Coconut farmers join bid to block transfer of P1-billion funds

MANILA, Philippines — The biggest group of coconut farmers in the country joined the bid to stop the transfer of P1-billion coco levy funds to a private development firm.

The Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan (PKSMMN), Confederation of Coconut Farmers Organizations of the Philippines (CCFOP-Confed) and Alyansa sa Timawang Mag-uugmad sa Amihanang Mindanao (ATIMAN-Mindanao) asked the Supreme Court to reverse and set aside the 2017 ruling of its Third Division that voided a mortgage with the state-controlled United Coconut Planters Bank (UCPB) in favor of a development firm.

The groups also supported the bid to elevate the case to the full court for resolution of the appeal filed by UCPB.

Led by PKSMMN vice president Mao Andong Jr., the groups questioned how the SC came up with the amount of P430 million in cash and other properties that UCPB was required to pay spouses Felix and Carmen Chua and their firm after voiding the mortgage of Revere Realty and Development Corp. owned by businessman Jose Go in UCBP over their properties in Lucena City.

“On its face, the decision is absurd and the computations impossible to arrive at based on the contracts signed by the parties... It’s impossible for UCPB to be liable to pay Felix Chua P430 million when the subject matter of the case is Chua’s restructured loan to the bank amounting only to P204 million, which Chua did not fully pay,” Andong said.

Andong also questioned why UCPB was made to pay interest worth P200 million to the Chuas when the bank never borrowed money from Chua and the mortgaged properties remained in possession of Chua. 

Andong, also national president of Coconut Peasant Reform Alliance (COPRA), said they could not allow P1 billion in coco levy funds to go to the private litigants.

“We need to protect the interest of coconut farmers, who are the beneficial owners of coco levy funds and registered shareholders of UCPB,” he stressed.

The coconut farmers hold a 74-percent beneficial share in UCPB’s equity.

Jesus Arranza, also chairman of the Federation of Philippine Industries and former president of the United Coconut Association of the Philippines, earlier asked the high court to set aside the ruling.

He alleged SC’s Third Division might have violated the Court’s internal rules in resolving the case involving Lucena Grand Central Terminal Inc. (LGCTI).

Arranza claimed three justices – now Ombudsman Samuel Martires, now retired Noel Tijam and Alexander Gesmundo – voted to concur with the assailed decision after only two to three days since they were designated to the Third Division.

Arranza cited internal rules of SC, which require the writer of the decision to prepare the draft decision and send to the other justices at least seven days before voting.  

The UCPB stockholder asked the SC to correct the infirmity as he also called for resolution of the motions for reconsideration and to elevate the case to the full court that has not been acted upon for over one year already. 

In the ruling, the SC Third Division reversed the Court of Appeals’ March 2014 ruling that affirmed the UCPB mortgage of Revere over the property of spouses Felix and Carmen Chua.

In 1997, Go and the Chuas had entered into a joint venture to develop the 44-hectare property in Ilayang Dupay into a subdivision but did not push through. Still, several deeds of absolute sale were executed putting the lands in Revere’s name to hold in trust for the Chuas.

In the meantime, the Chuas executed a mortgage with UCPB to secure their personal loans and corporate obligations for the LGCTI.

Unknown to the Chuas, Go and Revere took out a mortgage over the same properties. When the land was foreclosed, the Chuas were prompted to ask UCPB to apply the proceeds only to their obligations and not Go’s, but the bank did not heed the request.

The SC agreed with the Chuas that they had not consented to Go’s mortgage over the land, which they still effectively owned.