G.R. No. L-28093. January 30, 1971
BASILIA BERDIN VDA. DE CONSUEGRA; JULIANA, PACITA, MARIA LOURDES, JOSE JR., RODRIGO, LINEDA, AND LUIS, ALL SURNAMED CONSUEGRA, PETITIONERS AND APPELLANTS, VS. GOVERNMENT SERVICE…
ZALDIVAR, J.:
Appeal on purely questions or law from the decision of the Court
of First Instance of Surigao del Norte, dated March 7, 1967, in its Special
Proceeding No. 1720.
The pertinent facts, culled from the stipulation of facts
submitted by the parties, are the following:
The late Jose Consuegra, at the time of
his death, was employed as a shop foreman of the office of the District
Engineer in the province of Surigao del Norte. In his lifetime, Consuegra
contracted two marriages, the first with herein respondent Rosario Diaz, solemnized
in the parish church of San Nicolas de Tolentino, Surigao, Surigao, on July 15,
1937, out of which marriage
were born two children, namely, Jose Consuegra, Jr.
and Pedro Consuegra, but both predeceased their
father; and the second, which was contracted in good faith while the first
marriage was subsisting, with herein petitioner Basilia
Berdin, on May 1, 1957 in the same parish and
municipality, out of which marriage
were born seven children, namely, Juliana, Pacita,
Maria Lourdes, Jose, Rodrigo, Lenida and Luz,*
all surnamed Consuegra.
Being a member of the Government Service Insurance System (GSIS, for short) when Consuegra died on September 26, 1965, the proceeds of his
life insurance under policy No.
601801 were paid by the GSIS to petitioner Basilia Berdin and her children who were the beneficiaries named
in the policy. Having been in the
service of the government for 22.5028 years, Consuegra
was entitled to retirement insurance benefits in the sum of P6,304.47 pursuant
to Section 12(c) of Commonwealth Act 186 as amended by Republic Acts 1616 and
3836. Consuegra
did not designate any beneficiary who would receive the retirement insurance
benefits due to him. Respondent Rosario
Diaz, the widow by the first marriage,
filed a claim with the GSIS asking that the retirement insurance benefits be paid to her as the only legal heir of Consuegra,
considering that the deceased did not designate any beneficiary with
respect to his retirement insurance
benefits. Petitioner Basilia
Berdin and her children, likewise, filed a
similar claim with the GSIS, asserting that being the beneficiaries named in the life insurance
policy of Consuegra, they are the only ones entitled to
receive the retirement insurance
benefits due the deceased Consuegra. Resolving the conflicting claims, the
GSIS ruled that the legal heirs of the late Jose Consuegra were Rosario Diaz, his widow by his first
marriage who is entitled to one-half, or 8/16, of the retirement insurance
benefits, on the one hand; and Basilia Berdin, his widow by the second marriage and their seven children, on the other
hand, who are entitled to the
remaining one-half, or 8/16, each of them
to receive an equal share of 1/16.
Dissatisfied with the foregoing ruling and apportionment made by
the GSIS, Basilia Berdin
and her children[1]
filed on October 10, 1966 a
petition for mandamus with preliminary injunction in the Court of First
Instance of Surigao, naming as respondents the GSIS,
the Commissioner of Public Highways, the Highway District Engineer of Surigao del Norte, the Commissioner of Civil Service, and Rosario Diaz,
praying that they (petitioners therein) be declared the legal heirs and
exclusive beneficiaries of the retirement insurance of the late Jose Consuegra, and that a writ of preliminary injunction be
issued restraining the implementation of the adjudication made by the
GSIS. On October 26, 1966, the trial court issued an order
requiring therein respondents to file their respective answers, but refrained
from issuing the writ of preliminary injunction prayed for. On February
11, 1967, the parties submitted a stipulation of facts, prayed that
the same be admitted and approved and that judgment be rendered on the basis of
the stipulation of facts. On March 7, 1967, the
court below rendered judgment, the pertinent portions of which are quoted
hereunder:
“This Court, in conformity with the foregoing stipulation of
facts, likewise is in full accord with
the parties with respect to the authority cited by them in support of
said stipulation and which is herein-below cited for purposes of this judgment, to wit:
‘When two women innocently and in good faith are legally united in
holy matrimony to the same man, they and their children, born of said wedlock,
will be regarded as legitimate children and each family be entitled to one half
of the estate. Lao & Lao vs. Dee Tim, 45
Phil. 739; Estrella vs. Laong Masa, Inc., (CA) 39 OG 79; Pisalbon v. Bejec, 74 Phil. 88.
“WHEREFORE, in view of the above premises, this Court is of
the opinion that the foregoing stipulation of facts is in order and in
accordance with law and the same is hereby approved. Judgment, therefore, is hereby rendered declaring the petitioner Basilia
Berdin Vda. de Consuegra and her co-petitioners Juliana, Pacita, Maria Lourdes, Jose Jr., Rodrigo, Lenida and Luis, all surnamed Consuegra,
beneficiary and entitled to one-half (1/2), of the retirement benefit in the
amount of Six Thousand Three Hundred Four Pesos and Fourty-Seven
Centavos (P6,304.47) due to the deceased Jose Consuegra
from the Government Service Insurance System or the amount of P3,152.235 to be
divided equally among them in the proportional amount of 1/16 each. Likewise,
the respondent Rosario Diaz Vda. de Consuegra is hereby declared beneficiary and entitled to the other half of the retirement
benefit of the late Jose Consuegra or the amount of
P3,152.235. The case with respect to the
Highway District Engineer of Surigao del Norte is
hereby ordered dismissed.”
Hence the present appeal by herein petitioners-appellants, Basilia Berdin and her children.
It is the contention of appellants that the lower court erred in
not holding that the designated beneficiaries in the life insurance of the late
Jose Consuegra are also the exclusive beneficiaries
in the retirement insurance of said deceased.
In other words, it is the submission of appellants that because the deceased Jose Consuegra
failed to designate the beneficiaries in his retirement insurance, the
appellants who were the beneficiaries named in the life insurance should
automatically be considered the beneficiaries
to receive the retirement insurance benefits, to the exclusion of
respondent Rosario Diaz. From the arguments adduced by
appellants in their brief We gather that it is their stand that the system of
life insurance and the system of retirement insurance, are provided for in
Commonwealth Act 186 as amended, are simply
complementary to each other, or that one is a part or an extension of the
other, such that whoever is named the beneficiary in the life insurance is also the beneficiary in the retirement insurance when no such
beneficiary is named in the retirement insurance.
The contention of
appellants is untenable.
It should be noted that the law creating the Government Service
Insurance System is Commonwealth Act 186 which was enacted by the National
Assembly on November 14, 1936. As originally approved, Commonwealth Act 186
provided for the compulsory membership in the Government Service Insurance
System of all regularly and permanently appointed officials and employees of
the government, considering as automatically insured on life all such officials
and employees, and issuing to them the corresponding membership policy under
the terms and conditions as provided in the Act.[2]
Originally, Commonwealth Act 186 provided for life insurance
only. Commonwealth Act 186 was amended
by Republic Act 660 which was enacted by the Congress of the Philippines on
June 16, 1951, and, among others the amendatory
Act provided that aside from the system of life insurance under the Government
Service Insurance System there was also established the system of retirement
insurance. Thus, We will note in
Republic Act 660 that there is a chapter on life insurance and another chapter
on retirement insurance.[3] Under the chapter on life insurance are
sections 8,9 and 10 of Commonwealth Act 186, as amended;
and under the chapter on retirement insurance are sections 11, 12, 13 and
13-A. On May 31, 1957, Republic Act 1616 was enacted by Congress,
amending section 12 of Commonwealth Act 186 as amended by Republic Act 660, by
adding thereto two new subsections, designated as subsections (b) and (c). This subsection (c) of section 12 of Commonwealth
Act 186, as amended by Republic Acts 660, 1616 and 3096, was again amended by
Republic Act 3836 which was enacted
on June 22, 1963. The pertinent provisions or subsection (c) of Section 12 of Commonwealth Act 186, as thus amended
and reamended, read as follows:
“(c) Retirement is likewise allowed to a member,
regardless of age, who has rendered at least twenty years of service. The benefit shall, in addition to the return
of his personal contributions plus interest and the payment of the corresponding
employer’s premiums described in subsection (a) or Section 5 hereof, without interest, be only a gratuity
equivalent to one month’s salary for every year of service, based on the
highest rate received, but not to exceed twenty four months; Provided, That the retiring officer or employee has been in the service
of the said employer or office for at least four years, immediately preceding
his retirement.
x x x x
“The gratuity is payable by the employer or office concerned which
is hereby authorized to provide the necessary appropriation to pay the same
from any unexpended items of appropriations or savings in its appropriations.
“Elective or appointive officials and employees paid gratuity under this subsection
shall be entitled to the commutation of the unused vacation and sick leave,
based on the highest rate received, which they may have to their credit at the
time or retirement.”
Jose Consuegra died on September 26,
1965, and so at the time of his death he had acquired rights under the
above-quoted provisions of subsection (c) of Section 12 of Com. Act 186, as
finally amended by Rep. Act 3836 on June 22, 1963. When Consuegra died
on September 26, 1965, he had to his credit 22.5028 years or service in the
government, and pursuant to the
above-quoted provisions of subsection (c) of Section 12 of Com. Act 186, as
amended, on the basis of the highest rate of salary received by him which was
P282.83 per month, he was entitled to receive retirement insurance benefits in
the amount of P6,304.47. This is the
retirement benefits that are the subject of dispute between the appellants, on
the one hand, and the appellee Rosario Diaz, on the
other, in the present case. The question
posed is: to whom should this retirement
insurance benefits or Jose Consuegra be paid, because
he did not, or failed to, designate the beneficiary of his retirement
insurance?
If Consuegra had 22.5028 years of
service in the government when he died on September 26, 1965, it follows that
he started in the government service sometime during the early part of 1943,
or before 1943. In 1943 Com. Act 186 was
not yet amended, and the only benefits then provided for in said Com. Act 186 were those that proceed from a life
insurance. Upon entering the government
service Consuegra became a compulsory member of the
GSIS, being automatically insured on his life, pursuant to the provisions of
Com. Act 186 which was in force at the time.
During 1943 the operation of the Government Service Insurance System
was suspended because of the war, and the operation was resumed sometime in
1946. When Consuegra
designated his beneficiaries in his life insurance he could not have intended
those beneficiaries of his life insurance as also the beneficiaries of his
retirement insurance because the provisions on retirement insurance under the
GSIS came about only when Com. Act 186 was amended by Rep. Act 660 on June 16,
1951. Hence, it cannot be said that
because herein appellants were designated beneficiaries in Consuegra’s
life insurance they automatically became the beneficiaries also of his retirement
insurance. Rep. Act 660 added to Com.
Act 186 provisions regarding retirement insurance, which are Sections 11, 12,
and 13 of Com. Act 186, as amended.
Subsection (b) of Section 11 of Com. Act 186, as amended by Rep. Act 660, provides as follows:
“(b) Survivors benefit. – Upon death before
he becomes eligible for retirement, his beneficiaries as recorded in the
application for retirement annuity filed with the System shall be paid his own premiums with interest or
three per centum per annum, compounded monthly. If on his death he is eligible for
retirement, then the automatic retirement annuity or the annuity chosen by him
previously shall be paid accordingly.”
The above-quoted provisions of subsection (b) of Section 11 of
Commonwealth Act 186, as amended
by Rep. Act 660, clearly indicate that there is need for the employee to file
an application for retirement insurance benefits when he becomes a member of
the GSIS, and
he should state in his application the beneficiary of his retirement
insurance. Hence, the beneficiary named
in the life insurance does nor automatically become the beneficiary in the
retirement insurance unless the same beneficiary in the life insurance is so
designated in the application for retirement insurance.
Section 24 of Commonwealth Act 186, as amended by Rep. Act 660,
provides for a life insurance fund and for a retirement insurance fund. There was no such provision in Com. Act 186
before it was amended by Rep. Act 660.
Thus, subsections (a) and (b) of Section 24 of Commonwealth Act 186, as
amended by Rep. Act 660, partly read as follows:
“(a) Life insurance fund. – This shall
consist of all premiums for life insurance benefit and/or earnings and
savings therefrom.
It shall meet death claims
as they may arise or such equities as any member may be entitled to, under the
conditions of his policy, and shall maintain the required reserves to the end
of guaranteeing the fulfillment of the life insurance contracts issued by the System….”
“(b) Retirement insurance fund. – This shall
consist of all contributions for retirement insurance benefit and of
earnings and savings therefrom. It shall meet annuity payments and establish the required reserves to the end of the
guaranteeing the fulfillment of the contracts issued by the System….”
Thus, We see that the GSIS offers two
separate and distinct systems of benefits to its members – one is the life
insurance and the other is the retirement insurance. These two distinct systems of benefits are
paid out from two distinct and separate funds that are maintained by the GSIS.
In the case of the
proceeds of a life insurance, the same are paid to whoever is named the
beneficiary in the life insurance policy.
As in the case of a life
insurance provided for in the Insurance Act (Act 2427, as amended), the
beneficiary in a life insurance under the GSIS may not necessarily be an heir
or the insured. The insured in a life
insurance may designate any person as beneficiary unless disqualified to be so under the
provisions of the Civil Code.[4] And in the absence of any beneficiary named
in the life insurance policy, the proceeds of the insurance will go to the
estate of the insured.
Retirement insurance is primarily intended for the benefit of the
employee – to provide for his old age, or incapacity, after rendering service
in the government for a required number of years. If the employee reaches the age of
retirement, he gets the retirement benefits even to the exclusion of the beneficiary
or beneficiaries named in his application for retirement insurance. The beneficiary of the retirement insurance
can only claim the proceeds of the retirement insurance if the employee dies
before retirement. If the employee failed
or overlooked to state the beneficiary of his retirement insurance, the
retirement benefits will accrue to his estate and will be given to his legal
heirs in accordance with law, as in the case of a life insurance if no
beneficiary is named in the insurance policy.
It is Our view, therefore, that the respondent GSIS had correctly
acted when it ruled that the proceeds of the retirement insurance of the late
Jose Consuegra should be divided equally between his
first living wife Rosario Diaz, on the one hand, and his second wife Basilia Berdin and his children
by her, on the other; and the lower court did not commit error when it
confirmed the action of the GSIS, it being accepted as a fact that the second
marriage of Jose Consuegra to Basilia
Berdin was contracted in good faith. The lower court has correctly applied the
ruling of this Court in the case of Lao, et al., vs. Dee Tim, et al., 45 Phil.
739, as cited in the stipulation of facts and in the decision appealed from.[5]
In the recent case of Gomez vs. Lipana, L-23214, June
30, 1970,[6]
this Court, in construing the rights of two women who were married to the same
man – a situation more or less similar to the case of appellant Basilia Berdin and appellee Rosario Diaz – held “that since the
defendant’s first marriage has not been dissolved or declared void the conjugal
partnership established by that marriage has not ceased. Nor has the first wife lost or relinquished
her status as putative heir of her husband under the new Civil Code, entitled
to share in his estate upon his death should she survive him. Consequently, whether as conjugal partner in
a still subsisting marriage or as such putative heir she has an interest in the
husband’s share in the property here in dispute….” And with respect to
the right of the second wife, this Court observed that although the second
marriage can be presumed to be void ab initio as it was celebrated while the first marriage
was still subsisting, still there is need for judicial declaration of such
nullity. And inasmuch as the conjugal
partnership formed by the second marriage was dissolved before judicial declaration
or its nullity, “[t]he only just and equitable solution in this case would
be to recognize the right of the second wife to her share of one-half in the
property acquired by her and her husband, and consider the other half as
pertaining to the conjugal partnership of the first marriage.”
WHEREFORE, the decision appealed from is affirmed, with
costs against petitioners-appellants.
IT IS SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Castro,
Fernando, Teehankee, Barredo,
Villamor, and Makasiar, JJ., concur.
* Editor’s Note : “Luis”
in the title of the case.
[1]
The minor children were represented by Basilia Berdin as their natural guardian.
[2]
Section 4 of Com. Act 186 as originally enacted. Under Section 2(d) of the Act a
“member” is an employee who is admitted into the Government Service
Insurance System in accordance with the provisions of Section 4 of the
Act. Under Section 8 of the Act every
member is granted a membership policy.
Under Section 2(f) a “membership policy shall mean a life insurance policy for an
amount, the annual premium of which is equivalent to six per centum of an employee’s basic annual salary or compensation….”
[3]
No such chapters were designated in
Com. Act 186 before it was amended by Rep. Act 660.
[4]
Article 2012 of the New Civil Code.
[5]
See also Pisalbon vs. Bejec,
74 Phil. 88.
[6]
33 SCRA 615.