GARCIA V.

SSS
G.R. No. 170735, December 17, 2007

I. FACTS
 Immaculada Garcia, Eduardo de Leon, Ricardo de Leon, Pacita Fernandez, and Consuelo
Villanueva were directors of Impact Corporation, engaged in the business of manufacturing
aluminum tube containers with two factories
 Around 1978, Impact started encountering financial problems. In 1980, labor unrest happened
 Impact filed a Petition for Suspension of Payments with SSS
 Union of Impact Corporation filed a Notice of Strike with the Ministry of Labor
 Ministry of Labor certified the labor dispute for compulsory arbitration to the NLRC
o ML declared inability of Impact to pay wages and other benefits
 SSS filed a case through its Legal and Collection Division (LCD) before the SSC
 IMPACT’S CASE
o VP Ricardo de Leon explained that they had been confronted with strikes and layoffs
were effected thereafter
o Its operations has been suspended and that it was waiting for the resolution on its
Petition for Suspension of Payments by the SEC
 SSS’S CASE
o Despite due notice, Impact failed to appear at the hearings
 Petition for Suspension of Payments was dismissed
 Impact resumed operations only for its winding up and dissolution
o Assets were sold to scrap dealers to answer for its arrears in rentals
 SSS-LCD filed an amended Petition in SSC
 Eduardo de Leon, Fernandez, and Villanueva died; Ricardo was declared in default
 GARCIA’S CASE
o Prescription period has expired
o Lack of cause of action and cessation of business
o Impact had already ceased operations in 1980 and suffered irreversible economic
losses (fortuitous events)
o She was a mere director without managerial functions
o She cannot be made personally liable for the corporate obligations of Impact since her
liability extended only up to the extent of her unpaid subscription (none)
o Section 28(f), SSS Law: A managing head, director, or partner is liable only for the
penalties of the employer corporation and not for unpaid SSS contributions; only a
managing director, not a director, shall be liable
o Section 31, Corporation Code: Only directors, trustees, or officers who participate
in unlawful acts or are guilty of gross negligence and bad faith shall be personally
liable
o
 SSC ruled in favor of SSS
 CA also denied Garcia’s petition

II. ISSUES
 Whether or not Garcia, as the only surviving director of Impact Corporation, can be made
solely liable for the corporate obligations of Impact Corporation pertaining to unremitted SSS
premium contributions and penalties therefore?
III. RULING
 Every part of the statute must be considered together with the other parts and kept subservient
to the general intent of the whole enactment. The liability imposed as contemplated under the
foregoing Section 28(f) of the SSS Law does not preclude the liability for the unremitted
amount.
 Ejusdem generic: Where general words follow an enumeration of persons or things, by
words of a particular and specific meaning, such general words are not to be construed in their
widest extent, but are to be held as applying only to persons or things of the same kind or
class as those specifically mentioned
 Piercing the corporate veil: Applies when a corporation is used to evade a judt and due
obligation or to justify a wrong, to shield or perpetrate fraud, to carry out other similar
unjustifiable aims or intentions, or as a subterfuge to commit injustice and so circumvent the
law