Mendez vs. People of the Philippines

After arraignment, an amendment to an information is permissible only if it is formal; an amendment is formal if it does not charge another offense different from the original information or alter the prosecution's theory of the case so as to cause surprise to the accused and affect the form of defense he has or will assume.

Dr. Joel C. Mendez operated as a single proprietor under several trade names in the practice of his profession. The National Internal Revenue Code, as amended by Republic Act No. 8424, requires resident citizens engaged in the practice of a profession to file income tax returns and penalizes failure to do so under Section 255. The Court of Tax Appeals exercises jurisdiction over the criminal charge involved.

Dr. Joel C. Mendez was alleged by the Bureau of Internal Revenue to have operated as a single proprietor doing business and/or exercising his profession for taxable years 2001 to 2003 under several trade names and registration addresses: (a) Mendez Body and Face Salon and Spa, registered with Revenue District Office No. 39 – South Quezon City; (b) Mendez Body and Face Salon and Spa, registered with RDO No. 39 – South Quezon City; (c) Mendez Body and Face Salon and Spa, registered with RDO No. 40 – Cubao; (d) Mendez Body and Face Skin Clinic, registered with RDO No. 47 – East Makati; (e) Weigh Less Center, registered with RDO No. 21; and (f) Mendez Weigh Less Center, registered with RDO No. 4 – Calasiao Pangasinan. Based on these operations, the BIR alleged that petitioner failed to file his income tax returns for taxable years 2001 to 2003 and consequently evaded his obligation to pay the correct amount of taxes due the government.

In his defense, petitioner admitted that he had been operating as a single proprietor under these trade names in Quezon City, Makati, Dagupan and San Fernando. He countered, however, that he did not file his income tax returns in these places because his business establishments were registered only in 2003 at the earliest; thus, they were not yet in existence at the time of his alleged failure to file his income tax return. After preliminary investigation, State Prosecutor Juan Pedro Navera found probable cause against petitioner for non-filing of income tax returns for taxable years 2001 and 2002 and for failure to supply correct and accurate information as to his true income for taxable year 2003, in violation of the National Internal Revenue Code. An Information was filed with the CTA charging petitioner with violation of Section 255 of Republic Act No. 8424. The Information alleged that on or about April 15, 2002, in Quezon City, and within the jurisdiction of the CTA, petitioner, a duly registered taxpayer and sole proprietor of "Weigh Less Center" with principal office at No. 31 Roces Avenue, Quezon City, and with several branches in Quezon City, Makati, San Fernando and Dagupan City, willfully, unlawfully and feloniously failed to file his Income Tax Return with the BIR for taxable year 2001, to the damage and prejudice of the Government in the estimated amount of ₱1,089,439.08, exclusive of penalties, surcharges and interest.

Petitioner was arraigned and pleaded not guilty on March 5, 2007. On May 4, 2007, the prosecution filed a Motion to Amend Information with Leave of Court. The amended Information alleged that on or about April 15, 2002, in Quezon City, and within the jurisdiction of the CTA, petitioner, doing business under the name and style of "Weigh Less Center"/"Mendez Medical Group", with several branches in Quezon City, Muntinlupa City, Mandaluyong City and Makati City, willfully, unlawfully and feloniously failed to file his Income Tax Return with the BIR for income earned for taxable year 2001, to the damage and prejudice of the Government in the estimated amount of ₱1,089,439.08, exclusive of penalties, surcharges and interest.

Petitioner failed to file his comment to the motion within the required period. On June 12, 2007, the CTA First Division granted the prosecution's motion. The CTA ruled that the amendment was merely formal because it "merely states with additional precision something already contained in the original information." It found that petitioner failed to show that the defenses applicable under the original Information could no longer be used under the amended Information, since both charged the same offense, violation of Section 255. The CTA observed that the change in the name of his business to include "Mendez Medical Group" did not alter the fact that petitioner was charged with failure to file his Income Tax Return; that the change in branches did not relieve him of his duty to file an ITR; that the places where he conducted business did not affect the CTA's jurisdiction or change the nature of the offense, as only one ITR is demanded of every taxpayer; and that the insertion of "for income earned" merely stated the normal subject matter found in every income tax return. Petitioner moved for reconsideration, but the CTA denied the motion on August 13, 2007. Petitioner then filed the present petition. The CTA's factual findings relevant to the Supreme Court's analysis included that the prosecution's evidence during the preliminary investigation showed petitioner did not file his income tax return in his place of legal residence or principal place of business in Quezon City or with the Commissioner.

• Substantial Amendment: Petitioner argued that the prosecution's amendment was a substantial amendment prohibited under Section 14, Rule 110 of the Revised Rules of Criminal Procedure because its additional allegations altered the prosecution's theory of the case, caused surprise to him, and affected the form of his defense.
• Right to Be Informed: Petitioner maintained that he was not properly informed of the nature and cause of the accusation against him.
• Change in Locations: Petitioner claimed, adopting the observation of a dissenting CTA justice, that changing the allegation on the locations of his business from San Fernando, Pampanga and Dagupan City to Muntinlupa and Mandaluyong cities would cause surprise as to the form of defense he would have to assume.
• Change in Date: Petitioner argued that changing the date of the commission of the crime from 2001 to 2002 would alter his defense because the difference in taxable years would require a different set of defense evidence.
• Mendez Medical Group: Petitioner asserted that the new allegation of "Mendez Medical Group" deprived him of the right, during the preliminary investigation, to present evidence against the alleged operation or existence of that entity.
• Subject of the Offense: Petitioner summed that the amendments sought changed the subject of the offense and were therefore substantial.

• Wrong Remedy: Respondents claimed that petitioner availed of the wrong remedy in questioning the CTA resolutions; under Rule 9, Section 9 of the Revised Rules of CTA, the remedy of appeal to the CTA en banc was the proper remedy, to be availed of within fifteen days from receipt of the assailed resolution, and the petition was a substitute for a lost appeal.
• No Grave Abuse: Respondents argued that even assuming certiorari was the proper remedy, the CTA did not commit an error of jurisdiction or act with grave abuse of discretion; the assailed resolutions were in accord with jurisprudence.
• No Surprise: Respondents countered that the amended Information could not have caused surprise because the amendments did not change the nature and cause of the accusation; the offense and the acts or omissions involved remained the same under the original and amended Information, i.e., failure to file an ITR in 2002 for income earned in 2001 from the operation of his businesses.
• Preliminary Investigation Not Exhaustive: Respondents maintained that neither the change in the date of the commission of the crime nor the inclusion of "Mendez Medical Group" would cause surprise because petitioner was fully apprised of these facts during the preliminary investigation; the preparation of the defense contemplated by law does not strictly include the presentation of evidence during the preliminary investigation because that stage is not the occasion for the full and exhaustive display of the parties' evidence.

• Propriety of Certiorari: Whether the remedy of certiorari under Rule 65 is proper to assail the CTA resolutions granting the prosecution's Motion to Amend Information and denying petitioner's motion for reconsideration.
• Substantial Amendment: Whether the prosecution's amendments made after petitioner's arraignment are substantial in nature and must perforce be denied.

• Propriety of Certiorari: Yes. Certiorari was the proper remedy because the assailed CTA resolutions were interlocutory and no appeal or plain, speedy and adequate remedy existed; after the denial of reconsideration, the only remedy was a petition for certiorari under Rule 65. The petition was nonetheless dismissed for failure to establish grave abuse of discretion.
• Substantial Amendment: No. The amendments were formal, not substantial; they did not charge another offense different from the original or alter the prosecution's theory of the case so as to cause surprise to petitioner and affect the form of his defense. The CTA did not gravely abuse its discretion in allowing them.

• Propriety of Certiorari: Under Rule 65, certiorari is available when there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. The remedy of appeal to the CTA en banc under Section 9, Rule 9 of the Revised Rules of CTA is by petition for review under Rule 43 of the Rules of Court. Under Section 1, Rule 43, a petition for review is available only against a judgment or final order. A judgment or order is final if it disposes of the action or proceeding completely, or terminates a particular stage of the same action; in that case, the remedy is appeal. If the order or resolution merely resolves incidental matters and leaves something more to be done to resolve the merits of the case, it is interlocutory, and the aggrieved party's only remedy after failing to obtain reconsideration is a petition for certiorari under Rule 65. The assailed CTA resolutions granted the prosecution's motion to amend the Information and denied petitioner's motion for reconsideration; they did not dispose of the case or terminate a stage of the action. They were therefore interlocutory. Certiorari was thus the correct remedy. The petition was nevertheless dismissed because petitioner failed to establish that the CTA abused its discretion, much less gravely abused it.
• Substantial Amendment: Section 14, Rule 110 of the Revised Rules of Criminal Procedure governs amendment of an information. Before the accused enters a plea, a complaint or information may be amended in form or in substance without leave of court. After the plea and during trial, only a formal amendment may be made with leave of court and when it can be done without causing prejudice to the rights of the accused. There is no precise definition of a substantial amendment. According to jurisprudence, substantial matters in the complaint or information consist of the recital of facts constituting the offense charged and determinative of the jurisdiction of the court. After arraignment, the prosecution cannot seek a substantial amendment, particularly one that may prejudice the rights of the accused. One such right is the constitutional right of the accused to be informed of the nature and cause of the accusation against him, which is given life during arraignment. The theory is that since the accused officially begins to prepare his defense against the accusation on the basis of the recitals in the information read to him during arraignment, the prosecution must establish its case on the basis of the same information. In Almeda vs. Judge Villaluz, an amendment adding recidivism and habitual delinquency was allowed as formal because it related only to the range of the penalty that the court might impose in the event of conviction; it did not charge an offense different from the one charged and did not correct any defect in the trial court's jurisdiction over the subject matter. In Teehankee, Jr. vs. Madayag, the amendment from frustrated to consummated murder after the victim died was sustained as formal because the supervening fact of death was supplied merely to aid the trial court in determining the proper penalty; there was no change in the nature of the offense charged, the prosecution's theory, or the defense. Thus, amendments that do not charge another offense different from that charged in the original information, or do not alter the prosecution's theory of the case so as to cause surprise to the accused and affect the form of defense he has or will assume, are considered merely formal. The amendments in this case were (i) the alleged change in the date of the commission of the crime from 2001 to 2002; (ii) the addition of the phrase "doing business under the name and style of Mendez Medical Group"; (iii) the change and/or addition of the branches of petitioner's operation; and (iv) the addition of the phrase "for income earned." None adversely affected any substantial right of petitioner. The actual year of the commission of the offense escaped both petitioner and the prosecution. The prosecution's motion mistakenly stated that the original Information alleged the commission of the offense on or about April 15, 2001, even though the record clearly showed that the actual year alleged was 2002. Petitioner made a similar erroneous allegation in his petition. The CTA implicitly ruled in its August 13, 2007 resolution that there was in fact no amendment of the date by correctly citing what the original Information alleged. The actual date of the commission in 2002 was consistent with the allegation that the Information covered taxable year 2001: since the Information alleged failure to file an income tax return for taxable year 2001, the offense could only be committed when petitioner failed to file the return before the due date of filing in April of the succeeding year, 2002. The addition of "for income earned" before "for taxable year 2001" was likewise a mere formal amendment because it merely stated with additional precision something already contained in the original Information—that the income tax return is required to be filed precisely for the income earned for the preceding taxable year. As to the branches and the "Mendez Medical Group" allegation, under the National Internal Revenue Code, a resident citizen engaged in the practice of a profession within the Philippines is obligated to file in duplicate an income tax return on his income from all sources, regardless of the amount of his gross income. In complying, the taxpayer must keep in mind where to file and when to file. Under Section 51 B of the NIRC, the return should be filed with an authorized agent bank, Revenue District Officer, Collection Agent or duly authorized Treasurer of the city or municipality in which the person has his legal residence or principal place of business in the Philippines. Under Section 51 C, the return is required to be filed on or before April 15 of each year covering income for the preceding taxable year. Failure to comply violates Section 255 of the NIRC. Since petitioner operated as a sole proprietor from taxable years 2001 to 2003, he should have filed a consolidated return in his principal place of business, regardless of the number and location of his other branches. The change and/or addition of the branches therefore did not constitute a substantial amendment because it did not change the prosecution's theory that petitioner failed to file his income tax return. Matalam vs. Sandiganbayan, Second Division, cited by petitioner, was inapplicable. There, the amendment changed the cause of action from refusal to pay monetary claims to illegal dismissal, and the main defense of the accused—lack of appropriation—would no longer be available under the amendment. Here, the prosecution's theory did not change; its cause for filing the Information remained the same, and its evidence during the preliminary investigation showed that petitioner did not file his income tax return in his place of legal residence or principal place of business in Quezon City or with the Commissioner. The amendment did not alter the crime charged. Although a change in the location of branches may at first appear to deprive petitioner of his defense that his branches in Dagupan and San Fernando were registered only in 2003 and were inexistent in 2001, this was not the kind of defense contemplated under the Rules of Criminal Procedure and due process. The opportunity given to the accused to present defense evidence during the preliminary investigation is not exhaustive; the evidence that the respondent may present during trial is not limited to what he presented during the preliminary investigation, so long as the evidence for both parties supports or negates the elements of the offense charged. The jurisprudential test on whether a defendant is prejudiced by the amendment of an information pertains to the availability of the same defense and evidence that the accused previously had under the original information, read together with the characteristic thread of formal amendments, which is to maintain the nature of the crime or the essence of the offense charged. That thread remained consistent under the amended Information, which alleged petitioner's failure to file his return and consequently to pay the correct amount of taxes. Petitioner could not have been surprised. As to the inclusion of "Mendez Medical Group," petitioner's claim that it deprived him of the right to question the existence of this entity after preliminary investigation and arraignment lacked merit. Petitioner did not draw attention to any of his related operations that actually possessed its own juridical personality. The original Information described him as "sole proprietor of Weigh Less Center." A sole proprietorship is a form of business organization conducted for profit by a single individual and requires the proprietor or owner, like petitioner, to secure licenses and permits, register the business name, and pay taxes to the national government without acquiring juridical or legal personality of its own. In the amended Information, the prosecution additionally alleged that petitioner was "doing business under the name and style of 'Weigh Less Center'/Mendez Medical Group.'" Given the nature of a sole proprietorship, the addition of the phrase "doing business under the name and style" was merely descriptive of the nature of the business organization established by petitioner as a way to carry out the practice of his profession. Petitioner could not feign ignorance of the "entity" "Mendez Medical Group" because it was nothing more than the shadow of its business owner—petitioner himself. Moreover, the prosecution had attached copies of petitioner's paid advertisements making express reference to "Mendez Medical Group" in its Reply-Affidavit during the preliminary investigation. The amendments were therefore formal, and the CTA did not gravely abuse its discretion in allowing them.

• Amendment of Information After Arraignment — Under Section 14, Rule 110 of the Revised Rules of Criminal Procedure, before plea, a complaint or information may be amended in form or substance without leave of court; after plea and during trial, only a formal amendment may be made with leave of court and without prejudice to the accused. Substantial matters consist of the recital of facts constituting the offense charged and determinative of jurisdiction. An amendment is formal if it does not charge another offense different from the original or alter the prosecution's theory so as to cause surprise and affect the form of defense. The amendments in this case were formal.
• Prejudice Test for Amendments After Arraignment — Prejudice exists when a defense under the original information would no longer be available after the amendment and when any evidence the accused might have would be inapplicable to the amended information. This test is read together with the characteristic thread of formal amendments: maintaining the nature of the crime or the essence of the offense charged. Petitioner's defenses and evidence remained available, so no prejudice resulted.
• Right to Be Informed of the Nature and Cause of Accusation — The accused's constitutional right is given life during arraignment; because the accused begins preparing his defense based on the recitals read to him, the prosecution must establish its case on the same information. This right is not violated by formal amendments that do not alter the offense or the prosecution's theory. The amendments here did not change the nature and cause of the accusation.
• Sole Proprietorship Has No Separate Juridical Personality — A sole proprietorship is a business organization conducted for profit by a single individual; the proprietor must secure licenses and permits, register the business name, and pay taxes without acquiring juridical or legal personality. "Mendez Medical Group" was merely descriptive of petitioner's sole proprietorship, not a separate entity, so its inclusion could not have surprised him.
• Consolidated Income Tax Return for Sole Proprietor — A resident citizen engaged in the practice of a profession must file an income tax return on income from all sources; a sole proprietor files a consolidated return in his principal place of business regardless of the number and location of branches. The change or addition of branches did not affect the offense or the prosecution's theory.
• Interlocutory Orders and Certiorari — Certiorari under Rule 65 is available when there is no appeal or plain, speedy and adequate remedy; appeal to the CTA en banc under Rule 43 lies only from final judgments or orders. An order that merely resolves incidental matters and leaves the merits unresolved is interlocutory. The CTA resolutions were interlocutory, so certiorari was proper, but no grave abuse of discretion was shown.

• "There is no precise definition of what constitutes a substantial amendment. According to jurisprudence, substantial matters in the complaint or information consist of the recital of facts constituting the offense charged and determinative of the jurisdiction of the court." — This defines the concept of a substantial amendment, which was the central issue in determining whether the CTA correctly allowed the prosecution's amendment after arraignment.
• "In short, amendments that do not charge another offense different from that charged in the original one; or do not alter the prosecution's theory of the case so as to cause surprise to the accused and affect the form of defense he has or will assume are considered merely as formal amendments." — This is the Court's canonical formulation of the formal-amendment test, applied to uphold the amendments in this case.
• "To be sure, the jurisprudential test on whether a defendant is prejudiced by the amendment of an information pertains to the availability of the same defense and evidence that the accused previously had under the original information." — This states the prejudice standard used to reject petitioner's claim that the amendments impaired his defense.
• "A sole proprietorship is a form of business organization conducted for profit by a single individual, and requires the proprietor or owner thereof, like the petitioner-accused, to secure licenses and permits, register the business name, and pay taxes to the national government without acquiring juridical or legal personality of its own." — This defines a sole proprietorship and supports the holding that "Mendez Medical Group" was merely descriptive and not a separate juridical entity.

• Almeda vs. Judge Villaluz, 160 Phil. 750 (1975) — Cited to illustrate that an amendment adding recidivism and habitual delinquency is formal because it relates only to the range of penalty, does not charge a different offense, and does not correct jurisdiction.
• Teehankee, Jr. vs. Madayag, G.R. No. 103102, March 6, 1992, 207 SCRA 134 — Cited to illustrate that an amendment from frustrated to consummated murder based on the victim's supervening death is formal because it supplies a fact for determining the proper penalty without changing the offense, theory, or defense.
• Matalam vs. Sandiganbayan, Second Division, G.R. No. 165751, April 12, 2005, 455 SCRA 736 — Cited by petitioner but distinguished; the amendment there changed the cause of action from refusal to pay to illegal dismissal and eliminated the accused's main defense, whereas the present amendment did not alter the prosecution's theory.
• People vs. Montenegro, 242 Phil. 655 (1988) — Cited for the rule that prejudice exists when a defense under the original information would no longer be available after amendment and when the accused's evidence would be inapplicable to the amended information; the Court applied the test but found no prejudice.
• People vs. Casey, No. L-30146, February 24, 1981, 103 SCRA 21 — Cited for the principle that formal amendments maintain the nature of the crime or the essence of the offense charged.
• Guinto vs. Veluz, 77 Phil. 801 (1946) — Cited for the proposition that amendments not charging another offense different from the original are formal.
• Juasing Hardware vs. Hon. Mendoza, etc., et al., 201 Phil. 369 (1982) and Mangila vs. Court of Appeals, 435 Phil. 870 (2002) — Cited for the rule that a sole proprietorship does not acquire a separate juridical or legal personality.

• Section 14, Rule 110, Revised Rules of Criminal Procedure — Governs amendment or substitution of a complaint or information. Before plea, amendment in form or substance is allowed without leave; after plea and during trial, only a formal amendment may be made with leave and without prejudice. The amendments were formal and did not prejudice petitioner.
• Section 9, Rule 9, Revised Rules of CTA — Provides that appeal to the CTA en banc in criminal cases is by petition for review under Rule 43 within fifteen days from receipt of the decision or resolution. It was not available because the assailed CTA resolutions were interlocutory.
• Section 1, Rule 43, Rules of Court — A petition for review is available only against a judgment or final order. The CTA resolutions granting amendment and denying reconsideration were not final.
• Rule 65, Rules of Court — Certiorari is available when there is no appeal or plain, speedy and adequate remedy. It was the proper remedy for the interlocutory CTA resolutions after denial of reconsideration, but the petition was dismissed for lack of grave abuse.
• Section 255, National Internal Revenue Code (Republic Act No. 8424) — Penalizes failure to file a return, supply correct and accurate information, pay tax, withhold and remit tax, and refund excess taxes withheld on compensation. This was the offense charged against petitioner.
• Sections 51(A)(1)(a), 51(B), and 51(C), National Internal Revenue Code — Require a resident citizen engaged in the practice of a profession to file an income tax return on income from all sources; specify where and when to file; and require filing on or before April 15 covering income for the preceding taxable year. A sole proprietor files a consolidated return in his principal place of business regardless of branches, so the branch changes were not substantial.

Justice Arturo D. Brion (ponente); Justice Antonio T. Carpio (Chairperson); Justice Presbitero J. Velasco, Jr.; Justice Mariano C. del Castillo; and Justice Jose Portugal Perez. Justice Velasco was designated as an additional member in lieu of Justice Estela M. Perlas-Bernabe per Raffle dated June 9, 2014. No separate concurring opinions are indicated in the text.

• Justice Caesar Cassanova (CTA First Division, dissenting) — The CTA First Division's June 12, 2007 resolution had a dissent by Justice Caesar Cassanova. Petitioner adopted the dissenting CTA justice's observation that changing the alleged locations of his business from San Fernando, Pampanga and Dagupan City to Muntinlupa and Mandaluyong cities would cause surprise as to the form of defense he would assume. The Supreme Court rejected this position, holding that the amendment did not alter the prosecution's theory and did not prejudice any substantial right. No Supreme Court Justice dissented from the ponencia.