G.R. No. 247439, August 23, 2023.
Sheriff Albert A. Dela Cruz of the Sandiganbayan Security and Sheriff Services, The Sandiganbayan Security and Sheriff Services, Petitioners, vs. Wellex Group, Inc., Respondent.

FACTS

This case involves the forfeited ill-gotten wealth of former President Joseph Estrada, specifically 450,000,000 shares of Waterfront Philippines, Inc. (Waterfront Shares) owned by respondent Wellex Group, Inc. (Wellex). In 2000, Wellex borrowed ₱500,000,000.00 from an Investment Management Account (IMA Account) at Equitable-PCI Bank (now BDO) under the name “Jose Velarde,” which was proven to be owned by former President Estrada. The loan was secured by a mortgage on the Waterfront Shares. Wellex failed to pay the loan upon maturity in 2001. In 2007, former President Estrada was convicted of Plunder, and the Sandiganbayan ordered the forfeiture of his ill-gotten wealth, including the IMA Account and its assets (the Waterfront Shares). Wellex filed a Petition for Certiorari (G.R. No. 187951) challenging the inclusion of the shares in the forfeiture, but the Supreme Court, in a 2012 Decision, affirmed the forfeiture, ruling the IMA Account assets were traceable to ill-gotten wealth. Concurrently, in 2009, Wellex filed a Complaint for Recovery of Possession (Civil Case No. 09-399) with the RTC, claiming ownership and full payment of the loan. The RTC initially dismissed the case, but Wellex appealed. In a 2016 Decision (G.R. No. 211098), the Supreme Court granted Wellex’s petition and remanded the case to the RTC for “further proceedings.” The Court held that while the Waterfront Shares were forfeited, the forfeiture did not invalidate the underlying loan; the State was merely subrogated to the rights of BDO as creditor. As subrogee, the State must avail of the same remedies as the original creditor (e.g., demand payment, foreclosure, or collection action), and Wellex must be afforded the opportunity to assert any claims or defenses. Upon remand, the RTC proceeded to trial and, in a 2019 Decision, ruled in favor of Wellex, ordering the delivery of the shares based on its finding that the State’s right to collect the loan or foreclose the mortgage had prescribed. Petitioners (the Sheriff and Sandiganbayan Security and Sheriff Services) filed the present Petition for Review, arguing the RTC erred in conducting a new trial and in upholding the defense of prescription.

ISSUE

1. Is the Petition for Review procedurally defective for being filed out of time?
2. Did the RTC err in construing the phrase “further proceedings” in the dispositive portion of the 2016 Decision as a mandate to proceed with a new trial of the case?
3. Did the RTC commit a reversible error in upholding Wellex’s claim of prescription?

RULING

1. No, the Petition was timely filed. The Court found that the petitioners received a copy of the RTC’s May 16, 2019 Decision on June 17, 2019, and filed their motion for reconsideration on July 1, 2019, which was within the 15-day reglementary period. The motion for reconsideration was denied on August 21, 2019, and petitioners received this order on September 2, 2019. They filed the Petition for Review on September 17, 2019, which was within the 15-day period from notice of the denial. Thus, the petition was filed on time.
2. No, the RTC did not err in proceeding with the trial. The Supreme Court clarified that its 2016 Decision, which remanded the case for “further proceedings,” intended for the RTC to conduct a full-blown trial to determine the civil issues between the parties. The 2016 Decision explicitly stated that the forfeiture did not extinguish the underlying loan obligation and that the State, as subrogee, must exercise the rights of the original creditor. It also held that Wellex’s cause of action partook of a valid third-party claim, and all civil issues should be properly ventilated. Therefore, the RTC correctly interpreted “further proceedings” as a mandate to proceed with the trial of Civil Case No. 09-399.
3. Yes, the RTC erred in upholding Wellex’s defense of prescription. The Supreme Court ruled that the defense of prescription cannot be invoked against the State in the recovery of ill-gotten wealth. Section 6 of Republic Act No. 7080 (the Anti-Plunder Law) explicitly provides that “the right of the State to recover properties unlawfully acquired by public officers from them or from their nominees or transferees shall not be barred by prescription, laches, or estoppel.” This is rooted in the public policy that the State must be able to recover properties acquired through plunder without being hindered by time-based defenses. The Court emphasized that the State’s right to recover ill-gotten wealth is imprescriptible. Since the Waterfront Shares were adjudged as part of the ill-gotten wealth forfeited from former President Estrada, the State’s right to recover them is not subject to prescription. The RTC’s reliance on the Civil Code provisions on prescription of mortgage or contract actions was erroneous, as those general laws cannot prevail over the special law (Anti-Plunder Law) which expressly prohibits prescription. Consequently, the RTC’s order for petitioners to deliver the shares to Wellex was set aside.