Title
Marcos, Jr. vs. Republic
Case
G.R. No. 189434
Decision Date
Apr 25, 2012
The Supreme Court upheld the forfeiture of Arelma, S.A.'s assets, ruling them as ill-gotten wealth due to the Marcoses' disproportionate lawful income.
civil forfeiture case
summary judgment
assets

Case Summary (G.R. No. 189434)

Factual Background

The PCGG, acting for the Republic, filed a Petition for Forfeiture in 1991 seeking recovery of alleged ill-gotten wealth amassed by former President Ferdinand E. Marcos and associates. The petition identified multiple groups of foreign foundations holding Swiss accounts totaling USD 356 million (later valued at USD 658 million), two treasury notes, and various assets held through dummy corporations and nominees. Among the entities described was Arelma, S.A., a Panamanian corporation with an account and portfolio at Merrill Lynch, New York, valued at USD 3,369,975 as of 1983. The petition rested on documentary evidence obtained with assistance from foreign authorities.

Compromise Agreements and Early Motions

Before pretrial, members of the Marcos family and the PCGG signed Compromise Agreements dated 28 December 1993 for a proposed global settlement of Marcos assets. The Republic later filed a Motion for Summary Judgment in 1996 directed at the USD 356 million Swiss deposits; that motion was denied because proceedings on the global settlement took precedence. The Republic then renewed a motion in 2000 targeted specifically at the five Swiss accounts.

Swiss Deposits Proceedings and Supreme Court Review

The Sandiganbayan initially granted the 2000 Motion and declared the Swiss deposits forfeited. It later reversed that grant in a 31 January 2002 resolution. The Republic filed a petition for certiorari with the Supreme Court in G.R. No. 152154, which set aside the Sandiganbayan resolution and reinstated the earlier grant of summary judgment. The Supreme Court denied reconsideration on 18 November 2003, rendering the forfeiture of the Swiss deposits final.

The 2004 Motion and Arelma Claim

On 16 July 2004 the Republic filed a Motion for Partial Summary Judgment seeking forfeiture of funds, properties, shares, and interests of ARELMA wherever located, invoking R.A. 1379 and analogizing to the forfeiture of other Marcos-related foundations. The motion specifically sought judgment as to the Arelma assets identified in the original Petition for Forfeiture.

Sandiganbayan Decision of 2 April 2009

The Sandiganbayan granted the 2004 Motion and rendered partial summary judgment declaring assets and funds of Arelma, Inc. (managed at Merrill Lynch, New York) in the estimated aggregate amount of USD 3,369,975 as of 1983, plus interests and income, forfeited in favor of the Republic. The court reasoned that the earlier Swiss-deposits judgment did not terminate Civil Case No. 0141 in its entirety and that separate judgments as to different subject matters were permissible.

Issues Presented to the Supreme Court

The consolidated petitions raised four principal issues: (1) whether a forfeiture proceeding under R.A. 1379 is criminal in nature such that summary judgment is impermissible; (2) whether the Republic complied with Section 3, subparagraphs c, d, and e of R.A. 1375; (3) whether Civil Case No. 0141 had terminated so as to bar any further partial summary judgment; and (4) whether genuine triable issues existed to preclude summary judgment in respect of the Arelma assets.

Petitioners’ Core Contentions

Petitioners argued that forfeiture under R.A. 1379 carried penal consequences and thus entitled respondents to the procedural protections of a criminal trial, including the right to present evidence at a full trial pursuant to Section 5 of R.A. 1379. They also contended that the Republic had not satisfied the statutory requisites of the forfeiture petition, specifically the approximation of property acquired during incumbency and full accounting of earnings for relevant periods. Petitioners further asserted that the Swiss deposits judgment had effectively terminated Civil Case No. 0141 and therefore precluded subsequent partial summary judgment regarding Arelma. Finally, petitioners maintained that the pretrial record and pretrial orders evidenced genuine factual issues requiring trial.

Classification of Forfeiture Proceedings

The Court reviewed precedents distinguishing civil forfeiture from criminal proceedings and reiterated that forfeiture suits under R.A. 1379 are civil in nature and in rem. The Court explained that such proceedings are remedial and terminate in forfeiture of property to the State rather than in fines or imprisonment. The Court acknowledged that forfeiture proceedings have quasi-criminal attributes only insofar as protections such as the privilege against self-incrimination apply, but held that classification as civil permits application of summary judgment under Rule 35.

Compliance with Statutory Requirements

The Court examined the requisites of a petition under R.A. 1379 and found the Republic’s petition sufficient. The decision relied on the detailed presentations and documentary proofs earlier deemed thorough and convincing by the Sandiganbayan and affirmed by this Court in the Swiss Deposits Decision. The Court rejected petitioner Marcos, Jr.’s invitation to revisit those factual findings, explaining that the issues here sought to relitigate matters already finally resolved and that petitioners had not raised those particular alleged evidentiary gaps at the proper stage.

Law of the Case and Finality of Prior Rulings

The Court applied the law of the case doctrine to bar relitigation of legal and factual determinations made and affirmed in the Swiss Deposits Decision. It held that petitioners could not use the present Rule 45 petitions to attack findings that had become controlling in the ongoing Civil Case No. 0141 and that the factual premises underpinning the earlier rulings continued to obtain.

Civil Case No. 0141 Not Terminated

The Court rejected petitioners’ contention that the Swiss deposits judgment had terminated Civil Case No. 0141. It emphasized that the 2000 Motion and the Swiss-deposits judgment concerned only the five Swiss accounts. Civil Case No. 0141 originally encompassed many more assets, including the Arelma account, and Rule 36, Section 5 authorized separate judgments disposing of particular claims while leaving the action pending as to remaining claims. The Court therefore deemed the Sandiganbayan’s grant of partial summary judgment as properly rendered under the rules governing separate judgments.

Foreign Litigations and the Arelma Assets

The Court narrated the international litigation history affecting the Arelma assets, including competing claims by human-rights victims in U.S. courts and proceedings involving interpleader and sovereign immunity. The Court noted that developments in foreign courts delayed full resort to summary disposition in the Philippines, and that the Republic only later pursued summary judgment on Arelma after pertinent foreign proceedings matured, including a United States Supreme Court r

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