EN BANC.
.
FRANCISCO I.
CHAVEZ,
Petitioner,
G.R.
No.
133250
November 11, 2003
-versus-
PUBLIC ESTATES
AUTHORITY
AND AMARI
COASTAL
BAYDEVELOPMENT
CORPORATION,
Respondents.
chanroblesvirtualawlibrary
R E S O L U T I O
N
CARPIO,
J.:
This court is asked to
legitimize a government contract that conveyed to a private entity
157.84
hectares of reclaimed public lands along Roxas Boulevard in Metro
Manila
at the negotiated price of P1,200 per square meter. However, published
reports place the market price of land near that area at that time at a
high of P90,000 per square meter.[1]The
difference in price is a staggering P140.16 billion, equivalent to the
budget of the entire Judiciary for seventeen years and more than three
times the Marcos Swiss deposits that this Court forfeited in favor of
the
government.chanrobles virtuallaw libraryred
Many worry to death
that the private investors will lose their investments, at most not
more
than one-half billion pesos in legitimate expenses,[2]
if this Court voids the contract. No one seems to worry about the more
than tens of billion pesos that the hapless Filipino people will lose
if
the contract is allowed to stand. There are those who question these
figures,
but the questions arise only because the private entity somehow managed
to inveigle the government to sell the reclaimed lands without public
bidding
in patent violation of the Government Auditing Code.chanrobles virtuallaw libraryred
Fortunately for the
Filipino people, two Senate Committees, the Senate Blue Ribbon
Committee
and the Committee on Accountability of Public Officers, conducted
extensive
public hearings to determine the actual market value of the public
lands
sold to the private entity. The Senate Committees established the
clear,
indisputable and unalterable fact that the sale of the public lands is
grossly and unconscionably undervalued based on official documents
submitted
by the proper government agencies during the Senate investigation. We
quote
the joint report of these two Senate Committees, Senate Committee
Report
No. 560, as approved by the Senate in plenary session on 27 September
1997:[3]chanrobles virtuallaw libraryred
The Consideration
for the Property
PEA, under the JVA,
obligated itself to convey title and possession over the Property,
consisting
of approximately One Million Five Hundred Seventy Eight Thousand Four
Hundred
Forty One (1,578,441) Square Meters for a total consideration of One
Billion
Eight Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two
Hundred (P1,894,129,200.00) Pesos, or a price of One Thousand Two
Hundred
(P1,200.00) Pesos per square meter.chanrobles virtuallaw libraryred
According to the zonal
valuation of the Bureau of Internal Revenue, the value of the Property
is Seven Thousand Eight Hundred Pesos (P7,800.00) per square meter. The
Municipal Assessor of Parañaque, Metro Manila, where the
Property
is located, pegs the market value of the Property at Six Thousand Pesos
(P6,000.00) per square meter. Based on these alone, the price at which
PEA agreed to convey the property is a pittance. And PEA cannot claim
ignorance
of these valuations, at least not those of the Municipal Assessors'
office,
since it has been trying to convince the Office of the Municipal
Assessor
of Parañaque to reduce the valuation of various reclaimed
properties
thereat in order for PEA to save on accrued real property taxes.chanrobles virtuallaw libraryred
PEA's justification
for the purchase price are various appraisal reports, particularly the
following:
(1) An
appraisal
by Vic T. Salinas Realty and Consultancy Services concluding that the
Property
is worth P500.00 per square meter for the smallest island and P750.00
per
square meter for the two other islands, or a total of P1,170,000.00 as
of 22 February 1995;chanrobles virtuallaw libraryred
(2) An appraisal
by
Valencia Appraisal Corporation concluding that the Property is worth
P850
per square meter for Island I, P800 per square meter for Island II and
P600 per square meter for the smallest island, or a total of
P1,289,732,000,
also as of 22 February 1995; andchanrobles virtuallaw libraryred
(3) An Appraisal
by
Asian Appraisal Company, Inc. (AACI), stating that the Property is
worth
approximately P1,000 per square meter for Island I, P950 per square
meter
for Island II and P600 per square meter for Island III, or a total of
P1,518,805,000
as of 27 February 1995.chanrobles virtuallaw libraryred
The credibility of the
foregoing appraisals, however, are [sic] greatly impaired by a
subsequent
appraisal report of AACI stating that the property is worth P4,500.00
per
square meter as of 26 March 1996. Such discrepancies in the appraised
value
as appearing in two different reports by the same appraisal company
submitted
within a span of one year render all such appraisal reports unworthy of
even the slightest consideration. Furthermore, the appraisal report
submitted
by the Commission on Audit estimates the value of the Property to be
approximately
P33,673,000,000.00, or P21,333.07 per square meter.chanrobles virtuallaw libraryred
There were also other
offers made for the property from other parties which indicate that the
Property has been undervalued by PEA. For instance, on 06 March 1995,
Mr.
Young D. See, President of Saeil Heavy Industries Co., Ltd., (South
Korea),
offered to buy the property at P1,400.00 and expressed its willingness
to issue a stand-by letter of credit worth $10 million. PEA did not
consider
this offer and instead finalized the JVA with AMARI. Other offers were
made on various dates by Aspac Management and Development Group Inc.
(for
P1,600 per square meter), Universal Dragon Corporation (for P1,600 per
square meter), Cleene Far East Manila Incorporated and Hyosan Prime
Construction
Co. Ltd. which had prepared an Irrevocable Clean Letter of Credit for
P100,000,000.chanrobles virtuallaw libraryred
In addition, AMARI agreed
to pay huge commissions and bonuses to various persons, amounting to
P1,596,863,050.00
(P1,754,707,150.00 if the bonus is included), as will be discussed
fully
below, which indicate that AMARI itself believed the market value to be
much higher than the agreed purchase price. If such commissions are
added
to the purchase price, AMARI's acquisition cost for the Property will
add-up
to P3,490,992,250.00 (excluding the bonus). If AMARI was willing to pay
such amount for the Property, why was PEA willing to sell for only
P1,894,129,200.00,
making the Government stand to lose approximately P1,596,863,050.00?chanrobles virtuallaw libraryred
x
x
x
x x
x
x x x
Even if we simply assume
that the market value of the Property is half of the market value fixed
by the Municipal Assessors Office of Parañaque for lands along
Roxas
Boulevard, or P3,000.00 per square meter, the Government now stands to
lose approximately P2,841,193,800.00. But an even better assumption
would
be that the value of the Property is P4,500.00 per square meter, as per
the AACI appraisal report dated 26 March 1996, since this is the
valuation
used to justify the issuance of P4 billion worth of shares of stock of
Centennial City Inc. (CCI) in exchange for 4,800,000 AMARI shares with
a total par value of only P480,000,000.00. With such valuation, the
Government's
loss will amount to P5,208,855,300.00.chanrobles virtuallaw libraryred
Clearly, the purchase
price agreed to by PEA is way below the actual value of the Property,
thereby
subjecting the Government to grave injury and enabling AMARI to enjoy
tremendous
benefit and advantage. (Emphasis supplied.) chanrobles virtuallaw libraryred
The Senate Committee
Report No. 560 attached the following official documents from the
Bureau
of Internal Revenue, the Municipal Assessor of Parañaque, Metro
Manila, and the Commission on Audit:chanrobles virtuallaw libraryred
1. Annex
"M,"
Certified True Copy of BIR Zonal Valuations as certified by Antonio F.
Montemayor, Revenue District Officer. This official document fixed the
market value of the 157.84 hectares at P7,800 per square meter.chanrobles virtuallaw libraryred
2. Annex "N,"
Certification
of Soledad S. Medina-Cue, Municipal Assessor, Parañaque, dated
10
December 1996. This official document fixed the market value at P6,000
per square meter.chanrobles virtuallaw libraryred
3. Exhibit
"I-Engr.
Santiago," the Appraisal Report of the Commission on Audit. This
official
document fixed the market value at P21,333.07 per square meter.
Whether based on the
official
appraisal of the BIR, the Municipal Assessor or the Commission on
Audit,
the P1,200 per square meter purchase price, or a total of P1.894
billion
for the 157.84 hectares of government lands, is grossly and
unconscionably
undervalued. The authoritative appraisal, of course, is that of the
Commission
on Audit which valued the 157.84 hectares at P21,333.07 per square
meter
or a total of P33.673 billion. Thus, based on the official appraisal of
the Commission on Audit, the independent constitutional body that
safeguards
government assets, the actual loss to the Filipino people is a shocking
P31.779 billion.chanrobles virtuallaw libraryred
This gargantuan monetary
anomaly, aptly earning the epithet "Grandmother of All Scams,"[4]
is not the major defect of this government contract. The major flaw is
not even the P1.754 billion in commissions the Senate Committees
discovered
the private entity paid to various persons to secure the contract,[5]
described in Senate Report No. 560 as follows:chanrobles virtuallaw libraryred
A
Letter-Agreement
dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy
for and in behalf of AMARI, on the one hand, and stockholders of AMARI
namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun Siong
(a.k.a. Frank Chua), on the other, sets forth various payments AMARI
paid
or agreed to pay the aforesaid stockholders by way of fees for
"professional
efforts and services in successfully negotiating and securing for AMARI
the Joint Venture Agreement", as follows:chanrobles virtuallaw libraryred
Form of
Payment
Paid/Payable On Amount
Manager's
Checks 28
April
1995
P400,000,000.00
Manager's Checks
Upon
signing of
letter
262,500,000.00
10 Post Dated
Checks
(PDCs) 60 days from date of
letter
127,000,000.00
24 PDCs 31 Aug.
'95
to 31 Jan.
'98
150,000,000.00
48 PDCs Monthly,
over
a 12-month pd. from date of
letter
357,363,050.00
Cash bonus When
sale
of land begins not
exceeding
157,844,100.00
Developed land
from
Project Upon completion of each Costing
phase
300,000,000.00
----------------------------
TOTAL P1,754,707,150.00
======================
Mr. Luis Benitez of
SGV,
the external auditors of AMARI, testified that said Letter-Agreement
was
approved by the AMARI Board.[6]
(Emphasis
supplied.)
The private entity that
purchased the reclaimed lands for P1.894 billion expressly admitted
before
the Senate Committees that it spent P1.754 billion in commissions to
pay
various individuals for "professional efforts and services in
successfully
negotiating and securing" the contract. By any legal or moral
yardstick,
the P1.754 billion in commissions obviously constitutes bribe money.
Nonetheless,
there are those who insist that the billions in investments of the
private
entity deserve protection by this Court. Should this Court establish a
new doctrine by elevating grease money to the status of legitimate
investments
deserving of protection by the law? Should this Court reward the
patently
illegal and grossly unethical business practice of the private entity
in
securing the contract? Should we allow those with hands dripping with
dirty
money equitable relief from this Court?chanrobles virtuallaw libraryred
Despite these revolting
anomalies unearthed by the Senate Committees, the fatal flaw of this
contract
is that it glaringly violates provisions of the Constitution expressly
prohibiting the alienation of lands of the public domain.chanrobles virtuallaw libraryred
Thus, we now come to
the resolution of the second Motions for Reconsideration[7]
filed by public respondent Public Estates Authority ("PEA") and private
respondent Amari Coastal Bay Development Corporation ("Amari"). As
correctly
pointed out by petitioner Francisco I. Chavez in his Consolidated
Comment,[8]
the second Motions for Reconsideration raise no new issues.chanrobles virtuallaw libraryred
However, the Supplement
to "Separate Opinion, Concurring and Dissenting" of Justice Josue N.
Bellosillo
brings to the Court's attention the resolutions of this court on 3
February
1965 and 24 June 1966 in L-21870 entitled "Manuel O. Ponce, et al. v.
Hon.
Amador Gomez, et al." and No. L-22669 entitled "Manuel O. Ponce, et al.
v. The City of Cebu, et al." ("Ponce Cases"). In effect, the Supplement
to the Dissenting Opinion claims that these two Resolutions serve as
authority
that a single private corporation like Amari may acquire hundreds of
hectares
of submerged lands, as well as reclaimed submerged lands, within Manila
Bay under the Amended Joint Venture Agreement ("Amended JVA").chanrobles virtuallaw libraryred
We find the cited Ponce
Cases inapplicable to the instant case.cralaw:red
First, as Justice Bellosillo
himself states in his supplement to his dissent, the Ponce Cases admit
that "submerged lands still belong to the National Government."[9]
The correct formulation, however, is that submerged lands are owned by
the State and are inalienable. Section 2, Article XII of the 1987
Constitution
provides:chanrobles virtuallaw libraryred
All lands
of
the public domain, waters, minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries, forests or timber,
wildlife,
flora and fauna, and other natural resources are owned by the State.
With
the exception of agricultural lands, all other natural resources shall
not be alienated x x x. (Emphasis supplied.) chanrobles virtuallaw libraryred
Submerged lands, like
the
waters (sea or bay) above them, are part of the State's inalienable
natural
resources. Submerged lands are property of public dominion, absolutely
inalienable and outside the commerce of man.[10]
This is also true with respect to foreshore lands. Any sale of
submerged
or foreshore lands is void being contrary to the Constitution.[11]chanrobles virtuallaw libraryred
This is why the Cebu
City ordinance merely granted Essel, Inc. an "irrevocable option" to
purchase
the foreshore lands after the reclamation and did not actually sell to
Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the
Ponce Cases the option to purchase referred to reclaimed lands, and not
to foreshore lands which are inalienable. Reclaimed lands are no longer
foreshore or submerged lands, and thus may qualify as alienable
agricultural
lands of the public domain provided the requirements of public land
laws
are met.chanrobles virtuallaw libraryred
In the instant case,
the bulk of the lands subject of the Amended JVA are still submerged
lands
even to this very day, and therefore inalienable and outside the
commerce
of man. Of the 750 hectares subject of the Amended JVA, 592.15 hectares
or 78% of the total area are still submerged, permanently under the
waters
of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the
submerged
lands even before their actual reclamation, although the documentation
of the deed of transfer and issuance of the certificates of title would
be made only after actual reclamation.chanrobles virtuallaw libraryred
The Amended JVA states
that the PEA "hereby contributes to the Joint Venture its rights and
privileges
to perform Rawland Reclamation and Horizontal Development as well as
own
the Reclamation Area."[12]
The Amended JVA further states that "the sharing of the Joint Venture
Proceeds
shall be based on the ratio of thirty percent (30%) for PEA and seventy
percent (70%) for AMARI."[13]
The Amended JVA also provides that the PEA "hereby designates AMARI to
perform PEA's rights and privileges to reclaim, own and develop the
Reclamation
Area."[14]
In short, under the Amended JVA the PEA contributed its rights,
privileges
and ownership over the Reclamation Area to the Joint Venture which is
70%
owned by Amari. Moreover, the PEA delegated to Amari the right and
privilege
to reclaim the submerged lands.chanrobles virtuallaw libraryred
The Amended JVA mandates
that the PEA had "the duty to execute without delay the necessary deed
of transfer or conveyance of the title pertaining to AMARI's Land share
based on the Land Allocation Plan."[15]
The Amended JVA also provides that "PEA, when requested in writing by
AMARI,
shall then cause the issuance and delivery of the proper certificates
of
title covering AMARI's Land Share in the name of AMARI,
x
x x "[16]chanrobles virtuallaw libraryred
In the Ponce Cases,
the City of Cebu retained ownership of the reclaimed foreshore lands
and
Essel, Inc. only had an "irrevocable option" to purchase portions of
the
foreshore lands once actually reclaimed. In sharp contrast, in the
instant
case ownership of the reclamation area, including the submerged lands,
was immediately transferred to the joint venture. Amari immediately
acquired
the absolute right to own 70% percent of the reclamation area, with the
deeds of transfer to be documented and the certificates of title to be
issued upon actual reclamation. Amari's right to own the submerged
lands
is immediately effective upon the approval of the Amended JVA and not
merely
an option to be exercised in the future if and when the reclamation is
actually realized. The submerged lands, being inalienable and outside
the
commerce of man, could not be the subject of the commercial
transactions
specified in the Amended JVA.chanrobles virtuallaw libraryred
Second, in the Ponce
Cases the Cebu City ordinance granted Essel, Inc. an "irrevocable
option"
to purchase from Cebu City not more than 70% of the reclaimed lands.
The
ownership of the reclaimed lands remained with Cebu City until Essel,
Inc.
exercised its option to purchase. With the subsequent enactment of the
Government Auditing Code (Presidential Decree No. 1445) on 11 June
1978,
any sale of government land must be made only through public bidding.
Thus,
such an "irrevocable option" to purchase government land would now be
void
being contrary to the requirement of public bidding expressly required
in Section 79[17]
of PD No. 1445. This requirement of public bidding is reiterated in
Section
379[18]
of the 1991 Local Government Code.[19]
Obviously, the ingenious reclamation scheme adopted in the Cebu City
ordinance
can no longer be followed in view of the requirement of public bidding
in the sale of government lands. In the instant case, the Amended JVA
is
a negotiated contract which clearly contravenes Section 79 of P. D. No.
1445.chanrobles virtuallaw libraryred
Third, Republic Act
No. 1899 authorized municipalities and chartered cities to reclaim
foreshore
lands. The two Resolutions in the Ponce Cases upheld the Cebu City
ordinance
only with respect to foreshore areas, and nullified the same with
respect
to submerged areas. Thus, the 27 June 1965 Resolution made the
injunction
of the trial court against the City of Cebu "permanent
insofar
x x x as the area outside or beyond the
foreshore
land proper is concerned."chanrobles virtuallaw libraryred
As we held in the 1998
case of Republic Real Estate Corporation v. Court of Appeals,[20]
citing the Ponce Cases, RA No. 1899 applies only to foreshore lands,
not
to submerged lands. In his concurring opinion in Republic Real Estate
Corporation,
Justice Reynato S. Puno stated that under Commonwealth Act No. 141,
"foreshore
and lands under water were not to be alienated and sold to private
parties,"
and that such lands "remained property of the State." Justice Puno
emphasized
that "Commonwealth Act No. 141 has remained in effect at present." The
instant case involves principally submerged lands within Manila Bay. On
this score, the Ponce Cases, which were decided based on RA No. 1899,
are
not applicable to the instant case.chanrobles virtuallaw libraryred
Fourth, the Ponce Cases
involve the authority of the City of Cebu to reclaim foreshore areas
pursuant
to a general law, RA No. 1899. The City of Cebu is a public corporation
and is qualified, under the 1935,
1973,
and 1987
Constitutions,
to hold alienable or even inalienable lands of the public domain. There
is no dispute that a public corporation is not covered by the
constitutional
ban on acquisition of alienable public lands. Both the 9 July 2002
Decision
and the 6 May 2003 Resolution of this Court in the instant case
expressly
recognize this.chanrobles virtuallaw libraryred
Cebu City is an end
user government agency, just like the Bases Conversion and Development
Authority or the Department of Foreign Affairs.[21]
Thus, Congress may by law transfer public lands to the City of Cebu to
be used for municipal purposes, which may be public or patrimonial.
Lands
thus acquired by the City of Cebu for a public purpose may not be sold
to private parties. However, lands so acquired by the City of Cebu for
a patrimonial purpose may be sold to private parties, including private
corporations.cralaw:red
However, in the instant
case the PEA is not an end user agency with respect to the reclaimed
lands
under the Amended JVA. As we explained in the 6 May 2003 Resolution:
PEA is the
central implementing agency tasked to undertake reclamation projects
nationwide.
PEA took the place of the Department of Environment and Natural
Resources
("DENR" for brevity) as the government agency charged with leasing or
selling
all reclaimed lands of the public domain. In the hands of PEA, which
took
over the leasing and selling functions of DENR, reclaimed foreshore (or
submerged lands) lands are public lands in the same manner that these
same
lands would have been public lands in the hands of DENR. (Emphasis
supplied.) chanrobles virtuallaw libraryred
Our 9 July 2002
Decision
explained the rationale for treating the PEA in the same manner as the
DENR with respect to reclaimed foreshore or submerged lands in this
wise:
To allow
vast
areas of reclaimed lands of the public domain to be transferred to PEA
as private lands will sanction a gross violation of the constitutional
ban on private corporations from acquiring any kind of alienable land
of
the public domain. PEA will simply turn around, as PEA has now done
under
the Amended JVA, and transfer several hundreds of hectares of these
reclaimed
and still to be reclaimed lands to a single private corporation in only
one transaction. This scheme will effectively nullify the
constitutional
ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership
of alienable lands of the public domain among Filipinos, now numbering
over 80 million strong. (Emphasis supplied.) chanrobles virtuallaw libraryred
Finally, the Ponce
Cases
were decided under the 1935 Constitution which allowed private
corporations
to acquire alienable lands of the public domain. However, the 1973
Constitution prohibited private corporations from acquiring
alienable
lands of the public domain, and the 1987
Constitution reiterated this prohibition. Obviously, the Ponce
Cases
cannot serve as authority for a private corporation to acquire
alienable
public lands, much less submerged lands, since under the present
Constitution
a private corporation like Amari is barred from acquiring alienable
lands
of the public domain.chanrobles virtuallaw libraryred
Clearly, the facts in
the Ponce Cases are different from the facts in the instant case.
Moreover,
the governing constitutional and statutory provisions have changed
since
the Ponce Cases were disposed of in 1965 and 1966 through minute
Resolutions
of a divided (6 to 5) Court.chanrobles virtuallaw libraryred
This Resolution does
not prejudice any innocent third party purchaser of the reclaimed lands
covered by the Amended JVA. Neither the PEA nor Amari has sold any
portion
of the reclaimed lands to third parties. Title to the reclaimed lands
remains
with the PEA. As we stated in our 9 July 2002 Decision:chanrobles virtuallaw libraryred
In the
instant
case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as
well as proprietary functions. No patent or certificate of title has
been
issued to any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust of
the
instant petition is that PEA's certificates of title should remain with
PEA, and the land covered by these certificates, being alienable lands
of the public domain, should not be sold to a private corporation.chanrobles virtuallaw libraryred
As we held in our
9
July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and
3, Article XII of the 1987 Constitution." In our 6 May 2003 Resolution,
we DENIED with FINALITY respondents' Motions for Reconsideration.
Litigations
must end some time. It is now time to write finis to this "Grandmother
of All Scams."chanrobles virtuallaw libraryred
WHEREFORE, the second
Motions
for Reconsideration filed by Public Estates Authority and Amari Coastal
Bay Development Corporation are DENIED for being prohibited pleadings.
In any event, these Motions for Reconsideration have no merit. No
further
pleadings shall be allowed from any of the parties.chanrobles virtuallaw libraryred
SO ORDERED.cralaw:red
Davide, Jr, C.J.,
Panganiban, Austria-Martinez, Carpio Morales and Callejo, Sr., JJ., concur.
Bellosillo, J., voted
to grant reconsideration.
Puno, J., maintained
previous qualified opinion.
Vitug, J., see
concurring
opinion.
Quisumbing, J., voted
to allow reconsideration.
Ynares-Santiago,
J., maintained her
previous dissent.
Sandoval-Gutierrez
and Corona, JJ.,maintained
their dissent.
Azcuna, J., took no
part.
Tinga, J., see
dissenting
opinion
____________________________
Endnotes:
[1]
See "The Grandmother of All Scams" by Sheila S. Coronel and Ellen
Tordesillas,
18-20 March 1998, Philippine Center for Investigative Journalism. This
report won the 1st Prize in the 1998 JVO Investigative Journalism
Awards.chanrobles virtuallaw libraryred
[2]
6 May 2003 Resolution, p. 13.chanrobles virtuallaw libraryred
[3]
3. PEA's Memorandum dated 4 August 1999 quoted extensively, in its
Statement
of Facts and the Case, the Statement of Facts in Senate Committee
Report
No. 560 dated 16 September 1997. Moreover, the existence of this report
is a matter of judicial notice pursuant to Section 1, Rule 129 of the
Rules
of Court which provides, "A court shall take judicial notice, without
the
introduction of evidence, of x x x
the official acts of the legislature."chanrobles virtuallaw libraryred
[4]
9 July 2002 Decision, p. 4.chanrobles virtuallaw libraryred
[5]
Senate Committee Report No. 560, p. 48.chanrobles virtuallaw libraryred
[6]
A more detailed discussion on this matter in Senate Report No. 560
reads
as follows:chanroblesvirtuallawlibrary
The Commissionschanrobles virtuallaw libraryred
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai
Karnasuta
and Emmanuel Sy for and in behalf of AMARI, on the one hand, and
stockholders
of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua
Hun
Siong (a.k.a. Frank Chua), on the other, sets forth various payments
AMARI
paid or agreed to pay the aforesaid stockholders by way of fees for
"professional
efforts and services in successfully negotiating and securing for AMARI
the Joint Venture Agreement", as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
Form of
Payment
Paid/Payable On Amount
Manager's
Checks 28 April
1995
P400,000,000.00
Manager's
Checks Upon signing of
letter
262,500,000.00
10
Post Dated Checks (PDCs) 60 days from date of
letter
127,000,000.00
24
PDCs 31 Aug. '95 to 31 Jan.
'98
150,000,000.00
48
PDCs Monthly, over a 12-month pd. from date of
letter
357,363,050.00
Cash
bonus When sale of land begins not
exceeding
157,844,100.00
Developed
land from Project Upon completion of each Costing phase
300,000,000.00
TOTAL P1,754,707,150.00
=======================
Mr.
Luis Benitez of SGV, the external auditors of AMARI, testified that
said
Letter-Agreement was approved by the AMARI Board.chanrobles virtuallaw libraryred
On
the first payment of P400 million, records show that P300 million was
paid
in manager's checks of Citibank-Makati, while the balance of P100
million
was deposited to the account of the two Chinese in a Hongkong bank. On
the basis of a Memorandum Order dated April 28, 1995 issued by Messrs.
Karnasuta and Emmanuel Sy, and upon the instruction of Messrs. Chin San
Cordova and Chua Hun Siong, 31 manager's checks in the total amount of
P300 million were issued by Citibank-Makati in favor of a Mr. George
Triviño,
a Dominican Republic national, broken down as follows:chanroblesvirtuallawlibrary
1) Twenty-nine (29) manager's checks at P10 million each;chanrobles virtuallaw libraryred
2) One (1) manager's check at P7 million; andchanrobles virtuallaw libraryred
3) One (1) manager's check at P3 million.chanrobles virtuallaw libraryred
All these checks were indorsed by Mr. Triviño. Mr. Sy could not
satisfactorily answer why Mr. Triviño was made payee of the
Manager's
Checks when he had nothing to do with the transactions. Neither could
he
provide information regarding the said Mr. Triviño.chanrobles virtuallaw libraryred
Mr.
Emmanuel Sy admitted signing several blank checks as special request
from
Messrs. Co and Chua and issuing said checks as follows:chanroblesvirtuallawlibrary
1) Ten (10) Manager's checks dated 60 days from the June 9 letter
amounting
to P127 million;chanrobles virtuallaw libraryred
2) Twenty-four (24) blank checks amounting to P150 million dated from
31
August 1995 up to 31 January 1998; and
3) Forty (40) blank checks amounting to P357 million.chanrobles virtuallaw libraryred
In this regard, the pertinent portion of the 9 June 1995
letter-agreement
provides as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"3. Upon signing of this letter-agreement AMARI shall (a) pay to you
(in
cash in the form of Bank Manager's Checks) the sum of Two Hundred Sixty
Two Million Five Hundred Thousand Pesos (Pesos 262,500,000) and (b) pay
and deliver to you the following checks:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"3.1 Ten (10) checks dated sixty (60) days from date of this letter
agreement
in the total amount of One Hundred Twenty Seven Million Pesos (Pesos
127,000,000);
"3.2 Twenty-Four (24) checks in the total amount of One Hundred Fifty
Million
Pesos (Pesos 150,000,000) as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
DUE DATE OF
CHECK
AMOUNT
August 31,
1995
6,250,000
March 31,
1996
6,250,000
April 30,
1996
6,250,000
May 31,
1996
6,250,000
June 30,
1996
6,250,000
July 31,
1996
6,250,000
Au gust 31,
1996
6,250,000
S eptember 30,
1996
6,250,000
October 31,
1996
6,250,000
November 30,
1996
6,250,000
December 31,
1996
6,250,000
January 31,
1997
6,250,000
February 28,
1997
6,250,000
March 31,
1997
6,250,000
April 30,
1997
6,250,000
May 31,
1997
6,250,000
June 30,
1997
6,250,000
July 31,
1997
6,250,000
August 31,
1997
6,250,000
September 30,
1997
6,250,000
October 31,
1997
6,250,000
November 30,
1997
6,250,000
December 31,
1997
6,250,000
January 31,
1998
6,250,000
Total P150,000,000
================
"3.3 Forty Eight (48) checks in the total amount of Three Hundred Fifty
Seven Million Three Hundred Sixty Three Thousand Fifty Pesos (Pesos
357,363,050)
payable over a period of twelve (12) months as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"Each monthly payment to consist of Four (4) checks, three (3) checks
of
which shall each bear the amount of P7,250,000 and one (1) check of
which
shall bear the amount of P8,000,000 for a total monthly amount of
P29,750,000.
These monthly payment of four (4) checks each shall be dated the last
date
of the thirteen, fourteen, fifteen, sixteen, seventeen, eighteen,
nineteen,
twenty, twenty-one, twenty-two, twenty-three, and twenty-four months
from
the date of this letter agreement. The last issued check hereunder
shall
bear the sum of P8,363,050."chanrobles virtuallaw libraryred
The Provisional Receipt shows that Mr. Chin San Cordova and Mr. Chua
Hun
Siong received the amount of P896,863,050.00 as of 09 June 1995. Based
on the submitted photocopies of the returned checks issued by AMARI
vis-a-vis
item 3(b) of the quoted Letter-Agreement, the following persons were
made
payees: Emmanuel Sy, Manuel Sy, Sy Pio Lato, International
Merchandising
and Development Corporation, Golden Star Industrial Corporation, Chin
San
Cordova, EY, and Wee Te Lato. Other payments were made payable to Cash
(bearer instruments). Each person was thus named payee to the following
amounts:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
1.
Emmanuel Sy: Citibank Check No. 000019 dated 10/31/96
P6,250,000
2.
Manuel Sy: Citibank Check No. 000007 dated 8/8/95
12,700,000
3.
Sy Pio Lato: Citibank Check No. 000008 dated 8/8/95
12,700,000
000009 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000010 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
4.
International Merchandising and Development Corporation:
Citibank
Check No. 000013 dated 4/30/96 6,250,000
000014 dated 5/31/96 6,250,000chanrobles virtuallaw libraryred
000015 dated 6/30/96 6,250,000chanrobles virtuallaw libraryred
000016 dated 7/31/96 6,250,000chanrobles virtuallaw libraryred
000045 dated 9/30/96 7,250,000chanrobles virtuallaw libraryred
5.
Golden Star Industrial Corporation: Citibank Check No.
000018
dated 9/30/96 6,250,000
6.
Chin San Cordova: Citibank Check No. 000041 dated 8/31/96
7,250,000
000043 dated 9/30/96 7,250,000chanrobles virtuallaw libraryred
7.
EY: Citibank Check No. 000047 dated 10/31/96 7,250,000
000049 dated 10/31/96 7,250,000chanrobles virtuallaw libraryred
8.
Wee Te Lato: Citibank Check No. 000048 dated 10/31/96
7,250,000
9.
Bearer Instruments: CASH: Citibank Check No. 000001 dated
8/8/95
12,700,000
000002 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000003 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000004 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000005 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000006 dated 8/8/95 12,700,000chanrobles virtuallaw libraryred
000012 dated 3/31/96 6,250,000chanrobles virtuallaw libraryred
000017 dated 8/31/96 6,250,000chanrobles virtuallaw libraryred
000039 dated 8/31/96 7,250,000chanrobles virtuallaw libraryred
000040 dated 8/31/96 7,250,000chanrobles virtuallaw libraryred
000042 dated 8/31/96 8,000,000chanrobles virtuallaw libraryred
000044 dated 9/30/96 7,250,000chanrobles virtuallaw libraryred
000046 dated 9/30/96 7,250,000chanrobles virtuallaw libraryred
000050 dated 10/31/96 8,000,000chanrobles virtuallaw libraryred
10.
Payee 's Name Not Legible: Citibank Check No. 000011 dated
8/31/96 6,250,000chanrobles virtuallaw libraryred
On the other hand, Ms. Aurora Montano, a cousin of Mr. Justiniano
Montano
IV, was asked by a Mr. Ben Cuevo if she knew anybody from PEA, and she
answered: "Yes, I know Mr. Justiniano Montano IV. " For this answer,
and
for introducing the AMARI representative to Mr. Montano, she received
P10
million in cash and P20 million in postdated manager's checks in the
office
of Mr. Benito Co and in the presence of, aside from Mr. Benito Co, Mr.
Ben Cuevo and Mr. Frank Chua. Ms. Montano, however, insisted that she
actually
received only P10 million.chanrobles virtuallaw libraryred
Ms. Montano furthermore admitted that, through Mr. Ben Cuevo, she met
Messrs.
Chin San Cordova and Chua Hun Siong in 1994 for this transaction.chanrobles virtuallaw libraryred
In Executive Session, Mr. Ben Cuevo admitted to having encashed two
checks
at Pilipinas Bank, worth P12.5 million. According to him, the two
checks
form part of the P150 million worth of post-dated checks (PDCs), with a
face value of P6.25 million per check, described in the
Letter-Agreement.
Of this P150 million, Mr. Cuevo actually received five (5) PDCs worth
P31
million, but he was only able to encash 2 checks at P12.5 million.chanrobles virtuallaw libraryred
Still in Executive Session, Mr. Ben Cuevo also admitted receiving a
check
worth P6.25 million payable to his company, International Merchandising
and Development Corporation. This was deposited in his Current Account
No. 604010562-A, and the amount was transferred by credit memo to Mr.
Montano
IV's account at Pilipinas Bank.chanrobles virtuallaw libraryred
Mr. Montano IV admitted that he has an account with Pilipinas Bank, but
invoked his constitutional right against self-incrimination when asked
if he received the amount of P6.25 million transferred to his account.
The Pilipinas Bank Credit Advice dated May 6, 1996, marked as Exhibit
1-Montano
IV, indicating the transfer of the amount of P6.25 million was
presented
by Senator Drilon. Once or twice, a certain Ms. Polly Tragico
accompanied
Mr. Montano IV to withdraw funds from Pilipinas Bank-Pavilion.chanrobles virtuallaw libraryred
[7]
Both filed on 26 May 2003. On 6 June 2003 Amari filed a Supplement to
its
second Motion for Reconsideration.chanrobles virtuallaw libraryred
[8]
Filed on 19 August 2003.chanrobles virtuallaw libraryred
[9]
Decision dated 17 January 1964 of Judge Amador E. Gomez. Also quoted in
Justice Josue N. Bellosillo's Supplement to Separate Opinion,
Concurring
and Dissenting.
[10]
Sections 2 and 3, Article XII of the 1987 Constitution.chanrobles virtuallaw libraryred
[11]
Article 112, Civil Code of the Philippines.chanrobles virtuallaw libraryred
[12]
Section 3.2 (a), Amended JVA.chanrobles virtuallaw libraryred
[13]
Section 3.3 (a), Amended JVA.chanrobles virtuallaw libraryred
[14]
Section 2.2, Amended JVA.chanrobles virtuallaw libraryred
[15]
Section 5.2 (c), Amended JVA.chanrobles virtuallaw libraryred
[16]
Ibid.chanrobles virtuallaw libraryred
[17]
17. SECTION 79. Destruction or sale of unserviceable property. — 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 the
presence of the auditor concerned and, if found to be valueless or
unsalable,
it may be destroyed in their presence. If found to be valuable, it may
be sold at public auction to the highest bidder under the supervision
of
the proper committee on awards or similar body in the presence of the
auditor
concerned or other duly authorized representative of the Commission,
after
advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or
where the value of the property does not warrant the expense of
publication,
by notices posted for a like period in at least three public places in
the locality where the property is to be sold. In the event that the
public
auction fails, the property may be sold at a private sale at such price
as may be fixed by the same committee or body concerned and approved by
the Commission.
[18]
SECTION 379. Property Disposal. — When property of any local government
unit has become unserviceable for any cause or is no longer needed, it
shall upon application of the officer accountable therefor, be
inspected
and appraised by the provincial, city or municipal auditor, as the case
may be, or his duly authorized representative or that of the Commission
on Audit and, if found valueless or unusable, shall be destroyed in the
presence of the inspecting officer.chanrobles virtuallaw libraryred
If found valuable, the same shall be sold at public auction to the
highest
bidder under the supervision of the committee on awards and in the
presence
of the provincial, city or municipal auditor or his duly authorized
representative.
Notice of the public auction shall be posted in at least three (3)
publicly
accessible and conspicuous places, and if the acquisition cost exceeds
One hundred thousand pesos (P100,000.00) in the case of provinces and
cities,
and Fifty thousand pesos (P50,000.00) in the case of municipalities,
notice
of auction shall be published at least two (2) times within a
reasonable
period in a newspaper of general circulation in the locality.chanrobles virtuallaw libraryred
[19]
Under Section 380 of the 1991 Local Government Code, local governments
can sell real property through negotiated sale only with the approval
of
the Commission on Audit. Under paragraph 2 (a) of COA Circular No.
89-296,
on "Sale Thru Negotiation," a negotiated sale may be resorted to only
if
"[T]here was a failure of public auction." The Commission on Audit
enforces
the express requirement in Section 79 of the Government Auditing Code
that
a negotiated sale is possible only after there is a failure of public
auction.chanrobles virtuallaw libraryred
[20]
359 Phil. 530 (1998).chanrobles virtuallaw libraryred
[21]
Laurel v. Garcia, G.R. No. 92013, 25 July 1990, 187 SCRA 797.chanrobles virtuallaw libraryred |