SECOND DIVISION sequestered shares were declared delinquent to be disposed

of in an auction sale.
G.R. No. 129406             March 6, 2006
Apprised of the above development and evidently to prevent
REPUBLIC OF THE PHILIPPINES represented by the the projected auction sale of the same shares, PCGG filed a
PRESIDENTIAL COMMISSION ON GOOD complaint for injunction with the Regional Trial Court (RTC)
GOVERNMENT (PCGG), Petitioner, of Bacolod City, thereat docketed as Civil Case No. 5348.
vs. The complaint, however, was dismissed, paving the way for
SANDIGANBAYAN (SECOND DIVISION) and the auction sale for the delinquent 227 shares of stock. On
ROBERTO S. BENEDICTO, Respondents. August 5, 1989, an auction sale was conducted.

DECISION On November 3, 1990, petitioner Republic and private

respondent Benedicto entered into a Compromise Agreement
in Civil Case No. 0034. The agreement contained a general
GARCIA, J.: release clause5 whereunder petitioner Republic agreed and
bound itself to lift the sequestration on the 227 NOGCCI
Before the Court is this petition for certiorari under Rule 65 shares, among other Benedicto’s properties, petitioner
of the Rules of Court to nullify and set aside the March 28, Republic acknowledging that it was within private
19951 and March 13, 19972 Resolutions of the respondent Benedicto’s capacity to acquire the same shares
Sandiganbayan, Second Division, in Civil Case No. 0034, out of his income from business and the exercise of his
insofar as said resolutions ordered the Presidential profession.6 Implied in this undertaking is the recognition by
Commission on Good Government (PCGG) to pay private petitioner Republic that the subject shares of stock could not
respondent Roberto S. Benedicto or his corporations the have been ill-gotten.
value of 227 shares of stock of the Negros Occidental Golf
and Country Club, Inc. (NOGCCI) at P150,000.00 per share,
In a decision dated October 2, 1992, the Sandiganbayan
registered in the name of said private respondent or his approved the Compromise Agreement and accordingly
corporations.
rendered judgment in accordance with its terms.

The facts: In the process of implementing the Compromise Agreement,

either of the parties would, from time to time, move for a
Civil Case No. 0034 entitled Republic of the Philippines, ruling by the Sandiganbayan on the proper manner of
plaintiff, v. Roberto S. Benedicto, et al., defendants, is a implementing or interpreting a specific provision therein.
complaint for reconveyance, reversion, accounting,
reconstitution and damages. The case is one of several suits On February 22, 1994, Benedicto filed in Civil Case No. 0034
involving ill-gotten or unexplained wealth that petitioner
a "Motion for Release from Sequestration and Return of
Republic, through the PCGG, filed with the Sandiganbayan Sequestered Shares/Dividends" praying, inter alia, that his
against private respondent Roberto S. Benedicto and others
NOGCCI shares of stock be specifically released from
pursuant to Executive Order (EO) No. 14,3 series of 1986. sequestration and returned, delivered or paid to him as part
of the parties’ Compromise Agreement in that case. In a
Pursuant to its mandate under EO No. 1, 4 series of 1986, the Resolution7 promulgated on December 6, 1994, the
PCGG issued writs placing under sequestration all business Sandiganbayan granted Benedicto’s aforementioned motion
enterprises, entities and other properties, real and personal, but placed the subject shares under the custody of its Clerk
owned or registered in the name of private respondent of Court, thus:
Benedicto, or of corporations in which he appeared to have
controlling or majority interest. Among the properties thus WHEREFORE, in the light of the foregoing, the said "Motion
sequestered and taken over by PCGG fiscal agents were the
for Release From Sequestration and Return of Sequestered
227 shares in NOGCCI owned by private respondent Shares/Dividends" is hereby GRANTED and it is directed that
Benedicto and registered in his name or under the names of
said shares/dividends be delivered/placed under the custody
corporations he owned or controlled. of the Clerk of Court, Sandiganbayan, Manila subject to this
Court’s disposition.
Following the sequestration process, PCGG representatives
sat as members of the Board of Directors of NOGCCI, which On March 28, 1995, the Sandiganbayan came out with the
passed, sometime in October 1986, a resolution effecting a
herein first assailed Resolution,8 which clarified its
corporate policy change. The change consisted of assessing aforementioned December 6, 1994 Resolution and directed
a monthly membership due of P150.00 for each NOGCCI
the immediate implementation thereof by requiring PCGG,
share. Prior to this resolution, an investor purchasing more among other things:
than one NOGCCI share was exempt from paying monthly
membership due for the second and subsequent shares that
he/she owned. (b) To deliver to the Clerk of Court the 227 sequestered
shares of [NOGCCI] registered in the name of nominees of
ROBERTO S. BENEDICTO free from all liens and
Subsequently, on March 29, 1987, the NOGCCI Board passed encumbrances, or in default thereof, to pay their value at
another resolution, this time increasing the monthly
P150,000.00 per share which can be deducted from [the
membership due from P150.00 to P250.00 for each share. Republic’s] cash share in the Compromise Agreement.
[Words in bracket added] (Emphasis Supplied).
As sequestrator of the 227 shares of stock in question, PCGG
did not pay the corresponding monthly membership due Owing to PCGG’s failure to comply with the above directive,
thereon totaling P2,959,471.00. On account thereof, the 227
Benedicto filed in Civil Case No. 0034 a Motion for
Compliance dated July 25, 1995, followed by an Ex-Parte
Motion for Early Resolution dated February 12, 1996. Acting earlier, duty bound to preserve the value of such shares.
thereon, the Sandiganbayan promulgated yet another Needless to state, adopting timely measures to obviate the
Resolution9 on February 23, 1996, dispositively reading: loss of those shares forms part of such duty and due
diligence.
WHEREFORE, finding merit in the instant motion for early
resolution and considering that, indeed, the PCGG has not The Sandiganbayan, to be sure, cannot plausibly be faulted
shown any justifiable ground as to why it has not complied for finding the PCGG liable for the loss of the 227 NOGCCI
with its obligation as set forth in the Order of December 6, shares. There can be no quibbling, as indeed the graft court
1994 up to this date and which Order was issued pursuant to so declared in its assailed and related resolutions respecting
the Compromise Agreement and has already become final the NOGCCI shares of stock, that PCGG’s fiscal agents, while
and executory, accordingly, the Presidential Commission on sitting in the NOGCCI Board of Directors agreed to the
Good Government is hereby given a final extension of fifteen amendment of the rule pertaining to membership dues.
(15) days from receipt hereof within which to comply with Hence, it is not amiss to state, as did the Sandiganbayan,
the Order of December 6, 1994 as stated hereinabove. that the PCGG-designated fiscal agents, no less, had a direct
hand in the loss of the sequestered shares through
On April 1, 1996, PCGG filed a Manifestation with Motion for delinquency and their eventual sale through public auction.
Reconsideration,10 praying for the setting aside of the While perhaps anti-climactic to so mention it at this stage,
Resolution of February 23, 1996. On April 11, 1996, private the unfortunate loss of the shares ought not to have come to
respondent Benedicto filed a Motion to Enforce Judgment pass had those fiscal agents prudently not agreed to the
Levy. Resolving these two motions, the Sandiganbayan, in its passage of the NOGCCI board resolutions charging
second assailed Resolution11 dated March 13, 1997, denied membership dues on shares without playing representatives.
that portion of the PCGG’s Manifestation with Motion for
Reconsideration concerning the subject 227 NOGCCI shares Given the circumstances leading to the auction sale of the
and granted Benedicto’s Motion to Enforce Judgment Levy. subject NOGCCI shares, PCGG’s lament about public
respondent Sandiganbayan having erred or, worse still,
Hence, the Republic’s present recourse on the sole issue of having gravely abused its discretion in its determination as
whether or not the public respondent Sandiganbayan, to who is at fault for the loss of the shares in question can
Second Division, gravely abused its discretion in holding that hardly be given cogency.
the PCGG is at fault for not paying the membership dues on
the 227 sequestered NOGCCI shares of stock, a failing which For sure, even if the Sandiganbayan were wrong in its
eventually led to the foreclosure sale thereof. findings, which does not seem to be in this case, it is a well-
settled rule of jurisprudence that certiorari will issue only to
The petition lacks merit. correct errors of jurisdiction, not errors of judgment.
Corollarily, errors of procedure or mistakes in the court’s
findings and conclusions are beyond the corrective hand of
To begin with, PCGG itself does not dispute its being certiorari.14 The extraordinary writ of certiorari may be
considered as a receiver insofar as the sequestered 227
availed only upon a showing, in the minimum, that the
NOGCCI shares of stock are concerned. 12 PCGG also respondent tribunal or officer exercising judicial or quasi-
acknowledges that as such receiver, one of its functions is to
judicial functions has acted without or in excess of its or his
pay outstanding debts pertaining to the sequestered entity jurisdiction, or with grave abuse of discretion. 15
or property,13 in this case the 227 NOGCCI shares in
question. It contends, however, that membership dues
owing to a golf club cannot be considered as an outstanding The term "grave abuse of discretion" connotes capricious
debt for which PCGG, as receiver, must pay. It also claims to and whimsical exercise of judgment as is equivalent to
have exercised due diligence to prevent the loss through excess, or a lack of jurisdiction. 16 The abuse must be so
delinquency sale of the subject NOGCCI shares, specifically patent and gross as to amount to an evasion of a positive
inviting attention to the injunctive suit, i.e., Civil Case No. duty or a virtual refusal to perform a duty enjoined by law,
5348, it filed before the RTC of Bacolod City to enjoin the or to act at all in contemplation of law as where the power is
foreclosure sale of the shares. exercised in an arbitrary and despotic manner by reason of
passion or hostility.17 Sadly, this is completely absent in the
present case. For, at bottom, the assailed resolutions of the
The filing of the injunction complaint adverted to, without Sandiganbayan did no more than to direct PCGG to comply
more, cannot plausibly tilt the balance in favor of PCGG. To
with its part of the bargain under the compromise
the mind of the Court, such filing is a case of acting too little agreement it freely entered into with private respondent
and too late. It cannot be over-emphasized that it behooved
Benedicto. Simply put, the assailed resolutions of the
the PCGG’s fiscal agents to preserve, like a responsible Sandiganbayan have firm basis in fact and in law.
father of the family, the value of the shares of stock under
their administration. But far from acting as such father, what
the fiscal agents did under the premises was to allow the Lest it be overlooked, the issue of liability for the shares in
element of delinquency to set in before acting by embarking question had, as both public and private respondents
on a tedious process of going to court after the auction sale asserted, long become final and executory. Petitioner’s
had been announced and scheduled. narration of facts in its present petition is even misleading as
it conveniently fails to make reference to two (2) resolutions
issued by the Sandiganbayan. We refer to that court’s
The PCGG’s posture that to the owner of the sequestered
resolutions of December 6, 1994 18 and February 23,
shares rests the burden of paying the membership dues is 199619 as well as several intervening pleadings which served
untenable. For one, it lost sight of the reality that such dues
as basis for the decisions reached therein. As it were, the
are basically obligations attached to the shares, which, in the present petition questions only and focuses on the March 28,
final analysis, shall be made liable, thru delinquency sale in
199520 and March 13, 199721 resolutions, which merely
case of default in payment of the dues. For another, the reiterated and clarified the graft court’s underlying resolution
PCGG as sequestrator-receiver of such shares is, as stressed
of December 6, 1994. And to place matters in the proper
perspective, PCGG’s failure to comply with the December 6,
1994 resolution prompted the issuance of the clarificatory
and/or reiteratory resolutions aforementioned.

In a last-ditch attempt to escape liability, petitioner Republic,

through the PCGG, invokes state immunity from suit.22 As
argued, the order for it to pay the value of the delinquent
shares would fix monetary liability on a government agency,
thus necessitating the appropriation of public funds to satisfy
the judgment claim.23 But, as private respondent Benedicto
correctly countered, the PCGG fails to take stock of one of
the exceptions to the state immunity principle, i.e., when the
government itself is the suitor, as in Civil Case No. 0034.
Where, as here, the State itself is no less the plaintiff in the
main case, immunity from suit cannot be effectively
invoked.24 For, as jurisprudence teaches, when the State,
through its duly authorized officers, takes the initiative in a
suit against a private party, it thereby descends to the level
of a private individual and thus opens itself to whatever
counterclaims or defenses the latter may have against
it.25 Petitioner Republic’s act of filing its complaint in Civil
Case No. 0034 constitutes a waiver of its immunity from suit.
Being itself the plaintiff in that case, petitioner Republic
cannot set up its immunity against private respondent
Benedicto’s prayers in the same case.

In fact, by entering into a Compromise Agreement with

private respondent Benedicto, petitioner Republic thereby
stripped itself of its immunity from suit and placed itself in
the same level of its adversary. When the State enters into
contract, through its officers or agents, in furtherance of a
legitimate aim and purpose and pursuant to constitutional
legislative authority, whereby mutual or reciprocal benefits
accrue and rights and obligations arise therefrom, the State
may be sued even without its express consent, precisely
because by entering into a contract the sovereign descends
to the level of the citizen. Its consent to be sued is implied
from the very act of entering into such contract, 26 breach of
which on its part gives the corresponding right to the other
party to the agreement.

Finally, it is apropos to stress that the Compromise

Agreement in Civil Case No. 0034 envisaged the immediate
recovery of alleged ill-gotten wealth without further litigation
by the government, and buying peace on the part of the
aging Benedicto.27 Sadly, that stated objective has come to
naught as not only had the litigation continued to ensue,
but, worse, private respondent Benedicto passed away on
May 15, 2000,28 with the trial of Civil Case No. 0034 still in
swing, so much so that the late Benedicto had to be
substituted by the administratrix of his estate.29

WHEREFORE, the instant petition is hereby DISMISSED.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice