REPUBLIC OF THE PHILIPPINES, petitioner, vs.

HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION),

FERDINAND E. MARCOS (REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA
[IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE MARCOS-ARANETA) AND IMELDA
ROMUALDEZ MARCOS, respondents

G.R. No. 152154 | July 15, 2003

FACTS:

On December 17, 1991, petitioner Republic, through the Presidential Commission on Good Government
(PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for forfeiture before the
Sandiganbayan, docketed as Civil Case No. 0141 entitled Republic of the Philippines vs. Ferdinand E.
Marcos, represented by his Estate/Heirs and Imelda R. Marcos.

In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now
estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as
illgotten wealth. The funds were previously held in five account groups, using various foreign
foundations in certain Swiss banks.

In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which
exceeded the Marcos couple’s salaries, other lawful income as well as income from legitimately
acquired property. The treasury notes are frozen at the Central Bank of the Philippines, now Bangko
Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG.

Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements were
executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global
settlement of the assets of the Marcos family. Subsequently, respondent Marcos children filed a motion
for the approval of said agreements and for the enforcement thereof.

The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of
and distribute all assets presumed to be owned by the Marcos family under the conditions contained
therein. The aforementioned General Agreement specified filed in one of its premises the fact that
petitioner obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that US$356
million belongs in principle to the Republic of the Philippines provided certain conditionalities are met x
x x. The said decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District
Attorney Peter Consandey, granting petitioner’s request for legal assistance. Consandey declared the
various deposits in the name of the enumerated foundations to be of illegal provenance and ordered
that they be frozen to await the final verdict in favor of the parties entitled to restitution.

On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the
pleadings. Respondent Mrs. Marcos filed her opposition thereto which was later adopted by
respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.

The Sandiganbayan granted petitioner’s motion for summary judgment.

On reconsideration, the Sandiganbayan reversed its decision, thus denying petitioner’s motion for
summary judgment. The Sandiganbayan concluded that the evidence offered for summary judgment of
the case did not prove that the money in the Swiss Banks belonged to the Marcos spouses because no
legal proof exists in the record as to the ownership by the Marcoses of the funds in escrow from the
Swiss Banks.

Hence, the instant petition.

ISSUE:

whether or not respondents raised any genuine issue of fact which would either justify or negate
summary judgment

RULING:

The Court held that respondent Marcoses failed to raise any genuine issue of fact in their pleadings.
Thus, on motion of petitioner Republic, summary judgment should take place as a matter of right.

Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action.
The theory of summary judgment is that, although an answer may on its face appear to tender issues
requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not
genuine but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner Republic.

A genuine issue is an issue of fact which calls for the presentation of evidence as distinguished from an
issue which is fictitious and contrived, set up in bad faith or patently lacking in substance so as not to
constitute a genuine issue for trial. Respondents’ defenses of “lack of knowledge for lack of privity” or
(inability to) recall because it happened a long time ago or, on the part of Mrs. Marcos, that “the funds
were lawfully acquired are fully insufficient to tender genuine issues. Respondent Marcoses’ defenses
were a sham and evidently calibrated to compound and confuse the issues.

In their answer, respondents failed to specifically deny each and every allegation contained in the
petition for forfeiture in the manner required by the rules. All they gave were stock answers like “they
have no sufficient knowledge” or “they could not recall because it happened a long time ago,” and, as to
Mrs. Marcos, “the funds were lawfully acquired,” without stating the basis of such assertions.

The purpose of requiring respondents to make a specific denial is to make them disclose facts which will
disprove the allegations of petitioner at the trial, together with the matters they rely upon in support of
such denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary expenses and waste
of time by compelling both parties to lay their cards on the table, thus reducing the controversy to its
true terms.

Respondents’ denials in their answer at the Sandiganbayan were based on their alleged lack of
knowledge or information sufficient to form a belief as to the truth of the allegations of the petition.
It is true that one of the modes of specific denial under the rules is a denial through a statement that the
defendant is without knowledge or information sufficient to form a belief as to the truth of the material
averment in the complaint. The question, however, is whether the kind of denial in respondents’ answer
qualifies as the specific denial called for by the rules. In Morales vs. Court of Appeals, this Court ruled
that if an allegation directly and specifically charges a party with having done, performed or committed a
particular act which the latter did not in fact do, perform or commit, a categorical and express denial
must be made.

Here, despite the serious and specific allegations against them, the Marcoses responded by simply
saying that they had no knowledge or information sufficient to form a belief as to the truth of such
allegations. Such a general, self- serving claim of ignorance of the facts alleged in the petition for
forfeiture was insufficient to raise an issue. Respondent Marcoses should have positively stated how it
was that they were supposedly ignorant of the facts alleged.

Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading
responded to which are not squarely denied. It was in effect an admission of the averments it was
directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it
an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial
pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with
qualifying or modifying language and the words of the allegation as so qualified or modified are literally
denied, it has been held that the qualifying circumstances alone are denied while the fact itself is
admitted.