FOSTER WHEELER CORPORATION, PETITIONER-APPELLANT, VS. SOCIAL SECURITY SYSTEM, RESPONDENT-APPELLEE.

This is an appeal taken by petitioner, Foster Wheeler Corporation,
from a resolution of the Social Security Commission – hereinafter referred to
as the Commission – dated August 24,
1960, declaring petitioner:

“x x x to
be compulsorily covered as of March, 1959, and is hereby directed to remit to
the System all premiums due and payable in behalf of its employees from the
time they qualified for compulsory coverage, with the penalty thereon of three
per centum (3%) per month, as provided for in Section 22 of the law.”

Petitioner, a foreign corporation engaged in the construction
business, was licensed by the Securities and Exchange Commission to do
business in the Philippines
sometime in 1952.  Thereafter, it began
construction of an oil refinery for Caltex (Phils.) Inc. at Bauan, Batangas, and completed the same sometime in the year
1954.  Since then petitioner had no
actual construction work in the Philippines
until March, 1959 when it undertook the construction of the Standard Vacuum Oil
Company (Stanvac) oil refinery at Limay,
Bataan.  Thereupon, the respondent Social Security
System – hereinafter referred to as SSS – required it to register as one of its
compulsorily covered members.  Petitioner
disputed this, claiming that it is not subject to such compulsory coverage
until two years from March, 1959 when it began construction of the Stanvac refinery, and that the two-year period mentioned in
Section 9 of the Social Security Act, as amended, must be one immediately
preceding the date of coverage.  In other
words, petitioner’s view was that its operation in the Philippines from 1952 to
1954, during which period it constructed the Caltex
oil refinery, should not be counted for the purpose of determining whether it is
or it is not compulsorily covered, and that the two-year period should be
counted only from March, 1959 when it actually began construction of Stanvac oil refinery.

The respondent SSS, for its part, claims that petitioner had
completed the required two-year period of operation upon completion of the Caltex oil refinery in 1954.  The SSS further contends that the two-year
period mentioned in the law need not be necessarily a two-year period immediately
preceding the firm’s coverage.

The Commission sustained the views of the System and rendered
decision accordingly.  Hence the instant
appeal.

Section 9 of the Social Security Act, as amended, reads as
follows:

“SEC. 9.  Compulsory coverage.  – Coverage in the System shall be compulsory
upon all employees between the ages of sixteen and sixty years, inclusive, if
they have been for at least six months in the service of an employer who is a
member of the System; Provided, that the Commission may not compel any employer
to become a 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 in the following year of operation and thereafter,
at least six employees:  * * *.”

In the light of the language used in the law quoted above, it is
enough that a firm or employer has operated for two years prior to a
declaration of its compulsory coverage for it to fall within the provision of
said law.  That in petitioner’s case this
condition has been fulfilled is clear because it is an admitted fact that it
constructed the Caltex oil refinery in Bauan, Batangas from the year
1952 to the year 1954.

We find no merit in petitioner’s contention that the two-year
period of operation required by law must be one immediately preceding its
coverage because the language of the law does not support it; it does not
expressly qualify the two-year period of operation as that immediately
preceding coverage.  Therefore, to
sustain petitioner’s contention would amount to reading something substantial
into the law itself — something We have no authority
to do.

That petitioner, in point of fact, performed no actual
construction work in the Philippines
from 1954 when it finished construction of the Caltex
oil refinery, until March, 1959, does not improve its position.  It seems clear that in spite of its
inactivity during that period, in legal contemplation it did not cease to do
business in the Philippines;
it merely suspended operation.  Proof of
this is the fact that the license it had obtained in 1952 from the Securities
and Exchange Commission was never cancelled and, as a matter of fact, it was
the same license that petitioner used in March, 1959 as authority for engaging
in the construction of the Stanvac oil refinery.  Our conclusion in this regard is further
fortified by the fact that petitioner admits that during the period from 1954
to 1959 it had maintained in the Philippines, pursuant to our laws on the
matter, a legal representative or an attorney-in-fact in the person of the law
offices of Ross, Selph, & Carrascoso.  The maintenance of an office of that nature,
intended as it is to make the foreign corporation amenable to the service of
legal processes in the Philippines, cannot but disclose — inferentially at
least — a corporate intent to avail itself of the privilege of doing business
in the Philippines — should an opportunity to do so present itself.

Lastly, We believe that the adoption of
petitioner’s theory would make possible mass evasion of coverage by the simple
expedient of suspending operations for a period of time, because this would nullify
the legal effect of previous periods of operation.  As a consequence of this the two-year period
required for compulsory coverage would have to start always from the time the
employer or corporation resumes actual operations.  This would mean that the law — construed as
petitioner would have Us construe it — carries in
itself its own death sentence.

With respect to the issue raised in petitioner’s third and last
assignment of error — that the Commissioner erred:  in holding that the System required it to
register as a member in March, 1959; in giving retroactive effect to
petitioner’s membership; and in imposing interest at 3% per month on all back premia — is likewise, without merit.

The coverage of an employer under the Social Security Act takes
place from the moment the conditions provided by law come into existence.  Then, the employer is duty bound to register,
and its failure to do so subjects it to the penalties provided by law.  In other words, the Commission need not first
adopt a resolution declaring the employer covered by the System.  Such requirement would impose upon the
Commission a duty too cumbersome if not next to impossible to comply with, for
it would force that body to maintain sufficient personnel that would go
snooping around to discover firms or corporations engaged in business who must be declared covered by the System.  The law — We are
certain — did not intend that.  To the
contrary, it seems reasonable to hold that, under the law, employers or
corporations engaged in business upon whom concur the
conditions required for compulsory coverage, must come out and submit
themselves to it.

WHEREFORE, the resolution appealed from being in
accordance with law, the same is hereby affirmed, with costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Ruiz
Castro, Fernando, Teehankee, Barredo,
Villamor, and Makasiar, JJ., concur.