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[G.R. No. 131966. September 23, 2002.]




This refers to the petition for certiorari under Rule 65 of the Rules of Court brought by the Republic of the Philippines assailing the dismissal by the Office of the Ombudsman of the complaint filed by petitioner against herein private respondents in OMB-0-90-2811 for Violation of Republic Act No. 3019 (otherwise known as the Anti-Graft and Corrupt Practices Act, as amended) and other penal laws.

As borne by the records, in a Complaint dated February 27, 1990 filed by petitioners with the Presidential Commission on Good Government (PCGG), private respondents were charged with violation of R.A. 3019 and other penal laws, committed as follows:jgc:chanrobles.com.ph

"Respondents, in conspiracy with Dictator Ferdinand E. Marcos and other individuals whose identities and whereabouts may be established later, confederating together and mutually helping each other, acting in their official capacity members of the Governing Board of the Philippine Coconut Authority (PCA), a government agency under the Office of the President, being subordinates and close associates of the said Dictator Marcos, and also as members of the Boards of Directors of both the United Coconut Planters Bank (UCPB) and United Coconut Oil Mills, Inc. (UNICOM) which were acquired with the use of coconut levy funds being administered by them, in utter neglect of their fiduciary responsibilities and with intent to gain, taking undue advantage of their public office and close relationship with dictator Marcos, did then and there, with evident bad faith and manifest partiality knowingly, willfully and unlawfully misappropriated huge amounts of the coconut levy funds in connection with the acquisition of 16 oil mills only to be mothballed and assume the defaulted obligations of seven of the said mills in order to establish a monopoly, thus violating the provisions of RA 3019, as amended, and Art. 186 of the Revised Penal Code. . . ." 1

Pursuant to the Court’s ruling in Cojuangco, Jr. v. PCGG, et. a1. 2 prohibiting the PCGG from conducting preliminary investigation on the anti-graft and corrupt cases filed against respondents, the PCGG, in November, 1990, transmitted the case to the Office of the Ombudsman for appropriate action. The case was subsequently docketed as OMB-0-90-2811.chanrob1es virtua1 1aw 1ibrary

Thereafter, Graft Investigation Officer II Aleu A. Amante, issued a Resolution dated June 2, 1997, recommending the dismissal of the case, on the ground that there is "no sufficient evidence to engender a well-founded belief that violation of the Anti-Graft Law was committed and that respondents are probably guilty thereof." 3 GIO II Amante opined that the acquisition by UNICOM of the 16 oil mills was done in accordance with a government declared policy embodied in P.D. 961, a valid law which has not been declared unconstitutional, and that the allegation that respondents induced the late President to issue the decrees and LOIs to institute monopoly in the coconut industry, as well as the allegation of undue injury to the government or the coconut farmers, is not substantiated by any evidence on record. 4 Public respondent Ombudsman approved the recommendation on July 4, 1997 5 and denied petitioner’s motion for reconsideration per his Order dated September 18, 1997 which are received by petitioner on November 3, 1997. 6

On January 2, 1998, Petitioner, through the PCGG, filed with this Court a motion for extension of time to file a petition for certiorari asking for an additional 10 days, or until January 12, 1998, within which to file the same. 7 Without awaiting resolution thereon, it filed the petition on January 12, 1998 8 on the following grounds:jgc:chanrobles.com.ph

"A. Respondents conveniently made use of the Law (P.D. 961, P.D. 1468 and LOI 926) to Carry Out their Grand Design to Establish a Coconut Monopoly to the Detriment of the Poor Coconut Farmers Despite the Fact that Nothing in the Law or Government Policy Justifies the Creation of Such Monopoly." 9

"B. There is no Legal Basis for the Contention that the Acts of Respondents of Establishing the Coconut Monopoly had already Been Decriminalized." 10

"C. The allegations in the Complaint Are Deemed Admitted, Respondents Having Failed to Submit Their Counter-Affidavit." 11

On February 11, 1998, the Court issued a Resolution denying petitioner’s motion for extension "there being no provision for a motion for extension of time to file a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure," and, without necessarily giving due course to the petition, respondents were required to file their Comment thereon. 12

In their Comment, respondents Regala and Concepcion maintain that: (1) the petition was filed out of time; (2) the petition was not filed by the Office of the Solicitor General as required by law; (3) respondent Ombudsman did not commit any grave abuse of discretion; (4) petitioner has no cause of action against them because their acts were performed in the course of their duties as counsels, citing Regala v. Sandiganbayan. 13chanrob1es virtua1 1aw 1ibrary

For her part, respondent Lobregat, aside from contending that the PCGG is not authorized to file the petition and that it was filed out of time, also argues that she acted in good faith and without criminal intent in committing the acts complained of, as these were duties mandated by law. 14

Public respondent Ombudsman, on the other hand, reiterates his position that the acts were made pursuant to LOI No. 926 and P.D. Nos. 961 and 1468, which are valid laws. 15

Respondent Cojuangco, Jr. alleges that: (1) the petition was filed out of time; (2) the petition is merely a substitute for a lost appeal; (3) the PCGG is not authorized to file the petition; (4) the offense has prescribed; (5) the case should have been dismissed due to the long and unreasonable delay in the conduct of the preliminary investigation; and (6) the Ombudsman did not commit any grave abuse of discretion. 16

The other respondents filed no comment on the petition.

The petition must be granted.

The preliminary issue to be resolved in this case is whether or not the petition should be entertained even though it was filed by the PCGG without the intervention of the Office of the Solicitor General (OSG).

True, the OSG is mandated to represent the Government in the Supreme Court and the Court of Appeals in all criminal proceedings, and in all civil actions and special proceedings in which the Government or any officer thereof in his official capacity is a party. 17 The OSG should have filed the instant petition in behalf of the Republic. However, the "ends of substantial justice" affords an exception thereto. 18 We have ruled if the ends of substantial justice would be better served, and the issues in the action could be determined in a more just, speedy and inexpensive manner, then the petition should be entertained. 19 Even assuming arguendo that the PCGG has no authority to file the petition, its unauthorized filing was ratified, and the defect was cured, when the OSG signed as co-counsel for the Republic in its Consolidated Reply. 20chanrob1es virtua1 1aw 1ibrary

With regard to the other issues raised: (1) whether or not the petition was filed out of time; (2) whether or not the offense charged had already prescribed; and (3) whether or not LOI No. 926, and P.D. Nos. 961 and 1468 protect respondents from prosecution for violation of R.A. 3019 and other penal laws — our very recent pronouncement in the case of "Republic of the Philippines, petitioner v. The Honorable Aniano Desierto, as Ombudsman, Eduardo Cojuangco, Jr., Juan Ponce Enrile, Maria Clara S. Lobregat, Rolando de la Cuesta, Jose Eleazar, Jr., Jose C. Concepcion, Danilo Ursua, Narciso Pineda and Augusto Orosa, respondents." 21 (Orosa case for brevity) resolved most, if not all, of such issues.

In the Orosa case, the complaint filed with Ombudsman likewise charged most of herein private respondents with violation of R.A. No. 3019. It was alleged in the complaint docketed as OMB-0-90-2808, that respondent Cojuangco, Jr., taking advantage of his close relationship with then President Marcos, caused the latter to issue favorable decrees to advance his personal and business interests; 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 members of the UCPB Board of Directors, in flagrant breach of the fiduciary duty as administrator-trustee of the Coconut Industry Development Fund (CIDF), manipulated said Fund resulting in the successful siphoning of P840,789,855.53 of CIDF to his own corporation, the Agricultural Investors, Inc. (AII); and that the 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. 22

The Ombudsman dismissed the complaint on grounds of prescription and that the contract between respondent and the NIDC was given "legislative imprimatur" by P.D. Nos. 961 (1976) and 1468 (1978). Brought before this Court on certiorari, we granted the petition and directed the Ombudsman to proceed with the preliminary investigation of OMB-0-90-2808.

A.M. No. 00-2-03-SC [effective September 1, 2000] amended the rules to the effect that the running of the 60-day reglementary period shall be reckoned from notice of the denial of the motion for reconsideration. We ruled in the Orosa case that although the petition was filed beyond the 60-day reglementary period for filing a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, the said amendment should be applied retroactively, and therefore, the petition should be considered as timely filed. 23

In the present case, petitioner’s motion for extension of time to file petition was denied per Resolution dated February 11, 1998, "there being no provision for a motion for extension of time to file a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure." 24 However, the same, A.M. No. 00-2-03-SC, which allows a maximum of 15 days extension to file a petition, was promulgated during the pendency of the instant petition. Hence, as in the Orosa case, herein petition, which was filed beyond the 60-day period but within the 10 days extension sought by petitioner, should also be considered as timely filed.chanrob1es virtua1 1aw 1ibrary

Further, we ruled in the Orosa case that the then applicable ten-year prescriptive period for violations of R.A. 3019 25 is governed by Section 2 of Act No. 3326, i.e., it shall commence to run on the day the offense was committed, if known; if the time of the commission is unknown, it shall run from discovery and institution of criminal proceedings for its investigation and punishment. Particularly, it was ruled:jgc:chanrobles.com.ph

"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." 26 (Emphasis ours)

Applying the foregoing ruling to the present case, the complaint filed on March 2, 1990 was therefore filed within the 10-year prescriptive period.

Moreover, we categorically held in the Orosa case that the fact the transactions were done pursuant to P.D. Nos. 961 and 1468 will not shield the respondents from being charged considering that prosecution for violations of R.A. 3019 involves questions as to whether the contracts or transactions entered pursuant thereto by the 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 interests in the transactions.

Similarly in the present case, contrary to the Ombudsman’s belief, LOI No. 926 and P.D. Nos. 961 and 1468 cannot protect private respondents from criminal prosecution as they are being charged with commission of acts tantamount to violations of R.A. 3019 and Article 186 of the Revised Penal Code.

Thus, in the same way we concluded in the Orosa case that the Ombudsman committed grave abuse of discretion in dismissing the complaint, and ordered the remand of the case for the determination of the existence of probable cause, viz.:jgc:chanrobles.com.ph

"The task to determine and find whether probable cause to charge the private respondents exists properly belongs to the Ombudsman. . . . 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." 27

we likewise find that the Ombudsman in the present case committed grave abuse of discretion in approving the dismissal of OMB-0-90-2811.

Lastly, we find that indeed, private respondents Regala and Conception should be dropped as parties-defendants in OMB-0-90-2811. In Castillo v. Sandiganbayan and the Republic of the Philippines, 28 we ordered the exclusion of lawyer Gregorio R. Castillo as party-defendant to the case. Citing Regala v. Sandiganbayan, First Division, 29 we elucidated:jgc:chanrobles.com.ph

"The fact of the lawyer-client relationship between petitioner and defendants Enriquezes and Panlilios was immediately raised by petitioner as one of his affirmative defenses. In the same vein, in Regala the professional relationship was raised merely as a defense by the defendant lawyers and was not yet proved during the trial. This notwithstanding, this Court struck out the complaint against the lawyers.chanrob1es virtua1 1aw 1ibrary

"x       x       x

"An argument is advanced that the invocation by petitioners of the privilege of attorney-client confidentiality at this stage of the proceedings is premature and that they should wait until they are called to testify and examine as witnesses as to matters learned in confidence before they can raise their objection. But petitioners are not mere witnesses. They are co-principals in the case for recovery of alleged ill-gotten wealth. They have made their position clear from the very beginning that they are not willing to testify and they cannot be compelled to testify in view of their constitutional right against self-incrimination and of their fundamental legal right to maintain inviolate the privilege of attorney-client confidentiality." 30

WHEREFORE, the petition for certiorari is GRANTED. The Resolution dated June 2, 1997 of Graft Investigation Officer II Aleu A. Amante, dismissing petitioner’s complaint in OMB-0-90-2811, approved by the Ombudsman, and, the Order dated September 18, 1997 denying petitioner’s motion for reconsideration, are hereby ANNULLED and SET ASIDE. The Ombudsman is hereby directed to proceed with the preliminary investigation of OMB-0-90-2811, and, to exclude respondents Teodoro D. Regala and Jose C. Conception as defendants therein.chanrob1es virtua1 1aw 1ibrary


Bellosillo, Mendoza, Quisumbing and Callejo, Sr., JJ., concur.


1. Original Records, Folder 1, p. 361.

2. G.R. Nos. 92319-92320; October 2, 1990.

3. Original Records, Folder 1, p. 783.

4. Id., pp. 783-784.

5. Id., p. 784.

6. Rollo, pp. 10 and 28.

7. Id., pp. 2-3.

8. Id., pp. 8-22.

9. Id., p. 11.

10. Id., p. 21.

11. Id., p. 22.

12. Id., p. 105.

13. Id., pp. 130-131.

14. Id., pp. 230-243.

15. Id., pp. 259-263.

16. Id., pp. 387-412.

17. Section 35(1), Chapter 12, Title III, Book IV of E.O. 292, or the Revised Administrative Code of 1987.

18. Narciso v. Sta. Romana-Cruz, 328 SCRA 505, 518 [2000].

19. Ibid.

20. Rollo, p. 451.

21. G.R. No. 136506, August 23, 2001.

22. Ibid.

23. Ibid.

24. Supra., Note 12.

25. Note; R.A. 3019, Section 11, was subsequently amended by B.P. Blg. 195 [March 16, 1982], to read as follows: (A)ll offenses punishable under this Act shall prescribe in fifteen years.

26. Republic of the Philippines v. The Honorable Aniano Desierto, Et Al., supra., citing Domingo v. Sandiganbayan, 322 SCRA 655 [2000].

27. Id.

28. G.R. No. 138231. February 21, 2002.

29. 262 SCRA 122 [1996].

30. Castillo v. Sandiganbayan and the Republic of the Philippines, supra. citing Regala v. Sandiganbayan, First Division, 262 SCRA 157-158.

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