COCOFED v REPUBLIC 663 SCRA 514 (2012)
The Sandiganbayan ordered the sequestration
FACTS:
 In 1971, RA 6260 was enacted, creating
the Coconut Investment Company (CIC) to
administer the Coconut Investment Fund
(CIF). The fund was to be sourved from a
PhP 0.55 levy on the sale of every 100 kg
of copra.
 Under the regime of Marcial Law, PD 276
and 582 were enacted creating more
funds , specifically the CCSF (Coconut
Consumers Stabilization Fund) and CIDF
(Coconut Industry Development Fund)
 PD 755 was enacted to provide credit
facilities to coconut farmers.
 The Philippine Coconut Administration
(PCA) is authorized to handle the funds
 The PCA were authorized to use the funds
to acquire a bank and to deposit the
portion of fund levies. They purchased
the First United Bank (FUB), later
renamed UCPB, but reimbursed the
money from the funds. -
 The funds were for the benefit of coconut
farmers. The funds were used to pay for
the financial commitments of farmers and
provided them with free shares of the
bank.
 The stock certificates for the farmers
were in the name of the PCA but were
supposed to be distributed to the farmers
who possessed COCOFUND receipts (PCA
Administrative Order No. 1)
 Eduardo Cojuangco Jr. was one of the
mediators of the PCA funds and it was
discovered that he caused the issuance of
PD 1468 (Revised Coconut Industry Code)
through collaboration with Marcos.
 The Aquino Administration initiated the
recovery of ill-gotten gains through the
implementation of the following
executive orders :
- EO 1 – establishment of the
Presidential Committee on Good
Governance (PCGG) -
- EO 2 –“Ill-gotten gains” included
shares of stocks
- EO 14 –The Sandiganbayan has
exclusive jurisdiction
against stocks in banks owned by more than a
million coconut farmers and CIIF companies
ISSUES:
1. W/N the Sandiganbayan abused
its power of judicial review.
2. W/N Sections 1 and 2 of PD 755,
Article 3, Section 5 of PD 961,
and Article III, Section 5 of PD
1468 are unconstitutional.
RULING:
1. No, since the case cannot be
solved unless the
constitutionality issue is
addressed. The case is for the
recovery of shares grounded on
the invalidity of the enactments
and rooted in the nature of the
shares being public.
2. The levy implemented takes on
the nature of taxes since they
utilized the taxing power and
police power of the State,
thereby making it a public fund.
–
- The funds were intended for
the exclusive benefit of private
persons.
- Article VI, Section 29 (3) –“All
money collected on any tax
levied for a special purpose shall
be treated as a special fund and
paid out for such purpose only.”