Rule 47 - Strategic Alliance vs. Radstock
Rule 47 - Strategic Alliance vs. Radstock
Rule 47 - Strategic Alliance vs. Radstock
Petitions dismissed.
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* EN BANC.
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government at no cost; The TRB does not have the power to give
back to PNCC the toll assets and facilities which were
automatically turned over to the Government, by operation of law,
upon the expiration of the franchise of the PNCC on 1 May 2007.—
With the expiration of PNCC’s franchise, the assets and
facilities of PNCC were automatically turned over, by
operation of law, to the government at no cost. Sections 2(e)
and 9 of PD 1113 and Section 5 of PD 1894 provide: x x x The
TRB does not have the power to give back to PNCC the toll
assets and facilities which were automatically turned over
to the Government, by operation of law, upon the
expiration of the franchise of the PNCC on 1 May 2007.
Whatever power the TRB may have to grant authority to operate
a toll facility or to issue a “Tollway Operation Certificate,” such
power does not obviously include the authority to transfer back to
PNCC ownership of National Government assets, like the toll
assets and facilities, which have become National Government
property upon the expiry of PNCC’s franchise. Such act by the
TRB would repeal Section 5 of PD 1894 which automatically
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of the Civil Code which states that “[a]cts executed against the
provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.” Indisputably,
without an appropriation law, PNCC cannot lawfully pay P6.185
billion to Radstock. Any contract allowing such payment, like the
Compromise Agreement, “shall be void” as provided in Section
87 of the Government Auditing Code.
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Radstock was not yet settled at the time of the execution of the
Compromise Agreement since the case was still the subject of
litigation, in which PNCC resisted liability by pleading various
defenses. He expounds: The exception of a compromise or release
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stockholders or members.
Bids and Bidding; While as a rule, divestment or disposal of
government property should be undertaken primarily through
public bidding, the mode of
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eral sense, may encompass all activities of the Congress, like the
laws enacted and resolutions adopted, but the statements of the
legislators and testimonies cannot be regarded, by any stretch of
legal understanding, as the “official act of the legislative
department.” At best, the courts can only take judicial notice of
the fact that such statements or speeches were made by such
persons, or that such hearings were conducted. Although this
Court can take cognizance of the proceedings of the Senate, as
acts of a department of the National Government, the testimonies
or statements of the persons during the hearings or sessions may
not be used to prove disputed facts in the courts of law. They
cannot substitute actual testimony as basis for making findings of
fact necessary for the determination of a controversy by the
courts. In other words, they are incompetent for purposes of
judicial proceedings.
Same; Same; Separation of Powers; Courts conduct hearings
to settle, through the application of law, actual controversies
arising between adverse litigants and involving demandable
rights, and the Rules of Court prescribes procedural safeguards
consistent with the principles of due process and equal protection
guaranteed by the Constitution; In contrast, the legislative bodies
conduct their inquiries under less safeguards and restrictions,
because inquiries in aid of legislation are undertaken as tools to
gather information, in order to enable the legislators to act wisely
and effectively, and in order to determine whether there is a need
to improve existing laws, or to enact new or remedial legislation.—
The distinctions between court proceedings, on one hand, and
legislative investigations in aid of legislation, on the other hand,
derive from their different purposes. Courts conduct hearings to
settle, through the application of law, actual controversies arising
between adverse litigants and involving demandable rights. In
court proceedings, the person’s rights to life, liberty and property
may be directly and adversely affected. The Rules of Court
prescribes procedural safeguards consistent with the principles of
due process and equal protection guaranteed by the Constitution.
The manner in which disputed matters can be proven in judicial
proceedings as provided in the Rules of Court must be followed. In
contrast, the legislative bodies conduct their inquiries under less
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sel, and appear before the legislators, who are the inquisitors. The
latter have no obligation to act as impartial judges during the
proceedings. The inquiries do not include direct examinations and
crossexaminations, and leading questions are frequent.
Same; Intervention; The interest that entitles a person to
intervene in a suit already commenced between other persons must
be in the matter in litigation and of such character that the
intervenor will either gain or lose by direct legal operation and
effect of the judgment.—To start with, Asiavest has no direct and
material interest in the approval (or disapproval) of the
compromise agreement between PNCC and Radstock. Secondly,
Asiavest’s request to intervene was made too late in the
proceedings. Under Section 2, Rule 19, 1997 Rules of Civil
Procedure, an intervention, to be permitted, must be sought prior
to the rendition of the judgment by the trial court. Thirdly, the
avowed interest of Asiavest in PNCC’s assets emanated from its
being a creditor of PNCC by final judgment, and was not related
to the personal obligations of PNCC in favor of Marubeni (that is,
the guarantees for the loans) that were the subject of the
compromise agreement. Such interest did not entitle Asiavest to
attack the compromise agreement between PNCC and Radstock.
The interest that entitles a person to intervene in a suit already
commenced between other persons must be in the matter in
litigation and of such character that the intervenor will either
gain or lose by direct legal operation and effect of the judgment.
The conditions for a proper intervention in relation to Asiavest
simply did not exist. Moreover, sustaining Asiavest’s posture may
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CARPIO, J.:
Prologue
This case is an anatomy of a P6.185 billion1 pillage of
the public coffers that ranks among one of the most brazen
and hideous in the history of this country. This case
answers the questions why our Government perennially
runs out of funds to provide basic services to our people,
why the great masses of the Filipino people wallow in
poverty, and why a very select few amass unimaginable
wealth at the expense of the Filipino people.On 1 May
2007, the 30year old franchise of Philippine National
Construction Corporation (PNCC) under Presi dential
Decree No. 1113 (PD 1113), as amended by Presi dential
Decree No. 1894 (PD 1894), expired. During the 13th
Congress, PNCC sought to extend its franchise. PNCC won
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P5,993,689.000.
What else, Mr. President? The 20% of the outstanding capital
stock of PNCC with a par value of P2,300,000,000—I repeat, 20%
of the outstanding capital stock of PNCC worth P2,300 billion—
was assigned to Radstock.
In addition, Mr. President and my dear colleagues,
please hold on to your seats because part of the agreement
is 50% of PNCC’s 6% share in the gross toll revenue of the
Manila North Tollways Corporation for 27 years, from 2008
to 2035, is being assigned to Radstock. How much is this
worth? It is worth P9,382,374,922. I repeat, P9,382,374,922.
xxxx
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3 On 7 February 2007, Senator Franklin Drilon introduced P.S. Res. No. 618 or
the Resolution Directing the Senate Committee on Finance to Conduct an Inquiry,
in Aid of Legislation, into the Compromise Agreement Entered into by the
Philippine National Construction Corporation (PNCC) with Radstock Securities
Limited, for the Purpose of Providing Remedial Legislation and Policy Parameters
on Compromise Agreements to Protect Government Assets and Ensure the
Judicious Use of Government Funds. This Resolution was submitted to the Senate
and referred to the Committee on Finance.
4 Delivered on 21 December 2006 during the Plenary Session.
444
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5 Record of the Senate, Vol. III, Session No. 55, 21 December 2006.
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Avenue Capital buys something for $2 million and you give him
$4 million in one year, it’s a 100 percent return. They’ll walk
away and dance to their stockholders. So here in this particular
case, if you know that Radstock only bought it for $2 million, I
would have gotten board approval and say, “Okay, let’s settle this
for $4 million.” And Radstock would have jumped up and down.
So what looks to me is that this was already a scheme. Marubeni
wrote it off already. Marubeni wrote everything off. They just got
a $2 million and they probably have no more residual rights or
maybe there’s a clause there, a secret clause, that says, “I want 20
percent of whatever you’re able to eventually collect.” So $2
million. But whatever it is, Marubeni practically wrote it off.
Radstock’s liability now or exposure is only $2 million plus all the
lawyer fees, underthetable, etcetera. All right. Okay. So it’s
pretty obvious to me that if anybody were using his brain, I would
have gone up to Radstock and say, “Here’s $4 million. Here’s P200
million. Okay.” They would have walked away. But evidently, the
“ninongs” of Radstock – See, I don’t care who owns Radstock. I
want to know who is the ninong here who stands to make a lot of
money by being able to get to courts, the government agencies,
OGCC, or whoever else has been involved in this, to agree to 6
billion or whatever it was. That’s a lot of money. And believe me,
Radstock will probably get one or two billion and four billion will
go into somebody else’s pocket. Or Radstock will turn around, sell
that claim for P4 billion and let the new guy just collect the
payments over the years.
x x x x7
SEN. OSMEÑA. x x x I just wanted to know is CDCP Mining a
100 percent subsidiary of PNCC?
MR. AGUILAR. Hindi ho. Ah, no.
SEN. OSMEÑA. If they’re not a 100 percent, why would they
sign jointly and severally? I just want to plug the loopholes.
MR. AGUILAR. I think it was—if I may just speculate. It was
just common ownership at that time.
SEN. OSMEÑA. Alright. Now—Also, the ...
MR. AGUILAR. Ah, 13 percent daw, Your Honor.
SEN. OSMEÑA. Huh?
MR. AGUILAR. Thirteen percent ho.
SEN. OSMEÑA. What’s 13 percent?
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I.
The Case
Before this Court are the consolidated petitions for
review9 filed by Strategic Alliance Development
Corporation (STRADEC) and Luis Sison (Sison), with a
motion for intervention filed by Asiavest Merchant Bankers
Berhad (Asiavest), challenging the validity of the
Compromise Agreement between PNCC and Radstock. The
Court of Appeals approved the Compromise Agreement in
its Decision of 25 January 200710 in CAG.R. CV No. 87971.
II.
The Antecedents
PNCC was incorporated in 1966 for a term of fifty years
under the Corpora
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11 http://www.pncc.com.ph/
12 http://www.pncc.com.ph/
13 Id.
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14 Id.
15 The members of the PNCC Board who were present during the
meeting were Renato B. Valdecantos, Chairman, Rolando L. Macasaet,
President and Chief Executive Officer, Braulio B. Balbas, Jr., Romulo F.
Coronado, Basilio R. Cruz, Jr., Alfredo F. Laya, Jr., Victor Pineda, Edwin
Tanonliong, Jose Luis Vera, Hermogenes Concepcion, Jr., and Raymundo
Francisco, Directors.
451
452
August 30, 2002 and its Resolution of January 22, 2003 in CA
G.R. SP No. 66654 are REVERSED and SET ASIDE. The
attachments over the properties by the writ of preliminary
attachment are hereby ordered LIFTED effective upon the finality
of this Decision. The Decision and Resolution of the Court of
Appeals are AFFIRMED in all other respects. The Temporary
Restraining Order is DISSOLVED immediately and the Court of
Appeals is directed to PROCEED forthwith with the appeal filed
by PNCC.
No costs.
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453
SO ORDERED.”17
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453
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III.
Propriety of Actions
The Court of Appeals denied STRADEC’s motion for
intervention on the ground that the motion was filed only
after the Court of Appeals and the trial court had
promulgated their respective decisions.
Section 2, Rule 19 of the 1997 Rules of Civil Procedure
provides:
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19 Pinlac v. Court of Appeals, 457 Phil. 527; 410 SCRA 419 (2003).
20 Id.
456
ted for decision before the Supreme Court, and even where the
assailed order has already become final and executory. In Lim v.
Pacquing (310 Phil. 722 (1995)], the motion for intervention filed
by the Republic of the Philippines was allowed by this Court to
avoid grave injustice and injury and to settle once and for all the
substantive issues raised by the parties.”21
“It is quite clear and patent that the motions for intervention
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Securities Limited
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26 Id.
27 Id.
28 Id.
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IV.
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30 Del Mar v. PAGCOR, 400 Phil. 307; 346 SCRA 485 (2000).
31 Agote v. Lorenzo, G.R. No. 142675, 22 July 2005, 464 SCRA 60.
32 G.R. No. 102782, 11 December 1991, 204 SCRA 837, 842843.
460
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JUSTICE CARPIO
x x x what is the net worth now of PNCC?
Negative what? Negative 6 Billion at least[?]
ATTY. AGRA
Yes, your Honor.43 (Emphasis supplied)
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THE CHAIRMAN. x x x You were the one who wrote this letter
or rather this memorandum dated 17 October 2000 to Atty.
Valdecantos. Can you tell us the background why you wrote the
letter acknowledging a debt which is nonexistent?
MR. FRANCISCO. I was appointed as the trustee in charge of
the privatization of the PNCC at that time, sir. And I was tasked
to do a study and engage the services of financial advisors as well
as legal advisors to do a legal audit and financial study on the
position of PNCC. I bidded out these engagements, the financial
advisership went to Punongbayan and Araullo. The legal audit
went to the Feria Law Offices.
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Securities Limited
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MS. OGAN. Yes, Mr. Chairman, that was what we were told
although we made several requests to the APT, sir.
THE CHAIRMAN. All right. Now, since it was for the APT and
not for the PNCC, I ask the question why did PNCC adopt it?
That was not for the consumption of PNCC. It was for the
consumption of the Asset Privatization Trust. And that is what
Atty. Francisco says and it’s confirmed by you saying that this
was a memo—you don’t have a copy because this was sought for
by APT and the Feria Law Offices just provided an opinion—
provided the APT with an opinion. So, as corporate secretary, the
board of directors of PNCC adopted it, recognized the Marubeni
Corporation.
You read the minutes of the October 20, 2000 meeting of the
board of directors on Item V. The resolution speaks of .. so, go
ahead.
MS. OGAN. I gave my copies. Yes, sir.
THE CHAIRMAN. In effect the Feria Law Offices’
opinion was for the consumption of the APT.
MS. OGAN. That was what we were told, Mr. Chairman.
THE CHAIRMAN. And you were not even provided with
a copy.
THE CHAIRMAN. Yet you adopted it.
MS. OGAN. Yes, sir.
SEN DRILON. Considering you were the corporate secretary.
THE CHAIRMAN. She was the corporate secretary.
SEN. DRILON. She was just recording the minutes.
THE CHAIRMAN. Yes, she was recording.
Now, we are asking you now why it was taken up?
MS. OGAN. Yes, sir, Mr. Chairman, this was mentioned in the
memorandum of Atty. Francisco, memorandum to the board.
SEN. DRILON. Mr. Chairman, Mr. Francisco represented APT
in the board of PNCC. And is that correct, Mr. Francisco?
THE CHAIRMAN. You’re an exofficio member.
SEN. DRILON. Yes.
MR. FRANCISCO. Exofficio member only, sir, as trustee in
charge of the privatization of PNCC.
SEN. DRILON. With the permission of Mr. Chair, may I ask a
question...
473
Securities Limited
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SEN. OSMEÑA. x x x
All right. And lastly, just to clear our minds, there has always
been this fingerpointing, of course, whenever—this is typical
Filipino. When they’re caught in a bind, they always point a
finger, they pretend they don’t know. And it just amazes me that
you have been appointed trustees, meaning, representatives of the
Filipino people, that’s what you were at APT, right? You were not
Erap’s representatives, you were representative of the Filipino
people and you were tasked to conserve the assets that that had
been confiscated from various cronies of the previous
administration. And here, you are asked to recognize the P10
billion debt and you point only to one law firm. If you have cancer,
don’t you to a second opinion, a second doctor or a third doctor?
This is just a question. I am just asking you for your opinion if you
would take the advice of the first doctor who tells you that he’s got
to open you up.
MR. FRANCISCO. I would go to three or more doctors, sir.
SEN. OSMEÑA. Three or more. Yeah, that’s right. And in this
case the APT did not do so.
MR. FRANCISCO. We relied on the findings of the …
SEN. OSMEÑA. If these were your money, would you
have gone also to obtain a second, third opinion from
other law firms. Kung
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the old board that approved it. Stranger still, Renato Valdecantos
who was still a member of the Board voted in favor of reversing
the resolution he himself instigated and pushed. Some of the
board members who voted to recognize the obligation of
Marubeni even came to me privately and said “pinilit lang
kami.” x x x.”53 (Emphasis supplied)
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assets of PNCC worth P18 Billion Pesos. There are three items
that are undervalued here, the real estate that was turned over as
a result of the controversial agreement, the toll revenues that
were being assigned and the value of the new shares of PNCC the
difference is about P12 Billion Pesos. x x x” (Emphasis supplied)
V.
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COMPROMISE AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Agreement made and entered into this 17th day of August
2006, in Mandaluyong City, Metro Manila, Philippines, by and
between:
PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, a government acquired asset
corporation, created and existing under the laws of the Republic
of the Philippines, with principal office address at EDSA corner
Reliance Street, Mandaluyong City, Philippines, duly represented
herein by its Chairman ARTHUR N. AGUILAR, pursuant to a
Board Resolution attached herewith as Annex “A” and made an
integral part hereof, hereinafter referred to as PNCC;
—and—
RADSTOCK SECURITIES LIMITED, a private corporation
incorporated in the British Virgin Islands, with office
address at Suite 1402 1 Duddell Street, Central Hongkong duly
represented herein by its Director, CARLOS G. DOMINGUEZ,
pursuant to a Board Resolution attached herewith as Annex “B”
and made an integral part hereof, hereinafter referred to as
RADSTOCK.
WITNESSETH:
WHEREAS, on January 15, 2001, RADSTOCK, as assignee of
Marubeni Corporation, filed a complaint for sum of money and
damages with applica
482
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liabilities.
Section 36 of PD 1445, enacted on 11 June 1978, has
been superseded by a later law—Section 20(1), Chapter
IV, Subtitle B, Title I, Book V of Executive Order No. 292
or the Administrative Code of 1987, which provides:
487
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(Boldfacing supplied)
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488
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489
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56 Rufino v. Endriga, G.R. Nos. 139554 and 139565, 21 July 2006, 496 SCRA
13.
57 Section 20(1), Chapter IV, Subtitle B, Title I, Book V of the Administrative
Code of 1987.
491
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58 464 Phil. 441, 453, 461462; 419 SCRA 363, 368 (2004).
492
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Maintain Toll Facilities in the North and South Luzon Toll Expressways and for
Other Purposes.
493
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494
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495
496
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497
Congress.
ASSOCIATE JUSTICE CARPIO:
x x x you mean to say there are exceptions that money
from the general fund can be spent by the Executive
without going t[hrough] Congress, or xxx is [that] the
absolute rule?
DEAN AGABIN:
Well, in so far as the general fund is concerned, that
is the absolute rule set aside by the National
Government.
ASSOCIATE JUSTICE CARPIO:
x x x you are saying this is general fund money
—the collection from the assets[?]
DEAN AGABIN:
Yes.64 (Emphasis supplied)
Forming part of the General Fund, the toll fees can only
be disposed of in accordance with the fundamental
principles governing financial transactions and operations
of any government agency, to wit: (1) no money shall be
paid out of the Treasury except in pursuance of an
appropriation made by law, as expressly mandated
by Section 29(1), Article VI of the Constitution; and
(2) government funds or property shall be spent or
used solely
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498
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499
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500
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67 See Guingona, Jr. v. Carague, G.R. No. 94571, 22 April 1991, 196 SCRA 221.
68 438 Phil. 72, 9698; 389 SCRA 353, 371372 (2002).
501
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504
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505
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506
DEAN AGABIN:
Correct, Your Honor.72 (Emphasis supplied)
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507
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508
xxxx
Section 7. Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of
the public domain.”
509
ATTY. AGRA:
It will be Radstock, Your Honor.
ASSOCIATE JUSTICE CARPIO:
So, if Radstock makes the assignment, it must own its
rights, otherwise, it cannot assign it, correct?
ATTY. AGRA:
Pursuant to the compromise agreement, once
approved, yes, Your Honors.
ASSOCIATE JUSTICE CARPIO:
So, you are saying that Radstock can own the
rights to ownership of the land?
ATTY. AGRA:
Yes, Your Honors.
ASSOCIATE JUSTICE CARPIO:
Yes?
ATTY. AGRA:
The premise, Your Honor, you mentioned a
while ago was, if this Court approves said
compromise (interrupted)
510
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512
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75 Article 1459 of the Civil Code provides: “The thing must be licit and
the vendor must have a right to transfer the ownership thereof at the time
it is delivered.” The vendor cannot transfer ownership of the thing if he
does not own the thing or own rights of ownership to the thing. The only
possible exception is in a short sale of securities or commodities, where the
seller borrows from the broker or third party the securities or commodities
the ownership of which is immediately transferred to the buyer. This is
feasible only when the subject matter of the transaction is a fungible
object.
76 See Casabuena v. Court of Appeals, 350 Phil. 237; 286 SCRA 594
(1998).
77 Section 79 of the Government Auditing Codes provides as follows:
“When government property has become unserviceable for any cause, or is
no longer needed, it shall, upon application of the officer accountable
therefor, be inspected by the head of the agency or his duly authorized
representative in
513
Circular provides:
V. MODE OF DISPOSAL/DIVESTMENT:—
This Commission recognizes the following modes of
disposal/divest
ment of assets and property of national
government agencies, local government units and government
owned or controlled corporations and their subsidiaries, aside
from other such modes as may be provided for by law.
1. Public Auction
Conformably to existing state policy, the divestment or
disposal of government property as contemplated herein
shall be undertaken primarily thru public auction. Such
mode of divestment or disposal shall observe and adhere to
established mechanics and procedures in public bidding, viz.:
a. adequate publicity and notification so as to attract the
greatest number of interested parties; (vide, Sec. 79, P.D. 1445)
b. sufficient time frame between publication and date of auction;
c. opportunity afforded to interested parties to inspect the
property or assets to be disposed of;
d. confidentiality of sealed proposals;
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514
“We do not see any infirmity in either the MOA or the SSA
executed between PIEDRAS and respondent banks. By virtue of
its shareholdings in OPMC, PIEDRAS was entitled to subscribe to
3,749,906,250 class “A” and 2,499,937,500 class “B” OPMC shares.
Admittedly, it was financially sound for PIEDRAS to exercise its
preemptive rights as an existing shareholder of OPMC lest its
proportionate shareholdings be diluted to its detriment. However,
PIEDRAS lacked the necessary funds to pay for the additional
subscription. Thus, it resorted to contract loans from respondent
banks to finance the payment of its additional subscription. The
mode of payment agreed upon by the parties was that the
payment would be made in the form of part of the shares
subscribed to by PIEDRAS. The OPMC shares therefore were
agreed upon by the parties to be equivalent payment for the
amount advanced by respondent banks. We see the wisdom in the
conditions of the loan transaction. In order to save PIEDRAS
and/or the government from the trouble of selling the shares in
order to raise funds to pay off the loans, an easier and more direct
way was devised in the form of the dacion en pago agreements.
Moreover, we agree with the Sandiganbayan that neither
PIEDRAS nor the government sustained any loss in these
transactions. In fact, after deducting the shares to be given to
respondent banks as payment for the shares, PIEDRAS stood to
gain about 1,540,781,554 class “A” and 710,550,000 class “B”
OPMC shares virtually for free. Indeed, the question that must be
asked is whether or not PIEDRAS, in the exercise of its pre
_______________
515
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516
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517
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518
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89 Id.
90 Id.
91 Article 1387. All contracts by virtue of which the debtor alienates
property by gratuitous title are presumed to have been entered into in fraud of
creditors, when the donor did not reserve sufficient property to pay all debts
contracted before the donation.
Alienations by onerous title are also presumed fraudulent when made by
persons against whom some judgment has been rendered in any instance or some
writ of attachment has been issued. The decision or attachment need not refer to
the property alienated, and need not have been obtained by the party seeking
rescission.
In addition to these presumptions, the design to defraud creditors may be
proved in any other manner recognized by law and of evidence.
519
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92 See China Banking Corporation v. Court of Appeals, 384 Phil. 116; 327
SCRA 378, 389 (2000).
93 21 Phil. 243 (1912), cited in China Banking Corporation v. Court of Appeals,
384 Phil. 116; 327 SCRA 378 (2000) and Caltex v. PNOC Shipping and Transport
Corporation, G.R. No. 150711, 10 August 2006, 498 SCRA 400.
520
521
TAX MATTERS
The Company was assessed by the Bureau of Internal Revenue (BIR) of
its deficiencies in various taxes. However, no provision for any liability
has been made yet in the Company’s financial statements.
• 1980 deficiency income tax, deficiency contractor’s tax and
deficiency documentary stamp tax assessments by the BIR
totaling P212.523 Million.
xxxx
• Deficiency business tax of P64 Million due the Belgian
Consortium, PNCC’s partner in its LRT Project.
• 1992 deficiency income tax, deficiency valueadded tax and
deficiency expanded withholding tax of P1.04 Billion which
was reduced to P709 Million after the Company’s written
protest.
xxxx
• 2002 deficiency internal revenue taxes totaling P72.916
Million.
x x x x.95 (Emphasis supplied)
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522
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523
224297 and
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524
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525
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526
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527
ATTY. AGRA:
Pursuant to the compromise agreement, once approved, yes, Your
Honors.
ASSOCIATE JUSTICE CARPIO:
So, you are saying that Radstock can own the rights to ownership of
the land?
ATTY. AGRA:
Yes, Your Honors.
ASSOCIATE JUSTICE CARPIO:
Yes?
ATTY. AGRA:
The premise, Your Honor, you mentioned a while ago was, if
this Court approves said compromise (interrupted).102
(Emphasis supplied)
This Court is not, and should never be, a rubber stamp for
litigants hankering to pocket public funds for their selfish
private gain. This Court is the ultimate guardian of the
public interest, the last bulwark against those who seek to
plunder the public coffers. This Court cannot, and must
never, bring itself down to the level of legitimizer of
violations of the Constitution, existing laws or public
policy.
Conclusion
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528
529
SO ORDERED.
CONCURRING OPINION
CARPIOMORALES, J.:
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531
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3 Id., at p. 11, where the Court affirmed the denial of the motion to
dismiss but reversed the denial of the motion to set aside and discharge
the order and writ of preliminary attachment.
4 Civil Code, Art. 1245 provides that the law of sales governs dation in
payment whereby property is alienated to the creditor in satisfaction of a
debt in money. Admittedly, the Compromise Agreement is essentially a
dacion en pago.
5 Executive Order No. 292, Book V, Title I, Subtitle B, Chapter IV, Sec.
20, par. 1.
532
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533
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534
CONCURRING OPINION
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LEONARDODE CASTRO, J.:
535
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2 G.R. Nos. 87710 and 96087, March 31, 1992, 207 SCRA 659.
536
537
539
540
“If error had been committed by the trial court, it was not of
the character of grave abuse that relief through the extraordinary
remedy of certiorari may be availed. Indeed, the grounds
relied upon by PNCC are matters that are better threshed
out during the trial since they can only be
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541
DISSENT
BERSAMIN, J.:
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4 Id., at p. 9.
542
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543
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3 Rollo, G.R. No. 178158, pp. 259271 (the resolution in G.R. No.
156887 dated November 22, 2006).
4 Id., at pp. 3143.
5 Id., at 326.
6 Id.
7 Rollo, G.R. No. 180428, pp. 342.
8 Id., at pp. 107140.
9 Id., at pp. 4546 (CA decision in CAG.R. SP No. 97982, penned by
Justice Pizarro, and concurred in by Justice Cruz and Justice Lampas
Peralta).
10 The narrative contained in the section Common Antecedents is
partly derived from the background facts rendered in Philippine National
Construction Corporation v. Hon. Amalia F. Dy, et al., G.R. No. 256887,
October 3, 2005, 472 SCRA 1.
544
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546
SO ORDERED.”
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547
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548
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549
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550
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551
Submissions
I
G.R. No. 178158
STRADEC seeks the reversal of the CA’s denial of its
motion for intervention to enable it to have the compromise
agreement between Radstock and PNCC declared void, or,
alternatively, to have the compromise agreement made
subject to the outcome of Civil Case No. 05882.
I believe and submit that STRADEC’s position is
untenable. Thus, I join the majority opinion in its rejection
of STRADEC’s intervention.
_______________
36 Rollo, G.R. No. 178158, pp. 265269 (CA decision dated January 25,
2007).
552
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553
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38 Nieto, Jr. v. Court of Appeals, G.R. No. 166984, August 7, 2007, 529
SCRA 285; citing Garcia v. David, 67 Phil. 279, 282283.
39 Big Country Ranch Corporation v. Court of Appeals, G.R. No.
102927, October 12, 1993, 227 SCRA 161, 165.
554
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555
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II
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556
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43 Rollo, G.R. No. 180428, pp. 4546 (CA Resolution in CAGR SP No.
97982).
44 Id., at pp. 344.
45 Id., at p. 46.
46 G.R. No. 148456, September 15, 2006, 502 SCRA 67, 70.
557
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558
_______________
559
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560
III
_______________
53 Yu v. Yukayguan, G.R. No. 177549, June 18, 2009, 589 SCRA 588.
54 PNCC v. Dy, G.R. No. 156887, October 3, 2005, 472 SCRA 1, 89.
561
abuse. The Order of April 19, 2001 which first denied the Motion
to Dismiss meticulously explained the legal and factual basis for
the trial court’s rejection of the four grounds raised by PNCC:
With respect to the first issue of whether or not the
instant action had already been barred by prescription, the
Court, after judicious examination of the environmental
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xxx
Lastly, the defendant contended that the plaintiff has no
legal capacity to sue and in support thereof it claims that
RADSTOCK is engaged in business in the Philippines
without any proof that it has a required license. This
argument is erroneous. The plaintiff in this case is suing on
an isolated transaction…. As correctly stated by the
Plaintiff, it does not intend to engage in any other business
in the Philippines except to sue and collect what has been
assigned to it by Marubeni Corporation.
If error had been committed by the trial court, it was not
of the character of grave abuse that relief through the
extraordinary remedy of certiorari may be availed. Indeed,
the grounds relied upon by PNCC are matters that are
better threshed out during the trial since they can only be
considered after evidence has been adduced and weighed.”
563
P100,000.00.56
I contend and hold that the cited law did not apply,
considering that the liability of PNCC to Radstock was not
yet settled at the time of the execution of the compromise
agreement.
In Benedicto v. Board of Administrators of Television
Stations and Guingona, Jr. v. PCGG,57 the Court clarified
that Section 20, Chapter 4, SubTitle B, Title 1, Book 5, of
Executive Order No. 292, was applicable only to a settled
claim or liability, to wit:
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564
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566
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567
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568
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569
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570
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571
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572
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573
574
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575
576
577
D
Toll Operation Certificate from TRB to PNCC Was Legal
Basis for PNCC to Collect and Appropriate Revenues
Generated from PNCCoperated Tollways and Its Share
in Gross Receipts of NLEX Tollway Development
Sison insists that upon the expiration of its legislative
franchise, PNCC could not validly dispose of the revenues
collected from its operated tollways and of its share in the
gross receipts of the tollway development and operation
contractors, because such revenues and receipts already
belonged to the National Government.
However, the fact is that the Manila North Tollway
Corporation (MNTC), a jointventure company between
PNCC and Metro Pacific Group, was granted a toll
operation certificate (TOC) by the Toll Regulatory Board
(TRB) authorizing MNTC to operate and maintain the
NLEX from 2005 to 2035 through its operations and
maintenance company, the Tollway Management
Corporation (TMC).76
Sison counters that the TOC was not the equivalent of
and could not replace the legislative franchise of PNCC
under P.D. No. 1849.
Sison’s arguments are not persuasive.
Under P.D. No. 1112,77 TRB has the following powers,
among others:
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578
not legally do. Its issuance of the TOC was proper, not
ultra vires, even if the effect was to permit PNCC, through
MNTC, to continue to operate the toll facilities.
In this jurisdiction, the power of administrative agencies
to issue operating permits or franchises to public utilities
has long been rec
_______________
579
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79 G.R. No. 119528, March 26, 1997, 270 SCRA 538, 550551.
80 Underlines supplied for emphasis.
81 G.R. No. 168914, July 4, 2007, 526 SCRA 465, 476.
578
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581
this time for the operation and maintenance of the NSLE, which
is already an existing toll facility. In other words, the right of
PNCC and its joint venture partner, after May 1, 2007, to operate
and maintain the existing NSLE will no longer be founded on its
legislative franchise which is not thereby extended, but on the
new authorization to be granted by the TRB pursuant to Section
3(e), abovequoted, of P.D. 1112.”84
It serves well to note, too, that the TOC was not for the
same project covered by PNCC’s legislative franchise under
P.D. No. 1894, but for a new project, the rehabilitation of
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582
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assets can start anew and pursue its plans to revitalize its
operations.”106
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590
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107 G.R. No. L21064, February 18, 1970, 31 SCRA 413, 422423.
591
“We look to the language of the document itself in search for its
meaning. We do not of course stop there, but that is where we
begin. It is to be assumed that the words in which constitutional
provisions are couched express the objective sought to be attained.
They are to be given their ordinary meaning except where
technical terms are employed in which case the significance thus
attached to them prevails. As the Constitution is not primarily a
lawyer’s document, it being essential for the rule of law to obtain
that it should ever be present in the people’s consciousness, its
language, as much as possible, should be understood in the sense
they have in common use. What it says according to the text of the
provision construed compels acceptance and negates the power of
the courts to alter it, based on the postulate that the framers and
the people mean what they say. Thus there are cases where the
need for construction is reduced to a minimum.”
“First, verba legis, that is, wherever possible, the words used in
the Constitution must be given their ordinary meaning except
where technical terms are employed. xxx.
xxx xxx xxx
Second, where there is ambiguity, ratio legis et anima. The
words of the Constitution should be interpreted in accordance
with the intent of the framers. xxx.
Finally, ut magis valeat quam pereat. The Constitution is to be
interpreted as a whole.”
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109 Samartino v. Raon, 433 Phil. 173, 189; 383 SCRA 664 (July 3,
2002).
593
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110 Morales v. Court of Appeals, G. R. No. 117228, June 19, 1997, 274
SCRA 282, 297300; IV Tolentino, Civil Code of the Philippines, p. 669
(1997).
111 Article 1441, Civil Code.
112 Ramos v. Ramos, No. L19872, December 3, 1974, 61 SCRA 284.
594
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final, to all intents and purposes, the FTAA must be deemed valid
and constitutional.”
596
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597
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598
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Yet, the majority would have the Court strike down the
resolution, and not give it effect, because it was null and
void. They opine that the PNCC Board approved a
transaction that was manifestly and grossly
disadvantageous to the National Government, and that
such transaction was even a corrupt and unlawful act.
They conclude that the resolution, being unlawful and a
criminal act, was void ab initio and could not be
implemented or in any way given effect by the Executive or
Judicial Branch of the Government.
I am not persuaded.
That its issuance might have been unwise or
disadvantageous to PNCC, which I do not concede, did not
invalidate Resolution No. BD0921000. The resolution,
being simply a recognition of a prior indebtedness in favor
of Marubeni and the Government, was clearly issued
within the corporation’s powers; hence, it was neither
illegal nor ultra vires. Indeed, had PNCC remained a
purely private corporation, no issue would be raised
against the propriety of its Board of Directors thereby
recognizing an indebtedness.
The majority rely heavily on the transcripts of the
Senate Committee hearings to buttress the imputation of
bad faith behind the passage of the board resolution that
recognized PNCC’s debts to Marubeni. They copiously
quote the privilege speech of Senator Franklin Drilon
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120 G.R. No. 89914, November 20, 1991, 203 SCRA 767, 784.
121 Romero v. Senator Estrada, G.R. No. 174105, April 2, 2009, 583
SCRA 396.
601
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122 Id.
123 G.R. No. 155001, January 21, 2004, 420 SCRA 575, 606.
602
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603
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127 Nordic Asia Limited v. Court of Appeals, 451 Phil. 482, 492493;
403 SCRA 390, 398 (2003).
128 Batama Farmer’s Cooperative Marketing Association, Inc. v. Hon.
Rosal, 149 Phil. 514, 524.
129 Rollo, G.R. 178158, pp. 254258.
130 People v. Fajardo, 373 Phil. 915, 925.
604
Petition granted.
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