DISSENTING OPINION

MELO, J.:

I respectfully dissent from the majority opinion, penned by Mr. Justice Panganiban, upholding the right of the PCGG to vote the sequestered UCPB shares of stock.

The petition sprung from the following factual antecedents:

In 1986 and 1987, numerous business enterprises, entities, and pieces of property, real and personal, were sequestered or taken over by the PCGG on the ground that these were ill-gotten property of former President Marcos, his family, and close associates. Among these sequestered property were shares of stock in the United Coconut Planters Bank (UCPB) registered in the name of 1,405,366 coconut farmers and of the so-called Coconut Industry Investment Fund (CIIF) companies.

In connection with the sequestration and take-over of said UCPB shares of stock, the PCGG, on July 31, 1987, instituted an action for reconveyance, reversion, accounting, restitution, and damages against Eduardo Cojuangco, Jr. and sixty others with the Sandiganbayan, docketed therein as Case No. 0033.

On November 19, 1990, and during the pendency of the case, the Sandiganbayan issued a resolution lifting the sequestration of the UCPB shares of stock registered in the name of "1 million coconut farmers" and the CIIF companies, on the ground that these entities were not impleaded by the PCGG as party-defendants within the 6-month period - ending on August 2, 1987 - fixed by the Constitution, having merely been listed in an annex appended to the complaint in Case No. 0033.

This Resolution was challenged by the PCGG in a petition for certiorari filed with the Court, docketed herein as G.R. No. 96073. Pending resolution of the case, the Sandiganbayan, on March 4, 1991, ordered the holding of elections for members of the Board of Directors of UCPB. Opposing the holding of elections, PCGG applied for, and was granted by the Court a restraining order enjoining the holding of a stockholders' meeting for the election of the Board of Directors of UCPB.

However, on March 3, 1992, acting on a petition filed by Eduardo Cojuangco, Jr., the Court lifted the restraining order it had issued and ordered instead that UCPB elect its Board of Directors. Furthermore, the Court allowed the sequestered shares of UCPB to be voted by the registered owners thereof. The shareholders' victory would, however, be fleeting. On February 17, 1993, acting on the Solicitor General's Clarification/Manifestation with Motion, the Court issued a subsequent Resolution declaring that "the right of the petitioners to vote stock in their names at the meetings of the UCPB cannot be conceded at this time. That right still has to be established by them before the Sandiganbayan. Until that is done, they cannot be deemed legitimate owners of UCPB stock and cannot be accorded the right to vote them." Accordingly, the dispositive portion of said Resolution provided:

IN VIEW OF THE FOREGOING, the Court recalls and sets aside the Resolution dated March 3, 1992 and; pending resolution on the merits of the action at bar, and until further orders, suspends the effectivity of the lifting of the sequestration decreed by the Sandiganbayan on November 15, 1990, and directs the restoration of the status quo ante, so as to allow the PCGG to continue voting the shares of stock under sequestration at the meetings of the United Coconut Planters Bank.

IT IS SO ORDERED.

(Rollo, p. 73.)

Two years thereafter, on January 23, 1995, the Court rendered a decision in G.R. No. 96073 (240 SCRA 376) nullifying and setting aside the November 19, 1990 Resolution of the Sandiganbayan lifting the sequestration of the shares of stock of UCPB registered in the name of "1 million coconut farmers" and of the CIIF companies on the ground that "as regards actions in which the complaints seek recovery of defendants' shares of stock in existing corporations ( e.g. San Miguel Corporation, Benguet Corporation, Meralco, etc. ) because allegedly purchased with misappropriated public funds, in breach of fiduciary duty, or otherwise under illicit or anomalous conditions, the impleading of said firms would clearly appear to be unnecessary" since, if warranted by the evidence, judgments could be handed down against the defendants divesting them of their ownership of said stock and imposing upon them the obligation of surrendering said stock to the Government. It may be noted that in said decision, the Court did not reaffirm and maintain its Resolution dated February 17, 1993.

A month thereafter, the PCGG, pursuant to the order of the Sandiganbayan, subdivided Case No. 0033 into eight complaints, docketed as Cases No. 0033-A to 0033-H.

Six years thereafter, on February 13, 2001, the Board of Directors of UCPB, received a letter from the ACCRA Law Office. Written on behalf of the Philippine Coconut Producers' Federation (COCOFED), et al. and the more than one million coconut farmers who are registered stockholders of UCPB, the letter demanded of UCPB, which had not held any stockholders' meeting since 1986, to call such a meeting on March 6, 2001, at 3 o'clock in the afternoon, for the purpose of, among other things, electing the Board of Directors. In the same letter, COCOFED also requested information as to whether UCPB had investigated and reported to the Bangko Sentral ng Pilipinas the large scale estafa allegedly committed by the previous members of the board and other responsible officials of UCPB.

On February 26, 2001, the UCPB Board of Directors, by way of response to the aforementioned letter, passed and approved a resolution calling for a stockholders' meeting of the bank on March 6, 2001 at 3 o'clock in the afternoon, the date fixed in the bank's By-Laws.

In anticipation of the announced stockholders' meeting, COCOFED, et al. and Ballares, et al., filed, in the following Sandiganbayan cases:

Civil Case No. 0033-A;

Civil Case No. 0033-B; and

Civil Case No. 0033-F,

a class action omnibus motion dated February 23, 2001, seeking to enjoin the PCGG from voting in the announced stockholders' meeting of March 6, 2001 (a) the UCPB shares of stock registered in the names of the more than one million coconut farmers; (b) the San Miguel Corporation (SMC) shares registered in the names of the 14 CIIF Holding Companies and beneficially owned by COCOFED; and (c) the shares of stock registered in the name of PCGG itself.

Because of the motion's extreme urgency, and as prayed for by the movants themselves, the Sandiganbayan (1^st Division) heard the motion on February 28, 2001. Lorenzo v. Tan, President of UCPB, was present during this hearing and in a manifestation, he asked to be heard therein.

The Sandiganbayan noted the manifestation of Mr. Lorenzo V. Tan, as follows:

At a certain state of the argument on this matter, the UCPB sought to be heard in "executive session" upon the alleged significant matters of fact to be conveyed by the UCPB to this Court. Duly warned by the engaged counsel for the UCPB, Atty. Roberto San Juan, the Court excluded all private individuals and all counsel not related to these cases so that whatever matters of a restricted or confidential character of significance to banks in the business community, and of the UCPB in particular, could be heard in confidence.

The bank's President in the person of Mr. Lorenzo v. Tan was heard.

While the matters he put forth might be relevant to the bank, the entire thrust of the clarification made by the president was the need to dispose of this case expeditiously so that question of ownership of the shares and therefore of the bank, would be resolved with finality; this apparently is a desirable element in the business world and in the market in which banks operate, as much for drawing investments as for acceptability of other transactions and "products" of banks in the market. It must be stated that the matter, while important in itself, is of minor relevance to the issue at bar.

(p. 3, Order dated February 28, 2001.)

Following the conclusion of the hearing, the Sandiganbayan issued in open court on the same date - February 28, 2001 - the Order authorizing COCOFED, et al., Ballares, et al. and Eduardo Cojuangco, Jr., et al. and all other registered stockholders of UCPB to vote their shares of stock and themselves to be voted upon at the UCPB announced stockholders' meeting of March 6, 200l or in any subsequent continuation or resetting thereof, and to perform such acts as will normally follow in the exercise of their rights as registered stockholders. More specifically, the pertinent portion of the Order declared:

In view hereof, the movants COCOFED, et al. and Ballares, et al. as well as Eduardo Cojuangco, et al. who were acknowledged to be registered stockholders of the UCPB are authorized, as are all other registered stockholders of the United Coconut Planters Bank, until further orders from this Court, to exercise their rights to vote their shares of stock and themselves to be voted upon in the United Coconut Planters Bank (UCPB) at the scheduled Stockholders' Meeting on May 6, 2001 or on any subsequent continuation or resetting thereof, and to perform such acts as will normally follow in the exercise of these rights as registered stockholders.

On March 1, 2001, the Sandiganbayan issued a writ of preliminary injunction enjoining PCGG or any person acting in its behalf from voting the sequestered shares of UCPB at its scheduled stockholders' meeting of March 6, 2001, or at anytime at which the meeting may be continued or reset until otherwise ordered by the same court. In the same writ, the Sandiganbayan also directed the chairman and the secretary of the stockholders' meeting of UCPB on the above scheduled date and other dates to which the meeting may be reset, to acknowledge the right of Eduardo M. Cojuangco, Jr., et al. to vote the shares of stock registered in their names on all matters that may be properly considered before said stockholders' meeting.

Such was the state of things when, on March 5, 2001, herein petitioner Republic of the Philippines, represented by the PCGG, filed the instant petition premised on the fact that at all times prior to the questioned order, PCGG had been voting the sequestered UCPB shares registered in the names of private respondents under the authority of the Court's pronouncement in G.R. No. 96073 and 104850. PCGG claimed that the right granted to it to vote the sequestered shares was the status quo and for this status quo to be disturbed, there must be a clear showing that this Court has reversed or, at the very least, modified its prior pronouncements on the matter. Since there was none, petitioner contended that respondent Sandiganbayan gravely abused its discretion, tantamount to lack or excess of jurisdiction, when it granted the right to vote said sequestered shares to private respondents COCOFED, Ballares, and Cojuangco, Jr. et al. PCGG likewise insisted that the subject sequestered shares were purchased with coconut levy funds, funds declared public in character, and that the Resolution issued by this Court dated February 13, 1993 in G.R. No. 96073 remains effective.

In its Resolution of April 17, 2001, the Court defined the issue to be resolved in the instant case in this fashion:

Did the Sandiganbayan commit grave abuse of discretion when it issued the disputed order allowing respondents to vote UCPB shares of stock registered in the name of respondents?

While the majority declares that, indeed, the Sandiganbayan acted with grave abuse of discretion in allowing respondents to vote their UCPB shares of stock registered in their names, I respectfully submit that it did not.

In determining whether there has been "grave abuse of discretion", under Rule 65, the "unyielding yardstick" is whether the abuse of discretion is "so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility (Sinon vs. Civil Service Commission, 215 SCRA 410 [1992]; Planters Products, Inc. vs. Court of Appeals, 193 SCRA 563 [1991]; Litton Mills, Inc. vs. Galleon Trader, Inc., 163 SCRA 489 [1988]; Esguerra vs. Court of Appeals, 267 SCRA 380 [1997]; Republic vs. Villarama, 278 SCRA 736 [1997]).

To discharge its burden of showing that the Sandiganbayan acted with grave abuse of discretion, the PCGG relies principally on the Court's February 16, 1993 Resolution in Republic vs. Sandiganbayan, et al., G.R. No. 96073 where we ordered the restoration of the status quo ante so as to allow PCGG to continue voting the shares of stock under sequestration at the meetings of the UCPB.

As correctly pointed out by respondents, the February 16, 1993 Resolution, is in the nature of a temporary restraining order, having been issued to recall the March 3, 1992 Resolution lifting of the temporary restraining order previously issued by the Court on March 5, 1991. In other words, the subject resolution merely reinstated the temporary restraining order which the Court had earlier issued enjoining private respondents from voting the sequestered shares registered in their names. Being in the nature of a restraining order, the same is interlocutory in character and it became functus oficio when this Court decided the PCGG Sequestration Cases, including G.R. No. 96073, on January 23, 1995. A restraining order is but a provisional remedy to which parties may resort "for the preservation or protection of their rights or interests, and for no other purpose, during the pendency of the principal action ( Commissioner of Customs vs. Cloribel, 19 SCRA 234 [1967]).

Moreover, the Resolution of February 16, 1993 explicitly provided that it shall be effective only "pending resolution on the merits of the action at bar." G.R. No. 96073, the "action at bar" referred to, was decided on the merits on January 23, 1995. The dispositive portion of the decision in the aforementioned PCGG Sequestration Cases, including G.R. No.96073, provided:

WHEREFORE, judgment is hereby rendered:

A. NULLIFYING AND SETTING ASIDE:

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B. CONFIRMING AND MAINTAINING the temporary restraining orders issued in G.R. Nos. 104883, 105170, 105206, 105808, 105809, 107233, and 107908, which shall continue in force and effect during the continuation of the proceedings in the corresponding civil actions in the Sandiganbayan, subject to the latter's power to modify or terminate the same in the exercise of its sound discretion in light of such evidence as may be subsequently adduced; and

C. DISMISSING the petitions in G.R. Nos. 107908 and 109592, for lack of merit

(Republic v. Sandiganbayan [First Division, 240 SCRA 376 [1995], at pp. 474-476.)

Even a casual study of the above dispositive portion would show that the Court's Resolution dated February 16, 1993 is not among the temporary restraining orders "confirmed and maintained" in the January 23, 1995 decision.

In fact, in Calpo vs. Sandiganbayan (Third Division) (265 SCRA 380 [1996]), the Court clarified that the "PCGG Sequestration Cases," including G.R. No. 96073, did not involve the issue of PCGG's right to vote sequestered corporate shares. The Court held thus:

The crucial question in "The PCGG Sequestration Cases," capsulized by the Court in its resolution of 23 January 1995, is this:

"DOES INCLUSION IN THE COMPLAINTS FILED BY THE PCGG BEFORE THE SANDIGANBAYAN OF SPECIFIC ALLEGATIONS OF CORPORATIONS BEING "DUMMIES" OR UNDER THE CONTROL OF ONE OR ANOTHER OF THE DEFENDANTS NAMED THEREIN AND USED AS INSTRUMENTS FOR ACQUISITION, OR AS BEING DEPOSITARIES OR PRODUCTS, OF ILL-GOTTEN WEALTH; OR THE ANNEXING TO SAID COMPLAINTS OF A LIST OF SAID FIRMS, BUT WITHOUT ACTUALLY IMPLEADING THEM AS DEFENDANTS, SATISFY THE CONSTITUTIONAL REQUIREMENT THAT IN ORDER TO MAINTAIN A SEIZURE EFFECTED IN ACCORDANCE WITH EXECUTIVE ORDER NO. 1, s. 1986, THE CORRESPONDING "JUDICIAL ACTION OR PROCEEDING" SHOULD BE FILED WITHIN THE SIX-MONTH PERIOD PRESCRIBED IN SECTION 26, ARTICLE XVIII, OF THE (1987) CONSTITUTION?

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Neither the qualifications of the PCGG nominees to sit in the SMC Board of Directors nor the right of the PCGG to vote the sequestered corporate shares have been mentioned, even in passing, by the Court. In fact, the promulgation of the Court's resolution in the PCGG sequestration cases should now pave the way for the cognizance by the Sandiganbayan of the quo warranto proceedings.

(p. 386-387; italics supplied.)

The issue being limited to the propriety of impleading the firms and corporations subject of sequestration, the Court's failure to "confirm and maintain" the February 16, 1993 Resolution only means that it became functus oficio upon resolution of the main action on January 23, 1995. The PCGG cannot, therefore, claim the continuing effectivity of said Resolution so as to authorize it to continue voting the sequestered UCPB shares.

The majority opinion, however, claims that PCGG's right to vote said shares remains on the ground that the jurisprudential bases for the Court's Resolution dated February 16, 1993 still remain. In Buayan Cattle Co. vs. Quintillan (128 SCRA 276 [1984]), the Court categorically declared that a complaint for injunctive relief must be construed strictly against the pleader. Even if the jurisprudential bases for the Resolution are still extant, the fact that said Resolution was not "confirmed and maintained" by the Court after it decided the main action militates against its continuing effectivity, otherwise a temporary restraining order would no longer be "temporary."

With the February 16, 1993 Resolution having lost effectivity, the question as to who could then vote the sequestered shares should then revert to the Sandigabayan, in accordance with our ruling in Philippine Coconut Producers Federation, Inc. (COCOFED) vs. Presidential Commission on Good Government (178 SCRA 236 [1989]), where we directed:

3. The incidents concerning the voting of the sequestered shares, the COCOFED elections, and the replacement of directors, being matters incidental to the sequestration, should be addressed to the Sandiganbayan in accordance with the doctrine laid down in PCGG vs. Pena, 159 SCRA 556, reiterated in G.R. No. 74910, Andres Soriano III vs. Hon. Manuel Yuzon,; G.R. No. 75075, Eduardo Cojuangco, Jr. vs. Securities and Exchange Commission; G.R. No. 75094, Clifton Ganay vs. Presidential Commission on Good Government; G.R. No. 76397, Board of Directors of San Miguel Corporation vs. Securities and Exchange Commission; G.R. No.79459, Eduardo Cojuangco, Jr. vs. Hon. Pedro N. Laggui; G.R. No. 79520, Neptunia Corporation, Ltd. vs. Presidential Commission on Good Government, August 10, 1988.

(p. 253.)

Significantly, even the Resolution in dispute recognizes that it is the Sandiganbayan which should determine who has the right to vote said shares, the same stating that "the right of the petitioners to vote stock in their names at the meetings of the UCPB cannot be conceded at this time. That right still has to be established by them before the Sandiganbayan."

It must also be pointed out that even the temporary restraining orders "confirmed and maintained" by the Court in the Sequestration Cases were made subject to the Sandiganbayan's "powers to modify or terminate the same in the exercise of its sound discretion," thereby reinforcing the conclusion that the February 16, 1993 Resolution relied upon by PCGG (which was not "confirmed and maintained" by the Court) was, in any event, subject to modification or termination by the Sandiganbayan.

And in the exercise of its power to determine who should vote the sequestered shares, the Sandiganbayan must be guided by the principles first enunciated in BASECO vs. PCGG (150 SCRA 181 [1987]), and further elucidated by the Court in Cojuangco, Jr. vs. Roxas (195 SCRA 797 [1991]), where we stated that:

Nothing is more settled than the ruling of this Court in BASECO vs. PCGG, that the PCGG cannot exercise acts of dominion over property sequestered. It may not vote sequestered shares of stock or elect the members of the board of directors of the corporation concerned-

a. PCGG May Not Exercise Acts of Ownership

One thing is certain, and should be stated at the outset: the PCGG cannot exercise acts of dominion over property sequestered, frozen or provisionally taken over. As already stressed with no little insistence, the act of sequestration, freezing or provisional takeover of property does not import or bring about a divestment of title over said property; does not make the PCGG the owner thereof. In relation to the property sequestered, frozen or provisionally taken over, the PCGG is a conservator, not an owner. Therefore, it can not perform acts of strict ownership; and this is specially true in the situations contemplated by the sequestration rules where, unlike cases of receivership, for example, no court exercises effective supervision or can upon due application and hearing, grant authority for the performance of acts of dominion.

Equally evident is that the resort to the provisional remedies in question shall entail the least possible interference with business operations or activities so that, in the event that the accusation of the business enterprise being 'ill-gotten' be not proven, it may be returned to its rightful owner as far as possible in the same condition as it was at the time of sequestration.

b. PCGG Has Only Powers of Administration

The PCGG may thus exercise only powers of administration over the property or business sequestered provisionally taken over, much like a court-appointed receiver, such as to bring and defend actions in its own name; receive rents; collect debts due; pay outstanding debts; and generally do such other acts and things as may be necessary to fulfill its mission as conservator and administrator. In this context, it may in addition enjoin or restrain any actual or threatened commission of acts by any person or entity that may render moot and academic, or frustrate or otherwise make ineffectual its efforts to carry out its task; punish for direct or indirect contempt in accordance with the Rules of Court; and seek and secure the assistance of any office, agency or instrumentality of the government. In the case of sequestered businesses generally, (i.e., going concerns, businesses in current operation), as in the case of sequestered objects, its essential role, as already discussed, is that of conservator, 'watchdog' or overseer, it is not that of manager, or innovator, much less an owner.

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d. Voting of Sequestered Stock; Conditions Therefor

So, too, it is within the parameters of these conditions and circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of corporations, granted to it by the President of the Philippines through a memorandum dated June 26, 1986. That memorandum authorizes the PCGG, 'pending the outcome of proceedings to determine the ownership of x x (sequestered) shares of stock,’ 'to vote such shares of stock as it may have sequestered in corporations at all stockholders' meetings called for the election of directors, declaration of dividends, amendment of the Articles of Incorporation, etc.' The Memorandum should be construed in such a manner as to be consistent with, and not contradictory of the Executive Orders earlier promulgated on the same matter. There should be no exercise of the right to vote simply because the right exists, or because the stocks sequestered constitute the controlling or a substantial part of the corporate voting power. The stock is not to be voted to replace directors, or revise the articles or by-laws, or otherwise bring about substantial changes in policy, program or practice of the corporation except for demonstrably weighty and defensible grounds, and always in the context of the stated purposes of sequestration or provisional takeover, i.e., to prevent the dispersion or undue disposal of the corporate assets. Directors are not to be voted out simply because the power to do so exists. Substitution of directors is not to be done without reason or rhyme, should indeed be shunned if at all possible, and undertaken only when essential to prevent disappearance or wastage of corporate property, and always under such circumstances as to assure that the replacements are truly possessed of competence, experience and probity.

In the case at bar, there was adequate justification to vote the incumbent directors out of office and elect others in their stead because the evidence showed prima facie that the former were just tools of President Marcos and were no longer owners of any stock in the firm, if they ever were at all. This is why, in its Resolution of October 28, 1986; this Court declared that-

'Petitioner has failed to make out a case of grave abuse or excess of jurisdiction in respondents' calling and holding of a stockholders' meeting for the election of directors as authorized by the Memorandum of the President x x (to the PCGG) dated June 26, 1986, particularly, where as in this case, the government can, through its designated directors, properly exercise control and management over what appear to be properties and assets owned and belonging to the government itself and over which the persons who appear in this case on behalf of BASECO have failed to show any right or even any shareholding in said corporation.’

It must however be emphasized that the conduct of the PCGG nominees in the BASECO Board in the management of the company's affairs should be henceforth be guided and governed by the norms herein laid down. They should never for a moment allow themselves to forget that they are conservators, not owners of the business; they are fiduciaries, trustees, of whom the highest degree of diligence and rectitude is, in the premises, required.

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The rule in this jurisdiction is, therefore, clear. The PCGG cannot perform acts of strict ownership of sequestered property. It is a mere conservator. It may not vote the shares in a corporation and elect the members of the board of directors. The only conceivable exception is in a case of a takeover of a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands as in BASECO.

The constitutional right against deprivation of life, liberty and property without due process of law is so well- known and too precious so that the hand of the PCGG must be stayed in its indiscriminate takeover of and voting of shares allegedly ill-gotten in these cases. It is only after appropriate judicial proceedings when a clear determination is made that said shares are truly ill-gotten when such a takeover and exercise of acts of strict ownership by the PCGG are justified.

(pp. 808-813.)

These principles were subsequently refined in the cases of Eduardo Cojuangco, Jr. vs. Calpo (G.R. No. 115352, June 10, 1997) and PCGG vs. Eduardo Cojuangco, Jr. (G.R. No. 133197, January 27, 1999) where we held that:

The issue of whether PCGG may vote the sequestered shares in SMC necessitates a determination of at least two factual matters:

1. whether there is prima facie evidence showing that the said shares are ill-gotten and thus belong to the State; and

2. whether there is an imminent danger of dissipation thus necessitating their continued sequestration and voting by the PCGG while the main issue pends with the Sandiganbayan.

The foregoing two points require presentation of evidence which can only be done before the Sandiganbayan, it being settled that the Supreme Court is not a trier of facts.

(p. 2, Resolution, June 10, 1997.)

However, the majority opinion holds that the two-tiered test above-enunciated finds no application to the case of a take-over of a business belonging to government or whose capitalization comes from public funds, but which landed in private hands, citing Cojuangco vs. Roxas and BASECO as authority therefor. The majority opinion asserts that the government is granted authority to vote sequestered shares:

1. Where government shares are taken over by private persons or entities who/which registered them in their own names; and

2. Where the capitalization or shares that were acquired with public funds somehow landed in private hands.

In fine, the majority points out that since the instant case involves shares that were acquired with public funds which somehow landed in private hands, there is no more need to apply the two-tiered test, the right to vote said shares automatically vesting in the government, acting through the PCGG.

As stated earlier, the Court, in Cojuangco vs. Roxas, unequivocally declared that "[t]he rule in this jurisdiction is, therefore, clear. The PCGG cannot perform acts of strict ownership of sequestered property. It is a mere conservator. It may not vote the shares in a corporation and elect the members of the board of directors. The only conceivable exception is in a case of a takeover of a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands as in BASECO."

Thus, it is well-settled that the only instance when PCGG can vote the shares in a sequestered corporation is in case of a takeover of a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands. The foregoing principle, as stated in the majority opinion, has been reiterated in many subsequent cases, most recently in Antiporda vs. Sandiganbayan (G.R. No. 116941, May 31, 2001).

On the other hand, the two-tiered test, first enunciated in Cojuangco vs. Calpo and subsequently in PCGG vs. Cojuangco Jr., provides the guidelines or requisites to be fulfilled in determining whether or not PCGG can vote shares in a sequestered corporation. Since PCGG can vote the shares in a sequestered corporation only in case of a takeover of a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands, plainly the two-tiered test is applicable only in this instance. In other words, the two-tiered test is designed precisely to verify whether or not the sequestered corporation is a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands! Thus, I submit that the Sandiganbayan did not err when it applied the two-tiered test in disallowing the PCGG to vote the sequestered shares.

In authorizing COCOFED, Ballares, and Eduardo Cojuangco, Jr. to exercise their right to vote their shares of stock, the Sandiganbayan stated:

Jurisprudence, from as far back as the leading case of Baseco (150 SCRA 181), has clearly defined the functions and authority of the PCGG in relation to sequestered property. Be it noted by way of footnote that government agencies as well as government officials, do not have rights in the exercise of the functions of the office. They have only duties to perform and authority by means of which they may comply with those duties under the law.

In this instance, the issue is whether or not the authority of the PCGG exists to remain in control of the voting rights of sequestered shares of stock in general, and whether or not the sequestered shares of stock in the UCPB in particular may be voted by it as part of its functions as sequestor of these shares of stock; corollarily, may the moving stockholders exercise of their proprietary rights over the shares of stock, save for the limitations of free disposal, until judgment shall have been rendered against them thereon.

It may be stated that jurisprudence has evolved from certain categorical positions originally enunciated to more refinements as time and events demonstrated to be appropriate. Let it also be noted that jurisprudence has not reversed itself; rather, jurisprudence has re-stated the rules as the circumstances and the facts presented before the courts had required in order to put in proper perspective the earlier assertions of jurisprudence.

In this light, the Court is faced now with the question: Who may vote sequestered shares of stock in general, and who may vote them in the particular instance of the UCPB shares of stock at its scheduled Stockholders’ Meeting on March 5, 2001?

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In the light of all of the above, the Court submits itself to jurisprudence and with the statements of the Supreme Court in G.R. No. 115352 entitled Enrique Cojuangco, Jr., et al. vs. Jaime Calpo, et al. dated June 10, 1997, as well as the resolution of the Supreme Court promulgated on January 27, 1999 in the case of PCGG vs. Eduardo Cojuangco, Jr., et al., G.R. No. 13319 which included the Sandiganbayan as one of the respondents. In these two cases, the Supreme Court ruled that the voting of sequestered shares of stock is governed by two considerations, namely,

1. whether there is prima facie evidence showing that the said shares are ill-gotten and thus belong to the State; and

2. whether there is an imminent danger of dissipation thus necessitating their continued sequestration and voting by the PCGG while the main issue pends with the Sandiganbayan.

(p. 5, Presidential Commission on Good Government vs. Eduardo M. Cojuangco, Jr., et al., supra)

This ruling does not state where, what or who the cause of the dissipation might be to justify the vote by the PCGG of the shares under sequestration. If the registered stockholders, however, have not participated in the management of the corporation, and the dissipation has not been demonstrated to have been caused either by the stockholders' action in the past, nor by action independent of the management during sequestration, then whatever "imminent danger of dissipation necessitating their continued sequestration and voting by the PCGG..." could not be raised against the voting rights of the asserting stockholders.

The Court has sought to obtain by all means any form of reinforcement from the PCGG on this matter, not only this morning but over the months that go as far back as July of the year 2000. Much to the impatience of this Court, the matter has not been responded to in any satisfactory manner.

(pp. 2-5, Order dated February 28, 2001.)

A perusal of the above order would show that the Sandiganbayan, in allowing private respondents to vote their shares, merely followed judicial precedents laid down by the Court. These decisions have not been challenged by the PCGG. Their review, much less reversal, has not been sought. They continue to express good law. I find no "patent or gross" arbitrariness or despotism by reason of passion or personal hostility in the Sandiganbayan's adherence to these precedents. I thus submit that one can hardly characterize the Sandiganbayan's order authorizing private respondents to vote their sequestered shares of stock as having been issued with grave abuse of discretion.

Additionally, Cojuangco, Jr. vs. Roxas is cited by the other side as authority for the proposition that PCGG should be the one to vote the sequestered shares, the Court having declared in Roxas that: "[t]he only conceivable exception (to the rule that PCGG may not vote the shares in a corporation and elect the members of the board of directors) is in a case of a takeover of a business belonging to the government or whose capitalization comes from public funds, but which landed in private hands as in BASECO." PCGG thus, likens the facts of the instant petition to the BASECO case.

The BASECO case does not support petitioner's position. It was proven in the BASECO case that 95.82% of the outstanding stock of BASECO, endorsed in blank by the owners thereof, were inexplicably in the possession of then President Marcos. More, deeds of assignment of practically all the stock of the corporations owning the aforementioned 95.82% were also inexplicably in the possession of President Marcos. Thus, in the case of BASECO, the directors thereof were merely Marcos nominees or dummies, it having been proven that President Marcos not only exercised control over BASECO but also that he actually owned almost 100% of BASECO's outstanding stock. Then too, it was proven that BASECO had been able to take-over and acquire the business and assets of the National Shipyard and Steel Corporation and other government-owned or controlled entities through the undue exercise by then President Marcos of his powers, authority, and influence. Upon these premises, the Court held that the government could properly exercise control and management over what appeared to be properties and assets owned and belonging to the government itself. Hereunder are the pertinent observations of the Court in said case:

The facts show that the corporation known as BASECO was owned or controlled by President Marcos "during his administration, through nominees, by taking undue advantage of his public office and/or using his powers, authority, or influence," and that it was by and through the same means, that BASECO had taken over the business and/or assets of the National Shipyard and Engineering Co., Inc., and other government-owned or controlled entities.

xxx xxx xxx

In the case at bar, there was adequate justification to vote the incumbent directors out of office and elect others in their stead because the evidence showed prima facie that the former were just tools of President Marcos and were no longer owners of any stock in the firm, if they ever were at all. This is why, in its Resolution of October 28, 1986; this Court declared that -

Petitioner has failed to make out a case of grave abuse or excess of jurisdiction in respondents' calling and holding of a stockholders' meeting for the election of directors as authorized by the memorandum of the President (to the PCGG) dated June 26, 1986, particularly, where as in this case, the government can, though its designated directors, properly exercise control and management over what appear to be properties and assets owned and belonging to the government itself and over which the persons who appear in this case on behalf of BASECO have failed to show any right or even any shareholding in said corporation."

In contrast, respondents in the instant case are the registered stockholders. No evidence was presented before the Sandiganbayan showing that respondents are mere "tools of President Marcos and were no longer owners of any stock in the firm if they ever were at all."

Nor has it been shown that the sequestered UCPB shares of stock were inexplicably acquired by respondents. Respondent Cojuangco Jr. obtained his shares by virtue of an agreement with the Philippine Coconut Authority (PCA) whereby, as compensation for exercising his personal and exclusive option to acquire UCPB shares, Cojuangco Jr. would receive 1 share for every 9 acquired by PCA. The UCPB shares of stock in the name of the 1,405,366 coconut-farmers, on the other hand, were distributed to them by virtue of Presidential Decree No. 755, which authorized the distribution of UCPB’s shares of stock, free, to coconut farmers. Other UCPB shares were acquired by the CIIF companies. It is precisely the validity of these acquisitions which is under litigation in the main case pending with the Sandiganbayan.

The view expressed by the majority that the UCPB shares, having been acquired with the use of coconut levy funds, and, therefore belong to the government, may very well turn out to be correct. However, since these issues are still pending litigation at the Sandiganbayan, it would be premature, I submit, to rule on this point at this time. Verily, the validity of the acquisition by Cojuangco Jr., et al. of their UCPB shares is the very lis mota of the action for reconveyance, accounting, reversion, and restitution filed by the PCGG with the Sandiganbayan. To rule on this matter would be to preempt said court.

Too, the argument that the coconut levy funds used to purchase the sequestered UCPB shares of stock are public funds does not appear to have been raised before the Sandiganbayan; consequently, the Sandiganbayan did not rule on the nature of the fund. It would be absurd to hold that the Sandiganbayan gravely abused its discretion in not holding that the sequestered shares belong prima facie to the government, the issue of whether or not coconut levy funds are public funds not having been raised before it.

Moreover, and as mentioned earlier, the nature of the funds used is a matter which should be decided first-hand by the Sandiganbayan when it resolves the merits of Civil Case No. 0033-A. Note should also be taken of the fact that the determination of whether the coconut levy funds are public funds involves the ascertainment of the constitutionality of Section 5, Article III of Presidential Decree No. 961 and Section 5, Article III of Presidential Decree No. 1468, both of which contain the following identical provisions:

Section 5. Exemptions.- The Coconut Consumers Stabilization Fund and the Coconut Industry Development Fund as well as all disbursements of said Funds for the benefit of the coconut farmers as herein authorized shall not be construed or interpreted, under any law or regulation, as special or fiduciary funds, or as part of the general funds of the national government within the contemplation of P.D. 771; nor as a subsidy, donation, levy, government funded investment or government share within the contemplation of P.D. 898, the intention being that said Fund and the disbursements thereof as herein authorized for the benefit of the coconut farmers shall be owned by them in their own private capacities.

Presidential Decrees No. 961 and 1468 have not been repealed, revoked, or declared unconstitutional, hence they are presumed valid and binding. Without a previous declaration of unconstitutionality, the coconut levy funds may not thus be characterized as prima facie belonging to the government. That issue must first be resolved by the Sandiganbayan. In fact, when the Solicitor General, in G.R. No. 96073, filed a motion to declare the coconut levies collected pursuant to the various issuances as public funds and to declare Section 5, Article III of Presidential Decree No. 1468 as unconstitutional, the Court denied the same in a Resolution dated March 26, 1996.

Parenthetically, in Philippine Coconut Producers Federation, Inc. vs. PCGG (supra), the Court ruled that the fund is "affected with public interest," implying that the fund is private in character. If the coconut levy funds were public funds, then the Court would have so held and there would be no reason to describe the same as funds "affected with public interest." It may not, thus, be immediately said that the coconut levy funds are public funds, the resolution of the issue being left, at the first instance, with the Sandiganbayan.

And if it is to be recalled, the issue involved herein is whether or not the Sandiganbayan committed grave abuse of discretion when it issued the disputed order allowing respondents to vote the UCPB shares of stock registered in their names. The question of whether the coconut levy funds are public funds is not in issue here. In fact, the constitutionality of Presidential Decrees No. 961 and 1468 have not been raised by the PCGG during the proceedings before the Sandiganbayan.

Moreover, it should be pointed out that the avowed purpose of sequestration is to preserve the assets sequestered to assure that if, and when, judgment is rendered in favor of the petitioner, the judgment may be implemented. "Preservation", not "deprivation" before judgment, is its essence. That is why in BASECO, we emphasized:

d. No Divestment of Title Over Property Seized

It may perhaps be well at this point to stress once again the provisional, contingent character of the remedies just described. Indeed the law plainly qualifies the remedy of takeover by the adjective, "provisional." These remedies may be resorted to only for a particular exigency: to prevent in the public interest the disappearance or dissipation of property or business, and conserve it pending adjudgment in appropriate proceedings of the primary issue of whether or not the acquisition of title or other right thereto by the apparent owner was attended by some vitiating anomaly. None of the remedies is meant to deprive the owner or possessor of his title or any right to the property sequestered, frozen or taken over and vest it in the sequestering agency, the Government or other person. This can be done only for the causes and by the processes laid down by law.

That this is the sense in which the power to sequester, freeze or provisionally take over is to be understood and exercised, the language of the executive orders in question leaves no doubt. Executive Order No.1 declares that the sequestration of property the acquisition of which is suspect shall last "until the transactions leading to such acquisition ... can be disposed of by the appropriate authorities.” Executive Order No. 2 declares that the assets or properties therein mentioned shall remain frozen “pending the outcome of appropriate proceedings in the Philippines to determine whether any such assets or properties were acquired” by illegal means. Executive Order No. 14 makes clear that judicial proceedings are essential for the resolution of the basic issue of whether or not particular assets are “ill-gotten,” and resultant recovery thereof by the Government is warranted.

(pp. 211-212.)

In the instant case, however, the actuations of PCGG with regard to the sequestered shares partake more of deprivation rather than preservation. As pointed out by respondents, since 1986, only one (1) stockholders’ meeting of UCPB has been held. At this meeting, PCGG voted all of the shares, as a result of which all members of the Board of UCPB, since 1986 to the present, have been PCGG nominees. When vacancies in the Board occur because of resignation, replacements are installed by the remaining members of the Board - on nomination of the PCGG. The stockholders’ meeting scheduled on March 6, 2001 would have been the first stockholders’ meeting since 1986 at which registered stockholders would exercise their right to vote and by their vote elect the members of the Board of Directors.

Also, the shares of stock in UCPB were sequestered in 1986. The civil action “Republic of the Philippines v. Eduardo M. Cojuanco, Jr., Civil Case No. 033,” was instituted before the Sandiganbayan on July 30, 1987. This action included, among other things, the UCPB shares of stock and was filed to maintain the effectivity of the writs of sequestration pursuant to Section 26, Article XVIII of the Constitution. Notwithstanding the lapse of more than 14 years, the proceedings have barely gone beyond the pre-trial stage. PCGG’s exercise of the right to vote the sequestered shares of stock for a period of 14 years constitutes effectively a deprivation of a property right belonging to the registered stockholders (18 Am. Jur. 2d, Corporations 2d Section 1065, p. 859, citing cases), a state of affairs not within the contemplation of "sequestration" as a means of preservation of assets.

To recapitulate, evaluated in accordance with applicable jurisprudence, I hold that the issuance by respondent Sandiganbayan of its impugned Order dated February 28, 2001, is clearly not an act committed in grave abuse of discretion. Simply put, petitioner PCGG failed to persuade the Sandiganbayan - on the basis of the "two-tiered test" enunciated by this Court in the San Miguel case, supra - that it is entitled to vote the UCPB sequestered shares. Verily, the Sandiganbayan was duty-bound to comply with the jurisprudence laid down by the Court on the matter. This is certainly not a case of abuse, much more grave abuse of discretion, on the part of respondent Sandiganbayan.

I regret to say that I find unacceptable the contention that the "law of the case" herein should be the Resolution dated February 16, 1993 in Republic of the Philippines vs. Sandiganbayan, et al. For one, the UCPB shares of stock of respondents COCOFED, et al. and Ballares, et al. are not the subject of the case relied upon. Hence, the Resolution therein could not have referred to or covered said shares. For another, and more importantly, what is invoked by petitioner is, in effect, merely a restraining order which was not re-affirmed by the Court when we rendered the main decision in the said consolidated sequestration cases.

Rather, what I believe is truly applicable herein is the Court's decision in COCOFED vs. PCGG (178 SCRA 236 [1989]) wherein it was held that "the incidents concerning the voting of the sequestered shares, the COCOFED elections, and the replacement of directors, being matters incidental to the sequestration, should be addressed to the Sandiganbayan." Thus, the Sandiganbayan has been given by the Court full discretion to evaluate and to allow or disallow the duly registered stockholders of the UCPB shares to exercise the right to vote the said shares in the UCPB elections and/or appointment/replacement of its directors. If, as in the case at hand, the Sandiganbayan, in the exercise of its sound discretion and for justifiable reasons cited in its assailed Order of February 28, 2001, allowed herein private respondents to vote the sequestered shares in question, one would simply be at a loss to understand how such action could be said to be tainted with grave abuse of discretion.

FOR THE FOREGOING REASONS, I vote to DISMISS the instant petition for lack of merit.