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    Phil Coconut Producers Fed Inc. V Republic

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    Rich Reyes
    This case involves a dispute over 33 million shares of San Miguel Corporation (SMC) stock that were sold in 1986 by the Coconut Industry Investment Fund Holding Companies to Andres Soriano III of the SMC Group. The Presidential Commission on Good Government sequestered the shares after the initial payment was made. In 1990, SMC and the CIIF Companies signed a Compromise Agreement to resolve their dispute over the aborted stock sale. COCOFED and others filed motions to nullify the agreement. The Supreme Court ruled that (1) the absence of Sandiganbayan approval did not preclude the PCGG from recognizing the agreement, as the PCGG had implicitly recognized it; and (2) while the

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    Phil Coconut Producers Fed Inc. V Republic

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    Rich Reyes
    97 views3 pages
    This case involves a dispute over 33 million shares of San Miguel Corporation (SMC) stock that were sold in 1986 by the Coconut Industry Investment Fund Holding Companies to Andres Soriano III of the SMC Group. The Presidential Commission on Good Government sequestered the shares after the initial payment was made. In 1990, SMC and the CIIF Companies signed a Compromise Agreement to resolve their dispute over the aborted stock sale. COCOFED and others filed motions to nullify the agreement. The Supreme Court ruled that (1) the absence of Sandiganbayan approval did not preclude the PCGG from recognizing the agreement, as the PCGG had implicitly recognized it; and (2) while the

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    Phil Coconut Producers Fed Inc. v Republic,

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    This case involves a dispute over 33 million shares of San Miguel Corporation (SMC) stock that were sold in 1986 by the Coconut Industry Investment Fund Holding Companies to Andres Soriano III of the SMC Group. The Presidential Commission on Good Government sequestered the shares after the initial payment was made. In 1990, SMC and the CIIF Companies signed a Compromise Agreement to resolve their dispute over the aborted stock sale. COCOFED and others filed motions to nullify the agreement. The Supreme Court ruled that (1) the absence of Sandiganbayan approval did not preclude the PCGG from recognizing the agreement, as the PCGG had implicitly recognized it; and (2) while the

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    97 views3 pages

    Phil Coconut Producers Fed Inc. V Republic

    Uploaded by

    Rich Reyes
    This case involves a dispute over 33 million shares of San Miguel Corporation (SMC) stock that were sold in 1986 by the Coconut Industry Investment Fund Holding Companies to Andres Soriano III of the SMC Group. The Presidential Commission on Good Government sequestered the shares after the initial payment was made. In 1990, SMC and the CIIF Companies signed a Compromise Agreement to resolve their dispute over the aborted stock sale. COCOFED and others filed motions to nullify the agreement. The Supreme Court ruled that (1) the absence of Sandiganbayan approval did not preclude the PCGG from recognizing the agreement, as the PCGG had implicitly recognized it; and (2) while the

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    of 3

    G.R. Nos.

    177857-58               October 5, 2016

    PHILIPPINE COCONUT PRODUCERS FEDERATION, INC. (COCOFED), MANUEL


    V. DEL ROSARIO, DOMINGO P. ESPINA, SALVADOR P. BALLARES, JOSELITO A.
    MORALEDA, PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA TITULAR,
    and RAYMUNDO C. DE VILLA, Petitioners,
    vs.
    REPUBLIC OF THE PHILIPPINES, Respondent.

    FACTS:

    On March 26, 1986, the Coconut Industry Investment Fund Holding Companies ("CIIF") sold
    33,133,266 SMC common shares to Andres Soriano III of the SMC Group for
    P3,313,326,600.00, payable in four (4) installments. On April 1, 1986, the SMC Group paid the
    initial purchase price of P500 million to the UCPB as administrator of the CIIF (the "UCPB
    Group"). The sale was transacted through the stock exchange and the shares were then registered
    in the name of Anscor-Hagedom Securities, Inc. (AHSI). On April 7, 1986, the Presidential
    Commission on Good Government (PCGG) sequestered the shares of stock. Due to the
    sequestration, the SMC Group suspended payment of the balance of the purchase price of the
    subject stocks. In retaliation, the UCPB Group attempted to rescind the sale by filing a complaint
    with the Regional Trial Court of Makati. The complaint, however, was eventually ordered
    dismissed for lack of jurisdiction.

    Early 1989 developments saw the SMC and UCPB groups successfully threshing out their
    dispute over the aborted sale of the over 33.1 million SMC shares which have meanwhile
    ballooned to 175,274,960 as a consequence of dividends and stock splits. But because any
    settlement required PCGG's intervention, Andres Soriano III, for SMC, and Ramon Y. Sy, for
    UCPB, in a joint letter of October 31, 1989, informed the PCGG about a proposal which would
    have the two groups give PCGG an "arbitration fee" in the form of 5,500,000 SMC shares to
    support the Comprehensive Agrarian Reform Program (CARP). PCGG approved the proposal.
    hus, on March 20 and 22, 1990, SMC and UCPB representing the CIIF signed a Compromise
    Agreement and Amicable Settlement ("Compromise Agreement").

    On July 4, 1991, the SMC and UCPB Groups filed a Joint Manifestation of Implementation of
    Compromise Agreement and of Withdrawal of Petition therein stating that they have
    implemented the Compromise Agreement with the conditions set by the PCGG and, accordingly,
    withdrawing their Joint Petition. The PCGG, for its part, manifested that it has no objection to
    the action thus taken by the SMC and UCPB Groups.

    COCOFED, et al. and Cojuangco filed their respective motions, both dated July 4, 1991, to
    nullify the implementation of the Compromise Agreement. Acting on the Joint Manifestation of
    Implementation of Compromise Agreement and of Withdrawal of Petition, the Sandiganbayan on
    July 5, 1991 noted the same.
    LEGAL ISSUE:

    Whether or not the absence of approval of the Compromised Agreement by the Sandiganbayan
    prevents PCGG from recognizing the agreement?

    RULING:

    To sway this Court, the Republic relies on the fact that the Compromise Agreement between
    SMC and the CIIF Companies ratifYing the sale of the first installment shares had been
    submitted but has not been approved by the Sandiganbayan. But note, neither has the
    Compromise Agreement been disapproved by that or this Court. Nowhere in San Miguel
    Corporation v. Sandiganbayan did the Court rule on the validity of the Compromise Agreement,
    much less "indirectly [deny] approval of the Compromise Agreement,"since it was not the issue
    presented for the Court's resolution.

    The absence of an explicit approval of the Compromise Agreement by the Sandiganbayan,


    however, did not and does not preclude the PCGG from recognizing the agreement. In fact, the
    PCGG exercised ownership over the arbitration shares by asking, through the OSG, for the
    conversion of the PCGG shares into preferred shares per a Motion dated September 30, 2009.
    More importantly, it retained ownership of the said arbitration fee shares from 1991 up to the
    present. Undoubtedly, the Republic, through the PCGG, implicitly recognized the validity of the
    Compromise Agreement.

    Per this Court's January 2012 Decision, beneficial ownership of the shares pertains to the
    Republic. But as things stood, the Republic was actually involved in the Compromise Agreement
    and its implementation.

    It is not lost on this Court that the PCGG, the government's primary representative in
    sequestration proceedings, virtually gave its consent to SMC's continuous possession of the
    25.45 million shares by approving the Compromise Agreement on which SMC predicates its
    claim over the shares and continuing its possession of the so-called "arbitration fee" shares that
    came out of the same Compromise Agreement.

    Therefore, the Republic of the Philippines' Manifestation and Omnibus Motion dated October 12,
    2012 is DENIED without prejudice to the right of respondent Republic to institute the
    appropriate action or proceeding where SMC's alleged right over the 25.45 million SMC treasury
    shares will be determined and finally resolved.

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