G.R. No. L-79484 - Kant Kwong vs. Presidential Commission on Good Government

Petitioners are foreign nationals representing Hongkong–Chinese investors holding a 33% stake in two domestic garment corporations, namely, De Soleil Apparel Manufacturing Corporation and American Inter-Fashion Manufacturing Corporation.
The Presidential Commission on Good Government (PCGG) sequestered the two firms on March 25, 1986, alleging that the Marcoses, through nominees and dummies, controlled 67% of the shareholdings.

On February 13, 1987, PCGG Secretary Ramon A. Diaz notified the Minister of Public Information that the petitioners were included in the Hold-Order list.
On March 12, 1987, petitioners filed an Urgent Motion to Lift the Hold-Order with the request for a hearing on March 16, 1987; however, the motion was not calendared.
On March 19, 1987, the PCGG denied the motion, justifying that the petitioners’ presence in the country was necessary to resolve various issues—such as alleged withholding of documents, delays in cashing letters of credit, failure to remit payments, and other obstructive acts that allegedly hampered the operations of the sequestered garment firms.

Withheld key documents covering substantial past shipments.
Deliberately delayed the cashing of letters of credit, causing them to lapse.
Failed to remit payments due for past shipments.
Engaged in a campaign to obstruct the release of funds needed for the garment firms’ operations and to discredit the officers-in-charge and the PCGG.

The PCGG relied on evidence and records related to these alleged acts to justify the need for petitioners’ continued presence in the country.

Executive Order No. 1 (dated February 28, 1986) which created the PCGG, empowers it to recover all ill-gotten wealth accumulated by former President Ferdinand E. Marcos and his associates.
Section 3 of the Executive Order and subsequent Rules and Regulations issued by the PCGG (April 11, 1986) authorize the issuance of writs of sequestration, freeze, or hold orders to prevent actions that could obstruct the recovery of such wealth.
A “Hold-Order” is defined as an instrument to temporarily prevent a person’s departure from the country when such departure could undermine the Commission’s task.

Petitioners argued that the hold-order violates their constitutional right to travel and due process, noting that:

The order was issued without a proper hearing.
The underlying allegations had become stale or been rendered moot by the subsequent takeover and reorganization of the firms by the PCGG.

On September 24, 1987, the Court lifted the hold order against petitioner Yim Kam Shing to allow him to travel to Hongkong for urgent medical treatment.

Whether the Hold-Orders issued by the PCGG violated the petitioners’ constitutional right to travel and freedom of movement.
Whether the issuance and continued enforcement of the Hold-Orders were supported by the authority granted under Executive Order Nos. 1, 2, and 14 and the PCGG’s Rules and Regulations.
Whether due process was observed in the issuance of the Hold-Orders, considering that petitioners were not afforded a hearing or opportunity to contest the order.
Whether the grounds for the issuance of the Hold-Orders (i.e., obstruction of the commission’s investigation and operations) had become obsolete or stale in light of subsequent developments, including the appointment of an Officer-in-Charge and improvements in the management of the sequestered firms.
Whether the continued enforcement of the Hold-Orders constitutes a gross abuse of discretion amounting to manifest injustice or palpable excess of authority.