G.R. No. 106244 , January 22, 1997
Republic of the Philippines, petitioner, vs. Honorable Sandiganbayan, Victor Africa, et al., respondents.

FACTS

The Presidential Commission on Good Government (PCGG) filed a complaint (Civil Case No. 0009) before the Sandiganbayan for the recovery of alleged ill-gotten wealth, specifically including shares in Eastern Telecommunications Philippines, Inc. (ETPI). The complaint named defendants including Jose L. Africa and Manuel H. Nieto, Jr., alleging they held ETPI shares for the benefit of Ferdinand and Imelda Marcos. Private respondents, including Victor Africa and other relatives, were registered stockholders of ETPI but were not named as defendants in the complaint. Their shares were, however, sequestered, preventing them from receiving dividends. They successfully intervened twice to claim dividends and later filed a Motion for Declaration of Non-Sequestration.
Private respondents argued the sequestration was invalid or, if initially valid, was automatically lifted under the 1987 Constitution . Section 26, Article XVIII requires a judicial action to be filed within six months from the issuance of a sequestration order; otherwise, the order is deemed lifted. The Sandiganbayan granted their motion, ruling that since no judicial proceeding was commenced against them personally within the constitutional period, the sequestration over their shares was automatically lifted.

ISSUE

Whether the Sandiganbayan committed grave abuse of discretion in declaring the sequestration over the shares of private respondents automatically lifted for lack of a timely judicial action filed against them.

RULING

The Supreme Court denied the petition and affirmed the Sandiganbayan. The legal logic is anchored on fundamental due process and the clear constitutional mandate. The Court emphasized that before a person can be deprived of property, they must be informed of the claim and given an opportunity to defend themselves. Impleading them as a defendant is a basic requisite. Here, private respondents were never made parties to Civil Case No. 0009. The government’s claim that the action against the named defendants constituted a judicial action involving private respondents’ shares was rejected. A judicial action, to prevent the automatic lifting of sequestration under the Constitution, must be commenced against the owners of the sequestered property. Allowing the government to recover property from persons not named as defendants in a case filed against others is a highly irregular procedure that violates due process. Since no case was filed against private respondents within the six-month period, the constitutional consequence—automatic lifting of sequestration—was correctly applied by the Sandiganbayan. The government’s failure to implead them within the prescribed period was fatal to its claim over the shares.