Professional Documents
Culture Documents
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FIRST DIVISION
In Civil Case No. 79-M-97, Javellana averred that upon the execution of the deed
of conditional sale, he had paid the initial amount of P80,000.00 and had taken
possession of the parcels of land; that he had paid the balance of the purchase
price to Juvenal on different dates upon Juvenals representation that Margarita
had needed funds for the expenses of registration and payment of real estate tax;
and that in 1996, Priscilla had called to inquire about the mortgage constituted on
the parcels of land; and that he had told her then that the parcels of land had not
been mortgaged but had been sold to him.[5]
BERSAMIN, J.:
The denial of a motion for reconsideration of an order granting the defending
partys motion to dismiss is not an interlocutory but a final order because it puts an
end to the particular matter involved, or settles definitely the matter therein
disposed of, as to leave nothing for the trial court to do other than to execute the
order.[1] Accordingly, the claiming party has a fresh period of 15 days from notice of
the denial within which to appeal the denial.[2]
Antecedents
On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for
consideration of P160,000.00 to respondent Ramon Javellana by deed of
conditional sale two parcels of land with areas of 3,675 and 20,936 square meters
located in Barangay Mallis, Guiguinto, Bulacan. They agreed that Javellana would
pay P80,000.00 upon the execution of the deed and the balance of P80,000.00
upon the registration of the parcels of land under the Torrens System (the
registration being undertaken by Margarita within a reasonable period of time); and
that should Margarita become incapacitated, her son and attorney-in-fact, Juvenal
M. Alma Jose (Juvenal), and her daughter, petitioner Priscilla M. Alma Jose, would
receive the payment of the balance and proceed with the application for
registration.[3]
After Margarita died and with Juvenal having predeceased Margarita without issue,
the vendors undertaking fell on the shoulders of Priscilla, being Margaritas sole
surviving heir. However, Priscilla did not comply with the undertaking to cause the
registration of the properties under the Torrens System, and, instead, began to
improve the properties by dumping filling materials therein with the intention of
converting the parcels of land into a residential or industrial subdivision.[4] Faced
with Priscillas refusal to comply, Javellana commenced on February 10, 1997 an
action for specific performance, injunction, and damages against her in the
Regional Trial Court in Malolos, Bulacan (RTC), docketed as Civil Case No. 79-M97 entitled Ramon C. Javellana, represented byAtty. Guillermo G. Blanco v.
Priscilla Alma Jose.
It appears that pending the appeal, Javellana also filed a petition for certiorari in
the CA to assail the June 24, 1999 and June 21, 2000 orders dismissing his
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Accordingly, Javellana filed a notice of appeal from the June 21, 2000 order,
[14]
which the RTC gave due course to, and the records were elevated to the Court
of Appeals (CA).
CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV No.
68259 was different from the issue of grave abuse of discretion raised in C.A.-G.R.
SP No. 60455.
Ruling
The petition for review has no merit.
I
Denial of the motion for reconsideration of the
order of dismissal was a final order and appealable
Priscilla submits that the order of June 21, 2000 was not the proper subject of an
appeal considering that Section 1 of Rule 41 of the Rules of Court provides that no
appeal may be taken from an order denying a motion for reconsideration.
Priscillas submission is erroneous and cannot be sustained.
First of all, the denial of Javellanas motion for reconsideration left nothing more to
be done by the RTC because it confirmed the dismissal of Civil Case No. 79-M-97.
It was clearly a final order, not an interlocutory one. The Court has distinguished
between final and interlocutory orders in Pahila-Garrido v. Tortogo,[22] thuswise:
The distinction between a final order and an interlocutory order is well known. The
first disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing more to be done except to enforce by
execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An
interlocutory order deals with preliminary matters and the trial on the merits is yet
to be held and the judgment rendered. The test to ascertain whether or not an
order or a judgment is interlocutory or final is:does the order or judgment leave
something to be done in the trial court with respect to the merits of the case? If it
does, the order or judgment is interlocutory; otherwise, it is final.
And, secondly, whether an order is final or interlocutory determines whether appeal
is the correct remedy or not. A final order is appealable, to accord with the final
judgment rule enunciated in Section 1, Rule 41 of the Rules of Court to the effect
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involved questions of fact not proper for the Court to review through petition for
review on certiorari; that the June 21, 2000 RTC order, being a final order, was
appealable; that his appeal was perfected on time; and that he was not guilty of
forum shopping because at the time he filed the petition for certiorari the CA had
not yet rendered a decision in C.A.-G.R.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial
or reconsideration shall be allowed. (n)
Under the rule, Javellana had only the balance of three days from July 13, 2000, or
until July 16, 2000, within which to perfect an appeal due to the timely filing of his
motion for reconsideration interrupting the running of the period of appeal. As such,
his filing of the notice of appeal only on July 19, 2000 did not perfect his appeal on
time, as Priscilla insists.
The seemingly correct insistence of Priscilla cannot be upheld, however,
considering that the Court meanwhile adopted the fresh period rule in Neypes v.
Court of Appeals,[25] by which an aggrieved party desirous of appealing an adverse
judgment or final order is allowed a fresh period of 15 days within which to file the
notice of appeal in the RTC reckoned from receipt of the order denying a motion
for a new trial or motion for reconsideration, to wit:
The Supreme Court may promulgate procedural rules in all courts. It has the sole
prerogative to amend, repeal or even establish new rules for a more simplified and
inexpensive process, and the speedy disposition of cases. In the rules governing
appeals to it and to the Court of Appeals, particularly Rules 42, 43 and 45, the
Court allows extensions of time, based on justifiable and compelling reasons, for
parties to file their appeals. These extensions may consist of 15 days or more.
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Section 3. Period of ordinary appeal. The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a record
on appeal is required, the appellant shall file a notice of appeal and a record on
appeal within thirty (30) days from notice of the judgment or final order.
To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh
period of 15 days within which to file the notice of appeal in the Regional Trial
Court, counted from receipt of the order dismissing a motion for a new trial or
motion for reconsideration.
Consequently, we rule that Javellanas notice of appeal was timely filed pursuant to
the fresh period rule.
Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals
from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions
for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on
appeals from quasi-judicial agencies to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court. The new rule aims to
regiment or make the appeal period uniform, to be counted from receipt of the
order denying the motion for new trial, motion for reconsideration (whether full or
partial) or any final order or resolution.[26]
III
No forum shopping was committed
The Court expounded on the nature and purpose of forum shopping in In Re:
Reconstitution of Transfer Certificates of Title Nos. 303168 and 303169 and
Issuance of Owners Duplicate Certificates of Title In Lieu of Those Lost, Rolando
Edward G. Lim, Petitioner:[30]
For forum shopping to exist, both actions must involve the same transaction, same
essential facts and circumstances and must raise identical causes of action,
subject matter and issues. Clearly, it does not exist where different orders were
questioned, two distinct causes of action and issues were raised, and two
objectives were sought.
Should Javellanas present appeal now be held barred by his filing of the petition
for certiorari in the CA when his appeal in that court was yet pending?
We are aware that in Young v. Sy,[31] in which the petitioner filed a notice of appeal
to elevate the orders concerning the dismissal of her case due to non-suit to the
CA and a petition for certiorari in the CA assailing the same orders four months
later, the Court ruled that the successive filings of the notice of appeal and the
petition for certiorari to attain the same objective of nullifying the trial courts
dismissal orders constituted forum shopping that warranted the dismissal of both
cases. The Court said:
Ineluctably, the petitioner, by filing an ordinary appeal and a petition
for certiorari with the CA, engaged in forum shopping. When the petitioner
commenced the appeal, only four months had elapsed prior to her filing with the
CA the Petition for Certiorariunder Rule 65 and which eventually came up to this
Court by way of the instant Petition (re: Non-Suit). The elements of
litis pendentia are present between the two suits. As the CA, through its Thirteenth
Division, correctly noted, both suits are founded on exactly the same facts and
refer to the same subject matterthe RTC Orders which dismissed Civil Case
No. SP-5703 (2000) for failure to prosecute. In both cases, the petitioner is
seeking the reversal of the RTC orders. The parties, the rights asserted, the
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Forum shopping is the act of a party litigant against whom an adverse judgment
has been rendered in one forum seeking and possibly getting a favorable opinion
in another forum, other than by appeal or the special civil action of certiorari, or the
institution of two or more actions or proceedings grounded on the same cause or
supposition that one or the other court would make a favorable disposition. Forum
shopping happens when, in the two or more pending cases, there is identity of
parties, identity of rights or causes of action, and identity of reliefs sought. Where
the elements of litis pendentia are present, and where a final judgment in one case
will amount to res judicata in the other, there is forum shopping. For litis
pendentia to be a ground for the dismissal of an action, there must be: (a) identity
of the parties or at least such as to represent the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the
same acts; and (c) the identity in the two cases should be such that the judgment
which may be rendered in one would, regardless of which party is successful,
amount to res judicata in the other.
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considering that the appeal was a continuity of Civil Case No. 79-M-97, whereas
C.A.-G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of the RTC. The
second danger, i.e., the unethical malpractice of shopping for a friendly court or
judge to ensure a favorable ruling or judgment after not getting it in the appeal,
would not arise because the CA had not yet decided C.A.-G.R. CV No. 68259 as of
the filing of the petition for certiorari.
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SECOND DIVISION
SO ORDERED.[5]
Feeling aggrieved, the heirs of the late Antonio Consing (Consing) questioned the
RTC's order via a petition for certiorari filed with the CA, against Hon. Renato D.
Muez, Presiding Executive Judge, RTC, Branch 60 of Cadiz City, Spouses
Medado, Sheriff IV Balbino B. Germinal of RTC, Branch 60 of Cadiz City and LBP.
They sought, among other reliefs, the dismissal of the complaint for injunction for
violation of the rules on litis pendentia and forum shopping. On the matter of the
absence of a motion for reconsideration of the trial court's order before resorting to
a petition for certiorari, the heirs explained that the implementation of the
questioned writs through LBP's release of the VOS proceeds' balance to the sheriff
on March 29, 2007, notwithstanding: (a) the pendency of motions for
reconsideration and dissolution of the writs filed by the heirs, and (b) the fact that
the writs were immediately implemented even if a hearing on the motions was
already scheduled for March 30, 2007, prompted the heirs' withdrawal of their
motions for being already moot and academic. The heirs argued that their case
was within the exceptions to the general rule that a petition under Rule 65 will not
lie unless a motion for reconsideration is first filed before the lower court.
In their comment on the petition, Spouses Medado questioned, among other
matters, the authority of Soledad to sign the petition's certification of non-forum
shopping on behalf of her co-petitioners.
The Ruling of the CA
On September 26, 2008, the CA rendered the assailed decision,[6] the dispositive
portion of which reads:
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As regards the first ground, records show that Soledad signed the verification and
certification against forum shopping on behalf of her co-petitioners by virtue of a
Special Power of Attorney[10](SPA) attached to the petition filed with the CA. The
SPA, signed by her co-heirs Ma. Josefa Consing Saguitguit, Ma. Carmela Consing
Lopez, Ma. Lourdes Consing Gonzales and Mary Rose Consing Tuason, provides
that their attorney-in-fact Soledad is authorized:
To protect, sue, prosecute, defend and adopt whatever action necessary and
proper relative and with respect to our right, interest and participation over said
properties, particularly those described in previous titles under TCT No. T-498,
TCT No. T-31275, TCT No. T-31276 and TCT No. T-31277 of the [R]egister of
Deeds, Cadiz City, covering a total area of 73.6814 square meters, and declared in
the name of said Antonio Consing and located in Brgy. Magsaysay, Cadiz City,
Negros Occidental, the same parcels of land are the subject of judicial litigation
before the [R]egional Trial [Court], Branch 44, Bacolod City, docketed as Civil
[C]ase No. 11320, entitled Soledad T. Consing, for herself and as Administratix of
the estate of Antonio Consing, plaintiffs, versus, Spouses Meritus Rey and Elsa
Medado, et.al., defendants, and Regional Trial Court, Branch 60, Cadiz City and
docketed as Civil Case No. 797-C, entitled, []Spouse[s] Meritus Rey Medado and
Elsa Medado, plaintiffs, versus, Land Bank of the Philippines and heirs of the Late
Antonio Consing as represented by Dra. Soledad Consing, defendants; pending in
said court and which cases may at anytime be elevated to the Court of Appeals
and/or Supreme Court as the circumstances so warrant;[11]
As may be gleaned from the foregoing, the authority of Soledad includes the filing
of an appeal before the CA, including the execution of a verification and
certification against forum shopping therefor, being acts necessary to protect, sue,
prosecute, defend and adopt whatever action necessary and proper in relation to
their rights over the subject properties.
In addition, the allegations and contentions embodied in the CA petition do not
deviate from the claims already made by the heirs in Civil Case Nos. 00-11320 and
797-C, both specifically mentioned in the SPA. We emphasize that the verification
requirement is simply intended to secure an assurance that the allegations in the
pleading are true and correct, and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith.[12] We rule that there was
no deficiency in the petition's verification and certification against forum shopping
filed with the CA.
In any case, we reiterate that where the petitioners are immediate relatives, who
share a common interest in the property subject of the action, the fact that only one
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this stage.
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10
On the third issue, there is forum shopping when the elements of litis pendentia are
present, i.e., between actions pending before courts, there exist: (1) identity of
parties, or at least such parties as represent the same interests in both actions, (2)
identity of rights asserted and relief prayed for, the relief being founded on the
same facts, and (3) the identity of the two preceding particulars is such that any
judgment rendered in the other action will, regardless of which party is successful,
amount to res judicata in the action under consideration; said requisites are also
constitutive of the requisites for auter action pendant or lis pendens.[18] Applying
the foregoing, there was clearly a violation of the rule against forum shopping when
Spouses Medado instituted Civil Case No. 797-C for injunction notwithstanding the
pendency of Civil Case No. 00-11320 for rescission of contract and damages.
All elements of litis pendentia are present with the filing of the two cases. There is
no dispute that there is identity of parties representing the same interests in the
two actions, both involving the estate and heirs of the late Consing on one hand,
and Spouses Medado on the other. The rescission case names Soledad T.
Consing, for herself and as administratrix of the estate of Antonio Consing as
plaintiff, with Spouses Meritus Rey and Elsa Medado, [PNB] and the Register of
Deeds of Cadiz City as respondents. The injunction case, on the other hand, was
instituted by Spouses Medado, against (LBP) and the Heirs of the Late Antonio
Consing, as represented by Dra. Soledad Consing. The primary litigants in the
two action, and their interests, are the same.
The two other elements are likewise satisfied. There is an identity of rights
asserted and reliefs prayed for in the two cases, with the reliefs being founded on
the same set of facts. In both cases, the parties claim their supposed right as
owners of the subject properties. They all anchor their claim of ownership on the
deeds of absolute sale which they had executed, and the law applicable thereto.
They assert their respective rights, with Spouses Medado as buyers and the heirs
It does not even matter that one action is for the enforcement of the parties'
agreements, while the other action is for the rescission thereof. In the similar case
of Victronics Computers, Inc. v. RTC, Branch 63, Makati,[19] we discussed:
Civil Case No. 91-2069 actually involves an action for specific performance; it thus
upholds the contract and assumes its validity. Civil Case No. 91-2192, on the other
hand, is for the nullification of the contract on the grounds of fraud and vitiated
consent. While ostensibly the cause of action in one is opposite to that in the
other, in the final analysis, what is being determined is the validity of the
contract. x x x Thus, the identity of rights asserted cannot be disputed.
Howsoever viewed, it is beyond cavil that regardless of the decision that would be
promulgated in Civil Case No. 91-2069, the same would constitute res judicata on
Civil Case No. 91-2192 and vice versa.[20] (emphasis supplied)
This was further explained in Casil v. CA,[21] where we ruled:
The Court of Appeals held that there can be no res adjudicata because there is no
identity of causes of action between the two cases. We do not agree. In the two
cases, both petitioner and private respondent brought to fore the validity of the
agreement dated May 4, 1994. Private respondent raised this point as an
affirmative defense in her answer in the First Case. She brought it up again in her
complaint in the Second Case. A single issue cannot be litigated in more than one
forum. As held inMendiola vs. Court of Appeals:
The similarity between the two causes of action is only too glaring. The test of
identity of causes of action lies not in the form of an action but on whether the
same evidence would support and establish the former and the present causes of
action. The difference of actions in the aforesaid cases is of no moment. In Civil
Case No. 58713, the action is to enjoin PNB from foreclosing petitioner's
properties, while in Civil Case No. 60012, the action is one to annul the auction
sale over the foreclosed properties of petitioner based on the same
grounds. Notwithstanding a difference in the forms of the two actions, the doctrine
of res judicata still applies considering that the parties were litigating for the same
thing, i.e. lands covered by TCT No. 27307, and more importantly, the same
contentions and evidence as advanced by herein petitioner in this case were in
fact used to support the former cause of action.[22]
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as sellers, based on the same set of facts that involve the deeds of sale's contents
and their validity. Both actions necessarily involve a ruling on the validity of the
same contract as against the same parties. Thus, the identity of the two cases is
such as would render the decision in the rescission case res judicata in the
injunction case, and vice versa.
11
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12
B.
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13
Issues
xxx
Paler's son received the letter from the Commission Chairman denying Paler's
motion for reconsideration on March 18, 2004. Thus, Paler's had until April 2, 2004
within which to file his appeal with the CSC. It was filed, however, only on April 5,
We agree with the CSC. We uphold its decision to relax the procedural rules
because Paler's appeal was meritorious. This is not the first time that the Court has
upheld such exercise of discretion. InRosales, Jr. v. Mijares[25] involving Section
49(a) of the CSC Revised Rules of Procedure, the Court ruled:
On the contention of the petitioner that the appeal of the respondent to the CSC
was made beyond the period therefor under Section 49(a) of the CSC Revised
Rules of Procedure, the CSC correctly ruled that:
Movant claims that Mijares' appeal was filed way beyond the reglementary period
for filing appeals. He, thus, contends that the Commission should not have given
due course to said appeal.
The Commission need not delve much on the dates when Mijares was separated
from the service and when he assailed his separation. Suffice it to state that the
Commission found his appeal meritorious. This being the case, procedural
rules need not be strictly observed. This principle was explained by in the case
of Mauna vs. CSC, 232 SCRA 388, where the Supreme Court ruled, to wit:
"Assuming for the sake of argument that the petitioner's appeal was filed out of
time, it is within the power of this Court to temper rigid rules in favor of
substantial justice. While it is desirable that the Rules of Court be faithfully
and even meticulously observed, courts should not be so strict about
procedural lapses that do not really impair the proper administration of
justice. If the rules are intended to ensure the orderly conduct of litigation, it
is because of the higher objective they seek which is the protection of
substantive rights of the parties. As held by the Court in a number of cases:
xxx
It bears stressing that the case before the CSC involves the security of tenure of a
public officer sacrosanctly protected by the Constitution. Public interest requires a
resolution of the merits of the appeal instead of dismissing the same based on a
strained and inordinate application of Section 49(a) of the CSC Revised Rules of
Procedure.[26] (Emphasis supplied)
Constantino-David v. Pangandaman-Gania[27] likewise sustained the CSC when it
modified an otherwise final and executory resolution and awarded backwages to
the respondent, in the interest of justice and fair play. The Court stated -
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2004.[23] Nevertheless, the CSC entertained the appeal in the interest of substantial
justice.[24]
14
The CSC and CA were also correct in ruling that Paler could not be considered
absent without leave (AWOL) for the period of August 1, 2003 to November 14,
2003.
Paler was dropped from the roll of employees pursuant to Section 63, Rule XVI of
the Omnibus Rules on Leave:
AWOL means that the employee has left or abandoned his post for a continuous
period of thirty (30) calendar days or more without any justifiable reason and notice
to his employer.[33]
The bone of contention in this case is whether or not Paler had an approved leave.
Section 49, Rule XVI of the Omnibus Rules on Leave requires that an application
for leave should be acted upon within 5 working days from receipt, otherwise, such
application is deemed approved.[34]The CSC interpreted said provision in this wise It is explicit from the aforequoted rule that an application for leave of absence
which had not been acted upon - either by approving or disapproving - by the head
of agency or his/her authorized representative within five (5) working days from the
date of its filing shall be deemed approved.[35] (Italics supplied)
The CSC also ruled that "Section 49 calls for a specific action to be done by the
head of the agency or his duly authorized representative on the application for
leave filed which is either to approve or to deny the same."[36]
Being the central agency mandated to "prescribe, amend, and enforce rules and
regulations for carrying into effect the provisions of the Civil Service Law and other
pertinent laws," the CSC has the power to interpret its own rules and any phrase
contained in them, with its interpretation significantly becoming part of the rules
themselves.[37] The Court has consistently yielded and accorded great respect to
the interpretation by administrative agencies of their own rules unless there is an
error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly
conflicting with the letter and spirit of the law.[38]
The CA added its own reading of Section 49 which the Court now sustains:
x x x The action contemplated therein connotes a clear and explicit exercise of
discretion. It pertains to an absolute and unequivocal "approval" or "disapproval" of
the request for leave and not one which is merely "recommendatory" in nature. If
the rule were otherwise, the authority to act on the application for leave would not
have been vested on the head of the agency or the CA [Commission on
Appointments] Chairman's authorized representative. Needless to state, the
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15
MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated June 30, 1994, and
resolution, dated September 29, 1994, of the Court of Appeals 1 which affirmed the
decision of the Regional Trial Court, Branch 149, Makati, dismissing the complaints
filed by petitioner against herein private respondents, and denied petitioners
motion for reconsideration, respectively.
The background of this case is as follows:chanrob1es virtua1 1aw 1ibrary
On November 29, 1985, petitioner Benguet Exploration, Inc. (Benguet) filed a
complaint for damages against Seawood Shipping, Inc. (Seawood Shipping) with
the Regional Trial Court of Makati, which was docketed as Civil Case No. 12394
and assigned to Branch 149. 2 On March 4, 1986, petitioner Benguet filed another
complaint for damages against respondent Switzerland General Insurance, Co.,
Ltd. (Switzerland Insurance), which was docketed as Civil Case No. 13085 3 and
assigned to Branch 148 of the court.
The two cases were consolidated. Switzerland Insurance filed a third-party
complaint against Seawood Shipping, praying that the latter be ordered to
indemnify it for whatever might be adjudged against it in favor of petitioner. 4
Thereafter, the cases were jointly tried, during which petitioner Benguet presented
its employees, Rogelio Lumibao and Ernesto Cayabyab, as witnesses.
Rogelio Lumibao, marketing assistant of Benguet, was in charge of exportation.
His responsibilities included the documentation of export products, presentations
with banks, and other duties connected with the export of products. He explained
that private respondent Seawood Shipping was chartered by petitioner Benguet to
transport copper concentrates. The bill of lading (Exh. A) stated that the cargo,
consisting of 2,243.496 wet metric tons of copper concentrates, was loaded on
board Sangkulirang No. 3 at Poro Point, San Fernando, La Union. It was insured
by Switzerland Insurance (marine insurance policy was marked Exh. C). When the
cargo was unloaded in Japan, however, Rogelio Lumibao received a report (Exh.
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16
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17
Another witness for Switzerland Insurance was Anastacio Fabian, the marine
manager of Certified Adjusters, Inc. He testified that he went to Poro Point where
the shipment was loaded for transport to Japan. It took him almost two months to
finish his investigation and to come up with a written report (Exh. 12). He prepared
a letter, dated January 31, 1986, seeking a certification from Capt. Jae Jang of
Sangkulirang No. 3 on whether the ship was equipped with a steel centerline
bulkhead (Exh. 5). In response thereto, respondent Seawood Shipping sent a
letter, dated February 1, 1986, stating therein that the vessel was not equipped
with a steel centerline bulkhead (Exh. 6). This steel centerline bulkhead was a
steel separation of a vessel for the purpose of preventing the vessel from sinking,
especially in heavy weather. Pictures of the ship were taken by Wise Insurance
showing that the vessel did not have a steel centerline bulkhead (Exhs. 15 to 15H).
Fabian also identified petitioner Benguets export declaration (Exh. 11) which
provides therein that the cargo loaded on the ship weighed 2,050 wet metric tons
or 1,845 dry metric tons. 16 On further direct examination, he testified that Certified
Adjusters, Inc.s president, Mr. Edgardo Dio, wrote a letter, dated January 13,
1986, to the shipping company inquiring as to the circumstances surrounding the
loss of the cargo (Exh. 17). Seawood Shipping responded to Certified Adjusters,
Inc. in a letter, dated January 16, 1986, explaining that the weight of the cargo
might have been increased by the rains which occurred during the loading, and
that the shortage upon unloading might be due to the moisture which evaporated
during the voyage from the Philippines to Japan. Fabian testified that the moisture
on the copper concentrates increased the weight of the cargo.
Fabian said that during his investigation he asked how and when the shipment was
loaded in the vessel and where it was loaded. He also checked records of the
loading of the cargo. Although he admitted that the records show that a shortage of
the copper concentrates had occurred when these reached Japan, he attributed it
to the rains which occurred during the loading of the copper concentrates which
increased their weight, although he conceded that it was not possible that the rains
would cause a shortage of around 300 metric tons. He did not know what could
have caused the shortage. 17
The last witness to testify for the defense was Edgardo Dio, president and
general manager of Certified Adjusters, Inc. He testified that his company
conducted an investigation and found that the vessel Sangkulirang No. 3 was not
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insurance policy null and void from the beginning. This is why Switzerland
Insurance refunded the premium paid by petitioner Benguet. Pantoja stated that
petitioner Benguet did not claim that the loss was caused by the shipping of the
cargo because it did not know the cause of the shortage. 15
18
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Appeals made the same factual findings as did the trial court. 23
19
Q Did you have it [verified] if this was the actual weight loaded on the ship of the
defendant Seawood, Shipping, Inc.?
A We were advised by the OMIC surveyor that the weight was loaded.
A None, sir.
Q In other words, you did not verify if the weight stated in the bill of lading was the
actual weight of the copper concentrate loaded in the ship of the defendant
Seawood Shipping Inc.?
A Yes, by phone.
x.
A The bill of lading is prepared on the basis of the draft survey. That is the
procedure.
Q In other words, your draft survey is from the point of origin to Poro Point up to
the point of destination, Onahama, Japan, was done by OMIC?
A Yes, sir by phone.
A Yes, sir.
Q Do you always verify by phone?
A That is only preliminary, while waiting what is the concluding things. (sic) That is
after the surveyor has submitted the report to us.
Q So in other words, all the time you have been basing your testimony on reports
prepared by other person?
A Yes, sir.
Q In fact, you have nothing to do with the preparation of the Bill of Lading?
A Yes, sir.
Q You have nothing to do with the weighing of the copper concentrate? . . . . You
have nothing to do [with] the transport of the copper concentrate from Camp 6,
Baguio to Poro Point?
A None, sir.
Q You did not even accompany the truck?
Page
20
A No, sir.
Q You were not at the shipside when this copper concentrate was loaded?
A No, sir.
Q You did not know whether there was spillage when or while loading copper
concentrates?
A Yes, sir.
Q Neither were you on the ship on its way to Japan, were you?
A No, sir.
Q You were not at Onahama, Japan, the port of destination?
Any evidence, whether oral or documentary, is hearsay if its probative value is not
based on the personal knowledge of the witness but on the knowledge of another
person who is not on the witness stand. Hearsay evidence, whether objected to or
not, has no probative value unless the proponent can show that the evidence falls
within the exceptions to the hearsay evidence rule. 28
Second. Petitioner contends that the genuineness and due execution of the
documents presented, i.e., Bill of-Lading, Certificate of Loading, Certificate of
Weight, Mates Receipt, were properly established by the testimony of its witness,
Ernesto Cayabyab, and that as a result, there is a prima facie presumption that
their contents are true.
This contention has no merit. The admission of the due execution and
genuineness of a document simply means that "the party whose signature it bears
admits that he signed it or that it was signed by another for him with his authority;
Execution can only refer to the actual making and delivery, but it cannot involve
other matters without enlarging its meaning beyond reason. The only object of the
rule was to enable a plaintiff to make out a prima facie, not a conclusive case, and
it cannot preclude a defendant from introducing any defense on the merits which
does not contradict the execution of the instrument introduced in evidence. 31
In this case, respondents presented evidence which casts doubt on the veracity of
these documents. Respondent Switzerland Insurance presented Export
Declaration No. 1131/85 (Exh. 11) 32 which petitioners own witness, Rogelio
Lumibao, prepared, 33 in which it was stated that the copper concentrates to be
transported to Japan had a gross weight of only 2,050 wet metric tons or 1,845 dry
metric tons, 10 percent more or less. 34 On the other hand, Certified Adjusters,
Inc., to which Switzerland Insurance had referred petitioners claim, prepared a
report which showed that a total of 2,451.630 wet metric tons of copper
concentrates were delivered at Poro Point. 35 As the report stated:chanrob1es
virtual 1aw library
It is to be pointed out that there were no actual weighing made at Benguet
Exploration, Inc.s site. The procedure done was that after weighing the trucks
before and after unloading at Philex Poro Point Installation, the weight of the load
was determined and entered on "Philex" Trip Ticket which was later on copied and
entered by the truck driver on Benguet Exploration, Inc.s Transfer Slip. 36
Considering the discrepancies in the various documents showing the actual
amount of copper concentrates transported to Poro Point and loaded in the vessel,
there is no evidence of the exact amount of copper concentrates shipped. Thus,
whatever presumption of regularity in the transactions might have risen from the
genuineness and due execution of the Bill of Lading, Certificate of Weight,
Certificate of Loading, and Mates Receipt was successfully rebutted by the
evidence presented by respondent Switzerland Insurance which showed
disparities in the actual weight of the cargo transported to Poro Point and loaded
on the vessel. This fact is compounded by the admissions made by Lumibao and
Cayabyab that they had no personal knowledge of the actual amount of copper
concentrates loaded on the vessel. Correctly did the Court of Appeals
Page
that at the time it was signed it was in words and figures exactly as set out in the
pleading of the party relying upon it; that the document was delivered; and that any
formal requisites required by law, such as a seal, an acknowledgment, or revenue
stamp, which it lacks, are waived by him." 29 In another case, we held that "When
the law makes use of the phrase genuineness and due execution of the
instrument it means nothing more than that the instrument is not spurious,
counterfeit, or of different import on its face from the one executed." 30 It is equally
true, however, that
21
Page
22
SECOND DIVISION
10. With the contracted work, third-party plaintiff rented the equipment of the
plaintiff Monark;
11. Third-party plaintiff rendered and complied with its contracted works with thirdparty defendant using plaintiff's (Monark) rented equipment. But, third-party
defendant BECTHEL did not pay for the services of third-party plaintiff
ASIAKONSTRUKT that resulted to the non-payment of plaintiff Monark's claim;
12. Despite repeated demands, third-party defendant failed and refused to pay its
overdue obligation to third-party plaintiff ASIAKONSTRUKT, and third-party
defendant needs to be impleaded in this case for contribution, indemnity,
subrogation or other reliefs to off-set or to pay the amount of money claim of
plaintiff Monark on the leased equipment used in the Mauban, Quezon project in
the total amount of P456,666.67;
13. By reason thereof, third-party plaintiff was compelled to prosecute its claim
against third-party defendant and hired the services of undersigned counsel for an
attorney's fees of P500,000.00.4
ACDC prayed that judgment be rendered in its favor dismissing the complaint and
ordering the third-party defendant (Becthel) to pay P456,666.67 plus interest
thereon and attorney's fees.5
MEC opposed the motion of ACDC to file a third-party complaint against Becthel
on the ground that the defendant had already admitted its principal obligation to
MEC in the amount of P5,071,335.86; the transaction between it and ACDC, on the
one hand, and between ACDC and Becthel, on the other, were independent
transactions. Furthermore, the allowance of the third-party complaint would result
in undue delays in the disposition of the case.6
Page
23
On July 18, 2001, the CA rendered judgment dismissing the appeal and affirming
the assailed decision. The appellate court ruled that since MEC had prayed for
judgment on the pleadings, it thereby waived its claim for damages other than the
amount of P5,071,335.86; hence, there was no longer a genuine issue to be
resolved by the court which necessitated trial. The appellate court sustained the
disallowance of the third-party complaint of ACDC against Becthel on the ground
that the transaction between the said parties did not arise out of the same
transaction on which MEC's claim was based.
Its motion for reconsideration of the decision having been denied, ACDC, now the
petitioner, filed the present Petition for Review on Certiorari, and raises the
following issues:
I. WHETHER OR NOT A THIRD-PARTY COMPLAINT IS PROPER; AND
Page
24
Furthermore, Section 1, Rule 34 of the Rules of Court provides that the Court may
render judgment on the pleadings, as follows:
Section 1. Judgment on the pleadings. - Where an answer fails to tender an issue,
or, otherwise, admits the material allegations of the adverse party's pleading, the
court may, on motion of that party, direct judgment on such pleading. However, in
actions for declaration of nullity or annulment of marriage or for legal separation,
the material facts alleged in the complaint shall always be proved.
The purpose of Section 11, Rule 6 of the Rules of Court is to permit a defendant to
assert an independent claim against a third-party which he, otherwise, would
assert in another action, thus preventing multiplicity of suits. All the rights of the
parties concerned would then be adjudicated in one proceeding. This is a rule of
procedure and does not create a substantial right. Neither does it abridge, enlarge,
or nullify the substantial rights of any litigant.15 This right to file a third-party
complaint against a third-party rests in the discretion of the trial court. The third-
A prerequisite to the exercise of such right is that some substantive basis for a
third-party claim be found to exist, whether the basis be one of indemnity,
subrogation, contribution or other substantive right.17 The bringing of a third-party
defendant is proper if he would be liable to the plaintiff or to the defendant or both
for all or part of the plaintiff's claim against the original defendant, although the
third-party defendant's liability arises out of another transaction.18 The defendant
may implead another as third-party defendant (a) on an allegation of liability of the
latter to the defendant for contribution, indemnity, subrogation or any other relief;
(b) on the ground of direct liability of the third-party defendant to the plaintiff; or (c)
the liability of the third-party defendant to both the plaintiff and the
defendant.19 There must be a causal connection between the claim of the plaintiff
in his complaint and a claim for contribution, indemnity or other relief of the
defendant against the third-party defendant. In Capayas v. Court of First
Instance,20 the Court made out the following tests: (1) whether it arises out of the
same transaction on which the plaintiff's claim is based; or whether the third-party
claim, although arising out of another or different contract or transaction, is
connected with the plaintiff's claim; (2) whether the third-party defendant would be
liable to the plaintiff or to the defendant for all or part of the plaintiff's claim against
the original defendant, although the third-party defendant's liability arises out of
another transaction; and (3) whether the third-party defendant may assert any
defenses which the third-party plaintiff has or may have to the plaintiff's claim.
The third-party complaint does not have to show with certainty that there will be
recovery against the third-party defendant, and it is sufficient that pleadings show
possibility of recovery.21 In determining the sufficiency of the third-party complaint,
the allegations in the original complaint and the third-party complaint must be
examined.22 A third-party complaint must allege facts which prima facieshow that
the defendant is entitled to contribution, indemnity, subrogation or other relief from
the third-party defendant.23
It bears stressing that common liability is the very essence for contribution.
Contribution is a payment made by each, or by any of several having a common
liability of his share in the damage suffered or in the money necessarily paid by
Page
party complaint is actually independent of, separate and distinct from the plaintiff's
complaint, such that were it not for the rule, it would have to be filed separately
from the original complaint.16
25
'In the words of private respondent, he "[s]eeks to transfer liability for the default
imputed against him by the petitioner to the proposed third-party defendants
because of their tortious acts which prevented him from performing his
obligations." Thus, if at the outset the issue appeared to be a simple maker's
liability on a promissory note, it became complex by the rendition of the aforestated
decision.28
In British Airways, the Court allowed the third-party complaint of British Airways
against its agent, the Philippine Airlines, on the plaintiff's complaint regarding his
luggage, considering that a contract of carriage was involved. The Court ruled,
thus:
Undeniably, for the loss of his luggage, Mahtani is entitled to damages from BA, in
view of their contract of carriage. Yet, BA adamantly disclaimed its liability and
instead imputed it to PAL which the latter naturally denies. In other words, BA and
PAL are blaming each other for the incident.
In resolving this issue, it is worth observing that the contract of air transportation
was exclusively between Mahtani and BA, the latter merely endorsing the Manila to
Hongkong leg of the former's journey to PAL, as its subcontractor or agent. In fact,
the fourth paragraph of the "Conditions of Contracts" of the ticket issued by BA to
Mahtani confirms that the contract was one of continuous air transportation from
Manila to Bombay.
"4. xxx carriage to be performed hereunder by several successive carriers is
regarded as a single operation."
Page
In Allied Banking Corporation, Joselito Yujuico obtained a loan from General Bank
and Trust Company. The Central Bank of the Philippines ordered the liquidation of
the Bank. In a Memorandum Agreement between the liquidation of the Bank and
Allied Banking Corporation, the latter acquired the receivables from Yujuico. Allied
Banking Corporation then sued Yujuico for the collection of his loan, and the latter
filed a third-party complaint against the Central Bank, alleging that by reason of its
tortious interference with the affairs of the General Bank and Trust Company, he
was prevented from performing his obligation under the loan. This Court allowed
the third-party complaint based on the claim of the defendant therein, thus:
26
Page
27
THIRD DIVISION
[G.R. NO. 181235 : July 22, 2009]
BANCO DE ORO-EPCI, INC. (formerly Equitable PCI Bank), Petitioner, v. JOHN
TANSIPEK,Respondent.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari assailing the Decision1 of the Court
of Appeals in CA-G.R. CV No. 69130 dated 18 August 2006 and the Resolution of
the same court dated 9 January 2008.
The facts of the case are as follows:
J. O. Construction, Inc. (JOCI), a domestic corporation engaged in the construction
business in Cebu City, filed a complaint against Philippine Commercial and
Industrial Bank (PCIB) in the Regional Trial Court (RTC) of Makati City docketed as
Civil Case No. 97-508. The Complaint alleges that JOCI entered into a contract
with Duty Free Philippines, Inc. for the construction of a Duty Free Shop in
Mandaue City. As actual construction went on, progress billings were made.
Payments were received by JOCI directly or through herein respondent John
Tansipek, its authorized collector. Payments received by respondent Tansipek were
PCIB filed a Motion to Dismiss the Complaint on the grounds that (1) an
indispensable party was not impleaded, and (2) therein plaintiff JOCI had no cause
of action against PCIB. The RTC denied PCIB's Motion to Dismiss.
PCIB filed its answer alleging as defenses that (1) JOCI had clothed Tansipek with
authority to act as its agent, and was therefore estopped from denying the same;
(2) JOCI had no cause of action against PCIB; (3) failure to implead Tansipek
rendered the proceedings taken after the filing of the complaint void; (4) PCIB's act
of accepting the deposit was fully justified by established bank practices; (5)
JOCI's claim was barred by laches; and (6) the damages alleged by JOCI were
hypothetical and speculative. PCIB incorporated in said Answer its counterclaims
for exemplary damages in the amount of P400,000.00, and litigation expenses and
attorney's fees in the amount ofP400,000.00.
PCIB likewise moved for leave for the court to admit the former's third-party
complaint against respondent Tansipek. The third-party complaint alleged that
respondent Tansipek was a depositor at its Wilson Branch, San Juan, Metro
Manila, where he maintained Account No. 5703-03538-3 in his name and/or that of
his wife, Anita. Respondent Tansipek had presented to PCIB a signed copy of the
Minutes of the meeting of the Board of Directors of JOCI stating the resolution that
Checks payable to J.O. Construction, Inc. may be deposited to Account No. 570303538-3 under the name of John and/or Anita Tansipek, maintained at PCIB,
Wilson Branch.2
Page
initially remitted to JOCI. However, payment through PNB Check No. 0000302572
in the amount of P4,050,136.51 was not turned over to JOCI. Instead, respondent
Tansipek endorsed said check and deposited the same to his account in PCIB,
Wilson Branch, Wilson Street, Greenhills, San Juan, Metro Manila. PCIB allowed
the said deposit, despite the fact that the check was crossed for the deposit to
payee's account only, and despite the alleged lack of authority of respondent
Tansipek to endorse said check. PCIB refused to pay JOCI the full amount of the
check despite demands made by the latter. JOCI prayed for the payment of the
amount of the check (P4,050,136.51), P500,000.00 in attorney's fees, P100,000.00
in expenses, P50,000.00 for costs of suit, and P500,000.00 in exemplary
damages.
28
On the third party complaint, third-party defendant John Tansipek is ordered to pay
the third-party plaintiff Philippine Commercial and Industrial Bank all amounts said
defendant/third-party plaintiff shall have to pay to the plaintiff on account of this
case.3
Respondent Tansipek appealed the Decision to the Court of Appeals. The case
was docketed as CA-G.R. CV No. 69130. Respondent Tansipek assigned the
following alleged errors:
a) The trial court's decision upholding the order of default and the consequent exparte reception of appellee's evidence was anchored on erroneous and baseless
conclusion that:
1) The original reglementary period to plead has already expired.
2) The ten day extended period to answer has likewise expired.
3) There is no need to pass upon a second motion to plead much less, any need
for a new motion for extended period to plead.
b) The trial court erred in utterly depriving the appellant of his day in court and in
depriving constitutional, substantive and procedural due process premised solely
on pure and simple technicality which never existed and are imaginary and illusory.
c) The trial court erred in ordering the third-party defendant-appellant John
Tansipek to pay the third party plaintiff-appellee PCIBank all amounts said bank
shall have to pay to the plaintiff-appellee by way of subrogation since appellant if
allowed to litigate in the trial court, would have obtained a favorable judgment as
he has good, valid and meritorious defenses.4
Page
29
A Motion to Lift Order of Default is different from an ordinary motion in that the
Motion should be verified; and must show fraud, accident, mistake or excusable
neglect, and meritorious defenses.7The allegations of (1) fraud, accident, mistake
or excusable neglect, and (2) of meritorious defenses must concur.8
Assuming for the sake of argument, however, that respondent Tansipek's Motion
for Reconsideration may be treated as a Motion to Lift Order of Default, his Petition
for Certiorari on the denial thereof has already been dismissed with finality by the
Court of Appeals. Respondent Tansipek did not appeal said ruling of the Court of
Appeals to this Court. The dismissal of the Petition for Certiorari assailing the
denial of respondent Tansipek's Motion constitutes a bar to the retrial of the same
issue of default under the doctrine of the law of the case.
Page
30
Respondent Tansipek counters that the doctrine of the law of the case is not
applicable, inasmuch as a Petition for Certiorari is not an appeal. Respondent
Tansipek further argues that the Doctrine of the Law of the Case applies only when
the appellate court renders a decision on the merits, and not when such appeal
was denied due to technicalities.
We are not persuaded.
In Buenviaje v. Court of Appeals,12 therein respondent Cottonway Marketing
Corporation filed a Petition for Certiorari with this Court assailing the Decision of
the National Labor Relations Commission (NLRC) ordering, inter alia, the
reinstatement of therein petitioners and the payment of backwages from the time
their salaries were withheld up to the time of actual reinstatement. The Petition
for Certiorari was dismissed by this Court. The subsequent Motion for
Reconsideration was likewise denied. However, the Labor Arbiter then issued an
Order limiting the amount of backwages that was due to petitioners. The NLRC
reversed this Order, but the Court of Appeals reinstated the same. This Court,
applying the Doctrine of the Law of the Case, held:
Page
The decision of the NLRC dated March 26, 1996 has become final and executory
upon the dismissal by this Court of Cottonway's petition for certiorari assailing said
decision and the denial of its motion for reconsideration. Said judgment may no
longer be disturbed or modified by any court or tribunal. It is a fundamental rule
that when a judgment becomes final and executory, it becomes immutable and
unalterable, and any amendment or alteration which substantially affects a final
and executory judgment is void, including the entire proceedings held for that
purpose. Once a judgment becomes final and executory, the prevailing party can
have it executed as a matter of right, and the issuance of a writ of execution
becomes a ministerial duty of the court. A decision that has attained finality
becomes the law of the case regardless of any claim that it is erroneous. The writ
of execution must therefore conform to the judgment to be executed and adhere
strictly to the very essential particulars.13 (Emphases supplied.)rbl
r l l lbrr
31
Page
32
DECISION
CORONA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1)
set aside the Resolution dated January 31, 2002 issued by the Special First
Division of the Sandiganbayan in Civil Case No. 0141 entitled Republic of the
Philippines v. Ferdinand E. Marcos, et. al., and (2) reinstate its earlier decision
dated September 19, 2000 which forfeited in favor of petitioner Republic of the
Philippines (Republic) the amount held in escrow in the Philippine National Bank
(PNB) in the aggregate amount of US$658,175,373.60 as of January 31,
2002.chanrob1es virtua1 1aw 1ibrary
BACKGROUND OF THE CASE
motion for summary judgment pertaining to the forfeiture of the US$356 million,
based on the following grounds:chanrob1es virtual 1aw library
Page
petitioner "obtained a judgment from the Swiss Federal Tribunal on December 21,
1990, that the Three Hundred Fifty-six Million U.S. dollars (US$356 million)
belongs in principle to the Republic of the Philippines provided certain
conditionalities are met. . . ." The said decision of the Swiss Federal Supreme
Court affirmed the decision of Zurich District Attorney Peter Consandey, granting
petitioners request for legal assistance. 7 Consandey declared the various
deposits in the name of the enumerated foundations to be of illegal provenance
and ordered that they be frozen to await the final verdict in favor of the parties
entitled to restitution.
33
I
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS
SUBJECT OF THE PETITION UNDER R.A. NO. 1379 ARE ADMITTED BY
RESPONDENTS IN THEIR PLEADINGS AND OTHER SUBMISSIONS MADE IN
THE COURSE OF THE PROCEEDING.
II
On October 18, 1996, petitioner filed a motion for summary judgment and/or
judgment on the pleadings. Respondent Mrs. Marcos filed her opposition thereto
which was later adopted by respondents Mrs. Manotoc, Mrs. Araneta and
Ferdinand, Jr.
In its resolution dated November 20, 1997, the Sandiganbayan denied petitioners
motion for summary judgment and/or judgment on the pleadings on the ground that
the motion to approve the compromise agreement" (took) precedence over the
motion for summary judgment."cralaw virtua1aw library
Petitioner contended that, after the pre-trial conference, certain facts were
established, warranting a summary judgment on the funds sought to be
forfeited.chanrob1es virtua1 1aw 1ibrary
Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was
not a party to the motion for approval of the Compromise Agreement and that she
owned 90% of the funds with the remaining 10% belonging to the Marcos estate.
Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich,
Switzerland, an additional request for the immediate transfer of the deposits to an
escrow account in the PNB. The request was granted. On appeal by the Marcoses,
the Swiss Federal Supreme Court, in a decision dated December 10, 1997, upheld
the ruling of the District Attorney of Zurich granting the request for the transfer of
the funds. In 1998, the funds were remitted to the Philippines in escrow.
Subsequently, respondent Marcos children moved that the funds be placed in
custodia legis because the deposit in escrow in the PNB was allegedly in danger of
dissipation by petitioner. The Sandiganbayan, in its resolution dated September 8,
1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial
order dated October 28, 1999 and January 21, 2000, respectively, the case was
set for trial. After several resettings, Petitioner, on March 10, 2000, filed another
Respondent Mrs. Marcos filed her opposition to the petitioners motion for
summary judgment, which opposition was later adopted by her co-respondents
Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
On March 24, 2000, a hearing on the motion for summary judgment was
conducted.
In a decision 9 dated September 19, 2000, the Sandiganbayan granted petitioners
motion for summary judgment:chanrob1es virtual 1aw library
CONCLUSION
There is no issue of fact which calls for the presentation of evidence.
The Motion for Summary Judgment is hereby granted.
The Swiss deposits which were transmitted to and now held in escrow at the PNB
are deemed unlawfully acquired as ill-gotten wealth.
Page
DISPOSITION
34
CONCLUSION
In sum, the evidence offered for summary judgment of the case did not prove that
the money in the Swiss Banks belonged to the Marcos spouses because no legal
proof exists in the record as to the ownership by the Marcoses of the funds in
escrow from the Swiss Banks.
The basis for the forfeiture in favor of the government cannot be deemed to have
been established and our judgment thereon, perforce, must also have been without
basis.
WHEREFORE, the decision of this Court dated September 19, 2000 is
reconsidered and set aside, and this case is now being set for further proceedings.
12
Hence, the instant petition. In filing the same, petitioner argues that the
Sandiganbayan, in reversing its September 19, 2000 decision, committed grave
abuse of discretion amounting to lack or excess of jurisdiction considering that
I
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE
III
THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.
IV
THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF
DISCRETION IN REVERSING HIMSELF ON THE GROUND THAT ORIGINAL
COPIES OF THE AUTHENTICATED SWISS DECISIONS AND THEIR
"AUTHENTICATED TRANSLATIONS" HAVE NOT BEEN SUBMITTED TO THE
COURT, WHEN EARLIER THE SANDIGANBAYAN HAS QUOTED EXTENSIVELY
A PORTION OF THE TRANSLATION OF ONE OF THESE SWISS DECISIONS IN
HIS PONENCIA DATED JULY 29, 1999 WHEN IT DENIED THE MOTION TO
RELEASE ONE HUNDRED FIFTY MILLION US DOLLARS ($150,000,000.00) TO
THE HUMAN RIGHTS VICTIMS.
V
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR
OBJECTION TO THE AUTHENTICITY OF THE SWISS FEDERAL SUPREME
COURT DECISIONS. 13
Petitioner, in the main, asserts that nowhere in the respondents motions for
reconsideration and supplemental motion for reconsideration were the authenticity,
accuracy and admissibility of the Swiss decisions ever challenged. Otherwise
stated, it was incorrect for the Sandiganbayan to use the issue of lack of
authenticated translations of the decisions of the Swiss Federal Supreme Court as
the basis for reversing itself because respondents themselves never raised this
issue in their motions for reconsideration and supplemental motion for
reconsideration. Furthermore, this particular issue relating to the translation of the
Swiss court decisions could not be resurrected anymore because said decisions
had been previously utilized by the Sandiganbayan itself in resolving a "decisive
issue" before it.
Petitioner faults the Sandiganbayan for questioning the non-production of the
authenticated translations of the Swiss Federal Supreme Court decisions as this
Page
35
(2) By its positive acts and express admissions prior to filing the Motion for
Summary Judgment on 10 March 1990, petitioner had legally bound itself to go to
trial on the basis of existing issues. Thus, it clearly waived whatever right it had to
move for summary judgment.
Page
(1) The Motion for Summary Judgment was based on private respondents Answer
and other documents that had long been in the records of the case. Thus, by the
time the Motion was filed on 10 March 2000, estoppel by laches had already set in
against petitioner.
36
(B)
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM
FILING THE MOTION FOR SUMMARY JUDGMENT, THE SANDIGANBAYAN IS
CORRECT IN RULING THAT PETITIONER HAS NOT YET ESTABLISHED A
PRIMA FACIE CASE FOR THE FORFEITURE OF THE SWISS FUNDS.
(1) Republic Act No. 1379, the applicable law, is a penal statute. As such, its
provisions, particularly the essential elements stated in section 3 thereof, are
mandatory in nature. These should be strictly construed against petitioner and
liberally in favor of private respondents.
(2) Petitioner has failed to establish the third and fourth essential elements in
Section 3 of R.A. 1379 with respect to the identification, ownership, and
approximate amount of the property which the Marcos couple allegedly "acquired
during their incumbency" .
(a) Petitioner has failed to prove that the Marcos couple "acquired" or own the
Swiss funds.
(b) Even assuming, for the sake of argument, that the fact of acquisition has been
proven, petitioner has categorically admitted that it has no evidence showing how
much of the Swiss funds was acquired "during the incumbency" of the Marcos
couple from 31 December 1965 to 25 February 1986.
(3) In contravention of the essential element stated in Section 3 (e) of R.A. 1379,
petitioner has failed to establish the other proper earnings and income from
legitimately acquired property of the Marcos couple over and above their
government salaries.
(4) Since petitioner failed to prove the three essential elements provided in
paragraphs (c) 15 (d) 16 and (e) 17 of Section 3, R.A. 1379, the inescapable
conclusion is that the prima facie presumption of unlawful acquisition of the Swiss
(1) Under Section 27, Rule 130 of the Rules of Court, the General and
Supplemental Agreements, as well as the other written and testimonial statements
submitted in relation thereto, are expressly barred from being admissible in
evidence against private respondents.
(2) Had petitioner bothered to weigh the alleged admissions together with the other
statements on record, there would be a demonstrable showing that no such
judicial admissions were made by private respondents.
(D)
SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL
ELEMENTS TO ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE, AND
PRIVATE RESPONDENTS HAVE NOT MADE ANY JUDICIAL ADMISSION THAT
WOULD HAVE FREED IT FROM ITS BURDEN OF PROOF, THE
SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF DISCRETION IN
DENYING THE MOTION FOR SUMMARY JUDGMENT. CERTIORARI,
THEREFORE, DOES NOT LIE, ESPECIALLY AS THIS COURT IS NOT A TRIER
OF FACTS. 18
For her part, Mrs. Araneta, in her comment to the petition, claims that obviously
petitioner is unable to comply with a very plain requirement of respondent
Sandiganbayan. The instant petition is allegedly an attempt to elevate to this Court
matters, issues and incidents which should be properly threshed out at the
Sandiganbayan. To respondent Mrs. Araneta, all other matters, save that
pertaining to the authentication of the translated Swiss Court decisions, are
irrelevant and impertinent as far as this Court is concerned. Respondent Mrs.
Araneta manifests that she is as eager as respondent Sandiganbayan or any
interested person to have the Swiss Court decisions officially translated in our
known language. She says the authenticated official English version of the Swiss
Court decisions should be presented. This should stop all speculations on what
indeed is contained therein. Thus, respondent Mrs. Araneta prays that the petition
PROPRIETY OF PETITIONERS
ACTION FOR CERTIORARI
But before this Court discusses the more relevant issues, the question regarding
the propriety of petitioner Republics action for certiorari under Rule 65 19 of the
1997 Rules of Civil Procedure assailing the Sandiganbayan Resolution dated
January 21, 2002 should be threshed out.
Page
be denied for lack of merit and for raising matters which, in elaborated fashion, are
impertinent and improper before this Court.chanrob1es virtua1 1aw 1ibrary
37
At the outset, we would like to stress that we are treating this case as an exception
to the general rule governing petitions for certiorari. Normally, decisions of the
Sandiganbayan are brought before this Court under Rule 45, not Rule 65. 20 But
where the case is undeniably ingrained with immense public interest, public policy
and deep historical repercussions, certiorari is allowed notwithstanding the
existence and availability of the remedy of appeal. 21
One of the foremost concerns of the Aquino Government in February 1986 was the
recovery of the unexplained or ill-gotten wealth reputedly amassed by former
President and Mrs. Ferdinand E. Marcos, their relatives, friends and business
associates. Thus, the very first Executive Order (EO) issued by then President
Corazon Aquino upon her assumption to office after the ouster of the Marcoses
was EO No. 1, issued on February 28, 1986. It created the Presidential
Commission on Good Government (PCGG) and charged it with the task of
assisting the President in the "recovery of all ill-gotten wealth accumulated by
former President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates, whether located in the Philippines or abroad,
including the takeover or sequestration of all business enterprises and entities
owned or controlled by them during his administration, directly or through
nominees, by taking undue advantage of their public office and/or using their
powers, authority, influence, connections or relationship." The urgency of this
undertaking was tersely described by this Court in Republic v. Lobregat
22 :chanrob1es virtual 1aw library
surely . . . an enterprise "of great pith and moment" ; it was attended by "great
expectations" ; it was initiated not only out of considerations of simple justice but
also out of sheer necessity the national coffers were empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit
to set aside technicalities and formalities that merely serve to delay or impede
judicious resolution. This Court prefers to have such cases resolved on the merits
The crucial issues which this Court must resolve are: (1) whether or not
respondents raised any genuine issue of fact which would either justify or negate
summary judgment; and (2) whether or not petitioner Republic was able to prove
its case for forfeiture in accordance with Sections 2 and 3 of RA 1379.
We hold that respondent Marcoses failed to raise any genuine issue of fact in their
pleadings. Thus, on motion of petitioner Republic, summary judgment should take
place as a matter of right.
In the early case of Auman v. Estenzo 24 , summary judgment was described as a
judgment which a court may render before trial but after both parties have pleaded.
It is ordered by the court upon application by one party, supported by affidavits,
depositions or other documents, with notice upon the adverse party who may in
turn file an opposition supported also by affidavits, depositions or other documents.
This is after the court summarily hears both parties with their respective proofs and
finds that there is no genuine issue between them. Summary judgment is
sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure:chanrob1es virtual 1aw library
SECTION 1. Summary judgment for claimant. A party seeking to recover upon a
claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time
after the pleading in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor upon all
or any part thereof.25cralaw:red
Summary judgment is proper when there is clearly no genuine issue as to any
material fact in the action. 26 The theory of summary judgment is that, although an
The Solicitor General made a very thorough presentation of its case for
forfeiture:chanrob1es virtual 1aw library
Page
answer may on its face appear to tender issues requiring trial, if it is demonstrated
by affidavits, depositions or admissions that those issues are not genuine but sham
or fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner Republic.
38
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady
who ruled with FM during the 14-year martial law regime, occupied the position of
Minister of Human Settlements from June 1976 up to the peaceful revolution in
February 22-25, 1986. She likewise served once as a member of the Interim
Batasang Pambansa during the early years of martial law from 1978 to 1984 and
as Metro Manila Governor in concurrent capacity as Minister of Human
Settlements. . . .
11. At the outset, however, it must be pointed out that based on the Official Report
of the Minister of Budget, the total salaries of former President Marcos as
President from 1966 to 1976 was P60,000 a year and from 1977 to 1985,
P100,000 a year; while that of the former First Lady, Imelda R. Marcos, as Minister
of Human Settlements from June 1976 to February 22-25, 1986 was P75,000 a
year. . . .
ANALYSIS OF RESPONDENTS
LEGITIMATE INCOME
12. Based on available documents, the ITRs of the Marcoses for the years 1965-
15. FMs official salary pertains to his compensation as Senate President in 1965
in the amount of P15,935.00 and P1,420,000.00 as President of the Philippines
during the period 1966 until 1984. On the other hand, Imelda reported salaries and
allowances only for the years 1979 to 1984 in the amount of P1,191,646.00. The
16. Of the P11,109,836.00 in reported income from legal practice, the amount of
P10,649,836.00 or 96% represents "receivables from prior years" during the period
1967 up to 1984.
17. In the guise of reporting income using the cash method under Section 38 of the
National Internal Revenue Code, FM made it appear that he had an extremely
profitable legal practice before he became a President (FM being barred by law
from practicing his law profession during his entire presidency) and that, incredibly,
he was still receiving payments almost 20 years after. The only problem is that in
his Balance Sheet attached to his 1965 ITR immediately preceding his ascendancy
to the presidency he did not show any Receivables from client at all, much less the
P10,65-M that he decided to later recognize as income. There are no documents
showing any withholding tax certificates. Likewise, there is nothing on record that
will show any known Marcos client as he has no known law office. As previously
stated, his networth was a mere P120,000.00 in December, 1965. The joint income
tax returns of FM and Imelda cannot, therefore, conceal the skeletons of their
kleptocracy.
18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to
1976 which he referred to in his return as "Miscellaneous Items" and "Various
Corporations." There is no indication of any payor of the dividends or earnings.
19. Spouses Ferdinand and Imelda did not declare any income from any deposits
and placements which are subject to a 5% withholding tax. The Bureau of Internal
Revenue attested that after a diligent search of pertinent records on file with the
Records Division, they did not find any records involving the tax transactions of
spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio City, Revenue
Region No. 4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No.
8, Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further,
BIR attested that no records were found on any filing of capital gains tax return
involving spouses FM and Imelda covering the years 1960 to 1965.
Page
records indicate that the reported income came from her salary from the Ministry of
Human Settlements and allowances from Food Terminal, Inc., National Home
Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit
Authority and Home Development Mutual Fund.
39
FOUNDATION ACCOUNTS
24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo
Bertheau, legal counsel of Schweizeresche Kreditanstalt or SKA, also known as
Swiss Credit Bank, for him to establish the AZIO Foundation. On the same date,
Page
40
FOUNDATION ACCOUNTS
31. This is the most intricate and complicated account group. As the Flow Chart
hereof shows, two (2) groups under the foundation organized by Marcos
dummies/nominees for FMs benefit, eventually joined together and became one
(1) account group under the AVERTINA FOUNDATION for the benefit of both FM
and Imelda. This is the biggest group from where the $50-M investment fund of the
Marcoses was drawn when they bought the Central Banks dollar-denominated
treasury notes with high-yielding interests.
32. On March 20, 1968, after his second year in the presidency, Marcos opened
bank accounts with SKA using an alias or pseudonym WILLIAM SAUNDERS,
apparently to hide his true identity. The next day, March 21, 1968, his First Lady,
Mrs. Imelda Marcos also opened her own bank accounts with the same bank using
an American-sounding alias, JANE RYAN. Found among the voluminous
documents in Malacaang shortly after they fled to Hawaii in haste that fateful
night of February 25, 1986, were accomplished forms for "Declaration/Specimen
Signatures" submitted by the Marcos couple. Under the caption "signature(s)"
Ferdinand and Imelda signed their real names as well as their respective aliases
underneath. These accounts were actively operated and maintained by the
Marcoses for about two (2) years until their closure sometime in February, 1970
and the balances transferred to XANDY FOUNDATION.
33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W.
Fessler, C. Souviron and E. Scheller were named as members of the Board of
Trustees.
34. FM and Imelda issued the written mandate to establish the foundation to
Markus Geel of SKA on March 3, 1970. In the handwritten Regulations signed by
the Marcos couple as well as in the type-written Regulations signed by Markus
Geel both dated February 13, 1970, the Marcos spouses were named the first
beneficiaries, the surviving spouse as the second beneficiary and the Marcos
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41
42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W.
Fessler and E. Scheller of SKA and Dr. Otto Tondury as the foundations directors.
Imelda issued a written mandate to establish the foundation to Markus Geel on
August 26, 1970. The regulations as well as the agreement, both dated August 28,
1970 were likewise signed by Imelda. Imelda was named the first beneficiary and
her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as
equal second beneficiaries.
43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler,
Scheller and Ritter as members of the board of directors. Imelda issued a written
mandate to Dr. Theo Bertheau to establish the foundation with a note that the
44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr.
Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust Co, as
members of the Foundations Board of Directors. The account was officially
opened with the SKA on September 10, 1981. The beneficial owner was not made
known to the bank since Fides Trust Co. acted as fiduciary. However, when one
compares the listing of securities in the safe deposit register of Trinidad Foundation
as of December 31,1980 with that of the Palmy Foundation as of December 31,
1980, one can clearly see that practically the same securities were listed. Under
the circumstances, it is certain that the Palmy Foundation is the beneficial
successor of the Trinidad Foundation.
45. As of December 31, 1989, the ending balance of the bank accounts of Palmy
Foundation under General Account No. 391528 is $17,214,432.00.
46. Latest documents received from Swiss Authorities included a declaration
signed by Dr. Ivo Beck stating that the beneficial owner of Palmy Foundation is
Imelda. Another document signed by Raber shows that the said Palmy Foundation
is owned by Marcos Familie.
K. ROSALYS-AGUAMINA
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42
FOUNDATION ACCOUNTS
47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its
Articles of Incorporation was executed on September 24, 1971 and its By-Laws on
October 3, 1971. This foundation maintained several accounts with Swiss Bank
Corporation (SBC) under the general account 51960 where most of the bribe
monies from Japanese suppliers were hidden.
48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets
53. All the five (5) group accounts in the over-all flow chart have a total balance of
about Three Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by
Annex "R-5" hereto attached as integral part hereof.
x
x. 27
Page
52. As of June 6, 1991, the ending balance of Maler Foundations Account Nos.
254,508 BT and 98,929 NY amount SF 9,083,567 and SG 16,195,258,
respectively, for a total of SF 25,278,825.00. GM only until December 31, 1980.
This account was opened by Maler when it was still an establishment which was
subsequently transformed into a foundation.
43
Page
44
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of
the Petition for lack of knowledge or information sufficient to form a belief as to the
truth of the allegation since Respondents were not privy to the transactions
regarding the alleged Azio-Verso-Vibur Foundation accounts, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved
were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39,
40, and 41 of the Petition for lack of knowledge or information sufficient to form a
belief as to the truth of the allegations since Respondents are not privy to the
transactions and as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved
were lawfully acquired.
(c) Opposition to Motion for Summary Judgment dated March 21, 2000, filed by
Mrs. Marcos which the other respondents (Marcos children) adopted;
25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the
Petition for lack of knowledge or information sufficient to form a belief as to the
truth of the allegations since Respondents were not privy to the transactions and
as to such transaction they were privy to they cannot remember with exactitude the
same having occurred a long time ago, except that as to Respondent Imelda R.
Marcos she specifically remembers that the funds involved were lawfully acquired.
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial
Brief dated October 19, 1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc
adopting the pre-trial brief of Mrs. Marcos, and Manifestation dated October 19,
1999 of Irene Marcos-Araneta adopting the pre-trial briefs of her co- respondents;
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by
the Marcos children;
(e) Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos;
Motion for Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and
Ferdinand, Jr., and Supplemental Motion for Reconsideration dated October 9,
2000 likewise jointly filed by Mrs. Manotoc and Ferdinand, Jr.;
(f) Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum
dated December 17, 2000 of the Marcos children;
(g) Manifestation dated May 26, 1998; and
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition
for lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since Respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same
having occurred a long time ago, except that as to Respondent Imelda R. Marcos
she specifically remembers that the funds involved were lawfully acquired.
Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos
and the Marcos children indubitably failed to tender genuine issues in their answer
to the petition for forfeiture. A genuine issue is an issue of fact which calls for the
presentation of evidence as distinguished from an issue which is fictitious and
contrived, set up in bad faith or patently lacking in substance so as not to constitute
Page
45
In the instant case, the material allegations in paragraph 23 of the said petition
were not specifically denied by respondents in paragraph 22 of their answer. The
denial contained in paragraph 22 of the answer was focused on the averment in
paragraph 23 of the petition for forfeiture that "Respondents clandestinely stashed
the countrys wealth in Switzerland and hid the same under layers and layers of
foundations and corporate entities." Paragraph 22 of the respondents answer was
thus a denial pregnant with admissions of the following substantial
facts:chanrob1es virtual 1aw library
(1) that the Swiss bank deposits existed and
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46
(2) that the estimated sum thereof was US$356 million as of December, 1990.
Therefore, the allegations in the petition for forfeiture on the existence of the Swiss
bank deposits in the sum of about US$356 million, not having been specifically
denied by respondents in their answer, were deemed admitted by them pursuant to
Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure:chanrob1es
virtual 1aw library
Material averment in the complaint, . . . shall be deemed admitted when not
specifically denied. . . . 36
By the same token, the following unsupported denials of respondents in their
answer were pregnant with admissions of the substantial facts alleged in the
Republics petition for forfeiture:chanrob1es virtual 1aw library
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of
the Petition for lack of knowledge or information sufficient to form a belief as to the
truth of the allegation since respondents were not privy to the transactions
regarding the alleged Azio-Verso-Vibur Foundation accounts, except that, as to
respondent Imelda R. Marcos, she specifically remembers that the funds involved
were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39,
40, 41 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegations since respondents were not privy to the
It is worthy to note that the pertinent documents attached to the petition for
forfeiture were even signed personally by respondent Mrs. Marcos and her late
husband, Ferdinand E. Marcos, indicating that said documents were within their
knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz,
Jr. in his dissenting opinion:chanrob1es virtual 1aw library
The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3)
approving regulations of the Foundations for the distribution of capital and income
of the Foundations to the First and Second beneficiary (who are no other than FM
and his family), 4) opening of bank accounts for the Foundations, 5) changing the
names of the Foundations, 6) transferring funds and assets of the Foundations to
other Foundations or Fides Trust, 7) liquidation of the Foundations as
substantiated by the Annexes U to U-168, Petition [for forfeiture] strongly indicate
that FM and/or Imelda were the real owners of the assets deposited in the Swiss
banks, using the Foundations as dummies. 43
How could respondents therefore claim lack of sufficient knowledge or information
regarding the existence of the Swiss bank deposits and the creation of five groups
of accounts when Mrs. Marcos and her late husband personally masterminded and
participated in the formation and control of said foundations? This is a fact
respondent Marcoses were never able to explain.
Not only that. Respondents answer also technically admitted the genuineness and
due execution of the Income Tax Returns (ITRs) and the balance sheets of the late
Ferdinand E. Marcos and Imelda R. Marcos attached to the petition for forfeiture,
as well as the veracity of the contents thereof.
The answer again premised its denials of said ITRs and balance sheets on the
ground of lack of knowledge or information sufficient to form a belief as to the truth
of the contents thereof. Petitioner correctly points out that respondents denial was
not really grounded on lack of knowledge or information sufficient to form a belief
but was based on lack of recollection. By reviewing their own records, respondent
Marcoses could have easily determined the genuineness and due execution of the
ITRs and the balance sheets. They also had the means and opportunity of
verifying the same from the records of the BIR and the Office of the President.
They did not.
When matters regarding which respondents claim to have no knowledge or
information sufficient to form a belief are plainly and necessarily within their
knowledge, their alleged ignorance or lack of information will not be considered a
Page
signatures on some of the vital documents 41 attached to the petition for forfeiture
which Mrs. Marcos failed to specifically deny as required by the rules. 42
47
(f) the number and names of the witnesses, and the substance of their respective
testimonies. 49
It is unquestionably within the courts power to require the parties to submit their
pre-trial briefs and to state the number of witnesses intended to be called to the
stand, and a brief summary of the evidence each of them is expected to give as
well as to disclose the number of documents to be submitted with a description of
the nature of each. The tenor and character of the testimony of the witnesses and
of the documents to be deduced at the trial thus made known, in addition to the
particular issues of fact and law, it becomes apparent if genuine issues are being
put forward necessitating the holding of a trial. Likewise, the parties are obliged not
only to make a formal identification and specification of the issues and their proofs,
and to put these matters in writing and submit them to the court within the specified
period for the prompt disposition of the action. 50
The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos
children, merely stated:chanrob1es virtual 1aw library
x
5.1 Respondent Imelda reserves the right to present and introduce in evidence
documents as may be necessary in the course of the trial.
Mrs. Marcos did not enumerate and describe the documents constituting her
evidence. Neither the names of witnesses nor the nature of their testimony was
stated. What alone appeared certain was the testimony of Mrs. Marcos only who in
fact had previously claimed ignorance and lack of knowledge. And even then, the
substance of her testimony, as required by the rules, was not made known either.
Such cunning tactics of respondents are totally unacceptable to this Court. We
hold that, since no genuine issue was raised, the case became ripe for summary
judgment.
Opposition to Motion for Summary Judgment dated March 21, 2000
The opposition filed by Mrs. Marcos to the motion for summary judgment dated
March 21, 2000 of petitioner Republic was merely adopted by the Marcos children
as their own opposition to the said motion. However, it was again not accompanied
by affidavits, depositions or admissions as required by Section 3, Rule 35 of the
1997 Rules on Civil Procedure:chanrob1es virtual 1aw library
. . . The adverse party may serve opposing affidavits, depositions, or admissions at
least three (3) days before hearing. After hearing, the judgment sought shall be
rendered forthwith if the pleadings, supporting affidavits, depositions, and
admissions on file, show that, except as to the amount of damages, there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law. 51
The absence of opposing affidavits, depositions and admissions to contradict the
sworn declarations in the Republics motion only demonstrated that the averments
of such opposition were not genuine and therefore unworthy of belief.
Demurrer to Evidence dated May 2, 2000; 52 Motions for Reconsideration; 53
and Memoranda of Mrs. Marcos and the Marcos Children 54
WITNESSES
4.1 Respondent Imelda will present herself as a witness and reserves the right to
present additional witnesses as may be necessary in the course of the trial.
x
DOCUMENTARY EVIDENCE
Page
48
All these pleadings again contained no allegations of facts showing their lawful
acquisition of the funds. Once more, respondents merely made general denials
without alleging facts which would have been admissible in evidence at the
hearing, thereby failing to raise genuine issues of fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the
pre-trial, her counsel stated that his client was just a beneficiary of the funds,
contrary to petitioner Republics allegation that Mrs. Marcos disclaimed ownership
of or interest in the funds.
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49
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before
this Honorable Court, most respectfully manifests:chanrob1es virtual 1aw library
That in fact only 10% of the subject matter in the above-entitled case belongs to
the estate of the late President Ferdinand E. Marcos.
But, as already pointed out, during the pre-trial conference, respondent Marcoses
denied knowledge as well as ownership of the Swiss funds.
Anyway we look at it, respondent Marcoses have put forth no real defense. The
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50
Under the rule, the plaintiff can move for summary judgment "at any time after the
pleading in answer thereto (i.e., in answer to the claim, counterclaim or crossclaim) has been served." No fixed reglementary period is provided by the Rules.
How else does one construe the phrase "any time after the answer has been
served?"
This issue is actually one of first impression. No local jurisprudence or authoritative
work has touched upon this matter. This being so, an examination of foreign laws
and jurisprudence, particularly those of the United States where many of our laws
and rules were copied, is in order.
Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to
recover upon a claim, counterclaim or cross-claim may move for summary
judgment at any time after the expiration of 20 days from the commencement of
the action or after service of a motion for summary judgment by the adverse party,
and that a party against whom a claim, counterclaim or cross-claim is asserted
may move for summary judgment at any time.
However, some rules, particularly Rule 113 of the Rules of Civil Practice of New
York, specifically provide that a motion for summary judgment may not be made
until issues have been joined, that is, only after an answer has been served. 62
Under said rule, after issues have been joined, the motion for summary judgment
may be made at any stage of the litigation. 63 No fixed prescriptive period is
provided.
Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that
a motion for summary judgment may not be made until issues have been joined,
meaning, the plaintiff has to wait for the answer before he can move for summary
judgment. 64 And like the New York rules, ours do not provide for a fixed
reglementary period within which to move for summary judgment.
This being so, the New York Supreme Courts interpretation of Rule 113 of the
Rules of Civil Practice can be applied by analogy to the interpretation of Section 1,
Rule 35, of our 1997 Rules of Civil Procedure.
Under the New York rule, after the issues have been joined, the motion for
summary judgment may be made at any stage of the litigation. And what exactly
does the phrase "at any stage of the litigation" mean? In Ecker v. Muzysh, 65 the
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51
In cases with political undertones like the one at bar, adverse parties will often do
almost anything to delay the proceedings in the hope that a future administration
sympathetic to them might be able to influence the outcome of the case in their
favor. This is rank injustice we cannot tolerate.
The law looks with disfavor on long, protracted and expensive litigation and
encourages the speedy and prompt disposition of cases. That is why the law and
the rules provide for a number of devices to ensure the speedy disposition of
cases. Summary judgment is one of them.
Faithful therefore to the spirit of the law on summary judgment which seeks to
avoid unnecessary expense and loss of time in a trial, we hereby rule that
petitioner Republic could validly move for summary judgment any time after the
respondents answer was filed or, for that matter, at any subsequent stage of the
litigation. The fact that petitioner agreed to proceed to trial did not in any way
prevent it from moving for summary judgment, as indeed no genuine issue of fact
was ever validly raised by respondent Marcoses.
This interpretation conforms with the guiding principle enshrined in Section 6, Rule
1 of the 1997 Rules of Civil Procedure that the" [r]ules should be liberally
construed in order to promote their objective of securing a just, speedy and
inexpensive disposition of every action and proceeding." 69
Respondents further allege that the motion for summary judgment was based on
respondents answer and other documents that had long been in the records of the
case. Thus, by the time the motion was filed on March 10, 2000, estoppel by
laches had already set in against petitioner.
Page
served" in Section 1, Rule 35 of our Rules of Civil Procedure means "at any stage
of the litigation." Whenever it becomes evident at any stage of the litigation that no
triable issue exists, or that the defenses raised by the defendant(s) are sham or
frivolous, plaintiff may move for summary judgment. A contrary interpretation would
go against the very objective of the Rule on Summary Judgment which is to "weed
out sham claims or defenses thereby avoiding the expense and loss of time
involved in a trial." 68
52
The matter of summary judgment having been thus settled, the issue of whether or
not petitioner Republic was able to prove its case for forfeiture in accordance with
the requisites of Sections 2 and 3 of RA 1379 now takes center stage.
The law raises the prima facie presumption that a property is unlawfully acquired,
hence subject to forfeiture, if its amount or value is manifestly disproportionate to
Page
the official salary and other lawful income of the public officer who owns it. Hence,
Sections 2 and 6 of RA 1379 76 provide:chanrob1es virtual 1aw library
53
P1,570,00
Imelda R. Marcos, as Minister
June 1976-1985 at P75,000/year P718,000
In addition to their accumulated salaries from 1966 to 1985 are the Marcos
couples combined salaries from January to February 1986 in the amount of
P30,833.33. Hence, their total accumulated salaries amounted to P2,319,583.33.
Converted to U.S. dollars on the basis of the corresponding peso-dollar exchange
rates prevailing during the applicable period when said salaries were received, the
total amount had an equivalent value of $304,372.43.chanrob1es virtua1 1aw
1ibrary
The dollar equivalent was arrived at by using the official annual rates of exchange
of the Philippine peso and the US dollar from 1965 to 1985 as well as the official
monthly rates of exchange in January and February 1986 issued by the Center for
Statistical Information of the Bangko Sentral ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of
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54
In their answer, aside from admitting the existence of the subject funds,
respondents likewise admitted ownership thereof. Paragraph 22 of respondents
answer stated:chanrob1es virtual 1aw library
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that
respondents clandestinely stashed the countrys wealth in Switzerland and hid the
same under layers and layers of foundations and corporate entities for being false,
the truth being that respondents aforesaid properties were lawfully acquired.
(Emphasis supplied)
By qualifying their acquisition of the Swiss bank deposits as lawful, respondents
unwittingly admitted their ownership thereof.chanrob1es virtua1 law library
Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by
failing to deny under oath the genuineness and due execution of certain actionable
documents bearing her signature attached to the petition. As discussed earlier,
Section 11, Rule 8 86 of the 1997 Rules of Civil Procedure provides that material
averments in the complaint shall be deemed admitted when not specifically denied.
The General 87 and Supplemental 88 Agreements executed by petitioner and
respondents on December 28, 1993 further bolstered the claim of petitioner
Republic that its case for forfeiture was proven in accordance with the requisites of
Sections 2 and 3 of RA 1379. The whereas clause in the General Agreement
declared that:chanrob1es virtual 1aw library
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal
Tribunal on December 21, 1990, that the $356 million belongs in principle to the
Republic of the Philippines provided certain conditionalities are met, but even after
7 years, the FIRST PARTY has not been able to procure a final judgment of
conviction against the PRIVATE PARTY.
While the Supplemental Agreement warranted, inter alia, that:chanrob1es virtual
1aw library
In consideration of the foregoing, the parties hereby agree that the PRIVATE
PARTY shall be entitled to the equivalent of 25% of the amount that may be
eventually withdrawn from said $356 million Swiss deposits.
The stipulations set forth in the General and Supplemental Agreements undeniably
indicated the manifest intent of respondents to enter into a compromise with
petitioner. Corollarily, respondents willingness to agree to an amicable settlement
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Swiss funds.
55
Page
motion for the approval of the Compromise Agreement on April 29, 1998 also lent
credence to the allegations of petitioner Republic that respondents admitted
ownership of the Swiss bank accounts. We quote the salient portions of Ferdinand
Jr.s formal declarations in open court:chanrob1es virtual 1aw library
56
Respondents ownership of the Swiss bank accounts as borne out by Mrs. Marcos
manifestation is as bright as sunlight. And her claim that she is merely a
beneficiary of the Swiss deposits is belied by her own signatures on the appended
copies of the documents substantiating her ownership of the funds in the name of
the foundations. As already mentioned, she failed to specifically deny under oath
the authenticity of such documents, especially those involving "William Saunders"
and "Jane Ryan" which actually referred to Ferdinand Marcos and Imelda Marcos,
respectively. That failure of Imelda Marcos to specifically deny the existence, much
less the genuineness and due execution, of the instruments bearing her signature,
was tantamount to a judicial admission of the genuineness and due execution of
said instruments, in accordance with Section 8, Rule 8 100 of the 1997 Rules of
Civil Procedure.
Likewise, in her Constancia 101 dated May 6, 1999, Imelda Marcos prayed for the
approval of the Compromise Agreement and the subsequent release and transfer
of the $150 million to the rightful owner. She further made the following
manifestations:chanrob1es virtual 1aw library
x
Page
57
2. The Republics cause of action over the full amount is its forfeiture in favor of the
government if found to be ill-gotten. On the other hand, the Marcoses defend that it
is a legitimate asset. Therefore, both parties have an inchoate right of ownership
over the account. If it turns out that the account is of lawful origin, the Republic
may yield to the Marcoses. Conversely, the Marcoses must yield to the Republic.
(Emphasis supplied)
x
3. Consistent with the foregoing, and the Marcoses having committed themselves
to helping the less fortunate, in the interest of peace, reconciliation and unity,
defendant MADAM IMELDA ROMUALDEZ MARCOS, in firm abidance thereby,
hereby affirms her agreement with the Republic for the release and transfer of the
US Dollar 150 million for proper disposition, without prejudice to the final outcome
of the litigation respecting the ownership of the remainder.
Again, the above statements were indicative of Imeldas admission of the
Marcoses ownership of the Swiss deposits as in fact "the Marcoses defend that it
(Swiss deposits) is a legitimate (Marcos) asset."cralaw virtua1aw library
On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand
Marcos, Jr. and Maria Irene Marcos-Araneta filed a motion 102 on May 4, 1998
asking the Sandiganbayan to place the res (Swiss deposits) in custodia
legis:chanrob1es virtual 1aw library
7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid
Swiss deposits are placed in custodia legis or within the Courts protective mantle,
its dissipation or misappropriation by the petitioner looms as a distinct possibility.
Such display of deep, personal interest can only come from someone who believes
that he has a marked and intimate right over the considerable dollar deposits.
Truly, by filing said motion, the Marcos children revealed their ownership of the
said deposits.
Lastly, the Undertaking 103 entered into by the PCGG, the PNB and the Marcos
foundations on February 10, 1999, confirmed the Marcoses ownership of the
Swiss bank deposits. The subject Undertaking brought to light their readiness to
pay the human rights victims out of the funds held in escrow in the PNB. It
stated:chanrob1es virtual 1aw library
WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its
rights and interests over said US$150 million to the aforementioned human rights
victims-plaintiffs.
All told, the foregoing disquisition negates the claim of respondents that "petitioner
failed to prove that they acquired or own the Swiss funds and that "it was only by
arbitrarily isolating and taking certain statements made by private respondents out
of context that petitioner was able to treat these as judicial admissions." The Court
is fully aware of the relevance, materiality and implications of every pleading and
document submitted in this case. This Court carefully scrutinized the proofs
presented by the parties. We analyzed, assessed and weighed them to ascertain if
each piece of evidence rightfully qualified as an admission. Owing to the farreaching historical and political implications of this case, we considered and
examined, individually and totally, the evidence of the parties, even if it might have
bordered on factual adjudication which, by authority of the rules and jurisprudence,
is not usually done by this Court. There is no doubt in our mind that respondent
Marcoses admitted ownership of the Swiss bank deposits.
We have always adhered to the familiar doctrine that an admission made in the
pleadings cannot be controverted by the party making such admission and
becomes conclusive on him, and that all proofs submitted by him contrary thereto
or inconsistent therewith should be ignored, whether an objection is interposed by
the adverse party or not. 104 This doctrine is embodied in Section 4, Rule 129 of
the Rules of Court:chanrob1es virtual 1aw library
SEC. 4. Judicial admissions. An admission, verbal or written, made by a party in
the course of the proceedings in the same case, does not require proof. The
admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made. 105
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WHEREAS, the Republic of the Philippines sympathizes with the plight of the
human rights victims-plaintiffs in the aforementioned litigation through the Second
Party, desires to assist in the satisfaction of the judgment awards of said human
rights victims-plaintiffs, by releasing, assigning and or waiving US$150 million of
the funds held in escrow under the Escrow Agreements dated August 14, 1995,
although the Republic is not obligated to do so under final judgments of the Swiss
courts dated December 10 and 19, 1997, and January 8, 1998;
58
The individual and separate admissions of each respondent bind all of them
pursuant to Sections 29 and 31, Rule 130 of the Rules of Court:chanrob1es virtual
(2) the must have acquired a considerable amount of money or property during his
incumbency; and
It is undisputed that spouses Ferdinand and Imelda Marcos were former public
officers. Hence, the first element is clearly extant.chanrob1es virtua1 1aw 1ibrary
The second element deals with the amount of money or property acquired by the
public officer during his incumbency. The Marcos couple indubitably acquired and
owned properties during their term of office. In fact, the five groups of Swiss
accounts were admittedly owned by them. There is proof of the existence and
ownership of these assets and properties and it suffices to comply with the second
element.
The third requirement is met if it can be shown that such assets, money or property
is manifestly out of proportion to the public officers salary and his other lawful
income. It is the proof of this third element that is crucial in determining whether a
prima facie presumption has been established in this case.
Petitioner Republic presented not only a schedule indicating the lawful income of
the Marcos spouses during their incumbency but also evidence that they had huge
deposits beyond such lawful income in Swiss banks under the names of five
different foundations. We believe petitioner was able to establish the prima facie
presumption that the assets and properties acquired by the Marcoses were
manifestly and patently disproportionate to their aggregate salaries as public
officials. Otherwise stated, petitioner presented enough evidence to convince us
that the Marcoses had dollar deposits amounting to US $356 million representing
the balance of the Swiss accounts of the five foundations, an amount way, way
beyond their aggregate legitimate income of only US$304,372.43 during their
incumbency as government officials.
Considering, therefore, that the total amount of the Swiss deposits was
considerably out of proportion to the known lawful income of the Marcoses, the
presumption that said dollar deposits were unlawfully acquired was duly
established. It was sufficient for the petition for forfeiture to state the approximate
amount of money and property acquired by the respondents, and their total
government salaries. Section 9 of the PCGG Rules and Regulations
states:chanrob1es virtual 1aw library
Prima Facie Evidence. Any accumulation of assets, properties, and other
material possessions of those persons covered by Executive Orders No. 1 and No.
2, whose value is out of proportion to their known lawful income is prima facie
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(3) said amount is manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately acquired
property.
59
The rulings of the Swiss court that the foundations, as formal owners, must be
given an opportunity to participate in the proceedings hinged on the assumption
that they owned a nominal share of the assets. 118 But this was already refuted by
no less than Mrs. Marcos herself. Thus, she cannot now argue that the ruling of the
Sandiganbayan violated the conditions set by the Swiss court. The directive given
by the Swiss court for the foundations to participate in the proceedings was for the
purpose of protecting whatever nominal interest they might have had in the assets
as formal owners. But inasmuch as their ownership was subsequently repudiated
by Imelda Marcos, they could no longer be considered as indispensable parties
and their participation in the proceedings became unnecessary.
In Republic v. Sandiganbayan, 119 this Court ruled that impleading the firms which
are the res of the action was unnecessary:jgc:chanrobles.com.ph
"And as to corporations organized with ill-gotten wealth, but are not themselves
guilty of misappropriation, fraud or other illicit conduct in other words, the
companies themselves are not the object or thing involved in the action, the res
thereof there is no need to implead them either. Indeed, their impleading is not
proper on the strength alone of their having been formed with ill-gotten funds,
absent any other particular wrongdoing on their part . . .
Such showing of having been formed with, or having received ill-gotten funds,
however strong or convincing, does not, without more, warrant identifying the
corporations in question with the person who formed or made use of them to give
the color or appearance of lawful, innocent acquisition to illegally amassed wealth
at the least, not so as place on the Government the onus of impleading the
former with the latter in actions to recover such wealth. Distinguished in terms of
juridical personality and legal culpability from their erring members or stockholders,
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In the present case, there was an admission by respondent Imelda Marcos in her
May 26, 1998 Manifestation before the Sandiganbayan that she was the sole
beneficiary of 90% of the subject matter in controversy with the remaining 10%
belonging to the estate of Ferdinand Marcos. 117 Viewed against this admission,
the foreign foundations were not indispensable parties. Their non-participation in
the proceedings did not prevent the court from deciding the case on its merits and
according full relief to petitioner Republic. The judgment ordering the return of the
$356 million was neither inimical to the foundations interests nor inconsistent with
equity and good conscience. The admission of respondent Imelda Marcos only
confirmed what was already generally known: that the foundations were
established precisely to hide the money stolen by the Marcos spouses from
petitioner Republic. It negated whatever illusion there was, if any, that the foreign
foundations owned even a nominal part of the assets in question.
60
Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section
7, Rule 3 124 on indispensable parties was copied, allows the joinder of
indispensable parties even after judgment has been entered if such is needed to
afford the moving party full relief. 125 Mere delay in filing the joinder motion does
not necessarily result in the waiver of the right as long as the delay is excusable.
126 Thus, respondent Mrs. Marcos cannot correctly argue that the judgment
rendered by the Sandiganbayan was void due to the non-joinder of the foreign
foundations. The court had jurisdiction to render judgment which, even in the
absence of indispensable parties, was binding on all the parties before it though
not on the absent party. 127 If she really felt that she could not be granted full relief
due to the absence of the foreign foundations, she should have moved for their
inclusion, which was allowable at any stage of the proceedings. She never did.
Instead she assailed the judgment rendered.
In the face of undeniable circumstances and the avalanche of documentary
evidence against them, respondent Marcoses failed to justify the lawful nature of
their acquisition of the said assets. Hence, the Swiss deposits should be
considered ill-gotten wealth and forfeited in favor of the State in accordance with
Section 6 of RA 1379:chanrob1es virtual 1aw library
SEC. 6. Judgment. If the respondent is unable to show to the satisfaction of the
court that he has lawfully acquired the property in question, then the court shall
declare such property forfeited in favor of the State, and by virtue of such judgment
the property aforesaid shall become property of the State . . . .
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS
Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding
Justice Francis Garchitorena committed grave abuse of discretion in reversing
himself on the ground that the original copies of the authenticated Swiss decisions
and their authenticated translations were not submitted to the court a quo. Earlier
PJ Garchitorena had quoted extensively from the unofficial translation of one of
these Swiss decisions in his ponencia dated July 29, 1999 when he denied the
motion to release US$150 Million to the human rights victims.
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parties is founded on equity. And the spirit of the law is reflected in Section 11, Rule
3 122 of the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on
the ground of non-joinder or misjoinder of parties and allows the amendment of the
complaint at any stage of the proceedings, through motion or on order of the court
on its own initiative. 123
61
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62
Petitioner filed a Motion for Reconsideration of the trial court's Order, but this was
denied per Order dated November 8, 1999.4
Petitioner then filed with the Court of Appeals (CA) a Petition for Certiorari and
Prohibition with Injunction, docketed as CA-G.R. SP No. 56137. In a
Decision5 dated March 22, 2000, the CA, finding that the RTC did not commit any
grave abuse of discretion, denied due course and dismissed the petition for lack of
merit.6 Petitioner sought reconsideration of the Decision, which was eventually
denied by the CA in a Resolution dated April 17, 2000.7
Hence, the present Petition for Review on Certiorari under Rule 45 of the Rules of
Court.
Petitioner contends in the main that the RTC's act of authorizing the foreclosure of
its property amounts to a prejudgment of the case since it amounts to a ruling that
respondent has a valid mortgage in its favor. Petitioner also argues, among others,
that Presidential Decree (P.D.) No. 385 is not applicable inasmuch as at the time of
the lease to Sunnix, Inc., the management and control of its operations has already
been virtually taken over by respondent.
On the other hand, respondent maintains that: P.D. No. 385 prohibits the issuance
of an injunctive order against government financial institutions; the CA did not
commit any grave abuse of discretion; the RTC Order merely dealt with the
propriety of the injunctive order and not the validity of the mortgage; and the issue
of the propriety of the injunctive order has been rendered moot and academic by
the foreclosure sale conducted and the issuance of a certificate of sale by the
sheriff.8
Based on the arguments of the parties, the principal issue is whether the CA erred
in finding that the RTC did not commit grave abuse of discretion in not enjoining
the extrajudicial foreclosure of the properties subject of this case.
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Sheriff of this Court, are hereby authorized to proceed with the extrajudicial
foreclosure sale on November 15, 1999.3
63
Petitioner's allegations do not make out any justifiable basis for the granting of any
injunctive relief. Even when the mortgagors were disputing the amount being
sought from them, upon the non-payment of the loan, which was secured by the
mortgage, the mortgaged property is properly subject to a foreclosure sale. This is
in consonance with the doctrine that to authorize a temporary injunction, the
plaintiff must show, at least prima facie, a right to the final relief.15
The foregoing conclusion finds greater force in light of the provisions of P.D. No.
385,16 Section 1 of which, provides for a mandatory foreclosure, viz.:
Section 1. It shall be mandatory for government financial institutions, after the
lapse of sixty (60) days from the issuance of this Decree, to foreclose the
collaterals and/or securities for any loan, credit, accommodation, and/or
guarantees granted by them whenever the arrearages on such account, including
accrued interest and other charges, amount to at least twenty (20%) of the total
outstanding obligations, including interest and other charges, as appearing in the
books of account and/or related records of the financial institution concerned. This
shall be without prejudice to the exercise by the government financial institution of
such rights and/or remedies available to them under their respective contracts with
their debtors, including the right to foreclose on loans, credits, accommodations,
and or guarantees on which the arrearages are less than twenty percent (20%).
while Section 2 prohibits the issuance of restraining orders or injunctions against
government financial institutions in any foreclosure action taken by such
institutions, to wit:
Section 2. No restraining order, temporary or permanent injunction shall be issued
by the court against any government financial institution in any action taken by
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64
In any event, such issue of the validity of the mortgage, not to mention the issue of
the nullity of the foreclosure sale as well as petitioner's prayer for damages, still
has to be resolved in the trial court.
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The Court likewise cannot sustain petitioner's argument that the RTC's refusal to
grant any injunctive relief amounts to a prejudgment of the issues before it. The
RTC's sole basis for allowing the foreclosure sale to proceed is P.D. No. 385. It did
not make any finding or disposition on the issue of the validity of the mortgage.
65
SO ORDERED.