Republic vs. Sandiganbayan

A person who claims ownership or interest in property subject of sequestration proceedings before the Sandiganbayan may intervene in the litigation, and such intervention is not a suit against the State requiring its consent. The State, by filing an action against an individual, divests itself of its sovereign character and submits to any counterclaim arising from the same litigation.

The Presidential Commission on Good Government (PCGG) was created to recover the ill-gotten wealth of former President Ferdinand E. Marcos, his family, and associates. Under Executive Order No. 14, issued on May 17, 1986, all cases of the Commission regarding funds, moneys, assets, and properties illegally acquired or misappropriated by Marcos and his associates, whether civil or criminal, were lodged within the exclusive and original jurisdiction of the Sandiganbayan. The rationale for this exclusive jurisdiction was the magnitude of the past regime's "organized pillage" and the necessity of restricting access to lower courts to enable the Commission's task of recovering plundered wealth with dispatch.

On July 29, 1987, the Republic of the Philippines, through the Presidential Commission on Good Government, filed a Complaint before the Sandiganbayan against the late Ferdinand E. Marcos, Imelda R. Marcos, Peter Sabido, Roberto S. Benedicto, Luis D. Yulo, Nicolas Dehesa, Jose R. Tengco, Jr., Rafael Sison, Cesar C. Zalamea, and Don M. Ferry for reconveyance, reversion, accounting, restitution, and damages, docketed as Civil Case No. 0024. The complaint was amended and expanded on January 25, 1988. Among the assets and properties sought to be recovered were the shares of stock in the Lianga Bay Logging Corporation and two parcels of land located in Palawan known as the Yulo King Ranch.

On February 8, 1988, the Workers of Lianga Bay Logging Corporation filed a Motion for Leave to Intervene and a Complaint for Intervention, claiming that they own 60% of the shares of Lianga Bay Logging Corporation, a juridical entity whose assets were sought to be recovered by petitioner. Petitioner filed its opposition on the grounds that the Sandiganbayan lacks jurisdiction over the case, that the proposed intervenors have no direct, actual, or material interest over the subject matter of the case, and that the rights of the intervenors, if any, may be amply protected in a separate proceeding.

On September 12, 1988, Philippine Agri-Business Corporation also filed a Motion for Leave to Intervene and a Complaint-in-Intervention, anchored on its claim of ownership over two parcels of land under sequestration. Petitioner filed its opposition contending that the allowance of the intervention would constitute an infringement of the constitutional provision on State immunity from suit, that the intervenor has no legal interest in the matter in litigation, and that the respondent court lacks jurisdiction over the action.

Notwithstanding the oppositions filed by petitioner, the two complaints-in-intervention were admitted by respondent Sandiganbayan in its resolutions dated November 9, 1988 and November 11, 1988. The Sandiganbayan found that the Workers' allegations and averments, correlated with the plaintiff's specific averments in the Expanded Complaint, showed that both parties admitted that 60% of the shares of Lianga Bay Logging Corporation belongs to the workers, and that defendant Sabido had arrogated unto himself the rights to represent said workers. The Sandiganbayan also found that Agri-Business' claim of rightful ownership of the land in question was not denied by the oppositors, and that the parcels of land were merely included in Annex "A" of the complaint as corporate assets sequestered allegedly as among those illegally acquired by defendant Sabido.

Petitioner thereafter filed the instant petition before the Supreme Court, maintaining that it cannot be sued without its consent, that the cause of action of intervenors does not fall within the jurisdiction of the Sandiganbayan as expressly spelled out in PD 1606 and EO No. 14, that intervenors have no legal interest in the matter in litigation, and that intervenors' claims are cognizable not by respondent Sandiganbayan but by the regular courts.

• State Immunity from Suit: Petitioner maintained that it cannot be sued without its consent, and that the allowance of the intervention would constitute an infringement of the constitutional provision on State immunity from suit.
• Lack of Legal Interest: Petitioner argued that the intervenors have no legal, actual, and direct interests over the property under sequestration, and that the proposed intervenors have no direct, actual, or material interest over the subject matter of the case.
• Lack of Jurisdiction: Petitioner contended that the cause of action of intervenors does not fall within the jurisdiction of the Sandiganbayan as expressly spelled out in PD 1606 and EO No. 14, and that intervenors' claims are cognizable not by respondent Sandiganbayan but by the regular courts.
• Public Policy: Petitioner argued that the Sandiganbayan could be swamped with original actions in respect of every conceivable act or order of the PCGG if private respondents were given sovereign consent to sue the Republic, which would be against the public policy embedded in Executive Orders No. 1, 2, 14 and related issuances, namely, the urgent recovery of the ill-gotten assets with dispatch.

• Legal Interest of Workers: The Workers of Lianga Bay Logging Corporation claimed that they own 60% of the shares of Lianga Bay Logging Corporation, and that their rights, which have long been deprived them, cannot be protected by the PCGG and the Office of the Solicitor General, especially since Lianga Bay Logging Corporation was undergoing sequestration proceedings.
• Legal Interest of Agri-Business: Philippine Agri-Business Corporation argued that it is the rightful owner of the parcels of land which have been sequestered and are the subject of the instant suit, and that there is a dispute among the various competing claimants — Peter Sabido, plaintiff, and movant-intervenor — over the ownership of the sequestered properties, which is most efficiently resolved by having all the claimants litigate the issue in one proceeding rather than through piecemeal, multiple litigation.

• Propriety of Intervention: Whether the Sandiganbayan gravely abused its discretion in admitting the complaints-in-intervention filed by private respondents.
• State Immunity from Suit: Whether the admission of the complaints-in-intervention constitutes a suit against the State without its consent, in violation of the constitutional provision on State immunity.
• Jurisdiction of the Sandiganbayan: Whether the claims of private respondents are cognizable by the Sandiganbayan or by the regular courts.

• Propriety of Intervention: No. The Sandiganbayan did not gravely abuse its discretion in admitting the complaints-in-intervention. The intervenors have legal interest in the matter in litigation under Rule 12, Section 2 of the Rules of Court, and the discretion of a court to allow intervention, once exercised, cannot be reviewed by certiorari nor controlled by mandamus save in instances where such discretion has been exercised in an arbitrary or capricious manner, none of which was shown to exist.
• State Immunity from Suit: No. The complaints-in-intervention do not seek money judgment from nor do they demand any affirmative performance by the State in its political capacity. By uniting with petitioner as plaintiffs, private respondents cannot be said to have filed a suit against the State without its consent. The State, by filing an action against an individual, divests itself of its sovereign character, thereby submitting itself open to any counterclaim.
• Jurisdiction of the Sandiganbayan: Yes, the Sandiganbayan has jurisdiction. Under Section 2 of Executive Order No. 14, all cases of the Commission regarding ill-gotten wealth are lodged within the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court.

• Propriety of Intervention: The questioned Resolutions of respondent Sandiganbayan are squarely anchored on Rule 12, Section 2 of the Rules of Court, which authorizes a court, in its discretion, to allow a person to intervene in an action by filing a motion for intervention. A person may be permitted to intervene in an action pending trial if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution of property in the custody of the court. Intervention is "the admission, by leave of court of a person not an original party to pending legal proceedings, by which such party becomes a party thereto for the protection of some right or interest alleged by him to be affected by such proceedings." The Sandiganbayan found that the Workers' allegations and averments, correlated with the plaintiff's own averments in the Expanded Complaint, confirmed the Workers' rights and interest in Lianga Bay Logging Corporation, constituting a direct and immediate, actual and material, legal interest, not one which is simply contingent and expectant. As for Agri-Business, the Sandiganbayan found that the oppositors did not deny the movant-intervenor's claim of rightful ownership of the land in question, and that the parcels of land were merely included in Annex "A" of the complaint as corporate assets sequestered allegedly as among those illegally acquired by defendant Sabido. The presence of legal and direct interest notwithstanding, the grant of intervention is subject to the sound discretion of the court, having in mind whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether the intervenor's rights may be fully protected in a separate proceeding. It is settled jurisprudence that the discretion of a court to allow intervention, once exercised, cannot be reviewed by certiorari nor controlled by mandamus save in instances where such discretion has been exercised in an arbitrary or capricious manner, none of which was shown to exist in the case at bar.
• State Immunity from Suit: Under the Rules authorizing intervention, the intervenor may unite with the plaintiff by filing a complaint in intervention; but where the intervenor unites with the defendant, intervention may be made in the form of an answer to the complaint. In the case at bar, private respondents intervened in the court below as plaintiffs in intervention by filing their respective complaints in intervention. The complaints-in-intervention do not seek money judgment from nor do they demand any affirmative performance by the State in its political capacity which would otherwise call for the application of immunity from suit. Herein intervenors merely seek the resolution of the issue of ownership over the sequestered properties, i.e., whether they pertain to petitioner, defendant Peter Sabido, or to private respondents. The complaints in intervention are mere incidents of the main action which necessarily fall under the Sandiganbayan's exclusive and original jurisdiction. By uniting with petitioner as plaintiffs, private respondents cannot be said to have filed a suit against the State without its consent. The same conclusion may be arrived at had private respondents chosen to file an answer in intervention, in effect resisting the claims of petitioner. The State, by filing an action against an individual, divests itself of its sovereign character, thereby submitting itself open to any counterclaim. After descending to the level of an ordinary citizen, the State cannot unilaterally ascend back to its privileged position of non-suability behind the cloak of sovereign immunity in the face of a counter suit the origin of which the State itself initiated.
• Jurisdiction of the Sandiganbayan: The jurisdiction of the Sandiganbayan in the recovery of "ill-gotten wealth" has already been decided in Presidential Commission on Good Government vs. Hon. Peña (159 SCRA 556, G.R. No. 77663, April 12, 1988), wherein it was held that under Section 2 of the President's Executive Order No. 14, issued on May 17, 1986, all cases of the Commission regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees, whether civil or criminal, are lodged within the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to, such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court. Necessarily, those who wish to question or challenge the Commission's acts or orders in such cases must seek recourse in the same court, the Sandiganbayan, which is vested with exclusive and original jurisdiction. The rationale of the exclusivity of such jurisdiction is readily understood: given the magnitude of the past regime's "organized pillage" and the ingenuity of the plunderers and pillagers with the assistance of the experts and best legal minds available in the market, it is a matter of sheer necessity to restrict access to the lower courts, which would have tied into knots and made impossible the commission's gigantic task of recovering the plundered wealth of the nation. In view of the extraordinary nature of sequestration, parties who claim ownership or interest in the subject matter of sequestration proceedings before the Sandiganbayan have no other recourse than intervention in the litigation before the Sandiganbayan, whose decision is subject to review on certiorari exclusively by this Court, for no other court or forum has jurisdiction over proceedings for the recovery of ill-gotten wealth.

• Intervention — Intervention is "the admission, by leave of court of a person not an original party to pending legal proceedings, by which such party becomes a party thereto for the protection of some right or interest alleged by him to be affected by such proceedings." Under Rule 12, Section 2 of the Rules of Court, a person may be permitted to intervene in an action pending trial if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution of property in the custody of the court. The Court applied this doctrine in upholding the Sandiganbayan's admission of the complaints-in-intervention, finding that the intervenors had direct, immediate, actual, and material legal interests in the sequestered properties.
• State Immunity from Suit (Waiver by Filing Action) — The State, by filing an action against an individual, divests itself of its sovereign character, thereby submitting itself open to any counterclaim. After descending to the level of an ordinary citizen, the State cannot unilaterally ascend back to its privileged position of non-suability behind the cloak of sovereign immunity in the face of a counter suit the origin of which the State itself initiated. The Court applied this doctrine in ruling that the complaints-in-intervention, which merely seek the resolution of the issue of ownership over sequestered properties, do not constitute a suit against the State without its consent.
• Exclusive Original Jurisdiction of the Sandiganbayan over Ill-Gotten Wealth Cases — Under Section 2 of Executive Order No. 14, all cases of the PCGG regarding funds, moneys, assets, and properties illegally acquired or misappropriated by former President Marcos, his family, close relatives, subordinates, business associates, dummies, agents, or nominees, whether civil or criminal, are lodged within the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court. The Court applied this doctrine in ruling that parties who claim ownership or interest in the subject matter of sequestration proceedings before the Sandiganbayan have no other recourse than intervention in the litigation before the Sandiganbayan.
• Discretion of Court to Allow Intervention — The discretion of a court to allow intervention, once exercised, cannot be reviewed by certiorari nor controlled by mandamus, save in instances where such discretion has been exercised in an arbitrary or capricious manner. The Court applied this doctrine in declining to disturb the Sandiganbayan's admission of the complaints-in-intervention, finding no arbitrary or capricious exercise of discretion.

• "Intervention is 'the admission, by leave of court of a person not an original party to pending legal proceedings, by which such party becomes a party thereto for the protection of some right or interest alleged by him to be affected by such proceedings.'" — This passage defines the doctrine of intervention as applied in this case, citing Garcia v. David, and establishes the standard for determining who may be permitted to intervene in pending litigation.
• "The State, by filing an action against an individual, divests itself of its sovereign character thereby submitting itself open to any counterclaim. After descending to the level of an ordinary citizen, the State cannot unilaterally ascend back to its privileged position of non-suability behind the cloak of sovereign immunity in the face of a counter suit the origin of which the State itself initiated." — This passage articulates the principle that the State waives its immunity from suit when it initiates an action, and is frequently cited in subsequent jurisprudence on sovereign immunity.
• "Under section 2 of the President's Executive Order No. 14, issued on May 17, 1986, all cases of the Commission regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees whether civil or criminal, are lodged within the exclusive and original jurisdiction of the Sandiganbayan and all incidents arising from incidental to, or related to, such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court." — This passage, quoted from PCGG v. Hon. Peña, establishes the exclusive original jurisdiction of the Sandiganbayan over ill-gotten wealth cases and all incidents related thereto, and is the controlling authority on this jurisdictional question.

• Garcia vs. David, 67 Phil. 279 (1939) — Cited as the source of the definition of intervention as "the admission, by leave of court of a person not an original party to pending legal proceedings, by which such party becomes a party thereto for the protection of some right or interest alleged by him to be affected by such proceedings." Also cited for the proposition that intervention is never an independent action but is ancillary and supplemental to the existing litigation.
• Balane vs. de Guzman, 20 SCRA 117 (1967) — Cited for the proposition that the grant of intervention is subject to the sound discretion of the court, having in mind whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether the intervenor's rights may be fully protected in a separate proceeding.
• Gibson vs. Revilla, 92 SCRA 219 (1979) — Cited together with Balane vs. de Guzman for the same proposition regarding the sound discretion of the court in granting intervention.
• Ruiz and Herrera vs. Cabahug, 102 Phil. 110 (1957) — Cited for the proposition that complaints-in-intervention that do not seek money judgment from nor demand any affirmative performance by the State in its political capacity do not call for the application of immunity from suit.
• Froilan vs. Pan Oriental Shipping Co., 95 Phil. 905 (1954) — Cited for the proposition that the State, by filing an action against an individual, divests itself of its sovereign character, thereby submitting itself open to any counterclaim.
• Presidential Commission on Good Government vs. Hon. Peña, 159 SCRA 556, G.R. No. 77663, April 12, 1988 — Controlling precedent on the exclusive original jurisdiction of the Sandiganbayan over ill-gotten wealth cases and all incidents arising from, incidental to, or related to such cases, subject to review on certiorari exclusively by the Supreme Court.
• Soriano vs. Yuson, 164 SCRA 226, G.R. No. L-74910, August 10, 1988 — Cited as reiterating the ruling in PCGG vs. Hon. Peña regarding the exclusive original jurisdiction of the Sandiganbayan over ill-gotten wealth cases.

• Rule 12, Section 2, Rules of Court — Authorizes a court, in its discretion, to allow a person to intervene in an action by filing a motion for intervention, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution of property in the custody of the court. The Court applied this provision in upholding the Sandiganbayan's admission of the complaints-in-intervention.
• Rule 12, Section 2(c), Rules of Court — Provides that the intervenor may unite with the plaintiff by filing a complaint in intervention, but where the intervenor unites with the defendant, intervention may be made in the form of an answer to the complaint. The Court applied this provision in ruling that private respondents, by uniting with petitioner as plaintiffs, cannot be said to have filed a suit against the State without its consent.
• Rule 1, Section 2, Rules of Court — Provides for the just, speedy, and inexpensive determination of actions and proceedings. The Court cited this provision in affirming the Sandiganbayan's reasoning that allowing intervention avoids multiplicity of suits.
• Section 2, Executive Order No. 14 (May 17, 1986) — Lodges all cases of the PCGG regarding funds, moneys, assets, and properties illegally acquired or misappropriated by former President Marcos and his associates, whether civil or criminal, within the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court. The Court applied this provision in ruling that the Sandiganbayan has jurisdiction over the complaints-in-intervention.
• Presidential Decree No. 1606 — Cited by petitioner as the basis for its contention that the cause of action of intervenors does not fall within the jurisdiction of the Sandiganbayan; the Court did not find this contention meritorious.
• Executive Orders No. 1, 2, and 14 — Cited by petitioner as embodying the public policy of the urgent recovery of ill-gotten assets with dispatch; the Court rejected petitioner's argument that allowing intervention would contravene this public policy.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Cortes, Griño-Aquino, Medialdea, and Regalado, JJ., concurred. Sarmiento, J., was on leave. Padilla, J., filed a separate concurring opinion stating that the same issues were resolved in G.R. No. 85284, dated 28 February 1990.

N/A — No dissenting opinions were noted in the case text.