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 PUBs 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 shar
es of stock in the UCPBregistered 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