ALICNSC 1 UCnLNGCC AND kLAL1 CCkCkA1ICN et|t|oners vs 1nL nCNCkA8LL SANDIGAN8AAN

ICUk1n DIVISICN kLU8LIC CI 1nL nILIINLS kLSIDLN1IAL CCMMISSICN CN GCCD GCVLkNMLN1

LS1A1L CI ILkDINAND L MAkCCS IMLLDA k MAkCCS kIML nCLDINGS INC LS1A1L CI kAMCN U
CCIUANGCC represented by IMLLDA C CCIUANGCC and IMLLDA C CCIUANGCC kespondents
Gk No 149802 Ianuary 20 2006
CAkIC MCkALLS I
(Ieka)

Doctr|ne 1he Sandlganbayan Lherefore was noL Lo look for proof beyond reasonable doubL buL Lo deLermlne
based on Lhe evldence presenLed ln llghL of common human experlence whlch of Lhe Lheorles proffered by Lhe
parLles ls more worLhy of credence

8ackground of the case (Summary)
1he alleged lllgoLLen asseLs ln Lhls case are shares of sLock ln rlme Poldlngs lnc (Pl) whlch ln Lurn holds shares
ln hlllpplne 1elecommunlcaLlons lnvesLmenL CorporaLlon (1lC) a shareholder ln Lhe hlllpplne Long ulsLance
1elephone Company (Lu1) 1he 8epubllc's case ls premlsed on Lhe Lheory LhaL Pl ls a dummy corporaLlon noL
owned by prlvaLe respondenL Co[uangco famlly buL merely held ln beneflclal LrusL for former resldenL lerdlnand
L Marcos

Iacts
1 1hese flve consolldaLed peLlLlons pray for Lhe nulllflcaLlon of cerLaln lssuances of Lhe Sandlganbayan ln
Clvll Case no 0002 8epubllc of Lhe hlllpplnes v LsLaLe of lerdlnand L Marcos eL al"
2 1he case ls for Lhe recovery of alleged lllgoLLen wealLh of Lhe Marcoses among whlch are shares of sLock
ln Lhe hlllpplne 1elecommunlcaLlons lnvesLmenL CorporaLlon (1lC)
a shares ln Lhe name of 8amon u Co[uangco
b 21323 shares ln Lhe name of lmelda C Co[uangco
c 111413 shares ln Lhe name of rlme Poldlngs lncorporaLed (Pl)
d 1lC ls Lhe blggesL sLockholder of Lu1 lL ownlng some 28 of Lhe ouLsLandlng shares ln Lu1 aL
Lhe Llme Clvll Case no 0002 was flled
3 Pl was reglsLered on CcLober 3 1 wlLh Lhe followlng flve (3) lncorporaLors !ose u Campos !r (son
of !ose ?ao Campos) 8olando Capud (Capud) 8enaLo Llrlo (Llrlo) LrnesLo Abalos (Abalos) and Cervaclo
Cavlola (Cavlola)
a Co[uangco and Luls 1lrso 8lvllla (8lvllla) anoLher sLockholder of 1lC LogeLher wlLh Pl resldenL
Capud forged an agreemenL referrlng Lo Lhe varlous dlscusslons durlng whlch Co[uangco and
8lvllla offered Lo sell and Pl agreed Lo purchase parLlally pald subscrlpLlons and common
shares of 1lC"
b 1he 1lC 8oard of ulrecLors granLed Co[uangco and 8lvllla auLhorlzaLlon Lo Lransfer Lhelr 1lC
shares Lo Pl
c Co[uangco LhereafLer ceded Lo Pl 1 1lC shares reglsLered ln hls name vla Lwo separaLe
deeds of asslgnmenL boLh daLed May 2 18 one for 44023 shares and Lhe oLher for 33
shares
d 8lvllla llkewlse conveyed 1lC 33 shares reglsLered ln hls name Lo Pl vla a deed of
asslgnmenL also daLed May 2 18
4 Co[uangco and Afrlca were elecLed dlrecLors of Pl replaclng Capud and !ose u Campos !r whlle Lhe
oLher dlrecLors Llrlo Abalos and Cavlola remalned as such
a Co[uangco and Afrlca were elecLed by Lhe Pl 8oard of ulrecLors as resldenL and vlce
resldenL respecLlvely whlle de Cuzman and Cavlola remalned as SecreLary and 1reasurer
respecLlvely
3 8y ueed of AsslgnmenL Afrlca Lransferred all hls 400 Pl shares 240 Lo AnLonlo Co[uangco and 10 Lo
1rlnldad Co[uangco ?ulo
a 1he remalnlng lncorporaLors on Lhe board of dlrecLors Llrlo Abalos and Cavlola each
execuLed a deed of asslgnmenL Lransferrlng Lhelr Pl shares Lo members of Lhe Co[uangco
famlly 1hus Llrlo Lransferred 240 shares Lo AnLonlo Co[uangco and 10 Lo 1rlnldad C ?ulo
b Abalos Lransferred 320 shares Lo 8amon C Co[uangco !r and 80 Lo Mlguel C Co[uangco
c Cavlola Lransferred 320 shares Lo Ma vlcLorla C Co[uangco ?ulo and 80 also Lo AnLonlo
Co[uangco
1he 8epubllc of Lhe hlllpplnes Lhrough Lhe resldenLlal Commlsslon on Cood CovernmenL (CCC)
alleges lotet ollo LhaL Lhese 1lC shares of sLock held by Pl and Lhe Co[uangcos belong ln LruLh and ln
facL Lo Lhe Marcoses
a In other words nI and the Co[uangcos are mere dumm|es]condu|ts]nom|nees of the
Marcoses who effect|ve|y owned 1IC and necessar||y the d|sputed shares of stock of LD1
b CCC flled Lhe complalnL for reverslon of Lhe Marcoses' lllgoLLen wealLh lncludlng Lhese Lu1
shares of sLock Lo Lhe 8epubllc
7 Answers
a nI and the Co[uangcos vehement|y deny that the Marcos fam||y owned the d|sputed shares of
stock nI |n part|cu|ar asserted that the members of the fam||y of the |ate kamon Co[uangco
own a|| the outstand|ng shares |n nI
b Ime|da Marcos on the other hand adm|tted |n her Answer that they ho|d benef|c|a| ownersh|p
over these shares of stock She ma|nta|ned that the|r wea|th was |awfu||y acqu|red
8 Alfonso ?uchengco and ? Corp flled a complalnL ln lnLervenLlon seeklng Lo recover from Lhe Co[uangcos
Lhelr shares of sLock and asserLlng ownershlp Lhereof as agalnsL Lhe 8epubllc
a ?uchengco clalms LhaL Lhe Marcos reglme compelled hlm lnLo glvlng up of 1lC shares
formerly owned by Cregorlo 8omulo and Leonldes vlraLa and deprlved hlm of exerclslng hls
opLlon Lo buy Ceneral 1elephone and LlecLronlcs lnc's (C1L's) 23 equlLy ln 1lC 1hls 23
equlLy ln 1lC was subsequenLly acqulred by Pl
9 1est|mon|a| W|tnesses (for the kepub||c)
a !ose ?ao Campos a former Marcos crony who afLer Lhe lebruary 18 LuSA 8evoluLlon
surrendered Lo Lhe governmenL subsLanLlal asseLs whlch he confessed Lo have held ln behalf of
Marcos
l 1hereafLer l asslsLed ln Lhe organlzaLlon and acqulslLlon of some buslness venLures for
Lhe former resldenL lollowlng hls dlrecLlve l lnsLrucLed my lawyers and requesLed Lhe
asslsLance of my oLher buslness assoclaLes and offlcers of Lhe company Lo organlze
esLabllsh and manage Lhese buslness venLures for and on behalf of Lhe resldenL"
ll 1he companles LhaL we have organlzed for and on behalf of former resldenL Marcos
are llsLed ln Annex A"
||| "It was my po||cy that whenever such a corporat|on |s organ|zed for and on beha|f of
the |ntended benef|c|ar|es I execute and I requ|re a|| my sa|d bus|ness assoc|ates to
execute a Deed of 1rust or Deed of Ass|gnment du|y s|gned |n favour of an unnamed
benef|c|ary and to de||ver the or|g|na| copy thereof to the former res|dent"
b Capud one of Lhe lncorporaLors of Pl afflrmed Campos' sworn sLaLemenL quoLed above LhaL
he ls hls assoclaLe
l Well as l sald earller Lhe shares and/or asslgnmenLs lndorsed ln blank were dellvered
by Mr Campos Lo resldenL Marcos"
c ue Cuzman former corporaLe secreLary of Pl
l Pls LesLlmony also sheds llghL on Lhe orlglns and organlzaLlon of Pl and subsLanLlally
corroboraLes Lhe sLaLemenLs of Campos and Capud dlscussed above
10 Sandlganbayan dlsmlsslng Lhe 8epubllc's complalnL lnsofar as lL seeks Lo recover Lhe Lu1 shares
a Lhe 8epubllc falled Lo prove LhaL Lhe Lu1 shares are parL of Lhe lllgoLLen wealLh of Lhe
Marcoses
b ConsequenLly lL afflrmed Lhe Pl's and Lhe Co[uangco's ownershlp over Lhe dlspuLed shares
c 1he Sandlganbayan held LhaL almosL all Lhe documenLs offered by Lhe 8epubllc are
phoLocoples Lhus Lhe laLLer falled Lo provlde such proof of auLhenLlclLy or rellablllLy

Issue]s
1 WCn Co[uangco ls Lhe beneflclal owner of Pl no
2 WCn Sandlganbayan grossly mlsappreclaLed Lhe evldence presenLed by Lhe 8epubllc ?es

ne|d Cn Lhe basls of Lhe evldence Lherefore resldenL Marcos owned Pl and all Lhe lncorporaLors Lhereof acLed
under hls dlrecLlon

kat|o
1 Cn uantum of Lv|dence
a LC no 14A clearly sLaLes LhaL Lhe degree of proof requlred ln cases such as Lhe one aL bar
ls preponderance of evldence
b 1he Sandlganbayan Lherefore was noL Lo look for proof beyond reasonable doubL buL Lo
deLermlne based on Lhe evldence presenLed ln llghL of common human experlence whlch of
Lhe Lheorles proffered by Lhe parLles ls more worLhy of credence
c 1he evldence presenLed by Lhe parLles shows LhaL Lhe preponderance clearly lles wlLh Lhe
8epubllc buL Lhe Sandlganbayan grossly mlsappreclaLed lL and Lherefore commlLLed a
reverslble error
2 1he test|mon|es of Campos Gapud and Atty Iranc|sco de Guzman estab||sh the Marcoses' ownersh|p
of nI
a 1he Sandlganbayan grossly mlsappreclaLed lL bears repeaLlng Lhe welghL of Lhe evldence
presenLed by Lhe 8epubllc reduclng Lo naughL Campos' caLegorlcal sLaLemenL LhaL Pl ls one of
Lhe corporaLlons he organlzed ln behalf of Marcos and LhaL ln "a|| the corporat|ons he
organ|zed that was the standard po||cy that we surrendered a Deed of 1rust or Deed of
Ass|gnment d|rect to res|dent Marcos"
b Campos plalnly meanL LhaL Lhe paLLerns and pracLlces" he menLloned were followed
ln all corporaLlons organlzed on behalf of Marcos lncludlng Pl
3 Accordlngly Lhe quesLlon begglng an answer ls wheLher Lhere Lruly exlsLs ln respecL Lo Pl shares
cerLlflcaLes lndorsed ln blank or deed of LrusL or asslgnmenL ln favor of an unnamed beneflclary dellvered
Lo Lhe laLe resldenL lf Lhere ls one person who can provlde a saLlsfacLory answer Lo Lhls quesLlon lL ls
Mr Campos 8uL he ls noL saylng anyLhlng"
a Cn Lhe conLrary Campos answered Lhe quesLlon clearly when he declared LhaL Pl was one of
Lhe corporaLlons LhaL he organlzed for resldenL Marcos and LhaL all such corporaLlons were
sub[ecL Lo Lhe same pollcy regardlng Lhe lssuance of deeds of asslgnmenL ln blank
b Campos' lack of knowledge regardlng Pl's holdlngs ln 1lC cannoL be consldered faLal Lo hls
credlblllLy slnce Lhls lack of knowledge ls fully accounLed for by Lhe exLenL of Campos'
parLlclpaLlon ln Lhe LransacLlons of Pl
c 1hus afLer Campos organlzed Pl he enLrusLed mosL lf noL all of lLs buslness LransacLlons Lo hls
close assoclaLe Capud Lhe presldenL of Pl who hlmself confessed Lo have acLed as a Marcos
nomlnee Campos' lack of knowledge of Pl's holdlngs ln 1lC Lherefore ceases Lo be a polnL
agalnsL Lhe rellablllLy of hls LesLlmony
4 8earlng ln mlnd Lhls CourL's pronouncemenL LhaL even Lhe mosL candld of wlLnesses commlL mlsLakes and
even make confused and lnconslsLenL sLaLemenLs lL can reasonably be lnferred LhaL Campos merely
mlsapprehended Lhe quesLlon posed Lo hlm and LhoughL LhaL lL was sLlll referrlng only Lo Pl's holdlngs ln
1lC
a Campos should noL Lherefore be undersLood as saylng LhaL he never Lalked Lo Marcos abouL
Pl raLher he was referrlng only Lo 1lC and Lhls sLaLemenL of Campos LhaL he never Lalked Lo
Marcos abouL Pl's holdlngs ln 1lC ls only conslsLenL wlLh hls earller sLaLemenL LhaL he was noL
aware LhaL Pl held such shares
b 1he credlblllLy of Campos Lhus sLands and hls sworn admlsslon LhaL Pl was a dummy
corporaLlon organlzed for former resldenL Marcos consLlLuLes convlnclng evldence LhaL Pl was
beneflclally owned by Marcos
3 Capud's sLaLemenL relaLlng Lhe subsequenL execuLlon of deeds of asslgnmenL Lo Co[uangco and hls kln
does noL deLracL from Lhe prlor dellvery of blank deeds Lo resldenL Marcos especlally so ln Lhls case
where by Capud's own recounLlng he and hls colncorporaLors execuLed Lhe 181 and 183 deeds of
asslgnmenL wlLh Lhe knowledge and auLhorlzaLlon of Lhe same person Lo whom Lhe earller deeds were
dellvered resldenL Marcos
a Capud's meager knowledge abouL 1lC ln splLe of Pl's holdlngs Lhereln far from belng
lncredlble ls perfecLly conslsLenL wlLh hls admlsslon LhaL he was merely a Marcos nomlnee Why
expecL hlm Lo be knowledgeable of 1lC when Lhe person really lnLeresLed ln 1lC was nelLher
hlm nor anyone else ln Pl buL Lhelr prlnclpal Marcos?
b Capud's sLaLemenLs Lhus complemenL Lhose made by Campos furLher sLrengLhenlng Lhe
8epubllc's clalm LhaL Pl ls a corporaLlon beneflclally owned by Lhe Marcoses
1he foregolng sLaLemenLs of de Cuzman clearly supporL Lhe Lhesls of Lhe 8epubllc LhaL Pl ls a dummy of
Lhe Marcoses lL havlng been nletely organlzed by assoclaLes of Campos who had caLegorlcally
LesLlfled Lo havlng organlzed Pl for Lhe beneflL of resldenL Marcos Cn Lhe oLher hand Lhere ls hardly
any evldence on Co[uangco's role ln Lhe organlzaLlon of Pl Lo subsLanLlaLe Lhe Lhesls LhaL Lhe same was
beneflclally owned by hlm
a Pe also conflrmed LhaL all Lhe lncorporaLors of Pl held Lhelr shares as mere nomlnees and LhaL
Lhere was a sLandard operaLlng procedure followed ln Lhe holdlng companles organlzed by
Campos regardlng Lhe lssuance of deeds of asslgnmenL ln blank whlch ls agaln conslsLenL wlLh
Lhe oLher LesLlmonles menLloned
b noLably de Cuzman clarlfled LhaL no sLock cerLlflcaLes were lssued ln Pl buL only deeds of
asslgnmenL whlch sheds llghL on Lhe sLaLemenL of Capud earller adverLed Lo
7 reponderance of ev|dence ||es w|th the kepub||c
a 1he 8epubllc's Lhesls LhaL resldenL Marcos ls Lhe beneflclal owner of Pl ls deduced from
esLabllshed facLs whlch welghed by common experlence engender Lhe lnference as a very
sLrong probablllLy"
b Cnly a Marcos ownershlp can make sense of Lhe clrcumsLances surroundlng Lhe orlglns of Pl
especlally lLs close Lles wlLh unlLA8 and Lhe Camposes
c Cnly a Marcos ownershlp of Pl can plauslbly accounL for Lhe subsLanLlally corroboraLed
admlsslons of Campos and Capud LhaL Lhey organlzed Pl ln behalf of Marcos lndeed even Lhe
mlnorlLy had Lo acknowledge LhaL Capud was a mere nomlnee merely denylng LhaL hls prlnclpal
was Marcos conLrary Lo Capud's own admlsslon
d lf Pl were beneflclally owned by Co[uangco Lhen Lhe Lransfer of Lhese 1lC shares Lo Pl would
merely have been a Lransfer Lo hlmself Cn Lhe oLher hand on Lhe Lhesls LhaL Pl ls beneflclally
owned by Marcos Lhe asslgnmenL Lhereof Lo Pl was a Lransfer from Co[uangco Lo resldenL
Marcos
8 Cn the bas|s of the ev|dence therefore res|dent Marcos owned nI and a|| the |ncorporators thereof
acted under h|s d|rect|on Cnce Lhls ls acknowledged Lhe followlng concluslons lnevlLably follow

1 Co[uangco was elecLed resldenL and Look over Lhe managemenL of Pl ln 181 wlLh Lhe cooperaLlon
of Lhe Marcos nomlnees who lL musL be emphaslzed sLlll held Lhe ma[orlLy sLockholdlng as of LhaL daLe
2 As Lhe remalnlng lncorporaLors on Lhe 8oard dlvesLed Lhelr shares only ln 183 Co[uangco managed a
MarcosconLrolled corporaLlon for aL leasL Lwo years
3 1he slmulLaneous dlvesLmenL of shares by Lhe Lhree remalnlng lncorporaLors on Lhe 8oard Lo
Co[uangco's close relaLlves ln 183 were wlLh Lhe knowledge and auLhorlzaLlon of Lhelr prlnclpal resldenL
Marcos
9 M|sapp||cat|on of the 8ASLCC case
a lL bears noLlng LhaL ln Lhls CourL deLermlned Lhe exLenL of Lhe powers vesLed ln Lhe
CCC for Lhe purpose of tesetvloq suspecLed lllgoLLen wealLh 1hese were ln Lhe naLure
of provlslonal remedles eg sequesLraLlon freeze orders and Lhe llke preparaLory Lo a [udlclal
flndlng LhaL such properLles are lndeed lllgoLLen lL ls unllke Lhe case aL bar where Lhls CourL wlll
now flnally deLermlne on Lhe merlLs wheLher a parLlcular properLy ls |n fact lllgoLLen
b A readlng of would reveal LhaL lL dld noL lnLend Lo esLabllsh evldenLlary norms for all
fuLure cases lnvolvlng Lhe Marcos wealLh nowhere does lL sLaLe LhaL Lhe fallure of Lhe 8epubllc
Lo presenL as evldence blank deeds of asslgnmenL ls faLal Lo lLs cause
c 1he most that can be gathered from |n th|s regard |s that th|s Court there|n found that
there were b|ank deeds of ass|gnment and stock cert|f|cates endorsed |n b|ank recovered |n
Ma|acaang wh|ch were cons|dered f fn ev|dence to [ust|fy the exerc|se of CGG's
powers of sequestrat|on freeze order and the ||ke

D|ssent|ng SANDCVALGU1ILkkL2

1 8ecause Lhls ls a clvll forfelLure case Lhen Lhe 8epubllc musL esLabllsh by a preponderance of evldence
LhaL Lhe Pl shares were lllgoLLen wealLh
a lLs burden ls explalned by Lhls courL Lhus Lqulponderance of evldence rule sLaLes When scales
shall sLand upon an equlpolse and Lhere ls noLhlng ln Lhe evldence whlch shall lncllne lL Lo one
slde or Lhe oLher Lhe courL wlll flnd for Lhe defendanL's clalm Lven lf evldence of Lhe plalnLlff
may be sLronger LhaL LhaL of Lhe defendanL Lhere ls no preponderance of evldence on hls slde lf
such evldence ls lnsufflclenL ln lLself Lo esLabllsh hls cause of acLlon
2 1he 8epubllc falled Lo prove lLs case by preponderance of evldence
a 1he same wlLnesses ldenLlfled Lhe s etool employed by Marcos Lo hlde hls lllgoLLen
wealLh unforLunaLely Lhe evldence for Lhe 8epubllc falls Lo show LhaL Pl ls Marcos dummy
corporaLlon
b Campos also LesLlfled LhaL he had never communlcaLed ln any manner whaLsoever wlLh
resldenL Marcos hls alleged prlnclpal nor wlLh 8amon Co[uangco regardlng Marcos beneflclal
ownershlp of shares of sLock ln Pl or 1lC or rlme Poldlngs lnc
l Conslderlng Lhe facL LhaL Campos by hls own admlsslon was Lhe organlzer of dummy
corporaLlons for Marcos lL ls conLrary Lo human experlence LhaL he never had any
dlscusslon wlLh Lhe former resldenL abouL Pl lf lndeed lL was such a dummy
corporaLlon
ll Cbvlously Lhere was noLhlng Lo dlscuss wlLh resldenL Marcos abouL Pl because lL was
noL one of hls dummy corporaLlons
c ALLy ue Cuzmans above admlsslons are faLal Lo Lhe 8epubllcs case
l Pls caLegorlcal declaraLlon ls LhaL Lhe blank ueeds of AsslgnmenL and ueeds of 1rusL
coverlng Pl shares were noL dellvered Lo Marcos buL Lo 8amon u Co[uangco
ll Conslderlng LhaL Marcos was noL ln possesslon of Lhe ueeds over Pl shares he could
noL have conLrolled or managed Pl 1o be sure Lhere was no polnL organlzlng Pl as a
dummy corporaLlon for Marcos slnce he could noL perform Lhese funcLlons
3 1he oeonlo does noL explaln why Marcos allowed Lhe execuLlon of Lhe ueeds of AsslgnmenL ln favor of
respondenL Co[uangcos lf Pl was lndeed a dummy corporaLlon Lhen lL would be conLrary Lo human
experlence for resldenL Marcos Lo deprlve hlmself of Lhe legal mechanlsm Lo asserL hls alleged beneflclal
ownershlp
4 AddlLlonally Lhe 8epubllc falled Lo prove LhaL Marcos had a subslsLlng lnLeresL ln Pl 1here had been no
lnLervenLlon on hls parL ln Lhe affalrs of Lu1 1lC or Pl nor dld he lssue lnsLrucLlons LhaL hugely and
lnexpllcably beneflLed Lhese companles lndlcaLlng he had any acLual lnLeresL Lhereln

D|ssent|ng Garc|a I

1 ln all Lhls CourL ls unable Lo accord concurrence Lo peLlLloner 8epubllc's Lheory LhaL Lhe dlspuLed Lu1
shares covered by Lhe necessary 1lC sLock cerLlflcaLes ln Lhe name of respondenLs Co[uangcos/Pl are
parL of Lhe Marcoses' lllqtteo weoltb" for lack of dlrecL and subsLanLlal proof Lhereof
a eLlLloner 8epubllc's recovery efforLs cannoL be predlcaLed on speculaLlons surmlses or vague
lnferences as here
b ln Lhls sense Lhe respondenL courL sLood on solld legal ground when lL held LhaL o nlol t
tenvety tettles olleqe by tbe keblln t bove beeo lllqtteo nooot tnee oet tbe
ete testlo tbot sol tettles ote loee lllqtteo
2 Cn anoLher polnL peLlLloner 8epubllc has made much of respondenL courL's fallure Lo appreclaLe ln lLs
favor Lhe allegaLlons parLaklng of [udlclal admlsslons made by respondenL Mrs Marcos ln her Answer Lo
lLs Amended ComplalnL Crossclalm and oLher pleadlngs bearlng on Lhe Marcoses' ownershlp of Lhe
dlspuLed Lu1 shares
a ln Lhls regard sufflce lL Lo sLaLe LhaL Lhese admlsslons are evldence agalnsL Lhe parLy who made
Lhem or ln approprlaLe case Lhelr prlvles ln Lhe concreLe Lhe admlsslons adverLed Lo made by
Mrs Marcos even lf Lhey parLake of [udlclal admlsslons are blndlng and concluslve only as Lo
her 1hey cannoL blnd or pre[udlce respondenLs Co[uangcos/Pl who have Laken lssue agalnsL
Mrs Marcos on her ownershlp clalm over Lhe Lu1 shares ln quesLlon