G.R. No. L-77194 March 15, 1988
VIRGILIO GASTON, ET AL., petitioners, vs. REPUBLIC PLANTERS BANK, PHILIPPINE SUGAR COMMISSION, and SUGAR REGULATORY ADMINISTRATION, respondents.

FACTS

Petitioners, sugar producers, planters, and millers, filed a petition for mandamus to compel the privatization of Republic Planters Bank by transferring its shares of stock, held in the name of the Philippine Sugar Commission (PHILSUCOM), to the sugar producers. They claimed beneficial ownership over these shares, asserting they were purchased using a “stabilization fund” collected from them pursuant to Presidential Decree No. 388. This decree mandated a deduction of P1.00 per picul from sugar proceeds starting in 1978-79, which fund was to be “administered in trust” by PHILSUCOM for industry development. Respondents PHILSUCOM and its successor, the Sugar Regulatory Administration (SRA), opposed the petition, arguing the collected fees were public funds, not funds held in private trust, and that the transfer sought would be irregular.

ISSUE

The core issues were whether the stabilization fees collected under P.D. No. 388 constituted funds held in trust for the specific sugar producers who paid them, or were public special funds; and consequently, whether the bank shares purchased with these funds belonged to PHILSUCOM (and thus the government) or to the individual sugar planters and millers.

RULING

The Supreme Court denied the petition for mandamus, ruling that the stabilization fees were public special funds and not funds held in an implied or resulting trust for the benefit of the individual contributors. The Court acknowledged that Section 7 of P.D. No. 388 used the phrase “administered in trust.” However, it held this did not create a private fiduciary trust where the contributors were the beneficiaries entitled to a proportional share of the assets purchased. The doctrine of resulting trusts, founded on the presumed intention of the parties, could not apply as no such intention was clearly ascertainable from the law. The levy was a statutory exaction for a public purpose—the growth, development, and stabilization of the entire sugar industry, which was vital to the national economy. The fact that the funds were collected from the industry participants did not privatize them; it was rational as they were the primary beneficiaries of the industry-wide programs the fund would finance. The Court emphasized that revenues derived from such levies cannot be used for purely private purposes. The investment in the bank, a commodity bank for sugar, was aligned with the fund’s public objective. The ruling affirmed that the shares of stock remained assets of PHILSUCOM, a government entity, and were not subject to distribution to individual sugar producers.