Primary Holding

The assets of Arelma, S.A. are considered ill-gotten wealth and are rightly forfeited to the Republic; the Sandiganbayan did not err in granting the Motion for Partial Summary Judgment.

Background

This case involves the Republic's efforts to recover ill-gotten wealth allegedly acquired by the Marcoses during their time in power, specifically focusing on assets held by Arelma, S.A.

Facts

• 1. The Republic, through the PCGG, filed a petition to forfeit assets it claimed were illegally acquired by the Marcoses, including assets held by Arelma, S.A.
• 2. Arelma, S.A. was established by Ferdinand Marcos in 1972, maintaining an account with Merrill Lynch in New York.
• 3. The Republic alleged that these assets were disproportionate to the Marcoses' lawful income.
• 4. The Marcoses generally denied the allegations, claiming a lack of knowledge or information.
• 5. Documents found in Malacañang after the Marcoses fled the country detailed the establishment and operation of Arelma, S.A.
• 6. As of 1983, the assets of Arelma, Inc. amounted to $3,369,975.00.
• 7. The total lawful income of Ferdinand E. Marcos as President from 1966 to 1976 was P60,000 a year and from 1977 to 1985, P100,000 a year; while that of the former First Lady, Imelda R. Marcos, as Minister of Human Settlements from June 1976 to February 22-25, 1986 was P75,000 a year.

Arguments of the Petitioners

• 1. The forfeiture proceeding is criminal in nature, thus summary judgment is not allowed.
• 2. The Republic failed to comply with Section 3 of R.A. 1379 by not accurately detailing Marcos's income from 1940 to 1965 and other earnings.
• 3. Civil Case No. 0141 had already been terminated after the Swiss Deposits Decision.
• 4. There are genuine issues of fact that preclude the application of summary judgment.
• 5. The Sandiganbayan does not possess territorial jurisdiction over the res or the Arelma proceeds, which are held by Merrill Lynch in the United States.

Arguments of the Respondents

• 1. The forfeiture proceeding is civil in nature, therefore summary judgment is appropriate.
• 2. The Republic complied with Section 3 of R.A. 1379.
• 3. Civil Case No. 0141 has not been terminated, as it involves numerous other properties beyond the Swiss deposits.
• 4. Petitioners' denials are sham and do not raise genuine issues of fact.
• 5. The Sandiganbayan has the authority to rule on the character of the assets as ill-gotten, regardless of their location.

Issues

• 1. Is the forfeiture proceeding civil or criminal in nature?
• 2. Did the Republic comply with the requirements of R.A. 1379?
• 3. Was Civil Case No. 0141 terminated after the Swiss Deposits Decision?
• 4. Are there genuine issues of fact that preclude summary judgment?
• 5. Does the Sandiganbayan have jurisdiction over assets located abroad?

Ruling

• 1. The Supreme Court ruled that the forfeiture proceedings are civil in nature, making summary judgment appropriate.
• 2. The Republic sufficiently complied with the requirements of R.A. 1379.
• 3. Civil Case No. 0141 was not terminated by the Swiss Deposits Decision, as it covered other assets.
• 4. The Marcoses' denials were insufficient to raise genuine issues of fact, justifying summary judgment.
• 5. The Sandiganbayan has jurisdiction to determine whether assets are ill-gotten, even if those assets are located abroad.

Doctrines

• 1. Law of the Case: A legal question previously decided by an appellate court in the same case becomes binding in subsequent proceedings, provided the facts remain the same.
• 2. Summary Judgment: A procedural device used when there are no genuine issues of material fact, allowing a court to enter judgment without a full trial.
• 3. Actions in Rem/Quasi in Rem: Actions directed against property rather than a person, where jurisdiction is based on the location of the property.
• 4. Prima Facie Presumption of Ill-gotten Wealth: Under R.A. 1379, property acquired by a public officer during their incumbency that is manifestly disproportionate to their salary is presumed to be unlawfully acquired.
• 5. Negative Pregnant: A denial that implies an affirmation of the substantial facts in the pleading it responds to.

Key Excerpts

• 1. "The people and the State are entitled to favorable judgment, free from vexatious, capricious and oppressive delays."
• 2. "The Republic and the Commission have a unique interest in resolving the ownership of or claims to the Arelma assets and in determining if, and how, the assets should be used to compensate those persons who suffered grievous injury under Marcos."

Precedents Cited

• 1. Cabal v. Kapunan, 116 Phil. 1361 (1962): Distinguished, clarifying that forfeiture proceedings are quasi-criminal only in a limited sense, concerning self-incrimination.
• 2. Republic v. Sandiganbayan, G.R. No. 90529, 16 August 1991: Established that forfeiture proceedings are actions in rem and therefore civil in nature.
• 3. Republic v. Sandiganbayan (Swiss Deposits Case), 461 Phil. 598 (2003): Upheld the summary judgment on the Swiss deposits and served as a precedent for the current case.
• 4. Philippine Coconut Producers Federation, Inc. (COCOFED) v. Republic, G.R. Nos. 177857-58, 11 February 2010: Defined the doctrine of the law of the case.
• 5. Republic of the Philippines v. Pimentel, 553 U.S. 851 (2008): Discussed the history of the Arelma account and the Republic's claim to the assets in U.S. courts.
• 6. Yuchengco v. Sandiganbayan, 515 Phil. 1 (2006): Discussed the importance of summary judgment in weeding out sham claims or defenses at an early stage of the litigation.
• 7. Swezey v. Merill Lynch, Pierce, Fenner & Smith, Inc., 2011 NY Slip Op 05208 [87 AD3d 119] 16 June 2011: The foreign court agreed with the dismissal of the turnover proceeding against the Arelma assets initiated by alleged victims of human rights abuses during the Marcos regime.

Statutory and Constitutional Provisions

• 1. Republic Act No. 1379 (Forfeiture Law): Governs the forfeiture of unlawfully acquired property.
• 2. Executive Order Nos. 1, 2, and 14: Issued to recover ill-gotten wealth.
• 3. Rules of Court, Rule 35 (Summary Judgment): Provides for summary judgment when there are no genuine issues of material fact.
• 4. Rules of Court, Rule 36, Sec. 5 (Separate Judgments): Allows a court to render a separate judgment on a particular claim.