Republic of the Philippines vs. Cojuangco, Jr.

The prescriptive period for violations of Section 3(e) of R.A. 3019 involving corporate investments reflected in public records begins to run from the date of the commission of the violation, not from the date of discovery, absent any allegation that the offenders suppressed public access to the records or connived to conceal the transaction.

On April 25, 1977, respondents (excluding Douglas Lu Ym, Sigfredo Veloso, and Jaime Gandiaga) incorporated United Coconut Oil Mills, Inc. (UNICOM) with an authorized capital stock of ₱100 million. Following multiple amendments to its capitalization, the UCPB Board of Directors, on August 29, 1979, approved Resolution 247-79 authorizing UCPB, as administrator of the Coconut Industry Investment Fund (CII Fund), to invest not more than ₱500 million in UNICOM equity for the benefit of coconut farmers. By September 18, 1979, a new set of UNICOM directors—comprising mostly the same individuals as the UCPB Board—approved a third amendment increasing UNICOM’s authorized capital stock to one billion shares and converting previously subscribed no-par value shares into voting common shares with a par value of ₱1. The government subsequently alleged that this conversion diluted its ₱495 million investment by ₱95 million, which was credited to the incorporators as unwarranted benefits. UNICOM filed its Certificate of Filing of Amended Articles of Incorporation with the SEC on February 8, 1980.

• Incorporation of UNICOM: On April 25, 1977, respondents incorporated UNICOM with an authorized capital stock of ₱100 million divided into one million shares at ₱100 par value. The incorporators subscribed to 200,000 shares and paid ₱5 million.
• First and Second Amendments: On September 26, 1978, UNICOM amended its capitalization to three million shares without par value, converting the original subscription to one million shares without par value, deemed fully paid by the ₱5 million already paid, and waiving the ₱15 million subscription receivables. On September 4, 1979, UNICOM increased its authorized capital stock to 10 million shares without par value, with UCPB subscribing to 4 million shares worth ₱495 million.
• The Questioned Transaction: On September 18, 1979, a new UNICOM Board of Directors—composed largely of UCPB directors—approved a third amendment increasing authorized capital stock to one billion shares with a par value of ₱1, divided into Classes A, B, and C. The 5 million no-par value shares (1 million from incorporators, 4 million from UCPB) were converted to 500 million Class "A" voting common shares at a ratio of 100:1.
• Public Filing: UNICOM filed its Certificate of Filing of Amended Articles of Incorporation with the SEC on February 8, 1980.
• Criminal Complaint: Nearly a decade later, on March 1, 1990, the OSG filed a complaint with the PCGG, alleging that UCPB’s investment was manifestly and grossly disadvantageous to the government because UNICOM had only a ₱5 million capitalization and no track record, and the conversion reduced the government’s ₱495 million investment by ₱95 million, which was credited to the incorporators as unwarranted benefits.

• Constitutional Imprescriptibility: Petitioner maintained that Section 15, Article XI of the 1987 Constitution, which provides that the right of the State to recover properties unlawfully acquired by public officials is not barred by prescription, laches, or estoppel, applies to the prosecution of offenses involving ill-gotten wealth.
• Discovery Rule: Petitioner argued that, assuming the offense is subject to prescription, the prescriptive period should be reckoned from the date of discovery—after the 1986 EDSA Revolution—because the government could not have known of the violation during martial law, and no person would have dared question the legality of the transaction prior to that time.

• Prescription: Respondents argued that the crime prescribed because the 10-year prescriptive period under the original Section 11 of R.A. 3019 began to run from the consummation of the act on September 18, 1979, or from the public filing with the SEC on February 8, 1980, both of which occurred long before the filing of the complaint on March 1, 1990.
• Lack of Probable Cause: Respondents claimed the complaint failed to show probable cause, pointing out that the conversion of shares did not change the total par value of the incorporators' shares, which remained at ₱5 million.

• Constitutional Imprescriptibility: Whether Section 15, Article XI of the 1987 Constitution, barring prescription for the recovery of ill-gotten wealth, applies to criminal prosecutions.
• Reckoning of Prescription: Whether the prescriptive period for the alleged violation of Section 3(e) of R.A. 3019 should be reckoned from the date of the commission of the offense or from the date of its discovery.
• Proper Remedy: Whether a petition for review on certiorari under Rule 45 is the proper remedy from an adverse resolution of the Office of the Ombudsman.

• Constitutional Imprescriptibility: Section 15, Article XI of the 1987 Constitution applies exclusively to civil actions for the recovery of ill-gotten wealth, not to criminal cases. Criminal prosecutions for offenses involving ill-gotten wealth remain subject to prescription.
• Reckoning of Prescription: The prescriptive period was correctly reckoned from the date of the commission of the offense. Under Section 2 of Act 3326, prescription begins from the day of the commission of the violation if known, or from its discovery if not known. Unlike behest loans that are concealed by their nature and by conspiracy, the UNICOM investment was evidenced by public records filed with the SEC. Because the transaction was a matter of public record accessible to anyone, and petitioner made no allegation that the SEC denied public access or that respondents connived to suppress knowledge of the investment, the "discovery rule" was inapplicable. The 10-year prescriptive period commenced on February 8, 1980, when UNICOM filed its Amended Articles with the SEC, and expired on February 8, 1990, prior to the filing of the complaint on March 1, 1990.
• Proper Remedy: Although the petition was denominated as a Rule 45 petition, it was treated as a special civil action for certiorari under Rule 65 because petitioner imputed grave abuse of discretion to the Ombudsman.

• Imprescriptibility of Ill-Gotten Wealth — Section 15, Article XI of the 1987 Constitution, which states that the right of the State to recover properties unlawfully acquired by public officials is not barred by prescription, laches, or estoppel, applies only to civil actions for recovery of ill-gotten wealth, not to criminal prosecutions arising from or related to such wealth.
• Prescription under Special Penal Laws (Act 3326) — For violations of special penal laws, prescription begins from the day of the commission of the violation if known, or from its discovery if not known, and the institution of judicial proceedings for its investigation and punishment. The discovery rule applies only when the offense was not known at the time of commission, such as when the parties conspired to conceal the transaction.
• Public Records as Constructive Notice — When an illegal transaction is evidenced by public documents or is a matter of public record open to inspection (such as SEC filings), the State is not permitted to plead ignorance of the act to evade the operation of the statute of limitations, and the prescriptive period runs from the date of commission.

• "What is rather involved here is UCPB’s investment in UNICOM, which corporation is allegedly owned by respondent Cojuangco, supposedly a Marcos crony. That investment does not, however, appear to have been withheld from the curious or from those who were minded to know like banks or competing businesses."
• "Prescription of actions is a valued rule in all civilized states from the beginning of organized society. It is a rule of fairness since, without it, the plaintiff can postpone the filing of his action to the point of depriving the defendant, through the passage of time, of access to defense witnesses who would have died or left to live elsewhere, or to documents that would have been discarded or could no longer be located."

• Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, 375 Phil. 697 (1999) — Controlling precedent establishing that the constitutional provision on imprescriptibility of ill-gotten wealth applies only to civil actions, not criminal cases.
• Domingo v. Sandiganbayan, 379 Phil. 708 (2000) — Cited in the concurring and dissenting opinion regarding the reckoning of the prescriptive period from the date of discovery for crimes committed during martial law.
• Romualdez v. Marcelo, 497 SCRA 89 (2006) — Followed regarding the computation of the prescriptive period and the inapplicability of Article 91 of the Revised Penal Code to special laws due to legislative omission in Act 3326.

• Section 15, Article XI, 1987 Constitution — Provides that the right of the State to recover properties unlawfully acquired by public officials is not barred by prescription, laches, or estoppel. Applied as limited to civil actions only.
• Section 3(e), Republic Act No. 3019 — Penalizes causing undue injury to any party, including the Government, or giving any private party unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. The subject of the criminal charge that was dismissed due to prescription.
• Section 11, Republic Act No. 3019 — Prior to its amendment by Batas Pambansa Blg. 195 in 1982, provided for a 10-year prescriptive period for offenses punishable under the Act. Applied because the acts complained of were committed before the 1982 amendment.
• Section 2, Act No. 3326 — Provides that prescription for violations of special laws begins from the day of the commission of the violation, and if not known, from the discovery thereof and the institution of judicial proceedings. Applied to determine that the prescriptive period began from the date of commission due to the public nature of the SEC filings.

Carpio, Velasco Jr., Leonardo-De Castro, Peralta, Del Castillo, Villarama Jr., Perez, Mendoza, Sereno, Reyes, Perlas-Bernabe. - Bersamin, J. — Concurred with the result but explicitly countered the dissent's application of Article 91 of the Revised Penal Code, arguing that the silence of Act 3326 on the effect of the accused's absence from the country constitutes a casus omissus that precludes suppletory application of the RPC, and that prescription laws must be construed liberally in favor of the accused.

• Brion, J. — Concurred with the dismissal of the petition as to the other respondents but dissented on the question of prescription with respect to respondent Eduardo M. Cojuangco, Jr. First, the prescriptive period should be reckoned from the filing of the 1980 General Information Sheet (GIS), not the Amended Articles of Incorporation, because the GIS was the only document that reflected the shareholdings and the alleged dilution. Second, the "discovery rule" should apply given the interlocking membership of the UCPB and UNICOM boards, which justified a presumption of connivance to conceal the transaction. Finally, Cojuangco's absence from the Philippines from 1986 to 1991 interrupted the prescriptive period through the suppletory application of Article 91 of the Revised Penal Code, authorized by Article 10 of the same Code, meaning the filing in 1990 was within the prescriptive period.