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[G.R. Nos. 147062-64.February 26, 2002]
REP. OF THE PHILS., vs. COCOFED, et al. & BALLARES, et al.
EN BANC
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated FEB 26 2002.
G.R. Nos. 147062-64(Republic of the Philippines, represented by the Presidential Commission on Good Government (PCGG) vs. COCOFED, et al., and Ballares, et al., Eduardo M. Cojuangco Jr. and Sandiganbayan (First Division).)
For resolution are two separate Motions for Reconsideration, filed by (A) Eduardo Cojuangco, Jr., dated January 16, 2002, and (B) the other respondents (COCOFED, et al. and Ballares et al.) dated January 18, 2002.
A.Cojuangco insists that his shares were acquired "as compensation for the transfer of his rights over the [sequestered UCPB] shares as well as for performing management services," which entitled him "to receive on e(1) share for every nine (9) shares purchased by the buyers."He adds:"That the UCPB shares were acquired with coconut levy funds may be correct as to the shares of stock of the 'one million farmers' but x x x the UCPB shares of Respondent Cojuangco were paid to him in consideration of his transfer to the Philippine Coconut Authority ('for itself and for the benefit of the coconut farmers of the Philippines') of the First United Bank shares he acquired from the family of Don Jose Cojuangco and for management services rendered to the bank."
In our Decision, we already ruled that "the question of whether the shares held by Respondent Cojuangco are, as he claims, the result of private enterprise, [is] x x x a factual matter that should be taken up in the final decision" in the main case pending in the Sandiganbayan (SB).During the Oral Argument on April 17, 2001 (TSN, p. 115), Cojuangco through counsel admitted that the "entire amount" paid for the sequestered shares had come from the Philippine Coconut Authority, as follows:
"SOLICITOR GENERAL MARCELO:
I will just make my closing statement, Your Honor.Your Honors allow me to close my arguments x x x.
x x x���������������� x x x���������������� x x x
CHIEF JUSTICE:
Thank you, the Court now recognizes Atty. Teresita Herbosa first in the order the names were announced or would you want, So, you will, Atty. Mendoza.You have also 20 minutes.
ATTY. MENDOZA:
May it please Your Honors.I fully appreciate the difficulties of the incumbent Solicitor General but having been Solicitor General, before I extend to him my felicitations short of accommodating the arguments which are not founded in the law x x x.
x x x���������������� x x x���������������� x x x"
"x x xThe First United Bank was organized by Don Jose Cojuangco, Sr., and was the result apparently with some difficulties within the family in regard the Philippine Bank of Commerce, they offered to sell seventy point plus percent which the family owned to Mr. Cojuangco at that time it must be noted that the Central Bank would not issue any license to operate a new bank, so, bank licenses were at a premium.Mr. Cojuangco agreed but then as he has agreed, the coconut farmers thru the PCA offered/asked him to instead sell to them what had been offered to him by the family of Don Jose Cojuangco.After negotiations what resulted were disagreements. The shares of stock of the family was sold to Mr. Cojuangco contemporaneously these were sold by Mr. Cojuangco to Philippine Coconut Authority acting in behalf of the coconut farmers. In the agreement of sale, he was also given a management contract for five years, extendible for another five years. It is true that the entire amount of two hundred pesos per share was paid by the PCA to Mr. Cojuangco which in turn was remitted to the family of Don Jose Cojuangco, Sr., But, I should think that Mr. Cojuangco was entitled to make a profit and that this profit was that he was to get one share for every ten shares.And in order to preserve his equity in the bank in case this capital stock were to be increased all that payment would be made on the unsubscribed capital stock he would be given ten percent, that is all in the contract x x x." [1] cralaw (Bold types supplied)
Whether or not the shares which Mr. Cojuangco claims as his own have legitimately become private property because he "was entitled to make a profit" is a factual matter that is best ruled upon by the SB, after hearing evidence from the parties.This will require not only a theoretical determination of his alleged entitlement to "one out of every nine" shares sold, but also, among others, an identification of the specific shares or shares certificates involved, considering that as admitted by Cojuangco himself, his shares are registered not only in his name personally but also in many other individuals and entities, whose identities are not shown in the records of this case and who/which may be best determined by the court a quo.Any attempt to identify and segregate these shares at this point would not only be contrary to the functions of this Court as an arbiter of legal questions only, but would also pose physical and evidentiary bottlenecks which would undoubtedly delay and even confuse the disposition of the present case.
The other matters raised by Cojuangco - the business performance of the bank, the validity and efficacy of the writ of sequestration, the legality of the purchase of the subject shares, etc - are not germane to the gut issue of "Who may vote the sequestered UCPB shares while the main case for their reversion to the State is pending in the Sandiganbayan."These arguments should be presented at the proper proceedings for the proper reasons at the proper time and in the proper court.For this reason, the "Motion for the Parties to be Furnished Copies of the Executive Summary of UCPB's Financial Condition," dated January 16, 2002, is DENIED. This Executive Summary was not taken up in our Decision.
Finally, Cojuangco asks us to clarify what shares we refer to in that portion of our disposition which reads:"the PCGG shall continue voting the sequestered shares until Sandiganbayan Civil Case Nos. 0033-A, 0033-B and 0033-F are finally and completely resolved."Needless to state, we refer to the sequestered UCPB shares; throughout its length and breath, the entire decision was focused on these shares.It goes without saying, of course, that its ratio - like any other decision of this Court - is a precedent applicable to like cases and causes.
B.We now address the matters raised by the other respondents.
Their primary argument is that in the original sequestration case filed in the Sandiganbayan, there allegedly was no allegation of "an actionable act or acts" against them and the more than "one million coconut farmers" they represent.As such, they are not bound by any decision in that main case.In effect, they are questioning the propriety of their being impleaded in the original case below.Clearly, this is not an issue to be resolved in the present proceedings.It is irrelevant and immaterial.Whether these respondents committed acts for which they can be held liable cannot be determined by this Court at this time in these proceedings.
Besides, respondents have intervened and actively participated in the proceedings below.How, now, can they claim that they are not bound by it?In fact, the present case is rooted in a Motion they filed in the main case below.
Respondents further argue that the Resolution of February 16, 1993 in GR No. 96073 cannot be applied to them for they were not party litigants in that case and thus were not given due notice and an opportunity to be heard in all the proceedings that led to the issuance of said Resolution.We do not agree.
The Court - in its February 16, 1993 Resolution - even traced the antecedents that led to its issuance.We quote the pertinent portions:
"Now, it appears that some months after the promulgation of the judgment in COCOFED v. PCGG, the sequestration of the 'coconut levy companies' [in the footnote, the UCPB shares issued to the more than one million coconut farmers are included] - listed in an annex appended to the complaint filed by the PCGG in the Sandiganbayan Case No. 033 - and of their assets, including the UCPB shares of stock standing in their names, was declared 'automatically lifted' by the Sandiganbayan in a Resolution dated November 15, 1990.
x x x���������������� x x x���������������� x x x
"To annul this Resolution, the PCGG has instituted the present special civil action of certiorari.And it is in this action that the present incident has arisen, essentially involving as aforementioned, the question of whether or not the lifting of the sequestration of the firms had the effect of empowering them, as well as the other persons and entities now holding UCPB stock who had had some connection, directly or indirectly, with coconut levy funds, now to vote at the stockholders' meeting of the bank." [2] cralaw
Clearly, this Resolution of the Court arose as an incident to the main case pending in the Sandiganbayan, wherein said respondents were involved.
Furthermore, we are not here directly applying the subject Resolution of the Court as a "law of the case."Neither have we invoked res judicata.What binds respondents to that Resolution is the precedent that the coconut levy funds are clearly affected with public interest.As decreed by this Court in the present Decision, "that was the truth in 1989 as quoted by this Court in its February 16, 1993 Resolution and so it is today." [3] cralaw The jurisprudential bases for the Resolution are still extant.Verily, this truth has not been reversed or modified in any manner.Our herein Decision, in fact, confirms it.
Respondents then dispute this Court's rhetorical query on why they were claiming their right to vote only now. Their submission is that they filed a First Farmers' Class Action Omnibus Motion dated October 1, 1997, [4] cralaw which is allegedly a proof of their assertion of their right to vote.
Said Motion filed by respondents does not show any positive claim of their right to vote.It merely prayed for the lifting of the orders of sequestration of the PCGG and for the creation of a stockholders committee. [5] cralaw
In fact, during the Oral Arguments in this case, respondents' counsel [6] cralaw herself admitted that they already wanted to demonstrate satisfactorily that the shares have become legitimately private and therefore they decided to go to trial. [7] cralaw Clearly, there is a distinction between trying to prove one's case on the merits and trying to assert one's right to vote in the meantime.As admitted by said counsel, "it is a question of deciding which remedy at that time would be sufficient." [8] cralaw This shows that the Omnibus Motion did not aim to assert their right to vote; rather, they wanted to demonstrate that the shares have become legitimately private.
The ruling of the Court in Baseco [9] cralaw is unequivocal.The right to vote sequestered shares of stock is granted to the government itself in case of a take-over of a business actually belonging to the government or whose capitalization come from public funds but which somehow landed in private hands.
In the present case, we are not talking about shares that are registered in private hands and acquired with ill-gotten wealth.If we were, then indeed, the "two-tiered" test in Cojuangco v. Calpo [10] cralaw and PCGG v. Cojuangco, Jr. [11] cralaw should have been applied.We repeat:the herein sequestered UCPB shares of stock are registered in the names of private individuals and were purchased with public funds or "funds clearly affected with public interest."This fact clearly brings this case within the ambit of Baseco.
Next, respondents urge the Court to rule on the primordial issue of whether the UCPB shares have legitimately become their private property.
This determination can properly be done by the Sandiganbayan in the main case.It must be emphasized that the Court did not make a final statement that these shares are indeed public and belong to the government.To do so would have been to rule on the main case.In the present case, the Court is merely determining the prima facie nature of the funds used to purchase the sequestered shares, only for the purpose of enabling us to rule on the issue of who has the right to vote them in the meantime.That should be clear enough.
In sum, the two Motions for Reconsideration have not presented any compelling, convincing or substantial arguments for us to modify or change, much less reverse, our Decision, which we have reached after several months of careful deliberation and purposeful discussion in which all the relevant arguments presented have been fully and completely taken up.Indeed, this litigation must come to a definitive end now.
WHEREFORE , the Motions for Reconsideration are DENIED for lack of merit.This denial is FINAL.(Justice Melo, joined by Justices Kapunan, Santiago and Gutierrez, reiterates his Dissent while Justice Vitug, joined by Justice Puno, repeats his Separate Opinion in the main case.)
Very truly yours,
(Sgd.) LUZVIMINDA D. PUNO
Clerk of Court
Endnotes:
[1] cralaw Transcript of Oral Arguments, April 17, 2001, pp. 108, 110, 114-115.
[2] cralaw GR No. 96073, February 16, 1993.
[3] cralaw Republic v. COCOFED, et al., GR Nos. 147062-64, December 14, 2001.
[4] cralaw Rollo, Vol. III, pp. 1780-1812.
[5] cralaw Ibid., pp. 1807-1810.
[6] cralaw Atty. Teresita J. Herbosa.
[7] cralaw Transcript of Oral Arguments, April 17, 2001, p. 203.
[8] cralaw Ibid., p. 204.
[9] cralaw 150 SCRA 181, L-75885, May 27, 1987.
[10] cralaw GR No. 115352, June 10, 1993.
[11] cralaw 302 SCRA 217, GR No. 133197, January 27, 1999.
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