Philippine Coconut Producers Federation, Inc. v. Sandiganbayan First Division

EN BANC

[G.R. No. 93694. April 24, 2012.]

PHILIPPINE COCONUT PRODUCERS FEDERATION, INC. [COCOFED],COCONUT INVESTMENT COMPANY [CIC],COCOFED MARKETING CORPORATION [COCOMARK],MARIA CLARA L. LOBREGAT, BIENVENIDO MARQUEZ, JOSE R. ELEAZAR, JR.,DOMINGO ESPINA, JOSE GOMEZ, CELESTINO SABATE, MANUEL DEL ROSARIO, ET AL., petitioners,v.HONORABLE SANDIGANBAYAN FIRST DIVISION, REPUBLIC OF THE PHILIPPINES AND PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court en banc issued a Resolution dated APRIL 24, 2012,which reads as follows:

"G.R. No. 93694(Philippine Coconut Producers Federation, Inc. [COCOFED],Coconut Investment Company [CIC],COCOFED Marketing Corporation [COCOMARK],Maria Clara L. Lobregat, Bienvenido Marquez, Jose R. Eleazar, Jr.,Domingo Espina, Jose Gomez, Celestino Sabate, Manuel Del Rosario, et al. v. Honorable Sandiganbayan First Division, Republic of the Philippines and Presidential Commission on Good Government).

RESOLUTION

This Petition for Certiorari under Rule 65 seeks the annulment of the March 8, 1988 Resolution, 1 June 20, 1989 Resolution 2 and June 15, 1990 Order 3 of the Sandiganbayan in Civil Case No. (CC) 0033 entitled Republic of the Philippines v. Eduardo Cojuangco, et al.

In the assailed March 8, 1988 Resolution, the Sandiganbayan denied the Motion for Reconsideration filed by Maria Clara L. Lobgregat, et al. of the open court Order of the Sandiganbayan denying their request to present evidence on certain issues in their earlier Motion to Dismiss dated October 5, 1988.

In the June 20, 1989 Resolution, the Sandiganbayan denied the Motion to Dismiss dated October 5, 1988 filed by the defendants in CC 0033.

While in the June 15, 1990 Order, the Sandiganbayan ruled that the Board of Directors appointed by the Presidential Commission on Good Government (PCGG) shall operate the Philippine Coconut Producers Federation, Inc. (COCOFED). ITECSH

The Facts

Congress enacted, in 1971, Republic Act No. (RA) 6260, otherwise known as the Coconut Investment Act, creating the Coconut Investment Corporation (CIC) for the declared national policy of accelerating the development of the coconut industry through the provision of adequate medium-and long-term financing for capital investment in the industry. To finance the CIC, RA 6260 also created the Coconut Investment Fund (CIF) that was to be funded with collections from a levy on the sale of copra. A portion of the funds would be placed at the disposition of COCOFED, the national association of coconut producers with the largest membership as recognized by the Philippine Coconut Administration, "for the maintenance and operation of its principal office which shall be responsible for continuing liaison with the different sectors of the industries, the government and its own mass base." 4

Thereafter, in 1973, former President Ferdinand Marcos issued Presidential Decree No. (PD) 276 creating the Coconut Consumers Stabilization Fund (CCSF) which imposed an additional levy on the sale of copra. The fund was intended to be utilized to subsidize the sale of coconut-based products at prices set by the Price Control Council.

In 1974, President Marcos then issued PD 582 which imposed another levy on the sale of copra to fund the Coconut Industry Development Fund purported to finance the establishment of a hybrid coconut seednut farm for the development of early-breeding and high-yielding hybrid variety of coconut trees.

Then, in 1978, President Marcos issued PD 1468 or the Revised Coconut Industry Code which created the Philippine Coconut Authority (PCA) and empowered it to impose the CCSF levy on the sale of copra and to be utilized for, among others, "[financing] the developmental and operating expenses of the Philippine Coconut Producers Federation including projects such as scholarships for the benefit of deserving children of the coconut farmers." 5

After the EDSA Revolution, on February 28, 1986, former President Corazon Aquino issued Executive Order No. 1 creating the PCGG with the singular task of recovering ill-gotten wealth accumulated by President Marcos whether directly or indirectly. Through Executive Order No. 14 dated May 7, 1986, President Aquino vested exclusive jurisdiction over ill-gotten wealth cases with the Sandiganbayan.

Thus, on July 8, 1986, the PCGG issued sequestration orders over the shares of stocks of COCOFED, while issuing freeze orders over its bank accounts. Freeze orders were also issued against the bank accounts of COCOFED President Maria Clara Lobregat, and COCOFED Directors Inaki Mendezona and Eladio Chatto.

Thereafter, on July 31, 1987, PCGG instituted an action for reconveyance before the Sandiganbayan, docketed as CC 0033, against Eduardo Cojuangco, Jr. and several other individuals, among them, Ma. Clara Lobregat (Lobregat),and Danilo Ursua (Ursua),who, at one time or another, occupied top management positions in either the COCOFED or the PCA, or both. The case revolved around the provisional take-over by the PCGG of COCOFED and its assets, and the sequestration of shares of stock in United Coconut Planters Bank (UCPB) purportedly issued to and/or owned by over a million coconut farmers, Cojuangco, the six (6) Coconut Industry Investment Fund (CIIF) corporations 6 and the fourteen (14) CIIF holding companies 7 (hereafter collectively called "CIIF companies").These CIIF companies are so called for having been organized and/or acquired as UCPB subsidiaries with the use of the CIIF levy.

The original complaint was later amended and entitled Amended Complaint [Expanded per Court-approved Plaintiff's Manifestation/Motion dated December 8, 1987] dated October 2, 1987.

Then, Lobregat, et al. filed a Motion to Dismiss dated October 5, 1988 8 on the following grounds: cHaADC

I. The Court has not acquired jurisdiction over the person of the movants and the subject matter of the action.

II. Plaintiff has no cause of action because the different investments acquired and/or organized with part of the proceeds of the so-called coconut levy were all made pursuant to law and are owned, in law and in fact, by the coconut farmers.

III. This Court has no jurisdiction over the subject matter of the suit insofar as the COCOFED, UCPB, UNICOM, COCOMARK, COCOLIFE, CIC and CIIF investments are sought to be forfeited for the reason that the coconut farmers who are the lawful owners of those investments, are not included as party defendants.

IV. The PCGG Charter constitutes discriminatory legislation violative of the equal protection clause of the 1987 Constitution.

V. The PCGG Charter is unconstitutional for being a bill of attainder. It is likewise void for being an ex-post facto law.

VI. Movants were denied due process of law in that no preliminary investigation was conducted by the authorized government agency. (Emphasis supplied.)

On the heels of the motion, Lobregat, et al. then filed a Motion for Leave to Present Evidence on their Motion to Dismiss. The Sandiganbayan denied this Motion for Leave in open court during the hearing on January 27, 1989. Lobregat, et al. moved for a reconsideration of the open court denial of their motion for leave to present evidence. Thus, the Sandiganbayan issued the first assailed Resolution dated March 6, 1989 9 and promulgated on March 8, 1989, denying the motion for reconsideration on the ground that no factual issue was raised in the Motion to Dismiss that would require the presentation of evidence.

On the other hand, the Sandiganbayan issued the second assailed Resolution dated June 20, 1989 10 denying Lobregat, et al.'s Motion to Dismiss.

Concurrently, on June 7, 1990, the PCGG issued a memorandum stating that, pursuant to the Decision dated October 29, 1989 11 promulgated by the Court in G.R. No. 75713 entitled Philippine Coconut Producers Federation, Inc.,(COCOFED) v. Presidential Commission on Good Government 12(COCOFED v. PCGG), it was appointing the Executive Committee, Directors of the National Board and Regional Directors of COCOFED. This prompted COCOFED to query the Sandiganbayan as to the validity of such memorandum and ask for a temporary restraining order to stop the PCGG from implementing the memorandum. For ease of reference, G.R. No. 75713, a petition for certiorari with preliminary injunction, sought to nullify the sequestration and other orders issued by the PCGG against COCOFED and other enterprises, culminated in the dismissal of said petition. However, in the assailed Order dated June 15, 1990, the Sandiganbayan ruled that the PCGG-designated board of directors shall operate COCOFED, stating: SCADIT

Upon verbal inquiry by Atty. Manuel Laserna, Jr. as to which board should be recognized in the interim until a resolution of the matter pending before this Court, the Court is of the view and so hold that those designated by the PCGG as of June 11, 1983 (sic),in the afternoon, will be the operating board of the COCOFED. As earlier stated, this recognition by this Court is without prejudice to any other act or acts which the parties might wish to refer to this Court and which this Court will respond to at the interim.

Aggrieved, COCOFED and others who claimed to have been prejudiced by the designation of the board of directors issued by the PCGG interposed the instant petition to challenge said PCGG appointments.

The PCGG discovered later that the sequestered properties involved in the case were registered in the name of the corporate-owners and not in the name of the individual defendants; thus, there was a need to further amend the complaint pursuant to Section 26, Article XVIII of the Constitution. Under this constitutional provision, failure to include corporate defendants which own the sequestered properties would result in the automatic lifting of the writs of sequestration. Thus, 78 corporate defendants were included in the newly amended complaint entitled Third Amended Complaint [Expanded per Court-approved Plaintiff's Manifestation/Motion dated December 8, 1987] dated August 19, 1991. COCOFED was then included as a party defendant.

In 1995, during the pendency of the instant petition, the Republic moved for the subdivision of CC 0033 into separate trials on the various sequestered assets, attaching the corresponding amended complaints. On March 24, 1999, the Sandiganbayan issued a Resolution granting the Republic's motion and subdividing CC 0033 into eight (8) separate complaints on the various subject matters, as follows:

Subdivided Complaint	Subject Matter
1.	Civil Case No. 0033-A	Anomalous Purchase and Use of First United Bank (now United Coconut Planters Bank)
2.	Civil Case No. 0033-B	Creation of Companies Out of Coco Levy Funds
3.	Civil Case No. 0033-C	Creation and Operation of Bugsuk Project and Award of P998 Million Damages to Agricultural Investors, Inc.
4.	Civil Case No. 0033-D	Disadvantageous Purchases and Settlement of the Accounts of Oil Mills Out of Coco Levy Funds
5.	Civil Case No. 0033-E	Unlawful Disbursement and Dissipation of Coco Levy Funds
6.	Civil Case No. 0033-F	Acquisition of SMC shares of stock
7.	Civil Case No. 0033-G	Acquisition of Pepsi-Cola
8.	Civil Case No. 0033-H	Behest Loans and Contracts 13

In the Third Amended Complaint (Subdivided) dated February 28, 1995 filed in CC 0033-B, it is alleged that: DAEaTS

15. Defendant Eduardo M. Cojuangco, Jr.,taking undue advantage of his association, influence, connection and acting in unlawful concert with Defendants Ferdinand E. Marcos and Imelda R. Marcos, and the individual defendants, embarked upon devices, schemes and stratagems, including the use of defendant corporations as fronts, to unjustly enrich themselves at the expense of Plaintiff and the Filipino people, such as when he —

Created and/or funded with the use of coconut levy funds, various corporations, such as the Philippine Coconut Producers Federation, Inc. (COCOFED),Coconut Investment Company (CIC),COCOFED Marketing Corporation (COCOMARK) and United Coconut Planters Life Assurance Corporation (COCOLIFE),with the active collaboration and participation of Defendants Juan Ponce Enrile, Maria Clara Lobregat, Rolando dela Cuesta, Jose R. Eleazar, Jr.,Jose Reynaldo Morente, Eladio Chatto, Domingo Espina, Anastacio Emano, Sr.,Bienvenido Marquez, Jose Gomez, Inaki Mendezona, Manuel del Rosario, Sulpicio Granada and Jose Martinez, Jr.,Emmanuel Almeda, Danilo Ursua, Hermenigildo Zayco and Celestino Zabate, most of whom compromised the interlocking officers and directors of said companies; dissipated, misused and/or misappropriated a substantial part of said coco levy funds and allowances, bonuses and other emoluments, for their own personal benefits, including huge cash advances in millions of pesos which, to date remain unliquidated and unaccounted for to the prejudice of plaintiff and the Filipino people,finally gained ownership and control of the United Coconut Planters Bank by misusing the names and/or identities of the so-called "more than one million coconut farmers." (Emphasis supplied.)

In response, Lobregat, et al. filed an Ex Abundanti Cautela Answer with Compulsory Counterclaims to the Third Amended Complaint [Re: Creation of Companies out of Coco Levy Funds] dated June 7, 1999.

To date, CC 0033-B remains pending with the Sandiganbayan.

The Issues

GROUNDS IN SUPPORT OF THIS PETITION

A. The series of acts and omissions of respondent Honorable Sandiganbayan in Civil Case No. 0033 culminating in the Order of 15 June 1990 are without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction.

1. The refusal of Respondent Honorable Sandiganbayan Court to receive petitioners' evidence is a whimsical and capricious evasion of a positive duty under the law and particularly enjoined in this Honorable Court's Decision in G.R. No. 75713.

2. The inaction of Respondent Honorable Sandiganbayan on the Class Action Omnibus Motion serves to perpetuate the unlawful acts of respondent PCGG.

3. The failure of Respondent Honorable Sandiganbayan to afford Petitioners speedy justice is tainted with such unfairness and arbitrariness as to amount to a lack or excess of jurisdiction. 14

The Court's Ruling

This petition must be dismissed.

Superseding events have rendered

In Mendoza v. Villas,15 the Court explained the concept of mootness, citing Gunsi, Sr. v. Commissioners:16

In Gunsi, Sr. v. Commissioners, The Commission on Elections,the Court defined a moot and academic case as follows: cEAIHa

A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical value. As a rule, courts decline jurisdiction over such case, or dismiss it on ground of mootness.

Sec. 8, Rule 10 of the Rules of Court specifically provides for the effect of the amendment of pleadings, to wit:

Section 8. Effect of amended pleadings. — An amended pleading supersedes the pleading that it amends. However, admissions in superseded pleadings may be received in evidence against the pleader, and claims or defenses alleged therein not incorporated in the amended pleading shall be deemed waived.

Thus, the Court considered the issue of whether an original complaint should have been dismissed for having become moot with the admission of an amended complaint in Lu v. Lu Ym, Sr.17 The Court ruled in this wise:

With the issue of admission of the amended complaint resolved, the question of whether or not the original complaint should have been dismissed was mooted. Section 8, Rule 10 of the Rules of Court specifically provides that an amended pleading supersedes the pleading that it amends. In this case, the original complaint was deemed withdrawn from the records upon the admission of the amended complaint. This conclusion becomes even more pronounced in that the RTC already rendered a decision on the merits of the said amended complaint, not to mention the Lu Ym father and sons' concurrence in the mootness of the issue in the instant petition. (Emphasis supplied.)

Evidently, with the admission of the subdivided complaints in the instant case, the original complaint in CC 0033 is deemed withdrawn from the records, such that CC 0033 no longer exists. Correlatively, the issues pending in CC 0033 must be likewise considered moot and academic.

In particular, the issues raised in the instant case relating to the presentation of evidence were already raised in Philippine Coconut Producers Federation, Inc. v. Republic of the Philippines:18

COCOFED et al.,in G.R. Nos. 177857-58, impute reversible error on the Sandiganbayan for (a) assuming jurisdiction over CC Nos. 0033-A and 0033-F despite the Republic's failure to establish below the jurisdictional facts, i.e., that the sequestered assets sought to be recovered are ill-gotten in the context of E.O. Nos. 1, 2, 14 and 14-A; (b) declaring certain provisions of coco levy issuances unconstitutional; and (c) denying the petitioners' plea to prove that the sequestered assets belong to coconut farmers. Specifically, petitioners aver: aATEDS

xxx xxx xxx

III. In rendering the assailed PSJs and thereafter refusing to proceed to trial on the merits, on the mere say-so of the respondent Republic, the Sandiganbayan committed gross and irreversible error, gravely abused its judicial discretion and flagrantly exceeded its jurisdiction as it effectively sanctioned the taking of COCOFED, et al.'s property by the respondent Republic without due process of law and through retroactive application of the declaration of unconstitutionality of the coconut levy laws, an act that is not only illegal and violative of the settled Operative Fact Doctrine but, more importantly, inequitable to the coconut farmers whose only possible mistake, offense or misfortune was to follow the law.

A.

1. In the course of the almost twenty (20) years that the ill-gotten wealth cases were pending, COCOFED, et al. repeatedly asked to be allowed to present evidence to prove that the true, actual and beneficial owners of the sequestered assets are the coconut farmers and not Cojuangco, an alleged "crony" of former President Marcos. The Sandiganbayan grievously erred and clearly abused its judicial discretion when it repeatedly and continuously denied COCOFED, et al. the opportunity to present their evidence to disprove the baseless allegations of the Ill-Gotten Wealth Cases that the sequestered assets constitute ill-gotten wealth of Cojuangco and of former President Marcos, an error that undeniably and illegally deprived COCOFED, et al. of their constitutional right to be heard.

xxx xxx xxx

IV. The voluminous records of these ill-gotten wealth cases readily reveal the various dilatory tactics respondent Republic resorted to ....As a result, despite the lapse of almost twenty (20) years of litigation, the respondent Republic has not been required to, and has not even attempted to prove, the bases of its perjurious claim that the sequestered assets constitute ill-gotten wealth of former President Marcos and his crony, Cojuangco. In tolerating respondent Republic's antics for almost twenty (20) years ..., the Sandiganbayan so glaringly departed from procedure and thereby flagrantly violated COCOFED, et al.'s right to speedy trial. (Emphasis supplied.)

It bears noting that the Court has already rendered a Decision in Philippine Coconut Producers Federation, Inc. v. Republic of the Philippines,albeit not yet final and executory. In fine, the Court has already passed upon the same issues raised in the instant petition. There is no need to reexamine and dispose of them in this recourse.

To reiterate, there is no practical value in ruling on the issues raised in the case by virtue of the withdrawal of the original complaint and the non-existence of CC 0033. The instant case must, therefore, be considered moot and academic.

WHEREFORE,the instant petition is DISMISSED for being moot and academic.

No costs." Carpio, Leonardo-de Castro and Peralta, JJ.,no part. (adv36)

Very truly yours,

(SGD.) ENRIQUETA E. VIDALClerk of Court

 

Footnotes

1.Rollo,pp. 163-170. Penned by Presiding Justice Francis E. Garchitorena and concurred in by Associate Justices Regino Hermosisima, Jr. and Augusto M. Amores; Resolution should be March 8, 1989.

2.Id. at 171-188.

3.Id. at 58.

4.RA 6260, Sec. 9.

5.PD 1468, Art. III, Sec. 2 (c).

6.Southern Luzon Coconut Oil Mills, Cagayan de Oro Oil Co. Inc.,Iligan Coconut Industries, San Pablo Manufacturing Corp.,Granexport Manufacturing Corp.,& Legaspi Oil Co.,Inc.

7.Composed of Soriano Shares, ASC Investors, ARC Investors, Roxas Shares, Toda Holdings, AP Holdings, Fernandez Holdings, SMC Officers Corps.,Te Deum Resources, and Anglo Ventures, Randy Allied Ventures, Rock Steel Resources, Valhalla Properties Ltd.,and First Meridian Development, all names ending with the suffix Corp. or Inc.

8.Rollo,pp. 171-172.

9.Id. at 163-170.

10.Id. at 171-188.

11.Should be October 2, 1989.

12.178 SCRA 236.

13.Republic v. Sandiganbayan (First Division),G.R. No. 166859, April 12, 2011, 648 SCRA 47, 86-87.

14.Rollo,pp. 32-33.

15.G.R. No. 187256, February 23, 2011, 644 SCRA 347, 356-357.

16.G.R. No. 168792, February 23, 2009, 580 SCRA 70, 76.

17.G.R. No. 153690, August 26, 2008, 563 SCRA 254, 270.

18.G.R. Nos. 177857-58, January 24, 2012.