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.

FACTS

On February 12, 1990, the Office of the Solicitor General (OSG) filed a complaint before the Presidential Commission on Good Government (PCGG) against private respondents for violation of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The case was later referred to the Office of the Ombudsman and docketed as OMB-0-90-2808. The complaint alleged that respondent Eduardo Cojuangco, Jr., taking advantage of his relationship with then President Ferdinand Marcos, caused the issuance of favorable decrees and, in conspiracy with other respondents who were members of the United Coconut Planters Bank (UCPB) Board of Directors, manipulated the Coconut Industry Development Fund (CIDF). This manipulation allegedly resulted in the siphoning of P840,789,855.53 from the CIDF to Cojuangco’s corporation, Agricultural Investors, Inc. (AII), to the grave damage of the government and coconut farmers.
The factual background involves a Memorandum of Agreement (MOA) dated November 20, 1974, between AII (represented by Cojuangco) and the National Investment Development Corporation (NIDC, represented by respondent Augusto Orosa). The MOA stipulated that AII would develop a hybrid seednut garden in Bugsuk Island and sell its entire production to NIDC. The CIDF, created under Presidential Decree No. 582, was to finance a nationwide coconut-replanting program. Later, Presidential Decree No. 1468 (1978) substituted UCPB for NIDC as the administrator-trustee of the CIDF. When President Marcos lifted the coconut levy in 1982, UCPB terminated the agreement with AII. AII demanded arbitration. A Board of Arbitrators awarded AII liquidated damages of P958,650,000.00 from the CIDF on March 29, 1983. On April 19, 1983, the UCPB Board, which included respondents Cojuangco, Enrile, Dela Cuesta, Ursua, and Pineda, adopted Resolution No. 111-83, resolving to “note” the arbitral award and allowing it to lapse with finality.
The OSG’s complaint characterized the MOA as “one-sided” and grossly disadvantageous to the government. Respondent Cojuangco sought the dismissal of the complaint on the ground of prescription. Graft Investigation Officer I Emora C. Pagunuran, in a Review and Recommendation dated August 6, 1998, approved by Ombudsman Aniano A. Desierto, dismissed the complaint, finding that the offense had prescribed. The Ombudsman reckoned the prescription period from the date the MOA was entered into (November 20, 1974). Since the complaint was filed on February 12, 1990, it was beyond the 10-year prescriptive period under Section 11 of R.A. No. 3019 . The Ombudsman also ruled that the MOA was ratified by subsequent presidential decrees (P.D. No. 961 and P.D. No. 1468). The OSG’s motion for reconsideration was denied in an Order dated September 25, 1998. The Republic then filed this petition for certiorari.

ISSUE

Whether the Office of the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the complaint on the ground of prescription.

RULING

Yes, the Ombudsman committed grave abuse of discretion. The Supreme Court granted the petition, annulled the Ombudsman’s Review and Recommendation and Order, and remanded the case for further proceedings.
The Court held that the Ombudsman’s act of dismissing the complaint purely on the ground of prescription constituted a capricious and whimsical exercise of judgment, equivalent to grave abuse of discretion. The prescriptive period for offenses under R.A. No. 3019 is governed by Act No. 3326 . For offenses punishable under a special law (like R.A. No. 3019 ) where the penalty is a fine, the prescription period is twelve (12) years. The Ombudsman erroneously applied a ten-year period.
More importantly, the Court ruled that the prescriptive period should be computed from the day of the discovery of the offense, not merely from the day of its commission. The complaint alleged a continuing offense involving a conspiracy to manipulate the CIDF, culminating in the UCPB Board’s resolution on April 19, 1983, which allowed the arbitral award to become final. The actionable injury to the government was not complete until that resolution was passed. Therefore, prescription began to run from April 19, 1983. Counting the twelve-year period from that date, the filing of the complaint on February 12, 1990, was well within the prescriptive period.
The Court also found that the Ombudsman prematurely dismissed the case. The issue of prescription is intertwined with the factual question of when the offense was discovered, which requires a full-blown preliminary investigation to determine. By dismissing the case solely on prescription without conducting such an investigation, the Ombudsman deprived the petitioner of due process. The Court ordered the case remanded to the Ombudsman to conduct the proper preliminary investigation.