G.R. No. L-77422 and G.R. No. L-79126, April 15, 1988
Liwayway Publishing, Inc. and U.S. Automotive Co., Inc. vs. Presidential Commission on Good Government (PCGG), et al.; Bulletin Publishing Corporation vs. PCGG, et al.

FACTS

These consolidated petitions challenge sequestration orders issued by the PCGG. In G.R. No. L-77422, petitioners Liwayway Publishing, Inc. and U.S. Automotive Co., Inc. sought to annul writs of sequestration dated February 12, 1987, covering shares of U.S. Automotive in Liwayway. The PCGG also requested the Central Bank to block withdrawals from Liwayway’s accounts, threatening its publication operations. During proceedings, the Solicitor General and PCGG officials assured the Court they would not interfere with management or editorial freedom and would modify the bank restrictions, rendering the plea for a restraining order on these grounds moot.
In G.R. No. L-79126, petitioner Bulletin Publishing Corporation assailed a PCGG order dated April 14, 1987, declaring its intent to vote sequestered shares in Bulletin. Bulletin sought to prohibit PCGG from voting shares or intervening in management and to compel acceptance of its offer to deposit in escrow the cash value of the sequestered shares pending final adjudication of ownership. The common thread is that Emilio T. Yap, through U.S. Automotive (a family-controlled corporation), was the largest stockholder in both Liwayway and Bulletin Publishing Corporation.

ISSUE

The core issue is whether the PCGG’s acts of sequestration and its subsequent orders, particularly the threat to vote sequestered shares and interfere with corporate operations, constitute an unconstitutional infringement on freedom of the press and due process, and what the proper interim remedy is to preserve assets without impairing press independence pending final determination of ownership.

RULING

The Court ruled in favor of the petitioners regarding the protection of press freedom and established a mechanism to safeguard the government’s potential interest without undue interference. The legal logic is anchored on the paramount constitutional guarantee of a free press. The Court held that while the PCGG has the authority to issue sequestration orders to prevent the dissipation of alleged ill-gotten wealth, its exercise must not trample upon fundamental rights. Any act by the PCGG that amounts to taking over or controlling the operations of newspaper corporations directly impinges on editorial independence and freedom of expression, which the Constitution zealously guards.
Consequently, for Liwayway, the Court, based on the PCGG’s own undertakings, enjoined the Commission from any act interfering with the management or operations of Liwayway. However, the petition to annul the sequestration writs themselves was dismissed, as the question of ownership of the sequestered shares is a factual matter properly within the jurisdiction of the Sandiganbayan for trial and determination. For Bulletin, the Court made permanent the temporary restraining order against the PCGG voting the sequestered shares. Crucially, it directed the PCGG to accept Bulletin’s cash deposit for the value of the sequestered shares, to be held in escrow under specified conditions. This deposit serves as security for the government’s contingent interest, effectively lifting the sequestration on those shares and remanding the issue of their ultimate ownership to the Sandiganbayan. This balanced solution prevents the “chilling effect” of state control over the press while ensuring assets are preserved for potential recovery.