TIBURCIO CHAVES, SR., PETITIONER, VS. AUDITOR GENERAL ISMAEL MATHAY, RESPONDENT.

Appeal from a decision of the Auditor General, in which we reaffirm
the Court’s doctrine against the payment to retirees from the government
service of double pension for exactly the same services.

Petitioner had been an employee of the Bureau of Public Highways
as chief clerk-administrative officer for many years.  On August
21, 1959, he retired optionally under section 12(c) of Commonwealth
Act 186 (the Government Service Insurance Act) as amended by Republic Act 1616 with
a creditable service of 27.1398 years and was paid a gratuity in the sum of
P7,010.40.

On October 31, 1962,
barely three years after his retirement, petitioner was reinstated in the
government service as chief clerk of the province
of Cotabato.  Less than five years later, on August 16,
1967, he was allowed to retire again optionally for the second time, under the
same Act, as further amended by Republic Act 4968, then recently approved,
which provided for greater and more extensive benefits.  He was credited with a total service of
32.1250 years, i.e. including all services covered by and already counted upon
his first retirement in 1959.  He was
therefore held entitled to a much larger retirement gratuity of P20,606.25, but
the sum of P7,010.40 received upon his first retirement was debited against him
and deducted, leaving a net balance of P13,595.85 which was paid to him.

Petitioner applied to respondent Auditor General for a refund of
the deduction.  The general manager of
the Government Service Insurance System to whom petitioner’s claim was duly
referred, held that petitioner was not entitled to the refund claimed, stating
that “(I)n determining his eligibility to retire in 1967 under Section
12(c) of CA 186, as amended by RA 1616 and further amended by RA 4968, and in
computing the creditable service and the gratuity benefits due Mr. Chaves, all
services prior to his reinstatement were included.  For him to receive full benefits under the
second retirement in addition to the gratuity he had already received would
amount to allowing him to receive double compensation for exactly the same services
in consideration”, contrary to the doctrine of this Court against payment
of double pension for exactly the same services in Borromeo
vs. GSIS^[1]
and Espejo vs. Auditor General.^[2]
Respondent, concurring in this opinion of the GSIS, thereupon denied
petitioner’s claim for refund.  Hence,
this appeal.

The main issue at bar is the correctness of the Auditor General’s
decision applying the principle precluding government retirees from receiving
double pension for exactly the same services in the absence of an express
exemption provided by law.

We find no error in the decision appealed from.

Here, petitioner first retired in August, 1959 as chief clerk in
the Bureau of Public Highways under the Government Service Insurance Act,
whereby under the provisions of Republic Act No. 1616 then in force,^[3]
he was allowed to retire with a retirement gratuity, “in addition to the
return of his personal contributions plus interest … equivalent to one month
salary for every year of service based on the highest rate received, but not
to exceed twenty-four months,”^[4]
amounting to the sum of P7,010.40.  While
not stated in the record, it can easily be deduced that the highest rate of
service at which he was retired amounted to about P292.00 per month.^[5]

Barely three years thereafter in October, 1962, petitioner was
reinstated in the government service, this time as chief clerk of the province
of Cotabato, and after less than five years of
service was allowed to retire again for the second time on August 16, 1967
under the same Act, as further amended by Republic Act No. 4968, which had then
just been enacted on June 17, 1967. 
Greater and more extensive benefits of the amendatory statute provided
for a retirement gratuity benefit “in addition to the return of his
personal contributions with interest compounded monthly and the payment of
the corresponding employer’s premiums . . . . 
without interest, . . . equivalent 
to one month’s salary of service for every year of the first twenty
years of service, plus one and one-half month’s salary for every year of
service over twenty but below thirty years and two months’ salary for every
year of service over thirty years . . . based on the highest rate received .
. .”^[6]

Thus, where under his first retirement petitioner received a retirement
gratuity of only P7,010.40 (a maximum of 24 months salary at P292.00 per month
for his then creditable service of 27 years), petitioner was held entitled
under the more extensive benefits provided by the later amendatory statute,
R.A. 4968, for his less than five years of additional service, to a much
larger retirement gratuity of P20,606.25 (a total of 39,2500 gratuity months at
the highest rate received of P525.00 per month for his total creditable service
of 32 years, including the first 27 years covered by his first
retirement).  Plainly, no error was
committed by the GSIS as upheld by respondent in requiring in accordance with
law^[7]
the refund and deduction of petitioner’s first retirement gratuity of
P7,010.40, leaving a net balance of P13,595.05 which was duly paid.

The doctrine of Espejo and Borromeo therefore clearly applies to petitioner’s
case, notwithstanding his contrary protestations.  The “common-sense consideration”
stated by Mr. Justice J. B. L. Reyes for the Court in Espejo
that if a retiree is being credited with his years of service under his first
retirement in computing his gratuity under his second retirement, it is
but just that the retirement gratuity received by him under his first
retirement should also be charged to his account, manifestly governs the case
at bar.  It is but in accordance with the
rule consistently enunciated by the Court, as in Anciano
vs. Otadoy, affirming Borromeo,
that claims for double retirement or pension such as petitioner’s, “would
run roughshod over the well-settled rule that in the absence of an express
legal exception, pension and gratuity laws should be so construed as to
preclude any person from receiving double pension.”^[8]

It should further be noted that all the above-cited jurisprudence
involved retirements under two different laws or systems, and the Court held
that the retiree was liable to refund the benefit received under the first
retirement “unless expressly exempted by law from refunding said gratuity
or pension”, pursuant to the provisions of section 12(g) CA 186.  Here, much less is there any doubt as to the
lack of any such exemption since petitioner’s two retirements were both under
the Government Service Insurance Act, which does not grant such exemption but
expressly provides in the same section that a reinstated employee “shall
be given full credit for services rendered by him prior to his reinstatement .
. .  provided, however,
That said credit shall not be given if the employee shall not refund the System
. . . . (2) any gratuity or benefit he received under any pension or retirement
plan of an employer unless expressly exempted by law from refunding said
gratuity or pension x x .”

The thrust of petitioner’s claim is actually that the denial of
his claim amounts to “unfounded discrimination” against him by
respondent, in not applying to his case the action it had followed in two
previous administrative retirement cases, one involving the very respondent Mathay himself and the other involving Pacifico
Mescallado, where both retirees received their
gratuity in full upon their second retirement from the government service
without any deduction.  Respondent’s
brief distinguishes these two cases from that at bar as follows:

“Mr. Mathay retired on May 28, 1945 as Budget Commissioner
under Act 2589, as amended, and was paid the maximum allowable gratuity under
said law equivalent to twelve (12) months salary, though he had been in the
service since 1919.  In 1954, Mr. Mathay was reinstated in the Government service as NAMARCO
General Manager, and later as Auditor of the Central Bank.  He retired again as Auditor of the Central
Bank in May of 1964 under RA 1616, after rendering a total creditable service
of more than thirty eight (38) years, and was allowed the then maximum gratuity
under said said RA 1616 equivalent to twenty four
(24) months salary.  Hence both
gratuities were well within his total creditable service of thirty eight (38)
years and the payment of both gratuities did not violate the rule against
double compensation for exactly the same period of service.

x x x x x x x

“x x x
When Mr. Mescallado was reinstated in the service, he
had been retired for five years, and the monthly gratuity he was entitled to
had expired.  Not having any ‘un expired
portion’ of retirement benefits under his previous retirement, it was correct
not to deduct the previous gratuity received from his second retirement.

“The claim of petitioner Chaves is different because in
computing the retirement gratuity due to him upon his second optional retirement
under RA 1616, as amended, the services prior to reinstatement were included.  Under the law, all services prior to
reinstatement shall not be credited, unless the gratuity received thereunder was refunded (Sec. 12(g) CA 186, as amended.)
Hence, said services were counted twice in the computation of petitioner’s
total creditable service, which would constitute ‘double compensation’ for the
same years of service.  That is not
allowed by law.”

At any rate, these two cases cited by petitioner are not before
the Court.  Not having been elevated to
the Court in a proper case, we are not called upon to rule upon the correctness
or error of the Auditor General’s rulings therein.  Needless to state, to the extent that said
actions of the Auditor General are in conflict with the doctrine against double
pension for exactly the same services in the absence of an express legal
exemption, enunciated in the above-cited cases, they have no valid nor binding
effect.  As stated in Taylor^[9]
“(T)he error notwithstanding, the law must be enforced even if it
prejudiced the defendant-appellee under the principle
that mistakes of public officials cannot prejudice the State to the extent of
violating an express provision and policy of the law.”

Petitioner’s plea for “liberality in interpretation of laws
granting pensions and other welfare laws” is of course answered by the
law’s very liberality granting him much greater and more extensive benefits on
his second retirement amounting to almost treble that of his first
retirement for less than five years of additional service, as shown above, and
the Act’s express injunction and condition that reinstated employees such as
petitioner shall not be given credit for service prior to reinstatement unless
they have refunded to the GSIS the gratuity received for such services under
their first retirement.^[10]

ACCORDINGLY, the decision appealed from is hereby
affirmed, with costs against petitioner.

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

Makasiar, J., took no part.

^[1] L-11011,
November 23, 1960.

^[2]
97 Phil. 216 (1955).

^[3]
Enacted on May 31, 1957.

^[4]
Sec. 12(c) of C.A. 186 as amended by R.A. 1616; emphasis supplied.

^[5]
P7,010.40 divided by 24 months.

^[6] Sec.
12(c) as amended by R.A. 4968, emphasis supplied.

^[7]
See Sec. 12(g) and sec. 28(b) of C.A. 186, as amended.

^[8]
27 SCRA 200, 106 (Feb. 28, 1969);
see also Taylor v. Gimenez, 5 SCRA 227 (1961) and Cebu
Portland Cement Co. vs. de Jesus, 7 SCRA 572 (1963).

^[9] Supra,
fn. 8.

^[10]
Sec. 12(g) C.A.
186, as amended.