Republic v. Sandiganbayan (2006)

G.R. No. 129406 : March 6 2006

FACTS: One of the PCGG’s primary duties is to seize corporate operations, corporations, and other things thought to be ill-gotten money. The 227 shares of the Negros Occidental Golf & Country Club, Inc. (NOGCCI), which were claimed to be owned by Roberto Benedicto, were one of these sequestrations. Following the sequestration of such shares, PCGG representatives served on the NOGCCI Board of Directors, which later approved the levy of a monthly membership fee of P150 per share on share owners. Later, the price was reduced to P250 per share.

Instead of rejecting such impositions, PCGG officials serving as Board of Directors authorized them. Between 1987 and 1989, PCGG representatives completely ignored the shares owing to either ineptitude or collaboration with other share owners, at which time PCGG’s inability to pay the monthly membership dues now totaling P2,959,471.00 resulted in the auction sale of the overdue shares.

The PCGG reached a Compromise Agreement with Benedicto in Civil Case No. 0034 on November 3, 1990. This agreement indicated that PCGG was releasing the sequestration on the 227 NOGCCI shares, meaning that said shares were not ill-gotten riches after all and that Benedicto was perfectly capable of purchasing said shares with his own money.

Since the signing of the Compromise Agreement, both the PCGG and Benedicto have sought the assistance of the Sandiganbayan in order to carry out the conditions of the agreement. Benedicto filed legal action against the Commission since PCGG did not appear to intend to release the shares to him as agreed. In every case, the Sandiganbayan ruled in Benedicto’s favor.

Following that, the PCGG filed the current petition with the Supreme Court, claiming that: (a) the Sandiganbayan’s directive on March 28, 1995 compelling PCGG to bring before the Clerk of Court the 227 shares registered in Benedicto’s name, or pay P150,000 per share using public money, and its ruling on March 13, 1997 denying PCGG’s Manifestation with Motion for Reconsideration, constituted grave abuse of discretion; and (b) PCGG is immune from any lawsuit.


  1. W/N Sandiganbayan erred in ruling in favor of Benedicto?
  2. W/N PCGG is immune from lawsuit?


  1. NO. The Court concluded that all of Sandiganbayan’s findings on the subject were in accordance with the Compromise Agreement reached between the PCGG and Benedicto. As a result, it cannot be criticized for just adhering to the conditions of something that PCGG had enacted. In fact, the Court decided that the two challenged judgements have a solid foundation in fact and law.
  2. NO. By entering into a Compromise Agreement with Benedicto, the PCGG relinquished its immunity from litigation and placed itself on the same footing as its adversary. When the State, through its officers and agents, enters into a contract in furtherance of a legitimate aim or purpose and in accordance with constitutional legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise, the State may be sued even without its express consent. The sovereign is reduced to the level of the citizen by entering into a contract.

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