Tan vs. Ballena

In prosecutions for violations of the Social Security Law, a special law, the offenses are mala prohibita and good faith or lack of criminal intent is not a defense at the probable cause stage; the only inquiry is whether the law has been violated, and an admission of non-remittance of SSS contributions is sufficient to establish probable cause. The Court further held that procedural requirements of verification, certification of non-forum shopping, and timely filing may be relaxed when justified by the circumstances of the case and the merits of the petition, particularly where a large number of complainants are involved and most have become unavailable to sign pleadings.

Petitioners Antonio Tan, Danilo Domingo, and Robert Lim were officers of Footjoy Industrial Corporation, a domestic corporation engaged in manufacturing shoes and footwear, prior to the cessation of its operations in February 2001. The respondents were employees of Footjoy. The dispute arose from the company's alleged failure to report its employees for compulsory SSS coverage and to remit their SSS contributions and loan amortizations, in violation of Republic Act No. 1161, as amended by Republic Act No. 8282 (the Social Security Act of 1997). The SSS Law imposes penal liability on employers who fail to register employees, fail to remit contributions, or misappropriate deducted contributions, with Section 28(f) extending liability to the managing head, directors, or partners of a corporation.

Petitioners Antonio Tan, Danilo Domingo, and Robert Lim were officers of Footjoy Industrial Corporation, a domestic corporation engaged in manufacturing shoes and footwear in Guiguinto, Bulacan. Tan served as president, Domingo as administrative officer, and Lim as general manager of one of the company's annex buildings. On March 19, 2001, respondent Amelito Ballena and one hundred thirty-nine other employees of Footjoy filed a Joint Complaint-Affidavit before the Office of the Provincial Prosecutor of Bulacan against the company and petitioners Tan and Domingo. The complaint alleged that the company did not regularly report the respondent employees for membership at the Social Security System and failed to remit their SSS contributions and loan amortizations, which had already been deducted from their wages. These acts were alleged to violate Sections 9, 10, 22, and 24(b) of Republic Act No. 1161, as amended by Republic Act No. 8282, in relation to Section 28(e), (f), and (h) thereof, as well as Article 315 of the Revised Penal Code.

In their Joint Counter-Affidavit, petitioners Tan and Domingo attributed their failure to timely pay and update the monthly SSS contributions to the economic distress that beset the company. They alleged that the company's situation worsened when its buildings and equipment were destroyed by fire on February 4, 2001, which eventually led to the cessation of operations. Some employees then tried to avail themselves of their SSS benefits but failed, prompting the filing of the complaint. Petitioners underscored their good faith and willingness to pay by executing a memorandum of agreement with the SSS on April 10, 2001, approving an installment plan for ₱5,227,033.66 representing SS premium contributions and penalties for the period August 2000 to January 2001, payable in twenty-four monthly installments.

The Assistant Provincial Prosecutor issued a Joint Resolution on May 17, 2001, finding probable cause to charge Footjoy, Tan, and Domingo with violations of the SSS Law, while dismissing the estafa charge as absorbed by the SSS Law violations. After respondents moved to implead additional respondents and petitioners moved for reconsideration, the Assistant Provincial Prosecutor issued a Final Resolution on August 20, 2001, modifying the original resolution by impleading Robert Lim as additional respondent and directing the filing of two informations. A Supplementary Resolution dated September 20, 2001 clarified that two informations for violations of Sections 9, 10, and 24(b) in relation to Section 28(e), (f), and (h) of the SSS Law should be filed. Accordingly, on September 28, 2001, two informations were filed in Branch 18 of the RTC of Bulacan against petitioners Tan, Domingo, and Lim.

Petitioners filed a Petition for Review with the DOJ on November 13, 2001, alleging that the Assistant Prosecutor committed grave and manifest error in finding probable cause. The DOJ resolved to grant the petition on March 19, 2002, reversing the Provincial Prosecutor's resolution and directing the withdrawal of the informations. Respondents' Motion for Reconsideration was denied on August 9, 2002. Respondents then filed a Petition for Certiorari with the Court of Appeals on October 16, 2002, which was initially dismissed outright on November 29, 2002 for defective verification and certification of non-forum shopping (only two signatories lacked authority to represent the others) and for being filed one day beyond the reglementary period. Upon respondents' Motion for Reconsideration, the Court of Appeals directed the filing of an amended petition impleading all original complainants. An amended petition was filed on March 13, 2003, signed by only one hundred eighty of the two hundred forty original complainants. The Court of Appeals granted the motion for reconsideration on June 2, 2003, and reinstated the petition. On September 30, 2004, the appellate court rendered its decision vacating the DOJ resolutions and reinstating the Provincial Prosecutor's Final Resolution, finding that the DOJ committed grave abuse of discretion and that probable cause existed to indict petitioners. Petitioners' Motion for Reconsideration was denied on May 9, 2005.

• Timeliness of Petition: Petitioners argued that the Court of Appeals committed grievous error and acted without jurisdiction when it gave due course to the respondents' Petition for Certiorari despite the fact that it was filed one day beyond the reglementary period.
• Defective Verification and Certification: Petitioners maintained that the Court of Appeals erred in giving due course to the petition despite the fact that the two signatories thereof were not duly authorized by the other petitioners to file the petition on their behalf, rendering the verification and certification of non-forum shopping defective.
• Probable Cause and DOJ Authority: Petitioners argued that the Court of Appeals committed serious error in reversing the DOJ resolution, which found no probable cause to indict them, contending that the DOJ is the highest agency and ultimate authority to decide the existence or non-existence of probable cause and that the Court of Appeals lacks authority to reverse such findings.
• Good Faith and Economic Distress: Petitioners interposed the defenses of lack of criminal intent and good faith, asserting that their failure to remit SSS contributions was brought about by economic difficulties, compounded by the fire that destroyed the company's buildings and equipment, and that they had already agreed to settle their obligations with the SSS through an installment plan.

• Grave Abuse of Discretion by DOJ: Respondents claimed that the DOJ committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding that no probable cause existed to charge petitioners with violations of the SSS Law.
• Insufficiency of Petitioners' Evidence: Respondents argued that the allegation of petitioners' failure to report respondents to the SSS for coverage was not supported by evidence on the part of petitioners.
• Mala Prohibita Nature of Offenses: Respondents contended that charges for violation of a special law such as the Social Security Act can be overcome by a show of good faith and lack of intent to commit the same — a position the Court of Appeals ultimately rejected in respondents' favor by holding that such defenses are unavailing in mala prohibita offenses.
• Liberal Interpretation of Rules: Respondents prayed for a liberal interpretation of the rules of procedure, contending that the procedural lapses committed by their counsel were honest and excusable mistakes that should give way to their meritorious case.

• Timeliness of Filing: Whether the Court of Appeals committed grievous error and acted without jurisdiction when it gave due course to the respondents' Petition for Certiorari despite the fact that it was filed out of time.
• Defective Verification and Certification: Whether the Court of Appeals committed grievous error when it gave due course to the respondents' Petition for Certiorari despite the fact that the two signatories were not duly authorized by the other petitioners to file the petition on their behalf.
• Probable Cause: Whether the Court of Appeals committed serious error when it reversed the DOJ resolution which found that petitioners could not be indicted for any violation of the SSS Law for want of probable cause.

• Timeliness of Filing: No. The Court of Appeals committed no reversible error in reinstating the petition despite its late filing, given the obvious merits of the case and the existence of good cause justifying relaxation of the reglementary period.
• Defective Verification and Certification: No. The circumstances justified relaxation of the requirements, as most of the original complainants had sought employment in neighboring towns and were no longer available to sign, and the signatories were real parties-in-interest with sufficient knowledge to swear to the truth of the allegations.
• Probable Cause: No. The Court of Appeals did not err in reversing the DOJ resolution, as the DOJ committed grave abuse of discretion in ignoring the clear sufficiency of evidence establishing probable cause, particularly petitioners' own admission of non-remittance of SSS contributions in violation of the SSS Law.

• Timeliness of Filing: Rules of procedure are mere tools designed to facilitate the attainment of justice, and their strict and rigid application that results in technicalities frustrating substantial justice must be eschewed. The appellate court has the discretion whether or not to dismiss a case, which must be exercised soundly in accordance with the tenets of justice and fair play. It is a far better course to excuse a technical lapse and afford the parties a review to attain the ends of justice rather than dispose of the case on technicality. In Vallejo vs. Court of Appeals, the Court of Appeals initially dismissed a petition for certiorari for having been filed beyond the reglementary period, but the Supreme Court reversed that ruling because the petitioner had presented good cause for the proper determination of his case. The same principle applied here, as the obvious merits of the respondents' case justified the appellate court's reinstatement of the petition despite the one-day delay.

• Defective Verification and Certification: Verification is intended to secure an assurance that the allegations in the pleading are true and correct and not the product of imagination or speculation, while the certification of non-forum shopping is meant to prohibit and penalize the evils of forum shopping. Under justifiable circumstances, the Court has allowed relaxation of these requirements. In Torres vs. Specialized Packaging Development Corporation, the verification requirement was deemed substantially complied with despite only two of twenty-five petitioners signing. In Ateneo de Naga University vs. Manalo and Bases Conversion and Development Authority vs. Uy, similar relaxations were allowed. While the general rule requires all petitioners to sign the certification of non-forum shopping, an exception exists when petitioners show reasonable cause for failure to personally sign, such that outright dismissal would defeat the administration of justice. Here, counsel disclosed that most of the original complainants had sought employment in neighboring towns and were unavailable; only one hundred eighty of two hundred forty original complainants could sign the amended petition. Given the total number of respondents and the elapsed period of almost two years, the case fell under the exception.

• Probable Cause: Probable cause is the existence of facts and circumstances that would excite the belief in a reasonable mind that the person charged was guilty of the crime prosecuted; it does not mean actual and positive cause or absolute certainty but is based on opinion and reasonable belief. While the determination of probable cause pertains to the public prosecutor and is subject to the DOJ's power of review, this does not preclude the Court of Appeals from intervening via a Rule 65 petition when grave abuse of discretion is committed, as when a clear sufficiency or insufficiency of evidence is ignored. A preliminary investigation does not require a full and exhaustive presentation of evidence but only such as may engender a well-founded belief that an offense was committed and the accused is probably guilty; only prima facie evidence is required. Petitioners did not deny their failure to remit SSS contributions and loan payments in violation of Section 28(e), (f), and (h) of the SSS Law. Their defenses of good faith and lack of criminal intent deserved scant consideration because the SSS Law is a special law and the offenses are mala prohibita, where the only inquiry is whether the law has been violated. When an act is illegal, the intent of the offender is immaterial. Petitioners' admission of their violations was more than enough to establish probable cause.

• Mala Prohibita vs. Mala in Se — The law divides crimes into acts wrong in themselves (mala in se) and acts wrong only because positive law forbids them (mala prohibita). In mala in se, the intent governs; in mala prohibita, the only inquiry is whether the law has been violated. When an act is illegal, the intent of the offender is immaterial. Violations of the Social Security Law, a special law, are mala prohibita, and accordingly, defenses of good faith and lack of criminal intent are unavailing. Petitioners' admission of non-remittance of SSS contributions sufficed to establish probable cause without need of proving criminal intent.

• Relaxation of Procedural Rules — Rules of procedure are mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which results in technicalities that frustrate rather than promote substantial justice, must be eschewed. Courts have the discretion to excuse technical lapses and afford parties a review on the merits, particularly where outright dismissal would defeat the administration of justice. This doctrine was applied to justify the Court of Appeals' reinstatement of a petition filed one day late and with a defective verification and certification of non-forum shopping.

• Substantial Compliance with Verification — The verification requirement is substantially complied with when the signatories are real parties-in-interest with sufficient knowledge and belief to swear to the truth of the allegations in the pleading, even if not all petitioners signed. This follows Torres vs. Specialized Packaging Development Corporation, where only two of twenty-five petitioners signed, and Ateneo de Naga University vs. Manalo, where only the president signed for the institution and its officers.

• Exception to the Rule on Certification of Non-Forum Shopping — While the general rule requires all petitioners to sign the certification of non-forum shopping, an exception exists when petitioners show reasonable cause for failure to personally sign, such that outright dismissal would defeat the administration of justice. In this case, the unavailability of most complainants who had sought employment elsewhere constituted reasonable cause.

• Judicial Review of DOJ Findings on Probable Cause — The DOJ's power to review and reverse prosecutor's findings on probable cause does not preclude the Court of Appeals and the Supreme Court from exercising their own powers of review. In exceptional cases where grave abuse of discretion is committed — as when a clear sufficiency or insufficiency of evidence is ignored — the Court of Appeals may take cognizance via a petition under Rule 65.

• "The law has long divided crimes into acts wrong in themselves called acts mala in se; and acts which would not be wrong but for the fact that positive law forbids them, called acts mala prohibita. This distinction is important with reference to the intent with which a wrongful act is done. The rule on the subject is that in acts mala in se, the intent governs; but in acts mala prohibita, the only inquiry is, has the law been violated?" — This passage articulates the canonical distinction between mala in se and mala prohibita as applied to violations of the Social Security Law, establishing that criminal intent is immaterial in prosecutions under special laws.

• "It is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice." — This passage states the rationale for the relaxation of procedural rules, frequently cited in subsequent jurisprudence on the discretion of appellate courts to excuse procedural defects.

• "Thus, the petitioners' admission in the instant case of their violations of the provisions of the SSS Law is more than enough to establish the existence of probable cause to prosecute them for the same." — This passage crystallizes the Court's conclusion on the probable cause issue, tying the mala prohibita doctrine to the evidentiary standard for preliminary investigations.

• Torres vs. Specialized Packaging Development Corporation, G.R. No. 149634, July 6, 2004 — Followed. The Court applied this case's holding that verification is substantially complied with even when only some, not all, petitioners sign, provided the signatories are real parties-in-interest with sufficient knowledge to swear to the truth of the allegations.

• Ateneo de Naga University vs. Manalo, G.R. No. 160455, May 9, 2005 — Followed. The Court relied on this case for the proposition that verification by only one petitioner on behalf of an institution and its officers constitutes substantial compliance.

• Bases Conversion and Development Authority vs. Uy, G.R. No. 144062, November 2, 2006 — Followed. The Court cited this case for allowing the signature of only one principal party despite the absence of a board resolution conferring authority.

• Vallejo vs. Court of Appeals, G.R. No. 156413, April 14, 2004 — Followed. The Court applied this case's principle that a petition dismissed for being filed beyond the reglementary period may be reinstated when good cause is shown for the proper determination of the case.

• Dunlao, Sr. vs. Court of Appeals, 329 Phil. 613 (1996) — Followed. The Court cited this case for the distinction between mala in se and mala prohibita and the rule that in mala prohibita, the only inquiry is whether the law has been violated.

• Ladlad vs. Velasco, G.R. Nos. 172070-72, June 1, 2007 — Followed. The Court relied on this case for the definition of probable cause and the principle that the Court of Appeals may review DOJ findings via Rule 65 when grave abuse of discretion is present.

• People vs. Court of Appeals, 361 Phil. 492 (1999) — Followed. The Court cited this case for the principle that the determination of probable cause exclusively pertains to the public prosecutor for crimes cognizable by the RTC, and that a preliminary investigation requires only prima facie evidence, not proof beyond reasonable doubt.

• Section 1, Rule 65, Rules of Court — Sets the requirements for filing a Petition for Certiorari, including that the petition must be verified and accompanied by a sworn certification of non-forum shopping. Applied to assess the procedural defects in respondents' petition before the Court of Appeals.

• Section 4, Rule 65, Rules of Court — Provides that a Petition for Certiorari must be filed not later than sixty (60) days from notice of the judgment, order, or resolution, or from notice of denial of a motion for reconsideration. Applied to determine the timeliness of respondents' petition, which was filed one day beyond the reglementary period.

• Section 4, Rule 7, Rules of Court — Defines verification as an affidavit that the affiant has read the pleading and that the allegations are true and correct based on personal knowledge or authentic records. Applied in determining whether substantial compliance with the verification requirement was achieved.

• Section 3, Rule 46, Rules of Court (fourth paragraph) — Requires the petitioner to submit a sworn certification of non-forum shopping. Applied in assessing whether the certification signed by only some of the respondents was sufficient.

• Sections 9, 10, 22, and 24(b), Republic Act No. 1161, as amended by Republic Act No. 8282 (Social Security Act of 1997) — These provisions mandate compulsory SSS coverage of employees, prescribe the effective date of coverage, require remittance of contributions within the first ten days of each calendar month, and penalize misrepresentation of employment dates or failure to remit contributions resulting in reduced benefits. Applied to determine whether petitioners' conduct constituted violations of the SSS Law.

• Section 28(e), (f), and (h), Republic Act No. 1161, as amended by Republic Act No. 8282 — The penal clause of the SSS Law. Section 28(e) penalizes failure or refusal to comply with the Act; Section 28(f) extends liability to the managing head, directors, or partners of a corporation; Section 28(h) creates a presumption of misappropriation when an employer fails to remit deducted contributions within thirty days, with penalties under Article 315 of the Revised Penal Code. Applied to establish the penal liability of petitioners as corporate officers of Footjoy.

• Article 315, paragraph 1(b), Revised Penal Code — Defines estafa by misappropriating or converting money, goods, or personal property received in trust or under obligation to return. Cited in relation to Section 28(h) of the SSS Law, though the estafa charge was deemed absorbed by the SSS Law violations at the preliminary investigation stage.

Justice Ynares-Santiago (Chairperson), Justice Carpio, Justice Austria-Martinez, and Justice Nachura concurred. Justice Antonio T. Carpio was designated to sit as additional member replacing Justice Ruben T. Reyes per Raffle dated May 28, 2008. No separate concurring opinions were noted.