G.R. No. L-26298 September 28, 1984
CMS ESTATE, INC., petitioner, vs. SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, respondents.

FACTS

CMS Estate, Inc., a domestic corporation primarily engaged in real estate, commenced business on December 1, 1952. In 1956, it amended its articles of incorporation to engage in logging, securing a forest concession license. Its logging operations began on April 1, 1957. The corporation became an SSS member for its real estate business on August 1, 1958, and later remitted premiums for its logging employees. However, it demanded a refund, contending its logging business was not yet subject to compulsory coverage.
The Social Security Commission ruled that CMS Estate was subject to compulsory coverage as of September 1, 1957, for both its logging and real estate businesses. It held the logging operation was a mere expansion of the corporation’s activities. CMS Estate appealed, arguing its two distinct businesses should be treated separately for coverage purposes, especially since the logging venture had not been in operation for two years as allegedly required under the law at the time.

ISSUE

Whether the petitioner corporation’s separate logging business is independently subject to compulsory SSS coverage, or whether coverage extends from its original real estate business, making the logging operation immediately covered.

RULING

The Supreme Court dismissed the appeal and affirmed the Commission’s ruling. The legal logic centers on the nature of SSS coverage and the identity of the employer. The Social Security Act (Republic Act No. 1161) mandates compulsory coverage of employers, not of individual businesses or enterprises. Once an employer, like a corporate entity, is subject to coverage, all its subsequent business undertakings, regardless of their nature or start date, fall under that coverage.
The Court emphasized that the law is a social legislation enacted under the state’s police power to promote general welfare and social justice, designed for broad coverage. The corporate petitioner remains a single juridical entity and a single employing unit. The amendment of its articles to include logging did not create a new legal personality. Thus, its logging operation, though distinct, is merely an expansion of its business activities under the same corporate umbrella. Consequently, the compulsory coverage effective from the start of its original real estate business on December 1, 1952, extends to its logging employees from the start of that operation on April 1, 1957. The Court also noted that subsequent amendments to the law had eliminated any prior two-year stabilization period for new businesses, reinforcing the intent for immediate coverage.