G.R. No. 119292 , July 31, 1998.
REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioner, vs. SANDIGANBAYAN, IMELDA COJUANGCO, THE ESTATE OF RAMON COJUANGCO represented by IMELDA COJUANGCO, and PRIME HOLDINGS, INC., respondents.

FACTS

The Presidential Commission on Good Government (PCGG) issued two sequestration orders dated May 9, 1986: one against all properties of Prime Holdings, Inc. (PHI), and another over 111,415 shares of stock of the Philippine Telecommunications Investment Corporation (PTIC) registered in PHI’s name. Both orders were signed solely by PCGG Commissioner Mary Concepcion Bautista. On July 16, 1987, the PCGG filed a Complaint for reconveyance, reversion, accounting, restitution, and damages (Civil Case No. 0002) before the Sandiganbayan against various defendants, including the Marcos spouses, to recover alleged ill-gotten wealth, mentioning shares in PTIC and PLDT. The PCGG filed an amended complaint on April 23, 1990, including private respondents Imelda Cojuangco, the estate of Ramon Cojuangco, and PHI as defendants, alleging that their PLDT shares belonged to Ferdinand Marcos and his family. On May 4, 1993, private respondents filed a Motion to declare the sequestration order against PHI automatically lifted, arguing (1) the order was invalid for being signed by only one commissioner in violation of PCGG Rules requiring at least two, and (2) the PCGG failed to file the appropriate judicial action within the period prescribed by Section 26, Article XVIII of the 1987 Constitution . The Sandiganbayan granted the motion in a Resolution dated December 17, 1993, declaring the sequestration orders automatically lifted, and denied the PCGG’s motion for reconsideration in a Resolution dated August 29, 1994. The PCGG filed the instant petition for certiorari, alleging grave abuse of discretion.

ISSUE

1. Whether the sequestration orders are invalid for being signed by only one PCGG Commissioner.
2. Whether the sequestration orders were automatically lifted due to the PCGG’s failure to institute the proper judicial action within the period prescribed by the 1987 Constitution .

RULING

The Supreme Court dismissed the petition, affirming the Sandiganbayan’s Resolutions.
1. On the first issue, the Court ruled the sequestration orders were invalid. Section 3 of the PCGG Rules and Regulations explicitly requires that a writ of sequestration be issued “upon the authority of at least two Commissioners.” The two orders in question were signed only by Commissioner Bautista. The Court rejected the PCGG’s interpretation, based on its internal minutes, that verbal concurrence or authority reflected in meeting minutes sufficed, holding that the clear and mandatory language of the rule requires the authority of at least two commissioners, and the PCGG’s contrary interpretation was unreasonable. The letter to a law firm signed by two commissioners could not validate the defective sequestration orders.
2. On the second issue, the Court ruled the sequestration orders were automatically lifted. Section 26, Article XVIII of the 1987 Constitution requires that a sequestration or freeze order issued before its ratification (February 2, 1987) must be filed “in the proper court” within six months from its ratification, or by August 2, 1987. The PCGG filed Civil Case No. 0002 on July 16, 1987, but the complaint did not include PHI or the Cojuangcos as defendants. They were impleaded only on April 23, 1990, via an amended complaint, which was beyond the constitutional deadline. The Court held that the filing of a case against alleged stockholders (the Marcoses) is not the judicial action against the corporation (PHI) itself as required by the Constitution. The corporate personality is separate and distinct, and the action against the alleged beneficial owners does not satisfy the requirement for an action against the registered owner of the sequestered property. Therefore, the PCGG failed to file the appropriate judicial action against private respondents within the prescribed period, resulting in the automatic lifting of the sequestration orders.