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BASECO Vs PCGG

The Presidential Commission on Good Government (PCGG) issued a sequestration order against Bataan Shipyard and Engineering Co., Inc. (BASECO) based on evidence that President Marcos owned or controlled BASECO and took over other government assets. BASECO argued this violated its rights against self-incrimination and unreasonable searches and seizures. However, the court ruled that the right against self-incrimination does not apply to corporations. It also found that no search or seizure occurred, so there was no violation of unreasonable search and seizure rights. The court upheld the PCGG's order requiring BASECO to produce corporate records.

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786 views3 pages

BASECO Vs PCGG

The Presidential Commission on Good Government (PCGG) issued a sequestration order against Bataan Shipyard and Engineering Co., Inc. (BASECO) based on evidence that President Marcos owned or controlled BASECO and took over other government assets. BASECO argued this violated its rights against self-incrimination and unreasonable searches and seizures. However, the court ruled that the right against self-incrimination does not apply to corporations. It also found that no search or seizure occurred, so there was no violation of unreasonable search and seizure rights. The court upheld the PCGG's order requiring BASECO to produce corporate records.

Uploaded by

Tootsie Guzma
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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No. L-75885.

 May 27, 1987

BATAAN SHIPYARD & ENGINEERING CO., INC. (BASECO)


vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, CHAIRMAN JOVITO
SALONGA, COMMISSIONER MARY CONCEPCION BAUTISTA, COMMISSIONER
RAMON DIAZ, COMMISSIONER RAUL R. DAZA, COMMISSIONER QUINTIN S.
DOROMAL, CAPT. JORGE B. SIACUNCO, et al.,

NARVASA, J.:

FACTS:

Bataan Shipyard and Engineering Co., Inc (BASECO) – private corporation

Presidential Commission on Good Government (PCGG) – issued the sequestration order

The corporation known as BASECO was owned or controlled by President Marcos


during his administration, through nominees, by taking undue advantage of his public
office and/or using his powers, authority, or influence, and that it was by and through
the same means, that BASECO had taken over the business and/or assets of the
National Shipyard and Engineering Co., Inc., and other government-owned or controlled
entities.

As evidence found in Malacanang shortly after the sudden flight of President


Marcos were certificates corresponding to more than ninety-five percent (95%) of all
the outstanding shares of stock of BASECO, endorsed in blank, together with deeds of
assignment of practically all the outstanding shares of stock of the three (3)
corporations above mentioned (which hold 95.82% of all BASECO stock), signed by the
owners thereof although not notarized. While the petitioner's counsel was quick to
dispute this asserted fact, assuring the Court that the BASECO stockholders were still in
possession of their respective stock certificates and had never endorsed them in blank
or to anyone else, that denial is exposed by his own prior and subsequent recorded
statements as a mere gesture of defiance rather than a verifiable factual declaration.

In accordance with Executive Orders Numbered 1 and 2 promulgated by


President Corazon Aquino, PCGG through its commissioners and agent ordered
sequestration, takeover and other provisional orders affecting BASECO.

Commissioner Diaz invoked the provisions of Section 3 (c) of Executive Order No.
1, empowering the Commission —To provisionally takeover in the public interest or to
prevent its disposal or dissipation, business enterprises and properties taken over by
the government of the Marcos Administration or by entities or persons close to former
President Marcos, until the transactions leading to such acquisition by the latter can be
disposed of by the appropriate authorities.

ISSUE:

Whether Violation of Right against Self-Incrimination and Unreasonable Searches


and Seizures

RULING:

BASECO also contends that its right against self-incrimination and unreasonable
searches and seizures had been transgressed by the Order of April 18, 1986 which
required it "to produce corporate records from 1973 to 1986 under pain of contempt of
the Commission if it fails to do so." The order was issued upon the authority of Section
3 (e) of Executive Order No. 1, treating of the PCGG's power to "issue subpoenas
requiring * * the production of such books, papers, contracts, records, statements of
accounts and other documents as may be material to the investigation conducted by
the Commission," and paragraph (3), Executive Order No. 2 dealing with its power to
"(r)equire all persons in the Philippines holding * * (alleged "ill-gotten") assets or
properties, whether located in the Philippines or abroad, in their names as nominees,
agents or trustees, to make full disclosure of the same **." The contention lacks merit.

It is elementary that the right against self-incrimination has no application to juridical


persons.

"While an individual may lawfully refuse to answer incriminating questions unless


protected by an immunity statute, it does not follow that a corporation, vested with
special privileges and franchises, may refuse to show its hand when charged with an
abuse of such privileges *

Relevant jurisprudence is also cited by the Solicitor General

"* * corporations are not entitled to all of the constitutional protections which private
individuals have. * * They are not at all within the privilege against self-
incrimination, although this court more than once has said that the privilege runs very
closely with the 4th Amendment's Search and Seizure provisions. It is also settled that
an officer of the company cannot refuse to produce its records in its possession, upon
the plea that they will either incriminate him or may incriminate it" (Oklahoma Press
Publishing Co. v. Walling, 327 U.S. 186; emphasis, the Solicitor General's).

"* * The corporation is a creature of the state. It is presumed to be incorporated for


the benefit of the public. It received certain special privileges and franchises, and holds
them subject to the laws of the state and the limitations of its charter. Its powers are
limited by law. It can make no contract not authorized by its charter. Its rights to act as
a corporation are only preserved to it so long as it obeys the laws of its creation. There
is a reserve right in the legislature to investigate its contracts and find out whether it
has exceeded its powers. It would be a strange anomaly to hold that a state, having
chartered a corporation to make use of certain franchises, could not, in the exercise of
sovereignty, inquire how these franchises had been employed, and whether they had
been abused, and demand the production of the corporate books and papers for that
purpose. The defense amounts to this, that an officer of the corporation which is
charged with a criminal violation of the statute may plead the criminality of such
corporation as a refusal to produce its books. To state this proposition is to answer
it. While an individual may lawfully refuse to answer incriminating questions unless
protected by an immunity statute, it does not follow that a corporation, vested with
special privileges and franchises may refuse to show its hand when charged with an
abuse of such privileges. (Wilson v. United States, 55 Law Ed., 771, 780 [emphasis, the
Solicitor General's])"
At any rate, Executive Order No. 14-A, amending Section 4 of Executive Order No. 14
assures protection to individuals required to produce evidence before the PCGG against
any possible violation of his right against self-incrimination. It gives them immunity
from prosecution on the basis of testimony or information he is compelled to present.
As amended, said Section 4 now provides that—
'* * * *
"The witness may not refuse to comply with the order on the basis of his privilege
against self-incrimination; but no testimony or other information compelled under the
order (or any information directly or indirectly derived from such testimony, or other
information) may be used against the witness in any criminal case, except a prosecution
for perjury, giving a false statement, or otherwise failing to comply with the order."
The constitutional safeguard against unreasonable searches and seizures finds no
application to the case at bar either. There has been no search undertaken by any
agent or representative of the PCGG, and of course no seizure on the occasion thereof.

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