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EN BANC
PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT
(PCGG),
Petitioner,

G.R. No. 209447

- versus HON. WINLOVE M. DUMAYAS,

Presiding Judge, Regional Trial
Court, Branch 59, Makati City and
UNITED COCONUT PLANTERS
BANK (UCPB),
Respondents.

x--------------------------x
PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT
(PCGG),
Petitioner,

- versus -

HON. WINLOVE M. DUMAYAS,

Presiding Judge, Regional Trial Court,
Branch 59, Makati'. City and UNITED
COCONUT PLANTERS LIFE
ASSURANCE CORPORATION
(COCOLIFE),
Respondents.

G.R. No. 210901

Present:
SERENO, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,*
BRION,
PERALTA,*
BERSAMIN,
DEL CASTILLO,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
REYES,**
PERLAS-BERNABE,
LEONEN, and
JARDELEZA,* JJ.

x-------------------------------

Promulgated:
Au~ust 11
lfo...

. ti

2015
'

1\

No part.

On leave.

Decision

G.R. Nos. 209447 & 210901

DECISION
VILLARAMA, JR., J.:
It is an important fundamental principle in our judicial system that
every litigation must come to an end. Litigation must end and terminate
sometime and somewhere, and it is essential to an effective and efficient
administration of justice that, once a judgment has become final, the winning
party be, not through a mere subterfuge, deprived of the fruits of the
verdict.1 Adherence to the principle impacts upon the lives of about three
million poor farmers who have long waited to benefit from the outcome of
the 27-year battle for the judicial recovery of assets acquired through illegal
conversion of the coconut levies collected during the Marcos regime into
private funds.
The Case
Before us are the consolidated petitions seeking the reversal of
the following Orders2 issued by respondent Presiding Judge of the Regional
Trial Court (RTC) of Makati City, Branch 59: (a) Order dated April 29,
2013 denying petitioners motion to dismiss the complaint in Civil Case No.
12-1251; (b) Order dated June 28, 2013 denying the motion for
reconsideration filed by petitioner; (c) Omnibus Order dated May 15, 2013
denying petitioners motion to dismiss the complaint in Civil Case No. 121252; and (d) Order dated December 4, 2013 denying the motion for
reconsideration filed by petitioner.
The Antecedents
The factual background of this case is gathered from the records and
the decisions of this Court involving the coconut levy funds. We reproduce
the pertinent portions of the January 24, 2012 Decision in COCOFED v.
Republic3:
In 1971, Republic Act No. (R.A.) 6260 was enacted creating the
Coconut Investment Company (CIC) to administer the Coconut
Investment Fund (CIF), which, under Section 8 thereof, was to be
sourced from a PhP 0.55 levy on the sale of every 100 kg. of copra. Of the
PhP 0.55 levy of which the copra seller was, or ought to be, issued
COCOFUND receipts, PhP 0.02 was placed at the disposition of
COCOFED, the national association of coconut producers declared by the
Philippine Coconut Administration (PHILCOA, now PCA) as having the
largest membership.

1
2

Navarro v. Metropolitan Bank & Trust Company, 612 Phil. 462, 471 (2009).
Rollo (G.R. No. 209447), pp. 52-56; rollo (G.R. No. 210901), pp. 52-61. The Omnibus Order dated
May 15, 2013 was issued by Presiding Judge Josefino A. Subia of the RTC, Branch 138, Makati City.
679 Phil. 508 (2012).

Decision

G.R. Nos. 209447 & 210901

The declaration of martial law in September 1972 saw the issuance

of several presidential decrees (P.Ds.) purportedly designed to improve
the coconut industry through the collection and use of the coconut levy
fund. While coming generally from impositions on the first sale of copra,
the coconut levy fund came under various names x x x. Charged with the
duty of collecting and administering the Fund was PCA. Like COCOFED
with which it had a legal linkage, the PCA, by statutory provisions
scattered in different coco levy decrees, had its share of the coco levy.
The following were some of the issuances on the coco levy, its
collection and utilization, how the proceeds of the levy will be managed
and by whom, and the purpose it was supposed to serve:
1. P.D. No. 276 established the Coconut Consumers Stabilization
Fund (CCSF) and declared the proceeds of the CCSF levy as trust fund, to
be utilized to subsidize the sale of coconut-based products, thus stabilizing
the price of edible oil.
2. P.D. No. 582 created the Coconut Industry Development Fund
(CIDF) to finance the operation of a hybrid coconut seed farm.
3. Then came P.D. No. 755 providing under its Section 1 the
following:
It is hereby declared that the policy of the State is to
provide readily available credit facilities to the coconut
farmers at a preferential rates; that this policy can be
expeditiously
and
efficiently
realized
by
the
implementation of the Agreement for the Acquisition of a
Commercial Bank for the benefit of Coconut Farmers
executed by the [PCA] x x x; and that the [PCA] is hereby
authorized to distribute, for free, the shares of stock of the
bank it acquired to the coconut farmers x x x.
Towards achieving the policy thus declared, P.D. No. 755, under
its Section 2, authorized PCA to utilize the CCSF and the CIDF
collections to acquire a commercial bank and deposit the CCSF levy
collections in said bank, interest free, the deposit withdrawable only
when the bank has attained a certain level of sufficiency in its equity
capital. The same section also decreed that all levies PCA is authorized to
collect shall not be considered as special and/or fiduciary funds or form
part of the general funds of the government within the contemplation of
P.D. No. 711.
4. P.D. No. 961 codified the various laws relating to the
development of coconut/palm oil industries.
5. The relevant provisions of P.D. No. 961, as later amended by
P.D. No. 1468 (Revised Coconut Industry Code), read:
ARTICLE III
Levies
Section 1. Coconut Consumers Stabilization Fund
Levy. The [PCA] is hereby empowered to impose and
collect x x x the Coconut Consumers Stabilization Fund
Levy x x x.

Decision

G.R. Nos. 209447 & 210901

xxxx
Section 5. Exemption. The [CCSF] and the
[CIDF] as well as all disbursements as herein authorized,
shall not be construed x x x as special and/or fiduciary
funds, or as part of the general funds of the national
government within the contemplation of PD 711; x x x the
intention being that said Fund and the disbursements
thereof as herein authorized for the benefit of the
coconut farmers shall be owned by them in their private
capacities: x x x. (Emphasis supplied.)
6. Letter of Instructions No. (LOI) 926, Series of 1979, made
reference to the creation, out of other coco levy funds, of the Coconut
Industry Investment Fund (CIIF) in P.D. No. 1468 and entrusted a
portion of the CIIF levy to UCPB for investment, on behalf of coconut
farmers, in oil mills and other private corporations, with the following
equity ownership structure:
Section 2. Organization of the Cooperative
Endeavor. The [UCPB], in its capacity as the investment
arm of the coconut farmers thru the [CIIF] x x x is hereby
directed to invest, on behalf of the coconut farmers, such
portion of the CIIF x x x in private corporations x x x under
the following guidelines:
a) The coconut farmers shall own or control at least
x x x (50%) of the outstanding voting capital stock of the
private corporation [acquired] thru the CIIF and/or
corporation owned or controlled by the farmers thru the
CIIF x x x. (Words in bracket added.)
Through the years, a part of the coconut levy funds went directly
or indirectly to [finance] various projects and/or was converted into
different assets or investments. Of particular relevance to this case was
their use to acquire the First United Bank (FUB), later renamed UCPB,
and the acquisition by UCPB, through the CIIF companies, of a large
block of SMC shares.
xxxx
Shortly after the execution of the PCA-Cojuangco, Jr. Agreement,
President Marcos issued, on July 29, 1975, P.D. No. 755 directing, as
earlier narrated, PCA to use the CCSF and CIDF to acquire a commercial
bank to provide coco farmers with readily available credit facilities at
preferential rate, and PCA to distribute, for free, the bank shares to
coconut farmers.
Then came the 1986 EDSA event. One of the priorities of then
President Corazon C. Aquinos revolutionary government was the
recovery of ill-gotten wealth reportedly amassed by the Marcos family and
close relatives, their nominees and associates. Apropos thereto, she issued
Executive Order Nos. (E.Os.) 1, 2 and 14, as amended by E.O. 14-A, all
Series of 1986. E.O. 1 created the PCGG and provided it with the tools
and processes it may avail of in the recovery efforts; E.O. No. 2 asserted
that the ill-gotten assets and properties come in the form of shares of
stocks, etc.; while E.O. No. 14 conferred on the Sandiganbayan exclusive
and original jurisdiction over ill-gotten wealth cases, with the proviso that

Decision

G.R. Nos. 209447 & 210901

technical rules of procedure and evidence shall not be applied strictly to

the civil cases filed under the E.O. Pursuant to these issuances, the PCGG
issued numerous orders of sequestration, among which were those
handed out, as earlier mentioned, against shares of stock in UCPB
purportedly owned by or registered in the names of (a) more than a
million coconut farmers and (b) the CIIF companies, including the SMC
shares held by the CIIF companies. On July 31, 1987, the PCGG
instituted before the Sandiganbayan a recovery suit docketed thereat as CC
No. 0033.
After the filing and subsequent amendments of the complaint in
CC 0033, Lobregat, COCOFED, et al., and Ballares, et al., purportedly
representing over a million coconut farmers, sought and were allowed to
intervene. Meanwhile, the following incidents/events transpired:
1. On the postulate, inter alia, that its coco-farmer
members own at least 51% of the outstanding capital stock
of UCPB, the CIIF companies, etc., COCOFED, et al., on
November 29, 1989, filed Class Action Omnibus Motion
praying for the lifting of the orders of sequestration referred
to above and for a chance to present evidence to prove the
coconut farmers ownership of the UCPB and CIIF shares.
The plea to present evidence was denied;
2. Later, the Republic moved for and secured
approval of a motion for separate trial which paved the way
for the subdivision of the causes of action in CC 0033, each
detailing how the assets subject thereof were acquired and
the key roles the principal played;
3. Civil Case 0033, pursuant to an order of the
Sandiganbayan would be subdivided into eight complaints,
docketed as CC 0033-A to CC 0033-H.
xxxx
4. On February 23, 2001, Lobregat, COCOFED,
Ballares, et al., filed a Class Action Omnibus Motion to
enjoin the PCGG from voting the sequestered UCPB shares
and the SMC shares registered in the names of the CIIF
companies. The Sandiganbayan, by Order of February 28,
2001, granted the motion, sending the Republic to come to
this Court on certiorari, docketed as G.R. Nos. 14706264, to annul said order; and
5. By Decision of December 14, 2001, in G.R.
Nos. 147062-64 (Republic v. COCOFED), the Court
declared the coco levy funds as prima facie public funds.
And purchased as the sequestered UCPB shares were by
such funds, beneficial ownership thereon and the
corollary voting rights prima facie pertain, according to
the Court, to the government.4 (Additional emphasis,
italics and underscoring supplied)

As mentioned in the above-cited case, the amended complaint in Civil

4

Id. at 528-536.

Decision

G.R. Nos. 209447 & 210901

Case No. 0033 revolved around the provisional take-over by the PCGG of
COCOFED, Cocomark, and Coconut Investment Company and their assets
and the sequestration of shares of stock in UCPB CIIF corporations (CIIF oil
mills and the 14 CIIF holding companies), or CIIF companies, so-called for
having been either organized, acquired and/or funded as UCPB subsidiaries
with the use of the CIIF levy. The basic complaint also contained
allegations about the alleged misuse of the coconut levy funds to buy out the
majority of the outstanding shares of stock of San Miguel Corporation
(SMC).5
The proceedings relevant to this case pertain to Civil Case No. 0033-A
entitled, Republic of the Philippines, Plaintiff, v. Eduardo M. Cojuangco, Jr.,
et al., Defendants, COCOFED, et al., BALLARES, et al., Class Action
Movants (Re: Anomalous Purchase and Use of [FUB] now [UCPB]), and
Civil Case No. 0033-F entitled, Republic of the Philippines, Plaintiff, v.
Eduardo M. Cojuangco, Jr., et al., Defendants (Re: Acquisition of San
Miguel Corporation Shares of Stock).
The Sandiganbayan rendered partial summary judgments in Civil Case
No. 0033-A and 0033-F on July 11, 2003 and May 7, 2004, respectively. In
our Decision dated January 24, 2012 in COCOFED v. Republic,6 we
affirmed with modification the said partial summary judgments and also
upheld the Sandiganbayans ruling that the coconut levy funds are special
public funds of the Government. Citing Republic v. COCOFED7 which
resolved the issue of whether the PCGG has the right to vote the sequestered
shares, we declared that the coconut levy funds are not only affected with
public interest but are, in fact, prima facie public funds. We also upheld the
Sandiganbayans ruling that Sections 1 and 2 of P.D. 755, Section 3, Article
III of P.D. 961, and the implementing regulations of the PCA, are
unconstitutional for allowing the use and/or the distribution of properties
acquired through the coconut levy funds to private individuals for their own
direct benefit and absolute ownership. As to the ownership of the six CIIF
companies, the 14 holding companies, and the CIIF block of SMC shares of
stock, we held these to be owned by the Government, having likewise been
acquired using the coconut levy funds. Accordingly, the properties subject
of the January 24, 2012 Decision were declared owned by and ordered
reconveyed to the Government, to be used only for the benefit of all coconut
farmers and for the development of the coconut industry.8
Under the Resolution dated September 4, 2012, we denied with
finality the motion for reconsideration filed by the petitioners in G.R. Nos.
177857-58.

5
6
7
8

Id. at 525-526.
Supra note 3.
423 Phil. 735 (2001).
As summarized in Cojuangco, Jr. v. Republic, G.R. No. 180705, November 27, 2012, 686 SCRA 472,
477-482.

Decision

G.R. Nos. 209447 & 210901

The dispositive portion of the September 4, 2012 Resolution in

Philippine Coconut Producers Federation, Inc. (COCOFED) v. Republic of
the Philippines9 thus reads:
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:
WHEREFORE, the petitions in G.R. Nos. 17785758 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. 17785758 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:
WHEREFORE, in view of the foregoing, We
rule as follows:
SUMMARY OF THE COURTS RULING.
A. Re: CLASS ACTION MOTION FOR A
SEPARATE SUMMARY JUDGMENT dated
April 11, 2001 filed by Defendant Maria Clara
L. Lobregat, COCOFED, et al., and Ballares, et
al.
The Class Action Motion for Separate
Summary Judgment dated April 11, 2001 filed by
defendant Maria Clara L. Lobregat, COCOFED, et
al. and Ballares, et al., is hereby DENIED for lack
of merit.

G.R. Nos. 177857-58 & 178193, September 4, 2012, 679 SCRA 604.

Decision

G.R. Nos. 209447 & 210901

B. Re: MOTION FOR PARTIAL SUMMARY

JUDGMENT (RE: COCOFED, ET AL. AND
BALLARES, ET AL.) dated April 22, 2002 filed
by Plaintiff.
1. a. The portion of Section 1 of P.D. No. 755,
which reads:
x x x and that the Philippine Coconut
Authority is hereby authorized to distribute,
for free, the shares of stock of the bank it
acquired to the coconut farmers under such
rules and regulations it may promulgate.
taken in relation to Section 2 of the same P.D.,
is unconstitutional: (i) for having allowed the
use of the CCSF to benefit directly private
interest by the outright and unconditional grant
of absolute ownership of the FUB/UCPB shares
paid for by PCA entirely with the CCSF to the
undefined coconut farmers, which negated or
circumvented the national policy or public
purpose declared by P.D. No. 755 to accelerate
the growth and development of the coconut
industry and achieve its vertical integration; and
(ii) for having unduly delegated legislative
power to the PCA.
b. The implementing regulations issued by
PCA, namely, Administrative Order No. 1,
Series of 1975 and Resolution No. 074-78
are likewise invalid for their failure to see to
it that the distribution of shares serve
exclusively or at least primarily or directly
the aforementioned public purpose or
national policy declared by P.D. No. 755.
2. Section 2 of P.D. No. 755 which mandated that
the coconut levy funds shall not be considered
special and/or fiduciary funds nor part of the
general funds of the national government and
similar provisions of Sec. 5, Art. III, P.D. No.
961 and Sec. 5, Art. III, P.D. No. 1468
contravene the provisions of the Constitution,
particularly, Art. IX (D), Sec. 2; and Article VI,
Sec. 29 (3).
3. Lobregat, COCOFED, et al. and Ballares, et al.
have not legally and validly obtained title of
ownership over the subject UCPB shares by
virtue of P.D. No. 755, the Agreement dated
May 25, 1975 between the PCA and defendant
Cojuangco, and PCA implementing rules,
namely, Adm. Order No. 1, s. 1975 and
Resolution No. 074-78.
4. The so-called Farmers UCPB shares covered
by 64.98% of the UCPB shares of stock, which

Decision

G.R. Nos. 209447 & 210901

formed part of the 72.2% of the shares of stock

of the former FUB and now of the UCPB, the
entire consideration of which was charged by
PCA to the CCSF, are hereby declared
conclusively owned by, the Plaintiff Republic of
the Philippines.
xxxx
SO ORDERED.
The Partial Summary Judgment in Civil Case No. 0033-F dated
May 7, 2004, is hereby MODIFIED, and shall read as follows:
WHEREFORE,
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:
WHEREFORE, 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:
1. Southern Luzon Coconut Oil Mills
(SOLCOM);
2. Cagayan de Oro Oil Co., Inc. (CAGOIL);
3. Iligan Coconut Industries, Inc. (ILICOCO);
4. San Pablo Manufacturing Corp. (SPMC);
5. Granexport Manufacturing Corp.
(GRANEX); and
6. Legaspi Oil Co., Inc. (LEGOIL),
AS
WELL
AS
COMPANIES, NAMELY:
1.
2.
3.
4.
5.
6.
7.
8.
9.

THE

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.;

14

HOLDING

Decision

10
10.
11.
12.
13.
14.

G.R. Nos. 209447 & 210901

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 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 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 FLOCK 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.
Costs against petitioners COCOFED, et al. in G.R. Nos. 17785758 and Danilo S. Ursua in G.R. No. 178193.
No further pleadings shall be entertained. Let Entry of Judgment be
made in due course.
SO ORDERED.10 (Boldface in the original; additional underscoring
supplied)

On December 28, 2012, a petition for declaratory relief11 was filed by

respondent UCPB in the RTC of Makati City (Civil Case No. 12-1251)
against the six CIIF oil mills and 14 holding companies (CIIF companies),
PCGG and other corporations similarly situated. A similar petition12 was
also filed by respondent United Coconut Planters Life Assurance
Corporation (COCOLIFE) against the same defendants (Civil Case No. 1210
11
12

Id. at 609-613.
Rollo (G.R. No. 209447), pp. 172-195.
Rollo (G.R. No. 210901), pp. 86-105.

Decision

11

G.R. Nos. 209447 & 210901

1252).
Civil Case No. 12-1251
UCPB alleged that the capital or equity used in establishing the CIIF
companies was not exclusively sourced from the coconut levy funds. It
claimed that while P633 Million was invested by it as Administrator of the
CIIF, as universal bank it also invested around P112 million in the six oil
mill companies or oil mills group (CIIF OMG). As to the 14 holding
companies, UCPB claimed that while it had the funds in mid-1983 to
purchase the 33,133,266 shares in SMC then being sold by the Soriano
Group for the price of P1.656 Billion to Mr. Eduardo M. Cojuangco, Jr., it
could not, under banking laws, directly engage in the business of brewery.
To make the equity investment, the 14 holding companies were established
by the CIIF OMG to serve as corporate vehicles for the investment in SMC
shares (CIIF SMC Block of Shares).
With the foregoing supposed equity in the CIIF companies and
contributions to the acquisition of the SMC shares, UCPB claims 11.03%
indirect ownership valued at P7.84 Billion, based on the P71.04 Billion
present value of the said sequestered shares (P56.5 Billion redemption price
of the redeemed shares plus P14.54 Billion dividends and accrued interests for
the account of the 14 holding companies). UCPB thus prayed for a judgment
declaring the rights and duties of [UCPB] affirming and confirming
[UCPBs] proportionate right, title and interest in the Oil Mills Group
Companies, its indirect equity of the 14 Coconut Industry Investment
Funds (CIIF) Holding Companies and the San Miguel Corporation
(SMC) Shares, the dividends thereon and the proceeds of the
redemption thereof and that any disbursement or disposition thereof
should x x x respect and take into account [UCPBs] right, title and
interest thereto.13

PCGG filed a motion to dismiss citing the following grounds: (1) lack
of jurisdiction over the subject matter of the case; (2) the January 24, 2012
Decision of the Supreme Court cannot be the proper subject of a petition for
declaratory relief; (3) a petition for declaratory relief is unavailing since the
alleged right or interest of UCPB over the CIIF companies and the CIIF
Block of SMC Shares had long been breached or violated upon the issuance
of the writ of sequestration against the said companies and shares of stock by
the PCGG, which thereafter assumed their administration and voted the
shares of stock; (4) UCPB is now estopped from asserting its alleged right
over the subject companies and shares of stock, having failed to enforce it
for a long time (25 years) from the date of filing by PCGG of the complaint
in the Sandiganbayan in 1987 until the Supreme Court decided with finality
the issue of ownership of the subject sequestered companies and shares of
stock on September 4, 2012; and (5) the petition is defective, as it failed to
implead an indispensable party, the Republic of the Philippines.13-a
13
13-a

Rollo (G.R. No. 209447), p. 193.

Records, pp. 92-122.

Decision

12

G.R. Nos. 209447 & 210901

UCPB opposed the motion contending that the subject of its petition is
not the Supreme Court Decision dated January 24, 2012 but the proper
documents establishing UCPBs ownership over the subject companies and
shares of stock. It further asserted that there is no actual breach of right or
estoppel that would bar UCPBs claim considering that it was not even a
party to any previous legal suit involving the subject properties.13-b
On April 29, 2013, respondent Judge issued the first assailed Order
denying the motion to dismiss and directing the PCGG to file its Answer.
PCGGs motion for reconsideration was likewise denied under the Order
dated June 28, 2013.
Civil Case No. 12-1252
COCOLIFE raised similar claims of ownership in the subject
companies and shares of stock by virtue of its being a stockholder, owning
146,610,567 UCPB shares independently of its right as direct shareholder of
the CIIF OMG and the 14 holding companies, as well as the CIIF SMC
Block of Shares. It alleged that on December 18, 1985, it purchased from
UCPB shares of stock in four CIIF oil companies. Using funds coming
from COCOLIFE and UCPB, the CIIF OMG was able to raise the money for
the purchase of the 33,133,266 common shares in SMC. Consequently,
COCOLIFEs percentage ownership in the CIIF SMC Block of Shares being
held by the 14 holding companies is 11.01%. According to COCOLIFE, its
investment in the CIIF OMG is evidenced by certificates of stock issued by
San Pablo Manufacturing Corp., Southern Luzon Coconut Oil Mills,
Granexport Manufacturing Corp. and Legaspi Oil Co., Inc.
Like UCPB, COCOLIFE asserted that the CIIF OMG and 14 CIIF
holding companies are not wholly owned by the Government. Since it was
not impleaded in the complaint filed by the PCGG for the recovery of
allegedly ill-gotten properties (CIIF companies and CIIF SMC Block of
Shares), COCOLIFE argued that it should not be deprived of its
proportionate interest (11.01%) in the said properties sequestered by PCGG.
It thus prayed that judgment be rendered by the RTC declaring the rights and
duties of COCOLIFE affirming and confirming COCOLIFEs proportionate
interest in the four CIIF oil companies, its indirect equity in the 14 CIIF
holding companies and the CIIF SMC Block of Shares including the
proceeds or their equivalent, and that any disbursement or disposition
thereof should preserve, respect and take into account COCOLIFEs right
and interest.
Civil Case No. 12-1252 was consolidated with Civil Case No. 121251. PCGG likewise moved to dismiss the petition in Civil Case No. 121252 on the same grounds it raised in Civil Case No. 12-1251.
The Omnibus Order dated May 15, 2013 denied the motion to dismiss
and further required PCGG to file its Answer. PCGGs motion for
13-b

Id. at 233-247.

Decision

13

G.R. Nos. 209447 & 210901

reconsideration was likewise denied by respondent Judge on December 4,

2013.
Petitioners Arguments
PCGG contends that respondent judge gravely abused his discretion in
not dismissing the petitions for declaratory relief, which merely aim to relitigate the issue of ownership already passed upon by the Sandiganbayan
under the Partial Summary Judgment rendered in Civil Case No. 0033-F and
the January 24, 2012 Decision of this Court in COCOFED v. Republic.14 It
argues that the RTC has no jurisdiction over the acts performed by PCGG
pursuant to its quasi-judicial functions, particularly those relating to the
issuance of writs of sequestration, and that all cases involving ill-gotten
wealth assets are under the unquestionable jurisdiction of the
Sandiganbayan.
Contrary to the asseveration of respondents UCPB and COCOLIFE,
PCGG maintains that their petitions for declaratory relief actually seek to
modify or alter the Decision of this Court in COCOFED v. Republic, which
has become final and executory. PCGG also contends that documents like
stock certificates cannot be a proper subject of a petition for declaratory
relief considering that the phrase other written instruments contemplated
by the Rules of Court pertains to a written document constituting a contract
upon which rights and obligations are created, which terms could be
interpreted by the courts so as to avoid any conflicting interests between the
parties. Further, the alleged ownership or title of UCPB and COCOLIFE
have already been breached or violated by the issuance of writs of
sequestration over the subject properties.
On account of their inaction for more than 25 years that the issue of
ownership over the sequestered CIIF companies and CIIF SMC Block of
Shares were being litigated, PCGG argues that UCPB and COCOLIFE are
now estopped from asserting any such right in the said properties. And as to
their non-participation in the cases before the Sandiganbayan, PCGG asserts
it has no legal obligation to implead UCPB and COCOLIFE, as held in
Universal Broadcasting Corporation v. Sandiganbayan (5th Div.).15
Respondents Arguments
Respondents question the authority of Commissioner Vicente L.
Gengos, Jr. in filing the present petitions before the Court and signing the
Verification and Certification Against Forum Shopping. They point out that
the PCGG is a collegial body created by virtue of EO 1, and it may function
only as such Commission. Consequently, the present action should have
been properly authorized by all members of the Commission.
14
15

Supra note 3.
556 Phil. 615 (2007).

Decision

14

G.R. Nos. 209447 & 210901

On the issue of jurisdiction, UCPB and COCOLIFE argue that since

they have properly alleged a case for declaratory relief, jurisdiction over the
subject matter lies in the regular courts such as the RTC of Makati City.
Having filed a motion to dismiss, PCGG is deemed to have admitted the
material allegations of the complaint, specifically that UCPB and
COCOLIFE had jointly acquired the six CIIF oil mills by investing direct
equity of P112 Million (UCPB) and P112 Million (COCOLIFE) for the four
CIIF oil mills. Citing San Miguel Corporation v. Kahn16 where this Court
held that the Sandiganbayan has no jurisdiction if the subject matter of the
case does not involve or has no relation to the recovery of ill-gotten wealth,
UCPB and COCOLIFE insist that the subject matter of their petitions is the
declaration of their rights under corporate documents, which in turn relate to
UCPB and COCOLIFEs investments not sourced from the coconut levy
funds. It is thus the allegations in the complaint that determine the cause of
action and what court has jurisdiction over such cause of action, and not the
defenses raised in the motion to dismiss and/or answer.
In the same vein, UCPB and COCOLIFE posit that, contrary to
PCGGs position, proceeding to hear the cases below will not pave the way
for re-examining the findings of this Court in its Decision in COCOFED v.
Republic. This is because the subject matter of the petitions for declaratory
relief is not the coconut levy funds but their own investments in the CIIF
OMG and consequent indirect ownership of the CIIF SMC Block of Shares.
Neither do their petitions seek to lift the sequestration orders as these pertain
only to those shares in CIIF OMG which were acquired by UCPB as
Administrator, using coconut levy funds. While respondents adhere to the
wisdom of the Decision in COCOFED v. Republic, it is their position that
the ruling therein does not affect their respective claims to 11% proportional
equity stake in the CIIF OMG companies. Moreover, since they were not
impleaded in Sandiganbayan Civil Case No. 0033-F and in G.R. Nos.
177857-58 and 178193, respondents maintain that they are not bound by any
adjudication of ownership rendered therein.
Respondents further contend that the writ of sequestration issued by
the Sandiganbayan cannot be considered a breach which gives rise to a cause
of action in favor of any of the parties. There was no injury on the part of
UCPB and COCOLIFE despite the sequestration proceedings because they
were not impleaded as a party in the sequestration case. They point out that
their title and interest in the subject properties remained unaffected by the
sequestration by PCGG considering that the CIIF companies had not done
anything to disown or deny UCPB and COCOLIFEs stockholdings, as in
fact, in their Answer to the petition for declaratory relief, these companies
expressly admitted the existence of respondents stockholdings in each
respective company. Also, the CIIF OMG were all in agreement that there
is a need for declaratory relief judgment on respondents claims in the
sequestered properties notwithstanding the final decision of this Court which
resolved the issue of ownership in favor of the Government.
16

257 Phil. 459 (1989).

Decision

15

G.R. Nos. 209447 & 210901

On February 26, 2014 in G.R. No. 210901, we issued a temporary

restraining order (TRO) immediately enjoining the respondent judge, the
RTC of Makati City, Branch 59, their representatives, agents or other
persons acting on their behalf, from proceeding with the hearing of the
petitions for declaratory relief in Civil Case Nos. 12-1251 and 12-1252.17
Likewise, a TRO was issued in G.R. No. 209447 enjoining the respondent
judge from further hearing the said petitions for declaratory relief.18
Issues
The issues generated by this controversy are the following:
1) Non-compliance with the rule on Verification and
Certification of Non-Forum Shopping which was signed by
only one PCGG Commissioner;
2) Lack of jurisdiction over the subject matter of Civil Case
Nos. 12-1251 and 12-1252;
3) Non-compliance with the requisites of a petition for
declaratory relief complied with; and
4) Application of res judicata and/or laches as bar to the suits
for declaratory relief filed by UCPB and COCOLIFE.
Our Ruling
The petitions are meritorious.
Alleged Lack of Authority of PCGG
Commissioner Vicente L. Gengos, Jr.
to file the present petition
Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil
Procedure, as amended, petitions for certiorari must be verified and
accompanied by a sworn certification of non-forum shopping.19 A
pleading is verified by an affidavit that the affiant has read the pleading and
that the allegations therein are true and correct of his personal knowledge or
based on authentic records.20 The party need not sign the verification. A
partys representative, lawyer or any person who personally knows the truth
of the facts alleged in the pleading may sign the verification.21
On the other hand, a certification of non-forum shopping is a
certification under oath by the plaintiff or principal party in the complaint or
17
18
19
20
21

Rollo (G.R. No. 210901), pp. 197-200.

Rollo (G.R. No. 209447), pp. 344-345 and back page.
1997 RULES OF CIVIL PROCEDURE, as amended, Rule 65, Section 1.
Id., Rule 7, Section 4.
Mediserv, Inc. v. Court of Appeals, 631 Phil. 282, 290 (2010), citing Pajuyo v. Court of Appeals, G.R.
No. 146364, June 3, 2004, 430 SCRA 492, 509.

Decision

16

G.R. Nos. 209447 & 210901

other initiatory pleading asserting a claim for relief or in a sworn

certification annexed thereto and simultaneously filed therewith, (a) that he
has not theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the best of
his knowledge, no such other action or claim is pending therein; (b) if there
is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar
action or claim has been filed or is pending, he shall report that fact within
five (5) days therefrom to the court wherein his aforesaid complaint or
initiatory pleading has been filed.22
It is obligatory that the one signing the verification and certification
against forum shopping on behalf of the principal party or the other
petitioners has the authority to do the same.23 We hold that the signature of
only one Commissioner of petitioner PCGG in the verification and
certification against forum shopping is not a fatal defect.
It has been consistently held that the verification of a pleading is only
a formal, not a jurisdictional, requirement. The purpose of requiring a
verification is to secure an assurance that the allegations in the petition are
true and correct, not merely speculative. This requirement is simply a
condition affecting the form of pleadings, and noncompliance therewith does
not necessarily render the pleading fatally defective.24
As to the certification of non-forum shopping, a rigid application of
the rules should not defeat the PCGGs mandate under EO 1, EO 2, EO 14
and EO 14-A to prosecute cases for the recovery of ill-gotten wealth, and to
conserve sequestered assets and corporations, which are in custodia legis,
under its administration. Indeed, relaxation of the rules is warranted in this
case involving coconut levy funds previously declared by this Court as
affected with public interest and judicially determined as public funds.
Relevantly, after the promulgation of the decision of this Court in
COCOFED v. Republic, EO 180 was issued on March 18, 2015 reiterating
the Governments policy to ensure that all coco levy funds and coco levy
assets be utilized solely and exclusively for the benefit of all the coconut
farmers and for the development of the coconut industry. In line with such
policy, Section 3 thereof provides:
Section 3. Actions to Preserve, Protect and Recover Coco Levy
Assets. The Office of the Solicitor General (OSG), the Presidential
Commission on Good Government (PCGG), and any other concerned
government agency shall, under the general supervision of the Secretary of
Justice, file the proper pleadings or institute and maintain the necessary
legal actions to preserve, protect, or recover the Governments rights
and interests in the Coco Levy Assets and to prevent any dissipation
or reduction in their value. (Emphasis and underscoring supplied)
22
23
24

1997 RULES OF CIVIL PROCEDURE, as amended, Rule 7, Section 5.

Fuentebella v. Castro, 526 Phil. 668, 674 (2006).
Cong. Torres-Gomez v. Codilla, Jr., 684 Phil. 632, 644 (2012), citing Spouses Alde v. Bernal, 630 Phil.
54, 61 (2010).

Decision

17

G.R. Nos. 209447 & 210901

Apropos PCGG v. Cojuangco, Jr.,25 involving the issue of who has

the right to vote the sequestered SMC shares, we gave due course to the
petition for certiorari and mandamus despite the lack of signature of the
Solicitor General; but it was signed by two special counsels and the
verification was signed by Commissioner Herminio Mendoza. We noted the
extraordinary circumstances in the filing of the petition by the said
government officials that justified a liberal interpretation of the rules.
The RTC has no jurisdiction over
suits involving the sequestered coco
levy assets and coco levy funds.
Jurisdiction is defined as the power and authority of a court to hear,
try, and decide a case.26 Jurisdiction over the subject matter is conferred by
the Constitution or by law and is determined by the allegations of the
complaint and the relief prayed for, regardless of whether the plaintiff is
entitled to recovery upon all or some of the claims prayed for therein.
Jurisdiction is not acquired by agreement or consent of the parties, and
neither does it depend upon the defenses raised in the answer or in a motion
to dismiss.27
Under Section 4 (C) of P.D. No. 1606, as amended by R.A. No. 7975
and R.A. No. 8249, the jurisdiction of the Sandiganbayan included suits for
recovery of ill-gotten wealth and related cases:
(C)

Civil and criminal cases filed pursuant to and in connection with

Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.

xxxx
The Sandiganbayan shall have exclusive original jurisdiction
over petitions for the issuance of the writs of mandamus, prohibition,
certiorari, habeas corpus, injunctions, and other ancillary writs and
processes in aid of its appellate jurisdiction and over petitions of similar
nature, including quo warranto, arising or that may arise in cases filed or
which may be filed under Executive Order Nos. 1, 2, 14 and 14-A, issued
in 1986: Provided, That the jurisdiction over these petitions shall not be
exclusive of the Supreme Court. (Italics in the original; emphasis
supplied)

In PCGG v. Pea,28 we made the following clarification on the extent

of the Sandiganbayans jurisdiction:
x x x Under section 2 of the Presidents Executive Order No. 14
issued on May 7, 1986, all cases of the Commission regarding the Funds,
Moneys, Assets, and Properties Illegally Acquired or Misappropriated by
Former President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos,
25
26
27

28

361 Phil. 892 (1999).

Zamora v. Court of Appeals, 262 Phil. 298, 304 (1990).
Veneracion v. Mancilla, 528 Phil. 309, 326 (2006), citing Tolentino v. Leviste, 485 Phil. 661, 673
(2004) and Arnado v. Buban, A.M. No. MTJ-04-1543, May 31, 2004, 430 SCRA 382, 386.
243 Phil. 93 (1988).

Decision

18

G.R. Nos. 209447 & 210901

their Close Relatives, Subordinates, Business Associates, Dummies,

Agents, or Nominees whether civil or criminal, are lodged within the
exclusive and original jurisdiction of the Sandiganbayan and all
incidents arising from, incidental to, or related to, such cases necessarily
fall likewise under the Sandiganbayans exclusive and original
jurisdiction, subject to review on certiorari exclusively by the Supreme
Court.29 (Emphasis supplied)

Soriano III v. Yuzon30 reiterated the above ruling, thus:

Now, that exclusive jurisdiction conferred on the Sandiganbayan
would evidently extend not only to the principal causes of action, i.e., the
recovery of alleged ill-gotten wealth, but also to all incidents arising
from, incidental to, or related to, such cases, such as the dispute over
the sale of the shares, the propriety of the issuance of ancillary writs or
provisional remedies relative thereto, the sequestration thereof, which may
not be made the subject of separate actions or proceedings in another
forum. As explained by the Court in Pea:
The rationale of the exclusivity of such jurisdiction
is readily understood. Given the magnitude of the past
regimes organized pillage and the ingenuity of the
plunderers and pillagers with the assistance of the experts
and best legal minds available in the market, it is a matter
of sheer necessity to restrict access to the lower courts,
which would have tied into knots and made impossible the
commissions gigantic task of recovering the plundered
wealth of the nation, whom the past regime in the process
had saddled and laid prostrate with a huge $27 billion
foreign debt that has since ballooned to $28.5 billion.
(italics and emphasis supplied.) (Additional emphasis
supplied)

Respondents petitions for declaratory relief filed in the RTC asserted

their claim of ownership over the sequestered CIIF companies and indirectly
the CIIF SMC Block of Shares, in the following percentages: 11.03%
(UCPB) and 11.01% (COCOLIFE). Undeniably, these are related to the illgotten wealth cases (Civil Case Nos. 0033-A and 0033-F) involving the
issue of ownership of the aforesaid sequestered companies and shares of
stock, which have been tried and decided by the Sandiganbayan, and the
decision had been appealed to and finally disposed of by this Court in G.R.
Nos. 177857-5831 (COCOFED and Lobregat, et. als ownership claim over
the CIIF companies and CIIF SMC Block of Shares) and G.R. No. 18070532
(Eduardo M. Cojuangco, Jr.s claim over UCPB shares under an Agreement
with PCA).
Contrary to respondents contention, the subject matter of their
petitions for declaratory relief, i.e., their purported contribution to the
acquisition of four CIIF OMG companies and the 14 holding companies, as
29
30
31
32

Id. at 102.
247 Phil. 191, 208 (1988).
COCOFED v. Republic, supra note 3.
Cojuangco, Jr. v. Republic, supra note 8.

Decision

19

G.R. Nos. 209447 & 210901

well as indirect ownership of a portion of the CIIF SMC Block of Shares, is

inextricably intertwined with the issue of ownership judicially settled in the
aforementioned appeals from the Partial Summary Judgments rendered in
Civil Case Nos. 0033-A and 0033-F.
The allegation that no coconut levy funds were actually used to
purchase stockholdings in the CIIF companies is of no moment. Since the
CIIF companies and CIIF SMC Block of Shares have long been sequestered
and placed under the administration of the PCGG, the latters functions may
not be interfered with by a co-equal court. In Republic v. Investa
Corporation33 involving the propriety of dilution of the Governments
percentage in the stockholdings of a sequestered corporation (DOMSAT),
we held that it is the Sandiganbayan and not the Securities and Exchange
Commission (SEC) which has jurisdiction over the petition filed by the
Republic and DOMSAT. As conservator of sequestered shares, PCGG has
the duty to ensure that the sequestered properties are not dissipated under its
watch.
Previously, this Court affirmed the jurisdiction of the RTC in a suit
also involving a claim of ownership in the sequestered corporation, and
ruled in this wise:34
We disagree with the RTC and the CA on the issue of jurisdiction.
While there can be no dispute that PCOC was sequestered, the fact of
sequestration alone did not automatically oust the RTC of jurisdiction to
decide upon the question of ownership of the subject gaming and office
equipment. The PCGG must be a party to the suit in order that the
Sandiganbayans exclusive jurisdiction may be correctly invoked. This
is deducible from no less than E.O. No. 14, the Pea and Nepomuceno
cases relied upon by both subordinates courts. Note that in Section 2 of
E.O. No. 14 which provides:
Section 2. The Presidential Commission on Good
Government shall file all such cases, whether civil or
criminal, with the Sandiganbayan, which shall have
exclusive and original jurisdiction thereof.
it speaks of the PCGG as party-plaintiff. On the other hand, the PCGG
was impleaded as co-defendant in both the Pea and Nepomuceno
cases. But here, the PCGG does not appear in either capacity, as the
complaint is solely between PAGCOR and respondents PCOC and
Marcelo. The Pea and Nepomuceno cases which recognize the
independence of the PCGG and the Sandiganbayan in sequestration cases,
therefore, cannot be invoked in the instant case so as to divest the RTC of
its jurisdiction, under Section 19 of B.P. 129, over PAGCORs action for
recovery of personal property.35 (Emphasis supplied)

In Cuenca v. PCGG,36 we upheld the exclusive jurisdiction of the

Sandiganbayan over all incidents affecting the shares of a sequestered
33
34
35
36

576 Phil. 741 (2008).

Philippine Amusement and Gaming Corporation v. Court of Appeals, 341 Phil. 432 (1997).
Id. at 438-439.
561 Phil. 235 (2007).

Decision

20

G.R. Nos. 209447 & 210901

corporation considering that the action before the RTC is inexorably

entwined with the Governments case for recovery of ill-gotten wealth
pending with the Sandiganbayan. Thus:
Petitioners contend that even if UHC was indeed sequestered,
jurisdiction over the subject matter of petitioners Complaint for
enforcement or rescission of contract between petitioners and respondents
belonged to the RTC and not the Sandiganbayan. Petitioners cited
Philippine Amusement and Gaming Corporation v. Court of Appeals, x x
x, this Court held that the fact of sequestration alone did not automatically
oust the RTC of jurisdiction to decide upon the question of ownership of
the disputed gaming and office equipment as PCGG must be a party to the
suit in order that the Sandiganbayans exclusive jurisdiction may be
correctly invoked, and as Section 2 of EO 14 was duly applied in PCGG v.
Pea and PCGG v. Nepomuceno, which ineluctably spoke of respondent
PCGG as a party-litigant.
xxxx
Sandiganbayan has exclusive jurisdiction over the instant case
A rigorous examination of the antecedent facts and existing
records at hand shows that Sandiganbayan has exclusive jurisdiction over
the instant case.
Thus, the petition must fail for the following reasons:
First, it is a fact that the shares of stock of UHC and CDCP, the
subject matter of Civil Case No. 91-2721 before the Makati City RTC,
were also the subject matter of an ill-gotten wealth case, specifically Civil
Case No. 0016 before the Sandiganbayan. In Civil Case No. 91-2721 of
the Makati City RTC, petitioners prayed for a judgment either transferring
the UHC shares or restoring and reconveying the PNCC shares to them. In
the event a final judgment is rendered in said Makati City RTC case in
favor of petitioners, then such adjudication tends to render moot and
academic the judgment to be rendered in Sandiganbayan Civil Case No.
0016 considering that the legal ownership of either the UHC or PNCC
shares would now be transferred to petitioners Rodolfo Cuenca and CIC.
Such adverse judgment would run counter to the rights of ownership of the
government over the UHC and PNCC shares in question. x x x
Moreover, inasmuch as UHC was impleaded in Civil Case No.
0016 as a defendant and was listed among the corporations beneficially
owned or controlled by petitioner Cuenca, the issue of the latters right
to acquire ownership of UHC shares is inexorably intertwined with the
right of the Republic of the Philippines, through PCGG, to retain
ownership of said UHC shares.
It must be borne in mind that the Sandiganbayan was created in
1978 pursuant to Presidential Decree No. (PD) 1606. Said law has been
amended during the interim period after the Edsa Revolution of 1986 and
before the 1987 Constitution was drafted, passed, and ratified. Thus, the
executive issuances during such period before the ratification of the 1987
Constitution had the force and effect of laws. Specifically, then President
Corazon C. Aquino issued the following Executive Orders which amended
PD 1606 in so far as the jurisdiction of the Sandiganbayan over civil and
criminal cases instituted and prosecuted by the PCGG is concerned, viz:

Decision

21

G.R. Nos. 209447 & 210901

xxxx
Bearing on the jurisdiction of the Sandiganbayan over cases of illgotten wealth, EO 14, Secs. 1 and 2 provide:
SECTION 1. Any provision of the law to the
contrary notwithstanding, the Presidential Commission on
Good Government with the assistance of the Office of the
Solicitor General and other government agencies, is hereby
empowered to file and prosecute all cases investigated
by it under Executive Order No. 1, dated February 28,
1986 and Executive Order No. 2, dated March 12, 1986,
as may be warranted by its findings.
SECTION 2. The Presidential Commission on
Good Government shall file all such cases, whether civil
or criminal, with the Sandiganbayan, which shall have
exclusive and original jurisdiction thereof. (Emphasis
supplied.)
Notably, these amendments had been duly recognized and
reflected in subsequent amendments to PD 1606, specifically Republic Act
Nos. 7975 and 8249.
In the light of the foregoing provisions, it is clear that it is the
Sandiganbayan and not the Makati City RTC that has jurisdiction over
the disputed UHC and PNCC shares, being the alleged ill-gotten
wealth of former President Ferdinand E. Marcos and petitioner
Cuenca. The fact that the Makati City RTC civil case involved the
performance of contractual obligations relative to the UHC shares is of no
importance. The benchmark is whether said UHC shares are alleged to
be ill-gotten wealth of the Marcoses and their perceived cronies. More
importantly, the interests of orderly administration of justice dictate that
all incidents affecting the UHC shares and PCGGs right of supervision
or control over the UHC must be addressed to and resolved by the
Sandiganbayan. Indeed, the law and courts frown upon split jurisdiction
and the resultant multiplicity of suits, which result in much lost time,
wasted effort, more expenses, and irreparable injury to the public interest.
Second, the UHC shares in dispute were sequestered by
respondent PCGG. Sequestration is a provisional remedy or freeze order
issued by the PCGG designed to prevent the disposal and dissipation of illgotten wealth. The power to sequester property means to
place or cause to be placed under [PCGGs] possession or
control said property, or any building or office wherein any
such property or any records pertaining thereto may be
found, including business enterprises and entities, for the
purpose of preventing the destruction of, and otherwise
conserving and preserving the same, until it can be
determined, through appropriate judicial proceedings,
whether the property was in truth ill-gotten. (Silverio v.
PCGG, 155 SCRA 60 [1987]).
Considering that the UHC shares were already sequestered,
enabling the PCGG to exercise the power of supervision, possession, and
control over said shares, then such power would collide with the legal
custody of the Makati City RTC over the UHC shares subject of Civil

Decision

22

G.R. Nos. 209447 & 210901

Case No. 91-2721. Whatever the outcome of Civil Case No. 91-2721,
whether from enforcement or rescission of the contract, would directly
militate on PCGGs control and management of IRC and UHC, and
consequently hamper or interfere with its mandate to recover ill-gotten
wealth. As aptly pointed out by respondents, petitioners action is
inexorably entwined with the Governments action for the recovery of
ill-gotten wealth the subject of the pending case before the
Sandiganbayan. Verily, the transfer of shares of stock of UHC to
petitioners or the return of the shares of stock of CDCP (now PNCC) will
wreak havoc on the sequestration case as both UHC and CDCP are subject
of sequestration by PCGG.
Third, Philippine Amusement and Gaming Corporation and
Holiday Inn (Phils.), Inc. are not analogous to the case at bar. The first
dealt with ownership of gaming and office equipment, which is distinct
from and will not impact on the sequestration issue of PCOC. The second
dealt with an ordinary civil case for performance of a contractual
obligation which did not in any way affect the sequestration proceeding of
NRHDCI; thus, the complaint-in-intervention of Holiday Inn (Phils.), Inc.
was properly denied for lack of jurisdiction over the subject matter.
In both cases cited by petitioners, there was a substantial
distinction between the sequestration proceedings and the subject
matter of the actions. This does not prevail in the instant case, as the
ownership of the shares of stock of the sequestered companies, UHC
and CDCP, is the subject matter of a pending case and thus addressed
to the exclusive jurisdiction of the Sandiganbayan.
Sec. 2 of EO 14 pertinently provides: The Presidential
Commission on Good Government shall file all such cases, whether civil
or criminal, with the Sandiganbayan, which shall have exclusive and
original jurisdiction thereof.
The above proviso has been squarely applied in Pea, where this
Court held that the exclusive jurisdiction conferred on the Sandiganbayan
would evidently extend not only to the principal causes of action, that is,
recovery of alleged ill-gotten wealth, but also to all incidents arising from,
incidental to, or related to such cases, including a dispute over the sale of
the shares, the propriety of the issuance of ancillary writs of relative
provisional remedies, and the sequestration of the shares, which may not
be made the subject of separate actions or proceedings in another forum.
Indeed, the issue of the ownership of the sequestered companies, UHC
and PNCC, as well as IRCs ownership of them, is undeniably related to
the recovery of the alleged ill-gotten wealth and can be squarely
addressed via the exclusive jurisdiction of the Sandiganbayan.
Fourth, while it is clear that the exclusive jurisdiction of the
Sandiganbayan only encompasses cases where PCGG is impleaded, such
requirement is satisfied in the instant case. The appellate court clearly
granted PCGGs petition for certiorari in CA-G.R. SP No. 49686,
assailing the trial courts denial of its Motion for Leave to Intervene with
Motion to Dismiss. Thus, the trial courts April 20, 1998 Order was
reversed and set aside by the appellate court through its assailed Decision.
Consequently, PCGG was granted the right to intervene and thus
became properly impleaded in the instant case. Without doubt, the trial

Decision

23

G.R. Nos. 209447 & 210901

court has no jurisdiction to hear and decide Civil Case No. 91-2721.37
(Additional emphasis supplied)

In the light of the foregoing, it is clear that the Sandiganbayan has

exclusive jurisdiction over the subject matter of Civil Case Nos. 12-1251
and 12-1252.
First, the subject matters of respondents petitions in Civil Case Nos.
0033-A and 0033-F filed by the PCGG against Eduardo M. Cojuangco, et al.
are the same, i.e., the ownership of CIIF companies and CIIF SMC Block of
Shares, which were claimed by the Government as acquired by the
defendants using public funds (coco levy funds). In the interest of orderly
administration of justice and the policy against multiplicity of suits, it is but
proper that all incidents affecting the coconut levy funds and assets be
addressed and resolved by the Sandiganbayan. Claims of ownership of a
portion of the subject CIIF companies and SMC shares by private entities
such as UCPB and COCOLIFE are inextricably related to the
aforementioned ill-gotten wealth cases filed in the Sandiganbayan.
Second, UCPB, along with the CIIF companies and CIIF SMC Block
of Shares, were duly sequestered by the PCGG and had been under the
latters administration for more than 25 years. With the final determination
made by this Court in COCOFED v. Republic that these properties
unquestionably belong to the Government as they were acquired using the
coconut levy funds, the PCGG can now exercise full acts of ownership as
evident from the latest executive issuance, EO 180, by President Benigno
Simeon C. Aquino III.
Third, aside from their sequestration by PCGG, the ownership of the
aforesaid assets is the subject matter in both Civil Case Nos. 12-1251 and
12-1252 filed in the RTC and Civil Case Nos. 0033-A and 0033-F in the
Sandiganbayan. Respondents assertion that the subject matter of their
petitions for declaratory relief is different due to private funds used in
buying shares in UCPB and CIIF oil mills is but a feeble attempt to create an
exception to the Sandiganbayans exclusive jurisdiction. As underscored in
Cuenca v. PCGG,38 the benchmark is whether such shares of UCPB and
CIIF oil mills are alleged to be ill-gotten wealth of the Marcoses and their
perceived cronies, which is sufficient to bring the case within the exclusive
jurisdiction of the Sandiganbayan pursuant to existing laws and decrees.
Fourth, the requirement in Pea and Nepomuceno that the PCGG
must be a party to the suit in order to invoke the Sandiganbayans exclusive
jurisdiction was satisfied in this case.
PCGG was impleaded as codefendant in Civil Case Nos. 12-1251 and 12-1252. It even filed a motion to
dismiss in both cases and appealed from the denial of said motions by
respondent judge. Thus, while the Republic itself was not impleaded in the
37
38

Id. at 246-252.
Id. at 250.

Decision

24

G.R. Nos. 209447 & 210901

petitions for declaratory relief, PCGG was formally made a party thereto.
Applicability of Res Judicata
The doctrine of res judicata provides that a final judgment on the
merits rendered by a court of competent jurisdiction is conclusive as to the
rights of the parties and their privies and constitutes an absolute bar to
subsequent actions involving the same claim, demand, or cause of action.39
The following requisites must obtain for the application of the doctrine: (1)
the former judgment or order must be final; (2) it must be a judgment or
order on the merits, that is, it was rendered after a consideration of the
evidence or stipulations submitted by the parties at the trial of the case; (3) it
must have been rendered by a court having jurisdiction over the subject
matter and the parties; and (4) there must be, between the first and second
actions, identity of parties, of subject matter and of cause of action. This
requisite is satisfied if the two actions are substantially between the same
parties.40
There is no question regarding compliance with the first, second and
third requisites. However, respondents maintain that while they adhere to
the Decision in COCOFED v. Republic, said decision did not affect their
right or title to the subject properties since the subject matter in their
petitions for declaratory relief is not the coconut levy funds but their own
private funds used by them in purchasing shares from UCPB and CIIF
companies, that in turn resulted in their indirect ownership of the CIIF SMC
Block of Shares in their respective proportions: 11.03% (UCPB) and 11.01%
(COCOLIFE).
Respondents further assert that they are not bound by the adjudication
of ownership in COCOFED v. Republic considering that they were not
impleaded as defendants in Civil Case Nos. 0033-A and 0033-F.
We disagree.
In Universal Broadcasting Corporation v. Sandiganbayan (5th Div.),41
we reiterated that it is not necessary to implead companies which are the res
of suits for recovery of ill-gotten wealth. We held that
Petitioner submits that the Sandiganbayan never acquired
jurisdiction over it as it was not impleaded as a party-defendant in Civil
Case No. 0035.
The submission has no merit.
The Price Mansion property is an asset alleged to be ill-gotten.
Like UBC, it is listed as among the properties of Benjamin Romualdez.
39

40
41

PCGG v. Sandiganbayan, 556 Phil. 664, 674 (2007), citing Lanuza v. Court of Appeals, 494 Phil. 51,
58 (2005), further citing Republic v. Court of Appeals, 381 Phil. 558, 564 (2000).
Id. at 674-675, citing Escareal v. Philippine Airlines, Inc., 495 Phil. 107, 118 (2005).
Supra note 15.

Decision

25

G.R. Nos. 209447 & 210901

For sure, UBC is among the corporations listed as alleged repositories of

shares of stock controlled by Romualdez.
In Republic v. Sandiganbayan, the Court held that there is no need
to implead firms which are merely the res of the actions in ill-gotten
wealth cases and that judgment may simply be directed against the assets,
thus:
C. Impleading Unnecessary Re Firms which are the Res of
the Actions
And as to corporations organized with ill-gotten
wealth, but are not themselves guilty of misappropriation,
fraud or other illicit conduct in other words, the
companies themselves are the object or thing involved in
the action, the res thereof - there is no need to implead
them either. Indeed, their impleading is not proper on the
strength alone of their having been formed with ill-gotten
funds, absent any other particular wrongdoing on their part.
The judgment may simply be directed against the
shares of stock shown to have been issued in
consideration of ill-gotten wealth. x x x
x x x In this light, they are simply the res in the
actions for the recovery of illegally acquired wealth, and
there is, in principle, no cause of action against them and
no ground to implead them as defendants in said actions. x
x x 42 (Additional emphasis supplied)

The doctrine of res judicata has two aspects. The first, known as bar
by prior judgment, or estoppel by verdict, is the effect of a judgment as a
bar to the prosecution of a second action upon the same claim, demand or
cause of action. The second, known as conclusiveness of judgment,
otherwise known as the rule of auter action pendent, ordains that issues
actually and directly resolved in a former suit cannot again be raised in any
future case between the same parties involving a different cause of action.43
[C]onclusiveness of judgment states that a fact or question which
was in issue in a former suit and there was judicially passed upon and
determined by a court of competent jurisdiction, is conclusively settled by
the judgment therein as far as the parties to that action and persons in
privity with them are concerned and cannot be again litigated in any future
action between such parties or their privies, in the same court or any other
court of concurrent jurisdiction on either the same or different cause of
action, while the judgment remains unreversed by proper authority. It has
been held that in order that a judgment in one action can be conclusive as
to a particular matter in another action between the same parties or their
privies, it is essential that the issue be identical. If a particular point or
question is in issue in the second action, and the judgment will depend
on the determination of that particular point or question, a former
judgment between the same parties or their privies will be final and
conclusive in the second if that same point or question was in issue and
adjudicated in the first suit. Identity of cause of action is not required
42
43

Id. at 620-621.
PCGG v. Sandiganbayan (2nd Division), 590 Phil. 383, 396 (2008), citing Spouses Rasdas v. Estenor,
513 Phil. 664, 675 (2005).

Decision

26

G.R. Nos. 209447 & 210901

but merely identity of issues.44 (Emphasis and italics supplied)

We have applied the doctrine of conclusiveness of judgment in a

previous case involving ownership of shares of stock in a sequestered
corporation, as follows:
In cases wherein the doctrine of conclusiveness of judgment
applies, there is, as in Civil Case No. 0034 and Civil Case No. 0188
identity of issues not necessarily identity of causes of action. The prior
adjudication of the Sandiganbayan affirmed by this Court in G.R. No.
140615, as to the ownership of the 1/7 Piedras shares of Arambulo, is
conclusive in the second case, as it has been judicially resolved.
The filing of Civil Case No. 0188, although it has a different cause
of action from Civil Case No. 0034, will not enable the PCGG to escape
the operation of the principle of res judicata. A case litigated once shall
not be relitigated in another action as it would violate the interest of the
State to put an end to litigation republicae ut sit litium and the policy
that no man shall be vexed twice for the same cause nemo debet bis
vexari et eadem causa. Once a litigants rights had been adjudicated in a
valid final judgment by a competent court, he should not be granted an
unbridled license to come back for another try.45 (Additional italcis and
emphasis supplied)

We hold that res judicata under the second aspect (conclusiveness of

judgment) is applicable in this case. The issue of ownership of the
sequestered CIIF companies and CIIF SMC Block of Shares was directly
and actually resolved by the Sandiganbayan and affirmed by this Court in
COCOFED v. Republic. More important, in the said decision, we
categorically affirmed the resolutions issued by the Sandiganbayan in Civil
Case Nos. 0033-A and 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. Among the admitted facts set forth in
the Order dated February 23, 2004 is the acquisition by UCPB of the
controlling interests in the six CIIF oil mills. The Partial Summary
Judgment further quoted from the Answer to Third Amended Complaint
(Subdivided) with Compulsory Counterclaims dated January 7, 2000 filed
by the CIIF oil mills and 14 holding companies, in which they also alleged
that pursuant to the authority granted to it by P.D. 961 and P.D. 1568,
UCPB acquired controlling interests in the six CIIF oil mills.46
In the same decision we specifically upheld the Sandiganbayans
findings and conclusion on the issue of ownership of the CIIF OMG, the 14
holding companies and the CIIF SMC Block of Shares, viz.:
44
45
46

Id. at 396-397.
Id. at 397.
Rollo (G.R. No. 210901), pp. 167 and 177.

Decision

27

G.R. Nos. 209447 & 210901

The CIIF Companies and the CIIF Block

of SMC shares are public funds/assets
From the foregoing discussions, it is fairly established that the
coconut levy funds are special public funds. Consequently, any property
purchased by means of the coconut levy funds should likewise be
treated as public funds or public property, subject to burdens and
restrictions attached by law to such property.
In this case, the 6 CIIF Oil Mills were acquired by the UCPB
using coconut levy funds. On the other hand, the 14 CIIF holding
companies are wholly owned subsidiaries of the CIIF Oil Mills.
Conversely, these companies were acquired using or whose capitalization
comes from the coconut levy funds. However, as in the case of UCPB,
UCPB itself distributed a part of its investments in the CIIF oil mills to
coconut farmers, and retained a part thereof as administrator. The portion
distributed to the supposed coconut farmers followed the procedure
outlined in PCA Resolution No. 033-78. And as the administrator of the
CIIF holding companies, the UCPB authorized the acquisition of the SMC
shares. In fact, these companies were formed or organized solely for the
purpose of holding the SMC shares. As found by the Sandiganbayan, the
14 CIIF holding companies used borrowed funds from the UCPB to
acquire the SMC shares in the aggregate amount of P1.656 Billion.
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
subject 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, the 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 necessarily owned by the Government. We, however,
modify the same in the following wise: These shares shall belong to the

Decision

28

G.R. Nos. 209447 & 210901

Government, which shall be used only for the benefit of the coconut
farmers and for the development of the coconut industry. 47 (Emphasis
and underscoring supplied)

In G.R. No. 180705, separately decided by this Court on November

27, 2012, we also affirmed the Sandiganbayan's decision nullifying the
shares of stock transfer to Eduardo M. Cojuangco, Jr. We held that as the
coconut levy funds partake of the nature of taxes and can only be used for
public purpose, and importantly, for the purpose for which it was exacted,
i.e., the development, rehabilitation and stabilization of the coconut industry,
they cannot be used to benefit-whether directly or indirectly-private
individuals, be it by way of a commission, or as the PCA-Cojuangco
Agreement words it, compensation. Accordingly, the UCPB shares of stock
representing the 7.22% fully paid shares subject of the petition, with all
dividends declared, paid or issued thereon, as well as any increments thereto
arising from, but not limited to, the exercise of pre-emptive rights, were
ordered reconveyed to the Government of the Republic of the Philippines,
which shall "be used only for the benefit of all coconut farmers and for the
development of the coconut industry." 48
Having resolved that subject matter jurisdiction pertains to the
Sandiganbayan and not the RTC, and that the petitions for declaratory relief
are barred by our January 24, 2012 Decision which settled with finality the
issue of ownership of the CIIF oil mills, the 14 holding companies and CIIF
SMC Block of Shares, we deem it unnecessary to address the other issues
presented.
WHEREFORE, the petitions are GRANTED. The Orders dated
April 29, 2013 and June 28, 2013 in Civil Case No. 12-1251; and Omnibus
Order dated May 15, 2013 (Branch 138) and Order dated December 4, 2013
in Civil Case Nos. 12-1251 and 12-1252 (consolidated petitions) of the
Regional Trial Court of Makati City, Branch 59, are hereby ANNULLED
and SET ASIDE. The petitions in Civil Case Nos. 12-1251 and 12-1252
filed by UCPB and COCOLIFE, respectively, are DISMISSED.
No pronouncement as to costs.
SO ORDERED.

'JR.
Associate J

47

48

COCOFED v. Republic, supra note 3, at 620-622.

Supra note 8, at 536.

Decision

29

G.R. Nos. 209447 & 210901

WE CONCUR:

'?-,

-~~1

..r--

MARIA LOURDES P.A. SERENO

Chief Justice

~f.-.. 4 uANTONIO T. CARPIO

Associate Justice

0 J. VELASCO, JR.

(No Part)
TERESITA J. LEONARDO-DE CASTRO
Associate Justice

Q(UJ(){J~
ARTURO D. BRION
Associate Justice

(No Part)
DIOSDADO M. PERALTA
Associate Justice

d1uce.~./

M{';{:NO C. DEL CASTILLO

Associate Justice

. ": l

. .

(On leave)
BIENVENIDO L. REYES
Associate Justice

d'

..
Decision

30

G.R. Nos. 209447 & 210901

..

ESTELA~E~ERNABE
Associate Justice

Associate Justice

(No Part)
FRANCIS H. JARDELEZA
Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the 1987 Constitution, it is
hereby certified that the conclusions in the above Decision had been reached
in consultation before the cases were assigned to the writer of the opinion of
the Court.

MARIA LOURDES P.A. SERENO

Chief Justice

!<

CERTIFIED XEROX COPY:

if1~~A~
CLERK OF COURT, l:N SANC
SUPREME COURT

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