Chavez vs.

PCGG
May 19, 1999 | Panganiban, J. | Void or Inexistent Contracts
PETITIONER: Francisco I. Chavez
RESPONDENT: Presidential Commission on Good Government (PCGG), Magtanggol Guinigundo (Chairman of PCGG)
PETITIONERS-IN-INTERVENTION: Gloria, Celnan, Scarlet and Teresa all surnamed Jopson
SUMMARY: Ma. Imelda Marcos-Manotoc, Ferdinand R. Marcos II and Irene Marcos-Araneta filed a motion to intervene and to
partially reconsider the decision of the SC nullifying the General and Supplemental Agreements between them and the PCGG
regarding their alleged ill-gotten wealth. They allege that their constitutional right to due process and equal protection was violated.
SC ruled that there is no violation of due process because the Agreement is void for being contrary to law and the Constitution.
Hence, no rights or interests was violated by the nullification of the Agreements.
DOCTRINE: A void agreement will not be rendered operative by the parties alleged performance (partial or full) of their
respective prestations. A contract that violates the Constitution and the law is null and void ab initio and vests no rights and creates
no obligations. It produces no legal effect. (#2 in the Ratio)
FACTS:
1. Motions to intervene and for partial reconsideration as well
as their corresponding motions for leave was filed before SC.
2. Movants Ma. Imelda Marcos-Manotoc, Ferdinand R.
Marcos II and Irene Marcos-Araneta allege that they are
parties and signatories to the General and Supplemental
Agreements dated December 28, 1993, which the SC, in its
Decision promulgated on December 9, 1998, declared "NULL
AND VOID for being contrary to law and the Constitution."
3. The movants allege that their exclusion from the instant
case resulted in a denial of their constitutional rights to due
process and to equal protection of the laws. They also raise the
"principle of hierarchical administration of justice" to impugn
the Courts cognizance of petitioners direct action before it.
4. Summary of the Main Decision dated December 9, 1998:
Francisco I. Chavez filed an original action seeking (1) to
prohibit and "[e]njoin respondents [PCGG and its chairman]
from privately entering into, perfecting and/or executing any
agreement with the heirs of the late President Ferdinand E.
Marcos x x x relating to and concerning the properties and
assets of Ferdinand Marcos located in the Philippines and/or
abroad -- including the so-called Marcos gold hoard"; and (2)
to "[c]ompel respondent[s] to make public all negotiations and
agreement, be they ongoing or perfected, and all documents
related to or relating to such negotiations and agreement
between the PCGG and the Marcos heirs."
Respondents, on the other hand, do not deny forging a
compromise agreement with the Marcos heirs. They claim,
though, that petitioners action is premature, because there is
no showing that he has asked the PCGG to disclose the
negotiations and the Agreements. And even if he has, PCGG
may not yet be compelled to make any disclosure, since the
proposed terms and conditions of the Agreements have not
become effective and binding.
SC ruled that the General and Supplemental Agreements
entered into between the Heirs of Ferdinand Marcos and the
PCGG is void for being contrary to law and the Constitution.
The ruling was based on the following: 1) the agreement
provided criminal immunity to the Marcoses which is only

accorded to witnesses and not to principal defendants and thus

contrary to law; 2) the agreement exempts from tax the
properties to be retained by the Marcoses which is contrary to
the Constitution because the PCGG has no power to grant tax
exemptions; 3) the agreement binds the government to dismiss
the case pending in Sandiganbayan over which the judicial
branch has alaready acquired jurisdiction; 4) the government
waives all claims and counterclaims against the Marcoses
which is contrary to law on the proscription against future
fraud; 5) the agreement does not provide a definite and
determinable period within which the parties shall fulfill their
respective prestations; 6) the Agreements do not state with
specificity the standards for determining which assets shall be
forfeited by the government and which shall be retained by the
Marcoses; and 7) The absence of President Ramos approval
of the principal Agreement, an express condition therein,
renders the compromise incomplete and unenforceable.
ISSUE/S:
1. WON the motions are meritorious NO
RULING: Motions are denied for lack of merit.
RATIO:
1. Intervention Not Allowed After Final Judgment: First,
Section 2, Rule 19 of the Rules of Court, provides that a
motion to intervene should be filed "before rendition of
judgment . . ." Intervention can no longer be allowed in a case
already terminated by final judgment. Second, they do not
even offer any valid plausible excuse for such late quest to
assert their alleged rights. Movants have long been back in the
mainstream of Philippine political and social life. Indeed, they
could not (and in fact did not) even feign unawareness of the
petition prior to its disposition. Third, the assailed Decision
has become final and executory; the original parties have not
filed any motion for reconsideration, and the period for doing
so has long lapsed.
2. No Denial of Due Process: The movants are merely
incidental, not indispensable, parties to the instant case. Being
contractors to the General and Supplemental Agreements
involving their supposed properties, they claim that their
interests are affected by the petition. However, the
Agreements undeniably contain terms and conditions that

are clearly contrary to the Constitution and the laws and

are not subject to compromise. Such terms and conditions
cannot be granted by the PCGG to anyone, not just to
movants. Being so, no argument of the contractors will make
such illegal and unconstitutional stipulations pass the test of
validity.
The void agreement will not be rendered
operative by the parties alleged performance (partial or
full) of their respective prestations. A contract that violates
the Constitution and the law is null and void ab initio and
vests no rights and creates no obligations. It produces no
legal effect at all. In legal terms, the movants have really no
interest to protect or right to assert in this proceeding.
Contrary to their allegations, no infraction upon their rights
has been committed.
3. Petition Treated as an Exception to the Principle of

Hierarchical Administration of Justice: Movants have not

raised any new argument that has not been taken up. In any
event, the principle of the hierarchy of the courts generally
applies to cases involving factual questions. The oft-repeated
justification for invoking it is that such cases do not only
impose upon the precious time of the Court but, more
important, inevitably result in their delayed adjudication.
Often, such cases have to be remanded or referred to the lower
court as the proper forum or as better equipped to resolve the
issues, since the Supreme Court is not a trier of facts. 6
Inasmuch as the petition at bar involves only constitutional
and legal questions concerning public interest, the Court
resolved to exercise primary jurisdiction on the matter.