REPUBLIC VS PATANAO (1967)

12 Nov 2017

[L-22356, July 21, 1967] Civil Law| Taxation

FACTS:
Pedro B. Patanao, an Agusan timber concessionaire, was prosecuted for failure to file income tax
returns and for non-payment of income tax. He was ACQUITTED. Later, the government sued
him civilly for the collection of the tax due. Patanao alleges that the civil claim cannot prosper
anymore because:

1. He was already acquitted in the criminal case;

2. The collection of the tax was not reserved in the criminal action.
HELD:
1. The acquittal in the criminal case is not important. Under the Revised Penal Code, civil
liability is the result of a crime; in the Internal Revenue Code, civil liability arises first, i.e.,
civil liability to pay taxes arises from the fact that one has earned income or has engaged in
business, and not because of any criminal act committed by him. In other words, criminal
liability comes only after failure of the debtor to satisfy his civil obligation.
2. The collection of the tax could not have been reserved in the criminal case – because criminal
prosecution is not one of the remedies stated in the law for the collection of the tax. (Pp vs
Arnault, L-4288, Nov 20, 1952; Pp vs Tierra, L-17177-17180, Dec 28, 1964). Indeed civil
liability is not deemed included in the criminal proceeding. The tax certainly is not a mere
civil liability arising from a crime, that could be wiped out by the judicial declaration of non-
existence of the criminal acts charged. (Castro vs Internal Revenue, L-12174, April 20, 1962).