ARANETA V.

SANDIGANBAYAN
106718 March 20, 1995
DOCTRINE

A careful reading of Sections 2(a) and 3, of Executive Order No. 1, in relation with Sections 1, 2
and 3 of Executive Order No. 14, show that what the authority of the respondent PCGG to
investigate and prosecute covers are:

(a) The investigation and prosecution of the civil action for the recovery of ill-gotten wealth under
Republic Act No. 1379, accumulated by former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates, whether located in the Philippines or abroad,
including the takeover or sequestration of all business enterprises and entities owned or controlled
by them, during his administration, directly or through his nominees, by taking undue advantage
of their public office and/or using their powers, authority, influence, connections or relationship

FACTS

Upon receipt of a complaint by the PNB, the NIDC and the PNEI, the PCGG conducted a
preliminary investigation on the supposed transfer of a major portion of the assets of PNEI to
NETI, a newly organized corporation principally owned and controlled by Araneta III, a son-in-law
of the late President Ferdinand E. Marcos, under certain terms and conditions that made it
possible to permit PNEI assets, including those which were not included in a projected sale to
NETI, to be prematurely delivered to the latter enabling it to operate said assets even before the
execution of the purchase agreement. During the investigation, Araneta III, who was on "forced"
exile abroad, appeared through counsel and moved for an extension of time to file his counter-
affidavit and other evidence conditioned on his return. This motion was denied by the PCGG.

After wrapping up its preliminary investigation against averred close associates of the late
President, that included, besides herein petitioner, Fernando Balatbat, Jr., Lorenzo Vergara,
Ramon Aviado, Jr., Placido Mapa, Jr., Dominador Lopez, Jr., Fernando Maramag, Jr., and Jose
Crisanto, Jr., the PCGG filed its information with the Sandiganbayan.

Araneta III's co-accused, Fernando Balatbat, moved to quash the amended information on the
ground that the PCGG had no authority to conduct investigation and to file the information on the
ground that the crime charged was merely an ordinary graft case and not one that relates to the
recovery of ill-gotten wealth. Balatbat's motion was denied by the Sandiganbayan in its resolution
of 11 February 1987. In a petition for certiorari before this Court, docketed G.R. No. 78314,
Balatbat questioned Sandiganbayan's denial. In a resolution, dated 21 May 1987,3 this Court
dismissed the petition. This dismissal paved the way for all the accused, with the exception of
Araneta III, to be arraigned before the Sandiganbayan. After the prosecution had submitted its
evidence and had rested its case, the accused filed their respective demurrer to the evidence.

When the official ban against his return to the country was lifted, some time in the latter part of
1991, petitioner came back.4 Forthwith, Araneta III posted bail for his provisional release. On 18
December 1991, prior to his arraignment, Araneta III filed an omnibus motion to quash the
amended information or to refer the case to the Ombudsman for reinvestigation or preliminary
investigation. He averred that the PCGG did not have the legal authority to file the information for
alleged graft and corruption under Republic Act ("R.A..") 3019, as amended, citing the decisions
of this Court in Cruz, Jr., vs. Sandiganbayan,5 and Cojuangco, Jr., vs. PCGG.6

In its now challenged resolutions, dated 11 June and 14 August 1992, the Sandiganbayan denied
petitioner's motion to quash the amended information or to refer the case to the Ombudsman for
reinvestigation or preliminary investigation.

ISSUE
HELD

Back to the instant case, we find the petition to be devoid of merit.

This Court, in Cruz, Jr., vs. Sandiganbayan, 194 SCRA 474, reiterating its ruling in Cojuangco,
Jr., vs. PCGG, 190 SCRA 226 (cited by petitioner himself), has said: 10

A careful reading of Sections 2(a) and 3, of Executive Order No. 1, in relation with
Sections 1, 2 and 3 of Executive Order No. 14, show that what the authority of the
respondent PCGG to investigate and prosecute covers are:

(a) The investigation and prosecution of the civil action for the
recovery of ill-gotten wealth under Republic Act No. 1379,
accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates,
whether located in the Philippines or abroad, including the takeover
or sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through his
nominees, by taking undue advantage of their public office and/or
using their powers, authority, influence, connections or relationship

(b) The investigation and prosecution of such offenses committed

in the acquisition of said ill-gotten wealth as contemplated under
Section 2(a) of Executive Order No. 1.

However, other violation of the Anti- Graft and Corrupt Practices Act not otherwise
falling under the foregoing categories, require a previous authority of the President
for the respondent PCGG to investigate and prosecute the same in accordance
with Section 2(b) of Executive Order
No. 1. Otherwise, jurisdiction over such cases is vested in the Ombudsman and
other duly authorized investigating agencies as the provincial and city prosecutors,
their assistants, the Chief State Prosecutor and his assistants, and the state
prosecutors.

Thus for a penal violation to fall under the jurisdiction of the respondent PCGG
under Section 2(a) of Executive Order No. 1, the following elements must concur:

(1). It must relate to alleged ill-gotten wealth;

 (2). Of the late President Marcos, his immediate family, relatives,
subordinates and close associates;

(3). Who took undue advantage of their public office and/or used
their power, authority, influence, connections or relationship.
(Emphasis supplied)

It does seem, indeed, that a mere allegation in an anti-graft complaint that the accused is a relative
of then President Marcos will not suffice to enable the PCGG to take cognizance of the case.
There must, in addition, be a showing that the accused has unlawfully accumulated wealth by
virtue of such close relation with the former President.