People of the Philippines vs. Eduardo M. Cojuangco, Jr.

A preliminary investigation conducted by the PCGG is void for violation of due process where the PCGG itself gathered the evidence, filed a civil complaint based on the same acts, and then conducted the preliminary investigation or reinvestigation of the criminal complaint; it cannot preside with the cold neutrality of an impartial judge. The resulting Information is null and void, and the defect is not cured by the Sandiganbayan's subsequent finding of probable cause.

The PCGG is the government agency that, under Executive Order No. 14 as amended, was mandated to file cases involving the ill-gotten wealth of former President Ferdinand E. Marcos and his family before the Sandiganbayan. Respondent Eduardo M. Cojuangco, Jr. was charged as a private individual and close associate of Marcos with violation of Section 4(b) in relation to Section 3(h) of Republic Act No. 3019 for allegedly acting as a nominee or dummy in acquiring shares in Bulletin Today Publishing Company and Liwayway Publishing, Inc. The dispute unfolded against the backdrop of Cojuangco vs. Presidential Commission on Good Government, where the Court had previously declared void, on due process grounds, the PCGG's preliminary investigations in Criminal Cases Nos. 14398 and 14399.

On 27 November 1989, the PCGG filed an Information with the Sandiganbayan charging Eduardo M. Cojuangco, Jr. with violation of Section 4(b) in relation to Section 3(h) of Republic Act No. 3019. The Information alleged that from 1973 to 1985, in Metro Manila, Cojuangco, as a private individual and close associate of former President Ferdinand E. Marcos, willfully and unlawfully acted as nominee and/or dummy of Marcos in acquiring shares of stock in Bulletin Today Publishing Company and Liwayway Publishing, Inc., thereby inducing or causing Marcos to participate in the management and control of, or have pecuniary or financial interest in, those corporations.

Earlier, on 20 July 1987, the PCGG had filed a civil complaint for reconveyance, reversion, accounting, restitution and damages against Cojuangco and several other persons before the Sandiganbayan, docketed as Civil Case PCG No. 0022. The complaint alleged that Cojuangco, together with Cesar C. Zalamea, acted as dummy, nominee and/or agent of Ferdinand and Imelda Marcos in acquiring substantial shares in Bulletin Publishing Corporation in order to prevent disclosure and recovery of illegally obtained assets. The complaint was verified by PCGG chairperson Ramon A. Diaz and filed with Solicitor General Francisco I. Chavez and Assistant Solicitor General Ramon S. Desuasido. The acts alleged in that civil action also formed the basis of the Information in Criminal Case No. 14161.

After the Sandiganbayan initially denied the ex parte motion for a warrant of arrest for lack of probable cause, and after the Supreme Court dismissed the PCGG's certiorari petition while allowing further proceedings, the PCGG through its Security and Investigation Department gathered additional evidence against Cojuangco. This included audited financial statements, a summary of Bulletin stockholders, a board resolution, and several Philtrust checks issued by Bulletin Publishing Corporation to Cesar Zalamea, Jose Y. Campos, and Cojuangco. These documents became the basis for the PCGG's reinvestigation and amendment of the Information.

The original Information was amended to allege that Marcos unlawfully acquired shares in Bulletin Publishing Corporation representing about 54% of its equity, originally apportioned and issued in the names of Cesar Zalamea, Jose Y. Campos, and Ramon Cojuangco, who acted as his nominees and/or dummies; that Marcos, with the active participation and/or indispensable cooperation of Ramon Cojuangco and in conspiracy with Eduardo Cojuangco, Jr., cancelled or caused the cancellation of the shares issued to Ramon Cojuangco and transferred them to Eduardo Cojuangco, Jr.; and that Eduardo Cojuangco, Jr., as a private individual conspiring with Zalamea and Campos and acting as substitute nominee and/or dummy, continued to act as Marcos's nominee and/or dummy, thereby causing Marcos to maintain beneficial ownership of the controlling interest in, and to participate directly or indirectly in the management and control of, the corporation despite constitutional and statutory prohibition. The Sandiganbayan admitted the Amended Information and directed the issuance of a warrant of arrest.

In the proceedings that followed, the PCGG filed a Memorandum citing Executive Order No. 14, as amended, to support its mandate and the Sandiganbayan's jurisdiction. Cojuangco filed a Reply Memorandum assailing the preliminary investigation and the Information based on Cojuangco vs. Presidential Commission on Good Government, arguing that the same factual circumstances were present. The Sandiganbayan found that the PCGG itself had gathered the evidence and filed the complaint for preliminary investigation, and that the same entity conducted the preliminary investigation; it declared the investigation and Information null and void. The factual circumstances it relied on included the PCGG's earlier civil complaint based on the same acts and its gathering of additional evidence, which showed that the PCGG had already formed conclusions before the preliminary investigation.

• Authority under E.O. No. 14: Petitioners argued that the PCGG was authorized to carry out the preliminary investigation against respondent in Criminal Case No. 14161 under Executive Order No. 14.
• Law of the Case: Petitioners maintained that the validity of the preliminary investigation conducted by the PCGG had been affirmed by the Supreme Court in its Resolutions in G.R. Nos. 91741 and 93884, and that this finding constituted the law of the case and could not be disturbed.
• Probable Cause as Validation: Petitioners argued that the Sandiganbayan's finding of probable cause leading to the issuance of a warrant of arrest against respondent confirmed that he had not been deprived of an impartial judge during the preliminary investigation proceedings.

• Due Process under Cojuangco: Respondent assailed the preliminary investigation conducted by the PCGG and the Information filed against him on the basis of the Supreme Court's pronouncements in Cojuangco vs. Presidential Commission on Good Government.
• Identity of Circumstances: Respondent argued that the factual circumstances leading to the Court's Decision in Cojuangco were likewise present in his case.

• Validity of PCGG Preliminary Investigation and Information: Whether the Sandiganbayan erred when it declared null and void the preliminary investigation conducted by the PCGG and the Information filed pursuant to that investigation in Criminal Case No. 14161.
• Authority under E.O. No. 14: Whether the PCGG was authorized under Executive Order No. 14 to conduct the preliminary investigation against respondent.
• Law of the Case: Whether the Supreme Court's prior Resolutions in G.R. Nos. 91741 and 93884 affirmed the validity of the PCGG's preliminary investigation and constituted the law of the case.
• Effect of Probable Cause Finding: Whether the Sandiganbayan's earlier finding of probable cause and issuance of a warrant of arrest validated the preliminary investigation and cured any violation of respondent's right to due process.

• Validity of PCGG Preliminary Investigation and Information: No. The Sandiganbayan correctly declared the preliminary investigation and the Information null and void because the PCGG had gathered evidence and filed a civil complaint based on the same acts, violating due process.
• Authority under E.O. No. 14: No. The Petitions were denied notwithstanding the claimed authority under Executive Order No. 14; the preliminary investigation was void on due process grounds.
• Law of the Case: No. The prior Resolutions in G.R. Nos. 91741 and 93884 neither affirmed nor recognized the validity of the PCGG's preliminary investigation and were silent on the issue, so no law of the case was established.
• Effect of Probable Cause Finding: No. The Sandiganbayan's earlier finding of probable cause and issuance of a warrant of arrest did not validate the preliminary investigation or cure the due process violation; any action taken pursuant to the void Information was void and ineffective.

• Validity of PCGG Preliminary Investigation and Information: The Court applied Cojuangco vs. Presidential Commission on Good Government, where the PCGG's preliminary investigation in Criminal Cases Nos. 14398 and 14399 was declared null and void on due process grounds. In that case, before the preliminary investigation, the PCGG had gathered evidence against the respondent, issued a sequestration order, and filed a civil case for recovery of ill-gotten wealth based on the same facts involved in the criminal cases. The Court found that the PCGG could not have acted with the cold neutrality of an impartial judge because it had already formed conclusions on the matter. The same circumstances obtained here. The PCGG filed an Information against respondent for violation of R.A. 3019, alleging that he acted as nominee or dummy of Marcos in acquiring shares in Bulletin Today Publishing Company and Liwayway Publishing, Inc. Earlier, on 20 July 1987, the PCGG had filed a civil complaint for reconveyance, reversion, accounting, restitution and damages against respondent and others before the Sandiganbayan, docketed as Civil Case PCG No. 0022, alleging that he acted with Cesar Zalamea as dummy, nominee and/or agent of the Marcoses in acquiring substantial shares in Bulletin Publishing Corporation. The acts alleged in that civil action also formed the basis of the Information. The PCGG, through its Security and Investigation Department, also gathered additional evidence, including financial statements and checks, which became the basis of its reinvestigation and amendment of the Information. Because the PCGG initiated a civil complaint for the same acts, it had already formed its conclusions before conducting the preliminary investigation; because it gathered the additional evidence itself, the reinvestigation could not have been the fair and impartial review contemplated by law. The preliminary investigation and the Information were therefore void.
• Authority under E.O. No. 14: The Petitions were denied notwithstanding the PCGG's reliance on Executive Order No. 14, as amended, which it cited as its mandate to file cases involving the ill-gotten wealth of former President Marcos and his family before the Sandiganbayan. The ruling rested on the due process violation arising from the PCGG's dual role as evidence-gatherer and complainant, on one hand, and preliminary investigator, on the other.
• Law of the Case: The Court found no merit in the argument that the prior Resolutions in G.R. Nos. 91741 and 93884 recognized the validity of the PCGG's preliminary investigation. In G.R. No. 91741, the Court declined to interfere with the Sandiganbayan's finding that there was no probable cause to hold respondent liable for violation of R.A. 3019, and affirmed the Sandiganbayan's decision to allow the PCGG 60 days within which to conduct further proceedings in support of the Information. That pronouncement did not per se affirm the validity of the preliminary investigation; the PCGG's participation in gathering evidence and filing a civil case against respondent based on the same acts alleged in the Information had not been brought to the Court's attention at that time. The directive to conduct further proceedings could not be considered a license for the PCGG itself to gather evidence against respondent prior to conducting a reinvestigation. In G.R. No. 93884, the only issue brought before and resolved by the Court was whether the Sandiganbayan had acted with grave abuse of discretion in finding probable cause against respondent based on the Amended Information filed by the PCGG. The purported nullity of the Information was raised only in respondent's Motion for Reconsideration and, having been belatedly raised, was not passed upon in the Court's Resolution dated 29 January 2002. Since these Resolutions were silent on the validity of the PCGG's preliminary investigation, there was no pronouncement that could be considered the law of the case; the Sandiganbayan did not err in making its own determination of the issue.
• Effect of Probable Cause Finding: The Court rejected the contention that the Sandiganbayan's finding of probable cause to issue a warrant of arrest against respondent validated the preliminary investigation and proved that he did not suffer a violation of his right to due process. As a general rule, defects in the preliminary investigation proceedings, or even the absence thereof, do not render an Information null and void. An exception exists for cases involving violations of the right to due process. In People vs. Sierra, Jr., the Court held that only where an accused is held to answer for a criminal offense in an arbitrary or oppressive manner is there a disregard of due process, and the requirement that the proceeding be unjust or unreasonable must be met; this did not rule out cases where the infirmity could be predicated on a showing that the disregard of the procedural safeguard infected the prosecution with unfairness. The principle followed is that where there is a violation of basic constitutional rights, courts are ousted from jurisdiction. The violation of a party's right to due process raises a serious jurisdictional issue that cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. As a consequence of the nullity of the Information, any action taken by the Sandiganbayan pursuant thereto, including its initial determination of probable cause against respondent, was void and ineffective. A ruling on probable cause could not validate, much less cure, the fatal defect in the preliminary investigation or in the Information filed by the PCGG. The records of the case were therefore to be forwarded to the Ombudsman, who has primary jurisdiction over cases of this nature, for the conduct of a preliminary investigation and for appropriate action.

• Cold Neutrality of an Impartial Judge in Preliminary Investigation — A law enforcer who conducted the criminal investigation, gathered the evidence, and thereafter filed the complaint for preliminary investigation cannot be allowed to conduct the preliminary investigation of its own complaint; one cannot be a prosecutor and judge at the same time. The Court applied this doctrine to the PCGG, which had gathered evidence, filed a civil complaint based on the same acts, and then conducted the preliminary investigation and reinvestigation, rendering the proceedings void for violation of due process.
• Due Process Violation as a Jurisdictional Defect — Where there is a violation of basic constitutional rights, courts are ousted from jurisdiction. The violation of a party's right to due process raises a serious jurisdictional issue that cannot be glossed over or disregarded at will, and a decision rendered in disregard of that right is void for lack of jurisdiction. The Court applied this to hold that the Sandiganbayan's actions pursuant to the void Information, including its probable cause finding, were void and ineffective.
• General Rule on Defects in Preliminary Investigation and Its Due Process Exception — As a general rule, defects in the preliminary investigation proceedings, or even the absence thereof, do not render an Information null and void. An exception exists for cases involving violations of the right to due process, such as where the accused is held to answer in an arbitrary or oppressive manner or the disregard of the procedural safeguard infects the prosecution with unfairness. The due process violation in this case brought it within the exception.
• Law of the Case — A prior ruling constitutes the law of the case only as to matters actually raised and resolved. The Court held that the prior Resolutions in G.R. Nos. 91741 and 93884 did not establish the law of the case on the validity of the PCGG's preliminary investigation because they were silent on that issue and the nullity of the Information was not timely raised in G.R. No. 93884.
• Primary Jurisdiction of the Ombudsman — The Ombudsman, as an independent constitutional officer, has primary jurisdiction over cases of this nature. The Court directed the PCGG to transmit the Complaint and records to the Ombudsman for the conduct of a preliminary investigation and appropriate action.

• "In our criminal justice system, the law enforcer who conducted the criminal investigation, gathered the evidence and thereafter filed the complaint for the purpose of preliminary investigation cannot be allowed to conduct the preliminary investigation of his own complaint. It is to say the least arbitrary and unjust." — This passage, quoted from Cojuangco, states the core due process rationale for prohibiting the PCGG from investigating its own complaint after gathering evidence.
• "It is in such instances that We say one cannot be 'a prosecutor and judge at the same time.'" — This formulation captures the prohibition against the PCGG's dual role as complainant and preliminary investigator.
• "As a general rule, defects in the preliminary investigation proceedings, or even the absence thereof, will not render an Information null and void. An exception to this rule, however, was carved out for cases involving violations of the right to due process." — This passage states the general rule and the due process exception applied in the case.
• "The principle followed by this Court is that where there is a violation of basic constitutional rights, courts are ousted from jurisdiction. The violation of a party's right to due process raises a serious jurisdictional issue, which cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction." — This passage explains the jurisdictional consequence of the due process violation and supports the nullity of the Sandiganbayan's probable cause finding.

• Cojuangco vs. Presidential Commission on Good Government, G.R. Nos. 92319-20, 2 October 1990, 190 SCRA 226 — Controlling precedent; declared the PCGG's preliminary investigation null and void on due process grounds where it had gathered evidence and filed a civil complaint based on the same acts. The Court applied this ruling to the present case.
• People vs. Sierra, Jr., G.R. No. L-27611, 30 August 1972, 46 SCRA 726-727 — Cited for the rule that defects in preliminary investigation generally do not nullify an Information, except where the accused is held to answer in an arbitrary or oppressive manner or the disregard of the safeguard infects the prosecution with unfairness.
• People vs. Monton, G.R. No. L-23906, 22 June 1968, 23 SCRA 1024 — Cited in Sierra as authority that a due process violation in the preliminary investigation may nullify the proceeding.
• San Agustin vs. People of the Philippines, G.R. No. 158211, 31 August 2004, 437 SCRA 392 — Cited for the general rule that defects in preliminary investigation, or even the absence thereof, do not render an Information null and void.
• Montoya vs. Varilla, G.R. No. 180146, 18 December 2008, 574 SCRA 831, 843; Garcia vs. Molina, G.R. Nos. 157383 and 174137, 10 August 2010, 627 SCRA 540, 554 — Cited for the principle that a violation of due process raises a jurisdictional issue and a decision rendered in disregard of due process is void for lack of jurisdiction.

• Section 4(b) in relation to Section 3(h), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The Information charged respondent with violation of these provisions for allegedly acting as nominee and/or dummy of former President Marcos in acquiring shares in Bulletin Today Publishing Company and Liwayway Publishing, Inc., thereby causing Marcos to participate in management or have pecuniary interest in those corporations.
• Executive Order No. 14, as amended — Cited by the PCGG as its mandate to file cases involving the ill-gotten wealth of former President Marcos and his family before the Sandiganbayan, which was alleged to have exclusive and original jurisdiction over the same. The Petitions were denied notwithstanding this claimed authority because the preliminary investigation was void on due process grounds.
• Rule 45, 1997 Rules of Civil Procedure — The OSP and OSG filed their Petitions for Review under this Rule, seeking reversal of the Sandiganbayan Resolutions.
• Rule 65, Rules of Court — Respondent's Motion to Order the Dismissal of the Information and to Annul the Warrant of Arrest was treated as a Petition for Certiorari under this Rule and docketed as G.R. No. 93884.
• Due Process Clause, Constitution — The Court held that the PCGG's conduct violated respondent's right to due process, and that the violation raised a jurisdictional issue rendering the preliminary investigation, the Information, and actions taken pursuant thereto void.

Leonardo-De Castro, Bersamin, and Perlas-Bernabe, JJ., concur. Caguioa, J., on leave.