Case Summary (G.R. No. 32652)
Procedural Posture
The case is an appeal from an order of the Judge of the Twenty-third Judicial District sustaining a demurrer to an information that charged the respondent with violating section 1458 of Act No. 2711, as amended. The dispositive question on appeal was whether the information sufficiently charged the respondent, as manager of the corporation, with criminal liability under section 2723 for violating section 1458 for the benefit of the corporation.
Allegations in the Information
The information alleged that during the four quarters of 1924, in Iloilo, the respondent, as manager of the Visayan General Supply Co., Inc., voluntarily and unlawfully declared for taxation the sum of P2,352,761.94, when in truth the corporation’s total gross sales for that year amounted to P2,543,303.44. By so doing the respondent allegedly failed to declare P190,541.50 of sales and thereby failed to pay internal-revenue percentage taxes corresponding to 1½% of the undeclared sales, alleged to be P2,960.12.
Statutory Provisions at Issue
Section 1458 (Payment of percentage taxes; quarterly report of earnings) imposed the duty on every person conducting a business subject to percentage tax to make, within the period allowed for payment of quarterly installments, “a true and complete return of the amount of the receipts or earnings of his business during the preceding quarter and pay the tax due thereon.” Section 2723 (Failure to make true return of receipts and sales) prescribed criminal penalties: for failure to make the required return, a fine not exceeding P2,000 or imprisonment not exceeding one year or both; and for making a false or fraudulent return, a fine not exceeding P10,000 or imprisonment not exceeding two years or both.
Legal Issue Presented
Whether the facts alleged in the information were sufficient to render the accused-manager criminally liable under the statute for making a false return on behalf of the corporation, or whether the offense, as charged, must be regarded as one committed solely by the corporation such that the individual manager could not be criminally prosecuted on that information.
Court’s Analysis and Reasoning
The Supreme Court rejected the view of the lower court that the offense must be regarded as committed only by the corporation and not by its officials or agents. The Court reasoned that a corporation can act only through its officers and agents; consequently, where the business itself involves a violation of law, “all who participate in it are liable.” The Court relied on authorities to the same effect (including Grail and Ostrander’s Case, 103 Va. 855, and State v. Burnam, 71 Wash. 199, the latter holding a corporate manager criminally liable for corporate violations even if not personally present when the offense was committed). Applying
...continue readingCase Syllabus (G.R. No. 32652)
Citation and Panel
- 54 Phil. 607; G. R. No. 32652; Decision dated March 15, 1930.
- Opinion by Justice Ostrand.
- Justices Johnson, Malcolm, Villamor, Johns, Romualdez, and Villa-Real concurred.
Procedural Posture
- Appeal from an order of the Judge of the Twenty-third Judicial District.
- The appealed order sustained a demurrer to an information charging defendant with violation of section 1458 of Act No. 2711, as amended.
- The trial court sustained the demurrer; the People appealed that ruling to the Supreme Court.
Information Allegations (as pleaded in the information)
- The information alleges acts "on and during the four quarters" of the year 1924 in the municipality of Iloilo, Province of Iloilo, Philippine Islands.
- The accused was alleged to be the manager of the Visayan General Supply Co., Inc., described as:
- A corporation organized under the laws of the Philippine Islands;
- Engaged in the purchase and sale of sugar, "bayon," coprax, and other native products;
- As such manager and as manager of that business, subject to the payment of internal-revenue taxes upon its sales.
- Specific financial allegations for 1924:
- The defendant "did then and there voluntarily, illegally, and criminally declare in 1924 for the purpose of taxation only the sum of P2,352,761.94."
- "When in truth and in fact, and the accused well knew that the total gross sales of said corporation during that year amounted to P2,543,303.44."
- By these facts the defendant "thereby fail[ed] to declare for the purpose of taxation the amount of P190,541.50."
- The defendant thereby "voluntarily and illegally not pay[ed] the Government as internal-revenue percentage taxes the sum of P2,960.12, corresponding to 1 1/2 per cent of said undeclared sales."
- The information thus charged a false declaration (return) for taxation purpose, attributing the making of the false return to the defendant in his capacity as manager.
Legal Question Presented
- Whether the information sets forth facts rendering the defendant, as manager of the corporation, criminally liable under section 2723 of Act No. 2711 for violation of section 1458 of the same Act for the benefit of the corporation.
Statutes Quoted in the Decision (Act No. 2711)
- Section 1458 (quoted as in source):
- "SEC. 1458. Payment of percentage taxes—Quarterly report of earnings. The percentage taxes on business shall be payable at the end of each calendar quarter in the amount lawfully due on the business transacted during each quarter; and it shall be the duty of every person conducting a busine