SSS v.

Vda de Bailon
In 1955 Clemente Bailon and Alice Diaz married in Barcelona, Sorsogon. 15+
years later, Clemente filed an action to declare the presumptive death of Alice
she being an absentee. The petition was granted in 1970. In 1983, Clemente
married Jarque. The two live together untile Clementes death in 1998. Jarque
then sought to claim her husbands SSS benefits and the same were granted
her. On the other hand, a certain Cecilia Baion-Yap who claimed that she is the
daughter of Bailon to a certain Elisa Jayona petitioned before the SSS that they
be given the reimbursement for the funeral spending for it was actually them who
shouldered the burial expenses of Clemente. They further claim that Clemente
contracted three marriages; one with Alice, another with Elisa and the other with
Jarque. Cecilia also averred that Alice is alive and kicking and Alice subsequently
emerged; Cecilia claimed that Clemente obtained the declaration of Alices
presumptive death in bad faith for he was aware of the whereabouts of Alice or if
not he could have easily located her in her parents place. She was in Sorsogon
all along in her parents place. She went there upon learning that Clemente had
been having extra-marital affairs. SSS then ruled that Jarque should reimburse
what had been granted her and to return the same to Cecilia since she
shouldered the burial expenses and that the benefits should go to Alice because
her reappearance had terminated Clementes marriage with Harque. Further,
SSS ruled that the RTCs decision in declaring Alice to be presumptively death is
erroneous. Teresita appealed the decision of the SSS before the Social Security
Comission and the SSC affirmed SSS. The CA however ruled the contrary.
ISSUE: Whether or not the mere appearance of the absent spouse declared
presumptively dead automatically terminates the subsequent marriage.
HELD: There is no previous marriage to restore for it is terminated upon
Clementes death. Likewise there is no subsequent marriage to terminate for the
same is terminated upon Clementes death. SSS is correct in ruling that it is futile
for Alice to pursue the recording of her reappearance before the local civil
registrar through an affidavit or a court action. But it is not correct for the SSS to
rule upon the declaration made by the RTC. The SSC or the SSS has no judicial
power to review the decision of the RTC. SSS is indeed empowered to determine
as to who should be the rightful beneficiary of the benefits obtained by a
deceased member in case of disputes but such power does not include the
appellate power to review a court decision or declaration. In the case at bar, the
RTC ruling is binding and Jarques marriage to Clemente is still valid because no
affidavit was filed by Alice to make known her reappearance legally. Alice
reappeared only after Clementes death and in this case she can no longer file
such an affidavit; in this case the bad faith [or good faith] of Clemente can no
longer be raised the marriage herein is considered voidable and must be
attacked directly not collaterally it is however impossible for a direct attack
since there is no longer a marriage to be attacked for the same has been
terminated upon Clementes death.

SSS V. DAVAC - SSS BENEFITS

17 SCRA 863

Facts:
The late Petronilo Davac, a former employee of Lianga Bay, became
a member of the SSS. He designated Candelaria Davac as his
beneficiary and indicated his relationship to her as that of "wife". He
died then each of the respondents (Candelaria Davac and Lourdes
Tuplano) filed their claims for death benefit with the SSS. The
deceased contracted two marriages, the first, with claimant Lourdes
Tuplano and the second with Candelaria Davac. The processing was
withheld. The SSS filed this petition praying that the two parties be
required to litigate their claims.
The SSS issued the resolution naming Davac as the valid beneficiary.
Not satisfied with the resolution, Lourdes Tuplano brought the appeal.
Issue: Whether or not the Social Security Commission acted correctly
in declaring respondent Candelaria Davac as the person entitled to
receive the death benefits in question.
Held: Yes. SSS resolution affirmed.
Ratio:
Section 13, Republic Act No. 1161, provides:
1. SEC. 13. Upon the covered employee's death or total and
permanent disability under such conditions as the Commission may
define, his beneficiaries, shall be entitled to the following benefit
The beneficiary "as recorded" by the employee's employer is the one
entitled to the death benefits.
The appellant contends that the designation made in the person of
the second and bigamous wife is null and void, because (1) it
contravenes the provisions of the Civil Code, and (2) it deprives the
lawful wife of her share in the conjugal property as well as of her own
and her child's legitime in the inheritance.
As to the first point, appellant argues that a beneficiary under the
Social Security System partakes of the nature of a beneficiary in life
insurance policy and, therefore, the same qualifications and
disqualifications should be applied. Article 739 and 2012 of the civil
code prohibits persons whoi cannot receive donations from being

beneficiaries of a policy.
The provisions mentioned in Article 739 are not applicable to
Candelaria Davac because she was not guilty of concubinage, there
being no proof that she had knowledge of the previous marriage of
her husband Petronilo.
Regarding the second point raised by appellant, the benefits accruing
from membership in the Social Security System do not form part of
the properties of the conjugal partnership of the covered member.
They are disbursed from a public special fund created by Congress in
pursuance to the declared policy of the Republic "to develop,
establish gradually and perfect a social security system which ... shall
provide protection against the hazards of disability, sickness, old age
and death."
The sources of this special fund are from salary contributions.
Under other provisions, if there is a named beneficiary and the
designation is not invalid, it is not the heirs of the employee who are
entitled to receive the benefits (unless they are the designated
beneficiaries themselves). It is only when there is no designated
beneficiaries or when the designation is void, that the laws of
succession are applicable. The Social Security Act is not a law of
succession.
G.R. No. 160467

April 7, 2009

SOLEDAD MUOZ MESA, Petitioner, vs. SOCIAL SECURITY SYSTEM and

PHILROCK INCORPORATED, Respondent.
DECISION
CARPIO-MORALES, J.:
On appeal is the Court of Appeals Decision1 dated January 16, 2003 sustaining
the Decision2 dated August 24, 2001 of the Employees Compensation
Commission (ECC) in ECC Case No. MS-12322-501, as well as its Resolution3
dated October 3, 2003 denying petitioners motion for reconsideration.
Teodoro Mesa (Mesa), the deceased husband of petitioner Soledad Muoz
Mesa, was an employee of respondent Philrock Incorporated (Philrock), from
April 1966 to November 1998.4
In the course of his employment, Mesa was diagnosed to be afflicted with
diabetes mellitus, pulmonary tuberculosis, and ischemic heart disease5 for which
he was confined from September 23 to 30, 1988 at St. Marthas Specialty Clinic

in Tarlac City. Upon his discharge from the hospital, he continued to work for
Philrock until he succumbed to myocardial infarction on November 19, 1988. He
last held the position of Project General Superintendent.
Close to 12 years later or in October 2000, Mesas wife, herein petitioner,
claimed for employees compensation benefits under Presidential Decree (P.D.)
No. 626 or the Employees Compensation Law, as amended.
By pro-forma letter6 dated January 18, 2001, the Social Security System (SSS)
denied petitioners claim on the ground of prescription. Petitioner moved for
reconsideration, alleging that the filing of the claim was delayed because she
was not aware that her husband was entitled to employees compensation until
she heard it from a friend who was able to claim a similar benefit, and that she
could not file the claim immediately because she herself was in and out of the
hospital. The motion was elevated by the SSS to the ECC per memorandum7
dated April 17, 2001.
By Decision dated August 24, 2001, the ECC held that petitioners claim had
prescribed on November 26, 1991, following Article 2018 of P.D. 626, as
amended, which provides that claims under said law should be brought within
three years from the time the cause of action accrued. Even if Art. 11449 of the
Civil Code were applied, the ECC posed, the claim would still be barred by
prescription since the period is reckoned from the date of contingency or
November 25, 1998 to the date of filing of the claim in October 2000 which
entailed a period of almost 12 years.
Petitioner thereupon appealed to the Court of Appeals, contending that the threeyear period in P.D. 626 should not be construed as a prescriptive period but
more of a requisite for the exercise of a right granted by law, and pleading for the
application of the social justice precepts in resolving the controversy in her favor.
Via a Supplement to the Petition,10 petitioner submitted the Online Inquiry
System-generated "D[eath] D[isability and] R[etirement] Claims Information"
sheet11 showing that she filed a claim for death and funeral benefits with the SSS
on December 12, 1988.
By the challenged Decision dated January 16, 2003, the appellate court
dismissed petitioners petition and affirmed the ECC Decision. Citing Vda. De
Hornido v. ECC, Art. 201 of P.D. 626, and Art. 1144 of the Civil Code, the
appellate court held that at the time petitioner instituted the claim for employees
compensation benefits, almost 12 years had elapsed, hence, it had prescribed.
On petitioners filing before the SSS of a claim for death and funeral benefits on
November 25, 1988, the appellate court held that the same did not operate as
constructive notice to the ECC for purposes of employees compensation, hence,
it did not toll the running of the prescriptive period. Additionally, it held that this

issue was not presented before the lower tribunals and was raised for the first
time on appeal, hence, it could not be entertained; and that although the
November 25, 1988 claim was denominated as "SSS Death and Funeral
Benefit," what petitioner actually claimed was funeral or burial benefits alone, not
death benefits resulting from compensable injury or illness, and it was only in
2000 that she filed for death benefits, hence, the said claim for funeral benefits
could not operate as constructive notice on the part of SSS within the purview of
the rules on employees compensation.
Petitioners motion for reconsideration having been denied by Resolution dated
October 3, 2003, the present appeal was filed.1avvphi1
Petitioner reiterates her contention that her claim has not prescribed and that the
funeral claim served as constructive notice to the SSS/ECC to toll the running of
the prescriptive period pursuant to ECC Resolution No. 90-03-0022 and 93-080068. And she requests the Court to apply social justice precepts and
humanitarian considerations.
The appeal is impressed with merit.
Apropos is the ruling in Buena Obra v. SSS12 in which the Court, speaking
through then Associate, now Chief Justice Puno, held that the claim for funeral
benefits under P.D. No. 626, as amended, which was filed after the lapse of 10
years by the therein petitioner who had earlier filed a claim for death benefits,
had not prescribed,
The issue of prescription in the case at bar is governed by P.D. No. 626, or the
Law on Employees' Compensation. Art. 201 of P.D. No. 626 and Sec. 6, Rule VII
of the 1987 Amended Rules on Employees' Compensation both read as follows:
"No claim for compensation shall be given due course unless said claim is filed
with the System within three years from the time the cause of action accrued."
This is the general rule. The exceptions are found in Board Resolution 93-080068 and ECC Rules of Procedure for the Filing and Disposition of Employees
Compensation Claims. Board Resolution 93-08-0068 issued on 5 August 1993,
states:
"A claim for employee's compensation must be filed with System (SSS/GSIS)
within three (3) years from the time the cause of action accrued, provided
however, that any claim filed within the System for any contingency that may be
held compensable under the Employee's Compensation Program (ECP) shall be
considered as the EC claim itself. The three-year prescriptive period shall be
reckoned from the onset of disability, or date of death. In case of presumptive
death, the three (3) years limitation shall be counted from the date the missing
person was officially declared to be presumptively dead." (emphasis supplied)

In addition, Section 4(b), Rule 3 of the ECC Rules of Procedure for the Filing and
Disposition of Employees Compensation Claims, reads:
"RULE 3. FILING OF CLAIM
Section 4. When to file.
(a) Benefit claims shall be filed with the GSIS or the SSS within three (3) years
from the date of the occurrence of the contingency (sickness, injury, disability or
death).
(b) Claims filed beyond the 3-year prescriptive period may still be given due
course, provided that:
1. A claim was filed for Medicare, retirement with disability, burial, death claims,
or life (disability) insurance, with the GSIS within three (3) years from the
occurrence of the contingency.
2. In the case of the private sector employees, a claim for Medicare, sickness,
burial, disability or death was filed within three (3) years from the occurrence of
the contingency.
3. In any of the foregoing cases, the employees compensation claim shall be
filed with the GSIS or the SSS within a reasonable time as provided by law.
[Emphasis supplied.]"
We agree with the petitioner that her claim for death benefits under the SSS law
should be considered as the Employees Compensation claim itself. This is but
logical and reasonable because the claim for death benefits which petitioner filed
with the SSS is of the same nature as her claim before the ECC. Furthermore,
the SSS is the same agency with which Employees Compensation claims are
filed. As correctly contended by the petitioner, when she filed her claim for death
benefits with the SSS under the SSS law, she had already notified the SSS of
her employees compensation claim, because the SSS is the very same agency
where claims for payment of sickness/disability/death benefits under P.D. No.
626 are filed.
Section 4(b)(2), Rule 3 of the ECC Rules of Procedure for the Filing and
Disposition of the Employees Compensation Claims, quoted above, also
provides for the conditions when EC claims filed beyond the three-year
prescriptive period may still be given due course. Section 4(b)(2) states the
condition for private sector employees, requiring that a claim for Medicare,
sickness, burial, disability or death should be filed within three (3) years from the
occurrence of the contingency. In the instant case, the petitioner was able to file
her claim for death benefits under the SSS law within the three-year prescriptive
period. In fact, she has been receiving her pension under the SSS law since

November 1988.
It is true that under the proviso, the employees compensation claim shall be filed
with the GSIS/SSS within a reasonable time as provided by law. It should be
noted that neither statute nor jurisprudence has defined the limits of "reasonable
time." Thus, what is reasonable time depends upon the peculiar facts and
circumstances of each case. In the case at bar, we also find petitioners claim to
have been filed within a reasonable time considering the situation and condition
of the petitioner. We have ruled that when the petitioner filed her claim for death
benefits under the SSS law, her claim for the same benefits under the
Employees Compensation Law should be considered as filed. The evidence
shows that the System failed to process her compensation claim. Under the
circumstances, the petitioner cannot be made to suffer for the lapse committed
by the System.13 (Emphasis and underscoring supplied)
In light of the immediately-quoted portions of the Courts decision in Buena Obra,
the Court holds that petitioners filing of a claim before the SSS, even arguendo
that it was only for funeral benefits, on November 25, 1988 served as
constructive notice on the part of the SSS/ECC pursuant to the ECC Board
Resolution 93-08-0068 vis a vis ECC Rules of Procedure for the Filing and
Disposition of Employees Compensation Claims, that she was claiming before
the SSS for compensation benefits under P.D. No. 626, effectively tolling the
running of the prescriptive period. The term "funeral benefits" certainly connotes
benefits arising from death. Petitioners claim is thus not barred.
At this juncture, the Court reiterates its oft-repeated ruling that pursuant to the
Constitutional guarantee of social justice, a liberal attitude in favor of the
employee should be adopted.1avvphi1
[C]laims falling under the Employees Compensation Act should be liberally
resolved to fulfill its essence as a social legislation designed to afford relief to the
working man and woman in our society. It is only this kind of interpretation that
can give meaning and substance to the compassionate spirit of the law as
embodied in Article 4 of the New Labor Code, which states that all doubts in the
implementation and interpretation of the provisions of the Labor Code including
its implementing rules and regulations should be resolved in favor of labor.14
(Underscoring supplied)
The issue of whether Mesas death is compensable was never, however, fully
raised nor discussed in any of the proceedings below, nor is it ventilated in the
present petition, and the records are bereft of adequate evidence to enable the
Court to rule thereon. A remand of the case to the ECC for the resolution of such
issue is thus in order.1avvphi1
WHEREFORE, the petition is GRANTED. The challenged Court of Appeals
Decision dated January 16, 2003 and Resolution dated October 3, 2003 are

REVERSED and SET ASIDE.

Let the records of the case be REMANDED to the Employees Compensation
Commission which is DIRECTED to rule with dispatch on the merits of
petitioners claim for compensation benefits under Presidential Decree No. 626.
SO ORDERED.
G.R. No. 128667 December 17, 1999
RAFAEL A. LO, petitioner,
LUGUIBIS, respondents.

vs. COURT OF APPEALS and GREGORIO

MENDOZA, J.:
This is a petition for review by certiorari of the decision 1 of the Court of Appeals,
dated January 31, 1996, affirming the resolution 2 of the Social Security
Commission, dated May 3, 1994, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, this Commission finds and so holds
that petitioner Gregorio Luguibis had been employed from September, 1957 to
September, 1970 with respondent Jose Lo and from January, 1981 to
September, 1984 with respondent Rafael Lo Rice and Corn Mill.
Accordingly, respondent Jose Lo is hereby directed to report the petitioner's
name for SS coverage effective September, 1957 and to pay to the SSS within
thirty (30) days from receipt hereof the amount of ONE THOUSAND THREE
HUNDRED FORTY TWO PESOS (P1,342.00), representing the unpaid SS
contributions in favor of petitioner covering the period from September, 1957 to
September, 1970, plus the amount of THIRTEEN THOUSAND NINE HUNDRED
SIXTY THREE PESOS AND NINETY EIGHT CENTAVOS (P13,963.98),
representing the penalty liability for late payment computed as of December,
1993, and the damages amounting to TWELVE THOUSAND FIVE HUNDRED
EIGHTY FIVE PESOS AND THREE CENTAVOS (P12,585.03), for failure to
report petitioner for coverage prior to the contingency pursuant to Section 24 (a)
of the SS Law, as amended.
Likewise, respondent Rafael Lo as owner of Rafael Lo Rice and Corn Mill
Factory is hereby directed to report the petitioner's name for SS coverage
retroactive January, 1981; to pay to the SSS within thirty (30) days from receipt
hereof the amount of TWO THOUSAND ONE HUNDRED THIRTY SEVEN
PESOS AND TWENTY FIVE CENTAVOS (P2,137.25), representing the unpaid
SS/Medicare/EC contributions in favor of petitioner covering the period from
January, 1981 to September, 1984, plus the amount of NINE THOUSAND

TWENTY FIVE PESOS AND TWENTY FOUR CENTAVOS (P9,025.24),

representing the penalty liability for late payment computed as of December,
1993, and the damages amounting to SEVEN THOUSAND ONE HUNDRED
EIGHTY SIX PESOS AND EIGHTY CENTAVOS (P7,186.80), for
misrepresenting petitioner's true date of employment pursuant to Section 24 (b)
of the SS Law, as amended.
Meanwhile, the SSS is hereby ordered to pay to petitioner his monthly retirement
pension benefit effective September, 1984, the date he was separated from
employment, upon his filing of the proper claim supported by pertinent
documents.
The facts are as follows:
On April 22, 1953, private respondent Gregorio Luguibis began working as a
mechanic at the Polangui Rice Mill, Inc., owned by Jose Lo. Private respondent
was paid P4.00 daily. In 1959, in addition to his work at the rice mill, he asked to
render services as a mechanic at the Polangui Bijon Factory also owned by Jose
Lo. His wage was later increased, and from 1964 to 1970, when he resigned due
to illness, he was receiving a daily wage of P10.00.
It appears that the management of the rice mill and noodle factory, originally
owned by Jose Lo, were transferred in 1978 to his son, petitioner Rafael Lo, and
his sister, Leticia Lo. Petitioner took over the rice mill, which then became known
as the Rafael Lo Rice and Corn Mill, while Leticia Lo became the operator and
manager of the Polangui Bijon Factory. 3
In 1981, private respondent was rehired by Jose Lo, as mechanic, with a daily
wage of P34.00, plus allowance. While repairing one of the defective machines at
the noodle factory on August 11, 1984, private respondent met an accident and
suffered injuries which forced him to retire soon thereafter.
In 1985, private respondent filed his application for retirement benefits with the
Social Security System (SSS). His application, however, was denied since per
SSS records he became a member only in 1983, and contributions in his favor
were remitted only from October 1983 to September 1984. As private respondent
knew that SSS contributions of P3.50 have been deducted from his monthly
salary since compulsory SSS coverage took effect in 1957, private respondent
filed a petition with the Social Security Commission against petitioner Rafael Lo
and Jose Lo. On May 3, 1994, the Commission upheld private respondent's claim
and ordered petitioner and Jose Lo to remit to the SSS the unpaid contributions
in favor of private respondent for the periods September 1957-September 1970,
and January 1981-September 1984, including penalties and charges.
Instead of filing a notice of appeal, petitioner then filed a petition for review 4 with
the Court of Appeals. The appellate court, nonetheless, took cognizance of the

petition as an appeal and decided it on the merits.

On January 3, 1996, the Court of Appeals affirmed the decision of the
Commission, except that it ordered petitioner to pay to the SSS the amount
representing the unpaid contributions for the period January 1981 to September
1983, instead of the period January 1981 to September 1984.
When the appellate court denied his motion for reconsideration,
this petition for review, where he assigns the following errors: 6

petitioner filed

I. THE FINDING THAT THE BULK OF THE CLAIMS HAS NOT PRESCRIBED IS
NOT IN ACCORD WITH AND/OR CONTRARY TO THE APPLICABLE LAW
AND DECISIONS OF THIS HONORABLE COURT.
II. THE FINDINGS OF FACT THAT IMPELLED THE HONORABLE COURT OF
APPEALS TO REJECT THE DEFENSE IS BASED ON A MISAPPREHENSION
OF FACTS, IS UNSUPPORTED BY THE EVIDENCE, AND THERE IS GRAVE
ABUSE OF DISCRETION.
First. Petitioner argues that the right of private respondent to file an action to
claim his SSS benefits has already prescribed. He claims that the Court of
Appeals should not have applied to this case the ruling in People v. Monteiro, 7
where it was held that the period of prescription for failure to register with the
SSS commences on the day of the discovery of the violation. According to
petitioner, Monteiro can only be applied to penal offenses, whereas the present
case involves civil claims and should, therefore, be governed by the Civil Code
provisions on prescription. Petitioner argues:
Payment of SS premium, as stated in the Decision, is an obligation created by
law hence, without need of demand, it becomes due on the date when such
payment should be made. Hence, under Article 1150 [of the Civil Code], the right
of action to recover unremitted SS premium accrues on the date it is payable and
maybe brought beginning such date. If the period of non-remittance covers a
certain period, say 10 years, such claim is divisible into as many parts as there
are installments due, although for purposes of convenience and avoidance of
multiplicity of suits, such accumulated claims may be brought in a single case.
However, for purposes of prescription the accumulated claims should be
segregated to determine which have already prescribed. This is no different from
a claim for backwages, underpayment and the like under the Labor Code which
fall due periodically mostly on a weekly or even daily basis where all claims more
than 3 years old reckoned from the date of the filing of the claim are segregated
and considered prescribed. Which is unlike a claim for separation pay which is
unitary or indivisible, the same being based on the length of service of an
employee and accrues only on the date he is separated from the service. 8
The argument is untenable.

Sec. 22 (b), par. 2, of Republic Act No. 1161, or the SSS Law, as amended,
states:
The right to institute the necessary action against the employer may be
commenced within twenty (20) years from the time the delinquency is known or
the assessment is made by the SSS, or from the time the benefit accrues, as the
case may be. (emphasis supplied)
The clear and explicit language of the statute leaves no room for doubt as to its
application. 9 Indeed, in Benedicto v. Abad Santos, 10 we held that 22(b) of R.A.
1161 applies to administrative and civil actions against an employer for his failure
to remit SSS contributions. Criminal actions for violations of the SSS law, on the
other hand, prescribes in four years, as provided in Act No. 3326. 11
Private respondent, in this case, discovered the delinquency of petitioner in
remitting his SSS contributions only after his separation from employment on
September 13, 1984. Prior thereto, private respondent could not have known that
his SSS contributions were not being remitted by petitioner since deductions
were made on his salary monthly. Thus, even if petitioner is correct in saying that
the prescriptive period should be counted from the day on which the
corresponding action could have been instituted, the action in this case could
only be instituted when the delinquency was made known to the private
respondent and not when the obligation to pay the premiums accrued.
Thus, even if the case of People v. Monteiro were not applied to the present
case, R.A. 1161, 22(b) expressly provides that the period of prescription to file
the necessary action against the employer should likewise commence on the day
said violation was discovered.
Petitioner likewise contends that the 20-year prescriptive period does not apply to
private respondent's claims prior to 1980 because Presidential Decree No. 1636,
which amended R.A. 1161 to provide for such period, took effect on January 1,
1980. Hence, since R.A. 1161 did not originally provide for a prescriptive period
prior to its amendment, the Civil Code provisions on prescription should govern.
The argument has no merit.
In amending R.A. 1161, P.D. 1636 provided for a 20-year prescriptive period and,
in effect, extended the 10-year period of prescription provided by the Civil Code.
For cases, therefore, with rights arising prior to P.D. 1636, the 20-year
prescriptive period shall take effect as long as the original prescriptive period has
not expired. 12
Even assuming that the prescriptive period has begun to run in this case prior to
the discovery of the violation in 1985, it could have started only at the time the
benefit accrued, i.e., in September 1970 when private respondent left his job due

to illness. On January 1, 1980, when P.D. 1636 took effect, the 10-year
prescriptive period has not expired and was, thus, deemed extended to 20 years.
In any case, as earlier stated, the provision of 22(b) of R.A. 1161 is clear that
the period of prescription commences to run only upon the discovery of the
violation, which in this case took place in 1985. When the complaint was filed on
August 14, 1985, therefore, less than one year has passed since the discovery of
the delinquency. Nor do we find it necessary to discuss petitioner's contention
that the Civil Code principles on divisible obligations and payments in
installments should be applied, considering the clear and unmistakable language
of R.A. 1161.
Second. Petitioner questions the finding of the Commission that private
respondent was a regular employee of the rice mill and bijon factory when the
compulsory SSS coverage took effect in 1957. He alleges that the Court of
Appeals' findings are unsupported by evidence, and committed grave abuse of
discretion in arriving at its decision. 13
According to petitioner, the Court of Appeals itself found Leticia Lo's testimony
"not very credible," 14 since the reports she submitted did not contain all the
names of the employees of the rice mill and noodle factory 15 which she
mentioned in her testimony.
The contention has no merit. The appellate court did not just rely on the
testimony of Leticia Lo but on the findings of the Social Security Commission,
thus:
The Commission did not err in finding that Gregorio Luguibis was a regular
employee of Jose Lo from September 1957 to September 1970 and a regular
employee of the Rafael Lo Rice and Corn Mill from January, 1981 to September
1984. Such conclusion was reached after a thorough consideration of all the
evidence (sic) presented by the parties. Hearings were conducted where
Gregorio Luguibis, Jesus Balingasa, Rafael Lo, Leticia Lo, and Bernard Redillas
testified. Documentary evidence (sic) were also presented as correctly found by
the Commission, the evidence (sic) of Luguibis were more convincing.
The testimony of Gregorio Luguibis was explicit and clear. He named the exact
dates of his actual employment at the rice mill, the nature of his work, and the
amount of wages he was paid. Balingasa corroborated Lugubi's testimony with
respect to the fact that the latter was indeed employed as mechanic at the rice
mill.
On the other hand, the evidence of the opposing party with respect to the issue
of when Luguibis became an employee of the rice mill and bijon factory was
inconsistent. Rafael Lo alleged in one pleading that Luguibis became an
employee at the rice mill on October 10, 1983 while he testified on cross-

examination that Luguibis was hired sometime in 1980. Rafael's sister Leticia
testified upon being cross-examined that prior to 10 October 1983, Luguibis was
never hired as regular employee at the rice mill. 16
Time and again we have ruled that "in reviewing administrative decisions . . . the
findings of fact made therein must be respected as long as they are supported by
substantial evidence, even if not overwhelming or preponderant; that it is not for
the reviewing court to weigh the conflicting evidence, determine the credibility of
the witnesses, or otherwise substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence; that the administrative
decision in matters, within the executive jurisdiction, can only be set aside on
proof of grave abuse of discretion, fraud, or error of law." 17
Clearly, the Court of Appeals and the Commission had sufficient basis in
concluding that private respondent was an employee of petitioner in 1957, when
compulsory SSS coverage took effect.
WHEREFORE, the petition is DISMISSED and the decision of the Court of
Appeals is hereby AFFIRMED.
G.R. No. 125837

October 6, 2004

REYNALDO CANO CHUA, doing business under the name & style PRIME
MOVER CONSTRUCTION DEVELOPMENT, petitioner, vs. COURT OF
APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM,
ANDRES PAGUIO, PABLO CANALE, RUEL PANGAN, AURELIO PAGUIO,
ROLANDO TRINIDAD, ROMEO TAPANG and CARLOS MALIWAT,
respondents.
DECISION
TINGA, J.:
This is a petition for review of the Decision1 of the Court of Appeals in CA-G.R.
CV No. 38269 dated 06 March 1996, and its Resolution dated 30 July 1996
denying petitioners Motion for Reconsideration,2 affirming the Order of the Social
Security Commission (SSC) dated 1 February 19953 which held that private
respondents were regular employees of the petitioner and ordered petitioner to
pay the Social Security System (SSS) for its unpaid contributions, as well as
penalty for the delayed remittance thereof.
On 20 August 1985, private respondents Andres Paguio, Pablo Canale, Ruel
Pangan, Aurelio Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat
(hereinafter referred to as respondents) filed a Petition4 with the SSC for SSS
coverage and contributions against petitioner Reynaldo Chua, owner of Prime
Mover Construction Development, claiming that they were all regular employees

of the petitioner in his construction business.5

Private respondents claimed that they were assigned by petitioner in his various
construction projects continuously in the following capacity, since the period
indicated, and with the corresponding basic salaries,6 to wit:
P
42/day
Pablo Canale
Mason
1977
42/day
Ruel Pangan
Mason
1979
39/day
Aurelio Paguio
Fine grading 1979
42/day
Romeo Tapang
Fine grading 1979
42/day
Rolando Trinidad Carpenter
1983 (Jan.) 39/day
Carlos Maliwat
Mason
1977
42/day
Private respondents alleged that petitioner dismissed all of them without
justifiable grounds and without notice to them and to the then Ministry of Labor
and Employment. They further alleged that petitioner did not report them to the
SSS for compulsory coverage in flagrant violation of the Social Security Act.7
Andres Paguio

Carpenter

1977

In his Answer,8 petitioner claimed that private respondents had no cause of

action against him, and assuming there was any, the same was barred by
prescription and laches. In addition, he claimed that private respondents were not
regular employees, but project employees whose work had been fixed for a
specific project or undertaking the completion of which was determined at the
time of their engagement. This being the case, he concluded that said employees
were not entitled to coverage under the Social Security Act.9
Meanwhile, the SSS filed a Petition in Intervention10 alleging that it has an
interest in the petition filed by private respondents as it is charged with the
implementation and enforcement of the provisions of the Social Security Act. The
SSS stated that it is the mandatory obligation of every employer to report its
employees to the SSS for coverage and to remit the required contribution,
including the penalty imposed for late premium remittances.
On 01 February 1995, the SSC issued its Order11 which ruled in favor of private
respondents. The SSC, relying on NLRC Case No. RAB-III-8-2373-85,12 declared
private respondents to be petitioners regular employees.13 It ordered petitioner to
pay the SSS the unpaid SS/EC and Medicare contributions plus penalty for the
delayed remittance thereof, without prejudice to any other penalties which may
have accrued.14 The SSC denied the Motion for Reconsideration15 of petitioner
for lack of merit.16
Petitioner elevated the matter to the Court of Appeals via a Petition for Review.17
He claimed that private respondents were project employees, whose periods of
employment were terminated upon completion of the project. Thus, he claimed,
no employer-employee relation existed between the parties.18 There being no

employer-employee relationship, private respondents are not entitled to coverage

under the Social Security Act.19 In addition, petitioner claimed that private
respondents length of service did not change their status from project to regular
employees.20
Moreover, granting that private respondents were entitled to coverage under the
Act, petitioner claimed that the SSC erred in imposing penalties since his failure
to include private respondents under SSS coverage was neither willful nor
deliberate, but due to the honest belief that project employees are not regular
employees.21 Likewise, he claimed that the SSC erred in ordering payment of
contributions and penalties even for long periods between projects when private
respondents were not working.22
Petitioner also questioned the failure to apply the rules on prescription of actions
and of laches, claiming that the case, being one for the injury to the rights of the
private respondents, should have been filed within four (4) years from the time
their cause of action accrued, or from the time they were hired as project
employees. He added that private respondents "went into a long swoon, folded
their arms and closed their eyes"23 and filed their claim only in 1985, or six (6)
years or eight (8) years after they were taken in by petitioner.24
In resolving the petition, the Court of Appeals synthesized the issues in the
petition, to wit: (1) whether private respondents were regular employees of
petitioner, and whether their causes of action as such are barred by prescription
or laches; (2) if so, whether petitioner is now liable to pay the SSS contributions
and penalties during the period of employment.25
The Court of Appeals, citing Article 280 of the Labor Code,26 declared that private
respondents were all regular employees of the petitioner in relation to certain
activities since they all worked either as masons, carpenters and fine graders in
petitioners various construction projects for at least one year, and that their work
was necessary and desirable to petitioners business which involved the
construction of roads and bridges.27 It cited the case of Mehitabel Furniture
Company, Inc. v. NLRC,28 particularly the ruling therein which states:
By petitioners own admission, the private respondents have been hired to work
on certain special orders that as a matter of business policy it cannot decline.
These projects are necessary or desirable in its usual business or trade,
otherwise they would not have accepted . Significantly, such special orders are
not really seasonal but more or less regular, requiring the virtually continuous
services of the "temporary workers." The NLRC also correctly observed that "if
we were to accept respondents theory, it would have no regular workers
because all of its orders would be special undertakings or projects." The
petitioner could then hire all its workers on a contract basis only and prevent
them from attaining permanent status.

Furthermore, the NLRC has determined that the private respondents have
worked for more than one year in the so-called "special projects" of the petitioner
and so fall under the second condition specified in the above-quoted provision
(Article 280, Labor Code).29
The Court of Appeals rejected the claim of prescription, stating that the filing of
private respondents claims was well within the twenty (20)-year period provided
by the Social Security Act.30 It found that the principle of laches could not also
apply to the instant case since delay could not be attributed to private
respondents, having filed the case within the prescriptive period, and that there
was no evidence that petitioner lacked knowledge that private respondents would
assert their rights.31
Petitioner filed a Motion for Reconsideration,32 claiming that the Court of Appeals
overlooked (1) the doctrine that length of service of a project employee is not the
controlling test of employment tenure, and (2) petitioners failure to place private
respondents under SSS coverage was in good faith. The motion was denied for
lack of merit.33
In the present Petition for Review, petitioner again insists that private
respondents were not regular, but project, employees and thus not subject to
SSS coverage. In addition, petitioner claims that assuming private respondents
were subject to SSS coverage, their petition was barred by prescription and
laches. Moreover, petitioner invokes the defense of good faith, or his honest
belief that project employees are not regular employees under Article 280 of the
Labor Code.lawphil.net
Petitioners arguments are mere reiterations of his arguments submitted before
the SSC and the Court of Appeals. More importantly, petitioner wants this Court
to review factual questions already passed upon by the SSC and the Court of
Appeals which are not cognizable by a petition for review under Rule 45. Wellentrenched is the rule that the Supreme Courts jurisdiction in a petition for
review is limited to reviewing or revising errors of law allegedly committed by the
appellate court, the findings of fact being generally conclusive on the Court and it
is not for the Court to weigh evidence all over again.34
Stripped of the lengthy, if not repetitive, disquisition of the private parties in the
case, and also of the public respondents, on the nature of private respondents
employment, the controversy boils down to one issue: the entitlement of private
respondents to compulsory SSS coverage.
The Social Security Act was enacted pursuant to the policy of the government "to
develop, establish gradually and perfect a social security system which shall be
suitable to the needs of the laborers throughout the Philippines, and shall provide
protection against the hazards of disability, sickness, old age and death."35 It
provides for compulsory coverage of all employees not over sixty years of age

and their employers.36

Well-settled is the rule that the mandatory coverage of Republic Act No. 1161, as
amended, is premised on the existence of an employer-employee relationship,
the essential elements of which are: (a) selection and engagement of the
employee; (b) payment of wages; (c) the power of dismissal; and (d) the power of
control with regard to the means and methods by which the work is to be
accomplished, with the power of control being the most determinative factor.37
There is no dispute that private respondents were employees of petitioner.
Petitioner himself admitted that they worked in his construction projects,38
although the period of their employment was allegedly co-terminus with their
phase of work.39 Even without such admission from petitioner, the existence of
an employer-employee relationship between the parties can easily be determined
by the application of the "control test,"40 the elements of which are enumerated
above. It is clear that private respondents are employees of petitioner, the latter
having control over the results of the work done, as well as the means and
methods by which the same were accomplished. Suffice it to say that regardless
of the nature of their employment, whether it is regular or project, private
respondents are subject of the compulsory coverage under the SSS Law, their
employment not falling under the exceptions provided by the law.41 This rule is in
accord with the Courts ruling in Luzon Stevedoring Corp. v. SSS42 to the effect
that all employees, regardless of tenure, would qualify for compulsory
membership in the SSS, except those classes of employees contemplated in
Section 8(j) of the Social Security Act.43
This Court also finds no reason to deviate from the finding of the Court of
Appeals regarding the nature of employment of private respondents. Despite the
insistence of petitioner that they were project employees, the facts show that as
masons, carpenters and fine graders in petitioners various construction projects,
they performed work which was usually necessary and desirable to petitioners
business which involves construction of roads and bridges. In Violeta v. NLRC,44
this Court ruled that to be exempted from the presumption of regularity of
employment, the agreement between a project employee and his employer must
strictly conform to the requirements and conditions under Article 280 of the Labor
Code. It is not enough that an employee is hired for a specific project or phase of
work. There must also be a determination of, or a clear agreement on, the
completion or termination of the project at the time the employee was engaged if
the objectives of Article 280 are to be achieved.45 This second requirement was
not met in this case.
Moreover, while it may be true that private respondents were initially hired for
specific projects or undertakings, the repeated re-hiring and continuing need for
their services over a long span of timethe shortest being two years and the
longest being eighthave undeniably made them regular employees.46 This
Court has held that an employment ceases to be co-terminus with specific

projects when the employee is continuously rehired due to the demands of the
employers business and re-engaged for many more projects without
interruption.47 The Court likewise takes note of the fact that, as cited by the SSC,
even the National Labor Relations Commission in a labor case involving the
same parties, found that private respondents were regular employees of the
petitioner.48
Another cogent factor militates against the allegations of the petitioner. In the
proceedings before the SSC and the Court of Appeals, petitioner was unable to
show that private respondents were appraised of the project nature of their
employment, the specific projects themselves or any phase thereof undertaken
by petitioner and for which private respondents were hired. He failed to show any
document such as private respondents employment contracts and employment
records that would indicate the dates of hiring and termination in relation to the
particular construction project or phases in which they were employed.49
Moreover, it is peculiar that petitioner did not show proof that he submitted
reports of termination after the completion of his construction projects,
considering that he alleges that private respondents were hired and rehired for
various projects or phases of work therein.
Anent the issue of prescription, this Court rules that private respondents right to
file their claim had not yet prescribed at the time of the filing of their petition,
considering that a mere eight (8) years had passed from the time delinquency
was discovered or the proper assessment was made. Republic Act No. 1161, as
amended, prescribes a period of twenty (20) years, from the time the delinquency
is known or assessment is made by the SSS, within which to file a claim for nonremittance against employers.50
Likewise, this Court is in full accord with the findings of the Court of Appeals that
private respondents are not guilty of laches. The principle of laches or "stale
demands" ordains that the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or
should have been done earlier, or the negligence or omission to assert a right
within a reasonable time, warrants a presumption that the party entitled to assert
it either has abandoned it or declined to assert it.51 In the instant case, this Court
finds no proof that private respondents had failed or neglected to assert their
right, considering that they filed their claim within the period prescribed by
law.1avvphi1.net
This Court finds no merit in petitioners protestations of good faith. In United
Christian Missionary Society v. Social Security Commission,52 this Court ruled
that good faith or bad faith is irrelevant for purposes of assessment and collection
of the penalty for delayed remittance of premiums, since the law makes no
distinction between an employer who professes good reasons for delaying the
remittance of premiums and another who deliberately disregards the legal duty
imposed upon him to make such remittance.53 For the same reasons, petitioner

cannot now invoke the defense of good faith.

WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court
of Appeals promulgated on 6 March 1996 and 30 July 1996 respectively, are
AFFIRMED. Costs against petitioner
G.R. No. 170195 March 28, 2011
SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM,
Petitioner,
vs.
TERESA G. FAVILA, Respondent.
Topic: Joint obligation to support
DOCTRINE: A spouse who claims entitlement to death benefits as a primary
beneficiary under the Social Security Law must establish two qualifying factors,
to wit: (1) that he/she is the legitimate spouse; and (2) that he/she is dependent
upon the member for support. A person separated de facto from her husband is
not a dependent, unless the contrary is shown.
FACTS:
January 17, 1970 - Teresa married Florante Favila
June 30, 1970 - Florante designated Teresita to be his sole beneficiary
in
SSS
o He likewise named their common children as beneficiaries when
they later had children
Feb 1, 1997 - Florante died; his pension benefits under the SSS were
given to their only minor child at that time, Florante II, but only until his
emancipation at age 21
Teresa then filed claim to the benefits as the surviving legal spouse but
was denied by the SSS; SSS claimed that Teresa was not entitled
spouse of Florante and in addition, she was designated by Florante as such
beneficiary. There was no legal separation or annulment of marriage that could
have disqualified her from claiming the death benefits as her designation as
beneficiary had not been invalidated by any court of law.
ISSUE: Is Teresa a primary beneficiary in contemplation of the Social Security
Law as to be entitled to death benefits accruing from the death of Florante?
HELD: NO. CA order set aside. Teresa is not dependent spouse within the
contemplation of the SSL
Under the SSS Law (RA 1161), the term dependent is defined as
xxx; the legitimate spouse dependent for support upon the
employee; xxx
In Re: Application for Survivors Benefits of Manlavi, a dependent is "one
who derives his or her main support from another [or] relying on, or subject to,
someone else for support; not able to exist or sustain oneself, or to perform
anything without the will, power or aid of someone else."

 Likewise under the same law, beneficiaries, is defined as:

the dependent spouse until he remarries and dependent children, who shall be
the primary beneficiaries. xxx
For a spouse to qualify as a primary beneficiary the SSS Law he/she must not
only be a legitimate spouse but also a dependent as defined, that is, one who is
dependent upon the member for support.
SC agreed with Teresa that her alleged affair with another man was not
sufficiently established and Florante was actually the one who has a common
wife; however, Teresa is still not entitled as she has been separated in fact from
Florante for 17 years prior to his death
From prevailing jurisprudence: a wife who is already separated de facto from
her husband cannot be said to be dependent for support upon the husband,
absent any showing to the contrary.
"[w]hoever claims entitlement to the benefits provided by law should establish
his or her right thereto by substantial evidence In this case, as held in Aguas,
the wife-claimant had the burden to prove that all the statutory requirements have
been complied with, particularly her dependency on her husband at the time of
his death
Aside from Teresas bare allegation that she was dependent upon her husband
for support and her misplaced reliance on the presumption of dependency by
reason of her valid and then subsisting marriage with Florante, Teresa has not
presented sufficient evidence to discharge her burden of proving that she was
dependent upon her husband for support at the time of his death. She could have
done this by submitting affidavits of reputable and disinterested persons who
have knowledge that during
o
o
SSS answered that Teresa as guardian was paid a total period of 57 months and
that sister of Florante wrote that Teresa has been separated from Florante
because former had an affair with a married man, have sex 4 times a week and
the couple lived together for 10 years only
Interview of SSS - Teresa did not live with anybody but rumored to have an affair
Ruling of SSS Commission: death benefits dependent on 2 factors(1) legality of
the marital relationship; and (2) dependency for support, which, in SSCs
opinioin, is affected by factors such as separation de facto of the spouses,
marital infidelity and such other grounds sufficient to disinherit a spouse under
the law. SSC ruled that she is disqualified from claiming benefits because she is
not dependent for support from Florante due to her marital infidelity. Also, she
has been separated from Florante for 17 years before his death. She only
contested her non-entitlement of benefits when the pension was stopped
CA Ruling: found Teresa's petition impressed with merit. It gave weight to the fact
that she is a primary beneficiary because she is the lawful surviving
her separation with Florante, she does not have a known trade, business,
profession or lawful occupation from which she derives income sufficient for her
support and such other evidence tending to prove her claim of dependency.

 Hence, for Teresas failure to show that despite their separation she was
dependent upon Florante for support at the time of his death, Teresa cannot
qualify as a primary beneficiary. Hence, she is not entitled to the death benefits
accruing on account of Florantes death.
Armelita Lldedo vs. Atty Cesar Lledo AM P95-167
May a government employee, dismissed from the service for cause, be
allowed to recover the personal contributions he paid to the Government Service
Insurance System (GSIS)?
This is the question that confronts this Court in the instant case, the factual
antecedents of which are as follows:
On December 21, 1998, this Court promulgated a Decision[1] in the abovecaptioned case, dismissing from the service Atty. Cesar V. Lledo, former branch
clerk of court of the Regional Trial Court of Quezon City, Branch 94. Cesars wife,
Carmelita, had filed an administrative case against him, charging the latter with
immorality, abandonment, and conduct unbecoming a public official.
During the investigation, it was established that Cesar had left his family to
live with another woman with whom he also begot children. He failed to provide
support for his family. The investigating judge recommended Cesars dismissal
from the service. The Office of the Court Administrator (OCA) adopted the
recommendation.
The Court, in its December 21, 1998 Decision, disposed of the case in
this wise:
WHEREFORE, Cesar V. Lledo, branch clerk of court
of RTC, Branch 94, Quezon City, is hereby DISMISSED from
the service, with forfeiture of all retirement benefits and leave
credits and with prejudice to reemployment in any branch or
instrumentality of the government, including any governmentowned or controlled corporation. This case is REFERRED to
the IBP Board of Governors pursuant to Section 1 of Rule 139B of the Rules of Court.
SO ORDERED.[2]
In a letter[3] dated January 15, 1999, Carmelita and her children wrote
to then Chief Justice Hilario G. Davide, Jr., begging for humane consideration
and asking that part of the money due Cesar be applied to the payment of the
arrearages of their amortized house and lot then facing foreclosure by the GSIS.
They averred that Cesars abandonment had been painful enough; and to lose
their home of 26 years would be even more painful and traumatic for the children.

The Court directed the OCA to comment. The OCA recommended that
the Courts December 21, 1998 Decision be reconsidered insofar as the forfeiture
of Cesars leave credits was concerned, underscoring, however, that said
benefits would only be released to Carmelita and her children.[4]
In a Resolution dated August 3, 1999,[5] the Court resolved to deny the
motion for reconsideration for lack of merit.
On April 3, 2006, Cesar L. Lledo, Jr., Cesars son, wrote a letter[6] to
then Chief Justice Artemio V. Panganiban. He related that his father had been
bedridden after suffering a severe stroke and acute renal failure. He had been
abandoned by his mistress and had been under Cesar Jr.s care since 2001. The
latter appealed to the Court to reconsider its December 21, 1998 Decision,
specifically the forfeiture of leave credits, which money would be used to pay for
his fathers medical expenses. Cesar Jr. asked the Court for retroactive
application of the Courts ruling subsequent to his fathers dismissal, wherein the
Court ruled that despite being dismissed from the service, government
employees are entitled to the monetary equivalent of their leave credits since
these were earned prior to dismissal.
Treating the letter as a motion for reconsideration, the Court, on May 3,
2006, granted the same, specifically on the forfeiture of accrued leave credits.[7]
Cesar Jr. wrote the Court again on November 27, 2006, expressing his
gratitude for the Courts consideration of his request for his fathers leave credits.
He again asked for judicial clemency in connection with his fathers claim for
refund of the latters personal contributions to GSIS.[8]
The Court directed the GSIS to comment, within 10 days from notice,
on Cesar Jr.s letter.[9] For failing to file the required Comment, the Court, in a
Resolution dated December 11, 2007,[10] required the GSIS to show cause why
it should not be held in contempt for failure to comply with the Resolution
directing it to file its Comment. The Court reiterated its December 11, 2007
Resolution on June 17, 2008, and directed compliance.
In a letter[11] dated April 16, 2009, Jason C. Teng, Regional Manager of
the GSIS Quezon City Regional Office, explained that a request for a refund of
retirement premiums is disallowed. He explained:
The rate of contribution for both government and personal
shares of retirement premiums was actuarially computed to
allow the GSIS to generate enough investment returns to be
able to pay off future claims. During actuarial computation, the
expected demographics considered the percentages of
different types of future claims (and non-claims). As such, if
those that were expected to have no future claim (e.g. those

with forfeited retirement benefits) were suddenly allowed to

receive claims for payment of benefits, this would have a
negative impact on the financial viability of the GSIS.
Even as the Court noted the letter in its June 30, 2009 Resolution,[12]
it further required the Board of Directors of the GSIS (GSIS Board) to file a
separate Comment within 10 days from notice.
In its Comment,[13] the GSIS Board said that Cesar is not entitled to the
refund of his personal contributions of the retirement premiums because it is the
policy of the GSIS that an employee/member who had been dismissed from the
service with forfeiture of retirement benefits cannot recover the retirement
premiums he has paid unless the dismissal provides otherwise. The GSIS
Board pointed out that the Courts Decision did not provide that Cesar is entitled
to a refund of his retirement premiums.
There is no gainsaying that dismissal from the service carries with it the
forfeiture of retirement benefits. Under the Uniform Rules in Administrative Cases
in the Civil Service, it is provided that:[14]
Section 58.
Certain Penalties.

Administrative Disabilities Inherent in

a.
The penalty of dismissal shall carry with it that
of cancellation of eligibility, forfeiture of retirement benefits, and
the perpetual disqualification for reemployment in the
government service, unless otherwise provided in the decision.
However, in the instant case, Cesar Jr. seeks only the return of his
fathers personal contributions to the GSIS. He is not claiming any of the benefits
that Cesar would have been entitled to had he not been dismissed from the
service, such as retirement benefits.
To determine the propriety of Cesar Jr.s request, a reexamination of the
laws governing the GSIS is in order.
The GSIS was created in 1936 by Commonwealth Act No. 186. It was
intended to promote the efficiency and welfare of the employees of the
Government of the Philippines and to replace the pension systems in existence
at that time.[15]
Section 9 of Commonwealth Act No. 186 states:
Section 9.

Effect of dismissal or separation from

service. Upon dismissal for cause of a member of the

System, the benefits under his membership policy shall be
automatically forfeited to the System, except one-half of
the cash or surrender value, which amount shall be paid to
such member, or in case of death, to his beneficiary. In
other cases of separation before maturity of a policy, the
Government contributions shall cease, and the insured
member shall have the following options: (a) to collect the cash
surrender value of the policy; or (b) to continue the policy by
paying the full premiums thereof; or (c) to obtain a paid up or
extended term insurance in such amount or period,
respectively, as the paid premiums may warrant, in accordance
with the conditions contained in said policy; o[r] (d) to avail
himself of such other options as may be provided in the
policy.[16]
In 1951, Commonwealth Act No. 186 was amended by Republic Act
(R.A.) No. 660. R.A. No. 660 amended Sections 2(a), (d), and (f); 4; 5; 6; 7; 8;
10; 11; 12; 13; 14; 15; and 16 of Commonwealth Act No. 186. R.A. No. 660
likewise added new provisions to the earlier law, one of which reads:
Section 8. The following new sections are hereby
inserted in Commonwealth Act Numbered One hundred and
eighty-six: II. Retirement Insurance Benefit
Section 11.
(a) Amount of annuity. Upon
retirement a member shall be automatically entitled to a life
annuity payable monthly for at least five years and thereafter
as long as he live. (sic) The amount of the monthly annuity at
the age of fifty-seven years shall be twenty pesos, plus, for
each year of service rendered after the approval of this Act,
one and six-tenths per centum of the average monthly salary
received by him during the last five years of service, plus, for
each year of service rendered prior to the approval of this Act,
if said service was at least seven years, one and two-tenths
per centum of said average monthly salary: Provided, That this
amount shall be adjusted actuarially if retirement be at an age
other than fifty-seven years: Provided, further, That the
maximum amount of monthly annuity at age fifty-seven shall
not in any case exceed two-thirds of said average monthly
salary or five hundred pesos, whichever is the smaller amount:
And provided, finally, That retirement benefit shall be paid not
earlier than one year after the approval of this Act. In lieu of
this annuity, he may prior to his retirement elect one of the
following equivalent benefits:

(1)

Monthly annuity during his lifetime;

(2) Monthly annuity during the joint-lives of the
employee and his wife or other designated beneficiary, which
annuity, however, shall be reduced upon the death of either to
one-half and be paid to the survivor; (3) For those who are
at least sixty-five years of age, lump sum payment of present
value of annuity for first five years and future annuity to be paid
monthly; or
"(4) Such other benefit as may be approved by the
System. "(b) Survivors benefit. Upon death before he
becomes eligible for retirement, his beneficiaries as recorded
in the application of retirement annuity filed with the System
shall be paid his own premiums with interest of three per
centum per annum, compounded monthly. If on his death he is
eligible for retirement, then the automatic retirement annuity or
the annuity chosen by him previously shall be paid accordingly.
"(c) Disability benefit. If he becomes permanently and
totally disabled and his services are no longer desirable, he
shall be discharged and paid his own contributions with interest
of three per centum per annum, compounded monthly, if he
has served less than five years; if he has served at least five
years but less than fifteen years, he shall be paid also the
corresponding employer's premiums, without interest,
described in subsection (a) of section five hereof; and if he has
served at least fifteen years he shall be retired and be entitled
to the benefit provided under subsection (a) of this section.
"(d) Upon dismissal for cause or on voluntary
separation, he shall be entitled only to his own premiums
and voluntary deposits, if any, plus interest of three per
centum per annum, compounded monthly.[17]
Thus, Section 11(d) of R.A. No. 660 should be deemed to have amended
Commonwealth Act No. 186.
In 1977, then President Ferdinand Marcos issued Presidential Decree
(P.D.) No. 1146, an act Amending, Expanding, Increasing and Integrating the
Social Security and Insurance Benefits of Government Employees and
Facilitating the Payment thereof under Commonwealth Act No. 186, as amended,
and for other purposes.
Section 4 of P.D. No. 1146 reads:
Section 4. Effect of Separation from the Service. A
member shall continue to be a member, notwithstanding his

separation from the service and, unless the terms of his

separation provide otherwise, he shall be entitled to whatever
benefits which shall have accrued or been earned at the time
of his separation in the event of any contingency compensable
under this Act.
There is no provision in P.D. No. 1146 dealing specifically with GSIS
members dismissed from the service for cause, or their entitlement to the
premiums they have paid.
Subsequently, R.A. No. 8291 was enacted in 1997, and it provides:
Section 1. Presidential Decree No. 1146, as amended,
otherwise known as the Revised Government Service
Insurance Act of 1977, is hereby amended to read as follows:
xxxx
SEC. 4. Effect of Separation from the Service. A
member separated from the service shall continue to be a
member, and shall be entitled to whatever benefits he has
qualified to in the event of any contingency compensable under
this Act.
It is noteworthy that none of the subsequent laws expressly repealed
Section 9 of Commonwealth Act No. 186, as amended. In fact, none of the
subsequent laws expressly repealed the earlier laws. Be that as it may, we must
still resolve the issue of whether the same has been impliedly repealed.
We answer in the negative.
As a general rule, repeals by implication are not favored. When statutes
are in pari materia, they should be construed together. A law cannot be deemed
repealed unless it is clearly manifested that the legislature so intended it.[18]
The repealing clause of P.D. No. 1146 reads:
Section 48. Repealing Clause. All laws or parts of law
specifically inconsistent herewith shall be considered amended
or repealed accordingly.
On the other hand R.A. No. 8291s repealing clause states:

SEC. 3. Repealing Clause. All laws and any other law

or parts of law specifically inconsistent herewith are hereby
repealed or modified accordingly: Provided, That the rights
under existing laws, rules and regulations vested upon or
acquired by an employee who is already in the service as of
the effectivity of this Act shall remain in force and effect:
Provided, further, That subsequent to the effectivity of this Act,
a new employee or an employee who has previously retired or
separated and is reemployed in the service shall be covered by
the provisions of this Act.

This Court has previously determined the nature of similarly-worded

repealing clauses. Thus:
The holding of this Court in Mecano vs. COA is instructive:
The question that should be asked is: What is the nature of
this repealing clause? It is certainly not an express repealing
clause because it fails to identify or designate the act or acts
that are intended to be repealed. Rather, it is an example of a
general repealing provision, as stated in Opinion No. 73, s.
1991. It is a clause which predicates the intended repeal
under the condition that a substantial conflict must be found in
existing and prior acts. The failure to add a specific repealing
clause indicates that the intent was not to repeal any existing
law, unless an irreconcilable inconsistency and repugnancy
exist in the terms of the new and old laws. This latter situation
falls under the category of an implied repeal.[19]
There are two accepted instances of implied repeal. The first takes
place when the provisions in the two acts on the same subject matter are
irreconcilably contradictory, in which case, the later act, to the extent of the
conflict, constitutes an implied repeal of the earlier one. The second occurs when
the later act covers the whole subject of the earlier one and is clearly intended as
a substitute; thus, it will operate to repeal the earlier law.[20]
Addressing the second instance, we pose the question: were the later
enactments intended to substitute the earlier ones? We hold that there was no
such substitution.
P.D. No. 1146 was not intended to replace Commonwealth Act No. 186,
as amended by R.A. No. 660, but to expand and improve the social security and
insurance programs administered by the Government Service Insurance
System.[21] Thus, as the above-quoted repealing clause indicates, only the laws

or parts of law specifically inconsistent with P.D. No. 1146 were considered
amended or repealed.[22]
In fact, Section 34 of P.D. No. 1146 mandates that the GSIS, as created
and established under Commonwealth Act No. 186, shall implement the
provisions of that law. Moreover, Section 13 states:
Section 13. Retirement Option. Employees who are in
the government service upon the effectivity of this Act shall, at
the time of their retirement, have the option to retire under this
Act or under Commonwealth Act No. 186, as previously
amended.
Accordingly, Commonwealth Act No. 186, as amended, had not been
abrogated by P.D. No. 1146.
Meanwhile, R.A. No. 8291, although enacted to amend P.D. No. 1146,
did not expressly repeal Commonwealth Act No. 186.
Under the first instance of implied repeal, we are guided by the principle
that in order to effect a repeal by implication, the later statute must be so
irreconcilably inconsistent with and repugnant to the existing law that they cannot
be reconciled and made to stand together. The clearest case of inconsistency
must be made before the inference of implied repeal can be drawn, for
inconsistency is never presumed.[23]
We now examine the effect of the later statutes on the provision
specifically dealing with employees dismissed for cause.
We again quote Section 11(d) of Commonwealth Act No. 186, as
amended:
(d)
Upon dismissal for cause or on voluntary
separation, he shall be entitled only to his own premiums and
voluntary deposits, if any, plus interest of three per centum per
annum, compounded monthly.
Compare this with Section 4 of P.D. No. 1146, to wit:
Section 4. Effect of Separation from the Service. A
member shall continue to be a member, notwithstanding his
separation from the service and, unless the terms of his
separation provide otherwise, he shall be entitled to whatever
benefits which shall have accrued or been earned at the time

of his separation in the event of any contingency compensable

under this Act.
and Section 1 of R.A. No. 8291, which amended Section 4 of P.D. No. 1146 and
the law in force at the time of Cesars dismissal from the service:
SEC. 4. Effect of Separation from the Service. A
member separated from the service shall continue to be a
member, and shall be entitled to whatever benefits he has
qualified to in the event of any contingency compensable under
this Act.
There is no manifest inconsistency between Section 11(d) of
Commonwealth Act No. 186, as amended, and Section 4 of R.A. No. 8291. The
latter provision is a general statement intended to cover members separated
from the service whether the separation is voluntary or involuntary, and whether
the same was for cause or not. Moreover, the same deals only with the benefits
the member is entitled to at the time of separation.
For the latter law to be deemed as having repealed the earlier law, it is
necessary to show that the statutes or statutory provisions deal with the same
subject matter and that the latter be inconsistent with the former. There must be
a showing of repugnance, clear and convincing in character. The language used
in the later statute must be such as to render it irreconcilable with what had been
formerly enacted. An inconsistency that falls short of that standard does not
suffice.[24]
As mentioned earlier, neither P.D. No. 1146 nor R.A. No. 8291 contains
any provision specifically dealing with employees dismissed for cause and the
status of their personal contributions. Thus, there is no inconsistency between
Section 11(d) of Commonwealth Act No. 186, as amended, and Section 4 of P.D.
No. 1146, and, subsequently, R.A. No. 8291. The inevitable conclusion then is
that Section 11(d) of Commonwealth Act No. 186, as amended, continues to
govern cases of employees dismissed for cause and their claims for the return of
their personal contributions.
Finally, it should be remembered that the GSIS laws are in the nature of
social legislation, to be liberally construed in favor of the government
employees.[25] The money subject of the instant request consists of personal
contributions made by the employee, premiums paid in anticipation of benefits
expected upon retirement. The occurrence of a contingency, i.e., his dismissal
from the service prior to reaching retirement age, should not deprive him of the
money that belongs to him from the outset. To allow forfeiture of these personal
contributions in favor of the GSIS would condone undue enrichment.

Pursuant to the foregoing discussion, Cesar is entitled to the return of his

premiums and voluntary deposits, if any, with interest of three per centum per
annum, compounded monthly.
WHEREFORE, the foregoing premises considered, the Government
Service Insurance System is hereby DIRECTED to return to Atty. Cesar Lledo his
own premiums and voluntary deposits, if any, plus interest of three per centum
per annum, compounded monthly.
G.R. No. 186560

November 17, 2010

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, vs. FERNANDO

P. DE LEON, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court. Petitioner Government Service Insurance System (GSIS) seeks the
nullification of the Decision1 dated October 28, 2008 and the Resolution2 dated
February 18, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 101811.
Respondent Fernando P. de Leon retired as Chief State Prosecutor of the
Department of Justice (DOJ) in 1992, after 44 years of service to the
government. He applied for retirement under Republic Act (R.A.) No. 910,
invoking R.A. No. 3783, as amended by R.A. No. 4140, which provides that chief
state prosecutors hold the same rank as judges. The application was approved
by GSIS. Thereafter, and for more than nine years, respondent continuously
received his retirement benefits, until 2001, when he failed to receive his monthly
pension.3
Respondent learned that GSIS cancelled the payment of his pension because
the Department of Budget and Management (DBM) informed GSIS that
respondent was not qualified to retire under R.A. No. 910; that the law was
meant to apply only to justices and judges; and that having the same rank and
qualification as a judge did not entitle respondent to the retirement benefits
provided thereunder. Thus, GSIS stopped the payment of respondents monthly
pension.4
Respondent wrote GSIS several letters but he received no response until
November 9, 2007, when respondent received the following letter from GSIS:
Dear Atty. De Leon:

This is in response to your request for resumption of pension benefit.

It appears that you retired under Republic Act No. 910 in 1992 from your position
as Chief State Prosecutor in the Department of Justice. From 1992 to 2001, you
were receiving pension benefits under the said law. Beginning the year 2002, the
Department of Budget and Management through then Secretary Emilia T.
Boncodin already refused to release the funds for your pension benefit on the
ground that Chief State Prosecutors are not covered by R.A. 910. This
conclusion was later on affirmed by Secretary Rolando G. Andaya, Jr. in a letter
dated 6 June 2006.
In view of these, you now seek to secure benefits under Republic Act No. 660 or
any other applicable GSIS law.
We regret, however, that we cannot accede to your request because you have
chosen to retire and in fact have already retired under a different law, Republic
Act No. 910, more than fifteen (15) years ago. There is nothing in the GSIS law
which sanctions double retirement unless the retiree is first re-employed and
qualifies once again to retire under GSIS law. In fact, Section 55 of Republic Act
No. 8291 provides for exclusivity of benefits which means that a retiree may
choose only one retirement scheme available to him to the exclusion of all
others.
Nonetheless, we believe that the peculiarities of your case is a matter that may
be jointly addressed or threshed out by your agency, the Department of Justice,
and the Department of Budget and Management.
Very truly yours,
(signed)
CECIL L. FELEO Senior Vice President Social Insurance Group5
Respondent then filed a petition for mandamus before the CA, praying that
petitioner be compelled to continue paying his monthly pension and to pay his
unpaid monthly benefits from 2001. He also asked that GSIS and the DBM be
ordered to pay him damages.6
In the assailed October 28, 2008 Decision, the CA resolved to grant the petition,
to wit:
WHEREFORE, the petition is GRANTED. The GSIS is hereby ordered to pay
without delay petitioner Atty. Fernando de Leon, his monthly adjusted pension in
accordance with other applicable law not under RA 910. It is also ordered to pay
the back pensions which should also be adjusted to conform to the applicable
law from the time his pension was withheld.

SO ORDERED.7
The CA found that GSIS allowed respondent to retire under R.A. No. 910,
following precedents which allowed non-judges to retire under the said law. The
CA said that it was not respondents fault that he was allowed to avail of the
benefits under R.A. No. 910; and that, even if his retirement under that law was
erroneous, respondent was, nonetheless, entitled to a monthly pension under the
GSIS Act. The CA held that this was not a case of double retirement, but merely
a continuation of the payment of respondents pension benefit to which he was
clearly entitled. Since the error in the award of retirement benefits under R.A. 910
was not attributable to respondent, it was incumbent upon GSIS to continue
defraying his pension in accordance with the appropriate law which might apply
to him. It was unjust for GSIS to entirely stop the payment of respondents
monthly pension without providing any alternative sustenance to him.8
The CA further held that, under R.A. No. 660, R.A. No. 8291, and Presidential
Decree (P.D.) No. 1146, respondent is entitled to a monthly pension for life. He
cannot be penalized for the error committed by GSIS itself. Thus, although
respondent may not be qualified to receive the retirement benefits under R.A. No.
910, he is still entitled to a monthly pension under R.A. No. 660, P.D. No. 1146,
and R.A. No. 8291.9
Petitioner GSIS is now before this Court, assailing the Decision of the CA and the
Resolution denying its motion for reconsideration.
GSIS admits that respondent received monthly pensions from August 1997 until
December 2001. Thereafter, the DBM refused to remit the funds for respondents
pension on the ground that he was not entitled to retire under R.A. No. 910 and
should have retired under another law, without however specifying which law it
was.10 It appears that the DBM discontinued the payment of respondents
pension on the basis of the memorandum of the Chief Presidential Legal Counsel
that Chief Prosecutors of the DOJ are not entitled to the retirement package
under R.A. No. 910.
Because of the discontinuance of his pension, respondent sought to convert his
retirement under R.A. No. 910 to one under another law administered by GSIS.11
However, this conversion was not allowed because, as GSIS avers, R.A. No.
8291 provides that conversion of ones retirement mode on whatever ground and
for whatever reason is not allowed beyond one year from the date of retirement.
GSIS assails the CAs Decision for not specifying under which law respondents
retirement benefits should be paid, thus making it legally impossible for GSIS to
comply with the directive.12 It then raises several arguments that challenge the
validity of the appellate courts decision.
GSIS argues, first, that the CA erred in issuing a writ of mandamus despite the

absence of any specific and clear right on the part of respondent, since he could
not even specify the benefits to which he is entitled and the law under which he is
making the claim.13
Second, GSIS alleges that it had refunded respondents premium payments
because he opted to retire under R.A. No. 910, which it does not administer.
Thus, GSIS posits that the nexus between itself and respondent had been
severed and, therefore, the latter cannot claim benefits from GSIS anymore.14
Third, GSIS contends that the CA erred in concluding that respondent would not
be unjustly enriched by the continuation of his monthly pension because he had
already benefited from having erroneously retired under R.A. No. 910. GSIS
points out that it had refunded respondents premium contributions. When the
Chief Presidential Legal Counsel concluded that respondent was not entitled to
retire under R.A. No. 910, it was implicit recognition that respondent was actually
not entitled to the P1.2 million lump sum payment he received, which he never
refunded.15
Fourth, GSIS points out that the CA erred in concluding that respondent was not
seeking conversion from one retirement mode to another. It reiterates that R.A.
No. 8291 expressly prohibits conversion beyond one year from retirement. To
compel GSIS to release respondents retirement benefits despite the fact that he
is disqualified to receive retirement benefits violates R.A. No. 8291, and would
subject its officials to possible charges under R.A. No. 3019, the Anti-Graft and
Corrupt Practices Act.
Fifth, GSIS contends that respondent is not entitled to the retirement benefits
under R.A. No. 8291 because, when he retired in 1992, the law had not yet been
enacted. The retirement laws administered by GSIS at that time were R.A. No.
660, R.A. No. 1616, and P.D. No. 1146.
Lastly, GSIS argues that the writ of mandamus issued by the CA is not proper
because it compels petitioner to perform an act that is contrary to law.
Respondent traverses these allegations, and insists that he has a clear legal right
to receive retirement benefits under either R.A. No. 660 or P.D. No. 1146.16 He
claims that he has met all the conditions for entitlement to the benefits under
either of the two laws.17 Respondent contends that the return of his contributions
does not bar him from pursuing his claims because GSIS can require him to
refund the premium contributions, or even deduct the amount returned to him
from the retirement benefits he will receive.18 He also argues that resumption of
his monthly pension will not constitute unjust enrichment because he is entitled to
the same as a matter of right for the rest of his natural life.19
Respondent accepts that, contrary to the pronouncement of the CA, he is not
covered by R.A. No. 8291. He, therefore, asks this Court to modify the CA

Decision, such that instead of Section 13 of R.A. No. 8291, it should be Section
12 of P.D. No. 1146 or Section 11 of R.A. No. 660 to be used as the basis of his
right to receive, and the adjustment of, his monthly pension.
Furthermore, respondent argues that allowing him to retire under another law
does not constitute "conversion" as contemplated in the GSIS law. He avers that
his application for retirement under R.A. No. 910 was duly approved by GSIS,
endorsed by the DOJ, and implemented by the DBM for almost a decade. Thus,
he should not be made to suffer any adverse consequences owing to the change
in the interpretation of the provisions of R.A. No. 910. Moreover, he could not
have applied for conversion of his chosen retirement mode to one under a
different law within one year from approval of his retirement application, because
of his firm belief that his retirement under R.A. No. 910 was proper a belief
amply supported by its approval by GSIS, the favorable endorsement of the DOJ,
and its implementation by the DBM.20
The petition is without merit.
Initially, we resolve the procedural issue.
GSIS contends that respondents petition for mandamus filed before the CA was
procedurally improper because respondent could not show a clear legal right to
the relief sought.
The Court disagrees with petitioner. The CA itself acknowledged that it would not
indulge in technicalities to resolve the case, but focus instead on the substantive
issues rather than on procedural questions.21 Furthermore, courts have the
discretion to relax the rules of procedure in order to protect substantive rights and
prevent manifest injustice to a party.
The Court has allowed numerous meritorious cases to proceed despite inherent
procedural defects and lapses. Rules of procedure are mere tools designed to
facilitate the attainment of justice. Strict and rigid application of rules which would
result in technicalities that tend to frustrate rather than to promote substantial
justice must always be avoided.22
Besides, as will be discussed hereunder, contrary to petitioners posture,
respondent has a clear legal right to the relief prayed for. Thus, the CA acted
correctly when it gave due course to respondents petition for mandamus.
This case involves a former government official who, after honorably serving
office for 44 years, was comfortably enjoying his retirement in the relative
security of a regular monthly pension, but found himself abruptly denied the
benefit and left without means of sustenance. This is a situation that obviously
cries out for the proper application of retirement laws, which are in the class of
social legislation.

The inflexible rule in our jurisdiction is that social legislation must be liberally
construed in favor of the beneficiaries.23 Retirement laws, in particular, are
liberally construed in favor of the retiree24 because their objective is to provide for
the retirees sustenance and, hopefully, even comfort, when he no longer has the
capability to earn a livelihood. The liberal approach aims to achieve the
humanitarian purposes of the law in order that efficiency, security, and well-being
of government employees may be enhanced.25 Indeed, retirement laws are
liberally construed and administered in favor of the persons intended to be
benefited, and all doubts are resolved in favor of the retiree to achieve their
humanitarian purpose.26
In this case, as adverted to above, respondent was able to establish that he has
a clear legal right to the reinstatement of his retirement benefits.
In stopping the payment of respondents monthly pension, GSIS relied on the
memorandum of the DBM, which, in turn, was based on the Chief Presidential
Legal Counsels opinion that respondent, not being a judge, was not entitled to
retire under R.A. No. 910. And because respondent had been mistakenly allowed
to receive retirement benefits under R.A. No. 910, GSIS erroneously concluded
that respondent was not entitled to any retirement benefits at all, not even under
any other extant retirement law. This is flawed logic.
Respondents disqualification from receiving retirement benefits under R.A. No.
910 does not mean that he is disqualified from receiving any retirement benefit
under any other existing retirement law.
The CA, however, incorrectly held that respondent was covered by R.A. No.
8291. R.A. No. 8291 became a law after respondent retired from government
service. Hence, petitioner and even respondent agree that it does not apply to
respondent, because the law took effect after respondents retirement.
Prior to the effectivity of R.A. No. 8291, retiring government employees who were
not entitled to the benefits under R.A. No. 910 had the option to retire under
either of two laws: Commonwealth Act No. 186, as amended by R.A. No. 660, or
P.D. No. 1146.
In his Comment, respondent implicitly indicated his preference to retire under
P.D. No. 1146, since this law provides for higher benefits, and because the same
was the latest law at the time of his retirement in 1992.27
Under P.D. No. 1146, to be eligible for retirement benefits, one must satisfy the
following requisites:
Section 11. Conditions for Old-Age Pension.
(a) Old-age pension shall be paid to a member who:

(1) has at least fifteen years of service;

(2) is at least sixty years of age; and
(3) is separated from the service.
Respondent had complied with these requirements at the time of his retirement.
GSIS does not dispute this. Accordingly, respondent is entitled to receive the
benefits provided under Section 12 of the same law, to wit:
Section 12. Old-Age Pension.
(a) A member entitled to old-age pension shall receive the basic monthly pension
for life but in no case for a period less than five years: Provided, That, the
member shall have the option to convert the basic monthly pensions for the first
five years into a lump sum as defined in this Act: Provided, further, That, in case
the pensioner dies before the expiration of the five-year period, his primary
beneficiaries shall be entitled to the balance of the amount still due to him. In
default of primary beneficiaries, the amount shall be paid to his legal heirs.
To grant respondent these benefits does not equate to double retirement, as
GSIS mistakenly claims. Since respondent has been declared ineligible to retire
under R.A. No. 910, GSIS should simply apply the proper retirement law to
respondents claim, in substitution of R.A. No. 910. In this way, GSIS would be
faithful to its mandate to administer retirement laws in the spirit in which they
have been enacted, i.e., to provide retirees the wherewithal to live a life of
relative comfort and security after years of service to the government.
Respondent will not receive --- and GSIS is under no obligation to give him --more than what is due him under the proper retirement law.
It must be emphasized that P.D. No. 1146 specifically mandates that a retiree is
entitled to monthly pension for life. As this Court previously held:
Considering the mandatory salary deductions from the government employee,
the government pensions do not constitute mere gratuity but form part of
compensation.
In a pension plan where employee participation is mandatory, the prevailing view
is that employees have contractual or vested rights in the pension where the
pension is part of the terms of employment. The reason for providing retirement
benefits is to compensate service to the government. Retirement benefits to
government employees are part of emolument to encourage and retain qualified
employees in the government service. Retirement benefits to government
employees reward them for giving the best years of their lives in the service of
their country.

Thus, where the employee retires and meets the eligibility requirements, he
acquires a vested right to benefits that is protected by the due process clause.
Retirees enjoy a protected property interest whenever they acquire a right to
immediate payment under pre-existing law. Thus, a pensioner acquires a vested
right to benefits that have become due as provided under the terms of the public
employees pension statute. No law can deprive such person of his pension
rights without due process of law, that is, without notice and opportunity to be
heard.28
It must also be underscored that GSIS itself allowed respondent to retire under
R.A. No. 910, following jurisprudence laid down by this Court.
One could hardly fault respondent, though a seasoned lawyer, for relying on
petitioners interpretation of the pertinent retirement laws, considering that the
latter is tasked to administer the governments retirement system. He had the
right to assume that GSIS personnel knew what they were doing.
Since the change in circumstances was through no fault of respondent, he
cannot be prejudiced by the same.1avvphi1 His right to receive monthly pension
from the government cannot be jeopardized by a new interpretation of the law.
GSIS argument that respondent has already been enormously benefited under
R.A. No. 910 misses the point.
Retirement benefits are a form of reward for an employees loyalty and service to
the employer, and are intended to help the employee enjoy the remaining years
of his life, lessening the burden of having to worry about his financial support or
upkeep. A pension partakes of the nature of "retained wages" of the retiree for a
dual purpose: to entice competent people to enter the government service; and
to permit them to retire from the service with relative security, not only for those
who have retained their vigor, but more so for those who have been
incapacitated by illness or accident.29
Surely, giving respondent what is due him under the law is not unjust enrichment.
As to GSIS contention that what respondent seeks is conversion of his
retirement mode, which is prohibited under R.A. No. 8291, the Court agrees with
the CA that this is not a case of conversion within the contemplation of the law.
The conversion under the law is one that is voluntary, a choice to be made by the
retiree. Here, respondent had no choice but to look for another law under which
to claim his pension benefits because the DBM had decided not to release the
funds needed to continue payment of his monthly pension.
Respondent himself admitted that, if the DBM had not suspended the payment of
his pension, he would not have sought any other law under which to receive his
benefits. The necessity to "convert" was not a voluntary choice of respondent but

a circumstance forced upon him by the government itself.

Finally, GSIS would like this Court to believe that because it has returned
respondents premium contributions, it is now legally impossible for it to comply
with the CAs directive.
Given the fact that respondent is ineligible to retire under R.A. No. 910, the
refund by GSIS of respondents premium payments was erroneous. Hence, GSIS
can demand the return of the erroneous payment or it may opt to deduct the
amount earlier received by respondent from the benefits which he will receive in
the future. Considering its expertise on the matter, GSIS can device a scheme
that will facilitate either the reimbursement or the deduction in the most costefficient and beneficial manner.
The foregoing disquisition draws even greater force from subsequent
developments. While this case was pending, the Congress enacted Republic Act
No. 10071,30 the Prosecution Service Act of 2010. On April 8, 2010, it lapsed into
law without the signature of the President,31 pursuant to Article VI, Section 27(1)
of the Constitution.32
Section 24 of R.A. No. 10071 provides:
Section 24. Retroactivity. - The benefits mentioned in Sections 14 and 16 hereof
shall be granted to all those who retired prior to the effectivity of this Act.
By virtue of this express provision, respondent is covered by R.A. No. 10071. In
addition, he is now entitled to avail of the benefits provided by Section 23, that
"all pension benefits of retired prosecutors of the National Prosecution Service
shall be automatically increased whenever there is an increase in the salary and
allowance of the same position from which he retired."
Respondent, as former Chief State Prosecutor, albeit the position has been
renamed "Prosecutor General,"33 should enjoy the same retirement benefits as
the Presiding Justice of the CA, pursuant to Section 14 of R.A. No. 10071, to wit:
Section 14. Qualifications, Rank and Appointment of the Prosecutor General. The Prosecutor General shall have the same qualifications for appointment, rank,
category, prerogatives, salary grade and salaries, allowances, emoluments, and
other privileges, shall be subject to the same inhibitions and disqualifications, and
shall enjoy the same retirement and other benefits as those of the Presiding
Justice of the Court of Appeals and shall be appointed by the President.34
Furthermore, respondent should also benefit from the application of Section 16 of
the law, which states:
Section 16. Qualifications, Ranks, and Appointments of Prosecutors, and other

Prosecution Officers. x x x.
Any increase after the approval of this Act in the salaries, allowances or
retirement benefits or any upgrading of the grades or levels thereof of any or all
of the Justices or Judges referred to herein to whom said emoluments are
assimilated shall apply to the corresponding prosecutors.
Lastly, and most importantly, by explicit fiat of R.A. No. 10071, members of the
National Prosecution Service have been granted the retirement benefits under
R.A. No. 910, to wit:
Section 25. Applicability. - All benefits heretofore extended under Republic Act
No. 910, as amended, and all other benefits that may be extended by the way of
amendment thereto shall likewise be given to the prosecutors covered by this
Act.
Hence, from the time of the effectivity of R.A. No. 10071, respondent should be
entitled to receive retirement benefits granted under R.A. No. 910.
Consequently, GSIS should compute respondents retirement benefits from the
time the same were withheld until April 7, 2010 in accordance with P.D. No.
1146; and his retirement benefits from April 8, 2010 onwards in accordance with
R.A. No. 910.
A final note. The Court is dismayed at the cavalier manner in which GSIS
handled respondents claims, keeping respondent in the dark as to the real status
of his retirement benefits for so long. That the agency tasked with administering
the benefits of retired government employees could so unreasonably treat one of
its beneficiaries, one who faithfully served our people for over 40 years, is
appalling. It is well to remind GSIS of its mandate to promote the efficiency and
welfare of the employees of our government, and to perform its tasks not only
with competence and proficiency but with genuine compassion and concern.
WHEREFORE, the foregoing premises considered, the Decision dated October
28, 2008 and the Resolution dated February 18, 2009 of the Court of Appeals in
CA-G.R. SP No. 101811 are hereby AFFIRMED WITH MODIFICATION.
Government Service Insurance System is ORDERED to (1) pay respondents
retirement benefits in accordance with P.D. No. 1146, subject to deductions, if
any, computed from the time the same were withheld until April 7, 2010; and (2)
pay respondents retirement benefits in accordance with R.A. No. 910, computed
from April 8, 2010 onwards.
In order that respondent may not be further deprived of his monthly pension
benefits, this Decision is IMMEDIATELY EXECUTORY.