THE PHILIPPINE VETERANS AFFAIRS OFFICE, PETITIONER, VS. HON. LINO L. AÑOVER, AS JUDGE OF THE COURT OF FIRST INSTANCE OF RIZAL, BRANCH V, QUEZON CITY, AND DIONISIO ESTUDILLO, RES…

This is a petition for certiorari, treated as a special civil action,
seeking a review of the decision of the former Court of First Instance of Rizal, Branch. V, Quezon
City, promulgated on October 1, 1974 in Civil Case No. Q-18363, for specific
performance, entitled “Dionisio Estudillo, plaintiff, versus Philippine Veterans Affairs
Office, defen­dant,” ordering the defendant to pay the plaintiff differen­tial
pensions as well as allowances for his unmarried minor children pursuant to
Section 9 of Republic Act No. 65^[1]
as amended by Republic Act Nos. 1920 and 5753. Defendant was likewise ordered
to pay attorney’s fees and costs of suit. The dispositive
portion of the decision reads as follows:

“WHEREFORE, judgment is hereby rendered sentencing the defendant to
pay to the plain­tiff:

“(A)  the difference of his monthly pension at the
rate of P25.00 per month effective April 22, 1950 up to June 21, 1957;

“(B)  P75.00 a month plus P10.00 monthly for
his then two unmarried minor children below 18 years of age from June 22, 1957 up to
June 30, 1963;

“(C)  P50.00 a month from July 1, 1963 up to June
21, 1969; and

“(D)  P150.00 a month from June 22, 1969 and monthly
thereafter; to pay attorney’s fees in the amount of P1,000.00 and the costs of
suit.

“SO ORDERED.”

In a complaint dated December 12, 1973 before the lower court, Dionisio Estudillo (hereinafter
referred to as Estudillo) averred that he was an
enlisted man in good standing of a guerilla organization who took active parti­cipation
in the liberation drive against the enemy in the last world war; that due to
said military service, he contracted
pulmonary tuberculosis which rendered him permanently incapacitated; that on or
about April 22, 1950, he filed a disability claim for pension with the defunct
Philippine Veterans Board (later succeeded by Philippine Veterans Ad­ministration,
now Philippine Veterans Affairs Office) pursuant to Section 9 of R.A. 65, which
claim was approved on July 20, 1950 but only at the rate of P25.00 a month instead of P50.00 as provided by said Act. It was
further asserted in the complaint that on June 22, 1957, said Section 9 was
amended by Republic Act No. 1920 increasing the monthly pension for those who
are permanently incapacitated from P50.00 to P100.00 and granting
the amount of P10.00 for their unmarried minor children; that
despite the amendment, Estudillo’s monthly pension
was increased only to P50.00 and his two minor children were not extended any
benefit; that on or about the year 1966, his pension was raised to P60.00 a
month. Likewise, Estudillo claimed that said Section
was further amended by Republic Act No. 5753 on June 22, 1969 increasing the
monthly pension of those per­manently incapacitated from P100.00 to P200.00 but
not withstanding the amendment, his monthly pension of P60.00 remained the same
from said date until the complaint was filed in the lower court.

In its answer dated June 25, 1974, the Philippine Veterans
Affairs Office (PVAO for short) alleged that as shown by the records, the
service-connected disability of Estudillo is
bronchitis, chronic secondary to gunshot wound;
that Estudillo was initially awarded pension benefits
at the rate of P25.00 per month only because his disability was then rated at
50% disabling in accordance with the rating adopted by PVAO pursuant to law;
that when Republic Act No. 1920 took effect, Estudillo’s
monthly pension was only increased to P50.00 because his disability was then
rated at 50% disabling and his minor children were not awarded additional
pension as he is not permanently inca­pacitated; that Estudillo’s monthly pension was raised to P60.00 due to
the increase in severity of his service-connected disability to 60% as found
out during his sub­sequent re-rating; that Estudillo
is still receiving P60.00 a month because his service-connected disability
remains to be 60% disabling. PVAO set up the defenses that the disability of Estudillo
is not permanent, hence, he is not entitled to differentials and additional
benefits allowed by law; that the findings of an administrative body should not
be interferred with by the court; that the claim of Estudillo was approved on July 20, 1950, thus his cause of
action, if any, has prescribed when the case was filed.

On August 26, 1974, the parties submitted a joint stipulation of
facts worded in the following manner:

“JOINT
STIPULATION OF FACTS

“COME NOW the parties, represented by their respective
counsel, and unto this Honorable Court, respectfully submit the following Joint
Stipulation of Facts:

“1.  That defendant Philippine Veterans Affairs
Office, which succeeded the defunct Philippine Veterans Administration and the
Philippine Veterans Board, is an agency of the Government charged with the
administra­tion of different laws in favor of veterans, their widows, orphans
and indigent parents; that it has the power to pass upon the merits and qualifications of persons
applying for rights and privileges extended by the Act, pursuant to such rules
and regulations as it may adopt to insure the speedy and honest fulfillment of
its aims and purposes;

“2.  That
plaintiff was a member in good standing of a recognized guerilla
organization, and took active participation in the libera­tion drive against
the enemy in the last World War, and due to said military service, he con­tracted
bronchitis in line of duty;

“3.  That
on October 18, 1946, Republic Act
No. 65 was approved providing for a Bill of Rights for officers and Enlisted
Men of the Philippine Army, Recognized and Deserving Guerilla organizations,
and veterans of the Philippine Revolution, and Section 9 thereof, reads as
follows:

‘SEC. 9. The persons mentioned in Sections one and two hereof who
are permanently incapacitated from work owing
to sickness, disease or injury sustained in line of duty, shall be given
a life pension of Fifty pesos a month,
unless they are actually receiving a similar pension from other government
funds, and shall receive in addition, the neces­sary hospitalization and
medical care.’

“4.  That on or about April 22, 1950, plaintiff
filed a claim for disability pension under Sec. 9, RA 65, which claim was
approved on July 20, 1950 to take effect from the date of filing on April 22,
1950, and at the rate of P25.00 per month;

“5.  That on June 22, 1957, Sec. 9, RA 65 was
amended by RA 1920, increasing the basic monthly pension from P50.00 to P100.00 plus P10.00 a month each for unmarried minor children below 18 years of
age, which RA 1920 was implemented effective July 1, 1963;

“6.  That effective July 1, 1963, plain­tiff’s
pension was increased from P25.00 to P50.00 a month, and sometime in 1966, the
rate was increased to P60.00;

“7.  That on June 22, 1969, Sec. 9, RA 65, was
again amended by RA 5753 further increasing the basic monthly pension from
P100.00 to P200.00, plus P30.00 for the wife, and P30.00 a month each for
unmarried minor children below 18 years of age, but plaintiff’s pension was no
longer increased as only veterans with 100% disabilities and who are
permanently incapacitated from work are entitled to the full rate of pension as
plaintiff is only 60% disabled.

“WHEREFORE, it is respectfully prayed that a decision be
rendered in accordance with the foregoing Stipulation of Facts. It is likewise
prayed that the parties be gran­ted a period of fifteen (15) days from the
filing of the Stipulation of Facts within which to file simultaneous memorandum
in support of their respective contention with the understanding that after the
lapse of said period, with or without memoranda, this case is deemed submitted
for decision.

“MANILA, August 26, 1974.

ESTELITO P.
MENDOZA

Solicitor General

“(SGD.) MARCOS J. ROTEA

Counsel for the Plaintiff

R-419 Mercedes Bldg.

Plaza
Miranda, Manila

REYNATO S. PUNO

Asst. Solicitor
General

By:

(SGD.) JESUS V.
DIAZ

Solicitor”

Upon the facts thus stipulated, the lower court as aforestated, rendered its questioned decision in favor of Estudillo. The court a quo in resolving
the sole issue as to whether or not Estudillo is entitled
to the full benefits of Republic Act No. 65 and of the subsequent amendatory
laws, started on the premise that to be entitled to the benefits allowed under
said laws, one has to be permanently incapa­citated from work. The respondent
court brushed aside the argument of PVAO that Estudillo’s
disability is merely partial and is rated only 60% by ruling that when the
claim of Estudillo for disability pension was
approved, it can only be assumed that he
is permanently disabled, otherwise, Estudillo would
have not been given the monthly pensions. Furthermore,
the rating given on the incapacity of
Estudillo as a basis for the amount of monthly
pension is not justi­fied because the laws involved do not provide for ratings.
The lower court held as untenable PVAO’s defense of
pres­cription because the claim of Estudillo is
continuing and there was partial compliance by PVAO.

PVAO’s motion for reconsideration having been
denied, the present case was instituted, raising the following arguments:

“Disability of veteran Estudillo
only partial, hence the decision of respondent judge awarding full pension
benefits to him is erroneous.

“There is no appropriated funds to
cover the claim of private
respondent and the res­pondent judge erred in compelling its payment.

“The respondent judge erred in not finding
that the money claim of private respondent has already prescribed.

“Respondent judge erred in ordering
peti­tioner pay attorney’s fees and costs.”

The question of whether Estudillo is
entitled to the full benefits of Section 9 of R.A. 65 and its amendatory Acts, as raised in the
first argument, constitutes the core of
the present controversy.

PVAO argues that Section 9 of R.A. 65, as amended by R.A. 1920
and R.A. 5753, limits the coverage of its provision to those veterans who are
permanently incapacitated for work. PVAO contends that in paragraphs 2 and 7 of
the joint stipulation of facts, it was admitted by Estudillo
that as a consequence of his military
service, he contracted bronchitis and for which he was given
by PVAO a disability rating of only 60%. The aforesaid stipulated facts, the
PVAO stressed, bind the court so
as not to extend to Estudillo the full benefits of the law.

On the other hand, Estudillo anchors
his right to recover differential pensions and allowances for his minor
children on the basis of the rulings of this Court on the cases of Begosa vs. Philippine
Veterans Administration^[2] and Teoxon
vs. Member of the Board of Administrators.^[3]
Estudillo argues that in Begosa,
the disability was only 30%,
while in Teoxon it was only 50%, but since the disabi­lity of both veterans are
permanent, they were awarded the full benefits of the law.

We agree with the PVAO.
The issue is not a novel one for this Court, in the similar case of Board of
Administra­tors, PVA vs. Agcaoili,^[4] (hereinafter referred to as Agcaoili case) has settled this question. In said case, veteran-claimant Mauro Abrera filed before the lower court a petition for mandamus
seeking to recover his differential pensions and the monthly allowances for his
wife and minor children. Abrera and PVA submitted to
the lower court a stipulation of facts stating that Abrera
was not permanently incapacitated; that upon physical examination, his incapa­city
was rated as only 50% by the PVAO and he was given the corresponding monthly
pension in the amount of P25.00; that after a re-rating, Abrera’s
disability was increased to 75% and his monthly pension was likewise increased;
that after a subsequent re-rating, his disability was reduced to 60% with a
corresponding decrease in his monthly pension. On the facts stipulated and the
memoranda submitted by the
parties, the lower court
rendered judgment awarding Abrera full pension
benefits, including allowances for his wife and minor children. On appeal, this Court, in setting aside the decision of the lower court,
said:

“In the case at bar, however, the provisions of the
stipulation of facts clearly evince one inescapable fact: that Abrera’s disability did not render him permanently
incapacitated for work. When it formulated its decision in civil case 90373,
the court disregarded this material fact, and consequently failed to draw a
conclusion consistent therewith. Stipula­tion by parties to a litigation
regarding certain facts require no further evidence and cannot be contradicted
unless the party adversely affected can show that he agreed thereto through a palpable mistake. In the case at bar, Abrera has made no attempt to demonstrate, directly or
inferentially, that he entered into the stipulation of facts through a pal­pable
mistake.

“Thus, the court a quo erred when it entered a judgment inconsistent with the
facts agreed upon by the parties. Where the
parties submit the case on a stipula­tion of facts, the court should render
judgment strictly in accordance therewith. Otherwise, the judgment is inefficacious.

“Furthermore, the explicit language of section 9 of Republic
Act 65, as amended, leaves no room for doubt: it makes available full pension
benefits only to those ‘who are permanently incapacitated from work,’ and only
when the veteran is permanently disabled may his wife and minor children be
entitled to receive the pensions specifically provided for them by law. The
words ‘permanently incapacitated’ have
a restrictive signification which cannot be con­veniently
disregarded. Application of the law according to its plain terms the court
failed to do, for, it extended to Abrera full pension benefits accorded only to those who fall within the ambit of
the strict statutory qualification.”

Following the pronouncement in the Agcaoili case that the court cannot as a rule deviate from the stipulation
of facts entered into by the parties, We hold that the lower court erred in
awarding full pension benefits to Estudillo and his
minor children. It is evident from a perusal of the joint stipulation of facts in
the case at bar that Estudillo is not permanently incapacitated. Not being
permanently incapacitated, he and his minor children are not entitled to receive the full pension benefits provided by law.

Respondent Estudillo labors under a muddled and mistaken appreciation of the cases of Begosa and
Teoxon upon which he predicates his claim. In both
cases, the benefits awarded to the claimants therein were not based on physical
disability ratings but on the findings of this Court that both Begosa and Teoxon suffered
from permanent disability which rendered them permanently
incapacitated for work. Such findings of permanent disability were even cited
in the later case of Agcaoili.

On the issue of prescription, PVAO asserts that Estudillo’s right of action to recover the alleged
differential pensions under R.A. 65 and R.A. 1920 accrued on April 22, 1950 and
June 22, 1957, respectively. PVAO maintains that under Article 1144 of the
Civil Code, an action based upon an obligation created by law must be brought
within ten (10) years from the time the right of action accrues. It is thus obvious, the PVAO alleges, that the
said claims of Estudillo have already prescribed
because the present case was filed before the lower court only on December 17,
1973.

As has been previously shown, Estudillo
is not entitled to differential pensions and allowances for his minor children
under R.A. 65 and R.A. 1920. Hence, it is no longer necessary to dwell into the
issue of prescription.

Regarding Estudillo’s claim under R.A. 5753, the PVAO does not
dispute its validity but points out that there is no appropriated funds to
satisfy the former’s claim for differential pensions.
It should be noted that R.A. 5753 took effect on June 22, 1969 increasing the
monthly pension for permanently incapacitated veterans from P100.00 to P200.00.
At that time, the disability rating of Estudillo was 60% and his monthly pension was P60.00.^[5] The
PVAO, instead of increasing the monthly pension or Estudillo from P60.00 to P120.00, which latter amount
is 60% of P200.00, continued to give Estudillo a
monthly pension of only P60.00. The question now is whether or not the pay­ment
of increased pension provided in the amendatory Act, R.A. 5753, could be
ordered, even where there was no actual release of funds for the purpose. In Agcaoili, the same issue was treated in this wise:

“We note that the amount of the monthly pension given to him
in the past was based on his physical disability rating multiplied by the
amount of the monthly pension pres­cribed by the law. Thus, when section 9 of
Republic Act 65, as originally passed, provided for a monthly pension of P50.00 for permanently incapacitated
veterans and his disability rating was 50%, he was given a monthly pension of
P25.00; when Republic Act 1920 increased the monthly pension for permanently
disabled veterans from P50.00 to P100.00, and his disability rating was 75%,
the monthly pension given to him was P75.00; subsequently, when his disability
rating was reduced to 60%, his monthly pension was correspondingly reduced to
P60.00. But from January 1, 1972, when the petitioner implemented Republic Act
5753 which increased the monthly pension for permanently incapacitated veterans
from P100.00 to P200.00, instead
of increasing the monthly pension of Abrera from
P60.00 to P120.00, which latter
amount is 60% of P200.00, the petitioner continued to give Abrera
a monthly pension of only P60.00. The inability of the peti­tioner to pay Abrera the
differential of P60.00 in monthly pension is attributed by it, in its own words,
‘to the failure of Congress to appropriate the necessary funds to cover all claims for benefits,
pensions and allowances.’ And the peti­tioner states that it has ‘no
alternative but to suspend (full) implementation of said laws until such time
as sufficient funds have been appropriated by Congress’ to cover the total
amount of all approved claims.

“We find the
explanation of the petitioner satisfactory, but we nevertheless hold that as a
matter of law Abrera is entitled to a monthly pension
of P120.00 from January 1, 1972 when Republic Act 5753 was implemented up to
the present, if his physical disabi­lity rating has continued and continues to
be 60%. Payment to him of what is due him from January 1, 1972 must how­ever
remain subject to the availability of Government funds duly set aside for the purpose, and subject further to periodic
re-rating of his physical disability.

“But even if we have thus defined the precise terms, nature
and scope of the entitlement of the respondent Abrera,
for the guidance of the petitioner, we nevertheless refrain from ordering the
petitioner to pay the amount of P120.00 per month from January 1, 1972 that is
due to the respondent by virtue of the mandate of section 9 of Republic Act 65,
as amended by Republic Act 5753, because the Government has thus far not
provided the neces­sary funds to pay all valid claims duly approved under the
authority of the said statute.”

Clearly, therefore, while Estudillo is entitled to a monthly pension of P120.00,
payment to him of the afore­said pensions is subject to availability of
government funds appropriated for the purpose.

On the last ground relied upon in support of this petition, We
agree with the PVAO that the lower court committed an error in ordering the
former to pay Estudillo the amount of P1,000.00 for attorney’s fees and the
costs of the suit. Settled is the rule that costs of suit are not recoverable
against government entities and officers when they are sued purely in their
official capacity as was petitioner in this case.^[6]
And there being no showing that PVAO acted in bad faith and disregarded in a
wanton manner the rights of Estudillo, the award of
attorney’s fees is unjustified.

WHEREFORE, the questioned decision is hereby SET ASIDE and
another one is entered ordering PVAO to pay Estudillo
the amount of P120.00 from June 22, 1969, the date of effectivity
of R.A. 5753, up to the present. Payment to Estudillo
of what is due him from June 22, 1969 is hereby declared subject to the
availability of Government funds appropriated for the purpose.

SO ORDERED.

Makasiar, (Chairman), Aquino, Concepcion, Jr., Abad Santos, and Escolin, JJ., concur.

De Castro, J., on leave.

^[1]
“Sec. 9. The persons mentioned in Sections one and two hereof who are
permanently incapacitated from work owing to sickness, di­sease or injury
sustained in line of duty shall be given a life pension of Fifty Pesos a month,
unless they are actually receiving a similar pension from other Government
funds and shall receive in addition, the necessary hospitalization and medical
care.”

^[2]
32 SCRA 466 (1970).

^[3]
33 SCRA 585 (1970).

^[4]
58 SCRA 72 (1974).

^[5]
par. 7, Joint Stipulation of Facts, p.
21, Rollo.

^[6]
Tabuena vs. CA, 3 SCRA 413; Section 1, Rule 142,
Rules of Court.