Republic v. Sandiganbayan (G.R. No. 155832; December 7, 2010)

CASE DIGEST: REPUBLIC OF THE PHILIPPINES v. SANDIGANBAYAN (Fourth Division) and IMELDA R. MARCOSFACTS: On February 28, 1986, immediately after assuming power, President Corazon C. Aquino issued Executive Order 1, creating the PCGG.She empowered the PCGG to recover all ill-gotten wealth allegedly amassed by former President Ferdinand E. Marcos, his family, and close associates during his 20-year regime.

PCGG Commissioner Raul Daza gave lawyers Jose Tan Ramirez and Ben Abella PCGG Region VIII Task Force Head and Co-Deputy, respectively, written authority to sequester any property, documents, money, and other assets in Leyte, belonging to former First Lady Imelda R. Marcos, Benjamin Romualdez, Alfredo Romualdez, and their agents. On March 18, 1986, Attys. Ramirez and Abella issued a sequestration order against the Marcoses Olot, Tolosa, Leyte property (lot Resthouse).

On August 10, 2001, Mrs. Marcos filed a motion to quash the sequestration order against the Olot Resthouse,claiming that such order, issued only by Attys. Ramirez and Abella, was void for failing to observe Sec. 3 of the PCGG Rules and Regulations. The rules required the signatures of at least two PCGG Commissioners. Mrs. Marcos filed a Supplement to her earlier motion, claiming no prima facie evidence that the Olot Resthouse constituted ill-gotten wealth.She pointed out that the property is the ancestral home of her family. The Republic countered that Mrs. Marcos was already stopped from questioning the order.

On February 28, 2002 the Sandiganbayan issued the assailed Resolution, granting the motion to quash and ordering the full restoration of the Olot Resthouse to Mrs. Marcos. The Sandiganbayan ruled that the sequestration order was void because it was signed, not by PCGG Commissioners, but by mere PCGG agents.

ISSUE: Is the March 18, 1986 sequestration order against the Olot Resthouse, issued by PCGG agents before the enactment of the PCGG rules, valid?

HELD: 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. 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. 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. 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 the above ruling. Finally, Mrs Marcos is not estopped from questioning the order because a void order produces no effect and cannot be validated under the doctrine of estoppel. DISMISSED.