FEDERICO G. SANTIAGO, PLAINTIFF AND APPELLANT, VS. BINALBAGAN ESTATE, INC., DEFENDANT AND APPELLEE.

The plaintiff entered the service of the defendant on October 20, 1940,
first as stenographer and subsequent ly in various capacities until he
resigned effective February 16, 1947, due to ill health. The highest
monthly salary received by the plaintiff during the period of his
employment was P250. Plaintiff’s connection with the defendant was
continuous, except when it was interrupted by the outbreak of the last
war and the entry of the Japanese Army in manila on January 2, 1942,
when the defendant’s Manila office was closed until the early part of
February, 1942, and by the battle for the liberation of Manila when
said office was closed from February 3, 1945, up to the early part of
August, 1945.

While the plaintiff was thus employed,
Resolution No. 31 of the board of directors of the defendant, approved
on June 9, 1936, was in force. It provided that all permanent employees
of the defendant separated from the service on or after July 1, 1938,
for any reason other than inefficiency or misconduct, were entitled to
retirement gratuity at the rate of one month’s salary for each year of
serve, and the proportionate amount of any fraction thereof, said
gratuity to be based on the highest basic rate of salary received.

The
plaintiff duly applied for retirement under Resolution No. 31. In its
Resolution No. 8, approved on February 5, 1947, the board of directors
of the defendant approved the payment to the plaintiff of retirement
gratuity from October 20, 1940, to December 31, 1941, based on the
monthly salary of P150, the total amount received by the plaintiff,
under protest, being P179.20. The plaintiff, in his communication of
April 10, 1947, demanded from the defendant the payment of P1,401.23,
representing unpaid balance of this gratuity for service rendered from
October 20, 1940, to February 15, 1947, based on the highest basic rate
of salary of P250 per month. On April 16, 1947, the board of directors
of the defendant adopted Resolution No. 21, approving plaintiff’s claim
for retirement gratuity for his service from August 22, 1945, to
February 15, 1947, and, in accordance with said resolution, the
plaintiff received, under protest, the sum of P356.36, based on P200
per month as teh highest basic rate of salary. This second payment
included a difference due under the first payment which was computed
only on P150 per month. On June 17, 1947, the plaintiff addressed a
letter to the defendant, reiterating his right to retirement gratuity
for the entire period of his service, including the period covered by
the Japanese occupation. This demand was rejected by the defendant in
its letter of June 21, 1947, on the ground that the defendant lost
heavily during the war and had resolved to pay retirement gratuity to
its employees only up to December 31, 1941.

The present action
was instituted by the plaintiff in the Court of First Instance of
Manila to recover from the defendant the sum of P1,044.18,
representing unpaid retirement gratuity due and moving by the defendant
to the plaintiff for services rendered from October 20, 1940, to
February 15, 1947. the parties entered into a partial stipulation
reciting substantially the facts above related. After they had waived
their right to present additional evidence and submitted the case for
decision on the pleadings, the trial court absolved the defendant from
the complaint with respect to the gratuities already paid, and
dismissed the case, without prejudice, with respect to gratuities
corresponding to the period covered by the Japanese occupation, from
which judgment the plaintiff interposed the instant appeal.

The
defendant-appellee invokes the debt moratorium as regards the gratuity,
if any, due for services rendered during the Japanese occupation, and
the trial court appears to have sustained the defendant’s position.
This is error, because the defendant had already chosen to pay the
gratuity due from October 20, 1940, to December 31, 1941, which is also
covered by the debt moratorium. Moreover, plaintiff’s guilty became a
monetary obligation of the defendant only when its board of directors
approved the retirement on February 5, 1947, or after Manila had been
freed from enemy occupation and control, and is therefore not covered
by the debt moratorium.

It is contended that the plaintiff
cannot assail the finding of fact of the trial court that the plaintiff
received gratuities corresponding to 1940 and 1941 and to the period
from August 22, 1945, to February 15, 1947, because he has appealled to
the Supreme Court purely on questions of law. This is erroneous. The
payments already made to the plaintiff and the period intended to be
covered by said payments, are admitted by the plaintiff. He, however,
has the right to contend, as a question of law, that the trial court
erred in basing the computation of said payments on P200 per month, and
not on P250 per month.

It is immaterial, contrary to
intimations of the defendant, whether plainitff’s employment was
continuous, because Resolution No. 31, upon which defendant’s claim is
founded, does not require continuous service in order that an employee
may be entitled to retirement gratuity.

Defendant also argues
that gratuity is no a right and may be withdrawn at any time by the
defendant. Assuming that the defendant may at pleasure abolish its
retirement system, the facts in this case do no reveal that the
defendant has ever resolved to withdraw the benefits bestowed by
Resolution No. 31. Indeed, defendant’s contention is inconsistent with
the circumstance that it paid to the plaintiff gratuity for the period
subsequent to the Japanese occupation, namely, form the August 22,
1945, to February 15, 1947. This payment is also inconsistent with the
contention that the defendant had resolved to pay retirement gratuities
only up to December 31, 1941.

As Resolution No. 31 plainly
provides that the gratuity must be computed on the highest basic rate
of salary, the gratuity to which the plaintiff is entitled for the
entire period of his employment must be based on P250 per month. It is,
however, argued that said monthly salary of P250 should not be taken as
a basis, because it was paid in Japanese military notes which were of a
much lower value than the Philippine currency. Resolution No. 31 makes
no specification of the currency with which the retirement gratuity is
to be paid. The distinction is therefore not important. Moreover, the
monthly salary of P250 was given to the plaintiff beginning August 1,
1943, not because of the low purchasing power of the then Philippine
peso but because the plaintiff was appointed secretary-treasurer of the
defendant, a position undoubtedly much higher than the other positions
held by the plaintiff.

In view of the fact that Resolution No.
31 provides that the gratuity should be one month’s salary for each
year of service, and the proportionate amount of any fraction thereof,
the plaintiff is entitled to collect gratuity only for the service
actually rendered by him, that is, excluding the period during which,
according to the stipulation, the defendant was closed.

It
being necessary to determine the exact period during which the
plaintiff had rendered actual service to the defendant, and the
corresponding amount still due him as gratuity for said period, which
are matters of fact, the case has to be, as it is hereby, remanded to
the lower court for further proceedings in conformity with this
decision. So ordered, without costs.

Moran, C.J., Feria Pablo, Bengzon, Tuason, and Reyes, JJ., concur.