CASE DIGEST

Marcos v Republic
Civil Procedure

Court Supreme Court Second Division

Citation G.R. No. 189434 G.R. No. 189505
Date August 25, 2012
Petitioner FERDINAND R. MARCOS, JR. IMELDA ROMUALDEZ-MARCOS
Respondent Republic of the Philippines, represented Republic of the Philippines
by the Presidential Commission on Good
Government
Ponente Sereno, J.
Relevant topic Rule XXXVI, Section 5; separate judgments
Prepared by Wilson

CASE SUMMARY:

FACTS:

● On December 1991, Republic, through PCGG filed a Petition for Forfeiture before the Sandiganbayan (SB)
pursuant to the forfeiture law RA 13791 in relation to EO Nos. 1, 2, and 14 and was docketed as Civil Case
No. 0141
o [R] Republic, through PCGG and OSG sought the declaration of Swiss bank accounts totaling
USD 356M and 2 treasury notes worth USD 25M and USD 5M, as ILL GOTTEN WEALTH.
▪ The Swiss Accounts (previously held by 5 groups of foreign foundations) were deposited in
escrow with PNB
▪ The Treasury notes were frozen by the BSP
o [R] also sought the forfeiture of the assets of dummy corporations & entities established by
nominees of Marcos and his wife [P] Imelda Marcos as well as real and personal properties out
of proportion to the spouses’ lawful income.
▪ Among others, a corporate entity by the name of “Arelma, Inc” was described in the Petition
for Forfeiture considering that
● It maintained an account and portfolio in Merrill Lynch, NYC
● It was purportedly organized for the same purpose of hiding ill-gotten wealth
● Before pre-trial, the Marcos children & PCGG Chairperson Gunigundo signed several Compromise
Agreements (General Agreement and Supplemental Agreements) all dated 28 December 1993 for a global
settlement of the Marcos assets.
o One of the whereas clauses in the GA specified that the Republic obtained a favorable judgement
from the Swiss Federal Tribunal in 1990 that the USD 356M belongs in principle to the Republic
provided several certain conditionalities are met.
▪ This is based on the Zurich finding that the deposits in the name of the foundations were of
illegal provenance.
● On 18 October 1996, [R] Republic filed a Motion for Summary Judgement and/or judgement on the
pleadings as to the forfeiture of the USD 356M.
o The SB denied the 1996 Motion since the Marcoses had earlier moved for approval of the
Compromise Agreements, and such motion took precedence over that for summary judgement.
o [P] Imelda filed a manifestation claiming she was not a party to the Motion for Approval of the
Compromise Agreements, and that she owned 90% of the funds while 10% belonged to the estate
● On 10 March 2000, [R] Republic filed another Motion for Summary Judgement on the grounds that
o The essential facts warranting forfeiture of the funds are admitted by the Marcoses in their
pleadings and other submissions, and
o Marcoses’ pre-trial admission that they didn’t have any interest / ownership over the funds for
forfeiture tendered no genuine issue or controversy as to any material fact.
● On 19 September 2000, SB initially granted the 2000 Motion declaring the Swiss deposits in escrow at PNB
were ill-gotten wealth but reversed itself in 2002 ruling and denied the 2000 Motion.
● Alleging GAD, the Republic filed a Pet-Cert with the SC which then set aside the 2002 reversal of SB and
reinstated the 2000 decision including the declaration that the Swiss deposits are ill-gotten wealth. MR
was denied with finality in 2003.

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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.
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Marcos v Republic
Civil Procedure

● On 16 July 2004, the Republic filed a Motion for Partial Summary Judgement to declare the funds,
properties, shares in & interests of ARELMA as ill-gotten assets & forfeited in favor of the Republic
pursuant to RA 1379 in the same manner as when SC forfeited the funds & assets of similar Marcos
foundations in favor of the Republic. The Republic contends that
o The Marcoses are deemed to have admitted the allegations as regards ARELMA
o There is no dispute that the combined lawful income of the Marcoses is grossly disproportionate
to the deposits of their foundations & dummy corporations, including ARELMA.
▪ Imelda, Bongbong, and Imee filed their Oppositions while Irene (Junior’s wife) filed a Motion
to Expunge since Civil Case No. 0141 had already terminated.
● On 2 April 2009, SB granted the Republic’s Motion for Partial Summary Judgement
o The proceedings in CC No. 0141 had not yet terminated, since the Petition for Forfeiture included
numerous other properties which the SB & SC had not yet ruled upon.
o The 1996 Motion for Summary Judgement was made while waiting the outcome of the global
settlement of the Marcos assets. This prompted the filing of the 2000 Motion which was limited to the
Swiss accounts.
o According to SB, the 2000 decision as affirmed by SC was in the NATURE OF A SEPARATE
JUDGEMENT over the Swiss accounts and did not preclude a subsequent judgement over the
other properties subject of the same Petition for Forfeiture such as those of Arelma.
● On 22 October 2009, Bongbong filed the instant Rule 45 Petition. 1 week later, Imelda filed a separate Rule
45 Petition on identical grounds, later on consolidated with the 1 st petition. The Marcoses set forth the
following issues before the SC
o W/N the forfeiture proceeding in Civil Case 0141 with the SB is criminal in nature such that summary
judgement is not allowed
o W/N Republic complied with Sec. 3 c, d, & e of RA 1379
o W/N Civil Case 0141 has been terminated and Motion for Partial Summary Judgment may no longer
be allowed
o W/N there are genuine, triable issues in the case precluding application of rule on summary judgment

ISSUE – HELD – RATIO:

See relevant Issue #3 for discussion related to the topic
ISSUE #1 HELD
W/N forfeiture proceedings are criminal in nature NO

RATIO:

- Bongbong argues that RA 1379 is a penal law and hence they are entitled to all substantial rights of an
accused, one of which being the right “to present their evidence to a full-blown trial”, relying on the 1962 case
of Cabal v Kapunan which mentioned that the civil nature of a forfeiture proceeding refers to purely procedural
aspect of the proceeding and has no bearing on the substantial rights of the accused.
o However, the Marcoses conveniently neglects to quote from the preceding paragraphs of Cabal which
clearly classified forfeiture proceedings as quasi-criminal, not criminal.
o The case of Cabal explained that information for forfeiture of goods that seek no judgment of fine or
imprisonment against any person are deemed to be civil proceedings in rem. Such proceedings are
criminal in nature to the extent that where the person using the res illegally is the owner or rightful
possessor of it, the forfeiture proceeding is in the nature of a punishment.
o GR: Forfeiture proceedings are civil and in the nature of proceedings in rem.
o XPN: In some aspects, suits of penalties & forfeitures are quasi-criminal in nature & within the reason
of criminal proceedings for all the purposes of the prohibition against compelling a person to take the
stand as a witness against himself.
- The court in Republic v Sandiganbayan settled the rule that forfeiture proceedings are actions in rem and
therefore civil in nature.
o Proceedings under RA 1379 do not terminate in the imposition of a penalty but merely in the
forfeiture of the properties illegally acquired in favor of the State.
o The procedure leading to forfeiture is that provided for in a civil action (petition -> answer ->
hearing), save for the preliminary investigation prior to the filing of petition, similar to a criminal
case.
o If the investigation is only similar to that in a criminal case, but the other steps are those for civil
proceedings, the proceeding is not criminal.
-
ISSUE #2 HELD
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CASE DIGEST
Marcos v Republic
Civil Procedure

W/N there remains genuine issues of fact for failure of the Republic to meet necessary NO
averments under the forfeiture law

RATIO:
- Bongbong implores the court to revisit and reverse the earlier ruling in the Swiss deposits Decision.
- In accordance with the principle of immutability of judgments, the Marcoses cannot anymore assail in the
present case the ruling in the Swiss Deposits which has become final and executory
o RA 1379 provides that whenever any public officer or employee has acquired during his incumbency
an amount of property manifestly out of proportion to his salary as such public officer and to his other
lawful income, said property shall be presumed prima facie to have been unlawfully acquired.
1. Offender must be a public officer or employee
2. He must have acquired a considerable amount of money or property during his incumbency,
and
3. Said amount is manifestly out of proportion to his salary and to his other lawful income and
income from lawfully acquired property.
- The Marcoses’ claim is a haphazard rehash of what has already been conclusively determined by the SB and
SC in the Swiss Deposits Decision.
o The Balance Sheet attached to the Marcos Spouses’ ITR for 1965 (before the Marcos presidency)
indicates an ending net worth of P120k.
o The combined salaries of the spouses for 1966 to 1986 totaled only USD 304K (P2.3M)
o However, computations establish a total net worth of the spouses for 1965 – 1984 in the amount of
USD 957k.
1. The combined salaries make up only 31.8% of their total net worth from 1965 – 1984.
2. The Marcoses are unable to account for or explain more than 2/3 of the total net worth of the
Marcoses
o in the spouses ITRs and Balance Sheets for 1965 to 1984, the Sps. reported a total income of USD
2.4M (P16.4M)
- To reiterate, the Republic was able to establish the prima facie presumption that the assets and properties
acquired by the Marcoses were patently disproportionate to their aggregate salaries as public officials.
o Petitioners failed to overturn the presumption when they merely presented vague denials and pleaded
“lack of sufficient knowledge” in their answer.
o The findings of the Sandiganbayan affirmed by the SC have already become the “law of the case” in
the original Petition for Forfeiture.

ISSUE #3 (Relevant) HELD

W/N Civil Case No. 0141 (Petition for Forfeiture) has been terminated NO

RATIO:
 The Marcoses argue that the “law of the case” doctrine should be applied to the grant of Summary Judgment
over the Swiss Accounts and not to the ruling affirming the forfeiture.
 The Swiss Deposits Decision does not in fact serve as the entire judgement in the Forfeiture civil case 0141.
o Just because the Republic succeeded in obtaining summary judgment over the Swiss accounts
doesn’t mean it is precluded from seeking partial summary judgment over a different subject matter
covered by the same petition for forfeiture.
 Civil Case 0141 pertains to the recovery of all the assets enumerated therein
o Holding companies, agro-industrial ventures, and other investments
o Landholdings, buildings, condo units, mansions
o New York properties
o Bills amounting to P27M, time deposits of P46.4M, foreign currencies, and jewelry seized by US
Customs in Hawaii
o USD 30M in the custody of Central Bank in dollar-denominated Treasury Bills, shares of stock, private
vehicles, and real estate in US, among others
 Among the enumeration of properties, the ARELMA assets was included.
o When the Marcoses fled Manila in 1986, they left behind several documents that revealed the
existence of secret bank deposits in Switzerland and other financial centers.
o Malacañang documents detailed how “Arelma, Inc.” was established upon instruction to the
Panamanian branch of the Sunier company to set up Arelma as one of the five Swiss foundations
subject of the 2000 Motion.

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CASE DIGEST
Marcos v Republic
Civil Procedure

 The Swiss deposits Decision dealt only with the summary judgement on the five Swiss accounts as
specifically identified in the 2000 Motion for Partial Summary Judgment. It did not include the Arelma account.
o Thus, the other properties, which were subjects of the Petition for Forfeiture, but were not included
in the 2000 Motion, can still be subjects of a subsequent motion for summary judgment.
o To rule otherwise would be contrary to the Court’s policy on asset recovery which is anchored on
considerations of national survival.
 The Sandiganbayan rightly characterized their ruling on the 2004 Motion as a separate judgment allowed by
the Rules of Court under Rule 36 Section 5
o Rule 35 on Summary Judgements admits a situation in which a case is not fully adjudicated on
motion, and judgment is not rendered upon all of the reliefs sought.
 In PNB v Chua, the court ruled that a careful reading of its Section 4 reveals that a partial
summary judgment is never intended to be considered a “final judgment” as it does not
put an end to an action at law by declaring that the plaintiff either has or has not entitled
himself to recover the remedy he sues for.
o Rule 35 Section 4 pertains to a situation in which separate judgments were necessary because
some facts existed without controversy, while others were controverted.
 There is also no prohibition on a subsequent separate judgment after rendering a partial
summary judgment on an entirely different subject matter.
 The Swiss Deposits Decision only has finally and thoroughly disposed of the forfeiture case as to the five
Swiss accounts through a separate judgment upon the 2004 Motion for Summary judgment.
o The motion for summary judgment on the Arelma account was prompted on a latter stage since it was
only in 2008 when the Republic was finally able to obtain favorable judgment from the American
Supreme Court regarding the different claims against the Arelma assets.
 The Marcoses never intervened in any of the proceedings involving the enforcement of the
judgment against the Arelma assets abroad, yet in their participation in the proceedings in the
Philippines, they invoke their right against undue deprivation of property. This is inconsistent
with their insistence that the properties in question do not belong to them, claiming that they
are mere beneficiaries.

ISSUE #4 HELD
W/N application of summary judgment is justified YES

RATIO:
 The Marcoses’ sham denials justify the application of summary judgment
 As discussed, the lawful income of the Marcoses is only USD 304k while Arelma’s assets as of 1983 were
worth USD 3.3M.
o The entirety of the lawful income of the Marcoses represents only 9% of the entire assets of Arelma,
which the Marcoses remain unable to explain.
 In the answer to the Petition for Forfeiture, the Marcoses still presented general denials on purported lack of
knowledge regarding the whereabouts of the Arelma assets, mimicking their similar denials of the allegations
in the forfeiture Petition as to the Swiss accounts, which the Swiss Deposits Decision characterized as “sham”
denials and evidently calibrated to compound and confuse the issues.
o While the Marcoses denied engagement in any illegal activities and that their properties were lawfully
acquired, they fail to state with particularity the ultimate facts surrounding the alleged lawfulness of the
mode of acquiring the funds in Arelma (USD 3.3M) considering that the entirety of their lawful income
amounted only to USD 3.4k or 9% of the Arelma fund.
 Due to the insufficiency of their denial which in effect denies only the qualifying circumstances, by virtue of the
Swiss Deposits Decision, petitioners Marcoses are deemed to have admitted the factual antecedents &
establishment of Arelma.
 The Marcoses argue that the “law of the case” doctrine should be applied to the grant of Summary Judgment
over the Swiss Accounts and not to the ruling affirming the forfeiture.

RULING:

WHEREFORE, the instant Petition is DENIED. The Decision dated 2 April 2009 of the Sandiganbayan is AFFIRMED.
All assets, properties, and funds belonging to Arelma, S.A., with an estimated aggregate amount of USD3,369,975 as
of 1983, plus all interests and all other income that accrued thereon, until the time or specific day that all money or
monies are released and/or transferred to the possession of the Republic of the Philippines, are hereby forfeited in
favor of respondent Republic of the Philippines. SO ORDERED.