Philippine Supreme Court Jurisprudence > Year 1995 > March 1995 Decisions > G.R. No. 106718 March 20, 1995 : GREGORIO MA. ARANETA III vs. SANDIGANBAYAN, ET AL.:

VITUG, J.:

The principal issue posed in this petition is whether or not respondent Presidential Commission on Good Government ("PCGG") has the authority to conduct preliminary investigation specifically over the acts complained of by the Philippine National Bank ("PNB"), the National Investment and Development Corporation ("NIDC") and the Pantranco North Express, Inc. ("PNEI"), i.e., the sale of PNEI assets to North Express Transport, Inc. ("NETI"), and to file the corresponding information for violation of Republic Act ("R.A.") No. 3019, also known as the Anti-Graft and Corrupt Practices Act, against herein petitioner. The Sandiganbayan has held that the PCGG is sufficiently clothed with such authority. Maintaining the contrary, Gregorio Araneta III has lodged this petition for Certiorari and prohibition, with a prayer for temporary restraining order, to set aside (a) the 11th June 1992 Resolution of the Sandiganbayan denying his omnibus motion to quash the amended information against him or to refer the case to the Ombudsman for re-investigation or preliminary investigation and (b) the 14th August 1992 Resolution rejecting a subsequent motion for reconsideration. nadchanroblesvirtuallawlibrary

The antecedents of the case may be narrated thusly:nadchanroblesvirtualawlibrary

Upon receipt of a complaint by the PNB, the NIDC and the PNEI, the PCGG conducted a preliminary investigation on the supposed transfer of a major portion of the assets of PNEI to NETI, a newly organized corporation principally owned and controlled by Araneta III, a son-in-law of the late President Ferdinand E. Marcos, under certain terms and conditions that made it possible to permit PNEI assets, including those which were not included in a projected sale to NETI, to be prematurely delivered to the latter enabling it to operate said assets even before the execution of the purchase agreement. During the investigation, Araneta III, who was on "forced" exile abroad, appeared through counsel and moved for an extension of time to file his counter-affidavit and other evidence conditioned on his return. This motion was denied by the PCGG.

After wrapping up its preliminary investigation against averred close associates of the late President, that included, besides herein petitioner, Fernando Balatbat, Jr., Lorenzo Vergara, Ramon Aviado, Jr., Placido Mapa, Jr., Dominador Lopez, Jr., Fernando Maramag, Jr., and Jose Crisanto, Jr., the PCGG filed its information with the Sandiganbayan.

The amended 1 information filed on 20 January 1987 and captioned, "Violation of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended)," read:nadchanroblesvirtualawlibrary

"That on or about and during the period from March 1985 and March 1986, in Metro Manila, Philippines, and within the jurisdiction of the Honorable Sandiganbayan, Accused Placido L. Mapa, Jr., J. Lorenzo Vergara, Ramon F. Aviado, Jr., Dominador Lopez, Jr., Fernando Maramag, Jr., Jose C. Crisanto, Jr., acting in various capacities as Management Officials of the Philippine National Bank (PNB), National Investment and Development Corporation (NIDC) and/or Pantranco North Express Inc. (PNEI), all government owned and controlled corporations, as well as Dolores Potenciano of BLTB, acting in concert in the performance of their duties, in utter neglect of their fiduciary responsibilities, and with intent to gain, conspiring and confederating with one another and with accused Gregorio Ma. Araneta III, son-in-law of former President Ferdinand E. Marcos and therefore related to the deposed President by affinity within the third degree, and Fernando Balatbat, did then and there, wilfully and unlawfully, with manifest partiality and evident bad faith without proper board resolution and in disregard of better offers, promote and facilitate the sale of a major portion of the public utility assets of the Pantranco North Express, Inc. for a consideration of SEVEN HUNDRED SEVENTY-FIVE MILLION (P775,000,000.00) PESOS, Philippine currency, to the North Express Transport Inc. (NETI), which the accused knew to be a newly organized paper corporation with a purported paid-up capital of only FIVE MILLION (P5,000,000.00) PESOS and owned and controlled by accused Gregorio Ma. Araneta III, by misleading, inducing and/or unduly influencing the Boards of Directors of PNB, NIDC and PNEI into approving a Memorandum of Agreement and later a Purchase Agreement with manifestly and grossly disadvantageous terms and conditions which made possible the premature delivery of said PNEI assets to NETI without any down payment, and which, inter alia, allowed NETI to operate PNEI's franchise and utilize, even before the execution of the said Purchase Agreement, not only the PNEI assets subject of the proposed sale, but also other utility buses and properties of PNEI not covered by the sale, thereby allowing NETI to derive an income from said operation between the period of actual delivery and the execution of the Purchase Agreement of the sum of EIGHTY FIVE MILLION SIX HUNDRED EIGHTY-NINE THOUSAND, ONE HUNDRED EIGHTY (P85,689, 180.00) PESOS before actual payment of the agreed FIFTY-FIVE MILLION (P55,000,000.00) PESOS down payment, thereby giving accused Gregorio Ma. Araneta III unwarranted benefits, advantages and/or preferences and causing undue injury to the damage and prejudice of the Government in the amount of FOUR HUNDRED MILLION (P400.000.000.00) PESOS and such other amounts as may be awarded by the Court." 2

Araneta III's co-accused, Fernando Balatbat, moved to quash the amended information on the ground that the PCGG had no authority to conduct the investigation and to file the information on the ground that the crime charged was merely an ordinary graft case and not one that relates to the recovery of ill-gotten wealth. Balatbat's motion was denied by the Sandiganbayan in its resolution of 11 February 1987. In a petition for Certiorari before this Court, docketed G.R. No. 78314, Balatbat questioned Sandiganbayan's denial. In a resolution, dated 21 May 1987, 3 this Court dismissed the petition. This dismissal paved the way for all the accused, with the exception of Araneta III, to be arraigned before the Sandiganbayan. After the prosecution had submitted its evidence and had rested its case, the accused filed their respective demurrer to the evidence.

When the official ban against his return to the country was lifted, some time in the latter part of 1991, petitioner came back. 4 Forthwith, Araneta III posted bail for his provisional release. On 18 December 1991, prior to his arraignment, Araneta III filed an omnibus motion to quash the amended information or to refer the case to the Ombudsman for reinvestigation or preliminary investigation. He averred that the PCGG did not have the legal authority to file the information for alleged graft and corruption under Republic Act ("R.A.") 3019, as amended, citing the decisions of this Court in Cruz, Jr., vs. Sandiganbayan, 5 and Cojuangco, Jr., vs. PCGG. 6

In its now challenged resolutions, dated 11 June and 14 August 1992, the Sandiganbayan denied petitioner's motion to quash the amended information or to refer the case to the Ombudsman for reinvestigation or preliminary investigation. nadchanroblesvirtuallawlibrary

Petitioner, in the instant petition, submits the following issues:nadchanroblesvirtualawlibrary

"I. Whether or not the Sandiganbayan acted with grave abuse of discretion, amounting to lack of or in excess of jurisdiction, when

"(a) it ruled the PCGG has the power and authority to conduct the preliminary investigation of and file an ordinary graft case under R.A. 3019, contrary to and in violation of doctrines clearly enunciated in Cojuangco, Jr. vs. PCGG, 190 SCRA 226 and Cruz, Jr. vs. Sandiganbayan, 194 SCRA 474;

"(b) it ruled that an ordinary graft case captioned

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