76 Republic v Desierto, G.R. No.

136506, 23 August 2001, 363 SCRA 585

On November 14, 1974, Presidential Decree No. 582 was issued by then President Marcos,
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. 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.
[9]

[10]

[11]

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. 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.
[12]

[13]

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, 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.
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 arbitrators fee of One
Hundred Fifty Thousand Pesos (P150,000.00) were also taken from the CIDF.
[14]

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.

WHETHER THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF

DISCRETION IN DECLARING THAT THE OFFENSE CHARGED IN THE
COMPLAINT FOR VIOLATION OF R.A. NO. 3019 HAD ALREADY
PRECRIBED WHEN THE COMPLAINT WAS FILED.
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 , 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:
[22]

[23]

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.
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.
[24]

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.
[25]

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.

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.
[35]

We do not subscribe to the Ombudsmans 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 1, Article III of P.D. No. 961,
promulgated in 1976, reads:

SEC. 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; x x x
A similarly worded provision in P.D. 1468, promulgated in 1978, reads:
SEC. 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; x x x
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.
[36]

[37]

[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.