MARIA U. ESPAÑOL, PETITIONER-APPELLEE, VS. THE CHAIRMAN AND MEMBERS OF THE BOARD OF ADMINISTRATORS, PHILIPPINE VETERANS ADMINISTRATION, RESPONDENTS-APPELLANTS.

Español versus Philippine Veterans Administration

The Case

This is a petition for review on certiorari brought by Maria U. Español against the Chairman and Members of the Board of Administrators of the Philippine Veterans Administration, now the Philippine Veterans Affairs Office. The widow of a veteran who died in the service during World War II, she sought by mandamus the restoration of the monthly pension that the agency had cancelled more than two decades earlier under an administrative policy later struck down by this Court. The case matters because it fixes when the ten-year prescriptive period begins to run against a beneficiary whose pension was withheld under an administrative regulation that carried a presumption of legality, and because it marks the limits of the doctrine requiring prior exhaustion of administrative remedies and of the appropriation objection to mandamus against a pension agency.

Procedural History

Maria U. Español filed a petition for mandamus with the Court of First Instance of Manila against the Philippine Veterans Administration, praying for the restoration and continued payment of her monthly pension, including that of her dependents, effective from the date of cancellation. The agency filed its answer admitting the factual issues, and the trial court rendered judgment on the pleadings on January 14, 1975, issuing the writ of mandamus and ordering the restoration of her monthly pension plus whatever increases are allowed by law, except that of her children who were then above eighteen years of age. The Philippine Veterans Administration appealed to the Court of Appeals, which elevated the appeal to the Supreme Court because only errors or questions of law were involved.

Facts

Maria U. Español was the widow of German Español, a veteran who died in the service during World War II. She applied for a monthly pension under Republic Act Number 65 with the Philippine Veterans Administration, her application was approved, and she received her monthly pension while her minor children received their monthly dependent's pension.

On November 1, 1951, the Philippine Veterans Administration, in pursuance of its administrative policy that beneficiaries of veterans already receiving pensions from the United States Veterans Administration are no longer entitled to receive a pension from the Philippine agency, cancelled her monthly pension and that of her then minor children.

On February 25, 1974, or after more than twenty-two years from the cancellation, she filed her petition for mandamus with the Court of First Instance of Manila. In the meantime, in the case of Del Mar versus the Philippine Veterans Administration, promulgated on June 27, 1973, this Court had declared the questioned administrative policy invalid.

Issues

• Whether or not the action to compel the restoration of the monthly pension has already prescribed, the petition having been filed more than ten years from the date of cancellation.
• Whether or not the action for mandamus may prosper despite the absence of a prior demand on the agency and of exhaustion of administrative remedies.
• Whether or not mandamus may issue to compel the resumption of the monthly pension notwithstanding the ruling that disbursement of public funds must be covered by a corresponding appropriation.

Applicable Provisions

Article 1144 of the New Civil Code provides:

Actions based on an obligation created by law shall be brought within 10 years from the time the right of action accrues.

This fixes the ten-year period for the widow's claim, which arises from an obligation created by law, and makes decisive the question of when her right of action accrued.

Ruling

On the first issue, the Court held that the action had not prescribed. The right of action accrues when there exists a cause of action, which consists of three elements: a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; an obligation on the part of the defendant to respect such right; and an act or omission on the part of such defendant violative of the right of the plaintiff. It is only when the last element occurs or takes place that it can be said in law that a cause of action has arisen. The widow could not be said to have a cause of action on November 1, 1951, because the act of cancellation, being pursuant to an administrative policy, could not then be considered a violation of her right to receive her monthly pension. Administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce have the force of law, are entitled to great respect, and have in their favor a presumption of legality. The cancellation being presumed legal and valid, it could not be taken as a violation of her right under Republic Act Number 65. It was only when this Court declared the questioned administrative policy invalid in Del Mar versus the Philippine Veterans Administration, promulgated on June 27, 1973, that the presumption of legality was rebutted and it could be said with certainty that the agency's act violated her right. The ten-year prescriptive period should therefore be counted from June 27, 1973, and not from November 1, 1951; the action brought on February 25, 1974 was well within the period.

On the second issue, the Court held that the objection of failure to exhaust administrative remedies was without merit. When a case involves solely legal questions, the litigant need not exhaust all administrative remedies before judicial relief is sought.

On the third issue, the Court held that the appropriation objection was untenable. The Agcaoili case was inapplicable, because the action there was to compel payment of the additional benefits provided for by Republic Act Number 5753, and Congress had made no actual appropriations to cover all increased claims under that law. Here the widow did not seek to recover increased benefits under Republic Act Number 5753, but the restoration of her monthly pension and her children's monthly dependent's pension provided for by Republic Act Number 65, as amended, the coverage of which Congress had already appropriated funds for. Besides, Republic Act Number 5753, covering disabled veterans, is alien to her claim for benefits due to her as a surviving spouse of a deceased veteran. The action for mandamus therefore existed.

Doctrine

A cause of action arises only when all three of its elements concur, and it is only when the last element occurs that the ten-year prescriptive period under Article 1144 of the New Civil Code begins to run. Where the act complained of was done pursuant to an administrative regulation or policy, that act carries a presumption of legality and cannot be treated as a violation of the claimant's right until the policy is judicially declared invalid; the prescriptive period is counted from the promulgation of the decision striking down the policy. A litigant need not exhaust administrative remedies when the case involves solely legal questions. Mandamus lies to compel the restoration of a pension already covered by an existing appropriation, and the appropriation objection does not apply where the claimant does not seek increased benefits under a later law for which Congress made no appropriation.

Disposition

The Court found the appeal without merit and amended the decision of the trial court, ordering the Philippine Veterans Administration to pay Maria U. Español her monthly pension plus whatever increments may be provided by law, effective November 1, 1951, as long as she qualifies, and to pay her qualified minor children their monthly dependent's pension plus whatever increments may be provided by law, effective November 1, 1951, with costs against the respondent-appellant.

Remember This

The single line worth memorizing is that the ten-year period to question a pension cancellation runs not from the cancellation but from the promulgation of the decision declaring the administrative policy invalid, because until then the policy is presumed legal. Examiners like to use this case on the accrual of a cause of action and prescription under Article 1144, and on the exceptions to the exhaustion of administrative remedies and to the appropriation requirement for mandamus against a pension agency.