FIRSTDIVISION

PRESIDENTIALCOMMISSIONONGOODGOVERNMENT,
Petitioner,
versus
H.E.HEACOCK,INC.andSANDIGANBAYAN(1STDIVISION),

CivilCaseNo.0002,allegingthatpetitionerhadarbitrarilyandforcibly
takenoverthewarehousewhichit(petitioner)hadleasedtoGreenfil
Corporation, Inc. (Greenfil), despite the fact that it (Heacock) had
alreadyagreedtoleasethesametotheInlandGroupofCompanies
(Inland).

G.R.No.165878

Heacock had been leasing from the Republic, represented by the

GeneralServicesAdministration(GSA),theparceloflandonwhichits
warehousestood,underaseriesofleaseagreementsdatingbackto
1928.[6]

Present:

In its complaintinintervention, Heacock prayed that petitioner be

orderedtovacateandreturntoitthepossessionofthewarehouse
andtodesistfrominterferinginanyleasecontractitenteredinto.

Respondents.

CARPIOMORALES,*
ActingChairperson,
BERSAMIN,
ABAD,**
MENDOZA,***and
PEREZ,***JJ.

Petitioner opposed the motion for intervention, arguing that

HeacockscauseofactionwascompletelyunrelatedtothoseinCivil
CaseNo.0002,hence,shouldbeventilatedinaseparateproceeding.
Findingpetitionersoppositionwelltaken,theSandiganbayan(Third
Division) denied Heacocks motion to intervene by Resolution of
October31,1989.[7]

HeacockthereuponfiledacomplaintdatedFebruary22,1990[8]with
theSandiganbayanagainstpetitionerandGreenfil,docketedasCivil
Case No. 0101, alleging that since petitioner failed to take the
requisite judicial action against Heacock arising from the writ of
sequestration, earlier issued against it, within six months from
ratification[9]ofthe1987Constitution, thewritshouldbedeemed
automaticallyliftedpursuanttoSection26,ArticleXVIIIofthe1987
Constitution.[10]

DECISION

Heacock stressed that, inter alia, petitioner could not point to Civil
Case No. 0002 as the constitutionallymandated judicial action or
proceeding,saidcasehavingfailedtoimpleaditasapartydefendant.
ItaddedthatonlyAranetassharesofstockshouldhavebeenseized.

Promulgated:

March30,2010
xx

CARPIOMORALES,J.:

Thepresentpetitionisoneforcertiorariandprohibition.

OnJuly16,1987,thePresidentialCommissiononGoodGovernment
orPCGG(petitioner),onbehalfoftheRepublicofthePhilippines(the
Republic),filedbeforetheSandiganbayanacomplaint,docketedas
CivilCaseNo.0002,[1]againstformerPresidentFerdinandE.Marcos
and his wife Imelda, Spouses Imelda and Tomas Manotoc, Spouses
Irene and Gregorio Ma. Araneta (Araneta) III, and Ferdinand R.
Marcos, Jr. to recover alleged illgotten wealth, assets and other
properties which they had acquired and/or conspired to acquire
duringMarcos20yearrule.

Annexedtothecomplaint[2]wasalistofallegedillgottenproperties
whichincludedassetsofrespondentH.E.Heacock,Inc.[3](Heacock)
inwhichAranetaownedfourpercent(4%)ofitssharesofstock.

Heacock added that petitioners purported cancellation of its

(Heacock)leasefromtheGSAanditsactofcontractinganewlease
with Greenfil over the warehouse, despite its (Heacocks) having
already entered into a lease arrangement with Inland, constituted
abuseofauthoritybeingultravires.

Heacockthusprayedthatjudgmentberendered:1)annullingthewrit
ofsequestrationagainstitanditssharesofstock,aswellasthelease
contractbetweenpetitionerandGreenfil,and2)orderingpetitioner
andGreenfiltovacatethewarehouseandreturnitspossessiontoit,
deliverallrentalspayabletopetitionerunderitscontractofleasewith
Greenfil,andpaydamagesandattorneysfees.[11]

The filing of Civil Case No. 0002 arose out of the Writ of
Sequestration,[4]issuedbythePCGGonJune13,1986thruthelone
signature of then Commissioner Mary Concepcion Bautista, placing
under the control and possession of petitioner three corporations
includingHeacock.

Heacock later moved to lift sequestration[12] based on the same

grounds pleaded in its complaint. Acting on the motion, the
Sandiganbayan(FirstDivision)ruledinfavorofHeacockbythefirst
assailedResolutionofSeptember12,1991,[13]inlightof,interalia,
thefailureofpetitionertoimpleadHeacockinanappropriatejudicial
proceedingfollowingSec.26,Art.XVIIIofthe1987Constitutionand
consistent with this Courts August 12, 1991 decision in G.R. No.
92376,Republicv.Sandiganbayan,etal.[14]

Protestingitssequestrationandthetakeoverofitswarehouseatthe
SouthHarborinPortArea,Manila,Heacocksoughttointervene[5]in

TheSandiganbayanthusorderedpetitionerto,within10days,turn
overtoHeacockthepossessionofthewarehouseandthepremises

located at 15th St., Port Area, Manila, and to submit to it

(Sandiganbayan)asummaryofalltheamountsithadcollectedfrom
lesseeGreenfil.

Petitioner moved to reconsider the Sandiganbayans Resolution of

September 12, 1991, citing, inter alia, its inability to turn over
possession of the warehouse and premises to Heacock as it had
already turned them over to the Philippine Ports Authority (PPA),
pursuanttoExecutiveOrder(E.O.)No.321[15]whichprovidesforthe
PPAs exercise of jurisdiction over an expanded South Harbor Port
Zone.

WHEREFORE,foralltheforegoing,themotionforreconsiderationof
defendantPCGGdatedOctober3,1991isherebydeniedforlackof
merit.Upontheotherhand,plaintiffsmotiontocompeldefendant
PCGG to pay rentals to PPA is partially resolved to the effect that
defendant PCGG is hereby ordered to turn over to PPA the
P350,000.00rentalsitreceivedfromdefendantGreenfilCorporation
to be applied to the existing arrears on rentals demanded from
plaintiff.WhetherdefendantPCGGcanbecompelledtopayallthe
sums due based on the statement of account sent by PPA to
defendantPCGGwillbebetteraddressedduringthepretrialortrial
ofthesecases.

At all events, petitioner maintained that even assuming arguendo

thatitcouldstilldoso,Heacockhadalreadylostitsrighttopossession
overthewarehouseandpremisesduetononpaymentofrentals.It
addedthatsincethelandbelongstothegovernment,thewarehouse
erected thereon became its property upon the expiration of the
original lease contract on July 22, 1953; and that since what were
sequesteredwereAranetassharesofstockinHeacock,CivilCaseNo.
002wasseasonablyfiled.

xxxx[20](Citationsomitted;emphasissupplied)

SincepetitionerhadyettofileananswertoHeacockscomplaint,the
Sandiganbayanremindedpetitionerofitsavailableremediesarising
fromthedenialofitsmotionforreconsideration.[21]

HeacocklaterfiledanUrgentMotiontoCompel[petitioner]toPay
RentalstoPPAandtoCollectRentalsandInterestfromGreenfil,[16]
contendingthatunderthetwoyearleasecontractpetitionerforged
withGreenfil,[17]itcollectedonlyP350,000inannualrentalsforthe
firstyearoftheleasebutneglectedtocollectanyrentals,together
with interests, for the second year; that PPA had already directed
Heacocktosettleitsfinancialobligationsincludingrentalarrearages
arising from the lease over the land; and that petitioner had not
remittedthesaidamounttoPPAtobeappliedtotheannualrentals
of P50,133 which Heacock owed the government under its original
leasewhichhadbeenrenewedforanother25yearseffectiveMay
22,1982.

Hence, the present petition for certiorari and prohibition filed by

petitioner,ascribingtotheSandiganbayangraveabuseofdiscretion
for:

To Heacock, petitioners willful refusal to remit the abovestated

amountofrentalstothePPAwasintendedtorenderit(Heacock)in
default on its original lease contract to the end that Greenfil could
thenbeawardedanewlease.

1....[GRANTING]TOPRIVATERESPONDENTALLOFTHERELIEFSAS
PRAYEDFORINITSCOMPLAINTDATEDFEBRUARY22,1990UPONA
MERE MOTION TO LIFT SEQUESTRATION AND WITHOUT TRIAL ON
THEMERITS[AND]

2....[RULING]THATPETITIONERSHOULDCOORDINATEWITH[THE]
PHILIPPINEPORTSAUTHORITY(PPA)FORTHEENFORCEMENTOFTHE
RESOLUTIONDATEDSEPTEMBER12,1991.[22]

Denying petitioners motion for reconsideration and partially

resolving Heacocks aforecited urgent motion, the Sandiganbayan
(First Division), by its second assailed Resolution of September 13,
2004,[18]heldthatitsorderliftingthewritofsequestrationwasin
accordancewithpreviousrulingsofthisCourt,addingthatinRepublic
v.Sandiganbayan,etal.[19]theCourtinvalidatedthethereinsubject
writs of sequestration on account of the nonobservance of
petitionersrulerequiringtheauthorityofatleasttwocommissioners
toissueawritofsequestration.

Apart from questioning the propriety of the lifting of the writ of

sequestration by mere motion, petitioner assails the grant by the
SandiganbayanofpracticallyallthereliefsprayedforbyHeacockin
its complaint, despite the existence of other controverted factual
issuesnecessitatingtrialonthemerits.

RespectingHeacocksmotiontocompelpetitionertopayrentalsto
PPA, the Sandiganbayan held that while petitioner admittedly
received P350,000 representing the rentals paid by Greenfil,
compellingpetitionertopaytheentireamountwouldamounttoan
adjudicationofthemeritsofthecasewithoutaffordingpetitionerand
Greenfiltheopportunitytopresentcontrovertingevidence.

The Sandiganbayan thereupon ordered petitioner to undertake

measures to coordinate with PPA for the implementation or
reinforcementofitsResolutionofSeptember12,1991.

ThustheSandiganbayandisposed:

ArguingthatHeacockisnotentitledtopossessionofthewarehouse,
petitionerassertsthatHeacockfailedtoadducesufficientproofthat
itstillhadavalidleasewiththegovernmentoverthelandonwhich
thewarehousestands,giventhattheoriginalleasecontractexpired
onJuly22,1953andwasextendedonlyuntilMay22,1957.

Respecting Heacocks presentation of a 2nd Indorsement dated

August 8, 1983[23] signed by then Minister Constancio Castaeda
purportedly approving a renewal of the lease for another 25 years
effectiveMay22,1982,petitionercontendsthatthedocumentisnot
a certified true copy of the original on file with the GSA, and no
evidence was presented to confirm the Ministers authority to
approvearenewalofthelease.Itwasthusobvious,petitionerclaims,
that upon termination of the lease and on account of Heacocks
failuretopayitsaccumulatedrentalarrearsamountingtomorethan
P700,000, the warehouse already became government property
pursuanttothetermsoftheoriginalleaseagreement.[24]


Finally,petitionerreiteratesitsclaimthatitisnolongerinaposition
toturnoverpossessionofthewarehouseanditspremisestoHeacock
asithadalreadyturnedoverthesametothePPA.

earlyas1958,longbeforeMarcoscameintopower;andthatAraneta
acquiredhisminimalsharesofstockthereinfromhisfamilyin1974
1979orseveralyearsbeforeheevengotmarriedtoIreneMarcosin
1983, thereby precluding any likelihood that Heacock could be a
conduitfortheMarcosillgottenwealth.[28]

WHEREFORE,thepetitionisDISMISSED.

Thepetitiondoesnotimpress.

TheCourt,notingthatmorethantwodecadeshavealreadypassed
since the filing of the complaint subject of the present decision,
DIRECTStheSandiganbayantoproceedwithdispatchinresolvingthe
remainingissuesorincidentsinCivilCaseNo.0101

Thetaskofascertainingthevalidityofwritsofsequestrationissued
bythePCGG,whencalledintoquestion,isthesoleprovinceofthe
Sandiganbayan,theissuesinvolvedthereinbeingfactualinnature.It
iswellsettledthattheSandiganbayanhasfullauthoritytodecideany
and all incidents pertaining to an illgotten case, including the
proprietyoftheissuanceofthewritsofsequestration.[25]

Nocosts.

Thus, any question on the correctness of the lifting of the

sequestration writ against Heacock upon its motion, either in Civil
CaseNo.0002hadHeacockbeenallowedtointerveneorinCivil
CaseNo.0101,hardlymeritsfurtherdiscussion.

SOORDERED.

TheSandiganbayansquestionedresolutionsliftingthesequestration
writ could be, as it correctly was, decided independently of what
petitioner claims to be the existence of other controverted issues
thatrequiretrialonthemeritsbeforethereliefsprayedfor...may
begranted.

Aperusaloftherecordsdisclosestheexistenceoflegalandfactual
groundsfortheSandiganbayansdecisiontoliftthesequestrationof
Heacock.RecallthatSequestrationWritNo.860133datedJune13,
1986, issued upon the sole authority of then Commissioner Mary
Concepcion Bautista, was issued against Heacock (apart from two
othercompanies)asacorporateentity,andnotjustagainstAranetas
sharesofstockorinterestinHeacock.

Section26,ArticleXVIIIofthe1987Constitution,asearliercited,[26]
mandates petitioner to file the corresponding judicial action or
proceedingswithinasixmonthperiod(fromratificationthereofon
February2,1987)inordertomaintainsequestration,noncompliance
withwhichwouldresultintheautomaticliftingofthesequestration
orfreezeorders.Itwasataskpetitionerwasunabletoaccomplish.

The Courts earlier ruling in Presidential Commission on Good

Government v. Sandiganbayan,[27] which remains good law,
reiteratesthenecessityofpetitioneractuallyimpleadingcorporations
as defendants in the complaint out of recognition for their distinct
andseparatepersonalities,failingwhichpetitionerwouldnecessarily
be denying such entities their right to due process. This ruling a
fortiori applies in the present case, the sequestration of the
unimpleadedHeacockbeinginvalidduetotheissuanceofthewritof
sequestrationbyaloneCommissionerofpetitioner.

Even assuming arguendo that Civil Case No. 0002 was the
constitutionallymandatedjudicialactionorproceeding,itisapparent
thatpetitionerwasonlyafterAranetassharesofstockinHeacock,
hence, the impropriety of sequestering Heacock itself. Petitioners
arbitrariness becomes more pronounced as the Court notes that
AranetasholdingsinHeacockcompriseamerefourpercent(4%)of
itsoutstandingcapitalstock.

Furthermore,petitionerhasnotrefutedHeacocksallegationsinits
complaintinCivilCaseNo.0101thatit(Heacock)wasincorporatedas