Domingo vs. Sandiganbayan

The Court held that for violations of special laws where the commission of the crime is not known at the time of its perpetration, the prescriptive period commences to run only from the discovery of the unlawful nature of the constitutive acts. Because the alleged anomalous transactions were concealed by conspiracy and could only be discovered after the ouster of the Marcos regime in 1986, the filing of the complaint in 1987 validly interrupted the prescriptive period well within the ten- or fifteen-year window provided by R.A. No. 3019, as amended.

In July 1980, the Construction and Development Corporation of the Philippines (CDCP), through its Chairman Rodolfo M. Cuenca, applied for a US$40 Million Standby Letter of Credit with the Philippine National Bank (PNB) to secure a loan with the Republic National Bank of Dallas. Cuenca allegedly capitalized on his close personal association with then President Ferdinand E. Marcos to secure Marcos's intervention in approving the letter of credit and waiving collateral requirements. Petitioner Panfilo O. Domingo, then President of PNB, acceded to the pressure exerted by Marcos and facilitated the passage of PNB Board Resolution No. 144, which approved the letter of credit despite CDCP's collateral deficiency on previous accounts. Domingo subsequently recommended the approval of Board Resolution No. 180, allowing CDCP to use loan proceeds for other international projects and to forgo collateral requirements. When CDCP defaulted on its loan, PNB was forced to assume the obligation, suffering an undue injury amounting to US$29 Million, while CDCP received unwarranted benefits in the same amount.

• The Behest Loan Transaction: In July 1980, CDCP applied for a US$40 Million Standby Letter of Credit with PNB to secure a loan with the Republic National Bank of Dallas. CDCP Chairman Rodolfo Cuenca exploited his close personal association with then President Ferdinand Marcos to obtain Marcos's assistance in securing PNB Board approval and waiving collateral requirements. Petitioner Panfilo O. Domingo, then PNB President, acceded to Marcos's pressure and facilitated the passage of PNB Board Resolution No. 144, approving the letter of credit despite CDCP's collateral deficiency. Domingo also recommended the approval of Board Resolution No. 180, allowing CDCP to use loan proceeds for other international projects and to forgo collateral requirements.
• The Resulting Injury: CDCP subsequently defaulted on its loan. Consequently, PNB was unjustly forced to assume CDCP's obligation to the Republic National Bank of Dallas, amounting to US$29 Million, which likewise constituted unwarranted benefits to CDCP in the same amount.
• The Preliminary Investigation: On May 26, 1987, PNB filed a complaint with the Tanodbayan against Marcos, Cuenca, and Joaquin T. Venus, Jr. On September 1, 1987, the Special Prosecutor dropped Marcos from the complaint and directed that a subpoena be issued to Domingo. The subpoena was returned unserved because Domingo was no longer connected with PNB. It was only on February 6, 1992, that SPO III Diaz-Baldos ordered Domingo to submit a counter-affidavit, which he did on March 9, 1992. On July 9, 1992, SPO III Diaz-Baldos recommended prosecuting Domingo and Cuenca. The information was filed with the Sandiganbayan on July 30, 1992.

• Petitioner argued that his criminal liability had been extinguished by prescription because the prescriptive period commenced in July 1980 when the crime was allegedly committed and was only tolled on February 6, 1992, when he was impleaded. He maintained that the filing of the complaint with the Tanodbayan on May 26, 1987, did not validly interrupt the prescriptive period because the Tanodbayan had been divested of its authority to conduct preliminary investigations effective February 2, 1987.
• Petitioner contended that the facts charged in the information did not constitute an offense.
• Petitioner averred that the long and inordinate delay in the termination of the preliminary investigation and the filing of the information violated his right to a speedy trial.

• Respondent countered that the prescriptive period commenced from the discovery of the offense, which occurred after the February 1986 EDSA Revolution, because the alleged anomalous transactions were concealed by conspiracy. Thus, the filing of the complaint in 1987 validly interrupted the prescriptive period.
• Respondent argued that the information sufficiently alleged the ultimate facts constituting the offense under Section 3(e) of R.A. No. 3019.
• Respondent maintained that the delay in the preliminary investigation was not undue and was justified by the nullification of the Office of the Special Prosecutor's authority in Zaldivar v. Gonzales, the subsequent reorganization of the OSP, the retirement of the assigned prosecutor, and the need to afford petitioner the opportunity to file his counter-affidavit after the initial subpoena was returned unserved.

• Procedural Issues:
  • Whether the delay in the termination of the preliminary investigation and the filing of the information violated petitioner's right to speedy trial.
• Substantive Issues:
  • Whether the criminal action or liability has been extinguished by prescription.
  • Whether the facts charged in the information constitute an offense under Section 3(e) in relation to Section 4(a) of R.A. No. 3019.

• Procedural: The Court ruled that petitioner's right to a speedy trial and speedy disposition of cases was not violated. The determination of whether such right was violated requires a balancing of the length of delay, the reasons for the delay, the assertion or failure to assert the right by the accused, and the prejudice caused. The Court found that the delay was adequately justified by the nullification of the OSP's authority in Zaldivar, the reorganization of the OSP under R.A. 6770, the retirement of the assigned prosecutor, and the necessity of serving petitioner his subpoena to afford him due process. After petitioner filed his counter-affidavit in March 1992, the information was filed in due time on July 1992. The delay was deemed more beneficial than prejudicial to petitioner.
• Substantive: The Court ruled that the crime had not prescribed. Under Section 2 of Act No. 3326, if the violation of a special law is not known at the time of its commission, prescription begins to run only from the discovery of the unlawful nature of the acts. Because the parties were allegedly in conspiracy to perpetrate fraud against the government, the violations could only have been discovered after the February 1986 EDSA Revolution. The filing of the complaint in May 1987 validly interrupted the prescriptive period. Furthermore, only about one to six years had elapsed from the date of discovery to the interruption, well within the ten- or fifteen-year prescriptive period under R.A. No. 3019, as amended. On the sufficiency of the information, the Court held that the facts alleged hypothetically admitted by the motion to quash established all the essential elements of Section 3(e) of R.A. No. 3019, namely: (1) Domingo was a public officer; (2) he committed the offense in relation to his office; (3) he caused undue injury to PNB; (4) the injury was caused by giving unwarranted benefits to CDCP; and (5) he acted with evident bad faith and manifest partiality.

• Prescription for violations of special laws (Act No. 3326) — Prescription begins to run from the day of the commission of the violation, and if the same is not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. The prescription is interrupted when proceedings are instituted against the guilty person. The Court applied this doctrine to hold that because the anomalous transactions were concealed by conspiracy and could not have been discovered prior to the EDSA Revolution, the prescriptive period commenced from the date of discovery, not the date of commission in 1980.
• Test for sufficiency of information — A motion to quash on the ground that the facts averred do not constitute an offense must be resolved on the basis alone of the allegations in the information, whose truth and veracity are hypothetically admitted. Matters aliunde are not considered. The information need only state ultimate facts. The Court applied this test to find that the information sufficiently alleged the elements of the crime based on its face.
• Speedy trial/disposition balancing test — The right to speedy trial and speedy disposition of cases is a flexible concept. In determining whether the right has been violated, the factors to be considered and balanced are: (1) length of delay, (2) reasons for such delay, (3) assertion or failure to assert such right by the accused, and (4) prejudice caused by the delay. The Court applied this test to hold that the delay was justified and not prejudicial.

• "This simply means that if the commission of the crime is known, the prescriptive period shall commence to run on the day the crime was committed. However, if the violation of the special law is not known at the time of its commission, the prescription begins to run only from the discovery thereof, i.e., discovery of the unlawful nature of the constitutive act or acts."
• "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."
• "As a general proposition, a motion to quash on the ground that the allegations of the information do not constitute the offense charged, or any offense for that matter, should be resolved on the basis alone of said allegations whose truth and veracity are hypothetically admitted."

• Presidential Ad Hoc Fact Finding Committee on Behest Loans v. Desierto — Cited as controlling precedent for the rule that if the violation of a special law is not known at the time of its commission, prescription begins to run only from the discovery thereof.
• Zaldivar v. Sandiganbayan — Cited as the ruling that nullified the authority of the Office of the Special Prosecutor to conduct preliminary investigations, which necessitated the issuance of Administrative Order No. 1 by the Ombudsman and contributed to the delay in the investigation of the case.
• Tatad v. Sandiganbayan — Invoked by petitioner regarding the right to speedy trial; distinguished by the Court based on the factual circumstances surrounding the delay.
• Alvizo v. Sandiganbayan — Followed for the doctrinal rule that the determination of whether the right to speedy disposition of cases has been violated requires a balancing of factors: length of delay, reasons for delay, assertion of the right, and prejudice.

• Section 11, Republic Act No. 3019 (as amended by Batas Pambansa Blg. 195) — Provides the prescriptive period for offenses under the Anti-Graft and Corrupt Practices Act, originally ten years and increased to fifteen years. Applied to determine that the filing of the information was well within the prescriptive period.
• Section 2, Act No. 3326 — Provides the rules for computation of the prescriptive period for violations of special laws, stating that prescription begins from the day of commission or from discovery if the violation is not known at the time, and is interrupted when proceedings are instituted against the guilty person. Applied as the governing law on prescription.
• Section 3(e), Republic Act No. 3019 — Defines the corrupt practice of causing undue injury to any party or giving unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. Applied to determine if the information sufficiently alleged the elements of the offense.
• Section 4(a), Republic Act No. 3019 — Prohibits private individuals from capitalizing on or exploiting close personal relations with public officials to obtain benefits. Applied in relation to Section 3(e) to charge private individual Cuenca.

Puno, Ynares-Santiago

• Pardo (joined by Kapunan) — Dissented on the ground that the facts charged in the information do not constitute an offense. The dissent argued that the information failed to specifically allege the third element of causing actual injury or damage through manifest partiality, evident bad faith, or gross inexcusable negligence. As bank president, it was Domingo's duty to make recommendations on loan applications as business decisions; the information merely stated that Domingo "facilitated" or "recommended" approval, without alleging that these acts were done with manifest partiality, evident bad faith, or gross inexcusable negligence causing actual damage. Good faith being presumed, the incomplete facts in the information failed to convey the elements of the crime, warranting the quashal of the information.