Republic v. COCOFED the right to control.
Voting rights may be for the purpose of, among
G.R. Nos. 147062-64
FACTS: The first Division of the Sandiganbayan in Civil Case
Nos.0033-A, 0033-B and 0033-P allowed respondents COCOFED, et
al., and Ballares, et al., as well as Eduardo Cojuangco, et al.,
acknowledged registered stockholders of the United Coconut Planters
Bank (UCPB) and all other registered stockholders of the bank, to
exercise their right to vote their shares of stock and themselves to be
voted upon in the UCPB at the scheduled Stockholders' Meeting on
March 6, 2001 or on any subsequent continuation or resetting
thereof, and to perform such acts as will normally follow in the
exercise of these rights as registered stockholders. In its petition, the
Republic of the Philippines, represented by the Presidential
Commission on Good Government (PCGG), contended that
respondent Sandiganbayan committed grave abuse of discretion in
enjoining them from voting the sequestered shares of stock in UCPB
despite the fact that the sequestration share were purchased with
coconut levy funds (which were declared public in character) and the
continuing effectivity of Resolution dated February16, 1993 in G.R.
No. 96073 which allows the PCGG to vote said sequestered shares.
HELD: The Supreme Court uphold the contention of the
PCGG and set aside the assailed order of the
Sandiganbayan.
The Court held that the government should be allowed to continue
voting those shares in as much as they were purchased with coconut
levy funds- funds that are prima facie public in character or, at the
very least, are "clearly affected withy public interest," and because
they belong to it as the prima facie beneficial and true owner thereof.
Voting is an act of dominion that should be exercised by the
shareowner. One of the recognized rights of an owner is the right to
vote at meetings of the corporation. The right to vote is classified as
others, electing or removing directors, amending a charter or making
or amending by laws. Because the subject UCPB shares were
acquired with government funds, the government becomes their
prima facie beneficial and true owner. Ownership includes the right to
enjoy, dispose of, exclude and recover a thing without limitations
other than those established by law or by the owner. Ownership has
been aptly described as the most comprehensive of all real rights and
the right to vote shares is a mere incident of ownership. In the
present case, the government has been shown to be the prima facie
owner of the funds used to purchase the shares. Hence, it should be
allowed the rights and privileges flowing from such fact.
Philippine Coconut Federation, et. al v. Republic
G.R. Nos. 177857-58
FACTS: In 1971, Republic Act No. 6260 was enacted creating the
Coconut Investment Fund (CIF). The source of the CIF was a P0.55
levy on the sale of every 100 kg. of copra. The Philippine Coconut
Administration was tasked to collect and administer the Fund. Out of
the 0.55 levy, P0.02 was placed at the disposition of the COCOFED,
the recognized national association of coconut producers declared
by the PCA. Coco fund receipts were ought to be issued to every
copra seller. During the Martial Law regime, then President
Ferdinand Marcos issued several Presidential Decrees purportedly
for the improvement of the coconut industry. The most relevant
among these is P.D. No. 755 which permitted the use of the Fund for
the―acquisition of a commercial bank for the benefit of coconut farmers and the
distribution of the shares of the stock of the bank it [PCA] acquired free to
the coconut farmers (Sec.2). Thus, the PCA acquired the First United
Bank, later renamed the United Coconut Planters Bank (UCPB). The
PCA bought the 72.2% of PUB’s outstanding capital stock or 137,866 shares
at P200 per share (P27, 573,200.00) from Pedro Cojuangco in
behalf of the coconut farmers.”
The rest of the Fund was deposited to the UCPB interest free. export products. Taxation is done not merely to raise revenues to
Farmers who had paid the CIF and registered their receipts with PCA support the government, but also to provide means for the
were given their corresponding UCPB stock certificates. Only 16 rehabilitation and the stabilization of a threatened industry, which is so affected
with public interest.
million worth of COCOFUND receipts were registered and a large
number of the coconut farmers opted to sell all/part of their UCPB
shares to private individuals. Simply put, parts of the coconut levy
funds went directly or indirectly to various projects and/or was
converted into different assets or investments through the
years. After the EDSA Revolution, President Corazon Aquino
issued Executive Order 1which created the Presidential Commission
on Good Government (PCGG).The PCGG aimed to assist the
President in the recovery of ill-gotten wealth accumulated by the
Marcoses and their cronies. PCGG was empowered to file cases for
sequestration in the
Sandiganbayan. Among the sequestered properties were the shares
of stock in the UCPBregistered in the name of ―over a million coconut
farmers‖ held in trust by the PCA. The Sandiganbayan allowed the
sequestration by ruling in a Partial Summary Judgment that the
Coconut Levy Funds are prima facie public funds and that Section 1
and 2 of PD No. 755 (and some other PDs) were unconstitutional.
The COCOFED representing the ―over a million coconut farmers‖ via Petition
for review under Rule 45 sought the reversal of the ruling contending
among others that the sequestration amounted to ―taking of private property
without just compensation and impairment of vested right of ownership.

ISSUE: What is the NATURE of the Coconut Levy Fund?

RULING:
The SC ruled in favor of the REPUBLIC. To begin with, the Coconut Levy
was imposed in the exercise of the State’s inherent power of taxation.
Indeed, the Coconut Levy Funds partake the nature of TAXES. The
Funds were generated by virtue of statutory enactments by the
proper legislative authorities and for public purpose. The Funds were
collected to advance the government avowed policy of protecting the coconut
industry. The SC took judicial notice of the fact that the coconut
industry is one of the great economic pillars of our nation, and
coconuts and their by-products occupy a leading position among the countries’