CMS Estate Inc.

vs SSS, 132 SCRA 108

Facts:

Petitioner is a domestic corporation organized primarily for the purpose of engaging in

the real estate business. petitioner became a member of the Social Security System with
respect to its real estate business. It's Articles of Incorporation was amended in order to
engage in the logging business. Petitioner remitted to the System the sum representing
the initial premium on the monthly salaries of the employees in its logging business.
However petitioner demanded the refund of the said amount, claiming that it is not yet
subject to compulsory coverage with respect to its logging business. The request was
denied by respondent System on the ground that the logging business was a mere
expansion of petitioner's activities and for purposes of the Social Security Act,
petitioner should be considered a member of the System when it commenced its real
estate business.

Petitioner filed a petition with the Social Security Commission praying for the
determination of the effectivity date of the compulsory coverage of petitioner's logging
business.

instant petition is hereby denied. motion for reconsideration was denied.

Issue:

Petitioner contends that the Commission cannot indiscriminately combine for purposes
of coverage two distinct and separate businesses when one has not yet been in
operation for more than two years thus rendering nugatory the period for more than
two years thus rendering nugatory the period of stabilization fixed by the Act.

Held:

This contention lacks merit since the amendatory law, RA 2658, which was approved on
June 18, 1960, eliminated the two-year stabilization period as employers now become
automatically covered immediately upon the start of the business.

Section 10 (formerly Sec. 9) of RA 1161, as amended by RA 2658 now provides:

Sec. 10. Effective date of coverage. — Compulsory coverage of the employer shall take
effect on the first day of his operation, and that of the employee on the date of his
employment.
Phil. Blooming Mills Co. Inc vs SSS, 17 SCRA 1077

Facts:

Philippine Blooming Mills Co., Inc., has been employing Japanese technicians under a
pre-arranged contract of employment, the minimum period of which employment is 6
months and the maximum is 24 months. The corporation had in its employ 6 Japanese
technicians. In connection with the employment of these aliens, it sent an inquiry to the
Social Security System (SSS) whether these employees are subject to compulsory
coverage under the System. The Assistant General Manager of the corporation, filed a
claim with the SSS for the refund of the premiums paid to the System, on the ground of
termination of the members' employment. As this claim was denied, they filed a petition
with the Social Security Commission for the return or refund of the premiums.

This claim was controverted by the SSS, alleging that Rule IX of the Rules and
Regulations of the System, as amended, requires membership in the System for at least
2 years before a separated or resigned employee may be allowed a return of his
personal contributions. Under the same rule, the employer is not also entitled to a
refund of the premium contributions it had paid.

Appellants contend that the amendment of the Rules and Regulations of the SSS, insofar
as it eliminates the provision on the return of premium contributions, originally
embodied in Section 3(d) of Rule I, constituted an impairment of obligations of contract.
It is claimed, in effect, that when appellants-employees became members in September,
1957, and paid the corresponding premiums to the System, it is subject to the condition
that upon their departure from the Philippines, these employees, as well as their
employer, are entitled to a rebate of a proportionate amount of their respective
contributions.

Issue:

Whether or not appellants are bound by the amended Rules requiring membership for
two years before refund of the premium contributions may be allowed.

Held:

Membership therein is not the result of a contractual agreement but a legal imposition.
—Membership in the Social Security System is not the result of a bilateral, consensual
agreement where the rights and obligations of the parties are defined by and subject to
their will. RA 1161 requires compulsory coverage of employers and employees under
the system. It is actually a legal imposition on said employers and employees, designed
to provide security to the working men. Membership in the Social Security System is,
therefore, in compliance with a lawful exercise of the police power of the State, to which
the principle of non impairment of the obligation of contract is not a proper defense.

Roman Catholic Archbishop of Manila vs SSC, 1 SCRA 10

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.

the request, however, was denied by the Commission. Hence, this appeal.

Held:

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, benefit or support of any priest who might be
employed by appellant. The funds contributed to the System created by the law are not
public funds, but funds belonging to the members which are merely held in trust by the
Government. At any rate, assuming that said funds are impressed with the character of
public funds, their payment as retirement death or disability benefits would not
constitute a violation of the cited provisions of the Constitution, since such payment
shall be made to the priest not because he is a priest but because he is an employee.

These contributions, contrary to appellant's contention, are not in the nature of taxes on
employment." Together with the contributions imposed upon the employees and the
Government, they are intended for the protection of said employees against the hazards
of disability, sickness, 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.