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) sequestered shares of stock in Eastern Telecommunications Philippines, Inc. (ETPI) held by the private respondents. The Sandiganbayan subsequently declared the sequestration orders automatically lifted. It ruled that the PCGG failed to file the required judicial action against these specific respondents within the period mandated by Section 26, Article XVIII of the 1987 Constitution . The Republic assailed this resolution for grave abuse of discretion.
The PCGG had filed Civil Case No. 0009 before the Sandiganbayan for the reversion of ill-gotten wealth, including ETPI shares allegedly held for the benefit of principal defendants like Jose Africa and Ferdinand Marcos. While the private respondents were not originally named as defendants, they were later allowed to intervene in this case. The list of corporations appended to the complaint in Civil Case No. 0009 included ETPI.

ISSUE

Did the Sandiganbayan commit grave abuse of discretion in automatically lifting the sequestration over the ETPI shares for the PCGG’s failure to file a direct judicial action against the private respondents?

RULING

No, the Sandiganbayan did not gravely abuse its discretion. The constitutional requirement for filing a judicial action to maintain a sequestration is mandatory. The Court distinguished the instant case from its earlier ruling in Republic vs. Sandiganbayan (240 SCRA 376). In that precedent, judicial actions were filed against the individuals suspected as “dummies,” and the corporations, though not impleaded, were specifically alleged in the body of the complaints as instruments of ill-gotten wealth.
Here, no such judicial action was instituted against the private respondents themselves. Their voluntary intervention in the separate Civil Case No. 0009, which was filed against different principal defendants, does not constitute the judicial action contemplated by the Constitution against them as holders of the sequestered property. The constitutional provision aims to prevent indefinite sequestration without judicial recourse. The PCGG’s failure to initiate an action directly against these respondents within the prescribed period warranted the automatic lifting of the sequestration orders over their specific ETPI shares. The Sandiganbayan’s resolution was a correct application of the constitutional safeguard.