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The Supreme Court recently affirmed the Office of the Ombudsman’s dismissal of graft and corruption charges under RA 3019, the Anti-Graft and Corrupt Practices Act, against, among others, Senate President Juan Ponce Enrile and Eduardo M. Cojuangco.
In an 11-page decision penned by Justice Roberto Abad, the Supreme Court En Banc, by a vote of six against three, junked the government’s petition. It ruled that Enrile, Cojuangco, and 16 others (Jose R. Eleazar Jr., Jose C. Concepcion, Rolando P. Dela Cuesta, Emmanuel M. Almeda, Hermenegildo C. Zayco, Narciso M. Pineda, Iñaki R. Mendezona, Danilo S. Ursua, Teodoro D. Regala, Victor P. Lazatin, Eleazar B. Reyes, Eduardo U. Escueta, Leo J. Palma, Douglas Lu Ym, Sigfredo Veloso, and Jaime Gandiaga) could no longer be prosecuted on the ground of prescription.
Justices Mariano C. Del Castillo, Lucas P. Bersamin, Martin S. Villarama Jr., Jose Portugal Perez, and Bienvenido L. Reyes concurred with the decision, while Justices Arturo D. Brion, Maria Lourdes P. A. Sereno, and Estela M. Perlas-Bernabe dissented. Acting Chief Justice Antonio T. Carpio, Justices Presbitero J. Velasco, Jr., Teresita J. Leonardo- De Castro, and Diosdado M. Peralta took no part in the proceedings, while Justice Jose Catral Mendoza was on official leave.
The Court held that although Section 15, Article XI of the 1987 Constitution provides that the right of the State to recover properties unlawfully acquired by public officials or employees is not barred by prescription, laches, or estoppel, the provision only applies to civil actions for recovery of ill-gotten wealth, not criminal cases such as the complaint against the respondents as settled in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto.
The Court pointed out that because RA 3019 is a special law, the 10-year prescriptive period should be computed in accordance with Section 2 of Act 3326, which provides, “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 therof and the institution of the judicial proceedings for its investigation and punishment.” The Court further explained that this provision provides “two rules for determining when the prescriptive period shall begin to run: first, from the day of the commission of the violation of the law, if such commission is known; and second, from its discovery, if not known, and the institution of judicial proceedings for its investigation and punishment.”
On April 25, 1977, Regala, Lazatin Reyes, Escueta and Palma incorporated United Coconut Oil Mills, Inc. (UNICOM) with an authorized capital stock of P100 million.
On August 29, 1979, the Board of Directors of United Coconut Planters Bank (UCPB) composed of Cojuangco, Enrile, the late Maria Clara L. Lobregat, Eleazar, Concepcion, Dela Cuesta, Almeda, Zayco, Pineda, Mendezona, and Ursua approved a resolution authorizing UCPB, theAdministrator of the Coconut Industry Investment Fund (CII Fund), “to invest not more than P500 million from the fund in the equity of UNICOM for the benefit of the coconut farmers.”
On September 4, 1979, UNICOM increased its authorized capital stock to 10 million shares without par value to P495 million. This was then approved on September 18, 1979 by the new set of UNICOM directors which included Cojuangco, Enrile Lobregat, Eleazar, Concepcion, Almeda, Mendezona, Regala, Lu Ym, Veloso, and Gandiaga.
About 10 years later or on March 1, 1990, the Office of the Solicitor General (OSG) filed a complaint for violation of Section 3(e) of RA 3019 against the respondents before the Presidential Commission on Good Government (PCGG), alleging that UCPB’s investment in UNICOM was “manifestly and grossly disadvantageous to the government since UNICOM had a capitalization of P5 million and it had no track record of operation.” The PCGG then filed the case before the Office of the Ombudsman in line with the ruling in Cojuangco, Jr. v. Presidential Commission on Good Government, which had disqualified the PCGG from conducting preliminary investigation in the case.
On March 15, 1999, the Office of the Special Prosecutor ruled that while “it found sufficient basis to indict respondents for violation of Section 3(e) of RA 3019, the action has already prescribed.” Subsequently, on May 14, 1999, the Office of the Ombudsman approved the recommendation. After the OSG’s motion for reconsideration was denied by the Ombudsman, the OSG filed the present petition.
The High Court explained that in the prosecution of behest loans, the prescriptive period must be reckoned “from the discovery of such loans.” The reason for this is that the government, as the aggrieved party could not have known that the loans existed when they were made. “They could only have been discovered after the 1986 EDSA Revolution when the people ousted President Marcos from office.” The Court, however, ruled that those circumstances were not present in this case.
“For one thing, what is questioned here is not the grant of behest loans that, by their nature, could be concealed from the public eye by the simple expedient of suppressing their documentations. What is rather involved here is UCPB’s investment in UNICOM, which corporation is allegedly owned by respondent Cojuangco, supposedly a Marcos crony. That investment does not, however, appear to have been withheld from the curious of from those who were minded to know like banks or competing businesses,” the Court held.
The Court noted that there was also no allegation that the Securities of Exchange Commission (SEC) denied the public access to UCPB’s investment in UNICOM during martial law.
It thus concluded that the last day for filing the action “was, at the latest, on February 8, 1990, about four years after martial law ended.” February 8, 1990 is 10 years from the date of registration with the SEC by UNICOM of the paid-up subscription of UCPB.
“Petitioner had known of the investment it now questions for a sufficiently long time yet it let those four years of the remaining period of prescription run its course before bringing the proper action,” the Court held. “Prescription of actions is a valued rule in all civilized states from the beginning of organized society. It is a rule of fairness,” it added. (G.R. 139930, Republic of the Philippines v. Cojuanco, Enrile et al, June 26, 2012)
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