Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=45867:147227&amp;catid=1459&amp;Itemid=566
Timestamp: 2019-04-19 08:16:08+00:00

Document:
MARIA REMEDIOS ARGANA, DONATA ALMENDRALA VDA. DE ARGANA, LUIS ARGANA, JR., PEREGRINO ARGANA, ESTATE OF GELACIO ARGANA, EUFROCINIO NOFUENTE, AMPARO ARGANA NOFUENTE, JUANITO ROGELIO, MILAGROS ARGANA ROGELIO, MARIA FELICIDAD ARGANA, MARIA DOROTEA ARGANA, REFEDOR SOUTH GOLD PROPERTY MANAGEMENT & DEVELOPMENT CORPORATION, Petitioners, v. REPUBLIC OF THE PHILIPPINES, Respondent.
On July 29, 1987, respondent Republic of the Philippines filed with the Sandiganbayan a Petition for Forfeiture of alleged ill-gotten assets and properties of the late Maximino A. Argana, who served as Mayor of the Municipality of Muntinlupa2 from 1964 to 1967 and from 1972 until his death in 1985.
Petitioners, in their Answer, denied that the properties sought to be forfeited by respondent were unlawfully acquired by the deceased Mayor and/or by petitioners. Still, to avoid a protracted litigation, petitioners exerted efforts to settle the case amicably with respondent through the PCGG.
After a series of motions were again filed by petitioners, the Sandiganbayan finally set the case for pre-trial on November 26, 1997, but the pre-trial was reset several times in view of the manifestation of the parties that they were in the process of negotiating a compromise.
Thereafter, the PCGG conducted an evaluation of the properties offered for settlement by petitioners. In a Memorandum dated August 18, 1997, Mauro J. Estrada, Director of the PCGG Research and Development Program, recommended the inclusion of another tract of land5 belonging to petitioners among the properties which would be subject of the compromise.
In a letter dated October 7, 1997,7 the PCGG informed the Office of the Solicitor General (OSG) of the signing of the Compromise Agreement and requested the OSG to file the appropriate motion for approval thereof with the Sandiganbayan.
On June 4, 1998,11 the OSG filed with the Sandiganbayan a Motion to Approve Compromise Agreement. Petitioners expressed their conformity to the motion on June 15, 1998.
However, on October 5, 1998, respondent, through the OSG and the PCGG, filed with the Sandiganbayan a Motion to Rescind Compromise Agreement and to Set Aside Judgment by Compromise (Motion to Rescind). Respondent prayed for the rescission of the Compromise Agreement or reformation thereof after a renegotiation with petitioners. Respondent contended that the partition of the properties in the Compromise Agreement was grossly disadvantageous to the government and that there was fraud and insidious misrepresentation by petitioners in the distribution and partition of properties, to the damage and prejudice of the government. According to respondent, there was fraud and insidious misrepresentation because petitioners proposed to divide the properties'with 75% accruing to the government and the remaining 25% going to petitioners and their other creditors'based on the total land area of the properties instead of on their value. As a result, the government obtained only Three Million Six Hundred Twenty Thousand Pesos (P3,620,000.00) worth of land, while petitioners received almost Four Billion Pesos (P4,000,000,000.00) worth.
In its Resolution dated September 22, 1999, the Sandiganbayan treated the Motion to Rescind as a petition for relief from judgment under Rule 38 of the 1997 Rules on Civil Procedure and set the motion for hearing.
'The values were deliberately omitted to make it appear that the Compromise Agreement adheres to the 75%-25% ratio broadly adopted by the PCGG in compromising cases of ill-gotten wealth. It was this 75%-25% mode of compromise, with the greater share of 75% going to the government that misled the Court to believe, as We did believe, that the Compromise Agreement was fair, reasonable and advantageous to the Government'.
'What was projected to be a 75%-25% ratio was in reality a 00.15%-99.85% ratio, with 99.85% going to the Arganas. This is unconscionable and immoral. And since it results in a transaction grossly disadvantageous and immoral to the government, it is against the law as being violative of Section 3(g) of Republic Act 3019.
Petitioners filed a Motion for Reconsideration dated May 9, 2000 and a Supplement to said motion dated May 30, 2000. Petitioners also filed an Urgent Motion for Voluntary Inhibition dated May 18, 2000 praying that the members of the Third Division of the Sandiganbayan voluntarily inhibit themselves from hearing and resolving the petitioners' pending motions.
Hence, petitioners filed the present petition on April 27, 2001.
Respondent filed its Comment on October 22, 2001.
Respondent filed its Memorandum on January 29, 2002. Petitioners filed theirs on February 26, 2002. In their respective memoranda, the parties reiterated the arguments in their earlier pleadings.
(A) The Sandiganbayan (Third Division) denied Petitioners their right to substantive and procedural due process when it refused to voluntarily inhibit itself from further hearing the instant case.
(B) The PCGG lawyers had no authority to ask for the rescission of the subject Compromise Agreement without the consent of the PCGG En Banc and the President of the Republic of the Philippines.
1. It was not filed by a party to the case, i.e., it was filed by counsel without the client's authority.
2. It was filed out of time.
3. It was filed sans any supporting Affidavit of Merit.
4. It lacked the required Certification on Non-Forum Shopping.
(D) There is no factual or legal basis for the finding of fraud by the Sandiganbayan (Third Division).
(E) Upon approval of the Compromise Agreement, the Sandiganbayan (Third Division) lost jurisdiction over the case, including the authority to rescind said Compromise Agreement and to set aside the judgment based thereon.
(F) The Sandiganbayan (Third Division) lacked authority to alter a contract by construction or to make a new contract for the parties.
On October 7, 1997, the PCGG forwarded to the OSG a copy of the Compromise Agreement between the Republic and the Arganas in SB Civil Case No. 0026, with a request that the OSG file a motion with the Sandiganbayan for the approval of the said Compromise Agreement. On November 7, 1997, in reply to the letter of PCGG, the OSG with then Solicitor General Silvestre H. Bello III as signatory, wrote the PCGG requesting it to submit to the OSG clarification on the provision in the compromise agreement that the properties mentioned therein comprise all the sequestered assets subject of the litigation considering that in the petition filed by the Republic, it is alleged that the late mayor Argana acquired no less than 251 OCTs/TCTs in Muntinlupa and the neighboring towns plus some other ill-gotten properties. The OSG likewise opined that the Compromise Agreement must first be submitted to the President for his approval before submitting it to the Sandiganbayan.
On February 10, 1998, the OSG received a reply from the PCGG, through Commissioner Herminio Mendoza, reiterating that the PCGG has decided to enter into the compromise agreement because it believes that the evidence may not be sufficient to warrant continuing prosecution of Civil Case No. 0026 against the Arganas.
With respect to OSG's request for clarification, the PCGG furnished the OSG a copy of the report conducted by the PCGG Research and Development Department whereby it is stated that there are 324 OCTs/TCTs evaluated representing real properties of the late Mayor Argana with a total land area of 481.77422 hectares out of which the Republic will get 361.9203 hectares or 75.12% of the total land area under the Compromise Agreement. No mention, however, was made as to the value of the properties to be ceded to the Republic and the properties to be retained by the Arganas.
On March 2, 1998, the OSG, through then Solicitor General Romeo C. dela Cruz, again wrote the PCGG reiterating its previous position that before submitting the compromise agreement to the Sandiganbayan for approval, it must first be submitted to the President of the Philippines for his approval as required in par. 6 of the Compromise Agreement. The OSG also reiterated its request for clarification regarding the properties covered by the compromise agreement as the Report submitted to it made mention of 361.9203 hectares or 75.12% out of the total land area of 481.71422 hectares to be ceded to the Republic, and 24.88% to be retained by the Arganas, no mention whatsoever was made of the kind of land, location and value of the respective areas.
On June 2, 1998, the OSG received a letter dated May 29,1998 from then Commissioner Herminio A. Mendoza forwarding it copy of the approval by then President Fidel Ramos of the Compromise Agreement. With respect to its query, it was stated therein that the PCGG is unable to determine the value of the land to be ceded to the Republic and those to be retained by the Arganas because of the big number of the parcels of the land located mainly in Muntinlupa, Metro Manila and Laguna and/or the lack of available records showing their respective values for tax purposes. The PCGG reiterated their request that the OSG file with the Sandiganbayan in SB Civil Case No. 0026 a motion for the approval of the compromise agreement.
5) Whether the members of the Sandiganbayan's Third Division should have inhibited themselves from resolving petitioners' Motion for Reconsideration.
The Court shall first tackle the first, second, third and fifth issues since these involve procedural matters.
The Court does not agree with respondent's contention that a petition for certiorari is not the proper remedy to assail the February 22, 2001 Order of the Sandiganbayan which affirmed its earlier directive to set the case against petitioners for pre-trial following the annulment of its judgment by compromise agreement. A special civil action for certiorari may be instituted when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law.44 The Court has previously held that an order setting the case for further proceedings, issued after the original judgment rendered pursuant to a compromise agreement is set aside, is an interlocutory order and is therefore not appealable.45 Since no appeal is available against such an order, the proper remedy to assail it is a special civil action for certiorari . The remedy taken by petitioners is therefore proper.
Petitioners' contention that the Motion to Rescind filed by the lawyers of the PCGG and of the OSG should have been treated by the Sandiganbayan as a mere scrap of paper because the motion was filed without the authority of the PCGG En Banc and of the President of the Republic has no legal basis. There is no requirement under the law that pleadings and motions filed by lawyers of the government or the PCGG must first be approved by the PCGG En Banc and by the President of the Philippines. More importantly, R.A. No. 1379 expressly authorizes the OSG to prosecute cases of forfeiture of property unlawfully acquired by any public officer or employee.46 It must be remembered that it was the OSG which filed Civil Case No. 0026 for the forfeiture of petitioners' allegedly ill-gotten wealth, and that the Compromise Agreement between petitioners and respondent was an amicable settlement of that case. By filing an action for rescission of the Compromise Agreement based on extrinsic fraud, the OSG was merely performing its legal duty to recover the wealth purportedly amassed unlawfully by the late Mayor Argana during his terms as Mayor of Muntinlupa. The Motion to Rescind was filed precisely because the PCGG, as respondent's authorized representative in the compromise, discovered that the execution of the Compromise Agreement was attended by fraud and sought the help of the OSG which in turn is the duly authorized government agency to represent respondent in forfeiture cases under R.A. No. 1379. Hence, the Sandiganbayan correctly upheld the authority of the OSG, assisted by the PCGG, in filing the Motion to Rescind.
Time for filing petition; contents and verification.' A petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, final order or other proceeding to be set aside, and not more than six (6) months after such judgment or final order was entered, or such proceeding was taken, and must be accompanied with affidavits showing the fraud, accident, mistake or excusable negligence relied upon, and the facts constituting the petitioner's good and substantial cause of action or defense, as the case may be.
Applying the foregoing rule to the present case, the sixty (60)-day period should be counted from July 31, 1998, the date of the Sandiganbayan Decision granting the Motion to Approve Compromise Agreement. The sixtieth day from July 31, 1998 is September 29, 1998. The Motion to Rescind was filed by the OSG only on October 5, 1998, clearly several days after the sixtieth day from the rendition of the July 31, 1998 Decision.
This notwithstanding, the Court finds that no grave abuse can be ascribed to the Sandiganbayan in admitting the Motion to Rescind as a petition for relief was timely filed.
The Court notes that the filing of the Motion to Rescind on October 5, 1998 was indeed seven days beyond the sixty 60-day period but still well within the six (6)-month period from entry of judgment. Moreover, the case involves an alleged fraud committed against the Republic, and thus justifies the liberal interpretation of procedural laws by the Sandiganbayan.
Neither was it necessary for respondent to attach a Certification against Forum-Shopping to the Motion to Rescind. As correctly held by the Sandiganbayan, the Motion to Rescind, which in effect was a petition for relief, is not an initiatory pleading which requires the inclusion of a Certification against Forum-Shopping. Section 2, Rule 38 requires that a petition for relief must be filed with the court which rendered the judgment or order sought to be set aside, and in the same case wherein the judgment or order was rendered. If the court finds that the allegations in the petition for relief are true, it shall set aside the judgment and try the principal case upon the merits as if a timely motion for new trial had been granted.53 Clearly, then, a petition for relief is not an initiatory pleading in a new case which would require the filing by the petitioner therein of a Certification of Non - Forum Shopping.
The Court also finds no abuse of discretion by the Sandiganbayan in denying petitioners' Urgent Motion for Voluntary Inhibition. As explained in Gutang v. Court of Appeals,54 the import of the rule on voluntary inhibition is that the decision of a judge on whether or not to inhibit is left to his or her sound discretion and conscience, based on his or her rational and logical assessment of the case where the motion for inhibition is filed. It implies that in addition to pecuniary interest, relationship, or previous participation in the matter under litigation which are grounds for mandatory inhibition under the first paragraph of Section 1, Rule 137 of the Revised Rules of Court there might be other causes that could diminish the objectivity of the judge, thus warranting his or her inhibition. Petitioners' claim of bias and partiality on the part of the Sandiganbayan justices who issued the April 11, 2000 Resolution, evaluated in light of the resolution itself, is evidently more imagined than real. To say, as is petitioners' wont, that a judge who throws out a party's motion in the language employed by the Sandiganbayan in the questioned Resolution is necessarily prejudiced, is to be indiscriminate and precipitate.
Petitioners' assertion that the April 11, 2000 Resolution was harshly worded and evinced prejudgment of the case in respondent's favor is easily disproved by a reading of the Resolution in its entirety. As will be discussed hereafter, the Sandiganbayan's pronouncement that the Compromise Agreement was grossly disadvantageous and prejudicial to the government is supported by the facts on record. In charging the Sandiganbayan with forejudgment when it said that "all it takes to prove the case is evidence that the properties are manifestly out of proportion to the late Mayor Maximino A. Argana's salary and to his other lawful income and other legitimately acquired income,"55 petitioners have taken the statement out of context. The Sandiganbayan made the statement in relation to its bewilderment as to why the PCGG expressed difficulty in prosecuting the case against the late Mayor Argana in spite of the presumption regarding unexplained wealth in Section 8 of R.A. No. 3019 (the Anti-Graft and Corrupt Practices Act). The Sandiganbayan therefore had legal and factual grounds to deny petitioners' motion for inhibition.
"Another big tract of land located at Matikiw, Pangil, Laguna, consisting of 131,2950 hectares covered by TCT No. T-4009, per Annex "K" may be considered for inclusion in the proposed compromise settlement. The reason for this is that this land is being eyed by the DAR for distribution under the CARP. As a whole, the government may be able to acquire about 361.9203 hectares of land equivalent to 75.12% of the 481.7742 hectares of land of sequestered real estate property belonging to the Arganas and other owners.
"However, of the 481.7742 hectares covered by a sequestration order, the late Mayor Argana owns about 409.50817 hectares and possibly the heirs are willing to cede 361.9203 hectares which is equivalent to 88.38%, retaining 47.5887 hectares or 11.62% of what they owned.
"2) Out of the total area of 481.77422 hectares covered by a sequestration order, about 409.50817 hectares are owned by the late Mayor Argana. The other lots are owned by his brothers and sisters (26.6318 hectares), foreclosed by Los BaÃ±os Rural Bank (5.9856 hectares), and registered and/or acquired by other persons (39.64865 hectares). In the event that the other big area consisting of 131.2950 hectares of land is included in the compromise settlement in favor of the government, a total of 361-50817 (sic) hectares of land would comprise about 88.38 % of the 409.50817 hectares registered in the name of the late Mayor Argana.
3) However, as a whole the 361.9203 hectares to be ceded to the government is equivalent to 75.12% of the 481.77422 hectares sequestered by PCGG as presented above. Since the late mayor owns 409.50817 hectares to the government, the percentage share of the government would be 88.38 % and the remaining 11.62 % may be retained by the heirs of the late Mayor Argana, equivalent to 47.58787 hectares.
"The family of the late Mayor Maximino A. Argana offered to cede to the government a total of 230.62553 hectares of land covered by nine (9) TCTs. Another property, however, consisting of 131.2950 hectares may be considered for inclusion which would increase to 361.9203 hectares of land that may be ceded to the government.
"However, since the late Mayor Argana owns 409.50817 hectares sequestered and may possibly cede 361.9203 hectares, the percentage share of the government would be 88.38% of the 409.50817 hectares actually registered in his name and his children.
"The PCGG wanted to recover as much as it could and as fast as possible, while the Arganas wanted to buy peace without admitting guilt. In order to avoid further lengthy litigation and to put an end to an almost ten-year unresolved sequestration issue, and to expedite recovery so that the remaining assets may be used to contribute to the national recovery, the 230.6253 hectares of land covered by nine (9) TCTs (Nos. T-3813, T-3814, T-3815, T-3816, T-3817, T-4104, T-4106, T-4108 and T-4044) offered by the Arganas be favorably considered, on condition that another real estate property covered by TCT No. T-4009, located at Matikiw, Pangil, Laguna, consisting of 131.2950 hectares, be included and to be ceded to the government. All other lots sequestered should be freed from the sequestration order.
"As a whole, the government stands to acquire about 361.9203 hectares out of the 409.50817 hectares registered in the name of Sps. Maximino A. Argana, REFEDOR, and their children, equivalent to 88.38%. The remaining 11.62% or 47.58787 hectares will be retained by the latter.
"For the consideration of the Commission.
The value of the properties must have been raised or even discussed during the several years that the properties were held under sequestration. Yet, not even the PCGG bothered to produce any tax declaration, assessment or appraisal to show the assessed or fair market value of the properties. . . . .
Again in another Memorandum of Director Mauro J. Estrada to PCGG Counsel Edgardo L. Kilayko, dated February 2, 1988, the properties were listed according to the name of the owner, certificate of title, area in square meters, location and percentages in relation to the whole. Obvious from the listing is the absence of a column to indicate the value of the properties or their classification. . . .
. . . The values were deliberately omitted to make it appear that the Compromise Agreement adheres to the 75%-25% ratio broadly adopted by the PCGG in compromising cases of ill-gotten wealth. It was this 75%-25% mode of compromise, with the greater share of 75% going to the government that misled the Court to believe, as We did believe, that the Compromise Agreement was fair, reasonable and advantageous to the Government. . . .
. . . What was projected to be a 75%-25% ratio was in reality a 00.15%-99.85% ratio, with 99.85% going to the Arganas. This is unconscionable and immoral. And since it results in a transaction grossly disadvantageous and immoral to the government, it is against the law as being violative of Section 3(g) of Republic Act 3019.
It is evident from the foregoing that the ruling of the Sandiganbayan is grounded on facts and on the law. The Court sees no reason to depart from the conclusions drawn by the Sandiganbayan on the basis of its findings, especially considering that the three justices comprising the Sandiganbayan's Third Division conducted a thorough examination of the documents submitted by the parties to this case, heard the testimonies of the parties' witnesses and observed their deportment during the hearing on the Motion to Rescind.
Moreover, it is an established rule that the State cannot be estopped by the mistakes of its agents.57 Respondent cannot be bound by a manifestly unjust compromise agreement reviewed on its behalf and entered into by its representatives from the PCGG who apparently were not looking after respondent's best interests.
WHEREFORE, the petition is DISMISSED for lack of merit. The Resolution dated April 11, 2000 of the Sandiganbayan granting the Motion to Rescind Compromise Agreement and to Set Aside Judgment by Compromise and setting the case for pre-trial, as well as the Order dated February 22, 2001 denying petitioners' motion for reconsideration, are hereby AFFIRMED.
1 Republic of the Philippines v. Maria Remedios Argana, As Administratrix of the Intestate Estate of the Deceased Maximino A. Argana and in her own behalf, Donata Almendrala Vda. De Argana, Luis Argana, Jr., Peregrino Argana, Estate Of Gelacio Argana, Eufrocinio Nofuente, Amparo Argana Nofuente, Juanito Rogelio, Milagros Argana Rogelio, Maria Felicidad Argana, Maria Dorotea Argana, Refedor South Gold Property Management & Development Corporation.
3 See Republic of the Philippines v. Sandiganbayan, G.R. No. 115906, September 29, 1994, 237 SCRA 242. The Court held therein that the PCGG has the power to conduct preliminary investigation of cases for forfeiture of allegedly ill-gotten wealth although not committed by the respondent or defendant in close association with former President Ferdinand E. Marcos.
NOW, THEREFORE, be it resolved as it is hereby RESOLVED, that the offer of compromise settlement agreement by the Arganas is hereby approved. PROVIDED, FURTHER, that the compromise settlement agreement shall be approved by the President of the Republic of the Philippines and the Sandiganbayan. Commissioners REYNALDO S. GUIAO and HERMINIO A. MENDOZA are hereby authorized to sign the Compromise Agreement for and in behalf of the Commission (Rollo, p. 65).
5 The tract of land referred to is a 131.2950-hectare property located at Matikiw, Pangil, Laguna, covered by TCT No. T-4009.
6 See April 11, 2001 Resolution of the Sandiganbayan in Civil Case No. 0026; Rollo, p. 174.
8 The letter was sent by PCGG Commissioner Mendoza to Acting Solicitor General Romeo C. Dela Cruz; Id. at 80.
13 Answer; Id. at 112.
14 An Act Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor; June 18, 1995.
16 April 11, 2000 Resolution; Id. at 176-180.
20 Memorandum for Petitioners, Id. at 332.
26 No. L-40683, June 27, 1975, 64 SCRA 524.
30 Resolution dated April 11, 2000; Id. at 180-181.
33 Memorandum for Respondent; Id. at 286.
39 Id. at 298, 309-310.
44 Section 1, Rule 65, 1997 Rules on Civil Procedure.
45 Arrieta v. Malayan Sawmill Company, 133 Phil. 481 (1968).
46 See Sections 2 and 9, R.A. No. 1379.
47 Manipor v. Ricafort, G.R. No. 150159, July 25, 2003, 407 SCRA 298; and Bodiogan v. Hon. Ceniza, et al., 102 Phil. 750 (1957).
48 Gold Line Transit, Inc. v. Ramos, 415 Phil. 492 (2001).
49 See Mago v. Court of Appeals, 363 Phil. 225 (1999); Balite v. Cabangon, 126 Phil. 450 (1967); People's Homesite & Housing Corp. (PHHC) v. Tiongco, et al., 120 Phil. 994 (1964). See also Prudential Bank v. Macadaeg, 105 Phil. 791 (1959).
50 In Mago (supra note 49), the petition for relief was filed nine (9) days from the lapse of the sixty (60)-day period. In PHHC (supra note 49), although the petition for relief was also filed beyond the sixty (60)-day period, the Court directed the trial court to admit the motion in view of the "fishy and suspicious" conduct of defendants' counsel which resulted in depriving them of their day in court.
52 Id., citing Fabar v. Rodelas, No. L-46394, October 26, 1977, 79 SCRA 638, and Consul v. Consul, No, L. 22713, July 26, 1966, 79 SCRA 667.
53 Braca v. Tan, 84 Phil. 582 (1949).
54 354 Phil. 77 (1998).
57 Republic v. Imperial, 362 Phil. 466 (1999); Concurring Opinion of J. Puno in Republic v. Court of Appeals, 359 Phil. 530 (1998); Lim v. Pacquing, 310 Phil. 722 (1995); GSIS v. Court of Appeals, G.R. No. 103590, January 29, 1993, 218 SCRA 233; Republic v. Intermediate Appellate Court, G.R. No. 69138, May 19, 1992, 209 SCRA 90; Republic v. Court of Appeals, No. L-56077, February 28, 1985, 135 SCRA 156. See also Republic v. Sandiganbayan, G.R. NOS. 108292, 108363, 108548-49 and 108550, September 10, 1993, 226 SCRA 314.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.