THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, petitioner-appellee

Vs
SOCIAL SECURITY COMMISSION, respondent-appellant
G.R. No. L-20383, May 24, 1967

Facts:

On November 6, 1960, the Social Security System, with the approval of the
Chairman of the Social Security Commission, issued Circular No. 34 requiring all
insurance firms to immediately submit the names of their agents, solicitors or
underwriters, who, pursuant to the Social Security Act are considered as employees of
the said firms and are subject to the compulsory coverage of the Social Security
System, and to pay the corresponding premiums based on the actual commissions
received by each agent during each month. In line with this, the Social Security System
sent SSS Form R-1-A-1 to insurance firms requiring the firms to accomplish the said
SSS Form.

The Philippine American Life Insurance Company was one of those insurance firms
required by the Social Security System, through the manager of the Production
Department, to accomplish SSS Form R-1-A-1 for the purpose of supplying the
necessary data within 10 days to avoid the penalties provided for by law. This action by
the Social Security System was reiterated in another communication on March 3, 1961.
On March 7, 1961, Philippine American Life Insurance Company replied to those letters
with a communication, objecting to the aforementioned compulsory coverage arguing
that the company’s insurance agents, solicitors or underwriters are not its employees.
Still, sometime in May 1961, the Social Security System sent another letter with several
copies of SSS Form R-1-A-1 to Philippine American Life Insurance Company with the
request to accomplish and submit the forms as much as possible to facilitate early
adjudication of the coverage of its Insurance agents under the System.

On May 30, 1961, instead of complying with this request, the plaintiff, Philippine
American Life Insurance Company commenced an action for prohibition with preliminary
injunction against the Social Security Commission in the Court of First Instance of
Manila – to restrain the Social Security Commission 1. from compelling the plaintiff to
remit contributions to the administrative branch of the System, and 2. from prosecuting
plaintiff and its officers for their refusal to make the aforementioned contributions – upon
the theory that the said agents of the plaintiff are not their employees thereof.

After appropriate proceedings, the lower court rendered its decision: (1) holding that
plaintiff's agents, solicitors or underwriters are not employees of plaintiff, the Philippine
American Life Insurance Company, and that plaintiff is not their employer so that
plaintiff's said insurance agents, solicitors or underwriters do not fall under the
compulsory coverage of the Social Security System; (2) commanding defendant Social
Security Commission to desist absolutely from taking criminal action against plaintiff's
officers under the provisions of Section 28 (e) and (f) of the Social Security Act, and
from requiring plaintiff to remit contributions to the defendant Social Security
Commission or its administrative arm, the Social Security System, to be applied to the
coverage of plaintiff's said agents, solicitors or underwriters under the Social Security
Act, without pronouncement as to costs.

Hence, the present appeal to the Supreme Court, since the questions purely of law
are involved.

Issues:

1. Whether or not the trial court had jurisdiction to hear and decide this case
2. Whether Philippine American Life Insurance Company has a cause of action
against the Social Security Commission
3. Whether insurance agents of a life insurance company are its employees, for the
purposes of the compulsory coverage under the Social Security System

Ruling:

On the first issue, the Supreme Court ruled that the appeal taken by the
Social Security Commission is well founded because the present action is one for
a writ of prohibition which may be issued inly by a superior court to an inferior
court, corporation, board or person, to prevent the latter from exercising a
jurisdiction or power it does not have. In this case, the Social Security
Commission is not inferior to courts of first instance. Therefore, the lower court
had no jurisdiction to issue the writ of prohibition prayed for.

Then, on the issue of whether the plaintiff has a cause of action against the
Commission, the Supreme Court Ruled that, although the Social Security
Commission can sue and be sued in courts of first instance, either as regards to
its administrative functions, or in the enforcement and protection of its private
rights, the rule is otherwise when the act complained of forms part of its quasi-
judicial functions. Section 5 (b) of the Republic Act No. 1161 ( An Act to Create a
Social Security System Providing Sickness, Unemployment, Retirement,
Disability and Death Benefits for Employees) provides that the judicial review of
"any decision of the Commission . . . shall be permitted only after any party
claiming to be aggrieved thereby has exhausted his remedies before the
Commission." In the case at bar, plaintiff has not exhausted its remedies before
the Commission. The Commission has not even been given a chance to render a
decision on the issue raised by plaintiff herein, because the latter has not
appealed to the Commission from the action taken by the in insisting upon the
enforcement of Circular No. 34.
 Hence, the Philippine American Life Insurance Company has no cause of
action for prohibition, which does not lie except in the absence of appeal or any
other plain, speedy and adequate remedy in the ordinary course of law.

Latly, since the lower court had no jurisdiction to hear and decide the case at
bar, the plaintiff – Philippine American Life Insurance Company has no cause of
action against the Commission and it is unnecessary to pass upon the third issue
raised herein. The decision appealed from is hereby reversed and another one
shall be entered, dismissing the complaint herein, with cost against the plaintiff-
appellee, the Philippine American Life Insurance Company.
POBLETE CONSTRUCTION COMPANY AND DOMINGO POBLETE, plaintiffs-
appellants
Vs
SOCIAL SECURITY COMMISSION AND JUDITH ASIAIN, defendants-appellees
G.R. No. L-17605, January 22, 1964

Facts:

On January 27, 1960, Judith Asiain filed a petition with the Social Security
Commission. In this petition, Mrs. Asiain sought to recover from the employers of her
husband, herein appellants, Poblete Construction Company and Domingo Poblete, the
death benefits she would have been entitled to receive from the Social Security System.

The appellants moved to dismiss the petition on the ground that the Commission had
no jurisdiction over the said case and contended that appellee’s husband was not
covered by the System. Thereafter, appellant’s motion to dismiss the petition of the
appellee was denied and the Commission required the appellants to answer the claim.
Not having done so, the Commission upon motion of appellee, entered and order of
default and set the date for the reception of appellees’ evidence.

In view thereof, appellants filed with the Court of First Instance of Rizal a petition
for certiorari with injunction to enjoin the Commission from further proceedings in said
case. The Court issued a writ of preliminary injunction restraining the Commission from
proceeding with the case pending final determination of the action for certiorari.

Instead of filing an answer to the petition for certiorari, appellees moved to dismiss

Issue:

Whether or not the Social Security Commission has no jurisdiction to try and decide
the petition filed with it by Judith Asiain and her minor children.
Ruling:

The Supreme Court hereby affirmed the order appealed from. The Social Security
Commission has a jurisdiction to try and decide the petition filed with it by Judith Asiain
and her minor children.

In taking cognizance of the petition filed by Judith Asiain, the Social Security
Commission was exercising its quasi-judicial powers granted by Section 5 (a) of
Republic Act No. 1161, as amended. The Court of First Instance has no jurisdiction to
issue either of the said writs against the Commission. Moreover, in accordance with the
provisions of Section 5, paragraphs (a) and (c) of Republic Act No. 1161, as amended,
the decisions of said Commission are reviewable both upon law and facts by the Court
of Appeals, and that if the appeal from its decision is only on questions of law, the
review shall be made by the Supreme Court. It is clear from these provisions that the
Commission, in exercising its quasi-judicial powers, ranks with the Public Service
Commission and the Courts of First Instance. As to the writs of Injunction, Certiorari and
Prohibition may be issued only by a superior court against an inferior court, board or
officer exercising judicial functions. Therefore, the Court of First Instance of Rizal, where
appellants filed their petition for certiorari, had no jurisdiction to entertain the same.