Request for Opinion on COCOFED Benefit Claims

DOJ OPINION NO. 028 , s. 2012 May 8, 2012 Mr. Antonio C. Balbalosa 8250 Lennox Avenue #3 Panorama City, CA 91402 United States of America Dear Mr. Balbalosa : This has reference to your request for opinion with respect to the following issues: (i) whether the contention of the local COCOFED office that the heirs of Tomas Balbalosa, Sr. has no more claims from COCOFED in view of their receipt of burial expense in the amount of PHP10,000 is correct; and (ii) whether the benefits of a COCOFED member are extinguished by his death. It appears that your father, Tomas Balbalosa, Sr., was a small coconut farmer in the Municipality of Magallanes, Province of Sorsogon. He was a member of the COCOFED and contributed to the coconut levy fund for which he was "issued papers that looked like share (sic) of stocks as evidence of his membership with COCOFED". 1 Upon his death, COCOFED sent the amount of Php10,000.00 for burial expense. You further claim that you were advised by the local COCOFED office that you no longer have claims against it in view of the burial expense paid on your father's death. Hence, the request. With regret, this Department has to decline rendition of the opinion requested. DCcSHE Pursuant to law and precedents, the Secretary of Justice, as Attorney-General, renders opinions or gives legal advice only for and upon request of national government functionaries such as heads of departments or chiefs of bureaus and offices of equivalent rank and only on questions of law arising from the performance of their respective powers and duties. For this reason, she has, in practice, consistently declined to render opinion or give legal advice to other government officials and to private individuals and entities. 2 (Emphasis supplied) Nevertheless, for your information and guidance only, we invite your attention to the following information, provisions of the Civil Code of the Philippines and jurisprudence: COCOFED formed several programs, one of which is the life insurance program. In the implementation of the said program, COCOFED gave life insurance policies to its members. The heirs/beneficiaries of deceased COCOFED members who received an insurance policy from United Coconut Planters Life Assurance Corporation (COCOLIFE) are entitled to the proceeds of the life insurance policy. To confirm whether a member has been granted an insurance policy, it is suggested that the same be verified from the insurance department of COCOFED or COCOLIFE. Further, shares of stocks are personal properties which are not extinguished by the death of the owner thereof. This is supported by Articles 776 and 777 of the Civil Code of the Philippines which provide: "Art. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death. "Art. 777. The rights to the succession are transmitted from the moment of the death of the decedent." Lastly, it should be noted that in a decision recently rendered by the Supreme Court in the cases of COCOFED v. Republic 3 and Urusa v. Republic , 4 the High Court reiterated that: "The coconut levy funds are in the nature of taxes and can only be used for public purpose. Consequently, they cannot be used to purchase shares of stocks to be given for free to private individuals." Further, in the same case, the High Court eloquently pronounced: "We have ruled time and again that taxes are imposed only for a public purpose. 'They cannot be used for purely private purposes or for the exclusive benefit of private persons.' When a law imposes taxes or levies from the public, with the intent to give undue benefit or advantage to private persons, or the promotion of private enterprises, that law cannot be said to satisfy the requirement of public purpose. xxx xxx xxx "Similarly in this case, the coconut levy funds were sourced from forced exactions decreed under P.D. Nos. 232, 276 and 582, among others, with the end-goal of developing the entire coconut industry. Clearly, to hold therefore, even by law, that the revenues received from the imposition of the coconut levies be used purely for private purposes to be owned by private individuals in their private capacity and for their benefit, would contravene the rationale behind the imposition of taxes or levies . ScCDET "Needless to stress, courts do not, as they cannot, allow by judicial fiat the conversion of special funds into a private fund for the benefit of private individuals. In the same vein, We cannot subscribe to the idea of what appears to be an indirect if not exactly direct conversion of special funds into private funds, i.e. , by using special funds to purchase shares of stocks, which in turn would be distributed for free to private individuals. Even if these private individuals belong to, or are a part of the coconut industry, the free distribution of shares of stocks purchased with special public funds to them, nevertheless cannot be justified." (Emphasis supplied) Citing COCOFED v. Republic , n the Court also reiterated that " the coconut levy funds are not only affected with public interest but are peremptorily determined to be prima facie public funds " and further ruled that: "In sum, not only were the challenged presidential issuances unconstitutional for decreeing the distribution of the shares of stock for free to the coconut farmers and, therefore, negating the public purpose declared by PD 276 , i.e. ,to stabilize the price of edible oil and to protect the coconut industry. They likewise reclassified, nay treated, the coconut levy fund as private fund to be disbursed and/or invested for the benefit of private individuals in their private capacities, contrary to the original purpose for which the fund was created ...." (Emphasis supplied) Please be guided accordingly. Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. Second paragraph of the letter-request dated April 4, 2012. 2. Secretary of Justice Opinion No. 6, current series; Nos. 70, 44 & 20, s. 2009. 3. G.R. Nos. 177857-58. 4. G.R. No. 178193. n Note from the Publisher: Written as "Republic v. COCOFED" in the official document.