Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.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 generis applies 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 shall provide protection to employees against the
hazards of disability, sickness, old age and death." (See. 2, Republic Act No. 1161, as amended.) Such
enactment is a legitimate exercise of the police power. It affords protection to labor, especially to working
women and minors, 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." Being in fact a social legislation,
compatible with the policy of the Church to ameliorate living conditions of the working class, appellant
cannot arbitrarily delimit the extent of its provisions to relations between capital and labor in industry and
agriculture.

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.
Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right
to disseminate religious information. All that is required of appellant is to make monthly contributions to
the System for covered employees in its employ. 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.

IN VIEW OF THE FOREGOING, Resolutions Nos. 572 kind 767, series of 1958, of the Social Security
Commission are hereby affirmed. So ordered with costs against appellant.

Paras, C.J., Padilla, Bautista Angelo, Paredes and Dizon, JJ., concur.

Concepcion, Reyes, J.B.L. and Barrera, JJ., concur in the result.
Bengzon, J., reserves his vote.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-26298 September 28, 1984

CMS ESTATE, INC., petitioner,

vs.
SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, respondents.

Sison Dominguez & Cervantes for petitioner.

The Legal Counsel for respondent SSS.

CUEVAS, J.:

This appeal by the CMS Estate, Inc. from the decision rendered by the Social Security Commission in its
Case No. 12, entitled "CMS Estate, Inc. vs. Social Security System, declaring CMS subject to compulsory
coverage as of September 1, 1957 and "directing the Social Security System to effect such coverage of
the petitioner's employees in its logging and real estate business conformably to the provision of Republic
Act No. 1161, as amended was certified to Us by the defunct Court of Appeals 1 for further disposition considering that
purely questions of law are involved.

Petitioner is a domestic corporation organized primarily for the purpose of engaging in the real estate
business. On December 1, 1952, it started doing business with only six (6) employees. It's Articles of
Incorporation was amended on June 4, 1956 in order to engage in the logging business. The Securities
and Exchange Commission issued the certificate of filing of said amended articles on June 18, 1956.
Petitioner likewise obtained an ordinary license from the Bureau of Forestry to operate a forest
concession of 13,000 hectares situated in the municipality of Baganga, Province of Davao.

On January 28, 1957, petitioner entered into a contract of management with one Eufracio D. Rojas for the
operation and exploitation of the forest concession The logging operation actually started on April 1, 1957
with four monthly salaried employees. As of September 1, 1957, petitioner had 89 employees and
laborers in the logging operation. On December 26, 1957, petitioner revoked its contract of management
with Mr. Rojas.

On August 1, 1958, petitioner became a member of the Social Security System with respect to its real
estate business. On September 6, 1958, petitioner remitted to the System the sum of P203.13
representing the initial premium on the monthly salaries of the employees in its logging business.
However, on October 9, 1958, 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 since December 1, 1952 when it commenced its real estate business.

On November 10, 1958, 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.
After both parties have submitted their respective memoranda, the Commission issued on January 14,
1960, Resolution No. 91,   the dispositive portion of which reads as follows:
2

Premises considered, the instant petition is hereby denied and petitioner is hereby
adjudged to be subject to compulsory coverage as of Sept. 1, 1957 and the Social
Security System is hereby directed to effect such coverage of petitioner's employees in
its logging and real estate business conformably to the provisions of Rep. Act No. 1161,
as amended.

SO ORDERED.

Petitioner's motion for reconsideration was denied in Resolution No. 609 of the Commission.

These two (2) resolutions are now the subject of petitioner's appeal. Petitioner submits that respondent
Commission erred in holding —

(1) that the contributions required of employers and employees under our Social Security
Act of 1954 are not in the nature of excise taxes because the said Act was allegedly
enacted by Congress in the exercise of the police power of the State, not of its taxing
power;

(2) that no contractee — independent contractor relationship existed between petitioner

and Eufracio D. Rojas during the time that he was operating its forest concession at
Baganga, Davao;

(3) that a corporation which has been in operation for more than two years in one
business is immediately covered with respect to any new and independent business it
may subsequently engage in;

(4) that a corporation should be treated as a single employing unit for purposes of
coverage under the Social Security Act, irrespective of its separate, unrelated and
independent business established and operated at different places and on different
dates; and

(5) that Section 9 of the Social Security Act on the question of compulsory membership
and employers should be given a liberal interpretation.

Respondent, on the other hand, advances the following propositions, inter alia:

(1) that the Social Security Act speaks of compulsory coverage of employers and not of
business;

(2) that once an employer is initially covered under the Social Security Act, any other
business undertaken or established by the same employer is likewise subject in spite of
the fact that the latter has not been in operation for at least two years;

(3) that petitioner's logging business while actually of a different, distinct, separate and
independent nature from its real estate business should be considered as an operation
under the same management;

(4) that the amendment of petitioner's articles of incorporation, so as to enable it to

engage in the logging business did not alter the juridical personality of petitioner; and
 (5) the petitioner's logging operation is a mere expansion of its business activities.

The Social Security Law was enacted pursuant to the policy of the government "to develop, establish
gradually and perfect a social security system which shall be suitable to the needs of the people
throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age
and death" (Sec. 2, RA 1161, as amended). It is thus clear that said enactment implements the general
welfare mandate of the Constitution and constitutes a legitimate exercise of the police power of the State.
As held in the case of Philippine Blooming Mills Co., Inc., et al. vs. SSS   —
3

Membership in the SSS is not a result of bilateral, concensual agreement where the
rights and obligations of the parties are defined by and subject to their will, RA 1161
requires compulsory coverage of employees and employers under the System. It is
actually a legal imposition on said employers and employees, designed to provide social
security to the workingmen. Membership in the SSS is therefore, in compliance with the
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.

xxx xxx xxx

The taxing power of the State is exercised for the purpose of raising revenues. However, under our Social
Security Law, the emphasis is more on the promotion of the general welfare. The Act is not part of out
Internal Revenue Code nor are the contributions and premiums therein dealt with and provided for,
collectible by the Bureau of Internal Revenue. The funds contributed to the System belong to the
members who will receive benefits, as a matter of right, whenever the hazards provided by the law occur.

All that is required of appellant is to make monthly contributions to the System for
covered employees in its employ. These contributions, contrary to appellant's contention,
are not 'in the nature of taxes on employment.' Together with the contributions imposed
upon 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.
4

Because of the broad social purpose of the Social Security Act, all doubts in construing the Act should
favor coverage rather than exemption.

Prior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled to become
a member of the System, he must have been in operation for at least two years and has at the time of
admission at least six employees. It should be pointed out that it is the employer, either natural, or judicial
person, who is subject to compulsory coverage and not the business. If the intention of the legislature was
to consider every venture of the employer as the basis of a separate coverage, an express provision to
that effect could have been made. Unfortunately, however, none of that sort appeared provided for in the
said law.

Should each business venture of the employer be considered as the basis of the coverage, an employer
with more than one line of business but with less than six employees in each, would never be covered
although he has in his employ a total of more than six employees which is sufficient to bring him within the
ambit of compulsory coverage. This would frustrate rather than foster the policy of the Act. The legislative
intent must be respected. In the absence of an express provision for a separate coverage for each kind of
business, the reasonable interpretation is that once an employer is covered in a particular kind of
business, he should be automatically covered with respect to any new name. Any interpretation which
would defeat rather than promote the ends for which the Social Security Act was enacted should be
eschewed.  5
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. 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. (Emphasis supplied)

As We have previously mentioned, it is the intention of the law to cover as many persons as possible so
as to promote the constitutional objective of social justice. It is axiomatic that a later law prevails over a
prior statute and moreover the legislative in tent must be given effect.  6

Petitioner further submits that Eufrancio Rojas is an independent contractor who engages in an
independent business of his own consisting of the operation of the timber concession of the former. Rojas
was appointed as operations manager of the logging consession;   he has no power to appoint or hire
7

employees; as the term implies, he only manages the employees and it is petitioner who furnishes him
the necessary equipment for use in the logging business; and he is not free from the control and direction
of his employer in matter connected with the performance of his work. These factors clearly indicate that
Rojas is not an independent contractor but merely an employee of petitioner; and should be entitled to the
compulsory coverage of the Act.

The records indubitably show that petitioner started its real estate business on December 1, 1952 while
its logging operation was actually commenced on April 1, 1957. Applying the provision of Sec. 10 of the
Act, petitioner is subject to compulsory coverage as of December 1, 1952 with respect to the real estate
business and as of April 1, 1957 with respect to its logging operation.

WHEREFORE, premises considered, the appeal is hereby DISMISSED. With costs against petitioner.

SO ORDERED.
 FIRST DIVISION

G.R. No. 165546             February 27, 2006

SOCIAL SECURITY SYSTEM, Petitioner,

vs.
ROSANNA H. AGUAS, JANET H. AGUAS, and minor JEYLNN H. AGUAS, represented by her Legal
Guardian, ROSANNA H. AGUAS, Respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) in CA-G.R. SP
No. 66531 and its Resolution denying the motion for reconsideration thereof.

The antecedents are as follows:

Pablo Aguas, a member of the Social Security System (SSS) and a pensioner, died on December 8,
1996. Pablo’s surviving spouse, Rosanna H. Aguas, filed a claim with the SSS for death benefits on
December 13, 1996. Rosanna indicated in her claim that Pablo was likewise survived by his minor child,
Jeylnn, who was born on October 29, 1991.2 Her claim for monthly pension was settled on February 13,
1997.3

Sometime in April 1997, the SSS received a sworn letter 4 dated April 2, 1997 from Leticia Aguas-
Macapinlac, Pablo’s sister, contesting Rosanna’s claim for death benefits. She alleged that Rosanna
abandoned the family abode approximately more than six years before, and lived with another man on
whom she has been dependent for support. She further averred that Pablo had no legal children with
Rosanna, but that the latter had several children with a certain Romeo dela Peña. In support of her
allegation, Leticia enclosed a notarized copy of the original birth certificate 5 of one Jefren H. dela Peña,
showing that the latter was born on November 15, 1996 to Rosanna Y. Hernandez and Romeo C. dela
Peña, and that the two were married on November 1, 1990.

As a result, the SSS suspended the payment of Rosanna and Jeylnn’s monthly pension in September
1997. It also conducted an investigation to verify Leticia’s allegations. In a Memorandum 6 dated
November 18, 1997, the Social Security Officer who conducted the investigation reported that, based on
an interview with Mariquita D. Dizon, Pablo’s first cousin and neighbor, and Jessie Gonzales (also a
neighbor). She learned that the deceased had no legal children with Rosanna; Jenelyn 7 and Jefren were
Rosanna’s children with one Romeo C. dela Peña; and Rosanna left the deceased six years before his
death and lived with Romeo while she was still pregnant with Jenelyn, who was born on October 29,
1991. Mariquita also confirmed that Pablo was not capable of having a child as he was under treatment.
On the basis of the report and an alleged confirmation by a certain Dr. Manuel Macapinlac that Pablo was
infertile, the SSS denied Rosanna’s request to resume the payment of their pensions. She was advised to
refund to the SSS within 30 days the amount of ₱10,350.00 representing the total death benefits released
to her and Jenelyn from December 1996 to August 1997 at ₱1,150.00 per month. 8

Rosanna and Jeylnn, through counsel, requested for a reconsideration of the said decision. 9 However, in
its Letter dated February 6, 1998, the SSS denied the claim. 10

This prompted Rosanna and Jeylnn to file a claim/petition for the Restoration/Payment of Pensions with
the Social Security Commission (SSC) on February 20, 1998. 11 Janet H. Aguas, who also claimed to be
the child of the deceased and Rosanna, now joined them as claimant. The case was docketed as SSC
Case No. 3-14769-98.

The claimants appended to their petition, among others, photocopies of the following: (1) Pablo and
Rosanna’s marriage certificate; (2) Janet’s certificate of live birth; (3) Jeylnn’s certificate of live birth; and
(4) Pablo’s certificate of death.

In its Answer, the SSS averred that, based on the sworn testimonies and documentary evidence showing
the disqualification of the petitioners as primary beneficiaries, the claims were barren of factual and legal
basis; as such, it was justified in denying their claims. 12

In their Position Paper, the claimants averred that Jeylnn was a legitimate child of Pablo as evidenced by
her birth certificate bearing Pablo’s signature as Jeylnn’s father. They asserted that Rosanna never left
Pablo and that they lived together as husband and wife under one roof. In support thereof, they attached
a Joint Affidavit13 executed by their neighbors, Vivencia Turla and Carmelita Yangu, where they declared
that Rosanna and Pablo lived together as husband and wife until the latter’s death. In Janet’s birth
certificate, which was registered in the Civil Registry of San Fernando, it appears that her father was
Pablo and her mother was Rosanna. As to the alleged infertility of Pablo, the claimants averred that Dr.
Macapinlac denied giving the opinion precisely because he was not an expert on such matters, and that
he treated the deceased only for tuberculosis. The claimant likewise claimed that the information the SSS
gathered from the doctor was privileged communication. 14

In compliance with the SSC’s order, the SSS secured Confirmation Reports 15 signed by clerks from the
corresponding civil registers confirming (1) the fact of marriage between Pablo and Rosanna on
December 4, 1977; (2) the fact of Jefren dela Peña’s birth on November 15, 1996; (3) the fact of Jeylnn’s
birth on October 29, 1991; and (4) the fact of Pablo’s death on December 8, 1996.

The SSC decided to set the case for hearing. It also directed the SSS to verify the authenticity of Pablo’s
signature as appearing on Jeylnn’s birth certificate from his claim records, particularly his SSS Form E-1
and retirement benefit application.16 The SSS complied with said directive and manifested to the SSC that,
based on the laboratory analysis conducted, Pablo’s signature in the birth certificate was made by the
same person who signed the member’s record and other similar documents submitted by Pablo. 17

The SSC then summoned Vivencia Turla, Carmelita Yangu and Leticia Aguas-Macapinlac for clarificatory
questions with regard to their respective sworn affidavits. 18 Vivencia testified that she had known Pablo
and Rosanna for more than 30 years already; the couple were married and lived in Macabacle, Dolores,
San Fernando, Pampanga; she was a former neighbor of the spouses, but four years after their marriage,
she (Vivencia) and her family moved to Sto. Niño Triangulo, San Fernando, Pampanga; she would often
visit the two, especially during Christmas or fiestas; the spouses’ real child was Jeylnn; Janet was only an
adopted child; the spouse later transferred residence, not far from their old house, and Janet, together
with her husband and son, remained in the old house. 19
On the other hand, Carmelita testified that she had been a neighbor of Pablo and Rosanna for 15 years
and that, up to the present, Rosanna and her children, Janet, Jeylnn and Jefren, were still her neighbors;
Janet and Jeylnn were the children of Pablo and Rosanna but she did not know whose child Jefren is. 20

According to Leticia, Janet was not the real child of Pablo and Rosanna; she was just taken in by the
spouses because for a long time they could not have children; 21 however, there were no legal papers on
Janet’s adoption.22 Later on, Rosanna got pregnant with Jeylnn; after the latter’s baptism, there was a
commotion at the house because Romeo dela Peña was claiming that he was the father of the child and
he got mad because the child was named after Pablo; the latter also got mad and even attempted to
shoot Rosanna; he drove them away from the house; since then, Pablo and Rosanna separated; 23 she
knew about this because at that time their mother was sick, and she would often visit her at their ancestral
home, where Pablo and Rosanna were also staying; Rosanna was no longer living in their ancestral
home but Janet resided therein; she did not know where Rosanna was staying now but she knew that the
latter and Romeo dela Peña were still living together. 24

Subsequently, Mariquita Dizon and Jessie Gonzales were also summoned for clarificatory
questions.25 During the hearing, Mariquita brought with her photocopies of two baptismal certificates: that
of Jeylnn Aguas,26 child of Pablo Aguas and Rosanna Hernandez born on October 29, 1991, and that of
Jenelyn H. dela Peña,27 child of Romeo dela Peña and Rosanna Hernandez, born on January 29, 1992.

On March 14, 2001, the SSC rendered a decision denying the claims for lack of merit and ordering
Rosanna to immediately refund to the SSS the amount of ₱10,350.00 erroneously paid to her and Jeylnn
as primary beneficiaries of the deceased. The SSC likewise directed the SSS to pay the death benefit to
qualified secondary beneficiaries of the deceased, and in their absence, to his legal heirs. 28

The SSC ruled that Rosanna was no longer qualified as primary beneficiary, it appearing that she had
contracted marriage with Romeo dela Peña during the subsistence of her marriage to Pablo. The SSC
based its conclusion on the birth certificate of Jefren dela Peña stating that his mother, Rosanna, and
father, Romeo dela Peña, were married on November 1, 1990. The SSC declared that Rosanna had a
child with Romeo dela Peña while she was still married to Pablo (as evidenced by the baptismal
certificate of Jenelyn H. dela Peña showing that she was the child of Rosanna Hernandez and Romeo
dela Peña and that she was born on January 29, 1992). The SSC concluded that Rosanna was no longer
entitled to support from Pablo prior to his death because of her act of adultery. As for Jeylnn, the SSC
ruled that, even if her birth certificate was signed by Pablo as her father, there was more compelling
evidence that Jeylnn was not his legitimate child. The SSC deduced from the records that Jeylnn and
Jenelyn was one and the same person and concluded, based on the latter’s baptismal certificate, that she
was the daughter of Rosanna and Romeo dela Peña. It also gave credence to the testimonies of Leticia
and Mariquita that Jeylnn was the child of Rosanna and Romeo dela Peña. As for Janet, the SSC relied
on Leticia’s declaration that she was only adopted by Pablo and Rosanna. 29

The claimants filed a motion for reconsideration of the said decision but their motion was denied by the
SSC for lack of merit and for having been filed out of time. 30 The claimants then elevated the case to the
CA via a petition for review under Rule 43 of the Rules of Court.

On September 9, 2003, the CA rendered a decision in favor of petitioners. The fallo of the decision reads:

WHEREFORE, the resolution and order appealed from are hereby REVERSED and SET ASIDE, and a
new one is entered DECLARING petitioners as ENTITLED to the SSS benefits accruing from the death of
Pablo Aguas. The case is hereby REMANDED to public respondent for purposes of computing the
benefits that may have accrued in favor of petitioners after the same was cut and suspended in
September 1997.

SO ORDERED.31
In so ruling, the CA relied on the birth certificates of Janet and Jeylnn showing that they were the children
of the deceased. According to the appellate court, for judicial purposes, these records were binding upon
the parties, including the SSS. These entries made in public documents may only be challenged through
adversarial proceedings in courts of law, and may not be altered by mere testimonies of witnesses to the
contrary. As for Rosanna, the CA found no evidence to show that she ceased to receive support from
Pablo before he died. Rosanna’s alleged affair with Romeo dela Peña was not properly proven. In any
case, even if Rosanna married Romeo dela Peña during her marriage to Pablo, the same would have
been a void marriage; it would not have ipso facto made her not dependent for support upon Pablo and
negate the presumption that, as the surviving spouse, she is entitled to support from her husband. 32

The SSS filed a motion for reconsideration of the decision, which the CA denied for lack of merit. 33 Hence,
this petition.

Petitioner seeks a reversal of the decision of the appellate court, contending that it

GRAVELY ERRED IN HOLDING THAT ROSANNA AGUAS IS ACTUALLY DEPENDENT FOR

SUPPORT UPON THE MEMBER DURING HIS LIFETIME TO QUALIFY AS PRIMARY
BENEFICIARY WITHIN THE INTENDMENT OF SECTION 8(e), IN RELATION TO SECTION (k)
OF THE SSS LAW, AS AMENDED.

II

ERRED IN HOLDING THAT JANET AGUAS AND JEYLNN AGUAS ARE ENTITLED TO THE
PENSION BENEFIT ACCRUING FROM THE DEATH OF PABLO AGUAS. 34

Petitioner invokes Section 8 of Republic Act No. 1161, as amended by Presidential Decree No. 735,
which defines a dependent spouse as "the legitimate spouse dependent for support upon the employee."
According to petitioner, Rosanna forfeited her right to be supported by Pablo when she engaged in an
intimate and illicit relationship with Romeo dela Peña and married the latter during her marriage to Pablo.
Such act constitutes abandonment, which divested her of the right to receive support from her husband. It
asserts that her act of adultery is evident from the birth certificate of Jefren H. dela Peña showing that he
was born on November 15, 1996 to Rosanna and Romeo dela Peña. Petitioner submits that Rosanna
cannot be considered as a dependent spouse of Pablo; consequently, she is not a primary beneficiary. 35

As for Janet and Jeylnn, petitioner maintains that they are not entitled to the pension because, based on
the evidence on record, particularly the testimonies of the witnesses, they are not the legitimate children
of Pablo. It argues that, in the exercise of its quasi-judicial authority under Section 5(a) of the Social
Security Act, the SSC can pass upon the legitimacy of respondents’ relationship with the member to
determine whether they are entitled to the benefits, even without correcting their birth certificates. 36

Respondents, for their part, assert that petitioner failed to prove that Rosanna committed acts of adultery
or that she married another man after the death of her husband. They contend that Janet and Jeylnn’s
legitimacy may be impugned only on the grounds stated in Article 166 of the Family Code, none of which
were proven in this case.37

The issue to be resolved in this case is whether Rosanna, Jeylnn and Janet are entitled to the SSS death
benefits accruing from the death of Pablo.

The petition is partly meritorious.

The general rule is that only questions of law may be raised by the parties and passed upon by the Court
in petitions for review under Rule 45 of the Rules of Court. 38 In an appeal via certiorari, the Court may not
review the factual findings of the CA.39 It is not the Court’s function under Rule 45 to review, examine, and
evaluate or weigh the probative value of the evidence presented. 40 However, the Court may review
findings of facts in some instances, such as, when the judgment is based on a misapprehension of facts,
when the findings of the CA are contrary to those of the trial court or quasi-judicial agency, or when the
findings of facts of the CA are premised on the absence of evidence and are contradicted by the evidence
on record.41 The Court finds these instances present in this case.

At the time of Pablo’s death, the prevailing law was Republic Act No. 1161, as amended by Presidential
Decree No. 735. Section 13 of the law enumerates those who are entitled to death benefits:

Sec.13. Death benefits. – Effective July 1, 1975, upon the covered employee’s death, (a) his primary
beneficiaries shall be entitled to the basic monthly pension, and his dependents to the dependent’s
pension: Provided, That he has paid at least thirty-six monthly contributions prior to the semester of
death: Provided, further, That if the foregoing condition is not satisfied, or if he has no primary
beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty times
the basic monthly pension: Provided, however, That the death benefit shall not be less than the total
contributions paid by him and his employer on his behalf nor less than five hundred pesos: Provided,
finally, That the covered employee who dies in the month of coverage shall be entitled to the minimum
benefit.

Section 8(k) and (e), in turn, defines dependents and primary beneficiaries of an SSS member as follows:

SECTION 8. Terms defined. – For the purposes of this Act the following terms shall, unless the context
indicates otherwise, have the following meanings:

xxxx

(e) Dependent. – The legitimate, legitimated, or legally adopted child who is unmarried, not gainfully
employed, and not over twenty-one years of age provided that he is congenitally incapacitated and
incapable of self-support physically or mentally; the legitimate spouse dependent for support upon the
employee; and the legitimate parents wholly dependent upon the covered employee for regular support.

xxxx

(k) Beneficiaries. – The dependent spouse until he remarries and dependent children, who shall be the
primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on
dependent children, the legitimate descendants and illegitimate children who shall be the secondary
beneficiaries. In the absence of any of the foregoing, any other person designated by the covered
employee as secondary beneficiary.

Whoever claims entitlement to such benefits should establish his or her right thereto by substantial
evidence. Substantial evidence, the quantum of evidence required to establish a fact in cases before
administrative or quasi-judicial bodies, is that level of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.42

The Court has reviewed the records of the case and finds that only Jeylnn has sufficiently established her
right to a monthly pension.

Jeylnn’s claim is justified by the photocopy of her birth certificate which bears the signature of Pablo.
Petitioner was able to authenticate the certification from the Civil Registry showing that she was born on
October 29, 1991. The records also show that Rosanna and Pablo were married on December 4, 1977
and the marriage subsisted until the latter’s death on December 8, 1996. It is therefore evident that Jeylnn
was born during Rosanna and Pablo’s marriage.

It bears stressing that under Article 164 of the Family Code, children conceived or born during the
marriage of the parents are legitimate. This Court, in De Jesus v. Estate of Decedent Juan Gamboa
Dizon,43 extensively discussed this presumption –

There is perhaps no presumption of the law more firmly established and founded on sounder morality and
more convincing reason than the presumption that children born in wedlock are legitimate. This
presumption indeed becomes conclusive in the absence of proof that there is physical impossibility of
access between the spouses during the first 120 days of the 300 days which immediately precedes the
birth of the child due to (a) the physical incapacity of the husband to have sexual intercourse with his wife;
(b) the fact that the husband and wife are living separately in such way that sexual intercourse is not
possible; or (c) serious illness of the husband, which absolutely prevents sexual intercourse. Quite
remarkably, upon the expiration of the periods set forth in Article 170, 44 and in proper cases Article
171,45 of the Family Code (which took effect on 03 August 1988), the action to impugn the legitimacy of
the child would no longer be legally feasible and the status conferred by the presumption becomes fixed
and unassailable.46

Indeed, impugning the legitimacy of a child is a strictly personal right of the husband or, in exceptional
cases, his heirs.47 In this case, there is no showing that Pablo challenged the legitimacy of Jeylnn during
his lifetime. Hence, Jeylnn’s status as a legitimate child of Pablo can no longer be contested.

The presumption that Jeylnn is a legitimate child is buttressed by her birth certificate bearing Pablo’s
signature, which was verified from his specimen signature on file with petitioner. A birth certificate signed
by the father is a competent evidence of paternity. 48

The presumption of legitimacy under Article 164, however, can not extend to Janet because her date of
birth was not substantially proven. Such presumption may be availed only upon convincing proof of the
factual basis therefor, i.e., that the child’s parents were legally married and that his/her conception or birth
occurred during the subsistence of that marriage. 49 It should be noted that respondents likewise submitted
a photocopy of Janet’s alleged birth certificate. However, the Court cannot give said birth certificate the
same probative weight as Jeylnn’s because it was not verified in any way by the civil register. It stands as
a mere photocopy, without probative weight. Unlike Jeylnn, there was no confirmation by the civil register
of the fact of Janet’s birth on the date stated in the certificate.

In any case, a record of birth is merely prima facie evidence of the facts contained therein. 50 Here, the
witnesses were unanimous in saying that Janet was not the real child but merely adopted by Rosanna
and Pablo. Leticia also testified that Janet’s adoption did not undergo any legal proceedings; hence, there
were no papers to prove it. Under Section 8(e) of Republic Act No. 1161, as amended, only "legally
adopted" children are considered dependent children. Absent any proof that the family has legally
adopted Janet, the Court cannot consider her a dependent child of Pablo, hence, not a primary
beneficiary.

On the claims of Rosanna, it bears stressing that for her to qualify as a primary beneficiary, she must
prove that she was "the legitimate spouse dependent for support from the employee." The claimant-
spouse must therefore establish two qualifying factors: (1) that she is the legitimate spouse, and (2) that
she is dependent upon the member for support. In this case, Rosanna presented proof to show that she is
the legitimate spouse of Pablo, that is, a copy of their marriage certificate which was verified with the civil
register by petitioner. But whether or not Rosanna has sufficiently established that she was still
dependent on Pablo at the time of his death remains to be resolved. Indeed, a husband and wife are
obliged to support each other,51 but whether one is actually dependent for support upon the other is
something that has to be shown; it cannot be presumed from the fact of marriage alone.
In a parallel case52 involving a claim for benefits under the GSIS law, the Court defined a dependent as
"one who derives his or her main support from another. Meaning, relying on, or subject to, someone else
for support; not able to exist or sustain oneself, or to perform anything without the will, power, or aid of
someone else." It should be noted that the GSIS law likewise defines a dependent spouse as "the
legitimate spouse dependent for

support upon the member or pensioner." In that case, the Court found it obvious that a wife who
abandoned the family for more than 17 years until her husband died, and lived with other men, was not
dependent on her husband for support, financial or otherwise, during that entire period. Hence, the Court
denied her claim for death benefits.

The obvious conclusion then is that a wife who is already separated de facto from her husband cannot be
said to be "dependent for support" upon the husband, absent any showing to the contrary. Conversely, if
it is proved that the husband and wife were still living together at the time of his death, it would be safe to
presume that she was dependent on the husband for support, unless it is shown that she is capable of
providing for herself.

Rosanna had the burden to prove that all the statutory requirements have been complied with, particularly
her dependency on her husband for support at the time of his death. Aside from her own testimony, the
only evidence adduced by Rosanna to prove that she and Pablo lived together as husband and wife until
his death were the affidavits of Vivencia Turla and Carmelita Yangu where they made such declaration.

Still, the affidavits of Vivencia and Carmelita and their testimonies before the SSC will not prevail over the
categorical and straightforward testimonies of the other witnesses who testified that Rosanna and Pablo
had already separated for almost six years before the latter died. Except for the bare assertion of
Carmelita that the couple never separated, there was no further statement regarding the witnesses’
assertion in their affidavits that the couple lived together until Pablo’s death. On the contrary, Leticia
narrated that the two separated after Jeylnn’s baptism as a result of an argument regarding Romeo dela
Peña. According to Leticia, there was a commotion at their ancestral house because Romeo dela Peña
was grumbling why Jeylnn was named after Pablo when he was the father, and as a result, Pablo drove
them away. The SSC’s observation and conclusion on the two baptismal certificates of Jeylnn and
Jenelyn convinces this Court to further believe Leticia’s testimony on why Pablo and Rosanna separated.
As noted by the SSC:

It appears from the records that Jeylnn Aguas and Jenelyn H. dela Peña are one and the same person.
Jeylnn Aguas, born on October 29, 1991 was baptized at the Metropolitan Cathedral of San Fernando,
Pampanga, on November 24, 1991 as the child of Pablo Aguas and Rosanna Hernandez. Jenelyn H dela
Peña, on the other hand, was born on January 29, 1992 to spouses Rosanna Hernandez and Romeo
dela Peña and baptized on February 9, 1992. It will be noted that Jenelyn dela Peña was born
approximately three months after the birth of Jeylnn Aguas. It is physically impossible for Rosanna to
have given birth successively to two children in so short a time. x x x The testimony of Leticia Aguas-
Macapinlac that Rosanna was driven away by Pablo after the baptism of Jeylnn because of the
commotion that was created by Romeo dela Peña who wanted Jeylnn to be baptized using his name
explains why Jeylnn was again baptized in the Parish of Sto. Niño in San Fernando using the name
Jenelyn dela Peña. They changed her date of birth also to make it appear in the record of the parish that
she is another child of Rosanna.53

On the other hand, Mariquita categorically affirmed that Rosanna was no longer living at Pablo’s house
even before he died, and that she is still living with Romeo dela Peña up to the present. Mariquita testified
as follows:

Hearing Officer:

Nagsama ba si Rosanna at Romeo?

Mrs. Dizon:

Ngayon at kahit na noon.

Hearing Officer:

Kailan namatay si Pablo?

Mrs. Dizon:

1996.

Hearing Officer:

Noong bago mamatay si Pablo?

Mrs. Dizon:

Nagsasama na sila Romeo at Rosanna noon.

Hearing Officer:

So, buhay pa si Pablo ……

Mrs. Dizon:

…. nagsasama na sila ni Romeo.

Hearing Officer:

Kailan nagkahiwalay si Romeo at Rosanna?

Mrs. Dizon:

Hindi na sila nagkahiwalay.

Hearing Officer:

Hindi, ibig ko sabihin si Pablo at Rosana?

Mrs. Dizon:

Hindi ko alam kasi hindi ako madalas pumunta sa kanila eh, dahil namatay na yung nanay ni Kuya
Pabling, yung tiyahin ko, kapatid ng nanay ko. Noon madalas ako noong buhay pa yung nanay ni Kuya
Pabling dahil kami ang nag aalaga sa kanya.

Hearing Officer:

Bago namatay si Pablo, nagsasama ba sina Romeo at Rosanna?

Mrs. Dizon:
Oo.

Hearing Officer:

Sa ngayon, may alam ka pa ba kung nagsasama pa sila Romeo at Rosanna?

Mrs. Dizon:

Oo, nagsasama sila, may bahay sila.

Hearing Officer:

Saan naman?

Mrs. Dizon:

Doon sa malapit sa amin sa may riles ng tren.54

In conclusion, the Court finds that, among respondents, only Jeylnn is entitled to the SSS death benefits
accruing from the death of Pablo, as it was established that she is his legitimate child. On the other hand,
the records show that Janet was merely "adopted" by the spouses, but there are no legal papers to prove
it; hence, she cannot qualify as a primary beneficiary. Finally, while Rosanna was the legitimate wife of
Pablo, she is likewise not qualified as a primary beneficiary since she failed to present any proof to show
that at the time of his death, she was still dependent on him for support even if they were already living
separately.

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision and
Resolution of the Court of Appeals are AFFIRMED WITH MODIFICATION. Only Jeylnn H. Aguas is
declared entitled to the SSS death benefits accruing from the death of Pablo Aguas.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 192531               November 12, 2014

BERNARDINA P. BARTOLOME, Petitioner,
vs.
SOCIAL SECURITY SYSTEM and SCANMAR MARITIME SERVICES, INC., Respondents.

DECISION

VELASCO, JR., J.:

Nature of the Case

This Appeal, filed under Rule 43 of the Rules of Court, seeks to annul the March 17, 2010 Decision  of the
1

Employees Compensation Commission (ECC) in ECC Case No. SL-18483-0218-10, entitled Bernardina
P. Bartolome v. Social Security System (SSS) [Scanmar Maritime Services, Inc.}, declaring that petitioner
is not a beneficiary of the deceased employee under Presidential Decree No. (PD) 442, otherwise known
as the Labor Code of the Philippines, as amended by PD 626. 2

The Facts

John Colcol (John), born on June 9, 1983, was employed as electrician by Scanmar Maritime Services,
Inc., on board the vessel Maersk Danville, since February 2008. As such, he was enrolled under the
government's Employees' Compensation Program (ECP).  Unfortunately, on June 2, 2008, an accident
3

occurred on board the vessel whereby steel plates fell on John, which led to his untimely death the
following day.4

John was, at the time of his death, childless and unmarried. Thus, petitioner Bernardina P. Bartolome,
John’s biological mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits under
PD 626 with the Social Security System (SSS) at San Fernando City, La Union. However, the SSS La
Union office, in a letter dated June 10, 2009  addressed to petitioner, denied the claim, stating:
5

We regret to inform you that wecannot give due course to your claim because you are no longer
considered as the parent of JOHN COLCOL as he was legally adopted by CORNELIO COLCOL based
on documents you submitted to us.

The denial was appealed tothe Employees’ Compensation Commission (ECC), which affirmed the ruling
of the SSS La Union Branch through the assailed Decision, the dispositive portion of which reads:

WHEREFORE, the appealed decision is AFFIRMED and the claim is hereby dismissed for lack of merit.

SO ORDERED. 6

In denying the claim, both the SSS La Union branch and the ECC ruled against petitioner’s entitlement to
the death benefits sought after under PD 626 on the ground she can no longer be considered John’s
primary beneficiary. As culled from the records, John and his sister Elizabeth were adopted by their great
grandfather, petitioner’s grandfather, Cornelio Colcol (Cornelio), by virtue of the Decision  in Spec. Proc.
7

No. 8220-XII of the Regional Trial Court in Laoag City dated February 4, 1985, which decree of adoption
attained finality.  Consequently, as argued by the agencies, it is Cornelio who qualifies as John’s primary
8

beneficiary, not petitioner. Neither, the ECC reasoned, would petitioner qualify as John’s secondary
beneficiary even if it wereproven that Cornelio has already passed away. As the ECC ratiocinated:

Under Article 167 (j) of P.D. 626, as amended, provides (sic) that beneficiaries are the "dependent
spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence,
the dependent parentsand subject to the restrictions imposed on dependent children, the illegitimate
children and legitimate descendants who are the secondary beneficiaries; Provided; that the dependent
acknowledged natural child shall be considered as a primary beneficiary when there are no other
dependent children who are qualified and eligible for monthly income benefit."

The dependent parent referred to by the above provision relates to the legitimate parent of the covered
member, as provided for by Rule XV, Section 1 (c) (1) of the Amended Rules on Employees’
Compensation. This Commission believes that the appellant is not considered a legitimate parent of the
deceased, having given up the latter for adoption to Mr. Cornelio C. Colcol. Thus, in effect, the adoption
divested her of the statusas the legitimate parent of the deceased.

xxxx

In effect, the rights which previously belong [sic] to the biological parent of the adopted child shall now be
upon the adopting parent. Hence, in this case, the legal parent referred to by P.D. 626, as amended, as
the beneficiary, who has the right to file the claim, is the adoptive father of the deceased and not herein
appellant.  (Emphasis supplied)
9

Aggrieved, petitioner filed a Motion for Reconsideration, which was likewise denied by the ECC.  Hence,
10

the instant petition.

The Issues

Petitioner raises the following issues in the petition:

ASSIGNMENT OF ERRORS

I. The Honorable ECC’s Decision is contrary to evidence on record.

II. The Honorable ECC committed grave abuse in denying the just, due and lawful claims of the
petitioner as a lawful beneficiary of her deceased biological son.

III. The Honorable ECC committed grave abuse of discretion in not giving due course/denying
petitioner’s otherwise meritorious motion for reconsideration. 11

In resolving the case, the pivotal issue is this: Are the biological parents of the covered, but legally
adopted, employee considered secondary beneficiaries and, thus, entitled, in appropriate cases, to
receive the benefits under the ECP?

The Court's Ruling

The petition is meritorious.

The ECC’s factual findings are not consistent with the evidence on record
To recall, one of the primary reasons why the ECC denied petitioner’s claim for death benefits is that
eventhough she is John’s biological mother, it was allegedly not proven that his adoptive parent, Cornelio,
was no longer alive. As intimated by the ECC:

Moreover, there had been no allegation in the records as to whether the legally adoptive parent, Mr.
Colcol, is dead, which would immediately qualify the appellant [petitioner] for Social Security benefits.
Hence, absent such proof of death of the adoptive father, this Commission will presume him to be alive
and well, and as such, is the one entitled to claim the benefit being the primary beneficiary of the
deaceased. Thus, assuming that appellant is indeed a qualified beneficiary under the Social Security law,
in view of her status as other beneficiary, she cannot claim the benefit legally provided by law to the
primary beneficiary, in this case the adoptive father since he is still alive.

We disagree with the factual finding of the ECC on this point.

Generally, findings of fact by administrative agencies are generally accorded great respect, if not finality,
by the courts by reason of the special knowledge and expertise of said administrative agenciesover
matters falling under their jurisdiction.  However, in the extant case, the ECC had overlooked a crucial
12

piece of evidence offered by the petitioner – Cornelio’s death certificate.13

Based on Cornelio’s death certificate, it appears that John’s adoptive father died on October 26, 1987,  or
14

only less than three (3) years since the decree of adoption on February 4, 1985, which attained
finality.  As such, it was error for the ECC to have ruled that it was not duly proven that the adoptive
15

parent, Cornelio, has already passed away.

The rule limiting death benefits claims to the legitimate parents is contrary to law

This brings us to the question of whether or not petitioner is entitled to the death benefits claim in view of
John’s work-related demise. The pertinent provision, in this regard, is Article 167 (j) of the Labor Code, as
amended, which reads:

ART. 167. Definition of terms. - Asused in this Title unless the context indicates otherwise:

xxxx

(j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the
primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on
dependent children, the illegitimate children and legitimate descendants who are the secondary
beneficiaries; Provided, that the dependent acknowledged natural child shall be considered as a primary
beneficiary when there are no other dependent children who are qualified and eligible for monthly income
benefit. (Emphasis supplied)

Concurrently, pursuant to the succeeding Article 177(c) supervising the ECC "[T]o approve rules and
regulations governing the processing of claims and the settlement of disputes arising therefrom as
prescribed by the System," the ECC has issued the Amended Rules on Employees’ Compensation,
interpreting the above-cited provision as follows:

RULE XV – BENEFICIARIES

SECTION 1. Definition. (a) Beneficiaries shall be either primary or secondary, and determined atthe time
of employee’s death.

(b) The following beneficiaries shall be considered primary:

 (1) The legitimate spouse living with the employee at the time of the employee’s death
until he remarries; and

(2) Legitimate, legitimated, legally adopted or acknowledged natural children, who are
unmarried not gainfully employed, not over 21 years of age, or over 21 years of age
provided that he is incapacitated and incapable of self - support due to physicalor mental
defect which is congenital or acquired during minority; Provided, further, that a dependent
acknowledged natural child shall be considered as a primary beneficiary only when there
are no other dependent children who are qualified and eligible for monthly income
benefit; provided finally, that if there are two or more acknowledged natural children, they
shall be counted from the youngest and without substitution, but not exceeding five.

(c) The following beneficiaries shall be considered secondary:

(1) The legitimate parentswholly dependent upon the employee for regular support;

(2) The legitimate descendants and illegitimate children who are unmarried, not gainfully
employed, and not over 21 years of age, or over 21 years of age providedthat he is
incapacitated and incapable of self - support dueto physical or mental defect which is
congenital or acquired during minority. (Emphasis supplied)

Guilty of reiteration, the ECC denied petitioner’s claim on the ground that she is no longer the deceased’s
legitimate parent, as required by the implementing rules. As held by the ECC, the adoption decree
severed the relation between John and petitioner, effectively divesting her of the status of a legitimate
parent, and, consequently, that of being a secondary beneficiary.

We disagree.

a. Rule XV, Sec. 1(c)(1) of the Amended Rules on Employees’ Compensation deviates from the clear
language of Art. 167 (j) of the Labor Code, as amended

Examining the Amended Rules on Employees’ Compensation in light of the Labor Code, as amended, it
is at once apparent that the ECC indulged in an unauthorized administrative legislation. In net effect, the
ECC read into Art. 167 of the Code an interpretation not contemplated by the provision. Pertinent in
elucidating on this point isArticle 7 of the Civil Code of the Philippines, which reads:

Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not
beexcused by disuse, or custom or practice to the contrary.

When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the
latter shall govern.

Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to
the laws or the Constitution.(Emphasis supplied)

As applied, this Court held in Commissioner of Internal Revenue v. Fortune Tobacco Corporation  that:
16

As we have previously declared, rule-making power must be confined to details for regulating the mode or
proceedings in order to carry into effect the law as it has been enacted, and it cannot be extended to
amend or expand the statutory requirements or to embrace matters not covered by the statute.
Administrative regulations must always be in harmony with the provisions of the law because any
resulting discrepancy between the two will always be resolved in favor of the basic law. (Emphasis
supplied)
Guided by this doctrine, We find that Rule XV of the Amended Rules on Employees’ Compensation is
patently a wayward restriction of and a substantial deviation from Article 167 (j) of the Labor Code when it
interpreted the phrase "dependent parents" to refer to "legitimate parents."

It bears stressing that a similar issue in statutory construction was resolved by this Court in Diaz v.
Intermediate Appellate Court  in this wise:
17

It is Our shared view that the word "relatives" should be construed in its general acceptation. Amicus
curiae Prof. Ruben Balane has this to say:

The term relatives, although used many times in the Code, is not defined by it. In accordancetherefore
with the canons of statutory interpretation, it should beunderstood to have a general and inclusive scope,
inasmuch as the term is a general one. Generalia verba sunt generaliter intelligenda. That the law does
not make a distinction prevents us from making one: Ubi lex non distinguit, nec nos distinguera debemus.
xxx

According to Prof. Balane, to interpret the term relatives in Article 992 in a more restrictive sense thanit is
used and intended is not warranted by any rule ofinterpretation. Besides, he further states that when the
law intends to use the termin a more restrictive sense, it qualifies the term with the word collateral, as in
Articles 1003 and 1009 of the New Civil Code.

Thus, the word "relatives" is a general term and when used in a statute it embraces not only collateral
relatives but also all the kindred of the person spoken of, unless the context indicates that it was used in a
more restrictive or limited sense — which as already discussed earlier, is not so in the case at bar.
(Emphasis supplied)

In the same vein, the term "parents" in the phrase "dependent parents" in the afore-quoted Article 167 (j)
of the Labor Code is usedand ought to be taken in its general sense and cannot be unduly limited to
"legitimate parents" as what the ECC did. The phrase "dependent parents" should, therefore, include all
parents, whether legitimate or illegitimate and whether by nature or by adoption. When the law does not
distinguish, one should not distinguish. Plainly, "dependent parents" are parents, whether legitimate or
illegitimate, biological or by adoption,who are in need of support or assistance.

Moreover, the same Article 167 (j),as couched, clearly shows that Congress did not intend to limit the
phrase "dependent parents" to solely legitimate parents. At the risk of being repetitive, Article 167
provides that "in their absence, the dependent parents and subject to the restrictions imposed on
dependent children, the illegitimate children and legitimate descendants who are secondary
beneficiaries." Had the lawmakers contemplated "dependent parents" to mean legitimate parents, then it
would have simply said descendants and not "legitimate descendants." The manner by which the
provision in question was crafted undeniably show that the phrase "dependent parents" was intended to
cover all parents – legitimate, illegitimate or parents by nature or adoption.

b. Rule XV, Section 1(c)(1) of the Amended Rules on Employees’ Compensation is in contravention of the
equal protection clause

To insist that the ECC validly interpreted the Labor Code provision is an affront to the Constitutional
guarantee of equal protection under the laws for the rule, as worded, prevents the parents of an
illegitimate child from claiming benefits under Art. 167 (j) of the Labor Code, as amended by PD 626. To
Our mind, such postulation cannot be countenanced.

As jurisprudence elucidates, equal protection simply requires that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities imposed. It requires public bodies
and institutions to treat similarly situated individuals in a similar manner.  In other words, the concept of
18
equal justice under the law requires the state to govern impartially, and it may not drawdistinctions
between individuals solely on differences that are irrelevant to a legitimate governmental objective. 19

The concept of equal protection, however, does not require the universal application of the laws to all
persons or things without distinction. What it simply requires isequality among equals as determined
according to a valid classification. Indeed, the equal protection clause permits classification. Such
classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1)
The classification rests on substantial distinctions; (2) It is germane tothe purpose of the law; (3) It is not
limited to existing conditions only; and (4) It applies equally to all members of the same class. "Superficial
differences do not make for a valid classification." 20

In the instant case, there is no compelling reasonable basis to discriminate against illegitimate parents.
Simply put, the above-cited rule promulgated by the ECC that limits the claim of benefits to the legitimate
parents miserably failed the test of reasonableness since the classification is not germane to the law
being implemented. We see no pressing government concern or interest that requires protection so as to
warrant balancing the rights of unmarried parents on one hand and the rationale behind the law on the
other. On the contrary, the SSS can better fulfill its mandate, and the policy of PD 626 – that employees
and their dependents may promptly secure adequate benefits in the event of work-connected disability or
death - will be better served if Article 167 (j) of the Labor Code is not so narrowly interpreted.

There being no justification for limiting secondary parent beneficiaries to the legitimate ones, there can be
no other course of action to take other than to strikedown as unconstitutional the phrase "illegitimate" as
appearing in Rule XV, Section 1(c)(1) of the Amended Rules on Employees’ Compensation.

Petitioner qualifies as John’s dependent parent

In attempting to cure the glaring constitutional violation of the adverted rule, the ECC extended illegitimate
parents an opportunity to file claims for and receive death benefitsby equating dependency and legitimacy
to the exercise of parental authority. Thus, as insinuated by the ECC in its assailed Decision, had
petitioner not given up John for adoption, she could have still claimed death benefits under the law.

To begin with, nowhere in the law nor in the rules does it say that "legitimate parents" pertain to those
who exercise parental authority over the employee enrolled under the ECP. Itwas only in the assailed
Decision wherein such qualification was made. In addition, assuming arguendothat the ECC did not
overstep its boundaries in limiting the adverted Labor Code provision to the deceased’s legitimate
parents, and that the commission properly equated legitimacy to parental authority, petitioner can still
qualify as John’s secondary beneficiary.

True, when Cornelio, in 1985, adoptedJohn, then about two (2) years old, petitioner’s parental authority
over John was severed. However, lest it be overlooked, one key detail the ECC missed, aside from
Cornelio’s death, was that when the adoptive parent died less than three (3) years after the adoption
decree, John was still a minor, at about four (4) years of age.

John’s minority at the time of his adopter’s death is a significant factor in the case at bar. Under such
circumstance, parental authority should be deemed to have reverted in favor of the biological parents.
Otherwise, taking into account Our consistent ruling that adoption is a personal relationship and that there
are no collateral relatives by virtue of adoption,  who was then left to care for the minor adopted child if
21

the adopter passed away?

To be sure, reversion of parental authority and legal custody in favor of the biological parents is not a
novel concept. Section 20 of Republic Act No. 8552  (RA 8552), otherwise known as the Domestic
22

Adoption Act, provides:

Section 20. Effects of Rescission.– If the petition [for rescission of adoption] is granted, the parental
authority of the adoptee's biological parent(s), if known, or the legal custody of the Department shall be
restored if the adoptee is still a minoror incapacitated. The reciprocal rights and obligations of the
adopter(s) and the adoptee to each other shall be extinguished. (emphasis added)

The provision adverted to is applicable herein by analogy insofar as the restoration of custody is
concerned.  The manner herein of terminating the adopter’s parental authority, unlike the grounds for
1âwphi1

rescission,  justifies the retention of vested rights and obligations between the adopter and the adoptee,
23

while the consequent restoration of parental authority in favor of the biological parents, simultaneously,
ensures that the adoptee, who is still a minor, is not left to fend for himself at such a tender age.

To emphasize, We can only apply the rule by analogy, especially since RA 8552 was enacted after
Cornelio’s death. Truth be told, there is a lacuna in the law as to which provision shall govern
contingencies in all fours with the factual milieu of the instant petition. Nevertheless, We are guided by the
catena of cases and the state policies behind RA 8552  wherein the paramount consideration is the best
24

interest of the child, which We invoke to justify this disposition. It is, after all, for the best interest of the
child that someone will remain charged for his welfare and upbringing should his or her adopter fail or is
rendered incapacitated to perform his duties as a parent at a time the adoptee isstill in his formative
years, and, to Our mind, in the absence or, as in this case, death of the adopter, no one else could
reasonably be expected to perform the role of a parent other than the adoptee’s biological one.

Moreover, this ruling finds support on the fact that even though parental authority is severed by virtue of
adoption, the ties between the adoptee and the biological parents are not entirely eliminated. To
demonstrate, the biological parents, insome instances, are able to inherit from the adopted, as can be
gleaned from Art. 190 of the Family Code:

Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the following
rules:

xxx

(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted concur
withthe adopter, they shall divide the entire estate, one-half tobe inherited by the parents or ascendants
and the other half, by the adopters;

xxx

(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or intestate
succession shall apply.

Similarly, at the time of Cornelio Colcol’s death, which was prior to the effectivity of the Family Code, the
governing provision is Art. 984 of the New Civil Code, which provides:

Art. 984. In case of the death of an adopted child, leaving no children or descendants, his parents and
relatives by consanguinity and not by adoption, shall be his legal heirs.

From the foregoing, it is apparent that the biological parents retain their rights of succession tothe estate
of their child who was the subject of adoption. While the benefits arising from the death of an SSS
covered employee do not form part of the estateof the adopted child, the pertinent provision on legal or
intestate succession at least reveals the policy on the rights of the biological parents and those by
adoption vis-à-vis the right to receive benefits from the adopted. In the same way that certain rights still
attach by virtue of the blood relation, so too should certain obligations, which, We rule, include the
exercise of parental authority, in the event of the untimely passing of their minor offspring’s adoptive
parent. We cannot leave undetermined the fate of a minor child whose second chance ata better life
under the care of the adoptive parents was snatched from him by death’s cruel grasp. Otherwise, the
adopted child’s quality of life might have been better off not being adopted at all if he would only find
himself orphaned in the end. Thus, We hold that Cornelio’s death at the time of John’sminority resulted in
the restoration of petitioner’s parental authority over the adopted child.

On top of this restoration of parental authority, the fact of petitioner’s dependence on John can be
established from the documentary evidence submitted to the ECC. As it appears in the records, petitioner,
prior to John’s adoption, was a housekeeper. Her late husband died in 1984, leaving her to care for their
seven (7) children. But since she was unable to "give a bright future to her growing children" as a
housekeeper, she consented to Cornelio’s adoption of Johnand Elizabeth in 1985.

Following Cornelio’s death in 1987, so records reveal, both petitioner and John repeatedly reported "Brgy.
Capurictan, Solsona, Ilocos Norte" as their residence. In fact, this veryaddress was used in John’s Death
Certificate  executed in Brazil, and in the Report of Personal Injury or Loss of Life accomplished by the
25

master of the vessel boarded by John.  Likewise, this is John’s known address as per the ECC’s assailed
26

Decision.  Similarly, this same address was used by petitioner in filing her claim before the SSS La Union
27

branch and, thereafter, in her appeal with the ECC. Hence, it can be assumed that aside from having
been restored parental authority over John, petitioner indeed actually execised the same, and that they
lived together under one roof.

Moreover, John, in his SSS application,  named petitioner as one of his beneficiaries for his benefits
28

under RA 8282, otherwise known as the "Social Security Law." While RA 8282 does not cover
compensation for work-related deaths or injury and expressly allows the designation of beneficiaries who
are not related by blood to the member unlike in PD 626, John’s deliberate act of indicating petitioner as
his beneficiary at least evinces that he, in a way, considered petitioner as his dependent. Consequently,
the confluence of circumstances – from Cornelio’s death during John’s minority, the restoration
ofpetitioner’s parental authority, the documents showing singularity of address, and John’s clear intention
to designate petitioner as a beneficiary - effectively made petitioner, to Our mind, entitled to death benefit
claims as a secondary beneficiary under PD 626 as a dependent parent.

All told, the Decision of the ECC dated March 17, 2010 is bereft of legal basis. Cornelio’s adoption of
John, without more, does not deprive petitioner of the right to receive the benefits stemming from John’s
death as a dependent parent given Cornelio’s untimely demise during John’s minority. Since the parent
by adoption already died, then the death benefits under the Employees' Compensation Program shall
accrue solely to herein petitioner, John's sole remaining beneficiary.

WHEREFORE, the petition is hereby GRANTED. The March 17, 2010 Decision of the Employees'
Compensation Commission, in ECC Case No. SL-18483-0218-10, is REVERSED and SET ASIDE. The
ECC is hereby directed to release the benefits due to a secondary beneficiary of the deceased covered
employee John Colcol to petitioner Bernardina P. Bartolome.

No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-21642             July 30, 1966

SOCIAL SECURITY SYSTEM, petitioner-appellee,

vs.
CANDELARIA D. DAVAC, ET AL., respondents;
LOURDES Tuplano, respondent-appellant.

J. Ma. Francisco and N. G. Bravo for respondent-appellant.

Office of the Solicitor General Arturo A. Alafriz, Solicitor Camilo D. Quiason and E. T. Duran for petitioner-
appellee.

BARRERA, J.:

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.

The facts of the case as found by the Social Security Commission, briefly are: The late Petronilo Davac, a
former employee of Lianga Bay Logging Co., Inc. became a member of the Social Security System (SSS
for short) on September 1, 1957. As such member, he was assigned SS I.D. No. 08-007137. In SSS form
E-1 (Member's Record) which he accomplished and filed with the SSS on November 21, 1957, he
designated respondent Candelaria Davac as his beneficiary and indicated his relationship to her as that of
"wife". He died on April 5, 1959 and, thereupon, each of the respondents (Candelaria Davac and Lourdes
Tuplano) filed their claims for death benefit with the SSS. It appears from their respective claims and the
documents submitted in support thereof, that the deceased contracted two marriages, the first, with
claimant Lourdes Tuplano on August 29, 1946, who bore him a child, Romeo Davac, and the second, with
Candelaria Davac on January 18, 1949, with whom he had a minor daughter Elizabeth Davac. Due to
their conflicting claims, the processing thereof was held in abeyance, 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. 1äwphï1.ñët

On February 25, 1963, the Social Security Commission issued the resolution referred to above, Not
satisfied with the said resolution, respondent Lourdes Tuplano brought to us the present appeal.

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.

Section 13, Republic Act No. 1161, as amended by Republic Act No. 1792, in force at the time Petronilo
Davac's death on April 5, 1959, provides:

1. SEC. 13. Upon the covered employee's death or total and permanent disability under such
conditions as the Commission may define, before becoming eligible for retirement and if either
such death or disability is not compensable under the Workmen's Compensation Act, he or, in
case of his death, his beneficiaries, as recorded by his employer shall be entitled to the following
benefit: ... . (emphasis supplied.)
Under this provision, the beneficiary "as recorded" by the employee's employer is the one entitled to the
death benefits. In the case of Tecson vs. Social Security System, (L-15798, December 28, 1961), this
Court, construing said Section 13, 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, 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,
thereof, ... . When the provision of a law are clear and explicit, the courts can do nothing but apply
its clear and explicit provisions (Velasco vs. Lopez, 1 Phil, 270; Caminetti vs. U.S., 242 U.S. 470,
61 L. ed. 442).

But appellant contends that the designation herein made in the person of the second and, therefore,
bigamous wife is null and void, because (1) it contravenes the provisions of the Civil Code, 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.

As to the first point, appellant argues that a beneficiary under the Social Security System partakes of the
nature of a beneficiary in life insurance policy and, therefore, the same qualifications and disqualifications
should be applied.

Article 2012 of the New Civil Code provides:

ART. 2012. 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.

And Article 739 of the same Code prescribes:

ART. 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of the
donation;

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, or that it creates a situation analogous to the relation of an insured
and the beneficiary under a life insurance policy, it is enough, for the purpose of the instant case, to state
that the disqualification mentioned in Article 739 is not applicable to herein appellee Candelaria Davac
because she was not guilty of concubinage, there being no proof that she had knowledge of the previous
marriage of her husband Petronilo.1

Regarding the second point raised by appellant, 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.
They are disbursed from a public special fund created by Congress in pursuance to the declared policy of
the Republic "to develop, establish gradually and perfect a social security system which ... shall provide
protection against the hazards of disability, sickness, old age and death." 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);3 the employer's contribution (equivalent to 3-½ per cent of the
monthly compensation of the covered employee);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.5 Additionally, Section 21 of the Social Security Act, as amended by Republic Act
1792, provides:

SEC. 21. Government Guarantee. — 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.

From the foregoing provisions, it appears that the benefit receivable under the Act is in the nature of a
special privilege or an arrangement secured by the law, pursuant to the policy of the State to provide
social security to the workingmen. The amounts that may thus be received cannot be considered as
property earned by the member during his lifetime. His contribution to the fund, it may be noted,
constitutes only an insignificant portion thereof. Then, the benefits are specifically declared not
transferable,6 and exempted from tax legal processes, and lien.7 Furthermore, in the settlement of claims
thereunder the procedure to be observed is governed not by the general provisions of law, but by rules
and regulations promulgated by the Commission. Thus, if the money is payable to the estate of a
deceased member, it is the Commission, not the probate or regular court that determines the person or
persons to whom it is payable.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, as follows:

SEC. 15. Non-transferability of benefit. — 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. Such
benefits are not transferable, and no power of attorney or other document executed by those
entitled thereto in favor of any agent, attorney, 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, however, That in the case of death benefits, if no beneficiary
has been designated or the designation there of is void, said benefits shall be paid to the legal
heirs in accordance with the laws of succession. (Rep. Act 2658, amending Rep. Act 1161.)

In short, if there is a named beneficiary and the designation is not invalid (as it is not so in this case), it is
not the heirs of the employee who are entitled to receive the benefits (unless they are the designated
beneficiaries themselves). It is only when there is no designated beneficiaries or when the designation is
void, that the laws of succession are applicable. And we have already held that the Social Security Act is
not a law of succession.9

Wherefore, in view of the foregoing considerations, the resolution of the Social Security Commission
appealed from is hereby affirmed, with costs against the appellant.

So ordered.
 Republic of the Philippines
SUPREME COURT
Manila

DDDDDD

THIRD DIVISION

G.R. No. 164790             August 29, 2008

SOCIAL SECURITY SYSTEM and LORELIE B. SOLIDUM, Branch Manager, Cubao Branch, petitioner,
vs.
GLORIA DE LOS SANTOS, respondent.

DECISION

REYES, R.T., J.:

AN ESTRANGED wife who was not dependent upon her deceased husband for support is not qualified to be his
beneficiary.

The principle is applied in this petition for review on certiorari of the Decision1 of the Court of Appeals (CA), awarding
benefits to respondent Gloria de los Santos.

The Facts

Antonio de los Santos and respondent Gloria de los Santos, both Filipinos, were married on April 29, 1964 in Manila.
Less than one (1) year after, in February 1965, Gloria left Antonio and contracted another marriage with a certain
Domingo Talens in Nueva Ecija. Sometime in 1969, Gloria went back to Antonio and lived with him until 1983. They
had three children: Alain Vincent, Arlene, and Armine.

In 1983, Gloria left Antonio and went to the United States (US). On May 8, 1986, she filed for divorce against Antonio
with the Superior Court of Orange, Sta. Ana, California. On May 21, 1983, she executed a document waiving all her
rights to their conjugal properties and other matters. The divorce was granted on November 5, 1986.

On May 23, 1987, Antonio married Cirila de los Santos in Camalig, Albay. Their union produced one child, May-Ann
N. de los Santos, born on May 15, 1989. On her part, Gloria married Larry Thomas Constant, an American citizen, on
July 11, 1987, in the US.

On May 15, 1989, Antonio amended his records at the Social Security System (SSS). He changed his beneficiaries
from Mrs. Margarita de los Santos to Cirila de los Santos; from Gloria de los Santos to May-Ann de los Santos; and
from Erlinda de los Santos to Armine de los Santos.

Antonio retired from his employment on March 1, 1996, and from then on began receiving monthly pension. He died
of respiratory failure on May 15, 1999. Upon his death, Cirila applied for and began receiving his SSS pension
benefit, beginning December 1999.

On December 21, 1999, Gloria filed a claim for Antonio’s death benefits with the SSS Cubao Branch. Her claim was
denied because she was not a qualified beneficiary of Antonio. The SSS letter of denial dated September 1, 2000
stated:

We regret to inform you that your claim is denied for the following reason/s:
 We received documents showing that you have remarried in the United States to one Larry T. Constant. You
were also the one who filed for petition for dissolution of your marriage with the deceased member, which
was in fact granted by the Superior Court of California, County of Orange.

These circumstances are sufficient ground for denial as the SSS law specifically defines beneficiaries as
"the dependent spouse, until he or she remarries, the dependent legitimate, legitimated or legally adopted
and illegitimate children who shall be the primary beneficiary." x x x2

SSC Disposition

Gloria elevated her claim to the Social Security Commission (SSC). On February 12, 2001, she filed a petition to
claim death benefits, with a prayer that she be declared the rightful beneficiary of the deceased Antonio.3

The SSC motu proprio impleaded Cirila as respondent in the case, it appearing that she was another claimant to the
death benefits of Antonio. Upon receipt of the summons, Cirila moved to dismiss the petition of Gloria. She argued
that Gloria had no personality to sue because the latter is neither a dependent nor a beneficiary of Antonio, as
evidenced by the E-4 form accomplished and submitted by him when he was still alive. Gloria had also remarried an
American citizen in the US. And that she, Cirila, was the true and legal wife of Antonio.

Cirila likewise reasoned out that the authority to determine the validity of the two marriages of Antonio lay with the
regular courts. Since Gloria had already filed for settlement of the intestate estate of Antonio before the Regional Trial
Court (RTC), the petition she filed with the SSC should be considered as forum shopping.

Gloria opposed the motion to dismiss. She contended that her marriage to Larry Constant was not the subsequent
marriage contemplated under the Social Security Law (SS Law)4 that would disqualify her as a beneficiary; that the
decree of divorce issued by a foreign state involving Filipino citizens has no validity and effect under Philippine law.
Lastly, Gloria remonstrated that there was no forum shopping because the petition she filed before the RTC did not
involve the issue of her entitlement to SSS benefits.

The SSC denied the motion to dismiss. After submission of position papers from both sides, it issued a Resolution,
dated February 13, 2002,5 dismissing Gloria’s petition with the following disposition:

WHEREFORE, this Commission finds, and so holds, that May-Ann de los Santos, daughter of Antonio and
private respondent Cirila de los Santos is the secondary beneficiary of the former and as such, she is
entitled to the balance of her father’s five-year guaranteed pension.

Accordingly, the SSS is hereby ordered to compute the balance of the five-year guaranteed pension less the
amount of P21,200 representing the total of the monthly pensions and dependent’s pension previously
received by private respondent Cirila Nimo and minor May-Ann de los Santos, respectively, and to pay the
latter, through her natural guardian Cirila Nimo, the difference between the two amounts, if any. If there was
overpayment of pension, the private respondent is hereby ordered to forthwith refund the amount thereof to
the SSS.

The petition is dismissed for lack of merit.

SO ORDERED.6

The SSC deemed that Gloria abandoned Antonio when she obtained a divorce against him abroad and subsequently
married another man. She thus failed to satisfy the requirement of dependency required of primary beneficiaries
under the law. The Commission likewise rejected her efforts to use the invalidity of the divorce, which she herself
obtained, to claim benefits from the SSS for her personal profit.

However, despite all the sophistry with which petitioner, through her counsel, sought to justify her acts in the
USA, the petition must fail. The petitioner, who was primarily responsible for obtaining the decree of marital
dissolution from an American court, now wishes to invoke the very invalidity of her divorce and subsequent
marriage in order to lay hands on the benefit she seeks. It is sheer folly, if not downright reprehensible, for
the petitioner to seek to profit from committing an act considered as unlawful under Philippine law. This
 Commission will not allow itself to be used as an instrument to subvert the policies laid down in the SS Law
which it has sworn to uphold at all times. x x x7 (Emphasis added)

The SSC added that since the marriage of Antonio to Cirila was void, the latter was likewise not a qualified
beneficiary. The fruit of their union, May-Ann, was considered as an illegitimate child and qualified as a secondary
beneficiary. May-Ann was entitled to 50% of the share of the legitimate children of Antonio in accordance with Section
8(k) of the SS Law.8 However, considering that the legitimate children of Antonio have reached the age of majority,
May-Ann is the only remaining qualified beneficiary and was thus entitled to 100% of the benefit.

R.A. No. 8282, which is the law in force at the time of retiree Antonio’s death on May 15, 1999, provides as follows:

"Section 12-B. Retirement Benefits. x x x

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his
retirement shall be entitled to receive the monthly pension. Provided, That if he has no primary
beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his
secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly
pensions corresponding to the balance of the five-year guaranteed period, excluding the
dependents’ pension." (Emphasis supplied)

Since Antonio de los Santos retired on March 1, 1996, and began receiving monthly pension since then, the
determination of who his primary beneficiaries were at that times should be based on the relevant provisions
of the applicable prevailing law then, R.A. No. 1161, as amended, which is quoted hereunder:

"Section 8. Terms Defined. x x x

xxxx

(k) Beneficiaries. – The dependent spouse until he remarries and dependent children who shall be
the primary beneficiaries. In their absence, the dependent parents, and subject to the restrictions
imposed on dependent children, the legitimate descendants and illegitimate children who shall be
the secondary beneficiaries. In the absence of any of the foregoing, any other person designed by
the covered employee as secondary beneficiary." (Emphasis supplied)

Applying these provisions to the case at hand, May-Ann de los Santos as the illegitimate child of Antonio
and Cirila is considered her father’s secondary beneficiary who, in the absence of a primary beneficiary x x
x, becomes entitled to the balance of the five-year guaranteed pension as Antonio died just three (3) years
after he began receiving his retirement pension, pursuant to Section 12-B par. (d) of the SS Law, as
amended.9

CA Decision

Gloria appealed the above SSC Resolution to the CA. She insisted that she, as the legal wife, was the qualified
beneficiary to Antonio’s death benefits.

The CA agreed with the SSC in its determination that the marriage of Gloria and Antonio subsisted until his death and
the subsequent marriages contracted by both of them were void for being bigamous. But contrary to findings of the
SSC, the CA found that being the legal wife, Gloria was entitled by law to receive support from her husband. Thus,
her status qualified Gloria to be a dependent and a primary beneficiary under the law. The dispositive portion of the
CA decision reads:

WHEREFORE, in the light of the foregoing, the Petition for Review is GRANTED and the appealed
Resolution dated February 13, 2003, is hereby REVERSED and SET ASIDE. Respondent SSS is
DIRECTED to compute the amount of benefits to which petitioner is entitled under the law.10

Issues
Petitioner SSS and the concerned Branch head present a lone issue for Our consideration: THE HONORABLE
COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENT IS STILL QUALIFIED AS A
PRIMARY BENEFICIARY OF DECEASED SSS MEMBER ANTONIO, UNDER SECTION 12-B IN RELATION TO
SECTION 8(e) and (k) OF THE SS LAW.11

The controversy revolves on who between respondent Gloria, the first wife who divorced Antonio in the US, or Cirila,
the second wife, is his primary beneficiary entitled to claim death benefits from the SSS.

Our Ruling

At the outset, let it be recalled that in 2005, this Court ruled in Dycaico v. Social Security System12 that the proviso "as
of the date of retirement" in Section 12-B(d) of Republic Act No. 8282,13 which qualifies the term "primary
beneficiaries," is unconstitutional for it violates the due process and equal protection clauses. For ready reference,
the concerned provision is reproduced below:

SECTION 12-B. Retirement Benefits. – (a) A member who has paid at least one hundred twenty (120)
monthly contributions prior to the semester of retirement and who (1) has reached the age of sixty (60) years
and is already separated from employment or has ceased to be self-employed or (2) has reached the age of
sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension; Provided, That he shall
have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential
rate of interest to be determined by the SSS.

xxxx

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be
entitled to receive the monthly pension; Provided, That if he has no primary beneficiaries and he dies within
sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year
guaranteed period, excluding the dependents’ pension. (Emphasis added)

In deciding that death benefits should not be denied to the wife who was married to the deceased retiree only after
the latter’s retirement, this Court in Dycaico reasoned:

x x x In particular, the proviso was apparently intended to prevent sham marriages or those contracted by
persons solely to enable one spouse to claim benefits upon the anticipated death of the other spouse.

x x x However, classifying dependent spouses and determining their entitlement to survivor’s pension based
on whether the marriage was contracted before or after the retirement of the other spouse, regardless of the
duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e.,
"provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness,
maternity, old age, death and other contingencies resulting in loss of income or financial burden." x x x14

That said, the reckoning point in determining the beneficiaries of the deceased Antonio should be the time of his
death. There is no need to look into the time of his retirement, as was the course followed by the SSC in resolving the
claim of respondent. We note, however, that considering the circumstances of this case, the Dycaico ruling does not
substantially affect the determination of Antonio’s beneficiaries.

The SS Law clearly and expressly provides who are the qualified beneficiaries entitled to receive benefits from the
deceased:

"Section 8. Terms Defined. – For the purposes of this Act, the following terms shall, unless the context indicates
otherwise, have the following meanings:

xxxx

(e) Dependents – The dependents shall be the following:

 (1) The legal spouse entitled by law to receive support from the member;

(2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not
gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21)
years of age, he is congenitally or while still a minor has been permanently incapacitated and
incapable of self-support, physically or mentally; and

(3) The parent who is receiving regular support from the member.

xxxx

(k) Beneficiaries – The dependent spouse until he or she remarries, the dependent legitimate, legitimated or
legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided,
That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate,
legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate,
legitimated or legally adopted children of the member, his/her dependent illegitimate children shall be
entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be
the secondary beneficiaries of the member. In the absence of all of the foregoing, any other person
designated by the member as his/her secondary beneficiary.

As found by both the SSC and the CA, the divorce obtained by respondent against the deceased Antonio was not
binding in this jurisdiction. Under Philippine law, only aliens may obtain divorces abroad, provided they are valid
according to their national law.15 The divorce was obtained by respondent Gloria while she was still a Filipino citizen
and thus covered by the policy against absolute divorces. It did not sever her marriage ties with Antonio.

However, although respondent was the legal spouse of the deceased, We find that she is still disqualified to be his
primary beneficiary under the SS Law. She fails to fulfill the requirement of dependency upon her deceased husband
Antonio.

Social Security System v. Aguas16 is instructive in determining the extent of the required "dependency" under the SS
Law. In Aguas, the Court ruled that although a husband and wife are obliged to support each other, whether one is
actually dependent for support upon the other cannot be presumed from the fact of marriage alone.17

Further, Aguas pointed out that a wife who left her family until her husband died and lived with other men,
was not dependent upon her husband for support, financial or otherwise, during the entire period.

Said the Court:

In a parallel case involving a claim for benefits under the GSIS law, the Court defined a dependent as "one
who derives his or her main support from another. Meaning, relying on, or subject to, someone else for
support; not able to exist or sustain oneself, or to perform anything without the will, power, or aid of someone
else." It should be noted that the GSIS law likewise defines a dependent spouse as "the legitimate spouse
dependent for support upon the member or pensioner." In that case, the Court found it obvious that a wife
who abandoned the family for more than 17 years until her husband died, and lived with other men, was not
dependent on her husband for support, financial or otherwise, during that entire period. Hence, the Court
denied her claim for death benefits.

The obvious conclusion then is that a wife who is already separated de facto from her husband cannot be
said to be "dependent for support" upon the husband, absent any showing to the contrary. Conversely, if it is
proved that the husband and wife were still living together at the time of his death, it would be safe to
presume that she was dependent on the husband for support, unless it is shown that she is capable of
providing for herself.18

Respondent herself admits that she left the conjugal abode on two (2) separate occasions, to live with two different
men. The first was in 1965, less than one year after their marriage, when she contracted a second marriage to
Domingo Talens. The second time she left Antonio was in 1983 when she went to the US, obtained a divorce, and
later married an American citizen.
In fine, these uncontroverted facts remove her from qualifying as a primary beneficiary of her deceased husband.

WHEREFORE, the petition is GRANTED and the appealed Decision REVERSED and SET ASIDE. The Resolution of
the Social Security Commission is REINSTATED.SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 173582             January 28, 2008

YOLANDA SIGNEY, petitioner,
vs.
SOCIAL SECURITY SYSTEM, EDITHA ESPINOSA-CASTILLO, and GINA SERVANO, representative
of GINALYN and RODELYN SIGNEY, respondents.

DECISION

TINGA, J.:

We are called to determine who is entitled to the social security benefits of a Social Security System
(SSS) member who was survived not only by his legal wife, but also by two common-law wives with
whom he had six children.

This Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure assails the 31
March 2004 Decision2 of the Court of Appeals affirming the resolution of the Social Security Commission
(SSC),3 as well as the 23 July 2004 Resolution4 of the same court denying petitioner’s motion for
reconsideration.

The facts as culled from the records are as follows:

Rodolfo Signey, Sr., a member of the SSS, died on 21 May 2001. In his member’s records, he had
designated Yolanda Signey (petitioner) as primary beneficiary and his four children with her as secondary
beneficiaries. On 6 July 2001, petitioner filed a claim for death benefits with the public respondent
SSS.5 She revealed in her SSS claim that the deceased had a common-law wife, Gina Servano (Gina),
with whom he had two minor children namey, Ginalyn Servano (Ginalyn), born on 13 April 1996, and
Rodelyn Signey (Rodelyn), born on 20 April 2000.6

Petitioner’s declaration was confirmed when Gina herself filed a claim for the same death benefits on 13
July 2001 in which she also declared that both she and petitioner were common-law wives of the
deceased and that Editha Espinosa (Editha) was the legal wife.

In addition, in October 2001, Editha also filed an application for death benefits with the SSS stating that
she was the legal wife of the deceased.7

The SSS, through a letter dated 4 December 2001, 8 denied the death benefit claim of petitioner. However,
it recognized Ginalyn and Rodelyn, the minor children of the deceased with Gina, as the primary
beneficiaries under the SSS Law. The SSS also found that the 20 March 1992 marriage between
petitioner and the deceased was null and void because of a prior subsisting marriage contracted on 29
October 1967 between the deceased and Editha, as confirmed with the Local Civil Registry of Cebu City.
Thereafter, petitioner filed a petition9 with the SSC in which she attached a waiver of rights10 executed by
Editha whereby the latter waived "any/all claims from National Trucking Forwarding Corporation (NTFC)
under the supervision of National Development Corporation (NDC), Social Security System (SSS) and
other (i)nsurance (b)enefits due to the deceased Rodolfo Signey Sr., who died intestate on May 21, 2001
at Manila Doctors," and further declared that "I am legally married to Mr. Aquilino Castillo and not to Mr.
Rodolfo P. Signey Sr."11

In a Resolution12 dated 29 January 2003, the SSC affirmed the decision of the SSS. The SSC gave more
weight to the SSS field investigation and the confirmed certification of marriage showing that the
deceased was married to Editha on 29 October 1967, than to the aforestated declarations of Editha in her
waiver of rights. It found that petitioner only relied on the waiver of Editha, as she failed to present any
evidence to invalidate or otherwise controvert the confirmed marriage certificate. The SSC also found,
based on the SSS field investigation report dated 6 November 2001 that even if Editha was the legal wife,
she was not qualified to the death benefits since she herself admitted that she was not dependent on her
deceased husband for support inasmuch as she was cohabiting with a certain Aquilino Castillo. 13

Considering that petitioner, Editha, and Gina were not entitled to the death benefits, the SSC applied
Section 8(e) and (k) of Republic Act (RA) No. 8282, the SSS Law which was in force at the time of the
member’s death on 21 May 2001, and held that the dependent legitimate and illegitimate minor children of
the deceased member were also considered primary beneficiaries. The records disclosed that the
deceased had one legitimate child, Ma. Evelyn Signey, who predeceased him, and several illegitimate
children with petitioner and with Gina. Based on their respective certificates of live birth, the deceased
SSS member’s four illegitimate children with petitioner could no longer be considered dependents at the
time of his death because all of them were over 21 years old when he died on 21 May 2001, the youngest
having been born on 31 March 1978. On the other hand, the deceased SSS member’s illegitimate
children with Gina were qualified to be his primary beneficiaries for they were still minors at the time of his
death, Ginalyn having been born on 13 April 1996, and Rodelyn on 20 April 2000. 14

The SSC denied the motion for reconsideration filed by petitioner in an Order 15 dated 9 April 2003. This
order further elaborated on the reasons for the denial of petitioner’s claims. It held that the mere
designation of petitioner and her children as beneficiaries by the deceased member was not the
controlling factor in the determination of beneficiaries. Sections 13, 8(e) and 8(k) of the SSS Law, as
amended, provide that dependent legal spouse entitled by law to receive support from the member and
dependent legitimate, legitimated or legally adopted, and illegitimate children of the member shall be the
primary beneficiaries of the latter.16 Based on the certification dated 25 July 2001 issued by the Office of
the Local Civil Registrar of Cebu City, the marriage of the deceased and Editha on 29 October 1967 at
the Metropolitan Cathedral, Cebu City was duly registered under LCR Registry No. 2083 on 21 November
1967. The SSS field investigation reports verified the authenticity of the said certification. 17

The SSC did not give credence to the waiver executed by Editha, which manifested her lack of interest in
the outcome of the case, considering that she was not entitled to the benefit anyway because of her
admitted cohabitation with Aquilino Castillo. Moreover, the SSC held that considering that one of the
requisites of a valid waiver is the existence of an actual right which could be renounced, petitioner in
effect recognized that Editha had a right over the benefits of the deceased thereby enabling her to
renounce said right in favor of petitioner and her children. The declaration by Editha that she was not
married to the deceased is not only contrary to the records of the Local Civil Registrar of Cebu City which
state that they were married on 29 October 1967 but also renders nugatory the waiver of right itself, for if
she was not married to the deceased then she would have no rights that may be waived.

Petitioner had argued that the illegitimate children of the deceased with Gina failed to show proof that
they were indeed dependent on the deceased for support during his lifetime. The SSC observed that
Section 8(e) of the SSS Law, as amended, provides among others that dependents include the legitimate,
legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not
reached 21 years of age. The provision vested the right of the benefit to his illegitimate minor children,
Ginalyn and Rodelyn, irrespective of any proof that they had been dependent on the support of the
deceased.18

Petitioner appealed the judgment of the SSC to the Court of Appeals by filing a Petition for Review 19 under
Rule 43 of the 1997 Rules of Civil Procedure. The appellate court affirmed the decision of the SSC in its
31 March 2004 Decision. Resolving the determinative question of who between petitioner and the
illegitimate children of the deceased are the primary beneficiaries lawfully entitled to the social security
benefits accruing by virtue of the latter’s death, it held that based on Section 8(e) of R. A. No. 8282, a
surviving spouse claiming death benefits as a dependent must be the legal spouse. Petitioner’s
presentation of a marriage certificate attesting to her marriage to the deceased was futile, according to
the appellate court, as said marriage is null and void in view of the previous marriage of the deceased to
Editha as certified by the Local Civil Registrar of Cebu City.

The appellate court also held that the law is clear that for a child to be qualified as dependent, he must be
unmarried, not gainfully employed and must not be 21 years of age, or if over 21 years of age, he is
congenitally or while still a minor has been permanently incapacitated and incapable of self-support,
physically or mentally. And in this case, only the illegitimate children of the deceased with Gina namely,
Ginalyn and Rodelyn, are the qualified beneficiaries as they were still minors at the time of the death of
their father. Considering petitioner is disqualified to be a beneficiary and the absence of any legitimate
children of the deceased, it follows that the dependent illegitimate minor children of the deceased should
be entitled to the death benefits as primary beneficiaries, the Court of Appeals concluded. 20

The Court of Appeals denied the motion for reconsideration of petitioner in a Resolution 21 dated 23 July
2004. It found that there was no new matter of substance which would warrant a modification and/or
reversal of the 31 March 2004 Decision.

Hence, this petition for review on certiorari.

Petitioner raises issues similar to the ones which have been adequately resolved by the SSC and the
appellate court. The first issue is whether petitioner’s marriage with the deceased is valid. The second
issue is whether petitioner has a superior legal right over the SSS benefits as against the illegitimate
minor children of the deceased.

There is no merit in the petition.

We deemed it best not to disturb the findings of fact of the SSS which are supported by substantial
evidence22 and affirmed by the SSC and the Court of Appeals. Moreover, petitioner ought to be reminded
of the basic rule that this Court is not a trier of facts. 23

It is a well-known rule that in proceedings before administrative bodies, technical rules of procedure and
evidence are not binding.24 The important consideration is that both parties were afforded an opportunity
to be heard and they availed themselves of it to present their respective positions on the matter in
dispute.25 It must likewise be noted that under Section 2, Rule 1 26 of the SSC Revised Rules of Procedure,
the rules of evidence prevailing in the courts of law shall not be controlling. In the case at bar, the
existence of a prior subsisting marriage between the deceased and Editha is supported by substantial
evidence. Petitioner, who has fully availed of her right to be heard, only relied on the waiver of Editha and
failed to present any evidence to invalidate or otherwise controvert the confirmed marriage certificate
registered under LCR Registry No. 2083 on 21 November 1967. She did not even try to allege and prove
any infirmity in the marriage between the deceased and Editha.

As to the issue of who has the better right over the SSS death benefits, Section 8(e) and (k) of R. A. No.
828227 is very clear. Hence, we need only apply the law. Under the principles of statutory construction, if a
statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without
attempted interpretation. This plain meaning rule or verba legis, derived from the maxim index animi
sermo est (speech is the index of intention), rests on the valid presumption that the words employed by
the legislature in a statute correctly express its intent by the use of such words as are found in the
statute. Verba legis non est recedendum, or, from the words of a statute there should be no departure. 28

Section 8(e) and (k) of R.A. No. 8282 provides:

SEC. 8. Terms Defined.—For the purposes of this Act, the following terms shall, unless the
context indicates otherwise, have the following meanings:

xxx

(e) Dependents — The dependent shall be the following:

(1) The legal spouse entitled by law to receive support from the member;

2) The legitimate, legitimated, or legally adopted, and illegitimate child who is unmarried, not
gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one
(21) years of age, he is congenitally or while still a minor has been permanently incapacitated
and incapable of self-support, physically or mentally; and

3) The parent who is receiving regular support from the member.

xxx

(k) Beneficiaries — The dependent spouse until he or she remarries, the dependent legitimate,
legitimated or legally adopted, and illegitimate children, who shall be the primary
beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled
to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted
children: Provided, further, That in the absence of the dependent legitimate, legitimated or legally
adopted children of the member, his/her dependent illegitimate children shall be entitled to one
hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be
the secondary beneficiaries of the member. In the absence of all of the foregoing, any other
person designated by the member as his/her secondary beneficiary.

SEC. 13. Death Benefits. — Upon the death of a member who has paid at least thirty-six (36)
monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled
to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly
pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or
secondary beneficiaries 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, whichever is higher. (Emphasis supplied).

Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by
substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no
legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled
to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a
"dependent,29" the only requirements are that he/she must be below 21 years of age, not married nor
gainfully employed.30

In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996 and 20 April
2000, respectively. Had the legitimate child of the deceased and Editha survived and qualified as a
dependent under the SSS Law, Ginalyn and Rodelyn would have been entitled to a share equivalent to
only 50% of the share of the said legitimate child. Since the legitimate child of the deceased predeceased
him, Ginalyn and Rodelyn, as the only qualified primary beneficiaries of the deceased, are entitled to
100% of the benefits.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Cost against
petitioner.SO ORDERED.

THIRD DIVISION

G.R. No. 165545             March 24, 2006

SOCIAL SECURITY SYSTEM, Petitioner,

vs.
TERESITA JARQUE VDA. DE BAILON, Respondent.

DECISION

CARPIO MORALES,J.:

The Court of Appeals Decision1 dated June 23, 20042 and Resolution dated September 28,
20043 reversing the Resolution dated April 2, 20034 and Order dated June 4, 20035 of the Social Security
Commission (SSC) in SSC Case No. 4-15149-01 are challenged in the present petition for review on
certiorari.

On April 25, 1955, Clemente G. Bailon (Bailon) and Alice P. Diaz (Alice) contracted marriage in
Barcelona, Sorsogon.6

More than 15 years later or on October 9, 1970, Bailon filed before the then Court of First Instance (CFI)
of Sorsogon a petition7 to declare Alice presumptively dead.

By Order of December 10, 1970,8 the CFI granted the petition, disposing as follows:

WHEREFORE, there being no opposition filed against the petition notwithstanding the publication of the
Notice of Hearing in a newspaper of general circulation in the country, Alice Diaz is hereby declared to
[sic] all legal intents and purposes, except for those of succession, presumptively dead.

SO ORDERED.9 (Underscoring supplied)

Close to 13 years after his wife Alice was declared presumptively dead or on August 8, 1983, Bailon
contracted marriage with Teresita Jarque (respondent) in Casiguran, Sorsogon. 10

On January 30, 1998, Bailon, who was a member of the Social Security System (SSS) since 1960 and a
retiree pensioner thereof effective July 1994, died.11
Respondent thereupon filed a claim for funeral benefits, and was granted P12,00012 by the SSS.

Respondent filed on March 11, 1998 an additional claim for death benefits 13 which was also granted by
the SSS on April 6, 1998.14

Cecilia Bailon-Yap (Cecilia), who claimed to be a daughter of Bailon and one Elisa Jayona (Elisa)
contested before the SSS the release to respondent of the death and funeral benefits. She claimed that
Bailon contracted three marriages in his lifetime, the first with Alice, the second with her mother Elisa, and
the third with respondent, all of whom are still alive; she, together with her siblings, paid for Bailon’s
medical and funeral expenses; and all the documents submitted by respondent to the SSS in support of
her claims are spurious.

In support of her claim, Cecilia and her sister Norma Bailon Chavez (Norma) submitted an Affidavit dated
February 13, 199915 averring that they are two of nine children of Bailon and Elisa who cohabited as
husband and wife as early as 1958; and they were reserving their right to file the necessary court action
to contest the marriage between Bailon and respondent as they personally know that Alice is "still very
much alive."16

In the meantime, on April 5, 1999, a certain Hermes P. Diaz, claiming to be the brother and guardian of
"Aliz P. Diaz," filed before the SSS a claim for death benefits accruing from Bailon’s death, 17 he further
attesting in a sworn statement18 that it was Norma who defrayed Bailon’s funeral expenses.

Elisa and seven of her children19 subsequently filed claims for death benefits as Bailon’s beneficiaries
before the SSS.20

Atty. Marites C. de la Torre of the Legal Unit of the SSS Bicol Cluster, Naga City recommended the
cancellation of payment of death pension benefits to respondent and the issuance of an order for the
refund of the amount paid to her from February 1998 to May 1999 representing such benefits; the denial
of the claim of Alice on the ground that she was not dependent upon Bailon for support during his lifetime;
and the payment of the balance of the five-year guaranteed pension to Bailon’s beneficiaries according to
the order of preference provided under the law, after the amount erroneously paid to respondent has
been collected. The pertinent portions of the Memorandum read:

1. Aliz [sic] Diaz never disappeared. The court must have been misled by misrepresentation in
declaring the first wife, Aliz [sic] Diaz, as presumptively dead.

xxxx

x x x the Order of the court in the "Petition to Declare Alice Diaz Presumptively Dead," did not
become final. The presence of Aliz [sic] Diaz, is contrary proof that rendered it invalid.

xxxx

3. It was the deceased member who abandoned his wife, Aliz [sic] Diaz. He, being in bad faith,
and is the deserting spouse, his remarriage is void, being bigamous.

xxxx

In this case, it is the deceased member who was the deserting spouse and who remarried, thus his
marriage to Teresita Jarque, for the second time was void as it was bigamous. To require affidavit of
reappearance to terminate the second marriage is not necessary as there is no disappearance of Aliz [sic]
Diaz, the first wife, and a voidable marriage [sic], to speak of. 21 (Underscoring supplied)
In the meantime, the SSS Sorsogon Branch, by letter of August 16, 2000, 22 advised respondent that as
Cecilia and Norma were the ones who defrayed Bailon’s funeral expenses, she should return the P12,000
paid to her.

In a separate letter dated September 7, 1999,23 the SSS advised respondent of the cancellation of her
monthly pension for death benefits in view of the opinion rendered by its legal department that her
marriage with Bailon was void as it was contracted while the latter’s marriage with Alice was still
subsisting; and the December 10, 1970 CFI Order declaring Alice presumptively dead did not become
final, her "presence" being "contrary proof" against the validity of the order. It thus requested respondent
to return the amount of P24,000 representing the total amount of monthly pension she had received from
the SSS from February 1998 to May 1999.

Respondent protested the cancellation of her monthly pension for death benefits by letter to the SSS
dated October 12, 1999.24 In a subsequent letter dated November 27, 1999 25 to the SSC, she reiterated
her request for the release of her monthly pension, asserting that her marriage with Bailon was not
declared before any court of justice as bigamous or unlawful, hence, it remained valid and subsisting for
all legal intents and purposes as in fact Bailon designated her as his beneficiary.

The SSS, however, by letter to respondent dated January 21, 2000, 26 maintained the denial of her claim
for and the discontinuance of payment of monthly pension. It advised her, however, that she was not
deprived of her right to file a petition with the SSC.

Respondent thus filed a petition27 against the SSS before the SSC for the restoration to her of her
entitlement to monthly pension.

In the meantime, respondent informed the SSS that she was returning, under protest, the amount
of P12,000 representing the funeral benefits she received, she alleging that Norma and her siblings
"forcibly and coercively prevented her from spending any amount during Bailon’s wake." 28

After the SSS filed its Answer29 to respondent’s petition, and the parties filed their respective Position
Papers, one Alicia P. Diaz filed an Affidavit30 dated August 14, 2002 with the SSS Naga Branch attesting
that she is the widow of Bailon; she had only recently come to know of the petition filed by Bailon to
declare her presumptively dead; it is not true that she disappeared as Bailon could have easily located
her, she having stayed at her parents’ residence in Barcelona, Sorsogon after she found out that Bailon
was having an extramarital affair; and Bailon used to visit her even after their separation.

By Resolution of April 2, 2003, the SSC found that the marriage of respondent to Bailon was void and,
therefore, she was "just a common-law-wife." Accordingly it disposed as follows, quoted verbatim:

WHEREFORE, this Commission finds, and so holds, that petitioner Teresita Jarque-Bailon is not the
legitimate spouse and primary beneficiary of SSS member Clemente Bailon.

Accordingly, the petitioner is hereby ordered to refund to the SSS the amount of P24,000.00 representing
the death benefit she received therefrom for the period February 1998 until May 1999 as well
as P12,000.00 representing the funeral benefit.

The SSS is hereby ordered to pay Alice (a.k.a. Aliz) Diaz-Bailon the appropriate death benefit arising from
the demise of SSS member Clemente Bailon in accordance with Section 8(e) and (k) as well as Section
13 of the SS Law, as amended, and its prevailing rules and regulations and to inform this Commission of
its compliance herewith.

SO ORDERED.31 (Underscoring supplied)
In so ruling against respondent, the SSC ratiocinated.

After a thorough examination of the evidence at hand, this Commission comes to the inevitable
conclusion that the petitioner is not the legitimate wife of the deceased member.

xxxx

There is x x x ample evidence pointing to the fact that, contrary to the declaration of the then CFI of
Sorsogon (10th Judicial District), the first wife never disappeared as the deceased member represented in
bad faith. This Commission accords credence to the findings of the SSS contained in its Memorandum
dated August 9, 1999,32 revealing that Alice (a.k.a. Aliz) Diaz never left Barcelona, Sorsogon, after her
separation from Clemente Bailon x x x.

As the declaration of presumptive death was extracted by the deceased member using artifice and by
exerting fraud upon the unsuspecting court of law, x x x it never had the effect of giving the deceased
member the right to marry anew. x x x [I]t is clear that the marriage to the petitioner is void, considering
that the first marriage on April 25, 1955 to Alice Diaz was not previously annulled, invalidated or otherwise
dissolved during the lifetime of the parties thereto. x x x as determined through the investigation
conducted by the SSS, Clemente Bailon was the abandoning spouse, not Alice Diaz Bailon.

xxxx

It having been established, by substantial evidence, that the petitioner was just a common-law wife of the
deceased member, it necessarily follows that she is not entitled as a primary beneficiary, to the latter’s
death benefit. x x x

xxxx

It having been determined that Teresita Jarque was not the legitimate surviving spouse and primary
beneficiary of Clemente Bailon, it behooves her to refund the total amount of death benefit she
received from the SSS for the period from February 1998 until May 1999 pursuant to the principle
of solutio indebiti x x x

Likewise, it appearing that she was not the one who actually defrayed the cost of the wake and burial of
Clemente Bailon, she must return the amount of P12,000.00 which was earlier given to her by the SSS as
funeral benefit.33 (Underscoring supplied)

Respondent’s Motion for Reconsideration34 having been denied by Order of June 4, 2003, she filed a
petition for review35 before the Court of Appeals (CA).

By Decision of June 23, 2004, the CA reversed and set aside the April 2, 2003 Resolution and June 4,
2003 Order of the SSC and thus ordered the SSS to pay respondent all the pension benefits due her.
Held the CA:

x x x [T]he paramount concern in this case transcends the issue of whether or not the decision of the then
CFI, now RTC, declaring Alice Diaz presumptively dead has attained finality but, more
importantly, whether or not the respondents SSS and Commission can validly re-evaluate the findings of
the RTC, and on its own, declare the latter’s decision to be bereft of any basis. On similar import, can
respondents SSS and Commission validly declare the first marriage subsisting and the second marriage
null and void?

xxxx
x x x while it is true that a judgment declaring a person presumptively dead never attains finality as the
finding that "the person is unheard of in seven years is merely a presumption juris tantum," the second
marriage contracted by a person with an absent spouse endures until annulled. It is only the competent
court that can nullify the second marriage pursuant to Article 87 of the Civil Code and upon the
reappearance of the missing spouse, which action for annulment may be filed. Nowhere does the law
contemplates [sic] the possibility that respondent SSS may validly declare the second marriage null and
void on the basis alone of its own investigation and declare that the decision of the RTC declaring one to
be presumptively dead is without basis.

Respondent SSS cannot arrogate upon itself the authority to review the decision of the regular
courts under the pretext of determining the actual and lawful beneficiaries of its members.
Notwithstanding its opinion as to the soundness of the findings of the RTC, it should extend due credence
to the decision of the RTC absent of [sic] any judicial pronouncement to the contrary. x x x

x x x [A]ssuming arguendo that respondent SSS actually possesses the authority to declare the decision
of the RTC to be without basis, the procedure it followed was offensive to the principle of fair play and
thus its findings are of doubtful quality considering that petitioner Teresita was not given ample
opportunity to present evidence for and her behalf.

xxxx

Respondent SSS is correct in stating that the filing of an Affidavit of Reappearance with the Civil Registry
is no longer practical under the premises. Indeed, there is no more first marriage to restore as the marital
bond between Alice Diaz and Clemente Bailon was already terminated upon the latter’s death. Neither is
there a second marriage to terminate because the second marriage was likewise dissolved by the death
of Clemente Bailon.

However, it is not correct to conclude that simply because the filing of the Affidavit of Reappearance with
the Civil Registry where parties to the subsequent marriage reside is already inutile, the respondent SSS
has now the authority to review the decision of the RTC and consequently declare the second marriage
null and void.36 (Emphasis and underscoring supplied)

The SSC and the SSS separately filed their Motions for Reconsideration 37 which were both denied for lack
of merit.

Hence, the SSS’ present petition for review on certiorari 38 anchored on the following grounds:

THE DECISION OF THE HONORABLE COURT OF APPEALS IS CONTRARY TO LAW.

II

THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AMOUNTING TO

LACK OF JURISDICTION.39

The SSS faults the CA for failing to give due consideration to the findings of facts of the SSC on the prior
and subsisting marriage between Bailon and Alice; in disregarding the authority of the SSC to determine
to whom, between Alice and respondent, the death benefits should be awarded pursuant to Section 5 40 of
the Social Security Law; and in declaring that the SSS did not give respondent due process or ample
opportunity to present evidence in her behalf.
The SSS submits that "the observations and findings relative to the CFI proceedings are of no moment to
the present controversy, as the same may be considered only as obiter dicta in view of the SSC’s finding
of the existence of a prior and subsisting marriage between Bailon and Alice by virtue of which Alice has a
better right to the death benefits."41

The petition fails.

That the SSC is empowered to settle any dispute with respect to SSS coverage, benefits and
contributions, there is no doubt. In so exercising such power, however, it cannot review, much less
reverse, decisions rendered by courts of law as it did in the case at bar when it declared that the
December 10, 1970 CFI Order was obtained through fraud and subsequently disregarded the same,
making its own findings with respect to the validity of Bailon and Alice’s marriage on the one hand and the
invalidity of Bailon and respondent’s marriage on the other.

In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law
does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its
authority to determine the beneficiaries of the SSS.

The two marriages involved herein having been solemnized prior to the effectivity on August 3, 1988 of
the Family Code, the applicable law to determine their validity is the Civil Code which was the law in effect
at the time of their celebration.42

Article 83 of the Civil Code43 provides:

Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first spouse of
such person with any person other than such first spouse shall be illegal and void from its performance,
unless:

(1) The first marriage was annulled or dissolved; or

(2) The first spouse had been absent for seven consecutive years at the time of the second
marriage without the spouse present having news of the absentee being alive, or if the absentee,
though he has been absent for less than seven years, is generally considered as dead and
believed to be so by the spouse present at the time of contracting such subsequent marriage, or if
the absentee is presumed dead according to Articles 390  and 391. The marriage so contracted
shall be valid in any of the three cases until declared null and void by a competent court .
(Emphasis and underscoring supplied)

Under the foregoing provision of the Civil Code, a subsequent marriage contracted during the lifetime of
the first spouse is illegal and void ab initio unless the prior marriage is first annulled or dissolved or
contracted under any of the three exceptional circumstances. It bears noting that the marriage under any
of these exceptional cases is deemed valid "until declared null and void by a competent court." It follows
that the onus probandi in these cases rests on the party assailing the second marriage. 44

In the case at bar, as found by the CFI, Alice had been absent for 15 consecutive years 45 when Bailon
sought the declaration of her presumptive death, which judicial declaration was not even a requirement
then for purposes of remarriage.46

Eminent jurist Arturo M. Tolentino (now deceased) commented:

Where a person has entered into two successive marriages, a presumption arises in favor of the validity
of the second marriage, and the burden is on the party attacking the validity of the second marriage to
prove that the first marriage had not been dissolved; it is not enough to prove the first marriage, for it must
also be shown that it had not ended when the second marriage was contracted. The presumption in
favor of the innocence of the defendant from crime or wrong and of the legality of his second marriage,
will prevail over the presumption of the continuance of life of the first spouse or of the continuance of the
marital relation with such first spouse.47 (Underscoring supplied)

Under the Civil Code, a subsequent marriage being voidable,48 it is terminated by final judgment of
annulment in a case instituted by the absent spouse who reappears or by either of the spouses in the
subsequent marriage.

Under the Family Code, no judicial proceeding to annul a subsequent marriage is necessary. Thus
Article 42 thereof provides:

Art. 42. The subsequent marriage referred to in the preceding Article shall be automatically terminated by
the recording of the affidavit of reappearance of the absent spouse, unless there is a judgment
annulling the previous marriage or declaring it void ab initio.

A sworn statement of the fact and circumstances of reappearance shall be recorded in the civil registry of
the residence of the parties to the subsequent marriage at the instance of any interested person,  with
due notice to the spouses of the subsequent marriage and without prejudice to the fact of
reappearance being judicially determined in case such fact is disputed. (Emphasis and underscoring
supplied)

The termination of the subsequent marriage by affidavit provided by the above-quoted provision of the
Family Code does not preclude the filing of an action in court to prove the reappearance of the absentee
and obtain a declaration of dissolution or termination of the subsequent marriage. 49

If the absentee reappears, but no step is taken to terminate the subsequent marriage, either by affidavit or
by court action, such absentee’s mere reappearance, even if made known to the spouses in the
subsequent marriage, will not terminate such marriage.50 Since the second marriage has been contracted
because of a presumption that the former spouse is dead, such presumption continues inspite of the
spouse’s physical reappearance, and by fiction of law, he or she must still be regarded as legally an
absentee until the subsequent marriage is terminated as provided by law.51

If the subsequent marriage is not terminated by registration of an affidavit of reappearance or by judicial

declaration but by death of either spouse as in the case at bar, Tolentino submits:

x x x [G]enerally if a subsequent marriage is dissolved by the death of either spouse, the effects of
dissolution of valid marriages shall arise. The good or bad faith of either spouse can no longer be raised,
because, as in annullable or voidable marriages, the marriage cannot be questioned except in a direct
action for annulment.52 (Underscoring supplied)

Similarly, Lapuz v. Eufemio53 instructs:

In fact, even if the bigamous marriage had not been void ab initio but only voidable under Article 83,
paragraph 2, of the Civil Code, because the second marriage had been contracted with the first wife
having been an absentee for seven consecutive years, or when she had been generally believed dead,
still the action for annulment became extinguished as soon as one of the three persons involved had died,
as provided in Article 87, paragraph 2, of the Code, requiring that the action for annulment should be
brought during the lifetime of any one of the parties involved. And furthermore, the liquidation of any
conjugal partnership that might have resulted from such voidable marriage must be carried out "in the
testate or intestate proceedings of the deceased spouse," as expressly provided in Section 2 of the
Revised Rule 73, and not in the annulment proceeding. 54 (Emphasis and underscoring supplied)
It bears reiterating that a voidable marriage cannot be assailed collaterally except in a direct proceeding.
Consequently, such marriages can be assailed only during the lifetime of the parties and not after the
death of either, in which case the parties and their offspring will be left as if the marriage had been
perfectly valid.55 Upon the death of either, the marriage cannot be impeached, and is made good ab
initio.56

In the case at bar, as no step was taken to nullify, in accordance with law, Bailon’s and respondent’s
marriage prior to the former’s death in 1998, respondent is rightfully the dependent spouse-beneficiary of
Bailon.

In light of the foregoing discussions, consideration of the other issues raised has been rendered
unnecessary.

WHEREFORE, the petition is DENIED.

No costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 175952             April 30, 2008

SOCIAL SECURITY SYSTEM, petitioner,

vs.
ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC. and SEMIRARA COAL
CORPORATION, respondents.

DECISION

TINGA, J.:

In this Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure, petitioner
Republic of the Philippines represented by the Social Security System (SSS) assails the Decision 2

dated 31 August 2006 of the Eleventh Division of the Court of Appeals and its Resolution 3 dated 19
December 2006 denying petitioner’s Motion for Reconsideration.

Following are the antecedents culled from the decision of the Court of Appeals:

On 13 February 2004, Atlantic Gulf and Pacific Company of Manila, Inc. (AG & P) and Semirara Coal
Corporation (SEMIRARA) (collectively referred to as private respondents) filed a complaint for specific
performance and damages against SSS before the Regional Trial Court of Batangas City, Branch 3,
docketed as Civil Case No. 7441. The complaint alleged that:

xxx

3. Sometime in 2000, plaintiff informed the SSS in writing of its premiums and loan amortization
delinquencies covering the period from January 2000 to May 2000 amounting to P7.3 Million.
AG&P proposed to pay its said arrears by end of 2000, but requested for the condonation of all
penalties;

4. In turn, the defendant suggested two (2) options to AG&P, either to pay by installment or
through "dacion en pago";

5. AG&P chose to settle its obligation with the SSS under the second option, that is
through dacion en pago of its 5,999 sq. m. property situated in Baguio City covered by TCT No.
3941 with an appraised value of about P80.0 Million. SSS proposes to carve-out from the said
property an area sufficient to cover plaintiffs’ delinquencies. AG&P, however, is not amenable to
subdivide its Baguio property;

6. AG&P then made another proposal to SSS. This time, offering as payment a portion of its
58,153 square meter-lot, situated in F.S. Sebastian, Sto. Niño, San Pascual, Batangas. In addition,
SSS informed AG&P of its decision to include other companies within the umbrella of DMCI
group with arrearages with the SSS. In the process of elimination of the companies belonging to
the DMCI group with possible outstanding obligation with the SSS, it was only SEMIRARA
which was left with outstanding delinquencies with the SSS. Thus, SEMIRARA’s inclusion in the
proposed settlement through dacion en pago;

7. AG&P was, thereafter, directed by the defendant to submit certain documents, such as Transfer
Certificate of Title, Tax Declaration covering the subject lot, and the proposed subdivision plan,
which requirements AG&P immediately complied;

8. On April 4, 2001, SSS, in its Resolution No. 270, finally approved AG&P’s proposal to settle
its and SEMIRARA’s delinquencies through dacion en pago, which as of March 31, 2001
amounted to P29,261,902.45. Approval of AG&P’s proposal was communicated to it by Ms.
Aurora E.L. Ortega, Vice-President, NCR-Group of the SSS in a letter dated April 23, 2001. … ;

9. As a result of the approval of the dacion en pago, posting of contributions and loan

amortization to individual member accounts, both for AG&P and SEMIRARA employees, was
effected immediately thereafter. Thus, the benefits of the member-employees of both companies
were restored;

10. From the time of the approval of AG&P’s proposal up to the present, AG&P is (sic)
religiously remitting the premium contributions and loan amortization of its member-employees
to the defendant;

11. To effect the property transfer, a Deed of Assignment has to be executed between the
plaintiffs and the defendant. Because of SSS failure to come up with the required Deed of
Assignment to effect said transfer, AG&P prepared the draft and submitted it to the Office of the
Vice-President – NCR thru SSS Baclaran Branch in July 2001. Unfortunately, the defendant
failed to take any action on said Deed of Assignment causing AG&P to re-submit it to the same
office of the Vice-President – NCR in December 2001. From its original submission of the Deed
of Assignment in July 2001 to its re-submission in December 2001, and SSS returning of the
revised draft in February 28, 2003 AG&P was consistent in its regular follow ups with SSS as to
the status of its submitted Deed of Assignment;

12. On February 28, 2003, or more than a year after the approval of AG&P’s proposal, defendant
sent the revised copy of the Deed of Assignment to AG&P. However, the amount of the
plaintiffs’ obligation appearing in the approved Deed of Assignment has
ballooned from P29,261,902.45 to P40,846,610.64 allegedly because of the additional interests
and penalty charges assessed on plaintiffs’ outstanding obligation from April 2001, the date of
approval of the proposal, up to January 2003;

13. AG&P demanded for the waiver and deletion of the additional interests on the ground that
delay in the approval of the deed and the subsequent delay in conveyance of the property in
defendant’s name was solely attributable to the defendant; hence, to charge plaintiffs with
additional interests and penalties amounting to more than P10,000,000.00, would be
unreasonable….;

14. AG&P and SEMIRARA maintain their willingness to settle their alleged obligation
of P29,261,902.45 to SSS. Defendant, however, refused to accept the payment through dacion en
pago, unless plaintiffs also pay the additional interests and penalties being charged;
 xxx

Instead of filing an answer, SSS moved for the dismissal of the complaint for lack of jurisdiction and non-
exhaustion of administrative remedies. In an order dated 28 July 2004, the trial court granted SSS’s
motion and dismissed private respondents’ complaint. The pertinent portions of the assailed order are as
follows:

Clearly, the motion is triggered on the issue of the court’s jurisdiction over the subject matter and
the nature of the instant complaint. The length and breadth of the complaint as perused, boils
down to the questions of premium and loan amortization delinquencies of the plaintiff, the option
taken for the payment of the same in favor of the defendant and the disagreement between the
parties as to the amount of the unpaid contributions and salary loan repayments. In other words,
said questions are directly related to the collection of contributions due the defendant. Republic
Act No. 1161 as amended by R.A. No. 8282, specifically provides that any dispute arising under
the said Act shall be cognizable by the Commission and any case filed with respect thereto shall
be heard by the Commission. Hence, a procedural process mandated by a special law.

Observingly, the running dispute between plaintiffs and defendant originated from the
disagreement as to the amount of unpaid contributions and the amount of the penalties imposed
appurtenant thereto. The alleged dacion en pago is crystal clear manifestation of offering a
special form of payment which to the mind of the court will produce effect only upon acceptance
by the offeree and the observance and compliance of the required formalities by the parties. No
matter in what form it may be, still the court believes that the subject matter is the payment of
contributions and the corresponding penalties which are within the ambit of Sec. 5 (a) of R.A.
No. 1161, as amended by R.A. No. 8282.

WHEREFORE, the Court having no jurisdiction over the subject matter of the instant complaint,
the motion is granted and this case is hereby ordered DISMISSED.

SO ORDERED.4

Private respondents moved for the reconsideration of the order but the same was denied in an Order dated
15 September 2004.

Consequently, private respondents filed an appeal before the Court of Appeals alleging that the trial court
erred in its pronouncement that it had no jurisdiction over the subject matter of the complaint and in
granting the motion to dismiss.

The Court of Appeals reversed and set aside the trial court’s challenged order, granted private
respondents’ appeal and ordered the trial court to proceed with the civil case with dispatch. From the
averments in their complaint, the appellate court observed that private respondents are seeking to
implement the Deed of Assignment which they had drafted and submitted to SSS sometime in July 2001,
pursuant to SSS’s letter addressed to AG& P dated 23 April 2001 approving AG&P and SEMIRARA’S
delinquencies through dacion en pago, which as of 31 March 2001, amounted to P29,261,902.45. The
appellate court thus held that the subject of the complaint is no longer the payment of the premium and
loan amortization delinquencies, as well as the penalties appurtenant thereto, but the enforcement of
the dacion en pago pursuant to SSS Resolution No. 270. The action then is one for specific performance
which case law holds is an action incapable of pecuniary estimation falling under the jurisdiction of the
Regional Trial Court.5
SSS filed a motion for reconsideration of the appellate court’s decision but the same was denied in a
Resolution dated 19 December 2006.

Now before the Court, SSS insists on the Social Security Commission’s (the Commission) jurisdiction
over the complaint pursuant to Section 5 (a) of Republic Act (R.A.) No. 8282. SSS maintains the
Commission’s jurisdiction over all disputes arising from the provisions of R.A. No. 1161, amended by
R.A. No. 8282 to the exclusion of trial courts.6

The main issue in this case pertains to which body has jurisdiction to entertain a controversy arising from
the non-implementation of a dacion en pago agreed upon by the parties as a means of settlement of
private respondents’ liabilities.

At the outset, it is well to restate the rule that what determines the nature of the action as well as the
tribunal or body which has jurisdiction over the case are the allegations in the complaint. 7

The pertinent provision of law detailing the jurisdiction of the Commission is Section 5(a) of R.A. No.
1161, as amended by R.A. No. 8282, otherwise known as the Social Security Act of 1997, to wit:

SEC. 5. Settlement of Disputes.– (a) Any dispute arising under this Act with respect to coverage,
benefits, contributions and penalties thereon or any other matter related thereto, shall be
cognizable by the Commission, and any case filed with respect thereto shall be heard by the
Commission, or any of its members, or by hearing officers duly authorized by the Commission
and decided within the mandatory period of twenty (20) days after the submission of the
evidence. The filing, determination and settlement of disputes shall be governed by the rules and
regulations promulgated by the Commission.

The law clearly vests upon the Commission jurisdiction over "disputes arising under this Act with respect
to coverage, benefits, contributions and penalties thereon or any matter related thereto..." Dispute is
defined as "a conflict or controversy."8

From the allegations of respondents’ complaint, it readily appears that there is no longer any dispute with
respect to respondents’ accountability to the SSS. Respondents had, in fact, admitted their delinquency
and offered to settle them by way of dacion en pago subsequently approved by the SSS in Resolution No.
270-s. 2001. SSS stated in said resolution that "the dacion en pago proposal of AG&P Co. of Manila and
Semirara Coals Corporation to pay their liabilities in the total amount of P30,652,710.71 as of 31 March
2001 by offering their 5.8 ha. property located in San Pascual, Batangas, be, as it is hereby,
approved.."9 This statement unequivocally evinces its consent to the dacion en pago. In Vda. de Jayme v.
Court of Appeals,10 the Court ruled significantly as follows:

Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the
creditor as an accepted equivalent of the performance of the obligation. It is a special mode of
payment where the debtor offers another thing to the creditor who accepts it as equivalent of
payment of an outstanding debt. The undertaking really partakes in one sense of the nature of
sale, that is the creditor is really buying the thing or property of the debtor, payment for which is
to be charged against the debtor’s debt. As such, the essential elements of a contract of sale,
namely, consent, object certain, and cause or consideration must be present. In its modern
concept, what actually takes place in dacion en pago is an objective novation of the obligation
where the thing offered as an accepted equivalent of the performance of an obligation is
considered as the object of the contract of sale, while the debt is considered as the purchase price.
 In any case, common consent is an essential prerequisite, be it sale or novation, to have the effect
of totally extinguishing the debt or obligation.11

The controversy, instead, lies in the non-implementation of the approved and agreed dacion en pago on
the part of the SSS. As such, respondents filed a suit to obtain its enforcement which is, doubtless, a suit
for specific performance and one incapable of pecuniary estimation beyond the competence of the
Commission.12 Pertinently, the Court ruled in Singson v. Isabela Sawmill,13 as follows:

In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction in the municipal courts or in
the courts of first instance would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money, where the money claim is
purely incidental to, or a consequence of, the principal relief sought, this Court has considered
such actions as cases where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance (now Regional Trial Courts). 14

In fine, the Court finds the decision of the Court of Appeals in accord with law and jurisprudence.

WHEREFORE, the petition is DENIED. The Decision dated 31 August 2006 of the Court of Appeals
Eleventh Division in CA-G.R. CV No. 83775 AFFIRMED.

Let the case be remanded to the trial court for further proceedings.

SO ORDERED.
 THIRD DIVISION

G.R. No. 228087, January 24, 2018

H. VILLARICA PAWNSHOP, INC., HL VILLARICA PAWNSHOP, INC., HRV VILLARICA

PAWNSHOP, INC. AND VILLARICA PAWNSHOP, INC., Petitioners, v. SOCIAL
SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, AMADOR M. MONTEIRO,
SANTIAGO DIONISIO R. AGDEPPA, MA. LUZ N. BARROS-MAGSINO, MILAGROS N.
CASUGA AND JOCELYN Q. GARCIA, Respondents.

DECISION

GESMUNDO, J.:

Condonation statutes—being an act of liberality on the part of the State—are strictly

construed against the applicants unless the laws themselves clearly state a contrary rule of
interpretation.

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by
petitioners H. Villarica Pawnshop, Inc., HL Villarica Pawnshop, Inc., HRV Villarica Pawnshop,
Inc. and Villarica Pawnshop, Inc., (petitioners) seeking to reverse and set aside the
Decision1 dated February 26, 2016 and Resolution2 dated November 2, 2016, of the Court of
Appeals (CA) in CA-G.R. SP No. 140916, which affirmed the Resolution3 dated November 6,
2013, and Order4 dated January 21,2015, of the Social Security Commission (SSC) denying
petitioners' claim for refund.

The Antecedents

Petitioners are private corporations engaged in the pawnshop business and are compulsorily
registered with the Social Security System (SSS) under Republic Act (R.A.) No.
8282,5 otherwise known as the Social Security Law of 1997.6

In 2009, petitioners paid their delinquent contributions and accrued penalties with the
different branches of the SSS in the following manner:

DELINQUENCY AMOUNT PAID

PETITIONER DATE PAID
PERIOD (Contribution and Penalty)
H. Villarica Pawnshop, Inc. Jan. 2006 - Oct. 2006
P1,461,640.24 Apr. 23, 2009
Jul. 2007 - Dec. 2007
Apr. 2007- Jun. 2007
P710,199.08. May 1, 2009
Mar. 2008 - Dec. 2008
 H.L. Villarica Pawnshop, Inc. Sept. 2005 - Dec. 2006 P2,544,525.28 Jun. 20, 2009
HRV Villarica Pawnshop, Inc. Jan. 2009 - May 2009 P132,176.32 May 18, 2009
Villarica Pawnshop, Inc. Mar. 2000 - Jun. 2000 P68,922.03 Feb. 20, 2009
Jan. 2000 - Jun. 2000 P21,353.70 Feb. 26, 2009
Jan. 2005 - Aug. 2005 P699,850.34 Mar. 2, 2009
Jan. 1997 - Jan. 2009 P2,491,998.08 Apr. 7, 20097

On January 7, 2010, Congress enacted R.A. No. 9903, otherwise known as the Social
Security Condonation Law of 2009, which took effect on February 1, 2010. The said law
offered delinquent employers the opportunity to settle, without penalty, their
accountabilities or overdue contributions within six (6) months from the date of its
effectivity.8

Consequently, petitioners thru its President and General Manager Atty. Henry P. Villarica,
sent separate Letters,9 all dated July 26, 2010, to the different branches of the SSS seeking
reimbursement of the accrued penalties, which they have paid in 2009, thus:

    Amount Claimed
1. Diliman Branch   P860,452.6210  
2. Manila Branch   P1,005,805.2811  
3. Caloocan Branch   P5,376.3212  
4. San Francisco Del Monte Branch   P3,119,400.1513  

Invoking Section 4 of R.A. No. 9903 and Section 2 (f) of the SSC Circular No. 2010-004 or
the Implementing Rules and Regulations of R.A. No. 9903 (IRR), petitioners claimed that
the benefits of the condonation program extend to all employers who have settled their
arrears or unpaid contributions even prior to the effectivity of the law.14

In a Letter15 dated August 16, 2010, the SSS - San Francisco Del Monte Branch denied
petitioner Villarica Pawnshop, Inc.'s request for refund amounting to P3,119,400.15 stating
that there was no provision under R.A. No. 9903 allowing reimbursement of penalties paid
before its effectivity.16

In another Letter17 dated September 16, 2010, petitioner HRV Villarica Pawnshop, Inc. was
likewise informed that its application for the refund of the accrued penalty had been denied
because R.A. No. 9903 does not cover accountabilities settled prior to its effectivity.18

In like manner, the applications for refund filed by petitioners H. Villarica Pawnshop, Inc.
and HL Villarica Pawnshop, Inc. were both denied in separate letters dated October 4,
201019 and October 15, 2010,20 respectively, for the same reason of being filed outside the
coverage of R.A. No. 9903.21

As a result, petitioners filed their respective Petitions22 before the SSC seeking

reimbursement of the 3% per month penalties they paid in 2009 essentially claiming that
they were entitled to avail of the benefits under R.A. No. 9903 by reason of equity because
"one of the purposes of the law is to favor employers, regardless of the reason for the non-
payment of the arrears in contribution;" and that the interpretation of the SSS "is
manifestly contrary to the principle that, in enacting a statute, the legislature intended right
and justice to prevail."

In its Answer23 dated March 14, 2012, the SSS prayed for the dismissal of the petitions for
utter lack of merit. It maintained that petitioners were not entitled to avail of the
condonation program under R.A. No. 9903 because they were not considered delinquent at
the time the law took effect in 2010; and that there was nothing more to condone on the
part of petitioners for they have settled their obligations even before the enactment of the
law. The SSS explained that the term "accrued penalties" had been properly defined as
unpaid penalties under the IRR and, considering that laws granting condonation constitute
acts of benevolence on the part of the State, they should be strictly construed against the
applicant.24

The SSC Ruling

In its Resolution25 dated November 6, 2013, the SSC denied all the petitions for lack of
merit. It ruled that petitioners were not entitled to the benefits of the condonation program
under R.A. No. 9903 in view of the full payment of their unpaid obligations prior to the
effectivity of the law on February 1, 2010. As petitioners did not have unpaid contributions
at the time the law took effect, the SSC held that there could be no remission or refund in
their favor. The dispositive portion of the said resolution states:

WHEREFORE, all four (4) petitions filed by petitioners against the SSS are hereby DENIED
for lack of merit.

SO ORDERED.26

Petitioners filed a motion for reconsideration but it was denied by the SSC in an
Order27 dated January 21, 2015.

Undeterred, petitioners appealed before the CA.

The CA Ruling

In its decision dated February 26, 2016, the CA affirmed the ruling of the SSC. It held that
the intent of the legislature in enacting R.A. No. 9903 was the remission of the three
percent (3%) per month penalty imposed upon delinquent contributions of employers as a
necessary consequence of the late payment or non-remittance of SSS contributions. The CA
found that the IRR of R.A. No. 9903 used the word "unpaid" to emphasize the accrued
penalty that may be waived therein, thus, it presupposes that there was still an outstanding
obligation at the time of the effectivity of the law, which may be extinguished through
remission. It highlighted that lawmakers did not include within the sphere of R.A. No. 9903
those employers whose penalties have already been paid prior to its effectivity. The CA
added that it would be absurd for obligations that have already been extinguished to be
subjected to condonation.

Citing Mendoza v. People28(Mendoza), the CA further ruled that there was no violation of the
equal protection clause because there was a substantial distinction between those
delinquent employers who paid within the six (6) month period from the effectivity of the
law and those who paid outside of the said availment period. It underscored that only the
former class was expressly covered by R.A. No. 9903. The CA concluded that petitioners'
stand, that those who paid prior to the effectivity of R.A. No. 9903 can avail of the
condonation and refund, would open the floodgates to numerous claims for reimbursement
before the SSS, which could lead to a depletion of its resources to the detriment of the
public's best interest. The fallo of the CA ruling reads:

WHEREFORE, foregoing considered, the instant petition is hereby DISMISSED. The

Resolution dated November 6, 2013 and the Order dated January 21, 2015 of the Social
Security Commission in SSC Case Nos. 11-19521-11, 11-19522-11, 11-19523-11 and 11-
19524-11 are AFFIRMED.

SO ORDERED.29

Petitioners moved for reconsideration but it was denied by the CA in its resolution dated
November 2, 2016.30

Hence, this petition anchored on the following grounds:

A. WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED IN RULING THAT RA NO.
9903 DOES NOT INCLUDE PETITIONERS IN ITS COVERAGE, CONSIDERING THAT:

1. SECTION 4 OF RA NO. 9903 EXPRESSLY INCLUDES EMPLOYERS, SUCH AS

PETITIONERS, WHO SETTLED (THEIR) ARREARS IN CONTRIBUTIONS BEFORE
THE EFFECTIVITY OF THE LAW AND THUS, ARE ENTITLED TO A WAIVER OF
THEIR ACCRUED PENALTIES.

2. PRIOR TO RA NO. 9903, EMPLOYERS ARE REQUIRED TO SETTLE THEIR

ARREARS IN CONTRIBUTIONS SIMULTANEOUSLY WITH PAYMENT OF THE
PENALTY, THUS RENDERING IT IMPOSSIBLE FOR PETITIONERS TO PAY THEIR
ARREARS WITHOUT PAYING THE PENALTY

B. WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED IN RULING THAT
RESPONDENT SSC CORRECTLY INTERPRETED THE TERM 'ACCRUED' UNDER THE SSS
CONDONATION LAW OF 2009 TO MEAN UNPAID. IF THIS INTERPRETATION WERE TO
BE UPHELD, THOSE WHO HAVE UNPAID ACCRUED PENALTIES WOULD BE IN A
BETTER POSITION THAN THOSE WHO DECIDED TO SETTLE BOTH THE ARREARS IN
CONTRIBUTION AND THE ACCRUED PENALTIES. CERTAINLY, THE LAW NEVER
INTENDED INJUSTICE.31

Petitioners argue that the last proviso of Section 4 of R. A. No. 9903 "clearly extends the
benefit of the waiver" to employers who have settled their arrears before the effectivity of
the law, hence, to allow the refund of the corresponding penalties paid;32 that the "equity
provision" in Section 4 of R.A. No. 9903 should be interpreted to include a refund of
penalties already paid if such law is to be given any effect;33 and that a refund should be
allowed because there is no substantial distinction between employers who paid their
accrued penalties before and after the effectivity of the R.A. No. 9903.34

In its Comment,35 the SSC counters that since petitioners have already paid their
unremitted contributions and accrued penalties before the effectivity of R.A. No. 9903, there
is nothing left to be condoned or waived; that, at the time of their payment, there was no
remission of accrued penalty yet; that R.A. No. 9903 does not contain a provision allowing
the reimbursement of accrued penalty which was paid prior to its effectivity; that the CA
correctly interpreted the term "accrued penalty" to mean "unpaid" by using the definition
provided in Section 1 (d) of the IRR; and that the ruling in Mendoza had already recognized
that Congress refused to allow a sweeping, non-discriminatory condonation to all delinquent
employers when it provided a fixed period for the availment of the condonation program
under R.A. No. 9903. 36

In its Comment,37 the SSS avers that the payments made by petitioners before the
effectivity of R.A. No. 9903 are valid payments which cannot be the subject of
reimbursement; that petitioners are no longer considered delinquent employers when R.A.
No. 9903 took effect; that petitioners erroneously interpreted the "equity provision" to
include a right to a refund of penalties paid; and that laws granting condonation constitute
an act of benevolence and should be strictly construed against the applicant.38

The Court's Ruling

The petition is bereft of merit.

Sections 2 and 4 of the R.A. No. 9903 specifically provide:

Section 2. Condonation of Penalty. — Any employer who is delinquent or has not remitted
all contributions due and payable to the Social Security System (SSS), including those with
pending cases either before the Social Security Commission, courts or Office of the
Prosecutor involving collection of contributions and/or penalties, may within six (6)
months from the effectivity of this Act:

(a) remit said contributions; or

(b) submit a proposal to pay the same in installments, subject to the implementing

rules and regulations which the Social Security Commission may prescribe: Provided, That
the delinquent employer submits the corresponding collection lists together with the
remittance or proposal to pay installments: Provided, further, That upon approval and
payment in full or in installments of contributions due and payable to the SSS, all such
pending cases filed against the employer shall be withdrawn without prejudice to the refiling
of the case in the event the employer fails to remit in full the required delinquent
contributions or defaults in the payment of any installment under the approved proposal.

xxxx

Section 4. Effectivity of Condonation. — The penalty provided under Section 22 (a) of

Republic Act No. 8282 shall be condoned by virtue of this Act when and until all the
delinquent contributions are remitted by the employer to the SSS: Provided, That, in case
the employer fails to remit in full the required delinquent contributions, or defaults in the
payment of any installment under the approved proposal, within the availment period
provided in this Act, the penalties are deemed reimposed from the time the contributions
first become due, to accrue until the delinquent account is paid in full: Provided, further,
That for reason of equity, employers who settled arrears in contributions before
the effectivity of this Act shall likewise have their accrued penalties
waived. [emphases supplied]
On the other hand, Sections 1 and 2 of the IRR of R.A. No. 9903 state:

Section 1. Definition of Terms. — Unless the context of a certain provision of this Circular
clearly indicates otherwise, the term:

xxx

(d) "Accrued penalty" refers to the unpaid three percent (3%) penalty imposed upon any
delayed remittance of contribution m accordance with Section 22 (a) of R.A. No. 1161, as
amended.

Section 2. Who may avail of the Program. — Any employer who is delinquent or has not
remitted all contributions due and payable to the SSS may avail of the Program, including
the following:

(a) Those not yet registered with the SSS

(b) Those with pending or approved proposal under the Installment Payment Scheme of the
SSS (Circular No. 9-P) pursuant to SSC Resolution No. 380 dated 10 June 2002;

(c) Those with pending or approved application under the Program for Acceptance of
Properties Offered Through Dacion En Pago of the SSS (Circular No. 6-P) pursuant to SSC
Resolution No. 29 dated 16 January 2002;

(d) Those with cases pending before the SSC, Courts or Office of the Prosecutor involving
collection of contributions and/or penalties;

(e) Those against whom judgment had been rendered involving collection of contributions
and/or penalties but have not complied with the judgment, and;

(f) Those who, before the effectivity of the Act, have settled all contributions but
with accrued penalty. [emphasis supplied]

Under R.A. No. 9903 and its IRR, an employer who is delinquent or has not remitted all
contributions due and payable to the SSS may avail of the condonation program provided
that the delinquent employer will remit the full amount of the unpaid contributions or would
submit a proposal to pay the delinquent contributions in installment within the six (6)-
month period set by law.

Under Section 4 of R.A. No. 9903, once an employer pays all its delinquent contributions
within the six month period, the accrued penalties due thereon shall be deemed waived. In
the last proviso thereof, those employers who have settled their delinquent contributions
before the effectivity of the law but still have existing accrued penalties shall also benefit
from the condonation program. In that situation, there is still something to condone
because there are existing accrued penalties at the time of the effectivity of the law. Section
1 (d) of the IRR defines accrued penalties as those that refer to the unpaid three percent
(3%) penalty imposed upon any delayed remittance of contribution.

Accordingly, R.A. No. 9903 covers those employers who (1) have existing
delinquent contributions and/or (2) have accrued penalties at the time of its
effectivity.
Evidently, there is nothing in R.A. No. 9903, particularly Section 4 thereof, that benefits an
employer who has settled their delinquent contributions and/or their accrued
penalties prior to the effectivity of the law. Once an employer pays all his delinquent
contributions and accrued penalties before the effectivity of R.A. No. 9903, it cannot avail of
the condonation program because there is no existing obligation anymore. It is the clear
intent of the law to limit the benefit of the condonation program to the delinquent
employers.39

Also, the provisions of R.A. No. 9903 and its IRR state that employers may be accorded the
benefit of having their accrued penalties waived provided that they either remit their
delinquent contributions or submit a proposal to pay their delinquencies in installments (on
the condition that there will be no default in subsequent payments) within the "availment
period" spanning six (6) months from R.A. No. 9903's effectivity.

The Court finds that employers who have paid their unremitted contributions and already
settled their delinquent contributions as well as their corresponding penalties before R.A.
No. 9903's effectivity do not have a right to be refunded of the penalties already paid, which
shall be discussed in seriatim.

Verba legis interpretation of R.A. No. 9903

It is the duty of the Court to apply the law the way it is worded.40 Basic is the rule of
statutory construction that when the law is clear and unambiguous, the court is left with no
alternative but to apply the same according to its clear language.41 The courts can only
pronounce what the law is and what the rights of the parties thereunder are.42 Fidelity to
such a task precludes construction or interpretation, unless application is impossible or
inadequate without it.43 Thus, it is only when the law is ambiguous or of doubtful meaning
may the court interpret or construe its true intent.44

Parenthetically, the "plain meaning rule" or verba legis in statutory construction enjoins
that if the statute is clear, plain and free from ambiguity, it must be given its literal meaning
and applied without interpretation.45 This rule of interpretation is in deference to the plenary
power of Congress to make, alter and repeal laws as this power is an embodiment of the
People's sovereign will.46 Accordingly, when the words of a statute are clear and
unambiguous, courts cannot deviate from the text of the law and resort to interpretation
lest they end up betraying their solemn duty to uphold the law and worse, violating the
constitutional principle of separation of powers.

Concomitantly, condonation or remission of debt is an act of liberality, by virtue of which,

without receiving any equivalent, the creditor renounces the enforcement of the obligation,
which is extinguished in its entirety or in that part or aspect of the same to which the
remission refers.47 It is essentially gratuitous for no equivalent is received for the benefit
given.48 Relatedly, waiver is defined as a voluntary and intentional relinquishment or
abandonment of a known existing legal right, advantage, benefit, claim or privilege, which
except for such waiver the party would have enjoyed; the voluntary abandonment or
surrender, by a capable person, of a right known by him to exist, with the intent that such
right shall be surrendered and such person forever deprived of its benefit; or such conduct
as warrants an inference of the relinquishment of such right; or the intentional doing of an
act inconsistent with claiming it.49 On the other hand, refund is an act of giving back or
returning what was received.50 In cases of monetary obligations, a claim for refund exists
only after the payment has been made and, in the act of doing so, the debtor either
delivered excess funds or there exists no obligation to pay in the first place. This right arises
either by virtue of solutio indebiti as provided for in Articles 2154 to 2163 of the Civil Code
or by provision of another positive law, such as tax laws or amnesty laws.51

A plain reading of Section 4 of R.A. No. 9903 shows that it does not give employers who
have already settled their delinquent contributions as well as their corresponding penalties
the right to a refund of the penalties paid. What was waived here was the amount of
accrued penalties that have not been paid prior to the law's effectivity—it does not include
those that have already been settled.

The words "condoned", "waived" and "accrued" are unambiguous enough to be understood
and directly applied without any resulting confusion. As discussed earlier, the word
''condonation" is the creditor's act of extinguishing an obligation by renunciation and the
word "waive" is an abandonment or relinquishment of an existing legal right. On the other
hand, the term "accrue" in legal parlance means "to come into existence as an enforceable
claim."52 Thus, the phrases "shall be condoned" and "shall likewise have their accrued
penalties waived" under Section 4 of the R.A. No. 9903 can only mean that, at the time of
its effectivity, only existing penalties may be extinguished or relinquished. No further
interpretation is necessary to clarify the law's applicability.

Prospective application of R.A. No. 9903

Statutes are generally applied prospectively unless they expressly allow a retroactive
application. It is a basic principle that laws should only be applied prospectively unless the
legislative intent to give them retroactive effect is expressly declared or is necessarily
implied from the language used.53 Absent a clear contrary language in the text and, that in
every case of doubt, the doubt will be resolved against the retroactive operation of laws.54

Here, R.A. No. 9903 does not provide that, prior to its effectivity, penalties already paid are
deemed condoned or waived. What Section 2 of the law provides instead is an availment
period of six (6) months after its effectivity within which to pay the delinquent contributions
for the existing and corresponding penalties to be waived or condoned. This only means that
Congress intends R.A. No. 9903 to apply prospectively only after its effectivity and until its
expiration.

Interpretation in favor of social justice

Even if there is doubt as to the import of the term "accrued penalties," condonation laws—
especially those relating to social security funds—are construed strictly against the
applicants.

Social justice in the case of the laborers means compassionate justice or an implementation
of the policy that those who have less in life should have more in law.55 And since it is the
State's policy to "promote social justice and provide meaningful protection to [SSS]
members and their beneficiaries against the hazards of disability, sickness, maternity, old
age, death, and other contingencies resulting in loss of income or financial burden,"56 Court
should adopt a rule of statutory interpretation which ensures the financial viability of the
SSS.

Here, the State stands to lose its resources in the form of receivables whenever it condones
or forgoes the collection of its receivables or unpaid penalties. Since a loss of funds
ultimately results in the Government being deprived of its means to pursue its objectives,
all monetary claims based on condonation should be construed strictly against the
applicants. In the case of SSS funds, the Court in Social Security System v. Commission on
Audit57 had emphatically explained in this wise:

THE FUNDS contributed to the Social Security System (SSS) are not only imbued with public
interest, they are part and parcel of the fruits of the workers' labors pooled into one
enormous trust fund under the administration of the System designed to insure against the
vicissitudes and hazards of their working lives. In a very real sense, the trust funds are the
workers' property which they could turn to when necessity beckons and are thus more
personal to them than the taxes they pay. It is therefore only fair and proper that charges
against the trust fund be strictly scrutinized for every lawful and judicious
opportunity to keep it intact and viable in the interest of enhancing the welfare of
their true and ultimate beneficiaries. [emphasis supplied]

To this end, the Court upholds and abides by this canon of interpretation against applicants
of the benefits of R.A. No. 9903 as a recognition to the constitutional policies of freeing the
people from poverty through policies that provide adequate social services58 and
affording full protection to labor.59 It is consistent with the congressional intent of placing a
primary importance in helping the SSS increase its funds through stimulating cash inflows
by encouraging delinquent employers to settle their accountabilities.60 Thus, R.A. No. 9903
shall be understood as not to include a refund of penalties paid before its effectivity.

It is the essence of judicial duty to construe statutes so as to avoid such a deplorable result
of injustice.61 Simply put, courts are not to give words meanings that would lead to absurd
or unreasonable consequences.62 This is to preserve the intention of Congress—the branch
which possesses the plenary power for all purposes of civil government.63

Logically, only existing obligations can be extinguished either by payment, loss of the thing
due, remission or condonation, confusion or merger or rights, compensation, novation,
annulment of contract, rescission, fulfillment of a resolutory condition, or prescription.
Interpreting R.A. No. 9903 in such a way that it extinguishes an obligation which is already
extinguished is simply absurd and unreasonable.

Rule-making power of the SSS

The SSS (through the SSC)64 is empowered to issue the necessary rules and regulations for
the effective implementation of R.A. No. 9903.65 Quasi-legislative power is exercised by
administrative agencies through the promulgation of rules and regulations within the
confines of the granting statute and the doctrine of non-delegation of powers from the
separation of the branches of the government.66

Accordingly, with the growing complexity of modem life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the laws, the rigidity
of the theory of separation of governmental powers has, to a large extent, been relaxed by
permitting the delegation of greater powers by the legislative and vesting a larger amount
of discretion in administrative and executive officials, not only in the execution of the laws,
but also in the promulgation of certain rules and regulations calculated to promote public
interest.67 Stated differently, administrative agencies are necessarily authorized to fill in the
gaps of a statute for its proper and effective implementation. Hence, the need to delegate to
administrative bodies—the principal agencies tasked to execute laws in their specialized
fields—the authority to promulgate rules and regulations to implement a given statute and
effectuate its policies.68
In the instant case, Section 30 of the R.A. No. 8282 and Section 5 of R.A. No. 9903 gave
the SSS the power to promulgate rules and regulations to define the terms of social
security-related laws that may have a likelihood of being subjected to several
interpretations. This is exactly what the SSS did when it defined the term "accrued
penalties'' to mean "unpaid penalties" so as to make it unequivocal and prevent confusion
as to the applicability of R.A. No. 9903. More importantly, since the ascription of the
meaning of "unpaid penalties" to "accrued penalties" bear a reasonable semblance and
justifiable connection, it should not be disturbed and altered by the courts.

Delinquent contributions and penalties may be paid separately

There is no existing statutory or regulatory provision which requires the simultaneous or

joint payment of corresponding penalties along with the payment of delinquent
contributions. Consequently, it is possible that a class of employers who have settled their
delinquent contributions but have not paid the corresponding penalties before the effectivity
of R.A. No. 9903, may exist. As adequately pointed out by the SSC:69

It is worthy to note that there is no provision in RA 8282, as amended, nor in any

SSS Circular or Office Order that requires employers to settle their arrears in
contributions simultaneously with payment of the penalty. On the contrary, in its
sincere effort to be a partner in nation[-]building, along with the State's declared policy to
establish, develop, promote and perfect a sound and viable tax-exempt social security
system suitable to the needs of the Philippines, the SSS is empowered to accept, process
and approve applications for installment proposal evincing that employers are not required
to settle their arrears in contributions simultaneously with the payment of the penalty.
[emphasis supplied]

The Court finds that the aforementioned assertion of the SSC is not without any legal basis
as Section 4 (c) of the R.A. No. 8282 provides:

Section 4. Powers and Duties of the Commission and SSS. -

xxxx

(6) To compromise or release, in whole or in part, any interest, penalty or any civil liability to SSS
in connection with the investments authorized under Section 26 hereof, under such terms and
conditions as it may prescribe and approved by the President of the Philippines; and xxx
(emphasis supplied)

Based on the foregoing, the SSS—through the SSC—is authorized to address any act that
may undermine the collection of penalties due from delinquent employers subject only to
the condition in Section 26 of the same law that the potential revenues being compromised
"are not needed to meet the current administrative and operational expenses." Thus,
petitioners' claim that "a class of employers who simply paid the arrears in contribution but
did not settle their penalties due does not exist"70 is erroneous.

There is no violation of the equal protection clause

There is a substantial distinction between employers who paid prior and subsequent to R.A.
No. 9903's effectivity. The equal protection clause guarantees that no person or class of
persons shall be deprived of the same protection of laws which is enjoyed by other persons
or other classes in the same place and in like circumstances.71 However, the concept of
equal protection does not require a universal application of the laws to all persons or things
without distinction; what it simply requires is equality among equals as determined
according to a valid classification.72

In other words, equal protection simply requires that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities imposed.73It does
not forbid discrimination as to things that are different.74 Neither is it necessary that
the classification be made with mathematical nicety.75 Congress is given a wide leeway in
providing for a valid classification;76 especially when social or economic legislation is at
issue.77 Hence, legislative classification may properly rest on narrow distinctions, for the
equal protection guaranty does not preclude the legislature from recognizing degrees of evil
or harm, and legislation is addressed to evils as they may appear.78

Correspondingly, the primordial duty of the Court is merely to apply the law in such a way
that it shall not usurp legislative powers by judicial legislation and that in the course of such
application or construction, it should not make or supervise legislation, or under the guise of
interpretation, modify, revise, amend, distort, remodel, or rewrite the law, or give the law a
construction which is repugnant to its terms.79 In enacting a law, it is the sole prerogative of
Congress—not the Judiciary—to determine what subjects or activities it intends to govern
limited only by the provisions set forth in the Constitution.

Significantly, petitioners have already paid not only their delinquent contributions but also
their corresponding penalties before the enactment and effectivity of R.A. No. 9903.
Because of this observation, petitioners cannot anymore be considered as
"delinquent" under the purview of R.A. No. 9903 and are not within the class of
"delinquent employers."80 Simply put, they are not similarly situated with other employers
who are delinquent at the time of the law's effectivity. Accordingly, Congress may treat
petitioners differently from all other employers who may have been delinquent.

Verily, this Court cannot—in the guise of interpretation—modify the explicit language of R.A.
No. 9903 in waiving the collection of accrued penalties to also include claims for refund. It
obviously violates the Trias Politica Principle entrenched in the very fabric of democracy
itself. While violation of the equal protection clause may be a compelling ground for this
Court to nullify an arbitrary or unreasonable legislative classification, it may not be used
as a basis to extend the scope of a law to classes not intended to be
covered.81 Therefore, R.A. No. 9903, which waived outstanding penalties, cannot be
expanded to allow a refund of those which were already settled before the law's effectivity.

Final note

Settling the contributions in arrears within the availment period only entitles delinquent
employers to a remission of their corresponding accrued and outstanding penalties—not a
refund of the penalties which have already been paid. There is nothing in R.A. No. 9903
which explicitly imposes or even implicitly recognizes a positive or natural obligation on the
part of the SSS to return the penalties which have already been settled before its effectivity.

It is absurd to revive obligations that have already been extinguished by payment or

performance just to be re-extinguished by condonation or remission so that it may create a
resulting obligation on the basis of solutio indebiti. More importantly, there is no violation of
the equal protection clause because there is a substantial distinction in the classes of
employers. Therefore, the Court deems it fitting to deny petitioners' claim for refund for lack
of substantial and legal basis.

WHEREFORE, the petition is DENIED. The February 26, 2016 Decision and November 2,
2016 Resolution of the Court of Appeals in CA G.R. SP No. 140916 are AFFIRMED in toto.

SO ORDERED.
 EN BANC

G.R. No. L-15798            December 28, 1961

JOSE P. TECSON, Petitioner-Appellant, vs. SOCIAL SECURITY

SYSTEM, Respondent-Appellee.

Sycip, Quisumbing, Salazar and Associates for petitioner-appellant.

Office of the Solicitor General and Teodoro R. Banzon for respondent-
appellee.

LABRADOR, J. chanrobles virtual law library

This is an appeal from a decision or ruling of the Social Security Commission

denying payment of death benefits to Jose P. Tecson, the beneficiary of an
employee of Yuyitung Publishing Company, by the name of Lim Hoc. chanroblesvirtualawlibrary chanrobles virtual law library

The facts as found by the Social Security Commission are as follows:

The facts attendant are as follows: The late Lim Hoc, a former employee of
the Yuyitung Publishing Company, was, at the time of his death on
November 3, 1957, a member of the System, having qualified as such on
September 1, 1957. In the SSS-Form E-1 accomplished and filed by him
with the System, he gave his civil status as married, but made no mention
of the members of his family or other relatives. Instead, he designated
therein the petitioner Jose P. Tecson, reportedly a friend and co-worker of
his, as his beneficiary. After the death of Lim Hoc, petitioner, in his capacity
as the designated beneficiary, filed with the System a claim for death
benefits. (ROA, p. 31).

In denying the petition of Tecson the Social Security Commission states that
the legislative policy underlying the system is to grant and afford protection
to the covered employee as well as his family; that while Section 13 of the
law (Rep. Act No. 1161 as amended) makes mention of the beneficiary as
recorded by his employer, it is not just anyone that the employee designates
who may be appointed his beneficiary because Section 24 (a) of the law
clearly provides that the employer shall report to the system the names,
ages, civil status, salaries and dependents of employees, and paragraph (a)
of the same section provides that if an employee subject to compulsory
coverage should die or become sick or disabled without the System having
previously received a report about him from his employer, the said employer
shall pay to the employee or his legal heirs, damages, etc. chanroblesvirtualawlibrary chanrobles virtual law library

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, 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,
thereof, as follows:

Section 13. - Upon the covered employee's death or total and permanent
disability under such conditions as the Commission may define, before
becoming eligible for retirement and if either such death or disability is not
compensable under the Workmen's Compensation Act, he or, in case of his
death, his beneficiaries as recorded by his employer shall be entitled to the
following benefit: ... (R.A. 1161 as amended.)

When the provisions of a law are clear and explicit, the courts can do
nothing but apply its clear and explicit provisions. (Velasco v. Lopez, 1 Phil.
720; Caminetti vs. U.S., 242 U.S. 470, 61 L. ed. 442). chanroblesvirtualawlibrary chanrobles virtual law library

It should be remembered that the benefits or compensation allowed an

employee or his beneficiary under the provisions of the Social Security Act
are paid out of funds which are contributed in part by the employees and in
part by the employers' (commercial or industrial companies members of the
System). Sections 18 and 19 of the Social Security Act (Republic Act No.
1161 as amended) provide that 2-�% of the salary of an employee subject
to compulsory coverage, shall be deducted and withheld from his monthly
compensation and paid over to the System, while the employer for his part
contributes another amount of 3-�% of the salary of said employee. The
contributions are collected by the System, which acts as the trustee of such
funds. It is provided also in the Act that of the total yearly collection not
more than 12% during the first two year of the operation of the System and
not more than 10% during any year thereafter shall be disbursed for salaries
and wages of the employees of the System (Sec. 24). A certain percentage
of the funds of the System may be invested in interest-bearing bonds and
deposits and in loans or advances to the National Government (Sec. 25). As
these funds are obtained from the employees and the employers, without
the Government having contributed any portion thereof, it would be unjust
for the System to refuse to pay the benefits to those whom the employee
has designated as his beneficiaries. The contribution of the employee is his
money; the contribution of the employer is for the benefit of the employee.
Hence the beneficiary should primarily be the one to profit by such
contributions. This is what is expressly provided in above-quoted Section 13
of the law. chanroblesvirtualawlibrary chanrobles virtual law library

It should also be noted that the Social Security System is not a law of
succession. Its purpose is to provide social security, which means funds for
the beneficiary, if the employee dies, or for the employee himself and his
dependents if he is unable to perform his task because of illness or disability,
or is laid off by reason of the termination of the employment, or because of
temporary lay-off due to strike, etc. It should also be remembered that the
beneficiaries of the System are those who dependent upon the employee for
support. Section 23 of the law (before its amendment by Republic Act No.
2658, which took effect on June 18, 1960) requires the employer to report
and transmit to the System such record of the names, ages, civil status,
occupations, salaries and dependents of all his employees. It is not the heirs
of the employee who are to receive the benefits or compensation. It is only
in case the benificiary is the estate, or if there is none designated, or if the
designation is void, that the System is required to pay the employee's heirs.
Such is the express provision of Section 15 of the same Act, as amended.
virtual law library
chanroblesvirtualawlibrary chanrobles

The Commission held that under its regulations, which are quoted below, the
employee must choose the beneficiaries from anyone of the persons
enumerated therein:

(a) The following persons may be designated as beneficiaries entitled to

receive death benefits provided they have been registered as such in the
records of the System prior to said employee's death, to wit: chanrobles virtual law library

(1) The legitimate widow or widower if not legally separated from the
deceased;  chanrobles virtual law library

(2) Legitimate and/or legitimated children;  chanrobles virtual law library

(3) Grandchildren; chanrobles virtual law library

(4) Parents;  chanrobles virtual law library

(5) Grandparents; chanrobles virtual law library

(6) Natural children duly acknowledged; chanrobles virtual law library

(7) Brothers and/or sisters; chanrobles virtual law library

(8) In the absence of any of the foregoing relatives, any other person
designated by the employee. (Rule 7, [3], of the Rules and Regulations of
the Social Security System).

The above rule indicates the persons that may be designated as

beneficiaries. The deceased Lim Hoc must have designated Jose P. Tecson as
his beneficiary under the provisions of Section 23 of the Act. The employer
must have received no information from the deceased employee Lim Hoc
about the existence of Lim Hoc's wife and children, their names, ages, civil
status, occupations, salaries, etc. It was subsequently known that Lim Hoc
had a wife and children in Communist China; the omission by him of their
existence and names in the records of the employer must have been due to
the fact that they were not at the time, at least, dependent upon him. If
they were actually dependents, their names would have appeared in the
record of the employer. The absence in the record of his employee of their
existence and names must have been due to the lack of communication, of
which We can take judicial notice, between Communist China and the
Philippines, or to the express desire of Lim Hoc to extend the benefits of his
contributions to the system to his "friend and co-worker", to the exclusion of
his wife. It is to be noted also that the funeral expenses of Lim Hoc are to be
paid from the benefits, so that what is to be paid to Tecson would be greatly
reduced.chanroblesvirtualawlibrary chanrobles virtual law library

FOR ALL THE FOREGOING CONSIDERATIONS, the resolution should be, as it

is hereby, set aside and annulled, and the respondent System is hereby
ordered to pay the monetary claim of Jose P. Tecson. Without costs. chanroblesvirtualawlibrary chanrobles virtual law library

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,

Paredes, Dizon and De Leon, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.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 generis applies 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 shall provide protection to employees against the
hazards of disability, sickness, old age and death." (See. 2, Republic Act No. 1161, as amended.) Such
enactment is a legitimate exercise of the police power. It affords protection to labor, especially to working
women and minors, 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." Being in fact a social legislation,
compatible with the policy of the Church to ameliorate living conditions of the working class, appellant
cannot arbitrarily delimit the extent of its provisions to relations between capital and labor in industry and
agriculture.

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.
Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right
to disseminate religious information. All that is required of appellant is to make monthly contributions to
the System for covered employees in its employ. 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.

IN VIEW OF THE FOREGOING, Resolutions Nos. 572 kind 767, series of 1958, of the Social Security
Commission are hereby affirmed. So ordered with costs against appellant.

Paras, C.J., Padilla, Bautista Angelo, Paredes and Dizon, JJ., concur.

Concepcion, Reyes, J.B.L. and Barrera, JJ., concur in the result.
Bengzon, J., reserves his vote.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 168111             July 4, 2008

ANTONIO TAN, DANILO DOMINGO and ROBERT LIM, petitioners,

vs.
AMELITO BALLENA, ZENAIDA BORLONGAN, ANNALYN VILLAFUERTE, ROGELIO VELASQUEZ,
EDMONDO VILLAMOR, MERCY SANTOMIN, REYNALDO RAMOS, THESS GONZALES,
FORTUNATO GATACILO, RONALDO NICOL, MARIVIC NICOL, RUEL DISTOR, MARYJEAN
GRANADA, ARNOLD AGUSTIN, JR., MALOU SALAPONG, THERESA JALMASCO (SIC), ANTIOCO
MARAGANAS, ROLAND LAROCO, WILFREDO DICHOSO, JOSEPH FERRER, GUILLERMO
PACSON, JR., ROMEO JALAMASCO, LINO CAGAS, DIANA DE LA CRUZ, JERRY ARCA, JAIME
SANTOS, MANUEL REGALA, JUANITO GALONIA, RUSSEL BORADO, RODY VILLAGFUERTE
(SIC), MA. CRISTINA MADRIDEO, VON MADRIDEO, AMELIA CUEVILLAS, EVANGELINE DOMINGO,
FELIMAR VILLAFUERTE, ANTONIO SALAPONG, ELINO MALAQUE, JR., EMILIO TRINIDAD, MA.
ELENA HERNANDEZ, JHONNY GRAJO, EDITHA FLORESTA, ORLANDO MENDOZA, SONIA
ALONZO, GREGORIO MARIANO, LIPA ALDRIN, FRANCO SEVILLA, MYRISIA NARCISO,
JOSEPHINE GERONIMO, MARILOU BORDADO, ELISA FRANCISCO, LOLITA NARCISO, ANGELITA
DOMINGO, MA. THERESA TORRES, IRERIA CRUZ, APOLINARIO TRINIDAD, ROMULO BULAONG,
FELEXBERTO (SIC) SANTIAGO, MARICEL MENDOZA, JUANITO CRUZ, FIDEL PASCUAL,
ROWENA DE LA CRUZ, DIVINA PAGTALUNAN, PACENCIA DOMINGO, MARILOU VICTORIA,
GUILLERMO CRISOSTOMO, JR., ANITA CRISOSTOMO, ELIZABETH CASTRO, ENRIQUE
BUGARIN, AUGUST BULAONG, ELMER VILLAMOR, ROMEO UDIONG, NICK OTARA, ERLANDO
RICOHERMOSO, RIZALINA DE LA CRUZ, ANTONIO JAO, JR., ROSALIE JINGCO, ALFREDO
SINGUELAS, RONALD SANDIL, ALMA ENRIQUEZ, MICHAEL RITCHIE DE LA CRUZ, JANE JAVIER,
TERESITA SACDALAN, MARCELINO ESTRELLA, ARTUADOR JUANITO (SIC), JR., LYDIA
PAGTALUNAN, ROSINDO MARAGAÑAS, DANILO SEGUNDO, ROMEO CRUZ, ANNALIZA
SELENCIO, ELLEN LABAJO, MA. ELENA SANTIAGO, ARNULFO SANTIAGO, MA. LUISA SANTOS,
SERGELIO PAGDANGANAN, DANTE VICTORIA, FELIPINAS (SIC) EMPHACIS (SIC), NOEL
OLIVERA, JOEY AUSTRIA, PHILIP MONSUYAC, RONALD PASCUAL, ZENAIDA SAKAY, PAULO
SOTTO, MA. LEDY MANLAPIG, RODOLFO JUNTO, ALDWIN CALALANG, CHARITO REYES,
PAULINA CASTOR, VICTOR MARCELINO, CARINA RAUZA, VICTOR DELOS SANTOS,
EVANGELINE PAULINO, RENAN LAYSON, RUDY DONOR, REBECCA PASOQUIN, EMETERIA
PAGTALUNAN, FERDINAND MANANSALA, JOCELYN BRINGAS, JESUS GATACILO, IMELDA
VALENCIA, MACARIO RICABO, ISID NICASIO, CHRISTOPHER DELA CRUZ, ERNESTO FOMBO,
ANGELO GIANAN, CRISTINA STA. ANA, DANTE SEMBILLO, MARILOU AGCAOILI, CRISTINA
SANTOS, CARMELITA GARSUTA, LOURDES MATOTE, SONNY DE LA CRUZ, ANGELITA
VILLAFUERTE, MARIO SANTOS, ALBERTO NAVARRO, RITA DELA CRUZ, ARMANDO CASTRO,
ERWIN CASTRO, ALFREDO NATIVIDAD, PURISIMA TRINIDAD, ROBERTO PARAISO, GREGORIO
BUMA-AT, MARIA TRINIDAD, EMMA SEGUNDO, FREDDIE SEGUNDO, NARCISO HERERO (SIC),
EMILIANO NUÑEZ, VIOLETA AVILA, RIZA REAL, CHITO ANG, MARIANO MANOLITA, JOVENCIO
UNDALOK, NILDA NELIA DEL ROSARIO, ERNESTO MARCELINO, EMELITA ALBERTO, YOLANDA
AGUSTIN, ARNOLD ALVERO, NENITA DIGA, MICHELLE DIGA, MA. ARA PALELEO, FLORA
MORALES, ROBERRO (SIC) RAMOS, JR., JOJO GADO, FLORA PAGDANGANAN, ESTRELITA
MAPILISAN, FLORENCIO BIHASA, MILAGROS SAN PEDRO, JONATHAN LOPEZ, LANI MEDALLA,
MARIVIC ENRIQUEZ, CHONA MANUMBAS, LEILANI LOPEZ, FELIX ENRIQUEZ, ANECITO
MEDALLA, FRANCIS BULAONG, CARLOS DELA CRUZ, CRISANTA ASPIRAS, ARNOLD ALMERO,
ADELIA SURIO, CRISANTO CRUZ, and ANALYN BERNABE, respondents.

DECISION
CHICO-NAZARIO, J.:

Assailed in this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court are the
Decision2 and Resolution3 of the Court of Appeals dated 30 September 2004 and 9 May 2005,
respectively, in CA-G.R. SP No. 79101. The appellate court's Decision set aside the Resolutions 4 of the
Department of Justice (DOJ) dated 19 March 2002 and 9 August 2002, and reinstated the Final
Resolution5 of the Provincial Prosecutor in I.S. Nos. 01-03-1007, 01-04-1129 and 01-04-1130, which
ordered the filing of two (2) informations against petitioners Antonio Tan, Danilo Domingo and Robert Lim.
The appellate court's Resolution denied petitioners' Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:

Petitioners Antonio Tan, Danilo Domingo and Robert Lim were officers of Footjoy Industrial Corporation
(Footjoy), a domestic corporation engaged in the business of manufacturing shoes and other kinds of
footwear, prior to the cessation of its operations sometime in February 2001.

On 19 March 2001, respondent Amelito Ballena,6 and one hundred thirty-nine (139) other employees of
Footjoy, filed a Joint Complaint-Affidavit7 before the Office of the Provincial Prosecutor of Bulacan against
the company and petitioners Tan and Domingo in their capacities as owner/president and administrative
officer, respectively.8

The Complaint-Affidavit alleged that the company did not regularly report the respondent employees for
membership at the Social Security System (SSS) and that it likewise failed to remit their SSS
contributions and payment for their SSS loans, which were already deducted from their wages.

According to respondents, these acts violated Sections 9, 10, 22 and 24, paragraph (b) of Republic Act
No. 1161, as amended by Republic Act No. 8282;9 as well as Section 28, paragraphs (e), (f), and (h)
thereof, in relation to Article 315 of the Revised Penal Code, the pertinent portions of which read:

SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all employees not over
sixty (60) years of age and their employers: x x x Provided, finally, That nothing in this Act shall
be construed as a limitation on the right of employers and employees to agree on and adopt
benefits which are over and above those provided under this Act.

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 day of his employment: x x x.

SEC. 22. Remittance of Contributions. -- (a) The contribution imposed in the preceding section
shall be remitted to the SSS within the first ten (10) days of each calendar month following the
month for which they are applicable or within such time as the Commission may prescribe. Every
employer required to deduct and to remit such contributions shall be liable for their payment and if
any contribution is not paid to the SSS as herein prescribed, he shall pay besides the contribution
a penalty thereon of three percent (3%) per month from the date the contribution falls due until
paid. If deemed expedient and advisable by the Commission, the collection and remittance of
contributions shall be made quarterly or semi-annually in advance, the contributions payable by
the employees to be advanced by their respective employers: Provided, That upon separation of
an employee, any contribution so paid in advance but not due shall be credited or refunded to his
employer.

(b) The contributions payable under this Act in cases where an employer refuses or neglects to
pay the same shall be collected by the SSS in the same manner as taxes are made collectible
under the National Internal Revenue Code, as amended. Failure or refusal of the employer to pay
or remit the contributions herein prescribed shall not prejudice the right of the covered employee
to the benefits of the coverage.
The right to institute the necessary action against the employer may be commenced within twenty
(20) years from the time the delinquency is known or the assessment is made by the SSS, or
from the time the benefit accrues, as the case may be.

(c) Should any person, natural or juridical, defaults in any payment of contributions, the
Commission may also collect the same in either of the following ways:

1. By an action in court, which shall hear and dispose of the case in preference to any
other civil action; x x x.

SEC. 24. Employment Records and Reports. -

xxxx

(b) Should the employer misrepresent the true date of employment of the employee
member or remit to the SSS contributions which are less than those required in this Act
or fail to remit any contribution due prior to the date of contingency, resulting in a
reduction of benefits, the employer shall pay to the SSS damages equivalent to the
difference between the amount of benefit to which the employee member or his
beneficiary is entitled had the proper contributions been remitted to the SSS and the
amount payable on the basis of the contributions actually remitted: x x x.

SEC. 28. Penal Clause. -

xxxx

(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and
regulations promulgated by the Commission, shall be punished by a fine of not less than
Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or
imprisonment for not less than six (6) years and one (1) day nor more than twelve (12)
years, or both, at the discretion of the court: Provided, That, where the violation consists
in failure or refusal to register employees or himself, in case of the covered self-
employed, or to deduct contributions from the employees' compensation and remit the
same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00)
nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than
six (6) years and one (1) day nor more than twelve (12) years.

(f) If the act or omission penalized by this Act be committed by an association,

partnership, corporation or any other institution, its managing head, directors or partners
shall be liable to the penalties provided in this Act for the offense.

xxxx

(h) Any employer who after deducting the monthly contributions or loan amortizations
from his employee's compensation, fails to remit the said deductions to the SSS within
thirty (30) days from the date they became due shall be presumed to have
misappropriated such contributions or loan amortizations and shall suffer the penalties
provided in Article Three hundred fifteen of the Revised Penal Code.

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

xxxx
 1. With unfaithfulness or abuse of confidence, namely:

xxxx

(b) By misappropriating or converting, to the prejudice of another, money, goods, or any

other personal property received by the offender in trust or on commission, or for
administration, or under any other obligation involving the duty to make delivery of or to
return the same, even though such obligation be totally or partially guaranteed by a bond;
or by denying having received such money, goods, or other property.

Respondents also alleged their entitlement to actual and exemplary damages and attorney's fees.

In their Joint Counter-Affidavit,10 petitioners Tan and Domingo blamed the economic distress that beset
their company for their failure to timely pay and update the monthly SSS contributions of the employees.
They alleged that the company's dire situation became even more aggravated when the buildings and
equipment of Footjoy were destroyed by fire on 4 February 2001. 11 This incident eventually led to the
cessation of the company's operations. Because of this, some of the company's employees tried to avail
themselves of their SSS benefits but failed to do so. It was then that the employees filed their complaint.

Petitioners Tan and Domingo thereafter underlined their good faith and lack of criminal culpability when
they acknowledged their fault and demonstrated their willingness to pay their obligations by executing a
memorandum of agreement with the SSS on 10 April 2001, the pertinent portions of which read:

April 10, 2001

FOOTJOY INDUSTRIAL CORPORATION

Antonio Tan
President
Mercado St., Guiguinto, Bulacan

Dear Mr. Antonio Tan,

Pursuant to Office Order No. 141-V dated February 2, 1995, your application to pay on
installment the amount of P5,227,033.66 representing SS premium contribution and penalties for
the period August 2000 up to January 2001 is hereby approved subject, however, to the following
terms and conditions:

1. That the amount of P5,227,033.66 be paid in twenty-four (24) monthly installment (sic):

xxxx

2. Upon payment, you are hereby directed to submit to us within three days the official receipt as
proof of payment of the monthly installment; and,

3. That in the event of default in the payment of at least two (2) monthly installments or non-
compliance with the payment plan, the employer's total outstanding obligations shall become due
and demandable without need of further notice otherwise, we will pursue legal action against you.

Please be guided accordingly.

Very truly yours,

 (Signed) Maylene M. Sanchez
            Branch Head

CONFORME:

(Signed) Antonio Tan12

On 17 May 2001, the Assistant Provincial Prosecutor issued a Joint Resolution, 13 which found probable
cause to charge Footjoy, Antonio Tan, and Danilo Domingo with violations of Sections 9, 10 and 24,
paragraph (b) in relation to Section 28, paragraphs (e), (f) and (h) of the Social Security Law. On the other
hand, the charge for the violation of Article 315, paragraph 1(b) of the Revised Penal Code was
dismissed, as the same was deemed absorbed by the violations under the SSS Law, but the penalty
imposed by the former law would be applied whenever appropriate. The Provincial Prosecutor approved
the above Resolution on 29 May 2001 and affirmed the filing of informations against petitioners Tan and
Domingo.

On 14 June 2001, respondents filed a Motion14 to implead five additional party respondents purportedly for
being "owners and/or responsible officers" of Footjoy, in accordance with the above-mentioned Section
28 paragraph (f) of the SSS Law.

Meanwhile, on 29 June 2001, petitioners filed a Motion for Reconsideration 15 of the above Joint
Resolution.

The Assistant Provincial Prosecutor issued a Final Resolution 16 on 20 August 2001, the dispositive portion
of which provides:

Accordingly, the original resolution is modified by impleading therein as additional respondent

Robert Lim.17 On the other hand, two informations (one count each) for violation of Sec. 9 in
relation to Sec. 10 and, Sec. 24(b) should be prepared for filing in court. All the rest found in the
original resolution are maintained.

On 20 September 2001, the Provincial Prosecutor issued a Supplementary Resolution, 18 which clarified
the last statement in the Final Resolution, stating that:

Let it, therefore, be understood and for which this supplementary resolution is being issued, that
the last recommendation of Pros. F. F. Malapit was approved as [to] the filing of two informations
as contained in his approved original resolution, that is, violations of Sec. 9, 10 & 24(b) in relation
to Sec. 28, pars. (e) (f) and (h) of R.A. 1161, as amended.

Thus, on 28 September 2001, the Provincial Prosecutor filed two informations against petitioners Tan,
Domingo and Lim in Branch 18 of the Regional Trial Court (RTC) of Bulacan. Criminal Case No. 2592-M-
200119 charged petitioners Tan, Domingo and Lim with violation of Section 9 in relation to Section 10 and
Section 28, paragraph (e) of the Social Security Law. On the other hand, Criminal Case No. 2593-M-2001
charged petitioners with violation of Section 24 paragraph (b) in relation to Section 28, paragraph (h) of
said law.

On 13 November 2001, petitioners filed a Petition for Review 20 with the DOJ, alleging, inter alia, that the
Assistant Prosecutor committed grave and manifest error when he found probable cause to charge them
with the alleged offenses.
Due to the pendency of the above petition, petitioners filed with the RTC of Bulacan a motion for the
suspension of their scheduled arraignment21 in the criminal cases, in accordance with Section 11,
paragraph (c) of Rule 11622 of the Revised Rules of Criminal Procedure.23

On 19 March 2002, the DOJ resolved to grant the petition for review, 24 stating:

WHEREFORE, the assailed resolution is REVERSED. The Provincial Prosecutor of Bulacan is

hereby directed to cause the withdrawal of the informations for violation of the Social Security
Law earlier filed against respondents Antonio Tan, Danilo Domingo, and Robert Lim and to report
the action thereon within ten (10) days from receipt thereof.

Respondents filed a Motion for Reconsideration25 of the DOJ resolution, but the same was denied in a
Resolution26 dated 9 August 2002.

On 16 October 2002, respondents filed with the Court of Appeals a Petition for Certiorari 27 under Rule 65
of the Revised Rules of Court, which was docketed as CA-G.R. SP No. 79101. Respondents claimed that
the DOJ committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding that no
probable cause existed to charge petitioners Tan, Domingo and Lim with violations of the SSS Law; that
the allegation of petitioners' failure to report respondents to the SSS for coverage is not supported by
evidence; and that charges [for the violation] of a special law such as the Social Security Act can be
overcome by a show of good faith and lack of intent to commit the same.

In a Resolution28 issued on 29 November 2002, the Court of Appeals dismissed outright the above petition
because only respondents Zenaida Borlongan and Francis Bulaong, who did not possess a special power
of attorney empowering them to sign on behalf of the other respondents, signed the certification of non-
forum shopping. The petition was also filed only on 16 October 2002 or one day beyond the reglementary
period, which ended on 15 October 2002.

Respondents then filed a Motion for Reconsideration 29 of the appellate court's resolution, contending that
the procedural lapses committed by their counsel were honest and excusable mistakes and that the same
should give way to their meritorious case. They, likewise, prayed for the admission of a Special Power of
Attorney30 that authorized Mercy Santomin, Zenaida Borlongan and Ronaldo Nicol to sign court pleadings
and documents on their behalf.

Before resolving the respondents' motion, the Court of Appeals directed the respondents to amend their
petition by impleading as party petitioners the two hundred thirty-eight (238) other employees of Footjoy,
whose names were not included in the title of the original petition, but were merely contained in an
annexed document.31 On 13 March 2003, respondents filed their amended petition, which was signed by
only one hundred eighty employees.32

On 2 June 2003, the Court of Appeals rendered a Resolution 33 which granted the respondents' Motion for
Reconsideration of the 29 November 2002 resolution and admitted the amended petition.

After requiring the parties to comment, the Court of Appeals issued the assailed Decision dated 30
September 2004, the dispositive portion of which reads:

WHEREFORE, premises considered, the resolutions of the Department of Justice dated March
19, 2002 and August 9, 2002 are VACATED and SET ASIDE, while the final resolution of the
Provincial Prosecutor of Bulacan dated August 20, 2001 is REINSTATED.34

In reversing the DOJ resolutions, the Court of Appeals ruled that the agency acted with grave abuse of
discretion when it committed a palpable mistake in dismissing the charges against petitioners. The
appellate court found that petitioners were indeed remiss in their duty to remit the respondents' SSS
contributions in violation of Section 28(h) of the Social Security Law. The petitioners' claim of good faith
and the absence of criminal intent should not have been considered, as these were evidentiary in nature
and should thus be more properly proved in a trial. Furthermore, the appellate court declared that said
defenses are unavailing in crimes punishable by a special law, which are characterized as mala prohibita.
In these crimes, it is enough that they were done freely and consciously and that the intent to commit the
same need not be proved.

Petitioners moved for a reconsideration35 of the above decision, but the same was denied by the Court of
Appeals in a Resolution36 dated 9 May 2005, the dispositive portion of which reads:

WHEREFORE, for lack of merit, the motion for reconsideration is DENIED.

Petitioners now come before us, pleading that we reverse the assailed decision and resolution of the
Court of Appeals as we rule on the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRIEVOUS ERROR AND

ACTED WITHOUT JURISDICTION WHEN IT GAVE DUE COURSE TO THE RESPONDENTS'
PETITION FOR CERTIORARI DESPITE THE FACT THAT IT WAS FILED OUT [OF] TIME.

II.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRIEVOUS ERROR WHEN IT

GAVE DUE COURSE TO THE RESPONDENTS' PETITION FOR CERTIORARI DESPITE THE
FACT THAT THE TWO (2) SIGNATORIES THEREAT WERE NOT ABLE TO SHOW THAT
THEY WERE DULY AUTHORIZED BY THE OTHER PETITIONERS TO FILE THE PETITION
ON THEIR BEHALF.

III.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT

REVERSED THE RESOLUTION OF THE DOJ WHICH FOUND OUT THAT THE PETITIONERS
COULD NOT BE INDICTED FOR ANY VIOLATION OF THE SSS LAW FOR WANT OF
PROBABLE CAUSE.37

Petitioners' case centers on the alleged error of the Court of Appeals in giving due course to a formally
defective petition. Respondents, on the other hand, pray for a liberal interpretation of the rules in pleading
for their cause.

We find that the petition lacks merit.

Procedurally, petitioners argue that the Court of Appeals gravely erred in taking cognizance of the
respondents' Petition for Certiorari even if the original petition was filed one day beyond the reglementary
period allowed by the rules, and the two signatories therein were not shown to have been properly
authorized by their co-petitioners to file the petition.

Section 1, Rule 65 of the Rules of Court provides for the requirements for filing a Petition for Certiorari,
namely:

Section 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain,
 speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with certainty and praying that judgment
be rendered annulling or modifying the proceedings of such tribunal, board or officer, and
granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and
a sworn certification of non-forum shopping as provided in the third paragraph of Section 3,
Rule 46. (Emphases ours.)

Specifically, the requirement of verification is contained in Section 4, Rule 7 of the Rules of Court, to wit:

Sec. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief"
or upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an
unsigned pleading.

On the other hand, the fourth paragraph of Section 3, Rule 46 of the Rules of Court provides:

The petitioner shall also submit together with the petition a sworn certification that he has not
theretofore commenced any other action involving the same issues in the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such
other action or proceeding, he must state the status of the same; and if he should thereafter learn
that a similar action or proceeding has been filed or is pending before the Supreme Court, the
Court of Appeals, or different divisions thereof, or any other tribunal or agency, he undertakes to
promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days
therefrom.

Finally, the reglementary period within which a Petition for Certiorari must be filed is provided for under
the first paragraph of Section 4, Rule 65,38 to wit:

The petition shall be filed not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the petition shall be filed not later than sixty (60) days counted from the notice
of the denial of the motion. (Emphasis ours.)

In the present case, only two employees signed the original Petition's verification and certification of non-
forum shopping and the same was filed one day beyond the period allowed by the rules. The appellate
court initially resolved to dismiss the original petition precisely for these reasons in a Resolution dated 29
November 2002. When asked to reconsider, the appellate court ordered the filing of an amended petition
in order to include all the original complainants. An amended petition was then filed in compliance with the
said order, but only one hundred eighty (180) of the two hundred forty (240) original complainants signed
the verification and certification of non-forum shopping. The Court of Appeals then granted the motion for
reconsideration and resolved to reinstate the petition. Thereafter, on 30 September 2004, the assailed
decision that upheld the filing of the informations against the petitioners was issued.

This Court finds no fault in the assailed actions of the Court of Appeals.
It is a well-settled principle that rules of procedure are mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be eschewed. 39 In deciding a case, the appellate court has
the discretion whether or not to dismiss the same, which discretion must be exercised soundly and in
accordance with the tenets of justice and fair play, taking into account the circumstances of the case. 40 It
is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the
parties a review of the case to attain the ends of justice, rather than dispose of the case on technicality
and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while
actually resulting in more delay, if not a miscarriage of justice. 41

The Court of Appeals committed no reversible error when it gave due course to the amended petition
despite the signing of the verification and certification of non-forum shopping of only some, and not all, of
the original complainants.

Under justifiable circumstances, we have already allowed the relaxation of the requirements of verification
and certification so that the ends of justice may be better served. 42 Verification is simply intended to
secure an assurance that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good faith; while the purpose of the
aforesaid certification is to prohibit and penalize the evils of forum shopping. 43

In Torres v. Specialized Packaging Development Corporation,44 we ruled that the verification requirement
had been substantially complied with despite the fact that only two (2) out of the twenty-five (25)
petitioners have signed the petition for review and the verification. In that case, we held that the two
signatories were unquestionably real parties-in-interest, who undoubtedly had sufficient knowledge and
belief to swear to the truth of the allegations in the Petition.

In Ateneo de Naga University v. Manalo,45 we also ruled that there was substantial compliance with the
requirement of verification when only one of the petitioners, the President of the University, signed for and
on behalf of the institution and its officers.

Similarly, in Bases Conversion and Development Authority v. Uy, 46 we allowed the signature of only one of
the principal parties in the case despite the absence of a Board Resolution which conferred upon him the
authority to represent the petitioner BCDA.

In the present case, the circumstances squarely involve a verification that was not signed by all the
petitioners therein. Thus, we see no reason why we should not uphold the ruling of the Court of Appeals
in reinstating the petition despite the said formal defect.

On the requirement of a certification of non-forum shopping, the well-settled rule is that all the petitioners
must sign the certification of non-forum shopping. The reason for this is that the persons who have signed
the certification cannot be presumed to have the personal knowledge of the other non-signing petitioners
with respect to the filing or non-filing of any action or claim the same as or similar to the current
petition.47 The rule, however, admits of an exception and that is when the petitioners show reasonable
cause for failure to personally sign the certification. The petitioners must be able to convince the court that
the outright dismissal of the petition would defeat the administration of justice. 48

In the case at bar, counsel for the respondents disclosed that most of the respondents who were the
original complainants have since sought employment in the neighboring towns of Bulacan, Pampanga
and Angeles City. Only the one hundred eighty (180) signatories were then available to sign the amended
Petition for Certiorari and the accompanying verification and certification of non-forum
shopping.49 Considering the total number of respondents in this case and the elapsed period of almost two
years since the filing of the Joint Complaint Affidavit on 19 March 2001 and the filing of the amended
petition on 13 March 2003, we hold that the instant case sufficiently falls under the exception to the
aforesaid rule. Thus, the Court of Appeals cannot be said to have erred in overlooking the above
procedural error.

We also cannot fault the act of the Court of Appeals in ordering submission of an amended petition and
the reinstatement of the same despite the original petition's late filing, considering the obvious merits of
the case.

In Vallejo v. Court of Appeals,50 the Court of Appeals initially dismissed the Petition for Certiorari for
having been filed beyond the reglementary period, but on appeal, we reversed the appellate court's ruling,
as petitioner had presented a good cause for the proper determination of his case.

Petitioners claim that the Court of Appeals committed serious error when it reversed the DOJ resolution,
which found that there was no probable cause to indict petitioners for any violation of the SSS Law. They
argue that the DOJ is the highest agency and the ultimate authority to decide the existence or non-
existence of probable cause, and that the Court of Appeals does not have the authority to reverse such
findings.

This argument is utterly misguided.

Probable cause is defined as the existence of such facts and circumstances as would excite the belief in
a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged
was guilty of the crime for which he was prosecuted.51 It is a reasonable ground of presumption that a
matter is, or may be, well-founded, such a state of facts in the mind of the prosecutor as would lead a
person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a
thing is so. The term does not mean "actual and positive cause" nor does it import absolute certainty. It is
merely based on opinion and reasonable belief.52

The determination of probable cause is a function that belongs to the public prosecutor, one that, as far
as crimes cognizable by the RTC are concerned, and notwithstanding that it involves an adjudicative
process of a sort, exclusively pertains, by law, to said executive officer, the public prosecutor. 53 This broad
prosecutorial power is, however, not unfettered, because just as public prosecutors are obliged to bring
forth before the law those who have transgressed it, they are also constrained to be circumspect in filing
criminal charges against the innocent. Thus, for crimes cognizable by the regional trial courts, preliminary
investigations are usually conducted.54 As defined under the law, a preliminary investigation is an inquiry
or a proceeding to determine whether there is sufficient ground to engender a well-founded belief that a
crime has been committed, and the respondent is probably guilty thereof and should be held for trial. 55

The findings of the prosecutor with respect to the existence or non-existence of probable cause is subject
to the power of review by the DOJ. Indeed, the Secretary of Justice may reverse or modify the resolution
of the prosecutor, after which he shall direct the prosecutor concerned either to file the corresponding
information without conducting another preliminary investigation, or to dismiss or move for dismissal of
the complaint or information with notice to the parties. 56

This power of review, however, does not preclude this Court and the Court of Appeals from intervening
and exercising our own powers of review with respect to the DOJ's findings. In the exceptional case in
which grave abuse of discretion is committed, as when a clear sufficiency or insufficiency of evidence to
support a finding of probable cause is ignored, the Court of Appeals may take cognizance of the case via
a petition under Rule 65 of the Rules of Court.57

This is precisely the situation in the case at bar. In deciding the respondents' Petition for Certiorari, the
Court of Appeals ruled that the DOJ committed palpable mistake in reversing the Final Resolution of the
Provincial Prosecutor and, in so doing, acted with grave abuse of discretion.
In the assailed decision, the Court of Appeals declared that the DOJ's dismissal of the charges against
petitioners, on the ground that the evidence on record did not support the same, was incorrect.
Furthermore, the appellate court held that the defenses of petitioners of good faith and lack of criminal
intent should not have been considered, inasmuch as the offenses charged were for violations of a
special law and are therefore characterized as mala prohibita, in which the intent to commit is immaterial.

After carefully reviewing the records of this case, we agree with the Court of Appeals' findings that there
was indeed probable cause to indict petitioners for the offenses charged.

In a preliminary investigation, a full and exhaustive presentation of the parties' evidence is not required,
but only such as may engender a well-grounded belief that an offense has been committed and that the
accused is probably guilty thereof.58 Certainly, it does not involve the determination of whether or not there
is evidence beyond reasonable doubt pointing to the guilt of the person. Only prima facie evidence is
required; or that which is, on its face, good and sufficient to establish a given fact, or the group or chain of
facts constituting the party's claim or defense; and which, if not rebutted or contradicted, will remain
sufficient.59 Therefore, matters of evidence are more appropriately presented and heard during the trial. 60

In the present case, petitioners were charged with violations of the SSS Law for their failure to either
promptly report some of the respondents for compulsory coverage/membership with the SSS or remit
their SSS contributions and loan amortizations. In support of their claims, respondents have attached unto
their Joint Complaint-Affidavit a summary of their unreported and unremitted SSS contributions, 61 as
gathered from the SSS Online Inquiry System, and a computation of their unreported and unremitted SSS
contributions.62

On the part of the petitioners, they have not denied their fault in not remitting the SSS contributions and
loan payments of the respondents in violation of Section 28, paragraphs (e), (f) and (h) of the SSS Law.
Instead, petitioners interposed the defenses of lack of criminal intent and good faith, as their failure to
remit was brought about by alleged economic difficulties, and they have already agreed to settle their
obligations with the SSS through a memorandum of agreement to pay in installments. 1avvphi1

As held by the Court of Appeals, the claims of good faith and absence of criminal intent for the petitioners'
acknowledged non-remittance of the respondents' contributions deserve scant consideration. The
violations charged in this case pertain to the SSS Law, which is a special law. As such, it belongs to a
class of offenses known as mala prohibita.

The law has long divided crimes into acts wrong in themselves called acts mala in se; and acts which
would not be wrong but for the fact that positive law forbids them, called acts mala prohibita. This
distinction is important with reference to the intent with which a wrongful act is done. The rule on the
subject is that in acts mala in se, the intent governs; but in acts mala prohibita, the only inquiry is, has the
law been violated?63 When an act is illegal, the intent of the offender is immaterial. 64

Thus, the petitioners' admission in the instant case of their violations of the provisions of the SSS Law is
more than enough to establish the existence of probable cause to prosecute them for the same.

WHEREFORE, in light of the foregoing, the Petition for Review under Rule 45 of the Rules of Court is
hereby DENIED.

The assailed Decision dated 30 September 2004 of the Court of Appeals in CA-G.R. SP No. 79101 and
the Resolution dated 9 May 2005 are hereby AFFIRMED. Costs against petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-39949 October 31, 1984

MANUEL H. SANTIAGO, ET AL., petitioners,

vs.
COURT OF APPEALS and SOCIAL SECURITY SYSTEM, respondents.

MELENCIO-HERRERA, J.: ñé+.£ªwph!1

A Petition to review the Decision of the then Court of Appeals (in CA-G.R. No. SP-01897-R), which
affirmed the Resolution of the Social Security Commission (in Case No. 1073-SSC), denying the petition
of Manuel H. Santiago, et als., to credit in their favor the salary deductions, by way of premium
contributions and salary loan installment payments, made by their former employer, I-Feng Enamelling
Company (Phil.) Inc., (the Employer, for brevity), but which the latter failed to remit to the Social Security
System (the System, for short).

There is no dispute as to the facts, as found by the then Court of Appeals.  têñ.£îhqwâ£

There is no dispute that petitioners were employees of I-Feng Enamelling Company

(Phil.) Inc. for several years, some from 1950 up to the time the company closed its
business on May 1, 1965, and that since the enactment of the Social Security Act,
Republic Act No. 1161, as amended, said employees have been paying, through salary
deductions, their personal contributions to the System There is likewise no dispute that
appellants, during their employment, also enjoyed salary loan benefits, their installment
payments thereto were likewise deducted and collected by their employer, and that said
employer failed to remit to the System not only the installment payments to their salary
loans in the amount of P7,940.13 but also the back premiums in the amount of
P137,787.90 as of July 1966, excluding of course the penalties therefor in the amount of
P63,734.97 as of August 9,1966 (Exhibit "B" ). 1

Petitioners sought to have the amounts credited in their favor but the Commission denied their petition,
stating: 
têñ.£îhqwâ£

WHEREFORE, in the light of the foregoing discussion, the stand taken by petitioners in
its case is untenable, hence their petition is hereby dismissed. If it is the claim of
petitioner that there are deductions made on their salaries which were not remitted to the
System then petitioners should have proceeded against the I-Feng Enamelling Company
(Phil.) Inc., their alleged employer.

The System is likewise directed to study and determine what action to take under the
premises in order to protect the interest of the System.

Petitioners appealed to the then Court of Appeals, which, in its Decision promulgated on December 23,
1974, upheld the findings of the Commission and affirmed the challenged Resolution. Petitioners are now
before us assailing the foregoing Resolution and Decision on the following grounds:
I  têñ.£îhqwâ£

The respondents erred in holding that there exists no contract Of agency between the
Social Security System and I-Feng Enamelling

Company (Phil.) Inc. in the collection of the salary loan installment payments from the petitioners and,
therefore, the said unremitted salary loan installment payments may not be credited to petitioners.  têñ.£îhqwâ£

II

The Respondents likewise erred in holding that the collections of premium contributions
by the I-Feng Enamelling Company (Phil.) Inc. is not a collection by the System and,
therefore, such unremitted premium contributions collected thru salary deductions from
the salaries of the petitioners by the I-Feng Enamelling Company (Phil.) Inc. and which
the latter failed to remit to the System may not be credited to the petitioners.

The sole issue for consideration is whether or not the premium contributions and payments of salary
loans by petitioners, which were deducted and collected from their salaries by their Employer, but hot
remitted to the System, should be credited in their favor by the System.

Petitioners argue that they are entitled to full credit for the unremitted premium contributions and salary
loan installment payments deducted from their wages because, by law, a contract of agency exists
between the SSS and the Employer in the collection of the salary loan installment payments, and
therefore, as such agent, payment to the Employer is payment to the principal, which is the System.

On the matter of payments of salary loans, SSS Circular No. 52 provides:  têñ.£îhqwâ£

(2) in case the borrower is in active employment, payment shall be made thru this
employer by means of salary deductions. For this purpose, he shall expressly authorize
in the application form his employer and the subsequent employers to whom he may later
on transfer to deduct from his salaries the installments due. The employer, in turn shall
remit to the System these installments in accordance with the procedure laid down in
heading VII hereof.

lt should be noted from the abovequoted rule that it is the borrower who expressly authorizes his
employer and subsequent employers to deduct from his salary the installments due on his salary loan.
The employer then remits the installments due to the System in accordance with rules that the System
has laid down. The employer, in so deducting the installment payments from the borrower, does so upon
the latter's authorization. The employer is merely the conduit for remitting the premiums for reasons of
administrative convenience and expediency iii order that SSS members may be served efficiently and
expeditiously. No contract of agency, in the legal sense, therefore may be said to exist between the
employer and the System. But petitioners also rely on the "Current Employer's Certification/Agreement"
(Exhibits "N-1 ", "U-1 ", "V1" and "WI ") providing that the employer is empowered:  têñ.£îhqwâ£

1. To deduct monthly from the salaries of said employee the installments due on the loan
that may be granted by virtue of this application and to remit the same to the System not
later than the 20th day of the month following the end of each calendar quarter, the
employer being entitled to deduct from the total quarterly collections P.07 for every
P10.00 thereof as his collection fee.

The foregoing reiterates the proviso in SSS Circular No. 52, reading:  têñ.£îhqwâ£
 V. Service and Collection Fee. -The System shall charge a service fee of P3.50 for every
approved application deductible in advance from the proceeds of the loan.

However, the employer shall be entitled to deduct from the total quarterly collections that he remits to the
System a collection fee of seven centavos (P.07) for every ten pesos (P10.00) or fraction thereof.

The entitlement to the collection fee by the employer neither makes the latter the agent of the System.
The fee was devised to encourage employers to be prompt in the remittance of their collections to the
System. As held by respondent Appellate Court:

To us, this negligible collection fee is only an incentive granted to all employers throughout the country
covered by the Social Security Act for their efforts in helping the System collect the necessary
contributions and payments made to the latter by the innumerable individual members. This incentive is
for administrative policy, efficiency and expediency with the end in view that the purposes for which the
System has been created by law shall be effectively carried out. ... .

To rule otherwise would be to open the door for unscrupulous employers to circumvent the law by not
remitting their collections of salary loans installment payments from employees since, anyway, the
System would credit them with what they had paid to the Employer even though the latter fails to remit
them to the System.

There is a difference, however, in respect of premium contributions, by reason of the explicit provision of
Section 22(b) of the Social Security Act, reading: 
têñ.£îhqwâ£

(b) The contributions payable under this Act in cases where an employer refuses or
neglects to pay the same shall be collected by the System in the same manner as taxes
are made collectible under the National Internal Revenue Code, as amended, Failure or
refusal of the employer to pay or remit the contributions herein prescribed shall not
prejudice the right of the covered employee to the benefits of the coverage.

Clearly, if the employer neglects to pay the premium contributions, the System may proceed with the
collection in the same manner as the Bureau of Internal Revenue in case of unpaid taxes. Plainly, too,
notwithstanding non-remittance by employers of the premium contributions, covered employees are
entitled to the benefits of the coverage, such as death sickness, retirement, and permanent disability
benefits.   These benefits continue to be enjoyed by the employees by operation of law and not, as
2

petitioners allege, because the premium contributions and salary loan installment payments have already
became the money of the System upon payment by the employees to the employer. It should be
remembered that funds contributed to the System by compulsion of law are funds belonging to the
members, which are merely held in trust by the government.3 The mentioned benefits, however, do not
include the salary loan privileges that member-employees apply for. The System may or may not grant
those loans pursuant to its rules and regulations. The salary loans are not covered by law but by contract
between the System as lender, and the private employee, as borrower.

Contrary to petitioners' contention, the penalty of 3% per month imposed on the employer, if any premium
contribution is not paid to the System, prescribed by Section 22 of the Act from the date the contribution
falls due until paid, does not necessarily make the employer the agent of the System. The prescribed
penalty is intended to exact compliance by the employer. It is evidently of a punitive character 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, establish gradually, and perfect a Social Security System which
shag be suitable to the needs of the people throughout the Philippines and to provide protection to
employees against the hazards of disability, sickness, old age, and death.'
WHEREFORE, the judgment under review is hereby modified in that only the premium contributions paid
by petitioners to its employer, the I-Feng Enamelling Company (Phil.) Inc., shall be credited in petitioners'
favor so that they may continue to enjoy the benefits of the coverage as provided by law. No costs.

SO ORDERED. 1äwphï1.ñët

Teehankee (Chairman), CJ., concurs.

Teehankee (Chairman), Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

Separate Opinions

PLANA, J., concurring:

Who bears the loss of unremitted SSS premium contributions and salary loan repayments previously
withheld from the salaries of employees in private enterprises in case the employer who has
misappropriated the same fails to make restitution? This is the problem posed in this SSS case.

The solution explained in the written ponencia of Madame Justice Melencio-Herrera, with whom I concur,
is in accordance with law. But the law as it stands seems inadequate to protect either the interest of the
employees or the Social Security System. Thus, with respect to unremitted salary loan re-payments, the
employees have to shoulder the loss, if the employer is insolvent. On the other hand, as to premium
contributions, the SSS and ultimately the members of the System must suffer the employer's misconduct
and insolvency.

 
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 183891               August 3, 2010

ROMARICO J. MENDOZA, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

CARPIO MORALES, J.:

For failure to remit the Social Security System (SSS) premium contributions of employees of the Summa
Alta Tierra Industries, Inc. (SATII) of which he was president, Romarico J. Mendoza (petitioner) was
convicted of violation of Section 22(a) and (d) vis-à-vis Section 28 of R.A. No. 8282 or the Social Security
Act of 1997 by the Regional Trial Court of Iligan City, Branch 4. His conviction was affirmed by the Court
of Appeals.1

The Information against petitioner2 reads:

xxxx

That sometime during the month of August 1998 to July 1999, in the City of Iligan, Philippines, and within
the jurisdiction of this Honorable Court, the said accused, being then the proprietor of Summa Alta
Tierra Industries, Inc., duly registered employer with the Social Security System (SSS), did then and there
willfully, unlawfully and feloniously fail and/or refuse to remit the SSS premium contributions in favor of its
employees amounting to ₱421, 151.09 to the prejudice of his employees.

Contrary to and in violation of Sec. 22(a) and (d) in relation to Sec. 28 of Republic Act No. 8282, as
amended (emphasis and underscoring supplied)

The monthly premium contributions of SATII employees to SSS which petitioner admittedly failed to remit
covered the period August 1998 to July 19993 amounting to ₱421,151.09 inclusive of penalties.4

After petitioner was advised by the SSS to pay the above-said amount, he proposed to settle it over a
period of 18 months5 which proposal the SSS approved by Memorandum of September 12, 2000. 6

Despite the grant of petitioner’s request for several extensions of time to settle the delinquency in
installments,7 petitioner failed, hence, his indictment.

Petitioner sought to exculpate himself by explaining that during the questioned period, SATII shut down
due to the general decline in the economy.8

Finding for the prosecution, the trial court, as reflected above, convicted petitioner, disposing as follows:

WHEREFORE, premises considered, the Court finds Romarico J. Mendoza, guilty as charged beyond
reasonable doubt. Accordingly, he is hereby meted the penalty of 6 years and 1 day to 8 years.
The accused is further ordered to pay the Social Security System the unpaid premium contributions of his
employees including the penalties in the sum of ₱421, 151.09.

SO ORDERED. 9 (emphasis supplied)

And as also reflected above, the Court of Appeals affirmed the trial court’s decision, by Decision of July
March 5, 2007,10 it noting that the Social Security Act is a special law, hence, lack of criminal intent or
good faith is not a defense in the commission of the proscribed act.

The appellate court brushed aside petitioner’s claim that he is merely a conduit of SATII and, therefore,
should not be held personally liable for its liabilities. It held that petitioner, as President, Chairman and
Chief Executive Officer of SATII, is the managing head who is liable for the act or omission penalized
under Section 28(f) of the Social Security Act.

Petitioner contended in his motion for reconsideration that Section 28(f) of the Act which reads:

(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or
any other institution, its managing head, directors or partners shall be liable for the penalties provided in
this Act for the offense.

should be interpreted as follows:

If an association, the one liable is the managing head; if a partnership, the ones liable are the partners;
and if a corporation, the ones liable are the directors. (underscoring supplied)

The appellate court denied petitioner’s motion, hence, the present petition for review on certiorari.

Petitioner maintains, inter alia, that the managing head or president or general manager of a corporation
is not among those specifically mentioned as liable in the above-quoted Section 28(f). And he calls
attention to an alleged congenital infirmity in the Information 11 in that he was charged as "proprietor" and
not as director of SATII.

Further, petitioner claims that the lower courts erred in penalizing him with six years and one day to eight
years of imprisonment considering the mitigating and alternative circumstances present, namely: his
being merely vicariously liable; his good faith in failing to remit the contributions; his payment of the
premium contributions of SATII out of his personal funds; and his being economically useful, given his
academic credentials, he having graduated from a prime university in Manila and being a reputable
businessman.

The petition lacks merit.

Remittance of contribution to the SSS under Section 22(a) of the Social Security Act is mandatory. United
Christian Missionary Society v. Social Security Commission 12 explicitly explains:

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. The prescribed
penalty is evidently of a punitive character, 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, 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, sickness, old age and death.’[Section 2, Social Security Act; Roman
Catholic Archbishop v. Social Security Commission, 1 SCRA 10, January 20, 1961] In this
concept, good faith or bad faith is rendered irrelevant, 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. From the moment the
remittance of premiums due is delayed, the penalty immediately attaches to the delayed premium
payments by force of law. (emphasis and underscoring supplied)

Failure to comply with the law being malum prohibitum, intent to commit it or good faith is immaterial. 13

The provision of the law being clear and unambiguous, petitioner’s interpretation that a "proprietor," as he
was designated in the Information, is not among those specifically mentioned under Sec. 28(f) as liable,
does not lie. For the word connotes management, control and power over a business entity. 14 There is
thus, as Garcia v. Social Security Commission Legal and Collection enjoins, 15

. . . no need to resort to statutory construction [for] Section 28(f) of the Social Security Law imposes
penalty on:

(1) the managing head;

(2) directors; or

(3) partners, for offenses committed by a juridical person. (emphasis supplied)

The term "managing head" in Section 28(f) is used, in its broadest connotation, not to any specific
organizational or managerial nomenclature. To heed petitioner’s reasoning would allow unscrupulous
businessmen to conveniently escape liability by the creative adoption of managerial titles. 1avvph!1

While the Court affirms the appellate court’s decision, there is a need to modify the penalty imposed on
petitioner. The appellate court affirmed the trial court’s imposition of penalty on the basis of Sec. 28(e) of
the Social Security Act which reads:

Sec. 28. Penal Clause. ─ (e) Whoever fails or refuses to comply with the provisions of this Act or with the
rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five
thousand pesos (₱5,0000.00) nor more than Twenty thousand pesos (₱5,000.00) nor more than Twenty
thousand pesos (₱20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more
than twelve (12) years or both, at the discretion of the court. x x x

The proper penalty for this specific offense committed by petitioner is, however, provided in Section 28
(h) of the same Act which reads:

Sec. 28. Penal Clause – (h) Any employer who after deducting the monthly contributions or loan
amortizations from his employee’s compensation, fails to remit the said deductions to the SSS within thirty
(30) days from the date they became due shall be presumed to have misappropriated such contributions
or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen [Art. 315] of
the Revised Penal Code. (emphasis and underscoring supplied)

Article 315 of the Revised Penal Code provides that the penalty in this case should be

x x x prision correccional in its maximum period to prision mayor in its minimum period, if the amount of
the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such amount exceeds the latter
sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for
each additional 10,000 pesos; but the penalty which may be imposed shall not exceed twenty years. In
such cases, and in connection with the accessory penalties which may be imposed and for the purpose of
the other provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the
case may be;

x x x x.

Since the above-quoted Sec. 28 (h) of the Social Security Act (a special law) adopted the penalty from the
Revised Penal Code, the Indeterminate Sentence Law also finds application. 16

Taking into account the misappropriated ₱421,151.09 and the Court’s discourse in People v. Gabres 17 on
the proper imposition of the indeterminate penalty in Article 315, the appropriate penalty in this case
should range from four (4) years and two (2) months of prision correccional, as minimum, to twenty (20)
years of reclusion temporal, as maximum.

WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-G.R. CR No. 27630 are
AFFIRMED with MODIFICATION. Petitioner is sentenced to an indeterminate prison term of four (4)
years and two (2) months of prision correccional, as minimum, to twenty (20) years of reclusion temporal,
as maximum.

Costs against petitioner.

SO ORDERED.

SPECIAL THIRD DIVISION

[G.R. No. 183891 : October 19, 2011]

ROMARICO J. MENDOZA, PETITIONER, VS. PEOPLE OF THE PHILIPPINES,

RESPONDENT.

RESOLUTION

BRION, J.:

We resolve the motion for reconsideration filed by petitioner Romarico J. Mendoza seeking
the reversal of our Decision dated August 3, 2010.  The Decision affirmed the petitioner's
conviction for his failure to remit the Social Security Service (SSS) contributions of his
employees.  The petitioner anchors the present motion on his supposed inclusion within the
coverage of Republic Act (RA) No. 9903 or the Social Security Condonation Law of 2009,
whose passage the petitioner claims to be a supervening event in his case.  He further
invokes the equal protection clause in support of his motion.

In our Decision dated August 3, 2010, we AFFIRMED, with modification, the decree of

conviction issued by both the trial and appellate courts for the petitioner's violation of
Section 22(a) and (d), in relation to Section 28 of RA No. 8282 or the Social Security Act of
1997.  To recall its highlights, our Decision emphasized that the petitioner readily admitted
during trial that he did not remit the SSS premium contributions of his employees at
Summa Alta Tierra Industries, Inc. from August 1998 to July 1999, in the amount of
P239,756.80; inclusive of penalties, this unremitted amount totaled to P421,151.09. The
petitioner's explanation for his failure to remit, which the trial court disbelieved, was that
during this period, Summa Alta Tierra Industries, Inc. shut down as a result of the general
decline in the economy. The petitioner pleaded good faith and lack of criminal intent as his
defenses.

We ruled that the decree of conviction was founded on proof beyond reasonable doubt,
based on the following considerations: first, the remittance of employee contributions to the
SSS is mandatory under RA No. 8282; and second, the failure to comply with a special law
being malum prohibitum, the defenses of good faith and lack of criminal intent are
immaterial.

The petitioner further argued that since he was designated in the Information as a

"proprietor," he was without criminal liability since "proprietors" are not among the
corporate officers specifically enumerated in Section 28(f) of RA No. 8282 to be criminally
liable for the violation of its provisions.  We rejected this argument based on our ruling
in Garcia v. Social Security Commission Legal and Collection.[1]  We ruled that to sustain the
petitioner's argument would be to allow the unscrupulous to conveniently escape liability
merely through the creative use of managerial titles.

After taking into account the Indeterminate Penalty Law and Article 315 of the Revised
Penal Code, we MODIFIED the penalty originally imposed by the trial court[2] and, instead,
decreed the penalty of four (4) years and two (2) months of prision correccional, as
minimum, to twenty (20) years of reclusion temporal, as maximum.

In the present motion for reconsideration, the petitioner points out that pending his appeal
with the Court of Appeals (CA), he voluntarily paid the SSS the amount of P239,756.80 to
settle his delinquency.[3]  Note that the petitioner also gave notice of this payment to the CA
via a Motion for Reconsideration and a Motion for New Trial.  Although the People did not
contest the fact of voluntary payment, the CA nevertheless denied the said motions.

The present motion for reconsideration rests on the following points:

First. On January 7, 2010, during the pendency of the petitioner's case before the Court,
then President Gloria Macapagal-Arroyo signed RA No. 9903 into law. RA No. 9903
mandates the effective withdrawal of all pending cases against employers who would remit
their delinquent contributions to the SSS within a specified period, viz., within six months
after the law's effectivity.[4] The petitioner claims that in view of RA No. 9903 and its
implementing rules, the settlement of his delinquent contributions in 2007 entitles him to an
acquittal.  He invokes the equal protection clause in support of his plea.

Second. The petitioner alternatively prays that should the Court find his above argument
wanting, he should still be acquitted since the prosecution failed to prove all the elements of
the crime charged.

Third. The petitioner prays that a fine be imposed, not imprisonment, should he be found
guilty.

The Solicitor General filed a Manifestation In Lieu of Comment and claims that the passage
of RA No. 9903 constituted a supervening event in the petitioner's case that supports the
petitioner's acquittal "[a]fter a conscientious review of the case."[5]

THE COURT'S RULING

The petitioner's arguments supporting his prayer for acquittal fail to convince us. However,
we find basis to allow waiver of the petitioner's liability for accrued penalties.

The petitioner's liability for the

crime is a settled matter

Upfront, we reject the petitioner's claim that the prosecution failed to prove all the elements
of the crime charged.  This is a matter that has been resolved in our Decision, and the
petitioner did not raise anything substantial to merit the reversal of our finding of guilt. To
reiterate, the petitioner's conviction was based on his admission that he failed to remit his
employees' contribution to the SSS.

The petitioner cannot benefit from the terms of RA No. 9903,

which condone only employers who pay their delinquencies
within six months from the law's effectivity

We note that the petitioner does not ask for the reversal of his conviction based on the
authority of RA No. 9903; he avoids making a straightforward claim because this law plainly
does not apply to him or to others in the same situation. The clear intent of the law is to
grant condonation only to employers with delinquent contributions or pending cases for their
delinquencies and who pay their delinquencies within the six (6)-month period set by the
law.  Mere payment of unpaid contributions does not suffice; it is payment within, and only
within, the six (6)-month availment period that triggers the applicability of RA No. 9903.

True, the petitioner's case was pending with us when RA No. 9903 was passed.
Unfortunately for him, he paid his delinquent SSS contributions in 2007.  By paying outside
of the availment period, the petitioner effectively placed himself outside the benevolent
sphere of RA No. 9903.  This is how the law is written: it condones employers -- and only
those employers -- with unpaid SSS contributions or with pending cases who pay within the
six (6)-month period following the law's date of effectivity. Dura lex, sed lex.

The petitioner's awareness that RA No. 9903 operates as discussed above is apparent in his
plea for equal protection.  In his motion, he states that ?

[he] is entitled under the equal protection clause to the dismissal of the case against him
since he had already paid the subject delinquent contributions due to the SSS which
accepted the payment as borne by the official receipt it issued (please see Annex "A"). The
equal protection clause requires that similar subjects, [sic] should not be treated differently,
so as to give undue favor to some and unjustly discriminate against others. The petitioner is
no more no less in the same situation as the employer who would enjoy freedom from
criminal prosecution upon payment in full of the delinquent contributions due and payable to
the SSS within six months from the effectivity of Republic Act No. 9903.[6]

The Court cannot amplify the scope of RA No. 9903 on the ground of equal protection, and
acquit the petitioner and other delinquent employers like him; it would in essence be an
amendment of RA No. 9903, an act of judicial legislation abjured by the trias
politica principle.[7]

RA No. 9903 creates two classifications of employers delinquent in remitting the SSS
contributions of their employees: (1) those delinquent employers who pay within the six
(6)-month period (the former group), and (2) those delinquent employers who
pay outside of this availment period (the latter group).  The creation of these two classes is
obvious and unavoidable when Section 2 and the last proviso of Section 4[8] of the law are
read together.  The same provisions show the law's intent to limit the benefit of condonation
to the former group only; had RA No. 9903 likewise intended to benefit the latter group,
which includes the petitioner, it would have expressly declared so.  Laws granting
condonation constitute an act of benevolence on the government's part, similar to tax
amnesty laws; their terms are strictly construed against the applicants.  Since the law itself
excludes the class of employers to which the petitioner belongs, no ground exists to justify
his acquittal. An implementing rule or regulation must conform to and be consistent with the
provisions of the enabling statute; it cannot amend the law either by abridging or expanding
its scope.[9]

For the same reason, we cannot grant the petitioner's prayer to impose a fine in lieu of
imprisonment; neither RA No. 8282 nor RA No. 9903 authorizes the Court to exercise this
option.

On the matter of equal protection, we stated in Tolentino v. Board of Accountancy, et al.

[10]
 that the guarantee simply means "that no person or class of persons shall be denied the
same protection of the laws which is enjoyed by other persons or other classes in the same
place and in like circumstances."  In People v. Cayat,[11] we further summarized the
jurisprudence on equal protection in this wise:

It is an established principle of constitutional law that the guaranty of the equal protection
of the laws is not violated by a legislation based on reasonable classification. And the
classification, to be reasonable, (1) must rest on substantial distinctions; (2) must be
germane to the purposes of the law; (3) must not be limited to existing conditions only; and
(4) must apply equally to all members of the same class.

The difference in the dates of payment of delinquent contributions provides a substantial

distinction between the two classes of employers.  In limiting the benefits of RA No. 9903 to
delinquent employers who pay within the six (6)-month period, the legislature refused to
allow a sweeping, non-discriminatory condonation to all delinquent employers, lest the
policy behind RA No. 8282 be undermined.

The petitioner is entitled to a waiver of his accrued penalties

Despite our discussion above, the petitioner's move to have our Decision reconsidered is not
entirely futile.  The one benefit the petitioner can obtain from RA No. 9903 is the waiver of
his accrued penalties, which remain unpaid in the amount of P181,394.29. This waiver is
derived from the last proviso of Section 4 of RA No. 9903:

Provided, further, That for reason of equity, employers who settled arrears in contributions
before the effectivity of this Act shall likewise have their accrued penalties waived.

This proviso is applicable to the petitioner who settled his contributions long before the
passage of the law. Applied to the petitioner, therefore, RA No. 9903 only works to allow
a waiver of his accrued penalties, but not the reversal of his conviction.

Referral to the Chief Executive for possible

exercise of executive clemency

We realize that with the affirmation of the petitioner's conviction for violation of RA No.
8282, he stands to suffer imprisonment for four (4) years and two (2) months of prision
correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum,
notwithstanding the payment of his delinquent contribution.

Under Article 5 of the Revised Penal Code,[12] the courts are bound to apply the law as it is
and impose the proper penalty, no matter how harsh it might be. The same provision,
however, gives the Court the discretion to recommend to the President actions it deems
appropriate but are beyond its power when it considers the penalty imposed as excessive.  
Although the petitioner was convicted under a special penal law, the Court is not precluded
from giving the Revised Penal Code suppletory application in light of Article 10[13] of the
same Code and our ruling in People v. Simon.[14]

WHEREFORE, the Court PARTIALLY GRANTS petitioner Romarico J. Mendoza's motion for

reconsideration.  The Court AFFIRMS the petitioner's conviction for violation of Section 22(a)
and (d), in relation to Section 28 of Republic Act No. 8282, and the petitioner is thus
sentenced to an indeterminate prison term of four (4) years and two (2) months of prision
correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum.  In
light of Section 4 of Republic Act No. 9903, the petitioner's liability for accrued penalties is
considered WAIVED.   Considering the circumstances of the case, the Court transmits the
case to the Chief Executive, through the Department of Justice, and RECOMMENDS the
grant of executive clemency to the petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 176150             June 25, 2008

IBARRA P. ORTEGA, petitioner,
vs.
SOCIAL SECURITY COMMISSION, and SOCIAL SECURITY SYSTEM, respondents.

DECISION

CARPIO MORALES, J.:

Petitioner Ibarra P. Ortega assails the Court of Appeals’ August 7, 2006 Decision 1 dismissing his petition
for review and upholding the denial by respondent Social Security Commission (SSC) of his application
for total permanent disability benefits, and the Resolution 2 of January 16, 2007 denying his motions for
reconsideration and inhibition.

Petitioner, a member of respondent Social Security System (SSS), filed claims for partial permanent
disability benefits on account of his condition of Generalized Arthritis and Partial Ankylosis, 3 which claims
the SSS granted for a total monthly pension of 23 months. 4

After the expiration of his disability pension, petitioner filed with the SSS Malabon Branch Office on April
26, 2000 a claim for total permanent disability benefits.5 His application, docketed as BO-0000-1755, was
denied, however, on the ground that he was already granted disability benefits for the same illness and
physical examination showed no progression of illness.6 Dr. Juanillo Descalzo III, SSS Malabon Branch
senior physician, observed that petitioner merely had a "slight limitation of grasping movement for both
hands."7

Aggrieved, petitioner filed before the SSC an unverified Petition of June 19, 2000, 8 alleging that the SSS
denied his application despite the fact that his attending physician, Dr. Rafael Recto, Jr., diagnosed him to
be suffering from Trigger finger 4th (L) and thumb (L)9 while another private medical practitioner, Dr.
Flo dela Cruz, diagnosed him to be also suffering from Bronchial Asthma, Hypertension and Gastro-
Esophageal Reflux Disease.10

Further claiming to be afflicted with rheumatoid arthritis of both hands affecting all fingers and both
palms,11 petitioner contended that the medical opinion of the SSS physician who interviewed him for less
than three minutes cannot prevail over the findings of his physicians who have been treating him over a
long period of time.

Before taking cognizance of his appeal, the SSC directed the exhaustion of administrative remedies, by
letter of June 30, 2000. The matter was thus referred to the SSS Office of the Medical Program Director
for review of petitioner’s disability claim.12

Meanwhile, by letter of July 17, 2000, the SSS Legal Department denied a reconsideration of the denial of
his claim,13 prompting petitioner to submit a letter-opposition of August 15, 2000. 14

Upon referral of the SSC, the SSS Medical Program Department, through Dr. Carlota A. Cruz-Tutaan and
Dr. Jesus S. Tan, confirmed that, upon examination of petitioner, there was no progression of his
illness,15 prompting petitioner to submit a letter-opposition of November 11, 2000 charging the SSS
medical officers of issuing fraudulent medical findings. 16 Unperturbed, the SSS Medical Program
Department stood its ground and denied with finality petitioner’s claim, by letter of November 22, 2000. 17

On January 29, 2001, SSC finally docketed petitioner’s June 19, 2000 petition as SSC Case No. 1-15115-
2001,18 after petitioner complied with SSC’s directives19 to verify the petition and submit certain document-
annexes. SSS then filed its Answer of May 31, 2001, 20 to which petitioner submitted a Reply of June 25,
2001.21 After the August 10, 2001 pre-hearing conference, 22 the SSS filed its Position Paper of September
7, 2001 while petitioner submitted his Reply of October 19, 2001.

By Resolution of April 3, 2002,23 the SSC denied petitioner’s claim for entitlement to total permanent
disability for lack of merit. And it opined that, considering that he had reached the retirement age of 60, on
March 19, 1998, with 41 contributions to his name, petitioner may opt:

(a) [t]o continue paying to the SSS monthly contributions (including employer’s share) on his own
to complete the required 120 monthly contributions in order to avail of the retirement pension
benefit;

(b) [to] leave his monthly contributions with the SSS for his and his family’s future benefits; or

(c) [to a]vail of the lump sum retirement benefit. 24

Petitioner moved for reconsideration of the Resolution. The SSC thus directed the SSS to file its
comment25 and, by a subsequent order, to conduct a domiciliary visit and physical examination on
petitioner to ascertain whether he could already qualify for such benefit. 26 In compliance therewith, Dr.
Rebecca Sison, SSS senior physician, examined petitioner on August 29, 2002 and found no sufficient
basis to warrant the granting of total permanent disability benefits to him. 27

Petitioner’s motion for reconsideration having been denied by Order 28 of January 29, 2003, petitioner
appealed via Rule 43 to the Court of Appeals 29 which promulgated in CA-G.R. SP No. 75653 the assailed
issuances affirming in toto the SSC Resolution and Order.

There is at the outset a need to thresh out procedural issues attending the petition drafted by petitioner
himself, apparently without the aid of counsel. While the petition was admittedly filed as a petition for
certiorari under Rule 65, it contains a rider averring that it was filed also as a petition for review on
certiorari under Rule 45.30

In not granting imprimatur to this type of unorthodox strategy, the Court ruled, in a similar case, 31 that a
party should not join both petitions in one pleading. A petition cannot be subsumed simultaneously under
Rule 45 and Rule 65 of the Rules of Court, nor may it delegate upon the court the task of determining
under which rule the petition should fall.32 It is a firm judicial policy that the remedies of appeal and
certiorari are mutually exclusive and not alternative or successive. 33

Palpably, petitioner crafted this unconventional two-headed petition under no other pretext but to second-
guess at the appropriate remedy. His apparent bewilderment led him to later rectify a supposed
typographical error in the caption such that instead of "petition for review," the title be read as a "petition
for certiorari."34 The subsequent filing of the Correction of Clerical Errors served no redeeming purpose as
it only evinced petitioner’s decision to consider the petition as a special civil action for certiorari, which is
an improper remedy.

It bears stressing that Rule 45 and Rule 65 pertain to different remedies and have distinct applications. 35 It
is axiomatic that the remedy of certiorari is not available where the petitioner has the remedy of appeal or
some other plain, speedy and adequate remedy in the course of law. 36 The petition for review under Rule
45 covers the mode of appeal from a judgment, final order, resolution or one which completely disposes
of the case, like the herein assailed Decision and Resolution of the appellate court. There being already a
final judgment at the time of the filing of the petition, a petition for review under Rule 45 is the appropriate
remedy.

Petitioner failed to carve out an exception to this rule, as he did not– and could not– illustrate the
inadequacy of an appeal as a remedy that could promptly relieve him from the injurious effects of the
assailed judgment.37 In fact, by seeking the same kind of reliefs via two remedies rolled into one pleading,
he implicitly admits that an appeal suffices. Moreover, the probability of divergent rulings, a scenario
transpiring in G & S Transport Corp. v. CA,38 is far from obtaining in this case since the assailed issuances
emanated from only one court and cannot be elevated separately in different fora.

While the Court may dismiss a petition outright for being an improper remedy, 39 it may, in certain
instances where a petition was filed on time both under Rules 45 and 65 and in the interest of justice,
proceed to review the substance of the petition and treat it as having been filed under Rule 45. 40 Either
way, however, the present petition just the same merits dismissal since it puts to issue questions of fact
rather than questions of law which are appropriate for review under a Rule 45 petition.

It is settled that the Court is not a trier of facts and accords great weight to the factual findings of lower
courts or agencies whose function is to resolve factual matters. 41 It is not for the Court to weigh evidence
all over again.42 Moreover, findings of fact of administrative agencies and quasi-judicial bodies, which
have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded
not only respect but finality when affirmed by the Court of Appeals. 43

The requisite quantum of proof in cases filed before administrative or quasi-judicial bodies is neither proof
beyond reasonable doubt nor preponderance of evidence. In this type of cases, a fact may be deemed
established if it is supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. 44 In this case, substantial evidence
abounds.

The conclusion that petitioner is not entitled to total permanent disability benefits under the Social
Security Law was reached after petitioner was examined not just by one but four SSS physicians, namely,
Dr. Juanillo Descalzo III, Dr. Carlota A. Cruz-Tutaan, Dr. Jesus S. Tan and Dr. Rebecca Sison.

The initial physical examination and interview revealed that petitioner had slight limitation of grasping
movement for both hands. According to Dr. Descalzo, this finding was not enough to grant an extension
of benefit since petitioner had already received benefits equivalent to 30% of the body. Responding to the
allegation that the April 2000 physical examination was performed in a short period of time, the doctor
credibly explained that petitioner’s movements were already being monitored and evaluated from a
distance as part of the examination of his extremities in order to minimize malingering and overacting. 45

Meanwhile, the medical findings of Dr. Carlota A. Cruz-Tutaan and Dr. Jesus S. Tan in August and
September 2000 were summarized as follows:

Heart:

- manifest regular rhythm

- no murmurs

Lungs:

- on ausculation showed no evidence of wheezing

 - breath sounds are normal and;

- he is not in a state of respiratory distress

Hypertension:

- Blood Pressure is 140/80, hence, under control

Extremities: (Hands)

- No deformities noted except for the right small finger, the distal interphalangeal joint is
bent at about 30°. No abnormal limitation of movement noted on all the fingers, grasping
has improved.46

Contrary to petitioner’s asseverations, the SSC did not ignore the certifications of petitioner’s attending
physicians as, in fact, it ordered the SSS in June 2001 to conduct an investigation as to the medical
findings and final diagnosis by his attending physicians.47 It was surfaced that petitioner’s medical records
in the custody of Dr. Flo dela Cruz could not be found as they were allegedly destroyed by
inundation.48 And it was found that the July 10, 2001 letter-certification by Dr. Rafael Recto, Jr. only
narrated the recurring condition of petitioner’s trigger finger, the administration to him of local steroid
injections, and the performance of surgical release on his left 4th trigger finger on June 16, 1998; and that
he was diagnosed on August 28, 2000 with mallet finger (R, 5th), for which he was advised to undergo
reconstructive surgery.49

Adopting a liberal attitude and exercising sound discretion, the SSC even directed the conduct of another
physical examination on petitioner to judiciously resolve his motion for reconsideration. Pursuant thereto,
Dr. Sison physically examined petitioner in August 2002, the results of which were reflected in a medical
report, viz:

Physical Examination:

General Survey: well nourished, well developed, conscious, coherent but talks with
sarcasm and arrogance.

EENT: normocephalic, pinkish conjunctiva, anicteric sclerae; negative tonsillo-pharyngeal

congestion

C/L: clear breath sounds, no wheezes; (-) dyspnea

Heart: normal rate, regular rhythm.

Abdomen: negative tenderness

Extremeties: no neurological and sensory deficit

no gross deformity, (+) scar, 4th finger (L)

no loss of grasping power for large and small objects

no loss of opposition between thumb and forefingers

can bend fully to reach toes

 can bend both knees fully without pain or difficulty

can raise both arms above shoulder level without pain and difficulty

can bend both elbows without limitation

The member was requested to submit recent ECG, x-rays and other laboratory work-up results
but he could not locate them during visit and would still look for the said medical documents and
mail them to SSS.

He was then advised to come to SSS, Diliman Branch for ECG and x-ray, however he refused.

He also refused to affix his signature on the medical field service form to confirm the visit of our
Medical Officer.

Based on these recent physical examination findings and functional assessment and the medical
certificate (Form MMD 102) with final diagnosis of Trigger Finger, there is no sufficient basis that
warrants the granting of Total Permanent disability.50 (Underscoring supplied)

Dr. Sison subsequently noted that petitioner’s Electrocardiograph, Chest X-ray, Kidney and Urinary
Bladder Ultrasound indicated his condition as normal,51 which conclusion was arrived at by going through
the same medical documents presented by petitioner following a series of tests conducted on him by
hospitals of his choice.

From the foregoing recital of petitioner’s medical history, the SSC concluded that petitioner is not entitled
to total permanent disability benefits under the Social Security Law, the pertinent provisions of which
read:

xxxx

(d) The following disabilities shall be deemed permanent total:

1. Complete loss of sight of both eyes;

2. Loss of two limbs at or above the ankle or wrists;

3. Permanent complete paralysis of two limbs;

4. Brain injury resulting to incurable imbecility or insanity; and

5. Such cases as determined and approved by the SSS.

xxxx

(f) If the disability is permanent partial and such disability occurs after thirty-six (36) monthly
contributions have been paid prior to the semester of disability, the benefit shall be the monthly
pension for permanent total disability payable not longer than the period designated in the
following schedule:

COMPLETE AND NUMBER

PERMANENT LOSS OF OF
USE OF MONTHS
 One thumb 10
One index finger 8
One middle finger 6
One ring finger 5
One little finger 3
One big toe 6
One hand 39
One arm 50
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 50
Sight of one eye 25

(g) The percentage degree of disability which is equivalent to the ratio that the designated
number of months of compensability bears to seventy-five (75), rounded to the next higher
integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but
shall be additive for deteriorating and related permanent partial disabilities to a maximum of one
hundred percent (100%), in which case, the member shall be deemed as permanently totally
disabled.52

Indeed, the evidence indicates that petitioner’s condition at the time material to the case does not fall
under the enumeration in the above-quoted provisions of the Social Security Law. Moreover, as correctly
held by the appellate court, the proviso of such provisions on the percentage degree of disability applies
when there is a related deterioration of the illness previously considered as partial permanent disability. In
this case, there is dearth of evidence on the proposition that petitioner’s array of illnesses is related to
Generalized Arthritis and Partial Ankylosis of the specific body parts.

Petitioner’s reliance on jurisprudence53 on work-connected disability claims insofar as it relates to a

demonstration of disability to perform his trade and profession 54 is misplaced.

Claims under the Labor Code for compensation and under the Social Security Law for benefits are not the
same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code govern
compensability of work-related disabilities or when there is loss of income due to work-connected or work-
aggravated injury or illness.55 On the other hand, the benefits under the Social Security Law are intended
to provide insurance or protection against the hazards or risks of disability, sickness, old age or
death, inter alia, irrespective of whether they arose from or in the course of the
employment.56 And unlike under the Social Security Law, a disability is total and permanent under the
Labor Code if as a result of the injury or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of
his body parts.57

The Court notes that the main issue petitioner proffers is whether he is entitled to total permanent
disability benefits from the SSS given his "angioplasty operation of the heart, coronary artery disease,
ischemic heart disease, severe hypertension and a host of other serious illnesses filed with the SSS[.]" 58
A perusal of the records shows that when the case was already submitted for decision before the
appellate court, petitioner manifested that he suffered a heart attack on February 25, 2004, 59 for which he
claimed to have undergone a coronary angiogram on March 9, 2005 and a coronary angioplasty on
September 27, 2005 at the Philippine Heart Center. 60

Unfortunate as these events were, the appellate court correctly ruled that it could not consider such
allegation of subsequent events since "a factual question may not be raised for the first time on appeal[,]
and documents forming no part of the proofs before the appellate court will not be considered in disposing
of the issues of an action."61

The issues in every case are limited to those presented in the pleadings. The object of the pleadings is to
draw the lines of battle between the litigants and to indicate fairly the nature of the claims or defenses of

both parties.62 A change of theory on appeal is not allowed.63 In this case, the matter of petitioner’s serious
heart condition was not raised in his application before the SSS or in his June 19, 2000 petition before the
SSC.

Fair play dictates that the SSS be afforded the opportunity to properly meet the issue 64 with respect to the
new ailments besetting petitioner, in line with the actual practice that only qualified government
physicians, by virtue of their oath as civil service officials, are competent to examine persons and issue
medical certificates which will be used by the government for a specific official purpose. 65 This holds
greater significance where there exist differences or doubts as to the medical condition of the person.

In this case, the SSS medical examiners are tasked by law to analyze the extent of personal incapacity
resulting from disease or injury. Oftentimes, a physician who is adequately versed in the knowledge of
anatomy and physiology will find himself deficient when called upon to express an opinion on the
permanent changes resulting from a disability. Unlike the general practitioner who merely concerns
himself with the examination of his patient for purposes of diagnosis and treatment, the medical examiner
has to consider varied factors and ascertain the claimant’s related history and subjective complaints. 66 The
members of this Court cannot strip their judicial robe and don the physician’s gown, so to speak, in a
pretense to correlate variances in medical findings.

Finding no cogent reason to discuss the ancillary issues, the Court dismisses the petition, without
prejudice to the filing of a new application by petitioner who is not left without any recourse in his legal
bout respecting his supervening claims anchored mainly on Coronary Artery Disease 1VD and Diabetes
Mellitus Type 2, these illnesses having been found to be dissimilar from the subject matter of the present
action.67

WHEREFORE, the petition is, in light of the foregoing disquisitions, DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 170195               March 28, 2011

SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, Petitioner,

vs.
TERESA G. FAVILA, Respondent.

DECISION

DEL CASTILLO, J.:

A spouse who claims entitlement to death benefits as a primary beneficiary under the Social Security Law
must establish two qualifying factors, to wit: (1) that he/she is the legitimate spouse; and (2) that he/she is
dependent upon the member for support.1

This Petition for Review on Certiorari assails the Decision2 dated May 24, 2005 of the Court of Appeals
(CA) in CA-G.R. SP No. 82763 which reversed and set aside the Resolution 3 dated June 4, 2003 and
Order4 dated January 21, 2004 of the Social Security Commission (SSC) in SSC Case No. 8-15348-02.
Likewise assailed is the CA Resolution5 dated October 17, 2005 denying the Motion for Reconsideration
thereto.

Factual Antecedents

On August 5, 2002, respondent Teresa G. Favila (Teresa) filed a Petition 6 before petitioner SSC docketed
as SSC Case No. 8-15348-02. She averred therein that after she was married to Florante Favila
(Florante) on January 17, 1970, the latter designated her as the sole beneficiary in the E-1 Form he
submitted before petitioner Social Security System (SSS), Quezon City Branch on June 30, 1970. When
they begot their children Jofel, Floresa and Florante II, her husband likewise designated each one of them
as beneficiaries. Teresa further averred that when Florante died on February 1, 1997, his pension
benefits under the SSS were given to their only minor child at that time, Florante II, but only until his
emancipation at age 21. Believing that as the surviving legal wife she is likewise entitled to receive
Florante’s pension benefits, Teresa subsequently filed her claim for said benefits before the SSS. The
SSS, however, denied the claim in a letter dated January 31, 2002, hence, the petition.

In its Answer,7 SSS averred that on May 6, 1999, the claim for Florante’s pension benefits was initially
settled in favor of Teresa as guardian of the minor Florante II. Per its records, Teresa was paid the
monthly pension for a total period of 57 months or from February 1997 to October 2001 when Florante II
reached the age of 21. The claim was, however, re-adjudicated on July 11, 2002 and the balance of the
five-year guaranteed pension was again settled in favor of Florante II. 8 SSS also alleged that Estelita
Ramos, sister of Florante, wrote a letter9 stating that her brother had long been separated from Teresa.
She alleged therein that the couple lived together for only ten years and then decided to go their separate
ways because Teresa had an affair with a married man with whom, as Teresa herself allegedly admitted,
she slept with four times a week. SSS also averred that an interview conducted in Teresa’s neighborhood
in Tondo, Manila on September 18, 1998 revealed that although she did not cohabit with another man
after her separation with Florante, there were rumors that she had an affair with a police officer. To
support Teresa’s non-entitlement to the benefits claimed, SSS cited the provisions of Sections 8(k) and
13 of Republic Act (RA) No. 1161, as amended otherwise known as Social Security (SS) Law. 10
Ruling of the Social Security Commission

In a Resolution11 dated June 4, 2003, SSC held that the surviving spouse’s entitlement to an SSS
member’s death benefits is dependent on two factors which must concur at the time of the latter’s death,
to wit: (1) legality of the marital relationship; and (2) dependency for support. As to dependency for
support, the SSC opined that same is affected by factors such as separation de facto of the spouses,
marital infidelity and such other grounds sufficient to disinherit a spouse under the law. Thus, although
Teresa is the legal spouse and one of Florante’s designated beneficiaries, the SSC ruled that she is
disqualified from claiming the death benefits because she was deemed not dependent for support from
Florante due to marital infidelity. Under Section 8(k) of the SS Law, the dependent spouse until she
remarries is entitled to death benefits as a primary beneficiary, together with the deceased member’s
legitimate minor children. According to SSC, the word "remarry" under said provision has been interpreted
as to include a spouse who cohabits with a person other than his/her deceased spouse or is in an illicit
relationship. This is for the reason that no support is due to such a spouse and to allow him/her to enjoy
the member’s death benefits would be tantamount to circumvention of the law. Even if a spouse did not
cohabit with another, SSC went on to state that for purposes of the SS Law, it is sufficient that the
separation in-fact of the spouses was precipitated by an adulterous act since the actual absence of
support from the member is evident from such separation. Notable in this case is that while Teresa denied
having remarried or cohabited with another man, she did not, however, deny her having an adulterous
relationship. SSC therefore concluded that Teresa was not dependent upon Florante for support and
consequently disqualified her from enjoying her husband’s death benefits.

SSC further held that Teresa did not timely contest her non-entitlement to the award of benefits. It was
only when Florante II’s pension was stopped that she deemed it wise to file her claim. For SSC, Teresa’s
long silence led SSS to believe that she really suffered from a disqualification as a beneficiary, otherwise
she would have immediately protested her non-entitlement. It thus opined that Teresa is now estopped
from claiming the benefits. Hence, SSC dismissed the petition for lack of merit.

As Teresa’s Motion for Reconsideration12 of said Resolution was also denied by SSC in an Order 13 dated
January 21, 2004, she sought recourse before the CA through a Petition for Review 14 under Rule 43.

Ruling of the Court of Appeals

Before the CA, Teresa insisted that SSS should have granted her claim for death benefits because she is
undisputedly the legal surviving spouse of Florante and is therefore entitled to such benefits as primary
beneficiary. She claimed that the SSC’s finding that she was not dependent upon Florante for support is
unfair because the fact still remains that she was legally married to Florante and that her alleged illicit
affair with another man was never sufficiently established. In fact, SSS admitted that there was no
concrete evidence or proof of her amorous relationship with another man. Moreover, Teresa found SSS’s
strict interpretation of the SS Law as not only anti-labor but also anti-family. It is anti-labor in the sense
that it does not work to the benefit of a deceased employee’s primary beneficiaries and anti-family
because in denying benefits to surviving spouses, it destroys family solidarity. In sum, Teresa prayed for
the reversal and setting aside of the assailed Resolution and Order of the SSC.

The SSC and the SSS through the Office of the Solicitor General (OSG) filed their respective
Comments15 to the petition.

SSC contended that the word "spouse" under Section 8(k) of the SS Law is qualified by the word
"dependent". Thus, to be entitled to death benefits under said law, a surviving spouse must have been
dependent upon the member spouse for support during the latter’s lifetime including the very moment of
contingency. According to it, the fact of dependency is a mandatory requirement of law. If it is otherwise,
the law would have simply used the word "spouse" without the descriptive word "dependent". In this case,
SSC emphasized that Teresa never denied the fact that she and Florante were already separated and
living in different houses when the contingency happened. Given this fact and since the conduct of
investigation is standard operating procedure for SSS, it being under legal obligation to determine prior to
the award of death benefit whether the supposed beneficiary is actually receiving support from the
member or if such support was rightfully withdrawn prior to the contingency, SSS conducted an
investigation with respect to the couple’s separation. And as said investigation revealed tales of Teresa’s
adulterous relationship with another man, SSS therefore correctly adjudicated the entire death benefits in
favor of Florante II.

To negate Teresa’s claim that SSS failed to establish her marital infidelity, SSC enumerated the following
evidence: (1) the letter16 of Florante’s sister, Estelita Ramos, stating that the main reasons why Teresa
and Florante separated after only 10 years of marriage were Teresa’s adulterous relationship with another
man and her propensity for gambling; (2) the Memorandum17 dated August 30, 2002 of SSS Senior
Analysts Liza Agilles and Jana Simpas which ran through the facts in connection with the claim for death
benefits accruing from Florante’s death. It indicates therein, among others, that based on interviews
conducted in Teresa’s neighborhood, she did not cohabit with another man after her separation from her
husband although there were rumors that she and a certain police officer had an affair. However, there is
not enough proof to establish their relationship as Teresa and her paramour did not live together as
husband and wife; and (3) the field investigation report 18 of SSS Senior Analyst Fernando F. Nicolas which
yielded the same findings. The SSC deemed the foregoing evidence as substantial to support the
conclusion that Teresa indeed had an illicit relationship with another man.

SSC also defended SSS’s interpretation of the SS law and argued that it is neither anti-labor nor anti-
family. It is not anti-labor because the subject matter of the case is covered by the SS Law and hence,
Labor Law has no application. It is likewise not anti-family because SSS has nothing to do with Teresa’s
separation from her husband which resulted to the latter’s withdrawal of support for her. At any rate, SSC
advanced that even if Teresa is entitled to the benefits claimed, same have already been received in its
entirety by Florante II so that no more benefits are due to Florante’s other beneficiaries. Hence, SSC
prayed for the dismissal of the petition.

For its part, the OSG likewise believed that Teresa is not entitled to the benefits claimed as she lacks the
requirement that the wife must be dependent upon the member for support. This is in view of the rule that
beneficiaries under the SS Law need not be the legal heirs but those who are dependent upon him for
support. Moreover, it noted that Teresa did not file a protest before the SSS to contest the award of the
five-year guaranteed pension to their son Florante II. It posited that because of this, Teresa cannot raise
the matter for the first time before the courts. The OSG also believed that no further benefits are due to
Florante’s other beneficiaries considering that the balance of the five-year guaranteed pension has
already been settled.

In a Decision19 dated May 24, 2005, the CA found Teresa’s petition impressed with merit. It gave weight to
the fact that she is a primary beneficiary because she is the lawful surviving spouse of Florante and in
addition, she was designated by Florante as such beneficiary. There was no legal separation or
annulment of marriage that could have disqualified her from claiming the death benefits and that her
designation as beneficiary had not been invalidated by any court of law. The CA cited Social Security
System v. Davac20 where it was held that it is only when there is no designation of beneficiary or when the
designation is void that the SSS would have to decide who is entitled to claim the benefits. It opined that
once a spouse is designated by an SSS member as his/her beneficiary, same forecloses any inquiry as to
whether the spouse is indeed a dependent deriving support from the member. Thus, when SSS
conducted an investigation to determine whether Teresa is indeed dependent upon Florante, SSS was
unilaterally adding a requirement not imposed by law which makes it very difficult for designated primary
beneficiaries to claim for benefits. To make things worse, the result of said investigation which became
the basis of Teresa’s non-entitlement to the benefits claimed was culled from unfounded rumors.

Moreover, the CA saw SSS’s conduct of investigations to be violative of the constitutional right to privacy.
It lamented that SSS has no power to investigate and pry into the member’s and his/her family’s personal
lives and should cease and desist from conducting such investigations. Ultimately, the CA reversed and
set aside the assailed Resolution and Order of the SSC and directed SSS to pay Teresa’s monetary
claims which included the monthly pension due her as the surviving spouse and the lump sum benefit
equivalent to thirty-six times the monthly pension.

SSC filed its Motion for Reconsideration21 of said Decision but same was denied in a Resolution 22 dated
October 17, 2005. Impleading SSS as co-petitioner, SSC thus filed this petition for review on certiorari.

Issue

Is Teresa a primary beneficiary in contemplation of the Social Security Law as to be entitled to death
benefits accruing from the death of Florante?

Petitioners’ Arguments

SSC reiterates the argument that to be entitled to death benefits, a surviving spouse must have been
actually dependent for support upon the member spouse during the latter’s lifetime including the very
moment of contingency. To it, this is clearly the intention of the legislature; otherwise, Section 8(k) of the
SS law would have simply stated "spouse" without the descriptive word "dependent". Here, although
Teresa is without question Florante’s legal spouse, she is not the "dependent spouse" referred to in the
said provision of the law. Given the reason for the couple’s separation for about 17 years prior to
Florante’s death and in the absence of proof that during said period Teresa relied upon Florante for
support, there is therefore no reason to infer that Teresa is a dependent spouse entitled to her husband’s
death benefits.

SSC adds that in the process of determining non-dependency status of a spouse, conviction of a crime
involving marital infidelity is not an absolute necessity. It is sufficient for purposes of the award of death
benefits that a thorough investigation was conducted by SSS through interviews of impartial witnesses
and that same showed that the spouse-beneficiary committed an act of marital infidelity which caused the
member to withdraw support from his spouse. In this case, no less than Florante’s sister, who does not
stand to benefit from the present controversy, revealed that Teresa frequented a casino and was disloyal
to her husband so that they separated after only 10 years of marriage. This was affirmed through the
interview conducted in Teresa’s neighborhood. Hence, it is not true that Teresa’s marital infidelity was not
sufficiently proven.

Likewise, SSC contends that contrary to the CA’s posture, a member’s designation of a primary
beneficiary does not guarantee the latter’s entitlement to death benefits because such entitlement is
determined only at the time of happening of the contingency. This is because there may have been
events which supervened subsequent to the designation which would otherwise disqualify the person
designated as beneficiary such as emancipation of a member’s child or separation from his/her spouse.
This is actually the same reason why SSS must conduct an investigation of all claims for benefits.

Moreover, SSC justifies SSS’s conduct of investigation and argues that said office did not intrude into
Florante’s and his family’s personal lives as the investigation did not aggravate the situation insofar as
Teresa’s relationship with her deceased husband was concerned. It merely led to the discovery of the true
state of affairs between them so that based on it, the death benefits were awarded to the rightful primary
beneficiary, Florante II. Clearly, such an investigation is an essential part of adjudication process, not only
in this case but also in all claims for benefits filed before SSS. Thus, SSC prays for the setting aside of
the assailed CA Decision and Resolution.

Respondent’s Arguments

To support her entitlement to the death benefits claimed, Teresa cited Ceneta v. Social Security
System,23 a case decided by the CA which declared, viz:
Clearly then, the term dependent spouse, who must not re-marry in order to be entitled to the SSS death
benefits accruing from the death of his/her spouse, refers to the legal spouse who, under the law, is
entitled to receive support from the other spouse.

Indubitably, petitioner, having been legally married to the deceased SSS member until the latter’s death
and despite his subsequent marriage to respondent Carolina, is deemed dependent for support under
Article 68 of the Family Code. Said provision reads:

‘The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and render
mutual help and support’

Based on said law, petitioner is, therefore, entitled to the claimed death benefits. Her marriage to the
deceased not having been lawfully severed, the law disputably presumes her to be continually dependent
for support.

No evidence or even a mere inference can be adduced to prove that petitioner ceased to derive all her
needs indispensable for her sustenance, and thus, she remains a legal dependent. A dependent spouse
is primary beneficiary entitled to the death benefits of a deceased SSS member spouse unless he or she
remarries. A mere allegation of adultery not substantially proven can not validly deprive petitioner of the
support referred to under the law, and consequently, of her claim under the SSS Law.

Thus, being the legal wife, Teresa asserts that she is presumed to be dependent upon Florante for
support. The bare allegation of Estelita that she had an affair with another man is insufficient to deprive
her of support from her husband under the law and, conversely, of the death benefits from SSS.
Moreover, Teresa points out that despite their separation and the rumors regarding her infidelity, Florante
did not withdraw her designation as primary beneficiary. Under this circumstance, Teresa believes that
Florante really intended for her to receive the benefits from SSS.

Teresa also agrees with the CA’s finding that SSS unilaterally added to the

requirements of the law the condition that a surviving spouse must be actually dependent for support
upon the member spouse during the latter’s lifetime. She avers that this could not have been the
lawmakers’ intention as it would make it difficult or even impossible for beneficiaries to claim for benefits
under the SS Law. She stresses that courts (or quasi-judicial agencies for that matter), may not, in the
guise of interpretation, enlarge the scope of a statute and include therein situations not provided nor
intended by lawmakers. Courts are not authorized to insert into the law what they think should be in it or
to supply what they think the legislature would have supplied if its attention had been called to the
omission. Hence, Teresa prays that the assailed CA Decision and Resolution be affirmed in toto.

Our Ruling

We find merit in the petition.

The law in force at the time of Florante’s death was RA 1161. Section 8 (e) and (k) of said law provides:

Section 8. Terms Defined. For the purposes of this Act, the following terms shall, unless the context
indicates otherwise, have the following meanings:

xxxx

(e) Dependent – The legitimate, legitimated or legally adopted child who is unmarried, not gainfully
employed and not over twenty-one years of age, or over twenty-one years of age, provided that he is
congenitally incapacitated and incapable of self-support, physically or mentally; the legitimate spouse
dependent for support upon the employee; and the legitimate parents wholly dependent upon the
covered employee for regular support.

xxxx

(k) Beneficiaries  – The dependent spouse until he remarries and dependent children, who shall be the
primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on
dependent children, the legitimate descendants and illegitimate children who shall be the secondary
beneficiaries. In the absence of any of the foregoing, any other person designated by the covered
employee as secondary beneficiary. (Emphasis ours.)

From the above-quoted provisions, it is plain that for a spouse to qualify as a primary beneficiary under
paragraph (k) thereof, he/she must not only be a legitimate spouse but also a dependent as defined under
paragraph (e), that is, one who is dependent upon the member for support. Paragraphs (e) and (k) of
Section 8 of RA 1161 are very clear. "Hence, we need only apply the law. Under the principles of
statutory construction, if a statute is clear, plain and free from ambiguity, it must be given its literal
meaning and applied without attempted interpretation. This plain meaning rule or verba legis, derived
from the maxim  index animo sermo est (speech is the index of intention), rests on the valid presumption
that the words employed by the legislature in a statute correctly express its intent by the use of such
words as are found in the statute. Verba legis non est recedendum, or, from the words of a statute there
should be no departure."24

Thus, in Social Security System v. Aguas25 we held that:

[I]t bears stressing that for her (the claimant) to qualify as a primary beneficiary, she must prove that she
was ‘the legitimate spouse dependent for support from the employee.’ The claimant-spouse must
therefore establish two qualifying factors: (1) that she is the legitimate spouse, and (2) that she is
dependent upon the member for support. x x x

Here, there is no question that Teresa was Florante’s legal wife. What is at point, however, is whether
Teresa is dependent upon Florante for support in order for her to fall under the term "dependent spouse"
under Section 8(k) of RA 1161.

What the SSC relies on in concluding that Teresa was not dependent upon Florante for support during
their separation for 17 years was its findings that Teresa maintained an illicit relationship with another
man. Teresa however counters that such illicit relationship has not been sufficiently established and,
hence, as the legal wife, she is presumed to be continually dependent upon

Florante for support.

We agree with Teresa that her alleged affair with another man was not sufficiently established. The
Memorandum of SSS Senior Analysts Liza Agilles and Jana Simpas reveals that it was Florante who was
in fact living with a common law wife, Susan Favila (Susan) and their three minor children at the time of
his death. Susan even filed her own claim for death benefits with the SSS but same was, however,
denied. With respect to Teresa, we quote the pertinent portions of said Memorandum, viz:

SUSAN SUBMITTED A LETTER SIGNED BY ESTELITA RAMOS, ELDER SISTER OF THE DECEASED
STATING THAT MEMBER WAS SEPARATED FROM TERESA AFTER 10 YEARS OF LIVING IN FOR
THE REASONS THAT HIS WIFE HAD COHABITED WITH A MARRIED MAN. ALSO, PER ESTELITA,
THE WIFE HERSELF ADMITTED THAT THE MAN SLEPT WITH HER 4 TIMES A WEEK.
TERESA SUBMITTED AN AFFIDAVIT EXECUTED BY NAPOLEON AND JOSEFINA, BROTHER AND
SISTER (IN) LAW, RESPECTIVELY, OF THE DECEASED THAT TERESA HAS NEVER RE-MARRIED
NOR COHABITED WITH ANOTHER MAN.

BASED ON THE INTERVIEW (DATED 9/18/98) CONDUCTED FROM THE NEIGHBORHOOD OF

TERESA AND BGY. KAGAWAD IN TONDO, MANILA, IT WAS ESTABLISHED THAT TERESA DID
NOT COHABIT WITH ANOTHER MAN AFTER THE SEPARATION ALTHOUGH THERE ARE
RUMORS THAT SHE AND A CERTAIN POLICE OFFICER HAD AN AFFAIR. BUT [NOT] ENOUGH
PROOF TO ESTABLISH THEIR RELATIONSHIP SINCE THEY DID NOT LIVE-IN AS HUSBAND AND
WIFE.

BASED ON THE INTERVIEW WITH JOSEFINA FAVILA, MEMBER AND TERESA WERE SEPARATED
FOR A NUMBER OF YEARS AND THAT SHE HAD NO KNOWLEDGE IF TERESA COHABITED WITH
ANOTHER MAN ALTHOUGH SHE HEARD OF THE RUMORS THAT SAID WIFE HAD AN AFFAIR
WITH ANOTHER MAN. NAPOLEON WAS NOT INTERVIEWED. (Emphasis ours)

While SSC believes that the foregoing constitutes substantial evidence of Teresa’s amorous relationship,
we, however, find otherwise. It is not hard to see that Estelita’s claim of Teresa’s cohabitation with a
married man is a mere allegation without proof. Likewise, the interviews conducted by SSS revealed
rumors only that Teresa had an affair with a certain police officer. Notably, not one from those interviewed
confirmed that such an affair indeed existed. "The basic rule is that mere allegation is not evidence and is
not equivalent to proof. Charges based on mere suspicion and speculation likewise cannot be given
credence."26 "Mere uncorroborated hearsay or rumor does not constitute substantial
evidence."27 Remarkably, the Memorandum itself stated that there is not enough proof to establish
Teresa’s alleged relationship with another man since they did not live as husband and wife.

This notwithstanding, we still find untenable Teresa’s assertion that being the legal wife, she is presumed
dependent upon Florante for support. In Re: Application for Survivor’s Benefits of Manlavi,28 this Court
defined "dependent" as "one who derives his or her main support from another [or] relying on, or subject
to, someone else for support; not able to exist or sustain oneself, or to perform anything without the will,
power or aid of someone else." Although therein, the wife’s marriage to the deceased husband was not
dissolved prior to the latter’s death, the Court denied the wife’s claim for survivorship benefits from the
Government Service Insurance System (GSIS) because the wife abandoned her family to live with other
men for more than 17 years until her husband died. Her whereabouts was unknown to her family and she
never attempted to communicate with them or even check up on the well-being of her daughter with the
deceased. From these, the Court concluded that the wife during said period was not dependent on her
husband for any support, financial or otherwise, hence, she is not a dependent within the contemplation of
RA 829129 as to be entitled to survivorship benefits. It is worthy to note that under Section 2(f) RA 8291, a
legitimate spouse dependent for support is likewise included in the enumeration of dependents and under
Section 2(g), the legal dependent spouse in the enumeration of primary beneficiaries.

Under this premise, we declared in Aguas that "the obvious conclusion is that a wife who is already
separated de facto from her husband cannot be said to be ‘dependent for support’ upon the husband,
absent any showing to the contrary. Conversely, if it is proved that the husband and wife were still living
together at the time of his death, it would be safe to presume that she was dependent on the husband for
support, unless it is shown that she is capable of providing for herself." 30 Hence, we held therein that the
wife-claimant had the burden to prove that all the statutory requirements have been complied with,
particularly her dependency on her husband at the time of his death. And, while said wife-claimant was
the legitimate wife of the deceased, we ruled that she is not qualified as a primary beneficiary since she
failed to present any proof to show that at the time of her husband’s death, she was still dependent on
him for support even if they were already living separately.

In this case, aside from Teresa’s bare allegation that she was dependent upon her husband for support
and her misplaced reliance on the presumption of dependency by reason of her valid and then subsisting
marriage with Florante, Teresa has not presented sufficient evidence to discharge her burden of proving
that she was dependent upon her husband for support at the time of his death. She could have done this
by submitting affidavits of reputable and disinterested persons who have knowledge that during her
separation with Florante, she does not have a known trade, business, profession or lawful occupation
from which she derives income sufficient for her support and such other evidence tending to prove her
claim of dependency. While we note from the abovementioned SSS Memorandum that Teresa submitted
affidavits executed by Napoleon Favila and Josefina Favila, same only pertained to the fact that she
never remarried nor cohabited with another man. On the contrary, what is clear is that she and Florante
had already been separated for about 17 years prior to the latter’s death as Florante was in fact, living
with his common law wife when he died. Suffice it to say that "[w]hoever claims entitlement to the benefits
provided by law should establish his or her right thereto by substantial evidence." 31 Hence, for Teresa’s
failure to show that despite their separation she was dependent upon Florante for support at the time of
his death, Teresa cannot qualify as a primary beneficiary.  Hence, she is not entitled to the death benefits
1âwphi1

accruing on account of Florante’s death.

As a final note, we do not agree with the CA’s pronouncement that the investigations conducted by SSS
violate a person’s right to privacy. SSS, as the primary institution in charge of extending social security
protection to workers and their beneficiaries is mandated by Section 4(b)(7) of RA 8282 32 to require
reports, compilations and analyses of statistical and economic data and to make an investigation as may
be needed for its proper administration and development. Precisely, the investigations conducted by SSS
are appropriate in order to ensure that the benefits provided under the SS Law are received by the rightful
beneficiaries. It is not hard to see that such measure is necessary for the system’s proper administration,
otherwise, it will be swamped with bogus claims that will pointlessly deplete its funds. Such scenario will
certainly frustrate the purpose of the law which is to provide covered employees and their families
protection against the hazards of disability, sickness, old age and death, with a view to promoting their
well-being in the spirit of social justice. Moreover and as correctly pointed out by SSC, such investigations
are likewise necessary to carry out the mandate of Section 15 of the SS Law which provides in part, viz:

Sec. 15. Non-transferability of Benefits. – The SSS shall pay the benefits provided for in this Act to such
[x x x] persons as may be entitled thereto in accordance with the provisions of this Act x x x.
(Emphasis ours.)

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed Decision and Resolution
of the Court of Appeals dated May 24, 2005 and October 17, 2005 in CA-G.R. SP No. 82763 are hereby
REVERSED and SET ASIDE. Respondent Teresa G. Favila is declared to be not a dependent spouse
within the contemplation of Republic Act No. 1161 and is therefore not entitled to death benefits accruing
from the death of Florante Favila.

SO ORDERED.