9.

 Machuca Tile Co vs SSS

30 SCRA 256
 
Jurisprudence:
  
Membership in this institution is not the result of bilateral, consensual agreement where the rights
and obligations of the parties are defined by and subject to their will. Republic Act 1161 requires
compulsory coverage of employers and employees under the System. It is actually a legal
imposition, on said employers and employees, designed to provide social security to the
workingmen.

Facts: 
Petitioners are legal heirs of Eduardo Jungay, a member of the system qualified of compulsory
coverage in December 1961. Upon filing a claim of death benefits, it was discovered that the
deceased, who died on June 17, 1962, was only reported by the petitioner for coverage in the
System on September 5, 1962. The Claims Department adjudicated the sum of P810.00, as death
benefits payable to the deceased’s legal heirs, which the Acting Administration declared as the
petitioner’s liability to pay to the said heirs. This ruling was affirmed by the Social Security
Commission.
 
Petitioner contends that since it had submitted on September 5, 1962 the sum of P28.20
representing the deceased Jungay's premium from December 1961 to June 1962, it would be unjust
for the system to receive and keep the premiums paid for the deceased Jungay and still hold
petitioner liable for payment of the death benefits.
 
Hence this petition.
 
Issue: Whether or not petitioner is liable to pay the sum of P810.00 as death benefits payable to the
deceased legal heirs.
 
Ruling:
Yes. Petitioner is liable to pay the sum of P810.00 as death benefits payable to the deceased legal
heirs.
 
The Court has held that membership in this institution is not the result of bilateral, consensual
agreement where the rights and obligations of the parties are defined by and subject to their will.
Republic Act 1161 requires compulsory coverage of employers and employees under the System.
Under the Social Security Act the employer has two distinct mandatory obligations: 1)the obligation
of making a timely remittance of premiums under Section 22(a) and, 2) the obligation of making a
timely report of its employees’ names and other personal data, including the social security number
assigned to each employee, for coverage, under Section 24(a)
 
Here, the posthumous remittance of the premiums of the deceased only extinguished petitioner's
liability from 3% monthly penalty from the date the contributions falls due under Section 22(a).
However, his mandatory liability in place of the System for the social security benefits due the
deceased had already been incurred under Section 24(a).
 
The Court affirms the ruling of the Commission with modification that petitioner shall pay the legal
heirs of the deceased Eduardo Jungay six (6%) per cent interest per annum on the sum of P810.00
from June 4, 1965 until the date of actual payment.