G.R. No. L-16235; April 20, 1961
PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. CARLOS MAGDALUYO, defendant-appellee.

FACTS

The defendant, Carlos Magdaluyo, was found in possession of untaxed imported goods in November 1958 and was required to pay specific taxes. He refused, claiming non-ownership. The Bureau of Internal Revenue recommended his criminal prosecution for tax code violations. While the case was pending with the Pasay City Fiscal, the defendant, through counsel, offered to compromise by paying the full tax plus a penalty. A conference was held involving representatives from the Bureau of Internal Revenue and the Pasay City Attorney’s Office. A tentative agreement was reached and subsequently approved by the Commissioner of Internal Revenue, who increased the compromise penalty. The Pasay City Attorney, by letter dated January 24, 1959, expressly concurred with the compromise, stated he had “no objection in dismissing the case,” and deemed the matter “closed and terminated.”
The defendant, due to financial difficulty, was permitted to pay the obligation by installments. He made several partial payments. However, before he completed full payment, an Assistant City Attorney filed an information against him for tax evasion on August 10, 1959. The defendant moved to quash the information, arguing that a valid compromise had already extinguished his criminal liability. The trial court granted the motion and dismissed the case. The government appealed, contending the filing of the information was proper since full payment had not been made at that time.

ISSUE

Whether the filing of the criminal information was valid despite a prior compromise agreement approved by the Commissioner of Internal Revenue and concurred in by the City Fiscal.

RULING

The Supreme Court affirmed the dismissal, ruling the information was invalidly filed. The legal logic centers on the finality and effect of the administrative compromise. The Court emphasized that a compromise on the criminal liability for a tax offense, expressly allowed under Section 309 of the National Internal Revenue Code, was perfected prior to the filing of the information. The agreement was approved by the Commissioner and, crucially, concurred in by the Pasay City Attorney, who had supervisory authority over the prosecution. His January 24, 1959 letter constituted a clear adoption of the Bureau’s stand and a termination of the case from his office’s perspective. The subsequent filing of an information by a subordinate assistant, seven months later, contravened this settled administrative disposition. The government’s argument that full payment was a condition precedent was rejected. The compromise agreement set no specific deadline for payment, and the Commissioner had expressly agreed to installment payments. The defendant’s payments, culminating in full payment shortly after the information was filed, demonstrated compliance. The cited jurisprudence was distinguished as involving compromises made after filing or without proper approval. Here, the pre-filing compromise, with the Fiscal’s concurrence, barred the subsequent criminal prosecution.