MAXIMO CALALANG, petitioner v. A.D. Williams, et al.

, respondents
G.R. No. 47800, 2 December 1940, J, Laurel

FACTS: Calalang filed a petition for writ of prohibition against the National Traffic Commission alleging
that the Commonwealth Act No. 548 s unconstitutional because it constitutes an undue delegation of
legislative power. The said Act prohibits animal-drawn vehicles from passing along Rosario Street
extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from
1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to
Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the
Colgante Bridge to traffic. They later modified the provision which allowed Rosario Street and Rizal
Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as above
indicated, for a period of one year from the date of the opening of the Colgante Bridge to traffic. The
consequences of this prohibition prevented all animal-drawn vehicles from passing and picking up
passengers in the places above-mentioned to the detriment not only of their owners but of the riding
public as well.

ISSUE: W/N, the petition is tenable (NO)

HELD:

IN RE: UNDUE DELEGATION OF LEGISLATIVE POWER

Discretion, as held by Chief Justice Marshall in Wayman v. Southard (10 Wheat., 1) may be committed
by the Legislature to an executive department or official. The Legislature may make decisions of
executive departments or subordinate officials thereof, to whom it has committed the execution of certain
acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is
to give prominence to the ’necessity’ of the case."

The authority therein conferred upon them and under which they promulgated the rules and regulations
now complained of is not to determine what public policy demands but merely to carry out the legislative
policy laid down by the National Assembly in said Act, to wit, "to promote safe transit upon and avoid
obstructions on, roads and streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily to any or all classes of
traffic "whenever the condition of the road or the traffic makes such action necessary or advisable in the
public convenience and interest." The delegated power, if at all, therefore, is not the determination of
what the law shall be, but merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and regulations on the use of national
roads and to determine when and how long a national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the requirements of public convenience and interest, is an
administrative function which cannot be directly discharged by the National Assembly. It must depend on
the discretion of some other government official to whom is confided the duty of determining whether the
proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is
the making of the law.

 Accordingly, with the growing complexity of modern 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.
 IN RE: UNLAWFUL INTERFERENCE WITH LEGITIMATE BUSINES OR TRADE

The National Assembly was prompted by considerations of public convenience and welfare. It was
inspired by a desire to relieve congestion of traffic. which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the
general welfare may interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the
general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). 

The fundamental aim of our Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to prevail over authority because
then society will fall into anarchy. Neither should authority be made to prevail over liberty because then
the individual will fall into slavery. The citizen should achieve the required balance of liberty and
authority in his mind through education and personal discipline, so that there may be established the
resultant equilibrium, which means peace and order and happiness for all.

A business lawful today may in the future, because of the changed situation, the growth of population or
other causes, become a menace to the public health and welfare, and be required to yield to the public
good.

IN RE: SOCIAL JUSTICE

The promotion of social justice, however, is to be achieved not through a mistaken sympathy towards any
given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so that justice in its
rational and objectively secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of measures calculated to
insure economic stability of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored principle of salus populi est
suprema lex.

ROMAN CATHOLIC ARCHBISHOP OF MANILA, petitioner v. SOCIAL

SECURITY COMMISSION, respondents
G.R. No. L-15045, 20 January 1961, J, Gutierrez David

FACTS: 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.

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,” 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." Finally, "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.

ISSUE: W/N, the petition is tenable (NO)

HELD:

IN RE: APPLICATION OF “EMPLOYER” IN THE CONTEXT OF RELIGIOUS UNDERTAKINGS

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. In the case at bar, the
definition of the term "employer" is a sufficient and comprehensive to its addition of 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.

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.
 PHILIPPINE BLOOMING MILLS CO., INC., petitioner v. SOCIAL
SECURITY SYSTEM, respondents
G.R. No. L-21223, 31 August 1966, J, Barrera

FACTS: The Philippine Blooming Mills Co., Inc., a domestic corporation, since the start of its operations
in 1957, has been employing Japanese technicians under a pre-arranged contract of employment, the
minimum period of which employment is 6 months and the maximum is 24 months. From April 28, 1957,
to October 26, 1958, the corporation had in its employ 6 Japanese technicians. In connection with the
employment of these aliens, it sent an inquiry to the Social Security System (SSS) whether these
employees are subject to compulsory coverage under the System.

SSS answered: “Aliens who are employed in the Philippines shall also be compulsorily covered. But
aliens who are employed temporarily shall, upon their departure from the Philippines, be entitled to a
rebate of a proportionate amount of their contributions; their employers shall be entitled to the same
proportionate rebate of their contributions in behalf of said aliens employed by them. (Rule I, Sec. 3[d],
Rules and Regulations.)"

The Assistant General Manager of the corporation filed a claim with the SSS for the refund of the
premiums paid to the System, on the ground of termination of the member’s employment. As this claim
was denied, they filed a petition with the Social Security Commission for the return or refund of the
premiums, in the total sum of P2,520.00, paid by the employer corporation and the 6 Japanese employees,
plus attorney’s fees. This claim was controverted by the SSS, alleging that Rule IX of the Rules and
Regulations of the System, as amended, requires membership in the System for at least 2 years before a
separated or resigned employee may be allowed a return of his personal contributions. Under the same
rule, the employer is not also entitled to a refund of the premium- contributions it had paid.

After hearing, the Commission denied the petition for the reason that, although under the original
provisions of Section 3 (d) of Rule I of the Rules and Regulations of the SSS, alien-employees (who are
employed temporarily) and their employers are entitled to a rebate of a proportionate amount of their
respective contributions upon the employees’ departure from the Philippines, said rule was amended by
eliminating that portion granting a return of the premium- contributions. This amendment became
effective on January 14, 1958, or before the employment of the subject-aliens terminated. The rights of
covered employees who are separated from employment, under the present Rules, are covered by Rule IX
which allows a return of the premiums only if they have been members for at least 2 years.

ISSUE: W/N, the amendment of the Rules and Regulations of the SSS constituted an impairment of
obligations and contract? (NO)

HELD:

IN RE: APPLICATION OF REFUND OF THE PREMIUMS PAID TO THE SYSTEM

Appellants’ argument is based on the theory that the employees’ membership in the System established
contractual relationship between the members and the System, in the sense contemplated and protected by
the constitutional prohibition against its impairment by law. But, membership in this institution is not the
result of a bilateral, consensual agreement where the rights and obligations of the parties are defined by
and subject to their will. 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. Membership in the SSS is, therefore, in compliance with a lawful
exercise of the police power of the State, to which the principle of non-impairment of the obligation of
contract is not a proper defense.

CMS ESTATE, petitioner v. SOCIAL SECURITY SYSTEM, respondents

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

FACTS: Appeal by the petitioner 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.

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. 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.

Issue at hand

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.

ISSUE:

1.) W/N, contributions required of employers and employees under the Act 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? (NO)
2.) W/N, 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?
(YES)
3.) W/N, 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? (NO)
4.) W/N, Section 9 of the Social Security Act on the question of compulsory membership and
employers should be given a liberal interpretation? (NO)

HELD:

IN RE: EXCISE TAXES

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 our
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.
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.

IN RE: CONTRACTOR RELATIONSHIP OF ROJAS

Rojas was appointed as operations manager of the logging consession; he has no power to appoint or hire
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.

IN RE: CORPORATION AS A SINGLE EMPLOYING UNIT

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. This Act
requires that the “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.”

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.

IN RE: LIBERAL INTERPRETATION OF SECTION 9 OF THE SOCIAL SECURITY ACT

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.

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.

SOCIAL SECURITY SYSTEM, petitioner v. CANDELARIA D. DAVAC, ET

AL., respondents
G.R. No. L-21642, 30 July 1966, J, Barrera
FACTS: 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, a former employee of Lianga Bay Logging Co., Inc. that became a member of the Social Security
System (SSS for short). 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.

ISSUE: W/N, the Social Security Commission acted correctly in declaring respondent Candelaria Davac
as the person entitled to receive the death benefits in question? (YES)

HELD:

IN RE: ENTITLEMENT OF THE DEATH BENEFITS

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. The disqualification mentioned in Article 739 of the New Civil Code 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.

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." SEC 15 also provides
for an exception that  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 are no designated beneficiaries or when the
designation is void, that the laws of succession are applicable.