A.C. No. 6297 - Parinas vs. Paguinto

Case Summary (A.C. No. 6297)

Procedural and Factual Background

PCGG filed a Petition for Forfeiture pursuant to R.A. 1379 (docketed Civil Case No. 0141) seeking forfeiture of multiple assets allegedly representing ill‑gotten wealth, including Swiss bank accounts (initially USD 356 million, later shown as USD 658 million) deposited in escrow with Philippine National Bank (PNB), two treasury notes (USD 25M and USD 5M) frozen by the Bangko Sentral ng Pilipinas, and assets of various alleged dummy corporations and foundations. Arelma, S.A. (Arelma) was specifically alleged to be a Panamanian entity established to hold an account and portfolio at Merrill Lynch, New York, and valued in 1983 at USD 3,369,975 according to Malacañang documents (Annex V‑21).

Earlier Compromise Agreements and Swiss Proceedings

Before pretrial, the Marcos heirs and PCGG executed several compromise agreements (General Agreement and Supplements dated 28 December 1993) for a proposed global settlement; the General Agreement referenced a Swiss Federal Tribunal ruling of 21 December 1990 that USD 356 million belonged in principle to the Republic subject to conditions. The Republic later pursued separate motions for summary judgment concerning the Swiss deposits and subsequently other assets, while Swiss and foreign litigation affected recovery timing and disposition of certain assets (including later transfer of some Arelma‑related stock certificates by Swiss authorities).

Prior Motions and Supreme Court Rulings on Swiss Deposits

The Republic’s 1996 motion for summary judgment concerning the USD 356 million was denied because of the pending compromise approval motion. A 2000 motion narrowly confined to the five Swiss foundation accounts resulted in a Sandiganbayan decision (19 September 2000) declaring those Swiss deposits forfeited; that decision was reversed by the Sandiganbayan on 31 January 2002, but the Supreme Court set aside that reversal and reinstated the 19 September 2000 ruling (Swiss Deposits Decision), which was later final when reconsideration was denied in November 2003.

The 2004 Motion on Arelma and Sandiganbayan’s 2009 Ruling

The Republic filed a Motion for Partial Summary Judgment (16 July 2004) to declare the funds, properties and interests of Arelma forfeited under R.A. 1379, relying on documentary evidence (including Malacañang documents and foreign assistance findings). The Sandiganbayan granted the 2004 Motion by its 2 April 2009 Decision, declaring Arelma’s assets, estimated at USD 3,369,975 (as of 1983) plus interest and income, forfeited in favor of the Republic.

Issues Framed by Petitioners on Review

Petitioners raised four principal issues: (1) whether forfeiture proceedings under R.A. 1379 are criminal in nature so that summary judgment is impermissible; (2) whether the Republic complied with R.A. 1375 Section 3(c), (d), and (e) (requirements as to petition contents, including income comparisons); (3) whether Civil Case No. 0141 had been terminated so as to bar further partial summary judgment motions; and (4) whether genuine, triable issues exist that would preclude summary judgment as to Arelma.

Nature of Forfeiture Proceedings and Applicability of Summary Judgment

The Court reaffirmed that proceedings under R.A. 1379 are civil, in rem, not criminal, although they possess quasi‑criminal aspects limited to protection against self‑incrimination. The decision relied on established precedent distinguishing civil forfeiture from criminal prosecution: R.A. 1379 culminates in property forfeiture, not criminal penalties, and its procedure follows civil action mechanics (petition, answer, hearing). The quasi‑criminal feature merely preserves the privilege against self‑incrimination, expressly protected by R.A. 1379 Section 8. Because the proceedings are civil, Rule 35 on summary judgment applies; prior Supreme Court affirmance of summary judgment for the Swiss deposits supported summary disposition in forfeiture cases where no genuine triable issues exist.

Compliance with R.A. 1375 Requirements and Law of the Case

Petitioners argued the Republic failed to meet petition requirements under R.A. 1375 Sections 3(c), (d), and (e) by not accounting for Ferdinand Marcos’s earnings prior to incumbency (1940–1965) and other alleged lawful sources. The Court refused to revisit the factual determinations already established in the Swiss Deposits Decision, invoking the law‑of‑the‑case principle. The Supreme Court had found the Sandiganbayan’s factual findings comprehensive and convincing; petitioners’ attempt to relitigate factual matters via a Rule 45 petition was improper and redundant.

Prima Facie Presumption of Manifestly Disproportionate Wealth

The Court reiterated the elements for the prima facie presumption under R.A. 1379: (1) the respondent is a public officer; (2) acquisition of substantial property during incumbency; and (3) such property is manifestly out of proportion to official salary and lawful income during the incumbency period. The relevant period is incumbency. Based on admitted documentary evidence (ITRs, balance sheets, certification of official salaries) and the Sandiganbayan’s findings, the combined lawful income of the Marcos spouses for 1966–1986 converted to U.S. dollars totaled USD 304,372.43, whereas the spouses’ reported net worth and other schedules revealed substantial unexplained assets and anomalous reported “legal practice” receivables. The Republic established the prima facie presumption of manifestly disproportionate wealth; petitioners’ general denials did not successfully rebut it.

Evidence Concerning Arelma and Documentary Basis

Malacañang documents (including Annex V‑21) were described as containing letters of instruction and opening bank documents showing the establishment of Arelma, the appointment of attorneys and nominees, and steps to open and operate a Merrill Lynch account. Annex V‑21‑ba contained a Merrill Lynch valuation dated 19 May 1983 showing Arelma’s assets at USD 3,369,975. Petition paragraph 59 set out detailed allegations regarding Arelma’s formation and account history, and the petition appended supporting documents produced with assistance from foreign authorities; these documentary allegations remained largely unchallenged in a specific manner by petitioners’ answer.

Jurisdiction, Termination of Civil Case No. 0141, and Separate Partial Judgments

Petitioners contended that the Swiss Deposits Decision constituted a final adjudication of Civil Case No. 0141 and therefore precluded later partial summary judgment as to Arelma. The Court rejected that contention, explaining that the Swiss Deposits Decision finally disposed only of the five Swiss foundation accounts specifically covered by the 2000 motion. Rule 36, Section 5 (separate judgments) and Rule 35 permit rendering separate judgments on discrete claims presented in the same action; a prior partial summary judgment on one subject matter does not bar a separate summary ad

Case Syllabus (A.C. No. 6297)

Procedural Posture and Relief Sought

Two consolidated Rule 45 petitions (G.R. Nos. 189434 and 189505) seek reversal of the Sandiganbayan Decision dated 2 April 2009 in Civil Case No. 0141 (Republic of the Philippines v. Heirs of Ferdinand E. Marcos and Imelda R. Marcos).
The Sandiganbayan had granted the Republic’s Motion for Partial Summary Judgment declaring assets of Arelma, S.A. forfeited to the Republic.
Petitioners (Ferdinand R. Marcos, Jr. and Imelda Romualdez-Marcos) challenge that ruling before the Supreme Court.
The Republic, through the PCGG and OSG, originally sought forfeiture of various assets (Swiss accounts, treasury notes, and properties of dummy corporations) in Civil Case No. 0141 pursuant to R.A. No. 1379 and Executive Orders Nos. 1, 2 and 14.
The relief granted by the Sandiganbayan declared Arelma, Inc. assets (Merrill Lynch, New York account) with an estimated aggregate amount of US$3,369,975.00 as of 1983, plus accrued interests and income, forfeited in favor of the Republic.

Case Facts and Background

On 17 December 1991, the Republic, via the PCGG, filed a Petition for Forfeiture under R.A. No. 1379 docketed as Civil Case No. 0141.
The Republic sought, among others: Swiss bank accounts totaling USD 356 million (later referred to as USD 658 million), two treasury notes (USD 25M and USD 5M), and assets of dummy corporations and entities established by nominees of Ferdinand and Imelda Marcos.
Swiss accounts were deposited in escrow with Philippine National Bank (PNB); the treasury notes were frozen by the Bangko Sentral ng Pilipinas (BSP).
The Petition identified a corporate entity “Arelma, Inc.” (also referenced as Arelma, S.A.) that maintained an account and portfolio with Merrill Lynch, New York, purportedly organized to hide ill-gotten wealth.
When the Marcos family fled in 1986, Malacañang documents were left behind that revealed secret deposits and the establishment/operation of Arelma, Inc.; Annex V-21 contained letters, instructions, and documents concerning Arelma and opening accounts with Merrill Lynch.
Annex V-21-ba (letter of J.L. Sunier dated 19 May 1983) valued Arelma’s assets at US$3,369,975 as of that date.
The Republic’s evidence was collated with assistance from the U.S. Justice Department and Swiss Federal Police.

Compromise Agreements, Prior Motions, and Relevant Proceedings

Before pretrial, the Marcos children and PCGG Chair Magtanggol Gunigundo signed a General Agreement and Supplemental Agreements dated 28 December 1993 for a global settlement of Marcos assets.
In 1996 the Republic filed a Motion for Summary Judgment (1996 Motion) regarding the USD 356 million; Sandiganbayan denied it because of the pending motion to approve the Compromise Agreements.
On 10 March 2000 the Republic filed another Motion for Summary Judgment (2000 Motion) limited to the Swiss accounts (USD 356 million). On 19 September 2000, the Sandiganbayan initially granted the 2000 Motion declaring the Swiss deposits ill-gotten and forfeited.
The Sandiganbayan reversed that grant in a Resolution dated 31 January 2002. The Republic filed certiorari to the Supreme Court (G.R. No. 152154). The Supreme Court set aside the 31 January 2002 Resolution and reinstated the 19 September 2000 Decision (the “Swiss Deposits Decision”).
On 16 July 2004, the Republic filed a Motion for Partial Summary Judgment (2004 Motion) to declare “the funds, properties, shares in and interests of ARELMA” as ill-gotten and forfeited pursuant to R.A. 1379 in the same manner as other Marcos foundations.
The Sandiganbayan, by Decision dated 2 April 2009, granted the 2004 Motion and declared Arelma assets forfeited (estimated amount US$3,369,975.00 as of 1983, plus interests and income).
Petitioners filed Rule 45 petitions to the Supreme Court contesting that 2 April 2009 Decision; the petitions were consolidated.

Issues Presented on Review (as framed by petitioners)

Whether Civil Case No. 0141 forfeiture proceedings are criminal in nature so that summary judgment is not allowed.
Whether the Republic complied with Section 3, subparagraphs c, d, and e of R.A. 1375 (as raised by petitioners).
Whether Civil Case No. 0141 has been terminated so that a motion for partial summary judgment may no longer be allowed.
Whether there exist genuine, triable issues which would preclude the application of summary judgment.

Holding (Supreme Court Disposition)

The Supreme Court denied the consolidated Rule 45 petitions and affirmed the Sandiganbayan Decision dated 2 April 2009.
All assets, properties, and funds belonging to Arelma, S.A., with an estimated aggregate amount of US$3,369,975 as of 1983, plus all interests and other income accrued thereon until release/transfer to the Republic, were declared forfeited in favor of the Republic of the Philippines.

Legal Reasoning — Nature of Forfeiture Proceedings (Civil, not Criminal)

Forfeiture proceedings under R.A. No. 1379 are civil in nature and actions in rem; they terminate in forfeiture of property, not in the imposition of a penalty or imprisonment.
Precedents cited: Almeda v. Judge Perez, Cabal v. Kapunan, Republic v. Sandiganbayan, and the Swiss Deposits Decision recognizing R.A. 1379 proceedings as civil or quasi-criminal only to the limited extent of applicability of the privilege against self-incrimination.
Section 8 of R.A. 1379 protects against self-incrimination by prohibiting prosecution for compelled testimony, preserving protection against compelled criminal testimony while allowing compelled production with immunity from prosecution for the produced matters.
Executive Order No. 14 authorizes the PCGG to file independent civil forfeiture suits separate from criminal proceedings; E.O. 14 and Section 3 thereof empower the PCGG to pursue civil recovery independent of criminal actions.

Legal Reasoning — Compliance with Petition Requirements and Prima Facie Presumption

R.A. 1379 establishes a prima facie presumption that property acquired during incumbency manifestly out of proportion to salary and lawful income is unlawfully acquired.
Elements for the prima facie presumption: (1) respondent is a public officer/employee; (2) acquired considerable money/property during incumbency; (3) amount manifestly out of proportion to salary and lawful income.
Required contents of a forfeiture petition (as quoted): (a) name/address of respondent; (b) public offices held; (c) approximate am