Posted by: Vincent Albien V. Arnado on 31 July 2018
FACTS:
FACTS:
In 1978, petitioner Rodolfo M. Cuenca and his family's holding company, petitioner CIC, negotiated and reached an agreement with respondents IRC and UHC, whereby petitioners Cuenca and CIC would purchase all the shares of stock and subscription rights of IRC in UHC for PhP 10,000,000 and assume IRC's unpaid subscription of PhP 30,000,000. Petitioners Cuenca and CIC were then the controlling stockholders of the Construction and Development Corporation of the Philippines (CDCP), now the Philippine National Construction Corporation (PNCC), Sta. Ines Melale Forest Products Corporation (Sta. Ines), and Resort Hotels Corporation (Resort Hotels). In order to build up UHC as his flagship company, petitioner Cuenca transferred to UHC the shares of stocks in CDCP, Sta. Ines, and Resort Hotels worth PhP 67,233,405, with UHC assuming Cuenca's various bank obligations, some or all of which were secured by pledges or liens on the stocks.
On October 21, 1978, petitioner Cuenca was elected Chairperson and President of UHC at a special stockholders' meeting in accordance with the acquisition plan, and through UHC, Cuenca continued to control and manage CDCP, Sta. Ines, and Resort Hotels. Pursuant to the acquisition plan and agreement with IRC, Cuenca and CIC transferred their shares of stock in CDCP, Sta. Ines, and Resort Hotels to UHC, which in turn paid PhP 10,000,000 to IRC. In addition, petitioners assumed IRC's unpaid subscription of PhP 30,000,000 in UHC. The only remaining matter to be accomplished was the transfer of the stocks and subscription rights of IRC in UHC to petitioners, but despite demand, IRC did not comply.
In 1986, the instant controversy between petitioners and respondent IRC was overtaken by dramatic political events. President Marcos was ousted in a bloodless revolution and left behind an unbelievably large amount of funds and assets that were sequestered by the new government of President Aquino through PCGG. In July 1987, because of Marcos nominee Jose Yao Campos' sworn statement, respondent PCGG directed Santos Luis Diego, President of IRC, to dissolve all the boards of directors of IRC's fully-owned subsidiaries. A year later, it turned over IRC and its subsidiary, UHC, to the Asset Privatization Trust (APT) for rehabilitation, conservation, or disposition, enabling APT to assign one share of stock in IRC and in each of its 25 subsidiaries, including UHC, to Paterno Bacani, Jr.
Amidst this state of affairs, petitioners filed the October 2, 1991 Complaint6 against IRC, UHC, APT, and Bacani before the Makati City RTC, which was docketed as Civil Case No. 91-2721, to compel IRC to transfer all its stock and subscription rights in UHC to them or order IRC and UHC to return and re-convey to them all the assets and shares of stock in CDCP, Sta. Ines, and Resort Hotels that they had transferred to UHC
On April 23, 1998, JUDGMENT is hereby rendered in favor of plaintiffs and as against defendants IRC and UHC who are hereby ordered to immediately return and reconvey to plaintiffs all of the shares of stocks and stock subscriptions in Philippine National Construction Corporation (formerly known as Construction and Development [Corporation] of the Philippines), Resort Hotels Corporation and Sta. Ines Melale Forest Products Corporation, including those transferred by plaintiffs to UHC such as the 24,780,746 shares in CDCP/PNCC, the 468,062 shares in Resort Hotels Corporation and the 23,748,932 shares in Sta. Ines Melale Forest Products Corporation plus all fruits thereof such as stock and cash dividends and stock splits.
Through its assailed Decision, the Court of Appeals reversed the Makati City RTC's Decision, granted the petition filed by PCGG, and dismissed the instant case for lack of jurisdiction. The appellate court ratiocinated that the Sandiganbayan had exclusive jurisdiction to hear the instant case involving petitioners and the sequestered respondent corporations.
ISSUES:
Whether or not the respondent UHC may have been sequestered did not divest the RTC of its jurisdiction over the subject matter of the petitioners complaint?
HELD:
Negative. Jurisdiction over the subject matter is conferred by the Constitution or by law while jurisdiction over the person is acquired by his/her voluntary submission to the authority of the court or through the exercise of its coercive processes. Petitioners contend that even if UHC was indeed sequestered, jurisdiction over the subject matter of petitioners' Complaint for enforcement or rescission of contract between petitioners and respondents belonged to the RTC and not the Sandiganbayan. A rigorous examination of the antecedent facts and existing records at hand shows that Sandiganbayan has exclusive jurisdiction over the instant case. President Corazon C. Aquino issued the following Executive Orders which amended PD 1606 in so far as the jurisdiction of the Sandiganbayan over civil and criminal cases instituted and prosecuted by the PCGG is concerned, viz:
a) EO 1, entitled "Creating the Presidential Commission on Good Government," dated February 28, 1986;
b) EO 2, entitled "Regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, Their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees," dated March 12, 1986;
c) EO 14, entitled "Defining the Jurisdiction over Cases Involving the Ill-gotten Wealth of Former President Ferdinand E. Marcos, Mrs. Imelda R. Marcos, Members of their Immediate Family, Close Relatives, Subordinates, Close and/or Business Associates, Dummies, Agents and Nominees," dated May 7, 1986; and
d) EO 14-A, entitled "Amending Executive Order No. 14," dated August 18, 1986.
Bearing on the jurisdiction of the Sandiganbayan over cases of ill-gotten wealth, EO 14, Secs. 1 and 2 provide:
SECTION 1. Any provision of the law to the contrary notwithstanding, the Presidential Commission on Good Government with the assistance of the Office of the Solicitor General and other government agencies, is hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1, dated February 28, 1986 and Executive Order No. 2, dated March 12, 1986, as may be warranted by its findings.
SECTION 2. The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof.
In the light of the foregoing provisions, it is clear that it is the Sandiganbayan and not the Makati City RTC that has jurisdiction over the disputed UHC and PNCC shares, being the alleged "ill-gotten wealth" of former President Ferdinand E. Marcos and petitioner Cuenca. The fact that the Makati City RTC civil case involved the performance of contractual obligations relative to the UHC shares is of no importance.
HELD:
Negative. Jurisdiction over the subject matter is conferred by the Constitution or by law while jurisdiction over the person is acquired by his/her voluntary submission to the authority of the court or through the exercise of its coercive processes. Petitioners contend that even if UHC was indeed sequestered, jurisdiction over the subject matter of petitioners' Complaint for enforcement or rescission of contract between petitioners and respondents belonged to the RTC and not the Sandiganbayan. A rigorous examination of the antecedent facts and existing records at hand shows that Sandiganbayan has exclusive jurisdiction over the instant case. President Corazon C. Aquino issued the following Executive Orders which amended PD 1606 in so far as the jurisdiction of the Sandiganbayan over civil and criminal cases instituted and prosecuted by the PCGG is concerned, viz:
a) EO 1, entitled "Creating the Presidential Commission on Good Government," dated February 28, 1986;
b) EO 2, entitled "Regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, Their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees," dated March 12, 1986;
c) EO 14, entitled "Defining the Jurisdiction over Cases Involving the Ill-gotten Wealth of Former President Ferdinand E. Marcos, Mrs. Imelda R. Marcos, Members of their Immediate Family, Close Relatives, Subordinates, Close and/or Business Associates, Dummies, Agents and Nominees," dated May 7, 1986; and
d) EO 14-A, entitled "Amending Executive Order No. 14," dated August 18, 1986.
Bearing on the jurisdiction of the Sandiganbayan over cases of ill-gotten wealth, EO 14, Secs. 1 and 2 provide:
SECTION 1. Any provision of the law to the contrary notwithstanding, the Presidential Commission on Good Government with the assistance of the Office of the Solicitor General and other government agencies, is hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1, dated February 28, 1986 and Executive Order No. 2, dated March 12, 1986, as may be warranted by its findings.
SECTION 2. The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof.
In the light of the foregoing provisions, it is clear that it is the Sandiganbayan and not the Makati City RTC that has jurisdiction over the disputed UHC and PNCC shares, being the alleged "ill-gotten wealth" of former President Ferdinand E. Marcos and petitioner Cuenca. The fact that the Makati City RTC civil case involved the performance of contractual obligations relative to the UHC shares is of no importance.
