Title
Mendoza vs. People
Case
G.R. No. 183891
Decision Date
Aug 3, 2010
Romarico Mendoza, SATII president, convicted for failing to remit SSS contributions; SC upheld liability, modified penalty to 4y2m–20y imprisonment.
failure to remit
violation
conviction

Case Summary (G.R. No. 183891)

Factual Background

Petitioner, who served as president, chairman, and chief executive officer of Summa Alta Tierra Industries, Inc. (SATII), failed to remit the monthly Social Security System premium contributions withheld from SATII employees for the period August 1998 to July 1999. The total amount of unpaid contributions, inclusive of penalties, was P421,151.09. After the Social Security System advised payment, petitioner proposed to settle the delinquency in installments over eighteen months, a proposal the SSS approved by memorandum dated September 12, 2000. Despite several extensions to pay in installments, petitioner failed to satisfy the obligation, and criminal proceedings ensued.

Trial Court Proceedings

The Regional Trial Court of Iligan City found petitioner guilty beyond reasonable doubt of violating Section 22(a) and Section 22(d) of R.A. No. 8282 vis-a-vis Section 28 of the Act for willfully, unlawfully and feloniously failing and refusing to remit SSS premium contributions amounting to P421,151.09. The trial court sentenced petitioner to imprisonment of six years and one day to eight years and ordered him to pay the unpaid contributions and penalties.

Court of Appeals Decision

The Court of Appeals affirmed the trial court's conviction. The appellate court held that the Social Security Act is a special law and that lack of criminal intent or good faith was not a defense to the statutory offense. The Court of Appeals rejected petitioner’s contention that he was merely a conduit of SATII and not personally liable, reasoning that as President, Chairman and Chief Executive Officer he was the managing head and therefore liable under Section 28(f) of the Social Security Act. The appellate court denied petitioner’s motion for reconsideration.

Issues Presented

The principal issues were whether petitioner, charged as “proprietor” and serving as the corporate managing head, was personally liable under Section 28(f) for the corporation's failure to remit SSS contributions; whether good faith, payment from personal funds, or petitioner’s asserted vicarious status negated criminal liability; and whether the penalty imposed by the lower courts conformed to the statutory penal provisions of the Social Security Act and the Revised Penal Code.

Petitioner’s Contentions

Petitioner contended that Section 28(f) did not specifically list a corporate president, managing head, or general manager as personally liable and that the Information's designation of him as “proprietor” evidenced a fatal infirmity. He further asserted mitigating and alternative circumstances: that he was only vicariously liable, that he acted in good faith, that he had paid the contributions from personal funds, and that his educational and business record made imprisonment unduly harsh.

Respondent’s Position and Statutory Framework

The prosecution proceeded on the statutory mandate that remittance of contributions under Section 22(a) is mandatory and that failure to remit is malum prohibitum. Prior precedent emphasized that good faith or lack of intent is immaterial where the law prescribes a remedial and punitive sanction to secure compliance. Section 28(f) was relied upon to impose personal liability on the managing head of a juridical person. The prosecution also invoked Section 28(h), which presumes misappropriation and adopts the penalties of Article 315, Revised Penal Code, thereby invoking the Indeterminate Sentence Law for sentencing.

Ruling of the Supreme Court

The Supreme Court affirmed the convictions affirmed by the Court of Appeals but modified the penalty. The Court held that petitioner was guilty as charged and must be held personally liable as the managing head of the corporation. The Court concluded that the proper penal provision for the offense was Section 28(h) of R.A. No. 8282, which incorporated the penalty scheme of Article 315, Revised Penal Code, and that the Indeterminate Sentence Law applied. The Court sentenced petitioner to an indeterminate term of imprisonment running from four years and two months of prision correccional as minimum to twenty years of reclusion temporal as maximum, and imposed costs against petitioner.

Legal Basis and Reasoning

The Court reasoned that remittance of withheld employee contributions was mandatory under Section 22(a) and that the law’s penal provisions were malum prohibitum, rendering good faith immaterial as earlier holdings such as United Christian Missionary Society v. Social Security Commission had explained. The word “proprietor” and the phrase “managing head” were construed broadly; the Court relied on authorities, including a definition from Black’s Law Dictionary and precedent in Garcia v. Social Security Commission Legal and Collection, to hold that “managing head” denotes management, control and power over a business entity irrespective of the managerial title used. The Court rejected petitioner’s argument that the Information’s use of “proprietor” absolved him of liability. On penalty, the Court distinguished Section 28(e), relied upon by the lower courts, from Section 28(h), holding that the latter specifically addressed the criminal presumption of misappropriation where an employer withheld contributions and failed to remit them within thirty days. Because Section 28(h) adopted the penalty in Article 315, Revised Penal Code, the Court applied

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