**Facts:**
Nicolas Montesclaros, a 72-year-old Sangguniang Bayan member, married 43-year-old Milagros Orbiso on July 10, 1983. Nicolas applied for retirement benefits with the Government Service Insurance System (GSIS) under Presidential Decree No. 1146 (PD 1146) for retirement effective February 18, 1985, designating Milagros as his beneficiary. He officially retired on February 17, 1985, and GSIS approved his retirement benefits on January 31, 1986. After Nicolas’ death on April 22, 1992, Milagros filed a claim for survivorship pension under PD 1146. On June 8, 1992, GSIS denied the claim citing Section 18 of PD 1146, which precludes the awarding of survivorship pension to a surviving spouse who married the pensioner less than three years before pension qualification. Milagros and GSIS disagreed on the effective date of Nicolas’ retirement, with GSIS asserting it was February 17, 1984, causing the marriage disqualification.
Milagros filed a special civil action for declaratory relief against GSIS with the Regional Trial Court, which ruled in her favor on November 9, 1994, declaring Milagros eligible for the survivorship pension and ordered GSIS to pay the benefits due including interest. The Court of Appeals affirmed this decision, leading GSIS to seek a review by the Supreme Court. Meanwhile, Milagros in a letter dated January 10, 2003, communicated her disinterest in pursuing the case further, but GSIS insisted on a merits-based resolution due to the broader implications of the legal issues involved.
**Issues:**
1. Whether Section 16 of PD 1146 entitles Milagros to survivorship pension.
2. Whether retirement benefits form part of the conjugal property.
3. The constitutionality and potential repeal of Section 18 of PD 1146 by Articles 254 and 256 of the Family Code.
**Court’s Decision:**
The Supreme Court decided against GSIS, upholding the Court of Appeals’ decision. It declared the proviso in Section 18 of PD 1146 unconstitutional for violating the due process clause and denying equal protection of the law. The Court ruled that:
1. Retirement benefits are compensatory and form part of the conjugal property, rendering Milagros entitled to the survivorship pension as a beneficiary under PD 1146.
2. The contested proviso in Section 18 unlawfully discriminates against spouses marrying close to retirement, providing no substantive justification or bearing to the purpose of PD 1146, thus violating equal protection principles.
3. Consequently, the proviso’s discriminatory nature and lack of constitutionality could not form the basis for denying Milagros’ claim for survivorship benefits.
**Doctrine:**
This case reiterates the principle that statutes or provisions denying benefits without substantive differentiation or due process violate constitutional protections on due process and equal protection clauses. It further clarifies the nature of retirement benefits as part of conjugal property within the legal regime of the Philippines.
**Class Notes:**
– **Conjugal Property:** Retirement benefits earned and contributed to during the marriage form part of the conjugal property.
– **Due Process Clause:** Arbitrary denial of benefits or properties without notice and hearing contradicts the due process clause.
– **Equal Protection Clause:** Laws must not discriminate without substantial justification; classifications must be reasonable, pertaining to the law’s purpose.
– **Survivorship Pension and PD 1146:** Outlines the eligibility for survivorship benefits and the procedural and substantive requisites under PD 1146.
– **Family Code Retroactivity:** The Family Code applies retroactively insofar it does not prejudice or impair vested rights.
**Historical Background:**
This case situates within the broader context of evolving laws related to governmental retirement benefits in the Philippines, especially concerning survivorship pensions. It underscores tensions between earlier statutes and amendments brought by the Family Code, highlighting shifts in understanding conjugal property, vested rights, and the rights of surviving spouses. It demonstrates the judiciary’s role in reconciling conflicting laws and underscores the principle that laws, especially those providing for social security benefits, must adapt to the socio-economic and legal realities of their time to fulfill their protective purpose.
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