G.R. No. L-77816 and L-78753, June 30, 1988
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioner, vs. HON. BENJAMIN M. AQUINO, JR., as Presiding Judge, Regional Trial Court, NCJR Branch LXXII Malabon, Metro Manila, and MARCELO FIBERGLASS CORPORATION, respondents. / MARCELO FIBERGLASS CORPORATION, petitioner, vs. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, respondent.

FACTS

The Presidential Commission on Good Government (PCGG) sequestered the assets of Marcelo Fiberglass Corporation (MFC) on February 16, 1987. The sequestration was based on allegations that MFC, through its president Edward T. Marcelo, secured a lucrative contract to build patrol boats for the Philippine Navy due to his close connections with former President Ferdinand Marcos. The contract, involving hundreds of millions of pesos, was allegedly facilitated through presidential directives for funding and saw substantial government payments made to MFC, including a P127.7 million down payment released contrary to the contract’s stipulated letter of credit requirement. Despite receiving payments totaling P337.4 million, MFC had not delivered a single boat.
MFC challenged the sequestration before the Regional Trial Court (RTC) of Malabon, arguing the PCGG acted without a prima facie case, prior notice, or hearing. The RTC, presided by Judge Benjamin Aquino, assumed jurisdiction and issued orders restraining the PCGG’s sequestration. This prompted the PCGG to file a petition with the Supreme Court, asserting that the RTC had no jurisdiction to interfere with its functions. MFC, in turn, filed a counter-petition questioning the PCGG’s authority to sequester its assets.

ISSUE

Whether the Regional Trial Court has jurisdiction to restrain or set aside the sequestration orders issued by the Presidential Commission on Good Government.

RULING

The Supreme Court ruled that the Regional Trial Court has no jurisdiction over the case. The Court granted the PCGG’s petition, set aside the RTC’s orders, and dismissed MFC’s counter-petition. The legal logic is anchored on the exclusive jurisdiction of the Sandiganbayan over cases involving the PCGG’s exercise of its powers.
The Court held that under Section 2 of Executive Order No. 14, issued on May 7, 1986, the Sandiganbayan possesses exclusive and original jurisdiction over all cases involving the recovery of ill-gotten wealth, as well as all incidents arising from, incidental to, or related to such cases. This jurisdictional grant is comprehensive. Since the sequestration of MFC’s assets is an act performed by the PCGG in the exercise of its mandate to recover alleged ill-gotten wealth, any challenge to the propriety of that sequestration—including the special civil actions for certiorari and prohibition filed by MFC—constitutes an incident related to the PCGG’s functions. Consequently, such a challenge falls squarely within the exclusive domain of the Sandiganbayan, subject only to review by the Supreme Court on certiorari. The RTC’s assumption of jurisdiction was a clear encroachment on this exclusive authority. The Court emphasized the policy reasons for this exclusivity, which include ensuring a unified and specialized approach to the complex task of recovering assets allegedly amassed through misuse of power.