Yuchengco v. Honorable Sandiganbayan

CARPIO MORALES, J.:

These five consolidated petitions pray for the nullification of certain issuances of the Sandiganbayan in Civil Case No. 0002, "Republic of the Philippines v. Estate of Ferdinand E. Marcos, et al." The complaint in Civil Case No. 0002 (or the case) was filed before the Sandiganbayan on July 16, 1987 by the Republic of the Philippines (the Republic) through the Presidential Commission on Good Government (PCGG) against former President and Mrs. Marcos, their three children, and some other individuals. The complaint was later amended to implead additional defendants.

The case is for the recovery of alleged ill-gotten wealth of the Marcoses, among which are shares of stock in the Philippine Telecommunications Investment Corporation (PTIC): 76,779 shares in the name of Ramon U. Cojuangco, 21,525 shares in the name of Imelda O. Cojuangco, and 111,415 shares in the name of Prime Holdings Incorporated (PHI). PTIC is the biggest stockholder of PLDT, it owning some 28% of the outstanding shares in PLDT at the time Civil Case No. 0002 was filed.1 In the course of the proceedings in Civil Case No. 0002, the first three petitions assailing interlocutory orders of the Sandiganbayan were filed before this Court. Thus, the petitions in G.R. Nos. 149802 and 150320 , filed by Alfonso Yuchengco and Y Realty Corporation , complainants-in-intervention in Civil Case No. 0002, assail via petition for certiorari orders and resolutions of the Sandiganbayan denying their motions to suspend trial pending discovery proceedings and to re-set trial dates (with alternative prayer for a change in the order of trial), and declaring them as having waived their right to present evidence.

The petition in G.R. No.

150367 , filed by the Republic , assails via petition for certiorari the Sandiganbayan Orders denying its Respectful Motion for Additional Time to Complete the Presentation of Evidence and directing it to submit its offer of evidence within 30 days. During the pendency of these first three petitions, the Sandiganbayan continued with the proceedings in Civil Case No. 0002, no restraining order enjoining the same having been issued by this Court. The Sandiganbayan, still during the pendency of the first three petitions, promulgated in Civil Case No. 0002 a Partial Decision on May 6, 2002 the dispositive portion of which reads: WHEREFORE, premises considered, the complaint of plaintiff Republic of the Philippines on the PLDT shares subject of separate trial is hereby DISMISSED for lack of merit.

The Motion for Summary Judgment [filed by Imelda Cojuangco, et al] is hereby GRANTED, and the Complaint-in-Intervention [filed by the Yuchengcos] DISMISSED. SO ORDERED. (Underscoring supplied) The last two of the five petitions at bar, both for review on certiorari, were thereupon filed.

The petition in G.R. No. 153207 filed by the complainants-in-intervention Yuchengcos , and that in G.R. No. 153459 filed by the Republic, both challenge the Partial Decision. The incidents that gave rise to the filing of the petitions are stated in the minority's dissenting opinion penned by Justice Cancio Garcia which immediately follows this majority opinion. The dissenting opinion substantially reiterates the draft that Justice Garcia prepared which was used by this Court as a working basis for its deliberations.

In issue in these petitions are: 1. Whether petitioners in G.R. Nos. 149802, 150320 and 150367 were denied due process when the Sandiganbayan in effect directed them to terminate the presentation of their respective evidence; and 2. Whether the Partial Decision being assailed via petition for review in G.R. Nos. 153207 and 153459 , conforms There is no disagreement with respect to the disposition-dismissal by the minority of the first three petitions - the first having become moot, and the second and third for lack of grave abuse of discretion on the part of the Sandiganbayan.2 There is also no disagreement with respect to the disposition-denial by the minority of the fourth petition (G.R. No. 153207) in the absence of reversible error on the part of the Sandiganbayan.

It is with respect to the disposition-denial by the minority of the fifth petition (G.R. No. 153459) insofar as it denied the prayer of the Republic for a judgment ordering the Estate of Ramon U. Cojuangco (Cojuangco), Imelda O. Cojuangco, PHI, their assigns, nominees and agents to reconvey to the Republic 111,415 PTIC shares registered in the name of PHI that the majority does not agree, in light of the immediately following discussions. The Sandiganbayan having held in its 73-page Partial Decision3 that the Republic has failed to prove that the PLDT shares sought to be recovered are ill-gotten, thus: . .

. the Republic has failed to provide such "proof of authenticity or reliability" of the documents offered by it in evidence.

Thus almost all the documents offered by the Republic are photocopies, and no effort was undertaken . . .

to submit the originals of said documents, or to have them properly identified, or to otherwise justify the admission of mere photocopies. Not surprisingly, defendants . .

. objected to the admission of the Republic's documentary exhibits, citing violation of the Best Evidence Rule (Section 3, Rule 130 of the Revised Rules of Civil Procedure ["Rules"], the Rules of Presentation of Documentary Evidence (Section 20, Rule 132 of the Rules). The Hearsay Evidence Rule, and the rule as to Purpose/s of Documentary Evidence (Section 34, Rule 132 of the Rules)."4 (Underscoring supplied), a discussion of the evidence presented in the case is in order.

FACTUAL BACKGROUND OF PHI AND ITS DEALINGS WITH PTIC PHI was registered on October 5, 1977 with the following five (5) incorporators: Jose D. Campos, Jr. (son of Jose Yao Campos), Rolando Gapud (Gapud), Renato Lirio (Lirio), Ernesto Abalos (Abalos), and Gervacio Gaviola (Gaviola) , with 400 shares each, with a par value of ~~P~~ 100 per share. The total amount of capital stock subscribed was thus ~~P~~ 200,000.00, ~~P~~ 50,000.00 of which was actually paid.5 Its place of business was at 66 United Street, Mandaluyong, Metro Manila.6 The five PHI incorporators, in their capacity as stockholders, elected themselves as directors on October 10, 1977. On even date, they elected the following as officers of the corporation: Rolando C. Gapud - President Jose D. Campos, Jr. - Vice-President Gervasio T. Gaviola - Treasurer Francisco G. De Guzman - Secretary Rodolfo R. Dimaano - Assistant Secretary Meanwhile, 54,349 shares in another corporation, PTIC, were "contributed to and/or abandoned"

by one of its stockholders, General Telephone and Electronics (GTE), an American corporation, in favor of PTIC. On December 20, 1977, the PTIC Board of Directors resolved to sell such 54,349 shares to its stockholders in proportion to their holdings.7 No stockholder, apart from Cojuangco, PTIC President and member of its Board of Directors, expressed interest in purchasing the shares.8 All the 54,349 shares were then transferred to his name. Cojuangco and Luis Tirso Rivilla (Rivilla), another stockholder of PTIC, together with PHI President Gapud, forged an agreement dated January 27, 1978 referring to the "various discussions during which [Cojuangco and Rivilla] offered to sell and [PHI] agreed to purchase partially paid subscriptions and common shares of [PTIC]."9 The agreement which indicated the basic terms and conditions of the transaction states that the number of PTIC shares which Cojuangco and Rivilla were prepared to sell to PHI was "111,415 common shares representing 46.1250% of the subscribed and outstanding shares of PTIC."

On April 20, 1978, the PTIC Board of Directors granted Cojuangco and Rivilla authorization to transfer their PTIC shares to PHI.10 Cojuangco thereafter ceded to PHI 77,719 PTIC shares registered in his name via two separate deeds of assignment both dated May 2, 1978, one for 44,023 shares and the other for 33,696 shares.11 Rivilla likewise conveyed PTIC 33,696 shares registered in his name to PHI via a deed of assignment also dated May 2, 1978.12 Thus, a total of 111,415 PTIC shares wastransferred to PHI on May 2, 1978. Gapud and Jose D. Campos, Jr. later assigned all their shares in PHI (400 shares each) to Cojuangco and PTIC Director Oscar Africa (Africa), respectively, via two separate deeds of assignment dated February 18, 1981.13 On May 9, 1981, Cojuangco and Africa were elected directors of PHI, replacing Gapud and Jose D. Campos, Jr., while the other directors - Lirio, Abalos, and Gaviola - remained as such.14 On even date, Cojuangco and Africa were elected by the PHI Board of Directors as President and Vice-President, respectively, while de Guzman and Gaviola remained as Secretary and Treasurer, respectively.15 Subsequently, by Deed of Assignment16 dated June 1983 (the day is not indicated), Africa transferred all his 400 PHI shares - 240 to Antonio Cojuangco and 160 to Trinidad Cojuangco Yulo.

On even date, the remaining incorporators on the board of directors - Lirio, Abalos, and Gaviola - each executed a deed of assignment transferring their PHI shares to members of the Cojuangco family. Thus Lirio transferred 240 shares to Antonio Cojuangco and 160 to Trinidad C. Yulo;17 Abalos transferred 320 shares to Ramon O. Cojuangco, Jr. and 80 to Miguel O. Cojuangco;18 and Gaviola transferred 320 shares to Ma. Victoria O. Cojuangco Yulo and 80 also to Antonio Cojuangco.19 BENEFICIAL OWNERSHIP OF PHI Significantly, respondents in G.R. No. 153459, namely: Estate of Ramon Cojuangco, Imelda O.

Cojuangco, PHI, and Imelda R. Marcos all agree with petitioner Republic that PHI has an undisclosed beneficial owner, their only disagreement being who this owner is. The Cojuangcos and PHI in their Comment proffer that the beneficial owners are the Cojuangcos, arguing as follows: x x x The unsupported allegation that President Marcos owned the disputed shares in PLDT, PTIC and PHI may perhaps explain the circumstances surrounding PHI's incorporation , why PTIC's stockholders were disinterested in purchasing PLDT's shares in 1977, why PTIC's stockholders waived their right of first refusal in 1978, why there are no proper entries in PHI's Stock and Transfer Book, or why the subject shareholdings were not included in Ramon U. Cojuangco's Estate inventory. However, the converse syllogism is not true - the details of PHI's incorporation, or the fact that PTIC's stockholders were disinterested in purchasing PLDT's shares in 1977, or that PTIC's stockholders waived their right of first refusal in 1978, or that there are no proper entries in PHI's Stock and Transfer Book, or that 400 PHI shares were not included in Ramon U. Cojuangco's Estate inventory do not necessarily establish that President Marcos owned the subject shares in PHI, PTIC and PLDT.

These circumstances show that PHI had an undisclosed principal and beneficial owner. Subsequent events , i.e. the assignment of shares in 1981 and 1983, reveal and confirm that Mr. Ramon U. Cojuangco and his family were the principal and beneficial owners of PHI , and, corollarily, the subject PHI, PTIC and PLDT shares, not President Marcos.20 Imelda Marcos, on the other hand, consistent with the theory of petitioner x x SEPARATE DISSENTING OPINION SANDOVAL-GUTIERREZ,J.: I join Mr. Justice Cancio C. Garcia in his well-crafted Dissent in G.R. No. 153459 denying the Republic's petition and affirming respondent Sandiganbayan's Decision.

In civil suits for forfeiture before the Sandiganbayan, like the instant case, the Republic must meet the burden of proof and establish with a preponderance of evidence that the property in question - ". . .

are assets and properties purportedly pertaining to former President Ferdinand E. Marcos and/or his wife Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business associates, dummies, agents or nominees which had been or were acquired by them directly or indirectly, 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 by taking advantage of their office, authority, influence, connections or relationships, resulting in their unjust enrichment, and causing damage and prejudice to the Filipino people and the Republic of the Philippines."1 The alleged ill-gotten assets in this case are shares of stock in Prime Holdings Inc. (PHI) which, in turn, holds shares in Philippine Telecommunications Investment Corporation (PTIC), a shareholder in the Philippine Long Distance Telephone Company (PLDT).

The Republic's case is premised on the theory that PHI is a "dummy corporation," not owned by private respondent Cojuangco family, but merely held in beneficial trust for former President Ferdinand E. Marcos. I have closely reviewed the records and revisited both factual and legal bases of the Sandiganbayan Decision, and found that the Republic failed to prove its case by preponderance of evidence.

The Republic's case is anchored almost entirely upon the testimonies of Messrs. Jose Y. Campos, Rolando Gapud and Francisco de Guzman. They attempted to prove that PHI was a corporate vehicle "organized for"

Marcos. As "beneficial owner" of PHI, Marcos used Ramon U. Cojuangco as a "dummy"

controlling PHI and its assets. The same witnesses identified the modus operandi employed by Marcos to hide his ill-gotten wealth.

Unfortunately, the evidence for the Republic fails to show that PHI is Marcos' "dummy corporation." Witness Campos, in describing the modus operandi behind dummy corporations "organized for" Marcos, stated: "In the organization, administration and management of the above-named corporations, as it was my policy that whenever such a corporation is organized for and on behalf of the intended beneficiaries, I execute and I require all my said associates to execute a Deed of Trust or Deed of Assignment duly signed in favor of an unnamed beneficiary and to deliver the original copy thereof to the former President.

It is in fact my policy and procedure that we disclaim completely any interest in any such business and make it clear to the former President that we hold such interests on his behalf." In his affidavit, Campos named PHI as one of the companies he organized for President Marcos. Yet, when asked if the modus operandi was applied to PHI as it was with the other Marcos dummy corporations, he vacillated,2 thus: "3.

In your Sworn Statement, page 2, you stated that with respect to the corporations you held in trust for President Marcos, it was your 'policy' that whenever such a corporation was organized, you executed, and you required all your business associates to execute, a Deed of Trust or Deed of Assignment in favor of an 'unnamed beneficiary,' and delivered the originals thereof to President Marcos. xxx Was this 'policy' FOLLOWED IN THE CASE OF [PHI]? xxx ANSWER: 'All the corporations I organized - that was the standard policy - that we surrendered direct to President Marcos.'"

Campos also testified that he had never communicated in any manner whatsoever with President Marcos, his alleged principal, nor with Ramon Cojuangco regarding Marcos' beneficial ownership of shares of stock in PHI or PTIC or Prime Holdings, Inc. , thus: "7. Did you ever have any discussions or correspondences with President Marcos regarding his beneficial ownership or the beneficial ownership by any member of his family, directly or indirectly, of shares of stock in Philippine Long Distance Telephone Company (PLDT), Philippine Telecommunications Investment Corporation (PTIC) or Prime Holdings, Inc.? Answer: No, Ma'am.

x x x Did you ever have any discussions or correspondences with Ramon U. Cojuangco regarding the beneficial ownership by President Marcos or any member of his family, directly or indirectly, of shares of stock in PLDT, PTIC or Prime Holdings, Inc.? Answer: No, Ma'am." Considering the fact that Campos - by his own admission - was the organizer of dummy corporations for Marcos, it is contrary to human experience that he never had any discussion with the former President about PHI, if indeed it was such a dummy corporation.

Obviously, there was nothing to discuss with President Marcos about PHI because it was not one of his dummy corporations. In fact, the Republic's other witness, Atty. Francisco de Guzman, admitted that PHI did not meet the description of a Marcos dummy corporation, thus, to quote the very same passage cited in the Dissent: "Q: Was it the standard operating procedure in Jose Yao Campos holdings companies that the stock certificates of the stockholders would be endorsed in blank? A: Yes, sir.

Q: And who would hold custody or possession of those/ bank endorsed stock certificates? A: In the case of many of the corporations I think including Prime Holdings, Inc. these are not fully paid shares and therefore, I knew that no stock certificates have been issued, sir. Q: So, specifically in the case of Prime Holdings, Inc. there were no stock certificates issued because the subscriptions were not fully paid?

A: Yes, sir. Q: Do you know if the stockholders of Prime Holdings, Inc., this is prior to 1981, had executed Deed of Assignment in blank for their subscription to PHI shares? A: Yes, sir, the standard operating procedure in the companies of Mr.

Campos is that all the subscribers would have either a Deed of Assignment signed or a Deed of Trust, sir. Q: And you are referring to these holding companies that Mr. Campos, a number of holding companies that Mr. Campos have caused to be incorporated, these are the companies? A: Yes, sir.

Q: You said Deed of Trust, would there be a designated trustee? A: No, sir. Q: So, these are Deeds of Assignment or Deeds of Trust, the beneficiary of which would be left blank?

A: Yes, sir. Q: But the assignors or the trustees or grantors would all sign, would all execute these Deeds? A: Yes, sir.

Q: Who would have possession, you mentioned standard operating procedure or SOP, under the SOP who would hold the blank deeds? A: A copy of which usually two (2) copies are made, sir. Q: Two (2) originals?

A: No. Q: Xerox copies? A: No. One original and one Xerox copy and the original will be included in the records, sir. Q: The records of that particular company?

A: Yes, sir, and the other one we give it to the Treasurer. Q: Of that particular company? A: No, to Mr. Gaviola, sir.

Q: Mr. Gaviola was the Treasurer of Prime Holdings, Inc. wasn't he? A: I think he is because he is always, was the Treasurer of many of the companies of Mr. Campos, sir. Q: So, there is the SOP also, MR.

Gervacio Gaviola is the Treasurer of Prime Holdings, Inc.? A: Yes, sir. xxx xxx xxx Q: Now, who would hold the records of these companies which would include those blank Deeds of Assignment or Deeds of Trust?

A: Well, the actual custodian of that will be the Legal Department who has all the legal files, sir. Q: Was it not or would you consider it risky that the blank Deeds of Assignment or blank Deeds of Trust of all the shares in this companies he right there in the records, be among the corporate records, that somebody could take them and put their names? A: Maybe there is some risk there but you see, sir, the people in the Legal Department are well trusted by all of us.

They have been with the company for many years and considering the competence that they have established with us, nobody would even get those records without, let's say order of Mr. Campos or me or the Corporate Secretary, sir. Q: And who were these trusted people of the Legal Department? A: The lawyers, sir.

Q: Could you give us the names? A; Yes, two of them died and one of them retired. Mr. Urbano Francisco was the only survivor, sir.

Q: Can I have the names of those who died? A: Ed Halagao, I cannot remember the other one, sir. Q: These are the trusted lawyers of the Legal Department of UNILAB?

A: Yes, sir. xxx Q: Do you know what happened to those blank deeds of Assignment of Deeds of Trust of Prime Holdings, Inc. that were entrusted with the trusted lawyers of UNILAB? A: When Prime Holdings, Inc.'s records were delivered, all those records, all those papers are with the records, sir.

Q: So, you are referring to the 1982 delivery to the representative of Mr. Ramon U. Cojuangco? A: Yes, sir, except two (2) Deeds of Assignment which were I think made directly afterwards when Mr. Gapud and Mr. Jose Campos, Jr. made the direct assignments to persons actually designated in the Deeds of Assignment, sir. Q: Who were those?

A: The shares of Mr. Gapud was (sic) given to Mr. Ramon U. Cojuangco, Mr. Campos, Jr. I can't remember to whom he made the assignment, sir." If, according to the Republic's own witness, the shares of a Marcos dummy corporation are covered by a Deed of Assignment endorsed to an unnamed beneficiary, then Atty. De Guzman's above admissions are fatal to the Republic's case. His categorical declaration is that the blank Deeds of Assignment and Deeds of Trust covering PHI shares were not delivered to Marcos, but to Ramon U. Cojuangco.

Now, delivery of the blank deeds of Assignment and Deeds of Trust was a crucial element of the modus operandi. Considering that Marcos was not in possession of the Deeds over PHI shares, he could not have controlled or managed PHI.

To be sure, there was no point organizing PHI as a dummy corporation for Marcos since he could not perform these functions. Witness Gapud testified that he assigned his PHI shares to Ramon U. Cojuangco - not Marcos, thus: "CONSUL AGUILUCHO: Is it really true that you assigned your 400 shares [in Prime Holdings] to Ramon U. Cojuangco? MR.

GAPUD: Yes. CONSUL AGUILUCHO: How much did you receive as consideration for assigning your shares to him? MR.

GAPUD: The consideration for this assignment was that upon my assignment, first, my fiduciary responsibilities as nominee were extinguished, and secondly, I had transferred and extinguished any and all liabilities under the subscription payable. CONSUL AGUILUCHO: Do you know if Ramon Cojuangco received the said shares for himself or for anybody else? MR.

GAPUD: I don't know. " In fact, while he could have easily identified Marcos as the beneficial owner of PHI, witness Gapud - who succeeded Campos as President of PHI - refused under oath to do so.

Instead: "CONSUL AGUILUCHO: The heirs of Ramon U. Cojuango, namely Imelda O. Cojuangco and her children… claim that they own eighty (80) percent of the outstanding capital stock of Prime Holding, while the Estate of Ramon U. Cojuangco allegedly owns the remaining twenty (20) percent? Question: Based on your personal knowledge, do you affirm or deny the said allegation? MR.

GAPUD: I do not know. I can neither affirm nor deny. "

The majority of my colleagues hold that "Gapud's statement relating to subsequent execution of deeds of assignment to Cojuangco and his kin does not detract from the prior delivery of blank deeds to the former President, especially so in this case where, by Gapud's own recounting, he and his co-incorporators executed the 1981 and 1983 Deeds of Assignment with the knowledge and authorization of the same person to whom the earlier deeds were delivered - President Marcos." But the ponencia conveniently sidesteps the reality that there is no evidence of such prior delivery to Marcos. Witness de Guzman declared that the blank Deeds of Assignment over PHI shares were placed in the custody of the Legal Department, and thereafter delivered to Ramon Cojuangco, together with all the records of PHI.

The majority also hold that the alleged execution by the incorporators, as "nominees" of Marcos, of the Deeds of Assignment/Deeds of Trust is consistent with Gapud's statement that he received virtually nothing in return for PHI shares. But to my mind, this is fallacious - a conjecture made to fit an insignificant fact.

A straightforward explanation is simply that when the PHI shares were assigned to Ramon U. Cojuangco - the true beneficial owner -Gapud's role as a nominee became untenable. Obviously, a nominee's role ends when the principal's exercise of his right begins. Nor is it accurate to say that there was an absence of consideration for the transfer of the PHI shares.

Gapud himself admitted that the consideration for the assignment of his shares to Cojuangco was the termination of his fiduciary responsibilities as nominee and the extinguishment of his liabilities under the subscription. The ponencia does not explain why Marcos allowed the execution of the Deeds of Assignment in favor of respondent Cojuangcos. If PHI was indeed a dummy corporation, then it would be contrary to human experience for President Marcos to deprive himself of the legal mechanism to assert his alleged beneficial ownership.

Indeed, if the transfer of PHI shares to the Cojuangco family was with the "blessings" of President Marcos, then it can only mean the he was never interested in those shares - a fact consistent with Campos' statement that he "never discussed" the PHI shares with Marcos.

Therefore, the plausible reason for this is that Marcos never owned the shares in the first place. The realistic scenario, therefore, is that these shares actually pertained to Ramon U.

Cojuangco from the beginning and the assignments to him and members of his family merely confirmed what already existed in fact. In other words, Cojuangco - not Marcos - has been the beneficial owner of the shares from the start. This explains why no blank Deeds of Trust or Assignment were executed and delivered by the stockholders of PHI, and the reason why they executed and delivered Deeds of Assignment specifically naming Ramon U. Cojuangco and the members of his family as the assignees of the PHI shares.

This also explains why PHI's capitalization was not increased despite its acquisition of PTIC shares. An increase was unnecessary because Ramon U. Cojuangco actually did not part with the ownership of the PTIC shares transferred to PHI, since after all, he, not Marcos, owned the PHI. That he is the owner thereof is shown by the following circumstances: (a) respondent Cojuangco took over as Chairman and President of PHI after the assignment; and (b) the books and records of PHI were turned over to him, as testified to by de Guzman, the Republic's witness.

Certainly, these assignments are effective: "When a formal deed of assignment is executed by the transferor in favor of a transferee, for the purpose of assigning shares of stock, endorsement and delivery requirements stated in Section 63 of the Corporation Code are deemed substantially complied with. This mode of transfer covers a situation where no certificate of stock has been issued or where the stock certificate is not in the possession of the transferor-stockholder so that the shares of stock may be transferred by means of a deed of assignment."3 Additionally, the Republic failed to prove that Marcos had a subsisting interest in PHI. There had been no intervention on his part in the affairs of PLDT, PTIC, or PHI.

Nor did he issue instructions that "hugely and inexplicably benefited" these companies indicating he had any actual interest therein. Another source of debate in this case has been the evidentiary standard applicable to this and other ill-gotten wealth cases, given the Sandiganbayan's reliance on Baseco vs. PCGG 4 ponencia stresses that this Court never intended to lay down evidentiary standards in Baseco and, therefore, the Sandiganbayan's reference to such standards is nothing more than its "inference from its reading of the Decision."

I disagree. To my mind, Baseco is applicable. Baseco is a landmark ruling that confirms the modus operandi described by the Republic's witnesses here.

In that case, "street certificates" (i.e. stock certificates endorsed in blank) and Deeds of Assignment to various corporations including Baseco , also assigned in blank, were among the documents found to have been in Marcos' possession in Malacañang.

We were convinced that based on such proof, Marcos "actually owns well nigh one hundred percent of its outstanding stock."5 But unlike Baseco , here there is no such documentary evidence. Neither PHI stock certificates nor PHI Deeds of Assignment have turned up in Marcos' hands. Witness de Guzman testified that assignments of PHI shares were delivered to Cojuangco, not Marcos.

Documentary evidence (Exhibits "1" to "5", for instance) clearly identify Ramon U. Cojuangco and the members of his family as the assignees of PHI shares - certainly removing any idea that these were assigned in blank to an "unnamed beneficiary." Because this is a civil forfeiture case, then the Republic must establish, by a "preponderance of evidence,"

that the PHI shares were "ill-gotten wealth." Its burden is explained by this Court, thus: "Equiponderance of evidence rule states: When the scales shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or the other, the court will find for the defendant. Under said principle, the plaintiff must rely on the strength of his evidence and not on the weaknesses of defendant's claim.

Even if the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of evidence on his side if such evidence is insufficient in itself to establish his cause of action. "6 Similarly: "We are at a loss to determine which position is correct. Under the circumstances, we are constrained to decide the issues under the rule of burden of proof.

Where the evidence on an issue of fact is in equipoise or there is any doubt on which the evidence preponderates the party having the burden of proof falls upon that issue, that is to say, if the evidence touching on disputed facts is equally balanced, or if it does not produce a just, rational belief of its existence, or it leaves the mind in a state of perplexity the party holding the affirmative as to such fact must fail. (23 C.J. 11-12)"7 So must it be in this case. On the assumption that the Republic has presented a persuasive case, it may not be said that the defendants do not have in their favor an equally persuasive one.

Even were we to find the balance of evidence to be just about at equipoise, the Republic's instant claim - as a matter of law - must fall. Some might argue that the evidentiary requirement in civil forfeiture cases has an even higher standard, that is, proof beyond reasonable doubt. In Cabal vs. Kapunan ,8 we ruled that proceedings for forfeiture of property in favor of the State (under the Anti-Graft Law) is criminal and penal in nature because such actions are primarily to punish for violation of a duty or a public wrong and to deter others from offending in the like manner.

Forfeiture of property is in substance a criminal proceeding, and such forfeiture has been held to partake of the nature of a penalty. WHEREFORE , I vote to DENY the petition in G. R. No. 153459 and AFFIRM respondent Sandiganbayan's Partial Decision. ANGELINA SANDOVAL-GUTIERREZ Associate J ustice Footnotes 1 First Whereas Clause, Executive Order No. 2 (1986).

2 Deposition of 18 December 1995, Transcript, Exhibit ZZZ to ZZZ-1-N. 3 Id. at 807. 4 No. L-75885, May 27, 1987, 150 SCRA 181.

5 Ibid , at 228. 6 Sapu-an, et al. vs. CA , G.R. No. 91869, October 19, 1992, 214 SCRA 701, 705-706. 7 Pilar Development Corp. vs. IAC , No. L-72283, December 12, 1986, 146 SCRA 215.

8 6 SCRA 1059, citing Katigbak vs. Solicitor General, et al. , G.R. No. 19328, December 22, 1989.