Republic vs. Racho

The Sandiganbayan exercises exclusive appellate jurisdiction over final judgments, resolutions, or orders of regional trial courts in civil forfeiture cases under Republic Act No. 1379, notwithstanding the civil nature of the proceedings, because the forfeiture of illegally acquired property amounts to a penalty and the respondent is a public officer or employee whose violation was committed in relation to his office.

The Sandiganbayan was created by Presidential Decree No. 1486, and its jurisdiction has since been expanded and restricted through numerous amendments, the latest being Republic Act No. 10660. During the pendency of the case, Republic Act No. 8249 was in force, which vests in the Sandiganbayan jurisdiction over violations of Republic Act No. 1379 committed by officials occupying certain positions, and provides that the Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments of regional trial courts. Republic Act No. 1379 establishes a prima facie presumption that property acquired during incumbency which is manifestly out of proportion to salary and other lawful income was unlawfully acquired, and provides for the filing of a petition for forfeiture before the Court of First Instance (now Regional Trial Court) of the city or province where the public officer or employee resides or holds office.

Prompted by a concerned citizen's complaint, the Ombudsman led an investigation on Nieto A. Racho's alleged unexplained wealth. The investigation revealed sizeable bank deposits that were not declared in Racho's Statements of Assets, Liabilities, and Net Worth (SALN), specifically: P1,000,000.00, P200,000.00, and P28,702.53 in Philippine Commercial International Bank under the name "Nieto &/or Lourdes Racho"; P1,983,554.45 and P949,341.82 in Metropolitan Bank and Trust Company under the name "Nieto A. Racho"; and P1,632,282.59 in Bank of Philippine Islands under the name "Lourdes B. Racho &/or Nieto A. Racho."

The Ombudsman filed complaints for falsification of public document under Article 171 of the Revised Penal Code and dishonesty against Racho. The administrative case for dishonesty eventually reached the Supreme Court as Office of the Ombudsman vs. Racho, where the Court found Racho guilty of dishonesty not only for his failure to disclose the bank deposits, but for his "unmistakable intent to cover up the true source of his questioned bank deposits."

Meanwhile, the Republic, through the Office of the Ombudsman-Visayas, filed a Petition for the Forfeiture of Unlawfully Acquired Wealth under Republic Act No. 1379 before the Regional Trial Court. The Petition alleged that the Ombudsman conducted an inquiry similar to a preliminary investigation and found prima facie showing that Racho amassed wealth manifestly out of proportion to his salary and other lawful income. Racho did not present evidence "by reason of his ailing health and failing memory."

After due proceedings, the Regional Trial Court rendered its November 16, 2013 Decision ordering the forfeiture of P5,793,881.39 in favor of the State. Racho filed a Notice of Appeal, which was given due course by the Regional Trial Court. In its August 31, 2016 Decision, the Court of Appeals affirmed the Regional Trial Court Decision with modification, excluding from forfeiture P1,430,492.56 representing the share of his wife, Lourdes Racho, in the conjugal partnership, and decreasing the forfeited amount to P4,363,388.83.

Racho sought reconsideration of the assailed Court of Appeals Decision, which the Republic opposed in its Motion Ex Abundanti Ad Cautelam. The Republic argued, among others, that the Court of Appeals lacks jurisdiction over the appeal. The Court of Appeals denied the motion but asserted its jurisdiction over the appeal. Hence, both parties filed their respective Petitions before this Court.

• Jurisdiction of the Court of Appeals: The Republic posited that the Court of Appeals erred in taking cognizance of Racho's appeal because it is the Sandiganbayan which has exclusive appellate jurisdiction over final judgments of regional trial courts in civil forfeiture cases.
• Conjugal Share: The Republic claimed that the Court of Appeals erred in decreasing the amount to be forfeited on account of Lourdes's alleged conjugal share.

• Nature of the Bank Deposits: Racho maintained that none of the bank deposits are ill-gotten wealth and that half of all the bank deposits should have been determined as conjugal property.
• Indispensable Party: Racho argued that Lourdes is an indispensable party in the civil forfeiture proceedings.
• Meaning of "Accused": Racho relied on the use of the term "accused" in the phrase "[i]n cases where none of the accused are occupying positions corresponding to Salary Grade '27' or higher" in Section 4 of Republic Act No. 8249 to argue that the following paragraph regarding the Sandiganbayan's exclusive appellate jurisdiction refers only to criminal cases.

• Jurisdiction of the Court of Appeals: Whether the Court of Appeals erred in taking cognizance of an appeal from a regional trial court's decision in a civil forfeiture case.
• Character of the Bank Deposits: Whether the Court of Appeals erred in finding that the bank deposits constitute ill-gotten wealth.

• Jurisdiction of the Court of Appeals: Yes. The Court of Appeals lacked jurisdiction to entertain Racho's appeal. Under Section 4 of Republic Act No. 8249, the Sandiganbayan exercises exclusive appellate jurisdiction over final judgments, resolutions, or orders of regional trial courts, whether in the exercise of their own original jurisdiction or of their appellate jurisdiction, and the law does not distinguish between civil and criminal cases.
• Character of the Bank Deposits: No. The bank deposits were properly found to constitute ill-gotten wealth. Racho failed to present any evidence to rebut the prima facie presumption in Section 2 of Republic Act No. 1379 that property manifestly out of proportion to his salary and other lawful income was unlawfully acquired, and the doctrine of conclusiveness of judgment bars relitigating facts already settled in Office of the Ombudsman vs. Racho.

• Jurisdiction of the Court of Appeals: Section 4 of Republic Act No. 8249 provides that the Sandiganbayan shall have jurisdiction over violations of Republic Act No. 1379 where one or more of the accused are officials occupying certain positions, and that in cases where none of the accused are occupying positions corresponding to salary grade '27' or higher, exclusive original jurisdiction shall be vested in the proper regional trial court. The same section provides that "[t]he Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or orders of regional trial courts whether in the exercise of their own original jurisdiction or of their appellate jurisdiction as herein provided." The Republic filed the Petition for Forfeiture against Racho, whose position was not among those enumerated in Section 4(a), before the Regional Trial Court. Thus, the appeal should have been filed before the Sandiganbayan, as seen in Villanueva vs. People, Melencion vs. Sandiganbayan, and Estarija vs. People. Racho's argument that the use of the term "accused" indicates exclusive application of the rule to criminal cases was rejected. The use of the term "accused" is not material and does not indicate exclusive application of the rule to criminal cases. Prior to Republic vs. Sandiganbayan and Almeda, Sr. vs. Perez, there was confusion on the nature of forfeiture proceedings, but the Court has since clarified that forfeiture proceedings are civil in nature. The use of the term "accused" may also be because forfeiture of illegally acquired property amounts to a penalty, such that forfeiture proceedings are regarded as quasi-criminal and the right against self-incrimination is protected. The Court in Garcia vs. Sandiganbayan explained that violations of R.A. No. 1379 are placed under the jurisdiction of the Sandiganbayan, even though the proceeding is civil in nature, since the forfeiture of the illegally acquired property amounts to a penalty, and the respondent in such forfeiture proceedings is a public officer or employee and the violation was committed during the respondent's incumbency and in relation to his office. Section 7 of Republic Act No. 1379, which states that "parties may appeal from the judgment of the Court of First Instance as provided in the Rules of Court for appeals in civil cases," only refers to the procedure once the appeal is perfected, consistent with Rule XI, Section 2 of the 2002 Revised Internal Rules of the Sandiganbayan. All told, the law does not distinguish between civil and criminal cases when it comes to the Sandiganbayan's exclusive appellate jurisdiction. As the Court of Appeals did not have jurisdiction to entertain Racho's appeal, the assailed Court of Appeals Decision is void and without effect.

• Character of the Bank Deposits: Racho failed to present any evidence to rebut the presumption in Section 2 of Republic Act No. 1379 that the property manifestly out of proportion to his salary and other lawful income was unlawfully acquired. The Regional Trial Court and Court of Appeals were thus left to resort to the findings from the investigation conducted by the Office of the Ombudsman. The same pieces of evidence have been passed upon by the Court in Office of the Ombudsman vs. Racho, where the Court found that the documents Racho presented, like those purportedly showing that his brothers and nephew were financially capable of sending or contributing large amounts of money for their business, do not prove that they did contribute or remit money for their supposed joint business venture. The Special Power of Attorney supposedly issued by Vieto, Dido and Henry Racho in favor of Racho on January 28, 1993 contained a glaringly inconsistent statement that belies its authenticity, referring to a future date "registered by the DTI last April 30, 1999." The Joint Affidavits allegedly executed by Racho's siblings and nephew were later disowned and denied by his nephew, Henry, and brother, Vieto. The SEC Certificate of Registration of Angelsons did not confirm that the business is actually existing and operating. Ultimately, only P1,167,186.33 representing his wife's retirement benefits was properly accounted for, and even this money was reduced by his loan payable of P1,000,000.00 as reflected in his 2000 SALN. The Court in Office of the Ombudsman vs. Racho found that the pieces of evidence relied upon by Racho "failed to satisfactorily explain the accumulation of his wealth or even identify the sources of such accumulated wealth." The doctrine of res judicata by conclusiveness of judgment bars relitigating facts that have been judicially determined in a prior case. While Ong vs. Sandiganbayan instructs that a co-respondent who is not a public official or employee should be afforded the right to a previous inquiry similar to a preliminary investigation, the same case ruled that their defenses are deemed subsumed in the submissions of their spouse. Racho was given multiple opportunities to present proof of lawful sources of his wealth but he refused to do so before the Office of the Ombudsman and the Regional Trial Court. He cannot now claim that he had been deprived of due process, not when there are unrefuted findings that the properties he stands to lose come from unlawful sources.

• Exclusive appellate jurisdiction of the Sandiganbayan over RTC decisions in civil forfeiture cases — Under Section 4 of Republic Act No. 8249, the Sandiganbayan exercises exclusive appellate jurisdiction over final judgments, resolutions, or orders of regional trial courts, whether in the exercise of their own original jurisdiction or of their appellate jurisdiction. The law does not distinguish between civil and criminal cases when it comes to the Sandiganbayan's exclusive appellate jurisdiction. The Court applied this doctrine to hold that the Court of Appeals lacked jurisdiction to entertain Racho's appeal from the Regional Trial Court's decision in a civil forfeiture case under Republic Act No. 1379, rendering the Court of Appeals' Decision void and without effect.

• Nature of forfeiture proceedings under Republic Act No. 1379 — Forfeiture proceedings are civil in nature, being actions in rem, and do not terminate in the imposition of a penalty but merely in the forfeiture of the properties illegally acquired in favor of the State. However, forfeiture of illegally acquired property partakes the nature of a penalty, such that forfeiture proceedings are regarded as quasi-criminal and the right against self-incrimination is protected. The Court relied on this doctrine to explain why violations of R.A. No. 1379 are placed under the jurisdiction of the Sandiganbayan even though the proceeding is civil in nature.

• Conclusiveness of judgment (res judicata) — The doctrine of res judicata by conclusiveness of judgment bars relitigating facts that have been judicially determined in a prior case. The Court applied this doctrine to refuse to deviate from the finding in Office of the Ombudsman vs. Racho that the subject bank deposits were unlawfully acquired, since the same pieces of evidence have been passed upon by the Court in that case.

• Prima facie presumption of unlawful acquisition — Under Section 2 of Republic Act No. 1379, whenever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary and to his other lawful income, said property shall be presumed prima facie to have been unlawfully acquired. The Court applied this doctrine to hold that Racho failed to present any evidence to rebut the presumption, as he did not present evidence before the Office of the Ombudsman and the Regional Trial Court.

• "The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or orders of regional trial courts whether in the exercise of their own original jurisdiction or of their appellate jurisdiction as herein provided." — This is the controlling statutory provision from Section 4 of Republic Act No. 8249 that the Court applied to hold that the Court of Appeals lacked jurisdiction over Racho's appeal, and that the appeal should have been filed before the Sandiganbayan.

• "The use of the term 'accused' in Republic Act No. 8249 is not material and does not indicate exclusive application of the rule to criminal cases." — This is the Court's rejection of Racho's argument that the Sandiganbayan's exclusive appellate jurisdiction refers only to criminal cases, based on the use of the term "accused" in the statute.

• "All told, the law does not distinguish between civil and criminal cases when it comes to the Sandiganbayan's exclusive appellate jurisdiction. As the Court of Appeals did not have jurisdiction to entertain Racho's appeal, the assailed Court of Appeals Decision is void and without effect." — This states the ratio decidendi on the jurisdictional issue, holding that the Court of Appeals' Decision and Resolution are void for lack of jurisdiction.

• "Racho was given multiple opportunities to present proof of lawful sources of his wealth but he refused to do so before the Office of the Ombudsman and the Regional Trial Court. He cannot now claim that he had been deprived of due process, not when there are unrefuted findings that the properties he stands to lose come from unlawful sources." — This states the Court's reasoning on the due process argument, holding that Racho cannot claim deprivation of due process when he was given multiple opportunities to present evidence but refused to do so.

• Office of the Ombudsman vs. Racho, 656 Phil. 148 (2011) — Controlling precedent in the related administrative case for dishonesty, where the Court found Racho guilty of dishonesty and made findings on the same pieces of evidence. The Court applied the doctrine of conclusiveness of judgment to these findings.

• Villanueva vs. People, 659 Phil. 418 (2011) — Followed as authority that the Sandiganbayan has exclusive appellate jurisdiction over final judgments of regional trial courts under R.A. No. 8249, where the Court agreed with the Office of the Solicitor General that filing a petition for review before the Court of Appeals was the wrong remedy.

• Melencion vs. Sandiganbayan, 577 Phil. 223 (2008) — Cited as authority for the proposition that the appeal from a regional trial court decision should have been filed before the Sandiganbayan.

• Estarija vs. People, 619 Phil. 457 (2009) — Cited as authority for the proposition that the appeal from a regional trial court decision should have been filed before the Sandiganbayan.

• Republic vs. Sandiganbayan, 277 Phil. 759 (1991) — Cited for the clarification that forfeiture proceedings are civil in nature, being actions in rem.

• Almeda, Sr. vs. Perez, 116 Phil. 120 (1962) — Cited for the holding that proceedings under R.A. No. 1379 do not terminate in the imposition of a penalty but merely in the forfeiture of the properties illegally acquired in favor of the State.

• Garcia vs. Sandiganbayan, 499 Phil. 589 (2005) — Followed for the explanation that violations of R.A. No. 1379 are placed under the jurisdiction of the Sandiganbayan, even though the proceeding is civil in nature, since the forfeiture of the illegally acquired property amounts to a penalty.

• Cabal vs. Kapunan, Jr., cited in Garcia — Cited for the modification of Almeda, holding that the doctrine in Almeda refers to the purely procedural aspect of the forfeiture proceedings and has no bearing on the substantial rights of respondents, particularly their constitutional right against self-incrimination.

• Ong vs. Sandiganbayan, 507 Phil. 6 (2005) — Followed for the instruction that a co-respondent who is not a public official or employee should be afforded the right to a previous inquiry similar to a preliminary investigation, but their defenses are deemed subsumed in the submissions of their spouse.

• Presidential Decree No. 1271 Committee vs. De Guzman, 801 Phil. 731 (2016) — Cited for the doctrine of res judicata by conclusiveness of judgment, which bars relitigating facts that have been judicially determined in a prior case.

• Section 4, Republic Act No. 8249 — The statute defining the jurisdiction of the Sandiganbayan, which was in force during the pendency of the case. The Court applied this provision to hold that the Sandiganbayan exercises exclusive appellate jurisdiction over final judgments of regional trial courts in civil forfeiture cases, and that the law does not distinguish between civil and criminal cases.

• Sections 2 and 6, Republic Act No. 1379 — The statute providing for the forfeiture of unlawfully acquired wealth. Section 2 establishes the prima facie presumption of unlawful acquisition and the filing of the petition, while Section 6 provides for the judgment of forfeiture. The Court applied these provisions to affirm the forfeiture of the bank deposits.

• Section 7, Republic Act No. 1379 — The provision stating that "parties may appeal from the judgment of the Court of First Instance as provided in the Rules of Court for appeals in civil cases." The Court interpreted this provision as referring only to the procedure once the appeal is perfected, not as a grant of appellate jurisdiction to the Court of Appeals.

• Rule XI, Section 2, 2002 Revised Internal Rules of the Sandiganbayan — The internal rule providing that appeal to the Sandiganbayan from a decision of the Regional Trial Court shall be by a Petition for Review under Rule 42 of the 1997 Rules of Civil Procedure. The Court cited this rule as consistent with its interpretation of Section 7 of Republic Act No. 1379.

• Article 171, Revised Penal Code — The provision on falsification of public document, which was the basis of one of the complaints filed by the Ombudsman against Racho.

Lazaro-Javier, M. Lopez, and J. Lopez, JJ., concurred. Kho, Jr., J., was on leave.

N/A — No dissenting opinion was noted in the provided text.