PRESIDENTIAL AD HOC FACT-FINDING COMMITTEE vs DESIERTO, 528 SCRA 9

(G.R. No. 130140. October 25, 1999)

FACTS:
On 8 October 1992, President Fidel V. Ramos issued Administrative Order No. 13, creating the
Presidential Ad Hoc Fact-Finding Committee on Behest Loans, with the Chairman of the PCGG
as Chairman. In its FOURTEENTH (14TH) REPORT ON BEHEST LOANS to President Ramos, ,
the COMMITTEE reported that the Philippine Seeds, Inc., (PSI) of which the respondents in
OMB-0-96-0968 were the Directors, was one of the twenty-one corporations which obtained
behest loans. On 2 March 1996, the COMMITTEE through Orlando O. Salvador, the PCGG
consultant detailed with the COMMITTEE, filed with the OMBUDSMAN a sworn complaint
against the Directors of PSI and the Directors of the Development Bank of the Philippines who
approved the loans for violation of paragraphs (e) and (g) of Section 3 of Republic Act No. 3019,
otherwise known as Anti-Graft and Corrupt Practices.
ISSUE:
Does the imprescriptibility of the right of the State to recover ill-gotten wealth apply to both civil
and criminal cases?

WHETHER OR NOT THE PUBLIC RESPONDENT OMBUDSMAN GRAVELY

ABUSED HIS DISCRETION IN HOLDING THAT THE PRESCRIPTIVE
PERIOD IN THIS CASE SHOULD BE COUNTED FROM THE DATE OF THE
GRANT OF THE BEHEST LOANS INVOLVED, AND NOT FROM THE DATE
OF DISCOVERY OF THE SAME BY THE COMMITT
RULING:

he COMMITTEE argues that the right of the Republic of the Philippines to recover behest
loans as ill-gotten wealth is imprescriptible pursuant to the mandate of Section 15 of Article XI
of the Constitution, which provides:

The right of the State to recover properties unlawfully acquired by public officials or
employees, from them or from their nominees as transferees, shall not be barred by
prescription, laches, or estoppel.
Behest loans are part of the ill-gotten wealth which former President Marcos and his cronies
accumulated and which the Government through the PCGG seeks to recover. Besides, even
assuming ex gratia that the right to file criminal charges against the respondents is prescriptible,
the prescriptive period should be counted from the discovery of the crimes charged, and not from
the date of their commission. The ruling in Dinsay is not applicable to the case at bar. First, it is a
decision of the Court of Appeals; hence, it does not establish a doctrine and can only have a
persuasive value. Second, it involved a prosecution for estafa in that the accused disposed of his

property claiming that it was free from any lien or encumbrance despite the fact that a notice
of lis pendens was registered with the Registry of Deeds. The sale, cancellation of the accuseds
title, and issuance of a new title to the buyer could not have been concealed from the offended
parties or their lawyers because these transactions took place when the civil case involving the
said property and the offended parties was in progress. Third, Dinsay involved private parties,
while the instant case involves the Government and public officers. Fourth, the ruling is not
absolute, since no less than this Court in People vs. Monteiro[11] said:

[T]he period of prescription for the offense of failure to register with the SSS shall
begin from the day of the discovery of the violation if this was not shown at the time
of its commission. A contrary view would be dangerous as the successful concealment
of an offense during the period fixed for its prescription would be the very means by
which the offender may escape punishment. (Emphasis supplied)
No. The so-called imprescriptibility as provided in Section 15 of Article XI of the Constitution
applies only to civil actions for recovery of ill-gotten wealth, and not to criminal cases, such as
the complaint against the respondents in OMB-0-96-0968. This is clear from the proceedings of
the Constitutional Commission of 1986. Since the law alleged to have been violated, i.e.,
paragraphs (e) and (g) of Section 3, R.A. No. 3019, as amended, is a special law, the applicable
rule in the computation of the prescriptive period is Section 2 of Act No. 3326, as amended,
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 thereof and institution
of judicial proceedings for its investigation and punishment. In the present case, it was wellnigh impossible for the State, the aggrieved party, to have known the violations of R.A. No. 3019
at the time the questioned transactions were made because, as alleged, the public officials
concerned connived or conspired with the beneficiaries of the loans. Thus, the prescriptive
period for the offenses with which the respondents in OMB-0-96-0968 were charged should be
computed from the discovery of the commission thereof and not from the day of such
commission.
Art 12
An EX POST FACTO law has been defined as one:
1. which makes an action done before the passing of the law and which was innocent
when done criminal, and punishes such action;
2. which aggravates a crime or makes it greater than it was when committed;
3. which changes the punishment and inflicts a greater punishment than the law
annexed to the crime when it was committed;

4. which alters the legal rules of evidence and receives less or different testimony than
the law required at the time of the commission of the offense in order to convict the
defendant;
5. which assumes to regulate civil rights and remedies only, but in effect imposes a
penalty or deprivation of a right which when exercised was lawful; or
6. which deprives a person accused of a crime of some lawful protection to which he
has become entitled, such as the protection of a former conviction or acquittal, or a
proclamation of amnesty.
The constitutional proscription of ex post facto laws is aimed against the retrospectivity of
penal laws. Penal laws are acts of the legislature which prohibit certain acts ad establish
penalties for their violations; or those that define crimes, treat of their nature, and provide
for their punishment.
AO No. 13 does not mete out a penalty for the act of granting behest loans. It merely
creates the Presidential Ad Hoc Fact-Finding Committee on Behest Loans and provides the
frame of reference in determining the existence of behest loans. Not being penal laws, AO
No 13 and Memo Order No. 61 cannot be characterized as ex post facto laws.
Case law has it that the determination of probable cause against those in public office
during a preliminary investigation is a function that belongs to the Office of the
Ombudsman. The Ombudsman is empowered to determine, in the exercise of his discretion,
whether probable cause exists and to charge the person believed to have committed the
crime as defined by law. As a rule, courts should not interfere with the Ombudsman's
investigatory power, exercised through the Ombudsman Prosecutors, and the authority to
determine the presence or absence of probable cause, except when the finding is tainted
with grave abuse of discretion amounting to lack or excess of jurisdiction.
For one to have violated Section 3(e) of RA 3019, the following elements must be
established:
1. the accused must be a public officer discharging administrative, judicial, or official
functions;
2. he must have acted with manifest partiality, evident bad faith, or inexcusable
negligence; and
3. he must have caused undue injury to any party, including the government or given
any private party unwarranted benefits, advantage, or preference, in the discharge of
his functions.

Evidently, mere bad faith or partiality and negligence per se are not enough for one to be
held liable under the law. It is required that the act constitutive of bad faith or partiality
must, in the first place, be evident or manifest, while the negligent deed should be both
gross and inexcusable. Further, it is necessary to show that any or all of these modalities
resulted in undue injury to a specified party.
On the other hand, to be listed under Section 3(g), there must be a showing that private
respondents entered into a grossly disadvantageous contract on behalf of the government.
Petitioner did not satisfy either criterion.