Philippine Coconut v.

Republic- 663 SCRA 514

FACTS:
The declaration of martial law in September 1972 saw the issuance of several presidential decrees (P.Ds.)
purportedly designed to improve the coconut industry through the collection and use of the coconut levy fund
particularly P.D. Nos. 755, 961 and 1468. Charged with the duty of collecting and administering the Fund was
PCA. Later, PCA entered into an Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut
Farmers of the Philippines. Under paragraph 8 of the second agreement, PCA agreed to expeditiously distribute the
FUB (First United Bank) shares purchased to such coconut farmers holding registered COCOFUND receipts on
equitable basis.
Then came the 1986 EDSA event. One of the priorities of then President Corazon C. Aquinos revolutionary
government was the recovery of ill-gotten wealth reportedly amassed by the Marcos family and close relatives, their
nominees and associates. The PCGG instituted before the Sandiganbayan a recovery suit against petitioners. As
found by the Sandiganbayan, the PCA appropriated, out of its own fund, an amount for the purchase. Petitioners
COCOFED et al. and Ursua uniformly scored the Sandiganbayan for abusing its power of judicial review and wrongly
encroaching into the exclusive domain of Congress when it declared certain provisions of the coconut levy laws and
PCA administrative issuances as unconstitutional.
ISSUE: Whether the coconut farmers may own the coconut levy fund which was reclassified into private fund
through P.D. Nos. 755, 961 and 1468.
HELD:
NO. The coconut levy funds are in the nature of taxes and can only be used for public
purpose. Consequently, they cannot be used to purchase shares of stocks to be given for free to private
individuals. Needless to stress, courts do not, as they cannot, allow by judicial fiat the conversion of special funds
into a private fund for the benefit of private individuals.
To recapitulate, Article VI, Section 29 (3) of the 1987 Constitution, restating a general principle on taxation,
enjoins the disbursement of a special fund in accordance with the special purpose for which it was collected, the
balance, if there be any, after the purpose has been fulfilled or is no longer forthcoming, to be transferred to
the general funds of the government. If only to stress the point, P.D. No. 1234 expressly stated that coconut levies
are special funds to be remitted to the Treasury in the General Fund of the State, but treated as Special Accounts.