G.R. No. 231648 & 231829, January 16, 2023
Republic of the Philippines, Petitioner, vs. Nieto A. Racho, Respondent / Nieto A. Racho, Petitioner, vs. Republic of the Philippines, Respondent.

FACTS

Prompted by a complaint, the Ombudsman investigated Nieto A. Racho’s alleged unexplained wealth, revealing substantial bank deposits not declared in his Statements of Assets, Liabilities, and Net Worth (SALN). The Ombudsman filed administrative and criminal complaints against Racho. In a related administrative case (Office of the Ombudsman v. Racho), the Supreme Court found Racho guilty of dishonesty for failing to disclose the deposits and for his intent to cover up their source. Meanwhile, the Republic, through the Office of the Ombudsman-Visayas, filed a Petition for Forfeiture of Unlawfully Acquired Wealth under Republic Act No. 1379 before the Regional Trial Court (RTC). The RTC rendered a Decision ordering the forfeiture of P5,793,881.39 in favor of the State. Racho appealed to the Court of Appeals (CA). The CA affirmed the RTC Decision but modified it by excluding P1,430,492.56, representing the share of his wife, Lourdes Racho, in the conjugal partnership, reducing the forfeitable amount to P4,363,388.83. Both parties filed Petitions before the Supreme Court: the Republic arguing that the CA lacked appellate jurisdiction (as it belongs to the Sandiganbayan) and that the CA erred in deducting the conjugal share; Racho arguing that the deposits were not ill-gotten and that half should be considered conjugal property, and that his wife was an indispensable party.

ISSUE

1. Whether the Court of Appeals erred in taking cognizance of an appeal from a regional trial court’s decision in a civil forfeiture case.
2. Whether the Court of Appeals erred in finding that the bank deposits constitute ill-gotten wealth.

RULING

1. Yes, the Court of Appeals erred in taking cognizance of the appeal. The Supreme Court held that the Sandiganbayan exercises exclusive appellate jurisdiction over civil forfeiture cases falling within the jurisdiction of regional trial courts. Republic Act No. 8249 , which was in force during the pendency of the case, provides that the Sandiganbayan shall have exclusive appellate jurisdiction over final judgments, resolutions, or orders of regional trial courts, whether in the exercise of their original or appellate jurisdiction. Since the forfeiture petition was filed under Republic Act No. 1379 , and Racho, as a provincial board member, was a public official with a salary grade below 27 (placing original jurisdiction with the RTC), the appeal from the RTC’s decision should have been lodged with the Sandiganbayan, not the Court of Appeals. Therefore, the CA’s Decision and Resolution are null and void for lack of jurisdiction.
2. No, the Court of Appeals did not err in finding the bank deposits constitute ill-gotten wealth, but it erred in deducting the conjugal share. The Supreme Court, applying the doctrine of conclusiveness of judgment, upheld the factual findings from the related administrative case (Office of the Ombudsman v. Racho), which established that Racho amassed wealth manifestly out of proportion to his lawful income and was guilty of dishonesty for failing to disclose the deposits. In civil forfeiture proceedings under RA 1379, the burden shifts to the public officer to show that the property was lawfully acquired. Racho failed to present evidence to overcome the prima facie case established by the Republic. Regarding the conjugal share, the Court ruled that the forfeiture under RA 1379 is a penalty for the public officer’s unlawful acquisition; it is personal to the officer. The entire amount of unlawfully acquired property is subject to forfeiture, and no deduction for a supposed conjugal share of the spouse is allowed. The wife is not an indispensable party in such proceedings. Consequently, the Supreme Court granted the Republic’s Petition, denied Racho’s Petition, and reinstated the RTC’s Decision ordering the forfeiture of the full amount of P5,793,881.39.