Title
Republic vs. Desierto
Case
G.R. No. 136506
Decision Date
Jan 16, 2023
A 1990 anti-graft case involving a disputed Coconut Industry Development Fund contract, dismissed by the Ombudsman but later partially reversed due to retroactive prescription laws and violations of the right to speedy disposition.

Case Summary (G.R. No. 136506)

Key Dates

• November 20, 1974 – MOA signed between NIDC (later UCPB) and Agricultural Investors, Inc. (AII)
• March 16, 1982 – Prescriptive period under RA 3019 extended from 10 to 15 years (BP 195)
• February 12, 1990 – Complaint filed by Republic before PCGG, later docketed OMB-0-90-2808 at the Ombudsman
• August 6, 1998 / October 9, 1998 – GIO review/recommendation and denial of reconsideration; Complaint dismissed as prescribed
• August 23, 2001; July 7, 2004; March 19, 2008 – Supreme Court proceedings on multiple rounds of certiorari petitions and remands
• January 16, 2023 – Final Supreme Court decision

Applicable Law

• Constitution (1987), Art. XI, Sec. 15 – imprescriptibility of actions to recover ill-gotten wealth; Art. III, Sec. 16 – right to speedy disposition of cases
• RA 3019, Sec. 11 (1960) – original 10-year prescriptive period for graft offenses
• BP 195 (1982) – extended prescriptive period to 15 years
• Act No. 3326 (1926) – rules on prescription for special penal laws (discovery rule; interruption by institution of proceedings)
• Rules on Summary Procedure (as amended) – commencement of criminal cases by complaint or information; interruption of prescription only by filing in court for covered offenses
• Rules of Court, Rule 65; A.M. No. 00-2-03-SC – period and form for certiorari petitions

Factual and Procedural Background

  1. Under PD 582 (1974), a Coconut Industry Development Fund (CIDF) was established and administered by NIDC (later ceded to UCPB under PD 1468). NIDC/UCPB contracted AII (owned/ controlled by Cojuangco, Jr.) to develop a hybrid seednut farm in Palawan, with provisions obliging the State to pay costs and liquidated damages, and granting one-sided benefits to AII.
  2. After the CCSF levy was lifted in 1982, UCPB terminated the MOA and AII sought arbitration, winning a PHP 958.65 million award in 1983. The UCPB board (including Enrile, Dela Cuesta, Ursua, Pineda) “noted” but did not challenge the award, allowing it to lapse into finality.
  3. In 1990 the Republic complained of RA 3019 violations by public officers and conspirators. After a lengthy preliminary investigation (1990–1998), the Ombudsman dismissed the Complaint as prescribed, on the view that the 10-year prescriptive period ran from the 1974 MOA execution and that the MOA had legislative imprimatur (PD 961, PD 1468 ratification).

Issues Presented

I. Whether the Ombudsman gravely abused its discretion by declaring the graft offense prescribed.
II. Whether the Ombudsman gravely abused its discretion by concluding no indictable basis under RA 3019.

Rulings on Procedural Propriety

– The appropriate remedy to assail an Ombudsman dismissal in a criminal preliminary investigation is a Rule 65 certiorari petition (not Rule 45) and must be filed within 60 days of notice of the denial of reconsideration (A.M. No. 00-2-03-SC applies retroactively). Republic’s petition, filed December 28, 1998, was timely.
– Respondents’ lack of early service did not justify outright dismissal of the petition; the Court relaxed strict service rules to accord substantial justice.

Rulings on Prescription and Grave Abuse of Discretion

  1. Prescriptive Period: Ten years under the 1960 RA 3019; later extensions (BP 195, RA 10910) are inapplicable retroactively.
  2. Reckoning Point: The “discovery rule” applies (Act No. 3326) because the MOA and its amendments were given legislative imprimatur by PD 582, 961, 1468, and facts were suppressed through conspiracy. The Republic could not have realistically challenged the MOA until after the 1986 Freedom Constitution mandated recovery of ill-gotten wealth.
  3. Interruption of Prescription: Filing the Complaint before the Ombudsman in 1990 tolled prescription (institution of preliminary investigation interrupts the period under Act No. 3326 and prevailing jurisprudence).
  4. Grave Abuse of Discretion:



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