G.R. No. 84895 May 4, 1989
REPUBLIC OF THE PHILIPPINES and JOSE D. CAMPOS, JR., petitioners, vs. THE HONORABLE SANDIGANBAYAN, et al., respondents.

FACTS

The Republic, through the Presidential Commission on Good Government (PCGG), filed a complaint for reconveyance, reversion, accounting, restitution, and damages (Civil Case No. 0010) against numerous defendants, including Jose D. Campos, Jr., to recover alleged ill-gotten wealth accumulated during the Marcos regime. Campos, Jr., after being served summons, filed a motion to dismiss, asserting he was entitled to immunity based on a PCGG Resolution dated May 28, 1986, which granted immunity to his father, Jose Y. Campos, and his family. The Republic itself filed a motion to drop Campos, Jr. as a defendant, aligning with this claim of immunity.
The Sandiganbayan denied both motions. It held that the PCGG lacked the power to grant civil immunity. Furthermore, it found that the grant of immunity had not been shown to cover the specific transactions involving Campos, Jr., particularly concerning Metroport Services, Inc., and that there was no demonstration that the claims against him had been extinguished aside from the alleged immunity. The Republic and Campos, Jr. filed motions for reconsideration, which were also denied, prompting this petition.

ISSUE

Whether the Sandiganbayan committed grave abuse of discretion in denying the motions to drop Jose D. Campos, Jr. as a defendant in Civil Case No. 0010 based on the PCGG’s grant of immunity.

RULING

Yes. The Supreme Court granted the petition, reversed the Sandiganbayan’s resolutions, and ordered the dropping of Jose D. Campos, Jr. as a defendant. The Court’s legal logic centered on the nature of the PCGG’s authority and the binding effect of its acts on the Republic.
First, the Court clarified that the PCGG, as the duly authorized representative of the Republic in recovering ill-gotten wealth, possesses the power to enter into compromises, including grants of immunity, as a necessary incident to its mandate. Executive Order No. 14, which defines PCGG’s powers, implicitly allows such acts to facilitate recovery. The grant of immunity to Jose Y. Campos and his family, which indisputably includes his son Jose D. Campos, Jr., constitutes a valid compromise agreement. The Republic, as the principal, is bound by the acts of its agent, the PCGG, performed within the scope of its authority.
Second, the Sandiganbayan’s insistence on a prior judicial determination of the validity of the immunity was misplaced. The Court distinguished this case from those requiring court approval for compromises involving government funds, as the PCGG’s act was a pre-litigation administrative determination integral to its recovery function. The Republic’s own motion to drop Campos, Jr., filed through the Solicitor General, constituted a ratification of the PCGG’s grant and a formal submission to the court that it no longer wished to prosecute him. A court cannot compel a plaintiff to maintain an action against a defendant it seeks to drop, absent a showing of prejudice to other defendants. Here, no such prejudice was established, as the liability alleged was joint and several, and the dropping of one defendant does not extinguish the claims against the others. Therefore, the Sandiganbayan’s denial of the motion constituted a grave abuse of discretion.