REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. HON. SANDIGANBAYAN, FERDINAND E. MARCOS, IMELDA R. MARCOS, ROSENDO D. BONDOC, CESAR E.A. VIRATA, RUBEN ANCHETA, JAIME C. LAYA, PLACI…

DISSENTING
OPINION

DAVIDE, JR., J.:

I respectfully submit that the respondent Sandiganbayan committed
grave abuse of discretion in promulgating the challenged resolutions. I am, therefore, unable to concur with the
majority opinion except insofar as it orders the reinstatement of the Expanded
Complaint in Civil Case No. 0020 against the Marcoses.

The principal issue in this case is whether the dismissal by the
Sandiganbayan of Civil Case No. 0020 as against defendant Jose De Venecia, by
virtue of a Deed of Assignment executed between the Presidential Commission on
Good Government (PCGG) and seven corporations belonging to the Landoil Group,
should likewise inure to the benefit of De Venecia’s co-defendants. The Sandiganbayan thought that it should and
dismissed the case against the co-defendants. The petitioner thinks otherwise and submits that the Sandiganbayan acted
with grave abuse of discretion amounting to lack or excess of jurisdiction in
so doing.

The material operative facts and procedural antecedents
generative of this controversy are not disputed.

The Petitioner, represented by the PCGG, filed on 27 July 1987
with the Sandiganbayan a complaint for Reconveyance, Reversion, Accounting,
Restitution and Damages against JOSE DE VENECIA, JR., FERDINAND E. MARCOS,
IMELDA R. MARCOS, ROSENDO D. BONDOC, CESAR E.A. VIRATA, RUBEN ANCHETA, JAIME C.
LAYA, PLACIDO MAPA, JR., ROBERTO ONGPIN and CESAR C. ZALAMEA.^[1]
The complaint was docketed as Civil Case No. 0020. Upon prior leave of the Sandiganbayan, the Petitioner filed on 25
January 1988 an Expanded Complaint,^[2] the
pertinent portions of which read as follows:

“IV

GENERAL AVERMENTS
OF
DEFENDANTS’ ILLEGAL ACTS

8. From the early years of his presidency,
Defendant Ferdinand E. Marcos took undue advantage of his powers as
President. All throughout the period
from September 21, 1972 to February 25, 1986, he gravely abused his powers
under martial law and ruled as Dictator under the 1973 Marcos promulgated
Constitution. Defendant Ferdinand E.
Marcos, together with other Defendants, acting singly or collectively, and/or
in unlawful concert with one another, in flagrant breach of public trust and of
their fiduciary obligations as public officers, with gross and scandalous abuse
of right and power and in brazen violation of the Constitution and laws of the
Philippines, embarked upon a systematic
plan to accumulate ill-gotten wealth. Among others, in furtherance of said plan and acting in unlawful concert
with one another and with gross abuse of power and authority, Defendant
Ferdinand E. Marcos and Imelda R. Marcos:

(a) awarded contracts with the Government to
their relatives, business associates, dummies, nominees, agents or persons who
were beholden to said Defendants, under terms and conditions grossly and
manifestly disadvantageous to the government;

(b) misappropriated, embezzled and/or converted
to their own use funds of Government financial institutions;

(c) engaged in other illegal and improper acts
and practices designed to defraud Plaintiff and the Filipino people, or
otherwise misappropriated and converted to their own use, benefit and
enrichment the lawful patrimony and revenues of Plaintiff and the Filipino
people.

9. Among the assets acquired by Defendants in
the manner above-described and discovered by the Commission in the exercise of
its official responsibilities are funds and other property listed in Annex “A”
hereof and made an integral part of this Complaint.

10. Defendants, acting singly or collectively,
and/or in unlawful concert with one another, for the purpose of preventing
disclosure and avoiding discovery of their unmitigated plunder of the National
Treasury and of their other illegal acts, and employing the services of
prominent lawyers, accountants, financial experts, businessman [sic] and other
persons, deposited, kept and invested funds, securities and other assets in
various banks, financial institutions, trust or investment companies and with
persons here and abroad.

V

SPECIFIC
AVERMENTS

OF
DEFENDANTS’ ILLEGAL ACTS

11. Defendant Jose de Venecia, Jr. taking undue
advantage of his relationship, influence and connection with Defendants Ferdinand E. Marcos and Imelda R. Marcos, acting
by himself and/or in active collaboration with the other Defendants, embarked upon devices, schemes and strategems
to unjustly enrich themselves at the expense of Plaintiff and the Filipino people,
among others:

a) Organized and
headed the Land Oil Group, a big business conglomerate engaged in a wide range
of economic activity, such as petroleum exploration and engineering, port
management and operation, and other services. The Land Oil Group, more particularly, the Land Oil Resources Corporation, its parent
company, and its major subsidiaries, the Philippine-Singapore Ports Corporation, the Greater Manila Land
Corporation, Construction Consortium, Inc. and the
Philippine Hospitals and Health Services, had operations in the Philippines and abroad, particularly, in
the Middle East;

b) To finance his
huge domestic and overseas operations, Defendant Jose de Venecia, acting
through the Land Oil Group, borrowed enormous amounts in foreign currency denominated
loans from several syndicates of international
banks, such as, but not limited to, Arab
Banking Corporation, Ahli Bank of Kuwait,
Credit Swisse First of Boston, Saudi Cairo
Bank, Mellon Bank and the Bank of
Montreal. In view of the
magnitude of the Loans and the project risks involved, the banks required that
their loans be fully covered by the absolute and unconditional guarantee of the
Government of the Republic of the Philippines;

c) Accordingly,
Defendant Jose de Venecia applied for Philippine Government guarantee from the
Philippine Export and Foreign Loan Guarantee Corporation (Philguarantee), a
government-owned and controlled corporation organized to provide Philippine
Government guarantees, and, with the active collaboration of Defendants Rosendo
D. Bondoc, who was then the President of Philguarantee and the members of its
Board of Directors, Defendants Cesar E.A. Virata, Ruben Ancheta, Jaime C. Laya,
Placido Mapa, Jr., Roberto Ongpin and Cesar C. Zalamea was granted full
Philippine Government guarantee coverage;

d) Defendant Jose de Venecia misused the
proceeds of the loans by diverting them to other uses and/or appropriation,
then for his own personal benefit using for this purpose a string of local and
overseas banks, such as, but not limited to,
PNB (New York), PNB (Buendia Branch),
PCTB (Makati Branch), Swiss Banking Corp.
of Hongkong and the Hongkong and Shanghai
Banking Corp. in Hongkong, and in an effort to hide
his complicity in the diversion, refused to submit regular accounting and
reports, all in violation of the provisions of the loan and guarantee
agreements;

e) Notwithstanding
the aforesaid repeated violations, Philguarantee, with the active collaboration
of Defendants Rosendo D. Bondoc, Cesar E.A. Virata, Ruben Ancheta, Jaime C.
Laya, Placido Mapa, Jr., Roberto Ongpin and Cesar C. Zalamea, continued to
provide financial assistance to the companies and controlled by Defendant Jose
de Venecia;

f) As a result of gross mismanagement and wanton
diversion of the loans, the major operations of the Land Oil Group collapsed,
Land Oil defaulted in the payment of its maturing principal and interests
amortization and, like the man holding the proverbial empty bag, Philguarantee
had to advance on its guarantee using for this purpose multi-millions of pesos
in scarce government and taxpayers’
money, resulting in grave and irreparable damage to Plaintiff and to the entire
Filipino people.

12. The acts of Defendants, singly or
collectively, and/or in unlawful concert with one another, constitute gross
abuse of official position and authority, flagrant breach of public trust and
fiduciary obligations, brazen abuse of right and power, unjust enrichment,
violation of the Constitution and laws of the Republic of the Philippines, to
the grave and irreparable damage of Plaintiff and the Filipino people.

VI

CAUSE OF ACTION

13. First Cause
of action: ABUSE OF RIGHT AND POWER — (a) Defendants, in
perpetrating the unlawful acts described above, committed abuse of right and
power which caused untold misery, suffering and damage to Plaintiff. Defendants violated, among others, Articles
19, 20 and 21 of the Civil Code of the Philippines;

(b) As a result of
the foregoing acts, Defendants acquired title to and beneficial interests in
funds and other property and concealed such title, funds and interests through
the use of relatives, business associates, nominees, agents or dummies. Defendants are, therefore, jointly and severally,
liable to Plaintiff to return and reconvey all such funds and other property
unlawfully acquired; or alternatively, to pay Plaintiff, jointly and severally,
by way of indemnity, the damage caused to Plaintiff equivalent to the amount of
such funds and the value of other property not returned or restored to
Plaintiff, plus interest thereon from the date of unlawful acquisition until
full payment.

14. Second Cause of Action: UNJUST ENRICHMENT — Defendants illegally
accumulated funds and other property in violation of the laws of the Philippines
and in breach of their official functions and fiduciary obligations. Defendants, therefore, have unjustly
enriched themselves to the grave and irreparable damage and prejudice of
Plaintiff. Defendants have an
obligation at law, independently of breach of trust and abuse of right and
power and; as an alternative, to jointly and severally return to Plaintiff such
funds and other property with which Defendants, in gross and evident bad faith,
have unjustly enriched themselves or, in default thereof, restore to Plaintiff
the amount of such funds and the value of the other property including those
which may have been wasted, and/or lost, with interest thereon from the date of
unlawful acquisition until full payment.

15. Third Cause
of Action: BREACH OF TRUST
— ­A public office is a public trust. By committing all the acts described above, Defendants repeatedly
breached public trust and the law, making them jointly and severally liable to
Plaintiff. The funds and other property
acquired by Defendants as a result of, their breach of public trust are deemed
to have been acquired for the Benefit of Plaintiff and are, therefore,
impressed with constructive trust in favor of Plaintiff and the Filipino
people. Consequently, Defendants are
solidarily liable to return or reconvey to Plaintiff all such funds and
property thus impressed with constructive trust for the benefit of Plaintiff
and the Filipino people.

16. Fourth Cause
of Action: ACCOUNTING —
The Commission, acting pursuant to the provisions of applicable law,
respectfully maintains that Defendants, acting singly or collectively, and/or
in unlawful concert with one another, acquired funds, assets and property
during the incumbency of Defendant public officers, or while acting in unlawful
concert with public officers, manifestly out of proportion to their salaries,
to their other lawful income and income from legitimately acquired
property. Consequently, they are
required to show to the satisfaction of this Honorable Court that they have
lawfully acquired all such funds, assets and property which are in excess of
their legal net income, and for this Honorable Court to decree that the
Defendants are under obligation to account to Plaintiff with respect to all
legal or beneficial interests in funds, properties and assets of whatever kind
and wherever located in excess of their lawful earnings.

17. Fifth Cause
of Action: LIABILITY FOR
DAMAGES — (a) By reason of the unlawful acts set forth above, Plaintiff and
the Filipino people have suffered actual damages in an amount representing the
pecuniary loss sustained by the latter as a result of Defendants’ unlawful
acts, the approximate value and interest on which, from the time of their
wrongful acquisition, plus expenses which Plaintiff has been compelled to incur
and shall continue to incur in its effort to recover Defendants’ ill-gotten
wealth all over the world. Defendants
are, therefore, jointly and severally liable to Plaintiff for actual damages
and for expenses incurred in the recovery of Defendants’ ill-gotten wealth.

(b)   
As a result of Defendants’ unlawful, malicious, immoral and
wanton acts described above, Plaintiff and the Filipino people had painfully
endured and suffered for more than twenty long years, and still continue to
endure and suffer anguish, fright, sleepless nights, serious anxiety, wounded
feelings and moral shock, as well as besmirched reputation and social
humiliation before the international community, for which Defendants are
jointly and severally liable to Plaintiff and the Filipino people for moral
damages.

(c)   
In addition, Plaintiff and the Filipino people are entitled to
temperate damages for their suffering which, by their very nature, are
incapable of pecuniary estimation, but which this Honorable Court may determine
in the exercise of its sound discretion.

(d)   
Defendants, by reason of the above described unlawful acts,
have violated and invaded the inalienable right of Plaintiff and the Filipino
people to a fair and decent way of life befitting a Nation with rich natural
and human resources. This basic, and
fundamental right of Plaintiff and the Filipino people should be recognized and
vindicated by awarding nominal damages in an amount to be determined by the
Honorable Court in the exercise of its sound discretion.

(e)   
By way of example and correction for the public good and in
order to ensure that Defendants’ unlawful, malicious, immoral and wanton acts
are not repeated, said Defendants are jointly and severally liable to Plaintiff
for exemplary damages.”^[3]

The Annex “A” mentioned in paragraph 9 of the Expanded Complaint
reads as follows:

“ASSETS AND OTHER PROPERTY

OF
JOSE DE VENECIA, JR.

PERSONAL PROPERTY

A. SHARES OF STOCK IN:

1.      
Landoil Resources Corporation

2.      
Pacific Asia Builders Corporation

3.      
Greater Manila Land Corporation

4.      
Construction Consortium, Inc.

5.      
Asian Water and Sewer System, Inc.

6.      
International Medical Group, Inc.

7.      
Philippine Hospitals and Health Services, Inc.

8.      
Global Electrification Systems, Inc.

9.      
Philippine-Singapore Ports Corporation

10.      
Asiaphil Fisheries Corporation

11.      
Transnational Systems, Inc.

12.      
International Agribusiness Corporation

13.      
IOMC Philippines,
Inc.

14.      
International Centers for Technology Transfer, Inc.

15.      
Landoil Trading Corporation

16.      
Multiland Insurance Agency, Inc.

17.      
Freeport Security Agency, Inc.

18.      
International Caterer’s, Inc.

BANK ACCOUNTS:

1.      
Frozen Bank Accounts and other Assets of Placido Mapa, Jr.

2.      
Frozen Bank
Accounts and other Assets of Cesar C. Zalamea

AND ALL OTHER ASSETS
OF ALL DEFENDANTS SEQUESTERED AND/OR FROZEN
BY THE COMMISSION PURSUANT TO EXECUTIVE ORDER NOS. 1 AND 2.”^[4]

The five (5) volumes of the original records of Civil Case No.
0020 readily disclose that the case has undergone unnecessary delays through
the filing of motions for extension of time to file answer or other responsive
pleading, motions for bill of particulars and motions to dismiss, which were
followed by exchanges of related pleadings such as opposition, reply to
opposition and others. These motions
for bill of particulars or motions to dismiss were denied by the
Sandiganbayan. Thereafter, separate
answers were successively filed by defendants (now private respondents) Ongpin,
Laya, Ancheta, Bondoc, Mapa, Jr., Virata and Zalamea. These answers were filed between 21 January 1988 and 10 August
1989.^[5]

Alias summons were served upon Ferdinand E. Marcos and Imelda R.
Marcos on 10 November 1988 at 2338 Makiki Heights, Honolulu, Hawaii.^[6]
In its Resolution of 6 April 1989,^[7] the
Sandiganbayan declared them in default in Civil Case No. 0020 and other cases.

On 30 June 1989, defendant De Venecia filed a motion to dismiss
Civil Case No. 0020 insofar as he is concerned in view of a Deed of Assignment
executed on 19 July 1988 between Landoil Resources Corporation, including its
subsidiaries, and the Petitioner, through the PCGG as represented by its Acting
Chairman, Hon. Adolfo S. Azcuna.^[8] On 16
July 1989, De Venecia filed an amended motion to dismiss^[9] which
the Petitioner opposed on the ground that De Venecia is not a party to the Deed
of Assignment and that the said deed is still subject to the approval of the
PCGG.^[10]

On 8 September 1989, the Sandiganbayan promulgated a Resolution
dated 7 September 1989 granting De Venecia’s amended motion to dismiss and
dismissing Civil Case No. 0020 as against him.^[11] As a
consequence thereof, Ongpin filed on 11 September 1989 a motion for a hearing
on his affirmative defenses.^[12] On
12 September 1989, Zalamea filed a motion to dismiss on the ground that there
is no more legal and factual basis to proceed against him in view of the
dismissal of the case as against De Venecia.^[13] He
argued that the latter is an indispensable party; hence, the dismissal of the
case against De Venecia should result in the dismissal of the case against the
other co-defendants pursuant to Section 7, Rule 3 of the Rules of Court. Separate motions to dismiss on the same
ground as that of Zalamea’s were successively filed by Ongpin, Ancheta, Mapa,
Jr. and Laya.^[14]
Laya filed his motion on 28 September 1989.

In the meantime, the
Petitioner filed on 28 September 1989 a motion to reconsider the Resolution of
7 September 1989.^[15]
However, on 17 October 1989, counsel for De Venecia submitted to the
Sandiganbayan a letter of the PCGG dated 16 October 1989 and addressed to the
Solicitor General requesting the latter to withdraw the motion for
reconsideration.^[16]

The Petitioner filed on 17 October 1989 a Consolidated Opposition^[17]
to the motions to dismiss
wherein it alleged the prematurity of the filing of the motions to dismiss
since it had filed a motion to reconsider the 8 September 1989 Resolution
dismissing the case as against De Venecia.

On 28 September 1989, defendant Ferdinand E. Marcos died and on
10 November 1989, the Petitioner filed a motion for his substitution by his
heirs, viz. Imelda R. Marcos,
Ferdinand Marcos, Jr., Irene Marcos-Araneta and Imee Marcos-Manotoc.^[18]
This was granted by the Sandiganbayan
in its Resolution of 16 November
1989.^[19]

On 4 December 1989, the Sandiganbayan (Second Division)
promulgated a Resolution, dated 29 November 1989, dismissing Civil Case No.
0020 as against De Venecia’s co-defendants, the private respondents in the
instant case.^[20]
Petitioner’s motion of 27 December 1989^[21] and
supplemental motion of 25 January 1990^[22] to
reconsider the said Resolution were denied in the Sandiganbayan’s Resolution of
9 March 1990.^[23]
These Resolutions are now challenged in this petition which was filed on 24
April 1990.^[24]
Petitioner claims that these were issued by the respondent Sandiganbayan with
grave abuse of discretion amounting to lack or excess of jurisdiction. In support thereof, the Petitioner contends
that:

“a) The Deed of Assignment executed on July 19,
1989 [should be 1988] by Landoil in favor of the petitioner should not be made
to benefit De Venecia’s co-defendants;

b)       Defendant
De Venecia is not an indispensable party in the prosecution of the case against
his co-defendants;

c) The liabilities of De Venecia’s co­-defendants
arose not only from their alleged conspiracy with defendant De Venecia but also
by virtue of their individual or collective actions done in unlawful concert
with one another;

d) The causes of action against defendants
Ferdinand E. Marcos and Imelda R. Marcos have nothing to do with the Deed of
Assignment executed by Landoil in favor of the petitioner; and

e) The parties manifestly intended to exclude
defendant De Venecia’s co-defendants from the benefit of the Deed of Assignment
in question.”^[25]

I find merit in this petition.

The Deed of Assignment,^[26] upon
which the dismissal of Civil Case No. 0020 as against De Venecia is based, was
executed between the (1) Landoil Resources Corporation, (2) Philippine
Singapore Ports Corporation, (3) Asian Water and Sewer System, Inc., (4)
Construction Consortium, Inc., (5) Pacific Asia Builders and Developers, Inc.,
(6) Philippine Hospitals and Health Service, Inc. and (7) Greater Manila Land
Corporation, as ASSIGNORS, and represented therein by Ambrosio C. Collado as
President of the Landoil Resources Corporation and attorney-in­-fact for the
others, and the Republic of the Philippines, represented by the PCGG through
its then Acting Chairman, Hon. Adolfo S. Azcuna, as the ASSIGNEE. As described therein, the former “constitute
a group of related companies” sometimes referred to as the “Landoil Group,”
with the Landoil Resources Corporation, “organized by or at the initiative of
Jose de Venecia,” as their “flagship.” These ASSIGNORS are but seven (7) of the
eighteen (18) corporations enumerated in Annex “A” of the Expanded Complaint in
Civil Case No. 0020.^[27] Not
parties to the deed of assignment are International Medical Group, Inc.; Global
Electrification Systems, Inc.; Asiaphil Fisheries Corporation; Transnational
Systems, Inc.; International Agribusiness Corporation; IOMC Philippines, Inc.;
International Centers for Technology Transfer, Inc.; Landoil Trading
Corporation; Multiland Insurance Agency, Inc.; Freeport Security Agency, Inc.;
and International Caterer’s, Incorporated. Pertinent portions of the recital part of the deed of assignment read as
follows:

x x x

“(2) Immediately
after the organization of the Presidential Commission on Good Government (PCGG)
in February 1986, the Landoil Group, acting through Landoil itself, asked the
PCGG to place the Landoil Group under sequestration for the reason that former
President Ferdinand E. Marcos, by himself and/or through his designated
nominees or cronies, owns approximately 45% of the outstanding capital stock of
Landoil, and through Landoil, a proportionate portion of the outstanding
capital stock of each of the other companies of the Landoil Group;

x x x

(7) To negate the
imputation that the Landoil Group are Marcos ‘crony’ companions, and that Jose
de Venecia and other officers of the Landoil Group are Marcos ‘cronies,’ the
Landoil Group submitted proof tending to show that they were in fact the
victims rather than the ‘cronies’ of Marcos who, in 1977, coveted the Landoil
Group and caused the same to be taken over by his (Marcos’) agents and business
associates for his (Marcos’) benefit after the discovery of oil deposits off
Palawan by a consortium of oil exploration companies of which Landoil was a
substantial member, and the acquisition of Landoil, also in 1977, of a prime
port operations contract in Saudi Arabia with a value of US$350 million;

(8) After the
establishment of the present Aquino Government, Philguarantee caused an
investigation to be undertaken as to (a) the background of the issuance of the
alleged ‘behest’ guarantee facility in favor of the Landoil Group, and (b) the
management and operations of the Landoil Group, both in the Philippines and in
the Middle East. As a result of such
investigation Philguarantee has satisfied itself (i) that such guarantee
facility was obtained in the ordinary and regular course of business, and that
no favor was accorded to the Landoil officers, in the grant of such guarantee
facility; and (ii) that the business reversals experienced by the Landoil Group
in connection with its various construction and other projects in the Middle
East and elsewhere were due, firstly, to the inability of the Landoil
Group to collect its contract receivables from such projects due to the reasons
specified in the sixth ‘whereas’ clause, and, secondly, due to the
non-payment of its insurance claim under the insurance policy referred to in
the succeeding (ninth) ‘whereas’ clause.”^[28]

Subject to certain conditions, the ASSIGNORS assumed the
following obligations:

“1.1 Upon the request of the Assignee, the Assignors (being the
above–named companies making up Landoil Group) shall immediately cause to be
transferred to the Assignee (or its nominee/s) all the shares of the capital
stock of Landoil (up to 45% of the total outstanding issued and subscribed
capital stock of Landoil) which have or may hereafter be identified as
belonging to Marcos (whether standing in his name or the name [of] any of his
nominee/s). x x x

1.2 Upon the effectiveness of this Agreement,
the Assignors shall cause to be paid to the Assignee, through PCGG, the amount
of P13 million, which amount represents a portion of Landoil’s recovery from an
arbitration proceeding which Landoil had caused to be instituted in London
against the Lloyd’s Syndicate of Insurance Underwriters;

1.3 Effective immediately, the Assignors
hereby assign, transfer and convey to the PCGG: (a) the entire proceeds of the Assignors’ claims in the New York
case which Landoil has instituted against the insurance brokers, namely, the
firm of Alexander and Alexander, and (b) the entire proceeds of the Assignors’
contract receivables from all the Assignors’ construction and other projects in
the Middle East and elsewhere, net of any amount required for the settlement of
any compulsory statutory liens for unpaid wages or salaries and ordinary
administrative overhead and costs, and attorney’s fees and expenses of
litigation.

x x x

1.5 The Assignors, and or their respective officers, hereby undertake to
fully cooperate with the Philippine Government, acting through the PCGG or any other
governmental agency, in the prosecution of any case which the Philippine
Government may cause to be filed against former President Marcos and his
cronies, either by furnishing testimony in any such case, or by providing
information in any investigation undertaken in contemplation of the filing of
such case, whether in the
Philippines or elsewhere, as may be required or directed by the PCGG, or by
other appropriate governmental agency from time to time.”^[29]

In consideration of the ASSIGNORS’ undertakings, the ASSIGNEE, viz., the Republic of the Philippines, agreed:

“2.1   x x x to cause the sequestration order issued
against Landoil to be lifted upon the effectiveness of this Agreement. In
addition, the Assignee shall cause the dismissal, without prejudice, of Civil
Case No. 0020, entitled ‘Republic of the Philippines vs. Jose de Veñecia, Jr.,
et al.,’ in so far as the Assignors and Jose de Venecia are concerned: provided,
however, that such case shall be deemed automatically reinstated in the
event of non-compliance by any of the Assignors with any of its obligations and
undertakings hereunder.”^[30]

The dismissal by the Sandiganbayan of Civil Case No. 0020 as
against De Venecia’s co-defendants is anchored on the following grounds:

a)    The dismissal of the case as against de
Venecia pursuant to the Resolution of 8 September 1989, “which x x x has now
become final and executory after the plaintiff withdrew its ‘Motion For
Reconsideration,’“ “in effect, removed an indispensable party from this case.”
De Venecia is an indispensable party because his involvement in the
transactions, together with the Landoil Group, which are described in paragraph
11 of the Expanded Complaint, “constitute and/or comprise the very essence of
the only cause of action which is specifically averred in said Complaint, the
other causes of action alleged therein being premised on mere general averments.” With the
removal of De Venecia from the case with the express conformity of the
plaintiff, no judgment can be rendered or liability enforced against the other
defendants who are alleged to have acted in conspiracy with him.^[31]

(2) The motions to
dismiss filed by de Venecia’s co-defendants may be treated as motions for
summary judgment because when an indispensable party “has x x x been dropped from
the complaint by reason of a compromise or amicable settlement which
practically negates the legal or factual basis for the principal cause of
action, then a fortiori, x
x x the cause of action has become not only insufficient but inexistent.” The
“issues having been joined already x x x, there is nothing which could prevent
defendants from submitting the case for summary judgment.^[32]

(3) As to defendants Ferdinand E. Marcos and
Imelda R. Marcos, although they were declared in default, a “perusal of the General
and Specific Averments of the Expanded complaint, in relation to the causes of
action described therein, will indubitably show that above-named defendants’
alleged liabilities are intimately intertwined and closely related to the
transactions subject matter of the compromise agreement between the PCGG and
defendant De Venecia.” Accordingly, the “compromise, x x x inures to, and
benefits, defendants spouses Marcoses and completely removes any legal or
factual bases for their retention as defendants in this case.”^[33]

In its Resolution of 9 March 1990^[34]
denying the Petitioner’s motion to reconsider the said dismissal, the
Sandiganbayan stressed that:

“x x x the one and
only cause of action set out in the Expanded Complaint appears in paragraph 11
thereof, and outlined in detail under sub-paragraphs (a) and (f),
inclusive. The Compromise Agreement, as
we had pointed out, not only removed De Venecia as an indispensable party but
also deprived the Expanded Complaint of any and all factual or legal support
for the sole cause of action set forth therein.”^[35]

I cannot agree.

In the first place, the Sandiganbayan got itself entangled in a
web of incorrect premises which, unfortunately, became the bases for its
conclusions. For one, it is not true
that the Petitioner has only one (1) cause of action as described in paragraph
11 of the Expanded Complaint. As could
be gathered from the introductory portion of said paragraph 11 under subheading
V on Specific Averments of Defendants’ Illegal Acts, the acts or transactions
enumerated in subparagraphs (a) to (f) thereof are merely “among others.” It
reads:

“11. Defendant Jose
de Venecia, Jr., taking undue advantage of his relationship, influence and
connection with Defendants Ferdinand E. Marcos
and Imelda R. Marcos, acting by himself and/or in
active collaboration with the other Defendants,
embarked upon devices, schemes and stratagems to unjustly enrich themselves at
the expense of Plaintiff and the Filipino People, among others:”

x x x

Among simply means “mingled with or
in the same group or class” or “in or through the midst of “^[36]
Moreover, paragraph 8 thereof on General Averments states that:

“x x x Defendant Ferdinand E. Marcos, together with other
Defendants, acting singly or collectively, and/or in unlawful concert with one
another, in flagrant breach of public trust and of their fiduciary obligations
as public officers, with gross and scandalous abuse of right and power and in
brazen violation of the Constitution and laws of the Philippines, embarked upon
a systematic plan to accumulate ill-gotten wealth. Among others, in furtherance of said plan and acting in unlawful
concert with one another and with gross abuse of power and authority, x x x.”

and paragraph 9 states:

“(9)     Among the assets
acquired by Defendants in the manner above-described and discovered by the
Commission in the exercise of its official responsibilities are funds and other
property listed in Annex “A” hereof and made an integral part of this
complaint.”

Finally, paragraphs 13, 14, 15, 16 and 17
enumerate five (5) causes of action.

As earlier noted, of the eighteen (18) corporations enumerated in
Annex “A” of the complaint, only SEVEN (7) are parties to the Deed of
Assignment as ASSIGNORS therein. Also
listed in said Annex “A” are (1) frozen bank accounts and other assets of
defendant Placido E. Mapa, Jr., (2) frozen bank accounts and other assets of
defendant Cesar Zalamea, and (3) all other assets of all defendants
sequestered and/or frozen by the Commission pursuant to Executive Order Nos. 1
and 2. The averments earlier mentioned
and the deed of assignment, juxtaposed with Annex “A,” show prima facie that (a) the
Petitioner did not intend to enter into any amicable settlement with the
remaining eleven (11) corporations or regarding the frozen assets listed in
said Annex “A,” and (b) the assets of the defendants in the said eleven
corporations were not necessarily obtained through or as a consequence of the
acts or transactions described in subparagraphs (a) to (f), paragraph 11 of the
Expanded Complaint, but probably through “the other devices, schemes or
stratagems.” Otherwise, these remaining corporations should have been made
parties to the deed of assignment. Inclusio unius est exclusio alterius.

For another, it is not true that De Venecia is the principal
party either in the specific acts described in subparagraphs (a) to (f),
paragraph 11 of the Expanded Complaint or in the other “devices, schemes or
strategems.” If, at all, there are principal party defendants in Civil Case No.
0020, then a reading of the Expanded Complaint readily reveals that they are
Ferdinand E. Marcos and Imelda R. Marcos. Of course, there are allegations of conspiracy which, for purposes of
the nature of the action pursued, must be understood to be civil conspiracy,^[37]
as distinguished from conspiracy in criminal law.^[38]

Nor is it true that De Venecia is an indispensable party with
respect to the acts or transactions subject of the causes of action. An indispensable party is defined as one
without whom the action cannot be finally determined, whose interest in the
subject matter of the suit and in the relief sought is so intertwined with that
of the other parties that his legal presence as a party to the proceeding is an
absolute necessity.^[39] No
valid judgment can be rendered where an indispensable party is not impleaded or
brought before the court;^[40] his
non-inclusion in a case is a fatal defect and any judgment rendered therein
would be ineffective.^[41]

In the instant case, it is clear that De Venecia is not an
indispensable party because a final determination of the case can be had
without his legal presence. Since the
defendants in Civil Case No. 0020 are sued for (a) collective or
conspirational and (b) individual acts, it follows that the nature of
their corresponding obligations to the Petitioner could be joint and several as
to the first and individual or personal as to the second. And if they are solidarily liable, it cannot
be successfully maintained that De Venecia is an indispensable party. Article 1216 of the Civil Code provides
that:

“The creditor may proceed against any one of the solidary debtors
or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which
may subsequently be directed against the others, so long as the debt had not
been fully collected.”

Hence, a solidary debtor is not an
indispensable party. We held so
categorically in Republic vs.
Sandiganbayan,^[42] a
case which also involves an action for reconveyance, reversion, accounting,
restitution and damages filed with the Sandiganbayan against Alfredo (Bejo)
Romualdez, Ferdinand E. Marcos, Imelda R. Marcos, Jose P. Campos, Jr. and 45
other defendants. In the said case, we
set aside the challenged resolution of the Sandiganbayan denying a motion to
drop defendant Campos, Jr. We stated
that since the Presidential Commission on Good Government had granted immunity
to Jose Y. Campos and his family, such immunity necessarily extended to movant
Jose Campos, Jr., who is the son of Jose Y. Campos. Inter alia, we noted:

“The fact that Campos, Jr. and all the other defendants were
charged solidarily in the complaint does not make him an indispensable
party. We have ruled in the case of Operators Incorporated vs. American Biscuit Co., Inc., [154
SCRA 738 (1987)] that ‘Solidarity does not make a solidary obligor an
indispensable party in a suit filed by the creditor.’ Article 1216 of the Civil
Code says that the creditor ‘may proceed against anyone of the solidary debtors
or some or all of them simultaneously.’“

Even assuming for the sake of argument that De Venecia is indeed
a principal party, still, based on a principle of tort upon which the cause of
action is also predicated, his release did not operate to release the other
tortfeasors. Under American
jurisprudence, three rules have developed which deal with the question of
whether the release of one joint tortfeasor releases other tortfeasors who are
not parties to or named in the release. The first is the ancient common-law rule that a release of one joint
tortfeasor releases all other parties jointly liable, regardless of the intent
of the parties. The second, otherwise
known as the “First Restatement rule,” states that a release of one co-conspirator
normally releases all others unless the plaintiff expressly reserves his rights
against the others. The third provides
that the effect of the release upon co­-conspirators shall be determined in
accordance with the intentions of the parties. In Zenith Radio Corp.
vs. Hazeltine Research,
Inc.,^[43]
the Supreme Court of the United States adopted the third rule thus:

“We recently adopted the final rule giving effect to the intentions
of the parties in Aro Mfg. Co. vs. Convertible Top Co., supra, a patent infringement
case. x x x We concluded that a
release, ‘which clearly intends to save the releasor’s rights against a past
contributory infringer, does not automatically surrender those rights.’

x x x

The straightforward rule is that a party
releases only those other parties whom he intends to release.”

The Court observed that “[t]o adopt the
ancient common-law rule would frustrate … partial settlements, and thereby
promote litigation, while adoption of the First Restatement rule would create a
trap for unwary plaintiffs’ attorneys.”

In the instant case, the release of De Venecia is clearly
intended to apply only to him. There
was, evidently, no intent to spread the benefit to the other tortfeasors.

For still another reason, the “admissions” by the Petitioner in
paragraph 8 of the deed of assignment that the guaranty facility in favor of
the Assignors “was obtained in the ordinary and regular course of business,”
that “no favor was accorded to the Landoil officers in the grant” thereof and
that the business reversals experienced by the Landoil Group in connection with
its various construction and other projects were due to the special reasons
therein enumerated are not equivalent to an admission that De Venecia’s
co-defendants incurred no liability whatsoever with respect thereto. That the facility was obtained in such
manner with no favor to the Landoil officers do not, by themselves, clear the
Board of Directors or the officers of the Philguarantee from any liability which
could have arisen from the grant of the guaranty facility. Private respondents were not sued as
directors or officers of a private corporation, but as government officials who
under the Constitution were obliged to serve with the highest degree of responsibility,
integrity, loyalty, and efficiency and to remain accountable to the people.^[44]
Indeed, if it were the intention of the parties in the deed of assignment to
accord to the private respondents the same benefit as that granted to De
Venecia, they could have easily done so without loss of time or effort. Better yet, the parties could have
explicitly stipulated that, in consideration of the assignment made by the
Assignors, the Petitioner shall (a) lift the sequestration issued against
Landoil and (b) dismiss Civil Case No. 0020. It is evident from the deed of assignment that the only non-signatory
thereto who is to be benefited thereby is defendant De Venecia. That favor granted him is known as a
stipulation pour autrui under
Article 1311 of the Civil Code as the Sandiganbayan correctly stated in its
Resolution of 8 September 1989 granting De Venecia’s amended motion to dismiss.^[45]
Under the said article, for such a stipulation to be effective and binding it
is necessary that the contracting parties “must have clearly and deliberately
conferred a favor upon a third person.”^[46] A
“mere incidental benefit or interest of a person is not sufficient.” The deed
of assignment in question fails to even remotely suggest such a grant in favor
of the private respondents, and for the Sandiganbayan to read into the document
that which the parties themselves have not even thought of would be to
stipulate for the parties, which is beyond its power to do so.

Moreover, these “admissions” are contained in the “whereas”
clauses or in the recital part of the Deed of Assignment and are inconsistent
with the following provisions in the operative part thereof, to wit: (1) the ASSIGNORS shall transfer to the
ASSIGNEE all the capital shares of Landoil (up to 45% of the capital stock)
identified as belonging to Marcos; (2) the ASSIGNORS shall fully cooperate with
the PCGG or any government agency in the prosecution of any case to be filed
against Marcos and his cronies; and (3) the dismissal of Civil Case No. 0020
against the ASSIGNORS and De Venecia shall be without prejudice, and the case
shall be deemed automatically reinstated in the event of the ASSIGNORS’
non-compliance with any of their obligations. These obligations are, in fact, consistent with the 14th to 16th causes
of action enumerated in the Expanded Complaint.

These “admissions” are merely embodied in the recital part of the
deed. It is a settled rule in the
construction of contracts that in case of a conflict between the operative part
of a contract and the recitals thereof, the former will prevail.^[47] The recitals are but merely introductory and
prefatory statements of a deed and are not an essential part of the operating
portions of the contract. They may be
used as a guide in interpreting ambiguous portions of the operative part, but
cannot supersede the latter.

Finally, the Sandiganbayan’s grave abuse of discretion became
more pronounced insofar as the challenged resolutions benefit defendant
Ferdinand E. Marcos and Imelda R. Marcos. They are the principal dramatis
personae in Civil Case No. 0020, and the allegations in the Expanded
Complaint do not limit the causes of action against them to transactions
involving Philguarantee which, if proven, do not at all, by any standard, make
them the least culpable. As a matter of
fact, the ASSIGNORS in the deed of assignment admit that approximately 45% of
the outstanding capital stock of the flagship corporation, Landoil Resources
Corporation, and through the latter, “a proportionate portion of the
outstanding capital stock of the six other corporations” are owned by defendant
Ferdinand E. Marcos. Since the
remaining eleven (11) corporations listed in Annex “A” of the Expanded
Complaint are not parties to the deed of assignment, the allegations with
respect thereto as against the Marcoses stand. It must, however, be stressed that, because of his death, Ferdinand E.
Marcos had been substituted in Civil Case No. 0020 by his heirs pursuant to the
Sandiganbayan’s Resolution of 16 November 1989. Accordingly, he ceased to be a party and the challenged
resolutions are, insofar as he is concerned, ineffective. Be that as it may, the error committed by
the Sandiganbayan in granting him such unusual benefit compounded the
arbitrariness of the resolutions. Finally, as an additional indicium
of such arbitrariness, although under the deed of assignment the
dismissal of the case against the Assignors and De Venecia was to be “without
prejudice,” the challenged dismissal against the latter’s co-defendants was
without qualification.

WHEREFORE, I vote
to grant the petition and to set aside the challenged resolutions, with costs
against the private respondents.

---

^[1]
Original Records (OR), Civil Case No. 0020, vol. 1, 1-24.

^[2]
Id., vol. 2, 583-D to 583-Y; Annex “E” of Petition; Rollo, 52-84.

^[3]
Rollo, 59-79,

^[4]
Rollo, 84.

^[5]
OR, Civil Case No. 0020, vol. 2,
566-576; 592-607; 769-777; 883-893; and vol. 3, 1072-1085; 1086-1105; and
1286-1293, respectively.

^[6]
Id., vol. 3, 1065-1071.

^[7]
Id., 1174-1181.

^[8]
OR, Civil Case No. 0020, vol. 3, 1215-1232. Copy of the Deed of Assignment is attached to the motion as Annex “A.”

^[9]
Id., 1233-1250.

^[10]
Id., 1263-1265.

^[11]
Id., 1333-1336.

^[12]
Id., 1343-1348.

^[13]
Id., 1352-1354.

^[14]
OR, Civil Case No. 0020, vol. 3,
1370-1376; 1382-1385; 1387-1393; and 1415-1417, respectively.

^[15]
Id., 1405-1409.

^[16]
Id., 1469.

^[17]
Id., 1472-1475.

^[18]
Id., 1493-1495.

^[19]
Id., 1497-1500.

^[20]
OR, Civil Case No. 0020, vol. 4, 1504-1519; Annex “A” of Petition; Rollo,
31-42. Per Associate Justice Romeo M.
Escareal, concurred in by Associate Justices Jose Balajadia, who wrote a
separate concurring opinion, and Cipriano A. del Rosario.

^[21]
Id., 1524-1529.

^[22]
Id., 1566-1571.

^[23]
Id., 1636-1639.

^[24]
Rollo, op. cit., 8-28.

^[25]
Rollo, 17-18.

^[26]
Annex “F” of Petition; Id., 85-97.

^[27]
Id., 84.

^[28]
Rollo, 85-89.

^[29]
Rollo, 90-94.

^[30]
Id., 94.

^[31]
Id., 37-39.

^[32]
Rollo, 40.

^[33]
Id., 41.

^[34]
Id., 43-46.

^[35]
Id., 45.

^[36]
Black’s Law Dictionary, 83 (6th ed. 1990).

^[37]
Civil conspiracy that gives rise
to a cause of action is the combination of
two or more persons for purposes of accomplishing by concerted action
either lawful purpose by unlawful means or unlawful purpose by lawful
means. (Black’s Law Dictionary, 223,
5th ed).

^[38]
Article 8, Revised Penal Code.

^[39]
Borlasa vs. Polistico, 47 Phil. 345 [1925]; Co vs.
Intermediate Appellate Court, 162 SCRA 390 [1988]; Lozano vs.
Ballesteros, 195 SCRA 681 [1991].

^[40]
Leyte-Samar Sales Co. vs. Cea, 93 Phil. 100 [1953].

^[41]
Dacudao vs. Dueñas, 108 Phil. 94 [1960]; see also, Espiritu vs.
Court of Appeals, 58 SCRA 195 [1974].

^[42]
173 SCRA 72 [1989].

^[43]
401 U.S. 321, 28 L Ed 2d 77, 91 S Ct 795 [1971].

^[44]
Section 1, Article XIII, 1973 Constitution. Now Section 1, Article XI, 1987
Constitution.

^[45]
Rollo, 104.

^[46]
See Marmont Resort Hotels Enterprises vs. Guiang, 168 SCRA 373, 382 [1988],
citing Florentino vs. Encarnacion, 79 SCRA 193 [1977].

^[47]
Jamison vs. Franklin Life Insurance Co., 136 P. 2d 265 (Ariz. Sup. Ct.
1943). The same rule applies to a
statute. Whereas clauses do not
form a part thereof, strictly speaking; they are not part of the operative
language of the statute; they are, nonetheless, helpful to the extent that they
articulate the general purpose or reason underlying a new enactment. (Llamado vs. Court of Appeals, 174
SCRA 566 [1989]).