Republic of the Philippines

SUPREME COURT
Manila
EN BANC
1G.R. No. L-15045 January 20, 1961
IN RE: PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL
SECURITY SYSTEM. ROMAN CATHOLIC ARCHBISHOP OF MANILA, petitioner-
appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.
Feria, Manglapus and Associates for petitioner-appellant.
Legal Staff, Social Security System and Solicitor General for respondent-appellee.
GUTIERREZ DAVID, J.:
On September 1, 1958, the Roman Catholic Archbishop of Manila, thru counsel, filed
with the Social Security Commission a request that "Catholic Charities, and all religious
and charitable institutions and/or organizations, which are directly or indirectly, wholly or
partially, operated by the Roman Catholic Archbishop of Manila," be exempted from
compulsory coverage of Republic Act No. 1161, as amended, otherwise known as the
Social Security Law of 1954. The request was based on the claim that the said Act is a
labor law and does not cover religious and charitable institutions but is limited to
businesses and activities organized for profit. Acting upon the recommendation of its
Legal Staff, the Social Security Commission in its Resolution No. 572, series of 1958,
denied the request. The Roman Catholic Archbishop of Manila, reiterating its arguments
and raising constitutional objections, requested for reconsideration of the resolution. The
request, however, was denied by the Commission in its Resolution No. 767, series of
1958; hence, this appeal taken in pursuance of section 5(c) of Republic Act No. 1161, as
amended.
Section 9 of the Social Security Law, as amended, provides that coverage "in the System
shall be compulsory upon all members between the age of sixteen and sixty rears
inclusive, if they have been for at least six months a the service of an employer who is a
member of the System, Provided, that the Commission may not compel any employer to
become member of the System unless he shall have been in operation for at least two
years and has at the time of admission, if admitted for membership during the first year of
the System's operation at least fifty employees, and if admitted for membership the
following year of operation and thereafter, at least six employees x x x." The term
employer" as used in the law is defined as any person, natural or juridical, domestic or
foreign, who carries in the Philippines any trade, business, industry, undertaking, or
activity of any kind and uses the services of another person who is under his orders as
regards the employment, except the Government and any of its political subdivisions,
branches or instrumentalities, including corporations owned or controlled by the
Government" (par. [c], see. 8), while an "employee" refers to "any person who performs
services for an 'employer' in which either or both mental and physical efforts are used and
who receives compensation for such services" (par. [d], see. 8). "Employment", according
to paragraph [i] of said section 8, covers any service performed by an employer except
those expressly enumerated thereunder, like employment under the Government, or any
of its political subdivisions, branches or instrumentalities including corporations owned

and controlled by the Government, domestic service in a private home, employment
purely casual, etc.
From the above legal provisions, it is apparent that the coverage of the Social Security
Law is predicated on the existence of an employer-employee relationship of more or less
permanent nature and extends to employment of all kinds except those expressly
excluded.
Appellant contends that the term "employer" as defined in the law should — following
the principle of ejusdem generis — be limited to those who carry on "undertakings or
activities which have the element of profit or gain, or which are pursued for profit or
gain," because the phrase ,activity of any kind" in the definition is preceded by the words
"any trade, business, industry, undertaking." The contention cannot be sustained. The rule
ejusdem generisapplies only where there is uncertainty. It is not controlling where the
plain purpose and intent of the Legislature would thereby be hindered and defeated.
(Grosjean vs. American Paints Works [La], 160 So. 449). In the case at bar, the definition
of the term "employer" is, we think, sufficiently comprehensive as to include religious
and charitable institutions or entities not organized for profit, like herein appellant, within
its meaning. This is made more evident by the fact that it contains an exception in which
said institutions or entities are not included. And, certainly, had the Legislature really
intended to limit the operation of the law to entities organized for profit or gain, it would
not have defined an "employer" in such a way as to include the Government and yet make
an express exception of it.
It is significant to note that when Republic Act No. 1161 was enacted, services performed
in the employ of institutions organized for religious or charitable purposes were by
express provisions of said Act excluded from coverage thereof (sec. 8, par. [j] subpars. 7
and 8). That portion of the law, however, has been deleted by express provision of
Republic Act No. 1792, which took effect in 1957. This is clear indication that the
Legislature intended to include charitable and religious institutions within the scope of
the law.
In support of its contention that the Social Security Law was intended to cover only
employment for profit or gain, appellant also cites the discussions of the Senate, portions
of which were quoted in its brief. There is, however, nothing whatsoever in those
discussions touching upon the question of whether the law should be limited to
organizations for profit or gain. Of course, the said discussions dwelt at length upon the
need of a law to meet the problems of industrializing society and upon the plight of an
employer who fails to make a profit. But this is readily explained by the fact that the
majority of those to be affected by the operation of the law are corporations and
industries which are established primarily for profit or gain.
Appellant further argues that the Social Security Law is a labor law and, consequently,
following the rule laid down in the case of Boy Scouts of the Philippines vs. Araos (G.R.
No. L-10091, January 29, 1958) and other cases1, applies only to industry and occupation
for purposes of profit and gain. The cases cited, however, are not in point, for the reason
that the law therein involved expressly limits its application either to commercial,
industrial, or agricultural establishments, or enterprises. .
Upon the other hand, the Social Security Law was enacted pursuant to the "policy of the
Republic of the Philippines to develop, establish gradually and perfect a social security
system which shall be suitable to the needs of the people throughout the Philippines and

2. old age and death. It affords protection to labor. Reyes. L-6988. benefit or support of any priest who might be employed by appellant. but funds belonging to the members which are merely held in trust by the Government. their payment as retirement death or disability benefits would not constitute a violation of the cited provisions of the Constitution. No. These contributions. November 23. So ordered with costs against appellant. as amended. At any rate. concur. J. Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right to disseminate religious information. San Beda College vs. No. are not in the nature of taxes on employment. sickness. Nos. old age and death in line with the constitutional mandate to promote social justice to insure the well-being and economic security of all the people. L-7742-43. they are intended for the protection of said employees against the hazards of disability.L. appellant cannot arbitrarily delimit the extent of its provisions to relations between capital and labor in industry and agriculture." Together with the contributions imposed upon the employees and the Government. compatible with the policy of the Church to ameliorate living conditions of the working class. and is in full accord with the constitutional provisions on the "promotion of social justice to insure the well-being and economic security of all the people. of the Social Security Commission are hereby affirmed. J.R.. Bautista Angelo. C. 1955. series of 1958.) Such enactment is a legitimate exercise of the police power." (See. Paras. reserves his vote.J. 1954. Bengzon. No. Quezon Institute vs. Footnotes 1 UST Hospital Employees Association vs.. 1161. especially to working women and minors. L-26712-16 December 27. 1969 . sickness. Parazo. JJ. Padilla. and Barrera. There is no merit in the claim that the inclusion of religious organizations under the coverage of the Social Security Law violates the constitutional prohibition against the application of public funds for the use.R. since such payment shall be made to the priest not because he is a priest but because he is an employee.. 1955. concur in the result. Paredes and Dizon.shall provide protection to employees against the hazards of disability. assuming that said funds are impressed with the character of public funds.. 572 kind 767. JJ. Republic of the Philippines SUPREME COURT Manila EN BANC 2G.R." Being in fact a social legislation. Velasco & Quezon Institute vs. All that is required of appellant is to make monthly contributions to the System for covered employees in its employ. Concepcion. G.B. National Labor Union. May 24. UST Hospital. The funds contributed to the System created by the law are not public funds. Republic Act No.R. contrary to appellant's contention. October 29. IN VIEW OF THE FOREGOING. G. Resolutions Nos. G. L-7649.

1966.UNITED CHRISTIAN MISSIONARY SOCIETY. BOARD OF FOREIGN MISSION OF THE REFORMED CHURCH IN AMERICA. TEEHANKEE. Respondent Commission set the Motion to Dismiss for hearing and oral argument on July 20. but upon advice by certain Social Security System officials. representing their back premiums for the period from September. Barredo. vs. 1966. J. At the hearing. respondent Commission issued its Order dismissing the petition. and respondent System filed its memorandum on August 4. UNITED CHURCH BOARD FOR WORLD MINISTERS. They further claimed that the penalties assessed against them appear to be inequitable.446. petitioners alleged that they had labored under the impression that as international organizations. after which the motion would be deemed submitted for decision. it has no legal authority to condone. respondent filed its reply thereto of June 22. After several hearings. Sedfrey A. The five petitioners originally filed on November 20. They instead filed their consolidated amended petition dated May 7. respondents. 1963. the total amount of P81.341. Upon petition of the System's Counsel. citing several resolutions of respondent Commission which in the past allegedly permitted condonation of such penalties. On May 25. Assistant Solicitor General Felicisimo R. . 1963. 1966. contesting the social security coverage of American missionaries who perform religious missionary work in the Philippines under specific employment contracts with petitioners. Office of the Solicitor General Antonio P.80.42 for the period from September. 1966. 1958 to September. on the ground that in the absence of an express provision in the Social Security Act1 vesting in the Commission the power to condone penalties. 1963. 1966. the Commission gave the parties a further period of fifteen days to submit their Memorandum consolidating their arguments. In support of their request for condonation. Guerrero for respondents. praying for condonation of assessed penalties against them for delayed social security premium remittances in the aggregate amount of P69. 1966. 1966. Rosete and Solicitor Buenaventura J. to which petitioners filed their opposition of June 15. manifesting that they had adopted a policy of cooperation with the Philippine authorities in its program of social amelioration. we uphold the Commission's Order dismissing the petition before it. SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM. petitioners' counsel made no appearance but submitted their Memorandum in lieu of oral argument.: In this appeal from an order of the Social Security Commission. respondent System filed a Motion to Dismiss on the ground that "the Social Security Commission has no power or authority to condone penalties for late premium remittance. 1958 to September. Ordoñez for petitioners. petitioners commendably desisted from further contesting said coverage. COMMISSION OF ECUMENICAL MISSION ON RELATIONS OF THE UNITED PRESBYTERIAN CHURCH. however. with which they are in complete accord. BOARD OF MISSION OF THE EVANGELICAL UNITED PRESBYTERIAN CHURCH. Petitioners stood on their original memorandum. On September 22. 1964 separate petitions with respondent Commission. they paid to the System in October. waive or relinquish the penalty for late premium remittances mandatorily imposed under the Social Security Act. petitioners. and in turn. they were not subject to coverage under the Philippine Social Security System.

waive or relinquish the penalties for late premium remittances which may be imposed under the Social Security Act.as follows: Considering all of the foregoing. The policy enunciated in Commission Resolution No. series of 1964. 1. it cannot legally do so.42 Upon failure of the petitioners to comply with this Order within the period specified herein.53 Board of Mission of the Evangelical United Brothers 7. in their respective pleadings.446. 878. 536. Remittance of premiums. as herein prescribed.36 Board of Foreign Mission of the Reformed Church in 10. as against the mandatory imposition of the 3% penalty per month for late payment of premium remittances. wherein the Commission adopting the recommendation of the Committee on Legal Matters and Legislation of the Social Security Commission ruled that it "has no power to condone.928." WHEREFORE.446.891. and so holds. that in the absence of an express provision in the Social Security Act vesting in the Commission the power to condone penalties.253. 1966.42 representing the penalties payable by them. cited by the parties. broken down as follows: United Christian Missionary Society P5. The pertinent portion of Section 22 (a) of the Social Security Act peremptorily provides that: SEC 22. this Commission finds. We find no error in the Commission's action. "Every employer required to deduct and to remit such contribution shall be liable for their payment and if any contribution is not paid to the system.74 Church United Church Board for World Ministers 12.353.04 America TOTAL P 69. the amount of P69. The plain text and intent of the pertinent provisions of the Social Security Act clearly rule out petitioners' posture that the respondent Commission should assume. — (a) The contributions imposed in the preceding sections shall be remitted to the System within the first seven days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. dated August 18.019. This Court is thus confronted on appeal with this question of first impression as to whether or not respondent Commission erred in ruling that it has no authority under the Social Security Act to condone the penalty prescribed by law for late premium remittances. waiving or relinquishing such penalty. the discretionary authority of condoning. within thirty (30) days from receipt of this Order. has been reiterated in Commission Resolution No. the petition is hereby dismissed and petitioners are directed to pay the respondent System. he shall pay besides the contribution a penalty thereon of .75 Commission on Ecumenical Mission & Relations 33. a warrant shall be issued to the Sheriff of the Province of Rizal to levy and sell so much of the property of the petitioners as may be necessary to satisfy the aforestated liability of the petitioners to the System.

The Court is therefore bound to uphold respondent Commission's refusal to arrogate unto itself the authority to condone penalties for late payment of social security premiums. From the moment the remittance of premiums due is delayed. . there is no room for interpretation and construction of the statute. . provided by the legislature to assure that employers do not take lightly the State's exercise of the police power in the implementation of the Republic's declared policy "to develop.three per centum per month from the date the contribution falls due until paid . as provided in Section 3 of the Act."4 Being a mere trustee of the funds of the System which actually belong to the members. They invoke more compelling considerations of equity in their cases. 4. that would diminish the property rights of the owners and beneficiaries of such funds without an express or specific authority therefor. respondent Commission cannot legally perform any acts affecting the same. old age and death. whereby it is empowered to "perform such other acts as it may deem appropriate for the proper enforcement of this Act. Section 4 of the Social Security Act precisely enumerates the powers of the Commission. and hindering and defeating the plain purpose and intent of the legislature. Nowhere from said powers of the Commission may it be shown that the Commission is granted expressly or by implication the authority to condone penalties imposed by the Act."3 In this concept. establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines and (to) provide protection to employers against the hazards of disability. since the law makes no distinction between an employer who professes good reasons for delaying the remittance of premiums and another who deliberately disregards the legal duty imposed upon him to make such remittance.2 No discretion or alternative is granted respondent Commission in the enforcement of the law's mandate that the employer who fails to comply with his legal obligation to remit the premiums to the System within the prescribed period shall pay a penalty of three 3% per month. Petitioners contend that in the exercise of the respondent Commission's power of direction and control over the system. good faith or bad faith is rendered irrelevant. including condonation of penalties. Where the language of the law is clear and the intent of the legislature is equally plain. the penalty immediately attaches to the delayed premium payments by force of law. for otherwise we would be sanctioning the Commission's reading into the law discretionary powers that are not actually provided therein. however. in that they are non-profit religious organizations who minister to the spiritual needs of the Filipino people. They charge the Commission with grave abuse of discretion in not having uniformly applied to their cases its former policy of granting condonation of penalties. Moreover. 5. The past instances of alleged condonation granted by the Commission are not. it does have the authority to condone the penalty for late payment under Section 4 (1). Petitioners cite fourteen instances in the past wherein respondent Commission had granted condonation of penalties on delayed premium payments. 2. the funds contributed to the System by compulsion of law have already been held by us to be "funds belonging to the members which are merely held in trust by the Government. sickness." The law does not bear out this contention. The prescribed penalty is evidently of a punitive character. and that their delay in the payment of their premiums was not of a contumacious or deliberate defiance of the law but was prompted by a well-founded belief that the Social Security Act did not apply to their missionaries. . 3.

assuming such conclusion to be correct. Zaldivar Sanchez. the Court had already ruled in effect against their contest three years earlier. 1964 contesting their social security coverage. J. concur. The point. Concepcion. pursuant to the recommendation of its Committee on Legal Matters and Legislation. C. Nevertheless. the Court has held time and again that "it is a well-known rule that erroneous application and enforcement of the law by public officers do not block subsequent correct application of the statute and that the Government is never estopped by mistake or error on the part of its agents. series of 1964. Reyes. without a review of the pertinent records of said cases. 1966 of their original petitions in November. Makalintal. therefore. within the scope and coverage of the Social Security Act. and that at the time they instituted their petitions in 1964 contesting their coverage. the order appealed from is hereby affirmed. by the Commission in issuing its Order dismissing the petition for condonation of penalties for late payment of premiums. JJ. that in the absence of an express provision in the Social Security Act vesting in the Commission the power to condone penalties. when it held in Roman Catholic Archbishop vs." 6.. 1966 makes of record that since its Resolution No. considering that the Act provides in Section 22 (b) thereof that the premiums which the employer refuses or neglects to pay may be collected by the System in the same manner as taxes under the National Internal Revenue Code. 7.B. is that they followed the wrong procedure in questioning the applicability of the Social Security Act to them. it had definitely taken the legal stand. however. The proper procedure would have been to pay the premiums and then contest their liability therefor. Petitioners were duly heard by the Commission and were given due opportunity to adduce all their arguments. This would have been the prudent course. that the Commission was thereby shorn of its authority and discretion to dismiss their petition on the same legal ground. Castro and Fernando. thereby preventing the penalty from attaching."5 Petitioners' lack of intent to deliberately violate the law may be conceded.. as petitioners contend.before the Court. as in fact they filed their Memorandum in lieu of oral argument and waived the presentation of an additional memorandum. 536.. ACCORDINGLY. Granting that it had erred in the past in granting condonation of penalties without legal authority. The Commission cannot be faulted for this correct legal position. and the unilateral conclusion asserted by petitioners that the Commission had granted such condonations would be of no avail. and was borne out by their later withdrawal in May. which it reiterated in another resolution dated August 18. Social Security Commission6 that the legislature had clearly intended to include charitable and religious institutions and other non-profit institutions. The mere fact that there was a pending appeal in the Court of Appeals from an identical ruling of the Commission in an earlier case as to its lack of authority to condone penalties does not mean. No grave abuse of discretion was committed.7 The Commission's action has thus paved the way for a final ruling of the Court on the matter. such as petitioners. it "has no power to condone. waive or relinquish the penalties for late premium remittances which may be imposed under the Social Security Act. in its appealed Order of September 22. 1966. the Commission.J.L. as claimed by petitioners in their second and last error assigned. in that they failed for five years to pay the premiums prescribed by law and thus incurred the 3% penalty thereon per month mandatorily imposed by law for late payment. without pronouncement as to costs. .

and (2) slight kyphosis at the level of L1 vertebrae.J.. pursuant to its decisions in two other appealed cases. 1961). Inc.m. 1130 and cases cited (July 31.. August 14. SSS.3 and. 1161. he was confined in his home from 25 December 1993 to 25 . The structure gave way and he crashed into the corridor twelve feet below. 28 SCRA 1119. CA-GR No. The x-rays taken that day revealed that he had a (1) marked compression fracture of L1 vertebra without signs of dislocation and bone destruction. at about 6:15 p. CA-G. Roman Catholic Archbishop vs. No. 2004 SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM. Private respondent Jose Rago (hereafter Rago) worked as an electrician for Legend Engineering in Basak. DECISION DAVIDE. Social Security Commission. 39250-R. Pardo. 3 Section 2. 4 Roman Catholic Archbishop vs. COURT OF APPEALS and JOSE RAGO. 1969. Rodriguez. JR. Social Security Commission and Social Security System.. June 30. appellant. 5 E. petitioners. 63389 entitled Jose Rago vs.2He was confined at the Perpetual Succour Hospital in Cebu City for twenty-four (24) days from 1 December 1993 to 24 December 1993. while working on the ceiling of a building. thereafter. fn 3. Social Security Act. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION 3G. 38425-R. Woodwork Inc. Cebu City.Dizon and Barredo. vs. as amended. 1969 and Carmelo & Bauermann. JJ. SSC. 36668-R. On 1 December 1993.. respondents. he stepped on a weak ceiling joist. 6 Fn 3. Footnotes 1 Republic Act No.R. 2 Emphasis supplied.R. 7 The case referred to is Social Security System. 152058 September 27. took no part. vs. vs. Social Security Commission. Collector of Internal Revenue. The resolution denied the motion to reconsider the decision. No.: This is a petition for the review of the decision1 of 18 October 2001 and the resolution of 30 January 2002 of the Court of Appeals in CA-G. 1969). C. Inc. 4- 15009-2000 denying respondent Jose Rago’s request to convert his monthly pension from permanent partial disability to permanent total disability. although it remanded the records of the case to the SSS to give the appellant an opportunity to go over the assessment schedules for the purpose only of determining the exact amount of penalties due. The Court of Appeals therein upheld the Commission's ruling in its decision of October 20.R. appellee vs. CA-G. 1969. No. SP No. with the alignment of the spine still normal.R. 1 SCRA 10 (January 20. Luzsteveco vs. The decision reversed the 20 December 2000 Resolution of the Social Security Commission (SSC) in SSC Case No.

more so to permanent total disability benefits since he was already granted the maximum allowable benefit for his injury. and 3. 63389. as amended by R. the SSS argued that Rago had already been granted the maximum partial disability benefits. it was resolved in his favor on 14 June 1996. The petition was docketed as SSC Case No. Rago appealed to the Court of Appeals by filing a petition for review and reiterating his claim for permanent disability benefits under Section 13-A (g) of R. 4 April 2000. on 16 June 1998. Since he had only 35 monthly contributions. The SSC ruled that he was not entitled to permanent partial disability more than what was already granted.R. This was approved for a maximum of 120 days to cover the period of illness from 1 December 1993 to 30 March 1994.6 On 9 November 1995. The denial was based on the medical findings of the Cebu City office that he was not totally prevented from engaging in any gainful occupation. 28 September 1999.4 On 20 May 1994. and sought the adjustment of his approved partial disability benefits from lump sum to monthly payments. 1161. Thus. 8282. and decreed as follows: .13 The petition was docketed as CA-G. Rago claimed for the extension of his EC partial disability. On 7 June 1996. the Court of Appeals reversed the SSC’s resolution. his convalescence period from the time of his hospital confinement to home confinement totaled 268 days and under SSS guidelines.8 Thereafter. his x-ray results showed a deterioration of his condition without any visible improvement on the disabilities resulting from the accident.A. A rating of 50% OB (of the body) was granted corresponding to the maximum benefit allowed under the Manual on Ratings of Physical Impairment.A.11 In a resolution dated 20 December 2000. No. the SSC denied Rago’s petition for lack of merit. Rago filed with the petitioner Social Security Commission (SSC) a petition for total permanent disability benefits based on the following grounds: 1. 2. the injury would be considered as a permanent total disability. and 17 April 2000. if the injury persisted for more than 240 days. he was granted only a lump sum benefit. This time. Rago filed another claim to convert his SSS disability to EC disability. In its decision of 18 October 2001. Rago filed a claim for permanent partial disability with the Cebu City office of the Social Security System (SSS).August 1994. Again.10 In its position paper dated 24 August 2000. he had lost his original capacity to work as an electrician and has been unemployed since the accident. his requests were denied by the Cebu City office of the SSS in its letters of 11 April 1999. 4-15009-2000. the SSS recommended the denial of Rago’s petition. The adjustment was resolved in his favor on 18 October 1995.7 Two years later.12 Without filing a motion for reconsideration. which was supported by an x-ray report dated 1 December 1993.5 He made additional premium contributions on 6 November 1995. 10 September 1999. The physical examination conducted by the Cebu City office of the SSS showed that he was more than capable of physically engaging in any gainful occupation and that there was no manifestation of progression of illness. Rago filed a claim for Employee’s Compensation (EC) sickness benefit.9 Undaunted. SP No. Rago filed several requests for the adjustment of his partial disability to total disability. on 3 April 2000. No.

which reads: SEC. before filing a petition for review with the Court of Appeals. which emphasized that: (1) Rago failed to file a motion for reconsideration with the SSC. – (a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability. and sole authority to make any affirmation or modification of the assailed resolution. he shall be entitled to the monthly pension: Provided. the assailed decision of the Social Security Commission is hereby reversed and set aside. in favor of the appellate tribunal.WHEREFORE.14 In its resolution of 30 January 2002. 1161. and it is this Court which therefore had jurisdiction over the matter. That if he has not paid the required thirty-six (36) monthly contributions. such authority in law. It behooves upon the Commission. (2) the manual verification of the monthly contributions of Rago revealed that he had only 35 contributions and not 59. [the] appeal from the Commission’s resolution had thus become perfected. With that. not otherwise embodied in the original ruling. The Court deems it the height of injustice for the Commission to add to and bolster its final ruling with additional observations and justifications. the lower tribunal loses its jurisdiction over the case. now having been transferred to this Court. …It must be pointed out that when petitioner timely filed his petition for review. and (3) thus. after the losing claimant had already perfected and was actively pursuing his appeal.A. The SSS then referred to the findings and conclusions of the SSC in said 11 July 2001 order. Petitioner’s plea for conversion of his disability status from permanent partial to permanent total is granted. therefore. or modification of its assailed ruling. 2001 clarificatory order as an exercise of grave abuse of authority amounting to lack and/or excess of jurisdiction. he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension. its 20 December 2000 Resolution under appeal. but clarified. 13-A. It explained the denial in this wise: At the outset. This is because Rago lacked the required number of contributions mentioned in Section 13-A (a) of R. a conversion of the same from permanent partial disability to permanent total disability could not be granted. whichever is higher. Permanent disability benefits. the SSC ordered the SSS to re-compute the lump sum benefit due Rago and his EC benefit on the basis of the actual monthly contributions remitted in his behalf and to collect all excess payments made to him. the Court of Appeals denied the motion for reconsideration. whether or not the sickness or disability of Rago had showed signs of progression. The said Order was issued at a time when the Commission itself was knowledgeable of the petition for review pending before this Court. to refrain from making any substantial addition. the Court strikes down the Commission’s July 11. What prompted the Social Security Commission to issue its clarificatory order is not . Once appeal is perfected. as amended. The SSS is hereby directed to pay him the necessary compensation benefits in accordance with the proper computation. which is mandatory. A member who (1) has received a lump sum benefit and (2) is re-employed or has resumed self- employment or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. The SSS seasonably filed a motion for reconsideration on the ground that the Court of Appeals should have considered an order issued by the SSC dated 11 July 2001 which affirmed.

Cabreros attested in an affidavit that Rago went out "disco[e]ing" after the accident. we received a handwritten letter from Rago informing us that his lawyer had withdrawn from the case and of his difficulty in securing a new counsel. Arturo Fernan or Fritz Quiñanola of the IBP Cebu City at Capitol Compound as his "informal lawyers. any modification of the tenor and justification of the assailed resolution of the Commission by the same body effectively altered the tenor of the earlier ruling. In said pleading.15 Thus. The same July 11. the petitioners assert that the Court of Appeals erred in disregarding the established jurisprudence that the filing of a motion for reconsideration is a prerequisite to the filing of a petition for review to enable the tribunal. his case does not fall within the purview of Arroyo v. Petitioners further maintain that the Court of Appeals relied heavily on the x-ray reports which contained no statement that Rago could no longer work. To be sure. the petitioners contend that the SSC’s 11 July 2001 clarificatory order was issued to rectify its perceived error in the 20 January 2000 resolution relative to the number of Rago’s contributions which directly affected the computation of his disability benefits. an attached copy of the opposition to the motion for reconsideration he filed with the Court of Appeals. After naming Attys. Failure to do so is a fatal procedural defect. null and void.16 In support of their prayer. the SSS and the SSC pray to set aside the Court of Appeals’ decision of 18 October 2001 and resolution of 30 January 2002 and to remand the case to the SSC for further proceedings. In any case. 2001 Order shows that the SSS Cotabato City Branch and the SSS Davao Hub Branch Office were unable to account for the complete contributions of the petitioner while he was employed by the San Miguel Corporation. for which reason. and not on the petitioner’s or his employers’ failure to do so. Moreover. Furthermore. the fact that the petitioner as credited by SSS monthly contributions short to entitle him to be qualified for permanent total disability benefits appear to be largely due to the SSS’ and its branches’ failure to accurately account the petitioner’s total payments. as a member of the Social Security System. On 20 March 2003. a certain Alvin C. Pedro Rosito. 2000 resolution is not a fatal mistake. board or office concerned to pass upon and correct its mistakes without the intervention of the higher court. Additionally. in their petition in the case at bar. hence. It is the established rule that the filing of a motion for reconsideration may be dispensed with when the assailed ruling is a patent nullity. in lieu of his Comment. Rago argued that the word "may" as used in the provision concerning the filing of a motion for reconsideration in the SSC’s 1997 Revised Rules of Procedure is not mandatory but merely permissive. Rago is not totally helpless as he portrayed himself to be. However. amounting to a violation of the petitioner’s right to due process and fair play. He also agreed with .17 The petitioners likewise argue that they had not violated Rago’s rights. the specific arguments raised by the Commission are not convincing to encourage a reversal of our earlier decision.made clear in its motion for reconsideration. therefore. the alleged failure to file a motion for reconsideration of the Commission’s December 20. and." he asked us to consider. nor in the clarificatory order itself. House of Representatives Electoral Tribunal18 where we held that a prior motion for reconsideration could be dispensed with if fundamental rights to due process were violated. it appearing that the same was in clear violation of the petitioner’s rights and claims.

we have consistently held that the term "may" is indicative of a mere possibility. Depending upon a consideration of the entire provision. we can construe Section 5. resolution. he is allowed to file only one motion for reconsideration within fifteen days from the promulgation of the questioned resolution. the option of filing a motion for reconsideration which he may or may not exercise. he must comply with the conditions attached thereto.20 Conformably therewith. The filing of the motion for reconsideration shall interrupt the running of the period to appeal. award or decision of the Commission may file a motion for reconsideration thereof within fifteen (15) days from receipt of the same. or any member of the System aggrieved by the SSC’s resolution. Rule VI of the SSC’s 1997 Revised Rules of Procedure provides: The party aggrieved by the order. Only one motion for reconsideration shall be allowed any party.21 If he chooses to exercise the right. the convertibility of said terms either as mandatory or permissive is a standard recourse in statutory construction. its nature. while the word "shall" is imperative and operating to impose a duty which may be enforced. The ordinary acceptations of the terms "may" and "shall" may be resorted to as guides in ascertaining the mandatory or directory character of statutory provisions. or the conditions sine qua non before a party can institute certain civil actions. It now becomes apparent that the permissive nature of a motion for reconsideration with the SSC must be read in conjunction with the requirements for judicial review.the conclusion of the Court of Appeals that a very strict interpretation of procedural rules would defeat the constitutional mandate on social justice. A combined reading of Section 5 of Rule VI.19 However. in the absence of an appeal therefrom as herein provides. Rule VI as granting Rago. As regards adjective rules in general. these are not absolute and inflexible criteria in the vast areas of law and equity. shall become final and executory fifteen (15) days after the date of notification to the parties. and Section 1 of Rule VII of the SSC’s 1997 Revised Rules of Procedure reveals that the petitioners are correct in asserting that a motion for reconsideration is mandatory in the sense that it is a precondition to the institution of an appeal or a petition for review before the Court of Appeals.22 Applying these guidelines. Should he choose to do so. the term "may" is construed as permissive and operating to confer discretion. Section 1 of Rule VII of the SSC rules provides: [A]ny order. resolution. an opportunity or an option. This is as far as we go in construing the provision in isolation because a second procedural rule now comes into play: the requirements for appeals filed against the rulings of quasi-judicial agencies in the exercise of its quasi-judicial functions. unless said motion is pro forma. and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission…. award or decision of the Commission. We gave due course to the petition and required the parties to submit their Memoranda. Section 5. We shall first dispose of the procedural issue of prematurity raised by petitioners which is Rago’s failure to file a motion for reconsideration. The grantee of that opportunity is vested with a right or faculty which he has the option to exercise. which they did. its object and the consequences that would follow from construing it one way or the other. quoted earlier. Stated .

such as the SSC. we are not unmindful of the doctrine that the principle of exhaustion of administrative remedies is not an ironclad rule. or from the date of its last publication.27 (12) when no administrative review is provided by law. final order or resolution. – The appeal shall be taken within fifteen (15) days from notice of the award. Only one (1) motion for reconsideration shall be allowed. judgments.24 Even comity dictates that unless the available administrative remedies have been resorted to and appropriate authorities given an opportunity to act and correct the errors committed in the administrative forum. (7) when to require exhaustion of administrative remedies would be unreasonable. his case falls within some of these exceptions as discussed below. which states: Sec. The reason for the principle rests upon the presumption that the administrative body. The policy of judicial bodies to give quasi-judicial agencies. Scope – This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards. (9) when the subject matter is a private land in land case proceedings. (11) when there are circumstances indicating the urgency of judicial intervention. may amend its decision on a given matter and decide it properly. It may be disregarded (1) when there is a violation of due process. Among these agencies are the…Social Security Commission…. (2) when the issue involved is purely a legal question. (4) when there is estoppel on the part of the administrative agency concerned.25 premature. The ground relied upon by the Court of Appeals for exempting this case from exhaustion of administrative remedies was not the denial of due process but of the patent nullity of the SSC decision in question. Petitioners’ attempts to distinguish Arroyo v. .28 Fortunately for Rago. Period of appeal. (10) when the rule does not provide a plain. judicial recourse must be held to be inappropriate. Sec. or of the denial of petitioner’s motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. House of Representatives Electoral Tribunal29 from this case is misplaced.differently.23 The principle insures orderly procedure and withholds judicial interference until the administrative process would have been allowed to duly run its course. and even unnecessary. and (14) when the issue of non-exhaustion of administrative remedies has been rendered moot. final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. (5) when there is irreparable injury. impermissible. it was nevertheless mandatory that he do so if he wanted to subsequently avail of judicial remedies. judgment. (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction. speedy and adequate remedy. while Rago certainly had the option to file a motion for reconsideration before the SSC. This rule is explicit in Rule 43 of the Rules of Court. 4. if given the chance to correct its mistake or error. This is but practical since availing of administrative remedies entails lesser expenses and provides for a speedier disposition of controversies. an opportunity to correct its mistakes by way of motions for reconsideration or other statutory remedies before accepting appeals therefrom finds extensive doctrinal support in the well-entrenched principle of exhaustion of administrative remedies. if publication is required by law for its effectivity. (13) where the rule of qualified political agency applies. (8) when it would amount to a nullification of a claim.26 However. (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter. 1.

made for the patent nullity of the SSC decision. Otherwise. The Court of Appeals similarly erred in taking cognizance of Rago’s appeal. 1999 is demonstrative of the fact that petitioner is still in a state which at the time of the taking deters him from performing his job or any such related function. unjust and inequitable. We likewise do not subscribe to issuing rulings or decisions that do not acknowledge or give reason for the disregard of the procedural defect of the petition. and which modified and altered the contents and tenor of its original resolution. The error was made more blatant when. It would prolong needlessly and uselessly the resolution of his claim. Award of permanent partial disability benefits for 19 months was considered by the Supreme Court as an acknowledgment that the awardee was suffering from permanent total disability. 1993 to March 30. he was granted sickness benefit for a maximum period of 120 days from December 1. which did not consider other evidence of the illness’ progression and its disregard of long-standing jurisprudence. More. (Diopenes vs. GSIS (205 SCRA 331[1992]). It is evident that the pain caused to . We say another chance because we can consider the SSC’s clarificatory order as in the nature of a judgment on Rago’s motion for reconsideration as if he had filed one. all in all covering a period of 38 months. Thus: There is merit in the petition. xxx The test of whether or not an employee suffers from permanent total disability is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. 313 SCRA 141 [1999]). it classified the disability based on the amount of contributions Rago had paid. 1994. (IJARES v. 1994 to October 1996. 1994. 1998 to February 1999. to require Rago to comply with the principle of exhaustion of administrative remedies at this stage of the proceedings would be unreasonable. 1995 to monthly pension benefit covering the period of 30 months from May 20. If temporary total disability lasting continuously for more than 120 days is deemed total and permanent. and uphold its factual determination that Rago is entitled to the conversion of his permanent partial disability to permanent total disability. The SSC’s reliance on the SSS recommendations. The cited radiologic report under date of February 26. To emphasize. To this extent we give imprimatur to the assailed decision and resolution of the Court of Appeals. in the SSC’s clarificatory order. Then he was awarded lump sum permanent partial disability benefits paid on June 15. would have amounted to a violation of Rago’s right to due process. which was then adjusted on October 18. it is not therefore amiss to consider the payment of permanent partial disability benefits for 38 months as recognition of permanent total disability. Court of Appeals.30 Nevertheless. Petitioners SSS and SSC have consistently shown their obstinacy in their stand to deny Rago’s request to convert his permanent partial disability to permanent total disability. especially when it was specifically raised as an issue in respondent’s answer.It is true that Rago disregarded procedural and curative rules in taking immediate recourse to the appellate court. the permanent partial disability benefit was extended for another eight (8) months from July 3. to admit the misnamed order which was issued when the SSC no longer had jurisdiction over the case.31 To give the SSC another chance to rectify its error in accordance with the principle of exhaustion of administrative remedies would inevitably result in the same inflexible stance in defense of its error. Evidently clear from the recitals of the assailed decision some indicia of petitioner’s state of permanent total disability.

32 The Court of Appeals correctly observed that Rago’s injury made him unable to perform any gainful occupation for a continuous period exceeding 120 days. Moreover. the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which. Thus. It does not mean absolute helplessness.’ on the other hand. occurs when an employee loses the use of any particular anatomical part of his body which disables him to continue with his former work. It is possible that an injury which at first was considered to be temporary may later on become permanent or one who suffers a partial disability becomes totally and . b (1) of Rule XI of the same Amended Rules which provides that a temporary total disability lasting continuously for more than 120 days. It is a right. shall be considered permanent. as a result of the injury or sickness. (GSIS vs. Otherwise.33 This is in conformity with Section 2 (b). Court of Appeals. then the said employee undoubtedly suffers from ‘permanent total disability’ regardless of whether or not he loses the use of any part of his body. 1993. permanent partial disability for 38 months.34 we laid down the litmus test and distinction between Permanent Total Disability and Permanent Partial Disability. We further reiterate that disability should be understood less on its medical significance than on the loss of earning capacity. Caution should be taken against a too strict interpretation of the rules lest the constitutional mandate of social justice policy calls for a liberal and sympathetic approval of the pleas of disabled employees like herein petitioner. thereafter. Stated otherwise. or work of similar nature that he was trained for or accustomed to perform. a person’s disability may not manifest fully at one precise moment in time but rather over a period of time. the employee is not able to perform any gainful occupation for a period exceeding 120 days. [1996]). describes what constitutes temporary total disability).petitioner by his injuries still persists even after more than 5 years when the accident occurred on December 1. the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days. 285 SCRA 430 [1998]). if by reason of the injury or sickness he sustained. The disability caused thereby which had earlier been diagnosed as permanent partial had possibly became permanent total. Rule VII of the Amended Rules on Employees Compensation which defines a disability to be total and permanent if. in a more detailed manner. ‘permanent partial disability. the test of whether or not an employee suffers from ‘permanent total disability’ is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. and Section 1.35 Moreover. or any kind of work which a person of his mentality and attainment could do. (supra) – a disability is total and permanent if as a result of the injury. CA 260 SCRA 133. Compassion for him is not a dole out. (GSIS vs. Such grant is an apparent recognition by the SSS that his injury is permanent and total as we have pronounced in several cases. ECC. The SSS had granted Rago sickness benefit for 120 days and. In Vicente vs. to wit: [W]hile ‘permanent total disability’ invariably results in an employee’s loss of work or inability to perform his usual work. the social justice policy underlying the enactment of labor laws would lose its meaning. Employees Compensation Commission. prior payment of compensation benefits for permanent partial disability may not foreclose his right to compensation benefits for permanent total disability. Also in the case of Tria vs. Permanent total disability means disablement of an employee to earn wages in the same kind of work.

. JESUS F.38 WHEREFORE. Quisumbing.. ____ Agenda for 22 September 2004 FIRST DIVISION FORCONCURRENCE 4G. SP No. X. VALDEZ ATTY. calls for a liberal and sympathetic approach to the legitimate appeals of disabled workers like Rago... Cabrero’s affidavit attested to the contrary lose persuasive worth.. AMADO D.. respondents. (a) Radiology report stated 1 December 1993 revealed "Mark compression fracture o L1 vertebra without signs of dislocation and bone destruction and slight kyphosis at the level of L1 vertebra but the alignment of the spine is normal". CLARIZA ATTY.. concur.permanently disabled from the same cause. Although the SSS and the SSC should be commended for their vigilance against unjustified claims that will deplete the funds intended to be disbursed for the benefit only of deserving disabled employees.-X COUNSEL FOR THE PETITIONERS: ATTY. 63389 reversing the Social Security Commission’s Resolution of 20 December 2000 in SSC Case No... Carpio.... dictated by no less than the Constitution under its social justice policy... they should be cautioned against a very strict interpretation of the rules lest it results in the withholding of full assistance from those whose capabilities have been diminished. and (c) Radiology report dated 26 February 1999 showed anterior wedging or compression fracture of L1 with gibbus deformity and thoraco-lumber junction and suggested lumbo- sacral AP for further study... No pronouncement as to costs... petitioners’ additional arguments that the x-ray reports lacked a physician’s finding that Rago could no longer work and that Mr.. vs. JJ. petitioners. (b) Radiology report dated 4 may 1994 showed that "consistent with compression fracture with mild posterior dislocation of the L1".. ALOJADO OFFICE OF THE GOVERNMENT CORPORATE COUNSEL ... Ynares-Santiago... 4-15009-2000 are hereby AFFIRMED.... if not completely impaired.. [emphasis supplied] Clearly.... One final note..........D. MARIANO C. viz.R..R... No.. 152058 SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM. as a consequence of their dedicated service... the three x-ray reports submitted by Rago clearly show the degenerative condition of his injury. Compassion for them is not a dole out but a right. X-ray reports and its confirmation by a physician are simply appraised for their evidentiary value and are not considered as indispensable prerequisites to compensation. COURT OF APPEALS and JOSE RAGO. Rago is entitled to permanent total disability benefits...37 Even then...... SO ORDERED.36 With this. A humanitarian impulse.. the decision of the Court of Appeals dated 18 October 2001 and its resolution of 30 January 2002 in CA-G.. and Azcuna.. Item No.

. R.... See also Federation of Free Workers and Allied Sugar Centrals Employees and Workers Union – FFW v.. Rollo. R... but shall be additive for deteriorating and related permanent partial disabilities.. 9 Id.. Bersabal v...R. No. No.X Court of Appeals . 2 Rollo...... 7 July 1995......... JJ.X (Please return to the Office of Chief Justice HILARIO G.... 57. Inciong. No. JJ.. 136-137... 84 SCRA 176... 56. 124 Phil 1187 (1966).... R.. 136804.... which is equivalent to the ratio` that the designated number of months of compensability bears to seventy-five (75).... Section 13-A (g) provides the percentage degree of disability....... 21 July 1978.. 330-336. 206 SCRA 740. 246 SCRA 384... Judge Salvador G. 3 March 1992. Securities and Exchange Commission.. 1544 San Marcelino Street Ermita. JR. 16 Rollo. Court of Appeals.. MWSS Bldg. 245 SCRA 668. 112629. 8 Id. 3 Id. 5 Id.. et al... No. rounded to the next higher integer. No.. G. 120- 126........ 110-119... 95696. 312-320. & Chemical Bank v. 44.. with the concurrence of Barcelona.. J.... 18 G... 19 Manufacturers Hanover Trust Co.. X.R. DAVIDE. NLRC... 57. 39 4 Id... 13 Otherwise known as the Social Security Law of 1997. shall not be additive for distinct.. 90314.. R.R. Guerrero.. 27 November 1990.. Mencias..) Footnotes 1 Per Cosico. 15 Rollo. 14 July 1995... v.. and Santos. L- .. citing Shauf v. separate and unrelated permanent partial disabilities... 118597. in which case the employee shall be deemed as permanently totally disabled...Decision of 18 October 2001 and the Sixth Division Resolution of 30 January 2002: Per Cosico.... 11 Id.. 191 SCRA 713.... 6 Id.. G.. G... with the concurrence of Barcelona. 14 Rollo. 31-35. G. L-35910.R. 20 De Mesa.. Manila X. 62-64.. 17 PNCC v. A... No.... No. and Santos.. G. Quezon City COUNSEL FOR THE PRIVATE RESPONDENT: MERCADO LIM AND ASSOCIATES LAW OFFICES Unit B.. Katipunan Avenue Balara. 7 Rollo. Tan v... to a maximum of one hundred percent (100%)...R. A. 19 February 2003.R. J. 10 Rollo.... 12 Id.3rd Floor... No..R..

Paat v. 84846.citing In Re Guarina. 22 Id. permanent partial disability benefits was granted for 25 months. GSIS G. 90205. "may" as used in section 7 of Rule 112 presented an "opportunity. v. GSIS. In Aguja v. Court of Appeals. see also Union Bank of the Philippines v. Jr.. 334 Phil 146 (1997). federal statute (about equal opportunity for civilian employment in U. 131729. 26 Lopez v. G. 201 SCRA 84. No. Catungal. 176 SCRA 507. 24 October 2000. Associated Communications and Wireless Services.R. 23 November 1993. People v. Court of Appeals. G. 132428.R. No. 344 SCRA 202. 312 Phil 739 (1995). Santos.R. 103379. 27 November 1990.R. 19 May 1998citing University of the Philippines v. In Diopenes v. Commissioner of Internal Revenue. Court of Appeals. 21 November 2002. a consolidation of cases). COMELEC. v. No. temporary total disability benefits was granted for 240 days and permanent partial disability for 19 months.R. No. Court of Appeals. 24 See Carale v. No. 31 This tenuous basis was again put to question when it was later brought to our attention that the manual verification of Mr. 378 Phil 727 (1999). "may" was used in a U.R. G. G. ECC. G.R. Dumlao. 136762. 5 August 1991. G. 200 SCRA 187. 269 SCRA 132. 228 SCRA 135.. Court of Appeals. No. 120704. 118597.. 11 October 2000. 344 SCRA 358. 25 October 2000. Jr. 21 In Shauf v. Jr.48848. 24 Phil 37 (1913) and San Carlos Milling Co. Court of Appeals. as an opportunity or option to file a petition for review. 363 Phil 68 (1999). Roxas & Co. Court of Appeals. 32 Rollo. 3 March 1997. Abarintos. G.being indicative of a "possibility" or an "opportunity." to avoid defeating the purpose of the law to immediately include sectoral representatives in the legislative councils of local government units. Estrella. No. No. 23 Lopez v. 16 August 1989. 338 Phil 728 (1997). 334 Phil 146 (1997). 124-126. 96844. In Legaspi v.R. In Aquino v. G. v. No. 14 July 1995. 28 Province of Zamboanga del Norte v. G. 27 Paat v.R. Ambil v. 312 Phil 739 (1995). 64255. No. G. 22 August 1991. 246 SCRA 384. No. permanent partial disability was granted for 19 months. Court of Appeals.R. ECC. Ltd. partial permanent benefits was granted for more than 150 days. 25 Garcia v.R. 29 G.R. 11 May 1998. City of Manila. G. Court of Appeals. 109853. military installations) to give an aggrieved party a number of remedies which are not exclusive. The Court held that such grants indicated a recognition on the part of the System of the members’ permanent total disability. G. 161 SCRA 295. supra note 23.R. 89558. Court of Appeals. In People v. 24 August 1990 (Cited in the SCRA as Supangan.S. Rago’s contributions revealed that he had 57 total contributions and not 35. et al. v. . 411 Phil 25 (2001). 189 SCRA 56 (1990) we interpreted "may" as used in Section 146 of Batas Pambansa Blg. No. v." a "possibility" or an option of filing a motion for preliminary investigation and in Section 1 of Rule 45.R. 30 See generally Yao v. It was claimed that the additional 29 contributions were not made available to the SSC at the time of the promulgation of the clarificatory judgment. City of Manila. 23 January 1992. Inc. 90314.S. No. 143398. 337 or the old Local Government Code as. 191 SCRA 713. 33 In Abaya. 205 SCRA 331. No.

35 Marcelino v. G. L-43066. 77 SCRA 482. 1959 and. Romeo Davac. Alafriz. CANDELARIA D. DAVAC.: This is an appeal from the resolution of the Social Security Commission declaring respondent Candelaria Davac as the person entitled to receive the death benefits payable for the death of Petronilo Davac.ñët On February 25.R. who bore him a child. 285 SCRA 430 citing GSIS v. 30 June 1997. 36 GSIS v. Ma. with Candelaria Davac on January 18. 1949. Court of Appeals. No.34 G. 117572. see also Ijares v. 260 SCRA 133. No. No. G. that the deceased contracted two marriages. Romero v. WCC. 150-C Phil 133 (1972). GSIS v. the processing thereof was held in abeyance. 83 SCRA 721. 1963. 31 July 1996.D.R. became a member of the Social Security System (SSS for short) on September 1.R. with claimant Lourdes Tuplano on August 29. J. 1946. 89 SCRA 147. G. 313 SCRA 141. 23 January 1991. Office of the Solicitor General Arturo A.R.1äwphï1. No. he designated respondent Candelaria Davac as his beneficiary and indicated his relationship to her as that of "wife". 38 See GSIS v. Due to their conflicting claims. 117572. G. each of the respondents (Candelaria Davac and Lourdes Tuplano) filed their claims for death benefit with the SSS. 285 SCRA 430. 116015. Court of Appeals.. Seven-Up Bottling Co. No. Landicho v. Francisco and N. respondent-appellant. Court of Appeals. L-45996. WCC. G. In SSS form E-1 (Member's Record) which he accomplished and filed with the SSS on November 21. thereupon. L-43339. 105854. No. a former employee of Lianga Bay Logging Co. The facts of the case as found by the Social Security Commission. G. BARRERA. T.. As such member.R. Workmen’s Compensation Commission. respondent Lourdes Tuplano brought to us . 193 SCRA 190. the first. whereupon the SSS filed this petition praying that respondents be required to interpose and litigate between themselves their conflicting claims over the death benefits in question. with whom he had a minor daughter Elizabeth Davac. L-42617. 30 June 1997. No.R. 1957. No. No. Not satisfied with the said resolution. Inc. LOURDES Tuplano. 29 January 1998.. Quiason and E. 08-007137. petitioner-appellee. Duran for petitioner-appellee. respondents. briefly are: The late Petronilo Davac. G. It appears from their respective claims and the documents submitted in support thereof. L-21642 July 30. Legaspi v. 77 SCRA 501. Court of Appeals. G. J. No. No. G. 29 January 1998. the Social Security Commission issued the resolution referred to above. 37 Balanga v. ET AL.R. L-44123. and Ybañez v. vs.R.R. Solicitor Camilo D. WCC. 26 March 1979. 1966 SOCIAL SECURITY SYSTEM. 363 Phil 1999. No. Court of Appeals. 87 SCRA 418. he was assigned SS I. 26 August 1999. He died on April 5. 1957. 85024. Republic of the Philippines SUPREME COURT Manila EN BANC G. Province of Negros Oriental.R. 29 December 1978. 22 June 1978. Bravo for respondent-appellant. and the second.

1959. as amended by Republic Act No. 470. 61 L. Article 2012 of the New Civil Code provides: ART. (L-15798. he or. the same qualifications and disqualifications should be applied. it is enough. And Article 739 of the same Code prescribes: ART. the courts can do nothing but apply its clear and explicit provisions (Velasco vs. provides: 1. xxx xxx xxx Without deciding whether the naming of a beneficiary of the benefits accruing from membership in the Social Security System is a donation. in case of his death.1 Regarding the second point raised by appellant. for the purpose of the instant case. therefore. thereof.) Under this provision. When the provision of a law are clear and explicit. 270. Caminetti vs. 739.. 1792. Lopez.the present appeal. In the case of Tecson vs. bigamous wife is null and void. 442). But appellant contends that the designation herein made in the person of the second and.S. . They are disbursed from a public special fund created by . . 242 U. or that it creates a situation analogous to the relation of an insured and the beneficiary under a life insurance policy. Social Security System. 1161. the benefits accruing from membership in the Social Security System do not form part of the properties of the conjugal partnership of the covered member. The following donations shall be void: (1) Those made between persons who were guilty of adultery or concubinage at the time of the donation. therefore. As to the first point. the beneficiary "as recorded" by the employee's employer is the one entitled to the death benefits. said: It may be true that the purpose of the coverage under the Social Security System is protection of the employee as well as of his family. The only question to be determined herein is whether or not the Social Security Commission acted correctly in declaring respondent Candelaria Davac as the person entitled to receive the death benefits in question. appellant argues that a beneficiary under the Social Security System partakes of the nature of a beneficiary in life insurance policy and. ed. 1961). SEC. there being no proof that she had knowledge of the previous marriage of her husband Petronilo. in force at the time Petronilo Davac's death on April 5. construing said Section 13. 2012. and (2) it deprives the lawful wife of her share in the conjugal property as well as of her own and her child's legitime in the inheritance. this Court. to state that the disqualification mentioned in Article 739 is not applicable to herein appellee Candelaria Davac because she was not guilty of concubinage.S. Section 13. 1 Phil. but this purpose or intention of the law cannot be enforced to the extent of contradicting the very provisions of said law as contained in Section 13. (emphasis supplied.. December 28. his beneficiaries. because (1) it contravenes the provisions of the Civil Code. 13. Republic Act No. .. Upon the covered employee's death or total and permanent disability under such conditions as the Commission may define. as recorded by his employer shall be entitled to the following benefit: . before becoming eligible for retirement and if either such death or disability is not compensable under the Workmen's Compensation Act.. U. Any person who is forbidden from receiving any donation under Article 739 cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him according to said article..

Bengzon. So ordered. it is the Commission. Then. the resolution of the Social Security Commission appealed from is hereby affirmed. attorney. — The system shall pay the benefits provided for in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act. if the money is payable to the estate of a deceased member. constitutes only an insignificant portion thereof. — The benefits prescribed in this Act shall not be diminished and to guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the System. amending Rep. Reyes. shall provide protection against the hazards of disability. the benefits are specifically declared not transferable. or any other individual for the collection thereof in their behalf shall be recognized except when they are physically and legally unable to collect personally such benefits: Provided. Concepcion. said benefits shall be paid to the legal heirs in accordance with the laws of succession. Such benefits are not transferable. From the foregoing provisions.3 the employer's contribution (equivalent to 3-½ per cent of the monthly compensation of the covered employee).7Furthermore. it appears that the benefit receivable under the Act is in the nature of a special privilege or an arrangement secured by the law. provides: SEC. Government Guarantee. Act 1161. J. (Rep.."2 The sources of this special fund are the covered employee's contribution (equal to 2-½ per cent of the employee's monthly compensation).6 and exempted from tax legal processes. It is only when there is no designated beneficiaries or when the designation is void.Congress in pursuance to the declared policy of the Republic "to develop. in view of the foregoing considerations. 15. The amounts that may thus be received cannot be considered as property earned by the member during his lifetime. that the laws of succession are applicable. if no beneficiary has been designated or the designation there of is void. as amended by Republic Act 1792.J. Act 2658. C. His contribution to the fund. in the settlement of claims thereunder the procedure to be observed is governed not by the general provisions of law.P. sickness. Non-transferability of benefit.8 that the benefits under the Social Security Act are not intended by the lawmaking body to form part of the estate of the covered members may be gathered from the subsequent amendment made to Section 15 thereof. with costs against the appellant. J. old age and death. pursuant to the policy of the State to provide social security to the workingmen. And we have already held that the Social Security Act is not a law of succession.. it may be noted. and no power of attorney or other document executed by those entitled thereto in favor of any agent. establish gradually and perfect a social security system which .B.. That in the case of death benefits. if there is a named beneficiary and the designation is not invalid (as it is not so in this case).4 and the Government contribution which consists in yearly appropriation of public funds to assure the maintenance of an adequate working balance of the funds of the System.) In short. Makalintal.L. Section 21 of the Social Security Act. however. . not the probate or regular court that determines the person or persons to whom it is payable. Dizon..5 Additionally. Thus.9 Wherefore. 21. and lien.. it is not the heirs of the employee who are entitled to receive the benefits (unless they are the designated beneficiaries themselves). as follows: SEC. but by rules and regulations promulgated by the Commission. Zaldivar and Sanchez.

5. id. 15. 2Sec. Social Security System. 9See Tecson vs. 4Sec. 18. 5. 3See. id. id. 20. she must know the man to be married (Viada y Vilaseca. supra. . 19. 5Sec. 7See. Act 1792. 6Sec. Footnotes 1For a woman to be guilty of concubinage. Rep. 8Sec. id. 217). id. Vol. in force at the time of death of herein covered member. 1. 16.concur. id. p.