ROBERTO S. BENEDICTO, PETITIONER, VS. THE BOARD OF ADMINISTRATORS OF TELEVISION STATIONS RPN, BBC AND IBC, RESPONDENT.

These two cases were consolidated
for the reason that they involve the sequestered television and broadcast stations of Roberto S.
Benedicto, well-known friend and classmate of the late President Ferdinand E.
Marcos.

G.R. No.
87710

“Roberto S. Benedicto vs. Board

of Administrators of Television

Stations RPN, BBC and IBC

A petition for
prohibition and mandamus with prayer for preliminary injunction and/or
restraining order, was filed by Benedicto in 1989 to prohibit the respondent
Board of Administrators from exercising management, operation, and control of
three (3) television stations, namely: (1) the Inter-Continental Broadcasting Corporation (IBC-13), (2) Radio
Philippines Network (RPN-9), and (3) Banahaw Broadcasting Corporation (BBC-2),
collectively called “Broadcast City,” and to compel the respondent
Board to turn them over to their respective Boards of Directors, as provided in
an Agreement between the petitioner and the Presidential Commission on Good
Government (PCGG).

After the February
Revolution in 1986, the properties, assets, and business of Broadcast City were
abandoned, leaving no one to look after them. When the PCGG was created in February 1986, its chairman, now Senator
Jovito Salonga, requested the Ministry of National Defense and the Ministry of
Information, in the interest of national security, to sequester Broadcast City
pending clarification of its uncertain financial condition, as well as its legal
and beneficial ownership.

In compliance with the PCGG’s recommendation, the Ministry of
National Defense on March 6, 1986, requested the Minister of Information to
immediately undertake the management and administration of the sequestered
facilities.

On April 8, 1986, President Corazon C. Aquino issued Executive
Order No. 11 creating a Board
of Administrators “to manage and operate the business and affairs of
Broadcast City.” Executive Order No. 11 provided that the Board of
Administrators shall “function in all respects like a board of directors
of a corporation under the Corporation Code,” exercise “all the
powers imposed on trustees under the principles of the general law on trust and
officious managers under the law on extra-contractual obligations” (Sec.
3), and fixed its term of existence to be “coterminous with the
investigation of the seized assets by the Presidential Commission on Good
Government and until final disposition of the seized assets in accordance with
the findings of the Commission.” (Sec. 7.) The members of the board were
to hold office “at the pleasure of the President.”

Pursuant to Section 1 of Executive Order No. 11, the Minister of
Information appointed the members of the Board of Administrators on April
11,1986.

The petitioner filed in the Supreme Court an action against the
PCGG to annul the sequestration, and to recover the management, of Broadcast
City (G.R. No. 74974 entitled, “Roberto S. Benedicto vs. PCGG, et
al.”). This case was transferred
to, and is now pending in the Sandiganbayan.

On December 18, 1986, the petitioner and the PCGG allegedly
entered into an agreement to reorganize and reinstate the Boards of Directors
of RPN, BBC, IBC and other related media corporations. Two-thirds (2/3) of the members of the
reorganized Boards of Directors would be nominees of the PCGG and one-third
(1/3) would be nominees of the petitioner. Said boards of directors would “exercise all powers of
administration and management of the sequestered companies.”

Pursuant to that agreement, a
reorganized Board of Directors was elected for each of the Broadcast
City corporations.

However, the respondent Board of Administrators refused to
relinquish the management, operation, and control of Broadcast City to the
reorganized Boards of Directors. This
petition for prohibition and mandamus was filed against the Board of
Administrators by Benedicto, as controlling stockholder of the “Broadcast
City” corporations.

G.R. No.
96087

Teofisto T. Guingona, Jr. vs.

Presidential Commission on Good

Government

On June 30, 1987, the PCGG filed in the Sandiganbayan Civil Case
No. 0034, entitled “Republic of the Philippines vs. Roberto S. Benedicto. Spouses Ferdinand and Imelda Marcos, et
al.” to recover from the defendants (including Roberto S. Benedicto) their
ill-gotten wealth consisting of funds and other property which they amassed
through breach of trust and abuse of the prerogatives of public office, and in
violation of the Constitution and the laws of the land.

On November 3, 1990, the PCGG, through its chairman, David M.
Castro, executed a Compromise Agreement with Roberto S. Benedicto ceding to the
latter a substantial part of his ill-gotten assets and granting him immunity
from further prosecution. On November
25, 1990, the compromise agreement was submitted by the parties to the
Sandiganbayan for approval.

By this petition for certiorari and prohibition with
prayer for a preliminary injunction and/or restraining order, the
petitioner, Senator Teofisto Guingona, Jr., seeks to invalidate the compromise agreement
on the grounds that:

1.   
The PCGG has no power and authority to cede and release, by
compromise or otherwise, any ill-gotten assets of the past discredited
dictator, his family, relatives and political and business cronies. Its charter tasks it to recover all
ill-gotten wealth.

2.    The
immunity-authority vested in the PCGG under Executive Order No. 14, as amended,
is limited to granting immunity from criminal prosecution under the
conditions set forth thereunder.

3.   
Previous compromise agreements entered into by the PCGG
adhered to the statutory norm of total recovery of ill-gotten wealth,
with zero-retention by the Marcos cronies, and ceded to the latter only
those assets which had been substantiated
and verified as legitimately and lawfully acquired by them.

4.    The
Benedicto Compromise Agreement requires for its validity an amendment by
Congress of the PCGG’s mandate by authorizing it to settle for less than total
recovery of ill-gotten wealth.

5.    Being
a settlement of the Government’s claim exceeding P100,000 against Benedicto,
the Compromise Agreement requires for its validity prior approval of Congress
upon the recommendation of the Commission on Audit and the President, pursuant
to Section 20, Chapter 4, Subtitle B, Title I, Book V of the Revised
Administrative Code of 1987, Executive Order No. 292.

6.    The
Compromise Agreement grants Benedicto immunity from criminal prosecution
without requiring compliance with the conditions enumerated in Executive Order No. 14, as amended, in relation to
Executive Order No. 2.

On November 29, 1990, the Court directed the PCGG to comment on
the petition and issued a Temporary
Restraining Order to cease and desist from implementing and enforcing the
assailed Compromise Agreement.

Commenting on the petition, the PCGG alleged that the rationale
for the Compromise Agreement was the Government’s desire to immediately
accomplish its recovery mission and Mr. Benedicto’s desire to lead a peaceful
and normal life. Toward this end, the
parties decided to withdraw and/or dismiss their mutual claims and
counterclaims in the cases pending in the Philippines. The PCGG’s authority to enter into
compromises involving ill-gotten wealth and to grant immunity in civil and
criminal cases had been challenged before, but it was sustained by this Court
in “Republic of the Philippines and Jose Campos, Jr. vs. Sandiganbayan, et
al.” G.R. No. 84895, May 4, 1989, 173 SCRA 72).

On January 15, 1991, this Court granted the PCGG’s motion to
suspend consideration by the Sandiganbayan of the “Joint Motion to Approve
Compromise Agreement” filed in that court by the PCGG and Benedicto.

The petitioner filed a reply to the comment stating that
the issue in this case is not the basic authority of the Commission to enter
into a compromise settlement of the liabilities and accountabilities of
the Marcoses, but the legality of the Compromise Agreement with Benedicto which
according to the petitioner, was entered into by the Commission without and
beyond its lawful authority and with grave abuse of discretion, for it grants Benedicto
final, total, and irrevocable immunity from criminal prosecution, sans
compliance with the specific conditions imposed therefor by Section 5 of Executive Order No. 14 as amended, in
relation to Executive Order No. 2, to wit:

(a)  
that Benedicto should make a “full
disclosure” of all “ill-gotten assets” or properties, whether
located in the Philippines or abroad, in [his] name as nominee, agent or
trustee . . .

(b)   that
Benedicto should disclose information “establish [ing] the unlawful manner
in which [former President Marcos and his family have] acquired or accumulated
the property or properties in question; and

(c)   that
Benedicto should promise to testify before the Sandiganbayan when so required. (pp. 181-183, Rollo.)

After considering the petition in G.R. No. 87710 “Benedicto
vs. Board of Administrators of Television Stations RPN, BBC and IBC,” and
the comments of the Solicitor General, the Court, following its earlier rulings
in Bataan Shipyard and Engineering Co. (BASECO)
vs. PCGG (150 SCRA 181), and succeeding cases, including the more
recent rulings in Cojuangco, et al. vs. Roxas,
et al. and Cojuangco, et al. vs.
Azcuna, et al. (195 SCRA 797), and PCGG vs. Sandiganbayan
and Olivares (G.R. No. 92376, August 12, 1991), resolved to grant
the petition for prohibition and mandamus.

In Baseco vs. PCGG, 150 SCRA 181, 236, this Court ruled that the
PCGG is a conservator, not an owner. Hence, it behooves the PCGG to exercise “the least possible
interference with business operations or activities” of sequestered,
frozen or provisionally taken over property so that if it is not proven that
the business enterprise was “ill-gotten,” it may be returned to its
rightful owner as far as possible in the same condition as it was at the time
of sequestration.

“The PCGG may thus exercise only powers of
administration over the property or business sequestered or
provisionally taken over, much like a court-appointed receiver, such as to
bring and defend actions in its own name; receive rents; collect debts due; pay
outstanding debts; and generally do such other acts and things as may be
necessary to fulfill its mission as conservator and administrator. x x x In the case of sequestered businesses
generally (i.e., going concerns, businesses in current operation), as in the
case of sequestered objects, its essential role, as already discussed, is that
of conservator, caretaker, ‘watchdog’ or overseer. It is not that of manager, or innovator, much less an owner.

“Now, in the special instance of a business enterprise shown
by evidence to have been ‘taken over by the government of the Marcos
Administration or by entities or persons close to former President Marcos,’ the
PCGG is given power and authority, as already adverted to, to ‘provisionally
take [it] over in the public interest or to
prevent [its] disposal or dissipation;’ and
since the term is obviously employed in reference to going concerns, or
business enterprises in operation, something more than mere physical custody is connotated; the PCGG may in this case
exercise some measure of control in the operation, running, or management of
the business itself. But even in this
special situation, the intrusion into management should
be restricted to the minimum degree necessary
to accomplish the legislative will, which
is to ‘prevent the disposal or dissipation’
of the business enterprise.” (150 SCRA 181,
236?237.)

In the light of this ruling, which we reiterated in the Cojuangco
cases, and in view of the reorganization of the Boards of Directors of the RPN,
IBC and BBC television stations to administer and manage those sequestered
Broadcast City companies, the authority of the Board of Administrators as
“trustee and officious manager” of the same corporations, has become functus
oficio. In negotiorum gestio,
the authority of the officious manager of a property or business is
extinguished when the owner demands the return of the same (Art. 2153, Civil
Code). With the reorganization of the
respective Boards of Directors of the Broadcast City companies, where PCGG
controls 2/3 of the board membership, the Board of Administrators has become a
supernumerary. The reason for its existence
has ceased. This view is bolstered by
the fact that Broadcast City is not a purely commercial venture but a media
enterprise covered by the freedom of the press provision of the Constitution,
and that under our ruling in Liwayway Publishing, Inc., et
al. vs. PCGG, et al. (160 SCRA 716), the
Government, through the PCGG, may not lawfully intervene and participate in the
management and operations of a private mass media to maintain its freedom and
independence as guaranteed by the Constitution (Art. XVI, Sec. 11, 1987
Constitution).

The petition in G.R. No. 96087
has no merit. The right of
parties in a civil action to enter into a compromise for the purpose of
avoiding litigation or putting an end to one already commenced is
indisputable. The settlement of civil
cases in court is authorized and even encouraged by law (Arts. 2028 and 2029,
Civil Code). Although there is no
similar general rule in criminal prosecutions, this Court held in Republic
vs. Sandiganbayan, 173 SCRA 72 (1989) that “in the absence
of an express prohibition, the rule on amicable settlements and/or compromises on civil cases under the Civil
Code is applicable to PCGG cases.”

There is no basis for comparison between the compromise
agreements which the PCGG made with Campos and Floirendo and its agreement with
Benedicto. As pointed out by the PCGG,
the Campos/Floirendo agreements were made in May, 1986 and March, 1987, when no
case had been filed yet against Campos and Floirendo in the Sandiganbayan, but
Floirendo was one of the defendants in the U.S. case in New York against the
Marcoses. Since there was as yet no
case against Campos and Floirendo in the Philippines, no Philippine court had
acquired jurisdiction to review and approve the PCGG’s compromise agreements
with them. The compromise agreement with Benedicto was submitted to the
Sandiganbayan for approval for the simple reason that the PCGG had filed a civil
case against him in the Sandiganbayan.

Prior congressional approval is not required for the PCGG to
enter into a compromise agreement with persons against whom it has filed
actions for recovery of ill-gotten wealth. Section 20, Chapter 4, Subtitle B, Title I, Book V of the Revised
Administrative Code of 1987 (E.O. No. 292) cited by Senator Guingona is
inapplicable as it refers to a settled claim or liability. The provision reads:

“Sec. 20. Power to
Compromise Claims. – (1) When the interest of the Government so requires, the
Commission may compromise or release in whole or in part, any settled
claim or liability to any government agency not exceeding
ten thousand pesos arising out of any matter or case before it or within its
jurisdiction, and with the written approval of the President, it may likewise
compromise or release any similar claim or liability not exceeding one hundred
thousand pesos, in case the claim or liability exceeds one hundred thousand
pesos, the application for relief therefrom shall be submitted, through the
Commission and the President, with their recommendations, to the Congress;

“xxx                          xxx                               xxx.”

(Underscoring supplied.)

The Government’s claim against Benedicto is not yet settled, and the
ownership of the alleged ill-gotten assets is still being litigated in the
Sandiganbayan, hence, the PCGG’s Compromise Agreement with Benedicto need not
be submitted to the Congress for approval.

Settled is the rule that the writ of prohibition will issue only
when it is shown that a tribunal, corporation, board or person whether
exercising functions judicial or ministerial, has acted without or in excess of
its or his jurisdiction, or with grave abuse of discretion, and there is no
appeal nor other plain, speedy, and adequate remedy in the ordinary course of
the law (Sec. 2, Rule 65 of the Rules of Court). Since the PCGG’s compromise agreement with Benedicto has been
submitted to the Sandiganbayan for approval and is still pending determination
therein, this petition to prohibit its implementation and enforcement is
premature.

WHEREFORE, the petition for prohibition and mandamus
in G.R. No. 87710 is granted. The respondent Board of Administrators is
ordered to cease and desist from further exercising management, operation and
control of Broadcast City and is hereby directed to surrender the management,
operation and control of Broadcast City to the reorganized Board of Directors
of each of the Broadcast City television stations.

The petition for prohibition against the PCGG in G.R. No. 96087
is hereby dismissed. The temporary
restraining order which this Court issued on November 29, 1990 in G.R. No.
96087 is hereby set aside. No costs in
both cases.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Padilla, Bidin, Medialdea, Regalado, Davide, Jr., Romero, and Nocon, JJ., concur.

Feliciano, J., on leave.