DISPOSITIVE:

“WHEREFORE, the Orders of the respondent Commission on Audit dated July 2, 1996 and August 28, 1997 are SET ASIDE.

SO ORDERED.”

SUBJECTS/DOCTRINES/DIGEST:

WHAT HAPPENED IN THIS CASE?

THE CIVIL SERVICE COMMISSION RULED THAT DISMISSAL OF EMPLOYEES OF THE PROVINCIAL ENGINEERING OFFICE OF THE PROVINCE OF AGUSAN DEL SUL WAS ILLEGAL AND ORDERED PAYMENT OF BACK WAGES TO THESE EMPLOYEES. THE CSC ORDER BECAME FINAL. THE PROVINCIAL GOVERNMENT PARTIALLY COMPLIED BY PAYING  PARTIAL BACK WAGES BUT THEY ALSO MADE QUERY TO COAL ON THE LEGALITY OF THE CSC ORDER. COA DISALLOWED FURTHER PAYMENT OF BACK WAGES ON THE GROUND THAT SUCH PAYMENT MUST COME FROM THE GOVERNOR WHO DISMISSED THE EMPLOYEES IN BAD FAITH.

SUPREME COURT RULED THAT THE DISALLOWANCE OF BACKWAGES IS NOT PROPER BECAUSE THE JUDGMENT WAS ALREADY FINAL. BY MAKING SUCH RULING, COA WAS ALTERING THE FINAL DECISION OF THE CIVIL SERVICE COMMISSION.

SUPREME COURT CONSIDERED THE INJUSTICE THAT WILL BEFALL ON THE DISMISSED EMPLOYEES.

Petitioners’ sufferings started way back in 1988 when they were unceremoniously dismissed from the service. It took five years for the MSPB to decide in their favor. Still, they were not reinstated until the following year, and this only after several motions filed and orders issued to compel the concerned public officials to reinstate them. Then again, despite an Order issued as early as April 19, 1993 by the MSPB, the provincial government was able to pay petitioners, and even only partially at that, a good two and a half years after or on December 12, 1995. Now, after more than a decade, respondent COA holds that petitioners should run after Governor Paredes in his personal capacity to collect their claims. Worse, petitioners stand in danger of being made to reimburse what has been paid to them. Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privilege in life should have more in law. 24 Rightly, we have stressed that social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. 25 And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches but also on the judiciary to translate this pledge into a living reality. 26 Social justice would be a meaningless term if an element of rigidity would be affixed to the procedural precepts. Flexibility should not be ruled out. Precisely, what is sought to be accomplished by such a fundamental principle expressly so declared by the Constitution is the effectiveness of the community’s effort to assist the economically underprivileged. For under existing conditions, without such succor and support, they might not, unaided, be able to secure justice for themselves. To make them suffer, even inadvertently, from the effect of a judicial ruling, which perhaps they could not have anticipated when such deplorable result could be avoided, would be to disregard what the social justice concept stands for. 27

COA IN THEIR ORDER STATED THAT:

Anent the issue on jurisdiction, the Supreme Court had occasion to rule in the case of Department of Agriculture vs. National Labor Relations Commission . . ., thus:

Pursuant, however to C.A. No. 327, as amended by PD No. 1445, the money claim should first be brought to the Commission on Audit.

NOTE THAT THE CSC DECISION WAS ALREADY FINAL AND EXECUTORY. PER COA’S FOREGOING STATEMENT THIS MONEY CLAIM MUST FIRST BE BROUGHT BEFORE THE COMMISSION ON AUDIT. IN THE RECENT V.C. PONCE CASE (G.R. NO. 213821) THE SUPREME COURT RULED THAT THIS MUST BE SO BECAUSE COA ACTS AS AN EXECUTION COURT.  YET IN THE ABOVE CASE, THE SUPREME COURT DID NOT ORDER UY EL AL TO RETURN FIRST THE MONEYS RECEIVED BY THEM BECAUSE OTHERWISE INJUSTICE WOULD ACCRUE.

SAID THE SUPREME COURT:

“Social justice would be a meaningless term if an element of rigidity would be affixed to the procedural precepts. Flexibility should not be ruled out.”

IT IS SUBMITTED THAT THIS PRINCIPLE APPLIES TO ATTAINMENT OF JUSTICE IN GENERAL. NOT ONLY IN FAVOR OF WORKERS. IT CAN ALSO APPLY TO CONTRACTORS WHO ACCOMPLISHED WORKS FOR THE GOVERNMENT AND HAVE ALREADY BEEN PAID PURSUANT TO A FINAL AND EXECUTORY JUDGMENT. MUST THE PAYMENTS THEY RECEIVED BE RETURNED BY THEM MERELY BECAUSE EXECUTION MUST BE COURSED THROUGH COA? THESE PAYMENTS HAVE ALREADY BEEN PAID BY THE CONTRACTOR TO THEIR SUPPLIERS AND EMPLOYEES. SAME INJUSTICE WOULD BEFALL ON THEM IF THEY ARE TO RETURN THESE PAYMENTS.

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PEOPLE OF THE PHILIPPINES VS. SANDIGANBAYAN (FOURTH DIVISION) AND IMELDA R. MARCOS (G.R. NO. 155832, 07 DECEMBER 2010) SUBJECT: DELEGATION OF QUASI JUDICIAL POWER; ESTOPPEL.

THIS CASE IS ABOUT THE RESTHOUSE OF IMELDA IN OLOT LEYTE. SHE RECOVERED IT. FIND OUT WHY.

 READ THE FULL TEXT OF THE DECISION IN jabbulao.com under the category RECENT SUPREME COURT DECISIONS.

DIGEST:

FACTS:

ON 18 MARCH 1986, ATTY. RAMIREZ AND ATTY. ABELLA, PCGG AGENTS, ISSUED A SEQUESTRATION ORDER AGAINST THE RESTHOUS THE SOLE ISSUE PRESENTED IS WHETHER OR NOT THE MARCH 18, 1986 SEQUESTRATION ORDER AGAINST PROPERTIES OF IMELDA IN LEYTE INCLUDING THE RESTHOUSE AT OLOT. THEIR ORDER WAS NOT SIGNED BY ANY PCGG COMMISSIONERS.

ISSUE:

IS THEIR ORDER VALID?

RULING:

NO. JUDICIAL OR QUASI-JUDICIAL POWERS MAY NOT BE DELEGATED. IN PCGG V. JUDGE PEÑA,^[1][17] THE COURT HELD THAT THE POWERS, FUNCTIONS AND DUTIES OF THE PCGG AMOUNT TO THE EXERCISE OF QUASI-JUDICIAL FUNCTIONS, AND THE EXERCISE OF SUCH FUNCTIONS CANNOT BE DELEGATED BY THE COMMISSION TO ITS REPRESENTATIVES OR SUBORDINATES OR TASK FORCES BECAUSE OF THE WELL ESTABLISHED PRINCIPLE THAT JUDICIAL OR QUASI-JUDICIAL POWERS MAY NOT BE DELEGATED.

PETITIONER REPUBLIC ARGUES THAT MRS. MARCOS SHOULD BE DEEMED ESTOPPED FROM QUESTIONING THE SEQUESTRATION OF HER OLOT RESTHOUSE BY HER ACTIONS IN REGARD TO THE SAME.  BUT A VOID ORDER PRODUCES NO EFFECT AND CANNOT BE VALIDATED UNDER THE DOCTRINE OF ESTOPPEL.  FOR THE SAME REASON, THE COURT CANNOT ACCEPT PETITIONER’S VIEW THAT MRS. MARCOS SHOULD HAVE FIRST SOUGHT THE LIFTING OF THE SEQUESTRATION ORDER THROUGH A MOTION TO QUASH FILED WITH THE PCGG.  BEING VOID, THE SANDIGANBAYAN HAS THE POWER TO STRIKE IT DOWN ON SIGHT. 

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

RULING OF THE COURT:

The Court’s Ruling

Under Section 26, Article XVIII of the Constitution, an order of sequestration may only issue upon a showing “of a prima facie case” that the properties are ill-gotten wealth under Executive Orders 1 and 2.^[2][11]  When a court nullifies an order of sequestration for having been issued without a prima facie case, the Court does not substitute its judgment for that of the PCGG but simply applies the law.^[3][12]

In Bataan Shipyard & Engineering Co, Inc. v. PCGG,^[4][13] the Court held that a prima facie factual foundation that the properties sequestered are “ill-gotten wealth” is required.  The power to determine the existence of a prima facie case has been vested in the PCGG as an incident to its investigatory powers.  The two-commissioner rule is obviously intended to assure a collegial determination of such fact.^[5][14] 

Here, it is clear that the PCGG did not make a prior determination of the existence of a prima facie case that would warrant the sequestration of the Olot Resthouse. The Republic presented no evidence before the Sandiganbayan that shows differently.  Nor did the Republic demonstrate that the two PCGG representatives were given the quasi-judicial authority to receive and consider evidence that would warrant such a prima facie finding.

Parenthetically, the Republic’s supposed evidence does not show how the Marcoses acquired the sequestered property, what makes it “ill-gotten wealth,” and how former President Marcos intervened in its acquisition. Taking the foregoing view, the resolution of the issue surrounding the character of the property sequestered – whether or not it could prima facie be considered ill-gotten – should be necessary.

          The issue in this case is not new.  The facts are substantially identical to those in the case of Republic v. Sandiganbayan (Dio Island Resort, Inc.).^[6][15]  There, the same Atty. Ramirez issued a sequestration order on April 14, 1986 against Dio Island Resort, Inc. and all its assets and properties which were thought to be part of the Marcoses’ ill-gotten wealth.  Alerted by a challenge to his action, the PCGG passed a resolution “to confirm, ratify and adopt as its own all the Writs of Sequestration” that Attys. Ramirez and Abella issued “to remove any doubt as to the validity and enforceability” of their writs.  Still, the Court struck them down as void:

x x x  It is indubitable that under no circumstances can a sequestration or freeze order be validly issued by one not a Commissioner of the PCGG.

The invalidity of the sequestration order was made more apparent by the fact that Atty. Ramirez did not even have any specific authority to act on behalf of the Commission at the time he issued the said sequestration order. x x x

x x x x

Even assuming arguendo that Atty. Ramirez had been given prior authority by the PCGG to place Dio Island Resort under sequestration, nevertheless, the sequestration order he issued is still void since PCGG may not delegate its authority to sequester to its representatives and subordinates, and any such delegation is invalid and ineffective.

Under Executive Order Nos. 1 and 2, PCGG is the sole entity primarily charged with the responsibility of recovering ill-gotten wealth.  x x x The power to sequester, therefore, carries with it the corollary duty to make a preliminary determination of whether there is a reasonable basis for sequestering a property alleged to be ill-gotten.  After a careful evaluation of the evidence adduced, the PCGG clearly has to use its own judgment in determining the existence of a prima facie case. 

x x x x

The absence of a prior determination by the PCGG of a prima facie basis for the sequestration order is, unavoidably, a fatal defect which rendered the sequestration of respondent corporation and its properties void ab initio.  Being void ab initio, it is deemed non-existent, as though it had never been issued, x x x.^[7][16]

          The Court is maintaining its above ruling in this case. 

Although the two PCGG lawyers issued the sequestration order in this case on March 18, 1986, before the passage of Sec. 3 of the PCGG Rules, such consideration is immaterial following our above ruling. 

          In PCGG v. Judge Peña,^[8][17] the Court held that the powers, functions and duties of the PCGG amount to the exercise of quasi-judicial functions, and the exercise of such functions cannot be delegated by the Commission to its representatives or subordinates or task forces because of the well established principle that judicial or quasi-judicial powers may not be delegated.

It is the Republic’s theory of course that Commissioner Daza’s letter, directing Attys. Ramirez and Abella to search and sequester all properties, documents, money and other assets of respondents, should be considered as the writ of sequestration while the order issued by Attys. Ramirez and Abella  should be treated merely as an implementing order.

But the letter did not have the tenor of a sequestration order covering specific properties that the lawyers were ordered to seize and hold for the PCGG.   Actually, that letter is of the same kind issued to Attys. Ramirez and Abella in Dio Island Resort.  Consequently, there is no reason to depart from the Court’s ruling in the latter case where it said:

The invalidity of the sequestration order was made more apparent by the fact that Atty. Ramirez did not even have any specific authority to act on behalf of the Commission at the time he issued the said sequestration order.  Thus, the respondent Court noted:

“Contrary to plaintiff’s representation, nothing exists to support its contention that the Task Force had been given prior authority to place DIO under PCGG control.  On the contrary, as the text of the above letters clearly show, Attys. Jose Tan Ramirez and Ben Abella, had acted on broad and non-specific powers: ‘By authority of the commission and the powers vested in it. x x x.’”^[9][18]

Petitioner Republic argues that Mrs. Marcos should be deemed estopped from questioning the sequestration of her Olot Resthouse by her actions in regard to the same.  But a void order produces no effect and cannot be validated under the doctrine of estoppel.  For the same reason, the Court cannot accept petitioner’s view that Mrs. Marcos should have first sought the lifting of the sequestration order through a motion to quash filed with the PCGG.  Being void, the Sandiganbayan has the power to strike it down on sight. 

Besides, the lifting of the sequestration order will not necessarily be fatal to the main case since it does not follow from such lifting that the sequestered properties are not ill-gotten wealth. Such lifting simply means that the government may not act as conservator or may not exercise administrative or housekeeping powers over the property.^[10][19]  Indeed, the Republic can be protected by a notice of lis pendens.

WHEREFORE, the Court DISMISSES the petition for lack of merit and AFFIRMS the challenged resolutions of the Fourth Division of the Sandiganbayan dated February 28, 2002 and August 28, 2002 in Civil Case 0002, which granted respondent Imelda R. Marcos’ Motion to Quash the March 18, 1986 Sequestration Order covering the Olot Resthouse.

Further, the Court DIRECTS the Register of Deeds of Leyte to immediately annotate a notice of lis pendens on the certificate of title of the Olot Resthouse with respect to the Republic of the Philippines’ claim over the same in Civil Case 0002 of the Sandiganbayan. 

No pronouncement as to costs.

SO ORDERED.

ROBERTO A. ABAD

                                                              Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

      ANTONIO T. CARPIO              CONCHITA CARPIO MORALES    

  Associate Justice                                               Associate Justice

             (On Official Leave)                               

PRESBITERO J. VELASCO, JR.     ANTONIO EDUARDO B. NACHURA

               Associate Justice                                     Associate Justice

TERESITA J. LEONARDO-DE CASTRO       ARTURO D. BRION

                     Associate Justice                                 Associate Justice

                       (No part)

       DIOSDADO M. PERALTA                     LUCAS P. BERSAMIN

                 Associate Justice                                      Associate Justice        

 MARIANO C. DEL CASTILLO             MARTIN S. VILLARAMA, JR.

              Associate Justice                                     Associate Justice

  JOSE PORTUGAL PEREZ                           JOSE CATRAL MENDOZA

            Associate Justice                                       Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA

          Chief Justice