Republic v. Sandiganbayan, G.R No.

152154, 18 November 2003

Facts
On December 17, 1991, the Republic of the Philippines, represented by the Presidential
Commission on Good Government (PCGG), filed a petition for forfeiture against Ferdinand E.
Marcos and Imelda R. Marcos before the Sandiganbayan. The petition sought to declare US$356
million (now estimated at over US$658 million, including interest) deposited in escrow at the
Philippine National Bank as ill-gotten wealth under Republic Act No. 1379. The funds were
previously held in various Swiss banks through foreign foundations. Additionally, the petition
sought the forfeiture of US$25 million and US$5 million in treasury notes that exceeded the
Marcos couple's legitimate income. Respondents, including Imelda R. Marcos and other Marcos
children, filed their answer on October 18, 1993.
Before the pre-trial, General and Supplemental Agreements were executed between the
Marcos children and the PCGG Chairman for a global settlement of the Marcos family's assets.
Respondent Marcos children later filed a motion for the approval and enforcement of these
agreements. In 1995, the Republic filed a request in Switzerland for the immediate transfer of the
deposits to an escrow account in the PNB, which was granted. After legal proceedings in
Switzerland, the funds were remitted to the Philippines in 1998. Respondent Marcos children
then moved to place the funds in custodia legis, claiming the deposit was in danger of
dissipation.
In 2000, the Sandiganbayan granted the Republic's motion for summary judgment,
declaring the Swiss deposits as unlawfully acquired and forfeited in favor of the State. However,
in 2002, the Sandiganbayan reversed its decision, stating that the evidence did not establish
ownership of the funds by the Marcoses. The Republic filed a petition, arguing that the
Sandiganbayan committed grave abuse of discretion. The case revolves around the alleged ill-
gotten wealth of the Marcoses and the legal proceedings to determine the forfeiture of the Swiss
deposits.

Issue
Whether or not the petitioner (Republic of the Philippines) has successfully proven its
case for the forfeiture of the Swiss deposits amounting to more than US$658 million, which were
allegedly unlawfully acquired by Ferdinand E. Marcos, his estate/heirs, and Imelda R. Marcos.

Ruling and Application of the Special Penal Law

 In its deliberations, the court duly recognizes the existence of an inchoate right of
ownership over the Swiss deposits held by both the Republic of the Philippines and the
Marcoses. This acknowledgment underscores that should the investigation reveal the account's
lawful origin, either party, be it the Republic or the Marcoses, may relinquish its claim to the
other, emphasizing a reciprocal arrangement.
Furthermore, the court takes note of Imelda Marcos's explicit affirmation of an agreement
with the Republic. Specifically, she expresses her commitment to the release and transfer of US
Dollar 150 million for proper disposition, with the understanding that such action does not
prejudice the final outcome of the litigation regarding the ownership of the remaining funds.
The court's determination rests significantly on the admissions made by the Marcoses
themselves regarding ownership of the Swiss bank deposits. These admissions are found in
various forms, encompassing statements made by Imelda Marcos, motions submitted, and an
Undertaking executed by the Presidential Commission on Good Government (PCGG), the
Philippine National Bank (PNB), and the Marcos foundations.
Highlighting a legal doctrine, the court underscores that an admission made in the
pleadings is binding and conclusive upon the party making such an admission. This doctrine
strengthens the position that the Marcoses' acknowledgment of ownership cannot be contested by
them. Dismissing an argument asserting the indispensability of foreign foundations as parties to
the proceedings, the court asserts that their non-inclusion is not fatal to the case. According to the
court, the foreign foundations' participation was deemed unnecessary, emphasizing that their
absence did not jeopardize the proceedings. Even if the foreign foundations were considered
indispensable parties, the court deems the failure to implead them as a curable error.
Emphasizing the principle that non-joinder is not a ground for dismissal, the court maintains that
such an omission does not invalidate the proceedings and does not warrant the annulment of the
judgment.
In reaching its conclusion, the court holds that the Swiss deposits should be categorized
as ill-gotten wealth. This determination arises from the Marcoses' inability to substantiate the
lawful acquisition of these assets. The court underscores that the burden of proof rested on the
Marcoses, and their failure to provide convincing evidence justifying the acquisition resulted in
the forfeiture of the assets in favor of the State.
The court dismisses the argument challenging the absence of authenticated translations of
the Swiss decisions, asserting that the Sandiganbayan's decision was not contingent upon such
translations. It clarifies that the sufficiency of evidence available supports the ruling in favor of
the Republic. Consequently, the court grants the petition, setting aside the Sandiganbayan's
resolution, and decrees the forfeiture of the Swiss deposits in favor of the Republic of the
Philippines.
In substantiating its decision, the court relies on the relevant provisions of Republic Act
No. 1379, particularly Section 2 establishing prima facie evidence of unlawfully acquired
property if it is manifestly out of proportion to their salary and other lawful income and Section 6
outlining the judgment on unlawfully acquired property. Where a public officer or employee is
unable to prove lawful acquisition of the property in question, it empowers the court to declare
such property forfeited in favor of the State.This section outlines the procedure when a
respondent (public officer or employee) is unable to prove lawful acquisition of the property in
question. It empowers the court to declare such property forfeited in favor of the State.