Case Summary (G.R. No. 77663)
Issue Presented
The primary question was whether the Regional Trial Courts (RTCs) have jurisdiction over the PCGG and properties sequestered under its authority, and whether RTCs may issue orders restraining or setting aside PCGG actions involving recovery of ill-gotten wealth from the former Marcos regime. The petitioner sought to annul RTC orders issued on February 16 and March 5, 1987, contending lack of jurisdiction and grave abuse of discretion.
Background Facts
PCGG, created to recover ill-gotten wealth amassed by the Marcoses and associates, issued orders freezing assets of American Inter-fashion Corporation and De Soleil Apparel Manufacturing Corporation, both companies having joint ventures between local and Hong Kong investors (including respondents). PCGG appointed Ms. Noemi L. Saludo as Officer-in-Charge (OIC) to manage these companies and authorized certain signatories for transaction purposes. Later, Saludo revoked some authorizations due to violation of immigration status by one signatory and appointed replacements.
Respondents filed an action for damages with an injunction in RTC Pasig, challenging the revocation of authorization and seeking protection against PCGG’s order. RTC issued temporary restraining order and later granted preliminary injunction against the Commission. PCGG contested the RTC actions, alleging lack of jurisdiction and that these impede its recovery functions.
Supreme Court’s Holding on Jurisdiction
The Court unanimously held that RTCs do not have jurisdiction over PCGG or the properties sequestered under its mandate. The exclusive and original jurisdiction over all sequestration and cases involving ill-gotten wealth under the Marcos regime is vested in the Sandiganbayan, as provided by Executive Order No. 14 and confirmed by the 1987 Constitution (Art. XVIII, Sec. 26). Accordingly, RTC orders restraining PCGG actions are null and void, and the RTC case was dismissed.
Legal Basis for Exclusive Jurisdiction of Sandiganbayan
The Constitution and Executive Orders provide:
- PCGG has primary jurisdiction over investigation, sequestration, and management of ill-gotten wealth (Executive Orders Nos. 1 and 14).
- All cases concerning such properties, whether civil or criminal, must be filed with Sandiganbayan, which has exclusive original jurisdiction.
- Sandiganbayan’s decisions are subject to certiorari review only by the Supreme Court.
- The PCGG exercises quasi-judicial functions in issuing sequestration orders, which are subject to judicial determination of ownership by Sandiganbayan.
The Judiciary Reorganization Act excludes RTCs from jurisdiction over cases already within agencies with quasi-judicial powers like PCGG, unless such powers are specifically designated.
Immunity and Non-Interference in PCGG Functions
The Court emphasized the necessity of protecting PCGG from harassment by multiple suits in lower courts that would hinder its vital function. Executive Order No. 1 explicitly grants immunity from civil suits for PCGG and its members for acts done in good faith in the discharge of their duties. The provision is similar to judicial immunity, to enable efficient performance of their responsibilities without fear of vexatious litigation.
The Court underscored that interference by courts coordinate or inferior to the Supreme Court prevents PCGG from fulfilling its crucial role in recovering national wealth plundered by the previous regime, thus impairing public interest.
Administrative Jurisdiction and Exhaustion of Remedies
The Court recognized that disputes involving the validity of sequestration orders and related claims fall within PCGG’s primary administrative jurisdiction. Hence, parties disputing PCGG orders must exhaust administrative remedies, including appeals to the President, before resorting to courts, and eventually to Sandiganbayan when ownership and illegality issues arise. This follows the principles of comity and respect for agency expertise and discretion, as well as the avoidance of multiplicity of suits and conflicting rulings.
Police Power and Public Interest Justification
The Court explained that PCGG’s powers are rooted in the State’s police power to promote the public welfare by recovering public funds wrongfully appropriated. These powers include sequestering assets to prevent their dissipation and to conserve public resources. Given the gravity of the Marcos regime’s plunder, the broad and exclusive jurisdiction is warranted to ensure effective and orderly recovery, indispensable for national survival and economic rehabilitation.
Evidentiary Summary and Factual Complexity
The Court noted the detailed submission by the Solicitor General presenting prima facie evidence of ill-gotten wealth transacted through complex corporate structures and nominee arrangements. While not conclusive of fact—these matters must be proven in Sandiganbayan—the court acknowledged the necessity of such centralized jurisdiction given the intricate and widespread nature of plundered assets.
PCGG’s Accomplishments as Context
Though not central to the legal holding, the Court cited the extensive recovery efforts and substantial amounts of cash, properties, and corporate assets sequestered or surrendered since PCGG’s inception. This backdrop supports the policy rationale for protecting PCGG’s administrative jurisdiction and immunities.
Separate Opinions Overview
Concurring Opinion (Justice Feliciano):
Agreed substantially with the majority on jurisdictional exclusivity to Sandiganbayan. However, he clarified that PCGG exercises only loose quasi-judicial functions, functioning more as a prosecutor determining prima facie cases and not a tribunal adjudicating final legal rights. He expressed reservations on the broad immunity granted by Executive Order No. 1, cautioning that absolute immunity contravenes constitutional accountability mandates. Immu
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Case Syllabus (G.R. No. 77663)
Nature of the Case and Petition
- This case is a special civil action involving certiorari, prohibition, and mandamus, coupled with a preliminary injunction and/or restraining order.
- The petitioner, Presidential Commission on Good Government (PCGG), sought to set aside two trial court orders dated February 16 and March 5, 1987.
- Grounds for relief asserted include lack of jurisdiction and grave abuse of discretion by the respondent Regional Trial Court (RTC) Judge.
- The primary legal issue is whether the RTCs have jurisdiction over the PCGG and properties sequestered under its mandate as governed by Executive Orders Nos. 1, 2, and 14, and whether RTCs can interfere with or restrain the PCGG’s orders and actions.
Holding and Jurisdictional Issue
- The Supreme Court ruled that RTCs do not have jurisdiction over the PCGG in the exercise of its powers concerning ill-gotten wealth.
- Jurisdiction over all sequestration cases involving ill-gotten wealth and properties from the previous regime is exclusively vested with the Sandiganbayan.
- Only the Supreme Court may review Sandiganbayan’s decisions via certiorari.
- The PCGG exercises primarily administrative and quasi-judicial authority; thus, its orders are protected from interference from co-equal regional trial courts.
- The primacy of administrative jurisdiction vested in the PCGG was upheld to prevent multiplicity of suits and fragmentation of jurisdiction.
Factual Background and Parties Involved
- In March 1986, PCGG froze assets of two garment corporations, American Inter-fashion Corporation and De Soleil Apparel Manufacturing Corporation.
- Both corporations were organized in 1984 under joint venture agreements, with 67% stock held by Local Investors represented by Renato Francisco and Atty. Gregorio R. Castillo, and 33% by Hongkong Investors—respondents Yeung Chun Kam, Yeung Chun Ho, and Archie Chan.
- PCGG appointed Noemi L. Saludo as Officer-in-Charge (OIC) with full management authority over the corporations.
- Authorizations for signatories to handle company funds were issued and later revoked by Saludo due to visa irregularities of Mr. Yim Kam Shing, leading to the controversy.
- The private respondents filed an action before the RTC seeking damages and injunctive relief against the bank, PCGG, and its officers.
- The RTC issued a Temporary Restraining Order (TRO) and later a preliminary injunction restraining PCGG’s orders and operations on the companies’ funds.
Procedural History and Relief Sought
- PCGG filed a motion to dismiss based on lack of jurisdiction and immunity from suits rooted in its official functions.
- The RTC denied the motion and granted the preliminary injunction.
- PCGG then filed the present petition with the Supreme Court to nullify the RTC’s orders and to enjoin the lower court from proceeding with the case.
- The Supreme Court issued a temporary restraining order against enforcement of the RTC orders, limiting PCGG withdrawals to necessary operating expenses and salaries.
Legal Basis of PCGG Powers and Jurisdiction
- PCGG was created by Executive Order No. 1 (February 28, 1986) to recover ill-gotten wealth accumulated by the Marcos regime.
- The Commission was vested with powers to sequester assets, manage entities, prevent dissipation of properties, conduct investigations, and promulgate rules and regulations.
- Executive Order No. 14 (May 7, 1986) vested exclusive and original jurisdiction over all civil and criminal cases involving such ill-gotten wealth with the Sandiganbayan.
- The 1987 Constitution’s Article XVIII, Section 26, provides for issuance of sequestration or freeze orders upon showing of a prima facie case and sets judicial review periods.
- The Court emphasized the quasi-judicial nature of the PCGG and emphasized co-equality with RTCs, barring latter’s jurisdiction over PCGG’s core functions.
- Batas Pambansa Blg. 129, Section 9(3) supports that RTCs and Court of Appeals do not have jurisdiction over quasi-judicial agencies like the PCGG in such matters.
Immunity from Suit and Public Policy Considerations
- Executive Order No. 1, Section 4(a) grants the PCGG and its members immunity from civil suits for acts done in the official discharge of its duties.
- Section 4(b) prohibits requiring PCGG members or staff to testify or produce evidence in judicial, legislative or administrative proceedings concerning official matters.
- The Court highlighted the public policy against multiplicity of suits and fragmentation of jurisdiction that would hamper the PCGG’s vital mission.
- The PCGG’s mission to recover the nation’s plundered wealth of billions of dollars was likened to a public necessity invoking the State’