G.R. No. 183278 - Cojuangco vs. Sandiganbayan

Case Summary (G.R. No. 183278)

Petitioner and Respondent Roles

The Republic filed a complaint (docketed Civil Case No. 0002) seeking reconveyance and related reliefs against the Marcoses and others, including recovery of some 2.4 million PLDT shares. Prime Holdings (PHI) was the registered owner of 111,415 PTIC shares that represented PLDT stock; the Cojuangcos were impleaded as parties in the proceedings. The Sandiganbayan handled post-judgment execution matters after this Court’s earlier judgment in favor of the Republic.

Key Dates

July 16, 1987: Republic filed Complaint for Reconveyance, Reversion, Accounting, Restitution and Damages (Civil Case No. 0002).
January 20, 2006: This Court’s decision in G.R. No. 153459 adjudicated 111,415 PTIC shares registered in PHI’s name to the Republic.
October 26, 2006: Decision became final and executory.
November 20, 2006: Republic filed Motion for Issuance of Writ of Execution with the Sandiganbayan.
December 14, 2006: Sandiganbayan granted writ as to reconveyance but denied accounting for dividends.
November 7, 2007 and June 13, 2008: Sandiganbayan issued the challenged resolutions ordering accounting and remittance (with interest adjustments).
February 28, 2007: Sale and Purchase Agreement transferring shares to Metro Pacific (relevant to entitlement to dividends).
April 24, 2009: Decision of this Court denying the petition for certiorari (applying the 1987 Constitution).

Applicable Law and Authorities

The 1987 Constitution governed the decision. Relevant corporate law concepts and authorities relied upon include the technical and ordinary definition of “dividend” as a portion of corporate profits set aside for distribution to stockholders and the principle that the right to dividends is incident to ownership of stock. Section 63 of the Corporation Code (as cited) governs validity of transfers vis-à-vis the corporate books: a transfer is not valid as against the corporation until recorded. Jurisprudential authorities cited include Nielson & Co. v. Lepanto Consolidated Mining Co., Distilleria Washington, Inc. v. La Tondeña Distillers, Inc., Insular Life v. Toyota Bel-Air, and other cases referenced in the decision for principles on ownership attributes, execution of judgments, and interpretation of dispositive portions.

Procedural History and Holdings Below

The Sandiganbayan initially granted the writ of execution only for reconveyance of the shares but denied accounting for dividends. On reconsideration, the Sandiganbayan, by its November 7, 2007 resolution, directed PTIC to deliver cash and stock dividends pertaining to the 111,415 shares, including compounded interests; on reconsideration again, by its June 13, 2008 resolution it included legal interest but disallowed compounding. The Sandiganbayan then issued a Writ of Execution, prompting petitioners to seek certiorari review before this Court.

Issues Presented to the Court

The pivotal issues framed by petitioners and addressed by the Court were: (1) whether the Sandiganbayan gravely abused its discretion in ordering accounting, delivery, and remittance to the Republic of the stock, cash, and property dividends (including interests) pertaining to the 111,415 PTIC shares, given that this Court’s dispositive paragraph in G.R. No. 153459 did not expressly mention dividends and interests; and (2) whether the Republic, having transferred the shares to Metro Pacific, was nonetheless entitled to dividends, interests, and earnings accruing to those shares.

Legal Analysis — Dividends and Incidents of Ownership

The Court analyzed dividends as an incident of stock ownership: dividends are the ratable distribution of corporate profits fixed by the corporation’s governing body, and the right to dividends is an incident of ownership. By declaring the Republic the owner of the 111,415 PTIC shares, the Court reasoned that the Republic necessarily acquired the rights incident to ownership, including the right to receive fruits or dividends produced by the shares. The Court emphasized traditional attributes of ownership (jus utendi and the right to receive what the thing produces) and stated that awarding ownership of shares without awarding their fruits would render ownership incomplete and absurd—a “crippled owner” lacking core juses.

Legal Analysis — Execution: Dispositive Part versus Body of the Opinion

Although the dispositive paragraph of this Court’s earlier decision did not expressly mention dividends, the Court explained recognized exceptions to the rule that only the dispositive portion is executable. Two relevant exceptions are where (a) ambiguity or uncertainty in the dispositive requires resort to the body of the opinion to construe the judgment because the dispositive must be supported by the ratio decidendi, and (b) where the body of the opinion contains extensive and explicit discussion settling the issue. The Court found that the body of its G.R. No. 153459 decision made clear that the whole block of shares and the fruits thereof were adjudicated to the Republic, particularly because the shares were declared part of the Marcoses’ ill-gotten wealth (public money). Therefore, the Sandiganbayan did not gravely abuse its discretion in orderin

Case Syllabus (G.R. No. 183278)

Procedural History

Petition for certiorari filed by Imelda O. Cojuangco, Prime Holdings, Inc., and the Estate of Ramon U. Cojuangco (petitioners) assailing Sandiganbayan Resolutions dated November 7, 2007 and June 13, 2008 in Civil Case No. 0002, Republic of the Philippines v. Ferdinand Marcos, et al.
Underlying civil complaint (docketed Civil Case No. 0002) was filed by the Republic on July 16, 1987 titled "Complaint for Reconveyance, Reversion, Accounting, Restitution and Damages," seeking recovery of alleged ill-gotten wealth including some 2.4 million PLDT shares and specifically shares in PTIC registered in the name of Prime Holdings.
Sandiganbayan initially dismissed the complaint with respect to the recovery of PLDT shares; the Republic appealed to the Supreme Court (G.R. No. 153459), consolidated with other related cases (G.R. Nos. 149802, 150320, 150367).
Supreme Court Decision dated January 20, 2006 in G.R. No. 153459 declared the Republic to be the owner of 111,415 PTIC shares registered in the name of Prime Holdings; dispositive portion granted reconveyance of those shares to the Republic.
The Decision became final and executory on October 26, 2006.
Republic filed a Motion for the Issuance of a Writ of Execution with the Sandiganbayan on November 20, 2006, seeking cancellation of the 111,415 Prime Holdings stock certificates and annotation of change of ownership on PTIC’s Stock and Transfer Book; also prayed for accounting of cash and stock dividends from 1986 to present including compounded interests.
Sandiganbayan Resolution dated December 14, 2006 granted reconveyance but denied the prayer for accounting of dividends.
On Motion for Reconsideration by the Republic, Sandiganbayan issued the first assailed Resolution dated November 7, 2007 directing PTIC to deliver cash and stock dividends pertaining to the 111,415 shares, including compounded interests.
Petitioners moved for reconsideration of the November 7, 2007 Resolution; Sandiganbayan issued the second assailed Resolution dated June 13, 2008 partly granting petitioners’ motion by including legal interests but not compounding them, and thereafter issued a Writ of Execution.
Petitioners filed the present certiorari petition to this Court challenging the two Sandiganbayan Resolutions; the Supreme Court rendered the present Decision authored by Justice Carpio Morales.

Antecedent and Factual Background

The Republic’s complaint alleged that the Marcoses’ ill-gotten wealth included shares in PLDT covered by PTIC shares registered in Prime Holdings.
The specific block adjudicated to the Republic comprised 111,415 PTIC shares registered in the name of Prime Holdings.
The Republic sought not only reconveyance of those shares but also accounting and remittance of cash and stock dividends declared and/or issued by PLDT in favor of PTIC from 1986 up to the present, including compounded interests.
The Republic sold the shares to Metro Pacific Assets Holdings, Inc. (Metro Pacific) pursuant to a Sale and Purchase Agreement dated February 28, 2007.
Annexes and documentary references in the record included pleadings, Sandiganbayan resolutions, the writ of execution, and the Republic’s comment/opposition showing the Sale and Purchase Agreement.

Issues Presented

Whether the Sandiganbayan gravely abused its discretion in ordering the accounting, delivery, and remittance to the Republic of the stock, cash, and property dividends pertaining to the 111,415 PTIC shares of Prime Holdings, given that the dispositive portion of this Court’s Decision in G.R. No. 153459 did not specifically discuss dividends.
Whether the Republic, having transferred the shares to a third party (Metro Pacific), is entitled to the dividends, interests, and earnings thereof.

Relevant Prior Rulings and Dispositive Wording

Supreme Court (G.R. No. 153459, January 20, 2006) dispositive portion: "WHEREFORE, the petition of the Republic of the Philippines in G.R. No. 153459 is GRANTED to the extent that it prays for the reconveyance to the Republic of 111,415 PTIC shares registered in the name of PHI. The petitions in G.R. Nos. 149802, 150320, 150367, and 153207 are DENIED for lack of merit. SO ORDERED."
Sandiganbayan’s December 14, 2006 Resolution: granted reconveyance but denied accounting for dividends.
Sandiganbayan’s November 7, 2007 Resolution: directed PTIC to deliver cash and stock dividends pertaining to the 111,415 shares, including compounded interests (first assailed resolution).
Sandiganbayan’s June 13, 2008 Resolution: on reconsideration, included legal (but not compounded) interests in the accounting to be remitted to the Republic (second assailed resolution).
Writ of Execution was issued pursuant to the June 13, 2008 Resolution.

Petitioners’ Contentions (as stated in the source)

Petitioners insisted on a literal reading of the dispositive portion of the Supreme Court’s Decision in G.R. No. 153459, arguing that the Decision’s dispositive language did not include dividends, interests, and earnings accruing to the 111,415 PTIC shares; thus, the Sandiganbayan had no authority to order accounting and remittance of such fruits.
Petitioners contended that the Republic had yielded or lost the right to the fruits of the shares when it sold them to Metro Pacific, implying the Republic was not entitled to dividends and earnings after the transfer.

Legal Doctrines, Statutes, and Authorities Cited by the Court

Definition and nature of “dividend”: the part or portion of the profits of the enterprise set apart for ratable division among holders of the capital stock; payment to stockholders as return on investment; right to dividends is incident to ownership of stock. (Citations: Nielson & Co. v. Lepanto Consolidated Mining Co.; De Leon, The Corporation Code of the Philippines Annotated; 19 Am Jur 2d; 18 Am. Jur 2d.)
Concept of ownership: ownership subjects a thing