Title: RP vs. Eduardo Cojuangco, Jr., et al.
Respondents: Eduardo Cojuangco, Jr., Ferdinand E. Marcos (deceased), Imelda R. Marcos, Jose R. Eleazar, Jr. (deceased), Maria Clara Lobregat (deceased), Juan Ponce Enrile, Danilo Ursua, Herminigildo C. Zayco
Court: Sandiganbayan
Nature of the case: Reconveyance, Reversion, Accounting and Damages
RE: ANOMALOUS PURCHASE AND USE OF FIRST UNITED BANK (NOW UNITED COCONUT PLANTERS BANK)
Date filed: Original Complaint July 31, 1987 Subdivided Complaint Mar. 7, 1995
Summary of Complaint: The complaint was originally filed on 31 July 1987 against Eduardo Cojuangco, Jr. and 58 defendants including the Marcos Spouses involving the improper/illegal use of coconut levy funds. The complaint was amended on 15 October 1987 to include two other defendants. The complaint was subdivided in 1995 into what is known now as the “coco levy cases” or Civil Case No. 0033 A to H:
Civil Case 0033-A
The complaint is against Eduardo Cojuangco, Jr and seven (7) individual defendants including the Marcos Spouses involving the manipulation made by the defendants in the purchase by the Philippine Coconut Authority (PCA) of the outstanding capital stock of the First United Ban (FUB) through the use of the Coconut Consumers Stabilization Fund (CCSF). The bank was subsequently converted into a universal bank and renamed into United Coconut Planters Bank (UCPB).
A. In a Decision promulgated on 24 January 2012 inR. Nos. 177857-58 and 178193, the Supreme Court affirmed Part A and B of the Sandiganbayan’s 11 July 2003 Partial Summary Judgment. In this decision, the Supreme Court conclusively declared that the coconut levy funds are public funds, hence, any property acquired by means of the coconut levy funds should be treated as public funds or public property, subject to the burdens and restrictions attached by law to such property. It also declared among others that:
i. a. The portion of Section 1 of PD No. 755 which authorizes the PCA to distribute, for free, the UCPB shares to coconut farmers, in relation to Section 2 of the same PD is unconstitutional because: (a) it allowed the use of the CCSF to benefit directly private interest by the outright and unconditional grant of absolute ownership of the UCPB shares to the undefined coconut farmers, which negated or circumvented the national policy or public purpose declared by P.D. No. 755 to accelerate the growth and development of the coconut industry and achieve its vertical integration; and (b) for having unduly delegated legislative power to the PCA.
b. PCA’s implementing regulations thereon, namely, Administrative Order No. 1, Series of 1975 and Resolution No. 074-78 are likewise invalid for their failure to see to it that the distribution of shares serve exclusively or at least primarily or directly the aforementioned public purpose or national policy declared by P.D. No. 755.
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 government and similar provisions of Sec. 5, Art. III, P.D. No. 961 and Sec. 5, Art. III, P.D. No. 1468 contravene the provisions of the Constitution, particularly, IX (D), Sec. 2; and Article VI, Sec. 29 (3).
iii. Lobregat, COCOFED,et al. and Ballares, et al. have not legally and validly obtained title of ownership over the subject UCPB shares by virtue of P.D. No. 755, the Agreement dated May 25, 1975 between the PCA and defendant Cojuangco, and PCA implementing rules, namely, Adm. Order No. 1, s. 1975 and Resolution No. 074-78, and
iv. The so-called “Farmers’ UCPB shares” covered by 64.98% of the UCPB shares of stock, which formed part of the 72.2% of the shares of stock of the former FUB and now of the UCPB, the entire consideration of which was charged by PCA to the CCSF, are hereby declared conclusively owned by, the Plaintiff Republic of the Philippines.
This was affirmed in its 4 September 2012 Resolution. This judgment became final and executory on 10 December 2014 and accordingly recorded in the Book of Entries of Judgments.
On the other hand, in a Decision promulgated on 27 November 2012 in G.R. No. 180705, the Supreme Court affirmed with modification Part C of the said Partial Summary Judgment dated 11 July 2003 and declared among others that the following UCPB shares delivered to ECJ by PCA are conclusively owned by the Republic of the Philippines to be used only for the benefit of all coconut farmers and for the development of the coconut industry which ruled among others that:
- The Agreement between PCA and defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 is a valid contract for having the requisite consideration under Article 1318 of the Civil Code.
- The transfer by PCA to defendant Eduardo M. Cojuangco, Jr. of 14,400 shares of stock of FUB (later UCPB) from the “Option Shares” and the additional FUB shares subscribed and paid by PCA, consisting of:
a. Fifteen Thousand Eight Hundred Eighty-Four (15,884) shares out of the authorized but unissued shares of the bank, subscribed and paid by PCA;
b. Sixty Four Thousand Nine Hundred Eighty (64,980) shares of the increased capital stock subscribed and paid by PCA; and
c. Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d) of the PCA-Cojuangco Agreement dated May 25, 1975. or the so-called “Cojuangco-UCPB shares”.
is declared unconstitutional, hence null and void.
3. The above-mentioned shares of stock of the FUB/UCPB transferred to defendant Cojuangco are declared conclusively owned by the Republic of the Philippines to be used only for the benefit of all coconut farmers and for the development of the coconut industry, and ordered reconveyed to the Government.
4. The UCPB shares of stock of the alleged fronts, nominees and dummies of defendant Eduardo M. Cojuangco, Jr. which form part of the 72.2% shares of the FUB/UCPB paid for by the PCA with public funds later charged to the coconut levy funds, particularly the CCSF, belong to the plaintiff Republic of the Philippines as their true and beneficial owner.
-The aforesaid judgment became final and executory on 1 October 2013 and accordingly recorded in the Book of Entries of Judgments.
- RP filed a Motion for Execution implementing the above-mentioned Decisions which was granted by the Sandiganbayan in a Resolution dated 23 October 2015. The corresponding writ has yet to be issued by the court however.
ECJ filed a Manifestation and Motion dated 9 December 2015 enumerating therein certain UCPB shares for confirmation by the UCPB Corporate Secretary.
ECJ, thru his lawyer, submitted to the Court the originals of the 54,117,421 UCPB certificates of shares of stock under his name. To this, the court issued an Order dated 6 May 2016 noting the submission of ECJ and ordering the delivery to the plaintiff of said certificates. Said originals have already been received and endorsed to the PCGG Library for its custody and safe keeping.
- Meanwhile, the pre-trial proceeding with respect to the complaint-in-intervention filed by Subic International Air Charter (Subic Air) is still on-going. Both RP and Subic Air filed their respective Pre-Trial brief. Pre-trial is scheduled on 18 April 2017. Preliminary Conference is set on 18 August 2017.
Subic Air filed a Motion and Manifestation dated 16 August 2017 praying that another pre-trial conference be scheduled for the purpose of facilitating a joint stipulation of facts between Subic Air and the plaintiff.
The SC in G.R. No. 217965, Confederation of Coconut Farmers Organizations of the Phils Inc vs His Excellency Pres. Benigno Simeon C. Aquino III, Acting Comm Richard Roger Amurao et al., :
Entry of Judgment
“That on August 8, 2017 a decision rendered , a dispositive part reades: “WHEREFORE, the Petition for Prohibition is PARTIALLY GRANTED. The Court finds, and declares, that Section 6, Section 7, Section 8, and Section 9 of Exec. Order No. 180, series of 2015, are not in conformity with law.
In accordance with the foregoing it is hereby reiterated taht the coconut levy funds are tobe deposited in the Special Accounts in the General Fund and are to be appropriated only for the benefit of the coconut farmers and for the development of the coconut industry.
The Temporary Restraining Order issued by the Court on June 30, 2015 is LIFTED effective immediately.”
Become final and executory on October 2, 2017
Status: Final in Favor of Government
Date Entered Status : 12/10/14
Relevant Case/s: GR Nos. 177857-58, 178193, 180705
Remarks: Recovered UCPB shares in 24 January 2012 and 27 November 2012 Decisions of the Supreme Court in aforementioned cases.