casco Phil. Chemical Co., Inc. vs. Gimenez, 7 SCRA
347, 350. (Citing Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag
vs. Lopez Vito, 78 Phil. 1; Macias vs. Comelec, 3 SCRA 1).
The Court has consistently stressed that the "doctrine of separation
of powers calls for the executive, legislative and judicial
departments being left alone to discharge their duties as they see
fit" (Tan vs. Macapagal, 43 SCRA 677). It has thus maintained in
the same way that the judiciary has a right to expect that neither the
President nor Congress would cast doubt on the mainspring of its
orders or decisions, it should refrain from speculating as to alleged
hidden forces at work that could have impelled either coordinate
branch into acting the way it did. The concept of separation of
powers presupposes mutual respect by and between the three
departments of the government. (Tecson vs. Salas, 34 SCRA 275,
286-287).
4. Final and Executory
Lower
Courts
Not
Even by Supreme Court

Judgments of
Reviewable

However, should judgments of lower courts which may normally be subject to

review by higher tribunals become final and executory before, or without,
exhaustion of all recourse of appeal, they, too, become inviolable, impervious to
modification. They may, then, no longer be reviewed, or in anyway modified directly or
indirectly, by a higher court, not even by the Supreme Court, much less by any other
52
official, branch or department of Government.
C. Administrative Civil or Criminal Action
against Judge. Not Substitute for Appeal;
Proscribed by Law and Logic
Now, the Court takes judicial notice of the fact that there has been of late a
regrettable increase in the resort to administrative prosecution or the institution of a
civil or criminal action as a substitute for or supplement to appeal. Whether
intended or not, such a resort to these remedies operates as a form of threat or
intimidation to coerce judges into timorous surrender of their prerogatives, or a
reluctance to exercise them. With rising frequency, administrative complaints are
being presented to the Office of the Court Administrator; criminal complaints are being
filed with the Office of the Ombudsman or the public prosecutor's office; civil actions
for recovery of damages commenced in the Regional Trial Courts against trial judges,
and justices of the Court of Appeals and even of the Supreme Court.
1. Common Basis of Complaints
Against Judges
Many of these complaints set forth a common indictment: that the respondent Judges
53
or Justices rendered manifestly unjust judgments or interlocutory orders i.e.,
judgments or orders which are allegedly not in accord with the evidence, or with law
or jurisprudence, or are tainted by grave abuse of discretion thereby causing
injustice, and actionable and compensable injury to the complainants (invariably
losing litigants). Resolution of complaints of this sort quite obviously entails a common
requirement for the fiscal, the Ombudsman or the Trial Court: a review of the decision
or order of the respondent Judge or Justice to determine its correctness or
erroneousness, as basic premise for a pronouncement of liability.
2. Exclusivity of Specific Procedures for
Correction of Judgments and Orders

The question then, is whether or not these complaints are proper; whether or not in
lieu of the prescribed recourses for appeal or review of judgments and orders of
courts, a party may file an administrative or criminal complaint against the judge for
rendition of an unjust judgment, or, having opted for appeal, may nonetheless
simultaneously seek also such administrative or criminal remedies.
Given the nature of the judicial function, the power vested by the Constitution in the
Supreme Court and the lower courts established by law, the question submits to only
one answer: the administrative or criminal remedies are neither alternative nor
cumulative to judicial review where such review is available, and must wait on the
result thereof.
Simple reflection will make this proposition amply clear, and demonstrate that any
contrary postulation can have only intolerable legal implications. Allowing a party who
feels aggrieved by a judicial order or decision not yet final and executory to mount an
administrative, civil or criminal prosecution for unjust judgment against the issuing
judge would, at a minimum and as an indispensable first step, confer the prosecutor
(or Ombudsman) with an incongruous function pertaining, not to him, but to the
courts: the determination of whether the questioned disposition is erroneous in its
findings of fact or conclusions of law, or both. If he does proceed despite that
impediment, whatever determination he makes could well set off a proliferation of
administrative or criminal litigation, a possibility here after more fully explored.
Such actions are impermissible and cannot prosper. It is not, as already pointed out,
within the power of public prosecutors, or the Ombudsman or his deputies, directly or
vicariously, to review judgments or final orders or resolutions of the Courts of the land.
The power of review by appeal or special civil action is not only lodged
exclusively in the Courts themselves but must be exercised in accordance with a welldefined and long established hierarchy, and long-standing processes and procedures.
No other review is allowed; otherwise litigation would be interminable, and vexatiously
repetitive.
These principles were stressed in In Re: Wenceslao Laureta, supra.

54

Respondents should know that the provisions of Article 204 of the

Revised Penal Code as to "rendering knowingly unjust judgment,"
refer to an individual judge who does so "in any case submitted to
him for decision" and even then, it is not the prosecutor who would
pass judgment on the "unjustness" of the decision rendered by him
but the proper appellate court with jurisdiction to review the same,
either the Court of Appeals and/or the Supreme Court.
Respondents should likewise know that said penal article has no
application to the members of a collegiate court such as this Court
or its Divisions who reach their conclusions in consultation and
accordingly render their collective judgment after due deliberation. It
also follows, consequently, that a charge of violation of the AntiGraft and Corrupt Practices Act on the ground that such a collective
decision is "unjust" cannot prosper.
xxx xxx xxx

To subject to the threat and ordeal of investigation and prosecution,

a judge, more so a member of the Supreme Court for official acts
done by him in good faith and in the regular exercise of official duty
and judicial functions is to subvert and undermine that very
independence of the judiciary, and subordinate the judiciary to the
executive. "For it is a general principle of the highest importance to
the proper administration of justice that a judicial officer in
exercising the authority vested in him, shall be free to act upon his
own convictions, without apprehension of personal consequences
to himself. Liability to answer to everyone who might feel himself
aggrieved by the action of the judge would be inconsistent with the
possession of this freedom, and would destroy that independence
without which no judiciary can be either respectable or useful."
(Bradley vs. Fisher, 80 U. S. 335).
xxx xxx xxx
To allow litigants to go beyond the Court's resolution and claim that
the members acted "with deliberate bad faith" and rendered an
"unjust resolution" in disregard or violation of the duty of their high
office to act upon their own independent consideration and
judgment of the matter at hand would be to destroy the authenticity,
integrity and conclusiveness of such collegiate acts and resolutions
and to disregard utterly the presumption of regular performance of
official duty. To allow such collateral attack would destroy the
separation of powers and undermine the role of the Supreme Court
as the final arbiter of all justiciable disputes.
Dissatisfied litigants and/or their counsels cannot without violating
the separation of powers mandated by the Constitution relitigate in
another forum the final judgment of this Court on legal issues
submitted by them and their adversaries for final determination to
and by the Supreme Court and which fall within the judicial power to
determine and adjudicate exclusively vested by the Constitution in
the Supreme Court and in such inferior courts as may be
established by law.
This is true, too, as regards judgments, otherwise appealable, which have become
final and executory. Such judgments, being no longer reviewable by higher tribunals,
are certainly not reviewable by any other body or authority.
3. Only Courts Authorized, under Fixed
Rules to Declare Judgments or Orders
Erroneous or Unjust
To belabor the obvious, the determination of whether or not a judgement or order is
unjust or was (or was not) rendered within the scope of the issuing judge's
authority, or that the judge had exceeded his jurisdiction and powers or maliciously
delayed the disposition of a case is an essentially judicial function, lodged by
existing law and immemorial practice in a hierarchy of courts and ultimately in the

highest court of the land. To repeat, no other entity or official of the Government, not
the prosecution or investigation service or any other branch; nor any functionary
thereof, has competence to review a judicial order or decision whether final and
executory or not and pronounce it erroneous so as to lay the basis for a criminal or
administrative complaint for rendering an unjust judgment or order. That prerogative
belongs to the courts alone.

unjust judgment, or against the Justices of the Court of Appeals or the Supreme Court
who should affirm his conviction.
The situation is ridiculous, however the circumstances of the case may be modified,
and regardless of whether it is a civil, criminal or administrative proceeding that is
availed of as the vehicle to prosecute the judge for supposedly rendering an unjust
decision or order.

4. Contrary Rule Results in Circuitousness

and Leads to Absurd Consequences
Pragmatic considerations also preclude prosecution for supposed rendition of unjust
judgments or interlocutory orders of the type above described, which, at bottom,
consist simply of the accusation that the decisions or interlocutory orders are
seriously wrong in their conclusions of fact or of law, or are tainted by grave abuse of
discretion as distinguished from accusations of corruption, or immorality, or other
wrongdoing. To allow institution of such proceedings would not only be legally
improper, it would also result in a futile and circuitous exercise, and lead to absurd
consequences.
Assume that a case goes through the whole gamut of review in the judicial
hierarchy; i.e., a judgment is rendered by a municipal trial court; it is reviewed and
affirmed by the proper Regional Trial Court; the latter's judgment is appealed to and in
due course affirmed by the Court of Appeals; and finally, the appellate court's
decision is brought up to and affirmed by the Supreme Court. The prosecution of the
municipal trial court judge who rendered the original decision (for knowingly rendering
a manifestly unjust judgment) would appear to be out of the question; it would mean
that the Office of the Ombudsman or of the public prosecutor would have to find, at
the preliminary investigation, not only that the judge's decision was wrong and unjust,
but by necessary implication that the decisions or orders of the Regional Trial Court
Judge, as well as the Justices of the Court of Appeals and the Supreme Court who
affirmed the original judgment were also all wrong and unjust most certainly an act
of supreme arrogance and very evident supererogation. Pursuing the proposition
further, assuming that the public prosecutor or Ombudsman should nevertheless opt
to undertake a review of the decision in question despite its having been affirmed
at all three (3) appellate levels and thereafter, disagreeing with the verdict of all
four (4) courts, file an information in the Regional Trial Court against the Municipal
Trial Court Judge, the fate of such an indictment at the hands of the Sandiganbayan
or the Regional Trial Court would be fairly predictable.
Even if for some reason the Municipal Trial Court Judge is convicted by the
Sandiganbayan or a Regional Trial Court, the appeal before the Supreme Court or the
Court of Appeals would have an inevitable result: given the antecedents, the verdict of
conviction would be set aside and the correctness of the judgment in question,
already passed upon and finally resolved by the same appellate courts, would
necessarily be sustained.
Moreover, in such a scenario, nothing would prevent the Municipal Trial Judge, in his
turn, from filing a criminal action against the Sandiganbayan Justices, or the Regional
Trial Court Judge who should convict him of the offense, for knowingly rendering an

5. Primordial Requisites
Criminal Prosecution

for

Administrative

This is not to say that it is not possible at all to prosecute judges for this impropriety,
of rendering an unjust judgment or interlocutory order; but, taking account of all the
foregoing considerations, the indispensable requisites are that there be a final
declaration by a competent court in some appropriate proceeding of the manifestly
unjust character of the challenged judgment or order, and there be also evidence of
malice or bad faith, ignorance or inexcusable negligence, on the part of the judge in
rendering said judgement or order. That final declaration is ordinarily contained in the
judgment rendered in the appellate proceedings in which the decision of the trial court
in the civil or criminal action in question is challenged.
What immediately comes to mind in this connection is a decision of acquittal or
dismissal in a criminal action, as to which the same being unappealable it would
be unreasonable to deny the State or the victim of the crime (or even public-spirited
citizens) the opportunity to put to the test of proof such charges as they might see fit
to press that it was unjustly rendered, with malice or by deliberate design, through
inexcusable ignorance or negligence, etc. Even in this case, the essential requisite is
that there be an authoritative judicial pronouncement of the manifestly unjust
character of the judgment or order in question. Such a pronouncement may result
from either (a) an action of certiorari or prohibition in a higher court impugning the
validity of the; judgment, as having been rendered without or in excess of jurisdiction,
or with grave abuse of discretion; e.g., there has been a denial of due process to the
prosecution; or (b) if this be not proper, an administrative proceeding in the Supreme
Court against the judge precisely for promulgating an unjust judgment or order. Until
and unless there is such a final, authoritative judicial declaration that the decision or
order in question is "unjust," no civil or criminal action against the judge concerned is
legally possible or should be entertained, for want of an indispensable requisite.
D. Judges Must be Free from
Influence or Pressure
Judges must be free to judge, without pressure or influence from external forces or
factors. They should not be subject to intimidation, the fear of civil, criminal or
administrative sanctions for acts they may do and dispositions they may make in the
performance of their duties and functions. Hence it is sound rule, which must be
recognized independently of statute, that judges are not generally liable for acts done
within the scope of their jurisdiction and in good faith.

This Court has repeatedly and uniformly ruled that a judge may not be held
55
administratively accountable for every erroneous order or decision he renders. To
hold otherwise would be nothing short of harassment and would make his position
doubly unbearable, for no one called upon to try the facts or interpret the law in the
56
process of administering justice can be infallible in his judgment. The error must be
57
gross or patent, deliberate and malicious, or incurred with evident bad faith; it is
only in these cases that administrative sanctions are called for as an imperative duty
of the Supreme Court.
As far as civil or criminal liability is concerned, existing doctrine is that "judges of
superior and general jurisdiction are not liable to respond in civil action for damages
for what they may do in the exercise of their judicial functions when acting within their
58
59
legal powers and jurisdiction." Based on Section 9, Act No. 190, the doctrine is
still good law, not inconsistent with any subsequent legislative issuance or court rule:
"No judge, justice of the peace or assessor shall be liable to a civil action for the
recovery of damages by reason of any judicial action or judgment rendered by him in
good faith, and within the limits of his legal powers and jurisdiction."
Exception to this general rule is found in Article 32 of the Civil Code, providing that
any public officer or employee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the
enumerated rights and liberties of another person which rights are the same as
those guaranteed in the Bill of Rights (Article III of the Constitution); shall be liable
to the latter for damages. However, such liability is not demandable from a judge
unless his act or omission constitutes a violation of the Penal Code or other penal
statute. But again, to the extent that the offenses therein described have "unjust
judgment or "unjust interlocutory order" for an essential element, it need only be
reiterated that prosecution of a judge for any of them is subject to the caveat already
mentioned: that such prosecution cannot be initiated, much less maintained, unless
there be a final judicial pronouncement of the unjust character of the decision or order
in issue.

groundless and insulting proceedings against the courts, born of affected bravado or
sheer egocentrism, to the extent of even involving the legislative and executive
departments, the Ombudsman included, in their assaults against the Judiciary in
pursuit of personal agendas. But all things, good or bad, must come to an end, and it
is time for the Court to now draw the line, with more promptitude, between reasoned
dissent and self-seeking pretense. The Court accordingly serves notice to those with
the same conceit or delusions that it will henceforth deal with them, decisively and
fairly, with a firm and even hand, and resolutely impose such punitive sanctions as
may be appropriate to maintain the integrity and independence of the judicial
institutions of the country.
WHEREFORE, Joaquin T. Borromeo is found and declared GUILTY of constructive
contempt repeatedly committed over time, despite warnings and instructions given to
him, and to the end that he may ponder his serious errors and grave misconduct and
learn due respect for the Courts and their authority, he is hereby sentenced to serve a
term of imprisonment of TEN (10) DAYS in the City Jail of Cebu City and to pay a fine
of ONE THOUSAND PESOS (P1,000.00). He is warned that a repetition of any of the
offenses of which he is herein found guilty, or any similar or other offense against
courts, judges or court employees, will merit further and more serious sanctions.
IT IS SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo,
Melo, Quiason, Vitug, Kapunan, Mendoza and Francisco, JJ., concur.
Puno, J., took no part.

Republic of the Philippines

Supreme Court
Baguio City

E. Afterword
Considering the foregoing antecedents and long standing doctrines, it may well be
asked why it took no less than sixteen (16) years and some fifty (50) grossly
unfounded cases lodged by respondent Borromeo in the different rungs of the
Judiciary before this Court decided to take the present administrative measure. The
imposition on the time of the courts and the unnecessary work occasioned by
respondent's crass adventurism are self-evident and require no further elaboration. If
the Court, however, bore with him with Jobian patience, it was in the hope that the
repeated rebuffs he suffered, with the attendant lectures on the error of his ways,
would somehow seep into his understanding and deter him from further forays along
his misguided path. After all, as has repeatedly been declared, the power of contempt
is exercised on the preservative and not the vindictive principle. Unfortunately the
Court's forbearance had no effect on him.
Instead, the continued leniency and tolerance extended to him were read as signs of
weakness and impotence. Worse, respondent's irresponsible audacity appears to
have influenced and emboldened others to just as flamboyantly embark on their own

EN BANC
REPUBLIC OF THE PHILIPPINES,
Petitioner,

- versus -

SANDIGANBAYAN
(FIRST
DIVISION),
EDUARDO
M.
COJUANGCO,
JR.,
AGRICULTURAL
CONSULTANCY
SERVICES, INC., ARCHIPELAGO REALTY
CORP., BALETE RANCH, INC., BLACK
STALLION RANCH, INC., CHRISTENSEN

G.R. No. 166859

PLANTATION
COMPANY,
DISCOVERY
REALTY CORP., DREAM PASTURES, INC.,
ECHO RANCH, INC., FAR EAST RANCH,
INC., FILSOV SHIPPING COMPANY, INC.,
FIRST
UNITED
TRANSPORT,
INC.,
HABAGAT REALTY DEVELOPMENT, INC.,
KALAWAKAN RESORTS, INC., KAUNLARAN
AGRICULTURAL CORP., LABAYUG AIR
TERMINALS,
INC.,
LANDAIR
INTERNATIONAL MARKETING CORP., LHL
CATTLE CORP., LUCENA OIL FACTORY,
INC., MEADOW LARK PLANTATIONS, INC.,
METROPLEX COMMODITIES, INC., MISTY
MOUNTAIN
AGRICULTURAL
CORP.,
NORTHEAST CONTRACT TRADERS, INC.,
NORTHERN CARRIERS CORP., OCEANSIDE
MARITIME ENTERPRISES, INC., ORO
VERDE SERVICES, INC., PASTORAL FARMS,
INC., PCY OIL MANUFACTURING CORP.,
PHILIPPINE
TECHNOLOGIES,
INC.,
PRIMAVERA FARMS, INC., PUNONG-BAYAN
HOUSING DEVELOPMENT CORP., PURA
ELECTRIC
COMPANY,
INC.,
RADIO
AUDIENCE DEVELOPERS INTEGRATED
ORGANIZATION, INC., RADYO PILIPINO
CORP., RANCHO GRANDE, INC., REDDEE
DEVELOPERS,
INC.,
SAN
ESTEBAN
DEVELOPMENT CORP., SILVER LEAF
PLANTATIONS, INC., SOUTHERN SERVICE
TRADERS, INC., SOUTHERN STAR CATTLE
CORP., SPADE ONE RESORTS CORP.,
UNEXPLORED LAND DEVELOPERS, INC.,
VERDANT PLANTATIONS, INC., VESTA
AGRICULTURAL CORP. AND WINGS
RESORTS CORP.,
Respondents.

STALLION
RANCH,
INC.,
MISTY
MOUNTAINS
AGRICULTURAL
CORP.,
ARCHIPELAGO
REALTY
CORP.,
AGRICULTURAL
CONSULTANCY
SERVICES, INC., SOUTHERN STAR CATTLE
CORP., LHL CATTLE CORP., RANCHO
GRANDE, INC., DREAM PASTURES, INC.,
FAR EAST RANCH, INC., ECHO RANCH,
INC.,
LAND
AIR
INTERNATIONAL
MARKETING
CORP.,
REDDEE
DEVELOPERS,
INC.,
PCY
OIL
MANUFACTURING CORP., LUCENA OIL
FACTORY,
INC.,
METROPLEX
COMMODITIES,
INC.,
VESTA
AGRICULTURAL
CORP.,
VERDANT
PLANTATIONS,
INC.,
KAUNLARAN
AGRICULTURAL CORP., ECJ & SONS
AGRICULTURAL
ENTERPRISES,
INC.,
RADYO PILIPINO CORP., DISCOVERY
REALTY
CORP.,
FIRST
UNITED
TRANSPORT, INC., RADIO AUDIENCE
DEVELOPERS
INTEGRATED
ORGANIZATION,
INC.,
ARCHIPELAGO
FINANCE AND LEASING CORP., SAN
ESTEBAN
DEVELOPMENT
CORP.,
CHRISTENSEN PLANTATION COMPANY,
NORTHERN CARRIERS CORP., VENTURE
SECURITIES, INC., BALETE RANCH, INC.,
ORO
VERDE
SERVICES,
INC.,
and
KALAWAKAN RESORTS, INC.,
Respondents.
x--------------------------x
REPUBLIC OF THE PHILIPPINES,
Petitioner,

x--------------------------x
- versus REPUBLIC OF THE PHILIPPINES,
Petitioner,

- versus -

SANDIGANBAYAN
(FIRST
DIVISION),
EDUARDO M. COJUANGCO, JR., MEADOW
LARK PLANTATIONS, INC., SILVER LEAF
PLANTATIONS, INC., PRIMAVERA FARMS,
INC., PASTORAL FARMS, INC., BLACK

G.R. No. 169203

EDUARDO
M.
COJUANGCO,
JR.,
FERDINAND E. MARCOS, IMELDA R.
MARCOS, EDGARDO J. ANGARA,* JOSE C.
CONCEPCION,
AVELINO
V.
CRUZ,
EDUARDO U. ESCUETA, PARAJA G.
HAYUDINI,
JUAN
PONCE
ENRILE,
TEODORO D. REGALA, DANILO URSUA,
ROGELIO A. VINLUAN, AGRICULTURAL
CONSULTANCY SERVICES, INC., ANGLO
VENTURES, INC., ARCHIPELAGO REALTY

CORP.,
AP
HOLDINGS,
INC.,
ARC
INVESTMENT, INC., ASC INVESTMENT,
INC.,
AUTONOMOUS
DEVELOPMENT
CORP., BALETE RANCH, INC., BLACK
STALLION RANCH, INC., CAGAYAN DE
ORO OIL COMPANY, INC., CHRISTENSEN
PLANTATION
COMPANY,
COCOA
INVESTORS, INC., DAVAO AGRICULTURAL
AVIATION, INC., DISCOVERY REALTY
CORP., DREAM PASTURES, INC., ECHO
RANCH, INC., ECJ & SONS AGRI. ENT., INC.,
FAR EAST RANCH, INC., FILSOV SHIPPING
COMPANY,
INC.,
FIRST
MERIDIAN
DEVELOPMENT, INC., FIRST UNITED
TRANSPORT,
INC.,
GRANEXPORT
MANUFACTURING
CORP.,
HABAGAT
REALTY DEVELOPMENT, INC., HYCO
AGRICULTURAL, INC., ILIGAN COCONUT
INDUSTRIES, INC., KALAWAKAN RESORTS,
INC., KAUNLARAN AGRICULTURAL CORP.,
LABAYOG AIR TERMINALS, INC., LANDAIR
INTERNATIONAL
MARKETING
CORP.,
LEGASPI OIL COMPANY, LHL CATTLE
CORP., LUCENA OIL FACTORY, INC.,
MEADOW LARK PLANTATIONS, INC.,
METROPLEX COMMODITIES, INC., MISTY
MOUNTAIN
AGRICULTURAL
CORP.,
NORTHEAST CONTRACT TRADERS, INC.,
NORTHERN CARRIERS CORP., OCEANSIDE
MARITIME ENTERPRISES, INC., ORO
VERDE SERVICES, INC., PASTORAL FARMS,
INC., PCY OIL MANUFACTURING CORP.,
PHILIPPINE
RADIO
CORP.,
INC.,
PHILIPPINE
TECHNOLOGIES,
INC.,
PRIMAVERA FARMS, INC., PUNONG-BAYAN
HOUSING DEVELOPMENT CORP., PURA
ELECTRIC
COMPANY,
INC.,
RADIO
AUDIENCE DEVELOPERS INTEGRATED
ORGANIZATION, INC., RADYO PILIPINO
CORP., RANCHO GRANDE, INC., RANDY
ALLIED
VENTURES,
INC.,
REDDEE
DEVELOPERS,
INC.,
ROCKSTEEL
RESOURCES, INC., ROXAS SHARES, INC.,
SAN ESTEBAN DEVELOPMENT CORP., SAN
MIGUEL CORPORATION OFFICERS, INC.,
SAN PABLO MANUFACTURING CORP.,
SOUTHERN LUZON OIL MILLS, INC.,
SILVER
LEAF
PLANTATIONS,
INC.,
SORIANO SHARES, INC., SOUTHERN
SERVICE TRADERS, INC., SOUTHERN STAR
CATTLE CORP., SPADE 1 RESORTS CORP.,

G.R. No. 180702

TAGUM AGRICULTURAL DEVELOPMENT

CORP.,
TEDEUM
RESOURCES,
INC.,
THILAGRO EDIBLE OIL MILLS, INC., TODA
HOLDINGS, INC., UNEXPLORED LAND
DEVELOPERS,
INC.,
VALHALLA
PROPERTIES,
INC.,
VENTURES
SECURITIES,
INC.,
VERDANT
PLANTATIONS,
INC.,
VESTA
AGRICULTURAL
CORP.
and
WINGS
RESORTS CORP.,
Respondents.
x------------------------x
JOVITO R. SALONGA, WIGBERTO E.
TAADA, OSCAR F. SANTOS, VIRGILIO M.
DAVID, ROMEO C. ROYANDAYAN for himself
and for SURIGAO DEL SUR FEDERATION OF
AGRICULTURAL COOPERATIVES (SUFAC),
MORO
FARMERS
ASSOCIATION
OF
ZAMBOANGA DEL SUR (MOFAZS) and
COCONUT FARMERS OF SOUTHERN
LEYTE
COOPERATIVE
(COFA-SL);
PHILIPPINE RURAL RECONSTRUCTION
MOVEMENT
(PRRM),
represented
by
CONRADO
S.
NAVARRO;
COCONUT
INDUSTRY REFORM MOVEMENT, INC.
(COIR) represented by JOSE MARIE T.
FAUSTINO; VICENTE FABE for himself and
for PAMBANSANG KILUSAN NG MGA
SAMAHAN NG MAGSASAKA (PAKISAMA);
NONITO CLEMENTE for himself and for the
NAGKAKAISANG UGNAYAN NG MGA
MALILIIT
NA
MAGSASAKA
AT
MANGGAGAWA SA NIYUGAN (NIUGAN);
DIONELO M. SUANTE, SR. for himself and for
KALIPUNAN
NG
MALILIIT
NA
MAGNINIYOG NG PILIPINAS (KAMMPIL),
INC.,
Petitioners-Intervenors.

Specifically, the petitions and their particular reliefs are as follows:

(a)

G.R. No. 166859 (petition for certiorari), to assail the resolution

promulgated
on December
10,
2004[4] denying
the
Republics Motion For Partial Summary Judgment;

(b)

G.R. No. 169023 (petition for certiorari), to nullify and set

aside, firstly, the resolution promulgated on October 8,
2003,[5] and, secondly, the resolution promulgated on June 24,
2005[6] modifying the resolution of October 8, 2003; and

(c)

G.R. No. 180702 (petition for review on certiorari), to appeal the

decision promulgated on November 28, 2007.[7]

Present:
CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.:
Promulgated:
April 12, 2011
x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

For over two decades, the issue of whether the sequestered sizable block of shares
representing 20% of the outstanding capital stock of San Miguel Corporation (SMC) at the
time of acquisition belonged to their registered owners or to the coconut farmers has remained
unresolved. Through this decision, the Court aims to finally resolve the issue and terminate the
uncertainty that has plagued that sizable block of shares since then.
These consolidated cases were initiated on various dates by the Republic of the
Philippines
(Republic) via petitions
for certiorari in
G.R.
Nos.
166859[1] and
[2]
[3]
169023, and via petition for review on certiorari in 180702, the first two petitions being
brought to assail the following resolutions issued in Civil Case No. 0033-F by the
Sandiganbayan, and the third being brought to appeal the adverse decision promulgated on
November 28, 2007 in Civil Case No. 0033-F by the Sandiganbayan.

ANTECEDENTS
On July 31, 1987, the Republic commenced Civil Case No. 0033 in the Sandiganbayan
by complaint, impleading as defendants respondent Eduardo M. Cojuangco, Jr. (Cojuangco)
and 59 individual defendants. On October 2, 1987, the Republic amended the complaint in
Civil Case No. 0033 to include two additional individual defendants. OnDecember 8, 1987,
the Republic further amended the complaint through its Amended Complaint [Expanded per
Court-Approved Plaintiffs Manifestation/Motion Dated Dec. 8, 1987] albeit dated October 2,
1987.
More than three years later, on August 23, 1991, the Republic once more amended the
complaint apparently to avert the nullification of the writs of sequestration issued against
properties of Cojuangco. The amended complaint dated August 19, 1991, designated as Third
Amended Complaint [Expanded Per Court-Approved Plaintiffs Manifestation/Motion Dated
Dec. 8, 1987],[8] impleaded in addition to Cojuangco, President Marcos, and First Lady Imelda
R. Marcos nine other individuals, namely: Edgardo J. Angara, Jose C. Concepcion, Avelino V.
Cruz, Eduardo U. Escueta, Paraja G. Hayudini, Juan Ponce Enrile, Teodoro D. Regala, and
Rogelio Vinluan, collectively, the ACCRA lawyers, and Danilo Ursua, and 71 corporations.
On March 24, 1999, the Sandiganbayan allowed the subdivision of the complaint in
Civil Case No. 0033 into eight complaints, each pertaining to distinct transactions and
properties and impleading as defendants only the parties alleged to have participated in the
relevant transactions or to have owned the specific properties involved. The subdivision
resulted into the following subdivided complaints, to wit:
Subdivided Complaint
1. Civil Case No. 0033-A

Subject Matter
Anomalous Purchase and Use of First United
Bank (now United Coconut Planters Bank)

2.

Civil Case No. 0033-B

Creation of Companies Out of Coco Levy

Funds

3.

Civil Case No. 0033-C

Creation and Operation of Bugsuk Project and

Award of P998 Million Damages to
Agricultural Investors, Inc.

4.

Civil Case No. 0033-D

Disadvantageous Purchases and Settlement of

the Accounts of Oil Mills Out of Coco Levy
Funds

5.

Civil Case No. 0033-E

Unlawful Disbursement
ofCoco Levy Funds

6.

Civil Case No. 0033-F

Acquisition of SMC shares of stock

7.

Civil Case No. 0033-G

Acquisition of Pepsi-Cola

8.

Civil Case No. 0033-H

Behest Loans and Contracts

and

Dissipation

In Civil Case No. 0033-F, the individual defendants were Cojuangco, President
Marcos and First Lady Imelda R. Marcos, the ACCRA lawyers, and Ursua. Impleaded as
corporate defendants were Southern Luzon Oil Mills, Cagayan de Oro Oil Company,
Incorporated, Iligan Coconut Industries, Incorporated, San Pablo Manufacturing
Corporation, Granexport Manufacturing Corporation, Legaspi Oil Company, Incorporated,
collectively referred to herein as the CIIF Oil Mills, and their 14 holding companies, namely:
Soriano Shares, Incorporated, Roxas Shares, Incorporated, Arc Investments, Incorporated,
Toda Holdings, Incorporated, ASC Investments, Incorporated, Randy Allied Ventures,
Incorporated, AP Holdings, Incorporated, San Miguel Corporation Officers, Incorporated, Te
Deum Resources, Incorporated, Anglo Ventures, Incorporated, Rock Steel Resources,
Incorporated, Valhalla Properties, Incorporated, and First Meridian Development,
Incorporated.
Allegedly, Cojuangco purchased a block of 33,000,000 shares of SMC stock through
the 14 holding companies owned by the CIIF Oil Mills. For this reason, the block of
33,133,266 shares of SMC stock shall be referred to as the CIIF block of shares.

namely: softdrinks, agribusiness, oil mills, shipping,

manufacturing, textile, as more fully described below.

cement

14. Defendant Eduardo Cojuangco, Jr. taking undue advantage of

his association, influence and connection, acting in unlawful concert with
Defendants Ferdinand E. Marcos and Imelda R. Marcos, and the
individual defendants, embarked upon devices, schemes and stratagems,
including the use of defendant corporations as fronts, to unjustly enrich
themselves at the expense of Plaintiff and the Filipino people, such as
when he misused coconut levy funds to buy out majority of the
outstanding shares of stock of San Miguel Corporation in order to control
the largest agri-business, foods and beverage company in the Philippines,
more particularly described as follows:
(a) Having control over the coconut levy, Defendant
Eduardo M. Cojuangco invested the funds in diverse activities,
such as the various businesses SMC was engaged in (e.g. large
beer, food, packaging, and livestock);
(b) He entered SMC in early 1983 when he bought most of
the 20 million shares Enrique Zobel owned in the Company. The
shares, worth $49 million, represented 20% of SMC;
(c) Later that year, Cojuangco also acquired the Soriano
stocks through a series of complicated and secret agreements, a key
feature of which was a voting trust agreement that stipulated that
Andres, Jr. or his heir would proxy over the vote of the shares
owned by Soriano and Cojuangco. This agreement, which
accounted for 30% of the outstanding shares of SMC and which
lasted for five (5) years, enabled the Sorianos to retain
management control of SMC for the same period;

Also impleaded as defendants in Civil Case No. 0033-F were several

corporations[9] alleged to have been under Cojuangcos control and used by him to acquire the
block of shares of SMC stock totaling 16,276,879 at the time of acquisition (representing
approximately 20% percent of the capital stock of SMC). These corporations are referred to as
Cojuangco corporations or companies, to distinguish them from the CIIF Oil Mills. Reference
hereafter to Cojuangco and the Cojuangco corporations or companies shall be as Cojuangco, et
al., unless the context requires individualization.

(d) Furthermore, in exchange for an SMC investment of

$45 million in non-voting preferred shares in UCPB, Soriano
served as the vice-chairman of the supposed bank of the coconut
farmers, UCPB, and in return, Cojuangco, for investing funds from
the coconut levy, was named vice-chairman of SMC;

The
material
averments
of
the
Republics Third
Complaint (Subdivided)[10] in Civil Case No. 0033-F included the following:

(e) Consequently, Cojuangco enjoyed the privilege of

appointing his nominees to the SMC Board, to which he appointed
key members of the ACCRA Law Firm (herein Defendants)
instead of coconut farmers whose money really funded the sale;

12. Defendant Eduardo Cojuangco, Jr., served as a public officer

during the Marcos administration. During the period of his incumbency as
a public officer, he acquired assets, funds, and other property grossly and
manifestly disproportionate to his salaries, lawful income and income
from legitimately acquired property.
13. Having fully established himself as the undisputed coconut
king with unlimited powers to deal with the coconut levy funds, the stage
was now set for Defendant Eduardo M. Cojuangco, Jr. to launch his
predatory forays into almost all aspects of Philippine economic activity

Amended

(f) The scheme of Cojuangco to use the lawyers of the said

Firm was revealed in a document which he signed on 19 February
1983 entitled Principles and Framework of Mutual Cooperation
and Assistance which governed the rules for the conduct of
management of SMC and the disposition of the shares which he
bought.
(g) All together, Cojuangco purchased 33 million shares of
the SMC through the following 14 holding companies:

a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)

Soriano Shares, Inc.

ASC Investors, Inc.
Roxas Shares, Inc.
ARC Investors, Inc.
Toda Holdings, Inc.
AP Holdings, Inc.
Fernandez Holdings, Inc.
SMC Officers Corps., Inc.
Te Deum Resources, Inc.
Anglo Ventures Corp.
Randy Allied Ventures, Inc.
Rock Steel Resources, Inc.
Valhalla Properties Ltd., Inc.
First Meridian Development, Inc.

1,249,163
1,562,449
2,190,860
4,431,798
3,424,618
1,580,997
838,837
2,385,987
2,674,899
1,000.000
1,000,000
2,432,625
1,361,033
1,000,000
___________
33,133,266

3.1. The same fourteen companies were in turn owned by

the following six (6) so-called CIIF Companies which were:
a)
b)
c)
d)
e)
f)

San Pablo Manufacturing Corp.

Southern Luzon Coconut Oil Mills, Inc.
Granexport Manufacturing Corporation
Legaspi Oil Company, Inc.
Cagayan de Oro Oil Company, Inc.
Iligan Coconut Industries, Inc.

19%
11%
19%
18%
18%
15%
_____
100%

(h) Defendant Corporations are but shell corporations

owned by interlocking shareholders who have previously admitted
that they are just nominee stockholders who do not have any
proprietary interest over the shares in their names. The respective
affidavits of the following, namely: Jose C. Concepcion,
Florentino M. Herrera III, Teresita J. Herbosa, Teodoro D. Regala,
Victoria C. de los Reyes, Manuel R. Roxas, Rogelio A. Vinluan,
Eduardo U. Escuete and Franklin M. Drilon, who were all, at the
time they became such stockholders, lawyers of the Angara Abello
Concepcion Regala & Cruz (ACCRA) Law Offices, the previous
counsel who incorporated said corporations, prove that they were
merely nominee stockholders thereof.
(i) Mr. Eduardo M. Cojuangco, Jr., acquired a total of
16,276,879 shares of San Miguel Corporation from the Ayala
group: of said shares, a total of 8,138,440 (broken into 7,128,227
Class A and 1,010,213 Class B shares) were placed in the names of
Meadowlark Plantations, Inc. (2,034,610) and Primavera Farms,
Inc. (4,069,220). The Articles of Incorporation of these three
companies show that Atty. Jose C. Concepcion of ACCRA owns
99.6% of the entire outstanding stock. The same shareholder
executed three (3) separate Declaration of Trust and Assignment

of Subscription: in favor of a BLANK assignee pertaining to his

shareholdings in Primavera Farms, Inc., Silver Leaf Plantations,
Inc. and Meadowlark Plantations, Inc.
(k) The other respondent Corporations are owned by
interlocking shareholders who are likewise lawyers in
the ACCRA Law Offices and had admitted their status as
nominee stockholders only.
(k-1) The corporations: Agricultural
Consultancy Services, Inc., Archipelago Realty
Corporation, Balete Ranch, Inc., Black Stallion
Ranch, Inc., Discovery Realty Corporation, First
United Transport, Inc., Kaunlaran Agricultural
Corporation, LandAir International Marketing
Corporation, Misty Mountains Agricultural
Corporation, Pastoral Farms, Inc., Oro Verde
Services, Inc. Radyo Filipino Corporation,
Reddee Developers, Inc., Verdant Plantations,
Inc. and Vesta Agricultural Corporation, were
incorporated by lawyers of ACCRA Law Offices.
(k-2) With respect to PCY Oil
Manufacturing Corporation and Metroplex
Commodities, Inc., they are controlled
respectively by HYCO, Inc. and Ventures
Securities, Inc., both of which were incorporated
likewise by lawyers of ACCRA Law Offices.
(k-3) The stockholders who appear as
incorporators in most of the other Respondents
corporations are also lawyers of the ACCRA Law
Offices, who as early as 1987 had admitted under
oath that they were acting only as nominee
stockholders.
(l) These companies, which ACCRA Law Offices
organized for Defendant Cojuangco to be able to control more than
60% of SMC shares, were funded by institutions which depended
upon the coconut levy such as the UCPB, UNICOM, United
Coconut Planters Assurance Corp. (COCOLIFE), among
others. Cojuangco and his ACCRA lawyers used the funds from 6
large coconut oil mills and 10 copra trading companies to borrow
money from the UCPB and purchase these holding companies and
the SMC stocks. Cojuangco used $150 million from the coconut
levy, broken down as follows:
Amount
(in million)

Source

Purpose

$22.26

Oil Mills

equity in holding
companies

$65.6

Oil Mills

loan to holding
companies

$61.2

UCPB

loan to holding
companies [164]

The entire amount, therefore, came from the coconut levy, some
passing through the Unicom Oil mills, others directly from the
UCPB.
(m) With his entry into the said Company, it began to get
favors from the Marcos government, significantly the lowering of
the excise taxes (sales and specific taxes) on beer, one of the main
products of SMC.
(n) Defendant Cojuangco controlled SMC from 1983 until
his co-defendant Marcos was deposed in 1986.
(o) Along
with
Cojuangco,
Defendant
Enrile
and ACCRA also had interests in SMC, broken down as follows:
% of SMC
Cojuangco

Owner

31.3%

coconut levy money

18%

companies linked to Cojuangco

5.2%

government

5.2%

SMC employee retirement fund

Enrile & ACCRA

1.8%
1.8%

Enrile
Jaka Investment Corporation

1.8%

ACCRA Investment Corporation

monopoly. Through insidious means and machinations, ACCRA, being

the wholly-owned investment arm, ACCRA Investments Corporation,
became the holder of approximately fifteen million shares representing
roughly 3.3% of the total outstanding capital stock of UCPB as of 31
March 1987. This ranks ACCRA Investments Corporation number 44
among the top 100 biggest stockholders of UCPB which has
approximately 1,400,000 shareholders. On the other hand, the corporate
books show the name Edgardo J. Angara as holding approximately 3,744
shares as of February, 1984.
16. The acts of Defendants, singly or collectively, and/or in unlawful
concert with one another, constitute gross abuse of official position and
authority, flagrant breach of public trust and fiduciary obligations, brazen
abuse of right and power, unjust enrichment, violation of the constitution
and laws of the Republic of the Philippines, to the grave and irreparable
damage of Plaintiff and the Filipino people.[11]

On June 17, 1999, Ursua and Enrile each filed his separate Answer with Compulsory
Counterclaims.
Before filing their answer, the ACCRA lawyers sought their exclusion as defendants in
Civil Case No. 0033, averring that even as they admitted having assisted in the organization
and acquisition of the companies included in Civil Case No. 0033, they had acted as mere
nominees-stockholders of corporations involved in the sequestration proceedings pursuant to
office practice. After the Sandiganbayan denied their motion, they elevated their cause to this
Court, which ultimately ruled in their favor in the related cases of Regala, et al. v.
Sandiganbayan, et al.[12] and Hayudini v. Sandiganbayan, et al.,[13] as follows:
WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions
of respondent Sandiganbayan (First Division) promulgated on March 18,
1992 and May 21, 1992 are hereby ANNULLED and SET
ASIDE. Respondent Sandiganbayan is further ordered to exclude
petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose
C. Concepcion, Victor P. Lazatin, Eduardo U. Escueta and Paraja G.
Hayudini as parties-defendants in SB Civil Case No. 0033 entitled
Republic of the Philippines v. Eduardo Cojuangco, Jr., et al.
SO ORDERED.
Conformably with the ruling, the Sandiganbayan excluded the ACCRA lawyers from
the case on May 24, 2000.[14]

15. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C.

Concepcion, Teodoro Regala, Avelino Cruz, Rogelio Vinluan, Eduardo U.
Escueta and Paraja G. Hayudini of the Angara Concepcion Cruz Regala
and Abello law offices (ACCRA) plotted, devised, schemed, conspired
and confederated with each other in setting up, through the use of coconut
levy funds, the financial and corporate framework and structures that led
to
the
establishment
of
UCPB,
UNICOM,
COCOLIFE,
COCOMARK. CIC, and more than twenty other coconut levy-funded
corporations, including the acquisition of San Miguel Corporation shares
and its institutionalization through presidential directives of the coconut

On June 23, 1999, Cojuangco filed his Answer to the Third Amended
Complaint,[15] averring the following affirmative defenses, to wit:
7.00. The Presidential Commission on Good Government (PCGG) is
without authority to act in the name and in behalf of the Republic of
the Philippines.
7.01. As constituted in E.O. No. 1, the PCGG was composed of
Minister Jovito R. Salonga, as Chairman, Mr. Ramon Diaz, Mr. Pedro L.

Yap, Mr. Raul Daza and Ms. Mary Concepcion Bautista, as

Commissioners. When the complaint in the instant case was filed,
Minister Salonga, Mr. Pedro L. Yap and Mr. Raul Daza had already left
the PCGG. By then the PCGG had become functus officio.

In his own Answer with Compulsory Counterclaims,[18] Enrile specifically denied the
material averments of the Third Amended Complaint and asserted affirmative defenses.
The CIIF Oil Mills Answer[19] also contained affirmative defenses.

7.02. The Sandiganbayan has no jurisdiction over the complaint or

over the transaction alleged in the complaint.
7.03. The complaint does not allege any cause of action.
7.04. The complaint is not brought in the name of the real parties in
interest, assuming any cause of action exists.

On December 20, 1999, the Sandiganbayan scheduled the pre-trial in Civil Case No.
0033-F on March 8, 2000, giving the parties sufficient time to file their Pre-Trial Briefs prior
to that date. Subsequently, the parties filed their respective Pre-Trial Briefs, as follows:
Cojuangco and the Cojuangco corporations, jointly on February 14, 2000; Enrile, on March 1,
2000; the CIIF Oil Mills, on March 3, 2000; and Ursua, on March 6, 2000. However, the
Republic sought several extensions to file its own Pre-Trial Brief, and eventually did so
on May 9, 2000.

7.05. Indispensable and necessary parties have not been impleaded.

7.06. There is improper joinder of causes of action (Sec. 6, Rule 2,
Rules of Civil Procedure). The causes of action alleged, if any, do not
arise out of the same contract, transaction or relation between the parties,
nor are they simply for money, or are of the same nature and character.
7.07. There is improper joinder of parties defendants (Sec. 11, Rule
3, Rules of Civil Procedure).The causes of action alleged as to defendants,
if any, do not involve a single transaction or a related series of
transactions. Defendant is thus compelled to litigate in a suit regarding
matters as to which he has no involvement. The questions of fact and law
involved are not common to all defendants.
7.08. In so far as the complaint seeks the forfeiture of assets
allegedly acquired by defendant manifestly out of proportion to their
salaries, to their other lawful income and income from legitimately
acquired property, under R.A. 1379, the previous inquiry similar to
preliminary investigation in criminal cases required to be conducted
under Sec. 2 of that law before any suit for forfeiture may be instituted,
was not conducted; as a consequence, the Court may not acquire and
exercise jurisdiction over such a suit.
7.09. The complaint in the instant suit was filed July 31, 1987, or
within one year before the local election held on January 18, 1988. If this
suit involves an action under R.A. 1379, its institution was also in direct
violation of Sec. 2, R.A. No. 1379.
7.10. E.O. No. 1, E.O. No. 2, E.O. No. 14 and 14-A, are
unconstitutional. They violate due process, equal protection, ex post facto
and bill of attainder provisions of the Constitution.
7.11. Acts imputed to defendant which he had committed were done
pursuant to law and in good faith.
The Cojuangco corporations Answer[16] had the same tenor as the Answer of
Cojuangco.
In his own Answer with Compulsory Counterclaims,[17] Ursua averred affirmative and
special defenses.

In the meanwhile, some non-parties sought to intervene. On November 22, 1999,

GABAY Foundation, Inc. (GABAY) filed its complaint-in-intervention. On February 24,
2000, the Philippine Coconut Producers Federation, Inc., Maria Clara L. Lobregat, Jose R.
Eleazar, Jr., Domingo Espina, Jose Gomez, Celestino Sabate, Manuel del Rosario, Jose
Martinez, Jr., and Eladio Chato (collectively referred to as COCOFED, considering that the
co-intervenors were its officers) also sought to intervene, citing the October 2, 1989 ruling in
G.R. No. 75713 entitled COCOFED v. PCGG whereby the Court recognized COCOFED as
the private national association of coconut producers certified in 1971 by the PHILCOA as
having the largest membership among such producers and as such entrusted it with the task
of maintaining continuing liaison with the different sectors of the industry, the government
and its mass base. Pending resolution of its motion for intervention, COCOFED filed a PreTrial Brief on March 2, 2000.
On May 24, 2000, the Sandiganbayan denied GABAYs intervention without prejudice
because it found that the allowance of GABAY to enter under the special character in which
it presents itself would be to open the doors to other groups of coconut farmers whether of the
same kind or of any other kind which could be considered a sub-class or a sub-classification of
the coconut planters or the coconut industry of this country.[20]
COCOFEDs intervention as defendant was allowed on May 24, 2000, however,
because the position taken by the COCOFED is relevant to the proceedings herein, if only to
state that there is a special function which the COCOFED and the coconut planters have in the
matter of the coconut levy funds and the utilization of those funds, part of which is in dispute
in the instant matter.[21]
The pre-trial was actually held on May 24, 2000,[22] during which the Sandiganbayan
sought clarification from the parties, particularly the Republic, on their respective positions,
but at the end it found the clarifications inadequately enlightening. Nonetheless, the
Sandiganbayan, not disposed to reset, terminated the pre-trial:
xxx primarily because the Court is given a very clear impression that the
plaintiff does not know what documents will be or whether they are even
available to prove the causes of action in the complaint. The Court has
pursued and has exerted every form of inquiry to see if there is a way by
which the plaintiff could explain in any significant particularity the acts
and the evidence which will support its claim of wrong-doing by the
defendants. The plaintiff has failed to do so.[23]

The following material portions of the pre-trial order[24] are quoted to provide a
proper perspective of what transpired during the pre-trial, to wit:
Upon oral inquiry from the Court, the issues which were being raised
by plaintiff appear to have been made on a very generic
character. Considering that any claim for violation or breach of trust or
deception cannot be made on generic statements but rather by specific acts
which would demonstrate fraud or breach of trust or deception, together
with the evidence in support thereof, the same was not acceptable to the
Court.
The plaintiff through its designated counsel for this morning, Atty.
Dennis Taningco, has represented to this Court that the annexes to its pretrial brief, more particularly the findings of the COA in its various
examinations, copies of which COA reports are attached to the pre-trial
brief, would demonstrate the wrong, the act or omission attributed to the
defendants or to several of them and the basis, therefore, for the relief that
plaintiff seeks in its complaint. It would appear, however, that the plaintiff
through its counsel at this time is not prepared to go into the specifics of
the identification of these wrongs or omissions attributed to plaintiff.
The Court has reminded the plaintiff that a COA report proves itself
only in proceedings where the issue arises from a review of the
accountability of particular officers and, therefore, to show the existence
of shortages or deficiencies in an examination conducted for that purpose,
provided that such a report is accompanied by its own working papers and
other supporting documents.
In civil cases such as this, a COA report would not have the same
independent probative value since it is not a review of the accountability
of public officers for public property in their custody as accountable
officers. It has been the stated view of this Court that a COA report, to be
of significant evidence, may itself stand only on the basis of the supporting
documents that upon which it is based and upon an analysis made by those
who are competent to do so. The Court, therefore, sought a more specific
statement from plaintiff as to what these documents were and which of
them would prove a particular act or omission or a series of acts or
omissions purportedly committed by any, by several or by all of the
defendants in any particular stage of the chain of alleged wrong-doing in
this case.
The plaintiff was not in a position to do so.
The Court has remonstrated with the plaintiff, insofar as its
inadequacy is concerned, primarily because this case was set for pre-trial
as far back as December and has been reset from its original setting, with
the undertaking by the plaintiff to prepare itself for these proceedings. It
appears to this Court at this time that the failure of the plaintiff to have
available responses and specific data and documents at this stage is not
because the matter has been the product of oversight or notes and papers
left elsewhere; rather, the agitation of this Court arises from the fact that at
this very stage, the plaintiff through its counsel does not know what these

documents are, where these documents will be and is still anticipating a

submission or a delivery thereof by COA at an undetermined time. The
justification made by counsel for this stance is that this is only pre-trial
and this information and the documents are not needed yet.
The Court is not prepared to postpone the pre-trial anew primarily
because the Court is given a very clear impression that the plaintiff does
not know what documents will be or whether they are even available to
prove the causes of action in the complaint. The Court has pursued and
has exerted every form of inquiry to see if there is a way by which the
plaintiff could explain in any significant particularity the acts and the
evidence which will support its claim of wrong-doing by the
defendants. The plaintiff has failed to do so.
Defendants Cojuangco have come back and reiterated their previous
inquiry as to the statement of the cause of action and the description
thereof. While the Court acknowledges that logically, that statement along
that line would be primary, the Court also recognizes that sometimes the
phrasing of the issue may be determined or may arise after a statement of
the evidence is determined by this Court because the Court can put itself in
a position of more clearly and perhaps more accurately stating what the
issues are. The Pre-Trial Order, after all, is not so much a reflection of
merely separate submissions by all of the parties involved, witnesses by
the Court, as to what the subject matter of litigation will be, including the
determination of what matters of fact remain unresolved. At this time, the
plaintiff has not taken the position on any factual statement or any piece of
evidence which can be subject of admission or denial, nor any specifics of
any act which could be disputed by the defendants; what plaintiff through
counsel has stated are general conclusions, general statements of abuse
and misuse and opportunism.
After an extended break requested by some of the parties, the
sessions were resumed and nothing anew arose from the plaintiff. The
plaintiff sought fifteen (15) days to file a reply to the comments and
observations made by defendant Cojuangco to the pre-trial brief of the
plaintiff. This Court denied this Request since the submissions in
preparation for pre-trial are not litigious or contentious matters. They are
mere assertions or positions which may or may not be meritorious
depending upon the view of the Court of the entire case and if useful at the
pre-trial. At this stage, the plaintiff then reiterated its earlier request to
consider the pre-trial terminated. The Court sought the positions of the
other parties, whether or not they too were prepared to submit their
respective positions on the basis of what was before the Court at pretrial. All of the parties, in the end, have come to an agreement that they
were submitting their own respective positions for purpose of pre-trial on
the basis of the submissions made of record.
With all of the above, the pre-trial is now deemed terminated.
This Order has been overly extended simply because there has been
a need to put on record all of the events that have taken place leading to
the conclusions which were drawn herein.

The parties have indicated a desire to make their submissions outside

of trial as a consequence of this terminated pre-trial, with the plea that the
transcript of the proceedings this morning be made available to them, so
that they may have the basis for whatever assertions they will have to
make either before this Court or elsewhere. The Court deems the same
reasonable and the Court now gives the parties fifteen (15) days after
notice to them that the transcript of stenographic notes of the proceedings
herein are complete and ready for them to be retrieved. Settings for trial
or for any other proceeding hereafter will be fixed by this Court either
upon request of the parties or when the Court itself shall have determined
that nothing else has to be done.
The Court has sought confirmation from the parties present as to the
accuracy of the recapitulation herein of the proceedings this morning and
the Court has gotten assent from all of the parties.
xxx
SO ORDERED.[25]
In the meanwhile, the Sandiganbayan, in order to conform with the ruling
in Presidential Commission on Good Government v. Cojuangco, et al.,[26] resolved
COCOFEDsOmnibus Motion (with prayer for preliminary injunction) relative to who should
vote the UCPB shares under sequestration, holding as follows: [27]
In the light of all of the above, the Court submits itself to
jurisprudence and with the statements of the Supreme Court in G.R. No.
115352 entitled Enrique Cojuangco, Jr., et al. vs. Jaime Calpo, et al. dated
January 27, 1997, as well as the resolution of the Supreme Court
promulgated on January 27, 1999 in the case of PCGG vs. Eduardo
Cojuangco, Jr., et al., G.R. No. 13319 which included the Sandiganbayan
as one of the respondents. In these two cases, the Supreme Court ruled
that the voting of sequestered shares of stock is governed by two
considerations, namely:
1. whether there is prima facie evidence showing that the
said shares are ill-gotten and thus belong to the State;
and
2. whether there is an imminent danger of dissipation thus
necessitating their continued sequestration and voting by
the PCGG while the main issue pends with the
Sandiganbayan.
xxx
xxx
xxx.
In view hereof, the movants COCOFED, et al and Ballares, et al. as
well as Eduardo Cojuangco, et al. who were acknowledged to be
registered stockholders of the UCPB are authorized, as are all other
registered stockholders of the United Coconut Planters Bank, until further
orders from this Court, to exercise their rights to vote their shares of stock
and themselves to be voted upon in the United Coconut Planters Bank

(UCPB) at the scheduled Stockholders Meeting on March 6, 2001 or on

any subsequent continuation or resetting thereof, and to perform such acts
as will normally follow in the exercise of these rights as registered
stockholders.
xxx

xxx

xxx.

Consequently, on March 1, 2001, the Sandiganbayan issued a writ of preliminary

injunction to enjoin the PCGG from voting the sequestered shares of stock of the UCPB.
On July 25, 2002, before Civil Case No. 0033-F could be set for trial, the Republic filed
a Motion for Judgment on the Pleadings and/or for Partial Summary Judgment (Re:
Defendants CIIF Companies, 14 Holding Companies and COCOFED, et al.).[28]
Cojuangco, Enrile, and COCOFED separately opposed the motion. Ursua adopted
COCOFEDs opposition.
Thereafter, the Republic likewise filed a Motion for Partial Summary Judgment [Re:
Shares in San Miguel Corporation Registered in the Respective Names of Defendant Eduardo
M. Cojuangco, Jr. and the Defendant Cojuangco Companies].[29]
Cojuangco, et al. opposed the motion,[30] after which the Republic submitted its
reply.[31]
On February 23, 2004, the Sandiganbayan issued an order,[32] in which it enumerated the
admitted facts or facts that appeared to be without substantial controversy in relation to the
Republics Motion for Judgment on the Pleadings and/or for Partial Summary Judgment [Re:
Defendants CIIF Companies, 14 Holding Companies and COCOFED, et al.].
Commenting on the order of February 23, 2004, Cojuangco, et al. specified the
items they considered as inaccurate, but particularly interposed no objection to item no. 17 (to
the extent that item no. 17 stated that Cojuangco had disclaimed any interest in the CIIF block
SMC shares of stock registered in the names of the 14 corporations listed in item no. 1 of the
order).[33]
The Republic also filed its Comment,[34] but COCOFED denied the admitted facts
summarized in the order of February 23, 2004.[35]
Earlier, on October 8, 2003,[36] the Sandiganbayan resolved the various pending motions
and pleadings relative to the writs of sequestration issued against the defendants, disposing:
IN VIEW OF THE FOREGOING, the Writs of Sequestration Nos. (a)
86-0042 issued on April 8, 1986, (b) 86-0062 issued on April 21, 1986, (c)
86-0069 issued on April 22, 1986, (d) 86-0085 issued on May 9, 1986, (e)
86-0095 issued on May 16, 1986, (f) 86-0096 dated May 16, 1986, (g) 860097 issued on May 16, 1986, (h) 86-0098 issued on May 16, 1986 and (i)
87-0218 issued on May 27, 1987 are hereby declared automatically lifted
for being null and void.
Despite the lifting of the writs of sequestration, since the Republic
continues to hold a claim on the shares which is yet to be resolved, it is

hereby ordered that the following shall be annotated in the relevant

corporate books of San Miguel Corporation:
(1) any sale, pledge, mortgage or other disposition of any
of the shares of the Defendants Eduardo Cojuangco, et al.
shall be subject to the outcome of this case;
(2) the Republic through the PCGG shall be given
twenty (20) days written notice by Defendants Eduardo
Cojuangco, et al. prior to any sale, pledge, mortgage or other
disposition of the shares;
(3) in the event of sale, mortgage or other disposition of
the shares, by the Defendants Cojuangco, et al., the
consideration therefore, whether in cash or in kind, shall be
placed in escrow with Land Bank of the Philippines, subject
to disposition only upon further orders of this Court; and
(4) any cash dividends that are declared on the shares
shall be placed in escrow with the Land Bank of
the Philippines, subject to disposition only upon further orders
of this Court. If in case stock dividends are declared, the
conditions on the sale, pledge, mortgage and other disposition
of any of the shares as above-mentioned in conditions 1, 2 and
3, shall likewise apply.
In so far as the matters raised by Defendants Eduardo Cojuangco,
et al. in their Omnibus Motion dated September 23, 1996 and Reply to
PCGGs Comment/Opposition with Motion to Order PCGG to Complete
Inventory, to Nullify Writs of Sequestration and to Enjoin PCGG from
Voting Sequestered Shares of Stock dated January 3, 1997, considering
the above conclusion, this Court rules that it is no longer necessary to
delve into the matters raised in the said Motions.
SO ORDERED.[37]
Cojuangco, et al. moved for the modification of the resolution,[38] praying for the
deletion of the conditions for allegedly restricting their rights. The Republic also sought
reconsideration of the resolution.[39]
Eventually, on June 24, 2005, the Sandiganbayan denied both motions, but reduced
the restrictions thuswise:
WHEREFORE, the Motion for Reconsideration (Re: Resolution
dated September 17, 2003 Promulgated on October 8, 2003)
dated October 24, 2003 of Plaintiff Republic is hereby DENIED for lack
of merit. As to the Motion for Modification (Re: Resolution Promulgated
on October 8, 2003) dated October 22, 2003, the same is hereby DENIED
for lack of merit. However, the restrictions imposed by this Court in its
Resolution dated September 17, 2003 and promulgated on October 8,
2003 shall now read as follows:

Despite the lifting of the writs of sequestration, since

the Republic continues to hold a claim on the shares which is
yet to be resolved, it is hereby ordered that the following shall
be annotated in the relevant corporate books of San Miguel
Corporation:
a) any sale, pledge, mortgage or other disposition of
any of the shares of the Defendants Eduardo Cojuangco, et al.
shall be subject to the outcome of this case.
b) the Republic through the PCGG shall be given
twenty (20) days written notice by Defendants Eduardo
Cojuangco, et al. prior to any sale, pledge, mortgage or other
disposition of the shares.
SO ORDERED.[40]

Pending resolution of the motions relative to the lifting of the writs of sequestration,
SMC filed a Motion for Intervention with attached Complaint-in-Intervention,[41]alleging,
among other things, that it had an interest in the matter in dispute between the Republic and
defendants CIIF Companies for being the owner by purchase of a portion (i.e., 25,450,000
SMC shares covered by Stock Certificate Nos. A0004129 and B0015556 of the so-called
CIIF block of SMC shares of stock sought to be recovered as alleged ill-gotten wealth).
Although Cojuangco, et al. interposed no objection to SMCs intervention, the
Republic opposed,[42] averring that the intervention would be improper and was a mere attempt
to litigate anew issues already raised and passed upon by the Supreme Court. COCOFED
similarly opposed SMCs intervention,[43] and Ursua adopted its opposition.
On May 6, 2004, the Sandiganbayan denied SMCs motion to intervene.[44] SMC sought
reconsideration,[45] and its motion to that effect was opposed by COCOFED and the Republic.
On May 7, 2004, the Sandiganbyan granted the Republics Motion for Judgment on the
Pleadings and/or Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding
Companies and COCOFED, et al.) and rendered a Partial Summary Judgment,[46] the
dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, we hold that:
The Motion for Partial Summary Judgment (Re: Defendants CIIF
Companies, 14 Holding Companies and Cocofed, et al.) filed by Plaintiff
is hereby GRANTED. ACCORDINGLY, THE CIIF COMPANIES,
NAMELY:
1.
2.
3.
4.
5.
6.

Southern Luzon Coconut Oil Mills (SOLCOM);

Cagayan de Oro Oil Co., Inc. (CAGOIL);
Iligan Coconut Industries, Inc. (ILICOCO);
San Pablo Manufacturing Corp. (SPMC);
Granexport Manufacturing Corp. (GRANEX); and
Legaspi Oil Co., Inc. (LEGOIL),

AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:

1. Soriano Shares, Inc.;
2. ACS Investors, Inc.;
3. Roxas Shares, Inc.;
4. Arc Investors, Inc.;
5. Toda Holdings, Inc.;
6. AP. Holdings, Inc.;
7. Fernandez Holdings, Inc.;
8. SMC Officers Corps. Inc.;
9. Te Deum Resources, Inc.;
10. Anglo Ventures, Inc.;
11. Randy Allied Ventures, Inc.;
12. Rock Steel Resources, Inc.;
13. Valhalla Properties Ltd., Inc.; and
14. First Meridian Development, Inc.
AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC)
SHARES OF STOCK TOTALING 33,133,266 SHARES AS OF 1983
TOGETHER WITH ALL DIVIDENDS DECLARED, PAID AND
ISSUED THEREON AS WELL AS ANY INCREMENTS THERETO
ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PREEMPTIVE RIGHTS ARE DECLARED OWNED BY THE
GOVERNMENT IN-TRUST FOR ALL THE COCONUT FARMERS
AND ORDERED RECONVEYED TO THE GOVERNMENT.
Let the trial of this Civil Case proceed with respect to the issues
which have not been disposed of in this partial Summary Judgment,
including the determination of whether the CIIF Block of SMC Shares
adjudged to be owned by the Government represents 27% of the issued
and outstanding capital stock of SMC according to plaintiff or 31.3% of
said capital stock according to COCOFED, et al. and Ballares, et al.
SO ORDERED.[47]

In the same resolution of May 7, 2004, the Sandiganbayan considered the Motions to
Dismiss filed by Cojuangco, et al. on August 2, 2000 and by Enrile on September 4, 2000 as
overtaken by the Republics Motion for Judgment on the Pleadings and/or Partial Summary
Judgment.[48]
On May 25, 2004, Cojuangco, et al. filed their Motion for Reconsideration.[49]
COCOFED filed its so-called Class Action Omnibus Motion: (a) Motion to Dismiss
for Lack of Subject Matter Jurisdiction and Alternatively, (b) Motion for
Reconsideration dated May 26, 2004.[50]
The Republic submitted its Consolidated Comment.[51]
Relative to the resolution of May 7, 2004, the Sandiganbayan issued its resolution of
December 10, 2004,[52] denying the Republics Motion for Partial Summary Judgment (Re:

Shares in San Miguel Corporation Registered in the Respective Names of Defendants

Eduardo M. Cojuangco, Jr. and the defendant Cojuangco Companies) upon the following
reasons:
In the instant case, a circumspect review of the records show that
while there are facts which appear to be undisputed, there are also
genuine factual issues raised by the defendants which need to be
threshed out in a full-blown trial. Foremost among these issues are the
following:
1)

What are the various sources of funds, which the

defendant Cojuangco and his companies claim they
utilized to acquire the disputed SMC shares?

2)

Whether or not such funds acquired from alleged

various sources can be considered coconut levy funds;

3)

Whether or not defendant Cojuangco had indeed served

in the governing bodies of PC, UCPB and/or CIIF Oil
Mills at the time the funds used to purchase the SMC
shares were obtained such that he owed a fiduciary duty
to render an account to these entities as well as to the
coconut farmers;

4)

Whether or not defendant Cojuangco took advantage of

his position and/or close ties with then President Marcos
to obtain favorable concessions or exemptions from the
usual financial requirements from the lending banks
and/or coco-levy funded companies, in order to raise the
funds to acquire the disputed SMC shares; and if so, what
are these favorable concessions or exemptions?

Answers to these issues are not evident from the submissions of

the plaintiff and must therefore be proven through the presentation of
relevant and competent evidence during trial. A perusal of the
subject Motion shows that the plaintiff hastily derived conclusions
from the defendants statements in their previous pleadings although
such conclusions were not supported by categorical facts but only
mere inferences. In the Reply dated October 2, 2003, the plaintiff
construed the supposed meaning of the phrase various sources
(referring to the source of defendant Cojuangcos funds which were
used to acquire the subject SMC shares), which plaintiff said was
quite obvious from the defendants admission in his Pre-Trial Brief,
which we quote:
According to Cojuangcos own Pre-Trial Brief, these
so-called various sources, i.e., the sources from which he
obtained the funds he claimed to have used in buying the 20%
SMC shares are not in fact various as he claims them to
be. He says he obtained loans from UCPB and advances
from the CIIF Oil Mills. He even goes as far as to admit that
his only evidence in this case would have been records of

UCPB and a representative of the CIIF Oil Mills obviously

the records of UCPB relate to the loans that Cojuangco
claims to have obtained from UCPB of which he was
President and CEO while the representative of the CIIF Oil
Mills will obviously testify on the advances Cojuangco
obtained from CIIF Oil Mills of which he was also the
President and CEO.
From the foregoing premises, plaintiff went on to conclude that:
These admissions of defendant Cojuangco are outright
admissions that he (1) took money from the bank entrusted by
law with the administration of coconut levy funds and (2)
took more money from the very corporations/oil mills in
which part of those coconut levy funds (the CIIF) was placed
treating the funds of UCPB and the CIIF as his own
personal capital to buy his SMC shares.
We cannot agree with the plaintiffs contention that the
defendants statements in his Pre-Trial Brief regarding the
presentation of a possible CIIF witness as well as UCPB records, can
already be considered as admissions of the defendants exclusive use
and misuse of coconut levy funds to acquire the subject SMC shares
and defendant Cojuangcos alleged taking advantage of his positions
to acquire the subject SMC shares. Moreover, in ruling on a motion
for summary judgment, the court should take that view of the
evidence most favorable to the party against whom it is directed,
giving such party the benefit of all inferences. Inasmuch as this issue
cannot be resolved merely from an interpretation of the defendants
statements in his brief, the UCPB records must be produced and the
CIIF witness must be heard to ensure that the conclusions that will be
derived have factual basis and are thus, valid.
WHEREFORE, in view of the forgoing, the Motion for Partial
Summary Judgment dated July 11, 2003 is hereby DENIED for lack of
merit.
SO ORDERED.
Thereafter, on December 28, 2004, the Sandiganbayan resolved the other pending
motions,[53] viz:
WHEREFORE, in view of the foregoing, the Motion for
Reconsideration dated May 25, 2004 filed by defendant Eduardo M.
Cojuangco, Jr., et al. and the Class Action Omnibus Motion: (a) Motion to
Dismiss for Lack of Subject Matter Jurisdiction and Alternatively, (b)
Motion for Reconsideration dated May 26, 2004 filed by COCOFED, et
al. and Ballares, et al. are hereby DENIED for lack of merit.
SO ORDERED.[54]

COCOFED moved to set the case for trial,[55] but the Republic opposed the
motion.[56] On their part, Cojuangco, et al. also moved to set the trial,[57] with the Republic
similarly opposing the motion.[58]
On March 23, 2006, the Sandiganbayan granted the motions to set for trial and set
the trial on August 8, 10, and 11, 2006.[59]
In the meanwhile, on August 9, 2005, the Republic filed a Motion for Execution of
Partial Summary Judgment (re: CIIF block of SMC Shares of Stock),[60] contending that an
execution pending appeal was justified because any appeal by the defendants of the Partial
Summary Judgment would be merely dilatory.
Cojuangco, et al. opposed the motion.[61]
The Sandiganbayan denied the Republics Motion for Execution of Partial Summary
Judgment (re: CIIF block of SMC Shares of Stock),[62] to wit:
WHEREFORE, the MOTION FOR EXECUTION OF PARTIAL
SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF
STOCK) dated August 8, 2005 of the plaintiff is hereby denied for lack of
merit. However, this Court orders the severance of this particular claim of
Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now
considered a separate final and appealable judgment with respect to the
said CIIF Block of SMC shares of stock.
The Partial Summary Judgment rendered on May 7, 2004 is
modified by deleting the last paragraph of the dispositive portion which
will now read, as follows:
WHEREFORE, in view of the foregoing, we hold that:
The Motion for Partial Summary Judgment (Re:
Defendants CIIF Companies, 14 Holding Companies and
Cocofed, et al.) filed by Plaintiff is hereby
GRANTED. ACCORDINGLY, THE CIIF COMPANIES,
NAMELY:
1.
2.
3.
4.
5.

Southern Coconut Oil Mills (SOLCOM);

Cagayan de Oro Oil Co., Inc. (CAGOIL);
Iligan Coconut Industries, Inc. (ILICOCO);
San Pablo Manufacturing Corp. (SPMC);
Granexport Manufacturing Corp.
(GRANEX); and
Legaspi Oil Co., Inc. (LEGOIL),

6.
AS WELL
NAMELY:
1.
2.
3.
4.

AS

THE

14

Soriano Shares, Inc.;

ACS Investors, Inc.;
Roxas Shares, Inc.;
Arc Investors, Inc.;

HOLDING

COMPANIES,

5. Toda Holdings, Inc.;

6. AP Holdings, Inc.;
7. Fernandez Holdings, Inc.;
8. SMC Officers Corps, Inc.;
9. Te Deum Resources, Inc.;
10. Anglo Ventures, Inc.;
11. Randy Allied Ventures, Inc.;
12. Rock Steel Resources, Inc.;
13. Valhalla Properties Ltd., Inc.; and
14. First Meridian Development, Inc.
AND THE CIIF BLOCK OF SAN MIGUEL
CORPORATION (SMC) SHARES OF STOCK TOTALING
33,133,266 SHARES AS OF 1983 TOGETHER WITH ALL
DIVIDENDS DECLARED, PAID AND ISSUED THEREON
AS WELL AS ANY INCREMENTS THERETO ARISING
FROM, BUT NOT LIMITED TO, EXERCISE OF PREEMPTIVE RIGHTS ARE DECLARED OWNED BY THE
GOVERNMENT IN TRUST FOR ALL THE COCONUT
FARMERS AND ORDERED RECONVEYED TO THE
GOVERNMENT.
The aforementioned Partial Summary Judgment is now deemed a
separate appealable judgment which finally disposes of the ownership of
the CIIF Block of SMC Shares, without prejudice to the continuation of
proceedings with respect to the remaining claims particularly those
pertaining to the Cojuangco, et al. block of SMC shares.

liable to their transferees-buyers, especially if they are buyers in good faith

and for value. In such eventuality, defendants Cojuangco, et al. cannot be
shielded by the cloak of principle of caveat emptor because case law has it
that this rule only requires the purchaser to exercise such care and
attention as is usually exercised by ordinarily prudent men in like business
affairs, and only applies to defects which are open and patent to the
service of one exercising such care.
Moreover, said defendants Eduardo M. Cojuangco, et al. are
hereby ordered to render their report on the sale within ten (10) days from
completion of the payment by the San Miguel Corporation Retirement
Plan.
SO ORDERED.[68]
Cojuangco, et al. later rendered a complete accounting of the proceeds from the sale
of the Cojuangco block of shares of SMC stock, informing that a total amount
of P4,786,107,428.34 had been paid to the UCPB as loan repayment. [69]
It appears that the trial concerning the disputed block of shares was not scheduled
because the consideration and resolution of the aforecited motions for summary judgment
occupied much of the ensuing proceedings.
At the hearing of August 8, 2006, the Republic manifested[70] that it did not intend to
present any testimonial evidence and asked for the marking of certain exhibits that it would
have the Sandiganbayan take judicial notice of. The Republic was then allowed to mark
certain documents as its Exhibits A to I, inclusive, following which it sought and was granted
time within which to formally offer the exhibits.

SO ORDERED.[63]
During the pendency of the Republics motion for execution, Cojuangco, et al. filed
a Motion for Authority to Sell San Miguel Corporation (SMC) shares, praying for leave to
allow the sale of SMC shares to proceed, exempted from the conditions set forth in the
resolutions promulgated on October 3, 2003 and June 24, 2005. [64] The Republic
opposed, contending that the requested leave to sell would be tantamount to removing
jurisdiction over the res or the subject of litigation.[65]
However, the Sandiganbayan eventually granted the Motion for Authority to Sell San
Miguel Corporation (SMC) shares.[66]
Thereafter, Cojuangco, et al. manifested to the Sandiganbayan that the shares would
be sold to the San Miguel Corporation Retirement Plan. [67] Ruling on the manifestations of
Cojuangco, et al., the Sandiganbayan issued its resolution of July 30, 2007 allowing the sale of
the shares, to wit:
This notwithstanding however, while the Court exempts the sale
from the express condition that it shall be subject to the outcome of the
case, defendants Cojuangco, et al. may well be reminded that despite the
deletion of the said condition, they cannot transfer to any buyer any
interest higher than what they have. No one can transfer a right to another
greater than what he himself has. Hence, in the event that the Republic
prevails in the instant case, defendants Cojuangco, et al. hold themselves

On August 31, 2006, the Republic filed its Manifestation of Purposes (Re: Matters
Requested or Judicial Notice on the 20% Shares in San Miguel Corporation Registered in the
Respective Names of defendant Eduardo M. Cojuangco, Jr. and the defendant Cojuangco
Companies).[71]
On September 18, 2006, the Sandiganbayan issued the following resolution, [72] to
wit:
Acting on the Manifestation of Purposes (Re: Matters Requested or
Judicial Notice on the 20% Shares in San Miguel Corporation Registered
in the Respective names of Defendant Eduardo M. Cojuangco, Jr. and the
Defendant Cojuangco Companies) dated 28 August 2006 filed by the
plaintiff, which has been considered its formal offer of evidence, and the
Comment of Defendants Eduardo M. Cojuangco, Jr., et al. on Plaintiffs
Manifestation of Purposes Dated August 30, 2006 dated September
15, 2006, the court resolves to ADMIT all the exhibits offered, i.e.:

Exhibit A the Answer of defendant Eduardo M.

Cojuangco, Jr. to the Third Amended Complaint (Subdivided)
dated June 23, 1999, as well as the sub-markings (Exhibit A1 to A-4;
Exhibit B the Pre-Trial Brief dated January 11, 2000 of
defendant CIIF Oil Mills and fourteen (14) CIIF Holding

Companies, as well as the sub-markings Exhibits B-1 and

B-2
Exhibit C the Pre-Trial Brief dated January 11, 2000 of
defendant Eduardo M. Cojuangco, Jr. as well as the submarkings Exhibits C-1, C-1-a and C-1-b;
Exhibit D the Plaintiffs Motion for Summary Judgment
[Re: Shares in San Miguel Corporation Registered in the
Respective Names of Defendant Eduardo M. Cojuangco, Jr.
and the Defendant Cojuangco Companies] dated July 11,
2003, as well as the sub-markings Exhibits D-1 to D-4

The Republic came to the Court via petition for certiorari[77] to assail the denial of
its Motion for Partial Summary Judgment through the resolution promulgated on December
10, 2004, insisting that the Sandiganbayan thereby committed grave abuse of discretion: (a) in
holding that the various sources of funds used in acquiring the SMC shares of stock remained
disputed; (b) in holding that it was disputed whether or not Cojuangco had served in the
governing bodies of PCA, UCPB, and/or the CIIF Oil Mills; and (c) in not finding that
Cojuangco had taken advantage of his position and had violated his fiduciary obligations in
acquiring the SMC shares of stock in issue.
The Court will consider and resolve the issues thereby raised alongside the issues
presented in G.R. No. 180702.

the said exhibits being part of the record of the case, as well as
G.R. No. 169203

Exhibit E Presidential Decree No. 961 dated July 11,

1976;
Exhibit F Presidential Decree No. 755 dated July 29,
1975;
Exhibit G Presidential Decree No. 1468 dated June 11,
1978;
Exhibit H Decision of the Supreme Court in Republic vs.
COCOFED, et al., G.R. Nos. 147062-64, December 14,
2001, 372 SCRA 462

the aforementioned exhibits being matters of public record.

The admission of these exhibits is being made over the objection of
the defendants Cojuangco, et al. as to the relevance thereof and as to the
purposes for which they were offered in evidence, which matters shall be
taken into consideration by the Court in deciding the case on the merits.
The trial hereon shall proceed on November 21, 2006, at 8:30 in
the morning as previously scheduled.[73]

During the hearing on November 24, 2006, Cojuangco, et al. filed their Submission and
Offer of Evidence of Defendants,[74] formally offering in evidence certain documents to
substantiate their counterclaims, and informing that they found no need to present
countervailing evidence because the Republics evidence did not prove the allegations of
the Complaint. On December 5, 2006, after the Republic submitted its Comment,[75] the
Sandiganbayan admitted the exhibits offered by Cojuangco, et al., and granted the parties a
non-extendible period within which to file their respective memoranda and reply-memoranda.
Thereafter, on February 23, 2007, the Sandiganbayan considered the case submitted for
decision.[76]
ISSUES
The various issues submitted for consideration by the Court are summarized
hereunder.
G.R. No. 166859

In the resolution promulgated on October 8, 2003, the Sandiganbayan declared as

automatically lifted for being null and void nine writs of sequestration (WOS) issued against
properties of Cojuangco and Cojuangco companies, considering that: (a) eight of them (i.e.,
WOS No. 86-0062 dated April 21, 1986; WOS No. 86-0069 dated April 22, 1986; WOS No.
86-0085 dated May 9, 1986; WOS No. 86-0095 dated May 16, 1986; WOS No. 86-0096 dated
May 16, 1986; WOS No. 86-0097 dated May 16, 1986; WOS No. 86-0098 dated May 16,
1986; and WOS No. 87-0218 dated May 27, 1987) had been issued by only one PCGG
Commissioner, contrary to the requirement of Section 3 of the Rules of the PCGG for at least
two Commissioners to issue the WOS; and (b) the ninth (i.e., WOS No. 86-0042 dated April 8,
1986), although issued prior to the promulgation of the Rules of the PCGG requiring at least
two Commissioners to issue the WOS, was void for being issued without prior
determination by the PCGG of a prima facie basis for sequestration.
Nonetheless, despite its lifting of the nine WOS, the Sandiganbayan prescribed four
conditions to be still annotated in the relevant corporate books of San Miguel Corporation
considering that the Republic continues to hold a claim on the shares which is yet to be
resolved.[78]
In its resolution promulgated on June 24, 2005, the Sandiganbayan denied the
Republics Motion for Reconsideration filed vis-a-vis the resolution promulgated on October
8, 2003, but reduced the conditions earlier imposed to only two. [79]
On September 1, 2005, the Republic filed a petition for certiorari[80] to annul the
resolutions promulgated on October 8, 2003 and on June 24, 2005 on the ground that the
Sandiganbayan had thereby committed grave abuse of discretion:
I.
XXX IN LIFTING WRIT OF SEQUESTRATION NOS. 86-0042 AND
87-0218 DESPITE EXISTENCE OF THE BASIC REQUISITES FOR
THE VALIDITY OF SEQUESTRATION.
II.
XXX WHEN IT DENIED PETITIONERS ALTERNATIVE PRAYER
IN ITS MOTION FOR RECONSIDERATION FOR THE ISSUANCE OF
AN ORDER OF SEQUESTRATION AGAINST ALL THE SUBJECT
SHARES OF STOCK IN ACCORDNCE WITH THE RULING IN
REPUBLIC VS. SANDIGANBAYAN, 258 SCRA 685 (1996).

III.
XXX IN SUBSEQUENTLY DELETING THE LAST TWO (2)
CONDITIONS WHICH IT EARLIER IMPOSED ON THE SUBJECT
SHARES OF STOCK.[81]

COMPANIES, SHOULD BE RECONVEYED TO THE REPUBLIC OF

THE PHILIPPINES FOR HAVING BEEN ACQUIRED USING
COCONUT LEVY FUNDS.[84]
On their part, the petitioners-in-intervention[85] submit the following issues, to wit:

G.R. No. 180702

On November 28, 2007, the Sandiganbayan promulgated its decision,[82] decreeing
as follows:
WHEREFORE, in view of all the foregoing, the Court is constrained
to DISMISS, as it hereby DISMISSES, the Third Amended Complaint in
subdivided Civil Case No. 0033-F for failure of plaintiff to prove by
preponderance of evidence its causes of action against defendants with
respect to the twenty percent (20%) outstanding shares of stock of San
Miguel Corporation registered in defendants names, denominated herein
as the Cojuangco, et al. block of SMC shares. For lack of satisfactory
warrant, the counterclaims in defendants Answers are likewise ordered
dismissed.
SO ORDERED.
Hence, the Republic appeals, positing:
I.
COCONUT LEVY FUNDS ARE PUBLIC FUNDS. THE SMC SHARES,
WHICH WERE ACQUIRED BY RESPONDENTS COJUANGCO, JR.
AND THE COJUANGCO COMPANIES WITH THE USE OF
COCONUT LEVY FUNDS IN VIOLATION OF RESPONDENT
COJUANGCO, JR.S FIDUCIARY OBLIGATION ARE,
NECESSARILY, PUBLIC IN CHARACTER AND SHOULD BE
RECONVEYED TO THE GOVERNMENT.
II.
PETITIONER
HAS
CLEARLY
DEMONSTRATED
ITS
ENTITLEMENT, AS A MATTER OF LAW, TO THE RELIEFS
PRAYED FOR.[83]
and urging the following issues to be resolved, to wit:
I.
WHETHER THE HONORABLE SANDIGANBAYAN COMMITTED A
REVERSIBLE ERROR WHEN IT DISMISSED CIVIL CASE NO. 0033F; AND

II.
WHETHER OR NOT THE SUBJECT SHARES IN SMC, WHICH
WERE ACQUIRED BY, AND ARE IN THE RESPECTIVE NAMES OF
RESPONDENTS COJUANGCO, JR. AND THE COJUANGCO

I
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED AND
DECIDED THE CASE A QUO IN VIOLATION OF LAW AND
APPLICABLE RULINGS OF THE HONORABLE COURT IN RULING
THAT, WHILE ADMITTEDLY THE SUBJECT SMC SHARES WERE
PURCHASED FROM LOAN PROCEEDS FROM UCPB AND
ADVANCES FROM THE CIIF OIL MILLS, SAID SUBJECT SMC
SHARES ARE NOT PUBLIC PROPERTY
II
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED AND
DECIDED THE CASE A QUO IN VIOLATION OF LAW AND
APPLICABLE RULINGS OF THE HONORABLE COURT IN FAILING
TO RULE THAT, EVEN ASSUMING FOR THE SAKE OF
ARGUMENT THAT LOAN PROCEEDS FROM UCPB ARE NOT
PUBLIC FINDS, STILL, SINCE RESPONDENT COJUANGCO, IN
THE PURCHASE OF THE SUBJECT SMC SHARES FROM SUCH
LOAN PROCEEDS, VIOLATED HIS FIDUCIARY DUTIES AND
TOOK A COMMERCIAL OPPORTUNITY THAT RIGHTFULLY
BELONGED TO UCPB (A PUBLIC CORPORATION), THE SUBJECT
SMC SHARES SHOULD REVERT BACK TO THE GOVERNMENT.

RULING
We deny all the petitions of the Republic.
I
Lifting of nine WOS for violation of PCGG Rules
did not constitute grave abuse of discretion

Through its resolution promulgated on June 24, 2005, assailed on certiorari in G.R.
No. 169203, the Sandiganbayan lifted the nine WOS for the following reasons, to wit:
Having studied the antecedent facts, this Court shall now resolve
the pending incidents especially defendants Motion to Affirm that the
Writs or Orders of Sequestration Issued on Defendants Properties Were
Unauthorized, Invalid and Never Became Effective dated March 5, 1999.
Section 3 of the PCGG Rules and Regulations promulgated
on April 11, 1986, provides:
Sec. 3. Who may issue. A writ of sequestration or a
freeze or hold order may be issued by the Commission upon

the authority of at least two Commissioners, based on the

affirmation or complaint of an interested party or motu propio
(sic) the issuance thereof is warranted.
In this present case, of all the questioned writs of sequestration issued
after the effectivity of the PCGG Rules and Regulations or after April 11,
1986, only writ no. 87-0218 issued on May 27, 1987 complied with the
requirement that it be issued by at least two Commissioners, the same
having been issued by Commissioners Ramon E. Rodrigo and Quintin S.
Doromal. However, even if Writ of Sequestration No. 87-0218 complied
with the requirement that the same be issued by at least two
Commissioners, the records fail to show that it was issued with factual
basis or with factual foundation as can be seen from the Certification of
the Commission Secretary of the PCGG of the excerpt of the minutes of
the meeting of the PCGG held on May 26, 1987, stating therein that:
The Commission approved the recommendation of Dir.
Cruz to sequester all the shares of stock, assets, records, and
documents of Balete Ranch, Inc. and the appointment of the
Fiscal Committee with ECI Challenge, Inc./Pepsi-Cola for
Balete Ranch, Inc. and the Aquacor Marketing Corp. vice
Atty. S. Occena. The objective is to consolidate the Fiscal
Committee activities covering three associated entities of Mr.
Eduardo Cojuangco.Upon recommendation of Comm.
Rodrigo, the reconstitution of the Board of Directors of the
three companies was deferred for further study.
Nothing in the above-quoted certificate shows that there was a prior
determination of a factual basis or factual foundation. It is the absence of
a prima facie basis for the issuance of a writ of sequestration and not the
lack of authority of two (2) Commissioners which renders the said writ
void ab initio. Thus, being the case, Writ of Sequestration No. 87-0218
must be automatically lifted.
As declared by the Honorable Supreme Court in two cases it has
decided,
The absence of a prior determination by the PCGG of
a prima facie basis for the sequestration order is, unavoidably,
a fatal defect which rendered the sequestration of respondent
corporation and its properties void ab initio. And
The corporation or entity against which such writ is
directed will not be able to visually determine its validity,
unless the required signatures of at least two commissioners
authorizing its issuance appear on the very document
itself. The issuance of sequestration orders requires the
existence of a prima facie case. The two commissioner rule
is obviously intended to assure a collegial determination of
such fact. In this light, a writ bearing only one signature is an
obvious transgression of the PCGG Rules.

Consequently, the writs of sequestration nos. 86-0062, 86-0069,

86-0085, 86-0095, 86-0096, 86-0097 and 86-0098 must be lifted for not
having complied with the pertinent provisions of the PCGG Rules and
Regulations, all of which were issued by only one Commissioner and after
April 11, 1986 when the PCGG Rules and Regulations took effect, an utter
disregard of the PCGGs Rules and Regulations. The Honorable Supreme
Court has stated that:
Obviously, Section 3 of the PCGG Rules was intended
to protect the public from improvident, reckless and needless
sequestrations of private property. And since these Rules
were issued by Respondent Commission, it should be the first
entity to observe them.
Anent the writ of sequestration no. 86-0042 which was issued on
April 8, 1986 or prior to the promulgation of the PCGG Rules and
Regulations on April 11, 1986, the same cannot be declared void on the
ground that it was signed by only one Commissioner because at the time it
was issued, the Rules and Regulations of the PCGG were not yet in
effect. However, it again appears that there was no prior determination of
the existence of a prima facie basis or factual foundation for the issuance
of the said writ. The PCGG, despite sufficient time afforded by this Court
to show that a prima facie basis existed prior to the issuance of Writ No.
86-0042, failed to do so. Nothing in the records submitted by the PCGG
in compliance of the Resolutions and Order of this Court would reveal that
a meeting was held by the Commission for the purpose of determining the
existence of a prima facie evidence prior to its issuance. In a case decided
by the Honorable Supreme Court, wherein it involved a writ of
sequestration issued by the PCGG on March 19, 1986 against all assets,
movable and immovable, of Provident International Resources
Corporation and Philippine Casino Operators Corporation, the Honorable
Supreme Court enunciated:
The questioned sequestration order was, however issued
on March 19, 1986, prior to the promulgation of the PCGG
Rules and Regulations. As a consequence, we cannot
reasonably expect the commission to abide by said rules,
which were nonexistent at the time the subject writ was issued
by then Commissioner Mary Concepcion Bautista. Basic is
the rule that no statute, decree, ordinance, rule or regulation
(and even policies) shall be given retrospective effect unless
explicitly stated so. We find no provision in said Rules which
expressly gives them retroactive effect, or implies the
abrogation of previous writs issued not in accordance with the
same Rules. Rather, what said Rules provide is that they
shall be effective immediately, which in legal parlance, is
understood as upon promulgation. Only penal laws are
given retroactive effect insofar as they favor the accused.
We
distinguish
this
case
from Republic
vs.
Sandiganbayan, Romualdez and Dio Island Resort, G.R. No.
88126, July 12, 1996 where the sequestration order against

Dio Island Resort, dated April 14, 1986, was prepared, issued
and signed not by two commissioners of the PCGG, but by
the head of its task force in Region VIII. In holding that said
order was not valid since it was not issued in accordance with
PCGG Rules and Regulations, we explained:
(Sec. 3 of the PCGG Rules and Regulations),
couched in clear and simple language, leaves no
room for interpretation. On the basis thereof, it is
indubitable that under no circumstances can a
sequestration or freeze order be validly issued by
one not a commissioner of the PCGG.
xxx

xxx

xxx

Even assuming arguendo that Atty. Ramirez

had been given prior authority by the PCGG to
place Dio Island Resort under sequestration,
nevertheless, the sequestration order he issued is
still void since PCGG may not delegate its authority
to sequester to its representatives and subordinates,
and any such delegation is valid and ineffective.
We further said:
In the instant case, there was clearly no prior
determination made by the PCGG of a prima facie basis for
the sequestration of Dio Island Resort, Inc. x x x
xxx

xxx

xxx

The absence of a prior determination by the PCGG of

a prima facie basis for the sequestration order is, unavoidably,
a fatal defect which rendered the sequestration of respondent
corporation and its properties void ab initio. Being void ab
initio, it is deemed nonexistent, as though it had never been
issued, and therefore is not subject to ratification by the
PCGG.
What were obviously lacking in the above case were the
basic requisites for the validity of a sequestration order which
we laid down in BASECO vs. PCGG, 150 SCRA 181, 216,
May 27, 1987, thus:
Section (3) of the Commissions Rules and regulations
provides that sequestration or freeze (and takeover) orders
issue upon the authority of at least two commissioners, based
on the affirmation or complaint of an interested party, or
motu propio (sic) when the Commission has reasonable
grounds to believe that the issuance thereof is warranted.

In the case at bar, there is no question as to the presence

of prima facie evidence justifying the issuance of the
sequestration order against respondent corporations. But the
said order cannot be nullified for lack of the other requisite
(authority of at least two commissioners) since, as explained
earlier, such requisite was nonexistent at the time the order
was issued.
As to the argument of the Plaintiff Republic that Defendants
Cojuangco, et al. have not shown any contrary prima facie proof that the
properties subject matter of the writs of sequestration were legitimate
acquisitions, the same is misplaced. It is a basic legal doctrine, as well as
many times enunciated by the Honorable Supreme Court that when
a prima facie proof is required in the issuance of a writ, the party seeking
such extraordinary writ must establish that it is entitled to it by complying
strictly with the requirements for its issuance and not the party against
whom the writ is being sought for to establish that the writ should not be
issued against it.

According to the Republic, the Sandiganbayan thereby gravely abused its discretion
in: (a) in lifting WOS No. 86-0042 and No. 87-0218 despite the basic requisites for the
validity of sequestration being existent; (b) in denying the Republics alternative prayer for the
issuance of an order of sequestration against all the subject shares of stock in accordance with
the ruling in Republic v. Sandiganbayan, 258 SCRA 685, as stated in its Motion For
Reconsideration; and (c) in deleting the last two conditions the Sandiganbayan had earlier
imposed on the subject shares of stock.
We sustain the lifting of the nine WOS for the reasons made extant in the assailed
resolution of October 8, 2003, supra.
Section 3 of the Rules of the PCGG, promulgated on April 11, 1986, provides:
Section 3. Who may issue. A writ of sequestration or a freeze or
hold order may be issued by the Commission upon the authority of at least
two Commissioners, based on the affirmation or complaint of an interested
party or motu proprio when the Commission has reasonable grounds to
believe that the issuance thereof is warranted.

Conformably with Section 3, supra, WOS No. 86-0062 dated April 21, 1986; WOS No.
86-0069 dated April 22, 1986; WOS No. 86-0085 dated May 9, 1986; WOS No. 86-0095
dated May 16, 1986; WOS No. 86-0096 dated May 16, 1986; WOS No. 86-0097 dated May
16, 1986; and WOS No. 86-0098 dated May 16, 1986 were lawfully and correctly nullified
considering that only one PCGG Commissioner had issued them.
Similarly, WOS No. 86-0042 dated April 8, 1986 and WOS No. 87-0218 dated May
27, 1987 were lawfully and correctly nullified notwithstanding that WOS No. 86-0042, albeit
signed by only one Commissioner (i.e., Commissioner Mary Concepcion Bautista), was not at
the time of its issuance subject to the two-Commissioners rule, and WOS No. 87-0218, albeit
already issued under the signatures of two Commissioners considering that both had been
issued without a prior determination by the PCGG of aprima facie basis for the sequestration.

Plainly enough, the irregularities infirming the issuance of the several WOS could
not be ignored in favor of the Republic and resolved against the persons whose properties were
subject of the WOS. Where the Rules of the PCGG instituted safeguards under Section
3, supra, by requiring the concurrent signatures of two Commissioners to every WOS issued
and the existence of a prima facie case of ill gotten wealth to support the issuance, the noncompliance with either of the safeguards nullified the WOS thus issued. It is already settled
that sequestration, due to its tendency to impede or limit the exercise of proprietary rights by
private citizens, is construed strictly against the State, conformably with the legal maxim that
statutes in derogation of common rights are generally strictly construed and rigidly confined to
the cases clearly within their scope and purpose.[86]
Consequently, the nullification of the nine WOS, being in implementation of the
safeguards the PCGG itself had instituted, did not constitute any abuse of its discretion, least
of all grave, on the part of the Sandiganbayan.
Nor did the Sandiganbayan gravely abuse its discretion in reducing from four to only
two the conditions imposed for the lifting of the WOS. The Sandiganbayan thereby acted with
the best of intentions, being all too aware that the claim of the Republic to the sequestered
assets and properties might be prejudiced or harmed pendente lite unless the protective
conditions were annotated in the corporate books of SMC. Moreover, the issue became
academic following the Sandiganbayans promulgation of its decision dismissing the
Republics Amended Complaint, which thereby removed the stated reason the Republic
continues to hold a claim on the shares which is yet to be resolved underlying the need for
the annotation of the conditions (whether four or two).
II
The Concept and Genesis of
Ill-Gotten Wealth in the Philippine Setting
A brief review of the Philippine law and jurisprudence pertinent to ill-gotten
wealth should furnish an illuminating backdrop for further discussion.
In the immediate aftermath of the peaceful 1986 EDSA Revolution, the
administration of President Corazon C. Aquino saw to it, among others, that rules defining the
authority of the government and its instrumentalities were promptly put in place. It is
significant to point out, however, that the administration likewise defined the limitations of the
authority.
The first official issuance of President Aquino, which was made on February 28,
1986, or just two days after the EDSA Revolution, was Executive Order (E.O.) No. 1, which
created the Presidential Commission on Good Government (PCGG). Ostensibly, E.O. No. 1
was the first issuance in light of the EDSA Revolution having come about mainly to address
the pillage of the nations wealth by President Marcos, his family, and cronies.

E.O. No. 1 contained only two WHEREAS Clauses, to wit:

WHEREAS, vast resources of the government have been
amassed by former President Ferdinand E. Marcos, his immediate family,
relatives, and close associates both here and abroad;

WHEREAS, there is an urgent need to recover all ill-gotten

wealth;[87]
Paragraph (4) of E.O. No. 2[88] further required that the wealth, to be ill-gotten, must be
acquired by them through or as a result of improper or illegal use of or the conversion of
funds belonging to the Government of the Philippines or any of its branches, instrumentalities,
enterprises, banks or financial institutions, or by taking undue advantage of their official
position, authority, relationship, connection or influence to unjustly enrich themselves at the
expense and to the grave damage and prejudice of the Filipino people and the Republic of the
Philippines.
Although E.O. No. 1 and the other issuances dealing with ill-gotten wealth (i.e., E.O.
No. 2, E.O. No. 14, and E.O. No. 14-A) only identified the subject matter of ill-gotten wealth
and the persons who could amass ill-gotten wealth and did not include an explicit definition
of ill-gotten wealth, we can still discern the meaning and concept of ill-gotten wealth from the
WHEREAS Clauses themselves of E.O. No. 1, in that ill-gotten wealth consisted of the vast
resources of the government amassed by former President Ferdinand E. Marcos, his
immediate family, relatives and close associates both here and abroad. It is clear, therefore,
that ill-gotten wealth would not include all the properties of President Marcos, his immediate
family, relatives, and close associates but only the part that originated from the vast resources
of the government.
In time and unavoidably, the Supreme Court elaborated on the meaning and concept
of ill-gotten wealth. In Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission
on Good Government,[89] or BASECO, for the sake of brevity, the Court held that:
xxx until it can be determined, through appropriate judicial
proceedings, whether the property was in truth ill-gotten, i.e.,
acquired through or as a result of improper or illegal use of or the
conversion of funds belonging to the Government or any of its
branches, instrumentalities, enterprises, banks or financial
institutions, or by taking undue advantage of official position, authority,
relationship, connection or influence, resulting in unjust enrichment of the
ostensible owner and grave damage and prejudice to the State. And this,
too, is the sense in which the term is commonly understood in other
jurisdictions.[90]

The BASECO definition of ill-gotten wealth was reiterated

Commission on Good Government v. Lucio C. Tan,[91] where the Court said:

in Presidential

On this point, we find it relevant to define ill-gotten wealth.

In Bataan Shipyard and Engineering Co., Inc., this Court described illgotten wealth as follows:
Ill-gotten wealth is that acquired through or as a result
of improper or illegal use of or the conversion of funds
belonging to the Government or any of its branches,
instrumentalities, enterprises, banks or financial institutions,
or by taking undue advantage of official position, authority,
relationship, connection or influence, resulting in unjust

enrichment of the ostensible owner and grave damage and

prejudice to the State. And this, too, is the sense in which the
term is commonly understood in other jurisdiction.
Concerning respondents shares of stock here, there is no evidence
presented by petitioner that they belong to the Government of
the Philippines or any of its branches, instrumentalities, enterprises, banks
or financial institutions. Nor is there evidence that respondents, taking
undue advantage of their connections or relationship with former President
Marcos or his family, relatives and close associates, were able to acquire
those shares of stock.

Incidentally, in its 1998 ruling in Chavez v. Presidential Commission on Good

Government,[92] the Court rendered an identical definition of ill-gotten wealth, viz:
xxx. We may also add that ill-gotten wealth, by its very nature,
assumes a public character. Based on the aforementioned Executive
Orders, ill-gotten wealth refers to assets and properties purportedly
acquired, directly or indirectly, by former President Marcos, his immediate
family, relatives and close associates through or as a result of their
improper or illegal use of government funds or properties; or their
having taken undue advantage of their public office; or their use of
powers, influence or relationships, resulting in their unjust enrichment
and causing grave damage and prejudice to the Filipino people and the
Republic of the Philippines. Clearly, the assets and properties referred
to supposedly originated from the government itself. To all intents and
purposes, therefore, they belong to the people. As such, upon
reconveyance they will be returned to the public treasury, subject only
to the satisfaction of positive claims of certain persons as may be adjudged
by competent courts. Another declared overriding consideration for the
expeditious recovery of ill-gotten wealth is that it may be used for national
economic recovery.
All these judicial pronouncements demand two concurring elements to be present
before assets or properties were considered as ill-gotten wealth, namely: (a) they must have
originated from the government itself, and (b) they must have been taken by former
President Marcos, his immediate family, relatives, and close associates by illegal means.
But settling the sources and the kinds of assets and property covered by E.O. No. 1
and related issuances did not complete the definition of ill-gotten wealth. The further
requirement was that the assets and property should have been amassed by former President
Marcos, his immediate family, relatives, and close associates both here and abroad. In this
regard, identifying former President Marcos, his immediate family, and relatives was not
difficult, but identifying other persons who might be the close associates of former President
Marcos presented an inherent difficulty, because it was not fair and just to include within the
term close associates everyone who had had any association with President Marcos, his
immediate family, and relatives.
Again, through several rulings, the Court became the arbiter to determine who were
the close associates within the coverage of E.O. No. 1.

In Republic v. Migrio,[93] the Court held that respondents Migrio, et al. were not
necessarily among the persons covered by the term close subordinate or close associateof
former President Marcos by reason alone of their having served as government officials or
employees during the Marcos administration, viz:
It does not suffice, as in this case, that the respondent is or was a
government official or employee during the administration of former
Pres. Marcos. There must be a prima facie showing that the
respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife. This
is so because otherwise the respondents case will fall under existing
general laws and procedures on the matter. xxx
In Cruz, Jr. v. Sandiganbayan,[94] the Court declared that the petitioner was not
a close associate as the term was used in E.O. No. 1 just because he had served as the
President and General Manager of the GSIS during the Marcos administration.
In Republic v. Sandiganbayan,[95] the Court stated that respondent Maj. Gen.
Josephus Q. Ramas having been a Commanding General of the Philippine Army during the
Marcos administration d[id] not automatically make him a subordinate of former President
Ferdinand Marcos as this term is used in Executive Order Nos. 1, 2, 14 and 14-A absent a
showing that he enjoyed close association with former President Marcos.
It is well to point out, consequently, that the distinction laid down by E.O. No. 1 and its
related issuances, and expounded by relevant judicial pronouncements unavoidably
required competent evidentiary substantiation made in appropriate judicial proceedings to
determine: (a) whether the assets or properties involved had come from the vast resources of
government, and (b) whether the individuals owning or holding such assets or properties were
close associates of President Marcos. The requirement of competent evidentiary
substantiation made in appropriate judicial proceedings was imposed because the factual
premises for the reconveyance of the assets or properties in favor of the government due to
their being ill-gotten wealth could not be simply assumed. Indeed, in BASECO,[96] the Court
made this clear enough by emphatically observing:
6. Governments Right and Duty to Recover All Ill-gotten Wealth
There can be no debate about the validity and eminent propriety of
the Governments plan to recover all ill-gotten wealth.
Neither can there be any debate about the proposition that assuming
the above described factual premises of the Executive Orders and
Proclamation No. 3 to be true, to be demonstrable by competent evidence,
the recovery from Marcos, his family and his minions of the assets and
properties involved, is not only a right but a duty on the part of
Government.
But however plain and valid that right and duty may be, still a
balance must be sought with the equally compelling necessity that a
proper respect be accorded and adequate protection assured, the
fundamental rights of private property and free enterprise which are
deemed pillars of a free society such as ours, and to which all members of
that society may without exception lay claim.

xxx Democracy, as a way of life enshrined in the Constitution,

embraces as its necessary components freedom of conscience, freedom of
expression, and freedom in the pursuit of happiness. Along with these
freedoms are included economic freedom and freedom of enterprise within
reasonable bounds and under proper control. xxx Evincing much concern
for the protection of property, the Constitution distinctly recognizes the
preferred position which real estate has occupied in law for ages. Property
is bound up with every aspect of social life in a democracy as democracy
is conceived in the Constitution. The Constitution realizes the
indispensable role which property, owned in reasonable quantities and
used legitimately, plays in the stimulation to economic effort and the
formation and growth of a solid social middle class that is said to be the
bulwark of democracy and the backbone of every progressive and happy
country.
a.

Need of Evidentiary Substantiation in Proper Suit

Consequently, the factual premises of the Executive Orders

cannot simply be assumed. They will have to be duly established by
adequate proof in each case, in a proper judicial proceeding, so that
the recovery of the ill-gotten wealth may be validly and properly
adjudged and consummated; although there are some who maintain that
the fact that an immense fortune, and vast resources of the government
have been amassed by former President Ferdinand E. Marcos, his
immediate family, relatives, and close associates both here and abroad,
and they have resorted to all sorts of clever schemes and manipulations to
disguise and hide their illicit acquisitions is within the realm of judicial
notice, being of so extensive notoriety as to dispense with proof
thereof. Be this as it may, the requirement of evidentiary
substantiation has been expressly acknowledged, and the procedure to
be followed explicitly laid down, in Executive Order No. 14. [97]

Accordingly, the Republic should furnish to the Sandiganbayan in proper judicial

proceedings the competent evidence proving who were the close associates of President
Marcos who had amassed assets and properties that would be rightly considered as ill-gotten
wealth.
III.
Summary Judgment was not warranted;
The Republic should have adduced evidence
to substantiate its allegations against the Respondents
We affirm the decision of November 28, 2007, because the Republic did not discharge
its burden as the plaintiff to establish by preponderance of evidence that the respondents SMC
shares were illegally acquired with coconut-levy funds.
The decision of November 28, 2007 fully explained why the Sandiganbayan dismissed
the Republics case against Cojuangco, et al., viz:

Going over the evidence, especially the laws, i.e., P.D. No. 961, P.D.
No. 755, and P.D. No. 1468, over which plaintiff prayed that Court to take
judicial notice of, it is worth noting that these same laws were cited by
plaintiff when it filed its motion for judgment on the pleadings and/or
summary judgment regarding the CIIF block of SMC shares of
stock. Thus, the Court has already passed upon the same laws when it
arrived at judgment determining ownership of the CIIF block of SMC
shares of stock. Pertinently, in the Partial Summary Judgment
promulgated onMay 7, 2004, the Court gave the following rulings finding
certain provisions of the above-cited laws to be constitutionally infirmed,
thus:
In this case, Section 2(d) and Section 9 and 10, Article III,
of P.D. Nos. 961 and 1468 mandated the UCPB to utilize the
CIIF, an accumulation of a portion of the CCSF and the
CIDF, for investment in the form of shares of stock in
corporations organized for the purpose of engaging in the
establishment and the operation of industries and commercial
activities and other allied business undertakings relating to
coconut and other palm oils industry in all aspects. The
investments made by UCPB in CIIF companies are required
by the said Decrees to be equitably distributed for free by the
said bank to the coconut farmers (Sec. 10, P.D. No. 961 and
Sec. 10, P.D. No. 1468). The public purpose sought to be
served by the free distribution of the shares of stock acquired
with the use of public funds is not evident in the laws
mentioned. More specifically, it is not clear how private
ownership of the shares of stock acquired with public funds
can serve a public purpose. The mode of distribution of the
shares of stock also left much room for the diversion of assets
acquired through public funds into private uses or to serve
directly private interests, contrary to the Constitution. In the
said distribution, defendants COCOFED, et al. and Ballares,
et al. admitted that UCPB followed the administrative
issuances of PCA which we found to be constitutionally
objectionable in our Partial Summary Judgment in Civil Case
No. 0033-A, the pertinent portions of which are quoted
hereunder:
xxx

xx

xxx.

The distribution for free of the shares of stock of the

CIIF Companies is tainted with the above-mentioned
constitutional infirmities of the PCA administrative
issuances. In view of the foregoing, we cannot consider the
provision of P.D. No. 961 and P.D. No. 1468 and the
implementing regulations issued by the PCA as valid legal
basis to hold that assets acquired with public funds have
legitimately become private properties.
The CIIF Companies having been acquired with public
funds, the 14 CIIF-owned Holding Companies and all their

assets, including the CIIF Block of SMC Shares, being public

in character, belong to the government. Even granting that
the 14 Holding Companies acquired the SMC Shares through
CIIF advances and UCPB loans, said advances and loans are
still the obligations of the said companies. The incorporating
equity or capital of the 14 Holding Companies, which were
allegedly used also for the acquisition of the subject SMC
shares, being wholly owned by the CIIF Companies, likewise
form part of the coconut levy funds, and thus belong to the
government in trust for the ultimate beneficiaries thereof,
which are all the coconut farmers.
xxx

xxx

xxx.

And, with the above-findings of the Court, the CIIF block of SMC
shares were subsequently declared to be of public character and should be
reconveyed to the government in trust for coconut farmers. The foregoing
findings notwithstanding, a question now arises on whether the same laws
can likewise serve as ultimate basis for a finding that the Cojuangco, et al.
block of SMC shares are also imbued with public character and should
rightfully be reconveyed to the government.
On this point, the Court disagrees with plaintiff that reliance on
said laws would suffice to prove that defendants Cojuangco, et al.s
acquisition of SMC shares of stock was illegal as public funds were
used. For one, plaintiffs reliance thereon has always had reference
only to the CIIF block of shares, and the Court has already settled the
same by going over the laws and quoting related findings in the
Partial Summary judgment rendered in Civil Case No. 0033-A. For
another, the allegations of plaintiff pertaining to the Cojuangco block
representing twenty percent (20%) of the outstanding capital stock of
SMC stress defendant Cojuangcos acquisition by virtue of his
positions as Chief Executive Officer of UCPB, a member-director of
the Philippine Coconut Authority (PCA) Governing Board, and a
director of the CIIF Oil Mills. Thus, reference to the said laws would
not settle whether there was abuse on the part of defendants
Cojuangco, et al. of their positions to acquire the SMC shares. [98]
Besides, in the Resolution of the Court on plaintiffs Motion for
Parial Summary Judgment (Re: Shares in San Miguel Corporation
Registered in the Respective Names of Defendants Eduardo M.
Cojuangco, Jr. and the defendant Cojuangco Companies), the Court
already rejected plaintiffs reference to said laws. In fact, the Court
declined to grant plaintiffs motion for partial summary judgment
because it simply contended that defendant Cojuangcos statements in
his pleadings, which plaintiff again offered in evidence herein,
regarding the presentation of a possible CIIF witness as well as UCPB
records can already be considered admissions of defendants exclusive
use and misuse of coconut levy funds. In the said resolution, the
Court already reminded plaintiff that the issues cannot be resolved by
plaintiffs interpretation of defendant Cojuangcos statements in his
brief. Thus, the substantial portion of the Resolution of the Court

denying plaintiffs motion for partial summary judgment is again

quoted for emphasis: [99]
We cannot agree with the plaintiffs contention that the
defendants statements in his Pre-Trial Brief regarding the
presentation of a possible CIIF witness as well as UCPB
records, can already be considered as admissions of the
defendants exclusive use and misuse of coconut levy funds to
acquire the subject SMC shares and defendant Cojuangcos
alleged taking advantage of his positions to acquire the
subject SMC shares. Moreover, in ruling on a motion for
summary judgment, the court should take that view of the
evidence most favorable to the party against whom it is
directed, giving such party the benefit of all favorable
inferences. Inasmuch as this issue cannot be resolved
merely from an interpretation of the defendants statements
in his brief, the UCPB records must be produced and the
CIIF witness must be heard to ensure that the conclusions
that will be derived have factual basis and are thus,
valid. [100]
WHEREFORE, in view of the foregoing, the Motion for
Partial Summary Judgment dated July 11, 2003 is hereby
DENIED for lack of merit.
SO ORDERED.
(Emphasis supplied)
Even assuming that, as plaintiff prayed for, the Court takes
judicial notice of the evidence it offered with respect to the Cojuangco
block of SMC shares of stock, as contained in plaintiffs manifestation
of purposes, still its evidence do not suffice to prove the material
allegations in the complaint that Cojuangco took advantage of his
positions in UCPB and PCA in order to acquire the said shares. As
above-quoted, the Court, itself, has already ruled, and hereby stress
that UCPB records must be produced and the CIIF witness must be
heard to ensure that the conclusions that will be derived have factual
basis and are thus, valid. Besides, the Court found that there are
genuine factual issues raised by defendants that need to be threshed
out in a full-blown trial, and which plaintiff had the burden to
substantially prove. Thus, the Court outlined these genuine factual
issues as follows:
1) What are the various sources of funds, which
defendant Cojuangco and his companies claim they
utilized to acquire the disputed SMC shares?
2) Whether or not such funds acquired from alleged
various sources can be considered coconut levy
funds;

3) Whether or not defendant Cojuangco had indeed

served in the governing bodies of PCA, UCPB
and/or CIIF Oil Mills at the time the funds used to
purchase the SMC shares were obtained such that
he owed a fiduciary duty to render an account to
these entities as well as to the coconut farmers;
4) Whether or not defendant Cojuangco took
advantage of his position and/or close ties with then
President Marcos to obtain favorable concessions
or exemptions from the usual financial
requirements from the lending banks and/or cocolevy funded companies, in order to raise the funds
to acquire the disputed SMC shares; and if so,
what are these favorable concessions or
exemptions?[101]
Answers to these issues are not evident from the
submissions of plaintiff and must therefore be proven
through the presentation of relevant and competent evidence
during trial. A perusal of the subject Motion shows that the
plaintiff hastily derived conclusions from the defendants
statements in their previous pleadings although such
conclusions were not supported by categorical facts but
only
mere
inferences. xxx
xxx xxx.
(Emphasis
supplied) [102]
Despite the foregoing pronouncement of the Court, plaintiff did not
present any other evidence during the trial of this case but instead made its
manifestation of purposes, that later served as its offer of evidence in the
instant case, that merely used the same evidence it had already relied upon
when it moved for partial summary judgment over the Cojuangco block of
SMC shares. Altogether, the Court finds the same insufficient to prove
plaintiffs allegations in the complaint because more than judicial notices,
the factual issues require the presentation of admissible, competent and
relevant evidence in accordance with Sections 3 and 4, Rule 128 of the
Rules on Evidence.
Moreover, the propriety of taking judicial notice of plaintiffs
exhibits is aptly questioned by defendants Cojuangco, et al. Certainly, the
Court can take judicial notice of laws pertaining to the coconut levy funds
as well as decisions of the Supreme Court relative thereto, but taking
judicial notice does not mean that the Court would accord full probative
value to these exhibits. Judicial notice is based upon convenience and
expediency for it would certainly be superfluous, inconvenient, and
expensive both to parties and the court to require proof, in the ordinary
way, of facts which are already known to courts. However, a court
cannot take judicial notice of a factual matter in
controversy. Certainly, there are genuine factual matters in the
instant case, as above-cited, which plaintiff ought to have proven with
relevant and competent evidence other than the exhibits it offered.

Referring to plaintiffs causes of action against defendants

Cojuangco, et al., the Court finds its evidence insufficient to prove that
the source of funds used to purchase SMC shares indeed came from
coconut levy funds. In fact, there is no direct link that the loans obtained
by defendant Cojuangco, Jr. were the same money used to pay for the
SMC shares. The scheme alleged to have been taken by defendant
Cojuangco, Jr. was not even established by any paper trail or testimonial
evidence that would have identified the same. On account of his positions
in the UCPB, PCA and the CIIF Oil Mills, the Court cannot conclude that
he violated the fiduciary obligations of the positions he held in the absence
of proof that he was so actuated and that he abused his positions. [103]

It was plain, indeed, that Cojuangco, et al. had tendered genuine issues through their
responsive pleadings and did not admit that the acquisition of the Cojuangco block of SMC
shares had been illegal, or had been made with public funds. As a result, the Republic needed
to establish its allegations with preponderant competent evidence, because, as earlier stated,
the fact that property was ill gotten could not be presumed but must be substantiated with
competent proof adduced in proper judicial proceedings. That the Republic opted not to
adduce competent evidence thereon despite stern reminders and warnings from the
Sandiganbayan to do so revealed that the Republic did not have the competent evidence to
prove its allegations against Cojuangco, et al.
Still, the Republic, relying on the 2001 holding
COCOFED,[104] pleads in its petition for review (G.R. No. 180702) that:

in Republic

v.

With all due respect, the Honorable Sandiganbayan failed to consider

legal
precepts
and
procedural
principles
vis--vis the records of the case showing that the funds or various loans
or advances used in the acquisition of the disputed SMC Shares
ultimately came from the coconut levy funds.
As discussed hereunder, respondents own admissions in their
Answers and Pre-Trial Briefs confirm that the various sources of funds
utilized in the acquisition of the disputed SMC shares came from
borrowings and advances from the UCPB and the CIIF Oil Mills.[105]
Thereby, the Republic would have the Sandiganbayan pronounce the block of SMC
shares of stock acquired by Cojuangco, et al. as ill-gotten wealth even without the Republic
first presenting preponderant evidence establishing that such block had been acquired illegally
and with the use of coconut levy funds.
The Court cannot heed the Republics pleas for the following reasons:
To begin with, it is notable that the decision of November 28, 2007 did not rule on
whether coconut levy funds were public funds or not. The silence of the Sandiganbayan on the
matter was probably due to its not seeing the need for such ruling following its conclusion that
the Republic had not preponderantly established the source of the funds used to pay the
purchase price of the concerned SMC shares, and whether the shares had been acquired with
the use of coconut levy funds.

Secondly, the ruling in Republic v. COCOFED[106] determined only whether certain

stockholders of the UCPB could vote in the stockholders meeting that had been called. The
issue now before the Court could not be controlled by the ruling in Republic v.
COCOFED, however, for even as that ruling determined the issue of voting, the Court was
forthright enough about not thereby preempting the Sandiganbayans decisions on the
merits on ill-gotten wealth in the several cases then pending, including this one, viz:

In making this ruling, we are in no way preempting the proceedings

the Sandiganbayan may conduct or the final judgment it may promulgate
in Civil Case No. 0033-A, 0033-B and 0033-F. Our determination here is
merely prima facie, and should not bar the anti-graft court from making a
final ruling, after proper trial and hearing, on the issues and prayers in the
said civil cases, particularly in reference to the ownership of the subject
shares.
We also lay down the caveat that, in declaring the coco levy
funds to be prima facie public in character, we are not ruling in any
final manner on their classification whether they are general or
trust or special funds since such classification is not at issue
here. Suffice it to say that the public nature of the coco levy funds is
decreed by the Court only for the purpose of determining the right to
vote the shares, pending the final outcome of the said civil cases.
Neither are we resolving in the present case the question of
whether the shares held by Respondent Cojuangco are, as he claims,
the result of private enterprise. This factual matter should also be
taken up in the final decision in the cited cases that are pending in the
court a quo. Again, suffice it to say that the only issue settled here is
the right of PCGG to vote the sequestered shares, pending the final
outcome of said cases.

borrowings and advances had been illegal because the shares had not been purchased for the
benefit of the Coconut Farmers. To buttress its assertion, the Republic relied on the
admissions supposedly made in paragraph 2.01 of Cojuangcos Answer in relation to
paragraph 4 of the Republics Amended Complaint.
The best way to know what paragraph 2.01 of Cojuangcos Answer admitted is to
refer to both paragraph 4 of the Amended Complaint and paragraph 2.01 of
his Answer,which are hereunder quoted:
Paragraph 4 of the Amended Complaint

4. Defendant EDUARDO M. COJUANGCO, JR., was Governor of

Tarlac, Congressman of then First District of Tarlac and Ambassador-atLarge in the Marcos Administration. He was commissioned Lieutenant
Colonel in the Philippine Air Force, Reserve. Defendant Eduardo M.
Cojuangco, Jr., otherwise known as the Coconut King was head of the
coconut monopoly which was instituted by Defendant Ferdinand E.
Marcos, by virtue of the Presidential Decrees. Defendant Eduardo E.
Cojuangco, Jr., who was also one of the closest associates of the
Defendant Ferdinand E. Marcos, held the positions of Director of the
Philippine Coconut Authority, the United Coconut Mills, Inc., President
and Board Director of the United Coconut Planters Bank, United Coconut
Planters Life Assurance Corporation, and United Coconut Chemicals, Inc.
He was also the Chairman of the Board and Chief Executive Officer and
the controlling stockholder of the San Miguel Corporation. He may be
served summons at 45 Balete Drive, Quezon City or at 136 East
9th Street, Quezon City.
Paragraph 2.01 of Respondent Cojuangcos Answer
2.01. Herein defendant admits paragraph 4 only insofar as it alleges
the following:

Thirdly, the Republics assertion that coconut levy funds had been used to source the
payment for the Cojuangco block of SMC shares was premised on its allegation that the UCPB
and the CIIF Oil Mills were public corporations. But the premise was grossly erroneous and
overly presumptuous, because:
(a) The fact of the UCPB and the CIIF Oil Mills being public corporations
or government-owned or government-controlled corporations
precisely remainedcontroverted by Cojuangco, et al. in light of the
lack of any competent to that effect being in the records;
(b) Cojuangco explicitly averred in paragraph 2.01.(b) of his Answer that
the UCPB was a private corporation; and
(c) The Republic did not competently identify or establish which ones of
the Cojuangco corporations had supposedly received advances from
the CIIF Oil Mills.
Fourthly, the Republic asserts that the contested block of shares had been paid for with
borrowings from the UCPB and advances from the CIIF Oil Mills, and that such

(a) That herein defendant has held the following

positions in government: Governor of Tarlac, Congressman of
the then First District of Tarlac, Ambassador-at-Large,
Lieutenant Colonel in the Philippine Air Force and Director of
the Philippines Coconut Authority;
(b) That he held the following positions in private
corporations: Member of the Board of Directors of the United
Coconut Oil Mills, Inc.; President and member of the Board
of Directors of the United Coconut Planters Bank, United
Coconut Planters Life Assurance Corporation, and United
Coconut Chemicals, Inc.; Chairman of the Board and Chief
Executive of San Miguel Corporation; and
(c) That he may be served with summons at 136 East
9th Street, Quezon City.

Herein defendant specifically denies the rest of the allegations of

paragraph 4, including any insinuation that whatever association he may
have had with the late Ferdinand Marcos or Imelda Marcos has been in
connection with any of the acts or transactions alleged in the complaint or
for any unlawful purpose.

It is basic in remedial law that a defendant in a civil case must apprise the trial court
and the adverse party of the facts alleged by the complaint that he admits and of the facts
alleged by the complaint that he wishes to place into contention. The defendant does the
former either by stating in his answer that they are true or by failing to properly deny them.
There are two ways of denying alleged facts: one is by general denial, and the other, by
specific denial.[107]
In this jurisdiction, only a specific denial shall be sufficient to place into contention
an alleged fact.[108] Under Section 10,[109] Rule 8 of the Rules of Court, a specific denial of an
allegation of the complaint may be made in any of three ways, namely: (a) a defendant
specifies each material allegation of fact the truth of which he does not admit and, whenever
practicable, sets forth the substance of the matters upon which he relies to support his denial;
(b) a defendant who desires to deny only a part of an averment specifies so much of it as is
true and material and denies only the remainder; and (c) a defendant who is without
knowledge or information sufficient to form a belief as to the truth of a material averment
made in the complaint states so, which has the effect of a denial.
The
express
qualifications
contained
in
paragraph
2.01
of
Cojuangcos Answer constituted efficient specific denials of the averments of paragraph 2 of
the RepublicsAmended Complaint under the first method mentioned in Section 10 of Rule
8, supra. Indeed, the aforequoted paragraphs of the Amended Complaint and of
Cojuangcos Answerindicate that Cojuangco thereby expressly qualified his admission of
having been the President and a Director of the UCPB with the averment that the UCPB was a
private corporation; that his Answers allegation of his being a member of the Board of
Directors of the United Coconut Oil Mills, Inc. did not admit that he was a member of the
Board of Directors of the CIIF Oil Mills, because the United Coconut Oil Mills, Inc. was not
one of the CIIF Oil Mills; and that his Answer nowhere contained any admission or statement
that he had held the various positions in the government or in the private corporations at the
same time and in 1983, the time when the contested acquisition of the SMC shares of stock
took place.
What the Court stated in Bitong v. Court of Appeals (Fifth Division)[110] as to
admissions is illuminating:
When taken in its totality, the Amended Answer to the Amended
Petition, or even the Answer to the Amended Petition alone, clearly raises
an issue as to the legal personality of petitioner to file the
complaint. Every alleged admission is taken as an entirety of the fact
which makes for the one side with the qualifications which limit,
modify or destroy its effect on the other side. The reason for this is,
where part of a statement of a party is used against him as an admission,
the court should weigh any other portion connected with the statement,
which tends to neutralize or explain the portion which is against interest.

In other words, while the admission is admissible in evidence, its

probative value is to be determined from the whole statement and
others intimately related or connected therewith as an integrated
unit. Although acts or facts admitted do not require proof and cannot be
contradicted, however, evidence aliunde can be presented to show that the
admission was made through palpable mistake. The rule is always in
favor of liberality in construction of pleadings so that the real matter
in dispute may be submitted to the judgment of the court.

And, lastly, the Republic cites the following portions of the joint Pre-Trial Brief of
Cojuangco, et al.,[111] to wit:
IV.
PROPOSED EVIDENCE
xxx
4.01. xxx Assuming, however, that plaintiff presents evidence to
support its principal contentions, defendants evidence in rebuttal would
include testimonial and documentary evidence showing: a) the ownership
of the shares of stock prior to their acquisition by respondents (listed in
Annexes A and B); b) the consideration for the acquisition of the
shares of stock by the persons or companies in whose names the shares of
stock are now registered; and c) the source of the funds used to pay the
purchase price.
4.02. Herein respondents intend to present the following
evidence:
xxx
b. Proposed Exhibits ____, ____, ____
Records of the United Coconut Planters Bank which would show
borrowings of the companies listed in Annexes A and B, or
companies affiliated or associated with them, which were used to
source payment of the shares of stock of the San Miguel Corporation
subject of this case.
4.03. Witnesses.
xxx
(b) A representative of the United Coconut Planters Bank who
will testify in regard the loans which were used to source the payment
of the price of SMC shares of stock.
(c) A representative from the CIIF Oil Mills who will testify in
regard the loans or credit advances which were used to source the
payment of the purchase price of the SMC shares of stock.

The Republic insists that the aforequoted portions of the joint Pre-Trial Brief were
Cojuangco, et al.s admission that:
(a) Cojuangco had received money from the UCPB, a bank entrusted by
law with the administration of the coconut levy funds; and

(b) Cojuangco had received more money from the CIIF Oil Mills in which
part of the CIIF funds had been placed, and thereby used the funds of
the UCPB and the CIIF as capital to buy his SMC shares.[112]

3.00. Based on the complaint and the answer, the acquisition of the
San Miguel shares by, and their registration in the names of, the
companies listed in Annexes A and B may be deemed undisputed.
3.01. All other allegations in the complaint are disputed.[115]

We disagree with the Republics posture.

The statements found in the joint Pre-Trial Brief of Cojuangco, et al. were
noticeably written beneath the heading of Proposed Evidence. Such location indicated that the
statements were only being proposed, that is, they were not yet intended or offered as
admission of any fact stated therein. In other words, the matters stated or set forth therein
might or might not be presented at all. Also, the text and tenor of the statements expressly
conditioned the proposal on the Republic ultimately presenting its evidence in the action. After
the Republic opted not to present its evidence, the condition did not transpire; hence, the
proposed admissions, assuming that they were that, did not materialize.
Obviously, too, the statements found under the heading of Proposed Evidence in the
joint Pre-Trial Brief were incomplete and inadequate on the important details of
thesupposed transactions (i.e., alleged borrowings and advances). As such, they could not
constitute admissions that the funds had come from borrowings by Cojuangco, et al. from the
UCPB or had been credit advances from the CIIF Oil Companies. Moreover, the purpose for
presenting the records of the UCPB and the representatives of the UCPB and of the still
unidentified or unnamed CIIF Oil Mills as declared in the joint Pre-Trial Brief did not at all
show whether the UCPB and/or the unidentified or unnamed CIIF Oil Mills were
the only sources of funding, or that such institutions, assuming them to be the sources of the
funding, had been the only sources of funding. Such ambiguousness disqualified the
statements from being relied upon as admissions. It is fundamental that any statement, to be
considered as an admission for purposes of judicial proceedings, should
bedefinite, certain and unequivocal;[113] otherwise, the disputed fact will not get settled.
Another reason for rejecting the Republics posture is that the Sandiganbayan, as the
trial court, was in no position to second-guess what the non-presented records of the
UCPB would show as the borrowings made by the corporations listed in Annexes A and B, or
by the companies affiliated or associated with them, that were used to source payment of the
shares of stock of the San Miguel Corporation subject of this case, or what the representative
of the UCPB or the representative of the CIIF Oil Mills would testify about loans or credit
advances used to source the payment of the price of SMC shares of stock.
Lastly, the Rules of Court has no rule that treats the statements found under the
heading Proposed Evidence as admissions binding Cojuangco, et al. On the contrary, theRules
of Court has even distinguished between admitted facts and facts proposed to be
admitted during the stage of pre-trial. Section 6 (b),[114] Rule 18 of the Rules of Court,requires
a Pre-Trial Brief to include a summary of admitted facts and a proposed stipulation of
facts. Complying with the requirement, the joint Pre-Trial Brief of Cojuangco, et al. included
the summary of admitted facts in its paragraph 3.00 of its Item III, separately and distinctly
from the Proposed Evidence, to wit:
III.
SUMMARY OF UNDISPUTED FACTS

The burden of proof, according to Section 1, Rule 131 of the Rules of Court, is the
duty of a party to present evidence on the facts in issue necessary to establish his claim or
defense by the amount of evidence required by law. Here, the Republic, being the plaintiff,
was the party that carried the burden of proof. That burden required it to demonstrate through
competent evidence that the respondents, as defendants, had purchased the SMC shares of
stock with the use of public funds; and that the affected shares of stock constituted ill-gotten
wealth. The Republic was well apprised of its burden of proof, first through the joinder of
issues made by the responsive pleadings of the defendants, including Cojuangco, et al. The
Republic was further reminded through the pre-trial order and the Resolution denying
its Motion for Summary Judgment, supra, of the duty to prove the factual allegations on illgotten wealth against Cojuangco, et al., specifically the following disputed matters:
(a) When the loans or advances were incurred;
(b) The amount of the loans from the UCPB and of the credit advances
from the CIIF Oil Mills, including the specific CIIF Oil Mills
involved;
(c) The identities of the borrowers, that is, all of the respondent
corporations together, or separately; and the amounts of the
borrowings;
(d) The conditions attendant to the loans or advances, if any;
(e) The manner, form, and time of the payments made to Zobel or to the
Ayala Group, whether by check, letter of credit, or some other form;
and
(f) Whether the loans were paid, and whether the advances were
liquidated.
With the Republic nonetheless choosing not to adduce evidence proving the factual
allegations, particularly the aforementioned matters, and instead opting to pursue its claims
by Motion for Summary Judgment, the Sandiganbayan became completely deprived of the
means to know the necessary but crucial details of the transactions on the acquisition of the
contested block of shares. The Republics failure to adduce evidence shifted no burden to the
respondents to establish anything, for it was basic that the partywho asserts, not the party who
denies, must prove.[116] Indeed, in a civil action, the plaintiff has the burden of pleading every
essential fact and element of the cause of action and proving them by preponderance of
evidence. This means that if the defendant merely denies each of the plaintiffs allegations and
neither side produces evidence on any such element, the plaintiff must necessarily fail in the
action.[117] Thus, the Sandiganbayan correctly dismissed Civil Case No. 0033-F for failure of
the Republic to prove its case by preponderant evidence.
A summary judgment under Rule 35 of the Rules of Court is a procedural technique
that is proper only when there is no genuine issue as to the existence of a material fact and the

moving party is entitled to a judgment as a matter of law. [118] It is a method intended to

expedite or promptly dispose of cases where the facts appear undisputed andcertain from the
pleadings, depositions, admissions, and affidavits on record.[119] Upon a motion for summary
judgment the courts sole function is to determine whether there is an issue of fact to be tried,
and all doubts as to the existence of an issue of fact must be resolved against the moving
party. In other words, a party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, and any doubt as to the
existence of such an issue is resolved against the movant. Thus, in ruling on a motion for
summary judgment, the court should take that view of the evidence most favorable to the party
against whom it is directed, giving that party the benefit of all favorable inferences. [120]
The term genuine issue has been defined as an issue of fact that calls for the
presentation of evidence as distinguished from an issue that is sham, fictitious, contrived, set
up in bad faith, and patently unsubstantial so as not to constitute a genuine issue for trial. The
court can determine this on the basis of the pleadings, admissions, documents, affidavits, and
counter-affidavits submitted by the parties to the court. Where the facts pleaded by the parties
are disputed or contested, proceedings for a summary judgment cannot take the place of a
trial.[121] Well-settled is the rule that a party who moves for summary judgment has the burden
of demonstrating clearly the absence of any genuine issue of fact. [122] Upon that partys
shoulders rests the burden to prove the cause of action, and to show that the defense is
interposed solely for the purpose of delay. After the burden has been discharged, the defendant
has the burden to show facts sufficient to entitle him to defend. [123] Any doubt as to the
propriety of a summary judgment shall be resolved against the moving party.

The Republics lack of proof on the source of the funds by which Cojuangco, et al. had
acquired their block of SMC shares has made it shift its position, that it now suggests that
Cojuangco had been enabled to obtain the loans by the issuance of LOI 926 exempting the
UCPB from the DOSRI and the Single Borrowers Limit restrictions.
We reject the Republics suggestion.
Firstly, as earlier pointed out, the Republic adduced no evidence on the significant
particulars of the supposed loan, like the amount, the actual borrower, the approving
official, etc. It did not also establish whether or not the loans were DOSRI[126] or issued in
violation of the Single Borrowers Limit. Secondly, the Republic could not outrightly assume
that President Marcos had issued LOI 926 for the purpose of allowing the loans by the UCPB
in favor of Cojuangco. There must be competent evidence to that effect. And, finally, the
loans, assuming that they were of a DOSRI nature or without the benefit of the required
approvals or in excess of the Single Borrowers Limit, would not be void for that reason.
Instead, the bank or the officers responsible for the approval and grant of the DOSRI loan
would be subject only to sanctions under the law.[127]
VI.
Cojuangco violated no fiduciary duties
The Republic invokes the following pertinent statutory provisions of the Civil Code,
to wit:

We need not stress that the trial courts have limited authority to render summary
judgments and may do so only in cases where no genuine issue as to any material fact clearly
exists between the parties. The rule on summary judgment does not invest the trial courts with
jurisdiction to try summarily the factual issues upon affidavits, but authorizes summary
judgment only when it appears clear that there is no genuine issue as to any material fact. [124]

Article 1455. When any trustee, guardian or other person holding

a fiduciary relationship uses trust funds for the purchase of property and
causes the conveyance to be made to him or to a third person, a trust is
established by operation of law in favor of the person to whom the funds
belong.

IV.
Republics burden to establish by preponderance of evidence that
respondents SMC shares had been illegally acquired with coconutlevy funds was not discharged

Article 1456. If property is acquired through mistake or fraud, the

person obtaining it s by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes.
and the Corporation Code, as follows:

Madame Justice Carpio Morales argues in her dissent that although the contested
SMC shares could be inescapably treated as fruits of funds that are prima facie public in
character, Cojuangco, et al. abstained from presenting countervailing evidence; and that with
the Republic having shown that the SMC shares came into fruition from coco levy funds that
are prima facie public funds, Cojuangco, et al. had to go forward with contradicting evidence,
but did not.
The Court disagrees. We cannot reverse the decision of November 28, 2007 on the basis
alone of judicial pronouncements to the effect that the coconut levy funds wereprima
facie public funds,[125] but without any competent evidence linking the acquisition of the block
of SMC shares by Cojuangco, et al. to the coconut levy funds.
V.
No violation of the DOSRI and
Single Borrowers Limit restrictions

Section 31. Liability of directors, trustees or officers.Directors or

trustees who willfully and knowingly vote for or assent to patently
unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any personal
or pecuniary interest in conflict with their duty as such directors, or
trustees shall be liable jointly and severally for all damages resulting
therefrom suffered by the corporation, its stockholders or members and
other persons.
When a director, trustee or officer attempts to acquire or acquires, in
violation of his duty, any interest adverse to the corporation in respect of
any matter which has been reposed in him in confidence, as to which
equity imposes a disability upon him to deal in his own behalf, he shall be
liable as a trustee for the corporation and must account for the profits
which otherwise would have accrued to the corporation.

Did Cojuangco breach his fiduciary duties as an officer and member of the Board of
Directors of the UCPB? Did his acquisition and holding of the contested SMC shares come
under a constructive trust in favor of the Republic?
The answers to these queries are in the negative.
The conditions for the application of Articles 1455 and 1456 of the Civil Code (like
the trustee using trust funds to purchase, or a person acquiring property through mistake or
fraud), and Section 31 of the Corporation Code (like a director or trustee willfully and
knowingly voting for or assenting to patently unlawful acts of the corporation, among others)
require factual foundations to be first laid out in appropriate judicial proceedings. Hence,
concluding that Cojuangco breached fiduciary duties as an officer and member of the Board of
Directors of the UCPB without competent evidence thereon would be unwarranted and
unreasonable.
Thus, the Sandiganbayan could not fairly find that Cojuangco had committed breach
of any fiduciary duties as an officer and member of the Board of Directors of the UCPB. For
one, the Amended Complaint contained no clear factual allegation on which to predicate the
application of Articles 1455 and 1456 of the Civil Code, and Section 31 of the Corporation
Code. Although the trust relationship supposedly arose from Cojuangcos being an officer and
member of the Board of Directors of the UCPB, the linkbetween this alleged fact and the
borrowings or advances was not established. Nor was there evidence on the loans or
borrowings, their amounts, the approving authority, etc. As trial court, the Sandiganbayan
could not presume his breach of fiduciary duties without evidence showing so, for fraud or
breach of trust is never presumed, but must be allegedand proved.[128]
The thrust of the Republic that the funds were borrowed or lent might even preclude
any consequent trust implication. In a contract of loan, one of the parties (creditor) delivers
money or other consumable thing to another (debtor) on the condition that the same amount of
the same kind and quality shall be paid.[129] Owing to the consumable nature of the thing
loaned, the resulting duty of the borrower in a contract of loan is to pay, not to return, to the
creditor or lender the very thing loaned. This explains why the ownership of the thing loaned
is transferred to the debtor upon perfection of the contract.[130] Ownership of the thing loaned
having transferred, the debtor enjoys all the rights conferred to an owner of property, including
the right to use and enjoy (jus utendi), to consume the thing by its use (jus abutendi), and to
dispose (jus disponendi), subject to such limitations as may be provided by law. [131] Evidently,
the resulting relationship between a creditor and debtor in a contract of loan cannot be
characterized as fiduciary.[132]
To say that a relationship is fiduciary when existing laws do not provide for such
requires evidence that confidence is reposed by one party in another who exercises dominion
and influence. Absent any special facts and circumstances proving a higher degree of
responsibility, any dealings between a lender and borrower are not fiduciary in nature. [133] This
explains why, for example, a trust receipt transaction is not classified as a simple loan and is
characterized as fiduciary, because the Trust Receipts Law (P.D. No. 115) punishes the
dishonesty and abuse of confidence in the handling of money or goods to the prejudice of
another regardless of whether the latter is the owner.[134]
Based on the foregoing, a debtor can appropriate the thing loaned without any
responsibility or duty to his creditor to return the very thing that was loaned or to report how
the proceeds were used. Nor can he be compelled to return the proceeds and fruits of the loan,
for there is nothing under our laws that compel a debtor in a contract of loan to do so. As

owner, the debtor can dispose of the thing borrowed and his act will not be considered
misappropriation of the thing.[135] The only liability on his part is to pay the loan together with
the interest that is either stipulated or provided under existing laws.
WHEREFORE, the Court dismisses the petitions for certiorari in G.R. Nos.
166859 and 169023; denies the petition for review on certiorari in G.R. No. 180702; and,
accordingly, affirms the decision promulgated by the Sandiganbayan on November 28, 2007
in Civil Case No. 0033-F.
The Court declares that the block of shares in San Miguel Corporation in the names
of respondents Cojuangco, et al. subject of Civil Case No. 0033-F is the exclusive property of
Cojuangco, et al. as registered owners.
Accordingly, the lifting and setting aside of the Writs of Sequestration affecting said
block of shares (namely: Writ of Sequestration No. 86-0062 dated April 21, 1986; Writ of
Sequestration No. 86-0069 dated April 22, 1986; Writ of Sequestration No. 86-0085 dated
May 9, 1986; Writ of Sequestration No. 86-0095 dated May 16, 1986; Writ of Sequestration
No. 86-0096 dated May 16, 1986; Writ of Sequestration No. 86-0097 dated May 16, 1986;
Writ of Sequestration No. 86-0098 dated May 16, 1986; Writ of Sequestration No. 86-0042
dated April 8, 1986; and Writ of Sequestration No. 87-0218 dated May 27, 1987) are affirmed;
and the annotation of the conditions prescribed in the Resolutions promulgated on October 8,
2003 and June 24, 2005 is cancelled.
SO ORDERED.

reconstitution and damages. The case is one of several suits involving ill-gotten or
unexplained wealth that petitioner Republic, through the PCGG, filed with the
Sandiganbayan against private respondent Roberto S. Benedicto and others pursuant
to Executive Order (EO) No. 14,[3] series of 1986.

Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES represented by
the PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT (PCGG),
Petitioner,

- versus -

SANDIGANBAYAN (SECOND DIVISION)

ROBERTO S. BENEDICTO,
Respondents.

and

Pursuant to its mandate under EO No. 1,[4] series of 1986, the PCGG issued
G.R. No. 129406
writs placing under sequestration all business enterprises, entities and other
properties, real and personal, owned or registered in the name of private respondent
Present:
Benedicto, or of corporations in which he appeared to have controlling or majority
interest. Among the properties thus sequestered and taken over by PCGG fiscal
PUNO, J., Chairperson,agents were the 227 shares in NOGCCI owned by private respondentBenedicto and
SANDOVAL-GUTIERREZ,
registered in his name or under the names of corporations he owned or controlled.
CORONA,
AZCUNA, and
Following the sequestration process, PCGG representatives sat as members of
GARCIA, JJ.
the Board of Directors of NOGCCI, which passed, sometime in October 1986, a
resolution effecting a corporate policy change. The change consisted of assessing
a monthly membership due of P150.00 for each NOGCCI share. Prior to this
resolution, an investor purchasing more than one NOGCCI share was exempt from
Promulgated:
paying monthly membership due for the second and subsequent shares that he/she
owned.
March 6, 2006

Subsequently, on March 29, 1987, the NOGCCI Board passed another

resolution, this time increasing the monthly membership due from P150.00 toP250.00
for each share.
As sequestrator of the 227 shares of stock in question, PCGG did not pay the
corresponding monthly membership due thereon totaling P2,959,471.00. On account
thereof, the 227 sequestered shares were declared delinquent to be disposed of in an
auction sale.

x-------------------------- --------------x
DECISION
GARCIA, J.:
Before the Court is this petition for certiorari under Rule 65 of the Rules of
Court to nullify and set aside the March 28, 1995[1] and March 13, 1997[2]Resolutions
of the Sandiganbayan, Second Division, in Civil Case No. 0034, insofar as said
resolutions ordered the Presidential Commission on Good Government (PCGG) to pay
private respondent Roberto S. Benedicto or his corporations the value of 227 shares
of stock of the Negros Occidental Golf and Country Club, Inc. (NOGCCI)
at P150,000.00 per share, registered in the name of said private respondent or his
corporations.
The facts:

Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S.
Benedicto, et al., defendants, is a complaint for reconveyance, reversion, accounting,

Apprised of the above development and evidently to prevent the projected

auction sale of the same shares, PCGG filed a complaint for injunction with the
Regional Trial Court (RTC) of Bacolod City, thereat docketed as Civil Case No. 5348.
The complaint, however, was dismissed, paving the way for the auction sale for the
delinquent 227 shares of stock. On August 5, 1989, an auction sale was conducted.
On November
3,
1990, petitioner Republic and
private
respondent Benedicto entered into a Compromise Agreement in Civil Case No.
0034.
The
agreement
contained
a
general
release
clause[5] whereunder petitioner Republic agreed and bound itself to lift the
sequestration on the 227 NOGCCI shares, among other Benedictos
properties, petitioner Republic acknowledging
that
it
was
within
private
respondent Benedictos capacity to acquire the same shares out of his income from
business and the exercise of his profession.[6] Implied in this undertaking is the
recognition by petitioner Republic that the subject shares of stock could not have
been ill-gotten.

In a decision dated October 2, 1992, the Sandiganbayan approved the

Compromise Agreement and accordingly rendered judgment in accordance with its
terms.

Good Government is hereby given a final extension of fifteen (15) days

from receipt hereof within which to comply with the Order of December
6, 1994 as stated hereinabove.

In the process of implementing the Compromise Agreement, either of the

parties would, from time to time, move for a ruling by the Sandiganbayan on the
proper manner of implementing or interpreting a specific provision therein.

On April 1, 1996, PCGG filed a Manifestation with Motion for

Reconsideration,[10] praying for the setting aside of the Resolution of February 23,
1996. OnApril 11, 1996, private respondent Benedicto filed a Motion to Enforce
Judgment Levy. Resolving these two motions, the Sandiganbayan, in its second

On February 22, 1994, Benedicto filed in Civil Case No. 0034 a Motion for

Release
from
Sequestration
Shares/Dividendspraying, inter alia,

and

Return

of

Sequestered

that his NOGCCI shares of stock

be specifically released from sequestration and returned, delivered or paid to him
as part of the parties Compromise Agreement in that case. In a
Resolution[7] promulgated on December 6, 1994, the Sandiganbayan granted
Benedictos aforementioned motion but placed the subject shares under the custody
of its Clerk of Court, thus:
WHEREFORE, in the light of the foregoing, the said
Motion for Release From Sequestration and Return of
Sequestered Shares/Dividends is hereby GRANTED and it is
directed that said shares/dividends be delivered/placed under
the
custody
of
the
Clerk
of
Court,
Sandiganbayan, Manila subject to this Courts disposition.
On March 28, 1995, the Sandiganbayan came out with the herein first
assailed Resolution,[8] which
clarified
its
aforementioned December
6,
1994Resolution and directed the immediate implementation thereof by requiring
PCGG, among other things:
(b)

To deliver to the Clerk of Court the 227 sequestered shares of

[NOGCCI] registered in the name of nominees of ROBERTO S.
BENEDICTO free from all liens and encumbrances, or in default
thereof, to pay their value at P150,000.00 per share which can
be deducted from [the Republics] cash share in the
Compromise Agreement. [Words in bracket added] (Emphasis
Supplied).

Owing to PCGGs failure to comply with the above directive, Benedicto filed
in Civil Case No. 0034 a Motion for Compliance dated July 25, 1995, followed by
an Ex-Parte Motion for Early Resolution dated February 12, 1996. Acting thereon, the
Sandiganbayan promulgated yet another Resolution[9] on February 23, 1996,
dispositively reading:
WHEREFORE, finding merit in the instant motion for early
resolution and considering that, indeed, the PCGG has not shown any
justifiable ground as to why it has not complied with its obligation as set
forth in the Order of December 6, 1994 up to this date and which Order
was issued pursuant to the Compromise Agreement and has already
become final and executory, accordingly, the Presidential Commission on

assailed Resolution[11] dated March 13, 1997, denied that portion of the
PCGGs Manifestation with Motion for Reconsideration concerning the subject 227
NOGCCI shares and granted Benedictos Motion to Enforce Judgment Levy.
Hence, the Republics present recourse on the sole issue of whether or not the
public respondent Sandiganbayan, Second Division, gravely abused its discretion in
holding that the PCGG is at fault for not paying the membership dues on the 227
sequestered NOGCCI shares of stock, a failing which eventually led to the foreclosure
sale thereof.
The petition lacks merit.
To begin with, PCGG itself does not dispute its being considered as a receiver
insofar as the sequestered 227 NOGCCI shares of stock are concerned. [12]PCGG also
acknowledges that as such receiver, one of its functions is to pay outstanding debts
pertaining to the sequestered entity or property,[13] in this case the 227 NOGCCI
shares in question. It contends, however, that membership dues owing to a golf club
cannot be considered as an outstanding debt for which PCGG, as receiver, must pay.
It also claims to have exercised due diligence to prevent the loss through delinquency
sale of the subject NOGCCI shares, specifically inviting attention to the injunctive
suit, i.e., Civil Case No. 5348, it filed before the RTC of Bacolod City to enjoin the
foreclosure sale of the shares.

The filing of the injunction complaint adverted to, without more, cannot
plausibly tilt the balance in favor of PCGG. To the mind of the Court, such filing is a
case of acting too little and too late. It cannot be over-emphasized that it behooved
the PCGGs fiscal agents to preserve, like a responsible father of the family, the value
of the shares of stock under their administration. But far from acting as such father,
what the fiscal agents did under the premises was to allow the element of
delinquency to set in before acting by embarking on a tedious process of going to
court after the auction sale had been announced and scheduled.
The PCGGs posture that to the owner of the sequestered shares rests the
burden of paying the membership dues is untenable. For one, it lost sight of the
reality that such dues are basically obligations attached to the shares, which, in the
final analysis, shall be made liable, thru delinquency sale in case of default in
payment of the dues. For another, the PCGG as sequestrator-receiver of such shares
is, as stressed earlier, duty bound to preserve the value of such shares. Needless to
state, adopting timely measures to obviate the loss of those shares forms part of
such duty and due diligence.

The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the

PCGG liable for the loss of the 227 NOGCCI shares. There can be no quibbling, as
indeed the graft court so declared in its assailed and related resolutions respecting
the NOGCCI shares of stock, that PCGGs fiscal agents, while sitting in the NOGCCI
Board of Directors agreed to the amendment of the rule pertaining to membership
dues. Hence, it is not amiss to state, as did the Sandiganbayan, that the PCGGdesignated fiscal agents, no less, had a direct hand in the loss of the sequestered
shares through delinquency and their eventual sale through public auction. While
perhaps anti-climactic to so mention it at this stage, the unfortunate loss of the
shares ought not to have come to pass had those fiscal agents prudently not agreed
to the passage of the NOGCCI board resolutions charging membership dues on
shares without playing representatives.
Given the circumstances leading to the auction sale of the subject NOGCCI
shares, PCGGs lament about public respondent Sandiganbayan having erred or,
worse still, having gravely abused its discretion in its determination as to who is at
fault for the loss of the shares in question can hardly be given cogency.
For sure, even if the Sandiganbayan were wrong in its findings, which does not
seem to be in this case, it is a well-settled rule of jurisprudence thatcertiorari will
issue only to correct errors of jurisdiction, not errors of judgment. Corollarily, errors
of procedure or mistakes in the courts findings and conclusions are beyond the
corrective hand of certiorari.[14] The extraordinary writ of certiorari may be availed
only upon a showing, in the minimum, that the respondent tribunal or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its or
his jurisdiction, or with grave abuse of discretion.[15]
The term grave abuse of discretion connotes capricious and whimsical
exercise of judgment as is equivalent to excess, or a lack of jurisdiction.[16] The
abuse must be so patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of
law as where the power is exercised in an arbitrary and despotic manner by reason of
passion or hostility.[17] Sadly, this is completely absent in the present case. For, at
bottom, the assailed resolutions of the Sandiganbayan did no more than to direct
PCGG to comply with its part of the bargain under the compromise agreement it
freely entered into with private respondent Benedicto. Simply put, the assailed
resolutions of the Sandiganbayan have firm basis in fact and in law.
Lest it be overlooked, the issue of liability for the shares in
question had, as both
public
and
private
respondents
asserted,
long become final and executory. Petitioners narration of facts in its present
petition is even misleading as it conveniently fails to make reference to two (2)
resolutions issued by the Sandiganbayan. We refer to that courts resolutions
of December 6, 1994[18] and February 23, 1996[19] as well as several intervening
pleadings which served as basis for the decisions reached therein. As it were, the
present petition questions only and focuses on the March 28, 1995[20] and March 13,
1997[21]resolutions, which merely reiterated and clarified the graft courts underlying
resolution of December 6, 1994. And to place matters in the proper perspective,

PCGGs failure to comply with the December 6, 1994 resolution prompted the
issuance of the clarificatory and/or reiteratory resolutions aforementioned.
In a last-ditch attempt to escape liability, petitioner Republic, through the
PCGG, invokes state immunity from suit.[22] As argued, the order for it to pay the
value of the delinquent shares would fix monetary liability on a government agency,
thus necessitating the appropriation of public funds to satisfy the judgment
claim.[23] But, as private respondent Benedicto correctly countered, the PCGG fails to
take stock of one of the exceptions to the state immunity principle, i.e., when the
government
itself
is
the
suitor,
as
in Civil
Case
No.
0034.
Where, as here, the State itself is no
less
the
plaintiff
in
the
main case, immunity from
suit
cannot
be
effectively
invoked.[24] For,
as jurisprudence
teaches,
when
the
State,
through
its
duly
authorized officers, takes the initiative in a suit against a private party, it
thereby descends to the level of a private individual and thus opens itself to whatever
counterclaims or defenses the latter may have against it.[25] Petitioner Republics act
of filing its complaint in Civil Case No. 0034 constitutes a waiver of its immunity from
suit. Being itself the plaintiff in that case, petitioner Republic cannot set up its
immunity against private respondent Benedictos prayers in the same case.
In fact, by entering into a Compromise Agreement with private
respondent Benedicto, petitioner Republic thereby stripped
itself
of its immunity from suit and placed itself in the same level of its adversary.
When the State enters into contract, through its officers or agents, in furtherance of a
legitimate aim and purpose and pursuant to constitutional legislative authority,
whereby mutual or reciprocal benefits accrue and rights and obligations arise
therefrom, the State may be sued even without its express consent,
precisely because by entering into a contract the sovereign descends to the level of
the citizen. Its consent to be sued is implied from the very act of entering into such
contract,[26] breach of which on its part gives the corresponding right to the other
party to the agreement.
Finally, it is apropos to stress that the Compromise Agreement in Civil Case No.
0034 envisaged the immediate recovery of alleged ill-gotten wealth without further

litigation by the government, and buying peace on the part of the aging
Benedicto.[27] Sadly, that stated objective has come to naught as not only had the
litigation continued to ensue, but, worse, private respondent Benedicto passed away
on May 15, 2000,[28] with the trial of Civil Case No. 0034 still in swing, so much so
that the late Benedicto had to be substituted by the administratrix of his estate.[29]
WHEREFORE, the instant petition is hereby DISMISSED.
SO ORDERED.