v- conjuangco vs rep

7/25/2019 V- Conjuangco vs Rep

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 180705 November 27, 2012

EDUARDO M. COJUANGCO, JR.,Petitioner,vs.REPUBLC O! T"E P"LPPNES,Respondent.

D E C I S I N

#ELASCO, JR., J.:

!he Case

f the several coconut lev" appealed cases that ste##ed fro# certain issuances of the Sandi$anba"an in its Civil Case

No. %%&&, $%e &re'e($ re)o*r'e &rove' $o be o(e o+ $%e mo'$-++-)*$.

In particular, the instant petition for revie' under R*e /5of the Rules of Court assails and see(s to annul a portionof the Partial Su##ar" )ud$#ent dated )ul" **, +%%&, as affir#ed in a Resolution of Dece#ber +, +%%-, both renderedb" the Sandi$anba"an in its Civil Case /CC/0 No. %%&&1A the 2ud$#ent shall hereinafter be referred to as /PS)1A/0,entitled /Republic of the Philippines, Plaintiff, v. Eduardo M. Co2uan$co, )r., et al., Defendants, CC3ED, et al.,BA44ARES, et al., Class Action Movants./ CC No. %%&&1A is the result of the splittin$ into ei$ht 0 a#ended co#plaints of

CC No. %%&& entitled, /Republic of the Philippines v. Eduardo Co2uan$co, )r., et al.,/ '*-$ +or re)over o+-3o$$e( 4e$% )omme()e b $%e Pre'-e($- Comm-''-o( o( GooGover(me($/PC55/0, for the Republic of the Philippines /Republic/0, a$ainst Eduardo M. Co2uan$co, )r./Co2uan$co/0 and several individuals, a#on$ the#, 3erdinand E. Marcos, Maria Clara 4obre$at /4obre$at/0, and DaniloS. 6rsua /6rsua/0. Each of the ei$ht 0 subdivided co#plaints, CC No. %%&&1A to CC No. %%&&17, correspondin$l"i#pleaded as defendants onl" the alle$ed participants in the transaction8s sub2ect of the suit, or 'ho are averred aso'ner8s of the assets involved.

Apart fro# this recourse, 9e clarif" ri$ht off that PS)1A 'as challen$ed in t'o other separate but consolidated petitions forrevie', one co##enced b" CC3ED et al., doc(eted as 5.R. Nos. *::;:1;, and the other, interposed b" Danilo S.6rsua, and doc(eted as 5.R. No. *:*


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3or a better perspective, the instant recourse see(s to reverse the Partial Su##ar" )ud$#ent-of the anti1$raft court dated)ul" **, +%%&, as reiterated in a Resolution ;of Dece#ber +, +%%-, den"in$ CC3ED?s #otion for reconsideration, andthe Ma" **, +%%: Resolution@den"in$

COCO!ED' mo$-o( $o 'e$ )'e +or $r- ( e)r-(3 $%e &r$- '*mmr

6*3me($ +-( ( &&ebe, all issued in PS)1A. In our adverted )anuar" +-, +%*+ Decision inCC3ED v. Republic, 'e affir#ed 'ith #odification PS)1A of the Sandi$anba"an, and its Partial Su##ar" )ud$#ent inCivil Case No. %%&&13, dated Ma" :, +%%- hereinafter referred to as /PS)13?0.:

More specificall", 9e upheld the Sandi$anba"an?s rulin$ that the )o)o(*$ ev +*(' re'&e)- &*b-) +*(' o+ $%e Gover(me($.Conseuentl", 9e affir#ed theSandi$anba"an?s declaration that Sections * and + of Presidential Decree /P.D./0 :;;, Section &, Article III of P.D.


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9e reproduce, belo', portions of the state#ent of facts in CC3ED v. Republic relevant to the present case> *%

In *

*. P.D. No. +:@ established the Coconut Consu#ers Stabiliation 3und /CCS3/0 and declared the

proceeds of the CCS3 lev" as trust fund, $o be *$--=e $o '*b'--=e $%e'e o+ )o)o(*$b'e &ro*)$', $%*' '$b--=-(3$%e &r-)e o+ e-be o-.

+. P.D. No. ;+ created the Coconut Industr" Develop#ent 3und /CID3/0 to finance the operation of ah"brid coconut seed far#.

&. !hen ca#e P.D. No. :;; providin$ under its Section * the follo'in$>

It is hereb" declared that the polic" of the State is $o &rov-e re-v-be )re-$ +)--$-e' $o $%e )o)o(*$+rmer' $ &re+ere($- r$e' that this polic" can be e=peditiousl"and efficientl" realied b" the i#ple#entation of the /A$ree#ent for the Acuisition of aCo##ercial Ban( for the benefit of Coconut 3ar#ers/ e=ecuted b" the PCA and that the

PCA -' %ereb *$%or-=e $o -'$r-b*$e, +or+ree, $%e '%re' o+ '$o)< o+ $%e b(< -$);*-re $o $%e )o)o(*$ +rmer'.

!o'ards achievin$ the polic" thus declared, P.D. No. :;;, under its Section +, authoried PCAto utilie the CCS3 and the CID3 collections to acuire a co##ercial ban( and deposit the
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CCS3 lev" collections in said ban( interest free, the deposit 'ithdra'able onl" 'hen the ban(has attained a certain level of sufficienc" in its euit" capital. !he sa#e section also decreedthat all levies PCA is authoried to collect shall not be considered as special and8or

+-*)-r +*(' or +orm &r$ o+ $%e 3e(er

+*(' o+ $%e 3over(me($'ithin the conte#plation of P.D. No. :**.

-. P.D. No.


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deno#inated as A$ree#ent, dated Ma" *55 '%re'.*-It 'ould appear later that, pursuant to the stipulation on#aintainin$ Co2uan$co?s euit" position in the ban(, PCA 'ould cede to hi# *%G of its subscriptions to a0 the authoriedbut unissued shares of 36B and b0 the increase in 36B?s capital stoc( the euivalent of *;,-% and @-


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!hen ca#e the * Eduardo M. Co2uan$co, )r., pra"in$ that a su##ar" 2ud$#ent berendered>
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a. Declarin$ that Section * of P.D. No. :;; is unconstitutional insofar as it validates the provisions in the /PCA1Co2uan$co A$ree#ent = = =/ dated Ma" +;, *+%

A 2oint hearin$ on the separate #otions for su##ar" 2ud$#ent to deter#ine 'hat #aterial facts e=ist 'ith or 'ithoutcontrovers" then ensued. B" rder of March **, +%%&, the Sandi$anba"an detailed, based on this Court?s rulin$ in related

ill1$otten cases, the parties? #anifestations #ade in open court and the pleadin$s and evidence on record, the facts itfound to be 'ithout substantial controvers", to$ether 'ith the ad#issions and8or e=tent of the ad#ission #ade b" theparties respectin$ relevant facts, as follo's>

As culled fro# the e=haustive discussions and #anifestations of the parties in open court of their respective pleadin$s andevidence on record, the facts 'hich e=ist 'ithout an" substantial controvers" are set forth hereunder, to$ether 'ith thead#issions and8or the e=tent or scope of the ad#issions #ade b" the parties relatin$ to the relevant facts>

*. !he late President 3erdinand E. Marcos 'as President = = = for t'o ter#s under the *


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a0 /!his A$ree#ent #ade and entered into this da" of Ma", *


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-. Representation and 9arranties of Sellers

!he SE44ERS respectivel" and independentl" of each other represent and 'arrantthat>

a0 !he SE44ERS are the la'ful o'ners of, 'ith $ood #ar(etable title to,

the Contract Shares and that i0 the certificates to be delivered pursuantthereto have been validl" issued and are full" paid and non1assessable ii0the Contract Shares are free and clear of all liens, encu#brances,obli$ations, liabilities and other burdens in favor of the Ban( or third parties= = =.

!his representation shall survive the e=ecution and deliver" of thisA$ree#ent and the consu##ation or transfer hereb" conte#plated.

b0 !he e=ecution, deliver" and perfor#ance of this A$ree#ent b" theSE44ERS does not conflict 'ith or constitute an" breach of an" provision inan" a$ree#ent to 'hich the" are a part" or b" 'hich the" #a" be bound.

c0 !he" have co#plied 'ith the condition set forth in Article of theA#ended Articles of Incorporation of the Ban(.

;. Representation of B6OERS

= = = =

@. I#ple#entation

!he parties hereto hereb" a$ree to e=ecute or cause to be e=ecuted suchdocu#ents and instru#ents as #a" be reuired in order to carr" out the intent and

purpose of this A$ree#ent.

:. Notices

= = = =

IN 9I!NESS 97ERE3, the parties hereto have hereunto set their hands at the place and onthe date first above 'ritten.

PEDR C)6AN5Con his o'n behalf and in

behalf of the other

listed in Anne= /A/ hereof0SE44ERS0

ED6ARD C)6AN5C, )R.on his o'n behalf and in behalf

Sellers of the other Bu"ers0

B6OERS0

B">

ED5ARD ). AN5ARAAttorne"1in13act

= = = =


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b0 /A$ree#ent for the Acuisition of a Co##ercial Ban( for the Benefit of the Coconut 3ar#ers of thePhilippines, #ade and entered into this +;th da" of Ma" *


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N9, !7ERE3RE, for and in consideration of the fore$oin$ pre#ises and the other ter#sand conditions hereinafter contained, the parties hereb" declare and affir# that their principalcontractual intent is *0 to ensure that the coconut far#ers o'n at least @%G of the outstandin$capital stoc( of the Ban( and +0 that the SE44ER shall receive co#pensation for e=ercisin$his personal and e=clusive option to acuire the ption Shares, for transferrin$ such shares tothe coconut far#ers at the option price of P+%% per share, and for perfor#in$ the

#ana$e#ent services reuired of hi# hereunder.

*. !o ensure that the transfer to the coconut far#ers of the ption Shares is effected'ith the least possible dela" and to provide for the faithful perfor#ance of theobli$ations of the parties hereunder, the parties hereb" appoint the PhilippineNational Ban( as their escro' a$ent the /Escro' A$ent/0.

6pon e=ecution of this A$ree#ent, the B6OER shall deposit 'ith the Escro' A$entsuch a#ount as #a" be necessar" to i#ple#ent the ter#s of this A$ree#ent = = =.

+. As pro#ptl" as practicable after e=ecution of this A$ree#ent, the SE44ER shalle=ercise his option to acuire the ption Share and SE44ER shall i##ediatel"

thereafter deliver and turn over to the Escro' A$ent such stoc( certificates as areherein provided to be received fro# the e=istin$ stoc(holders of the Ban( b" virtue ofthe e=ercise on the afore#entioned option = = =.

&. !o ensure the stabilit" of the Ban( and continuit" of #ana$e#ent and creditpolicies to be adopted for the benefit of the coconut far#ers, the parties underta(e tocause the stoc(holders and the Board of Directors of the Ban( to authorie andapprove a #ana$e#ent contract bet'een the Ban( and the SE44ER under thefollo'in$ ter#s>

a0 !he #ana$e#ent contract shall be for a period of five ;0 "ears,rene'able for another five ;0 "ears b" #utual a$ree#ent of the SE44ERand the Ban(

b0 !he SE44ER shall be elected President and shall hold office at thepleasure of the Board of Directors. 9hile servin$ in such capacit", he shallbe entitled to such salaries and e#olu#ents as the Board of Directors #a"deter#ine

c0 !he SE44ER shall recruit and develop a professional #ana$e#enttea# to #ana$e and operate the Ban( under the control and supervision ofthe Board of Directors of the Ban(

d0 !he B6OER underta(es to cause three &0 persons desi$nated b" theSE44ER to be elected to the Board of Directors of the Ban(

e0 !he SE44ER shall receive no co#pensation for #ana$in$ the Ban(,other than such salaries or e#olu#ents to 'hich he #a" be entitled b"virtue of the dischar$e of his function and duties as President, provided = == and

f0 !he #ana$e#ent contract #a" be assi$ned to a #ana$e#ent co#pan"o'ned and controlled b" the SE44ER.


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-. As co#pensation for e=ercisin$ his personal and e=clusive option to acuire theption Shares and for transferrin$ such shares to the coconut far#ers, as 'ell as forperfor#in$ the #ana$e#ent services reuired of hi#, SE44ER shall receive euit"in the Ban( a#ountin$, in the a$$re$ate, to oneshare in the na#e of the SE44ER for ever" nine shares in the na#e of theB6OER.

b0 9ith respect to the Subscribed Shares, the B6OER underta(es, in orderto prevent the dilution of SE44ER?s euit" position, that it shall cede over tothe SE44ER @-,


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. !he B6OER shall e=peditiousl" distribute fro# ti#e to ti#e the shares of the Ban(, that shall be heldb" it for the benefit of the coconut far#ers of the Philippines under the provisions of this A$ree#ent, tosuch, coconut far#ers holdin$ re$istered CC36ND receipts on such euitable basis as #a" bedeter#ine b" the B6OER in its sound discretion.

&@*,%%% Class A shares, 'ith an a$$re$ate

par value of P&@,*%%,%%% and *&

i0 chan$e of corporate na#e to 3irst 6nited Coconut Ban(

ii0 replace the present provision restrictin$ the transferabilit" of the shares 'ith ali#itation on o'nership b" an" individual or entit" to not #ore than *%G of theoutstandin$ shares of the Ban(

iii0 provide that the holders of Class A shares shall not be entitled to pre1e#ptiveri$hts 'ith respect to the unissued portion of the authoried capital stoc( or an"increase thereof and

iv0 provide that the holders of Class B shares shall be absolutel" entitled to pre1e#ptive ri$hts, 'ith respect to the unissued portion of Class B shares co#prisin$part of the authoried capital stoc( or an" increase thereof, to subscribe to Class Bshares in proportion t the subscriptions of Class A shares, and to pa" for theirsubscriptions to Class B shares 'ithin a period of five ;0 "ears fro# the call of theBoard of Directors.

c0 !o increase the authoried capital stoc( of the Ban( fro# P;% Million to P*-% Million,divided into *,%*%,%% Class A shares and &


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f0 !o authorie and approve the #ana$e#ent contract provided in para$raph + above.

!he parties a$ree that the" shall vote their shares and ta(e all the necessar" corporate action in orderto carr" into effect the fore$oin$ provisions of this para$raph **, includin$ such other a#end#ents ofthe articles of incorporation and b"1la's of the Ban( as are necessar" in order to i#ple#ent theintention of the parties 'ith respect thereto.

*+. It is the conte#plation of the parties that the Ban( shall achieve a financial and euit" position to beable to lend to the coconut far#ers at preferential rates.

In order to achieve such ob2ective, the parties shall cause the Ban( to adopt a polic" of reinvest#ent, b"'a" of stoc( dividends, of such percenta$e of the profits of the Ban( as #a" be necessar".

*&. !he parties a$ree to e=ecute or cause to be e=ecuted such docu#ents and instru#ents as #a" bereuired in order to carr" out the intent and purpose of this A$ree#ent.

IN 9I!NESS 97ERE3 = = =

P7I4IPPINE CCN6! A6!7RI!OB6OER0

B">

ED6ARD C)6AN5C, )R.SE44ER0

MARIA C4ARA 4. 4BRE5A!

= = = =

:. Defendants 4obre$at, et al. and CC3ED, et al. and Ballares, et al. ad#it that the = = = PCA0 'as the / o$%er

b*er' re&re'e($e b e+e(($ E*ro M. Co6*(3)o,Jr. -( $%e M 1>75 A3reeme($ e($ere -($o be$4ee( PeroCo6*(3)oon his o'n behalf and in behalf of other sellers listed in Anne= /A/of the a$ree#ent0 and defendantEduardo M. Co2uan$co, )r. on his o'n behalf and in behalf of the other bu"ers0. Defendant Co2uan$co insists he 'as the/onl" bu"er/ under the aforesaid A$ree#ent.

. Defendant Eduardo M. Co2uan$co, )r. did not o'n an" share in the = = = 36B0 prior to the e=ecution of the t'oA$ree#ents = = =.


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:;; b" reference, refers to the /A5REEMEN! 3R !7E AC6ISI!IN 3 A CMMERCIA4 BANQ 3R !7E BENE3I!3 !7E CCN6! 3ARMERS 3 !7E P7I4IPPINES/ dated Ma" +;, *

a. the" are coconut far#ers 'ho sold coconut products

b. in the sale thereof, the" received CC36ND receipts pursuant to R.A. No. @+@%

c. the" re$istered the said CC36ND receipts and

d. b" virtue thereof, and under R.A. No. @+@%, P.D. Nos. :;;,


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a. there 'ere other coconut far#ers 'ho received 6CPB shares althou$h the" did not present saidCC36ND receipt because the PCA distributed the unclai#ed 6CPB shares not onl" to those 'ho

alread" received their 6CPB shares in e=chan$e for their CC36ND receipts b*$ 'o $o$%e )o)o(*$ +rmer' e$erm-(e b ($-o(

)e('*' )o(*)$e &*r'*($ $o PCA m-(-'$r$-ve-''*()e'

b. there 'ere other affidavits e=ecuted b" 4obre$at, Eleaar, Ballares and Alde$uer relative to the saiddistribution of the unclai#ed 6CPB shares and

c. the coconut far#ers clai# the 6CPB shares b" virtue of their co#pliance not onl" 'ith the la's#entioned in ite# d0 above but also 'ith the relevant issuances of the PCA such as, PCAAd#inistrative rder No. *, dated Au$ust +%, *+*

97ERE3RE, in vie' of the fore$oin$,4e r*e ' +oo4'>

= = = =

C. Re> M!IN 3R PAR!IA4 S6MMARO )6D5MEN! RE> ED6ARD M. C)6AN5C, )R.0 dated Septe#ber *,+%%+ filed b" plaintiff.

*. Sec. * of P.D. No. 755 - (o$ v-$e $%e A3reeme($

be$4ee( PCA ( e+e(($ E*ro M. Co6*(3)o,Jr. $e M 25, 1>75 (or - -$ 3-ve $%e A3reeme($$%e b-(-(3 +or)e o+ 4 be)*'e o+ $%e (o(&*b-)$-o( o+ $%e '- A3reeme($.
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+. Re$ardin$ the uestioned transfer of the shares of stoc( of 36B later 6CPB0 b" PCA to defendant Co2uan$coor the so1called /Co2uan$co 6CPB shares/ 'hich cost the PCA #ore than !en Million Pesos in CCS3 in *


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!he Issues

Co2uan$co?s petition for#ulates the issues in uestion for#, as follo's>+;

a. Is the acuisition of the so1called Co2uan$co, )r. 6CPB shares b" petitioner Co2uan$co = = = /not supported b"valuable consideration and, therefore, null and void/

b. Did the Sandi$anba"an have 2urisdiction, in Civil Case No. %%&&1A, an /ill1$otten 'ealth/ case brou$ht underE Nos. * and +, to declare the Co2uan$co 6CPB shares acuired b" virtue of the Pedro Co2uan$co, et al.A$ree#ent and8or the PCA A$ree#ent null and void because /not supported b" valuable consideration/

c. 9as the clai# that the acuisition b" petitioner Co2uan$co of shares representin$ :.+G of the outstandin$capital stoc( of 36B later 6CPB0 /not supported b" valuable consideration/, a /clai#/ pleaded in the co#plaintand #a" therefore be the basis of a /su##ar" 2ud$#ent/ under Section *, Rule &; of the Rules of Court

d. B" declarin$ the Co2uan$co 6CPB shares as /not supported b" valuable consideration, and therefore, null andvoid/, did the Sandi$anba"an effectivel" nullif" the PCA A$ree#ent Ma" the Sandi$anba"an nullif" the PCAA$ree#ent 'hen the parties to the A$ree#ent, na#el"> = = = concede its validit" If the PCA A$ree#ent be

dee#ed /null and void/, should not the 36B later 6CPB0 shares revert to petitioner Co2uan$co under the PCAA$ree#ent0 or to Pedro Co2uan$co, et al. = = = 9ould there be a basis then, even assu#in$ the absence ofconsideration = = =, to declare :.+G 6CPB shares of petitioner Co2uan$co as /conclusivel" o'ned b" the plaintiffRepublic of the Philippines/+@

!he Court?s Rulin$

I

!7E SANDI5ANBAOAN 7AS )6RISDIC!IN ER !7E S6B)EC! MA!!ER 3 !7E S6BDIIDED AMENDEDCMP4AIN!S, INC46DIN5 !7E S7ARES A44E5ED4O AC6IRED BO C)6AN5C BO IR!6E 3 !7E PCAA5REEMEN!S.

!he issue of 2urisdiction over the sub2ect #atter of the subdivided a#ended co#plaints has pere#ptoril" been put to restb" the Court in its )anuar" +-, +%*+ Decision in CC3ED v. Republic. !here, the Court, citin$ Re$alado+:and settled

2urisprudence, stressed the follo'in$ interloc(in$ precepts> Sub2ect #atter 2urisdiction is conferred b" la', not b" theconsent or acuiescence of an" or all of the parties. In turn, the issue on 'hether a suit co#es 'ithin the penu#bra of astatutor" confer#ent is deter#ined b" the alle$ations in the co#plaint, re$ardless of 'hether or not the suitor 'ill beentitled to recover upon all or part of the clai#s asserted.

!he Republic?s #aterial aver#ents in its co#plaint subdivided in CC No. %%&&1A included the follo'in$>

CC No. %%&&1A

*+. Defendant Eduardo M. Co2uan$co, )r. served ' &*b-) o++-)er *r-(3 $%eMr)o' m-(-'$r$-o(. Durin$ the period of his incu#benc" as a public officer, he acuired assets,funds and other propert" $rossl" and #anifestl" disproportionate to his salaries, la'ful inco#e and inco#e fro#le$iti#atel" acuired propert".

*&. Defendant Eduardo M. Co2uan$co, )r., ta(in$ undue advanta$e of his association, influence, connection, and actin$ inunla'ful concert 'ith Defendants 3erdinand E. Marcos and I#elda R. Marcos, AND !7E INDIID6A4 DE3ENDAN!S,
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e#bar(ed upon devices, sche#es and strata$e#s, to un2ustl" enrich the#selves at the e=pense of Plaintiff and the 3ilipinopeople, such as 'hen he

a0 #anipulated, be$innin$ the "ear *

i0 Defendant Eduardo Co2uan$co, )r. coveted the coconut lev" funds as a cheap, lucrative and ris(1freesource of funds 'ith 'hich to e=ercise his private option to bu" the controllin$ interest in 36B thus,clai#in$ that the :+.+G of the outstandin$ capital stoc( of 36B could onl" be purchased and transferredthrou$h the e=ercise of his /personal and e=clusive action option to acuire the *--,%%% shares/ of theban(, Defendant Eduardo M. Co2uan$co, )r. and PCA, = = = e=ecuted on Ma" +@, *


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)o('$-$*$-o( ( 4'of the Republic of the Philippines, to the $rave and irreparableda#a$e of Plaintiff and the 3ilipino people.+

In no uncertain ter#s, the Court has upheld the Sandi$anba"an?s assu#ption of 2urisdiction over the sub2ect #atter of CivilCase Nos. %%&&1A and %%&&13.+


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= = = =

!here 'as no actual need for Republic, as plaintiff a uo, to adduce evidence to sho' that the Sandi$anba"an has2urisdiction over the sub2ect #atter of the co#plaints as it leaned on the aver#ents in the initiator" pleadin$s to #a(evisible the 2urisdiction of the Sandi$anba"an over the ill1$otten 'ealth co#plaints. As previousl" discussed, a perusal of thealle$ations easil" reveals the sufficienc" of the state#ent of #atters disclosin$ the clai# of the $overn#ent a$ainst the

coco lev" funds and the assets acuired directl" or indirectl" throu$h said funds as ill1$otten 'ealth. Moreover, the Courtfinds no rule that directs the plaintiff to first prove the sub2ect #atter 2urisdiction of the court before 'hich the co#plaint isfiled. Rather, such burden falls on the shoulders of defendant in the hearin$ of a #otion to dis#iss anchored on said$round or a preli#inar" hearin$ thereon 'hen such $round is alle$ed in the ans'er.

= = = =

4est it be overloo(ed, this Court has alread" decided that the seuestered shares are pri#a facie ill1$otten 'ealthrenderin$ the issue of the validit" of their seuestration and of the 2urisdiction of the Sandi$anba"an over the case be"onddoubt. In the case of CC3ED v. PC55, 9e stated that>

It is of course not for this Court to pass upon the factual issues thus raised. !hat function pertains to the Sandi$anba"an in

the first instance. 3or purposes of this proceedin$, all that the Court needs to deter#ine is 'hether or not there is pri#afacie 2ustification for the seuestration ordered b" the PC55. !he Court is satisfied that there is. !he cited incidents, $iventhe public character of the coconut lev" funds, place petitioners CC3ED and its leaders and officials, at least pri#afacie, suarel" 'ithin the purvie' of E=ecutive rders Nos. *, + and *-, as construed and applied in BASEC, to 'it>

/*. that ill1$otten properties 'ere0 a#assed b" the leaders and supporters of the previous re$i#e

/a. #ore particularl", that Ti0 Ill1$otten 'ealth 'as accu#ulated b" = = = Marcos, his i##ediate fa#il", relatives,subordinates and close associates, = = = and0 business enterprises and entities ca#e to be0 o'ned or controlled b"the#, durin$ = = = the Marcos0 ad#inistration, directl" or throu$h no#inees, b" ta(in$ undue advanta$e of their publicoffice and usin$ their po'ers, authorit", influence, connections or relationships?

/b. other'ise stated, that Tthere are assets and properties purportedl" pertainin$ to the Marcoses, their close relatives,subordinates, business associates, du##ies, a$ents or no#inees 'hich had been or 'ere acuired b" the# directl" orindirectl", throu$h or as a result of the i#proper or ille$al use of funds or properties o'ned b" the 5overn#ent = = = or an"of its branches, instru#entalities, enterprises, ban(s or financial institutions, or b" ta(in$ undue advanta$e of their office,authorit", influence, connections or relationship, resultin$ in their un2ust enrich#ent = = =

= = = =

+. !he petitioners? clai# that the assets acuired 'ith the coconut lev" funds are privatel" o'ned b" the coconut far#ers isfounded on certain provisions of la', to 'it Sec. :, RA @+@% and Sec. ;, Art. III, PD *-@ 9ords in brac(et added italicsin the ori$inal0.

= = = =

E.. *, +, *- and *-1A, it bears to stress, 'ere issued precisel" to effect the recover" of ill1$otten assets a#assed b" theMarcoses, their associates, subordinates and cronies, or throu$h their no#inees. Be that as it #a", it stands to reason thatpersons listed as associated 'ith the Marcoses refer to those in possession of such ill1$otten 'ealth but holdin$ the sa#ein behalf of the actual, albeit undisclosed o'ner, to prevent discover" and conseuentl" recover". Certainl", it is 'ell1ni$hinconceivable that ill1$otten assets 'ould be distributed to and left in the hands of individuals or entities 'ith obvioustraceable connections to Mr. Marcos and his cronies. !he Court can ta(e, as it has in fact ta(en, 2udicial notice of sche#esand #achinations that have been put in place to (eep ill1$otten assets under 'raps. !hese 'ould include the settin$ up of


22/43

la"ers after la"ers of shell or du##", but controlled, corporations&*or #anipulated instru#ents calculated to confuse if notalto$ether #islead 'ould1be investi$ators fro# recoverin$ 'ealth deceitfull" a#assed at the e=pense of the people orsi#pl" the fruits thereof. !ransferrin$ the ille$al assets to third parties not readil" perceived as Marcos cronies 'ould beanother. So it 'as that in PC55 v. Pena, the Court, describin$ the rule of Marcos as a /'ell entrenched plunderin$ re$i#eof t'ent" "ears,/ noted the #a$nitude of the past re$i#e?s or$anied pilla$e and the in$enuit" of the plunderers andpilla$ers 'ith the assistance of e=perts and the best le$al #inds in the #ar(et. &+

Prescindin$ fro# the fore$oin$ pre#ises, there can no lon$er be an" serious challen$e as to the Sandi$anba"an?s sub2ect#atter 2urisdiction. And in connection there'ith, the Court 'rote in CC3ED v. Republic, that the instant petition shall bedecided separatel" and should not be affected b" the )anuar" +-, +%*+ Decision, /save for deter#inativel" le$al issuesdirectl" addressed/ therein.&&!hus>

9e clarif" that PS)1A is sub2ect of another petition for revie' interposed b" Eduardo Co2uan$co, )r., in 5.R. No. *%:%;entitled, Eduardo M. Co2uan$co, )r. v. Republic of the Philippines, 'hich shall be decided separatel" b" this Court. Saidpetition should accordin$l" not be affected b" this Decision save for deter#inativel" le$al issues directl" addressedherein.&-E#phasis urs.0

9e, therefore, reiterate our holdin$ in CC3ED v. Republic respectin$ the Sandi$anba"an?s 2urisdiction over the sub2ect

#atter of Civil Case No. %%&&1A, includin$ those #atters 'hose ad2udication 9e shall resolve in the present case.

II

PRE4IMINARI4O, !7E A5REEMEN! BE!9EEN !7E PCA AND ED6ARD M. C)6AN5C, )R. DA!ED MAO +;, *


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-(-'&e('be )o(-$-o( +or $%e e++e)$-v-$ o+ 4. !aUada v. !uvera&:said as#uch>

Publication of the la' is indispensable in ever" case = = =.

= = = =

9e note at this point $%e )o()*'-ve &re'*m&$-o( $%$ ever &er'o(


24/43

'e)re$'. M"sterious pronounce#ents and ru#ored rules cannot be reco$nied as bindin$ unless their e=istenceand contents are confir#ed b" a valid publication intended to #a(e full disclosure and $ive proper notice to the people.!he furtive la' is li(e a scabbarded saber that cannot feint, parr" or cut unless the na(ed blade is dra'n. &

= = = !his presu#ption appellants cannot overco#e b" a si#ple assertion of lac( of consideration. Especiall" #a" not thepresu#ption be so li$htl" set aside 'hen the contract itself states that consideration 'as $iven, and the sa#e has beenreduced into a public instru#ent 'ill all due for#alities and sole#nities as in this case. E#phasis ours.0

A perusal of the PCA1Co2uan$co A$ree#ent disclosed an e=press state#ent of consideration for the transaction>

N9, !7ERE3RE, for and in consideration of the fore$oin$ pre#ises and the other ter#s and conditions hereinaftercontained, the parties hereb" declare and affir# that their principal contractual intent is *0 to ensure that the coconutfar#ers o'n at least @%G of the outstandin$ capital stoc( of the Ban(, and +0 that the SE44ER shall receiveco#pensation for e=ercisin$ his personal and e=clusive option to acuire the ption Shares, for transferrin$ such shares tothe coconut far#ers at the option price of P+%% per share, and for perfor#in$ the #ana$e#ent services reuired of hi#hereunder.

= = = =

-. As co#pensation for e=ercisin$ his personal and e=clusive option to acuire the ption ShareAppl"in$ Sa#anilla to thecase at bar, the e=press and positive declaration b" the parties of the presence of adeuate consideration in the contract#a(es conclusive the presu#ption of sufficient consideration in the PCA A$ree#ent. Moreover, the option to purchaseshares and #ana$e#ent services for 6CPB 'as alread" availed of b" petitioner Co2uan$co for the benefit of the PCA. !hee=ercise of such ri$ht resulted in the e=ecution of the PC1EC) A$ree#ent, 'hich fact is not disputed. !he docu#ent itselfis incontrovertible proof and hard evidence that petitioner Co2uan$co had the r i$ht to purchase the sub2ect 36B no'6CPB0 shares. Res ipsa louitur.

!he Sandi$anba"an, ho'ever, pointed to the perceived /lac( of an" pecuniar" value or advanta$e to the $overn#ent of

the said option, 'hich could co#pensate for the $enerous pa"#ent to hi# b" PCA of valuable shares of stoc(, asstipulated in the Ma" +;, *

Art. *&;;. E=cept in cases specified b" la', lesion or inadeuac" of cause shall not invalidate a contract, unless there hasbeen fraud, #ista(e or undue influence. E#phasis supplied.0
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Alsua1Betts v. Court of Appeals;%is instructive that lac( of a#ple consideration does not nullif" the contract>

Inadeuac" of consideration does not vitiate a contract unless it is proven 'hich in the case at bar 'as not, that there 'asfraud, #ista(e or undue influence. Article *&;;, Ne' Civil Code0. 9e do not find the stipulated price as so inadeuate toshoc( the court?s conscience, considerin$ that the price paid 'as #uch hi$her than the assessed value of the sub2ectproperties and considerin$ that the sales 'ere effected b" a father to her dau$hter in 'hich case filial love #ust be ta(en

into account. E#phasis supplied.0s and for transferrin$ such shares to the coconut far#ers, as 'ell as for perfor#in$ the#ana$e#ent services reuired of hi#, SE44ER shall receive euit" in the Ban( a#ountin$, in the a$$re$ate, to

= = = Courts cannot follo' one ever" step of his life and e=tricate hi# fro# bad bar$ains, protect hi# fro# un'iseinvest#ents, relieve hi# fro# one1sided contracts, or annul the effects of foolish acts. = = = Men #a" do foolish thin$s,#a(e ridiculous contracts, use #iserable 2ud$#ent, and lose #one" b" the# indeed, all the" have in the 'orld but notfor that alone can the la' intervene and restore. !here #ust be, in addition, a violation of la', the co##ission of 'hat thela' (no's as an actionable 'ron$, before the courts are authoried to la" hold of the situation and re#ed" it. E#phasisours.0

9hile one #a" posit that the PCA1Co2uan$co A$ree#ent puts PCA and the coconut far#ers at a disadvanta$e, the factsdo not #a(e out a clear case of violation of an" la' that 'ill necessitate the recall of said contract. Indeed, the anti1$raftcourt has not put for'ard an" specific stipulation therein that is at 'ar 'ith an" la', or the Constitution, for that #atter. It iseven clear as da" that none of the parties 'ho entered into the t'o a$ree#ents 'ith petitioner Co2uan$co contested norsou$ht the nullification of said a$ree#ents, #ore particularl" the PCA 'ho is al'a"s provided le$al advice in saidtransactions b" the 5overn#ent corporate counsel, and a batter" of la'"ers and presu#abl" the CA auditor assi$ned tosaid a$enc". A $overn#ent a$enc", li(e the PCA, stoops do'n to level of an ordinar" citien 'hen it enters into a privatetransaction 'ith private individuals. In this settin$, PCA is bound b" the la' on contracts and is bound to co#pl" 'ith theter#s of the PCA1Co2uan$co A$ree#ent 'hich is the la' bet'een the parties. 9ith the silence of PCA not to challen$e thevalidit" of the PCA1Co2uan$co A$ree#ent and the inabilit" of $overn#ent to de#onstrate the lac( of a#ple considerationin the transaction, the Court is left 'ith no other choice but to uphold the validit" of said a$ree#ents.

9hile consideration is usuall" in the for# of #one" or propert", it need not be #onetar". !his is clear fro# Article *&;%'hich reads>

Art. *&;%. In onerous contracts the cause is understood to be, for each contractin$ part", the prestation or pro#ise of athin$ or service b" the other in re#unerator" ones, the service or benefit 'hich is re#unerated and in contracts of purebeneficence, the #ere liabilit" of the benefactor. E#phasis supplied.0

5abriel v. Monte de Piedad " Ca2a de Ahorros ;+tells us of the #eanin$ of consideration>

= = = A )o('-er$-o(, -( $%e e3 'e('e o+ $%e 4or, -' 'ome

r-3%$, -($ere'$, be(e+-$, or v($3e )o(+erre *&o( $%e&rom-'or, $o 4%-)% %e -' o$%er4-'e (o$ 4+* e($-$e, or( e$r-me($, &re6*-)e, o'', or -'v($3e '*++ere or*(er$


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!he Court rules that the transfer of the sub2ect 6CPB shares is clearl" supported b" v*be)o('-er$-o(.

!o 2ustif" the nullification of the PCA1Co2uan$co A$ree#ent, the Sandi$anba"an centered on the alle$ed i#a$inar" optionclai#ed b" petitioner to bu" the 36B shares fro# the Pedro Co2uan$co $roup. It relied on the phrase /in behalf of certainother bu"ers/ #entioned in the PC1EC) A$ree#ent as basis for the findin$ that petitioner?s option is neither personal nore=clusive. !he pertinent portion of said a$ree#ent reads>

ED6ARD C)6AN5C, )R., 3ilipino, of le$al a$e and 'ith residence at *&@


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A$ain, onl" the parties can e=plain the reasons behind the e=ecution of the t'o a$ree#ents and the SPA on the sa#e da".!he" 'ere, ho'ever, precluded fro# elucidatin$ the reasons behind such occurrence. In the absence of such illu#inatin$proof, the proposition that the option does not e=ist has no le$ to stand on.

More i#portantl", the fact that the PC1EC) A$ree#ent 'as e=ecuted not earlier than Ma" +;, *

+. As pro#ptl" as practicable after e=ecution of this A$ree#ent, the SE44ER shall e=ercise his option to acuire the ptionShares and SE44ER shall i##ediatel" thereafter deliver and turn over to the Escro' A$ent such stoc( certificates as areherein provided to be received fro# the e=istin$ stoc(holders of the ban( b" virtue of the e=ercise on the afore#entionedoption. !he Escro' A$ent shall thereupon issue its chec( in favor of the SE44ER coverin$ the purchase price for theshares delivered. E#phasis supplied.0

!he Sandi$anba"an vie'ed the co#pensation of petitioner of *-,-%% 36B shares as e=orbitant. In the absence of proof tothe contrar" and considerin$ the absence of an" co#plaint of ille$alit" or fraud fro# an" of the contractin$ parties, then thepresu#ption that /private transactions have been fair and re$ular/;ust appl".

4astl", respondent inter2ects the thesis that PCA could not validl" enter into a ban( #ana$e#ent a$ree#ent 'ith petitionersince PCA has a personalit" separate and distinct fro# that of 36B. Evidentl", it is PCA 'hich has the ri$ht to challen$ethe stipulations on the #ana$e#ent contract as unenforceable. 7o'ever, PCA chose not to assail said stipulations andinstead even co#plied 'ith and i#ple#ented its prestations contained in said stipulations b" installin$ petitioner asChair#an of 6CPB. !hus, PCA has 'aived and forfeited its ri$ht to nullif" said stipulations and is no' estopped fro#uestionin$ the sa#e.

In vie' of the fore$oin$, the Co*r$ -' e+$ 4-$% (o o&$-o( b*$ $o *&%o $%ev--$ o+ $%e $4o 3reeme($' -( ;*e'$-o(.

I

C)6AN5C IS N! EN!I!4ED ! !7E 6CPB S7ARES 97IC7 9ERE B657! 9I!7 P6B4IC 36NDS AND7ENCE, ARE P6B4IC PRPER!O.

!he coconut lev" funds 'ere e=acted for aspecial public purpose. Conseuentl", an"use or transfer of the funds that directl"benefits private individuals should be

invalidated.

!he issue of 'hether or not ta=pa"ers? #one", or funds and propert" acuired throu$h the i#position of ta=es #a" be usedto benefit a private individual is once a$ain posed. Preli#inaril", the instant case inuires 'hether the coconut lev" funds,and accordin$l", the 6CPB shares acuired usin$ the coconut lev" funds are public funds. Indeed, the ver" sa#e issuetoo( center sta$e, discussed and 'as directl" addressed in CC3ED v. Republic. And there is hardl" an" uestion aboutthe sub2ect funds? public and special character. !he follo'in$ e=cerpts fro# CC3ED v. Republic, ;-citin$ Republic v.CC3ED and related cases, settle once and for all this core, deter#inative issue>
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Indeed, 9e have hitherto discussed, the coconut lev" 'as i#posed in the e=ercise of the State?s inherent po'er ofta=ation. As 9e 'rote in Republic v. CC3ED>

Indeed, coconut lev" funds parta(e of the nature of ta=es, 'hich, in $eneral, are enforced proportional contributions fro#persons and properties, e=acted b" the State b" virtue of its soverei$nt" for the support of $overn#ent and for all publicneeds.

Based on its definition, a ta= has three ele#ents, na#el"> a0 it is an enforced proportional contribution fro# persons andproperties b0 it is i#posed b" the State b" virtue of its soverei$nt" and c0 it is levied for the support of the $overn#ent.!he coconut lev" funds fall suarel" into these ele#ents for the follo'in$ reasons>

a0 !he" 'ere $enerated b" virtue of statutor" enact#ents i#posed on the coconut far#ers reuirin$ the pa"#ent ofprescribed a#ounts. !hus, PD No. +:@, 'hich created the CCS30, #andated the follo'in$>

/a. A lev", initiall", of P*;.%% per *%% (ilo$ra#s of copra resecada or its euivalent in other coconut products, shall bei#posed on ever" first sale, in accordance 'ith the #echanics established under RA @+@%, effective at the start ofbusiness hours on Au$ust *%, * .

b0 !he coconut levies 'ere i#posed pursuant to the la's enacted b" the proper le$islative authorities of the State.Indeed, the CCS3 'as collected under PD No. +:@, ./

c0 !he" 'ere clearl" i#posed for a public purpose. !here is absolutel" no uestion that the" 'ere collected to advancethe $overn#ent?s avo'ed polic" of protectin$ the coconut industr".

!his Court ta(es 2udicial notice of the fact that the coconut industr" is one of the $reat econo#ic pillars of our nation, andcoconuts and their b"products occup" a leadin$ position a#on$ the countr"?s e=port products .


31/43

!a=ation is done not #erel" to raise revenues to support the $overn#ent, but also to provide #eans for the rehabilitationand the stabiliation of a threatened industr", 'hich is so affected 'ith public interest as to be 'ithin the police po'er of theState .

Even if the #one" is allocated for a special purpose and raised b" special #eans, it is still public in character. InCocofed v. PC55, the Court observed that certain a$encies or enterprises /'ere or$anied and financed 'ith revenues

derived fro# coconut levies i#posed under a succession of la' of the late dictatorship 'ith deposed 3erdinand Marcosand his cronies as the suspected authors and chief beneficiaries of the resultin$ coconut industr" #onopol"./ !he Courtcontinued> /. It cannot be denied that the coconut industr" is one of the #a2or industries supportin$ the nationalecono#". It is, therefore, the State?s concern to #a(e it a stron$ and secure source not onl" of the livelihood of asi$nificant se$#ent of the population, but also of e=port earnin$s the sustained $ro'th of 'hich is one of the i#peratives ofecono#ic stabilit". E#phasis urs.0

!he follo'in$ parallel doctrinal lines fro# Pa#bansan$ Qoalis"on n$ #$a Sa#ahan$ Ma$sasa(a at Man$$a$a'a saNi"u$an PQSMMN0 v. E=ecutive Secretar";;ca#e ne=t>

!he Court 'as satisfied that $%e )o)oev +*(' 4ere r-'e &*r'*($ $o

4 $o '*&&or$ &ro&er 3over(me($ &*r&o'e. !he" 'ere raised 'ith theuse of the police and ta=in$ po'ers of the State for the benefit of the coconut industr" and its far#ers in $eneral. !he CA

revie'ed the use of the funds. !he Bureau of Internal Revenue BIR0 treated the# as public funds and $%e ver4' 3over(-(3 )o)o(*$ ev-e' re)o3(-=e $%e-r &*b-))%r)$er.

!he Court has also recentl" declared that the coco1lev" funds are in the nature of ta=es and can onl" be used for public

purpose. T?e' re e(+or)e &ro&or$-o( )o($r-b*$-o(' +rom

&er'o(' ( &ro&er$, ev-e b $%e S$$e b v-r$*e o+ -$''overe-3($ +or $%e '*&&or$ o+ $%e 3over(me($ ( +or -$'&*b-) (ee'. 7ere, the coco1lev" funds 'ere i#posed pursuant to la', na#el", R.A. @+@% and P.D. +:@.!he funds 'ere collected and #ana$ed b" the PCA, an independent $overn#ent corporation directl" under the President.And, as the respondent public officials pointed out, the pertinent la's used the ter# lev", 'hich #eans to ta=, in describin$the e=action.

f course, unli(e ordinar" revenue la's, R.A. @+@% and P.D. +:@ did not raise #one" to boost the $overn#ent?s $eneralfunds but to provide #eans for the rehabilitation and stabiliation of a threatened industr", the coconut industr", 'hich is so

affected 'ith public interest as to be 'ithin the police po'er of the State.

T%e +*(' 'o*3%$ $o'*&&or$ $%e )o)o(*$ -(*'$r, o(e o+ $%e m-( e)o(om-)b)


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3ro# the fore$oin$, it is at once apparent that an" propert" acuired b" #eans of the coconut lev" funds, such as thesub2ect 6CPB shares, should be treated as public funds or public propert", sub2ect to the burdens and restrictions attachedb" la' to such propert". CC3ED v. Republic, delved into such li#itations, thusl">

9e have ruled ti#e and a$ain that ta=es are i#posed onl" for a public purpose. /T%e )((o$ be

*'e +or &*re &r-v$e &*r&o'e' or +or $%e e?)*'-vebe(e+-$ o+ &r-v$e &er'o('./ %e( 4 -m&o'e' $?e' orev-e' +rom $%e &*b-), 4-$% $%e -($e($ $o 3-ve *(*e be(e+-$or v($3e $o &r-v$e &er'o(', or $%e &romo$-o( o+ &r-v$ee($er&r-'e', $%$ 4 )((o$ be '- $o '$-'+ $%ere;*-reme($ o+ &*b-) &*r&o'e. In 5aston v. Republic Planters Ban(, the petitionin$ su$arproducers, su$arcane planters and #illers sou$ht the distribution of the shares of stoc( of the Republic Planters Ban(

RPB0, alle$in$ that the" are the true beneficial o'ners thereof. In that case, the invest#ent, i.e., the purchase of RPB,'as funded b" the deduction of PhP *.%% per picul fro# the su$ar proceeds of the su$ar producers pursuant to P.D. No.&. In rulin$ a$ainst the petitioners, the Court held that to rule in their favor 'ould contravene the $eneral principle that

revenues received fro# the i#position of $?e' or ev-e' )((o$ be *'e +or&*re &r-v$e &*r&o'e' or +or $%e e?)*'-ve be(e+-$ o+&r-v$e &er'o('./ !he Court a#pl" reasoned that the su$ar stabiliation fund is to /be utilied for thebenefit of the entire su$ar industr", and all its co#ponents, stabiliation of the do#estic #ar(et includin$ forei$n #ar(et,the industr" bein$ of vital i#portance to the countr"?s econo#" and to national interest./

Si#ilarl" in this case, the coconut lev" funds 'ere sourced fro# +or)e e?)$-o(' e)ree*(er P.D. No'. 22, 27@ ( 582, mo(3 o$%er', 4-$% $%ee(3o o+ eveo&-(3 $%e e($-re )o)o(*$ -(*'$r. Clearl", to holdtherefore, eve( b 4, that the revenues received fro# the i#position of the coconut levies be used purel"+or &r-v$e &*r&o'e' $o be o4(e b &r-v$e -(-v-*' -($%e-r &r-v$e )&)-$ ( +or $%e-r be(e+-$,4o* )o($rve(e$%e r$-o(e be%-( $%e -m&o'-$-o( o+ $?e' or ev-e' .

Needless to stress, )o*r$' o (o$, ' $%e )((o$, o4 b 6*-)-+-$ $%e )o(ver'-o( o+ '&e)- +*(' -($o &r-v$e +*( +or$%e be(e+-$ o+ &r-v$e -(-v-*'. In the sa#e vein, e )((o$'*b')r-be $o $%e -e o+ 4%$ &&er' $o be ( -(-re)$ -+


33/43

(o$ e?)$ -re)$ )o(ver'-o( o+ '&e)- +*(' -($o &r-v$e+*(', i.e., b" usin$ special funds to purchase shares of stoc(s, 'hich in turn 'ould be distributed for free to privateindividuals. Even if these private individuals belon$ to, or are a part of the coconut industr", the free distribution of sharesof stoc(s purchased 'ith special public funds to the#, nevertheless cannot be 2ustified. !he ratio in 5aston, as articulated

belo', applies #utatis #utandis to this case>

!he stabiliation fees in uestion are levied b" the State for a special purpose that of /financin$ the $ro'th anddevelop#ent of the su$ar industr" and all its co#ponents, stabiliation of the do#estic #ar(et includin$ the forei$n#ar(et./ !he fact that the State has ta(en possession of #one"s pursuant to la' is sufficient to constitute the# as statefunds even thou$h the" are held for a special purpose.

!hat the fees 'ere collected fro# su$ar producers etc., and that the funds 'ere channeled to the purchase of shares ofstoc( in respondent Ban( do not convert the funds into a trust fund for their benefit nor #a(e the# the beneficial o'ners ofthe shares so purchased. It is but rational that the fees be collected fro# the# since it is also the" 'ho are benefited fro#the e=penditure of the funds derived fro# it. .;@

In this case, the coconut lev" funds 'ere bein$ e=acted fro# copra e=porters, oil #illers, desiccators and other end1usersof copra or its euivalent in other coconut products.;:4i(e'ise so, the funds here 'ere channeled to the purchase of theshares of stoc( in 6CPB. Dra'in$ a clear parallelis# bet'een 5aston and this case, the fact that the coconut lev" funds

'ere collected fro# the persons or entities in the coconut industr", a#on$ others, does not and cannot entitle the# to bebeneficial o'ners of the sub2ect funds or #ore bluntl", o'ners thereof in their private capacit". Parentheticall", the saidprivate individuals cannot o'n the 6CPB shares of stoc(s so purchased usin$ the said special funds of the$overn#ent.;E#phasis urs.0

As the coconut lev" funds parta(e of the nature of ta=es and can onl" be used for public purpose, and i#portantl", for thepurpose for 'hich it 'as e=acted, i.e., the develop#ent, rehabilitation and stabiliation of the coconut industr", the" cannotbe used to benefit'hether directl" or indirectl" private individuals, be it b" 'a" of a co##ission, or as the sub2ect

A$ree#ent interestin$l" 'ords it, co#pensation. Conseuentl", Co6*(3)o )((o$ '$( $o

be(e+-$ b re)e-v-(3, -( %-' &r-v$e )&)-$, 7.22 o+ $%e!UB '%re' 4-$%o*$ v-o$-(3 $%e )o('$-$*$-o( )ve$ $%$&*b-) +*(' )( o( be *'e +or &*b-) &*r&o'e. Accordin$l", the:.++G 36B 6CPB0 shares that 'ere $iven to Co2uan$co shall be returned to the 5overn#ent, to be used /onl" for thebenefit of all coconut far#ers and for the develop#ent of the coconut industr"./ ;

C. Re> M!IN 3R PAR!IA4 S6MMARO )6D5MEN! RE> ED6ARD M. C)6AN5C, )R.0 dated Septe#ber *,+%%+ filed b" Plaintiff.

*. Sec. * of P.D. No. :;; did not validate the A$ree#ent bet'een PCA and defendant Eduardo M. Co2uan$co, )r.dated Ma" +;, *

ARA LOURDES P. A. SERENOMChief )ustice


36/43

No part0ANTONO T. CARPOV

Associate )ustice

No part0TERESTA J. LEONARDODE CASTROV

Associate )ustice

n leave0

ARTURO D. BRONVV

Associate )ustice

No part0

DOSDADO M. PERALTAV

Associate )ustice

LUCAS P. BERSAMNAssociate )ustice

MARANO C. DEL CASTLLOAssociate )ustice

ROBERTO A. ABADAssociate )ustice

MARTN S. #LLARAMA, JR.Associate )ustice

JOSE PORTUGAL PEREVV

Associate )usticeJOSE CATRAL MENDOA

Associate )ustice

n leave0BEN#ENDO L. REFES

Associate )ustice

n leave0ESTELA M. PERLASBERNABEVV

Associate )ustice

MAR#C MARO #CTOR !. LEONENAssociate )ustice

C E R ! I 3 I C A ! I N

Pursuant to Section *&, Article III of the Constitution, it is hereb" certified that the conclusions in the above Decision hadbeen reached in consultation before the case 'as assi$ned to the 'riter of the opinion of the Court.

MARA LOURDES P. A. SERENOChief )ustice

!oo$(o$e'

VNo part.

VVn leave.

*5.R. Nos. *::;:1; W *:*


37/43

-Penned b" Associate )ustice !eresita 4eonardo1De Castro no' a #e#ber of this Court0, concurred in b"Associate )ustices Diosdado M. Peralta no' also a #e#ber of this Court0 and 3rancisco 7. illaru, )r. rollo,pp. *:

97ERE3RE, the petitions in 5.R. Nos. *::;:1; and *::

and that the Philippine Coconut Authorit" is hereb" authoried to distribute, for free, the shares ofstoc( of the ban( it acuired to the coconut far#ers under such rules and re$ulations it #a" pro#ul$ate.

ta(en in relation to Section + of the sa#e P.D., is unconstitutional> i0 for havin$ allo'ed the use of theCCS3 to benefit directl" private interest b" the outri$ht and unconditional $rant of absolute o'nership ofthe 36B86CPB shares paid for b" PCA entirel" 'ith the CCS3 to the undefined /coconut far#ers/,

'hich ne$ated or circu#vented the national polic" or public purpose declared b" P.D. No. :;; toaccelerate the $ro'th and develop#ent of the coconut industr" and achieve its vertical inte$ration andii0 for havin$ undul" dele$ated le$islative po'er to the PCA.
http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt4http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt4http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt5http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt5http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt6http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt6http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt7http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt7http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt4http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt5http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt6http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt7


38/43

b. !he i#ple#entin$ re$ulations issued b" PCA, na#el", Ad#inistrative rder No. *, Series of *

97ERE3RE, the M!IN 3R EEC6!IN 3 PAR!IA4 S6MMARO )6D5MEN! RE> CII3B4CQ 3 SMC S7ARES 3 S!CQ0 dated Au$ust , +%%; of the plaintiff is hereb" denied for lac( of#erit. 7o'ever, this Court orders the severance of this particular clai# of Plaintiff. !he Partial Su##ar"

)ud$#ent dated Ma" :, +%%- is no' considered a separate final and appealable 2ud$#ent 'ith respectto the said CII3 Bloc( of SMC shares of stoc(.

!he Partial Su##ar" )ud$#ent rendered on Ma" :, +%%- is #odified b" deletin$ the last para$raph ofthe dispositive portion, 'hich 'ill no' read, as follo's>

97ERE3RE, in vie' of the fore$oin$, 'e hold that>

!he Motion for Partial Su##ar" )ud$#ent Re> Defendants CII3 Co#panies, *- 7oldin$ Co#paniesand Cocofed, et al0 filed b" Plaintiff is hereb" 5RAN!ED. ACCRDIN54O, !7E CII3 CMPANIES,NAME4O>

*. Southern 4uon Coconut il Mills S4CM0

+. Ca$a"an de ro il Co., Inc. CA5I40

&. Ili$an Coconut Industries, Inc. I4ICC0

-. San Pablo Manufacturin$ Corp. SPMC0

;. 5rane=port Manufacturin$ Corp. 5RANE0 and


39/43

@. 4e$aspi il Co., Inc. 4E5I40,

AS 9E44 AS !7E *- 74DIN5 CMPANIES, NAME4O>

*. Soriano Shares, Inc.

+. ACS Investors, Inc.

&. Ro=as Shares, Inc.

-. Arc Investors Inc.

;. !oda 7oldin$s, Inc.

@. AP 7oldin$s, Inc.

:. 3ernande 7oldin$s, Inc.

. SMC fficers Corps, Inc.


40/43

Resolution, CC3ED v. Republic, 5.R. Nos. *::;:1; W *:*


41/43

&+Id.

&&Id.

&-Id.

&;Rollo, pp.


42/43

;-CC3ED v. Republic, 5.R. Nos. *::;:1; W *:*

/Oes, Oour 7onor.

/)ustice Pan$aniban>

/So it see#s that the parties KhaveL a$reed up to that point that the funds used to purchase :+G of thefor#er 3irst 6nited Ban( ca#e fro# the Coconut Consu#er Stabiliation 3und

/Att". 7erbosa>
http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt54http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt55http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt56http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt57http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt58http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt59http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt60http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt61http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt62http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt63http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt54http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt55http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt56http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt57http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt58http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt59http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt60http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt61http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt62http://www.lawphil.net/judjuris/juri2012/nov2012/gr_180705_2012.html#rnt63


43/43

/Oes, Oour 7onor./

3N-%. !ranscript of ral Ar$u#ents, April *:, +%%*, pp. *:*, *:&. Durin$ the sa#e ral Ar$u#ent,Private Respondent Co2uan$co si#ilarl" ad#itted that the /entire a#ount/ paid for the shares had co#efro# the Philippine Coconut Authorit". !SN, p. **;.

@-CC3ED v. Republic, 5.R. Nos. *::;:1; W *:*

v- conjuangco vs rep

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