Philippine Coconut v.

Republic- 663 SCRA 514 [2012]

FACTS: The declaration of martial law in September 1972 saw the issuance of several presidential decrees (P.s.!" purportedl#
desi$ned to improve the coconut industr# throu$h the collection and use of the coconut lev# fund particularl# P.D. Nos. 755, 961
and 1468. %har$ed with the dut# of collectin$ and administerin$ the &und was P%'. (ater) P%' entered into an Agreement for
the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers of the Philippines. *nder para$raph + of the second
a$reement) P%' a$reed to e,peditiousl# distribute the &*- (First United Bank) shares purchased to such coconut farmers
holding registered COCOFUND receipts! on e.uitable basis.
Then came the 19+/ 0S' event. 1ne of the priorities of then President %ora2on %. '.uino3s revolutionar# $overnment was the
recover# of ill4$otten wealth reportedl# amassed b# the 5arcos famil# and close relatives) their nominees and associates.
The P%66 instituted before the Sandi$anba#an a recover# suit a$ainst petitioners. 's found b# the Sandi$anba#an) the P%'
appropriated) out of its own fund) an amount for the purchase. Petitioners %1%1&0 et al. and *rsua uniforml# scored the
Sandi$anba#an for abusin$ its power of 7udicial review and wron$l# encroachin$ into the e,clusive domain of %on$ress when it
declared certain provisions of the coconut lev# laws and P%' administrative issuances as unconstitutional.
SSU!: 8hether the coconut farmers ma# own the coconut lev# fund which was reclassified into "ri#ate $%nd t&ro%'& P.D.
Nos. 755, 961 and 1468.
(!)D* N+. T&e ,o,on%t -e#. $%nds are in t&e nat%re o$ ta/es and ,an on-. 0e %sed $or "%0-i, "%r"ose. Conse1%ent-.,
t&e. ,annot 0e %sed to "%r,&ase s&ares o$ sto,ks to 0e 'i#en $or $ree to "ri#ate indi#id%a-s. 9eedless to stress) courts do
not) as the# cannot) allow b# 7udicial fiat the conversion of special funds into a private fund for the benefit of private individuals.
To recapitulate) 'rticle :;) Section 29 (<" of the 19+7 %onstitution) restatin$ a $eneral principle on ta,ation) en7oins the
disbursement of a special fund in accordance with the special purpose for which it was collected) t&e 0a-an,e) if there be an#)
a$ter t&e "%r"ose &as 0een $%-$i--ed or is no -on'er $ort&,o2in', to 0e trans$erred to t&e 'enera- $%nds o$ t&e
'o#ern2ent. ;f onl# to stress the point) P.. 9o. 12<= e,pressl# stated that coconut levies are special funds to be remitted to the
Treasur# in the 6eneral &und of the State) but treated as Special 'ccounts.