G.R. No. 77422 - Liwayway Publishing, Inc. vs. Presidential Commission on Good Government

Case Digest (G.R. No. 77422)
Expanded Legal Reasoning Model

Facts:

Background and Parties

Two consolidated cases were resolved jointly because of the common identity of issues and the interrelation of the parties.
Petitioners in the Liwayway case were Liwayway Publishing, Inc. and U.S. Automotive Co., Inc., while in the Bulletin case the petitioner was the Bulletin Publishing Corporation (“Bulletin”).
Respondents in both cases included the Presidential Commission on Good Government (PCGG) and its officials, namely Secretary/Chairman Ramon A. Diaz and Commissioner Mary Concepcion Bautista.

The Liwayway Case (G.R. No. 77422)

Sequestration Orders and Related Actions

On February 12, 1987, the PCGG issued two writs of sequestration targeting:

The shares of U.S. Automotive held in Liwayway Publishing as of April 15, 1986, and

ii. All shares pertaining to U.S. Automotive in Liwayway Publishing, Inc.

Alongside the sequestration, the PCGG directed the Central Bank to instruct all banks and non-bank financial institutions to freeze withdrawals and transfers from deposit accounts and other financial instruments, with the exception of funds for payment of regular salaries and wages.

Relief Sought and Court Proceedings

Petitioners sought a temporary restraining order (TRO) to prevent the Commission from impairing their right to manage their business operations, particularly the publication of newspapers and magazines.
At the hearing on February 26, 1987, the Solicitor General (then representing the government) and the Commission’s Vice-Chairman assured that Liwayway’s operational funds would not be choked, nor would the Commission interfere with the management or editorial policy of the publication.

Undertakings and Manifestations

On February 27, 1987, the Solicitor General submitted a manifestation reaffirming that the PCGG would neither disrupt Liwayway’s business operations nor interfere with its press freedom.
The Court accepted these undertakings, thereby obviating the need for a TRO on that ground.

Pertinent Factual Allegations

The sequestration rationale invoked allegations that Emilio T. Yap, biggest stockholder in both Liwayway and Bulletin and founder of U.S. Automotive, was a “crony” or “dummy” for the deposed President Marcos.
Mr. Yap refuted these allegations by detailing his minimal stockholding in BASECO, his lack of financial benefit from the investment, and his longstanding independent involvement in Bulletin since 1961.
The actual resolution of the conflicting factual claims regarding ownership was deferred to the Sandiganbayan, entrusted with adjudicating such disputes.

The Bulletin Case (G.R. No. 79126)

Sequestration Order and Voting of Shares

On April 22, 1986, the PCGG issued an order sequestering shares held by former President Marcos, Emilio T. Yap, Eduardo Cojuangco, Jr., and their nominees/agents in Bulletin Publishing Corporation.
On April 14, 1987, the Commission declared its intent to vote these sequestered shares.

Petition and Relief Sought by Bulletin

Bulletin petitioned for certiorari, prohibition, and mandamus, together with a preliminary injunction to block the Commission from voting or otherwise intervening in the management of the Bulletin.
The underlying contention was that government intervention in the management, particularly in relation to the sequestered shares, would imperil editorial independence and violate the constitutional guarantee of freedom of the press.

Subsequent Developments Pertaining to Share Transactions

The Commission sold a portion of the sequestered shares:

46,620.5 shares of Jose Y. Campos were sold for P8,173,506.06;

ii. 121,178 shares of Cesar Zalamea were sold for P21,244,926.96.

The remaining 46,626 shares, held in the name of Eduardo Cojuangco, Jr., remained under sequestration.
Bulletin tendered an offer to deposit cash, amounting to P8,174,470.32, as payment for these shares, pending the Commission’s acceptance.

Government’s Position and Concerns

The Commission, while acknowledging that it could not intrude into the management of private mass media under constitutional limits (specifically Art. XVI, sec. 11), insisted that the true ownership of the sequestered shares should be determined by the Sandiganbayan.
Its tentative stance was that unless there was a clear admission of the shares being ill-gotten assets, it would refrain from finalizing any transaction affecting them.

Issues:

Press Freedom Versus Government Intervention

Whether the actions of the PCGG, specifically the issuance of sequestration orders and attempted voting of sequestered shares, violated the constitutional freedom of the press and the right of private mass media to independently manage their affairs.
Whether the undertakings given by the Solicitor General and Commission officials sufficiently safeguarded Liwayway’s operational funds and editorial independence.

Proper Forum for Determination of Ownership

Whether the Supreme Court should adjudicate the conflicting factual allegations on the nature and ownership of the sequestered shares, or if such issues must be resolved by the Sandiganbayan, given its exclusive jurisdiction over cases involving ill-gotten wealth.
Whether the offer by Bulletin to deposit cash for the remaining sequestered shares should be accepted by the PCGG pending final determination.

Validity and Scope of the PCGG’s Sequestration Orders

Whether the issuance of sequestration orders over the shares and accompanying directives to financial institutions constituted an overreach affecting the ordinary business operations of the petitioners.
Whether these orders could be set aside or modified in light of the parties’ agreements and the constitutional guarantees of press freedom.

Ruling:

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Ratio:

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Doctrine:

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Case Digest (G.R. No. 77422) Core Legal Reasoning Model Expanded

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Case Digest (G.R. No. 77422) Expanded Legal Reasoning Model

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Case Digest (G.R. No. 77422)
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Case Digest (G.R. No. 77422)
Expanded Legal Reasoning Model