G.R. No. 108838 July 14, 1997
PHILIPPINE AMUSEMENT AND GAMING CORPORATION, petitioner, vs. COURT OF APPEALS, HON. JULIO R. LOGARTA, in his capacity as Presiding Judge, RTC-Branch 63, Makati, MM and CASINO OPERATOR CORPORATION and EDUARDO MARCELO, respondents.

FACTS

Pursuant to a “Contract to Operate” dated December 17, 1985, petitioner Philippine Amusement and Gaming Corporation (PAGCOR) granted private respondent Philippine Casino Operators Corporation (PCOC) the exclusive right to manage gambling casinos. The Presidential Commission on Good Government (PCGG) sequestered PCOC on March 19, 1986. PAGCOR then transported gaming and office equipment from the Laoag casino to Metro Manila for safekeeping. On June 12, 1986, private respondent Eduardo Marcelo intercepted the trucks and diverted the cargo to his compound. PAGCOR filed a civil case for recovery of personal property before the Makati Regional Trial Court (RTC), which issued a writ of replevin, and the equipment was turned over to PAGCOR. After PAGCOR rested its case, private respondents filed a demurrer to evidence, arguing the RTC lacked jurisdiction because the properties were under sequestration and that PAGCOR failed to prove ownership. Judge Julio Logarta granted the demurrer, dismissed the case for lack of jurisdiction, and lifted the writ of replevin, ruling the Sandiganbayan had exclusive jurisdiction. The Court of Appeals affirmed the RTC’s orders. PAGCOR elevated the case to the Supreme Court.

ISSUE

1. Whether the Regional Trial Court (RTC) had jurisdiction over PAGCOR’s action for recovery of personal property despite the sequestration of PCOC by the PCGG.
2. Whether the issue of ownership over the subject properties was properly resolved by the lower courts.

RULING

1. On Jurisdiction: The Supreme Court held that the RTC retained jurisdiction. The fact of sequestration alone did not automatically oust the RTC of jurisdiction. For the Sandiganbayan’s exclusive jurisdiction under Executive Order No. 14 to be invoked, the PCGG must be a party to the suit, either as plaintiff or defendant. In this case, the PCGG was not impleaded; the complaint was solely between PAGCOR and private respondents PCOC and Marcelo. Therefore, the RTC had jurisdiction under Section 19 of Batas Pambansa Blg. 129 over an action for recovery of personal property. The cases of PCGG v. Peña and PCGG v. Nepomuceno, cited by the lower courts, were inapplicable as they involved the PCGG as a party.
2. On Ownership: The Supreme Court ruled that the issue of ownership was not properly resolved. The demurrer and the RTC’s dismissal principally focused on the lack of jurisdiction. The RTC’s finding on ownership was too general and lacked explanation, indicating the issue was given shallow consideration. Since the demurrer was granted on jurisdictional grounds, not on the merits, and private respondents were not given the opportunity to present their evidence, the more prudent action was to remand the case to the RTC for reception of evidence and further proceedings on the factual matter of ownership.
DISPOSITIVE PORTION: The petition was GRANTED. The assailed orders of the RTC and the Decision of the Court of Appeals were REVERSED and SET ASIDE. The case was REMANDED to the RTC for reception of evidence and further proceedings.