A 2014 Supreme Court resolution on the Marcos ill-gotten wealth

In the resolution of Supreme Court in the consolidated cases of (1) "FERDINAND R. MARCOS, JR., Petitioner, vs. REPUBLIC OF THE PHILIPPINES, represented by the Presidential Commission on Good Government, Respondent", G.R. No. 189434, March 12, 2014, and (2) "IMELDA ROMUALDEZ-MARCOS, Petitioner, vs. REPUBLIC OF THE PHILIPPINES, Respondent" , G.R. No. 189505, March 12, 2014, which resolution was written by former Chief Justice Maria Lores Sereno, it was stated that on 25 April 2012, the Court rendered a Decision affirming the 2 April 2009 Decision of the Sandiganbayan and declaring all the assets of Arelma, S.A., an entity created by the late Ferdinand E. Marcos, forfeited in favor of the Republic of the Philippines.

The anti-graft court found that the totality of assets and properties acquired by the Marcos spouses was manifestly and grossly disproportionate to their aggregate salaries as public officials, and that petitioners were unable to overturn the prima facie presumption of ill-gotten wealth, pursuant to Section 2 of Republic Act No. (RA) 1379.

The petitioners Ferdinand Marcos Jr. and Imelda Romualdez-Marcos sought reconsideration of the denial of their petition. The Court denied with finality the motion for reconsideration of the petitioners.

The corporate entity by the name "Arelma, Inc.," maintained an account and portfolio in Merrill Lynch, New York, and was purportedly organized for the purpose of hiding ill-gotten wealth.

The earlier Decision of the Court in G.R. No. 152154 affirmed the partial summary judgment only over the Swiss deposits which the Sandiganbayan declared as forfeited in favor of the Republic of the Philippines.

The Court however held that Respondent Republic’s success in obtaining summary judgment over the Swiss accounts did not mean its preclusion from seeking partial summary judgment over a different subject matter covered by the same petition for forfeiture.

The Court stated that the underlying forfeiture case docketed as Civil Case No. 0141 before the Sandiganbayan pertained to the recovery of all the assets enumerated therein, such as (1) holding companies, agro-industrial ventures and other investments; (2) landholdings, buildings, condominium units, mansions; (3) New York properties; (4) bills amounting to Php 27,744,535, time deposits worth Php 46.4 million, foreign currencies and jewelry seized by the United States customs authorities in Honolulu, Hawaii; (5) USD 30 million in the custody of the Central Bank in dollar-denominated Treasury Bills; shares of stock, private vehicles, and real estate in the United States, among others.

The Swiss Deposits Decision, G.R. No. 152154, dealt only with the summary judgment as to the five Swiss accounts, because the 2000 Motion for Partial Summary Judgment dated 7 March 2000 specifically identified the five Swiss accounts. It did not include the Arelma account.

The Court held that to subscribe to the view of petitioners would be to forever bar the State from recovering the assets listed above, including the properties it had specifically identified in its petition for forfeiture.

Petitioner Ferdinand Marcos, Jr. acknowledged that "the subject matter of the case (i.e. the power/authority to determine whether an asset may be forfeited under R.A. 1379) was within the (Sandiganbayan’s) jurisdiction."

However, he objected to the graft court’s purported lack of territorial jurisdiction on the theory that forfeiture is an action in rem. He argued that the Sandiganbayan must first acquire territorial jurisdiction over the Arelma proceeds before the judgment may be enforced.

At the outset, the Court stated that the theory of Ferdinand Marcos Jr. failed to make a distinction between the issuance of a judgment, and its execution.

The Court further stated that it was basic that the execution of a Court’s judgment was merely a ministerial phase of adjudication. The authority of the Sandiganbayan to rule on the character of these assets as ill-gotten could not be conflated with petitioner’s concerns as to how the ruling might be effectively enforced.

More importantly, petitioner Ferdinand Marcos Jr. was reminded by the Court of his earlier insistence that R.A. 1379 was penal, therefore petitions for forfeiture filed under this law were actions in personam, not in rem.

In the aforementioned Swiss Deposits case, the Court held that Petitioner Republic had the right to a speedy disposition of this case. The Court stated that it was apparent that respondent Marcoses had been deliberately resorting to every procedural device to delay the resolution thereof. The people and the State were entitled to favorable judgment, free from vexatious, capricious and oppressive delays.

The Court held that the Sandiganbayan did not err in granting the Motion for Partial Summary Judgment, despite the fact that the Arelma account and proceeds were held abroad. To rule otherwise would contravene the intent of the forfeiture law, and would indirectly privilege violators who were able to hide public assets abroad: beyond the reach of the courts and their recovery by the State.

The Court held that forfeiture proceedings were actions considered to be in the nature of proceedings in rem or quasi in rem, such that jurisdiction over the res was acquired either (a) by the seizure of the property under legal process, whereby it was brought into actual custody of the law; or (b) as a result of the institution of legal proceedings, in which the power of the court was recognized and made effective. In the latter condition, the property, though at all times within the potential power of the court, might not be in the actual custody of said court.

The concept of potential jurisdiction over the res provides that in order that the court may exercise power over the res, it is not necessary that the court should take actual custody of the property, potential custody thereof being sufficient. There is potential custody when, from the nature of the action brought, the power of the court over the property is impliedly recognized by law.

Finally, the Court took note of the Decision rendered by the Appellate Division of the New York Supreme Court on 26 June 2012. In Swezey v. Merrill Lynch, Pierce, Fenner & Smith, Inc., the foreign court agreed with the dismissal of the turnover proceeding against the Arelma assets initiated by alleged victims of human rights abuses during the Marcos regime. It reasoned that the Republic was a necessary party, but could not be subject to joinder in light of its assertion of sovereign immunity.

In the foregoing US decision, the New York Supreme Court held that the Republic of the Philippines' national interests would be severely prejudiced by a turnover proceeding because it had asserted a claim of ownership regarding the Arelma assets that rests on several bases: the Philippine forfeiture law that predated the tenure of President Marcos; evidence demonstrating that Marcos looted public coffers to amass a personal fortune worth billions of dollars; findings by the Philippine Supreme Court and Swiss Federal Supreme Court that Marcos stole related assets from the Republic; and, perhaps most critically, the recent determination by the Philippine Supreme Court that Marcos pilfered public funds.


Read:

https://www.lawphil.net/judjuris/juri2014/mar2014/gr_189434_2014.html