Ill-Gotten Wealth

3a.
epublit of tbe ~bilippines

~upreme QCourt
:fflanila
EN BANC
REPUBLIC OF THE PHILIPPINES, G.R. No. 195837
Petitioner,
- versus -
HONORABLE SANDIGANBAYAN,
s™ DIVISION, DON FERRY, AND
CESAR ZALAMEA,
Respondents.
x---------------------------------------x x------------------------------------x
Petitioner,
- versus -
SANDIGANBAYAN, 5TH DIVISION,

LUCIO C. TAN, ESTATE OF
FERDINAND E. MARCOS
(REPRESENTED BY IMELDA R.
MARCOS, IMEE· M. MANOTOC,
IRENE M.. ARANETA, AND
Decision 2 G.R. Nos. 195837,
198221, 198974 and 203592
FERDINAND R. MARCOS, JR.),

IMELDA R. MARCOS, CARMEN
KHAO TAN, FLORENCIO T.
SANTOS, NATIVIDAD P. SANTOS,
DOMINGO CHUA, TAN HUI NEE,
MARIANO TAN ENG LIAN,
ESTATE OF BENITO TAN KEE,
HIONG (REPRESENTED BY
TARCIANA C. TAN), FLORENCIO
N. SANTOS, .JR., HARRY C. TAN,
TAN ENG CHAN, CHUNG POE
KEE, MARIANO KHOO, MANUEL
KHOO, MIGUEL KHOO, JAMIE
KHOO, ELIZABETH KHOO,
CELSO C. RANOLA, WILLIAM T.
WONG, ERNESTO B. LIM,
BENJAMIN T. ALBACITA, DON
FERRY, WILLY CO, FEDERICO
MORENO, PANFILO O.
DOMINGO, HEIRS OF
GREGORIO LICAROS, CESAR
ZALAMEA, SHAREHOLDINGS,
INC., ALLIED BANKING CORP.,
FOREMOST FARMS INC.,
FORTUNE TOBACCO CORP.,
MARANAW HOTELS AND
RESORTS CORP., VIRGINIA
TOBACCO REDRYING PLANT,
NORTHERN TOBACCO
REDRYING PLANT, ASIA
BREWERY INC., SIPALAY
TRADING CORP., HIMMEL
INDUSTRIES, GRANDSPAN
DEVELOPMENT CORP., BASIC
HOLDINGS CORP.,
PROGRESSIVE FARMS, INC.,
MANUFACTURING SERVICES
AND TRADE CORP., ALLIED
LEASING & FINANCE CORP.
JEWEL HOLDINGS INC., IRIS
HOLDINGS AND DEVELOPMENT
CORP., AND VIRGO HOLDINGS
AND DEVELOPMENT CORP.,
Respondents.
198221, 198974 and 203592
x------------x x----------x
Petitioner,
- versus -
SANDIGANBAYAN 5TH DIVISION,

FERDINAND E. MARCOS
MARCOS, 11'1:EE M. MANOTOC,
IRENE M. ARANETA, AND
ESTATE OF BENITO TAN KEE
N. SANTOS, JR., HARRY C. TAN,
MORENO, PANFILO 0.
DOMINGO, HEIRS OF
GREGORIO LICAROS, CESAR
ZALAMEA, SHAREHOLDINGS
INC., ALLIED BANKING CORP.,
FOREMOST FARMS INC.,
FORTUNE TOBACCO CORP.,
MARANAW HOTELS AND
RESORTS CORP., VIRGINIA
TOBACCO REDRYING PLANT,
NORTHERN TOBACCO
198221, 198974 and203592
RE DRYING PLANT, ASIA

BREWERY INC., SIPALAY
TRADING CORP., HIMMEL
INDUSTRIES, GRANDSPAN
DEVELOPMENT CORP., BASIC
HOLDINGS CORP.,
PROGRESSIVE FARMS, INC.,
AND TRADE CORP., ALLIED
LEASING & FINANCE CORP.,
AND DEVELOPMENT CORP.,
Respondents.
x-------------x x---- ·----x
Petitioner,
- versus -
SANDIGANBAYAN 5TH DIVISION,

FERDINAND E. MARCOS
MARCOS, IMEE M. MANOTOC,
IRENE M. ARANETA, AND
ESTATE OF' BENITO TAN I(EE
N. SANTOS, JR., HARRY C. TAN,
198221, 198974 and 203592

MORENO, PANFILO 0.
DOMINGO, HEIRS OF GREGORIO
LICAROS, CESAR ZALAMEA,
SHAREHOLDINGS INC., ALLIED Present:
BANKING CORP., FOREMOST
FARMS INC., FORTUNE GESMUNDO, C.J., *
TOBACCO CORP., MARANAW LEONEN,
HOTELS AND RESORTS CORP., CAGU10A,
VIRGINIA TOBACCO REDRYING HERNANDO,
PLANT, NORTHERN TOBACCO LAZARO-JAVIER,**
REDRYING PLANT, ASIA INTING,
BREWERY INC., SIPALAY ZALAMEDA,
TRADING CORP., HIMMEL LOPEZ, M.,
INDUSTRIES, GRANDSPAN GAERLAN,
DEVELOPJVIENT CORP., BASIC ROSARIO,
HOLDINGS CORP., LOPEZ, J.,
PROGRESSIVE FARMS, INC., DIMAAMPAO ***
'
MARQUEZ,
AND TRADE CORP., ALLIED KHO, JR., and
LEASING & FINANCE CORP., SINGH, JJ.
AND DEVELOPMENT CORP., Promulgated:
Respondents. October 3, 2023
x------------------------------------------- -----
DECISION
ZALAMEDA, J.:
* No participation due to prior connection with OSG and PCGG.

** No participation due to prior connection with OSG and On Official Business Leave .
..... On Official Business Leave.
198221, 198974 and 203592
The recovery of ill-gotten wealth, with its laudable purpose initiated as

it is "not only out of considerations of simple justice but also out of sheer
necessity," 1 places a heavy responsibility on the Republic and poses a
demanding task for the Sandiganbayan and this Court. As the party seeking
the recovery, the Republic has the burden of establishing its claim through
admissible and relevant evidence. As vanguards of justice, the Sandiganbayan,
and ultimately, this Court, have the obligation not only to meticulously
analyze and weigh all the avennents and pieces of evidence - separating the
unsubstantiated from those proved, discarding the irrelevant and inadmissible
- but also to ensure that issues already passed upon are not litigated anew.
It is in this light that We resolve these consolidated cases, 2 which

originated from the complaint for recovery and reconveyance of ill-gotten
wealth brought by the Presidential Commission on Good Government's
(PCGG) before the Sandiganbayan.
Antecedents
On 17 July 1987, petitioner Republic of the Philippines (the Republic),

through the PCGG, filed before the Sandiganbayan a Complaint for reversion,
reconveyance, restitution, accolmting, and damages (Complaint), docketed as
SB Civil Case No. 0005, against respondent Lucio Tan (Tan), former President
Ferdinand E. Marcos (Marcos), former First Lady and later Senator,
1
Republic v. Sandiganbayan First Division, 310 Phil. 402 (I 995).
2
In G.R. No. 195837 -Republic of the Philippines v. Sandiganbayan, Don Ferry, and Cesar Zalamea
(filed 16 March 2011), the Republic filed a Rule 45 Petition (with Prayer for Issuance of a TRO and/or
Writ of Preliminary Injunction) assailing the Sandiganbayan's Resolution dated 22 December 2010
granting Don ferry and Cesar Zalamea 1s Motion to Dismiss (Demurrer to Evidence) and Resolution dated
25 February 2011 denying the motion for reconsideration.
In G.R. No. 198221-Republic of the PhUippines v. Sandiganbayan, Lucio Tan, Estate of Ferdinand E.
Marcos, et al (filed 05 September 2011) - The Republic filed a Petition for Certiorari (with Reiteration
of Prayer for the Issuance of a TRO and/or Writ of Preliminary Injunction) under Rule 65 seeking to nullify
the following Sandiganbayan issuances: (I) Resolution dated 03 May 2011 denying fue Republic's Motion
for Voluntary Inhibition of the Chairman and Members of the Sandiganbayan 5th Division; (2) Resolution
dated 04 July 2011 denying the motion for reconsideration; (3) Order dated 09 June 2011 denying the
Republic's motion in open court to recall Mr. Joselito Z. Yujuico to the witness stand for continuation of
his testimony~ and (4) Resolution dated 02 August 2011 denying the motion for reconsideration.
In G.R. No. 198974-Republic of the Philippines v. Sandiganbayan, Lucio Tan, Estate of Ferdinand
E. Marcos, et. al. (filed 02 November 2011)-The Republic filed a Petition for Certiorari (wifu Reiteration
of Prayer for the Issuance of a TRO and/or Writ of Preliminary Injunction) under Rule 65 seeking to
nullify the Sandiganbayan's Resolution dated 18 July 2011 denying its Motion wifu Leave of Court to
Admit Attached 3rd Amended Complaint, and Resolution dated 23 August 2011 denying the motion for
reconsideration.
In G.R. No. 203592 -Republic of the Philippines v. Lucio Tan, Est.ate of Ferdinand E. Marcos, el al
(filed 29 October 2012) - The Republic filed a Petition for Review under Rule 45 seeking to reverse,
nullify, and set aside the Sandiganbayan's Decision dated 11 June 2012 dismissing the Complaint for
reversion) reconveyance, restitution, accounting and damages, and Resolution dated 26 September 2012
denying petitioner's motion for reconsideration.
198221, 198974 and 203592
respondent Imelda R. Marcos (Imelda), respondent Don Ferry (Ferry), and

22 3 other individuals (collectively, Tan, et al.). 4
In its Complaint, the Republic sought to recover ill-gotten wealth

allegedly acquired by Marcos respondent Ilnelda, and respondent Tan; 5 which
was purportedly demonstrated in the following instances:
1. the liquidation of General Bank and Trust Company (GenBank) and

respondent Tan's acquisition of its assets through Allied Banking
Corporation (Allied Bank) without sufficient collateral and
consideration; 6
2. respondent Tan's delivery to Marcos and respondent Imelda of

substantial beneficial interest in shares of stock in Asia Brewery Inc.
(Asia Brewery) beginning July 1977 in exchange for concessions and
privileges for his business ventures; 7
3. respondent Tan's delivery of improper gifts, bribes, concessions, and/or

guaranteed "dividends" to Marcos and respondent Imelda, allegedly in
consideration of their continued support for and/or their ownership of
interests in his business ventures; 8
4. the establishment of Shareholdings, Inc. to prevent the disclosure and

recovery of their allegedly illegally-obtained assets. 9 The Republic
alleged that Shareholdings, Inc. beneficially held and/or controlled
substantial shares of stock in (1) Fortune Tobacco Corp. (Fortune
Tobacco), (2) Asia Brewery, (3) Foremost Farms, Inc. (Foremost
Farms), (4) Himmel Industries, Inc. (Himmel Industries), (5) Silangan
Holdings, Inc. (Silangan Holdings), and (6) Allied Bank;
5. the sale of the controlling interest of Development Bank of the

Philippines (DBP) in Century Park Sheraton Hotel (Century Park),
owned by Maranaw Hotels and Res01is Corp. (Maranaw Hotels) tq
Sipalay Trading Corporation (Sipalay Trading), a con1pany controlle4 ·
by respondent Tan (hereinafter, the Sipalay Deal). The Republic allegeq
3
The other impleadcd individuals are Carmen Khao Tan, Florencio T. Santos, Natividad P. Santos,
Domingo Chua, Tau Hui Nee, Mariano Tan Eng Lian, Estate of Benito Tan Kee Hiong represented by
Tarciana C. Tan, Florencio N. Santos. Jr., Hany C. Tan, Tan Eng Chan, hung Poe Kee, Mariano Khoo;
Manuel Khoo, Miguel Khoo, Jamie Khoo, Elizabeth Khoo, Celso C. Ranola, William T. Wong, Ernesto
B. Lim, Benjamin T. Albacita, Willy Co, and Federico Moreno.
4
Rollo (G.R. No. 203592), p. 15.
5
Id. at 3670.
6
Id. at 3671.
7
Id. at 3671, 3676.
8
Id. at 3674-3675.
9
Id. at 3677.
198221, 198974 and 203592
that this sale caused losses to DBP amounting to millions of pesos

10
because Sipalay Trading was grossly undercapitalized;
6. the printing of Bureau of Internal Revenue strip stamps worth billions

of pesos allegedly without legal authority, and affixing them on packs
of cigarettes produced by Fortune Tobacco, in violation of Section 189
of the Inten1al Revenue Code of 1977, defrauding the Republic and the
Filipino people of billions of pesos in tax receipts; 11 and
7. the establishment of Northern Redrying Co., Inc., a Virginia Tobacco

Company, which on several instances, imported and purchased tobacco
in excess of the ceilings allowed by law. 12
On 13 September 1991, the Republic filed a Motion for Leave to

Amend and for Admission of Second Amended Complaint (Second Amended
Complaint), 13 which was granted on 02 April 1992. 14
The Second Amended Complaint i1npleaded as additional defendants

the following corporations: (1) Shareholdings, Inc.; (2) Asia Brewery; (3)
Allied Bank; (4) Fortune Tobacco; (5) Maranaw Hotels; (6) Virginia Tobacco
Redrying Plant; (7) Northern Tobacco Redrying Plant; (8) Foremost Farms;
(9) Sipalay Trading; (10) Himmel Industries; (11) Grandspan Development
Corp. (Grandspan); (12) Basic Holdings Corp. (Basic); (13) Progressive
Farms, Inc.; (14) Manufacturing Services and Trade Corp.; (15) Allied
Leasing & Finance Corp.; (16) Jewel Holdings, Inc.; (17) Iris Holdings and
Development Corp.; and (18) Virgo Holdings and Development Corp.
(collectively, respondent-corporations). 15
The Republic also impleaded foreign corporations that were alleged to

be respondent Tan's business ventures, and to which Marcos and respondent
Imelda purportedly granted concessions to, or have interests or beneficial
ownership. 16 Later, however, the Republic withdrew its complaint against the
foreign corporations. 17
The Republic also impleaded then Philippine National Bank (PNB)

President Panfilo 0. Domingo (Domingo), the heirs of former Central Bank
Governor Gregorio Licaros (Licaros ), and former DBP and Maranaw Hotels'
Chairperson Cesar Zalamea (Zalamea), in connection with the alleged illegal
liquidation of GenBank and sale of its assets to Allied Bank. 18
10 Id. at 3678.
11
Id.at3681.
" Id. at 3681-3682.
13
Id. at 22.
14 Id.
15
Id. at 3657.
16
Id. at 3660-3663.
17 Id. at 34; The Republic withdrew its Complaint on 06 November 2001.
18 Id. at 3658-3659.
198221, 198974 and 203592
The properties that the Republic is seeking to recover includes two

aircrafts and shares of stocks from the respondent-corporations and Century
Park. 19
On 06 September 1995, respondent Imelda filed her Answer with

Counterclaim. 20 Respondent Tan, the other individual defendants, and
respondent-corporations also filed their respective Answers. 21
After more than six years, or on 20 November 2001, respondent Imelda

filed her Motion for Leave to File Amended Answer with Counterclaim and
Compulsory Cross-Claim (Amended Answer). 22 However, the
Sandiganbayan denied the motion and not admit respondent Imelda's
Amended Answer. 23 This ruling was affirmed by the Supreme Court in its
Resolution dated 17 March 2003. 24
It was only on 24 May 2006 when trial commenced with the Republic's
presentation of its evidence. 25
On 23 to 24 September 2008, the Republic presented Joselito Yujuico

(Joselito) to testify on the allegations in the Second Amended Complaint
pertaining to the liquidation of GenBank and the sale of its assets to Allied
Bank. 26 The Sandiganbayan, however, subsequently disallowed the testimony
of Joselito and ordered that the same be stricken off the records. 27 The
Sandiganbayan explained that the liquidation and acquisition of GenBank had
already been decided by the Supreme Court 28 in General Bank & Trust Co. v.
Central Bank of the Philippines ( GenBank Liquidation Case). 29 The Republic
filed a motion for reconsideration, which was denied by the Sandiganbayan in
its Resolution dated 29 June 2009. 30
The Sandiganbayan terminated the Republic's presentation of evidence

on 23 April 2009. 31 The Republic sought reconsideration of the termination
on the ground that it still had witnesses to present and it was still waiting for
the tum-over of several documentary exhibits fr01n the previous PCGG
19
Id. at3400-3401.
20
Id. at 25.
21
Id. at 28.
22 Id. at 34.
23 Id.
24
Id. at 154.
25 Id. at 48; Rollo (G.R. No. 198221), p. 46.
26
Id. at 98; Found in paragraph 14(a) (I )-(3) of the Second Amended Coniplaint.
27
Id. at 103. Sandiganbayan Resolution dated December 22, 2008.
28
Rollo (G.R. No. 203592), pp. 151-52.
29
524 Phil. 232 (2006).
30
Id. at 143; Rollo (G.R. No. 198221), p. l 7.
31
Id. at 107; Id. at 121.
198221, 198974 and 203592
Special Counsel. 32 The Sandiganbayan denied the Republic's motion for

reconsideration. 33
Thereafter, it was the respondents' turn to present their evidence.
Respondents Tan, et al., the heirs of Domingo, and the heirs ofLicaros
opted not to present testimonial evidence and, instead, proceeded to filing
their respective Formal Offer of Evidence. 34 On the other hand, respondent
Imelda was deemed to have waived her right to present evidence. 35
On 23 August 2010, respondent Zalamea filed his Motion to Dismiss

(Demurrer to Evidence). 36 Zalamea claimed that the Republic's evidence
against him was irrelevant and did not sufficiently establish his participation
in the alleged acquisition of ill-gotten wealth. 37 Thus, according to him, the
Republic showed no right of relief against him. 38 He also argued that the case
would be disposed quickly should the Sandiganbayan grant his motion to
dismiss. 39
Respondent Ferry also filed a Motion to Dismiss (on a Demurrer to

Evidence). 40 He argued that the evidence against him only showed that his
alleged wrongdoings were, in fact, connnitted in his official capacity as the
Vice Chairperson ofDBP. 41 Ferry further reasoned that these acts were made
with the other officers also acting in their official capacities, 42 duly approved
in accordance with established procedures, and, tl1erefore, presumed to have
been performed regularly. 43 He likewise asserted that the Republic neither
presented the originals nor properly identified the documents against him. 44
He further maintained the validity of tl1e transaction he participated in, as
ruled by this Court in Republic v. Desierto 45 (Desierto ). 46
On 22 December 2010, the Sandiganbayan granted the motions to

dismiss on demurrer to evidence of respondents Zalamea and Feuy. 47 The
Sandiganbayan found no evidence that tl1ey participated in the acquisition of
the subject assets and properties. 48 The graft court also took note of the
32
Id. at 108; Id. at 17-18.
33
Id. at 109.
34
Rollo (G.R. No. 198221), p. 18.
35
Id.
36
Rollo (G.R. No. 203591), p. ll5.
37 Rollo (G.R. No. 195837), pp. 224-225.
38 Id.
39 Id. at 225.
"" Rollo (G.R. No. 203592), p. 116.

41
Rollo (G.R. No. 195837), p. 228.
42
Id. at 229.
43 Id.
44
Id.
45
5 I 6 Phil. 509 (2006 ).
46 Rollo (G.R. No. 203592), p. 230.
47 Id. at 119.
48 Rollo (G.R. No. 195837). p. 21.
198221, 198974 and 203592
testimonies that confirmed respondent Zalamea's claim that his name did not
appear in any of the documents presented in the Sandiganbayan. 49 On 25
February 2011, the Sandiganbayan denied the motion for reconsideration of
the dismissal. 50 ·
Thus, on 16 March 2011, the Republic filed before this Court a Petition
under Rule 45 of the Rules of Court 51 to assail the Sandiganbayan's
Resolutions dated 22 December 2010 and 25 February 2011. It was docketed
as G.R. No. 195837 and entitled, Republic of the Philippines v.
Sandiganbayan, Don Ferry, and Cesar Zalamea. 52
Meanwhile, respondents Fortune Tobacco and Northern Tobacco

Redrying Co. Inc. (N orthem Tobacco) reportedly merged with Philip Morris.
Philip Morris and Fortune Tobacco had agreed to transfer their respective
assets and liabilities to a new company called PMFTC, Inc. 53 This report
prompted the Republic to file, on 18 February 2011, a motion asking the
Sandiganbayan to require respondents Tan, et al. to explain the merger and
manifest whether the interests subject of this case have been conveyed.
Further, the Republic sought the substitution of Fortune Tobacco with PMFTC,
Inc. and suspension of the proceedings until substitution is implemented. 54
In a Minute Resolution dated 03 March 2011, 55 the Sandiganbayan

denied the motion, as well as the Republic's request to cancel the scheduled
hearing for the presentation of its rebuttal evidence. 56 Consequently, the
Republic filed a Motion for Voluntary Inhibition of the chairperson and the
members of the Fifth Division of the Sandiganbayan. 57
The Sandiganbayan denied the Republic's Motion for Voluntary

Inhibition in its Resolution dated 3 May 2011. 58 The graft court denied acting
with bias against the Republic, or that it was partial in favor of Atty. Estelito
Mendoza, who was respondents Tan, et al. 's counsel. 59 It stressed that it
granted the Republic's n1otions and requests for postponements, extensions,
and cancellations. 60 It held that it did not rest the case for the Republic nor
was the Republic coerced to tenninate its presentation of evidence in chief
upon solicitation of respondents Tan, et al. 's counsel. 61 Further, the Republic
49 Id.
50
Rollo (G.R. No. 195837), pp. 23-24. Penned by Justice Roland B. Jurado, with Justices Teresita V. Diaz-
Baldos and Napoleon E. lnoturan concurring.
51
The petition included a Prayer.for issuance ofa TRO and/or Writ ofPreliminary Injunction.
52
Rollo (G.R. No. 195837), p. 27.
53
According to the Philip Morris 2010 Amlclal Report.
54
Rollo (G.R No. 203592), p. 122.
s5 Id.
56
Rollo (G.R. No. l 98221 ), p. 25.
57
Rollo (G.R. No. 203592), p. 123.
58
Id. at 128.
59
Rollo (G.R. No. 198221), p. 127.
60
Id.
61 Id. at 128. 131.
198221, 198974 and 203592
was not denied due process considering it was given years to prepare and
present evidence and rebut respondents' defense. 62 The Sandiganbayan also
63
noted that while delay in the proceedings could be attributed to all parties,
the Republic was the main culprit for the abeyance, and the court had been
very tolerant to such length that it even allowed one of its witnesses to testify
again even after the conclusion of the testimony. 64 It opined that four years of
65
delay in the trial to accommodate the Republic was excessive. The
Sandiganbayan ruled that its objective was to resolve the case with dispatch
and in consonance with A.M. No. 008-05-SC. 66 It also stated that on motion
of the Republic, and as agreed by the parties, the Republic was allowed to
present its evidence in chief with no further postponements. 67
The Sandiganbayan also ruled that the Motion for Voluntary Inhibition
was dilatory in nature, filed when the case was about to be submitted for
decision. 68 Further, the Republic failed to impute any act of partiality that
would compel the members of the division to inhibit. 69 The accusations of
prejudgment was speculative and not among the valid grounds for the
inhibition of a judge under Rule 137 of the Rules of Court. 70 Mere suspicion
of bias was not enough; 71 and to allow this would open the floodgates to
fon1m-shopping and result in further delay of the proceedings. 72
Moreover, the Sandiganbayan noted that none of the instances under

Rule 3 .12 of the Code of Judicial Conduct was present to wan-ant inhibition. 73
Repeated rulings against a litigant are not basis for disqualification. 74 Besides,
the Republic's remedy to question the Sandiganbayan's rulings, was to file a
Petition for Certiorari. 75 The Sandiganbayan also pointed out that while it had
granted reliefs to respondents, it ruled in favor of the Republic when it denied
the separate motions to dismiss filed by respondents Zalamea, the heirs of
Licaros, and respondents Tan, et al. 76 It emphasized that some of its
resolutions have been affirmed by the Supreme Court, thus showing that these
were issued with due and proper consideration of the parties' arguments and
applicable law and jurisprudence. 77
62
Id. at 129-130.
" Id. at 134.
64
Id. at 132.
65 Id.
66
Id. at 133.
67 Id.
68
Id. at 132.
69
Id. at 131.
70
Id. at 134.
71
Id.
12 Id.
73 Id. at 135.
74
Id. at 13 I.
75
Id.
76
Id. at 136.
77 Id.
198221, 198974 and 203592
The Sandiganbayan further noted that on 06 April 1994, the Republic

had also filed a motion for voluntary inhibition of the chairperson of the
Sandiganbayan division then hearing the case. 78 This was denied. 79 Likewise,
its Orders dated 23 April 2009 80 and 20 July 2009 81 were supported by facts
and law and were accepted by the Republic without complaints. 82
The Republic moved for reconsideration of the 3 May 2011 ruling.

Through a Resolution 83 dated 04 July 2011, the Sandiganbayan denied the
same, holding that the Republic was not able to prove its allegations of bias
and prejudice with clear and convincing evidence. 84
On 06 June 2011, the Republic filed a Motion with Leave of Court to

Admit Attached Third Amended Complaint (Third Amended Complaint)
seeking to formally implead PMFTC, Inc. and several other individuals, 85
alleging that substantial capital and assets of respondents Fortune Tobacco and
Northern Tobacco have been fraudulently transferred to PMFTC, Inc. pending
litigation, to effectively place it beyond the reach of the court. 86 The Republic
asserted that the additional defendants cooperated in the fonnation of PMFTC,
Inc. despite being fully aware of the pendency of the ill-gotten wealth case. 87
The Republic also filed a Motion with Memorandum of Authorities on

17 June 2011 in support of its-move to recall Joselito to the witness stand for
continuation of his testimony. 88 The Republic also moved for the presentation
ofAderito Yujuico (Aderito), in lieu of Rolando Gapud (Gapud), who could
not testify. 89 The Sandiganbayan, however, disallowed Aderito 's presentation
upon the Republic's own admission that his testimony would have the same
78
Id. at 135.
79 Id.
80
Id. at 107-108 provides: "During the 23 April 2009 hearing, Solicitor Dinopol again failed to present any
witness and presented to the Court the Plaintiff's two (2) 'Manifestation and Motions' and 'Motion for
Production and Request for Admission' all dated 17 April 2009. Atty. Mendoza gave his verbal comments
thereto on open court, to wluch Solicitor Dinopol replied also verbally. As regards plaintiff's Motion for
Production and Request for Admission," the court denied the same considering the said motion is not
accompanied by the copies of the documents which the plaintiff would like the defendants to produce
and/or admit.
On the same date, the comt terminated the plaintiff's presentation of evidence and was given a period of
fifteen (15) days from said date within which to submit its formal offer of documentary exhibits and other
pieces of evidence.
81
· Id. at 109 provides: "On 20 July 2009, this Court promulgated a Resolution dated 13 July 2009, denying
plaintiff's 'Motion for Reconsideration' oft½c 23 April 2009 verbal Order ofthis Court."
82
Rollo (G.R. No. 1~8221), p. l?il.
83
Id. at 141; Pem1ed by Justice Roland 8. Jurado. with Justices Teresita V. Diaz-Baldos and Napoleon E.
Inoturan concuning.
84
Id. at 140.
85
Lucio K. Tan, Jr., Michael G. Tan, Christopher Nelson, Douglas Werth, Mitchell Gault, Raymond Miranda,
Varinia Elero, Vi.nCent Nguyen, Domingo Chua, Juanita Tan Lee, Peter Y. Ong, Shirley L. Santillan, Myra
Vida G. Jamora, and Hemy N. Sitosta_
86
Rollo (G.R. No. 198221), p. 130; Rollo (G.R. No. 198974), pp. 85-86.
87
Rollo (G.R. No. 198974), p. 86.
88
Rollo (G.R. No. 198221), p. J3l.
80 Id. at 32.
198221, 198974 and 203592
substance as that of Joselito. 90 The Republic was also declared to have waived
its right to present Gapud as a witness. 91
In its Resolution dated 13 July 2011, the Sandiganbayan denied the

Third Amended Complaint. 92 It found that PMFTC, Inc. and the additional
defendants were not indispensable or necessary parties. 93 It ruled that
assuming Fortune Tobacco, Northern Tobacco, and PMFTC, Inc. were
organized with ill-gotten wealth, there was no need to implead PMFTC, Inc.
and the additional defendants because there was no cause of action against
them. 94 The Republic's motion for reconsideration was denied in a Resolution
dated 23 August 2011. 95
Thus, on 02 November 2011, the Republic filed a Petition for Certiorari

under Rule 65 to nullify the Sandiganbayan's Resolutions denying the motion
to admit the Third Amended Complaint and the motion for reconsideration. It
was docketed as G.R. No. 198974 and entitled, Republic of the Philippines v.
Sandiganbayan, Lucio Tan, Estate ofFerdinand E. Marcos, et. al. 96
In a Resolution dated 18 July 2011, the Sandiganbayan denied the

Republic's Motion with Memorandum of Authorities in support of its recall
of Joselito on the witness stand for continuation of his testimony. 97 It held that
it had already n1led on the propriety of offering Joselito's testimony in its
Resolutions dated 22 December 2008 and 29 June 2009. 98 It also maintained
that the GenBank Liquidation Case had already declared the validity of
GenBank's liquidation and the transfer of its assets to Allied Bank. 99 Thus,
the substance of Joselito's testimony had already been considered in the
GenBank Liquidation Case. 100
On 05 September 2011, the Republic filed another Petition for

Certiorari under Rule 65, this time to nullify the following Sandiganbayan
issuances: (1) Resolution dated 03 May 2011 denying the Republic's Motion
for Voluntary Inhibition of the Chainnan and Members of the 5th Division; (2)
Resolution dated 04 July 2011 denying the motion for reconsideration; (3)
Order dated 09 June 2011 denying the Republic's motion in open court to
recall Joselito to the witness stand for continuation of his testimony; and (4)
Resolution dated 02 August 2011 denying the Republic's Motion with
0
' Id. at 132.
" Id. at 33.
92
Id. at 130.
93
Rollo (G.R. No. 198974), p. 88.
94
Id. at 89-90.
95 Id. at 93. Penned by Justice Roland B. Jurado. wit!1 Justices Teresita V. Diaz-Baldos and Alex L. Quiroz
concurring.
96
Rollo (G.R. No. 198974), pp. 3-77.
97
Rollo (G.R. No.198221), p. 131.
98 Id. at 146.
99 Id.
,oo Rollo (G.R. No. 198221), p. 146.
198221, 198974 and 203592
Memorandum of Authorities for the recall of Joselito to the witness stand. 101
The case was docketed as G.R. No. 198221 entitled, Republic of the
Philippines v. Sandiganbayan, Lucio Tan, Estate ofFerdinand E. Marcos, et.
al.
More importantly, the Sandiganbayan, in its Decision dated 11 June

2012, dismissed the Republic's Complaint. The Sandiganbayan explained that
the Republic failed to discharge its burden to prove that the subject assets and
properties were ill-gotten wealth because it was not shown that the same
originated from the government's resources. 102 It referred to the "whereas"
clauses of Executive Order (EO) No. 1 and this CoU1t's discussion of "ill-
gotten wealth" in Chavez v. Presidential Commission on Good Government
(Chavez). 103
The Sandiganbayan also ruled that the Republic's reliance on

respondent Imelda's Amended Answer was faulty because her statements
controvert the Republic's position as to who owns the shares of stock. 104 It
also noted that it had already disallowed respondent Imelda's Amended
Answer because her cross~claims did not involve the same transactions or
acts as that of the principal cause of action. 105
Further, the Sandiganbayan found no proof that respondent Tan

received concessions, or that his business ventures benefitted, from Marcos. 106
It held that the Republic failed to demonstrate how Marcos' grant of favors
and privileges to a corporation resulted in the government's ownership of its
shares, assets, and properties that may be recovered as ill-gotten wealth. 107
Likewise, the Sandiganbayan held that the testimonies of now President

Ferdinand Marcos, Jr. (Marcos, Jr.) were merely hearsay and only confirmed
that. the shares of stock in various corporations were privately owned by
respondent Tan, not by the govemment. 108
The Sandiganbayan also ruled that the pieces of documentary evidence

of the Republic, being mere photocopies, did not comply with the
requirernents for admissibility of secondary evidence under the Rules of
Court. 109 The documents collected by the PCGG in the course of its
investigations were not public records per se, 110 and the records officer and
the other witnesses who produced and presented documents from their offices
IOI Rollo (G.R. No. 198221), p. 7.

102
Id. at 149.
103
Chavez v. Presidential Commission on Gcod Government, '.160 Phil. 133 (1998).
104
Rollo (G.R. No. 203592), p. 153.
105
Id. at 154.
106
Id. at 151.
101 Id.
108
Id. at 156-157.
109
Id. at 163-164.
llO Id. at 159.
198221, 198974 and 203592
were not competent to testify on the contents of the documents. 111 They can
only testify as to the documents' existence and how they acquired possession
of the same. 112
It was also held that the affidavit ofGapud, the self-confessed financial
executor of Marcos and who affinned the business alliance between Marcos
and respondent Tan, cannot be conclusive because Gapud did not take the
witness stand and could not be cross-examined. 113 While affidavits are public
docmnents if acknowledged by a notary public, these are still hearsay unless
the affiant took the witness stand to testify on it. 114
The Republic filed a motion for reconsideration, which was denied in a

Resolution dated 26 September 2012. 115 Thus, on 29 October 2012, the
Republic filed this Petition for Review under Rule 45, seeking to set aside the
Sandiganbayan's Decision dated 11 June 2012 dismissing the Complaint and
Resolution dated 26 September 2012 denying the Republic's motion for
reconsideration. It was docketed as G.R. No. 203592 and entitled, Republic
of the Philippines v. Lucio Tan, Estate of Ferdinand E. Marcos, et. al. 116 The
Court ordered the consolidation of the Republic's four (4) petitions in its
Resolution dated 03 December 2012. 117
Issues
G.R. No. 195837 j

In G.R. No. 195837, the Co tt is tasked to resolve the following issues:
1. whether respondents Fetry and Zalamea impliedly admitted the

allegations in the Complaint when they filed their demurrer to
evidence; I
2. whether the Repu~lic'sl clai~ns against respondents Ferry and

Zalamea are barred by rels Judzcata;
I
3. whether the case agaidst respondents Ferry and Zalamea was

properly disn1issed conJidering their alleged involvement in the
111
Id. at 159-161. As required under Sections 211. and 25, Rule 132 of the Rules of Cow·r.
.
' 12 Id. at 159,161. 1
3
" Id. at 168. I
4
" Id. I
1
' ' Rollo (G.R. No. 203592), p. 169. Pcru,cd b~ Justice Roland B. Jurado, with Justices Teresita V. Diaz-
Baldos and Alex L. Quiroz concun-ing. 1'
1" Id. at 261-540.

117
Id. at3130-3132.
198221, 198974 and 203592
consprracy to acquire ill-gotten wealth, the evidence submitted

against them, and their alleged failure to specifically deny the
allegations in the Complaint;
4. whether the Sandiganbayan resolutions dismissing the case against

respondents Feny and Zalamea violated constitutional requirements
and the Sandiganbayan rules on rende1ing final orders and decisions;
and
5. whether the Republic is guilty of forum shopping.
The Republic principally argues tlrree matters. First, the complaint

against respondents Ferry and Zalamea should not have been dismissed
considering that they acted in conspiracy with Marcos and respondent Tan in
the Sipalay Deal. 118 In particular, the Republic alleged that the shares were
supposed to be sold to PCI Management Consultants, Inc. for P350 Million
but were sold instead to Sipalay Trading for only P150 Million without public
bidding. 119 Second, respondents Ferry and Zalamea already impliedly
admitted the truth of the allegations in the Complaint when they decided not
to dispute the allegations by· filing a demurrer to evidence. 120 Third, the
Republic claims that the Sandiganbayan's grant of the demUITer through a
minute resolution violated the Constitution and its own inte1nal rules. 121
In their defense, resp~ndent Feny primarily arf,'lles that in Desierto, 122

the Court had already ruled that the Sipalay Deal was legal and that the DBP
officers acted in good faith and sound exercise of judgment. 123
For his part, respondent Zalamea points out that in Republic v.

Sandiganbayan, 124 the Court hel<l that the allegations against him, as opposed
to the other respondents, respondent Tan in particular, rest on entirely different
facts, and made on entirely different occasions, which are separate and distinct
from each other. 125 He maintains that there was no evidence of his
participation iin the acquisition of ill-gotten wealth. 126 Citing the Court's
pronouncements in Desierto, 127 respondent Zalamea echoes respondent
Feny's defense of res judicata. 128 Finally, respondent Zalamea claims that the
Republic is guilty of fonnn shopping because aside from the petition filed in
G.R. No. 195837, t._lie Republic impleaded him in other petitions that also
118
Id. at 4080-4087.
m Id. at4111-4113.
120
Id. at 4092.
121
Id. at 4117.
122
5 I 6 Phil. 509 (2006 ).
123
Rollo (G.R. No. 203592), p. 4222.
124
410 Phil. 536 (2001).
125
Rollo (G.R. No. 203592), p. 4233.
126
Id. at 4234.
127
516 Phil. 509 (2006).
128
Rollo (G.R. No. 203592), pp. 4239-4241.
198221, 198974 and 203592
involve the other respondents. 129
G.R. No. 198221
In G.R. No. 198221, the Republic raises the following issues:
1. whether the Sandiganbayan committed grave abuse of discretion in

prohibiting the Republic from presenting Aderito Yujuico (Aderito) and
Joselito Yujuico (collectively, the Yujuicos) on the ground of res
judicata, and
2. whether the Sandiganbayan cornn1itted grave abuse of discretion in

denying the Republic's motion for voluntary inhibition.
The Republic claims that the Sandiganbayan's order to disallow the

Yujuicos as witnesses amounts to grave abuse of discretion, and a denial of its
right to due process. 130 According to the Republic, their testimonies are
relevant and material to support the allegation that Marcos granted favors to
respondent Tan, specifically with respect to the acquisition of GenBank. 131
The Republic likewise argues that the testimonies of the Yujuicos are not
barred by res judicata in view of the Court's 1uling in the GenBank
Liquidation Case, 132 considering that said case was filed in 1977 and was a
special proceeding. i 33 Further, an ill-gotten wealth case is within the
exclusive jurisdiction of the Sandiganbayan and could not have been
entertained by the court hearing the said case. 134 The Republic also posits that
there is no identity of parties and issues between the present petition and the
GenBank Liquidation Case. 135 As to parties, the two (2) cases arc different
because the :tvllarcoses, respondent Tan, and even the PCGG were not parties
to the GenBank Liquidation Case. 136 The issues are also not the same since
the validity of the liquidation in the GenBank Liquidation Case was premised
on the meaning of insolvency, 137 while the issues in this case are whether
Marcos had proprietary interests in respondent Tan's businesses and whether
Marcos extended concessions and accommodations to respondent Tan and his
businesses. 138
The Republic also maintains that the members of the Fifth Division
129
Id. at4237-4239.
"" Id. at 4127, 4156.
lll Rollo (G.R. No. 203592), p. 4155.
1
" 524 Phil. 232 (2006).
m Rollo (G.R. No. 2lB592),.p. 4134.
134
ld.at4131.
135 Id. at 4148, 4139.
136
ld.at4139.
137
Id. at 4139.
138 Id. at 4148.
198221, 198974 and 203592
should have inhibited from hearing the case because they do not appear to
have the neutrality of an impartial judge. 139 In particular, the division rushed
the Republic to finish its presentation of evidence despite its plea to present
other witnesses and documentary evidence. 140 The members of the division
also, allegedly, made unwarranted statements that undennined the court's
credibility and integ1ity. 141
Respondents Tan, et al., on the other hand, agrees with disallowing the
Yujuicos to testify, arguing that the Republic cannot present a witness that will
testify on the facts and issues that have been established and resolved in the
GenBank Liquidation Case since these issues are already barred by res
judicata. 142
As to motion for the justices of the Fifth Division to inhibit from the
case, respondents Tan, et al. dispute the Republic's allegation that the
Sandiganbayan rushed it to rest its case. They emphasized that the
Sandiganbayan had granted the Republic's requests for postponements,
cancellations, and extensions, and to adduce additional evidence. 143
G.R. No. 198974
In G.R. No. 198974, the petition raise<; the issue of whether PMFTC,
Inc. is an indispensable party, such that the Sandiganbayan should have
admitted the Third Amended Complaint to imp lead the PMFTC, Inc.
The cn1x of the Republic's arguments is that PMFTC, Inc. was

fraudulently created to remove the substantial capital and assets of Fortune
Tobacco and Northern Tobacco and to place it beyond the reach of the court's
auth01ity and jmisdiction. 144 Further, the Republic claims that PMFTC, Inc.
does not have a separate and distinct personality from Fortune Tobacco; 145 and
nothing can be recovered from the latter should its assets be found to be ill-
gotten wealth because it had already dissolved its entire business. 146
Respondents Tan, et al. counter that PJIAFTC, Inc. is not a party-in-

interest because the judgment in the case will not benefit or injure PMFTC,
Inc., 147 and that imp leading its directors and officers as defendants will only
139
Rollo (G.R. No. 198221), p. 95.
14
" Id. at 78.
141
Id. at 82.
2
'" Rollo (G.R. No. 203592) pp. 3243-3244.
1
" Rollo (G.R. No. 203592), pp. 1099, l 100, 3246.
144
Id. at 4159-4160 ..
145
Id. at 4175.
146 Id.
147
Id. at 1117-lll9.
198221, 198974 and 203592
delay the resolution of the case. 148 They insist that even if the assets and
properties of Fortune Tobacco are later found to be ill-gotten, judgment may
be entered against Fortune Tobacco, and PMFTC, Inc. will still be obliged to
surrender the assets to the govemment. 149
G.R. No. 203592
Finally, the sole issue for resolution in G.R. No. 203592, is whether the
Republic sufficiently proved that the subject assets and properties are ill-
gotten wealth.
The Republic argues that ill-gotten wealth is not limited to assets and
property originally owned by the government. 150 It contends that assets are
also considered ill-gotten wealth when they were acquired by taking undue
advantage of their office, authority, influence, connections, or relationship,
resulting in the unjust enrichment of the usurper, thereby causing grave
damage and prejudice to the Republic and the Filipino people. 151
Further, the Republic insists that the subject properties were ill-gotten
because they were obtained through the collaboration between Marcos and
respondents Tan, et al. by taking undue advantage of official position,
relationship, and influence, which was allegedly demonstrated by the "60-40
business arrangement" between Marcos and respondent Tan. 152 This 60-40
business arrangement was allegedly proved by the following pieces of
evidence: (1) respondent Tan's Written Disclosure dated 10 May 1986
(Written Disclosure); (2) respondent Imelda's Amended Answer; (3) Gapud's
affidavit; and (4) Marcos, Jr.'s testimony.
According to the Republic, respondent Tan's Written Disclosure

confirmed the 60-40 business arrm1gement, where corporations would
allegedly be formed for Marcos and thereafter, respondent Tan and his
associates would purportedly execute deeds of trust or deeds of assignment in
favor of an unnamed beneficiary, and deliver the original copies of the deeds
to Marcos. 153 ·
The Republic also cc,ntends that while respondent Tan's Written

Disclosure also contains exculpatory statements, these lack factual basis and
do not invalidate the 60-40 business arrangement. 154 Rather, said statements
148
Id. at 1117, 1119,3320.
149
Id. at 1122.
150
Id. at 3891-3892.
151
Id. at 3892, 3895-3396, 389.9-0900.
152
ld at 3915.
153
Id. at 3950.
54
1 Id. at 3940-3941. 3957.
198221, 198974 and203592
exhibit the voluntariness of the execution of the Written Disclosure. 155 The
Republic likewise insists that the Written Disclosure is admissible in evidence
because it was presented and identified by former Senator Jovito Salonga
(Senator Salonga), who was the first PCGG Chairman.
As regards respondent Imelda's AinendedAnswer, the Republic argues

that it should not have been disallowed by the Sandiganbayan. It explains that
respondent Imelda's claim that the Marcoses own at least 60% of respondent
Tan's businesses validated the Republic's case. More impmiantly, these
state1nents were made in a pleading and, therefore, should be considered as
judicial admissions. 1'6 Respondent Iinelda's statements should be treated as
admissions made in the course of the proceeding, given voluntarily with the
assistance of counsel. 157 The Ainended Answer, according to the Republic, is
also a public document, which forms part of its evidence and case record. 158
Finally, the Republic argues that Imelda's statements are a declaration against
her interests under Section 38, 159 Rule 130 of the Rules of Court, 160 and are
admissible against respondents Tan, et al. as admissions by a partner, privy,
and conspirator. 161
With respect to Marcos, Jr. 's testimony, the Republic disagrees with the
Sandiganbayan that it is inadmissible for being hearsay. The Republic claims
that Marcos, Jr.'s statements were based on his direct personal knowledge of
the 60-40 business anangement since he was present during the meetings
attended by his father and the alleged collaborators, and he directly
participated in their business as instn1cted by Marcos. 162 The Republic also
notes that Marcos, Jr.'s testimony was straightforward, candid, categorical,
positive, and, therefore, credible. 163
The Republic . also contends the Sandiganbayan should have taken

judicial notice of Gapud's affidavit 164 since it was presented and identified in
court by Senator Salonga. 165 However, the Sandiganbayan did not include the
testiinony of Senator Salonga in its nanation offacts. 166 FUiiher, the Republic
claims that Gapud's affidavit is adinissible for being a declaration of an agent
against his principal. 167
In sum, the Republic avers that respondent Imelda's Amended Answer,

155
Id. at 3940-3941, 3969.
156
Id. at 3995-3996, 4000-4001.
157
Id. at 4000.
158 Id. at 3996.
159
Now, 2019 REVISED RULES ON EVIDE~CE. Rule 130, Sec. 40.
"" Rollo (G.R. No. 203592), p. 4007.
161
Id. at 4000-4003.
1
" Id. at 4012-4013.
163
Id. at 4017.
164
Id. at 4019.
15s ld.
166 Id.
1
" Id. at 4022.
198221, 198974 and 203592
respondent Tan's Written Disclosure, and Gapud's affidavit constitute

interlocking confessions because they are identical in such a manner that they
corroborate each other on material points, and there was no collusion. As such,
said confessions are admissible against those implicated in them. 168 These
pieces of evidence may also be considered as circumstantial evidence to show
the probability of the implicated person's actual participation in the
commission of the cri1ne, and as corroborative evidence if other circumstances
show that other persons participated in the c1ime charged. 169
The Republic also avers that it was able to prove by preponderance of

evidence its case through the documents it presented. 170 It disputes the
Sandiganbayan's findings that the documents offered did not comply with the
best evidence rule. 171 It maintains that the documents were either certified true
copies of public documents or public records of private documents, presented
and identified by their official custodians. 172 Further, secondary testimonial
evidence are available to prove the execution and existence of the
documents. 173 The Republic likewise harks back to respondent Tan's failure
to specifically deny several of the Republic's documentary evidence, thus,
amounting to an implied adn1ission. 174 Even if the documents cannot be
considered as impliedly admitted, the same were confinned in respondent
Tan's Written Disclosure, and their existence were proven by public and
official records. 175 The Republic claims that during hearings, it presented
original docurnents, compared them with photocopies, and marked them as
documentary exhibits. 176
Finally, the Repubhc contends that the Sandiganbayan's Decision dated

11 June 2012 violated Section 14, Article VIII of the 1987 Constitution for
failing to state distinctly the facts and laws upon which it is based. 177
For their part, respondents argue that to be categorized as ill-gotten

wealth, the property allegedly obtained illegally must have formed part of
government resources. 178 Thus, the Republic's case should be limited to those
properties over which the Republic claims ownership. 179 As such, properties
of private individuals, such as respondent Tan's shares of stocks, cannot be
considered as ill-gotten wealth. 180
168 Id. at 4010-4011.

169
Id. at 4010.
170
Id. at 3979-3993.
171
ld. at 4027.
172
Id. at 4027, 4064.
173
Id. at 4065-4066.
174
Id. at 4066.
175
Id. at 4067-4074.
176
Id. at 4075.
177
Id. at 4077.
178
ld. at 3360, 3367, 3462-3463.
179 Id. at 3369.
1
'° Id. at 3462.
198221, 198974 and 203592
Respondents also claim that contrary to the Republic's view, respondent

Tan's Written Disclosure is inadmissible because the direct examination of its
presenter, Senator Salonga, was not completed, and he was not cross-
examined. They also argue that the Republic, as the offeror of respondent
Tan's Written Disclosure, should be bound by all the staten1ents contained
therein, whether inculpatory or exculpatory. 181
As regards respondent Iinelda's AinendedAnswer, the same contradicts

the Republic's theory because the allegation that Marcos owns 60% of the
subject business venture is not consistent with the allegation that the ill-gotten
wealth amassed by Marcos were part of the vast resources of the
government. 182 Respondent Iinelda's allegations could also not qualify as a
judicial admission because it was not admitted into the records of the
Sandiganbayan. 183 Neither could it be considered as an extra-judicial
admission because respondent Imelda was not presented as a witness and was
not cross-exan1ined. Her allegations are, therefore, hearsay and
inadmissible. 184 The allegations, according to respondents, cannot be admitted
as an admission of a co-conspirator because there is no evidence of conspiracy
between and among respondents. 185
Similarly, respondents claim that the testimony of Marcos, Jr. is

inadmissible for being hearsay. 186 Further, by offering said testimony, the
Republic should also be bound by the denials and exculpatory statements
therein. 187 Marcos, Jr.'s testimony also belies Marcos' ownership of the shares
because the former confirmed that the latter did not perform any specific act
that shows the latter's stake in the corporations allegedly formed for his
benefit. 188
As to Gapud's affidavit, respondents argue that it is inadmissible for

being hearsay and cannot be the subject of judicial notice because Gapud did
not testify as a witness to identify or testify on the affidavit. 189
Respondents also contend that the Republic failed to prove that the
subject assets and properties were acquired in the manner desc1ibed in its
Complaint. 190 Among other things, respondents raise the following arguments:
1. Some documents offered by the Republic, particularly those seized in
181
Id. at 3495.
1
" Id_ at 3518.
m Id. at 3389.
184
Id. at 3519, 3521.
m Id. at 3522.
186
Id. at 3524.
1
" Id. at 3524-3526.
188
Id. at 3527-3528.
189 Id. at 3534.
190
Id. at 3441.
198221, 198974 and203592
Malacaftang, are not public documents. 191 They remain private if not
required by law to be entered into public records. 192 Thus, their contents
are hearsay because no one testified on these documents. 193
2. The authenticity and due execution of the documents presented by the

Republic as evidence were not established. 194 The documents were only
certified true copies of photocopies on file with the PCGG.
Furthermore, the documents collected by the PCGG by virtue of its
investigations are not automatically public records. 195
3. The allegations pertaining to respondent Tan's acqu1s1tJ.on of

GenBank's assets were not proven by evidence. 196 More importantly,
respondent Tan's acquisition of assets and assumption of liabilities as
an incident to GenBank's liquidation by the Central Bank have been
ruled as valid in the GenBank Liquidation Case. 197
4. The photocopy of respondent Tan's Written Disclosure presented by the

Republic as evidence is inadmissible considering that no explanation
was given as to why the original was not presented. 198
5. There is no proof that the alleged favors extended by Marcos, if they

were true, were implemented or that the corporations benefitted from
the favors. No evidence was introduced to prove that the government
suffered damage or injury. The alleged favor did not translate to assets
and properties, and it did not result in Marcos' or the government's
ownership of the shares of stock. 199
6. The laws enacted by Marcos as supposed favors to respondents remain

operative until amended, repealed, or revoked, pursuant to Section 3,
Article XVIII of the 1987 Constitution. 200
7. The Republic failed to sufficiently describe or identify the property it

seeks to recover from respondents when it merely prayed for the return
of "all funds and property impressed with constructive trust." 201 This
shows that the Republic is uncertain which of respondent Tan's
properties are allegedly ill-gotten. 202
191
Id. at 3509.
192
Id. at 3510.
193
Id. at 3509-3510.
194
Id. at 3260.
195
Id. at 3252.
196
Id. at 3443.
197
Id. at 3362.
198
Id. at 3264.
199
Id. at 3442-3443.
200
Id. at3507.
201
ld. at 3383.
20
' Id. at 3384.
198221. 198974 and 203592
8. The Republic is ra1smg factual issues that are not pennissible in a

petition for review on certiorari under Rule 45 of the Rules of Court. 203
Worse, the Republic failed to describe how the Sandiganbayan erred in
its factual findings and in ruling against the evidence of the Republic. 204
9. The Sandiganbayan did not fail to distinctly state the facts and law on
which its decision was based. It did not obscure the simple and
straightforward reasons it gave for the dismissal of the Republic's
Complaint. 205
Ruling of the Court
I. G.R. No. 195837
The Sandiganbayan did not

dismiss the case through a
minute resolution
Section 14, Article VIII of the 1987 Constitution provides that "[n]o
decision shall be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based."
Consistent with this constitutional mandate, Section 1, Rule 36 of the

Rules of Court reads:
Section l. Rendition of judgments and final orders. -A judgment or

final order detennining the merits of the case shall be in writing personally
and directly prepared by the judge, stating clearly and distinctly the facts
and the law on which it is based, signed by him, and filed with the clerk of
court.
The Court's disquisition in Velarde v. Social Justice Sociezy 206 is likewise

instructive:
In general, the essential parts of a good decision consist of the

following: (i) statement of the case; (2) statement of facts; (3) issues or
assignmer.t of errors; (4) court ruling, in which each issue, is, as a rule,
separately considered and ;-esolved; and, finally, (5) dispositiveportion. The
ponente may also opt to include an introduction or a prologue as well as m1
'°3 Id. at 3451.

204 Id. at 3452-3456.
2
°' Id. at 3475-3478.
'°6 472 Phil. 285, 321-322 (2004).
198221, 198974 and 203592
epilogue, especially in cases in which controversial or novels issues are

involved.
An introduction may consist of a concise but comprehensive

statement of the principal factual or legal issue/s of the case. In some cases
- particularly those concerning public interest; or involving complicated
commercial, scientific, technical or otherwise rare subject matters- a longer
introduction or prologue may serve to acquaint readers with the specific
nature of the controversy and the issues involved. An epilogue may be a
summation of the important principles applied to the resolution of the issues
of paramount public interest or significance. It may also lay down an
enduring philosophy of law or guiding principle.
xxxx
The foregoing parts need not always be discussed in sequence. But

they should all be present and plainly identifiable in the decision.
Depending on the writer's character, genre and style, the language should
be fresh and free-flowing, not necessarily stereotyped or in a fixed form;
much less highfalutin, hackneyed and pretentious. At all times, however, the
decision must be clear, concise, complete and correct. 207
Minute resolutions are issued for the prompt dispatch of the actions of
the Court. While they are the results of the deliberations by the Justices of the
Court, they are promulgated by the Clerk of Court or his assistants whose duty
is to inform the parties of the action taken on their cases by quoting verbatim
the resolutions adopted by the Court. 208 Unlike a decision, it does not require
the certification of the Chief Justice and is not published in the Philippine
Reports. Further, the proviso of Section 4(3), Article VIII 209 of the 1987
Constitution speaks of a decision. Indeed, as a rule, this Court lays down
doctrines or principles oflaw, which constitute binding precedent in a decision
duly signed by the members of the court concerned and certified by the Chief
Justice. 210
Be that as it may, a perusal of the records reveals that the

Sandiganbayan did not dismiss the case through a minute resolution, contrary
to the Republic's claim. While the assailed resolution was not captioned as a
decision or resolution, the same was signed by the Justices comprising the
Fifth Division of the Sandiganbayan. It likewise contains the ultimate facts,
issues and arguments of the parties, and the ruling of the court. From the
207
Id. at 325-326; Halics in the original
208
Agoy" Araneta Center, Inc., G . R. No. 196358 (Resolution), 685 PHlL 246-252 (2012) [Per J. Abad]
209
Section 4. x x xx
(3) Cases or matters heard by a Division shall be decided or resolved with the concurrence of a majority
of the members who actually took part in the deliberation on the issues in the case and voted t.hereon, and
in no case, without the concurrence of at least three of such members. \Vnen the required number is not
obtained, the case shall be decided En Banc: Provided, that no doctrine or principle of law laid down
by the Court in a decision rendered En Banc or in Division may be modified or reversed except by
the Court sitting En Banc. (Emphasis supplied.)
210
Philippine Healrh Care Providers, Inc. v. Commissioner of Internal Revenue, 616 Phil. 387, 394 (2009).
198221, l 98974 and 203592
foregoing, the Sandiganbayan's dismissal complies with the requiren1ents for

a judgment on the merits.
The filing ofa demurrer to evidence

is not an implied admission of
allegations in the complaint
Respondents Ferry and Zalamea's respective de1nurrers to evidence did

not amount to an implied admission of the allegations in the Complaint.
Section 1, Rule 33 of the Rules of Court provides:
Section 1. Demurrer to evidence. - After the plaintiff has completed

the presentation of his evidence, the defendant may move for the dismissal
on the ground that upon the facts and the Jaw the plaintiff has shown no 1ight
to relief. If his motion is denied he shall have the right to present evidence.
If the motion is granted but on appeal the order of dismissal is reversed he
shall be deemed to have waived the right to present evidence.
A de1nurrer to evidence is "a motion to dis1niss on the ground of

insufficiency of evidence and is filed after the plaintiff rests his or her case. It
is an objection by one of the parties in an action, to the effect that the evidence
which his adversary produced, is insufficient in point of law, whether true or
not, to make out a case or sustain the issue. The question in a demurrer to
evidence is whether the plaintiff, by his evidence in chief, has been able to
establish a primafacie case." 211
The Court has held that "[a] motion to dismiss on the ground of failure
to state a cause of action in the complaint hypothetically admits the truth of
the facts alleged therein. However, the hypothetical admission is limited to the
'relevant and material facts well pleaded in the complaint and inference fairly
deductible therefrom. The admission does not extend to conclusion or
interpretations of law; nor does it cover all allegations of fact the falsity of
which is subject to judicial notice. "' 212 ·
Fro1n the foregoing, it cannot be concluded that respondents Ferry and

Zalamea impliedly admitted that they conspired with respondent Tan and
Marcos to acqu1re the alleged ill-gotten wealth during their incumbency as
members of the DBP Board Directors.
rn Republic v. Sandiganbayan, 830 Phil. 4:C3, 450 (2018), citing Spouses Condes v. Court ofAppeals, 555
Phil. 311, 323 (2007).
m Drilon v. Court ofAppeals, 409 Phil. 14, 27-28 /2001); De Dias v. Bristol Laboratories Phils., Inc., 154
Phil. 311 (1974).
198221, 198974 and 203592
The complaint against respondents Feny and

Zalamea is barred by res judicata
The complaint against respondents Feny and Zalamea is already barred

by res judicata by conclusiveness of judgment.
Case law elucidated on the concept of res judicata in this wise:
Resjudicata means "a matter adjudged; a thing judicially acted upon

or decided; a thing or matter settled by judgment." It lays the rule that an
existing final judgment or decree rendered on the merits, without fraud or
collusion, by a court of competent jurisdiction, upon any matter within its
jurisdiction, is conclusive of the tights of the parties or their privies, in all
other actions or suits in the same or any other judicial tribunal or concurrent
jurisdiction on the points and matters in issue in the first suit. 213
The doctrine of res judicata is embodied in Section 47, Rule 39 of the

Rules of Court, which reads:
Section 47. Effect of Judgments or Final Orders. - The effect of a

judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in
interest by title subsequent lo the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the
same capacity; and
(c) In any other litigation between the parties or their successors in interest,
that only is deemed to have been adjudged in a former judgment or final
order which appears upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary thereto.
The above-cited provision embraces two concepts of res judicata: (1)

bar by prior judgment, as enunciated in Se.::tion 47 (b), Rule 39 of the Rules
of Court; and (2) conclusiveness of judgment under Section 47 (c), Rule 39 of
the same Rules. 214
In Yap v. Republic of the Philippines, 215 this Court discussed the

doctrine of conclusiveness of judgment, as a concept of res judicata:
213
Monterona. v. Coca-Cola Bott/en: Philippine::. inc., 845 Phil. 556,563 (2019), citing Spouses Selga v.
Brar, 673 Phil. 581, 59! (2011).
214
Social Security Commissinn v. Rizal Pou1t,,, and Lh>estock Association Inc., 665 Phil 198, 199 (2011).
215
807 Phil. 456 (2017).
198221, 198974 and 203592
The second concept · conclusiveness of judgment - states that a fact or

question which wa~ in issue in a former suit and was there judicially
passed upon and determined by a court of competent jurisdiction, is
conclusively settled by the judgment therein as far as the parties to that
action and persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or their privies,
in the same court or any other court of concurrent jurisdiction on either
the sam~, or different cause of action, while the judgment remains
unreversed by proper authority. It has been held that in order that a
judgment in one action can be conclusive as to a particular matter in another
action between the same parties or their p1ivies, it is essential that the issue
be identical. If a particular point or question is in issue in the second action,
and the judgment will depend on the determination of that particular point
or question, a former judgment between the same parties or their privies will
be final and conclusive in the second if that same point or question was in
issue and adjudicated in the first suit xx x. Identity of cause of action is not
required but merely identity of issue. 216
·Respondents Ferry and Zalamea invoke the doctrine of res judicata by

conclusiveness of judgment. They argue that Desierto 211 involves the same
transaction, parties, and issues. 218 On the other hand, the Republic insists that
Desierto is not applicable·since, in that case, the Court only affirmed that there
was no probable cause to hold respondents Tan, et al. liable under Section 3(e)
of Republic Act (RA) No. 3019. 219
In Desierto, the Republic, through the PCGG, filed a complaint for

violation of Section 3(e) of RA No. 3019, otherwise known as the Anti-Graft
and Corrupt Practices Act, against several individuals, including respondents
Tan and Ferry. The PCGG alleged that respondents Tan, et al. conspired and
acted fraudulently to accumulate ill-gotten wealth to the prejudice of the
govenunent. They also effected the Sipalay Deal, or the sale of the P340.7
Million equity holding ofDBP in l\1aranaw Hotels to Sipalay Trading, a newly
organized and undercapitalized firm, for only Pl50 Million, a p1ice grossly
disadvantageous to the government.
The Ombudsman dismissed the complaint and found that the acts of the
DBP Board of Governors should "not be condemned as a c1ime but should be
lauded for their boldness in trying their very best to save not only the Century
Park Sheraton Hotel but DBP itself, and ultimately protected the interests of
°
the government." 22 Furthermore, the Ombudsman found no evidence of
conspiracy among the private respondents therein and that the negotiations
between Sipalay Trading and the DBP were aboveboard. Thus, the Republic
filed a petition for certiorari before this Court.
1
' " Id. at 466; Emphasis in the ongina!
m 516 Phil. 509 (2006).
m Rollo (G.R. No. 198974), pp.790-79:;.
m Id. at 105-108.
no 516 Phil. 500. 5.\3 (2006).
198221, 198974 and 203592
This Court ruled that the sale between the DBP and Sipalay Trading in
relation to DBP's equity holding in Maranaw Hotel was legal, and that under
the circumstances then prevailing, the DBP officers acted in good faith and
sound exercise of judgment. There was nothing in the record to show that the
DBP officials were spurred by any corrupt motive or that they received any
material benefit from the Sipalay Deal.
In the present case, respondents Ferry and Zalamea are being held liable
as the former Vice Chairperson ofDBP and President ofMaranaw Hotels and
the former Chairperson of Board of Governors of the DBP and Maranaw
Hotels, respectively. The Republic alleges they acted in bad faith and in
conspiracy with respondents Tan, et al. to acquire ill-gotten wealth in the
Sipalay Deal.
Notably, all the elements of res judicata by conclusiveness of judgment

are present here: ( 1) the judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties; (3) the disposition of the case must be a
judgment on the merits; and (4) there must be as between the first and second
action, identity of the parties, but not identity of causes of action. 221
First, Desierto attained finality in 2006. Second, the decision was

rendered by a tribunal of competent jurisdiction, the Ombudsman, as affirmed
by this Court. Third, the disposition of Desierto was a judgment on the merits.
Finally, there is identity of parties or their privies and issues between Desierto
and the present case. The parties in the Desierto case and the present case are
the same, the Republic representing the PCGG and the DBP officials,
including respondent Ferry, who participated in the Sipalay Deal. While
respondent Zalamea was not imp leaded in Desierto, he is being indicted in the
present case as a former officer ofDBP and Maranaw Hotels. As to the identity
of the issue, "bad faith" was discussed in Desierto because it is an element of
the offense of Section 3(e) of R..A. No. 3019. The same issue of bad faith was
again raised by the Republic in the present case. Therefore, the existence of
bad faith in the Sipalay Deal is baned by res judicata by conclusiveness of
judgment.
The Republic fi:iiled Lo substantiate its

claim that respondents Feny and
Zalamea participated in the acquisition
of ill-gotten wealth
The Republic has th~ burden to prove the allegation in its Second
Amended Co1nplaint, i.e.. whether the Sipalay Deal was executed for
"' See Spouses Rosario "· A/var, 817 Phil. 994, 995, I 005 (2017).
Decision . 31 G.R. Nos. 195837,
198221, 198974 and 203592
respondent Tan and Marcos to acquire ill-gotten wealth.
Under Section 1, Rule 131 of the Rules of Court, burden of proof is the
duty of a party to present evidence on the facts in issue necessary to establish
his or her clai1n by the amount of evidence required by law. In civil cases, the
burden of proof rests upon the plaintiff, who is required to establish his or her
case by a preponderance of evidence. 222
Section l, Rule 133 of the Rules of Court provides:
Section I. Preponderance of evidence, how determined. - In civil

cases. the party having the burden of proof must establish his case by
preponderance of evidence. In determining where the preponderance or
superior weight of evidence on the issues involved lies, the court may
consider all the facts and circumstances of the case, the witnesses' manner
of testifying, their intelligence, their means and opportunity of knowing the
facts to which they are testifying, the nature of the facts to which they testify,
the probability or improbability of their testimony, their interest or want of
interest, and also their personal credibility so far as the same may
legitimately appear npon the trial. The court may also consider the number
of witnesses. though the. preponderance is not necessarily with the greater
number.
Preponderance of evidence is the weight, credit, and value of the

aggregate evidence on either side and is usually considered to be synonymous
with the term 'greater weight of evidence' or 'greater weight of credible
evidence.' Succinctly put, it only requires that evidence be greater or n1ore
convincing than the opposing evidence. 223
In this case, the Court affiims the Sandiganbayan's finding that the
Republic failed to substantiate its ~lai111 that respondents Ferry and Zalamea
participated in the acquisition ofil~-gotten wealth. 224
The pieces of evidence presented by the Republic reveal that their

complaint is still anchored on their allegation that respondents Ferry and
Zalamea, as DBP officers, acted in bad faith and in conspiracy with
respondents Tan, et al. in entering the Sipalay Deal.
The Republic is not guilty of forum-

shopping
There is forum shopping "when a party repetitively avails of several

judicial remediies in courts, sinrnltaneously or successively, all substantially
222
See Heirs of Villanueva v Heirs ofMmdoza. 810 Phil. 172, 182-183, 186 (2017).
223
See BankofthePhilippinelslands v. Mendoza. 807 Phil. 640. 641,648 (20l7).
224
Rollo (G.R. No. 1989741, p. 21.
198221, 198974 and 203592
founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in
or already resolved adversely by some other court." 225
Forum shopping can be committed in three ways: (1) by filing multiple

cases based on the same cause of action and with the same prayer, the previous
case not having been resolved yet (where the ground for dismissal is litis
pendentia); (2) by filing multiple cases based on the same cause of action and
with the same prayer, the previous case having been finally resolved (where
the ground for dismissal is resjudicata); and (3) by filing multiple cases based
on the same cause of action but with different prayers (splitting of causes of
action, where the ground for dismissal is also either litis pendentia or res
judicata). 226
The elements of forum-shopping are: (a) identity of the parties or at

least such parties that represent the same interests in both actions; (b) identity
of rights asserted and reliefs prayed for, the relief founded on the same facts;
and (c) any judgment rendered in one action will amount to res judicata in the
other action. 227
Based on the above-mentioned elements, the Republic did not commit

forum-shopping. Clearly, the Republic did not institute two (2) suits in
different courts, as all the petitions involved in this case emanated from the
same case filed before the Sandiganbayan for the recovery ofill-gotten wealth.
Moreover, these petitions involve different issues. Thus, there is no forum-
shopping.
II. G.R. No. 198221
The testimonies ofthe Yujuicos relating

to the validity of respondent Tan's
acquisition of GenBank are barred by
res judicata
The Sandiganbayan did not act with grave abuse of discretion in

prohibiting the Republic from presenting the testimonies of the Yujuicos on
the ground of res judicata.
The Republic insisted to present the Yujuicos to testify on the specific
225
Asia United Bankv. Goodland Co .• Inc., 660 Phil. 504,514 (201 l).
226
See Pentacapital Investment Corporation v Mahincry, 637 Phil. 283,289, 309 (2010).
227
Santos Ventura Hocorma Foundation, Inc. V. Mabalacat Institute, Inc., G.R. No. 211563, 29 September
2021.
198221, 198974 and 203592
averments of the Second Amended Complaint, particularly paragraph 14,

subparagraphs (a)(l), (2), and (3), which read:
14. Defendant Lucio C. Tan, by himself and/or in unlawful concert with

Defendants Ferdinand E. Marcos and Imelda R. Marcos, taking undue
advantage of his relationship and influence with Defendant Spouses, and
embarking upon devices, schemes and strategems, including the use of
Defendant Corporations, among others:
(a) Without sufficient coU3cteral and for nominal consideration, with the
active collaboration, knowledge and willing participation of Defendant
Willy Co, arbitrarily and fraudulently acquired control of [GenBank.]
which eventually became Allied Banking Corporation, through the
manipulation of then Central Bank Governor [Licaros], and of then
President [Domingo] of the [PNB], as shown by, but not limited to, the
following circumstances:
(1) In 1976, the [GenBank] got into financial difficulties. The

Central Bank then extended an emergency Joan to GBTC reaching
a total of P310-million. In extending this loan, the [Central Bank]
however, took control of [GenBank] when the latter executed an
irrevocable proxy of2/3 of[GenBank.]'s outstanding shares in favor
of the [Central Bank] and when 7 of the 11-member Board of
Directors were [Central Bank] nominees. Subsequently, on March
25, 1977, the Monetary Board of [Central Baril<] issued a Resolution
declaiing [GenBank] insolvent, forbidding it to do business and
placing it under receivership.
(2) In the meantime, a public bidding for the sale of [Gen.Bank.]

assets and liabilities v,as scheduled at 7:00 P.M. on Ma[r]ch 28, 1977.
Among the conditions of the bidding were: (a) submission by the
bidder of Letter of Credit issued by a bank acceptable to [Central
Bank] to guaranty payment or as collateral of the [Central Bank]
emergency loan; and (b) a 2-year period to repay the said [Central
Barile] emergency loan. On March 29, 1977, [Central Bai:ik] thru a
Monetaiy Board Resolution, approved the bid of the group of Lucio
Tm1 and Willy Co. This bid, ainong other things, offered to pay only
!'500,000.00 for [GenBankl assets estimated at '1"688,201,301.45;
Capital Accounts ofl"l03,984,477.55; Cash ofl"25,698,473.00; and
the takeover of the [GenBankl Head Office and branch offices. The
required Letter of Credit was not also attached to the bid. What was
attached to the bid was a letter of Defendant [Domingo] as PNB
Presidenl promising to open an irrevocable letter of credit to secure
the advances of the Central Bank in the amount of l"3 IO Million.
Without this letter of con:mitment, the Lucio Tan bid would not have
been approved' But such letter of commitment was a fraud because
it was not meant to be fulfilled. Defendants [Marcos], [Licaros] and
[Domingo] conspired together in giving the Lucio Tan group undue
favors such as doing away with the required irrevocable letter of
credit, the extension of the tenn of payment from two years to five
years, the approval of second mortgage as collateral for the Central
Ba..nk advances which was deficient by more than l"90 Million, and
many otl1er concessions to the great prejudice of the government and
198221, 198974 and 203592
of the [GenBank l stockholders.
(3) As already started, [GenBank] eventually became [Allied Bank]

in April, 1977. The defendants Lucio Tan, Willy S. Co and Florencio
T. Santos are not oµly incorporators and directors but they are also
the major shareholders of this new bank. 228
The Yujuicos cannot testify on, and the Republic cannot present
evidence with respect to, the afore-quoted paragraphs, which mainly allege
that respondent Tan "arbitrarily and fraudulently acquired control of
[GenBank] which eventually became [Allied Bank], through the manipulation
of then CentTal Bank Gove111or [Licaros], and of then President [Domingo] of
the Philippine National Bank [PNB]." This matter has been settled in the
GenBank Liquidation Case, and therefore barred by res judicata under the
concept of conclusiveness of judgment.
Res judicata by conclusiveness of judgment applies "when there is

identity of parties in the first and second cases, but no identity of causes of
action, and a fact or question has been squarely put in issue, judicially passed
upon, and adjudged in a former suit by a court of competent jurisdiction. The
fact or question settled by final judgment or order binds the parties to
that action, and continues to bind them while the judgment or order remains
standing and u.nreversed by proper authority on a timely motion or petition;
the conclusively-settled fact or question cannot again be litigated in any
future or other action between the same parties or their privies and
successors-in-interest, in the same or in any other court of concurrent
jurisdiction, either for the same or for a different cause of action." 229 Thus,
"a party is barred from presenting evidence on a fact or issue already
judicially tried and decided. " 230
In applying res judicata, it is not required that there be absolute identity,

as only substantial identity of the parties is necessary. "There is substantial
identity of parties when there is community of interest or privity of interest
between a party in the first and a party in the second case even if the first
case did not implead the latter." 231
In this case, the GenBank Liquidation Case was invoked as having

settled the facts sought to be established by the Republic through the
testimonies of the Yujuicos.
The GenBank Liquidation Case involved the special proceedings for

liquidation ofGenBank filed by the liquidator designated by the Central Bank
22
'Rollo (G.R. No. 198221 ). pp. 936-938.
129
Gonzaga v. Cmnmissian on Audit, G.R. No. 244816, 29 June 2021; Emphasis supplied.
230
See Presidential Decree l 1io. 127i Com•niltce v De Guzman, 801 Phil. 731,733,764 (2016); Emphasis
supplied. ·
:rn FELS Energy, [nc. v. J~rovince o.(Butcz,,1g;r1s, 545 Phil. 92, ii0 (2007); Emphasis in the original.
198221, 198974 and 203592
(now, the Bangko Senrral ng P.ilipinas ). In that case, the Court ofAppeals (CA)
reversed and set aside the decision of the Court of First Instance (CFI) (now,
Regional Trial Court), which annulled Monetary Board Resolution (MBR)
Nos. 675 and 677 for being "plainly arbitrary and made in bad faith." MBR
Nos. 675 and 677 ordered the closure of GenBank and approved the
liquidation plan of GenBank, respectively. On petition for review before this
Court, GenBank asserted that the Central Bank "maliciously and arbitrarily
and in bad faith ordered its closure xxx and liquidation and bidding xxx." 232
In resolving the petition, this Court found no reversible error in the CA's
reversal of the CFI decision. This Court held that MBR Nos. 675 and 677 are
valid and were issued in good faith. We ruled that in issuing said MBRs, the
Central Bank neither acted with grave abuse of discretion nor violated any
existing procedural or substantive law.
MBR No. 675 forbade GenBank to do business in the Philippines and

designated a receiver in view of the report finding the bank insolvent and
unable to comply with the directives of the Central Bank to address
GenBank's financial difficulties. The Central Bank found that GenBank's
continuance in business w_ould involve losses to its depositors and creditors.
In this regard, tbis Court held:
It must be stressed tl)at petitioner Genbank's financial

predicament did not crop up overnight, nor is it a product of a single
financial indiscretion. so to speak. The root of its problem and eventual
downfall is traceable to unsound banking practices employed by
management. Mentioned in this regard may be made of the all-out financial
support given to Filcapital Development Corporation (a related interest of
the Yujuico Family Group fil1d directors and officers of Genbfil1k) and the
standing practice of extending DOSRl loans which, at one point, reached a
peak of Pl 72.3 million or 26% of the total loan portfolio of P666.78 million.
Of the final figure, 59.4% thereof was classified as doubtful and P0.505
million as w1colleGiible. And 91.7% of such DOSRI accounts were
unsecured leaving only 8% thereof secured. All these unsound practices
occurred way before their resulting crippling effects became manifest
sometime in December 1976, further leading the bank to resort to other
unsound banking practices, like incurring daily overdrafts. These
problems, as earlier narrated in the assailed CA decision, were taken up
by the then CB Governor with the Board of Directors of Genbank in a
meeting held on December 27, 1976. Thus, when the crucial March 23,
1977 meeting was held, there can be no doubt that petitioner Genbank
was totall:i:: aware of the predicament it has gotten itself into and the
conditions which the CB had imposed to address the situation for the
protection of the depositors and the banking public. It is not as if CB
sprang a surprise on petitioner Genbank when Resolution 675 was
issued on March 25, 1977 declaring Genbank insolvent0 Petitioner
Genbank's posture that i1 was given only two (2) days to remedy the
"' General Bank & 1h1s/Co. ~ Central Bank of the Philippines, 524 Phil. 232, 248-249 (2006).
198221, 198974 and 203592
situation is specious at best. 233
MBR No. 677, on the other hand, confirmed that GenBank was
insolvent and could not resume business with safety to its depositors, creditors,
and the general public; ordered the liquidation of GenBank; and approved "a
liquidation plan whereby all the assets of Genbank should be purchased
by the Lucio Tan Group which should also assume all the liabilities under
certain terms and conditions." 234 This Court noted that "Genbank, Now Allied
Bank, was able to resume normal banking operations immediately on June 2,
1977, thereafter meeting all the demands for deposit withdrawals and paying
off all CB emergency advances to Genbank x x x[,] a strong indication that
the Central Bank performed its duty to maintain public confidence in the
banking system." 235
Thus, absent any "compelling proof to becloud the bona fides of the
decision of the Central Bank to close and order the liquidation of Genbank
pursuant to JV[onetaiy Board Resolution Nos. 675 and 677," 236 this Court
sustained the validity of said l\1RBs.
Consequently, in upholding the validity of MBR No. 677, this Court

likewise upheld the validity of the approval of the liquidation plan, i.e.,
the purchase by the Tan Group of all the assets of GenBank.
In the present case, it is clear from the allegations in paragraph 14,

subparagraphs (a)(l), (2), and (3) of the Second Amended Complaint and the
purposes for which the testimonies of the Yujuicos were being offered, that
the Republic seeks to relitigate an issue that was already settled in the
GenBank Liquidation Case: the validity of the sale ofGenBank's assets to the
Tan Group.
However, as mentioned, the GenBank Liquidation Case ruled that MRB

No. 677, which approved the liquidation plan involving the Tan Group
purchase of all the assets ofGenBank and the assumption of all the liabilities
of the latter, was valid a11d issued in good faith. In doing so, this Court
effectively upheld the sale of GenBank to the Tan Group.
Notably, while it appears that the parties in this case and in the GenBank
Liquidation Case are different, the releva.rit parties herein are privies and/or
successors-in-interest of the parties in the GenBank Liquidation Case.
The Marcoses, respondents Tan, Willy Co, Allied Bank, Licaros, and
Do1ningo, while not parties in the GenBank Liquidation Case, were
m Id. at 258-259; Emphasis supplied.

234
Id. at 245; Emphasis supplied.
235
Id. at 259.
,1, Id.
198221, 198974 and 203592
nonetheless pnv1es and/or successors-rn-rnterest of the parties therein.

Domingo, as then PNB President, issued a letter of commitment for a letter of
credit, which was submitted by the Tan Group to the Central Bank as part of
their bid to purchase GenBank's assets. Licaros, as then Central Bank
Governor, was likewise privy to the case as the Central Bank and its.
designated liquidator were the ones who facilitated the liquidation of
GenBank. Respondents Tan, Willy Co, and Allied Bank were also privies and
successors-in-interest of GenBank, the petitioner in the GenBank Liquidation
Case. The Marcoses were also privies in view of their alleged involvement in
the transfer ofGenBank's assets to the Tan Group.
Thus, the Republic's attempt to relitigate the issue on the validity of the
Tan Group's acquisition of GenBank is barred by res judicata by
conclusiveness of judgment. The validity and legality of such sale is a
conclusively settled fact or question in the GenBank Liquidation Case and
cannot again be litigated in the present case, even if different causes of action
are involved. The Republic, thus, cannot seek to present the testimonies of the
Yujuicos to establish that the sale of all the assets of GenBank to the Tan
Group was "arbitrarily and fraudulently" made or made in bad faith "through
the manipulation of then Central Bank Governor [Licaros]."
Further, there appears to be nothing on record that the Yujuicos were

supposed to be presented as witnesses to testify on matters other than
paragraph 14, subparagraphs (a)(l), (2), and (3) of the Second Amended
Complaint.
The substance of the testimonies of the Yujuicos relates only to the

events that led to the sale of GenBank. Joselito 's judicial affidavit narrated the
events leading to the sale of GenBank. The same is true about the judicial
affidavit of Aderito. They discussed Marcos' alleged undue favorable
treatment of respondent Tan through then Central Bank Governor Licaros, and
the alleged irregularities in the sale of GenBank's assets to the Tan Group.
There was no just or valid reason for

the inhibition of the Members of the
Sandiganbayan s Fifth Division
There is no grave abuse of discretion on the part of the Sandiganbayan

when it denied the Republic's 1notion for voluntary inhibition.
Section 1, Rule 13 7 of the Rules of Court provides:
SECTION 1. Disqualification ofjudges. - No judge or judicial

officer shall sit in any case in which he, or his wife or child, is pecuniarily
interested as heir, legatee, creditor or otherwise, or in which he is related to
198221, 198974 and 203592
either party within the sixth degree of consanguinity or affinity, or to

counsel within the fourth degree, computed according to the rules of the
civil law, or in which he has been executor, administrator, guardian, trustee
or counsel, or in which he has presided in any inferior court when his ruling
or decision is the subject ofreview, without the written consent of all parties
in interest, signed by them and entered upon the record.
A judge may, in the exercise of his sound discretion, disqualify

himself from sitting in a case, for just or valid reasons other than those
mentioned above.
The inhibition of judges or justices may be mandatory or voluntary. The

first paragraph pertains to mandatory inhibition. The second paragraph
pertains to voluntary inhibition, which must be based on just or valid
reasons. 237
Mere allegation of bias or partiality does not constitute just or valid

reason for voluntary inhibition of a judge or justice, thus:
Nonetheless, while the rule allows judges, in the exercise of sound

discretion, to voluntarily inhibit themselves from hearing a case, it provides
that the inhibition must be based on just or valid reasons. In prior cases
interpreting this rule, the most recent of which is Philippine Commercial
International Bank v. Spouses Wilson Dy Hong Pi, etc., et al., the Court
noted that the mere imputation of bias or partiality is not enough ground for
inhibition, especially when the charge is without basis. Acts or conduct
clearly indicative of arbitrariness or prejudice has to be shown.
Extrinsic evidence must further be presented to establish bias, bad faith,
malice, or corrupt purpose, in addition to palpable error which may be
inferred from the decision or order itself. Stated differently, the bare
allegatioltls of the judge's partiality will not suffice in the absence of
clear and convincing evidence to overcome the presumption that the
judge will undertake his noble role of dispensing justice in accordance
with law and evidence, and without fear or favor. Verily, for bias and
prejudice to be considered valid reasons for the involuntary inhibition of
judges, mere suspicion is not enough. Let it be further noted that the option
given to a judge to choose whether or not to handle a particular case should
be counterbalanced by the judge's sworn duty to administer justice without
fear of repression. 238
In this case, the Republic, in attributing bias and partiality on the pa.ii
of the members of the Sandiganbayan's Fifth Division, citing various adverse
rulings of the Sandiganbayan, such as denying the recall or presentation of the
testimonies of the Yujuicos, coercing the Republic to rest its case, considering
the Republic to have waived the presentation of witnesses who were not
present during their scheduled date of presentation, and refusing to suspend
proceedings due to pending incidents.
237 Barnes v. Reyes, 614 Phil. 299 (2009).

238 Id. at 304-305; Emphasis supplied.
198221, 198974 and 203592
However, as discussed above, the Republic cannot present the

testimonies of Yujuicos, which pertain to matters already settled in the
GenBank Liquidation Case. Meanwhile, the pendency of certain incidents was
not a valid ground for the suspension of the proceedings that began in 1987.
While all the parties were at fault for the delay of the proceedings due to
repeated postponements, the Sandiganbayan pointed out that the Republic
only utilized twenty-four (24) out of the sixty-four (64) trial dates that it gave
the Republic to present its evidence. 239 The Sandiganbayan also noted
respondents' motions which it denied, and the rulings it made that were
favorable to the Republic.
In any case, the Court has ruled that the disqualification of a judge or
justice cannot be predicated on the adverse or erroneous nature of the rulings
towards the movant, to wit:
To prove bias a..TJ.d prejudice on the part of respondent judge,

petitioners harp on the alleged adverse and erroneous mlings of respondent
judge on their va1ious motions. By themselves, however, they do not
sufficiently prove bias and prejudice to disqualify respondent judge. To be
disqualifying, the bias and prejudice must be shown to have stemmed
from an extrajudicial source and result in an opinion on the merits on
some basis other than what the judge learned from his participation in
the case. Opinions formed in the course of judicial proceedings,
although erroneous, as long as they are based on the evidence presented
and conduct observed by the judge, do not prove personal bias or
prejudice on the part of the judge. As a general mle, repeated rulings
against a litigant, no matter how erroneous and vigorously and
consistently expressed, are not a basis for disqualification of a judge on
grounds of bias and prejudice. Extrinsic evidence is required to establish
bias, bad faith, malice or corrupt purpose, in addition to the palpable error
which may be inferred from the decision or order itself. Although the
decision may seem so erroneous as to raise doubts concerning a judge's
integrity, abs1;:nt extrinsic evidence, the decision itself would be insufficient
to establish a case against the judge. The only exception to the rnle is when
the error is so gross and patent as to produce an ineluctable inference of bad
faith or malice. 240
Thus, the adverse or erroneous rulings of the Sandiganbayan against the

Republic, without more, do not prove bias or partiality warranting the
inhibition of the members of the Sandiganbayan's Fifth Division from this
case. The Republic failed to adduce extrinsic evidence or any extrajudicial
source of the Sandiganbayan's alleged bias, partiality, malice, or bad faith in
making the cited adverse or erroneous rulings.
At most, the Sandiganbayan's acts merely show that it intended to

expedite the disposition of the case, which has been pending for decades, and
that the same were made after giving the Republic more than enough
239 Rollo (G.R. No. 198221), p. 134.
240
Republic v. Gingoyon, 514 Phil. 657, 711-712 (2005); Emphasis supplied.
198221, 198974 and 203592
opportunity to prove its case. Clearly, these do not amount to malice or bad
faith. Consequently, there is no just or valid reason for the members of the
Sandiganbayan's Fifth Division to inhibit from this case.
HI. G.R. No. 198974
PMFTC, Inc. is not an indispensable

party
PMFTC, Inc. is not an indispensable party and need not be impleaded

in this case.
An indispensable party is a party in interest without whom no final

determination can be had of an action, and must therefore be joined as plaintiff
or defendant. 241
In this case, PMFTC, Inc. is not an indispensable party. There can be a

final determination of this case even if PMFTC, Inc. is not joined as a
defendant. PM:FTC, Inc. is being impleaded because it was allegedly
fraudulently formed and organized to remove the substantial capital and assets
of Fortune Tobacco and Northern Tobacco placing these said capital and assets
beyond the court's authority and jurisdiction.
Section 19, Rule 3 of the Rules of Court provides for the rule on the
transfer of interest:
Section 19. Transfer of interest. - In case of any transfer of interest,

the action may be continued by or against the original party, unless the court
upon motion directs the person to whom the interest is transferred to be
substituted in the action or joined with the 01iginal party. (19)
A transferee pendente lite of the property in litigation "stands exactly

in the shoes of his predecessor-in-interest, bound by the proceedings and
judgment in the case before the rights were assigned to him. xxx Essentially,
the law already considers the transferee joined or substituted in the
pending action, commencing at the exact moment when the transfer of
interest is perfected between the original party-transferor and the transferee
pendente lite. " 242
Thus, in this case, assuming that PMFTC, Inc. is a transferee pendente
241
RULES OF COURT, Rule 3, Sec. 7.
242
Vda. de Santiago v. Suing, 772 Phil. 107 (2015), citing Natalia Realty, inc. v. Court ofAppeals, 440 Phil.
1 (2002): Emphasis supplied.
198221, 198974 and 203592
lite of the properties sought to be recovered by the Republic, it is bound by

the proceedings already had in this case, even those concluded before the
transfer of the assets from Fortune Tobacco and Northern Tobacco sometime
in 2010.
Consequently, PMFTC, Inc. need not be impleaded as it would, in any

event, be bound by the judgment in this case against its predecessors-in-
interest, Fortwne Tobacco and Northern Tobacco. 243
IV. G.R. No. 203592
Ill-gotten wealth is not limited to

assets that originated from the
government
Indeed, the concept of ill-gotten wealth had long been expanded. EO

No. I and Chavez 244 did not limit ill-gotten wealth to assets and properties that
originated from the government itself.
EO Nos. l and 2, 245 the PCGG Rules and Regulations, 246 and
jurisprudence247 consistently recognized that assets and properties may fall
under the broad rubric of ill-gotten wealth even if they did not originate from
the govenunent. Private properties may likewise be considered ill-gotten if
they were acquired by taking undue advantage of official position, authority,
relationship, or influence.
In several cases, 248 the Court affim1ed that ill-gotten wealth may be
acquired in the following manner: (1) through or as a result of the improper
or illegal use of or conversion of funds or properties owned by the
143
Santiago Land Development Corp. v. Court ofAppeals, 334 Phil. 741 (1997).
244
360 Phil. 133 (1998).
145
EO No. !, s. 1986, Creating the Presidential Commission on Good Government, 28 February 1986; EO
No. 2, s. 1986, Regarding the Funds. Moneys, Assets, and Properties Illegally Acquired or
Misappropriated by Former President Ferdinand Marcos, L'fliJrs. Imelda Romualdez }darcos, their Close
Relatives, Subordinates, Business Associates, Dummies. Agents, or Nominees, 12 March 1986.
246
Issued ll April 1986.
247
See Bataan Shipyard & Engineering Co., Inc. (Baseco) v. Presidential Commission on Good Government,
234 Phil. 180 (1987); Chavez v. Presidential Commission on Good Government, 360 Phil. 133 (1998):
Yuchengco v. Sandiganbayan, 515 Phil. I (2006); Republic v. Estate ofHans Menzi, 512 Phil. 425 (2005):
Republic v. Sandiganbayan, 663 Phil. 212 (2011).
248
See e.g. Chavez v. Presidential Commission on Good Government, 360 Phil. 133 (1998) «Based on the
aforementioned Executive Orders, "ill-gotten wealth" refers to assets and properties purportedly acquired,
directly or indirectly, by fonner President Marcos, his immediate family, relatives and close associates
through or as a result of their improper or illegal use of government funds or properties; or their having
taken undue advantage of their public office; or their use of powers. influences or relationships, '"resulting
in their unjust en:richment and causing grave damage and prejudice to the Filipino people and the Republic
of the Philippines;" Bataan Shipyard & Engineering Co., inc. (Baseco) v: Presidential Commission on
Good Government, 234 Phil. 180 (1987). ·
198221, 198974 and 203592
Government of the Philippines or any of its branches, instrumentalities,

enterprises, banks or financial institutions (first mode); or (2) by taking undue
advantage of office, authority, influence, connections or relationship (second
mode).
In Disini v. Republic (Disini), 249 the Court ruled that the source of the
funds, i.e., private corporations, does not divest the commissions of their
public character:
Evidently, the BNPP is a government project the construction of

which was awarded to Westinghouse as the main contractor and B&R as the
architect-engineer, allegedly through undue advantage ofDisini's influence
and close association with President Marcos. In exchange, Disini allegedly
received substantial commissions based on 3% and 10% of the total contract
price from Westinghouse and B&R, respectively. Obviously, the payment
of the alleged commissions would be coming from Westinghouse and B&R,
which are private corporations, and not directly from the government.
However, contrary to the contention ofDisini, ill-gotten wealth also

encompasses those that are derived indirectly from government funds or
properties through the use of power, influence, or relationship resulting in
unjust enrichment and causing grave damage and prejudice to the Filipino
people and the Republic. 250
Relatedly, in Republic v. Sandiganbayan, 251 the Court laid down the

elements that must be established before assets or properties may be
considered ill-gotten: (1) they must have "originated from the government
itself," and (2) they must have been taken by illegal means. Notably, the issue
in that case was whether coco levy funds were used to acquire shares of stock.
Thus, the allegations pertained to the first mode of acquiring ill-gotten wealth,
i.e., through or because of the improper or illegal use of or conversion of
public funds. Our ruling in said case, therefore, should not be construed to
diminish the concept of ill-gotten wealth. Rather, the doctrine in Republic v.
Sandiganbayan 252 should be confined to ill-gotten wealth alleged to have been
acquired through the first mode.
Review ofthe evidence offered to prove

the elements of ill-gotten wealth
The elements of ill-gotten wealth based on EO Nos. I and 2, the PCGG

Rules and Regulations, and relevant jurisprudence are the following:
249
G.R.No.205172, 15June2021.
250
Id. at I 1.
251 663 Phil. 212 (2011).
252
ld. at 300-301.
198221, 198974 and 203592
1. Assets and properties were acquired;
2. It was acquired by Marcos, respondent Imelda, their close relatives,

subordinates, business associates, agents or nominees;
3. The manner of acquisition was either:
a. through or because of the improper or illegal use of funds or

properties owned by the Government of the Philippines or any
of its branches, instrumentalities, enterprises, banks, or
financial institutions, or
b. by taking undue advantage of their office, authority, influence,

connections, or relationship; and
4. The acquisition resulted in their unjust enrichment and caused grave

damage and prejudice to the Filipino people and the Republic of the
Philippines.
To dete1mine whether these elements are present in this case, the Court
should focus not only on the admissibility, but also on the probative value, of
the evidence adduced by the Republic. Indeed, even if the Republic's pieces
of evidence were admissible, the Court 111ust still determine whether each
element of ill-gotten wealth has evidentiary mooring.
Here, even ifwe apply the comprehensive definition of ill-gotten wealth,

the pieces of evidence relied upon by the Republic failed to establish all its
elements. Notably, some of these pieces of evidence are even of doubtful
admissibility.
To recap, the following are the relevant pieces of evidence presented by

the Republic in support of its case: (a) respondent Imelda's Amended Answer;
(b) respondent Tan's Written Disclosure; (c) Marcos, Jr. 's testimony; (d)
Gapud's affidavit; and (e) voluminous documentary evidence found by the
PCGG in their investigations.
It appears, however, that none of the pieces of evidence relied upon by

the Republic was successful in establishing the manner by which respondents
allegedly acquired ill-gotten wealth. It was not shown, through these pieces of
evidence, if and how respondents took undue advantage of their office,
authority, influence, connections, or relationship. As regards Gapud's affidavit
and Tan's Written Disclosure, they are inadmissible to prove any of the
elements of ill-gotten wealth. Summarized below are the pertinent points
supported by each piece of evidence, as alleged by the Republic, together with
the admissibility and probative weight of each.
198221, 198974 and 203592
a) Respondent Imelda :S Amended Answer
The Republic points out that in respondent Imelda's Amended Answer,

she appeared to have alleged that Marcos had 60% beneficial ownership in
several of respondent Tan's companies. 253
As mentioned, the Sandiganbayan did not admit the Amended Answer

because respondent Imelda's cross-claim was premised on independent and
distinct clai1ns against respondents Tan, et al., which did not involve the same
transactions or acts as that of the Republic's principal cause of action.
According to the Sandiganbayan, respondent Imelda may pursue her claims
against respondents Tan, et al. in a separate proceeding before the trial court,
not the Sandiganbayan.
Nevertheless, the Republic marked and formally offered the Amended

Answer as its Exhibit M, 254 which the Sandiganbayan admitted as evidence
for the Republic. 255 According to the Republic, the statements in the Amended
Answer support the Republic's theory that Marcos - in collaboration with
respondent Tan - concealed ill-gotten wealth by creating layers of
corporations in which Marcos owned 60% beneficial ownership.
On the other hand, respondents contend that the Amended Answer

contradicts the Republic's theory because the allegation that Marcos owned
60% of the subject business venture with respondent Tan is inconsistent with
the allegation that ill-gotten wealth are properties amassed by Marcos that
were part of the vast resources of the govemment. 256
Considering that the Amended Answer was never admitted as a

pleading, it cannot be considered as a judicial admission under Section 4, Rule
129 of the Rules of Court. In Ching v. Court ofAppeals 257 (Ching), the Court
held that a pleading which loses its status as such, either because it was
superseded or amended, is no longer a judicial admission.
Further, the Amended Answer should not prejudice the other

respondents under the res inter alias acta rule, which provides that "[a] party
cannot be prejudiced by an act, declaration or omission of another. ... " 258 The
allegations found in the Amended Answer is considered hearsay as against the
other respondents. 259
253
Himmel Industries, F01iune Tobacco, Foremost Fa1111s,Asia Brewe1y, Grandspan, Silangan Holdings, and
Dominium Realty and Construction Corp.
254
Rollo (G.R. No. 203592), p. 4000.
255
Id. at 141.
256
Id. at 3517-3518.
257
387 Phil. 28 (2000).
258
See RULES OF COURT, Rule 130, Sec. 28.
59
' See People v. Enero, 863 Phil. 680 (2019).
Decision 45 G.R, Nos. 195837,
198221, 198974 and 203592
In Salapuddin v. Court ofAppeals, 260 the Court explained the rationale

behind the res inter alios acta rule:
On a principle of good faith and mutual convenience, a ma.n's own

acts a.re binding upon himself, and a.re evidence against him. So a.re his
conduct and declarations. Yet it would not only be rightly inconvenient, but
also manifestly unjust, that a man should be bound by tl1e acts of mere
unauthoriized strangers; and if a party ought not to be bound by tl1e acts of
strangers., neither ought their acts or conduct be used as evidence against
him.261
As exceptions to the res inter alios acta rule, the following admissions
may be allowed under Sections 29, 30, and 31, 262 Rule 130 of the Rules of
Court:
Section 29. Admission by co-partner or agent. - The act or

declaration of a partner or agent of the party within the scope of his
autllority and during the existence of the partnership or agency, may be
given in evidence against such party after the partnership or agency is
shown by evidence oilier than such act or declaration. The same rule
applies to tl1e act or declaration of a joint owner, joint debtor, or other
person jointly interested with the party.
Section 30. Admission by conspirator. - The act or

declaration of a conspirator relating to the conspiracy and during its
existence, may be given in evidence against the co-conspirator after the
conspiracy is shown by evidence other than such act of declaration.
Section 31. Admission by privies. - Where one derives title

to property from another, the act, declaration, or omission of the latter,
while holding the title, in relation to tlle property, is evidence against the
former.
None of these exceptions, however, apply to the Alnended Answer.
First, Section 29, Rule 130 of the Rules of Court cannot apply because
it has not been established that there is a partnership or agency between
respondents Imelda and Tan, et al. The alleged business relationship at issue
here is that between Marcos and respondents Tan, et al.
Second, Section 30, Rule 130 of the Rules of Court cannot apply
because respondent In1elda did not make the declarations while engaged in
carrying out the conspiracy - assuming such conspiracy even exists. In
Estrada v. Office of the Ombudsman, 263 the Comt laid down the requisites for
a statement to be treated as an admission by a conspirator:
260
704 Phil. 577 (2013), citing Tamargo v. Awingan, 624 Phil. 312 (2010).
261
Id. at 60 I.
262
Now, 2019 REVISED RULES OF COURT, Rule 130, Secs. 30, 31. and 32.
263
837 Phil. 913 (2018).
198221, 198974 and 203592
In order that the admission of a conspirator may be received as

evidence against his co-conspirator, it is necessary that first, the
conspiracy be first proved by evidence other than the admission itself;
second, the admission relates to the common object; and third, it has been
made while the declairant was engaged in carrying out the
conspiracy. 264
Even if the Court assumes that the first and second requisites are present,
the third requisite cannot be established in this case. Respondent Imelda made
the statements in 2001 when her Amended Answer was filed, while the alleged
schemes happened approximately within the years of 1975 to 1986. Therefore,
her statements cannot be used against respondents Tan, et al. as ad1nissions of
a conspirator.
Third, Section 31, Rule 130 of the Rules of Court does not apply
because it was not established that there is privity of estate, denoting a
succession in rights, 265 between respondents Imelda and Tan, et al.
Moreover, the Amended Answer cannot be utilized as corroborative

evidence against the other respondents because they were not able to cross-
examine respondent Imelda on her statements in her Amended Answer. In
People v. Raquel, 266 the Court held that:
The extrajudicial statements of an accused implicating a co-accused

may not be utilized against the latter, unless these are repeated in open court.
If the accused never had the opportunity to cross-examine his co-accused
on the latter's extrajudicial statements, it is elementary that the same are
hearsay as against said accused. That is exactly the situation, and the
disadvantaged plight of appellants, in the case .at bar.
Extreme caution should be exercised by the comts in dealing with

the confession of an accused which implicates his co-accused. A distinction,
obviously, should be made between extrajudicial and judicial confessions.
The former deprives the other accused of the opportunity to cross-examine
the confessant, while in the latter his confession is thrown wide open for
.cross-examination and rebuttal. 267
Assuming the Amended Answer falls under any of the exceptions to the
res inter alias acta rule and can be used against the other respondents without
them having to cross-examine respondent Imelda, it still fails to prove the
Republic's theory that the alleged 60% beneficial ownership of Marcos in
respondent Tan's companies are ill-gotten wealth.
264
Id. at 1008-1009; Emphasis supplied.
265
See Republic v. Sandiganbayan, 453 Phil. 1059 (2003).
266
333 Phil. 72 (1996), citing People v. Ola, 236 Phil. 1 (1987) and People" Flores, 272-APhil. 264 (1991);
See also People v. Janson, 448 Phil. 726 (2003).
267
Id. at 79-80.
198221, 198974 and 203592
To be sure, respondent Imelda merely stated in her Amended Answer

that "[Marcos] had sixty percent (60%) beneficial ownership in [Tan's]
companies, which beneficial interests were held in trust by [Tan] personally
and through his family members and business associates who appeared as the
recorded stockholders of said companies." There is nothing, however, in said
Am.ended Answer that would even suggest that undue advantage of office,
authority, influence, connections, or relationship was employed to facilitate
the acquisition by Marcos of his 60% beneficial ownership in respondent
Tan's companies.
All told, respondent Imelda's Amended Answer cannot be used against

the other respondents under the res inter alias acta rule, and her statements do
not fall under any of the exceptions. Respondent I1nelda should have been
cross-examined by the other respondents before her Amended Answer can be
used against them, otherwise, it is hearsay. In any case, said Amended Answer
merely alleged that Marcos has 60% beneficial ownership in respondent Tan's
companies without allegation, much less an admission, that undue advantage
of office, authority, influence, connections, or relationship was employed.
b) Respondent Tans Written Disclosure
The Republic relies on respondent Tan's W1itten Disclosure to prove

the 60-40 business arrangement between Marcos and respondent Tan,
including the supposed incorporation of holding con1panies for Marcos'
benefit and the supposed delivery of deeds of trust or assignment signed iri
blank. 268 The Written Disclosure was allegedly executed and submitted by
respondent Tan in 1986 to Senator Salonga, as Chairman of the PCGG, during
the investigation on the alleged Marcos-Tan partnership. 269
Before the Sandiganbayan, Senator Salonga testified and attested to the

docmnent's genuineness and due execution. 270 Both the original and certified
true copy of the Written Disclosure were presented in cowi. 271 The Republic
also presented in evidence excerpts from Senator Salonga's book,
"Presidential Plunder," to narrate the circwnstances smTounding the execution
of the Written Disclosure. 272 The Republic claims that Senator Salonga's
testimony suffices to admit into evidence the Written Disclosure. 273
Respondents Tan, et al., argue that Senator Salonga's direct

examination was not completed and he was not cross-examined by the defense.
268 Rollo (G.R. No. 203592), pp. 3941-3951.

269
Id. at 3940.
270
Id. at 3950.
271
Id. at 3940.
'272 Id. at 73.
"' Id. at 4058.
198221, 198974 and 203592
As such, his testimony is worthless and may be stricken off the record. 274 Also,
the testimony of Senator Salonga, who relied on his book "Presidential
Plunder" to prove the alleged favors, is unconvincing because Senator
Salonga only testified on the execution of the written exhibits, and not on the
facts stated therein. 275 They further claim that since the Republic is relying on
the document, the latter is bound by the statements in the Written Disclosure,
including the exculpatory statements therein. 276 Specifically, respondent Tan
narrates in the Written Disclosure that he acceded to Marcos' demands
because of undue pressure put on him. He 1nentions that the share transfers to
Marcos were actually ineffective, and only fake stock certificates were sent to
Marcos. 277
Meanwhile, the Republic counters that respondent Tan's inculpatory

statements evince his guilt, while the exculpatory statements merely show the
document's voluntary execution. Thus, the exculpatory statements must have
factual support before they may be admitted. 278 Also, the exculpatory
statements do not invalidate the 60-40 business arrangement between Marcos
and respondent Tan. 279
Respondents Tan, et al. 's claims must be sustained. The Written

Disclosure is inadmissible in evidence. Even assuming otherwise, the Written
Disclosure is still insufficient to prove the Republic's claims.
As a rule, before a private document is admitted in evidence, it must be

authenticated either by the person who executed it, the person before whom
its execution was aclmowledged, any person who was present and saw it
executed, or who after its execution, saw it and recognized the signatures, or
the person to whom the parties to the instruments had previously confessed
execution thereof 280
Here, the Written Disclosure cannot be admitted as evidence of the truth

of its contents. The Republic did not present respondent Tan, the one who
executed the document, as a witness. As such, respondent Tan was not cross-
examined on the statements he made in the Written Disclosure. The hearsay
rule excludes evidence that cannot be tested by cross-examination. 281 Indeed,
absent cross-examination, both the coUii and the opposing co1msel would not
be able to test the credibility of the witness and his or her statements:
A witness can testify only to those facts which he knows of his

personal knowledge, which means those facts which are derived from his
274
Id. at 349 I.
275
Id. at 3505-3506.
276
Id. at 3495.
277
Id. at 3495.
278
Id. at 3969, 3940-3941.
279
Id. at 3957.
°
28
281
Cercado-Siga v. Cercado, Jr., 755 Phil. 583,593 (2015).
People v. Gueron, 206 Phil. 93. 100 (1983).
198221, 198974 and 203592
perception. Consequently, a witness may not testify as to what he merely

learned from others either because he was told or read or heard the same.
Such testimony is considered hearsay and may not be received as proof of
the truth of what he has learned. Such is the hearsay rule which applies not
only to oral testimony or statements but also to written evidence as well.
The hearsay rule is based upon serious concerns about the

trustworthiness and reliability of hearsay evidence inasmuch as such
evidence are not given under oath or solemn affirmation and, more
importantly, have not been subjected to cross-examination by opposing
counsel to test the perception, memory, veracity and articulateness of the
out-of-court declarant or actor upon whose reliability on which the worth of
the out-of-court statement depends.
Thus, the Sworn Statements of Jose Lomocso and Ernesto

Urbiztondo are inadmissible in evidence, for being hearsay, inasmuch as
they did not take the witness stand and could not therefore be cross-
examined. 282
Since respondent Tan did not take the witness stand to testify on the
contents of his Written Disclosure, the statements therein are considered
hearsay and inadmissible in evidence. To stress, only Senator Salonga
identified the Written Disclosure· in court. He claimed that the Written
Disclosure was signed in his presence. 283
On this point, another view was forwarded during the Court's

deliberation that Tan and the other respondents did not deny that the Written
Disclosure was properly presented as documentary evidence. 284 They also
failed to deny its execution. 285 It was pointed out that these circumstances
affirm the genuineness and authenticity of the Written Disclosure and except
said evidence from the authentication requirement. 286 Also, Tan, in particular,
should be estopped from discrediting his Written Disclosure or from
excluding it as evidence. 287
However, it is well-established that, when cross-exainination is not and

cannot be done or completed due to causes attributable to the party offering
the witness, the uncompleted testimony is thereby rendered incon1petent and
inadmissible in evidence. 288 Thus, as correctly pointed out by respondents Tan,
et al., the incomplete testimony of Senator Salonga renders the Written
Disclosure inadmissible as evidence. Senator Salonga's failure to complete
his cross-examination was attributable to the Republic, considering it was due
to the witness' schedule conflicting with the hearing dates. The Republic
282
Count,y Bankers Insurance Cmp. v. Lianga Bay & Community lvfulti-Purpose Cooperative. Inc., 425 Phil.
511, 520 (2002).
"' TSN, 16 October 2007, p. 82 (Ro/lo [G.R. No. 203592], p. 1580).
284
Concurring and Dissenting Opinion of J_ Caguioa, p. 25.
zgs Id.
286 Id.
287
Id. at 26.
288
Arriola v. People, 871 Phil. 585 (2020).
198221, 198974 and 203592
failed to present Senator Salonga on any of the remaining hearing dates.
In effect, the Written Disclosure was not authenticated by any

competent witness, Senator Salonga's testimony being inadmissible in
evidence. Respondents need not deny the Written Disclosure's authenticity or
due execution because the testimony for which it was offered, i.e., Senator
Salonga's, is in itself inadmissible.
More importantly, as clarified during Senator Salonga's direct

examination, his testimony only deals with the circumstances surrounding the
execution of the document, and does not purport to prove the facts stated in
the Written Disclosure. 289 Thus, even if the Court were to exempt the Written
Disclosure from the authentication requirement, the testimony of Senator
Salonga could not cure the hearsay character of the document. Such testimony
does not prove the claims made in the Written Disclosure.
Even assmning that the Written Disclosure is admissible in evidence,

the same has little probative weight. While the Written Disclosure involves
extrajudicial admissions, the rule on judicial admissions may be applied by
analogy. In this regard, the Court's ruling in Bitong v. Court ofAppeals (Fifth
Division}290 on admissions is instructive:
Every alleged admission is taken as an entirety of the fact which

makes for the one side with the qualifications which limit, modify or destroy
its effect on the other side. The reason for this is, where part of a statement
of a party is used against him as an admission, the court should weigh
any other portion connected with the statement, which tends to
neutralize or explain the portion which is against interest.
In other words, wl).ile the admission is admissible in evidence, its

probative value is to be determined from the whole statement and others
intimately related or connected therewith as an integrated unit. Although
acts or facts admitted do not require proof and cannot be contradicted,
however, evidence aliunde can be presented to show that the admission was
made through palpable mistake. The rule is always in favor of liberality in
construction of pleadings so that the real matter in dispute may be submitted
to the judgment of the conrt. 291
Thus, where part of a statement of a party is used against him as an

admission, the court must necessarily consider the other portions connected
that may tend to explain the portion against that party's interest. Therefore,
the Court may not limit its review to the inculpatory statements in the Written
Disclosure.
289
TSN, 16 October 2007, pp. 85-87 (Rollo [G.R. No. 203592], pp. 1583-1585).
190
354 Phil. 516 (1998).
191
Id.; Emphasis supplied.
I--
198221, 198974 and 203592
Respondent Tan correctly clairns that, in admitting the Written

Disclosure in evidence, the exculpatory statements in the said document must
also be duly considered. After all, the Court must strive to appreciate evidence
in a holistic and impartial manner.
While portions of the Written Disclosure appear to support the

Republic's theory, there are also various statements that may negate elements
of ill-gotten wealth, particularly the acquisition of assets and properties by
Marcos, respondent Imelda, their close relatives, and other associates. In the
same document, respondent Tan asserts legitimate ownership over his
business ventures, claiming that the share transfers to Marcos were
ineffectual. 292 These statements evidently weaken the Republic's claim of
ownership by the Marcoses.
Verily, the Written Disclosure is hearsay and lacks probative weight. It

cannot sustain the Republic's allegations.
c) Marcos, Jr. s Testimony
The Republic relies on the testimony of Marcos, Jr. on 21 August 2007

and 13 February 2018 293 to prove its allegations of ill-gotten wealth by
Marcos in relation to respondent Tan. The salient portions of Marcos, Jr. 's
testimony cited by the Republic relate to the supposed meetings with his father
and respondent Tan regarding the alleged interest of the Marcoses in the
businesses of respondent Tan. In addition, the Republic argues that Marcos,
Jr.'s testimony elaborated on the complex formation of the respondent
companies, and dovetailed with the affidavit of Gapud. 294
The Republic thus concludes that the testimony of Marcos, Jr. is not
hearsay because they were based on his direct personal knowledge of his
meeting with his father, respondent Tan, and Gapud. 295
On the other hand, respondents argue that since the Republic concedes
that the testimony of Marcos, Jr. was derived from his meetings with his father,
respondent Tat1, and Gapud, then the testimony as to the facts subject of the
meeting is hearsay. 296 Respondents also highlight that Marcos, Jr. denied that
the subject assets were ill-gotten wealth. 297
After due consideration of the foregoing, it is clear that Marcos, Jr. does
292
Rollo (G.R. No. 203592), pp. 846-847.
293
Id. at 4013-4017.
294
Id. at 4017.
295
Id. at 4017-4018.
296
Id. at 3593-3594.
297
ld. at 3594-3596.
198221, 198974 and 203592
not have personal knowledge of the alleged 60-40 business arrangement or

the share transfers between and among the various corporations. It does not
appear that he was privy to any of these transactions.
It is well entrenched that a witness may only testify on facts derived

from his own perception and not on what he has merely learned or heard from
others. 298 Hearsay evidence, or those derived outside of a witness' personal
knowledge, are generally inadmissible due to serious concerns on their
trustworthiness and reliability; such evidence, by their nature, are not given
under oath or solemn affirmation and likewise have not undergone the benefit
of cross-examination to test the reliability of the out-of-court declarant on
which the relative weight of the out-of-court statement depends. 299
The lack of personal knowledge of Marcos, Jr., insofar as the actual

transactions which led to the alleged 60-40 business arrangement, is clear in
this case. Marcos, Jr. has no personal knowledge of the details of the
arrangement and the manner of the transfers of shares since he was not privy
to said transactions.
Thus, the Court finds that Marcos, Jr.'s testimony is hearsay and may
not be used to prove the truth of the facts asserted. Hearsay evidence, whether
objected to or not, cannot be given credence for it has no probative value. 300
Notably, respondents' counsel has consistently objected to Marcos, Jr.'s
testimony on this ground.
At best, Marcos, Jr. can only testify on the fact that he conferred with
his father, respondent Tan, and Gapud regarding the Marcos family's interest
in the respondent-corporations. This is without regard to the truth or falsity of
the underlying basis of such claims. Thus, Marcos, Jr.'s testimony can be
considered as independently relevant statements.
In Buenajlor Car Services, Inc. v. David, Jr., 301 the Court explained the
doctrine of independently relevant statements, thus:
Under the doctrine of independently relevant statements, regardless

of their truth or falsity, the fact that such statements have been made is rel-
evant. The hearsay rule does not apply, and the statements are admissible as
evidence. Evidence as to the making of such statement is not secondary but
primary, for the statement itself may constitute a fact in issue or be circum-
stantially relevant as to the existence of such a fact. 302
298
People v. XXY, 839 Phil. 252 (2018), citing Miro v Vda. De Erederos, 721 Phil. 772,790 (2013).
299
Id. at 265, citing Country Bankers Insurance Corp. v. lianga Bay & Community Multi-Purpose
Cooperative, Inc., 425 Phil. 511,520 (2002).
300
People v. Parungao, 332 Phil. 917-927 (I 996).
301
798 Phil. 195 (2016).
3
°' Id. at 207, citing People v. Estibaly Colungsag, 748 Phil. 850 (2014).
198221, 198974 and 203592
However, without more, Marcos, Jr.'s testimony cannot be taken to

prove the ill-gotten wealth since it can only be taken as an assertion without
due regard to the truth or falsity of the subject transactions. This remains to
be far removed from the burden of the prosecution to prove ill-gotten wealth.
Marcos,. Jr. 's testimony, in and of itself, does not show that his father
and the respondents took 1mdue advantage of their office, authority, influence,
connections, or relationship to obtain ownership of these business interests.
d) Gapuds affidavit
The Republic relies on Gapud's affidavit because it purportedly naJTatcs

the detail of the dealings of Marcos and his associates. 303 In his statement,
Gapud claimed to be the financial executor of Marcos and respondent Imelda,
and that he was often caJTYing out instructions given by them. 304
Before the Court, the Republic insists that Gapud's affidavit was
presented and identified in court by Senator Salonga. 305 Senator Salonga
testified that he personally typed Gapud's statement after interviewing him in
Hong Kong. 306 He claimed that he signed it as a witness and thus identified
his own signature thereon. 307 Moreover, the Republic points out that the Court
has invariably utilized the testimony of Gapud in a plethora of cases. 308 On
the other hand, respondents Tan, et al. maintain that Gapud's affidavit is not
admissible for being hearsay. 309
We agree with respondents Tan, et al.
It is settled that while notarized affidavits are considered as public

documents, they may still be deemed as hearsay evidence. 310 Affidavits arc
generally prepared not by the affiant himself, but by another who uses his or
her own language in transcribing or writing the statements. 311 If the affiant is
not presented, the opposing party is deprived of the chance to cross-examine
him or her. 312 In such situations, the opposing party cannot test the "perception,
1nemory, veracity, and articulateness of the out-of-court declarant or actor
303
Rollo (G.R. No. 203592). pp. 1492-1498.
304
Id. at 1493.
305
Id. at 484-491.
306
Id. at 1606-1607.
307
Id. at 485.
308
Id. at 490.
309
Id. at 3533-3537.
310
Republic u Marcos-Manotok. 681 Phil. 380 (2012).
311 Id.
312 Id.
198221, 198974 and 203592
upon whose reliability the worth of the out-of-court statement depends." 313
Thus, an affidavit should be rejected for being hearsay unless the affiant
testifies and confirms his or her declarations thereon. 314 This proceeds from
the basic rationale offaimess. 315
Here, Gapud was not presented in court to identify his affidavit.

Relative to this, in the case of Republic v. Sandiganbayan, 316 tl1e Court dealt
with a motion for leave filed by the Republic to take the deposition of Gapud,
also for SB Civil Case No. 0005. 317 The Sandiganbayan denied the Republic's
motion, due to, among others, the absence of special circumstances that would
justify the taking of Gapud's deposition before the service of answers. 318
When it reached the Court, the denial of the motion was affirmed since it was
not established that there existed a real threat to Gapud's life should he choose
to return to the Philippines. 319 On this matter, the Court explained:
In the case at bar, petitioner alleges that the taking of Mr.

Gapud's deposition in lieu of his testimony is necessary because the
allegations in the complaint are based mainly on his disclosures
regarding the business activities of President Marcos and Lucio Tan;
that although Mr. Gapud was granted immunity by President Aquino
from criminal, civil and administrative suits, he has been out of the
country since 1987 and has no intention of returning, fearing for his
safety; that this fear arose from his damaging disclosures on the illicit
activities of the cronies and business associates of former President
Marcos which therefore renders him unable to testify at the trial.
Petitioner has not cited any fact other than Mr. Gapud's
cooperation with the Philippine government in the recovery of ill-
gotten wealth that would support the deponent's claim of fear for his
safety. No proof, much less any allegation, has been presented to
show that there exists a real threat to Mr. Gapud's life once he returns
to the Philippines and that adequate security cannot be provided by
petitioner for such a vital witness. 320
To stress, the denial of the Republic's motion for leave to take Gapud's
deposition in Republic v. Sandiganbayan was not absolute. 321 The Court
merely pronounced that the Republic failed to show the urgency and necessity
to allow the taking of Gapud's deposition at that point in time, considering
that there was no joinder of issues yet. 322 However, even after the issues were
313 Fatula v. People., 685 Phil. 376, 396 (2012).

314
People., Bank and Tn,st Company {now Bank of the Philippine l<lands) " Leonid<", 283 Phil. 991 (1992).
315
DST Movers Corp. v. People ·s General insurance Cmp., 778 Phil. 235 (2016).
316
410 Phil. 536 (2001 ).
317 Id. at 547.
31S Id.
,1, Id.
s,o Id.
321
Id.
322 Id.
198221, 198974 and 203592
joined, the Republic still failed to present Gapud, or avail of any other means
at its disposal to enable the Sandiganbayan to properly consider the contents
of the affidavit. At the same time, the Republic failed to prove the existence
of any of the exceptions to the hearsay rule under Rule 130(C)(6) of the Rules
on Evidence. 323
The Republic asserts that Senator Salonga's identification of Gapud's

affidavit should be sufficient. Yet, during trial, it clarified that the purpose of
the presentation of Senator Salonga's testimony is limited to elicit the facts
and circumstances surrounding the execution ofGapud's affidavit:
Atty. Generillo:
Your Honor please, if I may, perhaps for the enlightenment of all

parties. The purpose of the testimony of the witness is to shed light
on the factual circumstances surrounding the execution of the Affi-
davit of Mr. Gapud. We are not making an offer of the GapudAffi-
davit. What we are going to elicit from the witness is the facts and
circumstances surrounding the execution of the Affidavit. We will
make the necessary offer of the Gapud Affidavit in some other time,
Your Honor and under proper laying the basis for the introduction
of that Gapud Affidavit. But insofar as the testimony of this witness,
what we are going to prove is, that he was the one that personally
typed the Gapud Affidavit; and that he interviewed Mr. Gapud be-
fore he prepared the GapudAffidavit, Your Honor.
CHAIRPERSON:
Well, anyway, your observation and comments are on rec-

ord, Atty. Mendoza.
Okay, you go ahead with the direct-examination[,] Atty. Gcnerillo.

324
While the testimony of a witness regarding a statement made by another

person to establish the truth thereof is clearly hearsay, it is otherwise if the
objective is merely to establish the fact that the statement, or the tenor of such
statement, was made. 325 To reiterate, this is known as the doctrine of
independently relevant statements. 326 Under this doctrine, only the fact that
the statements were made is relevant, and the truth or falsity thereof is
immaterial. 327
However, even if the doctrine of independently relevant statements is

applicable, this merely establishes the execution of the document. Still, Gapud
323
Fuentes, Jr. v. Court ofAppeals, 323 Phil. 508 (:996).
324
TSN, 16October2007,pp. 71-73.
325
Espineli v. People, 735 Phil. 530 (2014).
326 Id.
327
X\Xv. Peopie, G.R. No. 241390, 13 January 2021.
198221, 198974 and 203592
was not able to appear before the Sandiganbayan to confirm the truthfulness
of his declarations. Senator Salonga could not have testified on the truth of
Gapud's statements, and he could not have been cross-examined by
respondents on this matter. As mentioned, Senator Salonga's examination was
not completed since he no longer appeared before the Sandiganbayan for
cross-examination. 328
As such, Gapud's affidavit remains devoid of probative value for

purposes of establishing the truth of Gapud's claims on the alleged 60-40
business arrangement between Marcos and respondent Tan.
e) Other Documentary Evidence
Additionally, the Republic presented voluminous documentary

evidence in support of its allegations. The pertinent documents may be
summarized as follows:
1. Documents relating to Fortune Tobacco. There are documents that

show numerous requests for import quotas were made to the
Philippine Virginia Tobacco Administration or directly to Marcos,
bearing the latter's signature with the word "approved."329 There
are also those showing that respondent Tan, as chairperson of
Fortune Tobacco, wrote requests to Marcos, which were favorably
acted upon by the latter. 330 Likewise, several documents issued by
the Office of the President granting Fortune Tobacco's requests for
import quotas were submitted, showing that Marcos approved the
request for the import quota. 331
2. Documents relating to Allied Bank. The Republic presented

documents that show respondent Tan wrote direct requests to
Marcos on behalf of Allied Bank. These were likewise approved or
granted by Marcos, as shown by notations or issuances by the Office
of the President. 332
3. Documents pertaining to transfer of shares. Deeds of sale of shares

of stock were presented to show that the stockholders of Himmel
Industries, Grandspan, Asia Brewery, Silangan Holdings, and
Foremost Fan11s sold their shares to Shareholdings, Inc. 333 There are
328
Rollo (G.R. No. 203592), pp. 1618-1619: TSN, 16 October 2007, pp. 120-121.
329
Id. at 853-865.
330
Id. at 882-884, 886,-888, 893--910.
331
ld. at 858, 860, 862-864.
"'ld. at 1244-1247, 1249-1251, !253-.l265.
333
Id. at 1313-1333.
198221, 198974 and 203592
also deeds of assignment issued by the stockholders of

Shareholdings, Inc. transferring. their shares to Basic, Falcon
Holdings Corp. (Falcon), and Supreme Holdings, Inc. (Supreme),
and uniform deeds of assignment signed in blank: issued by the
stockholders of Falcon, Supreme, and Shareholdings, Inc. 334
Unfortunately, however, most of these documents arc 111erely copies of

private documents, thus, not 111eeting the requirement for the presentation of
the original under Section 3, Rule 130 of the Rules on Evidence. Neither did
the Republic establish the existence of any of the exceptions under Sections 5
to 8, Rule 130 of the Rules on Evidence, which would justify its resort to
secondary evidence.
The Republic presented officers from the PCGG and other government
offices who purportedly had custody of a number of the documents. 335
However, it failed to present witnesses who could testify not only on the
genuineness and due execution of the documents, but also on the facts stated
therein. That most of the documents were in the custody of the PCGG does
not make them public in character. As clarified in Republic v. Marcos-
Manotoc, et al.: 336
The fact that these documents were collected by the PCGG in

the course of its investigations does not make them per se public records
referred to in the quoted rule.
Petitioner presented as witness its records officer, Maria Lourdes

Magno, who testified that these public and private documents had been
gathered by and taken mto the custody of the PCGG in the course of the
Commission's investigation of the alleged ill-gotten wealth of the Marcoses.
However, given the purposes for which these documents were submitted,
Magno was not a credible witness who could testify as to their contents. To
reiterate, "[i]fthe writings have subscribing witnesses to them, they must be
proved by those wih1esses." Witnesses can testify only to those facts
which are of their personal knowledge; that is, those derived from their
own perception. Thus, Magno could only testify as to how she obtained
custody ofthese documents, but not as to the contents of the documents
themselves. 337
Thus, without the testimony of persons who have personal knowledge

on the contents of these documents, the enumerated documents do not have
any evidentiary value.
Application of the Evidence to the

Elements of Ill-Gotten Wealth;
334
Id. at 1404-1406, 1411-1413, 1414-14!6, 1421-1434,
335
Id. at 159-J 61, 4074.
336
681 Phil. 380 (2012).
337
Id. at 404. Emphasis supplied.
198221, 198974 and 203592
Preponderance qfEvidence
As provided in EO No. 14-A, allegations in civil cases filed to recover

unlawfully acquired property or ill-gotten wealth must be proven through
preponderance of evidence, viz:.
SEC. 3. The civil suits to recover 1mlawfully acquired property

under Republic Act No. 1379 or for restitution, reparation of damages, or
indenmification for consequential and other damages or any other civil
actions under the Civil Code or other existing laws filed with the
Sandiganbayan against Ferdinand E. Marcos, Imelda R. Marcos, members
of their immediate family, close relatives, subordinates, close and/or
business associates, dummies, agents and nominees, may proceed
independently of any criminal proceedings and may be proved by
preponderance of evidence. ·
It is established that when preponderance of evidence is required, the

courts must necessaiily weigh the evidence presented by the parties and
determine who was able to adduce evidence more conclusive and credible
than that of the other. 338
Accordingly, this procedure must be followed in this case, through a

comparison of the evidence presented by the Republic as against those
submitted by respondents Tan, et al. Below is a discussion of each element of
ill-gotten wealth together with the evidence in support of the same.
The first and second ele1nents should be jointly tackled because they
are related. The first element requires the Republic to show that assets and
properties were acquired, while the second element specifies the persons
involved in the acquisition. Even without considering the documentary
evidence adduced by the Republic, the other pieces of evidence on record,
particularly respondent Imelda's Amended Answer and Marcos, Jr. 's
testimony, seem to only suggest the acquisition of assets by Marcos.
Notably, the only evidence that may negate the element of acquisition
is respondent Tan's Written Disclosure. However, as discussed, the Written
Disclosure is inadmissible in evidence and has no probative weight.
As to the third element, it must be shown that the assets and properties
were acquired: (a) through or as a result of the improper or illegal use of funds
or properties owned by the Government of the Philippines or any of its
branches, instrumentalities, enterprises, banks or financial institutions; or (b)
by taking undue advantage of1heir office, authority, influence, connections or
relationship. Since it does not appear that the shares of stock were acquired
through public funds, the relevant mode of acquisition is the second one.
338 Republic v. Estate q/Hans Men2.i. 512 Phil. 425 (2005) [Per J. Tinga}.
I 98221, 198974 and 203592
The phrase "undue advantage" is neither defined in the pertinent EOs

nor in the PCGG Rules and Regulations. The ordinary meaning of the words
should thus be observed. Undue means "to a level that is more than is
necessary, acceptable, or reasonable." 339 To take advantage means "to use
[one's] skills, resources, etc. or a particular situation in order to get an
opportunity for [oneself] ."340 Thus, the element of taking undue advantage
connotes abuse of public office, authority, influence, connections or
relationship, in order to amass assets or properties for one's own benefit.
In this case, the third element was not proven by the Republic.
Respondent Imelda's Amended Answer and Marcos, Jr.'s testimony, at most,
merely provide unproven allegation of acquisition or ownership, while
respondent Tan's Written Disclosure and Gapud's affidavit are inadmissible
to prove any of the elements of ill-gotten wealth. With the dearth of evidence
presented to prove "undue advantage," the existence of this element remains
speculative at this point. Merely assuming its existence may lead to
perpetuating an injustice where private property would now be transferred to
the Republic.
As to the fourth element, i.e., unjust enrichment, grave damage, and

prejudice, the same may be inferred from the third element. The acquisition
ofill-gotten wealth necessarily results in pecuniary loss to the whole nation. 341
Considering that the third element was not proven, it follows that no unjust
enrichment, damage, or prejudice suffered by the people or the government
could be hypothesized from the acquisitions in question.
Considering the foregoing, the petition in G.R. No. 203592 should also
be denied for the Republic's failure to prove the third and fourth elements of
ill-gotten wealth.
WHEREFORE, premises considered, the Court rules on the present

consolidated petitions as follows:
(1) In G.R. No. 195837, the Petition for Review on Certiorari filed by
the Republic is DENIED, and the Sandiganbayan's Resolutions dated 22
December 2010 and 25 Februai-y 2011 are AFFIRMED. The
Sandiganbaya.n's dismissal of the complaint against respondents Don Fen-y
and Cesar Zalamea is declared valid.
(2) In G.R. No. 198221, the Petition for Certiorari filed by the
339
"Undue", Cambridge Dictionary, available at
_ https://dictionary.cambridge.org/us/dictionary/english/undue (last ~ccessed 2 November 2021 ).
°' 0 "Advantage", Cambridge Dictionary, available at
https://dictionary.cambridge.org/us/dictionary/english/advantage?q=1ake+advantage (last accessed 2
November 2021).
341
Supra note 250.
198221, 198974 and 203592
Republic is DISMISSED, and the Sandiganbayan's Order dated 9 June 2011

and Resolution dated 2 August 2011 are AFFIRMED. The Court holds that
the testimonies ofJoselito Yujuico andAderito Yujuico were correctly excluded
from evidence by the Sandiganbayan.
The Sandiganbayan Resolutions dated 3 May 2011 and 4 July 2011

dismissing the Republic's Motion for Voluntary Inhibition are likewise
AFFIRMED.
(3) In G.R. No. 198974, the Petition for Certiorari filed by the
Republic is DISMISSED, and the Sandiganbayan Resolutions dated 8 July
2011 and 23 August 2011, which denied the Republic's Motion to Admit Third
Amended Complaint, are AFFIRMED.
(4) In G.R. No, 203592, the Sandiganbayan Decision dated 11 June

2012 and Resolution dated 26 September 2012 dismissing the Republic's
Second Amended Complaint ' for reversion, reconveyance, restitution,
accounting and damages are AFFIRMED. Consequently, the Petition for
Review on Certiorari of the Republic of the Philippines is DENIED for lack
of merit.
SO ORDERED.
198221, 198974 and 203592
WE CONCUR:
CAGUIOA
Associate Justice
(No part and on Official Business

Leave)
AMY C. LAZARO-JAVIER
Associate~~ Associate Justice
HENRI~~;ING
Associa:-;u~/l""I
<-izQ\F===->
SAMUEL H. GAERLAN--
Associate Justice Ass ciate Justice
(On Official Business Leave)

JHOSE~OPEZ JAPAR B. DIMAAMPAO
Associate Justice Associate Justice
198221, 198974 and 203592
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the cases were assigned to the writer of the opinion of the Court.

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3a.

epublit of tbe ~bilippines

REPUBLIC OF THE PHILIPPINES, G.R. No. 195837

REPUBLIC OF THE PHILIPPINES, G.R. No. 198221

SANDIGANBAYAN, 5TH DIVISION,

FERDINAND R. MARCOS, JR.),

SANDIGANBAYAN 5TH DIVISION,

RE DRYING PLANT, ASIA

x-------------x x---- ·----x

REPUBLIC OF THE PHILIPPINES, G.R. No. 203592

SANDIGANBAYAN 5TH DIVISION,

KHOO, MIGUEL KHOO, JAMIE

Respondents. October 3, 2023

* No participation due to prior connection with OSG and PCGG.

The recovery of ill-gotten wealth, with its laudable purpose initiated as

It is in this light that We resolve these consolidated cases, 2 which

On 17 July 1987, petitioner Republic of the Philippines (the Republic),

respondent Imelda R. Marcos (Imelda), respondent Don Ferry (Ferry), and

In its Complaint, the Republic sought to recover ill-gotten wealth

1. the liquidation of General Bank and Trust Company (GenBank) and

2. respondent Tan's delivery to Marcos and respondent Imelda of

3. respondent Tan's delivery of improper gifts, bribes, concessions, and/or

4. the establishment of Shareholdings, Inc. to prevent the disclosure and

5. the sale of the controlling interest of Development Bank of the

that this sale caused losses to DBP amounting to millions of pesos

6. the printing of Bureau of Internal Revenue strip stamps worth billions

7. the establishment of Northern Redrying Co., Inc., a Virginia Tobacco

On 13 September 1991, the Republic filed a Motion for Leave to

The Second Amended Complaint i1npleaded as additional defendants

The Republic also impleaded foreign corporations that were alleged to

The Republic also impleaded then Philippine National Bank (PNB)

The properties that the Republic is seeking to recover includes two

On 06 September 1995, respondent Imelda filed her Answer with

After more than six years, or on 20 November 2001, respondent Imelda

On 23 to 24 September 2008, the Republic presented Joselito Yujuico

The Sandiganbayan terminated the Republic's presentation of evidence

Special Counsel. 32 The Sandiganbayan denied the Republic's motion for

Thereafter, it was the respondents' turn to present their evidence.

On 23 August 2010, respondent Zalamea filed his Motion to Dismiss

Respondent Ferry also filed a Motion to Dismiss (on a Demurrer to

On 22 December 2010, the Sandiganbayan granted the motions to

"" Rollo (G.R. No. 203592), p. 116.

Meanwhile, respondents Fortune Tobacco and Northern Tobacco

In a Minute Resolution dated 03 March 2011, 55 the Sandiganbayan

The Sandiganbayan denied the Republic's Motion for Voluntary

Moreover, the Sandiganbayan noted that none of the instances under

The Sandiganbayan further noted that on 06 April 1994, the Republic

The Republic moved for reconsideration of the 3 May 2011 ruling.

On 06 June 2011, the Republic filed a Motion with Leave of Court to

The Republic also filed a Motion with Memorandum of Authorities on

In its Resolution dated 13 July 2011, the Sandiganbayan denied the

Thus, on 02 November 2011, the Republic filed a Petition for Certiorari

In a Resolution dated 18 July 2011, the Sandiganbayan denied the

On 05 September 2011, the Republic filed another Petition for

More importantly, the Sandiganbayan, in its Decision dated 11 June

The Sandiganbayan also ruled that the Republic's reliance on

Further, the Sandiganbayan found no proof that respondent Tan

Likewise, the Sandiganbayan held that the testimonies of now President