G.R. No. 101279 August 6, 1992PHILIPPINE ASSOCIATION OF SERVICE
EXPORTERS, INC.,petitioner,vs.HON. RUBEN D. TORRES, as Secretary of
the Department of Labor & Employment, and JOSE N. SARMIENTO, as
Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION,respondents.De Guzman, Meneses & Associates for
petitioner.GRIO-AQUINO,J.:This petition for prohibition with
temporary restraining order was filed by the Philippine Association
of Service Exporters (PASEI, for short), to prohibit and enjoin the
Secretary of the Department of Labor and Employment (DOLE) and the
Administrator of the Philippine Overseas Employment Administration
(or POEA) from enforcing and implementing DOLE Department Order No.
16, Series of 1991 and POEA Memorandum Circulars Nos. 30 and 37,
Series of 1991, temporarily suspending the recruitment by private
employment agencies of Filipino domestic helpers for Hong Kong and
vesting in the DOLE, through the facilities of the POEA, the task
of processing and deploying such workers.PASEI is the largest
national organization of private employment and recruitment
agencies duly licensed and authorized by the POEA, to engaged in
the business of obtaining overseas employment for Filipino
landbased workers, including domestic helpers.On June 1, 1991, as a
result of published stories regarding the abuses suffered by
Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D.
Torres issued Department Order No. 16, Series of 1991, temporarily
suspending the recruitment by private employment agencies of
"Filipino domestic helpers going to Hong Kong" (p. 30,Rollo). The
DOLE itself, through the POEA took over the business of deploying
such Hong Kong-bound workers.In view of the need to establish
mechanisms that willenhance the protection for Filipino domestic
helpers going to Hong Kong,the recruitment of the same by private
employment agencies ishereby temporarily suspendedeffective 1 July
1991. As such, the DOLE through the facilities of the Philippine
Overseas Employment Administration shall take over the processing
and deployment of household workers bound for Hong Kong, subject to
guidelines to be issued for said purpose.In support of this policy,
all DOLE Regional Directors and the Bureau of Local Employment's
regional offices are likewise directed to coordinate with the POEA
in maintaining a manpower pool of prospective domestic helpers to
Hong Kong on a regional basis.For compliance. (Emphasis ours; p.
30,Rollo.)Pursuant to the above DOLE circular, the POEA issued
Memorandum Circular No. 30, Series of 1991, dated July 10, 1991,
providing GUIDELINES on the Government processing and deployment of
Filipino domestic helpers to Hong Kong and the accreditation of
Hong Kong recruitment agencies intending to hire Filipino domestic
helpers.Subject: Guidelines on the Temporary Government Processing
and Deployment of Domestic Helpers to Hong Kong.Pursuant to
Department Order No. 16, series of 1991 and in order to
operationalize the temporary government processing and deployment
of domestic helpers (DHs) to Hong Kong resulting from the temporary
suspension of recruitment by private employment agencies for said
skill and host market, the following guidelines and mechanisms
shall govern the implementation of said policy.I. Creation of a
joint POEA-OWWA Household Workers Placement Unit (HWPU)An ad hoc,
one stop Household Workers Placement Unit [or HWPU] under the
supervision of the POEA shall take charge of the various operations
involved in the Hong Kong-DH industry segment:The HWPU shall have
the following functions in coordination with appropriate units and
other entities concerned:1. Negotiations with and Accreditation of
Hong Kong Recruitment Agencies2. Manpower Pooling3. Worker Training
and Briefing4. Processing and Deployment5. Welfare ProgramsII.
Documentary Requirements and Other Conditions for Accreditation of
Hong Kong Recruitment Agencies or PrincipalsRecruitment agencies in
Hong Kong intending to hire Filipino DHs for their employers may
negotiate with the HWPU in Manila directly or through the
Philippine Labor Attache's Office in Hong Kong.xxx xxx xxxX.
Interim ArrangementAll contracts stamped in Hong Kong as of June 30
shall continue to be processed by POEA until 31 July 1991 under the
name of the Philippine agencies concerned. Thereafter, all
contracts shall be processed with the HWPU.Recruitment agencies in
Hong Kong shall submit to the Philippine Consulate General in Hong
kong a list of their accepted applicants in their pool within the
last week of July. The last day of acceptance shall be July 31
which shall then be the basis of HWPU in accepting contracts for
processing. After the exhaustion of their respective pools the only
source of applicants will be the POEA manpower pool.For strict
compliance of all concerned. (pp. 31-35,Rollo.)On August 1, 1991,
the POEA Administrator also issued Memorandum Circular No. 37,
Series of 1991, on the processing of employment contracts of
domestic workers for Hong Kong.TO: All Philippine and Hong Kong
Agencies engaged in the recruitment of Domestic helpers for Hong
KongFurther to Memorandum Circular No. 30, series of 1991
pertaining to the government processing and deployment of domestic
helpers (DHs) to Hong Kong,processing of employment contractswhich
have been attested by the Hong Kong Commissioner of Labor up to 30
June 1991 shall be processed by the POEA Employment Contracts
Processing Branch up to 15 August 1991 only.Effective 16 August
1991, all Hong Kong recruitment agent/s hiring DHs from the
Philippines shall recruit under the new scheme which requires prior
accreditation which the POEA.Recruitment agencies in Hong Kong may
apply for accreditation at the Office of the Labor Attache,
Philippine Consulate General where a POEA team is posted until 31
August 1991. Thereafter, those who failed to have themselves
accredited in Hong Kong may proceed to the POEA-OWWA Household
Workers Placement Unit in Manila for accreditation before their
recruitment and processing of DHs shall be allowed.Recruitment
agencies in Hong Kong who have some accepted applicants in their
pool after the cut-off period shall submit this list of workers
upon accreditation. Only those DHs in said list will be allowed
processing outside of the HWPU manpower pool.For strict compliance
of all concerned. (Emphasis supplied, p. 36,Rollo.)On September 2,
1991, the petitioner, PASEI, filed this petition for prohibition to
annul the aforementioned DOLE and POEA circulars and to prohibit
their implementation for the following reasons:1. that the
respondents acted with grave abuse of discretion and/or in excess
of their rule-making authority in issuing said circulars;2. that
the assailed DOLE and POEA circulars are contrary to the
Constitution, are unreasonable, unfair and oppressive; and3. that
the requirements of publication and filing with the Office of the
National Administrative Register were not complied with.There is no
merit in the first and second grounds of the petition.Article 36 of
the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities.Art. 36. Regulatory
Power. The Secretary of Labor shall have the powerto restrictand
regulatethe recruitment and placement activities of all agencies
within the coverage of this title [Regulation of Recruitment and
Placement Activities] andis hereby authorized to issue orders and
promulgate rules and regulations to carry out the objectives and
implement the provisions of this title. (Emphasis ours.)On the
other hand, the scope of the regulatory authority of the POEA,
which was created by Executive Order No. 797 on May 1, 1982 to take
over the functions of the Overseas Employment Development Board,
the National Seamen Board, and the overseas employment functions of
the Bureau of Employment Services, is broad and far-ranging for:1.
Among the functions inherited by the POEA from the defunct Bureau
of Employment Services was the power and duty:"2. To establish and
maintain a registration and/or licensing systemto regulate private
sector participation in the recruitment and placement of workers,
locally and overseas, . . ." (Art. 15, Labor Code, Emphasis
supplied). (p. 13,Rollo.)2. It assumed from the defunct Overseas
Employment Development Board the power and duty:3. To recruit and
place workers for overseas employment of Filipino contract workers
on a government to government arrangement and in such other sectors
as policy may dictate . . . (Art. 17, Labor Code.) (p. 13,Rollo.)3.
From the National Seamen Board, the POEA took over:2. To regulate
and supervise the activities of agents or representatives of
shipping companies in the hiring of seamen for overseas employment;
and secure the best possible terms of employment for contract
seamen workers and secure compliance therewith. (Art. 20, Labor
Code.)The vesture of quasi-legislative and quasi-judicial powers in
administrative bodies is not unconstitutional, unreasonable and
oppressive. It has been necessitated by "the growing complexity of
the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72,
79). More and more administrative bodies are necessary to help in
the regulation of society's ramified activities. "Specialized in
the particular field assigned to them, they can deal with the
problems thereof with more expertise and dispatch than can be
expected from the legislature or the courts of justice" (Ibid.).It
is noteworthy that the assailed circulars do not prohibit the
petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses that
the same fall within the "administrative and policing powers
expressly or by necessary implication conferred" upon the
respondents (People vs. Maceren, 79 SCRA 450). The power to
"restrict and regulate conferred by Article 36 of the Labor Code
involves a grant of police power (City of Naga vs. Court of
Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or
stop" (p. 62,Rollo) and whereas the power to "regulate" means "the
power to protect, foster, promote, preserve, and control with due
regard for the interests, first and foremost, of the public, then
of the utility and of its patrons" (Philippine Communications
Satellite Corporation vs. Alcuaz, 180 SCRA 218).The Solicitor
General, in his Comment, aptly observed:. . . Said Administrative
Order [i.e., DOLE Administrative Order No. 16] merely restricted
the scope or area of petitioner's business operations by excluding
therefrom recruitment and deployment of domestic helpers for Hong
Kong till after the establishment of the "mechanisms" that will
enhance the protection of Filipino domestic helpers going to Hong
Kong. In fine,other than the recruitment and deployment of Filipino
domestic helpers for Hongkong, petitioner may still deploy other
class of Filipino workerseither for Hongkong and other countries
and all other classes of Filipino workers for other countries.Said
administrative issuances, intended to curtail, if not to end,
rampant violations of the rule against excessive collections of
placement and documentation fees, travel fees and other charges
committed by private employment agencies recruiting and deploying
domestic helpers to Hongkong.[They are reasonable, valid and
justified under the general welfare clause of the Constitution,
since the recruitment and deployment business, as it is conducted
today, is affected with public interest.xxx xxx xxxThe alleged
takeover [of the business of recruiting and placing Filipino
domestic helpers in Hongkong] is merely a remedial measure, and
expires after its purpose shall have been attained. This is evident
from the tenor of Administrative Order No. 16 that recruitment of
Filipino domestic helpers going to Hongkong by private employment
agencies are hereby "temporarily suspendedeffective July 1,
1991."The alleged takeover is limited in scope, being confined to
recruitment of domestic helpers going to Hongkong only.xxx xxx xxx.
. . the justification for the takeover of the processing and
deploying of domestic helpers for Hongkong resulting from the
restriction of the scope of petitioner's business is confined
solely to the unscrupulous practice of private employment agencies
victimizing applicants for employment as domestic helpers for
Hongkong and not the whole recruitment business in the Philippines.
(pp. 62-65,Rollo.)The questioned circulars are therefore a valid
exercise of the police power as delegated to the executive branch
of Government.Nevertheless, they are legally invalid, defective and
unenforceable for lack of power publication and filing in the
Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code
of 1987 which provide:Art. 2. Laws shall take effect after fifteen
(15) days following the completion of their publication in the
Official Gazatte, unless it is otherwise provided. . . . (Civil
Code.)Art. 5. Rules and Regulations. The Department of Labor and
other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) daysafter
announcement of their adoptionin newspapers of general circulation.
(Emphasis supplied, Labor Code, as amended.)Sec. 3. Filing.
(1)Every agency shall file with the University of the Philippines
Law Center, three (3) certified copies of every rule adopted by it.
Rules in force on the date of effectivity of this Code which are
not filed within three (3) months shall not thereafter be the basis
of any sanction against any party or persons. (Emphasis supplied,
Chapter 2, Book VII of the Administrative Code of 1987.)Sec. 4.
Effectivity. In addition to other rule-making requirements provided
by law not inconsistent with this Book, each rule shall become
effective fifteen (15) days from the date of filing as above
providedunless a different date is fixed by law, or specified in
the rule in cases of imminent danger to public health, safety and
welfare, the existence of which must be expressed in a statement
accompanying the rule. The agency shall take appropriate measures
to make emergency rules known to persons who may be affected by
them. (Emphasis supplied, Chapter 2, Book VII of the Administrative
Code of 1987).Once, more we advert to our ruling inTaada vs.
Tuvera, 146 SCRA 446 that:. . . Administrative rules and
regulations must also be published if their purpose is to enforce
or implement existing law pursuant also to a valid delegation. (p.
447.)Interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be published.
Neither is publication required of the so-called letters of
instructions issued by administrative superiors concerning the
rules or guidelines to be followed by their subordinates in the
performance of their duties. (p. 448.)We agree that publication
must be in full or it is no publication at all since its purpose is
to inform the public of the content of the laws. (p. 448.)For lack
of proper publication, the administrative circulars in question may
not be enforced and implemented.WHEREFORE, the writ of prohibition
is GRANTED. The implementation of DOLE Department Order No. 16,
Series of 1991, and POEA Memorandum Circulars Nos. 30 and 37,
Series of 1991, by the public respondents is hereby SUSPENDED
pending compliance with the statutory requirements of publication
and filing under the aforementioned laws of the land.SO
ORDERED.Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla,
Bidin, Medialdea, Regalado, Davide, Jr., Romero, Nocon and
Bellosillo, JJ., concur.
G.R. No. 173918 April 8, 2008REPUBLIC OF THE PHILIPPINES,
represented by the DEPARTMENT OF ENERGY
(DOE),petitioner,vs.PILIPINAS SHELL PETROLEUM
CORPORATION,respondent.D E C I S I O NCHICO-NAZARIO,J.:This is a
Petition for Review onCertiorariunder Rule 45 of the Rules of
Court, assailing the Decision dated 4 August 2006 of the Court of
Appeals in C.A. G.R. SP No. 82183.1The appellate court reversed the
Decision2dated 19 August 2003 of the Office of the President in OP
NO. Case 96-H-6574 and declared that Ministry of Finance (MOF)
Circular No. 1-85 dated 15 April 1985, as amended, is ineffective
for failure to comply with Section 3 of Chapter 2, Book 7 of the
Administrative Code of 1987,3which requires the publication and
filing in the Office of the National Administration Register (ONAR)
of administrative issuances. Thus, surcharges provided under the
aforementioned circular cannot be imposed upon respondent Pilipinas
Shell Petroleum Corporation.Respondent is a corporation duly
organized existing under the laws of the Philippines. It is engaged
in the business of refining oil, marketing petroleum, and other
related activities.4The Department of Energy (DOE) is a government
agency under the direct control and supervision of the Office of
the President. The Department is mandated by Republic Act No. 7638
to prepare, integrate, coordinate, supervise and control all plans,
programs, projects and activities of the Government relative to
energy exploration, development, utilization, distribution and
conservation.On 10 October 1984, the Oil Price Stabilization Fund
(OPSF) was created under Presidential Decree No. 1956 for the
purpose of minimizing frequent price changes brought about by
exchange rate adjustments and/or increase in world market prices of
crude oil and imported petroleum products.5Letter of Instruction
No. 1431 dated 15 October 1984 was issued directing the utilization
of the OPSF to reimburse oil companies the additional costs of
importation of crude oil and petroleum products due to fluctuation
in foreign exchange rates to assure adequate and continuous supply
of petroleum products at reasonable prices.6Letter of Instruction
No. 1441, issued on 20 November 1984, mandated the Board of Energy
(now, the Energy Regulatory Board) to review and reset prices of
domestic oil products every two months to reflect the prevailing
prices of crude oil and petroleum. The prices were regulated by
adjusting the OPSF impost, increasing or decreasing this price
component as necessary to maintain the balance between revenues and
claims on the OPSF.7On 27 February 1987, Executive Order No. 137
was enacted to amend P. D. No. 1956. It expanded the sources and
utilization of the OPSF in order to maintain stability in the
domestic prices of oil products at reasonable levels.8On 4 December
1991, the Office of Energy Affairs (OEA), now the DOE, informed the
respondent that respondents contributions to the OPSF for foreign
exchange risk charge for the period December 1989 to March 1991
were insufficient. OEA Audit Task Force noted a total underpayment
ofP14,414,860.75 by respondent to the OPSF. As a consequence of the
underpayment, a surcharge ofP11,654,782.31 was imposed upon
respondent. The said surcharge was imposed pursuant to MOF Circular
No. 1-85, as amended by Department of Finance (DOF) Circular No.
2-94,9which provides that:2. Remittance of payment to the OPSF as
provided for under Section 5 of MOF Order No. 11-85 shall be made
not later than 20thof the month following the month of remittance
of the foreign exchange payment for the import or the month of
payment to the domestic producers in the case of locally produced
crude. Payment after the specified date shall be subject to a
surcharge of fifteen percent (15%) of the amount, if paid within
thirty (30) days from the due date plus two percent (2%) per month
if paid after thirty days.10(Emphasis supplied.)On 9 December 1991,
the OEA wrote another letter11to respondent advising the latter of
its additional underpayment to the OPSF of the foreign exchange
risk fee in the amount ofP10,139,526.56 for the period April 1991
to October 1991. In addition, surcharges in the amount
ofP2,806,656.65 were imposed thereon.In a letter dated 20 January
1992 addressed to the OEA, respondent justified that its
calculations for the transactions in question were based on a valid
interpretation of MOF Order NO. 11-85 dated 12 April 1985 and MOE
Circular No. 85-05-82 dated 16 May 1985.12On 24 March 1992,
respondent paid the OEA in full the principal amount of its
underpayment, totalingP24,554,387.31, but not the surcharges.13In a
letter14dated 15 March 1996, OEA notified the respondent that the
latter is required to pay the OPSF a total amount ofP18,535,531.40
for surcharges on the late payment of foreign exchange risk charges
for the period December 1989 to October 1991.In a letter15dated 11
July 1996, the DOE reiterated its demand for respondent to settle
the surcharges due. Otherwise, the DOE warned that it would proceed
against the respondents Irrevocable Standby Letter of Credit to
recover its unpaid surcharges.On 19 July 1996, respondent filed a
Notice of Appeal before the Office of the President. The Office of
the President affirmed the conclusion of the DOE, contained in its
letters dated 15 March 1996 and 11 July 1996. While it admitted
that the implementation of MOF Circular No. 1-85 is contingent upon
its publication and filing with the ONAR, it noted that respondent
failed to adduce evidence of lack of compliance with such
requirements. The aforementioned Decision reads:16Given the
foregoing, the DOEs implementation of MOF Circular 1-85 by imposing
surcharges on Pilipinas Shell is only proper. Like this Office, the
DOE is bound to presume the validity of that administrative
regulation.WHEREFORE, premises considered, the Decision of the
Department of Energy, contained in its letters dated 15 March 1996
and 11 July 1996, is herebyAFFIRMEDin toto.Respondent filed a
Motion for Reconsideration of the Decision dated 19 August 2003 of
the Office of the President, which was denied on 28 November
2003.17Respondent filed an appeal before the Court of Appeals
wherein it presented Certifications dated 9 February 200418and 11
February 200419issued by ONAR stating that DOF Circular No. 2-94
and MOF Circular No. 1-85 respectively, have not been filed before
said office.The Court of Appeals reversed the Decision of the
Office of the President in O.P. CASE No. 96-H-6574 and ruled that
MOF Circular 1-85, as amended, was ineffective for failure to
comply with the requirement to file with ONAR. It decreed that even
if the said circular was issued by then Acting Minister of Finance
Alfredo de Roda, Jr. long before the Administrative Code of 1987,
Section 3 of Chapter 2, Book 7 thereof specifies that rules already
in force on the date of the effectivity of the Administrative Code
of 1987 must be filed within three months from the date of
effectivity of said Code, otherwise such rules cannot thereafter be
the basis of any sanction against any party or persons.20According
to the dispositive of the appellate courts Decision:21WHEREFORE,
the instant petition is herebyGRANTED. The Decision dated August
19, 2003 and the Resolution dated November 28, 2003 of the Office
of the President, are herebyREVERSED.ACCORDINGLY, the imposition of
surcharges upon petitioner is hereby declared without legal
basis.On 25 September 2006, petitioner filed the present Petition
for Review on Certiorari, wherein the following issues were
raised:22ITHE SURCHARGE IMPOSED BY MINISTRY OF FINANCE (MOF)
CIRCULAR No. 1-85 HAS BEEN AFFIRMED BY E.O. NO. 137 HAVING RECEIVED
VITALITY FROM A LEGISLATIVE ENACTMENT, MOF CIRCULAR NO. 1-85 CANNOT
BE RENDERED INVALID BY THE SUBSEQUENT ENACTMENT OF A LAW REQUIRING
REGISTRATION OF THE MOF CIRCULAR WITH THE OFFICE OF THE NATIONAL
REGISTERIIASSUMING THAT THE REGISTRATION OF MOF NO. 1-85 IS
REQUIRED, RESPONDENT WAIVED ITS OBJECTION ON THE BASIS OF
NON-REGISTRATION WHEN IT PAID THE AMOUNT REQUIRED BY
PETITIONER.This petition is without merit.As early as 1986, this
Court inTaada v. Tuvera23enunciated that publication is
indispensable in order that all statutes, including administrative
rules that are intended to enforce or implement existing laws,
attain binding force and effect, to wit:We hold therefore that all
statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which
shall begin fifteen days after publication unless a different
effectivity date is fixed by the legislature.Covered by this rule
are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same
are validly delegated by the legislature or, at present, directly
conferred by the Constitution.Administrative rules and regulations
must also be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation. (Emphasis
provided.)Thereafter, the Administrative Code of 1987 was enacted,
with Section 3 of Chapter 2, Book VII thereof specifically
providing that:Filing. (1) Every agency shall file with the
University of the Philippines Law Center three (3) certified copies
of every rule adopted by it.Rules in force on the date of
effectivity of this Code which are not filed within three (3)
months from the date shall not thereafter be the basis of any
sanction against any party or persons.(2) The records officer of
the agency, or his equivalent functionary, shall carry out the
requirements of this section under pain of disciplinary action.(3)
A permanent register of all rules shall be kept by the issuing
agency and shall be open to public inspection. (Emphasis
provided.)Under the doctrine ofTanada v. Tuvera,24the MOF Circular
No. 1-85, as amended, is one of those issuances which should be
published before it becomes effective since it is intended to
enforce Presidential Decree No. 1956. The said circular should also
comply with the requirement stated under Section 3 of Chapter 2,
Book VII of the Administrative Code of 1987 filing with the ONAR in
the University of the Philippines Law Center for rules that are
already in force at the time the Administrative Code of 1987 became
effective. These requirements of publication and filing were put in
place as safeguards against abuses on the part of lawmakers and as
guarantees to the constitutional right to due process and to
information on matters of public concern and, therefore, require
strict compliance.In the present case, the Certifications dated 11
February 200425and 9 February 200426issued by ONAR prove that MOF
Circular No. 1-85 and its amendatory rule, DOF Circular No. 2-94,
have not been filed before said office. Moreover, petitioner was
unable to controvert respondents allegation that neither of the
aforementioned circulars were published in the Official Gazette or
in any newspaper of general circulation. Thus, failure to comply
with the requirements of publication and filing of administrative
issuances renders MOF Circular No. 1-85, as amended,
ineffective.InNational Association of Electricity Consumers for
Reforms v. Energy Regulatory Board,27this Court emphasized that
both the requirements of publication and filing of administrative
issuances intended to enforce existing laws are mandatory for the
effectivity of said issuances. In support of its ruling, it
specified several instances wherein this Court declared
administrative issuances, which failed to observe the proper
requirements, to have no force and effect:Nowhere from the above
narration does it show that the GRAM Implementing Rules was
published in the Official Gazette or in a newspaper of general
circulation. Significantly, the effectivity clauses of both the
GRAM and ICERA Implementing Rules uniformly provide that they
"shall take effect immediately." These clauses made no mention of
their publication in either the Official Gazette or in a newspaper
of general circulation. Moreover, per the Certification dated
January 11, 2006 of the Office of the National Administrative
Register (ONAR), the said implementing rules and regulations were
not likewise filed with the said office in contravention of the
Administrative Code of 1987.Applying the doctrine enunciated
inTaada v. Tuvera, the Court has previously declared as having no
force and effect the following administrative issuances: (1) Rules
and Regulations issued by the Joint Ministry of Health-Ministry of
Labor and Employment Accreditation Committee regarding the
accreditation of hospitals, medical clinics and laboratories; (2)
Letter of Instruction No. 1416 ordering the suspension of payments
due and payable by distressed copper mining companies to the
national government; (3) Memorandum Circulars issued by the
Philippine Overseas Employment Administration regulating the
recruitment of domestic helpers to Hong Kong; (4) Administrative
Order No. SOCPEC 89-08-01 issued by the Philippine International
Trading Corporation regulating applications for importation from
the Peoples Republic of China; (5) Corporation Compensation
Circular No. 10 issued by the Department of Budget and Management
discontinuing the payment of other allowances and fringe benefits
to government officials and employees; and (6) POEA Memorandum
Circular No. 2 Series of 1983 which provided for the schedule of
placement and documentation fees for private employment agencies or
authority holders.In all these cited cases, the administrative
issuances questioned therein were uniformly struck down as they
were not published or filed with the National Administrative
Register. On the other hand, inRepublic v. Express
Telecommunications Co., Inc, the Court declared that the 1993
Revised Rules of the National Telecommunications Commission had not
become effective despite the fact that it was filed with the
National Administrative Register because the same had not been
published at the time. The Court emphasized therein that
"publication in the Official Gazette or a newspaper of general
circulation is a condition sine qua non before statutes, rules or
regulations can take effect."Petitioners argument that respondent
waived the requisite registration of MOF Circular No. 1-85, as
amended, when it paid in full the principal amount of underpayment
totalingP24,544,387.31, is specious. MOF Circular No. 1-85, as
amended imposes surcharges, while respondents underpayment is based
on MOF Circular No. 11-85 dated 12 April 1985.Petitioner also
insists that the registration of MOF Circular No. 1-85, as amended,
with the ONAR is no longer necessary since the respondent knew of
its existence, despite its non-registration. This argument is
seriously flawed and contrary to jurisprudence. Strict compliance
with the requirements of publication cannot be annulled by a mere
allegation that parties were notified of the existence of the
implementing rules concerned. Hence, also inNational Association of
Electricity Consumers for Reforms v. Energy Regulatory Board, this
Court pronounced:In this case, the GRAM Implementing Rules must be
declared ineffective as the same was never published or filed with
the National Administrative Register. To show that there was
compliance with the publication requirement, respondents MERALCO
and the ERC dwell lengthily on the fact that parties, particularly
the distribution utilities and consumer groups, were duly notified
of the public consultation on the ERCs proposed implementing rules.
These parties participated in the said public consultation and even
submitted their comments thereon.However, the fact that the parties
participated in the public consultation and submitted their
respective comments is not compliance with the fundamental rule
that the GRAM Implementing Rules, or any administrative rules whose
purpose is to enforce or implement existing law, must be published
in the Official Gazette or in a newspaper of general circulation.
The requirement of publication of implementing rules of statutes is
mandatory and may not be dispensed with altogether even if, as in
this case, there was public consultation and submission by the
parties of their comments.28(Emphasis provided.)Petitioner further
avers that MOF Circular No. 1-85, as amended, gains its vitality
from the subsequent enactment of Executive Order No. 137, which
reiterates the power of then Minister of Finance to promulgate the
necessary rules and regulations to implement the executive order.
Such contention is irrelevant in the present case since the power
of the Minister of Finance to promulgate rules and regulations is
not under dispute. The issue rather in the Petition at bar is the
ineffectivity of his administrative issuance for non-compliance
with the requisite publication and filing with the ONAR. And while
MOF Circular No. 1-85, as amended, may be unimpeachable in
substance, the due process requirements of publication and filing
cannot be disregarded. Moreover, none of the provisions of
Executive Order No. 137 exempts MOF Circular No. 1-85, as amended
from the aforementioned requirements.IN VIEW OF THE FOREGOING, the
instant Petition is DENIED and the assailed Decision dated 4 August
2006 of the Court of Appeals in C.A. G.R. SP No. 82183 isAFFIRMED.
No cost.SO ORDERED.Austria-Martinez, Acting Chairperson,
Carpio-Morales*, Tinga*, Reyes, JJ.,concur.
G.R. No. 164026 December 23, 2008SECURITIES AND EXCHANGE
COMMISSION,petitioner,vs.GMA NETWORK, INC.,respondent.D E C I S I O
NTINGA,J.:Petitioner Securities and Exchange Commission (SEC)
assails the Decision1dated February 20, 2004 of the Court of
Appeals in CA-G.R. SP No. 68163, which directed that SEC Memorandum
Circular No. 1, Series of 1986 should be the basis for computing
the filing fee relative to GMA Network, Inc.s (GMAs) application
for the amendment of its articles of incorporation for purposes of
extending its corporate term.The undisputed facts as narrated by
the appellate court are as follows:On August 19, 1995, the
petitioner, GMA NETWORK, INC., (GMA, for brevity), a domestic
corporation, filed an application for collective approval of
various amendments to its Articles of Incorporation and By-Laws
with the respondent Securities and Exchange Commission, (SEC, for
brevity). The amendments applied for include, among others, the
change in the corporate name of petitioner from "Republic
Broadcasting System, Inc." to "GMA Network, Inc." as well as the
extension of the corporate term for another fifty (50) years from
and after June 16, 2000.Upon such filing, the petitioner had been
assessed by the SECs Corporate and Legal Department a separate
filing fee for the application for extension of corporate term
equivalent to 1/10 of 1% of its authorized capital stock plus 20%
thereof or an amount ofP1,212,200.00.On September 26, 1995, the
petitioner informed the SEC of its intention to contest the
legality and propriety of the said assessment. However, the
petitioner requested the SEC to approve the other amendments being
requested by the petitioner without being deemed to have withdrawn
its application for extension of corporate term.On October 20,
1995, the petitioner formally protested the assessment amounting
toP1,212,200.00 for its application for extension of corporate
term.On February 20, 1996, the SEC approved the other amendments to
the petitioners Articles of Incorporation, specifically Article 1
thereof referring to the corporate name of the petitioner as well
as Article 2 thereof referring to the principal purpose for which
the petitioner was formed.On March 19, 1996, the petitioner
requested for an official opinion/ruling from the SEC on the
validity and propriety of the assessment for application for
extension of its corporate term.Consequently, the respondent SEC,
through Associate Commissioner Fe Eloisa C. Gloria, on April 18,
1996, issued its ruling upholding the validity of the questioned
assessment, the dispositive portion of which states:"In light of
the foregoing, we believe that the questioned assessment is in
accordance with law. Accordingly, you are hereby required to comply
with the required filing fee."An appeal from the aforequoted ruling
of the respondent SEC was subsequently taken by the petitioner on
the ground that the assessment of filing fees for the petitioners
application for extension of corporate term equivalent to 1/10 of
1% of the authorized capital stock plus 20% thereof is not in
accordance with law.On September 26, 2001, following three (3)
motions for early resolution filed by the petitioner, the
respondent SEC En Banc issued the assailed order dismissing the
petitioners appeal, the dispositive portion of which provides as
follows:WHEREFORE, for lack of merit, the instant Appeal is hereby
dismissed.SO ORDERED.2In its petition for review3with the Court of
Appeals, GMA argued that its application for the extension of its
corporate term is akin to an amendment and not to a filing of new
articles of incorporation. It further averred that SEC Memorandum
Circular No. 2, Series of 1994, which the SEC used as basis for
assessingP1,212,200.00 as filing fee for the extension of GMAs
corporate term, is not valid.The appellate court agreed with the
SECs submission that an extension of the corporate term is a grant
of a fresh license for a corporation to act as a juridical being
endowed with the powers expressly bestowed by the State. As such,
it is not an ordinary amendment but is analogous to the filing of
new articles of incorporation.However, the Court of Appeals ruled
that Memorandum Circular No. 2, Series of 1994 is legally invalid
and ineffective for not having been published in accordance with
law. The challenged memorandum circular, according to the appellate
court, is not merely an internal or interpretative rule, but
affects the public in general. Hence, its publication is required
for its effectivity.The appellate court denied reconsideration in a
Resolution4dated June 9, 2004.In its Memorandum5dated September 6,
2005, the SEC argues that it issued the questioned memorandum
circular in the exercise of its delegated legislative power to fix
fees and charges. The filing fees required by it are allegedly
uniformly imposed on the transacting public and are essential to
its supervisory and regulatory functions. The fees are not a form
of penalty or sanction and, therefore, require no publication.For
its part, GMA points out in its Memorandum,6dated September 23,
2005, that SEC Memorandum Circular No. 1, Series of 1986 refers to
the filing fees for amended articles of incorporation where the
amendment consists of extending the term of corporate existence.
The questioned circular, on the other hand, refers only to filing
fees for articles of incorporation. Thus, GMA argues that the
former circular, being the one that specifically treats of
applications for the extension of corporate term, should apply to
its case.Assuming that Memorandum Circular No. 2, Series of 1994 is
applicable, GMA avers that the latter did not take effect and
cannot be the basis for the imposition of the fees stated therein
for the reasons that it was neither filed with the University of
the Philippines Law Center nor published either in the Official
Gazette or in a newspaper of general circulation as required under
existing laws.It should be mentioned at the outset that the
authority of the SEC to collect and receive fees as authorized by
law is not in question.7Its power to collect fees for examining and
filing articles of incorporation and by-laws and amendments
thereto, certificates of increase or decrease of the capital stock,
among others, is recognized. Likewise established is its power
under Sec. 7 of P.D. No. 902-A to recommend to the President the
revision, alteration, amendment or adjustment of the charges which
it is authorized to collect.The subject of the present inquiry is
not the authority of the SEC to collect and receive fees and
charges, but rather the validity of its imposition on the basis of
a memorandum circular which, the Court of Appeals held, is
ineffective.Republic Act No. 3531 (R.A. No. 3531) provides that
where the amendment consists in extending the term of corporate
existence, the SEC "shall be entitled to collect and receive for
the filing of the amended articles of incorporation the same fees
collectible under existing law as the filing of articles of
incorporation."8As is clearly the import of this law, the SEC shall
be entitled to collect and receive the same fees it assesses and
collects both for the filing of articles of incorporation and the
filing of an amended articles of incorporation for purposes of
extending the term of corporate existence.The SEC, effectuating its
mandate under the aforequoted law and other pertinent laws,9issued
SEC Memorandum Circular No. 1, Series of 1986, imposing the filing
fee of 1/10 of 1% of the authorized capital stock but not less
thanP300.00 nor more thanP100,000.00 for stock corporations, and
1/10 of 1% of the authorized capital stock but not less thanP200.00
nor more thanP100,000.00 for stock corporations without par value,
for the filing of amended articles of incorporation where the
amendment consists of extending the term of corporate
existence.Several years after, the SEC issued Memorandum Circular
No. 2, Series of 1994, imposing new fees and charges and deleting
the maximum filing fee set forth in SEC Circular No. 1, Series of
1986, such that the fee for the filing of articles of incorporation
became 1/10 of 1% of the authorized capital stock plus 20% thereof
but not less thanP500.00.A reading of the two circulars readily
reveals that they indeed pertain to different matters, as GMA
points out. SEC Memorandum Circular No. 1, Series of 1986 refers to
the filing fee for the amendment of articles of incorporation to
extend corporate life, while Memorandum Circular No. 2, Series of
1994 pertains to the filing fee for articles of incorporation.
Thus, as GMA argues, the former circular, being squarely applicable
and, more importantly, being more favorable to it, should be
followed.What this proposition fails to consider, however, is the
clear directive of R.A. No. 3531 to impose the same fees for the
filing of articles of incorporation and the filing of amended
articles of incorporation to reflect an extension of corporate
term. R.A. No. 3531 provides an unmistakable standard which should
guide the SEC in fixing and imposing its rates and fees. If such
mandate were the only consideration, the Court would have been
inclined to rule that the SEC was correct in imposing the filing
fees as outlined in the questioned memorandum circular, GMAs
argument notwithstanding.However, we agree with the Court of
Appeals that the questioned memorandum circular is invalid as it
does not appear from the records that it has been published in the
Official Gazette or in a newspaper of general circulation.
Executive Order No. 200, which repealed Art. 2 of the Civil Code,
provides that "laws shall take effect after fifteen days following
the completion of their publication either in the Official Gazette
or in a newspaper of general circulation in the Philippines, unless
it is otherwise provided."InTaada v. Tuvera,10the Court, expounding
on the publication requirement, held:We hold therefore that all
statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which
shall begin fifteen days after publication unless a different
effectivity date is fixed by the legislature.Covered by this rule
are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same
are validly delegated by the legislature, or, at present, directly
conferred by the Constitution. Administrative rules and regulations
must also be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation.Interpretative
regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not
the public, need not be published. Neither is publication required
of the so-called letters of instructions issued by administrative
superiors concerning the rules or guidelines to be followed by
their subordinates in the performance of their duties.11The
questioned memorandum circular, furthermore, has not been filed
with the Office of the National Administrative Register of the
University of the Philippines Law Center as required in the
Administrative Code of 1987.12InPhilsa International Placement and
Services Corp. v. Secretary of Labor and Employment,13Memorandum
Circular No. 2, Series of 1983 of the Philippine Overseas
Employment Administration, which provided for the schedule of
placement and documentation fees for private employment agencies or
authority holders, was struck down as it was not published or filed
with the National Administrative Register.The questioned memorandum
circular, it should be emphasized, cannot be construed as simply
interpretative of R.A. No. 3531. This administrative issuance is an
implementation of the mandate of R.A.No. 3531 and indubitably
regulates and affects the public at large. It cannot, therefore, be
considered a mere internal rule or regulation, nor an
interpretation of the law, but a rule which must be declared
ineffective as it was neither published nor filed with the Office
of the National Administrative Register.A related factor which
precludes consideration of the questioned issuance as
interpretative in nature merely is the fact the SECs assessment
amounting toP1,212,200.00 is exceedingly unreasonable and amounts
to an imposition. A filing fee, by legal definition, is that
charged by a public official to accept a document for processing.
The fee should be just, fair, and proportionate to the service for
which the fee is being collected, in this case, the examination and
verification of the documents submitted by GMA to warrant an
extension of its corporate term.Rate-fixing is a legislative
function which concededly has been delegated to the SEC by R.A. No.
3531 and other pertinent laws. The due process clause, however,
permits the courts to determine whether the regulation issued by
the SEC is reasonable and within the bounds of its rate-fixing
authority and to strike it down when it arbitrarily infringes on a
persons right to property.WHEREFORE, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. SP No. 68163, dated
February 20, 2004, and its Resolution, dated June 9, 2004, are
AFFIRMED. No pronouncement as to costs.SO ORDERED.DANTE O.
TINGAAssociate Justice
G.R. No. 180705 November 27, 2012EDUARDO M. COJUANGCO,
JR.,Petitioner,vs.REPUBLIC OF THE PHILIPPINES,Respondent.D E C I S
I O NVELASCO, JR.,J.:The CaseOf the several coconut levy appealed
cases that stemmed from certain issuances of the Sandiganbayan in
its Civil Case No. 0033, the present recourse proves to be one of
the most difficult.In particular, the instant petition for review
under Rule 45 of the Rules of Court assails and seeks to annul a
portion of the Partial Summary Judgment dated July 11, 2003, as
affirmed in a Resolution of December 28, 2004, both rendered by the
Sandiganbayan in its Civil Case ("CC") No. 0033-A (the judgment
shall hereinafter be referred to as "PSJ-A"), entitled "Republic of
the Philippines, Plaintiff, v. Eduardo M. Cojuangco, Jr., et al.,
Defendants, COCOFED, et al., BALLARES, et al., Class Action
Movants." CC No. 0033-A is the result of the splitting into eight
(8) amended complaints of CC No. 0033 entitled, "Republic of the
Philippines v. Eduardo Cojuangco, Jr., et al.," a suit for recovery
of ill-gotten wealth commenced by the Presidential Commission on
Good Government ("PCGG"), for the Republic of the Philippines
("Republic"), against Eduardo M. Cojuangco, Jr. ("Cojuangco") and
several individuals, among them, Ferdinand E. Marcos, Maria Clara
Lobregat ("Lobregat"), and Danilo S. Ursua ("Ursua"). Each of the
eight (8) subdivided complaints, CC No. 0033-A to CC No. 0033-H,
correspondingly impleaded as defendants only the alleged
participants in the transaction/s subject of the suit, or who are
averred as owner/s of the assets involved.Apart from this recourse,
We clarify right off that PSJ-A was challenged in two other
separate but consolidated petitions for review, one commenced by
COCOFED et al., docketed as G.R. Nos. 177857-58, and the other,
interposed by Danilo S. Ursua, and docketed as G.R. No. 178193.By
Decision dated January 24, 2012, in the aforesaid G.R. Nos.
177857-58 (COCOFED et al. v. Republic) and G.R. No. 178193 (Ursua
v. Republic) consolidated cases1(hereinafter collectively referred
to as "COCOFED v. Republic"), the Court addressed and resolved all
key matters elevated to it in relation to PSJ-A, except for the
issues raised in the instant petition which have not yet been
resolved therein. In the same decision, We made clear that: (1)
PSJ-A is subject of another petition for review interposed by
Eduardo Cojuangco, Jr., in G.R. No. 180705, entitled Eduardo M.
Cojuangco, Jr. v. Republic of the Philippines, which shall be
decided separately by the Court,2and (2) the issues raised in the
instant petition should not be affected by the earlier decision
"save for determinatively legal issues directly addressed
therein."3For a better perspective, the instant recourse seeks to
reverse the Partial Summary Judgment4of the anti-graft court dated
July 11, 2003, as reiterated in a Resolution5of December 28, 2004,
denying COCOFEDs motion for reconsideration, and the May 11, 2007
Resolution6denyingCOCOFEDs motion to set case for trial and
declaring the partial summary judgment final and appealable, all
issued in PSJ-A. In our adverted January 24, 2012 Decision in
COCOFED v. Republic, we affirmed with modification PSJ-A of the
Sandiganbayan, and its Partial Summary Judgment in Civil Case No.
0033-F, dated May 7, 2004 (hereinafter referred to as "PSJ-F).7More
specifically, We upheld the Sandiganbayans ruling that the coconut
levy funds are special public funds of the Government.
Consequently, We affirmed the Sandiganbayans declaration that
Sections 1 and 2 of Presidential Decree ("P.D.") 755, Section 3,
Article III of P.D. 961 and Section 3, Article III of P.D. 1468, as
well as the pertinent implementing regulations of the Philippine
Coconut Authority ("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. The Decision also affirmed the
Governments ownership of the six CIIF companies, the fourteen
holding companies, and the CIIF block of San Miguel Corporation
shares of stock, for 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.By Resolution of September 4, 2012,8the Court affirmed the
above-stated Decision promulgated on January 24, 2012.It bears to
stress at this juncture that the only portion of the appealed
Partial Summary Judgment dated July 11, 2003 ("PSJ-A") which
remains at issue revolves around the following decretal holdings of
that court relating to the "compensation" paid to petitioner for
exercising his personal and exclusive option to acquire the
FUB/UCPB shares.9It will be recalled that the Sandiganbayan
declared the Agreement between the PCA and Cojuangco containing the
assailed "compensation" null and void for not having the required
valuable consideration. Consequently, the UCPB shares of stocks
that are subject of the Agreement were declared conclusively owned
by the Government. It also held that the Agreement did not have the
effect of law as it was not published as part of P.D. 755, even if
Section 1 thereof made reference to the same.FactsWe reproduce,
below, portions of the statement of facts in COCOFED v. Republic
relevant to the present case:10In 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 thePhilippine Coconut
Administration ("PHILCOA" now "PCA") as having the largest
membership.The declaration of martial law in September 1972 saw the
issuance of several presidential decrees ("P.D.") 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 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; and that the PCA is hereby authorized to distribute, for free,
the shares of stock of the bank it acquired to the coconut
farmers.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 IIILeviesSection 1.
Coconut Consumers Stabilization Fund Levy. The PCA is hereby
empowered to impose and collect the Coconut Consumers Stabilization
Fund Levy, ..Section 5. Exemption. The CCSF and theCIDF as well as
all disbursements as herein authorized, shall not be construed as
special and/or fiduciary funds, or as part of the general funds of
the national government within the contemplation of PD 711; 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: . (Emphasis supplied)6.
Letter of Instructions No. ("LOI") 926, s. 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 is hereby
directed to invest, on behalf of the coconut farmers, such portion
of the CIIF in private corporations under the following
guidelines:a) The coconut farmers shall own or control at least
(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 . (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 various assets or investments.11Relevant to the
present petition is the acquisition of the First United Bank
("FUB"), which was subsequently renamed as United Coconut Planters
Bank ("UCPB").12Apropos the intended acquisition of a commercial
bank for the purpose stated earlier, it would appear that FUB was
the bank of choice which Pedro Cojuangcos group (collectively,
"Pedro Cojuangco") had control of. The plan, then, was for PCA to
buy all of Pedro Cojuangcos shares in FUB. However, as later events
unfolded, a simple direct sale from the seller (Pedro) to PCA did
not ensue as it was made to appear that Cojuangco had the exclusive
option to acquire the formers FUB controlling interests. Emerging
from this elaborate, circuitous arrangement were two deeds. The
first one was simply denominated as Agreement, dated May 1975,
entered into by and between Cojuangco for and in his behalf and in
behalf of "certain other buyers", and Pedro Cojuangco in which the
former was purportedly accorded the option to buy 72.2% of FUBs
outstanding capital stock, or 137,866 shares (the "option shares,"
for brevity), at PhP 200 per share. On its face, this agreement
does not mention the word "option."The second but related contract,
dated May 25, 1975, was denominated as Agreement for the
Acquisition of a Commercial Bank for the Benefit of the Coconut
Farmers of the Philippines. It had PCA, for itself and for the
benefit of the coconut farmers, purchase from Cojuangco the shares
of stock subject of the First Agreement for PhP200.00 per share. As
additional consideration for PCAs buy-out of what Cojuangco would
later claim to be his exclusive and personal option, it was
stipulated that, from PCA, Cojuangco shall receive equity in FUB
amounting to 10%, or 7.22%, of the 72.2%, or fully paid shares. And
so as not to dilute Cojuangcos equity position in FUB, later UCPB,
the PCA agreed under paragraph 6 (b) of the second agreement to
cede over to the former a number of fully paid FUB shares out of
the shares it (PCA) undertakes to eventually subscribe. It was
further stipulated that Cojuangco would act as bank president for
an extendible period of 5 years.Apart from the aforementioned
72.2%, PCA purchased from other FUB shareholders 6,534 shares of
which Cojuangco, as may be gathered from the records, got
10%..While the 64.98% portion of the option shares (72.2% 7.22% =
64.98%) ostensibly pertained to the farmers, the corresponding
stock certificates supposedly representing the farmers equity were
in the name of and delivered to PCA. There were, however, shares
forming part of the aforesaid 64.98% portion, which ended up in the
hands of non-farmers. The remaining 27.8% of the FUB capital stock
were not covered by any of the agreements.Under paragraph # 8 of
the second agreement, PCA agreed to expeditiously distribute the
FUB shares purchased to such "coconut farmers holding registered
COCOFUND receipts" on equitable basis.As found by the
Sandiganbayan, the PCA appropriated, out of its own fund, an amount
for the purchase of the said 72.2% equity, albeit it would later
reimburse itself from the coconut levy fund.And per Cojuangcos own
admission, PCA paid, out of the CCSF, the entire acquisition price
for the 72.2% option shares.13As of June 30, 1975, the list of FUB
stockholders included Cojuangco with 14,440 shares and PCA with
129,955 shares.14It would appear later that, pursuant to the
stipulation on maintaining Cojuangcos equity position in the bank,
PCA would cede to him 10% of its subscriptions to (a) the
authorized but unissued shares of FUB and (b) the increase in FUBs
capital stock (the equivalent of 158,840 and 649,800 shares,
respectively). In all, from the "mother" PCA shares, Cojuangco
would receive a total of 95,304 FUB (UCPB) shares broken down as
follows: 14,440 shares + 10% (158,840 shares) + 10% (649,800
shares) = 95,304.15We further quote, from COCOFED v. Republic,
facts relevant to the instant case:16Shortly after the execution of
the PCA Cojuangco Agreement, President Marcos issued, on July 29,
1975, P.D. No. 755 directing x x x as 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" x x
x.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. (EO) 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;17E.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
"technical rules of procedure and evidence shall not be applied
strictly" to the civil cases filed under the EO. Pursuant to these
issuances, the PCGG issued numerous orders of sequestration, among
which were those handed out x x x against shares of stock in UCPB
purportedly owned by or registered in the names of (a) the more
than a million coconut farmers, (b) the CIIF companies and (c)
Cojuangco, Jr., 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.x x x
x3. Civil Case 0033 x x x would be subdivided into eight
complaints, docketed as CC 0033-A to CC 0033-H.x x x x5. By
Decision of December 14, 2001, in G.R. Nos. 147062-64 (Republic v.
COCOFED),18the 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.x x x xCorrelatively, the Republic, on the strength of
the December 14, 2001 ruling in Republic v. COCOFED and on the
argument, among others, that the claim of COCOFED and Ballares et
al., over the subject UCPB shares is based solely on the supposed
COCOFUND receipts issued for payment of the RA 6260 CIF levy, filed
a Motion for Partial Summary Judgment RE: COCOFED, et al. and
Ballares, et al. dated April 22, 2002, praying that a summary
judgment be rendered declaring:a. That Section 2 of [PD] 755,
Section 5, Article III of P.D. 961 and Section 5, Article III of
P.D. No. 1468 are unconstitutional;b. That x x x (CIF) payments
under x x x (R.A.) No. 6260 are not valid and legal bases for
ownership claims over UCPB shares; andc. That COCOFED, et al., and
Ballares, et al. have not legally and validly obtained title over
the subject UCPB shares.Right after it filed the Motion for Partial
Summary Judgment RE: COCOFED, et al. and Ballares, et al., the
Republic interposed a Motion for Partial Summary Judgment Re:
Eduardo M. Cojuangco, Jr., praying that a summary judgment be
rendered:a. Declaring that Section 1 of P.D. No. 755 is
unconstitutional insofar as it validates the provisions in the
"PCA-Cojuangco Agreement x x x" dated May 25, 1975 providing
payment of ten percent (10%) commission to defendant Cojuangco with
respect to the FUB, now UCPB shares subject matter thereof;b.
Declaring that x x x Cojuangco, Jr. and his fronts, nominees and
dummies, including x x x and Danilo S. Ursua, have not legally and
validly obtained title over the subject UCPB shares; andc.
Declaring that the government is the lawful and true owner of the
subject UCPB shares registered in the names of Cojuangco, Jr. and
the entities and persons above-enumerated, for the benefit of all
coconut farmers. x x xFollowing an exchange of pleadings, the
Republic filed its sur-rejoinder praying that it be conclusively
declared the true and absolute owner of the coconut levy funds and
the UCPB shares acquired therefrom.19We quote from COCOFED v.
Republic:20A joint hearing on the separate motions for summary
judgment to determine what material facts exist with or without
controversy then ensued. By Order of March 11, 2003, the
Sandiganbayan detailed, based on this Courts ruling in related
ill-gotten cases, the parties manifestations made in open court and
the pleadings and evidence on record, the facts it found to be
without substantial controversy, together with the admissions
and/or extent of the admission made by the parties respecting
relevant facts, as follows:As culled from the exhaustive
discussions and manifestations of the parties in open court of
their respective pleadings and evidence on record, the facts which
exist without any substantial controversy are set forth hereunder,
together with the admissions and/or the extent or scope of the
admissions made by the parties relating to the relevant facts:1.
The late President Ferdinand E. Marcos was President x x x for two
terms under the 1935 Constitution and, during the second term, he
declared Martial Law through Proclamation No. 1081 dated September
21, 1972.2. On January 17, 1973, he issued Proclamation No. 1102
announcing the ratification of the 1973 Constitution.3. From
January 17, 1973 to April 7, 1981, he x x x exercised the powers
and prerogative of President under the 1935 Constitution and the
powers and prerogative of President x x x the 1973 Constitution.He
x x x promulgated various P.D.s, among which were P.D. No. 232,
P.D. No. 276, P.D. No. 414, P.D. No. 755, P.D. No. 961 and P.D. No.
1468.4. On April 17, 1981, amendments to the 1973 Constitution were
effected and, on June 30, 1981, he, after being elected President,
"reassumed the title and exercised the powers of the President
until 25 February 1986."5. Defendants Maria Clara Lobregat and Jose
R. Eleazar, Jr. were PCA Directors x x x during the period 1970 to
1986 x x x.6. Plaintiff admits the existence of the following
agreements which are attached as Annexes "A" and "B" to the
Opposition dated October 10, 2002 of defendant Eduardo M.
Cojuangco, Jr. to the above-cited Motion for Partial Summary
Judgment:a) "This Agreement made and entered into this ______ day
of May, 1975 at Makati, Rizal, Philippines, by and between:PEDRO
COJUANGCO, Filipino, of legal age and with residence at 1575
Princeton St., Mandaluyong, Rizal, for and in his own behalf and in
behalf of certain other stockholders of First United Bank listed in
Annex "A" attached hereto (hereinafter collectively called the
SELLERS); and EDUARDO COJUANGCO, JR., Filipino, of legal age and
with residence at 136 9th Street corner Balete Drive, Quezon City,
represented in this act by his duly authorized attorney-in-fact,
EDGARDO J. ANGARA, for and in his own behalf and in behalf of
certain other buyers, (hereinafter collectively called the
BUYERS)";WITNESSETH: ThatWHEREAS, the SELLERS own of record and
beneficially a total of 137,866 shares of stock, with a par value
of P100.00 each, of the common stock of the First United Bank (the
"Bank"), a commercial banking corporation existing under the laws
of the Philippines;WHEREAS, the BUYERS desire to purchase, and the
SELLERS are willing to sell, the aforementioned shares of stock
totaling 137,866 shares (hereinafter called the "Contract Shares")
owned by the SELLERS due to their special relationship to EDUARDO
COJUANGCO, JR.;NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants herein contained, the parties
agree as follows:1. Sale and Purchase of Contract SharesSubject to
the terms and conditions of this Agreement, the SELLERS hereby
sell, assign, transfer and convey unto the BUYERS, and the BUYERS
hereby purchase and acquire, the Contract Shares free and clear of
all liens and encumbrances thereon.2. Contract PriceThe purchase
price per share of the Contract Shares payable by the BUYERS is
P200.00 or an aggregate price of P27,573,200.00 (the "Contract
Price").3. Delivery of, and payment for, stock certificatesUpon the
execution of this Agreement, (i) the SELLERS shall deliver to the
BUYERS the stock certificates representing the Contract Shares,
free and clear of all liens, encumbrances, obligations, liabilities
and other burdens in favor of the Bank or third parties, duly
endorsed in blank or with stock powers sufficient to transfer the
shares to bearer; and (ii) BUYERS shall deliver to the SELLERS
P27,511,295.50 representing the Contract Price less the amount of
stock transfer taxes payable by the SELLERS, which the BUYERS
undertake to remit to the appropriate authorities. (Emphasis
added.)4. Representation and Warranties of SellersThe SELLERS
respectively and independently of each other represent and warrant
that:(a) The SELLERS are the lawful owners of, with good marketable
title to, the Contract Shares and that (i) the certificates to be
delivered pursuant thereto have been validly issued and are fully
paid and non-assessable; (ii) the Contract Shares are free and
clear of all liens, encumbrances, obligations, liabilities and
other burdens in favor of the Bank or third parties x x x.This
representation shall survive the execution and delivery of this
Agreement and the consummation or transfer hereby contemplated.(b)
The execution, delivery and performance of this Agreement by the
SELLERS does not conflict with or constitute any breach of any
provision in any agreement to which they are a party or by which
they may be bound.(c) They have complied with the condition set
forth in Article X of the Amended Articles of Incorporation of the
Bank.5. Representation of BUYERSx x x x6. ImplementationThe parties
hereto hereby agree to execute or cause to be executed such
documents and instruments as may be required in order to carry out
the intent and purpose of this Agreement.7. Noticesx x x xIN
WITNESS WHEREOF, the parties hereto have hereunto set their hands
at the place and on the date first above written.PEDRO COJUANGCO(on
his own behalf and inbehalf of the otherlisted in Annex "A"
hereof)(SELLERS)EDUARDO COJUANGCO, JR.(on his own behalf and in
behalfSellers of the other Buyers)(BUYERS)
By:EDGARDO J. ANGARAAttorney-in-Factx x x xb) "Agreement for the
Acquisition of a Commercial Bank for the Benefit of the Coconut
Farmers of the Philippines, made and entered into this 25th day of
May 1975 at Makati, Rizal, Philippines, by and between:EDUARDO M.
COJUANGCO, JR., Filipino, of legal age, with business address at
10th Floor, Sikatuna Building, Ayala Avenue, Makati, Rizal,
hereinafter referred to as the SELLER; and PHILIPPINE COCONUT
AUTHORITY, a public corporation created by Presidential Decree No.
232, as amended, for itself and for the benefit of the coconut
farmers of the Philippines, (hereinafter called the
BUYER)"WITNESSETH: ThatWHEREAS, on May 17, 1975, the Philippine
Coconut Producers Federation ("PCPF"), through its Board of
Directors, expressed the desire of the coconut farmers to own a
commercial bank which will be an effective instrument to solve the
perennial credit problems and, for that purpose, passed a
resolution requesting the PCA to negotiate with the SELLER for the
transfer to the coconut farmers of the SELLERs option to buy the
First United Bank (the "Bank") under such terms and conditions as
BUYER may deem to be in the best interest of the coconut farmers
and instructed Mrs. Maria Clara Lobregat to convey such request to
the BUYER;WHEREAS, the PCPF further instructed Mrs. Maria Clara
Lobregat to make representations with the BUYER to utilize its
funds to finance the purchase of the Bank;WHEREAS, the SELLER has
the exclusive and personal option to buy 144,400 shares (the
"Option Shares") of the Bank, constituting 72.2% of the present
outstanding shares of stock of the Bank, at the price of P200.00
per share, which option only the SELLER can validly
exercise;WHEREAS, in response to the representations made by the
coconut farmers, the BUYER has requested the SELLER to exercise his
personal option for the benefit of the coconut farmers;WHEREAS, the
SELLER is willing to transfer the Option Shares to the BUYER at a
price equal to his option price of P200 per share;WHEREAS,
recognizing that ownership by the coconut farmers of a commercial
bank is a permanent solution to their perennial credit problems,
that it will accelerate the growth and development of the coconut
industry and that the policy of the state which the BUYER is
required to implement is to achieve vertical integration thereof so
that coconut farmers will become participants in, and beneficiaries
of the development and growth of the coconut industry, the BUYER
approved the request of PCPF that it acquire a commercial bank to
be owned by the coconut farmers and, appropriated, for that
purpose, the sum of P150 Million to enable the farmers to buy the
Bank and capitalize the Bank to such an extension as to be in a
position to adopt a credit policy for the coconut farmers at
preferential rates;WHEREAS, x x x the BUYER is willing to subscribe
to additional shares ("Subscribed Shares") and place the Bank in a
more favorable financial position to extend loans and credit
facilities to coconut farmers at preferential rates;NOW, THEREFORE,
for and in consideration of the foregoing premises and the other
terms and conditions hereinafter contained, the parties hereby
declare and affirm that their principal contractual intent is (1)
to ensure that the coconut farmers own at least 60% of the
outstanding capital stock of the Bank; and (2) that the SELLER
shall receive compensation for exercising his personal and
exclusive option to acquire the Option Shares, for transferring
such shares to the coconut farmers at the option price of P200 per
share, and for performing the management services required of him
hereunder.1. To ensure that the transfer to the coconut farmers of
the Option Shares is effected with the least possible delay and to
provide for the faithful performance of the obligations of the
parties hereunder, the parties hereby appoint the Philippine
National Bank as their escrow agent (the "Escrow Agent").Upon
execution of this Agreement, the BUYER shall deposit with the
Escrow Agent such amount as may be necessary to implement the terms
of this Agreement x x x.2. As promptly as practicable after
execution of this Agreement, the SELLER shall exercise his option
to acquire the Option Share and SELLER shall immediately thereafter
deliver and turn over to the Escrow Agent such stock certificates
as are herein provided to be received from the existing
stockholders of the Bank by virtue of the exercise on the
aforementioned option x x x.3. To ensure the stability of the Bank
and continuity of management and credit policies to be adopted for
the benefit of the coconut farmers, the parties undertake to cause
the stockholders and the Board of Directors of the Bank to
authorize and approve a management contract between the Bank and
the SELLER under the following terms:(a) The management contract
shall be for a period of five (5) years, renewable for another five
(5) years by mutual agreement of the SELLER and the Bank;(b) The
SELLER shall be elected President and shall hold office at the
pleasure of the Board of Directors. While serving in such capacity,
he shall be entitled to such salaries and emoluments as the Board
of Directors may determine;(c) The SELLER shall recruit and develop
a professional management team to manage and operate the Bank under
the control and supervision of the Board of Directors of the
Bank;(d) The BUYER undertakes to cause three (3) persons designated
by the SELLER to be elected to the Board of Directors of the
Bank;(e) The SELLER shall receive no compensation for managing the
Bank, other than such salaries or emoluments to which he may be
entitled by virtue of the discharge of his function and duties as
President, provided x x x and(f) The management contract may be
assigned to a management company owned and controlled by the
SELLER.4. As compensation for exercising his personal and exclusive
option to acquire the Option Shares and for transferring such
shares to the coconut farmers, as well as for performing the
management services required of him, SELLER shall receive equity in
the Bank amounting, in the aggregate, to 95,304 fully paid shares
in accordance with the procedure set forth in paragraph 6 below;5.
In order to comply with the Central Bank program for increased
capitalization of banks and to ensure that the Bank will be in a
more favorable financial position to attain its objective to extend
to the coconut farmers loans and credit facilities, the BUYER
undertakes to subscribe to shares with an aggregate par value of
P80,864,000 (the "Subscribed Shares"). The obligation of the BUYER
with respect to the Subscribed Shares shall be as follows:(a) The
BUYER undertakes to subscribe, for the benefit of the coconut
farmers, to shares with an aggregate par value of P15,884,000 from
the present authorized but unissued shares of the Bank; and(b) The
BUYER undertakes to subscribe, for the benefit of the coconut
farmers, to shares with an aggregate par value of P64,980,000 from
the increased capital stock of the Bank, which subscriptions shall
be deemed made upon the approval by the stockholders of the
increase of the authorized capital stock of the Bank from P50
Million to P140 Million.The parties undertake to declare stock
dividends of P8 Million out of the present authorized but unissued
capital stock of P30 Million.6. To carry into effect the agreement
of the parties that the SELLER shall receive as his compensation
95,304 shares:(a) The Escrow Agent shall, upon receipt from the
SELLER of the stock certificates representing the Option Shares,
duly endorsed in blank or with stock powers sufficient to transfer
the same to bearer, present such stock certificates to the Transfer
Agent of the Bank and shall cause such Transfer Agent to issue
stock certificates of the Bank in the following ratio: one share in
the name of the SELLER for every nine shares in the name of the
BUYER.(b) With respect to the Subscribed Shares, the BUYER
undertakes, in order to prevent the dilution of SELLERs equity
position, that it shall cede over to the SELLER 64,980 fully-paid
shares out of the Subscribed Shares. Such undertaking shall be
complied with in the following manner: upon receipt of advice that
the BUYER has subscribed to the Subscribed Shares upon approval by
the stockholders of the increase of the authorized capital stock of
the Bank, the Escrow Agent shall thereupon issue a check in favor
of the Bank covering the total payment for the Subscribed Shares.
The Escrow Agent shall thereafter cause the Transfer Agent to issue
a stock certificates of the Bank in the following ratio: one share
in the name of the SELLER for every nine shares in the name of the
BUYER.7. The parties further undertake that the Board of Directors
and management of the Bank shall establish and implement a loan
policy for the Bank of making available for loans at preferential
rates of interest to the coconut farmers x x x.8. The BUYER shall
expeditiously distribute from time to time the shares of the Bank,
that shall be held by it for the benefit of the coconut farmers of
the Philippines under the provisions of this Agreement, to such,
coconut farmers holding registered COCOFUND receipts on such
equitable basis as may be determine by the BUYER in its sound
discretion.9. x x x x10. To ensure that not only existing but
future coconut farmers shall be participants in and beneficiaries
of the credit policies, and shall be entitled to the benefit of
loans and credit facilities to be extended by the Bank to coconut
farmers at preferential rates, the shares held by the coconut
farmers shall not be entitled to pre-emptive rights with respect to
the unissued portion of the authorized capital stock or any
increase thereof.11. After the parties shall have acquired
two-thirds (2/3) of the outstanding shares of the Bank, the parties
shall call a special stockholders meeting of the Bank:(a) To
classify the present authorized capital stock of P50,000,000
divided into 500,000 shares, with a par value of P100.00 per share
into: 361,000 Class A shares, with an aggregate par value of
P36,100,000 and 139,000 Class B shares, with an aggregate par value
of P13,900,000. All of the Option Shares constituting 72.2% of the
outstanding shares, shall be classified as Class A shares and the
balance of the outstanding shares, constituting 27.8% of the
outstanding shares, as Class B shares;(b) To amend the articles of
incorporation of the Bank to effect the following changes:(i)
change of corporate name to First United Coconut Bank;(ii) replace
the present provision restricting the transferability of the shares
with a limitation on ownership by any individual or entity to not
more than 10% of the outstanding shares of the Bank;(iii) provide
that the holders of Class A shares shall not be entitled to
pre-emptive rights with respect to the unissued portion of the
authorized capital stock or any increase thereof; and(iv) provide
that the holders of Class B shares shall be absolutely entitled to
pre-emptive rights, with respect to the unissued portion of Class B
shares comprising part of the authorized capital stock or any
increase thereof, to subscribe to Class B shares in proportion t
the subscriptions of Class A shares, and to pay for their
subscriptions to Class B shares within a period of five (5) years
from the call of the Board of Directors.(c) To increase the
authorized capital stock of the Bank from P50 Million to P140
Million, divided into 1,010,800 Class A shares and 389,200 Class B
shares, each with a par value of P100 per share;(d) To declare a
stock dividend of P8 Million payable to the SELLER, the BUYER and
other stockholders of the Bank out of the present authorized but
unissued capital stock of P30 Million;(e) To amend the by-laws of
the Bank accordingly; and(f) To authorize and approve the
management contract provided in paragraph 2 above.The parties agree
that they shall vote their shares and take all the necessary
corporate action in order to carry into effect the foregoing
provisions of this paragraph 11, including such other amendments of
the articles of incorporation and by-laws of the Bank as are
necessary in order to implement the intention of the parties with
respect thereto.12. It is the contemplation of the parties that the
Bank shall achieve a financial and equity position to be able to
lend to the coconut farmers at preferential rates.In order to
achieve such objective, the parties shall cause the Bank to adopt a
policy of reinvestment, by way of stock dividends, of such
percentage of the profits of the Bank as may be necessary.13. The
parties agree to execute or cause to be executed such documents and
instruments as may be required in order to carry out the intent and
purpose of this Agreement.IN WITNESS WHEREOF x x xPHILIPPINE
COCONUT AUTHORITY(BUYER)EDUARDO COJUANGCO, JR.(SELLER)MARIA CLARA
L. LOBREGAT
By:x x x x7. Defendants Lobregat, et al. and COCOFED, et al. and
Ballares, et al. admit that the x x x (PCA) was the "other buyers"
represented by defendant Eduardo M. Cojuangco, Jr. in the May 1975
Agreement entered into between Pedro Cojuangco (on his own behalf
and in behalf of other sellers listed in Annex "A"of the agreement)
and defendant Eduardo M. Cojuangco, Jr. (on his own behalf and in
behalf of the other buyers). Defendant Cojuangco insists he was the
"only buyer" under the aforesaid Agreement.8. Defendant Eduardo M.
Cojuangco, Jr. did not own any share in the x x x (FUB) prior to
the execution of the two Agreements x x x.9. Defendants Lobregat,
et al., and COCOFED, et al., and Ballares, et al. admit that in
addition to the 137,866 FUB shares of Pedro Cojuangco, et al.
covered by the Agreement, other FUB stockholders sold their shares
to PCA such that the total number of FUB shares purchased by PCA
increased from 137,866 shares to 144,400 shares, the OPTION SHARES
referred to in the Agreement of May 25, 1975. Defendant Cojuangco
did not make said admission as to the said 6,534 shares in excess
of the 137,866 shares covered by the Agreement with Pedro
Cojuangco.10. Defendants Lobregat, et al. and COCOFED, et al. and
Ballares, et al. admit that the Agreement, described in Section 1
of Presidential Decree (P.D.) No. 755 dated July 29, 1975 as the
"Agreement for the Acquisition of a Commercial Bank for the Benefit
of Coconut Farmers" executed by the Philippine Coconut Authority"
and incorporated in Section 1 of P.D. No. 755 by reference, refers
to the "AGREEMENT FOR THE ACQUISITION OF A COMMERCIAL BANK FOR THE
BENEFIT OF THE COCONUT FARMERS OF THE PHILIPPINES" dated May 25,
1975 between defendant Eduardo M. Cojuangco, Jr. and the PCA (Annex
"B" for defendant Cojuangcos OPPOSITION TO PLAINTIFFS MOTION FOR
PARTIAL SUMMARY JUDGMENT RE: EDUARDO M. COJUANGCO, JR. dated
September 18, 2002).Plaintiff refused to make the same
admission.11. As to whether P.D. No. 755 and the text of the
agreement described therein was published, the Court takes judicial
notice that P.D. No. 755 was published in x x x volume 71 of the
Official Gazette but the text of the agreement x x x was not so
published with P.D. No. 755.12. Defendants Lobregat, et al. and
COCOFED, et al. and Ballares, et al. admit that the PCA used public
funds x x x in the total amount of P150 million, to purchase the
FUB shares amounting to 72.2% of the authorized capital stock of
the FUB, although the PCA was later reimbursed from the coconut
levy funds and that the PCA subscription in the increased
capitalization of the FUB, which was later renamed the x x x
(UCPB), came from the said coconut levy funds x x x.13. Pursuant to
the May 25, 1975 Agreement, out of the 72.2% shares of the
authorized and the increased capital stock of the FUB (later UCPB),
entirely paid for by PCA, 64.98% of the shares were placed in the
name of the "PCA for the benefit of the coconut farmers" and 7,22%
were given to defendant Cojuangco. The remaining 27.8% shares of
stock in the FUB which later became the UCPB were not covered by
the two (2) agreements referred to in item no. 6, par. (a) and (b)
above. "There were shares forming part of the aforementioned 64.98%
which were later sold or transferred to non-coconut farmers.14.
Under the May 27, 1975 Agreement, defendant Cojuangcos equity in
the FUB (now UCPB) was ten percent (10%) of the shares of stock
acquired by the PCA for the benefit of the coconut farmers.15. That
the fully paid 95.304 shares of the FUB, later the UCPB, acquired
by defendant x x x Cojuangco, Jr. pursuant to the May 25, 1975
Agreement were paid for by the PCA in accordance with the terms and
conditions provided in the said Agreement. 16. Defendants Lobregat,
et al. and COCOFED, et al. and Ballares, et al. admit that the
affidavits of the coconut farmers (specifically, Exhibit "1-Farmer"
to "70-Farmer") uniformly state that:a. they are coconut farmers
who sold coconut products;b. in the sale thereof, they received
COCOFUND receipts pursuant to R.A. No. 6260;c. they registered the
said COCOFUND receipts; andd. by virtue thereof, and under R.A. No.
6260, P.D. Nos. 755, 961 and 1468, they are allegedly entitled to
the subject UCPB shares.but subject to the following
qualifications:a. there were other coconut farmers who received
UCPB shares although they did not present said COCOFUND receipt
because the PCA distributed the unclaimed UCPB shares not only to
those who already received their UCPB shares in exchange for their
COCOFUND receipts but also to the coconut farmers determined by a
national census conducted pursuant to PCA administrative
issuances;b. there were other affidavits executed by Lobregat,
Eleazar, Ballares and Aldeguer relative to the said distribution of
the unclaimed UCPB shares; andc. the coconut farmers claim the UCPB
shares by virtue of their compliance not only with the laws
mentioned in item (d) above but also with the relevant issuances of
the PCA such as, PCA Administrative Order No. 1, dated August 20,
1975 (Exh. "298-Farmer"); PCA Resolution No. 033-78 dated February
16, 1978.The plaintiff did not make any admission as to the
foregoing qualifications.17. Defendants Lobregat, et al. and
COCOFED, et al. and Ballares, et al. claim that the UCPB shares in
question have legitimately become the private properties of the
1,405,366 coconut farmers solely on the basis of their having
acquired said shares in compliance with R.A. No. 6260, P.D. Nos.
755, 961 and 1468 and the administrative issuances of the PCA cited
above.18. On the other hand, defendant Cojuangco, Jr. claims
ownership of the UCPB shares, which he holds, solely on the basis
of the two Agreements. (Emphasis and words in brackets added.)On
July 11, 2003, the Sandiganbayan issued the assailed PSJ-A, ruling
in favor of the Republic, disposing insofar as pertinent as
follows:21WHEREFORE, in view of the foregoing, we rule as follows:x
x x xC. Re: MOTION FOR PARTIAL SUMMARY JUDGME