In the case of PCGG vs.LUCIO TAN, et. al., G.R. Nos. 173553-56, December 7, 2007, which involved the doctrine of due process of law, the Philippine Supreme Court disciplined an agency of the Philippine Government for the baseless act of sequestering in 1986, without prima facie proof, the multi-billion assets of local taipan Lucio Tan, a suspected crony of deposed Philippine President Ferdinand Marcos.
On various dates in 1986 and on January 7, 1987, the Presidential Commission on Good Government (PCGG), petitioner, issued orders sequestering shares of stock of respondents in various corporations.
Soon after the issuance of the sequestration orders, respondents filed with petitioner petitions to lift the orders of sequestration. However, petitioner did not act on their motions. Consequently, in August and September, 1986, respondents filed with this Court petitions for certiorari, prohibition and injunction to nullify petitioner’s orders of sequestration. On February 15, 1990, this Court referred the petitions to the Sandiganbayan.
In their petitions with the Sandiganbayan, respondents alleged that petitioner violated their right against deprivation of “life, liberty or property without due process of law.”
On August 19, 1993, respondents filed with the Sandiganbayan a supplemental petition invoking Section 26, Article XVIII of the 1987 Constitution providing that “a sequestration or freeze order shall be issued only upon showing of a prima facie case.”
The Sandiganbayan declared the writs of sequestration issued by petitioner against respondents’ shares of stock to be void and of no legal effect.
The petitioner appealed to the Supreme Court.
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 Nos. 1 and 2. When a court nullifies an order of sequestration for having been issued without a prima facie showing that the properties sequestered are “ill-gotten wealth” under Executive Orders Nos. 1 and 2, the court does not substitute its judgment for that of the PCGG but simply applies the law.
Owners of properties have the “opportunity to contest” actions or orders of sequestration issued by the PCGG.
“Ill-gotten wealth” is that “acquired through or as a result of improper or illegal use of or the conversion of funds belonging to the Government or any of its branches, instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of official position, authority, relationship, connection or influence, resulting in unjust enrichment of the ostensible owner and grave damage and prejudice to the State.”
Concerning respondents’ shares of stock here, there is no evidence presented by petitioner that they belong to the Government of the
The only evidence held by petitioner prior to the issuance of the writs of sequestration was the minutes of its meetings. Although there were 190 exhibits, however, petitioner, prior to the issuance of the orders of sequestration, had no evidence to prove that respondents’ shares of stock are prima facie “ill-gotten wealth.”
While it has been held in that orders of sequestration may issue ex parte¸ it was emphasized that a prima facie factual foundation that the properties sequestered are “ill-gotten wealth” is required, and that the person whose property is sequestered has the opportunity to contest the validity of sequestration pursuant to Sections 5 and 6 of the Rules and Regulations of PCGG itself.
Indeed, that “opportunity to contest” includes resort to the courts. The “opportunity to contest” will be meaningless unless there is a record, on the basis of which the reviewing authority, including the court, may determine whether the PCGG’s ruling that the property sequestered is “ill-gotten wealth” was issued “with grave abuse of discretion amounting to lack or excess of jurisdiction.”
That record should include the reason why the shares of stock are being sequestered and the record of the proceedings, on the basis of which, issuance of the order of sequestration was authorized. Those records do not exist here.
Without any reason in the sequestration order why respondents’ shares of stock were being sequestered, it would be impossible to determine whether the order of sequestration was issued with any prima facie factual foundation.
Petitioner relied on the presumption of validity of official acts. Suffice it to state, the Court said, that such presumption undermines the basic principle embodied in the Constitution that public officers and employees “must at all times be accountable to the people.
It must be emphasized that petitioner’s evidence does not show how the properties sequestered were acquired by respondents or that they are “ill-gotten wealth,” and whether former President Marcos intervened in their acquisition.
Lucio Tan, once again, is free to mobilize and multiply his wealth, thanks to the Court.
