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12/6/2017 G.R.Nos.

17785758

RepublicofthePhilippines
SUPREMECOURT
Manila


ENBANC



PHILIPPINECOCONUTG.R.Nos.17785758
,PRODUCERSFEDERATION,INC.
(COCOFED),MANUELV.DEL
ROSARIO,DOMINGOP.ESPINA,
SALVADORP.BALLARES,
JOSELITOA.MORALEDA,
PAZM.YASON,
VICENTEA.CADIZ,
CESARIADELUNATITULAR,and
RAYMUNDOC.DEVILLA,
Petitioners,

versus

REPUBLICOFTHEPHILIPPINES,
Respondent,

WIGBERTOE.TAADA,
OSCARF.SANTOS,
SURIGAODELSURFEDERATION
OFAGRICULTURAL
COOPERATIVES(SUFAC)and
MOROFARMERSASSOCIATION
OFZAMBOANGADELSUR
(MOFAZS),representedby
ROMEOC.ROYANDOYAN,
Intervenors.
xx
DANILOS.URSUA,G.R.No.178193
Petitioner,

versus


REPUBLICOFTHEPHILIPPINES,

Respondent,
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Respondent,
xx




Present:

CORONA,C.J.,
CARPIO,*
VELASCO,JR.,
LEONARDODECASTRO,*
BRION,**
PERALTA,*
BERSAMIN,
DELCASTILLO,
ABAD,
VILLARAMA,JR.,
PEREZ,
MENDOZA,
SERENO,
REYES,and
PERLASBERNABE,JJ.


Promulgated:

January24,2012
xx


DECISION

VELASCO,JR.,J.:


TheCase



Castagainstasimilarbackdrop,theseconsolidatedpetitionsforreviewunderRule45of
theRulesofCourtassailandseektoannulcertainissuancesoftheSandiganbayaninitsCivil

CaseNo.0033Aentitled,RepublicofthePhilippines,Plaintiff,v.EduardoM.Cojuangco,Jr.,2/45
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CaseNo.0033Aentitled,RepublicofthePhilippines,Plaintiff,v.EduardoM.Cojuangco,Jr.,
etal.,Defendants,COCOFED,etal.,BALLARES,etal.,ClassActionMovants,andCivilCase
No.0033Fentitled,RepublicofthePhilippines,Plaintiff,v.EduardoM.Cojuangco,Jr.,etal.,
Defendants.CivilCase(CC)Nos.0033Aand0033Faretheresultsofthesplittingintoeight
(8) amended complaints of CC No. 0033 entitled, Republic of the Philippines v. Eduardo
Cojuangco, Jr., et al., a suit for recovery of illgotten wealth commenced by the Presidential
Commission on Good Government (PCGG), for the Republic of the Philippines (Republic),
against Ferdinand E. Marcos and several individuals, among them, Ma. Clara Lobregat
(Lobregat)andpetitionerDaniloS.Ursua(Ursua).LobregatandUrsuaoccupied,atonetimeor
another, directorial or top management positions in either the Philippine Coconut Producers
[1]
Federation, Inc. (COCOFED) or the Philippine Coconut Authority (PCA), or both. Each of
the eight (8) subdivided complaints correspondingly impleaded as defendants only the alleged
participantsinthetransaction/ssubjectofthesuit,orwhoareaverredasowner/softheassets
involved.

The original complaint, CC No. 0033, as later amended to make the allegations more
[2]
specific,isdescribedinRepublicv.Sandiganbayan (oneofseveralillgottensuitsofthesame
title disposed of by the Court) as revolving around the provisional take over by the PCGG of
COCOFED,Cocomark,andCoconutInvestmentCompanyandtheirassetsandthesequestration
ofsharesofstockinUnitedCoconutPlantersBank(UCPB)allegedlyownedby,amongothers,
over a million coconut farmers, and the six (6) Coconut Industry Investment Fund (CIIF)
[3]
corporations, referred to in some pleadings as CIIF oil mills and the fourteen (14) CIIF
[4]
holdingcompanies (hereaftercollectivelycalledCIIFcompanies),socalledforhavingbeen
eitherorganized,acquiredand/orfundedasUCPBsubsidiarieswiththeuseoftheCIIFlevy.The
basiccomplaintalsocontainedallegationsabouttheallegedmisuseofthecoconutlevyfundsto
buyoutthemajorityoftheoutstandingsharesofstockofSanMiguelCorporation(SMC).

More particularly, in G.R. Nos. 17785758, class action petitioners COCOFED and a
group of purported coconut farmers and COCOFED members (hereinafter COCOFED et al.
[5]
collectively) seek the reversal of the following judgments and resolutions of the antigraft
courtinsofarastheseissuancesareadversetotheirinterests:

[6] [7]
1) Partial Summary Judgment datedJuly11,2003, as reiterated in a resolution
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[6] [7]
1) Partial Summary Judgment datedJuly11,2003, as reiterated in a resolution of
December 28, 2004, denying COCOFEDs motion for reconsideration, and the May 11, 2007
resolution denying COCOFEDs motion to set case for trial and declaring the partial summary
[8]
judgmentfinalandappealable, allissuedinCivilCaseNo.0033Aand

[9] [10]
2)PartialSummaryJudgment datedMay7,2004,asalsoreiteratedinaresolution
[11]
ofDecember28,2004, and the May 11, 2007 resolution issued in Civil Case No. 0033F.
The December 28, 2004 resolution denied COCOFEDs Class Action Omnibus Motion therein
prayingtodismissCCCaseNo.0033Fonjurisdictionalgroundandalternatively,reconsideration
andtosetcasefortrial.TheMay11,2007resolutiondeclaredthejudgmentfinalandappealable.


For convenience, the partial summary judgment (PSJ) rendered on July 11, 2003 in CC
No. 0033A shall hereinafter be referred to as PSJA, and that issued on May 7, 2004 in CC
0033F, as PSJF. PSJA and PSJF basically granted the Republics separate motions for
summaryjudgment.

OnJune5,2007,thecourtaquoissuedaResolutioninCCNo.0033A,whichmodified
PSJAbyrulingthatnofurthertrialisneededontheissueofownershipofthesubjectproperties.
Likewise,onMay11,2007,thesaidcourtissuedaResolutioninCCNo.0033FamendingPSJ
Finlikemanner.
Ontheotherhand,petitionerUrsua,inG.R.No.178193,limitshispetitionforreviewon
PSJAtotheextentthatitnegateshisclaimsoversharesofstockinUCPB.

[12]
Taada,etal.haveintervened inG.R.Nos.17785758insupportofthegovernments
case.

Another petition was filed and docketed as G.R. No. 180705. It involves questions
relatingtoEduardoM.Cojuangco,Jr.s(Cojuangco,Jr.s)ownershipoftheUCPBshares,which
[13]
heallegedlyreceivedasoptionshares,andwhichisoneoftheissuesraisedinPSJA. G.R.
No.180705wasconsolidatedwithG.R.Nos.17785758and178193.OnSeptember 28, 2011,
[14]
respondent Republic filed a Motion to Resolve G.R. Nos. 17785758 and 178193. On
January 17, 2012, the Court issued a Resolution deconsolidating G.R. Nos. 17785758 and
178193fromG.R.No.180705.ThisDecisionisthereforeseparateanddistinctfromthedecision
toberenderedinG.R.No.180705.


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TheFacts

Therelevantfacts,asculledfromtherecordsandasgatheredfromDecisionsoftheCourt
inabatchofcocolevyandillegalwealthcases,are:

In 1971, Republic Act No. (R.A.) 6260 was enacted creating the Coconut Investment
[15]
Company(CIC)toadministertheCoconutInvestmentFund(CIF),which,underSection8
thereof,wastobesourcedfromaPhP0.55levyonthesaleofevery100kg.ofcopra.Ofthe
PhP0.55levyofwhichthecoprasellerwas,oroughttobe,issuedCOCOFUNDreceipts,PhP
0.02wasplacedatthedispositionofCOCOFED,thenationalassociationofcoconutproducers
[16]
declared by the Philippine Coconut Administration (PHILCOA, now PCA ) as having the
[17]
largestmembership.

ThedeclarationofmartiallawinSeptember1972sawtheissuanceofseveralpresidential
decrees(P.Ds.)purportedlydesignedtoimprovethecoconutindustrythroughthecollectionand
useofthecoconutlevyfund.Whilecominggenerallyfromimpositionsonthefirstsaleofcopra,
thecoconutlevyfundcameundervariousnames,thedifferentestablishinglawsandthestated
ostensible purpose for the exaction explaining the differing denominations. Charged with the
[18]
dutyofcollectingandadministeringtheFundwasPCA. LikeCOCOFEDwithwhichithad
[19]
alegallinkage, thePCA,bystatutoryprovisionsscatteredindifferentcocolevydecrees,had
[20]
itsshareofthecocolevy.

Thefollowingweresomeoftheissuancesonthecocolevy,itscollectionandutilization,
howtheproceedsofthelevywillbemanagedandbywhom,andthepurposeitwassupposedto
serve:
1. P.D. No. 276 established the Coconut Consumers Stabilization Fund (CCSF) and
[21]
declaredtheproceedsoftheCCSFlevyastrustfund, tobeutilizedtosubsidizethesaleof
[22]
coconutbasedproducts,thusstabilizingthepriceofedibleoil.

2.P.D.No.582 created the Coconut Industry Development Fund (CIDF) to finance the
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2.P.D.No.582 created the Coconut Industry Development Fund (CIDF) to finance the
operationofahybridcoconutseedfarm.

3.ThencameP.D.No.755providingunderitsSection1thefollowing:

It is hereby declared that the policy of the State is to provide readily available credit
facilitiestothecoconutfarmersatapreferentialratesthatthispolicycanbeexpeditiouslyand
efficientlyrealizedbytheimplementationoftheAgreementfortheAcquisitionofaCommercial
Bank for the benefit of Coconut Farmers executed by the [PCA] and that the [PCA] is hereby
authorizedtodistribute,forfree,thesharesofstockofthebankitacquiredtothecoconutfarmers.

Towardsachievingthepolicythusdeclared,P.D.No.755,underitsSection2,authorized
PCAtoutilizetheCCSFandtheCIDFcollectionstoacquireacommercialbankanddepositthe
CCSF levy collections in said bank, interest free, the deposit withdrawable only when the
bank has attained a certain level of sufficiency in its equity capital. The same section also
decreed that all levies PCA is authorized to collect shall not be considered as special and/or
fiduciaryfundsorformpartofthegeneralfundsofthegovernmentwithinthecontemplationof
[23]
P.D.No.711.

4.P.D.No.961codifiedthevariouslawsrelatingtothedevelopmentofcoconut/palmoil
industries.

5.TherelevantprovisionsofP.D.No.961,aslateramendedbyP.D.No.1468(Revised
CoconutIndustryCode),read:

ARTICLEIII
Levies

Section1.CoconutConsumersStabilizationFundLevy.The[PCA]isherebyempowered
toimposeandcollecttheCoconutConsumersStabilizationFundLevy.

.

Section5.Exemption.The[CCSF]andthe[CIDF]aswellasalldisbursementsasherein
authorized,shallnotbeconstruedasspecialand/orfiduciaryfunds,oraspartofthegeneral
fundsofthenationalgovernmentwithinthecontemplationofPD711theintentionbeingthat
saidFundandthedisbursementsthereofashereinauthorizedforthebenefitofthecoconut
farmersshallbeownedbythemintheirprivatecapacities:.(Emphasissupplied.)

6.LetterofInstructionsNo.(LOI)926,Seriesof1979,madereferencetothecreation,
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outofothercocolevyfunds,oftheCoconutIndustryInvestmentFund(CIIF)inP.D.No.1468
andentrustedaportionoftheCIIFlevytoUCPBforinvestment,onbehalfofcoconutfarmers,
[24]
inoilmillsandotherprivatecorporations,withthefollowingequityownershipstructure:

Section 2. Organization of the Cooperative Endeavor. The [UCPB], in its capacity as the
investmentarmofthecoconutfarmersthruthe[CIIF]isherebydirectedtoinvest,onbehalfof
the coconut farmers, such portion of the CIIF in private corporations under the following
guidelines:

a) The coconut farmers shall own or control at least (50%) of the outstanding voting
capital stock of the private corporation [acquired] thru the CIIF and/or corporation owned or
controlledbythefarmersthrutheCIIF.(Wordsinbracketadded.)


Throughtheyears,apartofthecoconutlevyfundswentdirectlyorindirectlytovarious
[25]
projectsand/orwasconvertedintodifferentassetsorinvestments. Ofparticularrelevanceto
thiscasewastheirusetoacquiretheFirstUnitedBank(FUB),laterrenamedUCPB,andthe
[26]
acquisitionbyUCPB,throughtheCIIFcompanies,ofalargeblockofSMCshares.

Apropos the intended acquisition of a commercial bank for the purpose stated earlier, it
wouldappearthatFUBwasthebankofchoicewhichthePedroCojuangcogroup(collectively,
PedroCojuangco)hadcontrolof.Theplan,then,wasforPCAtobuyallofPedroCojuangcos
sharesinFUB.However,aslatereventsunfolded,asimpledirectsalefromtheseller(Pedro)to
PCA did not ensue as it was made to appear that Cojuangco, Jr. had the exclusive option to
acquire the formers FUB controlling interests. Emerging from this elaborate, circuitous
[27]
arrangementweretwodeedsthefirst,simplydenominatedasAgreement, datedMay1975,
[28]
enteredintobyandbetweenCojuangco,Jr.,forandinhisbehalfandinbehalfofcertain
other buyers, and Pedro Cojuangco, purportedly accorded Cojuangco, Jr. the option to buy
72.2%ofFUBsoutstandingcapitalstock,or137,866shares(theoptionshares,forbrevity),at
PhP200pershare.

Thesecondbutrelatedcontract,datedMay25,1975,wasdenominatedasAgreementfor
theAcquisitionofaCommercialBankfortheBenefitoftheCoconutFarmersofthePhilippines.
[29] [30]
It had PCA, for itself and for the benefit of the coconut farmers, purchase from
Cojuangco, Jr. the shares of stock subject of the First Agreement for PhP 200 per share. As
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additional consideration for PCAs buyout of what Cojuangco, Jr. would later claim to be his
[31]
exclusiveandpersonaloption, itwasstipulatedthat,fromPCA,Cojuangco,Jr.shallreceive
equityinFUBamountingto10%,or7.22%,ofthe72.2%,orfullypaidshares.

Apart from the aforementioned 72.2%, PCA purchased from other FUB shareholders
6,534shares.

While the 64.98% portion of the option shares (72.2% 7.22% = 64.98%) ostensibly
pertained to the farmers, the corresponding stock certificates supposedly representing the
[32]
farmers equity were in the name of and delivered to PCA. There were, however, shares
[33]
formingpartoftheaforesaid64.98%portion,whichendedupinthehandsofnonfarmers.
Theremaining27.8%oftheFUBcapitalstockwerenotcoveredbyanyoftheagreements.

Under paragraph 8 of the second agreement, PCA agreed to expeditiously distribute the
FUB shares purchased to such coconut farmers holding registered COCOFUND receipts on
equitablebasis.

AsfoundbytheSandiganbayan,thePCAappropriated,outofitsownfund,anamountfor
thepurchaseofthesaid72.2%equity,albeititwouldlaterreimburseitselffromthecoconut
[34]
levyfund.

[35]
AsofJune30,1975,thelistofFUBstockholdersshowsPCAwith129,955shares.

Shortly after the execution of the PCA Cojuangco, Jr. Agreement, President Marcos
issued,onJuly29,1975,P.D.No.755directing,asearliernarrated,PCAtousetheCCSFand
CIDF to acquire a commercial bank to provide coco farmers with readily available credit
facilitiesatpreferentialrate,andPCAtodistribute,forfree,thebanksharestococonutfarmers.

Then came the 1986 EDSA event. One of the priorities of then President Corazon C.
Aquinosrevolutionarygovernmentwastherecoveryofillgottenwealthreportedlyamassedby
theMarcosfamilyandcloserelatives,theirnomineesandassociates.Aproposthereto,sheissued

ExecutiveOrderNos.(E.Os.)1,2and14,asamendedbyE.O.14A,allSeriesof1986.E.O.1
createdthePCGGandprovideditwiththetoolsandprocessesitmayavailofintherecovery8/45
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createdthePCGGandprovideditwiththetoolsandprocessesitmayavailofintherecovery
[36]
efforts E.O. No. 2 asserted that the illgotten assets and properties come in the form of
sharesofstocks,etc.whileE.O.No.14conferredontheSandiganbayanexclusiveandoriginal
jurisdictionoverillgottenwealthcases,withtheprovisothattechnicalrulesofprocedureand
evidence shall not be applied strictly to the civil cases filed under the E.O. Pursuant to these
issuances,thePCGGissuednumerousordersofsequestration,amongwhichwerethosehanded
out,asearliermentioned,againstsharesofstockinUCPBpurportedlyownedbyorregisteredin
thenamesof(a)morethanamillioncoconutfarmersand(b)theCIIFcompanies,includingthe
SMC shares held by the CIIF companies. On July 31, 1987, the PCGG instituted before the
SandiganbayanarecoverysuitdocketedthereatasCCNo.0033.

After the filing and subsequent amendments of the complaint in CC 0033, Lobregat,
COCOFEDetal.,andBallaresetal., purportedly representing over a million coconut farmers,
[37]
soughtandwereallowedtointervene. Meanwhile,thefollowingincidents/eventstranspired:

1. On the postulate, inter alia, that its cocofarmer members own at least 51% of the
outstandingcapitalstockofUCPB,theCIIFcompanies,etc.,COCOFEDetal.,onNovember29,
1989, filed Class Action Omnibus Motion praying for the lifting of the orders of sequestration
referredtoaboveandforachancetopresentevidencetoprovethecoconutfarmersownershipof
theUCPBandCIIFshares.Thepleatopresentevidencewasdenied

2.Later,theRepublicmovedforandsecuredapprovalofamotionforseparatetrialwhich
paved the way for the subdivision of the causes of action in CC 0033, each detailing how the
assetssubjectthereofwereacquiredandthekeyrolestheprincipalplayed

3.CivilCase0033,pursuanttoanorderoftheSandiganbayanwouldbesubdividedinto
[38]
eightcomplaints,docketedasCC0033AtoCC0033H.

Lobregat,Ballaresetal.,COCOFED,etal.,onthestrengthoftheirauthoritytointervene
inCC0033,continuedtoparticipateinCC0033Awhereoneoftheissuesraisedwasthemisuse
[39]
ofthenames/identitiesoftheoveramillioncoconutfarmers

4. On February 23, 2001, Lobregat, COCOFED, Ballares et al., filed a Class Action
Omnibus Motion to enjoin the PCGG from voting the sequestered UCPB shares and the SMC
sharesregisteredinthenamesoftheCIIFcompanies.TheSandiganbayan,byOrderofFebruary
28, 2001, granted the motion, sending the Republic to come to this Court on certiorari,
docketedasG.R.Nos.14706264,toannulsaidorderand

5.ByDecisionofDecember14,2001,inG.R.Nos.14706264(Republicv.COCOFED),
[40]
the Court declared the coco levy funds as primafacie public funds. And purchased as the

sequestered UCPB shares were by such funds, beneficial ownership thereon and the corollary
votingrightsprimafaciepertain,accordingtotheCourt,tothegovernment.
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TheinstantproceedingsrevolvearoundCC0033A(Re:AnomalousPurchaseandUseof
[41]
[FUB]now[UCPB]) andCC0033F(Re:AcquisitionofSanMiguelCorporationSharesof
Stock), the first case pivoting mainly on the series of transactions culminating in the alleged
anomalouspurchaseof72.2%ofFUBsoutstandingcapitalstockandthetransferbyPCAofa
portionthereoftoprivateindividuals.COCOFED,etal. and Ballares, et al. participated in CC
No.0033Aasclassactionmovants.

[42] [43]
PetitionersCOCOFEDetal. andUrsua narrateintheirpetitionshowthefarmers
UCPBsharesinquestionendedupinthepossessionofthoseashereunderindicated:

1) The farmers UCPB shares were originally registered in the name of PCA for the
eventual free distribution thereof to and registration in the individual names of the coconut
farmersinaccordancewithPD755andtheIRRthatPCAshallissue

2)PursuanttothestockdistributionproceduressetoutinPCAAdministrativeOrderNo.
[44]
1,s.of1975,(PCAAO1), farmerswhohadpaidtotheCIFunderRA6260andregistered
their COCOFUND (CIF) receipts with PCA were given their corresponding UCPB stock
certificates.AsofJune1976,thecutoffdatefortheextendedregistration,only16millionworth
ofCOCOFUNDreceiptswereregistered,leavingover50millionsharesundistributed
3)PCAwouldlaterpassRes.07478,s.of1978,toallocatethe50millionundistributed
sharesto(a)farmerswhowerealreadyrecipientsthereofand(b)qualifiedfarmerstobeidentified
byCOCOFEDafteranationalcensus.
4)AsofMay1981,some15.6millionshareswerestillheldbyandregisteredinthename
ofCOCOFEDinbehalfofcoconutfarmersfordistributionimmediatelyafterthecompletionof
thenationalcensus,toallthosedeterminedbythePCAtobebonafidecoconutfarmers,butwho
[45]
havenotreceivedthebankshares and

5) Prior to June 1986, a large number of coconut farmers opted to sell all/part of their
UCPB shares below their par value. This prompted the UCPB Board to authorize the CIIF
companiestobuytheseshares.Some40.34millioncommonvotingsharesofUCPBendedup
withtheseCIIFcompaniesalbeitinitiallyregisteredinthenameofUCPB.

Ontheotherhand,thesubjectofCC0033Faretwo(2)blocksofSMCsharesofstock,
the first referring to shares purchased through and registered in the name of the CIIF holding
companies. The purported ownership of the second block of SMC shares is for the nonce
irrelevanttothedispositionofthiscase.Duringthetimematerial,theCIIFblockofSMCshares
represented27%oftheoutstandingcapitalstockofSMC.

CivilCaseNo.0033A

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After the pretrial, but before the Republic, as plaintiff a quo, could present, as it
[46]
committedto,alistofUCPBstockholdersasofFebruary25,1986, amongotherevidence,
COCOFED,etal.,onthepremisethatthesequesteredfarmersUCPBsharesarenotunlawfully
acquired assets, filed in April 2001 their Class Action Motion for a Separate Summary
Judgment. In it, they prayed for a judgment dismissing the complaint in CC 0033A, for the
reason that the over than a million unimpleaded coconut farmers own the UCPB shares. In
March2002,theyfiledClassActionMotionforPartialSeparateTrialontheissueofwhether
saidUCPBshareshavelegitimatelybecometheprivatepropertyofthemillioncoconutfarmers.

Correlatively,theRepublic,onthestrengthoftheDecember14,2001rulinginRepublicv.
[47]
COCOFED andontheargument,amongothers,thattheclaimofCOCOFEDandBallareset
al.overthesubjectUCPBsharesisbasedsolelyonthesupposedCOCOFUNDreceiptsissued
for payment of the R.A. 6260 CIF levy, filed a Motion for Partial Summary Judgment [RE:
COCOFED,etal.andBallares,etal.]datedApril22,2002,prayingthatasummaryjudgmentbe
rendereddeclaring:

a.ThatSection2of[PD]755,Section5,ArticleIIIofP.D.961andSection5,ArticleIIIofP.D.
No.1468areunconstitutional

b. That (CIF) payments under (R.A.) No. 6260 are not valid and legal bases for ownership
claimsoverUCPBsharesand

c.ThatCOCOFED,etal.,andBallares,etal.havenotlegallyandvalidlyobtainedtitleoverthe
subjectUCPBshares.


After an exchange of pleadings, the Republic filed its surrejoinder praying that it be
conclusively held to be the true and absolute owner of the coconut levy funds and the UCPB
[48]
sharesacquiredtherefrom.
Ajointhearingontheseparatemotionsforsummaryjudgmenttodeterminewhatmaterial
[49] [50]
facts exist with or without controversy followed. By Order of March 11, 2003, the
Sandiganbayandetailed,basedonthisCourtsrulinginrelatedcases,thepartiesmanifestations
madeinopencourtandthepleadingsandevidenceonrecord,thefactsitfoundtobewithout

substantialcontroversy,togetherwiththeadmissionsand/orextentoftheadmissionmadebythe
partiesrespectingrelevantfacts,asfollows:
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partiesrespectingrelevantfacts,asfollows:


Asculledfromtheexhaustivediscussionsandmanifestationsofthepartiesinopencourtoftheir
respective pleadings and evidence on record, the facts which exist without any substantial
controversyaresetforthhereunder,togetherwiththeadmissionsand/ortheextentorscopeofthe
admissionsmadebythepartiesrelatingtotherelevantfacts:

1.ThelatePresidentFerdinandE.MarcoswasPresidentfortwoterms...and,duringthesecond
term,declaredMartialLawthroughProclamationNo.1081datedSeptember21,1972.

2. On January 17, 1973, [he] issued Proclamation No. 1102 announcing the ratification of the
1973Constitution.

3. From January 17, 1973 to April 7, 1981, [he] . . .exercised the powers and prerogative of
Presidentunderthe1935ConstitutionandthepowersandprerogativeofPresident...the1973
Constitution.

[He]promulgatedvarious[P.D.s],amongwhichwereP.D.No.232,P.D.No.276,P.D.No.414,
P.D.No.755,P.D.No.961andP.D.No.1468.

4.OnApril17,1981,amendmentstothe1973Constitutionwereeffectedand,onJune30,1981,
[he],afterbeingelectedPresident,reassumedthetitleandexercisedthepowersofthePresident
until25February1986.
5. Defendants Maria Clara Lobregat and Jose R. Eleazar, Jr. were [PCA] Directors during the
period1970to1986.

6.PlaintiffadmitstheexistenceofthefollowingagreementswhichareattachedasAnnexesAand
BtotheOppositiondatedOctober10,2002ofdefendantEduardoM.Cojuangco,Jr.totheabove
citedMotionforPartialSummaryJudgment:

a)Agreementmadeandenteredintothis______dayofMay,1975atMakati,Rizal,Philippines,
byandbetween:

PEDROCOJUANGCO,Filipino,xxx,forandinhisownbehalfandinbehalfofcertain
otherstockholdersofFirstUnitedBanklistedinAnnexAattachedhereto(hereinaftercollectively
calledtheSELLERS)

and

EDUARDO COJUANGCO, JR., Filipino, x x x, represented in this act by his duly
authorizedattorneyinfact,EDGARDOJ.ANGARA,forandinhisownbehalfandinbehalfof
certainotherbuyers,(hereinaftercollectivelycalledtheBUYERS)

WITNESSETH:That

WHEREAS, the SELLERS own of record and beneficially a total of 137,866 shares of
stock,withaparvalueofP100.00each,ofthecommonstockoftheFirstUnitedBank(theBank),a
commercialbankingcorporationexistingunderthelawsofthePhilippines

WHEREAS,theBUYERSdesiretopurchase,andtheSELLERSarewillingtosell,the
aforementioned shares of stock totaling 137,866 shares (hereinafter called the Contract Shares)
ownedbytheSELLERSduetotheirspecialrelationshiptoEDUARDOCOJUANGCO,JR.

NOW,THEREFORE,forandinconsiderationofthepremisesandthemutualcovenants
hereincontained,thepartiesagreeasfollows:

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1.SaleandPurchaseofContractShares

SubjecttothetermsandconditionsofthisAgreement,theSELLERSherebysell,assign,
transfer and convey unto the BUYERS, and the BUYERS hereby purchase and acquire, the
ContractSharesfreeandclearofallliensandencumbrancesthereon.

2.ContractPrice

ThepurchasepricepershareoftheContractSharespayablebytheBUYERSisP200.00or
anaggregatepriceofP27,573,200.00(theContractPrice).

3.Deliveryof,andpaymentfor,stockcertificates

UpontheexecutionofthisAgreement,(i)theSELLERSshalldelivertotheBUYERS
the stock certificates representing the Contract Shares, free and clear of all liens,
encumbrances,obligations,liabilitiesandotherburdensinfavoroftheBankorthirdparties,
dulyendorsedinblankorwithstockpowerssufficienttotransferthesharestobearerand(ii)
BUYERSshalldelivertotheSELLERSP27,511,295.50representingtheContractPriceless
theamountofstocktransfertaxespayablebytheSELLERS,whichtheBUYERSundertaketo
remittotheappropriateauthorities.(Emphasisadded.)

4.RepresentationandWarrantiesofSellers

TheSELLERSrespectivelyandindependentlyofeachotherrepresentandwarrantthat:

(a)TheSELLERSarethelawfulownersof,withgoodmarketabletitleto,theContract
Sharesandthat(i)thecertificatestobedeliveredpursuanttheretohavebeenvalidlyissuedandare
fullypaidandnoassessable(ii)theContractSharesarefreeandclearofallliens,encumbrances,
obligations,liabilitiesandotherburdensinfavoroftheBankorthirdparties

This representation shall survive the execution and delivery of this Agreement and the
consummationortransferherebycontemplated.

(b)Theexecution,deliveryandperformanceofthisAgreementbytheSELLERSdoesnot
conflictwithorconstituteanybreachofanyprovisioninanyagreementtowhichtheyareaparty
orbywhichtheymaybebound.

(c)TheyhavecompliedwiththeconditionsetforthinArticleXoftheAmendedArticles
ofIncorporationoftheBank.

5.RepresentationofBUYERS.

6.Implementation

Thepartiesheretoherebyagreetoexecuteorcausetobeexecutedsuchdocumentsand
instrumentsasmayberequiredinordertocarryouttheintentandpurposeofthisAgreement.

7.Notices.

INWITNESSWHEREOF,thepartiesheretohavehereuntosettheirhandsattheplaceandonthe
datefirstabovewritten.



PEDROCOJUANGCOEDUARDOCOJUANGCO,JR.
(onhisownbehalfandin(onhisownbehalfandinbehalf
behalfoftheotherSellersoftheotherBuyers)
listedinAnnexAhereof)(BUYERS)
(SELLERS)
By:

EDGARDOJ.ANGARA
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EDGARDOJ.ANGARA
AttorneyinFact


b)AgreementfortheAcquisitionofaCommercialBankfortheBenefitoftheCoconutFarmersof
thePhilippines,madeandenteredintothis25th dayofMay1975atMakati,Rizal,Philippines,by
andbetween:

EDUARDOM.COJUANGCO,JR.,xxx,hereinafterreferredtoastheSELLER

and

PHILIPPINE COCONUT AUTHORITY, a public corporation created by Presidential
DecreeNo.232,asamended,foritselfandforthebenefitofthecoconutfarmersofthePhilippines,
(hereinaftercalledtheBUYER)

WITNESSETH:That

WHEREAS, on May 17, 1975, the Philippine Coconut Producers Federation (PCPF),
throughitsBoardofDirectors,expressedthedesireofthecoconutfarmerstoownacommercial
bank which will be an effective instrument to solve the perennial credit problems and, for that
purpose,passedaresolutionrequestingthePCAtonegotiatewiththeSELLERforthetransferto
thecoconutfarmersoftheSELLERsoptiontobuytheFirstUnitedBank(theBank)undersuch
termsandconditionsasBUYERmaydeemtobeinthebestinterestofthecoconutfarmersand
instructedMrs.MariaClaraLobregattoconveysuchrequesttotheBUYER

WHEREAS, the PCPF further instructed Mrs. Maria Clara Lobregat to make
representationswiththeBUYERtoutilizeitsfundstofinancethepurchaseoftheBank

WHEREAS, the SELLER has the exclusive and personal option to buy 144,400 shares
(theOptionShares)oftheBank,constituting72.2%ofthepresentoutstandingsharesofstockof
theBank,atthepriceofP200.00pershare,whichoptiononlytheSELLERcanvalidlyexercise

WHEREAS,inresponsetotherepresentationsmadebythecoconutfarmers,theBUYER
hasrequestedtheSELLERtoexercisehispersonaloptionforthebenefitofthecoconutfarmers

WHEREAS,theSELLERiswillingtotransfertheOptionSharestotheBUYERataprice
equaltohisoptionpriceofP200pershare

WHEREAS,recognizingthatownershipbythecoconutfarmersofacommercialbankisa
permanent solution to their perennial credit problems, that it will accelerate the growth and
developmentofthecoconutindustryandthatthepolicyofthestatewhichtheBUYERisrequired
to implement is to achieve vertical integration thereof so that coconut farmers will become
participantsin,andbeneficiariesof,therequestofPCPFthatitacquireacommercialbanktobe
owned by the coconut farmers and, appropriated, for that purpose, the sum of P150 Million to
enable the farmers to buy the Bank and capitalize the Bank to such an extension as to be in a
positiontoadoptacreditpolicyforthecoconutfarmersatpreferentialrates
WHEREAS, x x x the BUYER is willing to subscribe to additional shares (Subscribed
Shares) and place the Bank in a more favorable financial position to extend loans and credit
facilitiestococonutfarmersatpreferentialrates

NOW, THEREFORE, for and in consideration of the foregoing premises and the other
termsandconditionshereinaftercontained,thepartiesherebydeclareandaffirmthattheirprincipal
contractual intent is (1) to ensure that the coconut farmers own at least 60% of the outstanding
capitalstockoftheBankand(2)thattheSELLERshallreceivecompensationforexercisinghis
personal and exclusive option to acquire the Option Shares, for transferring such shares to the
coconutfarmersattheoptionpriceofP200pershare,andforperformingthemanagementservices
requiredofhimhereunder.

1.ToensurethatthetransfertothecoconutfarmersoftheOptionSharesiseffectedwith
theleastpossibledelayandtoprovideforthefaithfulperformanceoftheobligationsoftheparties
hereunder, the parties hereby appoint the Philippine National Bank as their escrow agent (the
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hereunder, the parties hereby appoint the Philippine National Bank as their escrow agent (the
EscrowAgent).

UponexecutionofthisAgreement,theBUYERshalldepositwiththeEscrowAgentsuch
amountasmaybenecessarytoimplementthetermsofthisAgreement.

2. As promptly as practicable after execution of this Agreement, the SELLER shall
exercisehisoptiontoacquiretheOptionShareandSELLERshallimmediatelythereafterdeliver
andturnovertotheEscrowAgentsuchstockcertificatesasarehereinprovidedtobereceivedfrom
theexistingstockholdersoftheBankbyvirtueoftheexerciseontheaforementionedoption.

3.ToensurethestabilityoftheBankandcontinuityofmanagementandcreditpoliciesto
beadoptedforthebenefitofthecoconutfarmers,thepartiesundertaketocausethestockholders
andtheBoardofDirectorsoftheBanktoauthorizeandapproveamanagementcontractbetween
theBankandtheSELLERunderthefollowingterms:

(a)Themanagementcontractshallbeforaperiodoffive(5)years,renewableforanother
five(5)yearsbymutualagreementoftheSELLERandtheBank

(b) The SELLER shall be elected President and shall hold office at the pleasure of the
BoardofDirectors.Whileservinginsuchcapacity,heshallbeentitledtosuchsalariesand
emolumentsastheBoardofDirectorsmaydetermine

(c)TheSELLERshallrecruitanddevelopaprofessionalmanagementteamtomanageand
operatetheBankunderthecontrolandsupervisionoftheBoardofDirectorsoftheBank

(d)TheBUYERundertakestocausethree(3)personsdesignatedbytheSELLERtobe
electedtotheBoardofDirectorsoftheBank

(e)TheSELLERshallreceivenocompensationformanagingtheBank,otherthansuch
salaries or emoluments to which he may be entitled by virtue of the discharge of his
functionanddutiesasPresident,providedand

(f) The management contract may be assigned to a management company owned and
controlledbytheSELLER.

4.AscompensationforexercisinghispersonalandexclusiveoptiontoacquiretheOption
Shares and for transferring such shares to the coconut farmers, as well as for performing the
managementservicesrequiredofhim,SELLERshallreceiveequityintheBankamounting,inthe
aggregate,to95,304fullypaidsharesinaccordancewiththeproceduresetforthinparagraph6
below

5.InordertocomplywiththeCentralBankprogramforincreasedcapitalizationofbanks
andtoensurethattheBankwillbeinamorefavorablefinancialpositiontoattainitsobjectiveto
extendtothecoconutfarmersloansandcreditfacilities,theBUYERundertakestosubscribeto
shareswithanaggregateparvalueofP80,864,000(theSubscribedShares).Theobligationofthe
BUYERwithrespecttotheSubscribedSharesshallbeasfollows:

(a)TheBUYERundertakestosubscribe,forthebenefitofthecoconutfarmers,toshares
with an aggregate par value of P15,884,000 from the present authorized but unissued
sharesoftheBankand

(b)TheBUYERundertakestosubscribe,forthebenefitofthecoconutfarmers,toshares
withanaggregateparvalueofP64,980,000fromtheincreasedcapitalstockoftheBank,
whichsubscriptionsshallbedeemedmadeupontheapprovalbythestockholdersofthe
increaseoftheauthorizedcapitalstockoftheBankfromP50MilliontoP140Million.

The parties undertake to declare stock dividends of P8 Million out of the present
authorizedbutunissuedcapitalstockofP30Million.

6.TocarryintoeffecttheagreementofthepartiesthattheSELLERshallreceiveashis
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6.TocarryintoeffecttheagreementofthepartiesthattheSELLERshallreceiveashis
compensation95,304shares:

(a).

(b)WithrespecttotheSubscribedShares,theBUYERundertakes,inordertopreventthe
dilutionofSELLERsequityposition,thatitshallcedeovertotheSELLER64,980fully
paidsharesoutoftheSubscribedShares.Suchundertakingshallbecompliedwithinthe
followingmanner:.


7.ThepartiesfurtherundertakethattheBoardofDirectorsandmanagementoftheBank
shall establish and implement a loan policy for the Bank of making available for loans at
preferentialratesofinteresttothecoconutfarmers.

8.TheBUYERshallexpeditiouslydistributefromtimetotimethesharesoftheBank,that
shallbeheldbyitforthebenefitofthecoconutfarmersofthePhilippinesundertheprovisionsof
this Agreement, to such, coconut farmers holding registered COCOFUND receipts on such
equitablebasisasmaybedeterminebytheBUYERinitssounddiscretion.

9..

10.Toensurethatnotonlyexistingbutfuturecoconutfarmersshallbeparticipantsinand
beneficiariesofthecreditpolicies,andshallbeentitledtothebenefitofloansandcreditfacilities
tobeextendedbytheBanktococonutfarmersatpreferentialrates,thesharesheldbythecoconut
farmers shall not be entitled to preemptive rights with respect to the unissued portion of the
authorizedcapitalstockoranyincreasethereof.

11.Afterthepartiesshallhaveacquiredtwothirds(2/3)oftheoutstandingsharesofthe
Bank,thepartiesshallcallaspecialstockholdersmeetingoftheBank:

(a)ToclassifythepresentauthorizedcapitalstockofP50,000,000dividedinto500,000
shares, with a par value of P100.00 per share into: 361,000 Class A shares, with an
aggregate par value of P36,100,000 and 139,000 Class B shares, with an aggregate par
value of P13,900,000. All of the Option Shares constituting 72.2% of the outstanding
shares, shall be classified as Class A shares and the balance of the outstanding shares,
constituting27.8%oftheoutstandingshares,asClassBshares

(b)ToamendthearticlesofincorporationoftheBanktoeffectthefollowingchanges:

(i)changeofcorporatenametoFirstUnitedCoconutBank

(ii)replacethepresentprovisionrestrictingthetransferabilityoftheshareswitha
limitationonownershipbyanyindividualorentitytonotmorethan10%ofthe
outstandingsharesoftheBank

(iii)providethattheholdersofClassAsharesshallnotbeentitledtopreemptive
rightswithrespecttotheunissuedportionoftheauthorizedcapitalstockorany
increasethereofand

(iv)providethattheholdersofClassBsharesshallbeabsolutelyentitledtopre
emptiverights,withrespecttotheunissuedportionofClassBsharescomprising
partoftheauthorizedcapitalstockoranyincreasethereof,tosubscribetoClassB
shares in proportion t the subscriptions of Class A shares, and to pay for their
subscriptionstoClassBshareswithinaperiodoffive(5)yearsfromthecallof
theBoardofDirectors.

(c) To increase the authorized capital stock of the Bank from P50 Million to P140
Million.

(d)TodeclareastockdividendofP8MillionpayabletotheSELLER,theBUYERand
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otherstockholdersoftheBankoutofthepresentauthorizedbutunissuedcapitalstockof
P30Million

(e)ToamendthebylawsoftheBankaccordinglyand

(f)Toauthorizeandapprovethemanagementcontractprovidedinparagraph2above.

The parties agree that they shall vote their shares and take all the necessary corporate
actioninordertocarryintoeffecttheforegoingprovisionsofthisparagraph11.

12.ItisthecontemplationofthepartiesthattheBankshallachieveafinancialandequity
positiontobeabletolendtothecoconutfarmersatpreferentialrates.

In order to achieve such objective, the parties shall cause the Bank to adopt a policy of
reinvestment,bywayofstockdividends,ofsuchpercentageoftheprofitsoftheBankasmaybe
necessary.

13.Thepartiesagreetoexecuteorcausetobeexecutedsuchdocumentsandinstruments
asmayberequiredinordertocarryouttheintentandpurposeofthisAgreement.


INWITNESSWHEREOF,

PHILIPPINECOCONUTAUTHORITY
(BUYER)

By:

EDUARDOCOJUANGCO,JR.MARIACLARAL.LOBREGAT
(SELLER)

7.DefendantsLobregat,etal.andCOCOFED,etal.andBallares,etal.admitthatthe(PCA)was
theotherbuyersrepresentedby.Cojuangco,Jr.intheMay1975Agreemententeredintobetween
Pedro Cojuangco (on his own behalf and in behalf of other sellers listed in Annex A of the
agreement)andCojuangco,Jr.(onhisownbehalfandinbehalfoftheotherbuyers).Defendant
CojuangcoinsistshewastheonlybuyerundertheaforesaidAgreement.

8...

9.DefendantsLobregat,etal.,andCOCOFED,etal.,andBallares,etal.admitthatinadditionto
the 137,866 FUB shares of Pedro Cojuangco, et al. covered by the Agreement, other FUB
stockholders sold their shares to PCA such that the total number of FUB shares purchased by
PCAincreasedfrom137,866sharesto144,400shares,theOPTIONSHARESreferredtointhe
Agreement of May 25, 1975.Defendant Cojuangco did not make said admission as to the said
6,534sharesinexcessofthe137,866sharescoveredbytheAgreementwithPedroCojuangco.

10. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit that the
Agreement,describedinSection1ofPresidentialDecree(P.D.)No.755datedJuly29,1975as
the Agreement for the Acquisition of a Commercial Bank for the Benefit of Coconut Farmers
executedbythePhilippineCoconutAuthorityandincorporatedinSection1ofP.D.No.755by
reference,referstotheAGREEMENTFORTHEACQUISITIONOFACOMMERCIALBANK
FOR THE BENEFIT OF THE COCONUT FARMERS OF THE PHILIPPINES dated May 25,
1975 between defendant Eduardo M. Cojuangco, Jr. and the [PCA] (Annex B for defendant

Cojuangcos OPPOSITION TO PLAINTIFFS MOTION FOR PARTIAL SUMMARY


JUDGMENT[RE:EDUARDOM.COJUANGCO,JR.]datedSeptember18,2002).

Plaintiffrefusedtomakethesameadmission.
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Plaintiffrefusedtomakethesameadmission.

11.theCourttakesjudicialnoticethatP.D.No.755waspublished[in]volume71oftheOfficial
GazettebutthetextoftheagreementwasnotsopublishedwithP.D.No.755.

12.DefendantsLobregat,etal.andCOCOFED,etal.andBallares,etal.admitthatthePCAused
public funds, in the total amount of P150 million, to purchase the FUB shares amounting to
72.2%oftheauthorizedcapitalstockoftheFUB,althoughthePCAwaslaterreimbursedfrom
thecoconutlevyfundsandthatthePCAsubscriptionintheincreasedcapitalizationoftheFUB,
whichwaslaterrenamedthe(UCPB),camefromthesaidcoconutlevyfunds.

13.PursuanttotheMay25,1975Agreement,outofthe72.2%sharesoftheauthorizedandthe
increasedcapitalstockoftheFUB(laterUCPB),entirelypaidforbyPCA,64.98%oftheshares
wereplacedinthenameofthePCAforthebenefitofthecoconutfarmersand7,22%weregiven
todefendantCojuangco.Theremaining27.8%sharesofstockintheFUBwhichlaterbecamethe
UCPB were not covered by the two (2) agreements referred to in item no. 6, par. (a) and (b)
above.

There were shares forming part of the aforementioned 64.98% which were later sold or
transferredtononcoconutfarmers.

14.UndertheMay27,1975Agreement,defendantCojuangcosequityintheFUB(nowUCPB)
wastenpercent(10%)ofthesharesofstockacquiredbythePCAforthebenefitofthecoconut
farmers.

15. That the fully paid 95.304 shares of the FUB, later the UCPB, acquired by defendant
Cojuangco,Jr.pursuanttotheMay25,1975AgreementwerepaidforbythePCAinaccordance
withthetermsandconditionsprovidedinthesaidAgreement.

16.DefendantsLobregat,etal.andCOCOFED,etal.andBallares,etal.admitthattheaffidavits
ofthecoconutfarmers(specifically,Exhibit1Farmerto70Farmer)uniformlystatethat:


a.theyarecoconutfarmerswhosoldcoconutproducts
b.inthesalethereof,theyreceivedCOCOFUNDreceiptspursuanttoR.A.No.6260
c.theyregisteredthesaidCOCOFUNDreceiptsand
d. by virtue thereof, and under R.A. No. 6260, P.D. Nos. 755, 961 and 1468, they are
allegedlyentitledtothesubjectUCPBshares.

butsubjecttothefollowingqualifications:

a. there were other coconut farmers who received UCPB shares although they did not
present said COCOFUND receipt because the PCA distributed the unclaimed
UCPB shares not only to those who already received their UCPB shares in
exchange for their COCOFUND receipts but also to the coconut farmers
determined by a national census conducted pursuant to PCA administrative
issuances

b. [t]here were other affidavits executed by Lobregat, Eleazar, Ballares and Aldeguer
relativetothesaiddistributionoftheunclaimedUCPBsharesand

c.thecoconutfarmersclaimtheUCPBsharesbyvirtueoftheircompliancenotonlywith
the laws mentioned in item (d) above but also with the relevant issuances of the
PCAsuchas,PCAAdministrativeOrderNo.1,datedAugust20,1975(Exh.298
Farmer)PCAResolutionNo.03378datedFebruary16,1978.
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Theplaintiffdidnotmakeanyadmissionastotheforegoingqualifications.

17.DefendantsLobregat,etal. and COCOFED, etal. and Ballares, etal. claim that the UCPB
shares in question have legitimately become the private properties of the 1,405,366 coconut
farmers solely on the basis of their having acquired said shares in compliance with R.A. No.
6260,P.D.Nos.755,961and1468andtheadministrativeissuancesofthePCAcitedabove.

18...


On July 11, 2003, the Sandiganbayan issued the assailed PSJA finding for the Republic, the
judgment accentuated by (a) the observation that COCOFED has all along manifested as
representingoveramillioncoconutfarmersand(b)adeclarationontheissueofownershipof
UCPB shares and the unconstitutionality of certain provisions of P.D. No. 755 and its
implementingregulations.Onthematterofownershipinparticular,theantigraftcourtdeclared
that the 64.98% sequestered Farmers UCPB shares, plus other shares paid by PCA are
conclusivelyownedbytheRepublic.Initspertinentparts,PSJA,resolvingtheseparatemotions
forsummaryjudgmentinseriatimwithseparatedispositiveportionsforeach,reads:

WHEREFORE,inviewoftheforegoing,weruleasfollows:


A.Re:CLASSACTIONMOTIONFORASEPARATESUMMARYJUDGMENTdatedApril
11,2001filedbyDefendantMariaClaraL.Lobregat,COCOFED,etal.,andBallares,etal.

TheClassActionMotionforSeparateSummaryJudgmentdatedApril11,2001filedby
defendantMariaClaraL.Lobregat,COCOFED,etal.andBallares,etal.,isherebyDENIEDfor
lackofmerit.

B. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: COCOFED, ET AL. AND
BALLARES,ETAL.)datedApril22,2002filedbyPlaintiff.

1. a.Section 1 of P.D. No. 755, taken in relation to Section 2 of the same P.D., is
unconstitutional:(i)forhavingallowedtheuseoftheCCSFtobenefitdirectlyprivate
interest by the outright and unconditional grant of absolute ownership of the
FUB/UCPBsharespaidforbyPCAentirelywiththeCCSFtotheundefinedcoconut
farmers,whichnegatedorcircumventedthenationalpolicyorpublicpurposedeclared
byP.D.No.755toacceleratethegrowthanddevelopmentofthecoconutindustryand
achieveitsverticalintegrationand(ii)forhavingundulydelegatedlegislativepower
tothePCA.

b. The implementing regulations issued by PCA, namely, Administrative Order No. 1,
Seriesof1975andResolutionNo.07478arelikewiseinvalidfortheirfailuretosee

toitthatthedistributionofsharesserveexclusivelyoratleastprimarilyordirectlythe
aforementionedpublicpurposeornationalpolicydeclaredbyP.D.No.755.

2. Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall not be
considered special and/or fiduciary funds nor part of the general funds of the national
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considered special and/or fiduciary funds nor part of the general funds of the national
government and similar provisions of Sec. 5, Art. III, P.D. No. 961 and Sec. 5, Art. III,
P.D.No.1468contravenetheprovisionsoftheConstitution,particularly,Art.IX(D),Sec.
2andArticleVI,Sec.29(3).

3.Lobregat,COCOFED,etal.andBallares,etal.havenotlegallyandvalidlyobtainedtitle
of ownership over the subject UCPB shares by virtue of P.D. No. 755, the Agreement
datedMay25,1975betweenthePCAanddefendantCojuangco,andPCAimplementing
rules,namely,Adm.OrderNo.1,s.1975andResolutionNo.07478.

4. The socalled Farmers UCPB shares covered by 64.98% of the UCPB shares of stock,
whichformedpartofthe72.2%ofthesharesofstockoftheformerFUBandnowofthe
UCPB, the entire consideration of which was charged by PCA to the CCSF, are hereby
declaredconclusivelyownedby,thePlaintiffRepublicofthePhilippines.

C. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M.

COJUANGCO,JR.)datedSeptember18,2002filedbyPlaintiff.

1. Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and defendant
EduardoM.Cojuangco,Jr.datedMay25,1975nordiditgivetheAgreementthebinding
forceofalawbecauseofthenonpublicationofthesaidAgreement.

2.RegardingthequestionedtransferofthesharesofstockofFUB(laterUCPB)byPCAto
defendantCojuangcoorthesocalledCojuangcoUCPBshareswhichcostthePCAmore
than Ten Million Pesos in CCSF in 1975, we declare, that the transfer of the following
FUB/UCPBsharestodefendantEduardoM.Cojuangco,Jr.wasnotsupportedbyvaluable
consideration,andthereforenullandvoid:

a.The14,400sharesfromtheOptionShares

b.AdditionalBankSharesSubscribedandPaidbyPCA,consistingof:

1. Fifteen Thousand Eight Hundred EightyFour (15,884) shares out of the
authorizedbutunissuedsharesofthebank,subscribedandpaidbyPCA

2. Sixty Four Thousand Nine Hundred Eighty (64,980) shares of the increased
capitalstocksubscribedandpaidbyPCAand

3.Stockdividendsdeclaredpursuanttoparagraph5andparagraph11(iv)(d)ofthe
Agreement.

3. The abovementioned shares of stock of the FUB/UCPB transferred to defendant
CojuangcoareherebydeclaredconclusivelyownedbytheRepublicofthePhilippines.

4. The UCPB shares of stock of the alleged fronts, nominees and dummies of defendant
EduardoM.Cojuangco,Jr.whichformpartofthe72.2%sharesoftheFUB/UCPBpaid
forbythePCAwithpublicfundslaterchargedtothecoconutlevyfunds,particularlythe
CCSF, belong to the plaintiff Republic of the Philippines as their true and beneficial
owner.

LettrialofthisCivilCaseproceedwithrespecttotheissueswhichhavenotbeendisposed
ofinthisPartialSummaryJudgment.Forthispurpose,theplaintiffsMotionAdCautelam
toPresentAdditionalEvidencedatedMarch28,2001isherebyGRANTED.


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FromPSJA,LobregatmovedforreconsiderationwhichCOCOFED,etal.andBallares,
[51]
et al. adopted. All these motions were denied in the extended assailed Resolution of
December28,2004.

CivilCaseNo.0033F

Here,theRepublic,afterfilingitspretrialbrief,interposedaMotionforJudgmentonthe
Pleadings and/or for [PSJ] (Re: Defendants CIIF Companies, 14 Holding Companies and
COCOFED,etal.)prayingthat,inlightofthepartiessubmissionsandthesuperveningrulingin
[52]
Republicv.COCOFED whichleftcertainfactsbeyondquestion,ajudgmentissue:

1)DeclaringSection5ofArticleIIIofP.D.No.961(CoconutIndustryCode)andSection5of
ArticleIIIofP.D.No.1468(RevisedCoconutIndustryCode)tobeunconstitutional

2)DeclaringthatCIFpaymentsunderRANo.6260arenotvalidandlegalbasesforownership
claimsovertheCIIFcompaniesand,ultimately,theCIIFblockofSMCsharesand

3) OrderingthereconveyanceoftheCIIFcompanies,the14holdingcompanies,andthe27%
CIIF block of San Miguel Corporation shares of stocks in favor of the government and
declaring the ownership thereof to belong to the government in trust for all the coconut
farmers.

Atthisjuncture,itmaybestatedthat,visvisCC0033F,GabayFoundation,Inc.sought
butwasdeniedleavetointervene.ButpetitionersCOCOFED,etal.movedandwereallowedto
[53]
intervene onthebasisoftheirclaimthatCOCOFEDmembersbeneficiallyowntheblockof
SMC shares held by the CIIF companies, at least 51% of whose capitol stock such members
own.Theclaim,astheOSGexplained,arosefromtheinterplayofthefollowing:(a)COCOFED
[54] [55]
et al.s alleged majority ownership of the CIIF companies under Sections 9 and 10 of
P.D.No.1468,and(b)theirallegedentitlementtosharesintheCIIFcompaniesbyvirtueoftheir
supposed registration of COCOFUND receipts allegedly issued to COCOFED members upon
[56]
paymentoftheR.A.6260CIFlevy.

JustasinCCNo.0033A,theSandiganbayanalsoconductedahearinginCCNo.0033F
todeterminefactsthatappearedwithoutsubstantialcontroversyasculledfromtherecordsand,
[57]
byOrder ofFebruary23,2004,outlinedthosefacts.
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byOrder ofFebruary23,2004,outlinedthosefacts.
OnMay7,2004,theSandiganbayan,inlightofitsrulinginCCNo.0033Aanddisposing
oftheissueonownershipoftheCIIFoilandholdingcompaniesandtheirentireblockofsubject
SMC shares, issued the assailed PSJF also finding for the Republic, the fallo of which
pertinentlyreading:

WHEREFORE,inviewoftheforegoing,weholdthat:

The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14
Holding Companies and Cocofed et al.) filed by Plaintiff is hereby GRANTED.
ACCORDINGLY,THECIIFCOMPANIES,namely:

1.SouthernLuzonCoconutOilMills(SOLCOM)
2.CagayandeOroOilCo.,Inc.(CAGOIL)
3.IliganCoconutIndustries,Inc.(ILICOCO)
4.SanPabloManufacturingCorp.(SPMC)
5.GranexportManufacturingCorp.(GRANEX)and
6.LegaspiOilCo.,Inc.(LEGOIL),

ASWELLASTHE14HOLDINGCOMPANIES,NAMELY:

1.SorianoShares,Inc.
2.ACSInvestors,Inc.
3.RoxasShares,Inc.
4.ArcInvestors,Inc.
5.TodaHoldings,Inc.
6.APHoldings,Inc.
7.FernandezHoldings,Inc.
8.SMCOfficersCorps,Inc.
9.TeDeumResources,Inc.
10.AngloVentures,Inc.
11.RandyAlliedVentures,Inc.
12.RockSteelResources,Inc.
13.ValhallaPropertiesLtd.,Inc.and
14.FirstMeridianDevelopment,Inc.


AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK
TOTALLING 33,133,266 SHARES AS OF 1983 ARE DECLARED OWNED BY THE
GOVERNMENT IN TRUST FOR ALL THE COCONUT FARMERS GOVERNMENT AND
[58]
ORDERDED RECONVEYED TO THE GOVERNMENT. (Emphasis and capitalization in
theoriginalunderscoringadded.)

LetthetrialofthisCivilCaseproceedwithrespecttotheissueswhichhavenotbeendisposedof
in this Partial Summary Judgment, including the determination of whether the CIIF Block of
SMC Shares adjudged to be owned by the Government represents 27% of the issued and
outstanding capital stock of SMC according to plaintiff or to 31.3% of said capital stock
accordingtoCOCOFED,etalandBallares,etal.

SOORDERED.
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SOORDERED.


Expressly covered by the declaration and the reconveyance directive are all dividends
declared,paidandissuedthereonaswellasanyincrementstheretoarisingfrom,butnotlimited
to,exerciseofpreemptiverights.

On May 26, 2004, COCOFED et al., filed an omnibus motion (to dismiss for lack of
subjectmatterjurisdictionoralternativelyforreconsiderationandtosetcasefortrial),butthis
[59]
motionwasdeniedpertheSandiganbayansResolution ofDecember28,2004.

[60]
On May 11, 2007, in CC 0033A, the Sandiganbayan issued a Resolution denying
LobregatsandCOCOFEDsseparatemotionstosetthecasefortrial/hearing,notingthatthereis
no longer any point in proceeding to trial when the issue of their claim of ownership of the
sequesteredUCPBsharesandrelatedsubissueshavealreadybeenresolvedinPSJA.

Foreaseofreference,PSJAandPSJFeachoriginallydecreedtrialorfurtherhearingon
[61]
issuesyettobedisposedof.However,theResolution issuedonJune5,2007inCC0033A
[62]
and the Resolution of May 11, 2007 rendered in CC 0033F effectively modified the
underlying partial summary judgments by deleting that portions on the necessity of further
trialontheissueofownershipof(1)thesequesteredUCPBshares,(2)theCIIFblockof
SMCsharesand(3)theCIIFcompanies.Astheantigraftcourtstressedinbothresolutions,
[63]
thesaidissueofownershiphasbeenfinallyresolvedinthecorrespondingPSJs.

Hence,theinstantpetitions.

TheIssues

COCOFEDetal.,inG.R.Nos.17785758,imputereversibleerrorontheSandiganbayanfor(a)
assumingjurisdictionoverCCNos.0033Aand0033FdespitetheRepublicsfailuretoestablish
below the jurisdictional facts, i.e., that the sequestered assets sought to be recovered are ill
gotten in the context of E.O. Nos. 1, 2, 14 and 14A (b) declaring certain provisions of coco
levyissuancesunconstitutionaland(c)denyingthepetitionerspleatoprovethatthesequestered
assetsbelongtococonutfarmers.Specifically,petitionersaver:

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I.TheSandiganbayangravelyerredwhenitrefusedtoacknowledgethatitdidnothavesubject
matter jurisdiction over the illgotten wealth cases because the respondent Republic failed to
prove, and did not even attempt to prove, the jurisdictional fact that the sequestered assets
constitute illgotten wealth of former President Marcos and Cojuangco. Being without subject
matterjurisdictionovertheillgottenwealthcases,adefectpreviouslypointedoutandrepeatedly
assailedbyCOCOFED,etal.,theassailedPSJsandtheassailedResolutionsareallnullandvoid.

A.Insofarastheillgottenwealthcasesareconcerned,theSandiganbayanssubjectmatter
jurisdictionislimitedtotherecoveryofillgottenwealthasdefinedinEos1,2,14and14
A. Consistent with that jurisdiction, the subdivided complaints in the illgotten wealth
casesexpresslyallegedthatthesequesteredassetsconstitutesillgottenwealthofformer
PresidentMarcosandCojuangco,havingbeenfiledpursuantto,andinconnectionwith,
Eos1,2,14and14A,theSandiganbayangravelyerred,ifnotexceededitsjurisdiction,
when it refused to require the respondent Republic to prove the aforesaid jurisdictional
fact.

B..Havingnoevidenceonrecordtoprovethesaidjurisdictionalfact,theSandiganbayan
gravely erred, if not grossly exceeded its statutory jurisdiction, when it rendered the
assailedPSJsinsteadofdismissingtheillgottenwealthcases.

C.UnderSection1ofRule9oftheRulesofCourt,lackofjurisdictionoverthesubject
matter may be raised at any stage of the proceedings. In any event, in pursuing its
intervention in the illgotten wealth cases, COCOFED, et al precisely questioned the
Sandiganbayans subject matter jurisdiction, asserted that the jurisdictional fact does not
exist, moved to dismiss the illgotten wealth cases and even prayed that the writs of
sequestration over the sequestered assets be lifted. In concluding that those actions
constituteaninvocation of its jurisdiction, the Sandiganbayan clearly acted whimsically,
capriciouslyandingraveabuseofitsdiscretion.

II.Through the assailed PSJs and the assailed Resolutions, the Sandiganbayan declared certain
provisions of the coconut levy laws as well as certain administrative issuances of the PCA as
unconstitutional.Indoingso,theSandiganbayanerroneouslyemployed,ifnotgrosslyabused,its
powerofjudicialreview.

A.theSandiganbayangravelyerred,ifnotbrazenlyexceededitsstatutoryjurisdictionand
abusedthejudicialpowers,whenitconcludedthatthepublicpurposeofcertaincoconut
levy laws was not evident, when it thereupon formulated its own public policies and
purposesforthecoconutlevylawsandatthesametimedisregardedthenationalpolicies
specificallyprescribedtherein.

B.Inrulingthatitisnotclearorevidenthowthemeansemployedbythe[coconutlevy]
laws would serve the avowed purpose of the law or can serve a public purpose, the
Sandiganbayan erroneously examined, determined and evaluated the wisdom of such
laws,aconstitutionalpowerwithintheexclusiveprovinceofthelegislativedepartment.

C.TheSandiganbayangravelyerredindeclaringSection1ofPD755,PCA[AO]1and
PCAResolutionNo.07478constitutionallyinfirmbyreasonofallegedbutunprovenand
unsubstantiatedflawsintheirimplementation.

D.TheSandiganbayangravelyerredinconcludingthatSection1ofPD755constitutesan
unduedelegationoflegislativepowerinsofarasitauthorizesthePCAtopromulgaterules
and regulations governing the distribution of the UCPB shares to the coconut farmers.
Rather, taken in their proper context, Section 1 of PD 755 was complete in itself, [and]
prescribedsufficientstandardsthatcircumscribedthediscretionofthePCA.
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prescribedsufficientstandardsthatcircumscribedthediscretionofthePCA.

More importantly, this Honorable Court has, on three (3) separate occasions,
rejected respondent Republics motion to declare the coconut levy laws
unconstitutional. The Sandiganbayan gravely erred, if not acted in excess of its
jurisdiction, when it ignored the settled doctrines of law of the case and/or stare decisis
and granted respondent Republics fourth attempt to declare the coconut levy laws
unconstitutional,despitefactthatsuchdeclarationofunconstitutionalitywasnotnecessary
toresolvetheultimateissueofownershipinvolvedintheillgottenwealthcases.

III.InrenderingtheassailedPSJsandthereafterrefusingtoproceedtotrialonthemerits,onthe
mere sayso of the respondent Republic, the Sandiganbayan committed gross and irreversible
error,gravelyabuseditsjudicialdiscretionandflagrantlyexceededitsjurisdictionasiteffectively
sanctioned the taking of COCOFED, et al.s property by the respondent Republic without due
processoflawandthroughretroactiveapplicationofthedeclarationofunconstitutionalityofthe
coconut levy laws, an act that is not only illegal and violative of the settled Operative Fact
Doctrinebut,moreimportantly,inequitabletothecoconutfarmerswhoseonlypossiblemistake,
offenseormisfortunewastofollowthelaw.

A..

1.Inthecourseofthealmosttwenty(20)yearsthattheillgottenwealthcaseswere
pending, COCOFED, et al. repeatedly asked to be allowed to present evidence to
prove that the true, actual and beneficial owners of the sequestered assets are the
coconutfarmersandnotCojuangco,anallegedcronyofformerPresidentMarcos.The
Sandiganbayan grievously erred and clearly abused its judicial discretion when it
repeatedlyandcontinuouslydeniedCOCOFED,etal.theopportunitytopresenttheir
evidence to disprove the baseless allegations of the IllGotten Wealth Cases that the
sequestered assets constitute illgotten wealth of Cojuangco and of former President
Marcos, an error that undeniably and illegally deprived COCOFED, et al of their
constitutionalrighttobeheard.

2. The Sandiganbayan erroneously concluded that the Assailed PSJs and Assailed
Resolutions settled the ultimate issue of ownership of the Sequestered Assets and,
moreimportantly,resolvedallfactualandlegalissuesinvolvedintheillgottenwealth
cases.Rather,astherearetriableissuesstilltoberesolved,itwasincumbentuponthe
Sandiganbayantoreceiveevidencethereonandconducttrialonthemerits.

3.Havingexpresslyorderedthepartiestoproceedtotrialandthereafterdecreeingthat
trial is unnecessary as the Assailed PSJs were final and appealable judgments, the
Sandiganbayan acted whimsically, capriciously and contrary to the Rules of Court,
treatedthepartiesintheillgottenwealthcasesunfairly,disobeyedthedictateofthis
HonorableCourtand,worse,violatedCOCOFED,etalsrighttodueprocessandequal
protectionofthelaws.

B.TheSandiganbayangravelyerredifnotgrosslyabuseditsdiscretionwhenitrepeatedly
disregarded,andoutrightlyrefusedtorecognize,theoperativefactsthatexistedaswellas
the rights that vested from the time the coconut levy laws were enacted until their
declaration of unconstitutionality in the assailed PSJs. As a result, the assailed PSJs
constitute a proscribed retroactive application of the declaration of unconstitutionality, a
taking of private property, and an impairment of vested rights of ownership, all without
[64]
due process of law. Otherwise stated, the assailed PSJs and the assailed Resolutions
effectively penalized the coconut farmers whose only possible mistake, offense or
misfortunewastofollowthelawsthatwerethenlegal,validandconstitutional.
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misfortunewastofollowthelawsthatwerethenlegal,validandconstitutional.

IV. The voluminous records of these illgotten wealth cases readily reveal the various dilatory
tacticsrespondentRepublicresortedto.Asaresult,despitethelapseofalmosttwenty(20)years
of litigation, the respondent Republic has not been required to, and has not even attempted to
prove,thebasesofitsperjuriousclaimthatthesequesteredassetsconstituteillgottenwealthof
formerPresidentMarcosandhiscrony,Cojuangco.IntoleratingrespondentRepublicsanticsfor
almost twenty (20) years, the Sandiganbayan so glaringly departed from procedure and thereby
flagrantlyviolatedCOCOFED,etal.srighttospeedytrial.



In G.R. No. 178193, petitioner Ursua virtually imputes to the Sandiganbayan the same
[65]
errorsattributedtoitbypetitionersinG.R.Nos.17785758. Hereplicatesasfollows:

I

The Sandiganbayan decided in a manner not in accord with the Rules of Court and settled
jurisprudence in rendering the questioned PSJ as final and appealable thereafter taking the
sequestered assets from their owners or record without presentation of any evidence, thus, the
questionedPSJandthequestionedResolutionsareallnullandvoid.

A. The Sandiganbayans jurisdiction insofar as the illgotten wealth cases are
concerned,islimitedtotherecoveryofillgottenwealthasdefinedinExecutive
OrdersNo.1,2,14and14A.

B. The Sandiganbayan should have decided to dismiss the case or continue to
receive evidence instead of ruling against the constitutionality of some coconut
levylawsandPCAissuancesbecauseitcoulddecideonothergroundsavailableto
it.

II

TheSandiganbayangravelyerredwhenitdeclaredPD.755,Section1and2,Section5,Article1
ofPD961,andSection5ofArt.IIIofPD1468aswellasadministrativeissuancesofthePCAas
unconstitutionalineffect,itabuseditpowerofjudicialreview.

A. The Sandiganbayan gravely erred in concluding that the purpose of PD 755
Section 1 and 2, Section 5, Article 1 of PD 961, and Section 5 of Art. III of PD
1468 is not evident. It then proceeded to formulated its own purpose thereby
intrudingintothewisdomofthelegislatureinenacting[t]helaw.

B.TheSandiganbayangravelyerredindeclaringSection1ofPD755,PCA[AO]
No. 1 and PCA Resolution No. 07478 unconstitutional due to alleged flaws in
theirimplementation.

C.TheSandiganbayangravelyerredinconcludingthatSection1ofPDNo.755
constitutes an undue delegation of legislative power insofar as it authorizes the
PCAtopromulgaterulesandregulationsgoverningthedistributionoftheUCPB
shares to the coconut farmers. Section 1 of PD 755 was complete in itself,
prescribed sufficient standards that circumscribed the discretion of the PCA and
merely authorized the PCA to fill matters of detail an execution through
promulgatedrulesandregulations.

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III

The coconut levy laws, insofar as they allowed the PCA to promulgate rules and regulations
governing the distribution of the UCPB to the coconut farmers, do not constitute an undue
delegation of legislative power as they were complete in themselves and prescribed sufficient
standardsthatcircumscribedthediscretionofthePCA.

IV

Assuming exgratia argumenti that the coconut levy laws are unconstitutional, still, the owners
thereofcannotbedeprivedoftheirpropertywithoutdueprocessoflawconsideringthattheyhave
ingoodfaithacquiredvestedrightsoverthesequesteredassets.
Insum,theinstantpetitionsseektoquestionthedecisionsoftheSandiganbayaninboth
CCNos.0033Aand0033F,alongwiththepreliminaryissuesofobjection.Weshalladdressat
theoutset,(1)thecommonpreliminaryquestions,includingjurisdictionalissue,followedby(2)
the common primary contentious issues (i.e. constitutional questions), and (3) the issues
particulartoeachcase.

TheCourtsRuling

I

TheSandiganbayanhasjurisdictionoverthesubject
matterofthesubdividedamendedcomplaints.

The primary issue, as petitioners COCOFED, et al. and Ursua put forward, boils down to the
Sandiganbayansallegedlackofjurisdictionoverthesubjectmatteroftheamendedcomplaints.
Petitionersmaintainthatthejurisdictionalfactsnecessarytoacquirejurisdictionoverthesubject
matterinCCNo.0033Ahaveyettobeestablished.Infine,theRepublic,sopetitionersclaim,
has failed to prove the illgotten nature of the sequestered coconut farmers UCPB shares.
Accordingly, the controversy is removed from the subject matter jurisdiction of the
Sandiganbayanandnecessarilyanydecisionrenderedonthemerits,suchasPSJAandPSJF,is
void.

To petitioners, it behooves the Republic to prove the jurisdictional facts warranting the
Sandiganbayans continued exercise of jurisdiction over illgotten wealth cases. Citing Manila
[66]
Electric Company [Meralco] v. Ortaez, petitioners argue that the jurisdiction of an
adjudicatorytribunalexercisinglimitedjurisdiction,liketheSandiganbayan,depends upon the
[67]
factsofthecaseasprovedatthetrialandnotmerelyupontheallegationinthecomplaint.
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[68]
CitedtooisPCGGv.Nepumuceno, wheretheCourtheld:

ThedeterminationsmadebythePCGGatthetimeofissuingsequestrationorderscannot
beconsideredasfinaldeterminationsthatthepropertiesorentitiessequesteredortakenoverin
fact constitute illgotten wealth according to [E.O.] No. 1 is a question which can be finally
determinedonlybyacourttheSandiganbayan.ThePCGGhastheburdenofprovingbeforethe
Sandiganbayanthattheassetsithassequesteredorbusinessentityithasprovisionallytakenover
constitutesillgottenwealthwithinthemeaningof[E.O.]No.1andArticleNo.XVIII(26)ofthe
1987Constitution.

Petitionersabovepostureiswithoutmerit.

JusticeFlorenzD.Regaladoexplicatessubjectmatterjurisdiction:

16. Basic is the doctrine that the jurisdiction of a court over the subjectmatter of an action is
conferredonlybytheConstitutionorthelawandthattheRulesofCourtyieldtosubstantivelaw,
inthiscase,theJudiciaryActandB.P.Blg.129,bothasamended,andofwhichjurisdictionis
onlyapart.Jurisdictioncannotbeacquiredthrough,orwaived,enlargedordiminishedby,anyact
or omission of the parties neither can it be conferred by the acquiescence of the court.
Jurisdictionmustexistasamatteroflaw.Consequently,questionsofjurisdictionmayberaised
forthefirsttimeonappealevenifsuchissuewasnotraisedinthelowercourt.

17.Nevertheless,insomecase,theprincipleofestoppelbylacheshasbeenavailedtobarattacks
[69]
onjurisdiction.

It is, therefore, clear that jurisdiction over the subject matter is conferred by law. In turn, the
questiononwhetheragivensuitcomeswithinthepaleofastatutoryconfermentisdetermined
bytheallegationsinthecomplaint,regardlessofwhetherornottheplaintiffwillbeentitledat
[70]
the end to recover upon all or some of the claims asserted therein. We said as much in
[71]
Magayv.Estiandan:

[J]urisdiction over the subject matter is determined by the allegations of the complaint,
irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims
assertedthereinamatterthatcanberesolvedonlyafterandasaresultofthetrial.Normaythe
jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the
motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction could
dependalmostentirelyuponthedefendant.


OfthesametenorwaswhattheCourtwroteinAlliedDomecqPhilippines,Inc.v.Villon:
[72]

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Jurisdictionoverthesubjectmatteristhepowertohearanddeterminethegeneralclassto
whichtheproceedingsinquestionbelong.Jurisdictionoverthesubjectmatterisconferredbylaw
andnotbytheconsentoracquiescenceofanyorallofthepartiesorbyerroneousbeliefofthe
courtthatitexists.Basicistherulethatjurisdictionoverthesubjectmatterisdeterminedbythe
causeorcausesofactionasallegedinthecomplaint.
The material averments in subdivided CC No. 0033A and CC No. 0033F included the
following:

12.DefendantEduardoCojuangco,JrservedasapublicofficerduringtheMarcosadministration.

13.DefendantEduardoCojuangco,Jr.,takingadvantageofhisassociation,influenceand
connection, acting in unlawful concert with the [Marcoses] and the individual defendants,
embarkedupondevices,schemesandstratagems,includingtheuseofdefendantcorporationsas
fronts,tounjustlyenrichthemselvesastheexpenseofthePlaintiffandtheFilipinopeople,such
aswhenhe

a) manipulated, beginning the year 1975 with the active collaboration of Defendants ,
MaraiClaraLobregat,DaniloUrsua[etc.],thepurchasebythe(PCA)of72.2%oftheoutstanding
capital stock of the (FUB) which was subsequently converted into a universal bank named
(UCPB)throughtheuseof(CCSF)inamannercontrarytolawandtothespecificpurposesfor
whichsaidcoconutlevyfundswereimposedandcollectedunderP.D.276andunderanomalous
andsinisterdesignsandcircumstances,towit:

(i)DefendantEduardoCojuangco,Jr.covetedthecoconutlevyfundsasacheap,lucrativeandriskfree
sourceoffundswithwhichtoexercisehisprivateoptiontobuythecontrollinginterestinFUB.
(ii)tolegitimizeaposteriorihishighlyanomalousandirregularuseanddiversionofgovernmentfundsto
advance his own private and commercial interests Defendant Eduardo Cojuangco, Jr. caused the
issuance of PD 755 (a) declaring that the coconut levy funds shall not be considered special and
fiduciary and trust funds conveniently repealing for that purpose a series of previous decrees
establishingthecharacterofthecoconutlevyfundsasspecial,fiduciary,trustandgovernments(b)
confirmingtheagreementbetweenCojuangcoandPCAonthepurchaseofFUBbyincorporatingby
referencesaidprivatecommercialagreementinPD755
(iii).
(iv) To perpetuate his opportunity tobuildhiseconomicempire,Cojuangco caused the issuance of an
unconstitutionaldecree(PD1468)requiringthedepositofallcoconutlevyfundswithUCPBinterest
freetotheprejudiceofthegovernmentandfinally
(v)Havingfullyestablishedhimselfastheundisputedcoconutkingwithunlimitedpowerstodealwith
the coconut levy funds, the stage was now set for Defendant Eduardo Cojuangco, Jr. to launch his
predatoryforaysintoalmostallaspectsofPhilippineactivitynamely.oilmills.
(vi) Ingrossviolationoftheirfiduciarypositionsandincontraventionofthegoaltocreateabankfor
coconutfarmersofthecountry,thecapitalstockofUCPBasofFebruary25,1986wasactuallyheldby
thedefendants,theirlawyers,factotumandbusinessassociates,therebyfinallygainingcontrolofthe
UCPBbymisusingthenamesandidentitiesofthesocalledmorethanonemillioncoconutfarmers.

(b)createdand/orfundedwiththeuseofcoconutlevyfundsvariouscorporations,suchas
(COCOFED) with the active collaboration and participation of Defendants Juan Ponce Enrile,
Maria Clara Lobregat most of whom comprised the interlocking officers and directors of said
companiesdissipated,misusedand/ormisappropriatedasubstantialpartofsaidcocolevyfunds
FINALLYGAINOWNERSHIPANDCONTROLOFTHEUNITEDCOCONUTPLANTERS
BANKBYMISUSINGTHENAMESAND/ORIDENTIFIESOFTHESOCALLLEDMORE
THANONEMILLIONCOCONUTFARNMERS

(c) misappropriated, misused and dissipated P840 million of the (CIDF) levy funds
deposited with the National Development Corporation (NIDC) as administrator trustee of said
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deposited with the National Development Corporation (NIDC) as administrator trustee of said
fundsandlaterwithUCPB,ofwhichDefendantEduardoCojuangco,Jr.wastheChiefExecutive
Officer.

(d) established and caused to be funded with coconut levy fundfs, with the active
collaborationofDefendantsFerdinandE.MarcosthroughtheissuanceofLOI926andof[other]
defendants the United Coconut Oil Mills, Inc., a corporation controlled by Defendant Eduardo
Cojuangco, Jr. and bought sixteen (16) certain competing oil mills at exorbitant prices then
mothballedthem.


(i)misusedcoconutlevyfundstobuymajorityoftheoutstandingsharesofstockofSan
MiguelCorporation.


14.DefendantsEduardoCojuangco,Jr.oftheAngaraConcepcionCruzRegalaandAbello
lawoffices(ACCRA)plotted,devised,schemed,conspiredandconfederatedwitheachotherin
settingup,throughtheuseofthecoconutlevyfundsthefinancialandcorporatestructuresthatled
totheestablishmentofUCPBUNICOM[etc.]andmorethantwentyothercoconutlevyfunded
corporations including the acquisition of [SMC] shares and its institutionalization through
presidentialdirectivesofthecoconutmonopoly.


16. The acts of Defendants, singly or collectively, and /or in unlawful concert with one
another, constitute gross abuse of official position and authority, flagrant breach of public trust
and fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the
ConstitutionandlawstothegraveandirreparabledamageofthePlaintiffandtheFilipinopeople.


CCNo.0033F


12. Defendant Eduardo Cojuangco, Jr., served as a public officer during the Marcos
administration.

13. Having fully established himself as the undisputed coconut king with unlimited
powerstodealwiththecoconutlevyfunds,thestagewasnowsetforCojuangco,Jr.tolaunchhis
predatoryforaysintoalmostallaspectsofPhilippineeconomicactivitynamelyoilmills.

14. Defendant Eduardo Cojuangco, Jr., taking undue advantage of his association,
influence,andconnection,actinginunlawfulconcertwithDefendantsFerdinandE.Marcosand
Imelda R. Marcos, and the individual defendants, embarked upon devices, schemes and
stratagems,includingtheuseofdefendantcorporationsasfronts,tounjustlyenrichthemselvesat
theexpenseofPlaintiffandtheFilipinopeople.

(a)Havingcontroloverthecoconutlevy,DefendantEduardoM.Cojuangcoinvestedthe
fundsindiverseactivities,suchasthevariousbusinessesSMCwasengagedin.


(c)Laterthatyear[1983],CojuangcoalsoacquiredtheSorianostocksthroughaseriesof
complicated and secret agreements, a key feature of which was a voting trust
agreementthatstipulatedthatAndres,Jr.orhisheirwouldproxyoverthevoteofthe
sharesownedbySorianoandCojuangco.

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(g)Alltogether,Cojuangcopurchased33millionsharesoftheSMCthroughthe14holding
companies


3.1.Thesamefourteencompanieswereinturnownedbythesix(6)socalledCIIF
Companies.

(h)DefendantCorporationsarebutshellcorporationsownedbyinterlockingshareholders
whohavepreviouslyadmittedthattheyarejustnomineestockholderswhodonothave
anyproprietaryinterestoverthesharesintheirnames.[L]awyersoftheAngaraAbello
Concepcion Regala & Cruz (ACCRA) Law offices, the previous counsel who
incorporated said corporations, prove that they were merely nominee stockholders
thereof.

(l)Thesecompanies,whichACCRALawOfficesorganizedforDefendantCojuangcoto
beabletocontrolmorethan60%ofSMCshares,werefundedbyinstitutionswhich
dependeduponthecoconutlevysuchastheUCPB,UNICOM,(COCOLIFE),among
others. Cojuangco and his ACCRA lawyers used the funds from 6 large coconut oil
millsand10copratradingcompaniestoborrowmoneyfromtheUCPBandpurchase
theseholdingcompaniesandtheSMCstocks.Cojuangcoused$150millionfromthe
coconutlevy,brokendownasfollows:

AmountSourcePurpose
(inmillion)

$22.26OilMillsequityinholding
Companies

$65.6OilMillsloantoholding
Companies

$61.2UCPBloantoholding
Companies[164]

Theentireamount,therefore,camefromthecoconutlevy,somepassingthroughthe
UnicomOilmills,othersdirectlyfromtheUCPB.

(m) With his entry into the said Company, it began to get favors from the Marcos
government, significantly the lowering of the excise taxes on beer, one of the main
productsofSMC.

15.Defendantsplotted,devised,schemed,conspiredandconfederatedwitheachotherin
setting up, through the use of coconut levy funds, the financial and corporate framework and
structuresthatledtotheestablishmentofUCPB,[etc.],andmorethantwentyothercoconutlevy
fundedcorporations,includingtheacquisitionof[SMC]sharesanditsinstitutionalizationthrough
presidentialdirectivesofthecoconutmonopoly.

16. The acts of Defendants, singly or collectively, and/or in unlawful concert with one
another, constitute gross abuse of official position and authority, flagrant breach of public trust
and fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the
constitutionandlawsoftheRepublicofthePhilippines,tothegraveandirreparabledamageof
[73]
PlaintiffandtheFilipinopeople.

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Judgingfromtheallegationsofthedefendantsillegalactsthereatmade,itisfairlyobvious
thatbothCCNos.0033AandCC0033Fpartake,inthecontextofEONos.1,2and14,series
of1986,thenatureofillgottenwealthsuits.Bothdealwiththerecoveryofsequesteredshares,
propertyorbusinessenterprisesclaimed,asallegedinthecorrespondingbasiccomplaints,tobe
illgotten assets of President Marcos, his cronies and nominees and acquired by taking undue
advantageofrelationshipsorinfluenceand/orthroughorasaresultofimproperuse,conversion
or diversion of government funds or property. Recovery of these assetsdetermined as shall
hereinafter be discussed as prima facie illgottenfalls within the unquestionable jurisdiction of
[74]
theSandiganbayan.

P.D. No. 1606, as amended by R.A. 7975 and E.O. No. 14, Series of 1986, vests the
Sandiganbayanwith,amongothers,originaljurisdictionovercivilandcriminalcasesinstituted
pursuanttoandinconnectionwithE.O.Nos.1,2,14and14A.Correlatively,thePCGGRules
andRegulationsdefinesthetermIllGottenWealthasanyasset,property,businessenterpriseor
material possession of persons within the purview of [E.O.] Nos. 1 and 2, acquired by them
directly,orindirectlythrudummies,nominees,agents,subordinatesand/orbusinessassociates
byanyofthefollowingmeansorsimilarschemes:

(1)Throughmisappropriation,conversion,misuseormalversationofpublicfundsor
raidsonthepublictreasury

(2).

(3) By the illegal or fraudulent conveyance or disposition of assets belonging to the
governmentoranyofitssubdivisions,agenciesorinstrumentalitiesorgovernmentowned
orcontrolledcorporations
(4) By obtaining, receiving or accepting directly or indirectly any shares of stock,
equity or any other form of interest or participation in any business enterprise or
undertaking

(5)Throughtheestablishmentofagricultural,industrialorcommercialmonopoliesor
othercombinationand/orbytheissuance,promulgationand/orimplementationofdecrees
andordersintendedtobenefitparticularpersonsorspecialinterestsand

(6)Bytakingundueadvantageofofficialposition,authority,relationshiporinfluence
[75]
forpersonalgainorbenefit. (Emphasissupplied)

Section2(a)ofE.O.No.1chargedthePCGGwiththetaskofassistingthePresidentin [T]he
recovery of all illgotten wealth accumulated by former [President] Marcos, his immediate
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family,relatives,subordinatesandcloseassociatesincludingthetakeoverorsequestrationofall
business enterprises and entities owned or controlled by them, during his administration,
directlyorthroughnominees,bytakingundueadvantageoftheirpublicofficeand/orusingtheir
powers,authority,influence,connectionsorrelationship.ComplementingtheaforesaidSection
2(a)isSection1ofE.O.No.2decreeingthefreezingofallassetsinwhichthe[Marcoses]their
close relatives, subordinates, business associates, dummies, agents or nominees have any
interestorparticipation.

The Republics averments in the amended complaints, particularly those detailing the alleged
wrongfulactsofthedefendants,sufficientlyrevealthatthesubjectmatterthereofcomprisesthe
recoverybytheGovernmentofillgottenwealthacquiredbythenPresidentMarcos,hiscronies
or their associates and dummies through the unlawful, improper utilization or diversion of
coconut levy funds aided by P.D. No. 755 and other sister decrees. President Marcos himself
issuedthesedecreesinabrazenbidtolegalizewhatamountstoprivatetakingofthesaidpublic
funds.

Petitioners COCOFED et al. and Ursua, however, would insist that the Republic has failed to
prove the jurisdiction facts: that the sequestered assets indeed constitute illgotten wealth as
averredintheamendedsubdividedcomplaints.

Thiscontentionisincorrect.

TherewasnoactualneedforRepublic,asplaintiffaquo,toadduceevidencetoshowthat
theSandiganbayanhasjurisdictionoverthesubjectmatterofthecomplaintsasitleanedonthe
avermentsintheinitiatorypleadingstomakevisiblethejurisdictionoftheSandiganbayanover
the illgotten wealth complaints. As previously discussed, a perusal of the allegations easily
revealsthesufficiencyofthestatementofmattersdisclosingtheclaimofthegovernmentagainst
thecocolevyfundsandtheassetsacquireddirectlyorindirectlythroughsaidfundsasillgotten
wealth. Moreover, the Court finds no rule that directs the plaintiff to first prove the subject
matterjurisdictionofthecourtbeforewhichthecomplaintisfiled.Rather,suchburdenfallson
theshouldersofdefendantinthehearingofamotiontodismissanchoredonsaidgroundora
preliminaryhearingthereonwhensuchgroundisallegedintheanswer.

COCOFED et al. and Ursuas reliance on Manila Electric Company [Meralco] v.
[76]
Ortanez is misplaced, there being a total factual dissimilarity between that and the case at
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[76]
Ortanez is misplaced, there being a total factual dissimilarity between that and the case at
bar. Meralco involved a labor dispute before the Court of Industrial Relations (CIR) requiring
the interpretation of a collective bargaining agreement to determine which between a regular
court and CIR has jurisdiction. There, it was held that in case of doubt, the case may not be
dismissedforfailuretostateacauseofactionasjurisdictionofCIRisnotmerelybasedonthe
allegationsofthecomplaintbutmustbeprovedduringthetrialofthecase.Thefactualmilieuof
MeralcoshowsthatthesaidproceduralholdingispeculiartotheCIR.Thus,itisnotandcould
notbeaprecedenttothecasesatbar.

[77]
Even PCGG v. Nepomuceno is not on all fours with the cases at bench, the issue therein
beingwhethertheregionaltrialcourthasjurisdictionoverthePCGGandsequesteredproperties,
visvis the present cases, which involve an issue concerning the Sandiganbayans jurisdiction.
LikeinMeralco,theholdinginNepomucenoisnotdeterminativeoftheoutcomeofthecasesat
bar.

Whilethe1964MeralcoandtheNepomucenocasesareinapplicable,theCourtsrulinginTijam
[78]
v. Sibonhonoy is the leading case on estoppel relating to jurisdiction. In Tijam, the Court
expresseddispleasureontheundesirablepracticeofapartysubmittinghiscasefordecisionand
thenacceptingjudgment,onlyiffavorable,andthenattackingitforlackofjurisdiction,when
adverse.

ConsideringtheantecedentsofCCNos.0033Aand0033F,COCOFED,Lobregat,Ballares,et
al. and Ursua are already precluded from assailing the jurisdiction of the Sandiganbayan.
Remember that the COCOFED and the Lobregat group were not originally impleaded as
defendants in CC No. 0033. They later asked and were allowed by the Sandiganbayan to
intervene. If they really believe then that the Sandiganbayan is without jurisdiction over the
subject matter of the complaint in question, then why intervene in the first place? They could
have sat idly by and let the proceedings continue and would not have been affected by the
outcomeofthecaseastheycanchallengethejurisdictionoftheSandiganbayanwhenthetime

forimplementationoftheflaweddecisioncomes.Moreimportantly,thedecisioninthecasewill
have no effect on them since they were not impleaded as indispensable parties. After all, the
[79]
joinderofallindispensablepartiestoasuitisnotonlymandatory,butjurisdictionalaswell.
Bytheirintervention,whichtheSandiganbayanallowedperitsresolutiondatedSeptember 30,
1991,COCOFEDandUrsuahaveclearlymanifestedtheirdesiretosubmittothejurisdictionof
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1991,COCOFEDandUrsuahaveclearlymanifestedtheirdesiretosubmittothejurisdictionof
theSandiganbayanandseekrelieffromsaidcourt.Thereafter,theyfilednumerouspleadingsin
the subdivided complaints seeking relief and actively participated in numerous proceedings.
AmongthepleadingsthusfiledaretheOppositionstotheMotionforInterventioninterposedby
the Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyogan and
GabayngMundosaKaunlaranFoundation,Inc.,aClassActionOmnibusMotiontoenjointhe
PCGG from voting the SMC shares dated February 23, 2001 (granted by Sandiganbayan) and
theClassActionMotionforaSeparateSummaryJudgmentdatedApril11,2001.Bytheseacts,
COCOFED et al. are now legally estopped from asserting the Sandiganbayns want of
jurisdiction,ifthatbethecase,overthesubjectmatterofthecomplaintastheyhavevoluntarily
yielded to the jurisdiction of the Sandiganbayan. Estoppel has now barred the challenge on
Sandiganbayansjurisdiction.

[80]
TheensuingexcerptsfromMacahiligv.HeirsofMagalit areinstructive:

WecannotallowhertoattackitsjurisdictionsimplybecauseitrenderedaDecisionprejudicialto
herposition.Participationinallstagesofacasebeforeatrialcourteffectivelyestopsapartyfrom
challengingitsjurisdiction.Onecannotbelatedlyrejectorrepudiateitsdecisionaftervoluntarily
submittingtoitsjurisdiction,justtosecureaffirmativereliefagainstonesopponentorafterfailing
to obtain such relief. If, by deed or conduct, a party has induced another to act in a particular
manner, estoppel effectively bars the former from adopting an inconsistent position, attitude or
courseofconductthattherebycauseslossorinjurytothelatter.

Lestitbeoverlooked,thisCourthasalreadydecidedthatthesequesteredsharesareprima
facie illgotten wealth rendering the issue of the validity of their sequestration and of the
jurisdiction of the Sandiganbayan over the case beyond doubt. In the case of COCOFED v.
[81]
PCGG, Westatedthat:

ItisofcoursenotforthisCourttopassuponthefactualissuesthusraised.Thatfunction
pertains to the Sandiganbayan in the first instance. For purposes of this proceeding, all that the
Courtneedstodetermineiswhetherornotthereisprimafaciejustificationforthesequestration
orderedbythePCGG.TheCourtissatisfiedthatthereis.Thecitedincidents,giventhepublic
character of the coconut levy funds, place petitioners COCOFED and its leaders and

officials,atleastprimafacie,squarelywithinthepurviewofExecutiveOrdersNos.1,2and
14,asconstruedandappliedinBASECO,towit:

1.thatillgottenproperties(were)amassedbytheleadersandsupportersoftheprevious
regime

a. more particularly, that (i)llgotten wealth was accumulated by Marcos, his immediate
family,relatives,subordinatesandcloseassociates,.(and)businessenterprisesandentities(came
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family,relatives,subordinatesandcloseassociates,.(and)businessenterprisesandentities(came
to be) owned or controlled by them, during (the Marcos) administration, directly or through
nominees, by taking undue advantage of their public office and using their powers, authority,
influence,connectionsorrelationships

b. otherwise stated, that there are assets and properties purportedly pertaining to [the
Marcoses],theircloserelatives,subordinates,businessassociates,dummies,agentsornominees
which had been or were acquired by them directly or indirectly, through or as a result of the
improperorillegaluseoffundsorpropertiesownedbytheGovernmentoranyofitsbranches,
instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of
theiroffice,authority,influence,connectionsorrelationship,resultingintheirunjustenrichment
.


2.Thepetitionersclaimthattheassetsacquiredwiththecoconutlevyfundsareprivately
ownedbythecoconutfarmersisfoundedoncertainprovisionsoflaw,towit[Sec.7,RA6260
andSec.5,Art.III,PD1468](Wordsinbracketaddeditalicsintheoriginal).

Intheirattempttodismisstheamendedcomplaintsinquestion,petitionersasseveratethat
(1)thecoconutfarmerscannotbeconsideredassubordinates,closeand/orbusinessassociates,
dummies,agentsandnomineesofCojuangco,Jr.ortheMarcoses,and(2)thesequesteredshares
were not illegally acquired nor acquired through or as result of improper or illegal use or
conversionoffundsbelongingtotheGovernment.Whilenotsayingsoexplicitly,petitionersare
doubtlessconveyingtheideathatwealth,howeveracquired,wouldnotbeconsideredillgotten
in the context of EO 1, 2 and 14, s. of 1986, absent proof that the recipient or end possessor
thereofisoutsidetheMarcoscircleoffriends,associates,croniesornominees.

Wearenotconvinced.

Asmaybenoted,E.O.1and2adverttoPresidentMarcos,orhisassociatesnominees.In
its most common signification, the term nominee refers to one who is designated to act for
[82]
another usually in a limited way a person in whose name a stock or bond certificate is
[83]
registered but who is not the actual owner thereof is considered a nominee. Corpus Juris
Secundumdescribesanomineeasone:

designated to act for another as his representative in a rather limited sense. It has no
connotation,however,otherthanthatofactingforanother,inrepresentationofanotherorasthe
grantee of another. In its commonly accepted meaning the term connoted the delegation of
authoritytothenomineeinarepresentativeornominalcapacityonly,anddoesnotconnotethe
transferorassignmenttothenomineeofanypropertyin,orownershipof,therightsoftheperson
[84]
nominatinghim.

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So,thenextquestionthatcomestotheforeis:wouldthetermnomineeincludethemore
thanonemillioncoconutfarmersallegedtobetherecipientsoftheUCPBshares?

Guidedbytheforegoingdefinitions,thequerymustbeansweredintheaffirmativeifonly
togivelifetothoseexecutiveissuancesaimedatensuringtherecoveryofillgottenwealth.Itis
basic,almostelementary,that:
Laws must receive a sensible interpretation to promote the ends for which they are
enacted.Theyshouldbesogivenreasonableandpracticalconstructionaswillgivelifetothem,if
itcanbedonewithoutdoingviolencetoreason.Conversely,alawshouldnotbesoconstruedas
to allow the doing of an act which is prohibited by law, not so interpreted as to afford an
opportunitytodefeatcompliancewithitsterms,createaninconsistency,orcontravenetheplain
wordsofthelaw.Interpretatiofiendaestutresmagisvaleatquampereatorthatinterpretationas
[85]
willgivethethingefficacyistobeadopted.

E.O.1,2,14and14A,itbearstostress,wereissuedpreciselytoeffecttherecoveryofill
gotten assets amassed by the Marcoses, their associates, subordinates and cronies, or through
their nominees. Be that as it may, it stands to reason that persons listed as associated with the
[86]
Marcoses refer to those in possession of such illgotten wealth but holding the same in
behalfoftheactual,albeitundisclosedowner,topreventdiscoveryandconsequentlyrecovery.
Certainly,itiswellnighinconceivablethatillgottenassetswouldbedistributedtoandleftin
the hands of individuals or entities with obvious traceable connections to Mr. Marcos and his
cronies.TheCourtcantake,asithasinfacttaken,judicialnoticeofschemesandmachinations
thathavebeenputinplacetokeepillgottenassetsunderwraps.Thesewouldincludethesetting
[87]
up of layers after layers of shell or dummy, but controlled, corporations or manipulated
instruments calculated to confuse if not altogether mislead wouldbe investigators from
recoveringwealthdeceitfullyamassedattheexpenseofthepeopleorsimplythefruitsthereof.
TransferringtheillegalassetstothirdpartiesnotreadilyperceivedasMarcoscronieswouldbe
another. So it was that in PCGG v. Pena, the Court, describing the rule of Marcos as a well
entrenched plundering regime of twenty years, noted the magnitude of the past regimes

organizedpillageandtheingenuityoftheplunderersandpillagerswiththeassistanceofexperts
[88]
andthebestlegalmindsinthemarket.

Hence,togivefulleffecttoE.O.1,2and14,s.of1986,thetermnominee,asusedinthe
above issuances, must be taken to mean to include any person or group of persons, natural or
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above issuances, must be taken to mean to include any person or group of persons, natural or
juridical, in whose name government funds or assets were transferred to by Pres. Marcos, his
cronies or his associates. To this characterization must include what the Sandiganbayan
considered the unidentified coconut farmers, more than a million of faceless and nameless
coconutfarmers,theallegedbeneficiariesofthedistributedUCPBshares,who,underthe
termsofSec.10ofPCAA.O.No.1,s.of1975,wererequired,uponthedeliveryoftheir
respectivestockcertificates,toexecuteanirrevocableproxyinfavoroftheBanksmanager.
There is thus ample truth to the observations [That] the PCA provided this condition only
indicatesthatthePCAhadnointentiontoconstitutethecoconutfarmerUCPBstockholderasa
bona fide stockholder that the 1.5 million registered farmerstockholders were mere nominal
[89]
stockholders.

Fromtheforegoing,thechallengeontheSandiganbayanssubjectmatterjurisdictionatbarmust
fail.

II

PetitionersCOCOFEDetal.werenot
deprivedoftheirrighttobeheard.


Asaproceduralissue,COCOFED,etal.andUrsuanextcontendthatinthecourseofalmost20
years that the cases have been with the antigraft court, they have repeatedly sought leave to
adduce evidence (prior to respondents complete presentation of evidence) to prove the coco
farmersactualandbeneficialownershipofthesequesteredshares.TheSandiganbayan,however,
had repeatedly and continuously disallowed such requests, thus depriving them of their
constitutionalrighttobeheard.

Thiscontentionisuntenable,theirdemandtoadduceevidencebeingdisallowableontheground
ofprematurity.


The records reveal that the Republic, after adducing its evidence in CC No. 0033A,
subsequentlyfiledaMotionAdCautelamforLeavetoPresentAdditionalEvidencedatedMarch
28,2001. This motion remained unresolved at the time the Republic interposed its Motion for
Partial Summary Judgment. The Sandiganbayan granted the later motion and accordingly
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renderedthePartialSummaryJudgment,effectivelypreemptingthepresentationofevidenceby
thedefendantsinsaidcase(hereinpetitionersCOCOFEDandUrsua).

Section5,Rule30theRulesofCourtclearlysetsouttheorderofpresentingevidence:

SEC.5.Orderoftrial.Subject to the provisions of section 2 of Rule 31, and unless the
courtforspecialreasonsotherwisedirects,thetrialshallbelimitedtotheissuesstatedinthepre
trialorderandshallproceedasfollows:

(a)Theplaintiffshalladduceevidenceinsupportofhiscomplaint

(b) The defendant shall then adduce evidence in support of his defense,
counterclaim,crossclaimandthirdpartycomplaint


(g) Upon admission of the evidence, the case shall be deemed submitted for
decision, unless the court directs the parties to argue or to submit their respective
memorandaoranyfurtherpleadings.

If several defendants or thirdparty defendants, and so forth. having separate defenses
appear by different counsel, the court shall determine the relative order of presentation of their
evidence.(Emphasissupplied.)


Evidently, for the orderly administration of justice, the plaintiff shall first adduce evidence in
support of his complaint and after the formal offer of evidence and the ruling thereon, then
comestheturnofdefendantunderSection3(b)toadduceevidenceinsupportofhisdefense,
counterclaim,crossclaimandthirdpartycomplaint,ifany.Deviationfromsuchorderoftrialis
purely discretionary upon the trial court, in this case, the Sandiganbayan, which cannot be
questioned by the parties unless the vitiating element of grave abuse of discretion supervenes.
Thus,therightofCOCOFEDtopresentevidenceonthemaincasehadnotyetripened.Andthe
rendition of the partial summary judgments overtook their right to present evidence on their
defenses.

It cannot be stressed enough that the Republic as well as herein petitioners were well
within their rights to move, as they in fact separately did, for a partial summary judgment.
Summaryjudgmentmaybeallowedwhere,savefortheamountofdamages,thereis,asshown
by affidavits and like evidentiary documents, no genuine issue as to any material fact and the
movingpartyisentitledtoajudgmentasamatteroflaw.Agenuineissue,asdistinguishedfrom
onethatisfictitious,contrivedandsetupinbadfaith,meansanissueoffactthatcallsforthe
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onethatisfictitious,contrivedandsetupinbadfaith,meansanissueoffactthatcallsforthe
[90]
presentation of evidence. Summary or accelerated judgment, therefore, is a procedural
[91]
techniqueaimedatweedingoutshamclaimsordefensesatanearlystageofthelitigation.
Sections 1, 2 and 4 of Rule 35 of the Rules of Court on Summary Judgment, respectively
provide:

SECTION1.Summary judgment for claimant.A party seeking to recover upon a claim,
counterclaim, or crossclaim may, at any time after the pleading in answer thereto has been
served,movewithsupportingaffidavits,depositionsoradmissionsforasummaryjudgmentinhis
favoruponalloranypartthereof.

SEC. 2. Summary judgment for defending party.A party against whom a claim,
counterclaim or crossclaim is asserted is sought may, at any time, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor as to all or any part
thereof.

SEC.4.Casenotfullyadjudicated on motion.IfonmotionunderthisRule,judgmentis
notrendereduponthewholecaseorforallthereliefssoughtandatrialisnecessary,thecourtat
the hearing of the motion, by examining the pleadings and the evidence before it and by
interrogatingcounselshallascertainwhatmaterialfactsexistwithoutsubstantialcontroversyand
whatareactuallyandingoodfaithcontroverted.Itshallthereuponmakeanorderspecifyingthe
facts that appear without substantial controversy, including the extent to which the amount of
damagesorotherreliefisnotincontroversy,anddirectingsuchfurtherproceedingsintheaction
asarejust.Thefactssospecifiedshallbedeemedestablished,andthetrialshallbeconductedon
thecontrovertedfactsaccordingly.

Clearly,petitionerCOCOFEDsrighttobeheardhadnotbeenviolatedbythemereissuanceof
PSJAandPSJFbeforetheycanadducetheirevidence.

As it were, petitioners COCOFED et al. were able to present documentary evidence in
conjunction with its Class Action Omnibus Motion dated February 23, 2001 where they
appended around four hundred (400) documents including affidavits of alleged farmers. These
petitioners manifested that said documents comprise their evidence to prove the farmers
ownership of the UCPB shares, which were distributed in accordance with valid and existing
[92]
laws.


Lastly,COCOFEDetal.evenfiledtheirownMotionforSeparateSummaryJudgment,anevent
reflective of their admission that there are no more factual issues left to be determined at the
level of the Sandiganbayan. This act of filing a motion for summary judgment is a judicial
admission against COCOFED under Section 26, Rule 130 which declares that the act,
declarationoromissionofapartyastoarelevantfactmaybegiveninevidenceagainsthim.
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declarationoromissionofapartyastoarelevantfactmaybegiveninevidenceagainsthim.

Viewed in this light, the Court has to reject petitioners selfserving allegations about being
deprivedtherighttoadduceevidence.

III

Therighttospeedytrialwasnotviolated.

This brings to the fore the alleged violation of petitioners right to a speedy trial and speedy
dispositionofthecase.Insupportoftheircontention,petitionersciteLicarosv.Sandiganbayan,
[93]
wheretheCourtdismissedthecasependingbeforetheSandiganbayanforviolationofthe
accusedsrighttoaspeedytrial.

Itmustbeclarifiedrightoffthattherighttoaspeedydispositionofcaseandtheaccuseds
righttoaspeedytrialaredistinct,albeitkindred,guarantees,themostobviousdifferencebeing
that a speedy disposition of cases, as provided in Article III, Section 16 of the Constitution,
obtainsregardlessofthenatureofthecase:

Section16.Allpersonsshallhavetherighttoaspeedydispositionoftheircasesbeforeall
judicial,quasijudicial,oradministrativebodies.

Infine,therighttoaspeedytrialisavailableonlytoanaccusedandisapeculiarlycriminallaw
concept, while the broader right to a speedy disposition of cases may be tapped in any
proceedingsconductedbystateagencies.Thus,inLicarostheCourtdismissedthecriminalcase
againsttheaccusedduetothepalpabletransgressionofhisrighttoaspeedytrial.

Intheinstantcase,theappropriaterightinvolvedistherighttoaspeedydispositionofcases,the
recoveryofillgottenwealthbeingacivilsuit.

Nonetheless, the Court has had the occasion to dismiss several cases owing to the
[94]
infringement of a partys right to a speedy disposition of cases. Dismissal of the case for
violationofthisrightisthegeneralrule.Bernatv.TheHonorableSandiganbayan(5thDivision)
[95]
expoundsontheextentoftherighttoaspeedydispositionofcasesasfollows:

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Section16ofArticleIIIoftheConstitutionguaranteestherightofallpersonstoaspeedy
dispositionoftheircases.Nevertheless,thisrightisdeemedviolatedonlywhentheproceedings
are attended by vexatious, capricious and oppressive delays. Moreover, the determination of
whether the delays are of said nature is relative and cannot be based on a mere mathematical
reckoningoftime.Particularregardmustbetakenofthefactsandcircumstancespeculiartoeach
case. As a guideline, the Court in Dela Pea v. Sandiganbayan mentioned certain factors that
should be considered and balanced, namely: 1) length of delay 2) reasons for the delay 3)
assertionorfailuretoassertsuchrightbytheaccusedand4)prejudicecausedbythedelay.


WhilethisCourtrecognizestherighttospeedydispositionquitedistinctlyfromtheright
to a speedy trial, and although this Court has always zealously espoused protection from
oppressiveandvexatiousdelaysnotattributabletothepartyinvolved,atthesametime,wehold
thatapartysindividualrightsshouldnotworkagainstandprecludethepeoplesequallyimportant
righttopublicjustice.Intheinstantcase,threepeoplediedasaresultofthecrashoftheairplane
thattheaccusedwasflying.Itappearstousthatthedelayinthedispositionofthecaseprejudiced
notjusttheaccusedbutthepeopleaswell.Sincetheaccusedhascompletelyfailedtoasserthis
rightseasonablyandinasmuchastherespondentjudgewasnotinapositiontodisposeofthecase
on the merits we hold it proper and equitable to give the parties fair opportunity to obtain
substantialjusticeinthepremises.

[96]
ThemorerecentcaseofTellov.People laidstresstotherestrictivedimensiontotherightto
speedydispositionofcases,i.e.,itislostunlessseasonablyinvoked:

InBernat,theCourtdeniedpetitionersclaimofdenialofhisrighttoaspeedydisposition
of cases considering that [he] chose to remain silent for eight years before complaining of the
delayinthedispositionofhiscase.TheCourtruledthatpetitionerfailedtoseasonablyasserthis
right and he merely sat and waited from the time his case was submitted for resolution. In this
case, petitioner similarly failed to assert his right to a speedy disposition of his case. He only
invokedhisrighttoaspeedydispositionofcasesafter[hisconviction].Petitionerssilencemaybe
consideredasawaiverofhisright.

An examination of the petitioners arguments and the cited indicia of delay would reveal the
absenceofanyallegationthatpetitionersmovedbeforetheSandiganbayanforthedismissalof
thecaseonaccountofvexatious,capriciousandoppressivedelaysthatattendedtheproceedings.
FollowingTello,petitionersaredeemedtohavewaivedtheirrighttoaspeedydispositionofthe
case.Moreover,delays,ifany,prejudicedtheRepublicaswell.Whatismore,theallegedbreach
oftherightinquestionwasnotraisedbelow.Asamatterofsettledjurisprudence,butsubjectto

equallysettledexception,anissuenotraisedbeforethetrialcourtcannotberaisedforthefirst
[97]
timeonappeal. Thesportingideaforbiddingonefrompullingsurprisesunderpinsthisrule.
For these reasons, the instant case cannot be dismissed for the alleged violation of petitioners
righttoaspeedydispositionofthecase.

IV
Sections1and2ofP.D.No.755,ArticleIII,Section5ofP.D.No.961andArticleIII,
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12/6/2017 G.R.Nos.17785758

Sections1and2ofP.D.No.755,ArticleIII,Section5ofP.D.No.961andArticleIII,
Section5ofP.D.No.1468,areunconstitutional.

The Court may pass upon the constitutionality of P.D. Nos.
755,961and1468.

PetitionersCOCOFEDetal.andUrsuauniformlyscoredtheSandiganbayanforabusing
its power of judicial review and wrongly encroaching into the exclusive domain of Congress
whenitdeclaredcertainprovisionsofthecoconutlevylawsandPCAadministrativeissuances
asunconstitutional.

Wearenotpersuaded.

It is basic that courts will not delve into matters of constitutionality unless unavoidable,
when the question of constitutionality is the very lis mota of the case, meaning, that the case
cannot be legally resolved unless the constitutional issue raised is determined. This rule finds
anchorage on the presumptive constitutionality of every enactment. Withal, to justify the
nullification of a statute, there must be a clear and unequivocal breach of the Constitution. A
[98]
doubtfulorspeculativeinfringementwouldsimplynotsuffice.

Just as basic is the precept that lower courts are not precluded from resolving, whenever
warranted,constitutionalquestions,subjectonlytoreviewbythisCourt.

To Us, the present controversy cannot be peremptorily resolved without going into the
constitutionalityofP.D.Nos.755,961and1468inparticular.ForpetitionersCOCOFEDet al.
andBallaresetal.predicatetheirclaimoverthesequesteredsharesandnecessarilytheircause
onlawsandmartiallawissuancesassailedbytheRepubliconconstitutionalgrounds.Indeed,as
aptlyobservedbytheSolicitorGeneral,thiscaseisfortherecoveryofsharesgroundedonthe
invalidityofcertainenactments,whichinturnisrootedinthesharesbeingpublicincharacter,

purchasedastheywerebyfundsraisedbythetaxingand/oramixoftaxingandpolicepowersof
[99]
thestate. Asmayberecalled,P.D.No.755,underthepolicydeclaringprovision,authorized
thedistributionofUCPBsharesofstockfreetococonutfarmers.Ontheotherhand,Section2of
P.D.No.755,hereunderquotedbelow,effectivelyauthorizedthePCAtoutilizeportionsofthe
CCSFtopaythefinancialcommitmentofthefarmerstoacquireUCPBandtodepositportions
oftheCCSFlevieswithUCPBinterestfree.Andastherealsoprovided,theCCSF,CIDFand
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12/6/2017 G.R.Nos.17785758
oftheCCSFlevieswithUCPBinterestfree.Andastherealsoprovided,theCCSF,CIDFand
likeleviesthatPCAisauthorizedtocollectshallbeconsideredasnonspecialorfiduciaryfunds
tobetransferredtothegeneralfundoftheGovernment,meaningtheyshallbedeemedprivate
funds.

Section2ofP.D.No.755reads:

Section 2. Financial Assistance. To enable the coconut farmers to comply with their
contractual obligations under the aforesaid Agreement, the [PCA] is hereby directed to draw
and utilize the collections under the [CCSF] authorized to be levied by [PD] No. 232, as
amended, to pay for the financial commitments of the coconut farmers under the said
agreement and, except for [PCAs] budgetary requirements , all collections under the [CCSF]
Levyand(50%)ofthecollectionsunderthe[CIDF]shallbedeposited,interestfree,withthesaid
bank of the coconut farmers and such deposits shall not be withdrawn until the the bank has
sufficient equity capital and since the operations, and activities of the [PCA] are all in accord
with the present social economic plans and programs of the Government, all collections and
levieswhichthe[PCA]isauthorizedtolevyandcollectsuchasbutnotlimitedtothe[CCS
Levy] and the [CIDF] shall not be considered or construed, under any law or regulation,
special and/or fiduciary funds and do not form part of the general funds of the national
governmentwithinthecontemplationof[P.D.]No.711.(Emphasissupplied)

AsimilarprovisioncanalsobefoundinArticleIII,Section5ofP.D.No.961andArticleIII,
Section5ofP.D.No.1468,whichWeshalllaterdiscussinturn:



P.D.No.961

Section5.Exemptions.TheCoconutConsumersStabilizationFundandtheCoconutIndustry
DevelopmentFundaswellasalldisbursementsofsaidfundsforthebenefitofthecoconut
farmers as herein authorized shall not be construed or interpreted, under any law or
regulation,asspecialand/orfiduciaryfunds,oraspartofthegeneralfundsofthenational
government within the contemplation of P.D. No. 711 nor as a subsidy, donation, levy,
government funded investment, or government share within the contemplation of P.D. 898, the
intention being that said Fund and the disbursements thereof as herein authorized for the
[100]
benefitofthecoconutfarmersshallbeownedbythemintheirownprivatecapacities.
(EmphasisOurs)

P.D.No.1468

Section 5. Exemptions. The [CCSF] and the [CIDF] as well as all disbursement as herein
authorized, shall not be construed or interpreted, under nay law or regulation, as special
and/orfiduciaryfunds,oraspartofthegeneralfundsofthenationalgovernmentwithinthe
contemplation of PD 711 nor as subsidy, donation, levy government funded investment, or
governmentsharewithinthecontemplationofPD898,theintentionbeingthatsaidFundand
thedisbursementsthereofashereinauthorizedforthebenefitofthecoconutfarmersshall
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12/6/2017 G.R.Nos.17785758
[101]
beownedbythemintheirprivatecapacities. (EmphasisOurs.)


Inotherwords,therelevantprovisionsofP.D.Nos.755,aswellasthoseofP.D.Nos.961
and1468,couldhavebeentheonlyplausiblemeansbywhichclosetoapurportedmillionanda
half coconut farmers could have acquired the said shares of stock. It has, therefore, become
necessary to determine the validity of the authorizing law, which made the stock transfer and
acquisitionspossible.

Toreiterate,itisofcrucialimportancetodeterminethevalidityofP.D.Nos.755,961and1468
inlightoftheconstitutionalproscriptionagainsttheuseofspecialfundssaveforthepurposeit
was established. Otherwise, petitioners claim of legitimate private ownership over UCPB
sharesandindirectlyoverSMCsharesheldbyUCPBssubsidiarieswillhavenolegtostandon,
P.D. No. 755 being the only law authorizing the distribution of the SMC and UCPB shares of
stock to coconut farmers, and with the aforementioned provisions actually stating and holding
thatthecocolevyfundshallnotbeconsideredasaspecialnotevengeneralfund,butshallbe
[102]
ownedbythefarmersintheirprivatecapacities.

The Sandiganbayans ensuing ratiocination on the need to pass upon constitutional issues the
Republicraisedbelowcommendsitselfforconcurrence:

ThisCourtisconvincedoftheimperativeneedtopassupontheissuesofconstitutionalityraised
by Plaintiff. The issue of constitutionality of the provisions of P.D. No. 755 and the laws
relatedtheretogoestotheverycoreofPlaintiffscausesofactionanddefensesthereto.Itwill
servethebestinterestofjusticetodefinethisearlythelegalframeworkwithinwhichthiscase
shallbeheardandtried,takingintoaccounttheadmissionofthepartiesandtheestablishedfacts,
particularlythoserelatingtothemainsubstanceofthedefenseofLobregat,COCOFED,etal.
and Ballares, et al., which is anchored on the laws being assailed by Plaintiff on
constitutionalgrounds.


TheCourtisalsomindfulthatlowercourtsareadmonishedtoobserveabecoming
modesty in examining constitutional questions, but that they are nonetheless not
preventedfromresolvingthesamewheneverwarranted,subjectonlytoreviewby
thehighesttribunal(Ynotv.IntermediateAppellateCourt).


It is true that, as a general rule, the question of constitutionality must be raised at the
earliestopportunity.TheHonorableSupremeCourthasclearlystatedthatthegeneralruleadmits
ofexceptions,thus:

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