This petition questions the order of the Sandiganbayan to place cash dividends due the Eastern Telecommunications Philippines, Inc. (ETPI) Class "A" stockholders in the amount of ONE HUNDRED TWENTY MILLION PESOS (P120,000,000.00) turned over by ETPI to the Presidential Commission on Good Government (PCGG) under a special time deposit with the Philippine National Bank (PNB) for the account of SANDIGANBAYAN in escrow for the person or persons, natural or juridical, who shall be adjudged lawfully entitled thereto.

Sometime in March 1986, the petitioner PCGG sequestered ETPI.  The sequestration order was partially lifted in May 1986 when 40% of the shares of stock (Class "B") were freed from the effects of sequestration.  The remaining 60% (Class "A") shares, however, continued to be under sequestration.

On July 22, 1987, the PCGG filed with the Sandiganbayan a complaint for reconveyance, reversion, accounting, and restitution of the alleged ill-gotten ETPI shares and damages.  The case was docketed as Civil Case No. 0009.

On August 30, 1988 respondents Jose L. Africa and Manuel H. Nieto, Jr., for themselves and in behalf of all other ETPI Class "A" stockholders filed with the Sandiganbayan a joint motion to direct PCGG to remit to the Sandiganbayan the P90 million cash dividends of Class "A" stockholders turned over by ETPI President Eduardo M. Villanueva to the PCGG.

In a resolution dated September 15, 1988, the Sandiganbayan ordered, among others, the PCGG to remit to the Court the subject P90 million cash dividends and for the Clerk of Court to deposit the said amount under special time deposit with the PNB for the account of the Sandiganbayan in escrow for the person or persons, natural or juridical, who would be adjudged lawfully entitled thereto.

On September 27, 1988, the PCGG filed a manifestation and motion to set aside the September 15, 1988 resolution.  It manifested that as regards the joint motion, PCGG's acquiescence to the placing of the ETPI dividends with the PNB in a time deposit was under the condition that no government regulation should be violated.  Under its interpretation of the rules and regulations implementing sequestration however, the PCGG asserted that the custody of the subject dividends should be with the PCGG and the funds should be deposited in its name to be held in escrow for the person or persons, natural or juridical, who may be formally adjudged lawfully entitled thereto.

In the meantime, ETPI turned over another P30,000,000.00 cash dividends pertaining to ETPI Class "A" stockholders to the PCGG.  This prompted the private respondents to file another joint motion to direct PCGG to remit the P30,000,000.00 to the Sandiganbayan.

Acting on the manifestation and motion of PCGG, the Sandiganbayan in a resolution dated November 2, 1988 denied the same for lack of merit.

In another resolution dated December 12, 1988, the Sandiganbayan granted the joint motion filed by the private respondents.  The Sandiganbayan ruled:

"In line with the aforesaid resolution of November 2, 1988, and for the reasons therein given, the joint motion is hereby granted and the chairman of the PCGG, or whoever is acting in his stead, is hereby ordered to remit to the court within fifteen (15) days from notice hereof, the Thirty million Pesos (P30,000,000.00) cash dividends due to the ETPI Class "A" stockholders turned over by ETPI to PCGG on September 13, 1988, for the said dividends to be similarly placed under special time deposit with the Philippine National Bank for the account of SANDIGANBAYAN in escrow for the person or persons, natural or juridical, who shall be adjudged lawfully entitled thereto." (Rollo, p. 45)

The PCGG now assails the Sandiganbayan resolutions which ordered the PCGG to remit the total amount of P120,000,000.00 ETPI cash dividends to the Sandiganbayan to be deposited with the PNB in Sandiganbayan's name pending the determination of the true owners thereof.

The PCGG insists that under its authority to sequester ill-gotten properties envisioned in Executive Orders Numbered 1, 2 and 14 and pursuant to its implementing rules and regulations, the sequestered properties remain in its custody during and until such time that the true ownership over the sequestered shares has been finally determined.  It argues that such custody and control of the properties do not end upon the filing of the corresponding sequestration case with the Sandiganbayan.  Furthermore, it argues that its administrative functions over the properties must be distinguished from the judicial jurisdiction of the Sandiganbayan.  PCGG contends that its administrative jurisdiction over the subject dividends must remain with the PCGG even after the filing of the sequestration case in order to administer said dividends and such administrative function cannot be interfered with by the Sandiganbayan otherwise there would be a violation of the constitutional principle of "separation of powers" between the executive/administrative and the judicial functions of Government.  The PCGG claims that its arguments are based on principles allegedly laid down in the cases of Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission on Good Government, 150 SCRA 181 [1987] (hereafter referred to as BASECO case) and Presidential Commission on Good Government v. Peña, 159 SCRA 555 [1988] (hereafter referred to as Peña case).

To resolve the issue at hand we reiterate the nature and extent of the powers of the PCGG in cases of sequestration of alleged ill-gotten properties as well as the jurisdiction of the Sandiganbayan over sequestration cases filed before it.

As regards PCGG's role on the sequestered properties, we said in the BASECO case:

xxx                               xxx                               xxx

"b. Need of Provisional Measures to Collect and Conserve Assets Pending Suits

Nor may it be gainsaid that pending the institution of the suits for the recovery of such 'ill-gotten wealth' as the evidence at hand may reveal, there is an obvious and imperative need for preliminary, provisional measures to prevent the concealment, disappearance, destruction, dissipation, or loss of the assets and properties subject of the suits, or to restrain or foil acts that may render moot and academic, or effectively hamper, delay, or negate efforts to recover the same.

7. Provisional Remedies Prescribed by Law

To answer this need, the law has prescribed three (3) provisional remedies.  These are:  (1) sequestration; (2) freeze orders; and (3) provisional takeover.

Sequestration and freezing are remedies applicable generally to unearthed instances of 'ill-gotten wealth.' xxx.

a. Sequestration

By the clear terms of the laws, the power of the PCGG to sequester property claimed to be 'ill-gotten' means to place or cause to be placed under its possession or control said property, or any building or office wherein any such property and any records pertaining thereto may be found, including 'business enterprises and entities,' - for the purpose of preventing the destruction, concealment or dissipation of, and otherwise conserving and preserving, the same - until it can be determined, through appropriate judicial proceedings, whether the property was in truth 'ill-gotten,' i.e., acquired through or as a result of improper or illegal use of or the conversion of funds belonging to the Government or any of its branches, instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of official position, authority, relationship, connection or influence, resulting in unjust enrichment of the ostensible owner and grave damage and prejudice to the State.  (Except for the statement as to the duration of the writ of sequestration, this is substantially the definition of sequestration set out in Section 1 (B) of the Rules and Regulations of the PCGG (Rollo, pp. 195-196).  The term used in the Revised Anti-Subversion Law, (P.D. No. 885, to mean 'the seizure of private property or assets in the hands of any person or entity in order to prevent the utilization, transfer or conveyance of the same for purposes inimical to national security, or when necessary to protect the interest of the Government or any of its instrumentalities.  It shall include the taking over and assumption of the management, control and operation of the private property or assets seized' (reiterated in P.D. No. 1835, the Anti-Subversion Law of 1981, repealed by P.D. No. 1975 prom. on May 2, 1985) (see Phil. Law Dictionary, Moreno, 1982 ed., pp. 568-569).  And this, too, is the sense in which the term is commonly understood in other jurisdictions.

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d. No Divestment of Title Over Property Seized.

It may perhaps be well at this point to stress once again the provisional, contingent character of the remedies just described.  Indeed the law plainly qualifies the remedy of takeover by the adjective, 'provisional.' These remedies may be resorted to only for a particular exigency:  to prevent in the public interest the disappearance or dissipation of property or business, and conserve it pending adjudgment in appropriate proceedings of the primary issue of whether or not the acquisition of title or other right thereto by the apparent owner was attended by some vitiating anomaly.  None of the remedies is meant to deprive the owner or possessor of his title or any right to the property sequestered, frozen or taken over and vest it in the sequestering agency, the Government or other person.  This can be done only for the causes and by the processes laid down by law.

That this is the sense in which the power to sequester, freeze or provisionally take over is to be understood and exercised, the language of the executive orders in question leaves no doubt.  Executive Order No. 1 declares that the sequestration of property the acquisition of which is suspect shall last 'until the transactions leading to such acquisition x x x can be disposed of by the appropriate authorities.' (Id.) Executive order No. 2 declares that the assets or properties, therein mentioned shall remain frozen 'pending the outcome of appropriate proceedings in the Philippines to determine whether any such assets or properties were acquired' by illegal means.  Executive Order No. 14 makes clear that judicial proceedings are essential for the resolution of the basic issue of whether or not particular assets are ill-gotten, and resultant recovery thereof by the Government is warranted.

x x x                             x x x                             x x x

f. Kinship to attachment, Receivership

As thus described, sequestration, freezing and provisional takeover are akin to the provisional remedy of preliminary attachment, or receivership.  (BASECO's counsel agrees.  Rollo, p. 690) By attachment, a sheriff seizes property of a defendant in a civil suit so that it may stand as security for the satisfaction of any judgment that may be obtained, and not disposed of, or dissipated, or lost intentionally or otherwise, pending the action.  (Rule 57, Rules of Court) By receivership, property, real or personal, which is subject of litigation, is placed in the possession and control of a receiver appointed by the Court, who shall conserve it pending final determination of the title or right of possession over it.  (Rule 59, Rules of Court) All these remedies - sequestration, freezing, provisional, takeover, attachment and receivership - are provisional, temporary, designed for particular exigencies, attended by no character of permanency or finality, and always subject to the control of the issuing court or agency.

10. PCGG not a 'Judge', General Functions

It should also by now be reasonably evident from what has thus far been said that the PCGG is not, and was never intended to act as, a judge.  Its general function is to conduct investigations in order to collect evidence establishing instances of 'ill-gotten wealth;' issue sequestration, and such orders as may be warranted by the evidence thus collected and as may be necessary to preserve and conserve the assets of which it takes custody and control and prevent their disappearance, loss or dissipation; and eventually file and prosecute in the proper court of competent jurisdiction all cases investigated by it as may be warranted by its findings.  It does not try and decide, or hear and determine, or adjudicate with any character of finality or compulsion, cases involving the essential issue of whether or not property should be forfeited and transferred to the State because 'ill-gotten' within the meaning of the Constitution and the executive orders.  This function is reserved to the designated court, in this case, the Sandiganbayan.  (Ex. Ord. No. 14) There can therefore be no serious regard accorded to the accusation, leveled by BASECO, (Rollo, p. 695-697) that the PCGG plays the perfidious role of prosecutor and judge at the same time.

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b. PCGG Has Only Powers of Administration

The PCGG may thus exercise only powers of administration over the property or business sequestered or provisionally taken over, much like a court-appointed receiver, (See Sec. 7, Rule 59, Rules of Court) such as to bring and defend actions in its own name; receive rents; collect debts due; pay outstanding debts; and generally do such other acts and things as may be necessary to fulfill its mission as conservator and administrator.  In this context, it may in addition enjoin or restrain any actual or threatened commission of acts by any person or entity that may render moot and academic, or frustrate or otherwise make ineffectual its efforts to carry out its task; punish for direct or indirect contempt in accordance with the Rules of Court; and seek and secure the assistance of any office, agency or instrumentality of the government.  (Sec. 3, d, f, g, Ex. Ord. No. 1) In the case of sequestered businesses generally (i.e., going concerns, businesses in current operation), as in the case of sequestered objects, its essential role, as already discussed, is that of conservator, caretaker, 'watchdog' or overseer.  It is not that of manager, or innovator, much less an owner."

In sum, the PCGG's power to sequester alleged ill-gotten properties is likened to the provisional remedies of preliminary attachment or receivership which are always subject to the control of the court.  That this power of the PCGG is provisional in nature has been emphasized in the Baseco case.  We rule that the extent of such power should be related to the role of the Sandiganbayan in sequestration cases.  In the Peña case, we defined the role of the Sandiganbayan with regard to the sequestered properties by stating that "Under section 2 of the President's Executive Order No. 14 issued on May 7, 1986, all cases of the Commission regarding the 'Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, their close Relatives, Subordinates, Business Associates, Dummies, Agents or Nominees' whether civil or criminal are lodged within the 'exclusive and original jurisdiction of the Sandiganbayan' and all incidents arising from, incident to, or related to, such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to the review on certiorari exclusively by the Supreme Court." (at pp. 561-562) Also in the consolidated cases of Andres Soriano III, et al. v. Yuzon, et al., G.R. No. 74910; Eduardo Cojuangco, Jr., et al. v. Securities and Exchange Commission, et al., G.R. No. 75075; Ganay v. Presidential Commission on Good Government, G.R. No. 75094, 164 SCRA 226 [1988], we ruled "that exclusive jurisdiction conferred in the Sandiganbayan would evidently extend not only to the principal causes of action, i.e. the recovery of alleged ill-gotten wealth, but also to all incidents arising from, incidental or related to, such cases such as disputes over the sale of the shares, the propriety of the issuance of ancillary writs of provisional remedies relative thereto, the sequestration thereof which may be made the subject of separate actions or proceedings in another forum." (Resolution, August 10, 1988) The questioned order is an exercise of the jurisdiction which this Court has outlined in the principal cases governing the PCGG's powers, as possessed by the Sandiganbayan.  The petitioner charges the Sandiganbayan with committing grave abuse of discretion.  This contention has no merit.

We see no abuse of discretion in the Sandiganbayan's placing the dividends under litigation in custodia legis instead of allowing them to remain in the name and under the full control of one of the litigants.  Placing property in litigation under judicial possession, whether in the hands of a receiver, an administrator, or as in this case, in a government bank is an ancient and accepted procedure.  (See Gustilo, et al. v. Matti, et al., 11 Phil. 611, 615 [1908])

The placing of the litigated funds in the name of the court is only an incident in the main proceeding.  There is ample jurisprudence supporting the act allegedly committed with grave abuse of discretion, to wit:

"The court which first acquires jurisdiction of specific property by the lawful seizure thereof, or by the due commencement of a suit in that court, from which it appears that it is, or will become, necessary to a complete determination of the controversy involved, or to the enforcement of the judgment or decree therein, to seize, charge with a lien, sell, or exercise other like dominion over it, thereby withdraws that property from the jurisdiction of every other court and entitles the former to retain the control of it requisite to effectuate its judgment or decree in the suit free from interference of every other tribunal.  Farmers' Loan Trust Company v. Lake Street Elevated Railroad Co., 177 U.S. 51, 61, 20 S. Ct. 564, 44 L. Ed. 667; Peck v. Jenness, 7 How. 612, 12 L. Ed., 841; Freeman v. Howe, 24 How. 450, 16 L. Ed. 749; Moran v. Sturges, 154 U.S. 256, 14 S. Ct. 1019, 38 L. Ed. 981; Central Nat. Bank v. Stevens, 169 U.S. 432, 18 S. Ct. 403, 42 L. Ed. 807; Williams v. Neeley, 134 F. 1, 15, 67 C. C. A. 171, 185, 69 L. R. A. 761; Gates v. Bucki, 53 F. 961, 969, 4 C. C. A. 116. 128. 129, cited in Grooms v. Brown-Marx Co., 184 So. 698 236 Ala. 655." (Underlining suplied)

x x x                              x x x                            x x x

"x x x Jurisdiction attaching, the courts' powers as a necessary incident to their general jurisdiction, to make such orders in relation to the cases pending before them as are necessary to the progress of the cases and the dispatch of business follow.  Deming v. Foster, 42 N. H. 165, 178 cited in Burleigh v. Wong Sung Leon 139 A. 184, 83 N. H. 115.

x x x                             x x x                            x  x x

"x x x [A] court is vested, not only with the powers expressly granted by statute, but also with all such powers as are incidentally necessary to the effective exercise of the powers expressly conferred (In re McLure's Estate, 68 Mont. 556, 220 P. 527) and to render its orders, made under such express powers effective.  Brown v. Clark, 102 Tex. 323, 116 S. W. 360, 24 L. R. A. (N. S.) 670 cited in State v. District Court, 272 P. 525.

x x x                             x x x                               x x x

"In the absence of prohibitive legislation courts have inherent power to provide themselves with appropriate procedures required for the performance of their tasks.  Ex parte Peterson, 253 U.S. 300, 312, 313, 40 S. Ct. 543, 64 L. Ed. 919; Funk v. U.S., 290 U.S. 371, 381-384, 54 A. Ct. 212, 78 L. Ed. 369, 93 A.L.R. 1136 cited in Ex Parte U.S., C.C.A. Wis., 101 F 2d 870.

x x x                             x x  x                            x x  x

"x x x A court has inherent power to make such interlocutory orders as may be necessary to protect its jurisdiction, and to make certain that its eventual decree may not be ineffective.  (Boynton v. Moffat Tunnel Improvement Dist. C.C.A. Colo. 57 F, 2d 772.

x x x                             x x x                             x x x

"In the ordinary case the courts can proceed to the enforcement of the plaintiff's rights only after a trial had in the manner prescribed by the laws of the land, which involves due notice, the right of a trial by jury, etc.  Preliminary to such an adjudication, the power of the court is generally to preserve the subject matter of the litigation to maintain the status, or issue some extraordinary writs provided by law, such as attachments, etc.  None of these powers, however, are exercised on the theory that the court should, in advance of the final adjudication determine the rights of the parties in any summary way and put either of them in the enjoyment thereof; but such actions are taken merely, as means for securing an effective adjudication and enforcement of the rights of the parties after such adjudication." (Colby c. Osgood Tex. Civ. App., 230 S.W. 459; Underlining supplied)

The Sandiganbayan is tasked to determine the nature of the properties sequestered by the PCGG - whether or not they are ill-gotten and the actual owners of such sequestered properties.  The court acts as the arbiter between PCGG which maintains that the sequestered properties are ill-gotten wealth and should be recovered in favor of the government and the claimants to such sequestered properties who maintain that such properties are not part of the ill-gotten wealth of the late President Marcos, his family, cronies and business associates.  Necessarily, these properties should come within the jurisdiction of the Sandiganbayan which, therefore, has ample power to control the proceedings including the issuance of orders, and ancillary writs of attachment in order to effectuate its judgment or decree.  We rule that one such power is to place such properties in custodia legis.  It has been ruled:

"The question of jurisdiction of the res, with reference to other judicial processes instituted regarding it, is passed upon in Farmers' Loan, etc., Co. v. Lake St. Rd. Co., 177 U.S. 51, 20 Sup. Ct. 564, 44 L. Ed. 667.  The court (177 U.S. at page 61, 20 Sup. Ct. 568, [44 L. Ed. 667]) says:

"'The possession of the res vests the court which has first acquired jurisdiction with the power to hear and determine all controversies relating thereto, and for the time being disables other courts of coordinate jurisdiction from exercising a like power.  This rule is essential to the orderly administration of justice, and to prevent unseemly conflicts between courts whose jurisdiction embraces the same subjects and persons.  Nor is this rule restricted in its application to cases where property has been actually seized under judicial process before a second suit is instituted in another court; but it often applies as well where suits are brought to enforce liens against specific property, to marshall assets, administer trusts, or liquidate insolvent estates, and in suits of a similar nature where, in the progress of the litigation, the court may be compelled to assume the possession and control of the property to be affected.'

x x x                             x x x                             x x x

That the doctrine of in custodia legis is a rule of property right, made for the benefit of litigants, as well as a rule of jurisdiction, made for the purpose of avoiding conflicts between courts, is abundantly demonstrated by the following cases:  Berlin Mills Co. v. Lowe, et al., 211 Mass. 28 97 N.E. 57, Ann. Cas., 1914B, 937, 938; Tuck v. Manning, 150 Mass. 211, 22 N. E. 1001, 5 L.R.A. 666." (Gibbons v. Ellis, 165 P 783; Underlining supplied)

The need to place the subject P120,000,000.00 ETPI cash dividends in custodia legis is imperative considering that a part of the cash dividends belong to persons who are not even parties to the main sequestration case.  Among them are the private respondents herein.  These persons in fact filed a motion to allow them to intervene in the case which the Sandiganbayan granted in so far as it pertains to the incident relating to the said dividends.

Finally, we find unmeritorious the argument that placing the subject cash dividends in custodia legis would violate the separation between administrative/executive functions and the judicial functions.  The pronouncement in the Peña case as regards administrative agencies in relation to the judicial functions refers to the discretionary nature of the exercise of administrative functions and to the respect which courts should give to the findings of facts of administrative agencies for reasons reiterated therein, to wit:

"It should be emphasized here, as again stressed by the Court in the recent case of Republic, et al. v. De Los Angeles, et al., G.R. No. L-30240, March 25, 1988, that 'it is well-recognized principle that purely administrative and discretionary functions may not be interfered by the courts.  This is generally true with respect to acts involving the exercise of judgment or discretion, and findings of fact.  There should be no thought of disregarding the traditional line separating judicial and administrative competence, the former being entrusted with the determination of legal questions and the latter being limited as a result of its expertise to the ascertainment of the decisive facts.' This is specially true in sequestration cases affected by the Commission for the recovery of the nation's plundered wealth that may affect the nation's very survival, in the light of the constitutional mandate that such sequestration or freeze orders 'shall be issued only upon showing a prima facie case' (Art. XVIII sec. 26, Constitution) and the settled principle that findings by administrative or quasi-judicial agencies like the Commission are entitled to the greatest respect and are practically binding and conclusive, like the factual/findings of the trial and appellate courts, save where they are patently arbitrary or capricious or are not supported by substantial evidence." (Presidential Commission on Good Government v. Peña, 159 SCRA 556, 569 [1988]).

Indeed, the administration of the sequestered properties is left to the PCGG but it must be borne in mind that the Sandiganbayan's jurisdiction over the sequestration cases demands that it should also have the authority to preserve the subject matter of the cases, the alleged ill-gotten properties by issuing orders and ancillary writs including placing the properties in custodia legis so as to make its judgment effective as well as to protect the rightful claimants.  This authority is judicial and not an administrative matter.

If a trial court is convinced that the preservation of properties under litigation calls for placing them in custodia legis, it has the power to do so.  We will not reverse the exercise of this power absent any improper motives, arbitrariness or whimsicality in the questioned order.  As earlier stated, there is no showing of any grave abuse of discretion in this case.

WHEREFORE, the instant petition is hereby DENIED DUE COURSE for lack of merit.  The questioned resolutions of the Sandiganbayan are hereby AFFIRMED.

SO ORDERED.

Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, and Regalado, JJ., concur.
Fernan, C.J., on leave.