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75) SOCIAL SECURITY SYSTEM, petitioner, petitioner, vs. COMMISSION ON AUDIT, respondent. G.R. No. 149240. July 11, 2002
TOPIC: Corporate Powers - A. General Sec. 36 FACTS: The Social Security Coission Coission !SSC) in "ehal# o# SSS an$ the Concerne$ %plyoee %plyoees s #or &etter &etter SSS !ACC%SS) !ACC%SS) e'ecute$ e'ecute$ a collectiv collective e ne(otiatio ne(otiation n a(reeent !CA) that provi$es P5*+++ contract si(nin( "onus. ,epart ,eparten entt o# &u$(et &u$(et an$ ana(e ana(een entt !,&) !,&) $eclar $eclare$ e$ the CA as ille(al. The SSS Corporate Au$itor $isallowe$ #un$ releases #or the si(nin( "onus sinc since e it was was an allo allowa wanc nce e in the the #or #or o# a$$i a$$iti tion onal al cop copen ensa sati tion on prohi"ite$ "y the Constitution. ACC%SS appeale$ the $isallowance "ut CA a/re$ the $isallowance an$ rule$ that the (rant o# the si(nin( "onus was iproper "ecause it has no le(al "asis since Sec. 06 o# 1A 7652 !02) ha$ repeale$ the authority o# the SSC to 4' the copensation o# its personnel. ence the instant petition was 4le$ in the nae o# the Social Security Syste an$ not "y ACC%SS throu(h its le(al sta. Petitioner SSS ar(ues that a si(nin( "onus ay "e (rante$ upon the conclusion o# ne(otiations lea$in( to the e'ecution e'ecution o# a CA un$er Sec. 3* par. !c)* o# 1A 0060 as* which allows the SSC to 4' the copensation o# its personnel. n the other han$* respon$ent CA asserts that the authority o# the SSC to 4' the copensation o# its personnel has "een repeale$ "y Sections 0 an$ 06 o# 1A 6752 an$ is there#ore there#ore no lon(er eective. •
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ISSUE: 1. 8hether or not AC%SS has a power to 4le a case in the nae o# SSS9 2. 8hether or not the charter o# SSS authori;es SSC to 4' the copensation o# its eployees an$ o/cers9 !ELD: 1. There is no $irective #ro the SSC that authori;e$ the suit an$ only only the o/cer o/cer-in -in-ch -char ar(e (e in "ehal# "ehal# o# petiti petitione onerr e'ecu e'ecute$ te$ the purpor purporte$ te$ $irective. Clearly* this is irre(ular since un$er Sec. <* par. 0+* in relation to par. 7 1A 0060 as aen$e$ "y 1A 22 !The Social Security Act o# 07* which was alrea$y eective when the instant petition was 4le$)* it is the SSC as a colle(iate "o$y which has the power to approve* con4r* pass upon or review the action o# the SSS to sue in court. oreover* the appearance o# the inte interrnal nal le(a le(all sta sta o# the the SSS SSS as coun counse sell in the the pres presen entt proc procee ee$i $in( n(s s is siilarly =uestiona"le "ecause only ,> can act as counsel o# SSS un$er "oth "oth 1A 00 0060 60 an$ an$ 1A 2 22 2.. ?t is well well sett settle le$ $ that that the the le(a le(ali lity ty o# the the representation o# an unauthori;e$ counsel ay "e raise$ at any sta(e o# the procee$in(s an$ that such illicit representation representation pro$uces no le(al eect.
?n the case at "ar* there is no approval or rati4cation o# the SSC has "een un$erta@en in the anner prescri"e$ "y law an$ ,> has not $ele(ate$ the authority to act as counsel* then this case ust #ail. These proce$ural $e4ciencies are serious atters that cannot "e i(nore$ since the SSS is in reality con#essin( u$(ent to char(e e'pen$iture a(ainst the trust #un$ un$er its custo$ianship. This reasonin( is #oun$ in Premium Marble Resources v. Court of Appeals: Bno person* not even its o/cers* coul$ vali$ly sue in "ehal# o# a corporation in the a"sence o# any resolution #ro the (overnin( "o$y authori;in( the 4lin( o# such suit. oreover* where the corporate o/cers power as an a(ent o# the corporation $i$ not $erive #ro such resolution* it woul$ nonetheless "e necessary to show a clear source o# authority #ro the charter* the "y-laws or the iplie$ acts o# the (overnin( "o$y.
2. 1A 6752 o$i4e$* i# not repeale$* Sec. 3* par. !c)* o# 1A 0060 as aen$e$* at least inso#ar as it concerne$ the authority o# SSC to 4' the copensation o# SSS eployees an$ o/cers. 1A 6752 inten$e$ to $o away with ultiple allowances an$ other incentive pac@a(es an$ the resultin( $ierences in copensation aon( (overnent personnel* the statute clearly $i$ not revo@e e'istin( "ene4ts "ein( enoye$ "y incu"ents o# (overnent positions at the tie o# the passa(e o# 1A 6752 "y virtue o# Secs. 0 an$ 07 thereo#. This eans that whatever salaries an$ other 4nancial an$ non-4nancial in$uceents that the SSC was in$e$ to 4' #or the* the copensation ust coply with the ters o# 1A 6752. Dn#ortunately* the si(nin( "onus in =uestion $i$ not =uali#y un$er Secs. 0 an$ 07 o# 1A 6752. ?t was non-e'istent as o# 0 >uly 02 as it accrue$ only in 06 when the CA was entere$ into "y an$ "etween SSC an$ ACC%SS. The si(nin( "onus there#ore coul$ not have "een inclu$e$ in the salutary provisions o# the statute nor woul$ it "e le(al to $is"urse to the inten$e$ recipients. The si(nin( "onus is not truly reasona"le copensation. A(itation an$ propa(an$a which are so coonly practice$ in private sector la"or-ana(eent relations have no place in the "ureaucracy an$ that only a peace#ul collective ne(otiation which is conclu$e$ within a reasona"le tie ust "e the stan$ar$ #or interaction in the pu"lic sector. This $esire$ con$uct aon( civil servants shoul$ not coe* we ust stress* with a price ta( which is what the si(nin( "onus appears to "e.
