Gaston vs.

Republic Planters Bank

Sugar producers and planters seek ownership of shares in a bank funded by

stabilization fees, but the court rules that the fees are government funds and the shares
belong to the government, not the sugar producers.

Facts:
 Petitioners: sugar producers, sugarcane planters, and millers
 Respondents: Republic Planters Bank (the Bank), Philippine Sugar Commission
(PHILSUCOM), and the Philippine Sugar Commission
 Intervenors: Angel H. Severino, Jr., et al. (sugarcane planters), National
Federation of Sugar Planters (NFSP)
 Petitioners sought to transfer shares of stock in the Bank from PHILSUCOM to
their ownership
 Shares were funded by stabilization fees collected from sugar proceeds
 Petitioners argued that they should be the true beneficial owners of the shares
Issue:
 Whether the stabilization fees collected from sugar planters and millers should be
transferred to the ownership of the sugar producers
Ruling:
 The Court denied the petition for a Writ of Mandamus
 The stabilization fees collected are considered government funds
 The shares of stock in the Bank belong to the government, not the sugar
producers
Ratio:
 The stabilization fees collected are in the nature of a tax imposed by the State for
the promotion of the sugar industry
 The fees constitute sugar liens and are collected for the purpose of financing the
growth and development of the industry and stabilizing the domestic and foreign
markets
 The funds collected from the stabilization fees are considered government funds
and are to be administered in trust by PHILSUCOM
 The shares of stock in the Bank, purchased using these funds, are held by
PHILSUCOM for the benefit of the entire sugar industry, not just the individual
sugar producers
 Revenues derived from taxes cannot be used for purely private purposes or for
the exclusive benefit of private persons
 The shares of stock in the Bank belong to the government and not the sugar
producers
 The petitioners' claim as the true beneficial owners of the shares is rejected
 The petition is dismissed and the Writ of Mandamus is denied.