March 6, 2006 | G.R. No. 129406
Republic of the Philippines as represented by the Presidential Commission on Good Governance (PCGG), petitioner
Sandiganbayan and Roberto Benedicto, respondents
FACTS:
One of the key mandates of the PCGG is to sequester business enterprises, entities, and other properties believed to be ill-gotten wealth. One of such sequestrations were the 227 shares of the Negros Occidental Golf and Country Club, Inc. (NOGCCI), which shares were supposed to be owned by Roberto Benedicto. Following the sequestration of such shares, PCGG representarives sat as members of the Board of Directors of NOGCCI, which subsequently approved the imposition of monthly membership due to share owners amounting to P150 per share. This was later changed to P250 per share.
Instead of opposing such impositions, the PCGG representatives sitting as members of the Board of Directors approved the same. Due to either sheer incompetence or collusion with other share owners, PCGG representatives virtually neglected the shares between 1987 until 1989, at which point PCGG's failure to pay the monthly membership dues now amounting to P2,959,471.00 led to the auction sale of the delinquent shares.
On November 3, 1990, in Civil Case No. 0034, the PCGG entered into a Compromise Agreement with Benedicto. This agreement stated that PCGG was lifting the sequestration on the 227 NOGCCI shares, implying that said shares were not ill-gotten wealth after all and that it was well within Benedicto's capacity to purchase said shares using his own money.
From the time this Compromise Agreement was made, both the PCGG and Benedicto had been turning to Sandiganbayan in trying to carry out the terms of the agreement. Because PCGG did not seem intent to return the shares to him as agreed upon, Benedicto instituted actions against the Commission. In all instances, the Sandiganbayan ruled in favor of Benedicto.
Subsequently the PCGG filed the instant petition before the SC, contending that: (a) Sandiganbayan's directive on March 28, 1995 compelling PCGG to bring before the Clerk of Court the 227 shares registered in the name of Benedicto or in default thereof pay P150,000 per share using public money, and its ruling on March 13, 1997 denying PCGG's Manifestation with Motion for Reconsideration, constituted grave abuse of discretion; and (b) that PCGG is immune from any lawsuit following the principle of the non-suability of the State.
ISSUES:
1. Whether or not Sandiganbayan committed grave abuse of discretion in ruling in favor of Benedicto.
2. Whether or not PCGG is immune from any lawsuit.
HELD:
1. No, the Court ruled that all of Sandiganbayan's rulings regarding the matter were all in keeping with the Compromise Agreement that was entered into by the PCGG and Benedicto. Therefore, it cannot be faulted for simply following the terms of something that PCGG had instituted itself. As a matter of fact, the Court ruled that the two assailed rulings have firm basis in fact and in law.
2. No, by entering into a Compromise Agreement with Benedicto, the PCGG had stripped itself of its immunity from suit and placed itself in the level of its adversary. When the State enters into a contract through its officers and agents, in furtherance of a legitimate aim or purpose and pursuant to constitutional legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the State may be sued even without its express consent. By entering into a contract, the sovereign descends to the level of the citizen.