THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, PETITIONER, VS. HON. JOSE V. NEPOMUCENO AS PRESIDING JUDGE, REGIONAL TRIAL COURT, 5TH JUDICIAL REGION, BRANCH 23, NAGA CITY AND P…

Presidential Commission on Good Government versus Nepomuceno

The Case

This is a special civil action for certiorari, prohibition, and mandamus, with a prayer for preliminary injunction and a restraining order, brought by the Presidential Commission on Good Government against Judge Jose Nepomuceno of the Regional Trial Court of Naga City, Branch 23, and against Philippine Radio Corporation, the operator of Radio Station DWRN. The Commission complains that the trial judge assumed jurisdiction over it, interfered with its orders, and restrained its fiscal agents from exercising the powers given to it by Executive Order Number 1, Executive Order Number 2, and Executive Order Number 14. The case matters because it fixes the constitutional and statutory place of the Commission in our hierarchy of adjudicatory bodies: it tells us that the Commission exercises quasi-judicial functions, that it is co-equal with the regional trial courts, and that the proper forum to challenge its sequestration and take-over orders is the Sandiganbayan, not the ordinary trial courts.

Procedural History

On November 17, 1986, Philippine Radio Corporation filed before the Regional Trial Court of Naga City, Branch 23, a petition for prohibition and injunction with a prayer for a temporary restraining order and for preliminary injunctive writs, seeking to undo the sequestration and take-over of Station DWRN. Instead of answering, the Commission filed a motion to dismiss and opposition, raising purely legal issues and denying none of the facts pleaded. The parties then filed a joint manifestation agreeing to submit memoranda in lieu of oral argument. Without ruling on the motion to dismiss, Judge Nepomuceno issued an order dated June 4, 1987, granting a writ of preliminary injunction, and the writ was issued on June 9, 1987. The Commission then came to the Supreme Court by this special civil action, filed on June 16, 1987.

Facts

On April 18, 1986, Commissioner Ramon Diaz of the Presidential Commission on Good Government issued a sequestration order over Station DWRN in Naga City, a station operated by Philippine Radio Corporation and said to be owned by Ambassador Eduardo Cojuangco. The order was implemented on May 2, 1986. The station manager, Celso Baguio, refused to give an inventory of the station's properties, refused to submit his monthly report of disbursements, and refused to let a Commission member inspect the books. A discreet investigation by Antonio Betito uncovered serious anomalies, including the concealment of properties of the sequestered station.

Because of these discoveries, the Commission authorized a take-over of the station on October 14, 1986. When Baguio learned of the take-over order, he asked to speak with his employees, and that occasion was used to induce a permanent boycott. The station went off the air for lack of personnel and technicians, and the transmitter's fuse and main switch were later found tampered with and destroyed. The officer in charge temporarily hired personnel and accepted volunteer announcers and reporters to keep the station operating.

A month after the take-over, Philippine Radio Corporation sued in the Naga City trial court. The trial court enjoined the Commission's agents from preventing Baguio from performing his functions, from cancelling or replacing programs and contracted commercials, and from taking over management or control of the station, except for preservative acts, upon a bond of 50,000 pesos. On the strength of that writ, Baguio retook the station and shut down its operations.

Issues

• Whether or not the regional trial courts have jurisdiction over the Presidential Commission on Good Government and over properties sequestered and placed in its custody under Executive Order Number 1, Executive Order Number 2, and Executive Order Number 14.
• Whether or not the regional trial courts may interfere with, restrain, or set aside the orders and actions of the Commission.
• Whether or not the sequestration and take-over orders issued by the Commission in this case are legal and valid.
• Whether or not the Commission and its members are immune from suit.

Applicable Provisions

Section 2 of Executive Order Number 1 defines the Commission's mandate, including the recovery of ill-gotten wealth and the takeover or sequestration of business enterprises:

(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, or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship.

This mandate is the source of the Commission's authority to sequester and provisionally take over the station.

Section 3 of the same Executive Order grants the Commission its powers of investigation, sequestration, provisional take-over, and restraint:

(b) To sequester or place or cause to be placed under its control or possession any building or offices wherein any ill-gotten wealth or properties may be found, and any records pertaining thereto, in order to prevent their destruction, concealment or disappearance which would frustrate or hamper the investigation or otherwise prevent the Commission from accomplishing its task.

(c) To provisionally take over in the public interest or to prevent its disposal or dissipation, business enterprises and properties taken over by the government of the Marcos Administration or by entities or persons close to former President Marcos, until the transactions leading to such acquisition by the latter can be disposed of by the appropriate authorities.

These clauses supply the legal basis for the sequestration and the take-over that the trial court enjoined.

Section 2 of Executive Order Number 14 lodges the cases in the Sandiganbayan:

The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan which shall have exclusive and original jurisdiction thereof.

This provision is decisive on the question of forum: challenges to the Commission's orders belong to the Sandiganbayan.

Section 4 of Executive Order Number 1 accords immunity from suit for damages:

No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this order.

This shields the Commission and its members from suits arising from the performance of their task.

Ruling

On the first issue, the Court held that the regional trial courts have no jurisdiction over the Commission. The Commission exercises quasi-judicial functions, and in the exercise of those functions it is a co-equal body with the regional trial courts. The Court applied the settled rule that co-equal bodies have no power and authority to control one another. The Court also stressed that the Court of Appeals is not vested with appellate or supervisory jurisdiction over the Commission.

On the second issue, the Court held that the trial courts may not interfere with, restrain, or set aside the Commission's orders. The Commission does not hear and decide with finality whether property is ill-gotten; that function is lodged in the Sandiganbayan. Those who wish to contest the Commission's orders must seek recourse in the Sandiganbayan, whose decisions are in turn reviewable on certiorari exclusively by the Supreme Court.

On the third issue, the Court upheld the sequestration and take-over orders as legal and valid. The Commission had no intention of taking over operations; it was constrained to act by the station manager's arrogance and uncooperativeness, and the take-over was meant to preserve the station's funds, assets, and properties. The Court acknowledged the standard in the Baseco case, that the Commission is a conservator, not an owner, and cannot perform acts of strict ownership. It found, however, that the acts here did not constitute ownership but a measure of control brought about by the exigencies of the situation, and so were not repugnant to that standard. What is essential is that there be a prima facie factual basis for the order and sufficient and reasonable opportunity to contest it and to be heard, and the Commission's rules provided that opportunity.

On the fourth issue, the Court held that the Commission and its members are immune from suit, as expressly provided in Executive Order Number 1, consistent with the sovereign's exemption from suit without its consent.

Doctrine

The Presidential Commission on Good Government exercises quasi-judicial functions and is a co-equal body with the regional trial courts; co-equal bodies have no power and authority to control each other. The regional trial courts therefore cannot take cognizance of suits challenging the Commission's sequestration and take-over orders, nor restrain or set aside those orders. The proper forum is the Sandiganbayan, which has exclusive and original jurisdiction over the cases the Commission files, and whose decisions are reviewable on certiorari exclusively by the Supreme Court. The Commission is a conservator, not an owner: it cannot exercise acts of dominion over sequestered property, and its resort to provisional remedies must entail the least possible interference with business operations. Its orders must rest on a prima facie factual basis and be subject to a sufficient and reasonable opportunity to contest them and be heard. Finally, the Commission and its members are immune from suit for anything done or omitted in the discharge of their task.

Disposition

The Court granted the petition, set aside the trial court's order and writ of preliminary injunction, and restrained the trial court from further proceeding in the case, leaving Philippine Radio Corporation to seek recourse in the Sandiganbayan.

Remember This

Memorize this line: the Commission is a co-equal body with the regional trial courts, and challenges to its sequestration and take-over orders belong to the Sandiganbayan. Examiners use this case on jurisdiction over the Commission, on the conservator-not-owner doctrine, and on the Commission's immunity from suit.