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 O ce 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 O ce 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 agrant breach of the duciary 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 O cer 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 led beyond the
prescriptive period of ten years as xed 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 O cer Emora C. Pagunuran,
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 and approved by Ombudsman Aniano A. Desierto is hereby reversed and set aside.

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 led on December 13, 1998. Thus, since the instant
petition was led only on December 28, 1998, it was led fteen (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 led, 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 ILL-GOTTEN 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 de ned, 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 con ict
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
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 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 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 o cials concerned connived or
conspired with the "bene ciaries 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 su ciently 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
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 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 o ce.
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 one-
sidedness 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 nd whether probable cause to charge the private
respondents exists properly belongs to the Ombudsman. We only rule that the O ce 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 O cer 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 O ce 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 O ce of
the Ombudsman 5 and docketed as OMB-0-90-2808. The referral of the case to the
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 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
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 agrant
breach of the duciary 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 nance 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 ne, 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
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 the NIDC as administrator-trustee of the CIDF. UCPB is a commercial bank acquired by the
government through the CCSF for the bene t of the coconut farmers. On August 27, 1982,
President Marcos lifted the coconut levy. With the only nancial 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 Eighty-
Eight 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 led 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 ve (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
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 prescription, citing the 1992 cases of People v. Sandiganbayan, 17 and Zaldivia v. Hon.
Andres B. Reyes. 1 8
On December 29, 1997, Graft Investigation O cer (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 led only on February 12, 1990,
respondent Ombudsman ruled that the same was led beyond the prescriptive period of
ten (10) years as xed under Sec. 11 of R.A. No. 3019. In addition, the "Review and
Recommendation" ruled that the questioned MOA was expressly con rmed and rati ed 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 led 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 rati cation and/or con rmation. 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 in rmities, 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 led on December 13, 1998.
Thus, since the instant petition was led only on December 28, 1998, it was led fteen
(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

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 SECTION 4. When and where petition filed. — The petition shall be
led not later than sixty (60) days from notice of judgment, order or resolution. In
case a motion for reconsideration or new trial is timely led, whether such motion
is required or not, the sixty (60) day period shall be counted from notice of the
denial of said motion.
The petition shall be led in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, o cer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as de ned by
the Supreme Court. It may also be led 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 led
in and cognizable only by the Court of Appeals.

No extension of time to le 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 led 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 o cers within the coverage of the Anti-Graft Law
since they are being prosecuted as members and o cers 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 o cials, 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 o cer 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
o cials 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
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 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 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 de ned, 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 con ict 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 in uence 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 o cialdom 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
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 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 and private respondents relied on our ruling in People v.
Sandiganbayan, involving the prosecution of a Provincial Attorney who allegedly in uenced
o cials 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 ling 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 o cials 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
Fact-Finding 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 o cials concerned
connived or conspired with the "bene ciaries 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
su ciently raised in the pleadings that the respondents conspired and connived with one
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 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

"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 nance 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, rm 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 bene t of
the coconut farmers under P.D. 755 for the following purposes:
a) To nance 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, rm 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
con rmed and rati ed, and the bank acquired for the bene t of the
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 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 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. 3 8
The task to determine and nd whether probable cause to charge the private
respondents exists properly belongs to the Ombudsman. We only rule that the O ce 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 O cer 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."
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 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-
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
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 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
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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