Evidence - 12feb2023

G.R. No.
152154 July 15, 2003 Marcos family. Subsequently, respondent Marcos children filed a
motion dated December 7, 1995 for the approval of said
REPUBLIC OF THE PHILIPPINES, petitioner, PETITION GRANTED agreements and for the enforcement thereof.
vs.
HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION), The General Agreement/Supplemental Agreements sought to
FERDINAND E. MARCOS (REPRESENTED BY HIS ESTATE/HEIRS: identify, collate, cause the inventory of and distribute all assets
IMELDA R. MARCOS, MARIA IMELDA [IMEE] MARCOS-MANOTOC, presumed to be owned by the Marcos family under the conditions
FERDINAND R. MARCOS, JR. AND IRENE MARCOS-ARANETA) AND contained therein.
IMELDA ROMUALDEZ MARCOS, respondents.
The aforementioned General Agreement specified in one of its
CORONA, J.: premises or "whereas clauses" the fact that petitioner "obtained a
judgment from the Swiss Federal Tribunal on December 21, 1990,
This is a petition for certiorari under Rule 65 of the Rules of Court that the Three Hundred Fifty-six Million U.S. dollars (US$356 million)
seeking to (1) set aside the Resolution dated January 31, 2002 belongs in principle to the Republic of the Philippines provided
issued by the Special First Division of the Sandiganbayan in Civil Case certain conditionalities are met x x x." The said decision of the Swiss
No. 0141 entitled Republic of the Philippines vs. Ferdinand E. Federal Supreme Court affirmed the decision of Zurich District
Marcos, et. al., and (2) reinstate its earlier decision dated Attorney Peter Consandey, granting petitioner's request for legal
September 19, 2000 which forfeited in favor of petitioner Republic assistance.7 Consandey declared the various deposits in the name of
of the Philippines (Republic) the amount held in escrow in the the enumerated foundations to be of illegal provenance and
Philippine National Bank (PNB) in the aggregate amount of ordered that they be frozen to await the final verdict in favor of the
US$658,175,373.60 as of January 31, 2002. parties entitled to restitution.
BACKGROUND OF THE CASE Hearings were conducted by the Sandiganbayan on the motion to
approve the General/Supplemental Agreements. Respondent
Ferdinand, Jr. was presented as witness for the purpose of
On December 17, 1991, petitioner Republic, through the
establishing the partial implementation of said agreements.
Presidential Commission on Good Government (PCGG), represented
by the Office of the Solicitor General (OSG), filed a petition for
forfeiture before the Sandiganbayan, docketed as Civil Case No. On October 18, 1996, petitioner filed a motion for summary
0141 entitled Republic of the Philippines vs. Ferdinand E. Marcos, judgment and/or judgment on the pleadings. Respondent Mrs.
represented by his Estate/Heirs and Imelda R. Marcos, pursuant to Marcos filed her opposition thereto which was later adopted by
RA 13791 in relation to Executive Order Nos. 1,2 2,3 144 and 14-A.5 respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
In said case, petitioner sought the declaration of the aggregate In its resolution dated November 20, 1997, the Sandiganbayan
amount of US$356 million (now estimated to be more than US$658 denied petitioner's motion for summary judgment and/or judgment
million inclusive of interest) deposited in escrow in the PNB, as ill- on the pleadings on the ground that the motion to approve the
gotten wealth. The funds were previously held by the following five compromise agreement "(took) precedence over the motion for
account groups, using various foreign foundations in certain Swiss summary judgment."
banks:
Respondent Mrs. Marcos filed a manifestation on May 26, 1998
(1) Azio-Verso-Vibur Foundation accounts; claiming she was not a party to the motion for approval of the
Compromise Agreement and that she owned 90% of the funds with
the remaining 10% belonging to the Marcos estate.
(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina
Foundation accounts;
Meanwhile, on August 10, 1995, petitioner filed with the District
Attorney in Zurich, Switzerland, an additional request for the
(3) Trinidad-Rayby-Palmy Foundation accounts;
immediate transfer of the deposits to an escrow account in the PNB.
The request was granted. On appeal by the Marcoses, the Swiss
(4) Rosalys-Aguamina Foundation accounts and Federal Supreme Court, in a decision dated December 10, 1997,
upheld the ruling of the District Attorney of Zurich granting the
(5) Maler Foundation accounts. request for the transfer of the funds. In 1998, the funds were
remitted to the Philippines in escrow. Subsequently, respondent
In addition, the petition sought the forfeiture of US$25 million and Marcos children moved that the funds be placed in custodia
US$5 million in treasury notes which exceeded the Marcos couple's legis because the deposit in escrow in the PNB was allegedly in
salaries, other lawful income as well as income from legitimately danger of dissipation by petitioner. The Sandiganbayan, in its
acquired property. The treasury notes are frozen at the Central Bank resolution dated September 8, 1998, granted the motion.
of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of the
freeze order issued by the PCGG. After the pre-trial and the issuance of the pre-trial order and
supplemental pre-trial order dated October 28, 1999 and January
On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda 21, 2000, respectively, the case was set for trial. After several
M. Manotoc, Irene M. Araneta and Ferdinand R. Marcos, Jr. filed resettings, petitioner, on March 10, 2000, filed another motion for
their answer. summary judgment pertaining to the forfeiture of the US$356
million, based on the following grounds:
Before the case was set for pre-trial, a General Agreement and the
Supplemental Agreements6 dated December 28, 1993 were I
executed by the Marcos children and then PCGG Chairman
Magtanggol Gunigundo for a global settlement of the assets of the
Page 1 of 30
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE In sum, the evidence offered for summary judgment of the case did
FUNDS SUBJECT OF THE PETITION UNDER R.A. NO. 1379 ARE not prove that the money in the Swiss Banks belonged to the
ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND OTHER Marcos spouses because no legal proof exists in the record as to the
SUBMISSIONS MADE IN THE COURSE OF THE PROCEEDING. ownership by the Marcoses of the funds in escrow from the Swiss
Banks.
II
The basis for the forfeiture in favor of the government cannot be
RESPONDENTS' ADMISSION MADE DURING THE PRE-TRIAL THAT deemed to have been established and our judgment thereon,
THEY DO NOT HAVE ANY INTEREST OR OWNERSHIP OVER THE perforce, must also have been without basis.
FUNDS SUBJECT OF THE ACTION FOR FORFEITURE TENDERS NO
GENUINE ISSUE OR CONTROVERSY AS TO ANY MATERIAL FACT IN WHEREFORE, the decision of this Court dated September 19, 2000 is
THE PRESENT ACTION, THUS WARRANTING THE RENDITION OF reconsidered and set aside, and this case is now being set for
SUMMARY JUDGMENT.8 further proceedings.12
Petitioner contended that, after the pre-trial conference, certain Hence, the instant petition. In filing the same, petitioner argues that
facts were established, warranting a summary judgment on the the Sandiganbayan, in reversing its September 19, 2000 decision,
funds sought to be forfeited. committed grave abuse of discretion amounting to lack or excess of
jurisdiction considering that --
Respondent Mrs. Marcos filed her opposition to the petitioner's
motion for summary judgment, which opposition was later adopted I
by her co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand,
Jr. PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH
THE REQUISITES OF SECTIONS 2 AND 3 OF R.A. NO. 1379:
On March 24, 2000, a hearing on the motion for summary judgment
was conducted. A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY
THE PERSONAL CIRCUMSTANCES OF FERDINAND E. MARCOS AND
In a decision9 dated September 19, 2000, the Sandiganbayan IMELDA R. MARCOS AS PUBLIC OFFICIALS BUT ALSO THE EXTENT OF
granted petitioner's motion for summary judgment: THEIR SALARIES AS SUCH PUBLIC OFFICIALS, WHO UNDER THE
CONSTITUTION, WERE PROHIBITED FROM ENGAGING IN THE
CONCLUSION MANAGEMENT OF FOUNDATIONS.
There is no issue of fact which calls for the presentation of evidence. B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE
SWISS DEPOSITS AND THEIR OWNERSHIP THEREOF:
The Motion for Summary Judgment is hereby granted.
1. ADMISSIONS IN PRIVATE RESPONDENTS' ANSWER;
The Swiss deposits which were transmitted to and now held in
escrow at the PNB are deemed unlawfully acquired as ill-gotten 2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS
wealth. THEY SIGNED AND SOUGHT TO IMPLEMENT;
DISPOSITION 3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT

IMELDA R. MARCOS AND IN THE MOTION TO PLACE THE RES IN
CUSTODIA LEGIS; AND
WHEREFORE, judgment is hereby rendered in favor of the Republic
of the Philippines and against the respondents, declaring the Swiss
deposits which were transferred to and now deposited in escrow at 4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS
the Philippine National Bank in the total aggregate value equivalent VICTIMS.
to US$627,608,544.95 as of August 31, 2000 together with the
increments thereof forfeited in favor of the State. 10 C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE
INCOME OF FERDINAND E. MARCOS AND IMELDA R. MARCOS AS
Respondent Mrs. Marcos filed a motion for reconsideration dated PUBLIC OFFICIALS.
September 26, 2000. Likewise, Mrs. Manotoc and Ferdinand, Jr. filed
their own motion for reconsideration dated October 5, 2000. Mrs. D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF
Araneta filed a manifestation dated October 4, 2000 adopting the UNLAWFULLY ACQUIRED WEALTH.
motion for reconsideration of Mrs. Marcos, Mrs. Manotoc and
Ferdinand, Jr. II
Subsequently, petitioner filed its opposition thereto. SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS
HAVE NOT RAISED ANY GENUINE ISSUE OF FACT CONSIDERING
In a resolution11 dated January 31, 2002, the Sandiganbayan THAT:
reversed its September 19, 2000 decision, thus denying petitioner's
motion for summary judgment: A. PRIVATE RESPONDENTS' DEFENSE THAT SWISS DEPOSITS WERE
LAWFULLY ACQUIRED DOES NOT ONLY FAIL TO TENDER AN ISSUE
CONCLUSION BUT IS CLEARLY A SHAM; AND
Page 2 of 30
B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS B.
DEPOSITS, PRIVATE RESPONDENTS ABANDONED THEIR SHAM
DEFENSE OF LEGITIMATE ACQUISITION, AND THIS FURTHER THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING
JUSTIFIED THE RENDITION OF A SUMMARY JUDGMENT. THE CASE FOR FURTHER PROCEEDINGS.14
III Mrs. Marcos contends that petitioner has a plain, speedy and
adequate remedy in the ordinary course of law in view of the
THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED. resolution of the Sandiganbayan dated January 31, 2000 directing
petitioner to submit the authenticated translations of the Swiss
IV decisions. Instead of availing of said remedy, petitioner now
elevates the matter to this Court. According to Mrs. Marcos, a
petition for certiorari which does not comply with the requirements
THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF
of the rules may be dismissed. Since petitioner has a plain, speedy
DISCRETION IN REVERSING HIMSELF ON THE GROUND THAT
and adequate remedy, that is, to proceed to trial and submit
ORIGINAL COPIES OF THE AUTHENTICATED SWISS DECISIONS AND
authenticated translations of the Swiss decisions, its petition before
THEIR "AUTHENTICATED TRANSLATIONS" HAVE NOT BEEN
this Court must be dismissed. Corollarily, the Sandiganbayan's ruling
SUBMITTED TO THE COURT, WHEN EARLIER THE SANDIGANBAYAN
to set the case for further proceedings cannot and should not be
HAS QUOTED EXTENSIVELY A PORTION OF THE TRANSLATION OF
considered a capricious and whimsical exercise of judgment.
ONE OF THESE SWISS DECISIONS IN HIS "PONENCIA" DATED JULY 29,
1999 WHEN IT DENIED THE MOTION TO RELEASE ONE HUNDRED
FIFTY MILLION US DOLLARS ($150,000,000.00) TO THE HUMAN Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment,
RIGHTS VICTIMS. prayed for the dismissal of the petition on the grounds that:
V (A)
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY
OBJECTION TO THE AUTHENTICITY OF THE SWISS FEDERAL JUDGMENT ON 10 MARCH 2000, IT WAS ALREADY BARRED FROM
SUPREME COURT DECISIONS.13 DOING SO.
Petitioner, in the main, asserts that nowhere in the respondents' (1) The Motion for Summary Judgment was based on private
motions for reconsideration and supplemental motion for respondents' Answer and other documents that had long been in
reconsideration were the authenticity, accuracy and admissibility of the records of the case. Thus, by the time the Motion was filed on
the Swiss decisions ever challenged. Otherwise stated, it was 10 March 2000, estoppel by laches had already set in against
incorrect for the Sandiganbayan to use the issue of lack of petitioner.
authenticated translations of the decisions of the Swiss Federal
Supreme Court as the basis for reversing itself because respondents (2) By its positive acts and express admissions prior to filing the
themselves never raised this issue in their motions for Motion for Summary Judgment on 10 March 1990, petitioner had
reconsideration and supplemental motion for reconsideration. legally bound itself to go to trial on the basis of existing issues. Thus,
Furthermore, this particular issue relating to the translation of the it clearly waived whatever right it had to move for summary
Swiss court decisions could not be resurrected anymore because judgment.
said decisions had been previously utilized by the Sandiganbayan
itself in resolving a "decisive issue" before it. (B)
Petitioner faults the Sandiganbayan for questioning the non- EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED
production of the authenticated translations of the Swiss Federal FROM FILING THE MOTION FOR SUMMARY JUDGMENT, THE
Supreme Court decisions as this was a marginal and technical matter SANDIGANBAYAN IS CORRECT IN RULING THAT PETITIONER HAS
that did not diminish by any measure the conclusiveness and NOT YET ESTABLISHED A PRIMA FACIE CASE FOR THE FORFEITURE
strength of what had been proven and admitted before the OF THE SWISS FUNDS.
Sandiganbayan, that is, that the funds deposited by the Marcoses
constituted ill-gotten wealth and thus belonged to the Filipino
(1) Republic Act No. 1379, the applicable law, is a penal statute. As
people.
such, its provisions, particularly the essential elements stated in
section 3 thereof, are mandatory in nature. These should be strictly
In compliance with the order of this Court, Mrs. Marcos filed her construed against petitioner and liberally in favor of private
comment to the petition on May 22, 2002. After several motions for respondents.
extension which were all granted, the comment of Mrs. Manotoc
and Ferdinand, Jr. and the separate comment of Mrs. Araneta were
(2) Petitioner has failed to establish the third and fourth essential
filed on May 27, 2002.
elements in Section 3 of R.A. 1379 with respect to the identification,
ownership, and approximate amount of the property which the
Mrs. Marcos asserts that the petition should be denied on the Marcos couple allegedly "acquired during their incumbency".
following grounds:
(a) Petitioner has failed to prove that the Marcos couple "acquired"
A. or own the Swiss funds.
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE (b) Even assuming, for the sake of argument, that the fact of
SANDIGANBAYAN. acquisition has been proven, petitioner has categorically admitted
that it has no evidence showing how much of the Swiss funds was
Page 3 of 30
acquired "during the incumbency" of the Marcos couple from 31 But before this Court discusses the more relevant issues, the
December 1965 to 25 February 1986. question regarding the propriety of petitioner Republic's action for
certiorari under Rule 6519 of the 1997 Rules of Civil Procedure
(3) In contravention of the essential element stated in Section 3 (e) assailing the Sandiganbayan Resolution dated January 21, 2002
of R.A. 1379, petitioner has failed to establish the other proper should be threshed out.
earnings and income from legitimately acquired property of the
Marcos couple over and above their government salaries. At the outset, we would like to stress that we are treating this case
as an exception to the general rule governing petitions for certiorari.
(4) Since petitioner failed to prove the three essential elements Normally, decisions of the Sandiganbayan are brought before this
provided in paragraphs (c)15 (d),16 and (e)17 of Section 3, R.A. 1379, Court under Rule 45, not Rule 65.20 But where the case is undeniably
the inescapable conclusion is that the prima facie presumption of ingrained with immense public interest, public policy and deep
unlawful acquisition of the Swiss funds has not yet attached. There historical repercussions, certiorari is allowed notwithstanding the
can, therefore, be no premature forfeiture of the funds. existence and availability of the remedy of appeal. 21
(C) One of the foremost concerns of the Aquino Government in

February 1986 was the recovery of the unexplained or ill-gotten
wealth reputedly amassed by former President and Mrs. Ferdinand
IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING
E. Marcos, their relatives, friends and business associates. Thus, the
CERTAIN STATEMENTS MADE BY PRIVATE RESPONDENTS OUT OF
very first Executive Order (EO) issued by then President Corazon
CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE AS
Aquino upon her assumption to office after the ouster of the
"JUDICIAL ADMISSIONS" SUFFICIENT TO ESTABLISH A PRIMA FACIE
Marcoses was EO No. 1, issued on February 28, 1986. It created the
AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE
Presidential Commission on Good Government (PCGG) and charged
OF THE SWISS FUNDS.
it with the task of assisting the President in the "recovery of all ill-
gotten wealth accumulated by former President Ferdinand E.
(1) Under Section 27, Rule 130 of the Rules of Court, the General Marcos, his immediate family, relatives, subordinates and close
and Supplemental Agreements, as well as the other written and associates, whether located in the Philippines or abroad, including
testimonial statements submitted in relation thereto, are expressly the takeover or sequestration of all business enterprises and entities
barred from being admissible in evidence against private owned or controlled by them during his administration, directly or
respondents. through nominees, by taking undue advantage of their public office
and/or using their powers, authority, influence, connections or
(2) Had petitioner bothered to weigh the alleged admissions relationship." The urgency of this undertaking was tersely described
together with the other statements on record, there would be a by this Court in Republic vs. Lobregat22:
demonstrable showing that no such "judicial admissions" were
made by private respondents. surely x x x an enterprise "of great pith and moment"; it was
attended by "great expectations"; it was initiated not only out of
(D) considerations of simple justice but also out of sheer necessity - the
national coffers were empty, or nearly so.
SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL
ELEMENTS TO ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE, In all the alleged ill-gotten wealth cases filed by the PCGG, this Court
AND PRIVATE RESPONDENTS HAVE NOT MADE ANY JUDICIAL has seen fit to set aside technicalities and formalities that merely
ADMISSION THAT WOULD HAVE FREED IT FROM ITS BURDEN OF serve to delay or impede judicious resolution. This Court prefers to
PROOF, THE SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF have such cases resolved on the merits at the Sandiganbayan. But
DISCRETION IN DENYING THE MOTION FOR SUMMARY JUDGMENT. substantial justice to the Filipino people and to all parties
CERTIORARI, THEREFORE, DOES NOT LIE, ESPECIALLY AS THIS COURT concerned, not mere legalisms or perfection of form, should now be
IS NOT A TRIER OF FACTS.18 relentlessly and firmly pursued. Almost two decades have passed
since the government initiated its search for and reversion of such
For her part, Mrs. Araneta, in her comment to the petition, claims ill-gotten wealth. The definitive resolution of such cases on the
that obviously petitioner is unable to comply with a very plain merits is thus long overdue. If there is proof of illegal acquisition,
requirement of respondent Sandiganbayan. The instant petition is accumulation, misappropriation, fraud or illicit conduct, let it be
allegedly an attempt to elevate to this Court matters, issues and brought out now. Let the ownership of these funds and other assets
incidents which should be properly threshed out at the be finally determined and resolved with dispatch, free from all the
Sandiganbayan. To respondent Mrs. Araneta, all other matters, save delaying technicalities and annoying procedural sidetracks. 23
that pertaining to the authentication of the translated Swiss Court
decisions, are irrelevant and impertinent as far as this Court is We thus take cognizance of this case and settle with finality all the
concerned. Respondent Mrs. Araneta manifests that she is as eager issues therein.
as respondent Sandiganbayan or any interested person to have the
Swiss Court decisions officially translated in our known language. ISSUES BEFORE THIS COURT
She says the authenticated official English version of the Swiss Court
decisions should be presented. This should stop all speculations on
The crucial issues which this Court must resolve are: (1) whether or
what indeed is contained therein. Thus, respondent Mrs. Araneta
not respondents raised any genuine issue of fact which would either
prays that the petition be denied for lack of merit and for raising
justify or negate summary judgment; and (2) whether or not
matters which, in elaborated fashion, are impertinent and improper
petitioner Republic was able to prove its case for forfeiture in
before this Court.
accordance with Sections 2 and 3 of RA 1379.
PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

(1) THE PROPRIETY OF SUMMARY JUDGMENT
Page 4 of 30
We hold that respondent Marcoses failed to raise any genuine issue 12. Based on available documents, the ITRs of the Marcoses for the
of fact in their pleadings. Thus, on motion of petitioner Republic, years 1965-1975 were filed under Tax Identification No. 1365-055-1.
summary judgment should take place as a matter of right. For the years 1976 until 1984, the returns were filed under Tax
Identification No. M 6221-J 1117-A-9.
In the early case of Auman vs. Estenzo24, summary judgment was
described as a judgment which a court may render before trial but 13. The data contained in the ITRs and Balance Sheet filed by the
after both parties have pleaded. It is ordered by the court upon "Marcoses are summarized and attached to the reports in the
application by one party, supported by affidavits, depositions or following schedules:
other documents, with notice upon the adverse party who may in
turn file an opposition supported also by affidavits, depositions or Schedule A:
other documents. This is after the court summarily hears both
parties with their respective proofs and finds that there is no
Schedule of Income (Annex "T" hereof);
genuine issue between them. Summary judgment is sanctioned in
this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure: Schedule B:
SECTION 1. Summary judgment for claimant.- A party seeking to Schedule of Income Tax Paid (Annex "T-1" hereof);
recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer Schedule C:
thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon Schedule of Net Disposable Income (Annex "T-2" hereof);
all or any part thereof.25
Schedule D:
Summary judgment is proper when there is clearly no genuine issue
as to any material fact in the action. 26 The theory of summary
judgment is that, although an answer may on its face appear to Schedule of Networth Analysis (Annex "T-3" hereof).
tender issues requiring trial, if it is demonstrated by affidavits,
depositions or admissions that those issues are not genuine but 14. As summarized in Schedule A (Annex "T" hereof), the Marcoses
sham or fictitious, the Court is justified in dispensing with the trial reported P16,408,442.00 or US$2,414,484.91 in total income over a
and rendering summary judgment for petitioner Republic. period of 20 years from 1965 to 1984. The sources of income are as
follows:
The Solicitor General made a very thorough presentation of its case
for forfeiture: Official Salaries - P 2,627,581.00 - 16.01%
Legal Practice - 11,109,836.00 - 67.71%
xxx
Farm Income - 149,700.00 - .91%
4. Respondent Ferdinand E. Marcos (now deceased and represented Others - 2,521,325.00 - 15.37%
by his Estate/Heirs) was a public officer for several decades Total P16,408,442.00 - 100.00%
continuously and without interruption as Congressman, Senator,
Senate President and President of the Republic of the Philippines
from December 31, 1965 up to his ouster by direct action of the 15. FM's official salary pertains to his compensation as Senate
people of EDSA on February 22-25, 1986. President in 1965 in the amount of P15,935.00 and P1,420,000.00 as
President of the Philippines during the period 1966 until 1984. On
the other hand, Imelda reported salaries and allowances only for the
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the
years 1979 to 1984 in the amount of P1,191,646.00. The records
former First Lady who ruled with FM during the 14-year martial law
indicate that the reported income came from her salary from the
regime, occupied the position of Minister of Human Settlements
Ministry of Human Settlements and allowances from Food Terminal,
from June 1976 up to the peaceful revolution in February 22-25,
Inc., National Home Mortgage Finance Corporation, National Food
1986. She likewise served once as a member of the Interim Batasang
Authority Council, Light Rail Transit Authority and Home
Pambansa during the early years of martial law from 1978 to 1984
Development Mutual Fund.
and as Metro Manila Governor in concurrent capacity as Minister of
Human Settlements. x x x
16. Of the P11,109,836.00 in reported income from legal practice,
the amount of P10,649,836.00 or 96% represents "receivables from
xxx xxx xxx
prior years" during the period 1967 up to 1984.
11. At the outset, however, it must be pointed out that based on the
17. In the guise of reporting income using the cash method under
Official Report of the Minister of Budget, the total salaries of former
Section 38 of the National Internal Revenue Code, FM made it
President Marcos as President form 1966 to 1976 was P60,000 a
appear that he had an extremely profitable legal practice before he
year and from 1977 to 1985, P100,000 a year; while that of the
became a President (FM being barred by law from practicing his law
former First Lady, Imelda R. Marcos, as Minister of Human
profession during his entire presidency) and that, incredibly, he was
Settlements from June 1976 to February 22-25, 1986 was P75,000 a
still receiving payments almost 20 years after. The only problem is
year xxx.
that in his Balance Sheet attached to his 1965 ITR immediately
preceeding his ascendancy to the presidency he did not show any
ANALYSIS OF RESPONDENTS LEGITIMATE INCOME Receivables from client at all, much less the P10,65-M that he
decided to later recognize as income. There are no documents
xxx showing any withholding tax certificates. Likewise, there is nothing
on record that will show any known Marcos client as he has no
Page 5 of 30
known law office. As previously stated, his networth was a mere the filing of a supplemental or separate forfeiture complaint should
P120,000.00 in December, 1965. The joint income tax returns of FM the need arise.
and Imelda cannot, therefore, conceal the skeletons of their
kleptocracy. H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS
18. FM reported a total of P2,521,325.00 as Other Income for the 24. On June 11, 1971, Ferdinand Marcos issued a written order to
years 1972 up to 1976 which he referred to in his return as Dr. Theo Bertheau, legal counsel of Schweizeresche Kreditanstalt or
"Miscellaneous Items" and "Various Corporations." There is no SKA, also known as Swiss Credit Bank, for him to establish the AZIO
indication of any payor of the dividends or earnings. Foundation. On the same date, Marcos executed a power of
attorney in favor of Roberto S. Benedicto empowering him to
19. Spouses Ferdinand and Imelda did not declare any income from transact business in behalf of the said foundation. Pursuant to the
any deposits and placements which are subject to a 5% withholding said Marcos mandate, AZIO Foundation was formed on June 21,
tax. The Bureau of Internal Revenue attested that after a diligent 1971 in Vaduz. Walter Fessler and Ernst Scheller, also of SKA Legal
search of pertinent records on file with the Records Division, they Service, and Dr. Helmuth Merling from Schaan were designated as
did not find any records involving the tax transactions of spouses members of the Board of Trustees of the said foundation. Ferdinand
Ferdinand and Imelda in Revenue Region No. 1, Baguio City, Marcos was named first beneficiary and the Marcos Foundation, Inc.
Revenue Region No.4A, Manila, Revenue Region No. 4B1, Quezon was second beneficiary. On November 12, 1971, FM again issued
City and Revenue No. 8, Tacloban, Leyte. Likewise, the Office of the another written order naming Austrahil PTY Ltd. In Sydney,
Revenue Collector of Batac. Further, BIR attested that no records Australia, as the foundation's first and sole beneficiary. This was
were found on any filing of capital gains tax return involving spouses recorded on December 14, 1971.
FM and Imelda covering the years 1960 to 1965.
25. In an undated instrument, Marcos changed the first and sole
20. In Schedule B, the taxable reported income over the twenty-year beneficiary to CHARIS FOUNDATION. This change was recorded on
period was P14,463,595.00 which represents 88% of the gross December 4, 1972.
income. The Marcoses paid income taxes totaling P8,233,296.00 or
US$1,220,667.59. The business expenses in the amount of 26. On August 29, 1978, the AZIO FOUNDATION was renamed to
P861,748.00 represent expenses incurred for subscription, postage, VERSO FOUNDATION. The Board of Trustees remained the same. On
stationeries and contributions while the other deductions in the March 11, 1981, Marcos issued a written directive to liquidated
amount of P567,097.00 represents interest charges, medicare fees, VERSO FOUNDATION and to transfer all its assets to account of
taxes and licenses. The total deductions in the amount of FIDES TRUST COMPANY at Bank Hofman in Zurich under the account
P1,994,845.00 represents 12% of the total gross income. "Reference OSER." The Board of Trustees decided to dissolve the
foundation on June 25, 1981.
21. In Schedule C, the net cumulative disposable income amounts to
P6,756,301.00 or US$980,709.77. This is the amount that represents 27. In an apparent maneuver to bury further the secret deposits
that portion of the Marcoses income that is free for consumption, beneath the thick layers of corporate entities, FM effected the
savings and investments. The amount is arrived at by adding back to establishment of VIBUR FOUNDATION on May 13, 1981 in Vaduz.
the net income after tax the personal and additional exemptions for Atty. Ivo Beck and Limag Management, a wholly-owned subsidiary
the years 1965-1984, as well as the tax-exempt salary of the of Fides Trust, were designated as members of the Board of
President for the years 1966 until 1972. Trustees. The account was officially opened with SKA on September
10, 1981. The beneficial owner was not made known to the bank
22. Finally, the networth analysis in Schedule D, represents the total since Fides Trust Company acted as fiduciary. However, comparison
accumulated networth of spouses, Ferdinand and Imelda. of the listing of the securities in the safe deposit register of the
Respondent's Balance Sheet attached to their 1965 ITR, covering the VERSO FOUNDATION as of February 27, 1981 with that of VIBUR
year immediately preceding their ascendancy to the presidency, FOUNDATION as of December 31, 1981 readily reveals that exactly
indicates an ending networth of P120,000.00 which FM declared as the same securities were listed.
Library and Miscellaneous assets. In computing for the networth,
the income approach was utilized. Under this approach, the 28. Under the foregoing circumstances, it is certain that the VIBUR
beginning capital is increased or decreased, as the case may be, FOUNDATION is the beneficial successor of VERSO FOUNDATION.
depending upon the income earned or loss incurred. Computations
establish the total networth of spouses Ferdinand and Imelda, for
29. On March 18, 1986, the Marcos-designated Board of Trustees
the years 1965 until 1984 in the total amount of US$957,487.75,
decided to liquidate VIBUR FOUNDATION. A notice of such
assuming the income from legal practice is real and valid x x x.
liquidation was sent to the Office of the Public Register on March
21, 1986. However, the bank accounts and respective balances of
G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS the said VIBUR FOUNDATION remained with SKA. Apparently, the
liquidation was an attempt by the Marcoses to transfer the
23. The following presentation very clearly and overwhelmingly foundation's funds to another account or bank but this was
show in detail how both respondents clandestinely stashed away prevented by the timely freeze order issued by the Swiss authorities.
the country's wealth to Switzerland and hid the same under layers One of the latest documents obtained by the PCGG from the Swiss
upon layers of foundations and other corporate entities to prevent authorities is a declaration signed by Dr. Ivo Beck (the trustee)
its detection. Through their dummies/nominees, fronts or agents stating that the beneficial owner of VIBUR FOUNDATION is
who formed those foundations or corporate entities, they opened Ferdinand E. Marcos. Another document signed by G. Raber of SKA
and maintained numerous bank accounts. But due to the difficulty if shows that VIBUR FOUNDATION is owned by the "Marcos Familie"
not the impossibility of detecting and documenting all those secret
accounts as well as the enormity of the deposits therein hidden, the 30. As of December 31, 1989, the balance of the bank accounts of
following presentation is confined to five identified accounts groups, VIBUR FOUNDATION with SKA, Zurich, under the General Account
with balances amounting to about $356-M with a reservation for No. 469857 totaled $3,597,544.00
Page 6 of 30
I. XANDY-WINTROP: CHARIS-SCOLARI- US$8,647,190.00. Latest documents received from Swiss authorities
VALAMO-SPINUS-AVERTINA FOUNDATION ACCOUNTS included a declaration signed by IVO Beck stating that the beneficial
owners of AVERTINA FOUNDATION are FM and Imelda. Another
31. This is the most intricate and complicated account group. As the document signed by G. Raber of SKA indicates that Avertina
Flow Chart hereof shows, two (2) groups under the foundation Foundation is owned by the "Marcos Families."
organized by Marcos dummies/nominees for FM's benefit,
eventually joined together and became one (1) account group under 37. The other groups of foundations that eventually joined
the AVERTINA FOUNDATION for the benefit of both FM and Imelda. AVERTINA were also established by FM through his dummies, which
This is the biggest group from where the $50-M investment fund of started with the CHARIS FOUNDATION.
the Marcoses was drawn when they bought the Central Bank's
dollar-denominated treasury notes with high-yielding interests. 38. The CHARIS FOUNDATION was established in VADUZ on
December 27, 1971. Walter Fessler and Ernst Scheller of SKA and Dr.
32. On March 20, 1968, after his second year in the presidency, Peter Ritter were named as directors. Dr. Theo Bertheau, SKA legal
Marcos opened bank accounts with SKA using an alias or counsel, acted as founding director in behalf of FM by virtue of the
pseudonym WILLIAM SAUNDERS, apparently to hide his true mandate and agreement dated November 12, 1971. FM himself was
identity. The next day, March 21, 1968, his First Lady, Mrs. Imelda named the first beneficiary and Xandy Foundation as second
Marcos also opened her own bank accounts with the same bank beneficiary in accordance with the handwritten instructions of FM
using an American-sounding alias, JANE RYAN. Found among the on November 12, 1971 and the Regulations. FM gave a power of
voluminous documents in Malacañang shortly after they fled to attorney to Roberto S. Benedicto on February 15, 1972 to act in his
Hawaii in haste that fateful night of February 25, 1986, were behalf with regard to Charis Foundation.
accomplished forms for "Declaration/Specimen Signatures"
submitted by the Marcos couple. Under the caption "signature(s)" 39. On December 13, 1974, Charis Foundation was renamed Scolari
Ferdinand and Imelda signed their real names as well as their Foundation but the directors remained the same. On March 11,
respective aliases underneath. These accounts were actively 1981 FM ordered in writing that the Valamo Foundation be
operated and maintained by the Marcoses for about two (2) years liquidated and all its assets be transferred to Bank Hofmann, AG in
until their closure sometime in February, 1970 and the balances favor of Fides Trust Company under the account "Reference OMAL".
transferred to XANDY FOUNDATION. The Board of Directors decided on the immediate dissolution of
Valamo Foundation on June 25, 1981.
33. The XANDY FOUNDATION was established on March 3, 1970 in
Vaduz. C.W. Fessler, C. Souviron and E. Scheller were named as 40 The SPINUS FOUNDATION was established on May 13, 1981 in
members of the Board of Trustees. Vaduz with Atty. Ivo Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust Co., as members of the Foundation's Board
34. FM and Imelda issued the written mandate to establish the of Directors. The account was officially opened with SKA on
foundation to Markus Geel of SKA on March 3, 1970. In the September 10, 1981. The beneficial owner of the foundation was
handwritten Regulations signed by the Marcos couple as well as in not made known to the bank since Fides Trust Co. acted as fiduciary.
the type-written Regulations signed by Markus Geel both dated However, the list of securities in the safe deposit register of Valamo
February 13, 1970, the Marcos spouses were named the first Foundation as of December 31, 1980 are practically the same with
beneficiaries, the surviving spouse as the second beneficiary and the those listed in the safe deposit register of Spinus Foundation as of
Marcos children – Imee, Ferdinand, Jr. (Bongbong) and Irene – as December 31, 1981. Under the circumstances, it is certain that the
equal third beneficiaries. Spinus Foundation is the beneficial successor of the Valamo
Foundation.
35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION
on August 29, 1978. The Board of Trustees remained the same at 41. On September 6, 1982, there was a written instruction from
the outset. However, on March 27, 1980, Souviron was replaced by Spinus Foundation to SKA to close its Swiss Franc account and
Dr. Peter Ritter. On March 10. 1981, Ferdinand and Imelda Marcos transfer the balance to Avertina Foundation. In July/August, 1982,
issued a written order to the Board of Wintrop to liquidate the several transfers from the foundation's German marks and US dollar
foundation and transfer all its assets to Bank Hofmann in Zurich in accounts were made to Avertina Category CAR totaling DM 29.5-M
favor of FIDES TRUST COMPANY. Later, WINTROP FOUNDATION was and $58-M, respectively. Moreover, a comparison of the list of
dissolved. securities of the Spinus Foundation as of February 3, 1982 with the
safe deposit slips of the Avertina Foundation Category CAR as of
36. The AVERTINA FOUNDATION was established on May 13, 1981 August 19, 1982 shows that all the securities of Spinus were
in Vaduz with Atty. Ivo Beck and Limag Management, a wholly- transferred to Avertina.
owned subsidiary of FIDES TRUST CO., as members of the Board of
Trustees. Two (2) account categories, namely: CAR and NES, were J. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS
opened on September 10, 1981. The beneficial owner of AVERTINA
was not made known to the bank since the FIDES TRUST CO. acted 42. The Trinidad Foundation was organized on August 26, 1970 in
as fiduciary. However, the securities listed in the safe deposit Vaduz with C.W. Fessler and E. Scheller of SKA and Dr. Otto Tondury
register of WINTROP FOUNDATION Category R as of December 31, as the foundation's directors. Imelda issued a written mandate to
1980 were the same as those listed in the register of AVERTINA establish the foundation to Markus Geel on August 26, 1970. The
FOUNDATION Category CAR as of December 31, 1981. Likewise, the regulations as well as the agreement, both dated August 28, 1970
securities listed in the safe deposit register of WINTROP were likewise signed by Imelda. Imelda was named the first
FOUNDATION Category S as of December 31, 1980 were the same as beneficiary and her children Imelda (Imee), Ferdinand, Jr.
those listed in the register of Avertina Category NES as of December (Bongbong) and, Irene were named as equal second beneficiaries.
31, 1981.Under the circumstances, it is certain that the beneficial
successor of WINTROP FOUNDATION is AVERTINA FOUNDATION.
43. Rayby Foundation was established on June 22, 1973 in Vaduz
The balance of Category CAR as of December 31, 1989 amounted to
with Fessler, Scheller and Ritter as members of the board of
US$231,366,894.00 while that of Category NES as of 12-31-83 was
Page 7 of 30
directors. Imelda issued a written mandate to Dr. Theo Bertheau to L. MALER FOUNDATION ACCOUNTS
establish the foundation with a note that the foundation's
capitalization as well as the cost of establishing it be debited against 49. Maler was first created as an establishment. A statement of its
the account of Trinidad Foundation. Imelda was named the first and rules and regulations was found among Malacañang documents. It
only beneficiary of Rayby foundation. According to written stated, among others, that 50% of the Company's assets will be for
information from SKA dated November 28, 1988, Imelda apparently sole and full right disposal of FM and Imelda during their lifetime,
had the intention in 1973 to transfer part of the assets of Trinidad which the remaining 50% will be divided in equal parts among their
Foundation to another foundation, thus the establishment of Rayby children. Another Malacañang document dated October 19,1968
Foundation. However, transfer of assets never took place. On March and signed by Ferdinand and Imelda pertains to the appointment of
10, 1981, Imelda issued a written order to transfer all the assets of Dr. Andre Barbey and Jean Louis Sunier as attorneys of the company
Rayby Foundation to Trinidad Foundation and to subsequently and as administrator and manager of all assets held by the
liquidate Rayby. On the same date, she issued a written order to the company. The Marcos couple, also mentioned in the said document
board of Trinidad to dissolve the foundation and transfer all its that they bought the Maler Establishment from SBC, Geneva. On the
assets to Bank Hofmann in favor of Fides Trust Co. Under the same date, FM and Imelda issued a letter addressed to Maler
account "Reference Dido," Rayby was dissolved on April 6, 1981 and Establishment, stating that all instructions to be transmitted with
Trinidad was liquidated on August 3, 1981. regard to Maler will be signed with the word "JOHN LEWIS". This
word will have the same value as the couple's own personal
44. The PALMY FOUNDATION was established on May 13, 1981 in signature. The letter was signed by FM and Imelda in their
Vaduz with Dr. Ivo Beck and Limag Management, a wholly-owned signatures and as John Lewis.
subsidiary of Fides Trust Co, as members of the Foundation's Board
of Directors. The account was officially opened with the SKA on 50. Maler Establishment opened and maintained bank accounts
September 10, 1981. The beneficial owner was not made known to with SBC, Geneva. The opening bank documents were signed by Dr.
the bank since Fides Trust Co. acted as fiduciary. However, when Barbey and Mr. Sunnier as authorized signatories.
one compares the listing of securities in the safe deposit register of
Trinidad Foundation as of December 31,1980 with that of the Palmy
51. On November 17, 1981, it became necessary to transform Maler
Foundation as of December 31, 1980, one can clearly see that
Establishment into a foundation. Likewise, the attorneys were
practically the same securities were listed. Under the circumstances,
changed to Michael Amaudruz, et. al. However, administration of
it is certain that the Palmy Foundation is the beneficial successor of
the assets was left to SBC. The articles of incorporation of Maler
the Trinidad Foundation.
Foundation registered on November 17, 1981 appear to be the
same articles applied to Maler Establishment. On February 28, 1984,
45. As of December 31, 1989, the ending balance of the bank Maler Foundation cancelled the power of attorney for the
accounts of Palmy Foundation under General Account No. 391528 is management of its assets in favor of SBC and transferred such
$17,214,432.00. power to Sustrust Investment Co., S.A.
46. Latest documents received from Swiss Authorities included a 52. As of June 6, 1991, the ending balance of Maler Foundation's
declaration signed by Dr. Ivo Beck stating that the beneficial owner Account Nos. 254,508 BT and 98,929 NY amount SF 9,083,567 and
of Palmy Foundation is Imelda. Another document signed by Raber SG 16,195,258, respectively, for a total of SF 25,278,825.00. GM only
shows that the said Palmy Foundation is owned by "Marcos until December 31, 1980. This account was opened by Maler when it
Familie". was still an establishment which was subsequently transformed into
a foundation.
K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS
53. All the five (5) group accounts in the over-all flow chart have a
47. Rosalys Foundation was established in 1971 with FM as the total balance of about Three Hundred Fifty Six Million Dollars
beneficiary. Its Articles of Incorporation was executed on September ($356,000,000.00) as shown by Annex "R-5" hereto attached as
24, 1971 and its By-Laws on October 3, 1971. This foundation integral part hereof.
maintained several accounts with Swiss Bank Corporation (SBC)
under the general account 51960 where most of the bribe monies x x x x x x.27
from Japanese suppliers were hidden.
Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M.
48. On December 19, 1985, Rosalys Foundation was liquidated and Araneta and Ferdinand Marcos, Jr., in their answer, stated the
all its assets were transferred to Aguamina Corporation's (Panama) following:
Account No. 53300 with SBC. The ownership by Aguamina
Corporation of Account No. 53300 is evidenced by an opening
xxx xxx xxx
account documents from the bank. J. Christinaz and R.L. Rossier,
First Vice-President and Senior Vice President, respectively, of SBC,
Geneva issued a declaration dated September 3, 1991 stating that 4. Respondents ADMIT paragraphs 3 and 4 of the Petition.
the by-laws dated October 3, 1971 governing Rosalys Foundation
was the same by-law applied to Aguamina Corporation Account No. 5. Respondents specifically deny paragraph 5 of the Petition in so far
53300. They further confirmed that no change of beneficial owner as it states that summons and other court processes may be served
was involved while transferring the assets of Rosalys to Aguamina. on Respondent Imelda R. Marcos at the stated address the truth of
Hence, FM remains the beneficiary of Aguamina Corporation the matter being that Respondent Imelda R. Marcos may be served
Account No. 53300. with summons and other processes at No. 10-B Bel Air
Condominium 5022 P. Burgos Street, Makati, Metro Manila, and
As of August 30, 1991, the ending balance of Account No. 53300 ADMIT the rest.
amounted to $80,566,483.00.
xxx xxx xxx
Page 8 of 30
10. Respondents ADMIT paragraph 11 of the Petition. Switzerland and hid the same under layers and layers of foundation
and corporate entities for being false, the truth being that
11. Respondents specifically DENY paragraph 12 of the Petition for Respondents aforesaid properties were lawfully acquired.
lack of knowledge sufficient to form a belief as to the truth of the
allegation since Respondents were not privy to the transactions and 23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29
that they cannot remember exactly the truth as to the matters and 30 of the Petition for lack of knowledge or information sufficient
alleged. to form a belief as to the truth of the allegation since Respondents
were not privy to the transactions regarding the alleged Azio-Verso-
12. Respondents specifically DENY paragraph 13 of the Petition for Vibur Foundation accounts, except that as to Respondent Imelda R.
lack of knowledge or information sufficient to form a belief as to the Marcos she specifically remembers that the funds involved were
truth of the allegation since Respondents cannot remember with lawfully acquired.
exactitude the contents of the alleged ITRs and Balance Sheet.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35,
13. Respondents specifically DENY paragraph 14 of the Petition for 36,37, 38, 39, 40, and 41 of the Petition for lack of knowledge or
lack of knowledge or information sufficient to form a belief as to the information sufficient to form a belief as to the truth of the
truth of the allegation since Respondents cannot remember with allegations since Respondents are not privy to the transactions and
exactitude the contents of the alleged ITRs. as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except
that as to Respondent Imelda R. Marcos she specifically remembers
14. Respondents specifically DENY paragraph 15 of the Petition for
that the funds involved were lawfully acquired.
lack of knowledge or information sufficient to form a belief as to the
truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs. 25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46,
of the Petition for lack of knowledge or information sufficient to
form a belief as to the truth of the allegations since Respondents
were not privy to the transactions and as to such transaction they
were privy to they cannot remember with exactitude the same
having occurred a long time ago, except that as to Respondent
exactitude the contents of the alleged ITRs.
Imelda R. Marcos she specifically remembers that the funds
involved were lawfully acquired.
16. Respondents specifically DENY paragraph 17 of the Petition
insofar as it attributes willful duplicity on the part of the late
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of
President Marcos, for being false, the same being pure conclusions
the Petition for lack of knowledge or information sufficient to form a
based on pure assumption and not allegations of fact; and
belief as to the truth of the allegations since Respondents were not
specifically DENY the rest for lack of knowledge or information
privy to the transactions and as to such transaction they were privy
sufficient to form a belief as to the truth of the allegation since
to they cannot remember with exactitude the same having occurred
Respondents cannot remember with exactitude the contents of the
a long time ago, except that as to Respondent Imelda R. Marcos she
alleged ITRs or the attachments thereto.
specifically remembers that the funds involved were lawfully
acquired.
Upon careful perusal of the foregoing, the Court finds that
respondent Mrs. Marcos and the Marcos children indubitably failed
to tender genuine issues in their answer to the petition for
forfeiture. A genuine issue is an issue of fact which calls for the
18. Respondents specifically DENY paragraph 19 of the Petition for presentation of evidence as distinguished from an issue which is
lack of knowledge or information sufficient to form a belief as to the fictitious and contrived, set up in bad faith or patently lacking in
truth of the allegation since Respondents cannot remember with substance so as not to constitute a genuine issue for trial.
exactitude the contents of the alleged ITRs and that they are not Respondents' defenses of "lack of knowledge for lack of privity" or
privy to the activities of the BIR. "(inability to) recall because it happened a long time ago" or, on the
part of Mrs. Marcos, that "the funds were lawfully acquired" are
19. Respondents specifically DENY paragraph 20 of the Petition for fully insufficient to tender genuine issues. Respondent Marcoses'
lack of knowledge or information sufficient to form a belief as to the defenses were a sham and evidently calibrated to compound and
truth of the allegation since Respondents cannot remember with confuse the issues.
The following pleadings filed by respondent Marcoses are replete
20. Respondents specifically DENY paragraph 21 of the Petition for with indications of a spurious defense:
truth of the allegation since Respondents cannot remember with (a) Respondents' Answer dated October 18, 1993;
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos,
21. Respondents specifically DENY paragraph 22 of the Petition for Supplemental Pre-trial Brief dated October 19, 1999 of Ferdinand,
lack of knowledge or information sufficient to form a belief as to the Jr. and Mrs. Imee Marcos-Manotoc adopting the pre-trial brief of
truth of the allegation since Respondents cannot remember with Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene
exactitude the contents of the alleged ITRs. Marcos-Araneta adopting the pre-trial briefs of her co- respondents;
22. Respondents specifically DENY paragraph 23 insofar as it alleges

that Respondents clandestinely stashed the country's wealth in
Page 9 of 30
(c) Opposition to Motion for Summary Judgment dated March 21, with the other respondents that the funds were "lawfully acquired"
2000, filed by Mrs. Marcos which the other respondents (Marcos without detailing how exactly these funds were supposedly acquired
children) adopted; legally by them. Even in this case before us, her assertion that the
funds were lawfully acquired remains bare and unaccompanied by
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos any factual support which can prove, by the presentation of
and adopted by the Marcos children; evidence at a hearing, that indeed the funds were acquired
legitimately by the Marcos family.
(e) Motion for Reconsideration dated September 26, 2000 filed by
Mrs. Marcos; Motion for Reconsideration dated October 5, 2000 Respondents' denials in their answer at the Sandiganbayan were
jointly filed by Mrs. Manotoc and Ferdinand, Jr., and Supplemental based on their alleged lack of knowledge or information sufficient to
Motion for Reconsideration dated October 9, 2000 likewise jointly form a belief as to the truth of the allegations of the petition.
filed by Mrs. Manotoc and Ferdinand, Jr.;
It is true that one of the modes of specific denial under the rules is a
(f) Memorandum dated December 12, 2000 of Mrs. Marcos and denial through a statement that the defendant is without
Memorandum dated December 17, 2000 of the Marcos children; knowledge or information sufficient to form a belief as to the truth
of the material averment in the complaint. The question, however,
is whether the kind of denial in respondents' answer qualifies as the
(g) Manifestation dated May 26, 1998; and
specific denial called for by the rules. We do not think so. In Morales
vs. Court of Appeals,30 this Court ruled that if an allegation directly
(h) General/Supplemental Agreement dated December 23, 1993. and specifically charges a party with having done, performed or
committed a particular act which the latter did not in fact do,
An examination of the foregoing pleadings is in order. perform or commit, a categorical and express denial must be made.
• Respondents' Answer dated October 18, 1993. Here, despite the serious and specific allegations against them, the
Marcoses responded by simply saying that they had no knowledge
In their answer, respondents failed to specifically deny each and or information sufficient to form a belief as to the truth of such
every allegation contained in the petition for forfeiture in the allegations. Such a general, self-serving claim of ignorance of the
manner required by the rules. All they gave were stock answers like facts alleged in the petition for forfeiture was insufficient to raise an
"they have no sufficient knowledge" or "they could not recall issue. Respondent Marcoses should have positively stated how it
because it happened a long time ago," and, as to Mrs. Marcos, "the was that they were supposedly ignorant of the facts alleged.31
funds were lawfully acquired," without stating the basis of such
assertions. To elucidate, the allegation of petitioner Republic in paragraph 23 of
the petition for forfeiture stated:
Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:
23. The following presentation very clearly and overwhelmingly
A defendant must specify each material allegation of fact the truth show in detail how both respondents clandestinely stashed away
of which he does not admit and, whenever practicable, shall set the country's wealth to Switzerland and hid the same under layers
forth the substance of the matters upon which he relies to support upon layers of foundations and other corporate entities to prevent
his denial. Where a defendant desires to deny only a part of an its detection. Through their dummies/nominees, fronts or agents
averment, he shall specify so much of it as is true and material and who formed those foundations or corporate entities, they opened
shall deny the remainder. Where a defendant is without knowledge and maintained numerous bank accounts. But due to the difficulty if
or information sufficient to form a belief as to the truth of a material not the impossibility of detecting and documenting all those secret
averment made in the complaint, he shall so state, and this shall accounts as well as the enormity of the deposits therein hidden, the
have the effect of a denial.28 following presentation is confined to five identified accounts groups,
with balances amounting to about $356-M with a reservation for
the filing of a supplemental or separate forfeiture complaint should
The purpose of requiring respondents to make a specific denial is to the need arise.32
make them disclose facts which will disprove the allegations of
petitioner at the trial, together with the matters they rely upon in
support of such denial. Our jurisdiction adheres to this rule to avoid Respondents' lame denial of the aforesaid allegation was:
and prevent unnecessary expenses and waste of time by compelling
both parties to lay their cards on the table, thus reducing the 22. Respondents specifically DENY paragraph 23 insofar as it alleges
controversy to its true terms. As explained in Alonso vs. Villamor,29 that Respondents clandestinely stashed the country's wealth in
Switzerland and hid the same under layers and layers of foundations
A litigation is not a game of technicalities in which one, more deeply and corporate entities for being false, the truth being that
schooled and skilled in the subtle art of movement and position, Respondents' aforesaid properties were lawfully acquired.33
entraps and destroys the other. It is rather a contest in which each
contending party fully and fairly lays before the court the facts in Evidently, this particular denial had the earmark of what is called in
issue and then, brushing aside as wholly trivial and indecisive all the law on pleadings as a negative pregnant, that is, a denial
imperfections of form and technicalities of procedure, asks that pregnant with the admission of the substantial facts in the pleading
justice be done upon the merits. Lawsuits, unlike duels, are not to responded to which are not squarely denied. It was in effect an
be won by a rapier's thrust. admission of the averments it was directed at. 34 Stated otherwise, a
negative pregnant is a form of negative expression which carries
On the part of Mrs. Marcos, she claimed that the funds were with it an affirmation or at least an implication of some kind
lawfully acquired. However, she failed to particularly state the favorable to the adverse party. It is a denial pregnant with an
ultimate facts surrounding the lawful manner or mode of acquisition admission of the substantial facts alleged in the pleading. Where a
of the subject funds. Simply put, she merely stated in her answer fact is alleged with qualifying or modifying language and the words
Page 10 of 30
of the allegation as so qualified or modified are literally denied, has The matters referred to in paragraphs 23 to 26 of the respondents'
been held that the qualifying circumstances alone are denied while answer pertained to the creation of five groups of accounts as well
the fact itself is admitted.35 as their respective ending balances and attached documents alleged
in paragraphs 24 to 52 of the Republic's petition for forfeiture.
In the instant case, the material allegations in paragraph 23 of the Respondent Imelda R. Marcos never specifically denied the
said petition were not specifically denied by respondents in existence of the Swiss funds. Her claim that "the funds involved
paragraph 22 of their answer. The denial contained in paragraph 22 were lawfully acquired" was an acknowledgment on her part of the
of the answer was focused on the averment in paragraph 23 of the existence of said deposits. This only reinforced her earlier admission
petition for forfeiture that "Respondents clandestinely stashed the of the allegation in paragraph 23 of the petition for forfeiture
country's wealth in Switzerland and hid the same under layers and regarding the existence of the US$356 million Swiss bank deposits.
layers of foundations and corporate entities." Paragraph 22 of the
respondents' answer was thus a denial pregnant with admissions of The allegations in paragraphs 47 37 and 4838 of the petition for
the following substantial facts: forfeiture referring to the creation and amount of the deposits of
the Rosalys-Aguamina Foundation as well as the averment in
(1) the Swiss bank deposits existed and paragraph 52-a39 of the said petition with respect to the sum of the
Swiss bank deposits estimated to be US$356 million were again not
specifically denied by respondents in their answer. The respondents
(2) that the estimated sum thereof was US$356 million as of
did not at all respond to the issues raised in these paragraphs and
December, 1990.
the existence, nature and amount of the Swiss funds were therefore
deemed admitted by them. As held in Galofa vs. Nee Bon Sing,40 if a
Therefore, the allegations in the petition for forfeiture on the defendant's denial is a negative pregnant, it is equivalent to an
existence of the Swiss bank deposits in the sum of about US$356 admission.
million, not having been specifically denied by respondents in their
answer, were deemed admitted by them pursuant to Section 11,
Moreover, respondents' denial of the allegations in the petition for
Rule 8 of the 1997 Revised Rules on Civil Procedure:
forfeiture "for lack of knowledge or information sufficient to form a
belief as to the truth of the allegations since respondents were not
Material averment in the complaint, xxx shall be deemed admitted privy to the transactions" was just a pretense. Mrs. Marcos' privity
when not specifically denied. xxx.36 to the transactions was in fact evident from her signatures on some
of the vital documents 41 attached to the petition for forfeiture which
By the same token, the following unsupported denials of Mrs. Marcos failed to specifically deny as required by the rules. 42
respondents in their answer were pregnant with admissions of the
substantial facts alleged in the Republic's petition for forfeiture: It is worthy to note that the pertinent documents attached to the
petition for forfeiture were even signed personally by respondent
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating
and 30 of the Petition for lack of knowledge or information sufficient that said documents were within their knowledge. As correctly
to form a belief as to the truth of the allegation since respondents pointed out by Sandiganbayan Justice Francisco Villaruz, Jr. in his
were not privy to the transactions regarding the alleged Azio-Verso- dissenting opinion:
Vibur Foundation accounts, except that, as to respondent Imelda R.
Marcos, she specifically remembers that the funds involved were The pattern of: 1) creating foundations, 2) use of pseudonyms and
lawfully acquired. dummies, 3) approving regulations of the Foundations for the
distribution of capital and income of the Foundations to the First
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, and Second beneficiary (who are no other than FM and his family),
37, 38, 39, 40, 41 of the Petition for lack of knowledge or 4) opening of bank accounts for the Foundations, 5) changing the
information sufficient to form a belief as to the truth of the names of the Foundations, 6) transferring funds and assets of the
allegations since respondents were not privy to the transactions and Foundations to other Foundations or Fides Trust, 7) liquidation of
as to such transactions they were privy to, they cannot remember the Foundations as substantiated by the Annexes U to U-168,
with exactitude the same having occurred a long time ago, except as Petition [for forfeiture] strongly indicate that FM and/or Imelda
to respondent Imelda R. Marcos, she specifically remembers that were the real owners of the assets deposited in the Swiss banks,
the funds involved were lawfully acquired. using the Foundations as dummies.43
25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of How could respondents therefore claim lack of sufficient knowledge
the petition for lack of knowledge or information sufficient to from a or information regarding the existence of the Swiss bank deposits
belief as to the truth of the allegations since respondents were not and the creation of five groups of accounts when Mrs. Marcos and
privy to the transactions and as to such transaction they were privy her late husband personally masterminded and participated in the
to, they cannot remember with exactitude, the same having formation and control of said foundations? This is a fact respondent
occurred a long time ago, except that as to respondent Imelda R. Marcoses were never able to explain.
Marcos, she specifically remembers that the funds involved were
lawfully acquired. Not only that. Respondents' answer also technically admitted the
genuineness and due execution of the Income Tax Returns (ITRs)
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of and the balance sheets of the late Ferdinand E. Marcos and Imelda
the petition for lack of knowledge and information sufficient to form R. Marcos attached to the petition for forfeiture, as well as the
a belief as to the truth of the allegations since respondents were not veracity of the contents thereof.
privy to the transactions and as to such transaction they were privy
to they cannot remember with exactitude the same having occurred The answer again premised its denials of said ITRs and balance
a long time ago, except that as to respondent Imelda R. Marcos, she sheets on the ground of lack of knowledge or information sufficient
specifically remembers that the funds involved were lawfully to form a belief as to the truth of the contents thereof. Petitioner
acquired. correctly points out that respondents' denial was not really
Page 11 of 30
grounded on lack of knowledge or information sufficient to form a xxx
belief but was based on lack of recollection. By reviewing their own
records, respondent Marcoses could have easily determined the (f) the number and names of the witnesses, and the substance of
genuineness and due execution of the ITRs and the balance sheets. their respective testimonies.49
They also had the means and opportunity of verifying the same
from the records of the BIR and the Office of the President. They did
It is unquestionably within the court's power to require the parties
not.
to submit their pre-trial briefs and to state the number of witnesses
intended to be called to the stand, and a brief summary of the
When matters regarding which respondents claim to have no evidence each of them is expected to give as well as to disclose the
knowledge or information sufficient to form a belief are plainly and number of documents to be submitted with a description of the
necessarily within their knowledge, their alleged ignorance or lack of nature of each. The tenor and character of the testimony of the
information will not be considered a specific denial. 44 An witnesses and of the documents to be deduced at the trial thus
unexplained denial of information within the control of the pleader, made known, in addition to the particular issues of fact and law, it
or is readily accessible to him, is evasive and is insufficient to becomes apparent if genuine issues are being put forward
constitute an effective denial.45 necessitating the holding of a trial. Likewise, the parties are obliged
not only to make a formal identification and specification of the
The form of denial adopted by respondents must be availed of with issues and their proofs, and to put these matters in writing and
sincerity and in good faith, and certainly not for the purpose of submit them to the court within the specified period for the prompt
confusing the adverse party as to what allegations of the petition disposition of the action.50
are really being challenged; nor should it be made for the purpose of
delay.46 In the instant case, the Marcoses did not only present The pre-trial brief of Mrs. Marcos, as subsequently adopted by
unsubstantiated assertions but in truth attempted to mislead and respondent Marcos children, merely stated:
deceive this Court by presenting an obviously contrived defense.
xxx
Simply put, a profession of ignorance about a fact which is patently
and necessarily within the pleader's knowledge or means of
WITNESSES
knowing is as ineffective as no denial at all.47 Respondents'
ineffective denial thus failed to properly tender an issue and the
averments contained in the petition for forfeiture were deemed 4.1 Respondent Imelda will present herself as a witness and
judicially admitted by them. reserves the right to present additional witnesses as may be
necessary in the course of the trial.
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
xxx
Its "specific denial" of the material allegation of the petition without
setting forth the substance of the matters relied upon to support its DOCUMENTARY EVIDENCE
general denial, when such matters were plainly within its knowledge
and it could not logically pretend ignorance as to the same, 5.1 Respondent Imelda reserves the right to present and introduce
therefore, failed to properly tender on issue.48 in evidence documents as may be necessary in the course of the
trial.
Thus, the general denial of the Marcos children of the allegations in
the petition for forfeiture "for lack of knowledge or information Mrs. Marcos did not enumerate and describe the documents
sufficient to form a belief as to the truth of the allegations since constituting her evidence. Neither the names of witnesses nor the
they were not privy to the transactions" cannot rightfully be nature of their testimony was stated. What alone appeared certain
accepted as a defense because they are the legal heirs and was the testimony of Mrs. Marcos only who in fact had previously
successors-in-interest of Ferdinand E. Marcos and are therefore claimed ignorance and lack of knowledge. And even then, the
bound by the acts of their father vis-a-vis the Swiss funds. substance of her testimony, as required by the rules, was not made
known either. Such cunning tactics of respondents are totally
• PRE-TRIAL BRIEF DATED OCTOBER 18, 1993 unacceptable to this Court. We hold that, since no genuine issue
was raised, the case became ripe for summary judgment.
The pre-trial brief of Mrs. Marcos was adopted by the three Marcos
children. In said brief, Mrs. Marcos stressed that the funds involved • OPPOSITION TO MOTION FOR SUMMARY JUDGMENT
were lawfully acquired. But, as in their answer, they failed to state DATED MARCH 21, 2000
and substantiate how these funds were acquired lawfully. They
failed to present and attach even a single document that would The opposition filed by Mrs. Marcos to the motion for summary
show and prove the truth of their allegations. Section 6, Rule 18 of judgment dated March 21, 2000 of petitioner Republic was merely
the 1997 Rules of Civil Procedure provides: adopted by the Marcos children as their own opposition to the said
motion. However, it was again not accompanied by affidavits,
The parties shall file with the court and serve on the adverse party, x depositions or admissions as required by Section 3, Rule 35 of the
x x their respective pre-trial briefs which shall contain, among 1997 Rules on Civil Procedure:
others:
x x x The adverse party may serve opposing affidavits, depositions,
xxx or admissions at least three (3) days before hearing. After hearing,
the judgment sought shall be rendered forthwith if the pleadings,
supporting affidavits, depositions, and admissions on file, show that,
(d) the documents or exhibits to be presented, stating the purpose
except as to the amount of damages, there is no genuine issue as to
thereof;
Page 12 of 30
any material fact and that the moving party is entitled to a judgment I join the position taken by my other compañeros here, Your Honor.
as a matter of law.51
xxx
The absence of opposing affidavits, depositions and admissions to
contradict the sworn declarations in the Republic's motion only Atty. SISON:
demonstrated that the averments of such opposition were not
genuine and therefore unworthy of belief.
Irene Araneta as heir do (sic) not own any of the amount, Your
Honor.55
• Demurrer to Evidence dated May 2, 2000;52
Motions for Reconsideration;53 and Memoranda
We are convinced that the strategy of respondent Marcoses was to
of Mrs. Marcos and the Marcos children54
confuse petitioner Republic as to what facts they would prove or
what issues they intended to pose for the court's resolution. There
All these pleadings again contained no allegations of facts showing is no doubt in our mind that they were leading petitioner Republic,
their lawful acquisition of the funds. Once more, respondents and now this Court, to perplexity, if not trying to drag this forfeiture
merely made general denials without alleging facts which would case to eternity.
have been admissible in evidence at the hearing, thereby failing to
raise genuine issues of fact.
• Manifestation dated May 26, 1998 filed by MRS.
Marcos; General/Supplemental Compromise
Mrs. Marcos insists in her memorandum dated October 21, 2002 Agreement dated December 28, 1993
that, during the pre-trial, her counsel stated that his client was just a
beneficiary of the funds, contrary to petitioner Republic's allegation
These pleadings of respondent Marcoses presented nothing but
that Mrs. Marcos disclaimed ownership of or interest in the funds.
feigned defenses. In their earlier pleadings, respondents alleged
either that they had no knowledge of the existence of the Swiss
This is yet another indication that respondents presented a fictitious deposits or that they could no longer remember anything as it
defense because, during the pre-trial, Mrs. Marcos and the Marcos happened a long time ago. As to Mrs. Marcos, she remembered that
children denied ownership of or interest in the Swiss funds: it was lawfully acquired.
PJ Garchitorena: In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:
Make of record that as far as Imelda Marcos is concerned through COMES NOW undersigned counsel for respondent Imelda R.
the statement of Atty. Armando M. Marcelo that the US$360 million Marcos, and before this Honorable Court, most respectfully
more or less subject matter of the instant lawsuit as allegedly manifests:
obtained from the various Swiss Foundations do not belong to the
estate of Marcos or to Imelda Marcos herself. That's your statement
That respondent Imelda R, Marcos owns 90% of the subject matter
of facts?
of the above-entitled case, being the sole beneficiary of the dollar
deposits in the name of the various foundations alleged in the case;
Atty. MARCELO:
That in fact only 10% of the subject matter in the above-entitled
Yes, Your Honor. case belongs to the estate of the late President Ferdinand E.
Marcos.
PJ Garchitorena:
In the Compromise/Supplemental Agreements, respondent
That's it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your Marcoses sought to implement the agreed distribution of the
point here? Does the estate of Marcos own anything of the $360 Marcos assets, including the Swiss deposits. This was, to us, an
million subject of this case. unequivocal admission of ownership by the Marcoses of the said
deposits.
Atty. TECSON:
But, as already pointed out, during the pre-trial conference,
We joined the Manifestation of Counsel. respondent Marcoses denied knowledge as well as ownership of the
Swiss funds.
PJ Garchitorena:
Anyway we look at it, respondent Marcoses have put forth no real
defense. The "facts" pleaded by respondents, while ostensibly
You do not own anything?
raising important questions or issues of fact, in reality comprised
mere verbiage that was evidently wanting in substance and
Atty. TECSON: constituted no genuine issues for trial.
Yes, Your Honor. We therefore rule that, under the circumstances, summary
judgment is proper.
PJ Garchitorena:
In fact, it is the law itself which determines when summary
Counsel for Irene Araneta? judgment is called for. Under the rules, summary judgment is
appropriate when there are no genuine issues of fact requiring the
Atty. SISON: presentation of evidence in a full-blown trial. Even if on their face
Page 13 of 30
the pleadings appear to raise issue, if the affidavits, depositions and belongs to the Marcos estate. It has been an incredible charade
admissions show that such issues are not genuine, then summary from beginning to end.
judgment as prescribed by the rules must ensue as a matter of law. 56
In the hope of convincing this Court to rule otherwise, respondents
In sum, mere denials, if unaccompanied by any fact which will be Maria Imelda Marcos-Manotoc and Ferdinand R. Marcos Jr. contend
admissible in evidence at a hearing, are not sufficient to raise that "by its positive acts and express admissions prior to filing the
genuine issues of fact and will not defeat a motion for summary motion for summary judgment on March 10, 2000, petitioner
judgment.57 Republic had bound itself to go to trial on the basis of existing
issues. Thus, it had legally waived whatever right it had to move for
A summary judgment is one granted upon motion of a party for an summary judgment."60
expeditious settlement of the case, it appearing from the pleadings,
depositions, admissions and affidavits that there are no important We do not think so. The alleged positive acts and express
questions or issues of fact posed and, therefore, the movant is admissions of the petitioner did not preclude it from filing a motion
entitled to a judgment as a matter of law. for summary judgment.
A motion for summary judgment is premised on the assumption Rule 35 of the 1997 Rules of Civil Procedure provides:
that the issues presented need not be tried either because these are
patently devoid of substance or that there is no genuine issue as to Rule 35
any pertinent fact. It is a method sanctioned by the Rules of Court
for the prompt disposition of a civil action where there exists no
Summary Judgment
serious controversy.58 Summary judgment is a procedural device for
the prompt disposition of actions in which the pleadings raise only a
legal issue, not a genuine issue as to any material fact. The theory of Section 1. Summary judgment for claimant. - A party seeking to
summary judgment is that, although an answer may on its face recover upon a claim, counterclaim, or cross-claim or to obtain a
appear to tender issues requiring trial, if it is established by declaratory relief may, at any time after the pleading in answer
affidavits, depositions or admissions that those issues are not thereto has been served, move with supporting affidavits,
genuine but fictitious, the Court is justified in dispensing with the depositions or admissions for a summary judgment in his favor upon
trial and rendering summary judgment for petitioner. 59 all or any part thereof.
In the various annexes to the petition for forfeiture, petitioner Section 2. Summary judgment for defending party. - A party against
Republic attached sworn statements of witnesses who had personal whom a claim, counterclaim, or cross-claim is asserted or a
knowledge of the Marcoses' participation in the illegal acquisition of declaratory relief is sought may, at any time, move with supporting
funds deposited in the Swiss accounts under the names of five affidavits, depositions or admissions for a summary judgment in his
groups or foundations. These sworn statements substantiated the favor as to all or any part thereof. (Emphasis ours) 61
ill-gotten nature of the Swiss bank deposits. In their answer and
other subsequent pleadings, however, the Marcoses merely made Under the rule, the plaintiff can move for summary judgment "at
general denials of the allegations against them without stating facts any time after the pleading in answer thereto (i.e., in answer to the
admissible in evidence at the hearing, thereby failing to raise any claim, counterclaim or cross-claim) has been served." No fixed
genuine issues of fact. reglementary period is provided by the Rules. How else does one
construe the phrase "any time after the answer has been served?"
Under these circumstances, a trial would have served no purpose at
all and would have been totally unnecessary, thus justifying a This issue is actually one of first impression. No local jurisprudence
summary judgment on the petition for forfeiture. There were no or authoritative work has touched upon this matter. This being so,
opposing affidavits to contradict the sworn declarations of the an examination of foreign laws and jurisprudence, particularly those
witnesses of petitioner Republic, leading to the inescapable of the United States where many of our laws and rules were copied,
conclusion that the matters raised in the Marcoses' answer were is in order.
false.
Rule 56 of the Federal Rules of Civil Procedure provides that a party
Time and again, this Court has encountered cases like this which are seeking to recover upon a claim, counterclaim or cross-claim may
either only half-heartedly defended or, if the semblance of a move for summary judgment at any time after the expiration of 20
defense is interposed at all, it is only to delay disposition and gain days from the commencement of the action or after service of a
time. It is certainly not in the interest of justice to allow respondent motion for summary judgment by the adverse party, and that a
Marcoses to avail of the appellate remedies accorded by the Rules party against whom a claim, counterclaim or cross-claim is asserted
of Court to litigants in good faith, to the prejudice of the Republic may move for summary judgment at any time.
and ultimately of the Filipino people. From the beginning, a candid
demonstration of respondents' good faith should have been made However, some rules, particularly Rule 113 of the Rules of Civil
to the court below. Without the deceptive reasoning and Practice of New York, specifically provide that a motion for summary
argumentation, this protracted litigation could have ended a long judgment may not be made until issues have been joined, that is,
time ago. only after an answer has been served. 62 Under said rule, after issues
have been joined, the motion for summary judgment may be
Since 1991, when the petition for forfeiture was first filed, up to the made at any stage of the litigation.63 No fixed prescriptive period is
present, all respondents have offered are foxy responses like "lack provided.
of sufficient knowledge or lack of privity" or "they cannot recall
because it happened a long time ago" or, as to Mrs. Marcos, "the Like Rule 113 of the Rules of Civil Practice of New York, our rules
funds were lawfully acquired." But, whenever it suits them, they also provide that a motion for summary judgment may not be made
also claim ownership of 90% of the funds and allege that only 10% until issues have been joined, meaning, the plaintiff has to wait for
Page 14 of 30
the answer before he can move for summary judgment. 64 And like exists, or that the defenses raised by the defendant(s) are sham or
the New York rules, ours do not provide for a fixed reglementary frivolous, plaintiff may move for summary judgment. A contrary
period within which to move for summary judgment. interpretation would go against the very objective of the Rule on
Summary Judgment which is to "weed out sham claims or defenses
This being so, the New York Supreme Court's interpretation of Rule thereby avoiding the expense and loss of time involved in a trial." 68
113 of the Rules of Civil Practice can be applied by analogy to the
interpretation of Section 1, Rule 35, of our 1997 Rules of Civil In cases with political undertones like the one at bar, adverse parties
Procedure. will often do almost anything to delay the proceedings in the hope
that a future administration sympathetic to them might be able to
Under the New York rule, after the issues have been joined, the influence the outcome of the case in their favor. This is rank
motion for summary judgment may be made at any stage of the injustice we cannot tolerate.
litigation. And what exactly does the phrase "at any stage of the
litigation" mean? In Ecker vs. Muzysh,65 the New York Supreme The law looks with disfavor on long, protracted and expensive
Court ruled: litigation and encourages the speedy and prompt disposition of
cases. That is why the law and the rules provide for a number of
"PER CURIAM. devices to ensure the speedy disposition of cases. Summary
judgment is one of them.
Plaintiff introduced her evidence and the defendants rested on the
case made by the plaintiff. The case was submitted. Owing to the Faithful therefore to the spirit of the law on summary judgment
serious illness of the trial justice, a decision was not rendered within which seeks to avoid unnecessary expense and loss of time in a trial,
sixty days after the final adjournment of the term at which the case we hereby rule that petitioner Republic could validly move for
was tried. With the approval of the trial justice, the plaintiff moved summary judgment any time after the respondents' answer was
for a new trial under Section 442 of the Civil Practice Act. The filed or, for that matter, at any subsequent stage of the litigation.
plaintiff also moved for summary judgment under Rule 113 of the The fact that petitioner agreed to proceed to trial did not in any way
Rules of Civil Practice. The motion was opposed mainly on the prevent it from moving for summary judgment, as indeed no
ground that, by proceeding to trial, the plaintiff had waived her genuine issue of fact was ever validly raised by respondent
right to summary judgment and that the answer and the opposing Marcoses.
affidavits raised triable issues. The amount due and unpaid under
the contract is not in dispute. The Special Term granted both This interpretation conforms with the guiding principle enshrined in
motions and the defendants have appealed. Section 6, Rule 1 of the 1997 Rules of Civil Procedure that the
"[r]ules should be liberally construed in order to promote their
The Special Term properly held that the answer and the opposing objective of securing a just, speedy and inexpensive disposition of
affidavits raised no triable issue. Rule 113 of the Rules of Civil every action and proceeding."69
Practice and the Civil Practice Act prescribe no limitation as to the
time when a motion for summary judgment must be made. The Respondents further allege that the motion for summary judgment
object of Rule 113 is to empower the court to summarily determine was based on respondents' answer and other documents that had
whether or not a bona fide issue exists between the parties, and long been in the records of the case. Thus, by the time the motion
there is no limitation on the power of the court to make such a was filed on March 10, 2000, estoppel by laches had already set in
determination at any stage of the litigation." (emphasis ours) against petitioner.
On the basis of the aforequoted disquisition, "any stage of the We disagree. Estoppel by laches is the failure or neglect for an
litigation" means that "even if the plaintiff has proceeded to trial, unreasonable or unexplained length of time to do that which, by
this does not preclude him from thereafter moving for summary exercising due diligence, could or should have been done earlier,
judgment."66 warranting a presumption that the person has abandoned his right
or declined to assert it.70 In effect, therefore, the principle of laches
In the case at bar, petitioner moved for summary judgment after is one of estoppel because "it prevents people who have slept on
pre-trial and before its scheduled date for presentation of evidence. their rights from prejudicing the rights of third parties who have
Respondent Marcoses argue that, by agreeing to proceed to trial placed reliance on the inaction of the original parties and their
during the pre-trial conference, petitioner "waived" its right to successors-in-interest".71
summary judgment.
A careful examination of the records, however, reveals that
This argument must fail in the light of the New York Supreme Court petitioner was in fact never remiss in pursuing its case against
ruling which we apply by analogy to this case. In Ecker,67 the respondent Marcoses through every remedy available to it,
defendant opposed the motion for summary judgment on a ground including the motion for summary judgment.
similar to that raised by the Marcoses, that is, "that plaintiff had
waived her right to summary judgment" by her act of proceeding to Petitioner Republic initially filed its motion for summary judgment
trial. If, as correctly ruled by the New York court, plaintiff was on October 18, 1996. The motion was denied because of the
allowed to move for summary judgment even after trial and pending compromise agreement between the Marcoses and
submission of the case for resolution, more so should we permit it in petitioner. But during the pre-trial conference, the Marcoses denied
the present case where petitioner moved for summary ownership of the Swiss funds, prompting petitioner to file another
judgment before trial. motion for summary judgment now under consideration by this
Court. It was the subsequent events that transpired after the answer
Therefore, the phrase "anytime after the pleading in answer thereto was filed, therefore, which prevented petitioner from filing the
has been served" in Section 1, Rule 35 of our Rules of Civil questioned motion. It was definitely not because of neglect or
Procedure means "at any stage of the litigation." Whenever it inaction that petitioner filed the (second) motion for summary
becomes evident at any stage of the litigation that no triable issue
Page 15 of 30
judgment years after respondents' answer to the petition for (2) the extent to which the amount of that money or property
forfeiture. exceeds, i. e., is grossly disproportionate to, the legitimate income
of the public officer.
In invoking the doctrine of estoppel by laches, respondents must
show not only unjustified inaction but also that some unfair injury to That spouses Ferdinand and Imelda Marcos were public officials
them might result unless the action is barred. 72 during the time material to the instant case was never in dispute.
This, respondents failed to bear out. In fact, during the pre-trial Paragraph 4 of respondent Marcoses' answer categorically admitted
conference, the Marcoses disclaimed ownership of the Swiss the allegations in paragraph 4 of the petition for forfeiture as to the
deposits. Not being the owners, as they claimed, respondents did personal circumstances of Ferdinand E. Marcos as a public official
not have any vested right or interest which could be adversely who served without interruption as Congressman, Senator, Senate
affected by petitioner's alleged inaction. President and President of the Republic of the Philippines from
December 1, 1965 to February 25, 1986.77
But even assuming for the sake of argument that laches had already
set in, the doctrine of estoppel or laches does not apply when the Likewise, respondents admitted in their answer the contents of
government sues as a sovereign or asserts governmental paragraph 5 of the petition as to the personal circumstances of
rights.73 Nor can estoppel validate an act that contravenes law or Imelda R. Marcos who once served as a member of the Interim
public policy.74 Batasang Pambansa from 1978 to 1984 and as Metro Manila
Governor, concurrently Minister of Human Settlements, from June
As a final point, it must be emphasized that laches is not a mere 1976 to February 1986.78
question of time but is principally a question of the inequity or
unfairness of permitting a right or claim to be enforced or Respondent Mrs. Marcos also admitted in paragraph 10 of her
asserted.75 Equity demands that petitioner Republic should not be answer the allegations of paragraph 11 of the petition for forfeiture
barred from pursuing the people's case against the Marcoses. which referred to the accumulated salaries of respondents
Ferdinand E. Marcos and Imelda R. Marcos. 79 The combined
(2) The Propriety of Forfeiture accumulated salaries of the Marcos couple were reflected in the
Certification dated May 27, 1986 issued by then Minister of Budget
and Management Alberto Romulo. 80 The Certification showed that,
The matter of summary judgment having been thus settled, the
from 1966 to 1985, Ferdinand E. Marcos and Imelda R. Marcos had
issue of whether or not petitioner Republic was able to prove its
accumulated salaries in the amount of P1,570,000 and P718,750,
case for forfeiture in accordance with the requisites of Sections 2
respectively, or a total of P2,288,750:
and 3 of RA 1379 now takes center stage.
Ferdinand E. Marcos, as President

The law raises the prima facie presumption that a property is
unlawfully acquired, hence subject to forfeiture, if its amount or
value is manifestly disproportionate to the official salary and other 1966-1976 at P60,000/year P660,000
lawful income of the public officer who owns it. Hence, Sections 2 1977-1984 at P100,000/year 800,000
and 6 of RA 137976 provide:
1985 at P110,000/year 110,000
x x x x x x P1,570,00
Section 2. Filing of petition. – Whenever any public officer or Imelda R. Marcos, as Minister
employee has acquired during his incumbency an amount or
property which is manifestly out of proportion to his salary as such
public officer or employee and to his other lawful income and the June 1976-1985 at P75,000/year P718,000
income from legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired. In addition to their accumulated salaries from 1966 to 1985 are the
Marcos couple's combined salaries from January to February 1986 in
x x x x x x the amount of P30,833.33. Hence, their total accumulated salaries
amounted to P2,319,583.33. Converted to U.S. dollars on the basis
Sec. 6. Judgment – If the respondent is unable to show to the of the corresponding peso-dollar exchange rates prevailing during
satisfaction of the court that he has lawfully acquired the property the applicable period when said salaries were received, the total
in question, then the court shall declare such property in question, amount had an equivalent value of $304,372.43.
forfeited in favor of the State, and by virtue of such judgment the
property aforesaid shall become the property of the State. Provided, The dollar equivalent was arrived at by using the official annual rates
That no judgment shall be rendered within six months before any of exchange of the Philippine peso and the US dollar from 1965 to
general election or within three months before any special election. 1985 as well as the official monthly rates of exchange in January and
The Court may, in addition, refer this case to the corresponding February 1986 issued by the Center for Statistical Information of
Executive Department for administrative or criminal action, or both. the Bangko Sentral ng Pilipinas.
From the above-quoted provisions of the law, the following facts Prescinding from the aforesaid admissions, Section 4, Rule 129 of
must be established in order that forfeiture or seizure of the Swiss the Rules of Court provides that:
deposits may be effected:
Section 4. – Judicial admissions – An admission, verbal or written,
(1) ownership by the public officer of money or property acquired made by a party in the course of the proceedings in the same case
during his incumbency, whether it be in his name or otherwise, and does not require proof. The admission may be contradicted only by
Page 16 of 30
showing that it was made through palpable mistake or that no such mandatory and should thus be construed strictly against the
admission was made.81 petitioner and liberally in favor of respondent Marcoses.
It is settled that judicial admissions may be made: We hold that it was not for petitioner to establish the Marcoses'
other lawful income or income from legitimately acquired property
(a) in the pleadings filed by the parties; for the presumption to apply because, as between petitioner and
respondents, the latter were in a better position to know if there
were such other sources of lawful income. And if indeed there was
(b) (b) in the course of the trial either by verbal or written
such other lawful income, respondents should have specifically
manifestations or stipulations; or
stated the same in their answer. Insofar as petitioner Republic was
concerned, it was enough to specify the known lawful income of
(c) (c) in other stages of judicial proceedings, as in the pre-trial of respondents.
the case.82
Section 9 of the PCGG Rules and Regulations provides that, in
Thus, facts pleaded in the petition and answer, as in the case at bar, determining prima facie evidence of ill-gotten wealth, the value of
are deemed admissions of petitioner and respondents, respectively, the accumulated assets, properties and other material possessions
who are not permitted to contradict them or subsequently take a of those covered by Executive Order Nos. 1 and 2 must be out of
position contrary to or inconsistent with such admissions.83 proportion to the known lawful income of such persons. The
respondent Marcos couple did not file any Statement of Assets and
The sum of $304,372.43 should be held as the only known lawful Liabilities (SAL) from which their net worth could be determined.
income of respondents since they did not file any Statement of Their failure to file their SAL was in itself a violation of law and to
Assets and Liabilities (SAL), as required by law, from which their net allow them to successfully assail the Republic for not presenting
worth could be determined. Besides, under the 1935 Constitution, their SAL would reward them for their violation of the law.
Ferdinand E. Marcos as President could not receive "any other
emolument from the Government or any of its subdivisions and Further, contrary to the claim of respondents, the admissions made
instrumentalities".84 Likewise, under the 1973 Constitution, by them in their various pleadings and documents were valid. It is of
Ferdinand E. Marcos as President could "not receive during his record that respondents judicially admitted that the money
tenure any other emolument from the Government or any other deposited with the Swiss banks belonged to them.
source."85 In fact, his management of businesses, like the
administration of foundations to accumulate funds, was expressly
We agree with petitioner that respondent Marcoses made judicial
prohibited under the 1973 Constitution:
admissions of their ownership of the subject Swiss bank deposits in
their answer, the General/Supplemental Agreements, Mrs. Marcos'
Article VII, Sec. 4(2) – The President and the Vice-President shall not, Manifestation and Constancia dated May 5, 1999, and the
during their tenure, hold any other office except when otherwise Undertaking dated February 10, 1999. We take note of the fact that
provided in this Constitution, nor may they practice any profession, the Associate Justices of the Sandiganbayan were unanimous in
participate directly or indirectly in the management of any business, holding that respondents had made judicial admissions of their
or be financially interested directly or indirectly in any contract with, ownership of the Swiss funds.
or in any franchise or special privilege granted by the Government
or any other subdivision, agency, or instrumentality thereof,
In their answer, aside from admitting the existence of the subject
including any government owned or controlled corporation.
funds, respondents likewise admitted ownership thereof. Paragraph
22 of respondents' answer stated:
Article VII, Sec. 11 – No Member of the National Assembly shall
appear as counsel before any court inferior to a court with appellate
22. Respondents specifically DENY PARAGRAPH 23 insofar as it
jurisdiction, x x x. Neither shall he, directly or indirectly, be
alleges that respondents clandestinely stashed the country's wealth
interested financially in any contract with, or in any franchise or
in Switzerland and hid the same under layers and layers of
special privilege granted by the Government, or any subdivision,
foundations and corporate entities for being false, the truth being
agency, or instrumentality thereof including any government owned
that respondents' aforesaid properties were lawfully acquired.
or controlled corporation during his term of office. He shall not
(emphasis supplied)
intervene in any matter before any office of the government for his
pecuniary benefit.
By qualifying their acquisition of the Swiss bank deposits as lawful,
respondents unwittingly admitted their ownership thereof.
Article IX, Sec. 7 – The Prime Minister and Members of the Cabinet
shall be subject to the provision of Section 11, Article VIII hereof and
may not appear as counsel before any court or administrative body, Respondent Mrs. Marcos also admitted ownership of the Swiss bank
or manage any business, or practice any profession, and shall also deposits by failing to deny under oath the genuineness and due
be subject to such other disqualification as may be provided by law. execution of certain actionable documents bearing her signature
attached to the petition. As discussed earlier, Section 11, Rule 8 86 of
the 1997 Rules of Civil Procedure provides that material averments
Their only known lawful income of $304,372.43 can therefore legally
in the complaint shall be deemed admitted when not specifically
and fairly serve as basis for determining the existence of a prima
denied.
facie case of forfeiture of the Swiss funds.
The General87 and Supplemental88 Agreements executed by

Respondents argue that petitioner was not able to establish a prima
petitioner and respondents on December 28, 1993 further bolstered
facie case for the forfeiture of the Swiss funds since it failed to
the claim of petitioner Republic that its case for forfeiture was
prove the essential elements under Section 3, paragraphs (c), (d)
proven in accordance with the requisites of Sections 2 and 3 of RA
and (e) of RA 1379. As the Act is a penal statute, its provisions are
1379. The whereas clause in the General Agreement declared that:
Page 17 of 30
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss The testimony of respondent Ferdinand Marcos, Jr. during the
Federal Tribunal on December 21, 1990, that the $356 million hearing on the motion for the approval of the Compromise
belongs in principle to the Republic of the Philippines provided Agreement on April 29, 1998 also lent credence to the allegations of
certain conditionalities are met, but even after 7 years, the FIRST petitioner Republic that respondents admitted ownership of the
PARTY has not been able to procure a final judgment of conviction Swiss bank accounts. We quote the salient portions of Ferdinand
against the PRIVATE PARTY. Jr.'s formal declarations in open court:
While the Supplemental Agreement warranted, inter alia, that: ATTY. FERNANDO:
In consideration of the foregoing, the parties hereby agree that the Mr. Marcos, did you ever have any meetings with PCGG Chairman
PRIVATE PARTY shall be entitled to the equivalent of 25% of the Magtanggol C. Gunigundo?
amount that may be eventually withdrawn from said $356 million
Swiss deposits. F. MARCOS, JR.:
The stipulations set forth in the General and Supplemental Yes. I have had very many meetings in fact with Chairman.
Agreements undeniably indicated the manifest intent of
respondents to enter into a compromise with petitioner. Corollarily,
ATTY. FERNANDO:
respondents' willingness to agree to an amicable settlement with
the Republic only affirmed their ownership of the Swiss deposits for
the simple reason that no person would acquiesce to any Would you recall when the first meeting occurred?
concession over such huge dollar deposits if he did not in fact own
them. PJ GARCHITORENA:
Respondents make much capital of the pronouncement by this In connection with what?
Court that the General and Supplemental Agreements were null and
void.89 They insist that nothing in those agreements could thus be ATTY. FERNANDO:
admitted in evidence against them because they stood on the same
ground as an accepted offer which, under Section 27, Rule 130 90 of
the 1997 Rules of Civil Procedure, provides that "in civil cases, an In connection with the ongoing talks to compromise the various
offer of compromise is not an admission of any liability and is not cases initiated by PCGG against your family?
admissible in evidence against the offeror."
F. MARCOS, JR.:
We find no merit in this contention. The declaration of nullity of said
agreements was premised on the following constitutional and The nature of our meetings was solely concerned with negotiations
statutory infirmities: (1) the grant of criminal immunity to the towards achieving some kind of agreement between the Philippine
Marcos heirs was against the law; (2) the PCGG's commitment to government and the Marcos family. The discussions that led up to
exempt from all forms of taxes the properties to be retained by the the compromise agreement were initiated by our then counsel Atty.
Marcos heirs was against the Constitution; and (3) the government's Simeon Mesina x x x.93
undertaking to cause the dismissal of all cases filed against the
Marcoses pending before the Sandiganbayan and other courts xxx xxx xxx
encroached on the powers of the judiciary. The reasons relied upon
by the Court never in the least bit even touched on the veracity and
ATTY. FERNANDO:
truthfulness of respondents' admission with respect to their
ownership of the Swiss funds. Besides, having made certain
admissions in those agreements, respondents cannot now deny that What was your reaction when Atty. Mesina informed you of this
they voluntarily admitted owning the subject Swiss funds, possibility?
notwithstanding the fact that the agreements themselves were later
declared null and void. F. MARCOS, JR.:
The following observation of Sandiganbayan Justice Catalino My reaction to all of these approaches is that I am always open, we
Castañeda, Jr. in the decision dated September 19, 2000 could not are always open, we are very much always in search of resolution to
have been better said: the problem of the family and any approach that has been made us,
we have entertained. And so my reaction was the same as what I
x x x The declaration of nullity of the two agreements rendered the have always … why not? Maybe this is the one that will finally put an
same without legal effects but it did not detract from the admissions end to this problem.94
of the respondents contained therein. Otherwise stated, the
admissions made in said agreements, as quoted above, remain xxx xxx xxx
binding on the respondents. 91
ATTY. FERNANDO:
A written statement is nonetheless competent as an admission even
if it is contained in a document which is not itself effective for the Basically, what were the true amounts of the assets in the bank?
purpose for which it is made, either by reason of illegality, or
incompetency of a party thereto, or by reason of not being signed,
PJ GARCHITORENA:
executed or delivered. Accordingly, contracts have been held as
competent evidence of admissions, although they may be
unenforceable.92 So, we are talking about liquid assets here? Just Cash?
Page 18 of 30
F. MARCOS, JR.: genuineness and due execution of said instruments, in accordance
with Section 8, Rule 8100 of the 1997 Rules of Civil Procedure.
Well, basically, any assets. Anything that was under the Marcos
name in any of the banks in Switzerland which may necessarily be Likewise, in her Constancia 101 dated May 6, 1999, Imelda Marcos
not cash.95 prayed for the approval of the Compromise Agreement and the
subsequent release and transfer of the $150 million to the rightful
xxx xxx xxx owner. She further made the following manifestations:
PJ GARCHITORENA: xxx xxx xxx
x x x What did you do in other words, after being apprised of this 2. The Republic's cause of action over the full amount is its
contract in connection herewith? forfeiture in favor of the government if found to be ill-gotten. On
the other hand, the Marcoses defend that it is a legitimate asset.
Therefore, both parties have an inchoate right of ownership over
F. MARCOS, JR.:
the account. If it turns out that the account is of lawful origin, the
Republic may yield to the Marcoses. Conversely, the Marcoses must
I assumed that we are beginning to implement the agreement yield to the Republic. (underscoring supplied)
because this was forwarded through the Philippine government
lawyers through our lawyers and then, subsequently, to me. I was a
xxx xxx xxx
little surprised because we hadn't really discussed the details of the
transfer of the funds, what the bank accounts, what the mechanism
would be. But nevertheless, I was happy to see that as far as the 3. Consistent with the foregoing, and the Marcoses having
PCGG is concerned, that the agreement was perfected and that we committed themselves to helping the less fortunate, in the interest
were beginning to implement it and that was a source of satisfaction of peace, reconciliation and unity, defendant MADAM IMELDA
to me because I thought that finally it will be the end. 96 ROMUALDEZ MARCOS, in firm abidance thereby, hereby affirms her
agreement with the Republic for the release and transfer of the US
Dollar 150 million for proper disposition, without prejudice to the
Ferdinand Jr.'s pronouncements, taken in context and in their
final outcome of the litigation respecting the ownership of the
entirety, were a confirmation of respondents' recognition of their
remainder.
ownership of the Swiss bank deposits. Admissions of a party in his
testimony are receivable against him. If a party, as a witness,
deliberately concedes a fact, such concession has the force of a Again, the above statements were indicative of Imelda's admission
judicial admission.97 It is apparent from Ferdinand Jr.'s testimony of the Marcoses' ownership of the Swiss deposits as in fact "the
that the Marcos family agreed to negotiate with the Philippine Marcoses defend that it (Swiss deposits) is a legitimate (Marcos)
government in the hope of finally putting an end to the problems asset."
besetting the Marcos family regarding the Swiss accounts. This was
doubtlessly an acknowledgment of ownership on their part. The rule On the other hand, respondents Maria Imelda Marcos-Manotoc,
is that the testimony on the witness stand partakes of the nature of Ferdinand Marcos, Jr. and Maria Irene Marcos-Araneta filed a
a formal judicial admission when a party testifies clearly and motion102 on May 4, 1998 asking the Sandiganbayan to place the res
unequivocally to a fact which is peculiarly within his own (Swiss deposits) in custodia legis:
knowledge.98
7. Indeed, the prevailing situation is fraught with danger! Unless the
In her Manifestation99 dated May 26, 1998, respondent Imelda aforesaid Swiss deposits are placed in custodia legis or within the
Marcos furthermore revealed the following: Court's protective mantle, its dissipation or misappropriation by the
petitioner looms as a distinct possibility.
That respondent Imelda R. Marcos owns 90% of the subject matter
of the above-entitled case, being the sole beneficiary of the dollar Such display of deep, personal interest can only come from
deposits in the name of the various foundations alleged in the case; someone who believes that he has a marked and intimate right over
the considerable dollar deposits. Truly, by filing said motion, the
That in fact only 10% of the subject matter in the above-entitled Marcos children revealed their ownership of the said deposits.
case belongs to the estate of the late President Ferdinand E.
Marcos; Lastly, the Undertaking103 entered into by the PCGG, the PNB and
the Marcos foundations on February 10, 1999, confirmed the
xxx xxx xxx Marcoses' ownership of the Swiss bank deposits. The subject
Undertaking brought to light their readiness to pay the human rights
victims out of the funds held in escrow in the PNB. It stated:
Respondents' ownership of the Swiss bank accounts as borne out by
Mrs. Marcos' manifestation is as bright as sunlight. And her claim
that she is merely a beneficiary of the Swiss deposits is belied by her WHEREAS, the Republic of the Philippines sympathizes with the
own signatures on the appended copies of the documents plight of the human rights victims-plaintiffs in the aforementioned
substantiating her ownership of the funds in the name of the litigation through the Second Party, desires to assist in the
foundations. As already mentioned, she failed to specifically deny satisfaction of the judgment awards of said human rights victims-
under oath the authenticity of such documents, especially those plaintiffs, by releasing, assigning and or waiving US$150 million of
involving "William Saunders" and "Jane Ryan" which actually the funds held in escrow under the Escrow Agreements dated
referred to Ferdinand Marcos and Imelda Marcos, respectively. That August 14, 1995, although the Republic is not obligated to do so
failure of Imelda Marcos to specifically deny the existence, much under final judgments of the Swiss courts dated December 10 and
less the genuineness and due execution, of the instruments bearing 19, 1997, and January 8, 1998;
her signature, was tantamount to a judicial admission of the
Page 19 of 30
WHEREAS, the Third Party is likewise willing to release, assign Respondents insist that the Sandiganbayan is correct in ruling that
and/or waive all its rights and interests over said US$150 million to petitioner Republic has failed to establish a prima facie case for the
the aforementioned human rights victims-plaintiffs. forfeiture of the Swiss deposits.
All told, the foregoing disquisition negates the claim of respondents We disagree. The sudden turn-around of the Sandiganbayan was
that "petitioner failed to prove that they acquired or own the Swiss really strange, to say the least, as its findings and conclusions were
funds" and that "it was only by arbitrarily isolating and taking not borne out by the voluminous records of this case.
certain statements made by private respondents out of context that
petitioner was able to treat these as judicial admissions." The Court Section 2 of RA 1379 explicitly states that "whenever any public
is fully aware of the relevance, materiality and implications of every officer or employee has acquired during his incumbency an amount
pleading and document submitted in this case. This Court carefully of property which is manifestly out of proportion to his salary as
scrutinized the proofs presented by the parties. We analyzed, such public officer or employee and to his other lawful income and
assessed and weighed them to ascertain if each piece of evidence the income from legitimately acquired property, said property shall
rightfully qualified as an admission. Owing to the far-reaching be presumed prima facie to have been unlawfully acquired. x x x"
historical and political implications of this case, we considered and
examined, individually and totally, the evidence of the parties, even
The elements which must concur for this prima facie presumption to
if it might have bordered on factual adjudication which, by authority
apply are:
of the rules and jurisprudence, is not usually done by this Court.
There is no doubt in our mind that respondent Marcoses admitted
ownership of the Swiss bank deposits. (1) the offender is a public officer or employee;
We have always adhered to the familiar doctrine that an admission (2) he must have acquired a considerable amount of money or
made in the pleadings cannot be controverted by the party making property during his incumbency; and
such admission and becomes conclusive on him, and that all proofs
submitted by him contrary thereto or inconsistent therewith should (3) said amount is manifestly out of proportion to his salary as such
be ignored, whether an objection is interposed by the adverse party public officer or employee and to his other lawful income and the
or not.104 This doctrine is embodied in Section 4, Rule 129 of the income from legitimately acquired property.
Rules of Court:
It is undisputed that spouses Ferdinand and Imelda Marcos were
SEC. 4. Judicial admissions. ─ An admission, verbal or written, made former public officers. Hence, the first element is clearly extant.
by a party in the course of the proceedings in the same case, does
not require proof. The admission may be contradicted only by The second element deals with the amount of money or property
showing that it was made through palpable mistake or that no such acquired by the public officer during his incumbency. The Marcos
admission was made.105 couple indubitably acquired and owned properties during their term
of office. In fact, the five groups of Swiss accounts were admittedly
In the absence of a compelling reason to the contrary, respondents' owned by them. There is proof of the existence and ownership of
judicial admission of ownership of the Swiss deposits is definitely these assets and properties and it suffices to comply with the
binding on them. second element.
The individual and separate admissions of each respondent bind all The third requirement is met if it can be shown that such assets,
of them pursuant to Sections 29 and 31, Rule 130 of the Rules of money or property is manifestly out of proportion to the public
Court: officer's salary and his other lawful income. It is the proof of this
third element that is crucial in determining whether a prima
SEC. 29. Admission by co-partner or agent. ─ The act or declaration facie presumption has been established in this case.
of a partner or agent of the party within the scope of his authority
and during the existence of the partnership or agency, may be given Petitioner Republic presented not only a schedule indicating the
in evidence against such party after the partnership or agency is lawful income of the Marcos spouses during their incumbency but
shown by evidence other than such act or declaration. The same also evidence that they had huge deposits beyond such lawful
rule applies to the act or declaration of a joint owner, joint debtor, income in Swiss banks under the names of five different
or other person jointly interested with the party. 106 foundations. We believe petitioner was able to establish the prima
facie presumption that the assets and properties acquired by the
SEC. 31. Admission by privies. ─ Where one derives title to property Marcoses were manifestly and patently disproportionate to their
from another, the act, declaration, or omission of the latter, while aggregate salaries as public officials. Otherwise stated, petitioner
holding the title, in relation to the property, is evidence against the presented enough evidence to convince us that the Marcoses had
former.107 dollar deposits amounting to US $356 million representing the
balance of the Swiss accounts of the five foundations, an amount
way, way beyond their aggregate legitimate income of only
The declarations of a person are admissible against a party
US$304,372.43 during their incumbency as government officials.
whenever a "privity of estate" exists between the declarant and the
party, the term "privity of estate" generally denoting a succession in
rights.108 Consequently, an admission of one in privity with a party to Considering, therefore, that the total amount of the Swiss deposits
the record is competent.109 Without doubt, privity exists among the was considerably out of proportion to the known lawful income of
respondents in this case. the Marcoses, the presumption that said dollar deposits were
unlawfully acquired was duly established. It was sufficient for the
petition for forfeiture to state the approximate amount of money
And where several co-parties to the record are jointly interested in
and property acquired by the respondents, and their total
the subject matter of the controversy, the admission of one is
competent against all.110
Page 20 of 30
government salaries. Section 9 of the PCGG Rules and Regulations neither inimical to the foundations' interests nor inconsistent with
states: equity and good conscience. The admission of respondent Imelda
Marcos only confirmed what was already generally known: that the
Prima Facie Evidence. – Any accumulation of assets, properties, and foundations were established precisely to hide the money stolen by
other material possessions of those persons covered by Executive the Marcos spouses from petitioner Republic. It negated whatever
Orders No. 1 and No. 2, whose value is out of proportion to their illusion there was, if any, that the foreign foundations owned even a
known lawful income is prima facie deemed ill-gotten wealth. nominal part of the assets in question.
Indeed, the burden of proof was on the respondents to dispute this The rulings of the Swiss court that the foundations, as formal
presumption and show by clear and convincing evidence that the owners, must be given an opportunity to participate in the
Swiss deposits were lawfully acquired and that they had other proceedings hinged on the assumption that they owned a nominal
legitimate sources of income. A presumption is prima facie proof of share of the assets.118 But this was already refuted by no less than
the fact presumed and, unless the fact thus prima facie established Mrs. Marcos herself. Thus, she cannot now argue that the ruling of
by legal presumption is disproved, it must stand as proved. 111 the Sandiganbayan violated the conditions set by the Swiss court.
The directive given by the Swiss court for the foundations to
participate in the proceedings was for the purpose of protecting
Respondent Mrs. Marcos argues that the foreign foundations should
whatever nominal interest they might have had in the assets as
have been impleaded as they were indispensable parties without
formal owners. But inasmuch as their ownership was subsequently
whom no complete determination of the issues could be made. She
repudiated by Imelda Marcos, they could no longer be considered as
asserts that the failure of petitioner Republic to implead the
indispensable parties and their participation in the proceedings
foundations rendered the judgment void as the joinder of
became unnecessary.
indispensable parties was a sine qua non exercise of judicial power.
Furthermore, the non-inclusion of the foreign foundations violated
the conditions prescribed by the Swiss government regarding the In Republic vs. Sandiganbayan,119 this Court ruled that impleading
deposit of the funds in escrow, deprived them of their day in court the firms which are the res of the action was unnecessary:
and denied them their rights under the Swiss constitution and
international law.112 "And as to corporations organized with ill-gotten wealth, but are not
themselves guilty of misappropriation, fraud or other illicit conduct
The Court finds that petitioner Republic did not err in not – in other words, the companies themselves are not the object or
impleading the foreign foundations. Section 7, Rule 3 of the 1997 thing involved in the action, the res thereof – there is no need to
Rules of Civil Procedure, 113 taken from Rule 19b of the American implead them either. Indeed, their impleading is not proper on the
Federal Rules of Civil Procedure, provides for the compulsory strength alone of their having been formed with ill-gotten funds,
joinder of indispensable parties. Generally, an indispensable party absent any other particular wrongdoing on their part…
must be impleaded for the complete determination of the suit.
However, failure to join an indispensable party does not divest the Such showing of having been formed with, or having received ill-
court of jurisdiction since the rule regarding indispensable parties is gotten funds, however strong or convincing, does not, without
founded on equitable considerations and is not jurisdictional. Thus, more, warrant identifying the corporations in question with the
the court is not divested of its power to render a decision even in person who formed or made use of them to give the color or
the absence of indispensable parties, though such judgment is not appearance of lawful, innocent acquisition to illegally amassed
binding on the non-joined party.114 wealth – at the least, not so as place on the Government the onus of
impleading the former with the latter in actions to recover such
An indispensable party115 has been defined as one: wealth. Distinguished in terms of juridical personality and legal
culpability from their erring members or stockholders, said
corporations are not themselves guilty of the sins of the latter, of
[who] must have a direct interest in the litigation; and if this interest
the embezzlement, asportation, etc., that gave rise to the
is such that it cannot be separated from that of the parties to the
Government's cause of action for recovery; their creation or
suit, if the court cannot render justice between the parties in his
organization was merely the result of their members' (or
absence, if the decree will have an injurious effect upon his interest,
stockholders') manipulations and maneuvers to conceal the illegal
or if the final determination of the controversy in his absence will be
origins of the assets or monies invested therein. In this light, they
inconsistent with equity and good conscience.
are simply the res in the actions for the recovery of illegally acquired
wealth, and there is, in principle, no cause of action against them
There are two essential tests of an indispensable party: (1) can relief and no ground to implead them as defendants in said actions."
be afforded the plaintiff without the presence of the other party?
and (2) can the case be decided on its merits without prejudicing the
Just like the corporations in the aforementioned case, the foreign
rights of the other party?116 There is, however, no fixed formula for
foundations here were set up to conceal the illegally acquired funds
determining who is an indispensable party; this can only be
of the Marcos spouses. Thus, they were simply the res in the action
determined in the context and by the facts of the particular suit or
for recovery of ill-gotten wealth and did not have to be impleaded
litigation.
for lack of cause of action or ground to implead them.
In the present case, there was an admission by respondent Imelda

Assuming arguendo, however, that the foundations were
Marcos in her May 26, 1998 Manifestation before the
indispensable parties, the failure of petitioner to implead them was
Sandiganbayan that she was the sole beneficiary of 90% of the
a curable error, as held in the previously cited case of Republic vs.
subject matter in controversy with the remaining 10% belonging to
Sandiganbayan:120
the estate of Ferdinand Marcos. 117 Viewed against this admission,
the foreign foundations were not indispensable parties. Their non-
participation in the proceedings did not prevent the court from "Even in those cases where it might reasonably be argued that the
deciding the case on its merits and according full relief to petitioner failure of the Government to implead the sequestered corporations
Republic. The judgment ordering the return of the $356 million was as defendants is indeed a procedural abberation, as where said
firms were allegedly used, and actively cooperated with the
Page 21 of 30
defendants, as instruments or conduits for conversion of public Finally, petitioner Republic contends that the Honorable
funds and property or illicit or fraudulent obtention of favored Sandiganbayan Presiding Justice Francis Garchitorena committed
government contracts, etc., slight reflection would nevertheless lead grave abuse of discretion in reversing himself on the ground that the
to the conclusion that the defect is not fatal, but one correctible original copies of the authenticated Swiss decisions and their
under applicable adjective rules – e.g., Section 10, Rule 5 of the authenticated translations were not submitted to the court a quo.
Rules of Court [specifying the remedy of amendment during trial to Earlier PJ Garchitorena had quoted extensively from the unofficial
authorize or to conform to the evidence]; Section 1, Rule 20 translation of one of these Swiss decisions in his ponencia dated July
[governing amendments before trial], in relation to the rule 29, 1999 when he denied the motion to release US$150 Million to
respecting omission of so-called necessary or indispensable parties, the human rights victims.
set out in Section 11, Rule 3 of the Rules of Court. It is relevant in
this context to advert to the old familiar doctrines that the omission While we are in reality perplexed by such an incomprehensible
to implead such parties "is a mere technical defect which can be change of heart, there might nevertheless not be any real need to
cured at any stage of the proceedings even after judgment"; and belabor the issue. The presentation of the authenticated
that, particularly in the case of indispensable parties, since their translations of the original copies of the Swiss decision was not de
presence and participation is essential to the very life of the action, rigueur for the public respondent to make findings of fact and reach
for without them no judgment may be rendered, amendments of its conclusions. In short, the Sandiganbayan's decision was not
the complaint in order to implead them should be freely allowed, dependent on the determination of the Swiss courts. For that
even on appeal, in fact even after rendition of judgment by this matter, neither is this Court's.
Court, where it appears that the complaint otherwise indicates their
identity and character as such indispensable parties." 121
The release of the Swiss funds held in escrow in the PNB is
dependent solely on the decision of this jurisdiction that said funds
Although there are decided cases wherein the non-joinder of belong to the petitioner Republic. What is important is our own
indispensable parties in fact led to the dismissal of the suit or the assessment of the sufficiency of the evidence to rule in favor of
annulment of judgment, such cases do not jibe with the matter at either petitioner Republic or respondent Marcoses. In this instance,
hand. The better view is that non-joinder is not a ground to dismiss despite the absence of the authenticated translations of the Swiss
the suit or annul the judgment. The rule on joinder of indispensable decisions, the evidence on hand tilts convincingly in favor of
parties is founded on equity. And the spirit of the law is reflected in petitioner Republic.
Section 11, Rule 3122 of the 1997 Rules of Civil Procedure. It prohibits
the dismissal of a suit on the ground of non-joinder or misjoinder of
WHEREFORE, the petition is hereby GRANTED. The assailed
parties and allows the amendment of the complaint at any stage of
Resolution of the Sandiganbayan dated January 31, 2002 is SET
the proceedings, through motion or on order of the court on its own
ASIDE. The Swiss deposits which were transferred to and are now
initiative.123
deposited in escrow at the Philippine National Bank in the estimated
aggregate amount of US$658,175,373.60 as of January 31, 2002,
Likewise, jurisprudence on the Federal Rules of Procedure, from plus interest, are hereby forfeited in favor of petitioner Republic of
which our Section 7, Rule 3124 on indispensable parties was copied, the Philippines.
allows the joinder of indispensable parties even after judgment has
been entered if such is needed to afford the moving party full
SO ORDERED.
relief.125 Mere delay in filing the joinder motion does not necessarily
result in the waiver of the right as long as the delay is
excusable.126 Thus, respondent Mrs. Marcos cannot correctly argue G.R. No. 133858 August 12, 2003 ACQUITTED
that the judgment rendered by the Sandiganbayan was void due to
the non-joinder of the foreign foundations. The court had PEOPLE OF THE PHILIPPINES, Appellee,
jurisdiction to render judgment which, even in the absence of vs.
indispensable parties, was binding on all the parties before it though HERMINIANO SATORRE @ EMIANO SATORRE, Appellant.
not on the absent party.127 If she really felt that she could not be
granted full relief due to the absence of the foreign foundations, she DECISION
should have moved for their inclusion, which was allowable at any
stage of the proceedings. She never did. Instead she assailed the
judgment rendered. YNARES-SANTIAGO, J.:
In the face of undeniable circumstances and the avalanche of Appellant Herminiano Satorre alias Emiano Satorre was charged
documentary evidence against them, respondent Marcoses failed to with Murder in an information which reads:
justify the lawful nature of their acquisition of the said assets.
Hence, the Swiss deposits should be considered ill-gotten wealth That on or about the 25th day of May, 1997 at 2:00 o’clock dawn,
and forfeited in favor of the State in accordance with Section 6 of RA more or less, in Sitio Kamari, Barangay Calidngan, Municipality of
1379: Carcar, Province of Cebu, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, with intent to kill,
SEC. 6. Judgment.─ If the respondent is unable to show to the with the use of .38 paltik revolver and by means of treachery and
satisfaction of the court that he has lawfully acquired the property evident premeditation, did then and there willfully, unlawfully and
in question, then the court shall declare such property forfeited in feloniously attack and shoot ROMERO PANTILGAN, hitting the latter
favor of the State, and by virtue of such judgment the property at the head which caused his instantaneous death.
aforesaid shall become property of the State x x x.
CONTRARY TO LAW.1
THE FAILURE TO PRESENT AUTHENTICATED TRANSLATIONS OF THE
SWISS DECISIONS On arraignment, appellant pleaded "not guilty". Trial on the merits
then ensued.
Page 22 of 30
Gliceria Saraum, wife of the victim Romero Pantilgan, testified that WHEREFORE, IN VIEW OF ALL THE FOREGOING CONSIDERATIONS,
at 2:00 a.m. of May 25, 1997, she and her two children were asleep accused Herminiano Satorre is found guilty beyond reasonable
inside the house of her parents at Tagaytay, Calidngan, Carcar, doubt of the crime of Murder and is hereby imposed the penalty of
Cebu. Her mother, Florida Saraum, was also in the house. Her RECLUSION PERPETUA, with accessory penalties of the law; to
husband, Romero, went out to attend a fiesta. While she was indemnify the heirs of Romero Pantilgan in the sum of P50,000.00
asleep, she was awakened by a gunshot. Gliceria got up and went and to pay the costs. The accused is, however, credited in full during
out to the porch, where she found her dead husband lying on the the whole period of his detention provided he will signify in writing
ground. Blood oozed out of a gunshot wound on his head. that he will abide by all the rules and regulations of the penitentiary.
Rufino Abayata, a barangay kagawad, testified that around 7:00 SO ORDERED.

a.m. of May 25, 1997, his fellow barangay kagawad, Pio Alvarado,
fetched him from his house and, together, they went to verify a Appellant interposed this appeal, contending that the trial court
report regarding a dead person on the porch of the Saraum erred: (1) in giving full faith and credence to the testimonies of
residence. Upon confirming the incident, they reported the matter prosecution witnesses; (2) in proceeding with the trial of the instant
to the Carcar Police. Rufino further narrated that appellant’s father, case amounting to lack of due process provided by law due to its
Abraham Satorre, informed them that it was appellant who shot denial of accused’s motion for preliminary investigation or
Pantilgan. They looked for appellant in the house of his brother, reinvestigation; and (3) in rejecting the testimony of the defense’s
Felix Satorre, at Dumlog, Talisay, Cebu, but were told that he witnesses.
already left. Nevertheless, appellant’s brothers, Margarito and
Rosalio Satorre, went to Rufino’s house and surrendered the gun
The appeal has merit.
which was allegedly used in killing Pantilgan.
In particular, appellant claims that his alleged confession or

Flavio Gelle narrated that he accompanied appellant and his father,
admission, which was concocted by the Barangay Captain, is
Abraham, to the Barangay Captain of Can-asohan, Carcar, Cebu
inadmissible in evidence for being hearsay and for being obtained
where appellant admitted killing Pantilgan. Thereafter, appellant
without a competent and independent counsel of his choice. In
was detained.
effect, the quantum of evidence adduced by the prosecution was
not sufficient to overcome the constitutional presumption of
Corroborating Gelle’s story, Cynthia Castañares, Barangay Captain of innocence. The bare allegation that he confessed or admitted killing
Can-asuhan, Carcar, Cebu testified that Abraham Satorre and Gelle Romero Pantilgan is not proof of guilt.
brought appellant to her residence where he confessed having killed
Pantilgan. Appellant allegedly informed her that he killed Pantilgan
Rule 130, Section 26 of the Rules of Court defines an admission as
because the latter struck him with a piece of wood. That same
an "act, declaration or omission of a party as to a relevant fact." A
evening, she went to the Carcar Police Station with appellant where
confession, on the other hand, under Section 33 of the same Rule is
she executed an affidavit. She further averred that appellant
the "declaration of an accused acknowledging his guilt of the offense
voluntarily narrated that he killed Pantilgan with the use of a
charged, or of any offense necessarily included therein."
handgun which he wrestled from his possession.
Both may be given in evidence against the person admitting or

Dr. Plebia Villanueva, Municipal Health Officer of Carcar, Cebu
confessing. On the whole, a confession, as distinguished from an
certified that the cause of Pantilgan’s death was gunshot wound. 2
admission, is a declaration made at any time by a person, voluntarily
and without compulsion or inducement, stating or acknowledging
Bonifacio Ayag, NBI Ballistician, testified that the deformed bullet that he had committed or participated in the commission of a
taken from Pantilgan’s head wound was fired from the gun crime.5
surrendered by appellant’s brothers to the Carcar Police. 3
Evidently, appellant’s alleged declaration owning up to the killing
Denying the charges against him, appellant claimed that he was before the Barangay Captain was a confession. Since the declaration
asleep inside his house at the time of the incident. He alleged that was not put in writing and made out of court, it is an oral
Rufino Abayata had a grudge against him because of an incident extrajudicial confession.
when he tied Rufino’s cow to prevent it from eating the corn in his
farm. He denied having confessed to the killing of Pantilgan. He
The nexus that connects appellant to the killing was his alleged oral
disclaimed ownership over the paltik .38 revolver and stated that he
extrajudicial confession given to Barangay Captain Cynthia
could not even remember having surrendered a firearm to
Castañares and two barangay kagawads. According to the trial
Castañares.
court, their testimonies were positive and convincing. Appellant’s
retraction of his oral extrajudicial confession should not be given
Abraham Satorre corroborated appellant’s testimony. He denied much credence in the assessment of evidence. However, appellant
having accompanied appellant to Castañares’ house to surrender disputes the admissibility and sufficiency of the testimonial evidence
him. offered to prove the alleged oral extrajudicial confession.
Appellant’s brother, Rosalio Satorre, claimed that he never There is no question as to the admissibility of appellant’s alleged
accompanied appellant to Castañares’ house to surrender. His other oral extrajudicial confession. Indeed, as far as admissibility is
brother, Felix, also testified that he never surrendered any firearm concerned, Rule 130, Section 33 of the Rules of Court makes no
to anybody. distinction whether the confession is judicial or extrajudicial.
After trial, the court a quo gave credence to the prosecution’s The rationale for the admissibility of a confession is that if it is
evidence and rendered a decision convicting appellant of Murder,4 made freely and voluntarily, a confession constitutes evidence of a
the dispositive portion of which reads: high order since it is supported by the strong presumption that no
sane person or one of normal mind will deliberately and knowingly
Page 23 of 30
confess himself to be the perpetrator of a crime, unless prompted that appellant freely and voluntarily confessed killing Pantilgan. It
by truth and conscience.6 raises questions not only as to the voluntariness of the alleged
confession, but also on whether appellant indeed made an oral
Accordingly, the basic test for the validity of a confession is – was it confession.
voluntarily and freely made.
To be sure, a confession is not required to be in any particular form.
The term "voluntary" means that the accused speaks of his free will It may be oral or written, formal or informal in character. It may be
and accord, without inducement of any kind, and with a full and recorded on video tape, sound motion pictures, or tape. 14 However,
complete knowledge of the nature and consequences of the while not required to be in writing to be admissible in evidence, it is
confession, and when the speaking is so free from influences advisable, if not otherwise recorded by video tape or other means,
affecting the will of the accused, at the time the confession was to reduce the confession to writing. This adds weight to the
made, that it renders it admissible in evidence against him.7 Plainly, confession and helps convince the court that it was freely and
the admissibility of a confession in evidence hinges on its voluntarily made. If possible the confession, after being reduced to
voluntariness. writing, should be read to the defendant, have it read by defendant,
have him sign it, and have it attested by witnesses.15
The voluntariness of a confession may be inferred from its
language such that if, upon its face, the confession exhibits no The trial court gave credence to appellant’s oral extrajudicial
suspicious circumstances tending to cast doubt upon its integrity, confession relying on jurisprudence which we find are not
it being replete with details – which could only be supplied by the applicable. In the cases cited by the trial court, 16 the convictions
accused – reflecting spontaneity and coherence, it may be were based on circumstantial evidence in addition to the appellants’
considered voluntary.8 The problem with appraising voluntariness confessions, or the extrajudicial confessions were reduced to writing
occurs when the confession is an oral extrajudicial confession and were replete with details which only appellants could have
because the proof of voluntariness cannot be inferred from the supplied. In the case at bar, however, there was no circumstantial
testimony of a witness who allegedly heard the confessant since evidence to corroborate the extrajudicial confession of appellant.
there is no written proof that such confession was voluntarily made. More importantly, the said confession does not contain details
Neither can the confessant be appraised by the court since, which could have only been known to appellant.
precisely, it was made outside the judicial proceeding. The problem
posed therefore by an oral extrajudicial confession is not only the Furthermore, the events alleged in the confession are inconsistent
admissibility of the testimony asserting or certifying that such with the physical evidence. According to Barangay Captain
confession was indeed made, but more significantly whether it was Castañares, appellant narrated to her that during the struggle
made voluntarily. between him and the deceased, he fell to the ground after the latter
hit him on the head with a piece of wood. In the autopsy report,
On the question of whether a confession is made voluntarily, the however, Dr. Plebia Villanueva found that the entrance wound on
age, character, and circumstances prevailing at the time it was made the deceased was located at the top of the head or the crown,
must be considered. Much depends upon the situation and indicating that the victim was probably lying down when he was
surroundings of the accused. This is the position taken by the courts, shot.17
whatever the theory of exclusion of incriminating statements may
be. The intelligence of the accused or want of it must also be taken Indeed, an extrajudicial confession will not support a conviction
into account. It must be shown that the defendant realized the where it is uncorroborated. There must be such corroboration that,
import of his act.9 when considered in connection with confession, will show the guilt
of accused beyond a reasonable doubt. Circumstantial evidence may
In the case at bar, appellant was a 19-year old farmer who did not be sufficient corroboration of a confession. It is not necessary that
even finish first grade. Granting that he made the confession in the the supplementary evidence be entirely free from variance with the
presence of Barangay Captain Castañares, he may not have realized extrajudicial confession, or that it show the place of offense or the
the full import of his confession and its consequences. This is not to defendant’s identity or criminal agency. All facts and circumstances
say that he is not capable of making the confession out of a desire attending the particular offense charged are admissible to
to tell the truth if prompted by his conscience. What we are saying corroborate extrajudicial confession. 18
is that due to the aforesaid personal circumstances of appellant, the
voluntariness of his alleged oral confession may not be definitively Nonetheless, the fatal gun and the slug extracted from Pantilgan’s
appraised and evaluated. brain can not be considered as corroborative evidence. While the
slug embedded in Pantilgan’s brain came from the fatal gun, the
At any rate, an extrajudicial confession forms but a prima facie case prosecution was not able to conclusively establish the ownership of
against the party by whom it is made. Such confessions are not the gun other than the bare testimony of prosecution witnesses that
conclusive proof of that which they state; it may be proved that appellant’s brothers surrendered the gun to them. This was denied
they were uttered in ignorance, or levity, or mistake; and hence, by appellant and his brothers and there was no other proof linking
they are, at best, to be regarded as only cumulative proof which the gun to him.1âwphi1
affords but a precarious support and on which, when
uncorroborated, a verdict cannot be permitted to rest. 10 On the whole, it appears that the trial court simply based
appellant’s conviction on the testimonial evidence of prosecution
Main prosecution witness Castañares testified that after appellant’s witnesses that appellant orally owned up to the killing. We cannot
alleged oral confession, she brought the latter to the office of the affirm appellant’s conviction on mere testimonial evidence,
police at the Municipal Hall of Carcar, Cebu.11 At the police station, considering that the voluntariness of said confession cannot be
Castañares was investigated, after which she executed her sworn conclusively established because of appellant’s personal
statement.12 Also at the police station, appellant allegedly admitted circumstances and the failure of the police to reduce the alleged
before policemen that he killed Pantilgan. 13 His statement was not oral confession into writing. The doubts surrounding the alleged oral
taken nor was his confession reduced into writing. This confession, the conduct of the investigation as well as the
circumstance alone casts some doubt on the prosecution’s account
Page 24 of 30
inapplicable jurisprudential precedents cited by the trial court do agent functions.4 In these 19 years, he was designated as a Unit
not lead to the same moral certainty of appellant’s guilt. Manager, a Branch Manager and a Regional Sales Manager, and
now posits that he was not only an insurance agent for Manulife but
To conclude, it must be stressed that in our criminal justice system, was its employee as well.
the overriding consideration is not whether the court doubts the
innocence of the accused, but whether it entertains a reasonable
doubt as to their guilt. Where there is no moral certainty as to their
guilt, they must be acquitted even though their innocence may be We find no basis or any error to merit the reconsideration of our
questionable. The constitutional right to be presumed innocent until June 29, 2010 Resolution.
proven guilty can be overthrown only by proof beyond reasonable
doubt.19 In fact, unless the prosecution discharges the burden of
proving the guilt of the accused beyond reasonable doubt, the latter
need not even offer evidence in his behalf. 20
A. Labor Law Control = Employment Relationship
WHEREFORE, in view of the foregoing, the decision of the Regional
Trial Court, Branch 18, Cebu City, convicting appellant Herminiano
Satorre alias Emiano Satorre of Murder and sentencing him to suffer
the penalty of reclusion perpetua and to indemnify the heirs in the Control over the performance of the task of one providing service –
amount of P50,000.00 as well as costs, is REVERSED and SET ASIDE. both with respect to the means and manner, and the results of the
For lack of evidence to establish guilt beyond reasonable doubt, service – is the primary element in determining whether an
appellant Herminiano Satorre alias Emiano Satorre is ACQUITTED employment relationship exists. We resolve the petitioner’s Motion
and is ordered immediately RELEASED from confinement, unless he against his favor since he failed to show that the control Manulife
is lawfully held in custody for another cause. exercised over him was the control required to exist in an employer-
employee relationship; Manulife’s control fell short of this norm and
SO ORDERED. carried only the characteristic of the relationship between an
insurance company and its agents, as defined by the Insurance Code
and by the law of agency under the Civil Code.
G.R. No. 167622 January 25, 2011
The petitioner asserts in his Motion that Manulife’s labor law

control over him was demonstrated (1) when it set the objectives
and sales targets regarding production, recruitment and training
GREGORIO V. TONGKO, Petitioner, programs; and (2) when it prescribed the Code of Conduct for
Agents and the Manulife Financial Code of Conduct to govern his
vs. activities.5 We find no merit in these contentions.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and

RENATO A. VERGEL DE DIOS, Respondents.
In our June 29, 2010 Resolution, we noted that there are built-in
elements of control specific to an insurance agency, which do not
amount to the elements of control that characterize an employment
RESOLUTION relationship governed by the Labor Code. The Insurance Code
provides definite parameters in the way an agent negotiates for the
sale of the company’s insurance products, his collection activities
and his delivery of the insurance contract or policy.6 In addition, the
Civil Code defines an agent as a person who binds himself to do
BRION, J.: something in behalf of another, with the consent or authority of the
latter.7 Article 1887 of the Civil Code also provides that in the
execution of the agency, the agent shall act in accordance with the
instructions of the principal.
We resolve petitioner Gregorio V. Tongko’s bid, through his Motion
for Reconsideration,1 to set aside our June 29, 2010 Resolution that
reversed our Decision of November 7, 2008.2 With the reversal, the
assailed June 29, 2010 Resolution effectively affirmed the Court of All these, read without any clear understanding of fine legal
Appeals’ ruling3 in CA-G.R. SP No. 88253 that the petitioner was an distinctions, appear to speak of control by the insurance company
insurance agent, not the employee, of the respondent The over its agents. They are, however, controls aimed only at specific
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife). results in undertaking an insurance agency, and are, in fact,
parameters set by law in defining an insurance agency and the
attendant duties and responsibilities an insurance agent must
observe and undertake. They do not reach the level of control into
In his Motion for Reconsideration, petitioner reiterates the the means and manner of doing an assigned task that invariably
arguments he had belabored in his petition and various other characterizes an employment relationship as defined by labor law.
submissions. He argues that for 19 years, he performed From this perspective, the petitioner’s contentions cannot prevail.
administrative functions and exercised supervisory authority over
employees and agents of Manulife, in addition to his insurance
Page 25 of 30
To reiterate, guidelines indicative of labor law "control" do not insurance agent that he had always been (as evidenced by the
merely relate to the mutually desirable result intended by the Agreement that governed his relationship with Manulife from the
contractual relationship; they must have the nature of dictating the start to its disagreeable end). The petitioner simply progressed from
means and methods to be employed in attaining the result.8 Tested his individual agency to being a lead agent who could use other
by this norm, Manulife’s instructions regarding the objectives and agents in selling insurance and share in the earnings of these other
sales targets, in connection with the training and engagement of agents.
other agents, are among the directives that the principal may
impose on the agent to achieve the assigned tasks. They are
targeted results that Manulife wishes to attain through its agents.
Manulife’s codes of conduct, likewise, do not necessarily intrude
In sum, we find absolutely no evidence of labor law control, as
into the insurance agents’ means and manner of conducting their
extensively discussed in our Resolution of June 29, 2010, granting
sales. Codes of conduct are norms or standards of behavior rather
Manulife’s motion for reconsideration. The Dissent, unfortunately,
than employer directives into how specific tasks are to be done.
misses this point.
These codes, as well as insurance industry rules and regulations, are
not per se indicative of labor law control under our jurisprudence.9
B. No Resulting Inequity
The duties10 that the petitioner enumerated in his Motion are not
supported by evidence and, therefore, deserve scant consideration.
Even assuming their existence, however, they mostly pertain to the
duties of an insurance agent such as remitting insurance fees to We also do not agree that our assailed Resolution has the effect of
Manulife, delivering policies to the insured, and after-sale services. fostering an inequitable or unjust situation. The records show that
For agents leading other agents, these include the task of the petitioner was very amply paid for his services as an insurance
overseeing other insurance agents, the recruitment of other agent, who also shared in the commissions of the other agents
insurance agents engaged by Manulife as principal, and ensuring under his guidance. In 1997, his income was ₱2,822,620; in 1998,
that these other agents comply with the paperwork necessary in ₱4,805,166.34; in 1999, ₱6,797,814.05; in 2001, ₱6,214,737.11; and
selling insurance. That Manulife exercises the power to assign and in 2002, ₱8,003,180.38. All these he earned as an insurance agent,
remove agents under the petitioner’s supervision is in keeping with as he failed to ever prove that he earned these sums as an
its role as a principal in an agency relationship; they are Manulife employee. In technical terms, he could not have earned all these as
agents in the same manner that the petitioner had all along been a an employee because he failed to provide the substantial evidence
Manulife agent. required in administrative cases to support the finding that he was a
Manulife employee. No inequity results under this legal situation;
what would be unjust is an award of backwages and separation pay
– amounts that are not due him because he was never an employee.
The petitioner also questions Manulife’s act of investing him with
different titles and positions in the course of their relationship, given
the respondents’ position that he simply functioned as an insurance
agent.11 He also considers it an unjust and inequitable situation The Dissent’s discussion on this aspect of the case begins with the
that he would be unrewarded for the years he spent as a unit wide disparity in the status of the parties – that Manulife is a big
manager, a branch manager, and a regional sales manager.12 Canadian insurance company while Tongko is but a single agent of
Manulife. The Dissent then went on to say that "[i]f is but just, it is
but right, that the Court interprets the relationship between Tongko
and Manulife as one of employment under labor laws and to uphold
his constitutionally protected right, as an employee, to security of
Based on the evidence on record, the petitioner’s occupation was to
tenure and entitlement to monetary award should such right be
sell Manulife’s insurance policies and products from 1977 until the
infringed."15 We cannot simply invoke the magical formula by
termination of the Career Agent’s Agreement (Agreement). The
creating an employment relationship even when there is none
evidence also shows that through the years, Manulife permitted him
because of the unavoidable and inherently weak position of an
to exercise guiding authority over other agents who operate under
individual over a giant corporation.
their own agency agreements with Manulife and whose
commissions he shared.13 Under this scheme – an arrangement
that pervades the insurance industry – petitioner in effect became a
"lead agent" and his own commissions increased as they included
his share in the commissions of the other agents;14 he also received The Dissent likewise alluded to an ambiguity in the true relationship
greater reimbursements for expenses and was allowed to use of the parties after Tongko’s successive appointments. We already
Manulife’s facilities. His designation also changed from unit pointed out that the legal significance of these appointments had
manager to branch manager and then to regional sales manager, to not been sufficiently explained and that it did not help that Tongko
reflect the increase in the number of agents he recruited and never bothered to present evidence on this point. The Dissent
guided, as well as the increase in the area where these agents recognized this but tried to excuse Tongko from this failure in the
operated. subsequent discussion, as follows:
As our assailed Resolution concluded and as we now similarly [o]ther evidence was adduced to show such duties and
conclude, these arrangements, and the titles and positions the responsibilities. For one, in his letter of November 6, 2001,
petitioner was invested with, did not change his status from the respondent De Dios addressed petitioner as sales manager. And as I
Page 26 of 30
wrote in my Dissent to the June 29, 2010 Resolution, it is difficult to original award to him should not include the insurance sales
imagine that Manulife did not issue promotional appointments to commissions. This solution, according to the line taken by the
petitioner as unit manager, branch manager, and, eventually, Dissent then, was justified on the view that this was made on a case-
regional sales manager. Sound management practice simply to-case basis.
requires an appointment for any upward personnel movement,
particularly when additional functions and the corresponding
increase in compensation are involved. Then, too, the adverted
affidavits of the managers of Manulife as to the duties and
Decisions of the Supreme Court, as the Civil Code provides, form
responsibilities of a unit manager, such as petitioner, point to the
part of the law of the land. When the Court states that the
conclusion that these managers were employees of Manulife,
determination of the existence of an employment relationship
applying the "four-fold" test.16
should be on a case-to-case basis, this does not mean that there will
be as many laws on the issue as there are cases. In the context of
this case, the four-fold test is the established standard for
determining employer-employee relationship and the existence of
This Court (and all adjudicators for that matter) cannot and should these elements, most notably control, is the basis upon which a
not fill in the evidentiary gaps in a party’s case that the party failed conclusion on the absence of employment relationship was
to support; we cannot and should not take the cudgels for any anchored. This simply means that a conclusion on whether
party. Tongko failed to support his cause and we should simply view employment relationship exists in a particular case largely depends
him and his case as they are; our duty is to sit as a judge in the case on the facts and, in no small measure, on the parties’ evidence vis-à-
that he and the respondent presented. vis the clearly defined jurisprudential standards. Given that the
parties control what and how the facts will be established in a
particular case and/or how a particular suit is to be litigated,
deciding the issues on a case-to-case basis becomes an imperative.
To support its arguments on equity, the Dissent uses the
Constitution and the Civil Code, using provisions and principles that
are all motherhood statements. The mandate of the Court, of
course, is to decide cases based on the facts and the law, and not to Another legal reality, a more important one, is that the duty of a
base its conclusions on fundamental precepts that are far removed court is to say what the law is.17 This is the same duty of the
from the particular case presented before it. When there is no room Supreme Court that underlies the stare decisis principle. This is how
for their application, of capacity of principles, reliance on the the public, in general and the insurance industry in particular, views
application of these fundamental principles is misplaced. the role of this Court and courts in general in deciding cases. The
lower courts and the bar, most specially, look up to the rulings of
this Court for guidance. Unless extremely unavoidable, the Court
must, as a matter of sound judicial policy, resist the temptation of
branding its ruling pro hac vice.
C. Earnings were Commissions
The compromise solution of declaring Tongko both an employee

That his earnings were agent’s commissions arising from his work as
and an agent is legally unrealistic, unwieldy and is, in fact, legally
an insurance agent is a matter that the petitioner cannot deny, as
infirm, as it goes against the above basic principles of judicial
these are the declarations and representations he stated in his
operation. Likewise, it does not and cannot realistically solve the
income tax returns through the years. It would be doubly unjust,
problem/issue in this case; it actually leaves more questions than
particularly to the government, if he would be allowed at this late
answers.
point to turn around and successfully claim that he was merely an
employee after he declared himself, through the years, as an
independent self-employed insurance agent with the privilege of
deducting business expenses. This aspect of the case alone –
considered together with the probative value of income tax As already pointed out, there is no legal basis (be it statutory or
declarations and returns filed prior to the present controversy — jurisprudential) for the part-employee/part-insurance agent status
should be enough to clinch the present case against the petitioner’s under an essentially principal-agent contractual relation which the
favor. Dissent proposes to accord to Tongko. If the Dissent intends to
establish one, this is highly objectionable for this would amount to
judicial legislation. A legal relationship, be it one of employment or
one based on a contract other than employment, exists as a matter
of law pursuant to the facts, incidents and legal consequences of the
D. The Dissent’s Solution:
relationship; it cannot exist devoid of these legally defined
underlying facts and legal consequences unless the law itself creates
Unwieldy and Legally Infirm the relationship – an act that is beyond the authority of this Court to
do.
The Dissent proposes that Tongko should be considered as part

employee (as manager) and part insurance agent; hence, the Additionally, the Dissent’s conclusion completely ignores an
original decision should be modified to pertain only to the unavoidable legal reality – that the parties are bound by a contract
termination of his employment as a manager and not as an of agency that clearly subsists notwithstanding the successive
insurance agent. Accordingly, the backwages component of the designation of Tongko as a unit manager, a branch manager and a
Page 27 of 30
regional sales manager. (As already explained in our Resolution
granting Manulife’s motion for reconsideration, no evidence on
record exists to provide the Court with clues as to the precise In contrast, the present case is remarkable for the absence of
impact of all these designations on the contractual agency evidence of any change in the nature of the petitioner’s
relationship.) The Dissent, it must be pointed out, concludes that employment with Manulife. As previously stated above and in our
Tongko’s employment as manager was illegally terminated; thus, he assailed Resolution, the petitioner had always been governed by the
should be accordingly afforded relief therefor. But, can Tongko be Agreement from the start until the end of his relationship with
given the remedies incidental to his dismissal as manager separately Manulife. His agency status never changed except to the extent of
from his status as an insurance agent? In other words, since the being a lead agent. Thus, the cited cases – where changes in
respondents terminated all relationships with Tongko through the company-agent relationship expressly changed and where the
termination letter, can we simply rule that his role as a manager was subsequent contracts were the ones passed upon by the Court –
illegally terminated without touching on the consequences of this cannot be totally relied upon as authoritative.
ruling on his status as an insurance agent? Expressed in these terms,
the inseparability of his contract as agent with any other
relationship that springs therefrom can thus be seen as an
insurmountable legal obstacle.
We cannot give credit as well to the petitioner’s claim of
employment based on the affidavits executed by other Manulife
agents describing their duties, because these same affidavits only
affirm their status as independent agents, not as employees. To
The Dissent’s compromise approach would also sanction split quote these various claims:20
jurisdiction. The labor tribunals shall have jurisdiction over Tongko’s
employment as manager while another entity shall decide the
issues/cases arising from the agency relationship. If the managerial
employment is anchored on the agency, how will the labor tribunals
decide an issue that is inextricably linked with a relationship that is 1.a. I have no fixed wages or salary since my services are
outside the loop of their jurisdiction? As already mentioned in the compensated by way of commissions based on the computed
Resolution granting Manulife’s reconsideration, the DOMINANT premiums paid in full on the policies obtained thereat;
relationship in this case is agency and no other.
1.b. I have no fixed working hours and employ my own method in

E. The Dissent’s Cited Cases soliciting insurance at a time and place I see fit;
The Dissent cites the cases of Great Pacific Life Assurance 1.c. I have my own assistant and messenger who handle my daily
Corporation v. National Labor Relations Commission18 and Insular work load;
Life Assurance Co., Ltd. v. National Labor Relations Commission19 to
support the allegation that Manulife exercised control over the
petitioner as an employer.
1.d. I use my own facilities, tools, materials and supplies in carrying
out my business of selling insurance;
In considering these rulings, a reality that cannot but be recognized

is that cases turn and are decided on the basis of their own unique
facts; the ruling in one case cannot simply be bodily lifted and xxxx
applied to another, particularly when notable differences exist
between the cited cases and the case under consideration; their
respective facts must be strictly examined to ensure that the ruling
in one applies to another. This is particularly true in a comparison of
the cited cases with the present case. Specifically, care should be 6. I have my own staff that handles day to day operations of my
taken in reading the cited cases and applying their rulings to the office;
present case as the cited cases all dealt with the proper legal
characterization of subsequent management contracts that
superseded the original agency contract between the insurance
company and the agent.
7. My staff are my own employees and received salaries from me;
In Great Pacific Life, the Ruiz brothers were appointed to positions

xxxx
different from their original positions as insurance agents, whose
duties were clearly defined in a subsequent contract. Similarly, in
Insular, de los Reyes, a former insurance agent, was appointed as
acting unit manager based on a subsequent contract. In both cases,
the Court anchored its findings of labor control on the stipulations 9. My commission and incentives are all reported to the Bureau of
of these subsequent contracts. Internal Revenue (BIR) as income by a self-employed individual or
Page 28 of 30
professional with a ten (10) percent creditable withholding tax. I The dissent also erroneously cites eight other cases — Social
also remit monthly for professionals. Security System v. Court of Appeals,23 Cosmopolitan Funeral
Homes, Inc. v. Maalat,24 Algon Engineering Construction
Corporation v. National Labor Relations Commission,25 Equitable
Banking Corporation v. National Labor Relations Commission,26
Lazaro v. Social Security Commission,27 Dealco Farms, Inc. v.
The petitioner cannot also rely on the letter written by respondent
National Labor Relations Commission,28 South Davao Development
Renato Vergel de Dios to prove that Manulife exercised control over
Company, Inc. v. Gamo,29 and Abante, Jr. v. Lamadrid Bearing &
him. As we already explained in the assailed Resolution:
Parts Corporation.30 The dissent cited these cases to support its
allegation that labor laws and jurisprudence should be applied in
cases, to the exclusion of other laws such as the Civil Code or the
Insurance Code, even when the latter are also applicable.
Even de Dios’ letter is not determinative of control as it indicates the
least amount of intrusion into Tongko’s exercise of his role as
manager in guiding the sales agents. Strictly viewed, de Dios’
directives are merely operational guidelines on how Tongko could
In Social Security System, Cosmopolitan Funeral Homes, Dealco
align his operations with Manulife’s re-directed goal of being a "big
Farms, and South Davao Development, the issue that repeats itself
league player." The method is to expand coverage through the use
is whether complainants were employees or independent
of more agents. This requirement for the recruitment of more
contractors; the legal relationships involved are both labor law
agents is not a means-and-method control as it relates, more than
concepts and make no reference to the Civil Code (or even the
anything else, and is directly relevant, to Manulife’s objective of
Insurance Code). The provisions cited in the Dissent — Articles 1458-
expanded business operations through the use of a bigger sales
1637 of the Civil Code31 and Articles 1713-1720 of the Civil Code 32
force whose members are all on a principal-agent relationship. An
— do not even appear in the decisions cited.
important point to note here is that Tongko was not supervising
regular full-time employees of Manulife engaged in the running of
the insurance business; Tongko was effectively guiding his corps of
sales agents, who are bound to Manulife through the same
agreement that he had with manulife, all the while sharing in these In Algon, the issue was whether the lease contract should dictate
agents’ commissions through his overrides.21 the legal relationship between the parties, when there was proof of
an employer-employee relationship. In the cited case, the lease
provisions on termination were thus considered irrelevant because
of a substantial evidence of an employment relationship. The cited
case lacks the complexity of the present case; Civil Code provisions
Lastly, in assailing the Agreement between him and Manulife, the
on lease do not prescribe that lessees exercise control over their
petitioner cites Paguio v. National Labor Relations Commission22 on
lessors in the way that the Insurance Code and the Civil provide that
the claim that the agreement that the parties signed did not
insurance companies and principals exercised control over their
conclusively indicate the legal relationship between them.
agents.
The evidentiary situation in the present case, however, shows that

The issue in Equitable, on the other hand, is whether a lawyer-client
despite the petitioner’s insistence that the Agreement was no
relationship or an employment relationship governs the legal
longer binding between him and Manulife, no evidence was ever
relation between parties. Again, this case is inapplicable as it does
adduced to show that their relationship changed so that Manulife at
not illustrate the predominance of labor laws and jurisprudence
some point controlled the means and method of the petitioner’s
over other laws, in general, and the Insurance Code and Civil Code,
work. In fact, his evidence only further supports the conclusion that
in particular. It merely weighed the evidence in favor of an
he remained an independent insurance agent – a status he admits,
employment relationship over that of a lawyer-client relationship.
subject only to the qualification that he is at the same time an
Similarly in Lazaro, the Court found ample proof of control
employee. Thus, we can only conclude that the Agreement
determinative of an employer-employee relationship.1âwphi1 Both
governed his relations with Manulife.
cases are not applicable to the present case, which is attended by
totally different factual considerations as the petitioner had not
offered any evidence of the company’s control in the means and
manner of the performance of his work.
Additionally, it is not lost on us that Paguio is a ruling based on a
different factual setting; it involves a publishing firm and an account
executive, whose repeated engagement was considered as an
indication of employment. Our ruling in the present case is specific
On the other hand, we find it strange that the dissent cites Abante
to the insurance industry, where the law permits an insurance
as a precedent, since the Court, in this case, held that an employee-
company to exercise control over its agents within the limits
employer relationship is notably absent in this case as the
prescribed by law, and to engage independent agents for several
complainant was a sales agent. This case better supports the
transactions and within an unlimited period of time without the
majority’s position that a sales agent, who fails to show control in
relationship amounting to employment. In light of these realities,
the concept of labor law, cannot be considered an employee, even if
the petitioner’s arguments on his last argument must also fail.
the company exercised control in the concept of a sales agent.33
Page 29 of 30
It bears stressing that our ruling in this case is not about which law
has primacy over the other, but that we should be able to reconcile
these laws. We are merely saying that where the law makes it
mandatory for a company to exercise control over its agents, the
complainant in an illegal dismissal case cannot rely on these legally
prescribed control devices as indicators of an employer-employee
relationship. As shown in our discussion, our consideration of the
Insurance Code and Civil Code provisions does not negate the
application of labor laws and jurisprudence; ultimately, we
dismissed the petition because of its failure to comply with the
control test.
WHEREFORE, premises considered, we hereby DENY the Motion for

Reconsideration WITH FINALITY for lack of merit. No further
pleadings shall be entertained. Let entry of judgment proceed in due
course.
SO ORDERED.
Page 30 of 30

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G.R. No.

DISPOSITION 3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT

(C) One of the foremost concerns of the Aquino Government in

PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

22. Respondents specifically DENY paragraph 23 insofar as it alleges

Ferdinand E. Marcos, as President

The General87 and Supplemental88 Agreements executed by

While the Supplemental Agreement warranted, inter alia, that: ATTY. FERNANDO:

PJ GARCHITORENA: xxx xxx xxx

In the present case, there was an admission by respondent Imelda

Rufino Abayata, a barangay kagawad, testified that around 7:00 SO ORDERED.

In particular, appellant claims that his alleged confession or

Both may be given in evidence against the person admitting or

G.R. No. 167622 January 25, 2011

The petitioner asserts in his Motion that Manulife’s labor law

THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and

The compromise solution of declaring Tongko both an employee

The Dissent proposes that Tongko should be considered as part

1.b. I have no fixed working hours and employ my own method in

In considering these rulings, a reality that cannot but be recognized

In Great Pacific Life, the Ruiz brothers were appointed to positions

The evidentiary situation in the present case, however, shows that

WHEREFORE, premises considered, we hereby DENY the Motion for

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