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Petitioner V Executive Secretary

This case involves the coconut levy funds which were public funds collected through taxation to support the coconut industry and farmers. The court ruled that declaring the funds to be private property of coconut farmers and removing them from the general government funds violates substantive due process. Appropriating public funds raised through taxation for a private purpose is unconstitutional. The declarations in question did not distinguish between wealthy and impoverished coconut farmers and appeared to lack a legitimate public purpose.

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752 views1 page

Petitioner V Executive Secretary

This case involves the coconut levy funds which were public funds collected through taxation to support the coconut industry and farmers. The court ruled that declaring the funds to be private property of coconut farmers and removing them from the general government funds violates substantive due process. Appropriating public funds raised through taxation for a private purpose is unconstitutional. The declarations in question did not distinguish between wealthy and impoverished coconut farmers and appeared to lack a legitimate public purpose.

Uploaded by

VIRILITER AGITE
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Petitioner-Organization v Executive Secretary

669 SCRA 49

FACTS:

In 1976 President Marcos enacted P.D. 961, the Coconut Industry Code, which consolidated and
codified existing laws relating to the coconut industry. The Code provided that surpluses from
the CCS Fund and the CID Fund collections, not used for replanting and other authorized
purposes, were to be invested by acquiring shares of stock of corporations, including the San
Miguel Corporation (SMC), engaged in undertakings related to the coconut and palm oil
industries. UCPB was to make such investments and equitably distribute these for free to
coconut farmers. These investments constituted the Coconut Industry Investment Fund (CIIF).
P.D. 961 also provided that the coconut levy funds (coco-levy funds) shall be owned by the
coconut farmers in their private capacities.

ISSUE:

Does appropriating public funds violate substantive due process?

RULING:

Yes, the coco-levy funds were raised pursuant to law to support a proper governmental purpose.
They were raised with the use of the police and taxing powers of the State for the benefit of the
coconut industry and its farmers in general. The Court has also recently declared that the coco-
levy funds are in the nature of taxes and can only be used for public purpose. In COCOFED v.
Republic, the Court held as unconstitutional Section 2 of P.D. 755 for “effectively authorizing
the PCA to utilize portions of the CCS Fund to pay the financial commitment of the farmers to
acquire UCPB and to deposit portions of the CCS Fund levies with UCPB interest free. And as
there also provided, the CCS Fund, CID Fund and like levies that PCA is authorized to collect
shall be considered as non-special or fiduciary funds to be transferred to the general fund of the
Government, meaning they shall be deemed private funds.” Section 2 of P.D. 755, Article III,
Section 5 of P.D. 961, and Article III, Section 5 of P.D. 1468 completely ignore the fact that
coco-levy funds are public funds raised through taxation. And since taxes could be exacted only
for a public purpose, they cannot be declared private properties of individuals although such
individuals fall within a distinct group of persons, but the assailed provisions, which removed the
coco-levy funds from the general funds of the government and declared them private properties
of coconut farmers, do not appear to have a color of social justice for their purpose. The
declarations do not distinguish between wealthy coconut farmers and the impoverished ones.
Consequently, such declarations are void since they appropriate public funds for private purpose
and, therefore, violate the citizens’ right to substantive due process.

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