BASECO v. PCGG

BATAAN SHIPYARD & ENGINEERING CO., INC. (BASECO), petitioner,
vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, CHAIRMAN JOVITO SALONGA, COMMISSIONER MARY CONCEPCION BAUTISTA, COMMISSIONER RAMON DIAZ, COMMISSIONER RAUL R. DAZA, COMMISSIONER QUINTIN S. DOROMAL, CAPT. JORGE B. SIACUNCO, et al., respondents.

G.R. No. 75885
May 27, 1987


Preliminaries/Parties:

Bataan Shipyard and Engineering Co., Inc (BASECO) – private corporation
Presidential Commission on Good Government (PCGG) – issued the sequestration order.

Facts:

The corporation known as BASECO was owned or controlled by President Marcos during his administration, through nominees, by taking undue advantage of his public office and/or using his powers, authority, or influence, and that it was by and through the same means, that BASECO had taken over the business and/or assets of the National Shipyard and Engineering Co., Inc., and other government-owned or controlled entities.

As evidence found in Malacanang shortly after the sudden flight of President Marcos were certificates corresponding to more than ninety-five percent (95%) of all the outstanding shares of stock of BASECO, endorsed in blank, together with deeds of assignment of practically all the outstanding shares of stock of the three (3) corporations above mentioned (which hold 95.82% of all BASECO stock), signed by the owners thereof although not notarized. While the petitioner’s counsel was quick to dispute this asserted fact, assuring the Court that the BASECO stockholders were still in possession of their respective stock certificates and had never endorsed them in blank or to anyone else, that denial is exposed by his own prior and subsequent recorded statements as a mere gesture of defiance rather than a verifiable factual declaration.

In accordance with Executive Orders Numbered 1 and 2 promulgated by President Corazon Aquino, PCGG through its commissioners and agent ordered sequestration, takeover and other provisional orders affecting BASECO. Commissioner Diaz invoked the provisions of Section 3 (c) of Executive Order No. 1, empowering the Commission —To provisionally takeover in the public interest or to prevent its disposal or dissipation, business enterprises and properties taken over by the government of the Marcos Administration or by entities or persons close to former President Marcos, until the transactions leading to such acquisition by the latter can be disposed of by the appropriate authorities.

Issues:

1. Are the provisional remedies involved in this case unconstitutional?

2. Are the acts of PCGG and its Commissioners done without or in excess of its powers or with grave abuse of discretion?

3. Was there a violation of the right against self-Incrimination and unreasonable searches and seizures? 

Held:

1. No. The Provisional or “Freedom” Constitution recognizes the power and duty of the President to enact “measures to achieve the mandate of the people to recover ill- gotten properties amassed by the leaders and supporters of the Marcos regime and protect the interest of the people through orders of sequestration or freezing of assets or accounts. And as also already adverted to, Section 26, Article XVIII of the 1987 Constitution  treats of, and ratifies the authority to issue sequestration or freeze orders under Proclamation No. 3. The institution of these provisional remedies is also premised upon the State’s inherent police power, regarded, as t lie power of promoting the public welfare by restraining and regulating the use of liberty and property, and as the most essential, insistent and illimitable of powers in the promotion of general welfare and the public interest, and said to be co-extensive with self-protection and not inaptly termed also the law of overruling necessity.

2. No, PCGG’s general function is to conduct investigations in order to collect evidence establishing instances of ill-gotten wealth, issue sequestration, and such orders as may be warranted by the evidence thus collected and as may be necessary to preserve and conserve the assets of which it takes custody and control and prevent their disappearance, loss or dissipation; and eventually file and prosecute in the proper court of competent jurisdiction all cases investigated by it as may be warranted by its findings. It does not try and decide, or hear and determine, or adjudicate with any character of finality or compulsion, cases involving the essential issue of whether or not property should be forfeited and transferred to the State because ill-gotten within the meaning of the Constitution and the executive orders.

3. No. The right against self-incrimination has no application to juridical persons. While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges.