G.R. No. 129406 - Republic vs. Sandiganbayan

The dispute arises from Civil Case No. 0034, a suit for reconveyance, reversion, accounting, reconstitution, and damages involving the sequestration of assets alleged to be ill-gotten wealth.
The petitioner is the Republic of the Philippines, represented by the Presidential Commission on Good Government (PCGG), while the private respondent is Roberto S. Benedicto, including properties registered in his name or under his control.

Pursuant to Executive Order (EO) No. 14, series of 1986, the PCGG seized various assets of Benedicto, including 227 shares of stock in the Negros Occidental Golf and Country Club, Inc. (NOGCCI).
The PCGG, acting as sequestrator-receiver, assumed responsibility for these assets under EO No. 1, series of 1986, which empowered it to secure and manage properties believed to be the proceeds of ill-gotten wealth.

After the sequestration, PCGG representatives participated as members of the NOGCCI Board of Directors. In October 1986, the board passed a resolution altering the corporate policy on membership dues.
A subsequent board resolution on March 29, 1987, increased the monthly membership dues per share from P150.00 to P250.00. The PCGG, however, did not pay the resulting membership dues amounting to P2,959,471.00.

Due to the non-payment of the monthly dues, the 227 sequestered shares were declared delinquent, thereby necessitating an auction sale to recover the dues.
An auction sale was held on August 5, 1989, following the delinquency declaration.

On November 3, 1990, a Compromise Agreement was reached between the Republic and Benedicto in the same civil case, wherein the PCGG agreed to lift the sequestration of the shares as part of the settlement.
The Compromise Agreement implicitly recognized that the shares might not have been ill-gotten, and it provided for the recovery of assets without prolonged litigation.

Benedicto subsequently filed a motion on February 22, 1994, for the release of the sequestered shares, leading to a resolution by the Sandiganbayan on December 6, 1994, placing the shares under the custody of its Clerk of Court.
To implement the terms of the Compromise Agreement, the Sandiganbayan issued further resolutions on March 28, 1995, and March 13, 1997, directing the PCGG either to deliver the shares free from liens or to pay their value at P150,000.00 per share.

The PCGG argued that membership dues, such as those imposed by the NOGCCI, are not classified as outstanding debts for which a receiver should be accountable owing to its nature as a receiver.
It contended that its delayed filing of an injunctive suit (Civil Case No. 5348) before the RTC of Bacolod City was insufficient to justify the non-payment of the dues or to prevent the auction sale.
In its later defenses, the PCGG also attempted to invoke state immunity from suit, arguing that any monetary liability would require the appropriation of public funds.

The Sandiganbayan held that the PCGG was indeed at fault for allowing the delinquency and eventual auction sale of the shares due to its inaction and contributory role in approving detrimental board resolutions.
The court rejected the state immunity defense by noting that when the government, through its officers, becomes a party to a contractual agreement—as it did in the Compromise Agreement—it effectively waives its immunity.

Whether the Sandiganbayan acted with grave abuse of discretion in holding the PCGG liable for the loss of the 227 NOGCCI shares through not paying the associated membership dues.
Whether the failure to remiss the dues, thereby leading to the auction sale of the shares, constitutes an actionable neglect of duty by the PCGG as the receiver.

Whether the PCGG can successfully invoke state immunity from suit to avoid the imposed monetary liability.
Whether the act of entering into a Compromise Agreement and assuming certain obligations exposes the PCGG to private-law liabilities, effectively precluding the state immunity defense.

Whether the PCGG, in its capacity as receiver, took the necessary and timely measures to safeguard the value of the sequestered assets.
Whether the PCGG’s actions, or lack thereof, contributed directly to the deterioration in the value of the 227 shares.