G.R. No. 75885 - Bataan Shipyard and Engineering Co., Inc. vs. Presidential Commission on Good Government

Bataan Shipyard & Engineering Co., Inc. (BASECO) filed a special civil action of certiorari and prohibition against the Presidential Commission on Good Government (PCGG) and its Commissioners.
BASECO challenged:

Executive Orders Nos. 1 (Feb. 28, 1986) and 2 (Mar. 12, 1986) issued by President Aquino;
Sequestration and provisional takeover orders issued by PCGG and its agents under those EOs.

Basic Sequestration Order (Apr. 14, 1986) – addressed to PCGG agents to sequester BASECO (and affiliates of alleged Marcos associates), conserve assets, ensure continuity of business, report periodically, and request security support.
Order to Produce Documents (Apr. 18, 1986) – required submission within five days of corporate records (1973–1986) under pain of contempt.
Engineer Island Orders

Termination of BASECO’s security contract and replacement by military/security personnel.
Amendment of road‐use payment from monthly billing to per‐entry basis.

Aborted wharf improvement contract (July 1986).
Authorization to operate Sesiman rock quarry (June 20, 1986) and to sell scrap metal (June 26, 1986).

Provisional Takeover Order (July 14, 1986) – PCGG assumed management of BASECO under EO 1, § 3(c), appointing a “management team” with broad powers to operate and protect assets.
Termination of BASECO Officers – PCGG removed key executives (July 1986).

Lack of notice and hearing, violation of due process in sequestering property.
PCGG’s dual role as investigator and judge, lack of judicial remedy.
Claimed bill of attainder directed at specified persons.
Infringement of self-incrimination and unreasonable searches/seizure by document‐production order.
Ultra vires interference with BASECO’s contracts, operations, and management.

Proclamation No. 3 (Freedom Constitution, Mar. 25, 1986) – empowered President to recover ill-gotten wealth via sequestration/freeze orders.
EO No. 1 (Feb. 28, 1986) – created PCGG to recover assets of Marcos and associates, authorizing sequestration, provisional takeover, injunctions, and investigations.
EO No. 2 (Mar. 12, 1986) – froze assets of Marcos, relatives, subordinates, nominees; prohibited their transfer; mandated disclosure.
EO No. 14 (May 7, 1986) – empowered PCGG to file civil/criminal cases in Sandiganbayan; eased procedural rules; prohibited use of compelled testimony in criminal prosecutions (except perjury).

Incorporation & Capital – BASECO incorporated Aug. 30, 1972; P60 M authorized capital; 12,000 shares subscribed; 218,819 shares outstanding by 1986.
Purchase of Government Assets

Bataan National Shipyard from NASSCO (1973), price cut from P52 M to P24.3 M with Marcos approval.
300 ha of Mariveles land (1974).
Engineer Island shops and equipment (1975) with Marcos’s “APPROVED” endorsement.

Government Loans – Japanese war-damage funds ($19 M), NDC (P30 M), GSIS (P12.4 M) with minimal or no amortization.
Presidential Directives (1977–78) – “spin-off” of shipbuilding into new corporation with government equity; issuance of tailored Letters of Instruction authorizing conversion of loans into non-voting shares.
Blank-Endorsed Stock Certificates – PCGG found certificates representing over 95% of BASECO stock, plus stock of front corporations, endorsed in blank and traced to Marcos’s possession.

Constitutionality of EO Nos. 1 & 2, and attendant sequestration and provisional takeover orders (due process, notice, hearing).
Authority of PCGG to exercise acts of ownership (e.g., voting shares, replacing directors) absent judicial divestment of title.
Whether EO Nos. 1 & 2 and ensuing orders constitute a bill of attainder.
Whether the order for corporate records violated the privilege against self-incrimination and the right against unreasonable searches and seizures.