Primary Holding

The Supreme Court upheld the Sandiganbayan’s rulings declaring the coconut levy funds and assets, including shares in UCPB and SMC, as public funds to be reconveyed to the government in trust for all coconut farmers.

Background

The case arose from a broader legal battle over the alleged misuse of coconut levy funds collected from coconut farmers during the Marcos regime. These funds were purportedly used to acquire shares in UCPB and SMC, among other assets. The Presidential Commission on Good Government (PCGG) filed several cases to recover these assets as part of the government's efforts to reclaim ill-gotten wealth.

Facts

• 1. Coconut levy funds were collected under various decrees issued during the Marcos administration, ostensibly to benefit coconut farmers.
• 2. These funds were used to acquire shares in UCPB and to establish CIIF companies that later acquired a substantial stake in SMC.
• 3. The PCGG sequestered these assets after the fall of the Marcos regime, arguing that they were part of the ill-gotten wealth amassed by Marcos and his associates.
• 4. COCOFED and individual coconut farmers claimed ownership of the assets, arguing that they had been legally acquired using funds contributed by coconut farmers.
• 5. The Sandiganbayan ruled in favor of the government, prompting the petitioners to seek relief from the Supreme Court.

Arguments of the Petitioners

• 1. The Sandiganbayan lacked jurisdiction because the assets were not proven to be ill-gotten wealth.
• 2. The ruling violated the constitutional rights of the coconut farmers by depriving them of their property without due process.
• 3. The coconut levy laws and implementing regulations were valid and should have been upheld.
• 4. The assets in question were lawfully acquired and should be considered private property of the coconut farmers.

Arguments of the Respondents

• 1. The coconut levy funds were public funds, and their use to acquire assets did not change their character.
• 2. The ownership claims of the petitioners were legally flawed and unsupported by evidence.
• 3. The assets were acquired through government-mandated programs and should remain under government control.
• 4. The Sandiganbayan’s rulings were consistent with previous Supreme Court decisions on similar cases.

Issues

• 1. Whether the Sandiganbayan had jurisdiction over the case.
• 2. Whether the coconut levy funds and assets were public or private in nature.
• 3. Whether the rulings violated the petitioners’ constitutional rights.
• 4. Whether the distribution and acquisition of shares were done in accordance with law.

Ruling

• 1. The Supreme Court affirmed the Sandiganbayan’s rulings.
• 2. It held that the coconut levy funds were public funds and that assets acquired with them should be reconveyed to the government.
• 3. The Court found no violation of due process, as the petitioners had ample opportunity to present their case.
• 4. The legal framework governing the coconut levy fund clearly indicated that the funds were intended for the benefit of all coconut farmers, not specific individuals or groups.

Doctrines

• 1. Public Trust Doctrine: Public funds must be used for public purposes and cannot be converted into private assets.
• 2. Operative Fact Doctrine: Even if a law is later declared unconstitutional, actions taken under it may still have legal effects if done in good faith.
• 3. State’s Power to Recover Ill-Gotten Wealth: The government has the authority to reclaim assets acquired through misuse of public funds.

Precedents Cited

• 1. Republic v. COCOFED (2001) – Declared coconut levy funds as prima facie public funds.
• 2. Republic v. Sandiganbayan (1998) – Affirmed the government’s power to sequester assets suspected of being ill-gotten wealth.

Statutory and Constitutional Provisions

• 1. Article VI, Section 29 (3) of the 1987 Constitution
• 2. Presidential Decrees No. 755, 961, and 1468
• 3. Republic Act No. 6260