Diseño experimental

FACTS

- Special Civil Action in the Supreme Court. Certiorari.

- Dec 17 1991, the Republic, through the Presidential Commission on Good Government or PCGG, filed a petition for forfeiture before the Sandiganbayan, entitled Republic of the Philippines vs.

Ferdinand E. - Marcos, represented by his Estate/heirs and Imelda R. Marcos, pursuant to RA 1379²⁰.

- PCGG was created by virtue of Executive Order No. 1 issued on February 28, 1986 by then President Corazon Aquino, and was charged 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 is administration, directly or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship.”

- In said case, petitioner Republic, represented by the Office of the Solicitor General (OSG) sought:

a. the declaration of the aggregate amount of US$356 million (estimated to be US$658 million inclusive of interest as of

20An Act Declaring Forfeiture In Favor of the State Any Property To Have Been Unlawfully Acquired By Any Public Officer or Employee and Providing For the Procedure Therefor.

the time of decision) deposited in escrow²¹ in the Philippine National Bank (PNB), as ill-gotten wealth.

*The ff account groups, using various foreign foundations in certain Swiss banks, previously held the funds:

1. Azio-Verso-Vibur Foundation accounts

2. Xandy-Wintrop: Charis-Scolari-Valamo-Spinus-Avertina-Foundation accounts

3. Trinidad-Rayby-Palmy Foundation accounts 4. Rosalys-Aguamina Foundation accounts 5. Maler Foundation accounts

b. the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple’s salaries, other lawful income as well as income from legitimately acquired property. These treasury notes are frozen at the Bangko Sentral ng Pilipinas by virtue of freeze order issued by PCGG.

- Oct 18, 1993, respondents Imelda R Marcos, Ma. Imelda M Manotoc, Irene M Araneta and Ferdinand R Marcos, Jr. filed their answer.

The General Agreement/Supplemental Agreements

- Before case was set for pre-trial, a General Agreement and the Supplemental Agreements dated Dec 28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family

- The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and distribute all assets presumed to be owned by the Marcos family under the conditions contained therein.

- It was stated in one of the “whereas clauses” the fact that petitioner Republic “obtained a judgment from the Swiss Federal Tribunal on Dec 21 1990 that the US$356 million belongs in principle to the Republic of the Philippines provided certain conditions are met….” The decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District Attorney Peter

21 Money or a deed or other instrument deposited with a third person for a delivery to a given party upon the fulfillment of some condition. While in the keeping of the third party, the money or instrument is said to be “in escrow”. (Random House Webster’s Legal Dictionary, Random House, New York, 1996)

Cosandey granting legal assistance to Republic. Cosandey declared the various deposits in the name of the 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.

- Sandiganbayan conducted hearings on the motion to approve the General/Supplemental Agreements.

- Oct 18 1996 petitioner filed a motion for summary judgment and/or judgment on the pleadings. Respondents filed their opposition.

- Nov 20 1997 Sandiganbayan denied petitioner’s 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”

- May 26 1998 Mrs. Marcos filed manifestation claiming she was not a party to the motion for approval of the Compromise Agreement and that the owned 90% of the funds with the remaining 10%

belonging to the Marcos estate.

The Fund Transfer

- Aug 10 1995 petitioner Republic filed with the District Attorney in Zurich, Switzerland an additional request for the immediate transfer of the deposits to an escrow account in PNB. This was granted.

- Marcoses appealed, Swiss Federal Supreme Court affirmed ruling of District Attorney of Zurich, and funds were remitted to the Philippines in escrow in 1998.

The Petition for Summary Judgment

- Mar 10 2000 petitioner filed another motion for summary judgment “pertaining to the forfeiture of the US$356 million, based on ff grounds:

a. essential facts which warrant the forfeiture of the funds are admitted by respondents in their pleadings and other submissions made in the course of the proceeding

b. respondents’ admission made during pre-trial that they do not have any interest or ownership over the funds tenders

no genuine issue or controversy as to any material fact in the present action

- Mrs. Marcos filed her opposition, which was later adopted by co-respondents Marcos children.

- Mar 24 2000 hearing on motion for summary judgment was conducted

- Sep 19 2000 Sandiganbayan granted petitioner’s motion for summary judgment, stating that there is no issue of fact which calls for the presentation of evidence, and declared the funds, which were deemed unlawfully acquired as ill-gotten wealth, forfeited in favor of the State.

- Mrs. Marcos filed motion for reconsideration on Sep 26 2000;

Marcos children followed.

- In Jan 31 2002 resolution, Sandiganbayan reversed its Sep 19 2000 decision, stating that “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”, and thus denied petitioner’s motion for summary judgment.

Hence, the present petition.

- Petitioner asserts in the main that the Sandiganbayan committed grave abuse of discretion in reversing the decision on the ground that the original copies of the authenticated Swiss Federal Supreme Court decisions and their “authenticated translations” have not been submitted to the Court, when in fact the Sandiganbayan quoted extensively a portion of the Swiss decisions in denying a previous motion dated July 29 1999. Petitioner adds 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.

- Respondents, of course, assert that the petition should be denied.

Analysis of Respondents’ Legitimate Income

- the Marcoses reported P16,408,442.00 or US$2,414,484.91 in total income over a period of 20 years from 1965 to 1984.

- This amount includes Ferdinand Marcos’ salary as Senate President in 1965, (P15,935) and as President from 1966 to 1985

(1966-1976 at P60,000/year; 1977-1985 at P100,000/year), Imelda Marcos’ salary as Minister of Human Settlements from 1976 to 1986 (P75,000/year), income from legal practice (P11,109,836), plus other sources.

- Ferdinand Marcos made it appear that he had an extremely profitable legal practice before he became President, and that he was still receiving payments almost 20 years after

- Computations establish the total net worth of spouses Ferdinand and Imelda, for the years 1965 to 1984, in the amount of US$957,487.75. (assuming income from legal practice is valid) - The five group accounts have a total balance of US$356 million.

ISSUES

1. WON petitioner Republic’s action for certiorari is proper.

2. WON respondents raised any genuine issue of fact which would either justify or negate summary judgment.

3. WON petitioner Republic was able to prove its case for forfeiture in accordance with Sections 2 and 3 of RA 1379.

HELD

1. Ratio 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.

Obiter Almost two decades have passed since the government initiated its search for and reversion of ill-gotten wealth. The definitive resolution of such cases on the merits is long overdue.

2. Ratio Mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment

Obiter Court held that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Summary judgment should take place as a matter of right.

- 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.

- Respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner required by the rules (Sec 10 Rule 8 1997 Rules of Civil Procedure). Their answers include “they have no sufficient knowledge” or “they could not recall because it happened a long time ago” or “the funds were lawfully acquired” without stating the basis of such assertions.

- Question: Whether the kind of denial in respondents’ answer qualifies as the specific denial called for by the rules. No. The Court holds that if an allegation directly and specifically charges a party with having done, performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical and express denial must be made.

- The allegations for forfeiture on the existence of the Swiss bank deposits, not having been specifically denied by respondents in their answer, were deemed admitted pursuant to Sec 11 Rule 8 of 1997 Rules on Civil Procedure.

a. Propriety of Summary Judgment

- Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. The Court is justified in dispensing with the trial and rendering summary judgment if it is demonstrated by affidavits, depositions or admissions that the issues are not genuine but sham or fictitious.

- motion for summary judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact.

- It is a procedural device for the prompt disposition of actions in which the pleadings raise only a legal issue, not a genuine issue as to any material fact.

b. Whether petitioner Republic had bound itself to go to trial and had legally waived right it had to move for summary judgment.

- Court rules that petitioner 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.

c. Whether by the time motion for summary judgment was filed on Mar 10 2000, estoppel by laches had already set in against petitioner.

- Doctrine of estoppel or laches does not apply when government sues as a sovereign or asserts governmental rights. Nor can estoppel validate an act that contravenes law or public policy.

- estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the person has abandoned his right or declined to assert it.

- in invoking doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that some unfair injury to them might result unless the action is barred.

3. Ratio The prima facie presumption raised by the law that a property is unlawfully acquired when the amount or value is manifestly disproportionate to the official salary and other lawful income of the public officer who owns it stands as proved unless defendant shows, and proves, that these were lawfully acquired and that there are other legitimate sources of income.

Obiter burden of proof was on respondents to dispute presumption and show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. A presumption is prima facie proof of the fact presumed, and, unless the fact thus prima facie established by legal presumption is disproved, it must stand as proved.

- the Court not only took into consideration that respondents themselves made admissions in their pleadings and testimonies, but that petitioner was able to present sworn statements of witnesses who had personal knowledge of the Marcoses’

participation in the illegal acquisition of funds.

RESOLUTION

CORONA; November 18, 2003

- SC: Respondents in their motions for reconsideration do not raise any new matters for the Court to resolve.

Is summary judgment in forfeiture proceedings a violation of due process?

- Respondents: RA 1379 is penal in substance and effect, hence they are entitled to constitutional safeguards enjoyed by accused.

- SC: Due process of law has two aspects: substantive and procedural. There must be a compliance with both substantive and procedural requirements in order that a particular act may not be impugned as violative of the due process clause.

- substantive due process refers to intrinsic validity of a law that interferes with the rights of a person to his property

- there is no showing that RA 1379 is unfair, unreasonable or unjust. Respondents were not deprived of their property through forfeiture for arbitrary reasons.

- procedural due process means compliance with procedures or steps, even periods, prescribed by the statute, in conformity with the standard of fair play and without arbitrariness on the part of those who are called upon to administer it.

- forfeiture proceedings are actions in rem, thus civil in nature, contrary to respondents’ contention that they are penal in character. The proceedings under RA 1379 do not terminate in the imposition of penalty but merely in the forfeiture in favor of the State of properties illegally acquired.

- Civil suits to recover unlawfully acquired property under RA 1379 may be proven by preponderance of evidence.

The Government is required only to state the known lawful income of respondents for the prima facie presumption of illegal provenance to attach. Petitioner Republic having established this presumption, burden of proof shifted to respondents to show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. Respondents failed on this part.

- essence of due process is found in the reasonable opportunity to be heard and submit one’s evidence in support of his defense

- Respondents were repeatedly accorded full opportunity to present their case, defenses and pleadings. They obstinately refused to do so and have tried to confuse the issues and the Court and to delay the disposition of the case

- “the people and the State are entitled to favorable judgment, free from vexatious, capricious and oppressive delays, the salutary objective being to restore the ownership of the Swiss deposits to the rightful owner – that is, the Republic of the Philippines – in the shortest possible time.”

Motions for reconsiderations denied with finality.

DOMINIUM AND IMPERIUM

CARINO V INSULAR GOVERNMENT