COCOFED vs.

Republic,

GR Nos. 177857-58, January 24, 2012

FACTS:

In 1971, Republic Act No. 6260 was enacted creating the Coconut InvestmentFund (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 theFund. Out of the 0.55 levy, P0.02 was placed at the disposition
of the COCOFED, therecognized national association of coconut producers declared by the PCA.
Cocofundreceipts were ought to be issued to every copra seller.During the Martial Law regime, then
President Ferdinand Marcos issued severalPresidential Decrees purportedly for the improvement of the
coconut industry. The mostrelevant 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 thedistribution of the
shares of the stockof the bank it [PCA] acquired free to thecoconut farmers‖ (Sec.2). Thus, the PCA
acquired the First United Bank, later renamed the United CoconutPlanters Bank (UCPB). The PCA bought
the 72.2% of PUB’s outstanding capital stockor 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.Farmers who had paid the CIF and registered their receipts with PCA were giventheir
corresponding UCPB stock certificates. Only 16 million worth of COCOFUNDreceipts were registered and
a large number of the coconut farmers opted to sell all/partof their UCPB shares to private
individuals.Simply put, parts of the coconut levy funds went directly or indirectly to variousprojects
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 wealthaccumulated by the Marcoses and their cronies. PCGG was empowered to file casesfor
sequestrationintheSandiganbayan. Among the sequestered properties were the shares of stock in the U
CPBregistered 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 thatthe Coconut Levy
Funds are prima facie public funds and that Section 1 and 2 of PDNo. 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