Ramos, Sharlene Joyce D.

JD 1-E

SHERIFF ALBERT A. DELA CRUZ OF THE SANDIGANBAYAN SECURITY AND SHERIFF SERVICES,
THE SANDIGANBAYAN SECURITY AND SHERIFF SERVICES, Petitioners
Vs
WELLEX GROUP, INC., Respondent
G.R. No. 247439
Facts:
Petitioner Albert A. Dela Cruz is a Sheriff at the Sandiganbayan Security and Sheriff
Services (SSSS) while Wellex Group, Inc. is a registered owner of 450,000,000 shares of
stock of Waterfront Philippines, Inc.
On February 4, 2000, Wellex borrowed Php 500,000,000.00 from the Investment
Management Agreement (IMA) Account of Jose Velarde, which is managed by BDO. As
security for the loan, Wellex mortgaged the Waterfront Shares. By the time the loan
obligation matured, Wellex failed to settle the same. However, BDO did not institute any
foreclosure proceeding against the Waterfront Shares.
Meanwhile, President Estrada, during a trial of a Plunder Case, was proved to be
the owner of the Jose Velarde accounts and was subsequently convicted of the crime of
Plunder carrying with it penalty of forfeiture in favor of the State of ill-gotten wealth,
including the IMA Account.
Wellex, in a Petition for Certiorari, questioned the inclusion of the Waterfront
Shares in the forfeiture, however, the Court affirmed such inclusion because the IMA
Account and its assets are traceable to President Estrada’s ill-gotten wealth.
Wellex filed a Complaint for Recovery of Possession, Delivery of Stock Certificates
and Injunction with the RTC claiming ownership of the Waterfront Shares, full payment of
loan obligation, and entitlement to the return of the Shares. The RTC dismissed the
Complaint. Wellex then filed a Petition for Review on Certiorari assailing the RTC’s
decision to dismiss the former’s Complaint for Recovery of Posession, Delivery of Stock
Certificates and Injunction. The Court granted Wellex’s Petition for Review on Certiorari
and remanded the case to the Regional Trial Court (RTC) for further proceedings.
On May 16, 2019, the RTC ruled in favor of Wellex and ordered Sheriff Urieta and
the SSSS to deliver to Wellex the Stock Certificates on the ground of prescription.
Aggrieved, the petitioners Sheriff Albert Dela Cruz and SSSS filed the present
Petition for Review on Certiorari contending that the RTC erred in upholding Wellex’s
claim of prescription.
Issue:
Whether or not the RTC committed a reversible error in upholding Wellex’s
defense of prescription.
Ruling:
Yes, the RTC erred in upholding Wellex’s defense of prescription, ratiocinating
that the State failed to institute a collection action or mortgage action within 10 years
from the time the principal loan matured.

The subrogation and prescription, as modes of extinguishment of an

obligation, are concepts provided for under the Civil Code, which is a general law. On
the other hand, the Anti-Plunder Law, which is a special law, expressly states that the
right of the State to recover ill-gotten wealth shall not be barred by prescription. This
provision of the Anti-Plunder Law, in fact, was just lifted from Section 15, Article XI of
the 1987 Constitution which states that “the right of the State to recover properties
unlawfully acquired by public officers from them or from their nominees or
transferees shall not be barred by prescription, laches, or estoppel.”

The provisions of the Constitution and the Anti-Plunder Law prevail over
principles of subrogation and prescription under the Civil Code.

Hence, the Supreme Court partially granted the present Petition for Review
and REVERSED the Decision of the RTC dated May 16, 2019 which upheld Wellex’s
defense of prescription.