Commercial Law Review | Divina | 2nd Sem AY 2014-2015 |Page 1

Ligot v. Republic A freeze order is an extraordinary and interim relief issued by the CA
March 6, 2013 to prevent the dissipation, removal, or disposal of properties that are
BRION, J suspected to be the proceeds of, or related to, unlawful activities as
Dawn Chua defined in Section 3(i) of RA No. 9160.
The primary objective of a freeze order is to temporarily preserve
SUMMARY: A freeze order was issued against the Ligots’ properties monetary instruments or property that are in any way related to an
pursuant to an investigation in connection with a complaint filed unlawful activity or money laundering, by preventing the owner from
against them for violation of the AMLA. This was extended indefinitely utilizing them during the duration of the freeze order.
by the CA until until after all the appropriate proceedings have been The relief is pre-emptive in character, meant to prevent the owner
terminated. The Ligots challenge the extension. Meanwhile the the from disposing his property and thwarting the State’s effort in building
Rule in Civil Forfeiture Cases took effect. Under this rule, a freeze order its case and eventually filing civil forfeiture proceedings and/or
could be extended for a maximum period of six months. The Court prosecuting the owner.
ruled that the indefinite extension violated the Ligots’ due process
(they were prevented from using their properties for nearly 6 years) FACTS:
and that the Rule in Civil Forfeiture applied. The freeze order was - Pursuant to a recommendation by the Ombudsman to the AMLC to
lifted. investigate the Ligots for violation of the AMLA, it filed an Urgent Ex-
Parte Application for the issuance of a freeze order with the CA against
DOCTRINE: their monetary instruments and properties
There are only two requisites for the issuance of a freeze order: (1) the - The Ombudsman’s complaint filed before the CA alleges that Lt. Gen.
application ex parte by the AMLC and (2) the determination of Ligot served in the AFP for 33 years. He declared in his SALN that as of
probable cause by the CA. December 31, 2003, he had assets P3.8M. In contrast, his declared assets
The probable cause required for the issuance of a freeze order differs in his 1982 SALN amounted to only P105,000.
from the probable cause required for the institution of a criminal o However, Lt. Gen. Ligot and his family had other properties and
action. bank accounts, not declared in his SALN, amounting to at least
P50M.
The probable cause required for the issuance of a freeze order refers o These were declared to be illegally obtained and unexplained
to:
wealth pursuant to RA No. 1379 (An Act Declaring Forfeiture in
- such facts and circumstances which would lead a reasonably
Favor of the State Any Property Found to Have Been Unlawfully
discreet, prudent or cautious man to believe that an unlawful
Acquired by Any Public Officer or Employee and Providing for
activity and/or a money laundering offense is about to be, is
the Proceedings Therefor).
being or has been committed and
- Accordingly, the CA issued a freeze order against the Ligots various
- that the account or any monetary instrument or property
bank accounts, web accounts and vehicles, valid for a period of 20 days
subject thereof sought to be frozen is in any way related to
from the date of issuance. This was further extended until after all the
said unlawful activity and/or money laundering offense.
appropriate proceedings and/or investigations have been
terminated in order to help the Ombudsman’s investigation in several
A freeze order is not dependent on a separate criminal charge, much
other cases involving the Ligots.
less does it depend on a conviction.
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- The Ligots filed a motion to lift the extended freeze order. Meanwhile, 1. NO
the Rule in Civil Forfeiture Cases took effect. Under this rule, a - Section 57 of the Rule in Civil Forfeiture Cases explicitly provides the
freeze order could be extended for a maximum period of six remedy available in cases involving freeze orders issued by the CA:
months. o Section 57. Appeal. - Any party aggrieved by the decision or
- The Ligots’ MR was denied. Hence the present petition for certiorari ruling of the court may appeal to the Supreme Court by petition
under Rule 65. for review on certiorari under Rule 45 of the Rules of Court. The
- The Ligots’ Arguments: appeal shall not stay the enforcement of the subject decision or
o CA committed grave abuse of discretion amounting to lack or final order unless the Supreme Court directs otherwise.
excess of jurisdiction when it extended the freeze order issued - Even assuming that a petition for certiorari is available to the petitioners,
against him and his family even though no predicate crime had the issues they raise (i.e., existence of probable cause to support the
been duly proven or established to support the allegation of freeze order; the applicability of the 6-month limit to the extension of
money laundering. freeze orders embodied in the Rule of Procedure in Cases of Civil
o The freeze order issued against them ceased to be effective Forfeiture) pertain to errors of judgment allegedly committed by the CA,
in view of the 6-month extension limit of freeze orders which fall outside the Court’s limited jurisdiction when resolving
provided under the Rule in Civil Forfeiture Cases. The CA, in certiorari petitions.
extending the freeze order, not only unduly deprived him and his - People v. Court of Appeals: In a petition for certiorari, the jurisdiction of
family of their property, in violation of due process, but also the court is limited to resolving only errors of jurisdiction, not errors of
penalized them before they had been convicted of the crimes jurisdiction.
they stand accused of. - However, the Court relaxed the application of the rules of procedure and
- The Republic’s arguments: resolved the case on the merits in the interest of justice.27
o CA can issue a freeze order upon a determination that probable
cause exists, showing that the monetary instruments or 2. YES
properties subject of the freeze order are related to the unlawful - The Rule in Civil Forfeiture Cases came into effect on December 15, 2005.
activity enumerated in RA No. 9160. It is not necessary that a Section 59 provides that it shall "apply to all pending civil forfeiture cases
formal criminal charge must have been previously filed against or petitions for freeze order" at the time of its effectivity.
them before the freeze order can be issued. - after the CA issued its September 20, 2005 resolution extending the
o The extension of the freeze order had already become final and freeze order, the Ligots filed a motion to lift the extended freeze order on
executory, and could no longer be challenged. September 28, 2005. The CA only acted upon this motion on January 4,
2006, when it issued a resolution denying it.
ISSUES: - Since the Ligots’ motion was still pending resolution at the time the Rule
1. WON Certiorari is the proper remedy to assail the freeze order [NO] in Civil Forfeiture Cases came into effect on December 15, 2005, the Rule
2. WON the 6 month rule under the Rule of Civil Forfeiture applies in this unquestionably applies to the present case.
case. [YES]
3. WON probable cause exists to support the issuance of the freeze order 3. YES
[YES] - The legal basis for the issuance of a freeze order is Section 10 of RA No.
4. WON a freeze order can be issued for an indefinite period [NO] 9160, which states:
o Section 10. Freezing of Monetary Instrument or Property. – The
RATIO: Court of Appeals, upon application ex parte by the AMLC and
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after determination that probable cause exists that any only consistent with the very purpose of the freeze order, which
monetary instrument or property is in any way related to an specifically is to give the government the necessary time to prepare its
unlawful activity as defined in Section 3(i) hereof, may issue a case and to file the appropriate charges without having to worry about
freeze order which shall be effective immediately. The the possible dissipation of the assets that are in any way related to the
freeze order shall be for a period of twenty (20) days unless suspected illegal activity. Thus, contrary to the Ligots’ claim, a freeze
extended by the court. order is not dependent on a separate criminal charge, much less
- As to the Ligots’ argument that they had not yet been convicted of does it depend on a conviction.
committing any of the offenses enumerated under RA No. 9160 that - That a freeze order can be issued upon the AMLC’s ex parte
would support the AMLC’s accusation of money-laundering activity: application further emphasizes the law’s consideration of how
o there are only two requisites for the issuance of a freeze critical time is in these proceedings.
order: (1) the application ex parte by the AMLC and (2) the o Republic v. Eugenio, Jr., "to make such freeze order anteceded by
determination of probable cause by the CA. a judicial proceeding with notice to the account holder would
 The probable cause required for the issuance of a allow for or lead to the dissipation of such funds even before the
freeze order differs from the probable cause order could be issued."
required for the institution of a criminal action, and - There is probable cause in this case to issue the freeze order:
the latter was not an issue before the CA nor is it an o Lt. Gen. Ligot himself admitted that his income came from his
issue before us in this case. salary as an officer of the AFP. Yet, the Ombudsman’s
- The probable cause required for the issuance of a freeze order refers to: investigation revealed that his properties amount to more than
o such facts and circumstances which would lead a reasonably P54M Since these assets are grossly disproportionate to Lt. Gen.
discreet, prudent or cautious man to believe that an unlawful Ligot’s income, as well as the lack of any evidence that the Ligots
activity and/or a money laundering offense is about to be, is have other sources of income, the CA properly found that
being or has been committed and probable cause exists that these funds have been illegally
o that the account or any monetary instrument or property acquired.
subject thereof sought to be frozen is in any way related to o On the other hand, the AMLC’s verified allegations in its ex parte
said unlawful activity and/or money laundering offense. application clearly sustain the CA’s finding that probable cause
- To differentiate this from any criminal case that may thereafter be exists that the monetary instruments subject of the freeze order
instituted against the same respondent, the Rule in Civil Forfeiture Cases are related to, or are the product of, an unlawful activity.
expressly provides –
o SEC. 28. Precedence of proceedings. - Any criminal case relating 4. NO
to an unlawful activity shall be given precedence over the - A freeze order is an extraordinary and interim relief issued by the
prosecution of any offense or violation under Republic Act No. CA to prevent the dissipation, removal, or disposal of properties
9160, as amended, without prejudice to the filing of a separate that are suspected to be the proceeds of, or related to, unlawful
petition for civil forfeiture or the issuance of an asset activities as defined in Section 3(i) of RA No. 9160.
preservation order or a freeze order. Such civil action shall - The primary objective of a freeze order is to temporarily preserve
proceed independently of the criminal prosecution. monetary instruments or property that are in any way related to an
- Section 10 of RA No. 9160 (allowing the extension of the freeze order) unlawful activity or money laundering, by preventing the owner
and Section 28 (allowing a separate petition for the issuance of a freeze from utilizing them during the duration of the freeze order.
order to proceed independently) of the Rule in Civil Forfeiture Cases are
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- The relief is pre-emptive in character, meant to prevent the owner - A freeze order is meant to have a temporary effect; it was never intended
from disposing his property and thwarting the State’s effort in to supplant or replace the actual forfeiture cases where the provisional
building its case and eventually filing civil forfeiture proceedings remedy of asking for the issuance of an asset preservation order from the
and/or prosecuting the owner. court where the petition is filed is precisely available. A freeze order is
- The AMLA is silent on the maximum period of time that the freeze order both a preservatory and preemptive remedy.
can be extended by the CA. The final sentence of Section 10 of the Anti-
Money Laundering Act of 2001 provides, "the freeze order shall be for a
period of twenty (20) days unless extended by the court." In contrast,
Section 55 of the Rule in Civil Forfeiture Cases qualifies the grant of
extension "for a period not exceeding six months" "for good cause"
shown.
- The silence of the law, however, does not in any way affect the Court’s
own power under the Constitution to "promulgate rules concerning the
protection and enforcement of constitutional rights xxx and procedure in
all courts." Pursuant to this power, the Court issued A.M. No. 05-11-04-
SC, limiting the effectivity of an extended freeze order to six months – to
otherwise leave the grant of the extension to the sole discretion of the CA,
which may extend a freeze order indefinitely or to an unreasonable
amount of time – carries serious implications on an individual’s
substantive right to due process.

- In this case, the CA extended the freeze order over the Ligots’ various
bank accounts and personal properties "until after all the appropriate
proceedings and/or investigations being conducted are terminated."
- the freeze order has been in effect since 2005, while the civil forfeiture
case was filed only in 2011 and the forfeiture case under RA No. 1379
was filed only in 2012. This means that the Ligots have not been able to
access the properties subject of the freeze order for six years or so simply
on the basis of the existence of probable cause to issue a freeze order
- The freeze order effectively bars the Ligots from using any of the
property covered by the freeze order until after an eventual civil
forfeiture proceeding is concluded in their favor and after they shall have
been adjudged not guilty.
- These periods of extension are way beyond the intent and purposes
of a freeze order which is intended solely as an interim relief. It
borders on inflicting a punishment to the Ligots, in violation of their
constitutionally protected right to be presumed innocent.