Facts

• R.A. No. 6260 (1971) created the Coconut Investment Fund from "a PhP 0.55 levy on the sale of every 100 kg. of copra." Martial-law decrees followed — P.D. No. 276 (CCSF), P.D. No. 582 (CIDF), and P.D. No. 755, authorising the PCA "to utilize the CCSF and the CIDF collections to acquire a commercial bank" and to distribute its shares "for free" to coconut farmers.
• The levies "organized, capitalized and/or financed" the 6 CIIF Oil Mills, whose wholly-owned subsidiaries were the 14 holding companies, whose assets produced the CIIF block of SMC shares — "simply the fruits of the coconut levy funds acquired at the expense of the coconut industry."
• The Sandiganbayan in Civil Case No. 0033-F held the CIIF companies and the CIIF block of SMC shares "public funds necessarily owned by the Government," and on January 24, 2012 this Court in COCOFED v. Republic affirmed, modifying so that "[t]hese shares shall belong to the Government, which shall be used only for the benefit of the coconut farmers." On November 27, 2012, in G.R. No. 180705, it nullified the transfer of shares to Eduardo M. Cojuangco, Jr., the levies "partak[ing] of the nature of taxes" and being unusable "to benefit — whether directly or indirectly — private individuals."
• Thereafter UCPB and COCOLIFE filed petitions for declaratory relief in the RTC of Makati City — Civil Case Nos. 12-1251 and 12-1252. These are civil petitions; the case sits under this subtopic because E.O. No. 14§ gives the Sandiganbayan exclusive jurisdiction over PCGG cases "whether civil or criminal."
• The PCGG moved to dismiss for lack of jurisdiction over the subject matter. Judge Winlove M. Dumayas denied the motion on April 29, 2013; an Omnibus Order of May 15, 2013 denied it in the second case; and reconsideration was denied on June 28 and December 4, 2013.
• The PCGG brought consolidated petitions, decided En Banc on August 11, 2015.

Issue

Ruling

"WHEREFORE, the petitions are GRANTED. The Orders dated April 29, 2013 and June 28, 2013 in Civil Case No. 12-1251; and Omnibus Order dated May 15, 2013 (Branch 138) and Order dated December 4, 2013 … are hereby ANNULLED and SET ASIDE. The petitions in Civil Case Nos. 12-1251 and 12-1252 filed by UCPB and COCOLIFE, respectively, are DISMISSED. No pronouncement as to costs. SO ORDERED."

Ratio

• The Court opens on finality, which frames the whole disposition: "every litigation must come to an end … once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the verdict," and names the stake — "about three million poor farmers who have long waited to benefit from the outcome of the 27-year battle."
• The constitutional status of the interim issuances is established — the step that makes E.O. No. 14§ operative as law — and its two operative sections quoted.
• Continuity with the modern charter is confirmed by the reference to R.A. Nos. 7975 and 8249. This is the link to §4(c), the head that Disini applies on the criminal side.
• The test is subject matter, not the label of the action: "[t]he benchmark is whether said … shares are alleged to be ill-gotten wealth."
• Sequestration supplies an independent reason: it is "a provisional remedy or freeze order issued by the PCGG designed to prevent the disposal and dissipation of ill-gotten wealth," placing property "under [PCGG's] possession or control … until it can be determined, through appropriate judicial proceedings, whether the property was in truth ill-gotten" (Silverio v. PCGG). Any outcome below "would directly militate on PCGG's control and management … and consequently hamper or interfere with its mandate to recover ill-gotten wealth."
• A policy against fragmentation closes the analysis — "all incidents" must be "addressed to and resolved by the Sandiganbayan."
• On the merits behind the finality, the levies "partake of the nature of taxes and can only be used for public purpose," and "[b]ecause the subject UCPB shares were acquired with government funds, the government becomes their prima facie beneficial and true owner."

Doctrine

• Exclusive and original jurisdiction over PCGG cases, civil or criminal: the PCGG "shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof."
• The interim issuances are law — executive issuances after the 1986 Edsa Revolution and before ratification of the 1987 Constitution "had the force and effect of laws," validly amending P.D. No. 1606§, as "duly recognized and reflected" in R.A. Nos. 7975 and 8249.
• The benchmark is ill-gotten-wealth character, not the form of the action — that a case "involved the performance of contractual obligations … is of no importance."
• Sequestration places property under PCGG "possession or control," with which another court's legal custody "would collide."
• Against split jurisdiction: "the law and courts frown upon split jurisdiction and the resultant multiplicity of suits." And coconut levy funds are public, partaking "of the nature of taxes."

• This is the civil counterpart of Disini, and the pair should be recited together — both run on the same statutory head (E.O. Nos. 1§, 2, 14 and 14-A, carried into §4(c)), Disini operating criminally against a private individual and Dumayas civilly to strip an RTC of a declaratory-relief case.
• The holding is about which court, not about who wins: the jurisdictional ruling would have sufficed, but the Court went on to hold the petitions barred and DISMISSED them rather than transferring them — note the disposition carefully.
• "Ill-gotten wealth" is measured by the allegation, consistent with the general rule that jurisdiction is determined by the pleadings.
• And the procedural objection to the PCGG's verification and certification, signed by a single Commissioner, was among the "other issues" left undecided.

Full Digest — Recitation Format

Gist

Facts

1. In 1971, R.A. No. 6260 created the Coconut Investment Company (CIC) to administer the Coconut Investment Fund (CIF), sourced from "a PhP 0.55 levy on the sale of every 100 kg. of copra," of which PhP 0.02 was placed at the disposition of COCOFED, "the national association of coconut producers declared by the Philippine Coconut Administration (PHILCOA, now PCA) as having the largest membership."
2. The declaration of martial law in September 1972 "saw the issuance of several presidential decrees purportedly designed to improve the coconut industry through the collection and use of the coconut levy fund," the PCA being "[c]harged with the duty of collecting and administering the Fund." Among them: P.D. No. 276 establishing the Coconut Consumers Stabilization Fund (CCSF); P.D. No. 582 creating the Coconut Industry Development Fund (CIDF); and P.D. No. 755, which authorised the PCA "to utilize the CCSF and the CIDF collections to acquire a commercial bank" and "to distribute, for free, the shares of stock of the bank it acquired to the coconut farmers."
3. The levies were used to organise, capitalise and finance the 6 CIIF Oil Mills, whose wholly-owned subsidiaries were the 14 holding companies, whose assets in turn included the advances and UCPB loans that produced the CIIF block of SMC shares — "simply the fruits of the coconut levy funds acquired at the expense of the coconut industry."
4. The Sandiganbayan, in Civil Case No. 0033-F, ruled that "the CIIF companies and the CIIF block of SMC shares are public funds necessarily owned by the Government."
5. On January 24, 2012, this Court in COCOFED v. Republic affirmed that ruling, modifying it so that "[t]hese shares shall belong to the Government, which shall be used only for the benefit of the coconut farmers and for the development of the coconut industry," reasoning that "[b]ecause the subject UCPB shares were acquired with government funds, the government becomes their prima facie beneficial and true owner" (Republic v. COCOFED).
6. On November 27, 2012, in G.R. No. 180705, the Court likewise "affirmed the Sandiganbayan's decision nullifying the shares of stock transfer to Eduardo M. Cojuangco, Jr.," holding that the coconut levy funds "partake of the nature of taxes and can only be used for public purpose … [and] cannot be used to benefit — whether directly or indirectly — private individuals," and ordering the 7.22% UCPB shares reconveyed to the Government.
7. Thereafter, UCPB and COCOLIFE filed petitions for declaratory relief in the RTC of Makati City, docketed as Civil Case No. 12-1251 (UCPB) and Civil Case No. 12-1252 (COCOLIFE). The PCGG moved to dismiss both for, among other grounds, lack of jurisdiction over the subject matter.
8. On April 29, 2013, Judge Dumayas denied the PCGG's motion to dismiss the complaint in Civil Case No. 12-1251.
9. On May 15, 2013, an Omnibus Order (issued by Branch 138) denied the PCGG's motion to dismiss the complaint in Civil Case No. 12-1252.
10. On June 28, 2013, the court denied the PCGG's motion for reconsideration in Civil Case No. 12-1251.
11. On December 4, 2013, it denied the PCGG's motion for reconsideration in the consolidated cases.
12. The PCGG brought the present consolidated petitions — G.R. No. 209447 (UCPB) and G.R. No. 210901 (COCOLIFE).
13. On August 11, 2015, the Court En Banc promulgated this Decision through Justice Villarama, Jr. Justices Leonardo-De Castro, Peralta and Jardeleza took no part; Justice Reyes was on leave.

Arguments of the Parties

Issue

Ruling

"WHEREFORE, the petitions are GRANTED. The Orders dated April 29, 2013 and June 28, 2013 in Civil Case No. 12-1251; and Omnibus Order dated May 15, 2013 (Branch 138) and Order dated December 4, 2013 in Civil Case Nos. 12-1251 and 12-1252 (consolidated petitions) of the Regional Trial Court of Makati City, Branch 59, are hereby ANNULLED and SET ASIDE. The petitions in Civil Case Nos. 12-1251 and 12-1252 filed by UCPB and COCOLIFE, respectively, are DISMISSED.

No pronouncement as to costs.

SO ORDERED."

Ratio

1. The Court opens on finality, which frames the whole disposition. "It is an important fundamental principle in our judicial system that every litigation must come to an end … it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the verdict." And it names the stake: "about three million poor farmers who have long waited to benefit from the outcome of the 27-year battle for the judicial recovery of assets acquired through illegal conversion of the coconut levies collected during the Marcos regime into private funds."
2. The conclusion on jurisdiction is stated, then reasoned. "A rigorous examination of the antecedent facts and existing records at hand shows that Sandiganbayan has exclusive jurisdiction over the instant case."
3. The constitutional status of the interim issuances is established — the step that makes E.O. No. 14§ operative as law. P.D. No. 1606§ "has been amended during the interim period after the Edsa Revolution of 1986 and before the 1987 Constitution was drafted, passed, and ratified. Thus, the executive issuances during such period before the ratification of the 1987 Constitution had the force and effect of laws," and specifically amended P.D. No. 1606§ "in so far as the jurisdiction of the Sandiganbayan over civil and criminal cases instituted and prosecuted by the PCGG is concerned."
4. E.O. No. 14§ is quoted in both its operative sections. §1: "the Presidential Commission on Good Government … is hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1§ … and Executive Order No. 2 … as may be warranted by its findings." §2: "The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof."
5. Continuity with the modern charter is confirmed. "Notably, these amendments had been duly recognized and reflected in subsequent amendments to PD 1606, specifically Republic Act Nos. 7975 and 8249." This is the link to §4(c), the head that Disini applies on the criminal side.
6. The test is subject matter, not the label of the action. "[I]t is clear that it is the Sandiganbayan and not the … RTC that has jurisdiction over the disputed … shares, being the alleged 'ill-gotten wealth' of former President Ferdinand E. Marcos and [his crony]. The fact that the … civil case involved the performance of contractual obligations … is of no importance. The benchmark is whether said … shares are alleged to be ill-gotten wealth of the Marcoses and their perceived cronies."
7. Sequestration supplies an independent reason. "Sequestration is a provisional remedy or freeze order issued by the PCGG designed to prevent the disposal and dissipation of ill-gotten wealth," the power to sequester meaning to "place or cause to be placed under [PCGG's] possession or control said property … for the purpose of preventing the destruction of, and otherwise conserving and preserving the same, until it can be determined, through appropriate judicial proceedings, whether the property was in truth ill-gotten" (Silverio v. PCGG). Because the shares "were already sequestered, enabling the PCGG to exercise the power of supervision, possession, and control," that power "would collide with the legal custody of the … RTC," and any outcome "would directly militate on PCGG's control and management … and consequently hamper or interfere with its mandate to recover ill-gotten wealth."
8. A policy against fragmentation closes the jurisdictional analysis. "[T]he interests of orderly administration of justice dictate that all incidents affecting the … shares and PCGG's right of supervision or control … must be addressed to and resolved by the Sandiganbayan. Indeed, the law and courts frown upon split jurisdiction and the resultant multiplicity of suits, which result in much lost time, wasted effort, more expenses, and irreparable injury to the public interest."
9. On the merits behind the finality, the character of the funds is restated. The advances and UCPB loans "are public in character, constituting as they do assets of the 14 holding companies, which in turn are wholly-owned subsidiaries of the 6 CIIF Oil Mills," which "were organized, capitalized and/or financed using coconut levy funds." Hence "the CIIF block of SMC shares are simply the fruits of the coconut levy funds acquired at the expense of the coconut industry," and, per Republic v. COCOFED, "[b]ecause the subject UCPB shares were acquired with government funds, the government becomes their prima facie beneficial and true owner." The levies "partake of the nature of taxes and can only be used for public purpose … [and] cannot be used to benefit — whether directly or indirectly — private individuals."
10. The remaining issues are expressly not reached. "Having resolved that subject matter jurisdiction pertains to the Sandiganbayan and not the RTC, and that the petitions for declaratory relief are barred by our January 24, 2012 Decision …, we deem it unnecessary to address the other issues presented."

Doctrine

• This is the civil counterpart of Disini, and the pair should be recited together. Both run on the same statutory head — E.O. Nos. 1§, 2, 14 and 14-A, carried into §4(c) of the charter. Disini shows it operating criminally against a private individual; Dumayas shows it operating civilly to strip a regional trial court of a declaratory-relief case. The subtopic is captioned "Criminal Jurisdiction of the Different Courts," which is why this case is classified ANALOGOUS rather than DIRECT.
• The holding is about which court, not about who wins. Strictly, the jurisdictional ruling would have sufficed; the Court went on to hold the petitions barred by the finality of the 2012 Decision, and dismissed them rather than remitting them to the Sandiganbayan. Note the disposition carefully: the petitions were DISMISSED, not transferred.
• "Ill-gotten wealth" is measured by the allegation. The benchmark asks whether the assets are "alleged to be ill-gotten wealth" — consistent with the general rule that jurisdiction is determined by the pleadings, and with Serana's statement that jurisdiction is not affected by the pleas or the theories set up by defendant.
• The passage beginning "First … Second … Third" in the Decision is a quotation from an earlier ill-gotten-wealth case concerning UHC and CDCP/PNCC shares and petitioners Rodolfo Cuenca and CIC — not the parties here. The Court applies its reasoning by analogy; do not attribute those facts to Dumayas.
• The procedural objection was left undecided. The respondents' challenge to the verification and certification of non-forum shopping signed by a single Commissioner was among the "other issues" the Court deemed unnecessary to address.
• Three Justices took no part and one was on leave, which is worth noting given how many members of the Court had touched the coconut-levy litigation over 27 years.
• Verbatim caveats: the reported text carries "Re Firms" in a heading (for res), and the fallo attributes the Omnibus Order of May 15, 2013 to "Branch 138" although the orders under review are otherwise those of Branch 59 — an inconsistency in the report.

Separate Opinions