THE Supreme Court (SC) has affirmed a decision of the Office of the Ombudsman dismissing a complaint filed by the Presidential Commission on Good Government (PCGG) in 2003 against former officials of the Development Bank of the Philippines and construction magnate Rodolfo Cuenca over behest loans that the latter received from the DBP.
The High Court upheld the dismissal of the complaint because of technicality.
It said the case was filed two days after the 10-year prescription period had lapsed.
In its November12, 2014 decision penned by Associate Justice Presbitero Velasco Jr., the tribunal gave the PCGG a refresher course on how to calculate the prescription period in the filing of criminal complaints. It noted that the PCGG then headed by Andres Bautista, filed the complaint only on January 6, 2003, two days past the 10-year window prescribed under an old decree covering discovery and institution of judicial investigation. The alleged crime was discovered on January 4, 1993.
The petition, which impleaded Ombudsman Conchita Carpio-Morales, among others, sought the annulment and setting aside of orders dated July 19, 2011 and March 8, 2012, rendered by the Office of the Ombudsman.
But Velasco reminded the PCGG that the rule had been spelled out as early as 1992 in People v. Duque and in 1999, 2006 and 2011 in similar PCGG cases also involving behest loans granted during the Marcos years.
“Similarly, in the 2011 Desierto case, we ruled that the ‘blameless ignorance’ doctrine applies, considering that the plaintiff therein had no reasonable means of knowing the existence of a cause of action,” he said.
“In this particular instance, we pinned the running of the prescriptive period to the completion by the Presidential Ad Hoc Fact-Finding Committee of an exhaustive investigation on the loans. We elucidated that the first mode under Section 2 of Act No. 3326 would not apply since during the Marcos regime, no person would have dared to question the legality of these transactions.”
The SC said this ruling was reiterated in Disini v. Sandiganbayan where “we counted the running of the prescriptive period from the date of discovery of the violation after the PCGG’s exhaustive investigation despite the highly publicized and well-known nature of the Philippine Nuclear Power Plant Project therein involved, recognizing the fact that the discovery of the crime necessitated the prior exhaustive investigation and completion thereof by the PCGG.”
On October 18, 1992, then-President Fidel Ramos issued Administrative Order 13 creating a Presidential Ad-Hoc Fact-Finding Committee on Behest Loans (Ad Hoc Committee). Ramos also issued Memorandum Order 61 prescribing certain criteria to be used by the committee as a guide in investigating and studying loans granted by government financing institutions.
The panel looked into the loans granted to Resorts Hotel Corp. (RHC), which in 1968 had a paid-up capital of P1 million. Cuenca, a business associate of then-President Ferdinand Marcos, owns 37.2 percent of RHC.
In 1969, RHC obtained a P9.7-million loan from DBP, allegedly to pay the balance of the purchase price of Baguio Pines Hotel and to construct an 8-story building.
In 1973, the loan was restructured and DBP granted the RHC P14.4 million and guaranteed another P11.2 million. In 1974, an additional loan of P8.9 million was granted to RHC for the expansion of its hotel project, and another P3.6 million to purchase 10 luxury buses. In 1975, an additional loan of P27.8 million was again granted to RHC for another expansion project, and in 1977, the company again obtained P11.3 million to refinance its unpaid obligations and partly to finance the construction of Taal Vista Lodge.
To secure the loans totaling P86.9 million, RHC offered as collaterals the assets that were acquired by these loans that included Taal Vista Lodge, Baguio Pines Hotel, Hotel Mindanao and the luxury buses.
In 1980, 40 percent of the amount were converted into DBP’s common shareholding in RHC, and the balance of P58.4 million was restructured. The pieces of property were foreclosed in 1983 with arrearages of P11.97 million.
On January 6, 2003, the PCGG filed a complaint against directors and officers of RHC at the Ombudsman for violation of the Anti-Graft and Corrupt Practices Act.
Morales dismissed the complaint, prompting the PCGG to elevate the case to SC.
The High Court, however, held that undoubtedly, “the ten-year period within which to institute the action has already lapsed, making it proper for the Ombudsman to dismiss petitioner’s complaint on the ground of prescription. This being the case, the filing by the PCGG is clearly belated.”
Associate Justices Mariano del Castillo, Martin Villarama Jr., Bienvenido Reye and Estela Perlas-Bernabe concurred with the verdict.