Title
Benedicto vs. Abad Santos Jr.
Case
G.R. No. 74689
Decision Date
Mar 21, 1990
Employer failed to report employee to SSS, faced criminal charges; SC ruled criminal liability prescribed, civil action for unpaid benefits proceeds.
benedicto
abad santos jr
feliciano

Case Summary (G.R. No. 74689)

Factual Background

The record established that Benedicto did not report Pillon’s employment to the SSS for compulsory coverage and did not remit the corresponding SSS contributions. The sss learned of these omissions sometime in 1975. On 19 October 1975, after Pillon’s death, Antonio Obillos, Jr., an SSS investigator from the Regional Office in Bacolod City, was deputized to conduct an enquiry regarding Benedicto’s alleged violations of the Social Security Act under Republic Act No. 1161, as amended. In his Field Investigation Report dated 29 October 1975, Obillos stated that Benedicto admitted failing to report and register Pillon for the period from March 1971 up to the time of Pillon’s death in 1974, and failing to pay the corresponding SSS contributions. Obillos also reported that, upon his suggestion, Benedicto accomplished and submitted SSS Forms E-1 and R-IA, reporting himself and Pillon for compulsory coverage; Benedicto and Pillon were assigned SSS Identification Nos. 07-17376-00 and 07-0687-312, effective 1 March 1971. The SSS assessed premiums against Benedicto totaling P491.70, excluding penalties. Obillos recommended transmission of his report to the SSS Legal Department in Quezon City for appropriate action.

Initiation of Criminal Proceedings

Approximately ten years later, on 18 July 1985, upon complaint of the SSS Legal Department, the Assistant City Fiscal of Bacolod City filed an information charging Benedicto with violations of Section 24 (a) in relation to Section 28 (e) of the Social Security Act, as amended. The information alleged that during the period from March 1971 to March 1974, in Bacolod City and within the jurisdiction of the SSS Regional Office 07, Benedicto willfully and unlawfully failed and refused, without lawful cause, to report/register on time his employee Salvador Pillon, thereby rendering him liable for damages in the amount of P6,381.00, described as the benefits the heirs of Pillon would have been entitled to had Pillon’s name been reported/registered on time and the corresponding contributions remitted, despite demands, in violation of the law.

RTC Orders on the Motion to Quash

Before arraignment, Benedicto moved to quash the information, asserting that liability had already been extinguished by prescription. The SSS opposed the motion, arguing that the offense had not prescribed because the applicable prescriptive period was twenty (20) years, and that the information was filed within that period. In an Order dated 3 March 1986, the RTC denied the Motion to Quash. It relied on the text of Paragraph B of Section 22 of Republic Act No. 1161, as amended by Section 15 of Presidential Decree No. 1636, which states that the right to institute the necessary action against the employer may be commenced within twenty (20) years from specified triggering events. Benedicto moved for reconsideration, but the RTC denied it in an Order dated 21 April 1986.

Parties’ Positions Before the Supreme Court

Benedicto pursued the Petition for Prohibition and Mandamus with preliminary injunction, seeking to set aside the RTC Orders. He did not dispute that he failed to report his employee Pillon to the SSS as required. His position was that the RTC erred in applying the twenty-year period under Section 22 (b) of the Social Security Act to a criminal action. He maintained that Section 22 (b) governs administrative and civil actions involving delinquency in remittance, and not criminal liability.

The SSS, as complainant before the RTC and as respondent in the Supreme Court proceedings, argued that the twenty-year statute of limitations in Section 22 (b) applied to actions against the employer for all purposes, including criminal prosecutions. In the Supreme Court, the Solicitor General adopted and supported the SSS’s stance.

The Statutory Framework

The Court examined the provisions relevant to prescription and penalty. Section 22 (b) of the Social Security Act, as amended by P.D. No. 1636, provided that the failure or refusal of an employer to pay or remit contributions would not prejudice the covered employee’s right to benefits, and that the right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be.

The penalty clause for the charged offense was Section 28 (e) of R.A. No. 1161, as amended by P.D. No. 177, which punished willful failure or refusal to comply with the Act and the commission’s rules and regulations. It specified that where the violation consisted in failure or refusal to register employees or to deduct contributions and remit them to the SSS, the penalty was a fine of not less than five hundred pesos nor more than five thousand pesos, or imprisonment of not less than six months nor more than one year, or both, at the court’s discretion.

For offenses penalized by special acts, the Court also considered Act No. 3326, as amended by Act No. 3763, which generally prescribes periods of limitation based on the penalty attached: one year, four years, eight years, or twelve years, with specific provisos not relevant to the Court’s final conclusion. The Court also referenced, for contextual comparison, prescriptive rules under the Revised Penal Code on crimes and penalties, and it observed that, by the then applicable tax rules referenced in Section 22 (b) of the Social Security Act, penal sanctions for internal revenue violations had a shorter prescription period.

Legal Basis and Reasoning: Prescription of Criminal Liability

The Supreme Court rejected the SSS’s view that the twenty-year period in Section 22 (b) automatically governed the criminal prosecution. The Court found this interpretation “difficult to accept” for several reasons.

First, the Court noted that the twenty-year prescriptive period was located in Section 22, which dealt generally with remittance of contributions to the SSS. It did not deal with penal sanctions for violations of the Act or the commission’s rules and regulations. The penal sanctions were placed in Section 28, under the chapter denominated “G. Miscellaneous Provisions.” In the Court’s view, if the legislative authority had intended the twenty-year period to apply to penal sanctions, it would have been located in the chapter on miscellaneous provisions, or would at least have expressly referred to the penal provisions. Contextually, Section 22 (b) did not relate to criminal sanctions.

Second, the Court closely read the language of Section 22 (b). It held that the “necessary action against the employer” referred to an action brought to collect contributions payable under the Social Security Act which the employer had refused or neglected to pay. It did not relate to criminal liability.

Third, the Court considered proportionality. It observed that applying a uniform twenty-year prescription to criminal liability would be disproportionately long compared with prescriptive periods for crimes punishable under the Revised Penal Code and for special-statute offenses under Act No. 3326, as amended. It also observed that the most severe penalties under the Social Security Act were significantly lighter than penalties that, under the Revised Penal Code and related frameworks, justify a twenty-year prescription. The Court held that such a result could not be lightly presumed to be what the legislature intended when it enacted Section 22 (b).

Given this statutory construction, the Court held that the offense charged had prescribed by the time the information was filed ten years after the SSS discovered the violations. It ruled that the applicable prescriptive period for the criminal liability was four (4) years, and that the statutory crime had already prescribed when the prosecution commenced.

Effect of Prescription on Civil Liability

While the Court ruled that criminal liability was extinguished by prescription, it clarified the consequence on civil liability. It reiterated the general rule that extinction of the penal action does not automatically carry with it the extinction of the civil action to enforce civil liability arising from the offense, unless the extinction results from a final judgment that the fact from which civil liability might arise did not exist. The Court found that no final judgment had been rendered on the merits because the criminal case had been aborted through the Motion to Quash. Therefore, the extinction of criminal liability did not affect the related civil action.

The Court further reasoned that, under Section 22 (b), the civil action to enforce the employer’s civil liability could still be brought within twenty (20) years from the time the employer’s delinquency was discovered. Since no separate reservation for the civil action appeared to have been made when the criminal proceedings were initiated, the Court deemed the civil action to have been instituted simultaneously with the commencement of the criminal proceedings. Accordingly, the civil action could proceed notwithstanding the extinction of the criminal action.

The Court noted that the information itself specified the civil liability amount as P6,381.00, representing the benefits the heirs of Salvador Pillon would have received had the employee been properly reporte

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