FIRST DIVISION
VICENTE T. UY,
Petitioner,
G.R.
No.
111544
July 6, 2004
-versus-
SANDIGANBAYAN,
PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT(PCGG), PIEDRAS
PETROLEUM COMPANY, INC. (PIEDRAS), RIZAL COMMERCIALBANKING CORPORATION
(RCBC), TRADERS ROYAL BANK (TRB), ORIENTALPETROLEUM AND
MINERALS
CORP. (OPMC) AND ATTY. JOSE C. LAURETA,
Respondents. |
D E C I S I O N
YNARES-SANTIAGO, J.:
This is a petition for
certiorari under Rule 65 of the Rules
of Court assailing the Resolution[1]
of the Sandiganbayan promulgated on August 23, 1993 which dismissed
petitioner
Vicente Uy’s original Petition for Prohibition and Injunction filed
against
respondents Presidential Commission on Good Government (PCGG), Piedras
Petroleum Company, Inc. (PIEDRAS), Rizal Commercial Banking Corporation
(RCBC), Traders Royal Bank (TRB), Oriental Petroleum & Minerals
Corporation
(OPMC) and Atty. Jose C. Laureta. Petitioner Uy filed this
petition
in his capacity as a practicing lawyer, landowner, taxpayer and
stockholder
of OPMC.cralaw:red
Respondent PIEDRAS is
a sequestered corporation voluntarily surrendered by Mr. Roberto S.
Benedicto
to the PCGG under a Compromise Agreement entered into on November 3,
1990.
PIEDRAS was the registered owner of 7,499,812,500 class “A” shares and
4,999,875,000 class “B” shares of OPMC. On September 18, 1991,
OPMC
put out a notice of the issuance of additional OPMC shares for which
its
existing stockholders may exercise their non-assignable pre-emptive
rights.
Additional shares can be subscribed to by the stockholders at a
subscription
ratio of one (1) OPMC share of stock for every two (2) OPMC shares
owned
as of July 26, 1991 valued at P0.02 per share. Thus, PIEDRAS was
entitled to subscribe to 3,749,906,250 class “A” and 2,499,937,500
class
“B” OPMC shares.cralaw:red
As a condition for the
additional subscription, fifty percent of the purchase price for the
entire
subscription must be paid not later than 5:00 p.m. of October 31, 1991,
and the other fifty percent to be remitted upon call by the OPMC Board
of Directors. In order to avail of the total shares it is
entitled
to subscribe to, PIEDRAS needed One Hundred Twenty Four Million Nine
Hundred
Six Thousand and Eight Hundred Seventy Five Pesos
(P124,906,875.00).
As PIEDRAS did not have sufficient funds, it negotiated for RCBC and
TRB
to advance the needed amount. The agreements with the respective
banks were confirmed and authorized by the PCGG in an En Banc
Resolution
dated October 30, 1991.cralaw:red
The agreements between
PIEDRAS and the respondent banks were embodied in the Memorandum of
Agreement
(MOA) between PIEDRAS and RCBC, executed on October 31, 1991, and the
Stock
Sharing Agreement (SSA) between PIEDRAS and TRB dated March 26,
1992.
Under the MOA, RCBC agreed to advance to PIEDRAS half of the total
subscription
payment in the amount of Fifty Million Nine Hundred Fifty Seven
Thousand
Five Hundred Sixty Two Pesos and Fifty Centavos (P50,957,562.50) on
October
31, 1991. RCBC also committed itself to pay the remaining half of
the subscription price upon call by the OPMC Board for full
payment.
It was agreed upon that the advances were non-interest bearing.
However,
payment of these advances shall be made by way of dacion en pago
whereby
RCBC shall receive 2,054,947,696 class “A” and 789,450,000 class “B”
OPMC
shares which account for 57.14% and 52.63%, respectively, of the total
additional OPMC shares which PIEDRAS shall subscribe to. Stock
Certificates
representing the specified number of shares shall be issued directly in
the name of RCBC. In order to secure RCBC’s advances, PIEDRAS
shall
execute a Deed of Pledge over its existing shareholdings in OPMC in
favor
of RCBC. PIEDRAS likewise agreed to pay the capital gains tax due
on the transfer of the OPMC shares from it to RCBC.[2]chanrobles virtuallaw libraryred
On the other hand, the
SSA between PIEDRAS and TRB provided that TRB would advance the amount
of Five Million Pesos (P5,000,000.00) in order to pay for the
additional
subscription by PIEDRAS of 477,717,745 class “B” OPMC shares. In
turn, TRB shall automatically own and participate in 262,744,760 class
“B” OPMC shares or 55% of the total shares subscribed by PIEDRAS.
The remaining unpaid amount for the subscription shall be paid by TRB
upon
call of the OPMC Board of Directors. The SSA, however, provided
that
TRB may opt to limit its exposure to the payment it has advanced, in
which
case, TRB’s share of the subscribed shares shall be limited to the
number
of shares equivalent to its initial payment, i.e., 137,500,000 class
“B”
OPMC shares. Likewise, PIEDRAS has the option to limit TRB’s
participation
to the amount of the Five Million Pesos (P5,000,000.00) advanced by the
bank in which case PIEDRAS shall assume responsibility of paying the
remaining
balance of another Five Million Pesos (P5,000,000.00).[3]
On October 31, 1991,
the deadline set by OPMC for the exercise of its stockholders’
pre-emptive
rights, RCBC and TRB advanced the total amount of Fifty Five Million
Nine
Hundred Fifty Seven Thousand Five Hundred Sixty Two Pesos and Fifty
Centavos
(P55,957,562.50) to PIEDRAS as initial payment for PIEDRAS’s additional
subscription. On June 20, 1993, petitioner filed with public
respondent
Sandiganbayan a Petition for Prohibition and Injunction with a Prayer
for
a Temporary Restraining Order[4]
assailing the actions of the PCGG in negotiating with respondent banks
for the advance of the funds needed by PIEDRAS to pay for its
additional
subscription. Petitioner likewise sought to enjoin OPMC and Atty.
Jose C. Laureta, OPMC’s Corporate Secretary, from recognizing and
giving
effect to the MOA and SSA.cralaw:red
On June 25, 1993, the
Sandiganbayan ordered petitioner to file a memorandum in support of his
capacity to sue. Petitioner filed an Amended/Supplemental
Petition,
where he alleged that his capacity to sue is based on his being a
landowner,
taxpayer and stockholder of OPMC. On August 23, 1993, the First
Division
of the Sandiganbayan dismissed the petition on the ground of lack of
jurisdiction
over the subject matter which involved the alleged disturbance of
petitioner’s
rights as a stockholder and the violation by PIEDRAS of the exclusivity
of the pre-emptive offering by OPMC. This, the Sandiganbayan
said,
was a purely intra-corporate matter which is outside of its
jurisdiction.
The Sandiganbayan added that assuming it did have jurisdiction over the
case, the petition failed to show abuse of discretion on the part of
PIEDRAS
or the PCGG. Moreover, petitioner, while a landowner and a
taxpayer,
does not have the capacity to sue as his case does not meet the
requisites
for a taxpayer’s suit.[5]chanrobles virtuallaw libraryred
Hence, this petition
raising the following assignment of errors:
I.
THE HONORABLE
SANDIGANBAYAN
GRAVELY ERRED IN DISMISSING, MOTU PROPRIO, PETITIONER’S ORIGINAL
PETITION
THEREWITH FOR LACK OF JURISDICTION OVER THE SUBJECT MATTER THEREOF,
NOTWITHSTANDING
THE FACT THAT IN HIS (DISMISSED) PETITION, PETITIONER PRINCIPALLY
ASSAILED
THE ACTS OF RESPONDENT PCGG IN INSTIGATING, AUTHORIZING AND CONFIRMING
THE SALES AND/OR DISPOSITIONS OF THE OPMC SHARES OWNED BY RESPONDENT
PIEDRAS
(CEDED TO THE GOVERNMENT) TO PRIVATE RESPONDENT BANKS WITHOUT PUBLIC
BIDDING.
II.
THE COURT A QUO
GRAVELY
ERRED IN DISMISSING, MOTU PROPRIO, THE ADVERTED CASE ON THE GROUND THAT
HEREIN PETITIONER HAS NO LOCUS STANDI TO QUESTION THE PCGG/PIEDRAS-RCBC
AND PCGG/PIEDRAS-TRB DEALS, DESPITE THE FACT THAT THE MATTER INVOLVED
BEING
PUBLIC INTEREST, PETITIONER AS A CITIZEN, A LAWYER, TAXPAYER-LANDOWNER
AND STOCKHOLDER OF OPMC HAS THE RIGHT TO CHALLENGE.
III.
THE COURT A QUO
PREJUDGED
THE CASE BY DELVING INTO THE MERITS OF THE CASE WITHOUT GIVING THE
PETITIONER
THE OPPORTUNITY TO ADDUCE EVIDENCE IN SUPPORT OF HIS ALLEGATIONS IN THE
PETITION.
The petition must fail.cralaw:red
Anent the first issue,
petitioner argues that respondent Sandiganbayan has jurisdiction over
his
case since his principal action is the nullification of PCGG’s actions
in negotiating the assailed agreements with respondent banks. He
insists that these agreements are violative of Commission on Audit
Circular
No. 89-296 which requires public bidding in the divestment or disposal
of government property. Likewise, according to petitioner, the
agreements
are contrary to the mandate of the Comprehensive Agrarian Reform Law
(CARL),
Section 63(b) of which lists as a source of funding the proceeds of the
sale of any ill-gotten wealth. Lastly, petitioner posits that the
transactions violate the requirement on full public disclosure directed
by the Constitution. The PCGG, in authorizing and confirming the
agreements, abused its discretion and it is the Sandiganbayan which has
jurisdiction over a case which seeks to rectify the wrong done.chanrobles virtuallaw libraryred
In its decision dismissing
petitioner’s case, the Sandiganbayan stated that its jurisdiction
pertains
only to the determination of the propriety of the sequestration made by
the PCGG. It cannot assume jurisdiction over petitioner’s case
which
essentially raises the issue of whether it was proper for PIEDRAS to
exercise
its pre-emptive rights. The PCGG, in its Comment, argued that
PIEDRAS’s
OPMC shares of stock had been previously subject of a compromise
agreement
between itself and Mr. Roberto Benedicto. By virtue of the
compromise
agreement, the shares were given back to the Philippine
Government.
Necessarily, the issue of ownership of the subject shares had already
been
determined. The Sandiganbayan no longer has jurisdiction over any
action arising out of any controversy regarding the exercise of
ownership
rights over said shares of stock. Furthermore, the agreements
were
beyond the ambit of the COA Circular which requires public bidding
since
dacion en pago transactions are expressly excepted therefrom.
Finally,
there was no violation of the CARL since there was no disposition yet
of
ill-gotten wealth from which receipts may be applied and used for the
agrarian
reform program.cralaw:red
The extent of the jurisdiction
of the Sandiganbayan over cases involving the recovery of ill-gotten
wealth
has been passed upon in a number of cases decided by this Court.
In PCGG v. Hon. Emmanuel G. Peña, et al.,[6]
this Court held:
Under Section 2 of the
President’s Executive Order No. 14 issued on May 7, 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.chanrobles virtuallaw libraryred
In subsequent cases
jointly decided on August 10, 1988, the Court pointed out that: “(the)
exclusive jurisdiction conferred on the Sandiganbayan would evidently
extend
not only to the principal causes of action, i.e., the recovery of
alleged
ill-gotten wealth, but also to ‘all incidents arising from, incidental
to, or related to, such cases,’ such as the dispute over the sale of
shares,
the propriety of the issuance of ancillary writs or provisional
remedies
relative thereto, the sequestration thereof, which may not be made the
subject of separate actions or proceedings in another forum.”[7]
Likewise, in the case
of Republic v. Sandiganbayan,[8]
we ruled that while the PCGG is ordinarily allowed a free hand in the
exercise
of its administrative or executive function, the Sandiganbayan is
empowered
to determine in an appropriate case, if in the exercise of such
functions,
the PCGG has gravely abused its discretion or has overstepped the
boundaries
of the power conferred upon it by law. We stated:
Any act or order transgressing
the parameter of the objectives for which the PCGG was created, if
tainted
with abuse of discretion, is subject to a remedial action by the
Sandiganbayan,
the court vested with exclusive and original jurisdiction over cases
involving
the PCGG (PCGG v. Peña, 159 SCRA 556 [1988]; PCGG v. Securities
and Exchange Commission, G.R. No. 82188, June 30, 1988) including cases
filed by those who challenge PCGG’s acts or orders (Holiday Inn [Phil.]
v. Sandiganbayan, 186 SCRA 447 [1990]). Settled is the rule that when a
law confers jurisdiction upon a court, it is deemed to have all the
incidental
powers necessary to render the exercise of such jurisdiction effective
(Zuñiga v. Court of Appeals, 95 SCRA 740 [1980]).cralaw:red
In the recent case of
PCGG v. Sandiganbayan,[9]
we stated that there is a need to vigorously guard sequestered assets
and
preserve them pending resolution of the sequestration case before the
Sandiganbayan,
considering the paramount public policy for the recovery of ill-gotten
wealth. We ruled that sequestered assets and corporations are
legally
and technically in custodia legis, under the administration of the
PCGG.
Executive Order No. 2 specifically prohibits the transfer, conveyance,
encumbrance, or otherwise depletion or concealment of such assets and
properties,
under pain of penalties prescribed by law. Thus, an action which
can result in the deterioration and disappearance of the sequestered
assets
cannot be allowed, unless there is a final adjudication and disposition
of the issue as to whether these assets are ill-gotten or not, since it
may result in damage or prejudice to the Republic of the Philippines.chanrobles virtuallaw libraryred
What must be resolved
therefore in this petition is whether or not the issue raised by
petitioner
is one which the Sandiganbayan is empowered to resolve.cralaw:red
In the case at bar,
petitioner does not really seek to question the propriety of the
sequestration
of PIEDRAS by the PCGG or any matter incidental to or arising out of
such
sequestration. Rather, petitioner essentially challenges the
propriety
of PIEDRAS’s exercise of its pre-emptive rights as a corporate
stockholder
of OPMC and the means it availed of in order to exercise this
right.
We agree with the respondents that petitioner’s case is directed not
really
at the PCGG but rather at PIEDRAS, a private corporation. His
point
of contention deals mainly with the propriety of what is in essence a
business
judgment.cralaw:red
That the assailed transactions
were valid and legal corporate acts of PIEDRAS is proven by the Minutes
of the Special Meeting of the Board of Directors of PIEDRAS dated
October
31, 1991. The minutes contain the Resolutions of the Board of
Directors
authorizing PIEDRAS to enter into the financing agreements with the
respondent
banks “in order not to lose the opportunity to subscribe and to enable
PIEDRAS to profitably benefit” from the offer for additional
subscription.[10]
It is interesting to
note, at this point, the case of Holiday Inn (Phils.), Inc. v.
Sandiganbayan,[11]
where the issue related to a management agreement terminated by the
Board
of Directors of a sequestered corporation, 2/3 of the members of such
board
being composed by PCGG nominees. The action for intervention was
lodged with the Sandiganbayan in the main sequestration case. The
petitioners in that case averred that the Sandiganbayan has
jurisdiction
over the action since the action to terminate the management agreement
bears the imprimatur of the PCGG nominees sitting at the Board, making
PCGG the real party-in-interest. The Resolution of the
Sandiganbayan,
which was upheld by the Supreme Court, ruled on the contrary, thus:
This Court is of the
view that its jurisdiction refers to acts of the PCGG acting as such
whether
alone or with other persons, natural or juridical, and not generally
where
PCGG representatives act as part of another juridical person or
entity.
A rule of thumb might be thus: if the PCGG can be properly impleaded on
a cause of action asserted before this Court as a distinct entity, then
this Court would generally exercise jurisdiction; otherwise, it would
not,
because, then the ‘PCGG character’ of the act or omission in question
may,
at best, be only incidental.chanrobles virtuallaw libraryred
After all, the presence
of PCGG representatives in sequestered companies does not automatically
tear down the corporate veil that distinguishes the corporation from
its
officers, directors or stockholders. Corporate officers whether
nominated
by the PCGG or not act, insofar as third parties are concerned, are
(sic)
corporate officers. Contracts entered into by the San Miguel
Corporation,
for example, in connection with its poultry operations and the
cancellations
thereof, are not PCGG activities which would justify the invocation of
this Court’s jurisdiction, even if the contract or suit were
unanimously
approved by its board of directors where PCGG representatives sit.cralaw:red
This Court added:
The subject
matter of petitioner’s proposed complaint-in-intervention involves
basically,
an interpretation of contract, i.e., whether or not the right of first
refusal could and/or should have been observedx
x
x The question of whether or not the sequestered property was
lawfully
acquired by Roberto S. Benedicto has no bearing on the legality of the
termination of the management contract by NRHDC’s Board of
Directors.
The two are independent and unrelated issues and resolution of which
may
proceed independently of each other.
x
x
xThe Sandiganbayan correctly denied jurisdiction over the proposed
complaint-in-intervention.
The original and exclusive jurisdiction given to the Sandiganbayan over
PCGG cases pertains to (a) cases filed by the PCGG, pursuant to the
exercise
of its power under Executive Order Nos. 1, 2 and 14, as amended by the
Office of the President, and Article XVIII, Section 26 of the Constitution,
i.e., where the principal cause of action is the recovery of ill-gotten
wealth, as well as all incidents arising from, incidental to or related
to such cases and (b) cases filed by those who wish to question or
challenge
the commission’s acts or orders in such cases.
What is more, unlike
the
cases cited above and invoked by petitioner, there is no longer any
pending
sequestration in the case at bar. A year prior to the
transactions
assailed in this case, six out of the seven original PIEDRAS
stockholders
(all nominees of Mr. Benedicto) have assigned their respective
shareholdings
to the Philippine Government, in exchange for immunity.[12]
Petitioner himself affirmed this fact and even stated that the
compromise
agreement was approved by the Sandiganbayan and later affirmed by this
Court.[13]
As correctly pointed out by respondent PCGG, by the voluntary surrender
of the corporation to the Philippine Government and the confirmation of
the compromise agreement, the issue of ownership was no longer in
question.chanrobles virtuallaw libraryred
The participation of
PCGG in this case, as we see it, is not so much as the constituted body
tasked with the recovery of ill-gotten wealth as the representative or
agent of the Philippine Government who is the conceded owner of
PIEDRAS.
This opinion is bolstered by the fact that the PCGG, through its then
Chairman
David M. Castro and Commissioner Mario C.V. Jalandoni, wrote then
President
Corazon C. Aquino on October 30, 1991.[14]
In this letter, the PCGG related the situation of PIEDRAS and several
other
surrendered corporations, all shareholders of OPMC, intending to
subscribe
to some Eight Billion OPMC stock rights offered for additional
subscription.
The PCGG related that it had approached the Land Bank, GSIS, SSS, and
other
financial institutions for the necessary funds but these institutions
could
not immediately fund the additional subscription due to various legal
and
technical difficulties. As far as PIEDRAS is concerned, the PCGG
related that PIEDRAS stood to benefit from the transaction with
respondents
RCBC and TRB and if PIEDRAS will not enter into these arrangements, it
will automatically forfeit its pre-emptive rights and get
nothing.
Thus, the PCGG requested the President’s immediate consideration and
prior
clearance for the transactions. These facts were confirmed by
then
President Aquino’s own letter to the Chairman of the Commission on
Audit
Eufemio C. Domingo dated July 28, 1992.[15]
We sustain the argument
of respondent PCGG that the dacion en pago transactions are beyond the
ambit of the COA Circular invoked by petitioner. We deem the
agreements
to be valid dacion en pago agreements for reasons which shall be
discussed
later. Neither do the agreements entered into by PIEDRAS violate
the CARL. The language of the CARL provision[16]
invoked by petitioner is clear:chanrobles virtuallaw libraryred
Section 63.
Sources of funding or appropriation shall include the following:
x
x
x
x x
x
x x x
(b) All receipts
from
assets recovered and from sales of ill-gotten wealth recovered through
the Presidential Commission on Good Government.
Simply, we find
petitioner’s
action to be premature considering that based upon the transactions
alone,
there are as yet no receipts from assets recovered or from the sale of
ill-gotten wealth since the shares have not yet been disposed by
PIEDRAS.
It is only when the shares are sold by PIEDRAS that receipts owing to
the
CARL funding shall accrue.
The second issue in
this case pertains to petitioner’s legal standing to file the present
action.
Petitioner argues that as a citizen, he has the constitutional right to
be duly informed on matters of public concern, particularly about
government
transactions that involve public interest. Petitioner contends
that
the agreements negotiated by PCGG, PIEDRAS, RCBC and TRB were
deceitfully
intended and actually conducted to be outright sales and/or disposition
of OPMC shares held by PIEDRAS. As a lawyer, petitioner invokes
his
duty to uphold the Constitution and promote respect for the laws and
legal
processes. Petitioner likewise argues that as a landowner and
taxpayer,
he stands to lose in the diminution of the funds that ought to fund the
agrarian reform program. Finally, petitioner contends that as a
stockholder
of OPMC, he has personality to file this action considering that the
anomalous
transactions have been made public and may affect the viability of the
OPMC shares he holds.chanrobles virtuallaw libraryred
In their respective
comments, respondents argue that petitioner has no legal standing to
question
the subject agreements. The Sandiganbayan, in its decision,
stated
that petitioner has not made a case which shows that the PCGG abused
its
discretion. No disbursement of public funds collected primarily
through
taxation can be invoked by petitioner as basis for a taxpayer’s
suit.
Likewise, respondents PCGG, RCBC and TRB argue that petitioner has not
shown that he stands to be directly injured as a landowner by the acts
complained of since petitioner’s landholdings does not even reach the
5-hectare
requirement under the CARL. Respondent PCGG added that assuming
that
petitioner has the legal standing to file this action as a stockholder
of OPMC, the jurisdiction over such intra-corporate case belongs to the
Securities and Exchange Commission.cralaw:red
We regret that motivations,
however commendable, do not automatically bestow one with the
personality
to initiate a legal action. We have indeed validated the right of
concerned citizens to file actions on certain issues in the case of
Kilosbayan
v. Morato.[17]
However, it must be noted that such suits are allowable if the
constitutional
question they raise is of transcendental importance which must be
settled
early.[18]
Thus:
Standing is a special
concern in constitutional law because in some cases suits are brought
not
by parties who have been personally injured by the operation of law or
by official action taken, but by concerned citizens, taxpayers or
voters
who actually sue in the public interest. Hence the question in
standing
is whether such parties have “alleged such a personal stake in the
outcome
of the controversy as to assure that concrete adverseness which
sharpens
the presentation of issues upon which the court so largely depends for
illumination of difficult constitutional questions.” (Citing Baker v.
Carr,
369 U.S. 186, 7 L. Ed. 2d 633 [1962]).[19]
We fail to see how a
private corporation’s exercise of its pre-emptive rights to subscribe
to
additional shares could be of paramount national interest and how the
transactions
entered into by PIEDRAS could violate petitioner’s rights as a
citizen.
Standing is a concept in constitutional law and here no constitutional
question is actually involved.[20]
In the same light, while we admire petitioner’s zeal for upholding the
law and legal processes, there is no transgression upon which
petitioner
can build a solid case.chanrobles virtuallaw libraryred
Petitioner cannot likewise
invoke legal standing in his capacity as a landowner and
taxpayer.
Not every action filed by a taxpayer can qualify to challenge the
legality
of acts done by the government. It bears stressing that a
taxpayer’s
suit refers to a case where the act complained of directly involves the
illegal disbursement of public funds from taxation.[21]
Undeniably, as a taxpayer, petitioner would somehow be adversely
affected
by an illegal use of public money. When, however, no such unlawful
spending
has been shown, as in the case at bar, petitioner, even as a taxpayer,
cannot question the transaction validly executed by and between the
PIEDRAS
(even if the same be government-owned) and respondent banks for the
simple
reason that it is not privy to said contract. In fact, not a
single
centavo from the public coffers was spent in the agreements
involved.
Petitioner has absolutely no cause of action, and consequently no locus
standi in the instant case. As correctly pointed out by
respondent
RCBC, it has not been shown that the present case involves the
disbursement
of public funds. We have held time and again that it is only when
an act complained of involves the illegal expenditure of public money
that
the so-called taxpayer suit may be allowed.[22]
As a stockholder, petitioner
claims that the “anomalous” transactions have affected the viability of
the OPMC shares which he holds. He claims that the feuds spurred
by the transactions have caused the prices of OPMC shares to plunge,
thus
affecting his financial interests. We are not persuaded.
The
matters which petitioner complains of cannot be directly attributed to
any invalid or illegal action by PIEDRAS. PIEDRAS acted well
within
its right to exercise its pre-emptive rights as a corporate stockholder
of OPMC. We cannot grant the relief sought by petitioner when to
do so would be tantamount to unjustly sanctioning PIEDRAS in its
exercise
of a legal right. Moreover, if there was any question as to
PIEDRAS’s
resolution to subscribe to additional OPMC shares, only its own
stockholders
have legal capacity to lodge an action in court to enjoin the
transactions
assailed. Unfortunately, petitioner is not a stockholder of
PIEDRAS.cralaw:red
As to the third assignment
of error, petitioner calls attention to the fact that the tribunal,
while
dismissing his case for lack of jurisdiction, nonetheless commented on
the merits of the case even before the petition was given due
course.
Moreover, petitioner contends that the Sandiganbayan was “overly
technical”
in disposing of petitioner’s case and should have instead taken
judicial
notice of the fact that the issues raised by petitioner are undeniably
of immense public significance. Petitioner argues that the
agreements
involved in the case at bar were not genuine dacion en pago
transactions
but actual contracts of sale of future shares. The agreements
made
it possible for respondents RCBC and TRB to exercise the stock rights
of
PIEDRAS which were non-assignable.cralaw:red
Respondents counter
that the transactions were in accordance with the law and were a valid
act of the PCGG in the exercise of its conservation powers. The
PCGG
argued that PIEDRAS was left without any other source of funding since
the Land Bank, GSIS, SSS and other financing institutions were not able
to outrightly lend the necessary funds to it. Without the dacion
en pago transactions, the PCGG argued, the proportionate interest of
PIEDRAS
in OPMC would have been diluted much to the detriment of the Philippine
Government which owns its.cralaw:red
The issue pertaining
to the dacion en pago transactions is now moot and academic as far as
respondent
RCBC is concerned. A letter by respondent RCBC to PIEDRAS
management
dated May 10, 1994 contains an agreement forged between the PIEDRAS and
respondent RCBC that the payment of the amount advanced by respondent
bank
shall be paid by PIEDRAS in cash instead of OPMC shares.[23]
Considering that petitioner seeks to enjoin the transfer of the OPMC
shares
to respondent RCBC, this cause of action has been rendered moot when
the
dacion en pago transaction was not pursued by PIEDRAS and respondent
RCBC.
However, there is still a need to examine the nature of the dacion en
pago
transactions since the Stock Sharing Agreement between respondent TRB
and
PIEDRAS appears to be still effective.cralaw:red
Dacion en pago is the
delivery and transmission of ownership of a thing by the debtor to the
creditor as an accepted equivalent of the performance of the
obligation.
It is a special mode of payment where the debtor offers another thing
to
the creditor who accepts it as equivalent of payment of an outstanding
debt.[24]
In its modern concept, what actually takes place in dacion en pago is
an
objective novation of the obligation where the thing offered as an
accepted
equivalent of the performance of an obligation is considered as the
object
of the contract of sale, while the debt is considered as the purchase
price.[25]chanrobles virtuallaw libraryred
We do not see any infirmity
in either the MOA or the SSA executed between PIEDRAS and respondent
banks.
By virtue of its shareholdings in OPMC, PIEDRAS was entitled to
subscribe
to 3,749,906,250 class “A” and 2,499,937,500 class “B” OPMC
shares.
Admittedly, it was financially sound for PIEDRAS to exercise its
pre-emptive
rights as an existing shareholder of OPMC lest its proportionate
shareholdings
be diluted to its detriment. However, PIEDRAS lacked the
necessary
funds to pay for the additional subscription. Thus, it resorted
to
contract loans from respondent banks to finance the payment of its
additional
subscription. The mode of payment agreed upon by the parties was
that the payment would be made in the form of part of the shares
subscribed
to by PIEDRAS. The OPMC shares therefore were agreed upon by the
parties to be equivalent payment for the amount advanced by respondent
banks. We see the wisdom in the conditions of the loan
transaction.
In order to save PIEDRAS and/or the government from the trouble of
selling
the shares in order to raise funds to pay off the loans, an easier and
more direct way was devised in the form of the dacion en pago
agreements.cralaw:red
Moreover, we agree with
the Sandiganbayan that neither PIEDRAS nor the government sustained any
loss in these transactions. In fact, after deducting the shares
to
be given to respondent banks as payment for the shares, PIEDRAS stood
to
gain about 1,540,781,554 class “A” and 710,550,000 class “B” OPMC
shares
virtually for free. Indeed, the question that must be asked is
whether
or not PIEDRAS, in the exercise of its pre-emptive rights, would have
been
able to acquire any of these shares at all if it did not enter into the
financing agreements with the respondent banks.chanrobles virtuallaw libraryred
Lastly, a special civil
action for certiorari is limited to the determination of whether or not
public respondent acted without or in excess of jurisdiction or with
grave
abuse of discretion in rendering the assailed decisions.[26]
Grave abuse of discretion means such capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction, or, in other
words
where the power is exercised in an arbitrary or despotic manner by
reason
of passion or personal hostility, and it must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to
perform
the duty enjoined or to act at all in contemplation of law.[27]
We do not find any grave abuse of discretion on the part of the
Sandiganbayan
in this case.cralaw:red
WHEREFORE, in view of
the foregoing, the instant petition is DISMISSED and the Resolution of
the Sandiganbayan dated August 23, 1993, which dismissed Civil Case No.
0151, is AFFIRMED in toto.cralaw:red
Costs against petitioner.cralaw:red
SO ORDERED.
Davide, C.J., (Chairman),
Panganiban, Carpio, and Azcuna, JJ.,
concur.
____________________________
Endnotes:
[1]
Penned by Presiding Justice Francis Garchitorena; concurred in by
Justices
Jose Balajadia and Sabino de Leon, Jr.
[2]
Annex C, Rollo, pp. 62-67.chanrobles virtuallaw libraryred
[3]
Annex D, Rollo, pp. 69-70.chanrobles virtuallaw libraryred
[4]
Annex G, Rollo, pp. 74-89; docketed as Civil Case No. 0151.
[5]
Annex A, Rollo, pp. 49-54.chanrobles virtuallaw libraryred
[6]
G.R. No. L-77663, 12 April 1988, 159 SCRA 556.
[7]
Soriano III v. Yuzon, G.R. Nos. L-74910, L-75075, L-75094, L-76397,
L-79459,
and L-79520, 10 August 1988, 164 SCRA 226.
[8]
G.R. No. 89553, 7 April 1993, 221 SCRA 189.chanrobles virtuallaw libraryred
[9]
G.R. No. 132738, 23 February 2000, 326 SCRA 346.
[10]
Annex B-1 to B-6, Rollo, pp. 55-61.chanrobles virtuallaw libraryred
[11]
G.R. No. 85576, 8 June 1990, 186 SCRA 447.
[12]
Annex 2, Rollo, p. 188.chanrobles virtuallaw libraryred
[13]
Republic v. Sandiganbayan, G.R. Nos. 108292, 108368, 108548-49, and
108550,
10 September 1993, 226 SCRA 314.
[14]
Supra, at note 12.chanrobles virtuallaw libraryred
[15]
Annex B and Annex 3, Rollo, pp. 190-191.
[16]
Republic Act No. 6657.chanrobles virtuallaw libraryred
[17]
G.R. No. 118910, 17 July 1995, 246 SCRA 540.
[18]
Lim v. Executive Secretary, G.R. No. 151445, 11 April 2002, 380 SCRA
739.
[19]
Kilosbayan v. Morato, supra.chanrobles virtuallaw libraryred
[20]
The Anti-Graft League of the Philippines, Inc. v. San Juan, G.R. No.
97787,
1 August 1996, 260 SCRA 250.
[21]
Miranda v. Carreon, G.R. No. 14350, 11 April 2003.chanrobles virtuallaw libraryred
[22]
Lozada v. Comelec, G.R. No. L-59068, 27 January 1983, 120 SCRA 337.
[23]
Annex 1 to RCBC’s Rejoinder, Rollo, p. 292.chanrobles virtuallaw libraryred
[24]
Mamerta vda. De Jayme, et al. v. Court of Appeals, G.R. No. 128669, 4
October
2002, 390 SCRA 380.
[25]
Philippine Lawin Bus, Co. v. Court of Appeals, G.R. No. 130972, 23
January
2002, 374 SCRA 332.
[26]
Philippine Airlines, Inc. v. National Labor Relations Commission, G.R.
No. 115785, 4 August 2000, 337 SCRA 286.
[27]
Benito v. Commission on Elections, G.R. No. 134913, 19 January 2001,
349
SCRA 705. |