Gaston vs.

Republic Planters Bank, 158 SCRA 626, 1988 –

FACTS: Petitioners are sugar producers, planters and millers. They filed for a writ of mandamus to
implement the privatization of Republic Planters Bank (RPB), and for the transfer of the shares in the
government bank to sugar producers, planters and millers, who are the true beneficial owners of the
common and preferred shares with a total investment of more than P290 million, the investment
funded by the deduction of P1.00 per picul of sugar from the proceeds of sugar production. The
deduction started in 1978 as Stabilization Fund, pursuant to PD 388.

However, the respondents countered that no trust fund due to them resulted from PD 388; that the
stabilization fees collected are considered as public funds under the Government Auditing Code; that
the transfer of shares of stock to the sugar planters would be irregular, if not illegal; and that the suit is
barred by laches.

ISSUE: Whether the Stabilization Fees collected pursuant to PD 388 are public funds, or are held only in
trust for the sugar producers, planters and millers

RULING: The Stabilization Fees collected are public funds.

While it is true that the collected fees were used to buy shares in RPB, it did not collect said fees for the
account of sugar producers. The stabilization fees were charged on sugar produced and milled under PD
338. The fees collected are in the nature of a tax, which is within the power of the state to impose for
the promotion of the sugar industry. The collections accrue to a special fund. It is levied not purely for
taxation, but for regulation, to provide means to stabilize the sugar industry. The levy is primarily an
exercise of police powers. To rule in petitioners' favor would contravene the general principle that
revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of
private persons.