Title
Asset Privatization Trust vs. Sandiganbayan
Case
G.R. No. 138598
Decision Date
Jun 29, 2001
PJI's delinquent loans, secured by collateral, were transferred to APT; PCGG sequestered shares, alleging ill-gotten wealth. Sandiganbayan erred in using DDBO price, not loan terms, to compute obligations. SC ruled loan contracts binding, nullifying Sandiganbayan's decision.
Font Size:

Case Digest (G.R. No. 138598)

Facts:

Loan Agreements and Collateral: From September 15, 1976, to March 31, 1981, Philippine Journalists, Inc. (PJI) obtained various U.S. dollar-denominated loans from the Development Bank of the Philippines (DBP). The loans were secured by publishing equipment and 67% of PJI’s total capital stock.

Delinquency and Transfer to APT: From 1979 to February 1986, PJI, under private shareholders, failed to pay monthly amortizations. In 1986, DBP transferred PJI’s delinquent account to the Asset Privatization Trust (APT), a government entity, under Administrative Order No. 14.

Sequestration by PCGG: On February 19, 1987, and April 28, 1987, the Presidential Commission on Good Government (PCGG) sequestered PJI’s shares, alleging they were part of Benjamin "Kokoy" Romualdez’s ill-gotten wealth.

Direct Debt Buy Out (DDBO) Offer: In 1989, APT proposed a DDBO settlement to PJI, offering to settle the account for P78,551,405.93. PJI did not act on this offer, and no settlement was reached.

Partial Payments and Arrearages: Under PCGG management, PJI made partial payments, leaving a balance of P216,801,156.41 as of October 31, 1992, based on loan documents.

Sandiganbayan’s Computation: The Sandiganbayan disregarded PJI’s computation and instead used the DDBO price of P78,551,405.93, adding 12% annual interest, resulting in a total obligation of P106,821,912.06. It ordered APT to return the overpayment of P13,844,324.94 to PJI.

Issue:

  1. Jurisdiction: Did the Sandiganbayan have jurisdiction over APT in determining PJI’s loan obligation?
  2. Basis of Computation: Did the Sandiganbayan err in disregarding the loan documents and using the DDBO price as the basis for PJI’s obligation?

Ruling:

The Supreme Court ruled in favor of APT, nullifying the Sandiganbayan’s resolutions. The Court held that:

  • Jurisdiction: The Sandiganbayan had jurisdiction over APT, as APT voluntarily participated in the proceedings without challenging the court’s jurisdiction.
  • Loan Documents as Binding: The Sandiganbayan erred in disregarding the loan documents, which specified the terms of PJI’s obligations, including interest rates and penalties. The DDBO price was not a valid basis for computing PJI’s obligation, as it was part of an unperfected settlement offer.
  • Interest and Penalties: The Sandiganbayan unjustifiably imposed a 12% interest rate and disregarded penalties and additional interests stipulated in the loan contracts. The failure to pay was partly due to PCGG mismanagement, but PJI’s obligations under the contracts remained valid.

Ratio:

  • (Unlock)

Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.