G.R. No. 133197.

January 27, 1999

PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT (PCGG), petitioner, vs. EDUARDO
COJUANGCO, JR., et al., respondents
Facts:
PCGG was created by Executive Order (EO)No. 1 to
assist the President in the recovery of the ill-gotten
wealth thus accumulated whether located in the
Philippines or abroad. Thereafter, EO No. 2 has been
issued which states that the ill-gotten assets and
properties are in the form of bank accounts,
deposits, trust accounts, shares of stocks, buildings,
shopping centers, condominiums, mansions,
residences, estates, and other kinds of real and
personal properties in the Philippines and in various
countries of the world. Consequently, EO No. 14,
empowered the PCGG, with the assistance of the
Office of the Solicitor General and other government
agencies, inter alia, to file and prosecute all cases
investigated by it under EO Nos. 1 and 2.
Among the properties sequestered by the PCGG
were shares of stock in the United Coconut Planters
Bank (UCPB) registered in the names, among others,
Private Respondent Eduardo Cojuangco Jr.
(hereinafter "Cojuangco")
Respondent Sandiganbayan, through an Order,
enjoined PCGG from voting the sequestered shares
of stock in UCPB.
Issue:
a. Whether PCGG is entitled to vote with respect to
the subject sequestered shares of stock in UCPB
which were purchased with coconut levy funds.
b. Whether coconut levy funds are possessed of the
characteristics of taxes.
Ruling:
a. In determining whether the PCGG should be
allowed to vote sequestered shares, it is imperative
to satisfy the “public character” test. The
sequestered stocks are acquired with funds that are
prima facie public in character or, at least, are
affected with public interest. Since the subject UCPB
shares in the present case were clearly acquired with
coco levy funds which are public in character, then
the right to vote them shall be exercised by the
PCGG. Categorically, coconut levy funds are in fact,
public funds. Public funds are those moneys
belonging to the State or to any political subdivision
of the State; more specifically, taxes, customs duties
and moneys raised by operation of law for the
support of the government or for the discharge of its
obligations
b. Coconut levy funds partake the nature of taxes
which, in general, are enforced proportional
contributions from persons and properties, exacted
by the State by virtue of its sovereignty for the
support of government and for all public needs.
Taxation is done not merely to raise revenues to
support the government, but also to provide means
for the rehabilitation and the stabilization of a
threatened industry, which is so affected with public
interest as to be within the police power of the State.
Even if the money is allocated for a special purpose
and raised by special means, it is still public in
character. Coconut industry is one of the major
industries supporting the national economy. It is,
therefore, the State's concern to make it a strong and
secure source of livelihood of a significant segment
of the population and export earnings the sustained
growth of which is one of the imperatives of
economic stability.