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The Supreme Court has dismissed the claims of the United Coconut Planters Bank (UCPB) and United Coconut Planters Life Assurance Corporation (Cocolife) over the estimated P60-billion worth of shares in San Miguel Corporation (SMC) that were acquired through coconut levy and registered in the names of the Coconut Industry Investment Fund (CIIF) and its holding companies.
In a unanimous decision written by Justice Martin S. Villarama Jr., the SC ruled in favor of the Presidential Commission on Good Government (PCGG) which challenged the orders of the Makati City regional trial court (RTC) in favor of UCPB and Cocolife.
In April and May 2013, RTC Judge Winlove Dumayas denied the pleas of the PCGG to dismiss the Dec. 28, 2012 joint petitions for declaratory relief filed by UCPB and Cocolife asserting their rights over the SMC shares. With the denial, PCGG elevated the issue before the SC.
Earlier in January 2012, the SC had affirmed a Sandiganbayan decision that reconveyed to the government the 24 percent block of SMC shares or 753.8 million shares acquired through coconut levy and registered in the names of the CIIF and its holding companies.
The decision specifically stated that the proceeds from the 753.8 million SMC shares should be used for the benefit of the country’s coconut industry and its farmers.
Also on Sept. 17, 2009, the SC had ordered the conversion of the 24 percent SMC shares in the names of CIIF and its companies from common shares to preferred shares.
The conversion, the SC said, was necessary to preserve the value of the 753,848,312 sequestered CIIF SMC common shares in light of the worldwide economic crisis that had adversely affected the country’s banks and financial institutions.
In 1986, the 24 percent SMC shares in the names of CIIF and its holding companies was ordered sequestered by the PCGG on suspicion that the shares were illegally acquired by the associates of the late President Ferdinand Marcos.
In October last year, Solicitor General Florin Hilbay asked the SC to execute its 2012 decision on the SMC shares through the issuance of an entry of judgment.
Hilbay said the entry of judgment in a case decided by the SC would pave the way for the execution of the decision.
He said the government’s ownership over the more than 753.8 million SMC Series 1 preferred shares has been final since September 4, 2014.
In granting the PCGG petition against the the Makati City RTC orders, the SC said:
“It is an important fundamental principle in our judicial system that every litigation must come to an end. Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the verdict.
“Adherence to the principle impacts upon the lives of about three million poor farmers who have long waited to benefit from the outcome of the 27-year battle for the judicial recovery of assets acquired through illegal conversion of the coconut levies collected during the Marcos regime into private funds.”
The SC said the trial court has no jurisdiction to hear and resolve suits involving sequestered coco levy assets and coco levy funds.
It said that under Section 4 (c) of Presidential Decree 1606 (the law that created the Sandiganbayan) as amended by Republic Act No. 7975 and Republic Act No. 8249, the jurisdiction of the Sandiganbayan includes suits for recovery of ill-gotten wealth and related cases.
“Respondents’ assertion that the subject matter of their petitions for declaratory relief is different due to private funds used in buying shares in UCPB and CIIF oil mills is but a feeble attempt to create an exception to the Sandiganbayan’s exclusive jurisdiction,” it stressed.
At the same time, the SC said that the petitions before the trial court should be dismissed under the doctrine of res judicata which provides that “a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies and constitutes an absolute bar to subsequent actions involving the claim, demand or cause of action.”
It pointed out that the issue of ownership of the sequestered CIIF companies and CIIF SMC block of shares was directly resolved by the Sandiganbayan in 2004 and was affirmed by the SC in its January 2012 decision.
It also said that in another SC decision in November 2012, the SC declared as “conclusively owned” by the government the 7.2 percent of the outstanding shares of stocks of the UCPB in the name of Eduardo M. Cojuangco Jr. and should be used for the benefit of the country’s coconut farmers.
“Having resolved that subject matter jurisdiction pertains to the Sandiganbayan and not the RTC, and that the petitions for declaratory relief are barred by our Jan. 24, 2012 decision which settled with finality the issue of ownership of the CIIF oil mills, the 14 holding companies and CIIF SMC block of shares, we deem it unnecessary to address the other issues presented,” the SC ruled.
The SC has yet to resolve its temporary restraining order (TRO) issued more than two months ago against the implementation of two Executive Orders (EOs) issued by President Aquino on the privatization, reconveyance to the government, and utilization of the P73.4-billion coconut levy funds.
Stopped by the SC was the implementation of EO Nos. 179 and 180 on a petition filed by the Confederation of Coconut Farmers Organizations of the Philippines, Inc. (CCFOP).
EO 179 requires the inventory and privatization, and reconveyance in favor of the government of all coconut levy assets, including, but not limited to, the shares of stock in the United Coconut Planters Bank (UCPB), Coconut Industry Investment Fund (CIIF) Companies and CIIF Holding Companies and the 5,500,000 San Miguel Corporation (SMC) shares registered in the name of the Presidential Commission on Good Government (PCGG) as arbitration fee, within 60 days from its effectivity.
The EO also directed that all money and funds constituting the coconut levy or accruing from the coco levy assets should be deposited to a Special Account in the General Fund for Coco Levies.
EO 180, on the other hand, ordered the immediate transfer and reconveyance of coco levy assets to the government and its utilization after the approval by President Aquino of the “Integrated Coconut Industry Roadmap and the Coconut Roadmap for Coco Levy.”
President Aquino and PCGG Acting Commissioner Richard Roger Amurao have been asked to comment on the petition filed by CCFOP.
In its petition, CCFOP told the SC that the enforcement of the two EOs would result in the plunder of the multi-billion-peso coconut levy funds that were collected from farmers for every kilo of copra sold in the market.
It said the EOs violated the 2012 SC ruling which held that the coco levy funds “are owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry.”
The petition pointed out that while CCFOP does not object to inventory of all coco-levy assets and investments, the government should not hastily privatize them since it is merely the trust owner of the assets.
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