EN BANC
G.R. Nos. 177857-58, October 05, 2016
PHILIPPINE COCONUT PRODUCERS FEDERATION, INC. (COCOFED), MANUEL V. DEL ROSARIO, DOMINGO P. ESPINA, SALVADOR P. BALLARES, JOSELITO A. MORALEDA, PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA TITULAR, AND RAYMUNDO C. DE VILLA, Petitioners, v. REPUBLIC OF THE PHILIPPINES, Respondent.
WIGBERTO E. TAÑADA, OSCAR F. SANTOS, SURIGAO DEL SUR FEDERATION OF AGRICULTURAL COOPERATIVES (SUFAC) AND MORO FARMERS ASSOCIATION OF ZAMBOANGA DEL SUR (MOFAZS), REPRESENTED BY ROMEO C. ROYANDOYAN, Intervenors.
G.R. No. 178193
DANILO B. URSUA, Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondent.
R E S O L U T I O N
VELASCO JR., J.:
For consideration is the Manifestation and Omnibus Motion (Omnibus Motion) dated October 12, 2012 interposed by respondent Republic of the Philippines (Republic). In it, respondent claims that the Court, in its September 4, 2012 Resolution, has not included as part of its assets to be reconveyed to it the 25.45 million San Miguel Corporation (SMC) shares subject of the Compromise Agreement dated March 20 and 22, 1990 entered into by and between the SMC Group and the United Coconut Planters Bank (UCPB) Group that SMC subsequently converted to treasury shares.
3.1. The sale of the shares covered by and corresponding to the first installment of the 1986 Stock Purchase Agreement consisting of Five Million SMC Shares is hereby recognized by the parties as valid and effective as of 1 April 1986. Accordingly, said shares and all stock and cash dividend declared thereon after 1 April 1986 shall pertain, and are hereby assigned, to SMC. x x x
3.2. The First Installment Shares shall revert to the SMC treasury for dispersal pursuant to the SMC Stock Dispersal Plan attached as Annex "A-1" hereof. The parties are aware that these First Installment Shares shall be sold to raise funds at the soonest possible time for the expansion program of SMC. x x x
3.3. The sale of the shares covered by and corresponding to the second, third and fourth installments of the 1986 Stock Purchase Agreement is hereby rescinded effective 1 April 1986 and deemed null and void, and of no force and effect. Accordingly, all stock and cash dividends declared after 1 April 1986 corresponding to the second, third and fourth installments shall pertain to CIIF Holding Corporations. x x x
a. On instructions of the SMCGroup, the certificates of stock registered in the name of Anscor-Hagedom Securities, Inc. (AHSI) representing 175,274,960 SMC shares were surrendered to the SMC corporate secretary.6chanrobleslaw
b. The said SMC shares were reissued and registered in the record books of SMC in the following manner: i) Certificates for 25,450,000 SMC shares were registered in the name of SMC, as treasury; ii) Certificates for 144,324,960 SMC shares were registered in the name of the CIIF Holding Companies; iii) Certificates for 5,500,000 SMC shares were registered in the name of the PCGG.
c. The UCPB Group has delivered to the SMC Group the amount of P500,000,000.00 in full payment of the UCPB preferred shares.
d. The SMC Group delivered to the UCPB Group the amount of 481,628,055.99 representing accumufated dividends (from Apri 11, 1986) on the shares reverted to the CIIF Holding Companies.
WHEREFORE, the Court APPROVES the conversion of the 753,848,312, ·sMC Common Shares registered in the CIIF companies to SMC SERIES 1 PREFERRED SHARES of 753,848,312, the converted shares to be registered in the names of the CIIF companies in accordance with the terms and conditions specified in the conversion offer set forth in SMC's Information Statement and appended as Annex "A" of COCOFED's Urgent Motion to Approve the Conversion of the CIIF SMC Common Shares into Series 1 Preferred Shares. The preferred shares shall remain in custodia legis and their ownership shall be subject to the final ownership determination of the Court. Until the ownership issue has been resolved, the preferred shares in the name of the CIIF Companies shall be placed under sequestration and PCGG management.
xxxx
Once the conversion is accomplished, the SMC Common Shares previously registered in the names of the CIIF companies shall be released from sequestration.19chanroblesvirtuallawlibrary
As of 1983, the Class A and B San Miguel Corporation (SMC) common shares in the names of the 14 CIIF Holding Companies are 33,133,266 shares. From 1983 to November 19, 2009 when the Republic of the Philippines representing the Presidential Commission on Good Government (PCGG) filed the "Motion To Approve Sale of CIIF SMC Series I Preferred Shares," the common shares of the CIIF Holding companies increased to 753,848,312 Class A and B SMC common shares.
Owing, however, to a certain development that altered the factual situation then obtaining in G.R. Nos. 177857-58, there is, therefore, a compelling need to clarify the fallo of the January 24, 2012 Decision to reconcile it, vis-a-vis the sh&res of stocks in SMC which were declared owned by the Government, with this development. We refer to the Resolution issued by the Court on September 17, 2009 in the then consolidated cases docketed as G.R. Nos. 177857-58, G.R. No. 178193 and G.R. No. 180705. In that Resolution which has long become final and executory, the Court, upon motion of COCOFED and with the approval of the Presidential Commission on Good Government, granted the conversion of 753,848,312 Class "A" and Class "B" SMC common shares registered in the name of the CIIF companies to SMC Series 1 Preferred Shares of 753,848,312, subject to certain terms and conditions. The dispositive portion of the aforementioned Resolution states:
chanRoblesvirtualLawlibraryx x x x
The CIIF block of SMC shares, as converted, is the same shares of stocks that are subject matter of, and declared as owned by the Government in, the January 24, 2012 Decision. Hence, the need to clarify.
WHEREFORE, the Court resolves to DENY with FINALITY the instant Motion for Reconsideration dated February 14, 2012 for lack of merit.
The Court further resolves to CLARIFY that the 753,848,312 SMC Series 1 preferred shares of the CIIF companies converted from the CIIF block of SMC shares, with all the dividend earnings as well as all increments arising from, but not limited to, the exercise of preemptive rights subject of the September 17, 2009 Resolution, shall now be the subject matter of the January 24, 2012 Decision and shall be declared owned by the Government and be used only for the benefit of all coconut farmers and for the development of the coconut industry.
As modified, the fallo of the January 24, 2012 Decision shall read, as follows:
chanRoblesvirtualLawlibraryWHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The Partial Summary Judgment dated July 11, 2003 in Civil Case No. 0033-A as reiterated with modification in Resolution dated June 5, 2007, as well as the Partial Summary Judgment dated May 7, 2004 in Civil Case No. 0033-F, which was effectively amended in Resolution dated May 11, 2007, are AFFIRMED with MODIFICATION, only with respect to those issues subject of the petitions in G.R. Nos. 177857-58 and 178193. However, the issues raised in G.R. No. 180705 in relation to Partial Summary Judgment dated July 11, 2003 and Resolution dated June 5, 2007 in Civil Case No. 0033-A, shall be decided by this Court in a separate decision.The Partial Summary Judgment in Civil Case No. 0033-A dated July 11, 2003, is hereby MODIFIED, and shall read as follows:x x x x
SO ORDERED.
The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby MODIFIED, and shall read as follows:
chanRoblesvirtualLawlibraryWHEREFORE, the MOTION FOR EXECUTION OF PARTIAL SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF STOCK) dated August 8, 2005 of the plaintiff is hereby denied for lack of merit. However, this Court orders the severance of this particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now considered a separate final and appealable judgment with respect to the said CIIF Block of SMC shares of stock.
The Partial Summary Judgment rendered on May 7, 2004 is modified by deleting the last paragraph of the dispositive portion, which will now read, as follows:
chanRoblesvirtualLawlibraryWHEREFORE, in view of the foregoing, we hold that:
The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding Companies - and Cocofed, et al.) filed by Plaintiff is hereby GRANTED.
ACCORDINGLY, THE CIIF COMPANIES, NAMELY:AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:
- Southern Luzon Coconut Oil Mills (SOLCOM);
- Cagayan de Oro Oil Co., Inc. (CAGOIL);
- Iligan Coconut Industries, Inc. (ILICOCO);
- San Pablo Manufacturing Corp. (SPMC);
- Graneexport Manufacturing Corp. (GRANEX); and
- Legaspi Oil Co., Inc. (LEGOIL),
- Soria Shares, Inc.;
- ACS Investors, Inc.;
- Roxas Shares, Inc.;
- Arc Investors, Inc.;
- Toda Holdings, Inc.;
- AP Holdings, Inc.;
- Fernandez Holdings, Inc.;
- SMC Officers Corps, Inc.;
- Te Deum Resources, Inc.;
- Anglo Ventures, Inc.;
- Randy Allied Ventures, Inc.;
- Rock Steel Resources, Inc.;
- Valhalla Properties Ltd., Inc.; and
- First Meridian Development, Inc.
AND THE CONVERTED SMC SERIES 1 PREFERRED SHARES TOTALING 753,848,312 SHARES SUBJE'CT OF THE RESOLUTION OF THE COURT DATED SEPTEMBER 17, 2009 TOGETHER WITH ALL DIVIDENDS DECLARED, PAID OR ISSUED THEREON AFTER THAT DATE, AS WELL AS ANY INCREMENTS THERETO ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT TO BE USED ONIy FOR THE BENEFIT OF ALL COCONUT FARMERS AND FOR THE DEVELOPMENOF THE COCONUT INDUSTRY, AND ORDERED RECONVEYED TO THE GOVERNMENT.
THE COURT AFFIRMS THE RESOLUTIONS ISSUED BY THE SANDIGANBAYAN ON JUNE 5, 2007 IN CIVIL CASEi NO. 0033-A AND ON MAY 11, 2007 IN CIVIL CASE NO. 0033-F, THAT THERE IS NO MORE NECESSITY OF FURTHER TRIAL WITH RESPECT TO THE ISSUE OF OWNERSHIP OF (1) THE SEQUESTERED UCPB SHARES, (2) THE CIIF BLOCK OF SMC SHARES, AND (3) THE CIIF COMPANIES, AS THEY HAVE FINALLY BEEN ADJUDICATED IN THE AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND MAY 7, 2004.
SO ORDERED.
1. AMENDING the Resolution dated September 4, 2012 to include the "treasury shares" which are part and parcel of the 33,133,266 CIIF Block of Shares as of 1983 decreed as owned by the Government;
2. DIRECTING the San Miguel Corporation to comply with the Sandiganbayan's Resolution promulgated on October 24, 1991 and March 18, 1992 in Civil Case No. 0102 (integrated in Civil Case No. 0033 [Civil Case No. 0033-F]) as affirmed by the Honorable Court in the consolidated cases in G.R. Nos. 104037-38 and 109797 which directed the delivery to the [PCGG] of the treasury shares, including all the accrued cash and stock dividends from 1986 up to the present;
3. AWARDING actual damages in favor of the Republic of the Philippines in the form of legal interest on the cash and cash value of the stock dividends and cash dividends which ought to have accrued and delivered to the Republic and the PCGG by the SMC in compliance with the aforesaid resolutions and decision of. the Sandiganbayan and the Honorable Court.23
SECTION 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws. (Emphasis supplied)
The Court's ruling in Presidential Commission on Good Government v. Sandiganbavan, which remains good law, reiterates the necessity of the Republic to actually implead corporations as defendants in the complaint, out of recognition for their distinct and separate personalities, failure to do so would necessarily be denying such entities their right to due process. Here, the writ of sequestration issued against the assets of the Palm Companies is not valid because the suit in Civil Case No. 0035 against Benjamin Romualdez as shareholder in the Palm Companies is not a suit against the latter. The Court has held, contrary to the assailed Sandiganbayan Resolution in G.R. No. 173082, that failure to implead these corporations as defendants and merely annexing a list of such corporations to the complaints is a violation of their right to due process for it would be, in effect, disregarding their distinct and separate personality without a hearing. Here, the Palm Companies were merely mentioned as Item Nos. 47 and 48, Annex A of the Complaint, as among the corporations where defendant Romualdez owns shares of stocks. Furthermore, while the writ of sequestration was issued on October 27, 1986, the Palm Companies were impleaded in the case only in 1997, or already a decade from the ratification of the Constitution in 1987, way beyond the prescribed period.
It is well-settled that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by a judgment rendered by the court. Execution of a judgment can only be issued against one who is a party to the action, and not against one who, not being a party thereto, did not have his day in court. Due process dictates that a court decision can only bind a party to the litigation and not against innocent third parties. (emphasis and underscoring added)
A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void: "... it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head."36
... failure to implead these corporations as defendants and merely annexing a list of such corporations to the complaints is a violation of their right to due process for it would in effect be disregarding their distinct and separate personality without a hearing.
In cases where stocks of a corporation were allegedly the fruits of ill-gotten wealth, it should be remembered that in most of these cases the stocks involved constitute a substantial if not controlling interest in the corporations. . The basic tenets of fair play demand that these corporations be impleaded as defendants since a judgment in favor of the government will undoubtedly substantially and decisively affect the corporations as distinct entities. The judgment could strip them of everything without being previously heard as they are not parties to the action in which the judgment is rendered.
. . . Holding that the 'corresponding judicial action or proceeding' contemplated by the Constitution is any action concerning or involving the corporation under sequestration is oversimplifying the solution, the result of which is antagonistic to the principles of justice and fair play.
. . . the actions contemplated by the Constitution should be those which include the corporation not as a mere annex to the complaint but as defendant. This is the minimum requirement of the due process guarantee. Short of being impleaded, the corporation has no standing in the judicial action. It cannot adequately defend itself. It may not even be heard.
On the opinion that alternatively the corporations can be impleaded as defendants by amendment of the complaint, Section 26, Article XVIII of the Constitution would appear to preclude this procedure, for allowing amendment of the complaint to implead theretofore unimpleaded corporations would in effect allow complaints against the corporation to be filed beyond the periods fixed by said Section 26.
x x x x
While government efforts to recover illegally amassed wealth should have support from all its branches, eagerness and zeal should not be allowed to run berserk, overriding in the process the very principles that it is sworn to uphold. In our legal system, the ends do not always justify the means. Wrongs are never corrected by committing other wrongs, and as above-discussed the recovery of ill gotten wealth does not and should never justify unreasonable intrusions into constitutionally forbidden grounds....
WHEREFORE, it is respectfully prayed that the SMC shares comprising the "compromise shares" between SMC and defendant CIIF Companies, and covered by Certificate Nos. A0004129 and B0015556, be adjudged excluded (a) from the "CIIF Block of SMC shares" subject of plaintiffs forfeiture action, and (b) from an1 judgment that may be rendered in this suit as to such forfeiture claim.48
1986 (Per the March 1986 Agreement) | 1990 (Per the Compromise Agreement) | 1990 (Manifestation of Implementation of Compromise Agreement and of Withdrawal of Petition) | 2009 (Per PCGG Resolution No. 2009-037-756) | |
CIIF Companies/ UCPB Group | 28,133,266 | 148,824,960 | 144,324,960 | 753,848,31254 |
SMC Group | 5,000,000 | 26,450,000 | 25,450,000 | 25,450,000 |
PCGG-ITF-CARP | - | - | 5,500,00055 | 27,571,409 |
Total Number | 33,133,26 |
Out of the 15 men elected to the board, eight (8) were PCGG nominees,65 one (1) was nominated by SSS,66 one by GSIS, and only five (5) were nominated by non-government institutions and/or individuals.67 Similar facts attended the election of the directors of the SMC Board on April 17, 1990. Hence, 10 out of the 15 members of the SMC Board were government-nomi ated and elected.68chanrobleslaw
- Mr. Eduardo De Los Angeles
- Mr. Feliciano Belmonte, Jr.
- Mr. Teodoro L. Locsin
- Mr. Domingo Lee
- Mr. Philip Ella Juico
- Mr. Patrick Pineda
- Mr. Adolfo Azcuna
- Mr. Edison Coseteng
- Mr. Andres Soriano III
- Mr. Eduardo Soriano
- Mr. Francisco C. Eizmendi, Jr.
- Mr. Benigno P. Toda, Jr.
- Mr. Antonio J. Roxas
- Mr. Jose L. Cuisia, Jr.
- Mr. Oscar Hilado
The general rule is that the State cannot be put in estoppel by the mistaks or errors of its officials or agents. However, like all general rules, this is also subject to exceptions, viz.:ChanRoblesVirtualawlibrary"Estoppel against the public are little favored. They should not be invoked except in rare and unusual circumstances and may not be invqked where they would operate to defeat the effective operation of a polity adopted to protect the public. They must be applied with circlimspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; andi subject to limitations ..., the doctrine of equitable estoppel mall be invoked against public authorities as well as against private individuals."
In Republic v. Sandiganbayan, the government, in its effort to recoveill-gotten wealth, tried to skirt the application of estoppel against it by invoking a specific constitutional provision. The Court countered:
chanRoblesvirtualLawlibrary"We agree with the statement that the State is immune from estoppel, but this concept is understood to refer to acts and mistakes of its officials especially those which are irregular (Sharp International Marketing vs. Court of Appeals, 201 SCRA 299; 306 [1991]; Republic v. Aquino, 120 SCRA 186 [1983]), which peculiar circumstances are absent in the case at bar. Although the State's right of action to recover ill-gotten wealth is not vulnerable to estoppel[;] it is non sequitur to suggest that a contract, freely and in good faith executed between the parties thereto is susceptible to disturbance ad infinitum. A different interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a compromise agreement which is supposed to have the authority of res judicata (Article 2037, New Civil Code), and like any other contract, has the force of law between parties thereto (Article 1159, New Civil Code; Hernaez vs. Kao, 17 SCRA 296 [1966]; 6 Padilla, Civil Code Annotated, 7th ed., 1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p. 463) ..."
The Court further declared that "(t)he real office of the equitable norm of estoppel is limited to supfly[ing] deficiency in the law, but it should not supplant positive law."74chanroblesvirtuallawlibrary
Endnotes:
1See San Miguel Corporation, et al. v. Sandiganbayan, G.R. Nos. 104637-38, September 14, 2000, 340 SCRA 289, 295; and Republic v. Sandiganbayan, G.R. No. 118661, January 22, 2007, 512 SCRA 25, 34.The Court further resolves to CLARIFY that the 753,848,312 SMC Series I preferred shares of the CIIF companies converted from the CIIF block of SMC shares, with all the dividend earnings as well as all increments arising from, but not limited to, the exercise of preemptive rights subject of the September 17, 2009 Resolution, shall now be the subject matter of the January 24, 2012 Decision and shall be declared owned by the Government and be used only for the benefit of all coconut farmers and for the development of the coconut industry.1
2 See Soriano III v. Yuzon, G.R. No. 74910, August 10, 1988, 164 SCRA 226.
3 See Republic v. Sandiganbayan, supra note 1.
4San Miguel Corporation, et al. v. Sandiganbayan, supra note I.
5 One of the conditions stated, viz: "5. The consent of PCGG to the transfer of the sequestered shares of stock in accordance with the COMPROMISE, and to the lifting of the sequestration thereon to permit such transfer, shall be effective only when approved by the Sandiganbayan. The Commission makes no determination of the legal rights of the parties as against each other. The consent it gives here conforms to its duty to care for the sequestered assets, and to its purpose to prevent the repetition of the national plunder. It is not to be construed as indicating any recognition of the legality or sufficiency of any act of any of the parties." (Emphasis supplied)
6 By 1991, the 33,133,266 shares have increased to 175,274,960 due to stock dividends and stock splits.
7 See San Miguel Corporation, et al. v. Sandiganbayan, supra note 1, at 303; and Republic v. Sandiganbayan, supra note 1, at 41.
8San Miguel Corporation, et al. v. Sandiganbayan, id.
9 Id.
10 Id.
11 Annex "W" of the Class Action Petition for Review on Certiorari.
12 PSJ dated May 7, 2004, p. 64.
13Rollo (G.R. Nos. 177857-58), pp. 404-405. On the issue regarding the actual percentage of the sequestered CIIF Block of SMC shares vis-a-vis the outstanding capital stock of SMC, the Sandiganbayan stated in its May 7, 2004 PSJ, thus:
chanRoblesvirtualLawlibraryThe subject matter of the Motion for Partial Summary Judgment is the CIIF block of San Miguel Corporation shares or the shares of the 14 CIIF Holding Companies. While the plaintiff (Republic) claims that this would constitute twenty-seven percent (27%) ofthe SMC capital stock, COCOFED et al. and Ballares, et al. claim that the said shares constitute 31.23% of the issued and outstanding capital s ock of SMC based on the 33,133,266 SMC shares owned by the 14 Holding Companies in 1983 which they alleged now total 880,720,162.71 SMC shares by reason of stock dividends that should have been declared and delivered in the .respective names of the 14 Holding Companies. Defendants Cojuangco, et al. allege that a portion of the 27% SMC shares mentioned by plaintiff are now treasury shares, possibly referring to the shares involved in the SMC Motion for Intervention, which has already been denied by this Court. PSJ dated May 7, 2004, p. 46 (id. at 386).14 The dispositive portion of the May II, 2007 Sandiganbayan Resolution reads:
chanRoblesvirtualLawlibraryWHEREFORE, the MOTION FOR EXECUTION OF PARTIAL SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF STOCK) dated August 8, of the plaintiff is hereby denied for lack of merit. However, this Court orders the severance of this particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now considered a separate final and appealable judgment with respect to the said CIIF Block of SMC shares of stock.
The Partial Summary Judgment rendered in May 7, 2004 is modified by deleting. the last paragraph of the dispositive portion which will now read, as follows:
chanRoblesvirtualLawlibraryWHEREFORE, in view of the foregoing, we hold that:
chanRoblesvirtualLawlibraryThe Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding Companies and Cocofed et al) filed by Plaintiff is hereby GRANTED ACCORDINGLY, the CIIF COMPANIES, NAMELY:
chanRoblesvirtualLawlibraryx x x x
AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:
chanRoblesvirtualLawlibraryx x x x
AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK TOTALING 33,133,266 SHARES AS OF 1983, TOGETHER WITH ALL DIVIDENDS DECLARED, PAID AND ISSUED THEREON AS WELL AS ANY INCREMENTS THERETO ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT IN TRUST FOR ALL THE COCONUT FARMERS AND ORDERED RECONVEYED TO THE GOVERNMENT.
The aforementioned Partial Summary Judgment is now deemed a separate appealable judgment which finally disposes of the ownership of the CIIF Block of SMC Shares, without prejudice to the continuation of the proceedings with respect to the remaining claims particularly those pertaining to the Cojuangco, et al. block ofSMC shares.
15 Rollo (G.R. Nos. 177857-58), Vol. 3, pp. 1760-1775.
16 Id. at 1842.
17 With the stock dividends declared by SMC from 1991 to 200 I, the SMC shares registered in the name of the CIIF Holding Companies increased to 752,202,640. SMC conducted a stock rights offering on April II, 2005 and the CIIF Holding Companies subscribed to 28,645,672 shares resulting in an increase to 753,848,312 shares. (Rollo [G.R. No. 178193], Vol. 3, p. 1596.)
18Rollo (G.R. Nos. 177857-58), Vol. 3, pp. 1881-1913.
19 Id. at 1911. Underscoring supplied.
20 A separate Urgent Motion to Approve the Conversion of the PCGG-ITF-CARP-SMC Common Shares Into SMC Series I Preferred Shares September 30, 2009 was filed by the Republic, id. at 2103-2110. See also PCGG Resolution No. 2009-037-75"6, id. at 2004.
21 Id., Vol. 4-A, pp. 3322-3349.
22 Id. at 3423-A-B.
23Rollo (G.R. No. 178193), Vol. 3, pp. 1443-1444.
24 Id. at 1583-1696.
25cralawred G.R. No. 173082, August 6, 2014, 732 SCRA 156.
26 353 Phil. 80, 92 (1998).
27 G.R. No. 174982, September 10, 2012, 680 SCRA 345, 351; citing Fermin v. Han. Antonio Esteves, G.R. No. 147977, March 26, 2008, 549 SCRA 424, 428.
28 SECTION 8. Issuance, form, and contents of a writ of execution. The writ of execution shall: (l) issue in the name of the Republic of the Philippines from the court which granted the motion; (2) state the name of the court, the case number and title, the dispositive part of the subject judgment or order; and (3) require the sheriff or other proper officer to whom it is directed to enforce the writ according to its terms, in the manner hereinafter provided:
chanRoblesvirtualLawlibrary(a) If the execution be against the property of the judgment obligor, to satisfy the judgment, with interest, out of the real or personal property of such judgment obligor;
(b) If it be against real or personal property in the hand of personal representatives, heirs, devisees, legatees, tenants, or trustees, of the judgment obligor, to satisfy the judgment, with interest, out of such property;
xxxx
SECTION 9. Execution of judgments for money, how enforced. - (a) Immediate payment on demand. - The officers shall enforce an execution of a judgment for money by demanding from the judgment obligor the immediate payment of the full amount ,stated in the writ of execution and all lawful fees. The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable to the latter, the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at the time of payment. x x x If the judgment obligee or his authorized representative is not present to receive payment, the judgment obligor shall deliver the aforesaid payment to the executing sheriff. x x x
(b) Satisfaction by levy. If the judgment obligor cannot pay all or part of the obligation in
cash, certified bank check or other mode of payment acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and otherwise exempt from execution x x x.
(c) Garnishment of debts and credits. - The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. x x x (Emphasis supplied)
29 Section 7, Rule 3 of the Rules of Court.
30 Justice Leonen's Dissent.
31 Id.
32 Galicia v. Mercado, G.R. No. 146744, March 6, 2006, 484 SCRA 131, 136-137.
33 See Metropolitan Bank and Trust Co. v. Alejo, 417 Phil. 303 (2001 ); Divinagracia v. Parilla, G.R. No. 196750, March II, 2015; Macawadib v. Philippine National Police Directorate for Personnel and Records Management, G.R. No. 186610, July 29, 2013, 702 SCRA 496; People v. Go, G.R. No. 201644, September 24, 2014, 736 SCRA 501; Valdez-Tallorin v. Heirs of Tarona, 620 Phil. 268 (2009).
34 G.R. No. 174909, January 20, 2016.
35 345 Phil. 250, 287 (1997).
36Emphasis supplied.
37 Justice Leonen's Dissent.
38 See David v. Paragas, G.R. No. 176973, February 25, 2015; and Sy v. Court of Appeals, G.R. No. 94285, August 31, 1999, 313 SCRA 328.
39 G.R. No. 96073, January 23, 1995, 240 SCRA 376.
40 The Court held, thus:
chanRoblesvirtualLawlibraryB. Impleading Unnecessary in Cases for Recovery of Shares of Stock or Bank Deposits
As regards actions in which the complaints seek recovery of defendants' shares of stock in existing corporations (e.g., San Miguel Corporation, Benguet Corporation, Meralco, etc.) because allegedly purchased with misappropriated public funds, in breach of fiduciary duty, or otherwise under illicit or anomalous conditions, the impleading of said firms would clearly appear to be unnecessary. If warranted by the evidence, judgments may be handed down against the corresponding defendants divesting them of ownership of their stock, the acquisition thereof being illegal and consequently burdened with a constructive trust, and imposing on them the obligation of surrendering them to the Government. (Emphasis supplied)
41 G.R. No. 92755, July 26, 1991, En Banc Minute Resolution.
42 G.R. Nos. 112708-09, March 29, 1996, 255 SCRA 438.
43 G.R. No. 125788, June 5, 1998, 290 SCRA 39.
44 Supra note 1.
45 Prior to filing its Comment on the Omnibus Motion, a "Manifestation Re: "Resolution" Dated November 20,2012 dated December 17, 2012 was filed. It stated:
chanRoblesvirtualLawlibrary4.00 Second, SMC, which is being required to comment on the "Manifestation And Omnibus Motion ..." dated October 12, 2012, as well as the "Manifestation" dated October 4, 2012, is not a party in the instant cases. Nor has it been furnished a copy of the Court's Resolution. Nonetheless, in light of the foregoing, although the suggestion may appear officious, if indeed SMC is being required to comment on the matter subject of the "Resolution" of November 20, 2012, perhaps a copy of the "Resolution" should be furnished on SMC itself. (emphasis and underscoring supplied; rollo [G.R. Nos. 177857-58], Vol. 6, p. 5008)
In an Omnibus Motion dated September 3, 2013, SMC again emphasized, viz.:
chanRoblesvirtualLawlibrary"2. However, SMC has not been furnished with copies of the various pleadings in regard which it is required to comment as enumerated above. It must be emphasized that SMC is not a party in either G.R. Nos. 177857-58 (COCOFED. et al. vs. Republic ofthe Philippines) or G.R. No. 178193 ((Danilo B. Ursua vs. Republic o[the Philippines).
xxxx
5. SMC is not a party in either G.R. Nos. 177857-58 (COCOFED. et al. vs. Republic of the Philippines) or G.R. No. 178193 (Danilo B. Ursua vs. Republic ofthe Philippines). Preparation of the comment will require a study of the cases, the record of which are voluminous and cover a long period of time. x x x (emphasis and underscoring supplied; id. at 5056-5057)
46 Decision, Republic v. Cojuangco, et al., CC No. 0033-F, November 28, 2007, p. 27; rolla (G.R. No. 178193), Vol. I, p. 492.
47 Id.
48 Comment of San Miguel Corporation on the "Manifestation and Omnibus Motion," p. 44.
49 Decision, Republic v. Cojuangco, et al., CC No. 0033-F, November 28, 2007, supra note 46.
50 Id.
51 Id.
52 Id. at 28; rollo (G.R. No. 178193), Vol. 1, p. 493.
53 Id.
54 The 144,324,960 increased to 725,202,640 from 1991 to 2001. In 2005, the CIIF subscribed to 28,645,672 shares when SMC conducted a stocks right offering. Thus, the total shares registered in the name ofthe CIIF in 2009 reached 753,848,312.
55 UCPB Group contributed 4,500,000 shares; SMC Group contributed 1,000,000 shares.
56Emphasis supplied.
57 On July 4, 1991, SMC and the UCPB Group filed a Joint Manifestation with the Sandiganbayan that they have implemented the Compromise Agreement and Amicable Settlement with the conditions set by the PCGG and accordingly, withdrew their Joint Petition. They informed that they have executed the following corporate acts:
chanRoblesvirtualLawlibrarya. On instructions of the SMC Group, the certificates of stock registered in the name of Anscor-Hagedom Securities, Inc. (AHSI) representing 175,274,960 SMC shares were surrendered to the SMC corporate secretary.
b. The said SMC shares were reissued and registered in the record books of SMC in the following manner:i) Certificates for 25,450,000 SMC shares were registered in the name of SMC, as treasury;58 Id.
ii) Certificates for 144,324,960 SMC shares were registered in the name of the CIIF Holding Companies;
iii) Certificates for 5,500,000 SMC shares were registered in the name of the PCGG. (Emphasis supplied; San Miguel Corporation v. Sandiganbayan, supra note 1)..
59 Supra note 1.
60 Justice Leonen's Dissent.
61 Id.
62 Urgent Motion to Approve the Conversion of the PCGG-ITF-CARP SMC Common Shares Into SMC Series 1 Preferred Shares dated September 30,2009, rollo (G.R. No. 177857-89), Vol. 3, pp. 2103-2110.
63 Justice Leonen's Dissent; citing rollo (G.R. Nos. 117857-58), Vol. 4-A, pp. 3353-3354.
64 G.R. No. 91925, April 16, 1991, 195 SCRA 797.
65 Mr. Teodoro L. Locsin; Mr. Eduardo De Los Angeles; Mr. Domingo Lee; Mr. Patrick Pineda; Mr. Philip Ella Juico; Mr. Oscar Hilado; Mr. Edison Coseteng; and Mr. Adolfo Azcuna.
66 Mr. Jose L. Cuisia, Jr.
67 Mr. Andres Soriano III; Mr. Benigno P. Toda, Jr.; Mr. Francisco C. Eizmendi, Jr.; Mr. Antonio J. Roxas; Mr. Antonio J. Roxas; and Mr. Eduardo Soriano.
68 Cojuangco, Jr., supra note 64.
69 Rules of Court, Rule 39, Sec. 6. Execution by Motion or by Independent Action.- A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.
70 The equitable principle against unjust enrichment is encapsulated in Article 22 of the Civil Code, viz:ChanRoblesVirtualawlibraryArt. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.71Republic v. Vinzon, G.R. No. 154705, June 26,2003,405 SCRA 126; Air Transportation Office v. David and Ramos, G.R. No. 159402, February 23, 2011. See also Minucher v. Court of Appeals, G.R. No. 142396, February 11, 2003; citing Gary L. Maxis, "International Law, An Introduction," University Press of America, 1984, p. 119; D.W. Grieg, "International Law," London Butterworths, 1970, p. 221.
72 Leca Realty Corporation v. Republic of the Philippines, represented by the Department of Public Works and Highways, G.R. No. 155605, September 27, 2006, 503 SCRA 563.
73 G.R. No. 116111, January 21, 1999, 301 SCRA 366.
74 Citing 31 CJS 675-676; Republic v. Sandiganbayan, G.R. No. 108292, September 10, 1993, 226 SCRA 314. Emphasis and underscoring supplied.DISSENTING OPINION SERENO, CJ:
The matter before the Court in these cases is the correctness of the modification made in the Resolution dated 4 September 2012, to wit:
chanRoblesvirtualLawlibraryWHEREFORE, the Court resolves to DENY with FINALITY the instant Motion for Reconsideration dated February 14, 2012 for lack of merit.
On April 7, 1986, the PCGG sequestered the subject 33.1 Million SMC shares, the PCGG noting in its letter to Soriano III that said shares came "from the shareholdings of Mr. Eduardo Cojuangco, Jr. which are listed [as owned by the 14 CIIF Holding Companies]."8 (Emphasis supplied)
It appears that on March 26, 1986, the Coconut Industry Investment Fund Holding Companies ("CIIF" for brevity) sold 33,133,266 shares of the outstanding capital stock of San Miguel Corporation to Andres Soriano III ofthe SMC Group payable in four (4) installments.
On April 1, 1986, Andres Soriano III paid the initial P500 million to the UCPB as administrator of the CIIF. The sale was transacted through the stock exchange and the shares were registered in the name of Anscor Hagedom Securities, Inc. (AHSI).
On April 7, 1986, the Presidential Commission on Good Government (PCGG) then led by the former President of the Senate, the Honorable Jovito R. Salonga, sequestered the shares of stock subject of the sale.10 (Emphases supplied)
As of 1983, the Class A and B San Miguel Corporation (SMC) common shares in the names of the 14 CIIF Holding Companies are 33,133,266 shares. From 1983 to November 19, 2009 when the Republic of the Philippines representing the Presidential Commission on Good Government (PCGG) filed the "Motion to Approve Sale of CIIF SMC Series I Preferred Shares," the common shares of the CIIF Holding companies increased to 753,848,312 Class A and B SMC common shares.11 (Emphases supplied)
All the terms of this Agreement are subject to approval by the Presidential Commission on Good Government (PCGG) as may be required by Executive Orders numbered 1, 14, and 14-A. This Agreement and the PCGG approval thereof shall be submitted to the Sandiganbayan.
xxxx
3.1. The sale of the shares covered by and corresponding to the first installment of the 1986 Stock Purchase Agreement consisting of Five Million SMC Shares is hereby recognized by the parties as valid and effective as of 1 April 1986. Accordingly, said shares and all stock and cash dividends declared thereon after 1 April 1986 shall pertain, and are hereby assigned, to SMC. x x x
3.2. The First Installment Shares shall revert to the SMC treasury for dispersal pursuant to the SMC Stock Dispersal Plan attached as Annex "A-1" hereof. The· parties are aware that these First Installment Shares shall be sold to raise funds at the soonest possible time for the expansion program of SMC. x x x
3.3. The sale of the shares covered by and corresponding to the second, third and fourth installments of the 1986 Stock Purchase Agreement is hereby rescinded effective 1 April 1986 and deemed null and void, and of no force and effect. Accordingly, all stqck and cash dividends declared after 1 April 1986 corresponding to the second, third and fourth installments shall pertain to CIIF Holding Corporations.x x x x
Unless extended by mutual agreement of the parties, the "Delivery Date" shall be on the 1oth Day from and after receipt by any party of the notice of approval of this Eompromise Agreement and Amicable Settlement by the Sandiganbayan. Upon receipt of such notice, all other parties shall be immediately informed. 15 (Emphases supplied)
WHEREFORE, the Manifestation and Motion of the "SMC Group" dated August 21, 1991, which in effect, seeks a reconsideration of this Court's resolution of July 23, 1991 requiring that all Certificates of Stock representing the sequestered shares in the SMC be physically deposited with the Presidential Commission on Good Government is denied.
Additionally, the San Miguel Corporation is now ordered:ChanRoblesVirtualawlibrary1) To inform this Court of the amount of the cash dividends due to or actually earned by the 25,450,000 shares of stock represented by the Stock Certificates No. A0004129 for 15,274,484 class "A" shares and No. B00015556 for 10,175,516 calls "B" shares; and cralawlawlibrary
2) To deliver the check representing that amount to the Presidential Commission on Good Government for the latter to deposit in or place with government bank offering at the best terms and conditions.
This deposit or placement shall be made in the name of the Presidential Commission on Good Government in trust for whomever said shares of stock may eventually be adjudicated.
Future dividends, whether of cash and/or of stock, which may hereafter be declared on the shares represented by the above stock certificates shall be similarly treated by the Presidential Commission on Good Government until further orders from this Court.
Compliance hereon shall be reported to this Court
By the San Miguel Corporation within ten (10) days from receipt hereof; and cralawlawlibrary
By the Presidential Commission on Good Government, with regard to its receipt and custody of the two certificates of stock above mentioned as well as with regard to its placement or deposit of the cash dividends thereon, within twenty (20) days from receipt hereof.
The individual Commissioners of the Presidential Commission on Good Government shall be responsible to this Court for the care, custody and disposition of the dividends, subject matter hereof.
SO ORDERED.39chanrobleslaw
x x x x
WHEREFORE, the San Miguel Corporation's Motion for Reconsideration [ofthe Resolution dated] October 24, 1991 is DENIED.
The San Miguel Corporation through its President and Corporate Secretary are now ordered:
chanRoblesvirtualLawlibraryTo deliver to PCGG the 25.45 million shares represented by the following certificates of stock:ChanRoblesVirtualawlibraryA 0004129 15,274,484 sharesand the other 1 million shares of stock forming part of the so-called First Installment Shares;
B 0015556 10,175,516
To deliver to PCGG the cash and/or stock dividends which have accrued to the above shares of stock from March 26, 1986 to dates and which might have further accrued thereto had not said shares of stock been declared Treasury Shares;
To report compliance therewith within fifteen (15) days from receipt hereof. SO ORDERED.40
1.28. On top of all of the above, SMC filed before the Sandiganbayan in Civil Case No. 0033-F a "Motion to Intervene" dated February 2, 2004 through a "Complaint-in-Intervention" of even date in which it alleged, as follows:
chanRoblesvirtualLawlibrary2. SMC has an interest in the matter in dispute between plaintiff and defendants CIIF companies, being the owner by purchase of a portion of the so-called "CIIF block of SMC shares of stock" which plaintiff seeks to recover in this case as alleged ill-gotten wealth.47 (Emphasis supplied)
A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof; production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy. Consequently, an admission made in the pleadings cannot be controverted by the party making such admission and are conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored, whether objection is interposed by the party or not. The allegations, statements or admissions contained in a pleading are conclusive as against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what was pleaded.48
Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy funds - funds, which have been established to be public in character it goes without saying that these acquired corporations and assets ought to be regarded and treated as government assets. Being government properties, they are accordingly owned by the Government, for the coconut industry pursuant to currently existing laws.
It may be conceded hypothetically, as COCOFED et al. urge, that the 14 CIIF holding companies acquired the SMC shares in question using advances from the CIIF companies and from UCPB loans. But there can be no gainsaying that the same advances and UCPB loans are public in character, constituting as they do assets of the 14 holding companies, which in turn are wholly-owned subsidiaries of the 6 CIIF Oil Mills. And these oil mills were organized, capitalized and/or financed using coconut levy funds. In net effect, the CIIF block of SMC shares are simply the fruits of the coconut levy funds acquired at the expense of the coconut industry. In Republic v. COCOFED. the en banc Court, speaking through Justice (later Chief Justice) Artemio Panganiban, stated: "Because the su jecl UCPB shares were acquired with government funds, the government becomes their prima facie beneficial and true owner." By parity of reasoning, the adverted block of SMC shares, acquired as they were with government funds, belong to the government as, at the very least, their beneficial and true owner.
We thus affirm the decision of the Sandiganbayan on this point. But as We have earlier discussed, reiterating our holding in Republic v. COCOFED, tl:l.e States avowed policy or purpose in creating the coconut levy fund is for the development of the entire coconut industry, which is one of the major industries that promotes sustained economic stability, and not merely the livelihood of a significant segment of the population. Accordingly, We sustain the ruling of the Sandiganbayan in CC No. 0033-F that the CIIF companies and the CIIF block of SMC shares are public funds necessary owned by,the Government. We, however, modify the same in the following wise: Tnese shares shall belong to the Government, which shall be used only for the benefit of the coconut farmers and for the development of the coconut industry.49
Endnotes:
1Philippine Coconut Producers Federation, Inc. v. Republic, 694 Phil. 43,47-48 (2012}.
2 Rollo, pp. 4800-4822; Manifestation and Omnibus Motion: (I) To Amend the Resolution promulgated on September 4, 2012 to include the "Treasury Shares" which are part and parcel of the 33,133,266 Coconut Industry Investment Fund (CIIF) Block of San Miguel Corporation (SMC) Shares as of 1983 Decreed by the Sandiganbayan, and Sustained by the Honorable Court, as Owned by the Government; and (2) To Direct San Miguel Corporation (SMC) to Comply with the Final and Executory Resolutions dated October 24, 1991 and March 18, 1992 ofthe Sandiganbayan which were affirmed by the Honorable Court in G.R. Nos. 104637-38 dated 12 October 2012.
3 Id. at 4810-4811.
4 394 Phil. 608 (2000).
5Rollo, p. 4818.
6Philippine Coconut Producers Federation, Inc. v. Republic, 616 Phil. 94, 108 (2009).
7 541 Phil. 24 (2007).
8 Id. at 36.
9 Supra note 4.
10 Id. at 620-621.
11Philippine Coconut Producers Federation. Inc. v. Republic, supra note 1 at 46.
12 Resolution dated 5 October 2016, p. 8.
13 Id. at 18-19.
14Rollo, pp. 1658-1667.
15 Id. at 1659 and 1664; Compromise Agreement and Amicable Settlement, pp. 2 and 7.
16San Miguel Corporation v. Sandiganbayan, 394 Phil. 608,621 (2000).
17 PCGG interposed no o jection to the implementation of the Compromise Agreement subject to the incorporation of the following provisions:
chanRoblesvirtualLawlibrary1. As stated in the COMPROMISE, the 5 million SMC shares (now 26,450,000) paid for by the P500 million first installment shall be delivered to S C, kept in treasury, and sold as soon as feasible in accordance with a plan to be agreed upon by the Commission and SMC; provided, that SMC shall not unreasonably withhold its consent to a sales plan approved by PCGG.
The P500 million paid by SMC as first installment shall be accounted for by UCPB and the CIIF companies to the extent respectively received by them, and any portion thereof in excess of the usual business needs of the possessor shall be delivered by it to the Commission, to be held in escrow tor the ultimate owner.
2. On Delivery Date, the stock certificates for the balance of the SHARES in the name of the 14 holding companies shall be delivered to PCGG and deposited with the Central Bank for safekeeping to await their sale in accordance with the plan of dispersal that PCGG and UCPB shall agree to establish for them. As soon as practicable, but with proper account of market conditions, all those shares shall be sold, and the proceeds thereof disposed as provided below. UCPB shall not unreasonably withhold its consent to a sales plan approved by PCGG in accordance with this paragraph.
3. So much of the proceeds ofthe sale as may be necessary shall be used a) to finance the obligations of the CJIF Companies under the COMPROMISE, and b) to liquidate the obligations of the CIIF Companies to UCPB for the purchase price of the SHARES. The balance shall be kept by the PCGG in escrow to await final judicial determination of the ownership of the various coconut-related companies and of all the other assets involved here. The cash dividends that have been declared on the SHARES may be applied for the above purposes before proceeds from the sale of shares are realized. The balance of such cash dividends shall be held in escrow in the same manner as the sales proceeds.
4. All SHARES shall continue to be sequestered even beyond Delivery Date. Sequestration on them shall be lifted as they are sold consequent to approval of the sale by the Sandiganbayan, and in accordance with the dispersal plan approved by the Commission. All of the SHARES that are unsold will continue to be voted by PCGG while still unsold.
5. The consent of PCGG to the transfer of the sequestered shares of stock in accordance with the COMPROMISE, and to the lifting of the sequestration th reon to permit such transfer, shall be effective only when approved by the Sandiganbayan. The Commission makes no determination of the legal rights of the parties as against each other. The consent it gives here conforms to its duty to care for the sequestered assets, and to its purpose to prevent the repetition of the national plunder. It is not to be construed as indicating any recognition of the legality or sufficiency of any act of any of the patiies. (Id. at 624-626.)
18San Miguel Corporation v. Sandiganbayan, 394 Phil. 608, 628 (2000).
19 Id. at 629.
20 Id.
21 Id. at 631.
22 Id.
23Coronel v. CA, 263 SCRA 15, 7 October 1996.
24 Supra note 17 at 631.
25cralawred Id. at 639-642.
26 Resolution dated 5 October 20 16, p. 25.
27 Id. at21.
28 Id. at 22.
29 Id. at 23.
30 Id.
31Rollo, p. 813.
32 Resolution dated 5 October 2016, p. 25.
33 Id.
34 Id. at 15.
35 Id. at 21.
36 Supra note 4 at 620.
37 Id. at 621.
38 Resolution dated 5 October 2016, p. 13.
39Rollo, pp. 802-803.
40 Id. at 803-804.
41 Id. at 794-820.
42 Id. at 4583-4628.
43 Id. at 4596.
44 Id. at 4605.
45 Id. at 4606.
46 Id. at 5180-5234.
47 Id. at 5228; Comment of San Miguel Corporation on the Manifestation and Omnibus Motion, p. 44.
48Alfelor v. Halasan, 520 Phil. 982, 991 (2006).
49Philippine Coconut Producers Federation Inc. v. Republic, 679 Phil. 508, 621-622 (2012).
LEONEN, J.:
1) in 1975, with the active collaboration of his co-defendants, Cojuangco manipulated the purchase by the Philippine Coconut Authority (PCA) of 72.2% of the outstanding capital stock of the First United Bank (FUB) which was subsequently converted into a universal bank named United Coconut Planters Bank (UCPB); this was accomplished by the use of P85,773,100.00 initially from the Coconut Consumers Stabilization Fund (CCSF) levy — contrary to law and the specific purposes for which said levy was imposed and collected under PD 276 — and under anomalous circumstances, to wit:
chanRoblesvirtualLawlibrarya) he (Cojuangco) used the coconut levy funds to exercise his private option to buy controlling interest in FUB; claiming that the 72.2% of the outstanding capital stock of FUB could only be purchased and transferred through the exercise of his "personal and exclusive option to acquire the 144,000 shares" of said bank, he and the Philippine Coconut Authority (PCA), represented by Maria Clara Lobregat, executed on May 26, 1975, a purchase agreement providing, among others, for the cession to him as compensation thereof 95,383 shares worth P1,444,000.00, with the further condition that he shall manage and control the bank as Director and President for a term of five (5) years renewable for another five (5) years, and have authority to name for election three (3) persons of his choice as members of the bank's Board of Directors;
b) he caused the issuance by Pres. Marcos of PD 755 (a) declaring that the coconut levy funds shall not be considered special fiduciary and trust funds and do not form part of the general funds of the National Government repealing for that purpose PD Nos. 276 and 414 declaring the character of the coconut levy funds as special fiduciary trust and governmental funds: (b) confirming the agreement between him (Cojuangco) and PCA regarding the purchase of FUB, by incorporating that private commercial agreement by reference in PD 755;
c) to cbnsolidate his control of UCPB, he (Cojuangco) imposed as a cJndition attendant upon his purchase of its stock that he should receive and own one out of every nine shares given to PCA; and cralawlawlibrary
d) to make use of the coconut levy fends to build his economic empire, to the prejudice of the government, he (Cojuangco) caused the issuance by Pres. Marcos of PD 1468 requiring the deposit with UCPB of all coconut levy funds, interest free;
2) again with the use of coconut levy funds, he (Cojuangco) created and/or funded various corporations such as the Philippine Coconut Producers Federation, Inc. (COCOFED), Coconut Investment Company (CIC), COCOFED Marketing Corporation (COCOMARK), and the United Coconut Planters Life Assurance Corporation (COCOLIFE) with the active collaboration and participation of his co-defendants Juan Ponce Emile, Maria Clara Lobregat, Rolando de la Cuesta, Jose R. Eleazar, Jr. Jose Reynaldo Morente, Eladio Chatto, Domingo Espina, Anastacio Emanol Sr., Bienvenido Marquez, Jose Gomez, Inaki Mendezona, Manuel del Rosario, Sulpicio Granada, Jose Martinez Jr., Emmanuel Almeda, Danilo Ursua, Herminigildo Zayco and Celestino Zabate, most of whom comprised the interlocking sets of officers and directors of said companies; and he and his co-defendants dissipated, misused and/or misappropriated a substantial part of said coconut levy funds and alloted to themselves excessive salaries, allowances, bonuses and other emoluments, for their own personal benefit, including huge cash advances in millions of pesos which, to date remain unliquidated and unaccounted for; and finally, gained ownership and control of the UCPB by misusing the names and/or identities of the so-called "more than one million coconut farmers;"
3) he misappropriated, misused and dissipated P840 million of the Coconut Industry Development Funds (CIDF) deposited with the National Industry Development Corporation (NIDC) as administrator trustee of said shares and later with UCPB of which he (Cojaungco) was the Chief Executive Officer in connection with the (1) development, improvement, operation and maintenance of the Bugsuk Island Seed Garden ("Bugsuk") with Agricultural Investors, Inc. ("All") as developer (both Bugsuk and All being beneficially held and controlled by Cojuangco); (2) payment of liquidated damages in the amount of P640,856,878.67 and arbitration fees of P150,000.00 pursuant to a decision rendered by a Board of Arbitration against UCPB for alleged breach of contract;
4) he misappropriated and dissipated the coconut levy funds by withdrawing therefrom tens of millions of pesos in order to pay damages adjudged against UNICOM, headed and controlled by Cojuangco, as aforestated, in an anti-trust suit in California, USA;
5) he established and caused to be funded with coconut levy funds, with the active collaboration of Pres. Marcos (through the issuance of LOI 926) and of defendants Juan Ponce Emile, Jose R. Eleazar, Jr., Maria Clara Lobregat, Jose C. Concepcion, Inaki Mendoza, Douglas Luym, Teodoro D. Regala, Emmanuel Almeda, Eduardo Escueta, Leo Palma and Rolando de la Cuesta, the United Coconut Oil Mills, Inc. (UNICOM), a corporation beneficially controlled by him (Cojuangco), and bought sixteen (16) other competing and/or non-operating oil mills at exorbitant prices in the total amount of P184,935 million, to control the prices of copra and other coconut products, and assumed and paid the outstanding loan obligations of seven (7) of those purchased oil mills in the total amount of P805,984 million with the express consent and approval of Pres. Marcos, thereby establishing a coconut monopoly for their own benefit;
....
8) he misused, dissipated and unlawfully disbursed coconut levy funds with the active collaboration and participation of defendants Maria Clara Lobregat, Juan Ponce Enrile, Jose Eleazar Jr., Rohndo de Ia Cuesta and Herminigildo Zayco for projects of Imelda Marcos, including various donations made by PCA such as the amount of P400,000.00 and P10 million for social services and Mrs. Marcos' health and medical assistance projects; P125,000.00 for the yearly Malang pasko project; P10 million to the Cultural Center of the Philippines; P5 million to the Philippine Youth Health and Special Center; P50 million for the construction of the Tahanang Maharlika Building, and P6 million to COCOFED; and other donations made by the UCPB of P100,000.00 to the Manila International Film Festival; P10 million to the UP Faculty Development Fund; P50,000.00 to the Manila Symphony Foundation, Inc., a parcel of land located at Baguio City to the University of Life and "other similar unlawful disbursements", which remain unaccounted for to date;
9) he misused coconut levy funds to buy out the majority of the outstanding shares of stock of San Miguel Corporation in order to control the largest agri-business food and beverage company in the country[.]43
3.1. The sale of the shares covered by and corresponding to the first installment of the 1986 Stock Purchase Agreement consisting of Five Million SMC Shares is hereby recognized by the parties as valid and effective as of 1 April 1986. Accordingly, said shares and all stock and cash dividends declared thereon after 1 April 1986 shall pertain, and are hereby assigned, to SMC....
3.2. The First Installment Shares shall revert to the SMC treasury for dispersal pursuant to the SMC Stock Dispersal Plan attached as Annex "A-I" hereof. The parties are aware that these First Installment Shares shall be sold to raise funds at the soonest possible time for the expansion program of SMC....
3.3. The sale of the shares [co]vered by and corresponding to the second, third and fourth installments of the 1986 Stock Purchase Agreement is hereby rescinded effective 1 April 1986 and deemed null and void, and of no force and effect. Accordingly, all stock and cash dividends declared after 1 April 1986 corresponding to the second, third and fourth installments shall pertain to CIIF Holding Corporations.51
1. As stated in the COMPROMISE, the 5 million SMC shares (now 26,450,000) paid for by the P500 million first installment shall be delivered to SMC, kept in treasury, and sold as soon as feasible in accordance with a plan to be agreed upon by the Commission and SMC; provided, that SMC shall not unreasonably withhold its consent to a sales plan approved by PCGG.
The P500 million paid by SMC as first installment shall be accounted for by UCPB and the CIIF companies to the extent respectively received by them, and any portion thereof in excess of the usual business needs of the possessor shall be delivered by it to the Commission, to be held in escrow for the ultimate owner.
2. On Delivery Date, the stock certificates for the balance of the SHARES in the name of the 14 holding companies shall be delivered to PCGG and deposited with the Central Bank for safekeeping to await their sale in accordance with the plan of dispersal that PCGG and UCPB shall agree to establish for them. As soon as ·practicable, but with proper account of market conditions, all those shares shall be sold, and the proceeds thereof disposed as provided below. UCPB shall not unreasonably withhold its consent to a sales plan approved by PCGG in accordance with this paragraph.
3. So much of the proceeds of the sale as may be necessary shall be used a) to finance the obligations of the CIIF Companies under the COMPROMISE, and b) to liquidate the obligations of the CIIF Companies to UCPB for the purchase price of the SHARES. The balance shall be kept by the PCGG in escrow to await final judicial determination of the ownership of the various coconut-related companies and of all the other assets involved here. The cash dividends that have been declared on the SHARES may be applied for the above purposes before proceeds from the sale of shares are realized. The balance of such cash dividends shall be held in escrow in the same manner as the sales proceeds.
4. All SHARES shall continue to be sequestered even beyond Delivery Date. Sequestration on them shall be lifted as they are sold consequent to approvl of the sale by the Sandiganbayan, and in accordance with the dispersal plan approved by the Commission. All of the SHARES that are unsold will continue to be voted by PCGG while still unsold.
5. The consent of PCGG to the transfer of the sequestered shares of stock in accordance with the COMPROMISE, and to the lifting of the sequestration thereon to permit such transfer, shall be effective only when approved by the Sandiganbayan. The Commission makes 110 determination of the legal riglzts of the parties as ag'linst each other. The consent it gives here conforms to its duty to care for the sequestered assets, and to its purpose to prevent the repetition of the national plunder. It is not to be construed as indicating any recognition of the legality or sufficiency of any act of ny of the parties.57 (Emphasis and underscoring supplied)
It appearing that the sequestered character of the shares of stock subject of the instant petition for the approval of the compromise agreement, which are shares of stock in the San Miguel Corporation in the name of the CIIF Corporations, is independent of the transaction involving the contracting parties in the Compromise Agreement between what may be labeled as the "SMC Group" and the "UCPB Group," and it appearing further that the said sequestered SMC shares of stock have not been physically seized nor taken over by the PCGG, so much so that the reversions contemplated in said Compromise Agreement are without prejudice to the perpetuation of the sequestration thereon, until such time as a judgment might be rendered on said sequestration (which issue is not before this Court as [sic] this time), and it appearing finally that the PCGG has not interposed any objection to the contractual resolution of the problems confronting the "SMC Group" and the "UCPB Group" to the extent that the sequestered character of the shares in question is not affected, this Court will await the pleasure of the Presidential Commission on Good Government before consideration of the Compromise Agreement is reinstated in the Court's calendar.
While this is, in effect, a denial of the "UCPB Group's" Motion to set consideration of the Compromise Agreement herein, this denial is without prejudice to a reiteration of the motion or any other action by the parties should developments hereafter justify the same."59 (Emphasis supplied)
Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy funds-funds, which have been established to be public in character-it goes wi-thout saying that these acquired corporations and assets ought to be regarded and treated as government assets. Being government properties, they are accordingly owned by the Goverriment, for the coconut industry pursuant to currently existing laws.80
The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby MODIFIED, and shall read as follows:
chanRoblesvirtualLawlibraryWHEREFORE, THE MOTION FOR EXECUTION OF PARTIAL SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF STOCK) dated August 8, 2005 of the plaintiff is hereby denied for lack of merit. However, this Court orders the severance of this particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now considered a separate final and appealable judgment with respect to the said CIIF Block of SMC shares of stock.
The Partial Summary Judgment rendered on May 7, 2004 is modified by deleting the last paragraph of the dispositive portion, which will now read, as follows:
chanRoblesvirtualLawlibraryWherefore, in view of the foregoing, we hold that:
chanRoblesvirtualLawlibraryThe Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding Companies and Cocofed, et al) filed by Plaintiff is hereby GRANTED. Accordingly, the CIIF Companies, namely:
Southern Luzon Coconut Oil Mills (SOLCOM); Cagayan de Oro Oil Co., Inc. (CAGOIL); Iligan Coconut Industries, Inc. (ILICOCO); San Pablo Manufacturing Corp. (SPMC); Granexport Manufacturing Corp. (GRANEX); and Legaspi Oil Co., Inc. (LEGOIL),
As well as the 14 Holding Companies, namely:
Soriano Shares, Inc.; ACS Investors, Inc.; Roxas Shares, Inc.; Arc Investors; Inc.; Toda Holdings, Inc.; AP Holdings, Inc.; Fernandez Holdings, Inc.; SMC Officers Corps, Inc.; Te Deum Resources, Inc.; Anglo Ventures, Inc.; · Randy AlliedVentures, Inc.; Rock Steel Resources, Inc.; Valhalla Properties Ltd.; Inc.; and First Meridian Development, Inc.
AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK TOTALING 33,133,266 SHARES AS OF 1983 TOGETHER WITH ALL DIVIDENDS DECLARED, PAID AND ISSUED THEREON AS WELL AS ANY INCREMENTS THERETO ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PRE EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT TO BE USED ONLY FOR THE BENEFIT OF ALL COCONUT FARMERS AND FOR THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND ORDERED RECONVEYED TO THE GOVERNMENT.
THE COURT AFFIRMS THE RESOLUTIONS ISSUED BY THE SANDIGANBAYAN ON JUNE 5, 2007 IN CIVIL CASE NO. 0033-A AND ON MAY II, 2007 IN CIVIL CASE NO. 0033-F, THAT THERE IS NO MORE NECESSITY OF FURTHER TRIAL WITH RESPECT TO THE ISSUE OF OWNERSHIP OF (1) THE SEQUESTERED UCPB SHARES, (2) THE CIIF BLOCK OF SMC SHARES, AND (3) THE CIIF COMPANIES AS THEY HAVE FINALLY BEEN ADJUDICATED IN THE AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND MAY 7, 2004.81
WHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The Partial Summary Judgment dated July II, 2003 in Civil Case No. 0033-A as reiterated with modification in Resolution dated June 5, 2007, as well as the Partial Summary Judgment dated May 7, 2004 in Civil Case No. 0033-F, which was effectively amended in Resolution dated May 11, 2007, are AFFIRMED with MODIFICATION, only with respect to those issues subject of the petitions in G.R. Nos. 177857-58 and 178193. However, the issues raised in G.R. No. 180705 in relation to Partial Summary Judgment dated July 11, 2003 and Resolution dated June 5, 2007 in Civil Case No. 0033-A, shall be decided by this Court in a separate decision.
The Partial Summary Judgment in Civil Case No. 0033-A dated July 11, 2003, is hereby MODIFIED, and shall read as follows:
....
The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby MODIFIED, and shall read as follows:
chanRoblesvirtualLawlibraryWHEREFORE, the MOTION FOR EXECUTION OF PARTIAL SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF STOCK) dated August 8, 2005 of the plaintiff is hereby denied for lack of merit. However, this Court orders the severance of this particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now considered a separate final and appealable judgment with respect to the said CIIF Block of SMC shares of stock. The Partial Summary Judgment rendered on May 7, 2004 is modified by del,eting the last paragraph of the dispositive portion, which will now read, as follows:
chanRoblesvirtualLawlibraryWHEREFORE, in view of the foregoing, we hold that:
chanRoblesvirtualLawlibraryThe Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding Companies and Cocofed, et al) filed by Plaintiff is hereby GRANTED. ACCORDINGLY, THE CIIF COMPANIES, NAMELY:ChanRoblesVirtualawlibrarySouthern Luzon Coconut Oil Mills (SOLCOM); Cagayan de Oro Oil Co., Inc. (CAGOIL); Iligan Coconut Industries, Inc. (ILICOCO); San Pablo Manufacturing Corp. (SPMC); Granexport Manufacturing Corp. (GRANEX); and Legaspi Oil Co., Inc. (LEGOIL),AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:ChanRoblesVirtualawlibrarySoriano Shares, Inc.; ACS Investors, Inc.; Roxas Shares, Inc.; Arc Investors; Inc.; Toda Holdings, Inc.; AP Holdings, Inc.; Fernandez Holdings, Inc.; SMC Officers Corps, Inc.; Te Deum Resources, Inc.; Anglo Ventures, Inc.; Randy Allied Ventures, Inc.; Rock Steel Resources, Inc.; Valhalla Properties Ltd., Inc.; and First Meridian Development, Inc.AND THE CONVERTED SMC SERIES 1 PREFERRED SHARES TOTALING 753,848,312 SHARES SUBJECT OF THE RESOLUTION OF THE COURT DATED SEPTEMBER 17, 2009 TOGETHER WITH ALL DIVIDENDS DECLARED, PAID OR ISSUED THEREON AFTER THAT DATE, AS WELL AS ANY INCREMENTS THERETO ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT TO RE USED ONLY FOR THE BENEFIT OF ALL COCONUT FARMERS AND FOR THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND ORDERED RECONVEYED TO THE GOVERNMENT.
THE COURT AFFIRMS THE RESOLUTIONS ISSUED BY THE SANDIGANBAYAN ON JUNE 5, 2007 IN CIVIL CASE NO. 0033-A AND ON MAY 11, 2007 IN CIVIL CASE NO. 0033-F, THAT THERE IS NO MORE NECESSITY OF FURTHER TRIAL WITH RESPECT TO THE ISSUE OF OWNERSHIP OF ·(1) THE SEQUESTERED UCPB SHARES, (2) THE CIIF BLOCK OF SMC SHARES, AND (3) THE CIIF COMPANIES, AS THEY HAVE FINALLY BEEN ADJUDICATED IN THE AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND MAY 7, 2004.
SO ORDERED.83
Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy funds--funds, which have been established to be public in character-it goes without saying that these acquired corporations and assets ought to be regarded and treated as government assets. Being government properties, they are accordin.sly owned by the Government, for the coconut industry pursuant to currently existing laws.99
A review of past underlying transactions led to the acquisition of the so-called "treasury shares" would indicate that SMC had acquired colorable title to retain possession of the 25.45 million shares of what were once CIIF shares prior to the sequestration of these CIIF shares on April 7, 1986 and the institution of CC Nos. 0033 and 0033-F on July 31, 1987.108
1. When the SMC converts these common shares to treasury stock, it is converting those outstanding shares into the corporation's property for which reason treasury shares do not earn dividends.
2. The retained dividends which would have accrued to those shares if converted to treasury would go into the corporation and enhance the corporation as a whole. The enhancement to the specific sequestered shares, however, would be only to the extent aliquot in relation to all the other outstanding SMC shares.
3. By converting the 26.45 million shares of stock into treasury shares, the SMC has altered not only the voting power of those shares of stock since treasury shares do not vote, but the SMC will have actually enhanced the voting strength of the other outstanding shares of stock to the extent that these 26.45 million shares no longer vote.109 (Emphasissupplied)
More importantly, the PCGG, the government agency empowered to exercise sequestration powers over the 25.45 [million] SMC treasury shares, gave its imprimatur to SMC's ownership and possession of said shares by approving the Compromise Agreement on which SMC predicates its claim and further asserting its ownership and possession of the so-called "arbitration fees of 5.5 million SMC shares that came out of the Compromise Agreement."113
For another, the payment to the PCGG of an arbitration fee in the fonn of 5,500,000 of SMC shares is denounced as illegal, shocking and unconscionable. COCOFED, et al. have assailed the legal right of PCGG to act as arbiter as well as the ,fairness of its acts as arbiter. COCOFED, et aL estimate that the value of the SMC shares given to PCGG as arbitration fee which allegedly is not deserved, can run to P1,966,635,000.00. This is a serious allegation and the Sandiganbayan cannot be[ ]charged with grave abuse of discretion when it ordered that SMC should be temporarily dispossessed of the subject treasury shares and that SMC should pay their dividends while the Compromise Agreement involving them is still under question.
....
. . . Petitioners cannot insist on their right to have their Compromise Agreement approved on the ground that it bears the imprimatur of the PCGG. To be sure, the consent of the PCGG is a factor that should be considered in the approval or disapproval of the subject Compromise Agreement but it is not the only factor.115 (Emphasis supplied)
1. The Compromise Agreement subject matter of this petitiOn categorically states that "(a)ll the terms of th(e) Agreement are subject to approval by the Presidential Commission on Good Government (PCGG) as may be required by Executive Orders numbered 1, 2, 14 and 14-A. (T)he Agreement and the PCGG approval thereof shall be submitted to the Sandiganbayan....
PCGG has consented to the Compromise Agreement. But its consent is "effective only when approved by the Sandiganbayan (PCGG Resolution dated 15 June 1990, In Re: Compromise Agreement between San M{guel Corporation, et al. and United Coconut Planters Bank, et al.). Petitioners accepted this condition, and incorporated by [sic] reference such condition as an integral part of the Compromise Agreement.117 (Emphasis supplied)
To sway this Court, the Republic relies on the fact that the Compromise Agreement between SMC and the CIIF Companies ratifying the sale of the first installment shares had been submitted but has not been approved by the Sandiganbayan. But note, neither has the Compromise Agreement been disapproved by that or this Court. Nowhere in San Miguel Corporation v. Sandiganbayan did the Court rule on the validity of the Compromise Agreement, much less "indirectly [deny] approval of the Compromise Agreement," since it was not the issue presented for the Court's Resolution.118
The cases at bar do not merely involve a compromise agreement dealing with private interest. The Compromise Agreement here involves sequestered shares of stock now worth more than nine (9) billions of pesos, per estimate given by COCOFED. Their ownership is still under litigation. It is not yet known whether the shares are part of the alleged ill gotten wealth of former President Marcos and his "cronies." Any Compromise Agreement concerning these sequestered shares falls within the unquestionable jurisdiction of and has to be approved by the Sandiganbayan. The parties themselves recognized this jurisdiction. In the Compromise Agreement itself, the petitioners and the UCPB Group expressly acknowledged the need to obtain the approval by the Sandiganbayan of its terms and conditions, thus:ChanRoblesVirtualawlibrary5. Unless extended by mutual agreement of the parties, the 'Delivery Date' shall be on the 10th Day from and after receipt by any party of the notice of approval of this Compromise Agreement and Amicable Settlement by the Sandiganbayan. Upon receipt of such notice, all other parties shall be immediately informed.The PCGG Resolution of June 15, 1990 also imposed the approval of the Sandiganbayan as a condition sine qua non for the transfer of these sequestered shares of stock, viz:ChanRoblesVirtualawlibrary"4. All SHARES shall continue to be sequestered even beyond Delivery Date. , Sequ.estration on them shall be lifled as they are sold consequent to approval of the sale by the Sandiganbayan, and in accordance with the dispersal plan approved by the Commission. All of the SHARES that are unsold will continue to be voted by PCGG while still unsold.
5. The consent of PCGG to the transfer of the sequestered shares of stock in accordance with the COMPROMISE, and to the lifting of the sequestration thereon to permit such transfer, shall be effective only when approved by the Sandiganbayan. The Commission makes no determination of the legal rights of the parties as against each other. The consent it gives here conforms to its duty to care for the sequestered assets, and to its purpose to prevent the repetition of the national plunder. It is not to be construed as indicating any recognition of the legality or sufficiency of any act of any ofthe parties."120 (Emphasis supplied)
At this time the Court has not approved any Compromise Agreement between the so-called "UCPB" and the "SMC Group. " As of July 23, 1991, this Court has merely noted the Manifestation of these two groups, as well as the PCGG's and that of the SMC Corporate Secretary, that the contending groups had executed a Compromise Agreement in resolution of their difference.
Consistent with this Court's earlier position as stated in its Resolution of June 3, 1991, this Court's continuing interest in the shares of stock subject of the Compromise Agreement between the so-called SMC and UCPB Groups remains only with respect to those shares of stock which are sequestered. These shares of stock are precisely the SMC shares owned by the CIIF Companies," as well as the so-called "first installment shares" represented by the stock certificate No. A0004129 representing 15,274,484 shares and stock certificate No. B0001556 representing 10,175,516 shares (for a total of 25,450,000 shares).
At issue is now the physical custody of these two certificates of stock.
As with all sequestered property, the true or final ownership of the shares -of stock is still unresolved at this time. Should San Miguel Corporation be found not to be entitled thereto in the end, as when these shares are found to have been "ill-gotten property" after all (should things turn out this way), these shares of stock and all their fruits must be turned over to the government.
Put differently, until the sequestration of these shares represented by the aforementioned stock certificates has been lifted by this Court, their conversion to Treasury Shares of SMC and their subsequent dispersal to SMC stockholders are merely a declaration of an intention made by the parties to the Compromise Agreement.
These 25,450,000 shares of stock are today sequestered stock and at this time nothing may be done with them which might prejudice their eventual delivery to their lawful owner or owners who will be determined at the close of these judicial proceedings. Conversion of these shares of stock into Treasury Shares (and their dispersal as intimated in the Compromise Agreement) could prevent their delivery as well as the delivery of the fruits of these shares to anybody later found by the Court to be entitled thereto.
The intended declaration of these shares as Treasury Shares is, therefore, not capable of implementation at this time and the rules governing Treasury Shares cannot yet be deemed enforceable over them. 122 (Emphasis supplied)
"Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy funds-funds, which have been established to be public in character-it goes without saying that these acquired corporations and assets ought to be regarded and treated as government assets. Being government properties, they are accordingly owned by the Government, for the coconut industry pursuant to currently existing laws.126
The office of a judgment nunc pro tunc is to record some act of the court done at a former time which was not then carried into the record, and the power of a court to make such entries is restricted to placing upon the record evidence of judicial action which has been actually taken. It may be used to make the record speak the truth, but not to make it speak what it did not speak but ought to have spoken. If the court has not rendered a judgment that it might or should have rendered, or if it has rendered an imperfect or improper judgment, it has no power to remedy these errors or omissions by ordering the entry nunc pro tunc of a proper judgment. Hence a court in entering a judgment nunc pro tunc has no power to construe what the judgment means, but only to enter of record such judgment as had been formerly rendered, but which had not been entered of record as rendered. In all cases the exercise of the power to enter judgments nunc pro tunc presupposes the actual rendition of a judgment, and a mere right to a judgment will not furnish the basis for such an entry.
There can be no doubt that such an entry may operate so as to save proceedings which have been had before it is made, but where no proceedings have been had and the jurisdiction of the court over the subject has been withdrawn in the meantime, a court has no power to make a nunc pro tunc order. If the court has omitted to make an order, which it might or ought to have made, it cannot, at a subsequent term, be made nunc pro tunc. According to some authorities, in all cases in which an entry nunc pro tunc is made, the record should show the facts which authorize the entry, but other courts hold that in entering an order nunc pro tunc the court is not confined to an examination of the judge's minutes, or written evidence, but may proceed on any satisfactory evidence, including parol testimony. In the absence of a statute or rule of court requiring it, the failure of the judge to sign the journal entries or the record does not affect the force of the order granted.
The phrase nunc pro tunc signifies 'now for then,' or that a thing is done now that shall have the same legal force and effect as if done at the time it ought to have been done. A court may order an act done nunc pro tunc when it, or some one of its immediate ministerial officers, has done some act which for some reason has not been entered of record or otherwise noted at the time the order or judgment was made or should have been made to appear on the papers or proceedings by the ministerial officer.
The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have been.
A nunc pro tunc entry in practice is an entry made now of something which was actually previously done, to have effect as of the former date. Its office is not to supply omitted action by the court, but to supply an omission in the record of action really had, but omitted through inadvertence or mistake.
Except as to the rights of third parties, a judgment nunc pro tunc is retrospective, and has the same force and effect, to all intents and purposes, as if it had been entered at the time when the judgment was originally rendered.
It is competent for the court to make an entry nunc pro tunc after the term at which the transaction occurred, even though the rights of third persons may be affected. But entries nunc pro tunc will not be ordered except where this can be done without injustice to either party, and as a nunc pro tunc order is to supply on the record something which has actually occurred, it cannot supply omitted action by the court. Record entries nunc pro tunc can properly be made only when based on some writing in a cause which directly or by fair inference indicates the purpose of the entry so sought to be made, or on the personal knowledge and recollection of the court; but in a case where a statement of facts was filed after adjournment of the court for the term, but within the time allowed by an order not entered in the minutes on an oral motion made therefore at the trial, the court at a subsequent term was held to have jurisdiction to permit the filing of such order nunc pro tunc on the recollection of the judge and other parol testimony that the order had been applied for and granted during the previous term, without any memorandum or other written evidence thereof. A nunc pro tunc entry will be treated as a verity where not appealed from.129 (Citations omitted)
The closed mind has no place in the open society. It is part of the sporting idea of fair play to hear "the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously, one side is only one-half of the question; the other half must also be considered if an impartial verdict is to be reached based on an informed appreciation of the issues in· contention. It is indispensable that the two sides complement each other, as unto the bow the arrow, in leading to the correct ruling after examination of the problem not from one or the other perspective only but in its totality. A judgment based on less that this full appraisal, on the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance or i§rorance, or worst of all, in repressive regimes, the insolence of power.133
ARTICLE VI
Legislative Department
....
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. If the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the Government.
Endnotes:
1 394 Phil. 608 (2000) (Per J. Puno, En Banc].
2 679 Phil. 508 (2012) (Per J. Velasco, En Banc] and 694 Phil. 43 (2012) [Per J. Velasco, Jr. En Banc].
3 423 Phil. 735 (2001) [Per J. Panganiban, En Banc].
4Rollo, pp. 4800-4855.
5 COCOFED, et al. v. Republic, et al., 694 Phil. 43 (2012) [Per J. Velasco, Jr., En Banc].
6San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 624 (2000) [Per J. Puno, En Banc].
7 Rep. Act No. 6260 (1971), Coconut Investment Act. Rep. Act No. 6260 (1971), sec. 8. See also COCOFED v. PCGG, 258-A Phil. 1 (1989) [Per J. Narvasa, En Banc].
9 Rep. Act No. 6260 (971), sec. 8.
10 Rep. Act No. 6260 (1971 ), sec. 5(a).
11 Rep. Act No. 6260 (1971), sec. 5(b).
12 Rep. Act No. 6260 (1971), sec.5(a).
13 See Rep. Act No. 6260 (1971), sec. 5.
14 Rep. Act No. 6260 (1971), sec. 7.
15 Pres. Decree No. 276 (1973), Establishing a Coconut Consumers Stabilization Fund.
16 Pres. Decree No. 276 (1973), sec. I (b).
17 Pres. Decree No. 276 (1973), sec. 2.
18 Pres. Decree No. 414 (1974), Further Amending Presidential Decree No. 232 As Amended. Pres. Decree No. 232 created the Philippine Coconut Authority.
19 Pres. Decree No. 582 (1974), Further Amending Presidential Decree No. 232, As Amended.
20 Pres. Decree No. 582 (1974), sec. 2.
21 Pres. Decree No. 582 (1974), sec. 2.
22 Pres. Decree No. 961 (1976).
23 Pres. Decree No. 1468 (1978).
24 Pres. Decree No. 1468 (1978), sec. 9 provides:
chanRoblesvirtualLawlibrarySECTION 9. Investments For the Benefit of the Coconut Farmers.-Notwithstanding any law to the contrary, the bank acquired for the benefit of the coconut farmers under PD 755 is hereby given full power and authority to make investments in the form of shares of stock in corporations organized, for the purpose of engaging in the establishment and the operation of industries and commercial activities and other allied business undertakings relating to the coconut and other palm oils industry in all its aspects and the establishment of a research into the commercial and industrial uses of coconut and other oil industry. For that purpose, the Authority shall, from time to time, ascertain how much of the collections of the Coconut Consumers Stabilization Fund and/or the Coconut Industry Development Fund is not required to finance the replanting program and other purposes herein authorized and such ascertained surplus shall be utilized by the bank for the investments herein authorized.
25cralawred Pres. Decree No. 1468 (1978), sec. 9.
26 Pres. Decree No. 1468 (1978), sec. 9.
27See COCOFED v. PCGG, 258-A- Phil. 1, 8-9 (1989) [Per J. Narvasa, En Banc].
28 See COCOFED, et al. v. Republic, 679 Phil. 508, 532 (2012) [Per J. Velasco, Jr., En Banc].
29 Pres. Decree No. 1699 (1980).
30 Pres. Decree No. 1699 (1980).
31See Pres. Decree No. 1841 (1981 ).
32See Pres. Decree No. 1841 (1981 ), sec. 6.
33 Pres. Decree No. 1841 (1981 ), sec. 1.
34 Pres. Decree No. 1841 (1981 ), sec. 1.
35 Pres. Decree No. 1841 (1981 ), sec. 1.
36 Pres. Decree No. 1841 (1981 ), sec. 1.
37 Pres. Decree No. 1841 (1981 ), sec. 1.
38 Pres. Decree No. 1841 (1981), sec. 1.
39 Pres. Decree No. 1841 (1981), sec. 1.
40 See Javier v. Commission on Elections, 228 Phil. 193 (1986) [Per J. Cruz, En Banc).
41COCOFED v. PCGG, 258-April. 1, 12 (1989) [Per J. Narvasa, En Banc].
42Republic v. Sandiganbayan (First Division), et al., 310 Phil. 401, 449-460 (1995) [Per C.J. Narvasa, En Banc]. The 14 CIIF Companies are also referred to as the UCPB Group.
43 ld. at 450-453.
44San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 620 (2000) [Per J. Puno, En Banc].
45 Id. at 621.
46COCOFED v. PCGG, 258-A Phil. 1, 12 (1989 [Per J. Narvasa, En Banc].
47San Miguel Corporation v. Sandiganbayan (Firsi Division), et al., 394 Phil. 608, 621 (2000) (Per J. Puno, En Banc].
48Soriano III v. Han. Yuzon, et al., 247 Phil. 191 (1988) [Per J. Narvasa, En Banc].
49 Id. at 208.
50San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 621 (2000) [Per J. Puno, En Banc].
51 Id. at 621-622.
52 Id. at 622.
53 Id.
54 Id. at 622-623.
55 Id. at 624.
56 Id.
57 Id. at 625-626.
58 Id. at 627.
59 Id. at 627-628.
60 Id. at 628.
61 Id.
62 Id. at 630.
63 Id.
64 Id.
65 Id.
66 Id. at 631.
67 394 Phil. 608 (2000) [Per J. Puno, En Banc].
68 Id. at 639.
69 Id. at 640.
70 Id. at 645.
71 423 PhiL 735 (2001) [Per J. Panganiban, En Banc].
72COCOFED, et al. v. Republic, 679 Phil. 508 (2012) [Per J. Velasco, Jr., En Banc].
73 Id. at 614.
74 COCO FED, et al. v. Republic, 616 Phil. 94, 102 (2009) [Per J. Velasco, Jr. En Banc].
75 Id.
76 Id. at 140. The common shares were valued at P53.50 and P54.00 as of June 1, 2009. The conversion would place the issue price at P75.00.
77See J. Carpio Morales, Dissenting Opinion in COCOFED, et al. v. Republic, 616 Phil. 94, 135-141 (2009) [Per J. Velasco, Jr. En Banc]. The shares were redeemed at P75.00, and the proceeds of the redemption were turned over to the Republic. See rollo, pp. 5100-5161, in compliance with this Court's Resolution dated September 4, 2012 denying the Motion for Reconsideration of the January 24,2012 Decision.
78COCOFED, et at. v. Republic, 626 Phil. 157 (2010) [Per J. Velasco, Jr. En Banc].
79COCOFED, et al. v. Republic, 679 Phil. 508, 621 (2012) [Per J. Velasco, Jr. En Banc].
80 Id.
81 Id. at 638-640.
82 COCO FED, et al. v. Republic, 694 Phil. 43, 51 (2012) [Per J. Velasco, Jr. En Banc).
83 Id. a t48-51.
84Rollo, pp. 4800-4827.
85 Id. at 4812-4814, Manifestation and Omnibus Motion.
86 Id.
87 Id. at 5191, Comment on the Manifestation and Omnibus Motion.
88 Id. at 5194-5196.
89 Id. at 5213.
90 Ponencia, p. 19.
91 Id.
92 Id. at 20-23.
93 Id.at 11-17.
94San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 620 (2000) [Per J. Puno, En Banc].
95 Id. at 621.
96 The sale of P500 million shares to San Miguel Corporation was recognized by the parties as valid in view of Soriano III's payment of the first installment. See San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608,628 (2000) [Per J. Puno, En Banc].
97 San Miguel Corporation v. Sandiganbayan (First Division). et al., 394 Phil. 608, 628 (2000) [Per J. Puno, En Banc].
98 COCOFED, et al. v. Republic, 679 Phil. 508 (20 12) [Per J. Velasco, En Banc].
99 Id. at 621.
100 San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 630 (2000) [Per J. Puno, En Banc].
101See San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 653 (2000) [Per J. Puno, En Banc].
102 Ponencia, p. 18.
103 Id.
104 The full title is Manifestation and Omnibus Motion I) To amend the Resolution promulgated on September 4, 2012 to include the "treasury shares" which are part and parcel of the 33,133,266 Coconut Industry Investment Fund (CIIF) block of San Miguel Corporation (SMC) shares as of 1983 decreed by the Sandiganbayan, and sustained by the Honorable Court, as owned by the government; and 2) to direct San Miguel Corporation (SMC) to comply with the final and executory Resolutions dated October 24, 1991 and March 18, 1992 of the Sandiganbayan which were affirmed by the Honorable Court in G.R. Nos. 104637-38.
105Rollo, pp. 5185-5237.
106 Ponencia, p. 19.
107 394 Phil. 608 (2000) [Per J. Puno, En Banc].
108 Ponencia, p. 18.
109 San Miguel Corporation, et al. v. Sandiganbayan (First Division), et al., 394 Phil. 608, 630-640 (2000) [Per J. Puno, En Banc].
110Rollo, pp. 3413-3414.
111 Id. at 3415-3416.
112 Id. at 3322-3351.
113 Ponencia, p.13.
114San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608. 641 (2000) [Per J. Puno, En Banc].
115 Id. at 641-652.
116 ld. at 639, citing the Manifestation dated March 15, 1991 of San Miguel Corporation.
117 Id. at 638-639, citing the Manifestation dated March 15, 1991 of San Miguel Corporation.
118 Ponencia, p. 20.
119 See CIVIL CODE, art. 2028, in relation to art. 2032, which provide:
chanRoblesvirtualLawlibraryArticle 2028. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.
....
Article 2032. The court's approval is necessary in compromises entered into by guardians, parents, absentee's representatives, and administrators or executors of decedent's estates.
120 San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 637-638 (2000) [Per J. Puno, En Banc].
121Rollo, pp. 3351-3354.
122 Id.
123 J. Pardo, Dissenting Opinion in San Miguel Corporation v. Sandiganbayan (First Division), et al., 394 Phil. 608, 654 (2000) [Per J. Puno, En Banc].
124Rollo, p. 583.
125 Id. at 598.
126 COCOFED, et al. v. Republic, 679 Phil. 508, 621 (2012) [Per J. Velasco, Jr. En Banc].
127COCOFED, et al. v. Republic, 694 Phil. 43, 46 (20 12) [Per J. Velasco, Jr., En Banc].
128 51 Phil. 862 (1923) [Per J. Romualdez, En Banc].
129 Id. at 879-881.
130Ynot v. Intermediate Appellate Court, 232 Phil. 615, 631 (1987) [Per J. Cruz, En Banc].
131 Id. at 624.
132 232 Phil. 615 (1987) [Per J. Cruz, En Banc).
133 Id. at 624.
134Mutuc v. Court of Appeals, 268 Phil. 37, 43 (1990) [Per J. Paras, Second Division].
135 Id., citing Juanita Yap Say v. IAC, 242 Phil. 802 (1988) [Per J. Sarmiento, Second Division].
136Rollo, pp. 3322-3350.
137 Id. at 3423-A- 3423-C.
138 Id. at 598.
139 Id. at 5189-5237.
140 Id. at 5238-5289.
141See Duma and Duma v. Espinas, et al., 515 Phil. 685, 699 (2006) [Per J. Austria-Martinez, First Division], citing Etares v. Court of Appeals, 498 Phil. 640, 658-659 (2005) [Per J. Austria-Martinez, Second Division].
142 See Bough and Bough v. Cantiveros and Hanopol, 40 Phil. 210, 216 (1919) [Per J. Malcolm, En Banc] and Rellosa v. Caw Chee Hun, 93 Phil. 827, 832-833 (1953) [Per J. Bautista-Angelo, En Banc].
143COCOFED, et al. v. Republic, 679 Phil. 508 (2012) [Per J. Velasco, Jr., En Banc].
144 Id. at 620.
145 Enacted February 28, 1986.
146 Enacted March 12, 1986.
147See COCOFED v. PCGG, 258-A Phil. 1 (1989) [Per J. Narvasa, En Banc).
148Bough and Bough v. Cantiveros and Hanopol, 40 Phil. 210, 216 (1919) [Per J. Malcolm, En Banc]: "[A] party tq an illegal contract cannot come into a court of law and ask to have his illegal objects carried out. . . . The law will not aid either party to an illegal agreement; it leaves the parties where it finds them."
149See Rellosa v. Gaw Chee Hun, 93 Phil. 827, 832-833 (1953) [Per J. Bautista-Angelo, En Banc].
150 Id.