USA College of Law

CLARITO JD-3C

Republic of the Philippines, represented by the Presidential Commission on Good Governance

(PCGG), petitioner
Case Name vs.
COCOFED Et. Al. And Ballares Et. Al., 1 EDUARDO M. COJUANGCO JR. And the SANDIGANBAYAN
(First Division) respondents.
Topic
Case No. | Date G.R. Nos. 147062-64 | December 14, 2001
Ponente Panganiban, J.
Doctrine

RELEVANT FACTS
● Private respondents were the registered owners of the share of stocks of UCPB which were sequestered by
petitioner PCGG as the said shares were allegedly part of the ill-gotten wealth of Marcos.
● While the case of reversion of the shares to the State was pending in the Sandiganbayan, the private
respondents filed a motion to exercise their right to vote as shareholders in a stockholders meeting of UCPB.
● The Sandiganbayan ruled in favor of the private respondents.
● The PCGG appealed the said ruling to the Supreme Court.

ISSUE:
1. Who may exercise the right to vote of sequestered shares while the reversion case is pending?
RULING:
The PCGG has the right to vote.

As a general rule, registered owners shall have the right to vote even if the shares are sequestered.

The exception is the “two-tiered” test where PCGG shall vote:

1. The shares are indeed ill-gotten
2. There is an imminent danger of dissipation of the assets.

The two tiered test is not applicable however in this case since the coco levy funds were used in acquiring the
shares. The said funds are public in character and are affected with public interest.

It partakes the nature of a tax with the following elements.

a) it is an enforced proportional contribution from persons (end users of coconut products)
b) it is imposed by the State by virtue of its sovereignty
c) it is levied for the support of the government in ensuring the economic stability of coconut industry

As the shares were acquired with public funds, then PCGG shall have the right to vote them.

RULING
Petition is GRANTED.