The Supreme Court in Salvador v. Desierto addresses the crucial question of when the prescriptive period begins for offenses under Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act. The Court ruled that the prescriptive period starts not from the date of the offense, but from the date of its discovery, especially when the violations are concealed. This is particularly relevant in cases of behest loans where the government, as the aggrieved party, may not be immediately aware of the corrupt transactions. This ruling ensures that those who engage in corrupt practices do not escape justice simply because their actions were initially hidden from public view.

Unraveling Behest Loans: Did Time Run Out on Justice?

This case arose from a complaint filed by Atty. Orlando Salvador on behalf of the Presidential Ad Hoc Fact-Finding Committee on Behest Loans against several individuals, including officials of the Development Bank of the Philippines (DBP) and directors/officers of Hotel Mirador, Inc. The Committee alleged that loans obtained by Hotel Mirador from DBP were behest loans, characterized by insufficient collateral, undercapitalization of the borrower, and other factors indicative of irregularity. The Ombudsman dismissed the complaint, arguing that the offense had already prescribed, given that the transactions occurred in the 1970s. This prompted the petitioner to question whether the Ombudsman gravely abused his discretion in dismissing the complaint based on prescription.

The core legal issue revolves around the interpretation of Section 2 of Act No. 3326, as amended, which governs the prescriptive periods for offenses penalized by special laws. This law states that prescription begins to run from the day of the commission of the violation, but if the violation is not known at that time, it runs from the discovery thereof. The Supreme Court had to determine whether the prescriptive period should be counted from the date the loans were granted or from when the alleged irregularities were discovered by the Presidential Ad Hoc Fact-Finding Committee on Behest Loans.

The Court emphasized that in cases involving violations of R.A. No. 3019 committed before the 1986 EDSA Revolution, it was practically impossible for the government to have known about the violations at the time the transactions were made. Often, public officials conspired with the beneficiaries of the loans, concealing the irregularities. Therefore, the Court held that the prescriptive period should be computed from the discovery of the commission of the offense, not from the day of its commission. This interpretation aligns with the intent of the law, which is to ensure that those who violate anti-graft laws are brought to justice, even if their actions were initially hidden.

Building on this principle, the Supreme Court reiterated that the counting of the prescriptive period commenced from the date of discovery of the offense in 1992, following an exhaustive investigation by the Presidential Ad Hoc Committee on Behest Loans. Since the complaint was filed with the Office of the Ombudsman on September 18, 1996, within four years of the discovery, it was well within the prescriptive period of 15 years. Therefore, the Court found that the Ombudsman erred in dismissing the complaint based on prescription.

However, the Court also addressed the issue of whether the Ombudsman committed grave abuse of discretion in dismissing the complaint on its merits. The Court acknowledged the Ombudsman’s discretion to determine whether a criminal case should be filed, based on the facts and circumstances. Unless there are good and compelling reasons, the Court refrains from interfering with the Ombudsman’s exercise of investigating and prosecutory powers. After examining the records, the Court found no cogent reason to deviate from this rule.

The Court noted that the original loan proposal of Hotel Mirador was the subject of an intensive study, as evidenced by DBP memoranda and resolutions. There was no showing that the DBP Board of Directors did not exercise sound business judgment in approving the loans or that said approval was contrary to acceptable banking practices at the time. Moreover, the complainant failed to point out circumstances indicating a criminal design by either the DBP or Hotel Mirador or collusion between them to cause undue injury to the government. For these reasons, the Court concluded that the Ombudsman did not commit grave abuse of discretion and upheld the dismissal of the complaint on its merits, even while disagreeing with the prescription argument.

Ultimately, this case underscores the importance of the discovery rule in prescription, ensuring that hidden acts of corruption do not escape legal scrutiny. However, it also highlights the deference given to the Ombudsman’s discretion in evaluating the merits of a case and deciding whether to proceed with prosecution. The ruling provides clarity on the application of prescription in anti-graft cases while respecting the Ombudsman’s role in fighting corruption.

FAQs

What was the key issue in this case?	The key issue was whether the prescriptive period for violations of the Anti-Graft and Corrupt Practices Act should be counted from the date the offense was committed or from the date it was discovered.
What did the Court rule about the prescriptive period?	The Court ruled that the prescriptive period begins from the date of discovery of the offense, especially in cases where the violations are concealed.
What were the alleged violations in this case?	The alleged violations involved behest loans granted by the Development Bank of the Philippines (DBP) to Hotel Mirador, Inc.
Who filed the complaint?	Atty. Orlando Salvador, on behalf of the Presidential Ad Hoc Fact-Finding Committee on Behest Loans, filed the complaint.
Why did the Ombudsman initially dismiss the complaint?	The Ombudsman dismissed the complaint, arguing that the offense had already prescribed because the transactions occurred in the 1970s.
Did the Supreme Court agree with the Ombudsman’s reasoning on prescription?	No, the Supreme Court disagreed with the Ombudsman’s reasoning on prescription and stated that the complaint was filed within the prescriptive period.
Did the Supreme Court ultimately uphold the dismissal of the complaint?	Yes, the Supreme Court ultimately upheld the dismissal of the complaint, but on the grounds that the Ombudsman did not commit grave abuse of discretion in evaluating the merits of the case.
What is a “behest loan”?	A “behest loan” typically refers to a loan granted under irregular circumstances, often characterized by insufficient collateral, undercapitalization of the borrower, or undue influence.

This case serves as an important reminder of the complexities involved in prosecuting anti-graft cases and the crucial role of timely investigation and discovery in ensuring accountability.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ATTY. ORLANDO SALVADOR VS. HON. ANIANO DESIERTO, G.R. No. 135249, January 16, 2004