G.R. No. 140615 . February 19, 2001.
REPUBLIC OF THE PHILIPPINES, represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), petitioner, vs. THE SANDIGANBAYAN (Second Division) and RODOLFO T. ARAMBULO, respondents.

FACTS

The PCGG sequestered shares in Piedras Petroleum Co., Inc., held by seven individuals, including respondent Rodolfo Arambulo, alleging they were nominees of Roberto Benedicto and that the shares were funded with ill-gotten wealth from Imelda Marcos. The Republic, through the PCGG, filed Civil Case No. 0034 for reconveyance of ill-gotten wealth. The complaint did not specifically list Piedras shares as ill-gotten assets, though a catch-all clause covered all sequestered assets. A Compromise Agreement was later entered into between the PCGG and principal defendant Benedicto, which the Sandiganbayan approved. Arambulo was not a party to this agreement.
Subsequently, Arambulo filed a Motion for Execution based on this Compromise Agreement, claiming ownership of 1/7 of Piedras shares and seeking payment for them, arguing his shares were not included in the properties Benedicto ceded to the government. The Sandiganbayan granted the motion, issuing resolutions that effectively recognized Arambulo’s ownership and awarded him monetary relief. The PCGG petitioned the Supreme Court, arguing the Sandiganbayan acted without jurisdiction or with grave abuse of discretion by awarding relief to a non-party without requiring him to first prove his ownership.

ISSUE

Did the Sandiganbayan commit grave abuse of discretion amounting to lack or excess of jurisdiction in granting affirmative relief to respondent Arambulo based on a Compromise Agreement to which he was not a party?

RULING

No. The Supreme Court dismissed the petition, upholding the Sandiganbayan’s resolutions. The legal logic is anchored on the nature of the proceedings and the burden of proof. The Sandiganbayan, in its assailed resolutions, meticulously examined the record and found that the PCGG’s amended complaint did not specifically allege that Arambulo’s Piedras shares were ill-gotten. The catch-all clause in the complaint was insufficient to automatically taint the shares, especially since no cross-claims were filed by other defendants claiming ownership over them.
Critically, the PCGG failed to substantiate its core allegation that the funds for the shares originated from Imelda Marcos’s ill-gotten wealth. The evidence presented, a check voucher, merely showed a withdrawal from an Investment Management Account but did not conclusively prove that the account belonged to Mrs. Marcos. Consequently, the PCGG did not discharge its burden of proving the illicit origin of the property. The Sandiganbayan, therefore, did not gravely abuse its discretion. Its action was based on a valid evaluation of the evidence and the procedural posture of the case, where the government’s claim over the specific shares remained unproven, thereby leaving the registered shareholder’s claim intact. The ruling emphasizes that sequestration does not automatically equate to ownership by the state, and the government must prove its case with competent evidence.