Complaint for REVERSION, RECONVEYANCE , RESTITUTION , ACCOUNTING and DAMAGES against Ferdinand E. Marcos, who was later substituted by his ESTATE upon his death; IMELDA R. Marcos; and herein respondents IMEE Marcos-Manotoc, IRENE Marcos-Araneta, BONGBONG Marcos, Tomas Manotoc, and Gregorio Araneta III. The case involved P200 BILLION of the Marcoses' alleged accumulated ILL-GOTTEN WEALTH

SUMMARY: On 16 July 1987, the PCGG, acting on behalf of the Republic and assisted by the Office of the Solicitor General (OSG), filed a Complaint for REVERSION, RECONVEYANCE , RESTITUTION , ACCOUNTING and DAMAGES against Ferdinand E. Marcos, who was later substituted by his ESTATE upon his death; IMELDA R. Marcos; and herein respondents IMEE Marcos-Manotoc, IRENE Marcos-Araneta, BONGBONG Marcos, Tomas Manotoc, and Gregorio Araneta III. The case involved P200 BILLION of the Marcoses' alleged accumulated ILL-GOTTEN WEALTH. -

SUPREME COURT DECISION:

The 2012 decision of the Supreme Court, written by former Chief Justice Maria Lourdes Sereno, in the case entitled REPUBLIC OF THE PHILIPPINES PETITIONER, VS. MA. IMELDA "IMEE" R. MARCOS-MANOTOC, et. al., docketed as GR No. 171701 and dated February 08, 2012, involved P200 billion of the Marcoses' alleged accumulated ill-gotten wealth. It also included the alleged use of the media networks IBC-13, BBC-2 and RPN-9 for the Marcos family's personal benefit; the alleged use of De Soleil Apparel for dollar salting; and the alleged illegal acquisition and operation of the bus company Pantranco North Express, Inc. (Pantranco).

After the EDSA People Power Revolution in 1986, the first executive act of then President Corazon C. Aquino was to create the Presidential Commission on Good Government (PCGG). Pursuant to Executive Order No. 1, the PCGG was charged with the task of assisting the President in the recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover or sequestration of all business enterprises and entities owned or controlled by them, during his administration, directly or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship.

On 16 July 1987, the PCGG, acting on behalf of the Republic and assisted by the Office of the Solicitor General (OSG), filed a Complaint for REVERSION, RECONVEYANCE , RESTITUTION , ACCOUNTING and DAMAGES against Ferdinand E. Marcos, who was later substituted by his ESTATE upon his death; Imelda R. Marcos; and herein respondents Imee Marcos-Manotoc, Irene Marcos-Araneta, Bongbong Marcos, Tomas Manotoc, and Gregorio Araneta III.

The Complaint, inter alia, alleged that the

"defendants Imelda (IMEE) R. Marcos-Manotoc, Tomas Manotoc, Irene R. Manotoc (sic) Araneta, Gregorio Ma. Araneta III, and Ferdinand R. Marcos, Jr., actively collaborated, with Defendants Ferdinand E. Marcos and Imelda R. Marcos among others, in confiscating and/or unlawfully appropriating funds and other property, and in concealing the same as described above."

The complaint further alleged that "each of the said Defendants, either by taking undue advantage of their relationship with Defendants Ferdinand E. Marcos and Imelda R. Marcos, or by reason of the above-described active collaboration, unlawfully acquired or received property, shares of stocks in corporations, illegal payments such as commissions, bribes or kickbacks, and other forms of improper privileges, income, revenues and benefits."

Thus, Republic set forth the following CAUSES OF ACTION in its Complaint:

1. First Cause of Action: BREACH OF PUBLIC TRUST - A public office is a public trust. By committing all the acts described above, Defendants repeatedly breached public trust and the law, making them liable solidarily to Plaintiff. The funds and other property acquired by Defendants following, or as a result of, their breach of public trust, some of which are mentioned or described above, estimated to amount to ?200 billion are deemed to have been acquired for the benefit of Plaintiff and are, therefore, impressed with constructive trust in favor of Plaintiff and the Filipino people. Consequently, Defendants are solidarily liable to restore or reconvey to Plaintiff all such funds and property thus impressed with constructive trust for the benefit of Plaintiff and the Filipino people.

2. Second Cause of Action: ABUSE OF RIGHT AND POWER -

(a) Defendants, in perpetrating the unlawful acts described above, committed abuse of right and power which caused untold misery, sufferings and damages to Plaintiff. Defendants violated, among others Articles 19, 20, and 21 of the Civil Code of the Philippines;

(b) As a result of the foregoing acts, Defendants acquired the title to the beneficial interest in funds and other property and concealed such title, funds and interest through the use of relatives, business associates, nominees, agents, or dummies. Defendants are, therefore, solidarily liable to Plaintiff to return and reconvey all such funds and other property unlawfully acquired by them estimated at TWO HUNDRED BILLION PESOS, or alternatively, to pay Plaintiff, solidarily, by way of indemnity, the damage caused to Plaintiff equivalent to the amount of such funds or the value of other property not returned or restored to Plaintiff, plus interest thereon from the date of unlawful acquisition until full payment thereof.

3. Third Cause of Action: UNJUST ENRICHMENT -

Defendants illegally accumulated funds and other property whose estimated value is P200 billion in violation of the laws of the Philippines and in breach of their official functions and fiduciary obligations. Defendants, therefore, have unjustly enriched themselves to the grave and irreparable damage and prejudice of Plaintiff. Defendants have an obligation at law, independently of breach of trust and abuse of right and power, and as an alternative, to solidarily return to Plaintiff such funds and other property with which Defendants, in gross evident bad faith, have unjustly enriched themselves or, in default thereof, restore to Plaintiff the amount of such funds and the value of the other property including those which may have been wasted, and/or lost estimated at P200 billion with interest thereon from the date of unlawful acquisition until full payment thereof.

4. Fourth Cause of Action: ACCOUNTING -

The Commission, acting pursuant to the provisions of the applicable law, believe that Defendants, acting singly or collectively, in unlawful concert with one another, and with the active collaboration of third persons, subject of separate suits, acquired funds, assets and property during the incumbency of Defendant public officers, manifestly out of proportion to their salaries, to their other lawful income and income from legitimately acquired property. Consequently, they are required to show to the satisfaction of this Honorable Court that they have lawfully acquired all such funds, assets and property which are in excess of their legal net income, and for this Honorable Court to decree that the Defendants are under obligation to account to Plaintiff with respect to all legal or beneficial interests in funds, properties and assets of whatever kind and wherever located in excess of the lawful earnings or lawful income from legitimately acquired property.

5. Fifth Cause of Action - LIABILITY FOR DAMAGES -

(a) By reason of the unlawful acts set forth above, Plaintiff and the Filipino people have suffered actual damages in an amount representing the pecuniary loss sustained by the latter as a result of the Defendants' unlawful acts, the approximate value and interest of which, from the time of their wrongful acquisition, are estimated at P200 billion plus expenses which Plaintiff has been compelled to incur and shall continue to incur in its effort to recover Defendants' ill-gotten wealth all over the world, which expenses are reasonably estimated at P250 million. Defendants are, therefore, jointly and severally liable to Plaintiff for actual damages in an amount reasonably estimated at P200 Billion Pesos and to reimburse expenses for recovery of Defendants' ill-gotten wealth estimated to cost P250 million or in such amount as are proven during the TRIAL.

The petition filed by the REPUBLIC before the Supreme Court raised the same issues it had earlier raised in its Motion for Reconsideration filed before the Sandiganbayan, to wit:

THE SANDIGANBAYAN ERRED IN GRANTING THE DEMURRER TO EVIDENCE FILED BY RESPONDENTS MA. IMELDA (IMEE) R. MARCOS AND FERDINAND (BONGBONG) R. MARCOS, JR., CONSIDERING THAT MORE THAN PREPONDERANT EVIDENCE ON RECORD CLEARLY DEMONSTRATES THEIR CONNIVANCE WITH FORMER PRESIDENT FERDINAND E. MARCOS AND OTHER MARCOS DUMMIES AND ABUSED THEIR POWER AND INFLUENCE IN UNLAWFULLY AMASSING FUNDS FROM THE NATIONAL TREASURY.

PETITION PROVED, BY MORE THAN PREPONDERANT EVIDENCE, THAT RESPONDENT-SPOUSES GREGORIO ARANETA III AND IRENE MARCOS ARANETA CONNIVED WITH FORMER PRESIDENT MARCOS IN UNLAWFULLY ACQUIRING BUSINESS INTERESTS WHICH ARE GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT, AND IN A MANNER PROHIBITED UNDER THE CONSTITUTION AND ANTI-GRAFT STATUTES.

RESPONDENTS IMEE, BONGBONG, AND IRENE MARCOS ARE COMPULSORY HEIRS OF FORMER PRESIDENT MARCOS AND ARE EQUALLY OBLIGED TO RENDER AN ACCOUNTING AND RETURN THE ALLEGED ILL-GOTTEN WEALTH OF THE MARCOSES.

THERE EXISTS CONCRETE EVIDENCE PROVING THAT RESPONDENTS YEUNG CHUN KAM, YEUNG CHUN FAN, AND YEUNG CHUN HO ACTED AS DUMMIES FOR THE MARCOSES, AND USED THE CORPORATION, GLORIOUS SUN, AS A CONDUIT IN AMASSING THE ILL-GOTTEN WEALTH. ACCORDINGLY, THE SANDIGANBAYAN ERRED IN GRANTING THEIR DEMURRER TO EVIDENCE.

THE DEMURRER TO EVIDENCE FILED BY INTERVENOR PEA-PTGWO WITH RESPECT TO THE PANTRANCO ASSETS SHOULD NOT HAVE BEEN GRANTED SINCE AMPLE EVIDENCE PROVES THAT THE SAID ASSETS INDUBITABLY FORM PART OF THE MARCOS ILL-GOTTEN WEALTH, AS BUTTRESSED BY THE FACT THAT NO JUDICIAL DETERMINATION HAS BEEN MADE AS TO WHOM THESE ASSETS RIGHTFULLY BELONG.

THE SANDIGANBAYAN'S RULING WHICH REJECTED PEITITONER'S DOCUMENTARY EXHIBITS ALLEGEDLY FOR BEING "INADMISSIBLE" DIRECTLY CONTRADICTS ITS EARLIER RULING ADMITTING ALL SAID DOCUMENTARY EVIDENCE AND WAS RENDERED IN A MANNER THAT DEPRIVED PETITIONER'S RIGHT TO DUE PROCESS OF LAW.

In the instant case, the Supreme Court held that there was "SOME MERIT in petitioner's contention."

The Supreme Court held that closely analyzing petitioner's Complaint and the present Petition for Review, it is clear that the Marcos siblings were being sued in TWO CAPACITIES : first, as CO-CONSPIRATORS in the alleged accumulation of ill-gotten wealth; and second, as the COMPULSORY HEIRS of their father, Ferdinand E. Marcos.

The petitioner accused the Marcos siblings of having collaborated with, participated in, and/or benefitted from their parents' alleged accumulation of ill-gotten wealth. In particular, as far as Imee Marcos-Manotoc was concerned, she was accused of dollar salting by using Glorious Sun to import denim fabrics from one supplier at prices much higher than those paid by other users of similar materials. It was also alleged that the Marcoses personally benefitted from the sequestered media networks IBC-13, BBC-2, and RPN-9, in which Imee Marcos had a substantial interest.

Irene Marcos-Araneta, on the other hand, was accused of having conspired with her husband, respondent Gregorio Araneta III, in his being President Marcos' conduit to Pantranco, thereby paving the way for the President's ownership of the company in violation of Article VII, Section 4, paragraph 2 of the 1973 Constitution.

On the basis of the fact that thr Mar is siblings were COMPULSORY HEIRS of the decedent Ferdinand Marcos Sr., the Republic prayed that they be made to (1) pay for the VALUE OF THE ALLEGED ILL-GOTTEN WEALTH WITH INTEREST from the date of acquisition; (2) render a complete ACCOUNTING and INVENTORY of all funds and other pieces of property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest therein; (3) pay ACTUAL DAMAGES estimated at P200 BILLION and additional actual damages to REIMBURSE EXPENSES for the recovery of the alleged ill-gotten wealth estimated at P250 million or in such amount as may be proven during trial; (4) pay MORAL DAMAGES amounting to P50 BILLION ; (5) pay TEMPERATE and NOMINAL DAMAGES, as well as ATTORNEY'S FEES and LITIGATION EXPENSES in an amount to be proven during the trial; (6) pay EXEMPLARY DAMAGES in the amount of P1 BILLION ; and (7) pay treble JUDICIAL COSTS.

The Supreme Court held that the Complaint was one for the REVERSION , the RECONVEYANCE , the RESTITUTION and the ACCOUNTING of alleged ill-gotten wealth and the payment of DAMAGES.

Based on the allegations of the Complaint, the court was charged with the tasks of (1) DETERMINING the properties in the Marcos estate that constitute the alleged ill-gotten wealth; (2) TRACING where these properties are; (3) ISSUING the appropriate orders for the accounting, the recovery, and the payment of these properties; and, finally, (4) DETERMINING if the award of damages is proper.

Since the pending case before the Sandiganbayan SURVIVED THE DEATH of Ferdinand E. Marcos, it was imperative therefore that the ESTATE BE DULY REPRESENTED. The purpose behind this rule is the protection of the right to DUE PROCESS of every party to a litigation who may be affected by the intervening death. The deceased litigant is himself protected, as he continues to be properly represented in the suit through the duly appointed LEGAL REPRESENTATIVE OF HIS ESTATE.

On that note, the Supreme Court took judicial notice of the PROBATE PROCEEDINGS regarding the WILL of Ferdinand E. Marcos. In Republic of the Philippines v. Marcos, the Supreme Court upheld the grant by the Regional Trial Court (RTC) of LETTERS TESTAMENTARY in solidum to Ferdinand R. Marcos, Jr. and Imelda Romualdez-Marcos AS EXECUTORS of the LAST WILL AND TESTAMENT of the late Ferdinand E. Marcos.

UNLESS the EXECUTORS of the Marcos estate or the heirs are ready to WAIVE in favor of the state their RIGHT to defend or protect the estate or those properties found to be ill-gotten in their possession, control or ownership, then they may NOT be dropped as defendants in the civil case pending before the Sandiganbayan.

Rule 3, Sec. 7 of the Rules of Court defines INDISPENSABLE PARTIES as those parties-in-interest without whom there can be no FINAL DETERMINATION of an action. They are those parties who possess such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence. Parties are indispensable if their interest in the subject matter of the suit and in the relief sought is inextricably intertwined with that of the other parties.

The Supreme Court held that in order to reach a FINAL DETERMINATION of the matters concerning the ESTATE of Ferdinand E. Marcos - that is, the ACCOUNTING and the RECOVERY of ill-gotten wealth - the present case must be MAINTAINED AGAINST IMELDA MARCOS AND FERDINAND "BONGBONG " R. MARCOS, JR. , as EXECUTORS of the Marcos estate, pursuant to Sec. 1 of Rule 87 of the Rules of Court.

According to this provision, actions may be commenced to recover from the estate, real or personal property, or an interest therein, or to enforce a lien thereon; and actions to recover damages for an injury to person or property, real or personal, may be commenced AGAINST THE EXECUTORS .

The Supreme Court also hold that the action must likewise be MAINTAINED against IMEE Marcos-Manotoc and IRENE Marcos-Araneta on the basis of the non-exhaustive list attached as Annex "A" to the Third Amended Complaint, which states that the listed properties therein were owned by Ferdinand and Imelda Marcos AND THEIR IMMEDIATE FAMILY. It is only during the trial of Civil Case No. 0002 before the Sandiganbayan that there could be a determination of whether these properties are indeed ill-gotten or were legitimately acquired by respondents and their predecessors.

Thus, the Supreme Court held that while it was not yet proven at that time that the Marcos siblings-respondents conspired in accumulating ill-gotten wealth, THEY MAY BE IN POSSESSION , OWNERSHIP OR CONTROL OF SUCH ILL-GOTTEN PROPERTIES OR THE PROCEEDS THEREOF AS HEIRS OF THE MARCOS COUPLE. Thus, their lack of participation in any illegal act does NOT remove the character of the property as ill-gotten and, therefore, as rightfully belonging to the State.

Further, the Supreme Court held that under the RULES OF SUCCESSION, the HEIRS INSTANTANEOUSLY BECAME CO-OWNERS OF THE MARCOS PROPERTIES UPON THE DEATH OF THE PRESIDENT. The property rights and obligations to the extent of the value of the inheritance of a person are TRANSMITTED to another through the DECEDENT'S DEATH. In this concept, nothing prevents the heirs from exercising their RIGHT TO TRANSFER OR DISPOSE of the properties that constitute their legitimes, even absent their declaration or absent the partition or the distribution of the estate.

Lastly, the Supreme Court held that the petitioner's prayer in its Third Amended Complaint DIRECTLY REFERRED to herein respondents, to wit:

1. AS TO THE FIRST SECOND AND THIRD CAUSES OF ACTION - To RETURN and RECONVEY to Plaintiff all funds and other property acquired by Defendants during their incumbency as public officers, which funds and other property are MANIFESTLY OUT OF PROPORTION to their salaries, other lawful income and income from legitimately acquired property which Defendants have failed to establish as having been, in fact, lawfully acquired by them, alternatively, to SOLIDARITY PAY Plaintiff the VALUE thereof with INTEREST thereon from the date of acquisition until full payment.

2. AS TO THE FOURTH CAUSE OF ACTION - to individually render to this Honorable Court a complete ACCOUNTING and INVENTORY , subject to evaluation of Court-appointed assessors, of all funds and other property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest in such funds and other property. (Emphasis supplied)

IN SUM , the Supreme Court MAINTAINED the MARCOS SIBLINGS as RESPONDENTS, because (1) the action pending before the Sandiganbayan was one that SURVIVED DEATH, and, therefore, the rights to the estate must be duly protected; (2) they allegedly CONTROLLED , POSSESSED or OWNED ill-gotten wealth, though their direct involvement in accumulating or acquiring such wealth may not have been proven as of that time.

Source :

REPUBLIC OF THE PHILIPPINES PETITIONER, VS. MA. IMELDA "IMEE" R. MARCOS-MANOTOC, et. al., GR No. 171701, February 08, 2012.

Link :

https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/21716