THIRD DIVISION

ROMARICO J. MENDOZA, G.R. No. 183891

Petitioner,
Present:

CARPIO MORALES, J.,

- versus - Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.
PEOPLE OF
THEPHILIPPINES, Promulgated:
Respondent. August 3, 2010

x--------------------------------------------------x

DECISION
CARPIO MORALES, J.:
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--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
affirmed by the Court of Appeals.[1]

The Information against petitioner[2] reads:

xxxx

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 theproprietor 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 toP421,151.09 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 petitioners 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]

Finding for the prosecution, the trial court, as reflected above, convicted petitioner,
disposing as follows:

WHEREFORE, premises considered, the Court finds 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.

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 P421, 151.09.
SO ORDERED. [9] (emphasis supplied)

And as also reflected above, the Court of Appeals affirmed the trial courts decision,
by Decision of July March 5, 2007,[10] 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 petitioners 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
Officer 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 offense.

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 petitioners 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 specifically mentioned as
liable in the above-quoted Section 28(f). And he calls attention to an alleged
congenital infirmity in the Information[11] 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.

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[12]explicitly explains:

No discretion or alternative is granted respondent Commission in the enforcement

of the laws 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 penalty is
evidently of a punitive character, provided by the legislature to assure that
employers do not take lightly the States exercise of the police power in the
implementation of the Republics 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 delayed, 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.[13]

The provision of the law being clear and unambiguous, petitioners

interpretation that a proprietor, as he was designated in the Information, is not
among those specifically mentioned under Sec. 28(f) as liable, does not lie. For the
word connotes management, control and power over a business entity.[14] There is
thus, as Garcia v. Social Security Commission Legal and Collection enjoins,[15]

. . . 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 supplied)

The term managing head in Section 28(f) is used, in its broadest connotation, not to
any specific organizational or managerial nomenclature. To heed petitioners
reasoning would allow unscrupulous businessmen to conveniently escape liability
by the creative adoption of managerial titles.

While the Court affirms the appellate courts decision, there is a need to modify the
penalty imposed on petitioner. The appellate court affirmed the trial courts
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 fine of not less than Five thousand pesos (P5,0000.00) nor more
than Twenty 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. x x x

The proper penalty for this specific 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 employees compensation, fails to
remit the said deductions to the SSS within thirty (30) days from the date they
became due shall be presumed to have misappropriated such contributions or loan
amortizations and shall suffer the penalties provided in Article Three hundred
fifteen [Art. 315] of the Revised Penal Code. (emphasis and underscoring
supplied)

Article 315 of the Revised Penal Code provides that the penalty in this case
should be

x x x 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;

x x x x.

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.[16]

Taking into account the misappropriated P421,151.09 and the Courts

discourse in People v. Gabres[17] 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.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice
Chairperson

WE CONCUR:
 ARTURO D. BRION LUCAS P. BERSAMIN
Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

*
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.
[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]
BLACKS 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.