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SECOND DIVISION

[G.R. No. 136506. August 23, 2001.]


REPUBLIC OF THE PHILIPPINES , petitioner, vs . THE HONORABLE
ANIANO A. DESIERTO as OMBUDSMAN, EDUARDO COJUANGCO, JR.,
JUAN PONCE ENRILE, MARIA CLARA LOBREGAT, ROLANDO DELA
CUESTA, JOSE ELEAZAR, JR., JOSE C. CONCEPCION, DANILO
URSUA, NARCISO PINEDA and AUGUSTO OROSA , respondents.

The Solicitor General for petitioner.


Estelito P. Mendoza for E.M. Cojuangco, Jr.
Ponce Enrile, Reyes & Manalastas for J. Ponce Enrile.
SYNOPSIS
On February 12, 1990 the Office of the Solicitor General (OSG) initiated the complaint
against private respondents for violation of R.A. No. 3019 before the Presidential
Commission on Good Government (PCGG). The complaint was subsequently referred to
the Office of the Ombudsman. It alleged, among others, that respondent Eduardo
Cojuangco, Jr. taking advantage of his close relationship with then President Marcos, had
caused the government, through the National Investment Development Corporation (NIDC)
to enter into a contract with him under terms and conditions grossly disadvantageous to
the government, and, in conspiracy with the respondents members of the UCPB Board of
Directors, in flagrant breach of the fiduciary duty as administrator-trustee of the Coconut
Industry Development Fund (CIDF), manipulated the said Fund resulting in the successful
siphoning of P840,789,855.53 of CIDF to his own corporation, the Agricultural Investors,
Inc. (AII) in violation of the Anti-Graft and Corrupt Practices Act, to the grave damage and
prejudice of public interest, the Filipino people, the Republic of the Philippines, and the
coconut farmers. Subsequently, Cojuangco, Jr. sought the dismissal of the complaint on
the ground of prescription. Graft Investigation Officer 1 Emora C. Pagunuran issued a
memorandum denominated as "Review and Recommendation" wherein she found that the
offense had already prescribed. It was approved by the Ombudsman who also ruled that
the same was filed beyond the prescriptive period of ten years as fixed under Sec. 11 of
R.A. No. 3019. Hence, this petition.
The Court ruled that R.A. No. 3019 being a special law, the commencement of the period
for the prescription for any act violating it is governed by Section 2 of Act No. 3326. As a
rule, if the commission of the crime is known, the prescriptive period shall commence to
run on the day it was committed. However, in cases where the time of commission is
unknown, prescription shall only run from its discovery and institution of judicial
proceedings for its investigation and punishment. Ordinarily, there is no problem in
determining the date when the crime consists of a series of acts, especially when some or
all of these acts are innocent in themselves. The Ombudsman should not have dismissed
the complaint on the basis of prescription which was erroneous. The Ombudsman should
have given the Solicitor General the opportunity to present his evidence and then resolve
the case for purposes of preliminary investigation. The assailed Review and
Recommendation dated August 6, 1998 of Graft Investigation Officer Emora C. Pagunuran,
and approved by Ombudsman Aniano A. Desierto is hereby reversed and set aside.
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SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; A.M. NO. 00-2-03-SC; APPLIES TO ALL
ACTIONS PENDING AND UNDETERMINED AT THE TIME OF PASSAGE; CASE AT BAR.
[T]his Court notes that the petitioner received a copy of the assailed memorandum dated
August 6, 1998 on August 28, 1998. Petitioner interposed a motion for reconsideration on
September 11, 1998. On October 28, 1998, petitioner received a copy of the order denying
its motion for reconsideration. Following Section 4 of Rule 65 of the 1997 Rules of Civil
Procedure, as amended by Circular No. 39-98, which took effect on September 1, 1998, the
instant petition should have been filed on December 13, 1998. Thus, since the instant
petition was filed only on December 28, 1998, it was filed fifteen (15) days beyond the
sixty (60) day reglementary period prescribed by the Rules. However, during the pendency
of the instant petition, the Court promulgated A.M. No. 00-2-03-SC, effective on September
1, 2000, which further amended Section 4 of Rule 65 of the 1997 Rules of Civil Procedure
to read as: "Sec. 4. When and where petition filed. The petition shall be filed not later than
sixty (60) days from notice of judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the sixty
(60) day period shall be counted from notice of the denial of said motion. . . ." Statutes
regulating procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. In that context and in view of the retroactive
application of procedural laws, the instant petition should thus be considered timely filed.
2.
POLITICAL LAW; CONSTITUTIONAL LAW; ACCOUNTABILITY OF PUBLIC OFFICERS;
IMPRESCRIPTIBILITY OF THE RIGHT OF THE STATE TO RECOVER UNLAWFULLY
ACQUIRED PROPERTIES; APPLIES ONLY TO CIVIL ACTIONS FOR RECOVERY OF ILLGOTTEN WEALTH. It has already been settled in Presidential Ad Hoc Fact-Finding
Committee on Behest Loans v. Desierto that Section 15 of Article XI of the Constitution
applies only to civil actions for recovery of ill-gotten wealth, and not to criminal cases such
as the complaint against the respondents in OMB-0-90-2808. Conversely, prescription of
criminal cases are governed by special laws on prescription.
3.
ID.; ID.; ID.; ID.; RETROACTIVE APPLICATION WILL RUN COUNTER TO ANOTHER
CONSTITUTIONAL PROVISION AGAINST EX POST FACTO LAW. [T]o construe Section
15, Article XI of the 1987 Constitution in order to give it retroactive application to the
private respondents will run counter to another constitutional provision, that is, Section 22,
Article III which provides that "No ex post facto law or bill of attainder shall be enacted." An
ex post facto law is defined, in part, as a law which deprives persons accused of crime of
some lawful protection of a former conviction or acquittal, or of the proclamation of
amnesty; every law which, in relation to the offense or its consequences, alters the
situation of a person to his disadvantage. A construction which raises a conflict between
different parts of the constitution is not permissible when by reasonable construction, the
parts may be made to harmonize.
ICacDE

4.
CRIMINAL LAW; REPUBLIC ACT NO. 3019 (ANTI-GRAFT AND CORRUPT PRACTICES
ACT); PRESCRIPTION OF OFFENSES; IF THE COMMISSION OF CRIME IS KNOWN, THE
PRESCRIPTIVE PERIOD SHALL COMMENCE TO RUN ON THE DAY IT WAS COMMITTED, IF
IT IS UNKNOWN, FROM DATE OF DISCOVERY THEREOF. The applicable provisions of
law on prescription of offenses are found in Article 90 and Article 91 of the Revised Penal
Code for offenses punishable thereunder and Act No. 3326 for those penalized by special
laws. R.A. No. 3019 being a special law, the commencement of the period for the
prescription for any act violating it is governed by Section 2 of Act No. 3326, which
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provides: "Sec. 2. Prescription shall begin to run from the day of the commission of the
violation of the law, and if the same be not known at the time, from the discovery thereof
and the institution of judicial proceedings for its investigation and punishment. The
prescription shall be interrupted when proceedings are instituted against the guilty person,
and shall begin to run again if the proceedings are dismissed for reasons not constituting
jeopardy." As a rule, if the commission of the crime is known, the prescriptive period shall
commence to run on the day it was committed. However, in cases where the time of
commission is unknown, prescription shall only run from its discovery and institution of
judicial proceedings for its investigation and punishment. Ordinarily, there is no problem in
determining the date when the crime consists of a series of acts, especially when some or
all of these acts are innocent in themselves.
5.
ID.; ID.; ID.; PRESIDENTIAL AD HOC FACT-FINDING COMMITTEE ON BEHEST LOANS
VS. DESIERTO (317 SCRA 272 [1999]); APPLICABLE IN CASE AT BAR. This issue
confronted this Court anew, albeit in a larger scale, in Presidential Ad Hoc Fact-Finding
Committee on Behest Loans v. Desierto. In the said recent case, the Board of Directors of
the Philippine Seeds, Inc. and Development Bank of the Philippines were charged with
violation of paragraphs (e) and (g) of Section 3 of R. A. No. 3019, by the Presidential Ad
Hoc Fact-Finding Committee on Behest Loans, created by then President Fidel V. Ramos to
investigate and to recover the so-called "Behest Loans", where the Philippine Government
guaranteed several foreign loans to corporations and entities connected with the former
President Marcos. As in the present case, the Ombudsman in that case dismissed the
complaint on the ground of prescription. In holding that the case had not yet prescribed,
this Court ruled that: "In the present case, it was well-nigh impossible for the State, the
aggrieved party, to have known the violations of R.A. No. 3019 at the time the questioned
transactions were made because, as alleged, the public officials concerned connived or
conspired with the "beneficiaries of the loans." Thus, we agree with the COMMITTEE that
the prescriptive period for the offenses with which the respondents in OMB-0-96-0968
were charged should be computed from the discovery of the commission thereof and not
from the day of such commission. . . . People v. Duque is more in point, and what was
stated there stands reiteration: In the nature of things, acts made criminal by special laws
are frequently not immoral or obviously criminal in themselves; for this reason, the
applicable statute requires that if the violation of the special law is not known at the time,
the prescription begins to run only from the discovery thereof i.e., discovery of the unlawful
nature of the constitutive act or acts." There are striking parallelisms between the said
Behest Loans Case and the present one which lead us to apply the ruling of the former to
the latter. First, both cases arose out of seemingly innocent business transactions;
second, both were "discovered" only after the government created bodies to investigate
these anomalous transactions; third, both involve prosecutions for violations of R.A. No.
3019; and, fourth, in both cases, it was sufficiently raised in the pleadings that the
respondents conspired and connived with one another in order to keep the alleged
violations hidden from public scrutiny.

6.
ID.; ID.; ID.; WHEN THE DATE OF DISCOVERY OF THE OFFENSE SHOULD BE
RECKONED. This Court's pronouncement in the case of Domingo v. Sandiganbayan is
quite relevant and instructive as to the date when the discovery of the offense should be
reckoned, thus: "In the present case, it was well-nigh impossible for the government, the
aggrieved party, to have known the violations committed at the time the questioned
transactions were made because both parties to the transactions were allegedly in
conspiracy to perpetrate fraud against the government. The alleged anomalous
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transactions could only have been discovered after the February 1986 Revolution when
one of the original respondents, then President Ferdinand Marcos, was ousted from office.
Prior to said date, no person would have dared to question the legality or propriety of
those transactions. Hence, the counting of the prescriptive period would commence from
the date of discovery of the offense, which could have been between February 1986 after
the EDSA Revolution and 26 May 1987 when the initiatory complaint was filed."
7.
POLITICAL LAW; ADMINISTRATIVE LAW; THE MEMORANDUM OF AGREEMENT IS
NOT NECESSARILY INCONSISTENT WITH THE EXISTENCE OF VIOLATION OF REPUBLIC
ACT NO. 3019; CASE AT BAR. we do not subscribe to the Ombudsman's view that P.D.
Nos. 961 and 1468 ipso facto served to insulate the private respondents from
prosecution. The "legislative imprimatur" allegedly granted by the then President Marcos
to the MOA is not necessarily inconsistent with the existence of a violation of R.A. No.
3019. . . . R.A. No. 3019, as applied to the instant case, covers not only the alleged onesidedness of the MOA, but also as to whether the contracts or transactions entered
pursuant thereto by private respondents were manifestly and grossly disadvantageous to
the government, whether they caused undue injury to the government, and whether the
private respondents were interested for personal gain or had material interest in the
transactions.
8.
REMEDIAL LAW; CRIMINAL PROCEDURE; PRELIMINARY INVESTIGATION; THE
SOLICITOR GENERAL SHOULD BE GIVEN THE OPPORTUNITY TO PRESENT HIS
EVIDENCE. The task to determine and find whether probable cause to charge the private
respondents exists properly belongs to the Ombudsman. We only rule that the Office of
the Ombudsman should not have dismissed the complaint on the basis of prescription
which is erroneous as hereinabove discussed. The Ombudsman should have given the
Solicitor General the opportunity to present his evidence and then resolve the case for
purposes of preliminary investigation. Failing to do so, the Ombudsman acted with grave
abuse of discretion.
DECISION
DE LEON, JR., J :
p

Before us is a petition for certiorari 1 which seeks to annul the Review and
Recommendation 2 dated August 6, 1998 of Graft Investigation Officer I Emora C.
Pagunuran, approved by Ombudsman Aniano A. Desierto, dismissing the petitioner's
complaint in OMB-0-90-2808 against private respondents Eduardo M. Cojuangco, Jr., Juan
Ponce Enrile, Maria Clara Lobregat, Rolando Dela Cuesta, Jose R. Eleazar, Jr., Jose C.
Concepcion, Danilo S. Ursua, Narciso M. Pineda and Augusto Orosa, for violation of
Republic Act No. 3019 otherwise known as the Anti-Graft and Corrupt Practices Act as
well as the Order 3 dated September 25, 1998 denying petitioner's subsequent motion for
reconsideration of the said Review and Recommendation.
ADHcTE

It appears that on February 12, 1990 the Office of the Solicitor General (OSG) 4 initiated the
complaint for violation of R.A. No. 3019 before the Presidential Commission on Good
Government (PCGG). The complaint was subsequently referred to the Office of the
Ombudsman 5 and docketed as OMB-0-90-2808. The referral of the case to the
Ombudsman was in line with our decision in Cojuangco, Jr. v. PCGG, 6 promulgated on
October 2, 1990, wherein we declared that while the PCGG has the power to conduct
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preliminary investigation, it "cannot possibly conduct the preliminary investigation of said


criminal complaints with the cold neutrality of an impartial judge", after having earlier
gathered evidence concerning alleged ill-gotten wealth against the respondents, and also
after having issued a freeze order against all properties of respondent Cojuangco, Jr. 7
The complaint alleged, inter alia, that respondent Cojuangco, Jr., taking advantage of his
close relationship with then President Marcos, had caused the latter to issue favorable
decrees to advance his personal and business interests, had caused the government
through the National Investment Development Corporation (NIDC) to enter into a contract
with him under terms and conditions grossly disadvantageous to the government, and, in
conspiracy with the aforenamed members of the UCPB Board of Directors, in flagrant
breach of the fiduciary duty as administrator-trustee of the Coconut Industry Development
Fund (CIDF), manipulated the said Fund resulting in the successful siphoning of Eight
Hundred Forty Million Seven Hundred Eighty-Nine Thousand Eight Hundred Fifty-Five
Pesos and Fifty-Three Centavos (P840,789,855.53) of CIDF to his own corporation, the
Agricultural Investors, Inc. (AII); and that respondents were directly or indirectly interested
for personal gain or had material interest in the transactions requiring the approval of a
board, panel or group of which they were members, in violation of the Anti-Graft and
Corrupt Practices Act to the grave damage and prejudice of public interest, the Filipino
people, the Republic of the Philippines, and the coconut farmers.
Apparently, during the early stage of the Martial Law rule of the then President Ferdinand E.
Marcos in 1972, respondent Eduardo "Danding" Cojuangco, Jr., through AII, a private
corporation owned and controlled by respondent Cojuangco. Jr., started to develop a
coconut seed garden in its property in Bugsuk Island, Palawan. 8
On November 14, 1974, Presidential Decree No. 582 was issued by then President Marcos,
9 which created the Coconut Industry Development Fund (CIDF). The CIDF is one of the
four (4) so-called "Coco-Levy Funds" set-up to revitalize the coconut industry. The CIDF
was envisioned to finance a nationwide coconut-replanting program using "precocious
high-yielding hybrid seednuts" to be distributed for free to coconut farmers. 1 0 Its initial
capital of One Hundred Million Pesos (P100,000,000.00) was to be paid from the Coconut
Consumers Stabilization Fund (CCSF), with an additional amount of at least twenty
centavos (P0.20) per kilogram of copra resecada out of the CCSF collected by the
Philippine Coconut Authority. 1 1
Six (6) days after the issuance of P.D. No. 582, or on November 20, 1974, at the instigation
of respondent Cojuangco, Jr., AII, represented by respondent Cojuangco, Jr. as Chairman
and President, and NIDC, represented by its Senior Vice-President, Augusto E. Orosa,
entered into a Memorandum of Agreement (MOA). Cojuangco had an exclusive contract
with Dr. Yann Fremond of the Research Institute for Oil and Oilseeds, granting the former
the exclusive right to establish and operate a seed garden for the production of Ivory
Coast Hybrid Seednuts, a hybrid developed by Dr. Fremond, and supposedly most suitable
for Philippine soil and climate. 1 2 AII and NIDC stipulated, in fine, that AII shall develop the
Bugsuk property for the growing of hybrid seednuts and sell the entire production to NIDC,
which shall in turn pay AII part of the costs in the development and operation of the seed
garden and the support facilities. 1 3
On June 11, 1978, President Marcos issued P.D. No. 1468, otherwise known as the
Revised Coconut Industry Code, substituting the United Coconut Planters Bank (UCPB) for
the NIDC as administrator-trustee of the CIDF. UCPB is a commercial bank acquired by the
government through the CCSF for the benefit of the coconut farmers. On August 27, 1982,
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President Marcos lifted the coconut levy. With the only financial source of the CIDF
depleted, UCPB had no choice but to terminate the agreement with the AII effective
December 31, 1982.
IaECcH

Adversely affected by this turn of events, AII demanded arbitration. A Board of Arbitrators
was created pursuant to the arbitration clause in the MOA. AII nominated Atty. Esteban
Bautista while UCPB designated Atty. Anacleto Dideles. In turn, the two appointed Atty.
Bartolome Carale, a professor at the UP College of Law, as third member and Chairman of
the Board.
On March 29, 1983, the Board of Arbitrators rendered a decision awarding to AII liquidated
damages for Nine Hundred Fifty-Eight Million Six Hundred Fifty Thousand Pesos
(P958,650,000.00) from the CIDF. From this award was deducted the Four Hundred
Twenty-Six Million Two Hundred Sixty-One Thousand Six Hundred Forty Pesos
(P426,261,640.00) advanced by the NIDC for the development of the seed garden, leaving
a balance due to AII amounting to Five Hundred Thirty-Two Million Three Hundred EightyEight Thousand Three Hundred Fifty-Four Pesos (P532,388,354.00). Costs of arbitration
and the arbitrator's fee of One Hundred Fifty Thousand Pesos (P150,000.00) were also
taken from the CIDF. 1 4
On April 19, 1983, the UCPB Board of Directors, composed of respondents Cojuangco, Jr.,
as President, Enrile as Chairman, Dela Cuesta, Zayco, Ursua and Pineda as members,
adopted Resolution No. 111-83, resolving to "note" the decision of the Board of
Arbitrators, allowing the arbitral award to lapse with finality.
The complaint filed by the Solicitor General alleged that the MOA "is a one-sided contract
with provisions clearly stacked up against the NIDC thereby placing the latter in a no-win
situation." It cited several stipulations in the contract to substantiate its claim, to wit: 1 5
1.

Under Section 9.1 of the MOA, neither party shall be liable for any loss or
damage due to the non-performance of their respective obligations
resulting from any cause beyond the reasonable control of the party
concerned. However, under Section 9.3, notwithstanding the occurrence of
such causes, the obligation of the NIDC to pay AII's share of the
development costs amounting to P426,260,000.00 would still remain
enforceable.

2.

Under Sec. 11.2, if NIDC fails to perform its obligations, for any cause
whatsoever, it will be liable out of the CIDF, not only for the development
costs, but also for liquidated damages equal to the stipulated price of the
hybrid seednuts for a period of five (5) years at the rate of 19,173,000
seednuts per annum, totaling P958,650.00. 1 6

3.

Under Section 11.3, while AII was given the right to terminate the contract
in case of force majeure, no such right was given in favor of NIDC.
Moreover, AII can do so without incurring any liability for damages.

4.

AII was only required to exert best efforts to produce a projected number of
seednuts while NIDC was required to set aside and reserve from CIDF such
amount as would insure full and prompt payment.

Respondent Cojuangco, Jr. sought the dismissal of the complaint on the ground of
prescription, citing the 1992 cases of People v. Sandiganbayan, 1 7 and Zaldivia v. Hon.
Andres B. Reyes. 1 8
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On December 29, 1997, Graft Investigation Officer (GIO) Manuel J. Tablada recommended
the dismissal of the case, which was subsequently assigned to GIO I Emora C. Pagunuran.
GIO I Pagunuran issued the assailed memorandum, denominated "Review and
Recommendation", dated August 6, 1998 wherein she found that the alleged offense had
allegedly prescribed. Following the case of People v. Sandiganbayan, GIO I Pagunuran
reckoned the prescription period from the date the Memorandum of Agreement was
entered into, or on November 20, 1974. As the case was filed only on February 12, 1990,
respondent Ombudsman ruled that the same was filed beyond the prescriptive period of
ten (10) years as fixed under Sec. 11 of R.A. No. 3019. In addition, the "Review and
Recommendation" ruled that the questioned MOA was expressly confirmed and ratified by
P.D. No. 961 1 9 (1976) and P.D. No. 1468 2 0 (1978) and, thus, was given "legislative
imprimatur."
TAIDHa

The OSG filed a Motion for Reconsideration dated September 11, 1998, arguing that (a)
the offense charged in the complaint falls within the category of an ill-gotten wealth case
which under the Constitution is imprescriptible; and (b) that void contracts are not subject
to ratification and/or confirmation. Inasmuch public respondent Ombudsman denied
petitioner's motion for reconsideration in the Order dated September 25, 1998, petitioner
interposed on December 28, 1998 the instant petition raising two (2) issues for resolution,
to wit: 2 1
I
WHETHER THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF DISCRETION IN
DECLARING THAT THE OFFENSE CHARGED IN THE COMPLAINT FOR VIOLATION
OF RA. NO. 3019 HAD ALREADY PRESCRIBED WHEN THE COMPLAINT WAS
FILED.
II
WHETHER THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF DISCRETION IN
DECLARING THAT THERE IS NO BASIS TO INDICT PRIVATE RESPONDENTS FOR
VIOLATION OF THE ANTI-GRAFT LAW BASED ON THE CONTRACT IN QUESTION.

Respondents aver that the instant petition for certiorari is but a mere attempt to substitute
for a lost appeal and was filed out of time. While the petitioner concedes that its petition
suffers from procedural infirmities, it urges this Court to exercise its equity jurisdiction.
At the outset, this Court notes that the petitioner received a copy of the assailed
memorandum dated August 6, 1998 on August 28, 1998. Petitioner interposed a motion
for reconsideration on September 11, 1998. On October 28, 1998, petitioner received a
copy of the order denying its motion for reconsideration. Following Section 4 of Rule 65 of
the 1997 Rules of Civil Procedure, as amended by Circular No. 39-98 2 2 , which took effect
on September 1, 1998, the instant petition should have been filed on December 13, 1998.
Thus, since the instant petition was filed only on December 28, 1998, it was filed fifteen
(15) days beyond the sixty (60) day reglementary period prescribed by the Rules. However,
during the pendency of the instant petition, the Court promulgated A.M. No. 00-2-03-SC, 2 3
effective on September 1, 2000, which further amended Section 4 of Rule 65 of the 1997
Rules of Civil Procedure to read as:
TEAcCD

SECTION 4.
When and where petition filed. The petition shall be filed
not later than sixty (60) days from notice of judgment, order or resolution. In case
a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the sixty (60) day period shall be counted from notice of the denial
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of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by
the Supreme Court. It may also be filed in the Court of Appeals whether or not the
same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of
its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial
agency, unless otherwise provided by law or these rules, the petition shall be filed
in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for compelling
reason and in no case exceeding fifteen (15) days. 2 4

Statutes regulating procedure of the courts will be construed as applicable to actions


pending and undetermined at the time of their passage. In that context and in view of the
retroactive application of procedural laws, 2 5 the instant petition should thus be
considered timely filed.
On the matter of prescription, before B.P. Blg. 195, which was approved on March 16,
1982, the prescription period for violation of the Anti-Graft Practices Act was ten (10)
years. The complaint for violation of R.A. No. 3019 was filed before the PCGG on February
12, 1990 or more than fifteen (15) years after the birth of the allegedly illegal contract.
The Solicitor General presents a novel theory to advance his view that the prescription
period in R.A. No. 3019 does not apply to respondents. The Solicitor General asserts that
the respondents are public officers within the coverage of the Anti-Graft Law since they
are being prosecuted as members and officers of the Board of Directors of the UCPB,
which was acquired by the government through the coco levy funds. He argues that while
the dismissed complaint is for violation of R.A. No. 3019, or the Anti-Graft and Corrupt
Practices Act, the prosecution thereof is actually a suit intended to recover ill-gotten
wealth from public officials, and therefore covered by R.A. No. 1379, entitled "An Act
Declaring Forfeited in Favor of the State Any Property Found to Have been Unlawfully
Acquired By Any Public Officer or Employee and Providing for the Procedure Therefor."
As this is supposedly a suit under R.A. No. 1379, the Solicitor General urges the Court to
follow its ruling in Republic v. Migrino, 2 6 which held that cases falling under the said law
are imprescriptible. According to Migrino, Sec. 2 of R.A. No. 1379 which provides that
petition for forfeiture of unlawfully acquired wealth shall prescribe within four (4) years
from the date of resignation, dismissal or separation or expiration of the officer or
employee concerned should be deemed amended or repealed by Section 15, Article XI of
the 1987 Constitution which provides:
The right of the State to recover properties unlawfully acquired by public officials
or employees, from them or their nominees, shall not be barred by prescription,
laches, or estoppel.

It has already been settled in Presidential Ad Hoc Fact-Finding Committee on Behest


Loans v. Desierto 2 7 that Section 15 of Article XI of the Constitution applies only to civil
actions for recovery of ill-gotten wealth, and not to criminal cases such as the complaint
against the respondents in OMB-0-90-2808. Conversely, prescription of criminal cases are
governed by special laws on prescription.
Furthermore, to construe Section 15, Article XI of the 1987 Constitution in order to give it
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retroactive application to the private respondents will run counter to another constitutional
provision, that is, Section 22, Article III which provides that "No ex post facto law or bill of
attainder shall be enacted." An ex post facto law is defined, in part, as a law which deprives
persons accused of crime of some lawful protection of a former conviction or acquittal, or
of the proclamation of amnesty; every law which, in relation to the offense or its
consequences, alters the situation of a person to his disadvantage. 2 8 A construction
which raises a conflict between different parts of the constitution is not permissible when
by reasonable construction, the parts may made to harmonize. 2 9
DA C TSa

We now turn to another novel theory of the Solicitor General. He claims that there are
"special circumstances" that would warrant the reckoning of the prescription period, not
from the date of the violation of the penalizing law because "it could not have been known
at that time", but from the EDSA Revolution of February 1986, which is supposedly the only
time that the offense could have been discovered. According to the Solicitor General: 3 0
It bears emphasizing that the criminal acts complained of against private
respondents in this case were committed during the Marcos regime. Private
respondents were closely associated with Marcos who unquestionably wielded
power and influence and/or who, by themselves, were also highly-placed in
government. Thus assuming that the offense charged is deemed to have been
committed upon the execution of the contract in question, who could have known
of the existence of this contract apart from the contracting parties thereto? Being
privies to the contract, would private respondents have initiated criminal suits
against themselves? Assuming that third persons to the contract knew of its
existence, was there a reasonable opportunity, or even political will, to prosecute
those involved in the execution of the questioned contract?

To recall, due to the abnormal situation obtaining at that time, no one dared
question the excesses and abscesses of the officialdom which is eloquently
exemplified by subject case.

The applicable provisions of law on prescription of offenses are found in Article 90 and
Article 91 of the Revised Penal Code for offenses punishable thereunder and Act No. 3326
for those penalized by special laws. R.A. No. 3019 being a special law, the commencement
of the period for the prescription for any act violating it is governed by Section 2 of Act No.
3326, 3 1 which provides:
SECTION 2.
Prescription shall begin to run from the day of the commission
of the violation of the law, and if the same be not known at the time, from the
discovery thereof and the institution of judicial proceedings for its investigation
and punishment.
The prescription shall be interrupted when proceedings are instituted against the
guilty person, and shall begin to run again if the proceedings are dismissed for
reasons not constituting jeopardy.

As a rule, if the commission of the crime is known, the prescriptive period shall commence
to run on the day it was committed. 3 2 However, in cases where the time of commission is
unknown, prescription shall only run from its discovery and institution of judicial
proceedings for its investigation and punishment. Ordinarily, there is no problem in
determining the date when the crime consists of a series of acts, especially when some or
all of these acts are innocent in themselves.
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The Ombudsman and private respondents relied on our ruling in People v. Sandiganbayan,
involving the prosecution of a Provincial Attorney who allegedly influenced officials in the
Bureau of Lands to issue a free patent in his favor. The prosecution advanced the theory
that the prescriptive period should not commence upon the filing of the application
because no one could have known about it except the accused and the Lands Inspector. In
rejecting his theory and ruling that "the date of the violation of the law becomes the
operative date of the commencement of the period of prescription", this Court
ratiocinated:
It is not only the Lands Inspector who passes upon the disposability of public
land . . . other public officials pass upon the application for a free patent
including the location of the land and, therefore, the disposable character thereof.
Indeed, practically all the department personnel, who had a hand in processing
and approving the application, namely . . . could not have helped "discovering"
that the subject of the application was nondisposable public agricultural land.

This issue confronted this Court anew, albeit in a larger scale, in Presidential Ad Hoc FactFinding Committee on Behest Loans v. Desierto. 3 3 In the said recent case, the Board of
Directors of the Philippine Seeds, Inc. and Development Bank of the Philippines were
charged with violation of paragraphs (e) and (g) of Section 3 of R.A. No. 3019, by the
Presidential Ad Hoc Fact-Finding Committee on Behest Loans, created by then President
Fidel V. Ramos to investigate and to recover the so-called "Behest Loans", where the
Philippine Government guaranteed several foreign loans to corporations and entities
connected with the former President Marcos. As in the present case, the Ombudsman in
that case dismissed the complaint on the ground of prescription. In holding that the case
had not yet prescribed, this Court ruled that:
In the present case, it was well-nigh impossible for the State, the aggrieved party,
to have known the violations of R.A. No. 3019 at the time the questioned
transactions were made because, as alleged, the public officials concerned
connived or conspired with the "beneficiaries of the loans." Thus, we agree with
the COMMITTEE that the prescriptive period for the offenses with which the
respondents in OMB-0-96-0968 were charged should be computed from the
discovery of the commission thereof and not from the day of such commission.
xxx xxx xxx

People v. Duque is more in point, and what was stated there stands reiteration: In
the nature of things, acts made criminal by special laws are frequently not
immoral or obviously criminal in themselves; for this reason, the applicable
statute requires that if the violation of the special law is not known at the time, the
prescription begins to run only from the discovery thereof i.e., discovery of the
unlawful nature of the constitutive act or acts. (Italics supplied)

There are striking parallelisms between the said Behest Loans Case and the present one
which lead us to apply the ruling of the former to the latter. First, both cases arose out of
seemingly innocent business transactions; second, both were "discovered" only after the
government created bodies to investigate these anomalous transactions; third, both
involve prosecutions for violations of R.A. No. 3019; and, fourth, in both cases, it was
sufficiently raised in the pleadings that the respondents conspired and connived with one
another in order to keep the alleged violations hidden from public scrutiny.
This Courts pronouncement in the case of Domingo v. Sandiganbayan 3 4 is quite relevant
and instructive as to the date when the discovery of the offense should be reckoned, thus:
CIAacS

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"In the present case, it was well-nigh impossible for the government, the aggrieved
party, to have known the violations committed at the time the questioned
transactions were made because both parties to the transactions were allegedly
in conspiracy to perpetrate fraud against the government. The alleged anomalous
transactions could only have been discovered after the February 1986 Revolution
when one of the original respondents, then President Ferdinand Marcos, was
ousted from office. Prior to said date, no person would have dared to question the
legality or propriety of those transactions. Hence, the counting of the prescriptive
period would commence from the date of discovery of the offense, which could
have been between February 1986 after the EDSA Revolution and 26 May 1987
when the initiatory complaint was filed." 3 5

We do not subscribe to the Ombudsman's view that P.D. Nos. 961 and 1468 ipso facto
served to insulate the private respondents from prosecution. The "legislative imprimatur"
allegedly granted by the then President Marcos to the MOA is not necessarily inconsistent
with the existence of a violation of R.A. No. 3019. Thus, Section 3, Article III of P.D. No. 961,
promulgated in 1976, reads:
SECTION 3.
Coconut Industry Development Fund. There is hereby created
a permanent fund to be known as Coconut Industry Development Fund which
shall be deposited, subject to the provisions of P.D. No. 755, with, and
administered and utilized by the Philippine National Bank subsidiary, the National
Investment and Development Corporation for the following purposes:
a)
To finance the establishment operation and maintenance of a
hybrid coconut seednut farm under such terms and conditions that may be
negotiated by the National Investment and Development Corporation with
any private person, corporation, firm or entity as would insure that the
country shall have, at the earliest possible time, a proper, adequate and
continuous supply of high-yielding hybrid seednuts and, for this purpose,
the contract entered into by the NIDC as herein authorized is hereby
confirmed and ratified; . . .
A similarly worded provision in P.D. 1468, promulgated in 1978, reads:
SECTION 3.
Coconut Industry Development Fund. There is hereby created
a permanent fund to be known as Coconut Industry Development Fund which
shall be administered and utilized by the bank acquired for the benefit of the
coconut farmers under P.D. 755 for the following purposes:
a)
To finance the establishment, operation and maintenance of a
hybrid coconut seednut farm under such terms and conditions that may be
negotiated by the National Investment and Development Corporation
(NIDC) with any private person, corporation, firm or entity as would insure
that the country shall have, at the earliest possible time, a proper, adequate
and continuous supply of high-yielding hybrid seednuts and, for this
purpose, the contract, including the amendments and supplements thereto
as provided for herein, entered into by NIDC as herein authorized is hereby
confirmed and ratified, and the bank acquired for the benefit of the
coconut farmers under P.D. 755 shall administer the said contract,
including its amendments and supplements, and perform all the rights and
obligation of NIDC thereunder, utilizing for that purpose the Coconut
Industry Development find; . . .

R.A. No. 3019, as applied to the instant case, covers not only the alleged one-sidedness of
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the MOA, but also as to whether the contracts or transactions entered pursuant thereto by
private respondents were manifestly and grossly disadvantageous to the government 3 6 ,
whether they caused undue injury to the government, 3 7 and whether the private
respondents were interested for personal gain or had material interest in the transactions.
38

The task to determine and find whether probable cause to charge the private respondents
exists properly belongs to the Ombudsman. We only rule that the Office of the
Ombudsman should not have dismissed the complaint on the basis of prescription which
is erroneous as hereinabove discussed. The Ombudsman should have given the Solicitor
General the opportunity to present his evidence and then resolve the case for purposes of
preliminary investigation. Failing to do so, the Ombudsman acted with grave abuse of
discretion.
WHEREFORE, the instant petition is hereby GRANTED. The assailed Review and
Recommendation dated August 6, 1998 of Graft Investigation Officer Emora C. Pagunuran,
and approved by Ombudsman Aniano A. Desierto, dismissing the petitioner's complaint in
OMB-0-90-2808, and the Order dated September 25, 1998 denying the petitioner's motion
for reconsideration, are hereby REVERSED and SET ASIDE.
TCASIH

The Ombudsman is hereby directed to proceed with the preliminary investigation of the
case OMB-0-90-2808.
No pronouncement as to costs.
SO ORDERED.

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.


Footnotes

1.

Under Rule 65 of the 1997 Rules of Civil Procedure.

2.

With Director Angel C. Mayoralgo, Jr., recommending approval, and reviewed by


Assistant Ombudsman Abelardo L. Aportadera, Jr., Rollo, pp. 38-41.

3.

Rollo, pp. 42-45.

4.

Then headed by Francisco I. Chavez.

5.

Rollo, pp. 46-54.

6.

190 SCRA 226 [1990].

7.

Id., p. 255.

8.

Rollo, p. 5.

9.

Further amending Presidential Decree No. 232, as amended, the development and
planting of early-breeding and high-yielding hybrid variety of coconut trees."

10.

Sec. 3-B, P.D. No. 232, as amended by P.D. No. 582.

11.

Ibid.

12.

Rollo, p. 119.

13.

Memorandum of Agreement between AII and NIDC, November 20, 1974, Rollo, pp. 55-

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73.
14.

Rollo, p. 51. The assailed Review and Recommendation dated August 6, 1998 provides
the amounts of P978,650,000.00 as liquidated damages and P461,261,640.00 as
advanced by the NIDC, Rollo, p. 38-A.

15.

Rollo, pp. 48-50.

16.

Should have been P958,600,000.00.

17.

211 SCRA 241 [1992].

18.

Id., p. 277.

19.

"An Act To Codify The Laws Dealing With The Development Of The Coconut And Other
Palm Oil Industry & For Other Purposes".

20.

"Revising Presidential Decree Numbered Nine Hundred Sixty One".

21.

Rollo, p. 13.

22.

Sec. 4.
Where and when petition to be filed. The petition may be filed not later
than sixty (60) days from notice of the judgment, order or resolution sought to be
assailed in the Supreme Court or, if it relates to the acts or omissions of a lower court or
of a corporation, board, officer of person, in the Regional Trial Court exercising
jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed
in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in
the Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts or omissions of
a quasi-judicial agency, and unless otherwise provided by the law or these Rules, the
petition shall be filed in and cognizable only by the Court of Appeals.

If the petitioner had filed a motion for new trial or reconsideration in due time after notice
of said judgment, order or resolution the period herein fixed shall be interrupted. If the
motion is denied, the aggrieved party may file the petition within the remaining period,
but which shall not be less than five (5) days in any event, reckoned from notice of such
denial. No extension of time to file the petition shall be granted except for the most
compelling reason and in no case to exceed fifteen (15) days. (Italics supplied).
23.

"Further Amending Section 4, Rule 65 of the 1997 Rules on Civil Procedure".

24.

Italics supplied.

25.

Presidential Commission on Good Government v. Hon. Aniano Desierto, et al., G.R. No.
140232, January 19, 2001, p. 5; Presidential Commission on Good Government v. Hon.
Aniano Desierto, et al., G.R. No. 140358 December 8, 2000, p. 5; Juanita Narzoles, et al. v.
NLRC, et al., G.R. No. 141959, September 29, 2000 pp. 5-6.

26.

189 SCRA 289 [1990].

27.

317 SCRA 272 [1999].

28.

Black's Law Dictionary, Fifth ed. [1979], p. 520, cited in People v. Sandiganbayan, see
Note No. 17, supra.

29.

Black on Interpretation of Laws, 2nd ed., pp. 23-25.

30.

Rollo, p. 26.

31

"An Act to Establish Periods of Prescriptions for Violations Penalized by Special Acts

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and Municipal Ordinances and to Provide When Prescription Shall Begin to Run."
32.

People v. Sandiganbayan, see Note No. 17, supra.

33.

See Note 27.

34.

322 SCRA 655 [2000].

35.

Id., pp. 663-664, Italics supplied.

36.

Sec. 3 (g), RA. 3019.

37.

Sec. 3 (e), RA. 3019.

38.

Sec. 3 (i), RA. 3019.

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