Bataan Shipyard Engineering Co., Inc. vs.

PCGG
(G.R. No. 75885 May 27, 1987)

Facts:

Presidential Commission on Good Government (PCGG) was formed in order to recover

ill-gotten wealth allegedly acquired by former President Marcos and his cronies. President
Aquino then issued two executive orders in 1986 and pursuant thereto, a sequestration and a
takeover order were issued against private corporation Bataan Shipyard & engineering Co., Inc.
(BASECO) alleged to be in actuality owned and controlled by the Marcoses through the
Romualdez family, and in turn, through dummy stockholders.

The sequestration order issued in 1986 required, among others, that BASECO produce
corporate records from 1973 to 1986 under pain of contempt of the PCGG if it fails to do so.
BASECO assails this order as it avers, among others, that it is against BASECO’s right against
self-incrimination and unreasonable searches and seizures.

Thus, challenged in this special civil action of certiorari and prohibition by petitioner
BASECO. are: (1) Executive Orders Numbered 1 and 2, promulgated on February 28, 1986 and
March 12, 1986, respectively, and (2) the sequestration, takeover, and other orders issued, and
acts done, in accordance with said executive orders by the Presidential Commission on Good
Government and/or its Commissioners and agents against petitioner.

BASECO further prays that the Court 1) declare unconstitutional and void Executive
Orders Numbered 1 and 2; 2) annul the sequestration order, and all other orders subsequently
issued and acts done on the basis thereof, inclusive of the takeover order and the termination of
the services of the BASECO executives.

Issue:

Whether or not BASECO’s right against self-incrimination and unreasonable searches and
seizures was violated.

Held:

No. The order to produce documents was issued upon the authority of Section 3 (e) of
Executive Order No. 1, treating of the PCGG's power to "issue subpoenas requiring * * the
production of such books, papers, contracts, records, statements of accounts and other
documents as may be material to the investigation conducted by the Commission. It is
elementary that the right against self-incrimination has no application to juridical persons. While
an individual may lawfully refuse to answer incriminating questions unless protected by an
immunity statute, it does not follow that a corporation, vested with special privileges and
franchises, may refuse to show its hand when charged with an abuse of such privileges.
Corporations are not entitled to all of the constitutional protections, which private individuals
have.

The Court also cited a US jurisprudence (Wilson v. United States, 55 Law Ed., 771, 780)
where it stated that the corporation is a creature of the state. It is presumed to be incorporated

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for the benefit of the public. It received certain special privileges and franchises, and holds them
subject to the laws of the state and the limitations of its charter. As such, its powers are limited
by law, and its rights to act as a corporation are only preserved to it so long as it obeys the laws
of its creation. The cited case further asserted that there is a reserve right in the legislature to
investigate its contracts and find out whether it has exceeded its powers and would be a strange
anomaly to hold that a state, having chartered a corporation to make use of certain franchises,
could not, in the exercise of sovereignty, inquire how these franchises had been employed, and
whether they had been abused, and demand the production of the corporate books and papers
for that purpose.

The constitutional safeguard against unreasonable searches and seizures finds no

application to the case at bar either. There has been no search undertaken by any agent or
representative of the PCGG, and of course no seizure on the occasion thereof since BASECO
was merely ordered to produce the corporate records.