G.R. Nos. 173553-56 December 7, 2007
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioner, vs. LUCIO C. TAN, et al., respondents.

FACTS

In 1986 and early 1987, the Presidential Commission on Good Government (PCGG) issued several sequestration orders against shares of stock in various corporations (Allied Banking Corporation, Foremost Farms, Inc., Fortune Tobacco Corporation, and Shareholdings, Inc.) held by respondents Lucio C. Tan and his associates. The PCGG acted under its mandate to recover ill-gotten wealth, alleging the shares were owned or controlled by former President Ferdinand Marcos, his family, or cronies. The sequestration orders directed the respondents not to transfer or encumber the shares without PCGG authority.
The respondents filed petitions to lift the sequestration, which the PCGG did not act upon. Consequently, the respondents filed petitions for certiorari, prohibition, and injunction with the Supreme Court to nullify the orders. The Supreme Court referred the cases to the Sandiganbayan. In their petitions, respondents argued the sequestration violated their right to due process. They later supplemented their plea by invoking Section 26, Article XVIII of the 1987 Constitution, which requires a showing of a prima facie case before issuing a sequestration order.

ISSUE

Whether the Sandiganbayan correctly declared the writs of sequestration null and void for lack of a prima facie factual foundation.

RULING

Yes, the Supreme Court affirmed the Sandiganbayan’s ruling. The legal logic rests on the constitutional and jurisprudential requirement that a sequestration order, being a provisional and extraordinary remedy, must be based on a prima facie showing that the properties are ill-gotten wealth. Section 26, Article XVIII of the 1987 Constitution explicitly mandates that “a sequestration or freeze order shall be issued only upon showing of a prima facie case.”
The Court examined the records and found that the PCGG failed to present sufficient evidence to establish such a prima facie case at the time the sequestration orders were issued. The documents submitted by the PCGG were largely photocopies, many of which were not even original records but copies of certified machine copies from its files. The Court emphasized that the requirement of a prima facie showing is not a mere formality but a substantive safeguard against arbitrary deprivation of property. Since the PCGG could not demonstrate that the sequestration was grounded on factual bases meeting the prima facie standard, the orders were issued without legal authority. Consequently, the Sandiganbayan correctly declared them null and void, upholding the respondents’ right to due process.