G.R. No. 183478 , February 10, 2020
Social Security System, Petitioner, v. Manuel F. Seno, Jr., Gemma S. Seno, and Fernando S. Gorrospe, Respondents.

FACTS

Respondents, as members of the Board of Directors of JMA Transport Services Corporation (a covered SSS member), were charged with failure to remit social security contributions under the Social Security Act. SSS filed an initial complaint for delinquencies from September 1997 to July 1999. During preliminary investigation, respondent Manuel Seno, Jr. issued 24 postdated checks to settle the obligation, leading to a provisional withdrawal of the complaint. However, two checks were dishonored. SSS then filed a second complaint for the original amount plus additional delinquencies from August 1999 to June 2004, totaling P4,903,267.52. Respondents contended JMA Transport ceased operations in July 1999, the original obligation was settled by the checks, and the dishonor was due to a bank merger. The Office of the City Prosecutor found probable cause and filed an Information. On appeal, the Department of Justice reversed, finding the company had ceased operations and the settlement via checks extinguished the original obligation, and ordered the withdrawal of the Information. The Regional Trial Court, however, denied the Motion to Withdraw Information, citing Franchise Verifications from the Land Transportation Franchising and Regulatory Board (attached to SSS’s Reply-Affidavit but not formally offered) indicating JMA Transport was in “active status” post-July 1999. The RTC later directed a reinvestigation to allow respondents to controvert the Franchise Verifications. Respondents filed a certiorari petition with the Court of Appeals, which annulled the RTC Orders, ruling the trial court gravely abused its discretion by basing its denial on evidence not part of the record and by ordering a reinvestigation that infringed on respondents’ rights.

ISSUE

Whether the Court of Appeals committed reversible error in ruling that the Regional Trial Court gravely abused its discretion in issuing its May 29, 2006 Order (denying the withdrawal of Information) and its September 25, 2006 Order (directing reinvestigation).

RULING

No, the Court of Appeals did not commit reversible error. The Supreme Court affirmed the CA Decision. The RTC gravely abused its discretion in its May 29, 2006 Order by relying on Franchise Verifications that were not formally part of the records of the preliminary investigation, as they were merely attached to an unsworn Position Paper filed by the SSS and not to the sworn Reply-Affidavit. The trial court’s duty was to determine probable cause based solely on the evidence presented during the preliminary investigation. In its September 25, 2006 Order, the RTC also gravely abused its discretion by ordering a reinvestigation. Once an Information is filed and the court acquires jurisdiction, the grant or denial of a motion for reinvestigation is discretionary. However, the RTC’s order brushed aside the DOJ’s final ruling directing the withdrawal of the Information and effectively allowed the prosecution to cure its defective evidence, violating respondents’ right to due process. The Supreme Court held that the DOJ Resolution, which found no probable cause due to the company’s cessation of operations and the settlement of the obligation, was binding on the prosecution, and the trial court should have granted the Motion to Withdraw Information.