G.R. No. 132738 February 23, 2000
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioner, vs. THE HON. SANDIGANBAYAN (1st Div.); HON. IGNACIO M. CAPULONG, Judge, Regional Trial Court, Branch 134, Makati; ROBERTO V. HARINA, Branch Sheriff; RODOLFO M. CUENCA, WORLD UNIVERSAL TRADING & INVESTMENT COMPANY, S.A.; CONSTRUCTION DEVELOPMENT CORPORATION OF THE PHILIPPINES and/or PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, respondents.

FACTS

The Presidential Commission on Good Government (PCGG) sequestered the Philippine National Construction Corporation (PNCC), formerly CDCP, and filed a case for ill-gotten wealth against Rodolfo Cuenca before the Sandiganbayan. While that case was pending, World Universal Trading & Investment Co., S.A. (WUTIC), claiming to be an assignee of a Cuenca-owned Hong Kong company, filed a complaint before the Regional Trial Court (RTC) of Makati to enforce a Hong Kong money judgment against CDCP International, a PNCC subsidiary. The RTC ruled for WUTIC, piercing the corporate veil to hold PNCC liable. This decision was affirmed by the Court of Appeals and became final after the Supreme Court denied review. A writ of execution was subsequently issued.
The PCGG, discovering the execution, contended that the RTC had no jurisdiction because the case involved sequestered assets. It argued that WUTIC’s claim might be a disguised claim of Cuenca to dissipate sequestered assets. The PCGG issued a resolution enjoining PNCC from paying and filed a petition for certiorari with the Sandiganbayan to annul the RTC decision. The Sandiganbayan dismissed the petition motu proprio, ruling it lacked jurisdiction to annul a final RTC judgment in a civil case for enforcement of a foreign judgment, which was not directly an ill-gotten wealth case.

ISSUE

Whether the Sandiganbayan has jurisdiction to annul the final and executory decision of the Regional Trial Court in a case for the enforcement of a foreign judgment against a sequestered corporation.

RULING

Yes, the Sandiganbayan has jurisdiction. The Supreme Court granted the petition, setting aside the Sandiganbayan’s resolution. The legal logic is anchored on the nature of sequestered assets and the expansive jurisdiction of the Sandiganbayan over cases related to ill-gotten wealth. Sequestered assets are in custodia legis, and their preservation is paramount pending final adjudication of the main ill-gotten wealth case. The Court found that WUTIC’s claim was not an ordinary money claim but was intrinsically related to the sequestration case against Cuenca, as WUTIC was potentially a dummy corporation and the claim could be a scheme to deplete the sequestered assets of PNCC.
Consequently, the action for enforcement of the foreign judgment, while civil in nature, is deemed incidental to or connected with the recovery of ill-gotten wealth. Under Republic Act No. 7975, the Sandiganbayan has original jurisdiction over all cases filed pursuant to or in connection with Executive Orders on ill-gotten wealth. Therefore, it possesses the ancillary jurisdiction to annul an RTC decision that threatens to dissipate the very assets under its custodial authority in the main case. The Sandiganbayan’s dismissal based on a narrow view of its jurisdiction was erroneous, as its power extends to preventing actions that would render its primary jurisdiction over the sequestered property nugatory.