REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), PETITIONER, VS. SANDIGANBAYAN, MARIA REMEDIOS ARGANA, ET AL., RESPONDENTS.

This is a petition for review on certiorari of the
resolutions dated April 6, 1994 and June 16, 1994 of the Third Division of the
Sandiganbayan^[1]
in Civil Case No. 0026, dismissing the amended petition for forfeiture of
property which petitioner, through the Solicitor General, had filed in behalf
of the Republic of the Philippines against the private respondents.

The facts show that on March 17, 1986 a certain Atty. Victor
Aguinaldo wrote the President of the Philippines, requesting investigation of
the alleged “unexplained wealth of former Muntinlupa Mayor Maximino
Argana, Donata A. Argana, and the Dummies.” The letter was referred by the
then Minister of Justice to the Presidential Commission on Good Government, or
PCGG, which filed, through the Solicitor General, forfeiture proceedings in the
Sandiganbayan.

Noting, however, that forfeiture proceedings partake, in some
respect, of the nature of a criminal prosecution, the Sandiganbayan on October
28, 1987 directed the PCGG to conduct a “previous inquiry similar to
preliminary investigation in criminal cases,” as required by sec. 2 of
Republic Act No. 1379. Meantime it
suspended the proceedings before it.

On February 7, 1990, the PCGG informed the Sandiganbayan that it
had conducted “the preliminary investigation . . . and . . . found that
there [was] sufficient evidence to support and sustain the allegations in the
Petition for forfeiture filed in this case by the Solicitor General.” The
petition for forfeiture was subsequently amended to include Milagros Argana
Rogelio as additional respondent.

On July 5, 1991, private respondents moved to dismiss the case,
contending that (1) former Mayor Maximino Argana had died on June 30, 1985 and
that his death was a bar to the filing of the petition for forfeiture, and (2)
the PCGG had acted beyond its competence in conducting the preliminary
investigation.

With respect to the first contention, the Sandiganbayan ruled
that the death of former Mayor Argana was not a bar to the forfeiture
proceedings because such proceedings are actions in rem, designed to
reach properties and, therefore, are not effected by the death of the
defendant. However, the Sandiganbayan
found the second ground to be meritorious for the reason that under Executive
Order No. 1, which created the PCGG, only cases for recovery of ill-gotten
wealth acquired because of close association with former President Ferdinand E.
Marcos can be investigated by the PCGG. Since there was no allegation that former Mayor Maximino Argana had
acquired the properties allegedly ill-gotten by him because of close
association with former President Marcos, the PCGG had no authority to
investigate him. Accordingly, the
Sandiganbayan ordered:

WHEREFORE, the Motion To Dismiss together with its Supplement,
filed by the respondents, through counsel, is hereby granted. As prayed for, the Amended Petition For
Forfeiture in the above-entitled case is hereby dismissed but without prejudice
to re-filing of the same by the Office of the Solicitor General, if so
warranted, after the necessary preliminary investigation shall have first been
conducted by the Ombudsman.

Petitioner moved for reconsideration, but its motion was denied
by the Sandiganbayan in its resolution dated June 16, 1994. Hence this petition, in which the only issue
is whether the PCGG had the power to conduct an investigation as required by
sec. 2 of Republic Act No. 1379. We
hold that it did. For this reason, the
resolutions appealed from, holding that the PCGG had no power to investigate
the charges against private respondents and dismissing the forfeiture
proceedings against them, are reversed.

In dismissing the proceedings against private respondents, the
Sandiganbayan held:

Clearly, from both the letter of Atty. Victor D. Aguinaldo, dated
March 17, 1986, and the Amended Petition for forfeiture, dated October 29, 1990,
in the case at bar, it is alleged that the late Mayor Maximino Argana
unlawfully accumulated wealth by taking advantage of his position as the then
incumbent mayor of Muntinlupa, Metro Manila. No attempt was made whatsoever to link the late Mayor Maximino Argana or
his accumulation of unexplained wealth to the late President Marcos and/or his
family.

It is settled that the jurisdiction of the PCGG to investigate and
initiate cases for violation of Republic Act Nos. 3019 (Anti Graft and Corrupt
Practices Act) and 1379 (An act Declaring forfeited in Favor of the State Any
Property Found to Have Been Unlawfully Acquired By Any Public Officer or
Employee and Providing for the Procedure Therefor), in relation to Executive
Order Nos. 1, 2, 14 and 14-A, is limited to the recovery of ill-gotten wealth
accumulated by former President Marcos, his immediate family, relatives,
subordinates and close associates, whether located in the Philippines or abroad
including the takeover or sequestration of all business enterprises and
entities served or controlled by them during his administration, directly or
through nominees, by taking undue advantage of their public office and/or using
their powers, authority, influence, connections or relationships (E.O. No. 1,
Sec. 2).

In other words, as held by the Supreme Court in the case of
Republic vs. Migrino, 189 SCRA 289, promulgated August 30, 1990, for the PCGG
to acquire jurisdiction over cases for violations of Republic Act Nos. 3019 and
1379, “(i)t does not suffice that the respondent is or was a government
official or employee during the administration of former President Ferdinand E.
Marcos. There must be a prima facie showing that the respondent unlawfully accumulated wealth by
virtue of his close association or relation with former President Marcos and/or
his wife. This is so because the
respondent’s case will fall under general laws and procedures on the matter.

Contrary to the ruling of the Sandiganbayan, the power of the
PCGG to conduct preliminary investigation of cases of this nature does not
extend only to cases brought to recover ill-gotten wealth accumulated by former
President Marcos or his close associates but includes as well cases of graft
and corruption assigned by the President to the PCGG for investigation. Thus, sec. 2 of Executive Order No. 1,
creating the PCGG, provides:

Sec. 2. The Commission shall be charged with the
task of assisting the President in regard to the following matters:

(a) The recovery of
all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located
in the Philippines or abroad, including the takeover or sequestration of all
business enterprises and entities owned or controlled by them, during his
administration, directly or through nominees, by taking undue advantage of
their public office and/or using their powers, authority, influence,
connections or relationship.

(b)  The investigation of such cases of graft and
corruption as the President may assign to the Commission from time to time.

As already stated, this case originated in a letter sent to then
President Corazon C. Aquino which the Minister of Justice referred to the PCGG
on March 19, 1986. The jurisdiction of
the PCGG, therefore, derived from par. (b) of sec. 2 which, unlike par. (a),
does not require as an element that the accused took advantage of his close
association with President Marcos in committing graft and corruption. The case at bar is distinguishable from Republic v. Migrino,^[2] which the
Sandiganbayan cited in support of its ruling, in that unlike the Migrino case the
complaint in this case was assigned by the President to the PCGG for
investigation. In the Migrino case we
held that the PCGG did not have the power to investigate and prosecute charges
of unexplained wealth brought against the private respondent where there was no
prima
facie showing that he had unlawfully accumulated wealth by virtue of
close association or relation with former President Marcos and/or his wife as
required by sec. 2(a) of Executive Order No. 1. But although there is neither allegation nor showing in the case
at bar that former Mayor Argana had unlawfully acquired his wealth by reason of
close association with former President Marcos, the PCGG had jurisdiction to
conduct the investigation because this is a case of graft and corruption
assigned to it by the President of the Philippines pursuant to sec. 2(b) of
Executive Order No. 1.

It is noteworthy that, in its earlier resolution of October 28,
1987 returning this case to the PCGG for a “previous inquiry similar to
preliminary investigation,” the Sandiganbayan had upheld the power of the
PCGG to conduct a preliminary investigation on precisely the basis of sec. 2(b)
of Executive Order No. 1. Thus it
ruled:

Subsequent statutes, however, have eroded the exclusivity of the
Tanodbayan’s authority to investigate and prosecute cases under the
jurisdiction of the Sandiganbayan. By
Executive Order No. 1 dated February 28, 1986, the Presidential Commission on
Good Government (PCGG for short) was created and charged with the task of
assisting the President, among others, in:

“(a) The recovery of all
ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, . . . by taking
undue advantage of their powers, authority, influence, connections or
relationship.

“(b) The investigation of
such cases of graft and corruption as the President may assign to Commission
(PCGG) from time to time.” (Sec. 2.)

Apparently, the Sandiganbayan was persuaded to reverse itself
because of a misapprehension of the true import of our decision in Republic v. Migrino. For
what has not been sufficiently noticed is that complaints for graft and
corruption, although not committed because of close association with former
President Marcos, can be investigated by the PCGG if directed by the President
of the Philippines.

In accordance with sec. 1 of Executive Order No. 14, dated May 7,
1986, the PCGG, with the assistance of the Solicitor General, is the agency of
the government empowered to bring these proceedings for forfeiture of property
allegedly acquired unlawfully before February 25, 1986, the date of the EDSA
Revolution. The power to investigate
cases of ill-gotten or unexplained wealth acquired after that date is now
vested in the Ombudsman.^[3]

WHEREFORE, the resolutions appealed from are REVERSED and
the case is REMANDED to the Sandiganbayan for further proceedings.

SO ORDERED.

Narvasa, C.J., (Chairman), Regalado, and Puno, JJ., concur.

Padilla, J., on leave.

^[1]
Per Associate Justice Sabino R. de Leon, Jr. with the concurrence of Associate
Justices Regino Hermosisima, Jr. and Cipriano A. del Rosario.

^[2]
189 SCRA 289, 298 (1990).

^[3]
Republic v. Sandiganbayan, 200 SCRA 667 (1991).