G.R. No. L-26712-16 December 27, 1969
UNITED CHRISTIAN MISSIONARY SOCIETY, UNITED CHURCH BOARD FOR WORLD MINISTERS, BOARD OF FOREIGN MISSION OF THE REFORMED CHURCH IN AMERICA, BOARD OF MISSION OF THE EVANGELICAL UNITED PRESBYTERIAN CHURCH, COMMISSION OF ECUMENICAL MISSION ON RELATIONS OF THE UNITED PRESBYTERIAN CHURCH, petitioners, vs. SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, respondents.

FACTS

The five petitioners, religious missionary societies, originally filed separate petitions contesting the social security coverage of American missionaries working in the Philippines under their employment. They later withdrew this contest and instead filed a consolidated amended petition praying for the condonation of penalties assessed against them for delayed social security premium remittances, amounting to P69,446.42 for the period from September 1958 to September 1963. They alleged they labored under the impression that as international organizations, they were not subject to coverage, and upon advice, they paid the back premiums totaling P81,341.80 in October 1963. They claimed the penalties were inequitable and cited past resolutions of the Social Security Commission that allegedly permitted condonation. The Social Security System moved to dismiss the petition on the ground that the Commission had no authority to condone penalties. The Commission granted the motion and dismissed the petition, ordering petitioners to pay the penalties.

ISSUE

Whether or not the Social Security Commission has the legal authority under the Social Security Act to condone, waive, or relinquish the penalty for late premium remittances.

RULING

No. The Supreme Court upheld the Commission’s order dismissing the petition. The Court ruled that the Social Security Act mandatorily imposes a penalty of three percent per month for late premium remittances under Section 22(a), and no discretion is granted to the Commission to condone this penalty. The Commission’s powers, enumerated in Section 4 of the Act, do not include, expressly or by implication, the authority to condone penalties. Furthermore, the social security funds are held in trust by the Government for the members, and the Commission cannot perform acts diminishing these funds without specific authority. The Commission’s correct legal position, as reiterated in its resolutions, is that it lacks such power. Past alleged instances of condonation, even if true, do not estop the government from correctly applying the law, and the Commission’s dismissal of the petition did not constitute grave abuse of discretion. The order appealed from was affirmed.