Valenzona vs. People

G.R. No. 248584
The Supreme Court acquitted corporate president Valenzona for failing to register subdivision contracts under P.D. 957, ruling prosecution failed to prove his active participation and intent beyond reasonable doubt.
criminal liability corporate officer registration

Case Summary (G.R. No. 248584)

Factual Background

ALSGRO Industrial and Development Corporation developed the Bayfair of Margana Subdivision in Putatan, Muntinlupa City, and petitioner Felix G. Valenzona served as its President. On March 24, 2003, ALSGRO executed two Contracts to Sell with Ricardo B. Porteo covering Lots 17 and 19, each of 100 square meters and priced at P600,000.00, payable in installments. Porteo paid P499,000.00 by September 2003 but thereafter defaulted; the contracts were not registered with the Register of Deeds within 180 days, and were later rescinded on April 21, 2004. Porteo discovered non-registration by means of a January 18, 2006 Certification of the Register of Deeds and that the lots had been sold to different buyers on July 6, 2004; his refund demand of January 20, 2006 was denied, and he filed a criminal complaint against Valenzona.

Charge and the Trial Information

An Information for violation of Section 17 of P.D. 957 was filed on January 16, 2008 charging that petitioner, as President of ALSGRO, “willfully, unlawfully and feloniously” failed to register the subject Contracts to Sell with the Register of Deeds as required by law. The prosecution’s proofs established non-registration of the contracts within the 180-day period mandated by Section 25 of the IRR.

Trial Court Ruling

The Regional Trial Court found petitioner guilty beyond reasonable doubt of violating Section 17 of P.D. 957 and, pursuant to Section 39, held him criminally responsible as President of the corporation. The RTC reasoned that the non-registration constituted the offense and that, because P.D. 957 is a special law rendering the offense mala prohibita, petitioner’s asserted good faith and lack of intent were immaterial. The RTC imposed indeterminate imprisonment of one to two years and a fine of P20,000.00 and ruled that jurisdiction over Porteo’s refund claim lay with the National Housing Authority under P.D. 1344, Section 1(b). Reconsideration was denied.

Court of Appeals Proceedings

Petitioner appealed to the Court of Appeals. During the pendency of the appeal, petitioner and Porteo executed a compromise agreement dated August 4, 2015 settling the civil aspect for P400,000.00, and Porteo executed an affidavit of desistance. The Office of the Solicitor General filed an appellee’s brief for the People. In a Decision dated June 29, 2018, the CA denied the appeal, held that the compromise and affidavit of desistance did not preclude resolution on the merits, and affirmed the RTC’s conviction and penalty; a motion for reconsideration was denied by Resolution dated July 24, 2019.

Contentions Before the Supreme Court

In his Rule 45 Petition, petitioner argued that the prosecution failed to prove his direct and active participation in the non-registration and that conviction rested on mere assumption because he was the corporate President. He asserted that the actual function of registering contracts belonged to ALSGRO’s Marketing, Documentations, and Processing Department and cited ABS-CBN v. Gozon in support of the rule that corporate officers’ liability requires proof of active participation. The People, through the OSG, contended that Section 39 expressly made the President criminally responsible and relied on Cabral v. Uy to argue that good faith or lack of intent cannot excuse malum prohibitum violations.

Issue Presented

The issue framed by the Court was whether the Court of Appeals erred in affirming the RTC’s conviction of petitioner for violation of Section 17 of P.D. 957.

Ruling of the Supreme Court

The Supreme Court granted the petition, reversed and set aside the decisions of the Court of Appeals and the Regional Trial Court, and acquitted petitioner Felix G. Valenzona of the crime of violating Section 17 of P.D. 957 for failure of the prosecution to prove guilt beyond reasonable doubt. The Court ordered immediate entry of judgment.

Legal Basis and Reasoning

The Court observed that while Rule 45 ordinarily confines review to questions of law, exceptions permit reexamination of factual findings when necessary to safeguard substantial rights, and it invoked that discretion here because the identity and participation of the offender were contested. The Court reiterated the constitutional presumption of innocence and the prosecution’s burden to prove guilt beyond reasonable doubt. It explained the distinction between crimes mala in se and crimes mala prohibita and reiterated prior pronouncements that violations of P.D. 957 are regarded as malum prohibitum. The Court clarified, however, that dispensing with proof of criminal intent in malum prohibitum offenses does not absolve the prosecution of its duty to prove that the accused intended to perpetrate the voluntary act constitutive of the crime. The Court adopted the analytical distinction between criminal intent and volition: for mala prohibita offenses the essential inquiry is whether the accused acted freely and consciously in committing the prohibited act. The Court then examined Section 39, noting its textual prescription that the “President, Manager or Administrator or the person who has charge of the administration of the business” shall be criminally responsible, and concluded that liability depends on the functions performed in relation to the specific violation rather than on title alone. The Court relied on the doctrine in ABS-CBN v. Gozon and other precedents that corporate officers’ personal criminal liability stems from active participation or from having the power to prevent the wrongful act; conspiracy or overt acts establishing community of design must be proved and are not presumed. Applying these principles, the Court found that the prosecution proved only that ALSGRO failed to register the contracts and that petitioner was President; it did not prove that petitioner had volition or active participation in the non-registration or that the responsibility to register resided with him. Petitioner’s testimony that registration tasks were assigned

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