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[G.R. No. 183891. August 3, 2010.]

2:45 P.M.


PHILIPPINES , respondent.



For failure to remit the Social Security System (SSS) premium contributions of
employees of the Summa Alta Tierra Industries, Inc. (SATII) of which he was president,
Romarico J. Mendoza (petitioner) was convicted of violation of Section 22 (a) and (d)
vis-à-vis Section 28 of R.A. No. 8282 or the Social Security Act of 1997 by the Regional
Trial Court of Iligan City, Branch 4. His conviction was af rmed by the Court of Appeals.

The Information against petitioner 2 reads:

xxx xxx xxx
That sometime during the month of August 1998 to July 1999, in the City of
Iligan, Philippines, and within the jurisdiction of this Honorable Court, the said
accused, being then the proprietor of Summa Alta Tierra Industries, Inc., duly
registered employer with the Social Security System (SSS), did then and there
willfully, unlawfully and feloniously fail and/or refuse to remit the SSS premium
contributions in favor of its employees amounting to P421,151.09 to the prejudice
of his employees.
Contrary to and in violation of Sec. 22(a) and (d) in relation to Sec. 28 of Republic
Act No. 8282, as amended (emphasis and underscoring supplied)

The monthly premium contributions of SATII employees to SSS which petitioner

admittedly failed to remit covered the period August 1998 to July 1999 3 amounting to
P421,151.09 inclusive of penalties. 4
After petitioner was advised by the SSS to pay the above-said amount, he
proposed to settle it over a period of 18 months 5 which proposal the SSS approved by
Memorandum of September 12, 2000. 6
Despite the grant of petitioner's request for several extensions of time to settle
the delinquency in installments, 7 petitioner failed, hence, his indictment.
Petitioner sought to exculpate himself by explaining that during the questioned
period, SATII shut down due to the general decline in the economy. 8 acTDCI

Finding for the prosecution, the trial court, as re ected above, convicted
petitioner, disposing as follows:
WHEREFORE, premises considered, the Court nds Romarico J. Mendoza,
guilty as charged beyond reasonable doubt. Accordingly, he is hereby
meted the penalty of 6 years and 1 day to 8 years.
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The accused is further ordered to pay the Social Security System the unpaid
premium contributions of his employees including the penalties in the sum of

SO ORDERED. 9 (emphasis supplied)

And as also re ected above, the Court of Appeals af rmed the trial court's
decision, by Decision of July March 5, 2007, 1 0 it noting that the Social Security Act is a
special law, hence, lack of criminal intent or good faith is not a defense in the
commission of the proscribed act.
The appellate court brushed aside petitioner's claim that he is merely a conduit
of SATII and, therefore, should not be held personally liable for its liabilities. It held that
petitioner, as President, Chairman and Chief Executive Of cer of SATII, is the managing
head who is liable for the act or omission penalized under Section 28 (f) of the Social
Security Act.
Petitioner contended in his motion for reconsideration that Section 28 (f) of the
Act which reads:
(f) If the act or omission penalized by this Act be committed by an
association, partnership, corporation or any other institution, its managing head,
directors or partners shall be liable for the penalties provided in this Act for the

should be interpreted as follows:

If an association, the one liable is the managing head; if a partnership, the ones
liable are the partners; and if a corporation, the ones liable are the directors.
(underscoring supplied)

The appellate court denied petitioner's motion, hence, the present petition for
review on certiorari.
Petitioner maintains, inter alia, that the managing head or president or general
manager of a corporation is not among those speci cally mentioned as liable in the
above-quoted Section 28 (f). And he calls attention to an alleged congenital in rmity in
the Information 1 1 in that he was charged as "proprietor" and not as director of SATII.
Further, petitioner claims that the lower courts erred in penalizing him with six
years and one day to eight years of imprisonment considering the mitigating and
alternative circumstances present, namely: his being merely vicariously liable; his good
faith in failing to remit the contributions; his payment of the premium contributions of
SATII out of his personal funds; and his being economically useful, given his academic
credentials, he having graduated from a prime university in Manila and being a reputable
businessman. TCIEcH

The petition lacks merit.

Remittance of contribution to the SSS under Section 22 (a) of the Social Security
Act is mandatory. United Christian Missionary Society v. Social Security Commission 1 2
explicitly explains:
No discretion or alternative is granted respondent Commission in the enforcement
of the law's mandate that the employer who fails to comply with his legal
obligation to remit the premiums to the System within the prescribed
period shall pay a penalty of three 3% per month. The prescribed
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penalty is evidently of a punitive character, provided by the legislature
to assure that employers do not take lightly the State's exercise of the
police power in the implementation of the Republic's declared policy 'to develop,
establish gradually and perfect a social security system which shall be suitable to
the needs of the people throughout the Philippines and (to) provide protection to
employers against the hazards of disability, sickness, old age and death.' [Section
2, Social Security Act; Roman Catholic Archbishop v. Social Security Commission,
1 SCRA 10, January 20, 1961] In this concept, good faith or bad faith is
rendered irrelevant, since the law makes no distinction between an employer
who professes good reasons for delaying the remittance of premiums and
another who deliberately disregards the legal duty imposed upon him to make
such remittance. From the moment the remittance of premiums due is
d el a y ed , the penalty immediately attaches to the delayed premium
payments by force of law . (emphasis and underscoring supplied)

Failure to comply with the law being malum prohibitum, intent to commit it or
good faith is immaterial. 1 3
The provision of the law being clear and unambiguous, petitioner's interpretation
that a "proprietor," as he was designated in the Information, is not among those
speci cally mentioned under Sec. 28 (f) as liable, does not lie. For the word connotes
management, control and power over a business entity. 1 4 There is thus, as Garcia v.
Social Security Commission Legal and Collection enjoins, 1 5
. . . no need to resort to statutory construction [for] Section 28(f) of the
Social Security Law imposes penalty on:

(1) the managing head;

(2) directors; or

(3) partners, for offenses committed by a juridical person. (emphasis


The term "managing head" in Section 28 (f) is used, in its broadest connotation, not to
any speci c organizational or managerial nomenclature. To heed petitioner's reasoning
would allow unscrupulous businessmen to conveniently escape liability by the creative
adoption of managerial titles.
While the Court af rms the appellate court's decision, there is a need to modify
the penalty imposed on petitioner. The appellate court af rmed the trial court's
imposition of penalty on the basis of Sec. 28 (e) of the Social Security Act which reads:
Sec. 28. Penal Clause. — (e) Whoever fails or refuses to comply with the
provisions of this Act or with the rules and regulations promulgated by the
Commission, shall be punished by a ne of not less than Five thousand pesos
(P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment
for not less than six (6) years and one (1) day nor more than twelve (12) years or
both, at the discretion of the court. . . .

The proper penalty for this speci c offense committed by petitioner is, however,
provided in Section 28 (h) of the same Act which reads:
Sec. 28. Penal Clause. — (h) Any employer who after deducting the monthly
contributions or loan amortizations from his employee's compensation, fails to
remit the said deductions to the SSS within thirty (30) days from the date they
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became due shall be presumed to have misappropriated such contributions or
loan amortizations and shall suffer the penalties provided in Article Three
hundred fteen [Art. 315] of the Revised Penal Code. (emphasis and
underscoring supplied) ECcTaS

Article 315 of the Revised Penal Code provides that the penalty in this case
should be:
. . . prision correccional in its maximum period to prision mayor in its minimum
period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos; and if such amount exceeds the latter sum, the penalty provided in
this paragraph shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the penalty which may be imposed shall not exceed
twenty years. In such cases, and in connection with the accessory penalties which
may be imposed and for the purpose of the other provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case may be;
xxx xxx xxx.

Since the above-quoted Sec. 28 (h) of the Social Security Act (a special law)
adopted the penalty from the Revised Penal Code, the Indeterminate Sentence Law also
finds application. 1 6
Taking into account the misappropriated P421,151.09 and the Court's discourse
in People v. Gabres 1 7 on the proper imposition of the indeterminate penalty in Article
315, the appropriate penalty in this case should range from four (4) years and two (2)
months of prision correccional, as minimum, to twenty (20) years of reclusion temporal,
as maximum.
WHEREFORE , the Decision and Resolution of the Court of Appeals in CA-G.R. CR
No. 27630 are AFFIRMED with MODIFICATION . Petitioner is sentenced to an
indeterminate prison term of four (4) years and two (2) months of prision correccional,
as minimum, to twenty (20) years of reclusion temporal, as maximum.
Costs against petitioner.
Brion, Bersamin, Abad * and Villarama, Jr., JJ., concur.


* Designated as Additional Member, per Special Order No. 843 (May 17, 2010), in view of
the vacancy occasioned by the retirement of Chief Justice Reynato S. Puno.

1. Rollo, pp. 87-93.

2. Id. at 3.
3. Id. at 11.
4. Id. at 3.
5. Ibid.
6. TSN, September 26, 2002, p. 13.
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7. Id. at 24-26.
8. TSN, January 7, 2003, p. 3.
9. Rollo, p. 93.
10. Penned by Associate Justice Sixto C. Marella, Jr. with Associate Justices Romulo V.
Borja and Michael P. Elbinias concurring; id. at 49-64.

11. Id. at 69.

12. G.R. No. L-26712-16, December 27, 1969, 30 SCRA 982, 987-988.

13. Tan v. Ballena, G.R. No. 168111, July 4, 2008, 557 SCRA 229, 255.
14. BLACK'S LAW DICTIONARY defines a proprietor as "[o]ne who has the legal right or
exclusive title to anything. In many instances, it is synonymous with owner."

15. G.R. No. 170735, December 17, 2007, 540 SCRA 456, 458.
16. Vide: People v. Simon, G.R. No. 93028, July 29, 1994, 234 SCRA 555.
17. G.R. Nos. 118950-54, 335 Phil. 242 (1997). In this case, the Court, thru Associate
Justice Jose Vitug, ruled that "The fact the amounts involved in the instant case exceed
P22,000.00 should not be considered in the initial determination of the indeterminate
penalty; instead, the matter should be so taken as analogous to modifying
circumstances in the imposition of the maximum term of the full indeterminate
sentence. This interpretation of the law accords with the rule that penal laws should be
construed in favor of the accused. Since the penalty prescribed by law for the estafa
charge against accused-appellant is prision correccional maximum to prision mayor
minimum, the penalty next lower would then be prision correccional minimum to
medium. Thus, the minimum term of the indeterminate sentence should be anywhere
within six (6) months and one (1) day to four (4) years and two (2) months whole the
maximum term of the indeterminate sentence should at least be six (6) years and one
(1) day because the amounts involved exceeded P22,000.00, plus an additional one (1)
year for each additional P10,000.00.

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